-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Iha/to94KXPbhmO2JcukpdC5rwz6N3YyyO+q/Plqe2MwnLkFtKr5+1gz1cDEGdAX ACqY30QHhWg0cSNW9Zes3w== 0000950129-99-005141.txt : 19991122 0000950129-99-005141.hdr.sgml : 19991122 ACCESSION NUMBER: 0000950129-99-005141 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19990930 FILED AS OF DATE: 19991119 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BARGO ENERGY CO CENTRAL INDEX KEY: 0000051072 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 870239185 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-08609 FILM NUMBER: 99761342 BUSINESS ADDRESS: STREET 1: 700 LOUISIANA, SUITE 3700 CITY: HOUSTON STATE: TX ZIP: 77002 BUSINESS PHONE: 7132369792 MAIL ADDRESS: STREET 1: 700 LOUISIANA SUITE 3700 CITY: HOUSTON STATE: TX ZIP: 77002 FORMER COMPANY: FORMER CONFORMED NAME: FUTURE PETROLEUM CORP/UT/ DATE OF NAME CHANGE: 19940401 FORMER COMPANY: FORMER CONFORMED NAME: INTERMOUNTAIN EXPLORATION CO DATE OF NAME CHANGE: 19920703 10QSB 1 BARGO ENERGY COMPANY - DATED SEPTEMBER 30, 1999 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB (Mark One) [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1999 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________ to ______________ Commission file number 0-8609 Bargo Energy Company (Exact name of small business issuer as specified in charter) Texas 87-0239185 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 700 Louisiana, Suite 3700 Houston, Texas 77002 (Address of principal executive offices) (Zip Code) (713)236-9792 (Issuer's telephone number, including area code) Check whether the issuer (1) filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [x] No [ ] APPLICABLE ONLY TO CORPORATE ISSUERS: The Company had approximately 92,173,000 shares of common stock, par value $0.01 per share, issued and outstanding as of November 15, 1999. Transitional Small Business Disclosure Format (Check One): Yes No X 2 PART I FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS The condensed consolidated financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. However, in the opinion of management, all adjustments (which consist only of normal recurring adjustments) necessary for a fair statement of the financial position and results of operations for the periods presented have been made. These condensed consolidated financial statements should be read in conjunction with financial statements and the notes thereto included in the Company's Form 10-KSB filing for the year ended December 31, 1998. 3 BARGO ENERGY COMPANY AND SUBSIDIARIES (FORMERLY FUTURE PETROLEUM CORPORATION AND SUBSIDIARIES) CONSOLIDATED BALANCE SHEET
September 30, 1999 December 31, 1998 (unaudited) ASSETS CURRENT ASSETS Cash and cash equivalents $ 1,146,000 $ 1,241,000 Trade accounts receivable, no allowance for doubtful accounts considered necessary: Joint interest billings 12,000 -- Accrued oil and gas sales 4,373,000 2,636,000 Advance to related party 20,000 8,000 ------------ ------------ TOTAL CURRENT ASSETS 5,551,000 3,885,000 ------------ PROPERTY AND EQUIPMENT Oil and gas properties, full cost method 73,476,000 45,992,000 Other 713,000 648,000 ------------ ------------ TOTAL PROPERTY AND EQUIPMENT 74,189,000 46,640,000 ------------ ------------ Less accumulated depletion, depreciation and amortization (3,975,000) (1,566,000) ------------ ------------ NET PROPERTY AND EQUIPMENT 70,214,000 45,074,000 OTHER ASSETS Goodwill, net 1,842,000 1,984,000 Loan costs, net 914,000 965,000 Mining properties held for sale 40,000 40,000 Other 1,000 -- ------------ ------------ TOTAL OTHER ASSETS 2,797,000 2,989,000 ------------ ------------ TOTAL ASSETS $ 78,562,000 $ 51,948,000 ============ ============
4 LIABILITIES AND STOCKHOLDERS' EQUITY
September 30, 1999 December 31, 1998 (unaudited) CURRENT LIABILITIES Current portion of long-term debt $ 9,000 $ 8,952,000 Trade accounts payable 2,748,000 1,457,000 Accrued oil and gas proceeds payable 393,000 514,000 Accrued interest payable 190,000 430,000 Advance from related party 1,000 566,000 ------------ ------------ TOTAL CURRENT LIABILITIES 3,341,000 11,919,000 ------------ ------------ LONG TERM DEBT, less current portion 19,605,000 30,907,000 DEFERRED TAX LIABILITY 594,000 1,011,000 ------------ ------------ REDEEMABLE PREFERRED STOCK, 10% cumulative dividend; $.01 par value; 5,000,000 and 0 shares authorized, issued and outstanding at September 30, 1999 and December 31, 1998, respectively 51,935,000 0 ------------ ------------ STOCKHOLDERS' EQUITY Series A Preferred stock, $.01 par value, 0 and 200,000 shares authorized; 0 and 100,000 shares issued and outstanding at September 30, 1999 and December 31, 1998, respectively 0 1,000 Common stock, $.01 par value; 120,000,000 and 30,000,000 shares authorized; 91,830,544 and 22,320,066 shares issued; 91,830,544 and 22,320,066 shares outstanding at September 30, 1999 and December 31, 1998, respectively 918,000 223,000 Additional paid-in capital 3,657,000 6,543,000 Treasury stock (87,000) -- Retained earnings (deficit) (1,400,000) 1,344,000 ------------ ------------ TOTAL STOCKHOLDERS' EQUITY 3,088,000 8,111,000 ------------ ------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 78,562,000 $ 51,948,000 ============ ============
5 BARGO ENERGY COMPANY AND SUBSIDIARIES (FORMERLY FUTURE PETROLEUM CORPORATION AND SUBSIDIARIES) CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended September 30, --------------------------------- 1999 1998 ------------ ------------ REVENUES Oil and gas sales $ 4,514,951 $ 812,326 Hedge gain (loss) (211,400) 0 ------------ ------------ TOTAL REVENUES 4,303,551 812,326 ------------ ------------ COSTS AND EXPENSES Lease operations and production taxes 1,869,260 488,305 General and administrative 709,186 70,300 Depletion, depreciation and amortization 386,090 166,443 ------------ ------------ TOTAL EXPENSES 2,964,536 725,048 ------------ ------------ OTHER INCOME Interest expense (221,402) (124,385) Interest income 1,642 921 Miscellaneous income -0- 1,422 ------------ ------------ TOTAL OTHER INCOME AND (EXPENSE) (219,760) (122,042) ------------ ------------ INCOME (LOSS) BEFORE INCOME TAXES 1,119,255 (34,764) DEFERRED INCOME TAX BENEFIT (EXPENSE) (380,000) 12,000 ------------ ------------ NET INCOME (LOSS) 739,255 (22,764) ------------ ------------ REDEEMABLE PREFERRED STOCK DIVIDENDS 1,277,009 -0- ------------ ------------ NET INCOME (LOSS) ALLOCABLE TO COMMON SHAREHOLDERS $ (537,754) $ (22,764) ============ ============ NET INCOME (LOSS) ALLOCABLE PER COMMON SHARE - BASIC AND DILUTED (.006) (.002) ------------ ------------ WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 91,830,544 9,708,000 ------------ ------------
6 BARGO ENERGY COMPANY AND SUBSIDIARIES (FORMERLY FUTURE PETROLEUM CORPORATION AND SUBSIDIARIES) CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Nine Months Ended September 30, --------------------------------- 1999 1998 ------------ ------------ REVENUES Oil and gas sales $ 9,651,232 $ 1,902,855 Hedge gain (loss) (131,500) 0 ------------ ------------ TOTAL REVENUES 9,519,732 1,902,855 ------------ ------------ COSTS AND EXPENSES Lease operations and production taxes 4,187,264 1,131,754 General and administrative 2,376,692 290,953 Depletion, depreciation and amortization 2,558,658 368,756 ------------ ------------ TOTAL EXPENSES 9,122,614 1,791,463 ------------ ------------ OTHER INCOME Interest expense (1,630,536) (406,511) Interest income 6,656 3,639 Miscellaneous income -0- 12,382 ------------ ------------ TOTAL OTHER INCOME AND (EXPENSE) (1,623,880) (390,490) ------------ ------------ INCOME (LOSS) BEFORE INCOME TAXES (1,226,762) (279,098) DEFERRED INCOME TAX BENEFIT (EXPENSE) 417,000 98,000 ------------ ------------ NET INCOME (LOSS) (809,762) (181,098) ------------ ------------ REDEEMABLE PREFERRED STOCK DIVIDENDS 1,934,543 -0- ------------ ------------ NET INCOME (LOSS) ALLOCABLE TO COMMON SHAREHOLDERS $ (2,744,305) $ (181,098) ============ ============ NET INCOME (LOSS) ALLOCABLE PER COMMON SHARE - BASIC AND DILUTED (.039) (.026) ------------ ------------ WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 70,622,270 7,053,000 ------------ ------------
7 BARGO ENERGY COMPANY AND SUBSIDIARIES (FORMERLY FUTURE PETROLEUM CORPORATION AND SUBSIDIARIES) CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Nine Months Ended September 30, --------------------------------- 1999 1998 ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ (809,762) $ (181,098) Adjustments to reconcile net income (loss) to cash provided by operating activities: Depletion, depreciation, and amortization 2,558,658 368,756 Amortization of debt issue costs 153,909 -0- Deferred income taxes (417,000) (98,000) ------------ ------------ Net cash provided by (used in) operating Activities before changes in working capital 1,485,805 89,658 Change in working capital items: Decrease (increase) in accounts receivable (1,748,915) (518,418) Increase in advances to related parties (11,874) -0- Increase (decrease) in accounts payable and accrued liabilities 929,712 556,638 Decrease in advances from related parties (564,900) -0- Other (7,877) (11,471) ------------ ------------ NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 81,951 116,407 ------------ ------------ CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of oil and gas properties (27,484,342) (7,187,420) Additions to property and equipment (64,968) -0- ------------ ------------ NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (27,549,310) (7,187,420) ------------ ------------ CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of debt 17,760,262 8,773,594 Purchase of treasury stock (90,314) -0- Repayment of long-term debt (38,005,522) (1,820,787) Proceeds from issuance of stock 50,000,000 251,086 Stock issuance costs (2,198,534) -0- Loan costs (102,977) -0- Proceeds from exercise of stock options 10,071 -0- ------------ ------------ NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 27,372,986 7,203,893 ------------ ------------ NET INCREASE (DECREASE) IN CASH (94,373) 132,880 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 1,241,000 292,931 ------------ ------------ CASH AND CASH EQUIVALENTS, END OF PERIOD $ 1,146,627 $ 425,811 ============ ============ SUPPLEMENTAL INFORMATION: Cash paid during the period for interest $ 1,707,501 $ 406,511 ============ ============
8 BARGO ENERGY COMPANY AND SUBSIDIARIES (FORMERLY FUTURE PETROLEUM CORPORATION AND SUBSIDIARIES) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1: THE COMPANY Bargo Energy Company (the "Company" or "Bargo") is engaged through its subsidiaries and subsidiary partnerships in the development of oil and natural gas properties located onshore, primarily in the Gulf Coast Region (Texas and Louisiana) and California. The Company's principal business strategies include (i) maximizing the value of its existing high-quality, long-life reserves through efficient operating and marketing practices, (ii) conducting detailed field studies using the newest technology to identify additional reserves and exploration potential, and (iii) seeking acquisitions of producing properties, with exploration and development potential in areas where the Company has operating experience and expertise. On April 26, 1999 (the "Effective Date"), Future Petroleum Corporation, a Utah corporation ("Future"), merged with Bargo Energy Company, a Texas corporation ("Bargo"). Bargo was incorporated under the name FPT Corporation on January 26, 1999 as a wholly owned subsidiary of Future, solely for the purpose of reincorporating Future in Texas. The reincorporation occurred pursuant to a merger agreement dated April 6, 1999 entered into between Future and Bargo ("Merger Agreement"). In accordance with the terms of the Merger Agreement, Future merged into Bargo, with Bargo as the surviving corporation. On the Effective Date, each of the 22,320,066 shares of common stock of Future outstanding were converted into one share of Bargo's common stock and each of the 100,000 shares of preferred stock of Future outstanding were converted into one share of Bargo preferred stock. The reincorporation merger increased the Company's authorized capital stock from 30.2 million shares to 125 million shares. The articles of incorporation of Bargo authorize 125 million shares of capital stock, of which 120 million shares are common stock and 5 million shares are preferred stock. Future's articles of incorporation authorized 30 million shares of common stock and 200,000 shares of preferred stock. In addition to the conversion of the Future common shares into Bargo common shares and the issuance of common stock as described in Note 2 below, Bargo converted each of the 100,000 shares of Bargo Series A preferred stock to 260 shares of Bargo common stock (26,000,000 common shares were issued) during the nine months ended September 30, 1999. Note 2: PREFERRED STOCK ISSUANCE On May 14, 1999, the Company closed a transaction pursuant to which it issued and sold to Kayne Anderson Energy Fund, L.P. ("Kayne"), BancAmerica Capital Investors SBIC I, L.P. ("BancAmerica"), Eos Partners, L.P., Eos Partners SBIC, L.P., Eos Partners SBIC II, L.P. (collectively, "Eos"), Energy Capital Investment Company PLC, EnCap Energy Capital Fund III-B, L.P., BOCP Energy Partners, L.P., EnCap Energy Capital Fund III, L.P. (collectively, "EnCap") and SGC Partners II LLC ("SGC" and together with Kayne, BancAmerica, Eos, EnCap and 9 SGC, the "Investors") shares of a newly created class of preferred stock. Five million shares of the Company's Cumulative Redeemable Preferred Stock, Series B ("Preferred Stock") were issued in exchange for an aggregate purchase price of $50 million. As additional consideration, the Company issued an aggregate of 43,815,810 shares of its common stock to the Investors equal to 40% of the outstanding common stock (on a fully diluted basis). If the Company redeems all of the outstanding shares of Preferred Stock prior to May 14, 2001, the Investors must sell back to the Company 12.5% of the shares of Common Stock originally issued to the Investors. Dividends on the Preferred Stock equal to 10% per annum are payable quarterly. The dividend rate is subject to increase (but in no event to more than 16%) or decrease (but in no event to less than 10%) based upon the Company's ratio of assets to liabilities which is calculated on January 1 and July 1 of each year or at such other time as requested by the Investors. As of July 1, 1999 the dividend rate on the preferred stock is 10%. The Preferred Stock may be redeemed at any time by the Company and must be redeemed upon the occurrence of certain events, including upon the fifth anniversary of the issue date or upon a change of control. The Preferred Stock is redeemable for $50 million and unpaid cumulative dividends. A change of control is deemed to occur upon any merger, reorganization, purchase or sale of more than 50% of the Company's voting securities, the sale of substantially all of the assets of the Company or at any time Tim Goff ceases to serve as the Company's Chief Executive Officer. The Company is prohibited from taking certain actions, including authorizing, creating or issuing any shares of capital stock, amending the articles of incorporation of the Company and authorizing a merger or change of control, without the consent of the holders of a majority of the outstanding shares of Preferred Stock. As of September 30, 1999, holders of shares of the Series B Preferred were entitled to receive, when, and if declared by the Board of Directors, as legally available, cumulative dividends totaling $1,934,543. Note 3: CREDIT FACILITY Bargo had an original credit facility which at December 31, 1998 had a commitment amount of $50 million subject to a borrowing base as determined by Bank of America on an acquisition by acquisition basis. The Credit Agreement was comprised of two Tranches, Tranche A and Tranche B. The Company had a choice of two different interest rates under the Tranche A loan, the Base Rate or the LIBO Rate. Interest under Base Rate loans were at the higher of the lender's "Reference Rate" or the Federal Funds Rate plus .5%. Interest under LIBO Rate loans were at the LIBO rate (reserve adjusted) plus 2%. The Company could convert any portion of the outstanding debt from one interest rate type to another in increments of $50,000 with a minimum transfer amount of $250,000. At December 31, 1998, the Tranche A loan commitment amount was $38 million of which $30.9 million had been borrowed and the Tranche B loan commitment amount was $12 million, of which $8.945 million had been borrowed. In connection with the May 14, 1999 equity transaction, on May 17, 1999, the Company repaid $9.6 million, the full amount then outstanding under Tranche B and paid down Tranche A to $2.5 million. 10 On September 30, 1999 the Company amended and restated the Credit Agreement to increase the commitment from Bank of America and two additional banks to $100 million. The three-year revolver has an initial borrowing base of $40 million increasing to $55 million upon the resolution of certain preferential purchase rights associated with the September 1999 Arco East Texas acquisition. The Company has a choice of two different interest rates; the Base Rate or the LIBO Rate. The debt bears interest under the Base Rate (which is the higher of the lender's "Prime Rate" or the Federal Funds Rate plus .5%) plus an applicable margin of .75%. The debt bears interest under the LIBO Rate at the LIBO rate (reserve adjusted) plus 1.75%. The Company may convert any portion of the outstanding debt from one interest rate type to another in increments of $500,000 with a minimum transfer amount of $1,000,000. Borrowings under the Credit Agreement are approximately $19.6 million as of September 30, 1999. Note 4: PROPERTY ACQUISITIONS On September 13, 1999, the Company acquired interests in 40 leases, a waterflood unit, over 60 royalty properties and an oil transportation contract in the East Texas Field from Atlantic Richfield Company. The purchase price was $16 million. The Company utilized the Credit Facility to acquire the properties. The following Bargo Energy Company pro forma information gives effect to the acquisition of the properties as if they had been acquired January 1, 1998:
Nine months ended September 30 1999 1998 ------------------------- (amounts in thousands except per share amount) Revenues $ 20,630 $ 15,815 Net Income (Loss) $ (1,633) $ 1,840 Net Income (Loss) per Common share - Basic and Diluted $ (.02) $ .26
Note 5: STOCK INCENTIVE PLAN In May 1999 the Board of Directors adopted the 1999 Stock Incentive Plan which provides for stock options to be granted to employees with exercise prices not less than the fair market value of the underlying common stock. These options will have a term of 10 years from the date of grant and will vest over a three year period from the date of grant. During the nine months ended September 30, 1999 approximately 22 million options were granted under this plan to employees of the company at exercise prices ranging from $.10 to $.25 per share. Note 6: EARNINGS (LOSS) PER COMMON SHARE Net income or loss per common share is based on the weighted average number of common shares outstanding. The Company's common stock equivalents, which consisted of stock options and warrants, were antidilutive in the three and nine months ended September 30, 1999 and 1998. 11 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This report includes "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended ("Exchange Act"). All statements other than statements of historical fact included in the Report (and the exhibits hereto), including without limitation, statements regarding the Company's financial position and estimated quantities and net present values of reserves, are forward looking statements. The Company can give no assurances that the assumptions upon which such statements are based will prove to have been correct. Important factors that could cause actual results to differ materially from the Company's expectations ("Cautionary Statements") are disclosed in the section "Risk Factors" included in the Company's Forms 10-KSB and other periodic reports filed under the Exchange Act, which are herein incorporated by reference. All subsequent written and oral forward looking statements attributable to the Company or persons acting on its behalf are expressly qualified by the Cautionary Statements. THE COMPANY Bargo Energy Company (the "Company" or "Bargo") is engaged through its subsidiaries and subsidiary partnerships in the development of oil and natural gas properties located onshore primarily in the Gulf Coast Region (Texas and Louisiana) and California. The Company's principal business strategies include (i) maximizing the value of its existing high-quality, long-life reserves through efficient operating and marketing practices, (ii) conducting detailed field studies using the newest technology to identify additional reserves and exploration potential, and (iii) seeking acquisitions of producing properties, with exploration and development potential in areas where the Company has operating experience and expertise. In September 1999 the Company closed a $100 million bank revolving line of credit to supplement its $50 million private equity financing in May 1999. Bargo and its management team intend to continue its efforts to aggressively grow the Company's resource base both through oil and gas property acquisitions and corporate consolidations. As of December 31, 1998, the Company owned estimated net proved reserves of approximately 15,145,000 barrels of oil equivalent. Per the Company's July 1, 1999 mid year reserve report the Company owned estimated net proved reserves of approximately 21,288,000 barrels of oil equivalent. This represents a 40% increase in total net proved reserves over December 31, 1998. This increase is attributable to the Company's active acquisition program. Approximately 57% of the Company's reserves are proved developed producing reserves. Quantities stated as equivalent barrels of oil reserves are based on a factor of six mcf of natural gas per barrel of oil. 12 In August 1999, the Board of Directors increased the size of the Board from seven to eight members and appointed Jonathan M. Clarkson as a director. Mr. Clarkson was also appointed President and Chief Operating Officer of the Company at that time. In November 1999, the Board of Directors appointed Mr. Frank Pottow as a director, increasing the size of the Board to nine members. Mr. Pottow is the Managing Director of SGC Partners II, L.L.C., a stockholder of the Company. In connection with the appointment of Mr. Clarkson and Mr. Pottow to the Board of Directors, the Shareholders Agreement among the Company and certain stockholders of the Company was amended to provide that Mr. Clarkson would be appointed to the Board of Directors and that Mr. Pottow would be appointed as a representative of SGC Partners. GENERAL The Company's revenues, profitability and future growth and the carrying value of its oil and gas properties are substantially dependent on prevailing prices of oil and gas and its ability to find, develop and acquire additional oil and gas reserves that are economically recoverable. The Company's ability to 13 maintain or increase its borrowing capacity and to obtain additional capital on attractive terms is also influenced by oil and gas prices. Prices for oil and gas are subject to large fluctuations in response to relatively minor changes in the supply of and demand for oil and gas, market uncertainty and a variety of additional factors beyond the control of the Company. These factors include weather conditions in the United States, the condition of the United States economy, the actions of the Organization of Petroleum Exporting Countries, governmental regulation, political stability in the Middle East and elsewhere, the foreign supply of crude oil and natural gas, the price of foreign imports and the availability of alternate fuel sources. Any substantial and extended decline in the price of crude oil or natural gas would have an adverse effect on the Company's carrying value of its proved reserves, borrowing capacity, revenues, profitability and cash flows from operations. The Company uses the full cost method of accounting for the Company's investment in oil and gas properties. Under the full cost method of accounting, all costs of acquisition, exploration and development of oil and gas reserves are capitalized into a "full cost pool." Oil and gas properties in the pool, plus estimated future expenditures to develop proved reserves and future abandonment, site remediation and dismantlement costs, are depleted and charged to operations using the unit of production method based on the portion of current production to total estimated proved recoverable oil and gas reserves. To the extent that such capitalized costs (net of depreciation, depletion and amortization) exceed the discounted future net cash flows on an after-tax basis of estimated proved oil and gas reserves, such excess costs are charged to operations. Once incurred, the write down of oil and gas properties is not reversible at a later date even if oil or natural gas prices increase. The Company does not have a specific acquisition budget because of the unpredictability of the timing and size of forthcoming acquisition activities. There is no assurance that the Company will be able to identify suitable acquisition candidates in the future, or that the Company will be successful in the acquisition of producing properties. In order to finance any possible future acquisitions, the Company will either use borrowings available under the its credit facility or the Company may seek to obtain additional debt or equity financing in the public or private capital markets. Further, there can be no assurances that any future acquisitions made by the Company will be integrated successfully into the Company's operations or will achieve desired profitability objectives. On September 13, 1999, the Company acquired interests in 40 leases, a waterflood unit, over 60 royalty properties and an oil transportation contract in the East Texas Field from Atlantic Richfield Company for $16 million. Current daily production is approximately 2,500 net barrels of oil equivalent per day from 500 producing wells. The Company utilized the Credit Facility to acquire the properties. In June 1998 the Financial Accounting Standards Board issued SFAS 133" Accounting for Derivative Instruments and Hedging Activities." This standard is effective for fiscal years beginning after June 15, 1999 (January 1, 2000 for the Company). SFAS 133 requires that all derivative instruments be recorded on the balance sheet at their fair value. Changes in the fair value of derivatives are recorded each period in current earnings or other comprehensive income, depending on whether a derivative is designated as part of a hedge transaction and, if it is, the type of hedge transaction. The Company has not yet completed its evaluation of the impact of the adoption of this new standard. 14 Company management chooses to implement pricing hedges as necessary to ensure minimum levels of cash flow or as market conditions create opportunity. Approximately 50% (or 150,000 MMBTU per month) of current natural gas production is hedged through calendar year 1999. For the Company's South Coles Levee production a hedge is in place for 65,000 MMBTU at prices ensuring a floor of $2.00 per MMBTU and a ceiling of $2.45 per MMBTU based on Southern California border prices. For the Company's Gulf Coast properties a hedge is in place for 85,000 MMBTU at prices ensuring a floor of $2.00 per MMBTU and a ceiling of $2.04 per MMBTU based on Houston Ship Channel pricing. At September 30, 1999 collars were in place for portions of the Company's oil production for October 1 through September 2000 at floors of $18.00 and ceilings of $20.75 and $23.08. Contracted volumes total 50,200 barrels per month declining each month to 42,000 barrels. Beginning October 2000 through September 2001 the Company has two swaps in place at $17.55 and $18.05. Contracted volumes total 41,350 barrels per month declining to 34,300 barrels per month representing approximately 50% of the Company's projected oil production. LIQUIDITY AND CAPITAL RESOURCES The Company's primary sources of capital are its cash flows from operations, borrowings, property sales and the issuance of debt and equity securities. The Company reported consolidated net income of $739,255 for the quarter ended September 30, 1999 compared to a consolidated net loss of $22,764 for the quarter ended September 30, 1998. At September 30, 1999, the Company had working capital of $2,210,865, which was a $1,776,589 increase from the $434,276 of working capital that the Company had as of September 30, 1998. This increase in working capital was due primarily to the increased oil and gas sales resulting from the acquisition of proved reserves referred to above. Effective August 14, 1998, the Company entered into a credit agreement with Bank of America ("Credit Agreement"). Borrowings under the Credit Agreement are secured by mortgages covering substantially all of the Company's producing oil and gas properties as well as by certain pledges of the Company's subsidiaries Common Stock. See "The Company." The Credit Agreement initially provided for a commitment amount of $20 million and a $10.5 million borrowing base ("Borrowing Base"). This Credit Agreement was amended and increased to $27.5 million on November 15, 1998. In December 1998, the Company amended and restated the Credit Agreement to increase the commitment amount to $50 million subject to a borrowing base as determined by Bank of America on an acquisition by acquisition basis. On September 30, 1999 the Company amended and restated the Credit Agreement to increase the commitment from Bank of America and two additional banks to $100 million. The three-year revolver has an initial borrowing base of $40 million, increasing to $55 million upon the resolution of certain preferential purchase rights on the recent Arco East Texas acquisition. As of September 30, 1999 the Company has available over $20 million under its existing Credit Agreement which increases to $35 million after resolution of the preferential rights discussed above. 15 Operating activities of the Company during the nine months ended September 30,1999 provided net cash of $81,951. In the same period during 1998, operating activities provided net cash of $116,407. Investing activities in the nine months ended September 30, 1999, used net cash of $27,549,310, primarily due to the acquisition of oil and gas properties. For the same period in 1998, investing activities used net cash of $7,187,420 to acquire oil and gas properties. Financing activities in the nine months ended September 30, 1999 provided net cash of $27,372,986 primarily due to proceeds from the equity transaction described above net of debt repayments. In the first nine months of 1998, financing activities provided $7,203,893 (net of debt repayments) which was used primarily to acquire oil and gas properties. RESULTS OF OPERATIONS Comparison of Quarters Ended September 30, 1999 and 1998 Total revenues for the three months ended September 30, 1999 increased to $4,303,551 from $812,326 for the same period in 1998, primarily due to increased oil and gas sales from the acquisition of producing properties in the fourth quarter of 1998 and May of 1999. Production costs increased from $488,305 in the three months ended September 30, 1998 to $1,869,260 in the three months ended September 30, 1999 due to the purchase of proved reserves. General and administrative expenses increased to $709,186 from $70,300 in 1998 due to overhead associated with the Company's increased acquisition activity. The Company generated net income of $739,255 for the three months ended September 30,1999 compared to a net loss of $22,764 for the same period in 1998, primarily due to the acquisition of proved reserves and production attributable to such reserves. The majority of the cash flow generated from these additional reserves was primarily used to pay interest costs incurred in acquiring the reserves. Interest expense for the three months ended September 30, 1999 was $221,402 compared to $124,385 for the same period in 1998. Depreciation, depletion and amortization for the three months ended September 30, 1999 was $386,090. For the same period in 1998, the total was $166,443. This increase is primarily a result of increased production volumes. Comparison of Nine months ended September 30, 1999 and 1998 Total revenues for the nine months ended September 30, 1999 increased to $9,519,732 from $1,902,855 for the same period in 1998, primarily due to increased oil and gas sales from the acquisition of producing properties. Production costs increased from $1,131,754 in the nine months ended September 30, 1998 to $4,187,264 in the nine months ended September 30,1999 due to the purchase of proved reserves. General and administrative expenses increased to $2,376,692 from $290,953 in 1998 due to increased overhead associated with the Company's increased acquisition activity. The Company had a net loss of $809,762 for the nine months ended September 30,1999 compared to a net loss of $181,098 16 for the same period in 1998, primarily due to increased interest expense associated with the acquisition of proved reserves. The majority of the cash flow generated from these additional reserves was primarily used to pay interest costs. Interest expense for the nine months ended September 30, 1999 was $1,630,536 compared to $406,511 for the same period in 1998 primarily due to interest on outstanding long term debt related to property acquisitions. Depreciation, depletion and amortization for the first nine months of 1999 was $2,558,658. For the same period in 1998, the total was $368,756. This increase is primarily a result of increased production volumes. INFLATION The Company's activities have not been, and in the near term are not expected to be, materially affected by inflation or changing prices in general. The Company's oil exploration and production activities are generally affected by prevailing prices for oil, however. YEAR 2000 ISSUE Year 2000 issues result from the inability of computer programs or computerized equipment to accurately calculate, store or use a date subsequent to December 31, 1999. The erroneous date can be interpreted in a number of different ways; typically the Year 2000 is interpreted as the year 1900. This could result in a system failure or miscalculations causing disruptions of operations, including, among other things, a temporary inability to process transactions, send invoices or engage in similar normal business. Because the Company's software systems are relatively new, the Company was aware of and considered Year 2000 issues at the time of purchase or development of such systems. In addition, the Company has recently completed an assessment of its core financial and operational software systems to ensure compliance. The licensor of the Company's core financial software system has certified that such software is Year 2000 compliant. Additionally, other less critical software systems and various types of equipment have been assessed and are believed to be compliant. The Company believes that the potential impact, if any, of these less critical systems not being Year 2000 compliant will at most require employees to manually complete otherwise automated tasks or calculations and it should not impact the Company's ability to continue exploration, drilling, production or sales activities. The Company has initiated and will continue to have formal communications with its significant suppliers, business partners and customers to determine the extent to which the Company is vulnerable to those third parties' failure to correct their own Year 2000 issues. There can be no guarantee, however, that the systems of other companies on which the Company's systems rely will be timely converted, or that a failure to convert by another company, or a conversion that is incompatible with the Company's systems would not have a material adverse effect on the Company. The Company has determined it has no exposure to contingencies related to the Year 2000 issue with respect to products sold to third parties. The Company has and will utilize both internal and external resources to complete tasks and perform testing necessary to address the Year 2000 issue. The Company has substantially completed the Year 2000 project. The Company has not incurred, and does not anticipate that it will incur, any significant costs relating to the assessment and remediation of Year 2000 issues. 17 PART II OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits. EXHIBIT NUMBER TITLE OF DOCUMENT 2. Plan of acquisition, reorganization, arrangement, liquidation or succession 2.1 Purchase and Sale Agreement between Exxon Corporation and Future Acquisition 1995, Ltd., et al. (Incorporated by reference from Exhibit 2.1 to the Company's Quarterly Report on Form 10-Q for the period ended June, 30, 1999, filed with the Securities and Exchange Commission on August 16, 1999) 2.2 Purchase and Sale Agreement by and Between Atlantic Richfield Company and Future Acquisition 1995, Ltd. 3. Articles of Incorporation and By-laws 3.1 Articles of Incorporation of Bargo Energy Company (Incorporated by reference from Exhibit 3.1 to the Company's Current Report on Form 8-K dated April 26, 1999, filed with the Securities and Exchange Commission on April 29, 1999) 3.2 Agreement and Plan of Merger, dated as of April 6, 1999 between Future Petroleum Corporation and FPT Corporation (Incorporated by reference from Exhibit 2.1 to the Company's Current Report on Form 8-K dated April 26, 1999, filed with the Securities and Exchange Commission on April 29, 1999) 3.3 By-laws of Bargo Energy Company (Incorporated by reference from Exhibit 3.2 to the Company's Current Report on Form 8-K dated April 26, 1999, filed with the Securities and Exchange Commission on April 29, 1999) 3.4 Amendment to Bargo Energy Company By-laws (Incorporated by reference from Exhibit 3.4 to the Company's Quarterly Report on Form 10-QSB for the period ended March 31, 1999, filed with the Securities and Exchange Commission on May 21, 1999) 4. Instruments defining the rights of security holders 18 EXHIBIT NUMBER TITLE OF DOCUMENT 4.1 Certificate of Designations of Cumulative Redeemable Preferred Stock, Series B (Incorporated by reference (Incorporated by reference from Exhibit 4.1 to the Company's Quarterly Report on Form 10-QSB for the period ended March 31, 1999, filed with the Securities and Exchange Commission on May 21, 1999) 10. Material Contracts 10.1 Second Amended and Restated Shareholders' Agreement, dated May 14, 1999, by and among Bargo Energy Company, B. Carl Price, Don Wm. Reynolds, Energy Capital Investment Company PLC, EnCap Equity 1994 Limited Partnership, Bargo Energy Resources, Ltd., TJG Investments, Inc., Bargo Energy Company, Tim J. Goff, Thomas Barrow, James E. Sowell, Bargo Operating Company, Inc., EnCap Energy Capital Fund III-B, L.P., BOCP Energy Partners, L.P., EnCap Energy Capital Fund III, L.P., Kayne Anderson Energy Fund, L.P., BancAmerica Capital Investors SBIC I, L.P., Eos Partners, L.P., Eos Partners SBIC, L.P., Eos Partners SBIC II, L.P., and SGC Partners II LLC. (Incorporated by reference from Exhibit 10.1 to the Company's Quarterly Report on Form 10-QSB for the period ended March 31, 1999, filed with the Securities and Exchange Commission on May 21, 1999) 10.2 Second Amendment to Registration Rights Agreement dated May 14, 1999 between Energy Capital Investment Company PLC, EnCap Equity 1994 Limited Partnership, EnCap Energy Capital Fund III-B, L.P., BOCP Energy Partners, L.P., EnCap Energy Capital Fund III, L.P., Kayne Anderson Energy Fund, L.P., BancAmerica Capital Investors SBIC I, L.P., Eos Partners, L.P., Eos Partners SBIC, L.P., Eos Partners SBIC II, L.P., and SGC Partners II LLC. (Incorporated by reference from Exhibit 10.2 to the Company's Quarterly Report on Form 10-QSB for the period ended March 31, 1999, filed with the Securities and Exchange Commission on May 21, 1999) 10.3 Consent to Amendment to Registration Rights Agreement by TJG Investments, Inc., Bargo Energy Company, Bargo Energy Resources, Ltd., Bargo Operating Company, Inc., Tim J. Goff, Thomas Barrow, James E. Sowell, B. Carl Price, Don Wm. Reynolds, Christie Price, Robert Price and Charles D. Laudeman (Incorporated by reference from Exhibit 10.3 to the Company's Quarterly Report on Form 10-QSB for the period ended March 31, 1999, filed with the Securities and Exchange Commission on May 21, 1999) 10.4 Consent and Agreement dated May 14, 1999 be between Bargo Energy Company and Bank of America National Trust and Savings Association (Incorporated by reference from Exhibit 10.6 to the Company's Quarterly Report on Form 10-QSB for the 19 EXHIBIT NUMBER TITLE OF DOCUMENT period ended March 31, 1999, filed with the Securities and Exchange Commission on May 21, 1999) 10.5 SBA Side Letter dated May 14, 1999 between Bargo Energy Company and BancAmerica Capital Investors SBIC I, L.P., Eos Partners SBIC, L.P., Eos Partners SBIC II, L.P., and SGC Partners II LLC. (Incorporated by reference from Exhibit 10.7 to the Company's Quarterly Report on Form 10-QSB for the period ended March 31, 1999, filed with the Securities and Exchange Commission on May 21, 1999) 10.6 SBA Side Letter dated May 14, 1999 between Bargo Energy Company, EnCap Equity 1994 Limited Partnership, TJG Investments, Inc. Bargo Energy Company, Bargo Energy Resources, Ltd., Bargo Operating Company, Inc., Tim J. Goff and BancAmerica Capital Investors SBIC I, L.P., Eos Partners SBIC, L.P., Eos Partners SBIC II, L.P., and SGC Partners II LLC. (Incorporated by reference from Exhibit 10.8 to the Company's Quarterly Report on Form 10-QSB for the period ended March 31, 1999, filed with the Securities and Exchange Commission on May 21, 1999) 10.7 Stock Purchase Agreement dated May 14, 1999 between Bargo Energy Company and Energy Capital Investment Company PLC, EnCap Energy Capital Fund III-B, L.P., BOCP Energy Partners, L.P., EnCap Energy Capital Fund III, L.P., Kayne Anderson Energy Fund, L.P., BancAmerica Capital Investors SBIC I, L.P., Eos Partners, L.P., Eos Partners SBIC, L.P., Eos Partners SBIC II, L.P., and SGC Partners II LLC. (Incorporated by reference from Exhibit 10.9 to the Company's Quarterly Report on Form 10-QSB for the period ended March 31, 1999, filed with the Securities and Exchange Commission on May 21, 1999) 10.8 Bargo Energy Company 1999 Stock Incentive Plan (Incorporated by reference from Exhibit 10.10 to the Company's Quarterly Report on Form 10-QSB for the period ended March 31, 1999, filed with the Securities and Exchange Commission on May 21, 1999) 10.9 Confidentiality and Non-compete Agreement dated May 14, 1999 between Bargo Energy Company and Tim J. Goff (Incorporated by reference from Exhibit 10.11 to the Company's Quarterly Report on Form 10-QSB for the period ended March 31, 1999, filed with the Securities and Exchange Commission on May 21, 1999) 10.10 Second Amended and Restated Credit Agreement, Dated as of September 30, 1999, among Bargo Energy Company, Bank of America, N.A. and Certain Financial Institutions 20 EXHIBIT NUMBER TITLE OF DOCUMENT 10.11 Registration Rights Agreement among the Company and Bargo Energy Resources, Ltd. dated August 14, 1998 (Incorporated by reference from Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the period ended June 30, 1998, filed with the Securities and Exchange Commission on August 25, 1998) 10.12 First Amendment to Registration Rights Agreement among the Company, Bargo Energy Resources, Ltd., Bargo Energy Company, TJG Investments, Inc. and certain other shareholders dated December 15, 1998 (Incorporated by reference from Exhibit 99.2 to the Company's Current Report on Form 8-K dated December 15, 1998, filed with the Securities and Exchange Commission on December 30, 1998) 10.13 Registration Rights Agreement dated November 25, 1997, among the Company, Energy Capital Investment Company PLC, and EnCap Equity 1994 Limited Partnership (Incorporated by reference from Exhibit 10.05 to the Company's Current Report on Form 8-K dated November 25, 1997, filed with the Securities and Exchange Commission on December 10, 1997) 10.14 Registration Rights Agreement among the Company, Energy Capital Investment Company PLC and EnCap Equity 1994 Limited Partnership dated August 14, 1998 (Incorporated by reference from Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the period ended June 30, 1998, filed with the Securities and Exchange Commission on August 25, 1998) 10.15 First Amendment to Registration Rights Agreement among the Company, Energy Capital Investment Company PLC and EnCap Equity 1994 Limited Partnership dated December 15, 1998 (Incorporated by reference from Exhibit 99.4 to the Company's Current Report on Form 8-K dated December 15, 1998, filed with the Securities and Exchange Commission on December 30, 1998) 10.16 Registration Rights Agreement among the Company, B. Carl Price and certain other shareholders dated August 14, 1998 (Incorporated by reference from Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q for the period ended June 30, 1998, filed with the Securities and Exchange Commission on August 25, 1998) 10.17 First Amendment to Registration Rights Agreement among the Company, B. Carl Price and certain other shareholders dated December 15, 1998 (Incorporated by reference from Exhibit 99.6 to the Company's Current Report on Form 8-K dated December 15, 1998, filed with the Securities and Exchange Commission on December 30, 1998) 21 EXHIBIT NUMBER TITLE OF DOCUMENT 10.18 Stock Purchase Warrant by the Company to Bargo Energy Resources, Ltd. dated August 14, 1998 (Incorporated by reference from Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q for the period ended June 30, 1998, filed with the Securities and Exchange Commission on August 25, 1998) 10.19 1993 Employee Incentive Plan (Incorporated by reference from the Company's Annual Report on Form 10-K for the fiscal year ended December 30, 1993, filed with the Securities and Exchange Commission on May 20, 1994) 10.20 First Amendment to Second Amended and Restated Shareholders' Agreement, dated August 11, 1999 11. Statement regarding computation of per share earnings(1) 15. Letter on unaudited interim financial information(1) 18. Letter on change in accounting principles(1) 19. Report furnished to security holders(1) 22. Published report regarding matters submitted to vote(1) 24. Power of attorney (1) 27. Financial data schedule 99. Additional exhibits - ----------------------------------- (1) Inapplicable to this filing. (b) Reports on Form 8-K. The following reports on Form 8-K were filed during the quarterly period ended September 30, 1999: 1) Current Report on Form 8-K dated August 17, 1999, filed August 24, 1999 reporting Item 5. Other Events and Item 7. Financial Statements and Exhibits. 2) Current Report on Form 8-K dated September 8, 1999, filed October 12, 1999 reporting Item 2. Acquisition or Disposition of Assets and Item 7. Financial Statements and Exhibits. 22 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. BARGO ENERGY COMPANY (Registrant) By: /s/ Kimberly G. Seekely Kimberly G. Seekely, On behalf of the Registrant and as Vice President - Treasurer 23 The following exhibits are included as part of this report: EXHIBIT INDEX
EXHIBIT NUMBER TITLE OF DOCUMENT -------------- ----------------- 2. Plan of acquisition, reorganization, arrangement, liquidation or succession 2.1 Purchase and Sale Agreement between Exxon Corporation and Future Acquisition 1995, Ltd., et al. (Incorporated by reference from Exhibit 2.1 to the Company's Quarterly Report on Form 10-Q for the period ended June, 30, 1999, filed with the Securities and Exchange Commission on August 16, 1999) 2.2 Purchase and Sale Agreement by and Between Atlantic Richfield Company and Future Acquisition 1995, Ltd. 3. Articles of Incorporation and By-laws 3.1 Articles of Incorporation of Bargo Energy Company (Incorporated by reference from Exhibit 3.1 to the Company's Current Report on Form 8-K dated April 26, 1999, filed with the Securities and Exchange Commission on April 29, 1999) 3.2 Agreement and Plan of Merger, dated as of April 6, 1999 between Future Petroleum Corporation and FPT Corporation (Incorporated by reference from Exhibit 2.1 to the Company's Current Report on Form 8-K dated April 26, 1999, filed with the Securities and Exchange Commission on April 29, 1999) 3.3 By-laws of Bargo Energy Company (Incorporated by reference from Exhibit 3.2 to the Company's Current Report on Form 8-K dated April 26, 1999, filed with the Securities and Exchange Commission on April 29, 1999) 3.4 Amendment to Bargo Energy Company By-laws (Incorporated by reference from Exhibit 3.4 to the Company's Quarterly Report on Form 10-QSB for the period ended March 31, 1999, filed with the Securities and Exchange Commission on May 21, 1999) 4. Instruments defining the rights of security holders 4.1 Certificate of Designations of Cumulative Redeemable Preferred Stock, Series B (Incorporated by reference (Incorporated by reference from Exhibit 4.1 to the Company's Quarterly Report on Form 10-QSB for the period ended March 31, 1999, filed with the Securities and Exchange Commission on May 21, 1999) 10. Material Contracts
24
EXHIBIT NUMBER TITLE OF DOCUMENT -------------- ----------------- 10.1 Second Amended and Restated Shareholders' Agreement, dated May 14, 1999, by and among Bargo Energy Company, B. Carl Price, Don Wm. Reynolds, Energy Capital Investment Company PLC, EnCap Equity 1994 Limited Partnership, Bargo Energy Resources, Ltd., TJG Investments, Inc., Bargo Energy Company, Tim J. Goff, Thomas Barrow, James E. Sowell, Bargo Operating Company, Inc., EnCap Energy Capital Fund III-B, L.P., BOCP Energy Partners, L.P., EnCap Energy Capital Fund III, L.P., Kayne Anderson Energy Fund, L.P., BancAmerica Capital Investors SBIC I, L.P., Eos Partners, L.P., Eos Partners SBIC, L.P., Eos Partners SBIC II, L.P., and SGC Partners II LLC. (Incorporated by reference from Exhibit 10.1 to the Company's Quarterly Report on Form 10-QSB for the period ended March 31, 1999, filed with the Securities and Exchange Commission on May 21, 1999) 10.2 Second Amendment to Registration Rights Agreement dated May 14, 1999 between Energy Capital Investment Company PLC, EnCap Equity 1994 Limited Partnership, EnCap Energy Capital Fund III-B, L.P., BOCP Energy Partners, L.P., EnCap Energy Capital Fund III, L.P., Kayne Anderson Energy Fund, L.P., BancAmerica Capital Investors SBIC I, L.P., Eos Partners, L.P., Eos Partners SBIC, L.P., Eos Partners SBIC II, L.P., and SGC Partners II LLC. (Incorporated by reference from Exhibit 10.2 to the Company's Quarterly Report on Form 10-QSB for the period ended March 31, 1999, filed with the Securities and Exchange Commission on May 21, 1999) 10.3 Consent to Amendment to Registration Rights Agreement by TJG Investments, Inc., Bargo Energy Company, Bargo Energy Resources, Ltd., Bargo Operating Company, Inc., Tim J. Goff, Thomas Barrow, James E. Sowell, B. Carl Price, Don Wm. Reynolds, Christie Price, Robert Price and Charles D. Laudeman (Incorporated by reference from Exhibit 10.3 to the Company's Quarterly Report on Form 10-QSB for the period ended March 31, 1999, filed with the Securities and Exchange Commission on May 21, 1999) 10.4 Consent and Agreement dated May 14, 1999 be between Bargo Energy Company and Bank of America National Trust and Savings Association (Incorporated by reference from Exhibit 10.6 to the Company's Quarterly Report on Form 10-QSB for the period ended March 31, 1999, filed with the Securities and Exchange Commission on May 21, 1999) 10.5 SBA Side Letter dated May 14, 1999 between Bargo Energy Company and BancAmerica Capital Investors SBIC I, L.P., Eos Partners SBIC, L.P., Eos Partners SBIC II, L.P., and SGC Partners
25
EXHIBIT NUMBER TITLE OF DOCUMENT -------------- ----------------- II LLC. (Incorporated by reference from Exhibit 10.7 to the Company's Quarterly Report on Form 10-QSB for the period ended March 31, 1999, filed with the Securities and Exchange Commission on May 21, 1999) 10.6 SBA Side Letter dated May 14, 1999 between Bargo Energy Company, EnCap Equity 1994 Limited Partnership, TJG Investments, Inc. Bargo Energy Company, Bargo Energy Resources, Ltd., Bargo Operating Company, Inc., Tim J. Goff and BancAmerica Capital Investors SBIC I, L.P., Eos Partners SBIC, L.P., Eos Partners SBIC II, L.P., and SGC Partners II LLC. (Incorporated by reference from Exhibit 10.8 to the Company's Quarterly Report on Form 10-QSB for the period ended March 31, 1999, filed with the Securities and Exchange Commission on May 21, 1999) 10.7 Stock Purchase Agreement dated May 14, 1999 between Bargo Energy Company and Energy Capital Investment Company PLC, EnCap Energy Capital Fund III-B, L.P., BOCP Energy Partners, L.P., EnCap Energy Capital Fund III, L.P., Kayne Anderson Energy Fund, L.P., BancAmerica Capital Investors SBIC I, L.P., Eos Partners, L.P., Eos Partners SBIC, L.P., Eos Partners SBIC II, L.P., and SGC Partners II LLC. (Incorporated by reference from Exhibit 10.9 to the Company's Quarterly Report on Form 10-QSB for the period ended March 31, 1999, filed with the Securities and Exchange Commission on May 21, 1999) 10.8 Bargo Energy Company 1999 Stock Incentive Plan (Incorporated by reference from Exhibit 10.10 to the Company's Quarterly Report on Form 10-QSB for the period ended March 31, 1999, filed with the Securities and Exchange Commission on May 21, 1999) 10.9 Confidentiality and Non-compete Agreement dated May 14, 1999 between Bargo Energy Company and Tim J. Goff (Incorporated by reference from Exhibit 10.11 to the Company's Quarterly Report on Form 10-QSB for the period ended March 31, 1999, filed with the Securities and Exchange Commission on May 21, 1999) 10.10 Second Amended and Restated Credit Agreement, Dated as of September 30, 1999, among Bargo Energy Company, Bank of America, N.A. and Certain Financial Institutions 10.11 Registration Rights Agreement among the Company and Bargo Energy Resources, Ltd. dated August 14, 1998 (Incorporated by reference from Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the period ended June 30, 1998, filed with the Securities and Exchange Commission on August 25, 1998)
26
EXHIBIT NUMBER TITLE OF DOCUMENT -------------- ----------------- 10.12 First Amendment to Registration Rights Agreement among the Company, Bargo Energy Resources, Ltd., Bargo Energy Company, TJG Investments, Inc. and certain other shareholders dated December 15, 1998 (Incorporated by reference from Exhibit 99.2 to the Company's Current Report on Form 8-K dated December 15, 1998, filed with the Securities and Exchange Commission on December 30, 1998) 10.13 Registration Rights Agreement dated November 25, 1997, among the Company, Energy Capital Investment Company PLC, and EnCap Equity 1994 Limited Partnership (Incorporated by reference from Exhibit 10.05 to the Company's Current Report on Form 8-K dated November 25, 1997, filed with the Securities and Exchange Commission on December 10, 1997) 10.14 Registration Rights Agreement among the Company, Energy Capital Investment Company PLC and EnCap Equity 1994 Limited Partnership dated August 14, 1998 (Incorporated by reference from Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the period ended June 30, 1998, filed with the Securities and Exchange Commission on August 25, 1998) 10.15 First Amendment to Registration Rights Agreement among the Company, Energy Capital Investment Company PLC and EnCap Equity 1994 Limited Partnership dated December 15, 1998 (Incorporated by reference from Exhibit 99.4 to the Company's Current Report on Form 8-K dated December 15, 1998, filed with the Securities and Exchange Commission on December 30, 1998) 10.16 Registration Rights Agreement among the Company, B. Carl Price and certain other shareholders dated August 14, 1998 (Incorporated by reference from Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q for the period ended June 30, 1998, filed with the Securities and Exchange Commission on August 25, 1998) 10.17 First Amendment to Registration Rights Agreement among the Company, B. Carl Price and certain other shareholders dated December 15, 1998(Incorporated by reference from Exhibit 99.6 to the Company's Current Report on Form 8-K dated December 15, 1998, filed with the Securities and Exchange Commission on December 30, 1998) 10.18 Stock Purchase Warrant by the Company to Bargo Energy Resources, Ltd. dated August 14, 1998 (Incorporated by reference from Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q for the period ended June 30, 1998, filed with the Securities and Exchange Commission on August 25, 1998)
27
EXHIBIT NUMBER TITLE OF DOCUMENT -------------- ----------------- 10.19 1993 Employee Incentive Plan (Incorporated by reference from the Company's Annual Report on Form 10-K for the fiscal year ended December 30, 1993, filed with the Securities and Exchange Commission on May 20, 1994) 10.20 First Amendment to Second Amended and Restated Shareholders' Agreement, dated August 11, 1999 11. Statement regarding computation of per share earnings(1) 15. Letter on unaudited interim financial information(1) 18. Letter on change in accounting principles(1) 19. Report furnished to security holders(1) 22. Published report regarding matters submitted to vote(1) 24. Power of attorney(1) 27. Financial data schedule 99. Additional exhibits
- ----------------------------------- (1) Inapplicable to this filing. EX-2.2 2 PURCHASE AND SALE AGREEMENT 1 PURCHASE AND SALE AGREEMENT BY AND BETWEEN ATLANTIC RICHFIELD COMPANY A DELAWARE CORPORATION, AND FUTURE ACQUISITION 1995, LTD. A TEXAS LIMITED PARTNERSHIP DATED AUGUST 3, 1999 EFFECTIVE OCTOBER 1, 1999 2 EXHIBITS A - Leasehold Interests and Allocated Values B - Excluded Assets 2.2 - Gas Production Imbalances 3.4 - Form of Title Defect Notice 3.6 - Allocation of Value 4.7 - Material Changes in Last Year 4.9 - Material Defects 4.16 - Pending and Proposed Operations and Capital Projects 9.6 - Litigation 10.2(a) - Form of Conveyance, Assignment and Bill of Sale 10.2(d) - Form of Property Transfer Accounting Agreement 10.2(l) - Form of Surface Lease Agreement Page 2 3 SCHEDULE OF DEFINED TERMS
Term Where Defined - ---- ------------- Adjusted Purchase Price.....................................Section 2.2 Adjustment Amount...........................................Section 2.2(b)(v) Agreement...................................................Heading Allocated Value.............................................Section 3.6 ARCO........................................................Heading ARCO Indemnified Parties....................................Section 7.4 Assets......................................................Section 1.1 Assumed Obligations.........................................Section 11.4(a) Business Days...............................................Section 2.3(a) CERCLA......................................................Section 16.3 Claimant....................................................Section 13.5(b) Claims......................................................Section 16.2 Closing.....................................................Section 10.1 Closing Date................................................Section 10.1 Code........................................................Section 4.5 Data........................................................Section 1.1(c) Defect Value................................................Section 3.4 Deposit.....................................................Section 2.1(c) Documents...................................................Section 14.1 Effective Date..............................................Section 1.1 Environmental Laws..........................................Section 16.3 Environmental Reports.......................................Section 16.1 Estimated Adjusted Purchase Price...........................Section 2.3(b) Excluded Assets.............................................Section 1.1(b) Indemnitor..................................................Section 13.5(b) Interim Period..............................................Section 6.2 Leasehold Interests.........................................Section 1.1(a) Losses......................................................Section 11.4(b) Marketable Title............................................Section 3.2 Material Agreements.........................................Section 4.8 Notification Deadline.......................................Section 3.4 OSHA........................................................Section 16.3 Permitted Encumbrances......................................Section 3.3 Prior Confidentiality Agreements............................Section 7.2 Property....................................................Section 3.2(b) Property Taxes..............................................Section 13.1 Purchase Price..............................................Section 2.1(a) Purchaser...................................................Heading Purchaser Indemnified Parties...............................Section 11.4(c) RCRA........................................................Section 16.3 Records.....................................................Section 1.1(d) SARA........................................................Section 16.3 Title Defect................................................Section 3.4 Title Increase..............................................Section 3.5(c) Valued Assets...............................................Section 3.2
Page 3 4 PURCHASE AND SALE AGREEMENT This Purchase and Sale Agreement ("Agreement") is made and entered into this 3rd day of August, 1999, by and between ATLANTIC RICHFIELD COMPANY, a Delaware corporation ("ARCO"), and FUTURE ACQUISITION 1995, LTD., a Texas limited partnership ("PURCHASER"). RECITALS ARCO desires to sell to Purchaser, and Purchaser desires to purchase from ARCO, certain oil and gas properties and related assets on the terms and conditions set forth in this Agreement, NOW, THEREFORE, for and in consideration of the premises and of the mutual covenants and agreements contained herein, ARCO and Purchaser hereby agree as follows: ARTICLE 1 - PURCHASE AND SALE 1.1 PURCHASE AND SALE OF ASSETS. On the Closing Date, but effective as of 7:00 a.m. Central Time, October 1, 1999 (the "Effective Date"), subject to the terms and conditions of this Agreement, ARCO agrees to sell and convey to Purchaser, and Purchaser agrees to purchase and pay for, all of ARCO's right, title and interest in and to the following assets (the "Assets"): (a) The oil, gas and mineral leasehold estates and other real property and mineral interests described in Exhibit A, together with all of ARCO's rights in respect of any pooled, communitized or unitized acreage of which any such interest is a part (collectively, the "Leasehold Interests"); (b) To the extent same are specifically attributable or allocable to the Leasehold Interests, (i) all wells, equipment and facilities that, as of the Closing Date, are located on and used solely and directly in connection with the production or treatment of oil and gas from the Leasehold Interests, (ii) all oil and gas and other hydrocarbon volumes produced on or after the Effective Date, (iii) to the extent same are assignable or transferable by ARCO without restriction under applicable law or third-party agreements (without the payment of any funds or other consideration), all orders, contracts, agreements and other instruments (excluding any instruments subject or relating to attorney/ client privilege), (iv) to the extent same are assignable or transferable by ARCO under applicable law or third-party agreements (without the payment of any funds or other consideration), all easements, authorizations, permits and similar rights and interests, and (v) all other rights, privileges, benefits, powers and obligations conferred or imposed upon the owner and holder of the Leasehold Interests; (c) Any and all mineral fee interests, mineral servitudes, royalty interests, overriding royalty interests, net profits interests, production payments and all other interests of every kind and character in and to the properties and lands described on Exhibit A and/or which relate to the Leasehold Interests, the lands covered thereby or the production of hydrocarbons therefrom; (d) All office buildings, warehouses, other buildings and permanent improvements, surface leases, vehicles, trucks, warehouse inventory, parts, supplies, office furniture, fixtures and equipment, computers, printers, telephone systems and all other tangible assets used or held for use in connection with ARCO's ownership or operation of the Leasehold Interests and other Assets; (e) That certain Crude Oil Buy/Sell Contract made and entered into effective December 1, 1995, by and between ARCO Permian, a unit of Atlantic Richfield Company, and Sun Company, Inc. (R&M), as amended from time to time, insofar as applicable to the Leasehold Interests; (f) All casing leak allowable transfers, earned salt water allowables, key well allowable transfers and similar rights and interests related to or arising out of the Leasehold Interests and the production of and rights to produce hydrocarbons therefrom; and (g) To the extent same are specifically attributable or allocable to the Leasehold Interests, originals, to the extent available, or copies of the following records: (i) lease and land records, (ii) development geological records, (iii) operations, production and engineering records, and (iv) facility and well records, in each case excluding any exploration geological records, any interpretive or forecast data, any records subject or relating to attorney/client privilege and any such records or data that are not assignable pursuant to the terms of applicable law or third-party agreements (without the payment of any funds or other consideration) (collectively, the "Records"). SAVE AND EXCEPT the assets and properties described in Exhibit B and any other assets and properties excluded pursuant to the terms hereof, and all other property, real, personal or intellectual, not expressly covered herein in Section 1.1 (the "Excluded Assets"). Purchase and Sale Agreement Page 4 5 ARTICLE 2 - PURCHASE PRICE 2.1 PURCHASE PRICE; METHOD OF PAYMENT; DEPOSIT (a) The purchase price for the Assets shall be $16,000,000.00 (the "Purchase Price"), which amount shall be adjusted as provided in Section 2.2. (b) All amounts required under this Article 2 to be paid by any party hereto to another party hereto shall be made by wire transfer of immediately available funds to an account designated by the payee thereof, which designation shall be made not later than two Business Days prior to the date such payment is due. (c) On July 21, 1999, Purchaser paid to ARCO, and ARCO acknowledges receipt of, a performance deposit in the amount of $2,000,000.00 (the "Deposit"), which amount shall be held by ARCO and distributed as follows: (i) if this Agreement is terminated as provided in Section 12.1(a) or Section 12.1(b), the Deposit shall be returned by ARCO to Purchaser; (ii) if this Agreement is terminated by either party pursuant to the termination right provided in Section 12.1(c) and at such time all of Purchaser's conditions to Closing as set forth in Article 9 have not been satisfied or waived (and such failure is not due to a breach by Purchaser of its obligations hereunder), the Deposit shall be returned by ARCO to Purchaser; (iii) if this Agreement is terminated by either party pursuant to the termination right provided in Section 12.1(c) and at such time all of Purchaser's conditions to Closing as set forth in Article 9 have been satisfied or waived, the Deposit shall be retained by ARCO; and (iv) if Closing occurs, ARCO shall apply the Deposit towards the Purchase Price. ARCO and Purchaser acknowledge and agree that until ARCO is obligated to distribute the Deposit as provided above, ARCO may invest the Deposit in such investments as it deems appropriate and any income resulting therefrom shall be the property of ARCO and not Purchaser. (d) Purchaser further acknowledges and agrees that if ARCO becomes entitled to the Deposit pursuant to the provisions of Section 2.1(c)(iii), ARCO's damages under such circumstances would be difficult to ascertain and ARCO shall be entitled to liquidated damages in an amount equal to the Deposit. Accordingly, the retention by ARCO of the Deposit as provided in Section 2.1(c)(iii) above shall be deemed to constitute the payment by Purchaser to ARCO of such liquidated damages, but in no event shall such retention of the Deposit or deemed payment of liquidated damages constitute or be construed as a penalty. If ARCO becomes entitled to retain the Deposit pursuant to Section 2.1(c)(iii) above, such retention shall constitute the sole remedy of ARCO under this Agreement for Purchaser's failure to consummate the transactions contemplated hereunder (such limitation shall not limit the rights of ARCO under any of the provisions of this Agreement that survive a termination and continue in full force and effect pursuant to Section 12.2). 2.2 ADJUSTMENTS TO PURCHASE PRICE. The Purchase Price for the Assets shall be adjusted as follows (the resulting amount being herein referred to as the "Adjusted Purchase Price"): (a) The Purchase Price shall be increased by an amount equal to the sum of the following amounts (determined without duplication and on an accrual basis in accordance with generally accepted accounting principles consistently applied): (i) the amount of all expenses (net to ARCO's interest) incurred and paid or to be paid by or on behalf of ARCO that are attributable to the ownership or operation of the Assets and to the period of time from and after the Effective Date, including without limitation, capital expenditures, royalties, ad valorem, property and similar taxes and assessments, severance, sales and production taxes (but excluding income taxes and franchise taxes), rentals and similar charges, amounts billed under applicable operating agreements and prepaid expenses; and (ii) an amount equal to the value allocated to all Title Increases in accordance with Section 3.5(c). (b) The Purchase Price shall be decreased by an amount equal to the sum of the following amounts (determined without duplication and on an accrual basis in accordance with generally accepted accounting principles consistently applied): (i) the amount of all proceeds (net to ARCO's interest) earned and received or to be received by or on behalf of ARCO (other than proceeds from the exercise by third parties of preferential rights to purchase all or any portion of the Leasehold Interests) that are attributable to the ownership or operation of the Assets after the Effective Date and to the Purchase and Sale Agreement Page 5 6 period of time from and after the Effective Date, it being agreed that such amount shall not include proceeds from the sale subsequent to the Effective Date of merchantable hydrocarbons in storage above the pipeline connection at the Effective Date; (ii) an amount equal to the value of all Title Defects and excluded Leasehold Interests as determined in accordance with Sections 3.4-3.7; and (iii) an amount equal to the value of the Leasehold Interests with respect to which preferential purchase rights have been exercised prior to Closing in accordance with Section 3.9. 2.3 PAYMENT AND CALCULATION OF ESTIMATED ADJUSTED PURCHASE PRICE; PAYMENT AT CLOSING. (a) ARCO shall prepare and deliver to Purchaser, at least three "Business Days" (which term shall mean any day except a Saturday, Sunday or other day on which commercial banks in New York, New York, or Dallas, Texas are required or authorized by law to be closed) prior to the Closing Date, ARCO's estimate of the Adjusted Purchase Price to be paid at Closing, together with a statement setting forth ARCO's estimate of the amount of each adjustment to the Purchase Price to be made pursuant to Section 2.2. The parties shall negotiate in good faith and attempt to agree on such estimated adjustments prior to Closing. In the event any estimated adjustment amounts are not agreed upon prior to Closing, the estimate of the Adjusted Purchase Price for purposes of Closing shall be calculated based on ARCO's and Purchaser's agreed upon estimated adjustments. (b) At Closing, Purchaser shall pay to ARCO the estimated Adjusted Purchase Price determined as set forth in Section 2.3(a) (such estimated Adjusted Purchase Price being herein referred to as the "Estimated Adjusted Purchase Price"), less an amount equal to the Deposit. 2.4 POST-CLOSING ADJUSTMENT. Within five Business Days after the final determination of the Adjusted Purchase Price in accordance with Section 11.1 or otherwise, Purchaser shall pay to ARCO or ARCO shall pay to Purchaser, as the case may be, the amount by which such final Adjusted Purchase Price is greater than or less than, respectively, the Estimated Adjusted Purchase Price. 2.5 ALLOCATION OF PURCHASE PRICE. ARCO and Purchaser agree to the following allocation of the Purchase Price among the Assets sold hereunder based upon the estimated value for federal income tax purposes of the Assets as of the Closing Date: Interests relating to leasehold other than tangible equipment and facilities (Leasehold) 70% Interests relating to tangible equipment and facilities (Tangibles) 30% --- Total Allocation 100%
Any adjustments to the Purchase Price under Section 2.2 shall ratably adjust the allocation to Leasehold and Tangibles. ARTICLE 3 - TITLE MATTERS 3.1 ACCESS TO ASSETS AND ARCO EMPLOYEES. Prior to the Closing Date, ARCO shall grant Purchaser access during ARCO's normal business hours (by appointment only) to the Assets (including all Records) and the employees of ARCO. The Records shall be made available at their present location. 3.2 DEFINITION OF MARKETABLE TITLE. As used herein, the term "Marketable Title" shall mean, in the case of the Leasehold Interests listed on Exhibit A and other Assets to which an Allocated Value is assigned on Exhibit 3.6 (each such identified other Asset being herein referred to as a "Valued Asset"), such right, title and interest (owned beneficially or of record) that, except for Permitted Encumbrances: (a) is free from reasonable doubt to the end that a prudent person engaged in the business of purchasing and owning, developing and operating producing oil and gas properties with knowledge of all of the facts and their legal bearing would be willing to accept the same; (b) entitles ARCO to receive not less than the interest set forth in Exhibit A as the "Net Revenue Interest" or "NRI" with respect to all of the oil, gas, and hydrocarbon minerals produced, saved and marketed from each unit or well, as the case may be, that relates to ARCO's producing interval in the lands and depths included within each property identified on Exhibit A under the column entitled "Property Name" (each such identified property being herein referred to as a "Property"); (c) obligates ARCO to pay costs and expenses relating to the operations on and the maintenance and development of each unit or well, as the case may be, that relates to ARCO's Purchase and Sale Agreement Page 6 7 producing interval in the lands and depths included within each Property, in an amount not greater than the "Working Interest" or "WI" set forth in Exhibit A with respect to such Property; and (d) is free and clear of any mortgages, liens, encumbrances or consent requirements; provided, however, that with respect to clauses (b) and (c) above ARCO's title shall nevertheless be deemed to constitute "Marketable Title" if (i) the difference between ARCO's actual interest and the interest set forth in Exhibit A for each unit or well included within an individual Property is 1% or less than the interest set forth in Exhibit A (by way of example, and without limiting the generality of the foregoing, if the Net Revenue Interest shown in Exhibit A for each unit or well included within a Property is 88%, ARCO will have Marketable Title to such Leasehold Interest if it is entitled to receive not less than 87.12% of all oil and gas produced from such Property) or (ii) the value of any difference between ARCO's actual interest in the interest set forth in Exhibit A (as such value is determined in accordance with Section 3.6) is less than $10,000.00. 3.3 DEFINITION OF PERMITTED ENCUMBRANCES. As used herein, the term "Permitted Encumbrances" shall mean: (a) Lessors' royalties, overriding royalties, reversionary interests and similar burdens affecting a Leasehold Interest if the net cumulative effect of such burdens does not operate to reduce the interest of ARCO with respect to all oil and gas produced from any units or wells below the "Net Revenue Interest" or "NRI" set forth in Exhibit A for the Property to which such units or wells relate; (b) Division orders and sales contracts terminable without penalty upon no more than 90 days notice to the purchaser; (c) Preferential rights to purchase and required third-party consents to assignments and similar agreements with respect to which waivers or consents are obtained from the appropriate parties or the appropriate time period for asserting the rights has expired without an exercise of such rights; (d) Materialman's, mechanic's, repairman's, employee's, contractor's, operator's, tax, and other similar liens or charges arising in the ordinary course of business for obligations that are not delinquent or that will be paid and discharged in the ordinary course of business or if delinquent, that are being contested in good faith by appropriate action; (e) All rights to consent by, required notices to, filings with, or other actions by governmental or tribal entities in connection with the sale or conveyance of oil and gas leases or interests therein; (f) Conventional rights of reassignment requiring notice to the holders of such rights; (g) Easements, rights-of-way, servitudes, permits, surface leases and other rights of third parties in respect of surface operations which individually or in the aggregate do not materially interfere with the operation, value or use of the Leasehold Interests (or portions thereof) affected thereby; (h) All other liens, charges, encumbrances, contracts, agreements, instruments, obligations, defects and irregularities affecting the Leasehold Interests or the units or wells to which they relate that individually or in the aggregate: (i) are not such as to interfere materially with the operation, value or use of the Leasehold Interests (or portion thereof) affected thereby, (ii) do not unreasonably delay the receipt or materially prevent Purchaser from receiving the proceeds of production from any of the units or wells to which the Leasehold Interests relate, (iii) do not materially reduce the interest of ARCO with respect to all oil and gas produced from any unit or well to which the Leasehold Interests relate below the "Net Revenue Interest" or "NRI" set forth in Exhibit A for the Property to which such unit or well relates, and (iv) do not materially increase ARCO's portion of the costs and expenses relating to the operations on and the maintenance and development of the lands and depths included in any unit or well to which the Leasehold Interests relate above the "Working Interest" or "WI" set forth in Exhibit A for the Property to which such unit or well relates; (i) All rights reserved to or vested in any municipality or governmental, statutory or public authority to control or regulate any of the Leasehold Interests in any manner, and all applicable laws, rules and orders of any such authority; Purchase and Sale Agreement Page 7 8 (j) Any Title Defects Purchaser may have expressly waived in writing or which are deemed to have been waived under Section 3.4 or any other matters that are included in the adjustments to the Purchase Price pursuant to Section 2.2; (k) The terms and provisions of all operating agreements, unit agreements, unit operating agreements, pooling agreements and pooling designations affecting the Leasehold Interests which are specifically listed on Exhibit A; and (l) The terms and conditions of all leases, agreements, orders, instruments and documents expressly described in or referred to in Exhibit A.; (m) The terms and conditions of all agreements with King Cad Plus for month-to-month rental of office space and/or drafting services in-lieu of rental of office space within the ARCO Longview Production Office and which shall be terminated by ARCO on or before April 1, 1999; (n) Corporate mergers between Atlantic Richfield Company, a Delaware corporation, and predecessor corporations, including, but not limited to, Atlantic Richfield Company, a Pennsylvania corporation, Hondo Oil & Gas Company, a New Mexico corporation, Sinclair Oil & Gas Corporation, a Maine corporation, Sinclair Corporation, Richfield Oil Corporation, and Houston Oil and Gas Company, even though Certificates of Corporate Merger or other evidence of such corporate merger or mergers are not recorded in the applicable county records wherein the Assets involved may be located; provided, however, that upon request, ARCO is able to provide Purchaser with photocopies of the Certificates of Corporate Merger filed with the Secretary of State of the state or states of incorporation of the merging corporation.; and (o) Production payments wherein ARCO or a predecessor corporation of ARCO is named as obligor/payor and where the principal amount of initial indebtedness is less than $5,000,000.00 and where the effective date of the production payment obligation is on or before January 1, 1972 (any such production payment referred to hereafter as an "Unreleased Production Payment"), even though a release of all obligations of ARCO or ARCO's predecessor in interest has not been filed in the county records wherein the Assets involved are located, unless Purchaser can demonstrate to ARCO by the presentation of business records, financial records or check stubs created and issued within one year of Closing that any such production payment is still being carried in an active status and all obligations of ARCO or ARCO's predecessor thereunder have not been completely satisfied. Notwithstanding anything to the contrary contained herein, ARCO does hereby agree to indemnify and hold harmless Purchaser and its affiliated parties from and against any and all claims, liabilities, losses, costs and expenses (including court costs and reasonable attorneys' fees) in related to or arising from an Unreleased Production Payment, for as long as Purchaser or its affiliated parties own the Assets affected by the Unreleased Production Payment. ARCO's obligation to indemnify Purchaser under this Section 3.3(o) is unique and personal, and as such is non-assignable and non-transferable. Further, ARCO's indemnity to Purchaser under this Section 3.3(o) shall be limited to the lesser of the Allocated Value for the affected Asset as shown on Exhibit 3.6 attached hereto, or the mutually agreed upon fair market value of the Asset at the time the Unreleased Production Payment is brought to ARCO's attention by Purchaser or its affiliated party, but in either case ARCO's indemnity shall apply only to values in excess of $5,000.00. 3.4 NOTICE OF TITLE DEFECT. Purchaser shall notify ARCO in writing, as soon as reasonably practicable after Purchaser has knowledge thereof, and in any event on or before five (5) days prior to the Closing Date (the "Notification Deadline"), of any matter ("Title Defect") that would cause ARCO's title to any of the Properties or Valued Assets not to be Marketable Title, in each case together with a detailed explanation of (a) the nature of such Title Defect, (b) the Leasehold Interests or Valued Assets (or portions thereof) affected thereby and (c) Purchaser's proposed Defect Value (as hereinafter defined) for such Title Defect in a form similar to Exhibit 3.4. Any matters that would otherwise constitute Title Defects but which are not specifically raised in writing (with the detailed explanation as contemplated in the immediately preceding sentence) by Purchaser prior to the Notification Deadline shall conclusively be deemed waived by Purchaser. As used herein, the term "Defect Value" shall mean with respect to each Title Defect, the reduction in the "Allocated Value" of the affected Leasehold Interest or other Valued Asset as a result of such Title Defect, as determined pursuant to Sections 3.6 and 3.7. 3.5 REMEDIES FOR TITLE DEFECTS. (a) ARCO shall have the right, but not the obligation, to attempt to cure any Title Defect with respect to which it has received notice from Purchaser prior to the Notification Deadline. (b) With respect to any Title Defect for which ARCO receives the required notice from Purchaser on or before the Notification Deadline, ARCO and Purchaser shall attempt to agree, subject to the terms of the last sentence of this Section 3.5(b), upon a mutually acceptable remedy from among the following options: (i) For ARCO to indemnify Purchaser against all liability, loss, cost and expense resulting from such Title Defect, in which event the Purchase Price shall not be reduced and the Leasehold Interest or other Valued Asset subject to such Title Defect shall be sold to Purchaser hereunder (it being understood and agreed, however, that in no event shall ARCO's liability under any such indemnity exceed the Defect Value of the Title Purchase and Sale Agreement Page 8 9 Defect to which such indemnity relates or survive beyond the period provided in Section 17.13); (ii) To exclude the Leasehold Interest or other Valued Asset subject to the Title Defect from the sale hereunder, in which event the Purchase Price shall be reduced by the Allocated Value (as defined in Section 3.6) of such Leasehold Interest or other Valued Asset; or (iii) The Leasehold Interest or other Valued Asset subject to such Title Defect shall be sold to Purchaser hereunder and the Purchase Price shall be reduced by the Defect Value for such Title Defect. In the event ARCO and Purchaser are unable to agree upon one of the foregoing options on or before the Closing Date then, unless the Title Defect is waived in writing by Purchaser, either party shall have the right to submit the disputed item(s) for binding arbitration in accordance with Article 3.11. The Asset(s) subject to title defect resolution dispute shall be sold to Purchaser at Closing and no Purchase Price adjustment, indemnification by ARCO or reassignment to ARCO shall be made until warranted by agreement of the Parties or arbitration. THERE SHALL BE NO REDUCTION IN THE PURCHASE PRICE FOR TITLE DEFECTS PURSUANT TO THE TERMS OF THIS SECTION 3.5(b), AND ARCO SHALL NOT BE LIABLE FOR ANY INDEMNITY GRANTED PURSUANT TO THIS SECTION 3.5(b), UNLESS AND UNTIL, AND ONLY TO THE EXTENT THAT, THE AGGREGATE OF ALL SUCH AMOUNTS EXCEEDS $50,000.00 (c) To the extent that same are discovered by either party prior to the Notification Deadline, ARCO and Purchaser acknowledge and agree that the Purchase Price shall be increased (a "Title Increase") by an amount equal to the value allocated to the following: (i) any increase in ARCO's Net Revenue Interest shown on Exhibit A for a Property without a corresponding increase (in each case to the extent greater than 1% of the interest shown on Exhibit A) in ARCO's Working Interest above that shown on Exhibit A for such Property; or (ii) any decrease in ARCO's Working Interest below that shown on Exhibit A for any Property without a corresponding decrease (in each case to the extent greater than 1% of the interest shown on Exhibit A) in the Net Revenue Interest shown on Exhibit A for such Property, in each case with such values to be agreed upon by ARCO and Purchaser (taking into account the Allocated Value for such Property) or otherwise determined pursuant to the procedures set forth in Section 3.7. THERE SHALL BE NO INCREASE IN THE PURCHASE PRICE FOR TITLE INCREASES PURSUANT TO THE TERMS OF THIS SECTION 3.5 UNLESS AND UNTIL, AND ONLY TO THE EXTENT THAT, THE AGGREGATE OF ALL SUCH AMOUNTS EXCEEDS $50,000.00. (d) Notwithstanding anything to the contrary contained in this Agreement, (i) the existence of a Title Defect shall not result in Purchaser having any right to exclude any Leasehold Interest from the sale hereunder or to fail to perform its obligations at Closing, and (ii) there shall be no adjustment to the Purchase Price as a result of ARCO's title to any of the Assets other than the Leasehold Interests and other Valued Assets. 3.6 VALUE OF LEASEHOLD INTEREST OR TITLE DEFECT. As used herein, the term "Allocated Value" shall mean, with respect to any Valued Asset, Property, or any unit or well relating thereto, the amount set forth under the column entitled "Allocated Value" for such Property, unit or well on Exhibit 3.6 (which Exhibit 3.6 includes an Allocated Value for and list of all Leasehold Interests that have been identified prior to the date hereof as being subject to a preferential purchase right) or if no separate amount is set forth in Exhibit 3.6, the amount agreed upon by ARCO and Purchaser as the value of such Leasehold Interest, unit or well. If ARCO does not agree with Purchaser's proposed Defect Value or the parties are unable to agree upon whether a Title Defect exists, the Allocated Value of a Leasehold Interest or the value allocated to a Title Increase, in each case for purposes of Section 3.5, then the parties shall enter into good faith negotiations and shall attempt to agree on such matter, and any values to be agreed upon shall be based on the Allocated Value for the group of properties with which such Leasehold Interest, unit or well appears on Exhibit 3.6. 3.7 DETERMINATION OF VALUES BY CONSULTANT. Subject to ARCO's right to elect to indemnify Purchaser pursuant to Section 3.5(b)(i), if ARCO and Purchaser cannot reach agreement on the existence of a Title Defect, the Allocated Value of a Leasehold Interest, the Defect Value for a Title Defect or the value allocated to any Title Increases, in any such case within 10 days after the commencement of good faith negotiations pursuant to Section 3.6, at either party's option, upon notice to the other party, such Allocated Value, Defect Value or amount allocated to a Title Increase, as applicable, shall be determined by an independent petroleum reservoir consultant chosen by lot from among the following firms: DeGolyer & MacNaughton, Keplinger and Associates, Inc. and Gruy and Associates, Inc. Such consulting firm shall have the right to hire such additional neutral consultants and experts as it deems reasonably appropriate. The consultant chosen for the first applicable valuation hereunder shall serve for all Purchase and Sale Agreement Page 9 10 valuations hereunder; provided, however, that if at any time any consultant so chosen fails or refuses to perform hereunder, a new consultant shall be chosen in a similar manner from among the remaining firms. The cost of any consultant shall be borne one-half by ARCO and one-half by Purchaser. Each party shall present its position on the value in question to the consultant within five days after the consultant is requested to determine the value, and the consultant shall make a determination of the value involved as soon as practicable thereafter. The determination by the consultant shall be conclusive and binding on the parties, and shall be enforceable against any party in any court of competent jurisdiction. 3.8 NOTICES TO HOLDERS OF PREFERENTIAL PURCHASE RIGHTS. With respect to each party shown in ARCO's records as holding a preferential purchase right covering the Leasehold Interests (a preliminary list of such affected Leasehold Interests is set forth in Exhibit 3.6), ARCO shall send to the holder of such right a notice offering to sell to such holder, in accordance with the contractual provisions applicable to such right, those Leasehold Interests covered by such right on the terms hereof and for the same Allocated Value of such Leasehold Interests (as set forth on Exhibit 3.6), subject to adjustments in price in the same manner that the Purchase Price is adjusted pursuant to Article 2 of this Agreement. 3.9 EXERCISE OF PREFERENTIAL PURCHASE RIGHTS. If, prior to Closing, any holder of a preferential purchase right notifies ARCO that it intends to consummate the purchase of the Leasehold Interests to which its preferential purchase right applies, then those Leasehold Interests shall be excluded from the Assets to be conveyed to Purchaser under this Agreement, and the Purchase Price shall be reduced by the Allocated Value of such Leasehold Interests; provided, however, that if the holder of such preferential right fails to consummate the purchase of the Leasehold Interests covered by such right, then within 90 days following the Closing Date, ARCO may so notify Purchaser, and within 15 days after Purchaser's receipt of such notice from ARCO, ARCO shall sell to Purchaser, and Purchaser shall purchase from ARCO, for a price equal to the Allocated Value of such Leasehold Interests (as adjusted pursuant to the provisions of Section 2.2 above) and upon the other terms of this Agreement (to the extent applicable), the Leasehold Interests to which the preferential purchase right applied. All Leasehold Interests, other than those for which ARCO has received notice of the exercise of a preferential purchase right, subject to the other provisions of the Agreement, shall be sold to Purchaser at the Closing pursuant to the provisions of this Agreement. 3.10 RISK OF LOSS. Subject to the provisions of Section 9.7, no adjustment to the Purchase Price shall be made if, after the date hereof and prior to the Closing any part of the Assets shall be destroyed or harmed by fire or any other cause or shall be taken by condemnation or the exercise of eminent domain, but Purchaser shall be entitled to any applicable insurance proceeds (to the extent actually received by ARCO and not payable from a captive insurance carrier or subject to reimbursement or repayment by ARCO or its affiliates) or condemnation awards. 3.11 ARBITRATION PROCEDURE. If any matter is required by this Article 3 to be arbitrated, such arbitration shall be conducted as set forth in this Section 3.11. (a) The parties shall jointly select a mutually acceptable person as the sole arbitrator under this Agreement. If the parties are unable to agree upon the designation of a person as arbitrator, then either ARCO or Purchaser, or all of such parties, may in writing request the American Arbitration Association ("AAA") to appoint a qualified arbitrator. (b) Any arbitration hearing shall be held at a place in Houston, Texas acceptable to the arbitrator. (c) The arbitrator shall settle disputes regarding existence and value of Title Defects and ARCO's attempts to correct any Title Defects in accordance with the Texas General Arbitration Act (Chapter 171, Texas Civil Practice and Remedies Code) and the Commercial Arbitration Rules of the AAA, to the extent such rules do not conflict with the terms of such act and the terms hereof. Such arbitrator shall hear all arbitration matters arising under this Article 3. The decision of the arbitrator shall be binding upon the parties, and may be enforced in any court of competent jurisdiction. ARCO and Purchaser, respectively, shall bear their own legal fees and other costs incurred in presenting their respective cases. The charges and expenses of the arbitrator shall be shared equally by ARCO and Purchaser. (d) The arbitration shall commence within thirty (30) days after the arbitrator is selected as set forth in Section 3.11(a) above. In fulfilling his or her duties hereunder, the arbitrator shall be bound by the terms of this Agreement, may consider such other matters as in the opinion of the arbitrator are necessary or helpful to make a proper evaluation and may consult with and engage disinterested third parties, including, without limitation, petroleum engineers, attorneys and consultants, to advise the arbitrator. (e) If any arbitrator selected hereunder (whether selected by ARCO and Purchaser, or by the AAA) should die, resign or be unable to perform his duties hereunder, the parties or the AAA who selected such arbitrator, as the case may be, shall select a replacement arbitrator. The aforesaid procedure shall be followed from time to time as necessary. ARTICLE 4 - REPRESENTATIONS AND WARRANTIES OF ARCO ARCO represents and warrants to Purchaser that: 4.1 EXISTENCE. ARCO is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and is duly qualified to carry on its business in the states where the Assets are located. Purchase and Sale Agreement Page 10 11 4.2 POWER. ARCO has the corporate power and authority to enter into and perform this Agreement and the transactions contemplated hereby. Subject to preferential purchase rights and restrictions on assignment of the type generally found in the oil and gas industry (which shall include any matter that would constitute a Title Defect under Article 3 hereof), and to rights to consent by, required notices to, and filings with or other actions by governmental or tribal entities, the execution, delivery and performance of this Agreement by ARCO, and the transactions contemplated hereby, will not violate (a) any provision of the certificate of incorporation or bylaws of ARCO, (b) any material agreement or instrument to which ARCO is a party or by which ARCO or any of the Leasehold Interests are bound, (c) any judgment, order, ruling, or decree applicable to ARCO as a party in interest, or (d) any law, rule or regulation applicable to ARCO. 4.3 AUTHORIZATION. The execution, delivery and performance of this Agreement and the transactions contemplated hereby have been duly and validly authorized by all requisite corporate action on the part of ARCO. This Agreement has been duly executed and delivered on behalf of ARCO, and at Closing all documents and instruments required hereunder to be executed and delivered by ARCO shall have been duly executed and delivered. This Agreement does, and such documents and instruments shall, constitute legal, valid and binding obligations of ARCO enforceable in accordance with their terms, subject, however, to the effect of bankruptcy, insolvency, reorganization, moratorium and similar laws from time to time in effect relating to the rights and remedies of creditors, as well as to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). 4.4 BROKERS. ARCO has incurred no obligation or liability, contingent or otherwise, for brokers' or finders' fees in respect of the matters provided for in this Agreement that will be the responsibility of Purchaser; and any such obligation or liability that might exist shall be the sole obligation of ARCO. 4.5 FOREIGN PERSON. ARCO is not a "foreign person" within the meaning of the Internal Revenue Code of 1986, as amended, (hereinafter called the "Code"), Section 1445 and 7701 (i.e. ARCO is not a nonresident alien, foreign corporation, foreign partnership, foreign trust or foreign estate as those terms are defined in the Code and any regulations promulgated thereunder). 4.6 DEFAULTS. To the best of ARCO's knowledge, ARCO is not in default under and no condition exists that with notice or lapse of time or both would constitute a default under (i) any mortgage, indenture, loan, credit agreement or other agreement or instrument evidencing indebtedness for borrowed money to which any of the Assets are subject, or any other agreement, contract lease, license or other instrument, (ii) any order, judgment or decree of any court, commission, board, agency or other governmental body, or (iii) any law, statute, ordinance, decree, order, rule or regulation of any governmental authority. 4.7 CHANGES IN LAST YEAR. To the best of ARCO's knowledge and except as provided for or disclosed in Exhibit "4.7" hereto, during the one (1) year period immediately prior to the date of this Agreement, there has not been: (a) Any material damage, destruction or loss to or of the Assets to be sold to Purchaser, whether or not covered by insurance; (b) Any sale, lease or other disposition of the Assets by ARCO, except as permitted by the terms of this Agreement; (c) Any mortgage, pledge or grant of a lien or security interest in any of the Assets by ARCO, except any such encumbrance that will be released at or before the Closing; or (d) Any contract or commitment by ARCO to do any of the foregoing. 4.8 MATERIAL AGREEMENTS. To the best of ARCO's knowledge, (I) Exhibit "A" hereto sets forth a listing of all material contracts, agreements, plans, commitments and other burdens and documents affecting the Assets (the "Material Agreements"), (ii) all of such Material Agreements are in full force and effect and are the valid and legally binding obligations of the parties thereto, (iii) ARCO is not in breach or default with respect to any material obligations pursuant to any Material Agreement; (iv) no other party to any Material Agreement (or any successor in interest thereto) is in breach or default with respect to any of its material obligations thereunder; (v) ARCO has not given nor received notice of any action to terminate, cancel, rescind or procure a judicial reformation of any Material Agreement; and (vi) the listing of the Material Agreements on Exhibit "A" includes, without limitation, the following: (a) Any contract, commitment or agreement that involves aggregate expenditures by ARCO with respect to the Assets of more than $10,000.00 per year; (b) Any indenture, trust agreement, loan agreement or note under which ARCO has outstanding indebtedness, obligations or liabilities for borrowed money and which is secured by a lien, security interest or other encumbrance on the Assets; (c) Any lease, sublease, installment purchase or similar arrangement for the use or occupancy of real property that involves aggregate expenditures by ARCO of more than $10,000.00 per year, together with a list of the location of such leased property, the date Purchase and Sale Agreement Page 11 12 of termination of such arrangements, the name of the other party and the annual rental payments required to be made for such arrangements; (d) Any guaranty, direct or indirect, by any affiliate of ARCO of any contract, lease or agreement entered into by ARCO with respect to the ownership or operation of the Assets; (e) Any agreement of surety, guarantee or indemnification by ARCO with respect to the ownership or operation of the Assets; (f) All contacts for the sale and purchase of hydrocarbons produced from the Assets and agreements for the transportation of hydrocarbons affecting the Assets; and (g) All farmout, farmin, dry hole, bottom hole, acreage contribution, purchase and acquisition agreements, area of mutual interest agreements, salt water disposal agreements, processing agreements, plant/facilities agreements, servicing contracts, easement and/or right-of-way agreements, operating agreements, unitization or pooling agreements and all other executory contracts and agreements relating to the Assets. 4.9 DEFECTS. To the best of ARCO's knowledge and except as provided for or disclosed in Exhibit 4.9, there are no material defects in the Assets to be conveyed to Purchaser pursuant to the terms hereof which would prevent the continued operation of the Assets in accordance with prior practice. 4.10 TAXES. To the best of ARCO's knowledge, all ad valorem, property, production, severance and similar taxes and assessments based on or measured by the ownership of property or the production of hydrocarbons or the receipt of proceeds therefrom with respect to the Assets which are currently due have been properly and timely paid. 4.11 COMPLIANCE WITH LAWS. To the best of ARCO's knowledge, all material valid laws, regulations and orders of all governmental agencies having jurisdiction over the Assets have been and shall continue to be complied with until the Closing, all material necessary permits from and reports to governmental agencies having jurisdiction in connection with the Assets have been obtained and have been timely, properly and accurately made and will continue to be timely, properly and accurately made through Closing, and all plugged wells located on the Assets have been properly plugged. 4.12 OPTIONS AND CALLS. To the best of ARCO's knowledge, except as specifically disclosed on Exhibit "A" hereto, none of the Assets is subject to any options, calls or preferential rights to purchase production or similar rights that would adversely and materially affect the value of the Assets or the price Purchaser is able to obtain form the sale of production from the Assets after the Effective Date. 4.13 LITIGATION. To the best of ARCO's knowledge and except as may be set forth in Exhibit 9.6 hereto, on the date hereof no suit, action or other proceeding is pending before any court or governmental agency to which ARCO is a party and which might result in impairment or loss of ARCO's title to any part of the Assets or that might hinder or impede operation of the Assets and, to the knowledge of ARCO, no such suit, action or other proceeding is threatened. ARCO shall promptly notify Purchaser of any such proceeding which comes to ARCO's attention after the date of this Agreement. 4.14 LEASE MAINTENANCE. To the best of ARCO's knowledge (1) all material royalties (other than royalties in suspense), rentals and other payments due under the Leasehold Interests have been properly and timely paid, (ii) all conditions necessary to keep such Leasehold Interests in force have been fully performed, (iii) no notices have been received by ARCO of any claim to the contrary, and (iv) all of such Leasehold Interests are in full force and effect. 4.15 GAS PRODUCTION AND IMBALANCES. To the best of ARCO's knowledge and except as disclosed in Exhibit 2.2, ARCO has not produced a share of gas with respect to the Assets greater than its ownership percentage and ARCO is under no obligation to reduce its share of production under any gas balancing agreement or similar arrangement to allow under-produced parties to come back into balance. Except as disclosed in Exhibit 2.2, ARCO is receiving on a current basis the payments required under the terms of any gas contracts applicable to the Assets, and no purchaser of natural gas under any gas contracts has (i) materially curtailed (other than seasonal curtailment) its takes of natural gas, or (ii) given notice (either written or verbal) that it desires to amend any gas contracts with respect to price of quantity of deliveries to such an extent that any such action would materially affect the economic value of the reserves attributable to the Assets affected by such action. 4.16 PENDING AND PROPOSED OPERATIONS AND CAPITAL PROJECTS. Exhibit 4.16 is a list and description of all wells currently being drilled, reworked, recompleted or on which other operations are being conducted or have been formally proposed and the associated costs or estimates thereof, and of all other capital projects, proposed or pending with respect to the Assets and the associated costs or estimates thereof, and all other authorities for expenditure received or given by ARCO with respect to the Assets for which the work therein described was not fully completed prior to the Effective Date, regardless of whether ARCO has approved, disapproved or not yet responded to any such authority for expenditure, to the extent, in each case, that such costs, estimates or authorities for expenditure exceed $50,000.00 per well or project, net to ARCO's interest. Purchase and Sale Agreement Page 12 13 ARTICLE 5 - REPRESENTATIONS AND WARRANTIES OF PURCHASER Purchaser represents and warrants to ARCO that: 5.1 EXISTENCE. Purchaser is a limited partnership duly organized, validly existing, and in good standing under the laws of the State of Texas, and is duly qualified to carry on its business in the states where the Assets are located. 5.2 POWER. Purchaser has the partnership power and authority to enter into and perform this Agreement and the transactions contemplated hereby. Subject to rights to consent by, required notices to, and filings with or other actions by governmental entities, the execution, delivery and performance of this Agreement by Purchaser, and the transactions contemplated hereby, will not violate (a) any provision of the partnership agreement or bylaws of Purchaser, (b) any material agreement or instrument to which Purchaser is a party or by which Purchaser is bound, (c) any judgment, order, ruling, or decree applicable to Purchaser as a party in interest, or (d) any law, rule or regulation applicable to Purchaser. 5.3 AUTHORIZATION. The execution, delivery and performance of this Agreement and the transactions contemplated hereby have been duly and validly authorized by all requisite partnership action on the part of Purchaser. This Agreement has been duly executed and delivered on behalf of Purchaser, and at Closing all documents and instruments required hereunder to be executed and delivered by Purchaser shall have been duly executed and delivered. This Agreement does, and such documents and instruments shall, constitute legal, valid and binding obligations of Purchaser enforceable in accordance with their terms, subject, however, to the effect of bankruptcy, insolvency, reorganization, moratorium and similar laws from time to time in effect relating to the rights and remedies of creditors, as well as to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). 5.4 BROKERS. Purchaser has incurred no obligation or liability, contingent or otherwise, for brokers' or finders' fees in respect of the matters provided for in this Agreement which will be the responsibility of ARCO; and any such obligation or liability that might exist shall be the sole obligation of Purchaser. 5.5 FURTHER DISTRIBUTION. Purchaser is not acquiring the Leasehold Interests with a view to, or for offer of resale in connection with, a non-exempt distribution thereof within the meaning of the Securities Act of 1933, as amended, and the rules and regulations pertaining to it or a distribution thereof in violation of any applicable Securities laws. Purchaser covenants that if in the future it should decide to dispose of any of its interest in the Assets, subject to any restriction on assignment set forth herein or in the Assignment and Bill of Sale delivered by ARCO to Purchaser at Closing, Purchaser will do so only in compliance with any applicable Federal and State Securities laws. ARTICLE 6 - PRE-CLOSING OBLIGATIONS OF ARCO 6.1 OPERATIONS. From the date of this Agreement until Closing (the "Interim Period"), except as otherwise approved by Purchaser (which approval shall not be unreasonably withheld), ARCO (a) shall permit Purchaser to have access to those Assets operated by ARCO and shall use reasonable efforts to provide Purchaser access to those Assets not operated by ARCO, (b) shall operate the Assets for which it is the operator in a good and workmanlike manner and in accordance with past practices, (c) shall not transfer, sell, hypothecate, encumber or otherwise dispose of any of the Assets (other than in the ordinary course of business or as required in connection with the exercise by third parties of preferential rights to purchase any of the Assets, or as required in the administration of existing agreements pertaining to any of the Assets), (d) shall maintain all insurance coverages now in force with respect to the Assets, (e) shall pay or cause to be paid prior to delinquency all costs and expenses in connection with the ownership and operation of the Assets, (f) shall keep the Material Agreements in full force and effect and will perform and comply with all the convenants and conditions contained therein, (g) shall not enter into any material new agreements or commitments with respect to the Assets, and (h) shall not modify, terminate or settle any dispute arising out of any of the Material Agreements relating to the Assets. In the absence of Purchaser's prior written consent (which consent shall not be unreasonably withheld), ARCO shall not conduct or authorize any work, repair, capital investment or operation with respect to the Assets requiring an expenditure of $50,000 or more for any single project (except emergency operations). 6.2 PERMISSIONS. During the Interim Period ARCO will use reasonable efforts to obtain all permissions, approvals, and consents of federal, state and local governmental authorities and others as may be required to consummate the sale contemplated hereunder (excluding governmental permissions, approvals and consents which are customarily obtained after the consummation of transactions of the type contemplated hereunder). ARTICLE 7 - PRE-CLOSING OBLIGATIONS OF PURCHASER 7.1 CONFIDENTIALITY. Purchaser shall cause (a) any information relating to the terms of the transactions contemplated hereunder, (b) the information and data furnished or made available by ARCO to Purchaser and its officers, employees, and representatives in connection with this Agreement or Purchaser's investigation of the Assets and (c) any information relating to Title Defects for which ARCO has agreed to indemnify Purchaser pursuant to Section 3.5, in each case to be maintained in confidence Purchase and Sale Agreement Page 13 14 and not to be used for any purpose other than in connection with this Agreement or Purchaser's investigation of the Assets; provided, however, that solely with respect to information of the type described in clauses (a) and (b) preceding, the foregoing obligation shall terminate on the earlier to occur of (i) the Closing, (ii) such time as the information or data in question is disclosed to Purchaser by a third party that is not obligated to ARCO to maintain same in confidence, or (iii) such time as the information or data in question becomes generally available to the oil and gas industry other than through the breach of the foregoing obligation. The obligations of Purchaser under this Section 7.2 shall be in addition to, and not in lieu of, Purchaser's obligations under any confidentiality agreements previously executed by ARCO and Purchaser that relate to the Assets (the "Prior Confidentiality Agreements"). Notwithstanding anything to the contrary contained in the Prior Confidentiality Agreements, Purchaser acknowledges and agrees that the terms and provisions of the Prior Confidentiality Agreements shall not be superseded by the provisions of this Agreement, but shall continue in full force and effect from and after the Closing Date. 7.2 RETURN OF DATA. Purchaser agrees that if this Agreement is terminated for any reason whatsoever, Purchaser shall, at ARCO's request, promptly return to ARCO all information and data furnished by or on behalf of ARCO to Purchaser, its officers, employees, and representatives in connection with this Agreement or Purchaser's investigation of the Assets, and Purchaser shall deliver to ARCO or destroy all copies, extracts or excerpts of such information and data and all documents generated by Purchaser that contain any portion of such information or data. 7.3 INDEMNITY REGARDING ACCESS. Purchaser agrees to protect, indemnify, defend and hold harmless ARCO, its directors, officers, employees, agents and representatives (collectively, the "ARCO Indemnified Parties") from and against any and all claims, liabilities, losses, costs and expenses (including, without limitation, court costs and reasonable attorneys' fees) in connection with personal injuries, including death, or property damage arising out of or relating to the access of Purchaser, its officers, employees, and representatives to the Assets and any information relating thereto as permitted under this Agreement, REGARDLESS OF WHETHER SUCH INJURIES, DEATH OR DAMAGES ARE CAUSED IN WHOLE OR PART BY THE SOLE, PARTIAL, CONCURRENT OR OTHER NEGLIGENCE, GROSS NEGLIGENCE, STRICT LIABILITY, WILLFUL MISCONDUCT OR OTHER FAULT OF THE ARCO INDEMNIFIED PARTIES. IT IS THE EXPRESSED INTENTION OF THE PARTIES HERETO THAT THE INDEMNITY PROVIDED FOR BY THIS SECTION 7.3 CONSTITUTES AN AGREEMENT BY PURCHASER TO INDEMNIFY AND PROTECT THE ARCO INDEMNIFIED PARTIES FROM THE CONSEQUENCES OF THEIR OWN NEGLIGENCE, GROSS NEGLIGENCE, STRICT LIABILITY, WILLFUL MISCONDUCT OR OTHER FAULT, REGARDLESS OF WHETHER SAME IS THE SOLE OR A CONCURRING CAUSE OF THE INJURY, DEATH OR DAMAGE. PURCHASER FURTHER AGREES THAT ACCESS TO CERTAIN OF THE ASSETS SHALL BE CONDITIONED UPON PURCHASER, ITS AGENTS, EMPLOYEES, REPRESENTATIVES OR CONTRACTORS EXECUTING APPROPRIATE REQUEST FOR ACCESS FORMS AS MAY BE REQUIRED BY ARCO. ARTICLE 8 - ARCO'S CONDITIONS OF CLOSING ARCO's obligation to consummate the transactions provided for herein is subject to the satisfaction or waiver on or before the Closing Date of the following conditions: 8.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties of Purchaser contained in Article 5 shall be true and correct in all material respects on the date of Closing as though made on and as of that date. 8.2 PERFORMANCE. Purchaser shall have performed in all material respects the obligations, covenants and agreements required hereunder to be performed by it at or prior to the Closing. 8.3 OFFICERS CERTIFICATE. Purchaser shall have delivered to ARCO a certificate of a corporate officer, dated the date of Closing, certifying on behalf of Purchaser that the conditions set forth in Sections 8.1 and 8.2 have been fulfilled. 8.4 PENDING MATTERS. No suit, action or other proceeding by a third party or a governmental authority shall be pending or threatened which seeks substantial damages from ARCO in connection with, or seeks to restrain, enjoin or otherwise prohibit, the consummation of the transactions contemplated by this Agreement. 8.5 OPINION OF PURCHASERS COUNSEL. Purchaser shall have delivered to ARCO an opinion of Purchasers counsel reasonably acceptable to ARCO, dated as of the Closing, in form and substance reasonably satisfactory to ARCO, to the effect that: (a) Purchaser is a limited partnership duly organized, validly existing and in good standing under the laws of the State of Texas and is duly qualified to carry on its business in the state(s) where the Assets are located; (b) The execution, delivery and performance of this Agreement and the transactions contemplated hereby have been duly and validly authorized by all requisite corporate action on the part of Purchaser; and Purchase and Sale Agreement Page 14 15 (c) This Agreement and all documents and instruments executed by Purchaser at Closing have been duly executed and delivered on behalf of Purchaser and constitute legal, valid and binding obligations of Purchaser enforceable in accordance with their terms. In giving such opinion, Purchaser's counsel may rely upon certificates of governmental officials and of Purchaser's officers as to matters of fact, and may qualify such opinion with such other assumptions and exceptions as are reasonable under the circumstances. 8.6 OPERATORSHIP FORMS. Purchaser shall have executed and delivered to ARCO such forms as may be required by any governmental authority having jurisdiction to evidence the change of operatorship from ARCO to Purchaser on all wells constituting a part of the Assets that are operated by ARCO. 8.7 BONDS. Purchaser shall have delivered to ARCO either: (a) copies of any bonds, in form and substance and issued by a corporate surety satisfactory to ARCO, covering any ARCO operated Leasehold Interests required under any laws, rules or regulations of any federal, Indian, state or local governmental agencies having jurisdiction over the Assets; or (b) a commitment by a surety company, satisfactory to ARCO, to issue such bonds upon Closing. ARTICLE 9 - PURCHASER'S CONDITIONS OF CLOSING Purchaser's obligation to consummate the transactions provided for herein is subject to the satisfaction or waiver on or before the Closing Date of the conditions set forth in this Article 9. Purchaser acknowledges and agrees that notwithstanding anything contained in this Agreement to the contrary, in no event shall Purchaser's obligation to consummate the transactions provided for herein be subject to the condition that Purchaser receive financing with respect to all or any part of the Purchase Price. 9.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties of ARCO contained in Article 4 shall be true and correct in all material respects on the date of Closing as though made on and as of that date. 9.2 PERFORMANCE. ARCO shall have performed in all material respects the obligations, covenants and agreements required hereunder to be performed by it at or prior to the Closing. 9.3 ATTORNEY-IN-FACT CERTIFICATE. ARCO shall have delivered to Purchaser a certificate of a corporate attorney-in-fact, dated the date of Closing, certifying on behalf of ARCO that the conditions set forth in Sections 9.1 and 9.2 have been fulfilled. 