                                                                                        ACCEPTED
                                                                                    04-15-00066-CV
                                                                        FOURTH COURT OF APPEALS
                                                                             SAN ANTONIO, TEXAS
                                                                               5/29/2015 9:04:03 AM
                               NO. 04-15-00066-CV                                    KEITH HOTTLE
                                                                                             CLERK


                           IN THE COURT OF APPEALS

                                                    FILED IN
         FOR THE FOURTH DISTRICT OF TEXAS AT SAN ANTONIO
                                                   4th COURT OF APPEALS
                                                    SAN ANTONIO, TEXAS
__________________________________________________________________
                                                   05/29/15 9:04:03 AM
                                                     KEITH E. HOTTLE
CONOCOPHILLIPS COMPANY                                    APPELLANT
                                                           Clerk


V.

VAQUILLAS UNPROVEN MINERALS, LTD.                        APPELLEE
__________________________________________________________________

        On Appeal from the 406th District Court, Webb County, Texas
__________________________________________________________________

                       BRIEF OF APPELLEE
__________________________________________________________________

GREGG OWENS
State Bar No. 15383500
JOHN R. HAYS, JR.                      P. MICHAEL JUNG
State Bar No. 09303300                 State Bar No. 11054600
ALICIA R. RINGUET                      Strasburger & Price, LLP
State Bar No. 24074958                 4400 Bank of America Plaza
Hays & Owens L.L.P.                    901 Main Street
807 Brazos Street, Suite 500           Dallas, Texas 75202
Austin, Texas 78701                    (214) 651-4300
(512) 472-3993                         (214) 659-4022 (telecopy)
(512) 472-3883 (telecopy)              michael.jung@strasburger.com
gregg.owens@haysowens.com
john.hays@haysowens.com

RAUL LEAL                              ARMANDO X. LOPEZ
State Bar No. 24032657                 State Bar No. 12562400
Raul Leal Incorporated                 Armando Lopez, Attorney at Law
5810 San Bernardo, Suite 390           1510 Calle Del Norte, Suite 16
Laredo, Texas 78041                    Laredo, Texas 78041
(956) 727-0039                         (956) 726-0722
(956) 727-0369 (telecopy)              (956) 726-6049 (telecopy)
rleal@rl-lawfirm.com                   mandox@rio.bravo.net

                           ATTORNEYS FOR APPELLEE

                         ORAL ARGUMENT REQUESTED
                          IDENTITIES OF PARTIES AND COUNSEL


                            Party                                  Counsel
 ConocoPhillips Company                             Michael V. Powell
   Appellant                                        Cynthia K. Timms
                                                    Elizabeth L. Tiblets
                                                    Locke Lord LLP
                                                    2200 Ross Avenue, Suite 2200
                                                    Dallas, Texas 75201-6776

                                                    Adolfo Campero
                                                    Campero & Associates, P.C.
                                                    315 Calle Del Norte, Suite 207
                                                    Laredo, Texas 78041
 Vaquillas Unproven Minerals, Ltd.                  Gregg Owens
   Appellee                                         John Hays
                                                    Hays & Owens L.L.P.
                                                    807 Brazos Street, Suite 500
                                                    Austin, Texas 78701

                                                    P. Michael Jung
                                                    Strasburger & Price, LLP
                                                    4400 Bank Of America Plaza
                                                    901 Main Street
                                                    Dallas, Texas 75202

                                                    Raul Leal
                                                    Raul Leal Incorporated
                                                    5810 San Bernardo, Suite 390
                                                    Laredo, Texas 78041

                                                    Armando X. Lopez
                                                    Armando Lopez, Attorney at Law
                                                    1510 Calle Del Norte, Suite 16
                                                    Laredo, Texas 78041




                                                  -i-
SP-#6737091-v1-Vaquillas_Brief_of_Appellee.docx
                                            TABLE OF CONTENTS


Identities of Parties and Counsel.................................................................................i

Table of Contents ...................................................................................................... ii

Index of Authorities ................................................................................................... v

Statement of the Case............................................................................................. viii

Issue Presented ....................................................................................................... viii

Statement of Facts ...................................................................................................... 1

          The Leases ....................................................................................................... 1

          The Field Rules ................................................................................................ 2

          The Well Density Rule .................................................................................... 4

          The Partial Releases ......................................................................................... 4

          The Litigation .................................................................................................. 5

Summary of the Argument......................................................................................... 5

Introduction to the Argument..................................................................................... 8

          Oil and Gas Leases .......................................................................................... 8

          Retained-Acreage Clauses ............................................................................... 9

          Spacing, Density, and Units Under the Rules ............................................... 10

Argument.................................................................................................................. 11

          I.        UNDER THE PLAIN MEANING OF THE RETAINED-
                    ACREAGE CLAUSE, CONOCO IS OBLIGATED TO
                    RELEASE ALL ACREAGE EXCEPT FOR 40 ACRES
                    PER WELL. ....................................................................................... 11



                                                            -ii-
SP-#6737091-v1-Vaquillas_Brief_of_Appellee.docx
                    A.        It Is the Spacing or Proration Provided by the Field
                              Rule, Not Necessarily the Text of the Field Rule Itself,
                              that Must Establish Units of Acreage Per Well. .................. 13

                    B.        The Spacing Provided by Field Rule 2 “Establishes”
                              Units of Acreage per Well. ..................................................... 14

                    C.        The Units Established by Field Rule 2’s Spacing
                              Requirements Are “Different Units” Because They
                              Are Different from 640 Acres. ............................................... 18

          II.       OTHER RULES OF CONSTRUCTION DO NOT PERMIT
                    OR REQUIRE THE COURT TO DISREGARD THE
                    PLAIN MEANING OF THE RETAINED-ACREAGE
                    CLAUSE. ............................................................................................ 20

                    A.        The Rule Against Surplusage Does Not Change the
                              Result. ....................................................................................... 20

                              1.        That Any Drilling Unit Established as a Result
                                        of Field-Rule Spacing Would Likely Be Less
                                        Than 640 Acres Does Not Create Surplusage. ........... 21

                              2.        The 640-Acre Pooling Authorization Is Not
                                        Rendered Surplusage. .................................................. 23

                              3.        The Requirement That Each Retained Unit
                                        Contain “At Least” One Well Is Not Rendered
                                        Surplusage. .................................................................... 24

                              4.        That a Particular Field-Rule Spacing
                                        Establishes the Drilling Unit for Gas Wells at
                                        the Same Acreage as the Drilling Unit for Oil
                                        Wells Does Not Create Surplusage. ............................ 25

                    B.        The Rule Regarding Special Limitations on a Grant
                              of Leasehold Rights Has No Application Here..................... 26

          III.      THE MANIFEST PURPOSE OF THE RETAINED-
                    ACREAGE CLAUSE IS SERVED BY THE TRIAL
                    COURT’S CONSTRUCTION. ........................................................ 28

                                                             -iii-
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Prayer ....................................................................................................................... 29

Certificate of Service ............................................................................................... 30

Certificate of Compliance ........................................................................................ 31

Appendix                                                                                                         Tab
     Amended Order on Cross-Motions for Summary Judgment (CR
           433-35) ................................................................................................. 1
     Amended Oil and Gas Mineral Lease [26,622.79-acre tract] (CR
           283-301) ............................................................................................... 2
     Oil and Gas Mineral Lease [6,740-acre tract] (CR 302-23) ........................... 3
     Final Order Amending Field Rules for the Vaquillas Ranch (Lobo
           Cons.) Field Webb County, Texas (CR 254-55) .................................. 4
     16 Tex. Admin. Code § 3.38 (CR 234-40) ..................................................... 5




                                                             -iv-
SP-#6737091-v1-Vaquillas_Brief_of_Appellee.docx
                                         INDEX OF AUTHORITIES


Cases


Anadarko Petroleum Corp. v. Thompson,
     94 S.W.3d 550 (Tex. 2002) .................................................................... 11, 26

Columbia Gas Transmission Corp. v. New Ulm Gas, Ltd.,
     940 S.W.2d 587 (Tex. 1996) .........................................................................16

ConocoPhillips Co. v. Ramirez,
     No. 04-05-00488-CV, 2006 Tex. App. LEXIS 5710 (Tex. App. – San
     Antonio 2006, no pet.) (mem. op.) ............................................................9, 22

Endeavor Energy Resources, L.P. v. Discovery Operating, Inc.,
     448 S.W.3d 169 (Tex. App. – Eastland 2014, pet. filed) ..............................27

Garcia v. King,
     139 Tex. 578, 164 S.W.2d 509 (1942) ............................................................9

Heritage Resources, Inc. v. NationsBank,
      939 S.W.2d 118 (Tex. 1996) ............................................................ 11, 16, 19

Jones v. Killingsworth,
      403 S.W.2d 325 (Tex. 1965) ............................................................ 16, 17, 18

Railroad Commission v. WBD Oil & Gas Co.,
      104 S.W.3d 69 (Tex. 2003) .............................................................................2

Springer Ranch, Ltd. v. Jones,
      421 S.W.3d 273 (Tex. App. – San Antonio 2013, no pet.) ...........................21

Unit Petroleum Co. v. David Pond Well Service, Inc.,
      439 S.W.3d 389 (Tex. App. – Amarillo 2014, pet. filed)..............................25

Universal CIT Credit Corp. v. Daniel,
     150 Tex. 513, 243 S.W.2d 154 (1951) ..........................................................21



                                                     -v-
SP-#6737091-v1-Vaquillas_Brief_of_Appellee.docx
Wagner & Brown, Ltd. v. Sheppard,
     282 S.W.3d 419 (Tex. 2008) .........................................................................24


Statutes


Tex. Civ. Prac. & Rem. Code § 51.014(d).................................................................5


Administrative Materials


16 Tex. Admin. Code § 3.31(c)(1)...........................................................................15

16 Tex. Admin. Code § 3.37 ......................................................................... 4, 10, 22

16 Tex. Admin. Code § 3.38 ............................................................................ passim

16 Tex. Admin. Code § 3.38(b) .................................................................................4

16 Tex. Admin. Code § 3.38(b)(2)(A) .....................................................................16

16 Tex. Admin. Code § 3.38(b)(2), table entry (6) ..............................................4, 18

16 Tex. Admin. Code § 3.38(f) ................................................................................25


Secondary Sources


1 Ernest E. Smith & Jacqueline Lang Weaver, Texas Law of Oil and Gas
      § 4.1(B) (2014) ................................................................................................8

