                                                                                         ACCEPTED
                                                                                     02-18-00178-CV
                                                                          SECOND COURT OF APPEALS
                                                                                FORT WORTH, TEXAS
                                                                                   5/24/2018 2:13 PM
                                                                                      DEBRA SPISAK
                                                                                              CLERK

                             NO. 02-18-00178-CV

                                                           FILED IN
                                                    2nd COURT OF APPEALS
                         IN THE COURT OF APPEALS     FORT WORTH, TEXAS
                  FOR   THE SECOND DISTRICT OF TEXAS5/24/2018 2:13:01 PM
                            FORT WORTH, TEXAS            DEBRA SPISAK
                                                            Clerk


                    ENERQUEST OIL & GAS, L.L.C.,
                                           Appellant,
                               v.
                  ANTERO RESOURCES CORPORATION,
                                           Appellee.


                   On Appeal from the 141st Judicial District
                           of Tarrant County, Texas
                    Trial Court Cause No. 141-290089-17


                ANTERO’S RESPONSE TO
 ENERQUEST’S EMERGENCY MOTION FOR TEMPORARY RELIEF


Jason R. Grill                           Phillip B. Dye, Jr.
State Bar No. 24002185                   State Bar No. 06311500
jason.grill@steptoe-johnson.com          pdye@velaw.com
STEPTOE & JOHNSON P.L.L.C.               Jason M. Powers
10001 Woodloch Forest Drive, Suite 300   State Bar No. 24007867
The Woodlands, Texas 77380               jpowers@velaw.com
Telephone: (281) 203-5700                Caroline C. Stewart
Facsimile: (281) 203-5701                State Bar No. 24098477
                                         cstewart@velaw.com
                                         VINSON & ELKINS L.L.P.
                                         1001 Fannin Street, Suite 2500
                                         Houston, TX 77002-6760
                                         Telephone: (713) 758-2048
                                         Facsimile: (713) 615-5766

                             Attorneys for Appellee
                          Antero Resources Corporation
TO THE HONORABLE COURT OF APPEALS:

      Appellee Antero Resources Corporation (“Antero”) responds to Appellant

EnerQuest Oil & Gas, L.L.C.’s (“EnerQuest’s”) Emergency Motion for Temporary

Relief as follows.

      Because EnerQuest concedes it will be participating in discovery in this case

through a Texas-based entity it purports to manage, and therefore will actually incur

the discovery expense it claims should be avoided, there is no reason to stay

discovery—especially because the emerging facts are already showing additional

jurisdictional contacts that EnerQuest sought to avoid revealing below. The only

effect of the stay EnerQuest seeks would be to facilitate gamesmanship with respect

to EnerQuest’s admitted obligation to continue responding to merits discovery on

behalf of Braxton Minerals III, the Texas-based entity it manages.

                             Procedural Background

      In pertinent part, this case concerns the theft of trade secrets belonging to

Antero. Antero alleges that certain defendants below participated in a scheme to

acquire confidential information about Antero’s oil-and-gas well-drilling activities

from at least two individuals associated with a Fort Worth-based company providing

landman and other title-related services to Antero.

      On March 9, 2018, Antero filed an amended petition in this case adding

multiple defendants, including EnerQuest and Braxton Minerals III, LLC.


                                         1
EnerQuest, an Oklahoma-based company, owns 75% of the membership interest in

Braxton Minerals III, a limited liability company with its principal place of business

in Fort Worth. Braxton Minerals III holds oil and gas properties that appear to have

been targeted for acquisition on the basis of Antero’s non-public information.

Braxton Minerals III’s acquisition of these properties was funded by EnerQuest, who

in 2015 had reached out to Texas to enter into a business relationship with the other

member of Braxton Minerals III—a Fort Worth-based entity called Braxton

Minerals-Appalachia (“BMA”)—and the two Fort Worth residents who were

principals of BMA, all of whom are also defendants below. EnerQuest contends that

it is the managing member of Braxton Minerals III.1

       On April 18, 2018, EnerQuest filed a special appearance denying that it was

subject to personal jurisdiction in Texas. In that special appearance, EnerQuest

admitted that it had searched its files and found confidential Antero documents

received from one of BMA’s principals, a resident of Fort Worth. See Ex. A at 6-7.

These documents had been requested by EnerQuest in emails sent to Texas, as

explained in Antero’s answer to the special appearance. See Ex. B.

       On April 25, 2018, Antero served jurisdictional discovery on EnerQuest

seeking to establish the scope of EnerQuest’s relevant contacts with Texas for


       1
            A defendant below has called into question whether the formation of Braxton Minerals
III was fraudulent. Antero takes no position on that issue at this time, but assumes for purposes of
this motion that EnerQuest is, as it claims to be, the managing member of Braxton Minerals III.
                                                 2
purposes of responding to EnerQuest’s special appearance. See Ex. B-4. The day

after receiving these discovery requests, EnerQuest gave notice that the District

Court would hear its special appearance on May 9, 2018. See Ex. C.

      On April 30, 2018, Braxton Minerals III filed an answer and generally

appeared. See Ex. D. As expected, given that EnerQuest had already admitted in its

special appearance that it had “removed Braxton Minerals-Appalachia as Manager

of Braxton Minerals III and appointed itself as Manager of that company,” see Ex.

A at 6, Braxton Minerals III’s answer was filed by EnerQuest’s counsel, see Ex. D.

      On May 1-2, 2018, Antero requested that EnerQuest agree to a continuance

of the special appearance hearing to allow for limited jurisdictional discovery to

proceed before the special appearance was decided. EnerQuest refused the request.

Therefore, on May 2, 2018, Antero filed its response identifying those Texas

contacts of which Antero was already aware, along with an alternative motion for

continuance to obtain answers to the outstanding jurisdictional discovery requests

and conduct further jurisdictional discovery as needed. See Ex. B.

      On May 11, 2018, the District Court denied EnerQuest’s special appearance,

evidently concluding that specific personal jurisdiction over EnerQuest was already

established without the need for further discovery. See Ex. E.




                                         3
                                   ARGUMENT

       EnerQuest argues for a stay of discovery to avoid expense and avoid deciding

claims that may not be subject to personal jurisdiction. But as EnerQuest concedes,

it will bear the expense of discovery in any event; and Texas law already prevents

any risk that claims will be decided while EnerQuest’s appeal pends. In this Court,

EnerQuest is merely doing what it did below: trying to avoid any inquiry whatsoever

into jurisdictional facts.

I.     Because EnerQuest will remain in this litigation under another name, it
       faces no additional expense or inconvenience from continuing in
       discovery.

       EnerQuest’s primary argument is that it will suffer “substantial expense and

inconvenience” from participating in discovery in Fort Worth. Motion at 4. But

EnerQuest does not explain what expense or inconvenience it will suffer. Indeed, it

does not explain why it will suffer any expense or inconvenience from participating

in discovery in the name of EnerQuest, since it intends to participate in discovery in

the name of Braxton Minerals III, the Texas-based entity it owns and on whose

behalf it answered without contesting jurisdiction at all. Given that EnerQuest

contends it is the sole manager of Braxton Minerals III, EnerQuest’s position is that

it is the only entity capable of producing Braxton Minerals III’s documents,

answering interrogatories on its behalf, or designating corporate representatives for

its testimony.


                                          4
      Indeed, EnerQuest has conceded that it will continue to participate in

discovery. Just two days ago, counsel for EnerQuest asked that Antero consent to

stay discovery as to EnerQuest, explaining that EnerQuest would continue to

participate in discovery as the manager of Braxton Minerals III:

             We intend to answer the discovery for BMIII and continue
             to participate in the discovery of the case, as well as
             produce any documents EnerQuest has in relation to
             BMIII, Bauer and Ashburn through BMIII.

See Ex. F.

      EnerQuest cites no authority for the proposition that discovery should be

stayed during the appeal of a special appearance when that discovery imposes no

meaningful additional costs on the defendant. As reflected in each case EnerQuest

cites, courts stay discovery during the appeal of a special appearance only when the

requested discovery would impose a significant burden and expense on the specially

appearing party. In Oryx Capital International, Inc. v. Sage Apartments, L.L.C., the

appellate court granted a stay so that Oryx could avoid “the expense and

inconvenience of discovery pending the resolution of this appeal.” 167 S.W.3d 432,

437 (Tex. App.—San Antonio 2005, no pet.). Again, in Lattin v. Barrett, the court

“expressed concern for an appellant challenging the denial of a special appearance

having to incur the expense and inconvenience of discovery pending resolution of

the appeal of a special appearance.” 127 S.W.3d 276, 277 (Tex. App.—Waco 2003,

no pet.). And finally, in Lacefield v. Elec. Fin. Grp., Inc., the court stayed discovery

                                           5
on the sole basis of burden and expenses, stating: “Lacefield should not be required

to submit to ‘the expense and inconvenience’ of discovery pending resolution of his

appeal.” 21 S.W.3d 799, 800 (Tex. App.—Waco 2000, no pet.).

      Although burden and expense may be a valid basis on which to stay discovery

in some cases, this issue has no weight here, where EnerQuest will be participating

in discovery on behalf of Braxton Minerals III. EnerQuest has not explained how

responding on behalf of itself would impose any measurable additional burden that

would support a stay of discovery.

      Moreover, EnerQuest faces no special burden from participating in discovery

in Texas. Based in Oklahoma City, EnerQuest has convenient access to Fort Worth,

and because EnerQuest operates oil and gas wells in Texas, is registered to do

business in Texas, and has an agent for service of process in Texas (see Ex. A at 4),

it has already demonstrated that it has no serious objection to litigating in Texas.

II.   The automatic trial stay obviates any risk of a merits disposition that
      would affect EnerQuest’s substantial rights pending appeal.

      EnerQuest next contends that “the parties risk litigating claims … that must

be dismissed” if it prevails on its jurisdictional appeal. Motion at 4. Not so. First,

Texas statute is clear that an interlocutory appeal of an order denying a special

appearance stays “the commencement of a trial” during the appeal. TEX. CIV. PRAC.

& REM. CODE § 51.014(b). As such, the District Court will not decide the outcome

of the case while the appeal pends. But otherwise, the District Court retains

                                           6
jurisdiction over the case during the interlocutory appeal and may proceed with all

other matters. “Section 51.014(a)(7) provides that an interlocutory appeal may be

brought after the denial of a special appearance, but the statute does not provide a

stay of anything but the trial pending resolution of the appeal,” in contrast to appeals

under Subsection (a)(3), (5), (8), or (12). Buswell v. The GWSPI Co., LLC, 511

S.W.3d 256, 257 (Tex. App.—San Antonio 2015, no pet.) (citing § 51.014(a)(7),

(b)). An appellant therefore bears the burden of showing why Section 51.014(a)

should be extended to discovery when they appeal under Section 51.014(a)(7).

EnerQuest has not carried its burden.

       Second, even in the unlikely event EnerQuest were to prevail on its appeal, it

is far from clear this case would be dismissed. Because EnerQuest demanded a

hearing on its special appearance before any jurisdictional discovery, even a reversal

of the District Court’s decision could merely result in a remand to the District Court

to allow jurisdictional discovery exploring the EnerQuest contacts with the other

Texas defendants that the evidence has already revealed in part.

III.   EnerQuest is attempting to take strategic advantage of its refusal to
       participate in jurisdictional discovery in the district court.

       EnerQuest fought ordinary jurisdictional discovery below, and its current

motion appears designed to prevent the development of facts that could quickly

resolve the jurisdictional issues on remand if necessary. As explained in the

proceedings below, the District Court had discretion to permit discovery on a special

                                           7
appearance. BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 800 (Tex.

2002); Barron v. Vanier, 190 S.W.3d 841, 847 (Tex. App—Fort Worth 2006, no

pet.). Such commonplace discovery could easily have been allowed if it were

necessary. But after EnerQuest insisted it had no relevant Texas contacts, Antero

submitted clear evidence to the District Court that EnerQuest had reached out to

Texas to obtain confidential information. In addition, since the time of the special

appearance hearing, one of the BMA principals has testified in deposition that

EnerQuest’s president and another EnerQuest employee actually came to Texas for

an October 2015 meeting with the two BMA principals to discuss investing in

Braxton’s mineral acquisition program, right before Braxton Minerals III was

formed in November 2015 and acquired the allegedly tainted properties.2

       In the court below, EnerQuest sought to avoid answering discovery that would

have revealed that Texas contact, and EnerQuest’s motion in this Court appears

intended to continue the strategy of seeking a decision on the special appearance

without allowing the development of any fact record regarding its Texas contacts.

This Court need not facilitate EnerQuest’s strategic approach. Allowing ordinary

discovery to continue may reveal facts that will further solidify personal jurisdiction

over EnerQuest and possibly lead EnerQuest to abandon its appeal.


       2
           See Ex. G (excerpt from deposition of Robert Scott Bauer) at 121-22. Because the
Bauer deposition took place less than ten days ago, a final transcript has not been completed.
Therefore, an excerpt of the “rough” draft transcript received from the reporter is attached.
                                              8
      Indeed, the strategic value of this stay to EnerQuest is likely its only real value.

Given that EnerQuest will be participating in discovery under the name of Braxton

Minerals III, the only practical impact of a stay of discovery would be to give

EnerQuest a fig-leaf reason to selectively respond to discovery, i.e., a license to

refuse to answer discovery requests and deposition questions about its activities in

Texas. This selective responsiveness would be wasteful, as it makes no sense for an

EnerQuest witness giving a deposition as a Braxton corporate representative to

refuse to answer questions about EnerQuest’s visits to Texas. More troublingly still,

EnerQuest could use the discovery stay to delay or limit the inquiry into the merits

of the case against Braxton Minerals III, by choosing to disclose whatever facts it is

comfortable disclosing, and then asserting that any inconvenient questions encroach

on the subject of EnerQuest’s contacts with Texas—contacts which may well prove

central to the manner in which Antero’s confidential information was solicited,

disclosed, and used by multiple individuals and entities. Because the discovery stay

would do nothing to avoid any expense or burden, there is no reason to risk entering

a stay that could potentially be misused and abused.

                                      PRAYER

       Appellee Antero Resources Corporation respectfully requests that this Court

deny EnerQuest’s Motion for Temporary Relief. Antero further requests the Court

grant it such additional and further relief to which it may show itself entitled.


                                           9
Respectfully submitted,

STEPTOE & JOHNSON P.L.L.C.

By:     /s/Jason R. Grill
       Jason R. Grill
       State Bar No. 24002185
       jason.grill@steptoe-johnson.com
       W. Henry Lawrence
       WV State Bar No. 2156
       10001 Woodloch Forest Drive, Suite
       300
       The Woodlands, Texas 77380
       281.203.5700
       281.203.5701 (facsimile)

VINSON & ELKINS L.L.P.

By:     /s/Jason M. Powers
       Phillip B. Dye, Jr.
       State Bar No. 06311500
       pdye@velaw.com
       Jason M. Powers
       State Bar No. 24007867
       jpowers@velaw.com
       Caroline C. Stewart
       State Bar No. 24098477
       cstewart@velaw.com
       1001 Fannin Street, Suite 2500
       Houston, TX 77002-6760
       713.758.2222
       713.758.2346 (facsimile)

Attorneys for Appellee
Antero Resources Corporation




  10
                         CERTIFICATE OF SERVICE

      I hereby certify that a true and correct copy of the foregoing document has
been forwarded to all parties listed below via E-service and/or via facsimile, on this
the 24th day of May, 2018:

Via E-Service:                                Via E-Service:
ghamm@hammfirm.com                            apennington@phblaw.com
Gene A. Hamm, II                              H. Allen Pennington, Jr.
The Hamm Firm                                 Matthew D. Germany
1333 W. McDermott, Suite 200                  Pennington Hill, LLP
Allen, Texas 75013                            Tindall Square – Warehouse No. 3
Attorney for Plaintiff, Penn                  509 Pecan Street, Suite 101
Investment Funds, LLC and New                 Fort Worth, Texas
Defendants Venture Strong II, LLC and         Attorneys for Defendants John Bradley
Joe F. Penn Jr.                               Ashburn and New Defendant Post Oak
                                              Appalachia, LLC

Via E-Service:                                Via E-Service:
mhassett@tarrantbusinesslaw.com               awoodward@hrepc.com
Michael Hassett                               C. Andrew Woodward
Jones Hassett, PC                             Holman Robertson Eldridge
440 North Center                              8226 Douglas Ave., Suite 550
Arlington, Texas 76011                        Dallas, Texas 75225
Attorney for Defendants Michael               Attorney for Kelly O’Connor
Fisher, Maegan Fisher and M&M
Consulting

Via E-Service:                                Via E-Service:
Scott@braxtonenergy.com                       brad@postoakroyalty.com
R. Scott Bauer                                Brad Ashburn
8851 Camp Bowie Boulevard W                   100 N. Forest Park Blvd., Suite 201
Suite 200                                     Fort Worth, Texas 76102
Fort Worth, Texas 76116                       Attorney for Braxton Minerals-
Attorney for Braxton Acquisitions,            Appalachia, LLC
LLC; Braxton Energy, LLC; Braxton
Minerals II, LLC; and R. Scott Bauer




                                         11
Via E-Service:                             Via E-Service:
rolandjohnson@hfblaw.com                   joe.cox@bracewell.com
Roland K. Johnson                          Joseph M. Cox and Andrea D. Broyles
Harris, Finley & Bogle, PC                 1445 Ross Avenue, Suite 3800
777 Main Street, Suite 1800                Dallas, Texas 75202
Fort Worth, Texas 76102                    Spencer F. Smith
Attorney for Energy Corporation of         McAfee & Taft
America                                    211 N. Robinson Ave.
                                           Oklahoma City, Oklahoma 73102.
                                           Attorneys for EnerQuest Oil & Gas,
                                           L.L.C. and Braxton Minerals III, LLC

Via E-Service:                             Via E-Service: cd@peebleslaw.com
jnt@turnerandallen.com                     C.D. Peebles
Jess N. Turner, III                        The Peebles Law Firm
Turner & Allen, P.C.                       1604 Devon Court
P.O. Box 930                               Southlake, TX 76092
Graham, Texas 76450                        Attorney for Austin Fox
Attorney for Turn 2 Energy, LLC


                                     /s/ Caroline C. Stewart_________________
                                       CAROLINE C. STEWART




                                      12
                                           EXHIBITS

Ex. A           Special Appearance of Defendant EnerQuest Oil & Gas, L.L.C. to Object to
                Personal Jurisdiction

Ex. B           Intervenor Antero Resources Corporation’s Response to EnerQuest Oil & Gas
                L.L.C.’s Special Appearance and Motion to Continue

Ex. C           Notice of Hearing on EnerQuest Oil & Gas, L.L.C.’s Special Appearance to Object
                to Personal Jurisdiction

Ex. D           Defendant Braxton Minerals III, LLC’s Special Exceptions and Original Answer

Ex. E           Order Overruling Objection to Jurisdiction

Ex. F           Cox Email re: Discovery Stay

Ex. G           Robert Scott Bauer Deposition Excerpts




US 5684346v.1
EXHIBIT A
                                       141-290089-17
                                                                                                        FILED
                                                                                           TARRANT COUNTY
                                                                                            4/18/2018 2:57 PM
                                                                                          THOMAS A. WILDER
                                   CAUSE NO. 141-290089-17                                   DISTRICT CLERK

PENN INVESTMENT FUNDS, LLC,                     )      IN THE DISTRICT COURT OF
                  Plaintiff,                    )
                                                )
ANTERO RESOURCES CORPORATION,                   )
                 Intervenor,                    )      TARRANT COUNTY, TEXAS
                                                )
vs.                                             )
                                                )
BRAXTON ENERGY, LLC, et al.,                    )
                 Defendants.                    )      141ST JUDICIAL DISTRICT

      SPECIAL APPEARANCE OF DEFENDANT ENERQUEST OIL & GAS, L.L.C.
                  TO OBJECT TO PERSONAL JURISDICTION

TO THE HONORABLE JUDGE OF SAID COURT:

       Defendant EnerQuest Oil & Gas, L.L.C. (“EnerQuest”) files this special appearance under

Rule 120a of the Texas Rules of Civil Procedure for the sole purpose of objecting to the personal

jurisdiction of this Court over EnerQuest. EnerQuest’s special appearance is being made prior to

the filing of a motion to transfer venue, answer, or any other plea, pleading or motion on

EnerQuest’s behalf. For the reasons that follow, the Court should dismiss the claims asserted

against EnerQuest for lack of personal jurisdiction.

                                  I. Summary of the Argument

       Defendant EnerQuest is not subject to personal jurisdiction in the State of Texas in this

case. There are two types of personal jurisdiction: general and specific. Neither type of personal

jurisdiction exists against EnerQuest under the circumstances here. EnerQuest is not subject to

general or “all purpose” jurisdiction in the State of Texas because it is organized under the laws of

and maintains its principal place of business in Oklahoma, not Texas. See Daimler AG v. Bauman,

571 U.S. 117, 134 S. Ct. 746, 760-61 (2014) (holding that foreign corporations only subject to

general jurisdiction when “at home” in forum, such as when the forum is the defendant’s state of




#5680198
incorporation or principal place of business). Additionally, EnerQuest is not subject to specific

jurisdiction in the State of Texas in this case because none of Antero’s actions asserted in this case

arise out of any activity by EnerQuest that was intentionally or purposefully directed at the State

of Texas. See Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco County,

137 S. Ct. 1773, 1780 (2017). Therefore, this Court lacks personal jurisdiction over EnerQuest and

this case should be dismissed as to EnerQuest.

                                          II. Background

A.     Summary of Relevant Portions of Antero’s Amended Petition in Intervention and Its
       Claim Against EnerQuest. 1

       This case concerns the alleged misappropriation by other Defendants of certain of Antero’s

alleged trade secrets. Antero contends that a “Critical Date Report,” a “SWN June 2016

Acquisition Defects report,” and certain “Title Opinions” that pertain to oil and gas minerals

located in West Virginia are its confidential trade secrets. Am. Pet. Interv. ¶¶ 22-28. Antero alleges

that at some point in 2015 and 2016, one or more of the “Original Defendants” and New Defendant

Austin Fox unlawfully acquired these alleged trade secrets from non-party Texhoma Land

Consultants I Inc. in Tarrant County, Texas. 2 Id. ¶¶ 22, 29. Antero also alleges the aforementioned




1
  Due to the pre-answer stage of this case vis-à-vis EnerQuest, the following summary assumes
well-pleaded allegations in the amended petition are true unless such facts are specifically
controverted by evidence below and attached hereto. Nothing contained herein should be construed
as an admission or concession that Antero’s allegations are in fact correct.
2
  The “Original Defendants” are Braxton Energy, LLC; Braxton Acquisitions, LLC; Braxton
Minerals II, LLC; Robert Scott Bauer; John Bradley Ashburn; Michael and Maegen Fisher; M&M
Consulting,; and Kelly O’Connor. Am. Pet. Interv. ¶¶ 3-9.

The “New Defendants” are Austin Fox; Joe F. Penn, Jr.; EnerQuest; Venture Strong II, LLC; Post
Oak Appalachia, LLC; Turn 2 Energy, LLC; Braxton Minerals-Appalachia, LLC; Braxton
Minerals III, LLC; and Global Oil and Gas Fields Oklahoma, LLC. Id. ¶¶ 10-18.
                                               2

#5680198
Defendants, Plaintiff Penn Investment Funds, LLC, and New Defendant Joe F. Penn, Jr. conspired

to misappropriate Antero’s trade secrets. Id. 29, 50-54.

       Next, Antero contends that Original Defendant Braxton Minerals II, LLC used the

allegedly misappropriated trade secrets to acquire oil and gas interests in West Virginia that were

“adverse” to Antero’s interests, and that Braxton Minerals II subsequently transferred its allegedly

ill-gotten mineral interests to New Defendant Braxton Minerals III, LLC and certain other

Defendants (but not EnerQuest). Id. ¶ 40. Antero further alleges that Braxton Minerals III is owned

by EnerQuest and New Defendant Braxton Minerals-Appalachia, LLC, and that the latter entity is

in turn owned by Original Defendants Robert Scott Bauer and John Bradley Ashburn, two of the

alleged conspirators. Id. ¶ 42.

       Other than its allegation that EnerQuest is one of the members of Braxton Minerals III, the

only allegations in the amended petition directed at EnerQuest are that (i) EnerQuest claims to

have removed and replaced Braxton Minerals-Appalachia as the manager of Braxton Minerals III,

and (ii) as the manager of Braxton Minerals III, EnerQuest has offered West Virginia oil and gas

properties owned by Braxton Minerals III for sale, certain of which properties Antero claims were

acquired by other Defendants using the misappropriated trade secrets. Id. ¶ 44, 46. Antero’s

amended petition does not allege that EnerQuest played any part in misappropriating the alleged

trade secrets. More importantly, the amended petition does not allege EnerQuest took any actions

within or directed at the State of Texas. As will be shown below, Antero’s claims do not arise out

of any contact of EnerQuest within the State of Texas.

B.     Summary of EnerQuest’s Relevant Operations.

       EnerQuest is an oil and gas exploration and production company that is organized as a

limited liability company under the laws of the State of Oklahoma, and it maintains its headquarters


                                                 3

#5680198
at 12368 Market Drive, Oklahoma City, Oklahoma 73114. Affidavit of Gregory Olson, ¶ 3

(attached as Exhibit 1). EnerQuest operates oil and gas wells in Oklahoma, Texas, Louisiana, Utah,

and Arkansas. Id. ¶ 4. In addition, EnerQuest owns non-operated oil and gas interests in Alabama,

Arkansas, Florida, Georgia, Illinois Louisiana, Michigan, Mississippi, Nebraska, North Dakota,

New Mexico, Oklahoma, Oregon, Pennsylvania, Texas, West Virginia, and Wyoming. Id.

Although EnerQuest is registered to and does conduct business in the State of Texas, it maintains

no offices or employees in Texas. Id. ¶ 3. Oklahoma is the only state in which EnerQuest maintains

an office and employees. Id.

       Relevant here, EnerQuest and Braxton Minerals-Appalachia formed Braxton Minerals III,

a Delaware limited liability company, in November 2015. Id. ¶ 5. Braxton Minerals III was

organized for the express purpose of acquiring, owning, holding, and maintaining certain types of

oil and gas interests in the States of West Virginia, Pennsylvania, and Ohio. See Limited Liability

Company Agreement of Braxton Minerals III, LLC §§ 1.3, 2.1(a) (“BMIII Agreement” attached

as Exhibit 1A).

       Generally, Braxton Minerals III was organized such that EnerQuest owns 75% of the equity

interest in the company and Braxton Minerals-Appalachia owns 25% of the equity interest in the

company. BMIII Agreement, § 3.6 & Exhibit A. Braxton Minerals-Appalachia was designated as

the initial Manager of the company, id. § 6.1(b), was responsible for conducting its day-to-day

operations, id. § 6.5(a), and was responsible for funding its day-to-day operations and expenses,

id. § 4.1(c). EnerQuest, for its part, committed to contribute up to $10 million in capital to Braxton

Minerals III in order to acquire certain oil and gas interests located in West Virginia, Pennsylvania,

or Ohio that were identified by the Manager as meeting certain agreed-upon criteria. See id. §




                                                  4

#5680198
4.1(a), (b), & Exhibit A. Prior to the Liquidity Event described below, EnerQuest did not exercise

control over or participate in management activities of Braxton Minerals III.

        The first mineral interests acquired by Braxton Minerals III were purchased from Original

Defendant Braxton Minerals II contemporaneously with the formation of Braxton Minerals III in

November 2015. See id. § 4.1(a). These “Previously Acquired Interests” were composed of 214.40

net mineral acres located in West Virginia. See id. § 4.1; Olson Affidavit, ¶ 6. Braxton Minerals-

Appalachia represented to EnerQuest at the time Braxton Minerals III was formed that the

Previously Acquired Interests had been fully paid for by Braxton Minerals-Appalachia or its

affiliates, and that such interests met certain other characteristics that fit with the package of

mineral interests to be purchased by Braxton Minerals III. See BMIII Agreement § 4.1(a)(i).

EnerQuest did not have any involvement in the initial acquisition of the Previously Acquired

Interests by Braxton Minerals II, Braxton Minerals-Appalachia, or any of their managers, owners,

or affiliates. Olson Affidavit, ¶ 6.

        Between November 2015 and April 2016, EnerQuest fully funded its $10 million capital

commitment to Braxton Minerals III, which funds were used by Braxton Minerals III to purchase

certain oil and gas interests in West Virginia and Pennsylvania. Olson Affidavit, ¶ 7. By letter

dated March 10, 2016 from Brad Ashburn, Braxton Minerals-Appalachia notified EnerQuest

pursuant to Section 4.5 of the BMIII Agreement that EnerQuest’s remaining commitment amount

was less than $1 million and requested that EnerQuest elect whether it would contribute additional

capital. Olson Affidavit, ¶ 8; March 10, 2016 Ltr. (attached as Exhibit 1B). Under the BMIII

Agreement, EnerQuest then had 30 days to decide whether to commit to contribute another $10

million in capital to Braxton Minerals III, or Braxton Minerals-Appalachia was obligated to

liquidate Braxton Minerals III. See BMIII Agreement, § 4.5. Ultimately, EnerQuest elected not to


                                                5

#5680198
increase its capital contribution commitment to Braxton Minerals III, which triggered a “Liquidity

Event” under Section 10.1 of the BMIII Agreement. Olson Affidavit, ¶ 8; Email of April 8, 2016

(attached as Exhibit 1C).

       As a result of the Liquidity Event, Braxton Minerals-Appalachia was supposed to select a

liquidator, to be approved by EnerQuest, to wind up the affairs of Braxton Minerals III and

distribute its assets to EnerQuest and Braxton Minerals-Appalachia as provided in the BMIII

Agreement. See BMIII Agreement, § 10.2. However, Braxton Minerals-Appalachia failed or

refused to do so. Olson Affidavit, ¶ 9. By letter dated August 9, 2017, EnerQuest notified Braxton

Minerals-Appalachia that it was in breach of the BMIII Agreement by, among other things, failing

to select a liquidator to wind the company up, and demanded that Braxton Minerals-Appalachia

cure such breach before September 10, 2017. Olson Affidavit, ¶ 10; Aug. 9, 2017 Ltr. (attached as

Exhibit 1D). Braxton Minerals-Appalachia failed and refused to cure its breach within the

specified time period, so EnerQuest removed Braxton Minerals-Appalachia as Manager of

Braxton Minerals III and appointed itself as Manager of that company on September 29, 2017, as

allowed in the BMIII Agreement. Olson Affidavit, ¶¶ 10-11; Written Consent of Members of

Braxton Minerals III, LLC dated Sept. 29, 2017 (attached as Exhibit 1E); Sept. 29, 2017 Ltr.

(attached as Exhibit 1F).

       Subsequently, in February 2018, Antero’s counsel notified EnerQuest’s counsel that it

believed Original Defendants Robert Scott Bauer and John Bradley Ashburn had possession of

certain of its alleged trade secret documents and inquired as to whether EnerQuest had possession

of certain specified documents. Feb. 23, 2018 Ltr. (attached as Exhibit 2). In response, EnerQuest

searched its files, determined that it had received certain information from Original Defendant

Robert Scott Bauer that Antero alleges are its trade secret documents, and so notified Antero. Olson


                                                 6

#5680198
Affidavit, ¶ 12; Email of March 5, 2018 from J. Black to H. Lawrence (attached as Exhibit 3). As

EnerQuest’s counsel previously explained to Antero’s counsel (and were evidenced by the emails

and text messages previously provided to Antero), such documents were disclosed to Greg Olson

of EnerQuest by Bauer in February 2017 or later in the course of Bauer’s effort to solicit EnerQuest

to invest in another of Bauer’s mineral acquisition programs. Olson Affidavit, ¶ 13; March 5, 2018

Email. EnerQuest did not know that Bauer allegedly acquired the subject information by unlawful

means. Olson Affidavit, ¶ 13. In any event, the alleged trade secret information was received by

Greg Olson of EnerQuest in Oklahoma. Id. EnerQuest has not disclosed the documents to anyone

outside of its organization other than Original Defendants Bauer and Ashburn. Id.

                                  III. Argument and Authorities

       “The plaintiff bears the initial burden of pleading allegations that suffice to permit a court’s

exercise of personal jurisdiction over the nonresident defendant.” Searcy v. Parex Res., Inc., 496

S.W.3d 58, 66 (Tex. 2016). If the plaintiff does so, the burden shifts to the defendant to negate the

“bases for personal jurisdiction that exist in the plaintiff’s pleadings.” Id. The Texas legislature,

through its long-arm statute, has authorized Texas courts to exercise personal jurisdiction over

nonresidents to the limits allowed by the Due Process Clause of the Fourteenth Amendment to the

United States Constitution. See id. (citing Moki Mac River Expeditions v. Drugg, 221 S.W. 3d 569,

574 (Tex. 2007)). As a result, the question of whether Texas courts may exercise personal

jurisdiction over a nonresident is coextensive with whether the exercise of that jurisdiction

comports with due process. See id. Thus, the present inquiry is whether EnerQuest has sufficient

minimum contacts with the State of Texas “such that the maintenance of the suit does not offend

traditional notions of fair play and substantial justice.” Int’l Shoe Co. v. Washington, 326 U.S. 310,

316 (1945) (quotation omitted).


                                                  7

#5680198
       There are two categories of personal jurisdiction: general and specific. General jurisdiction

is “all-purpose jurisdiction” where the defendant can be sued in the forum state regardless of

whether the plaintiff’s cause of action relates to the defendant’s contacts with the forum. Daimler

AG v. Bauman, 134 S. Ct. 746, 754 (2014). Specific jurisdiction, on the other hand, allows

jurisdiction only over claims that arise out of or relate to a defendant’s contacts with the forum

state. See id. For the reasons discussed below, EnerQuest does not have sufficient minimum

contacts with Texas to support either general or specific jurisdiction in this case. Therefore, the

Court should dismiss EnerQuest from this case for lack of personal jurisdiction.

A.     EnerQuest is not subject to general personal jurisdiction in Texas.

       Until relatively recently, some courts had interpreted the United States Supreme Court’s

precedent as authorizing general personal jurisdiction in any forum with which the defendant had

substantial, “continuous and systematic contacts.” Cf. Moki Mac River Expeditions, 221 S.W.3d

at 575 (suggesting that general jurisdiction is present merely when a “defendant has made

continuous and systematic contacts with the forum.”). Recently, however, the Supreme Court has

rejected that view of general jurisdiction and held that it “is unacceptably grasping.” Daimler, 134

S. Ct. at 761. Instead, the Supreme Court has emphasized “that only a limited set of affiliations

with a forum will render a defendant amendable to all-purpose jurisdiction there.” Id. at 760. For

individuals, that place is the defendant’s domicile. Id. For corporations, “the place of incorporation

and place of business are [the] paradigm bases for general jurisdiction.” Id. (quotation omitted).

       In Daimler, the Supreme Court held that general jurisdiction comports with due process

only when a “corporation’s ‘affiliations with the State are so continuous and systematic as to render

it essentially at home in the forum State.’” Id. (quoting Goodyear Dunlop Tires Operations, S.A.

v. Brown, 564 U.S. 915, 919 (2011) (emphasis added)). In explaining why a corporation’s principal


                                                  8

#5680198
place of business and state of incorporation are the paradigm examples of the “limited set of

affiliations” that render a corporation at home, the Supreme Court analogized those locations to an

individual’s domicile and indicated they were the corporation’s functional “equivalent” to an

individual’s domicile. To be sure, the Supreme Court in Daimler left open the possibility that in

“an exceptional case” a corporation might be deemed to be at home in a state other than its state

of incorporation or principal place of business. Id. at 761, n.19. However, the Court emphasized

that the character of affiliations necessary to render a defendant at home in a state should be

“unique” and “easily ascertainable,” like an individual’s domicile, or a corporation’s principal

place of business and state of incorporation. See id. at 760.

       Underscoring the point that the place where a corporation is deemed to be at home should

be “unique” and “easily ascertainable,” the Court in Daimler rebuffed the dissent for suggesting

that its holding would invite additional jurisdictional discovery as to the quantum of contacts

necessary to establish general jurisdiction. See id. at 761, n.20 (“But it is hard to see why much in

the way of discovery would be needed to determine where a corporation is at home.”). Thus, it

should come as no surprise that lower courts after Daimler have consistently rejected attempts to

expand general jurisdiction over corporations to states other than the corporation’s principal place

of business or state of incorporation. See, e.g., Sonera Holding B.V. v. Cukurova Holding A.S., 750

F.3d 221, 223 (2d Cir. 2014) (per curiam) (stating “general jurisdiction extends beyond an entity’s

state of incorporation and principal place of business only in the exceptional case . . .” (emphasis

added)); Monkton Ins. Servs., Ltd. v. Ritter, 768 F.3d 429, 432 (5th Cir. 2014) (“It is, therefore,

incredibly difficult to establish general jurisdiction in a forum other than the place of incorporation

or principal place of business.” (emphasis added)); Wal-Mart Stores, Inc. v. LeMaire, 395 P.3d

1116, 1122 (Ariz. Ct. App. 2017) (holding that an “exceptional case” where general jurisdiction


                                                  9

#5680198
would extend beyond the paradigm examples identified by the Supreme Court requires “exigent

circumstances that render traditional jurisdictional limits unworkable.” (emphasis added)).

       EnerQuest is “at home” for purposes of general jurisdiction only in Oklahoma, not Texas.

Oklahoma is where EnerQuest is organized. Oklahoma is where EnerQuest maintains its

headquarters and its employees. Thus, Oklahoma is the place from where EnerQuest directs its

business in multiple states. EnerQuest does not maintain an office or employees in any state other

than Oklahoma. As a result, Oklahoma is the only “unique” and “easily ascertainable” place that

is equivalent to EnerQuest’s domicile. As a result, Oklahoma is the only state in which EnerQuest

is subject to general, “all purpose” jurisdiction untethered to its contacts with the forum. While

EnerQuest conducts business in the State of Texas, it also conducts business in other states. The

Supreme Court has made clear that doing substantial business in a state is not enough to confer

general jurisdiction because “[a] corporation that operates in many places can scarcely be deemed

at home in all of them.” Daimler AG, 134 S. Ct. 761, n.20. Therefore, EnerQuest is at home and

subject to personal jurisdiction in only Oklahoma, not in Texas.