9.4 PENDING MATTERS. No suit, action or other proceeding by a third party or a governmental authority shall be pending or threatened which seeks substantial damages from Purchaser in connection with, or seeks to restrain, enjoin or otherwise prohibit, the consummation of the transactions contemplated by this Agreement. 9.5 OPINION OF ARCO'S COUNSEL.; ARCO shall have delivered to Purchaser an opinion of ARCO's counsel reasonably satisfactory to Purchaser, dated as of the Closing, in form and substance satisfactory to Purchaser, to the effect that: (a) ARCO is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and is duly qualified to carry on its business in the state(s) where the Assets are located; (b) The execution, delivery and performance of this Agreement and the transactions contemplated hereby have been duly and validly authorized by all requisite corporate action on the part of ARCO; and (c) This Agreement and all documents and instruments executed by ARCO at Closing have been duly executed and delivered on behalf of ARCO and constitute legal, valid and binding obligations of ARCO enforceable in accordance with their terms. In giving such opinion, ARCO's counsel may rely upon certificates of governmental officials and of ARCO's officers as to matters of fact, and may qualify such opinion with such other assumptions and exceptions as are reasonable under the circumstances. 9.6 LITIGATION. Except as described in Exhibit 9.6, there shall be no legal or arbitration proceeding against ARCO or directly involving the Assets, in either case with respect to which ARCO has received service of process or other written notice, that reasonably is expected to materially and adversely affect the value of the Assets taken as a whole after the Effective Date. 9.7 MATERIAL ADVERSE CHANGE. There has been no material adverse change in the condition of the Assets, except depreciation of personal property and equipment through ordinary wear and tear. For purposes of this Section 9.7, a "material adverse change" is any one or more acts, omissions, occurrences or conditions which, in the aggregate, could reasonably be expected to impair or diminish the value of the Assets or require Purchaser to make expenditures of funds in repair and replacement of any portion of the Assets in the amount of $500,000 or more. Purchase and Sale Agreement Page 15 16 9.8 ACCURACY OF INFORMATION. The factual and historical data and information with respect to the Assets made available to Purchaser by ARCO and its representatives upon which Purchaser based its offer to purchase the Assets was substantially accurate and complete, and Purchaser has not discovered any fact or circumstance in its due diligence review of the Assets (excluding Title Defects and environmental Conditions which are governed by Article 3 and Article 16, respectively, hereof) which, in the aggregate, could reasonably be expected to impair or diminish the value of the Assets or require Purchaser to make expenditures of funds in repair and replacement of any portion of the Assets in the amount of $500,000 or more. ARTICLE 10 - CLOSING 10.1 TIME AND PLACE OF CLOSING. Subject to the conditions stated in this Agreement, the consummation of the transactions contemplated hereby (the "Closing") shall occur on or before August 31, 1999; provided, however, that if all of the conditions to Closing set forth in Articles 8 and 9 have not been satisfied or waived by such date or any extended date for Closing, the party whose obligations are subject to the conditions that have not been satisfied or waived shall have the right to extend the date of Closing for successive periods of up to seven days each until such conditions shall have been satisfied or waived. The date Closing actually occurs is herein called the "Closing Date." The Closing shall be held at ARCO's offices located at 600 North Marienfeld, Midland, Texas, or at such other location as may be mutually agreed upon by ARCO and Purchaser. 10.2 CLOSING OBLIGATIONS. At the Closing, the following events shall occur: (a) ARCO shall execute, acknowledge and deliver to Purchaser the Conveyance, Assignment and Bill of Sale in the form of Exhibit 10.2(a) conveying the Assets to Purchaser; (b) ARCO shall provide executed change of operatorship forms to Purchaser and Purchaser shall execute same; (c) ARCO and Purchaser shall execute, acknowledge and deliver transfer orders or letters in lieu thereof directing all parties paying for production to make payment to Purchaser of proceeds attributable to production after the Closing Date from the Leasehold Interests; (d) ARCO and Purchaser shall each execute and deliver to the other a Property Transfer Accounting Agreement in the form of Exhibit 10.2(d); (e) If applicable and as provided in Section 13.2, Purchaser shall provide ARCO with properly executed exemption certificates or other documentation evidencing that the transfer of the Assets to Purchaser is exempt from applicable sales or similar taxes; (f) ARCO shall, as soon as is reasonably possible after the Closing, deliver to Purchaser, at ARCO's offices, the Records (it being understood and agreed that ARCO may retain a set of the Records and shall grant access to the Records to Purchaser on the same basis as provided in Section 3.1 until same are delivered to Purchaser); (g) Purchaser shall provide satisfactory evidence to ARCO of compliance with Sections 8.8; (h) Purchaser shall make the payment described in Section 2.3; (i) ARCO and Purchaser shall exchange the certificates described in Sections 8.3 and 9.3; (j) ARCO shall execute such other instruments and take such other action as may be necessary to carry out its obligations under this Agreement; and (k) Purchaser shall execute such other instruments and take such other action as may be necessary to carry out its obligations under this Agreement. (l) ARCO and Purchaser shall execute, acknowledge and deliver Surface Lease Agreement in the form attached as Exhibit 10.2(l) leasing to Purchaser the 24.4 acre tract of land at 1907 East Old Highway 80, White Oak, Texas. ARTICLE 11 - ADDITIONAL AGREEMENTS 11.1 CALCULATION OF ADJUSTED PURCHASE PRICE. Within 120 days after the Closing, ARCO shall prepare, in accordance with this Agreement and with generally accepted accounting principles consistently applied, and deliver to Purchaser a statement setting forth each adjustment to the Purchase Price required pursuant to Section 2.2 and showing the calculation of each such adjustment. Within 30 days after receipt of such statement from ARCO, Purchaser shall deliver to ARCO a written report containing all changes with explanations therefor that Purchaser proposes be made to such statement, it being agreed that Purchaser's failure to deliver such report to ARCO within such time period shall constitute acceptance by Purchaser of ARCO's statement. From and after the expiration of such 30-day period, no additional changes to the statement provided by ARCO shall be considered by the parties. If Purchaser has timely delivered such written report, the parties shall then undertake to agree on the items Purchase and Sale Agreement Page 16 17 in dispute and the final Adjusted Purchase Price no later than 30 days after the receipt by ARCO of Purchaser's statement of proposed changes (it being agreed that any disputes as to adjustments relating to Title Defects shall be resolved prior to such time pursuant to the provisions of Article 3). Following the final determination of the Adjusted Purchase Price pursuant to this Section 11.1, ARCO or Purchaser, as the case may be, shall make the payment required pursuant to Section 2.4. 11.2 SUSPENDED FUNDS. As soon as practicable after the Closing, ARCO shall provide to Purchaser a listing showing all proceeds from production attributable to the Leasehold Interests that are currently held in suspense and shall transfer to Purchaser all such suspended proceeds. Upon receipt of such funds and an appropriate accounting thereof, Purchaser shall be responsible for proper distribution of all the suspended proceeds to the parties lawfully entitled to them, and hereby agrees to indemnify, defend and hold harmless ARCO from and against any and all claims, liabilities, losses, costs and expenses (including, without limitation, court costs and reasonable attorneys' fees) arising out of or relating to such suspended proceeds but only to the extent of the funds actually transferred by ARCO to Purchaser representing such suspended proceeds. 11.3 RECEIPTS AND CREDITS. Subject to the terms hereof and in accordance with the provisions of Section 11.1 herein, and except to the extent same have already been taken into account as an adjustment to the Purchase Price, all monies, proceeds, receipts, credits and income attributable to the Assets (a) for all periods of time subsequent to the Effective Date, shall be the sole property and entitlement of Purchaser, and, to the extent received by ARCO, ARCO shall fully disclose, account for and transmit same to Purchaser and (b) for all periods of time prior to the Effective Date, shall be the sole property and entitlement of ARCO and, to the extent received by Purchaser, Purchaser shall fully disclose, account for and transmit same to ARCO promptly. Subject to the terms hereof and in accordance with the provisions of Section 11.1 herein, and except to the extent same have already been taken into account as an adjustment to the Purchase Price, all costs, expenses, disbursements, obligations and liabilities attributable to the Assets (i) for periods of time prior to the Effective Date, regardless of when due or payable, shall be the sole obligation of ARCO and ARCO shall pay, or if paid by Purchaser, promptly reimburse Purchaser for and hold Purchaser harmless from and against same and (ii) for periods of time subsequent to the Effective Date, regardless of when due or payable, shall be the sole obligation of Purchaser and Purchaser shall promptly pay, or if paid by ARCO, promptly reimburse ARCO for and hold ARCO harmless from and against same. Except to the extent same have already been taken into account as an adjustment to the Purchase Price, all uncollected accounts receivable as of the Closing Date attributable to the Assets after the Effective Date shall be assigned to Purchaser, and all uncollected accounts receivable as of the Closing Date attributable to the Assets prior to the Effective Date shall be retained by ARCO. 11.4 ASSUMPTION OF LIABILITIES; CROSS INDEMNITY. If the Closing occurs, ARCO and Purchaser agree as follows: (a) Purchaser hereby assumes and agrees to pay, perform and discharge the following liabilities and obligations (collectively, the "Assumed Obligations"): (i) subject to the terms of Article 16, all liabilities and obligations that are attributable to the ownership or operation of the Assets on or after the Effective Date (specifically excluding damage to property or injury to or death of persons, in each case occurring after the Effective Date but prior to the Closing Date);; (ii) subject to the terms of Article 16, all liabilities and obligations to properly plug and abandon all wells and remove all related facilities and equipment now or hereafter located on the Leasehold Interests and clean up and restore the Leasehold Interests (including all obligations to clean, close and abandon all pits and impoundments) in accordance with applicable laws (regardless of whether any such obligation to plug, abandon, remove, clean up and restore is attributable to periods of time prior to or after the Effective Date); and (iii) to the extent and only to the extent such matters are disclosed on Exhibit 2.2, any and all obligations to make up, deliver or pay for oil, gas or other hydrocarbons under (A) any gas balancing or similar arrangements affecting the Assets in respect of amounts owed thereunder by ARCO as of the Effective Date, and (B) any take-or-pay, prepayment or similar provisions of any production sales contracts included in the Assets, to the extent any purchaser of production thereunder has the right to apply any amounts received by ARCO pursuant to such provisions as an offset against amounts otherwise due for production or delivery of oil, gas or hydrocarbons not delivered prior to the Effective Date; (b) Subject to the terms of Article 13, which shall control with respect to the tax matters covered thereby, and Article 16, which shall control with respect to the matters covered thereby, Purchaser agrees to indemnify, defend and hold harmless the ARCO Indemnified Parties from and against any and all claims, liabilities, losses, costs and expenses (including, without limitation, court costs and reasonable attorneys' fees, but excluding any amounts reimbursed from third party insurance) (collectively, "Losses") that are attributable to (i) the Assumed Obligations or (ii) a breach by Purchaser of its representations, warranties, covenants and agreements hereunder, IN EACH CASE WITHOUT REGARD TO THE SOLE, PARTIAL OR CONCURRENT NEGLIGENCE, GROSS NEGLIGENCE, STRICT LIABILITY, WILLFUL MISCONDUCT OR OTHER FAULT OF THE ARCO INDEMNIFIED PARTIES; Purchase and Sale Agreement Page 17 18 (c) Subject to the terms of Article 13, which shall control with respect to the tax matters covered thereby, and the terms of Article 16, which shall control with respect to the matters covered thereby, ARCO agrees to indemnify, defend and hold harmless Purchaser and its agents and representatives (the "Purchaser Indemnified Parties") from and against any and all Losses that are attributable to (i) a breach by ARCO of its representations, warranties, covenants and agreements hereunder, or (ii) the lawsuits listed on Exhibit 9.6 and any other pending lawsuits not listed on Exhibit 9.6 for which ARCO has received actual notice on or before the Closing Date or (iii) the ownership or operation of the Assets before the Effective Date (excluding any matters and related Losses with respect to which Purchaser has agreed to indemnify, defend and hold harmless the ARCO Indemnified Parties pursuant to clause (b) above, Article 16 or elsewhere herein, or any matter with respect to which Purchaser has waived claims against ARCO, or released ARCO from liability, pursuant to Section 3.8 or elsewhere hereunder), IN EACH CASE WITHOUT REGARD TO THE SOLE, PARTIAL OR CONCURRENT NEGLIGENCE, GROSS NEGLIGENCE, STRICT LIABILITY, WILLFUL MISCONDUCT OR OTHER FAULT OF THE PURCHASER INDEMNIFIED PARTIES; (d) The indemnity, defense and hold harmless obligations set forth in Sections 11.4(b) and (c) above shall not apply to (i) a claim for indemnification by a party that relates to any amount or item for which such party received credit as an adjustment to the Purchase Price pursuant to the provisions hereof, (ii) either party's costs and expenses with respect to the negotiation and consummation of this Agreement and the transactions contemplated hereby or (iii) any Title Defect claims of Purchaser; and (e) EACH PARTY ACKNOWLEDGES AND AGREES THAT THE INDEMNITY, DEFENSE AND HOLD HARMLESS OBLIGATION SET FORTH IN SECTIONS 11.4(b) AND (c) ABOVE ARE INTENDED TO AND CONSTITUTE AN AGREEMENT OF PURCHASER, IN THE CASE OF SECTION 11.4(b), AND ARCO, IN THE CASE OF SECTION 11.4(c), TO INDEMNIFY AND PROTECT THE OTHER PARTY FROM THE CONSEQUENCES OF SUCH OTHER PARTY'S OWN NEGLIGENCE, STRICT LIABILITY, OR OTHER FAULT, REGARDLESS OF WHETHER SAME IS THE SOLE, PARTIAL OR CONCURRING CAUSE OF ANY APPLICABLE LOSSES AND, IN THE CASE OF NEGLIGENCE, REGARDLESS OF WHETHER SAME IS ACTIVE OR PASSIVE, OR THE RESULT OF AN AFFIRMATIVE ACT OR OMISSION. 11.5 FURTHER ASSURANCES. After Closing, ARCO and Purchaser agree to take such further actions and to execute, acknowledge and deliver such additional documents and instruments as may be necessary or useful in carrying out the purposes of this Agreement or of any document delivered pursuant hereto. ARTICLE 12 - TERMINATION 12.1 RIGHT OF TERMINATION. This Agreement and the transactions contemplated hereby may be terminated: (a) Pursuant to any provisions of this Agreement expressly permitting termination by a party; (b) At any time at or prior to Closing by mutual consent of ARCO and Purchaser; or (c) At any time at or after October 1, 1999, by ARCO or Purchaser, by the delivery of written notice to the other party, if the Closing shall not have occurred by such date; provided, however no such party may exercise any right of termination pursuant to this Section 12.1 if the event giving rise to such termination right shall be due to the willful failure of such party to perform or observe in any material respect any of the covenants or agreements set forth herein to be performed or observed by such party. 12.2 EFFECT OF TERMINATION. If this Agreement is terminated pursuant to Section 12.1, this Agreement shall become void and of no further force or effect (except for the provisions of Sections 4.4, 5.4, 7.1, 7.2, 7.3, 17.1 through 17.8, 17.11, and 17.12, which shall survive such termination and continue in full force and effect); provided, however, that, if either party is in default of its obligations under this Agreement at the time this Agreement is so terminated, such defaulting party shall continue to be liable to the other party for damages (but in no event for specific performance) in respect of such default and such liability shall not be affected by such termination (unless ARCO becomes entitled to retain the Deposit as provided in Section 2.1(d), in which case such retention of the Deposit shall constitute ARCO's sole remedy for Purchaser's failure to consummate the transactions contemplated hereunder). Notwithstanding anything to the contrary contained in this Agreement, upon any termination of this Agreement pursuant to Section 12.1, ARCO shall be free immediately to enjoy all rights of ownership of the Assets and to sell, transfer, encumber or otherwise dispose of the Assets to any party without any restriction under this Agreement; and Purchaser shall be liable for all actual, incidental and consequential damages (including, without limitation, lost profits) if it attempts to interfere in any way with any such enjoyment or action by ARCO. Purchase and Sale Agreement Page 18 19 ARTICLE 13 - TAXES 13.1 APPORTIONMENT OF AD VALOREM AND PROPERTY TAXES. All ad valorem taxes, real property taxes, personal property taxes and similar obligations ("Property Taxes") attributable to the Assets with respect to the tax period in which the Effective Date occurs shall be apportioned as of the Effective Date between ARCO and Purchaser. The owner of record on the assessment date shall file or cause to be filed all required reports and returns incident to the Property Taxes and shall pay or cause to be paid to the taxing authorities all Property Taxes relating to the tax period on which the Effective Date occurs. If ARCO is the owner of record on the assessment date, then Purchaser shall pay to ARCO Purchaser's pro rata portion of Property Taxes within 30 days after receipt of ARCO's invoice therefor, except to the extent taken into account as an adjustment to the Purchase Price pursuant to Section 2.2. If Purchaser is the owner of record as of the assessment date then ARCO shall pay to Purchaser ARCO's pro rata portion of Property Taxes within 30 days after receipt of Purchaser's invoice therefor. 13.2 SALES TAXES. The Purchase Price provided for hereunder excludes any sales taxes or other taxes required to be paid in connection with the sale of the Assets pursuant to this Agreement. Purchaser, however, shall be liable for any sales and use taxes, conveyance, transfer and recording fees and real estate transfer stamps or taxes that may be imposed on any transfer of the Assets pursuant to this Agreement. ARCO shall, in accordance with applicable law, collect and remit any sales or similar taxes that are required to be paid as a result of the transfer of the Assets by ARCO to Purchaser. If the transfer of the Assets pursuant to this Agreement is exempt from applicable sales or similar taxes, Purchaser shall, at Closing, provide ARCO with properly executed exemption certificates or other documentation acceptable under applicable law. 13.3 OTHER TAXES. All taxes (other than income taxes) attributable to the Assets that are imposed on or with respect to the production of oil, natural gas or other hydrocarbons or minerals or the receipt of proceeds therefrom (including but not limited to severance, production, and excise taxes) shall be apportioned between the parties based upon the respective shares of production taken by the parties. All such taxes that have accrued with respect to the period prior to the Closing Date have been or will be properly paid or withheld by ARCO (although such taxes for the period between the Effective Date and the Closing Date will be taken into account as an adjustment to the Purchase Price pursuant to Section 2.2(a)(i)) and all statements, returns, and documents pertinent thereto have been or will be properly filed. Purchaser shall be responsible for paying or withholding or causing to be paid or withheld all such taxes which have accrued after the Closing Date and for filing all statements, returns, and documents incident thereto. 13.4 COOPERATION. Each party to this Agreement shall provide the other party with reasonable access to all relevant documents, data and other information (other than that which is subject to an attorney-client privilege) which may be required by the other party for the purpose of preparing tax returns, filing refund claims and responding to any audit by any taxing jurisdiction. Each party to this Agreement shall cooperate with all reasonable requests of the other party made in connection with contesting the imposition of taxes. Notwithstanding anything to the contrary in this Agreement, neither party to this Agreement shall be required at any time to disclose to the other party any tax return or other confidential tax information. Except where disclosure is required by applicable law or judicial order, any information obtained by a party pursuant to this Section 13.4 shall be kept confidential by such party, except to the extent disclosure is required in connection with the filing of any tax returns or claims for refund or in connection with the conduct of an audit, or other proceedings in response to an audit, by a taxing jurisdiction. 13.5 INDEMNIFICATION FOR TAX. (a) Subject to the provisions of Section 13.5(b), ARCO shall indemnify Purchaser for all liabilities that are assessed against Purchaser for foreign, federal, state, local or Indian Tribal taxes (other than income taxes) in respect of the ownership or operation of the Assets prior to the Effective Date, together with penalties and interest thereon (provided such penalties and interest do not result from the negligence, late filing, fraud or acts of misfeasance or malfeasance of Purchaser), to the extent such liabilities exceed the amounts of such taxes paid by ARCO; provided that ARCO shall be entitled to all refunds or rebates of taxes paid in respect of the ownership or operation of the Assets prior to the Effective Date that may be received by ARCO or Purchaser. Subject to the provisions of Section 13.5(b), Purchaser shall indemnify ARCO for all liabilities which are assessed against ARCO for foreign, federal, state, local or Indian Tribal taxes (other than income taxes), together with penalties and interest thereon (provided such penalties and interest do not result from the negligence, late filing, fraud or acts of misfeasance or malfeasance of ARCO), to the extent such liabilities relate to the ownership or operation of the Assets from and after the Effective Date; provided, however, that such indemnity shall not apply to windfall profit, severance or production taxes on oil and gas production from the Assets on or after the Effective Date to the extent (but only to the extent) such taxes are included in the determination of the Adjusted Purchase Price, and provided further, however, that Purchaser shall be entitled to all refunds or rebates of windfall profit, severance or production taxes on oil and gas production from the Assets on or after the Effective Date that may be received by ARCO or Purchaser, except to the extent (but only to the extent) such refunds or rebates are included in the determination of the Adjusted Purchase Price. (b) In order for ARCO or Purchaser ("Claimant") to make a claim against the other ("Indemnitor") under this Article 13, Claimant shall give prompt notice to Indemnitor of any liability Purchase and Sale Agreement Page 19 20 for which Claimant would claim indemnification under this Article 13, which notice shall include the circumstances surrounding such liability. Indemnitor shall then have the right but not the obligation, to contest such liability at its sole cost and expense by giving written notice to Claimant of such election within 30 days after Indemnitor receives Claimant's notice. Should Indemnitor fail to notify Claimant within such 30-day period, Indemnitor shall be deemed to have elected not to contest such liability. Should Indemnitor elect (or be deemed to have elected) not to contest such liability, Indemnitor shall pay the full amount due under Section 13.5(a) in respect of such liability to Claimant in cash within 30 days after Indemnitor elects (or is deemed to have elected) not to contest such liability. Except as specifically provided in this Section 13.5 with respect to certain tax issues which must be combined or joined with other tax issues, if Indemnitor elects to contest any such liability, Claimant shall give Indemnitor full authority to defend, adjust, compromise or settle such liability and any action, suit, or proceeding in which Indemnitor contests such liability, in the name of Claimant or otherwise as Indemnitor shall elect. In any administrative or legal proceeding, Indemnitor shall employ counsel selected by it and reasonably acceptable to Claimant. With respect to tax issues incident to any such liability that must be combined or joined with one or more other tax issues which Claimant desires to contest, Claimant and Indemnitor shall cooperate fully, and control of any administrative legal proceeding shall rest with the party having the greater ultimate liability (including liability under Section 13.5(a) for the taxes in dispute). The party in control may not adjust, compromise or settle taxes which are contested by or on behalf of the other party without the consent of the other party. With respect to any liability contested by Indemnitor under the terms of this Section 13.5(b), Indemnitor shall pay the full amount due under Section 13.5(a) in respect of such liability to Claimant in cash within 30 days after the liability is finally determined either by settlement or pursuant to the final unappealable judgment of a court of competent jurisdiction. ARTICLE 14 - DOCUMENT RETENTION 14.1 INSPECTION. As used in this Article 14, "Documents" shall mean all files, documents, books and records delivered to Purchaser by ARCO that relate to the Assets, including, but not limited to: financial and tax accounting records; land, title and division of interest files; contracts; engineering and well files; and books and records related to the operation of the Assets during the Interim Period. Subject to the provisions of Section 14.2, Purchaser agrees that the Documents shall be open for inspection by representatives of ARCO at reasonable times and upon reasonable notice during regular business hours for a period of 10 years following the date of Closing (or for such longer period as may be required by law or governmental regulation), and that ARCO may during such period at its expense make such copies thereof as it may reasonably request. 14.2 DESTRUCTION. For a period of 10 years after the date of Closing (or for such longer period as may be required by law or governmental regulation), Purchaser shall not destroy or give up possession of any original or final copy of the Documents without first offering ARCO the opportunity (by delivery of written notice to ARCO as provided in Section 17.1, with an additional copy of such notice delivered to the attention of ARCO's Tax Department), at ARCO's expense (without any payment to Purchaser), to obtain such original or final copy or a copy thereof. After the conclusion of such period, Purchaser shall offer to deliver to ARCO, at ARCO's expense (without any payment to Purchaser), the Documents prior to destroying the same. 14.3 ACCESS. ARCO and Purchaser each shall use its best efforts to afford the other access to (a), in the case of ARCO, employees of ARCO who remain employees of ARCO following the date of Closing and are familiar with the operations of the Assets and (b) in the case of Purchaser, employees of Purchaser which ARCO shall reasonably request for its proper corporate purposes, including without limitation, the defense of legal proceedings. Such access may include interviews or attendance at depositions or legal proceedings; provided, however, that in any event all out-of-pocket expenses (including wages and salaries) reasonably incurred by any party in connection with this Section 14.3 shall be paid or promptly reimbursed by the party requesting such services. ARTICLE 15 - INDEPENDENT INVESTIGATION AND DISCLAIMER 15.1 INDEPENDENT INVESTIGATION AND DISCLAIMER. Purchaser acknowledges that (a) it has had and pursuant to this Agreement will have prior to the Closing access to the Assets and the employees of ARCO and (b) in making the decision to enter into this Agreement and consummate the transactions contemplated hereby, Purchaser has relied solely on the basis of its own independent investigation of the Assets and upon the representations, warranties, covenants and agreements set forth in this Agreement. Accordingly, Purchaser acknowledges that, except as expressly set forth herein, ARCO has not made, AND ARCO HEREBY EXPRESSLY DISCLAIMS AND NEGATES, ANY REPRESENTATION OR WARRANTY, EXPRESSED, IMPLIED, AT COMMON LAW, BY STATUTE, OR OTHERWISE RELATING TO (i) THE CONDITION OF THE ASSETS (INCLUDING WITHOUT LIMITATION, ANY IMPLIED OR EXPRESSED WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR OF CONFORMITY TO MODELS OR SAMPLES OF MATERIALS, OR ENVIRONMENTAL CONDITION), (ii) ANY INFRINGEMENT BY ARCO OF ANY PATENT OR PROPRIETARY RIGHT OF ANY THIRD PARTY, AND (iii) ANY INFORMATION, DATA OR OTHER MATERIALS (WRITTEN OR ORAL) FURNISHED TO PURCHASER BY OR ON BEHALF OF ARCO (INCLUDING, WITHOUT LIMITATION, IN RESPECT OF GEOLOGICAL, GEOPHYSICAL AND SEISMIC DATA, THE EXISTENCE OR EXTENT OF OIL, GAS OR OTHER MINERAL RESERVES, THE Purchase and Sale Agreement Page 20 21 RECOVERABILITY OF OR THE COST OF RECOVERING ANY SUCH RESERVES, THE VALUE OF SUCH RESERVES, ANY PRODUCT PRICING ASSUMPTIONS, AND THE ABILITY TO SELL OIL OR GAS PRODUCTION AFTER CLOSING AND THE ABILITY OF PURCHASER TO BECOME OPERATOR OF THE ASSETS UNDER THE APPLICABLE OPERATING AGREEMENT); AND PURCHASER WILL HAVE SOLE RESPONSIBILITY FOR ANY ACTION TAKEN BY PURCHASER, OR BY OTHERS RELYING ON PURCHASER'S ADVICE, BASED ON THE GEOLOGICAL MAPS, RECORDS, LOGS AND OTHER DATA, IF ANY, TRANSFERRED UNDER THIS AGREEMENT; provided, however, that the foregoing disclaimer and negation of representations and warranties shall not affect or impair the representations and warranties of ARCO set forth in Article 4 hereof. As used in the disclaimer provisions of this Section 15.1, "ARCO" shall include ARCO's agents, representatives and consultants. ARTICLE 16 - ENVIRONMENTAL MATTERS 16.1 PHYSICAL AND ENVIRONMENTAL CONDITIONS. Purchaser agrees and acknowledges that (a) it has had, or prior to the Closing will have, access to and the opportunity to inspect the Assets for all purposes, including without limitation, for the purposes of detecting the presence of hazardous or toxic substances, pollutants or other contaminants, environmental hazards, naturally occurring radioactive materials (NORM) and produced water contamination of the surface and/or subsurface, (b) it has, or prior to the Closing will have, satisfied itself as to the physical and environmental condition of the Assets, both surface and subsurface, and their method of operation and except as set forth herein, agrees to accept an assignment of the Assets at Closing on an "AS IS, WHERE IS" basis, "WITH ALL FAULTS" and (c) in making the decision to enter in this Agreement and consummate the transactions contemplated hereby, Purchaser has relied solely on the basis of its own independent investigation of the Assets and the records related thereto (including the Environmental Reports (as defined below)). Accordingly, Purchaser further acknowledges that with respect to any tests, evaluations or reports that have been conducted or prepared by or on behalf of ARCO pertaining to the environmental condition or operation of the Assets and that are delivered to Purchaser prior to the date hereof (the "Environmental Reports"), ARCO EXPRESSLY DISCLAIMS AND NEGATES ANY REPRESENTATION OR WARRANTY RESPECTING THE ACCURACY OR THOROUGHNESS THEREOF AND DISCLAIMS ANY LIABILITY IN CONNECTION THEREWITH, IN EACH CASE WITHOUT REGARD TO THE SOLE, PARTIAL OR CONCURRENT NEGLIGENCE, STRICT LIABILITY OR OTHER FAULT OF ARCO. Purchaser further acknowledges that it has reviewed, examined and thoroughly familiarized itself with the contents of the Environmental Reports. 16.2 GENERAL ENVIRONMENTAL INDEMNITY. If the Closing occurs, except as provided in the proviso clause of the first sentence of this Section 16.2 and without limiting Purchaser's obligations under Section 11.4, Purchaser hereby assumes and shall be responsible for and agrees to indemnify, defend and hold harmless the ARCO Indemnified Parties from and against any and all Losses attributable to damage to property, injury to or death of persons or other living things, natural resource damages, CERCLA response costs, environmental remediation and restoration costs, or fines or penalties (collectively, "Claims") arising out of or attributable to, in whole or in part, either directly or indirectly, the ownership, condition or operation of the Assets at any time before, at or after the Effective Date (including, without limitation, any Claims relating to any condition existing on, in or under, or resulting from operation of, the Assets as of the Effective Date) WITHOUT REGARD TO THE SOLE, PARTIAL OR CONCURRENT NEGLIGENCE, STRICT LIABILITY OR OTHER FAULT OF THE ARCO INDEMNIFIED PARTIES; provided, however, that ARCO shall indemnify, defend and hold harmless the Purchaser Indemnified Parties from and against any Claim arising out of or attributable to, in whole or in part, either directly or indirectly, the condition or operation of the Assets at any time before the Effective Date that is determined to be the result of or caused in whole or in part by ARCO's violation of, failure to fulfill duties imposed by or incurrence of liability under, any Environmental Laws (as in effect on the Effective Date) (other than any such Claims resulting from or attributable in whole or in part to conditions or operations disclosed in the Environmental Reports or known to Purchaser as of the date hereof), to the extent that such Claim has been finally determined in a third-party lawsuit or administrative proceeding or order that is filed, issued or commenced against Purchaser on or before the first anniversary of the Closing Date. In no event shall ARCO's aggregate liability pursuant to the proviso clause of the immediately preceding sentence exceed an amount equal to $500,000.00. Notwithstanding anything to the contrary hereinabove, ARCO agrees to fully indemnify, defend and hold Purchaser harmless from and against the Claims arising or that may arise in that certain lawsuit known as Harris, et al., v. East Texas Salt Water Disposal Company, et al., as described on Exhibit 9.6, to the extent of and attributable to Purchaser's ownership of the Assets transferred herein, regardless of when such Claims are made. 16.3 ENVIRONMENTAL LAWS. As used herein, the term "Environmental Laws" shall mean any and all federal, state and local statutes, regulations, rules, orders, ordinances, or permits of any governmental authority pertaining to health, the environment, wildlife or natural resources in effect in any and all jurisdictions in which the Assets are located, including, without limitation, the Clean Air Act, as amended, and the Federal Water Pollution Control Act, as amended, the Rivers and Harbors Act of 1899, as amended, the Safe Drinking Water Act, as amended, the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), as amended, the Superfund Amendments and Reauthorization Act of 1986 ("SARA"), as amended, the Resource Conservation and Recovery Act ("RCRA"), as amended, The Hazardous and Solid Waste Amendments Act of 1984, as amended, the Toxic Substances Control Act, as amended, the Occupational Safety and Health Act ("OSHA"), as amended, and the Hazardous Materials Transportation Act, as amended. Purchase and Sale Agreement Page 21 22 16.4 ENVIRONMENTAL ASSESSMENT. Purchaser shall have the right for a period commencing upon execution of this Agreement by both parties and ending on August 13, 1999, to conduct an environmental assessment of the Assets, at Purchaser's sole risk, liability and expense. ARCO shall make available to Purchaser, during the environmental assessment period described above, ARCO's historical files regarding prior operations on the Assets, and provide Purchaser and its representatives with reasonable access to the Assets to conduct the environmental assessment. ARCO shall have the right to be present during any assessment and, if any testing is conducted, ARCO may require splitting of all samples. 16.5 INDEMNIFICATION OF MATERIAL ADVERSE ENVIRONMENTAL CONDITIONS. Purchaser shall advise ARCO of any material adverse environmental condition ("Condition") of the Assets which it finds unacceptable and shall provide evidence thereof on or before the end of the environmental assessment period provided for in Section 16.4. For the purposes of this Section 16.5 a Condition shall be "material" only if the cost to remediate said Condition to levels reasonably acceptable to Purchaser to assure compliance with all applicable environmental laws or other directives exceeds $10,000.00. Purchaser shall treat all information regarding any Condition as confidential, whether material or note, and shall not make any contact with any governmental authority or third party regarding same without ARCO's written consent, unless required by applicable law or other directive. 16.6 REMEDIES FOR IDENTIFIED CONDITIONS. Upon receipt of such notice with respect to each Condition identified by Purchaser, ARCO shall propose to Purchase to either (i) agree with Purchaser on an adjustment to the Purchaser Price, which adjustment shall reflect the cost to remediate such Condition; (ii) if reasonably feasible, remove the affected Assets from the Assets being conveyed and adjust the Purchase Price accordingly; or (iii) agree to indemnify Purchaser from any and all damages, claims, losses and expenses pertaining to the existence and remediation of such Condition. If ARCO's proposal is unacceptable to Purchaser, then, unless Purchaser is willing to waive the Condition(s), Purchase shall have the right to terminate this Agreement by written notice to ARCO and be releases from all further obligations under this Agreement. ARTICLE 17 - MISCELLANEOUS 17.1 GOVERNING LAW. This Agreement and all instruments executed in accordance with it shall be governed by and interpreted in accordance with the laws of the State of Texas, without regard to conflict of law rules that would direct application of the laws of another jurisdiction, except to the extent that it is mandatory that the law of some other jurisdiction, wherein the Assets are located, shall apply. The laws of the state wherein the Leasehold Interests are located shall control as to all matters pertaining to title and Title Defects pursuant to Article 3 herein, and to the evaluation of encumbrances placed upon such Leasehold Interests pursuant to Section 3.3 herein. 17.2 ENTIRE AGREEMENT. This Agreement, including all Exhibits attached hereto and made a part hereof, together with the Prior Confidentiality Agreements, constitute the entire agreement between the parties with respect to the subject matter hereof and thereof and supersede all prior agreements, understandings, negotiations and discussions, whether oral or written, of the parties with respect to same. No supplement, amendment, alteration, modification, waiver or termination of this Agreement shall be binding unless executed in writing by the parties hereto. 17.3 WAIVER. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar), nor shall such waiver constitute a continuing waiver unless otherwise expressly provided. 17.4 CAPTIONS. The captions in this Agreement are for convenience only and shall not be considered a part of or affect the construction or interpretation of any provision of this Agreement. 17.5 ASSIGNMENT. Except as expressly provided herein to the contrary, neither party hereto shall assign this Agreement or any of its rights or obligations hereunder without the prior written consent of the other party and any assignment made without such consent shall be void. Except as otherwise provided herein, this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. After Closing, ARCO acknowledges and agrees that the restrictions set forth in this Section 17.5 shall not obligate Purchaser to obtain the written consent of ARCO prior to any assignment by Purchaser of its ownership interest in the Assets, and Purchaser acknowledges and agrees that any such assignment shall not release Purchaser from any of its liabilities or obligations hereunder. nor extend or increase any of the liabilities or obligations of ARCO hereunder. 17.6 NOTICES. Any notice provided or permitted to be given under this Agreement shall be in writing, and may be served by personal delivery or by depositing same in the mail, addressed to the party to be notified, postage prepaid, and registered or certified with a return receipt requested. Notice deposited in the mail in the manner hereinabove described shall be deemed to have been given and received on the date of the delivery as shown on the return receipt. Notice served in any other manner shall be deemed to have been given and received only if and when actually received by the addressee (except that notice given by telecopier shall be deemed given and received upon receipt only if received during normal business hours and if received other than during normal business hours shall be deemed received as of the opening of business on the next Business Day). For purposes of notice, the addresses of the parties shall be as follows: Purchase and Sale Agreement Page 22 23 For ARCO: Street Address: Mailing Address: Atlantic Richfield Company Atlantic Richfield Company 600 North Marienfeld P. O. Box 1610 Midland, Texas 79701 Midland, Texas 79702 Attn: Business Development Telecopy No.: 915/688-5956 For Purchaser: Street Address: Mailing Address: Future Acquisition 1995, Ltd. Future Acquisition 1995, Ltd. 700 Louisiana, Suite 3700 700 Louisiana, Suite 3700 Houston, TX 77002 Houston, TX 77002 Attn: Tim J. Goff Telecopy No.: 713/236-9799 Each party shall have the right, upon giving 10 days' prior notice to the other in the manner hereinabove provided, to change its address for purposes of notice. 17.7 EXPENSES. Except as otherwise provided herein, each party shall be solely responsible for all expenses incurred by it in connection with this transaction (including, without limitation, fees and expenses of its own counsel and consultants). Purchaser shall pay for all documentary, filing and recording fees required in connection with the filing and recording of the Conveyance, Assignment and Bill of Sale delivered by ARCO to Purchaser at Closing. Within 45 days following Closing, Purchaser shall furnish ARCO with a statement setting forth the recording information for each county wherein such Conveyance, Assignment and Bill of Sale was recorded. 17.8 SEVERABILITY. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced under any rule of law, 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 a materially adverse manner with respect to either party. 17.9 PUBLICITY. ARCO and Purchaser shall consult with each other with regard to all publicity and other releases issued at or prior to the Closing concerning this Agreement and the transactions contemplated hereby and, except as required by applicable law or the applicable rules or regulations of any governmental body or stock exchange, neither party shall issue any publicity or other release without the prior written consent of the other party. 17.10 USE OF ARCO'S NAME. As soon as practicable after the Closing, Purchaser shall remove or cause to be removed the names and marks used by ARCO and all variations and derivatives thereof and logos relating thereto from the Assets and shall not thereafter make any use whatsoever of those names, marks and logos. In the event Purchaser has not completed such removal within 120 days after Closing, ARCO shall have the right but not the obligation to complete such removal or cause such removal to be completed. and Purchaser shall reimburse ARCO for any costs or expenses incurred by ARCO in connection therewith. ARCO agrees to give Purchaser 48 hour notice (exclusive of Saturday, Sunday and legal holidays) prior to the removal of any signs by ARCO at Purchaser's expense. 17.11 CONSEQUENTIAL DAMAGES. Except as expressly provided in Section 12.2, the parties waive any rights to incidental or consequential damages resulting from a breach of this Agreement, including, without limitation, loss of profits. 17.12 NO THIRD-PARTY BENEFICIARY. Except as expressly provided herein, this Agreement is not intended to create, nor shall it be construed to create, any rights in any third party under doctrines concerning third-party beneficiaries. 17.13 SURVIVAL. Except with respect to the covenants set forth in Sections 6.1 and 6.2, the representations, warranties, covenants and obligations of the parties under this Agreement shall survive the Closing; provided, however, that any claim with respect to the breach thereof may be made only if the party claiming a breach thereof shall have notified the breaching party (i) on or before the first anniversary of the Effective Date in the case of ARCO's indemnification of Purchaser as set forth in Section 16.2, and (ii) on or before the first anniversary of the Effective Date in the case of any indemnification by ARCO for Title Defects pursuant to Section 3.5 and (iii) at any time in the case of all other provisions. 17.14 COUNTERPART; EXHIBITS. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. All Exhibits attached hereto are hereby made a part of this Agreement and incorporated herein by this reference. Purchase and Sale Agreement Page 23 24 17.15 ACCESS ACROSS LEASEHOLD INTERESTS. Purchaser agrees to allow ARCO access, at no cost or expense to ARCO, to or across the Leasehold Interests, if ARCO conducts future operations in the vicinity of the Leasehold Interests or if ARCO exercises its rights under Section 17.10. 17.16 OPERATORSHIP MATTERS. (a) Notwithstanding anything herein to the contrary, ARCO does not represent to Purchaser that Purchaser will succeed to ARCO's operatorship of any unit or well constituting a part of the Assets. Purchaser acknowledges and agrees that Purchaser will be required to comply with the terms of any applicable operating agreement, unit operating agreement or other contract relating to any elections or other selection procedures in order to succeed ARCO as operator thereunder. (b) ARCO shall prepare change of operatorship forms for signature by Purchaser at Closing, and promptly following Closing shall cause such forms to be filed with the appropriate authorities. Purchaser shall reimburse ARCO for all filing and related fees, if any, incurred by ARCO in connection with the filing of any change of operatorship forms and shall provide ARCO with evidence of the acceptance by the applicable government authority of any such change of operatorship. 17.17 CONFLICT WITH ASSIGNMENT. ARCO and Purchaser acknowledge and agree that in the event of any conflict or inconsistency between the terms and provisions of this Agreement and the terms and provisions of either the Conveyance, Assignment and Bill of Sale or the Term Mineral Deed executed and delivered at Closing by ARCO and Purchaser, the terms and provisions of this Agreement shall control. 17.18 YEAR 2000 COMPLIANCE. In addition to, and not in alteration, amendment or limitation of, any other provisions of this Agreement, Purchaser expressly acknowledges and agrees that: (a) ARCO either has not assessed, or, if it has assessed, has not (or may not have or not fully have) modified, replaced or otherwise remediated, the Assets, including any components thereof or systems related thereto or embedded therein, to determine whether they are Year 2000 Compliant, as defined herein. (b) If the Assets are not operated by ARCO, ARCO is either unaware of, or has not verified any statements or representations made by the Operator pertaining to, whether or not the Operator has made any such assessment or taken any actions relating thereto, including modification, replacement or other remediation. (c) IF ANY OF THE ASSETS, INCLUDING ANY COMPONENTS THEREOF OR SYSTEMS RELATED THERETO OR EMBEDDED THEREIN, ARE NOT YEAR 2000 COMPLIANT, THEIR ABILITY TO MAINTAIN PRODUCTION OR OTHERWISE FUNCTION OR OPERATE MAY BE AFFECTED. (d) AS BETWEEN PURCHASER AND ARCO, PURCHASER ASSUMES, RELEASES ARCO FROM, AND AGREES TO DEFEND, INDEMNIFY AND HOLD ARCO HARMLESS FROM AND AGAINST, ANY AND ALL RESPONSIBILITY AND LIABILITY FOR ANY CLAIMS OR PROBLEMS RELATING TO OR ARISING FROM THE YEAR 2000 COMPLIANCE STATUS OF THE ASSETS, INCLUDING ANY COMPONENTS THEREOF OR SYSTEMS RELATED THERETO OR EMBEDDED THEREIN, and ARCO shall have no liability whatsoever for any Claims or problems Purchaser may incur or encounter arising from or associated in any way with the Year 2000 Compliance status of the Assets, including any components thereof or systems related thereto or embedded therein. (e) Any disclosures made by ARCO as to Year 2000 Compliance (including but not limited to disclosures as to ARCO's or the Operator's or a manufacturer's/supplier's assessments, inventories, testing, modification, replacement, etc.), whether made orally or in writing, and whether made before or after Closing, are for informational purposes only and Purchaser relies and depends on and uses any and all such disclosures exclusively and entirely at its own risk and without any recourse to ARCO whatsoever. SUCH DISCLOSURES DO NOT AND SHALL NOT CREATE OR BE CONSTRUED TO CREATE ANY EXPRESS OR IMPLIED WARRANTIES ON THE PART OF ARCO, AND ANY SUCH EXPRESS OR IMPLIED WARRANTIES ARE EXPRESSLY DISCLAIMED, INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. (f) "Year 2000 Compliant" means the Assets, including any components thereof or systems related thereto or embedded therein, would: (i) Correctly process date information before and after midnight, December 31, 1999. This would include accepting date input, providing date output, and performing calculations and comparisons on dates or portions of dates. Date interpretation would be correct for all valid date values within the applicable domain; (ii) Function accurately and without interruption before and after January 1, 2000 without any change in operations associated with any date change and/or the advent of the new century; (iii) Respond to two-digit input in a way that would resolve the ambiguity as to the century in a disclosed, defined, and predetermined manner. Interfacing software would make the same century assumptions when processing the two-digit years; (iv) Process the Year 2000 as a leap year; (v) Correctly handle date fields containing non-date information and correctly handle a date held in a non-date field; and (vi) Correctly process any date with a year specified as "99" and "00", regardless of other subjective meanings attached to these values. 17.19 DTPA WAIVER. TO THE EXTENT APPLICABLE TO THE ASSETS OR ANY PORTION THEREOF, PURCHASER HEREBY WAIVES THE PROVISIONS OF THE TEXAS DECEPTIVE TRADE PRACTICES ACT, CHAPTER 17, SUBCHAPTER E, SECTIONS 17.41 THROUGH 17.63, INCLUSIVE (OTHER THAN SECTION 17.555, WHICH IS NOT WAIVED), TEX. BUS. & COM. CODE. In order to evidence its ability to grant such waiver, Purchaser hereby represents and warrants to ARCO that Purchaser (a) is in the business of seeking or acquiring, by purchase or lease, goods or services for commercial or business use, (b) has assets of $5 million or more according to its most recent financial statement prepared in accordance with generally accepted accounting principles, (c) has knowledge and experience in financial and business matters that enable it to evaluate the merits and risks of the transaction contemplated hereby, and (d) is not in a significantly disparate bargaining position. Purchase and Sale Agreement Page 24 25 17.20 ACKNOWLEDGMENT REGARDING CERTAIN PROVISIONS. EACH OF THE PARTIES HERETO SPECIFICALLY ACKNOWLEDGES AND AGREES (A) THAT IT HAS A DUTY TO READ THIS AGREEMENT AND THAT IT IS CHARGED WITH NOTICE AND KNOWLEDGE OF THE TERMS HEREOF, (B) THAT IT HAS IN FACT READ THIS AGREEMENT AND IS FULLY INFORMED AND HAS FULL NOTICE AND KNOWLEDGE OF THE TERMS, CONDITIONS AND EFFECTS OF THIS AGREEMENT, (C) THAT IT HAS BEEN REPRESENTED BY LEGAL COUNSEL OF ITS CHOICE THROUGHOUT THE NEGOTIATIONS PRECEDING ITS EXECUTION OF THIS AGREEMENT AND HAS RECEIVED THE ADVICE OF SUCH COUNSEL IN CONNECTION WITH ENTERING INTO THIS AGREEMENT, AND (D) THAT IT RECOGNIZES THAT CERTAIN OF THE TERMS OF THIS AGREEMENT PROVIDE FOR THE ASSUMPTION BY ONE PARTY OF, AND/OR RELEASE OF THE OTHER PARTY FROM, CERTAIN LIABILITIES ATTRIBUTABLE TO THIS TRANSACTION OR THE PREMISES COVERED HEREBY THAT SUCH PARTY WOULD OTHERWISE BE RESPONSIBLE FOR UNDER THE LAW. EACH PARTY HERETO FURTHER AGREES THAT IT WILL NOT CONTEST THE VALIDITY OR ENFORCEABILITY OF ANY SUCH PROVISIONS OF THIS AGREEMENT ON THE BASIS THAT THE PARTY HAD NO NOTICE OR KNOWLEDGE OF SUCH PROVISIONS OR THAT SUCH PROVISIONS ARE NOT "CONSPICUOUS". IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first set forth above: ATLANTIC RICHFIELD COMPANY ("ARCO") By: --------------------------------------- Name: T. L. Holland Title: Attorney in Fact FUTURE ACQUISITION 1995, LTD. ("PURCHASER") BY: FUTURE PETROLEUM CORPORATION, ITS GENERAL PARTNER By: ---------------------------------- Name: Tim J. Goff Title: President Purchase and Sale Agreement Page 25 26 EXHIBIT A Attached to and made a part of that certain Surface Lease dated October 1, 1999, by and between, Atlantic Richfield Company, as Lessor, and Future Acquisition 1995, Ltd., as Lessee, covering the following described tract of land: BEING 24.405 acres of land located in the William Castleberry Survey, Gregg County, Texas, said 24.405 acre tract of land being a part of the T. B. Harris-Atlantic Refining Company's oil lease more particularly described in that certain Assignment of Oil and Gas Lease dated July 27, 1931, by and between, W. L. Pickens, Assignor, and Cranfill-Reynolds Company, Assignee, as recorded in Volume 93, page 527, Deed Records, Gregg County, said 24.405 acres being more particularly described as follows: BEGINNING at a point 368.5 feet South and 210.08 feet West of the most Southerly Southeast corner of the T. B. Harris-Atlantic Refining Company oil lease, said point being 26 feet North of the center line of Old Highway 80; THENCE: N. 89 deg. 16' W., 50.0 feet along and with the Atlantic Refining Company's Amended Surface Lease dated August 4, 1975, recorded in Volume 989, page 97, Deed Records, Gregg County, Texas, amending the original Surface Lease dated July 24, 1940, recorded in Volume 252, pages 243-249, Deed Records, Gregg County, Texas, being "Said Surface Lease" reference is hereby made for the purpose of all legal descriptions, to a 3/8" iron rod for corner; THENCE: Along and with the West ROW line of an existing oil road the following bearings and distances; N. 8 deg. 59' W., 217.4 feet, N. 18 deg. 49' W, 87.4 feet; N. 38 deg. 10' W., 117.30 feet; N. 41 deg. 13' W., 102.7 feet, N. 32 deg. 02' W., 58.4 feet, and N. 22 deg. 17' W., 56.00 feet to a 3/8" iron rod in same for corner; THENCE: N. 85 deg. 45' W., 414.6 feet to a 3/8" iron rod for corner; THENCE: S. 2 deg. 13' E., 591.0 feet to a 3/8" iron rod 26 feet North of the center line of Old Highway 80 for corner; THENCE: N. 89 deg. 16' W., 608.9 feet along and with said Atlantic Refining Company's Said Surface Lease, as amended, 26 feet North of the center line of Old Highway 80 to a 3/8" iron rod for corner; said point being the SW corner of Said Surface Lease, as amended; THENCE: Along and with the WBL of Said Surface Lease, as amended, the following bearings and distances; N. 2 deg. 09' W., 468.0 feet, N. 34 deg. 28' W., 418.0 feet and N. 3 deg. 51' W., 225.8 feet to a point in the same for corner; THENCE: S. 86 deg. 42' E., 234.90 feet to a 3/8" iron rod for corner, said iron rod being 15.0 feet West of a fence corner post; THENCE: N. 3 deg. 28' E., 242.0 feet, 15.0 feet West and parallel to a chain link fence line to a 3/8" iron rod for corner, said iron rod being 15.0 feet West and 15.0 feet North of a fence corner post; THENCE: S. 86 deg. 38' E., 586.0 feet, 15.0 feet from and parallel to an existing chain link fence line to a 3/8" iron rod for corner; THENCE: S. 43 deg. 06' E., 594.2 feet and S. 18 deg. 20' E., 240.2 feet to a 3/8" iron rod in the East ROW line of an existing oil road for corner; THENCE: Along and with the East ROW line of said road the following bearings and distances S. 22 deg. 13' E., 50.0 feet, S. 32 deg. 04' E., 50.0 feet, S. 41 deg. 18' E., 100.0 feet, S. 38 deg. 07' E., 127.2 feet, S. 18 deg. 46' E., 100.2 feet and S. 8 deg. 48' E., 230.0 feet to PLACE OF BEGINNING, containing 24.405 acres of land, more or less. 27 EXHIBIT "A" ATTACHED TO AND MADE A PART OF THAT CERTAIN PURCHASE AND SALE AGREEMENT DATED EFFECTIVE AS OF OCTOBER 1, 1999, BY AND BETWEEN ATLANTIC RICHFIELD COMPANY (ARCO) AND FUTURE ACQUISITION 1995, LTD. (PURCHASER) IN ADDITION TO ANY OTHER DEPTH LIMITATIONS EXPRESSED HEREIN, IT IS THE EXPRESS INTENTION TO LIMIT THE DESCRIPTIONS OF ARCO'S INTEREST (IF ANY), FROM THE SURFACE DOWN TO THE BASE OF THE DEEPEST PRODUCING FORMATION GREGG COUNTY
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-000049-001 A. A. King and wife, J. R. Stebbins 10-15-30 62 65 A. A. King "A" (s) Lottie King 414536400 100% WI 87.500% NRI FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-000049-001 290 acres more or less out of the AR-105265-000 A. A. King "A" (s) N. E. corner of the P. W. Purchase and Sale Agreement dated October 6, 414536400 Warraner Survey on the S. bank of 1995 by and between East Texas Gathering 100% WI the Sabine River, Gregg County, Company, Atlantic Richfield Company, Sun Pipe 87.500% NRI Texas, and more particularly Line Company and Sun Company, Inc. (s) described in that certain Oil and Gas Lease dated October 15, 1930, AR-105265-001 recorded in Volume 62, Page 65, Crude Oil Buy/Sell Contract dated effective Deed Records, Gregg County, Texas. December 1, 1995 by and between ARCO Permian and Sun Company, Inc. (s) AR-23556 Oil Well Gas Contract dated July 3, 1962, by and between The Atlantic Refining Company, Seller and Sinclair Oil & Gas Company, Buyer Private Radio License from Federal Communications Commission to ARCO Communications, Inc., dated December 16, 1992, File No. 0000000319451, Call Sign KNEP883, Frequency 154.47875 MHZ
Page 1 of 165 28
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-000041-001 A. A. King and wife, J. R. Stebbins 10-15-30 61 220 A. A. King "B" (s) Lottie King, and S. 414537200 G. Andrews and wife, 100% WI Myrtle Andrews 87.50% NRI A. A. King "D" (s) 414538100 100% WI 42-183-090518-000 Viola King Kinsey, et Atlantic Richfield 2-1-89 ---- ---- 87.5% NRI (Surface Lease for al Company A. A. King "B") - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-000042-001 A. A. King and wife, J. R. Stebbins 10-15-30 62 63 A. A. King "C" (s) Lottie King 414539900 100% WI 87.5% NRI FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-000041-001 Five tracts of land situated in Texas Natural Resources Conservation A. A. King "B" (s) Gregg County, Texas, consisting Commission Agreed Order (Docket 97-0448-SIP) 414537200 of 815 acres more or less, and dated July 9, 1997. (s/d) 100% WI more particularly described in 87.50% NRI that certain Oil and Gas Lease AR-105265-000 dated October 15, 1930, recorded Purchase and Sale Agreement dated October 6, A. A. King "D" (s) in Volume 61, Page 220, Deed 1995 by and between East Texas Gathering 414538100 Records, Gregg County, Texas. Company, Atlantic Richfield Company, Sun Pipe 100% WI 42-183-090518-000 Line Company and Sun Company, Inc. (s) 87.5% NRI (Surface Lease for .5 acres of land out of the Alex A. A. King "B") Carmack Survey, Gregg County, AR-105265-001 Texas, as more particularly Crude Oil Buy/Sell Contract dated effective described in that certain December 1, 1995 by and between ARCO Permian unrecorded Surface Lease dated and Sun Company, Inc. (s) February 1, 1989. AR-23556 Oil Well Gas Contract dated July 3, 1962, by and between The Atlantic Refining Company, Seller and Sinclair Oil & Gas Company, Buyer (s) Private Radio License from Federal Communications Commission to ARCO Communications, Inc., dated December 16, 1992, File No. 0000000319451, Call Sign KNEP883, Frequency 154.47875 MHZ - -------------------------- --------------------- ----------------------------------- ----------------------------------------------- East Texas Field 42-183-000042-001 A tract of land containing 127 AR-105265-000 A. A. King "C" (s) acres more or less out of Survey Purchase and Sale Agreement dated October 6, 414539900 known as No. 2 E. H. Angell S. 1995 by and between East Texas Gathering 100% WI F., Gregg County, Texas, and more Company, Atlantic Richfield Company, Sun Pipe 87.5% NRI particularly described by metes Line Company and Sun Company, Inc. (s) and bounds in Oil and Gas Lease dated October 15, 1930, A. A. AR-105265-001 King, et ux, Lessor, and J. R. Crude Oil Buy/Sell Contract dated effective Stebbins, Lessee, recorded in December 1, 1995 by and between ARCO Permian Volume 62, Page 63, Lease and Sun Company, Inc. (s) Records, Gregg County, Texas. AR-23556 Oil Well Gas Contract dated July 3, 1962, by and between The Atlantic Refining Company, Seller and Sinclair Oil & Gas Company, Buyer (s) Private Radio License from Federal Communications Commission to ARCO Communications, Inc., dated December 16, 1992, File No. 0000000319451, Call Sign KNEP883, Frequency 154.47875 MHZ
Page 2 of 165 29
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-004416-000 G. E. Adams, et ux Carl B. Everett 1-1-31 64 247 Adams (s) Mary Barton Adams 412025600 100% WI 87.5% NRI White Oak Field (Cotton Valley) (Surface Lease) G. E. Adams, et ux Atlantic Oil 7-13-36 ---- ----- P. C. Castleberry Gas Mary Barton Adams Producing Co. Unit (d) 414681600 1.61169% ORRI - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-000813-000 S. A. Cochran Argo Royalty Company 5-2-31 83 357 Alf Jones (187446,846) (Mineral Deed) 410702100 1.3761% RI FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-004416-000 A tract of land out of the Henry AR-95702 Adams (s) Hathaway Survey, Gregg County, Farmout Agreement dated February 13, 1990 by 412025600 Texas, and more particularly and between Atlantic Richfield Company, and C 100% WI described in that certain Oil and W Resources, Inc. (d) 87.5% NRI Gas Lease dated January 1, 1931, recorded in Volume 64, Page 247, AR-95702-008 White Oak Field Gregg County, Texas. Declaration of Unitization and Designation of (Cotton Valley) (Surface Lease) Gas Unit dated effective February 5, 1996 by P. C. Castleberry Gas A tract of land containing 11.0 and between Atlantic Richfield Company and C Unit (d) acres out of the Henry Hathaway W Resources, Inc. (d) 414681600 Survey, Gregg County, Texas, as 1.61169% ORRI more particularly described in Private Radio License from Federal that certain unrecorded Surface Communications Commission to ARCO Lease dated July 13, 1936. Communications, Inc., dated December 16, 1992, File No. 0000000319451, Call Sign KNEP883, Frequency 154.47875 MHZ - --------------------------- --------------------- ----------------------------------- --------------------------------------------- East Texas Field 42-183-000813-000 A tract of land out of the G. W. Oil and Gas Lease dated December 25, 1930, Alf Jones (187446,846) (Mineral Deed) Hooper Survey A-92, Gregg County, recorded in Volume 64, Page 47, Deed Records, 410702100 Texas, containing 63.84 acres Gregg County, Texas. 1.3761% RI more or less, called 54.52 acres, and more particularly described AR-105435-001 by metes and bounds in that Declaration of Unitization and Designation of certain Mineral Deed dated May 2, Gas Unit dated effective November 1, 1995, 1931, recorded in Volume 83, Page between Wagner & Brown, et al and Madera 357, Deed Records, Gregg County, Production Company. (d) Texas.
Page 3 of 165 30
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-004034-000 Wm. Anderson et ux B. P. Seay 9-10-30 59 570 Anderson (Oryx) (s) Ella V. Anderson 412095701 50.0% WI 43.75% NRI White Oak Field (Cotton Valley) W. M. Anderson (d) 410005100 6.25% ORRI - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- Willow Springs Field 42-183-007594-000 G. E. Fenton and B. A. Skipper 4-25-30 4 384 (Cotton Valley) wife, Pollick Fenton Annie Fenton No. 1 (d) 435322600 2.12186% ORRI Willow Springs Field (Travis Peak West) 42-183-004947-000 J. R. Fenton, et ux B. A. Skipper 4-25-30 4 351 Annie Fenton Unit #1 Well (d) 437025200 3.04889% ORRI BPO-Oil 2.84793% ORRI BPO-Gas 4.26844% ORRI APO-Oil or 5.33555% WI APO-Oil and 4.66860% NRI APO-Oil 4.17467% ORRI APO-Gas or 5.68720% WI APO-Gas and 4.9763% NRI APO-Gas FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-004034-000 A tract of land out of the P. AR-105265-001 Anderson (Oryx) (s) McAnelly Survey A-267 and John Crude Oil Buy/Sell Contract dated effective 412095701 Ruddle Survey A-176, Gregg December 1, 1995 by and between ARCO Permian 50.0% WI County, Texas, being 83.27 acres and Sun Company, Inc. (s) 43.75% NRI more or less, but called 81 acres more or less, and more AR-105265-000 White Oak Field particularly described in that Purchase and Sale Agreement dated October 6, (Cotton Valley) certain Oil and Gas Lease dated 1995 by and between East Texas Gathering W. M. Anderson (d) September 10, 1930, recorded in Company, Atlantic Richfield Company, Sun Pipe 410005100 Volume 59, Page 570, Deed Line Company and Sun Company, Inc. (s) 6.25% ORRI Records, Gregg County, Texas. AR-105473 Farmout Agreement dated effective February 1, 1996 by and between Atlantic Richfield Company, Wagner & Brown, Ltd., and C W Resources, Inc. (d) PD-2110 Joint Operating Agreement dated November 10, 1931 by and between Sun Oil Company and Cranfill-Reynolds Company. (s/d) AR-98412 Longview Gas Plant Gas Purchase Contract dated January 1, 1997, by and between ARCO Permian, seller and ARCO Permian, buyer, as amended effective August 1, 1998 (s) - --------------------------- --------------------- ----------------------------------- ---------------------------------------------- Willow Springs Field 42-183-007594-000 A tract of land out of the AR-101544 (Cotton Valley) Dolores Sanches Survey A-186, Farmout Agreement dated November 25, 1992 Annie Fenton No. 1 (d) Gregg County, Texas, and being between Atlantic Richfield Company and Cotton 435322600 more particularly described in Valley Productions, Inc. (d) 2.12186% ORRI that certain Oil and Gas Lease dated April 25, 1930, recorded in AR-080830 Willow Springs Field Volume 4, Page 384, Deed Records, Farmout Agreement dated December 5, 1985, (Travis Peak West) 42-183-004947-000 Gregg County, Texas. between Atlantic Richfield Company and Cotton Annie Fenton Unit #1 Well Valley Productions, Inc. (d) (d) A tract of land out of the 437025200 Delores Sanches Survey, Gregg AR-81381 3.04889% ORRI BPO-Oil County, Texas, containing 64 Longview Gas Plant Oil Well Gas Purchase 2.84793% ORRI BPO-Gas acres, being more particularly Contract dated July 24, 1996, by and between 4.26844% ORRI APO-Oil described in that certain Oil and ARCO Permian, seller and ARCO Permian, buyer, or Gas Lease dated April 25, 1930, as amended effective August 13, 1998. (s) 5.33555% WI APO-Oil and recorded in Volume 4, Page 351, 4.66860% NRI APO-Oil Deed Records, Gregg County, Texas. 4.17467% ORRI APO-Gas or 5.68720% WI APO-Gas and 4.9763% NRI APO-Gas
Page 4 of 165 31
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- Glenwood Field 42-183-004023-000 Allen Tooke, et ux, Ardis O. Phillips 10-7-30 4 501 (Cotton Valley) et al ARCO Tooke (d) 410552400 12.5% RI FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- Glenwood Field 42-183-004023-000 40 acres more or less out of the AR-105473 (Cotton Valley) Wakeland Survey, A-218, Gregg Farmout Agreement dated effective February 1, ARCO Tooke (d) County, Texas, and being more 1996 by and between Atlantic Richfield 410552400 fully described in that certain Company, Wagner & Brown, Ltd., and C W 12.5% RI Oil and Gas Lease dated October Resources, Inc. (d) 7, 1930, recorded in Volume 4, Page 501, Deed Records, Gregg AR-101621 County, Texas, insofar as lease Purchase and Sale Agreement dated effective covers rights below the base of January 1, 1993, from Atlantic Richfield the Woodbine Formation Company to Madera Production Company. (s) AR-105265-000 Purchase and Sale Agreement dated October 6, 1995 by and between East Texas Gathering Company, Atlantic Richfield Company, Sun Pipe Line Company and Sun Company, Inc. (s) AR-105265-001 Crude Oil Buy/Sell Contract dated effective December 1, 1995 by and between ARCO Permian and Sun Company, Inc. (s)
Page 5 of 165 32
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- White Oak Field 42-183-004950-000 Arthur Christian et B. A. Skipper 4-28-30 4 322 (Cotton Valley Sand) ux, Elizabeth, et al J. D. Davis "E" Gas Unit #5 (d) 410325401 0.247940% ORRI BPO 0.595055% WI APO 0.520673% NRI APO J. D. Davis "E" Gas Unit #4 (d) 410325400 0.247940% ORRI BPO 0.595055% WI APO 0.520673% NRI APO Willow Springs Field (Cotton Valley ) Davis Gas Unit "E" #2 and #3 (d) 413452400 0.247940% ORRI BPO 0.595055% WI APO 0.520673% NRI APO FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- White Oak Field 42-183-004950-000 31 acres out of the Henry AR-105832 (Cotton Valley Sand) Hathaway Survey, Gregg County, Partial Assignment of Operating Rights and J. D. Davis "E" Gas Unit Texas, being the North 31 acres Bill of Sale dated effective February 1, 1998 #5 (d) of the South 62 acres of land between Atlantic Richfield Company, and Live 410325401 more particularly described in Oak Petroleum, Inc. (s) 0.247940% ORRI BPO that certain Oil and Gas Lease 0.595055% WI APO recorded in Volume 4, Page 322, AR-105265-001 0.520673% NRI APO Oil and Gas Lease Records, Gregg Crude Oil Buy/Sell Contract dated effective County, Texas, only insofar as December 1, 1995 by and between ARCO Permian J. D. Davis "E" Gas Unit lease covers rights below the and Sun Company, Inc. (s) #4 (d) Base of the Woodbine formation 410325400 AR-104971 0.247940% ORRI BPO Unit Operating Agreement dated effective 0.595055% WI APO October 24, 1956, Oxy USA, Inc., Operator. 0.520673% NRI APO (d) Willow Springs Field AR-104971-001 (Cotton Valley ) Declaration of Unitization of Gas Unit dated Davis Gas Unit "E" #2 and June 18, 1958. (d) #3 (d) 413452400 PD-3520 0.247940% ORRI BPO Contract of Purchase and Operating Agreement 0.595055% WI APO dated January 24, 1931, as amended August 11, 0.520673% NRI APO 1949 between the Atlantic Refining Company as Operator and Magnolia Petroleum Company, et al, as Non-Operators. (s) AR-95702 Farmout Agreement dated February 13, 1990 by and between Atlantic Richfield Company, and C W Resources, Inc. (d)
Page 6 of 165 33
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-003989-000 Joe Bander et ux, Exa J. K. Wadley 1-14-31 152 66 Bander (s) Bander 412205499 93.7656% WI 82.0491% NRI Glenwood Field (Cotton Valley) T. W. Lee Gas Unit #1 (d) 415131300 9.10804% ORRI FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-003989-000 A part of the David Ferguson H. AR-95702 Bander (s) R. Survey, Gregg County, Texas, Farmout Agreement dated February 13, 1990 by 412205499 containing 85 acres more or less, and between Atlantic Richfield Company, and C 93.7656% WI and more particularly described W Resources, Inc. (d) 82.0491% NRI in that certain Oil & Gas Lease dated January 14, 1931, recorded PD-2062 Glenwood Field Volume 152, Page 66, Deed Operating Agreement dated December 21, 1931 (Cotton Valley) Records, Gregg County, Texas. by and between Atlantic Oil Producing T. W. Lee Gas Unit #1 (d) Company, Operator, and J. K. Wadley, 415131300 Non-Operator. (s/d) 9.10804% ORRI AR-105265-001 Crude Oil Buy/Sell Contract dated effective December 1, 1995 by and between ARCO Permian and Sun Company, Inc. (s) AR-105265-000 Purchase and Sale Agreement dated October 6, 1995 by and between East Texas Gathering Company, Atlantic Richfield Company, Sun Pipe Line Company and Sun Company, Inc. (s) AR-105473 Farmout Agreement dated effective February 1, 1996 by and between Atlantic Richfield Company, Wagner & Brown, Ltd., and C W Resources, Inc. (d) AR-94444 Purchase and Sale Agreement dated effective October 1, 1991 by and between The Sinclair Revocable Trust, The Fernald Point Production Trust, and Atlantic Richfield Company. (s/d) AR-81381 Longview Gas Plant Oil Well Gas Purchase Contract dated July 24, 1996, by and between ARCO Permian, seller and ARCO Permian, buyer, as amended effective August 13, 1998. (s) Private Radio License from Federal Communications Commission to ARCO Communications, Inc., dated December 16, 1992, File No. 0000000319451, Call Sign KNEP883, Frequency 154.47875 MHZ
Page 7 of 165 34
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-004035-000 R. C. Barnswell B. P. Seay 9-13-30 4 410 Barnswell B&C (s) (Oryx) 412220801 50% WI 43.75% NRI FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-004035-000 A tract of land out of the PD-2110 Barnswell B&C (s) McAnelly Survey, Gregg County, Joint Operating Agreement dated November 10, (Oryx) Texas, and more particularly 1931 by and between Sun Oil Company and 412220801 described in that certain Oil and Cranfill-Reynolds Company. (s/d) 50% WI Gas Lease dated September 13, 43.75% NRI 1930 recorded in Volume 4, Page AR-98412 410, Deed Records, Gregg County, Longview Gas Plant Gas Purchase Contract Texas. dated January 1, 1997, by and between ARCO Permian, seller and ARCO Permian, buyer, as amended effective August 1, 1998 (s) AR-64468 Saltwater Disposal Agreement dated October 1, 1975 between ARCO Oil and Gas Company and East Texas Salt Water Disposal Company. (s)
Page 8 of 165 35
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-003979-000 W. T. Burnside, et al A. O. Phillips 9-19-30 4 493 Burnside "A" (s) 412640800 100% WI 87.5003% NRI - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-000817-000 H. W. McKinley Argo Royalty Company 6-6-31 94 17 Clem Jones (465905) (Mineral Deed) 410703900 4.6875% RI FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-003979-000 166 acres more or less out of the AR-105265-001 Burnside "A" (s) H. R. Survey of Francis W. Crude Oil Buy/Sell Contract dated effective 412640800 Johnson, Gregg County, Texas, and December 1, 1995 by and between ARCO Permian 100% WI more particularly described by and Sun Company, Inc. (s) 87.5003% NRI metes and bounds in that certain Assignment dated January 27, AR-105265-000 1933, from Rio Oil Corporation to Purchase and Sale Agreement dated October 6, Atlantic Oil Producing Company, 1995 by and between East Texas Gathering recorded in Book 141, Page 482, Company, Atlantic Richfield Company, Sun Pipe Deed Records of Gregg County, Line Company and Sun Company, Inc. (s) Texas AR-98412 Longview Gas Plant Gas Purchase Contract dated January 1, 1997, by and between ARCO Permian, seller and ARCO Permian, buyer, as amended effective August 1, 1998 (s) Private Radio License from Federal Communications Commission to ARCO Communications, Inc., dated December 16, 1992, File No. 0000000319451, Call Sign KNEP883, Frequency 154.47875 MHZ - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-000817-000 A tract of land out of the G. W. Oil and Gas Lease dated December 25, 1930, Clem Jones (465905) (Mineral Deed) Hooper Survey, Gregg County, recorded in Volume 64, Page 45, Deed Records, 410703900 Texas, containing 65 acres, more Gregg County, Texas. 4.6875% RI or less, more particularly described in that certain Mineral AR-105435-001 Deed dated June 6, 1931, recorded Declaration of Unitization and Designation of in Volume 94, Page 17, Deed Gas Unit dated effective November 1, 1995, Records, Gregg County, Texas. between Wagner & Brown, et al and Madera Production Company
Page 9 of 165 36
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- Willow Springs Field 42-183-003909-000 J. J. Fuller Mamie S. Hammonds 9-22-30 4 211 (Cotton Valley West) Clemens Gas Unit #1 435321800 3.278776% ORRI Willow Springs Field (Cotton Valley West) Clemens #3 414145800 42-183-004943-00A Dovie I. Collins, J. K. Wadley 1-19-31 78 26 3.278776% ORRI et vir 42-183-004943-00B Dovie I. Collins, J. K. Wadley 6-12-31 88 542 Guardian 42-183-004943-00C Dovie I. Collins, J. K. Wadley 1-24-31 Entry # 7678 Guardian 42-183-004941-000 J. E. Sheffield L. L. Edens 12-30-30 64 83 FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- Willow Springs Field 42-183-003909-000 A tract of land out of the M. A. AR-101543 (Cotton Valley West) Alexander H.R. and M. Irwin Farmout Agreement dated November 24, 1992 by Clemens Gas Unit #1 Surveys, Gregg County, Texas, and between Atlantic Richfield Company and R. 435321800 containing 106.4 acres more or Byron Roach. (d) 3.278776% ORRI less, and more particularly described in that certain Oil and AR-101664-001 Willow Springs Field Gas Lease dated September 22, Declaration of Gas Pooled Unit, R. Byron (Cotton Valley West) 1930, recorded in Volume 4, Page Roach, Trustee, Clemens Cotton Valley Gas Clemens #3 211, Deed Records, Gregg County, Unit No. 1 dated May 24, 1993, recorded in 414145800 Texas. Volume 2512, Page 381, Deed Records, Gregg 3.278776% ORRI County, Texas. 42-183-004943-00A Two tracts of land out of the Dolores Sanchez Survey, Gregg PD-3519 County, Texas, containing 120 Contract of Purchase and Operating Agreement, acres more or less, and more dated April 25, 1931 by and between J. K. particularly described in that Wadley, et al, and Roeser & Pendleton, Inc. certain Oil and Gas Lease dated January 19, 1931, recorded in AR-81381 Volume 78, Page 26, Gregg County, Longview Gas Plant Oil Well Gas Purchase Texas. Contract dated July 24, 1996, by and between ARCO Permian, seller and ARCO Permian, buyer, 42-183-004943-00B Two tracts of land out of the as amended effective August 13, 1998. (s) Dolores Sanchez Survey, Gregg County, Texas, containing 120 acres more or less, and more particularly described in that certain Oil and Gas Lease dated June 12, 1931, recorded in Volume 88, Page 542, Gregg County, Texas. 42-183-004943-00C Two tracts of land out of the Dolores Sanchez Survey, Gregg County, Texas, containing 120 acres more or less, and more particularly described in that certain Oil and Gas Lease dated January 24, 1931, recorded in Entry No. 7678, Deed Records, Gregg County, Texas. 42-183-004941-000 A tract of land out of the Dolores Sanchez Survey, Gregg County, Texas, containing 50 acres more or less, and more particularly described in that certain Oil and Gas Lease dated December 30, 1930, recorded in Volume 64, Page 83, Deed Records, Gregg County, Texas.
Page 10 of 165 37
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- Willow Springs Field 42-183-005874-000 R. R. Collins, et ux J. M. Wood 12-13-31 68 102 (Cotton Valley West) Clemens Gas Unit #1 435321800 Willow Springs Field (Cotton Valley West) Clemens #3 414145800 (continued) 42-183-004415-000 J. J. Reppond, et ux D. H. Byrd 1-24-31 65 285 42-183-003987-00A C. C. Clemens, et al Max Kirk 5-15-31 Entry # 17309 42-183-003987-00B C. C. Clemens, Max Kirk 5-27-31 Entry # 17308 Guardian - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-000820-000 H. H. Brooks Argo Royalty Company 1-23-45 286 427 Cole (650002, etc.) (Mineral Deed) 410506100 .1953% RI East Texas Field M. T. Cole 417163200 .1953% RI FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- Willow Springs Field 42-183-005874-000 A tract of land out of the (Cotton Valley West) Dolores Sanchez Survey, Gregg Clemens Gas Unit #1 County, Texas, containing 55 435321800 acres more or less, and more particularly described in that Willow Springs Field certain Oil and Gas Lease dated (Cotton Valley West) December 13, 1931, recorded in Clemens #3 Volume 68, Page 102, Deed 414145800 Records, Gregg County, Texas. (continued) 42-183-004415-000 A tract of land out of the Dolores Sanchez Survey, Gregg County, Texas, containing 50 acres more or less, and more particularly described in that certain Oil and Gas Lease dated January 24, 1931, recorded in Volume 65, Page 285, Deed Records, Gregg County, Texas. 42-183-003987-00A A tract of land out of the Dolores Sanchez Survey, Gregg County, Texas, containing 63.96 acres more or less, and more particularly described in that certain Oil and Gas Lease dated May 15, 1931, recorded in Entry No. 17309, Deed Records, Gregg County, Texas. 42-183-003987-00B A tract of land out of the Dolores Sanchez Survey, Gregg County, Texas, containing 63.96 acres more or less, and more particularly described in that certain Oil and Gas Lease dated May 27, 1931, recorded in Entry No. 17308, Deed Records, Gregg County, Texas. - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-000820-000 A tract of land out of the E. L. Cole (650002, etc.) (Mineral Deed) Walker Survey containing 192 410506100 acres more or less in Gregg .1953% RI County, Texas, and more particularly described in that East Texas Field certain Deed dated January 23, M. T. Cole 1945, recorded in Volume 286, 417163200 Page 427, Deed Records, Gregg .1953% RI County, Texas.
Page 11 of 165 38
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- White Oak Field 42-183-004033-000 D. A. Porter, et ux W. F. Glenn 1-15-31 6 48 (Cotton Valley) D. A. Porter Gas Unit (d) 410345900 8.197619% ORRI BPO 19.674285% WI APO 17.214999% NRI APO - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-000034-000 C. H. Brown and Atlantic Oil 8-10-36 203 490 Dora Johnson (s/d) (Mineral Deed) Margaret Brown, his Producing Company 414415500 wife, et al 1.5 Net Acres 1.5 Gross Acres Willow Springs Field (Cotton Valley T. B. Harris Gas Unit) 437459200 .000597% RI 3.180539% ORRI 7.63317% WI APO 6.67903% NRI APO FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- White Oak Field 42-183-004033-000 A tract of land out of the G. W. AR-95702-006 (Cotton Valley) Hooper Survey, A-657, Upshur Declaration of Unitization and Designation of D. A. Porter Gas Unit (d) County, Texas and G. W. Hooper Gas Unit effective June 16, 1994. (d) 410345900 Survey, A-92, Gregg County, 8.197619% ORRI BPO Texas, containing 109.33 acres AR-95702 19.674285% WI APO more or less, and more Farmout Agreement dated February 13, 1990 by 17.214999% NRI APO particularly described by metes and between Atlantic Richfield Company and C and bounds in that certain Oil, W Resources, Inc. (d) Gas and Mineral Lease dated January 15, 1931, recorded in AR-101621 Volume 6, Page 48, Lease Records, Purchase and Sale Agreement dated effective Upshur County, Texas. January 1, 1993, from Atlantic Richfield Company to Madera Production Company. (s) Only insofar as leases cover rights below the Base of the Woodbine formation. - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-000034-000 1.5 acres more or less out of the Oil and Gas Lease dated effective November 1, Dora Johnson (s/d) (Mineral Deed) G. W. Hooper Survey, A-92, Gregg 1995 between Atlantic Richfield Company and 414415500 County, Texas, and more Wagner & Brown, Ltd., as recorded in Volume 1.5 Net Acres particularly described by metes 3041, Page 31, Deed Records of Gregg County, 1.5 Gross Acres and bounds in Deed dated August Texas. 10, 1936 recorded in Volume 203, Page 490, Deed Records, Gregg AR-105435-001 County, Texas. Declaration of Unitization dated effective November 1, 1995, C W Resources, Inc., Willow Springs Field Operator. (d) (Cotton Valley T. B. Harris Gas Unit) T. B. Harris Gas Unit 437459200 .000597% RI 3.180539% ORRI 7.63317% WI APO 6.67903% NRI APO
Page 12 of 165 39
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-003977-000 W. P. Duncan et ux Rio Oil Corporation 4-14-31 62 395 Duncan (s) Mary 413275100 100% WI 87.5% NRI - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-043544-000 E. G. Greene and Arctic Oil Company 2-9-31 125 629 wife, Mattie Greene Elder Oil Unit #3 (s) 416021500 .6175% ORRI FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-003977-000 Being a part of the David AR-105265-000 Duncan (s) Ferguson Survey, Gregg County, Purchase and Sale Agreement dated October 6, 413275100 Texas, and more particularly 1995 by and between East Texas Gathering 100% WI described in Oil, Gas & Mineral Company, Atlantic Richfield Company, Sun Pipe 87.5% NRI Lease dated April 14, 1931, Line Company and Sun Company, Inc. (s) recorded in Volume 62, Page 395 Deed Records, Gregg County, Texas. AR-105265-001 Crude Oil Buy/Sell Contract dated effective December 1, 1995 by and between ARCO Permian and Sun Company, Inc. (s) AR-81381 Longview Gas Plant Oil Well Gas Purchase Contract dated July 24, 1996, by and between ARCO Permian, seller and ARCO Permian, buyer, as amended effective August 13, 1998. (s) Private Radio License from Federal Communications Commission to ARCO Communications, Inc., dated December 16, 1992, File No. 0000000319451, Call Sign KNEP883, Frequency 154.47875 MHZ - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-043544-000 Part of the Mary Van Winkle AR-101580 Survey A-208, Gregg County, Like-Kind Exchange Agreement dated June 1, Elder Oil Unit #3 (s) Texas, and more particularly 1992 by and between Atlantic Richfield 416021500 described in that certain Oil and Company and Conoco, Inc. (s/d) .6175% ORRI Gas Lease dated February 9, 1931, recorded in Volume 125, AR-101558 Page 629, Deed Records, Gregg Farmout Agreement dated April 23, 1992 County, Texas. between Conoco Inc. and R&C Petroleum, Inc. (s/d) Operating Agreement dated April 23, 1992 by and between Conoco, Inc. and R&C Petroleum, Inc. (s/d)
Page 13 of 165 40
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-004017-00A S. C. Fishburn and Tom E. Cranfill and 4-9-31 79 299 Fishburn (s) wife, Fannette E. B. Germany 413495800 Fishburn 50% WI 43.75% NRI White Oak Field (Cotton Valley) Fishburn #1 Gas Unit (d) 415689700 2.5832% ORRI FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-004017-00A A tract of land out of Block 5 of AR-98412 Fishburn (s) the Francis W. Johnson Survey, Longview Gas Plant Gas Purchase Contract 413495800 A-112, Gregg County Texas, and dated January 1, 1997, by and between ARCO 50% WI more particularly described in Permian, seller and ARCO Permian, buyer, as 43.75% NRI that certain Oil and Gas Lease amended effective August 1, 1998 (s) dated April 9, 1931 from S. C. White Oak Field Fishburn and wife, Fannette AR-104486-000 (Cotton Valley) Fishburn, recorded in Volume 79, Farmout Agreement dated October 19, 1993, Fishburn #1 Gas Unit (d) Page 299, Deed Records, Gregg Gregg County, Texas, between Atlantic 415689700 County, Texas. Richfield Company and Reserve Management, 2.5832% ORRI Inc. (d) AR-104486-001 Declaration of Unitization & Designation of Gas Unit dated July 21, 1994 between Atlantic Richfield Company and Reserve Management, Inc. (d) Private Radio License from Federal Communications Commission to ARCO Communications, Inc., dated December 16, 1992, File No. 0000000319451, Call Sign KNEP883, Frequency 154.47875 MHZ
Page 14 of 165 41
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-003988-00A McBee Fisher Gaines B. Turner 10-28-19 39 600 Fisher (s) 413500800 100% WI 87.5% NRI White Oak Field (Cotton Valley) (d) T. B. Harris Gas Unit #2 42-183-003988-00B Mrs. Juan Fisher, et J. F. Lucey 3-9-31 76 114 437459200 al .000597% RI 3.180539% ORRI BPO 7.63317% WI APO 6.67902% NRI APO T. B. Harris Gas Unit #3 (d) 437459201 .000597% RI 3.180539% ORRI BPO 7.63317% WI APO 6.67902% NRI APO T. B. Harris Gas Unit #5 (d) 437459202 .000597% RI 3.180539% ORRI BPO 7.63317% WI APO 6.67902% NRI APO T. B. Harris Gas Unit #4 (d) .000597% RI 3.180539% ORRI BPO 7.63317% WI APO 6.67902% NRI APO FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-003988-00A 130 acres out of the W. H. Texas Natural Resources Conservation Fisher (s) Castleberry Survey, Gregg County, Commission Agreed Order (Docket 97-0448-SIP) 413500800 Texas, and more particularly dated July 9, 1997. (d) 100% WI described by metes and bounds in 87.5% NRI that certain Oil and Gas Lease AR-105265-000 dated October 28, 1919 recorded Purchase and Sale Agreement dated October 6, White Oak Field in Volume 39, Page 600, Deed 1995 by and between East Texas Gathering (Cotton Valley) (d) Records, Gregg County, Texas. Company, Atlantic Richfield Company, Sun T. B. Harris Gas Unit #2 Pipe Line Company and Sun Company, Inc. (s) 437459200 42-183-003988-00B 130 acres out of the W. H. .000597% RI Castleberry Survey, Gregg County, AR-105265-001 3.180539% ORRI BPO Texas, and more particularly Crude Oil Buy/Sell Contract dated effective 7.63317% WI APO described by metes and bounds in December 1, 1995 by and between ARCO Permian 6.67902% NRI APO that certain Oil & Gas Lease and Sun Company, Inc. (s) dated March 9, 1931 recorded in T. B. Harris Gas Unit #3 (d) Volume 76, Page 114, Deed AR-95702 437459201 Records, Gregg County, Texas. Farmout Agreement dated February 13, 1990 by .000597% RI and between Atlantic Richfield Company, and C 3.180539% ORRI BPO W Resources, Inc. (d) 7.63317% WI APO 6.67902% NRI APO AR-98412 Longview Gas Plant Gas Purchase Contract T. B. Harris Gas Unit #5 (d) dated January 1, 1997, by and between ARCO 437459202 Permian, seller and ARCO Permian, buyer, as .000597% RI amended effective August 1, 1998 (s) 3.180539% ORRI BPO 7.63317% WI APO AR-18030-001 6.67902% NRI APO Declaration of Unit dated December 27, 1957, C W Resources, Inc., Operator. (d) T. B. Harris Gas Unit #4 (d) .000597% RI Private Radio License from Federal 3.180539% ORRI BPO Communications Commission to ARCO 7.63317% WI APO Communications, Inc., dated December 16, 6.67902% NRI APO 1992, File No. 0000000319451, Call Sign KNEP883, Frequency 154.47875 MHZ
Page 15 of 165 42
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-004008-000 H. L. Foster and G. S. Howard and M. 10-11-30 61 65 Foster "A" (s) wife, Florence Foster T. Flanagan 413555500 100% WI 87.5000% NRI White Oak (Cotton Valley Sand) Allen Tooke Gas Unit #1 (d) 411005600 4.540623% ORRI FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-004008-000 A tract of land out of the W. G. AR-95702 Foster "A" (s) Painter Survey, Gregg County, Farmout Agreement dated February 13, 1990 by 413555500 Texas, and more particularly and between Atlantic Richfield Company, and C 100% WI described in that certain Oil and W Resources, Inc. (d) 87.5000% NRI Gas Lease dated October 11, 1930, recorded Volume 61, Page. AR-34291 White Oak 65, Deed Records, Gregg County, Crude Oil Marketing Internal Contract dated (Cotton Valley Sand) Texas. December 1, 1995 by and between East Texas Allen Tooke Gas Unit #1 Gathering Company, Atlantic Richfield Company (d) and Sun Company, Inc. (s) 411005600 4.540623% ORRI AR-105265-000 Purchase and Sale Agreement dated October 6, 1995 by and between East Texas Gathering Company, Atlantic Richfield Company, Sun Pipe Line Company and Sun Company, Inc. (s) AR-105265-001 Crude Oil Buy/Sell Contract dated effective December 1, 1995 by and between ARCO Permian and Sun Company, Inc. (s) AR-57040 Salt Water Disposal Contract dated March 1, 1978, by and between Atlantic Richfield Company and East Texas Salt Water Disposal Company. (s) AR-95702-007 Declaration of Unitization and Designation of Gas Unit dated April 4, 1995, C W Resources, Inc., Operator. (d) AR-81381 Longview Gas Plant Oil Well Gas Purchase Contract dated July 24, 1996, by and between ARCO Permian, seller and ARCO Permian, buyer, as amended effective August 13, 1998. (s) Private Radio License from Federal Communications Commission to ARCO Communications, Inc., dated December 16, 1992, File No. 0000000319451, Call Sign KNEP883, Frequency 154.47875 MHZ
Page 16 of 165 43
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-004820-000 Henry L. Foster et ux J. M. Noble and E. 4-11-31 81 161 Foster "B" (s) Florence Foster E. Westervelt 413560100 100% WI 87.5% NRI White Oak Field (Cotton Valley Sand) Allen Tooke Gas Unit #1 (d) 411005600 4.540623% ORRI FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-004820-000 A tract of land out of the W. G. AR-95702 Foster "B" (s) Painter Headright Survey, Gregg Farmout Agreement dated February 13, 1990 by 413560100 County, Texas, containing 7.8 and between Atlantic Richfield Company, and C 100% WI acres, and more particularly W Resources, Inc. (d) 87.5% NRI described in that certain Oil & Gas Lease dated April 11, 1931, AR-105265-000 White Oak Field recorded in Volume 81, Page 161, Purchase and Sale Agreement dated October 6, (Cotton Valley Sand) Deed Records, Gregg County, Texas. 1995 by and between East Texas Gathering Allen Tooke Gas Unit #1 (d) Company, Atlantic Richfield Company, Sun Pipe 411005600 Line Company and Sun Company, Inc. (s) 4.540623% ORRI AR-105265-001 Crude Oil Buy/Sell Contract dated effective December 1, 1995 by and between ARCO Permian and Sun Company, Inc. (s) AR-34291 Crude Oil Marketing Internal Contract dated December 1, 1995, between East Texas Gathering Company, Atlantic Richfield Company and Sun Company, Inc. (s) Texas Natural Resources Conservation Commission Agreed Order (Docket No. 97-0448-SIP) dated July 9, 1997. (s/d) AR-95702-007 Declaration of Unitization and Designation of Gas Unit dated April 4, 1995, C W Resources, Inc., Operator. (d) AR-81381 Longview Gas Plant Oil Well Gas Purchase Contract dated July 24, 1996, by and between ARCO Permian, seller and ARCO Permian, buyer, as amended effective August 13, 1998. (s) Private Radio License from Federal Communications Commission to ARCO Communications, Inc., dated December 16, 1992, File No. 0000000319451, Call Sign KNEP883, Frequency 154.47875 MHZ
Page 17 of 165 44
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-043538-000 Mrs. Trip Elder, a Joe Blalack 5-18-55 458 457 Frank and J S Elder Oil widow, et al Unit 416024000 0.02707% ORRI 0.03093% RI Mrs. Camie Elder, a Joe Blalack 5-18-55 458 462 widow, et al - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-043547-000 G. B. Tennery and B.A. Skipper 5-22-30 4 336 G. B. Tennery (s) wife Anna Tennery 419501900 83.10% WI 72.7125% NRI FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-043538-000 A tract of land out of the Wm. J. AR-101580 Frank and J S Elder Oil McCurry Survey and a tract of Like-Kind Exchange Agreement dated June 1, Unit land out of the G. H. Tutt 1992 by and between Atlantic Richfield 416024000 Survey, all in Gregg County, Company and Conoco, Inc. (s/d) 0.02707% ORRI Texas, and more particularly 0.03093% RI described in that certain Oil and Gas Lease dated May 18, 1955, recorded in Volume 458, Page 457, Deed Records, Gregg County, Texas. A tract of land out of the Wm. J. McCurry Survey and a tract of land out of the G. H. Tutt Survey, all in Gregg County, Texas, and more particularly described in that certain Oil and Gas Lease dated May 18, 1955, recorded in Volume 458, Page 462, Deed Records Gregg County, Texas. - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-043547-000 A tract of land being a part of AR-101547 G. B. Tennery (s) the William Robinson Survey Purchase and Sale Agreement dated November 419501900 A-177, Gregg County, Texas, and 15, 1982 by and between Conoco, Inc. and 83.10% WI more particularly described in Petro-Lewis Corporation. (s/d) 72.7125% NRI that certain Oil & Gas Lease dated May 22, 1930, recorded AR-101548 Volume 4, Page 336, Deed Records, Joint Operating Agreement dated January 1, Gregg County, Texas. 1983 by and between Conoco, Inc. and Petro-Lewis Corporation. (s/d) AR-101580 Like-Kind Exchange Agreement dated June 1, 1992 by and between Atlantic Richfield Company and Conoco, Inc. (s/d) AR-104933 Declaration of Pooling and Designation of Unit P. D. Harrison "E-1" Gas Unit, Gregg County, Texas, dated May 2, 1984 between Cities Service Oil and Gas Corporation and Amoco Production Company. (d) Subject to unnumbered Contract dated April 16, 1959 between Continental Oil Company (Seller) and the Arkansas Fuel Oil Corporation (Buyer). Private Radio License from Federal Communications Commission to ARCO Communications, Inc., dated December 16, 1992, File No. 0000000319451, Call Sign KNEP883, Frequency 154.47875 MHZ
Page 18 of 165 45
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-000814-000 G. W. Richey et ux Argo Royalty Company 7-1-38 233 130 G. W. Richey (Mineral Deed) Ida Richey (4007262, 263 & 264) (s) 410863900 .7813% RI Richey, G. W. (468402) (R) (s) 410862100 .7813% RI East Texas Field G. W. Richey SND 412689100 .78125% RI GladeWater Field (Haynesville) G. W. Richey 1-H (d) 412525800 .1738227% RI Glenwood Field (Cotton Valley) G. W. Richey Gas Unit #2 (d) 410689000 .1738227% RI Glenwood Field (Cotton Valley) J. W. Orr Gas Unit 414143100 .26869% RI - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-043541-000 H. P. Hale, et ux D. H. Byrd 11-19-30 61 645 H. P. Hale 416025800 .7031% ORRI FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-000814-000 Two tracts of land out of the Oil and Gas Lease dated December 31, 1930, G. W. Richey (Mineral Deed) Lewis Rigsby H. R. Survey and one recorded in Volume 67, Page 1167, Deed (4007262, 263 & 264) (s) tract of land out of the Wm. Records, Gregg County, Texas. 410863900 Carleton H. R. Survey, Gregg .7813% RI County, Texas, and more particularly described in that Richey, G. W. (468402) certain instrument dated July 1, (R) (s) 1938, recorded in Volume 233, 410862100 Page 130, Deed Records, Gregg .7813% RI County, Texas. East Texas Field G. W. Richey SND 412689100 .78125% RI GladeWater Field (Haynesville) G. W. Richey 1-H (d) 412525800 .1738227% RI Glenwood Field (Cotton Valley) G. W. Richey Gas Unit #2 (d) 410689000 .1738227% RI Glenwood Field (Cotton Valley) J. W. Orr Gas Unit 414143100 .26869% RI - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-043541-000 A tract of land out of the John AR-101580 H. P. Hale Wilkinson Survey A-224, Gregg Like-Kind Exchange Agreement dated June 1, 416025800 County, Texas, containing 95.50 1992 by and between Atlantic Richfield .7031% ORRI acres more or less, and more Company and Conoco, Inc. (s/d) particularly described in that certain Oil, Gas and Mineral AR-101550 Lease dated November 19, 1930, Operating Agreement dated September 1, 1964, recorded Volume 61, Page 645, Conoco, Inc., Operator Deed Records, Gregg County, Texas.
Page 19 of 165 46
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-043539-000-001 Buck Harris Gaines B. Turner, 10-28-19 39 607 Harris (Conoco) 62.5% (s) Trustee 419499300 51.9375% WI 45.4453% NRI East Texas Field Harris (Conoco) 37.5% (s) 419499301 51.9375% WI 45.4453% NRI FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-043539-000-001 A tract of land out of the Wm. AR-105265-001 Harris (Conoco) 62.5% (s) Castleberry Survey, A-38, Gregg Crude Oil Buy/Sell Contract dated effective 419499300 County, Texas, containing 80.0 December 1, 1995 by and between ARCO Permian 51.9375% WI acres more or less, and more and Sun Company, Inc. (s) 45.4453% NRI particularly described in that certain Oil and Gas Lease dated AR-105265-000 East Texas Field October 28, 1919, recorded in Purchase and Sale Agreement dated October 6, Harris (Conoco) 37.5% (s) Volume 39, Page 607, Deed 1995 by and between East Texas Gathering 419499301 Records, Gregg County, Texas. Company, Atlantic Richfield Company, Sun Pipe 51.9375% WI Line Company and Sun Company, Inc. (s) 45.4453% NRI AR-101580 Like-Kind Exchange Agreement dated June 1, 1992 between Conoco Inc. and Atlantic Richfield Company. (s/d) AR-101555 Operating Agreement dated January 1, 1959, wherein Pan American Petroleum Corporation is Operator. AR-101554 Operating Agreement dated May 4, 1931, wherein Conoco Inc. is Operator. AR-101550 Operating Agreement dated September 1, 1964 wherein Conoco Inc. is Operator. (s) Subject to unnumbered Contract dated April 16, 1959 between Continental Oil Company (Seller) and the Arkansas Fuel Oil Corporation (Buyer). Declaration of Unit dated February 20, 1959, Gregg County, Texas (Bob Wood Gas Unit) (d) Private Radio License from Federal Communications Commission to ARCO Communications, Inc., dated December 16, 1992, File No. 0000000319451, Call Sign KNEP883, Frequency 154.47875 MHZ
Page 20 of 165 47
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-003982-000 Martin Hays, et ux B. F. Seay 9-11-30 4 412 Hays A & B (s) 414060500 78.3510% WI 68.5571% NRI 42-183-09003-000 Robert Cargill, Sr., Atlantic Refining 11-11-64 663 469 et al Company and Sun Oil Company FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-003982-000 All of the W. C. Alvice H. R. Texas Natural Resource Conservation Hays A & B (s) Survey, No. 11, Gregg County, Commission Agreed Order dated July 9, 1997 414060500 Texas, containing 548 acres of (Docket No. 97-0448SIP) (s/d) 78.3510% WI land more or less, and being more 68.5571% NRI particularly described in Oil & AR-052768 Gas Lease dated September 11, Saltwater Disposal Agreement between East 1930, and recorded in Volume 4, Texas Salt Water Disposal Company and Page 412, Deed Records Gregg Atlantic Richfield Company dated October 1, County, Texas 1975. (s/d) 42-183-09003-000 451.58 acres, more or less, being PD-2004 all of the land described therein Joint Operating Agreement dated September 28, Save and Except the W/2 of S/200 1931, by and between Sun Oil Company and acres of Alvice Survey from the Atlantic Oil Producing Company (s) surface to 3,655 feet, as more particularly described in that PD-2417 certain Surface Lease dated Operating Agreement dated May 1, 1940, November 11, 1964, recorded in between Stanolind Oil & Gas Co. and Atlantic Volume 663, Page 469, Deed Refining Co. and Sun Oil Co. (s) Records, Gregg County, Texas. AR-000675 Boundary Agreement between The Atlantic Refining Company, Stanolind Oil & Gas Company, and Sun Oil Company, dated June 24, 1937. (s) AR-98412 Longview Gas Plant Gas Purchase Contract dated January 1, 1997, by and between ARCO Permian, Seller and ARCO Permian, Buyer, as amended effective August 1, 1998 Private Radio License from Federal Communications Commission to ARCO Communications, Inc., dated December 16, 1992, File No. 0000000319451, Call Sign KNEP883, Frequency 154.47875 MHZ
Page 21 of 165 48
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-004949-000 Mrs. Pet Hopkins et B. A. Skipper 5-20-30 4 328 Hopkins (s) vir John T. Hopkins 414245400 50% WI 43.7513% NRI White Oak Field (Cotton Valley) Pet Hopkins Gas Unit (d) 437459203 .000016% RI 1.652946% ORRI BPO 3.967071% WI APO 3.471188% NRI APO FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-004949-000 173 acres out of the W. H. AR-105265-000 Hopkins (s) Castleberry HR Survey, and more Purchase and Sale Agreement dated October 6, 414245400 particularly described by metes 1995 by and between East Texas Gathering 50% WI and bounds in that certain Oil Company, Atlantic Richfield Company, Sun Pipe 43.7513% NRI and Gas Lease dated May 20,1930, Line Company and Sun Company, Inc. (s) recorded in Volume 4, Page 328, White Oak Field Deed Records, Gregg County, Texas. AR-105265-001 (Cotton Valley) Crude Oil Buy/Sell Contract dated effective Pet Hopkins Gas Unit (d) December 1, 1995 by and between ARCO Permian 437459203 and Sun Company, Inc. (s) .000016% RI 1.652946% ORRI BPO AR-95702-005 3.967071% WI APO Declaration of Unitization and Designation of 3.471188% NRI APO Gas Unit dated July 16, 1993, C W Resources, Inc., Operator. (d) AR-95702 Farmout Agreement dated February 13, 1990 by and between Atlantic Richfield Company, and C W Resources, Inc. (d) AR-7967 Casinghead Gas Contract dated June 6, 1950, by and between the Atlantic Refining Company, et al and Arkansas Fuel Oil Company, as amended on November 11, 1963 and March 16, 1979. (s) Private Radio License from Federal Communications Commission to ARCO Communications, Inc., dated December 16, 1992, File No. 0000000319451, Call Sign KNEP883, Frequency 154.47875 MHZ
Page 22 of 165 49
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-003975-00B M. B. Hughes, et ux Bert Kouns 10-15-30 62 51 Hughey "A" Well #5 (s) Annie Hughes 414275600 100% WI 87.5049% NRI 42-183-003975-00A Hughey "A" (Except #5) (s) 414270500 77.50% WI 67.8174% NRI Hughey B&C (s) 42-183-004417-000 414280200 100% WI 87.5014% NRI - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-043543-000 J. R. Watson, et ux D. H. Byrd 12-29-30 70 32 J. R. Watson (s) Sue Juanita Watson 416023100 1.5625% ORRI FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-003975-00B Two tracts of land, being one 204 AR-101580 Hughey "A" Well #5 (s) acre tract out of the L. B. Like-Kind Exchange Agreement dated June 1, 414275600 Outlaw Headright Survey and one 1992 by and between Atlantic Richfield 100% WI 80 acre tract out of the William Company and Conoco, Inc. (s/d) 87.5049% NRI McCurry Headright Survey for a 42-183-003975-00A total of 284 acres, and more AR-98412 Hughey "A" (Except #5) (s) fully described by metes and Longview Gas Plant Gas Purchase Contract 414270500 bounds in that certain Oil, Gas & dated January 1, 1997, by and between ARCO 77.50% WI Mineral Lease dated October 15, Permian, seller and ARCO Permian, buyer, as 67.8174% NRI 1930, recorded in Volume 62, Page amended effective August 1, 1998 (s) 51, Deed Records, Gregg County, Hughey B&C (s) 42-183-004417-000 Texas. AR-52769 414280200 Service Contract for Disposal of Salt Water 100% WI dated October 1, 1975, by and between 87.5014% NRI Atlantic Richfield Company and East Texas Salt Water Disposal Company. (s) PD-1957 Joint Operating Agreement dated June 3, 1931 by and between Byrd-Frost, Inc. and Atlantic Richfield Oil Producing Company. (s) Private Radio License from Federal Communications Commission to ARCO Communications, Inc., dated December 16, 1992, File No. 0000000319451, Call Sign KNEP883, Frequency 154.47875 MHZ - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-043543-000 15 acres out of the John S. AR-101580 J. R. Watson (s) Caruthers Survey, A-40, Gregg Like-Kind Exchange Agreement dated June 1, 416023100 County, Texas, described in Oil 1992 by and between Atlantic Richfield 1.5625% ORRI and Gas Lease dated December 29, Company and Conoco, Inc. (s/d) 1930, recorded in Volume 70, Page 32, Deed Records, Gregg County, AR-101547 Texas. Purchase and Sale Agreement dated November 15, 1982 by and between Conoco, Inc. and Petro-Lewis Corporation. (s/d) Joint Operating Agreement dated January 1, 1983 by and between Conoco, Inc. and Petro-Lewis Corporation. (s/d) AR-101555 Operating Agreement dated January 1, 1959 by and between Pan-American Petroleum Corporation and Arkansas Fuel Oil Corporation. (s/d)
Page 23 of 165 50
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- Gladewater Field 42-183-000815-000 J. D. Pollard Argo Royalty Company 5-19-31 88 261 (Haynesville) (Mineral Deed) J. T. Jeter Estate Gas Unit Well #1 (d) 413101100 .395682% RI - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-000035-001 J. W. Akin, et ux H. J. Wilder 10-10-30 4 562 J. W. Akin "A" (s) Nellie Akin 412050700 100% WI 87.5% NRI J. W. Akin "A" (RI) 412053100 .00004% RI - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-000012-001 J. W. Akin et ux, O. M. Boren and L. 10-5-30 61 432 J. W. Akin "B" (s) Nellie Akin A. Grelling, Jr. 412051500 100% WI 87.5001% NRI White Oak Field (Cotton Valley) (d) J. W. Akin Gas Unit #1 414142300 5.2948% ORRI FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- Gladewater Field 42-183-000815-000 A tract of land out of the H. R. Oil and Gas Lease dated January 1, 1988, (Haynesville) (Mineral Deed) Hockit Survey, A-95, Gregg recorded by Memorandum of Oil and Gas Lease J. T. Jeter Estate Gas Unit County, Texas, containing 37 in Volume 1941, Page 140, Official Public Well #1 (d) acres more or less, and more Records, Gregg County, Texas. 413101100 particularly described in that .395682% RI certain Mineral Deed dated May 19, 1931, recorded in Volume 88, Page 261, Deed Records, Gregg County, Texas. - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-000035-001 A tract of land out of the Wm. H. Texas Natural Resources Conservation J. W. Akin "A" (s) Castleberry Survey, Gregg County, Commission Agreed Order (Docket 97-0448-SIP) 412050700 Texas, containing 96.0 acres more dated July 9, 1997. (s/d) 100% WI or less, and more particularly 87.5% NRI described by metes and bounds in AR-23556 that certain Oil and Gas Lease Oil Well Gas Contract dated July 3, 1962, by J. W. Akin "A" (RI) dated October 10, 1930, recorded and between The Atlantic Refining Company, 412053100 in Volume 4, Page 562, Deed Seller and Sinclair Oil & Gas Company, Buyer .00004% RI Records, Gregg County, Texas (s), amended February 20, 1991 Private Radio License from Federal Communications Commission to ARCO Communications, Inc., dated December 16, 1992, File No. 0000000319451, Call Sign KNEP883, Frequency 154.47875 MHZ - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-000012-001 A tract of land out of the W. H. Texas Natural Resources Conservation J. W. Akin "B" (s) Castleberry Survey, Gregg County, Commission Agreed Order (Docket No. 412051500 Texas, containing the South 200 97-0448-SIP) dated July 9, 1997. (s/d) 100% WI acres more or less, and more 87.5001% NRI particularly described by metes AR-95702 and bounds in Oil and Gas Lease Farmout Agreement dated February 13, 1990 by White Oak Field dated October 5, 1930, recorded and between Atlantic Richfield Company, and C (Cotton Valley) (d) in Volume 61, Page 432, Deed W Resources, Inc. (d) J. W. Akin Gas Unit #1 Records, Gregg County, Texas 414142300 AR-95702-009 5.2948% ORRI Declaration of Unitization and Designation of Gas Unit dated effective July 10, 1996 by and between Atlantic Richfield Company and C W Resources, Inc. (d) AR-23556 Oil Well Gas Contract dated July 3, 1962, by and between The Atlantic Refining Company, Seller and Sinclair Oil & Gas Company, Buyer (s), amended February 20, 1991 Private Radio License from Federal Communications Commission to ARCO Communications, Inc., dated December 16, 1992, File No. 0000000319451, Call Sign KNEP883, Frequency 154.47875 MHZ
Page 24 of 165 51
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-000818-000 John T. O'Neil Argo Royalty Company 3-19-32 123 20 Jettie Barnes (616,650318) (Mineral Deed) (s) 410427700 1.56250% RI White Oak Field (Cotton Valley Sand) J. M. Christian Gas Unit #1 (d) 400060900 1.56250% RI - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-000048-001 John R. Williams, et W. H. Winn 9-19-30 61 326 John R. Williams (s) ux 416830500 100% WI .025% RI 87.500% NRI White Oak Field (Cotton Valley) J. R. Williams Gas Unit #1(d) 415698600 4.17407% ORRI FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-000818-000 A tract of land out of the G. W. Oil and Gas Lease dated January 2, 1931, Jettie Barnes (616,650318) (Mineral Deed) Hooper Survey, Gregg County, recorded in Volume 95, Page 290, Deed (s) Texas, containing 30.0 acres more Records, Gregg County, Texas. 410427700 or less, and more particularly 1.56250% RI described in that certain Oil and Gas Lease dated March 19, 1932, White Oak Field recorded in Volume 123, Page 20, (Cotton Valley Sand) Deed Records, Gregg County, Texas. J. M. Christian Gas Unit #1 (d) 400060900 1.56250% RI - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-000048-001 A tract of land out of the John AR-105473-001 John R. Williams (s) Ruddle and W. L. Wilborne Designation of Unit for the J. R. Williams 416830500 Surveys, Gregg County, Texas, Gas Unit No. 1, dated effective May 5, 1997 100% WI containing 81.2 acres more or by C W Resources, et al. (d) .025% RI less, and more particularly 87.500% NRI described in that certain Oil, AR-105473 Gas and Mineral Lease dated Farmout Agreement dated effective February 1, September 19, 1930, recorded in 1996 by and between Atlantic Richfield White Oak Field Volume 61, Page 326, Deed Company, Wagner & Brown, Ltd., and C W (Cotton Valley) Records, Gregg County, Texas. Resources, Inc. (d) J. R. Williams Gas Unit #1(d) AR-105265-001 415698600 Crude Oil Buy/Sell Contract dated effective 4.17407% ORRI December 1, 1995 by and between ARCO Permian and Sun Company, Inc. (s) AR-105265-000 Purchase and Sale Agreement dated October 6, 1995 by and between East Texas Gathering Company, Atlantic Richfield Company, Sun Pipe Line Company and Sun Company, Inc. (s) AR-23556 Oil Well Gas Contract dated July 3, 1962, by and between The Atlantic Refining Company, Seller and Sinclair Oil & Gas Company, Buyer (s), amended February 20, 1991 Private Radio License from Federal Communications Commission to ARCO Communications, Inc., dated December 16, 1992, File No. 0000000319451, Call Sign KNEP883, Frequency 154.47875 MHZ
Page 25 of 165 52
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-000031-001 Mary Lawson, et al W. H. Winn 9-22-30 62 398 Mary Lawson (s) 414700600 100% WI 87.5% NRI 42-183-000031-002 Mamie Henderson, et J. C. Davis 3-14-31 78 104 vir 42-183-000031-003 Mary Lawson, as Sinclair Oil & Gas 6-22-31 96 85 Guardian of Juanita Company Lawson, et al FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-000031-001 A tract of land out of the AR-105265-000 Mary Lawson (s) Pleasant McAnelly Survey, Gregg Purchase and Sale Agreement dated October 6, 414700600 County, Texas, containing 86.75 1995 by and between East Texas Gathering 100% WI acres more or less, and more Company, Atlantic Richfield Company, Sun Pipe 87.5% NRI particularly described in that Line Company and Sun Company, Inc. (s) certain Oil and Gas Lease dated September 22, 1930, recorded in AR-105265-001 Volume 62, Page 398, Deed Crude Oil Buy/Sell Contract dated effective Records, Gregg County, Texas. December 1, 1995 by and between ARCO Permian and Sun Company, Inc. (s) 42-183-000031-002 A tract of land out of the Pleasant McAnelly Survey, Gregg AR-23556 County, Texas, containing 86.75 Oil Well Gas Contract dated July 3, 1962, by acres more or less, and more and between The Atlantic Refining Company, particularly described in that Seller and Sinclair Oil & Gas Company, Buyer certain Oil and Gas Lease dated (s), amended February 20, 1991 March 14, 1931, recorded in Volume 78, Page 104, Deed Private Radio License from Federal Records, Gregg County, Texas. Communications Commission to ARCO Communications, Inc., dated December 16, 42-183-000031-003 A tract of land out of the 1992, File No. 0000000319451, Call Sign Pleasant McAnelly Survey, Gregg KNEP883, Frequency 154.47875 MHZ County, Texas, containing 86.75 acres more or less, and more particularly described in that certain Oil and Gas Lease dated June 22, 1931, recorded in Volume 96, Page 85 of Deed Records of Gregg County, Texas.
Page 26 of 165 53
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-000044-001 Mattie Moncrief, et al M. C. Sells 10-13-30 61 223 Mattie Moncrief (s) 415270100 100% WI 87.5% NRI White Oak Field (Cotton Valley) Mattie Moncrief #1 (d) 411129000 42-183-000044-002 Mattie Moncrief, Sinclair Oil 4-23-31 83 259 12.5% ORRI Guardian Corporation White Oak Field (Cotton Valley) J. C. Persons #1A (d) 437451701 1.085823% ORRI BPO 2.605976% WI APO 2.280229% NRI APO FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-000044-001 A tract of land out of the AR-95702 Mattie Moncrief (s) William H. Castleberry Survey, Farmout Agreement dated February 13, 1990 by 415270100 Gregg County, Texas, containing and between Atlantic Richfield Company, and C 100% WI 307.5 acres more or less, and W Resources, Inc. (d) 87.5% NRI more particularly described in that certain Oil and Gas Lease AR-105265-000 White Oak Field dated October 13, 1930, recorded Purchase and Sale Agreement dated October 6, (Cotton Valley) in Volume 61, Page 223, Deed 1995 by and between East Texas Gathering Mattie Moncrief #1 (d) Records, Gregg County, Texas. Company, Atlantic Richfield Company, Sun Pipe 411129000 Line Company and Sun Company, Inc. (s) 12.5% ORRI 42-183-000044-002 A tract of land out of the William H. Castleberry Survey, AR-105265-001 White Oak Field Gregg County, Texas, containing Crude Oil Buy/Sell Contract dated effective (Cotton Valley) 307.5 acres more or less, and December 1, 1995 by and between ARCO Permian J. C. Persons #1A (d) more particularly described in and Sun Company, Inc. (s) 437451701 that certain Oil and Gas Lease 1.085823% ORRI BPO dated April 23, 1931, recorded in AR-64597 2.605976% WI APO Volume 83, Page 259, Deed Salt Water Disposal Agreement dated June 28, 2.280229% NRI APO Records, Gregg County, Texas. 1982, by and between ARCO Oil and Gas Company and East Texas Salt Water Disposal Company. (s) AR-95702-002 Declaration of Unitization and Designation of Gas Unit forming the J. C. Persons Gas Unit, dated June 19, 1992. (d) AR-23556 Oil Well Gas Contract dated July 3, 1962, by and between The Atlantic Refining Company, Seller and Sinclair Oil & Gas Company, Buyer (s) Private Radio License from Federal Communications Commission to ARCO Communications, Inc., dated December 16, 1992, File No. 0000000319451, Call Sign KNEP883, Frequency 154.47875 MHZ
Page 27 of 165 54
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-004044-000 Percy McGeorge Cranfill and Germany 1-5-31 68 174 McGeorge (s) 415095300 100% WI 87.5% NRI - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-000278-000 J. S. Smith Higgins Oil & Fuel 2-18-31 90 73 Nat Bean "A" & "B" (Mineral Deed) Company 417060100 .7813% RI FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-004044-000 A tract of land out of the AR-64597 McGeorge (s) Pleasant McAnelly Survey, Gregg Salt Water Disposal Agreement dated June 28, 415095300 County, Texas, containing 40.0 1982, by and between ARCO Oil and Gas Company 100% WI acres more or less, and more and East Texas Salt Water Disposal Company. 87.5% NRI particularly described in that (s) certain Oil and Gas Lease dated January 5, 1931, recorded in AR-98412 Volume 68, Page 174, Deed Longview Gas Plant Gas Purchase Contract Records, Gregg County, Texas. dated January 1, 1997, by and between ARCO Permian, seller and ARCO Permian, buyer, as amended effective August 1, 1998 (s) AR-105265-000 Purchase and Sale Agreement dated October 6, 1995 by and between East Texas Gathering Company, Atlantic Richfield Company, Sun Pipe Line Company and Sun Company, Inc. (s) AR-105265-001 Crude Oil Buy/Sell Contract dated effective December 1, 1995 by and between ARCO Permian and Sun Company, Inc. (s) Private Radio License from Federal Communications Commission to ARCO Communications, Inc., dated December 16, 1992, File No. 0000000319451, Call Sign KNEP883, Frequency 154.47875 MHZ - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-000278-000 A tract of land out of Tipton R. Nat Bean "A" & "B" (Mineral Deed) Bean & Mary Ann Bean tracts on 417060100 the Mary Van Winkle, W. P. .7813% RI Chisum, Isaac Ruddle and Jacob Lewis Surveys, Gregg and Rusk Counties, Texas, and more particularly described in that certain Mineral Deed dated February 18, 1931, recorded in Volume 90, Page 73, Deed Records, Gregg County, Texas
Page 28 of 165 55
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- White Oak Field 42-183-004018-000 P. C. Castleberry, et B. A. Skipper 9-12-30 4 362 (Cotton Valley) ux P. C. Castleberry Gas Unit (d) 414681600 1.61169% ORRI FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- White Oak Field 42-183-004018-000 A tract of land out of the G. W. AR-95702-008 (Cotton Valley) Hooper Survey, Gregg County, Declaration of Unitization and Designation of P. C. Castleberry Gas Unit Texas, containing 37.8 acres more the Gas Unit, dated effective February 5, (d) or less, and more particularly 1996, by and between Atlantic Richfield 414681600 described by metes and bounds in Company and C W Resources, Inc. (d) 1.61169% ORRI that certain Oil, Gas and Mineral Lease dated September 12, 1930, AR-95702 recorded in Volume 4, Page 362, Farmout Agreement dated February 13, 1990 by Deed Records, Gregg County, Texas. and between Atlantic Richfield Company and C W Resources, Inc. (d) Only insofar as rights are limited to below the Woodbind AR-101621 formation. Purchase and Sale Agreement effective January 1, 1993 by and between Atlantic Richfield Company and Madera Production Company.