1 Ernest E. Smith & Jacqueline Lang Weaver, Texas Law of Oil and Gas
      § 5.2(B)(3) (2014) ............................................................................................9

2 Ernest E. Smith & Jacqueline Lang Weaver, Texas Law of Oil and Gas
      § 10.1(B)(2) (2014) ........................................................................................11

Black’s Law Dictionary (10th ed. 2014) ..................................................................18

                                                        -vi-
SP-#6737091-v1-Vaquillas_Brief_of_Appellee.docx
Bruce M. Kramer, Oil and Gas Leases and Pooling: A Look Back and a
      Peek Ahead, 45 Tex. Tech. L. Rev. 877 (2013) ............................................10

William Shakespeare, The Merchant of Venice, act III, scene 5 (circa 1598).........14




                                                  -vii-
SP-#6737091-v1-Vaquillas_Brief_of_Appellee.docx
                                       STATEMENT OF THE CASE

Nature of the Case                                     Suit by oil-and-gas lessor for damages,
                                                       specific performance, and other relief, al-
                                                       leging lessee’s incomplete compliance
                                                       with its obligation to release unused lease-
                                                       hold acreage following termination of a
                                                       continuous-drilling period
Course of Proceedings                                  Cross-motions for summary judgment re-
                                                       garding the scope of the defendant’s obli-
                                                       gation to release acreage
Trial Court                                            406th District Court, Webb County
                                                       Hon. Oscar J. Hale, Jr., presiding
Trial Court Disposition                                Plaintiff’s motion for partial summary
                                                       judgment granted (CR 420); defendant’s
                                                       motion for summary judgment denied
                                                       (id.); permissive interlocutory appeal
                                                       granted (CR 433-35) (Appendix 1)1


                                                  ISSUE PRESENTED

       Did the trial court correctly grant summary judgment that Conoco breached
its obligation under the Leases by failing to release all acreage in excess of 40
acres for each producing and shut-in natural gas well capable of producing in pay-
ing quantities?




1
 Record citations will be in the form (CR xx), indicating page xx of the Clerk’s Record. Where
an item appears in the appendix to this brief, that fact will be indicated by the notation “(Appen-
dix aa),” where aa refers to the appropriate numbered tab in the appendix.



                                                       -viii-
SP-#6737091-v1-Vaquillas_Brief_of_Appellee.docx
                                          STATEMENT OF FACTS


          The Leases. This case concerns two oil-and-gas leases (“the Leases”), each

of which contains a retained-acreage clause requiring the lessee to release the acre-

age it chooses not to timely develop; the clauses are identically worded in material

respects.

          The first lease, dated June 15, 1974, and amended on November 1, 1987,

covered 26,622.79 acres of land in Webb County. (CR 276-82 (original lease); CR

283-301 (Appendix 2) (amended lease)). (The amended lease will be referred to as

“the 26,622.79-acre Lease”). Paragraph 18 of the amended lease required the les-

see to release undeveloped acreage three years hence:

          On November 1, 1990, Lessee covenants and agrees to execute and
          deliver to Lessor a written release of any and all portions of this lease
          which have not been drilled to a density of at least 40 acres for each
          producing oil well and 640 acres for each producing or shut-in gas
          well, except that in case any rule adopted by the Railroad Commission
          of Texas or other regulating authority for any field on this lease pro-
          vides for a spacing or proration establishing different units of acreage
          per well, then such established different units shall be held under this
          lease by such production, in lieu of the 40 and 640-acre units above
          mentioned … .

(CR 286-87 (¶ 18)).2 In the event of ongoing drilling or reworking operations as of



2
 The paragraph further provided that “[e]ach retained unit shall contain at least one (1) well pro-
ducing or capable of producing oil or gas in paying quantities, and the acreage within a unit shall
be contiguous.” (CR 287).




SP-#6737091-v1-Vaquillas_Brief_of_Appellee.docx
the 1990 date, however, a proviso postponed the release obligation until ninety

days after the cessation of good-faith continuous drilling on the leasehold property.

(CR 287 (¶ 18)).

          The second lease, dated November 1, 1987, covered 6,740 acres in Webb

County. (CR 302-23) (Appendix 3). It contained a nearly-identical release para-

graph, triggered at the end of the primary term (November 1, 1990) or ninety days

after the cessation of good-faith continuous drilling. (CR 305-06 (¶ 18)).

          For material purposes, Appellee Vaquillas Unproven Minerals, Ltd., is the

lessor under the Leases (CR 273-74 (¶ 3)), and Appellant ConocoPhillips Compa-

ny (“Conoco”) is the lessee under the Leases.

          The Field Rules. Because the statewide general rules for oil and gas devel-

opment adopted by the Railroad Commission “cannot adequately address the wide-

ly varying conditions found in the thousands of oil and gas reservoirs in Texas, the

Commission may issue orders with detailed regulations for a specific field, which

the Commission calls field rules.” Railroad Commission v. WBD Oil & Gas Co.,

104 S.W.3d 69, 70 (Tex. 2003).

          On February 24, 1998, the Railroad Commission, at Conoco’s request,

adopted field rules for the Vaquillas Ranch (Lobo Cons.) Field, which included the

two Vaquillas leaseholds. (CR 245-48). Rule 2 of the field rules established spac-

ing requirements for gas wells:


                                                  -2-
SP-#6737091-v1-Vaquillas_Brief_of_Appellee.docx
          No gas well shall hereafter be drilled nearer than FOUR HUNDRED
          SIXTY SEVEN (467) feet to any property line, lease line or subdivi-
          sion line and no well shall be drilled nearer than ONE THOUSAND
          TWO HUNDRED (1,200) feet to any applied for, permitted or com-
          pleted well in the same reservoir on the same lease, pooled unit or
          unitized tract. The aforementioned distances in the above rule are
          minimum distances to allow an operator flexibility in locating a well,
          and the above spacing rule and the other rules to follow are for the
          purpose of permitting only one well to each drilling and proration
          unit.

(CR 247) (provisions for exceptions omitted). As it does when adopting field

rules, the Commission considered the unique characteristics of the specific field

and found that Rule 2 and the other field rules would prevent waste and would pro-

tect correlative rights. (CR 252 (¶ 3)).

          On November 2, 2010, the Railroad Commission amended the field rules,

again at Conoco’s request. (CR 254-55) (Appendix 4). The new Rule 2 is similar

to the old rule, but eliminated the minimum between-well spacing requirement for

wells permitted at least 660 feet from the nearest property line, lease line, or subdi-

vision line. (CR 254). (We will refer to the amended rule as “Field Rule 2.”)

Again, the Commission considered the unique characteristics of the field and found

that the amendment was necessary to prevent waste and protect correlative rights.

(CR 263 (¶ 3)).3



3
    The Commission, through its adoption of special field rules for the field, considered the evi-

                                                             (footnote continued on next page …)

                                                  -3-
SP-#6737091-v1-Vaquillas_Brief_of_Appellee.docx
          The Well Density Rule. The Railroad Commission’s Rule 38 (Appendix

5), entitled “Well Densities,” prescribes well densities by prescribing minimum

acreage requirements per well based on the spacing applicable to the field. 16 Tex.

Admin. Code § 3.38(b); (CR 234, 240). For wells subject to spacing requirements

of 467’ from the property, lease, or subdivision line and 1200’ from adjacent wells,

the required acreage to drill a well is 40 acres. 16 Tex. Admin. Code § 3.38(b)(2),

table entry (6); (CR 234, 240).4

          The Partial Releases. Conoco chose to end its continuous drilling program

on June 21, 2012 (CR 242 (¶ 17)),5 thus triggering its release obligations under the

Leases ninety days later. On February 17, 2014, Conoco executed two partial re-

leases (CR 90-166, 167-79). These releases defined 41 retained tracts on the two


(… footnote continued from previous page)
dence presented and in its expertise concluded that 467-foot lease-line spacing and 1,200 be-
tween-well spacing requirements were the appropriate spacing rule for development in this par-
ticular field. (See CR 247). It makes no difference that this happens to be the same spacing as
that set out in Statewide Rule 37 for fields where the Commission has not considered the evi-
dence and adopted special field rules. This was the spacing adopted for this field, based on the
evidence for this field.
4
  The elimination of the spacing requirement for interior wells via amended Field Rule 2 did not
alter the drilling unit size. Vaquillas produced uncontroverted summary judgment evidence that,
after the amendment, the Railroad Commission continued to require standard drilling units of 40
acres per well (CR 232) and Conoco continued to regard the drilling unit requirement for interior
wells as 40 acres per well (CR 267).
5
  This is the date shown in the record as to the 26,622.79-acre Lease. Conoco acknowledges that
its continuous drilling program as to both Leases ended on or about June 21, 2012. Brief of Ap-
pellant at 7.



                                                  -4-
SP-#6737091-v1-Vaquillas_Brief_of_Appellee.docx
leaseholds, encompassing 208 gas wells, and released the remaining leasehold

acreage. (Id.). Many of the retained tracts were 640 acres in size, although some

were as small as 172.43 acres. (Id.).

          The Litigation. Believing that it was Conoco’s obligation under the Leases

to release all acreage except for 40 acres for each producing or shut-in gas well,

Vaquillas brought this suit, seeking a judgment to that effect, together with specific

performance, damages, and attorneys’ fees. (CR 190-99). Conoco moved for

summary judgment (CR 27-42) and Vaquillas moved for partial summary judg-

ment confirming its interpretation of the Leases (CR 200-29). The trial court, after

a half-day oral hearing, granted Vaquillas’s motion and denied Conoco’s. (CR

420).

          Conoco moved in the trial court for permission to file an interlocutory ap-

peal under Tex. Civ. Prac. & Rem. Code § 51.014(d); Vaquillas did not oppose the

motion. (CR 422-26). The trial court amended its summary judgment order to in-

clude the required statutory findings. (CR 433-35) (Appendix 1). This Court

granted Conoco’s petition to appeal.