B.     EnerQuest is not subject to specific personal jurisdiction in Texas in this case.

       “In order for a state court to exercise specific jurisdiction, the suit must arise out of or relate

to the defendant’s contacts with the forum.” Bristol-Myers Squibb Co. v. Superior Court of

California, San Francisco County, 137 S. Ct. 1773, 1780 (2017) (quotations and alterations

omitted). This requires “an affiliation between the forum and the underlying controversy,

principally, an activity or an occurrence that takes place in the forum State.” Id. at 1781 (quotation

and alterations omitted). Moreover, to count as a “contact” giving rise to suit, the defendant’s

actions giving rise to the suit must have been “purposefully directed . . . at residents of the forum”

state. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 473 (1985). The Texas Supreme Court has


                                                  10

#5680198
identified “three features” or guideposts for analyzing the relevancy a defendant’s contacts with

the forum in the context of specific personal jurisdiction: “(1) the relevant contacts are those of the

defendant, and the unilateral activity of another person or a third party is not pertinent; (2) the

contacts that establish ‘purposeful availment’ must be purposeful rather than random, fortuitous,

isolated, or attenuated; and (3) the defendant must seek some benefit, advantage, or profit by

‘availing’ itself of the jurisdiction.” Searcy v. Parex Res., Inc., 496 S.W.3d 58, 67 (Tex. 2016).

       In addition, “[s]pecific jurisdiction . . . does not exist where the defendant’s contacts with

the forum state are not substantially connected to the alleged operative facts of the case.” Id. at 70.

The Texas Supreme Court has explained that this “substantial connection” test requires

consideration of “[1] what the [plaintiff’s] claim is principally concerned with, [2] whether the

[defendant’s] contacts will be the focus of the trial and consume most if not all of the litigations’

attention, and [3] whether the [defendant’s] contacts are related to the operative facts of the

[plaintiff’s] claim.” TV Azteca v. Ruiz, 490 S.W.3d 29, 52-53 (Tex. 2016) (internal quotations and

citations omitted). For purposes of specific personal jurisdiction, it does not matter how many

contacts a defendant has with the forum state if the plaintiff’s claim does not relate to those

contacts. See Bristol-Myers Squibb, 137 S. Ct. 1781-82.

       In this case, Antero’s claims concern the alleged misappropriation by other Defendants of

Antero’s alleged trade secrets concerning oil and gas properties located in West Virginia. Although

Antero alleges that the Original Defendants and New Defendant Austin Fox unlawfully acquired

the alleged trade secrets from non-party Texhoma Land Consultants I Inc. in Tarrant County,

Texas, id. ¶¶ 22, 29, Antero does not allege EnerQuest played any part in that alleged

misappropriation. While EnerQuest did receive (in Oklahoma) certain of the allegedly trade secret

information from Original Defendant Robert Scott Bauer in February 2017, Antero does not (and


                                                  11

#5680198
cannot) allege EnerQuest has used or disclosed that information, let alone that it did so in Texas.

Further, even if EnerQuest did disclose or use Antero’s trade secret information (which it did not),

any damages allegedly suffered by Antero from such disclosure or use would be realized in West

Virginia, where the subject oil and gas properties are located, or in Colorado, where Antero alleges

its corporate headquarters are located. See Am. Pet. Interv. ¶ 1.

        Simply put, Antero’s claims in this lawsuit have nothing to do with any contact between

EnerQuest and the State of Texas. Therefore, this Court lacks specific personal jurisdiction over

EnerQuest in this case.

                                              IV. Prayer

        Wherefore, for the reasons explained above, EnerQuest respectfully requests the Court set

this matter for hearing at the earliest time possible and that, upon hearing, this special appearance

be sustained in all things and the claims and causes of action against Defendant EnerQuest Oil &

Gas, L.L.C. be dismissed for lack of personal jurisdiction. EnerQuest also requests any other or

further relief, at law or in equity, to which it may be justly entitled.




                                                   12

#5680198
                                             Respectfully submitted,

                                             BRACEWELL LLP

                                             By:       /s/ Joseph M. Cox
                                                   Joseph M. Cox
                                                   State Bar No. 04950200
                                                   Joe.Cox@bracewell.com
                                                   Andrea D. Broyles
                                                   State Bar No. 24082744
                                                   Andrea.Broyles@bracewell.com

                                             1445 Ross Avenue, Suite 3800
                                             Dallas, Texas 75202
                                             Telephone: (214) 468-3800
                                             Facsimile: (800) 404-3970
                                                            - and -
                                             Spencer F. Smith
                                             State Bar No. 24008625
                                             MCAFEE & TAFT A Professional Corporation
                                             Tenth Floor, Two Leadership Square
                                             211 N. Robinson Ave.
                                             Oklahoma City, Oklahoma 73102-7103
                                             spencer.smith@mcafeetaft.com

                                             Attorneys for Defendant EnerQuest Oil & Gas,
                                             L.L.C.



                                   Certificate of Conference


       This certifies that on April 4, 2018 and April 6, 2018, a telephone conference was held with
Jason Grill, attorney for Intervenor Antero Resources Corporation, regarding the merits of this
motion. A reasonable effort has been made to resolve the dispute without the necessity of court
intervention and the effort failed. Therefore it is presented to the Court for determination.



                                             /s/ Joseph M. Cox
                                             Joseph M. Cox




                                                13

#5680198
                                     Certificate of Service
       I hereby certify that on April 18, 2018, a true and correct copy of the foregoing document
was served on the following counsel of record in accordance with the Texas Rules of Civil
Procedure:
 Jason R. Grill                                  Phillip B. Dye, Jr.
 W. Henry Lawrence                               Caroline C. Stewart
 Steptoe & Johnson PLLC                          Vinson & Elkins LLP
 10001 Woodlock Forest Drive, Suite 300          1001 Fannin Street, Suite 2500
 The Woodlands, Texas 77380                      Houston, Texas 77002-6760
 jason.grill@steptoe-johnson.com                 pdye@velaw.com
 hank.lawrence@stptoe-johnson.com                cstewart@velaw.com
 Attorneys for Intervenor Antero Resources       Attorneys for Intervenor Antero Resources
 Corporation                                     Corporation
 Gene A. Hamm, II                                H. Allen Pennington, Jr.
 The Hamm Firm                                   Matthew D. Germany
 1333 W. McDermott, Suite 200                    Pennington Hill, LLP
 Allen, Texas 75013                              Tindall Square-Warehouse No. 3
 ghamm@hammfirm.com                              509 Pecan Street, Suite 101
 Attorney for Plaintiff Penn Investment          Fort Worth, Texas 76102
 Funds, LLC, Joe F. Penn Jr., and Venture        apennington@phblaw.com
 Strong II, LLC                                  Attorneys for Defendant John Bradley
                                                 Ashburn and Post Oak Appalachia, LLC
 Michael Hassett                                 Avery McDaniel
 Jones Hasset, PC                                Law Office of Avery McDaniel
 440 North Center                                1205 N. Main Street
 Arlington, Texas 76011                          Fort Worth, Texas 76164
 mhasset@tarrantbusinesslaw.com                  avery@avrymcdaniel.com
 Attorney for Defendants Michael Fisher,         Attorney for Braxton Minerals II, LLC
 Maegan Fisher, and M&M Consulting
 R. Scott Bauer                                  C. Andrew Woodward
 8851 Camp Bowie Boulevard W                     Holman Robertson Eldridge
 Suite 200                                       8226 Douglas Ave., Suite 550
 Fort Worth, Texas                               Dallas, Texas 75225
 scott@braxtonenergy.com                         awoodward@hrepc.com
 Attorney for Braxton Acquisitions, LLC,         Attorney for Kelly O’Connor
 Braxton Energy LLC, and himself
 Roland K. Johnson                               Charles W. Sartain
 Harris, Finley & Bogle, P.C.                    Gray Reed & McGraw
 777 Main Street, Suite 1800                     1601 Elm Street, Suite 4600
 Fort Worth, Texas 76102                         Dallas, Texas 75201
 rolandjohnson@hfblaw.com                        Attorneys for Global Oil and Gas Fields
 Attorneys for Energy Corporation of
 America
                                            /s/ Joseph M. Cox
                                            Joseph M. Cox
                                               14

#5680198
                                       Cause No. 141-290089-17

PENN INVESTMENT FUNDS, LLC,                     )     In the District Court
                          Plaintiff,            )     of Tarrant County, Texas
                                                )
ANTERO RESOURCES CORPORATION,                   )
                          Intervenor,           )
                                                )
vs.                                             )     141 st Judicial District
                                                )
BRAXTON ENERGY, LLC, et al.,                    )
                          Defendants.           )

                                            Verification

STATE OF OKLAHOMA                               §
                                                §
COUNTY OF OKLAHOMA                              §

        Before me, the undersigned notary public, on this day personally appeared Gregory W.
Olson, who after being duly sworn, stated on his oath that he has read the foregoing Special Ap-
pearance to Object to Personal Jurisdiction and that the statements contained therein are true and
correct based upon either his personal knowledge or information made available to him in in the
course and scope of his employment for EnerQuest Oil & Gas, L.L.C.




                                               Gregory W. so
                                               President Em ritu
                                               EnerQuest Oil & Gas, L.L.C.



         Subscribed and sworn to before me by Gregory W. Olson, this /~day of April, 2018.




(Seal)
                                              Notary Public
                                              My Commission Expires: _ _         __._........,_~----




                                                 15
EXHIBIT 1
                                      CAUSE NO. 141-290089-17

PENN INVESTMENT FUNDS, LLC,                    )     IN THE DISTRICT COURT OF
                  Plaintiff,                   )
                                               )
ANTERO RESOURCES CORPORATION,                  )
                 Intervenor,                   )     TARRANT COUNTY, TEXAS
                                               )
vs.                                            )
                                               )
BRAXTON ENERGY, LLC, et al.,                   )
                 Defendants.                   )     141 ST JUDICIAL DISTRICT

                           AFFIDAVIT OF GREGORY W. OLSON

STATE OF OKLAHOMA                              §
                                               §
COUNTY OF OKLAHOMA                             §

       I, Gregory W. Olson, being duly sworn, depose and state the following upon my oath:

       1.      "I am over the age of 21. I have never been convicted of a felony. I am of sound

mind, and I am fully competent to make this affidavit. This affidavit is being made in support of

the Special Appearance of EnerQuest Oil & Gas, L.LC. ("EnerQuest") in the above-captioned

case for the sole purpose of objecting to personal jurisdiction over EnerQuest.

       2.      "I am currently President Emeritus of EnerQuest, am semi-retired, and consult

with EnerQuest on certain matters. From its creation in November of 1996 until December 31,

201 7, I was the President of EnerQuest. At all times relevant to this affidavit, I have resided in

Edmond, Oklahoma and worked out of EnerQuest's Oklahoma City office. Through my

positions as President and President Emeritus, I have personal knowledge of the facts stated

herein, which are true and correct.

       3.      "EnerQuest is an oil and gas exploration and production company. It is organized

as a limited liability company under the laws of the State of Oklahoma, and it maintains its
headquarters at 12368 Market Drive, Oklahoma City, Oklahoma 73114. EnerQuest does not

maintain any offices or employees in any state other than Oklahoma.

       4.     "EnerQuest operates oil and gas wells in Oklahoma, Texas, Louisiana, Utah, and

Arkansas. In addition, EnerQuest owns non-operated oil and gas interests in Alabama, Arkansas,

Florida, Georgia, Illinois Louisiana, Michigan, Mississippi, Nebraska, North Dakota, New

Mexico, Oklahoma, Oregon, Pennsylvania, Texas, West Virginia, and Wyoming.

       5.     "In November 2015, EnerQuest and Braxton Minerals-Appalachia, LLC formed

Braxton Minerals III, LLC, a limited liability company organized under Delaware law. A copy of

the Limited Liability Company Agreement of Braxton Minerals III, LLC (the "BMIII

Agreement") is attached hereto as Exhibit lA. Exhibits B and C and Schedules 4.l(b)(i) and

7.l(b)(i) to the BMIII Agreement have been omitted to protect certain irrelevant and/or

confidential information from unnecessary disclosure. The BMIII Agreement was executed by

myself, as President of EnerQuest, and by Brad Ashburn, as President of Braxton-Minerals-

Appalachia, LLC, dated as of November 10, 2015.

       6.     "The "Previously Acquired Interests" referenced in Section 4.1 of the BMIII

Agreement were composed of 214.40 net mineral acres located in West Virginia. EnerQuest was

not involved in the initial acquisition of those interests by Braxton Minerals II, LLC, Braxton

Minerals-Appalachia, LLC, or any of their managers, owners, or affiliates.

       7.     "EnerQuest committed to contribute up to $10,000,000 in capital to Braxton

Minerals III, LLC. The initial capital contribution of $975,860.17 was to fund BMIII's

acquisition of the aforementioned Previously Acquired            Interests.   Subsequent capital

contributions were to fund the purchase of oil and gas interests acquired after the formation of

BMIII, as described in the BMIII Agreement. Between November 2015 and April 2016,



                                          Page 2of5
EnerQuest fully funded its capital commitment to Braxton Minerals III, LLC. Those funds were

used to purchase certain oil and gas interests in West Virginia and Pennsylvania on behalf of

Braxton Minerals III, LLC.

       8.     "In March 2016, I received a letter dated March 10, 2016 from Brad Ashburn on

behalf Braxton Minerals-Appalachia, LLC. That letter is attached hereto as Exhibit lB. The letter

notified EnerQuest pursuant to Section 4. 5 of the BMIII Agreement that EnerQuest' s remaining

commitment amount was less than $1,000,000 and requested that EnerQuest elect whether it

would contribute additional capital. By email dated April 8, 2016 to Brad Ashburn, I notified

Braxton Minerals-Appalachia, LLC that EnerQuest had elected not to contribute additional

capital to Braxton Minerals III, LLC, according to the terms of the BMIII Agreement. A copy of

my April 8, 2016 email is attached hereto as Exhibit 1C.

       9.     "This triggered a "Liquidity Event" under Section 10.1 of the BMIII Agreement.

According to Section 10.2 of the BMIII Agreement, the above Liquidity Event required Braxton

Minerals-Appalachia, as the initial Manager of Braxton Minerals III, LLC, to, among other

things, propose a liquidator for EnerQuest' s approval who would wind up the affairs of Braxton

Minerals III, LLC and distribute its assets as provided in the BMIII Agreement. However,

Braxton Minerals-Appalachia, LLC failed or refused to timely propose a liquidator as provided

in the BMIII Agreement.

       10.    "On or about August 9, 2017, I, as President of EnerQuest, sent a letter to Braxton

Minerals-Appalachia, LLC, attention to Brad Ashburn and Scott Bauer, demanding that Braxton

Minerals-Appalachia comply with the provisions of the BMIII Agreement by, among other

things, proposing a liquidator as required by Section 10.2 of that Agreement by September 10,




                                          Page 3of5
20I 7. A copy of that letter is attached as Exhibit ID. Braxton Minerals-Appalachia, LLC failed

or refused to comply with EnerQuest' s demand within the specified time.

       I 1.    "On September 29, 2017, I, as President of EnerQuest, executed a Written

Consent of Members of Braxton Minerals III, LLC that, pursuant to certain provisions of the

BMIII Agreement, removed Braxton Minerals-Appalachia, LLC as Manager of Braxton

Minerals III, LLC and subsequently elected EnerQuest to be the replacement Manager. A copy

of the Written Consent is attached hereto as Exhibit IE. On or about the same date, I sent a letter

to Braxton-Minerals-Appalachia, LLC, attention to Brad Ashburn and Scott Bauer, advising it of

EnerQuest's action. A copy of that letter is attached hereto as Exhibit IF.

       12.     "In February 20I 8, I learned that Antero Resources Corporation ("Antero")

suspected that Robert Scott Bauer and John Bradley Ashburn had shared certain documents that

Antero alleged were confidential and proprietary business records and trade secrets. In response,

I searched my files and caused EnerQuest to search its files for the documents identified by

Antero. Certain documents matching the description provided by Antero were located, which

documents were then provided to EnerQuest's counsel, Jeremy Black, to provide to Antero's

counsel.

       13.     "The documents described by EnerQuest were disclosed to me in February 20I 7

or later by Scott Bauer via email and text messages received by me in Oklahoma. Bauer

disclosed the subject documents to me in an effort to solicit EnerQuest to invest in another of

Bauer's mineral acquisition programs. Until February 2018, I did not know that Scott Bauer had

allegedly obtained the subject documents by unlawful means. I did not disclose the subject

information to anyone outside of EnerQuest except for Scott Bauer and Brad Ashburn. To the




                                            Page 4of5
best of my knowledge, no one else with EnerQuest has disclosed the subject information to

anyone outside of EnerQuest except for Scott Bauer and Brad Ashburn."

         FURTHER AFFIANT SA YETH NOT.
                                                          ¢-
                                          Dated this   (J day of April, 2018.


                                          Gre ory
                                          President m tus
                                          EnerQuest Oil & Gas, L.L.C.



         SUBSCRIBED and SWORN TO before me on this /11tay of April, 2018, by Gregory W.
Olson.



(Seal)




                                        Page 5of5
EXHIBIT 1A
                                        LIMITED LIABILITY COMPANY AGREEMENT

                                                                         OF

                                                           BRAXTON MINERALS III, LLC,

                                                      a Delaware Limited Liability Company

                                                                  November 12, 2015




Bra<ton Minerals ill LLC-- LLC Agreement (final_oxeoution copy)




                                                                              -----------------
                                                    TABLE OF CONTENTS


     ARTICLE I - ORGANIZATIONAL MATTERS ............................................ ..... ................... ...... 1
          Section 1.1.  Formation .................. ........... .... ................................................................... 1
          Section 1.2.  Nan1e .... ........ ............. ......~ ...................... ............................. .................. .. .... l
          Section I. 3. Purpose ............. ............................. ............. .. .... .. ..... ....... .... ....... ..... ............ I
          Section 1.4.  Registered Office and Registered Agent; Principal Place of Business ....... I
          Section 1.5.  Foreign Qualification................ .......... .... ...... ....... .. ............. ..................... ... 2
          Section 1.6.  Term ..... ............. .............. .. .... ..... ....... ..... .. ... ... ... ........... .......... ..................... 2
     ARTICLE II- DEFINITIONS AND REFERENCES ...... ............. ... .. ......... .................................. 2
          Section 2.1. Definitions . .................... ....................................... ...................................... 2
          Section 2.2. References and Construction. ..... ........................................ .. ................... .1 1
     ARTICLE III-MEMBERS AND UNITS ................................................................................... 11
          Section 3.1.  Members . .................................................................................................. 11
          Section 3.2.  Additional Members ............................................................ .... ......... ....... .12
          Section 3.3.  Liability to Third Parties ........................................................................... 12
          Section 3.4.  Withdrawal. ........ ... ...... ........... ............. ..................................................... 12
          Section 3.5.  Members Have No Agency Authority . ..................................................... 12
          Section 3.6.  Units .......................................................................................................... 12
          Section 3. 7. Members Right to Act. ................................................................ .. ........... 12
     ARTICLE IV - CAPITALIZATION ........................................................................................... 13
          Section 4.1. Capital Contributions of Members ....... .. .................................................. 13
          Section 4.2. Non-Payment of Capital Contributions .................................................... 16
          Section 4.3. Interest on and Return of Capital Contributions ...................................... .17
          Section 4.4. No Other Capital Contributions .................. ...... ........................................ 17
          Section 4.5. EnerQuest Commitment Amount ............................................................. 17
     ARTICLE V -ALLOCATIONS AND DISTRIBUTIONS ............... .. ......................... ............... 17
          Section 5.1. Allocations for Purposes of Maintaining Capital Accounts ..................... 17
          Section 5.2. Allocations for Federal Income Tax Purposes .......................................... 20
          Section 5.3. Distributions ............................................................................................. 21
     ARTICLE VI- MANAGEMENT AND GOVERNANCE PROVISIONS ................................. 22
          Section 6.1. Management by Manager. ..................... ................................................... 22
          Section 6.2. Removal of Manager. ............................................................................... 22
          Section 6.3. Vacancies ................................................ ........................................... ....... 22
          Section 6.4. Compensation ofManager .............. ........................ ........... ................ ....... 22
          Section 6.5. Actions Requiring Manager and EnerQuest Approval. ............................ 22
          Section 6.6. Officers and other Appointments ... .. ......................................................... 23
     ARTICLE VII-ACCOUNTING AND BANKING MATTERS; CAPITAL ACCOUNTS;
     TAX MATIERS ...................................................... ........... .. ..................................... ................... 24
          Section 7.1.    Books and Records; Reports ... .. ................................................................ 24
          Section 7.2.    Fiscal Year ................................................................................................ 24



                                                                            -ii-



------------------------ -                                                                             -       ---------------
                Section 7.3.         Bank Accooots .......................................................................................... 24
                Section 7.4.         Capital Accounts ....................................................................................... 25
                Section 7.5.         Tax Partnership ......................................................................................... 25
                Section 7 .6.        Tax Elections ............................................................................................ 25
                Section 7. 7.        Tax Matters Partner.................................................................................. 26
                Section 7.8.         Tax Returns ..................................... .......................................................... 26
      ARTICLE VIII-INDEMNIFICATION ...................................................................................... 26
           Section 8.1. Power to Indemnify in Actions, Suits or Proceedings .............................. 26
           Section 8.2. Expenses Payable in Advance . ................................................................ .27
           Section 8.3. Survival ofindemnification and Advancement of Expenses ................... 27
           Section 8.4. Limitation on Indemnification.................................................................. 27
           Section 8.5. No Obligation to Contribute Capital... ...................................................... 27
      ARTICLE IX- DISPOSITIONS OF MEMBERSHIP INTERESTS .......................................... 28
           Section 9.1. Dispositions .............................................................................................. 28
           Section 9.2. Substitution............................................................................................... 28
      ARTICLE X-DISSOLUTION, LIQUIDATION, AND TERMINATION ................................ 28
           Section 10.l. Dissolution................................................................................................ 28
           Section 10.2. Liquidation and Termination.................................................................... 29
           Section 10.3. Deficit Capital Accounts ........................................................................... 30
           Section 10.4. Certificate of Cancellation........................................................................ 30
      ARTICLE XI -ADDITIONAL COVENANTS .......................................................................... 30
           Section 11.1. Exclusive Dealings in the Buy Area......................................................... 30
           Section 11.2. Outside Activities of EnerQuest. .............................................................. 31
           Section 11.3. Confidentiality . ......................................................................................... 31
      ARTICLE XII - GENERAL PROVISIONS ............................ .............. ...................................... 32
           Section 12.1. Notices ..................................... ........................... ...................................... 32
           Section 12.2. Amendment and Waivers ......................................................................... 32
           Section 12.3. Entire Agreement. ..................................................................................... 33
           Section 12.4. Successors and Assigns ............................................................................ 33
           Section 12.5. Governing Law.......................................................................... ............... 33
           Section 12.6. Arbitration .................................................................................. ............... 33
           Section 12.7. Venue and Consent of Jurisdiction; Waiver of Jury Trial. ....................... 33
           Section 12.8. Directly or Indirectly ................................................................................ 34
           Section 12.9. Severability............................................................................................... 34
           Section 12.10. Further Assurances ................................................................................... 34
           Section 12.11. Title to Company Property.................... .. ..... .......................... ... ............... 34
           Section 12.12. No Third Party Beneficiaries .................... ................................................ 34
           Section 12.13. Expenses ................................................................................................... 34
           Section 12.14. Counterparts .............................................................................................. 34




                                                                        -iii-



- - - - ----------------                                           -- --             --
                           LIMITED LIABILITY COMPANY AGREEMENT
                                                       OF
                                     BRAXTON MINERALS III, LLC


             THIS LIMITED LIABILITY COMPANY AGREEMENT, dated as ofNovember 10, 2015
      (the "Effective Date"), is made and entered into by and among the undersigned as the initial
      Members of Braxton Minerals ID, LLC (the "Company") in connection with the formation of the
      Company. Capitalized terms used herein shall have the meanings set forth in Article II unless
      otheiwise defined herein.

                              ARTICLE I- ORGANIZATIONAL MATTERS

                   Section :t t.    Formation. The Company has been formed as a Delaware limited
          liability company by the filing on November 12, 2015, of the Certificate of Formation of the
          Company (the "Certificate") in the office of the Secretary of State of the State of Delaware
          tmder and pursuant to the Act. The Members agree that during the term of the Company, the
          rights and obligations of the Members with respect to the Company will be determined in
          accordance with the terms and provisions of this Agreement and, except where the Act
          provides that such rights and obligations specified in the Act shall apply "unless otherwise
          provided in a limited liability company agreement" or words of similar effect and such rights
          and obligations are set forth in this Agreement, the Act.

                 Section 1.2.      Name. The name of the Company is "Braxton Minerals ill, LLC".
          The business of the Company shall be conducted in the name of the Company. If the
          Applicable Law of a jurisdiction where the Company does business requires the Company to
          do business under a different name, the Manager shall, with the approval of the Members,
          choose another name to do business in such jurisdiction. In such a case, the business of the
          Company in such jurisdiction may be conducted under such other name.

                  Section 1.3.      Purpose. The purposes for which the Company is organized are: (i)
          to acquire, own, hold, and maintain Oil and Gas Interests in the Buy Area and (ii) to engage
          in or perform any and all activities that are related to or incident to the foregoing and that may
          be lawfully conducted by a limited liability company under the Act. In carrying out the
          business and purposes of the Company, the Company may act directly or indirectly through
          one or more entities.

                  Section 1.4.       Registered Office and Registered Agent; Principal Place of
          Business.

              (a)    The registered office of the Company required by the Act to be maintained in the
      State of Delaware shall be the initial registered office named in the Certificate or such other office
      (which need not be a place of business of the Company) as the Manager may designate from time
      to time in the manner provided by law. The registered agent of the Company in the State of
      Delaware shall be the initial registered agent named in the Certificate or such other Person or
      persons as the Manager may designate from time to time.




~-~-----~-~-~-~---~                          -- -----              -    - - - - - - - - - - - - -- - - - - -
          (b)    The principal place of business of the C
  Boulevard, Suite 102 Fort Worth Tex 76107                 om~any shall be 3973 W. Vickery
                      all
  with the consent of Members. '       as       ' or such locat10n as designated by the Manager

              Section 1.5.      Foreign Qualification           p .
      business in any jurisdiction other th D 1 .                nor to the Compruiy' s conducting
           .                                  an e aware, the Company sh 11                1   .
      J:j~~~~~:~s ~~ct~~~~~~~u::~eth~~npany a~ ~ore~gn                     liab~ty ~~:~a:y:~u~~
                                                                      limited
     swear to, and deliver all certificates and goetlr1, ~~c tr em er ag=;es t~ execute, acknowle.dge,
     that are necessary or appro riate t 0 alif er ms      . wnents co1uormmg w 1·th thi s Agreement
     lim~ted liability company Pin aU s~~h J~i~~~~~~~ ~d t~z:ninate the Company as a foreign
     busmess.                                                   m w ich the Company may conduct

          . Section 1.6. . Term. The existence of the Company commenced on the date the
     Certificate was filed with the Secretary of State of Delaware and shall    t·     ·     ·
       fl ·t · di 1               .      .                                   con illUe ill existence
     un I. I Is sso ved and tennmated ill accordance with the tenns of this Agreement.

                     ARTICLE II- DEFINITIONS AND REFERENCES
            Section 2.1.      Definitions.

   .   (a)     ~en ~sed in this Agreement, the following terms have the respective meanings
assigned to them m this Section 2. l(a):

      "Act" means the Delaware Limited Liability Company Act or any successor statute as
amended from time to time.                                                           '

       "Adjusted Capital Account" means the capital account maintained for each Member as
provided in Section 7.4, (i) increased by the amount such Member is obligated to restore pursuant
to Treasury Regulations Section 1. 704-1 (b)(2)(ii)(c) or is deemed obligated to restore under the
penultimate sentences of Treasury Regulation Sections l.704-2(g)(l) and l.704-2(i){5) as
computed in accordance with the applicable Treasury Regulations, and (ii) decreased by the
adjustments provided for in Treasury Regulation Section 1.704-l(b)(2)(ii)(d)(4)-(6). The
foregoing definition of "Adjusted Capital Account" is intended to comply with the provisions of
Treasury Regulation Section 1. 704-1 (b)(2)(ii)(d) and shall be interpreted consistently therewith.

        "Affiliate" means, when used with respect to any Perso~ any Person directly or indirectly
controlling, controlled by, or under common control with such Person. For the purposes of this
definition, the terms "controlling, controlled by, or under common control" mean the
possession, directly or indirectly, of the power to direct or cause the direction of management or
policies (whether through ownership of securities or any partnership or other ownership interest,
by contract or otherwise) of a Person. Without regard to the foregoing, any family member of an
Affiliate of a Person, including without limitation a spouse, shall be deemed to be an Affiliate of
such Person.

        "Agreement" means this Limited Liability Company Agreement, as hereafter amended,
restated, modified or changed in accordance with the terms of this Agreement.



                                                 -2-
       "Allocation Period" means the period beginning on the day after the last day of the
immediately preceding Allocation Period (or with respect to the first such period, the date hereof)
and ending on the earliest to occur of (i) a date on which the Book Value of the Company is
adjusted pursuant to clause (ii) of the definition thereof, or (ii) December 31 of any year.

        "Applicable Law" means any statute, law, rule, or regulation, or any judgment, order, writ,
injunction, or decree of any Governmental Entity to which a specified Person or property is subject.

        "Asset Acquisition" means an acquisition of Oil and Gas Interests by the Company.

         "Book Liability Value" means with respect to any liability of the Company described in
Treasmy Regulation Section l.752-7(b)(3)(i), the amount of cash that a willing assignor would
pay to a willing assignee to assume such liability in an arm's length transaction. The Book
Liability Value of each liability of the Company described in Treasury Regulation Section 1.752-
7(b)(3)(i) shall be adjusted at such times as provided in this Agreement for an adjustment to Book
Values; provided that such adjustments shall be made only if the Manager reasonably determines
that such adjustments are necessary or appropriate to reflect the relative economic interests of the
Members in the Company.

       "Book Value" means, with respect to any property of the Company, such property' s
adjusted basis for federal income tax purposes, except as follows:

        (i)     The initial Book Value of any property contributed by a Member to the Company
shall be the Fair Market Value of such property as of the date of such contribution;

         (ii)    The Book Values of all properties shall be adjusted to equal their respective Fair
Market Values in connection with (A) the acquisition of an additional Membership Interest in the
Company by any new or existing Member in exchange for a Capital Contribution or in exchange
for the perfom1ance of services to or for the benefit of the Company, (B) the distribution by the
Company to a Member of property as consideration for a Membership Interest in the Company,
(C) the liquidation of the Company within the meaning of Treasury Regulation Section 1. 704-
1(b )(2)(ii)(g)(l) (other than pursuant to Section 708(b)(1 )(B) of the Internal Revenue Code) or (D)
at such other times as the Manager shall reasonably detennine necessary or appropriate in order to
comply with Treasury Regulations Sections 1.704-l(b) and 1.704-2; provided that adjustments
pursuant to clauses (A) and (fil above shall be made only if the Manager reasonably dete1mines
that such adjustments are necessary or appropriate to reflect the relative economic interests of the
Members in the Company;

        (iii)  The Book Value of property distributed to a Member shall be the Fair Market Value
of such property as of the date of such distribution;

         (iv)    The B ook Value of all property shall be increased (or decreased) to reflect any
adjustments to the adjusted basis of such property pursuant to Internal Revenue Code Section
734(b) or Internal Revenue Code Section 743(b), but only to the extent that such adjustments are
taken into account in determining capital accounts pursuant to Treasury Regulation Section 1. 704-
l (b )(2)(iv)(m) and clause (vii) of the definition of Profits and Losses or Section 5.l(c)(vii),
provided, however, that Book Values shall not be adjusted pursuant to this clause (iv) to the extent



                                                 -3-
that an adjustment to clause (ii) above is made in connection with a transaction that would
otherwise result in an adjustment pursuant to this clause (iv); and

        (v)    If the Book Value of property has been determined or adjusted pursuant to clause
fil, ill} or (iv) hereof, such Book Value shall thereafter be adjusted by the Depreciation taken into
account with respect to such property for purposes of computing Profits and Losses and by
Simulated Depletion with respect to such property.

        "BMA" means Braxton Minerals-Appalachia, LLC, a Texas limited liability company and
its permitted assignees.

       "Business Day" means a day other than a Saturday or a Sunday, on which commercial
banks are authorized to be open for business with the public in Oklahoma City, Oklahoma.

       "Buy Area" means the States of West Virginia, Pennsylvania, and Ohio.

       "Capital Contribution" means, for any Member at the particular time in question, the
aggregate of the dollar amounts of any cash contributed to the capital of the Company and the Fair
Market Value of any property contributed to the capital of the Company.

         "Commitment Period" means the period beginning on the Effective Date and ending on
the earliest to occur of: (a) the seventh (71h) anniversary of the Effective Date, (b) the election by
EnerQuest to end the Commitment Period, in accordance with Section 4.5 hereof, (c) the
occurrence of a Liquidity Event, or (d) the commencement of a bankruptcy, winding-up or similar
insolvency proceeding involving the Company.

       "Company" means Braxton Minerals III, LLC, a Delaware limited liability company.

        "Company Nonrecourse Deductions" has the same meaning as "nonrecourse deductions"
as set forth in Treasury Regulation Sections 1.704-2(b)(l) and l.704-2(c).

        "Company Nonrecourse Liabilities" means nonrecourse liabilities (or portions thereof)
of the Company for which no Member or related party (within·the meaning of Treasury Regulation
Section l.752-4(b)) bears any economic risk of loss.

        "Company Taxes" means (i) all taxes levied on or with respect to the ownership of the Oil
and Gas Interests acquired by the Company or the production or sale of Hydrocarbons produced
therefrom, including property, ad valorem and severance taxes; provided, however, that where
severance taxes are deducted from gross revenues received by the Compar}.y, such severance taxes
shall not be treated separately as Company Taxes and (ii) all taxes assessed and payable by the
Company in connection with its ownership of the Oil and Gas Interests or income produced
therefrom, including without limitation all income, franchise, profits, margins, capital gains,
capital stock and all other similar taxes; provided, that Company Taxes shali not include any
employee payroll taxes.

       "Depreciation" means, for each Allocation Period, an amount equal to the depreciation,
amortization or other cost recovery deduction (excluding depletion with respect to a Depletable
Property) allowable for federal income tax purposes with respect to property for such Allocation


                                                 -4-
Period, except that (i) with respect to any property the Book Value of which differs from its
adjusted tax basis for federal income tax purposes and which difference is being eliminated by use
of the "remedial method" pursuant to Treasury Regulation Section 1. 704-3(d), Depreciation for
such Allocation Period shall be the amount of book basis recovered for such Allocation Period
under the rules prescribed by Treasury Regulation Section 1.704-3(d)(2), and (ii) with respect to
any other property the Book Value of which differs from its adjusted tax basis at the beginning of
such Allocation Period, Depreciation shall be an amount which bears the same ratio to such
beginning Book Value as the federal income tax depreciation, amortization, or other cost recovery
deduction for such Allocation Period bears to such beginning adjusted tax basis; provided that if
the adjusted tax basis of any property at the beginning of such Allocation Period is zero,
Depreciation with respect to such property shall be determined with reference to such beginning
value using any reasonable method selected by the Manager.

       "Direct Asset Acquisition Costs" means the price actually paid to a seller, including an
agent or representative of seller, of Oil and Gas Interests as part of an Asset Acquisition.

       "Dispose" (including the correlative te1ms "Disposed" or "Disposition") means any sale,
assignment, transfer, conveyance, gift, pledge, distribution, hypothecation or other encumbrance
or any other disposition (excludes an execution of oil, gas and mineral lease), whether voluntary,
involuntary or by operation oflaw, and whether effected directly or indirectly.

       "Distributable Cash Flow" means the amount, if any, by which the Oil and Gas Revenues
received by the Company in any calendar month exceed the sum of (i) the Service Fee payable
with respect to such Oil and Gas Revenues, and (ii) Company Taxes paid during such calendar
month.

       "Electronic Transmission" means a form of communication that (i) does not directly
involve the physical transmission of paper, (ii) creates a record that may be retained, retrieved, and
reviewed by the recipient, and (iii) may be directly reproduced in paper form by the recipient
through an automated process. Electronic Transmission shall include, without limitation,
communication by email and facsimile.

        "EnerQuest" means EnerQuest Oil & Gas, L.L.C., an Oklahoma limited liability company
and its permitted assignees.

        "EnerQuest Commitment Amount" means, with respect to EnerQuest, the amount set
forth opposite its name in Exhibit A under the heading "Commitment Amount," as such amount
may be increased in accordance with this Agreement.

        "Fair Market Value" means, with respect to any property or asset, the fair market value
of such property or asset as reasonably determined by the Manager and approved by the Members;
provided, however, if the Manager and the Members are unable to agree upon the fair market value
of a property or asset, the Company shall engage an independent appraiser that is experienced with
appraising oil and gas assets similar to the Oil and Gas Interests (and which is mutually acceptable
to each of EnerQuest and BMA) to determine the fair market value of the property or assets.
        "GAAP" means United States generally accepted accounting principles and practices,
consistently applied, which are recognized as such by the Financial Accounting Standards Board
(or any generally recognized successor).

        "Good Cause" shall mean the occurrence of any of the following (a) any act or omission
constituting fraud or willful misconduct by Manager; (b) a conviction of a felony or other crime
involving moral turpitude by Manager; (c) the breach of any of the material terms of this
Agreement, which materially and adversely affects the business of the Company, and such breach
remains uncured thirty (30) days after notice from the Company or EnerQuest of such breach; or
(d) the recurring breach in an immaterial respect if such recurring breach is reasonably likely to
impair the conduct of business by the Company and such breach remains uncured thirty (30) days
after notice from the Company or EnerQuest of such breach.

        "Governmental Entity" means any court or tribunal in any jurisdiction (domestic or
foreign) or any governmental or regulatory body, agency, department, commission, board, bureau
or other authority or instrumentality (domestic or foreign).