Page 29 of 165 56
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-005882-000 R. A. Penn, et ux A. T. Smith 12-14-37 225 353 Penn (s) 415610200 50.00% WI 43.75% NRI White Oak Field (Cotton Valley) T. B. Harris Gas Unit #2 (d) 437459200 .000597% RI 3.180539% ORRI BPO 7.63317% WI APO 6.67902% NRI APO T. B. Harris Gas Unit #3 (d) 437459201 .000597% RI 3.180539% ORRI BPO 7.63317% WI APO 6.67902% NRI APO T. B. Harris Gas Unit #5 (d) 437459202 .000597% RI 3.180539% ORRI BPO 7.63317% WI APO 6.67902% NRI APO T. B. Harris Gas Unit #4 (d) .000597% RI 3.180539% ORRI BPO 7.63317% WI APO 6.67902% NRI APO FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-005882-000 A tract of land out of the AR-000753 Penn (s) William Robinson Survey, Gregg Joint Operating Agreement dated March 21, 415610200 County, Texas, more particularly 1938 by and between the Atlantic Refining 50.00% WI described in that certain Oil and Company and J. K. Wadley, et al. 43.75% NRI Gas Lease dated December 14, 1937, recorded in Volume 225, AR-95702 Page 353, Deed Records, Gregg Farmout Agreement dated February 13, 1990 by White Oak Field County, Texas. and between Atlantic Richfield Company, and C (Cotton Valley) W Resources, Inc. (d) T. B. Harris Gas Unit #2 (d) AR-018030-001 437459200 Declaration Unit dated December 27, 1957, C W .000597% RI Resources, Inc., Operator. (d) 3.180539% ORRI BPO 7.63317% WI APO AR-18030-000 6.67902% NRI APO Joint Operating Agreement dated May 14, 1957 by and between Atlantic Refining Company, T. B. Harris Gas Unit #3 (d) Operator, and Humble Oil and Refining 437459201 Company, et al, Non-Operator. (d) .000597% RI 3.180539% ORRI BPO AR-7566 7.63317% WI APO Casinghead Gas Contract dated June 9, 1950, 6.67902% NRI APO by and between The Atlantic Refining Company (ARCO Oil & Gas), Susie L. Wadley and J. K. T. B. Harris Gas Unit #5 (d) Wadley, Seller, and Arkansas Fuel Oil Company 437459202 (Trident NGL, Inc.), Buyer. .000597% RI 3.180539% ORRI BPO Private Radio License from Federal 7.63317% WI APO Communications Commission to ARCO 6.67902% NRI APO Communications, Inc., dated December 16, 1992, File No. 0000000319451, Call Sign T. B. Harris Gas Unit #4 (d) KNEP883, Frequency 154.47875 MHZ .000597% RI 3.180539% ORRI BPO 7.63317% WI APO 6.67902% NRI APO
Page 30 of 165 57
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-004948-000 Bun E. Rodden, et al W. A. Moncrief 9-16-30 60 207 Rodden (s) 415890300 50% WI 43.7504% NRI Willow Springs Field Cotton Valley Lathrop Gas Unit 417898000 2.26152% WI 1.97883% NRI FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-004948-000 A tract of land out of the AR-94444 Rodden (s) William Robinson Survey, A-177, Purchase and Sale Agreement dated effective 415890300 Gregg County, Texas, and more October 1, 1991 by and between The Sinclair 50% WI particularly described in that Revocable Trust, The Fernald Point Production 43.7504% NRI certain Oil and Gas Lease dated Trust and Atlantic Richfield Company. (s) September 16, 1930, recorded in Willow Springs Field Volume 60, Page 207, Deed Texas Natural Resources Conservation Cotton Valley Records, Gregg County, Texas. Commission Agreed Order dated September 9, Lathrop Gas Unit 1997. (Docket 97-0448-SIP) (s/d) 417898000 2.26152% WI AR-7967 1.97883% NRI Casinghead Gas Contract dated June 6, 1950, by and between the Atlantic Refining Company, et al and Arkansas Fuel Oil Company, as amended on November 11, 1963 and March 16, 1979. (s) PD-3520 Operating Contract dated January 24, 1931 between Frank R. Foster, Roeser & Pendleton, Inc. and Freeman Burford. (s/d) AR-13913 Operating Agreement dated September 20, 1955, between Stanolind Oil & Gas Company and Arkansas Fuel Oil Corporation, et al. (d) Declaration of Unitization dated September 20, 1955 between Stanolind Oil and Gas Company and Atlantic Refining Company, et al, covering the F. K. Lathrop Gas Unit, consisting of 699.53 acres. (d) Private Radio License from Federal Communications Commission to ARCO Communications, Inc., dated December 16, 1992, File No. 0000000319451, Call Sign KNEP883, Frequency 154.47875 MHZ
Page 31 of 165 58
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-000040-001 S. G. Andrews et ux J. R. Stebbins 10-15-30 62 62 S. G. Andrews (s) Myrtle Andrews 412110400 100% WI 87.5% NRI - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-004951-000 S. G. Smith, et ux B. A. Skipper 5-6-30 4 330 S. G. Smith (s) 416245500 50.00% WI 43.75% NRI White Oak Field (Cotton Valley) T. B. Harris Gas Unit #2 (d) 437459200 .000597% RI 3.180539% ORRI BPO 7.63317% WI APO 6.67902% NRI APO T. B. Harris Gas Unit #3 (d) 437459201 .000597% RI 3.180539% ORRI BPO 7.63317% WI APO 6.67902% NRI APO T. B. Harris Gas Unit #5 (d) 437459202 .000597% RI 3.180539% ORRI BPO 7.63317% WI APO 6.67902% NRI APO T. B. Harris Gas Unit #4 (d) .000597% RI 3.180539% ORRI BPO 7.63317% WI APO 6.67902% NRI APO FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-000040-001 A tract of land out of the J. G. AR-64596 S. G. Andrews (s) Walker Survey, A-215, Gregg Saltwater Disposal Contract dated June 22, 412110400 County, Texas, containing 200.0 1982, between ARCO Oil and Gas Company and 100% WI acres more or less, and more East Texas Salt Water Disposal Company. (s) 87.5% NRI particularly described in that certain Oil and Gas Lease dated AR-23556 October 15, 1930, recorded in Oil Well Gas Contract dated July 3, 1962, by Volume 62, Page 62, Deed Records, and between The Atlantic Richfield Company Gregg County, Texas (ARCO Permian), Seller, and Sinclair Oil & Gas Company, Buyer Private Radio License from Federal Communications Commission to ARCO Communications, Inc., dated December 16, 1992, File No. 0000000319451, Call Sign KNEP883, Frequency 154.47875 MHZ - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-004951-000 That certain 48 l/2 acre tract AR-18030-000 S. G. Smith (s) out of the W. H. Castleberry Joint Operating Agreement dated May 14, 1957 416245500 Survey, Gregg County, Texas, and by and between Atlantic Refining Company, 50.00% WI more fully described in that Operator, and Humble Oil and Refining 43.75% NRI certain Oil, Gas & Mineral Lease Company, et al, Non-Operator. (d) dated May 6, 1930, recorded in White Oak Field Volume 4, Page 330, Deed Records, AR-95702 (Cotton Valley) Gregg County, Texas. Farmout Agreement dated February 13, 1990 by T. B. Harris Gas Unit #2 (d) and between Atlantic Richfield Company, and C 437459200 W Resources, Inc. (d) .000597% RI 3.180539% ORRI BPO AR-18030-001 7.63317% WI APO Declaration of Unit dated December 27, 1957, 6.67902% NRI APO C W Resources, Inc., Operator. (d) T. B. Harris Gas Unit #3 (d) PD-3520 437459201 Operating Contract dated January 24, 1931, .000597% RI recorded in Volume 68, Page 196, by and 3.180539% ORRI BPO between Frank R. Foster and Roeser & 7.63317% WI APO Pendleton, Inc. 6.67902% NRI APO Private Radio License from Federal T. B. Harris Gas Unit #5 (d) Communications Commission to ARCO 437459202 Communications, Inc., dated December 16, .000597% RI 1992, File No. 0000000319451, Call Sign 3.180539% ORRI BPO KNEP883, Frequency 154.47875 MHZ 7.63317% WI APO 6.67902% NRI APO AR-7967 Casinghead Gas Contract dated June 6, 1950, T. B. Harris Gas Unit #4 (d) by and between the Atlantic Refining Company, .000597% RI et al and Arkansas Fuel Oil Company, as 3.180539% ORRI BPO amended on November 11, 1963 and March 16, 7.63317% WI APO 1979. (s) 6.67902% NRI APO
Page 32 of 165 59
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- White Oak Field 42-183-043549-00A Alfred Jones and W. F. Turner 12-25-30 64 47 (Cotton Valley) wife, Fannie Jones Shiloh School Gas Unit #1 (d) 411006400 0.072778% RI 1.17666% ORRI BPO 2.94166% WI APO 2.57395% NRI APO 42-183-043549-00B A. H. Teat, Trustee M. L. Giles 3-11-31 73 316 42-183-043549-00C A. H. Teat, husband Ralph Cole 4-24-31 79 497 of Lillian E. Teat FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- White Oak Field 42-183-043549-00A A tract of land out of the G. W. AR-101547 (Cotton Valley) Hooper Survey A-92, Gregg County, Purchase and Sale Agreement dated November Shiloh School Gas Unit #1 Texas, and more particularly 15, 1982 by and between Conoco, Inc. and (d) described in that certain Oil and Petro-Lewis Corporation. (s/d) 411006400 Gas Lease dated December 25, 0.072778% RI 1930, recorded in Volume 64, Page AR-101580 1.17666% ORRI BPO 47, Deed Records, Gregg County, Like-Kind Exchange Agreement dated June 1, 2.94166% WI APO Texas. 1992 by and between Atlantic Richfield 2.57395% NRI APO Company and Conoco, Inc. (s/d) AR-101621 42-183-043549-00B A tract of land out of the G. W. Purchase and Sale Agreement dated effective Hooper Survey A-92, Gregg County, January 1, 1993, from Atlantic Richfield Texas, and more particularly Company to Madera Production Company. (s) described in that certain Oil and Gas Lease dated March 11, 1931, AR-105435-000 recorded in Volume 73, Page 316, Farm Out Agreement dated January 4, 1996 by Deed Records, Gregg County, Texas. and between Atlantic Richfield Company and Madera Production Company. (d) 42-183-043549-00C A tract of land out of the G. W. Hooper Survey A-92, Gregg County, AR-105435-001 Texas, and more particularly Declaration of Unitization effective November described in that certain Oil and 1, 1995, C W Resources, Inc., Operator. (d) Gas Lease dated April 24, 1931, recorded in Volume 79, Page 497, AR-101548 Deed Records, Gregg County, Texas. Joint Operating Agreement dated January 1, 1983 by and between Conoco, Inc. and Only insofar as leases cover Petro-Lewis Corporation. (s/d) rights below the Base of the Woodbine formation. AR-95702 Farmout Agreement dated February 13, 1990 by and between Atlantic Richfield Company, and C W Resources, Inc. (d)
Page 33 of 165 60
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- White Oak Field 42-183-005961-00A Callie Jones, et al Dr. E. E. Terry, et 11-30-30 63 101 (Cotton Valley) al Stucky-Thrasher Gas Unit (d) 412345000 1.443620 ORRI BPO 3.464689% WI APO 3.031602% NRI APO 42-183-005961-00B Ollie Jones C. A. Green 1-24-31 68 179 42-183-005961-00C Jane Jones Howard, et C. A. Green 1-24-31 68 182 al 42-183-005961-00D Callie Jones, et al M. H. Shivers, et al 3-6-31 79 141 42-183-005961-00E Arthur Christian, Arthur Mackey, et al 2-3-31 72 64 Guardian FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- White Oak Field 42-183-005961-00A A tract of land out of the G. W. AR-95702-003 (Cotton Valley) Hooper Survey A-92, Gregg County, Declaration of Unitization and Designation of Stucky-Thrasher Gas Unit (d) Texas, containing 100 acres more Gas Unit of the Stucky Thrasher Gas Unit. 412345000 or less, and more particularly (d) 1.443620 ORRI BPO described by metes and bounds in 3.464689% WI APO that certain Oil, Gas and Mineral AR-95702 3.031602% NRI APO Lease dated November 30, 1930, Farmout Agreement dated February 13, 1990 by recorded in Volume 63, Page 101, and between Atlantic Richfield Company and C Deed Records, Gregg County, Texas. W Resources, Inc. (d)AR-95702 42-183-005961-00B A tract of land out of the G. W. AR-101621 Hooper Survey A-92, Gregg County, Purchase and Sale Agreement effective January Texas, containing 100 acres more 1, 1993 by and between Atlantic Richfield or less, and more particularly Company and Madera Production Company. described by metes and bounds in that certain Oil, Gas and Mineral Lease dated January 24, 1931, recorded in Volume 68, Page 179, Deed Records, Gregg County, Texas. 42-183-005961-00C A tract of land out of the G. W. Hooper Survey A-92, Gregg County, Texas, containing 100 acres more or less, and more particularly described by metes and bounds in that certain Oil, Gas and Mineral Lease dated January 24, 1931, recorded in Volume 68, Page 182, Deed Records, Gregg County, Texas. 42-183-005961-00D A tract of land out of the G. W. Hooper Survey A-92, Gregg County, Texas, containing 100 acres more or less, and more particularly described by metes and bounds in that certain Oil, Gas and Mineral Lease dated March 6, 1931, recorded in Volume 79, Page 141, Deed Records, Gregg County, Texas. 42-183-005961-00E A tract of land out of the G. W. Hooper Survey A-92, Gregg County, Texas, containing 100 acres more or less, and more particularly described by metes and bounds in that certain Oil, Gas and Mineral Lease dated February 3, 1931, recorded in Volume 72, Page 64, Deed Records, Gregg County, Texas. Only insofar as leases cover rights below the Base of the Woodbine formation
Page 34 of 165 61
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- White Oak Field 42-183-005961-00F Alex Jones, et ux A. H. Teat 1-27-31 66 350 (Cotton Valley) Stucky-Thrasher Gas Unit (d) 412345000 (continued) 42-183-005961-00G Robert Smith R. W. Curtis 2-19-31 97 521 42-183-005961-00H G. C. Lunsford E. X. Birdsong 7-14-31 94 473 FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- White Oak Field 42-183-005961-00F A tract of land out of the G. W. (Cotton Valley) Hooper Survey A-92, Gregg County, Stucky-Thrasher Gas Unit (d) Texas, containing 100 acres more 412345000 or less, and more particularly (continued) described by metes and bounds in that certain Oil, Gas and Mineral Lease dated January 27, 1931, recorded in Volume 66, Page 350, Deed Records, Gregg County, Texas. 42-183-005961-00G A tract of land out of the G. W. Hooper Survey A-92, Gregg County, Texas, containing 110.1 acres more or less, and more particularly described by metes and bounds in that certain Oil, Gas and Mineral Lease dated February 19, 1931, recorded in Volume 97, Page 521, Deed Records, Gregg County, Texas. 42-183-005961-00H A tract of land out of the G. W. Hooper Survey A-92, Gregg County, Texas, containing 40.34 acres more or less, and more particularly described by metes and bounds in that certain Oil, Gas and Mineral Lease dated July 14, 1931, recorded in Volume 94, Page 473, Deed Records, Gregg County, Texas. Only insofar as leases cover rights below the Base of the Woodbine formation.
Page 35 of 165 62
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-004045-00A Buck Harris Gaines B. Turner, 10-8-19 39 607 T. B. Harris (s) Trustee 414101900 100% WI 87.5045% NRI White Oak Field (Cotton Valley Sand) T. B. Harris Gas Unit #5 437459202 41-183-004045-00B Clara L. Hayes, et al W. L. Pickens 1-15-31 65 213 .000597% RI 3.180539% ORRI BPO 7.63317% WI APO 6.67902% NRI APO White Oak Field (Cotton Valley Sand) T. B. Harris Gas Unit #3 437459201 42-183-004045-00C T. B. Harris, et al Otto L. Morris 2-12-31 70 429 .000597% RI 3.180539% ORRI BPO 7.63317% WI APO 6.67902% NRI APO White Oak Field (Cotton Valley) T. B. Harris Gas Unit #2 (d) 437459200 42-183-090121-000-001 Clara Jean Hodges, et Atlantic Richfield 7-24-40 252 243 .000597% RI (Surface Lease) vir Company 3.180539% ORRI BPO 7.63317% WI APO 6.67902% NRI APO T. B. Harris Gas Unit #4 (d) .000597% RI 3.180539% ORRI BPO 7.63317% WI APO 6.67902% NRI APO FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-004045-00A A tract of land out of the Wm. AR-95702 T. B. Harris (s) Castleberry Survey, A-38, Gregg Farmout Agreement dated February 13, 1990 by 414101900 County, Texas, containing 91.94 and between Atlantic Richfield Company, and C 100% WI acres more or less, and more W Resources, Inc. (d) 87.5045% NRI particularly described by metes and bounds in that certain Oil Texas Natural Resources Conservation and Gas Lease dated October 18, Commission Agreed Order (Docket No. White Oak Field 1919, recorded in Volume 39, 97-0448-SIP) dated July 9, 1997. (s/d) (Cotton Valley Sand) Page 607, Deed Records, Gregg T. B. Harris Gas Unit #5 County, Texas. AR-105265-000 437459202 Purchase and Sale Agreement dated October 6, .000597% RI 41-183-004045-00B A tract of land out of the Wm. 1995 by and between East Texas Gathering 3.180539% ORRI BPO Castleberry Survey, A-38, Gregg Company, Atlantic Richfield Company, Sun Pipe 7.63317% WI APO County, Texas, containing 91.94 Line Company and Sun Company, Inc. (s) 6.67902% NRI APO acres more or less, and more particularly described by metes AR-105265-001 and bounds in that certain Oil Crude Oil Buy/Sell Contract dated effective and Gas Lease dated January 15, December 1, 1995 by and between ARCO Permian 1931, recorded in Volume 65, and Sun Company, Inc. (s) White Oak Field Page 213, Deed Records, Gregg (Cotton Valley Sand) County, Texas. AR-18030-001 T. B. Harris Gas Unit #3 Declaration of Unit dated December 27, 1957, 437459201 42-183-004045-00C A tract of land out of the Wm. Atlantic Refining Company. (d) .000597% RI Castleberry Survey, A-38, Gregg 3.180539% ORRI BPO County, Texas, containing 91.94 AR-98412 7.63317% WI APO acres more or less, and more Longview Gas Plant Gas Purchase Contract 6.67902% NRI APO particularly described by metes dated January 1, 1997, by and between ARCO and bounds in that certain Oil Permian, Seller and ARCO Permian, Buyer, as and Gas Lease dated February 12, amended effective August 1, 1998 1931, recorded in Volume 70, White Oak Field Page 429, Deed Records, Gregg Private Radio License from Federal (Cotton Valley) County, Texas. Communications Commission to ARCO T. B. Harris Gas Unit #2 (d) Communications, Inc., dated December 16, 437459200 42-183-090121-000-001 24.405 acres of land in the 1992, File No. 0000000319451, Call Sign .000597% RI (Surface Lease) William Castleberry Survey, Gregg KNEP883, Frequency 154.47875 MHZ 3.180539% ORRI BPO County, Texas, as more 7.63317% WI APO particularly described in that 6.67902% NRI APO certain Surface Lease dated July 24, 1940, recorded in Volume 252, page 243, Deed Records, Gregg County, Texas. T. B. Harris Gas Unit #4 (d) .000597% RI 3.180539% ORRI BPO 7.63317% WI APO 6.67902% NRI APO
Page 36 of 165 63
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- White Oak Field 42-183-009834-00A E. M. Whatley, et ux B. A. Skipper 5-6-30 4 387 (Cotton Valley) T. B. Harris Gas Unit #2 (d) 437459200 .000597% RI 3.180539% ORRI BPO 7.63317% WI APO 6.67902% NRI APO T. B. Harris Gas Unit #3 (d) 42-183-009834-00B Gordon Whatley Lonnie Glasscock 1-19-31 66 156 437459201 .000597% RI 3.180539% ORRI BPO 7.63317% WI APO 6.67902% NRI APO T. B. Harris Gas Unit #5 (d) 437459202 .000597% RI 3.180539% ORRI BPO 7.63317% WI APO 6.67902% NRI APO T. B. Harris Gas Unit #4 (d) .000597% RI 3.180539% ORRI BPO 7.63317% WI APO 6.67902% NRI APO FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- --------------------------------------------- White Oak Field 42-183-009834-00A That certain tract of land out of AR-18030-000 (Cotton Valley) the William Robinson Survey, Joint Operating Agreement dated May 14, 1957 T. B. Harris Gas Unit #2 (d) Abstract 177, and W. H. by and between Atlantic Refining Company, 437459200 Castleberry Survey, Gregg County, Operator, and Humble Oil and Refining .000597% RI Texas, and more fully described Company, et al, Non-Operator. (d) 3.180539% ORRI BPO by metes and bounds in that 7.63317% WI APO certain Oil and Gas Lease dated AR-101621 6.67902% NRI APO May 6, 1930, recorded in Volume Purchase and Sale Agreement dated effective 4, Page 387, Deed Records, Gregg January 1, 1993, from Atlantic Richfield T. B. Harris Gas Unit #3 (d) 42-183-009834-00B County, Texas. Company to Madera Production Company. (s) 437459201 .000597% RI That certain tract of land out AR-95702 3.180539% ORRI BPO of the William Robinson Survey, Farmout Agreement dated February 13, 1990 by 7.63317% WI APO Abstract 177, and W. H. and between Atlantic Richfield Company, and C 6.67902% NRI APO Castleberry Survey, Gregg County, W Resources, Inc. (d) Texas, and more fully described T. B. Harris Gas Unit #5 (d) by metes and bounds in that AR-18030-001 437459202 certain Oil and Gas Lease dated Declaration Unit dated December 27, 1957, .000597% RI January 19, 1931, recorded in Atlantic Refining Company, Operator. (d) 3.180539% ORRI BPO Volume 66, Page 156, Deed 7.63317% WI APO Records, Gregg County, Texas. 6.67902% NRI APO T. B. Harris Gas Unit #4 (d) .000597% RI 3.180539% ORRI BPO 7.63317% WI APO 6.67902% NRI APO
Page 37 of 165 64
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- White Oak Field 42-183-009834-00C Leonard Weldon Whatley Lonnie Glasscock 1-15-31 66 89 (Cotton Valley) T. B. Harris Gas Unit #2 (d) 437459200 T. B. Harris Gas Unit #3 (d) 437459201 T. B. Harris Gas Unit #5 (d) 437459202 42-183-009834-00D Novie Wood, et ux, E. B. Germany 1-15-31 63 434 et al T. B. Harris Gas Unit #4 (d) (continued) 42-183-009834-00E Preston Lee, et ux W. P. Luse 3-14-31 75 98 FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- --------------------------------------------- White Oak Field 42-183-009834-00C That certain tract of land out of (Cotton Valley) the William Robinson Survey, T. B. Harris Gas Unit #2 (d) Abstract 177, and W. H. 437459200 Castleberry Survey, Gregg County, Texas, and more fully described T. B. Harris Gas Unit #3 (d) by metes and bounds in that 437459201 certain Oil and Gas Lease dated January 15, 1931, recorded in Volume 66, Page 89, Deed Records, T. B. Harris Gas Unit #5 (d) Gregg County, Texas. 437459202 42-183-009834-00D That certain tract of land out of the William Robinson Survey, Abstract 177, and W. H. T. B. Harris Gas Unit #4 (d) Castleberry Survey, Gregg County, (continued) Texas, and more fully described by metes and bounds in that certain Oil and Gas Lease dated January 15, 1931, recorded in Volume 63, Page 434, Deed Records, Gregg County, Texas. 42-183-009834-00E That certain tract of land out of the William Robinson Survey, Abstract 177, and W. H. Castleberry Survey, Gregg County, Texas, and more fully described by metes and bounds in that certain Oil and Gas Lease dated March 14, 1931, recorded in Volume 75, Page 98, Deed Records, Gregg County, Texas.
Page 38 of 165 65
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-003990-000 T. W. Lee J. K. Wadley 3-23-31 78 246 T. W. Lee (s) 414745600 92.50% WI 80.9375% NRI Glenwood Field (Cotton Valley) T. W. Lee Gas Unit 415131300 9.10804% ORRI FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-003990-000 A tract of land out of the David AR-105473 T. W. Lee (s) Ferguson Survey, Gregg County, Farmout Agreement dated effective February 1, 414745600 Texas, containing 111.67 acres 1996 by and between Atlantic Richfield 92.50% WI more or less, and more Company, Wagner & Brown, Ltd., and C W 80.9375% NRI particularly described in that Resources, Inc. (d) certain Oil and Gas Lease dated Glenwood Field March 23, 1931, recorded in AR-105265-000 (Cotton Valley) Volume 78, Page 246, Deed Purchase and Sale Agreement dated October 6, T. W. Lee Gas Unit Records, Gregg County, Texas. 1995 by and between East Texas Gathering 415131300 Company, Atlantic Richfield Company, Sun Pipe 9.10804% ORRI Line Company and Sun Company, Inc. (s) AR-105265-001 Crude Oil Buy/Sell Contract dated effective December 1, 1995 by and between ARCO Permian and Sun Company, Inc. (s) AR-81381 Longview Gas Plant Oil Well Gas Purchase Contract dated July 24, 1996, by and between ARCO Permian, seller and ARCO Permian, buyer, as amended effective August 13, 1998. (s) Private Radio License from Federal Communications Commission to ARCO Communications, Inc., dated December 16, 1992, File No. 0000000319451, Call Sign KNEP883, Frequency 154.47875 MHZ
Page 39 of 165 66
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-004024-000 Allen Tooke, et al Ardis O. Phillips 10-7-30 4 501 Tooke "B" (s) 416530600 100% WI 87.50% NRI White Oak Field (Cotton Valley) Allen Tooke Gas Unit #1 (d) 411005600 4.540623% ORRI Tooke "B" (s) 413014600 0.001395% RI FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-004024-000 A tract of land out of the W. G. AR-105265-000 Tooke "B" (s) Painter Survey, Gregg County, Purchase and Sale Agreement dated October 6, 416530600 Texas, containing 44.0 acres more 1995 by and between East Texas Gathering 100% WI or less, and more particularly Company, Atlantic Richfield Company, Sun Pipe 87.50% NRI described in that certain Oil and Line Company and Sun Company, Inc. (s) Gas Lease dated October 7, 1930, White Oak Field recorded in Volume 4, Page 501, AR-105265-001 (Cotton Valley) Deed Records, Gregg County, Texas. Crude Oil Buy/Sell Contract dated effective Allen Tooke Gas Unit #1 (d) December 1, 1995 by and between ARCO Permian 411005600 and Sun Company, Inc. (s) 4.540623% ORRI AR-95702 Tooke "B" (s) Farmout Agreement dated February 13, 1990 by 413014600 and between Atlantic Richfield Company, and C 0.001395% RI W Resources, Inc. (d) AR-95702-007 Declaration of Unitization and Designation of Gas Unit dated April 4, 1995, C W Resources, Inc., Operator. (d) AR-81381 Longview Gas Plant Oil Well Gas Purchase Contract dated July 24, 1996, by and between ARCO Permian, seller and ARCO Permian, buyer, as amended effective August 13, 1998. (s) Private Radio License from Federal Communications Commission to ARCO Communications, Inc., dated December 16, 1992, File No. 0000000319451, Call Sign KNEP883, Frequency 154.47875 MHZ
Page 40 of 165 67
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-003971-00A Tommy Lee Turner, et P. A. Curtis and H. 9-27-30 63 161 Turner (s) ux H. Ivins 416570500 79.21870% WI 69.31960% NRI White Oak Field (Cotton Valley) Allen Tooke Gas Unit #1 (d) 42-183-003971-00B Lizann Williams, R. W. Burnett 1-30-31 68 287 411005600 et vir 4.540623% ORRI 42-183-003971-00C Charlie Turner, et ux Ray Bumpus 1-31-31 68 291 42-183-003971-00D Houston Stephens, W. E. Hicks 2-3-31 70 215 et ux, et al 42-183-003971-00E Houston Stephens, T. M. Garland 3-13-31 77 258 et ux, et al FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-003971-00A A tract of land out of the W. C. PD-2062 Turner (s) Wakeland H. R. Survey, Gregg Operating Agreement dated December 21, 1931 416570500 County, Texas, containing 157.0 by and between Atlantic Oil Producing 79.21870% WI acres more or less, and more Company, Operator, and J. K. Wadley, 69.31960% NRI particularly described in that Non-Operator. (s/d) certain Oil and Gas Lease dated September 27, 1930, recorded in AR-52724 Volume 63, Page 161, Deed Salt Water Disposal Agreement dated September White Oak Field Records, Gregg County, Texas. 29, 1975, between Atlantic Richfield Company (Cotton Valley) and East Texas Salt Water Disposal Company. Allen Tooke Gas Unit #1 (d) 42-183-003971-00B A tract of land out of the W. C. (s) 411005600 Wakeland H. R. Survey, Gregg 4.540623% ORRI County, Texas, containing 87.0 AR-105265-000 acres more or less, and more Purchase and Sale Agreement dated October 6, particularly described by metes 1995 by and between East Texas Gathering and bounds in that certain Oil Company, Atlantic Richfield Company, Sun Pipe and Gas Lease dated January 30, Line Company and Sun Company, Inc. (s) 1931, recorded in Volume 68, Page 287, Deed Records, Gregg County, AR-105265-001 Texas. Crude Oil Buy/Sell Contract dated effective December 1, 1995 by and between ARCO Permian 42-183-003971-00C A tract of land out of the W. C. and Sun Company, Inc. (s) Wakeland H. R. Survey, Gregg County, Texas, containing 157.0 AR-95702 acres more or less, and more Farmout Agreement dated February 13, 1990 by particularly described by metes and between Atlantic Richfield Company, and C and bounds in that certain Oil W Resources, Inc. (d) and Gas Lease dated January 31, 1931, recorded in Volume 68, Page AR-95702-007 291, Deed Records, Gregg County, Declaration of Unitization and Designation of Texas. Gas Unit dated April 4, 1995, C W Resources, Inc. , Operator. (d) 42-183-003971-00D A tract of land out of the W. C. Wakeland Survey, Gregg County, AR-81381 Texas, containing 29.0 acres more Longview Gas Plant Oil Well Gas Purchase or less, and more particularly Contract dated July 24, 1996, by and between described by metes and bounds in ARCO Permian, seller and ARCO Permian, buyer, that certain Oil and Gas Lease as amended effective August 13, 1998. (s) dated February 3, 1931, recorded in Volume 70, Page 215, Deed Private Radio License from Federal Records, Gregg County, Texas. Communications Commission to ARCO Communications, Inc., dated December 16, 42-183-003971-00E A tract of land out of the W. C. 1992, File No. 0000000319451, Call Sign Wakeland H. R. Survey, Gregg KNEP883, Frequency 154.47875 MHZ County, Texas, containing 14.0 acres more or less, and more particularly described by metes and bounds in that certain Oil and Gas Lease dated March 13, 1931, recorded in Volume 77, Page 258, Deed Records, Gregg County, Texas.
Page 41 of 165 68
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-003971-00F Harvey Turner, et ux R. W. Burnett 3-28-31 72 561 Turner (s) 416570500 White Oak Field (Cotton Valley) Allen Tooke Gas Unit #1 (d) 411005600 (continued) 42-183-003971-00G Bethie Green, et vir, C. M. Beckett 4-1-31 75 458 et al 42-183-003971-00H Tommie Lee Turner, C. M. Beckett 4-1-31 84 29 et ux, et al 42-183-003971-00I Elnora Turner, et al William L. Goodwin 4-2-31 77 506 42-183-003971-00J A. Turner, et al E. H. Brannon 4-7-31 78 519 FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-003971-00F A tract of land out of the W. C. Turner (s) Wakeland Survey, Gregg County, 416570500 Texas, containing 157.0 acres more or less, and more White Oak Field particularly described by metes (Cotton Valley) and bounds in that certain Oil Allen Tooke Gas Unit #1 (d) and Gas Lease dated March 28, 411005600 1931, recorded in Volume 72, Page (continued) 561, Deed Records, Gregg County, Texas. 42-183-003971-00G A tract of land out of the W. C. Wakeland Survey, Gregg County, Texas, containing 157.0 acres more or less, and more particularly described in that certain Oil and Gas Lease dated April 1, 1931, recorded in Volume 75, Page 458, Deed Records, Gregg County, Texas. 42-183-003971-00H A tract of land out of the W. C. Wakeland Survey, Gregg County, Texas, containing 87.0 acres more or less, and more particularly described in that certain Oil and Gas Lease dated April 1, 1931, recorded in Volume 84, Page 29, Deed Records, Gregg County, Texas. 42-183-003971-00I A tract of land out of the W. C. Wakeland Survey, Gregg County, Texas, containing 157.0 acres more or less, and more particularly described by metes and bounds in that certain Oil and Gas Lease dated April 2, 1931, recorded in Volume 77, Page 506, Deed Records, Gregg County, Texas. 42-183-003971-00J A tract of land out of the W. C. Wakeland H. R. Survey, Gregg County, Texas, containing 80.0 acres more or less, and more particularly described in that certain Oil and Gas Lease dated April 7, 1931, recorded in Volume 78, Page 519, Deed Records, Gregg County, Texas.
Page 42 of 165 69
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-003971-00K Houston Stephens, et J. K. Wadley 4-18-31 80 511 Turner (s) ux, et al 416570500 White Oak Field (Cotton Valley) Allen Tooke Gas Unit #1 (d) 411005600 (continued) 42-183-003971-00L J. N. Whittle J. K. Wadley 4-29-31 74 629 42-183-003971-00M Elnora Turner, J. K. Wadley 4-30-31 74 635 Guardian 42-183-003971-00N J. T. Dickerson, as E. H. Brannon 5-11-31 90 9 Attorney-in-Fact 42-183-003971-00O Houston Stephens, J. K. Wadley and C 5-25-31 91 180 et ux, et al M. Beckett FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-003971-00K A tract of land out of the W. C. Turner (s) Wakeland H. R. Survey, Gregg 416570500 County, Texas, containing 87.0 acres more or less, and more White Oak Field particularly described by metes (Cotton Valley) and bounds in that certain Oil Allen Tooke Gas Unit #1 (d) and Gas Lease dated April 18, 411005600 1931, recorded in Volume 80, Page (continued) 511, Deed Records, Gregg County, Texas. 42-183-003971-00L A tract of land out of the W. C. Wakeland Survey, Gregg County, Texas, containing 29.0 acres more or less, and more particularly described by metes and bounds in that certain Oil and Gas Lease dated April 29, 1931, recorded in Volume 74, Page 629, Deed Records, Gregg County, Texas. 42-183-003971-00M A tract of land out of the W. C. Wakeland Survey, Gregg County, Texas, containing 157.0 acres more or less, and more particularly described by metes and bounds in that certain Oil and Gas Lease dated April 30, 1931, recorded in Volume 74, Page 635, Deed Records, Gregg County, Texas. 42-183-003971-00N A tract of land out of the W. C. Wakeland H. R. Survey, Gregg County, Texas, containing 157.0 acres more or less, and more particularly described by metes and bounds in that certain Oil and Gas Lease dated May 11, 1931, recorded in Volume 90, Page 9, Deed Records, Gregg County, Texas. 42-183-003971-00O A tract of land out of the W. C. Wakeland Survey, Gregg County, Texas, containing 87.0 acres more or less, and more particularly described by metes and bounds in that certain Oil and Gas Lease dated May 25, 1931, recorded in Volume 91, Page 180, Deed Records, Gregg County, Texas.
Page 43 of 165 70
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-003971-00P W. V. Derrick, Leland Fikes 6-15-31 94 132 Turner (s) Guardian 416570500 White Oak Field (Cotton Valley) Allen Tooke Gas Unit #1 (d) 411005600 (continued) 42-183-003971-00Q J. K. Wadley Atlantic Oil 7-7-31 95 278 Producing Company 42-183-003971-00R Leland Fikes J. K. Wadley 7-27-31 100 114 FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-003971-00P A tract of land out of the W. C. Turner (s) Wakeland H. R. Survey, Gregg 416570500 County, Texas, containing 157.0 acres more or less, and more White Oak Field particularly described by metes (Cotton Valley) and bounds in that certain Oil Allen Tooke Gas Unit #1 (d) and Gas Lease dated June 15, 411005600 1931, recorded in Volume 94, Page (continued) 132, Deed Records, Gregg County, Texas. 42-183-003971-00Q A tract of land out of the W. C. Wakeland Survey, Gregg County, Texas, containing 157.0 acres more or less, and more particularly described by metes and bounds in that certain Oil and Gas Lease dated July 7, 1931, recorded in Volume 95, Page 278, Deed Records, Gregg County, Texas. 42-183-003971-00R A tract of land out of the W. C. Wakeland H. R. Survey, Gregg County, Texas, containing 157.0 acres more or less, and more particularly described by metes and bounds in that certain Oil and Gas Lease dated July 27, 1931, recorded in Volume 100, Page 114, Deed Records, Gregg County, Texas.
Page 44 of 165 71
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-005960-000 J. M. Tuttle et ux B. A. Skipper 5-15-30 60 197 Tuttle "B" (s) Georgia A. Tuttle 416580200 86.58% WI 75.7575% NRI White Oak Field (Cotton Valley) Pet Hopkins Gas Unit (d) 437459203 0.000016% RI 1.652946% ORRI BPO 10.897494% WI APO 9.535307% NRI APO FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-005960-000 A tract of land out of the Wm. H. AR-00058500 Tuttle "B" (s) Castleberry Survey A-38, Gregg Joint Operating Agreement dated November 1, 416580200 County, Texas, and more 1937 between The Atlantic Refining Company 86.58% WI particularly described in that and Petroleum Corporation of Venezuela. (s/d) 75.7575% NRI certain Oil and Gas Lease dated May 15, 1930, recorded in Volume AR-7689 White Oak Field 60, Page 197, Deed Records, Gregg Casinghead Gas Contract dated June 9, 1950, (Cotton Valley) County, Texas. by and between The Atlantic Refining Company Pet Hopkins Gas Unit (d) (ARCO Oil & Gas), et al, Seller, and Arkansas 437459203 Fuel Oil Company (Trident NGL, Inc.), Buyer. 0.000016% RI 1.652946% ORRI BPO AR-95702 10.897494% WI APO Farmout Agreement dated February 13, 1990 by 9.535307% NRI APO and between Atlantic Richfield Company, and C W Resources, Inc. (d) AR-95702-005 Declaration of Unitization and Designation of Gas Unit dated July 16, 1993 between Atlantic Richfield Company and C W Resources, Inc. (d) AR-105265-000 Purchase and Sale Agreement dated October 6, 1995 by and between East Texas Gathering Company, Atlantic Richfield Company, Sun Pipe Line Company and Sun Company, Inc. (s) AR-105265-001 Crude Oil Buy/Sell Contract dated effective December 1, 1995 by and between ARCO Permian and Sun Company, Inc. (s) Private Radio License from Federal Communications Commission to ARCO Communications, Inc., dated December 16, 1992, File No. 0000000319451, Call Sign KNEP883, Frequency 154.47875 MHZ
Page 45 of 165 72
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-005877-000 L. Y. Tuttle and T. Tom Richardson and 1-16-31 68 157 Tuttle "C" (s) J. Tuttle Grace Bennett 416585300 100% WI 87.50% NRI White Oak Field (Cotton Valley) Houston Stephens Gas Unit #1-X (d) 437450900 .2369801% ORRI BPO .56875% WI APO .49765625% NRI APO - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-000816-000 Lowell Brawley Argo Royalty Company 5-20-31 92 21 W. L. Brawley (776) (Mineral Deed) 410462500 6.2500% RI White Oak Field (Cotton Valley) M. C. Salter Gas Unit 417654500 2.7734375% RI FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-005877-000 A tract of land out of the W. H. AR-95702 Tuttle "C" (s) Castleberry Survey, Gregg County, Farmout Agreement dated February 13, 1990 by 416585300 Texas, containing 12.36 acres and between Atlantic Richfield Company, and C 100% WI more or less, and more W Resources, Inc. (d) 87.50% NRI particularly described in that certain Oil and Gas Lease dated AR-95702-001 White Oak Field January 16, 1931, recorded in Declaration of Unitization & Designation of (Cotton Valley) Volume 68, Page 157, Deed Gas Unit dated January 16, 1992. Houston Stephens Gas Unit Records, Gregg County, Texas. #1-X (d) Private Radio License from Federal 437450900 Communications Commission to ARCO .2369801% ORRI BPO Communications, Inc., dated December 16, .56875% WI APO 1992, File No. 0000000319451, Call Sign .49765625% NRI APO KNEP883, Frequency 154.47875 MHZ - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-000816-000 A tract of land out of the M. AR-104964-000 W. L. Brawley (776) (Mineral Deed) Mann Survey, A-302, Upshur Farmout (Oil & Gas Lease) dated May 20, 1993 410462500 County, Texas, and the Dolores by and between Atlantic Richfield Company, 6.2500% RI Sanches Survey, A-186, Gregg Lessor, and R. Byron Roach, Lessee, as County, Texas, and A-669, Upshur referred to in Memorandum of Oil and Gas White Oak Field County, Texas, containing 28.4 Lease dated May 20, 1993, recorded in Volume (Cotton Valley) acres more or less, and more 138, Page 242, Records of Upshur County, M. C. Salter Gas Unit particularly described in Mineral Texas and Volume 2521, Page 23, Records of 417654500 Deed dated May 20, 1931, recorded Gregg County, Texas. (d) 2.7734375% RI in Volume 92, Page 21, Deed Records, Gregg County, Texas. AR-104964-000-001 Pooling Declaration and Designation of Gas Unit effective March 1, 1994. (Chinn Exploration Company-M. C. Salter Gas Unit) (d)
Page 46 of 165 73
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-000819-000 W. Q. Seale Argo Royalty Co. 3-8-34 161 339 Wm. Cobb. (9232,875) (Mineral Deed) 410500100 3.0270% RI Wm. Cobb (A-356,950) 410503600 3.0273% RI - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-000811-000 T. C. Denton Argo Royalty Company 4-28-31 84 352 Wheeler "A" (10880, 19100) (Mineral Deed) (s) 410977500 3.125% RI East Texas Field Wheeler (419112, 403) (s) T. C. Denton Argo Royalty Company 4-29-31 85 241 410976700 3.125% RI East Texas Field Wheeler (s) 415346400 3.125% RI Glenwood Field (Cotton Valley) W. W. Wheeler (d) 410559100 3.125% RI FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-000819-000 All that certain tract or parcel Oil and Gas Lease dated August 6, 1931 Wm. Cobb. (9232,875) (Mineral Deed) of land in Gregg County, Texas, recorded in Volume 100, Page 390, Deed 410500100 being a part of the Carl Rhodes Records, Gregg County, Texas. 3.0270% RI Survey and a part of the William Cobb Homestead, as more Wm. Cobb (A-356,950) particularly described in that 410503600 certain Mineral Deed dated March 3.0273% RI 8, 1934, recorded in Volume 161, Page 339, Deed Records, Gregg County, Texas. - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-000811-000 46.84 acres, more or less, out of Oil and Gas Lease dated January 2, 1931, Wheeler "A" (10880, 19100) (Mineral Deed) the David Ferguson Survey, and recorded in Volume 67, Page 109, Deed (s) more particularly described in Records, Gregg County, Texas. 410977500 that certain Mineral Deed dated 3.125% RI April 28, 1931, recorded in Volume 84, Page 352, Deed East Texas Field Records, Gregg County, Texas. Wheeler (419112, 403) (s) 410976700 46.84 acres, more or less, out of 3.125% RI the David Ferguson Survey, and more particularly described in East Texas Field that certain Mineral Deed dated Wheeler (s) April 29, 1931, recorded in 415346400 Volume 85, Page 241, Deed 3.125% RI Records, Gregg County, Texas. Glenwood Field (Cotton Valley) W. W. Wheeler (d) 410559100 3.125% RI
Page 47 of 165 74
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-000186-000 W. L. Cunningham, Atlantic Oil 11-10-33 155 161 Wilson (s) (Mineral Deed) et al Producing Company 416855100 100% WI .3789% RI 87.5% NRI Glenwood Field (Cotton Valley) J. W. Wilson #1 (d) 42-183-000186-00A Ed Barnett Atlantic Oil 8-4-33 152 289 410006900 (Mineral Deed) Producing Company .3789% RI 12.5% ORRI 42-183-000186-00B O. M. Grisham Atlantic Oil 10-10-33 152 516 (Mineral Deed) Producing Company 42-183-003998-00A Mattie Lockett, Leland Fikes 3-30-31 75 449 et vir 42-183-003998-00B Clyde Williams, C. H. Ainsworth 4-24-31 85 177 et al FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-000186-000 A tract of land out of the AR-105265-000 Wilson (s) (Mineral Deed) William C. Wakeland Survey, Purchase and Sale Agreement dated October 6, 416855100 A-218, Gregg County, Texas, 1995 by and between East Texas Gathering 100% WI containing 100 acres more or Company, Atlantic Richfield Company, Sun Pipe .3789% RI less, and being more particularly Line Company and Sun Company, Inc. (s) 87.5% NRI described in that certain Mineral Deed dated November 10, 1933, AR-105265-001 Glenwood Field recorded in Volume 155, Page 161, Crude Oil Buy/Sell Contract dated effective (Cotton Valley) Deed Records, Gregg County, Texas. December 1, 1995 by and between ARCO Permian J. W. Wilson #1 (d) and Sun Company, Inc. (s) 410006900 42-183-000186-00A A tract of land out of the .3789% RI (Mineral Deed) William C. Wakeland Survey, AR-81381 12.5% ORRI A-218, Gregg County, Texas, Longview Gas Plant Oil Well Gas Purchase containing 100 acres more or Contract dated July 24, 1996, by and between less, and being more particularly ARCO Permian, seller and ARCO Permian, buyer, described in that certain Mineral as amended effective August 13, 1998. (s) Deed dated August 4, 1933, recorded in Volume 152, Page 289, AR-105473 Deed Records, Gregg County, Texas. Farmout Agreement dated effective February 1, 1996 by and between Atlantic Richfield 42-183-000186-00B A tract of land out of the Company, Wagner & Brown, Ltd., and C W (Mineral Deed) William C. Wakeland Survey, Resources, Inc. (d) A-218, Gregg County, Texas, containing 100 acres more or AR-95702 less, and being more particularly Farmout Agreement dated February 13, 1990 by described in that certain Mineral and between Atlantic Richfield Company, and C Deed dated October 10, 1933, W Resources, Inc. (d) recorded in Volume 152, Page 516, Deed Records, Gregg County, Texas. Private Radio License from Federal Communications Commission to ARCO 42-183-003998-00A A tract of land out of the Communications, Inc., dated December 16, William C. Wakeland Survey, Gregg 1992, File No. 0000000319451, Call Sign County, Texas, containing 100 KNEP883, Frequency 154.47875 MHZ acres more or less, and more particularly described in that certain Oil and Gas Lease dated March 30, 1931, recorded in Volume 75, Page 449, Deed Records, Gregg County, Texas. 42-183-003998-00B A tract of land out of the William C. Wakeland Survey, Gregg County, Texas, containing 100 acres more or less, and more particularly described in that certain Oil and Gas Lease dated April 24, 1931, recorded in Volume 85, Page 177, Deed Records, Gregg County, Texas.
Page 48 of 165 75
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-003998-00C C. H. Ainsworth, et al B. R. McLemore 5-12-31 File # 17351 Wilson (s) 416855100 Glenwood Field (Cotton Valley) J. W. Wilson #1 (d) 410006900 (continued) 42-183-003998-00D Robert Robertson, J. K. Lewis, et al 1-2-31 64 147 et ux 42-183-003998-00E Sidney Wheeler, et ux Paul D. Smith 2-19-31 70 415 42-183-003998-00F Sidney Wheeler, et al Paul D. Smith, et al 4-1-31 81 148 42-183-003998-00G George Boyd, et ux C. M. Beckett 4-3-31 79 222 FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-003998-00C A tract of land out of the Wilson (s) William C. Wakeland Survey, Gregg 416855100 County, Texas, containing 100 acres more or less, and more Glenwood Field particularly described in that (Cotton Valley) certain Oil and Gas Lease dated J. W. Wilson #1 (d) May 12, 1931, recorded in File 410006900 #17351, Deed Records, Gregg (continued) County, Texas. 42-183-003998-00D A part of the Wakeland H. R. Survey, Gregg County, Texas, containing 9 acres more or less, and more particularly described in that certain Oil and Gas Lease dated January 2, 1931, recorded in Volume 64, Page 147, Deed Records, Gregg County, Texas. 42-183-003998-00E A tract of land out of the William C. Wakeland Survey, Gregg County, Texas, containing 100 acres more or less, and more particularly described in that certain Oil and Gas Lease dated February 19, 1931, recorded in Volume 70, Page 415, Deed Records, Gregg County, Texas. 42-183-003998-00F A tract of land out of the William C. Wakeland Survey, Gregg County, Texas, containing 100 acres more or less, and more particularly described in that certain Oil and Gas Lease dated April 1, 1931, recorded in Volume 81, Page 148, Deed Records, Gregg County, Texas. 42-183-003998-00G A tract of land out of the William C. Wakeland Survey, Gregg County, Texas, containing 100 acres more or less, and more particularly described in that certain Oil and Gas Lease dated April 3, 1931, recorded in Volume 79, Page 222, Deed Records, Gregg County, Texas.
Page 49 of 165 76
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-003998-00H Frank Wilson, et al C. M. Beckett 4-8-31 83 88 Wilson (s) 416855100 Glenwood Field (Cotton Valley) J. W. Wilson #1 (d) 410006900 (continued) 42-183-003998-00I F. R. Wilson, et al C. M. Beckett 6-17-31 95 335 42-183-003998-00J Bethie Green, et al A. G. Griffin 1-29-31 78 429 42-183-003998-00K Harvey Turner, et ux J. Brown Cutbirth 1-29-31 78 499 42-183-003998-00L Margaret Ansley, J. Brown Cutbirth 1-29-31 78 497 et vir FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-003998-00H A tract of land out of the Wilson (s) William C. Wakeland Survey, Gregg 416855100 County, Texas, containing 100 acres more or less, and more Glenwood Field particularly described in that (Cotton Valley) certain Oil, Gas and Mining Lease J. W. Wilson #1 (d) dated April 8, 1931, recorded in 410006900 Volume 83, Page 88, Deed Records, (continued) Gregg County, Texas. 42-183-003998-00I A tract of land out of the William C. Wakeland Survey, Gregg County, Texas, containing 100 acres more or less, and more particularly described in that certain Oil and Gas Lease dated June 17, 1931, recorded in Volume 95, Page 335, Deed Records, Gregg County, Texas. 42-183-003998-00J A tract of land out of the William C. Wakeland Survey, Gregg County, Texas, containing 100 acres more or less, and more particularly described in that certain Oil and Gas Lease dated January 29, 1931, recorded in Volume 78, Page 429, Deed Records, Gregg County, Texas. 42-183-003998-00K A tract of land out of the William C. Wakeland Survey, Gregg County, Texas, containing 100 acres more or less, and more particularly described in that certain Oil, Gas and Mining Lease dated January 29, 1931, recorded in Volume 78, Page 499, Deed Records, Gregg County, Texas. 42-183-003998-00L A tract of land out of the William C. Wakeland Survey, Gregg County, Texas, containing 100 acres more or less, and more particularly described in that certain Oil, Gas and Mining Lease dated January 29, 1931, recorded in Volume 78, Page 497, Deed Records, Gregg County, Texas.
Page 50 of 165 77
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-003998-00M Norman Wilson, et ux J. Brown Cutbirth 5-14-31 90 208 Wilson (s) 416855100 Glenwood Field (Cotton Valley) J. W. Wilson #1 (d) 410006900 (continued) 42-183-003998-00N Norman Wilson, asm Mrs. Johnny Bradley 1-13-31 63 375 42-183-003998-00O Susie Williams, Grdn. B. R. McLemore, et al 5-20-31 File # 15897 42-183-003998-00P Mahalie Williams, B. R. McLemore 5-25-31 File # et al 17353 42-183-003998-00Q Ledonia Johnson, H. J. Horstman 5-6-31 84 502 et vir FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-003998-00M A tract of land out of the Wilson (s) William C. Wakeland Survey, Gregg 416855100 County, Texas, containing 100 acres more or less, and more Glenwood Field particularly described in that (Cotton Valley) certain Oil and Gas Lease dated J. W. Wilson #1 (d) May 14, 1931, recorded in Volume 410006900 90, Page 208, Deed Records, Gregg (continued) County, Texas. 42-183-003998-00N A tract of land out of the William C. Wakeland Survey, Gregg County, Texas, containing 100 acres more or less, and more particularly described in that certain Oil and Gas Lease dated January 13, 1931, recorded in Volume 63, Page 375, Deed Records, Gregg County, Texas. 42-183-003998-00O A tract of land out of the William C. Wakeland Survey, Gregg County, Texas, containing 100 acres more or less, and more particularly described in that certain Oil, Gas and Mining Lease dated May 20, 1931, recorded File #15897, Deed Records, Gregg County, Texas. 42-183-003998-00P A tract of land out of the William C. Wakeland Survey, Gregg County, Texas, containing 100 acres more or less, and more particularly described in that certain Oil, Gas and Mining Lease dated May 25, 1931, recorded File #17353, Deed Records, Gregg County, Texas. 42-183-003998-00Q A tract of land out of the William C. Wakeland Survey, Gregg County, Texas, containing 100 acres more or less, and more particularly described in that certain Oil and Gas Lease dated May 6, 1931, recorded in Volume 84, Page 502, Deed Records, Gregg County, Texas.
Page 51 of 165 78
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-003998-00R Julia W. White, et vir H. J. Horstman 5-8-31 81 482 Wilson (s) 416855100 Glenwood Field (Cotton Valley) J. W. Wilson #1 (d) 410006900 (continued) 42-183-003998-00S Callie W. Bowen, et al H. J. Horstman 4-29-31 85 255 42-183-003998-00T Lambert Chaffin, Gdn. H. J. Horstman 5-6-31 84 501 42-183-003998-00U Lambert Chaffin, et al H. J. Horstman 4-30-31 83 295 42-183-003998-00V James Sheppard B. R. McLemore, et al 5-25-31 92 7 FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-003998-00R A tract of land out of the Wilson (s) William C. Wakeland Survey, Gregg 416855100 County, Texas, containing 100 acres more or less, and more Glenwood Field particularly described in that (Cotton Valley) certain Oil and Gas Lease dated J. W. Wilson #1 (d) May 8, 1931, recorded Volume 81, 410006900 Page 482, Deed Records, Gregg (continued) County, Texas. 42-183-003998-00S A tract of land out of the William C. Wakeland Survey, Gregg County, Texas, containing 100 acres more or less, and more particularly described in that certain Oil and Gas Lease dated April 29, 1931, recorded in Volume 85, Page 255, Deed Records, Gregg County, Texas. 42-183-003998-00T A tract of land out of the William C. Wakeland Survey, Gregg County, Texas, containing 100 acres more or less, and more particularly described in that certain Oil and Gas Lease dated May 6, 1931, recorded in Volume 84, Page 501, Deed Records, Gregg County, Texas. 42-183-003998-00U A tract of land out of the William C. Wakeland Survey, Gregg County, Texas, containing 100 acres more or less, and more particularly described in that certain Oil and Gas Lease dated April 30, 1931, recorded in Volume 83, Page 295, Deed Records, Gregg County, Texas. 42-183-003998-00V A tract of land out of the William C. Wakeland Survey, Gregg County, Texas, containing 100 acres more or less, and more particularly described in that certain Oil and Gas Lease dated May 25, 1931, recorded in Volume 92, Page 7, Deed Records, Gregg County, Texas.
Page 52 of 165 79
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-003998-00W Mogieree Jones Cannon J. O. Ellinger 5-23-31 86 429 Wilson (s) 416855100 Glenwood Field (Cotton Valley) J. W. Wilson #1 (d) 410006900 (continued) 42-183-003998-00X Andrew Jones, et al J. O. Ehlinger 5-2-31 79 615 42-183-003998-00Y Andrew Jones, et al J. O. Ehlinger 5-15-31 89 167 42-183-003998-00Z Elisha Williams, et al Atlantic Oil 6-29-31 90 565 Producing Company 42-183-003998-0AA Joe Wheeler Atlantic Oil 6-29-31 90 567 Producing Company FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-003998-00W A tract of land out of the Wilson (s) William C. Wakeland Survey, Gregg 416855100 County, Texas, containing 100 acres more or less, and more Glenwood Field particularly described in that (Cotton Valley) certain Oil and Gas Lease dated J. W. Wilson #1 (d) May 23, 1931, recorded in Volume 410006900 86, Page 429, Deed Records, Gregg (continued) County, Texas. 42-183-003998-00X A tract of land out of the William C. Wakeland Survey, Gregg County, Texas, containing 100 acres more or less, and more particularly described in that certain Oil and Gas Lease dated May 2, 1931, recorded in Volume 79, Page 615, Deed Records, Gregg County, Texas. 42-183-003998-00Y A tract of land out of the William C. Wakeland Survey, Gregg County, Texas, containing 100 acres more or less, and more particularly described in that certain Oil and Gas Lease dated May 15, 1931, recorded in Volume 89, Page 167, Deed Records, Gregg County, Texas. 42-183-003998-00Z A tract of land out of the William C. Wakeland Survey, Gregg County, Texas, containing 100 acres more or less, and more particularly described in that certain Oil and Gas Lease dated June 29, 1931, recorded in Volume 90, Page 565, Deed Records, Gregg County, Texas. 42-183-003998-0AA A tract of land out of the William C. Wakeland Survey, Gregg County, Texas, containing 100 acres more or less, and more particularly described in that certain Oil and Gas Lease dated June 29, 1931, recorded in Volume 90, Page 567, Deed Records, Gregg County, Texas.
Page 53 of 165 80
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-003998-0AB Susie Williams, A-I-F Atlantic Oil 7-30-31 99 217 Wilson (s) Producing Company 416855100 Glenwood Field (Cotton Valley) J. W. Wilson #1 (d) 410006900 (continued) 42-183-003998-0AC John L. Keevil Paul S. Adams 8-20-31 103 136 42-183-003998-0AD Curley Jones Atlantic Oil 10-20-31 110 56 Producing Company 42-183-003998-0AE Nathaniel Williams Atlantic Oil 6-22-32 129 528 Producing Company 42-183-003998-0AF John C. Robbins, Jr. Atlantic Oil 11-8-32 139 214 Producing Company FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-003998-0AB A tract of land out of the Wilson (s) William C. Wakeland Survey, Gregg 416855100 County, Texas, containing 100 acres more or less, and more Glenwood Field particularly described in that (Cotton Valley) certain Oil and Gas Lease dated J. W. Wilson #1 (d) July 30, 1931, recorded in 410006900 Volume 99, Page 217, Deed (continued) Records, Gregg County, Texas. 42-183-003998-0AC Two tracts of land out of the William C. Wakeland Survey, Gregg County, Texas, containing 129.49 acres more or less, and more particularly described in that certain Oil and Gas Lease dated August 20, 1931, recorded in Volume 103, Page 136, Deed Records, Gregg County, Texas. 42-183-003998-0AD A tract of land out of the William C. Wakeland Survey, Gregg County, Texas, containing 100 acres more or less, and more particularly described in that certain Oil and Gas Lease dated October 20, 1931, recorded in Volume 110, Page 56, Deed Records, Gregg County, Texas. 42-183-003998-0AE A tract of land out of the William C. Wakeland Survey, Gregg County, Texas, containing 100 acres more or less, and more particularly described in that certain Oil, Gas and Mining Lease dated June 22, 1932, recorded in Volume 129, Page 528, Deed Records, Gregg County, Texas. 42-183-003998-0AF A tract of land out of the William C. Wakeland Survey, Gregg County, Texas, containing 100 acres more or less, and more particularly described in that certain Oil, Gas and Mining Lease dated November 8, 1932, recorded in Volume 139, Page 214, Deed Records, Gregg County, Texas.
Page 54 of 165 81
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-183-043531-000 C.L. Still, et ux D. H. Byrd 11-28-30 62 209 C. L. Still (s) 416017700 .0731% ORRI (d) 2.658 Acres 28.430 Gross Acres East Texas Field None Tooke "A" Small Royalty 413013800 Interest .0014% RI D. O. 42-183-031066 FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-183-043531-000 A tract of land containing 28.43 AR-101556 C. L. Still (s) acres, more or less, out of the Operating Agreement dated December 4, 1931, 416017700 John Wilkinson Survey, A-224, by and between Gulf Production Company, .0731% ORRI Gregg County, Texas, and more Operator, and Byrd-Frost, Inc., (d) particularly described in that Non-Operator. (s/d) 2.658 Acres certain Assignment of Oil and Gas 28.430 Gross Acres Lease dated July 1, 1952, AR-101564 recorded in Volume 382, Page 424, Operating Agreement dated September 1, 1964, Deed Records, Gregg County, Texas by and between Tenneco Exploration Company, Operator, and Continental Oil Company, Non-Operator. (s/d) AR-101547 Purchase and Sale Agreement dated November 15, 1982, between Conoco Inc. and Petro-Lewis East Texas Field Corporation. (s/d) Tooke "A" None 23.1 acres, more or less, out of 413013800 Small Royalty the W. G. Painter Survey, Gregg AR-101548 .0014% RI Interest County, Texas, being same lands Joint Operating Agreement dated January 1, D. O. 42-183-031066 described as Second Tract in 1983, by and between Conoco Inc. and Assignment dated July 6, 1931, Petro-Lewis Corporation. (s/d) Recorded in Volume 119, Page 217 of Deed Records of Gregg County, AR-101580 Texas Like-Kind Exchange Agreement dated June 1, 1992, by and between Atlantic Richfield Company and Conoco Inc. (s/d) Assignment and Bill of Sale dated February 17, 1989, by and between Conoco and Gene Powell Investments Inc. (s) Private Radio License from Federal Communications Commission to ARCO Communications, Inc., dated December 16, 1992, File No. 0000000319451, Call Sign KNEP883, Frequency 154.47875 MHZ
Page 55 of 165 82
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- Willow Springs Field 42-183-004015-00A Ross Young, Guardian Gulf Production 1-31-31 67 531 (Cotton Valley) of the Estate of Company A. L. Bacle Gas Unit (d) Lillian Green, et al 416326501 1.839164% ORRI 42-183-004015-00B Arrenva Bacle B. A. Skipper 4-25-30 4 392 42-183-004015-00C C. G. Glasscock Gulf Production 11-21-31 115 231 Company 42-183-004015-00D Rosa V. Glasscock, Gulf Production 11-21-31 115 226 et vir Company - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field None Unknown Unknown --- --- --- A. V. Bacle 416856100 D.O. 42-183-030910-000 Operator Robinett Resources, Inc. 0.530749% RI FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- Willow Springs Field 42-183-004015-00A A tract of land out of the G. W. AR-95702-004 (Cotton Valley) Hooper Survey, Gregg County, Declaration of Unitization and Designation of A. L. Bacle Gas Unit (d) Texas, containing 30.0 acres more the A. L. Bacle Gas Unit, recorded in Volume 416326501 or less, and more particularly 2599, Page 256, Deed Records, Gregg Co., 1.839164% ORRI described in that certain Oil and Texas. (d) Gas Lease dated January 31, 1931, recorded in Volume 67, Page 531, AR-95702 Deed Records, Gregg County, Texas. Farmout Agreement dated February 13, 1990 by and between Atlantic Richfield Company and C 42-183-004015-00B A tract of land out of the G. W. W Resources, Inc. (d) Hooper Survey, Gregg County, Texas, containing 30.0 acres more or less, and more particularly described in that certain Oil and Gas Lease dated April 25, 1930, recorded in Volume 4, Page 392, Deed Records, Gregg County, Texas. 42-183-004015-00C A tract of land out of the G. W. Hooper Survey, Gregg County, Texas, containing 30.0 acres more or less, and more particularly described in that certain Oil and Gas Lease dated November 21, 1931, recorded in Volume 115, Page 231, Deed Records, Gregg County, Texas. 42-183-004015-00D A tract of land out of the G. W. Hooper Survey, Gregg County, Texas, containing 30.0 acres more or less, and more particularly described in that certain Oil and Gas Lease dated November 21, 1931, recorded in Volume 115, Page 226, Deed Records, Gregg County, Texas. - --------------------------- --------------------- ----------------------------------- ---------------------------------------------- East Texas Field None 7.32 acres, more or less, in the A. V. Bacle D. Sanches Survey, A-186, Gregg 416856100 County, Texas D.O. 42-183-030910-000 Operator Robinett Resources, Inc. 0.530749% RI
Page 56 of 165 83
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field None Unknown Unknown --- --- --- R. Christian 412225900 D.O. 42-183-031172-000 Operator 0.56020% RI - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field No Info. No Info. No Info. --- --- --- Flemister 413521100 D.O. 42-183-030960-000 Operator M-C Production & Drilling Company, Inc. 0.005900% RI - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field No Info. No Info. No Info. --- --- --- F. C. Christian 415345600 D.O. 42-183-030973-000 Operator Mustang Operating Company 0.196700% RI - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field No Info. No. Info. No. Info. --- --- --- Dallas Caldwell 416348100 D.O. 42-183-018493-000 Operator N. P. Powell Estate 0.013146% RI East Texas Field No Info. No Info. No Info. --- --- --- Caddie Fisher 415322700 D.O. 42-183-018494-000 Operator N. P. Powell Estate 0.026292% RI FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field None 27 acres, more or less, out of R. Christian the G. W. Hooper Survey, Gregg 412225900 County, Texas D.O. 42-183-031172-000 Operator 0.56020% RI - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field No Info. 45 acres, more or less, located in Flemister the G. W. Hooper Survey, Gregg 413521100 County, Texas D.O. 42-183-030960-000 Operator M-C Production & Drilling Company, Inc. 0.005900% RI - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field No Info. 23.2 acres, more or less, out of F. C. Christian the G. W. Hooper Survey, Gregg 415345600 County, Texas D.O. 42-183-030973-000 Operator Mustang Operating Company 0.196700% RI - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field No Info. 51.34 acres, more or less, out of Dallas Caldwell a 79.09 acre tract in the John 416348100 Ruddle Survey, Gregg County, Texas D.O. 42-183-018493-000 Operator N. P. Powell Estate 0.013146% RI - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field No Info. 65.65 acres, more or less, being Caddie Fisher the East 65.65 acres out of a 415322700 148.71 acre tract in the John D.O. 42-183-018494-000 Ruddle Survey, Gregg County, Texas Operator N. P. Powell Estate 0.026292% RI
Page 57 of 165 84
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field Unkn Unkn Unkn --- --- --- S. Carr "A" 413269600 D.O. 42-183-018432-000 Operator CNS Enrgy .13021% RI East Texas Field Unkn. Unkn. Unkn. --- -- --- S. Carr "B" 418573100 D.O. 42-183-018433-000 Operator Mustang Operating .13021% RI - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field Unkn. Unkn. Unkn. --- --- --- J. A. Whitaker 415368500 D.O. 42-183-018472-000 Operator 4-Sight Operating Company .015479% RI J. A. Whitaker -A- Unkn. Unkn. Unkn. --- --- --- 414564000 D. O. 42-183-018478-000 Operator Unknown .015479% RI - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field M. Lemaire (Small RI) 418989200 .0391% FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field Unkn West 2/3 of South acres of the S. Carr "A" Sam Carr 112 acre tract, situated 413269600 in M. McCurry Survey, based on D.O. 42-183-018432-000 Csghd Gas Contract between A. R. Operator Dillard, as Seller, and Sinclair, CNS Enrgy as Buyer, dated 7/27/1938, Gregg .13021% RI County, Texas East Texas Field Unkn. S. Carr "B" North 16.5 acres of South 33 418573100 acres of North 100 acres of Sam D.O. 42-183-018433-000 Carr 112 acre tract situated in Operator M. McCurry Survey, based on Csghd Mustang Operating Gas Contract between A. R. .13021% RI Dillars as Seller and Sinclair as Buyer dated 7/27/1938, Gregg County, Texas - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field Unkn. N 1/4 of the East 4/14 of a 100 J. A. Whitaker acre tract out of the Charles 415368500 Alexander Survey A-10, Gregg D.O. 42-183-018472-000 County, Texas Operator 4-Sight Operating Company .015479% RI J. A. Whitaker -A- Unkn. 414564000 N/2 of the South 3/4 of the East D. O. 42-183-018478-000 4/14 of a 100 acre tract out of Operator Unknown the Charles Alexander Survey .015479% RI A-10, Gregg County, Texas - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 25.84 acres out of the H. M. Lemaire (Small RI) Hathaway Survey, Gregg County, 418989200 Texas .0391% - -------------------------- -------------------- ---------------------------------- ----------------------------------------------
Page 58 of 165 85 EXHIBIT "A" ATTACHED TO AND MADE A PART OF THAT CERTAIN PURCHASE AND SALE AGREEMENT DATED EFFECTIVE AS OF OCTOBER 1, 1999, BY AND BETWEEN ATLANTIC RICHFIELD COMPANY (ARCO) AND FUTURE ACQUISITION 1995, LTD. (PURCHASER) IN ADDITION TO ANY OTHER DEPTH LIMITATIONS EXPRESSED HEREIN, IT IS THE EXPRESS INTENTION TO LIMIT THE DESCRIPTIONS OF ARCO'S INTEREST (IF ANY), FROM THE SURFACE DOWN TO THE BASE OF THE DEEPEST PRODUCING FORMATION RUSK COUNTY
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-056611-000 Abe Holt and Mary W. P. Chandler 9-10-30 150 153 Abe Holt (s) Holt, et al 416666300 100% WI 71.0227% NRI Abe Holt "B" (s) 414231400 100% WI 87.5% NRI South Kilgore Unit (s) 417539500 97.659398% WI 83.460188% NRI FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- --------------------------------------------- East Texas Field 42-401-056611-000 A tract of land out of the Daniel AR-105213 Abe Holt (s) Clark Survey, Rusk County, Texas, Acreage Exchange Agreement dated effective 416666300 containing 68.84 acres more or April 1, 1995 by and between Paloma Partners, 100% WI less, and more particularly Ltd. and Atlantic Richfield Company. (s) 71.0227% NRI described in that certain Oil and Gas Lease dated September 10, AR-105265-000 Abe Holt "B" (s) 1930, recorded in Volume 150, Purchase and Sale Agreement dated October 6, 414231400 Page 153, Deed Records, Rusk 1995 by and between East Texas Gathering 100% WI County, Texas. Company, Atlantic Richfield Company, Sun Pipe 87.5% NRI Line Company and Sun Company, Inc. (s) ONLY INSOFAR AS THE LEASE COVERS South Kilgore Unit (s) THE RIGHTS FROM THE SURFACE TO AR-105265-001 417539500 THE WOODBINE FORMATION AND Crude Oil Buy/Sell Contract dated effective 97.659398% WI PREFERENTIAL RIGHTS BELOW THE December 1, 1995 by and between ARCO Permian 83.460188% NRI BASE OF THE WOODBINE UNDER THE and Sun Company, Inc. (s) ABE HOLT "B" ONLY. AR-105875 South Kilgore Unit and Unit Operating Agreement dated effective May 1, 1997, Atlantic Richfield Company, Operator. (s) AR-105229 Salt Water Agreement Permanent Water Contract dated September 25, 1935 from Mattie Bean to J. Beren. Permanent Water Contract dated November 12, 1935 from Mattie Bean to J. Beren. Permanent Water Contract dated June 3, 1936 from Mary Holt to J. Beren (AR-105230-001, 002 and 003) (s) AR-105228 Farmout Agreement dated May 11, 1932 by and between Max Rubin, J. Beren and Shell Petroleum Corporation. (s)
Page 59 of 165 86
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- Continued from above Continued from above Continued from above Continued from above Continued from above - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- --------------------------------------------- Continued from above Continued from above Continued from above AR-105414-001 Operating Agreement dated effective June 1, 1980 by and between Gibson Drilling Company, Operator, and James H. Merritt, et al, Non-Operator. (s) AR-105583 Longview Gas Plant Gas Purchase Contract dated November 1, 1997 by and between ARCO Permian, Seller, and ARCO Permian, Buyer, amended August 25, 1998. (s/d) Private Radio License from Federal Communications Commission to ARCO Communications, Inc., dated December 16, 1992, File No. 000000319451, Call Sign KNEP883, Frequency 154.47875 MHZ
Page 60 of 165 87
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-056616-00A C. O. Christian, Jr. Bargo Energy Company 5-19-94 1875 686 C. O. Christian "B" (s) 412795100 100% WI 80.0% NRI South Kilgore Unit (s) 42-401-056616-00B Doris Christian Rea Bargo Energy Company 5-19-94 1875 684 417539500 97.659398% WI 83.460188% NRI 42-401-056616-00C Randall G. Rea, IE of Bargo Energy Company 5-19-94 1872 629 the Estate of Patsy C. McCrory - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-000861-000 Wildman Petroleum Argo Royalty Company 1-30-32 212 173 Christian "C" (Mineral Deed) Corporation #24202 (28667-000) 410495100 .3906% RI FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- --------------------------------------------- East Texas Field 42-401-056616-00A A tract of land out of the Daniel AR-105213 C. O. Christian "B" (s) Clark Survey, Rusk County, Texas, Acreage Exchange Agreement dated effective 412795100 containing 64.5 acres more or April 1, 1995 by and between Paloma Partners, 100% WI less, and more particularly Ltd. and Atlantic Richfield Company. (s) 80.0% NRI described in that certain Memorandum of Oil and Gas Lease AR-105875 dated May 19, 1994, recorded in South Kilgore Unit and Unit Operating Volume 1875, Page 686, Deed Agreement dated effective May 1, 1997, Records, Rusk County, Texas. Atlantic Richfield Company, Operator. (s) ONLY INSOFAR AS LEASES COVER AR-105583 RIGHTS FROM THE SURFACE TO THE Longview Gas Plant Gas Purchase Contract BASE OF THE WOODBINE FORMATION. dated November 1, 1997 by and between ARCO Permian, Seller, and ARCO Permian, Buyer, South Kilgore Unit (s) 42-401-056616-00B A tract of land out of the Daniel amended August 25, 1998. (s/d) 417539500 Clark Survey, Rusk County, Texas, 97.659398% WI containing 64.5 acres more or Private Radio License from Federal 83.460188% NRI less, and more particularly Communications Commission to ARCO described in that certain Communications, Inc., dated December 16, Memorandum of Oil and Gas Lease 1992, File No. 0000000319451, Call Sign dated May 19, 1994, recorded in KNEP883, Frequency 154.47875 MHZ Volume 1875, Page 684, Deed Records, Rusk County, Texas. ONLY INSOFR AS LEASES COVER RIGHTS FROM THE SURFACE TO THE BASE OF THE WOODBINE FORMATION. 42-401-056616-00C A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 64.5 acres more or less, and more particularly described in that certain Memorandum of Oil and Gas Lease dated May 19, 1994, recorded in Volume 1872, Page 629, Deed Records, Rusk County, Texas. ONLY INSOFAR AS LEASES COVER RIGHTS FROM THE SURFACE TO THE BASE OF THE WOODBINE FORMATION. - -------------------------- -------------------- ---------------------------------- --------------------------------------------- East Texas Field 42-401-000861-000 A tract of land being a part of Oil, Gas and Mineral Lease dated December 18, Christian "C" (Mineral Deed) the W. W. Simms Survey, Rusk 1930 recorded in Volume 157, Page 583, Deed #24202 (28667-000) County, Texas, and more Records, Rusk County, Texas. 410495100 particularly described by metes .3906% RI and bounds in that certain Mineral Deed dated January 30, 1932, recorded in Volume 212, Page 173, Deed Records, Rusk County, Texas.
Page 61 of 165 88
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-056697-00A Drayton Jones and R. H. Sowell 12-19-30 164 49 Jones, D. /Merrit-Jones (s) 42-401-056698-00A wife, Dora Jones; 418840300 Lillie Roberson, and 83.125% WI husband, Hosea 72.7343% NRI Roberson; Opal Gene Givens; Venia Sherow D. Jones/Tallal-Jones (s) and husband, Thordia 4188501000 Sherow; Jessie 100.0% WI Blackman, wife of 75.0% NRI Tootsom Blackman, Deceased South Kilgore Unit (s) 417539500 42-401-056697-00B Opal Gene Givens, a B. G.Beckam 2-6-31 181 1 97.659398% WI 42-401-056698-00B feme sole, and T. J. 83.460188% NRI Givens 42-401-056697-00C Opal Gene Givens, a J. H. Merritt 8-14-35 271 436 42-401-056698-00C feme sole, and T. J. Givens 42-401-056697-00D E. W. Merritt 10-20-34 257 144 42-401-056698-00D Oscar Askew FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- --------------------------------------------- East Texas Field 42-401-056697-00A A tract of land out of the Daniel AR-105414-001 Jones, D. /Merrit-Jones (s) 42-401-056698-00A Clark Survey, A-162, Rusk County, Operating Agreement dated effective June 1, 418840300 Texas, containing 13.72 acres 1980 by and between Gibson Drilling Company, 83.125% WI more or less, and more Operator, and James H. Merritt, et al, 72.7343% NRI particularly described in Non-Operator. (s) Leasehold Partition dated 2-6-35 D. Jones/Tallal-Jones (s) as tracts 2, 3 & 4 recorded Vol. AR-105875 4188501000 262, Page 52, Deed Records, Rusk South Kilgore Unit and Unit Operating 100.0% WI County, Texas. Agreement dated effective May 1, 1997, 75.0% NRI Atlantic Richfield Company, Operator. (s) AR-105583 South Kilgore Unit (s) 42-401-056697-00B A tract of land out of the Daniel Longview Gas Plant Gas Purchase Contract 417539500 42-401-056698-00B Clark Survey, A-162, Rusk County, dated November 1, 1997 by and between ARCO 97.659398% WI Texas, containing 13.72 acres Permian, Seller, and ARCO Permian, Buyer, 83.460188% NRI more or less, and more amended August 25, 1998. (s/d) particularly described in Leasehold Partition dated 2-6-35 Private Radio License from Federal as tracts 2, 3 & 4 recorded Vol. Communications Commission to ARCO 262, Page 52, Deed Records, Rusk Communications, Inc., dated December 16, County, Texas. 1992, File No. 0000000319451, Call Sign KNEP883, Frequency 154.47875 MHZ 42-401-056697-00C A tract of land out of the Daniel 42-401-056698-00C Clark Survey, A-162, Rusk County, Texas, containing 13.72 acres more or less, and more particularly described in Leasehold Partition dated 2-6-35 as tracts 2, 3 & 4 recorded Vol. 262, Page 52, Deed Records, Rusk County, Texas. 42-401-056697-00D A tract of land out of the Daniel 42-401-056698-00D Clark Survey, A-162, Rusk County, Texas, containing 13.72 acres more or less, and more particularly described in Leasehold Partition dated 2-6-35 as tracts 2, 3 & 4 recorded Vol. 262, Page 52, Deed Records, Rusk County, Texas. ONLY INSOFAR AS LEASES COVER RIGHTS FROM THE SURFACE TO THE BASE OF THE WOODBINE FORMATION
Page 62 of 165 89
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-056697-00E Opal Gene Givens, a J. H. Merrit 9-24-34 254 607 Jones, D. /Merrit-Jones (s) 42-401-056698-00E feme sole, and T. J. 418840300 Givens D. Jones/Tallal-Jones (s) 4188501000 South Kilgore Unit (s) 417539500 42-401-056697-00F Oscar Smith and wife, J. H. Merritt 11-30-35 276 495 (continued) 42-401-056698-00F Opal Gene Smith, formerly Opal Gene Givens 42-401-056697-00G G. W. Morgan, et al R. H. Sowell 7-9-36 293 351 42-401-056698-00G - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-006262-000 D.F. Giles, et al Van McPhail 9-9-30 151 542 Giles "C" Well No. 1-C (s) 41081161C 12.5% ORRI - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-000858-000 Ralph A. Johnston Argo Royalty Company 10-6-31 189 355 J. F. Mason (21) (Mineral Deed) 410762400 1.3540% RI FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- --------------------------------------------- East Texas Field 42-401-056697-00E A tract of land out of the Daniel Jones, D. /Merrit-Jones (s) 42-401-056698-00E Clark Survey, A-162, Rusk County, 418840300 Texas, containing 13.72 acres more or less, and more D. Jones/Tallal-Jones (s) particularly described in 4188501000 Leasehold Partition dated 2-6-35 as tracts 2, 3 & 4 recorded Vol. South Kilgore Unit (s) 262, Page 52, Deed Records, Rusk 417539500 County, Texas. (continued) 42-401-056697-00F A tract of land out of the Daniel 42-401-056698-00F Clark Survey, A-162, Rusk County, Texas, containing 13.72 acres more or less, and more particularly described in Leasehold Partition dated 2-6-35 as tracts 2, 3 & 4 recorded Vol. 262, Page 52, Deed Records, Rusk County, Texas. 42-401-056697-00G A tract of land out of the Daniel 42-401-056698-00G Clark Survey, A-162, Rusk County, Texas, containing 13.72 acres more or less, and more particularly described in Leasehold Partition dated 2-6-35 as tracts 2, 3 & 4 recorded Vol. 262, Page 52, Deed Records, Rusk County, Texas. ONLY INSOFAR AS LEASES COVER RIGHTS FROM THE SURFACE TO THE BASE OF THE WOODBINE FORMATION. - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-401-006262-000 Two tracts of land out of the M. Giles "C" Well No. 1-C (s) J. Pru Survey, Rusk County, 41081161C Texas, containing 121 acres more 12.5% ORRI or less, and more particularly described in that certain Oil and Gas Lease dated September 9, 1930, recorded in Volume 151, Page 542, Deed Records, Rusk County, Texas. - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-401-000858-000 A tract of land out of the J. B. Oil, Gas and Mineral Lease dated October 31, J. F. Mason (21) (Mineral Deed) Cadena League, Rusk County, 1929, recorded in Volume 140, Page 600, Deed 410762400 Texas, and more particularly Records, Rusk County, Texas. 1.3540% RI described in that certain Mineral Deed dated October 6, 1931, recorded in Volume 189, Page 355, Deed Records, Rusk County, Texas.
Page 63 of 165 90
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- Jared Field 42-401-000051-001 W. H. McCord, et ux, R. M. Weaver, Jr. 11-2-29 145 301 (Rodessa) Mary E. (Lizzie) J. M. Price #1 (d) McCord 415719200 0.2538% ORRI Let Field (Travis Peak) Mason Heirs #1 (d) 415031700 1.565% RI 17.5% ORRI BPO 20.0% ORRI APO Jared Field (Rodessa) Mason #1 Gas Unit (d) 415029500 1.565% RI 17.5% ORRI BPO 20.0% ORRI APO - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-000851-000 James C. Nelson Argo Royalty Company 2-6-31 167 381 J. R. Beall (Mineral Deed) 410433100 .3906% RI FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- Jared Field 42-401-000051-001 A tract of land out of the Juana AR-95707 (Rodessa) Berger DeCadena League, Rusk Farmout Agreement dated April 3, 1990 by and J. M. Price #1 (d) County, Texas, and more between Atlantic Richfield Company and Gene 415719200 particularly described in that Powell Investments, Inc. 0.2538% ORRI certain Oil and Gas Lease dated November 2, 1929, recorded in AR-100503 Let Field Volume 145, Page 301, Deed Limited Sublease of Oil, Gas and Mineral (Travis Peak) Records, Rusk County, Texas. Lease dated March 13, 1992 by and between Mason Heirs #1 (d) Atlantic Richfield Company and Triple J 415031700 Investments, Inc. recorded in Volume 1769, 1.565% RI Page 759, Land Records, Rusk County, Texas. 17.5% ORRI BPO (d) 20.0% ORRI APO AR-101621 Jared Field Purchase and Sale Agreement effective January (Rodessa) 1, 1993 by and between Atlantic Richfield Mason #1 Gas Unit (d) Company and Madera Production Company. (s) 415029500 1.565% RI AR-95707 17.5% ORRI BPO Farmout Agreement dated April 3, 1990 by and 20.0% ORRI APO between Atlantic Richfield Company and Gene Powell Investments, Inc. (d) Unit Declaration filed April 12, 1990 in Volume 1684, Page 307, Deed Records, Rusk County, Texas (J.M. Price #1) (d) - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-401-000851-000 A tract of land out of the Wm. P. J. R. Beall (Mineral Deed) Chisum Survey, Gregg and Rusk 410433100 Counties, Texas, containing 180 .3906% RI acres more or less, and more particularly described by metes and bounds in that certain Mineral Deed dated February 6, 1931, recorded in Volume 167, Page 381, Deed Records, Rusk County, Texas.
Page 64 of 165 91
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-056617-00A Bessie M. & Booker T. Natural Petroleum 11-17-34 257 344 John Henderson (s) Mayfield, husband and Company 417778900 wife 100% WI 87.500% NRI South Kilgore Unit (s) 417539500 97.659398% WI 42-401-056617-00B Minnie Holt, joined Natural Petroleum 11-17-34 257 327 83.460188% NRI by her husband, Lovie Company Holt; John Henderson; Bennie M. Henderson; Albert Henderson; Arlena Henderson, a feme sole - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-000853-000 M. C. DeGuerin and Argo Royalty Company 5-1-31 171 630 M. C. DeGuerin (22) (Mineral Deed) wife, Mrs. Maude 410533800 DeGuerin 1.5625% RI M. C. DeGuerin 417260400 1.5625% RI FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-401-056617-00A A tract of land, containing 50 AR-105213 John Henderson (s) acres more or less, out of the Acreage Exchange Agreement dated effective 417778900 Daniel Clark Survey, A-162, Rusk April 1, 1995 by and between Paloma Partners, 100% WI County, Texas, and more Ltd. and Atlantic Richfield Company. (s) 87.500% NRI particularly described by metes and bounds in Oil and Gas Lease AR-105583 South Kilgore Unit (s) dated November 17, 1934, recorded Longview Gas Plant Gas Purchase Contract 417539500 in Volume 257, Page 344, Deed dated November 1, 1997 by and between ARCO 97.659398% WI Records, Rusk County, Texas. Permian, Seller, and ARCO Permian, Buyer. 83.460188% NRI (s/d) 42-401-056617-00B A tract of land out of the Daniel Clark Survey, A-162, Rusk County, AR-105265-001 Texas, and more particularly Crude Oil Buy/Sell Contract dated effective described by metes and bounds in December 1, 1995 by and between ARCO Permian Oil and Gas Lease dated November and Sun Company, Inc. (s) 17, 1934, recorded in Volume 257, Page 327, Deed Records, Rusk AR-105265-000 County, Texas. Purchase and Sale Agreement dated October 6, 1995 by and between East Texas Gathering ONLY INSOFAR AS LEASES COVER THE Company, Atlantic Richfield Company, Sun Pipe RIGHTS FROM THE SURFACE TO THE Line Company and Sun Company, Inc. (s) BASE OF THE WOODBINE FORMATION. AR-105875 South Kilgore Unit and Unit Operating Agreement dated effective May 1, 1997, Atlantic Richfield Company, Operator. (s) Private Radio License from Federal Communications Commission to ARCO Communications, Inc., dated December 16, 1992, File No. 0000000319451, Call Sign KNEP883, Frequency 154.47875 MHZ - --------------------------- ---------------------- ----------------------------------- --------------------------------------------- East Texas Field 42-401-000853-000 A tract of land being a part of M. C. DeGuerin (22) (Mineral Deed) the J. B. Cadena League, Rusk 410533800 County, Texas, containing 158.0 1.5625% RI acres more or less, and being more particularly described in M. C. DeGuerin that certain Deed dated May 1, 417260400 1931, recorded in Volume 171, 1.5625% RI Page 630, Deed Records, Rusk County, Texas.
Page 65 of 165 92
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-056618-000 Major Kennedy, et ux G. W. Hindman 9-13-30 152 259 M. Kennedy (s) 417535200 100% WI 87.50% NRI South Kilgore Unit (s) 417539500 97.659398% WI 83.460188% NRI FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-401-056618-000 A tract of land out of the Daniel AR-105213 M. Kennedy (s) Clark Survey, Rusk County, Texas, Exchange Agreement dated April 20, 1995 by 417535200 containing 20.0 acres more or and between Atlantic Richfield Company and 100% WI less, and more particularly Paloma Partners, Ltd. (s) 87.50% NRI described in that certain Oil and Gas Lease dated September 13, AR-33093 South Kilgore Unit (s) 1930, recorded in Volume 152, Electric Service Contract dated June 24, 1969 417539500 Page 259, Deed Records, Rusk by and between Southwestern Electric Power 97.659398% WI County, Texas. Company and Atlantic Richfield Company. (s) 83.460188% NRI ONLY INSOFAR AS THE LEASE COVERS AR-64597 THE RIGHTS FROM THE SURFACE DOWN Salt Water Disposal Agreement dated June 28, TO THE BASE OF THE WOODBINE 1982, by and between ARCO Oil and Gas Company FORMATION. and East Texas Salt Water Disposal Company. Agreement dated December 14, 1992 and recorded in Volume 1838, Page 787, Deed Records, Rusk County, Texas., by and between M.A.S. Operators Company and I. B. Beren. AR-105583 Longview Gas Plant Gas Purchase Contract dated November 1, 1997 by and between ARCO Permian, Seller, and ARCO Permian, Buyer, amended August 25, 1998. (s/d) AR-105875 South Kilgore Unit and Unit Operating Agreement dated effective May 1, 1997, Atlantic Richfield Company, Operator. (s) Private Radio License from Federal Communications Commission to ARCO Communications, Inc., dated December 16, 1992, File No. 0000000319451, Call Sign KNEP883, Frequency 154.47875 MHZ
Page 66 of 165 93
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-000045-001 Major Kennedy, et ux R. W. Weaver, Jr. 10-7-30 152 399 Major Kennedy "B" (s) 414492900 100% WI 87.5% NRI Major Kennedy "C" (s) 42-401-000045-001 Major Kennedy, et ux R. W. Weaver, Jr 10-7-30 152 399 414494500 100% WI 87.5% NRI Major Kennedy "D" (s) 414496100 100% WI 87.5% NRI South Kilgore Unit (s) 417539500 97.659398% WI 83.460188% NRI FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-401-000045-001 A tract of land out of the Daniel AR-105265-001 Major Kennedy "B" (s) Clark Survey, Rusk County, Texas, Crude Oil Buy/Sell Contract dated effective 414492900 containing 100 acres, more or December 1, 1995 by and between ARCO Permian 100% WI less, described as beginning at a and Sun Company, Inc. (s) 87.5% NRI point on the North line of said Daniel Clark Susrvey, 3292' West AR-105265-000 of the NE/corner of said Survey; Purchase and Sale Agreement dated October 6, Thence West with said survey line 1995 by and between East Texas Gathering 1306.5 vrs. to the NW/corner of Company, Atlantic Richfield Company, Sun Pipe the Daniel Clark Survey; Thence Line Company and Sun Company, Inc. (s) South with the West boundary line of the survey 643'; Thence Eat Private Radio License from Federal 3,646'; Thence N 1 degrees E 643' Communications Commission to ARCO to the place of beginning; being Communicatioins, Inc., dated December 16, part of the same land conveyed by 1992, File No. 0000000319451, Call Sign J. S. Bean, et ux to Major KNEP883, Frequency 154.47875 MHZ Kennedy by deed dated 11/1/27, recorded in Vol. 137, Page 265 of AR-105213 the Deed Records of Rusk County. Acreage Exchange Agreement dated effective April 1, 1995 by and between Paloma Partners, Ltd. and Atlantic Richfield Company. (s) Major Kennedy "C" (s) 42-401-000045-001 A tract of land out of the Daniel 414494500 Clark Survey, Rusk County, Texas, AR-82521 100% WI containing 106.6 acres more or Casing Leak Allowable Transfer dated 87.5% NRI less, and more particularly effective October 1, 1986 by and between described in that certain Oil and Atlantic Richfield Company and 4-Sight Major Kennedy "D" (s) Gas Lease dated October 7, 1930, Operating Company, Inc. (s) 414496100 recorded in Volume 152, Page 399, 100% WI Deed Records, Rusk County, Texas. AR-82513 87.5% NRI Purchase and Sale Agreement dated effective ONLY INSOFAR AS LEASE COVERS THE October 1, 1986 by and between Atlantic South Kilgore Unit (s) RIGHTS FROM THE SURFACE TO THE Richfield Company and 4-Sight Operating 417539500 BASE OF THE WOODBINE FORMATION Company, Inc. (s) 97.659398% WI 83.460188% NRI AR-105875 South Kilgore Unit and Unit Operating Agreement dated effective May 1, 1997, Atlantic Richfield Company, Operator. (Except Major Kennedy "B") (s) AR-98412 Longview Gas Plant Gas Purchase Contract dated January 1, 1997, by and between ARCO Permian, Seller and ARCO Permian, Buyer, as amended effective August 1, 1998 (applies to Major Kennedy "B" only) AR-105583 Longview Gas Plant Gas Purchase Contract dated November 1, 1997 by and between ARCO Permian, Seller, and ARCO Permian, Buyer, amended August 25, 1998. (s/d)
Page 67 of 165 94
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-000045-00B G. W. Morgan Sinclair Oil Corp. 5-29-39 330 633 Major Kennedy "C" (s) 414494500 100% WI 87.5% NRI South Kilgore Unit (s) 417539500 97.659398% WI 42-401-000045-00C Savannah Butts, Webb Kennedy 5-29-39 329 367 83.460188% NRI et vir Levy Butts 42-401-000045-00D Emma Montgomery, Webb Kennedy 5-29-39 329 370 et vir 42-401-000045-00E Arthur Kennedy Webb Kennedy 5-29-39 329 365 FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-401-000045-00B A tract of land out of the Daniel AR-105265-001 Major Kennedy "C" (s) Clark Survey, Gregg County, Crude Oil Buy/Sell Contract dated effective 414494500 Texas, containing 20.0 acres more December 1, 1995 by and between ARCO Permian 100% WI or less, and more particularly and Sun Company, Inc. (s) 87.5% NRI described in that certain Oil and Gas Lease dated May 29, 1939, AR-105265-000 South Kilgore Unit (s) recorded in Volume 330, Page 633, Purchase and Sale Agreement dated October 6, 417539500 Deed Records, Rusk County, Texas. 1995 by and between East Texas Gathering 97.659398% WI Company, Atlantic Richfield Company, Sun Pipe 83.460188% NRI 42-401-000045-00C A tract of land out of the Daniel Line Company and Sun Company, Inc. (s) Clark Survey, Gregg County, Texas, containing 20.0 acres more AR-105213 or less, and more particularly Acreage Exchange Agreement dated effective described in that certain Oil and April 1, 1995 by and between Paloma Partners, Gas Lease dated May 29, 1939, Ltd. and Atlantic Richfield Company. (s) recorded in Volume 329, Page 367, Deed Records, Rusk County, Texas. AR-82513 Purchase and Sale Agreement dated effective 42-401-000045-00D A tract of land out of the Daniel October 1, 1986 by and between Atlantic Clark Survey, Gregg County, Richfield Company and 4-Sight Operating Texas, containing 20.0 acres more Company, Inc. (s) or less, and more particularly described in that certain Oil and AR-82521 Gas Lease dated May 29, 1939, Casing Leak Allowable Transfer effective recorded in Volume 329, Page 370, October 1, 1986 by and between Atlantic Deed Records, Rusk County, Texas. Richfield Company and 4-Sight Operating Company, Inc. (s) 42-401-000045-00E A tract of land out of the Daniel Clark Survey, Gregg County, Texas AR-105875 containing 20.0 acres more or Unit Agreement (South Kilgore Unit) dated less, and more particularly effective May 1, 1997, Atlantic Richfield described in that certain Oil and Company, Operator. (s) Gas Lease dated May 29, 1939, recorded in Volume 329, Page 365, Deed Records, Rusk County, Texas. AR-105583 Longview Gas Plant Gas Purchase Contract ONLY INSOFAR AS LEASES COVER THE dated November 1, 1997 by and between ARCO RIGHTS FROM THE SURFACE TO THE Permian, Seller, and ARCO Permian, Buyer, BASE OF THE WOODBINE FORMATION. amended August 25, 1998. (s/d) Private Radio License from Federal Communications Commission to ARCO Communications, Inc., dated December 16, 1992, File No. 0000000319451, Call Sign KNEP883, Frequency 154.47875 MHZ
Page 68 of 165 95
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-025033-000 Nat B. Bean, et al J. E. Mowinckle 2-17-31 177 385 Mary B. Bean (s) 412270400 100% WI 87.5% NRI FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-401-025033-000 40.95 acres out of the Carlos AR-105265-001 Mary B. Bean (s) Bean 43.2 acre tract in the Jacob Crude Oil Buy/Sell Contract dated effective 412270400 Lewis Survey, Rusk County, Texas, December 1, 1995 by and between ARCO Permian 100% WI and more particularly described and Sun Company, Inc. (s) 87.5% NRI by metes and bounds in that certain Oil, Gas and Mineral AR-105265-000 Lease dated February 17, 1931, Purchase and Sale Agreement dated October 6, recorded in Volume 177, Page 385 1995 by and between East Texas Gathering Deed Records, Rusk County, TX Company, Atlantic Richfield Company, Sun Pipe Line Company and Sun Company, Inc. (s) AR-101649 Pipe Line Operating Agreement dated April 7, 1993 between Atlantic Richfield Company, Producer, and ARCO Pipe Line Company. (s) AR-98412 Longview Gas Plant Gas Purchase Contract dated January 1, 1997, by and between ARCO Permian, seller and ARCO Permian, buyer, as amended effective August 1, 1998 (s) Private Radio License from Federal Communications Commission to ARCO Communications, Inc., dated December 16, 1992, File No. 0000000319451, Call Sign KNEP883, Frequency 154.47875 MHZ
Page 69 of 165 96
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-056612-00A George Eason Bargo Energy Company 4-29-95 1915 100 Mayfield A (s) 415035000 62.50% WI 54.6876% NRI South Kilgore Unit (s) 417539500 97.659398% WI 42-401-056612-00B Barbara J. Oxford Bargo Energy Company 4-29-95 1915 92 83.460188% NRI FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-401-056612-00A A tract of land out of the Daniel AR-105875 Mayfield A (s) Clark Survey, Rusk County, Texas, South Kilgore Unit and Unit Operating 415035000 containing 10 acres more or less, Agreement dated effective May 1, 1997, 62.50% WI and more particularly described Atlantic Richfield Company, Operator. (s) 54.6876% NRI in that certain Oil and Gas Lease dated April 29, 1995, recorded in AR-105265-000 South Kilgore Unit (s) Volume 1915, Page 100, Official Purchase and Sale Agreement dated October 6, 417539500 Public Records, Rusk County, 1995 by and between East Texas Gathering 97.659398% WI Texas. Company, Atlantic Richfield Company, Sun Pipe 83.460188% NRI Line Company and Sun Company, Inc. (s) 42-401-056612-00B A tract of land out of the Daniel Clark Survey, Rusk County, Texas, AR-105265-001 containing 10 acres more or less, Crude Oil Buy/Sell Contract dated effective and more particularly described December 1, 1995 by and between ARCO Permian in that certain Oil and Gas Lease and Sun Company, Inc. (s) dated April 29, 1995, recorded in Volume 1915, Page 92, Official AR-105213 Public Records, Rusk County, Exchange Agreement dated April 20, 1995 by Texas. and between Atlantic Richfield Company and Paloma Partners, Ltd. (s) ONLY INSOFAR AS SAID LEASES COVER THE RIGHTS FROM THE SURFACE TO Private Radio License from Federal THE BASE OF THE WOODBINE Communications Commission to ARCO FORMATION. Communications, Inc., dated December 16, 1992, File No. 0000000319451, Call Sign KNEP883, Frequency 154.47875 MHZ
Page 70 of 165 97
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-056612-00C Lois Freeman Bargo Energy Company 4-29-95 1913 819 Mayfield A (s) 415035000 South Kilgore Unit (s) 417539500 (continued) 42-401-056612-00D Marcia Lou Braly Bargo Energy Company 4-29-95 1914 427 42-401-056612-00E Frank J. Budde, Ind. Bargo Energy Company 4-29-95 1913 816 And as Trustee of the Frank and Marilyn Budde Family Trust 42-401-056612-00F Thomas Mayfield Bargo Energy Company 4-29-95 1914 414 42-401-056612-00G Ruby Duvall Atchley Bargo Energy Company 4-29-95 1914 410 FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-401-056612-00C A tract of land out of the Daniel Mayfield A (s) Clark Survey, Rusk County, Texas, 415035000 containing 10 acres more or less, and more particularly described South Kilgore Unit (s) in that certain Oil and Gas Lease 417539500 dated April 29, 1995, recorded in (continued) Volume 1913, Page 819, Official Public Records, Rusk County, Texas. 42-401-056612-00D A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 10 acres more or less, and more particularly described in that certain Oil and Gas Lease dated April 29, 1995, recorded in Volume 1914, Page 427, Official Public Records, Rusk County, Texas. 42-401-056612-00E A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 10 acres more or less, and more particularly described in that certain Oil and Gas Lease dated April 29, 1995, recorded in Volume 1913, Page 816, Deed Records, Rusk County, Texas. 42-401-056612-00F A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 10 acres more or less, and more particularly described in that certain Oil and Gas Lease dated April 29, 1995, recorded in Volume 1914, Page 414, Official Public Records, Rusk County, Texas. 42-401-056612-00G A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 10 acres more or less, and more particularly described in that certain Oil and Gas Lease dated April 29, 1995, recorded in Volume 1914, Page 410, Official Public Records, Rusk County, Texas. ONLY INSOFAR AS SAID LEASES COVER THE RIGHTS FROM THE SURFACE TO THE BASE OF THE WOODBINE FORMATION.
Page 71 of 165 98
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-056612-00H Freya Jean Atchley Bargo Energy Company 4-29-95 1914 412 Mayfield A (s) Bolton 415035000 South Kilgore Unit (s) 417539500 (continued) 42-401-056612-00I J. Mike Rowan Bargo Energy Company 5-17-95 1914 418 42-401-056612-00J Baton Corporation Bargo Energy Company 4-29-95 1914 423 42-401-056612-00K John J. Dozier Bargo Energy Company 4-29-95 1914 421 42-401-056612-00L Goodrich-Malloy Trust Atlantic Richfield 3-29-96 1964 542 Company FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-401-056612-00H A tract of land out of the Daniel Mayfield A (s) Clark Survey, Rusk County, Texas, 415035000 containing 10 acres more or less, and more particularly described South Kilgore Unit (s) in that certain Oil and Gas Lease 417539500 dated April 29, 1995, recorded in (continued) Volume 1914, Page 412, Official Public Records, Rusk County, Texas. 42-401-056612-00I A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 10 acres more or less, and more particularly described in that certain Oil and Gas Lease dated May 17, 1995, recorded in Volume 1914, Page 418, Official Public Records, Rusk County, Texas. 42-401-056612-00J A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 10 acres more or less, and more particularly described in that certain Oil and Gas Lease dated April 29, 1995, recorded in Volume 1914, Page 423, Official Public Records, Rusk County, Texas. 42-401-056612-00K A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 10 acres more or less, and more particularly described in that certain Oil and Gas Lease dated April 29, 1995, recorded in Volume 1914, Page 421, Official Public Records, Rusk County, Texas. 42-401-056612-00L A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 142.0 acres more or less, and more particularly described in that certain Oil and Gas Lease dated March 29, 1996, recorded in Volume 1964, Page 542, Official Public Records, Rusk County, Texas. ONLY INSOFAR AS SAID LEASES COVER THE RIGHTS FROM THE SURFACE TO THE BASE OF THE WOODBINE FORMATION.
Page 72 of 165 99
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-056612-00M Robert R. Goodrich Atlantic Richfield 5-16-96 1964 550 Mayfield A (s) Company 415035000 South Kilgore Unit (s) 417539500 (continued) 42-401-056612-00N John F. Malloy, Ind. Atlantic Richfield 5-16-96 1964 557 And as Agent for John Company Goodrich Malloy, Margaret C. Malloy and Paul Malloy 42-401-056612-00O Irvin J. Jaffe Bargo Energy Company 4-29-95 1915 94 42-401-056612-00P Sonya Faye Atchley Bargo Energy Company 4-29-95 1915 96 Morgan, et al 42-401-056612-00Q Sonya Faye Atchley Bargo Energy Company 4-29-95 1915 98 Morgan, et al FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-401-056612-00M A tract of land out of the Daniel Mayfield A (s) Clark Survey, Rusk County, Texas, 415035000 containing 107.0 acres more or less, and more particularly South Kilgore Unit (s) described in that certain Oil and 417539500 Gas Lease dated May 16, 1995, (continued) recorded in Volume 1964, Page 550, Official Public Records, Rusk County, Texas. Only insofar as said lease covers the rights from the surface to the Base of the Woodbine formation. 42-401-056612-00N A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 107.0 acres more or less, and more particularly described in that certain Oil and Gas Lease dated May 16, 1996, recorded in Volume 1964, Page 557, Official Public Records, Rusk County, Texas. 42-401-056612-00O A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 10 acres more or less, and more particularly described in that certain Oil and Gas Lease dated April 29, 1995, recorded in Volume 1915, Page 94, Official Public Records, Rusk County, Texas. 42-401-056612-00P A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 10 acres more or less, and more particularly described in that certain Oil and Gas Lease dated April 29, 1995, recorded in Volume 1915, Page 96, Official Public Records, Rusk County, Texas. 42-401-056612-00Q A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 10 acres more or less, and more particularly described in that certain Oil and Gas Lease dated April 29, 1995, recorded in Volume 1915, Page 98, Official Public Records, Rusk County, Texas. ONLY INSOFAR AS SAID LEASES COVER THE RIGHTS FROM THE SURFACE TO THE BASE OF THE WOODBINE FORMATION.
Page 73 of 165 100
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-056612-00R Billie Jean Ashworth Bargo Energy Company 4-29-95 1917 110 Mayfield A (s) 415035000 South Kilgore Unit (s) 417539500 (continued) 42-401-056612-00S Betty Jean Smith Bargo Energy Company 4-29-95 1917 125 42-401-056612-00T Myrtle V. Freeman, Bargo Energy Company 4-29-95 1917 114 Individually and as Trustee 42-401-056612-00U Margaret M. Rivers Bargo Energy Company 4-29-95 1917 739 42-401-056612-00V Mrs. Marie W. Jaffe Bargo Energy Company 4-29-95 1917 119 FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-401-056612-00R A tract of land out of the Daniel Mayfield A (s) Clark Survey, Rusk County, Texas, 415035000 containing 10 acres more or less, and more particularly described South Kilgore Unit (s) in that certain Oil and Gas Lease 417539500 dated April 29, 1995, recorded in (continued) Volume 1917, Page 110, Official Public Records, Rusk County, Texas. 42-401-056612-00S A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 10 acres more or less, and more particularly described in that certain Oil and Gas Lease dated April 29, 1995, recorded in Volume 1917, Page 125, Official Public Records, Rusk County, Texas. 42-401-056612-00T A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 10 acres more or less, and more particularly described in that certain Oil and Gas Lease dated April 29, 1995, recorded in Volume 1917, Page 114, Official Public Records, Rusk County, Texas. 42-401-056612-00U A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 10 acres more or less, and more particularly described in that certain Oil and Gas Lease dated April 29, 1995, recorded in Volume 1917, Page 739, Official Public Records, Rusk County, Texas. 42-401-056612-00V A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 10 acres more or less, and more particularly described in that certain Oil and Gas Lease dated April 29, 1995, recorded in Volume 1917, Page 119, Official Public Records, Rusk County, Texas. ONLY INSOFAR AS SAID LEASES COVER THE RIGHTS FROM THE SURFACE TO THE BASE OF THE WOODBINE FORMATION.
Page 74 of 165 101
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-056612-00W Lenox C. Ligon, Ind. Bargo Energy Company 5-16-95 1919 803 Mayfield A (s) And as IE of the 415035000 Estate of Faith Carlton Brock, South Kilgore Unit (s) Deceased 417539500 (continued) 42-401-056612-00X Beverly Heller Bargo Energy Company 4-29-95 1917 116 42-401-056612-00Y Herschel H. Jaffee Bargo Energy Company 4-29-95 1917 121 42-401-056612-00Z Kathleen Rasansky Bargo Energy Company 4-29-95 1917 123 42-401-056612-0AA Mrs. Louise Adelman Bargo Energy Company 4-29-95 1917 112 FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-401-056612-00W A tract of land out of the Daniel Mayfield A (s) Clark Survey, Rusk County, Texas, 415035000 containing 10 acres more or less, and more particularly described South Kilgore Unit (s) in that certain Oil and Gas Lease 417539500 dated May 16, 1995, recorded in (continued) Volume 1919, Page 803, Official Public Records, Rusk County, Texas. 42-401-056612-00X A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 10 acres more or less, and more particularly described in that certain Oil and Gas Lease dated April 29, 1995, recorded in Volume 1917, Page 116, Official Public Records, Rusk County, Texas. 42-401-056612-00Y A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 10 acres more or less, and more particularly described in that certain Oil and Gas Lease dated April 29, 1995, recorded in Volume 1917, Page 121, Official Public Records, Rusk County, Texas. 42-401-056612-00Z A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 10 acres more or less, and more particularly described in that certain Oil and Gas Lease dated April 29, 1995, recorded in Volume 1917, Page 123, Official Public Records, Rusk County, Texas. 42-401-056612-0AA A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 10 acres more or less, and more particularly described in that certain Oil and Gas Lease dated April 29, 1995, recorded in Volume 1917, Page 112, Official Public Records, Rusk County, Texas. ONLY INSOFAR AS SAID LEASES COVER THE RIGHTS FROM THE SURFACE TO THE BASE OF THE WOODBINE FORMATION.