                                  SUMMARY OF THE ARGUMENT


          The plain meaning of the retained-acreage clause supports the trial court’s

determination that Conoco was entitled to retain only 40 acres for each producing


                                                  -5-
SP-#6737091-v1-Vaquillas_Brief_of_Appellee.docx
or shut-in gas well. That clause established a default retention of 640 acres for gas

wells, but contained an exception triggered by a field rule providing for a spacing

establishing different units of acreage per well.

          Field Rule 2 was such a rule. It provided for a spacing that established a 40-

acre drilling (spacing) unit. The 40-acre unit was no less “established” because it

was a minimum; minimum-size drilling units, typically linked to spacing require-

ments, are the universal norm in Texas oil and gas regulation, and are the only type

of units that makes sense.

          The 40-acre units established by Field Rule 2’s spacing requirements were

“different units of acreage,” as required by the Leases, because they were “differ-

ent” from the 640 acres specified in the default provision of the retained-acreage

clause.

          Application of the plain language of the clause gives meaning to all Lease

provisions and does not render any provision superfluous. The exception language

controls in lieu of the default retained-acreage provision, but only in those instanc-

es where a field rule has been adopted and provides for a spacing, and that spacing

establishes different units of acreage than 640 acres per well. An exception that

renders a default provision inapplicable under some, or even most, circumstances

does not thereby render the default provision superfluous.

          The pooling clause of the Leases, which allows the operator to pool units up


                                                  -6-
SP-#6737091-v1-Vaquillas_Brief_of_Appellee.docx
to 640 acres, cannot be construed as preventing retained acreage sizes of less than

640 acres per well. To do so would indeed render contractual language (the excep-

tion language in the retained-acreage clause) superfluous.

          The fact that the operation of the exception under the facts of this case al-

lows only 40 acres per well to be retained does not render superfluous the require-

ment that each retained unit contain “at least” one well. That happens only if the

exception language is triggered, and only if the Railroad Commission does not au-

thorize a variance to the standard drilling unit size. As noted, rendering contractual

language sometimes inapplicable does not mean it is rendered superfluous.

          Although the retained acreage sizes for oil and gas wells are different under

the default provision of the retained-acreage clause, there is no reason why that

must necessarily be true when the exception is applied. Again, the default provi-

sion is not rendered superfluous, merely inapplicable under the circumstances.

          The presumption against special limitations on the grant of leasehold rights,

cited by Conoco, is a rule for resolving ambiguities, not for creating them in dero-

gation of the plain language of the lease.

          The trial court’s construction of the retained-acreage clause comports with

their manifest purpose: the lessee is allowed to retain the acreage necessary to sup-

port its existing wells, and the remaining acreage is released to the lessor for de-

velopment.


                                                  -7-
SP-#6737091-v1-Vaquillas_Brief_of_Appellee.docx
                             INTRODUCTION TO THE ARGUMENT


          Oil and Gas Leases. An oil and gas lease is, at its core, a bargain struck by

a landowner, who desires to have the hydrocarbons beneath his land developed,

with another, who has the experience and capability to do so by undertaking the

complex process of drilling and producing those hydrocarbons. 1 Ernest E. Smith

& Jacqueline Lang Weaver, Texas Law of Oil and Gas § 4.1(B) (2014). In order to

have their minerals developed, landowners generally must transfer the rights to ex-

plore, drill, produce, and market the minerals to an oil and gas company with the

skill and financial ability to do so, such as Conoco. Id. The landowner wants the

minerals to be developed and produced; the company wants the opportunity to

make a profit.

          Landowners almost invariably use an oil and gas lease to transfer the rights

to develop and produce the minerals to the oil and gas company. Id. Under such a

lease, the company, in return for the risk it assumes, receives the lion’s share of the

profit derived from production and a generous time period (typically so long as

production is obtained and maintained in paying quantities) within which to con-

tinue operations on the lease.

          Absent an express limitation in the lease, a lessee’s rights under an oil and

gas lease may continue, as to the entire property, for an indefinite period of time.

This is true because leases are typically structured so that if oil or gas in paying

                                                  -8-
SP-#6737091-v1-Vaquillas_Brief_of_Appellee.docx
quantities is found during the lease’s primary term, the oil and gas company’s

rights to operate continue as long as any well is producing oil or gas in paying

quantities on the leased property. Id.

          Retained-Acreage Clauses. Oil and gas leases frequently contain a re-

tained-acreage clause, which provides operators with the choice and flexibility to

develop the acreage to a specified density, or not to do so and have unused acreage

revert to the landowners/lessors. The clause also helps the landowners/lessors en-

sure that their property is fully developed within a reasonable period of time, by

allowing development of reverted acreage by another lessee. 1 Smith & Weaver,

supra, § 5.2(B)(3).6 In specifying the density for development, a retained-acreage

clause sometimes refers to Railroad Commission rules. Id. (citing ConocoPhillips

Co. v. Ramirez, No. 04-05-00488-CV, 2006 Tex. App. LEXIS 5710 (Tex. App. –

San Antonio 2006, no pet.) (mem. op.)).

          Retained-acreage clauses also help a lessor avoid cumbersome and expen-

sive litigation to ensure prudent development. As a leading writer and scholar on

oil and gas law has observed, such clauses “replaced the lessor’s need to utilize the

implied covenant of reasonable development as the sole means to see that its acre-


6
 It is well-established that an oil-and-gas lessor “should not be required to suffer a continuation
of the lease after the expiration of the primary period merely for speculation purposes on the part
of the lessees.” See Garcia v. King, 139 Tex. 578, 164 S.W.2d 509, 513 (1942).



                                                  -9-
SP-#6737091-v1-Vaquillas_Brief_of_Appellee.docx
age is fully developed.” Bruce M. Kramer, Oil and Gas Leases and Pooling: A

Look Back and a Peek Ahead, 45 Tex. Tech. L. Rev. 877, 881 (2013) (footnote

omitted).

          Spacing, Density, and Units Under the Rules. Field rules typically ad-

dress, among other things, spacing requirements. The Railroad Commission’s

spacing requirements typically establish the minimum distance a well may be lo-

cated to the nearest lease line, property line, or subdivision line, and to other wells

on the same lease completed in the same reservoir. See generally 16 Tex. Admin.

Code § 3.37 (statewide spacing rule); Field Rule 2 (spacing rules for the field in

question). These spacing rules are minimum requirements; an oil or gas operator

may space wells farther apart if it chooses.

          Spacing, by its nature, is intertwined with density: the farther apart wells are

spaced, the less densely a particular tract can be developed. Believing that “spac-

ing rules alone do not ensure the orderly development of a field” (CR 269), the

Railroad Commission has also promulgated density requirements; these govern the

number of wells that may be drilled on a given amount of acreage in a reservoir,

and are tied to the applicable spacing requirement. 16 Tex. Admin. Code § 3.38.

          The density requirement prescribes the required size of the “drilling unit” –




                                                  -10-
SP-#6737091-v1-Vaquillas_Brief_of_Appellee.docx
the number of acres the operator must have to drill a well.7 Such units are by their

nature minimum-sized units, because they prescribe the minimum acreage required

to obtain a Railroad Commission permit to drill a well. An operator may always

drill a well with more acreage than the minimum.

                                                    ***

          With this background, we turn to an analysis of the Lease clause in question.


                                                  ARGUMENT


I.        UNDER THE PLAIN MEANING OF THE RETAINED-
          ACREAGE CLAUSE, CONOCO IS OBLIGATED TO RE-
          LEASE ALL ACREAGE EXCEPT FOR 40 ACRES PER WELL.


          Conoco correctly acknowledges that the terms of an oil and gas lease, like

those of any other contract, are to be given “their plain, ordinary, and generally ac-

cepted meaning unless the instrument shows that the parties used them in a tech-

nical or different sense.” Heritage Resources, Inc. v. NationsBank, 939 S.W.2d

118, 121 (Tex. 1996), quoted in Brief of Appellant at 16; accord, e.g., Anadarko

Petroleum Corp. v. Thompson, 94 S.W.3d 550, 554 (Tex. 2002). We therefore

begin with the plain meaning of Paragraph 18 of the Leases.



7
 The “drilling unit” is sometimes referred to as a “spacing unit” or a “development unit.” 2
Smith & Weaver, supra, § 10.1(B)(2).



                                                    -11-
SP-#6737091-v1-Vaquillas_Brief_of_Appellee.docx
          Paragraph 18 sets forth a default provision for release of leasehold acreage

(lands in excess of 40 acres for oil wells and 640 acres for gas wells), but then cre-

ates an exception:

          except that in case any rule adopted by the Railroad Commission of
          Texas or other regulating authority for any field on this lease provides
          for a spacing or proration establishing different units of acreage per
          well, then such established different units shall be held under this
          lease by such production, in lieu of the 40 and 640-acre units above
          mentioned.

(CR 287 (¶ 18), 305-06 (¶ 18)). This case turns on the meaning and application of

the exception.

          Parsing the exception:

          “in case
                             any rule
                                   adopted by
                                          the Railroad Commission of Texas
                                          or other regulating authority
                                   for any field on this lease
                             provides for
                                   a spacing or proration
                                          establishing different units of acreage per
                                           well,
          then
                             such established different units
                             shall be held under this lease by such production,
                                    in lieu of the 40 and 640-acre units above men-
                                     tioned.”

          It is undisputed and indisputable that Rule 2 of the field rules for the

Vaquillas Ranch (Lobo Cons.) Field is a rule adopted by the Railroad Commission


                                                   -12-
SP-#6737091-v1-Vaquillas_Brief_of_Appellee.docx
for the field encompassing the leaseholds. It is likewise undisputed and indisputa-

ble that Field Rule 2 provides for spacing for gas wells. Unfortunately, here the

absence of dispute ends.


          A.        It Is the Spacing or Proration Provided by the Field Rule,
                    Not Necessarily the Text of the Field Rule Itself, that Must
                    Establish Units of Acreage Per Well.


          Conoco has argued from time to time that Field Rule 2 provides only for

well spacing, not well density, and that accordingly the exception in the retained-

acreage clause has not been triggered.8 But this argument mistakes the language of

the exception: it does not require that the text of the field rule by itself establish dif-

ferent units of acreage per well, but only that the field rule provide for “a spacing

or proration” that in turn establishes different units of acreage per well. Field Rule

2 provides for a spacing,9 and that spacing in turn establishes units of acreage per

well through the operation of Rule 38. And so the terms of the exception are satis-

fied even though the drilling unit density does not appear in the field rule itself.