        "Hydrocarbons" means crude oil, natural gas, condensate, casinghead gas, drip gasoline,
natural gasoline, petroleum, natural gas liquids, products, liquids and other hydrocarbons and other
minerals of every kind and description.

        "Indebtedness" means, with respect to any Person at any date, without duplication, all
(i) indebtedness of such Person for borrowed money; (ii) obligations of such Person for the
deferred purchase price of property or services (other than trade payables incurred in the ordinary
course of such Person's business); (iii) obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments; (iv) indebtedness created or arising under any conditional
sale or other title retention agreement with respect to property acquired by such Person (even
though the rights and remedies of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such property); (v) capital lease obligations of such Person;
(vi) obligations of such Person, contingent or otherwise, as an account party or applicant under
acceptance, letter of credit or similar facilities; (vii) obligations of such Person, contingent or
otherwise, to purchase, redeem, retire or otherwise acquire for value any capital stock of such
Person; (viii) guarantee the obligations of such Person in respect of obligations of the kind referred
to in clauses (i) through (vii) above; and (ix) obligations of the kind referred to in clauses (i)
through (viii) above secured by (or for which the holder of such obligation has an existing right,
contingent or otherwise, to be secured by) any Lien on property (including accounts and contract
rights) owned by such Person, whether or not such Person has assumed or become liable for the
payment of such obligation;.

        "Indirect Asset Acquisition Costs" means all third-party, out of pocket costs and expenses
(other than the Direct Asset Acquisition Costs) incurred by the Company or by the Manager or a
Member on behalf of the Company in connection with identifying and investigating the availability
of Oil and Gas Interests for acquisition by the Company, evaluating such Oil and Gas Interests and
effecting Asset Acquisitions including, but not limited to, travel, title examination costs, brokers'
commissions, attorneys' fees and expenses, environmental and other consultants' fees and
expenses, due diligence fees and expenses and recording costs.




                                                 -6-
       "Initial Target Buy Area" means the area described on Exhibit B.

        "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended from
time to time, and any comparable successor statute or statutes.

        "Lien" means any mortgage, lien (statutory or other), other security agreement,
arrangement or interest; hypothecation, pledge or other deposit arrangement; assignment; charge,
levy, executory seizure, attachment, garnishment, encumbrance (including any easement,
exception, reservation or limitation, right of way, and the like), conditional sale, title retention,
voting agreement or other similar agreement, arrangement, device or restriction, preemptive or
similar right, the filing of any financing statement under the Uniform Commercial Code or
comparable law of any jurisdiction, or any restriction on sale, transfer, assignment, disposition, or
other alienation.

        "Majority Vote" means with respect to the Members, the affirmative vote by the Member
or Members holding Units representing a majority of the Percentage Interests of all Members
entitled to vote thereon.

        "Material Agreement" means any contract, agreement, document, instrument or series of
related contracts, agreements, documents or instruments that would obligate the Company to
expend, incur or transfer assets with a value of $25,000 or more, or which cannot be terminated by
the Company upon notice of thirty (30) days or less without any liability; provided, however, that
neither (i) an agreement to acquire Oil and Gas Interests pursuant to and in accordance with the
terms of this Agreement; nor (ii) execution of an oil, gas and mineral lease; nor (iii) a routine
division order shall be deemed to be a Material Agreement.

       "Member" means each Person executing this Agreement as of the date of this Agreement
as a member or hereafter admitted to the Company as a member as provided in this Agreement,
but such term does not include any Person who has ceased to be a member of the Company.

        ".Member Nonrecourse Debt" means any nomecourse debt of the Company (or portions
thereof) for which any Member or related Person (within the meaning of Treasury Regulation
Section 1.752-4(b)) bears the economic risk ofloss.

       "Member Nonrecourse Debt Minimum Gain" has the same meaning as "partner
nonrecourse debt minimum gain" set forth in Treasury Regulation Section 1. 704-2(i)(2).

        "Member Nonrecourse Deductions" means with respect to any Member Nonrecourse
Debt, the amount of deductions, losses and expenses equal to the net increase during the year in
Member Nonrecourse Debt Minimum Gain with respect to such Member Nonrecourse Debt,
reduced (but not below zero) by proceeds of such Member Nonrecourse Debt distributed during
the year to the Members who bear the economic risk of loss for such debt, as determined in
accordance with applicable Treasury Regulations.

        "Membership Interest" means the interest of a Member in the Company, including the
right of such Member to receive distributions (liquidating or otherwise), to be allocated income,
gain, loss, deduction, credit, or similar items, to receive information, and to grant consents or
approvals.


                                                -7-
        "Minimum Gain" means with respect to Company Nonrecourse Liabilities. the amount of
gain that would be realized by the Company if it Disposed of (in a taxable transaction) all
properties that are subject to Company Nonrecourse Liabilities for no consideration other than full
satisfaction of such liabilities, computed in accordance with applicable Treasury Regulations.

        "Oil and Gas Interests" means interests in and rights with respect to Hydrocarbons, but
limited to fee mineral interests, royalty interests and overriding royalty interests.

       "Oil and Gas Revenues" means the gross receipts of the Company related to the Oil and
Gas Interests but excluding the gross receipts from the Disposition of Oil and Gas Interests.

       "Overhead and Operating Costs" means (i) all general, administrative and operating
expenses incurred by the Company in connection with the operation of the Company' s business,
including, but not limited to, office space, office equipment, office supplies, courier fees, postage,
insurance, legal and accounting fees and expenses, and other third party fees and expenses, (ii)
specifically with respect to Oil and Gas Interests acquired by the Company, all costs and expenses
related to land administration (including, without limitation, title curative costs), the preparation
and filing of reports to Govenunental Entities, the preparation and furnishing of reports to the
Members as provided in this Agreement, division order management and revenue accounting and
distribution, (iii) all limited liability company filing fees. registration fees. qualification fees,
annual fees and similar fees and charges, and (iv) if at any time the Company, with the consent of
the Members, should have employees, all salaries, insurance and other benefits paid or payable to
such employees and all payroll taxes and burdens associated therewith. For purposes of
clarification and to avoid confusion, the term "Overhead and Operating Costs" is intended to cover
and include all costs and expenses incurred by the Company other than Direct Asset Acquisition
Costs, Indirect Asset Acquisition Costs and Company Taxes.

       "Percentage Interest" means with respect to any member, a fraction (expressed as a
percentage), the numerator of which is the number of Units owned by the Member and the
denominator of which is the total number of Units owned by all Members. The Percentage
Interests as of the Effective Date are as set forth on Exhibit A to this Agreement.

        "Person" means any natural person, corporation, limited partnership, general partnership,
limited liability company, joint stock company, joint venture, association, company, estate, trust,
bank trust company, land trust, business trust, or other organization, whether or not a legal entity,
custodian, trustee-executor, administrator, nominee or entity in a·representative capacity and any
government or agency or political subdivision thereof.

       "Proceedings" means all proceedings, actions, claims, suits, investigations and inquiries
by or before any arbitrator or Govenunental Entity.

        "Profits" or "Losses" means, for each Allocation Period, an amount equal to the
Company's taxable income or loss for such period, determined in accordance with Internal
Revenue Code Section 703(a) (for this purpose, all items of income, gain, loss, or deduction
required to be stated separately pursuant to Section 703(a)(l) shall be included in taxable income
or loss), with the following adjustments (without duplication):




                                                 -8-
        (i)    Any income of the Company that is exempt from federal income tax and not
otherwise taken into account in computing Profits and Losses pursuant to this definition of
"Profits" and "Losses" shall increase the amount of such taxable income or decrease the amount
of such taxable loss;

       (ii)    Any expenditures of the Company described in Internal Revenue Code
Section 705(a)(2)(B) or treated as Internal Revenue Code Section 705(a)(2)(B) expenditures
pursuant to Treasury Regulation Section 1. 704-1 (b )(2)(iv)(i), and not otherwise taken into account
in computing Profits or Losses pursuant to this definition of "Profits" and "Losses" shall decrease
the amount of such taxable income or increase the amount of such taxable loss;

          (iii)  In the event the Book Value of any asset is adjusted pursuant to clause (ii) or clause
(iii) of the definition of Book Value, the amount of such adjustment shall be treated as an item of
gain (if the adjustment increases the Book Value of the asset) or an item of loss (if the adjustment
decreases the Book Value of the asset) from the disposition of such asset and shall be taken into
account for purposes of computing Profits or Losses;

        (iv)   In the event the Book Liability Value of any liability of the Company described in
Treasury Regulation Section l.752-7(b)(3)(i) is adjusted as required by this Agreement, the
amount of such adjustment shall be treated as an item of loss (if the adjustment increases the Book
Liability Value of such liability of the Company) or an item of gain (if the adjustment decreases
the Book Liability Value of such liability of the Company) and such items, and any other items
relating to Book Liability Values determined by the Manager to be appropriate in determining
Capital Accounts, shall be taken into account for purposes of computing Profits or Losses;

       (v)     Gain or loss (including Simulated Gain or Loss) resulting from any disposition of
property with respect to which gain or loss is recognized for federal income tax purposes shall be
computed by reference to the Book Value of the property disposed of, notwithstanding that the
adjusted tax basis of such property differs from its Book Value;

       (vi)   In lieu of the depreciation, amortization, and other cost recovery deductions taken
into account in computing such taxable income or loss (excluding depletion with respect to a
Depletable Property), there shall be taken into account Depreciation; and

        To the extent an adjustment to the adjusted tax basis of any asset pursuant to Internal
Revenue Code Section 734(b) is required, pursuant to Treasury Regulation Section l.704-
l(b)(2)(iv)(m)(4), to be taken into account in determining capital account balances as a result of a
distribution other than in liquidation of a Member's interest in the Company, the amount of such
adjustment shall be treated as an item of gain (if the adjustment increases the basis of the asset) or
an item ofloss (if the adjustment decreases such basis) from .the disposition of such asset and shall
be taken into account for purposes of computing Profits or Losses; provided, that any item that is
allocated other than pursuant to Section 5.l(a) shall not be included in computing Profits and
Losses.

      "Remaining EnerQuest Commitment Amount" means, at the time of determination, the
EnerQuest Commitment Amount less all Capital Contributions made (and all unfunded Capital




                                                 -9-
Contributions, if any, required to be made pursuant to previous capital calls) by EnerQuest prior
to such time.

        "Service Fee" means two percent (2%) of the amount, if any, by which the Oil and Gas
Revenues received by the Company in any calendar month exceed the sum of the Company Taxes
paid during such calendar month.

        "Simulated Basis" means, with respect to any Depletable Property, the Book Value of
such property as adjusted to reflect deductions for Simulated Depletion. For purposes of such
computation, the Simulated Basis of each Depletable Property shall be aHocated to each Member
in accordance with such Member's Percentage Interest as of the time such Depletable Property is
acquired by the Company, and shall be reallocated among the Members in accordance with the
Members' Percentage Interest as determined immediately following the occurrence of an event
giving rise to an adjustment to the Book Values of the Company's Depletable Properties pursuant
to clause (ii) of the definition of Book Value.

        "Simulated Depletion" means a depletion allowance computed for each Depletable
Property at the rate determined by the Manager to be permitted by Treasury Regulation Section
1.704-l(b)(2)(iv)(k)(2) provided that such Simulated Depletion shall not exceed Simulated Basis
prior to the adjustment that is caused by such depletion allowance.

         "Simulated Gain or Loss" means the simulated gain or loss computed with respect to a
Disposition of a Depletable Property pursuant to Treasury Regulation Section 1. 704-
1(b )(2)(iv)(k)(2) and by reference to the Simulated Basis of such property.

      "Treasury Regulations" (or any abbreviation thereof used in this Agreement) means
temporary or final regulations promulgated under the Internal Revenue Code.

         (b)   In addition to the defined terms set forth in Section 2.1 (a), the following terms used
in this Agreem~mt are defined in the sections or other subdivisions of this Agreement, as referenced
below:

. Defined Term                                             Reference
  Certificate                                              Section 1.1
  Covered Person                                           Section 8.1
  Current Owner                                            4. l(a)(i)
  Defaulting Member                                        Section 4.2(a)
  Depletable Property                                      Section 5.2(c)
  Effective Date                                           Recitals
  Liquidity Event                                          Section 10.1
  Manager                                                  Section 6.1
  EnerQuest Related Parties                                Section 11.2(a)
  Payment Default                                          Section 4.2(a)
  Previously Acquired Interests                            4.l(a)(i)
  Regulatory Allocations                                   Section 5.l(c)(ix)
  Representatives                                          Section 11.3(a)
  Tax Matters Partner                                      Section 7.7



                                                -10-
 Defined Term                                             Reference
 Units                                                    Section 3 .6(a)


             Section 2.2.     References and Construction.

       (a)     All references in this Agreement to articles, sections, subsections and other
subdivisions refer to corresponding articles, sections, subsections and other subdivisions of this
Agreement unless expressly provided otherwise.

       (b)     Titles appearing at the beginning of any of such subdivisions are for convenience
only and shall not constitute paii of such subdivisions and shall be disregarded in construing the
language contained in such subdivisions.

        (c)     The words "this Agreement", "this instrument", "herein", "hereof', "hereby",
"hereunder" and words of similar import refer to this Agreement as a whole and not to any
particulai· subdivision unless expressly so llmited.

        (d)    Words in the singular form shall be construed to include the plural and vice versa,
unless the context otherwise requires.

       (e)     Pronouns in masculine, feminine, or neuter gender shall be construed to state and
include any other gender.

        (:t)     Examples shall not be construed to limit, expressly or by implication, the matter
they illustrate.

       (g)      The word "or" is not exclusive and the word "includes" and its derivatives means
"includes, but is not limited to" and corresponding derivative expressions.

        (h)     No consideration shall be given to the fact or presumption that one party had a
greater or lesser hand in drafting this Agreement.

       (i)     All references in this Agreement to"$" or "dollars" shall refer to U.S. Dollars.

        G)      Unless the context otherwise requires or unless otherwise provided in this
Agreement, the terms defined in this Agreement which refer to a particular agreement, instrument
or document shall also refer to and include all renewals, extensions, modifications, amendments
or restatements of such agreement, instrument or document, provided that nothing contained in
this subsection shall be construed to authorize such renewal, extension, modification, amendment
or restatement.

                            ARTICLE III- MEMBERS AND UNITS

         Section 3.1.        Members. The names and addresses of the Members of the
    Company are set forth in Exhibit A.




                                               -11-
             Section 3.2.    Additional Members. Additional Persons may be admitted to the
     Company as Members only as specifically provided in this Agreement; provided, that no.
     additional Person shall be admitted as a Member without the unanimous consent of the
     Members.

            Section 3.3.       Liability to Third Parties. No Member or any officer, director,
     manager or partner of such Member, solely by reason of being a Member, shall be liable for
     the debts, obligations or liabilities of the Company, including under a judgment decree or
     order of a court.

              Section 3.4.   Withdrawal. No Member shall have the right to withdraw, resign
     or retire from the Company as a Member.

            Section 3.5.     Members Have No Agency Authority. Except as expressly
     provided in this Agreement, no Member (in its capacity as a member of the Company) shall
     have any agency authority on behalf of the Company.

              Section 3.6.

       (a)   The Company shall have one (1) class of Membership Interests consisting of 1,000
authorized Membership Interests, which shall be referred to in this Agreement as "Units".

        (b)     The Units shall be uncertificated.

        (c)     Exhibit A sets forth the number of Units owned by each Member as of the date set
forth therein. The Manager may amend Exhibit A from time to time to reflect any changes thereto
resulting from any additional subscriptions, issuances, transfers, or admissions effected in
accordance with this Agreement.

            Section 3.7.     Members Right to Act. Actions and decisions requiring the
    approval of the Members may be authorized or made by a Majority Vote of the Members
    taken at a meeting of the Members, or by written consent without a meeting, as permitted
    herein.

        (a)     Meetings. Meetings of Members may be called any Member holding twenty five
percent (25%) or more of the Percentage Interests. Meetings may be called to consider approval
of an action or decision under any provision of this Agreement by delivering to each Member
notice of the time, place and purpose of the meeting at least three (3) Business Days before the day
of the meeting. A Member may waive the requirement of notice of a meeting either by attending
the meeting or executing a written waiver before or after the meeting.

        (b)     Quorum. The holders of more than fifty percent (50%) of the Percentage Interests
present in person or by proxy, shall constitute a quorum for the transaction of business at all meetings
of the Members; provided, however, unless the meeting of the Members involves (i) the potential
removal of BMA as Manager or (ii) a potential of the Company taking action against BMA, a quorum
shall only be met if BMA is present at such meeting either in person or by proxy.




                                                 -12-
        (c)     Voting. Each Member shall at every meeting of Members be entitled to vote, in
person or by proxy. Unless otherwise provided by law, no proxy shall be voted on after six (6) months
from its date. All matters shall be decided by a Majority Vote of the Members, in person or by proxy,
except as otherwise required by this Agreement or the Act.

         (d)    Action by Written Consent. Any action required or pennitted to be taken at a
meeting of the Members may be taken without a meeting, without prior notice, and without a vote, if
a consent in writing, setting forth the action so taken, shall be signed by the Members having not less
than the minimum percentage of votes which would be necessary to authorize or take such action at
a meeting at which all Members entitled to vote thereon were present and voted. The Manager may
fix, in advance, the record date for determining the Members entitled to express consent to action in
writing without a meeting. Any written consent of the Members must be delivered to each of the
Members at approximately the same time and no less than 48 hours prior to the proposed effectiveness
of such consent, which advance notice requirement may be waived by the unanimous consent of the
Members.

        (e)     Presence at Meeting. Members may participate in a meeting of the Members by
means of a conference telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and such participation shall be deemed present in
person at such meeting.

        (f)   Records of Meetings. The Company shall maintain permanent records of all actions
taken by the Members, including minutes of Company meetings, copies of actions taken by consent
of the Members and copies of proxies

                              ARTICLE IV - CAPIT ALIZATION

             Section 4.1.      Capital Contributions of Members.

       (a)     Initial Capital Contributions.

                (i)    Prior to the date of this Agreement, BMA or an Affiliate ofBMA acquired
       those certain Oil and Gas Interests described on Exhibit C, attached hereto and made a
       part hereof (the "Previously Acquired Interests"), covering the net mineral acres and for
       the consideration set forth on Exhibit C. BMA has provided to EnerQuest copies of the
       mineral deeds or other instruments pursuant to which the Previously Acquired Interests
       were acquired, together with title reports, satisfactory to EnerQuest, confirming title to the
       Previously Acquired Interests in the grantors of such interests at the time such interests
       were acquired. BMA hereby represents and warrants to EnerQuest that (A) all agreed
       compensation to be paid for the Previously Acquired Interests has been paid in full, (B) all
       of the Previously Acquired Interests cover lands lying within the Initial Target Buy Area,
       (C) at least ninety percent (90%) of the Previously Acquired Interests (as determined on a
       total net mineral acre basis) cover lands lying entirely within one or more units for which
       a drilling permit has been issued for the drilling of a horizontal well to test the Marcellus
       or Utica formation, and (D) that the current record and beneficial owner of the Previously
       Acquired Interests is Braxton Minerals II, LLC (the "Current Owner"). Within five (5)
       Business Days from the Effective Date, BMA will cause the Company to acquire the



                                                 -13-
Previously Acquired Interests from the Current Owner for a purchase price equal to the
original acquisition cost of such interests, as set forth in Exhibit C, less the sum of all oil
and gas revenues actually received by BMA and its Affiliates with respect to the Previously
Acquired Interests from and after the date acquired. At the closing of such acquisition,
EnerQuest will fund, as its initial contribution to the capital of the Company, the purchase
price (calculated as hereiljlabove provided) of the Previously Acquired Interests by wire
transfer of immediately a~ailable funds to the Current Owner, and the Current Owner will
execute and deliver to the Company, as grantee, one or more mineral deeds to the
Previously Acquired Interests, each in a form suitable for recording in the various counties
in which such interests are located.

         (ii)    Prior to or concurrently with the closing of the acquisition by the Company
of the Previously Acquired Interests, BMA will fund, as its initial capital contribution to
the capital of the Company, the sum of $210,000 in cash, which shall be deposited to the
credit of the Company in the operating account theretofore established by the Manager in
a state or federally chartered bank as the principal bank account of the Company. $200,000
of such sum shall be used to reimburse BMA for the acquisition of previously acquired
title.

(b)     Subsequent Capital Contributions by EnerQuest.

         (i)     At such time as Manager has identified additional Oil and Gas Interests for
possible acquisition by the Company that cover lands lying entirely within the Initial Target
Buy Area and at least ninety percent (90%) (as determined on a total net mineral acre basis)
within one or more units for which a drilling permit has been issued for the drilling of a
horizontal well to test the Marcellus or Utica formation, Manager shall furnish to
EnerQuest (A) a list of the Oil and Gas Interests so identified by Manager including, with
respect to each such interest, the name of the grantor, any relevant tract number or other
identifier, the legal location, the net mineral acres covered, and the actual acquisition cost
per acre (which in no event shall be greater than $6,200 per acre), (B) certification by the
Manager that each such interest covers lands lying within the Initial Target Buy Area and
at least ninety percent (90%) (as determined on a total net mineral acre basis) within one
or more units for which a drilling permit has been issued for the drilling of a horizontal
well to test the Marcellus or Utica formation, together with a copy of each such approved
drilling permit, (C) an ownership report prepared by a petroleum landman, in form and
substance reasonably satisfactory to EnerQuest, showing record title to each such interest
in the name of the grantor listed, (D) a request for a contribution by EnerQuest to the capital
of the Company of an amount equal to the total Direct Asset Acquisition Costs of such
interests, and (E) a completed schedule delivered via email in excel format in the form
attached hereto as Schedule 4.l(b)(i) providing additional information with respect to the
Oil and Gas Interests proposed to be acquired and Oil and Gas Interests previously
acquired, and (F) other material supporting such acquisition as reasonably requested by
EnerQuest. Within five (5) Business Days after receipt of such information and request,
EnerQuest shall contribute to the capital of the Company, by wire transfer to the financial
institution(s) and account(s) specified by Manager for payment of drafts, checks, cashiers'
checks, or another form of cash equivalent transaction issued to the grantors of the Oil and
Gas Interests to be acquired, the full amount of the requested capital contribution. In no


                                         -14-
event shall Manager furnish to EnerQuest more than one (1) such request in any seven (7)
day period.

        (ii)    Notwithstanding the foregoing, in the event an Oil and Gas Interest
proposed by Manager for acquisition pursuant to a request described as clause (i) above is
an overriding royalty interest, then Manager shall include with such request more specific
information concerning such overriding royalty interest, including infonnation concerning
the oil and gas leases out of which such interest has been reserved or carved-out and the
remaining term of each such lease. EnerQuest shall not be obligated to approve or fund
the acquisition of any overriding royalty interest which EnerQuest, acting in good faith,
determines does not satisfy its expectations with respect to the types of interests to be
acquired by the Company. EnerQuest and BMA shall work together to establish suitable
terms generally applicable to the acquisition of overriding royalty interests. Any overriding
royalty interest proposed by Manager for acquisition by the Company pursuant to this
clause (ii) and not approved by EnerQuest may be acquired by Manager or any Affiliate of
Manager for its own account or Manager may offer the opportunity to acquire such
overriding royalty interest to a third party. If EnerQuest does not approve the acquisition
of an overriding royalty interest presented to it pursuant to this clause (ii), neither
EnerQuest nor any of its Affiliates shall directly or indirectly acquire such overriding
royalty interest outside of the Company.

        (iii)   Manager may, in addition to proposing the acquisition of Oil and Gas
Interests meeting the criteria set forth in clause (i) above, propose the acquisition of Oil
and Gas Interests covering lands lying within the Buy Area but outside the Initial Target
Buy Area or that otherwise do not meet such criteria. Such proposal shall include all of
the information described in clause (i) above, together with specific identification of the
attributes of such proposal that do not meet the criteria described in clause (i). In such
event, Manager and EnerQuest shall discuss the proposed acquisition and if approved by
EnerQuest in its sole discretion, then Manager may proceed to acquire any such interests
so approved by EnerQuest and EnerQuest will proceed to fund the capital required to
acquire such interests in the same manner provided in clause (i) above. EnerQuest may
approve the acquisition of one or more but less than all of the Oil and Gas Interests so
proposed. Any Oil and Gas Interest proposed by Manager for acquisition by the Company
pursuant to this clause (iii) and not approved by EnerQuest may be acquired by Manager
or any Affiliate of Manager for its own account or Manager may offer the opportunity to
acquire such Oil and Gas Interest to a third party. If EnerQuest does not approve the
acquisition of an Oil and Gas Interest presented to it pursuant to this clause (iii), neither
EnerQuest nor any of its Affiliates shall directly or indirectly acquire such Oil and Gas
Interest outside of the Company.

        (iv)   In addition to the foregoing, EnerQuest shall contribute to the capital of the
Company, within five (5) business days after receipt of a request therefor from the
Manager, cash in an amount equal to 75% of all Company Taxes. Each such request shall
include copies of tax bills and such other information sufficient for EnerQuest to ascertain
the nature and amount of the taxes being assessed and the properties to which such taxes
relate.



                                        -15-
                (v)     Notwithstanding anything contained herein to the contrary, in no event shall
        EnerQuest ever be obligated to contribute to the capital of the Company sums that exceed
        in the aggregate the EnerQuest Commitment Amount; provided, however, that the
        limitation set forth in this Section 4.1 (b )(v) shall not apply to EnerQuest' s obligation to
        make capital contributions to fund Company Taxes pursuant to Section 4.1 (b )(iv).

               (vi)    In no event shall EnerQuest be obligated to make a capital contribution to
        the Company after the expiration or termination of the Commitment Period; provided,
        however, that the limitation set forth in this Section 4.l(b)(vi) shall not apply to
        EnerQuest's obligation to make capital contributions to fund Company Taxes pursuant to
        Section 4.l(b)(iv).

                (vii) All Oil and Gas Interests acquired by the Company shall be acquired and
        held in the name of the Company and not in the name of the Manager, another Member, or
        a nominee, trustee or other title holder for the account of the Company.

         (c)    Subsequent Capital Contributions by BMA. For so long as BMA is the
Manager, Manager shall furnish to BMA, not more often than weekly, a written request to furnish
additional capital to the Company as may be necessary to fund and pay, fully and in a timely
manner (A) 100% of all Overhead and Operating Costs, (B) 100% of all Indirect Asset Acquisition
Costs, (C) 25% of all Company Taxes, and (D) such amount of cash on hand as Manager
reasonably believes will be required by the Company to conduct normal business activities until
the next capital call is funded. Each such request shall include a general description of the
expenditures for which capital is being requested. Within five (5) Business Days after receipt of
such information and request, BMA shall contribute to the capital of the Company, by wire transfer
of immediately available funds in accordance with wire transfer instructions provided by Manager,
the full amount of capital so requested. Notwithstanding the foregoing, for so long as BMA is the
Manager of the Company, the above described procedures shall not be applicable; rather, BMA
shall be required to contribute to the capital of the Company, from time to time as and when
necessary, such funds as may be required to pay in a timely manner when due all of the costs and
expenses described at clauses (A) through (D) above. For the avoidance of doubt, ifBMA ceases
to be the Manager, all of its obligations to make capital contributions pursuant to this Section 4.1 (c)
shall terminate.

             Section 4.2.      Non-Payment of Capital Contributions.

       (a)     If any Member fails for any reason to make a Capital Contribution required
pursuant to the terms of this Agreement (a "Payment Default"), such Member shall be provided
with written notice from the Manager (or from any Member if the Member in default is also the
Manager) of such Payment Default and given a period of ten (10) Business Days after receipt of
such written notice to cure such Payment Default. If such Member fails to cure such Payment
Default, such Member shall be a "Defaulting Member''.

        (b)    In addition to the foregoing, the Company shall have the right to pursue any remedy
existing at law or in equity for the collection of the unpaid amount of the Capital Contributions
agreed to be made in Section 4.1, including the prosecution of a suit against the Defaulting
Member. In the event the Defaulting Member is the Manager, the other Members may, by Majority



                                                 -16-
Vote of such Members, designate a Member to act as Manager in prosecuting such lawsuit on
behalf of the Company. The Defaulting Member shall be liable for the costs and expenses
(including attorneys' fees and expenses) incurred by the Company or any other Member arising
under this Section 4.2.

     (c)         No Member shall be obligated to contribute any amount unpaid by a Defaulting
Member.

            Section 4.3.      Interest on and Return of Capital Contributions. No interest
    shall accrue on any Capital Contributions and no Member shall have the right to demand or
    require the return of its Capital Contributions except to the extent, if any, that distributions
    made pursuant to the express terms of this Agreement may be considered as such by
    Applicable Law or by unanimous agreement of the Members, or upon dissolution and
    liquidation of the Company, and then only to the extent expressly provided for in this
    Agreement and as permitted by Applicable Law.

           Section 4.4.     No Other Capital Contributions. The obligations of the Members
    to make Capital Contributions to the Company are contained only in this Article IV and,
    except as provided therein, no Members shall have any obligation to make a Capital
    Contribution to the Company

             Section 4.5.     EnerOuest Commitment Amount. The Manager shall provide
    written notice to EnerQuest when the Remaining EnerQuest Commitment Amount is less than
    $1,000,000. EnerQuest shall have thirty (30) days from its receipt of such written notice to
    notify the Manager of its decision to increase the EnerQuest Commitment Amount by the sum
    of $10,000,000, in which event the EnerQuest Commitment Amount shall thereafter be
    $20,000,000 for all purposes hereunder (and which, consistent with the procedures outlined
    in this Section 4.5, may be further increased by additional $10,000,000 tranches). In the event
    EnerQuest elects not to increase the EnerQuest Commitment Amount or fails to respond to
    Manager within such thirty (30) day period, then upon the first to occur of (i) such time as
    EnerQuest has funded the EnerQuest Commitment Amount in full, or (ii) a period of sixty
    (60) days has expired since the end of the thirty (30) day period, a Liquidity Event shall occur,
    as provided in Section 10.1 and the Commitment Period shall terminate.

                  ARTICLE V - ALLOCATIONS AND DISTRIBUTIONS

            Section 5.1.      Allocations for Purposes of Maintaining Capital Accounts.

        (a)     Except as set in this Section 5.1 or Section 10.2 in connection with liquidating
distributions, Profits or Losses (and, if necessary, items of income, gain, loss and deduction) for
each Allocation Period shall be allocated among the Members in accordance with their respective
Percentage Interests.

       (b)    Upon a sale or disposition (or a deemed sale or disposition in conjunction with a
Liquidity Event) of all or a portion of the Company's assets, items of Company income, gain, loss,
and deduction (determined in the same manner as such items are determined for purposes of
determining Profits or Losses) attributable to such event, all items of Company income, gain, loss,
and deduction (determined in the same manner as such items are determined for purposes of


                                               -17-
determining Profits or Losses) for the Allocation Period in which such sale or disposition occurs
and each succeeding Allocation Period shall be allocated among the Members (in each case
allocating items of income and gain differently than items of deduction and loss, if necessary) in
such a manner as shall cause the capital account of each Member as adjusted through the end of
each Allocation ·Period (including the effect of allocations pursuant to Section 5 .1 (c) therefor), to
equal, as nearly as possible, the amount necessary such that the Members' relative capital account
balances reflect the Percentage Interests as it relates to such portion of the Company's assets
included in such sale or disposition (or all of the Company's assets in the case of a deemed sale or
disposition in conjunction with a Liquidity Event).

        (c)     Notwithstanding any of the foregoing provisions ofthis Section 5.1 to the contrary,
items of the Company's income, gain, loss, and deduction for each Allocation Period (determined
in the same manner as such items are determined for purposes of determining Profits or Losses)
shall be allocated among the Members as follows:

              (i)     If during any Allocation Period there is a net increase in Member
       Nonrecourse Debt Minimum Gain that gives rise to Member Nonrecourse Deductions,
       each Member bearing the economic risk of loss for such Member Nonrecourse Debt shall
       be allocated items of Company deductions and losses for such period equal to such
       Member's share of Member Nonrecourse Deductions, as determined in accordance with
       applicable Treasury Regulations. If during any Allocation Period there is a net increase in
       Minimum Gain that gives rise to Company Nonrecourse Deductions, each Member shall
       be allocated items of Company deductions and losses for such period equal to such
       Member's share of such net increase, as determined in accordance with applicable Treasury
       Regulations.

                (ii)   If for any Allocation Period there is a net decrease in Minimum Gain
       attributable to Company Nonrecourse Liabilities, each Member shall be allocated items of
       Company income and gain for such period equal to such Member's share of such net
       decrease, as determined in accordance with applicable Treasury Regulations. This clause
       (ii) is intended to comply with the minimum gain chargeback requirement in Treasury
       Regulation Section l.704-2(f) and shall be interpreted consistently therewith.

               (iii)   If for any Allocation Period there is a net decrease in Member Nonrecourse
       Debt Minimum Gain, each Member bearing the economic risk of loss for such Member
       Nonrecourse Debt shall be allocated items of Company income and gain for such period
       equal to such Member's share of such net decrease as determined in accordance with
       applicable Treasury Regulations. This clause (iii) is intended to comply with the partner
       nonrecourse debt minimum gain chargeback requirement in Treasury Regulation Section
       1. 704-2(i)(4) and shall be interpreted consistently therewith.

                (iv)    In the event that a Member unexpectedly receives any adjustment,
       allocation or distribution described in Treasury Regulations Section 1. 704-
       1(b )(2)(ii)(d)(4)-(6) that causes or increases a deficit balance in such Member's Adjusted
       Capital Account, items of Company income and gain shall be allocated to that Member in
       ar1 amount and manner sufficient to eliminate the deficit balance as quickly as possible;
       provided that, an allocation pursuant to this clause (iv) shall be made only if and to the


                                                 -18-
extent that such Member would have deficit Adjusted Capital Account balance after all
other allocations provided for in this Article V have been tentatively made as if this clause
(iv) were not in this Agreement. It is intended that this clause (iv) qualify and be construed
as a "qualified income offset" within the meaning of Treasury Regulation Section 1. 704-
1(b)(2)(ii)(d).

        (v)     In the event that any Member has a deficit balance in its Adjusted Capital
Account at the end of any Allocation Period, such Member shall be allocated items of
Company gross income and gain in the amount of such deficit as quickly as possible;
provided that an allocation pursuant to this clause (v) shall be made only if and to the extent
that such Member would have a deficit balance in its Adjusted Capital Account after all
other allocations provided for in this Article V have been tentatively made as if clause (iv)
and this clause (v) were not in this Agreement.

       (vi)     Simulated Depletion for each Depletable Property and Simulated Loss upon
the Disposition of a Depletable Property shall be allocated among the Members in
proportion to their shares of the Simulated Basis in such property.

         (vii) To the extent an adjustment to the adjusted tax basis of any Company
properties pursuant to Internal Revenue Code Section 734(b) or Internal Revenue Code
Section 743(b) is required pursuant to Treasury Regulation Section 1.704-
1(b)(2)(iv)(m)(2) or 1. 704-1 (b)(2)(iv)(m)(4) to be taken into account in determining capital
accounts as the result of a distribution to any Member in complete liquidation of such
Member's Membership Interest, the amount of such adjustment to Capital Accounts shall
be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if
the adjustment decreases such basis) and such gain or loss shall be allocated to the
Members in accordance with Treasury Regulation Section l.704-l(b)(2)(iv)(m)(2) if such
Section applies, or in accordance with Treasury Regulation Section 1. 704-
1(b )(2)(iv)(m)(4 ), if such Section applies.

         (viii) The losses and deductions allocated pursuant to this Section 5.1 shall not
exceed the maximum amount of losses and deductions that can be allocated to a Member
without causing or increasing a deficit balance in the Member's Adjusted Capital Account.
If~ at the end of any Allocation Period, as a result of the allocations otherwise provided for
in this Section 5.1, the Adjusted Capital Account balance of any Member shall become
negative, items of deduction and loss otherwise allocable to such Member for such period,
to the extent such items would have caused such negative balance, shall instead be allocated
to Members having positive Adjusted Capital Account balances remaining at such time in
proportion to such balances.

        (ix)    The allocations set forth in Sections 5.l(c)(i) through (ix) (collectively, the
"Regulatory Allocations") are intended to comply with certain requirements of the
Treasury Regulations. It is the intent of the Members that, to the extent possible, all
Regulatory Allocations that are made be offset either with other Regulatory Allocations or
with special allocations pursuant to this Section 5.1 (c)(x). Therefore, notwithstanding any
other provisions of this Section 5.1 (other than the Regulatory Allocations), the Manager
shall make such offsetting special allocations in whatever manner they determine


                                         -19-
       appropriate so that, after such offsetting allocations are made, each Member's Adjusted
       Capital Account balance is, to the extent possible, equal to the Adjusted Capital Account
       balance such Member would have had if the Regulatory Allocations were not part of this
       Agreement and all Company items were allocated pursuant to the remaining subsections
       of this Section 5 .1.

            Section 5.2.      Allocations for Federal Income Tax Purposes.

      (a)   Except as otherwise provided in this Section 5.2, the taxable income or loss of the
Company (and items thereof) for any taxable year shall be allocated among the Members to the
maximum extent possible in the same manner as the corresponding items (if any) are allocated
among the Members for purposes of maintaining their capital accounts.

         (b)     In accordance with Section 704(c) of the Internal Revenue Code, the Treasury
Regulations thereunder, and the portions of the Treasury Regulations under Section 704(b) that
apply the principles of Section 704(c), income and deductions with respect to any property carried
on the books of the Company at an amount that differs from such property' s adjusted tax basis
shall, solely for federal income tax purposes, be allocated among the Members in a manner to take
into account any variation between the adjusted tax basis of such property to the Company and
such book value. In making such allocations, the Manager shall use such method or methods as it
determines to be reasonable and in accord with applicable Treasury Regulations.