Page 75 of 165 102
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-056612-0AB Leo Scull, Jr. Bargo Energy Company 6-12-95 1917 741 Mayfield A (s) 415035000 South Kilgore Unit (s) 417539500 (continued) 42-401-056612-0AC Pacific Enterprises Bargo Energy Company 6-1-95 1917 746 ABC Corporation 42-401-056612-OAD John Reese Mayfield Bargo Energy Company 4-29-95 1917 744 42-401-056612-OAE Linda Wheat Atlantic Richfield 9-23-97 2038 602 Company 42-401-056612-0AF Marie Donworth Bargo Energy Company 4-29-95 1920 330 FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-401-056612-0AB A tract of land out of the Daniel Mayfield A (s) Clark Survey, Rusk County, Texas, 415035000 containing 107 acres more or less, and more particularly South Kilgore Unit (s) described in that certain Oil and 417539500 Gas Lease dated June 12, 1995, (continued) recorded in Volume 1917, Page 741, Official Public Records, Rusk County, Texas. 42-401-056612-0AC A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 10 acres more or less, and more particularly described in that certain Oil and Gas Lease dated June 1, 1995, recorded in Volume 1917, Page 746, Official Public Records, Rusk County, Texas. 42-401-056612-OAD A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 10 acres more or less, and more particularly described in that certain Oil and Gas Lease dated April 29, 1995, recorded in Volume 1917, Page 744, Official Public Records, Rusk County, Texas. 42-401-056612-OAE A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 107 acres more or less, and more particularly described in that certain Oil and Gas Lease dated September 23, 1997, recorded in Volume 2038, Page 602, Official Public Records, Rusk County, Texas. 42-401-056612-0AF A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 10.0 acres more or less, and more particularly described in that certain Oil and Gas Lease dated April 29, 1995, recorded in Volume 1920, Page 330, Official Public Records, Rusk County, Texas. ONLY INSOFAR AS SAID LEASES COVER THE RIGHTS FROM THE SURFACE TO THE BASE OF THE WOODBINE FORMATION.
Page 76 of 165 103
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-056612-OAG Robert Glassenberg Bargo Energy Company 4-29-95 1921 443 Mayfield A (s) 415035000 South Kilgore Unit (s) 417539500 (continued) 42-401-056612-0AH Lois Freeman Atlantic Richfield 10-27-96 1997 10 Company 42-401-056612-0AI Pacific Enterprises Atlantic Richfield 6-28-97 2027 316 ABC Corporation Company 42-401-056612-0AJ Myrtle V. Freeman, Atlantic Richfield 10-27-96 1999 655 Ind. And as Trustee Company under the Will of James Holman Freeman 42-401-056612-0AK Petco Limited Atlantic Richfield 12-6-96 1999 657 Company FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-401-056612-OAG A tract of land out of the Daniel Mayfield A (s) Clark Survey, Rusk County, Texas, 415035000 containing 10 acres more or less, and more particularly described South Kilgore Unit (s) in that certain Oil and Gas Lease 417539500 dated April 29, 1995, recorded in (continued) Volume 1921, Page 443, Official Public Records, Rusk County, Texas. ONLY INSOFAR AS SAID LEASES COVER THE RIGHTS FROM THE SURFACE TO THE BASE OF THE WOODBINE FORMATION. 42-401-056612-0AH A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 97 acres more or less, and more particularly described in that certain Oil and Gas Lease dated October 27, 1996, recorded in Volume 1997, Page 10, Official Public Records, Rusk County, Texas. 42-401-056612-0AI A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 107.0 acres more or less, and more particularly described in that certain Oil and Gas Lease dated June 28, 1997, recorded in Volume 2027, Page 316 Official Public Records, Rusk County, Texas. 42-401-056612-0AJ A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 97 acres more or less, and more particularly described in that certain Oil and Gas Lease dated October 27, 1996, recorded in Volume 1999, Page 655, Official Public Records, Rusk County, Texas. 42-401-056612-0AK A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 10 acres more or less, and more particularly described in that certain Oil and Gas Lease dated December 6, 1996, recorded in Volume 1999, Page 657, Official Public Records, Rusk County, Texas.
Page 77 of 165 104
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-056612-0AL John Reese Mayfield Atlantic Richfield 10-27-96 1992 562 Mayfield A (s) Company 415035000 South Kilgore Unit (s) 417539500 (continued) 42-401-056612-0AM Marie Donworth Atlantic Richfield 10-27-96 1992 714 Company 42-401-056612-0AN Margaret M. Rivers Atlantic Richfield 12-3-96 1992 721 Company 42-401-056612-0AO George Eason Atlantic Richfield 10-27-96 1992 716 Company 42-401-056612-0AP Barbara J. Oxford Atlantic Richfield 10-30-96 1992 718 Company FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-401-056612-0AL A tract of land out of the Daniel Mayfield A (s) Clark Survey, Rusk County, Texas, 415035000 containing 132 acres more or less, and more particularly South Kilgore Unit (s) described in that certain Oil and 417539500 Gas Lease dated October 27, 1996, (continued) recorded in Volume 1992, Page 562, Official Public Records, Rusk County, Texas. 42-401-056612-0AM A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 97 acres more or less, and more particularly described in that certain Oil and Gas Lease dated October 27, 1996, recorded in Volume 1992, Page 714, Official Public Records, Rusk County, Texas. 42-401-056612-0AN A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 132 acres more or less, and more particularly described in that certain Oil and Gas Lease dated December 3, 1996, recorded in Volume 1992, Page 721, Official Public Records, Rusk County, Texas. 42-401-056612-0AO A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 97 acres more or less, and more particularly described in that certain Oil and Gas Lease dated October 27, 1996, recorded in Volume 1992, Page 716, Official Public Records, Rusk County, Texas. 42-401-056612-0AP A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 97 acres more or less, and more particularly described in that certain Oil and Gas Lease dated October 30, 1996, recorded in Volume 1992, Page 718, Official Public Records, Rusk County, Texas.
Page 78 of 165 105
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-056612-0AQ Marcia L. Braly Atlantic Richfield 10-27-96 1992 711 Mayfield A (s) Company 415035000 South Kilgore Unit (s) 417539500 (continued) 42-401-056612-0AR Irvin J. Jaffe Atlantic Richfield 10-30-96 1987 143 Company 42-401-056612-0AS Thomas Mayfield Atlantic Richfield 10-27-96 1987 145 Company 42-401-056612-0AT Sonya Faye Atchley Atlantic Richfield 10-28-96 1987 147 Morgan, Ind., et al Company 42-401-056612-0AU Steven Lyle Morgan Atlantic Richfield 10-28-96 1987 149 Company FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-401-056612-0AQ A tract of land out of the Daniel Mayfield A (s) Clark Survey, Rusk County, Texas, 415035000 containing 97 acres more or less, and more particularly described South Kilgore Unit (s) in that certain Oil and Gas Lease 417539500 dated October 27, 1996, recorded (continued) in Volume 1992, Page 711, Official Public Records, Rusk County, Texas. 42-401-056612-0AR A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 97 acres more or less, and more particularly described in that certain Oil and Gas Lease dated October 30, 1996, recorded in Volume 1987, Page 143, Official Public Records, Rusk County, Texas. 42-401-056612-0AS A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 97 acres more or less, and more particularly described in that certain Oil and Gas Lease dated October 27, 1996, recorded in Volume 1987, Page 145, Official Public Records, Rusk County, Texas. 42-401-056612-0AT A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 97 acres more or less, and more particularly described in that certain Oil and Gas Lease dated October 28, 1996, recorded in Volume 1987, Page 147, Official Public Records, Rusk County, Texas. 42-401-056612-0AU A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 97 acres more or less, and more particularly described in that certain Oil and Gas Lease dated October 28, 1996, recorded in Volume 1987, Page 149, Official Public Records, Rusk County, Texas.
Page 79 of 165 106
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-056612-0AV Freya Jean Atchley Atlantic Richfield 10-28-96 1987 141 Mayfield A (s) Bolton and Cathy Ann Company 415035000 Bolton Gill South Kilgore Unit (s) 417539500 (continued) 42-401-056612-0AW Bllie Jean Ashworth Atlantic Richfield 10-30-96 1987 139 Company 42-401-056612-0AX Louise Adelman Atlantic Richfield 10-27-96 1987 137 Company 42-401-056612-0AY Kathleen Rasansky Atlantic Richfield 10-30-96 1987 151 Company 42-401-056612-0AZ Maude Wagnon Rushing Atlantic Richfield 11-4-96 1987 153 Company FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-401-056612-0AV A tract of land out of the Daniel Mayfield A (s) Clark Survey, Rusk County, Texas, 415035000 containing 97 acres more or less, and more particularly described South Kilgore Unit (s) in that certain Oil and Gas Lease 417539500 dated October 28, 1996, recorded (continued) in Volume 1987, Page 141, Official Public Records, Rusk County, Texas. 42-401-056612-0AW A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 97 acres more or less, and more particularly described in that certain Oil and Gas Lease dated October 30, 1996, recorded in Volume 1987, Page 139, Official Public Records, Rusk County, Texas. 42-401-056612-0AX A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 97 acres more or less, and more particularly described in that certain Oil and Gas Lease dated October 27, 1996, recorded in Volume 1987, Page 137, Official Public Records, Rusk County, Texas. 42-401-056612-0AY A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 97 acres more or less, and more particularly described in that certain Oil and Gas Lease dated October 30, 1996, recorded in Volume 1987, Page 151, Official Public Records, Rusk County, Texas. 42-401-056612-0AZ A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 107 acres more or less, and more particularly described in that certain Oil and Gas Lease dated November 4, 1996, recorded in Volume 1987, Page 153, Official Public Records, Rusk County, Texas.
Page 80 of 165 107
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-056612-0BA Robert Glassenberg Atlantic Richfield 10-27-96 1994 43 Mayfield A (s) Company 415035000 South Kilgore Unit (s) 417539500 (continued) 42-401-056612-0BB Beverly Heller Atlantic Richfield 10-27-96 1994 45 Company 42-401-056612-0BC Marie W. Jaffe Atlantic Richfield 1-8-97 1997 698 Company 42-401-056612-0BD Herschel H. Jaffe Atlantic Richfield 1-8-97 1997 700 Company 42-401-056612-0BE Carolyn Mayfield Atlantic Richfield 11-5-96 1997 702 Warfield Company FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-401-056612-0BA A tract of land out of the Daniel Mayfield A (s) Clark Survey, Rusk County, Texas, 415035000 containing 97 acres more or less, and more particularly described South Kilgore Unit (s) in that certain Oil and Gas Lease 417539500 dated October 27, 1996, recorded (continued) in Volume 1994, Page 43, Official Public Records, Rusk County, Texas. 42-401-056612-0BB A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 97 acres more or less, and more particularly described in that certain Oil and Gas Lease dated October 27, 1996, recorded in Volume 1994, Page 45, Official Public Records, Rusk County, Texas. 42-401-056612-0BC A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 97 acres more or less, and more particularly described in that certain Oil and Gas Lease dated January 8, 1997, recorded in Volume 1997, Page 698, Official Public Records, Rusk County, Texas. 42-401-056612-0BD A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 97 acres more or less, and more particularly described in that certain Oil and Gas Lease dated January 8, 1997, recorded in Volume 1997, Page 700, Official Public Records, Rusk County, Texas. 42-401-056612-0BE A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 107 acres more or less, and more particularly described in that certain Oil and Gas Lease dated November 5, 1996, recorded in Volume 1997, Page 702, Official Public Records, Rusk County, Texas.
Page 81 of 165 108
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-056612-0BF Bertina Mayfield Hill Atlantic Richfield 11-5-96 1997 696 Mayfield A (s) Company 415035000 South Kilgore Unit (s) 417539500 (continued) 42-401-056612-0BG Sandra Mayfield Allen Atlantic Richfield 11-5-96 1997 694 Company 42-401-056612-0BH Richard Clouse Atlantic Richfield 1-30-97 2009 573 Company 42-401-056612-0BK Cole C. McCrory Atlantic Richfield 9-16-97 2050 137 Company 42-401-056612-0BL Patrick S. McCrory Atlantic Richfield 9-16-97 2050 139 Company FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - -------------------------- -------------------- ---------------------------------- ---------------------------------------------- East Texas Field 42-401-056612-0BF A tract of land out of the Daniel Mayfield A (s) Clark Survey, Rusk County, Texas, 415035000 containing 107 acres more or less, and more particularly South Kilgore Unit (s) described in that certain Oil and 417539500 Gas Lease dated November 5, 1996, (continued) recorded in Volume 1997, Page 696, Official Public Records, Rusk County, Texas. 42-401-056612-0BG A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 107 acres more or less, and more particularly described in that certain Oil and Gas Lease dated November 5, 1996, recorded in Volume 1997, Page 694, Official Public Records, Rusk County, Texas. 42-401-056612-0BH A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 31.4 acres more or less, and more particularly described in that certain Oil and Gas Lease dated January 30, 1997, recorded in Volume 1997, Page 573, Official Public Records, Rusk County, Texas. 42-401-056612-0BK A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 10 acres more or less, and more particularly described in that certain Oil and Gas Lease dated September 16, 1997, recorded in Volume 2050, Page 137, Official Public Records, Rusk County, Texas. 42-401-056612-0BL A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 10 acres more or less, and more particularly described in that certain Oil and Gas Lease dated September 16, 1997, recorded in Volume 2050, Page 139, Official Public Records, Rusk County, Texas.
Page 82 of 165 109
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-056612-0BM C. O. Christian, Jr. Atlantic Richfield 9-16-97 2050 129 Mayfield A (s) Company 415035000 South Kilgore Unit (s) 417539500 (continued) 42-401-056612-0BN Doris C. Rea Atlantic Richfield 9-16-97 2050 140 Company 42-401-056612-0BO Don R. Lewis Atlantic Richfield 10-29-97 2046 8 Company 42-401-056612-0BP Darcus Palmer Atlantic Richfield 11-7-97 2044 787 Company 42-401-056612-0BQ Leo Scull, Jr. Atlantic Richfield 9-23-97 2043 595 Company FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- East Texas Field 42-401-056612-0BM A tract of land out of the Daniel Mayfield A (s) Clark Survey, Rusk County, Texas, 415035000 containing 10 acres more or less, and more particularly described South Kilgore Unit (s) in that certain Oil and Gas Lease 417539500 dated September 16, 1997, (continued) recorded in Volume 2050, Page 129, Official Public Records, Rusk County, Texas. 42-401-056612-0BN A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 10 acres more or less, and more particularly described in that certain Oil and Gas Lease dated September 16, 1997, recorded in Volume 2050, Page 140, Official Public Records, Rusk County, Texas. 42-401-056612-0BO A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 142.0 acres more or less, and more particularly described in that certain Oil and Gas Lease dated October 29, 1997, recorded in Volume 2046, Page 8, Official Public Records, Rusk County, Texas. 42-401-056612-0BP A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 11.07 acres more or less, and more particularly described in that certain Oil and Gas Lease dated November 7, 1997, recorded in Volume 2044, Page 787, Official Public Records, Rusk County, Texas. 42-401-056612-0BQ A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 108.66 acres more or less, and more particularly described in that certain Oil and Gas Lease dated September 23, 1997, recorded in Volume 2043, Page 595, Official Public Records, Rusk County, Texas.
Page 83 of 165 110
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-056612-0BR Lois Lorine Gault Atlantic Richfield 9-15-97 2040 596 Mayfield A (s) Deborde Company 415035000 South Kilgore Unit (s) 417539500 (continued) 42-401-056612-0BS Davis Duke Gault Atlantic Richfield 10-23-97 2044 789 Company 42-401-056612-0BT Kathryn Bishop Atlantic Richfield 10-22-97 2042 822 Company 42-401-056612-0BU Eugene M. Massad and Atlantic Richfield 10-22-97 2044 784 Edmond M. Massad, Company Trustee 42-401-056612-0BV Genevieve Day Fletcher Atlantic Richfield 11-19-97 2056 463 Company FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- East Texas Field 42-401-056612-0BR A tract of land out of the Daniel Mayfield A (s) Clark Survey, Rusk County, Texas, 415035000 containing 107 acres more or less, and more particularly South Kilgore Unit (s) described in that certain Oil and 417539500 Gas Lease dated September 15, (continued) 1997, recorded in Volume 2040, Page 596, Official Public Records, Rusk County, Texas. 42-401-056612-0BS A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 107 acres more or less, and more particularly described in that certain Oil and Gas Lease dated October 23, 1997, recorded in Volume 2044, Page 789, Official Public Records, Rusk County, Texas. 42-401-056612-0BT A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 100.56 acres more or less, and more particularly described in that certain Oil and Gas Lease dated October 22, 1997, recorded in Volume 2042, Page 822, Official Public Records, Rusk County, Texas. 42-401-056612-0BU A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 100.56 acres more or less, and more particularly described in that certain Oil and Gas Lease dated October 22, 1997, recorded in Volume 2044, Page 784, Official Public Records, Rusk County, Texas. 42-401-056612-0BV A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 28.0 acres more or less, and more particularly described in that certain Oil and Gas Lease dated November 19, 1997, recorded in Volume 2056, Page 463, Official Public Records, Rusk County, Texas.
Page 84 of 165 111
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-056612-0BW James Depreist Atlantic Richfield 11-19-97 2056 461 Mayfield A (s) Company 415035000 South Kilgore Unit (s) 417539500 (continued) 42-401-056612-0BX Retha Fisher, Atlantic Richfield 11-19-97 2047 439 Individually and as Company Independent Executrix 42-401-056612-0BY Lenora Sneed Oil Co. Atlantic Richfield 11-22-97 2047 442 Company 42-401-056612-0BZ Choctaw Energy Ltd. Atlantic Richfield 5-15-98 2078 784 Partners Company FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- East Texas Field 42-401-056612-0BW A tract of land out of the Daniel Mayfield A (s) Clark Survey, Rusk County, Texas, 415035000 containing 28.0 acres more or less, and more particularly South Kilgore Unit (s) described in that certain Oil and 417539500 Gas Lease dated November 19, (continued) 1997, recorded in Volume 2056, Page 461, Official Public Records, Rusk County, Texas. 42-401-056612-0BX A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 28.0 acres more or less, and more particularly described in that certain Oil and Gas Lease dated November 19, 1997, recorded in Volume 2047, Page 439, Official Public Records, Rusk County, Texas. 42-401-056612-0BY A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 100.56 acres more or less, and more particularly described in that certain Oil and Gas Lease dated November 22, 1997, recorded in Volume 2047, Page 442, Official Public Records, Rusk County, Texas. 42-401-056612-0BZ A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 105.57 acres more or less, and more particularly described in that certain Oil and Gas Lease dated May 15, 1998, recorded in Volume 2078, Page 784, Official Public Records, Rusk County, Texas. Only insofar as said lease covers the rights from the surface to the Base of the Woodbine formation.
Page 85 of 165 112
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-056612-0CA George W. Dozier Atlantic Richfield 10-31-97 2081 590 Mayfield A (s) Company 415035000 South Kilgore Unit (s) 417539500 (continued) 42-401-056612-0CB Betty Jean Smith Atlantic Richfield 5-26-98 2081 624 Company 42-401-056612-0CC Louise Adelman Atlantic Richfield 5-21-98 2081 575 Company 42-401-056612-0CD Beverly Heller Atlantic Richfield 5-21-98 2081 595 Company 42-401-056612-0CE Kathleen Rasanky Atlantic Richfield 5-21-98 2081 614 Company FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- East Texas Field 42-401-056612-0CA A tract of land out of the Daniel Mayfield A (s) Clark Survey, A-162, Rusk County, 415035000 Texas, containing 142.0 acres more or less, and more South Kilgore Unit (s) particularly described in that 417539500 certain Oil and Gas Lease dated (continued) October 31, 1997, recorded in Volume 2081, Page 590, Official Public Records, Rusk County, Texas. 42-401-056612-0CB A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 97 acres more or less, and more particularly described in that certain Oil and Gas Lease dated May 26, 1998, recorded in Volume 2081, Page 624, Official Public Records, Rusk County, Texas. 42-401-056612-0CC A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 35 acres more or less, and more particularly described in that certain Oil and Gas Lease dated May 21, 1998, recorded in Volume 2081, Page 575, Official Public Records, Rusk County, Texas. 42-401-056612-0CD A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 35 acres more or less, and more particularly described in that certain Oil and Gas Lease dated May 21, 1998, recorded in Volume 2081, Page 595, Official Public Records, Rusk County, Texas. 42-401-056612-0CE A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 35 acres more or less, and more particularly described in that certain Oil and Gas Lease dated May 21, 1998, recorded in Volume 2081, Page 614, Official Public Records, Rusk County, Texas.
Page 86 of 165 113
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-056612-0CF Lamar Mayfield Atlantic Richfield 11-3-97 2081 569 Mayfield A (s) Company 415035000 South Kilgore Unit (s) 417539500 (continued) 42-401-056612-0CG Jo Evelyn Simon, et al Atlantic Richfield 11-3-97 2081 566 Company 42-401-056612-0CH Ruth D. Sandifer Atlantic Richfield 5-20-98 2081 620 Company 42-401-056612-0CI Frank Hudson, Receiver Atlantic Richfield 8-7-98 2087 728 Company FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- East Texas Field 42-401-056612-0CF Two tracts of land out of the Mayfield A (s) Daniel Clark Survey, A-162, Rusk 415035000 County, Texas, containing 45 acres more or less, and more South Kilgore Unit (s) particularly described in that 417539500 certain Oil and Gas Lease dated (continued) November 3, 1997, recorded in Volume 2081, Page 569, Official Public Records, Rusk County, Texas. 42-401-056612-0CG Two tracts of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 45 acres more or less, and more particularly described in that certain Oil and Gas Lease dated November 3, 1997, recorded in Volume 2081, Page 566, Official Public Records, Rusk County, Texas. 42-401-056612-0CH Two tracts of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 45 acres more or less, and more particularly described in that certain Oil and Gas Lease dated May 20, 1998, recorded in Volume 2081, Page 620, Official Public Records, Rusk County, Texas. 42-401-056612-0CI A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 139.89 acres more or less, and more particularly described in that certain Oil and Gas Lease dated August 7, 1998, recorded in Volume 2087, Page 728, Official Public Records, Rusk County, Texas.
Page 87 of 165 114
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-056615-00A Betty Jo Peterson Bargo Energy Company 10-24-94 1889 277 Mayfield, S. E. 415040600 100.0% WI 81.25% NRI South Kilgore Unit 417539500 42-401-056615-00B H. B. Pyle Atlantic Richfield 9-1-97 2042 493 Company FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- East Texas Field 42-401-056615-00A A tract of land out of the Daniel AR-105875 Mayfield, S. E. Clark Survey, Rusk County, Texas, South Kilgore Unit and Unit Operating 415040600 containing 33.4 acres more or Agreement dated effective May 1, 1997, 100.0% WI less, and more particularly Atlantic Richfield Company, Operator. (s) 81.25% NRI described in that certain Oil and Gas Lease dated October 24, 1994, AR-105583 South Kilgore Unit recorded in Volume 1889, Page Longview Gas Plant Gas Purchase Contract 417539500 277, Deed Records, Rusk County, dated November 1, 1997 by and between ARCO Texas. Permian, Seller, and ARCO Permian, Buyer, amended August 25, 1998. (s/d) ONLY INSOFAR AS LEASE COVERS RIGHTS FROM THE SURFACE TO THE Private Radio License from Federal BASE OF THE WOODBINE FORMATION. Communications Commission to ARCO Communications, Inc., dated December 16, 42-401-056615-00B A tract of land out of the Daniel 1992, File No. 0000000319451, Call Sign Clark Survey, Rusk County, Texas, KNEP883, Frequency 154.47875 MHZ containing 33.4 acres more or less, and more particularly described in that certain Oil and Gas Lease dated September 1, 1997, recorded in Volume 2042, Page 493, Official Public Records, Rusk County, Texas.
Page 88 of 165 115
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-056615-00C Betty Springer Reeds Atlantic Richfield 8-15-96 1968 663 Mayfield, S. E. Company 415040600 South Kilgore Unit 417539500 (continued) 42-401-056615-00F Bettye V. Gray Bargo Energy Company 9-21-94 1910 608 42-401-056615-00G Rita Fay Garrett Bargo Energy Company 4-26-95 1913 821 42-401-056615-00H James W. Palmer Bargo Energy Company 8-29-94 1889 273 42-401-056615-00I Anita S. Anderson Atlantic Richfield 7-15-98 2084 634 Company FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- East Texas Field 42-401-056615-00C A tract of land out of the Daniel Mayfield, S. E. Clark Survey, Rusk County, Texas, 415040600 containing 33.4 acres more or less, and more particularly South Kilgore Unit described in that certain Oil and 417539500 Gas Lease dated August 15, 1996, (continued) recorded in Volume 1968, Page 663, Official Public Records, Rusk County, Texas. (ALL DEPTHS) 42-401-056615-00F A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 33.4 acres more or less, and more particularly described in that certain Oil and Gas Lease dated September 21, 1994, recorded in Volume 1910, Page 608, Official Public Records, Rusk County, Texas. 42-401-056615-00G A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 33.4 acres more or less, and more particularly described in that certain Oil and Gas Lease dated April 26, 1995, recorded in Volume 1913, Page 821, Official Public Records, Rusk County, Texas. 42-401-056615-00H A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 33.4 acres more or less, and more particularly described in that certain Oil and Gas Lease dated August 29, 1994, recorded in Volume 1889, Page 273, Official Public Records, Rusk County, Texas. 42-401-056615-00I A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 33.21 acres more or less, and more particularly described in that certain Oil and Gas Lease dated July 15, 1998, recorded in Volume 2084, Page 634, Official Public Records, Rusk County, Texas. ONLY INSOFAR AS LEASES COVER RIGHTS FROM THE SURFACE TO THE BASE OF THE WOODBINE FORMATION.
Page 89 of 165 116
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-056615-00J Roy T. Anderson Atlantic Richfield 7-15-98 2084 637 Mayfield, S. E. Company 415040600 South Kilgore Unit 417539500 (continued) 42-401-056615-00K Mary Bell Cherry Steve J. Hughes 6-1-93 1871 642 42-401-056615-00L A. Roland Fisher Steve J. Hughes 6-10-94 1871 644 42-401-056615-00M Octavious Fisher Steve J. Hughes 6-1-94 1871 648 42-401-056615-00N James Depreist, sole Steve J. Hughes 12-22-93 1918 491 heir of Orphus Fisher FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- East Texas Field 42-401-056615-00J A tract of land out of the Daniel Mayfield, S. E. Clark Survey, Rusk County, Texas, 415040600 containing 33.21 acres more or less, and more particularly South Kilgore Unit described in that certain Oil and 417539500 Gas Lease dated July 15, 1998, (continued) recorded in Volume 2084, Page 637, Official Public Records, Rusk County, Texas. (ALL DEPTHS) 42-401-056615-00K A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 33.4 acres more or less, and more particularly described in that certain Oil and Gas Lease dated June 1, 1993, recorded in Volume 1871, Page 642, Official Public Records, Rusk County, Texas. 42-401-056615-00L A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 33.4 acres more or less, and more particularly described in that certain Oil and Gas Lease dated June 10, 1994, recorded in Volume 1871, Page 644, Official Public Records, Rusk County, Texas. 42-401-056615-00M A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 33.4 acres more or less, and more particularly described in that certain Oil and Gas Lease dated June 1, 1994, recorded in Volume 1871, Page 648, Official Public Records, Rusk County, Texas. 42-401-056615-00N A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 33.4 acres more or less, and more particularly described in that certain Oil and Gas Lease dated December 22, 1993, recorded in Volume 1918, Page 491, Official Public Records, Rusk County, Texas. ONLY INSOFAR AS LEASES COVER RIGHTS FROM THE SURFACE TO THE BASE OF THE WOODBINE FORMATION.
Page 90 of 165 117
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-056615-00O David S. Meredith, III Steve J. Hughes 6-1-93 1871 660 Mayfield, S. E. 415040600 South Kilgore Unit 417539500 (continued) 42-401-056615-00P Henry McGaughty Steve J. Hughes 6-1-93 1871 662 Meredith 42-401-056615-00Q Will Gordon Meredith Steve J. Hughes 6-1-93 1871 664 42-401-056615-00R Charles B. Ogden, III, Steve J. Hughes 6-1-93 1871 678 Individually and as Agent for Donald W. Driboll, et al 42-401-056615-00S Beverly S. Yocum Steve J. Hughes 7-12-93 1871 686 FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- East Texas Field 42-401-056615-00O A tract of land out of the Daniel Mayfield, S. E. Clark Survey, Rusk County, Texas, 415040600 containing 33.4 acres more or less, and more particularly South Kilgore Unit described in that certain Oil and 417539500 Gas Lease dated June 1, 1993, (continued) recorded in Volume 1871, Page 660, Official Public Records, Rusk County, Texas. 42-401-056615-00P A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 33.4 acres more or less, and more particularly described in that certain Oil and Gas Lease dated June 1, 1993, recorded in Volume 1871, Page 662, Official Public Records, Rusk County, Texas. 42-401-056615-00Q A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 33.4 acres more or less, and more particularly described in that certain Oil and Gas Lease dated June 1, 1993, recorded in Volume 1871, Page 664, Official Public Records, Rusk County, Texas. 42-401-056615-00R A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 33.4 acres more or less, and more particularly described in that certain Oil and Gas Lease dated June 1, 1993, recorded in Volume 1871, Page 678, Official Public Records, Rusk County, Texas. 42-401-056615-00S A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 33.4 acres more or less, and more particularly described in that certain Oil and Gas Lease dated July 12, 1993, recorded in Volume 1871, Page 686, Official Public Records, Rusk County, Texas. ONLY INSOFAR AS LEASES COVER RIGHTS FROM THE SURFACE TO THE BASE OF THE WOODBINE FORMATION.
Page 91 of 165 118
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-056615-00T Jerry Powell and Bargo Energy Company 6-29-93 1871 682 Mayfield, S. E. Fannie Fletcher 415040600 South Kilgore Unit 417539500 (continued) 42-401-056615-00U Symonia Mayfield Steve J. Hughes 6-1-93 1871 680 Palmer 42-401-056615-00V Mrs. Jarrell Garzonzik Atlantic Richfield 3-1-97 2019 710 Company 42-401-056615-00W Liberty Bank and Atlantic Richfield 9-27-96 1997 12 Trust Company of Company Tulsa, National Association Trustee of the M. P. Springer B#3338 Trust 42-401-056615-00X Boatmen's Trust Atlantic Richfield 9-30-96 1997 7 Company of Arkansas, Company Agent for Mann Heirs FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- East Texas Field 42-401-056615-00T A tract of land out of the Daniel Mayfield, S. E. Clark Survey, Rusk County, Texas, 415040600 containing 33.4 acres more or less, and more particularly South Kilgore Unit described in that certain Oil and 417539500 Gas Lease dated July 29, 1993, (continued) recorded in Volume 1871, Page 682, Official Public Records, Rusk County, Texas 42-401-056615-00U A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 33.4 acres more or less, and more particularly described in that certain Oil and Gas Lease dated June 1, 1993, recorded in Volume 1871, Page 680, Official Public Records, Rusk County, Texas. ONLY INSOFAR AS LEASES COVER RIGHTS FROM THE SURFACE TO THE BASE OF THE WOODBINE FORMATION. 42-401-056615-00V A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 33.4 acres more or less, and more particularly described in that certain Oil and Gas Lease dated March 1, 1997, recorded in Volume 2019, Page 710, Official Public Records, Rusk County, Texas. (ALL DEPTHS) 42-401-056615-00W A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 33.4 acres more or less, and more particularly described in that certain Oil and Gas Lease dated September 27, 1996, recorded in Volume 1997, Page 12, Official Public Records, Rusk County, Texas. (ALL DEPTHS) 42-401-056615-00X A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 33.4 acres more or less, and more particularly described in that certain Oil and Gas Lease dated September 30, 1996, recorded in Volume 1997, Page 7, Official Public Records, Rusk County, Texas. (ALL DEPTHS)
Page 92 of 165 119
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-056615-00Y Barbara Palmer, Atlantic Richfield 10-29-96 2009 575 Mayfield, S. E. Widow, et al Company 415040600 South Kilgore Unit 417539500 (continued) 42-401-056615-00Z Carlton Palmer Atlantic Richfield 11-7-97 2046 10 Company 42-401-056615-0AA Carl Bean, Jr. Atlantic Richfield 10-30-97 2045 181 Company 42-401-056615-0AB Betty Springer Reeds Atlantic Richfield 11-4-97 2046 6 Revocable Trust Company 42-401-056615-0AC Melvin Palmer Atlantic Richfield 11-20-97 2056 466 Company FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- East Texas Field 42-401-056615-00Y A tract of land out of the Daniel Mayfield, S. E. Clark Survey, Rusk County, Texas, 415040600 containing 33.4 acres more or less, and more particularly South Kilgore Unit described in that certain Oil and 417539500 Gas Lease dated October 29, 1996, (90continued) recorded in Volume 2009, Page 575, Official Public Records, Rusk County, Texas. 42-401-056615-00Z A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 33.4 acres more or less, and more particularly described in that certain Oil and Gas Lease dated November 7, 1997, recorded in Volume 2046, Page 10, Official Public Records, Rusk County, Texas. 42-401-056615-0AA A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 33.4 acres more or less, and more particularly described in that certain Oil and Gas Lease dated October 30, 1997, recorded in Volume 2045, Page 181, Official Public Records, Rusk County, Texas. 42-401-056615-0AB A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 33.4 acres more or less, and more particularly described in that certain Oil and Gas Lease dated November 4, 1997, recorded in Volume 2046, Page 6, Official Public Records, Rusk County, Texas. 42-401-056615-0AC A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 33.4 acres more or less, and more particularly described in that certain Oil and Gas Lease dated November 20, 1997, recorded in Volume 2056, Page 466, Official Public Records, Rusk County, Texas.
Page 93 of 165 120
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-056615-0AD Eva Mayfield Baham Atlantic Richfield 11-17-97 2056 458 Mayfield, S. E. Company 415040600 South Kilgore Unit 417539500 (continued) 42-401-056615-0AE Ricky R. Dixon Atlantic Richfield 11-11-97 2052 849 Company 42-401-056615-0AF Darcus Palmer Atlantic Richfield 11-7-97 2044 787 Company - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-000863-000 James Owen Argo Royalty Company 8-16-32 225 85 R. G. Mason (16) (Mineral Deed) 410763200 1.5625% RI FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- East Texas Field 42-401-056615-0AD A tract of land out of the Daniel Mayfield, S. E. Clark Survey, Rusk County, Texas, 415040600 containing 33.4 acres more or less, and more particularly South Kilgore Unit described in that certain Oil and 417539500 Gas Lease dated November 17, (continued) 1997, recorded in Volume 2056, Page 458, Official Public Records, Rusk County, Texas. 42-401-056615-0AE A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 33.4 acres more or less, and more particularly described in that certain Oil and Gas Lease dated November 11, 1997, recorded in Volume 2052, Page 849, Official Public Records, Rusk County, Texas. 42-401-056615-0AF A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 11.07 acres more or less, and more particularly described in that certain Oil and Gas Lease dated November 7, 1997, recorded in Volume 2044, Page 787, Official Public Records, Rusk County, Texas. - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- East Texas Field 42-401-000863-000 A tract containing 104.4 acres of Oil, Gas and Mineral Lease dated October 29, R. G. Mason (16) (Mineral Deed) land out of the Juan B. Cadena 1929, recorded in Volume 145, Page 313, Deed 410763200 League, Rusk County, Texas, and Records, Rusk County, Texas. 1.5625% RI more particularly described in that certain Mineral Deed dated August 16, 1932, recorded in Volume 225, Page 85, Deed Records, Rusk County, Texas.
Page 94 of 165 121
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-056619-00A C. F. Jones, et al P. A. Wiley 11-5-34 257 266 Rosa Jones (s) 415687100 100% WI 87.50% NRI Rosa Jones (W&B) (s) 419999500 100% WI 42-401-056619-00B Victor A. Smith, et al R. W. Ingram 11-28-34 257 403 87.5% NRI South Kilgore Unit (s) 417539500 42-401-056619-00C Bert L. Laubenheim P. A. Wiley 9-26-34 255 544 42-401-056619-00D G. E. Fagg P. A. Wiley 9-26-34 255 542 42-401-056619-00E E. L. Clay P. A. Wiley 9-26-34 255 539 FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- East Texas Field 42-401-056619-00A A tract of land out of the Daniel AR-105213 Rosa Jones (s) Clark Survey, Rusk County, Texas, Acreage Exchange Agreement dated effective 415687100 containing 33.2 acres more or April 1, 1995 by and between Paloma Partners, 100% WI less, and more particularly Ltd. and Atlantic Richfield Company. (s) 87.50% NRI described in that certain Oil and Gas Lease dated November 5, 1934, AR-105265-001 Rosa Jones (W&B) (s) recorded in Volume 257, Page 266, Crude Oil Buy/Sell Contract dated effective 419999500 Deed Records, Rusk County, Texas. December 1, 1995 by and between ARCO Permian 100% WI and Sun Company, Inc. (s) 87.5% NRI 42-401-056619-00B A tract of land out of the Daniel Clark Survey, Rusk County, Texas, AR-105265-000 South Kilgore Unit (s) containing 33.2 acres more or Purchase and Sale Agreement dated October 6, 417539500 less, and more particularly 1995 by and between East Texas Gathering described in that certain Oil and Company, Atlantic Richfield Company, Sun Pipe Gas Lease dated November 28, Line Company and Sun Company, Inc. (s) 1934, recorded in Volume 257, Page 403, Deed Records, Rusk AR-105875 County, Texas. South Kilgore Unit and Unit Operating Agreement dated effective May 1, 1997, 42-401-056619-00C A tract of land out of the Daniel Atlantic Richfield Company, Operator. (s) Clark Survey, Rusk County, Texas, containing 33.2 acres more or AR-105583 less, and more particularly Longview Gas Plant Gas Purchase Contract described in that certain Oil and dated November 1, 1997 by and between ARCO Gas Lease dated September 26, Permian, Seller, and ARCO Permian, Buyer, 1934, recorded in Volume 255, amended August 25, 1998. (s/d) Page 544, Deed Records, Rusk County, Texas. Private Radio License from Federal Communications Commission to ARCO 42-401-056619-00D A tract of land out of the Daniel Communications, Inc., dated December 16, Clark Survey, Rusk County, Texas, 1992, File No. 0000000319451, Call Sign containing 33.2 acres more or KNEP883, Frequency 154.47875 MHZ less, and more particularly described in that certain Oil and Gas Lease dated September 26, 1934, recorded in Volume 255, Page 542, Deed Records, Rusk County, Texas. 42-401-056619-00E A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 33.2 acres more or less, and more particularly described in that certain Oil and Gas Lease dated September 26, 1934, recorded in Volume 255, Page 539, Deed Records, Rusk County, Texas. ONLY INSOFAR AS LEASES COVER RIGHTS FROM THE SURFACE TO THE BASE OF THE WOODBINE FORMATION.
Page 95 of 165 122
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-056619-00F Falcon Company P. A. Wiley 9-26-34 255 540 Rosa Jones (s) 415687100 Rosa Jones (W&B) (s) 419999500 South Kilgore Unit (s) 417539500 42-401-056619-00G C. F. Jones, Guardian P. A. Wiley 11-26-34 258 511 (continued) of the Estate of Rosa Jones, NCM FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- East Texas Field 42-401-056619-00F A tract of land out of the Daniel Rosa Jones (s) Clark Survey, Rusk County, Texas, 415687100 containing 33.2 acres more or less, and more particularly Rosa Jones (W&B) (s) described in that certain Oil and 419999500 Gas Lease dated September 26, 1934, recorded in Volume 255, South Kilgore Unit (s) Page 540, Deed Records, Rusk 417539500 County, Texas. (continued) 42-401-056619-00G A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 33.2 acres more or less, and more particularly described in that certain Oil and Gas Lease dated November 26, 1934, recorded in Volume 258, Page 511, Deed Records, Rusk County, Texas. ONLY INSOFAR AS LEASES COVER RIGHTS FROM THE SURFACE TO THE BASE OF THE WOODBINE FORMATION.
Page 96 of 165 123
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-056621-00A Rufus Jones, Jr., et Roy H. Laird, et al 9-11-30 151 213 Rufus Jones "A" (s) ux 415959400 100% WI 68.5625% NRI Rufus Jones "B" (s) 416959000 100% WI 42-401-056621-00B Opal Gene Givens, J. H. Merritt 9-11-33 237 556 68.5625% NRI feme sole and T. J. Givens R. Jones/Bond-Jones (s) 418860800 100% WI 87.5% NRI R. Jones (Phillips) (s) 42-401-056621-00C Sun Oil Company Warner-Quinlan 9-10-34 256 407 411253900 Company of Texas 100% WI 63.5981% NRI South Kilgore Unit (s) 417539500 97.659398% WI 83.460188% NRI 42-401-056621-00D Howard Crenshaw, et ux R. E. Moore 6-18-34 256 411 42-401-056621-00E W. H. Grier & A. A. R. E. Moore 6-18-34 256 413 Biggs, et al FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- East Texas Field 42-401-056621-00A A tract of land out of the Daniel AR-105414-001 Rufus Jones "A" (s) Clark Survey, Rusk County, Texas, Operating Agreement dated effective June 1, 415959400 containing 10.0 acres more or 1980 by and between Gibson Drilling Company, 100% WI less, and more particularly Operator, and James H. Merritt, 68.5625% NRI described in that certain Oil and Non-Operator. (s) Gas Lease dated September 11, Rufus Jones "B" (s) 1930, recorded in Volume 151, Private Radio License from Federal 416959000 Page 213, Deed Records, Rusk Communications Commission to ARCO 100% WI County, Texas. Communications, Inc., dated December 16, 68.5625% NRI 1992, File No. 0000000319451, Call Sign 42-401-056621-00B A tract of land out of the Daniel KNEP883, Frequency 154.47875 MHZ R. Jones/Bond-Jones (s) Clark Survey, Rusk County, Texas, 418860800 containing 25 acres more or less, AR-105213 100% WI and more particularly described Acreage Exchange Agreement dated effective 87.5% NRI in that certain Oil and Gas Lease April 1, 1995 by and between Paloma Partners, dated September 11, 1933, Ltd. and Atlantic Richfield Company. (s) R. Jones (Phillips) (s) recorded in Volume 237, Page 556 411253900 of Deed Records, Rusk County, AR-105265-000 100% WI Texas. Purchase and Sale Agreement dated October 6, 63.5981% NRI 1995 by and between East Texas Gathering 42-401-056621-00C A tract of land out of the Daniel Company, Atlantic Richfield Company, Sun Pipe South Kilgore Unit (s) Clark Survey, Rusk County, Texas, Line Company and Sun Company, Inc. (s) 417539500 containing 25 acres more or less, 97.659398% WI and more particularly described AR-105265-001 83.460188% NRI in that certain Oil and Gas Lease Crude Oil Buy/Sell Contract dated effective dated September 10, 1934, December 1, 1995 by and between ARCO Permian recorded in Volume 256, Page 407, and Sun Company, Inc. (s) Deed Records, Rusk County, Texas. AR-105875 42-401-056621-00D A tract of land out of the Daniel South Kilgore Unit and Unit Operating Clark Survey, Rusk County, Texas, Agreement dated effective May 1, 1997, containing 25 acres more or less, Atlantic Richfield Company, Operator. (s) and more particularly described (Except the Rufus Jones "A") in that certain Oil and Gas Lease dated June 18, 1934, recorded in AR-105583 Volume 256, Page 411, Deed Longview Gas Plant Gas Purchase Contract Records, Rusk County, Texas. dated November 1, 1997 by and between ARCO Permian, Seller, and ARCO Permian, Buyer. 42-401-056621-00E A tract of land out of the Daniel (s/d) Clark Survey, Rusk County, Texas, containing 25 acres more or less, AR-105584 and more particularly described Longview Gas Plant Gas Purchase Contract in that certain Oil and Gas Lease dated November 1, 1997 by and between ARCO dated June 18, 1934, recorded in Permian, Seller, and ARCO Permian, Buyer. (s) Volume 256, Page 413, Deed (Rufus Jones "A") Records, Rusk County, Texas. ONLY INSOFAR AS LEASES COVER RIGHTS FROM THE SURFACE TO THE BASE OF THE WOODBINE FORMATION.
Page 97 of 165 124
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-056621-00F M. S. Thetford R. E. Moore 9-1-34 253 481 Rufus Jones "A" (s) 415959400 Rufus Jones "B" (s) 416959000 R. Jones/Bond-Jones (s) 418860800 42-401-056621-00G J. H. Merritt R. E. Moore 9-8-34 253 483 R. Jones (Phillips) (s) 411253900 South Kilgore Unit (s) 417539500 (continued) 42-401-056621-00H May Greve, et vir R. E. Moore 9-1-34 253 484 42-401-056621-00I T. J. Strahan R. E. Moore 9-1-34 253 486 42-401-056621-00J Mary Jane Fischer Atlantic Richfield 5-1-96 2011 853 Rosenbaum Company FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- East Texas Field 42-401-056621-00F A tract of land out of the Daniel Rufus Jones "A" (s) Clark Survey, Rusk County, Texas, 415959400 containing 25 acres more or less, and more particularly described Rufus Jones "B" (s) in that certain Oil and Gas Lease 416959000 dated September 1, 1934, recorded in Volume 253, Page 481, Deed Records, Rusk County, Texas. R. Jones/Bond-Jones (s) 418860800 42-401-056621-00G A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 25 acres more or less, and more particularly described R. Jones (Phillips) (s) in that certain Oil and Gas Lease 411253900 dated September 8, 1934, recorded in Volume 253, Page 483, Deed South Kilgore Unit (s) Records, Rusk County, Texas. 417539500 (continued) 42-401-056621-00H A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 25 acres more or less, and more particularly described in that certain Oil and Gas Lease dated September 1, 1934, recorded in Volume 253, Page 484, Deed Records, Rusk County, Texas. 42-401-056621-00I A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 25 acres more or less, and more particularly described in that certain Oil and Gas Lease dated September 1, 1934, recorded in Volume 253, Page 486, Deed Records, Rusk County, Texas. 42-401-056621-00J A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 1.7 acres more or less, and more particularly described in that certain Oil, Gas and Mineral Lease dated May 1, 1996, recorded in Volume 2011, Page 853, Official Public Records, Rusk County, Texas. ONLY INSOFAR AS LEASES COVER RIGHTS FROM THE SURFACE TO THE BASE OF THE WOODBINE FORMATION.
Page 98 of 165 125
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-056621-00K Joseph M. Wolfe Atlantic Richfield 5-1-96 2011 868 Rufus Jones "A" (s) Company 415959400 Rufus Jones "B" (s) 416959000 R. Jones/Bond-Jones (s) 418860800 42-401-056621-00L Don Warren Atlantic Richfield 3-15-97 2003 754 R. Jones (Phillips) (s) Company 411253900 South Kilgore Unit (s) 417539500 (continued) 42-401-056621-00M Mary L. Williams Atlantic Richfield 2-15-97 2009 757 Company 42-401-056621-00N Joyce Kennedy, Trustee Atlantic Richfield 3-15-97 2009 751 Company 42-401-056621-00O Bernice Koret Atlantic Richfield 2-17-97 2011 839 Company FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- East Texas Field 42-401-056621-00K A tract of land out of the Daniel Rufus Jones "A" (s) Clark Survey, A-162, Rusk County, 415959400 Texas, containing 1.7 acres more or less, and more particularly Rufus Jones "B" (s) described in that certain Oil, 416959000 Gas and Mineral Lease dated May 1, 1996, recorded in Volume 2011, R. Jones/Bond-Jones (s) Page 868, Official Public 418860800 Records, Rusk County, Texas. R. Jones (Phillips) (s) 42-401-056621-00L A tract of land out of the Daniel 411253900 Clark Survey, A-162, Rusk County, Texas, containing 1.7 acres more South Kilgore Unit (s) or less, and more particularly 417539500 described in that certain Oil, (continued) Gas and Mineral Lease dated March 15, 1997, recorded in Volume 2003, Page 754, Official Public Records, Rusk County, Texas. 42-401-056621-00M A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 1.7 acres more or less, and more particularly described in that certain Oil, Gas and Mineral Lease dated February 15, 1997, recorded in Volume 2009, Page 757, Official Public Records, Rusk County, Texas. 42-401-056621-00N A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 1.7 acres more or less, and more particularly described in that certain Oil, Gas and Mineral Lease dated March 15, 1997, recorded in Volume 2009, Page 751, Official Public Records, Rusk County, Texas. 42-401-056621-00O A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 1.7 acres more or less, and more particularly described in that certain Oil, Gas and Mineral Lease dated February 17, 1997, recorded in Volume 2011, Page 839, Official Public Records, Rusk County, Texas.
Page 99 of 165 126
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-056621-00P Foster T. Bean Atlantic Richfield 3-15-97 2011 828 Rufus Jones "A" (s) Company 415959400 Rufus Jones "B" (s) 416959000 R. Jones/Bond-Jones (s) 418860800 42-401-056621-00Q Alfred S. Wolfe Atlantic Richfield 3-15-97 2011 865 R. Jones (Phillips) (s) Company 411253900 South Kilgore Unit (s) 417539500 (continued) 42-401-056621-00R Edwin N. Wolfe Atlantic Richfield 3-15-97 2011 862 Company 42-401-056621-00S Vera Marwil Remer Atlantic Richfield 3-15-97 2011 850 Company 42-401-056621-00T Doris Marwil Frost Atlantic Richfield 3-15-97 2011 836 Company FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- East Texas Field 42-401-056621-00P A tract of land out of the Daniel Rufus Jones "A" (s) Clark Survey, A-162, Rusk County, 415959400 Texas, containing 1.7 acres more or less, and more particularly Rufus Jones "B" (s) described in that certain Oil, 416959000 Gas and Mineral Lease dated March 15, 1997, recorded in Volume R. Jones/Bond-Jones (s) 2011, Page 828, Official Public 418860800 Records, Rusk County, Texas. R. Jones (Phillips) (s) 42-401-056621-00Q A tract of land out of the Daniel 411253900 Clark Survey, A-162, Rusk County, Texas, containing 1.7 acres more South Kilgore Unit (s) or less, and more particularly 417539500 described in that certain Oil, (continued) Gas and Mineral Lease dated March 15, 1997, recorded in Volume 2011, Page 865, Official Public Records, Rusk County, Texas. 42-401-056621-00R A tract of land out of the Daniel Clark Survey, A-162 Rusk County, Texas, containing 1.7 acres more or less, and more particularly described in that certain Oil, Gas and Mineral Lease dated March 15, 1997, recorded in Volume 2011, Page 862, Official Public Records, Rusk County, Texas. 42-401-056621-00S A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 1.7 acres more or less, and more particularly described in that certain Oil, Gas and Mineral Lease dated March 15, 1997, recorded in Volume 2011, Page 850, Official Public Records, Rusk County, Texas. 42-401-056621-00T A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 1.7 acres more or less, and more particularly described in that certain Oil, Gas and Mineral Lease dated March 15, 1997, recorded in Volume 2011, Page 836, Official Public Records, Rusk County, Texas.
Page 100 of 165 127
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-056621-00U Sean Wrather Atlantic Richfield 3-15-97 2011 859 Rufus Jones "A" (s) Company 415959400 Rufus Jones "B" (s) 416959000 R. Jones/Bond-Jones (s) 418860800 42-401-056621-00V Lamar Elder, Guardian Atlantic Richfield 3-15-97 2011 833 R. Jones (Phillips) (s) Company 411253900 South Kilgore Unit (s) 417539500 (continued) 42-401-056621-00W Iva Lee Sloan Atlantic Richfield 3-15-97 2011 856 Company 42-401-056621-00X Shirley Marwil Sanger Atlantic Richfield 3-15-97 2020 699 Company 42-401-056621-00Y Althea J. Pickett Atlantic Richfield 10-1-97 2042 486 Company FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- East Texas Field 42-401-056621-00U A tract of land out of the Daniel Rufus Jones "A" (s) Clark Survey, A-162, Rusk County, 415959400 Texas, containing 1.7 acres more or less, and more particularly Rufus Jones "B" (s) described in that certain Oil, 416959000 Gas and Mineral Lease dated March 15, 1997, recorded in Volume R. Jones/Bond-Jones (s) 2011, Page 859, Official Public 418860800 Records, Rusk County, Texas. R. Jones (Phillips) (s) 42-401-056621-00V A tract of land out of the Daniel 411253900 Clark Survey, A-162, Rusk County, Texas, containing 1.7 acres more South Kilgore Unit (s) or less, and more particularly 417539500 described in that certain Oil, (continued) Gas and Mineral Lease dated March 15, 1997, recorded in Volume 2011, Page 833, Official Public Records, Rusk County, Texas. 42-401-056621-00W A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 1.7 acres more or less, and more particularly described in that certain Oil, Gas and Mineral Lease dated March 15, 1997, recorded in Volume 2011, Page 856, Official Public Records, Rusk County, Texas. 42-401-056621-00X A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 1.7 acres more or less, and more particularly described in that certain Oil, Gas and Mineral Lease dated March 15, 1997, recorded in Volume 2020, Page 699, Official Public Records, Rusk County, Texas. 42-401-056621-00Y A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 1.7 acres more or less, and more particularly described in that certain Oil, Gas and Mineral Lease dated October 1, 1997, recorded in Volume 2042, Page 486, Official Public Records, Rusk County, Texas.
Page 101 of 165 128
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-056621-00Z Bettye Joyce Butts Atlantic Richfield 3-15-97 2052 786 Rufus Jones "A" (s) Turner Company 415959400 Rufus Jones "B" (s) 416959000 R. Jones/Bond-Jones (s) 418860800 42-401-056621-0AA Cozetta Butts Lamore, Atlantic Richfield 3-15-97 2052 784 R. Jones (Phillips) (s) Executrix Company 411253900 South Kilgore Unit (s) 417539500 (continued) 42-401-056621-0AB Jenny Marwil Hardy Atlantic Richfield 9-30-97 2057 847 Company 42-401-056621-0AC Earl Stanley Marwil, Atlantic Richfield 1-30-98 2057 853 Custodian Company 42-401-056621-0AD Ann Gibson Atlantic Richfield 1-30-98 2057 844 Company FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- East Texas Field 42-401-056621-00Z A tract of land out of the Daniel Rufus Jones "A" (s) Clark Survey, A-162, Rusk County, 415959400 Texas, containing 1.7 acres more or less, and more particularly Rufus Jones "B" (s) described in that certain Oil, 416959000 Gas and Mineral Lease dated March 15, 1997, recorded in Volume R. Jones/Bond-Jones (s) 2052, Page 786, Official Public 418860800 Records, Rusk County, Texas. R. Jones (Phillips) (s) 42-401-056621-0AA A tract of land out of the Daniel 411253900 Clark Survey, A-162, Rusk County, Texas, containing 1.7 acres more South Kilgore Unit (s) or less, and more particularly 417539500 described in that certain Oil, (continued) Gas and Mineral Lease dated March 15, 1997, recorded in Volume 2052, Page 784, Official Public Records, Rusk County, Texas. 42-401-056621-0AB A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 1.7 acres more or less, and more particularly described in that certain Oil, Gas and Mineral Lease dated September 30, 1997, recorded in Volume 2057, Page 847, Official Public Records, Rusk County, Texas. 42-401-056621-0AC A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 1.7 acres more or less, and more particularly described in that certain Oil and Gas Lease dated January 30, 1998, recorded in Volume 2057, Page 853, Official Public Records, Rusk County, Texas. 42-401-056621-0AD A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 1.7 acres more or less, and more particularly described in that certain Oil and Gas Lease dated January 30, 1998, recorded in Volume 2057, Page 844, Official Public Records, Rusk County, Texas.
Page 102 of 165 129
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-056621-0AE L. W. Sugar Limited Atlantic Richfield 1-30-98 2057 850 Rufus Jones "A" (s) Partnership Company 415959400 Rufus Jones "B" (s) 416959000 R. Jones/Bond-Jones (s) 418860800 42-401-056621-0AF Douglas Deutser Atlantic Richfield 1-30-98 2060 102 R. Jones (Phillips) (s) Company 411253900 South Kilgore Unit (s) 417539500 (continued) 42-401-056621-0AG Nelson Marwil, Atlantic Richfield 1-30-98 2060 401 Custodian Company 42-401-056621-0AH Angela Jones Burns Atlantic Richfield 10-1-97 2061 537 Company 42-401-056621-0AI Evelyn Yvonne Byrd Atlantic Richfield 3-21-98 2073 293 Company FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- East Texas Field 42-401-056621-0AE A tract of land out of the Daniel Rufus Jones "A" (s) Clark Survey, A-162, Rusk County, 415959400 Texas, containing 1.7 acres more or less, and more particularly Rufus Jones "B" (s) described in that certain Oil and 416959000 Gas Lease dated January 30, 1998, recorded in Volume 2057, Page R. Jones/Bond-Jones (s) 850, Official Public Records, 418860800 Rusk County, Texas. R. Jones (Phillips) (s) 42-401-056621-0AF A tract of land out of the Daniel 411253900 Clark Survey, A-162, Rusk County, Texas, containing 1.7 acres more South Kilgore Unit (s) or less, and more particularly 417539500 described in that certain Oil (continued) and Gas Lease dated January 30, 1998, recorded in Volume 2060, Page 102, Official Public Records, Rusk County, Texas. 42-401-056621-0AG A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 1.7 acres more or less, and more particularly described in that certain Oil and Gas Lease dated January 30, 1998, recorded in Volume 2060, Page 401, Official Public Records, Rusk County, Texas. 42-401-056621-0AH A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 1.7 acres more or less, and more particularly described in that certain Oil and Gas Lease dated October 1, 1997, recorded in Volume 2061, Page 537, Official Public Records, Rusk County, Texas. 42-401-056621-0AI A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 1.7 acres more or less, and more particularly described in that certain Oil and Gas Lease dated March 21, 1998, recorded in Volume 2073, Page 293, Official Public Records, Rusk County, Texas.
Page 103 of 165 130
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-056621-0AJ Rosalind J. Robinson, Atlantic Richfield 3-21-98 2073 296 Rufus Jones "A" (s) Individually and as Company 415959400 Independent Executrix Rufus Jones "B" (s) 416959000 R. Jones/Bond-Jones (s) 418860800 42-401-056621-0AK Janis P. LaGrone, et Atlantic Richfield 1-30-98 2077 524 R. Jones (Phillips) (s) al Company 411253900 South Kilgore Unit (s) 417539500 (continued) 42-401-056621-0AL Debra Barley Atlantic Richfield 1-30-98 2084 640 Company 42-401-056621-0AM Cozetta B. Lamore Atlantic Richfield 5-19-98 2084 643 Company 42-401-056621-0AN Sean Wrather Atlantic Richfield 4-6-98 2081 632 Company FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- East Texas Field 42-401-056621-0AJ A tract of land out of the Daniel Rufus Jones "A" (s) Clark Survey, A-162, Rusk County, 415959400 Texas, containing 1.7 acres more or less, and more particularly Rufus Jones "B" (s) described in that certain Oil and 416959000 Gas Lease dated March 21, 1998, recorded in Volume 2073, Page R. Jones/Bond-Jones (s) 296, Official Public Records, 418860800 Rusk County, Texas. R. Jones (Phillips) (s) 42-401-056621-0AK A tract of land out of the Daniel 411253900 Clark Survey, A-162, Rusk County, Texas, containing 1.7 acres more South Kilgore Unit (s) or less, and more particularly 417539500 described in that certain Oil and (continued) Gas Lease dated January 30, 1998, recorded in Volume 2077, Page 524, Official Public Records, Rusk County, Texas. 42-401-056621-0AL A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 1.7 acres more or less, and more particularly described in that certain Oil and Gas Lease dated January 30, 1998, recorded in Volume 2084, Page 640, Official Public Records, Rusk County, Texas. 42-401-056621-0AM A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 1.7 acres more or less, and more particularly described in that certain Oil and Gas Lease dated May 19, 1998, recorded in Volume 2084, Page 643, Official Public Records, Rusk County, Texas. 42-401-056621-0AN A tract of land out of the Daniel Clark Survey, Rusk County, Texas, containing 1.7 acres more or less, and more particularly described in that certain Oil and Gas Lease dated April 6, 1998, recorded in Volume 2081, Page 632, Official Public Records, Rusk County, Texas.
Page 104 of 165 131
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-056621-0AO Molly Wrather Dolle Atlantic Richfield 4-6-98 2081 571 Rufus Jones "A" (s) Company 415959400 Rufus Jones "B" (s) 416959000 R. Jones/Bond-Jones (s) 418860800 42-401-056621-0AP Beverly Allen Atlantic Richfield 5-26-98 2081 573 R. Jones (Phillips) (s) Company 411253900 South Kilgore Unit (s) 417539500 (continued) 42-401-056621-0AQ Mary Ann Butts Haywood Atlantic Richfield 5-19-98 2081 591 Company 42-401-056621-0AR Oran Bell Atlantic Richfield 5-19-98 2081 579 Company 42-401-056621-0AS Elois V. Montgomery Atlantic Richfield 5-7-98 2081 604 Company FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- East Texas Field 42-401-056621-0AO A tract of land out of the Daniel Rufus Jones "A" (s) Clark Survey, Rusk County, Texas, 415959400 containing 1.7 acres more or less, and more particularly Rufus Jones "B" (s) described in that certain Oil and 416959000 Gas Lease dated April 6, 1998, recorded in Volume 2081, Page R. Jones/Bond-Jones (s) 571, Official Public Records, 418860800 Rusk County, Texas. R. Jones (Phillips) (s) 42-401-056621-0AP A tract of land out of the Daniel 411253900 Clark Survey, Rusk County, Texas, containing 1.7 acres more or South Kilgore Unit (s) less, and more particularly 417539500 described in that certain Oil and (continued) Gas Lease dated May 26, 1998, recorded in Volume 2081, Page 573, Official Public Records, Rusk County, Texas. 42-401-056621-0AQ Two tracts of land out of the Daniel Clark Survey, Rusk County, Texas, containing 3.7 acres more or less, and more particularly described in that certain Oil and Gas Lease dated May 19, 1998, recorded in Volume 2081, Page 591, Official Public Records, Rusk County, Texas. 42-401-056621-0AR Two tracts of land out of the Daniel Clark Survey, Rusk County, Texas, containing 3.7 acres more or less, and more particularly described in that certain Oil and Gas Lease dated May 19, 1998, recorded in Volume 2081, Page 579, Official Public Records, Rusk County, Texas. 42-401-056621-0AS Two tracts of land out of the Daniel Clark Survey, Rusk County, Texas, containing 3.7 acres more or less, and more particularly described in that certain Oil and Gas Lease dated May 7, 1998, recorded in Volume 2081, Page 604, Official Public Records, Rusk County, Texas.
Page 105 of 165 132
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-056621-0AT Deanna J. Sigman Atlantic Richfield 8-15-98 ---- ----- Rufus Jones "A" (s) Company 415959400 Rufus Jones "B" (s) 416959000 R. Jones/Bond-Jones (s) 418860800 42-401-056621-0AU Alpha B. Snell Atlantic Richfield 6-4-98 2087 240 R. Jones (Phillips) (s) Company 411253900 South Kilgore Unit (s) 417539500 (continued) 42-401-056621-0AV Frank Hudson, Receiver Atlantic Richfield 8-7-98 2087 731 Company - --------------------------------------------------------------------------------------------------------------------------------- East Texas Field 42-401-000855-000 F. W. Merrick Argo Royalty Company 10-3-31 205 355 Schuyler (Mineral Deed) (188215 & 615) 410890600 3.1250% RI East Texas Field 42-401-000856-000 Schuyler"A" (Mineral Deed) (26-768,5101) 41089140 3.1250% RI East Texas Field 42-401-000857-000 Schuyler "B" (Mineral Deed) (26-769, 4970) 410892200 4.6875% RI FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- East Texas Field 42-401-056621-0AT A tract of land out of the Daniel Rufus Jones "A" (s) Clark Survey, A-162, Rusk County, 415959400 Texas, containing 1.7 acres more or less, and more particularly Rufus Jones "B" (s) described in that certain 416959000 unrecorded Oil and Gas Lease dated August 15, 1998 R. Jones/Bond-Jones (s) 418860800 R. Jones (Phillips) (s) 42-401-056621-0AU Two tracts of land out of the 411253900 Daniel Clark Survey, A-162, Rusk County, Texas, containing 3.7 South Kilgore Unit (s) acres more or less, and more 417539500 particularly described in that (continued) certain Oil and Gas Lease dated June 4, 1998, recorded in Volume 2087, Page 240, Official Public Records, Rusk County, Texas. 42-401-056621-0AV A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Oil and Gas Lease dated August 7, 1998, recorded in Volume 2087, Page 731, Official Public Records, Rusk County, Texas. - ----------------------------------------------------------------------------------------------------------------------------------- East Texas Field 42-401-000855-000 Two tracts of land out of the J. Oil, Gas and Mineral Lease dated July 21, Schuyler (Mineral Deed) B. Cadena Survey, Rusk County, 1930, recorded in Volume 148, Page 411, Deed (188215 & 615) Texas, consisting of a 92 acre Records, Rusk County, Texas. 410890600 tract of land and a 72 acre tract 3.1250% RI of land in Rusk County, Texas, and more particularly described East Texas Field 42-401-000856-000 in that certain Deed dated Schuyler"A" (Mineral Deed) October 3, 1931, recorded in (26-768,5101) Volume 205, Page 355, Deed 41089140 Records, Rusk County, Texas. 3.1250% RI East Texas Field 42-401-000857-000 Schuyler "B" (Mineral Deed) (26-769, 4970) 410892200 4.6875% RI
Page 106 of 165 133
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-056622-000 School District No. Roy F. Calvert 11-17-31 209 546 Starr-Bailey (s) 29, Trustees of 417897100 Leverett Chapel ISD 100% WI 87.50% NRI South Kilgore Unit (s) 417539500 97.659398% WI 83.460188% NRI FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- East Texas Field 42-401-056622-000 3 acres, more or less, out of the AR-105213 Starr-Bailey (s) Daniel Clark Survey A-162, Rusk Acreage Exchange Agreement dated effective 417897100 County, Texas, as more April 1, 1995 by and between Paloma Partners, 100% WI particularly described in that Ltd. and Atlantic Richfield Company. (s) 87.50% NRI certain Oil and Gas Lease dated November 17, 1931, recorded AR-105265-000 South Kilgore Unit (s) Volume 209, Page 546, Deed Purchase and Sale Agreement dated October 6, 417539500 Records, Rusk County, Texas 1995 by and between East Texas Gathering 97.659398% WI Company, Atlantic Richfield Company, Sun Pipe 83.460188% NRI ONLY INSOFAR AS LEASE COVERS THE Line Company and Sun Company, Inc. (s) RIGHTS FROM THE SURFACE TO THE BASE OF THE WOODBINE FORMATION. AR-105265-001 Crude Oil Buy/Sell Contract dated effective December 1, 1995 by and between ARCO Permian and Sun Company, Inc. (s) AR-105583 Longview Gas Plant Gas Purchase Contract dated November 1, 1997 by and between ARCO Permian, Seller, and ARCO Permian, Buyer, amended August 25, 1998. (s/d) AR-105875 South Kilgore Unit and Unit Operating Agreement dated effective May 1, 1997, Atlantic Richfield Company, Operator. (s) Private Radio License from Federal Communications Commission to ARCO Communications, Inc., dated December 16, 1992, File No. 0000000319451, Call Sign KNEP883, Frequency 154.47875 MHZ
Page 107 of 165 134
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-057091-00A Elizabeth Bowman Atlantic Richfield 12-30-97 2059 341 South Kilgore Unit (s) Company 417539500 97.659398% WI 83.460188% NRI Unit Tract 14 42-401-057091-00B F. T. Bean Atlantic Richfield 1-5-98 2059 343 Company 42-401-057091-00C Barbara Nell Breen Atlantic Richfield 12-30-97 2059 345 Company FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- East Texas Field 42-401-057091-00A A tract of land out of the Daniel AR-105875 South Kilgore Unit (s) Clark Survey, A-162, Rusk County, South Kilgore Unit and Unit Operating 417539500 Texas, containing 2.00 acres more Agreement dated effective May 1, 1997, 97.659398% WI or less, and more particularly Atlantic Richfield Company, Operator. (s) 83.460188% NRI described in that certain Oil and Gas Lease dated December 30, AR-105583 Unit Tract 14 1997, recorded in Volume 2059, Longview Gas Plant Gas Purchase Contract Page 341, Official Public dated November 1, 1997 by and between ARCO Records, Rusk County, Texas. Permian, Seller, and ARCO Permian, Buyer, amended August 25, 1998. (s/d) 42-401-057091-00B A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Private Radio License from Federal Texas, containing 2.00 acres more Communications Commission to ARCO or less, and more particularly Communications, Inc., dated December 16, described in that certain Oil and 1992, File No. 0000000319451, Call Sign Gas Lease dated January 5, 1998, KNEP883, Frequency 154.47875 MHZ recorded in Volume 2059, Page 343, Official Public Records, Rusk County, Texas. 42-401-057091-00C A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Oil and Gas Lease dated December 30, 1997, recorded in Volume 2059, Page 345, Official Public Records, Rusk County, Texas.
Page 108 of 165 135
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-057091-00D Mary Margaret Carloss Atlantic Richfield 1-5-98 2059 347 South Kilgore Unit (s) Company 417539500 Unit Tract 14 (continued) 42-401-057091-00E Nick Cooney Atlantic Richfield 1-5-98 2059 349 Company 42-401-057091-00F Patricia Ann Harrison Atlantic Richfield 1-19-98 2059 352 Company 42-401-057091-00G Elmer Hays Atlantic Richfield 12-29-97 2059 354 Company 42-401-057091-00H Harvey Hays, Jr. Atlantic Richfield 1-19-98 2059 356 Company FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- East Texas Field 42-401-057091-00D A tract of land out of the Daniel South Kilgore Unit (s) Clark Survey, A-162, Rusk County, 417539500 Texas, containing 2.00 acres more Unit Tract 14 or less, and more particularly (continued) described in that certain Oil and Gas Lease dated January 5, 1998, recorded in Volume 2059, Page 347, Official Public Records, Rusk County, Texas. 42-401-057091-00E A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Oil and Gas Lease dated January 5, 1998, recorded in Volume 2059, Page 349, Official Public Records, Rusk County, Texas. 42-401-057091-00F A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Oil and Gas Lease dated January 19, 1998, recorded in Volume 2059, Page 352, Official Public Records, Rusk County, Texas. 42-401-057091-00G A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Oil and Gas Lease dated December 29, 1997, recorded in Volume 2059, Page 354, Official Public Records, Rusk County, Texas. 42-401-057091-00H A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Oil and Gas Lease dated January 19, 1998, recorded in Volume 2059, Page 356, Official Public Records, Rusk County, Texas.
Page 109 of 165 136
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-057091-00I Major Kennedy, Jr. Atlantic Richfield 1-5-98 2059 358 South Kilgore Unit (s) Company 417539500 Unit Tract 14 (continued) 42-401-057091-00J Joyce Kennedy, Trustee Atlantic Richfield 1-5-98 2059 360 Company 42-401-057091-00K Velma Lemons Atlantic Richfield 1-5-98 2059 362 Company 42-401-057091-00L Mayde Lowry Atlantic Richfield 1-14-98 2059 364 Company 42-401-057091-00M Teressa Montgomery Atlantic Richfield 2-11-98 2059 366 Company FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- East Texas Field 42-401-057091-00I A tract of land out of the Daniel South Kilgore Unit (s) Clark Survey, A-162, Rusk County, 417539500 Texas, containing 2.00 acres more Unit Tract 14 or less, and more particularly (continued) described in that certain Oil and Gas Lease dated January 5, 1998, recorded in Volume 2059, Page 358, Official Public Records, Rusk County, Texas. 42-401-057091-00J A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Oil and Gas Lease dated January 5, 1998, recorded in Volume 2059, Page 360, Official Public Records, Rusk County, Texas. 42-401-057091-00K A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Oil and Gas Lease dated January 5, 1998, recorded in Volume 2059, Page 362, Official Public Records, Rusk County, Texas. 42-401-057091-00L A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Oil and Gas Lease dated January 14, 1998, recorded in Volume 2059, Page 364, Official Public Records, Rusk County, Texas. 42-401-057091-00M A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Oil and Gas Lease dated February 11, 1998, recorded in Volume 2059, Page 366, Official Public Records, Rusk County, Texas.
Page 110 of 165 137
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-057091-00N Morris Farms-A Atlantic Richfield 12-29-97 2059 369 South Kilgore Unit (s) Co-Partnership Company 417539500 Unit Tract 14 (continued) 42-401-057091-00O Dorothy Montgomery Atlantic Richfield 2-11-98 2059 371 Company 42-401-057091-00P Norene M. Murray Atlantic Richfield 12-29-97 2059 373 Company 42-401-057091-00Q James Norton Atlantic Richfield 2-3-98 2059 375 Scrimshire, Co-Trustee Company 42-401-057091-00R Donnie M. Wilson Atlantic Richfield 1-5-98 2059 378 Company FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- East Texas Field 42-401-057091-00N A tract of land out of the Daniel South Kilgore Unit (s) Clark Survey, A-162, Rusk County, 417539500 Texas, containing 2.00 acres more Unit Tract 14 or less, and more particularly (continued) described in that certain Oil and Gas Lease dated December 29, 1997, recorded in Volume 2059, Page 369, Official Public Records, Rusk County, Texas. 42-401-057091-00O A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Oil and Gas Lease dated February 11, 1998, recorded in Volume 2059, Page 371, Official Public Records, Rusk County, Texas. 42-401-057091-00P A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Oil and Gas Lease dated December 29, 1997, recorded in Volume 2059, Page 373, Official Public Records, Rusk County, Texas. 42-401-057091-00Q A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Oil and Gas Lease dated February 3, 1998, recorded in Volume 2059, Page 375, Official Public Records, Rusk County, Texas. 42-401-057091-00R A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Oil and Gas Lease dated January 5, 1998, recorded in Volume 2059, Page 378, Official Public Records, Rusk County, Texas.
Page 111 of 165 138
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-057091-00S Evelyn Yvonne Byrd Atlantic Richfield 3-21-98 2073 299 South Kilgore Unit (s) Company 417539500 Unit Tract 14 (continued) 42-401-057091-00T Rosalind J. Robinson Atlantic Richfield 3-21-98 2073 302 Company 42-401-057091-00U Ann H. Keetch Atlantic Richfield 3-12-98 2065 352 Company 42-401-057091-00V Iva Lee Sloan Atlantic Richfield 3-11-98 2065 360 Company 42-401-057091-00W John J. Hays Atlantic Richfield 12-29-97 2065 350 Company FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- East Texas Field 42-401-057091-00S A tract of land out of the Daniel South Kilgore Unit (s) Clark Survey, A-162, Rusk County, 417539500 Texas, containing 2.00 acres more Unit Tract 14 or less, and more particularly (continued) described in that certain Oil and Gas Lease dated March 21, 1998, recorded in Volume 2073, Page 299, Official Public Records, Rusk County, Texas. 42-401-057091-00T A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Oil and Gas Lease dated March 21, 1998, recorded in Volume 2073, Page 302, Official Public Records, Rusk County, Texas. 42-401-057091-00U A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Oil and Gas Lease dated March 12, 1998, recorded in Volume 2065, Page 352, Official Public Records, Rusk County, Texas. 42-401-057091-00V A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Oil and Gas Lease dated March 11, 1998, recorded in Volume 2065, Page 360, Official Public Records, Rusk County, Texas. 42-401-057091-00W A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Oil and Gas Lease dated December 29, 1997, recorded in Volume 2065, Page 350, Official Public Records, Rusk County, Texas.
Page 112 of 165 139
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-057091-00X D. J. Montgomery Atlantic Richfield 2-11-98 2065 354 South Kilgore Unit (s) Company 417539500 Unit Tract 14 (continued) 42-401-057091-00Y Marilyn M. Nicholson Atlantic Richfield 12-29-97 2065 358 Company 42-401-057091-00Z Emma Sue Vernor Atlantic Richfield 3-11-98 2065 362 Company 42-401-057091-0AA Jo Anne Montgomery Atlantic Richfield 12-29-97 2065 356 Company 42-401-057091-0AB Carolyn Kennedy Atlantic Richfield 4-9-98 2069 264 Traylor Company FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- East Texas Field 42-401-057091-00X A tract of land out of the Daniel South Kilgore Unit (s) Clark Survey, A-162, Rusk County, 417539500 Texas, containing 2.00 acres more Unit Tract 14 or less, and more particularly (continued) described in that certain Oil and Gas Lease dated February 11, 1998, recorded in Volume 2065, Page 354, Official Public Records, Rusk County, Texas. 42-401-057091-00Y A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Oil and Gas Lease dated December 29, 1997, recorded in Volume 2065, Page 358, Official Public Records, Rusk County, Texas. 42-401-057091-00Z A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Oil and Gas Lease dated March 11, 1998, recorded in Volume 2065, Page 362, Official Public Records, Rusk County, Texas. 42-401-057091-0AA A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Oil and Gas Lease dated December 29, 1997, recorded in Volume 2065, Page 356, Official Public Records, Rusk County, Texas. 42-401-057091-0AB A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Oil and Gas Lease dated April 9, 1998, recorded in Volume 2069, Page 264, Official Public Records, Rusk County, Texas.
Page 113 of 165 140
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-057091-0AC Lois H. Bannister Atlantic Richfield 3-11-98 2069 254 South Kilgore Unit (s) Company 417539500 Unit Tract 14 (continued) 42-401-057091-0AD Bertha M. Bellamy Atlantic Richfield 3-12-98 2069 252 Company 42-401-057091-0AE Carter H. Rhoads Atlantic Richfield 3-26-98 2069 248 Company 42-401-057091-0AF Robert W. Hamilton Atlantic Richfield 3-12-98 2069 256 Company 42-401-057091-0AG Emily H. Langford Atlantic Richfield 3-11-98 2069 258 Company FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- East Texas Field 42-401-057091-0AC A tract of land out of the Daniel South Kilgore Unit (s) Clark Survey, A-162, Rusk County, 417539500 Texas, containing 2.00 acres more Unit Tract 14 or less, and more particularly (continued) described in that certain Oil and Gas Lease dated March 11, 1998, recorded in Volume 2069, Page 254, Official Public Records, Rusk County, Texas. 42-401-057091-0AD A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Oil and Gas Lease dated March 12, 1998, recorded in Volume 2069, Page 252, Official Public Records, Rusk County, Texas. 42-401-057091-0AE A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Oil and Gas Lease dated March 26, 1998, recorded in Volume 2069, Page 248, Official Public Records, Rusk County, Texas. 42-401-057091-0AF A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Oil and Gas Lease dated March 12, 1998, recorded in Volume 2069, Page 256, Official Public Records, Rusk County, Texas. 42-401-057091-0AG A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Oil and Gas Lease dated March 11, 1998, recorded in Volume 2069, Page 258, Official Public Records, Rusk County, Texas.
Page 114 of 165 141
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-057091-0AH Helen Newell Atlantic Richfield 12-29-97 2069 250 South Kilgore Unit (s) Company 417539500 Unit Tract 14 (continued) 42-401-057091-0AI Aurelia Benton Atlantic Richfield 1-20-98 2069 260 Company 42-401-057091-0AJ Thomas B. Bender, Jr. Atlantic Richfield 1-20-98 2069 262 Company 42-401-057091-0AK Ruth Porter Atlantic Richfield 12-30-97 2082 549 Company 42-401-057091-0AL Charles R. Stone as Atlantic Richfield 4-6-98 2081 562 Agent and Company Attorney-in-Fact FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- East Texas Field 42-401-057091-0AH A tract of land out of the Daniel South Kilgore Unit (s) Clark Survey, A-162, Rusk County, 417539500 Texas, containing 2.00 acres more Unit Tract 14 or less, and more particularly (continued) described in that certain Oil and Gas Lease dated December 29, 1997, recorded in Volume 2069, Page 250, Official Public Records, Rusk County, Texas. 42-401-057091-0AI A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Oil and Gas Lease dated January 20, 1998, recorded in Volume 2069, Page 260, Official Public Records, Rusk County, Texas. 42-401-057091-0AJ A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Oil and Gas Lease dated January 20, 1998, recorded in Volume 2069, Page 262, Official Public Records, Rusk County, Texas. 42-401-057091-0AK A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Oil and Gas Lease dated December 30, 1997, recorded in Volume 2082, Page 549, Official Public Records, Rusk County, Texas. 42-401-057091-0AL A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Oil and Gas Lease dated April 6, 1998, recorded in Volume 2081, Page 562, Official Public Records, Rusk County, Texas.
Page 115 of 165 142
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-057091-0AM Charles R. Stone Atlantic Richfield 4-6-98 2081 628 South Kilgore Unit (s) Company 417539500 Unit Tract 14 (continued) 42-401-057091-0AN Rosie Terrell Atlantic Richfield 1-20-98 2081 630 Company 42-401-057091-0AO Mark Snead Atlantic Richfield 5-14-98 2081 618 Company 42-401-057091-0AP Steven Snead Atlantic Richfield 5-14-98 2081 626 Company 42-401-057091-0AQ Theodore J. Bender Atlantic Richfield 1-20-98 2081 564 Company FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- East Texas Field 42-401-057091-0AM A tract of land out of the Daniel South Kilgore Unit (s) Clark Survey, A-162, Rusk County, 417539500 Texas, containing 2.00 acres more Unit Tract 14 or less, and more particularly (continued) described in that certain Oil and Gas Lease dated April 6, 1998, recorded in Volume 2081, Page 628, Official Public Records, Rusk County, Texas. 42-401-057091-0AN A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Oil and Gas Lease dated January 20, 1998, recorded in Volume 2081, Page 630, Deed Records, Rusk County, Texas. 42-401-057091-0AO A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Oil and Gas Lease dated May 14, 1998, recorded in Volume 2081, Page 618, Official Public Records, Rusk County, Texas. 42-401-057091-0AP A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Oil and Gas Lease dated May 14, 1998, recorded in Volume 2081, Page 626, Official Public Records, Rusk County, Texas. 42-401-057091-0AQ A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Oil and Gas Lease dated January 20, 1998, recorded in Volume 2081, Page 564, Official Public Records, Rusk County, Texas.
Page 116 of 165 143
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-057091-0AR Barbara Cooper Atlantic Richfield 5-7-98 2081 587 South Kilgore Unit (s) Company 417539500 Unit Tract 14 (continued) 42-401-057091-0AS James L. Chapman Atlantic Richfield 6-4-98 2081 581 Company 42-401-057091-0AT Dottie Beth Cliburn Atlantic Richfield 5-20-98 2081 585 Company 42-401-057091-0AU Joe Scott Morris Atlantic Richfield 5-19-98 2081 606 Company 42-401-057091-0AV Charles L. Morris,III Atlantic Richfield 5-19-98 2081 602 Independent Executor Company FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- East Texas Field 42-401-057091-0AR A tract of land out of the Daniel South Kilgore Unit (s) Clark Survey, A-162, Rusk County, 417539500 Texas, containing 2.00 acres more Unit Tract 14 or less, and more particularly (continued) described in that certain Oil and Gas Lease dated May 7, 1998, recorded in Volume 2081, Page 587, Official Public Records, Rusk County, Texas. 42-401-057091-0AS A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Oil and Gas Lease dated June 4, 1998, recorded in Volume 2081, Page 581, Official Public Records, Rusk County, Texas. 42-401-057091-0AT A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Oil and Gas Lease dated May 20, 1998, recorded in Volume 2081, Page 585, Official Public Records, Rusk County, Texas. 42-401-057091-0AU A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Oil and Gas Lease dated May 19, 1998, recorded in Volume 2081, Page 606, Official Public Records, Rusk County, Texas. 42-401-057091-0AV A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Oil and Gas Lease dated May 19, 1998, recorded in Volume 2081, Page 602, Official Public Records, Rusk County, Texas.
Page 117 of 165 144
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-057091-0AW Betty Sue Jones Atlantic Richfield 3-11-98 2081 600 South Kilgore Unit (s) Company 417539500 Unit Tract 14 (continued) 42-401-057091-0AX Pansy Hays, Atlantic Richfield 5-14-98 2081 597 Individually and as Company Independent Executrix 42-401-057091-0AY Ada Richardson Atlantic Richfield 12-29-97 2081 616 Company 42-401-057091-0AZ Pauline Barrett Atlantic Richfield 12-29-97 2081 577 Company 42-401-057091-0BA Althea J. Pickett Atlantic Richfield 5-19-98 2081 612 Company FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- East Texas Field 42-401-057091-0AW A tract of land out of the Daniel South Kilgore Unit (s) Clark Survey, A-162, Rusk County, 417539500 Texas, containing 2.00 acres more Unit Tract 14 or less, and more particularly (continued) described in that certain Oil and Gas Lease dated March 11, 1998, recorded in Volume 2081, Page 600, Official Public Records, Rusk County, Texas. 42-401-057091-0AX A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Oil and Gas Lease dated May 14, 1998, recorded in Volume 2081, Page 597, Official Public Records, Rusk County, Texas. 42-401-057091-0AY A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Oil and Gas Lease dated December 29, 1997, recorded in Volume 2081, Page 616, Official Public Records, Rusk County, Texas. 42-401-057091-0AZ A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Oil and Gas Lease dated December 29, 1997, recorded in Volume 2081, Page 577, Official Public Records, Rusk County, Texas. 42-401-057091-0BA A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Oil and Gas Lease dated May 19, 1998, recorded in Volume 2081, Page 612, Official Public Records, Rusk County, Texas.
Page 118 of 165 145
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-057091-0BB Nancy Gale Atlantic Richfield 5-27-98 2081 622 South Kilgore Unit (s) Scrimshire, Agent and Company 417539500 Attorney-in-Fact Unit Tract 14 (continued) 42-401-057091-0BC Carolyn Newell Atlantic Richfield 5-25-98 2081 608 Company 42-401-057091-0BD Harvey D. Hays Atlantic Richfield 5-14-98 2081 593 Company 42-401-057091-0BE Edgar Capen Atlantic Richfield 3-11-98 2081 583 Company 42-401-057091-0BF Barbara Nelson, Atlantic Richfield 5-20-98 2081 610 Independent Executrix Company FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- East Texas Field 42-401-057091-0BB A tract of land out of the Daniel South Kilgore Unit (s) Clark Survey, A-162, Rusk County, 417539500 Texas, containing 2.00 acres more Unit Tract 14 or less, and more particularly (continued) described in that certain Oil and Gas Lease dated May 27, 1998, recorded in Volume 2081, Page 622, Official Public Records, Rusk County, Texas. 42-401-057091-0BC A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Oil and Gas Lease dated May 25, 1998, recorded in Volume 2081, Page 608, Official Public Records, Rusk County, Texas. 42-401-057091-0BD A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Oil and Gas Lease dated May 14, 1998, recorded in Volume 2081, Page 593, Official Public Records, Rusk County, Texas. 42-401-057091-0BE A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Oil and Gas Lease dated March 11, 1998, recorded in Volume 2081, Page 583, Official Public Records, Rusk County, Texas. 42-401-057091-0BF A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Oil and Gas Lease dated May 20, 1998, recorded in Volume 2081, Page 610, Official Public Records, Rusk County, Texas.
Page 119 of 165 146
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-057091-0BG Barbara Knight Atlantic Richfield 1-20-98 2087 238 South Kilgore Unit (s) Company 417539500 Unit Tract 14 (continued) 42-401-057091-0BH McCulliss Resources Atlantic Richfield 8-1-98 2093 361 Co., Inc. Company 42-401-057091-0BI Margaret L. Hays, a Atlantic Richfield 12-30-97 2093 364 widow and sole Company surviving heir of Edison Ford Hayes 42-401-057091-0BJ Atlantic Richfield 1-5-98 2089 469 Malcom Kennedy Company 42-401-057091-0BK Atlantic Richfield 8-31-98 2089 467 Beatarice Harrison Company FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- East Texas Field 42-401-057091-0BG A tract of land out of the Daniel South Kilgore Unit (s) Clark Survey, A-162, Rusk County, 417539500 Texas, containing 2.00 acres more Unit Tract 14 or less, and more particularly (continued) described in that certain Oil and Gas Lease dated January 20, 1998, recorded in Volume 2087, Page 238, Official Public Records, Rusk County, Texas. 42-401-057091-0BH A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Mineral Deed dated September 1, 1998, recorded in Volume 2092, Page 423, Official Public Records, Rusk County, Texas. 42-401-057091-0BI A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Mineral Deed dated September 1, 1998, recorded in Volume 2092, Page 423, Official Public Records, Rusk County, Texas. 42-401-057091-0BJ A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Mineral Deed dated September 1, 1998, recorded in Volume 2092, Page 423, Official Public Records, Rusk County, Texas. 42-401-057091-0BK A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Mineral Deed dated September 1, 1998, recorded in Volume 2092, Page 423, Official Public Records, Rusk County, Texas.
Page 120 of 165 147
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-057091-0BL Jack M. Hays Atlantic Richfield 12-27-97 2097 817 South Kilgore Unit (s) Company 417539500 Unit Tract 14 (continued) 42-401-057091-0BM David Bender Atlantic Richfield 1-20-98 2115 333 Company 42-401-057091-0BN Nations Bank, N.A., Atlantic Richfield 6-8-98 2100 207 Trustee of Carolyn Company Lane Trust #1 42-401-057091-0BO Carolyn Spruiell Land Atlantic Richfield 6-8-98 2109 205 Company 42-401-057901-0BP Mary Helen Spruiell Atlantic Richfield 6-8-98 2109 203 Boice Company FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- East Texas Field 42-401-057091-0BL A tract of land out of the Daniel South Kilgore Unit (s) Clark Survey, A-162, Rusk County, 417539500 Texas, containing 2.00 acres more Unit Tract 14 or less, and more particularly (continued) described in that certain Mineral Deed dated September 1, 1998, recorded in Volume 2092, Page 423, Official Public Records, Rusk County, Texas. 42-401-057091-0BM A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Mineral Deed dated September 1, 1998, recorded in Volume 2092, Page 423, Official Public Records, Rusk County, Texas. 42-401-057091-0BN A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Mineral Deed dated September 1, 1998, recorded in Volume 2092, Page 423, Official Public Records, Rusk County, Texas. 42-401-057091-0BO A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Mineral Deed dated September 1, 1998, recorded in Volume 2092, Page 423, Official Public Records, Rusk County, Texas. 42-401-057901-0BP A tract of land out of the Daniel Clark Survey, A-162, Rusk County, Texas, containing 2.00 acres more or less, and more particularly described in that certain Mineral Deed dated September 1, 1998, recorded in Volume 2092, Page 423, Official Public Records, Rusk County, Texas.
Page 121 of 165 148
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-057091-901 Robert B. Burdick Atlantic Richfield 9-1-98 2092 423 South Kilgore Unit (s) Company 417539500 Unit Tract 14 (continued) - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-004509-000 J. E. Strickland et V. C. Perryman 11-20-29 145 607 Strickland "B" (s) ux Emily Strickland, 417880700 et al 5.4688% ORRI - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-000852-000 S. R. Cohagan Argo Royalty Company 9-17-31 202 303 T. O. Mason (466902) (Mineral Deed) 410761600 1.5625% RI FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- East Texas Field 42-401-057091-901 A tract of land out of the Daniel South Kilgore Unit (s) Clark Survey, A-162, Rusk County, 417539500 Texas, containing 2.00 acres more Unit Tract 14 or less, and more particularly (continued) described in that certain Mineral Deed dated September 1, 1998, recorded in Volume 2092, Page 423, Official Public Records, Rusk County, Texas. - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- East Texas Field 42-401-004509-000 A tract of land out of the M. V. Strickland "B" (s) Pena League, Rusk County, Texas, 417880700 more particularly described in 5.4688% ORRI Oil & Gas Lease dated November 20, 1929, recorded in Volume 145, Page 607, Deed Records, Rusk County, Texas. - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- East Texas Field 42-401-000852-000 147.500 acres of land out of the Oil, Gas and Mineral Lease dated November 19, T. O. Mason (466902) (Mineral Deed) J. B. Cadena Survey, A-3, Rusk 1929, recorded in Volume 145, Page 339, Deed 410761600 County, Texas, and more Records, Rusk County, Texas 1.5625% RI particularly described in that certain Deed dated September 17, 1931, recorded in Volume 202, Page 303, Deed Records, Rusk County, Texas.