8
 See, for example, Brief of Appellant at 8 (“The Field Rules do not ‘establish’ any mandatory
units of acreage per well”).
9
 Conoco is correct that proration, which is the subject of Field Rule 3, is not at issue in this case.
See Brief of Appellant at 9.



                                                  -13-
SP-#6737091-v1-Vaquillas_Brief_of_Appellee.docx
          B.        The Spacing Provided by Field Rule 2 “Establishes” Units
                    of Acreage per Well.


          Conoco’s primary argument in this Court is that the spacing provided by

Field Rule 2 “establishes” no units of acreage whatsoever. See Brief of Appellant

at 12, 17-18. It says that to “establish” means (according to dictionaries) “to settle,

make, or fix firmly,” which, it implies, happens only when a single inflexible result

is mandated. Id. at 17. Thus, according to Conoco, the spacing requirement would

“establish” units of acreage only if, like Shylock’s bond,10 Rule 38 (through which

Field Rule 2 operates to establish density) prescribed fixed units of acreage that

could not be varied in either direction by the operator.

          But this argument ignores the reality, history, and purpose of oil and gas

regulation. The goal of both spacing requirements and well-density requirements

is to allow effective and efficient development of minerals while preventing waste

and injury to correlative rights caused by excessively dense drilling. Thus the


10
     “Therefore prepare thee to cut off the flesh.
      Shed thou no blood, nor cut thou less nor more
      But just a pound of flesh: if thou cut’st more
      Or less than a just pound, be it but so much
      As makes it light or heavy in the substance,
      Or the division of the twentieth part
      Of one poor scruple, nay, if the scale do turn
      But in the estimation of a hair,
      Thou diest and all thy goods are confiscate.”

William Shakespeare, The Merchant of Venice, act III, scene 5 (circa 1598).



                                                  -14-
SP-#6737091-v1-Vaquillas_Brief_of_Appellee.docx
Railroad Commission establishes spacing requirements that by their very nature

are minimums. And as noted above, spacing is closely linked with density, be-

cause wells spaced farther apart are necessarily less dense and vice versa. Thus it

is no surprise that Rule 38, like every other density rule in Texas, prescribes drill-

ing units that are minimums, linked to spacing requirements that are likewise min-

imums.

          The exception language in Paragraph 18 is triggered by field-specific prora-

tion rules as well as field-specific spacing rules, and Conoco’s argument is also in-

consistent with Commission practice relating to proration units. Just as density

rules always prescribe minimums, prescribed proration unit sizes are always max-

imums; an operator can assign fewer acres to a proration unit. 16 Tex. Admin.

Code § 3.31(c)(1). If Conoco were correct that the unit standard cannot be estab-

lished unless it is fixed and invariable, this would render of no effect the language

in the Leases providing for retained acreage other than 640 acres in the event of a

field-specific proration rule establishing different-sized units.

          Conoco’s Shylockian interpretation, whereby the exception applies only

when the Commission establishes a precise and invariable drilling-unit size, would

deprive the exception of any meaning, because the Commission never does that




                                                  -15-
SP-#6737091-v1-Vaquillas_Brief_of_Appellee.docx
and it would make no sense for the Commission ever to do that.11 It would thereby

violate the interpretive presumption “that the parties to a contract intend every

clause to have some effect.” See Heritage, 939 S.W.2d at 121. It would also vio-

late the maxim that contracts are to be construed in light of the circumstances sur-

rounding their formation. See, e.g., Columbia Gas Transmission Corp. v. New Ulm

Gas, Ltd., 940 S.W.2d 587, 591 (Tex. 1996).

          The Paragraph 18 exception requires only that the spacing imposed under

Field Rule 2 establish “units of acreage per well.” The spacing, operating through

Rule 38, does indeed establish units of acreage per well, in the only way drilling

units are ever established in Texas. See 16 Tex. Admin. Code § 3.38(b)(2)(A)

(prescribing the “standard drilling unit”). It “settles” and “makes” those units,

“fixing” them “firmly.” That they are minimums does not make them any less es-

tablished.

          Conoco relies on Jones v. Killingsworth, 403 S.W.2d 325 (Tex. 1965), but

that case undercuts Conoco’s position rather than supporting it. Jones involved a

lessee’s attempt to create a 160-acre pooled unit for oil rather than an 80-acre unit,

which the lessor believed to be the maximum size allowed under the pooling clause



11
  A fixed drilling unit size would lead to absurd results, such as the denial of a drilling permit to
an operator with a 45-acre tract because the established density is 40 acres.



                                                  -16-
SP-#6737091-v1-Vaquillas_Brief_of_Appellee.docx
of the parties’ lease. Similar to the retained-acreage clause in this case, the pooling

provision in Jones created an exception to the default maximum pooled-unit size

when a different one was prescribed by a governmental authority:

          Units pooled for oil hereunder shall not substantially exceed 40 acres
          each plus a tolerance of 10% thereof, provided that should govern-
          mental authority having jurisdiction prescribe or permit the creation
          of units larger than those specified, units thereafter created may con-
          form substantially in size with those prescribed by governmental reg-
          ulations.

Id. at 327 (emphasis added).

          The lessee in Jones argued that applicable Railroad Commission rules,

which prescribed oil proration units of not less than 80 acres but permitted units up

to 160 acres, triggered the exception clause and allowed pooled units not substan-

tially exceeding 160 acres. Id. at 327. The Supreme Court disagreed, noting that

the exception enlarged the pooled-unit limit only to allow units to conform to “pre-

scribed” units, not to “permitted” units. It stated firmly that “[t]he Commission

prescribed a unit of 80 acres,” in spite of the fact that “there may be larger units of

not more than 160 acres.” Id. at 328 (emphasis in original).

          The lessons of Jones are twofold. When a lease references the size of units

prescribed by the Railroad Commission, that size controls, not some other size that

is merely permitted. And units are no less “prescribed” because other units are

permitted.

          That matches the language of Rule 38:

                                                  -17-
SP-#6737091-v1-Vaquillas_Brief_of_Appellee.docx
          The standard drilling unit for all oil, gas, and geothermal resource
          fields wherein only spacing rules ... are applicable is hereby pre-
          scribed to be the following.

          Spacing Rule                                   Acreage Requirement

                                                  ***

          (6) 467 – 1200                                         40

16 Tex. Admin. Code § 3.38(b)(2)(A), table entry (6) (emphasis supplied).

          “Prescribe,” means “[t]o dictate, ordain, or direct; to establish authoritatively

(as a rule or guideline),” Black’s Law Dictionary 1373 (10th ed. 2014) (emphasis

added), and thus has an equivalent meaning to “establish.” And so had Conoco

advanced its Shylockian theory in Jones, it would have been arguing a position

neither litigant there had the temerity to argue – that nothing had been “pre-

scribed,” and that the pooling limit under the lease therefore remained at 40 acres

in the absence of a Railroad Commission rule or order creating an inflexible prora-

tion or drilling unit size. By holding that the field rule prescribed a unit of 80

acres, the Jones Court rejected Conoco’s theory that the Railroad Commission’s

specification of the unit size as a minimum is no specification at all.


          C.        The Units Established by Field Rule 2’s Spacing Require-
                    ments Are “Different Units” Because They Are Different
                    from 640 Acres.


          Conoco notes that “[Field] Rule 2 provides no different spacing from the


                                                  -18-
SP-#6737091-v1-Vaquillas_Brief_of_Appellee.docx
Statewide Rules applicable before field rules were adopted for this field.” Brief of

Appellant at 9. It thereby insinuates that only a field rule that imposes spacing re-

quirements different from prior spacing requirements, or from the statewide spac-

ing requirements of Rule 37, triggers the exception clause in Paragraph 18. (Else-

where, however, Conoco admits that “before [the exception] comes into play, the

Commission must ‘establish’ units of a different size than 640 acres.” Brief of

Appellant at 18 n.4 (emphasis supplied).)

          The language of Paragraph 18, viewed in its entirety,12 makes crystal clear

what the “established different units” must be “different” from. Having just lim-

ited the lessee’s retained acreage to “40 acres for each producing oil well and 640

acres for each producing or shut-in gas well,” the paragraph then created an excep-

tion “in case any rule … provides for a spacing or proration establishing different

units of acreage per well.” The “different units” are thus units different from 40

acres for oil wells or 640 acres for gas wells. And if there were any lingering

doubt, it would be resolved by the language that appears next: the “different units”

are to be held by production “in lieu of the 40 and 640-acre units above men-

tioned.”


12
   In construing an oil and gas lease, one must “examine the entire document and consider each
part with every other part so that the effect and meaning of one part on any other part may be de-
termined.” Heritage, 939 S.W.2d at 121.



                                                  -19-
SP-#6737091-v1-Vaquillas_Brief_of_Appellee.docx
                                                  ***

          In summary, then, the plain-meaning rule supplies the outcome of this case:

                   Field Rule 2 is a rule adopted by the Railroad Commission;

                   it is a rule for the field encompassing the leaseholds;

                   it provides for a spacing;

                   the spacing establishes drilling units of 40 acres per well;

                   that is different from the 640-acre gas well density applicable
                    under the default provision of Paragraph 18; and so

                   such established different units (40 acres per well)

                   are held under the Leases in lieu of the 640-acre units.

In short, the trial court got it right.


II.       OTHER RULES OF CONSTRUCTION DO NOT PERMIT OR
          REQUIRE THE COURT TO DISREGARD THE PLAIN MEAN-
          ING OF THE RETAINED-ACREAGE CLAUSE.


          Unable to prevail under the plain-meaning rule, Conoco offers various rea-

sons why its construction of the retained-acreage clause should nevertheless pre-

vail. None has merit.


          A.        The Rule Against Surplusage Does Not Change the Result.


          Conoco invokes the well-known rule that a contract should be interpreted so

that none of its provisions is thereby rendered superfluous. Brief of Appellant at


                                                  -20-
SP-#6737091-v1-Vaquillas_Brief_of_Appellee.docx
27, citing, e.g., Springer Ranch, Ltd. v. Jones, 421 S.W.3d 273, 279 (Tex. App. –

San Antonio 2013, no pet.). But Conoco misconceives the rule.