        (c)    Cost and percentage depletion deductions with respect to property the production
from which is subject to depletion (herein sometimes called "Depletable Property") shall be
computed separately by the Members rather than the Company. For purposes of such
computations, the federal income tax basis of each Depletable Property shall be allocated to each
Member in accordance with such Member's Percentage Interest as of the time such Depletable
Property is acquired by the Company, and shall be reallocated among the Members in accordance
with the Members' Percentage Interest as determined immediately following the occurrence of an
event giving rise to an adjustment to the Book Values of the Company's Depletable Properties
pursuant to clause (ii) of the definition of Book Value (or at the time of any material additions to
the federal income tax basis of such Depletable Property). Such allocations are intended to be
applied in accordance with the "partners' interests in partnership capital" under Section
613A(c)(7)(D) of the Internal Revenue Code; provided that the Members understand and agree
that the Manager may authorize special allocations of tax basis, income, gain, deduction or loss,
as computed for federal income tax purposes, in order to eliminate differences between Simulated
Basis and adjusted federal income tax basis with respect to Depletable Properties, in such manner
as determined consistent with the principles of Section 704(c) of the Internal Revenue Code, the
Treasury Regulations thereunder and the portions of the Treasury Regulations under Section
704(b) that apply the principles of Section 704(c).

        (d)      For purposes of the separate computation of gain or loss by each Member on the
taxable Disposition of Depletable Property, the amount realized from such Disposition shall be
allocated (i) first, to the Members in an amount equal to the Simulated Basis in such Depletable
Property and in the same proportion as their shares thereof were allocated and (ii) second, any
remaining amount realized shall be allocated consistent with the allocation of Simulated Gains;
provided, however, that the Members understand and agree that the Manager may authorize special


                                               -20-
allocations of tax basis, income, gain, deduction or loss, as computed for federal income tax
purposes, in order to eliminate differences between Simulated Basis and adjusted federal income
tax basis with respect to Depletable Properties, in such manner as determined consistent with the
principles of Section 704(c) of the Internal Revenue Code, the Treasury Regulations thereunder
and the portions of the Treasury Regulations under Section 704(b) that apply the principles of
Section 704(c). The provisions of this Section 5.2(d) and the other provisions of this Agreement
relating to allocations under Section 613A(c)(7)(D) of the Internal Revenue Code are intended to
comply with Treasury Regulation Section 1. 704-1 (b )(4)(v) and shall be interpreted and applied in
a manner consistent with such Treasury Regulations.

        (e)    Each Member shall separately keep records of its share of the adjusted tax basis in
each Depletable Property, adjust such share of the adjusted tax basis for any cost or percentage
depletion allowable with respect to such property and use such adjusted tax basis in the
computation of its cost depletion or in the computation of its gain or loss on the disposition of such
property by the Company. Upon the request of the Company, each Member shall advise the
Company of its adjusted tax basis in each Depletable Property and any depletion computed with
respect thereto, both as computed in accordance with the provisions of this subsection. The
Company may rely on such information and, if it is not provided by the Member, may make such
reasonable assumptions as it shall determine with respect thereto.

       (f)    All recapture of income tax deductions resulting from the taxable Disposition of
Company property shall, to the maximum extent possible, be allocated to the Member to whom
the deduction that gave rise to such recapture was allocated hereunder to the extent that such
Member is allocated any gain from the Disposition of such property.

        (g)     All items of income, gain, loss, deduction, and credit allocable to any Membership
Interest that may have been transferred shall be allocated between the transferor and the transferee
based on the portion of the calendar year during which each was recognized as owning such
interest, without regard to whether cash distributions were made to the transferor or the transferee
during that calendar year; provided, however, that this allocation must be made in accordance with
a method permissible under Section 706 of the Internal Revenue Code and the applicable Treasury
Regulations.

        (h)     In the event the Units are issued to a Person and the issuance of such Units results
in items of income or deduction to the Company, such items of income or deduction shall be
allocated to the Members immediately before the issuance of such Units.

            Section 5.3.       Distributions.

       (a)     Except as provided in Article X, distributions from the Company shall be made as
provided in this Section 5.3.

               (i)    Distributable Cash Flow shall be distributed 75% to EnerQuest and 25% to
       BMA on a monthly basis on or before the 15th day following the month for which such
       Distributable Cash Flow is calculated.

               (ii)   Proceeds from Asset Disposition other than in connection with a liquidating
       distribution shall be distributed 75% to EnerQuest and 25% to BMA.


                                                -21-
               (iii)  Upon dissolution of the Company, liquidating distributions shall be made
       as provided in Article X.

       (b)     Payment of all cash distributions made by the Company to a Member shall be made
by wire transfer of immediately available funds in accordance with such written instructions to the
Company as may be provided by such Member from time to time.

        (c)    The Company shall withhold tax on distributions or otherwise as required by
Applicable Law, and such withheld amounts shall be considered distributions received by
Members for purposes ofthis Agreement. The Members shall furnish to the Manager from time
to time all such information as is required by Applicable Law or otherwise reasonably requested
by the Manager (including certificates in the form prescribed by the Internal Revenue Code and
applicable Treasury Regulations or applicable state, local, or foreign law) to permit the Manager
to ascertain whether and in what amount withholding is required of the Members.

             ARTICLE VI- MANAGEMENT AND GOVERNANCE PROVISIONS

              Section 6.1.    Management by Manager.

        (a)    Except for matters in which the approval of the Members is required by this
Agreement or by nonwai vable provisions of the Act, the powers of the Company shall be exercised
by or under the authority of, and the business and affairs of the Company shall be managed under
the direction of a manager (the "Manager").

       (b)      BMA shall be the initial Manager.

           Section 6.2.   Removal of Manager. The Manager may be removed, with or
    without cause, by a Majority Vote of the Members; provided, however, that so long as
    EnerQuest and BMA are the sole Members, BMA may be removed as Manager only for Good
    Cause.

          Section 6.3.       Vacancies. In the event of the resignation or removal of a Manager,
    the Members shall select a replacement Manager through the Majority Vote of the Members.

          Section 6.4.     Compensation of Manager. As sole compensation for its services
    as Manager of the Company, the Manager shall be entitled to a monthly payment by the
    Company of the Service Fee.

              Section 6.5.    Actions Requiring Manager and EnerOuest Approval.

       (a)     Until such time as the Manager resigns or is removed, the Manager is hereby
delegated the day-to-day authority to manage the Company and, subject to the provisions of this
Agreement, make decisions on behalf of the Company.

       (b)     Notwithstanding any other provision of this Agreement, neither the Company, nor
the Manager, nor any of its officers, employees or agents acting on behalf of the Company, shall
take any of the following actions without having first received the approval of EnerQuest:



                                               -22-
               (i)      acquire any asset, property right or interest other than Oil and Gas Interests;

               (ii)     acquire any Oil and Gas Interest not satisfying the criteria set out in Section
       4.l(a)(i) or 4.l(b)(i);

               (iii)    sell, assign or otherwise Dispose of any Oil and Gas Interest;

               (iv)   enter into or conduct any business other than the acquisition and ownership
       of Oil and Gas Interests;

               (v)      participate as a working interest owner in the drilling of any well;

               (vi)     issue any Units;

               (vii)    enter into a Material Agreement;

               (viii)   hire any Person as an employee of the Company;

               (ix)     create, incur, assume, guarantee, refinance or prepay any Indebtedness;

              (x)      guarantee in the name or on behalf of the Company the performance of any
       contract or other obligation of any Person other than the Company or any of its subsidiaries;

               (xi)   mortgage, pledge, assign in trust or otherwise encumber any property or
       assets of the Company or its subsidiaries, or assign any monies owed or to be owed to the
       Company or its subsidiaries;

               (xii)    admit any other Person as a Member;

              (xiii) acquiesce to the appointment of a receiver or trustee or initiate or commence
       any bankruptcy, winding-up or similar insolvency proceeding involving the Company;

               (xiv)    obligate or cause the Company to liquidate or dissolve; or

               (xv) take any action, authorize or approve, or enter into any binding agreement
       with respect to or otherwise commit to do any of the foregoing.

            Section 6.6.       Officers and other Appointments.

        (a)     The Manager may, from time to time, designate one or more persons to be officers
of the Company; however, no such officer shall be an employee of the Company. No officer need
be a resident of the State of Delaware, a Member or a Manager. Any such officers so designated
shall have such authority and perform such duties as the Manager may, from time to time, delegate
to them. The Manager may assign titles to particular officers. Unless the Manager decides
otherwise, if the title is one commonly used for officers of a business corporation formed under
the Delaware General Corporate Law (or any successor statute), the assignment of such title shall
constitute the delegation to such officer of the authority and duties that are normally associated
with that office, subject to any specific delegation of authority and duties made to such officer by
the Manager pursuant to this Section 6.6 and the other terms and provisions hereof.


                                                 -23-
        (b)     Any officer may resign as such at any time. Such resignation shall be made in
writing and shall take effect at the time specified therein, or if no time be specified, at the time of
its receipt by the Manager. The acceptance of a resignation shall not be necessary to make it
effective, unless expressly so provided in the resignation. Any officer may be removed as such,
either with or without cause, by the Manager. Designation of an officer shall not of itself create
contract rights. Any vacancy occurring in any office of the Company may be filled by the
Manager.

 ARTICLE VII-ACCOUNTING AND BANKING MATTERS; CAPITAL ACCOUNTS;
                         TAX MATTERS

            Section 7.1.       Books and Records; Reports.

      (a)     The Company shall keep and maintain full and accurate books of account for the
Company on the modified cash basis of accounting in accordance with the terms of this Agreement.
Such books shall be maintained at the principal United States office of the Company. The
Members and their respective Affiliates and designated representatives shall have full and
complete access at all reasonable times to review, inspect and copy the books and records of the
Company.

       (b)    The Manager, on behalf of the Company, shall provide to each Member the
following reports in substantially the format as reasonably requested by EnerQuest:

               (i)    monthly, within fifteen (15) days after the end of each month (A) a
       statement detailing revenues and expenses of the Company for such month, all in the form
       attached hereto as Schedule 7 .1 (b)(i), (B) a calculation of the Distributable Cash Flow for
       such month, and (C) a schedule of accounts payable as of the last day of such month, with
       aging information in thirty (30) day increments;

               (ii)    annually, within sixty (60) days after the end of each fiscal year of the
       Company (A) financial statements as of the end of and for such period, including a balance
       sheet and the related statements of operations, Members' capital, and of cash flows, .
       prepared in accordance with the modified cash basis of accounting, and (B) a schedule
       reflecting the Capital Account balances of each Member at the end of such period prepared
       pursuant to the provisions of Section 7.4;

              (iii)    annually, within thirty (30) days after each calendar year end, a cumulative
       schedule listing all Oil and Gas Properties owned by the Company; and

               (iv)    such other reports as reasonably requested by EnerQuest.

            Section 7.2.    Fiscal Year. The calendar year shall be selected as the accounting
    year of the Company and the books of account shall be maintained on the modified cash basis.

           Section 7.3.     Bank Accounts. The Manager shall cause one or more bank
    accounts to be maintained in the name of the Company in such bank or banks as may be
    detc~rmined by the Manager, which accounts shall be used for the payment of expenditures
    incurred by the Company and in which shall be deposited any and all receipts of the Company.


                                                 -24-
     All such receipts shall be and remain the property of the Company, shall be received, held and
     disbursed by the Manager for the purposes specified in this Agreement and shall not be
     commingled with the funds of any other Person.

             Section 7.4.      Capital Accounts.

        (a)    A capital account shall be established and maintained for each Member. Each
Member's capital account (i) shall be increased by (A) the amount of money contributed by that
Member to the Company, (B) the Fair Market Value of property contributed by that Member to
the Company (net ofliabilities secured by the contributed property that the Company is considered
to assume or take subject to under Section 752 of the Internal Revenue Code), and (C) the amount
of any item of income or gain allocated to such Member under Section 5.1, and (ii) shall be
decreased by (A) the amount of money distributed to that Member by the Company, (B) the Fair
Market Value of property distributed to that Member by the Company (net of liabilities secured
by the distributed property that the Member is considered to assume or take subject to under
Section 752 of the Internal Revenue Code), and (C) the amount of any deduction or loss allocated
to such Member under Section 5 .1.

         (b)     It is the intention of the Members that the capital accounts of each Member be kept
in the manner required under Treasury Regulation Section 1.704-l(b)(2)(iv). The Manager may
amend the provisions hereof as to the maintenance of capital accounts and allocation of the items
of income, gain, loss and deduction for such purposes and for federal, state and local income tax
purposes if after conferring with its tax advisers it determines that such amendment is appropriate
in order to comply with Applicable Law; provided, however, that any such amendment shall not
affect the right of any Member to distributions pursuant to Section 5.3, to distributions pursuant to
Section 5 .4 in respect of taxable income (as it may then be computed) that is allocated to such
Member, or to distributions pursuant to any other provision hereof.

         (c)     On the transfer of all or part of a Member's Membership Interest, the capital
account of the transferor that is attributable to the transferred interest shall carry over to the
transferee Member in accordance with the provisions of Treasury Regulation Section 1. 704-
1(b )(2)(iv)(l).

            Section 7.5.       Tax Partnership. The Members agree to classify the Company as
    a partnership for federal tax purposes. Neither the Company, any Member nor any officer or
    other representative of any of the foregoing shall file an election to classify the Company as
    an association taxable as a corporation for federal tax purposes. Notwithstanding the
    foregoing, it is agreed that this Section 7.5 shall not be applicable if the tax status of the
    Company were to be reclassified as a result of a merger or other transaction whereby the
    Company is being sold to a third party and such merger or transaction is approved by the
    Manager in accordance with the terms of this Agreement.

             Section 7.6.      Tax Elections. The Company will make the following elections:

       (a)     To elect the calendar year as the Company's taxable year if permitted by Applicable
Law;

       (b)     To elect the accrual method of accounting;


                                                -25-
        (c)      If requested by a Member, to elect, in accordance with Sections 734, 743 and 754
of the Internal Revenue Code and applicable regulations and comparable state law provisions, to
adjust basis in the event any Membership Interest is transferred in accordance with this Agreement
or any Company property is distributed to any Member;

        (d)     In the event the Company shall, with the consent of all Members, participate as a
working interest owner in any well, to deduct when incurred intangible drilling and development
costs (if applicable) described in Section 263 (c) of the Internal Revenue Code; and

      (e)     To elect with respect to such other federal, state and local tax matters as the
Manager shall approve, except as provided in Section 7.5.

            Section 7.7.       Tax Matters Partner. BMA shall act as the "tax matters partner"
    under Section 6231 of the Internal Revenue Code, subject to replacement by the Members
    (the "Tax Matters Partner"). The Tax Matters Partner shall promptly notify the Members
    if any tax return or report of the Company is audited or if any adjustments are proposed by
    any Governmental Entity. In addition, the Tax Matters Partner shall promptly furnish to the
    Members all notices concerning administrative or judicial Proceedings relating to federal
    income tax matters as required under the Internal Revenue Code. During the pendency of any
    such administrative or judicial Proceeding, the Tax Matters Partner shall furnish to the
    Members periodic reports, not less often than monthly, concerning the status of any such
    Proceeding. Without the consent of a Majority Vote of the Members, the Tax Matters Partner
    shall not extend the statute of limitations, file a request for administrative adjustment, file suit
    concerning any tax refund or deficiency relating to any Company administrative adjustment
    or enter into any settlement agreement relating to any Company item of income, gain, loss,
    deduction or credit for any fiscal year of the Company.

            Section 7.8.     Tax Returns. The Company shall deliver to each of the Members
    the following schedules and tax returns: (a) within sixty (60) days after the Company's year-
    end, a draft Schedule K-1, and (b) within ninety (90) days after the Company's year-end, a
    final Schedule K-1, along with copies of all other federal, state, or local income tax returns or
    reports filed by the Company for the previous year as may be required as a result of the
    operations of the Company. In addition, the Company shall provide, to the extent reasonably
    available, such other information as a Member may reasonably request for purposes of
    complying with applicable tax reporting requirements.

                            ARTICLE VIII- INDEMNIFICATION

            Section 8.1.       Power to Indemnify in Actions, Suits or Proceedings. The
    Company shall indemnify any Person who was or is a party or is threatened to be made a party
    to any threatened, pending or completed action, suit or Proceeding, whether civil, criminal,
    administrative or investigative by reason of the fact that he is or was a Member, officer, or
    Manager of the Company, or is or was serving at the request of the Company as a member,
    officer, or director of another limited liability company, corporation, partnership, joint
    venture, trust or other enterprise or an agent of the Company (a "Covered Person"), against
    expenses (including attorneys' fees),judgments, fines and amounts paid in settlement actually
    and reasonably incurred by ~uch Covered Person in connection with such action, suit or
                                    I



                                                 -26-
    Proceeding, provided that (a) such Covered Person acted in good faith and in a manner such
    Covered Person reasonably I believed to be in or not opposed to the best interests of the
    Company, (b) with respect to a Manager of the Company, such Covered Person had no
    reasonable cause to believe lhis conduct was unlawful, or (c) with respect to any criminal
    action or Proceeding, such Covered Person had no reasonable cause to believe his conduct
    was unlawful. The termination of any action, suit or Proceeding by judgment, order,
    settlement, conviction, or upbn a plea ofnolo contendere or its equivalent, shall not, of itself,
    create a presumption that a <Covered Person did not act in good faith and in a manner which
    such Covered Person reasonably believed to be in or not opposed to the best interests of the
    Co~pany, an?, with respect to any criminal action or Proceeding, had reasonable cause to
                                 1
    beheve that his conduct was r nlawful.

           Section 8.2.       Expenses Payable in Advance. Expenses incurred by a Covered
    Person in defending or investigating a threatened or pending action, suit or Proceeding shall
    be paid by the Company in atlvance of the final disposition of such action, suit or Proceeding
    upon receipt of an unsecured undertaking by or on behalf of such Covered Person to repay
    such amount if it shall ultimately be determined that such Covered Person is not entitled to be
    indemnified by the  Compani    as authorized by this Article VIII.

            Section 8.3.      SuITVival oflndemnification and Advancement of Expenses. The
    indemnification and advancement of expenses provided by, or granted pursuant to, this
    Article VIII shall, unless otherwise provided when authorized or ratified, continue as to a
    Person who has ceased to be!a Member, officer or Manager and shall inure to the benefit of
    the heirs, executors and ad~nistrators of such a Person and shall survive the liquidation of
    the Company. No amendme~t or repeal of the provisions of this Article VIII which adversely
    affects the rights of any Co~ered Person under this Article VIII with respect to the acts or
    omissions of such Covered P erson at any time prior to such amendment or repeal shall apply
                                 1
    to such Covered Person withput the written consent of the Covered Person.

           Section 8.4.       Limitation on Indemnification. Notwithstanding anything else in
    this Agreement to the contrariy-, the Company shall not be obligated to indemnify any Covered
    Person for (a) any Proceedin~ initiated by such Covered Person against the Company unless
    that Proceeding was brought to enforce such Covered Person' s right to indemnification under
    this Article VIlI and, in suchJProceeding, it is determined that such Covered Person is entitled
    to indemnification, or (b) any Proceeding brought by the Company against such Covered
    Person unless such Covered Person is found not to be liable to the Company.
                                  I

           Section 8.5.       No Obligation to Contribute Capital.          The Company's
indemnification obligations set forth in this Article VIII shall be payable solely out of the
Company's assets and operating cash flow. The Company shall not make a capital call and no
Member shall be obligated to cohtdbute capital to the Company for the purpose of directly or
indirectly funding the Company's indemnification obligations.




                                               -27-
              ARTICLE IX- DISPOSITIONS OF MEMBERSHIP INTERESTS

             Section 9.1.      Dispositions.

        (a)   No Member may Dispose of its Membership Interest, in whole or in part other than
in accordance with the terms of this Article IX, and any attempted Disposition that is not in
accordance with this Article IX shall be, and is hereby declared, null and void ab initio. The
Members agree that a breach of the provisions of the restrictions on Dispositions set forth in this
Article IX may cause irreparable injury to the Company and the Members for which monetary
damages (or other remedy at law) are inadequate in view of (i) the complexities and uncertainties
in measuring the actual damages that would be sustained by reason of the failure of a Person to
comply with such provisions, and (ii) the uniqueness of the Company's business and the
relationship among the Members. Accordingly, the Members agree that the restrictions on
Dispositions may be enforced by specific performance.

        (b)   Neither EnerQuest nor BMA may directly or indirectly Dispose of all or any part
of its Membership Interest other than a Disposition approved by all Members.

         (c)     The foregoing Section 9.l(b) to the contrary notwithstanding, a Disposition of a
Membership Interest approved by the Members shall be null and void ab initio (i) if the transferee
fails to deliver to the Company all documents required pursuant to Section 9.2, or (ii) such
Disposition would result in the violation of any applicable federal or state securities laws. Any
costs incurred by the Company in connection with any proposed or actual Disposition by a Member
of all or a part of its Membership Interest shall be borne by such Member.

             Section 9.2.      Substitution.

        (a)     Unless an assignee of a Membership Interest becomes a Member in accordance
with the provisions set forth below, such assignee shall not be entitled to any of the rights granted
to a Member hereunder in respect of such Membership Interest, other than the right to receive
allocations of income, gain, loss, deduction, credit and similar items and distributions to which the
assignor would otherwise be entitled, to the extent such items are assigned.

         (b)     An assignee of the Membership Interest of a Member, or any portion thereof, may
becom;: a Member entitled to all of the rights of a Member in respect of such Membership Interest
if (i) the assignor gives the assignee such right, (ii) the Members unanimously consent in writing
to such substitution, and (iii) the assignee executes and delivers such instruments (including the a
joinder agreement), in form and substance reasonably satisfactory to the Manager, as the Manager
may deem reasonably necessary to effect such substitution and to confirm the agreement of the
assignee to be bound by all of the terms and provisions of this Agreement.

          ARTICLE X-DISSOLUTION, LIOUIDATION, AND TERMINATION

          Section 10.1.      Dissolution. The Company shall dissolve and its affairs shall be
    wound up upon the first to occur of the following (each, a "Liquidity Event"):

       (a)     upon election by all of the Members to dissolve the Company;



                                                -28-
        (b)      upon the removal or resignation of BMA as Manager;

        (c)      upon the expiration of the Commitment Period;

        (d)     upon an election by BMA; provided, however, BMA's election must be in
conjunction with BMA' s execution of a sale or other transfer of the Company's assets distributable
to BMA pursuant to this Article X to a publicly registered master limited partnership of which
BMA or its members are principals; provided, further, that BMA must provide to EnerQuest the
right, but not the obligation, to participate in such sale or other transfer with respect to its
distributable share of the Company's assets on the same terms and conditions as BMA; or

        (e)      entry of a decree of judicial dissolution of the Company under Section 18-802 of
the Act.

               Section 10.2.   Liquidation and Termination. On dissolution of the Company,
    the liquidator shall be a Person selected by the Manager and approved by EnerQuest. The
    liquidator shall proceed diligently to wind up the affairs of the Company at the direction of
    the Manager and make final distributions as provided in this Agreement and in the Act. The
    costs of liquidation shall not be an Overhead and Operating Expense, unless such liquidation
    is pursuant to Section 10. l(b). The steps to be accomplished by the liquidator are as follows:

        (a)     As promptly as possible after dissolution and again after final liquidation, the
liquidator shall cause a proper accounting to be made of the Company's assets, liabilities, and
operations through the last day of the calendar month in which the dissolution occurs or the final
liquidation is completed, as applicable.

        (b)    The liquidator shall pay, satisfy or discharge from Company funds all of the debts
(including debts owing to any Member), liabilities and obligations of the Company (including all
expenses incurred in liquidation) or otherwise make adequate provision for payment and discharge
thereof (including the establishment of a cash escrow fund for contingent liabilities in such amount
and for such term as the liquidator may reasonably determine).

        (c)    To the extent that the Company has any assets remaining, the Fair Market Value of
that property shall be determined and the capital accounts of the Members shall be adjusted to
reflect the manner in which the unrealized income, gain, loss, and deduction inherent in the
property that has not been reflected in the capital accounts previously would be allocated among
the Members such that, as nearly as possible, the positive balance in the Members' respective
capital accounts will be in the same proportion as their respective Percentage Interests. All
remaining assets shall then be distributed to the Members in accordance with positive balance of
such Member's capital account.

        (cl)    All distributions in kind to the Members shall be valued for purposes of determining
each Member's interest therein at its Fair Market Value (net ofliabilities secured by the distributed
property that the Member is considered to assume or take subject to under Section 752 of the
Internal Revenue Code) at the time of such distribution. Further each Oil and Gas Interest
distributed in kind shall be distributed so that each Member receives an undivided interest in each
Oil and Gas Interest equal to its relative share of the total capital of the Company after giving
effect to Section 10.2(c). Notwithstanding the foregoing, to the extent that at the time of


                                                -29-
liquidation, any Member is a Defaulting Member, any amount of money or property otherwise
distributable to such Defaulting Member shall be reduced as necessary by an amount of cash or
property equal to such Defaulting Member's unfunded Capital Contribution.

        (e)      Any distribution to the Members in liquidation of the Company shall be made by
the later of the end of the taxable year in which the liquidation occurs or 90 days after the date of
such liquidation. For purposes of the preceding sentence, the term "liquidation" shall have the
same meaning as set forth in Treasury Regulation Section l.704-l(b)(2)(ii). The distribution of
cash and/or property to a Member in accordance with the provisions of this Section 10.2 constitutes
a complete return to the Member of its Capital Contribution and a complete distribution to the
Member of its Membership Interest and all the Company's property and constitutes a compromise
to which all Members have consented within the meaning of Section 18-5 02(b) of the Act. To the
extent that a Member returns funds to the Company, it has no claim against any other Member for
those funds.

            Section 10.3.     Deficit Capital Accounts. No Member shall be obligated to restore
    a deficit balance in its capital account at any time or make a contribution to the Company
    except as provided herein or as it may have agreed in a separate agreement.

           Section 10.4.      Certificate of Cancellation. On completion of the distribution of
    Company assets as provided in this Agreement, the Company shall be terminated and the
    Members shall file a certificate of cancellation with the Secretary of State of Delaware, cancel
    any other filings made pursuant to Section 1.5, and take such other actions as may be
    necessary to terminate the Company.

                        ARTICLE XI - ADDITIONAL COVENANTS

            Section 11.1.     Exclusive Dealings in the Buy Area.

        (a)      During the Commitment Period (i) BMA shall, and shall cause its Affiliates to, use
commercially reasonable efforts with the exercise of due diligence -to evaluate, negotiate, and
propose for acquisition by the Company Oil and Gas Interests located in the Buy Area, (ii) such
activities shall be conducted by BMA and its Affiliates on an exclusive basis solely for the account
of the Company, provided that BMA may offer Oil and Gas Interests that are proposed for
acquisition by the Company but not approved by EnerQuest to third parties as provided in Section
4.l(b)(ii) and (iii), and (iii) neither BMA nor any of its Affiliates will acquire any Oil and Gas
Interests in the Buy Area other than Oil and Gas Interests that are proposed for .acquisition by the
Company but not approved by EnerQuest as provided in Section 4.l(b)(ii) and (iii).

        (b)     During the Commitment Period, BMA agrees (i) that it shall cause Brad Ashburn
to devote substantially of his business time and attention performing the services for the Company
as contemplated in this Agreement and (ii) that it shall cause Scott Bauer to devote the amount of
his business time reasonably necessary to support Brad Ashburn in the performance of the services
for the Company as contemplated in this Agreement; provided, however, at no time will Scott
Bauer's amount of business time devoted to the Company be less than 50% of Scott Bauer's total
business time as determined on a weekly basis.




                                                -30-
        (c)     If BMA either resigns as Manager or is removed as Manager for Good Cause, BMA
shall not, and shall cause its Affiliates not to, directly or indirectly, for itself or on behalf of or in
conjuction with any other person, acquire an Oil and Gas Interest in the Buy Area until the 7th
anniversary of the Effective Date. Nothing contained in this Section 11.1 (c) shall restrict BMA
from acquiring any Oil and Gas Interest that BMA previously proposed for acquisition by the
Company but which was not approved by EnerQuest as provided in Section 4. l(b)(ii) and (iii).

             Section 11.2.      Outside Activities of EnerOuest.

        (a)     The Members acknowledge and affirm that EnerQuest and its Affiliates (the
"EnerQuest Related Parties") are engaged in the oil and gas business and may acquire for their
own account leasehold and other interests in oil and gas properties located within the Buy Area
subject to the restrictions set forth in Section 4. l(b)(ii) and (iii); provided, however, that during
the Commitment Period, EnerQuest will not acquire or seek to acquire Oil and Gas Interest in the
Buy Area, except to the extent an Oil and Gas Interest is included in a larger package of primarily
leasehold or working interest properties acquired by EnerQuest.

         (b)    Subject to the foregoing, the Members (in their own names and in the name and on
behalf of the Company) expressly waive any such conflicts of interest or potential conflicts of
interest and agree that no EnerQuest Related Party shall have any liability to any Member, any
Affiliate thereof, or the Company with respect to such conflicts of interest or potential conflicts of
interest.

       (c)      The Members (in their own names and in the name and on behalf of the Company):

               (i)    agree that (A) the terms of this Article XI, to the extent that they modify or
       limit a duty or other obligation, if any, that an EnerQuest Related Party may have to the
       Company or another Member under the Act or other Applicable Law, are reasonable in
       form, scope and content; and (B) the terms of this Article XI shall control to the fullest
       extent possible if it is in conflict with a duty, if any, that an EnerQuest Related Party may
       have to the Company or another Member, the Act or any other Applicable Law; and

              (ii)    waive any duty or other obligation, if any, that an EnerQuest Related Party
       may have to the Company or another Member, pursuant to the Act or any other Applicable
       Law, to the extent necessary to give effect to the terms of this Article XI.

       (d)     The Members (in their own names and in the name and on behalf of the Company)
acknowledge, affirm and agree that (i) the execution and delivery of this Agreement by the
EnerQuest Related Parties is of material benefit to the Company and the Members, and that
EnerQuest would not be willing to (A) execute and deliver this Agreement, and (B) make their
agreed Capital Contributions to the Company, without the benefit of this Section 11.2(d) and the
agreement of the Members, thereto; and (ii) they have reviewed and understand the provisions of
Section 18-1 lOl(b) of the Act.

             Section 11.3.      Confidentiality.

        (a)     Each Member agrees that all non-public and confidential information furnished to
it pursuant to this Agreement will be kept confidential and will not be disclosed or used by such


                                                   -31-
Member, or by any of its agents, representatives or employees (collectively, "Representatives"),
in any manner whatsoever (other than to the Company or another Member), in whole or in part,
except that (i) each Member shall be permitted to disclose such information to those
Representatives who need to be familiar with such information in connection with such Member's
investment in the Company, as well as to its accountants, attorneys, bankers, other fllllding sources,
investors and potential investors of such Member and who in each case are apprised of the
confidential nature of such information, (ii) each Member shall ·be permitted to disclose
information to the extent required by Applicable Law, so long as such Member shall have used its
reasonable efforts to first afford the Company with a reasonable opportunity to contest the
necessity of disclosing such information, (iii) each Member shall be permitted to disclose such
information to prospective purchasers of all or a portion of the Member's Membership Interest,
provided that (A) the sale of all or a portion of such Member's Membership Interest to such
prospective purchaser has been approved by the Members, and (B) such prospective purchaser has
executed a confidentiality agreement in a form approved by the Company containing terms not
less restrictive than the terms set forth herein, (iv) each Member shall be permitted to disclose
information to the extent necessary for the enforcement of any right of such Member arising under
this Agreement, and (v) each Member shall be permitted to report to its shareholders, limited
partners, members or other owners, as applicable, regarding the general status of its investment in
the Company (without disclosing specific confidential information); provided, however, that
information shall not be deemed confidential information for purposes of this Section l 1.3(a),
where such information (w) was already known to such Member (or its Representatives) at the
time of disclosure, (x) later becomes known to such Member by having been disclosed to such
Member (or its Representatives) by a third Person without any obligation of confidentiality
imposed. on such third Person to such Member's knowledge, (y) is or becomes publicly known
through no wrongful act of such Member (or its Representatives), or (z) is independently
developed by such Member (or its Representatives) without reference to any confidential
information disclosed to such Member under this Agreement. Each Member shall be responsible
for any breach of this Section l l .3(a) by its Representatives.

                            ARTICLE XII- GENERAL PROVISIONS

            Section 12.1.      Notices. Except as expressly set forth to the contrary in this
    Agreement, all notices, requests, or consents provided for or permitted to be given under this
    Agreement must be in writing and shall be deemed to be given (a) when delivered by hand
    (with written confirmation ofreceipt); (b) on the next Business Day after the date of deposit
    by the addressee with a nationally recognized overnight courier; (c) on the date sent by
    Electronic Transmission (without receipt of any notice of failure of delivery) if sent during
    nonnal business hours of the recipient, and on the next Business Day if sent after normal
    business hours of the recipient; or (d) on the third day after the date mailed, by certified or
    registered mail, return receipt requested, postage prepaid. All notices, requests, and consents
    to be sent to a Member must be sent to or made at the addresses given for that Member on
    Exhibit A or such other address as that Member may specify by notice to the other Members.
    All notices, requests, and consents to be sent to the Company must be sent to or made to the
    attention of the Manager at the address specified for the Company in Section 1.4(b) or such
    other address as the Company may specify by notice to the Members.

            Section 12.2.      Amendment and Waivers. This Agreement may not be amended


                                                -32-
or modified, and no provisions hereof may be waived, without the unanimous consent of the
Members.

             Section 12.3.    Entire Agreement.         This Agreement and the certificates,
    documents, instruments and writings that are delivered pursuant hereto constitute the entire
    agreement and understanding of the Members in respect of its subject matters and supersedes
    all prior understandings, agreements, or representations by or among the Members, written or
    oral, to the extent they relate in any way to the subject matter of this Agreement or the
    transactions contemplated by this Agreement.

            Section 12.4.     Successors and Assigns. Subject to Article IX, this Agreement
    shall be binding upon and inure to the benefit of the Members and their respective heirs, legal
    representatives, successors, and assigns.

         Section 12.5. Governine: Law. THIS AGREEMENT AND THE
    PERFORMANCE OF THE TRANSACTIONS AND THE OBLIGATIONS OF THE
    COMPANY OR THE MEMBERS HEREUNDER WILL BE GOVERNED BY AND
    CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE
    STATE OF DELAWARE, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW
    PRINCIPLES.

            Section 12.6.       Arbitration. Each of the parties shall use its commercial reasonable
    efforts to resolve any dispute between the parties that relates to this Agreement or the
    performance of the transactions and the obligations of the ·company or the Members
    hereunder and to settle any such dispute through joint cooperation and consultation. If the
    paliies are unable to settle such dispute within sixty (60) days, such dispute shall be resolved
    by final and binding arbitration before a single arbitrator selected and serving under the
    Commercial Arbitration Rules of the American Arbitration Association. Any such arbitration
    shall be held in Oklahoma County, Oklahoma unless another location is mutually agreed upon
    by the parties. Such arbitration shall be the exclusive remedy hereunder with respect to the
    subject matter of such arbitration; provided, however, that nothing contained in this Section
    12.6 shall limit any party's right to bring (a) post arbitration actions seeking to enforce an
    arbitration award or (b) actions seeking specific performance of this Agreement or injunctive
    or other similar relief in the event of a breach or threatened breach of any of the provisions of
    this Agreement.

             Section 12.7.     Venue and Consent of Jurisdiction; Waiver of Jury Trial. If
     Section 12.6 is for any reason held to be invalid or otherwise inapplicable with respect to any
     dispute between the parties that relates to this Agreement or the performance of the
    'transactions and the obligations of the Company or the Members hereunder, the parties agree
     as follows:

       (a)     Any action or proceeding shall be exclusively brought in any state or federal court
located in Oklahoma County, Oklahoma and each party irrevocably consents to the jurisdiction
and service of process out of such courts and waives any objection which it may now or hereafter
have to the laying of venue of any action or proceeding arising out of or in connection with this
Agreement brought in such courts; and


                                               -33-
     (b)  THE MEMBERS WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS
AGREEMENT AND THE PERFORMANCE OF THE TRANSACJ:IONS AND THE
OBLIGATIONS OF THE COMPANY AND THE MEMBERS HEREUNDER.

          Section 12.8.     Directly or Indirectly. Where any provision of this Agreement
  refers to action to be taken by any Person, or which such Person is prohibited from taking,
  such provision shall be applicable whether such action is taken directly or indirectly by such
  Person, including actions taken by or on behalf of any Affiliate of such Person.

          Section 12.9.     Severability. If any provision of this Agreement is held to be
  unenforceable, this Agreement shall be considered divisible and such provision shall be
  deemed inoperative to the extent it is deemed unenforceable, and in all other respects this
  Agreement shall remain in full force and effect; provided, however, that if any provision may
  be made enforceable by limitation thereof, then such provision shall be deemed to be so
  limited and shall be enforceable to the maximum extent permitted by Ap~licable Law.

          Section 12.10. Further Assurances. In connection with this Agreement and the
  transactions contemplated by this Agreement, each Member shall execute and deliver any
  additional documents and instruments and perform any additional acts that may be necessary
  or appropriate to effectuate and perform the provisions of this Agreement and those
  transactions.

          Section 12.11. Title to Company Property. All Oil and Gas Interests and other
  properties and assets acquired by the Company, whether real ·or personal, tangible or
  intangible, shall be owned by and held in the name of the Company and no Member,
  individually, shall have any ownership of such property. No Oil and Gas Interests or other
  property of the Company shall be held in the name of the Manager or any other Person as
  nominee.

         Section 12.12. No Third Party Beneficiaries. Except as otherwise provided in
  Article VIII, it is the intent of the Members that no third-party beneficiary rights be created
  or deemed to exist in favor of any Person not a party to this Agreement, unless otherwise
  expressly agreed to in writing by the Members.

         Section 12.13. Expenses. The parties agree that if an action or proceeding is
  brought by a party against one or more other parties that relates to this Agreement or the
  performance of the transactions and the obligations of the Company or the Members
  hereunder, the prevailing paity or parties shall be entitled to the payment of reasonable
  attorneys' fees from the non-prevailing party. For purposes of the foregoing, the prevailing
  party shall mean the party or parties obtaining substantially the relief sought, whether by
  compromise, settlement, arbitration award, or judgment.