Page 122 of 165 149
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-056613-00A William Brittain et L. B. Martin 8-15-34 255 341 Wm. Brittain (s) ux, et al 412323900 100% WI 76.5626% NRI 258 358 42-401-056613-00B E. C. Laster, Inc., A. B. Edwards 8-15-34 et al 257 264 42-401-056613-00C E. C. Laster, Inc. P. A. Wiley 10-29-34 - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-000862-000 Danciger Oil & Argo Royalty Company 2-16-32 212 322 W. M. Jernigan (Mineral Deed) Refining Company of (26-432;5704) Texas 410684900 3.1250% RI - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-401-000864-000 A. A. Perkins (RI) 410834500 1.7424% NRI - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- East Texas Field 42-401-056613-00A A tract of land out of the J. C. AR-105213 Wm. Brittain (s) Barnett Survey, Rusk County, Acreage Exchange Agreement dated effective 412323900 Texas, and more particularly April 1, 1995 by and between Paloma Partners, 100% WI described in Oil and Gas Lease Ltd. and Atlantic Richfield Company. (s) 76.5626% NRI dated August 15, 1934, recorded in Volume 255, Page 341, Lease AR-105265-000 Records, Rusk County, Texas. Purchase and Sale Agreement dated October 6, 1995 by and between East Texas Gathering 42-401-056613-00B A tract of land out of the J. C. Company, Atlantic Richfield Company, Sun Pipe Barnett Survey, Rusk County, Line Company and Sun Company, Inc. (s) Texas, and more particularly described in Oil and Gas Lease AR-105265-001 dated August 15, 1934, recorded Crude Oil Buy/Sell Contract dated effective in Volume 258, Page 358, Lease December 1, 1995 by and between ARCO Permian Records, Rusk County, Texas. and Sun Company, Inc. (s) 42-401-056613-00C A tract of land out of the J. C. AR-105584 Barnett Survey, Rusk County, Longview Gas Plant Gas Purchase Contract Texas, and more particularly dated November 1, 1997 by and between ARCO described in Oil and Gas Lease Permian, Seller, and ARCO Permian, Buyer. (s) dated October 29, 1934, recorded in Volume 257, Page 264, Lease Private Radio License from Federal Records, Rusk County, Texas. Communications Commission to ARCO Communications, Inc., dated December 16, ONLY INSOFAR AS LEASES COVER 1992, File No. 0000000319451, Call Sign RIGHTS FROM THE SURFACE TO THE KNEP883, Frequency 154.47875 MHZ BASE OF THE WOODBINE FORMATION. - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- East Texas Field 42-401-000862-000 A tract of land out of the John W. M. Jernigan (Mineral Deed) C. Snow Survey, Rusk County, (26-432;5704) Texas, containing 31 acres more 410684900 or less, and more particularly 3.1250% RI described by metes and bounds in that certain Mineral Deed dated February 16, 1932, recorded in Volume 212, Page 322, Deed Records, Rusk County, Texas. - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- East Texas Field 42-401-000864-000 77.06 acres, more or less out of A. A. Perkins (RI) the J. B. Cadena Survey, Rusk 410834500 County, Texas 1.7424% NRI - --------------------------- ---------------------- ----------------------------------- --------------------------------------------
Page 123 of 165 150
EXHIBIT "A" ATTACHED TO AND MADE A PART OF THAT CERTAIN PURCHASE AND SALE AGREEMENT DATED EFFECTIVE AS OF OCTOBER 1, 1999, BY AND BETWEEN ATLANTIC RICHFIELD COMPANY (ARCO) AND FUTURE ACQUISITION 1995, LTD. (PURCHASER) IN ADDITION TO ANY OTHER DEPTH LIMITATIONS EXPRESSED HEREIN, IT IS THE EXPRESS INTENTION TO LIMIT THE DESCRIPTIONS OF ARCO'S INTEREST (IF ANY), FROM THE SURFACE DOWN TO THE BASE OF THE DEEPEST PRODUCING FORMATION SMITH COUNTY FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- Shea Prospect 42-423-058204-00A NationsBank of Texas, Petro Land Group 9-19-94 3642 693 Arterberry Heirs Oil Unit N.A. and M. E. 413000600 Florence, Jr., 31.246875% WI Co-Trustees of the M. 25.61432% NRI E. Florence,Jr. Trust and of the Annette F. McLemore Trust 8737-01/02 42-423-058205-00A Dallas Home for the Caplex Energy, Inc. 3-27-05 3649 758 Jewish Aged, Inc. 42-423-058206-00A David M. Fender, dihsp Caplex Energy, Inc. 2-9-95 3642 778 amended 3907 120 and ratified 3907 122 FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- Shea Prospect 42-423-058204-00A 37.20 acres, being tracts of 25.0 AR-105657-001 Arterberry Heirs Oil Unit acres (Deed 455/210 DR) and 12.20 Letter Agreement dated August 2, 1996, 413000600 acres (Deed 315/638 DR), from between Amoco Production Company and Caplex 31.246875% WI Surface to the stratigraphic Energy Inc. 25.61432% NRI equivalent of the Base of the Rodessa Formation, found at AR-105657-002 approximately 7,340 feet in the C Letter Agreement between Exxon and Caplex W Resources, Inc. Arterberry Energy Inc. Heirs No. 1 well, E. Daniels A-330 Survey, Smith County, Texas AR-105657-003 Letter Agreement between Five Star 42-423-058205-00A 92.0 acres in Elisha Daniels Exploration and Caplex Energy, Inc. dated Survey A-330, being tracts of Marcy 9, 1990, amended July 30, 1996. 67.0 acres (Deed 94/513 DR) and 25.0 acres (East 25.0 acres of AR-105657-004 76.0 acres Deed 291/197 DR), from Arterberry Heirs Oil Unit Designation the Surface to the stratigraphic equivalent of the Base of the AR-105657-000 Rodessa Formation, found at Mid-Tex Joint Operating Agreement approximately 7,340' in the C W Shea Prospect Joint Operating Agreement Resources Inc. Arterberry Heirs No. 1 well, E. Daniels A-330 Survey, Smith County, Texas 42-423-058206-00A 128.841 acres in J. E. Daniels Survey A-330, sometimes called 135.0 acres, being tracts of 76.0 acres (WD 240/349 DR) and 52.841 acres (sometimes called 49.80 acres Block 2, 3, 4 suit Civil Minutes Book $/226, Dist. Court Records), from Surface to the stratigraphic equivalent of the base of the Rodessa Formation, found at approximately 7,340' in the C W Resources, Inc. Arterberry Heirs No. 1 well, E. Daniels A-330 Survey, Smith County, Texas
Page 124 of 165 151
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- Shea Prospect 42-423-058206-00B Ruby Jean Arterberry Caplex Energy, Inc. 7-11-96 3823 as 372 Arterberry Heirs Oil Unit ratified 413000600 3837 147 31.246875% WI 3933 308 25.61432% NRI (cont'd) 3933 312 3933 310 3837 145 FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- Shea Prospect 42-423-058206-00B 128.841 acres in J. E. Daniels AR-105657-001 Arterberry Heirs Oil Unit Survey A-330, sometimes called Letter Agreement dated August 2, 1996, 413000600 135.0 acres, being tracts of 76.0 between Amoco Production Company and Caplex 31.246875% WI acres (WD 240/349 DR) and 52.841 Energy Inc. 25.61432% NRI (cont'd) acres (sometimes called 49.80 acres Block 2, 3, 4 suit Civil AR-105657-002 Minutes Book $/226, Dist. Court Letter Agreement between Exxon and Caplex Records), from Surface to the Energy Inc. stratigraphic equivalent of the base of the Rodessa Formation, AR-105657-003 found at approximately 7,340' in Letter Agreement between Five Star the C W Resources, Inc. Arterberry Exploration and Caplex Energy, Inc. dated Heirs No. 1 well, E. Daniels March 9, 1990, amended July 30, 1996. A-330 Survey, Smith County, Texas (cont'd from above) AR-105657-004 Arterberry Heirs Oil Unit Designation AR-105657-000 Mid-Tex Joint Operating Agreement Shea Prospect Joint Operating Agreement
Page 125 of 165 152
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- Shea Prospect 42-423-058206-00C Charles Arterberry, Caplex Energy, Inc. 10-21-96 3889 695 Arterberry Heirs Oil Unit et ux Deloris 413000600 31.246875% WI 25.61432% NRI 42-423-058206-00D Bonnie Arterberry, Caplex Energy, Inc. 1-10-96 3628 787 dihsp 42-423-058206-00E Caplex Energy, Inc. 1-20-95 3628 796 Leon Arterberry, Individually and as agent and A-I-F for Lorenza Arterberry FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- Shea Prospect 42-423-058206-00C 128.841 acres in J. E. Daniels AR-105657-001 Arterberry Heirs Oil Unit Survey A-330, sometimes called Letter Agreement dated August 2, 1996, 413000600 135.0 acres, being tracts of 76.0 between Amoco Production Company and Caplex 31.246875% WI acres (WD 240/349 DR) and 52.841 Energy Inc. 25.61432% NRI acres (sometimes called 49.80 acres Block 2, 3, 4 suit Civil AR-105657-002 Minutes Book $/226, Dist. Court Letter Agreement between Exxon and Caplex Records), from Surface to the Energy Inc. stratigraphic equivalent of the base of the Rodessa Formation, AR-105657-003 found at approximately 7,340' in Letter Agreement between Five Star the C W Resources, Inc. Exploration and Caplex Energy, Inc. dated Arterberry Heirs No. 1 well, E. Marcy 9, 1990, amended July 30, 1996. Daniels A-330 Survey, Smith County, Texas AR-105657-004 Arterberry Heirs Oil Unit Designation 42-423-058206-00D 128.841 acres in J. E. Daniels Survey A-330, sometimes called AR-105657-000 135.0 acres, being tracts of 76.0 Mid-Tex Joint Operating Agreement acres (WD 240/349 DR) and 52.841 Shea Prospect Joint Operating Agreement acres (sometimes called 49.80 acres Block 2, 3, 4 suit Civil Minutes Book $/226, Dist. Court Records), from Surface to the stratigraphic equivalent of the base of the Rodessa Formation, found at approximately 7,340' in the C W Resources, Inc. Arterberry Heirs No. 1 well, E. Daniels A-330 Survey, Smith County, Texas 42-423-058206-00E 128.841 acres in J. E. Daniels Survey A-330, sometimes called 135.0 acres, being tracts of 76.0 acres (WD 240/349 DR) and 52.841 acres (sometimes called 49.80 acres Block 2, 3, 4 suit Civil Minutes Book $/226, Dist. Court Records), from Surface to the stratigraphic equivalent of the base of the Rodessa Formation, found at approximately 7,340' in the C W Resources, Inc. Arterberry Heirs No. 1 well, E. Daniels A-330 Survey, Smith County, Texas
Page 126 of 165 153
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- Shea Prospect 42-423-058206-00F Gregory Arterberry, Caplex Energy, Inc. 12-8-04 3692 4 Arterberry Heirs Oil Unit dihsp 413000600 31.246875% WI 25.61432% NRI 42-423-058206-00G Kelvin Arterberry, Caplex Energy, Inc. 1-10-95 3628 as 793 dihsp ratified 3837 130 42-423-058206-00H James G. Hubley, dihsp Caplex Energy, Inc. 10-4-96 3889 701 FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- Shea Prospect 42-423-058206-00F 128.841 acres in J. E. Daniels AR-105657-001 Arterberry Heirs Oil Unit Survey A-330, sometimes called Letter Agreement dated August 2, 1996, 413000600 135.0 acres, being tracts of 76.0 between Amoco Production Company and Caplex 31.246875% WI acres (WD 240/349 DR) and 52.841 Energy Inc. 25.61432% NRI acres (sometimes called 49.80 acres Block 2, 3, 4 suit Civil AR-105657-002 Minutes Book $/226, Dist. Court Letter Agreement between Exxon and Caplex Records), from Surface to the Energy Inc. stratigraphic equivalent of the base of the Rodessa Formation, AR-105657-003 found at approximately 7,340' in Letter Agreement between Five Star the C W Resources, Inc. Exploration and Caplex Energy, Inc. dated Arterberry Heirs No. 1 well, E. March 9, 1990, amended July 30, 1996. Daniels A-330 Survey, Smith County, Texas AR-105657-004 Arterberry Heirs Oil Unit Designation 42-423-058206-00G 128.841 acres in J. E. Daniels Survey A-330, sometimes called AR-105657-000 135.0 acres, being tracts of 76.0 Mid-Tex Joint Operating Agreement acres (WD 240/349 DR) and 52.841 Shea Prospect Joint Operating Agreement acres (sometimes called 49.80 acres Block 2, 3, 4 suit Civil Minutes Book $/226, Dist. Court Records), from Surface to the stratigraphic equivalent of the base of the Rodessa Formation, found at approximately 7,340' in the C W Resources, Inc. Arterberry Heirs No. 1 well, E. Daniels A-330 Survey, Smith County, Texas 42-423-058206-00H 128.841 acres in J. E. Daniels Survey A-330, sometimes called 135.0 acres, being tracts of 76.0 acres (WD 240/349 DR) and 52.841 acres (sometimes called 49.80 acres Block 2, 3, 4 suit Civil Minutes Book $/226, Dist. Court Records), from Surface to the stratigraphic equivalent of the base of the Rodessa Formation, found at approximately 7,340' in the C W Resources, Inc. Arterberry Heirs No. 1 well, E. Daniels A-330 Survey, Smith County, Texas
Page 127 of 165 154
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- Shea Prospect 42-423-058206-00I Judi Dunagan, dihsp Caplex Energy, Inc. 2-10-95 3628 802 Arterberry Heirs Oil Unit 413000600 31.246875% WI 25.61432% NRI 42-423-058206-00J Betty Jane Zak, Caplex Energy, Inc. 10-4-96 3889 692 Individually and as Independent Executor of Est. of Stanley Zak, Dec'd. 42-423-058206-00K The Frank and Marilyn Caplex Energy, Inc. 10-17-96 3889 704 Budde Family Trust FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- Shea Prospect 42-423-058206-00I 128.841 acres in J. E. Daniels AR-105657-001 Arterberry Heirs Oil Unit Survey A-330, sometimes called Letter Agreement dated August 2, 1996, 413000600 135.0 acres, being tracts of 76.0 between Amoco Production Company and Caplex 31.246875% WI acres (WD 240/349 DR) and 52.841 Energy Inc. 25.61432% NRI acres (sometimes called 49.80 acres Block 2, 3, 4 suit Civil AR-105657-002 Minutes Book $/226, Dist. Court Letter Agreement between Exxon and Caplex Records), from Surface to the Energy Inc. stratigraphic equivalent of the base of the Rodessa Formation, AR-105657-003 found at approximately 7,340' in Letter Agreement between Five Star the C W Resources, Inc. Exploration and Caplex Energy, Inc. dated Arterberry Heirs No. 1 well, E. March 9, 1990, amended July 30, 1996. Daniels A-330 Survey, Smith County, Texas AR-105657-004 Arterberry Heirs Oil Unit Designation 42-423-058206-00J 128.841 acres in J. E. Daniels Survey A-330, sometimes called AR-105657-000 135.0 acres, being tracts of 76.0 Mid-Tex Joint Operating Agreement acres (WD 240/349 DR) and 52.841 Shea Prospect Joint Operating Agreement acres (sometimes called 49.80 acres Block 2, 3, 4 suit Civil Minutes Book $/226, Dist. Court Records), from Surface to the stratigraphic equivalent of the base of the Rodessa Formation, found at approximately 7,340' in the C W Resources, Inc. Arterberry Heirs No. 1 well, E. Daniels A-330 Survey, Smith County, Texas 42-423-058206-00K 128.841 acres in J. E. Daniels Survey A-330, sometimes called 135.0 acres, being tracts of 76.0 acres (WD 240/349 DR) and 52.841 acres (sometimes called 49.80 acres Block 2, 3, 4 suit Civil Minutes Book $/226, Dist. Court Records), from Surface to the stratigraphic equivalent of the base of the Rodessa Formation, found at approximately 7,340' in the C W Resources, Inc. Arterberry Heirs No. 1 well, E. Daniels A-330 Survey, Smith County, Texas
Page 128 of 165 155
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- Shea Prospect 42-423-058206-00L Robert Don Lee Caple & 9-6-94 3616 588 Arterberry Heirs Oil Unit Arterberry, dihsp Associates 413000600 31.246875% WI 25.61432% NRI 42-423-058206-00M Virginia Arterberry Caplex Energy, Inc. 9-13-96 3889 707 42-423-058206-00N James D. Culver, et Caplex Energy, Inc. 7-29-96 3837 124 ux Donna L. FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- Shea Prospect 42-423-058206-00L 128.841 acres in J. E. Daniels AR-105657-001 Arterberry Heirs Oil Unit Survey A-330, sometimes called Letter Agreement dated August 2, 1996, 413000600 135.0 acres, being tracts of 76.0 between Amoco Production Company and Caplex 31.246875% WI acres (WD 240/349 DR) and 52.841 Energy Inc. 25.61432% NRI acres (sometimes called 49.80 acres Block 2, 3, 4 suit Civil AR-105657-002 Minutes Book $/226, Dist. Court Letter Agreement between Exxon and Caplex Records), from Surface to the Energy Inc. stratigraphic equivalent of the base of the Rodessa Formation, AR-105657-003 found at approximately 7,340' in Letter Agreement between Five Star the C W Resources, Inc. Exploration and Caplex Energy, Inc. dated Arterberry Heirs No. 1 well, E. March 9, 1990, amended July 30, 1996. Daniels A-330 Survey, Smith County, Texas AR-105657-004 Arterberry Heirs Oil Unit Designation 42-423-058206-00M 128.841 acres in J. E. Daniels AR-105657-000 Survey A-330, sometimes called Mid-Tex Joint Operating Agreement 135.0 acres, being tracts of 76.0 Shea Prospect Joint Operating Agreement acres (WD 240/349 DR) and 52.841 acres (sometimes called 49.80 acres Block 2, 3, 4 suit Civil Minutes Book $/226, Dist. Court Records), from Surface to the stratigraphic equivalent of the base of the Rodessa Formation, found at approximately 7,340' in the C W Resources, Inc. Arterberry Heirs No. 1 well, E. Daniels A-330 Survey, Smith County, Texas 42-423-058206-00N 128.841 acres in J. E. Daniels Survey A-330, sometimes called 135.0 acres, being tracts of 76.0 acres (WD 240/349 DR) and 52.841 acres (sometimes called 49.80 acres Block 2, 3, 4 suit Civil Minutes Book $/226, Dist. Court Records), from Surface to the stratigraphic equivalent of the base of the Rodessa Formation, found at approximately 7,340' in the C W Resources, Inc. Arterberry Heirs No. 1 well, E. Daniels A-330 Survey, Smith County, Texas
Page 129 of 165 156
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- Shea Prospect 42-423-058206-00O Marian Hicks Caplex Energy, Inc. 7-18-96 3889 720 Arterberry Heirs Oil Unit 413000600 31.246875% WI 25.61432% NRI 42-423-058206-00P Sandra Richardson Wagner & Brown, Ltd. 3-21-97 3963 76 42-423-058206-00Q Carrie Lou Lawson Wagner & Brown, Ltd. 3-21-97 3947 76 FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- Shea Prospect 42-423-058206-00O 128.841 acres in J. E. Daniels AR-105657-001 Arterberry Heirs Oil Unit Survey A-330, sometimes called Letter Agreement dated August 2, 1996, 413000600 135.0 acres, being tracts of 76.0 between Amoco Production Company and Caplex 31.246875% WI acres (WD 240/349 DR) and 52.841 Energy Inc. 25.61432% NRI acres (sometimes called 49.80 acres Block 2, 3, 4 suit Civil AR-105657-002 Minutes Book $/226, Dist. Court Letter Agreement between Exxon and Caplex Records), from Surface to the Energy Inc. stratigraphic equivalent of the base of the Rodessa Formation, AR-105657-003 found at approximately 7,340' in Letter Agreement between Five Star the C W Resources, Inc. Exploration and Caplex Energy, Inc. dated Arterberry Heirs No. 1 well, E. March 9, 1990, amended July 30, 1996. Daniels A-330 Survey, Smith County, Texas AR-105657-004 Arterberry Heirs Oil Unit Designation 42-423-058206-00P 128.841 acres in J. E. Daniels AR-105657-000 Survey A-330, sometimes called Mid-Tex Joint Operating Agreement 135.0 acres, being tracts of 76.0 Shea Prospect Joint Operating Agreement acres (WD 240/349 DR) and 52.841 acres (sometimes called 49.80 acres Block 2, 3, 4 suit Civil Minutes Book $/226, Dist. Court Records), from Surface to the stratigraphic equivalent of the base of the Rodessa Formation, found at approximately 7,340' in the C W Resources, Inc. Arterberry Heirs No. 1 well, E. Daniels A-330 Survey, Smith County, Texas 42-423-058206-00Q 128.841 acres in J. E. Daniels Survey A-330, sometimes called 135.0 acres, being tracts of 76.0 acres (WD 240/349 DR) and 52.841 acres (sometimes called 49.80 acres Block 2, 3, 4 suit Civil Minutes Book $/226, Dist. Court Records), from Surface to the stratigraphic equivalent of the base of the Rodessa Formation, found at approximately 7,340' in the C W Resources, Inc. Arterberry Heirs No. 1 well, E. Daniels A-330 Survey, Smith County, Texas
Page 130 of 165 157
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- Shea Prospect 42-423-058206-00R Robert Arterberry Wagner & Brown, Ltd. 3-21-97 3947 27 Arterberry Heirs Oil Unit 413000600 31.246875% WI 25.61432% NRI 42-423-058206-00S H. L. Arterberry Wagner & Brown, Ltd. 3-21-97 3947 19 42-423-058206-00T Emma Jean Arterberry Wagner & Brown, Ltd. 3-21-97 3947 31 FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- Shea Prospect 42-423-058206-00R 128.841 acres in J. E. Daniels AR-105657-001 Arterberry Heirs Oil Unit Survey A-330, sometimes called Letter Agreement dated August 2, 1996, 413000600 135.0 acres, being tracts of 76.0 between Amoco Production Company and Caplex 31.246875% WI acres (WD 240/349 DR) and 52.841 Energy Inc. 25.61432% NRI acres (sometimes called 49.80 acres Block 2, 3, 4 suit Civil AR-105657-002 Minutes Book $/226, Dist. Court Letter Agreement between Exxon and Caplex Records), from Surface to the Energy Inc. stratigraphic equivalent of the base of the Rodessa Formation, AR-105657-003 found at approximately 7,340' in Letter Agreement between Five Star the C W Resources, Inc. Exploration and Caplex Energy, Inc. dated Arterberry Heirs No. 1 well, E. Marcy 9, 1990, amended July 30, 1996. Daniels A-330 Survey, Smith County, Texas AR-105657-004 Arterberry Heirs Oil Unit Designation 42-423-058206-00S 128.841 acres in J. E. Daniels AR-105657-000 Survey A-330, sometimes called Mid-Tex Joint Operating Agreement 135.0 acres, being tracts of 76.0 Shea Prospect Joint Operating Agreement acres (WD 240/349 DR) and 52.841 acres (sometimes called 49.80 acres Block 2, 3, 4 suit Civil Minutes Book $/226, Dist. Court Records), from Surface to the stratigraphic equivalent of the base of the Rodessa Formation, found at approximately 7,340' in the C W Resources, Inc. Arterberry Heirs No. 1 well, E. Daniels A-330 Survey, Smith County, Texas 42-423-058206-00T 128.841 acres in J. E. Daniels Survey A-330, sometimes called 135.0 acres, being tracts of 76.0 acres (WD 240/349 DR) and 52.841 acres (sometimes called 49.80 acres Block 2, 3, 4 suit Civil Minutes Book $/226, Dist. Court Records), from Surface to the stratigraphic equivalent of the base of the Rodessa Formation, found at approximately 7,340' in the C W Resources, Inc. Arterberry Heirs No. 1 well, E. Daniels A-330 Survey, Smith County, Texas
Page 131 of 165 158
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- Arterberry Heirs Oil Unit 42-423-058206-00U Johnnie Mae Tucker Wagner & Brown, Ltd. 3-21-97 3947 23 413000600 31.246875% WI 25.61432% NRI 42-423-058206-00V Renee Elliott Wagner & Brown, Ltd. 3-21-97 3963 74 Frenchell Paul Jeffrey Pierce 42-423-058206-00W Vonzella Aarterberry Wagner & Brown, Ltd. 3-21-97 3947 21 FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- Arterberry Heirs Oil Unit 42-423-058206-00U 128.841 acres in J. E. Daniels AR-105657-001 413000600 Survey A-330, sometimes called Letter Agreement dated August 2, 1996, 31.246875% WI 135.0 acres, being tracts of 76.0 between Amoco Production Company and Caplex 25.61432% NRI acres (WD 240/349 DR) and 52.841 Energy Inc. acres (sometimes called 49.80 acres Block 2, 3, 4 suit Civil AR-105657-002 Minutes Book $/226, Dist. Court Letter Agreement between Exxon and Caplex Records), from Surface to the Energy Inc. stratigraphic equivalent of the base of the Rodessa Formation, AR-105657-003 found at approximately 7,340' in Letter Agreement between Five Star the C W Resources, Inc. Exploration and Caplex Energy, Inc. dated Arterberry Heirs No. 1 well, E. Marcy 9, 1990, amended July 30, 1996. Daniels A-330 Survey, Smith County, Texas AR-105657-004 Arterberry Heirs Oil Unit Designation 42-423-058206-00V 128.841 acres in J. E. Daniels AR-105657-000 Survey A-330, sometimes called Mid-Tex Joint Operating Agreement 135.0 acres, being tracts of 76.0 Shea Prospect Joint Operating Agreement acres (WD 240/349 DR) and 52.841 acres (sometimes called 49.80 acres Block 2, 3, 4 suit Civil Minutes Book $/226, Dist. Court Records), from Surface to the stratigraphic equivalent of the base of the Rodessa Formation, found at approximately 7,340' in the C W Resources, Inc. Arterberry Heirs No. 1 well, E. Daniels A-330 Survey, Smith County, Texas 42-423-058206-00W 128.841 acres in J. E. Daniels Survey A-330, sometimes called 135.0 acres, being tracts of 76.0 acres (WD 240/349 DR) and 52.841 acres (sometimes called 49.80 acres Block 2, 3, 4 suit Civil Minutes Book $/226, Dist. Court Records), from Surface to the stratigraphic equivalent of the base of the Rodessa Formation, found at approximately 7,340' in the C W Resources, Inc. Arterberry Heirs No. 1 well, E. Daniels A-330 Survey, Smith County, Texas
Page 132 of 165 159
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- Arterberry Heirs Oil Unit 42-423-058206-00X Jewel Timmons Wagner & Brown, Ltd. 3-21-97 3947 39 413000600 31.246875% WI 25.61432% NRI 42-423-058206-00Y Geneva Mays Wagner & Brown, Ltd. 3-21-97 3963 66 42-423-058207-00A Thomas Harold Caplex Energy, Inc. 8-8-96 3846 as 547 Grantham, ratified Individually and as 3889 725 Independent Executor 3889 727 of the Estate of 3889 729 Sarah Helen Smith, 3931 512 Dec'd. FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- Arterberry Heirs Oil Unit 42-423-058206-00X 128.841 acres in J. E. Daniels AR-105657-001 413000600 Survey A-330, sometimes called Letter Agreement dated August 2, 1996, 31.246875% WI 135.0 acres, being tracts of 76.0 between Amoco Production Company and Caplex 25.61432% NRI acres (WD 240/349 DR) and 52.841 Energy Inc. acres (sometimes called 49.80 acres Block 2, 3, 4 suit Civil AR-105657-002 Minutes Book $/226, Dist. Court Letter Agreement between Exxon and Caplex Records), from Surface to the Energy Inc. stratigraphic equivalent of the base of the Rodessa Formation, AR-105657-003 found at approximately 7,340' in Letter Agreement between Five Star the C W Resources, Inc. Exploration and Caplex Energy, Inc. dated Arterberry Heirs No. 1 well, E. Marcy 9, 1990, amended July 30, 1996. Daniels A-330 Survey, Smith County, Texas AR-105657-004 Arterberry Heirs Oil Unit Designation 42-423-058206-00Y 128.841 acres in J. E. Daniels AR-105657-000 Survey A-330, sometimes called Mid-Tex Joint Operating Agreement 135.0 acres, being tracts of 76.0 Shea Prospect Joint Operating Agreement acres (WD 240/349 DR) and 52.841 acres (sometimes called 49.80 acres Block 2, 3, 4 suit Civil Minutes Book $/226, Dist. Court Records), from Surface to the stratigraphic equivalent of the base of the Rodessa Formation, found at approximately 7,340' in the C W Resources, Inc. Arterberry Heirs No. 1 well, E. Daniels A-330 Survey, Smith County, Texas 42-423-058207-00A 271.441 acres, being tracts of 76.0 acres (WD 240/349 DR) and 52.841 acres (Sometimes called 49.80 acres Block 2, 3, 4 suit Civil Minutes Book R/226, Dist. Court Records), 69.90 acres (Deed 47/531 DR), and 60.9 acres (Deed Y/426 DR) in J. E. Daniels A-330 Survey, and 12.7 acres out of the D. Shaw Survey A-917 (WD 57/93 DR) from Surface to the stratigraphic equivalent of the Base of the Rodessa Formation, found at approximately 7,340' in the C W Resources, Inc. Arterberry Heirs No. 1 well, E. Daniels A-330 Survey, Smith County, Texas
Page 133 of 165 160
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- Arterberry Heirs Oil Unit 42-423-058208-00A J. S. Hudnall Frank J. Budde 6-17-66 1202 349 413000600 G.W. Pirtle (Exxon) 31.246875% WI (Exxon Corporation 25.61432% NRI F/O & AOGL) 42-423-058209-00A Sam Arterberry, a M. E. Zoller (Exxon) 11-6-73 1471 567 single man dihsp (Exxon Corporation FO & AOGL) 42-423-058210-00A Annette F. Broyles M. E. Zoller (Exxon) 2-/12-74 1493 887 D. I. Felsenthal Sharon F. Goren FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- Arterberry Heirs Oil Unit 42-423-058208-00A 4.15 acre Tract 2 of 40.0 acre AR-105657-001 413000600 Arterberry Oil Unit (4.15 acres Letter Agreement dated August 2, 1996, 31.246875% WI out of 25.50 acre tract described between Amoco Production Company and Caplex 25.61432% NRI in MD 322/435 DR), from Surface Energy Inc. to 7,340' in the C W Resources, Inc. Arterberry Heir No. 1 well, AR-105657-002 E. Daniels A-330 Survey, Smith Letter Agreement between Exxon and Caplex County, Texas Energy Inc. AR-105657-003 42-423-058209-00A 40.0 acre Arterberry Oil Unit Letter Agreement between Five Star Tracts 1 (25.0), 2 (4.15), 3 Exploration and Caplex Energy, Inc. dated (4.50) and 4 (6.35), from Surface Marcy 9, 1990, amended July 30, 1996. to the stratigraphic equivalent of the Base of the Rodessa AR-105657-004 Formation, found at approximately Arterberry Heirs Oil Unit Designation 7,340' in the C W Resources, Inc. Arterberry Heirs No. 1 well, E. AR-105657-000 Daniels A-330 Survey, Smith Mid-Tex Joint Operating Agreement County, Texas Shea Prospect Joint Operating Agreement 42-423-058210-00A 4.15 acre Tract 2 of 40.0 acre Arterberry Oil Unit (4.15 acres out of 25.50 acre tract described in MD 322/435 DR), from Surface to 7,340' in the C W Resources, Inc. Arterberry Heir No. 1 well, E. Daniels A-330 Survey, Smith County, Texas
Page 134 of 165 161
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- Shea Prospect 42-423-057809-00A Ronnie Webb Thompson Interests, 7-11-97 33.33% WI Inc. 42-423-057809-00B Elaine Keeny 7-11-97 Thompson Interests, Inc. 42-423-057809-00C Kenneth Webb 7-11-97 Thompson Interests, Inc. 42-423-057809-00D Edith C. Webb 7-11-97 Thompson Interests, Inc. 42-423-057810-00A J. L. Tweedy 7-20-97 Thompson Interests, Inc. - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- Shea Prospect 42-423-057810-00B Martha Helen Sinclair Thompson Interests, 7-20-97 33.33% WI Inc. 42-423-057810-00C Jewel M. Simpson 7-20-97 Wagner & Brown, Ltd. 42-423-057810-00D John V. Sinclair 7-20-97 3995 289 Wagner & Brown, Ltd. 42-423-057810-00E James T. Sinclair 7-20-97 3995 289 Wagner & Brown, Ltd. 42-423-057810-00F Margaret C. Hamlin 7-25-97 3995 282 Wagner & Brown, Ltd. 42-423-057810-00G Roy Carpenter 7-25-97 3995 291 Wagner & Brown, Ltd. FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- Shea Prospect 42-423-057809-00A 71.52 acres, being tracts of AR-105657-000 33.33% WI 25.0, 16.52, 25.50 and 4.50 acres Mid-Tex Joint Operating Agreement out of E. Caniels A-330 (Deed Shea Prospect Joint Operating Agreement 363/66 DR) Smith County, Texas 42-423-057809-00B 71.52 acres, being tracts of 25.0, 16.52, 25.50 and 4.50 acres out of E. Caniels A-330 (Deed 363/66 DR) Smith County, Texas 42-423-057809-00C 71.52 acres, being tracts of 25.0, 16.52, 25.50 and 4.50 acres out of E. Caniels A-330 (Deed 363/66 DR) Smith County, Texas 42-423-057809-00D 71.52 acres, being tracts of 25.0, 16.52, 25.50 and 4.50 acres out of E. Caniels A-330 (Deed 363/66 DR) Smith County, Texas 42-423-057810-00A 27.441 acres out of E. Daniels A-330 (MD 273/120 DR), Smith County, Texas - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- Shea Prospect 42-423-057810-00B 27.441 acres out of E. Daniels AR-105657-00A 33.33% WI A-330 (MD 273/120 DR), Smith Shea Prospect Joint Operating Agreement County, Texas 42-423-057810-00C 27.441 acres out of E. Daniels A-330 (MD 273/120 DR), Smith County, Texas 42-423-057810-00D 27.441 acres out of E. Daniels A-330 (MD 273/120 DR), Smith County, Texas 42-423-057810-00E 27.441 acres out of E. Daniels A-330 (MD 273/120 DR), Smith County, Texas 42-423-057810-00F 27.441 acres out of E. Daniels A-330 (MD 273/120 DR), Smith County, Texas 42-423-057810-00G 27.441 acres out of E. Daniels A-330 (MD 273/120 DR), Smith County, Texas
Page 135 of 165 162
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- Shea Prospect 42-423-057810-00H Ann Sinclair Walker Wagner & Brown, Ltd. 7-20-97 3987 359 33.33% WI 42-423-057810-00I E. Faye Sinclair Wagner & Brown, Ltd. 7-20-97 4027 104 42-423-057810-00J Dr. Rayford Scott Wagner & Brown, Ltd. 7-20-97 4225 253 Jones 42-423-057811-00A Wagner & Brown, Ltd. 4-4-97 3987 376 Victorine W. Watson 42-423-057812-00A Wagner & Brown, Ltd. 6-4-97 4052 87 NationsBank of Texas, N.A., Trustee u/w 42-423-057813-00A Milton E. Daniel Trust Wagner & Brown, Ltd. 4-4-97 3947 15 John H. Brogan, Jr. FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ---------------------- ----------------------------------- -------------------------------------------- Shea Prospect 42-423-057810-00H 27.441 acres out of E. Daniels AR-105657-00A 33.33% WI A-330 (MD 273/120 DR), Smith Shea Prospect Joint Operating Agreement County, Texas 42-423-057810-00I 27.441 acres out of E. Daniels A-330 (MD 273/120 DR), Smith County, Texas 42-423-057810-00J 27.441 acres out of E. Daniels A-330 (MD 273/120 DR), Smith County, Texas 42-423-057811-00A 30.38 acres in D. Shaw A-917 Survey, (Deed 1129/188 DR) Smith County, Texas 42-423-057812-00A 49.79 acres in D. Shaw A-917 Survey (OGL 2288/479 DR) Smith County, Texas 42-423-057813-00A 102.60 acres, being tracts of 69.90 (Deed 47/531 DR) and 20.0 acres (60.0 acre tract Deed &/426 LESS North 40.0 acres as designated for unit for Roberson No. 1 well) E. Daniel A-330 Survey and 12.70 acres (WD 57/93 DR) D. Shaw A-917 Survey, Smith County, Texas
Page 136 of 165 163 EXHIBIT "A" ATTACHED TO AND MADE A PART OF THAT CERTAIN PURCHASE AND SALE AGREEMENT DATED EFFECTIVE AS OF OCTOBER 1, 1998, BY AND BETWEEN ATLANTIC RICHFIELD COMPANY (ARCO) AND FUTURE ACQUISITION 1995, LTD. (PURCHASER) IN ADDITION TO ANY OTHER DEPTH LIMITATIONS EXPRESSED HEREIN, IT IS THE EXPRESS INTENTION TO LIMIT THE DESCRIPTIONS OF ARCO'S INTEREST (IF ANY), FROM THE SURFACE DOWN TO THE BASE OF THE DEEPEST PRODUCING FORMATION UPSHUR COUNTY
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-459-000880-000 V. R. Wyatt Argo Royalty Company 4-29-31 83 610 E. A. Watts (8985) (Mineral Deed) 410968600 1.5625% RI - --------------------------- ---------------------- ----------------------- ---------------------- ----------- --------- --------- East Texas Field 42-459-000881-000 B. J. Claypool Argo Royalty Company 5-1-31 83 604 Webb #1 (Mineral Deed) 413546600 25% RI BPO 6.25% NRI BPO 40% RI APO 10% NRI APO FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ------------------ ----------------------------------- ---------------------------------------------- East Texas Field 42-459-000880-000 180 acres out of the C. H. Cooper E. A. Watts (8985) (Mineral Deed) Survey, A-81, Upshur County, 410968600 Texas, being more particularly 1.5625% RI described in that certain Mineral Deed dated April 29, 1931 and recorded in Volume 83, Page 610, Deed Records, Upshur County, Texas. - --------------------------- ------------------ ----------------------------------- ---------------------------------------------- East Texas Field 42-459-000881-000 70 acres of land on G. W. Hooper AR-104929 Webb #1 (Mineral Deed) H. R. Survey, being a part of Oil and Gas Lease dated July 19, 1994 between 413546600 Block 2, and more particularly Atlantic Richfield Company, Lessor, and Chinn 25% RI BPO described by metes and bounds in Exploration Company, Lessee, recorded in 6.25% NRI BPO Mineral Deed dated May 1, 1931, Volume 173, Page 158, Deed Records, Upshur 40% RI APO recorded in Volume 83, Page 604, County, Texas. 10% NRI APO Deed Records, Upshur County, Texas.
Page 137 of 165 164
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ----------------- -------------------------------- --------------------- --------- ---- ---- Glenwood Field 42-183-057630-00A Lottie F. Calhoun Family Amoco Production Co. 11/2/95 2895 234 (Cotton Valley Sand) Trust E. F. Johnson Gas Unit (d) 411001300 42-183-057630-00B Virginia Rives Johnson Amoco Production Co. 10/12/95 2886 441 33.33% WI 42-183-057630-00C Jacquelyn H. Denney Amoco Production Co. 11/2/95 2895 232 42-183-057632-00A B. J. Barclay et ux et al Amoco Production Co. 11/2/95 2895 225 42-183-057632-00B James Ray Northcutt Amoco Production Co. 11/2/95 2895 228 42-183-057632-00C Myra Lynn Ray Roberts Amoco Production Co. 11/2/95 2982 263 42-183-057632-00D Leonard Frank Ray et al Amoco Production Co. 11/2/95 2982 266 42-183-057698-00A Mary S. Florence et al Amoco Production Co. 9/27/95 2936 278 42-183-057698-00B Tommie Faye Starr Amoco Production Co. 9/19/95 2886 415 42-183-057698-00C Eleanor Bankhead Florence, et al Amoco Production Co. 9/27/95 2886 435 42-183-057698-00D Virginia Gibson Starr Amoco Production Co. 9/19/95 2886 433 42-183-057698-00E Edith B. Lester Amoco Production Co. 9/19/95 2886 411 42-183-057699-00A Ron Dunbar et al Crown Resources Co. 3/18/96 2964 81 42-183-057699-00B G. R. Dunbar Crown Resources Co. 3/18/96 2957 555 42-183-057700-00A Leneve D. Bell Amoco Production Co. 9/19/95 2886 457 42-183-057700-00B Bessie Dunbar Dickson Amoco Production Co. 9/19/95 2886 459 42-183-057700-00C Kathleen D. Mincey Amoco Production Co. 9/19/95 2886 429 42-183-057700-00D Deanne Buchanan Amoco Production Co. 9/19/95 2895 254 42-183-057700-00E Judy Banks Amoco Production Co. 9/19/95 2895 245 42-183-057748-00A Mary Lou Weiss Amoco Production Co. 10/12/95 2895 219 42-183-057748-00B Robert G. Barry et al Amoco Production Co. 10/12/95 2886 453 42-183-057748-00C Jacqueline T. Garrett Amoco Production Co. 10/12/95 2886 447 FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ------------------ ----------------------------------- ---------------------------------------------- Glenwood Field 42-183-057630-00A A tract or tracts of land located AR-105496 (Cotton Valley Sand) in Upshur County and Gregg Farmin Agreement dated December 12, 1996 E. F. Johnson Gas Unit (d) County, Texas, as more fully Between Amoco Production Company, Farmor, 411001300 42-183-057630-00B described in that certain And C W Resources, Inc., et al, Farmee 33.33% WI Assignment dated effective May 42-183-057630-00C 29, 1997, from Amoco Production AR-105498 Company to Atlantic Richfield Joint Operating Agreement dated December 12, 42-183-057632-00A Company, et al, recorded at 1996 between C W Resources, Inc., Operator, Volume 296, Page 216, Official And Atlantic Richfield Company, et al, 42-183-057632-00B Records of Upshur County, Texas. non-operators 42-183-057632-00C LIMITED IN DEPTH FROM THE SURFACE AR-105498-005 DOWN TO 100' BELOW THE TOTAL Designation of Gas Unit dated effective June 42-183-057632-00D DEPTH OF THE C W RESOURCES E. F. 11, 1997, by and between C W Resources, Inc. JOHNSON WELL. and Atlantic Richfield Company, et al 42-183-057698-00A 42-183-057698-00B 42-183-057698-00C 42-183-057698-00D 42-183-057698-00E 42-183-057699-00A 42-183-057699-00B 42-183-057700-00A 42-183-057700-00B 42-183-057700-00C 42-183-057700-00D 42-183-057700-00E 42-183-057748-00A 42-183-057748-00B 42-183-057748-00C
Page 138 of 165 165
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ----------------- -------------------------- --------------------- --------- ---- ---- Glenwood Field 42-183-057748-00D Mary Elizabeth Edwards Amoco Production Co. 10/12/95 2886 439 (Cotton Valley Sand) E. F. Johnson Gas Unit (d) 42-183-057748-00E Mary Katherine Block Amoco Production Co. 10/12/95 2886 421 411001300 (continued) 42-183-057748-00F Ben Johnson III, Ttee Amoco Production Co. 10/12/95 2886 444 42-183-057748-00G Hughleen Dunbar Fenton Crown Resources Co. 3/15/96 2957 562 42-183-057748-00H G. R. Dunbar Crown Resources Co. 3/15/96 2957 551 42-183-057748-00I J. R. Dunbar et ux Crown Resources Co. 3/15/96 2964 89 42-183-057748-00J David Terry III Crown Resources Co. 5/1/97 File # 9710955 42-183-057748-00K Sara J. Struges Brian Crown Resources Co. 5/1/97 File # 9710956 42-183-057748-00L Paul L. Whaley, Jr. Crown Resources Co. 5/6/97 File # 9710959 42-183-057748-00M Thomas L. Whaley Crown Resources Co. 5/10/97 File # 9710965 42-183-057748-00N Cummings Royalty Crown Resources Co. 5/8/97 File # 9710966 Acquisition Co., Inc. 42-183-057748-00O Royalty Exchange, Inc. Crown Resources Co. 5/8/97 File # 9710653 42-183-057748-00P Mack Camp Crown Resources Co. 5/1/97 File # 9710952 42-183-057748-00Q Jo Margaret Pitman Crown Resources Co. 4/30/97 File # 9710958 42-183-057748-00R Sarah L. Boone Crown Resources Co. 5/1/97 File # 9712770 42-183-057748-00S Katherine E. Thompson Crown Resources Co. 5/1/97 File # 9710951 42-183-057748-00T Legacy Royalty, Ltd. Crown Resources Co. 4/25/97 File # 9712773 42-183-057748-00U William G. McCullough Crown Resources Co. 5-6-97 File # 9712766 42-183-057748-00V Gus and Katherine L. Crown Resources Co. 5-2-97 File # 9710651 Carter Trust 42-183-057748-00W Eva Jean Blount Crown Resources Co. 4-24-97 File # 9710652 42-183-057748-00X Elaine Markham Clanton Crown Resources Co. 4-24-97 File # 9710963 42-183-057748-00Y Linda S. Gray McMahon Crown Resources Co. 5-6-97 File # 9710762 FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ------------------ ----------------------------------- ------------------------------------ Glenwood Field 42-183-057748-00D A tract or tracts of land located (Cotton Valley Sand) in Upshur County and Gregg E. F. Johnson Gas Unit (d) 42-183-057748-00E County, Texas, as more fully 411001300 described in that certain (continued) 42-183-057748-00F Assignment dated effective May 29, 1997, from Amoco Production 42-183-057748-00G Company to Atlantic Richfield Company, et al, recorded at 42-183-057748-00H Volume 296, Page 216, Official Records of Upshur County, Texas. 42-183-057748-00I LIMITED IN DEPTH FROM THE SURFACE 42-183-057748-00J DOWN TO 100' BELOW THE TOTAL DEPTH OF THE C W RESOURCES E. F. JOHNSON WELL. 42-183-057748-00K 42-183-057748-00L 42-183-057748-00M 42-183-057748-00N 42-183-057748-00O 42-183-057748-00P 42-183-057748-00Q 42-183-057748-00R 42-183-057748-00S 42-183-057748-00T 42-183-057748-00U 42-183-057748-00V 42-183-057748-00W 42-183-057748-00X 42-183-057748-00Y
Page 139 of 165 166
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ----------------- -------------------------- --------------------- --------- ---- ---- Glenwood Field 42-183-057748-00Z R. H. (Bobby) Smith Crown Resources Co. 4-15-97 File # 9708003 (Cotton Valley Sand) E. F. Johnson Gas Unit (d) 42-183-057748-0AA Verner Kelly Crown Resources Co. 4-15-97 File # 9710954 411001300 (continued) 42-183-057748-0AB Janet E. Sprout Crown Resources Co. 4-24-97 File # 9710950 42-183-057748-0AC Elizabeth Ellen Wyche Crown Resources Co. 4-16-97 File # 9708002 Robison 42-183-057748-0AD James Regan Wyche Crown Resources Co. 4-22-97 File # 9710957 42-183-057748-0AE Jean Terrell Crown Resources Co. 4-24-97 File # 9710964 42-183-057748-0AF Jane F. Terrell Crown Resources Co. 4-24-97 File # 9710949 42-183-057752-00A Robert H. Smith Amoco Production Co. 9-25-95 2886 431 42-183-057752-00B Marjorie Jekot Amoco Production Co. 9-25-95 2886 413 42-183-057752-00C Margaret C. Smead Amoco Production Co. 9-25-95 2886 461 42-183-057752-00D Jerry Tillery Crown Resources Co. 4-1-97 File # 9708001 42-183-057752-00E Joe Neil Tillery Crown Resources Co. 4-1-97 File # 9708000 42-183-057752-00F Imogene Brogdon Crown Resources Co. 4-1-97 File # 9710960 42-183-057752-00G Sandra Tillery Bass Crown Resources Co. 4-1-97 File # 9707081 42-183-057752-00H Louise Tillery Cornell Crown Resources Co. 4-1-97 File # 9707082 42-183-057752-00I Bryan T. Tillery Crown Resources Co. 4-1-97 File # 9712769 42-183-057752-00J Melonie Stanley Crown Resources Co. 4-1-97 File # 9707080 42-183-057754-00A Elnora H. Price Amoco Production Co. 9-19-95 2886 397 42-183-057754-00B Minnie Flanders Douglas Amoco Production Co. 9-19-95 2886 393 42-183-057754-00C Sue Boyd Duszik Amoco Production Co. 9-19-95 2886 401 42-183-057754-00D George Watson Fair Amoco Production Co. 9-19-95 2886 395 42-183-057754-00E Frances Flanders Amoco Production Co. 9-19-95 2886 389 42-183-057754-00F Frances Ray Hill Elliott Amoco Production Co. 9-19-95 2886 449 42-183-057754-00G Mary R. Corley Amoco Production Co. 9-19-95 2910 441 FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ------------------ ----------------------------------- ------------------------------------ Glenwood Field 42-183-057748-00Z A tract or tracts of land located (Cotton Valley Sand) in Upshur County and Gregg E. F. Johnson Gas Unit (d) 42-183-057748-0AA County, Texas, as more fully 411001300 described in that certain (continued) 42-183-057748-0AB Assignment dated effective May 29, 1997, from Amoco Production 42-183-057748-0AC Company to Atlantic Richfield Company, et al, recorded at Volume 296, Page 216, Official 42-183-057748-0AD Records of Upshur County, Texas. 42-183-057748-0AE LIMITED IN DEPTH FROM THE SURFACE DOWN TO 100' BELOW THE TOTAL 42-183-057748-0AF DEPTH OF THE C W RESOURCES E. F. JOHNSON WELL. 42-183-057752-00A 42-183-057752-00B 42-183-057752-00C 42-183-057752-00D 42-183-057752-00E 42-183-057752-00F 42-183-057752-00G 42-183-057752-00H 42-183-057752-00I 42-183-057752-00J 42-183-057754-00A 42-183-057754-00B 42-183-057754-00C 42-183-057754-00D 42-183-057754-00E 42-183-057754-00F 42-183-057754-00G
Page 140 of 165 167
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ----------------- -------------------------- --------------------- --------- ---- ---- Glenwood Field 42-183-057754-00H Cecil Flanders Amoco Production Co. 9-19-95 2886 399 (Cotton Valley Sand) E. F. Johnson Gas Unit (d) 42-183-057754-00I Jan Hooker Amoco Production Co. 9-19-95 2886 417 411001300 (continued) 42-183-057754-00J Michael E. Curtis et al Amoco Production Co. 9-19-95 2886 391 42-183-057754-00K Bettie W. Ray Walden Amoco Production Co. 9-19-95 2910 439 42-183-057758-00A James Samuel Davis Crown Resources Co. 3-28-97 3071 298 42-459-057641-00A Judith M. Wrucke R. Lacy, Inc. 3-17-95 2845 492 42-459-057641-00B Claude Graves, III R. Lacy, Inc. 3-29-95 2845 487 42-459-057641-00C Michael Andrew Stieren R. Lacy, Inc. 8-6-94 171 395 42-459-057641-00D Jennifer L. Stieren R. Lacy, Inc. 8-6-94 171 398 42-459-057641-00E Georgia Ann Stieren R. Lacy, Inc. 8-6-94 171 401 42-459-057641-00F Doris K. Ehrenberg R. Lacy, Inc. 3-17-95 196 212 42-459-057641-00G Gayla S. Graves R. Lacy, Inc. 3-17-95 196 220 42-459-057641-00H Claude Graves, III R. Lacy, Inc. 3-17-95 196 216 42-459-057705-00A Annette Felsenthal, et al R. Lacy, Inc. 8-30-94 171 379 42-459-057705-00B Mary Lou Weiss R. Lacy, Inc. 8-3-94 167 585 42-459-057705-00C William T. Lee R. Lacy, Inc. 7-27-95 200 788 42-459-057705-00D Bessie D. Dickson Crown Resources Co. 4-26-96 225 909 42-459-057705-00E Jeanne F. Jones Crown Resources Co. 5-8-96 224 952 42-459-057705-00F Helen G. Taft Crown Resources Co. 5-3-96 224 989 42-459-057705-00G Grace B. Ward Crown Resources Co. 4-24-96 224 993 42-459-057705-00H Alfred M. Yeatts Crown Resources Co. 4-25-96 224 997 42-459-057705-00I Maydelle Drake Crown Resources Co. 4-25-96 224 980 42-459-057705-00J Bobbie Preddy Schleimer, Gdn Amoco Production Co. 6-4-96 229 225 FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ------------------ ----------------------------------- ------------------------------------ Glenwood Field 42-183-057754-00H A tract or tracts of land located (Cotton Valley Sand) in Upshur County and Gregg E. F. Johnson Gas Unit (d) 42-183-057754-00I County, Texas, as more fully 411001300 described in that certain (continued) 42-183-057754-00J Assignment dated effective May 29, 1997, from Amoco Production 42-183-057754-00K Company to Atlantic Richfield Company, et al, recorded at 42-183-057758-00A Volume 296, Page 216, Official Records of Upshur County, Texas. 42-459-057641-00A LIMITED IN DEPTH FROM THE SURFACE 42-459-057641-00B DOWN TO 100' BELOW THE TOTAL DEPTH OF THE C W RESOURCES E. F. 42-459-057641-00C JOHNSON WELL. 42-459-057641-00D 42-459-057641-00E 42-459-057641-00F 42-459-057641-00G 42-459-057641-00H 42-459-057705-00A 42-459-057705-00B 42-459-057705-00C 42-459-057705-00D 42-459-057705-00E 42-459-057705-00F 42-459-057705-00G 42-459-057705-00H 42-459-057705-00I 42-459-057705-00J
Page 141 of 165 168
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ----------------- -------------------------- --------------------- --------- ---- ---- Glenwood Field 42-459-057706-00A Charles Smith R. Lacy, Inc. 8-9-94 168 252 (Cotton Valley Sand) E. F. Johnson Gas Unit (d) 42-459-057706-00B Peter C. Johnson R. Lacy, Inc. 6-3-94 164 929 411001300 (continued) 42-459-057706-00C Mary G. Collier R. Lacy, Inc. 6-3-94 164 919 42-459-057706-00D Mary E. Johnson R. Lacy, Inc. 6-3-94 164 932 42-459-057706-00E Edward M. Johnson R. Lacy, Inc. 6-3-94 164 943 42-459-057706-00F Clifford Lee Smith R. Lacy, Inc. 8-9-94 169 505 42-459-057706-00G Frank H. Smith, Jr. R. Lacy, Inc. 8-9-94 171 404 42-459-057706-00H Bernie Johnson Williams R. Lacy, Inc. 6-3-94 163 421 42-459-057706-00I Barbara S. Carpenter R. Lacy, Inc. 8-9-94 174 163 42-459-057706-00J J. T. Johnson R. Lacy, Inc. 6-3-94 164 937 42-459-057711-00A Frances Bryant, et al R. Byron Roach, Ttee 7-27-94 169 212 42-459-057711-00B Alpha Earl Swink Burke R. Byron Roach, Ttee 7-27-94 169 214 42-459-057711-00C Kyal Williams, Agent R. Byron Roach, Ttee 7-27-94 169 291 42-459-057711-00D Catherine L. Gilbert et al R. Byron Roach, Ttee 7-27-94 169 223 42-459-057711-00E George Grogan R. Byron Roach, Ttee 7-27-94 169 225 42-459-057711-00F Charles H. Mills R. Byron Roach, Ttee 7-27-94 169 252 42-459-057711-00G Rochelle Sohl Sanders R. Byron Roach, Ttee 7-28-94 172 776 42-459-057711-00H James Richardson Sohl R. Byron Roach, Ttee 7-28-94 172 774 42-459-057711-00I Sydonia Sonnenburg R. Byron Roach, Ttee 7-27-94 169 280 42-459-057711-00J Robin Sohl Ritchie R. Byron Roach, Ttee 7-28-94 169 278 42-459-057713-00A Chieftain Exploration Co., Amoco Production Co 11-25-96 245 371 Inc. 42-459-057719-00A Matt S. McKenzie R. Byron Roach, Ttee 10-2-94 185 946 42-459-057742-000 James Earl Andrews et al Amoco Production Co. 12-28-95 214 1 FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ------------------ ----------------------------------- ------------------------------------ Glenwood Field 42-459-057706-00A A tract or tracts of land located (Cotton Valley Sand) in Upshur County and Gregg E. F. Johnson Gas Unit (d) 42-459-057706-00B County, Texas, as more fully 411001300 described in that certain (continued) 42-459-057706-00C Assignment dated effective May 29, 1997, from Amoco Production 42-459-057706-00D Company to Atlantic Richfield Company, et al, recorded at 42-459-057706-00E Volume 296, Page 216, Official Records of Upshur County, Texas. 42-459-057706-00F LIMITED IN DEPTH FROM THE SURFACE 42-459-057706-00G DOWN TO 100' BELOW THE TOTAL DEPTH OF THE C W RESOURCES E. F. 42-459-057706-00H JOHNSON WELL. 42-459-057706-00I 42-459-057706-00J 42-459-057711-00A 42-459-057711-00B 42-459-057711-00C 42-459-057711-00D 42-459-057711-00E 42-459-057711-00F 42-459-057711-00G 42-459-057711-00H 42-459-057711-00I 42-459-057711-00J 42-459-057713-00A 42-459-057719-00A 42-459-057742-000
Page 142 of 165 169
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ----------------- -------------------------- --------------------- --------- ---- ---- Glenwood Field Unknown Derek Sean Kowalke Crown Resources Co. 4-2-97 File # 9710953 (Cotton Valley Sand) E. F. Johnson Gas Unit (d) Unknown J. Patterson Lawson Crown Resources Co. 4-25-97 File # 9712765 411001300 (continued) Unknown Bank One Texas, Trustee Crown Resources Co. 5-8-97 File # 9710969 Unknown Judy Gray Bagheri Crown Resources Co. 6-2-97 File # 9712768 Unknown Terry W. Lindsey Crown Resources Co. 6-2-97 File # 9715541 Unknown Arthur L. Anderson Crown Resources Co. 6-2-97 File # 9713777 Unknown Chevron U.S.A., Inc. Amoco Production Co. 2-1-97 249 92 Unknown Coastal Oil & Gas Corp. Crown Resources Co. 6-10-97 263 835 Unknown Catherine M. Richard Crown Resources Co. 5-2-97 File # 9712767 Unknown Doris P. Crowley R. Lacy, Inc. 7-25-94 168 233 Unknown Nations Bank of Texas, N.A. Amoco Production Co. 10-5-94 2756 15 - --------------------------- ----------------- -------------------------- --------------------- --------- ---- ---- Glenwood Field 42-459-057734-000 Marie Lock Amoco Production Co. 2-13-96 216 127 (Cotton Valley Sand) Petty Gas Unit (d) 42-459-057696-00A Robert H. Petty Amoco Production Co. 7-13-95 199 229 415000700 33.33% WI 42-459-057696-00B John C. Sans Crown Resources Co. 7-18-95 197 729 42-459-057696-00C James Elder Willeford Amoco Production Co. 7-13-95 197 749 42-459-057696-00D Mildred Porter Penick Amoco Production Co. 7-21-95 197 717 42-459-057696-00E Calvin B. Willeford Amoco Production Co. 7-13-95 199 249 42-459-057696-00F Sandra Walker Martin Amoco Production Co. 7-20-95 199 218 42-459-057696-00G Jimmy L. Walker Amoco Production Co. 7-20-95 199 247 42-459-057696-00H B.J. Porter, Jr. Amoco Production Co. 7-21-95 199 231 42-459-057696-00I Teresa Mahaffey Amoco Production Co. 7-13-95 199 216 42-459-057696-00J Clairene R. Dunn Amoco Production Co. 7-13-95 201 524 42-459-057696-00K Mary Jene Richardson Amoco Production Co. 7-13-95 197 720 FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ------------------ ----------------------------------- ------------------------------------ Glenwood Field Unknown A tract or tracts of land located (Cotton Valley Sand) in Upshur County and Gregg E. F. Johnson Gas Unit (d) Unknown County, Texas, as more fully 411001300 described in that certain (continued) Unknown Assignment dated effective May 29, 1997, from Amoco Production Unknown Company to Atlantic Richfield Company, et al, recorded at Unknown Volume 296, Page 216, Official Records of Upshur County, Texas. Unknown LIMITED IN DEPTH FROM THE SURFACE Unknown DOWN TO 100' BELOW THE TOTAL DEPTH OF THE C W RESOURCES E. F. Unknown JOHNSON WELL. Unknown Unknown Unknown - --------------------------- ------------------ ----------------------------------- ------------------------------------ Glenwood Field 42-459-057734-000 A tract or tracts of land located AR-105496 (Cotton Valley Sand) in Upshur County, Texas, as more Farmin Agreement dated December 12, 1996 Petty Gas Unit (d) 42-459-057696-00A fully described in that certain Between Amoco Production Company, Farmor, 415000700 Assignment dated effective And C W Resources, Inc., et al, Farmee 33.33% WI 42-459-057696-00B January 22, 1997, from Amoco Production Company to Atlantic AR-105498 42-459-057696-00C Richfield Company, et al, Joint Operating Agreement dated December 12, recorded at Volume 296, Page 233, 1996 between C W Resources, Inc., Operator, 42-459-057696-00D Official Records of Upshur And Atlantic Richfield Company, et al, County, Texas. non-operators 42-459-057696-00E LIMITED FROM THE SURFACE DOWN TO AR-105498-006 42-459-057696-00F 100' BELOW THE TOTAL DEPTH Designation of Gas Unit dated effective April DRILLED IN THE C W RESOURCES 3, 1997, by and between C W Resources, Inc. 42-459-057696-00G PETTY GAS UNIT NO. 1 WELL. and Atlantic Richfield Company, et al 42-459-057696-00H 42-459-057696-00I 42-459-057696-00J 42-459-057696-00K
Page 143 of 165 170
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ----------------- -------------------------- --------------------- --------- ---- ---- Glenwood Field 42-459-057696-00L Jimmie D. Hall Amoco Production Co. 7-13-95 197 695 (Cotton Valley Sand) Petty Gas Unit (d) 42-459-057696-00M Norma J. Marshall et al Amoco Production Co. 7-20-95 203 447 415000700 (continued) 42-459-057696-00N C. Dean Walker Amoco Production Co. 2-23-96 218 553 42-459-057696-00O Kenneth H. Perry et ux Amoco Production Co. 12-6-96 244 317 42-459-057783-00A Margaret C. Leifeste Amoco Production Co. 4-22-96 222 898 42-459-057783-00B Shannon Dykes, et al Amoco Production Co. 4-30-96 224 839 42-459-057783-00C James Rust Crosby Amoco Production Co. 4-26-96 224 847 42-459-057783-00D H. D. Fullbright Amoco Production Co. 1-7-97 250 611 42-459-057783-00E Nancy T. Stembridge Amoco Production Co. 1-7-97 256 808 42-459-057783-00F Florence Lindvall Amoco Production Co. 1-7-97 247 365 42-459-057784-00A D. T. Gordon Amoco Production Co. 12-20-96 245 335 42-459-057784-00B Mary Beth Heiserman Amoco Production Co. 12-20-96 246 83 42-459-057784-00C Clyde H. Gordon Amoco Production Co. 12-20-96 250 680 42-459-057628-00A Kenneth H. Perry et ux Amoco Production Co. 1-19-96 214 480 42-459-057649-00A Margaret Goldreyer Amoco Production Co. 3-13-95 188 978 42-459-057649-00B Adam Rubey Amoco Production Co. 3-13-95 189 402 42-459-057649-00C Stuart Bourne Amoco Production Co. 3-13-95 187 965 42-459-057649-00D Lowe Figour Amoco Production Co. 3-13-95 189 359 42-459-057649-00E Arthur C. Rubey, III Amoco Production Co. 3-13-95 189 399 42-459-057652-00A Charles Snider et ux Amoco Production Co. 3-30-95 188 1000 42-459-057652-00B Dorothy Snider Bond Amoco Production Co. 3-30-95 189 345 42-459-057652-00C Debbie Snider Petta Amoco Production Co. 3-30-95 188 984 42-459-057652-00D Karen Snider Williams Amoco Production Co. 3-30-95 189 402 42-459-057652-00E Susan Snider Turner Amoco Production Co. 3-30-95 195 965 FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ------------------ ----------------------------------- ------------------------------------ Glenwood Field 42-459-057696-00L A tract or tracts of land located (Cotton Valley Sand) in Upshur County, Texas, as more Petty Gas Unit (d) 42-459-057696-00M fully described in that certain 415000700 Assignment dated effective (continued) 42-459-057696-00N January 22, 1997, from Amoco Production Company to Atlantic 42-459-057696-00O Richfield Company, et al, recorded at Volume 296, Page 233, 42-459-057783-00A Official Records of Upshur County, Texas. 42-459-057783-00B LIMITED FROM THE SURFACE DOWN TO 42-459-057783-00C 100' BELOW THE TOTAL DEPTH DRILLED IN THE C W RESOURCES 42-459-057783-00D PETTY GAS UNIT NO. 1 WELL. 42-459-057783-00E 42-459-057783-00F 42-459-057784-00A 42-459-057784-00B 42-459-057784-00C 42-459-057628-00A 42-459-057649-00A 42-459-057649-00B 42-459-057649-00C 42-459-057649-00D 42-459-057649-00E 42-459-057652-00A 42-459-057652-00B 42-459-057652-00C 42-459-057652-00D 42-459-057652-00E
Page 144 of 165 171
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ----------------- -------------------------- --------------------- --------- ---- ---- Glenwood Field 42-459-057652-00G William B. Rubey Estate Amoco Production Co. 3-13-95 188 995 (Cotton Valley Sand) Petty Gas Unit (d) 42-459-057652-00H Christina Rubey Baar Amoco Production Co. 3-13-95 188 971 415000700 (continued) 42-459-057652-00I Marion Seward Rubey Amoco Production Co. 3-13-95 187 1008 42-459-057652-00J Robert Neal Rubey Amoco Production Co. 3-13-95 191 300 42-459-057652-00K William B. Rubey Jr. Est Amoco Production Co. 3-13-95 188 988 42-459-057670-00A George S. Heyer, Jr. Amoco Production Co. 4-10-96 226 737 42-459-057670-00B Henri L. Tallichet Amoco Production Co. 4-10-96 222 912 42-459-057670-00C George S. Tallichet Amoco Production Co. 4-10-96 224 842 42-459-057670-00D Robert L. Bradley et al Amoco Production Co. 3-25-96 222 892 42-459-057757-00A Marian Lyeth Davis Amoco Production Co. 3-13-95 189 352 42-459-057785-00A Goodrich-Malloy Trust Crown Resources Co. 2-10-97 253 237 42-459-057785-00B John F. Malloy et al Crown Resources Co. 6-3-97 264 508 42-459-057785-00C Robert R. Goodrich Amoco Production Co. 10-9-97 275 57 Unknown Donald R. Burgett et ux C W Resources Co. 1-3-97 247 948 FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ------------------ ----------------------------------- ------------------------------------ Glenwood Field 42-459-057652-00G A tract or tracts of land located (Cotton Valley Sand) in Upshur County, Texas, as more Petty Gas Unit (d) 42-459-057652-00H fully described in that certain 415000700 Assignment dated effective (continued) 42-459-057652-00I January 22, 1997, from Amoco Production Company to Atlantic 42-459-057652-00J Richfield Company, et al, recorded at Volume 296, Page 233, 42-459-057652-00K Official Records of Upshur County, Texas. 42-459-057670-00A LIMITED FROM THE SURFACE DOWN TO 42-459-057670-00B 100' BELOW THE TOTAL DEPTH DRILLED IN THE C W RESOURCES 42-459-057670-00C PETTY GAS UNIT NO. 1 WELL. 42-459-057670-00D 42-459-057757-00A 42-459-057785-00A 42-459-057785-00B 42-459-057785-00C Unknown
Page 145 of 165 172
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ----------------- -------------------------- --------------------- --------- ---- ---- Glenwood Field 42-459-057704-00A Sylvia M. Fowler R. Byron Roach, Trustee 8-9-94 169 221 (Cotton Valley Sand) Rose Kirkpatrick Gas Unit (d) 410900700 33.33% WI BPO 25.00% NRI BPO 23.331% WI APO 17.50% NRI APO 42-459-057704-00B Cathy Moore Hunter R. Byron Roach, Trustee 8-9-94 169 232 42-459-057704-00C Nicky L. Roberts, et al R. Byron Roach, Trustee 8-9-94 169 276 42-459-057706-00A Charles Smith R. Lacy, Inc. 8-9-94 168 252 42-459-057706-00B Peter C. Johnson R. Lacy, Inc. 6-3-94 164 929 42-459-057706-00C Mary G. Collier R. Lacy, Inc. 6-3-94 164 919 42-459-057706-00D Mary E. Johnson R. Lacy, Inc. 6-3-94 164 932 42-459-057706-00E Edward M. Johnson R. Lacy, Inc. 6-3-94 164 943 42-459-057706-00F Clifford Lee Smith R. Lacy, Inc. 8-9-94 169 505 42-459-057706-00G Frank H. Smith, Jr. R. Lacy, Inc. 8-9-94 171 404 42-459-057706-00H Bernie Lee Johnson Williams R. Lacy, Inc. 6-3-94 163 421 42-459-057706-00I Barbara S. Carpenter R. Lacy, Inc. 8-9-94 171 404 FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ------------------ ----------------------------------- ------------------------------------ Glenwood Field 42-459-057704-00A A tract or tracts of land located AR-105496 (Cotton Valley Sand) in Upshur County and Gregg Farmin Agreement dated December 12, 1996. Rose Kirkpatrick Gas Unit County, Texas, as more fully (d) described in that certain AR-105498 410900700 unrecorded Assignment dated Joint Operating Agreement dated December 12, 33.33% WI BPO effective May 1, 1997, from Amoco 1996. 25.00% NRI BPO Production Company to Atlantic 23.331% WI APO Richfield Company 17.50% NRI APO 42-459-057704-00B LIMITED TO THAT INTERVAL FROM THE SURFACE DOWN TO 100' BELOW THE 42-459-057704-00C TOTAL DEPTH OF THE C W RESOURCES ROSE KIRKPATRICK GAS UNIT WELL 42-459-057706-00A NO. 1. 42-459-057706-00B 42-459-057706-00C 42-459-057706-00D 42-459-057706-00E 42-459-057706-00F 42-459-057706-00G 42-459-057706-00H 42-459-057706-00I
Page 146 of 165 173
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ----------------- -------------------------- --------------------- --------- ---- ---- Glenwood Field 42-459-057706-00J J. T. Johnson R. Lacy, Inc. 6-3-94 164 937 (Cotton Valley Sand) Rose Kirkpatrick Gas Unit 42-459-057740-00A Kathleen D. Mincey R. Lacy, Inc. 6-6-94 164 436 (d) 410900700 42-459-057740-00B Nancy Sain Henderson R. Lacy, Inc. 6-6-94 164 434 (continued) 42-459-057740-00C Judy D. Banks R. Lacy, Inc. 6-6-94 164 423 42-459-057740-00D Deanne D. Buchanan R. Lacy, Inc. 6-6-94 164 426 42-459-057740-00E A. R. Sweeney R. Lacy, Inc. 6-6-94 162 419 42-459-057740-00F LeNeve Dunbar Bell R. Lacy, Inc. 6-6-94 163 399 42-459-057740-00G Rowena Chodrow R. Lacy, Inc. 6-22-94 164 960 42-459-057740-00H Allan Earl Wisenbaker, Amoco Production Co. 7-17-96 235 51 et al 42-459-057740-00I The Newby Foresee Trust, J. Don Westbrook 5-25-94 168 285 et al 42-459-057741-00A Preston D. Kiel R. Lacy, Inc. 9-19-97 168 129 42-459-057741-00B Kaplan Partners, Ltd. R. Lacy, Inc. 6-9-94 164 974 42-459-057741-00C Preston D. Kiel R. Byron Roach, Trustee 8-9-94 169 243 42-459-057741-00D Nancy Sain Henderson Crown Resources Co. 2-18-97 253 253 42-459-057741-00E Doris C. Rea Crown Resources Co. 2-17-97 253 278 42-459-057741-00F Cole McCrory Crown Resources Co. 2-17-97 257 341 42-459-057741-00G Mary Bell Cherry Crown Resources Co. 2-12-97 257 347 42-459-057741-00H Cerre B. Diboll Crown Resources Co. 2-17-97 257 339 42-459-057741-00I Lewis B. Pitts Crown Resources Co. 2-18-97 253 276 42-459-057741-00J Pat McCrory Crown Resources Co. 2-17-97 261 334 42-459-057741-00K Rebecca Jenkins Crown Resources Co. 2-27-97 257 377 42-459-057741-00L Melonie Stanley Crown Resources Co. 2-27-97 254 883 FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ------------------ ----------------------------------- ------------------------------------ Glenwood Field 42-459-057706-00J A tract or tracts of land located (Cotton Valley Sand) in Upshur County and Gregg Rose Kirkpatrick Gas Unit 42-459-057740-00A County, Texas, as more fully (d) described in that certain 410900700 42-459-057740-00B unrecorded Assignment dated (continued) effective May 1, 1997, from Amoco 42-459-057740-00C Production Company to Atlantic Richfield Company 42-459-057740-00D LIMITED TO THAT INTERVAL FROM THE 42-459-057740-00E SURFACE DOWN TO 100' BELOW THE TOTAL DEPTH OF THE C W RESOURCES 42-459-057740-00F ROSE KIRKPATRICK GAS UNIT WELL NO. 1. 42-459-057740-00G 42-459-057740-00H 42-459-057740-00I 42-459-057741-00A 42-459-057741-00B 42-459-057741-00C 42-459-057741-00D 42-459-057741-00E 42-459-057741-00F 42-459-057741-00G 42-459-057741-00H 42-459-057741-00I 42-459-057741-00J 42-459-057741-00K 42-459-057741-00L
Page 147 of 165 174
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ----------------- -------------------------- --------------------- --------- ---- ---- Glenwood Field 42-459-057741-00M George G. Vaught, Jr. Crown Resources Co. 2-28-97 253 282 (Cotton Valley Sand) Rose Kirkpatrick Gas 42-459-057741-00N McCulliss Resources Company, Crown Resources Co. 2-28-97 253 274 Unit (d) Inc. 410900700 (continued) 42-459-057741-00O Bryan T. Tillery Crown Resources Co. 2-27-97 257 343 42-459-057741-00P C. O. Christian Crown Resources Co. 5-7-97 269 563 42-459-057741-00Q Imogene Brogdon Crown Resources Co. 2-16-97 269 561 42-459-057741-00R Jerry Tillery Crown Resources Co. 2-27-97 257 333 42-459-057741-00S Louise Tillery Cornell Crown Resources Co. 2-27-97 257 335 42-459-057741-00T Joe Neil Tillery Crown Resources Co. 2-26-97 253 280 42-459-057741-00U Sandra Tillery Bass Crown Resources Co. 2-25-97 253 233 42-459-057741-00V Harriett I. Bryant Crown Resources Co. 3-7-97 257 331 42-183-057746-00A Burford I. King, et al Amoco Production Co. 11-1-95 2895 257 42-183-057747-00A Martha Rose Biggs, Trustee Amoco Production Co. 11-1-95 2895 252 42-183-057747-00B Leneve D. Bell Amoco Production Co. 10-26-95 2886 423 42-183-057747-00C Deanne Buchanan Amoco Production Co. 10-26-95 2886 386 42-183-057747-00D Stanley C. Draper Amoco Production Co. 11-1-95 2895 250 42-183-057747-00E John David Draper Amoco Production Co. 11-1-95 2895 248 42-183-057747-00F Judy Banks Amoco Production Co. 10-26-95 2895 242 42-183-057747-00G Bessie D. Dickson Amoco Production Co. 10-26-95 2886 425 42-183-057747-00H Kathleen D. Mincey Amoco Production Co. 10-26-95 2952 284 42-183-057749-00A Ron Dunbar, et al Crown Resources Co. 3-15-96 2964 85 42-183-057751-00A Anne M. Ferguson Amoco Production Co. 10-11-95 2895 221 42-183-057751-00B Nannie Jane Sims Amoco Production Co. 10-11-95 2886 455 FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ------------------ ----------------------------------- ------------------------------------ Glenwood Field 42-459-057741-00M A tract or tracts of land located (Cotton Valley Sand) in Upshur County and Gregg Rose Kirkpatrick Gas 42-459-057741-00N County, Texas, as more fully Unit (d) described in that certain 410900700 unrecorded Assignment dated (continued) 42-459-057741-00O effective May 1, 1997, from Amoco Production Company to Atlantic 42-459-057741-00P Richfield Company 42-459-057741-00Q LIMITED TO THAT INTERVAL FROM THE SURFACE DOWN TO 100' BELOW THE 42-459-057741-00R TOTAL DEPTH OF THE C W RESOURCES ROSE KIRKPATRICK GAS UNIT WELL 42-459-057741-00S NO. 1. 42-459-057741-00T 42-459-057741-00U 42-459-057741-00V 42-183-057746-00A 42-183-057747-00A 42-183-057747-00B 42-183-057747-00C 42-183-057747-00D 42-183-057747-00E 42-183-057747-00F 42-183-057747-00G 42-183-057747-00H 42-183-057749-00A 42-183-057751-00A 42-183-057751-00B
Page 148 of 165 175
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ----------------- -------------------------- --------------------- --------- ---- ---- Glenwood Field 42-183-057751-00C Lex B. Smith Amoco Production Co. 10-11-95 2895 223 (Cotton Valley Sand) Rose Kirkpatrick Gas Unit 42-183-057751-00D Allan Earl Wisenbaker, Amoco Production Co. 7-17-96 2989 627 (d) et al 410900700 (continued) 42-183-057753-00A Marvin H. Cowan, Jr. Amoco Production Co. 9-20-95 2886 427 42-183-057753-00B Roy O. Cowan Amoco Production Co. 9-20-95 2895 238 42-183-057753-00C Carol Hooper Amoco Production Co. 9-20-95 2886 403 42-183-057753-00D Ann Hooper Stacy Amoco Production Co. 9-20-95 2886 406 42-183-057753-00E Susan Schmidt Amoco Production Co. 9-20-95 2886 409 42-183-057753-00F W. R. Hughes Trust Amoco Production Co. 9-20-95 2886 451 42-183-057753-00G James Warren Cowan Amoco Production Co. 10-17-95 2886 419 42-183-057753-00H Carol C. Prinz, et al Amoco Production Co. 9-20-95 2895 236 42-183-057753-00I James Earl Andrews, et al Amoco Production Co. 12-28-95 2924 368 42-183-057753-00J Robert L. Cowan Amoco Production Co. 10-17-95 2895 240 42-183-057753-00K East Texas Royalty and R. Lacy, Inc. 1-20-95 2790 63 Investment Co. 42-183-057755-00A Blaine Aric Amoco Production Co. 9-19-95 2952 290 42-183-057755-00B Vivian Elise Dulling Amoco Production Co. 9-19-95 2910 435 42-183-058125-00A Boatmen's Trust Co. of Crown Resources Co. 5-6-97 272 240 Arkansas, et al 42-459-057785-00A Goodrich-Malloy Trust Crown Resources Co. 2-10-97 253 237 42-459-057785-00B John F. Malloy, et al Crown Resources Co. 6-3-97 264 508 42-459-057785-00C Robert R. Goodrich Amoco Production Co. 10-9-97 296 233 FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ------------------ ----------------------------------- ------------------------------------ Glenwood Field 42-183-057751-00C A tract or tracts of land located (Cotton Valley Sand) in Upshur County and Gregg Rose Kirkpatrick Gas Unit 42-183-057751-00D County, Texas, as more fully (d) described in that certain 410900700 unrecorded Assignment dated (continued) 42-183-057753-00A effective May 1, 1997, from Amoco Production Company to Atlantic 42-183-057753-00B Richfield Company 42-183-057753-00C LIMITED TO THAT INTERVAL FROM THE SURFACE DOWN TO 100' BELOW THE 42-183-057753-00D TOTAL DEPTH OF THE C W RESOURCES ROSE KIRKPATRICK GAS UNIT WELL 42-183-057753-00E NO. 1. 42-183-057753-00F 42-183-057753-00G 42-183-057753-00H 42-183-057753-00I 42-183-057753-00J 42-183-057753-00K 42-183-057755-00A 42-183-057755-00B 42-183-058125-00A 42-459-057785-00A 42-459-057785-00B 42-459-057785-00C
Page 149 of 165 176
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ----------------- -------------------------- --------------------- --------- ---- ---- Glenwood Field 42-459-057625-00A Phillip D. Sensing, et al Amoco Production Co. 2/13/96 218 545 (Cotton Valley Sand) Rubey Estate Gas Unit (d) 42-459-057625-00B Edgar B. Sensing Amoco Production Co. 2/13/96 218 547 416000200 27.204487% WI 42-459-057628-00A Kenneth H. Perry et ux Amoco Production Co. 1/19/96 214 480 42-459-057649-00A Margaret Goldreyer Amoco Production Co. 3/13/95 188 978 42-459-057649-00B Adam Rubey Amoco Production Co. 3/13/95 189 402 42-459-057649-00C Stuart Bourne Amoco Production Co. 3/13/95 187 965 42-459-057649-00D Lowe Figour Amoco Production Co. 3/13/95 189 359 42-459-057649-00E Arthur C. Rubey, III Amoco Production Co. 3/13/95 189 399 42-459-057652-00A Charles Snider et ux Amoco Production Co. 3/30/95 188 1000 42-459-057652-00B Dorothy Snider Bond Amoco Production Co. 3/30/95 189 345 42-459-057652-00C Debbie Snider Petta Amoco Production Co. 3/30/95 188 984 42-459-057652-00D Karen Snider Williams Amoco Production Co. 3/30/95 189 409 42-459-057652-00E Susan Snider Turner Amoco Production Co. 3/30/95 195 46 42-459-057652-00F Joe Snider et ux Lajuan Amoco Production Co. 3/30/95 188 1004 42-459-057652-00G William B. Rubey Estate Amoco Production Co. 3/13/95 188 995 42-459-057652-00H Christina Rubey Baar Amoco Production Co. 3/13/95 188 971 42-459-057652-00I Marion Seward Rubey Amoco Production Co. 3/13/95 187 1008 42-459-057652-00J Robert Neal Rubey Amoco Production Co. 3/13/95 191 300 42-459-057652-00K William B. Rubey Jr. Est Amoco Production Co. 3/13/95 188 988 42-459-057653-000 Larry Dean Bishop et ux Amoco Production Co. 12/11/96 247 356 42-459-057654-00A Lee Hall Tillman Amoco Production Co. 12/6/96 247 358 42-459-057655-00A ETEX Telephone Co-op Amoco Production Co. 4/10/95 222 896 FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ------------------ ----------------------------------- ---------------------------------------------- Glenwood Field 42-459-057625-00A A tract or tracts of land located AR-105496 (Cotton Valley Sand) in Upshur County, Texas, as more Farmin Agreement dated December 12, 1996 Rubey Estate Gas Unit (d) 42-459-057625-00B fully described in that certain Between Amoco Production Company, Farmor, 416000200 Assignment dated effective March And C W Resources, Inc., et al, Farmee 27.204487% WI 42-459-057628-00A 1, 1997, from Amoco Production Company to Atlantic Richfield AR-105498 42-459-057649-00A Company, et al, recorded at Joint Operating Agreement dated December 12, Volume 296, Page 245, Official 1996 between C W Resources, Inc., Operator, 42-459-057649-00B Records of Upshur County, Texas. And Atlantic Richfield Company, et al, non-operators 42-459-057649-00C LIMITED IN DEPTH FROM THE SURFACE DOWN TO 100' BELOW THE DEPTH AR-105498-003 42-459-057649-00D DRILLED IN THE C W RESOURCES Designation of Gas Unit dated effective RUBEY ESTATE GAS UNIT NO. 1 WELL. December 12, 1996 between C W Resources, Inc. 42-459-057649-00E and Atlantic Richfield Company, et al 42-459-057652-00A 42-459-057652-00B 42-459-057652-00C 42-459-057652-00D 42-459-057652-00E 42-459-057652-00F 42-459-057652-00G 42-459-057652-00H 42-459-057652-00I 42-459-057652-00J 42-459-057652-00K 42-459-057653-000 42-459-057654-00A 42-459-057655-00A
Page 150 of 165 177
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ----------------- -------------------------- --------------------- --------- ---- ---- Glenwood Field 42-459-057662-00A Ruth McAdams Ralston Amoco Production Co. 5/14/96 224 831 (Cotton Valley Sand) Rubey Estate Gas Unit (d) 42-459-057663-00A Richard L. Parker et ux Amoco Production Co. 5/14/96 227 242 416000200 (continued) 42-459-057666-00A William Fred Denton Amoco Production Co. 7/16/96 231 881 42-459-057668-00A Curtis Webb et ux Amoco Production Co. 2/21/96 229 525 42-459-057669-00A Henry P. Bishop et ux Amoco Production Co. 11/10/94 177 54 42-459-057670-00A George S. Heyer, Jr. Amoco Production Co. 4/10/96 226 737 42-459-057670-00B Henri L. Tallichet Amoco Production Co. 4/10/96 222 912 42-459-057670-00C George S. Tallichet Amoco Production Co. 4/10/96 224 842 42-459-057670-00D Robert L. Bradley et al Amoco Production Co. 3/25/96 222 892 42-459-057671-00A Marjorie Musselman Amoco Production Co. 12/8/94 186 827 42-459-057671-00B Diane Meadow Amoco Production Co. 12/15/94 186 830 42-459-057671-00C Margaret Musslewhite Amoco Production Co. 12/8/94 183 231 42-459-057671-00D Elnora Williams Amoco Production Co. 12/13/94 189 413 42-459-057671-00E John Fanning Amoco Production Co. 12/15/94 186 800 42-459-057671-00F Norris Lynn Fanning Amoco Production Co. 12/15/94 186 802 42-459-057671-00G Thelma Buie Amoco Production Co. 2/14/95 186 775 42-459-057671-00H Austin Avenue United Amoco Production Co. 3/16/95 188 968 Methodist Church 42-459-057671-00I Nelda Massey Amoco Production Co. 3/16/95 188 981 42-459-057671-00J Myrtle Threlkeld Amoco Production Co. 3/16/95 108 1008 42-459-057671-00K Eleanor Walker Amoco Production Co. 3/16/95 188 31 42-459-057671-00L Laura Lennard Amoco Production Co. 3/16/95 187 984 FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ------------------ ----------------------------------- ---------------------------------------------- Glenwood Field 42-459-057662-00A A tract or tracts of land located (Cotton Valley Sand) in Upshur County, Texas, as more Rubey Estate Gas Unit (d) 42-459-057663-00A fully described in that certain 416000200 Assignment dated effective March (continued) 42-459-057666-00A 1, 1997, from Amoco Production Company to Atlantic Richfield 42-459-057668-00A Company, et al, recorded at Volume 296, Page 245, Official 42-459-057669-00A Records of Upshur County, Texas. 42-459-057670-00A LIMITED IN DEPTH FROM THE SURFACE DOWN TO 100' BELOW THE DEPTH 42-459-057670-00B DRILLED IN THE C W RESOURCES RUBEY ESTATE GAS UNIT NO. 1 WELL. 42-459-057670-00C 42-459-057670-00D 42-459-057671-00A 42-459-057671-00B 42-459-057671-00C 42-459-057671-00D 42-459-057671-00E 42-459-057671-00F 42-459-057671-00G 42-459-057671-00H 42-459-057671-00I 42-459-057671-00J 42-459-057671-00K 42-459-057671-00L
Page 151 of 165 178
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ----------------- -------------------------- --------------------- --------- ---- ---- Glenwood Field 42-459-057671-00M Alice Biett Amoco Production Co. 3/16/95 191 310 (Cotton Valley Sand) Rubey Estate Gas Unit (d) 42-459-057671-00N Maxine Dwyer Amoco Production Co. 3/16/95 188 975 416000200 (continued) 42-459-057671-00O Gladys Messer Amoco Production Co. 12/6/94 178 968 42-459-057671-00P James Fanning Amoco Production Co. 12/15/94 180 136 42-459-057671-00Q Fay Fanning, a widow Amoco Production Co. 12/9/94 180 139 42-459-057671-00R Rosemary Trevino Amoco Production Co. 12/?/94 183 343 42-459-057672-00A M. Isabel Burke Amoco Production Co. 5/11/95 194 873 42-459-057672-00B Earl B. Johnson et ux Amoco Production Co. 5/11/95 195 20 42-459-057672-00C Leo M. Davis, et al Amoco Production Co. 5/17/95 220 150 42-459-057672-00D Floy Butler et al Amoco Production Co. 5/19/95 197 650 42-459-057672-00E Mary Ryon Talley Amoco Production Co. 5/24/96 226 762 42-459-057672-00F Mimi O. Davis Amoco Production Co. 5/28/96 226 733 42-459-057672-00G Angus G. Wynne, III Amoco Production Co. 5/22/96 226 764 42-459-057672-00H Dorothy O. Range Amoco Production Co. 5/24/96 227 252 42-459-057672-00I Martha T. Gracey Amoco Production Co. 6/3/96 228 457 42-459-057672-00J Patricia J. Singer Amoco Production Co. 5/30/96 229 515 42-459-057672-00K A. R. Davis, Jr. Amoco Production Co. 5/28/96 226 735 42-459-057672-00L Martha Jane Holford Amoco Production Co. 6/10/96 228 459 42-459-057672-00M Herschel G. Brown Amoco Production Co. 5/28/96 226 729 42-459-057672-00N Clifton H. Tucker Amoco Production Co. 6/3/96 229 523 42-459-057672-00O Madeline T. Nolan Amoco Production Co. 6/3/96 230 609 42-459-057672-00P Bedford S. Wynne, Jr. Amoco Production Co. 6/4/96 227 250 42-459-057672-00Q Jerry Lynn Butler Amoco Production Co. 5/28/96 230 607 FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ------------------ ----------------------------------- ---------------------------------------------- Glenwood Field 42-459-057671-00M A tract or tracts of land located (Cotton Valley Sand) in Upshur County, Texas, as more Rubey Estate Gas Unit (d) 42-459-057671-00N fully described in that certain 416000200 Assignment dated effective March (continued) 42-459-057671-00O 1, 1997, from Amoco Production Company to Atlantic Richfield 42-459-057671-00P Company, et al, recorded at Volume 296, Page 245, Official 42-459-057671-00Q Records of Upshur County, Texas. 42-459-057671-00R LIMITED IN DEPTH FROM THE SURFACE DOWN TO 100' BELOW THE DEPTH 42-459-057672-00A DRILLED IN THE C W RESOURCES RUBEY ESTATE GAS UNIT NO. 1 WELL. 42-459-057672-00B 42-459-057672-00C 42-459-057672-00D 42-459-057672-00E 42-459-057672-00F 42-459-057672-00G 42-459-057672-00H 42-459-057672-00I 42-459-057672-00J 42-459-057672-00K 42-459-057672-00L 42-459-057672-00M 42-459-057672-00N 42-459-057672-00O 42-459-057672-00P 42-459-057672-00Q
Page 152 of 165 179
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ----------------- -------------------------- --------------------- --------- ---- ---- Glenwood Field 42-459-057672-00R Greta Jackson Newman Amoco Production Co. 5/28/96 227 244 (Cotton Valley Sand) Rubey Estate Gas Unit (d) 42-459-057672-00S William F. Holmes Amoco Production Co. 6/10/96 230 605 416000200 (continued) 42-459-057672-00T J. Elmer Newman Amoco Production Co. 5/28/96 231 879 42-459-057672-00U David E. Wynne Amoco Production Co. 5/22/96 235 446 42-459-057672-00V M. Temple Wynne Amoco Production Co. 5/22/96 240 642 42-459-057672-00W Anne S. Wynne Amoco Production Co. 6/5/96 240 640 42-459-057672-00X Roger A. Poore Amoco Production Co. 7/5/96 240 620 42-459-057672-00Y Gena Piccolo Amoco Production Co. 7/5/96 240 636 42-459-057673-00A Glenwood Water Supply Amoco Production Co. 3/5/96 218 533 42-459-057674-00A David A. Whitfield Amoco Production Co. 2/16/96 217 199 42-459-057675-00A Brenda Allen Amoco Production Co. 2/16/96 217 166 42-459-057676-00A Bonnie Jean Blalack Amoco Production Co. 2/21/96 217 170 42-459-057677-00A Donald Ross Chambers Amoco Production Co. 5/10/96 224 845 42-459-057678-00A Garry Lenn Thomas Amoco Production Co. 2/2/96 216 141 42-459-057679-00A Ruth Ell Blalack Amoco Production Co. 2/15/96 216 113 42-459-057680-00A Payne Bogardus Amoco Production Co. 2/15/96 216 115 42-459-057681-00A Betty Jean Allen Amoco Production Co. 2/12/96 216 106 42-459-057682-00A William L. Smith et al Amoco Production Co. 2/19/96 217 192 42-459-057683-00A F. D. Sams et ux Amoco Production Co. 2/2/96 216 135 42-459-057684-00A F. D. Sams et ux Amoco Production Co. 2/12/96 216 137 42-459-057685-00A Jacky Lee Drake Amoco Production Co. 11/9/94 177 62 42-459-057685-00B Z. A. Webb Amoco Production Co. 11/9/94 177 92 42-459-057685-00C Erma Jean Rambo Amoco Production Co. 11/9/94 177 87 FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ------------------ ----------------------------------- ---------------------------------------------- Glenwood Field 42-459-057672-00R A tract or tracts of land located (Cotton Valley Sand) in Upshur County, Texas, as more Rubey Estate Gas Unit (d) 42-459-057672-00S fully described in that certain 416000200 Assignment dated effective March (continued) 42-459-057672-00T 1, 1997, from Amoco Production Company to Atlantic Richfield 42-459-057672-00U Company, et al, recorded at Volume 296, Page 245, Official 42-459-057672-00V Records of Upshur County, Texas. 42-459-057672-00W LIMITED IN DEPTH FROM THE SURFACE DOWN TO 100' BELOW THE DEPTH 42-459-057672-00X DRILLED IN THE C W RESOURCES RUBEY ESTATE GAS UNIT NO. 1 WELL. 42-459-057672-00Y 42-459-057673-00A 42-459-057674-00A 42-459-057675-00A 42-459-057676-00A 42-459-057677-00A 42-459-057678-00A 42-459-057679-00A 42-459-057680-00A 42-459-057681-00A 42-459-057682-00A 42-459-057683-00A 42-459-057684-00A 42-459-057685-00A 42-459-057685-00B 42-459-057685-00C
Page 153 of 165 180
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ----------------- -------------------------- --------------------- --------- ---- ---- Glenwood Field 42-459-057686-00A Odie Banks et al Amoco Production Co. 10/4/94 180 128 (Cotton Valley Sand) Rubey Estate Gas Unit (d) 42-459-057720-000 Max Salter et al Amoco Production Co. 5/13/95 195 40 416000200 (continued) 42-459-057721-000 Max Salter Amoco Production Co. 5/13/95 195 38 42-459-057732-000 Henry P. Bishop et ux Amoco Production Co. 12/6/96 245 333 42-459-057735-000 Jeffrey D. Davis Amoco Production Co. 2/13/96 216 117 42-459-057736-000 Greg Nuckolls et ux Amoco Production Co. 2/7/96 216 132 42-459-057737-000 Palmer J. Sellers Amoco Production Co. 2/2/96 216 139 42-459-057738-000 Zikie Lee Graham et ux Amoco Production Co. 2/6/96 215 48 42-459-057744-000 Maxine Childress Amoco Production Co. 11/30/94 178 951 42-459-057757-00A Marian Lyeth Davis Amoco Production Co. 3/13/95 189 352 42-459-057803-000 J. R. McCormick et ux Amoco Production Co. 2/7/97 250 687 42-459-057804-000 Sylvio R. Cote et ux Amoco Production Co. 2/10/97 250 675 42-459-057805-000 Arnold Grimes et ux Amoco Production Co. 2/10/97 250 683 42-459-057806-00A Mary Kathryn McKinley Amoco Production Co. 6/17/97 265 966 Drake 42-459-057806-00B Leo McKinley et al Amoco Production Co. 5/28/97 265 968 FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ------------------ ----------------------------------- ---------------------------------------------- Glenwood Field 42-459-057686-00A A tract or tracts of land located (Cotton Valley Sand) in Upshur County, Texas, as more Rubey Estate Gas Unit (d) 42-459-057720-000 fully described in that certain 416000200 Assignment dated effective March (continued) 42-459-057721-000 1, 1997, from Amoco Production Company to Atlantic Richfield 42-459-057732-000 Company, et al, recorded at Volume 296, Page 245, Official 42-459-057735-000 Records of Upshur County, Texas. 42-459-057736-000 LIMITED IN DEPTH FROM THE SURFACE DOWN TO 100' BELOW THE DEPTH 42-459-057737-000 DRILLED IN THE C W RESOURCES RUBEY ESTATE GAS UNIT NO. 1 WELL. 42-459-057738-000 42-459-057744-000 42-459-057757-00A 42-459-057803-000 42-459-057804-000 42-459-057805-000 42-459-057806-00A 42-459-057806-00B
Page 154 of 165 181
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ----------------- -------------------------- --------------------- --------- ---- ---- Glenwood Field 42-459-057626-00A Norma Maclin Ray R. Lacy, Inc. 3-6-95 196 239 (Cotton Valley Sand) Watts Heirs Gas Unit (d) 42-459-057626-00B B.J. Barclay et al R. Lacy, Inc. 3-6-95 186 989 411578300 33.33% WI 42-459-057626-00C Myra Lynn Ray Roberts R. Lacy, Inc. 3-6-95 186 994 42-459-057627-00A Shirley L. Day et vir R. Lacy, Inc. 9-15-94 172 558 42-459-057631-00A T. L. Johnson, Jr. Crown Resources Co. 5-6-96 229 161 42-459-057631-00B Pacific Enterprises ABC Amoco Production Co. 4-11-96 222 732 Corporation 42-459-057631-00C Tillman T. Johnson R. Lacy, Inc. 8-26-94 169 500 42-459-057633-00A Mary Nell Floyd Amoco Production Co. 5-29-96 225 911 42-459-057634-00A Wesley E. Frisbie R. Lacy, Inc. 7-13-94 174 157 42-459-057634-00B Marguerite Molder R. Lacy, Inc. 7-13-94 168 244 42-459-057634-00C David S. Humphrey R. Lacy, Inc. 7-1-94 171 381 FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ------------------ ----------------------------------- ---------------------------------------------- Glenwood Field 42-459-057626-00A A tract or tracts of land located AR-105496 (Cotton Valley Sand) in Upshur County and Gregg Farmin Agreement dated December 12, 1996 Watts Heirs Gas Unit (d) 42-459-057626-00B County, Texas, as more fully Between Amoco Production Company, Farmor, 411578300 described in that certain And C W Resources, Inc., et al, Farmee 33.33% WI 42-459-057626-00C Assignment dated effective June 22, 1997, from Amoco Production AR-105498 42-459-057627-00A Company to Atlantic Richfield Joint Operating Agreement dated December 12, Company, et al, recorded at 1996 between C W Resources, Inc., Operator, 42-459-057631-00A Volume 281, Page 996, Official And Atlantic Richfield Company, et al, Records of Upshur County, Texas. non-operators 42-459-057631-00B LIMITED IN DEPTH FROM THE SURFACE AR-105498-001 42-459-057631-00C DOWN TO 100' BELOW THE TOTAL Designation of Gas Unit dated March 13, 1997, DEPTH DRILLED IN THE C W by and between C W Resources, Inc. and 42-459-057633-00A RESOURCES WATTS HEIRS GAS UNIT Atlantic Richfield Company, et al NO. 1 WELL. 42-459-057634-00A AR-105526 Interruptible Gas Transportation Agreement 42-459-057634-00B dated March 1, 1997, between C W Resources, Atlantic Richfield Company, et al, "Sellers" 42-459-057634-00C and Delhi Gas Pipeline Corporation, "Transporter".
Page 155 of 165 182
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ----------------- -------------------------- --------------------- --------- ---- ---- Glenwood Field 42-459-057634-00D Barbara Cain R. Lacy, Inc. 7-13-94 165 584 (Cotton Valley Sand) Watts Heirs Gas Unit (d) 42-459-057634-00E Terry R. Brown R. Lacy, Inc. 6-17-94 168 121 411578300 (continued) 42-459-057634-00F James G. Humphrey R. Lacy, Inc. 7-1-94 169 503 42-459-057634-00G Kay Barney R. Lacy, Inc. 7-1-94 168 119 42-459-057634-00H Dorothy Nell Love Goins R. Lacy, Inc. 6-30-94 164 927 42-459-057635-00A Doris B. Price R. Lacy, Inc. 1-20-95 183 12 42-459-057635-00B Penny Price Seiders R. Lacy, Inc. 1-20-95 186 49 42-459-057635-00C Rena Marie Roberts R. Lacy, Inc. 7-1-94 164 980 42-459-057635-00D Claude H. Roberts, Jr. R. Lacy, Inc. 7-1-94 164 948 42-459-057635-00E Walter Roach Crown Resources Co. 4-3-97 264 510 42-459-057637-00A Fannie Reeves Kahn Tr. Amoco Production Co. 6-11-96 229 229 42-459-057637-00B Gloria Taylor Wismar Amoco Production Co. 3-27-96 222 781 42-459-057637-00C Nancy Taylor Kennedy Amoco Production Co. 3-27-96 222 713 42-459-057637-00D Charles S. Taylor Amoco Production Co. 3-27-96 222 757 42-459-057637-00E Mary Lou Ray McCain R. Lacy, Inc. 8-4-94 168 246 42-459-057637-00F J. D. Tillery, et al R. Lacy, Inc. 8-4-94 168 258 42-459-057637-00G Mary Rylie Gibson R. Lacy, Inc. 8-8-94 168 237 42-459-057637-00H B.J. Barclay et al R. Lacy, Inc. 8-3-94 168 116 42-459-057637-00I Julian William Thrasher, R. Lacy, Inc. 8-1-94 168 255 Jr., Trustee 42-459-057637-00J James Ray Northcutt R. Lacy, Inc. 8-4-94 168 249 42-459-057637-00K Leonard Frank Ray Family R. Lacy, Inc. 8-4-94 174 159 Trust 42-459-057637-00L G. Arthur Donnelly, III R. Lacy, Inc. 10-20-94 196 208 FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ------------------ ----------------------------------- ---------------------------------------------- Glenwood Field 42-459-057634-00D A tract or tracts of land located (Cotton Valley Sand) in Upshur County and Gregg Watts Heirs Gas Unit (d) 42-459-057634-00E County, Texas, as more fully 411578300 described in that certain (continued) 42-459-057634-00F Assignment dated effective June 22, 1997, from Amoco Production 42-459-057634-00G Company to Atlantic Richfield Company, et al, recorded at 42-459-057634-00H Volume 281, Page 996, Official Records of Upshur County, Texas. 42-459-057635-00A LIMITED IN DEPTH FROM THE SURFACE 42-459-057635-00B DOWN TO 100' BELOW THE TOTAL DEPTH DRILLED IN THE C W 42-459-057635-00C RESOURCES WATTS HEIRS GAS UNIT NO. 1 WELL. 42-459-057635-00D 42-459-057635-00E 42-459-057637-00A 42-459-057637-00B 42-459-057637-00C 42-459-057637-00D 42-459-057637-00E 42-459-057637-00F 42-459-057637-00G 42-459-057637-00H 42-459-057637-00I 42-459-057637-00J 42-459-057637-00K 42-459-057637-00L
Page 156 of 165 183
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ----------------- -------------------------- --------------------- --------- ---- ---- Glenwood Field 42-459-057637-00M Nancy Bruce Curlee R. Lacy, Inc. 7-26-94 167 573 (Cotton Valley Sand) Watts Heirs Gas Unit (d) 42-459-057637-00N Myra Lynn Ray Roberts R. Lacy, Inc. 8-1-94 172 573 411578300 (continued) 42-459-057637-00O Annie Lou Ray Grigsby R. Lacy, Inc. 8-4-94 168 123 42-459-057638-00A Howard W. Parker et ux R. Lacy, Inc. 7-18-94 166 387 42-459-057638-00B Jack M. Newman et al R. Lacy, Inc. 7-13-94 179 409 42-459-057639-00A Lester Shoshone Trust B R. Lacy, Inc. 7-9-94 164 986 42-459-057639-00B Magalene Fleet Mullican Crown Resources Co. 1-4-97 247 173 42-459-057640-00A Iva Marie Cameron Fleck R. Lacy, Inc. 7-13-94 166 372 42-459-057640-00B Joan Anderson R. Lacy, Inc. 7-13-94 165 581 42-459-057640-00C Mabel Gilpin R. Lacy, Inc. 7-13-94 164 972 42-459-057640-00D Sue Vickery R. Lacy, Inc. 7-13-94 165 594 42-459-057640-00E E. L. Riddle, Jr. R. Lacy, Inc. 7-16-94 165 542 42-459-057640-00F Robert Hearn Williams R. Lacy, Inc. 7-13-94 165 596 42-459-057640-00G Charles H. Meyer R. Lacy, Inc. 7-13-94 165 590 42-459-057641-00A Judith M. Wrucke R. Lacy, Inc. 3-17-95 2845 492 42-459-057641-00B Claude Graves, III R. Lacy, Inc. 3-29-95 2845 487 42-459-057641-00C Michael Andrew Stieren R. Lacy, Inc. 8-6-94 171 395 42-459-057641-00D Jennifer L. Stieren R. Lacy, Inc. 8-6-94 171 398 42-459-057641-00E Georgia Ann Stieren R. Lacy, Inc. 8-6-94 171 401 42-459-057641-00F Doris K. Ehrenberg R. Lacy, Inc. 3-17-95 196 212 42-459-057641-00G Gayla S. Graves R. Lacy, Inc. 3-17-95 196 220 42-459-057641-00H Claude Graves, III R. Lacy, Inc. 3-17-95 196 216 42-459-057642-00A Josh R. Morriss, III R. Lacy, Inc. 3-17-95 196 376 FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ------------------ ----------------------------------- ---------------------------------------------- Glenwood Field 42-459-057637-00M A tract or tracts of land located (Cotton Valley Sand) in Upshur County and Gregg Watts Heirs Gas Unit (d) 42-459-057637-00N County, Texas, as more fully 411578300 described in that certain (continued) 42-459-057637-00O Assignment dated effective June 22, 1997, from Amoco Production 42-459-057638-00A Company to Atlantic Richfield Company, et al, recorded at 42-459-057638-00B Volume 281, Page 996, Official Records of Upshur County, Texas. 42-459-057639-00A LIMITED IN DEPTH FROM THE SURFACE 42-459-057639-00B DOWN TO 100' BELOW THE TOTAL DEPTH DRILLED IN THE C W 42-459-057640-00A RESOURCES WATTS HEIRS GAS UNIT NO. 1 WELL. 42-459-057640-00B 42-459-057640-00C 42-459-057640-00D 42-459-057640-00E 42-459-057640-00F 42-459-057640-00G 42-459-057641-00A 42-459-057641-00B 42-459-057641-00C 42-459-057641-00D 42-459-057641-00E 42-459-057641-00F 42-459-057641-00G 42-459-057641-00H 42-459-057642-00A
Page 157 of 165 184
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ----------------- -------------------------- --------------------- --------- ---- ---- Glenwood Field 42-459-057642-00B Lee M. Daniels R. Lacy, Inc. 7-16-94 167 579 (Cotton Valley Sand) Watts Heirs Gas Unit (d) 42-459-057642-00C Don N. Morriss R. Lacy, Inc. 7-13-94 166 382 411578300 (continued) 42-459-057642-00D Martha Leah Morriss R. Lacy, Inc. 7-13-94 166 380 42-459-057642-00E Carol Elizabeth Dodds R. Lacy, Inc. 7-19-94 172 560 42-459-057642-00F William A. Ferguson R. Lacy, Inc. 7-19-94 164 970 42-459-057642-00G Melisa Daniels Butler R. Lacy, Inc. 7-16-94 167 577 42-459-057642-00H William O. Morriss R. Lacy, Inc. 7-13-94 166 378 42-459-057642-00I Joan Baldridge Bratton R. Lacy, Inc. 7-13-94 166 370 42-459-057642-00J Deborah Elyse Redfern R. Lacy, Inc. 7-19-94 167 581 42-459-057642-00K Jeana T. McClintock R. Lacy, Inc. 7-19-94 180 442 42-459-057643-00A Susan Graves R. Lacy, Inc. 8-4-94 168 126 42-459-057643-00B Linda R. Rodgers R. Lacy, Inc. 8-4-94 168 146 42-459-057643-00C M. G. Ray R. Lacy, Inc. 8-4-94 168 145 42-459-057645-00A Willie Lee Starr et ux R. Lacy, Inc. 6-15-94 163 417 42-459-057645-00B Johnnie Faye Bowden R. Lacy, Inc. 6-15-94 163 401 42-459-057645-00C Stephanie More R. Lacy, Inc. 6-17-94 163 413 42-459-057647-00A The Nabors Trust R. Lacy, Inc. 7-1-94 164 934 42-459-057648-00A Andrews Royalty, Inc. Crown Resources Co. 3-5-97 255 821 42-459-057708-000 Mrs. E. A. Watts Elbert Williams 10-8-50 5 260 42-459-057709-00A Lee Tanner Fleet Crown Resources Co. 6-25-97 267 982 42-459-057709-00B Gerald Hunter Fleet Crown Resources Co. 6-25-97 267 984 42-459-057709-00C Betty Jean Sheffield Crown Resources Co. 6-25-97 267 988 42-459-057709-00D Charles Buck Fleet Crown Resources Co. 6-25-97 267 980 FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ------------------ ----------------------------------- ---------------------------------------------- Glenwood Field 42-459-057642-00B A tract or tracts of land located (Cotton Valley Sand) in Upshur County and Gregg Watts Heirs Gas Unit (d) 42-459-057642-00C County, Texas, as more fully 411578300 described in that certain (continued) 42-459-057642-00D Assignment dated effective June 22, 1997, from Amoco Production 42-459-057642-00E Company to Atlantic Richfield Company, et al, recorded at 42-459-057642-00F Volume 281, Page 996, Official Records of Upshur County, Texas. 42-459-057642-00G LIMITED IN DEPTH FROM THE SURFACE 42-459-057642-00H DOWN TO 100' BELOW THE TOTAL DEPTH DRILLED IN THE C W 42-459-057642-00I RESOURCES WATTS HEIRS GAS UNIT NO. 1 WELL. 42-459-057642-00J 42-459-057642-00K 42-459-057643-00A 42-459-057643-00B 42-459-057643-00C 42-459-057645-00A 42-459-057645-00B 42-459-057645-00C 42-459-057647-00A 42-459-057648-00A 42-459-057708-000 42-459-057709-00A 42-459-057709-00B 42-459-057709-00C 42-459-057709-00D
Page 158 of 165 185
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ----------------- -------------------------- --------------------- ------- ---- ---- Glenwood Field 42-459-057710-00A Joe Miller et ux Wanda Crown Resources Co. 4-3-97 255 830 (Cotton Valley Sand) Watts Heirs Gas Unit(d) 42-459-057717-00A Phillip A. Works et ux R. Byron Roach, Ttee 6-29-94 169 293 411578300 (continued) 42-459-057718-00A Mary Virginia Smith J. Don Westbrook 7-15-94 175 101 42-459-057718-00B Mary Nell Smith Floyd J. Don Westbrook 7-14-94 175 56 42-459-057718-00C June Robison J. Don Westbrook 7-15-94 175 97 42-459-057718-00D Fayrene Lee J. Don Westbrook 7-15-94 175 91 42-459-057718-00E Clarine Smith Tucker J. Don Westbrook 7-14-94 175 105 42-459-057718-00F Fayrine Smith Green J. Don Westbrook 7-14-94 175 75 42-459-057719-00A Matt S. McKenzie R. Byron Roach, Ttee 10-2-94 185 946 Unknown Betty R. LeBaron Crown Resources Co. 2-18-97 253 942 Unknown Anne Price MacKenzie R. Byron Roach, Ttee 1-20-95 169 293 Unknown Pursuit Energy Corp. Crown Resources Co. 5-2-97 261 - --------------------------- ----------------- -------------------------- --------------------- ------- ---- ---- East Texas Field Unknown Unknown Unknown A. L. Jenkins 415553000 D.O. 42-459-031186-000 Operator Roberts & Murphy, Inc. Revenue Interest 0.997812 - --------------------------- ----------------- -------------------------- --------------------- ------- ---- ---- East Texas Field 42-183-057222-00A Anna Kathryn Rulfs Holbrook Team Invest, Inc. 1/24/96 224 182 J. H. Sabey Gas Unit 417896300 - -0- WI (Before 400% Payout) - -0- NRI - --------------------------- ----------------- -------------------------- --------------------- ------- ---- ---- 42-183-057222-00B Sharon Rulfs Kerr Team Invest, Inc. 1/24/96 224 230 - --------------------------- ----------------- -------------------------- --------------------- ------- ---- ---- 42-183-057222-00C L. D. Rulfs, Jr. Team Invest, Inc. 1/24/96 224 303 - --------------------------- ----------------- -------------------------- --------------------- ------- ---- ---- 42-183-057222-00d Henry E. Pybus Wagner & Brown, Ltd. 10/18/96 259 195 - --------------------------- ----------------- -------------------------- --------------------- ------- ---- ---- 42-183-057223-00A Thomas C. Merritt, Trustee Team Invest, Inc. 5/16/96 224 243 FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ------------------ ----------------------------------- ---------------------------------------------- Glenwood Field 42-459-057710-00A A tract or tracts of land located (Cotton Valley Sand) in Upshur County and Gregg Watts Heirs Gas Unit(d) 42-459-057717-00A County, Texas, as more fully 411578300 described in that certain (continued) 42-459-057718-00A Assignment dated effective June 22, 1997, from Amoco Production 42-459-057718-00B Company to Atlantic Richfield Company, et al, recorded at 42-459-057718-00C Volume 281, Page 996, Official Records of Upshur County, Texas. 42-459-057718-00D LIMITED IN DEPTH FROM THE SURFACE 42-459-057718-00E DOWN TO 100' BELOW THE TOTAL DEPTH DRILLED IN THE C W 42-459-057718-00F RESOURCES WATTS HEIRS GAS UNIT NO. 1 WELL. 42-459-057719-00A Unknown Unknown Unknown - --------------------------- ------------------ ----------------------------------- ---------------------------------------------- East Texas Field Unknown 37.5 acres, more or less, out of A. L. Jenkins the H. H. Edwards Survey, A-668, 415553000 Upshur County, Texas D.O. 42-459-031186-000 Operator Roberts & Murphy, Inc. Revenue Interest 0.997812 - --------------------------- ------------------ ----------------------------------- ---------------------------------------------- East Texas Field 42-183-057222-00A 234.50 acres out of Leino Subject to 400% Non-Consent JOA Ar-105492 J. J. H. Sabey Gas Unit Gonzales A-169 (Tract 1 Deed H. Sabey GU. Subject to 4/24/96 Letter 417896300 263/229 DR), Upshur County, Texas Agreement between Team Invest, Inc. and - -0- WI (Before 400% Wagner & Brown, Ltd. Payout) - -0- NRI - --------------------------- ------------------ ----------------------------------- ---------------------------------------------- 42-183-057222-00B 234.50 acres out of Leino Subject to 400% Non-Consent JOA Ar-105492 J. Gonzales A-169 (Tract 1 Deed H. Sabey GU. Subject to 4/24/96 Letter 263/229 DR), Upshur County, Texas Agreement between Team Invest, Inc. and Wagner & Brown, Ltd. - --------------------------- ------------------ ----------------------------------- ---------------------------------------------- 42-183-057222-00C 234.50 acres out of Leino Subject to 400% Non-Consent JOA Ar-105492 J. Gonzales A-169 (Tract 1 Deed H. Sabey GU. Subject to 4/24/96 Letter 263/229 DR), Upshur County, Texas Agreement between Team Invest, Inc. and Wagner & Brown, Ltd. - --------------------------- ------------------ ----------------------------------- ---------------------------------------------- 42-183-057222-00d 234.50 acres out of Leino Subject to 400% Non-Consent JOA Ar-105492 J. Gonzales A-169 (Tract 1 Deed H. Sabey GU. Subject to 4/24/96 Letter 263/229 DR), Upshur County, Texas Agreement between Team Invest, Inc. and Wagner & Brown, Ltd. - --------------------------- ------------------ ----------------------------------- ---------------------------------------------- 42-183-057223-00A 234.50 acres out of Leino Subject to 400% Non-Consent JOA Ar-105492 J. Gonzales A-169 (Tract 1 Deed H. Sabey GU. Subject to 4/24/96 Letter 263/229 DR), Upshur County, Texas Agreement between Team Invest, Inc. and Wagner & Brown, Ltd.
Page 159 of 165 186
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ----------------- -------------------------- --------------------- --------- ---- ---- Gladewater Field 42-459-057205-00A Lawauna Hill, Guardian of Team Invest, Inc. 7/17/96 233 31 (Cotton Valley) Estate of Marcelle Daffan Faye Pittman Willeford McLeroy 400050100 33.33% WI BPO 25.975504% NRI BPO 42-459-057206-00A James Reagan Somerset Wyche Team Invest, Inc. 9/3/96 237 209 42-459-057206-00B Elizabeth Ellen Wyche Team Invest, Inc. 9/3/96 237 207 Robison 42-459-057206-00C Annie Marie Boyd Johnson Team Invest, Inc. 9/20/96 240 815 42-459-057206-00D Estelline Boyd Team Invest, Inc. 9/20/96 240 809 42-459-057206-00E James V. Burnett Team Invest, Inc. 9/20/96 240 811 FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ------------------ ----------------------------------- ---------------------------------------------- Gladewater Field 42-459-057205-00A 221.90 acres out of Leino AR-105492 (Cotton Valley) Gonzales A-169, being 100.0 and Joint Operating Agreement between C W Faye Pittman Willeford 15.3 acres (First and Second Resources, et al Subject to 4/24/96 Letter 400050100 Tracts OGML 128/324 OGR), 84.9 Agreement between Team Invest, Inc. and 33.33% WI BPO acres (OGML 175/608 OGR), and Wagner & Brown, Ltd. 25.975504% NRI BPO 21.7 acres (OGML 128/321 OGR) Upshur County, Texas, being Tract 7&8 of the Faye Willeford Gas Unit 42-459-057206-00A 264.90 acres, being 91.0 acres (Deed 173/280 DR) out of Wm. Carlton A-72 and 73.6 (Deed 172/240 DR) and 110.3 acres (MC 233/189 DR) out of Wm. Carlton A-72 and Leino Gonzales A-169, Upshur County, Texas, being Tracts 2, 3 & 4 of the Faye Willeford Gas Unit. 42-459-057206-00B 264.90 acres, being 91.0 acres (Deed 173/280 DR) out of Wm. Carlton A-72 and 73.6 (Deed 172/240 DR) and 110.3 acres (MC 233/189 DR) out of Wm. Carlton A-72 and Leino Gonzales A-169, Upshur County, Texas, being Tracts 2, 3 & 4 of the Faye Willeford Gas Unit. 42-459-057206-00C 264.90 acres, being 91.0 acres (Deed 173/280 DR) out of Wm. Carlton A-72 and 73.6 (Deed 172/240 DR) and 110.3 acres (MC 233/189 DR) out of Wm. Carlton A-72 and Leino Gonzales A-169, Upshur County, Texas, being Tracts 2, 3 & 4 of the Faye Willeford Gas Unit. 42-459-057206-00D 264.90 acres, being 91.0 acres (Deed 173/280 DR) out of Wm. Carlton A-72 and 73.6 (Deed 172/240 DR) and 110.3 acres (MC 233/189 DR) out of Wm. Carlton A-72 and Leino Gonzales A-169, Upshur County, Texas, being Tracts 2, 3 & 4 of the Faye Willeford Gas Unit. 42-459-057206-00E 264.90 acres, being 91.0 acres (Deed 173/280 DR) out of Wm. Carlton A-72 and 73.6 (Deed 172/240 DR) and 110.3 acres (MC 233/189 DR) out of Wm. Carlton A-72 and Leino Gonzales A-169, Upshur County, Texas, being Tracts 2, 3 & 4 of the Faye Willeford Gas Unit.