          The rule is that “no part of an instrument is to be rejected altogether except

as rather a last resort.” McBride v. Hutson, 157 Tex. 632, 306 S.W.2d 888, 894

(1957) (emphasis added); see Universal CIT Credit Corp. v. Daniel, 150 Tex. 513,

243 S.W.2d 154, 158 (1951) (declining to adopt construction that would read pro-

visions out of contract “entirely”). That a particular contractual provision over-

rides another provision under some, or even most, circumstances does not render

the overridden provision surplusage; it merely exemplifies the ordinary, everyday

interplay of contractual provisions. Only where a particular construction deprives

a provision of all possible applicability is the rule triggered. That is not the case

here.


                    1.        That Any Drilling Unit Established as a Result of
                              Field-Rule Spacing Would Likely Be Less Than 640
                              Acres Does Not Create Surplusage.


          Conoco speculates, with no basis, that it is “likely” that a field-rule spacing

requirement would establish a minimum drilling unit less than 640 acres (as to gas

wells), thereby causing the exception in Paragraph 18 to swallow the default re-

tained-acreage language of that paragraph if minimum drilling units qualify as “es-

tablished different units.” Brief of Appellant at 12, 19-20. But an exception al-


                                                  -21-
SP-#6737091-v1-Vaquillas_Brief_of_Appellee.docx
ways swallows the general rule in the particular circumstances where the exception

applies – that is its intended function. For Conoco’s argument to be valid, the ex-

ception would have to swallow the default provision in all, or at least virtually all,

cases, regardless of circumstances.

          That is not true here, as this Court’s decision in ConocoPhillips Co. v.

Ramirez, No. 04-05-00488-CV, 2006 Tex. App. LEXIS 5710 (Tex. App. – San

Antonio 2006, no pet.) (mem. op.), illustrates. There, the retained-acreage clause

was similarly worded to Paragraph 18 here, but there was a critical difference from

this case: there was no field-specific rule providing for a spacing requirement.

This Court declined to treat statewide Rule 37 as an adopted rule for the field, and

accordingly ruled for the lessee. Id. at *6-7. One reason for the Court’s decision

in Ramirez was that treating Rule 37 as a rule for the field would leave the default

retained-acreage language of the lease literally no room in which to operate. Id. at

*8-9.

          Ramirez thus demonstrates that the exception will override the default provi-

sion only in those cases such as the present, where a formally-adopted rule for the

field provides for a spacing that establishes a unit of acreage less than 640 acres.

Allowing one provision (the exception) to trump another (the default provision) in

every instance would, as Ramirez recognized, render the latter provision surplus-

age; allowing the exception to control in a finite set of circumstances (field-rule


                                                  -22-
SP-#6737091-v1-Vaquillas_Brief_of_Appellee.docx
spacing that establishes a drilling unit different from 640 acres) does not.


                    2.        The 640-Acre Pooling Authorization Is Not Rendered
                              Surplusage.


          Conoco contends that establishment of a retained unit size of less than 640

acres would interfere with its right under the Leases to pool up to 640 acres for gas

wells. Brief of Appellant at 12-13, 18, 24-26. This is not correct, and is a classic

example of an argument that “proves too much.” For it would apply no matter

how clearly a field rule provided for a spacing establishing different units of acre-

age; in short, it would render the exception clause under paragraph 18 nugatory

under all circumstances. That, as Conoco points out elsewhere, is a construction to

be avoided under Texas law.13

          At the end of the day, there is no need for this Court to attempt to resolve a

speculative issue about the potential interaction between the pooling clause and the

retained-acreage clause, and what might result if pooled acreage were released un-




13
   Indeed, if Conoco were correct that a difference between the retained acreage size under the
retained-acreage clause and the allowable unit size under the pooling clause would render the
latter nugatory, that would also be the case even if the lessee were to retain the default 640 acres.
This is because the pooling clause allows pooled units up to 704 acres in size (640 acres plus
10%), while the default retained-acreage provision allows for only 640 acres, and not one acre
more. In any event, Conoco has not argued that it actually formed any pooled units under the
pooling clause, and presented no evidence to that effect.



                                                  -23-
SP-#6737091-v1-Vaquillas_Brief_of_Appellee.docx
der the latter clause. That is not this case and can await another day.14


                    3.        The Requirement That Each Retained Unit Contain
                              “At Least” One Well Is Not Rendered Surplusage.


          The retained-acreage clause states that “[e]ach retained unit shall contain at

least one (1) well producing or capable of producing oil or gas in paying quantities,

and the acreage within a unit shall be contiguous.” (CR 287 (¶ 18), 306 (¶ 18)).

Conoco argues that retained unit sizes cannot be governed by drilling unit sizes,

because a retained unit could never contain more than one well and so the “at

least” language would be rendered superfluous. Brief of Appellant at 25-26.

          Here again, Conoco confuses permissible superfluity under some circum-

stances with the categorical superfluity that the rules of construction attempt to

avoid. If a field rule is adopted, and if the field rule provides for spacing, and if

that spacing establishes drilling units, and if the field rule does not provide for op-

tional units,15 then, generally speaking, a retained unit would not have more than



14
   Wagner & Brown, Ltd. v. Sheppard, 282 S.W.3d 419 (Tex. 2008), although not a retained-
acreage case, suggests how the issue should come out. There, the Court held that, under the
terms of the particular lease in question, the pooled unit survived the loss of the lease, with the
lessor succeeding to the lessee’s rights and obligations with respect to the unit.
15
   Optional units allow for drilling at a greater density than the “standard” or “prescribed” drill-
ing unit. For instance, a field rule that provided for 40-acre units, with optional 20-acre units,
would allow two wells to be drilled on each 40-acre retained tract. See generally, e.g., Unit Pe-
troleum Co. v. David Pond Well Service, Inc., 439 S.W.3d 389, 395 n.6 (Tex. App. – Amarillo

                                                              (footnote continued on next page …)

                                                  -24-
SP-#6737091-v1-Vaquillas_Brief_of_Appellee.docx
one well. But if any of those things is not true, then a multi-well retained unit is a

possibility. The anti-superfluity rule requires no more than this.

          Moreover, Conoco’s argument ignores the possibility of the operator’s ob-

taining density exceptions to allow additional wells to be drilled to a greater densi-

ty. 16 Tex. Admin. Code § 3.38(f) authorizes the Railroad Commission to grant

exceptions to the Rule 38 well density requirements in order to prevent waste or to

prevent the confiscation of property. Field Rule 2 provides likewise. (CR 254-55).

In the case of such an exception, a retained unit might contain more than one well.


                    4.        That a Particular Field-Rule Spacing Establishes the
                              Drilling Unit for Gas Wells at the Same Acreage as
                              the Drilling Unit for Oil Wells Does Not Create Sur-
                              plusage.


          Conoco also argues that treating Field Rule 2 as providing for spacing that

establishes a 40-acre drilling unit for gas wells would be anomalous, because the

gas-well retained acreage would then equal the default oil-well retained acreage.

Brief of Appellant at 13, 26. But the fact that the default provision of the retained-

acreage clause specified different retained acreages for oil wells and for gas wells

does not mean that the acreages must continue to be different once the exception is


(… footnote continued from previous page)
2014, pet. filed).



                                                  -25-
SP-#6737091-v1-Vaquillas_Brief_of_Appellee.docx
applied. Conoco posits no reason why the two acreage numbers must necessarily

be different. And, as mentioned, the fact that the effect of Field Rule 2 is to make

the drilling units the same for oil and for gas does not render superfluous the de-

fault provision with the two different numbers – it merely renders the default pro-

vision inapplicable under the circumstances.


          B.        The Rule Regarding Special Limitations on a Grant of
                    Leasehold Rights Has No Application Here.


          Conoco argues that construing the spacing provided for by Field Rule 2 as

establishing “different [40-acre] units of acreage” would violate “the established

rule of Texas law that ‘we will not hold the lease’s language to impose a special

limitation on the grant unless the language is so clear, precise, and unequivocal that

we can reasonably give it no other meaning.’” Brief of Appellant at 13, citing

Anadarko Petroleum Corp. v. Thompson, 94 S.W.3d 550, 554 (Tex. 2002); see

Brief of Appellant at 27-31.

          It fails to recognize, however, that this rule has no practical effect in the con-

struction of an unambiguous contract. If contractual language is so unclear, impre-

cise, or equivocal that a court can reasonably give it two different meanings (one

imposing a special limitation and the other not doing so), then the contract is am-

biguous. Yet Conoco correctly concedes that the Leases are unambiguous. Brief

of Appellant at 16.

                                                  -26-
SP-#6737091-v1-Vaquillas_Brief_of_Appellee.docx
          In Endeavor Energy Resources, L.P. v. Discovery Operating, Inc., 448

S.W.3d 169 (Tex. App. – Eastland 2014, pet. filed), an oil and gas lease contained

an automatic termination clause, triggered by the end of continuous development,

applicable to all acreage not assigned to a proration unit containing the number of

acres required to obtain the maximum producing allowable. The applicable field

rule specified proration units of 80 acres, but allowed the operator to allocate up to

80 additional unassigned acres to each unit. The operator in question had exer-

cised this right as to some wells but not others; it contended that it was allowed to

retain acreage that it could have assigned to proration units but did not.

          Although the court held that the termination clause was a special limitation

on the grant, it nevertheless rejected the lessee’s contention that it was allowed to

retain 160 acres per well. The court held instead that the lease unambiguously lim-

ited the retained acreage to lands actually assigned by the operator to a proration

unit. 448 S.W.3d at 175-78. It distinguished Chesapeake Exploration, L.L.C. v.

Energen Resources Corp., 445 S.W.3d 878 (Tex. App. – El Paso 2014, no pet.),

relied on by Conoco here, noting that that case had applied the plain language of an

unambiguous special limitation just as the Endeavor court was doing. 448 S.W.3d

at 178-79.

          In short, the rule on which Conoco relies is a rule for resolving ambiguities,

not a rule allowing unambiguous contractual language to be construed against its


                                                  -27-
SP-#6737091-v1-Vaquillas_Brief_of_Appellee.docx
plain meaning.