           Section 12.14. Counterparts. This Agreement may be executed in any number of
   counterparts, including by Electronic Transmission, each of which will be deemed an original
   but all of which together will constitute one and the same instrument.

                                 [Signature Page Follows]


                                             -34-
        IN WITNESS WHEREOF, the Members have caused this Agreement to be executed
effective as of the Effective Date.

                                        MEMBERS

                                        ENERQUEST OIL & GAS, L.L.C.,
                                        an Oklahoma limited liability company



                                        By:
                                       Name: Gregory
                                       Title: President


                                       BRAXTON MINERALS-APPALACHIA, LLC
                                       a Texas limited liability company



                                       By:
                                       Name : _.~t--=""'---<=--=-'-r:-=-i'-'---------~
                                       Title:




      [Signature Page to Amended and Restated Limited Liability Company Agreement
                             ofBraxton Minerals IIL LLC]
                                              Exhibit A

                                   Members and Commitments


                                                  Commitment                    Percentage
                       Member;                                       Units
                                                    Amount                       Interest
         EnerQuest Oil & Gas, L.L.C.             $10,000,000.00       750         75.00%
         Attn: Greg Olson, President
         12368 Market Drive
         Oklahoma City, Oklahoma 73114
         Braxton Minerals-Appalachia, LLC           See Note.         250         25.00%
         Attn: Brad Ashburn and Scott Bauer
         3973 W. Vickery Blvd, Suite 102
         Fort Worth, Texas 76107
         Total:                                                       1,000       100.00%



Note: BMA will contribute to the capital of the Company such sums in cash as may be required
to satisfy, in a timely manner and from time to time as incurred, the capital contribution obligations
described in Sections 4.l(a)(ii) and 4.l(c) of this Agreement.
EXHIBIT 1B
                                        March 10, 2016


EnerQuest Oil & Gas, LLC
12368 Market Drive
Oklahoma City, OK 73114

Attn: Greg Olson

       Re:    Limited Liability Company Agreement of Braxton Minerals, III, LLC dated
              November 12, 2015 (the "Agreement")

Dear Greg:

       Reference is hereby made to the above Agreement. As the Remaining EnerQuest
Commitment Amount is less $1,000,000.00, this letter shall serve as the written notice required
under Section 4.5. Please indicate your election by marking below and returning to the
undersigned.




                                      ~    Brad Ashburn


_ _    EnerQuest elects to increase the EnerQuest Commitment Amount pursuant to Section 4.5.


       EnerQuest elects to not increase the EnerQuest Commitment Amount pursuant to Section
       4.5.


ENERQUEST OIL & GAS, LLC



Greg Olson, President                                                   Date



                                       607 Bailey Avenue
                                    Fort Worth, Texas 76107
                          P: 817-360-9162 E: brad@braxtonenergy.com
EXHIBIT 1C
From:                       Greg Olson <G.Olson@enerquest.net>
Sent:                       Friday, April 08, 2016 11:37 AM
To:                         Brad Ashburn
Subject:                    RE: Election Letter
Attachments:                model with matt's eur-1st prod. 4.2016.xlsx; Marcellus EUR vs Lateral Length.pdf; EQ Type
                            Curve vs EQT.PDF; Peak Rate Per Ft vs Lateral.pdf; 2014 Aries Decline Curves.pdf; 2013
                            Aries Decline Curves.pdf; 2012 Aries Decline Curves.pdf; Before 2012 Aries Decline
                            Curves.pdf; Antero Well Map.pdf; Pennsylvannia Marcellus EUR Study - March, 2016.pdf;
                            Spotfire Plots.pdf; Marcellus Type Curve Analysis.pdf


Brad, we’re going to elect not to move forward with funding. As you know, what really hurt the
economics compared to the way I was looking at the deal before making the investment, is the
deducts Antero started charging. If not for the general deterioration in the gas market, we still
may have been able to model a rate of return that made sense.

You had asked for the results of our analysis. Attached is the model. The model is using a 10.2
bcf eur. Also attached are a number of displays and spreadsheets Matt used in determining his
type curve eur of 10.2 bcf. If you’re interested, we can schedule a call where Matt can walk you
through the analysis and how to interpret some of his displays. Just let me know if you want to
schedule something.

You and your team are a talented group. I sincerely hope we can do business in the future.
There were just some unexpected (Antero deducts) and uncontrollable (gas market
deterioration) events that make it difficult to do anything at this time.

I’ve enjoyed working with and getting to know you. I wish you all the best.


Gregory W. Olson
President
EnerQuest Oil & Gas, LLC
12368 Market Drive
Oklahoma City, OK 73114
(405) 478-3300 ext. 101

From: Brad Ashburn [mailto:brad@braxtonenergy.com]
Sent: Thursday, March 10, 2016 4:20 PM
To: Greg Olson <G.Olson@enerquest.net>
Subject: Election Letter

Greg:

I trust that Courtland answered all of your questions on Draw 9. Please let me know if you need anything additional.

Attached is the election letter per Section 4.5. –Brad

Best,

Brad Ashburn
Braxton Minerals III, LLC
                                                           1
607 Bailey Avenue
Fort Worth, Texas 76107

P: 817-698-0020
C: 817-360-9162




                          2
EXHIBIT 1D
                                     EnerQuest
                                        0 I L   &   G A S, L. L. C.




                                          August 9, 2017


VIA FEDEX OVERNIGHT AND EMAIL
Braxton Minerals-Appalachia, LLC
Attn: Brad Ashburn and Scott Bauer
3973 W. Vickery Blvd, Suite 102
Fort Worth, Texas 76107
Email to:     brad@postoakroyalty.com
              scott@braxtonenergy.com


                                                Re:        Certain Matters related to Braxton Minerals
                                                           III, LLC, a Delaware limited liability
                                                           company ("BMIII")


Dear Brad and Scott:

         The purpose of this letter is to demand compliance by Braxton Minerals-Appalachia, LLC,
a Texas limited liability company ("BMA"), in its capacity as Manager of BMIII, with the terms
of that certain Limited Liability Company Agreement of BMIII dated November 12, 2015 (such
agreement, the "BMIII Agreement"). Capitalized terms used in this letter not otherwise defined
in this letter shall have the meanings assigned to them in the BMIII Agreement.

Failure to Liquidate BMIII

        Pursuant to the Section 10.1 of the BMIII Agreement, BMIII "shall dissolve and its affairs
shall be wound up upon" a Liquidity Event. As provided in Section 4.5 of the BMIII Agreement,
upon an election by EnerQuest Oil & Gas, L.L.C. ("EnerQuest") to not increase the EnerQuest
Commitment Amount, a Liquidity Event occurs "upon the first to occur of (i) such time as
EnerQuest has funded the EnerQuest Commitment Amount in full, or (ii) a period of sixty (60)
days has expired since the end of the thirty (30) day period" after EnerQuest's receipt of written
notice from BMA that the Remaining EnerQuest Commitment Amount is less than $1,000,000.

        As you are aware, on or about March 10, 2016, BMA provided the above described written
notice to EnerQuest. On or about April 8, 2016, EnerQuest responded to BMA' s written notice
indicating that it elects to not increase the EnerQuest Commitment Amount. Based on the
foregoing and pursuant to the terms of the BMIII Agreement, a Liquidity Event occurred on or




                            12368 Market Drive • Oklahoma City, OK 73114
                              phone 405.478 .3300 • fax 405.478.3686
about June 10, 2016. Upon the occurrence of the Liquidity Event, pursuant to Section 10.2 of the
BMIII Agreement, BMA, as Manager, has an obligation to propose a liquidator which shall be
approved by EnerQuest. As of the date of this letter, BMA has failed to fulfill its obligation to
propose a liquidator to carry out the liquidation of BMIII. ENERQUEST HEREBY DEMANDS
THAT BMA IN ITS CAPACITY AS MANAGER OF BMIII COMPLY WITH THE
PROVISIONS OF THE BMIII AGREEMENT, INCLUDING, THE PROPOSAL OF A
LIQUIDATOR TO CARRY OUT THE DILIGENT LIQUIDATION OF BMIII.

Obligation to Provide Certain Reports to EnerQuest

        Pursuant to Section 7 .1 (b) of the BMIII Agreement, BMA as the Manager of BMIII is
obligated to prepare or caused to be prepared certain reports and provide to EnerQuest including
(i) monthly reports related to the revenues and expenses of BMIII including the calculation of
Distributable Cash Flow and a details related to accounts payable, (ii) annual reports including
financial statements of BMIII and a schedule reflecting the Capital Accounts of the BMIII
Members, (iii) annual schedule of BMIIIs Oil and Gas Properties, and (iv) such other reports as
reasonably requested by EnerQuest. BMA has continuously failed to prepare (or caused to be
prepared) and deliver the above required reports. ENERQUEST HEREBY DEMANDS THAT
BMA IN ITS CAPACITY AS MANAGER OF BMIII COMPLY WITH THE PROVISIONS
OF THE BMIII AGREEMENT AS IT RELATES TO ITS OBLIGATION TO PREPARE
(OR CAUSED TO BE PREPARED) AND PROVIDE TO ENERQUEST CERTAIN
INFORMATIONAL REPORTS RELATED TO BMIII AND ITS ASSETS.

Obligation to Manage BMIII Assets in a Reasonable Manner

         BMA, in its capacity as Manager of BMIII, has a duty to manage BMIII' s assets in a
reasonable manner. As you are aware, since about May 2017, Antero as the purchaser of oil and
gas production related to BMIII' s Oil and Gas Interests suspended revenue payments to BMIII as
a result of certain threatened and actual litigation between you. You have failed to diligently work
with Antero to remove BMIII from suspense status. Rather, it has come to my attention that as
recently as in July 2017, Scott has exchanged emails with Antero' s outside counsel stating "I would
agree that Braxton Minerals III, LLC is claim overlapping interests and tied up entirely".
Effectively, instead of diligently working with Antero to cause them to remove BMIII from
suspense and pay the accrued, unpaid revenue, you have perpetuated the continual non-payment
of BMIII's revenue for several months now. ENERQUEST HEREBY DEMANDS THAT
BMA IN ITS CAPACITY AS MANAGER OF BMIII WORK DILIGENTLY WITH
ANTERO TO CAUSE BMIII TO BE REMOVED FROM SUSPENSE AND THE
ACCRUED AND UNPAID REVENUE TO BE PAID TO BMIII.

It is EnerQuest's belief that BMA's actions and/or omissions over the last several months may
constitute "Good Cause" as defined in the BMIII Agreement such that BMA may be removed as
Manager of BMIII. With that said, and without waiving any right to assert the occurrence of
"Good Cause", EnerQuest hereby demands that BMA comply with the demands set forth in this
letter immediately pursue the full satisfaction of these demands without delay. If BMA fails to
fully comply, as determined in EnerQuest's sole discretion, by September 10, 2017, EnerQuest
may elect to deem the existence of Good Cause to remove BMA as Manager of BMIII.




                                          Very truly yours,

                                          ENERQUEST OIL & GAS, L.L.C.,
                                          an Oklahoma limited liability company



                                          ~~         faJ!Jk---
                                          Grego:~n
                                          Presidl't~
EXHIBIT 1E
                                                    WRITTEN CONSENT OF MEMBERS
                                                                OF
                                                     BRAXTON MINERALS III, LLC

                                                                    SEPTEMBER 29, 2017

        Pursuant to Section 18-302(d) of the Delaware Limited Liability Company Act and
Section 3. 7 of that certain Limited Liability Company Agreement of Braxton Minerals III, LLC,
a Delaware limited liability company (the "Company"), dated November 12, 2015 (such
agreement, the "Company Agreement"), which each provide that the members may take any
action without a meeting, without prior notice and without a vote if consented to in writing by
members having not less than the minimum number of votes that would be necessary to
authorize or take such action at a meeting at which all the members entitled to vote thereon were
present and voted, the undersigned, representing the holder of a majority of the issued and
outstanding Membership Interests of the Company, does hereby adopt and consent to the
following resolutions as of the date first stated above (capitalized terms used herein not
otherwise defined herein shall have the meanings assigned to them in the BMIII Agreement):

                                                                      Removal of Manager

                            WHEREAS, Section 6.2 of the Company Agreement provides that
                            "[t]he Manager may be removed, with or without cause, by a
                            Majority Vote of the Members; provided, however, that so long as
                            EnerQuest and BMA are the sole Members, BMA may be removed
                            a Manager only for Good Cause";

                           WHEREAS, the undersigned is the holder of a majority of the
                           issued and outstanding Membership Interests of the Company such
                           that an affirmative vote of the undersigned of its Membership
                           Interest constitutes a Majority Vote;

                            WHEREAS, the undersigned deems it advisable and in the best
                            interest of the Company that BMA be removed as Manager of the
                            Company; and

                           WHEREAS, the undersigned has determined that Good Cause
                           exists for the removal of BMA as Manager of the Company.

                           NOW, THEREFORE, BE IT RESOLVED, that BMA is hereby
                           removed as Manager of the Company for Good Cause.

                                                                      Election of Manager

                           WHEREAS, Section 6.3 of the Company Agreement provides that
                           "[i]n the event of the resignation or removal of a Manager, the
                           Members shall select a replacement Manager through the Majority
                           Vote of the Members";



Braxton Minerals III LLC - Written Consent of Members - Removal and Ele.
              WHEREAS, the undersigned is the holder of a majority of the
              issued and outstanding Membership Interests of the Company such
              that an affirmative vote of the undersigned of its Membership
              Interest constitutes a Majority Vote; and

              WHEREAS, the undersigned deems it advisable and in the best
              interest of the Company that EnerQuest Oil & Gas, L.L.C., an
              Oklahoma limited liability company ("EnerOuest"), be selected as
              replacement Manager of the Company.

              NOW, THEREFORE, BE IT RESOLVED, that EnerQuest 1s
              hereby elected as a Manager of the Company.

                                          General

              FURTHER RESOLVED, that this written consent is ordered to be
              filed with the minutes of the Members of the Company.

EXECUTED as of the date first written above.


                                          ENERQUEST OIL & GAS, L.L.C.,
                                          an Oklahoma limited liability company



                                          By:
                                          Name: Gregory
                                          Title: President




                                               2
EXHIBIT 1F
                                      EnerQuest
                                        0 I L   &   G A S, L. L. C.



                                       September 29, 2017


VIA FEDEX OVERNIGHT AND EMAIL
Braxton Minerals-Appalachia, LLC

Attn: Brad Ashburn
607 Bailey Ave.
Fort Worth, Texas 76107

Attn: Scott Bauer
8851 Camp Bowie Blvd. West
Fort Worth, Texas 76116


Email to:      brad@postoakroyalty.com
               scott@braxtonenergy.com

                                                Re:        Notice of Removal of Braxton Minerals-
                                                           Appalachia, LLC, a Texas limited liability
                                                           company ("BMA") as Manager of Braxton
                                                           Minerals III, LLC, a Delaware limited
                                                           liability company ("BMIII") and
                                                           appointment of successor Manager

Dear Brad and Scott:

        Reference is made to that certain letter dated August 9, 2017, from the undersigned on
behalf ofEnerQuest Oil & Gas, L.L.C. ("EnerQuest") to you in your capacity as member-managers
of BMA in its capacity as Manager of BMIII, a copy of which is enclosed herewith (such letter,
the "Prior EQ Letter"). Reference is further made to that certain Limited Liability Company
Agreement of BMIII dated November 12, 2015 (such agreement, the "BMIII Agreement").
Capitalized terms used in this letter not otherwise defined in this letter shall have the meanings
assigned to them in the BMIII Agreement.

        As provided in the Prior EQ Letter, EnerQuest, as the majority Member of BMIII and
pursuant to certain rights granted to EnerQuest in the BMIII Agreement, demanded BMA to take
the following actions (collectively, the "EQ Demands"):




                            12368 Market Drive • Oklahoma City, OK 73114
                              phone 405.478.3300 • fax 405.478.3686
            1. EnerQuest demanded that BMA in its capacity as Manager of BMIII comply with
                the provisions of the BMIII Agreement, including as it relates to, the proposal of a
                liquidator to carry out the diligent liquidation of BMIII.
            2. EnerQuest demanded that BMA in its capacity as Manager of BMIII comply with
                the provisions of the BMIII Agreement as it relates to its obligation to prepare (or
                caused to be prepared) and provide EnerQuest certain information reports related
                to BMIII and its assets as more fully described in the Prior EQ Letter.
            3. EnerQuest demanded that BMA in its capacity as Manager of BMIII work
                diligently with Antero to cause BMIII to be removed from suspense and the accrued
                and unpaid revenue to be paid to BMIII.
       In the Prior EQ Letter, EnerQuest demanded compliance with the above demands on or
before September 10, 2017 (the "Compliance Deadline"). As of the Compliance Deadline, you
have failed to provide any response to the Prior EQ Letter or the EQ Demands. Further, although,
subsequent to the Compliance Deadline, you provided certain correspondence in response to the
Prior EQ Letter, you have failed to take any material step towards satisfying the EQ Demands.
Accordingly, and as provided in the Prior EQ Letter, EnerQuest believes that BMA's actions
and/or omissions over the last several months may have constituted "Good Cause" as defined in
the BMIII Agreement such that BMA may be removed as Manager of BMIII.

        Further to such belief and based on, among many things, BMA's failure to timely respond
to the EQ Demands, EnerQuest has determined that Good Cause exists and has elected to remove
BMA as Manager of BMIII and appoint itself as replacement Manager of BMIII effective as of
the date of this letter. Enclosed with this letter is a copy of a Written Consent of Members of
BMIII related to such removal and replacement which has been executed by EnerQuest in its
capacity as majority Member (and constituting a Majority Vote) of BMIII.

                                             Very truly yours,


                                             ENERQUEST OIL & GAS, L.L.C.,
                                             an Oklahoma limited liability company


                                           ~                     ;J, ~
                                             G~n
                                             President

Enclosures
EXHIBIT 2
                                               400 White Oaks Boulevard              Writer's Contact Information

                                               Bridgeport, WY 26330                     (304) 933-8186
                                                                                        hank.lawrence@steptoe-johnson.com
                                               (304) 933-8000   (304) 933-8183 Fax
                                               www.steptoe-johnson.com



                                                    February 23, 2018

Jeremy Black, Esquire
McAfee & Taft
1oth Floor, Two Leadership Square
211 N. Robinson
Oklahoma City, OK 73102


                              Re:     Penn Investment Funds, LLC
                                      v. Braxton Energy, LLC, et al.
                                      Cause No. 141-290089-17

Dear Mr. Black:

               Antero Resources Corporation ("Antero") has retained this firm to seek the return
of confidential and proprietary business records and trade secret information. We have recently
learned that Scott Bauer and Brad Ashburn and their affiliated entities, including Braxton
Minerals III, LLC, may have mineral title opinions prepared by Antero's counsel relating to
properties owned by Braxton Minerals III, LLC. We also believe they may have shared Antero's
Critical Date Report and SWN Defects June 2016 Acquisition Report with Braxton Minerals III,
LLC and consequently EnerQuest Oil & Gas, LLC. Antero considers such records as
confidential and proprietary business records and trade secrets. Antero has never consented to
Mr. Bauer, Mr. Ashburn, or EnerQuest Oil & Gas, LLC's possession of such documents or
information. If such information was provided to your client by a third party, that third party had
no authorization to provide them. Antero demands the immediate return of all such information.

                Antero obtained the enclosed Temporary Injunction Order dated June 14, 2017,
that restrains persons from divulging and/or communicating any trade secret documents of
Antero. The Order also requires persons to provide notice to Antero of any reasonably
identifiable confidential and proprietary trade secret documents of Antero in their possession and
return same to Antero. The Temporary Injunction Order further requires persons to identify any
individuals or entities to whom the parties have shared Antero's trade secret documents.

                Please advise if your client, EnerQuest Oil & Gas, LLC, has such information
and, if so, please return such information to me as counsel for Antero and verify that EnerQuest
Oil & Gas, LLC has not retained copies. Please further advise whether EnerQuest Oil & Gas,
LLC is aware of any third parties to whom such information has been disseminated and the
identity of such third parties. We are aware of the proposed sale by Braxton Minerals III, LLC
of its mineral interests in West Virginia. Antero requests that you verify that EnerQuest Oil &
Gas, LLC and Braxton Minerals III, LLC have not shared such confidential and proprietary
records and trade secrets with any prospective purchasers of such interests. If EnerQuest Oil &
Gas, LLC does not possess such information, please verify this to me. We ask for your response
by 5:00 p.m. EST on Monday, February 26, 2018. Antero will pursue all legal remedies to




                                                                                                .      T ETlR AL EX'
      West Virginia • Ohio • Kentucky • Pennsylvania • Texas • Colorado                     •       . . .... tr   ,,,. lo11•.:,..,,...'".1-
Jeremy Black, Esquire
February 23, 2018
Page2



obtain the return of this information and to insure no further dissemination of such information.
In addition, Antero will seek recovery for any damages arising from the use or disclosure of such
information.

               Should you have questions regarding the foregoing, please do not hesitate to
contact me.


                                                Very truly yours,



                                                W. Henry Lawrence

WHL/cee
Enclosure




7943961 .1
                                  CAUSE NO. 141-290089-17

PENN INVESTMENT FUNDS, LLC,   §                     IN THE DISTRIC'i"'
               Plaintiff      §
                              §
ANTERO RESOURCES CORPORATION, §
                Intervenor    §
                              §
vs.                           §
                              §
BRAXTON ENERGY, LLC,          §                     TARRANT COUNTY, TEXAS
BRAXTON ACQUISITIONS, LLC,    §
BRAXTON MINERALS II, LLC,     §
ROBERT SCOTT BAUER, JOHN      §
BRADLEY ASHBURN, MICHAEL      §
FISHER, MAEGEN FISHER, M&M    §
CONSULTING and KELLY O'CONNOR §
                Defendants    §                     141 st JUDICIAL DISTRICT

                            TEMPORARY INJUNCTION ORDER AND
                                 ORDER SETTING TRIAL

       On the 14th day of June, 2017, the Application for a Temporary Injunction of Intervenor,

ANTERO RESOURCES CORPORATION ("ANTERO"), was heard before this Court. After

considering ANTERO's Application, the pleadings, the evidence presented, and arguments of

counsel, the Court finds that ANTERO'S Application should be GRANTED.

       The Court's reasons for ordering the Temporary Injunction are its findings that:

       1.     ANTERO is engaged in the business of oil and gas exploration and production

from wells located in West Virginia.

       2.     On or about May 22, 2017, ANTERO learned of Plaintiff's and Defendants'

possession of confidential and proprietary business records and trade secret information by

electronic communication from Texhoma Land Consultants ("TEXHOMA"). Such electronic

communication contained a Demand for Preservation of Evidence dated May 20, 2017, from

Plaintiffs counsel to TEXHOMA. TEXHOMA is the land agent of ANTERO.


                                                                                      Page 1 of I)   7
        3.     In response to ANTERO'S request that the parties identify any trade secre.t

documents in their possession, Plaintiff's counsel identified portions of ANTERO'S Critical

Date Report dated November 15, 2016, and a portion of ANTERO'S SWN June 2016

Acquisition Defects report. (See text message exchange produced by Plaintiff and bates labeled           .
                                                       ct. ci ..vi ,+~ c.ci lte..t-+;tt..l '1 a..s. ~ \...,'\\ ?r~
PENN000212 whi ch included two photographs that are ttttttehed to t:bis Order ll'llde~l j_ ~d

~) .                         In addition, Plaintiff's counsel identified ANTERO'S Title Opinions           I '1
Nos. 1522, 1914, and 2894 pertaining to ANTERO'S drilling units in West Virginia. (See

documents produced by Plaintiff and bates labeled PENN000407-000557). ANTERO'S Critical

Date Reports, SWN June 2016 Acquisition Defects report, Title Opinions, and other similar

documents/reports are highly confidential and proprietary information containing trade secrets

(''Trade Secret Documents").

       4.      ANTERO's Critical Date Reports reflect the status of ANTERO's well activities

in West Virginia including, among other data, the dates of drilling and dates for first gas and oil

sales from the wells.    ANTERO's SWN June 2016 Acquisition Defects report reflects due

diligence conducted by ANTERO as part of its proposed acquisition of West Virginia leases

from SWN Energy Services Company, LLC. Such report identifies leases ANTERO proposed to

acquire from SWN Energy Services Company, LLC. Finally, ANTERO's Title Opinions were

prepared by ANTERO's counsel to reflect the ownership of minerals and the rights to develop

such minerals for properties in West Virginia.

       5.      ANTERO has never consented to possession of such Trade Secret Documents by

the Plaintiff or any of the Defendants.      ANTERO made a reasonable effort to keep such

documents secret, and the information is generally unknown to and not readily ascertainable by

third parties. ANTERO maintains these Trade Secret Documents on its computer server. Access



                                                                                          Page 2of.,   7
to such documents is limited to ANTERO employees and its land agents through TEXHOMA.

Access is password protected.     TEXHOMA's contracts with landmen and others included

confidentiality provisions preventing the personal use and disclosure of ANTERO's confidential

documents and information.

       6.     ANTERO utilizes said Critical Date Reports, the SWN June 2016 Acquisition

Defects report, and Title Opinions to plan and conduct its exploration and production operations,

as well as its acquisition of mineral interests. ANTERO will be irreparably injured pursuant to

the Texas Uniform Trade Secrets Act because ANTERO's confidential and proprietary trade-

secret documents and information are already in the possession of Plaintiff and Defendants and

will most likely be disseminated to and utilized by third parties to gain an unfair market

advantage in relation to surface and mineral real property interest rights thereby disrupting

ANTERO's business operations and jeopardizing ANTERO's confidential information,

employment relations, existing and prospective business relationships, reputation, and goodwill.

Such damages to ANTERO are not easily calculable and cannot be measured by a certain

standard.

       7.     The harm to ANTERO is imminent and irreparable. Because the Texas Uniform

Trade Secrets Act has a specific provision for an injunction for its enforcement, no showing of

inadequate remedy at law is required to have injunctive relief granted to enforce the TUTSA.

Regardless of the necessity of proving irreparable harm, the only adequate remedy would be to

immediately enjoin Plaintiff and Defendants from disseminating or using ANTERO's Trade

Secret Documents pending the outcome of ANTERO's claims.

       IT IS THEREFORE ORDERED, ADJUDGED and DECREED that Plaintiff, PENN

INVESTMENT FUNDS, LLC, and Defendants, BRAXTON ENERGY, LLC, BRAXTON
ACQUISITIONS, LLC, BRAXTON MINERALS II, LLC, ROBERT SCOIT BAUER, JOHN

BRADLEY ASHBURN, MICHAEL FISHER, MAEGEN FISHER, M&M CONSULTING

AND KELLY O'CONNOR, as well as Plaintiffs and Defendants' agents, servants, employees,

successors, assigns, and attorneys are hereby immediately restrained from divulging, revealing,

describing, summarizing, quoting, transmitting, communicating or using outside this Lawsuit or

related lawsuit any and all Trade Secret Documents and/or infonnation of Intervenor, ANTERO

RESOURCES CORPORATION, including but not limited to:

       1.      Critical Date Reports;

       2.      The SWN June 2016 Acquisition Defect report; and

       3.      Real Property Title Opinions prepared by ANTERO's attorneys.

       This Court further ORDERS Plaintiff, PENN INVESTMENT FUNDS, LLC, and

Defendants, BRAXTON ENERGY, LLC, BRAXTON ACQUISITIONS, LLC, BRAXTON

MINERALS II, LLC, ROBERT SCOIT BAUER, JOHN BRADLEY ASHBURN, MICHAEL

FISHER, MAEGEN FISHER, M&M CONSULTING AND KELLY O'CONNOR, to produce to

ANTERO within three (3) days of the date of this Order any and all documents previously

exchanged between the parties through the discovery process (unless already done so pursuant to

the June 5, 2017 Temporary Restraining Order) so that ANTERO may review same and

designate any of such documents as "PROTECTED" and thereby subject to the tenns and

conditions of the Agreed Protective Order entered on May 18, 2017 in this Lawsuit. Plaintiff and

Defendants must also comply with the Texas Rules of Civil Procedure and provide ANTERO

with copies for review of any documents produced after the date of this Order. In addition, the

tenns of this Comt's previously issued Order Granting Level III Discovery Control Plan

regarding the discovery of electronic information continue to apply.



                                                                                     Page 4 of I   7
       Pursuant to Section 134A.003(c) of the Texas Uniform Trade Secrets Act, IT IS

FURTHER ORDERED, ADJUDGED AND DECREED that Plaintiff, PENN INVESTMENT

FUNDS, LLC, and Defendants, BRAXTON ENERGY, LLC, BRAXTON ACQUISITIONS,

LLC, BRAXTON MINERALS II, LLC, ROBERT SCOTT BAUER, JOHN BRADLEY

ASHBURN, MICHAEL FISHER, MAEGEN FISHER, M&M CONSULTING AND KELLY

O'CONNOR provide notice to ANTERO and all other parties within five (5) days of the date of

this Order of any additional reasonably identifiable confidential and proprietary trade-secret

documents of ANTERO in the actual or constructive possession of the parties (including their

agents, servants, employees, successors, assigns, and attorneys) and return to ANTERO and their

respective counsel any such reasonably identifiable confidential and proprietary trade-secret

documents (unless already done so pursuant to the June 5, 2017 Temporary Restraining Order).

The parties' obligation to comply with this paragraph remains in effect during the pendency of

this temporary restraining order and any future temporary injunction/permanent injunction.

       IT IS FURTHER ORDERED, ADJUDGED AND DECREED that Plaintiff, PENN

INVESTMENT FUNDS, LLC, and Defendants, BRAXTON ENERGY, LLC, BRAXTON

ACQUISITIONS, LLC, BRAXTON MINERALS II, LLC, ROBERT SCOTT BAUER, JOHN

BRADLEY ASHBURN, MICHAEL FISHER, MAEGEN FISHER, M&M CONSULTING

AND KELLY O'CONNOR provide ANTERO and all other parties within five (5) days of the

date of this Order a list detailing any persons or entities to whom the parties shared ANTERO'S

Trade Secret Documents or any additional reasonably identifiable confidential and proprietary

trade-secret documents of ANTERO (unless already done so pursuant to the June 5, 2017

Temporary Restraining Order).




                                                                                     Page S of I'   7
        IT IS FURTHER ORDERED, ADJUDGED AND DECREED that Plaintiff, PENN

INVESTMENT FUNDS, LLC, and Defendants, BRAXTON ENERGY, LLC, BRAXTON

ACQUISITIONS, LLC, BRAXTON MINERALS II, LLC, ROBERT SCOTT BAUER, JOHN

BRADLEY ASHBURN, MICHAEL FISHER, MAEGEN FISHER, M&M CONSULTING

AND KELLY O'CONNOR maintain, preserve and not destroy, modify, alter, or misplace any

and all computers, phones, tablets, servers, flash drives, memory cards, online cloud storage

locations, and email systems that contain ANTERO'S Trade Secret Documents or any additional

reasonably identifiable confidential and proprietary trade-secret documents of ANTERO until

such can be secured through subpoena or deposition. These items must be preserved in their

exact condition, without destruction or alteration of any kind in relation to Antero's Trade Secret

Documents, intentional or unintentional. To the extent these devices must necessarily remain in

use, the Plaintiff and Defendants must ensure that no destructive routines are allowed to run on

these devices.    Such destructive routines preclude the use of any programs, applications,

routines, whether manually or automatically initiated, that have the ability to alter or destroy data

of any kind. Examples, which are merely examples and not exhaustive, include defragmentation,

cleaning programs of any kind, repair programs of any kind, and programs designed to destroy

data of any kind. Plaintiffs and Defendants are required to actively prevent the alteration or

destruction of any Trade Secret Document data on these devices, including data that they may

not consider relative to this matter, because alteration or destruction of any kind can hamper the

forensic recovery of data and other important and germane data artifacts.

       IT IS FURTHER ORDERED, ADJUDGED AND DECREED that ANTERO's and

DEFENDANT KELLY O'CONNOR'S respective counsels of record will execute and agree to




                                                                                         Page 6 of Si   7
be bound by the terms of the Agreed Protective Order entered on May 18, 2017 in this Lawsuit

or any subsequent amended Agreed Protective Order.

       IT IS FURTHER ORDERED, ADJUDGED AND DECREED that trial of the merits in

this cause is set for April 2, 2018.

       IT IS FURTHER ORDERED, ADJUDGED AND DECREED that this temporary

injunction order shall not be effective unless and until ANTERO has filed an appropriate bond or

cash deposit via personal   ch~ck in lieu thereof in the amount of $   ,,//d!J'   ~

                                                7~<=~        !DING JUDGE                 '




                                                                                      Page 7of 9   7
EXHIBIT 3
From:                       Black, Jeremy
Sent:                       Monday, March 05, 2018 2:59 PM
To:                         'Hank Lawrence'
Cc:                         'Jason Grill'
Subject:                    RE: Braxton - letter to Jeremy Black (2/23/18)
Attachments:                Emails.zip; Text.zip; Attachments.html


Hank,

In response to Antero’s letter dated 2/23/18, EnerQuest has reviewed the materials in its possession or control including
(1) various correspondence (email and texts messages) and (2) paper files EnerQuest received upon taking over the
management of BMIII from Braxton Minerals-Appalachia, LLC (“BMA”). The focus of EnerQuest’s review was to
determine whether any of Antero’s confidential and proprietary business records and trade secret information was
shared with EnerQuest. Included with this email are the following materials:

    1. A zip file containing six (6) emails involving Scott Bauer which reference and/or include a Critical Date Report
       and/or drilling schedule.
    2. A zip file containing a text message exchange between Scott Bauer and Greg Olson w/ EnerQuest that includes a
       screen shot of a drill schedule.
    3. A ShareFile link whereby certain additional information that was sent by Scott Bauer to Greg Olson w/
       EnerQuest via Dropbox. These are being shared via ShareFile due to the size of the files.

It is EnerQuest’s belief that all of the information included in this email was received by EnerQuest in February 2017 (or
later) and this information was shared by Scott Bauer in conjunction with Scott Bauer’s attempt to have EnerQuest
commit additional funds to his mineral acquisition program. As background, BMIII is the only mineral acquisition venture
sponsored by Scott Bauer or Brad Ashburn (or any of their affiliated entities) in which EnerQuest has participated. BMIII
acquired all of its minerals between November 2015 and April 2016, almost a year before any of the materials
referenced in this email were provided by Scott Bauer to EnerQuest. EnerQuest has not shared this information with any
party other than Scott Bauer and Brad Ashburn.

Please let me know if you have any questions about or otherwise would like to discuss anything included in this
response.

Regards,
Jeremy

 ShareFile Attachments
 Title                                                                                        Size

 EQ Response to Antero Letter Dated 2-23-18                                                   589.8 MB

    Download Attachments            Jeremy Black uses ShareFile to share documents securely. Learn More.




From: Hank Lawrence [mailto:Hank.Lawrence@Steptoe-Johnson.com]
Sent: Monday, February 26, 2018 6:48 PM
To: Black, Jeremy
Cc: Jason Grill
Subject: RE: Braxton - letter to Jeremy Black (2/23/18)

                                                              1
Jeremy,

Antero Resources Corporation (“Antero”) agrees to EnerQuest Oil & Gas, LLC’s (“EnerQuest”) request for a one week
extension, i.e., until March 5, 2018 at 5:00 p.m. EST, to: (1) advise Antero if EnerQuest possesses any Antero confidential
and proprietary business records and trade secret information; (2) identify any individuals or entities to whom
EnerQuest shared any Antero confidential and proprietary business records and trade secret information; and (3) return
any Antero confidential and proprietary business records and trade secret information.

Please also be advised that it is our understanding that the “Notice to Potential Bidders” posted on Energynet.com
related to the proposed sale by Braxton Minerals III, LLC (“BMIII”) of its mineral interests in West Virginia states that
Antero has not advised BMIII “why the revenue is in suspense.…” As previously communicated, Antero initially placed
the relevant royalty payments in suspense due to the ongoing ownership dispute between the members of BMIII. As you
know, Robert Scott Bauer objected to EnerQuest’s replacement as manager of BMIII, and it is therefore unclear to
Antero if BMIII possesses the proper authority to post said minerals for sale. Antero’s uncertainty in this regard will
necessarily carry forward to effect any buyers from BMIII. More recently, Antero discovered information that raises
concerns as to whether BMIII may have acquired said mineral interests in West Virginia through the use of improperly
misappropriated confidential and proprietary business records in violation of the Texas Uniform Trade Secrets Act
(“TUTSA”).

Based on the foregoing, Antero reserves the right to not recognize any mineral deed ownership transfers in the event of
a sale of any of BMIII’s mineral interests in West Virginia. In other words, Antero provides no assurance that the royalty
payments will be released to any new owners of said minerals until the above issues are resolved, and Antero can be
assured that it is paying the true owner. As you can appreciate, Antero does not want to be exposed to paying these
royalties more than once. Antero therefore recommends that BMIII cancel any sale of its mineral interests in West
Virginia. In the alternative, BMIII should advise any potential buyers of the disputed issues pertaining to the mineral
properties.

I look forward to hearing from you.


Hank Lawrence
Steptoe & Johnson PLLC
304-933-8186

From: Black, Jeremy [mailto:jeremy.black@mcafeetaft.com]
Sent: Monday, February 26, 2018 1:50 PM
To: Hank Lawrence
Cc: Jason Grill
Subject: RE: Braxton - letter to Jeremy Black (2/23/18)

Hank,

I have discussed your letter with EnerQuest Oil & Gas, LLC (“EnerQuest”) and they have confirmed that none of Antero’s
confidential and proprietary materials described in your letter have been shared with any prospective purchaser of the
mineral interests held by Braxton Minerals III, LLC (“BMIII”). As for your request to verify whether EnerQuest possesses
such information, we request a one week extension of the response date to 5pm EST on Monday, March 5, 2018. The
additional time is necessary to allow EnerQuest to review the various materials received from Scott Bauer and/or Brad
Ashburn related to BMIII in order to determine whether any of the referenced Antero materials are included therein.
Please confirm whether you are agreeable to the extension.


                                                             2
Also, thank you for requesting BMIII’s suspense information from Antero and we look forward to receiving this
information from you.