Page 160 of 165 187
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ----------------- -------------------------- --------------------- --------- ---- ---- Gladewater Field 42-459-057207-00A Rose Marie Hurmence Team Invest, Inc. 9/20/96 240 963 (Cotton Valley) Faye Pittman Willeford 400050100 33.33% WI BPO 25.975504% NRI BPO 42-459-057207-00B Ann Boyd Monk Team Invest, Inc. 9/20/96 240 965 42-459-057207-00C Shirley Muenzler Team Invest, Inc. 9/20/96 240 817 42-457-057207-00D Peggy Pieper, et vir Ben Team Invest, Inc. 9/20/96 240 819 42-457-057207-00E Linda Cantrell Team Invest, Inc. 9/20/96 240 813 FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ------------------ ----------------------------------- ---------------------------------------------- Gladewater Field 42-459-057207-00A 201.3 acres, being 91.0 acres AR-105492 (Cotton Valley) (Deed 173/280 DR) out of Wm. Joint Operating Agreement between C W Faye Pittman Willeford Carlton A-72 and 110.3 acres (MD Resources, et al Subject to 4/24/96 Letter 400050100 233/189 DR) out of Wm. Carlton Agreement between Team Invest, Inc. and 33.33% WI BPO A-72 and Leino Gonzales A-169, Wagner & Brown, Ltd 25.975504% NRI BPO Upshur County, Texas, being Tracts 2 & 4 of the Faye Willeford Gas Unit 42-459-057207-00B 201.3 acres, being 91.0 acres (Deed 173/280 DR) out of Wm. Carlton A-72 and 110.3 acres (MD 233/189 DR) out of Wm. Carlton A-72 and Leino Gonzales A-169, Upshur County, Texas, being Tracts 2 & 4 of the Faye Willeford Gas Unit 42-459-057207-00C 201.3 acres, being 91.0 acres (Deed 173/280 DR) out of Wm. Carlton A-72 and 110.3 acres (MD 233/189 DR) out of Wm. Carlton A-72 and Leino Gonzales A-169, Upshur County, Texas, being Tracts 2 & 4 of the Faye Willeford Gas Unit 42-457-057207-00D 201.3 acres, being 91.0 acres (Deed 173/280 DR) out of Wm. Carlton A-72 and 110.3 acres (MD 233/189 DR) out of Wm. Carlton A-72 and Leino Gonzales A-169, Upshur County, Texas, being Tracts 2 & 4 of the Faye Willeford Gas Unit 42-457-057207-00E 201.3 acres, being 91.0 acres (Deed 173/280 DR) out of Wm. Carlton A-72 and 110.3 acres (MD 233/189 DR) out of Wm. Carlton A-72 and Leino Gonzales A-169, Upshur County, Texas, being Tracts 2 & 4 of the Faye Willeford Gas Unit
Page 161 of 165 188
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ----------------- -------------------------- --------------------- --------- ---- ---- Gladewater Field 42-457-057207-00F Irene Arnold, et vir A. A. Team Invest, Inc. 9/20/96 240 959 (Cotton Valley) Faye Pittman Willeford 400050100 33.33% WI BPO 25.975504% NRI BPO 42-457-057207-00G Reba Boyd, AIF for Milton Team Invest, Inc. 9/20/96 239 657 Boyd 42-457-057207-00H Barbara Barger Team Invest, Inc. 9/2096 247 120 42-457-057207-00I Mattie F. Boyd Team Invest, Inc. 9/20/96 247 122 42-457-057208-00A Faye Pittman Wileford Team Invest, Inc. 5/1/96 225 200 FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ------------------ ----------------------------------- ---------------------------------------------- Gladewater Field 42-457-057207-00F 201.3 acres, being 91.0 acres AR-105492 (Cotton Valley) (Deed 173/280 DR) out of Wm. Joint Operating Agreement between C W Faye Pittman Willeford Carlton A-72 and 110.3 acres (MD Resources, et al Subject to 4/24/96 Letter 400050100 233/189 DR) out of Wm. Carlton Agreement between Team Invest, Inc. and 33.33% WI BPO A-72 and Leino Gonzales A-169, Wagner & Brown, Ltd 25.975504% NRI BPO Upshur County, Texas, being Tracts 2 & 4 of the Faye Willeford Gas Unit 42-457-057207-00G 201.3 acres, being 91.0 acres (Deed 173/280 DR) out of Wm. Carlton A-72 and 110.3 acres (MD 233/189 DR) out of Wm. Carlton A-72 and Leino Gonzales A-169, Upshur County, Texas, being Tracts 2 & 4 of the Faye Willeford Gas Unit 42-457-057207-00H 201.3 acres, being 91.0 acres (Deed 173/280 DR) out of Wm. Carlton A-72 and 110.3 acres (MD 233/189 DR) out of Wm. Carlton A-72 and Leino Gonzales A-169, Upshur County, Texas, being Tracts 2 & 4 of the Faye Willeford Gas Unit 42-457-057207-00I 201.3 acres, being 91.0 acres (Deed 173/280 DR) out of Wm. Carlton A-72 and 110.3 acres (MD 233/189 DR) out of Wm. Carlton A-72 and Leino Gonzales A-169, Upshur County, Texas, being Tracts 2 & 4 of the Faye Willeford Gas Unit 42-457-057208-00A 85.3 acres, being 42.3 acres (Deed 244/207 DR) out of Leino Gonzales A-169 and W. L. Palmer A-392, and 40.0 acres (60.0 acres Deed 265/514 DR LESS 20.0 acres Unit 168/530 OGR) and 3.0 acres (Deed 265/514 DR) out of Leino Gonzales A-169, Upshur County, Texas, being Tract 9 of the Faye Willeford Gas Unit
Page 162 of 165 189
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ----------------- -------------------------- --------------------- --------- ---- ---- Gladewater Field 42-459-057370-00A Texas Baptist Children's Oxy USA, Inc. 4/17/96 226 444 (Cotton Valley) Home, Round Rock, Faye Pittman Willeford a Texas Corporation 400050100 33.33% WI BPO 25.975504% NRI BPO 42-459-057370-00B The First Baptist Church Oxy USA, Inc. 3/29/96 226 433 of Gladewater, a Texas Corporation 42-459-057370-00C East Texas Baptist Oxy USA, Inc. 5/20/96 234 745 University, a Texas Corporation FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ------------------ ----------------------------------- ---------------------------------------------- Gladewater Field 42-459-057370-00A 206.60 acres out of Wm. Carlton AR-105492 (Cotton Valley) A-72, being lease tracts 2 Joint Operating Agreement between C W Faye Pittman Willeford (52.0), 3 (91.0) and 4 (63.60) Resources et al 400050100 (Deeds 149.468, 173/280 and 33.33% WI BPO 172/240 respectively), from AR-105495 25.975504% NRI BPO Surface to 100' below Farmout from Oxy USA Stratigraphic Equivalent of T.D.D. 11,200' as logged in Willeford No. 1, Upshur County, Texas, being Tracts 1, 2 & 3 of the Faye Willeford Gas Unit 42-459-057370-00B 206.60 acres out of Wm. Carlton A-72, being lease tracts 2 (52.0), 3 (91.0) and 4 (63.60) (Deeds 149.468, 173/280 and 172/240 respectively), from Surface to 100' below Stratigraphic Equivalent of T.D.D. 11,200' as logged in Willeford No. 1, Upshur County, Texas, being Tracts 1, 2 & 3 of the Faye Willeford Gas Unit 42-459-057370-00C 206.60 acres out of Wm. Carlton A-72, being lease tracts 2 (52.0), 3 (91.0) and 4 (63.60) (Deeds 149.468, 173/280 and 172/240 respectively), from Surface to 100' below Stratigraphic Equivalent of T.D.D. 11,200' as logged in Willeford No. 1, Upshur County, Texas, being Tracts 1, 2 & 3 of the Faye Willeford Gas Unit
Page 163 of 165 190
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ----------------- -------------------------- --------------------- --------- ---- ---- Gladewater Field 42-459-057371-00A Gloria Nan Serpas, dihsp Oxy USA, Inc. 4/25/96 231 102 (Cotton Valley) Faye Pittman Willeford 400050100 33.33% WI BPO 25.975504% NRI BPO 42-459-057371-00B Patsy Jean Taylor, dihsp Oxy USA, Inc. 4/25/96 2312 99 42-459-057372-00A Ken McGinnis, individually Oxy USA, Inc. 4/23/96 226 439 and as sole owner of McGinnis Carpet Center - --------------------------- ----------------- -------------------------- --------------------- --------- ---- ---- 42-459-057370-00D Clara Faye Smith, a widow Crown Resources 5/10/95 195 34 Company 42-459-057373-00A William B. Cook, dihsp Crown Resources 7/1/95 197 657 Thomas N. Cook, dihsp Company Robert B. Cook, Jr., dihsp 42-459-057374-00A Kathryn Cook Porter, mwdihsp Crown Resources 7/1/95 197 711 Company FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ------------------ ----------------------------------- ---------------------------------------------- Gladewater Field 42-459-057371-00A 110.30 acres out of Wm. Carlton AR-105492 (Cotton Valley) A-72 and L. Gonzales A-169 (MD Joint Operating Agreement between C W Faye Pittman Willeford 233/189 DR), from Surface to 100' Resources et al 400050100 below Stratigraphic Equivalent of 33.33% WI BPO T.D.D. 11,200' as logged in AR-105495 25.975504% NRI BPO Willeford No. 1, Upshur County, Farmout from Oxy USA Texas, being Tract 4 of the Faye Willeford Gas Unit 42-459-057371-00B 110.30 acres out of Wm. Carlton A-72 and L. Gonzales A-169 (MD 233/189 DR), from Surface to 100' below Stratigraphic Equivalent of T.D.D. 11,200' as logged in Willeford No. 1, Upshur County, Texas, being Tract 4 of the Faye Willeford Gas Unit 69.17 acres our of L. Gonzales 42-459-057372-00A A-169 (Deed 361/890 DR), from Surface to 100' below Stratigraphic Equivalent of T.D.D. 11,200' as logged in Willeford No. 1, Upshur County, Texas, being Tracts 7&8 of the Faye Willeford Gas Unit - --------------------------- ------------------ ----------------------------------- ---------------------------------------------- 42-459-057370-00D 206.60 acres out of Wm. Carlton AR-105492 A-72, being lease tracts 1 Joint Operating Agreement between C W (52.0), 2 (63.60) and 3 (91.0) Resources et al (Deeds 149/468, 172/240 and 173/280 respectively, from AR-105493 Surface to 11,300' (100' below Farmout from Amoco Production Company T.D. in Willeford No. 1), Upshur County, Texas, being Traacts 1, 2 & 3 of the Faye Willeford Gas Unit 42-459-057373-00A 222.0 acres, being tracts of 80.0 and 48.0 acres out of Wm. Carlton A-72 (Tr. 1, 2 Deed 362/548), and 94.0 acres out of Robert Burton A-41 (Deed 392/889 DR) from Surface to 11,300' (100' below T.D. in Willeford No. 1), Upshur County, Texas, being Tracts 5, 6 & 10 of the Faye Willeford Gas Unit 42-459-057374-00A 94.0 acres, being 94.0 acres out of Robert Burton A-41 (Deed 392/889 DR) from Surface to 11,300' (100' below T.D. in Willeford No. 1), Upshur County, Texas, being Tract 5 of the Faye Willeford Gas Unit
Page 164 of 165 191
FIELD NAME PROPERTY NAME DEED PROPERTY CODE LEASE ARCO'S INTEREST ARCO LEASE NO. LESSOR/GRANTOR LESSEE/GRANTEE DATE BOOK PAGE - --------------------------- ----------------- -------------------------- --------------------- --------- ---- ---- 42-459-057375-000 Geneva Stevens, a widow A. E. Waghalter 4/5/72 129 509 - --------------------------- ----------------- -------------------------- --------------------- --------- ---- ---- 42-459-057786-00A Barbara Simpson Cooper Wagner & Brown, Ltd. 9/4/96 262 605 42-459-057787-00A W. P. Hamilton Wagner & Brown, Ltd. 3/10/97 262 601 42-459-057787-00B The Elbert Dennis Bowles, Wagner & Brown, Ltd. 3/12/97 262 603 Jr. Family Trust 42-459-057787-00C Harold W. Smith Wagner & Brown, Ltd. 8/25/97 - --------------------------- ----------------- -------------------------- --------------------- --------- ---- ---- 42-459-057786-00B Mary Margaret Carloss Team Invest, Inc. 8/18/97 275 71 42-459-057206-00F Rose Mings Knight Team Invest, Inc. 8/25/97 275 83 - --------------------------- ----------------- -------------------------- --------------------- --------- ---- ---- East Texas Field A. L. Jenkins (Small RI) 41555300 .7812% NRI FIELD NAME PROPERTY NAME PROPERTY CODE ARCO'S INTEREST ARCO LEASE NO. DESCRIPTION OF LANDS SUBJECT TO: - --------------------------- ------------------ ----------------------------------- ---------------------------------------------- 42-459-057375-000 24.10 acres out of 119.90 acre AR-105492 lease Tr. 4, L. Gonzales A-169 Joint Operating Agreement between C W (Deed 233/404 DR) from Surface to Resources et al 11,300' (100' below T.D. in Willeford No. 1), Upshur County, AR-105494 Texas, being Tract 11 of the Faye Farmout from Exxon Willeford Gas Unit - --------------------------- ------------------ ----------------------------------- ---------------------------------------------- 42-459-057786-00A 52.0 acres out of Wm. Carlton AR-105492 A-72 (Deed 149/468 DR), Upshur Joint Operating Agreement between C W County, Texas, being Tract 1 of Resources et al the Faye Willeford Gas Unit 42-459-057787-00A 1514.60 acres, being tracts of 91.0 and 63.60 acres out of Wm. Carlton A-72 (Dees 173/280 and 172/240 DR respectively), Upshur County, Texas, being Tracts 2 & 3 of the Faye Willeford Gas Unit 42-459-057787-00B 1514.60 acres, being tracts of 91.0 and 63.60 acres out of Wm. Carlton A-72 (Dees 173/280 and 172/240 DR respectively), Upshur County, Texas, being Tracts 2 & 3 of the Faye Willeford Gas Unit 42-459-057787-00C 1514.60 acres, being tracts of 91.0 and 63.60 acres out of Wm. Carlton A-72 (Dees 173/280 and 172/240 DR respectively), Upshur County, Texas, being Tracts 2 & 3 of the Faye Willeford Gas Unit - --------------------------- ------------------ ----------------------------------- ---------------------------------------------- 42-459-057786-00B 52.0 acres out of Wm. Carlton AR-105492 A-72 Deed 149/468 DR), Upshur Joint Operating Agreement between C W County, Texas, being Tract 1 of Resources et al the Faye Willeford Gas Unit 4/24/96 Letter Agreement between Team Invest, 42-459-057206-00F 264.90 acres, being 91.0 acres Inc. and Wagner & Brown, Ltd. (Deed 173/280 DR) out of Wm. Carlton A-72 and 73.6 (Deed 173/280 DR) and 110.3 aces (MD 233/189 DR) out of Wm. Carlton A-72 and Leino Gonzales A-169, Upshur County, Texas, being Tracts 2, 3 & 4 of the Faye Willeford Gas Unit - --------------------------- ------------------ ----------------------------------- ---------------------------------------------- East Texas Field 37.5 acres out of H. H. Edwards A. L. Jenkins (Small RI) Survey, Upshur County, Texas 41555300 .7812% NRI
Page 165 of 165 192 EXHIBIT B Attached to and made a part of that certain Purchase & Sale Agreement effective as of October 1, 1999, By and between Atlantic Richfield Company (ARCO) and Future Acquisition 1995, Ltd. (Purchaser) EXCLUDED ASSETS 1. Lien Under South Kilgore Unit Operating Agreement as more particularly described in Affidavit of Lien Under Operating Agreement dated July 16, 1998, recorded in V 2084, P 0188-0206, Rusk County, Texas, INSOFAR AND ONLY INSOFAR as said lien secures unpaid amounts attributable to the period prior to the Effective Date. 2. All records, files and maps subject to rights of the East Texas Engineering Association (ETEA) unless, or until, proof of Purchaser's membership in the ETEA is provided to ARCO 3. 24.4 acres tract of land in Gregg County, Texas, more commonly referred to as production office tract located at 1907 East Old Highway 80, White Oak, TX 75693, subject to the Surface Lease Agreement attached to the Purchase and Sale Agreement as Exhibit 10.2(l). 4. Stock certificates for and ownership in the East Texas Salt Water Disposal Company 5. Certain geological and all geophysical data, licenses, rights and intellectual property held or managed by ARCO in, but not limited to, Gregg, Upshur, Smith, Rusk and Cherokee Counties, Texas. 193 EXHIBIT 2.2 Attached to and made a part of that certain Purchase & Sale Agreement effective as of October 1, 1999, By and between Atlantic Richfield Company (ARCO) and Future Acquisition 1995, Ltd. (Purchaser) GAS PRODUCTION IMBALANCES
PROPERTY NAME 10/1/99 IMBALANCE IN MCF VALUE/MCF ------------- ------------------------ --------- Lathrop GU #6 (151) $1.75
194 EXHIBIT 3.4 Attached to and made a part of that certain Purchase & Sale Agreement effective as of October 1, 1999, By and between Atlantic Richfield Company (ARCO) and Future Acquisition 1995, Ltd. (Purchaser) TITLE DEFECT NOTICE AR-_______ submitted by FUTURE ACQUISITION 1995, LTD. Claim No. Date Issued to ARCO: ------------------------ ----------------- *** State: County: ---------------------------- --------------- Property Name: ARCO Property Code: ------------------------- ----------------- ARCO Lease/Contract/DOI Numbers: A. BRIEF DESCRIPTION OF MATTER CONSTITUTING THE CLAIMED TITLE DEFECT: BPO APO WI NRI WI NRI P&SA Exhibit A: -------- -------- -------- --------- Research Results: -------- -------- -------- --------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- B. CLAIMED PURCHASE PRICE REDUCTION ATTRIBUTABLE TO THE CLAIMED TITLE DEFECT: Allocated Purchase Price: $ ------------------ Claimed Adjustment: $ ------------------ Adjusted Allocated Purchase Price: $ ------------------ C. ARCO RESPONSE/APPROVAL: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- *** Verified by: Date: -------------------------- ----------------- (ARCO Landman) Reviewed by: Date: -------------------------- ----------------- (ARCO Attorney) Approved by: Date: -------------------------- ----------------- (C&EA Manager) xc: Darren Groce, ARCO Legal Department, Midland 195 EXHIBIT 3.6 Attached to and made a part of that certain Purchase & Sale Agreement effective as of October 1, 1999, by and between Atlantic Richfield Company (ARCO) and Future Acquisition 1995, Ltd. (Purchaser) ALLOCATION OF VALUE
============================================================================================================ ASSET NAME/DESCRIPTION TOTAL VALUE ---------------------- ----------- Sun Buy/Sell Crude Oil Contract $305,000.00 - ------------------------------------------------------------------------------------------------------------ Office / Warehouse / Furnishings / Computers $5,000.00 - ------------------------------------------------------------------------------------------------------------ Warehouse Inventory $30,000.00 - ------------------------------------------------------------------------------------------------------------ Cars / Trucks $15,000.00 - ------------------------------------------------------------------------------------------------------------
PROPERTY NAME ARCO PROPERTY CODE COUNTY TOTAL VALUE PRP ------------- ------------------ ------ ----------- --- A. TOOKE GAS UNIT WELL #1 (ORRI) 411005600 GREGG $ 45,000.00 - ------------------------------------------------------------------------------------------------------------ A. L. BACLE GAS UNIT WELL #1 (ORRI) 416326501 GREGG $ 4,500.00 - ------------------------------------------------------------------------------------------------------------ A. V. BACLE (RI) 415656100 GREGG $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ ADAMS 412025600 GREGG $ 2,300.00 - ------------------------------------------------------------------------------------------------------------ AKIN, J. W. "B" 412051500 GREGG $165,000.00 - ------------------------------------------------------------------------------------------------------------ AKIN, J. W. "A" 412050700 GREGG $ 46,000.00 - ------------------------------------------------------------------------------------------------------------ AKIN, J. W. "A" (RI) 412053100 GREGG $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ AKIN, J. W. GAS UNIT #1 (0RRI) 414142300 GREGG $ 27,000.00 - ------------------------------------------------------------------------------------------------------------ ANDERSON, W. M. (ORRI) 410005100 GREGG $ 13,000.00 - ------------------------------------------------------------------------------------------------------------ ANDERSON (ORYX) 412095701 GREGG $ 5,000.00 Y - ------------------------------------------------------------------------------------------------------------ ANDREWS, S. G. 412110400 GREGG $ 2,300.00 - ------------------------------------------------------------------------------------------------------------ ANNIE FENTON UNIT #1 WELL (ORRI) 437025200 GREGG $ 6,500.00 - ------------------------------------------------------------------------------------------------------------ ARCO TOOKE (ORRI) 410552400 GREGG $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ BANDER 412205400 GREGG $200,000.00 Y - ------------------------------------------------------------------------------------------------------------ BARNES, JETTIE A45(616,650318) (RI) 410427700 GREGG $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ BARNSWELL B & C (ORYX) 412220801 GREGG $ 5,000.00 Y - ------------------------------------------------------------------------------------------------------------ BRAWLEY, W. L. (776) (RI) 410462500 GREGG $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ BURNSIDE "A" 412640800 GREGG $ 2,300.00 - ------------------------------------------------------------------------------------------------------------ CALDWELL, DALLAS (R) 415348100 GREGG $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ CARR S "A" (RI) 413269600 GREGG $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ CARR, S "B" (RI) 418573100 GREGG $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ F. C. CHRISTIAN (RI) 415345600 GREGG $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ CHRISTIAN, JM GAS UNIT (RI) 400060900 GREGG $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ CLEMENS #3 (RI) 414145800 GREGG $ 11,700.00 - ------------------------------------------------------------------------------------------------------------ CLEMENS GAS UNIT #1 (RI) 435321800 GREGG $ 8,600.00 - ------------------------------------------------------------------------------------------------------------ CLEMENS, E.W. (RI) 412816800 GREGG $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ COBB, WM. (A-356,950) (RI) 410503600 GREGG $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ COBB, WM. (9232,875) (RI) 410500100 GREGG $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ COLE (659992, ETC) (RI) 410506100 GREGG $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ COLE, M. T. (RI) 417163200 GREGG $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ DAVIS GAS UNIT "E" #2 & #3 (ORRI) 413452400 GREGG $ 25,000.00 Y - ------------------------------------------------------------------------------------------------------------ DUNCAN 413275100 GREGG $ 2,300.00 - ------------------------------------------------------------------------------------------------------------ ELDER OIL UNIT "3" (RI) 416021500 GREGG $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ 1
196
PROPERTY NAME ARCO PROPERTY CODE COUNTY TOTAL VALUE PRP ------------- ------------------ ------ ----------- --- ELDER OIL UNIT, FRANK & JS (ORRI & RI) 416024000 GREGG $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ FENTON NO. 1 (ORRI) 435322600 GREGG $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ FISHBURN 413495800 GREGG $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ FISHBURN #1 GAS UNIT (ORRI) 415689700 GREGG $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ FISHER 413500800 GREGG $1,000,000.00 - ------------------------------------------------------------------------------------------------------------ FISHER, CADDIE (RI) 415322700 GREGG $ 12,000.00 - ------------------------------------------------------------------------------------------------------------ FLEMISTER (RI) 413521100 GREGG $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ FOSTER "A" 413555500 GREGG $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ FOSTER "B" 413560100 GREGG $ 15,000.00 - ------------------------------------------------------------------------------------------------------------ G. B. TENNERY 419501900 GREGG $ 2,300.00 - ------------------------------------------------------------------------------------------------------------ G. W. RICHEY GAS UNIT #2 (RI) 410689000 GREGG $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ G. W. RICHEY 1-H (RI) 412525800 GREGG $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ HALE, H. P. (ORRI) 416025800 GREGG $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ HARRIS (CONOCO) 37.5% 419499301 GREGG $ 745,000.00 - ------------------------------------------------------------------------------------------------------------ HARRIS (CONOCO) 62.5% 419499300 GREGG Included in above - ------------------------------------------------------------------------------------------------------------ HARRIS, T. B. 414010900 GREGG $1,250,000.00 - ------------------------------------------------------------------------------------------------------------ HAYS A & B 414060500 GREGG $ 50,000.00 Y - ------------------------------------------------------------------------------------------------------------ HOPKINS 414245400 GREGG $ 2,300.00 - ------------------------------------------------------------------------------------------------------------ HOUSTON STEPHENS UNIT #1-X (ORRI) 437450900 GREGG $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ HUGHEY "A" (WELL #5) 414275600 GREGG $ 5,000.00 Y - ------------------------------------------------------------------------------------------------------------ HUGHEY "A" (Except #5) 414270500 GREGG $ 4,600.00 - ------------------------------------------------------------------------------------------------------------ HUGHEY "B" & "C" 414280200 GREGG $ 2,300.00 - ------------------------------------------------------------------------------------------------------------ J D DAVIS - E- GAS UNIT #5 (ORRI) 410325401 GREGG $ 2,300.00 - ------------------------------------------------------------------------------------------------------------ J D DAVIS-E-GAS UNIT #4 (ORRI) 410325400 GREGG $ 2,300.00 - ------------------------------------------------------------------------------------------------------------ J. R. WILLIAMS GAS UNIT #1 415698600 GREGG $ 11,700.00 - ------------------------------------------------------------------------------------------------------------ JOHNSON, DORA 414415500 GREGG $ 2,300.00 - ------------------------------------------------------------------------------------------------------------ JONES, ALF (187446, 846) (RI) 410702100 GREGG $ 2,300.00 - ------------------------------------------------------------------------------------------------------------ JONES, CLEM (465905) (RI) 410703900 GREGG $ 2,300.00 - ------------------------------------------------------------------------------------------------------------ KING, A. A. "A" 414536400 GREGG $ 14,500.00 - ------------------------------------------------------------------------------------------------------------ KING, A. A. "B" 414537200 GREGG $ 11,600.00 - ------------------------------------------------------------------------------------------------------------ KING, A. A. "C" 414539900 GREGG $ 4,600.00 - ------------------------------------------------------------------------------------------------------------ KING, A. A. "D" 414538100 GREGG $ 4,600.00 - ------------------------------------------------------------------------------------------------------------ LATHROP GAS UNIT 417898000 GREGG $ 19,000.00 - ------------------------------------------------------------------------------------------------------------ LAWSON, MARY 414700600 GREGG $ 2,300.00 - ------------------------------------------------------------------------------------------------------------ LEE, T. W. 414745600 GREGG $ 39,900.00 - ------------------------------------------------------------------------------------------------------------ M. LEMAIRE (RI) 418989200 GREGG $ 2,300.00 - ------------------------------------------------------------------------------------------------------------ MATTIE MONCRIEF+A100 (ORRI) 411129000 GREGG $ 65,000.00 - ------------------------------------------------------------------------------------------------------------ MC GEORGE 415095300 GREGG $ 2,300.00 - ------------------------------------------------------------------------------------------------------------ M. C. SALTER GAS UNIT (RI) 417654500 GREGG $ 12,700.00 - ------------------------------------------------------------------------------------------------------------ MONCRIEF, MATTIE 415270100 GREGG $ 73,000.00 - ------------------------------------------------------------------------------------------------------------ ORR, J W GAS UNIT #1 (RI) 414143100 GREGG $ 2,300.00 - ------------------------------------------------------------------------------------------------------------
2 197
PROPERTY NAME ARCO PROPERTY CODE COUNTY TOTAL VALUE PRP ------------- ------------------ ------ ----------- --- P C CASTLEBERRY GAS UNIT (ORRI) 414681600 GREGG $ 9,100.00 - ------------------------------------------------------------------------------------------------------------ PENN 415610200 GREGG $ 54,000.00 - ------------------------------------------------------------------------------------------------------------ PERSONS, J. C. #1A (ORRI) 437451701 GREGG $ 2,300.00 - ------------------------------------------------------------------------------------------------------------ PET HOPKINS GAS UNIT (RI) & (ORRI) 437459203 GREGG $ 4,600.00 - ------------------------------------------------------------------------------------------------------------ R. CHRISTIAN (RI) 412225900 GREGG $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ RICHEY, G. W. (4007262, 263 & 264) (RI) 410863900 GREGG $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ RICHEY, G. W. (468402) (RI) 410862100 GREGG $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ RODDEN 415890300 GREGG $ 14,600.00 - ------------------------------------------------------------------------------------------------------------ SHILOH SCHOOL GAS UNIT #1 (ORRI) 411006400 GREGG $ 4,800.00 - ------------------------------------------------------------------------------------------------------------ SMITH, S. G. 416245500 GREGG $183,200.00 - ------------------------------------------------------------------------------------------------------------ STILL, C. L. (ORRI) 416017700 GREGG $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ STUCKY THRASHER GAS UNIT (ORRI) 412345000 GREGG $ 22,000.00 - ------------------------------------------------------------------------------------------------------------ T. B. HARRIS GAS UNIT #2 (RI & ORRI) 437459200 GREGG $ 18,000.00 - ------------------------------------------------------------------------------------------------------------ T. B. HARRIS GAS UNIT #3 (RI & ORRI) 437459201 GREGG $ 12,200.00 - ------------------------------------------------------------------------------------------------------------ T. B. HARRIS GAS UNIT #5 (RI & ORRI) 437459202 GREGG $ 12,700.00 - ------------------------------------------------------------------------------------------------------------ T. W. LEE GAS UNIT 415131300 GREGG $ 26,000.00 - ------------------------------------------------------------------------------------------------------------ TOOKE A (RI) 413013800 GREGG $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ TOOKE B (RI) 413014600 GREGG $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ TOOKE "B" 416530600 GREGG $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ TURNER 416570500 GREGG $150,000.00 Y - ------------------------------------------------------------------------------------------------------------ TUTTLE "B" 416580200 GREGG $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ TUTTLE "C" 416585300 GREGG $ 26,000.00 - ------------------------------------------------------------------------------------------------------------ WHATLEY 416815100 GREGG $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ WHEELER (RI) 415346400 GREGG $ 8,600.00 - ------------------------------------------------------------------------------------------------------------ WHEELER (419112,403) (RI) 410976700 GREGG $ 8,600.00 - ------------------------------------------------------------------------------------------------------------ WHEELER "A"+A129 (10880, 419100) (RI) 410977500 GREGG $ 8,600.00 - ------------------------------------------------------------------------------------------------------------ WILLIAMS, JOHN R. 416830500 GREGG $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ WILSON 416855100 GREGG $ 37,200.00 - ------------------------------------------------------------------------------------------------------------ WILSON, J. W. (ORRI) 410006900 GREGG $ 22,900.00 - ------------------------------------------------------------------------------------------------------------ J. T. JETER ESTATE GAS UNIT WELL #1 (RI) 413101100 GREGG/ UPSHUR $ 16,000.00 - ------------------------------------------------------------------------------------------------------------ BEALL, J. R. (RI) 410433100 RUSK $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ BEAN, MARY B. 412270400 RUSK $150,000.00 - ------------------------------------------------------------------------------------------------------------ BEAN, NAT "A" & "B" (RI) 417060100 RUSK $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ CHRISTIAN "C" 410495100 RUSK $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ DE GUERIN, M. C. (RI) 417260400 RUSK $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ DE GUERIN, M. C. (22) (RI) 410533800 RUSK $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ GILES "C" WELL #1-C (ORRI) 41081161C RUSK $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ JERNIGAN, W. M. (26-432); 5704) (RI) 410684900 RUSK $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ KENNEDY, MAJOR "B" 414492900 RUSK $ 51,000.00 - ------------------------------------------------------------------------------------------------------------ MASON #1 GAS UNIT (RI) 415029500 RUSK $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ MASON HEIRS #1 A145 (RI) 415031700 RUSK $ 1,200.00 - ------------------------------------------------------------------------------------------------------------
3 198
PROPERTY NAME ARCO PROPERTY CODE COUNTY TOTAL VALUE PRP ------------- ------------------ ------ ----------- --- MASON, J. F. (21) (RI) 410762400 RUSK $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ MASON, R. G. (16)+A150 (RI) 410763200 RUSK $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ MASON, T. O. (466902) (RI) 410761600 RUSK $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ PERKINS, A. K. (467904) (RI) 410834500 RUSK $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ PRICE, J. M. (ORRI) 415719200 RUSK $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ RUFUS JONES "A" 415959400 RUSK $ 2,300.00 - ------------------------------------------------------------------------------------------------------------ SCHUYLER (188215 & 615) (RI) 410890600 RUSK $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ SCHUYLER "A" (26-768,5101) (RI) 410891400 RUSK $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ SCHUYLER "B" (26-769-4970) (RI) 410892200 RUSK $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ SOUTH KILGORE UNIT 417539500 RUSK $10,500,500.00 Y - ------------------------------------------------------------------------------------------------------------ STRICKLAND - B 417880700 RUSK $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ WATSON, J. R. (ORRI) 416023100 RUSK $ 7,500.00 Y - ------------------------------------------------------------------------------------------------------------ WM. BRITTAIN 412323900 RUSK $ 188,900.00 - ------------------------------------------------------------------------------------------------------------ A. L. JENKINS (RI) 415553000 UPSHUR $ 1,200.00 - ------------------------------------------------------------------------------------------------------------ J H SABEY GAS UNIT 417896300 UPSHUR $ 1,100.00 - ------------------------------------------------------------------------------------------------------------ PETTY GAS UNIT 415000700 UPSHUR $ 8,100.00 - ------------------------------------------------------------------------------------------------------------ RUBEY ESTATE GAS UNIT 416000200 UPSHUR $ 33,300.00 - ------------------------------------------------------------------------------------------------------------ WATTS HEIRS GAS UNIT 411578300 UPSHUR $ 2,300.00 - ------------------------------------------------------------------------------------------------------------ E. A. WATTS (8985) (RI) 410968600 UPSHUR $ 2,300.00 - ------------------------------------------------------------------------------------------------------------ WEBB #1 (RI) 413546600 UPSHUR $ 16,000.00 - ------------------------------------------------------------------------------------------------------------ E. F. JOHNSON GAS UNIT 411001300 UPSHUR/ GREGG $ 2,300.00 - ------------------------------------------------------------------------------------------------------------ ROSE KIRKPATRICK GAS UNIT 410900700 UPSHUR/ GREGG $ 2,300.00 - ------------------------------------------------------------------------------------------------------------ D A PORTER GAS UNIT (ORRI) 410345900 UPSHUR/GREGG $ 25,500.00 - ------------------------------------------------------------------------------------------------------------ G. W. RICHEY AND ENERGY CO. (RI) 412689100 GREGG $ 2,300.00 - ------------------------------------------------------------------------------------------------------------ ARTERBERRY HEIRS UT. 413000600 SMITH $ 2,300.00 - ------------------------------------------------------------------------------------------------------------ FAYE PITTMAN WILLEFORD 400050100 UPSHUR $ 2,300.00 - ------------------------------------------------------------------------------------------------------------ TOTAL $16,000,000.00 ============================================================================================================
4 199 EXHIBIT 4.7 Attached to and made a part of that certain Purchase & Sale Agreement effective as of October 1, 1999, By and between Atlantic Richfield Company (ARCO) and Future Acquisition 1995, Ltd. (Purchaser) MATERIAL CHANGES IN LAST YEAR None 200 EXHIBIT 4.9 Attached to and made a part of that certain Purchase & Sale Agreement effective as of October 1, 1999, By and between Atlantic Richfield Company (ARCO) and Future Acquisition 1995, Ltd. (Purchaser) MATERIAL DEFECTS None 201 EXHIBIT 4.16 Attached to and made a part of that certain Purchase & Sale Agreement effective as of October 1, 1999, By and between Atlantic Richfield Company (ARCO) and Future Acquisition 1995, Ltd. (Purchaser) PENDING AND PROPOSED OPERATIONS AND CAPITAL PROJECTS None 202 EXHIBIT 9.6 Attached to and made a part of that certain Purchase & Sale Agreement effective as of October 1, 1999, By and between Atlantic Richfield Company (ARCO) and Future Acquisition 1995, Ltd. (Purchaser) LITIGATION 1. Madera v. Atlantic Richfield Company Civil Action No. 396CV2951-R United States District Court for the Northern Jurisdiction of Texas Dallas Division 2. Stanley G. Marshall, Jr., et al v. ARCO Oil & Gas Company, a division of Atlantic Richfield Company Civil Action No. 3217 District Court of 49th Judicial District, Zapata County, Texas Modified Judgement Abstract of Judgment filed in various courthouses around the State, including Rusk County, Texas. Supersedeas Bond obtained by ARCO Oil & Gas Company, approved and filed by the Zapata County District Clerk on July 2nd, 1998 3. Harris, et al v. East Texas Salt Water Disposal Company, et al Cause No. 96-04 District Court of 4th Judicial District, Rusk County, Texas 203 EXHIBIT 10.2(a) Attached to and made a part of that certain Purchase & Sale Agreement effective as of October 1, 1999, By and between Atlantic Richfield Company (ARCO) and Future Acquisition 1995, Ltd. (Purchaser) FORM OF CONVEYANCE, ASSIGNMENT AND BILL OF SALE Recording Requested by and STATE: When Recorded Return to: ---------------- COUNTY: - ----------------------------------- ---------------- - ----------------------------------- - ----------------------------------- CONVEYANCE, ASSIGNMENT AND BILL OF SALE This Conveyance, Assignment and Bill of Sale ("Assignment"), dated effective as of 7:00 a.m. Central Standard Time, on October 1, 1999 (the "Effective Time"), is from Atlantic Richfield Company, a Delaware corporation ("Assignor"), whose address is 600 North Marienfeld, Midland, Texas 79701, to Future Acquisition 1995, Ltd., a Texas Limited Partnership, ("Assignee"), whose address is 700 Louisiana, Suite 3700, Houston, TX 77002. PART I GRANTING AND HABENDUM CLAUSES For ten dollars ($10.00) and other good and valuable consideration, the receipt and sufficiency of which Assignor hereby acknowledges, Assignor has transferred, bargained, conveyed, and assigned, and does hereby transfer, bargain, convey, and assign to Assignee, effective for all purposes as of the Effective Time, all of the right, title and interest of Assignor in and to the following properties and assets (such properties and assets being hereinafter called the "Assets"): (a) The oil, gas and mineral leasehold estates and other real property and mineral interests described in Exhibit A, together with all of ARCO's rights in respect of any pooled, communitized or unitized acreage of which any such interest is a part (collectively, the "Leasehold Interests"); (b) To the extent same are specifically attributable or allocable to the Leasehold Interests, (i) all wells, equipment and facilities that, as of the Closing Date, are located on and used solely and directly in connection with the production or treatment of oil and gas from the Leasehold Interests, (ii) all oil and gas and other hydrocarbon volumes produced on or after the Effective Date, (iii) to the extent same are assignable or transferable by ARCO without restriction under applicable law or third-party agreements (without the payment of any funds or other consideration), all orders, contracts, agreements and other instruments (excluding any instruments subject or relating to attorney/client privilege), (iv) to the extent same are assignable or transferable by ARCO under applicable law or third-party agreements (without the payment of any funds or other consideration), all easements, authorizations, permits and similar rights and interests, and (v) all other rights, privileges, benefits, powers and obligations conferred or imposed upon the owner and holder of the Leasehold Interests; (c) Any and all mineral fee interests, mineral servitudes, royalty interests, overriding royalty interests, net profits interests, production payments and all other interests of every kind and character in and to the properties and lands described on Exhibit A and/or which relate to the Leasehold Interests, the lands covered thereby or the production of hydrocarbons therefrom; (d) All office buildings, warehouses, other buildings and permanent improvements, surface leases, vehicles, trucks, warehouse inventory, parts, supplies, office furniture, fixtures and equipment, computers, printers, telephone systems and all other tangible assets used or held for use in connection with ARCO's ownership or operation of the Leasehold Interests and other Assets; (e) That certain Crude Oil Buy/Sell Contract made and entered into effective December 1, 1995, by and between ARCO Permian, a unit of Atlantic Richfield Company, and Sun Company, Inc. (R&M), as amended from time to time, insofar as applicable to the Leasehold Interests; (f) All casing leak allowable transfers, earned salt water allowables, key well allowable transfers and similar rights and interests related to or arising out of the Leasehold Interests and the production of and rights to produce hydrocarbons therefrom; and (g) To the extent same are specifically attributable or allocable to the Leasehold Interests, originals, to the extent available, or copies of the following records: (i) lease and land records, (ii) development geological records, (ii) operations, production and engineering records, and (iii) facility and well records, in each case excluding any exploration geological records, any interpretive or forecast data, any records subject or relating to attorney/client privilege and any such records or data that are not assignable pursuant to the terms of applicable law or third-party agreements (without the payment of any funds or other consideration) (collectively, the "Records"). 204 SAVE AND EXCEPT the assets and properties described in Exhibit B and any other assets and properties excluded pursuant to the terms hereof, and all other property, real, personal or intellectual, not expressly covered herein in Section 1.1 (the "Excluded Assets"). TO HAVE AND TO HOLD, subject to the terms, exceptions and other provisions herein stated, the Assets unto Assignee, its successors and assigns, forever. PART II MISCELLANEOUS 2.1 DISCLAIMER OF WARRANTY; SUBROGATION. The assignments and conveyances made by this Assignment are made without warranty of title, express, implied, or statutory, and without recourse, even as to the return of the purchase price or other consideration, but with full substitution and subrogation of Assignee, and all persons claiming by, through and under Assignee, to the extent assignable, in and to all covenants and warranties of Assignor's predecessors in title and with full subrogation of all rights accruing under the applicable statutes of limitation or prescription under the laws of the state where the Assets are located and all rights of actions of warranty against all former owners of the Assets. Any covenants or warranties implied by statute or law by the use of the words "transfer," "convey," "bargain" or "assign" or other similar words used in this Assignment are hereby expressly disclaimed, waived and negated. 2.2 FURTHER DISCLAIMERS. Assignor and Assignee agree that, to the extent required by applicable law to be operative, the disclaimers of certain warranties contained in this paragraph are "conspicuous" disclaimers for the purposes of any applicable law, rule or order. The Assets are assigned to Assignee without recourse (even as to the return of the purchase price or other consideration), covenant or warranty of any kind, express, implied or statutory. WITHOUT LIMITING THE EXPRESS PROVISIONS HEREOF, ASSIGNEE SPECIFICALLY AGREES THAT ASSIGNOR IS CONVEYING THE ASSETS ON AN "AS-IS, WHERE-IS, WITH ALL FAULTS" BASIS AND WITHOUT REPRESENTATION OR WARRANTY, EITHER EXPRESS, IMPLIED AT COMMON LAW, BY STATUTE OR OTHERWISE, OR STATUTORY (ALL OF WHICH ASSIGNOR HEREBY DISCLAIMS), RELATING TO (i) TITLE, (ii) TRANSFERABILITY, (iii) FITNESS FOR ANY PARTICULAR PURPOSE, MERCHANTABILITY, DESIGN OR QUALITY, (iv) COMPLIANCE WITH SPECIFICATIONS OR CONDITIONS REGARDING OPERATION, (v) FREEDOM FROM PATENT OR TRADEMARK INFRINGEMENT, (vi) ABSENCE OF LATENT DEFECTS, OR (vii) ANY OTHER MATTER WHATSOEVER. THE PROVISIONS OF THIS SECTION HAVE BEEN NEGOTIATED BY ASSIGNEE AND ASSIGNOR AFTER DUE CONSIDERATION AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY REPRESENTATIONS OR WARRANTIES OF ASSIGNOR, EITHER EXPRESS, IMPLIED OR STATUTORY WITH RESPECT TO THE SUBJECT PROPERTY THAT MAY ARISE PURSUANT TO ANY LAW NOW OR HEREAFTER IN EFFECT OR OTHERWISE EXCEPT AS EXPRESSLY SET FORTH HEREIN OR IN THAT CERTAIN PURCHASE AND SALE AGREEMENT DATED EFFECTIVE OCTOBER 1, 1999, BETWEEN ASSIGNOR AND ASSIGNEE. 2.3 FURTHER ASSURANCES. The parties agree to take all such further actions and execute, acknowledge and deliver all such further documents that are necessary or useful in carrying out the purposes of this Assignment. So long as authorized by applicable law so to do, (i) Assignor agrees to execute, acknowledge and deliver to Assignee all such other additional instruments, notices, division orders, transfer orders and other documents and to do all such other and further acts and things as may be necessary to more fully and effectively convey and assign to Assignee the Assets conveyed hereby or intended so to be conveyed; and (ii) Assignee agrees to execute, acknowledge and deliver to Assignor all such other additional instruments, notices, division orders, transfer orders and other documents and to do all such other and further acts and things as may be necessary to more fully and effectively evidence Assignor's rights in and to the Excluded Assets. 2.4 SUCCESSORS AND ASSIGNS. This Assignment shall bind and inure to the benefit of Assignor and Assignee and their respective successors and assigns. 2.5 GOVERNING LAW. This Assignment shall be governed by and interpreted in accordance with the laws of the State of Texas, without regard to any conflicts of law rule that would direct application of the laws of another jurisdiction, except to the extent that it is mandatory that the law of some other jurisdiction, wherein the Assets are located, shall apply. 2.6 EXHIBITS. All Exhibits attached hereto are hereby made a part hereof and incorporated herein by this reference. References in such Exhibits to instruments on file in the public records are made for all purposes. Unless provided otherwise, all recording references in such Exhibits are to the appropriate records of the counties in which the Assets are located. 2.7 CAPTIONS. The captions in this Assignment are for convenience only and shall not be considered a part of or affect the construction or interpretation of any provision of this Assignment. 2.8 COUNTERPARTS. This Assignment may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 2.9 GOVERNMENTAL ASSIGNMENTS. Separate assignments of certain parts of the Leasehold Interests may be executed on officially approved forms by Assignor to Assignee in sufficient counterparts to satisfy applicable statutory and regulatory requirements. Those assignments shall be deemed to contain all of the exceptions, reservations, rights, titles, power and privileges set forth herein as fully as though they were set forth in each such assignment. The interests conveyed by such separate assignments are the same, and not in addition to, the Leasehold Interests conveyed herein. 205 2.10 RECORDATION. To facilitate recording or filing of this Assignment, (i) the counterpart to be recorded in a given county may contain only those portions of the Exhibits that describe property located in that county, and (ii) each counterpart filed with a federal or state agency or office may contain only those portions of the Exhibits that describe property under the jurisdiction of that agency or office. Assignor and Assignee have each retained a counterpart of this Assignment with complete Exhibits. Another counterpart of this Assignment with complete Exhibits is to be filed in the official real property records of __________ County, __________. 2.11 ACCESS ACROSS LEASEHOLD INTERESTS. Assignee agrees to allow Assignor access, at no cost or expense to Assignor, to or across the Leasehold Interests, if Assignor conducts future operations in the vicinity of the Leasehold Interests or with respect to the Excluded Assets. EXECUTED on _______________, 199__, to be effective for all purposes as of the Effective Time. ASSIGNOR: ATLANTIC RICHFIELD COMPANY By: ------------------------------- T. L. Holland, Attorney in Fact ASSIGNEE: FUTURE ACQUISITION 1995, LTD. ("PURCHASER") BY: FUTURE PETROLEUM CORPORATION, ITS GENERAL PARTNER By: ------------------------------- Tim J. Goff, President 206 ACKNOWLEDGMENTS STATE OF TEXAS ) ) COUNTY OF MIDLAND ) This instrument was acknowledged before me on this _____ day of _________________, 1999, by T. L. Holland, as Attorney-in-Fact of ATLANTIC RICHFIELD COMPANY. ----------------------------------- Notary Public in and for the State of ---------- My commission expires: ------------ STATE OF ) ---------- ) COUNTY OF ) ---------- This instrument was acknowledged before me on this _____ day of __________, 199__, by _________________________, as ________________ of ______________________. ----------------------------------- Notary Public in and for the State of ---------- My commission expires: ------------ LIST OF EXHIBITS: Exhibit A _ Leasehold Interests Exhibit B _ Excluded Assets 207 EXHIBIT 10.2(d) Attached to and made a part of that certain Purchase & Sale Agreement effective as of October 1, 1999, By and between Atlantic Richfield Company (ARCO) and First Reserve Oil & Gas Co. (Purchaser) PROPERTY TRANSFER ACCOUNTING AGREEMENT ASSIGNOR: ASSIGNEE: -------------------------------- ---------------------- PROPERTY: PROPERTY CODE: -------------------------------- ------------------ STATE: Texas COUNTY: OPERATOR: -------------------------------- EFFECTIVE DATE OF TRANSFER: OIL PURCHASER: GAS PURCHASER: --------------------------- ---------------- NOTE: SOME ITEMS MAY OR MAY NOT APPLY IN THE FINAL AGREEMENT TO BE SIGNED AT CLOSING. ALL DATES ARE TENTATIVE AND WILL BE ALTERED PENDING ON THE ACTUAL CLOSING DATE AND CHANGE OF OPERATORSHIP. ASSIGNOR and ASSIGNEE hereby agree that: 1. ASSIGNOR will continue to pay all applicable royalties and severance taxes through the production month of ___________ as it pertains to ASSIGNOR's interest. ASSIGNEE will be responsible for marketing, collection of revenue and payment of royalties and taxes on any production subsequent to this date, if applicable. 2. ASSIGNOR will continue to pay all invoices with an occurrence date through the date of operator change. All other expenditures (ie: utility bill, etc.) will either be paid by ASSIGNOR and charged to the ASSIGNEE in the final accounting settlement, or the applicable invoices will be returned to the vendor for rebilling to ASSIGNEE. 3. ASSIGNOR will continue to prepare and file all required regulatory and other monthly production reports through the production month of ___________. Copies of reports for periods after the Effective Date shown above will be provided to the ASSIGNEE with the final accounting settlement. ASSIGNEE will provide at closing any required notification to regulatory agencies regarding change of ownership as of _________. ASSIGNEE agrees to assume operations on ___________. 4. ASSIGNOR will notify all utility companies of the change in ownership immediately after closing. 5. ASSIGNOR will provide Letters-in-Lieu of Transfer Orders, to be executed at closing, and ASSIGNEE will provide them to the product purchasers immediately after closing. 6. (ASSIGNOR/ASSIGNEE) will pay any applicable current year ad valorem taxes. Any tax statements received by the non-paying party will be promptly forwarded to the paying party for payment. Proration of taxes through the Effective Date shown above will be made by the paying party as part of the final accounting settlement. ACCEPTED AND AGREED TO THIS DAY OF , 1999. ------ ----------------- ------------------------------ ---------------------------- "ASSIGNOR" "ASSIGNEE" By: By: --------------------------- ------------------------ Name: Name: ---------------------- ------------------- Title: Title: --------------------- ------------------ 208 EXHIBIT 10.2(l) Attached to and made a part of that certain Purchase & Sale Agreement effective as of October 1, 1999, By and between Atlantic Richfield Company (ARCO) and Future Acquisition 1995, Ltd. (Purchaser) FORM OF SURFACE LEASE AGREEMENT THIS LEASE AGREEMENT is made effective and entered into this 1st day of October, 1999, by and between ATLANTIC RICHFIELD COMPANY, a Delaware corporation, whose address is P.O. Box 1610, Midland, Texas 79702-1610, hereinafter called "Lessor", and FUTURE ACQUISITION 1995, LTD., a Texas limited partnership, whose address is 700 Louisiana, Suite 3700, Houston, Texas 77002, hereinafter referred to as "Lessee". LESSOR FOR AND IN CONSIDERATION of the rents, covenants and promises herein contained to be kept, performed and observed by Lessee, does hereby lease and demise to Lessee, and Lessee does hereby rent and accept from Lessor, that real property, referred to as the leased premises and more particularly described in EXHIBIT "A", attached hereto and made a part hereof, for the purposes of construction, installation, maintenance, inspection, operation, repair, change or removal of equipment and facilities useful or incidental to the operation of the office building and pipe yard located and established at 1907 East Old Highway 80, Longview, Texas 75605, together with the right of ingress and egress to and from the leased premises. TO HAVE AND TO HOLD the said leased premises, together with all rights, privileges, easements, appurtenances and immunities belonging to or in any way appertaining to said leased premises, including, but not limited to, concurrent use of, any and all easements, rights, title and privileges of Lessor now or hereafter existing in, to or under the leased premises. 1. This lease shall be for a term of ten (10) years, referred to as the lease term, commencing on October 1, 1999, and ending on September 30, 2009; subject, however, to earlier termination as hereinafter provided. 2. Lessee may extend this lease for additional periods of five (5) years by giving Lessor written notice of Lessee's intention to do so at least three (3) months prior to the expiration of the expiring term. Such notice will be sent to Lessor at the heretofore-stated address. This lease shall terminate and become null and void without further notice on the expiration of the term specified, and any holding over by Lessee after the expiration of said term shall not constitute a renewal hereof or give Lessee any rights hereunder in or to the leased premises. 3. The consideration for this lease is FIVE THOUSAND DOLLARS AND NO/100 ($5,000) cash in hand paid by Lessee to Lessor, receipt of which is hereby acknowledged, which said amount shall cover the rental hereunder for the period of October 1, 1999 to September 30, 2000. A like rental payment shall be due on October 1, 2000 and each subsequent anniversary date hereof during the term hereof. All rental payments accruing hereunder shall be payable to Lessor in Midland, Texas, by mailing same to Lessor at P.O. Box 1610, Midland, Texas 79702-1610. In the event any rental payment which may become due and payable hereunder is not duly paid when due, then in that event said Lessor may, at its option pursue such remedy or remedies as may be available to it for the collection of such amount or amounts due and owing to it, declare a forfeiture of the rights of the Lessee, in which event all rights of the Lessee hereunder shall cease and terminate, or both, and said Lessor shall have the right to immediate possession of said premises. In the event said Lessor shall elect to declare forfeiture hereof as aforesaid, said Lessee shall nevertheless be liable to said Lessor for the payment of rentals for the period of time this lease has remained in force pursuant hereto; and the rental for any fractional part of said yearly period during which said lease shall have been in force shall be deemed to be a full year's rental. If Lessee chooses to exercise its option to renew for additional consecutive five (5) year term or terms, the rental during each successive five-year term shall be twenty-five percent (25%) more than the rental paid during the immediately preceding five-year term. If Lessee elects to renew for an additional term, it shall do so by giving Lessor written notice as described above. Each subsequent payment for each five (5) year renewal shall be paid on or before the expiration date of the previous term. 4. In addition to the rental, Lessee shall pay and discharge all taxes, general and special assessments, fines or penalties incurred on or after October 1, 1999 and other charges of every description which during the term of this lease may be levied on or assessed against Lessor's and Lessee's interests in the leased premises and all improvements and other property thereon. 5. Any and all material, buildings, structures, equipment and all property of whatsoever kind or character placed or used on the subject property by the Lessee shall remain the property of Lessee and Lessee shall have the full and complete right at any time during the term of this lease, or within a reasonable time after the abandonment or termination hereof, not to exceed one year, 6 months, to go upon the subject property and remove said property therefrom. 6. Lessee may, at any time and from time to time, encumber the leasehold interest, by deed of trust, mortgage or other security instrument, without obtaining the consent of Lessor, but no such encumbrance shall constitute a lien on the fee title of Lessor, and the indebtedness secured thereby, shall at all times be and remain inferior and subordinate to all the conditions, covenants and obligations of this lease and to all of the rights of the Lessor hereunder. 7. In the event the leased premises or any part thereof shall be taken for public or quasi-public purposes by condemnation as a result of any action or proceeding in eminent domain, or shall be transferred in lieu of condemnation to any authority entitled to exercise the power of eminent domain, the interests of Lessor 209 and Lessee in the award or consideration for such transfer and the effect of the taking or transfer on this lease shall be as provided by this article. a) In the event the entire leased premises is taken or so transferred, this lease and all of the right, title and interest thereunder shall cease on the date title to such land so taken or transferred vests in the condemning authority, and the proceeds of such condemnation shall be divided so that Lessor shall receive all of such proceeds insofar and only insofar as they pertain to the title to the surface of the land, and any improvements placed thereon by Lessor, and Lessee shall receive all such proceeds insofar and only insofar as they pertain to the title to the improvements of Lessee existing on the leased premises. b) In the event of the taking or transfer of only a part of the leased premises leaving the remainder of the premises in such location, or in such form, shape or reduced size as to be not effectively and practicably usable in the opinion of Lessee for the purpose of operation thereon of Lessee's business, this lease and all right, title and interest thereunder shall cease on the date title to the land or the portion thereof so taken or transferred vests in the condemning authority. c) In the event of such taking of only a part of the leased premises leaving the remainder of the premises in such location and in such form, shape or size as to be used effectively and practicably in the opinion of Lessee for the purpose of operation thereon of Lessee's business, this lease shall terminate and end as to the portion of the premises so taken or transferred as of the date title to such portion vests in the condemning authority, but shall continue in full force and effect as to the portion of the leased premises not so taken or transferred. From and after such date, the rental required to be paid by Lessee to Lessor shall be reduced during the unexpired portion of this lease to that proportion of the annual fixed rental herein reserved which the value of the part of the leased premises not so taken bears to the value of the total of the leased premises, such values to be determined as of the date of the actual commencement of the physical taking of said premises when Lessee is disturbed in his possession as a result thereof but immediately before any actual taking. Lessee shall, however, continue to pay the full amount of percentage rent due hereunder. d) A voluntary conveyance by Lessor to a public utility, agency or authority under threat of a taking under the power of eminent domain in lieu of formal proceedings shall be deemed a taking within the meaning of this article. 9. Lessee shall use its best efforts to materially comply with all applicable laws, rules and regulations of any governmental authorities in connection with its use of the subject property. 10. Upon the termination of this lease, Lessee shall relinquish the leased premises from further use and occupancy and shall leave the surface of the leased premises in as near its original condition as is reasonably possible and shall remove any and all material, buildings structures, equipment and all property of whatsoever kind or character placed or used on the subject property by Lessee. 11. No assignment of this lease, either in whole or in part, shall be effective without first obtaining the prior written consent of Lessor. 12. Lessee shall indemnify and save Lessor harmless from all liability, damage, environmental claims, loss, cost and expense on account of any claim or claims asserted by any person or persons against Lessor because of bodily injury or death or damage to property resulting to such person or persons and arising out of Lessee's use and occupancy of the leased premises or the conduct and operation of any business of the Lessee thereon, and Lessee agrees, upon Lessor's request, to take over and defend, at Lessee's expense and without cost to Lessor, any and all suits or other proceedings instituted against Lessor by such person or persons to enforce any such claim or claims, and to pay and satisfy in full all sums that might be required to be paid to such person or persons, including all costs, expenses and reasonable attorney's fees, and expert and witness fees incurred in connection therewith. 13. Lessee shall permit Lessor or Lessor's agents, representatives or employees to enter on the leased premises for the purpose of inspection, to determine whether Lessee is in compliance with the terms of this lease, for purposes of maintaining, repairing or altering the premises, or for the purposes of showing the leased premises to prospective lessees, purchasers, mortgagees, or for the purpose of conducting tests, monitoring operations or remedial activities on or to the soil, surface water or groundwater or for any other lawful reason. 14. No waiver by Lessor of any default or breach of any covenant, condition or stipulation herein contained shall be treated as a waiver of any subsequent default or breach of the same or any other covenant, condition or stipulation hereof. 15. In the event Lessor shall sell or transfer the leased premises or any part thereof and as a part of such transaction shall assign its interest as Lessor in and to this lease, then from and after the effective date of such sale, assignment or transfer, Lessor shall have no further liability under this lease to Lessee except as to matters of liability which shall have accrued and are unsatisfied as of such date, it being intended that the covenants and obligations contained in this lease on the part of Lessor shall be binding on Lessor and its successors and assigns only during and in respect of their respective successive periods of ownership of the fee. 16. This agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, executors, administrators, legal representatives, successors and assigns where permitted by this agreement. 17. This agreement shall be construed under and in accordance with the laws of the State of Texas. 210 18. In case any one or more of the provisions contained in this agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision thereof and this agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. 19. This agreement constitutes the sole and only agreement of the parties hereto and supersedes any prior understandings or written or oral agreements between the parties respecting the within subject matter. 20. No amendment, modification or alteration of the terms hereof shall be binding unless the same be in writing, dated subsequent to the date hereof and duly executed by the parties hereto. 21. The rights and remedies provided by this lease agreement are cumulative and the use of any one right or remedy by either party shall not preclude or waive its right to use any or all other remedies. Said rights and remedies are given in addition to any other rights the parties may have by law, statute, ordinance or otherwise. 22. In the event Lessor or Lessee breaches any of the terms of this agreement whereby the party not in default employs attorneys to protect or enforce its rights hereunder and prevails, then the defaulting party agrees to pay the other party reasonable attorney's fees so incurred by such other party. THIS LEASE HAS BEEN EXECUTED by the parties on the date and year first above written. LESSOR: LESSEE: ATLANTIC RICHFIELD COMPANY FUTURE ACQUISITION 1995, LTD. BY: FUTURE PETROLEUM CORPORATION, ITS GENERAL PARTNER By: By: -------------------------------- --------------------------- T.L. Holland, Attorney-in-Fact Title: --------------------- THE STATE OF TEXAS ) COUNTY OF MIDLAND ) This instrument was acknowledged before me on this _______ day of _________ , 1999, by T.L. Holland, as Attorney-in-Fact of ATLANTIC RICHFIELD COMPANY, a Delaware corporation, on behalf of said corporation. ------------------------------------------- Notary Public in and for the State of Texas Commission Expires: ------------------------ THE STATE OF TEXAS ) COUNTY OF ) ----------------- This instrument was acknowledged before me on this _____ day of ____________ , 1999, by ________________________________ , as ______________________________ of FUTURE PETROLEUM CORPORATION, a Texas corporation, as the general partner of FUTURE ACQUISITION 1995, LTD., a Texas limited partnership, on behalf of said partnership. ------------------------------------------- Notary Public in and for the State of Texas Commission Expires: ------------------------ EX-10.10 3 SECOND AMENDED AND RESTATED CREDIT AGREEMENT 1 AS EXECUTED U.S. $100,000,000 SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as of September 30, 1999, among BARGO ENERGY COMPANY, as the Borrower, CERTAIN FINANCIAL INSTITUTIONS, as the Lenders and BANK OF AMERICA, N.A., as Administrative Agent for the Lenders BANC OF AMERICA SECURITIES LLC as Sole Lead Arranger and Book Manager 2 TABLE OF CONTENTS
PAGE ARTICLE I DEFINITIONS AND ACCOUNTING TERMS.......................................................2 1.1. Defined Terms.................................................................................2 1.2. Use of Defined Terms.........................................................................29 1.3. Cross-References.............................................................................30 1.4. Accounting and Financial Determinations......................................................31 ARTICLE II COMMITMENTS, BORROWING PROCEDURES AND NOTE............................................31 2.1. Commitments..................................................................................31 2.1.1. Revolving Credit Loans.............................................................31 2.1.2. Letters of Credit..................................................................32 2.1.3. Lenders Not Required To Make Loans Under Certain Circumstances.....................32 2.2. Reduction of Commitment Amount...............................................................32 2.2.1. Optional...........................................................................32 2.2.2. Mandatory..........................................................................33 2.3. Borrowing Procedure..........................................................................33 2.4. Continuation and Conversion Elections........................................................33 2.5. Funding......................................................................................33 2.6. Loan Accounts and Notes......................................................................34 2.7. Borrowing Base Redetermination...............................................................35 2.8. Purposes.....................................................................................36 ARTICLE III REPAYMENTS, PREPAYMENTS, INTEREST AND FEES............................................37 3.1. Repayments and Prepayments and Certain Borrowing Base Matters.................................................................................37 3.1.1. Repayments and Prepayments.........................................................37 3.1.2. Borrowing Base Deficiencies and Asset Sales........................................38 3.2. Interest Provisions..........................................................................39 3.2.1. Rates .............................................................................39 3.2.2. Post-Maturity Rates................................................................40 3.2.3. Payment Dates......................................................................40 3.3. Fees.........................................................................................41 3.3.1. Closing Fee........................................................................41 3.3.2. Administrative Agent's Fees........................................................41 3.3.3. Commitment Fees....................................................................41 3.3.4. Letter of Credit Face Amount Fee...................................................42 3.3.5. Letter of Credit Issuance Fee......................................................42 3.3.6. Letter of Credit Administrative Fee................................................42 3.3.7. Engineering Fees...................................................................42
3 TABLE OF CONTENTS CONTINUED
PAGE 3.4. Proceeds Account.............................................................................42 ARTICLE IV LETTERS OF CREDIT.....................................................................43 4.1. Issuance Requests............................................................................43 4.2. Issuances and Extensions.....................................................................44 4.3. Lenders' Participation.......................................................................45 4.4. Disbursements................................................................................46 4.5. Reimbursement................................................................................46 4.6. Deemed Disbursements.........................................................................47 4.7. Nature of Reimbursement Obligations..........................................................47 4.8. Increased Costs; Indemnity...................................................................49 ARTICLE V CERTAIN INTEREST RATE AND OTHER PROVISIONS............................................50 5.1. LIBO Rate Lending Unlawful...................................................................50 5.2. Deposits Unavailable.........................................................................51 5.3. Increased LIBO Rate Loan Costs, etc..........................................................51 5.4. Funding Losses...............................................................................52 5.5. Increased Capital Costs......................................................................53 5.6. Taxes........................................................................................53 5.7. Payments, Computations, etc..................................................................55 5.8. Sharing of Payments..........................................................................55 5.9. Setoff.......................................................................................56 5.10. Use of Proceeds..............................................................................57 5.11. Change of Lender.............................................................................57 ARTICLE VI CONDITIONS PRECEDENT..................................................................58 6.1. Initial Credit Extension.....................................................................58 6.1.1. Resolutions, etc...................................................................58 6.1.2. Delivery of Notes..................................................................59 6.1.3. Guaranties.........................................................................59 6.1.4. Pledge Agreements..................................................................59 6.1.5. Security Agreement.................................................................59 6.1.6. Amendment to Existing Mortgages....................................................60 6.1.7. Opinions of Counsel................................................................60 6.1.8. UCC Searches.......................................................................60 6.1.9. Evidence of Insurance..............................................................61 6.1.10. Engineering Report.................................................................61 6.1.11. Environmental Report and Questionnaire.............................................61
4 TABLE OF CONTENTS CONTINUED
PAGE 6.1.12. Budget.............................................................................61 6.1.13. Financial Statements...............................................................61 6.1.14. Consents, etc......................................................................61 6.1.15. Shareholder Acknowledgment.........................................................62 6.1.16. Compliance with Representations and Warranties.....................................62 6.1.17. Amended Security Documents, etc....................................................62 6.1.18. Closing Fees, Expenses, etc........................................................62 6.1.19. Other Documents....................................................................62 6.2. Inclusion of Hydrocarbon Interests in the Borrowing Base.....................................62 6.2.1. Environmental Report and Questionnaire.............................................63 6.2.2. Mortgage...........................................................................63 6.2.3. UCC Searches.......................................................................63 6.2.4. Evidence of Insurance..............................................................64 6.2.5. Engineering Reports................................................................64 6.2.6. Material Contracts; Security Agreement.............................................64 6.2.7. Guaranties.........................................................................64 6.2.8. Pledge Agreement...................................................................64 6.2.9. Other Documents....................................................................65 6.3. All Credit Extensions........................................................................65 6.3.1. Compliance with Warranties, No Default, etc........................................65 6.3.2. Credit Request.....................................................................65 6.3.3. Satisfactory Legal Form............................................................66 ARTICLE VII REPRESENTATIONS AND WARRANTIES........................................................66 7.1. Organization, etc............................................................................66 7.2. Due Authorization, Non-Contravention, etc....................................................67 7.3. Government Approval, Regulation, etc.........................................................67 7.4. Investment Company Act.......................................................................67 7.5. Public Utility Holding Company Act...........................................................67 7.6. Validity, etc................................................................................67 7.7. Financial Information........................................................................68 7.8. No Material Adverse Change...................................................................68 7.9. Litigation, Labor Controversies, etc.........................................................68 7.10. Ownership of Properties......................................................................68 7.11. Taxes........................................................................................69 7.12. Pension and Welfare Plans....................................................................69 7.13. Compliance with Law..........................................................................69 7.14. Claims and Liabilities.......................................................................69
5 TABLE OF CONTENTS CONTINUED
PAGE 7.15. No Prohibition on Perfection of Security Documents...........................................69 7.16. Solvency.....................................................................................70 7.17. Environmental Warranties.....................................................................70 7.18. Regulations T, U and X.......................................................................72 7.19. Insurance....................................................................................72 7.20. Year 2000 Compliance.........................................................................72 7.21. Accuracy of Information......................................................................72 ARTICLE VIII COVENANTS.............................................................................73 8.1. Affirmative Covenants........................................................................73 8.1.1. Financial Information, Reports, Notices, etc.......................................73 8.1.2. Compliance with Laws, etc..........................................................76 8.1.3. Maintenance and Development of Properties..........................................77 8.1.4. Insurance..........................................................................77 8.1.5. Books and Records..................................................................78 8.1.6. Environmental Covenant.............................................................78 8.1.7. Further Assurances.................................................................79 8.1.8. Year 2000 Compliance...............................................................80 8.2. Negative Covenants...........................................................................80 8.2.1. Business Activities................................................................80 8.2.2. Indebtedness.......................................................................80 8.2.3. Liens .............................................................................82 8.2.4. Financial Condition................................................................85 8.2.5. Investments........................................................................85 8.2.6. Restricted Payments, etc...........................................................87 8.2.7. Rental Obligations.................................................................87 8.2.8. Consolidation, Merger, etc.........................................................88 8.2.9. Asset Dispositions, etc............................................................88 8.2.10. Modification of Certain Documents..................................................89 8.2.11. Transactions with Affiliates.......................................................89 8.2.12. Negative Pledges, Restrictive Agreements, etc......................................89 8.2.13. Take or Pay Contracts..............................................................90 8.2.14. Sale/Leasebacks....................................................................90 8.2.15. Hydrocarbon Hedging................................................................90 ARTICLE IX EVENTS OF DEFAULT.....................................................................91 9.1. Listing of Events of Default.................................................................91 9.1.1. Non-Payment of Obligations.........................................................91
6 TABLE OF CONTENTS CONTINUED
PAGE 9.1.2. Breach of Warranty.................................................................91 9.1.3. Non-Performance of Certain Covenants and Obligations...............................91 9.1.4. Non-Performance of Other Covenants and Obligations.................................92 9.1.5. Default on Other Indebtedness......................................................92 9.1.6. Judgments..........................................................................92 9.1.7. Pension Plans......................................................................92 9.1.8. Control of the Borrower............................................................93 9.1.9. Bankruptcy, Insolvency, etc........................................................93 9.1.10. Impairment of Security, etc........................................................94 9.1.11. Material Adverse Effect............................................................94 9.1.12. Borrowing Base Deficiency..........................................................94 9.2. Action if Bankruptcy.........................................................................94 9.3. Action if Other Event of Default.............................................................94 9.4. Rights Not Exclusive.........................................................................94 ARTICLE X THE ADMINISTRATIVE AGENT..............................................................95 10.1. Actions......................................................................................95 10.2. Funding Reliance, etc........................................................................95 10.3. Exculpation..................................................................................96 10.4. Successor....................................................................................96 10.5. Loans or Letters of Credit Issued by Bank of America.........................................97 10.6. Credit Decisions.............................................................................97 10.7. Copies, etc..................................................................................97 ARTICLE XI MISCELLANEOUS PROVISIONS..............................................................98 11.1. Waivers, Amendments, etc.....................................................................98 11.2. Notices......................................................................................99 11.3. Payment of Costs and Expenses...............................................................100 11.4. Indemnification.............................................................................100 11.5. Survival....................................................................................101 11.6. Severability................................................................................102 11.7. Headings....................................................................................102 11.8. Execution in Counterparts, Effectiveness, etc...............................................102 11.9. Governing Law; Entire Agreement.............................................................102 11.10. Successors and Assigns......................................................................102 11.11. Sale and Transfer of Loans and Notes; Participations in Loans and Notes.............................................................................103 11.11.1. Assignments.......................................................................103
7 11.11.2. Participations....................................................................104 11.12. Forum Selection and Consent to Jurisdiction.................................................105 11.13. Waiver of Jury Trial........................................................................106 11.14. Other Transactions..........................................................................106 11.15. Maximum Interest............................................................................106 11.16. Controlling Document........................................................................108 11.17. Notice......................................................................................109
SCHEDULE I Disclosure Schedule SCHEDULE II Subsidiaries SCHEDULE III Administrative Details SCHEDULE IV Existing Mortgages SCHEDULE V Existing Hedging Agreements SCHEDULE VI Updated Title Searches EXHIBIT A Form of Amended and Restated Secured Promissory Note EXHIBIT B Form of Security Agreement EXHIBIT C-1 Form of Borrowing Request EXHIBIT C-2 Form of Continuation/Conversion Notice EXHIBIT D Form of Guaranty EXHIBIT E-1 Form of Mortgage EXHIBIT E-2 Form of California Mortgage EXHIBIT F-1 Form of Pledge Agreement (Stock) EXHIBIT F-2 Form of Pledge Agreement (Partnership Interests) EXHIBIT G Form of Lender Assignment Notice EXHIBIT H Form of Opinions of Counsel to the Borrower, et al. EXHIBIT I-1 Form of Pre-Closing Title Opinions of Special Counsel to the Borrower EXHIBIT I-2 Form of Post-Closing Title Opinions of Special Counsel to the Borrower EXHIBIT J Form of Issuance Request
8 SECOND AMENDED AND RESTATED CREDIT AGREEMENT THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as of September 30, 1999, among BARGO ENERGY COMPANY, a Texas corporation (the "Borrower"), the various financial institutions as are now or may hereafter become parties hereto (collectively, the "Lenders") and BANK OF AMERICA, N.A., a national banking association, formerly Bank of America National Trust and Savings Association ("Bank of America"), as administrative agent for the Lenders (in such capacity, the "Administrative Agent"), W I T N E S S E T H: WHEREAS, the Borrower is engaged in the business of oil and gas exploration and production, and activities related or ancillary thereto; and WHEREAS, Future Petroleum Corporation, a Utah corporation ("Old FPC"), and Bank of America are parties to that certain Amended and Restated Credit Agreement dated as of December 4, 1998 (as amended, the "Existing Credit Agreement") pursuant to which Bank of America made commitments to make loans to Old FPC from time to time prior to the applicable commitment termination date in the maximum aggregate principal amount of loans at any one time not to exceed in the aggregate the lesser of (x) the collateral value, or (y) $50,000,000; and WHEREAS, Old FPC has, prior to the Effective Date, merged with and into the Borrower, such that the Borrower has assumed all of the liabilities and obligations, and is the owner of all of the assets, of Old FPC pursuant to the Merger Agreement (hereinafter defined); and WHEREAS, the Borrower desires to obtain Commitments from the Lenders and the Issuer pursuant to which (a) Loans will be made to the Borrower from time to time prior to the Commitment Termination Date; and (b) Letters of Credit will be issued by the Issuer for the account of the Borrower from time to time prior to the Commitment Termination Date; in maximum aggregate principal amount of Loans and Letter of Credit Outstandings at any one time not to exceed in the aggregate the lesser of (x) the Borrowing Base, or (y) $100,000,000; and 9 WHEREAS, the Lenders and the Issuer are willing, on the terms and subject to the conditions hereinafter set forth (including Article VI), to extend such Commitments, make such Loans to the Borrower and issue and participate in such Letters of Credit; and WHEREAS, the parties have agreed that it is in their respective best interests to enter into this Agreement amending, restating and superseding the Existing Credit Agreement; and WHEREAS, the proceeds of such Loans will be used (a) to refinance all Indebtedness under the Existing Credit Agreement; and (b) for Capital Expenditures, working capital and general corporate purposes of the Borrower and its Material Subsidiaries. NOW, THEREFORE, the parties hereto agree to amend and restate the Existing Credit Agreement in its entirety as follows: ARTICLE I DEFINITIONS AND ACCOUNTING TERMS SECTION 1.1. DEFINED TERMS. The following terms (whether or not underscored) when used in this Agreement, including its preamble and recitals, shall, except where the context otherwise requires, have the following meanings (such meanings to be equally applicable to the singular and plural forms thereof): "Administrative Agent" is defined in the preamble and includes each other Person as shall have subsequently been appointed as the successor Administrative Agent pursuant to Section 10.4. "Affiliate" of any Person means any other Person which, directly or indirectly, controls, is controlled by or is under common control with such Person (excluding any trustee under, or any committee with responsibility for administering, any Plan). A Person shall be deemed to be "controlled by" any other Person if such other Person possesses, directly or indirectly, power (a) to vote 10% or more of the securities (on a fully diluted basis) having ordinary voting power for the election of directors or managing general partners; or -2- 10 (b) to direct or cause the direction of the management and policies of such Person whether by contract or otherwise. "Agreement" means, on any date, this Second Amended and Restated Credit Agreement as originally in effect on the Effective Date and as thereafter from time to time amended, supplemented, amended and restated, or otherwise modified and in effect on such date. "Alternate Base Rate" means, on any date and with respect to all Base Rate Loans, a fluctuating rate of interest per annum equal to the higher of (a) the rate of interest as announced from time to time by the Administrative Agent as its "prime rate" at its Domestic Office; or (b) the Federal Funds Effective Rate most recently determined by the Administrative Agent plus 1/2%. The Alternate Base Rate is not necessarily intended to be the lowest rate of interest in connection with extensions of credit. Changes in the rate of interest on that portion of any Loans maintained as Base Rate Loans will take effect simultaneously with each change in the Alternate Base Rate. The Administrative Agent will give notice to the Borrower and the Lenders of changes in the Alternate Base Rate. "Applicable Law" means with respect to any Person or matter, any federal, state, regional, tribal or local statute, law, code, rule, treaty, convention, application, order, decree, consent decree, injunction, directive, determination or other requirement (whether or not having the force of law) relating to such Person or matter and, where applicable, any interpretation thereof by a Government Agency having jurisdiction with respect thereto or charged with the administration or interpretation thereof. "Applicable Margin" means, with respect to any Credit Extension of any type and at any time of determination, a margin above the interest rate or fee applicable to such type of Credit Extension determined by reference to the utilization of the Borrowing Base, as follows: -3- 11
Percentage of Alternate Borrowing Base Utilized Commitment Fee LIBO Rate Margin Base Rate Margin ----------------------- -------------- ---------------- ---------------- Less than 40% 0.30% 1.50% 0.50% 40% or more, but less than 80% 0.40% 1.75% 0.75% Equal to or greater than 80% 0.50% 2.00% 1.00%
Changes in the Applicable Margin with respect to any Credit Extension and Commitment Fee shall take effect, as applicable, upon the effective date of each Borrowing Base Redetermination and immediately upon any Credit Extension. "Utilization" and "utilized" means, at any time, the percentage obtained by dividing (i) the sum of all outstanding Loans plus Letter of Credit Outstandings by (ii) the Borrowing Base. Notwithstanding the foregoing, as required by Section 3.2.2(z) and without duplication, after any Borrowing Base Deficiency has existed for more than ninety (90) consecutive days, each LIBO Rate Margin and Alternate Base Rate Margin shall be the rate set forth above plus 3.00% per annum until such Borrowing Base Deficiency has been eliminated. "Approval" means each and every approval, authorization, license, permit, consent, variance, land use entitlement, franchise, agreement, filing or registration by or with any Government Agency or other Person necessary for all stages of developing, operating, maintaining and abandoning Oil and Gas Properties. "Arco East Texas Property" means those Oil and Gas Properties acquired by a Subsidiary of the Company from Atlantic Richfield Company pursuant to that certain Purchase and Sale Agreement dated August 3, 1999, effective October 1, 1999. "Arco Title Indemnity" means that certain Title Indemnity Agreement dated as of September 8, 1999, between Atlantic Richfield Company and Future Acquisition 1995, Ltd., pursuant to which Atlantic Richfield Company indemnifies and holds harmless Future Acquisition 1995, Ltd. and other parties described therein from and against losses and claims arising from the "Marshall Title Defect" and the "Marshall Judgment" (as such terms are defined therein) which may burden the Arco East Texas Property. -4- 12 "Assignee Lender" is defined in Section 11.11.1. "Authorized Officer" means, relative to any Obligor, those of its officers whose signatures and incumbency shall have been certified to the Administrative Agent and the Lenders pursuant to Section 6.1.1. "Base Rate Loan" means a Loan bearing interest at a fluctuating rate determined by reference to the Alternate Base Rate. "Bank of America" means Bank of America, N.A., formerly Bank of America National Trust and Savings Association. "Borrower" is defined in the preamble. "Borrowing" means the Loans of the same type and, in the case of LIBO Rate Loans, having the same Interest Period, made by all Lenders on the same Business Day and pursuant to the same Borrowing Request in accordance with Section 2.3. "Borrowing Base" shall mean, as at any date, (a) prior to the initial Borrowing Base Redetermination, $40,000,000, (b) prior to the initial Borrowing Base Redetermination, but after the satisfaction of the conditions precedent set forth in Section 6.2 pertaining to the Arco East Texas Property and upon its inclusion in the Borrowing Base, $55,000,000, and (c) thereafter, the amount determined from time to time pursuant to Section 2.7. "Borrowing Base Deficiency" means at any time the amount by which (a) the sum of the aggregate outstanding principal amount of all Loans plus Letter of Credit Outstandings exceeds (b) the then current Borrowing Base. "Borrowing Base Deficiency Notification Date" shall mean the date on which any notice of a Borrowing Base Deficiency is received by the Borrower. "Borrowing Base Determination Date" is defined in Section 2.7(c). "Borrowing Base Redetermination" shall mean a Scheduled Redetermination or a Requested Redetermination, as the case may be. "Borrowing Request" means a loan request and certificate duly executed by an Authorized Officer of the Borrower, substantially in the form of Exhibit C-1 hereto. "Business Day" means (a) any day which is neither a Saturday or Sunday nor a legal holiday on which banks are authorized or required to be closed in Dallas, Texas; and (b) relative to the making, continuing, prepaying or repaying of any LIBO Rate Loans, any day on which dealings in Dollars are carried on in the London interbank market. -5- 13 "Capital Expenditures" means, for any period, the sum of (without duplication) (a) all expenditures of the Borrower and its consolidated Subsidiaries for fixed or capital assets made during such period which, in accordance with GAAP, would be classified as capital expenditures; and (b) the aggregate amount of all Capitalized Lease Liabilities incurred during such period. "Capital Stock" means any and all shares, interests, participations or other equivalents in the equity interest (however designated) in such Person and any rights (other than debt securities convertible into an equity interest), warrants or options to subscribe for or to acquire interest in such Person. "Capitalized Lease Liabilities" means all monetary obligations of the Borrower or any of its consolidated Subsidiaries under any leasing or similar arrangement which, in accordance with GAAP, would be classified as capitalized leases, and, for purposes of this Agreement and each other Loan Document, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with GAAP. "Cash Equivalent Investment" means, at any time: (a) any evidence of Indebtedness, maturing not more than one (1) year after such time, issued or guaranteed by the United States Government; (b) commercial paper, maturing not more than nine (9) months from the date of issue, which is issued by (i) a corporation (other than an Affiliate of the Borrower) organized under the laws of any state of the United States or of the District of Columbia and rated at least A-1 by Standard & Poor's Corporation or P-1 by Moody's Investors Service, Inc., or (ii) a Lender which is rated at least A-1 by Standard & Poor's Corporation or P-1 by Moody's Investors Service, Inc.; (c) any certificate of deposit or bankers acceptance, maturing not more than one (1) year after such time, which is issued by (i) a commercial banking institution that is organized under the laws of the United States, or any state thereof, or that is organized under the laws of any other country which is a member of the Organization for Economic Development, or a political subdivision of any such country, and has a combined capital and surplus and undivided profits of not less than $500,000,000, or -6- 14 (ii) a Lender which is rated at least A-1 by Standard & Poor's Corporation or P-1 by Moody's Investors Service, Inc.; or (d) any repurchase agreement entered into with any Lender (or other commercial banking institution of the stature referred to in clause (c)) which (i) is secured by a fully perfected security interest in any obligation of the type described in any of clauses (a) through (c); and (ii) has a market value at the time such repurchase agreement is entered into of not less than 100% of the repurchase obligation of such Lender (or other commercial banking institution) thereunder. "CERCLA" means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended. "CERCLIS" means the Comprehensive Environmental Response Compensation Liability Information System List. "Change of Control" means, with respect to the Borrower, the occurrence of: (a) At such time as any Person or "group" (within the meaning of Section 13(d)(3) of the Exchange Act), (other than the Principal Shareholders), is or becomes the beneficial owner, directly or indirectly, of outstanding shares of the Capital Stock of the Borrower entitling such Person or Persons to exercise 50% or more of the total votes entitled to be cast at a regular or special meeting, or by action by written consent, of the stockholders of the Borrower in the election of directors (the term "beneficial owner" shall be determined in accordance with Rule 13d-3 of the Exchange Act); (b) At such time as the Borrower shall have consummated a reorganization, merger or consolidation or similar transaction, in each case, with respect to which all or substantially all the Principal Shareholders who were beneficial owners of the outstanding shares of Capital Stock of the Borrower immediately prior to such reorganization, merger or consolidation, beneficially own, directly or indirectly, less than 50% of the combined voting power of the then outstanding shares of Capital Stock of the Borrower resulting from such reorganization, merger or consolidation; or (c) Unless otherwise permitted under Section 8.2.8, if the Borrower ceases to own beneficially and of record 100% of the Capital Stock of each of Future Texas, Future Nevada and Future California, or if Future Texas or Future Nevada ceases to own beneficially and of record 100% of the general -7- 15 partner and limited partner interests, respectively, in the Partnership Subsidiaries; provided that, the following shall not be deemed a Change of Control: (a) the acquisition or beneficial ownership of voting securities by the Initial Holders, any Principal Shareholder Affiliate, or any group of which an Initial Holder or its respective Principal Shareholder Affiliates is a member; (b) any repurchase of voting securities by the Borrower or any Subsidiary of the Borrower; (c) any transaction that causes a Person to become the beneficial owner of voting securities of the Borrower as a result of acquiring an interest in an Initial Holder, a Principal Shareholder Affiliate of an Initial Holder or a transferee of an Initial Holder, or (d) any distribution or dividend to equity-holders otherwise permitted by this Agreement made by any of the following entities to their current equity-holders -- BER Partnership L.P., formerly known as Bargo Energy Resources, Ltd., a Texas limited partnership; TJG Investments, Inc., a Texas corporation; BEC Partnership, formerly known as Bargo Energy Company, a Texas general partnership; and BOC Operating Corporation, formerly known as Bargo Operating Company, Inc., a Texas corporation. "Code" means the Internal Revenue Code of 1986, as amended, reformed or otherwise modified from time to time. "Commission" means the Securities and Exchange Commission or any similar agency then having jurisdiction to enforce the Securities Act of 1933, and the rules and regulations of the Commission thereunder and under the Exchange Act. "Commitment" means, relative to any Lender, such Lender's obligation pursuant to Sections 2.1.1 and 2.1.2 to make Loans to the Borrower and to issue (in the case of an Issuer) or participate in (in the case of all Lenders) Letters of Credit pursuant to Section 2.1.3. "Commitment Amount" means the lesser of (i) the Total Commitment, as reduced from time to time pursuant to the provisions of Section 2.2, or (ii) the Borrowing Base. "Commitment Fee" is defined in Section 3.3.3. "Commitment Availability" means, on any date, the excess of (a) the then Commitment Amount, over (b) the sum of (i) the aggregate outstanding principal amount of all Loans on such date, plus -8- 16 (ii) the Letter of Credit Outstandings on such date. "Commitment Termination Date" means the earliest of (a) the Stated Maturity Date; (b) the date on which the Commitment Amount is terminated in full or reduced to zero pursuant to Section 2.2; and (c) the date on which any Commitment Termination Event occurs. "Commitment Termination Event" means (a) the occurrence of any Default described in clauses (a) through (d) of Section 9.1.9 with respect to the Borrower or any Subsidiary; or (b) the occurrence and continuance of any other Event of Default and either (i) the declaration of the Loans and other Obligations to be due and payable pursuant to Section 9.3, or (ii) in the absence of such declaration, the giving of notice by the Administrative Agent, acting at the direction of the Required Lenders, to the Borrower that the Commitments have been terminated. "Consents" means a Consent to Assignment executed and delivered pursuant to Section 6.1.15 or Section 6.2.6, in form and substance satisfactory to the Administrative Agent, pursuant to which the counterparty to each Material Contract (i) consents to the assignment of each such Material Contract to the Administrative Agent as security for the Obligations, and (ii) provides the Administrative Agent an independent right to cure defaults under such Material Contract. "Consolidated Net Income" means, with respect to the Borrower and its consolidated Subsidiaries for any period, the consolidated net income (or loss) of the Borrower and its consolidated Subsidiaries for such period. "Contingent Liability" means any agreement, undertaking or arrangement by which any Person guarantees, endorses or otherwise becomes or is contingently liable upon (by direct or indirect agreement, contingent or otherwise, to provide funds for payment, to supply funds to, or otherwise to invest in, a debtor, or otherwise to assure a creditor against loss) the indebtedness, obligation or any other liability of any other Person (other than by endorsements of instruments in the course of collection), or guarantees the payment of dividends or other distributions upon the shares of any -9- 17 other Person. The amount of any Person's obligation under any Contingent Liability shall (subject to any limitation set forth therein) be deemed to be the outstanding principal amount (or maximum principal amount, if larger) of the debt, obligation or other liability guaranteed thereby. "Continuation/Conversion Notice" means a notice of continuation or conversion and certificate duly executed by an Authorized Officer of the Borrower, substantially in the form of Exhibit C-2 hereto. "Controlled Group" means all members of a controlled group of corporations and all members of a controlled group of trades or businesses (whether or not incorporated) under common control which, together with the Borrower, are treated as a single employer under Section 414(b) or 414(c) of the Code or Section 4001 of ERISA. "Credit Extension" means and includes (a) the advancing of any Loans by the Lenders in connection with a Borrowing, and (b) any issuance by an Issuer, or extension of the Stated Expiry Date by an Issuer, of a Letter of Credit. "Current Ratio" means, at the end of each Fiscal Quarter, the ratio of (a) the current assets (including the unused portion of the Commitment Amount) of the Borrower and its consolidated Subsidiaries to (b) the current liabilities (minus the current portion of long term Debt (including Debt under this Agreement)) of the Borrower and its consolidated Subsidiaries. "Debt" means the outstanding principal amount of all Indebtedness of the Borrower and its consolidated Subsidiaries of the nature referred to in clauses (a) and (b) of the definition of "Indebtedness". "Default" means any Event of Default or any condition, occurrence or event which, after notice or lapse of time or both, would constitute an Event of Default. "Disbursement Date" is defined in Section 4.4. -10- 18 "Disbursement" means the amount disbursed by the Issuer on a Disbursement Date. "Disclosure Schedule" means the Disclosure Schedule attached hereto as Schedule I, as it may be amended, supplemented or otherwise modified from time to time by the Borrower with the written consent of the Administrative Agent and the Required Lenders. "Distribution Payments" is defined in Section 8.2.6. "Dollar" and the sign "$" mean lawful money of the United States. "Domestic Office" means, relative to any Lender, the office of such Lender designated as such on Schedule III hereto or designated in a Lender Assignment Notice or such other office of a Lender (or any successor or assign of such Lender) within the United States as may be designated from time to time by notice from such Lender, as the case may be, to each other Person party hereto. "EBITDA" means for any period, the sum, without duplication, (a) Consolidated Net Income for such period, plus (b) Interest Expense for such period, plus (c) all depreciation and amortization of assets (including goodwill and other intangible assets) of the Borrower and its consolidated Subsidiaries deducted in determining Consolidated Net Income for such period, plus (minus) (d) all federal, state, local and foreign income taxes of the Borrower and its consolidated Subsidiaries deducted (or credits added) in determining Consolidated Net Income for such period, plus (minus) (e) other non-cash items deducted or added in determining Consolidated Net Income for such period, including non-cash write-downs in connection with ceiling tests as calculated in accordance with GAAP. "Effective Date" means the date this Agreement becomes effective pursuant to Section 11.8. "Eligible Assignee" means a Person which either: (a) is primarily engaged in the business of commercial banking and is (i) a Lender, (ii) a Subsidiary of a Lender, (iii) a Subsidiary of a Person of which a Lender is a Subsidiary, or (iv) a Person of which a Lender is a Subsidiary, or (b) is consented to as an assignee by the Borrower, the Issuer, and the Administrative Agent, which consents will not be unreasonably -11- 19 withheld, and represents that it is either (i) a commercial bank organized under the laws of the United States, or any state thereof, having a combined capital and surplus of at least $500,000,000, or (ii) a commercial bank organized under the laws of any other country which is a member of the Organization for Economic Development, or a political subdivision of any such country, having a combined capital and surplus of at least $100,000,000, provided that such bank is acting through a branch or agency located in the United States and further provided that Borrower is not required to pay withholding taxes on interest or principal owed to such bank based on Applicable Law at the time of the assignment. Notwithstanding the foregoing, after the occurrence of a Default, any assignment under clause (b) above shall not require the consent of the Borrower, and after the occurrence of an Event of Default under Section 9.1.1 or 9.1.9, any assignment under clause (b) above shall not require the consent of the Borrower and may be made to a commercial bank or any other Person. "Engineering Report" means one or more reports, in form and substance satisfactory to the Administrative Agent and the Required Lenders, prepared at the sole cost and expense of the Borrower by a petroleum engineer acceptable to the Administrative Agent in its reasonable business judgment, which shall evaluate the Proven Reserves and probable reserves attributable to the Hydrocarbon Interests owned directly by the Borrower and any of its Material Subsidiaries, as of the immediately preceding January 1 or July 1. Each Engineering Report shall set forth volumes, a projection of the future rate of production, present value of the net proceeds of production, estimated costs of actions described in subsection (a) of the definition of Remedial Action, operating expenses and Capital Expenditures, in each case based upon updated economic assumptions (including Hydrocarbon prices, escalation rates, discount rate assumptions and other general economic assumptions) acceptable to the Administrative Agent. "Environmental Laws" means all Applicable Laws, (including consent decrees and administrative orders) relating to public health and safety through protection of the environment. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended, and any successor statute of similar import, together with the regulations thereunder, in each case as in effect from time to time. References to sections of ERISA also refer to any successor sections. "Event of Default" is defined in Section 9.1. "Exchange Act" means the Securities Exchange Act of 1934, and the rules and regulations of the Commission thereunder. "Existing Credit Agreement" is defined in the second recital. -12- 20 "Existing Mortgages" means the mortgages and other security instruments described on Schedule IV hereto. "Federal Funds Effective Rate" means, for any period, a fluctuating interest rate per annum equal for each day during such period to (a) the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York; or (b) if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by the Administrative Agent from three federal funds brokers of recognized standing selected by it. Upon written request from the Borrower, the Lender shall advise the Borrower as to the details of the method of calculation of Federal Funds Effective Rate then utilized by the Lender. "Fee Letter" means that certain letter agreement dated June 4, 1999, between the Administrative Agent and the Borrower. "Fiscal Quarter" means any quarter ending on the last day of March, June, September or December of a Fiscal Year. "Fiscal Year" means any period of twelve consecutive calendar months ending on December 31; references to a Fiscal Year with a number corresponding to any calendar year (e.g., "Fiscal Year 1999") refer to the Fiscal Year ending on the December 31 occurring during such calendar year. "F.R.S. Board" means the Board of Governors of the Federal Reserve System or any successor thereto. "Future California" means Future Cal-Tex Corporation, a Texas corporation, the Subsidiary of the Borrower that owns interests in the South Coles Levee Unit Property in Kern County, California. "Future Nevada" means Future Energy Corporation, a Nevada corporation, the Subsidiary of the Borrower that is the sole limited partner of each of the Partnership Subsidiaries, and any successor limited partner or limited partners of any of the Partnership Subsidiaries. -13- 21 "Future Texas" means Future Petroleum Corporation, a Texas corporation, the Subsidiary of the Borrower that is the sole general partner of each of the Partnership Subsidiaries, and any successor general partner or general partners of any of the Partnership Subsidiaries. "GAAP" is defined in Section 1.4. "Government Agency" means any federal, state, regional, tribal or local government or governmental department or other entity charged with the administration, interpretation or enforcement of any Applicable Law. "Guaranties" means the guaranties of the Obligations, executed and delivered pursuant to Section 6.1.3, Section 6.2.3 or Section 8.1.7, substantially in the form of Exhibit D, given by each of the Material Subsidiaries. "Hazardous Material" means (a) any "hazardous substance", as defined by CERCLA; (b) any "hazardous waste", as defined by the Resource Conservation and Recovery Act, as amended; (c) any petroleum, crude oil or fraction thereof; (d) any hazardous, dangerous or toxic chemical, material, waste or substance within the meaning of any Environmental Law; (e) any radioactive material, including any naturally occurring radioactive material, and any source, special or by-product material as defined in 42 U.S.C. Section 2011 et seq., and any amendments or reauthorizations thereof; (f) asbestos-containing materials in any form or condition; or (g) polychlorinated biphenyls in any form or condition. "Hedging Agreements" means (a) interest rate swap agreements, basis swap agreements, interest rate cap agreements, forward rate agreements, interest rate floor agreements, and interest rate collar agreements, and all other agreements or arrangements designed to protect such Person against fluctuations in interest rates or currency exchange rates, and -14- 22 (b) forward contracts, options, futures contracts, futures options, commodity swaps, commodity options, commodity collars, commodity caps, commodity floors, and all other agreements or arrangements designed to protect such Person against fluctuations in the price of commodities. "Hedging Obligations" means, with respect to any Person, all liabilities (including but not limited to obligations and liabilities arising in connection with or as a result of early or premature termination of a Hedging Agreement, whether or not occurring as a result of a default thereunder) of such Person under Hedging Agreements. "Highest Lawful Rate" is defined in Section 11.15. "Hydrocarbon Interests" means all rights, titles and interests in and to oil and gas leases; oil, gas and mineral leases; other Hydrocarbon leases; mineral interests; mineral servitudes; overriding royalty interests; royalty interests; net profits interests; production payment interests; and other similar interests. "Hydrocarbons" means, collectively, oil, gas, casinghead gas, drip gasoline, natural gasoline, condensate, distillate and all other liquid or gaseous hydrocarbons and related minerals and all products therefrom, in each case whether in a natural or a processed state. "Impermissible Qualification" means, relative to the opinion or certification of any independent public accountant as to any financial statement of the Borrower, any qualification or exception to such opinion or certification (a) which is of a "going concern" or similar nature; (b) which relates to the limited scope of examination of matters relevant to such financial statement; (c) which relates to the treatment or classification of any item in such financial statement and which, as a condition to its removal, would require an adjustment to such item the effect of which would be to cause the Borrower to be in default of any of its obligations under Section 8.2.4; or (d) which relates to possible errors generated by financial reporting and related systems due to the Year 2000 Problem. "including" means including without limiting the generality of any description preceding such term, and, for purposes of this Agreement and each other Loan Document, the parties hereto agree that the rule of ejusdem generis shall not be applicable to limit a general statement, which is followed by or referable to an -15- 23 enumeration of specific matters, to matters similar to the matters specifically mentioned. "Indebtedness" of any Person means, without duplication: (a) all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments; (b) all obligations, contingent or otherwise, relative to the face amount of all letters of credit, whether or not drawn, and banker's acceptances issued for the account of such Person; (c) all other items which, in accordance with GAAP, would be included as liabilities on the liability side of the balance sheet of such Person as of the date at which Indebtedness is to be determined; (d) net liabilities of such Person under all Hedging Obligations; (e) whether or not so included as liabilities in accordance with GAAP, all obligations of such Person to pay the deferred purchase price of property or services, and indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse; (f) all monetary obligations of such Person with respect to Production Payments; (g) all obligations of such Person as lessee under leases which have been or should be, in accordance with GAAP, recorded as Capitalized Lease Liabilities; and (h) all Contingent Liabilities of such Person. For all purposes of this Agreement, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture in which such Person is a general partner or a joint venturer, unless such Indebtedness contains non-recourse provisions acceptable to the Administrative Agent. "Indemnified Liabilities" is defined in Section 11.4. "Indemnified Parties" is defined in Section 11.4. -16- 24 "Initial Holders" means Energy Capital Investment Company PLC, an English investment company, EnCap Energy Capital Fund III-B, L.P., a Texas limited partnership, BOCP Energy Partners, L.P., a Texas limited partnership, EnCap Energy Capital Fund III, L.P., a Texas limited partnership, Kayne Anderson Energy Fund, L.P., a Delaware limited partnership, BancAmerica Capital Investors SBICI, L.P., a Delaware limited partnership, Eos Partners, L.P., a Delaware limited partnership, Eos Partners SBIC, L.P., a Delaware limited partnership, Eos Partners SBIC II, L.P., a Delaware limited partnership, and SGC Partners II LLC, a Delaware limited liability company. "Interest Coverage Ratio" means, (i) at September 30, 1999, for the Fiscal Quarter ending on such date, (ii) at December 31, 1999, for the two consecutive Fiscal Quarters ending on such date, (iii) at March 31, 2000, for the three consecutive Fiscal Quarters ending on such date, and (iv) at the end of any Fiscal Quarter commencing with the Fiscal Quarter ending June 30, 2000, for the four consecutive Fiscal Quarters ending on such date, the ratio of (a) EBITDA of the Borrower and its consolidated Subsidiaries for such Fiscal Quarter(s) to (b) Interest Expense for such Fiscal Quarter(s). "Interest Expense" means, for any period, the consolidated interest expense of the Borrower and its consolidated Subsidiaries for such period (including all imputed interest under interest rate swaps constituting Hedging Agreements and including all capitalized interest, but excluding all fees paid under Section 3.3), as determined in accordance with GAAP, including that portion of any Capitalized Lease Liabilities of the Borrower and its Subsidiaries allocable to interest expense. "Interest Period" means, relative to any LIBO Rate Loans, the period beginning on (and including) the date on which such LIBO Rate Loan is made or continued as, or converted into, a LIBO Rate Loan pursuant to Section 2.3 or 2.4 and ending on (but excluding) the day which numerically corresponds to such date one, two, three or six months thereafter (or, if such month has no numerically corresponding day, on the last Business Day of such month), in each case as the Borrower may select in its relevant notice pursuant to Section 2.3 or 2.4; provided, however, that (a) no more than six (6) different Interest Periods may be in effect at any time; (b) Interest Periods commencing on the same date for Loans comprising part of the same Borrowing shall be of the same duration; (c) if such Interest Period would otherwise end on a day which is not a Business Day, such Interest Period shall end on the next following Business Day (unless, if such Interest Period applies to LIBO Rate Loans, such next following Business Day is the first Business Day of another calendar month, in -17- 25 which case such Interest Period shall end on the Business Day next preceding such numerically corresponding day); (d) no Interest Period may end later than the Stated Maturity Date; and (e) the Borrower shall select each Interest Period for a particular LIBO Rate Loan so as not to require (as reasonably foreseeable as possible) a prepayment of such LIBO Rate Loan during such Interest Period. "Investment" means, relative to any Person, (a) any loan or advance made by such Person to any other Person (excluding commission, travel and similar advances to officers and employees made in the ordinary course of business and excluding prepaid expenses incurred in the ordinary course of business); (b) any Contingent Liability of such Person; and (c) any ownership or similar interest held by such Person in any other Person; provided, however, that (i) Hedging Obligations and (ii) Production Payments where the Borrower or its Subsidiary is the grantor or transferor thereof shall not be considered Investments. The amount of any Investment shall be the original principal or capital amount thereof less all returns of principal or equity thereon (and without adjustment by reason of the financial condition of such other Person) and shall, if made by the transfer or exchange of property other than cash, be deemed to have been made in an original principal or capital amount equal to the fair market value of such property. "Issuance Request" means a request for the issuance of a Letter of Credit and certificate duly executed by the chief executive, accounting or financial Authorized Officer of the Borrower, in substantially the form of Exhibit J attached hereto (with such changes thereto as may be agreed upon from time to time by the Administrative Agent and the Borrower). "Issuer" means Bank of America or any affiliate, unit or agency of Bank of America which has agreed to issue one or more Letters of Credit at the request of the Administrative Agent (which shall, at the Borrower's request, notify the Borrower from time to time of the identity of any such Issuer). "Lender Assignment Notice" means a Lender Assignment Notice substantially in the form of Exhibit G hereto. -18- 26 "Lenders" is defined in the preamble. "Letter of Credit" is defined in Section 4.1. "Letter of Credit Availability" means, at any time, the lesser of (a) the excess of (i) $5,000,000 minus (ii) the then Letter of Credit Outstandings, or (b) the Commitment Availability at such time. "Letter of Credit Outstandings" means, at any time, an amount equal to the sum of (a) the aggregate Stated Amount at such time of all Letters of Credit then outstanding and undrawn (as such aggregate Stated Amount shall be adjusted, from time to time, as a result of drawings, the issuance of Letters of Credit, or otherwise), plus (b) the then aggregate amount of all unpaid and outstanding Reimbursement Obligations. "LIBO Office" means, relative to any Lender, the office of such Lender designated as such on Schedule III hereto or designated in a Lender Assignment Notice or such other office of a Lender (or any successor or assign of such Lender) as designated from time to time by notice from such Lender to the Borrower and the Administrative Agent, whether or not outside the United States, which shall be making or maintaining LIBO Rate Loans of such Lender hereunder. "LIBO Rate" means, with respect to each Interest Period for a LIBO Rate Loan: (a) the rate of interest per annum (carried out to the fifth decimal place) equal to the rate determined by the Administrative Agent to be the offered rate that appears on the page of the Telerate Screen that displays an average British Bankers Association Interest Settlement Rate (such page currently being page number 3750) for deposits in Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, -19- 27 determined as of approximately 11:00 a.m. (London time) two (2) Business Days prior to the first day of such Interest Period; (b) in the event that the rate referenced in the preceding clause (a) does not appear on such page or service or such page or service shall cease to be available, the rate of interest per annum (carried out to the fifth decimal place) equal to the rate determined by the Administrative Agent to be the offered rate on such other page or other service that displays an average British Bankers Association Interest Settlement Rate for deposits in Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, determined as of approximately 11:00 a.m. (London time) two (2) Business Days prior to the first day of such Interest Period; or (c) in the event that the rates referenced in the preceding clauses (a) and (b) are not available, the rate of interest per annum determined by the Administrative Agent as the rate of interest at which Dollar deposits (for delivery on the first day of such Interest Period) in same day funds in the approximate amount of the applicable LIBO Rate Loan and with a term equivalent to such Interest Period would be offered by its London Branch to major banks in the offshore Dollar market at their request at approximately 11:00 a.m. (London time) two (2) Business Days prior to the first day of such Interest Period. "LIBO Rate (Reserve Adjusted)" means, relative to any Loan to be made, continued or maintained as, or converted into, a LIBO Rate Loan for any Interest Period, a rate per annum (rounded upwards, if necessary, to the nearest 0.01 of 1%) determined pursuant to the following formula: LIBO Rate LIBO Rate = ------------------------------- (Reserve Adjusted) 1.00 - LIBOR Reserve Percentage The LIBO Rate (Reserve Adjusted) for any Interest Period for LIBO Rate Loans will be determined by the Administrative Agent on the basis of the LIBOR Reserve Percentage in effect on, and the applicable rates furnished to and received by the Administrative Agent, two (2) Business Days before the first day of such Interest Period. "LIBO Rate Loan" means a Loan bearing interest, at all times during an Interest Period applicable to such Loan, at a fixed rate of interest determined by reference to the LIBO Rate. "LIBOR Reserve Percentage" means, relative to any Interest Period for LIBO Rate Loans, the reserve percentage (expressed as a decimal and rounded upward, if necessary, to the nearest 0.01 of 1%) equal to the maximum aggregate reserve -20- 28 requirements (including all basic, emergency, supplemental, marginal and other reserves and taking into account any transitional adjustments or other scheduled changes in reserve requirements) specified under regulations issued from time to time by the F.R.S. Board and then applicable to assets or liabilities consisting of and including "Eurocurrency Liabilities," as currently defined in Regulation D of the F.R.S. Board, having a term approximately equal or comparable to such Interest Period. "Lien" means any security interest, mortgage, deed of trust, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or otherwise), charge against or interest in Property to secure (i) the payment of a debt or (ii) the performance of an obligation or other priority or preferential arrangement of any kind or nature whatsoever in respect of any Property (including those created by, arising under or evidenced by any conditional sale or other title retention agreement, the interest of a lessor under a capital lease, any financing lease having substantially the same economic effect as any of the foregoing, or the filing of any financing statement naming the owner of the asset to which such lien relates as debtor, under the Uniform Commercial Code or any comparable law) and any contingent or other agreement to provide any of the foregoing. "Loans" means the loans provided for by Section 2.1 and shall include Revolving Credit Loans. "Loan Document" means this Agreement, the Notes, the Security Documents, the Letters of Credit, the Fee Letter and all other agreements (including Hedging Agreements) relating to this Agreement entered into from time to time between or among the Borrower (or any or all of its Subsidiaries) and the Administrative Agent or any Lender (or, with respect to the Hedging Agreements, any Affiliates of any Lender), and any document delivered by the Borrower or any of its Subsidiaries in connection with the foregoing. "Material Adverse Effect" means with respect to any matter that such matter (a) could reasonably be expected materially and adversely to affect the assets, business, properties, condition (financial or otherwise), prospects, or results of operations of the Borrower and its Subsidiaries taken as a whole, or the value or condition of the Properties of the Borrower and its Subsidiaries taken as a whole, or the ability of the Borrower or any other Obligor to perform its obligations under any of the Loan Documents, or (b) has been brought by or before any court or arbitrator or any governmental body, agency or official, and draws into question or otherwise has or reasonably could be expected to have a material adverse effect on the validity or enforceability of any material provision of any Loan Document -21- 29 against any Obligor party thereto or the rights, remedies and benefits available to the Administrative Agent and the Lenders under the Loan Documents. "Material Contract" means each acquisition agreement, Hydrocarbon purchase and sale agreement, or similar contract relating to any Hydrocarbon Interests included in the Mortgaged Properties or other agreement, in each case as designated by the Administrative Agent. "Material Subsidiary" means, at any particular time, any Subsidiary (i) that has assets included in the Borrowing Base; (ii) that, together with its Subsidiaries, (a) accounted for more than 5% of the consolidated EBITDA of the Borrower and its Subsidiaries for the most recently completed Fiscal Quarter (computed on a retroactive proforma basis with respect to acquired Subsidiaries), or (b) was the owner of more than 5% of the consolidated assets of the Borrower and its Subsidiaries at the end of such Fiscal Quarter or, with respect to acquired or newly formed Subsidiaries, on the date of acquisition or formation of such acquired Subsidiary, all as shown in the case of (a) and (b) on the consolidated financial statements of the Borrower and its Subsidiaries for such Fiscal Quarter or on such acquisition or formation date; or (iii) that is designated by the Borrower in writing to the Administrative Agent as a Material Subsidiary. "Merger Agreement" means the Agreement and Plan of Merger dated as of April 26, 1999, by and between Future Petroleum Corporation, a Utah corporation, and FPT Corporation, a Texas corporation. "Mortgage Consents" means all consents required under existing oil and gas leases or other agreements and Approvals by Government Agencies to the granting of a Mortgage to the Administrative Agent, and as reasonably determined by the Administrative Agent with respect to Properties that become Mortgaged Properties after the Effective Date. "Mortgaged Properties" means the Hydrocarbon Interests, Properties and interests described in and secured by the Mortgages, as such Properties and interests are from time to time constituted. "Mortgages" means the Mortgage, Deed of Trust, Assignment, Security Agreement, Financing Statement and Fixture Filings executed and delivered pursuant to Section 6.2.2 or Section 8.1.7, substantially in the form of Exhibit E hereto, as amended, supplemented, restated or otherwise modified from time to time, and includes the Existing Mortgages and the New Mortgages. "New Mortgages" means Mortgages granted by the Borrower and its Subsidiaries encumbering the Hydrocarbon Interests and Properties of the Borrower -22- 30 and its Subsidiaries which did not secure the obligations under the Existing Credit Agreement. "Non-Redeemable Stock" means stock issued by the Borrower, provided that such stock is not considered debt for GAAP, tax law or any other purpose and provided further that neither the Borrower nor any of its Subsidiaries has any obligation to redeem or purchase or pay dividends on such stock or to exchange such stock for, or convert such stock to, any other security (other than "Non-Redeemable Common Stock"), whether such obligation arises pursuant to the terms of such stock or any other agreement relating thereto or otherwise and whether or not such obligation exists in all circumstances or only upon the occurrence of a particular event or condition or upon the passage of time or otherwise. "Non-Redeemable Common Stock" means Non-Redeemable Stock that is common stock issued by the Borrower. "Note" means the promissory note of the Borrower payable to the order of a Lender, in the form of Exhibit A hereto (as such promissory note may be amended, endorsed or otherwise modified from time to time), evidencing the aggregate Indebtedness of the Borrower to such Lender resulting from outstanding Loans, and also means all other promissory notes accepted from time to time in substitution therefor or renewal thereof. "Obligations" means all obligations (monetary or otherwise) of the Borrower and/or each other Obligor arising under or in connection with this Agreement, the Notes and each other Loan Document, including without limitation, all Hedging Obligations arising under Hedging Agreements between the Borrower or any of its Subsidiaries