III.      THE MANIFEST PURPOSE OF THE RETAINED-ACREAGE
          CLAUSE IS SERVED BY THE TRIAL COURT’S CONSTRUC-
          TION.


          Stepping back for a moment from the details of the retained-acreage clause

and the field rule and statewide rules, one can see that the manifest purpose of the

retained-acreage clause is served by linking the lessee’s release obligation to the

minimum drilling units established by the Railroad Commission. Doing so pro-

vides a standard for the appropriate density of development, and for the release of

acreage that is not developed to that standard. And doing so helps the lessor avoid

having to pursue a claim for breach of the implied covenant of reasonable devel-

opment.

          Absent the clause, a single well on each leasehold would have sufficed to

hold the entire 33,362.79 acres, even if the lessee had no intention of ever drilling

further wells on the property. The default provision of the clause prevented this

result, by requiring the release of all acreage in excess of specified acreage pre-

sumptively necessary to support existing wells.

          But the clause included an exception that acknowledged the possibility that

the Railroad Commission might make a field-specific spacing determination lead-

ing to a minimum drilling unit smaller than (or, conceivably, larger than) the acre-


                                                  -28-
SP-#6737091-v1-Vaquillas_Brief_of_Appellee.docx
age specified in the default provision. It directed the lessee, in that event, to con-

form its release to the modified drilling unit size. The manifest purpose of the ex-

ception is to protect the lessee, by allowing it to retain the acreage necessary to

support its wells and relieving it of further development obligations, but also to

protect the lessor, by allowing acreage not necessary to support the lessee’s wells

to revert and to be developed by the lessor or a new lessee. Acreage that has not

been developed and remains mere scenery cannot be retained.

          That is what the trial court’s judgment does here. Of the 33,362.79 acres

covered by the Leases, Conoco has attempted to retain 23,671.63 acres. (CR 90-

166, 167-79). Under Field Rule 2 and Rule 38, it needs 8,320 acres to support its

208 wells. It has chosen not to develop the remaining 15,351.63 acres, yet seeks to

hoard that acreage and prevent Vaquillas from developing it. The exception lan-

guage in Paragraph 18 was crafted to prevent this result, and was properly applied

to do so.


                                                  PRAYER


          Appellee Vaquillas Unproven Minerals, Ltd., respectfully prays: (1) that the

judgment of the trial court be affirmed; (2) that it recover its costs in this Court;

and (3) for such other and further relief to which it may be entitled at law or in eq-

uity.


                                                   -29-
SP-#6737091-v1-Vaquillas_Brief_of_Appellee.docx
GREGG OWENS                                        Respectfully submitted,
State Bar No. 15383500
JOHN R. HAYS, JR.
State Bar No. 09303300                             /s/ P. Michael Jung
ALICIA R. RINGUET                                  P. MICHAEL JUNG
State Bar No. 24074958                             State Bar No. 11054600

Hays & Owens L.L.P.                                Strasburger & Price, LLP
807 Brazos Street, Suite 500                       4400 Bank of America Plaza
Austin, Texas 78701                                901 Main Street
(512) 472-3993                                     Dallas, Texas 75202
(512) 472-3883 (telecopy)                          (214) 651-4300
gregg.owens@haysowens.com                          (214) 659-4022 (telecopy)
john.hays@haysowens.com                            michael.jung@strasburger.com

RAUL LEAL                                          ARMANDO X. LOPEZ
State Bar No. 24032657                             State Bar No. 12562400

Raul Leal Incorporated                             Armando Lopez, Attorney at Law
5810 San Bernardo, Suite 390                       1510 Calle Del Norte, Suite 16
Laredo, Texas 78041                                Laredo, Texas 78041
(956) 727-0039                                     (956) 726-0722
(956) 727-0369 (telecopy)                          (956) 726-6049 (telecopy)
rleal@rl-lawfirm.com                               mandox@rio.bravo.net

                                       ATTORNEYS FOR APPELLEE


                                       CERTIFICATE OF SERVICE


          I hereby certify that this Brief of Appellee has been served on the appellant

by electronic service on Michael V. Powell, Esq., Attorney for Appellant Cono-

coPhillips Company; and Adolfo Campero, Esq., Attorney for Appellant Cono-

coPhillips Company; both on this 29th day of May, 2015.



                                                  -30-
SP-#6737091-v1-Vaquillas_Brief_of_Appellee.docx
                                                   /s/ P. Michael Jung
                                                   P. MICHAEL JUNG

                                  CERTIFICATE OF COMPLIANCE


          This brief complies with Tex. R. App. P. 9.4(i)(2)(B), because the brief con-

tains 6,781 words, excluding the parts of the brief exempted by Tex. R. App. P.

9.4(i)(1).


                                                   /s/ P. Michael Jung
                                                   P. MICHAEL JUNG




                                                  -31-
SP-#6737091-v1-Vaquillas_Brief_of_Appellee.docx
                                            Appendix




SP-#6737091-v1-Vaquillas_Brief_of_Appellee.docx
    :;


                                       CAUSE NO. 2014CVQ000438 D4

         VAQUILLAS UNPROVEN MINERALS,                    §       IN THE DISTRICT COURT
         LTD,                                            §
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                Plaintiff,                               §                                         en
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         v.                                              §       WEBB COUNTY, T"""JU:>             N         - -< '"
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         CONOCOPHILLIPS COMPANY,                         §                                         -U
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                AMENDED ORDER ON CROSS-MOTIONS FOR SUMMARY JU                                                              ..
                                                                                                                           ~




                On October 30,2014, Defendant's Motion for Summary Judgment and lai tiffs Cross-

         Motion for Partial Summary Judgment were heard. The Court, having reviewed the motion,

         briefs, responses, competent summary judgment evidence, and argument of counsel, rules on
"




         these motions as follows.

                IT IS ORDERED, ADJUDGED, AND DECREED that Defendant's Motion for

         Summary Judgment is DENIED.

                IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Plaintiffs Cross-

         Motion for Partial Summary Judgment is GRANTED. The Court DECLARES that Defendant

         has breached the 26,622.79-acre Lease and the 6,740-acre Lease by failing to release all acreage

         in excess of 40 acres for each producing and shut-in natural gas well capable of producing in

         paying quantities.

                This Order of the Court decides the central question in this case, which is the number of

         acres under two oil and gas leases that Defendant ConocoPhillips Company retains under the

         "retained acreage" clauses of the leases at the conclusion of ConocoPhillips' continuous drilling

         operations. The Court finds that the question decided by this order is a controlling question of



         AMENDED ORDER ON CROSS-MOTIONS FOR SUMMARY JUDGMENT                                      PAGEl



                                                                                                           433
         law as to which there is a substantial ground for difference of opinion. The Court also fmds that

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         immediate appeal of the order will materially advance the ultimate termination of this litigation.

                This Court's Order, and the underlying controlling question of law, involve the parties'

         competing legal interpretations of the language of the "retained acreage" clauses and certain

         Field Rules adopted by the Railroad Commission of Texas. Although the Court has ruled in

         favor of the Plaintiff lessor, Vaquillas Unproven Minerals, Ltd., the Court concludes there are

         substantial grounds for difference of opinion regarding whether the leases allow ConocoPhillips

         to retain 40 acres per well, as Plaintiff contends, or 640 acres, as ConocoPhillips contends.

                An immediate appeal from this Court's Order will materially advance the final

         conclusion of litigation. Plaintiff seeks judgment ordering ConocoPhillips to execute releases of

         over 15,000 acres described in the leases, as well as possible direct and consequential damages

         flowing from ConocoPhillips' alleged breach of the "retained acreage" clauses of the leases. If

         ConocoPhillips is forced to release the acreage but later wins an appeal determining that

         ConocoPhillips' original interpretation is correct, significant problems could develop. On the

.;       other hand, the lessor, Vaquillas Unproven Minerals, Ltd. is interested in having the release of
.,:]
         acreage as soon as possible.        Furthermore, the Court and the parties anticipate that a

         determination of Plaintiffs damages, if any, will be costly and time-consuming.

                ConocoPhillips desires to take an interlocutory appeal. The Court rules that such appeal

         shall be defined by the lease interpretation question addressed in the parties' cross-motions for

         summary judgment.      More specifically, the question is whether the leases' retained acreage

         clause allows ConocoPhillips Company to retain only 40 acres per each producing or shut-in gas

         well it has drilled on the two leases, or whether ConocoPhillips is allowed to retain 640 acres

         (Plus I 0% tolerance) for each wells.



         AMENDED ORDER ON CROSS-MOTIONS FOR SUMMARY JUDGMENT                                         PAGE 2



                                                                                                              434
               IT IS HEREBY ORDERED that, pursuant to Texas Civil Practice & Remedies Code §

      51.014(d) (West. Supp. 2014) an interlocutory appeal is ALLOWED from this Order.

               IT IS FURTHER ORDERED that trial of this action is stayed pending the interlocutory

,j    appeal. The Court's Pre-Trial Guideline Order and Scheduling Order are hereby VACATED.
-:1

      The parties may proceed with discovery and pretrial proceedings by agreement or with leave of

      Court.

      SIGNED this   4-        day Of9"'=".jI.tAA-..,=="T\------' 2015.

                                                       ( )~,,~
                                                    Ho1:"Oscar 1. Hale, Jr.
                                                    Judge Presiding




      AMENDED ORDER ON CROSS-MOTIONS FOR SUMMARY JUDGMENT                                  PAGE 3



                                                                                                  435
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             P'i>du~tn U {'"''                                                                                             ?O,~lnllnll ~ SI'lionlr, Co •• 1l0UI\0~. T'~II
                  uo ACAI PoOUnr- Pr:ovilion                                        _,           I
~!,    "                      OIL, GAS AND Mliu(RAL LEASE AMENDING OIL', GAS AND''ntNERAL.
                  LEASE DATED JUNE 15, 1974 (AS AMENDED) BETWEEN LESSOR-AND LESSEE HEREIN




                  26,622.79-acres of land, more or less, situated'in Webb County. Texas more
                  fully described in Exhibit "A" attacli"ed"'he'reto and made a part of this Lease
                  for all relevant purposes. including limitations upon warranty as specifically
                  set out therei~.