Regards,
Jeremy

From: Hank Lawrence [mailto:Hank.Lawrence@Steptoe-Johnson.com]
Sent: Friday, February 23, 2018 4:24 PM
To: Black, Jeremy
Cc: Jason Grill
Subject: FW: Braxton - letter to Jeremy Black (2/23/18)

Jeremy,

Please see attached correspondence outlining our conversation earlier today regarding Antero’s title opinions. I have
requested that Antero send me the current suspense balance for Braxton Minerals III, LLC and will forward that to you. I
will later send you the updated information through the end of February 2018 as you requested.

Hank Lawrence
Steptoe & Johnson PLLC
304-933-8186




Steptoe & Johnson PLLC Note:
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Steptoe & Johnson PLLC Note:
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                                                                                    3
EXHIBIT B
                                         141-290089-17                                               FILED
                                                                                        TARRANT COUNTY
                                                                                          5/2/2018 5:32 PM
                                  CAUSE NO.
                                  CAUSE     141-290089-17
                                        NO. 141-290089-17                              THOMAS A. WILDER
                                                                                          DISTRICT CLERK



PENN INVESTMENT
PENN INVESTMENT FUNDS,
                FUNDS, LLC,
                         LLC,         §§               THE DISTRICT
                                                    IN THE
                                                    IN              COURT OF
                                                           DISTRICT COURT OF
               Plaintiff
               Plaintiff              §§
                                      §§
ANTERO RESOURCES
         RESOURCES CORPORATION,
                                             ‘



ANTERO                  CORPORATION, §§
                    Inlervenar
                    Intervenor        §§
                                      §§
VS.
VS.                                   §§
                                      §§
BRAXTON ENERGY,
BRAXTON   ENERGY, LLC,LLC,            §§
BRAXTON ACQUISITIONS,
BRAXTON   ACQUISITIONS, LLC,   LLC,   §§
BRAXTON MINERALS
BRAXTON   MINERALS II,      LLC,
                        II, LLC,      §§
ROBERT SCOTT
ROBERT   SCOTT BAUER,
                BAUER, JOHN JOHN      §§
BRADLEY ASHBURN,
BRADLEY                MICHAEL
          ASHBURN, MICHAEL            §§
        MAEGEN FISHER
FISHER, MAEGEN
FISHER,            FISHER ANDAND      §§
M&M   CONSULTING,
M&M CONSULTING,                       §§
                                      §§
             Original Defendants      §§            141st   JUDICIAL DISTRICT
                                                    14 1 st JUDICIAL DISTRICT
                                      §§
                                      §§
AUSTIN FOX,
AUSTIN  FOX, JOE     PENN JR.,
              JOE F. PENN     JR,     §§
BRAXTON MINERALS
BRAXTON                      VENTURE §§
          MINERALS III, VENTURE
STRONG II LLC,
STRONG     LLC, POST   OAK
                POST OAK              §§
APPALACHIA LLC,
APPALACHIA          TURN 2 ENERGY
              LLC, TURN        ENERGY §§
LLC, BRAXTON-MINERALS
LLC, BRAXTON-MINERALS                 §§
APPALACHIA LLC,
APPALACHIA          AND ENERGY
              LLC, AND       ENERGY §§
CORPORATION OF
CORPORATION      OF AMERICA,
                    AMERICA,          §§
ENERQUEST OIL
ENERQUEST    OIL && GAS,
                    GAS, L.L.C.,      §§
                                      §§
             New
             New Defendants.
                  Defendants.         §§            TARRANT COUNTY,
                                                    TARRANT         TEXAS
                                                            COUNTY, TEXAS

        INTERVENOR  AN TERO RESOURCES
        INTERVENOR ANTERO    RESOURCES CORPORATION’S
                                         CORPORATION’S RESPONSE
                                                         RESPONSE
           TO ENERQUEST
           TO ENERQUEST OIL  & GAS
                         OIL & GAS L.L.C.’S SPECIAL APPEARANCE
                                            SPECIAL APPEARANCE
                        AND MOTION
                        AND MOTION TOTO CONTINUE
                                        CONTINUE
       Intervenor Antero Resources Corporation (“Antero”) files
                                                          ﬁles this
                                                                this Response to EnerQuest Oil


& Gas, L.L.C.’s (“EnerQuest”) Special Appearance to
&                                                to Object to Personal Jurisdiction.


       EnerQuest’s special appearance should
                                      Should be denied.              company registered to
                                                denied. EnerQuest, a company            to do


business in Texas, entered into a joint venture with a Texas entity.
                                                             entity. That venture, to be based in


Fort Worth, was manned by
            was manned    two Texans tasked with collecting information about oil and gas
                       by two
                                             EnerQuest.
properties and conveying that information to EnerQuest.                   As agreed, EnerQuest received
                                                                          As

            from Texas and
information from                     money to Texas to invest in those properties.
                       and then sent money                                         We now
                                                                       properties. We now know
                                                                                          know

         two Texans EnerQuest designated for this work, Scott Bauer and Brad
that the two                                                                 Ashbum, acquired
                                                                        Brad Ashburn,

Antero’s trade secrets in the course of and in furtherance of
                                                           of that work. EnerQuest even admits that

                                             documents from
it ultimately received Antero’s trade-secret documents                                  had
                                                       from Bauer. Therefore, EnerQuest had

sufﬁcient contacts with Texas for this Court to exercise personal jurisdiction in connection with
sufficient

this matter.

           To assure that the Court would
           To                       would be                of the timing, quantity, and scope of
                                          be fully informed of

EnerQuest’s relevant contacts,
                     contacts, Antero served limited discovery requests on EnerQuest before this

special appearance was set
                       set for hearing.
                               hearing. EnerQuest’s responses are not yet due. Therefore, to the

extent the Court requires additional information on EnerQuest’s relationship to
                                                                             to Texas and the


                       moves for a continuance of the special appearance hearing so that it
matter at hand, Antero moves                                                                may
                                                                                         it may



                                       of personal jurisdiction.
conduct discovery limited to the issue of          jurisdiction.

I.         FACTUAL BACKGROUND
           FACTUAL BACKGROUND
                                                                                            owning
           EnerQuest is registered to do business in Texas, operating oil and gas wells and owning

                                    here,‘1 but EnerQuest’s connection with this
non-operating oil and gas interests here,                                   this specific case begins


with the formation of a Texas-based company. In November of 2015, EnerQuest and Braxton
                                                November of

                     LLC (“BMA”), an existing Texas company, entered into a Limited Liability
Minerals-Appalachia, LLC

Company Agreement
Company Agreement to form
                     fonn Braxton Minerals III, LLC (“the BMIII Agreement”).
                                           III, LLC             Agreement”)?2 EnerQuest




     1
     1
         EnerQuest’s Special Appearance at
                                        at 4.
                                           4.

    2
                           W. Olson (attached as Exhibit 11 to EnerQuest’s Special Appearance, henceforth, “Olson
      Affidavit of Gregory W.
Affid.”) ¶ 5;
Afﬁdf’) 1] 5; BMIII Agreement                      l-A to Special Appearance) §§ 2.1.
                              (attached as Exhibit 1-A

                                                       2
                                            Ashbum and Scott Bauer,
concedes that BMIII was “sponsored by” Brad Ashburn                           whom are Texas
                                                                           of whom
                                                             Bauer,33 both of

                                       The BMIII
          and defendants in this case. The
residents and                              BMIII Agreement, which was executed by
                                                            which was             Brad
                                                                               by Brad

Ashbum as president of
Ashburn             of the Texas-based BMA,44 designated the new company’s principal place of
                           Texas—based BMA,                                                of

                        Texas.55
business as Fort Worth, Texas.

           As part of
           As                                                                                  Texan
                   of its initial investment in BMIII, EnerQuest obtained information from its Texan

                may have included the Antero trade secret information in question. Under
colleagues that may                                                                Under the

BMIII                new company
BMIII Agreement, the new         BMIII was
                         company BMIII was to acquire mineral interests from another Braxton

entity, defendant Braxton Minerals II, LLC.56
                                   11, LLC.                  The BMIII Agreement
                                                             The BMIII Agreement recites that, prior to

           BMA provided EnerQuest with “title
execution, BMA                         “title reports” concerning the title of the grantors from


whom                                                                            Ashbum and
                                                                     shown that Ashburn
                                      acreage.77 It has already been shown
whom Braxton Minerals II acquired its acreage.

Bauer, the men running Braxton Minerals II,
                                        11, possessed Antero’s
                                                      Anter0’s confidential
                                                               conﬁdential title
                                                                            title opinions and


      trade—secret documents
other trade-secret                        summer and fall of
                   documents dated in the summer                                    Ashburn
                                                          of 2015 because Bauer and Ashburn

produced such trade secret documents to Antero in discovery.
                                                  discovery.88 Based                    Ashbum
                                                               Based on the information Ashburn

                           BMA, EnerQuest sent more than $975,000 to Texas to
and Bauer provided through BMA,                                                    BMIH’s
                                                                           to fund BMIII’s


                                              BMA and Braxton Minerals II (both Texas entities)
                   West Virginia acreage that BMA
acquisition of the West

               acquired.99
had previously acquired.




    3
                                                              Hank Lawrence
                             from Jeremy Black, EnerQuest, to Hank
      See Exhibit 1 (Email from
                     1                                                                               & Johnson
                                                                   Lawrence and Jason Grill, Steptoe &
PLLC (March 5, 2018), enclosed with Letter from
PLLC                                           from Joseph M.M. Cox, Bracewell, to Jason Grill
                                                                                         Grill (April 26, 2018)
(henceforth, “Cox Letter”)).
                  Letter”)).
    4
              Afﬁd, ll
        Olson Affid. ¶ 5.
    5
        BMHI Agreement
        BMIII Agreement §§ 1.4(b).
                           l.4(b),
    6
        BMIII Agreement
        BMIII Agreement §§ 4.1(a).
                           4.l(a).
    7
        BMIII Agreement
        BMIII Agreement §§ 4.1(a).
                           4.l(a).
     8
                        was added to this case, other parties had produced 2014 and 2015 Title Opinions subject to
       Before EnerQuest was
the Court’s Temporary Injunction.                                                 conﬁdential nature, but Antero will
                      Injunction. These documents are not attached due to their confidential
                                                               on this Special Appearance.
make them available for the Court’s review during the hearing on               Appearance.
    9
              Afﬁd, ll
        Olson Affid. ¶ 6.

                                                         3
          Moreover, EnerQuest’s involvement with Texas through BMIII was expected to
                                                                                  to be long-


         Under the seven-year agreement,
lasting. Under                agreement,‘°
                                         10
                                                      committed to invest ten million dollars in
                                            EnerQuest committed

                             work,“
BMIII’s property acquisition work, 11
                                      which                                    Worth office by
                                            would be carried out from the Fort Worth
                                      which would                                           by

Ashbum and Bauer.
Ashburn    Bauer.”12
                     The BMIII Agreement
                     The BMIII Agreement required Ashburn
                                                  Ashburn to devote all of             BMHI,
                                                                        of his time to BMIII,

and required Bauer
and          Bauer to devote at least fifty
                                      ﬁfty percent of                        mandated that all their
                                                                         and mandated
                                                   of his time to BMIII, and

West Virginia leasing activity would
West                           would be performed exclusively for Fort Worth-based BMIII.”
                                                                       W0rth—based BMIII. 13



                              would not dispose of its interest in Texas-based
Moreover, EnerQuest agreed it would                                            BMIII without the
                                                                   Texas—based BMIII

         of its Texas-based
approval of                              BMA.”14
                Texas—based co-venturer, BMA.

                                            BMIII would
                                Texas—based BMIII
          EnerQuest agreed that Texas-based       would seek out oil and gas information for

EnerQuest’s benefit;                              demanded was
            beneﬁt; and the information EnerQuest demanded was likely tainted by BMA’s
                                                                              by BMA’s

                    of Antero trade secret documents. For each property acquisition after the
improper possession of

company’s creation,
          creation, the Texas-based BMA, acting as Manager
                        Texas—based BMA,           Manager of        was required to send
                                                           of BMIII, was

                                            BMIII planned to acquire, including property and
EnerQuest certain information about acreage BMIII

                                BMA was
grantor details.155 Critically, BMA
                   I

                                                                             which horizontal drilling
                                    was to propose acquisitions in units for which
                       16
permits already issued.16                                identiﬁcation and drilling units could have
                          Details regarding the property identification

been taken from the title opinions and other Antero trade secret information in Bauer and

Ashburn’s                                       BMA was toto turn this
Ashbum’s possession. Under the BMIII Agreement, BMA               this information over to
                                                                                        to




   1°
   10
        BMIll Agreement
        BMIII Agreement §§ 2.1.
   11
   1‘
            BMIH Agreement
        See BMIII                   A-Members and Commitments.
                  Agreement Exhibit A-Members     Commitments.
   12
   12
            BMIH Agreement
        See BMIII Agreement §§ 6.4(a).
   13
   13
        BMIll Agreement
        BMIII Agreement §§ 11.1(b).
                           ll.l(b).
   14
   14
            BMIH Agreement
        See BMIII Agreement §§ 9.1(b).
                               9.l(b).
   15
   15
        BMIll Agreement
        BMIII Agreement §§ 4.1(b)(i).
                           4.l(b)(i).
   ‘“
   16
        See id.
            id.



                                                    4
           who would
EnerQuest, who would decide whether or not to approve the acquisitions based on
                                                                             on the information

provided.”
provided.17

           Based on the information Antero has now, Bauer
           Based                                              Ashbum did as EnerQuest asked,
                                                    Bauer and Ashburn

                                                   West Virginia acreage they were
presumably sending EnerQuest information about the West                       were targeting

and to which Antero’s trade secret documents relate. BMIII acquired the majority of
                                             relate. BMIII                              West
                                                                                 of its West

                          November 2015 through April 2016,
Virginia minerals between November                    2016,18
                                                            18
                                                                                which Bauer
                                                               a time frame for which

    Ashbum possessed a significant
and Ashburn            signiﬁcant amount of
                                         of Antero’s trade secret information.
                                                                  information.”19
                                                                                     would have
                                                                                  It would

been consistent with Bauer’s practice,
                             practice, in the course of
                                                     of sending information from Texas to
                                                                                       to solicit
                                                                                          solicit


EnerQuest’s funding, to
                     to use the improperly-obtained
                                improper1y—obtained confidential                         BMA’s
                                                                            of Antero in BMA’s
                                                    conﬁdential information of

possession. For example, Bauer admits to
                                      to soliciting
                                         soliciting Joe Penn’s investment using Antero trade


        and the promise of
secrets and             of access to such secrets.
                                          secrets.”20



           EnerQuest admits that it                            trade—secret—based offer from Bauer,
                                 it received at least one such trade-secret-based



                  show that in the course of that discussion, EnerQuest specifically
and the documents show                                                  speciﬁcally sought out

Antero’s confidential
         conﬁdential information. EnerQuest concedes that in or after February 2017, Bauer sent

EnerQuest some of Antero’s trade secret documents that Bauer had maintained in
                                                                            in Texas: two


drilling
drilling schedules with detailed information on Antero’s drilling
                                                         drilling program, a permit list
                                                                                    list showing



                                                     hoped would
Antero’s active permits, and other information Bauer hoped       prompt EnerQuest to invest in
                                                           would prompt




    17
    17
         See id.
             id.

    1*
    18
               Afﬁd. 1l
         Olson Affid.      Cox Letter.
                      ¶ 7; Cox
      19
     19
         See Antero’s Title
                      Title Opinions;
                            Opinions; Drill             of6.l5.20l5-Patterson
                                      Drill Schedule as of                                             of6.l5.20l5-Rig
                                                           6.15.2015-Patterson 340; Drill Schedule as of 6.15.2015-Rig
10;
10;  Exhibit       WV
              5 WV Permits as of  6.5.2015; Antero’s Critical
                                of6.5.20l5;           Critical Date Report (to
                                                                           (to be made available for
                                                                                                 for the Court’s review
at the hearing on this Special Appearance).
    2"
    20
       See Exhibit 2 (Transcript of Temporary Injunction hearing at 36:25-37:3                                   Penn of
                                                                         3625-3713 (explaining that he told Joe Penn
Antero’s trade secret documents because: “He“He was                          money in the deal. II was
                                                 was looking to invest other money                 was making     money
                                                                                                              him money
                                                                                                       making him
on deals,
   deals, and then II wanted to
                             to keep it
                                     it rolling,                       my bounds.”)).
                                        rolling, and so II overstepped my


                                                           5
more mineral acquisitions.
more         acquisitions.“21
                                                     from June of 2015 to 2016, contained
                              These documents, dated from

detailed information on Antero’s permits and drilling
                                             drilling schedules that
                                                                that could only have been derived


from Antero’s confidential
              conﬁdential business information, and in
                                                    in some cases,                   on the
                                                            cases, had Antero’s logo on

           What EnerQuest does not mention in its papers is
documents. What
documents.                                               is that
                                                            that EnerQuest’s then-president


Greg Olson actually reached out to Bauer
Greg                                              and requested Antero’s drilling
                                   Bauer in Texas and                    drilling schedule


                 Bauer.”
information from Bauer. 22
                           Discovery could turn up
                                                up additional trade-secret                  by
                                                              trade—secret information sent by


          Ashbum to EnerQuest in earlier time periods, as EnerQuest has not specifically
Bauer and Ashburn                                                           speciﬁcally denied

                                 documents or information pulled from
receiving any other trade-secret documents                       from trade-secret documents.

                                                                       Worth—based BMIII. After
           In September 2017, EnerQuest sought to take control of Fort Worth-based

repeated correspondence directed to Texas citizens and entities
                                                       entities (attached to
                                                                          to EnerQuest’s Special


Appearance                  1-D, 1-E,
                       1-C, 1-D,
Appearance as Exhibits 1-C,      1-E, and 1-F),
                                          1-F), EnerQuest asserted its apparent role of manager
                                                                                     of manager

of BMIII.

II.        LEGAL STANDARD
           LEGAL STANDARD
           Courts have personal jurisdiction over a nonresident defendant when the state’s
                                                                                   state’s long-arm


statute permits such jurisdiction and the exercise of jurisdiction is consistent with federal and state

due-process guarantees. Moncrief Oil Int’l
                        Moncrief0il  Int’! Inc.
                                           Inc. v. OAO Gazprom, 414
                                                v. OAO          414 S.W.3d
                                                                    S.W.3d 142, 149 (Tex.
                                                                           142, 149

       As for the Texas long-arm statute, it broadly allows courts to exercise personal jurisdiction
2013). As

                   who contracts with Texas residents with the intent that either party perform in
over a nonresident who



      2‘
      21
                Afﬁd. 11
        Olson Affid.  ¶ 13;  Cox Letter. The
                         13; Cox           The documents EnerQuest obtained and produced to Antero include: Drill
                                       340 (a document
                  6.l5.2015~Patterson 340
Schedule as of 6.15.2015-Patterson             document EnerQuest obtained from Bauer listing detailed information
                             West Virginia); Drill Schedule as of 6.15.2015-Rig 10
about property interests in West                                                                                may have
                                                                                           document EnerQuest may
                                                                                     10 (a document
obtained from Bauer on August 6, 2016, per the marking on the document, listing detailed information about property
             West Virginia);
interests in West            WV                   6.52015 (a document
                   Virginia); WV Permits as of 6.5.2015       document EnerQuest obtained from Bauer listing detailed
permitting information about properties in WestWest Virginia); Antero’s Critical
                                                                            Critical Date Report (a
                                                                                                  (a document EnerQuest
obtained from Bauer containing Antero’s
                                  Antero's logo and clearly
                                                      clearly indicating it
                                                                         it belonged  to
                                                                                      to Antero).  These materials will be
available for
           for the Court’s review at
                                  at the hearing.

    22
       See Exhibit 3 (February 16,     2017 Email from
                                   16, 2017        from Greg                                    BMA, specifically
                                                         Greg Olson, EnerQuest, to Scott Bauer, BMA, speciﬁcally
                                     how the wells were
requesting the drill schedule to see how           were scheduled).
                                                        scheduled).


                                                            6
                              who “commits a tort
Texas, and over a nonresident who                    whole or in part in this state.” T
                                             tort in whole                            TEX. CIV.
                                                                                       EX. C IV.

PRAC.
P      & RREM.
  RAC. &       CODE
           EM. C ODE §
                     § 17.042(2). As for due process concerns, because the Texas statute reaches
                       l7.042(2). As

    far as the federal constitutional requirements for due process will allow,” Spir Star AG
“as far                                                                                   AG v.
                                                                                             v.



            S.W.3d 868, 872 (Tex. 2010), a state court can exercise
Kimich, 310 S.W.3d                                         exercisejurisdiction
                                                                    jurisdiction over a nonresident

defendant if
          if (1)
             (1) the defendant has established “minimum contacts” with the state
                                                                           state and (2)
                                                                                     (2) the

exercise of jurisdiction comports with “traditional notions of
         of jurisdiction                                    of fair
                                                               fair play and substantial justice.”
                                                                                         justice.” Int
                                                                                                   Int’l’l

Shoe Co.
Shoe Co. v.
         v. Washington,               316 (1945).
            Washington, 326 U.S. 310, 316

        AA   nonresident’s contacts can give rise
                                             rise to
                                                  to general or specific
                                                                speciﬁc personal jurisdiction.
                                                                                 jurisdiction.

Continuous and systematic contacts create general jurisdiction, while specific jurisdiction exists

when           of action arises from or is related to the defendant’s purposeful activities
when the cause of                                                                activities with the


state. Retamco Operating, Inc.
       Retamco Operating,      V. Republic Drilling Co.,
                          Inc. v.                            S.W.3d 333, 338
                                                    C0,, 278 S.W.3d      338 (Tex. 2009).

III.    ARGUMENT
        ARGUMENT

        A.       EnerQuest is Subject to Personal Jurisdiction Because
                 EnerQuest                                                Committed a Tort in
                                                               Because it Committed
                 Texas.

        The evidence demonstrates that EnerQuest committed a tort in Texas, making
        The                                                                 making it
                                                                                   it subject to



speciﬁc jurisdiction here. Using, disclosing, or merely acquiring trade secrets constitutes the tort
specific

of misappropriation as defined by           Uniform Trade Secrets Act
                               by the Texas Uniform               Act (“TUTSA”). See T
                                                                                     TEX.
                                                                                      EX.

CIV.
C     PRAC.
  IV. P      & RREM.
        RAC. &       CODE
                 EM. C ODE § 134A; Seismic Wells,
                           § 134A;                LLC v.
                                           Wells, LLC v. Matthews, 2016 WL 3390507, at *3
                                                                   2016 WL             *3 (N.D.

Tex. Feb. 22,
          22, 2016) (“The tort
                          tort of
                               of misappropriation is deﬁned by
                                                   is defined by TUTSA.”). There is no doubt

                                                                              Ashbum, BMIII
that EnerQuest requested information about oil and gas properties from Bauer, Ashburn, BMIII

       BMA—all Texas residents or entities—in furtherance of EnerQuest’s business relationship
and/or BMA—all

with these Texas entities, and as a result, EnerQuest acquired Antero’s trade secrets.
                                                                              secrets. Therefore,


Antero has claims for misappropriation and conspiracy that arise
                                                           arise directly
                                                                 directly out of
                                                                              of EnerQuest’s

                                            it had documents containing Antero’s trade secrets
conduct directed at Texas. EnerQuest admits it                                         secrets



                                                    7
         making it amenable to Texas jurisdiction
in 2017, making                      jurisdiction in connection with the misappropriation and

                          case.”
conspiracy claims in this case. 23
                                   Exactly which
                                           which documents           had and
                                                 documents EnerQuest had and when, and
                                                                                   and the

                          may be liable in damages
          which EnerQuest may
extent to which                            damages in addition to injunctive relief, is a matter for

                               But tracing specific
ultimate merits determination. But         speciﬁc documents and timing is in no way relevant to
                                                                              no way

the jurisdiction question to be decided today.

                                                       was hardly the result of
          EnerQuest’s connection to these Texas events was                      random or fortuitous
                                                                             of random

                                                proﬁt, reached outside of
actions of other defendants. EnerQuest, seeking profit,                   Oklahoma to create a
                                                                       of Oklahoma

                                                  two Texas residents in an agreement specifically
seven-year relationship with a Texas business and two                                 speciﬁcally

designating they would          work in Fort Worth. See Moncrief, 414
                 would do their work                              414 S.W.3d
                                                                      S.W.3d at 151
                                                                                151 (requiring,

    speciﬁc personal jurisdiction,
for specific         jurisdiction, that
                                   that the defendant “reach out beyond one state and create


continuing relationships and                        some benefit,
                         and obligations” and “seek some                      profit by
                                                         beneﬁt, advantage or proﬁt  by availing

itself
itself of the jurisdiction”).
              jurisdiction”). EnerQuest specifically requested information regarding permits and

           West Virginia,
acreage in West Virginia,“24
                             and then accepted Antero’s trade secrets
                                                              secrets documents that had been


procured and maintained in
                        in Texas by
                                 by EnerQuest’s Texas business partners,”  who conceivably
                                                               partners,25 who

                                                    Based on
acquired the information using EnerQuest’s funding. Based on the extraordinary level of
                                                                                     of detail in

                                                                                       someone
                                         would have no reason to disclose this data to someone
these documents and the fact that Antero would

                                                                     knew or should have known
pursuing a competing interest in the minerals in question, EnerQuest knew                known

                      was confidential
that this information was conﬁdential and proprietary information of Antero. Nevertheless,

EnerQuest kept the trade secret documents in its possession without notifying Antero until Antero

                    them.“
expressly requested them. 26




   23
            Cox Letter.
        See Cox
   24
   24
        BMI Agreement
        BMI Agreement §§ 4.1; see Exhibit 3, Olson-Bauer Emails (specifically
                                                                (speciﬁcally requesting the drilling schedule).
                                                                                                     schedule).
   25
        Cox Letter (acknowledging
                   (acknowledging receipt of
                                          of Antero’s trade secret documents).
                                                                   documents).
   2“
   26
        Cox Letter (explaining that Bauer
        Cox                         Bauer sent EnerQuest the information in February of
                                                                                     of 2017).


                                                          8
       The Supreme
       The Supreme Court of
                         of Texas has found that the receipt of
                                                             of trade secrets,
                                                                      secrets. even if
                                                                                    if the recipient


did not request them, was                             of personal jurisdiction.
                      was a contact weighing in favor of          jurisdiction. See id. (ﬁnding
                                                                                    id. (finding


         jurisdiction proper when the defendants “accepted Moncrief’s
personal jurisdiction                                      Moncrief’ s alleged trade secrets”).

                                      ﬁnd out whether EnerQuest ever came
The Court need not await discovery to find
The                                                                  came to Texas to obtain

these secrets or meet with their partners, as EnerQuest’s “[p]hysical presence in
                           their partners,                                     in the state
                                                                                      state is
                                                                                            is not


required” to
          to exercise jurisdiction.
                      jurisdiction. Moncrief, 414 SW3d at 152.
                                              414 S.W.3d  152. EnerQuest’s actions contributing


to
to the misappropriation of
                        of Antero’s trade secrets
                                          secrets in Texas, and EnerQuest’s admitted possession


                documents from
of trade secret documents from Texas, are sufficient
                                          sufﬁcient for personal jurisdiction
                                                                 jurisdiction to attach.

       B.         EnerQuest is Subject to Personal Jurisdiction Because
                  EnerQuest                                                Formed a Contract
                                                                Because it Formed
                                            Performed in Texas.
                       Texas Entities to be Performed
                  with Texas

       EnerQuest sought and received the beneﬁt
                                         benefit of Texas laws, purposefully forming a contract

with Texas entities with the intent that the contract be performed in Texas and engaging in

numerous communications with Texas residents, all of which
numerous                                                                                    of
                                                     which ultimately led to the disclosure of

Antero’s trade secrets.                             some or all of
               secrets. These contacts gave rise to some        of the claims at issue and subject

                                                          TEX.
EnerQuest to specific personal jurisdiction in Texas. See T     CIV.
                                                            EX. C     PRAC.
                                                                  IV. P      & RREM.
                                                                        RAC. &       CODE
                                                                                 EM. C ODE § 17.042.
                                                                                           § 17.042.


By                                                who would
By entering into the contract with Texas entities who would perform the contract in Texas,

                               itself of Texas’ laws and protections. See Max
EnerQuest purposefully availed itself                                     Max Protetch,
                                                                              Protetch, Inc.
                                                                                        Inc. v.
                                                                                             v.



        340 S.W.3d
Herrin, 340 S.W.3d 878, 887 (Tex. App. 2011)  (ﬁnding that a defendant purposefully availed itself
                                       201 l) (finding                                      itself


of Texas laws through forming a contract to be performed in Texas). The BMIII Agreement
                                                                    The BMIII Agreement

                            Ashbum, Texas residents, would
contemplated that Bauer and Ashburn,                 would largely perform the contract in

Texas, giving EnerQuest reason to anticipate being haled into court there. See Nagle & Black
                                                                               Nogle &

Aviation, Inc,
Aviation, Inc.,   290 S.W.3d 277, 283 (Tex. App.
                  290 S.W.3d                App. 2009) (finding
                                                       (ﬁnding personal jurisdiction, even though

the defendant did “not locat[e]                  ofﬁces in Texas and [did] not target[] the Texas
                       locat[e] any employees or offices


market,” because “it specifically                 work of
                     speciﬁcally chose to use the work of this Texas resident”). Moreover, even


                                                 9
if
if Bauer and Ashburn never performed under the contract,                               BMA, Bauer
                                               contract, the contract’s direction that BMA,


    Ashbum perform the contract in Texas gave EnerQuest sufficient
and Ashburn
and                                                                           harm might occur
                                                        sufﬁcient notice that harm

                        was a reasonable prospect of litigation there. Zac
in Texas and that there was                                                      & Co.,
                                                                       Zac Smith &      Inc. v.
                                                                                   C0,, Inc. v. Otis



Elevator Co., 734 S.W.2d      665-66 (Tex. 1987)
                  S.W.2d 662, 665–66                                           when a contract
                                                 (ﬁnding personal jurisdiction when
                                           1987) (finding

was
was to be performed in Texas, even though performance never occurred).

          EnerQuest’s formation of BMIII was
                                of BMIII was only the beginning of
                                                                of the contacts giving rise to the

        BMIII was
claims. BMIII
claims.       was an ongoing venture that imposed             on both parties to work
                                          imposed obligations on                 work together

                    The evidence already shows
under the contract. The                  shows that EnerQuest participated in communications

with its Texas business partner in furtherance of their working relationship and that Olson even

                    him Antero’s secret drilling schedule.27 These communications (which
asked Bauer to send him

                      show were
discovery will likely show                                 jurisdiction. See Max
                           were not isolated) give rise to jurisdiction.                   340
                                                                             Max Protetch, 340

S.W.3d at
S.W.3d at 887 (describing the defendants’
                              defendants’ regular communications with Texas plaintiff).
                                                                            plaintiff).


                                                                                       up to
EnerQuest also sent significant payments to its Texas partner and contemplated sending up

twenty million dollars to Texas (with the option to
                                                 to increase this
                                                             this amount “by additional $10,000,000


tranches”) in furtherance of this business relationship.
                                           relationship.”28
                                                            See Burger                        478
                                                                             471 U.S. at 468, 478
                                                                Burger King, 471

                                                                                         was
(forming an enterprise in one state to send payments to a corporation in the forum state was

sufﬁcient to confer specific
sufficient                   jurisdiction). Additionally, when
                    speciﬁc jurisdiction).                when EnerQuest sought to take over

management of
management of BMIII, it
                     it did so through repeated and directed correspondence with Texas



residents.”
residents. 29
              EnerQuest cannot credibly claim that it                                 when itit
                                                   it has insufficient Texas contacts when



                                                   by entering into a seven-year contract to be
                            of millions of dollars by
contemplated investing tens of

performed in Texas.


   27
        See Exhibit 3, Olson-Bauer Emails.
   23
   28
        BMlll Agreement
        BMIII Agreement §§ 4.5.
   29
                    1D to EnerQuest’s Special Appearance, Letter from Gregory Olson to
        See Exhibit 1D                                                              to BMI, dated August 9,
                                                                                                         9, 2017.


                                                       10
                                                       10
        The extent to which
        The           which EnerQuest representatives were physically present in Texas in the

       of this transaction remains to be
course of                             be discovered, but even if           had never set foot in
                                                              if EnerQuest had


                                                                  make itit amenable to jurisdiction
                                            of its Texas contacts make
Texas, the purposeful and continuous nature of

                   Supreme Court of Texas has “found jurisdiction over nonresidents with no
here. In fact, the Supreme

physical ties to Texas   when an out-of-state contract was formed ‘for
                         when                                     ‘for the sole purpose of building


        in Texas,’ Zac
a hotel in                   & Co.,
                   Zac Smith &      Inc. v.
                               Co., Inc.                  C0,, 734 S.W.2d
                                         v. Otis Elevator Co.,                 665—66 (Tex. 1987),
                                                                   S.W.2d 662, 665–66       1987),

and when                                    was executed in
    when enrollment for out-of-state school was          in Arizona but was ‘actively
                                                                            ‘actively and


successfully solicited’
             solicited’ in Texas, Siskind v. Villa Found.
                                          v. Villa Found. for
                                                          for Educ.,
                                                              Educ., Inc.,
                                                                     Inc., 642 S.W.2d 434, 437
                                                                           642 S.W.2d      437 (Tex.

                  414 S.W.3d
1982).” Moncrief, 414
1982).”               S.W.3d at 154.                                                        LLC
                                                                        by arguing that its LLC
                                154. EnerQuest cannot avoid this result by


agreement chose a law or forum            Texas.”
                         forum other than Texas. 30
                                                    “[E]ven
                                                    “[E]Ven in instances where            was
                                                                         where a contract was

                                         company with no
signed in another state, an out-of-state company                                          minimum
                                                      no physical ties to Texas still has minimum

                    when itit is clear the company
contacts with Texas when                   company purposefully directed its activities towards

                 278 S.W.3d
Texas.” Retamco, 278 S.W.3d at 340.

                             beneﬁts of
        EnerQuest sought the benefits                   By doing business with a Texas entity,
                                      of a Texas forum. By

                      proﬁt from work
EnerQuest intended to profit                    Ashburn performed in Texas. See Max
                                 work Bauer and Ashburn                         Max

              S.W.3d at 887 (finding
Protetch, 340 S.W.3d                                                                    would
                            (ﬁnding personal jurisdiction and noting that the defendant would

                                       customer). Antero’s misappropriation claim arises
receive a $65,000 payment from a Texas customer).                                 arises


directly                                                                        BMA, and
directly out of EnerQuest’s communications and connections with Bauer, Ashburn, BMA,


BMIII, providing a substantial connection between EnerQuest’s business contacts with Texas and

                    of the litigation.
the operative facts of                     Moki Mac
                           litigation. See Moki Mac River Expeditions v.            S.W.3d 569,
                                                                                221 S.W.3d
                                                                      v. Drugg, 221



576, 585 (Tex. 2007).




   3"
   30
      See Smart  Cull, LLC.
           Smart Call, L.L.C. v.                   S.W.3d 755, 766 (Tex. App.
                                 Genie Mobile, 349 S.W.3d
                              v. Genio                                                      Holdings, LLC
                                                                         App. 2011); Citrin Holdings, LLC v.
                                                                                                          v.

            SW3d 269, 285-86
Minnis, 305 S.W.3d      285-86 (Tex. App. 2009).


                                                    ll
                                                    11
           C.       EnerQuest is Subject to Personal Jurisdiction Because
                    EnerQuest                                     Because it Reached Out to Texas
                                                                             Reached Out    Texas
                       Furtherance of a Conspiracy.
                    in Furtherance

           The long-arrn statute grants jurisdiction over out-of-state defendants when
           The long-arm                                                           when their contacts

with Texas in furtherance
              ﬁirtherance of                                                     Nat ’l Indus.
                          of a conspiracy are sufficient to satisfy due process. Nat’l  Indus. Sand

Ass’n
Ass ’n v.             SW2d 769, 773 (Tex. 1995).
       v. Gibson, 897 S.W.2d                               BMIII Agreement
                                          1995). Here, the BMIII Agreement demonstrates

Ashburn and Bauer acted in service of
Ashburn                            of BMIII when they acquired and maintained information (in
                                      BMIII when

Texas) intended to justify
                   justify EnerQuest’s investment in
                                                  in West Virginia properties.“
                                                                   properties. 31 EnerQuest

                                                   Ashbum and Bauer to send EnerQuest
speciﬁcally contracted for this service, requiring Ashburn
specifically

                            West Virginia minerals. In addition to soliciting the information,
information relating to the West

                           knew or should have known
                   what it knew
EnerQuest accepted what                        known were
                                                     were trade secrets and maintained those

                                        of alerting Antero to the disclosure.
trade secrets in its possession instead of                        disclosure.”32



           On the basis of that information, EnerQuest paid substantial
           On                                                           sums to Texas to acquire the
                                                            substantial sums


                               Such payments support personal jurisdiction.
ill-gotten property interests. Such                           jurisdiction. Bissbort v. Wright
                                                                                     v. Wright



         & Pub.
Printing & Pub. Co., 801
                     801 S.W.2d 588, 589 (Tex. App. 1990)
                                                    1990) (finding
                                                          (ﬁnding that,
                                                                   that, through “the act
                                                                                      act of
                                                                                          of

               sum of money
wiring a large sum    money to a Texas bank, Wright
                                             Wright has availed itself of
                                                                       of the protection and

remedies of
         of Texas law and Texas courts”).
                                courts”) EnerQuest’s purposeful and sustained contacts with

                     of the conspiracy at issue are sufficient to grant personal jurisdiction
Texas in furtherance of                                                          jurisdiction over

EnerQuest. See Henkel v. Emjo Investments,
                      v. Emjo                    480 S.W.3d
                              Investments, Ltd., 480 S.W.3d 1,                    (ﬁnding
                                                            l, 7 (Tex. App. 2015) (finding


                                                            commit fraud, even though the non-
personal jurisdiction over a non-resident for conspiracy to commit                        non-

                                            made misrepresentations).
         was not alleged to have personally made
resident was




    31
    31
         BMlll Agreement
         BMIII Agreement §§ 4.1.
    32
         See Cox Letter (admitting to
                                   to possession of
                                                 of Antero’s trade secret documents for at
                                                                                        at least
                                                                                           least one year).
                                                                                                     year).