and a Lender or any Affiliate of a Lender. "Obligor" means the Borrower, any of its Subsidiaries, or any other Person (other than the Administrative Agent or a Lender) obligated under or otherwise a party to any Loan Document. "Oil and Gas Properties" means Hydrocarbon Interests; the Properties now or hereafter pooled or unitized with Hydrocarbon Interests; all presently existing or future unitization, pooling agreements and declarations of pooled units and the units created thereby (including without limitation all units created under orders, regulations and rules of any Government Agency having jurisdiction) which may affect all or any portion of the Hydrocarbon Interests; all operating agreements, joint venture agreements, contracts and other agreements which relate to any of the Hydrocarbon Interests or the production, sale, purchase, exchange or processing of Hydrocarbons from or attributable to such Hydrocarbon Interests; all Hydrocarbons in and under and which may be produced and saved or attributable to the Hydrocarbon Interests, the lands covered thereby and all oil in tanks and all rents, issues, profits, proceeds, products, revenues and other incomes from or attributable to the Hydrocarbon Interests; all tenements, profits a prendre, hereditaments, appurtenances and -23- 31 Properties in anywise appertaining, belonging, affixed or incidental to the Hydrocarbon Interests, Properties, rights, titles, interests and estates described or referred to above, including any and all Property, real or personal, now owned or hereinafter acquired and situated upon, used, held for use or useful in connection with the operating, working or development of any of such Hydrocarbon Interests or Property (excluding drilling rigs, automotive equipment or other personal property which may be on such premises for the purpose of drilling a well or for other similar temporary uses) and including any and all oil wells, gas wells, water wells, injection wells or other wells, buildings, structures, fuel separators, liquid extraction plants, plant compressors, pumps, pumping units, field gathering systems, tanks and tank batteries, fixtures, valves, fittings, machinery and parts, engines, boilers, meters, apparatus, equipment, appliances, tools, implements, cables, wires, towers, casing, tubing and rods, surface leases, rights-of-way, easements and servitudes together with all additions, substitutions, replacements, accessions and attachments to any and all of the foregoing. "Old FPC" is defined in the second recital. "Organic Document" means, relative to any corporate Obligor, its certificate of incorporation, its by-laws and all shareholder agreements, voting trusts and similar arrangements applicable to any of its authorized shares of Capital Stock, and, relative to any partnership Obligor, its partnership agreement. "Participant" is defined in Section 11.11.2. "Partners" means the general and limited partners of the Partnership Subsidiaries, being Future Texas as the general partner, and Future Nevada as the limited partner, and any successor general partner or limited partner of any Partnership Subsidiary. "Partnership Subsidiary" means any direct or indirect Subsidiary of the Borrower that is a limited partnership, including Future Acquisition 1995, Ltd., a Texas limited partnership, BMC Development No. 1 Limited Partnership, a Texas limited partnership and NCI Shawnee Limited Partnership, a Texas limited partnership. "PBGC" means the Pension Benefit Guaranty Corporation and any entity succeeding to any or all of its functions under ERISA. "Pension Plan" means a "pension plan", as such term is defined in section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a multiemployer plan as defined in section 4001(a)(3) of ERISA), and to which the Borrower or any corporation, trade or business that is, along with the Borrower, a member of a Controlled Group, may have liability, including any liability by reason of having been a substantial employer within the meaning of section 4063 of ERISA at any time -24- 32 during the preceding five years, or by reason of being deemed to be a contributing sponsor under section 4069 of ERISA. "Percentage" means, relative to any Lender, the percentage set forth on Schedule III hereto, as such percentage may be adjusted from time to time pursuant to Lender Assignment Notice(s) executed by such Lender and its Assignee Lender(s) and delivered pursuant to Section 11.11. "Person" means any natural person, corporation, partnership, limited liability company, firm, association, trust, Government Agency or any other entity, whether acting in an individual, fiduciary or other capacity. "Plan" means any Pension Plan or Welfare Plan. "Pledge Agreements" means the Pledge Agreements executed and delivered pursuant to Section 6.1.4, Section 6.2.8 or Section 8.1.7, substantially in the form of Exhibit F-1 (from the Borrower) or F-2 (from each of the Partners) hereto, as applicable, as amended, supplemented, restated or otherwise modified from time to time. "Principal Shareholders" means each of the Initial Holders, Thomas D. Barrow and Tim J. Goff. "Principal Shareholder Affiliate" means any Person which, directly or indirectly, controls, is controlled by or is under common control with a Principal Shareholder (excluding any trustee under, or any committee with responsibility for administering, any Plan). A Person shall be deemed to be "controlled by" any other Person if such other Person possesses, directly or indirectly, power (a) to vote 50% or more of the securities (on a fully diluted basis) having ordinary voting power for the election of directors or managing general partners; or (b) to direct or cause the direction of the management and policies of such Person whether by contract or otherwise. "Proceeds Account" is defined in Section 3.4. "Production Payments" means the grant or transfer to any Person of a production payment (whether volumetric or dollar denominated) or similar royalty, overriding royalty, net profits interest or other similar interest in Oil and Gas Properties, or the right to receive all or a portion of the production or the proceeds from the sale of production attributable to such Oil and Gas Properties where the holder of such interest has recourse solely to such interest and the grantor or transferor thereof has -25- 33 an express contractual obligation to produce and sell Hydrocarbons from such Oil and Gas Properties, or to cause such Oil and Gas Properties to be so operated and maintained, in each case in a reasonably prudent manner. "Property" means any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible. "Proven Reserves" means collectively, "proved oil and gas reserves," "proved developed producing oil and gas reserves," "proved developed non-producing oil and gas reserves" (consisting of proved developed shut-in oil and gas reserves and proved developed behind pipe oil and gas reserves), and "proved undeveloped oil and gas reserves," as such terms are defined by the U.S. Securities and Exchange Commission in its standards and guidelines. "Quarterly Payment Date" means, commencing December 31, 1999, the last Business Day of each March, June, September and December. "Reimbursement Obligation" is defined in Section 4.5. "Release" means a "release," as such term is defined in CERCLA. "Remedial Action" means any action under Environmental Laws required to (a) clean up, remove, treat, dispose of, abate, or in any other way address pollutants (including Hazardous Materials) in the environment, (b) prevent the Release or threat of a Release or minimize the further Release of pollutants, or (c) investigate and determine if a remedial response is needed and to design such a response and any post-remedial investigation, monitoring, operation, and maintenance and care. "Requested Redetermination" is defined in Section 2.7. "Required Lenders" means, at any time, Lenders holding, in the aggregate, at least 66-2/3% of the then outstanding principal amount of all Loans or, if no such principal amount is outstanding, Lenders having Percentages aggregating at least 66-2/3% of the Total Commitment. "Resource Conservation and Recovery Act" means the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., as in effect from time to time. "Restricted Payment Tests" means compliance with each of the following restrictions (both before and immediately after giving effect to the applicable Distribution Payment): (a) Tangible Net Worth shall not be less than the sum of (i) $44,574,521 plus (ii) fifty percent (50%) of consolidated net income of the -26- 34 Borrower and its Subsidiaries (excluding the effects of consolidated net losses), for each Fiscal Quarter beginning on or after July 1, 1999, plus (iii) one-hundred percent (100%) of the net proceeds of any Non-Redeemable Stock offering by the Borrower or any of its Subsidiaries at any time after the Effective Date; (b) the Current Ratio shall be not less than 1.0:1.0; (c) the Interest Coverage Ratio shall be not less than 3.0:1.0; (d) there shall exist no Borrowing Base Deficiency; (e) no Default shall have occurred and be continuing; and (f) the Lenders shall have consented in writing to such Distribution Payment with respect to the Series B Preferred. "Revolving Credit Loans" means the loans provided for by Section 2.1. "Scheduled Redetermination" is defined in Section 2.7. "Security Agreement" means the Amended and Restated Security Agreement executed and delivered pursuant to Section 6.1.5, Section 6.2.6 or Section 8.1.7 substantially in the form of Exhibit B, as amended, supplemented, restated or otherwise modified from time to time pursuant to which the Borrower or its Subsidiaries, as the case may be, pledges to the Administrative Agent as security for the Obligations the Material Contracts and the Borrower's or its Subsidiaries', as the case may be, bank accounts and intercompany accounts and loans receivable. "Security Documents" means, collectively, (a) the Guaranties, (b) the Pledge Agreements, (c) the Mortgages, (d) the Security Agreements, (e) the Consents and (f) the Mortgage Consents, together with any exhibits, schedules and other attachments to such documents and any financing statements related thereto, as such documents, exhibits, schedules, attachments or financing statements may be, from time to time, amended, supplemented, restated or otherwise modified. "Series B Preferred" means that portion of the Capital Stock of the Borrower known as the "Cumulative Redeemable Preferred Stock, Series B" issued by the Borrower to the Initial Holders pursuant to the Stock Purchase Agreement. "Shareholders' Agreement" means the Second Amended and Restated Shareholders' Agreement dated as of May 14, 1999, among the Borrower, B. Carl Price, a Texas resident, Don Wm. Reynolds, a Texas resident, Energy Capital Investment Company PLC, an English investment company, EnCap Equity 1994 Limited Partnership, a Texas limited partnership, Bargo Energy Resources, Ltd., a -27- 35 Texas limited partnership, TJG Investments, Inc., a Texas corporation, Bargo Energy Company, a Texas general partnership, Tim J. Goff, Thomas Barrow, James E. Sowell, Bargo Operating Company, Inc., a Texas corporation, EnCap Energy Capital Fund III-B, L.P., a Texas limited partnership, BOCP Energy Partners, L.P., a Texas limited partnership, EnCap Energy Capital Fund III, L.P., a Texas limited partnership, Kayne Anderson Energy Fund, L.P., a Delaware limited partnership, Banc America Capital Investors SBIC I, L.P., a Delaware limited partnership, Eos Partners, L.P., a Delaware limited partnership, Eos Partners SBIC, L.P., a Delaware limited partnership, Eos Partners SBIC II, L.P., a Delaware limited partnership, and SGC Capital Partners II LLC, a Delaware limited liability company, as the same may be, from time to time, amended, supplemented, restated or otherwise modified. "Stated Amount" of each Letter of Credit means the face amount or the "Stated Amount" of such Letter of Credit (as defined therein). "Stated Expiry Date" is defined in Section 4.1. "Stated Maturity Date" means September 30, 2002. "Stock Purchase Agreement" means the Stock Purchase Agreement dated as of May 14, 1999, among the Borrower and Energy Capital Investment Company PLC, an English investment company, EnCap Energy Capital Fund III-B, L.P., a Texas limited partnership, BOCP Energy Partners, L.P., a Texas limited partnership, EnCap Energy Capital Fund III, L.P., a Texas limited partnership, Kayne Anderson Energy Fund, L.P., a Delaware limited partnership, BancAmerica Capital Investors SBIC I, L.P., a Delaware limited partnership, Eos Partners, L.P., a Delaware limited partnership, Eos Partners SBIC, L.P., a Delaware limited partnership, Eos Partners SBIC II, L.P., a Delaware limited partnership, and SGC Partners II LLC, a Delaware limited liability company as the same may be, from time to time, amended, supplemented, restated or otherwise modified. "Subsidiary" means, with respect to any Person, (a) any corporation of which more than 50% of the outstanding Capital Stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether at the time Capital Stock of any other class or classes of such corporation shall or might have voting power upon the occurrence of any contingency) is at the time directly or indirectly owned by such Person, (b) any partnership, limited liability company, association or firm of which more than 50% of the equity interest or voting power is at the time directly or indirectly owned by such Person, by such Person and one or more other Subsidiaries of such Person, or by one or more other Subsidiaries of such Person or (c) any partnership in which such Person is a general partner; provided that associations, joint ventures or other relationships (i) which are established pursuant to a standard form AAPL Form 610 operating agreement or similar agreement and which are partnerships for purposes of income taxation only, (ii) which are not -28- 36 corporations, trusts, limited liability companies or partnerships (or subject to the Uniform Partnership Act) under applicable state law, and (iii) whose businesses are limited to the exploration, development and operation of oil, gas or mineral properties and interests owned directly by the parties in such associations, joint ventures or relationships, shall not be deemed to be "Subsidiaries" of such Person. "Surety Instruments" means all letters of credit (including standby and commercial), banker's acceptances, bank guaranties, shipside bonds, surety bonds and similar instruments. "Tangible Net Worth" means the consolidated net worth of the Borrower and its Subsidiaries (including therein the net amount received by the Borrower in respect of the issuance of the Series B Preferred) after subtracting therefrom the aggregate amount of any intangible assets of the Borrower and its Subsidiaries, including goodwill, franchises, licenses, patents, trademarks, trade names, copyrights, service marks and brand names. "Taxes" is defined in Section 5.6. "Total Commitment" means $100,000,000. "type" means, relative to any Loan, the portion thereof, if any, being maintained as a Base Rate Loan or a LIBO Rate Loan. "United States" or "U.S." means the United States of America, its fifty States and the District of Columbia. "Unsecured Indemnity" means that certain Amended and Restated Hazardous Materials Undertaking and Unsecured Indemnity dated as of September 30, 1999, from Future California, in favor of the Administrative Agent, as amended. "Welfare Plan" means a "welfare plan", as such term is defined in section 3(1) of ERISA. "Year 2000 Compliant" is defined in Section 7.20. "Year 2000 Problem" is defined in Section 7.20. SECTION 1.2. USE OF DEFINED TERMS. Unless otherwise defined or the context otherwise requires, terms for which meanings are provided in this Agreement shall have such meanings when used in the Disclosure Schedule and in each Note, Borrowing Request, Continuation/Conversion Notice, notice and other communication or other Loan Document delivered from time to time in connection with this Agreement or any other Loan Document. -29- 37 SECTION 1.3. CROSS-REFERENCES. Unless otherwise specified, references in this Agreement and in each other Loan Document to any Article or Section are references to such Article or Section of this Agreement or such other Loan Document, as the case may be, and, unless otherwise specified, references in any Article, Section or definition to any clause are references to such clause of such Article, Section or definition. (a) The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms. (b) The words "hereof," "herein," "hereunder" and similar words refer to this Agreement as a whole and not to any particular provision of this Agreement; and subsection, Section, Schedule and Exhibit references are to this Agreement or such other Loan Document, as the case may be, and, unless otherwise specified, references in any Article, Section or definition to any clause are references to such clause of such Article, Section or definition. (c) (i) The term "documents" includes any and all instruments, documents, agreements, certificates, indentures, notices and other writings, however evidenced. (ii) In the computation of periods of time from a specified date to a later specified date, the word "from" means "from and including"; the words "to" and "until" each mean "to but excluding," and the word "through" means "to and including." (iii) The term "property" includes any kind of property or asset, real, personal or mixed, tangible or intangible. (d) Unless otherwise expressly provided herein, (i) references to agreements (including this Agreement) and other contractual instruments shall be deemed to include all subsequent amendments and other modifications thereto, but only to the extent such amendments and other modifications are not prohibited by the terms of any Loan Document, and (ii) references to any statute or regulation are to be construed as including all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting the statute or regulation. (e) This Agreement and other Loan Documents may use several different limitations, tests or measurements to regulate the same or similar matters. All such limitations, tests and measurements are cumulative and shall each be performed in accordance with their terms. Unless otherwise expressly provided, any reference to any action of the Administrative Agent or the -30- 38 Lenders by way of consent, approval or waiver shall be deemed modified by the phrase "in its sole discretion" or "in their sole discretion," as applicable. (f) This Agreement and the other Loan Documents are the result of negotiations among and have been reviewed by counsel to the Lenders, the Borrower and the other parties, and are the products of all parties. Accordingly, they shall not be construed against the Lenders merely because of the Lenders' involvement in their preparation. SECTION 1.4. ACCOUNTING AND FINANCIAL DETERMINATIONS. Unless otherwise specified, all accounting terms used herein or in any other Loan Document shall be interpreted, all accounting determinations and computations hereunder or thereunder (including under Section 8.2.4) shall be made, and all financial statements required to be delivered hereunder or thereunder shall be prepared in accordance with, those generally accepted accounting principles ("GAAP") applied in the preparation of the financial statements referred to in Section 7.7. ARTICLE II COMMITMENTS, BORROWING PROCEDURES AND NOTE SECTION 2.1. COMMITMENTS. SECTION 2.1.1. REVOLVING CREDIT LOANS. On the terms and subject to the conditions of this Agreement (including Article VI), each Lender severally agrees to make loans (relative to such Lender, its "Revolving Credit Loans") to the Borrower equal to such Lender's Percentage of the aggregate amount of the Borrowing of Revolving Credit Loans requested by the Borrower to be made on such day described in this Section 2.1.1. On the terms and subject to the conditions hereof, the Borrower may from time to time borrow, prepay and reborrow Revolving Credit Loans. From time to time on any Business Day during the period from and after the Effective Date to but not including the Commitment Termination Date, each Lender will make Revolving Credit Loans to the Borrower equal to such Lender's Percentage of the amount of the Revolving Credit Loans requested by the Borrower to be made on such day in the applicable Borrowing Request therefor. The Borrower acknowledges that, as of the Effective Date, the aggregate outstanding amount of all loans under the Existing Credit Agreement is $19,605,000.00. On the Effective Date, each of the Lenders other than Bank of America shall be deemed to have purchased from Bank of America such Lender's Percentage share of the outstanding principal amount of such loans and shall pay to Bank of America an amount equal to the product of its Percentage multiplied by $19,605,000.00. -31- 39 SECTION 2.1.2. LETTERS OF CREDIT. From time to time on any Business Day prior to the Commitment Termination Date, each Issuer will issue, and each Lender severally will participate in, the Letters of Credit, in accordance with Article IV. SECTION 2.1.3. LENDERS NOT REQUIRED TO MAKE LOANS UNDER CERTAIN CIRCUMSTANCES. No Lender shall be permitted or required to (a) make any Loan if, after giving effect thereto (i) the aggregate outstanding principal amount of all Loans of all Lenders, together with all the Letter of Credit Outstandings, would exceed the Commitment Amount; or (ii) the aggregate outstanding principal amount of all Loans of such Lender, together with its Percentage of all Letter of Credit Outstandings, would exceed such Lender's Percentage of the Commitment Amount; or (iii) a Borrowing Base Deficiency would exist; or (b) issue (in the case of any Issuer) or participate in (in the case of any Lender) any Letter of Credit if, after giving effect thereto (i) all Letter of Credit Outstandings together with the aggregate outstanding principal amount of all Loans of all Lenders would exceed the Commitment Amount; or (ii) such Lender's Percentage of all Letter of Credit Outstandings together with the aggregate outstanding principal amount of all Loans of such Lender would exceed such Lender's Percentage of the Commitment Amount; or (iii) a Borrowing Base Deficiency would exist; or (iv) all Letter of Credit Outstandings would exceed $5,000,000. SECTION 2.2. REDUCTION OF COMMITMENT AMOUNT. The Commitment Amount is subject to reduction from time to time pursuant to this Section 2.2. SECTION 2.2.1. OPTIONAL. The Borrower may, from time to time on any Business Day, voluntarily reduce the Total Commitment; provided, however, that all such reductions shall require at least three (3) Business Days' prior notice to the Administrative Agent and be permanent, and any partial reduction of the Commitment -32- 40 Amount shall be in a minimum amount of $5,000,000 and in an integral multiple of $1,000,000. SECTION 2.2.2. MANDATORY. On any Commitment Termination Date, the Commitment Amount shall, without any further action, automatically and permanently be reduced to zero. SECTION 2.3. BORROWING PROCEDURE. By delivering a Borrowing Request to the Administrative Agent on or before 10:00 a.m. (Dallas time) on a Business Day, the Borrower may from time to time irrevocably request, on (i) such Business Day, in the case of Base Rate Loans and (ii) not less than three (3) nor more than five (5) Business Days' notice in the case of LIBO Rate Loans, that a Borrowing be made in a minimum amount of $1,000,000 and an integral multiple of $500,000, or in the unused amount of the Commitment Amount. On the terms and subject to the conditions of this Agreement, each Borrowing shall be comprised of the type of Loans and shall be made on the Business Day specified in such Borrowing Request. On or before 1:00 p.m. (Dallas time) on such Business Day each Lender shall deposit with the Administrative Agent same day funds in an amount equal to such Lender's Percentage of the requested Borrowing. Such deposit will be made to an account which the Administrative Agent shall specify from time to time by notice to the Lenders. To the extent funds are received from the Lenders, the Administrative Agent shall make such funds available to the Borrower by wire transfer to the accounts the Borrower shall have specified in its Borrowing Request. No Lender's obligation to make any Loan shall be affected by any other Lender's failure to make any Loan. SECTION 2.4. CONTINUATION AND CONVERSION ELECTIONS. By delivering a Continuation/Conversion Notice to the Administrative Agent on or before 10:00 a.m. (Dallas time) on a Business Day, the Borrower may from time to time irrevocably elect, on not less than three (3) nor more than five (5) Business Days' notice that all, or any portion in an aggregate minimum amount of $1,000,000 and an integral multiple of $500,000, of any Loans be, in the case of Base Rate Loans, converted into LIBO Rate Loans or, in the case of LIBO Rate Loans, be converted into a Base Rate Loan or continued as a LIBO Rate Loan (in the absence of delivery of a Continuation/Conversion Notice with respect to any LIBO Rate Loan at least three (3) Business Days before the last day of the then current Interest Period with respect thereto, such LIBO Rate Loan shall, on such last day, automatically convert to a Base Rate Loan); provided, however, that (a) each such conversion or continuation shall be pro rated among the applicable outstanding Loans of all Lenders, and (b) no portion of the outstanding principal amount of any Loan may be continued as, or be converted into, LIBO Rate Loans when any Default has occurred and is continuing. SECTION 2.5. FUNDING. Each Lender may, if it so elects, fulfill its obligation to make, continue or convert LIBO Rate Loans hereunder by causing one of its foreign branches or Affiliates (or an international banking facility created by such Lender) to -33- 41 make or maintain such LIBO Rate Loan; provided, however, that such LIBO Rate Loan shall nonetheless be deemed to have been made and to be held by such Lender, and the obligation of the Borrower to repay such LIBO Rate Loan shall nevertheless be to such Lender for the account of such foreign branch, Affiliate or international banking facility. In addition, the Borrower hereby consents and agrees that, for purposes of any determination to be made for purposes of Section 5.1, 5.2, 5.3 or 5.4, it shall be conclusively assumed that each Lender elected to fund all LIBO Rate Loans by purchasing Dollar deposits in its LIBO Office's interbank Eurodollar market. SECTION 2.6. LOAN ACCOUNTS AND NOTES. (a) The Loans made by the Lenders shall be evidenced by one or more loan accounts or records maintained by each Lender in the ordinary course of business. The loan accounts or records maintained by such Lender shall be rebuttable presumptive evidence of the amount of the Loans made by such Lender to the Borrower and the interest and payments thereon. Any failure so to record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrower hereunder to pay any amount owing with respect to the Loans. (b) Each Lender's Loans shall also be evidenced by a Note payable to the order of such Lender in a maximum principal amount equal to such Lender's Percentage of the Total Commitment. The Borrower hereby irrevocably authorizes each Lender to make (or cause to be made) appropriate notations on the grid attached to such Lender's Note (or on any continuation of such grid) or in other books and records maintained by such Lender, which notations, if made, shall evidence, inter alia, the date of, the outstanding principal of, and the interest rate and Interest Period applicable to the Loans evidenced thereby (the Borrower may from time to time reasonably request a copy of such grid). Such notations shall be conclusive and binding on the Borrower absent manifest error; provided, however, that the failure of any Lender to make any such notations shall not limit or otherwise affect any Obligations of the Borrower or any other Obligor. (c) The Borrower acknowledges that the Notes delivered to the Lenders as of the Effective Date amend, restate and renew the promissory notes given by the Borrower under the Existing Credit Agreement, and nothing in this Agreement or the other Loan Documents is intended to novate or discharge the indebtedness of the Borrower or the other Obligors under the Existing Credit Agreement. -34- 42 SECTION 2.7. BORROWING BASE REDETERMINATION. (a) Within fifteen (15) Business Days after receipt of the Engineering Report required to be delivered semi-annually, commencing with the Engineering Report required to be delivered not later than September 1, 1999, the Administrative Agent shall, based upon a review of such Engineering Report, propose to all of the Lenders a redetermined Borrowing Base. All of the Lenders shall, within ten (10) Business Days after receipt from the Administrative Agent of a proposal for a redetermined Borrowing Base, approve a redetermined Borrowing Base either (i) at the amount proposed by the Administrative Agent, or (ii) such other amount as all of the Lenders may approve, as provided in Section 2.7(d). Upon approval of a redetermined Borrowing Base, the Administrative Agent shall notify the Borrower in writing of the Borrowing Base determined by all of the Lenders on the basis of such Engineering Report. Each such determination is herein called a "Scheduled Redetermination". Each Scheduled Redetermination shall be effective as of (i) April 1st (with respect to Engineering Reports effective January 1st), and (ii) October 1st (with respect to Engineering Reports effective July 1st) upon notification of the Borrower by the Administrative Agent. (b) The Administrative Agent (on behalf of the Lenders) or the Borrower may, from time to time (but not more frequently than (i) one time during any calendar year by the Lenders, (ii) one time during any calendar year by the Borrower and (iii) in connection with any acquisition by the Borrower or its Subsidiaries of Oil and Gas Properties having a purchase price of $25 million or more), request a redetermination (at the sole cost and expense of the Borrower) of the Borrowing Base based upon the most recently received Engineering Report. Each such requested redetermination is herein called a "Requested Redetermination." The Lenders shall establish the redetermined Borrowing Base, and the Administrative Agent shall notify the Borrower in writing of the Borrowing Base determined by the Lenders, not later than thirty (30) days after such Requested Redetermination by the Borrower. Each Requested Redetermination shall be effective when the Borrower is notified of the amount of the redetermined Borrowing Base by the Administrative Agent. (c) Within five (5) Business Days after receipt of a notice from the Administrative Agent of the amount of a redetermined Borrowing Base, the Borrower shall by notice to the Administrative Agent either accept such amount as the new Borrowing Base or reduce the Borrowing Base from the amount proposed by the Administrative Agent to any lesser amount. Failure by the Borrower to take either such action within such five (5) Business Day period shall be deemed acceptance of such amount as the Borrowing Base. Upon any such acceptance or deemed acceptance by the Borrower, a new Borrowing Base in the amount accepted shall take effect on such date (herein called a -35- 43 "Borrowing Base Determination Date") and shall remain in effect until but not including the next Borrowing Base Determination Date. Upon any such reduction by the Borrower, a new Borrowing Base in the reduced amount specified by the Borrower shall take effect on such date (herein also called a "Borrowing Base Determination Date") and shall remain in effect until but not including the next Borrowing Base Determination Date. (d) Each determination or redetermination of the Borrowing Base pursuant to this Section 2.7 and Section 3.1.2 shall be made by all of the Lenders and the Administrative Agent, in the exercise of their reasonable discretion and in accordance with their customary and prudent standards for oil and gas lending and credit transactions as they exist at such time (which standards may change from time to time). In each case where the Administrative Agent shall propose a redetermined Borrowing Base, any Lender who objects to the proposed Borrowing Base shall, within the prescribed time period, simultaneously notify the Administrative Agent of the amount of the redetermined Borrowing Base that it believes appropriate, and such objecting Lender shall be deemed to have approved any Borrowing Base which is less than the Borrowing Base it believes is appropriate. Any Lender that does not object to the redetermined Borrowing Base proposed by the Administrative Agent within the prescribed time period shall be deemed to have approved the redetermined Borrowing Base proposed by the Administrative Agent. In the event that the Lenders do not so approve the redetermined Borrowing Base as proposed by the Administrative Agent, the Administrative Agent shall consult with each Lender that has so objected and thereafter establish a redetermined Borrowing Base that is so approved by the Lenders. (e) The Borrowing Base is also subject to adjustment as provided for in Section 3.1.2. SECTION 2.8. PURPOSES. The Borrower shall apply the proceeds of each Loan only (a) to refinance all Indebtedness under the Existing Credit Agreement; and (b) for Capital Expenditures, working capital and general corporate purposes of the Borrower and its Material Subsidiaries. -36- 44 ARTICLE III REPAYMENTS, PREPAYMENTS, INTEREST AND FEES SECTION 3.1. REPAYMENTS AND PREPAYMENTS AND CERTAIN BORROWING BASE MATTERS. The Borrower shall repay the unpaid principal amount of the Loans as set forth in this Section 3.1. SECTION 3.1.1. REPAYMENTS AND PREPAYMENTS. The Borrower shall repay in full the unpaid principal amount of each Revolving Credit Loan, and each Revolving Credit Loan shall mature, on the Stated Maturity Date. Prior thereto, the Borrower (a) may, from time to time on any Business Day, make a voluntary prepayment, in whole or in part, of the outstanding principal amount of any Loans; provided, however, that (i) in the case of a prepayment of a LIBO Rate Loan, all such voluntary prepayments shall require at least three (3) but no more than five (5) Business Days' prior written notice to the Administrative Agent (which notice is irrevocable); (ii) any such prepayment shall be made pro rata among Loans of the same type and, if applicable, having the same Interest Period; and (iii) all such voluntary partial prepayments shall be in an aggregate minimum amount of $250,000 and an integral multiple of $50,000; (b) shall, on each date when any reduction in the Commitment Amount shall become effective, including pursuant to Section 2.2, make a mandatory prepayment (which shall be applied (or held for application, as the case may be) by each Lender first to the payment of the aggregate unpaid principal amount of those Loans then outstanding and then to the payment of the then Letter of Credit Outstandings) equal to the excess, if any, of the aggregate outstanding principal amount of all Loans and Letter of Credit Outstandings over the Commitment Amount as so reduced; (c) shall make prepayments as specified in Section 3.1.2; and (d) shall, immediately upon any acceleration of the Loans pursuant to Section 9.2 or Section 9.3, repay all Loans, unless, pursuant to Section 9.3, only a portion of all Loans is so accelerated. Each payment or prepayment of any Loans made pursuant to this Section shall be without premium or penalty except as may be required by Section 5.4, and shall be applied, to the extent of such prepayment. No voluntary prepayment of principal of any Loans or any prepayment pursuant to the preceding clause (c) shall cause a reduction in any Commitment Amount. -37- 45 SECTION 3.1.2. BORROWING BASE DEFICIENCIES AND ASSET SALES. (a) Upon the occurrence of a Borrowing Base Deficiency, the Administrative Agent may (and, at the direction of the Required Lenders, shall) notify the Borrower of such Borrowing Base Deficiency. Within ten (10) days from and after the Borrowing Base Deficiency Notification Date, the Borrower shall notify the Administrative Agent that it shall, at its election, take one of the following actions within ninety (90) days after the occurrence of such Borrowing Base Deficiency: (i) it will execute and deliver to the Administrative Agent supplemental or additional Security Documents, in form and substance satisfactory to the Administrative Agent and its counsel, securing payment of the Notes and the other Obligations and covering additional Oil and Gas Properties directly owned by the Borrower or one or more of its Material Subsidiaries which are not then covered by any Security Document and which are of a type and nature, and having a value (as determined by the Administrative Agent and the Required Lenders, and in addition to other Oil and Gas Properties already subject to a Mortgage) and/or other collateral of a type, in an amount, and in all other respects satisfactory to the Administrative Agent and the Required Lenders, sufficient to eliminate the Borrowing Base Deficiency, all as more particularly described in Section 8.1.7(a) and (b), or (ii) it will pay an amount in respect of the Obligations (which shall be applied (or held for application, as the case may be) by the Administrative Agent to the payment of the aggregate unpaid principal amount of those Loans then outstanding and then Letter of Credit Outstandings) in an aggregate principal amount sufficient to eliminate such Borrowing Base Deficiency. If the Borrower shall elect to execute and deliver supplemental or additional Security Documents to the Administrative Agent pursuant to clause (i), it shall provide the Administrative Agent and each Lender with descriptions of the additional assets to be collaterally assigned (together with current valuations, Engineering Reports, Security Documents described in clause (i) and title evidence applicable thereto, each of which shall be in form and substance satisfactory to the Administrative Agent) within thirty (30) days after the Borrowing Base Deficiency Notification Date. Such supplemental or additional Security Documents shall be subject to the terms of Section 8.1.7. If the Borrower fails to take either of the actions described above within such ten (10)-day period, then without any necessity for notice to the Borrower or any other person, the Borrower shall become obligated immediately to pay -38- 46 Obligations in an aggregate principal amount equal to the applicable Borrowing Base Deficiency. (b) If the Borrower or any Subsidiary sells, transfers or otherwise disposes of Properties included in the most recent determination of the Borrowing Base and that have an aggregate sales price in excess of three percent (3%) of the then current Borrowing Base during the period from the effective date of the most recent Borrowing Base Determination until the effective date of the next Borrowing Base Determination, the Borrowing Base shall be immediately reduced, until the effective date of the next Borrowing Base Determination, by an amount as reasonably determined by the Administrative Agent and approved by the Required Lenders. If such reduction shall result in a Borrowing Base Deficiency, then in lieu of the provisions of clause (a) of Section 3.1.2, the Borrower shall immediately make a payment with respect to the Obligations in an amount equal to such Borrowing Base Deficiency. In addition to and cumulative of the foregoing, if a Borrowing Base Deficiency exists prior to such sale, transfer or other disposition of assets, then in lieu of the provisions of clause(a) of Section 3.1.2, the Borrower shall immediately make a payment with respect to the Obligations (which shall be applied (or held for application, as the case may be) by the Lenders first to the payment of the aggregate unpaid principal amount of those Loans then outstanding, and then to the payment of the then Letter of Credit Outstandings) in an aggregate principal amount equal to the lesser of the amount of the Borrowing Base Deficiency (after giving effect to the applicable sale, transfer or other disposition) or 100% of the sales proceeds from the applicable sale, transfer or other disposition, net of usual and customary fees, expenses and taxes. In addition, if the Borrower or any of its Subsidiaries raises capital through the issuance of any type of equity or issues any subordinated debt or senior unsecured debt otherwise permitted by this Agreement, the proceeds of such issuance, net of usual and customary fees, expenses and taxes, will first be applied to cure any Borrowing Base Deficiency. SECTION 3.2. INTEREST PROVISIONS. Interest on the outstanding principal amount of Loans shall accrue and be payable in accordance with this Section 3.2. SECTION 3.2.1. RATES. Pursuant to an appropriately delivered Borrowing Request or Continuation/Conversion Notice, the Borrower may elect that Loans comprising a Borrowing accrue interest at a rate per annum: -39- 47 (a) on that portion maintained from time to time as a Base Rate Loan, equal to the lesser of (I) the sum of the Alternate Base Rate from time to time in effect plus the Applicable Margin, and (ii) the Highest Lawful Rate; and (b) on that portion maintained as LIBO Rate Loans, during each Interest Period applicable thereto, equal to the lesser of (I) the sum of the LIBO Rate (Reserve Adjusted) for such Interest Period plus the Applicable Margin, and (ii) the Highest Lawful Rate. Notwithstanding the foregoing limitations pertaining to the Highest Lawful Rate, in the event that the amount payable under this Section 3.2.1 is limited to the Highest Lawful Rate, the Lenders and Issuers shall have the benefit of the provisions of Section 11.15 including Section 11.15(a)(iv). SECTION 3.2.2. POST-MATURITY RATES. After (w) the date any principal amount of any Loan shall have become due and payable (whether on the Stated Maturity Date, upon acceleration or otherwise, but only so long as such principal amount has not been paid), (x) any other monetary Obligation of the Borrower shall have become due and payable beyond any applicable grace period (including the failure of the Borrower to pay in full the amount of any Reimbursement Obligation on the applicable Disbursement Date, but only so long as such monetary Obligation has not been paid), (y) the date any other Event of Default shall have occurred (and so long as such Event of Default shall be continuing), and (z) the date that is ninety (90) days after a Borrowing Base Deficiency Notification Date, if the applicable Borrowing Base Deficiency has not been cured, the Borrower shall pay, but only to the extent permitted by Applicable Law, interest (after as well as before judgment) on all Obligations at a rate per annum equal to (a) with respect to LIBO Rate Loans for the period from the date such Loan becomes due and payable to the end of the then current Interest Period, the higher of (i) the sum of the LIBO Rate (Reserve Adjusted) for such Interest Period plus the Applicable Margin plus a margin of 3%, or (ii) the sum of the Alternate Base Rate plus the Applicable Margin plus a margin of 3%; or (b) in all other cases, the sum of the Alternate Base Rate plus the Applicable Margin plus a margin of 3%. SECTION 3.2.3. PAYMENT DATES. Interest accrued on each Loan shall be payable, without duplication: (a) on the Stated Maturity Date; -40- 48 (b) on the date of any optional or required payment or prepayment, in whole or in part, of principal outstanding on such Loan and on that portion of such Loan so paid or prepaid; (c) with respect to Base Rate Loans, on each Quarterly Payment Date occurring after the Effective Date; (d) with respect to LIBO Rate Loans, on the last day of each applicable Interest Period (and, if such Interest Period shall exceed three months, on the 90th day of such Interest Period); (e) with respect to any Base Rate Loans converted into LIBO Rate Loans on a day when interest would not otherwise have been payable pursuant to clause (c), on the date of such conversion; and (f) on that portion of any Loans which is accelerated pursuant to Section 9.2 or Section 9.3, immediately upon such acceleration. Interest accrued on Loans or other monetary Obligations arising under this Agreement or any other Loan Document after the date such amount shall have become due and payable (whether on the Stated Maturity Date, upon acceleration or otherwise) shall be payable upon demand. SECTION 3.3. FEES. The Borrower agrees to pay the fees set forth in this Section 3.3. All such fees shall be non-refundable. SECTION 3.3.1. CLOSING FEE. On the Effective Date, the Borrower agrees to pay to the Administrative Agent, at the closing for the pro rata account of each of the Lenders, an upfront fee in an amount based on each Lender's Percentage of the Total Commitment as the Borrower and the Lenders have previously agreed. SECTION 3.3.2. ADMINISTRATIVE AGENT'S FEES. The Borrower shall pay to the Administrative Agent for its own account the fees set forth in the Fee Letter on the respective dates for such payment prescribed in the Fee Letter. SECTION 3.3.3. COMMITMENT FEES. The Borrower shall pay to the Administrative Agent, for the pro rata account of each Lender, a Commitment Fee (the "Commitment Fee"), for the period from and including the Effective Date to but not including any Commitment Termination Date, equal to an amount determined in accordance with the utilization of the Borrowing Base as set forth in the definition of "Applicable Margin," of such Lender's Percentage of the daily average Total Commitment less the sum of (i) the aggregate outstanding principal amount of all Loans on such date, plus (ii) the Letter of Credit Outstandings on such date. Accrued -41- 49 Commitment Fees shall be payable by the Borrower in arrears on each Quarterly Payment Date and on the earlier of any Commitment Termination Date. SECTION 3.3.4. LETTER OF CREDIT FACE AMOUNT FEE. The Borrower agrees to pay to the Administrative Agent, for the pro rata account of each Lender, a fee for each Letter of Credit for the period from and including the date of the issuance of such Letter of Credit to (but not including) the date upon which such Letter of Credit expires or is fully drawn, at a rate per annum equal to the Applicable Margin (LIBO Rate column) per annum on the Stated Amount of such Letter of Credit. Such fee shall be payable by the Borrower in arrears on each Quarterly Payment Date, and on any Commitment Termination Date for any period then ending for which such fee shall not theretofore have been paid, commencing on the first such date after the issuance of such Letter of Credit. SECTION 3.3.5. LETTER OF CREDIT ISSUANCE FEE. The Borrower shall pay to the Administrative Agent, for the account of the applicable Issuer, a letter of credit issuance fee for each Letter of Credit issued by such Issuer equal to the greater of (x) 1/8 of 1% of the Stated Amount of such Letter of Credit or (y) $300. Such Letter of Credit fronting fee shall be due and payable on the date of such issuance. SECTION 3.3.6. LETTER OF CREDIT ADMINISTRATIVE FEE. The Borrower shall pay to the Administrative Agent, for the account of each Issuer, from time to time on demand the normal issuance, presentation, amendment and other processing fees, and other standard costs and charges, of the Issuer relating to letters of credit as from time to time in effect. SECTION 3.3.7. ENGINEERING FEES. For each Requested Redetermination in connection with an acquisition of Oil and Gas Properties pursuant to Section 2.7(b)(iii), the Borrower shall pay fees in the amount of $10,000 to the Administrative Agent (for its own account) and $5,000 to each other Lender. SECTION 3.4. PROCEEDS ACCOUNT. The Security Documents contain an assignment to the Administrative Agent by the Borrower and its Subsidiaries of all production of Hydrocarbons and all proceeds attributable thereto properly allocable to the Mortgaged Properties. Notwithstanding such assignment of production, the Borrower or such Subsidiaries, as applicable, may, until the Administrative Agent shall give notice to the contrary, receive such proceeds. Thereafter, all such proceeds from the sale of such production shall be paid directly into an account of the Borrower maintained with the Administrative Agent (the "Proceeds Account"). The Borrower hereby grants to the Administrative Agent a security interest in the Proceeds Account and all proceeds thereof. -42- 50 ARTICLE IV LETTERS OF CREDIT SECTION 4.1. ISSUANCE REQUESTS. By delivering to the Administrative Agent an Issuance Request on or before 12:00 noon (Dallas time), the Borrower may request, from time to time prior to any Commitment Termination Date, and on not less than three (3) nor more than ten (10) Business Days' notice, that such Issuer issue an irrevocable standby letter of credit in such form as may be mutually agreed by the Borrower and such Issuer (each a "Letter of Credit"), in support of financial or performance obligations of the Borrower incurred in the Borrower's ordinary course of business and which are described in such Issuance Request. Upon receipt of an Issuance Request, the Administrative Agent shall promptly notify the Lenders and the Issuer thereof. Each Letter of Credit shall by its terms: (a) be issued in a Stated Amount which (i) is at least $50,000; (ii) does not exceed (or would not exceed) the then Letter of Credit Availability; (b) be stated to expire on a date (its "Stated Expiry Date") no later than the earlier of (i) one (1) year after its date of issuance, or (ii) the Stated Maturity Date; and (c) on or prior to its Stated Expiry Date (i) terminate immediately upon notice to the Issuer from the beneficiary thereunder that all obligations covered thereby have been terminated, paid, or otherwise satisfied in full, or (ii) reduce in part immediately and to the extent the beneficiary thereunder has notified the Issuer that the obligations covered thereby have been paid or otherwise satisfied in part. So long as no Default has occurred and is continuing, by delivery to the Administrative Agent and to the applicable Issuer of an Issuance Request at least five (5) but not more than ten (10) Business Days prior to the Stated Expiry Date of any Letter of Credit, the Borrower may request such Issuer to extend the Stated Expiry Date of such Letter of Credit for an additional period not to exceed the earlier of one (1) year from its date of extension, the Stated Maturity Date or the Commitment Termination Date. -43- 51 SECTION 4.2. ISSUANCES AND EXTENSIONS. On the terms and subject to the conditions of this Agreement (including Article VI), the applicable Issuer shall issue Letters of Credit, and extend the Stated Expiry Dates of outstanding Letters of Credit, in accordance with the Issuance Requests made therefor. Each Issuer will make available the original of each Letter of Credit which it issues in accordance with the Issuance Request therefor to the beneficiary thereof (and will promptly provide the Administrative Agent and each of the Lenders with a copy of such Letter of Credit) and will notify the beneficiary under any Letter of Credit of any extension of the Stated Expiry Date thereof. The Issuer is under no obligation to issue any Letter of Credit if: (a) any order, judgment or decree of any Government Agency or arbitrator shall by its terms purport to enjoin or restrain the Issuer from issuing such Letter of Credit, or any requirement of Applicable Law or any request or directive (whether or not having the force of law) from any Government Agency with jurisdiction over the Issuer shall prohibit, or request that the Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the Issuer is not otherwise compensated hereunder) not in effect on the Effective Date, or shall impose upon the Issuer any unreimbursed loss, cost or expense which was not applicable on the Effective Date and which the Issuer in good faith deems material to it; (b) one or more of the applicable conditions contained in Article VI is not then satisfied; (c) the expiry date of any requested Letter of Credit is prior to the maturity date of any financial obligation to be supported by the requested Letter of Credit; (d) any requested Letter of Credit does not provide for drafts, or is not otherwise in form and substance acceptable to the Issuer, or the issuance of a Letter of Credit shall violate any applicable policies of the Issuer; (e) any standby Letter of Credit is for the purpose of supporting the issuance of any letter of credit by any other Person; or (f) such Letter of Credit is in a face amount denominated in a currency other than Dollars. -44- 52 The International Standby Practices as published by the International Chamber of Commerce most recently at the time of issuance of any Letter of Credit shall (unless otherwise expressly provided in the Letters of Credit) apply to the Letters of Credit. SECTION 4.3. LENDERS' PARTICIPATION. Each Letter of Credit issued pursuant to Section 4.2 shall, effective upon its issuance and without further action, be issued on behalf of all Lenders (including the Issuer thereof, if it is a Lender) pro rata according to their respective Percentages. Each Lender shall, to the extent of its Percentage, be deemed irrevocably to have participated in the issuance of such Letter of Credit and shall be responsible to reimburse promptly the Issuer thereof for Reimbursement Obligations which have not been reimbursed by the Borrower in accordance with Section 4.5, or which have been reimbursed by the Borrower but must be returned, restored or disgorged by such Issuer for any reason, and each Lender shall, to the extent of its Percentage, be entitled to receive from the Administrative Agent a ratable portion of the Letter of Credit fees received by the Administrative Agent pursuant to Section 3.3.4, with respect to each Letter of Credit. In the event that the Borrower shall fail to reimburse any Issuer, or if for any reason Loans shall not be made to fund any Reimbursement Obligation, all as provided in Section 4.5 and in an amount equal to the amount of any drawing honored by such Issuer under a Letter of Credit issued by it, or in the event such Issuer must for any reason return or disgorge such reimbursement, such Issuer shall promptly notify each Lender of the unreimbursed amount of such drawing and of such Lender's respective participation therein. Each Lender shall make available to such Issuer, whether or not any Default shall have occurred and be continuing, an amount equal to its respective participation in same day or immediately available funds at the office of such Issuer specified in such notice not later than 11:00 a.m. (Dallas time) on the Business Day (under the laws of the jurisdiction of such Issuer) after the date notified by such Issuer. In the event that any Lender fails to make available to such Issuer the amount of such Lender's participation in such Letter of Credit as provided herein, such Issuer shall be entitled to recover such amount on demand from such Lender together with interest at the daily average Federal Funds Rate for three (3) Business Days (together with such other compensatory amounts as may be required to be paid by such Lender to the Administrative Agent pursuant to the Rules for Interbank Compensation of the Council on International Banking or the Clearinghouse Compensation Committee, as the case may be, as in effect from time to time) and thereafter at the Alternate Base Rate plus 3%. Nothing in this Section shall be deemed to prejudice the right of any Lender to recover from any Issuer any amounts made available by such Lender to such Issuer pursuant to this Section in the event that it is determined by a court of competent jurisdiction that the payment with respect to a Letter of Credit by such Issuer in respect of which payment was made by such Lender constituted gross negligence or wilful misconduct on the part of such Issuer. Each Issuer shall distribute to each other Lender which has paid all amounts payable by it under this Section with respect to any Letter of Credit issued by such Issuer such other Lender's Percentage of all payments -45- 53 received by such Issuer from the Borrower in reimbursement of drawings honored by such Issuer under such Letter of Credit when such payments are received. SECTION 4.4. DISBURSEMENTS. Each Issuer will notify the Borrower and the Administrative Agent promptly of the presentment for payment of any Letter of Credit, together with notice of the date (the "Disbursement Date") such payment shall be made. Subject to the terms and provisions of such Letter of Credit, the applicable Issuer shall make such payment to the beneficiary (or its designee) of such Letter of Credit. In paying any drawing under a Letter of Credit, the applicable Issuer shall not have any responsibility to obtain any document (other than any sight draft and certificates expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such document. Prior to 12:00 noon (Dallas time) on the Disbursement Date, the Borrower will reimburse the applicable Issuer for all amounts which have been disbursed under the Letter of Credit. To the extent the applicable Issuer is not reimbursed in full in accordance with the preceding sentence, the Borrower's Reimbursement Obligation shall accrue interest at a fluctuating rate determined by reference to the Alternate Base Rate, plus the Applicable Margin, plus a margin of 3% per annum, payable on demand. In the event the applicable Issuer is not reimbursed by the Borrower on the Disbursement Date, or if such Issuer must for any reason return or disgorge such reimbursement, the Lenders (including such Issuer) shall, on the terms and subject to the conditions of this Agreement, fund the Reimbursement Obligation therefor by making, on the next Business Day, Loans, which are Base Rate Loans, as provided in Section 2.1.1, bearing interest at the rate provided in Section 3.2.2 (the Borrower being deemed to have given a timely Borrowing Request therefor for such amount); provided, however, for the purpose of determining the availability of the Commitments to make Loans immediately prior to giving effect to the application of the proceeds of such Loans, such Reimbursement Obligation shall be deemed not to be outstanding at such time. SECTION 4.5. REIMBURSEMENT. The Borrower's obligation (a "Reimbursement Obligation") under Section 4.4 to reimburse the applicable Issuer with respect to each Disbursement (including interest thereon), and each Lender's obligation to make participation payments in each drawing which has not been reimbursed by the Borrower, shall be absolute and unconditional under any and all circumstances and irrespective of any setoff, counterclaim, or defense to payment which the Borrower may have or have had against such Issuer or any Lender or any beneficiary of a Letter of Credit, including any defense based upon the occurrence of any Default, any draft, demand or certificate or other document presented under a Letter of Credit proving to be forged, fraudulent, invalid or insufficient, the failure of any Disbursement to conform to the terms of the applicable Letter of Credit (if, in the applicable Issuer's good faith opinion, such Disbursement is determined to be appropriate) or any non-application or misapplication by the beneficiary of the proceeds of such -46- 54 Disbursement, or the legality, validity, form, regularity, or enforceability of such Letter of Credit; SECTION 4.6. DEEMED DISBURSEMENTS. Upon the occurrence of any Commitment Termination Date, an amount equal to that portion of Letter of Credit Outstandings attributable to outstanding and undrawn Letters of Credit shall, at the election of the applicable Issuer, acting on instructions from the Required Lenders, and without demand upon or notice to the Borrower, be deemed to have been paid or disbursed by such Issuer under such Letters of Credit (notwithstanding that such amount may not in fact have been so paid or disbursed), and, upon notification by such Issuer to the Administrative Agent and the Borrower of its obligations under this Section, the Borrower shall be immediately obligated to reimburse such Issuer the amount deemed to have been so paid or disbursed by such Issuer. Any amounts so received by such Issuer from the Borrower pursuant to this Section shall be held as collateral security for the repayment of the Borrower's obligations in connection with the Letters of Credit issued by such Issuer. At any time when such Letters of Credit shall terminate and all Obligations to such Issuer are either terminated or paid or reimbursed to such Issuer in full, the Obligations of the Borrower under this Section shall be reduced accordingly (subject, however, to reinstatement in the event any payment in respect of such Letters of Credit is recovered in any manner from such Issuer), and such Issuer will return to the Borrower the excess, if any, of (a) the aggregate amount deposited by the Borrower with such Issuer and not theretofore applied by such Issuer to any Reimbursement Obligation over (b) the aggregate amount of all Reimbursement Obligations to such Issuer pursuant to this Section, as so adjusted. At such time when all Events of Default shall have been cured or waived, such Issuer shall return to the Borrower all amounts then on deposit with such Issuer pursuant to this Section. All amounts on deposit pursuant to this Section shall, until their application to any Reimbursement Obligation or their return to the Borrower, as the case may be, bear interest at the daily average Federal Funds Rate from time to time in effect (net of the costs of any reserve requirements, in respect of amounts on deposit pursuant to this Section, pursuant to F.R.S. Board Regulation D), which interest shall be held by such Issuer as additional collateral security for the repayment of the Borrower's Obligations in connection with the Letters of Credit issued by such Issuer. SECTION 4.7. NATURE OF REIMBURSEMENT OBLIGATIONS. The Borrower shall assume all risks of the acts, omissions, or misuse of any Letter of Credit by the -47- 55 beneficiary thereof. Neither the Issuer nor any Lender (except to the extent of its own gross negligence or wilful misconduct) shall be responsible for: (a) the form, validity, sufficiency, accuracy, genuineness, or legal effect of any Letter of Credit or any document submitted by any party in connection with the application for and issuance of a Letter of Credit, even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent, or forged; (b) the form, validity, sufficiency, accuracy, genuineness, or legal effect of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof in whole or in part, which may prove to be invalid or ineffective for any reason; (c) failure of the beneficiary to comply fully with conditions required in order to demand payment under a Letter of Credit; (d) errors, omissions, interruptions, or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex, facsimile or otherwise; (e) any loss or delay in the transmission or otherwise of any document or draft required in order to make a Disbursement under a Letter of Credit or of the proceeds thereof; (f) any change in the time, manner or place of payment of, or in any other term of, all or any of the obligations of the Borrower in respect of any Letter of Credit; (g) the existence of any claim, set-off, defense or other right that the Borrower may have at any time against any beneficiary or any transferee of any Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), the applicable Issuer or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or by the Letters of Credit or any unrelated transaction; (h) any payment by the applicable Issuer under any Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of any Letter of Credit; or any payment made by the applicable Issuer under any Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of any Letter of Credit, including any arising in connection with any insolvency proceeding; or -48- 56 (i) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Borrower or a guarantor. None of the foregoing shall affect, impair, or prevent the vesting of any of the rights or powers granted any Issuer or any Lender hereunder. In furtherance and extension, and not in limitation or derogation, of any of the foregoing, any action taken or omitted to be taken by any Issuer or any Lender in good faith with respect to any Letter of Credit shall be binding upon the Borrower and shall not put such Issuer or such Lender under any resulting liability to the Borrower. SECTION 4.8. INCREASED COSTS; INDEMNITY. If by reason of (a) any change after the Effective Date in applicable law, regulation, rule, decree or regulatory requirement or any change in the interpretation or application by any judicial or regulatory authority of any law, regulation, rule, decree or regulatory requirement, or (b) compliance by any Issuer or any Lender with any direction, request or requirement (whether or not having the force of law) of any governmental or monetary authority, including Regulation D of the F.R.S. Board: (i) any Issuer or any Lender shall be subject to any tax (other than taxes on net income and franchises), levy, charge or withholding of any nature or to any variation thereof or to any penalty with respect to the maintenance or fulfillment of its obligations under this Article IV, whether directly or by such being imposed on or suffered by any Issuer or any Lender; (ii) any reserve, deposit or similar requirement is or shall be applicable, increased, imposed or modified in respect of any Letters of Credit issued by any Issuer or participations therein purchased by any Lender; or (iii) there shall be imposed on any Issuer or any Lender any other condition regarding this Article IV or any Letter of Credit or any participation therein, and the result of the foregoing is directly or indirectly to increase the cost to any Issuer or such Lender of issuing or maintaining any Letter of Credit or of purchasing or maintaining any participation therein, or to reduce any amount receivable in respect thereof by any Issuer, then and in any such case any such Issuer or any such Lender may, at any time after the additional cost is incurred or the amount received is -49- 57 reduced, notify the Administrative Agent and the Borrower thereof, and the Borrower shall, on demand, pay such amounts as any Issuer or such Lender may specify to be necessary to compensate any Issuer or such Lender for such additional cost or reduced receipt, together with interest at a rate equal to the Alternate Base Rate plus the Applicable Margin on such amount from the date demanded until the fifth Business Day after such demand and thereafter at a rate equal at all times to the Alternate Base Rate plus the Applicable Margin, plus 3% per annum until payment in full thereof. The determination by any such Issuer or any such Lender, as the case may be, of any amount due pursuant to this Section, as set forth in a statement setting forth the calculation thereof in reasonable detail, shall, in the absence of manifest error, be final and conclusive and binding on all of the parties hereto. In addition to amounts payable as elsewhere provided in this Article IV, the Borrower hereby indemnifies, exonerates and holds each Issuer, the Administrative Agent and each Lender harmless from and against any and all actions, causes of action, suits, losses, costs, liabilities and damages, and expenses incurred in connection therewith (irrespective of whether such Issuer, the Administrative Agent or such Lender is a party to the action for which indemnification is sought), including reasonable attorneys' fees and disbursements, which such Issuer, the Administrative Agent or such Lender may incur or be subject to as a consequence, direct or indirect, of (a) the issuance of the Letters of Credit, other than as a result of the gross negligence or wilful misconduct of such Issuer as determined by a court of competent jurisdiction, or (b) the failure of such Issuer to honor a drawing under any Letter of Credit as a result of any act or omission, whether rightful or wrongful, of any present or future de jure or de facto Government Agency. ARTICLE V CERTAIN INTEREST RATE AND OTHER PROVISIONS SECTION 5.1. LIBO RATE LENDING UNLAWFUL. If any Lender shall determine (which determination shall, upon notice thereof to the Borrower, the Administrative Agent and the other Lenders, be conclusive and binding on the Borrower) that the introduction of or any change in or in the interpretation by any governmental or other regulatory authority charged with the administration thereof of any law makes it unlawful, or any central bank or other governmental authority asserts that it is unlawful, for such Lender to make, continue or maintain any Loan as, or to convert any Loan into, a LIBO Rate Loan, the obligations of all Lenders to make, continue, maintain or convert into any such LIBO Rate Loans shall, upon such determination, -50- 58 forthwith be suspended until such Lender shall notify the Administrative Agent and the Borrower that the circumstances causing such suspension no longer exist, and all LIBO Rate Loans shall automatically convert into Base Rate Loans at the end of the then current Interest Periods with respect thereto or sooner, if required by such law or assertion; provided that if circumstances subsequently change so that such Lender shall not continue to be so affected, such Lender shall by notice to the Borrower reinstate such obligations to make, convert, maintain or continue loans as, or into, LIBO Rate Loans. SECTION 5.2. DEPOSITS UNAVAILABLE. If the Administrative Agent shall have determined that (a) Dollar deposits in the relevant amount and for the relevant Interest Period are not available to the Administrative Agent in its relevant market; or (b) by reason of circumstances affecting the Administrative Agent's relevant market, adequate means do not exist for ascertaining the interest rate applicable hereunder to LIBO Rate Loans, then, upon notice from the Administrative Agent to the Borrower and the Lenders, the obligations of all Lenders under Section 2.3 and Section 2.4 to make or continue any Loans as, or to convert any Loans into, LIBO Rate Loans shall forthwith be suspended until the Administrative Agent shall notify the Borrower and the Lenders that the circumstances causing such suspension no longer exist. SECTION 5.3. INCREASED LIBO RATE LOAN COSTS, ETC. If by reason of (a) after the Effective Date, any change in Applicable Law or any change in the interpretation or application by any judicial or regulatory authority of any Applicable Law, or (b) compliance by any Lender or any Issuer with any direction, request or requirement (whether or not having the force of law) of any Government Agency, including Regulation D of the F.R.S. Board: (i) any Lender or any Issuer shall be subject to any tax (other than taxes on net income and franchises), levy, charge or withholding of any nature or to any variation thereof or to any penalty with respect to any payment due under any LIBO Rate Loan or other amounts due under this Agreement, whether directly or by such being imposed on or suffered by such Lender or any Issuer; (ii) any reserve, deposit or similar requirement is or shall be applicable, increased, imposed or modified in respect of any extensions -51- 59 of credit or other assets of, or any deposits with or other liabilities of, any Lender or Loans made by such Lender or any Issuer or Letters of Credit issued by such Issuer, or against any other funds, obligations or other property owned or held by such Lender or such Issuer and such Lender or such Issuer actually incurs such additional costs; or (iii) there shall be imposed on any Lender or any Issuer any other condition affecting this Agreement (or any of such extensions of credit or liabilities), and the result of the foregoing is directly or indirectly to increase the cost to such Lender of making, continuing or such Issuer of issuing or maintaining (or of its obligation to make, continue or maintain) any Loans as, or of converting or such Issuer (or of its obligation to convert) any Loans into, LIBO Rate Loans, or of the Issuer issuing or maintaining any Letter of Credit or to reduce any amount receivable in respect thereof by such Lender or such Issuer, then and in any such case such Lender or such Issuer may, at any time after the additional cost is incurred or the amount received is reduced, notify the Administrative Agent and the Borrower thereof, and the Borrower shall pay on demand such amounts as such Lender or such Issuer may specify to be necessary to compensate such Lender or such Issuer for such additional cost or reduced receipt, together with interest at a rate equal to the Alternate Base Rate plus the Applicable Margin on such amount from the date demanded until the fifth Business Day after such demand and thereafter at a rate equal at all times to the Alternate Base Rate plus the Applicable Margin plus 3% per annum until payment in full thereof. The determination by such Lender or such Issuer of any amount due pursuant to this Section, as set forth in a statement setting forth the calculation thereof in reasonable detail, shall, in the absence of manifest error, be final and conclusive and binding on all of the parties hereto. SECTION 5.4. FUNDING LOSSES. In the event any Lender or any Issuer shall incur any loss or expense (including any loss or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender or such Issuer to make, continue or maintain any portion of the principal amount of any Loan as, or to convert any portion of the principal amount of any Loan into, a LIBO Rate Loan) as a result of (a) any conversion or repayment or prepayment of the principal amount of any LIBO Rate Loans on a date other than the scheduled last day of the Interest Period applicable thereto, whether pursuant to Section 3.1 or otherwise; (b) any Loans not being made as LIBO Rate Loans in accordance with the Borrowing Request therefor by reason of any act or omission by the Borrower or failure of a condition precedent to be satisfied; or -52- 60 (c) any Loans not being continued as, or converted into, LIBO Rate Loans in accordance with the Continuation/Conversion Notice therefor by reason of any act or omission by the Borrower, then, upon the written notice of such Lender or such Issuer to the Borrower (with a copy to the Administrative Agent), the Borrower shall pay directly to such Lender or such Issuer such amount as will (in the reasonable determination of such Lender or such Issuer) reimburse such Lender or such Issuer for such loss or expense, together with interest at a rate equal to the Alternate Base Rate plus the Applicable Margin on such amount from the date demanded until the fifth Business Day after such demand and thereafter at a rate equal at all times to the Alternate Base Rate plus the Applicable Margin plus 3% per annum until payment in full thereof. Such written notice (which shall include calculations in reasonable detail) shall, in the absence of manifest error, be conclusive and binding on the Borrower. SECTION 5.5. INCREASED CAPITAL COSTS. If, after the Effective Date, any change in, or the introduction, adoption, effectiveness, interpretation, reinterpretation or phase-in of, any Applicable Law of any Government Agency affects or would affect the amount of capital required or expected to be maintained by any Issuer or any Lender or any Person controlling such Issuer or such Lender, and such Issuer or such Lender determines (in its sole and absolute discretion) that the rate of return on its or such controlling Person's capital as a consequence of its Commitments, issuance of or participation in Letters of Credit issued by or the Loans made by such Issuer or such Lender is reduced to a level below that which such Issuer or such Lender or such controlling Person could have achieved but for the occurrence of any such circumstance, then, in any such case upon notice from time to time by such Issuer or such Lender to the Borrower and the Administrative Agent, the Borrower shall immediately pay directly to such Issuer or such Lender additional amounts sufficient to compensate such Issuer or such Lender or such controlling Person for such reduction in rate of return. A statement of such Issuer or such Lender as to any such additional amount or amounts (including calculations thereof in reasonable detail) shall, in the absence of manifest error, be conclusive and binding on the Borrower. In determining such amount, such Issuer or such Lender may use any method of averaging and attribution that it (in its reasonable discretion) shall deem applicable. SECTION 5.6. TAXES. (a) All payments by the Borrower of principal of, and interest on, the Loans or Letters of Credit and all other amounts payable hereunder shall be made free and clear of and without deduction for any present or future income, excise, stamp or franchise taxes and other taxes, fees, duties, withholdings or other charges of any nature whatsoever imposed by any taxing authority, but excluding franchise taxes and taxes imposed on or measured by any Lender's or any Issuer's net income, receipts, total assets, net worth or shareholders' capital (such non-excluded items being called -53- 61 "Taxes"). In the event that any withholding or deduction from any payment to be made by the Borrower hereunder is required in respect of any Taxes pursuant to any Applicable Law, then the Borrower will (i) pay directly to the relevant authority the full amount required to be so withheld or deducted; (ii) promptly forward to the Administrative Agent an official receipt or other documentation satisfactory to the Administrative Agent evidencing such payment to such authority; and (iii) pay to the Administrative Agent for the account of the Lenders or Issuers such additional amount or amounts as is necessary to ensure that the net amount actually received by each Lender or each Issuer will equal the full amount such Lender or such Issuer would have received had no such withholding or deduction been required. Moreover, if any Taxes are directly asserted against the Administrative Agent or any Lender or any Issuer with respect to any payment received by the Administrative Agent or such Lender or such Issuer hereunder, the Administrative Agent or such Lender or such Issuer may pay such Taxes and the Borrower will promptly pay such additional amounts (including any penalties, interest or expenses) as is necessary in order that the net amount received by such person after the payment of such Taxes (including any Taxes on such additional amount) shall equal the amount such person would have received had not such Taxes been asserted. (b) If the Borrower fails to pay any Taxes when due to the appropriate taxing authority or fails to remit to the Administrative Agent for the account of the Lenders the required receipts or other required documentary evidence, the Borrower shall indemnify the Lenders and Issuers for any incremental Taxes, interest, expenses or penalties that may become payable by any Lender or any Issuer as a result of any such failure, whether or not such Taxes or liabilities were correctly or legally asserted. Payment under this indemnity shall be made within thirty (30) days after the date the Administrative Agent makes written demand therefore. For purposes of this Section 5.6, a distribution hereunder by the Administrative Agent or any Lender or any Issuer to or for the account of any Lender or any Issuer shall be deemed a payment by the Borrower. (c) Notwithstanding the foregoing provisions of this section, the Borrower shall be entitled, to the extent it is required to do so by law, to deduct or withhold (and not to make any indemnification or reimbursement for) income or other similar taxes imposed by the United States of America (other than any portion thereof attributable to a change in federal income tax laws effected after the Effective Date) from interest, fees or other amounts payable hereunder for the account of any Lender, -54- 62 other than a Lender (i) who is a U.S. person for Federal income tax purposes or (ii) who has the Prescribed Forms (defined below) on file with Administrative Agent (with copies provided to the Borrower) for the applicable year to the extent deduction or withholding of such taxes is not required as a result of such Prescribed Forms, provided that if the Borrower shall so deduct or withhold any such taxes, it shall provide a statement to the Administrative Agent and such Lender, setting forth the amount of such taxes so deducted or withheld, the applicable rate and any other information or documentation which such Lender may reasonably request for assisting such Lender to obtain any allowable credits or deductions for the taxes so deducted or withheld in the jurisdiction or jurisdictions in which such Lender is subject to tax. As used in this section, "Prescribed Forms" means such duly executed forms or statements, and in such number of copies, which may, from time to time, be prescribed by law and which, pursuant to applicable provisions of (x) an income tax treaty between the United States and the country of residence of the Lender providing the forms or statements, (y) the Code, or (z) any applicable rules or regulations thereunder, permit the Borrower to make payments hereunder for the account of such Lender free of such deduction or withholding of income or similar taxes. SECTION 5.7. PAYMENTS, COMPUTATIONS, ETC. Unless otherwise expressly provided, all payments by the Borrower pursuant to this Agreement, the Note or any other Loan Document shall be made by the Borrower to the Administrative Agent for the pro rata account of the Lenders or Issuers entitled to receive such payment. All such payments shall be made without setoff, deduction or counterclaim, not later than 11:00 a.m. (Dallas time) on the date due, in same day or immediately available funds, to such account with the Administrative Agent in Dallas, Texas as the Administrative Agent shall specify from time to time by notice to the Borrower. Funds received after that time shall be deemed to have been received by the Administrative Agent on the next succeeding Business Day and any applicable interest or fee shall continue to accrue. The Administrative Agent shall promptly remit in same day funds to each Lender or each Issuer its share, if any, of such payments received by the Administrative Agent for the account of such Lender or such Issuer. All interest and fees shall be computed on the basis of the actual number of days (including the first day but excluding the last day) occurring during the period for which such interest or fees is payable over a year comprised of 360 days (or, in the case of interest on a Base Rate Loan (other than when calculated with respect to the Federal Funds Rate), 365 days or, if appropriate, 366 days). Whenever any payment to be made shall otherwise be due on a day which is not a Business Day, such payment shall (except as otherwise required by clause (c) of the definition of the term "Interest Period" with respect to LIBO Rate Loans) be made on the next succeeding Business Day and such extension of time shall be included in computing interest and fees, if any, in connection with such payment. SECTION 5.8. SHARING OF PAYMENTS. If any Lender or Issuer shall obtain any payment or other recovery (whether voluntary, involuntary, by application of setoff or -55- 63 otherwise) on account of any Loan (other than pursuant to the terms of Sections 5.3, 5.4 and 5.5) or Letter of Credit (other than pursuant to Section 4.8) in excess of its pro rata share of payments then or therewith obtained by all Lenders, such Lender shall purchase from the other Lenders or Issuers such participations in Loans made by them and/or Letters of Credit as shall be necessary to cause such purchasing Lender to share the excess payment or other recovery ratably with each of them; provided, however, that if all or any portion of the excess payment or other recovery is thereafter recovered from such purchasing Lender or Issuer, the purchase shall be rescinded and each Lender or each Issuer which has sold a participation to the purchasing Lender or Issuer shall repay to the purchasing Lender or Issuer, the purchase price to the ratable extent of such recovery together with an amount equal to such selling Lender's or such Issuer's ratable share (according to the proportion of (a) the amount of such selling Lender's or such Issuer's required repayment to the purchasing Lender or Issuer to (b) the total amount so recovered from the purchasing Lender or Issuer) of any interest or other amount paid by the purchasing Lender or Issuer in respect of the total amount so recovered. The Borrower agrees that any Lender or any Issuer so purchasing a participation from another Lender or any Issuer pursuant to this Section may, to the fullest extent permitted by law, exercise all its rights of payment (including pursuant to Section 5.9) with respect to such participation as fully as if such Lender or such Issuer were the direct creditor of the Borrower in the amount of such participation. If under any applicable bankruptcy, insolvency or other similar law, any Lender or any Issuer receives a secured claim in lieu of a setoff to which this Section applies, such Lender or such Issuer shall, to the extent practicable, exercise its rights in respect of such secured claim in a manner consistent with the rights of the Lenders or Issuers entitled under this Section to share in the benefits of any recovery on such secured claim. SECTION 5.9. SETOFF. Each Lender and each Issuer shall, upon the occurrence of any Default described in clauses (a) through (d) of Section 9.1.9 or, with the consent of the Required Lenders, upon the occurrence of any other Event of Default, have the right to appropriate and apply to the payment of the Obligations owing to it (whether or not then due), and (as security for such Obligations) the Borrower hereby grants to the Administrative Agent, each Lender and each Issuer a continuing security interest in, any and all balances, credits, deposits, accounts or moneys of the Borrower then or thereafter maintained with or otherwise held by the Administrative Agent, each Lender and each Issuer, including without limitation, the Proceeds Account. The Administrative Agent, each Lender and each Issuer agree promptly to -56- 64 notify the Borrower after any such setoff and application made by the Administrative Agent or such Lender or such Issuer; provided, however, that the failure to give such notice shall not affect the validity of such setoff and application. The rights of the Administrative Agent, each Lender and each Issuer under this Section 5.9 are in addition to other rights and remedies (including other rights of setoff under Applicable Law or otherwise) which the Administrative Agent or such Lender or such Issuer may have. SECTION 5.10. USE OF PROCEEDS. The Borrower shall apply the proceeds of each Borrowing only in accordance with Section 2.8; without limiting the foregoing, no proceeds of any Loan will be used to acquire any equity security of a class which is registered pursuant to Section 12 of the Securities Exchange Act of 1934 or any "margin stock", as defined in F.R.S. Board Regulation U, X or T; provided, however, the Borrower may own, and may use proceeds of the Loans to acquire, "margin stock" (as such term is defined in F.R.S. Board Regulation U, X or T) so long as the amount paid for such margin stock does not exceed the lesser of (i) five percent (5%) of the Borrowing Base at the time of such acquisition, and (ii) twenty-five percent (25%) (or such lesser percentage as may be required by then Applicable Law) of the value of the Borrower's assets. SECTION 5.11. CHANGE OF LENDER. (a) Each Lender agrees that, upon the occurrence of any event giving rise to the operation of Sections 4.8, 5.1, 5.3, 5.5 or 5.6 with respect to such Lender, it will, if requested by the Borrower, use reasonable efforts (subject to overall policy considerations of such Lender) to designate another lending office for its Loan (provided that such designation is made on such terms that such Lender and its lending office suffer no economic, legal or regulatory disadvantage) with the object of avoiding the consequence of the event giving rise to the operation of any such section. Nothing in this subsection shall affect or postpone any of the obligations of the Borrower or the right of any Lender provided in Sections 4.8, 5.1, 5.3, 5.5 and 5.6. (b) If any Lender elects to pass through to the Borrower any charge or cost under Sections 4.8, 5.3, 5.5 or 5.6, and no Default exists, the Borrower may elect to terminate such Lender as a party to this Agreement; provided that, prior to or concurrently with such termination, the Borrower must either (i) if the Administrative Agent and each non-terminated Lender consent, pay to the terminated Lender all principal, interest, fees, costs and other Obligations owed to such Lender and accrued through the date of termination (including reimbursement of any funding losses of the type described in Section 5.4 that are incurred because of such termination) and terminate such Lender's Commitment, or (ii) arrange for one or more Eligible Assignees to purchase the rights and duties of the terminated Lender pursuant to Section 11.11.1, in -57- 65 which event the terminated Lender will assign all of such rights and duties to such Eligible Assignees. Prior to arranging for any Person other than an existing Lender to be such an Eligible Assignee, the Borrower shall notify the other Lenders of its intention to replace the terminated Lender and, during the sixty day period after such notice, the other Lenders shall have a right of first refusal to purchase the rights and duties of the terminated Lender, pro rata in accordance with their respective Percentages. ARTICLE VI CONDITIONS PRECEDENT SECTION 6.1. INITIAL CREDIT EXTENSION. The obligation of each Lender and each Issuer to make the initial Credit Extension shall be subject to the prior or concurrent satisfaction of each of the conditions precedent set forth in this Section 6.1. SECTION 6.1.1. RESOLUTIONS, ETC. The Administrative Agent shall have received from the Borrower a certificate, dated the date of the initial Credit Extension, of the respective Secretary or Assistant Secretary of each of the Borrower, Future California and the Partners, for themselves and on behalf of the Partnership Subsidiaries, as to (a) resolutions of the respective Boards of Directors of the Borrower, Future California and the Partners then in full force and effect authorizing the execution, delivery and performance of this Agreement, the Notes and each other Loan Document to be executed by each of them; (b) the incumbency and signatures of those of its officers authorized to act with respect to this Agreement, the Notes and each other Loan Document executed by each of them; (c) the Organic Documents of the Borrower, Future California, the Partners and the Partnership Subsidiaries; and (d) evidence that each of the Borrower, Future California, the Partners and the Partnership Subsidiaries is in good standing under the laws of the jurisdiction of its respective organization and, as to the Future California and the Partnership Subsidiaries, each of the jurisdictions where the Mortgaged Properties are located, -58- 66 upon which certificate the Administrative Agent, the Lenders and the Issuers may conclusively rely until the Administrative Agent shall have received a further certificate of the Secretary of the Borrower canceling or amending such prior certificate. SECTION 6.1.2. DELIVERY OF NOTES. The Administrative Agent shall have received, for the account of each Lender, its Note duly executed and delivered by the Borrower. SECTION 6.1.3. GUARANTIES. The Administrative Agent shall have received executed counterparts of the Guaranties, or ratifications or amendments and restatements of Guaranties previously delivered under the Existing Credit Agreement, dated as of the date hereof, duly executed by each of the Material Subsidiaries. SECTION 6.1.4. PLEDGE AGREEMENTS. The Administrative Agent shall have received executed counterparts of the Pledge Agreements, or ratifications or amendments and restatements of Pledge Agreements previously delivered under the Existing Credit Agreement, dated as of the date hereof, duly executed by (a) the Borrower pledging 100% of the Capital Stock of each of the Partners and Future California, (b) each of the Partners, pledging all of its respective partnership interests in each of the Partnership Subsidiaries, and (c) the Borrower and any of its Subsidiaries, as applicable, pledging 65% of the Capital Stock or partnership interests of each of the foreign Material Subsidiaries of the Borrower or its Subsidiaries, together with the certificates, evidencing all of the issued and outstanding shares of Capital Stock or partnership interests pledged pursuant to the Pledge Agreements, which certificates shall in each case be accompanied by undated stock powers duly executed in blank, or, if any securities pledged pursuant to the Pledge Agreements are uncertificated securities, confirmation and evidence satisfactory to the Administrative Agent that the security interest in such uncertificated securities has been transferred to and perfected by the Administrative Agent for the benefit of the Lenders in accordance with Article 8 and/or Article 9 of the Uniform Commercial Code, as in effect in the State of Texas, and, as applicable, with evidence of completion (or satisfactory arrangement for the completion) of all filings and recordings of the Pledge Agreements as may be necessary, or in the reasonable opinion of the Administrative Agent, desirable, effectively to create a valid, perfected first priority lien against and security interest in the collateral covered thereby. SECTION 6.1.5. SECURITY AGREEMENT. The Administrative Agent shall have received executed counterparts of the Security Agreement, or ratifications or amendments and restatements of Security Agreements previously delivered under the Existing Credit Agreement, dated as of the date hereof, duly executed by the Borrower and its Material Subsidiaries, together with (a) executed copies of Uniform Commercial Code financing statements or amendments to existing financing statements (Forms UCC-1 or UCC-2), in -59- 67 proper form for filing, naming the Borrower as the debtor and the Administrative Agent as the secured party, or other similar instruments or documents, filed under the Uniform Commercial Code of all jurisdictions as may be necessary or, in the opinion of the Administrative Agent, desirable to perfect the security interest of the Administrative Agent pursuant to the Security Agreement; (b) executed copies of proper Uniform Commercial Code Form UCC-3 termination statements, if any, necessary to release all Liens and other rights of any Person in any collateral described in the Security Agreement previously granted by any Person together with such other Uniform Commercial Code Form UCC-3 termination statements as the Administrative Agent may reasonably request from the Borrower; and (c) a Uniform Commercial Code Request for Information or Copies (UCC Form 11) or similar search report certified by a party acceptable to the Administrative Agent, dated a date reasonably near to the date of the initial borrowing, listing all effective financing statements which name the Borrower, its Subsidiaries and each other Obligor (under their present names and any previous names) as the debtor and which are filed in the jurisdictions in which filings were made pursuant to clause (a) above, together with copies of such financing statements (none of which shall cover any collateral described in the Security Agreement), other than financing statements in favor of Bank of America and financing statements previously delivered to Bank of America. SECTION 6.1.6. AMENDMENT TO EXISTING MORTGAGES. The Administrative Agent shall have received counterparts of amendments or amendments and restatements of the Existing Mortgages, adding the Obligations to the obligations secured by the Existing Mortgages, dated as of a recent date, duly executed by the Borrower and its Material Subsidiaries, as applicable. SECTION 6.1.7. OPINIONS OF COUNSEL. The Administrative Agent shall have received opinions, dated the date of the initial Credit Extension and addressed to the Administrative Agent, the Issuer and all the Lenders, from (a) Haynes and Boone, LLP, counsel to the Borrower and its Subsidiaries, substantially in the form of Exhibit H hereto; and (b) Title counsel listed on Schedule VI hereto, as to the Mortgaged Properties listed on Schedule VI hereto, substantially in the form of Exhibit I-1 hereto. SECTION 6.1.8. UCC SEARCHES. The Administrative Agent shall have received certified copies of Uniform Commercial Code Request for Information or Copies (UCC Form 11) or similar search reports certified by a party acceptable to the Administrative -60- 68 Agent, dated a date reasonably near to the date of the initial Credit Extension, listing all effective financing statements which name the Borrower, its Subsidiaries and each other Obligor (under their present names and any previous names) as the debtor and which are filed in the jurisdictions in the States of California, Texas, Oklahoma, New Mexico and Louisiana in which the Existing Mortgages were filed and the New Mortgages will be filed, together with copies of such financing statements (none of which shall cover any collateral described in the Existing Mortgages or the New Mortgages) other than financing statements in favor of Bank of America and financing statements previously delivered to Bank of America and approved. SECTION 6.1.9. EVIDENCE OF INSURANCE. The Administrative Agent shall have received certificates of insurance satisfactory to it evidencing the existence of all insurance required to be maintained by the Borrower by this Agreement and the other Loan Documents. SECTION 6.1.10. ENGINEERING REPORT. The Administrative Agent shall have received an Engineering Report, dated as of January 1, 1999, from T.J. Smith & Company, as to the Mortgaged Properties included in the initial determination of the Borrowing Base. SECTION 6.1.11. ENVIRONMENTAL REPORT AND QUESTIONNAIRE. The Administrative Agent shall have received copies of existing Phase I environmental assessments in the Borrower's possession with respect to the Mortgaged Properties and completed and current environmental disclosure questionnaires and such other information with respect to the ownership and past use of the Mortgaged Properties included in the initial determination of the Borrowing Base as the Administrative Agent and the Lenders may reasonably request, and such reports and questionnaire shall be satisfactory in form, substance and scope to the Administrative Agent and the Lenders. SECTION 6.1.12. BUDGET. The Administrative Agent shall have received a budget for the Borrower for the following twelve (12) month period, in form, scope and detail reasonably satisfactory to the Administrative Agent and the Required Lenders. SECTION 6.1.13. FINANCIAL STATEMENTS. The Administrative Agent shall have received a consolidated balance sheet, income and cash flow statements and statement of stockholders' equity of the Borrower and its consolidated Subsidiaries for the years 1997 and 1998, audited by PriceWaterhouseCoopers LLP and prepared in accordance with GAAP. SECTION 6.1.14. CONSENTS, ETC. The Administrative Agent shall have received certified copies of all documents evidencing any necessary Consents and Mortgage -61- 69 Consents in connection with this Agreement, all in form and substance reasonably satisfactory to the Administrative Agent. SECTION 6.1.15. SHAREHOLDER ACKNOWLEDGMENT. The Administrative Agent shall have received duly executed counterparts of an acknowledgment and consent, in form and substance satisfactory to the Administrative Agent, from the Borrower and each Initial Holder to the effect that each of them acknowledges and agrees that (a) the Restricted Payment Test under this Agreement requires that, prior to making any Distribution Payment with respect to the Series B Preferred, the Borrower must obtain the consent of all of the Lenders, and (b) notwithstanding the terms of any agreement between such Initial Holder and the Borrower, without the prior written consent of all of the Lenders, no redemption of any of the Series B Preferred shall be requested, required or exercised so long as any of the Obligations remain unpaid or unperformed. SECTION 6.1.16. COMPLIANCE WITH REPRESENTATIONS AND WARRANTIES. The Administrative Agent shall have received a certificate from an Authorized Officer of the Borrower stating that all representations and warranties contained in Article VII are true and correct in all material respects as of the Effective Date. SECTION 6.1.17. AMENDED SECURITY DOCUMENTS, ETC. The Administrative Agent shall have received all documents, instruments and agreements amending, supplementing or modifying the mortgages, security agreements, pledge agreements, guaranties and other loan documents previously given under the Existing Credit Agreement to provide that such documents, instruments and agreements secure the Obligations, in each case pursuant to instruments in form and substance satisfactory to the Administrative Agent and its counsel. SECTION 6.1.18. CLOSING FEES, EXPENSES, ETC. The Administrative Agent shall have received, for its own account, or for the account of each Lender, as the case may be, all reasonable fees, costs and expenses due and payable pursuant to Sections 3.3 and 11.3, if then invoiced. SECTION 6.1.19. OTHER DOCUMENTS. The Administrative Agent and each Lender shall have received such other instruments and documents as it may reasonably request. SECTION 6.2. INCLUSION OF HYDROCARBON INTERESTS IN THE BORROWING BASE. The inclusion of any additional Hydrocarbon Interests in the Borrowing Base is subject to the following conditions having been satisfied and receipt by the Administrative Agent and the Required Lenders of the following documents, in each case with respect to each Hydrocarbon Interests and related Oil and Gas Properties which the Borrower requests be included in the Borrowing Base, each of which conditions and documents shall be satisfactory to the Administrative Agent and the Required Lenders in form and substance. -62- 70 SECTION 6.2.1. ENVIRONMENTAL REPORT AND QUESTIONNAIRE. The Administrative Agent shall have received Phase I environmental assessments as of a recent date prepared by an environmental consulting firm as shall be acceptable to the Administrative Agent, a completed environmental disclosure questionnaire and such other information with respect to the ownership and past use of the Mortgaged Properties relating to such Hydrocarbon Interests as the Administrative Agent and the Lenders may reasonably request, and such reports and questionnaire shall be satisfactory in form, substance and scope to the Administrative Agent and the Required Lenders. SECTION 6.2.2. MORTGAGE. The Administrative Agent shall have received counterparts of a Mortgage relating to such Hydrocarbon Interests and related Oil and Gas Properties, dated as of a recent date, duly executed by the Borrower and/or its Subsidiaries, as applicable, together with (a) evidence of the completion (or satisfactory arrangements for the completion) of all recordings and filings of the Mortgage as may be necessary or, in the reasonable opinion of the Administrative Agent, desirable effectively to create a valid, perfected first priority Lien against the Properties purported to be covered thereby; (b) favorable mortgagee's title opinions in favor of the Administrative Agent (in form and substance and issued by title counsel satisfactory to the Administrative Agent, substantially in the form of Exhibit I-2 hereto), with respect to the Property purporting to be covered by the Mortgage setting forth the working interest and net revenue interest of the Borrower or its Subsidiary in such Properties and opining that the Borrower's or such Subsidiary's title to such property is good and marketable and valid and that the interests created by the Mortgage constitute valid first Liens thereon free and clear of all defects and encumbrances other than encumbrances permitted by Section 8.2.3 or otherwise as approved by the Administrative Agent; and (c) such other approvals, opinions, or documents as the Administrative Agent may reasonably request. SECTION 6.2.3. UCC SEARCHES. The Administrative Agent shall have received Uniform Commercial Code Requests for Information or Copies (UCC Form 11) or similar search reports certified by a party acceptable to the Administrative Agent, dated as of a recent date, listing all effective financing statements which name each Obligor (under its present name and any previous names) pledging such additional Hydrocarbon Interests as the debtor and which are filed in the jurisdictions in which a Mortgage is to be filed, together with copies of such financing -63- 71 statements (none of which shall cover any collateral described in any such Mortgage) other than financing statements in favor of Administrative Agent and financing statements previously delivered to Administrative Agent and approved. SECTION 6.2.4. EVIDENCE OF INSURANCE. The Administrative Agent shall have received certificates of insurance satisfactory to it evidencing the existence of all insurance required to be maintained by the Borrower by this Agreement and the other Loan Documents with respect to the Hydrocarbon Interests and related Oil and Gas Properties being added to the Borrowing Base. SECTION 6.2.5. ENGINEERING REPORTS. The Administrative Agent and the Lenders shall have received an Engineering Report, dated as of a recent date from a petroleum engineer acceptable to the Administrative Agent, as to the Hydrocarbon Interests being added to the Borrowing Base. SECTION 6.2.6. MATERIAL CONTRACTS; SECURITY AGREEMENT. The Administrative Agent shall have received true and correct copies, certified by the Borrower, and approved the form and substance of, each Material Contract related to the Hydrocarbon Interests being added to the Borrowing Base. Further, if requested, the Administrative Agent shall have received duly executed counterparts of a Security Agreement, or, if applicable, amendments to an existing Security Agreement, providing that such Material Contracts shall be collateral for the Obligations (and if requested, such Material Contracts shall by their terms be assignable to the Administrative Agent as collateral for the Obligations) and all required Consents and Mortgage Consents. SECTION 6.2.7. GUARANTIES. The Administrative Agent shall have received duly executed counterparts of a Guaranty from any Material Subsidiary of the Borrower which is adding Hydrocarbon Interests to the Borrowing Base, unless such a Guaranty has already been obtained in connection with a previous addition to the Borrowing Base. SECTION 6.2.8. PLEDGE AGREEMENT. The Administrative Agent shall have received duly executed counterparts of a Pledge Agreement from the Borrower or any of its Subsidiaries pledging the Capital Stock or partnership interests of each Material Subsidiary that is acquiring or owns Hydrocarbon Interests being added to the Borrowing Base, unless such a Pledge Agreement has already been obtained, accompanied by the original share certificate evidencing such Capital Stock or partnership interests and executed stock powers (in blank) and the evidence of satisfactory arrangement for the completion of all filings and recordings of the Pledge Agreement as may be necessary or, in the reasonable opinion of the Lender, desirable, effectively to create a valid, perfected first priority lien against and security interest in the collateral covered thereby. -64- 72 SECTION 6.2.9. OTHER DOCUMENTS. The Administrative Agent shall have received such other instruments and documents as it may reasonably request, including pursuant to Section 8.1.7. SECTION 6.3. ALL CREDIT EXTENSIONS. The obligation of each Lender to make any Credit Extension (including the initial Credit Extension) shall be subject to the satisfaction of each of the conditions precedent set forth in this Section 6.3. SECTION 6.3.1. COMPLIANCE WITH WARRANTIES, NO DEFAULT, ETC. Both before and after giving effect to any Credit Extension (but, if any Default of the nature referred to in Section 9.1.5 shall have occurred with respect to any other Indebtedness, without giving effect to the application, directly or indirectly, of the proceeds of any Borrowing) the following statements shall be true and correct (a) the representations and warranties set forth in Article VII (excluding, however, those contained in Section 7.9) shall be true and correct in all material respects with the same effect as if then made (unless stated to relate solely to an earlier date, in which case such representations and warranties shall be true and correct as of such earlier date); (b) except as disclosed by the Borrower to the Administrative Agent and the Lenders pursuant to Section 7.9 (i) no labor controversy, litigation, arbitration or governmental investigation or proceeding shall be pending or, to the knowledge of the Borrower, threatened against the Borrower or any of its Subsidiaries which has or might reasonably be expected to have a Material Adverse Effect; and (ii) no development shall have occurred in any labor controversy, litigation, arbitration or governmental investigation or proceeding disclosed pursuant to Section 7.9 which has or might reasonably be expected to have a Material Adverse Effect; and (c) no Default shall have then occurred and be continuing, and neither the Borrower nor any other Obligor shall be in material violation of any Applicable Law or court order or decree if such violation has or might reasonably be expected to have a Material Adverse Effect. SECTION 6.3.2. CREDIT REQUEST. The Administrative Agent shall have received a Borrowing Request or Issuance Request, as the case may be, for such Credit Extension. Each of the delivery of a Borrowing Request or an Issuance Request and the acceptance by the Borrower of the proceeds of the Borrowing or the issuance of the Letter of Credit as applicable, shall constitute a representation and warranty by -65- 73 the Borrower that on the date of such Borrowing (both immediately before and after giving effect to such Borrowing and the application of the proceeds thereof) or the issuance of the Letter of Credit, as applicable, the statements made in Section 6.3.1 are true and correct. SECTION 6.3.3. SATISFACTORY LEGAL FORM. All documents executed or submitted pursuant hereto by or on behalf of the Borrower or any of its Subsidiaries shall be reasonably satisfactory in form and substance to the Administrative Agent and its counsel; the Administrative Agent and its counsel shall have received all information, approvals, opinions, documents or instruments as the Administrative Agent or its counsel may reasonably request. ARTICLE VII REPRESENTATIONS AND WARRANTIES In order to induce the Administrative Agent, each Issuer and each Lender to enter into this Agreement and to make Loans and to issue Letters of Credit hereunder, the Borrower represents and warrants unto the Administrative Agent, each Issuer and each Lender as set forth in this Article VII. SECTION 7.1. ORGANIZATION, ETC. The Borrower is a Texas corporation and each of its Subsidiaries is a corporation or limited partnership, validly organized and existing and in good standing under the laws of the jurisdiction of its organization, is duly qualified to do business and is in good standing as a foreign corporation or limited partnership, as the case may be, in each jurisdiction where the nature of its business requires such qualification, and has full power and authority and holds all requisite Approvals to enter into and perform its Obligations under this Agreement, the Notes and each other Loan Document to which it is a party and to own and hold under lease its Property and to conduct its business substantially as currently conducted by it (other than where failure to be so qualified or in good standing or failure to hold such licenses, permits and other approvals would not reasonably be expected to have a Material Adverse Effect). On the Effective Date, the Principal Shareholders own, on a fully diluted basis, not less than 63% of the issued and outstanding shares of the Capital Stock of the Borrower. The Initial Holders own all of the Series B Preferred. Other than the Series B Preferred, no holder of any of the Capital Stock of the Borrower is entitled to receive any Distribution Payment as a matter of right, and all Distribution Payments to all shareholders of the Borrower (other than the holders of Series B Preferred) may be made or not at the discretion of the Borrower. The Borrower is the sole shareholder of Future California and each of the Partners. The Partners are the sole partners of the Partnership Subsidiaries. On the Effective Date, the Borrower has no Subsidiaries other than those listed in Schedule II. -66- 74 SECTION 7.2. DUE AUTHORIZATION, NON-CONTRAVENTION, ETC. The execution, delivery and performance by the Borrower and each other Obligor of this Agreement, the Notes and each other Loan Document executed or to be executed by it are within the Borrower's and each such Obligor's corporate (or partnership or other, as the case may be) powers, have been duly authorized by all necessary corporate (or partnership or other, as the case may be) action, and do not (a) contravene the Borrower's or such Obligor's Organic Documents; (b) contravene or result in any violation of or default under any Applicable Law or any contractual restriction, court decree or order, in each case binding on or affecting the Borrower or any other Obligor or any of their respective Properties, businesses, assets or revenues, including the Certificate of Designations of Cumulative Redeemable Preferred Stock, Series B issued by the Borrower, the Shareholders' Agreement or the Stock Purchase Agreement; or (c) result in, or require the creation or imposition of, any Lien on (except for the Liens of the Loan Documents) any of the Borrower's or any other Obligor's respective Properties, businesses, assets or revenues. SECTION 7.3. GOVERNMENT APPROVAL, REGULATION, ETC. No authorization or approval or other action by, and no notice to or filing with, any Government Agency or other Person is required for the due execution, delivery or performance by the Borrower or any other Obligor of this Agreement, the Notes or any other Loan Document to which it is a party. SECTION 7.4. INVESTMENT COMPANY ACT. Neither the Borrower nor any of its Subsidiaries is an "investment company" within the meaning of the Investment Company Act of 1940, as amended. SECTION 7.5. PUBLIC UTILITY HOLDING COMPANY ACT. Neither the Borrower nor any of its Subsidiaries is a "holding company" or a "subsidiary company" of a "holding company", or an "affiliate" of a "holding company" or of a "subsidiary company" of a "holding company", within the meaning of the Public Utility Holding Company Act of 1935, as amended. SECTION 7.6. VALIDITY, ETC. This Agreement constitutes, and the Notes and each other Loan Document executed by the Borrower or any of its Subsidiaries will, on the due execution and delivery thereof, constitute, the legal, valid and binding obligations of the Borrower or such Subsidiaries, as applicable, enforceable in accordance with their respective terms, and each Loan Document executed pursuant hereto by each other Obligor will, on the due execution and delivery thereof by such Obligor, be the legal, valid and binding obligation of such Obligor enforceable in -67- 75 accordance with its terms, in each case subject to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' rights generally. SECTION 7.7. FINANCIAL INFORMATION. Each of (i) the audited consolidated balance sheet of the Borrower and each of its consolidated Subsidiaries as at December 31, 1998, and the related consolidated audited statements of operations and cash flow of the Borrower and such Subsidiaries, and (ii) the unaudited consolidated balance sheet of the Borrower and each of its consolidated Subsidiaries as at June 30, 1999, and the related consolidated unaudited statements of operations and cash flow of the Borrower and such Subsidiaries, copies of which have been furnished to the Administrative Agent and each Lender, have been prepared in accordance with GAAP consistently applied, and present fairly the consolidated financial condition of the partnerships and corporations covered thereby as at the date thereof and the results of their audited operations for the period then ended. SECTION 7.8. NO MATERIAL ADVERSE CHANGE. Since the date of the audited financial statements described in Section 7.7, there has been no change in the financial condition, operations, assets, business, Properties or prospects of the Borrower or its Subsidiaries that has or might reasonably be expected to have a Material Adverse Effect. As at June 30, 1999, the Tangible Net Worth of the Borrower and its consolidated Subsidiaries was not less than $52,440,614. SECTION 7.9. LITIGATION, LABOR CONTROVERSIES, ETC. There is no pending or, to the knowledge of the Borrower, threatened litigation, action, proceeding, or labor controversy affecting the Borrower or any of its Subsidiaries, or any of their respective Properties, businesses, assets or revenues, which has or might reasonably be expected to have a Material Adverse Effect, except as disclosed in Item 7.9 ("Litigation") of the Disclosure Schedule. SECTION 7.10. OWNERSHIP OF PROPERTIES. The Borrower and each of its Subsidiaries has good and marketable title to its Properties (including, without limitation, all Hydrocarbon Interests), free and clear of all Liens except (a) those referred to in the financial statements referred to in Section 7.7, (b) as disclosed to the Lenders in the Disclosure Schedule or (c) as permitted by Section 8.2.3. After giving full effect to all Liens permitted under Section 8.2.3, the Borrower and its Subsidiaries own the net interests in Hydrocarbons produced from the Oil and Gas Properties as reflected in the most recent Engineering Report, and neither the Borrower nor any of its Subsidiaries is obligated to bear costs or expenses in respect of the Oil and Gas Properties in excess of its working interest percentage as reflected in the most recent Engineering Report. The Administrative Agent has received currently effective, duly executed Mortgages and other Loan Documents encumbering Oil and Gas Properties constituting at least 90% of the amount of Proven Reserves to which value is given in the determination of the current Borrowing Base. -68- 76 SECTION 7.11. TAXES. The Borrower and each of its Subsidiaries has filed all tax returns and reports required by Applicable Law to have been filed by it and has paid all taxes and governmental charges thereby shown to be owing, except any such taxes or charges which are being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books. SECTION 7.12. PENSION AND WELFARE PLANS. During the twelve-consecutive-month period prior to the Effective Date and prior to the date of any Borrowing hereunder, no steps have been taken to terminate any Pension Plan, and no contribution failure has occurred with respect to any Pension Plan sufficient to give rise to a Lien under section 302(f) of ERISA. No condition exists or event or transaction has occurred with respect to any Pension Plan which might result in the incurrence by the Borrower or any member of the Controlled Group of any material liability, fine or penalty. Except as disclosed in Item 7.12 ("Employee Benefit Plans") of the Disclosure Schedule, neither the Borrower nor any member of the Controlled Group has any contingent liability with respect to any post-retirement benefit under a Welfare Plan, other than liability for continuation coverage described in Part 6 of Title I of ERISA. SECTION 7.13. COMPLIANCE WITH LAW. Neither the Borrower nor any of its Subsidiaries (a) is in violation of any Applicable Law of, or the terms of any Approval issued by, any Government Agency; or (b) has failed to obtain any Approval necessary to ownership of any of their respective Properties or the conduct of their respective business (including without limitation any such authorization from the Federal Energy Regulatory Commission, the Minerals Management Service or any state conservation commission or similar body); which violation or failure could reasonably be expected to have a Material Adverse Effect. SECTION 7.14. CLAIMS AND LIABILITIES. Except as disclosed to the Lenders in Item 7.14 ("Claims and Liabilities") of the Disclosure Schedule, neither the Borrower nor any of its Subsidiaries has accrued any liabilities under gas purchase contracts for gas not taken, but for which it is liable to pay if not made up and which, if not paid, would have a Material Adverse Effect. Except as disclosed to the Lenders in Item 7.14 of the Disclosure Schedule, no claims exist against the Borrower or any of its Subsidiaries for gas imbalances which claims if adversely determined would have a Material Adverse Effect. No purchaser of product supplied by the Borrower or any of its Subsidiaries has any claim against the Borrower or any of its Subsidiaries for product paid for, but for which delivery was not taken as and when paid for, which claim if adversely determined would have a Material Adverse Effect. SECTION 7.15. NO PROHIBITION ON PERFECTION OF SECURITY DOCUMENTS. None of the terms or provisions of any indenture, mortgage, deed of trust, agreement or other instrument to which the Borrower or any of its Subsidiaries is a party or by which the -69- 77 Borrower or any of its Subsidiaries or the property of the Borrower or any of its Subsidiaries is bound prohibit the filing or recordation of any of the Loan Documents or any other action which is necessary or appropriate in connection with the perfection of the Liens evidenced and created by any of the Loan Documents. SECTION 7.16. SOLVENCY. Neither the Borrower nor any of its Subsidiaries is "insolvent", as such term is used and defined in the United States Bankruptcy Code, 11 U.S.C. Section 101, et seq. SECTION 7.17. ENVIRONMENTAL WARRANTIES. As a reasonable and prudent operator of oil and gas producing properties, in the ordinary course of its business, the Borrower has conducted, with respect to its existing Oil and Gas Properties, and, on an ongoing basis, conducts a review of the effect of Environmental Laws on business, operations and properties of the Borrower and its Subsidiaries, in the course of which it identifies and evaluates associated liabilities and costs (including any capital or operating expenditures required for Remedial Action or other clean-up or closure of Properties presently owned or operated, any capital or operating expenditures required for Remedial Action or otherwise to achieve or maintain compliance with environmental protection standards imposed by Environmental Law or as a condition of any Approval or contract, any related constraints on operating activities, including any periodic or permanent shutdown of any facility or reduction in the level of or change in the nature of operations conducted thereat and any actual or potential liabilities to third parties, including employees, and any related costs and expenses). On the basis of this review, the Borrower has reasonably concluded that, except as disclosed in Item 7.17 ("Environmental Matters") of the Disclosure Schedule, to the best of its knowledge after due inquiry: (a) all facilities and Property (including underlying groundwater) owned, leased or operated by the Borrower or any of its Subsidiaries have been, and continue to be, owned, leased or operated by the Borrower and its Subsidiaries in material compliance with all Environmental Laws; (b) there have been no past, and there are no pending or threatened (i) claims, complaints, notices or inquiries to, or requests for information received by, the Borrower or any of its Subsidiaries with respect to any alleged violation of any Environmental Law, that, singly or in the aggregate, have or may reasonably be expected to have a Material Adverse Effect, or (ii) claims, complaints, notices or inquiries to, or requests for information received by, the Borrower or any of its Subsidiaries regarding potential liability under any Environmental Law or under any common law theories relating to operations or the condition of any facilities or -70- 78 Property (including underlying groundwater) owned, leased or operated by the Borrower or any of its Subsidiaries that, singly or in the aggregate, have, or may reasonably be expected to have a Material Adverse Effect; (c) there have been no Releases of Hazardous Materials at, on or under any Property now or previously owned or leased by the Borrower or any of its Subsidiaries that, singly or in the aggregate, have, or may reasonably be expected to have, a Material Adverse Effect; (d) each of the Borrower or any of its Subsidiaries has been issued and is in compliance with all Approvals relating to environmental matters and necessary or desirable for its business (other than where failure to so obtain or be in compliance with such Approvals and other Approvals would not reasonably be expected to result in a Material Adverse Effect); (e) no Property now or previously owned, leased or operated by the Borrower or any of its Subsidiaries is listed or proposed for listing on the National Priorities List pursuant to CERCLA, or, to the extent that such listing may, singly or in the aggregate, have, or may reasonably be expected to have a Material Adverse Effect, on the CERCLIS or on any other federal or state list of sites requiring investigation or clean-up; (f) there are no underground storage tanks, active or abandoned, including petroleum storage tanks, on or under any Property now or previously owned, leased or operated by the Borrower or any of its Subsidiaries that, singly or in the aggregate, have, or may reasonably be expected to have, a Material Adverse Effect; (g) neither the Borrower nor any Subsidiary of the Borrower has directly transported or directly arranged for the transportation of any Hazardous Material to any location which is listed or proposed for listing on the National Priorities List pursuant to CERCLA, or, to the extent that such listing may, singly or in the aggregate, have, or may reasonably be expected to have a Material Adverse Effect, on the CERCLIS or on any federal or state list or which is the subject of federal, state or local enforcement actions or other investigations which may lead to material claims against the Borrower or such Subsidiary for any remedial work, damage to natural resources or personal injury, including claims under CERCLA; (h) there are no polychlorinated biphenyls, radioactive materials or friable asbestos present at any Property now or previously owned or leased by the Borrower or any of its Subsidiaries that, singly or in the aggregate, have, or may reasonably be expected to have, a Material Adverse Effect; and -71- 79 (i) no condition exists at, on or under any property now or previously owned or leased by the Borrower or any of its Subsidiaries which, with the passage of time, or the giving of notice or both, would give rise to material liability under any Environmental Law that, singly or in the aggregate have, or may reasonably be expected to have a Material Adverse Effect. SECTION 7.18. REGULATIONS T, U AND X. Neither the Borrower nor any of its Subsidiaries is engaged in the business of extending credit for the purpose of purchasing or carrying margin stock, and no proceeds of any Loans will be used for a purpose which violates, or would be inconsistent with, F.R.S. Board Regulation T, U or X, so long as the amount paid for such margin stock does not exceed the lesser of (i) five-percent (5%) of the Borrowing Base at the time of such acquisition, and (ii) twenty-five percent (25%) (or such lesser percentage as may be required by then Applicable Law) of the value of the Borrower's assets. Terms for which meanings are provided in F.R.S. Board Regulation T, U or X or any regulations substituted therefor, as from time to time in effect, are used in this Section with such meanings. SECTION 7.19. INSURANCE. The Borrower and its Subsidiaries have the benefit of the insurance coverage described in the certificates of insurance delivered pursuant to Section 6.1.9 and required to be maintained pursuant to Section 8.1.4. SECTION 7.20. YEAR 2000 COMPLIANCE. (a) The Borrower has (i) initiated a review and assessment of all areas within its and each of its Subsidiaries' business and operations (including those affected by suppliers and vendors) that could be adversely affected by the "Year 2000 Problem" (that is, the risk that computer applications (as well as imbedded microchips) used by the Borrower or any of its Subsidiaries (or its suppliers and vendors) may be unable to recognize and perform properly date-sensitive functions involving certain dates prior to and any date after December 31, 1999), (ii) developed a plan and time line for addressing the Year 2000 Problem on a timely basis, and (iii) to date, implemented that plan in accordance with that timetable. (b) The Borrower reasonably believes that all computer applications (including those of its and its Subsidiaries' suppliers and vendors) that are material to its or any of its Subsidiaries' business and operations will on a timely basis be able to perform properly date-sensitive functions for all dates before and after January 1, 2000 (that is, be "Year 2000 Compliant"), except to the extent that a failure to do so could not reasonably be expected to have Material Adverse Effect. SECTION 7.21. ACCURACY OF INFORMATION. All factual information heretofore or contemporaneously furnished by or on behalf of the Borrower or any of its Subsidiaries in writing to the Administrative Agent, the Issuers or the Lenders for purposes of or -72- 80 in connection with this Agreement or any transaction contemplated hereby (including without limitation each Engineering Report) is, and all other such factual information hereafter furnished by or on behalf of the Borrower to the Administrative Agent, the Issuers or the Lenders will be, true and accurate in every material respect on the date as of which such information is dated or certified and as of the date of execution and delivery of this Agreement by the Lenders, and such information is not, or shall not be, as the case may be, incomplete by omitting to state any material fact necessary to make such information not misleading. It is understood and agreed, however, that (i) each Engineering Report is necessarily based upon economic assumptions and professional opinions, estimates, and projections, (ii) any financial projection which the Borrower or any of the Borrower's representatives has provided or may provide in connection with the transactions contemplated hereby (the "Projections") are similarly based on economic assumptions, opinions and estimates, (iii) the Borrower makes no representation or warranty that such assumptions, opinions, estimates and projections will ultimately prove to have been accurate, (iv) the Borrower makes no representation or warranty with respect to any price or cost projections furnished by the Administrative Agent or any Lender for use in preparing any Engineering Report, and (v) no representation or warranty is made with respect to the extent or value of any Hydrocarbon Interests to which no Proven Reserves are attributed, so long as such Hydrocarbon Interests are not shown in or covered by any Engineering Report as constituting Proven Reserves; provided that, notwithstanding the foregoing limitations concerning Projections, the Borrower represents and warrants, with respect to all Projections that have been or will be provided by the Borrower or any of its representatives or Subsidiaries, that such Projections have been or will be, as the case may be, prepared in good faith based upon assumptions that Borrower's management believed or believes, as the case may be, to be reasonable at the time such Projections were or are prepared and that the factual information furnished by the Borrower or any of its Subsidiaries to the engineers and others who prepared such Projections was true and correct in all material respects. ARTICLE VIII COVENANTS SECTION 8.1. AFFIRMATIVE COVENANTS. The Borrower agrees with the Administrative Agent, each Lender and each Issuer that, until all Commitments have terminated and all Obligations have been paid and performed in full, the Borrower will perform the obligations set forth in this Section 8.1. SECTION 8.1.1. FINANCIAL INFORMATION, REPORTS, NOTICES, ETC. The Borrower will furnish, or will cause to be furnished, to the Administrative Agent and each Lender copies of the following financial statements, reports, notices and information: -73- 81 (a) as soon as available and in any event within forty-five (45) days after the end of each of the first three Fiscal Quarters of each Fiscal Year of the Borrower, consolidated and consolidating balance sheets of the Borrower and its consolidated Subsidiaries as of the end of such Fiscal Quarter and consolidated and consolidating statements of operations and cash flow of the Borrower and its consolidated Subsidiaries for such Fiscal Quarter and for the period commencing at the end of the previous Fiscal Year and ending with the end of such Fiscal Quarter, certified by the chief financial Authorized Officer of the Borrower; (b) as soon as available and in any event within ninety (90) days after the end of each Fiscal Year of the Borrower, a copy of the annual audit report for such Fiscal Year for the Borrower and its consolidated Subsidiaries, including therein the consolidated balance sheets of the Borrower as of the end of such Fiscal Year and statements of operations and cash flow of the Borrower and its consolidated Subsidiaries for such Fiscal Year, in each case certified (without any Impermissible Qualification) in a manner reasonably acceptable to the Administrative Agent by PriceWaterhouseCoopers L.L.P. or an independent public accountant acceptable to the Administrative Agent and the Required Lenders, together with a report from such accountants containing a computation of, and showing compliance with, each of the financial ratios and restrictions contained in Section 8.2.4 and to the effect that, in making the examination necessary for the signing of such annual report by such accountants, they have not become aware of any Default that has occurred and is continuing or, if they have become aware of such Default, describing such Default and the steps, if any, being taken to cure it; (c) concurrently with the delivery of the financial statements referred to in clauses (a) and (b), a certificate, executed by the chief financial Authorized Officer of the Borrower, showing (in reasonable detail and with appropriate calculations and computations in all respects reasonably satisfactory to the Administrative Agent) compliance with the financial covenants set forth in Section 8.2.4 and also certifying, to such Authorized Officer's best knowledge, that no Default has occurred and is then outstanding; (d) on or prior to December 31st of each calendar year, annual financial budget for the Borrower and its Subsidiaries for the following calendar year, in form, scope and detail reasonably satisfactory to the Administrative Agent and the Required Lenders; (e) upon request of the Administrative Agent, on or prior to December 31st of each calendar year, a capital budget for the Borrower and its Subsidiaries for the following calendar year, in form, scope and detail reasonably satisfactory to the Administrative Agent and the Required Lenders; -74- 82 (f) as soon as possible and in any event within three (3) Business Days after the Borrower knows (or, in the exercise of reasonable diligence, should have known) of the occurrence of each Default and any event which has or is reasonably likely to have a Material Adverse Effect, a statement of the chief financial Authorized Officer of the Borrower setting forth details of such Default or event and the action which the Borrower has taken and proposes to take with respect thereto; (g) as soon as possible and in any event within three (3) Business Days after (x) the occurrence of any adverse development with respect