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            .. _.. ___ ._____ ;-_....Crl ••. ,,:b,llo.r It IdlU-l': ~Prl'" mort or:,I~... .                          .five
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            and ~.rl?' ll1'''1!~r ,II oil. I"U or     oUl_V  ~ln.~I.h.ll~oaod. frolll .,.11 II, nd or lan.d w1!ll'lllJJclI ..Id lind II ~tocl 1I ... un41'.

            _.11. or '" tllt ,roo:Ilt ot r...10~ I..", Ult plpotU"",lo .. lIle" t.b. _Ira lal,. lot unnHLN I    Lt._
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                                                                                                             1111,. fro.r.a tll'lt 10 LIlli' pardi ... In,. fO,..II., 011 III Ito
            PO ...... /Oll. flo,.lnl·th,·nnr"t Price thltlto,"'Il..hllhi ·-tor tho n,rd _h_ro' roducocl on' lb, dat,·ot·pUrch ..u       (tI)         I 1.11.        •   f'       I




                                                                                                                                                                                            EXHIBIT
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STATt 0,._ _ ._._. _ _ _ _ _ _ _ _' ___ }                    TEXAS lOINT ACKNOWLEOCMENT
COUNTY OF_ _ _ •_ _ _ _ _ _ _ _
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".

                           ADDENDUM TO AMENDED OIL AND GAS LEASE
                            From Vagui11as Ranch Co., Ltd. et a1
                           To Conoco Inc., Oated November 1, 1987




          12.      Should Lessee be prevented from complying with covenants of this
     lease by reason of conditions or acts set forth in Paragraph '11' hereof,
     then Lessee agrees annually to pay to Lessor an amount equal to the delay
     rentals herein provided for during such period of prevention, whether same
     be during or subsequent to the primary term, and such payment shall be made
     at the end of each year of prevention either to Lessor or to the depository
     above named for credit to the account of Lessor.


          13.      This lease does not cover or include any right or privilege of
     hunting or fishing on any part of the above described land, cwd Lessee
     agrees with lessor that neither he nor his assigns or agents or employees
     of his aSSigns, will bring firearms or dogs upon the leased premises, and
     should this provision against hunting and fishing be violated by any
     agents   I   servants, employees or contractors of Lessee's assigns, any such
     person so Violating same shall have no further right to enter upon the
     leased premises, and such person shall be regarded as and shall be a
     trespasser on the premises of Lessor and be subject to the penalties
     imposed upon trespassers under the laws of the State of Texas.


          14.      It Is expressly agreed and understood that after production of

     oil and gas in commercial quantities is obtained from the leased premises,
     the mi nimum annua 1 income to Lessor from payment of renta 1s , shut- i n
     royalty and royalty on production shall be sum of not less than Two ($2.00)
     Dollars per acre on the total acreage retained and then covered by this
     lease, but this provision shall not impair the right and privilege of
     Lessee, his successors and aSSigns, to release and surrender any part of
     the above described leased premises as herein provided.           Lessee, his
     successors and aSSigns, shall determine within 90 days from the expiration
     of any lease year during which royalties have been paid on actual
     production the amount of any deficiency, and shall within said gO-day
     period pay such deficiency to Lessor or deposit same to Lessor's credit at

                                                   i-CIlP
                                                      - -0012146i
                                                          ----
                                             -1-
     GWB2/dm 130(1)


      ,               -,-                                              ,.. , ,        285
the depository hereinabove designated.            Default in the payment of such
deficiency shall "at operate to tenllinate this lease or any part hereof,
but Lessee, his successors and assigns, agrees to personally pay such
deficiency to Lessor at Laredo in Webb County, Texas, together with any
reasonable     cost,   including     attorney's   fees,    incurred   by   Lessor   in
collecting such deficiency if not paid within the gO-day period hereinabove
provided for.


     15.     Nothwithstanding any other provision herein contained, this oil,
gas and mineral lease is limited to oil, gas and sulphur and minerals
produced with oil and gas, and does not include minerals other than oil,
gas and sulphur and minerals produced with oil and gas, as Lessor herein
excludes from the leasehold estate herein granted,               and reserves unto
himself, his heirs and assigns, all minerals other than oil, gas and
sulphur and minerals that may be produced with oil and gas, but it is
expressly agreed that         'gas' as used herein includes gas, condensate,
distillate or any other gaseous substance or any other mineral produced
with oil and gas, including sulphur.


     16.     The right to pool under Paragraph '4' of this Oil, gas and
mineral lease shall be limited to lease or leases on land belonging ·to
Lessor herein, or in which lessor owns an interest in the oil, gas and
other minerals.


     17.     For the      purposes   of the   annual    renta 1 payments   due   under
paragraph 5, Lessor and Lessee agree that said payments have been timely

paid and      received,    and that this      Lease    is perpetuated, without the
necessity of further delay rental payments, until the expiration of the
primary term.



     18.     On November 1, 1990, Lessee covenants and agrees to execute and
deliver to Lessor a written release of any and all portions of this lease
which have not been drilled to a density of at least 40 acres for each
producing oil well and 640 acres for each producing or shut-in gas well,
except that in case any rule adopted by the Railroad Commission of Texas or
other regulating authority for any field on this lease provides for a


                                                          !CiiP" ooi21471
                                           -2-            -----~-----
GWB2/dm 130(1)

                                                                                         286
spacing or proration establishing different units of acreage per well, then
such established different units shall be held under this lease by such
production, in lieu of the 40 and 640-acre units above mentioned; provided,
however, that if at such date lessee is engaged in drilling or reworking
operations the date for the execution and delivery of such release shall be
postponed and the entire lease shall remain in force so long "as operations
on said well or wells are prosecuted with reasonable diligence, and if,
after the completion or abandonment of any such well lessee commences the
drilling of an additional well within Ninety (90) days from the completion
or abandonment of the preceding well, or continuously conducts drilling
operations in good faith and with reasonable diligence on said lease
"Without any cessation for longer than Ninety (90) days, said lease shall
remain in full force and effect during such drilling operations and until
the end of Ninety (90) days after the completion or abandonment of the
final well, at which time lessee shall execute and deliver to lessor said
written release, releasing all portions of the lease not then so developed.
Each retained unit shall contain at least one (1) well producing or capable
of producing oil or gas in paying quantities, and the acreage within a unit
shall be contiguous.


If, after the date the partial release called for under this Paragraph 18
takes affect, all production from a retained unit around a well or wells
cease to produce oil or gas in commercial or in paying quantities, Lessee
shall have one hundred eighty (180) days thereafter within which to
commence operations to establish or re-establish production therein in
commercial or paying quantities, whether such production be from the same
wellbore or other wellbore.     If such operations    result in commercial
producti on, then thi s 1ease, as it app 1 i es to such un it sha 11 continue
until such commercial or paying production again ceases.    However, if such
operations do not result in commercial production, then Lessee shall have
ninety (90) days after completion of such operations within which to
commence drilling or reworking operations within such unit, and this lease,
as it applies to said unit, shall remain in force so long as operations on
said well or for drilling or reworking of any additional well therein are
prosecuted with no cessation of more than ninety (90) consecutive days, and
if they result in the production of oil or gas therein, so long thereafter


                                                  lCOPOo121"~
                                     -3-          --------:--
GWB2/dm 130(1)
                                                                                287
as oil or gas is produced from said unit.        As to any unit upon which
commercial production may periodically terminate, the above right to timely
resume operations and continue this lease as to such unit shall be
reoccurring right.


The stipulation above as to the size of retained tracts around wells shall
never be construed as a satisfaction of Lessee's right, duty and obligation
to reasonably develop the leasehold held by Conoco or its successors or
assigns.   After November 1, 1990, Lessee agrees to drill such additional
wells on the leased premises or such portions thereof as may be in force

and effect from time to time, as may be necessary to reasonable develop the
same for the production of oil and/or gas as a reasonable prudent operator.


19. A portion of paragraph 3 has been deleted and the following is in lieu
thereof.


     (b) ,on gas, including caSinghead gas or other gaseous substances,

     produced from said land, the Lessors royalty shall be calculated and
     paid as follows:


     a)    Sales To Non-Affiliated Third Parties:
           In the event Lessee enters into a gas sales contract with a

           non-affiliated third party, Lessor's royalty shall be one-sixth
           (1/6) of the gross proceeds received by Lessee from the sale of
           such gas.



     b)    Sales To Related Or Affiliated Entities For Resale:
           In the event Lessee enters into a gas sales contract to sell gas
           to a related or affiliated entity, then Lessor's royalty shall be
           computed on the greater of the following:
           1.    One-sixth (1/6) of the gross proceeds received by lessee or
                 any affiliate or related entity from the sale of such gas to
                 the first non-affiliated entity, or


           2.    One-sixth (1/6) of the highest price reasonably obtainable
                 for gas by Lessee and other producers or operators in the



                                     -4-
GWB2/dm 130(1)
                                                                                288
                 east one-fourth of Webb County, Texas, who are producing gas

                 of like kind, quality and quantity.


                 In this regard, it is understood that the "highest price
                 reasonably   obtainable"     may    be   equal         to,    but   is   not
                 necessarily, the highest price then being obtained by other
                 producers or operators in          the east one-fourth Of Webb
                 County, Texas, who are producing gas of 11ke kind, quality
                 and quantity.


    c)   Taking, Selling Or Delivery Of Gas To Lessee Or Its Related Or
         Atfil iated Entities For Use (Not For Resale):
          In the event Lessee takes gas for its own use, or sells or
         transfers gas to a related or affiliated entity for use, then
         Lessor's     royalty shall     be computed on        tbe greater of the
         following:


          1.     One-sixth (1/6) of the highest price reasonably obtainable
                 for gas by Lessee and other producers            01"    operators in the
                 east one-fourth of Webb County, Texas, who are producing gas
                 of like kind, quality and quantity.