                                                           12
                                                           12
          D.                           Over EnerQuest
                 Personal Jurisdiction Over           Comports with Notions of Fair Play
                                            EnerQuest Comports
                 and Substantial Justice.
                 and

          Finally, exercising jurisdiction                                                  of fair
                              jurisdiction over EnerQuest comports with traditional notions of

     and substantial justice.
play and             justice.     EnerQuest is
                                            is not burdened by jurisdiction here;
                                                            by jurisdiction here; EnerQuest’s


Oklahoma City headquarters is nearer to this Court than EnerQuest is to some
Oklahoma                                                                some destinations in its

own home
own home state, and nearer to this Court than Houston
                                              Houston is. Moreover, EnerQuest also has

           and oil and
businesses and     and gas operations in Texas. Second, Texas has a strong interest in adjudicating

the dispute as the major players in the misappropriation did so in Texas, using funding from

             make use of Antero’s trade secrets.
EnerQuest to make                       secrets. Third, adjudicating the dispute in
                                                                                 in Texas would


be                and convenient given that all witnesses are located a short drive from
be both effective and                                                               from Tarrant

                                     efﬁcient and convenient location for the remainder of the
County. Fourth, Tarrant County is an efficient

parties   and witnesses. Spir Star AG
                                   AG v.         310 S.W.3d
                                      v. Kimich, 310 S.W.3d 868, 878 (Tex. 2010); Moncrief,  414
                                                                                  Moncrie/’, 414

S.W.3d at 155.
S.W.3d         On balance, requiring EnerQuest to litigate in Texas would
          155. On                                                   would not offend traditional

        of fair play and substantial justice, and personal jurisdiction is proper.
notions of                                                                 proper.

IV.                       ANTERO SEEKS
          ALTERNATIVELY, ANTERO
          ALTERNATIVELY,                 A CONTINUANCE
                                   SEEKS A CONTINUANCE TO CONDUCT
                                                       TO CONDUCT
          PERSONAL JURISDICTION DISCOVERY.
          PERSONAL JURISDICTION DISCOVERY.

          Under Rule 120a(3)
          Under              ofthe
                     l20a(3) of the Texas Rules of Civil Procedure, if the party opposing a special

appearance cannot “present by
                           by affidavit facts
                                        facts essential to justify his
                                                        to justify                           may order
                                                                   his opposition, the court may


a continuance to permit affidavits to be
                                      be obtained or depositions to be taken or discovery to be had

or may make such other order as
   may make                  as is just.” T
                                is just.” TEX.    CIV.
                                           EX. R. C                 When the movant
                                                           120a(3). When
                                                    IV. P. 120a(3).          movant seeks a

continuance so it may obtain testimony, “the party applying therefor shall
               it may                                                shall make affidavit
                                                                                afﬁdavit that
                                                                                          that such


                       showing the materiality thereof, and that he has used due diligence to procure
testimony is material, showing

                                                                    known . . . .”
such testimony, stating such diligence, and the cause of failure if known    .   . TEX.
                                                                                .” T        CIV.
                                                                                     EX. R. C
                                                                                     .        IV. P. 252.

The Court has discretion to permit discovery on
The                                                                   BMC Software Belgium,
                                             on a special appearance. BMC          Belgium,



                                                   13
                                                   13
N.
N.V.  v. Marchand,
   V. v.              S.W.3d 789, 800 (Tex. 2002); Barron
         Marchand, 83 S.W.3d                       Barron v. Vanier, 190
                                                          v. Vanier,     S.W.3d 841, 847 (Tex.
                                                                     190 S.W.3d

App—Fort Worth
App—Fort Worth 2006, no
                     no pet.).
                        pet.).

                                                    what the evidence already suggests:
          Antero has requested discovery to confirm what                      suggests: EnerQuest

received or used trade secrets misappropriated by                              from other Texas
                                               by Texas residents and entities from

                                            hand shows
          and entities. Evidence already in hand
residents and                                    shows that EnerQuest deputized Texans
                                                                                Texans to get

                       West Virginia minerals and to send that information to EnerQuest so that
information related to West

                       on the basis of
EnerQuest could invest on           of it. Though EnerQuest has not described what
                                       it. Though                             what information

                                              BMIII acquired, it admits having received Antero’s
                            of the properties BMIII
it received relating to any of

                                                 them for at least one year.
misappropriated documents from Texas and holding them                  year.”33
                                                                                EnerQuest does

                                Ashbum had misappropriated information in Texas about
         knowing that Bauer and Ashburn
not deny knowing

           BMIII acquired, and EnerQuest does not deny that Bauer
properties BMIII                                                      Ashburn represented they
                                                            Bauer and Ashburn

                                                                 knowing that the certain trade
had access to misappropriated information; EnerQuest denies only knowing

secret documents in
                 in EnerQuest’s possession were obtained by          means.”
                                                         by unlawful means.
                                                                            34
                                                                               However,

                       TUTSA isis defined
misappropriation under TUTSA      deﬁned as “acquisition of
                                                         of a trade secret of
                                                                           of another by
                                                                                      by a person

who knows
who                        know that
    knows or has reason to know that the trade secret was acquired by
                                                                   by improper means.” T
                                                                                       TEX.
                                                                                        EX.

CIV.
C     PRAC.
  IV. P      & RREM.
        RAC. &       CODE
                 EM. C ODE §
                           § 134A.002(3). The supposed limit on what
                             l34A.002(3). The                                  knew is not
                                                                what EnerQuest knew

relevant to the jurisdictional
                jurisdictional dispute and should not be a basis on which to deny discovery.
                                                                 on which         discovery.

                                 knows that EnerQuest obtained some
          In short, while Antero knows                         some of its trade secrets from Texas,

                know the full extent of
Antero does not know                                                              how long itit lasted,
                                                               when itit started, how
                                     of this misappropriation, when

    how EnerQuest proﬁted
and how                    from it.
                  profited from it. Antero also does not yet have full visibility on the locations




    means by
and means by which                                          meetings—was communicated
             which its information—calls, emails, in-person meetings—was communicated to



   33
            Cox Letter.
        See Cox
   34
   34
              Affld. ﬂl
        Olson Affid. ¶ 13.
                        13.


                                                  14
                                                  14
EnerQuest. Antero therefore cannot provide the Court with the complete litany
                                                                       litany of
                                                                              of EnerQuest’s

                     which deprives Antero of
contacts with Texas, which                 of the ability to adequately prepare for the special

                                                                      on these issues is likely
appearance hearing without further discovery. Testimony and discovery on

                                                       of EnerQuest’s personal jurisdiction
to generate evidence material to determining the issue of                      jurisdiction and

          permitted. See Lamar
should be permitted.     Lamar v.             S.W.3d 130,
                               v. Poncon, 305 S.W.3d      139-40 (Tex.App.-Houston [1st
                                                     130, 139–40                   [lst


                                         v. Maria
Dist.] 2009, pet. denied); see also Said v.       Investments, Inc., No.
                                            Maria Investments,           0l—08—00962—CV, 2010
                                                                     No. 01–08–00962–CV, 2010

WL 457463, at *3
WL            *3 (Tex. App.–Houston
                       App.—Houston [1st Dist] Feb. 11
                                    [lst Dist.]              no pet.) (mem. op.) (observing
                                                    11 2010, no


that “Rule 120a(3)
that       l20a(3) gives the trial
                             trial court the discretion to continue a special appearance hearing and
                                                                                                 and

                                          may be served”).
                           which evidence may
thereby extend the time in which

        Antero diligently sought this needed information as quickly as possible, serving its

                                                                     ﬁled its Special Appearance
discovery requests (attached as Exhibit 4) only days after EnerQuest filed            Appearance

on April 18.
on       18. Rather than responding to reasonable jurisdictional
                                                  jurisdictional discovery, EnerQuest noticed its

special appearance for a hearing in an attempt to insure Antero does not obtain full discovery on

EnerQuest’s contacts and knowledge, which
                                    which cannot be procured from another source. Antero is

                                                        on this jurisdictional
therefore entitled to a continuance to obtain discovery on                                         321
                                                                jurisdictional issue. In re Stern, 321

S.W.3d 828, 839 (Tex. App. 2010) (“The trial       may permit a continuance so that
                                       trial court may                         that the opposing


party may obtain the necessary jurisdictional
party may                      jurisdictional discovery.”).
                                              discovery”).

V.                 AND PRAYER
        CONCLUSION AND
        CONCLUSION     PRAYER
        Intervenor
        lntervenor Antero Resources Corporation requests that
                                                         that the Court overrule EnerQuest’s


special appearance, or alternatively, continue the hearing on same until jurisdictional
                                                           on same       jurisdictional discovery

can be obtained, and grant Antero such additional and further relief    which it
                                                              relief to which    may show
                                                                              it may show itself

entitled.




                                                 l5
                                                 15
Respectfully submitted,

STEPTOE
S        & JJOHNSON
  TEPTOE &          PLLC
             OHNSON PLLC

By:     /s/Jason
        /s/ Jason R.
                  R. Grill
       Jason R. Grill
                       24002185
              Bar No. 24002185
       State Bar
       j ason. gri1l@steptoe—johnson.com
       jason.grill@steptoe-johnson.com
       W. Henry Lawrence
       W.          Lawrence
       WV
       WV State Bar No.    2156
                       No. 2156
                Woodloch Forest Drive, Suite 300
        10001 Woodloch
       10001
       The Woodlands, Texas 77380
       The                      77380
       281.203.5700
       281.203.5701 (facsimile)
       281.203.5701

VINSON
V      & EELKINS
 INSON &         LLP
           LKINS LLP

By:     /s/         B. Dye
        /s/ Phillip B. Dye
                   Dye, Jr.
       Phillip B. Dye,
       State Bar No.   06311500
                  No. 06311500
       pdye@Velaw.com
       pdye@velaw.com
       Jason M.M. Powers
                  Powers
       State Bar No.   24007867
                  No. 24007867
       jpowers@Velaw.c0m
       jpowers@velaw.com
       Caroline C. Stewart
       State Bar No.   24098477
                  No. 24098477
       cstewart@Velaw.com
       cstewart@velaw.com
                                 2500
       1001 Fannin Street, Suite 2500
       1001
       Houston, TXTX 77002-6760
                       77002-6760
       713.758.2222
       713.758.2346 (facsimile)

ATTORNEYS
A         FOR IINTERVENOR
 TTORNEYS FOR   NTERVENOR




  16
  16
                             CERTIFICATE OF
                             CERTIFICATE    CONFERENCE
                                         OF CONFERENCE
                                 May 11 and May
                              on May
        I hereby certify that on            May 2, 2018, I conferred by
                                                                     by telephone and e-mail with
Spencer Smith, counsel for EnerQuest, regarding the merits of   of Antero’s alternative motion to to
continue the hearing on EnerQuest’s special appearance. A   A reasonable effort
                                                                           effort has been made to
resolve the motion to continue without the necessity of court intervention and the effort failed, as
EnerQuest would not agree to Antero’s request. Therefore, this
                                                             this dispute is
                                                                          is presented to
                                                                                       to the Court
    determination.
for determination.

                                               /s/Jason M.
                                              _/s/Jason    Powers
                                                        M. Powers_________________
                                                      M. Powers
                                                Jason M. Powers
                                CERTIFICATE OF SERVICE
                                CERTIFICATE OF SERVICE
                                                 copy of
        I hereby certify that a true and correct copy                   document has been forwarded
                                                      of the foregoing document
                      below via E-service
to all parties listed below     E—service and/or via facsimile, on          2nd day of
                                                                on this the 2nd        May, 2018:
                                                                                    of May,

 Via E-Service: ghamm@hammﬂrm.c-am
 Via             ghamm@hammfirm.com                 Via             apenningt0n@phl1law.c0m
                                                    Via E-Service: apennington@phblaw.com
 Gene     Hamm, II
 Gene A. Hamm,     11                               H. Allen Pennington, Jr.
     Hamm Firm
 The Hamm
 The         Firm                                   Matthew      Germany
                                                    Matthew D. Germany
      W. McDermott,
 1333 W.
 1333                         200
          McDerrnott, Suite 200                                       LLP
                                                    Pennington Hill, LLP
               75013
 Allen, Texas 75013                                 Tindall Square —– Warehouse
                                                                      Warehouse No.
                                                                                No. 3
 Attorney for Plaintiff, Penn
 Attorneyfor             Penn                                               101
                                                    509 Pecan Street, Suite 101
             Funds, LLC
 Investment Funds,         and New
                       LLC and  New Defendants      Fort Worth, Texas
 Venture         II, LLC
 Venture Strong II,   LLC and     F Penn
                          and Joe F..Penn Jr.
                                          Jr.                   for Defendants John
                                                    Attorneys for                 John Bradley
                                                    Ashburn
                                                    Ashburn and      New Defendant Post Oak
                                                               and New                    Oak
                                                    Appalachia, LLC
                                                    Appalachia,  LLC
 Via E-Service:
 Via                                                Via E-Service:
                                                    Via E-Service: avery@averymcdaniel.com
 mhassett@tarrantbusinesslaw.com
 mhassett@tarrantbusinesslaw.com                           McDaniel
                                                    Avery McDaniel
 Michael Hassett                                    Law Office
                                                    Law  Ofﬁce of         McDaniel
                                                                   Avery McDaniel
                                                                of Avery
                 PC
 Jones Hassett, PC                                           Main Street
                                                    1205 N. Main
                                                    1205
 440 North Center
 440                                                                    76164
                                                    Fort Worth, Texas 76164
                    7601 1
 Arlington, Texas 76011                             Attorney for                  II, LLC
                                                             for Braxton Minerals II, LLC
 Attorney for                             Fisher,
             for Defendants Michael Fisher,
 Maegan
 Maegan Fisher and   M&M
                  and M&M Consulting
 Via E-Service: Scott@braxtonenergy.
 Via              Scott@braxtonenergy.comcom        Via E-Service:
                                                    Via             awoodward@hrepc.com
                                                        E-Service: awoodward@hrepc.com
 R. Scott Bauer                                     C. Andrew  Woodward
                                                       Andrew Woodward
       Camp Bowie
 8851 Camp
 8851          Bowie Boulevard WW                   Holman Robertson Eldridge
                                                    Holman
       200
 Suite 200                                          8226 Douglas Ave.,
                                                    8226                       550
                                                                   AVe., Suite 550
                      76116
 Fort Worth, Texas 76116                                          75225
                                                    Dallas, Texas 75225
 Attorney forfor Braxton Acquisitions,
                             Acquisitions, LLC,‘
                                            LLC;    Attorney for       0 ’Connor
                                                             for Kelly O’Connor
                   LLC and
          Energy, LLC
 Braxton Energy,        and R.        Bauer
                             R. Scott Bauer
 Via              r0landjohnson@hfblaw.c0m
 Via E-Service: rolandjohnson@hfblaw.com            Via E-Service: j0e.c0x@bracewell.c0m
                                                    Via              joe.cox@bracewell.com
 Roland K. Johnson
 Roland                                             Joseph M.   Cox and Andrea
                                                            M. Cox        Andrea D. Broyles
 Harris, Finley && Bogle, PC
                           PC                       1445 Ross Avenue, Suite 3800
                                                    1445                        3800
     Main Street, Suite 1800
 777 Main                 1800                                      75202
                                                    Dallas, Texas 75202
                     76102
 Fort Worth, Texas 76102                            Spencer F. Smith
           for Energy Corporation of
 Attorney for                       ofAmerica
                                       America      McAfee &
                                                    McAfee   & Taft
                                                    21 1 N.
                                                    211     Robinson Ave.
                                                         N. Robinson
                                                    Oklahoma City, Oklahoma
                                                    Oklahoma          Oklahoma 73102.
                                                    Attorneys for
                                                                for EnerQuest Oil &  & Gas,
                                                                                       Gas, L.L.C.
                                                                                            L.L.C.
                                                    and                     III, LLC
                                                    and Braxton Minerals III,    LLC
 Via E-Service: jnt@turnerandallen.com
 Via E—Service.' jnt@turnerandallen.com             Via
                                                    Via  E-Service:  cd@peebleslaw.com
 Jess N. Turner, III                                C.D. Peebles
 Turner && Allen, P.C.                              The           Law Firm
                                                    The Peebles Law    Firm
      Box 930
 P.O. Box                                                 Devon Court
                                                    1604 Devon
                                                    1604
                 76450
 Graham, Texas 76450                                Southlake, TXTX 76092
                                                                     76092
 Attorney for        Energy, LLC
          for Turn 2 Energy, LLC                              for Austin Fox
                                                    Attorney for         Fox
Via E
Via             brad@p0st0akr0yalty.c0m
      -Service: brad@postoakroyalty.com
    E-Service:
     Ashbum
Brad Ashburn
Brad
100 N. Forest Park Blvd.,
100                             201
                   BlVd., Suite 201
                   76102
Fort Worth, Texas 76102
          for Braxton Minerals-Appalachia,
Attorney for            Minerals-Appalachia,
LLC
LLC

                                         _/s/
                                          /s/ Caroline C. Stewart
                                                       C. Stewart_________________
                                           CAROLINE
                                           C AROLINE C. SSTEWART
                                                          TEWART
                                       CAUSE NO.       141-290089-17


PENN INVESTMENT FUNDS, LLC,                     §         IN   THE DISTRICT COURT OF
                          Plaintiff             §
                                                §
ANTERO RESOURCES CORPORATION,                   §
                          Intervenor            §
                                                 §
VS.                                              52‘




                                                 §
BRAXTON ENERGY, LLC,                             §
BRAXTON ACQUISITIONS, LLC,                       §
BRAXTON MINERALS II, LLC,                        §
ROBERT SCOTT BAUER, JOHN                         §
BRADLEY ASHBURN, MICHAEL                         §
FISHER,    MAEGEN FISHER AND                     §
M&M CONSULTING,                                  §
                                                 §
                  Original Defendants            §         141st     JUDICIAL DISTRICT
                                                 §
                                                 §
AUSTIN FOX, JOE F. PENN JR.,                     §
BRAXTON MINERALS III, VENTURE                     §
STRONG II LLC, POST OAK                           §
APPALACHIA LLC, TURN 2 ENERGY                     §
LLC, BRAXTON—MINERALS                             §
APPALACHIA LLC, AND ENERGY                        §
CORPORATION OF AMERICA,                           §
ENERQUEST OIL & GAS, L.L.C.,                      §
                                                  §
                  New Defendants.                 §        TARRANT COUNTY, TEXAS

                                 AFFIDAVIT AND VERIFICATION
STATE OF TEXAS                    §


COUNTY OF HARRIS                  E


         BEFORE ME, the undersigned         authority,   on   this   day personally appeared Jason R.   Grill


who,   after   being duly sworn upon his oath, stated as follows:
Exhibit 1
                                              BRACEWELL

       April 26, 2018




       Jason Grill
       Steptoe & Johnson
       10001 Woodloch Forest Drive, Suite 300
       The Woodlands, Texas 77380

       Re:      Cause No. 141-290089-17; Penn Investment Funds, LLC v. Braxton Energy, LLC et al; in the 141'
                Judicial District Court of Tarrant County, Texas
       Dear Jason:
       Pursuant to the Rule 11 Agreement entered into on April 17, 2018 between counsel for Antero Resources
       Corporation ("Antero") and counsel for EnerQuest Oil and Gas, LLC ("EnerQuest") and Braxton Minerals
       Ill, LLC ("BMW"), EnerQuest and BMW are required to provide notice of any Trade Secret Documents of
       Antero in their possession and provide copies of any such Trade Secret Documents to Antero's counsel.
       By email on March 5, 2018, EnerQuest's counsel provided a copy of all of the Trade Secret Documents of
       Antero in its possession (including as manager of BMW) to you and Hank Lawrence, through two zip files
       and a ShareFile link. A copy of the March 5, 2018 email is attached hereto. All of the information included
       in that email was received by EnerQuest and/or BMW during or after February 2017 from Scott Bauer.
       The March 5, 2018 email includes all the Trade Secret Documents of Antero in the possession of EnerQuest
       or BMW, and no additional Trade Secret Documents have come into their possession since March 5, 2018.
       While EnerQuest and BMW have provided all of the Trade Secret Documents in their possession,
       EnerQuest and BMW have no knowledge or control over what Scott Bauer, Brad Ashburn, or their entity,
       Braxton Minerals-Appalachia, LLC, have in their possession.
       The only EnerQuest employees that have viewed the Trade Secret Documents are Greg Olson and Matt
       Mollman, each of whom made only a cursory review of the information and did not use the Trade Secret
       Documents to make any business decisions. The Trade Secret Documents have not been shared with any
       person or entity other than: (1) EnerQuest and BMW's attorneys in the above-referenced litigation, (2)
       Scott Bauer, and (3) Brad Ashburn, pursuant to a subpoena issued by Ashburn's counsel prior to the
       involvement of EnerQuest or BMIll in the above-referenced litigation.




       Joseph M. Cox            T: +1.214.758.1077       F: +1.800.404.3970
       Partner                  1445 Ross Avenue, Suite 3800, Dallas, Texas 75202-2724
                                joe.cox@bracewell.com         bracewell.com



AUSTIN #5%ltrtEI-.3TICUT   DALLAS   DUBAI      HOUSTON         LONDON       NEW YORK     SAN ANTONIO   SEATTLE   WASHINGTON, DC
                                             BRACEWELL
       Jason Grill
       April 26, 2018
       Page 2


       Please let me know if you have any questions or would like to discuss any of the information contained in
       this letter.


       Very tr y yours,



       Josep. M. Cox
       Part



       Enclosure




AUSTIN # 5 %1   E7C3TICUT   DALLAS   DUBAI   HOUSTON   LONDON     NEW YORK    SAN ANTONIO    SEATTLE    WASHINGTON, DC
                                        BRACEWELL
     Jason Grill
     April 26, 2018
     Page 3


     Cc:
      H. Allen Pennington, Jr.                           Phillip B. Dye, Jr.
      Matthew D. Germany                                 Jason M. Powers
      Pennington Hill, LLP                               Caroline C. Stewart
      Tindall Square-Warehouse No. 3                     Vinson & Elkins LLP
      509 Pecan Street, Suite 101                        1001 Fannin Street, Suite 2500
      Fort Worth, Texas 76102                            Houston, Texas 77002-6760
      apennington@phblaw.com                             pdye@velaw.com
      Attorneys for Defendant John Bradley Ashburn       jpowers@velaw.com
      and Post Oak Appalachia, LLC                       cstewart@velaw.com
                                                         Attorneys for Intervenor Antero Resources
                                                         Corporation
      Gene A. Hamm, II                                   Roland K. Johnson
      The Hamm Firm                                      Harris, Finley & Bogle, P.C.
      1333 W. McDermott, Suite 200                       777 Main Street, Suite 1800
      Allen, Texas 75013                                 Fort Worth, Texas 76102
      ghamm@hammfirm.com                                 rolandjohnson@hfblaw.com
      Attorney for Plaintiff Penn Investment Funds,      Attorneys for Energy Corporation of America
      LLC, Joe F. Penn Jr., and Venture Strong II, LLC
      Michael Hassett                                    Avery McDaniel
      Jones Hasset, PC                                   Law Office of Avery McDaniel
      440 North Center                                   1205 N. Main Street
      Arlington, Texas 76011                             Fort Worth, Texas 76164
      mhasset@tarrantbusinesslaw.com                     avery@avrymcdaniel.conn
      Attorney for Defendants Michael Fisher, Maegan     Attorney for Braxton Minerals II, LLC
      Fisher, and M&M Consulting
      R. Scott Bauer                                     C. Andrew Woodward
      8851 Camp Bowie Boulevard W                        Holman Robertson Eldridge
      Suite 200                                          8226 Douglas Ave., Suite 550
      Fort Worth, Texas                                  Dallas, Texas 75225
      scott@braxtonenergy.com                            awoodward@hrepc.com
      Attorney for Braxton Acquisitions, LLC, Braxton    Attorney for Kelly O'Connor
      Energy LLC, and himself
      Charles W. Sartain
      Gray Reed & McGraw
      1601 Elm Street, Suite 4600
      Dallas, Texas 75201
      Attorneys for Global Oil and Gas Fields




AUSTIN #56gypSTICUT   DALLAS   DUBAI.   HOUSTON    LONDON     NEW YORK    SAN ANTONIO    SEATTLE   WASHINGTON, DC
Attachments:      Emails.zia
                  Text.zip
                  Attachments.html




From: Black, Jeremy
Sent: Monday, March 05, 2018 2:59 PM
To: 'Hank Lawrence'
Cc: Jason Grill
Subject: RE: Braxton - letter to Jeremy Black (2/23/18)

Hank,

In response to Antero's letter dated 2/23/18, EnerQuest has reviewed the materials in its possession
or control including (1) various correspondence (email and texts messages) and (2) paper files
EnerQuest received upon taking over the management of BMII I from Braxton Minerals-Appalachia,
LLC ("BMA"). The focus of EnerQuest's review was to determine whether any of Antero's
confidential and proprietary business records and trade secret information was shared with
EnerQuest. Included with this email are the following materials:

    1. A zip file containing six (6) emails involving Scott Bauer which reference and/or include a
       Critical Date Report and/or drilling schedule.
    2. A zip file containing a text message exchange between Scott Bauer and Greg Olson w/
       EnerQuest that includes a screen shot of a drill schedule.
    3. A ShareFile link whereby certain additional information that was sent by Scott Bauer to Greg
       Olson w/ EnerQuest via Dropbox. These are being shared via ShareFile due to the size of the
         files.
It is EnerQuest's belief that all of the information included in this email was received by EnerQuest in
February 2017 (or later) and this information was shared by Scott Bauer in conjunction with Scott
Bauer's attempt to have EnerQuest commit additional funds to his mineral acquisition program. As
background, BMIII is the only mineral acquisition venture sponsored by Scott Bauer or Brad Ashburn
(or any of their affiliated entities) in which EnerQuest has participated. BMIII acquired all of its
minerals between November 2015 and April 2016, almost a year before any of the materials
referenced in this email were provided by Scott Bauer to EnerQuest. EnerQuest has not shared this
information with any party other than Scott Bauer and Brad Ashburn.

Please let me know if you have any questions about or otherwise would like to discuss anything
included in this response.

Regards,
Jeremy


  ShareFile Attachments
  Title                                                                                          Size

  EQ Response to Antero Letter Dated 2-23-18                                                     589.8 MB

                                       Jeremy Black uses ShareFile to share documents securely. Learn More.
Exhibit 2
                                                                 1


 1                        REPORTER'S RECORD

 2                           VOLUME 1 OF 1

 3                    Cause No. 141-290089-17

 4 PENN INVESTMENT FUNDS,            X IN THE DISTRICT COURT
   LLC,                              X
 5           Plaintiff,              X
   ANTERO RESOURCES                  X
 6 CORPORATION,                      X
             Intervenor              X
 7                                   X
   VS.                               X 141ST JUDICIAL DISTRICT
 8                                   X
   BRAXTON ENERGY, LLC,              X
 9 BRAXTON ACQUISITIONS,             X
   LLC, BRAXTON MINERALS             X
10 II, LLC, ROBERT SCOTT             X
   BAUER, JOHN BRADLEY               X
11 ASHBURN, MICHAEL                  X
   FISHER, MAEGEN FISHER,            X
12 M&M CONSULTING and                X
   KELLY O'CONNOR                    X
13           Defendants.             X TARRANT COUNTY, TEXAS

14

15                  *-*-*-*-*-*-*-*-*-*-*-*-*-*

16                 TEMPORARY INJUNCTION HEARING

17                  *-*-*-*-*-*-*-*-*-*-*-*-*-*

18

19      BE IT REMEMBERED that on the 14th day of June,

20 2017, the following proceedings came on to be heard in

21 the above-entitled and -numbered cause before the

22 Honorable John P. Chupp, judge presiding, held in Fort

23 Worth, Tarrant County, Texas.

24      The proceedings were reported by machine

25 shorthand.



                               Tina Fett, CSR
                Official Court Reporter 141st District Court
                                                                  36


 1 defected acreage on the Southwestern acquisition that

 2 was defected b-c, assume that's because, leases

 3 expired; is that correct?

 4      A.     It does say that, yes.

 5      Q.     Is that correct, did Kelly O'Connor give

 6 you the Southwestern defect report?

 7      A.     I generated it prior.        No, I didn't have

 8 it -- I mean, I generated it on my own, but I wanted

 9 to -- I'll say I overstepped my bounds and wanted to

10 make sure Joe was comfortable with the investment.

11      Q.     So is it your testimony, sir, that Kelly

12 O'Connor did not give you the Southwestern defect

13 report?

14      A.     Yes, sir.

15      Q.     So the statement in this email to Mr. Penn

16 is false, the statement in the second sentence?

17      A.     Yes, sir.     Mr. Penn had become very

18 difficult at this point.      I was working for free, he

19 gave me a release, supposedly, from this case.

20                  MR. HAMM:     Objection.     Nonresponsive.

21                  THE COURT:     Sustained.

22      Q.     (By Mr. Lawrence)       Why did you tell

23 Mr. Penn that Kelly O'Connor gave you the Southwestern

24 defect report?

25      A.     He was looking to invest other money in the



                            Tina Fett, CSR
             Official Court Reporter 141st District Court
                                                                  37


 1 deal.        I was making him money on deals, and then I

 2 wanted to keep it rolling, and so I overstepped my

 3 bounds.

 4         Q.       I'll put up a text that was identified as

 5 Penn 153 --

 6         A.       Yes, sir.

 7         Q.       -- it's part of a text messages that you

 8 sent to Mr. Penn.         Have you reviewed the documents

 9 that were produced by Penn Investment in discovery?

10         A.       Yes, sir, most of them.

11         Q.       So the email that I just showed you,

12 Exhibit 8, you are familiar with?

13         A.       Yes, I knew this was coming -- or, yes, I

14 knew the stuff that was put in these messages were not

15 flattering in any way and looked different than they

16 are.

17         Q.       Did you find this email on your server or

18 on any of your computers when you searched for

19 documents responsive to the subpoena duces tecum?

20         A.       No, I couldn't find any of my emails as we

21 did the pull back.

22         Q.       I'm sorry, let me clarify the question.

23                      Not whether you found any, did you

24 perform a search for emails on your computers and

25 server such as this email, Exhibit 8?



                                  Tina Fett, CSR
                   Official Court Reporter 141st District Court
Exhibit 3
From:                           Scott Bauer <Scott@braxtonenergy.com>
Sent:                           Thursday, February 16, 2017 6:57 PM
To:                             Greg Olson
Subject:                        Re: WV aoi maps



Hey Greg,

I can send the drill schedule, but as of now, the dates on when mineral owners get paid is not something listed,
the date of expected first production is, but we have in our order for payment, if a royalty check is received
during our due diligence period, we don't close. We keep track of when checks are going out and I have a
contact now that will let me know if a unit is in pay status. Jacob was asking me about the map today, He said
should I take out what is in pay, I told him no bc you really want to see the area as whole, but we won't pay for
anything that is in pay status and I confirm every acre before we buy with my contact at Antero. She keeps me
up to date if a division order is about to be mailed and what goes into pay status to the mineral owner. I don't
keep the drill schedule digital, I keep it on my person at all times, bc its one of my prize possessions. I don't
have a scanner here that will feed that size paper, but I'll get it done tonight.

Our deeds are clear on first production and Antero actually has instructed the division order department to star
every Braxton deed and interest bc they know of our unique language. They actually complimented us on
it. We've had two issues ever that have arisen, each where easy to handle, the deed was filed in between the last
revision to interests and checks being cut, and that was when Brad filed some deeds later than the effective date,
just didn't get them in for some reason, but in both instances, the landowners quickly returned the checks to
Antero and Antero re-issued us checks. That won't happen with our filing system. I have a law firm that I have
referred a lot of business to that has made their runners at my disposal. They have four offices, so I can have
deeds filed same day every time, and I'm not waiting for a mailed deed, I am taking the deed in person. But
before a single dollar exchanges, I will have confirmation from Antero, they give me weekly updates on what
division orders are going out and what is going into pay. But they don't know the date that they are going to get
cleared for pay until maybe two weeks out, but we know its usually 30 days from the division orders, so we stay
just ahead of those so the division order comes to us. But as important, I make it part of an order for payment
that they sign and I sign, that we are entitled to those royalties. But simple answer, I stay ahead of division
orders and if they are sent, I confirm the hell out of the pay status. I won't miss on that, that is one thing I am
very clear on makes the economics. So this is something I don't take chances on and will loop you in if the DO
has been sent out. But we know who is getting paid and who isn't and keep a running list of every unit and have
them prioritized based on dates as well. We keep track in about three different list that we cross reference, but
most importantly we have it contracted and have updates from Antero. They can tell you as detailed of info as I
had on the critical well status sheet, but they can't tell you that far out when they will pay. Kelly, the President
of TEXHOMA said Antero wants them to be down to 6 months by the end of the year, Kelly said he needs
more guys to reach that level consistently.

Scott Bauer, CEO
Braxton Energy, LLC
(817) 698-0020 office
(817) 905-7268 cell
scott@braxtonenergy.com

On Feb 16, 2017, at 5:42 PM, Greg Olson <G.Olson@enerquest.net> wrote:

                                                         1
Scott, could you send me the drill schedule? I’d like to see how the AOI wells are
scheduled. Also, if a well has been drilled, how do we get comfortable with the
notion that we’ll get paid back to date of first production. I’m putting the final
touches on a proposed letter of intent but would like to address the matters before
sending to you.

Gregory W. Olson
President
EnerQuest Oil & Gas, LLC
12368 Market Drive
Oklahoma City, OK 73114
(405) 478-3300 ext. 101

From: Matt Mollman
Sent: Thursday, February 16, 2017 2:19 PM
To: Greg Olson <G.Olson@enerquest.net>
Cc: Aaron Ivey <A.Ivey@enerquest.net>
Subject: FW: WV aoi maps

Greg,

Attached is a quick base map I put together using the information Jacob sent today. Please note the
following:

   1) The oil and gas well symbols are limited to active producing wells.
   2) If the wellbore stick is straight it is just a permit or a well that has no directional data filed with
        the State.
   3) If the wellbore stick is curved the well has been drilled and directional data is on file with the
        State.
   4) If the wellbore stick does not have a gas well symbol at the end of it then the well was not an
        active producing well at the end of 2015.

Matt

From: Jacob Patrylick [mailto:Jacob.Patrylick@braxtonenergy.com]
Sent: Thursday, February 16, 2017 11:32 AM
To: Matt Mollman <M.Mollman@enerquest.net>; Scott Bauer <Scott@braxtonenergy.com>; Greg Olson
<G.Olson@enerquest.net>
Subject: Re: WV aoi maps


Matt,



To start, here are two shapes and a map. First are the units you request and second is a rough
outline of the AOI we would like to present because not all of the unit declarations have been
filed with the county. There are a few other company priority units based on drill dates. We are
starting withe the Monroe as first focus area and the other sent are ares will be hitting very
soon. https://www.dropbox.com/s/ksjyxk128u3xett/WV_Braxton_43x70_Enerquest_AOI_map
.pdf?dl=0
                                                      2
                                                                                                                                                        WV_Braxton_43x70_Enerquest_AOI_map.pdf
    Right-click or tap and hold here to download pictures. To help protect y our privacy , O utlook prevented automatic download of this picture from
    the Internet.




                                                                                                                                                        www.dropbox.com

                                                                                                                                                        Shared with Dropbox




Thanks,

Jacob


From: Matt Mollman <M.Mollman@enerquest.net>
Sent: Thursday, February 16, 2017 10:02:09 AM
To: Jacob Patrylick; Scott Bauer; Greg Olson
Subject: RE: WV aoi maps


Jacob,



I think we can get things moving along quicker if you could forward a shapefile that only contains the
Units in the vicinity of where Scott is working with Greg to define an AOI for purchasing additional
minerals. If you have any questions please give me a call.




Matt Mollman

Vice President

EnerQuest Oil & Gas, LLC

12368 Market Dr

Oklahoma City, OK 73114

Office: 405-478-3300 ext 102

                                                                                                                                                                3
Cell: 405-760-3896




From: Jacob Patrylick [mailto:Jacob.Patrylick@braxtonenergy.com]
Sent: Monday, February 13, 2017 11:58 AM
To: Scott Bauer <Scott@braxtonenergy.com>; Greg Olson <G.Olson@enerquest.net>; Matt Mollman
<M.Mollman@enerquest.net>
Subject: WV aoi maps




Gentlemen,



Here are links to aoi maps in West Virginia.

Overview map is kinda large file.

WV_Braxton_43x70_2+bcf_60k.pdf



Smaller area maps

WV_Braxton_13x19_Monroe_aoimap.pdf

WV_Braxton_13x19_Noland_aoimap.pdf
WV_Braxton_13x19_Hamilton_aoimap.pdf

WV_Braxton_13x19_Davis_aoimap.pdf



Best regards,

Jacob



<BraxtonWV_AOI_BaseMap.pdf>




                                               4
Exhibit 4
                                        141-290089-17


                                 CAUSE NO. 141-290089-17


PENN INVESTMENT FUNDS, LLC,    §                   IN THE DISTRICT COURT OF
               Plaintiff       §
                               §
ANTERO RESOURCES CORPORATION, §
                  Intervenor   §
                               §
VS.                            §
                               §
BRAXTON ENERGY, LLC,           §
BRAXTON ACQUISITIONS, LLC,     §
BRAXTON MINERALS II, LLC,      §
ROBERT SCOTT BAUER, JOHN       §
BRADLEY ASHBURN, MICHAEL       §
FISHER, MAEGEN FISHER AND      §
M&M CONSULTING,                §
                               §
           Original Defendants §                   141st JUDICIAL DISTRICT
                               §
                               §
AUSTIN FOX, JOE F. PENN JR.,   §
BRAXTON MINERALS III, VENTURE §
STRONG II LLC, POST OAK        §
APPALACHIA LLC, TURN 2 ENERGY §
LLC, BRAXTON-MINERALS          §
APPALACHIA LLC, AND ENERGY     §
CORPORATION OF AMERICA,        §
ENERQUEST OIL & GAS, L.L.C.,   §
                               §
           New Defendants.     §                   TARRANT COUNTY, TEXAS


          INTERVENOR ANTERO RESOURCES CORPORATION’S FIRST
         SET OF INTERROGATORIES AND REQUESTS FOR PRODUCTION
                     TO ENERQUEST OIL & GAS, L.L.C.