to any litigation, action, proceeding or labor controversy described in Section 7.9 or (y) the commencement of any litigation, action, proceeding or labor controversy of the type described in Section 7.9, notice thereof and copies of all documentation relating thereto; (h) as soon as possible and in any event within ten (10) days after any responsible officer of the Borrower has actual knowledge thereof, notice of (i) any claim by any Person against the Borrower or any of its Subsidiaries of nonpayment of, or (ii) any attempt by any Person to collect upon or enforce any accounts payable of the Borrower or any of its Subsidiaries, in the case of any single account payable in excess of $250,000, or in the case of all accounts payable in the aggregate in excess of $500,000; (i) upon, but in no event later than ten (10) days after, any responsible officer of the Borrower or any of its Subsidiaries becomes aware of (i) any and all enforcement, cleanup, removal or other governmental or regulatory actions instituted, completed or threatened or other environmental claims against the Borrower or any Subsidiary or any of its Properties pursuant to any applicable Environmental Laws which could have a Material Adverse Effect, and (ii) any environmental or similar condition on any real property adjoining or in the vicinity of the property of the Borrower or any Subsidiary that could reasonably be anticipated to cause such property or any part thereof to be subject to any restrictions on the ownership, occupancy, transferability or use of such property under any Environmental Laws; (j) as soon as available and in any event within sixty (60) days after January 1st of each calendar year, an Engineering Report from an independent petroleum engineering firm acceptable to the Administrative Agent, and as soon as available and in any event within sixty (60) days after July 1st of each calendar year, an Engineering Report prepared by a reserve engineer employed by the Borrower, unless the Administrative Agent, at least sixty (60) days -75- 83 before the required delivery date of such Engineering Report, has requested that it be prepared by an independent petroleum engineering firm reasonably acceptable to the Administrative Agent; (k) promptly after (i) the sending or filing thereof, copies of all periodic and other reports distributed by the Borrower to its shareholders generally, (ii) the sending or filing thereof, all reports and registration statements which the Borrower or any of its Subsidiaries files with the Securities and Exchange Commission or any national securities exchange, (iii) the filing thereof, copies of all tariff and rate cases and other material reports filed with any regulatory authority, and (iv) receipt thereof, copies of all notices received from any regulatory authority concerning noncompliance by the Borrower or any of its Subsidiaries with any applicable regulations; (l) immediately upon becoming aware of the institution of any steps by the Borrower or any other Person to terminate any Pension Plan, or the failure to make a required contribution to any Pension Plan if such failure is sufficient to give rise to a Lien under section 302(f) of ERISA, or the taking of any action with respect to a Pension Plan which could result in the requirement that the Borrower furnish a bond (other than customary fidelity bonds under section 412 of ERISA) or other security to the PBGC or such Pension Plan, or the occurrence of any event with respect to any Pension Plan which could result in the incurrence by the Borrower of any material liability, fine or penalty, or any material increase in the contingent liability of the Borrower with respect to any post-retirement Welfare Plan benefit, notice thereof and copies of all documentation relating thereto; (m) promptly after the Borrower discovers or determines that any computer application (including those of its suppliers or vendors) that is material to the businesses or operations of the Borrower and its Subsidiaries taken as a whole will not be Year 2000 Compliant on a timely basis, notice thereof and a copy of the Borrower's plan for dealing with such problem, except to the extent such failure could not reasonably be expected to have a Material Adverse Effect; and (n) such other information respecting the condition or operations, financial or otherwise, of the Borrower or any of its Subsidiaries as any Lender through the Administrative Agent may from time to time reasonably request. SECTION 8.1.2. COMPLIANCE WITH LAWS, ETC. The Borrower will, and will cause each of its Subsidiaries to, comply in all respects with all Applicable Laws, (except where the failure to so comply would not reasonably be expected to result in a Material Adverse Effect), such compliance to include (without limitation): -76- 84 (a) the maintenance and preservation of its existence, and qualification as a foreign entity, other than the failure to maintain, preserve or qualify a non-Material Subsidiary which would not reasonably be expected to have a Material Adverse Effect; provided that nothing in this Section shall prohibit mergers permitted under Section 8.2.8, or the termination of the existence of a Subsidiary (other than a Material Subsidiary) if the Borrower in good faith determines that such termination is in the best interest of the Borrower; and (b) the payment, before the same become delinquent, of all taxes, assessments and governmental charges imposed upon it or upon its property except to the extent being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books. SECTION 8.1.3. MAINTENANCE AND DEVELOPMENT OF PROPERTIES. The Borrower will, and will cause each of its Subsidiaries to, maintain, preserve, protect and keep its Properties in good repair, working order and condition (ordinary wear and tear excepted), and make necessary and proper repairs, renewals and replacements so that its business carried on in connection therewith may be properly conducted at all times in accordance with standard industry practices. In particular, the Borrower will, and will cause each of its Subsidiaries to, operate or cause to be operated its Oil and Gas Properties as a reasonable and prudent operator. The Borrower shall use its reasonable best efforts to develop and bring into production in a prudent and businesslike manner all proved developed non-producing reserves that the Required Lenders have considered in their determination of the Borrowing Base. SECTION 8.1.4. INSURANCE. The Borrower will, and will cause each of its Subsidiaries to, maintain or cause to be maintained with responsible insurance companies insurance with respect to its properties and business against such casualties and contingencies and of such types and in such amounts as is customary in the case of similar businesses (including, where appropriate, well control, operator's extra expense and remediation insurance) and will furnish to the Administrative Agent, on or before December 31st each year, and, at the Administrative Agent's request, at other reasonable intervals, a certificate of an Authorized Officer of the Borrower setting forth the nature and extent of all insurance maintained by the Borrower and its Subsidiaries in accordance with this Section. The following shall apply to the insurance required by this Section 8.1.4: (a) Each policy for property insurance covering the Mortgaged Property shall show the Administrative Agent as loss payee; (b) Each policy for liability insurance covering the Mortgaged Property shall show the Administrative Agent, the Lenders and the Issuers as additional insured; -77- 85 (c) Each insurance policy covering the Mortgaged Property shall provide that at least thirty (30) days prior written notice of cancellation, reduction in amount or other change in coverage, or of lapse shall be given to the Administrative Agent by the insurer; and (d) The Borrower shall, if so requested by the Administrative Agent, deliver to the Administrative Agent the original or a certified copy of each insurance policy covering the Mortgaged Property. SECTION 8.1.5. BOOKS AND RECORDS. The Borrower will, and will cause each of its Subsidiaries to, keep books and records which accurately reflect all of its material business affairs and transactions and permit the Administrative Agent, each Issuer and each Lender or any of their respective representatives, at reasonable times and intervals, to visit all of its offices, to discuss its financial matters with its officers and, upon forty-eight (48) hours prior notice to the Borrower, with the Borrower's independent public accountant (and the Borrower hereby authorizes such independent public accountant to discuss the Borrower's and its Subsidiaries' financial matters with the Administrative Agent, the Issuers and the Lenders or their representatives whether or not any representative of the Borrower is present) and to examine (and, at the expense of the Borrower, photocopy extracts from) any of its books or other corporate records. The Borrower shall pay any reasonable fees of such independent public accountant incurred in connection with the Administrative Agent's or any Issuer's or any Lender's exercise of their rights pursuant to this Section. Furthermore, the Borrower will permit the Administrative Agent, or its agents, at the cost and expense of the Borrower, to enter upon the Oil and Gas Properties and all parts thereof, for the purpose of investigating and inspecting the condition and operation thereof, and shall permit reasonable access to the field offices and other offices, including the principal place of business, of the Borrower to inspect and examine the Oil and Gas Properties. SECTION 8.1.6. ENVIRONMENTAL COVENANT. The Borrower will, and will cause each of its Subsidiaries to, (a) use, operate and maintain all of its facilities and Properties in material compliance with all Environmental Laws, keep all necessary Approvals relating to environmental matters in effect and remain in material compliance therewith, and handle all Hazardous Materials in material compliance with all applicable Environmental Laws; (b) (i) immediately notify the Administrative Agent and provide copies upon receipt of all written claims, complaints, notices or inquiries relating to the condition of its facilities and Properties or compliance with Environmental Laws, (ii) use all reasonable efforts to have dismissed with prejudice any actions or proceedings relating to compliance with Environmental Laws which would reasonably be expected to have a Material Adverse Effect, and (iii) diligently -78- 86 pursue cure of any material underlying environmental problem which forms the basis of any such claim, complaint, notice or inquiry; and (c) provide such information and certifications which the Administrative Agent may reasonably request from time to time to evidence compliance with this Section 8.1.6. SECTION 8.1.7. FURTHER ASSURANCES. (a) The Borrower shall, and shall cause each of its Subsidiaries, upon the request of the Administrative Agent, to take such actions and to execute and deliver such documents and instruments as the Administrative Agent shall require to ensure that the Administrative Agent shall, at all times, have received currently effective, duly executed Loan Documents encumbering Oil and Gas Properties of the Borrower or any of its Subsidiaries not then subject to a Mortgage constituting 90% of the Proven Reserves to which value has been given in the then current Borrowing Base and satisfactory title evidence in form and substance reasonably acceptable to the Administrative Agent, in its reasonable business judgment, as to ownership of such Oil and Gas Properties; provided that, upon thirty (30) days notice to the Borrower, the Administrative Agent may require, and the Borrower and/or its Subsidiaries, as applicable, shall execute, acknowledge and deliver to the Administrative Agent, Mortgages effectively encumbering 100% of the Oil and Gas Properties of the Borrower and its Subsidiaries to which value is given in the determination of the then current Borrowing Base. (b) If the Administrative Agent shall determine that, as of the date of any Borrowing Base Redetermination, the Borrower shall have failed to comply with the preceding Subsection (a), the Administrative Agent may (and, at the direction of the Required Lenders, shall) notify the Borrower in writing of such failure and, within thirty (30) days from and after receipt of such written notice by the Borrower, the Borrower and its Subsidiaries, as applicable, shall execute and deliver to the Administrative Agent supplemental or additional Loan Documents, in form and substance satisfactory to the Administrative Agent and its counsel, securing payment of the Notes and the other Obligations and covering additional assets not then encumbered by any Loan Documents (together with current valuations, Engineering Reports, and title evidence applicable to the additional assets collaterally assigned, each of which shall be in form and substance satisfactory to the Administrative Agent) such that the Administrative Agent shall have received currently effective duly executed Loan Documents encumbering Oil and Gas Properties constituting at least 90% (or, as provided in Section 8.1.7(a), 100%) of the amount of Proven Reserves to which value is given in the determination of the then current Borrowing Base and satisfactory title evidence in form and substance acceptable to the -79- 87 Administrative Agent in its reasonable business judgment as to ownership of such Oil and Gas Properties and the valid first Liens in favor of the Administrative Agent. (c) Promptly upon the determination that any Subsidiary has become a Material Subsidiary, the Borrower will cause such Material Subsidiary to execute and deliver to the Administrative Agent a Guaranty and a Security Agreement and (if such Subsidiary has Oil and Gas Properties included in the Borrowing Base) a Mortgage, and the Borrower will enter into such amendments to the Pledge Agreement as are necessary to cause the stock or partnership interests, as the case may be, of such Material Subsidiary to become subject to the Pledge Agreement. (d) The Borrower shall ensure that all written information, exhibits, certificates and reports furnished by or on behalf of the Borrower to the Administrative Agent do not and will not contain any untrue statement of material fact and do not and will not omit to state any material fact or any fact necessary to make the statements contained therein not misleading in light of the circumstances in which made, and will promptly disclose to the Administrative Agent and correct any defect or error that may be discovered therein or in any Loan Document or in the execution, acknowledgment or recordation thereof. SECTION 8.1.8. YEAR 2000 COMPLIANCE. The Borrower will promptly notify the Administrative Agent in the event the Borrower discovers or determines that any computer application (including those of its suppliers and vendors) that is material to its or any of its Subsidiaries' business and operations will not be Year 2000 Compliant on a timely basis, except to the extent that such failure could not reasonably be expected to have a Material Adverse Effect. SECTION 8.2. NEGATIVE COVENANTS. The Borrower agrees with the Administrative Agent, each Lender and the Issuer that, until all Commitments have terminated and all Obligations have been paid and performed in full, the Borrower will perform the obligations set forth in this Section 8.2. SECTION 8.2.1. BUSINESS ACTIVITIES. The Borrower will not, and will not permit any of its Subsidiaries to, engage in any business activity, except those described in the first recital and such activities as may be incidental or related thereto. SECTION 8.2.2. INDEBTEDNESS. The Borrower will not, and will not permit any of its Subsidiaries to, create, incur, assume or suffer to exist or otherwise become or be liable in respect of any Indebtedness, other than, without duplication, the following: (a) Indebtedness in respect of the Loans and other Obligations; -80- 88 (b) Indebtedness in an aggregate principal amount not to exceed (i) $500,000 at any time outstanding which is incurred by the Borrower or any of its Subsidiaries to a vendor of any assets not prohibited from being acquired by Section 8.2.8 to finance its acquisition of such assets and (ii) $250,000 at any one time outstanding by the Borrower or any of its Subsidiaries which is secured by Liens described in Section 8.2.3(j); (c) unsecured Indebtedness incurred in the ordinary course of business (including (i) open accounts extended by suppliers on normal trade terms in connection with purchases of goods and services and (ii) gas balancing, but excluding Indebtedness incurred through the borrowing of money or Contingent Liabilities); (d) Hedging Obligations incurred pursuant to Hedging Agreements approved by the Administrative Agent pursuant to Section 8.2.15; (e) Contingent Obligations incurred to satisfy bonding requirements imposed by any Government Agency not to exceed, in the aggregate, $500,000, excluding any Letters of Credit; (f) Indebtedness existing as of the Effective Date which is identified in Item 8.2.2(f) of the Disclosure Schedule and refinancings thereof; provided that the principal amount thereof is not increased beyond the amount outstanding thereunder on the Effective Date; (g) Indebtedness in respect of Capitalized Lease Obligations in an amount not to exceed $500,000 at any time outstanding; (h) Indebtedness owed by the Borrower to any of the Subsidiaries or by any Material Subsidiary of the Borrower to the Borrower or any Material Subsidiary; (i) endorsements of negotiable instruments for collection in the ordinary course of business; (j) Indebtedness of the Borrower and its Subsidiaries which are Investments to the extent permitted by Section 8.2.5(b); (k) Additional Indebtedness not permitted by clauses (a) through (j) above, provided, however, that the aggregate amount of all Indebtedness incurred by the Borrower and its Subsidiaries pursuant to this clause (k) shall not exceed $500,000 at any one time outstanding; and -81- 89 (l) Renewals, extensions, amendments, refinancing, rearrangements, modifications, restatements, defeasances, purchases or supplements of any Indebtedness referred to in Subsection 8.2.2(a) through (k), provided that any such Indebtedness is not increased beyond the amount thereof outstanding on the Effective Date or on the date of incurrence of such Indebtedness in accordance with this Section; provided, however, that no Indebtedness otherwise permitted by clause (b) shall be permitted if, after giving effect to the incurrence thereof, any Default shall have occurred and be continuing. SECTION 8.2.3. LIENS. The Borrower will not, and will not permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon any of its property, revenues or assets, whether now owned or hereafter acquired, except: (a) Liens securing payment of the Obligations, granted pursuant to any Loan Document; (b) Liens granted to secure payment of Indebtedness of the type permitted and described in clause (b) of Section 8.2.2 and covering only those assets acquired with the proceeds of such Indebtedness; (c) Hydrocarbon production sales contracts entered into by the Borrower or its Subsidiaries in the ordinary course of business; (d) Liens for taxes, assessments or other governmental charges or levies not at the time delinquent or thereafter payable without penalty or being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books; (e) statutory Liens of landlords and Liens of carriers, warehousemen, mechanics, suppliers, materialmen, repairmen and other Liens imposed by law incurred in the ordinary course of business for claims which are either not delinquent or are being contested in good faith by appropriate proceedings and as to which the Borrower or its applicable Subsidiary shall have set aside on its books such reserves as may be required pursuant to GAAP; provided, that at no time shall such sums which are being contested exceed in the aggregate $100,000; (f) Liens incurred in the ordinary course of business in connection with workmen's compensation, unemployment insurance or other forms of governmental insurance or benefits, or to secure performance of tenders, statutory obligations, leases and contracts (other than for borrowed money) -82- 90 entered into in the ordinary course of business or to secure obligations on surety or appeal bonds, including lessee or operator obligations under statutes, governmental regulations or instruments related to the ownership, exploration and production of oil, gas and minerals on private, state, federal or foreign lands or waters; (g) covenants, restrictions, easements, servitudes, permits, conditions, exceptions, reservations, minor rights, minor encumbrances, minor irregularities in title or conventional rights of reassignment prior to abandonment which do not materially interfere with the occupation, use and enjoyment by the Borrower or any of its Subsidiaries of their respective assets in the ordinary course of business as presently conducted, or materially impair the value thereof for the purpose of such business; (h) judgment Liens in existence less than thirty (30) days after the entry thereof or with respect to which execution has been stayed or the payment of which is covered in full (subject to a customary deductible) by insurance maintained with responsible insurance companies; (i) Liens granted prior to the Effective Date to secure payment of Indebtedness described in clause (f) of Section 8.2.2; provided that such Lien does not extend to any other Property; (j) any Lien, excluding any Lien to secure Indebtedness for Debt, existing on any asset of any Person that is not included in the Borrowing Base at the time such Person becomes a Subsidiary of the Borrower or is merged or consolidated with or into the Borrower or a Subsidiary of the Borrower, or as of the acquisition of such asset, provided that such Lien does not extend to any other Property and was not created in contemplation of such event; (k) Liens on cash and Cash Equivalent Investments securing Hedging Obligations, provided that the aggregate amount of cash and Cash Equivalent Investments subject to such Liens may at no time exceed $250,000; (l) Liens which (1) do not secure Debt, (2) arise by statute or in the ordinary course of business under operating agreements, joint venture agreements, oil and gas partnership agreements, oil and gas leases, farm-out agreements, division orders, contracts for the sale, transportation or exchange of oil and natural gas, unitization and pooling declarations and agreements, area of mutual interest agreements, overriding royalty agreements, marketing agreements, processing agreements, net profits agreements, Production Payments, development agreements, production sales contracts, gas balancing or deferred production agreements, injection, repressuring and recycling agreements, salt water or other disposal agreements, seismic or other -83- 91 geophysical permits or agreements, and other agreements which are, in the Administrative Agent's reasonable judgment, customary in the oil and gas business, and (3) are for claims which are either not delinquent or are being contested in good faith by appropriate proceedings and as to which the Borrower or its applicable Subsidiaries shall have set aside on its books such reserves as may be required pursuant to GAAP; (m) Liens arising solely by virtue of any statutory or common law provision relating to banker's liens, rights of set-off or similar rights and remedies and burdening only deposit accounts or other funds maintained with a creditor depository institution; provided that (i) no such deposit account is a dedicated cash collateral account or is subject to restrictions against access by the depositor in excess of those set forth by regulations promulgated by the Board of Governors of the Federal Reserve System, and (ii) no such deposit account is intended by Borrower or any of its Subsidiaries to provide collateral to the depository institution; (n) any Lien arising out of the refinancing, extension, renewal or refunding of any Indebtedness secured by any Lien permitted by any of the foregoing clauses of this Section, provided that any such Indebtedness is not increased beyond the amount thereof outstanding on the Effective Date or on the date of incurrence of such Lien in accordance with this Section and is not secured by any additional assets; (o) the statutory Lien to secure payment of the proceeds of Hydrocarbon production established by Texas Bus. & Com. Code Section 9.319 and similar laws of other jurisdictions; (p) rights reserved to or vested in any Government Agency by the terms of any right, power, franchise, grant, license, or permit, or by any provision of law, to terminate such right, power, franchise, grant, license, or permit or to purchase, condemn, expropriate, or recapture or to designate a purchaser of any of the Properties of the Borrower or its Subsidiaries; (q) rights of a common owner of any interest in real estate, rights of way, or easements held by the Borrower or its Subsidiary and such common owner as tenant in common or through other common ownership; (r) Liens not otherwise permitted by the foregoing clauses of this Section 8.2.3 securing Indebtedness in an aggregate principal or face amount not at any time exceeding $500,000; and -84- 92 (s) Liens on the Arco East Texas Property, to the extent the Company's Subsidiary owning such Property is indemnified against any loss arising therefrom pursuant to the Arco Title Indemnity. SECTION 8.2.4. FINANCIAL CONDITION. The Borrower will not permit: (a) Tangible Net Worth at any time to be less than the sum of (i) $44,574,521 plus (ii) fifty percent (50%) of consolidated net income of the Borrower and its Subsidiaries (excluding the effects of consolidated net losses) for each Fiscal Quarter beginning on or after July 1, 1999, plus (iii) one-hundred percent (100%) of the net proceeds of any Non-Redeemable Stock offering by the Borrower or any of its Subsidiaries at any time after the Effective Date; (b) the Current Ratio at any time to be less than 1.0:1.0; or (c) the Interest Coverage Ratio at the end of any Fiscal Quarter to be less than 3.0:1.0. The Borrower shall not, and shall not suffer or permit any Subsidiary to, make any significant change in accounting treatment or reporting practices, except as required by GAAP, or, without the consent of the Administrative Agent, such consent not to be unreasonably withheld, change the fiscal year of the Borrower or of any Subsidiary. SECTION 8.2.5. INVESTMENTS. The Borrower will not, and will not permit any of its consolidated or Material Subsidiaries to, make, incur, assume or suffer to exist any Investment in any other Person, except: (a) Cash Equivalent Investments; (b) in the ordinary course of business, Investments by the Borrower in any of its Material Subsidiaries, or by any such Subsidiary in the Borrower or any of its Material Subsidiaries, by way of contributions to capital or loans or advances; (c) without duplication, Investments in the nature of Capital Expenditures; (d) Investments existing on the Effective Date and identified in Item 8.2.5(d) of the Disclosure Schedule; (e) Investments permitted by Section 8.2.8; -85- 93 (f) Investments in limited partnerships entered into by the Borrower or a Subsidiary of the Borrower, or general partnerships entered into by a non-Material Subsidiary of the Borrower, in each case with industry partners in the ordinary course of its business, or capital contributions to such partnerships, provided, that (i) such partnership is engaged exclusively in oil and gas exploration, development or production activities, (ii) the Borrower's or such Subsidiary's equity interests in such partnerships were acquired in the ordinary course of Borrower's or such Subsidiary's business and upon fair and reasonable terms and (iii) which Investments, in the aggregate, do not exceed five percent (5%) of the Borrowing Base at the time of such Investment; and further provided, that the limitations of this subsection (f) shall not apply to any Investment made in a Material Subsidiary; (g) accounts receivable from customers in the ordinary course of business; (h) loans and advances to employees not to exceed $100,000 in the aggregate as to all such loans and advances outstanding at any time; (i) Investments in connection with or related to farm-out agreements, farm-in agreements, joint operating agreements or other similar arrangements, and the performance of Borrower's or such Subsidiary's obligations thereunder in accordance with prudent operating standards and in the ordinary course of business; (j) Investments made with Non-Redeemable Stock, but only to the extent allocable to such Non-Redeemable Stock, and subject to the consequences of a Change of Control; (k) Investments in "margin stock" (as such term is defined in F.R.S. Board Regulation U, X or T), to the extent acquisitions of margin stock are permitted by Section 5.10; and (l) any Investment not otherwise permitted by the foregoing clauses of this Section if, immediately after such Investment is made or acquired, the aggregate net book value of all Investments permitted by this clause (m) does not exceed $100,000. provided, however, that (i) any Investment which when made complies with the requirements of the definition of the term "Cash Equivalent Investment" may continue to be held notwithstanding that such Investment if made thereafter would not comply with such requirements; and -86- 94 (ii) no Investment otherwise permitted by clause (b) and (c) shall be permitted to be made if, immediately before or after giving effect thereto, any Default shall have occurred and be continuing. SECTION 8.2.6. RESTRICTED PAYMENTS, ETC. On and at all times after the Effective Date: (a) the Borrower will not, and will not permit any of its Subsidiaries (other than a wholly-owned Subsidiary) to, declare, pay or make any dividend or distribution (in cash, property or obligations) on any class or shares of any class of partnership interest or Capital Stock (now or hereafter outstanding) of the Borrower or such Subsidiary or on any options, warrants or other rights with respect to any interest or shares of any class of partnership interest or Capital Stock (now or hereafter outstanding) of the Borrower or such Subsidiary or apply, or permit any of its Subsidiaries to apply, any of its funds, property or assets to the purchase, redemption, sinking fund or other retirement of, any interest or shares of any class of partnership interest or Capital Stock (now or hereafter outstanding) of the Borrower or such Subsidiary or options, warrants or other rights with respect to any interest or shares of any class of partnership interest or Capital Stock (now or hereafter outstanding) of the Borrower or such Subsidiary (such declarations, dividends, distributions or applications being called "Distribution Payments") other than Distribution Payments which do not cause the Borrower to be in violation of the Restricted Payment Tests; provided, however, that the Borrower may make or accrue Distribution Payments in the form of additional shares of Capital Stock of the Borrower or accruals thereof, so long as such additional shares of Capital Stock of the Borrower do not entitle the holder thereof to receive Distribution Payments payable in cash as a matter of right; (b) the Borrower will not permit any of its Subsidiaries to make any Distribution Payments other than to the Borrower; and (c) the Borrower will not, and will not permit any of its Subsidiaries to, make any deposit for any of the foregoing purposes. SECTION 8.2.7. RENTAL OBLIGATIONS. The Borrower will not, and will not permit any of its Subsidiaries to, enter into at any time any arrangement (excluding oil and gas leases entered into in the ordinary course of business) which involves the leasing by the Borrower or any consolidated or Material Subsidiary from any lessor of any real or personal property (or any interest therein), except arrangements which, together with all other such arrangements which shall then be in effect, will not require the payment of an aggregate amount of rentals by the Borrower or any of its Subsidiaries in excess of (excluding escalations resulting from a rise in the consumer price or similar index) $500,000 for any Fiscal Year or $2,000,000 during the full remaining -87- 95 term of such arrangements, including any so-called synthetic lease; provided, however, that any calculation made for purposes of this Section 8.2.7 shall exclude any amounts (i) required to be expended for maintenance and repairs, insurance, taxes, assessments, and other similar charges and (ii) any amounts relating to Capitalized Lease Obligations. SECTION 8.2.8. CONSOLIDATION, MERGER, ETC. The Borrower will not, and will not permit any of its Subsidiaries to, liquidate or dissolve, consolidate with, or merge into or with, any other corporation, partnership or other Person, or purchase or otherwise acquire all or substantially all of the assets of any Person (or of any division thereof) except (a) so long as no Default has occurred and is continuing or would so occur after giving effect thereto, (i) any such Subsidiary (other than a Material Subsidiary) may liquidate or dissolve voluntarily into, and may merge with and into, the Borrower or any other Subsidiary, (ii) any Material Subsidiary may liquidate or dissolve voluntarily into, and may merge with and into, the Borrower or any other Material Subsidiary, (iii) the assets or stock of any Subsidiary (other than a Material Subsidiary) may be purchased or otherwise acquired by the Borrower or any other Subsidiary, (iv) the assets or stock of any Material Subsidiary may be purchased or otherwise acquired by the Borrower or any other Material Subsidiary, and (v) the Borrower may merge with or into another Person if the Borrower is the Person surviving such merger and Principal Shareholders retain control over the Borrower; and (b) so long as no Default has occurred and is continuing or would so occur after giving effect thereto, the Borrower or any of its Subsidiaries may purchase all or substantially all of the assets of any Person, or acquire such Person by merger. The Borrower will not create any Subsidiary unless it shall promptly give notice thereof to the Administrative Agent. SECTION 8.2.9. ASSET DISPOSITIONS, ETC. (a) The Borrower will not, and will not permit any of its consolidated or Material Subsidiaries to, sell, transfer, lease, contribute or otherwise convey, or grant options, warrants or other rights with respect to, all or substantially all of the assets of the Borrower or any of its consolidated or Material Subsidiaries in any one transaction or in any series of transactions, whether or not related. (b) The Borrower will not, and will not permit any of its consolidated or Material Subsidiaries to, sell, transfer, lease, contribute or otherwise convey, -88- 96 or grant options, warrants or other rights with respect to any substantial part of its assets (including accounts receivable), to any Person other than (i) if such asset(s) are not in the Borrowing Base, such sale, transfer, lease, contribution or conveyance is for cash or other consideration having a value at least equal to the fair market value of such assets; (ii) if such assets are in the Borrowing Base, the Borrower complies with the terms of Section 3.1.2 and such sale, transfer, lease, contribution or conveyance is for cash in an amount at least equal to the fair market value of such assets; or (c) farmouts under standard industry terms of Properties not holding Proven Reserves. SECTION 8.2.10. MODIFICATION OF CERTAIN DOCUMENTS. (a) The Borrower will not, and will not permit any of its consolidated or Material Subsidiaries to, amend its Organic Documents or consent to any amendment, supplement or other modification of any of the terms or provisions contained in, or applicable to, the Material Contracts or any other agreement affecting the Mortgaged Properties which could reasonably be expected to have a Material Adverse Effect, in each case without the prior written consent of the Administrative Agent. (b) The Borrower will not, and will not permit any of its Subsidiaries to, amend the Arco Title Indemnity in a manner which adversely affects the Borrower, its Subsidiaries or the Lenders, waive any right or claim thereunder or consent to the substitution or addition of any alternate or substitute indemnitor thereunder, in each case without the prior written consent of the Required Lenders. SECTION 8.2.11. TRANSACTIONS WITH AFFILIATES. The Borrower will not, and will not permit any of its consolidated or Material Subsidiaries to, enter into, or cause, suffer or permit to exist any arrangement or contract with any of its other Affiliates unless such arrangement or contract is fair and equitable to the Borrower or such Subsidiary and is an arrangement or contract of the kind which would be entered into by a prudent Person in the position of the Borrower or such Subsidiary with a Person which is not one of its Affiliates. SECTION 8.2.12. NEGATIVE PLEDGES, RESTRICTIVE AGREEMENTS, ETC. The Borrower will not, and will not permit any of its Subsidiaries to, enter into any agreement (excluding this Agreement, any other Loan Document and any agreement -89- 97 governing any Indebtedness permitted by clauses (b) or (f) of Section 8.2.2 as in effect on the Effective Date as to the assets financed with the proceeds of such Indebtedness) prohibiting (a) the creation or assumption of any Lien upon its properties, revenues or assets, whether now owned or hereafter acquired, or the ability of the Borrower or any other Obligor to amend or otherwise modify this Agreement or any other Loan Document; or (b) the ability of any Material Subsidiary to make any payments, directly or indirectly, to the Borrower by way of dividends, advances, repayments of loans or advances, reimbursements of management and other intercompany charges, expenses and accruals or other returns on investments, or any other agreement or arrangement which restricts the ability of any such Material Subsidiary to make any payment, directly or indirectly, to the Borrower. SECTION 8.2.13. TAKE OR PAY CONTRACTS. Except as disclosed to the Lender in Item 8.2.13 of the Disclosure Schedule, and except for reservation charges payable for reservations of capacity in gathering systems and pipelines incurred in the ordinary course of business on an arm's length basis for volumes reasonably expected to be produced from the Borrowers' or its Subsidiaries' Oil and Gas Properties to be transported through such systems and pipelines, the Borrower will not, and will not permit any of its Subsidiaries to, enter into or be a party to any arrangement for the forward sale of Hydrocarbons or the purchase of materials, supplies, other property (including without limitation Hydrocarbons), or services if such arrangement requires that payment be made by the Borrower or such Subsidiary regardless of whether such materials, supplies, other property, or services are delivered or furnished to it. SECTION 8.2.14. SALE/LEASEBACKS. Obligors will not enter into any arrangement, directly or indirectly, with any Person whereby any Obligor shall sell or transfer any material asset, and whereby any Obligor shall then or immediately thereafter rent or lease as lessee such asset or any part thereof. SECTION 8.2.15. HYDROCARBON HEDGING. Commencing October 1, 1999, the Borrower will not, and will not permit any of its Subsidiaries to, enter into Hedging Agreements except those that (a) are with a Lender whose senior unsecured long term debt or certificates of deposit is rated at least A by Standard & Poor's Corporation or A2 by Moody's Investors Service, Inc., such Lender's Affiliates or other counterparties reasonably acceptable to the Administrative Agent, (b) do not result in Hedging Obligations that are (i) at any time during the twenty-four (24) months immediately following the incurrence of such Hedging Obligation, in excess of seventy-five percent (75%) of the reasonably anticipated production of Hydrocarbons during such period from the proved developed producing Hydrocarbon reserves owned by the Borrower and its Subsidiaries according to the most recent Engineering Report delivered to the -90- 98 Administrative Agent or (ii) at any time following the end of such twenty four (24) month period, in excess of fifty percent (50%) of the reasonably anticipated production of Hydrocarbons during such period from the proved developed producing Hydrocarbon reserves owned by the Borrower and its Subsidiaries according to the most recent Engineering Report delivered to the Administrative Agent and (c) the amount of the Hedging Obligation for the particular Hydrocarbon (i.e. - gas or oil) must not be materially in excess of the proportion that such Hydrocarbon bears to the total amount of proved developed Hydrocarbon reserves owned by the Borrower and its Subsidiaries. (For example, if the Borrower and its Subsidiaries owned proved developed producing Hydrocarbon reserves that were 45% oil-producing Properties and 55% gas-producing Properties, then any Hedging Obligation of the Borrower or its Subsidiaries for oil could not be, during the initial 24 month period, materially more than 45% of 75% of the reasonably anticipated production of Hydrocarbons from the proved developed producing Hydrocarbon reserves owned by the Borrower and its Subsidiaries according to the most recent Engineering Report delivered to the Administrative Agent.) The Borrower has entered into no other Hedging Agreements other than those listed in Schedule V. ARTICLE IX EVENTS OF DEFAULT SECTION 9.1. LISTING OF EVENTS OF DEFAULT. Each of the following events or occurrences described in this Section 9.1 shall constitute an "Event of Default". SECTION 9.1.1. NON-PAYMENT OF OBLIGATIONS. The Borrower shall default in the payment or prepayment when due of any principal of any Loan; the Borrower shall default in the payment when due of any Reimbursement Obligation or Hedging Agreement in effect between the Borrower and a Lender or Affiliate thereof; or the Borrower shall default (and such default shall continue unremedied for a period of five (5) days) in the payment when due of any interest on any Loan or any fees payable under Section 3.3 or any other Obligation. SECTION 9.1.2. BREACH OF WARRANTY. Any representation or warranty of the Borrower or any other Obligor made or deemed to be made hereunder or in any other Loan Document executed by it or any other writing or certificate furnished by or on behalf of the Borrower or any other Obligor to the Administrative Agent, any Issuer or any Lender for the purposes of or in connection with this Agreement or any such other Loan Document (including any certificates delivered pursuant to Article VI) is or shall be incorrect when made in any material respect. SECTION 9.1.3. NON-PERFORMANCE OF CERTAIN COVENANTS AND OBLIGATIONS. The Borrower shall default in the due performance and observance of any of its obligations -91- 99 under Section 3.1.2, Section 8.1 (other than Sections 8.1.1(j), 8.1.1(n), 8.1.2, 8.1.3, 8.1.6 or 8.1.7) or Section 8.2. SECTION 9.1.4. NON-PERFORMANCE OF OTHER COVENANTS AND OBLIGATIONS. The Borrower or any other Obligor shall default in the due performance and observance of any other agreement contained herein or in any other Loan Document executed by it, and such default shall continue unremedied for a period of fifteen (15) days after notice thereof shall have been given to the Borrower by the Administrative Agent or any Lender. SECTION 9.1.5. DEFAULT ON OTHER INDEBTEDNESS. (a) A default shall occur in the payment when due (subject to any applicable grace period), whether by acceleration or otherwise, of any Indebtedness (excluding Indebtedness described in Section 9.1.1) of the Borrower or any other Obligor having a principal amount, individually or in the aggregate, in excess of $250,000, or a default shall occur in the performance or observance of any obligation or condition with respect to such Indebtedness if the effect of such default is to accelerate the maturity of any such Indebtedness or such default shall continue unremedied for any applicable period of time sufficient to permit any holder of such Indebtedness, or any trustee or Administrative Agent for such holders, to cause such Indebtedness to become due and payable prior to its expressed maturity. (b) A failure to pay when due any royalty, overriding royalty or similar interest burdening the Oil and Gas Properties of the Borrower or any of its Subsidiaries, in the aggregate, in excess of $250,000. SECTION 9.1.6. JUDGMENTS. Any judgment or order for the payment of money in excess of $250,000 (in excess of valid and collectible insurance in respect thereof the payment of which is not being disputed or contested by the insurer or insurers) shall be rendered against the Borrower or any other Obligor and either (a) enforcement proceedings shall have been commenced by any creditor upon such judgment or order; or (b) there shall be any period of ten (10) consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect. SECTION 9.1.7. PENSION PLANS. Any of the following events shall occur with respect to any Pension Plan -92- 100 (a) the institution of any steps by the Borrower, any member of its Controlled Group or any other Person to terminate a Pension Plan if, as a result of such termination, the Borrower or any such member could be required to make a contribution to such Pension Plan in excess of $100,000, or could reasonably expect to incur a liability or obligation to such Pension Plan in excess of $100,000; or (b) a contribution failure occurs with respect to any Pension Plan sufficient to give rise to a Lien under Section 302(f) of ERISA. SECTION 9.1.8. CONTROL OF THE BORROWER. Any Change in Control shall occur. SECTION 9.1.9. BANKRUPTCY, INSOLVENCY, ETC. The Borrower or any other Obligor shall (a) become insolvent or generally fail to pay, or admit in writing its inability or unwillingness to pay, debts as they become due; (b) apply for, consent to, or acquiesce in, the appointment of a trustee, receiver, sequestrator or other custodian for the Borrower or any other Obligor or any property of any thereof, or make a general assignment for the benefit of creditors; (c) in the absence of such application, consent or acquiescence, permit or suffer to exist the appointment of a trustee, receiver, sequestrator or other custodian for the Borrower or any other Obligor or for a substantial part of the property of any thereof, and such trustee, receiver, sequestrator or other custodian shall not be discharged within sixty (60) days, provided that the Borrower and each other Obligor hereby expressly authorizes the Administrative Agent and each Lender to appear in any court conducting any relevant proceeding during such sixty (60)-day period to preserve, protect and defend its or their rights under the Loan Documents; (d) permit or suffer to exist the commencement of any bankruptcy, reorganization, debt arrangement or other case or proceeding under any bankruptcy or insolvency law, or any dissolution, winding up or liquidation proceeding, in respect of the Borrower or any other Obligor, and, if any such case or proceeding is not commenced by the Borrower or such other Obligor, such case or proceeding shall be consented to or acquiesced in by the Borrower or such other Obligor or shall result in the entry of an order for relief or shall remain for sixty (60) days undismissed, provided that the Borrower and each other Obligor hereby expressly authorizes the Administrative Agent and each Lender to appear in any court conducting any such case or proceeding during -93- 101 such sixty (60)-day period to preserve, protect and defend its or their rights under the Loan Documents; or (e) take any action authorizing, or in furtherance of, any of the foregoing. SECTION 9.1.10. IMPAIRMENT OF SECURITY, ETC. Any Loan Document, or any Lien granted thereunder, shall (except in accordance with its terms), in whole or in part, terminate, cease to be effective or cease to be the legally valid, binding and enforceable obligation of any Obligor party thereto; the Borrower, any other Obligor or any other party shall, directly or indirectly, contest in any manner such effectiveness, validity, binding nature or enforceability; or any Lien securing any Obligation shall, in whole or in part, cease to be a perfected first priority Lien, subject only to those exceptions expressly permitted by the Loan Documents. SECTION 9.1.11. MATERIAL ADVERSE EFFECT. Any Material Adverse Effect shall occur. SECTION 9.1.12. BORROWING BASE DEFICIENCY. Any Borrowing Base Deficiency shall occur and continue for more than ninety (90) days. SECTION 9.2. ACTION IF BANKRUPTCY. If any Event of Default described in clauses (a) through (d) of Section 9.1.9 shall occur with respect to the Borrower or any other Obligor, the Commitments (if not theretofore terminated) shall automatically terminate and the outstanding principal amount of all outstanding Loans and all other Obligations shall automatically be and become immediately due and payable, without notice or demand. SECTION 9.3. ACTION IF OTHER EVENT OF DEFAULT. If any Event of Default (other than any Event of Default described in clauses (a) through (d) of Section 9.1.9 with respect to the Borrower or any other Obligor) shall occur for any reason, whether voluntary or involuntary, and be continuing, the Administrative Agent, may (and, upon direction by the Required Lenders, shall) by notice to the Borrower declare all or any portion of the outstanding principal amount of the Loans and other Obligations to be due and payable and/or the Commitments (if not theretofore terminated) to be terminated, whereupon the full unpaid amount of such Loans and other Obligations which shall be so declared due and payable shall be and become immediately due and payable, without further notice, demand or presentment, and/or, as the case may be, the Commitments shall terminate. SECTION 9.4. RIGHTS NOT EXCLUSIVE. The rights provided for in this Agreement and the other Loan Documents are cumulative and are not exclusive of any other rights, powers, privileges or remedies provided by Applicable Law or in equity, or under any other instrument, document or agreement now existing or hereafter arising. -94- 102 ARTICLE X THE ADMINISTRATIVE AGENT SECTION 10.1. ACTIONS. Each Lender hereby appoints Bank of America as its Administrative Agent under and for purposes of this Agreement, the Notes and each other Loan Document, and Bank of America hereby accepts such appointment. Each Lender authorizes the Administrative Agent to act on behalf of such Lender under this Agreement, the Notes and each other Loan Document and, in the absence of other written instructions from the Required Lenders received from time to time by the Administrative Agent (with respect to which the Administrative Agent agrees that it will comply, except as otherwise provided in this Section and to the extent such instructions may reasonably be expected to comply with applicable law), to exercise such powers and to perform such duties hereunder and thereunder as are specifically delegated to or required of the Administrative Agent by the terms hereof and thereof, together with such powers as may be reasonably incidental thereto; provided, however, that the Administrative Agent shall not take any action that requires the consent of any Lender unless it receives such consent. Each Lender hereby indemnifies (which indemnity shall survive any termination of this Agreement) the Administrative Agent, pro rata according to such Lender's Percentage, from and against any and all liabilities, obligations, losses, damages, claims, costs or expenses of any kind or nature whatsoever which may at any time be imposed on, incurred by, or asserted against, the Administrative Agent in any way relating to or arising out of this Agreement, the Notes and any other Loan Document, including reasonable attorneys' fees, and as to which the Administrative Agent is not reimbursed by the Borrower; provided, however, that no Lender shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, claims, costs or expenses which are determined by a court of competent jurisdiction in a final proceeding to have resulted solely from the Administrative Agent's gross negligence or wilful misconduct. The Administrative Agent shall not be required to take any action hereunder, under the Notes or under any other Loan Document, or to prosecute or defend any suit in respect of this Agreement, the Notes or any other Loan Document, unless it is indemnified hereunder to its satisfaction. If any indemnity in favor of the Administrative Agent shall be or become, in the Administrative Agent's determination, inadequate, the Administrative Agent may call for additional indemnification from the Lenders and cease to do the acts indemnified against hereunder until such additional indemnity is given. SECTION 10.2. FUNDING RELIANCE, ETC. Unless the Administrative Agent shall have been notified by telephone, confirmed in writing, by any Lender by 5:00 p.m. (Dallas time) on the day prior to a Borrowing that such Lender will not make available the amount which would constitute its Percentage of such Borrowing on the date specified therefor, the Administrative Agent may assume that such Lender has made -95- 103 such amount available to the Administrative Agent and, in reliance upon such assumption, make available to the Borrower a corresponding amount. If and to the extent that such Lender shall not have made such amount available to the Administrative Agent, such Lender and the Borrower severally agree to repay the Administrative Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date the Administrative Agent made such amount available to the Borrower to the date such amount is repaid to the Administrative Agent, at the interest rate applicable at the time to Loans comprising such Borrowing. SECTION 10.3. EXCULPATION. Neither the Administrative Agent nor any of its directors, officers, employees or Administrative Agents shall be liable to any Lender for any action taken or omitted to be taken by it under this Agreement or any other Loan Document, or in connection herewith or therewith, except for its own wilful misconduct or gross negligence, nor responsible for any recitals or warranties herein or therein, nor for the effectiveness, enforceability, validity or due execution of this Agreement or any other Loan Document, nor for the creation, perfection or priority of any Liens purported to be created by any of the Loan Documents, or the validity, genuineness, enforceability, existence, value or sufficiency of any collateral security, nor to make any inquiry respecting the performance by the Borrower of its obligations hereunder or under any other Loan Document. Any such inquiry which may be made by the Administrative Agent shall not obligate it to make any further inquiry or to take any action. The Administrative Agent shall be entitled to rely upon advice of counsel concerning legal matters and upon any notice, consent, certificate, statement or writing which the Administrative Agent believes to be genuine and to have been presented by a proper Person. SECTION 10.4. SUCCESSOR. The Administrative Agent may resign as such at any time upon at least thirty (30) days' prior notice to the Borrower and all Lenders, and the Administrative Agent may be removed with or without cause as such by the Required Lenders upon at least thirty (30) days' prior notice to the Administrative Agent and the Borrower. If the Administrative Agent at any time shall resign or be removed, the Required Lenders may appoint another Lender as a successor Administrative Agent which Lender shall thereupon become the Administrative Agent hereunder. If no successor Administrative Agent shall have been so appointed by the Required Lenders, and shall have accepted such appointment, within thirty (30) days after the giving of notice of resignation or removal, then the retiring or removed Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent, which shall be one of the Lenders and, if no Lender accepts such appointment, a commercial banking institution organized under the laws of the United States (or any State thereof) or a United States branch or agency of a commercial banking institution, and having a combined capital and surplus of at least $500,000,000. Upon the acceptance of any appointment as Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative Agent -96- 104 shall be entitled to receive from the retiring or removed Administrative Agent such documents of transfer and assignment as such successor Administrative Agent may reasonably request, and shall thereupon succeed to and become vested with all rights, powers, privileges and duties of the retiring or removed Administrative Agent, and the retiring or removed Administrative Agent shall be discharged from its duties and obligations under this Agreement. After any retiring or removed Administrative Agent's resignation or removal hereunder as the Administrative Agent, the provisions of (a) this Article X shall inure to its benefit as to any actions taken or omitted to be taken by it while it was the Administrative Agent under this Agreement; and Section 11.3 and Section 11.4 shall continue to inure to its benefit. SECTION 10.5. LOANS OR LETTERS OF CREDIT ISSUED BY BANK OF AMERICA. Bank of America shall have the same rights and powers with respect to (x) the Loans made by it or any of its Affiliates, (y) the Notes held by it or any of its Affiliates, and (z) its participating interests in the Letters of Credit as any other Lender and may exercise the same as if it were not the Administrative Agent. Bank of America and its Affiliates and each of the Lenders and each of the Issuers and their respective Affiliates may accept deposits from, lend money to, and generally engage in any kind of business with the Borrower or any Subsidiary or Affiliate of the Borrower as if Bank of America were not the Administrative Agent hereunder and in the case of each Lender or Issuer, as if such Lender or such Issuer were not a Lender or Issuer hereunder. SECTION 10.6. CREDIT DECISIONS. Each Lender and each Issuer acknowledges that it has, independently of the Administrative Agent, each other Issuer and each other Lender, and based on such Lender's or such Issuer's review of the financial information of the Borrower, this Agreement, the other Loan Documents (the terms and provisions of which being satisfactory to such Lender or such Issuer) and such other documents, information and investigations as such Lender or such Issuer has deemed appropriate, made its own credit decision to extend its Commitments. Each Lender and each Issuer also acknowledges that it will, independently of the Administrative Agent and each other Lender and each other Issuer, and based on such other documents, information and investigations as it shall deem appropriate at any time, continue to make its own credit decisions as to exercising or not exercising from time to time any rights and privileges available to it under this Agreement or any other Loan Document. SECTION 10.7. COPIES, ETC. The Administrative Agent shall give prompt notice to each Lender and each Issuer of each notice or request required or permitted to be given to the Administrative Agent by the Borrower pursuant to the terms of this -97- 105 Agreement (unless concurrently delivered to the Lenders and each Issuer by the Borrower). The Administrative Agent will distribute promptly to each Lender and each Issuer each document or instrument received for its account and copies of all other communications received by the Administrative Agent from the Borrower for distribution to the Lenders and Issuers by the Administrative Agent in accordance with the terms of this Agreement. ARTICLE XI MISCELLANEOUS PROVISIONS SECTION 11.1. WAIVERS, AMENDMENTS, ETC. (a) This Agreement is an amendment and restatement of, and replaces and supersedes, the Existing Credit Agreement in its entirety; provided, however, that no right, interest, claim or cause of action of any kind of the lender under the Existing Credit Agreement shall in any way be released, modified, compromised or waived by virtue of this Agreement superseding and replacing the Existing Credit Agreement, and nothing in this Agreement or the other Loan Documents is intended to novate or discharge the indebtedness of the Borrower or the other Obligors under the Existing Credit Agreement; provided however, upon the satisfaction of all conditions set forth in Section 6.1, Bank of America shall terminate its Lien on all shares of the Capital Stock of the Borrower under Pledge Agreements under the Existing Credit Agreement that were previously delivered by shareholders of the Borrower; (b) The provisions of this Agreement and of each other Loan Document may from time to time be amended, modified or waived, if such amendment, modification or waiver is in writing and consented to by the Borrower and the Required Lenders; provided, however, that no such amendment, modification or waiver which would: (i) modify any requirement hereunder that any particular action be taken by all the Lenders or by the Required Lenders shall be effective unless consented to by each Lender; (ii) modify this Section 11.1, change the definitions of "Required Lenders", "Restricted Payment Tests," "Total Commitment", "Letter of Credit Availability", or "Commitment Amount", increase the Percentage of any Lender, reduce any fees described in Article III, amend Section 6.1.15 or 8.2.6, release any collateral security including any Guaranty, except as otherwise specifically provided in any Loan Document, or extend the Stated Maturity Date or any Commitment -98- 106 Termination Date, shall be made without the consent of each Lender affected thereby; (iii) extend the due date for, or reduce the amount of, any scheduled or mandatory repayment or prepayment of principal of or interest on any Loan (or reduce the principal amount of or rate of interest on any Loan) shall be made without the consent of each Lender affected thereby; (iv) affect adversely the interests, rights or obligations of an Issuer in its capacity as Issuer shall be made without the consent of such Issuer; or (v) affect adversely the interests, rights or obligations of the Administrative Agent in its capacity as the Administrative Agent shall be made without consent of the Administrative Agent. No failure or delay on the part of the Administrative Agent, any Issuer or any Lender in exercising any power or right under this Agreement or any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such power or right preclude any other or further exercise thereof or the exercise of any other power or right. No notice to or demand on the Borrower in any case shall entitle it to any notice or demand in similar or other circumstances. No waiver or approval by the Administrative Agent, any Issuer or any Lender under this Agreement or any other Loan Document shall, except as may be otherwise stated in such waiver or approval, be applicable to subsequent transactions. No waiver or approval hereunder shall require any similar or dissimilar waiver or approval thereafter to be granted hereunder. SECTION 11.2. NOTICES. All notices and other communications provided to any party hereto under this Agreement or any other Loan Document shall be in writing and shall be hand delivered or sent by overnight courier, certified mail (return receipt requested), or telecopy to such party at its address or telecopy number set forth on Schedule III hereto or set forth in the Lender Assignment Notice or at such other address or telecopy number as may be designated by such party in a notice to the other parties. Without limiting any other means by which a party may be able to provide that a notice has been received by the other party, a notice shall be deemed to be duly received (a) if sent by hand, on the date when left with a responsible person at the address of the recipient; (b) if sent by certified mail or overnight courier, on the date of receipt (or refusal to accept delivery) by a responsible person at the address of the recipient; and (c) if sent by telecopy, on the date of receipt by the sender of an acknowledgment or transmission reports generated by the machine from which the telecopy was sent indicating that the telecopy was sent in its entirety to the recipient's telecopy number. -99- 107 SECTION 11.3. PAYMENT OF COSTS AND EXPENSES. The Borrower agrees to pay on demand all reasonable expenses of the Administrative Agent (including the fees and out-of-pocket expenses of internal and external counsel to the Administrative Agent and of local counsel, if any, who may be retained by counsel to the Administrative Agent) in connection with (a) the negotiation, preparation, due diligence, execution, delivery, syndication, administration and enforcement of this Agreement and of each other Loan Document, including schedules and exhibits, and any amendments, waivers, consents, supplements or other modifications to this Agreement or any other Loan Document as may from time to time hereafter be required, whether or not the transactions contemplated hereby are consummated, (b) the filing, recording, refiling or rerecording of the Mortgages, the Security Agreements and the Pledge Agreements and/or any Uniform Commercial Code financing statements relating thereto and all amendments, supplements and modifications to, and releases and terminations of, any thereof and any and all other documents or instruments of further assurance required to be filed or recorded or refiled or rerecorded by the terms hereof or of the Mortgages, the Security Agreements and the Pledge Agreements, and (c) the preparation and review of the form of any document or instrument relevant to this Agreement or any other Loan Document. The Borrower further agrees to pay, and to save each of the Administrative Agent, each Issuer and the Lenders harmless from all liability for, any stamp or other taxes which may be payable in connection with the execution or delivery of this Agreement, the borrowings hereunder, the issuance of the Notes, the issuance of the Letters of Credit, or any other Loan Documents. During (i) the existence of a Default and (ii) whether or not a Default still exists, after any acceleration of the Obligations, the Borrower also agrees to reimburse the Administrative Agent, each Lender and each Issuer upon demand for all reasonable out-of-pocket expenses (including attorneys' fees and legal expenses of internal and external attorneys, and accountants', engineers' and other consultants' fees and expenses) incurred by the Administrative Agent, each Lender and each Issuer in connection with (x) the negotiation of any restructuring or "work-out", whether or not consummated, of any Obligations and (y) the enforcement of any Obligations. SECTION 11.4. INDEMNIFICATION. In consideration of the execution and delivery of this Agreement by the Administrative Agent, each Issuer and each Lender and the extension of the Commitments, the Borrower hereby indemnifies, exonerates and holds the Administrative Agent, each Issuer and each Lender and each of their respective officers, directors, employees and agents (collectively, the "Indemnified Parties") free and harmless from and against any and all actions, causes of action, -100- 108 suits, losses, costs, liabilities and damages, and expenses incurred in connection therewith (irrespective of whether any such Indemnified Party is a party to the action for which indemnification hereunder is sought), including reasonable attorneys' fees and disbursements (collectively, the "Indemnified Liabilities"), incurred by the Indemnified Parties or any of them as a result of, or arising out of, or relating to (a) any transaction financed or to be financed in whole or in part, directly or indirectly, with the proceeds of any Loan or the use of any Letter of Credit; (b) any investigation, litigation or proceeding related to any acquisition or proposed acquisition by the Borrower or any of its Subsidiaries of all or any portion of the stock or assets of any Person, whether or not the Administrative Agent or such Issuer or such Lender is party thereto; (c) any investigation, litigation or proceeding related to any environmental cleanup, audit, compliance or other matter relating to any Environmental Law or the condition of any facility or Property owned, leased or operated by the Borrower or any of its Subsidiaries; provided, however, that Indemnified Liabilities under this Section 11.4(c) pertaining to Oil and Gas Properties located in the State of California shall be governed by the Unsecured Indemnity; (d) the presence on or under, or the escape, seepage, leakage, spillage, discharge, emission, discharging or releases from, any facility or Property owned, leased or operated by the Borrower or any of its Subsidiaries thereof of any Hazardous Material (including any losses, liabilities, damages, injuries, costs, expenses or claims asserted or arising under any Environmental Law), regardless of whether caused by, or within the control of, the Borrower or any of its Subsidiaries; provided, however, that Indemnified Liabilities under this Section 11.4(d) pertaining to Oil and Gas Properties located in the State of California shall be governed by the Unsecured Indemnity; or (e) any misrepresentation, inaccuracy or breach in or of Section 7.17 or Section 8.1.6, except for any such Indemnified Liabilities arising for the account of a particular Indemnified Party by reason of the relevant Indemnified Party's gross negligence or wilful misconduct. If and to the extent that the foregoing undertaking may be unenforceable for any reason, the Borrower hereby agrees to make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under Applicable Law. SECTION 11.5. SURVIVAL. The obligations of the Borrower under Sections 5.3, 5.4, 5.5, 5.6, 11.3 and 11.4 shall in each case survive any termination of this -101- 109 Agreement, the payment in full of all Obligations and the termination of all Commitments. The representations and warranties made by each Obligor in this Agreement and in each other Loan Document shall survive the execution and delivery of this Agreement and each such other Loan Document. SECTION 11.6. SEVERABILITY. Any provision of this Agreement or any other Loan Document which is prohibited or unenforceable in any jurisdiction shall, as to such provision and such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Agreement or such Loan Document or affecting the validity or enforceability of such provision in any other jurisdiction. SECTION 11.7. HEADINGS. The various headings of this Agreement and of each other Loan Document are inserted for convenience only and shall not affect the meaning or interpretation of this Agreement or such other Loan Document or any provisions hereof or thereof. SECTION 11.8. EXECUTION IN COUNTERPARTS, EFFECTIVENESS, ETC. This Agreement may be executed by the parties hereto in several counterparts, each of which shall be executed by the Borrower, the Administrative Agent, each Issuer and each Lender and be deemed to be an original and all of which shall constitute together but one and the same agreement. This Agreement shall become effective when counterparts hereof are executed on behalf of the Borrower, the Administrative Agent, and each Lender, and the Administrative Agent has determined that the conditions set forth in Section 6.1 have been satisfied.. This Agreement is made and entered into for the sole protection and legal benefit of the Borrower, the Administrative Agent and the Lenders and Persons indemnified hereunder, and their permitted successors and assigns, and no other Person shall be a direct or indirect legal beneficiary of, or have any direct or indirect cause of action or claim in connection with, this Agreement or any of the other Loan Documents. SECTION 11.9. GOVERNING LAW; ENTIRE AGREEMENT. THIS AGREEMENT, THE NOTES AND EACH OTHER LOAN DOCUMENT (OTHER THAN THE MORTGAGES OR AS EXPRESSLY PROVIDED IN ANY SUCH DOCUMENT) SHALL EACH BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF TEXAS. This Agreement, the Notes and the other Loan Documents constitute the entire understanding among the parties hereto with respect to the subject matter hereof and supersede any prior agreements, written or oral, with respect thereto. SECTION 11.10. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns; provided, however, that: -102- 110 (a) the Borrower may not assign or transfer its rights or obligations hereunder without the prior written consent of the Administrative Agent, all Issuers and all Lenders; and (b) the rights of sale, assignment and transfer of Lenders are subject to Section 11.11. SECTION 11.11. SALE AND TRANSFER OF LOANS AND NOTES; PARTICIPATIONS IN LOANS AND NOTES. Each Lender may assign, or sell participations in, its Loans and Commitments and participations in Letters of Credit to one or more other Persons in accordance with this Section 11.11. SECTION 11.11.1. ASSIGNMENTS. A Lender may at any time assign and delegate to one or more Eligible Assignees (each Person to whom such assignment and delegation is to be made, being hereinafter referred to as an "Assignee Lender"), all or any fraction of such Lender's total Loans and Commitments (which assignment and delegation shall be of a constant, and not a varying, percentage of all such Lender's Loans and Commitments) in a minimum aggregate amount of $5,000,000 (or the entire remaining amount of such Lender's Loans and Commitments); provided, however, that such Lender is required at all times to maintain Loans, Letters of Credit Outstandings and Commitments hereunder in an aggregate amount of $5,000,000 (unless such Lender shall have reduced its Loans, Letters of Credit Outstandings and Commitments to zero); provided, further, however, that the Borrower and each other Obligor shall be entitled to continue to deal solely and directly with such Lender in connection with the interests so assigned and delegated to an Assignee Lender until (a) written notice of such assignment and delegation, together with payment instructions, addresses and related information with respect to such Assignee Lender, shall have been given to the Borrower and the Administrative Agent by such Lender and such Assignee Lender, (b) such Assignee Lender shall have executed and delivered to the Borrower, the Administrative Agent and such Lender a Lender Assignment Notice, accepted by such Lender, the Borrower (if required) and the Administrative Agent, and (c) the processing fees described below shall have been paid. From and after the date that the Administrative Agent and the Borrower (if required) accepts such Lender Assignment Notice, (x) the Assignee Lender thereunder shall be deemed automatically to have become a party hereto and to the extent that rights and obligations hereunder have been assigned and delegated to such Assignee Lender in connection with such Lender Assignment Notice, shall have the rights and obligations of a Lender hereunder and under the other Loan Documents, and (y) the assignor -103- 111 Lender, to the extent that rights and obligations hereunder have been assigned and delegated by it in connection with such Lender Assignment Notice, shall be released from its obligations hereunder and under the other Loan Documents. Within five (5) Business Days after the later to occur of (i) its receipt of notice that the Administrative Agent has received and accepted an executed Lender Assignment Notice and (ii) the Borrower's receipt and acceptance (if required) of the Lender Assignment Notice executed by the Administrative Agent and all other parties thereto, the Borrower shall execute and deliver to the Administrative Agent (for delivery to the relevant Assignee Lender) a new Note evidencing such Assignee Lender's assigned Loans and Commitments and, if the assignor Lender has retained Loans and Commitments hereunder, a replacement Note in the principal amount of the Loans and Commitments retained by the assignor Lender hereunder (each such Note to be in exchange for, but not in payment of, the corresponding Note then held by such assignor Lender). The assignor Lender shall mark the predecessor Note "exchanged" and deliver it to the Borrower. Accrued interest on that part of the predecessor Note evidenced by the new Note, and accrued fees, shall be paid as provided in the Lender Assignment Notice. Accrued interest on that part of the predecessor Note evidenced by the replacement Note shall be paid to the assignor Lender. Accrued interest and accrued fees shall be paid at the same time or times provided in the predecessor Notes and in this Agreement. Such assignor Lender or such Assignee Lender must also pay a processing fee to the Administrative Agent upon delivery of any Lender Assignment Notice in the amount of $3,500. Any attempted assignment and delegation not made in accordance with this Section 11.11.1 shall be null and void. Nothing contained in this Agreement shall prohibit any Lender from pledging or assigning any Note to any Federal Reserve Bank in accordance with Applicable Law. SECTION 11.11.2. PARTICIPATIONS. A Lender may at any time sell to one or more commercial banks or other Persons (each of such commercial banks and other Persons being herein called a "Participant") participating interests in any of the Loans, Commitments, or other interests of such Lender hereunder; provided, however, that (a) no participation contemplated in this Section 11.11.2 shall relieve a Lender from its Commitments or its other obligations hereunder or under any other Loan Document, (b) such Lender shall remain solely responsible for the performance of its Commitments and such other obligations, (c) the Borrower and each other Obligor shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement and each of the other Loan Documents, -104- 112 (d) the Borrower shall not be required to pay any amount under Section 5.6 that is greater than the amount which it would have been required to pay had no participating interest been sold, and (e) any agreement pursuant to which any Lender may grant such a participating interest shall provide that such Lender shall retain the sole right and responsibility to enforce the obligations of the Borrower and the Issuer hereunder including, without limitation, the right to approve any amendment, modification or waiver of any provision of this Agreement; provided that such participation agreement may provide that such Lender will not agree to any modification, amendment or waiver of this Agreement described in clause (ii) or (iii) of Section 11.1(b) without the consent of the Participant. The Borrower acknowledges and agrees that each Participant shall, to the extent provided in its participation agreement, be entitled to the benefits of Sections 5.3, 5.4, 5.5, and 5.6 (except as provided in Section 11.11.2(d)), 11.3 and 11.4 with respect to its participation interest. SECTION 11.12. FORUM SELECTION AND CONSENT TO JURISDICTION. ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE AGENT, ANY ISSUER OR ANY LENDER OR THE BORROWER SHALL BE BROUGHT AND MAINTAINED IN THE COURTS OF THE STATE OF TEXAS OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE ADMINISTRATIVE AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF TEXAS AND OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY FINAL, NON-APPEALABLE JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION. THE BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF TEXAS. THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT THE BORROWER HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS -105- 113 (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE BORROWER HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS. SECTION 11.13. WAIVER OF JURY TRIAL. THE ADMINISTRATIVE AGENT, EACH ISSUER, EACH LENDER AND THE BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE AGENT, EACH ISSUER, ANY LENDER OR THE BORROWER. THE BORROWER ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE ADMINISTRATIVE AGENT, EACH ISSUER AND EACH LENDER ENTERING INTO THIS AGREEMENT AND EACH SUCH OTHER LOAN DOCUMENT. SECTION 11.14. OTHER TRANSACTIONS. Nothing contained herein shall preclude the Administrative Agent or any other Lender or any of their respective Affiliates from engaging in any transaction, in addition to those contemplated by this Agreement or any other Loan Document, with the Borrower or any of its Affiliates in which the Borrower or such Affiliate is not restricted hereby from engaging with any other Person. SECTION 11.15. MAXIMUM INTEREST. (a) It is the intention of the parties hereto to comply strictly with Applicable Laws pertaining to usury, if any; accordingly, notwithstanding any provision to the contrary in this Agreement or in any of the other Loan Documents, in no event shall the Loan Documents require or permit the payment, taking, reserving, receiving, collection or charging of any sums constituting interest under applicable laws which exceed the maximum amount of interest permitted by such laws (such maximum lawful interest rate, if any, herein called the "Highest Lawful Rate"). If any such excess interest is called for, contracted for, charged, taken, reserved, or received in connection with any Obligation under this Agreement or in any of the documents securing the payment hereof or otherwise relating hereto, or in any communication by the Administrative Agent, any Lender or any other person to the Borrower or any other person, or in the event all or part of the principal or interest of any Loan shall be prepaid or accelerated, so that under any of such circumstances or under any other circumstance whatsoever the amount of interest contracted for, charged, taken, reserved, or received on the amount of principal actually outstanding from time to time -106- 114 under this Agreement or any other Loan Document shall exceed the maximum amount of interest permitted by Applicable Laws pertaining to usury, then in any such event it is agreed as follows: (i) the provisions of this Section shall govern and control, (ii) the aggregate of all consideration which constitutes interest under Applicable Law that is called for, contracted for, charged, taken, reserved or received under this Agreement and the other Loan Documents, or under any of the other aforesaid agreements or otherwise in connection with this Agreement shall under no circumstances exceed the Highest Lawful Rate, any such excess shall be credited against the then unpaid principal balance of Obligations of the Borrower by the Administrative Agent (or, if such Obligations shall have been paid in full, such excess refunded to Borrower by the Lenders); (iii) all sums paid, or agreed to be paid, to the Administrative Agent for the benefit of the Lenders for the use, forbearance and detention of the amounts owed under this Agreement by the Borrower hereunder shall, to the extent permitted by Applicable Law, be amortized, prorated, allocated and spread throughout the full term of the Obligations, including all prior and subsequent renewals and extensions, owed under this Agreement and the other Loan Documents until payment in full so that the actual rate of interest is uniform throughout the full term thereof; and (iv) if at any time the interest provided pursuant to this Agreement together with any other fees payable pursuant to this Agreement and the other Loan Documents and deemed interest under Applicable Law, exceeds that amount which would have accrued at the Highest Lawful Rate, the amount of interest, swap breakage, and any such fees to accrue pursuant to this Agreement and the other Loan Documents shall be limited, notwithstanding anything to the contrary in this Agreement or in any other Loan Document to that amount which would have accrued at the Highest Lawful Rate, but any reductions in the interest otherwise provided pursuant to this Agreement, as applicable, shall be carried forward and collected in periods in which the amount of interest accruing otherwise pursuant to this Agreement shall be less than the Highest Lawful Rate until the total amount of interest (including such fees deemed to be interest) accrued pursuant to this Agreement and the other Loan Documents equals the amount of interest which would have accrued if a varying rate per annum equal to the Alternate Base Rate had at all times been in effect plus the amount of fees which would have been received but for the effect of this Section and the Highest Lawful Rate limitation imposed in Section 3.2.1. Without limiting the foregoing, all calculations of the rate of interest contracted for, charged, taken, reserved, or received in connection herewith which are made for the purpose of determining whether such rate exceeds the maximum lawful rate shall be made to the extent permitted by Applicable Laws by amortizing, prorating, allocating and spreading during the period of the full term of the Obligations, including all prior and subsequent renewals and extensions, all interest at any time contracted for, charged, taken, reserved, or received. The terms of this section shall be deemed to be incorporated in every Loan Document, security instrument and other document executed in connection therewith, and every communication relating thereto. -107- 115 (b) The Borrower, the Administrative Agent, each Issuer and each Lender agree that Chapter 346 of the Texas Finance Code ("Chapter 346") (which regulates certain revolving loan accounts and revolving tri-party accounts) shall not apply to any revolving loan accounts created under this Agreement, the Notes or the other Loan Documents or maintained in connection therewith. (c) To the extent that the interest rate laws of the State of Texas are applicable to this Agreement, any Note or any other Loan Document, the applicable interest rate ceiling is the indicated "weekly ceiling" determined in accordance with Chapter 1D of the Texas Credit Code, as amended, and, to the extent that any Obligation under this Agreement, any Note or any other Loan Document is deemed an open end account as such term is defined in the Texas Credit Code, the Administrative Agent retains the right to modify the interest rate in accordance with Applicable Law. SECTION 11.16. CONTROLLING DOCUMENT. In the event of actual conflict in the terms and provisions of this Agreement, the Notes and the other Loan Documents, the terms and provisions of this Agreement will control. [Signature pages follow] -108- 116 SECTION 11.17. NOTICE. THIS WRITTEN AGREEMENT TOGETHER WITH THE OTHER LOAN DOCUMENTS REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized as of the day and year first above written. BORROWER: BARGO ENERGY COMPANY, a Texas corporation By -------------------------------------------- Name: Jonathan M. Clarkson Title: President Address: 700 Louisiana Street Suite 3700 Houston, Texas 77002 Attn: Jonathan M. Clarkson Fax: 713-236-9799 ADMINISTRATIVE AGENT: BANK OF AMERICA, N.A., formerly Bank of America National Trust and Savings Association By -------------------------------------------- Title: Managing Director Printed Name: Ronald E. McKaig Address for Notices: Agency Administrative Services 901 Main Street Dallas, Texas 75202 -109- 117 Attention: Vicky Wages Telecopier No: 214-290-8373 Telephone No: 214-209-9254 with copies to: 333 Clay Street Suite 4550 Houston, Texas 77002 Attn: Ronald E. McKaig Fax: (713) 651-4888 -110- 118 LENDERS: BANK OF AMERICA, N.A. By -------------------------------------------- Title: Managing Director Printed Name: Ronald E. McKaig -111- 119 BANK ONE, TEXAS, NA By -------------------------------------------- Title: -112- 120 WELLS FARGO BANK (TEXAS) NA By -------------------------------------------- Title: -113- 121 SCHEDULE I DISCLOSURE SCHEDULE ITEM 7.9 Litigation Falcon Resources, Inc. vs. Atlantic Richfield Company and Future Acquisition 1995, Ltd. in the District Court of Rusk County, Texas - This action concerns the purported exercise of a Preferential Right to Purchase S. Kilgore Waterflood Unit, which is a portion of the Arco East Texas Property. ITEM 7.10 Ownership of Properties ARCO East Texas Acquisition - In Exhibit A to the Purchase and Sale Agreement dated August 3, 1999, between Atlantic Richfield Company and Future Acquisition 1995, Ltd., the parties identified a Title Defects sometimes called the "Marshall Title Defect". In an action entitled Stanley G. Marshall, Jr., Catherine Irene Marshall, Margaret Anne Warne and Robert R. Marshall v. ARCO Oil and Gas Company, a division of Atlantic Richfield Company, Civil Action No. 3217, District Court of 49th Judicial District, Zapata County, Texas, the court rendered a second modified judgment on March 19, 1998 against ARCO Oil and Gas Company, a division of Atlantic Richfield Company, in the amount of $68,986,926.75, which amount accrues interest at the rate of 10% compounded annually, as provided in the judgment (such judgment, as the same may be from time to time revised, re-entered, amended, partially satisfied, renewed or otherwise modified in any way, herein called the "Marshall Judgment"). The Marshall Title Defect and the Marshall Judgment are the subject to the Arco Title Indemnity. An Amended Abstract of Judgment giving notice of the Marshall Judgment was recorded in the public records of the following counties, among others: Gregg County, Texas File No. 9807331 on April 14, 1998 Rusk County, Texas Volume 2069, Page 193 on April 21, 1998 Smith County, Texas Upshur County, Texas 122 ITEM 7.12 Employee Benefit Plans None ITEM 7.14 Claims and Liabilities None ITEM 7.17 Environmental Matters None ITEM 8.2.2(f) Existing Indebtedness Indebtedness owed to Bank One Texas in the principal amount of approximately $9,300.00. ITEM 8.2.5(c) Existing Investments None ITEM 8.2.13 Take or Pay Contracts None 123 SCHEDULE II SUBSIDIARIES
TYPE OF AUTHORIZED OUTSTANDING PERCENT SUBSIDIARY JURISDICTION ENTITY SHARES SHARES OWNERSHIP ---------------------------- ------------ ------------ ---------- ------------ --------- Future Petroleum Corporation Texas Corporation 10,000 1,000 100% Alaska Eldorado Gold, Co. Nevada Corporation 1,000 1,000 99.8% Future Energy Corporation Nevada Corporation 50,000 1,000 100% Future CAL-TEX Corporation Texas Corporation 1,000,000 1,000 100% BMC Development No. 1 Texas Limited * Limited Partnership Partnership NC1-Shawnee Texas Limited * Limited Partnership Partnership Future Acquisition 1995, Ltd. Texas Limited * Partnership
- ------------ * Owned 1% by Future Petroleum Corporation (Texas) and 99% by Future Energy Corporation a. Future Acquisition 1995 and Future Petroleum Corporation are qualified to do business in the State of Louisiana, Mississippi, New Mexico. b. Future Cal-Tex Corporation is qualified to do business in the state of California. c. NCI-Shawnee Limited Partnership, Future Petroleum Corporation and BMC Development No. 1 Limited Partnership are qualified to do business in the State of Oklahoma. d. NCI-Shawnee Limited Partnership, BMC Development No. 1 Limited Partnership and Future Acquisition 1995, Ltd. are qualified to do business in the State of Nevada. 124 SCHEDULE III ADMINISTRATIVE DETAILS BANK OF AMERICA, N.A. Percentage: 50% Lending office for Base Rate Loans: 901 Main Street Dallas, Texas 75202 Attention: Vicky Wages Telephone: 214-290-8373 Facsimile: 214-209-9254 Lending Office for LIBO Rate Loans: 901 Main Street Dallas, TX 75202 Attention: Vicky Wages Telephone: 214-290-8373 Facsimile: 214-209-9254 BANK ONE, TEXAS, NA Percentage: 30% Lending office for Base Rate Loans: Bank One, Texas, NA 910 Travis TX2-4330 Houston, TX 77002 Credit Contact: Christine M. Macan, Vice President Telephone: 713-751-3484 Facsimile: 713-751-3544 Operations Contact: Eleanor Martinez, Participation/Syndication Analyst 125 500 Throckmorton West Complex PG6 Fort Worth, TX 76102 Telephone: 817-884-4535 Facsimile: 817-884-4651 Lending Office for LIBO Rate Loans: Bank One, Texas, NA 910 Travis TX2-4330 Houston, TX 77002 Credit Contact: Christine M. Macan, Vice President Telephone: 713-751-3484 Facsimile: 713-751-3544 Operations Contact: Eleanor Martinez, Participation/Syndication Analyst Bank One, Texas, NA 500 Throckmorton West Complex PG6 Fort Worth, TX 76102 Telephone: 817-884-4535 Facsimile: 817-884-4651 WELLS FARGO BANK (TEXAS), NA Percentage: 20% Lending office for Base Rate Loans: Wells Fargo Bank (Texas), NA 1000 Louisiana Third Floor Houston, TX 77002 Credit Contact: Brian K. Otis, Assistant Vice President Telephone: 713-819-1316 Facsimile: 713-739-1087 Operations Contact: Stephen Elring, Assistant Vice President 201 Third 126 San Francisco, CA 94103 Telephone: 415-477-5425 Facsimile: 415-979-0675 Lending Office for LIBO Rate Loans: Wells Fargo Bank (Texas), NA 1000 Louisiana Third Floor Houston, TX 77002 Credit Contact: Brian K. Otis, Assistant Vice President Telephone: 713-819-1316 Facsimile: 713-739-1087 Operations Contact: Stephen Elring, Assistant Vice President 201 Third San Francisco, CA 94103 Telephone: 415-477-5425 Facsimile: 415-979-0675 127 SCHEDULE IV EXISTING MORTGAGES A. Mortgage, Deed of Trust, Assignment, Security Agreement and Financing Statement from Mortgagor to Bank of America was recorded and filed as follows:
ORIGINAL AMENDMENT JURISDICTION FILE NO. DATE FILE NO. DATE ------------ -------- ---- -------- ---- 1. LOUISIANA Ouachita Parish, Volume 1630, Page 541 12/2/98 Vol. 1633, Page 784 12/17/98 Louisiana File No. 1243297 File No. 1244887 (Mortgage) Volume 391, Page 341 1/21/99 File No. 1247111 (Conveyance) Vermillion Parish, File No. 9813248 12/2/98 File No. 9813911 12/17/98 Louisiana (Mortgage) File No. 9900755 1/21/99 (Conveyance) 2. MISSISSIPPI Clarke County, DT Deed Book 216, Page 7 10/22/98 Mississippi Wayne County, DT Deed Book 959, Page 358 10/22/98 Mississippi 3. NEW MEXICO Lea County, Book 901, Page 276 8/24/98 Book 924, Page 492 12/17/98 New Mexico File No. 36851 Roosevelt County, Book 53, Page 824 10/23/98 Book 55, Page 193 12/17/98 New Mexico 4. OKLAHOMA Grant County, Book 515, Page 699 8/24/98 Book 518, Page 039 12/17/98 Oklahoma File No. 2088
128
ORIGINAL AMENDMENT JURISDICTION FILE NO. DATE FILE NO. DATE ------------ -------- ---- -------- ---- Marshall County, Book 673, Page 659 8/24/98 Book 679, Page 117 12/17/98 Oklahoma File No. SF-4998 Pottawatomie County, Book 2835, Page 232 8/24/98 Book 2883, Page 278 12/17/98 Oklahoma File No. 17177 Pottawatomie County, Book 2859, Page 101 10/20/98 Oklahoma Rec. # 1998-14245 5. TEXAS Austin County, File No. 994053 7/13/98 Texas Bastrop County, Volume 955, Page 831 12/31/98 Texas File No. 199814768 Brazos County, Volume 3323, Page 195 12/1/98 Texas File No. 0672275 Volume 3359, Page 119 1/7/99 File No. 0675214 Burleson County, Volume 163, Page 550 12/1/98 Texas File No. 0003900 Volume 164, Page 175 12/31/98 File No. 0004256 Carson County, Volume 289, Page 756 8/24/98 Vol. 292, Page 780 12/17/98 Texas File No. 0001984 Crane County, Volume 400, Page 89 10/26/98 Vol. 401, Page 732 12/17/98 Texas File. No. 76025, File No. 76282 Dawson County, Volume 240, Page 239; 10/22/98 Vol. 240, Page 727 12/17/98 Texas File No. 98-3130 File No. 3634 Ector County, Volume 1433, Page 787 12/1/98 Vol. 1436, Page 0502 12/17/98 Texas File No. 16298 File No. 17011 Fayette County, Volume 1046, Page 414 12/1/98 Texas Volume 1049, Page 369 12/31/98 File No. 98-7363 Gray County, Volume 734, Page 398 8/24/98 Vol. 739, Page 189 12/17/98 Texas File No. 141597
129
ORIGINAL AMENDMENT JURISDICTION FILE NO. DATE FILE NO. DATE ------------ -------- ---- -------- ---- Harris County, Doc. No. ###-##-#### 10/16/98 Doc. No. ###-##-#### 12/17/98 Texas 300235009 T328911 T443676 Hutchinson County, Volume 902, Page 263 8/24/98 Vol. 921, Page 213 12/17/98 Texas File No. 0290432 Jackson County, Volume 129, Page 212 12/1/98 Texas File No. 26666 Volume 131,Page 228 1/5/99 Jasper County, Volume 222, Page 1 10/22/98 File No. 125171 12/17/98 Texas Document No. 123827 Live Oak County, Volume 360, Page 1 10/22/98 Vol. 362, Page 453 12/17/98 Texas Reg. No. 0141952 File No. 142714 Lubbock County, Volume 5965, Page 10 8/24/98 Vol. 6099, Page 187 12/17/98 Texas File No. 43783 Matagorda County, Volume 521,Page 570 12/1/98 Vol. 523, Page 559 12/17/98 Texas File No. 988068 File No. 988487 McMullen County, Volume 138, Page 146 12/1/98 Vol. 138, Page 385 12/17/98 Texas File No. 54861 File No. 54917 Midland County, Volume 1593, Page 430 8/24/98 Vol. 1628, Page 32 12/17/98 Texas File No. 24121 Montgomery County, Doc. No. 99047460; 6/14/99 545-00-0999 6/14/99 Texas 545-00-0960 Montgomery County, File No. 9947462 6/14/99 Texas Moore County, Volume 499, Page 636 8/24/98 Vol. 504, Page 469 12/17/98 Texas File No. 131996 San Patricio County, File No. 467305 10/22/98 File No. 469028 12/17/98 Texas Waller County, File No. 994753 8/5/99 Texas Wharton County, Volume 299, Page 423 0/26/98 Vol. 305, Page 545 12/17/98 Texas Document No. 190511 File No. 191762 Wichita County, Volume 2030, Page 280 8/24/98 Vol. 2058, Page 321 12/17/98 Texas File No. 24402
130
ORIGINAL AMENDMENT JURISDICTION FILE NO. DATE FILE NO. DATE ------------ -------- ---- -------- ---- 6. CALIFORNIA Kern County, Doc. 0198114687 8/24/98 Doc. 0198184114 12/30/98 California Doc. 0198118749 8/31/98
- ---------------------------- 131 SCHEDULE V HEDGING AGREEMENTS o Approximately 50% (or 150,000 MMBtu per month) of current gas production is hedged through calendar year 1999 as follows: - Collar hedge for 65,000 MMBtu based on the Southern California Border Index with a floor of $2.00 and a cap of $2.45. - Collar hedge for 85,000 MMBtu based on the Houston Ship Channel Index with a floor of $2.00 and a cap of $2.04. o Approximately 50% of current oil production is hedged as follows: - 22,800 barrels beginning October 1999 declining each month to 18,750 barrels in September 2000 at a floor of $18.00 and a cap of $20.75. - 27,400 barrels beginning October 1999 declining each month to 23,250 barrels in September 2000 at a floor of $18.00 and a cap of $23.08. o For the 12 month period October 2000 - September 2001 a straight swap is in place for approximately 25% of current monthly oil production at $17.55 per barrel. (18,525 barrels beginning 10/00 declining to 16,200 barrels in 9/01) o For the 12 month period October 2000 - September 2001 a straight swap is in place for approximately 25% of current monthly oil production at $18.05 per barrel. (22,825 barrels beginning 10/00 declining to 18,100 barrels in 9/01) 132 SCHEDULE VI UPDATED TITLE SEARCHES TEXAS Phil Wahl - 1. Crane County - Atlantic State Nos. 1-8, Johnson State, Tubb State Wells 2. Wharton County - Rasmussen No. 2 Well 3. Jasper County - Mixson Unit No. 1 and Mixson No. 1 4. [N/A] 5. San Patricio County - Waldo Haisley No. 1 GU 6. Jackson County - Bright Falcon Prospect, Hillman No. 1 Well 7. Brazos County - Kuder Prospect, Kuder #2 Well 8. McMullen County - San Miguel Prospect, Clifton Wheeler 3, 8, 9 and 15, San Miguel Creek Gu, Louis Gubbels No. 24 9. Matagorda County - Turtle Creek Prospect, Don L. Batchelder Gu No. 1 10. Brazos County - Riverside Campus Prospect, Riverside Campus 3 and 6 Oil Units 11. Ector County - Cowden South Prospect, Lyda Mae Johnson Nos. 1A and 2, JE Bagley Nos. 1, 2, 11, 12, 14 and 15A 12. Harris and Montgomery Counties - Cross Creek Field 13. Austin County - Post-closing opinion for Raccoon Bend Gerald E. Thornton, Jr. (Matthews and Branson) - 1. Moore County - Panhandle LOUISIANA Jim Mansfield (Liskow and Lewis) - 1. Vermilion Parish - North Leroy Field Jeff Townsend - 1. Ouachita Parish - Cheniere Cadeville 133 OKLAHOMA Michael Burris - 1. Pottawatomie County - Shawnee Townsite (Skinner) Unit CALIFORNIA Tim Lewy - 1. Kern County - South Coles Levee 134 EXHIBIT A FORM OF SECOND AMENDED AND RESTATED SECURED PROMISSORY NOTE $_____________ September 30, 1999 FOR VALUE RECEIVED, the undersigned, BARGO ENERGY COMPANY, a Texas corporation (the "Borrower"), promises to pay to the order of ___________________ (the "Lender") on the Stated Maturity Date the principal sum of ___________________________ DOLLARS ($_________) or, if less, the aggregate unpaid principal amount of all Loans (whether or not shown on the schedule attached hereto and any continuation thereof) made by the Lender pursuant to that certain Second Amended and Restated Credit Agreement, dated as of September 30, 1999 (together with all amendments and other modifications, if any, from time to time thereafter made thereto, the "Credit Agreement"), among the Borrower, certain financial institutions and the Lender and Bank of America, N.A., as administrative agent (the "Administrative Agent"). The Borrower also promises to pay interest on the unpaid principal amount hereof from time to time outstanding from the date hereof until maturity (whether by acceleration or otherwise) and, after maturity, until paid, at the rates per annum and on the dates specified in the Credit Agreement. Payments of both principal and interest are to be made in lawful money of the United States of America in same day or immediately available funds to the account designated by the Administrative Agent pursuant to the Credit Agreement. This Note, together with the other Notes made and given in favor of the other Lenders, amends, restates and consolidates those note(s) previously made and given by Future Petroleum Corporation, a Utah corporation, to which the Borrower is the successor-by-merger. This Note is one of the Notes referred to in, and evidences Indebtedness incurred under, the Credit Agreement, to which reference is made for a description of the security for this Note and for a statement of the terms and conditions on which the Borrower is permitted and required to make prepayments and repayments of principal of the Indebtedness evidenced by this Note and on which such Indebtedness may be declared to be immediately due and payable. Unless otherwise defined, terms used herein have the meanings provided in the Credit Agreement. 135 All parties hereto, whether as makers, endorsers, or otherwise, severally waive presentment for payment, demand, protest and notice of dishonor. THIS NOTE HAS BEEN DELIVERED IN DALLAS, TEXAS AND SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF TEXAS. BARGO ENERGY COMPANY, a Texas corporation By: --------------------------------------- Name: Jonathan M. Clarkson Title: President 136 LOANS AND PRINCIPAL PAYMENTS
Amount LIBO Amount of Principal Unpaid Principal of Loan Made Rate Repaid Balance ------------ -------- ------------------- ---------------- Interest Base LIBO Base LIBO Notation Date Period Rate Rate Rate Rate Total Made By =================================================================================================================== - ------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------- ===================================================================================================================
137 EXHIBIT B FORM OF SECURITY AGREEMENT 138 EXHIBIT C-1 FORM OF BORROWING REQUEST BANK OF AMERICA, N.A., as Administrative Agent 901 Main Street, 14th Floor Dallas, Texas 75202 Telecopy: ------------- Attention: [Name] [Title] Re: Bargo Energy Company Ladies and Gentlemen: This Borrowing Request is delivered to you pursuant to Section 2.3 of the Second Amended and Restated Credit Agreement, dated as of September 30, 1999 (together with all amendments, if any, from time to time made thereto, the "Credit Agreement"), among Bargo Energy Company, a Texas corporation (the "Borrower"), certain financial institutions (the "Lenders") and BANK OF AMERICA, N.A., as administrative agent for the Lenders (the "Administrative Agent"). Unless otherwise defined herein or the context otherwise requires, terms used herein have the meanings provided in the Credit Agreement. The Borrower hereby requests that a Loan be made in the aggregate principal amount of $__________ on __________, 19__ as a [LIBO Rate Loan having an Interest Period of ____ months] [Base Rate Loan]. The Borrower hereby acknowledges that, pursuant to Section 6.3.2 of the Credit Agreement, each of the delivery of this Borrowing Request and the acceptance by the Borrower of the proceeds of the Loans requested hereby constitute a representation and warranty by the Borrower that, on the date of such Loans, and before and after giving effect thereto and to the application of the proceeds therefrom, all statements set forth in Section 6.3.1 are true and correct in all material respects (unless stated to relate solely to an earlier date, in which case such statements shall be true and correct as of such earlier date). The Borrower agrees that if prior to the time of the borrowing requested hereby any matter certified to herein by it will not be true and correct at such time as if then made, it 139 will immediately so notify the Administrative Agent. Except to the extent, if any, that prior to the time of the borrowing requested hereby the Administrative Agent shall receive written notice to the contrary from the Borrower, each matter certified to herein shall be deemed once again to be certified as true and correct at the date of such borrowing as if then made. Please wire transfer the proceeds of the borrowing to the following account[s] ______________________________. IN WITNESS WHEREOF, the Borrower has caused this request to be executed and delivered by its duly Authorized Officer as of __________ __, 19__. BARGO ENERGY COMPANY, a Texas corporation By: -------------------------------------- Name: Jonathan M. Clarkson Title: President 140 EXHIBIT C-2 FORM OF CONTINUATION/CONVERSION NOTICE Bank of America, N.A., as Administrative Agent 901 Main Street, 14th Floor Dallas, Texas 75202 Telecopy: -------------- Attention: [Name] [Title] Re: Bargo Energy Company Ladies and Gentlemen: This Continuation/Conversion Notice is delivered to you pursuant to Section 2.4 of the Second Amended and Restated Credit Agreement, dated as of September 30, 1999 (together with all amendments, if any, from time to time made thereto, the "Credit Agreement"), Bargo Energy Company, a Texas corporation (the "Borrower"), certain financial institutions (the "Lenders") and Bank of America, N.A., as agent for the Lenders (the "Administrative Agent"). Unless otherwise defined herein or the context otherwise requires, terms used herein have the meanings provided in the Credit Agreement. The Borrower hereby requests that on _______, 19__, (1) $_________ of the presently outstanding principal amount of the Loans originally made on _________, 19__ [and $_______ of the presently outstanding principal amount of the Loans originally made on _______, 19__], (2) and all presently being maintained as [LIBO Rate Loans] [Base Rate Loans], (3) be [converted into] [continued as], (4) [LIBO Rate Loans having an Interest Period of ____ months] [Base Rate Loans]. 141 The Borrower hereby: (a) certifies and warrants that no Default has occurred and is continuing; and (b) agrees that if prior to the time of such continuation or conversion any matter certified to herein by it will not be true and correct at such time as if then made, it will immediately notify the Lender. Except to the extent, if any, that prior to the time of the continuation or conversion requested hereby the Administrative Agent shall receive written notice to the contrary from the Borrower, each matter certified to herein shall be deemed to be certified at the date of such continuation or conversion as if then made. IN WITNESS WHEREOF, the Borrower has caused this request to be executed and delivered by its duly Authorized Officer as of __________ __, 19__. BARGO ENERGY COMPANY, a Texas corporation By: -------------------------------------- Name: Jonathan M. Clarkson Title: President 142 EXHIBIT D FORM OF GUARANTY 143 EXHIBIT E-1 FORM OF MORTGAGE 144 EXHIBIT E-2 FORM OF CALIFORNIA MORTGAGE 145 EXHIBIT F-1 FORM OF PLEDGE AGREEMENT (STOCK) 146 EXHIBIT F-2 FORM OF PLEDGE AGREEMENT (PARTNERSHIP INTERESTS) 147 EXHIBIT G LENDER ASSIGNMENT NOTICE BANK OF AMERICA, N.A., as Administrative Agent 901 Main Street, 14th Floor Dallas, Texas 75202 Telecopy: --------------- Attention: [Name] [Title] Re: Bargo Energy Company Ladies and Gentlemen: We refer to clause (b) of Section 11.11.1 of the Second Amended and Restated Credit Agreement, dated as of September 30, 1999 (together with all amendments and other modifications, if any, from time to time thereafter made thereto, the "Credit Agreement"), among Bargo Energy Company, a Texas corporation (the "Borrower"), certain financial institutions (the "Lenders") and BANK OF AMERICA, N.A., as agent for the Lenders (the "Administrative Agent"). Unless otherwise defined herein or the context otherwise requires, terms used herein have the meanings provided in the Credit Agreement. This notice is delivered to you pursuant to clause (b) of Section 11.11.1 of the Credit Agreement and also constitutes notice to each of you, pursuant to clause (a) of Section 11.11.1 of the Credit Agreement, of the assignment and delegation to _______________ (the "Assignee") of ___% (and the Assignor hereby assigns and delegates to the Assignee __%_) of the Loans and Commitments of _____________ (the "Assignor") outstanding under the Credit Agreement on the date hereof. After giving effect to the foregoing assignment and delegation, the Assignor's and the Assignee's Percentages for the purposes of the Credit Agreement are set forth on Schedule I hereto. The Assignor makes such assignment and delegation without any representations, warranties or recourse whatsoever except that the Assignor is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any adverse claim. [Add paragraph dealing with accrued interest with respect to Loans assigned.] The Assignee hereby acknowledges and confirms that it is an Eligible Assignee and it has received a copy of the Credit Agreement and the other Loan Documents and the 148 exhibits related thereto, together with copies of the documents which were required to be delivered under the Credit Agreement as a condition to the making of the Credit Extensions thereunder. Except as otherwise provided in the Credit Agreement, effective as of the date of delivery hereof (a) the Assignee (i) shall be deemed automatically to have become a party to the Credit Agreement, have all the rights and obligations of a "Lender" under the Credit Agreement and the other Loan Documents as if it were an original signatory thereto to the extent specified in the second paragraph hereof; and (ii) agrees to be bound by the terms and conditions set forth in the Credit Agreement and the other Loan Documents as if it were an original signatory thereto; and (b) the Assignor shall be released from its obligations under the Credit Agreement and the other Loan Documents to the extent specified in the second paragraph hereof. The Assignor and the Assignee hereby agree that the [Assignor] [Assignee] will pay to the Administrative Agent the processing fee referred to in Section 11.11.1 of the Credit Agreement upon the delivery hereof. Administrative information for the Assignee is set forth in Schedule II hereto. 149 This notice may be executed by the Assignor and Assignee in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute one and the same instrument. [ASSIGNOR] By: ---------------------------------------- Title: [ASSIGNEE] By: ---------------------------------------- Title: CONSENTED TO AND ACKNOWLEDGED: BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT By: --------------------------------- Title: BARGO ENERGY COMPANY By: --------------------------------- Title: 150 SCHEDULE I TO LENDER ASSIGNMENT NOTICE ASSIGNOR'S ADJUSTED PERCENTAGES: Commitment and Loans: __% Letters of Credit: __% ASSIGNEE'S PERCENTAGES: Commitment and Loans: __% Letters of Credit: __%
151 SCHEDULE II TO LENDER ASSIGNMENT NOTICE ADDRESS FOR NOTICES: Name of Assignee: --------------------- 152 EXHIBIT H FORM OF OPINIONS OF COUNSEL TO THE BORROWER 153 EXHIBIT I-1 FORM OF PRE-CLOSING TITLE OPINIONS OF SPECIAL TITLE COUNSEL TO THE BORROWER Form of Pre-Closing Title Opinion [Letterhead of Title Counsel] [Date] Bank of America, N.A., as Administrative Agent c/o Mayer, Brown & Platt 700 Louisiana Street Suite 3600 Houston, TX 77002 Attention: Kevin L. Shaw PRE-CLOSING TITLE OPINION Interests of [Bargo Energy Company] [Future Acquisition 1995, Ltd.]1, County, ----- -------- Gentlemen: This opinion is given in connection with the Second Amended and Restated Credit Agreement ("Credit Agreement") dated as of September 30, 1999, among Bargo Energy Company, a Texas corporation, as the borrower [("Borrower")] [("Mortgagor")]2/, the various financial institutions as are now or may hereafter become parties thereto (collectively, the "Lenders") and Bank of America, N.A., formerly Bank of America National Trust and Savings Association, as Administrative Agent for the Lenders (in such capacity, "Mortgagee"). Capitalized terms used in this opinion but not expressly defined herein shall have the respective meanings given to them in the Credit Agreement. - ---------------------- 1/ Select entity as appropriate. 2/ Select entity as appropriate. 154 Please refer to our [Preliminary Title Opinion] ("Title Opinion") dated __________, 199__, covering lands more particularly described therein (collectively, the "Lands"). In addition to the title materials examined as listed in the Title Opinion, we have examined copies of the following documents: [HERE LIST DOCUMENTS EXAMINED] We are of the opinion that: A. Fully executed originals of items _____________________ should be filed for record in the office of the [Clerk] of _____________ County of the State of ______________. Upon the accomplishment of such recordation and filings, the [Borrower] [Mortgagor] will constitute, as security for (i) Credit Extensions, including the Loans made and to be made pursuant to the Credit Agreement and to be evidenced by the Notes, and (ii) the obligations of [Borrower] [Mortgagor] and its Affiliates to the Lenders and their Affiliates under Hedging Agreements to which they are or may become parties, a legally valid and enforceable first mortgage lien on the interests of [Borrower] [Mortgagor] in the Lands and a first perfected security interest in the interest of [Borrower] [Mortgagor] in all accounts and proceeds resulting from the sale at the wellhead of minerals to be severed from the aforesaid interests of [Borrower] [Mortgagor]. No other or further filings or recordings will be required to establish, perfect and maintain such lien and security interest, except as expressly set forth herein, subject to our comments and requirements set forth hereinbelow. B. Following execution of the documents listed as items ____ _____________________ and recordation of the documents listed as ______________________________________ (in the order listed, and assuming that no intervening adverse instruments are recorded), the interests of [Borrower] [Mortgagor] and covered by your Mortgage, will be as follows:
1. [Tract 1:] Operating Net Revenue Interest Interest --------- ----------- [Borrower][Mortgagor] --------- -----------
[HERE LIST INTERESTS IN EACH TRACT] C. Under the applicable laws of the State of _____________, including applicable recording, filing and registration laws and regulations, no mortgage, documentary, stamp or similar taxes are payable in connection with the execution, delivery 155 or recording of the Mortgage or the transactions contemplated thereby, insofar as the Mortgage and the transactions relate to property located in or subject to the laws of the State of _______________, other than statutory recording and filing fees to be paid upon the recording and filing of the Mortgage and related UCC-1. D. Under the laws of the State of _______________, the priority of the Mortgage, to the extent the Mortgage secures obligatory future advances and is a conveyance of or creates a lien against a real property interest, is determined by the date on which the Mortgage is recorded. E. Under the laws of the State of _______________ and local jurisdictions therein, there is no statutory or regulatory lien in favor of any governmental entity for (a) liability under _________ environmental laws or regulations, or (b) damages (including natural resources damages) arising from or costs incurred by such governmental entity in response to the release of a hazardous or toxic waste, substance, pollutant, constituent, or other substance into the environment which, if not of record in the mortgage records in the County where such lands are located, would have priority over the Mortgage [HERE STATE EXCEPTIONS, AS APPLICABLE]. F. Under the laws of the State of _____________ and local jurisdictions therein, there are no statutory and regulatory requirements relating to the transfer of ownership or operation or sale of premises upon which there are hazardous or toxic wastes, or upon which there are certain facilities which indicate a likelihood of such wastes (except for various requirements that regulatory bodies receive notification when an environmental permittee, licensee, or notifier changes) which require (i) notification of the State or of the local jurisdiction of such transfer, or sale, (ii) certification that there has been no discharge of toxic or hazardous waste or other substances, or (iii) in the event of a discharge, the assumption prior to such transfer of ownership, or operation, or sale, of responsibility by the lender for the undertaking of remedial measures to alleviate environmental contamination resulting from such discharge. G. It is necessary that a continuation statement be filed regarding the Financing Statement within six (6) months prior to the end of each five (5) year period. This finding of title, and mortgaged interests of [Borrower] [Mortgagor] in your favor, is subject to all unsatisfied (in whole or in part) Requirement of the Title Opinion, as well as all limitations, comments and remarks set forth therein and herein. After the proper execution and recordation of the documents listed as ______________________________________, as required above, it will be necessary to examine the Public Records of ______________________ County, _______________, to insure that there have been no adverse alienations, liens or encumbrances recorded or filed, or suffered to be recorded or filed, since the certification dates of the Abstracts examined in connection with the rendition of the Title Opinion. We will furnish you a 156 Post-Closing Title Opinion after execution of the documents listed above as _________________________________________ and recordation of the documents listed above as _________________________________, completion of the records search set forth above, and our examination of the documentation in connection with same, such opinion to be substantially in the form of that attached hereto. Very truly yours, -------------------------- 157 EXHIBIT I-2 FORM OF POST-CLOSING TITLE OPINIONS OF SPECIAL TITLE COUNSEL TO THE BORROWER Form of Post-Closing Title Opinion [Letterhead of Title Counsel] _______________, 199__ Bank of America, N.A., as Administrative Agent c/o Mayer, Brown & Platt 700 Louisiana Street Suite 3600 Houston, TX 77002 Attention: Kevin L. Shaw POST-CLOSING TITLE OPINION Interests of [Bargo Energy Company] [Future Acquisition 1995, Ltd.]1/ __________ County, ___________ Gentlemen: This opinion is rendered in connection with the closing under that certain Second Amended and Restated Credit Agreement dated as of September 30, 1999 (the "Credit Agreement"), among Bargo Energy Company, a Texas corporation, as the borrower [(the "Borrower")] [(the "Mortgagor")]2/, the various financial institutions as are now or may hereafter become parties thereto (collectively, the "Lenders") and Bank of America, N.A., formerly Bank of America National Trust and Savings Association, as Administrative Agent for the Lenders (in such capacity, "Mortgagee"). Capitalized terms used in this opinion but not expressly defined herein shall have the respective meanings given to them in the Credit Agreement. - --------------------- 1/ Select entity as appropriate. 2/ Select entity as appropriate. 158 Please refer to our [here list prior Title Opinion] ("Title Opinion") dated __________, 199__, covering lands more particularly described therein (collectively the "Lands"). In addition to the title materials examined as listed in the Title Opinion, we have examined executed originals of the following documents: [HERE LIST DOCUMENTS EXAMINED] We are of the opinion that: A. The Mortgage constitutes, as security for (i) Credit Extensions, including the Loans made and to be made pursuant to the Credit Agreement and evidenced by the Notes, and (ii) the obligations of the [Borrower][Mortgagor] and its Affiliates to the Lenders and their Affiliates under Hedging Agreements to which they are or may become parties, a legally valid and enforceable first mortgage lien on the interests of the ("[Borrower] [Mortgagor]") in the Lands, and a first perfected security interest in the interests of [Borrower] [Mortgagor] in all accounts and proceeds resulting from the sale at the wellhead of minerals to be severed from the aforesaid interests of [Borrower] [Mortgagor]. No other or further filings or recordings are required to establish, perfect and maintain such lien and security interest, except as expressly set forth herein, subject to our comments and requirements set forth hereinbelow. B. It is our opinion that the interests of [Borrower] [Mortgagor], and covered by your Mortgage are as follows:
1. [Tract 1:] Operating Net Revenue Interest Interest --------- ----------- [Borrower][Mortgagor] --------- -----------
[HERE LIST INTERESTS IN EACH TRACT] C. Under the applicable laws of the State of _____________, including applicable recording, filing and registration laws and regulations, no mortgage, documentary, stamp or similar taxes are payable in connection with the execution, delivery or recording of the Mortgage or the transactions contemplated thereby, insofar as the Mortgage and the transactions relate to property located in or subject to the laws of the State of ________________, other than statutory recording and filing fees which were paid upon the recording and filing of the Mortgage and UCC-1. D. Under the laws of the State of ________________, the priority of the Mortgage, to the extent the Mortgage secures obligatory future advances and is a 159 conveyance of or creates a lien against a real property interest, was established as of ___________, 199__. E. Under the laws of the State of ________________ and local jurisdictions therein, there is no statutory regulatory lien in favor of any governmental entity for (a) liability under ______ environmental laws or regulations, or (b) damages (including natural resources damages) arising from or costs incurred by such governmental entity in response to the release of a hazardous or toxic waste, substance, pollutant, constituent, or other substance into the environment which, if not of record in the mortgage records in the County where such lands are located, would have priority over the Mortgage [HERE LIST EXCEPTIONS, AS APPLICABLE]. F. Under the laws of the State of ________________ and local jurisdictions therein, there are no statutory and regulatory requirements relating to the transfer of ownership or operation or sale of premises upon which there are hazardous or toxic wastes, or upon which there are certain facilities which indicate a likelihood of such wastes (except for various requirements that regulatory bodies receive notification when an environmental permittee, licensee, or notifier changes) which require (i) notification of the State or of the local jurisdiction of such transfer, or sale, (ii) certification that there has been no discharge of toxic or hazardous waste or other substances, or (iii) in the event of a discharge, the assumption prior to such transfer of ownership, or operation, or sale, of responsibility by the lender for the undertaking of remedial measures to alleviate environmental contamination resulting from such discharge. G. The Mortgage contains the terms and provisions necessary to enable the Lender, following a default under the Mortgage, to exercise remedies which are customarily available to mortgagees under mortgages encumbering real property under the laws of the State of ________________. H. The form of financing statement described in item ___ of this opinion ("Financing Statement") is sufficient in form to perfect the security interest in [Borrower's] [Mortgagor's] interest in the Mortgaged Property not considered real property or fixtures, to the extent that such Mortgaged Property is deemed to be located in the State of ________________, and a security interest in such Mortgaged Property can be perfected by the filing of a financing statement. To the extent that the Mortgaged Property owned by [Borrower] [Mortgagor] not considered real property or fixtures is deemed to be located in the State of ________________ and security interests in the various types of such Mortgaged Property described in the Financing Statement can be perfected by filing in the State of ________________ under the provisions of Article 9 of the Uniform Commercial Code, such security interests have been perfected by filing of the Financing Statement in the Office of the ________________ Secretary of State. I. The Lender is not required, solely as a result of the transactions contemplated by the Loan Documents, to qualify to do business in the State of 160 ________________ in order to exercise its rights under the Mortgage. Solely as a result of the transactions contemplated by the Loan Documents, the Lender will not become subject to any taxes or fees of any kind under the laws of the State of ________________. J. The payment by the Borrower and receipt by the Lender of the aggregate principal, interest and fees to be paid, and the method of calculation and payment thereof, pursuant to the Loan Documents is not usurious under, or otherwise in violation of, the laws of the State of ________________. K. Certain rights, remedies and waivers contained in the Loan Documents which relate to the Mortgaged Property may be rendered ineffective, or limited by applicable State of ________________ laws or judicial decisions (other than those reflected in the qualifications and assumptions set forth herein) governing such provisions, but in our opinion such laws and judicial decisions do not make the Loan Documents invalid as a whole, and there exist, in the Loan Documents or pursuant to applicable law, legally adequate remedies for a realization of the principal benefits and/or security reasonably intended to be provided by the Loan Documents. L. It is necessary that a continuation statement be filed regarding the Financing Statement within six (6) months prior to the end of each five (5) year period. M. This finding of title in the interests of [Borrower] [Mortgagor] mortgaged in your favor is subject to all unsatisfied (in whole or in part) Requirements of the Title Opinion, as well as all limitations, comments and remarks set forth therein and herein. Very truly yours, -------------------------- 161 EXHIBIT J ISSUANCE REQUEST BANK OF AMERICA, N.A. 901 Main Street, 14th Floor Dallas, Texas 75202 Telecopy: ____________ Attention: [Name] [Title] BARGO ENERGY COMPANY Ladies and Gentlemen: This Issuance Request is delivered to you pursuant to Section 4.1 of the Second Amended and Restated Credit Agreement, dated as of September 30, 1999 (together with all amendments, if any, from time to time made thereto, the "Credit Agreement"), between Bargo Energy Company, a Texas corporation (the "Borrower"), certain financial institutions (the "Lenders") and BANK OF AMERICA, N.A., a national banking association, as agent for the Lenders (the "Administrative Agent"). Unless otherwise defined herein or the context otherwise requires, terms used herein have the meanings provided in the Credit Agreement. The Borrower hereby requests that on _________, 19__ (the "Date of Issuance") you 3/[issue a Letter of Credit on ______________, 19__ in the initial Stated Amount of $_______________ with a Stated Expiry Date (as defined therein) of ______________, 19__] [extend the Stated Expiry Date (as defined under Irrevocable Standby Letter of Credit No.__, issued on __________________________, 19 __, in the initial Stated Amount of $______________) to a revised Stated Expiry Date (as defined therein) of _________________, 19__]. - ---------------------------- 3 Insert as appropriate. 162 The beneficiary of the requested Letter of Credit will be 4/_______________________________, and such Letter of Credit will be in support of 5/________________________________. The Borrower hereby acknowledges that, pursuant to Section 6.3.2 of the Credit Agreement, each of the delivery of this Issuance Request and the [issuance][extension] of the Letter of Credit requested hereby constitutes a representation and warranty by the Borrower that, on such date of [issuance] [extension] all statements set forth in Section 6.3.2 are true and correct in all material respects (unless such statements relate solely to an earlier date, in which case such statements shall be true and correct as of such earlier date). The Borrower agrees that if, prior to the time of the 6/[issuance] [extension] of the Letter of Credit requested hereby, any matter certified to herein by it will not be true and correct at such time as if then made, it will immediately so notify the Administrative Agent. Except to the extent, if any, that prior to the time of the issuance or extension requested hereby Administrative Agent shall receive written notice to the contrary from the Borrower, each matter certified to herein shall be deemed to be certified at the date of such issuance or extension. IN WITNESS WHEREOF, the Borrower has caused this request to be executed and delivered by its duly Authorized Officer as of __________ __, 19__. BARGO ENERGY COMPANY By ------------------------------------- Name: Title: - --------------------- 4/ Insert name and address of beneficiary. 5/ Insert description of supported Indebtedness or other obligations and name of agreement to which it relates. 6/ Complete as appropriate. EX-10.20 4 1ST AMEND.TO 2ND AMENDED SHAREHOLDERS' AGREEMENT 1 BARGO ENERGY COMPANY FIRST AMENDMENT TO SECOND AMENDED AND RESTATED SHAREHOLDERS' AGREEMENT This First Amendment ("Amendment") to the Second Amended and Restated Shareholders' Agreement is effective for all purposes as of August 11, 1999, and evidences the following: WHEREAS, B. Carl Price, Don Wm. Reynolds, Energy Capital Investment Company PLC, an English investment company, EnCap Equity 1994 Limited Partnership, a Texas limited partnership, BER Energy Resources, Ltd., a Texas limited partnership (formerly Bargo Energy Resources, Ltd.), TJG Investments, Inc., a Texas corporation, BEC Energy Company, a Texas general partnership (formerly Bargo Energy Company), Tim J. Goff, Thomas Barrow, James E. Sowell, BOC Operating Corporation, a Texas corporation (formerly Bargo Operating Company, Inc.), EnCap Energy Capital Fund III-B, L.P., a Texas limited partnership, BOCA Energy Partners, L.P., a Texas limited partnership, EnCap Energy Fund III, L.P., a Texas limited partnership, Kayne Anderson Energy Fund, L.P., a Delaware limited partnership, BancAmerica Capital Investors SBIC I, L.P., a Delaware limited partnership, Eos Partners, L.P., a Delaware limited partnership, Eos Partners SBIC, L.P., a Delaware limited partnership, Eos Partners SBIC II, L.P., a Delaware limited partnership, and SGC Partners II LLC, a Delaware limited partnership, entered into the Second Amended and Restated Shareholders' Agreement, dated May 14, 1999 (the "Agreement"); WHEREAS, the parties to the agreement desire to amend the agreement as herein provided; NOW THEREFORE, the parties hereto, for good and valuable consideration, intending to be legally bound, hereby agree as follows: Section 1. DEFINED TERMS. The terms capitalized herein have the meanings given to them in the Agreement, unless otherwise defined herein. Section 2. BOARD OF DIRECTORS. (a) The first sentence of Section 2(a) is hereby replaced with the following two sentences: "For so long as any of the Preferred Shares remain outstanding: each of (i) EOS, (ii) Kayne and (iii) BACI (or the successor or transferee of any such party), shall be entitled to name one (1) Designated Nominee for Class III of the Company's Board of Directors; the Bargo Group (including successors and transferees of its members) shall be entitled to name two (2) Designated Nominees, and SGCP shall be entitled to name one (1) Designated Nominee, for Class II of the Company's Board of Directors; and EnCap (including successors and transferees of its members) shall be entitled to name two (2) Designated Nominees for Class I of the Company's Board of Directors. In addition, for so long as he is an employee of the Company, Jonathan M. Clarkson shall be a Designated Nominee in Class I of the Company's Board of Directors." 2 (b) Section 2(b)(i) of the Agreement is amended to read in its entirety as follows: "(i) to use its reasonable best efforts for so long as Jonathan M. Clarkson is a Designated Nominee to cause Company's Board of Directors to be composed of eight members and for so long as Mr. Clarkson is not a Designated Nominee to cause the Company's Board of Directors to be composed of seven members". Section 3. NO OTHER CHANGES. This amendment shall be incorporated into and deemed part of the Agreement as if fully set forth therein. Except as expressly set forth in this Amendment, all other terms and provisions of the Agreement shall remain in full force and effect. IN WITNESS WHEREOF, this Amendment was executed as of the date above first written. BARGO ENERGY COMPANY By:__________________________________ Name: Tim J. Goff Title: Chief Executive Officer ENCAP EQUITY 1994 LIMITED PARTNERSHIP By: EnCap Investments L.C., General Partner By:__________________________________ D. Martin Phillips Managing Director 2 3 ENERGY CAPITAL INVESTMENT COMPANY PLC By:__________________________________ Gary R. Petersen Director TJG INVESTMENTS, INC. By:__________________________________ Tim J. Goff President BEC ENERGY COMPANY By:__________________________________ Tim J. Goff Manager BER ENERGY RESOURCES, LTD. By: BOC Operating Corporation General Partner By:__________________________________ Tim J. Goff President 3 4 BOC OPERATING CORPORATION By:__________________________________ Tim J. Goff President _____________________________________ Tim J. Goff _____________________________________ Thomas Barrow _____________________________________ James E. Sowell _____________________________________ B. Carl Price _____________________________________ Don Wm. Reynolds ENCAP ENERGY CAPITAL FUND III, L.P. By: EnCap Investments L.C., General Partner By:__________________________________ D. Martin Phillips Managing Director 4 5 ENCAP ENERGY CAPITAL FUND III-B, L.P. By: EnCap Investments L.C., General Partner By:__________________________________ D. Martin Phillips Managing Director BOCP ENERGY PARTNERS, L.P. By: EnCap Investments L.C., Manager By:__________________________________ D. Martin Phillips Managing Director EOS PARTNERS, L.P. By:__________________________________ Name:___________________________ Title:__________________________ EOS PARTNERS SBIC, L.P. By: Eos SBIC General, L.P., its general partner By: Eos SBIC, Inc., its general partner By:__________________________________ Name:___________________________ Title:__________________________ EOS PARTNERS SBIC II, L.P. By: Eos SBIC General II, L.P., its general partner By: Eos SBIC II, Inc., its general partner By:__________________________________ Name:___________________________ Title:__________________________ 5 6 SGC PARTNERS II LLC By:___________________________________ Name:____________________________ Title:___________________________ BANCAMERICA CAPITAL INVESTORS SBIC I, L.P. By: BancAmerica Capital Management SBIC I, LLC, its general partner By: BancAmerica Capital Management I, L.P., its sole member By: BACM I GP, LLC, its general partner By:__________________________________ J. Travis Hain Managing Director KAYNE ANDERSON ENERGY FUND, L.P. By:__________________________________ Name:___________________________ Title:__________________________ 6 EX-27 5 FINANCIAL DATA SCHEDULE
5 9-MOS DEC-31-1998 JAN-01-1999 SEP-30-1999 1,146,000 0 4,405,000 0 0 5,551,000 74,189,000 3,975,000 78,562,000 3,341,000 0 51,935,000 0 918,000 2,170,000 78,562,000 0 9,519,732 0 9,122,614 0 0 1,630,536 (1,226,762) (417,000) (809,762) 0 0 0 (809,762) (.039) (.039)
-----END PRIVACY-ENHANCED MESSAGE-----