TO:    Defendant EnerQuest Oil & Gas, L.L.C., by and through its attorneys of record, Joseph M.
       Cox and Andrea D. Broyles, 1445 Ross Avenue, Suite 3800, Dallas, Texas 75202, and
       Spencer F. Smith, McAfee & Taft, 211 N. Robinson Ave. Oklahoma City, Oklahoma
       73102.

       Pursuant to Rules 192, 196 and 197 of the Texas Rules of Civil Procedure, Antero

Resources Corporation (“Antero”), Intervenor in the above-captioned case, serves upon Defendant
EnerQuest Oil & Gas, L.L.C. (“EnerQuest”), the following interrogatories and requests for

production, the answers to which shall be made under oath separately and fully in writing within

thirty (30) days after the date of service of these interrogatories and requests for production and

shall be given to the undersigned counsel of record.

                                             I.
                                       INSTRUCTIONS

        1.     Unless otherwise specified, produce all requested documents in your possession,
custody, or control. Without limitation, a document is deemed to be in your control if you have the
right to secure the document or a copy thereof from another person or public or private entity
having actual possession thereof. Such documents include any documents that you do now or did
at any time during the period covered by these requests maintain or keep in personal files, private
papers, electronic storage or devices, homes, personal automobiles, or anywhere else on or off
your premises.

        2.      If you have in your possession, custody, or control a copy of a requested document,
but not an original, please so state and produce the copy.

        3.      In lieu of producing original documents which are in your possession, custody, or
control, you may produce copies provided that the copies are accurate and complete copies of
original documents and provided that the originals are preserved and made accessible upon request
during this or any subsequent proceeding.

        4.     If any document is responsive to a request for production and was, but is no longer,
in your possession or custody or subject to your control, state what disposition was made of it and
why, who disposed of the document, and the date(s) (or approximate date(s)) on which the
document was disposed.

       5.      If any request asks for documents that are no longer in existence, identify the
request and, with respect thereto:

               a.     identify all such documents;

               b.     state the time period during which such documents were maintained;

               c.     state the circumstances under which such documents ceased to exist;

               d.     state the date when such documents ceased to exist;

              e.    identify all persons having knowledge of the circumstances under which
       such documents ceased to exist; and

             f.     identify all persons who have knowledge or had knowledge of the
       documents and the contents thereof.

                                                2
        6.     If any documents called for in response to any of these requests were furnished in
response to another of these requests, or in response to previous requests of any party to this action,
they need not be furnished again. Indicate, however, what the documents are and pursuant to which
of those requests they were produced.

       7.      For each document withheld under a claim of privilege, state:

               a.      the name and title of the author(s);

               b.    the name and title of the person(s) to whom a copy of the document was
       sent or to whom any part of the document or a copy was shown;

               c.      the date of the document;

               d.      the name and title of the person(s) to whom the document was addressed;

               e.      the number of pages;

               f.      a brief description of the subject matter;

               g.      the nature of the privilege claimed;

               h.      the facts that support such claim of privilege; and

               i.      the request(s) to which the document is otherwise responsive.

        8.       When a person is referred to or identified in an answer to an interrogatory, or
identified as a source or partial source of an answer, set forth with respect to each such person: (1)
his or her full name, employer, and position at the time in question, (2) his or her present employer
and position, and (3) his or her present business and home address.

        9.      When a corporation, firm or other entity is referred to or identified in an answer to
an interrogatory, or as a source or partial source of an answer, set forth with respect to such entity:
(1) the full name of such entity, and (2) the address of such entity.

         10.   When a document is referred to or identified in an answer to an interrogatory, or as
a source or partial source of an answer, set forth with respect to such document: (1) the identity
of each person who either wholly or in part originated, initialed, signed, prepared or revised (and
if the same was done on behalf of any person, the identity of such person), or who is referred to in
any way on the face or back of such document, (2) the date of such document, (3) the type of
document, (4) any identifying numbers on the face or back of such document, (5) the substance of
such document, (6) the identity and location of each person who has possession, custody or control
over each copy of such document, including, if such person is not an individual, the person
exercising such possession, custody or control on behalf of such, and if such document has been
destroyed or otherwise disposed, identify as herein required each person who destroyed or
otherwise disposed of such document or who directed or participated in such destruction or other
disposal of such document, and (7) if any document ever existed which referred or related to such


                                                   3
document, identify as herein required each such document which referred or related to such
document.

        11.     Wherever an oral communication is referred to or identified in answer to any
interrogatory, or as a source or partial source of an answer: (1) identify each person participating
in or present during all or part of such oral communication and specify the date, time of day and
duration of such oral communication, (2) state whether such oral communication took place in a
face-to-face meeting or by means of a telephone, radio or other means of communication, (3) state
the substance of what was said by each person during such oral communication, and (4) identify
each document relating or referring to such oral communication.

        12.    With respect to and as part of the answer to each interrogatory, state whether the
answer is given upon personal knowledge and, if so, identify each person upon whose knowledge
the answer is given. If any answer is not given upon personal knowledge, identify the source of
the information and belief. If any answer is based upon documents, identify each such document.
If any answer is based upon oral communications, identify each such oral communication.

        13.     All interrogatories herein are continuing and are to be supplemented to the fullest
extent required by the Texas Rules of Civil Procedure. Intervenor reserves the right to serve further
interrogatories.

        14.     If you are asked to identify a document or an oral communication and object to
identifying or to describing the document or oral communication because it allegedly constitutes
privileged matter or work product, or is otherwise allegedly protected from discovery, you must
still identify the document or oral communication in accordance with the definitions and
instructions herein, except that instead of fully describing the substance of the document or oral
communication for which privileged is claimed, you must describe the subject of the document or
oral communication to the fullest extent consistent with the privilege or protection claimed, and
you must hold the document or evidence of such oral communication subject to the further orders
of the Court.

                                              II.
                                         DEFINITIONS

       1.      “Antero” and “Intervenor” shall mean Intervenor, Antero Resources Corporation.

        2.      “BMA” means Braxton Minerals-Appalachia LLC and any of its employees,
officers, directors, agents, or contractors.

        3.     “BMII” means Braxton Minerals II and any of its employees, officers, directors,
agents, or contractors.

        4.     “BMIII” means Braxton Minerals III and any of its employees, officers, directors,
agents, or contractors.

       5.      “Communication” means a transmission from one person to another or in the
presence of another, whether written, oral, telephonic, electronic or by any other means, including
text messages.

                                                 4
        6.     “Defendants” shall mean Braxton Energy, LLC, Braxton Acquisitions, LLC,
Braxton Minerals II, LLC, Robert Scott Bauer, John Bradley Ashburn, Michael Fisher, Maegan
Fisher, M&M Consulting, Kelly O’Connor, Austin Fox, Joe F. Penn Jr., Braxton Minerals III,
Venture Strong II LLC, Post Oak Appalachia LLC, Turn 2 Energy LLC, Braxton-Minerals,
Appalachia LLC, Energy Corporation of America, EnerQuest, and any other persons or entities
acting or purporting to act on their respective behalf.

        7.      “Document” means any printed, type-written or handwritten instrument of
whatever character where the physical expression of any means of storage of information and
includes, without limitation, any correspondence, memorandum, agreement, letter, hand or type
written note, computer printout, computer tape, microfilm, microfiche, tape recording, photograph,
motion picture, plat, diagram, survey, voice tapes, recordings, computer information, including
but not limited to the text of e-mails, and other items of a similar nature, originals and non-identical
copies and where originals and/or non-identical copies are in existence, a copy of the original and
copy of all non-identical copies.

        8.     “Identify” means the following unless additional information is requested in a
given interrogatory:

              a.      With respect to a natural person, “identify” means to state the person’s full
       name, present employer, title, job description, business and home addresses and telephone
       numbers, and the person’s relationship, if any, with any party to this action;

               b.      With respect to a person other than a natural person including any business
       entity, “identify” means to include its name, its address “all business addresses,” its date
       and place of formation, the type of legal entity which it is, and its chief executive officer;

              c.      With respect to a “document,” “identify” means to state its title, date,
       author, addressee, recipient, subject matter or general nature, present location and
       custodian. Such documents shall be so identified whether or not the documents are in the
       possession of you or your attorney and whether or not the document is privileged; and

               d.    With respect to oral statements or communications, identification means to
       state the maker, recipient, the date made, the place made, the persons present when the
       communication was made, the mode of communication, the subject matter, and the date of
       the communication.

        9.     “Person” means the plural as well as the singular and includes, without limitation,
any natural person as well as any firm, corporation, unincorporated association, partnership of any
kind, or any other form of legal entity unless the context clearly indicates otherwise.

         10.     The “Lawsuit” means the case styled Cause No. 141-290089-17; Penn Investment
Funds, LLC, Plaintiff and Antero Resources Corporation, Intervenor v. Braxton Energy, LLC, et
al.; in the 141st Judicial District Court of Tarrant County, Texas.

       11.      “Trade Secret Documents” means:

             a. Antero’s Critical Date Report dated November 15, 2016;

                                                   5
            b. Any other Antero Critical Date Reports;

            c. The SWN June 2016 Acquisition Defects Report;

            d. Real Property Title Opinions prepared by Antero’s attorneys;

            e. All other documents setting forth Antero’s plans to drill wells, operate wells, form
               units, or acquire oil and gas interests;

            f. All other forms and types of information, including business, scientific, technical,
               economic, or engineering information, and any formula, design, prototype, pattern,
               plan, compilation, program device, program, code, device, method, technique,
               process, procedure, financial data, or list of actual or potential customers or
               suppliers, whether tangible or intangible and whether or how stored, compiled, or
               memorialized physically, electronically, graphically, photographically, created by
               or for Antero or its agents, attorneys, contractors, or similar personnel, not generally
               known or readily ascertainable through proper means by persons other than Antero
               and Texhoma Land Consultants I, Inc.

       12.     “Texhoma” means Texhoma Land Consultants I Inc. and any of its employees or
contractors.

     13.        “Trade Secret Information” means any information embodied in a Trade Secret
Document.

       14.     “You” or “Your” shall mean EnerQuest (together with its respective agents,
employees, attorneys, affiliates, members, officers, directors, predecessors, successors, assigns,
and any other person or entity acting or purporting to act on behalf of any of them) answering
Antero’s written discovery requests.

                                            III.
                                      INTERROGATORIES

INTERROGATORY NO. 1

Identify any and all persons who have knowledge of EnerQuest’s contacts with the State of Texas,
including, but not limited to, persons located in or residents of the State of Texas.

ANSWER:



INTERROGATORY NO. 2

Identify any and all persons who have knowledge of EnerQuest’s contacts with Bauer, Ashburn,
BMA, BMII, or BMIII.

ANSWER:

                                                  6
INTERROGATORY NO. 3

If you contend that this lawsuit should be dismissed for want of jurisdiction pursuant to a special
appearance by you, please identify any facts, documents, and/or witnesses that support your
contention.

ANSWER:



INTERROGATORY NO. 4

State the times, sources, and means by which you obtained possession of each of the Trade Secret
Documents, including identification of all agents, employees, or other individuals affiliated with
you who obtained or viewed such Trade Secret Documents.

ANSWER:



INTERROGATORY NO. 5

State the times, sources, and means by which you conveyed to any other person any Trade Secret
Document, or any Trade Secret Information.

ANSWER:



                                         IV.
                              REQUESTS FOR PRODUCTION

REQUEST FOR PRODUCTION NO. 1

Produce any Trade Secret Documents still in your possession.

RESPONSE:


REQUEST FOR PRODUCTION NO. 2

Produce any and all documents that relate to the formation of BMIII, including, but not limited to,
discussions of potential members, employees, agents, office locations, and business to be
conducted by BMIII.

RESPONSE:


                                                7
REQUEST FOR PRODUCTION NO. 3

Produce all communications received from or sent to any person or location in Texas relating to
the formation of BMIII.

RESPONSE:


REQUEST FOR PRODUCTION NO. 4

Produce all communications received from or sent to any person or location in Texas relating to
the business activities or prospective business activities of BMIII.

RESPONSE:


REQUEST FOR PRODUCTION NO. 5

Produce all communications received from or sent to any person or location in Texas relating to
the leasing activities or prospective leasing activities of BMIII.

RESPONSE:


REQUEST FOR PRODUCTION NO. 6

Produce all communications received from or sent to any person or location in Texas relating to
Antero’s leasing, production, operations, plans, or business in West Virginia.

RESPONSE:


REQUEST FOR PRODUCTION NO. 7

Produce all communications received from or sent to any person or location in Texas relating to
EnerQuest’s investment or potential investment in the ownership or leasing of any oil and gas
interests located in units operated, to be operated, drilled, or to be drilled by Antero.

RESPONSE:


REQUEST FOR PRODUCTION NO. 8

Produce any and all communications with Robert Scott Bauer.

RESPONSE:




                                              8
REQUEST FOR PRODUCTION NO. 9

Produce any and all communications with John Bradley Ashburn.

RESPONSE:


REQUEST FOR PRODUCTION NO. 10

Produce any and all communications with Austin Fox, Kelly O’Connor, or any other person
employed by Texhoma Land Consultants I Inc.

RESPONSE:


REQUEST FOR PRODUCTION NO. 11

Produce all documents relating to payments made by EnerQuest to any person or entity located in
Texas or organized under the laws of the State of Texas for the purpose of acquiring or leasing oil
and gas interests located in units operated, to be operated, drilled, or to be drilled by Antero
(regardless of what entity would hold those minerals or leases).

RESPONSE:


REQUEST FOR PRODUCTION NO. 12

Produce all documents relating to BMIII’s sale of West Virginia oil and gas properties.

RESPONSE:


REQUEST FOR PRODUCTION NO. 13

Produce all documents relating to EnerQuest’s awareness of, management of, or participation in
BMIII’s sale of West Virginia oil and gas properties.

RESPONSE:


REQUEST FOR PRODUCTION NO. 14

Produce all communications with BMA.

RESPONSE:




                                                9
REQUEST FOR PRODUCTION NO. 15

Produce all documents you transmitted to or received from BMA.

RESPONSE:


REQUEST FOR PRODUCTION NO. 16

Produce all documents in your possession, custody, or control relating to Texhoma Land
Consultants I Inc.

RESPONSE:


REQUEST FOR PRODUCTION NO. 17

Produce all documents in your possession, custody, or control transmitted to or received from
Texhoma Land Consultants I Inc.

RESPONSE:


REQUEST FOR PRODUCTION NO. 18

Produce any and all documents related to the locations and/or residences of all members, directors,
officers, employees, and agents of EnerQuest.

RESPONSE:


REQUEST FOR PRODUCTION NO. 19

Produce any and all documents related to the locations and/or residences of all members, directors,
officers, employees, and agents of BMIII.

RESPONSE:


REQUEST FOR PRODUCTION NO. 20

Produce any and all documents that relate to any offices owned, maintained, or used, in the State
of Texas, by or on behalf of EnerQuest.

RESPONSE:




                                                10
REQUEST FOR PRODUCTION NO. 21

Produce any and all documents that relate to any offices owned, maintained, or used, in the State
of Texas, by or on behalf of BMIII.

RESPONSE:


REQUEST FOR PRODUCTION NO. 22

Produce any and all documents that relate to business conducted in the State of Texas by or on
behalf of EnerQuest, including, but not limited to, contacts with Bauer, Ashburn, BMA, or BMIII.

RESPONSE:


REQUEST FOR PRODUCTION NO. 23

Produce any and all documents that relate to business conducted in the State of Texas by or on
behalf of BMIII.

RESPONSE:


REQUEST FOR PRODUCTION NO. 24

Produce any and all documents that relate to records or documents, owned or maintained by or on
behalf of EnerQuest that are located in the State of Texas.

RESPONSE:


REQUEST FOR PRODUCTION NO. 25

Produce any and all documents that relate to records or documents, owned or maintained by or on
behalf of BMIII that are located in the State of Texas

RESPONSE:


REQUEST FOR PRODUCTION NO. 26

Produce documents sufficient to identify all property owned in the State of Texas by or on behalf
of EnerQuest, including any oil and gas wells operated by EnerQuest.

RESPONSE:




                                               11
REQUEST FOR PRODUCTION NO. 27

Produce documents sufficient to identify all property owned in the State of Texas by or on behalf
of BMIII.

RESPONSE:


REQUEST FOR PRODUCTION NO. 28

Produce any and all documents that relate to bank accounts maintained in the State of Texas by or
on behalf of EnerQuest.

RESPONSE:


REQUEST FOR PRODUCTION NO. 29

Produce any and all documents that relate to bank accounts maintained in the State of Texas by or
on behalf of BMIII.

RESPONSE:


REQUEST FOR PRODUCTION NO. 30

Produce any and all documents that relate to mailing addresses or telephone numbers maintained
in the State of Texas by or on behalf of EnerQuest.

RESPONSE:


REQUEST FOR PRODUCTION NO. 31

Produce any and all documents that relate to mailing addresses or telephone numbers maintained
in the State of Texas by or on behalf of BMIII.

RESPONSE:


REQUEST FOR PRODUCTION NO. 32

Produce any and all documents that relate to agents for service of process maintained in the State
of Texas by or on behalf of EnerQuest.

RESPONSE:




                                               12
REQUEST FOR PRODUCTION NO. 33

Produce any and all documents that relate to agents for service of process maintained in the State
of Texas by or on behalf of BMIII.

RESPONSE:


REQUEST FOR PRODUCTION NO. 34

Produce any and all documents that relate to any correspondence, e-mails, or phone calls to or
from a person located in the State of Texas by or on behalf of EnerQuest.

RESPONSE:


REQUEST FOR PRODUCTION NO. 35

Produce any and all documents that relate to trips by or on behalf of EnerQuest to the State of
Texas.

RESPONSE:


REQUEST FOR PRODUCTION NO. 36

Produce any and all documents that relate to meetings conducted by or on behalf of EnerQuest in
the State of Texas.

RESPONSE:


REQUEST FOR PRODUCTION NO. 37

Produce any and all documents that relate to meetings conducted by or on behalf of BMIII in the
State of Texas.

RESPONSE:


REQUEST FOR PRODUCTION NO. 38

Produce any and all documents that relate to the purchase or sale of any goods or services by or
on behalf of EnerQuest in the State of Texas.

RESPONSE:




                                               13
REQUEST FOR PRODUCTION NO. 39

Produce any and all documents that relate to the purchase or sale of any goods or services by or
on behalf of BMIII in the State of Texas.

RESPONSE:


REQUEST FOR PRODUCTION NO. 40

Produce any and all documents that relate to advertisements or marketing done by or on behalf of
EnerQuest in the State of Texas.

RESPONSE:


REQUEST FOR PRODUCTION NO. 41

Produce any and all documents that relate to advertisements or marketing done by or on behalf of
BMIII in the State of Texas.

RESPONSE:


REQUEST FOR PRODUCTION NO. 42

Produce any and all documents that relate to the solicitation of business or employees conducted
by or on behalf of EnerQuest in the State of Texas.

RESPONSE:


REQUEST FOR PRODUCTION NO. 43

Produce any and all documents that relate to the solicitation of business or employees conducted
by or on behalf of BMIII in the State of Texas.

RESPONSE:


REQUEST FOR PRODUCTION NO. 44

Produce any and all documents that relate to any contracts entered into by or on behalf of
EnerQuest with any resident of or Person located in the State of Texas.

RESPONSE:




                                              14
REQUEST FOR PRODUCTION NO. 45

Produce any and all documents that relate to any contracts entered into by or on behalf of BMIII
with any resident of or person located in the State of Texas.

RESPONSE:


REQUEST FOR PRODUCTION NO. 46

Produce any and all documents that relate to taxes paid to any governmental entity in the State of
Texas by or on behalf of EnerQuest.

RESPONSE:


REQUEST FOR PRODUCTION NO. 47

Produce any and all documents that relate to taxes paid to any governmental entity in the State of
Texas by or on behalf of BMIII.

RESPONSE:


REQUEST FOR PRODUCTION NO. 48

Produce any and all documents that relate to lawsuits filed in the State of Texas (other than the
instant suit) in which EnerQuest is a party or named third-party.

RESPONSE:


REQUEST FOR PRODUCTION NO. 49

Produce any and all documents that relate to lawsuits filed in the State of Texas (other than the
instant suit) in which BMIII is a party or named third-party.

RESPONSE:


REQUEST FOR PRODUCTION NO. 50

If you contend that access to sources of proof will be easier if this lawsuit is tried in Oklahoma,
please produce any and all documents that support that contention.

RESPONSE:




                                                15
REQUEST FOR PRODUCTION NO. 51

If you contend that the costs of securing the presence of willing witnesses will be lower if this
lawsuit is tried in Oklahoma, please produce any and all documents that support that contention.

RESPONSE:


REQUEST FOR PRODUCTION NO. 52

If you contend that compulsory process will be available to secure the attendance of unwilling
witnesses if this lawsuit is tried in Oklahoma, please produce any and all documents that support
that contention.

RESPONSE:


REQUEST FOR PRODUCTION NO. 53

If you contend that the administrative burden of this lawsuit on a court in Oklahoma would be less
than the burden on a court in Texas, please produce any and all documents that support that
contention.

RESPONSE:


REQUEST FOR PRODUCTION NO. 54

Produce any and all documents that Gregory W. Olson relied upon or consulted when he provided
the affidavit attached to EnerQuest’s Special Appearance.

RESPONSE:




                                               16
Respectfully submitted,

STEPTOE & JOHNSON PLLC

By:     /s/ Jason R. Grill
       Jason R. Grill
       State Bar No. 24002185
       jason.grill@steptoe-johnson.com
       W. Henry Lawrence
       WV State Bar No. 2156
       10001 Woodloch Forest Drive, Suite 300
       The Woodlands, Texas 77380
       281.203.5700
       281.203.5701 (facsimile)


VINSON & ELKINS LLP

By:     /s/ Phillip B. Dye
       Phillip B. Dye, Jr.
       State Bar No. 06311500
       pdye@velaw.com
       Jason M. Powers
       State Bar No. 24007867
       jpowers@velaw.com
       Caroline C. Stewart
       State Bar No. 24098477
       cstewart@velaw.com
       1001 Fannin Street, Suite 2500
       Houston, TX 77002-6760
       713.758.2222
       713.758.2346 (facsimilie)


ATTORNEYS FOR INTERVENOR




  17
                                CERTIFICATE OF SERVICE

         I hereby certify that a true and correct copy of the foregoing document has been forwarded
to all parties listed below via E-service and/or via facsimile, on this the 25th day of April, 2018:

 Via E-Service: ghamm@hammfirm.com                 Via E-Service: apennington@phblaw.com
 Gene A. Hamm, II                                  H. Allen Pennington, Jr.
 The Hamm Firm                                     Matthew D. Germany
 1333 W. McDermott, Suite 200                      Pennington Hill, LLP
 Allen, Texas 75013                                Tindall Square – Warehouse No. 3
 Attorney for Plaintiff, Penn                      509 Pecan Street, Suite 101
 Investment Funds, LLC and New Defendants          Fort Worth, Texas
 Venture Strong II, LLC and Joe F. Penn Jr.        Attorneys for Defendants John Bradley
                                                   Ashburn and New Defendant Post Oak
                                                   Appalachia, LLC
 Via E-Service:                                    Via E-Service: avery@averymcdaniel.com
 mhassett@tarrantbusinesslaw.com                   Avery McDaniel
 Michael Hassett                                   Law Office of Avery McDaniel
 Jones Hassett, PC                                 1205 N. Main Street
 440 North Center                                  Fort Worth, Texas 76164
 Arlington, Texas 76011                            Attorney for Braxton Minerals II, LLC
 Attorney for Defendants Michael Fisher,
 Maegan Fisher and M&M Consulting

 Via E-Service: Scott@braxtonenergy.com            Via E-Service: awoodward@hrepc.com
 R. Scott Bauer                                    C. Andrew Woodward
 8851 Camp Bowie Boulevard W                       Holman Robertson Eldridge
 Suite 200                                         8226 Douglas Ave., Suite 550
 Fort Worth, Texas 76116                           Dallas, Texas 75225
 Attorney for Braxton Acquisitions, LLC;           Attorney for Kelly O’Connor
 Braxton Energy, LLC and R. Scott Bauer
 Via E-Service: rolandjohnson@hfblaw.com           Via E-Service: joe.cox@bracewell.com
 Roland K. Johnson                                 Joseph M. Cox and Andrea D. Broyles
 Harris, Finley & Bogle, PC                        1445 Ross Avenue, Suite 3800
 777 Main Street, Suite 1800                       Dallas, Texas 75202
 Fort Worth, Texas 76102                           Spencer F. Smith
 Attorney for Energy Corporation of America        McAfee & Taft
                                                   211 N. Robinson Ave.
                                                   Oklahoma City, Oklahoma 73102.
                                                   Attorneys for EnerQuest Oil & Gas, L.L.C.
 Via E-Service: jnt@turnerandallen.com             Via E-Service: cd@peebleslaw.com
 Jess N. Turner, III                               C.D. Peebles
 Turner & Allen, P.C.                              The Peebles Law Firm
 P.O. Box 930                                      1604 Devon Court
 Graham, Texas 76450                               Southlake, TX 76092
 Attorney for Turn 2 Energy, LLC                   Attorney for Austin Fox
Via E-Service: brad@postoakroyalty.com
Brad Ashburn
100 N. Forest Park Blvd., Suite 201
Fort Worth, Texas 76102
Attorney for Braxton Minerals-Appalachia,
LLC

                                      _/s/ Caroline C. Stewart_________________
                                        CAROLINE C. STEWART
EXHIBIT C
                                          141-290089-17                                                FILED
                                                                                          TARRANT COUNTY

                                  CAUSE NO. 141-290089-17
                                                                                           4/26/2018 4:52 PM
                                                                                         THOMAS A. WILDER
                                                                                            DISTRICT CLERK

PENN INVESTMENT FUNDS, LLC,                    )     IN THE DISTRICT COURT OF
                  Plaintiff,                   )
                                               )
ANTERO RESOURCES CORPORATION,                  )
                 Intervenor,                   )     TARRANT COUNTY, TEXAS
                                               )
vs.                                            )
                                               )
BRAXTON ENERGY, LLC, et al.,                   )
                 Defendants.                   )     141ST JUDICIAL DISTRICT

                                    NOTICE OF HEARING

       Please take notice that Defendant EnerQuest Oil & Gas, L.L.C.’s Special Appearance to

Object to Personal Jurisdiction dated April 18, 2018 is set for hearing on Wednesday, May 9,

2018 at 1:30 p.m. in the 141st District Court for Tarrant County, located at 100 N. Calhoun Street,

Fort Worth, Texas 76196.

                                             Respectfully submitted,

                                             BRACEWELL LLP
                                             By:     /s/ Joseph M. Cox
                                                 Joseph M. Cox
                                                 State Bar No. 04950200
                                                 Joe.Cox@bracewell.com
                                                 Andrea D. Broyles
                                                 State Bar No. 24082744
                                                 Andrea.Broyles@bracewell.com
                                             1445 Ross Avenue, Suite 3800
                                             Dallas, Texas 75202
                                             Telephone: (214) 468-3800
                                             Facsimile: (800) 404-3970
                                                            - and –
                                             Spencer F. Smith
                                             State Bar No. 24008625
                                             MCAFEE & TAFT A Professional Corporation
                                             Tenth Floor, Two Leadership Square
                                             211 N. Robinson Ave.
                                             Oklahoma City, Oklahoma 73102-7103
                                             spencer.smith@mcafeetaft.com
                                             Attorneys for Defendant EnerQuest Oil & Gas, L.L.C.



#5689156
                                     Certificate of Service
       I hereby certify that on April 26, 2018, a true and correct copy of the foregoing document
was served on the following counsel of record in accordance with the Texas Rules of Civil
Procedure:
 Jason R. Grill                                  Phillip B. Dye, Jr.
 W. Henry Lawrence                               Caroline C. Stewart
 Steptoe & Johnson PLLC                          Vinson & Elkins LLP
 10001 Woodlock Forest Drive, Suite 300          1001 Fannin Street, Suite 2500
 The Woodlands, Texas 77380                      Houston, Texas 77002-6760
 jason.grill@steptoe-johnson.com                 pdye@velaw.com
 hank.lawrence@stptoe-johnson.com                cstewart@velaw.com
 Attorneys for Intervenor Antero Resources       Attorneys for Intervenor Antero Resources
 Corporation                                     Corporation
 Gene A. Hamm, II                                H. Allen Pennington, Jr.
 The Hamm Firm                                   Matthew D. Germany
 1333 W. McDermott, Suite 200                    Pennington Hill, LLP
 Allen, Texas 75013                              Tindall Square-Warehouse No. 3
 ghamm@hammfirm.com                              509 Pecan Street, Suite 101
 Attorney for Plaintiff Penn Investment          Fort Worth, Texas 76102
 Funds, LLC, Joe F. Penn Jr., and Venture        apennington@phblaw.com
 Strong II, LLC                                  Attorneys for Defendant John Bradley
                                                 Ashburn and Post Oak Appalachia, LLC
 Michael Hassett                                 Avery McDaniel
 Jones Hasset, PC                                Law Office of Avery McDaniel
 440 North Center                                1205 N. Main Street
 Arlington, Texas 76011                          Fort Worth, Texas 76164
 mhasset@tarrantbusinesslaw.com                  avery@avrymcdaniel.com
 Attorney for Defendants Michael Fisher,         Attorney for Braxton Minerals II, LLC
 Maegan Fisher, and M&M Consulting
 R. Scott Bauer                                  C. Andrew Woodward
 8851 Camp Bowie Boulevard W                     Holman Robertson Eldridge
 Suite 200                                       8226 Douglas Ave., Suite 550
 Fort Worth, Texas                               Dallas, Texas 75225
 scott@braxtonenergy.com                         awoodward@hrepc.com
 Attorney for Braxton Acquisitions, LLC,         Attorney for Kelly O’Connor
 Braxton Energy LLC, and himself
 Roland K. Johnson                               Charles W. Sartain
 Harris, Finley & Bogle, P.C.                    Gray Reed & McGraw
 777 Main Street, Suite 1800                     1601 Elm Street, Suite 4600
 Fort Worth, Texas 76102                         Dallas, Texas 75201
 rolandjohnson@hfblaw.com                        Attorneys for Global Oil and Gas Fields
 Attorneys for Energy Corporation of
 America
                                            /s/ Joseph M. Cox
                                            Joseph M. Cox
                                                2

#5689156
EXHIBIT D
                                      CAUSE NO. 141-290089-17

PENN INVESTMENT FUNDS, LLC,                      )    IN THE DISTRICT COURT OF
                  Plaintiff,                     )
                                                 )
ANTERO RESOURCES CORPORATION,                    )
                 Intervenor,                     )    TARRANT COUNTY, TEXAS
                                                 )
vs.                                              )
                                                 )
BRAXTON ENERGY, LLC, et al.,                     )
                 Defendants.                     )    141ST JUDICIAL DISTRICT

                       DEFENDANT BRAXTON MINERALS III, LLC’S
                      SPECIAL EXCEPTIONS AND ORIGINAL ANSWER

           Defendant Braxton Minerals III, LLC (“BMIII”) hereby files its Special Exceptions and

Original Answer to the Amended Petition in Intervention and Application for Temporary and

Permanent Injunction (“Amended Petition in Intervention”) of Intervenor Antero Resources

Corporation (“Antero”), and would respectfully show the Court as follows:

                                 I.      SPECIAL EXCEPTIONS

       1.         Antero’s Amended Petition in Intervention includes a variety of vague, ambiguous,

and generally stated allegations that do not meet these requirements, and wholly lacks any

allegations of wrongdoing on the part of BMIII. Pursuant to Rule 91 of the Texas Rules of Civil

Procedure, BMIII specially excepts to Antero’s claims for Trade Secret Misappropriation,

Conspiracy, and Aiding and Abetting. Texas follows the “fair notice” standard for pleading, which

looks at whether the opposing party can ascertain from the pleadings the nature and basic issues

of the controversy and what testimony will be relevant. Horizon/ CMS Healthcare Corp. v. Auld,

34 S.W.3d 887, 896 (Tex. 2000). If a plaintiff pleads a cause of action in general terms, the

defendant may file special exceptions to require the plaintiff to plead specifically. See Subia v.

Tex. Dept. of Human Servs., 750 S.W.2d 827, 829 (Tex. App.—El Paso 1988, no writ).


DEFENDANT BRAXTON MINERALS III, LLC’S                                                        Page 1
SPECIAL EXCEPTIONS AND ORIGINAL ANSWER
#5692762
       2.      In the Amended Petition in Intervention, Antero has failed to identify any wrongful

conduct by BMIII that injured Antero or caused Antero to incur damages. In fact, BMIII is only

mentioned in eight (8) paragraphs throughout the Amended Petition in Intervention, related to the

following subject matters: (a) Robert Scott Bauer identified certain Antero Title Opinions in his

possession or that were obtained from John Bradley Ashburn, and those title opinions related to

mineral properties acquired by BMIII; (b) BMIII’s membership structure and the current dispute

between the members related to management of the company; and (c) EnerQuest Oil and Gas,

LLC has advertised BMIII’s assets for sale. See Amended Petition in Intervention ¶¶ 38, 40, 42–

46, 62. Absent from the Amended Petition in Intervention is any alleged wrongful conduct by

BMIII; instead, Antero has alleged conduct of third parties or information completely irrelevant to

the elements of any of Antero’s causes of action. As a result of Antero’s vague, ambiguous, and

general pleading, BMIII cannot ascertain from the Amended Petition in Intervention which causes

of action Antero is pursuing against BMIII, or even what conduct of BMIII Antero alleges is

wrongful. Accordingly, Antero should be required to re-plead and provide sufficient information

to give BMIII “fair notice” of the causes of action asserted.

                                     II.     GENERAL DENIAL

       3.      Pursuant to Rule 92 of the Texas Rules of Civil Procedure, BMIII denies each and

every allegation in Antero’s Amended Petition in Intervention and demands strict proof thereof by

a preponderance of the evidence.

                              III.         AFFIRMATIVE DEFENSES

       4.      Antero’s claims are barred, in whole or in part, due to the failure to state a claim

upon which relief may be granted.

       5.      Antero’s claims are barred, in whole or in part, by virtue of the doctrine of waiver.


DEFENDANT BRAXTON MINERALS III, LLC’S                                                         Page 2
SPECIAL EXCEPTIONS AND ORIGINAL ANSWER
#5692762
       6.        Antero’s claims are barred, in whole or in part, by virtue of the doctrine of estoppel.

       7.        Antero’s claims are barred, in whole or in part, by virtue of the statute of limitations

doctrine.

                              IV.     REQUEST FOR DISCLOSURE

       8.        Pursuant to Rule 194 of the Texas Rules of Civil Procedure, BMIII requests that

Antero disclose, within thirty (30) days of service of this request, the information or material

described in Rule 194.2.

                                           V.      PRAYER

           WHEREFORE, PREMISES CONSIDERED, Defendant BMIII respectfully requests that

the Court sustain its special exceptions to Antero’s Amended Petition in Intervention. Specifically,

BMIII requests that the Court require Antero to re-plead its claims against BMIII. BMIII further

requests that Antero take nothing by its claims, and BMIII recover the costs of this proceeding,

and such other and further relief to which it may be justly entitled.

                                                 Respectfully submitted,

                                                 BRACEWELL LLP

                                                 By:       /s/ Joseph M. Cox
                                                       Joseph M. Cox
                                                       State Bar No. 04950200
                                                       Joe.Cox@bracewell.com
                                                       Andrea D. Broyles
                                                       State Bar No. 24082744
                                                       Andrea.Broyles@bracewell.com

                                                 1445 Ross Avenue, Suite 3800
                                                 Dallas, Texas 75202
                                                 Telephone: (214) 468-3800
                                                 Facsimile: (800) 404-3970

                                                 Attorneys for Defendant Braxton Minerals III,
                                                 LLC


DEFENDANT BRAXTON MINERALS III, LLC’S                                                             Page 3
SPECIAL EXCEPTIONS AND ORIGINAL ANSWER
#5692762
                                CERTIFICATE OF SERVICE

       I hereby certify that on April 30, 2018, a true and correct copy of the foregoing document
was served on all counsel of record in accordance with the Texas Rules of Civil Procedure.


                                            /s/ Joseph M. Cox
                                            Joseph M. Cox




DEFENDANT BRAXTON MINERALS III, LLC’S                                                      Page 4
SPECIAL EXCEPTIONS AND ORIGINAL ANSWER
#5692762
EXHIBIT E
EXHIBIT F
Powers, Jason

From:                              Cox, Joe <joe.cox@bracewell.com>
Sent:                              Tuesday, May 22, 2018 3:28 PM
To:                                Jason Grill; Powers, Jason
Cc:                                Broyles, Andrea; Cox, Joe
Subject:                           [EXT] Special appearance and discovery to EnerQuest


Dear Jason and Jason:

We are going to appeal the denial of the special appearance for EnerQuest. We were hoping not to have to seek relief
from the 2nd Court of Appeals for a motion to stay discovery. Would you all agree to stay the discovery as to only
EnerQuest? We intend to answer the discovery for BMIII and continue to participate in the discovery of the case, as well
as produce any documents EnerQuest has in relation to BMIII, Bauer and Ashburn through BMIII. Please let us know
today if you could agree to this. We would agree to answer the EnerQuest discovery within 30 days of a ruling from the
Court of Appeals upholding the denial of the special appearance.

Also, in the hustle and bustle of the deposition’s ending, I inadvertently took 4 pages from the two boxes in the other
conference room that I intended to mark and question Bauer about. Please let Andrea know where to send the few
pages I took.

Thanks for the hospitality.

Best regards.

           Joe
______
JOSEPH M. COX
Partner
joe.cox@bracewell.com
T: +1.214.758.1077 | F: +1.800.404.3970 | M: +1.214.505.7000

BRACEWELL LLP
1445 Ross Avenue Suite 3800 | Dallas, TX | 75202-2724
bracewell.com | profile | download v-card

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