                 In this regard; it is understood that the "highest price
                 reasonably   obtainable"     may    be   equal         to     but   is   not
                 necessarily the highest price then being obtained by other
                 producers or operators       in    the   east one-fourth of Webb
                 County, Texas, who are producing gas of like kind, quality
                 and quantity, or


          2.     One-sixth (1/6) of the quarterly weighted average of the
                 pri ces being pa i d by "purchasers" (as here; nafter defi ned)
                 in   the east one-fourth of Webb County, Texas, who are
                 purchas i ng gas of 1i ke ki nd and qua 1i ty.          For the purposes
                 of calculating the average price under this Paragraph c2,
                 prices paid shall      be those as        reported           in the Energy
                 Planning Book publ ication or as reported to the State of



                                        -5-
GWB2/dm 130(1)
                                                                                                289
                 Texas for severence tax purposes.             uPurchasers" shall mean

                 the. three     largest   purchasers        based   on   volume     of    gas
                 purchased for such calendar quarter, in the east one-fourth
                 of Webb County, Texas.       For an example of the calculation of
                 the quarterly weighted average of such price, see Exhibit
                 UB"


       Lessor and Lessee shall meet within eleven (11)· months after the end
of each calander year.        At least thirty (30) days prior to such meeting,
Lessee should furnish to Lessor a statement or other documentation of the
basis upon which royalties accrued to lessor under the terms of the Lease
for the previous calender year.           Any additional royalties calculated by
Lessee to be due, if any, shall be paid at such meeting.                  Within one (1)
year    from   delivery   of    the   above      referred     to    statement     or     other
documentation, lessor shall notify Lessee of any discrepancies.                   Failure to
notify lessee timely of any discrepancies shall constitute final acceptance
of royalty payments as covered by such        s~atements      or other documentation.
The first period for which Lessee shall prepare such statements or other
documentation shall begin on April 1, 1988 and end on December 31, 1988.
Nothing in this paragraph shall preclude Lessor from claiming any royalty
which Lessor is entitled to as a result of mistake                       in computation,
oversight in computation, or error in computation of royalty or which may
result from the subsequent disclosure of a discrepancy.


       LESSOR'S royalty shall be without deduction for any costs. such as,
but not limited to, costs of producing, gathering, storing, separating,
treating, dehydrating, compreSSing, processing, transporting and otherwise
making the oil, gas and associated substances ready for sale or use, except
for a)    severance and related taxes, and b)                reasonable transportation
expenses which may be necessary to be paid to non-affiliated third parties
or entities to get Lessor's gas to a market or point of sale off the leased
premises and which sale or sales will result in a net price equal to or
higher than if said gas had been sold at the wellhead.


       LESSOR'S royalty on all production from depths below the stratigraphic
equivalent of the top of the Cretaceous System as seen at 12,810 feet

                                                      ---------
                                                      lcop 0012151 I
                                           -6-
GWB2/dm 130(1)

                                                                                                 290
in the electric log of the         Vaquillas #7 Well     located 260'      FNL and
1,700' FWL of Survey 987, A2061, Webb County, Texas, under the lands
now held by Lessee under this Lease shall be one-fifth (1/5)                instead
of one-sixth (1/6).


     LESSEE may submit a copy of a proposed gas sales contract to Lessor
which is acceptable to Lessee and request that Lessor approve same for
royalty computation purposes.      Lessor shall have thirty (30) days after
receipt of a gas contract to approve same.      If lessor approves same or does

not timely decline to do so, then lessor's royalty on gas sold under such
gas sales contract shall be based on the gross proceeds received under said
contract.


     GAS contracts with a term in excess of three (3) years shall contain a
provision for price redetermination no later than the end of the 3rd year
and subsequent price redeterminations thereafter at intervals no greater
than two (2) years apart.


     20.    Lessee agrees to fill all slush pits and level the same when they
have ceased to be used and to restore the land to as near its original
state as is practicable and to pay for damages to the surface of the land
and the improvements, water wells, growing crops and livestock thereon, and
to any other personal property of Lessor, Vaquillas Ranch Company, Ltd.,
occasioned by, arising out of, or resulting from operations by Lessee, his
agents, employees or independent contractors on the land hereby leased to
Lessee.     Lessee also agrees, when requested in writing by Lessor, to
divulge to Lessor true and correct information as requested by Lessor as to
all drilling, producing and marketing operations conducted under this lease
and to furnish to lessor copies of all electric well logs taken hereunder;
provfded,    however,   Lessee   shall   not   be   obligated   to    release   such
information until it has been released to the industry.


     21.    lessee hereby agrees to ensure that the two exit gates on F.M.
2895 (Forest Gate and Reynolds Gate) are guarded in an efficient and
prudent manner during drill ing, reworking or plugging operations and at
other times as mutually agreed to by Lessee and Lessor.              As to the exit


                                         -7-
GWB2/dm 130(1)

                                                                                       291
gate on the north side of U.S. Highway 59, Lessee agrees to use its best
efforts to work out an arrangement with other exploration companies using
such gate to ensure that it is guarded in an efficient and prudent manner
during drilling, reworking or plugging operations and other times as
mutually agreed to by Conoco and Lessor.       Further, Lessee agrees to use its
best efforts to work out an arrangement with TransAmerican Natural Gas
Corporation or its successors or assigns to ensure that the exit gate
located 9 miles north of Aguilares, Texas, on F.M. 2895 is guarded in an

efficient and prudent manner during drilling,             reworking or plugging
operations and at other times as mutually agreed to by Lessee and lessor.
In regard to gates used by Lessee and other exploration companies, Lessee
agrees to pay its share of the cost of guarding such gates when such gate
guards are required under this agreement.       Lessee shall not be obligated to
furnish a gate guard on any gate which has been abandoned or is not being
used by Lessee.


     22.    Lessee agrees that before abandoning any well drilled on said
lease for oil or gas purposes, it will notify the owner or the surface
estate in person or by telephone of its intention to do so, and it will
allow said owner of the surface estate a reasonable time, not exceeding
twenty-four (24) hours thereafter, within which to elect to take over the
hole for the purpose of attempting to make and complete a water well.
lessee agrees to consult with such surface owner as to the location of a
potential    water   zone,   without   any    liability   or   warranty   for   such
consultation.     Upon the owner of the surface estate election, within the
specified time, to attempt to complete the well as a water well                 and
complying with all rules and regulations of the Railroad Commission of
Texas and applicable statutes, Lessee will, at its expense, set all plugs
to just below the deSignated water sand as may be required by the Railroad
Corrmi ss ; on and thereafter deli ver the we 11 to sa i d owner of the surface
estate, leaving in such well all surface casing and such intermediate
casing as may have been run and set to at least the depth of the designated
water sand and thereafter the owner of the surface state shall own the well
and shall be responsible for all subsequent matters in connection with the
well and for compliance with the applicable statutes and regulations of all
regulatory agencies having jurisdiction.        Lessee shall have no liability to


                                        -8-
GWB2/dm 130( 1)                                --~-~---
                                                IcOP 0012153    I
                                               - -..- - -.- - -
                                                  ,   ,



                                                                                       292
              --
Lessor in connection with any of the operations which may be conducted by
the   owner      of    the      surface   estate     who   shall    thereafter   bear   all
responsibility and liability with respect thereto.                       It is expressly
understood that Lessee shall not be required to furnish any additional
casing or other equipment for any well plugged back at the request of the
owner of the surface estate under this paragraph.                  Should the owner of the
surface estate elect not to attempt to make a producing water well out of
any such hole, Lessee shall plug the well in accordance with all applicable
rules, regulations and statutes.


      23.     It is expressly agreed and understood that for the purposes of
this lease the following definitions shall apply:


              lICorranencesll   -   A well shall be deemed commenced on the
                                    date which the drilling bit enters the
                                    earth for the drilling of a well.
              IIAbandoned li    -   A well shall be deemed abandoned on the
                                    day when it is finally plugged as a dry
                                    hole.
              "Completed"       - A well shall be deemed completed thirty
                                  (30) days after the day the Lessee sets
                                    production casing.
      24.     Lessor and lessee agree to 1imit the commencement of actual

drilling during deer hunting season to 1) those wells drilled in areas
which would not disturb deer hunting, and 2) offset wells.                  If Lessee must
commence a well during deer hunting season to perpetuate said lease, then
Lessor will either a) not object to the drilling of such well during deer
hunting season or b) agree to extend the commencement date for such well to
a mutually agreeable date after deer hunting season ends.                  For the purposes
of this paragraph "deer hunting season II shall be that period defined by

State law.


      25.     Nothwlthstanding anything contained herein to the contrary, the
Lessor at any time and from time to time, upon not less than ninety (90)
days notice to the holder of this lease, may elect to require the payment
of any royalties accruing to such royalty owner under this lease to be made
 in kind; provided that any expenses incident to the exercise of such

 election shall be borne by Lessor and such election shall be for periods of
 not less than twelve (12) months.            Lessor shall only be allowed to take in


                                               -9-
 GW82/dm 130(1)
                                                                                              293
kind when lessee is producing for his own account.      In the event of such an
election by Lessor, Lessee shall cooperate fully with Lessor in allowing
Lessor to take their royalty in kind, including permitting Lessor to use
Lessee's wellhead equipment and, to the extent that Lessee has assignable
rights, the use of lessee's purchaser's transportation facilities in good
faith and not to exceed prevailing charges for similar services in the
industry at the time if Lessee or its affiliates are transporting the gas,
but if Lessee has a third party contract for the transport of said gas,
Lessor will be bound by said contract.       Should Lessee desire to enter into
a gas purchase contract having a term of more than one (1) year, then (a)
Lessee shall include in such contract a provision that allows Lessor to
elect to take its gas in kind and be released from such contract one
hundred twenty (120) days after notice, or (b) Lessor may approve of such
contract in writing, in which event, lessor may elect to tak.e its gas in
kind either at the end of such gas contact or one (1) year after notice to
Lessee, whichever happens sooner.        Any equipment installed by Lessor
necessary to take in kind must be approved by lessee and maintained
according to lessee's specifications.


     If Lessee is unable to obtain a more favorable gas contract because of
lessor's reservation of this election to take in kind, then lessee may
elect to give notice of its intention to sign a gas contract acceptable to
Lessee and request that lessor join in signing same, and if lessor elects
to Sign same, then Lessor's royalty share of revenue shall be bound by such
contract and Lessor may not elect to take its royalty in kind during the
term of such gas purchase contract.


     26.    This Amendment is applicable to only that leasehold interest
presently owned and held by Conoco Inc.       Nothing contained herein shall in
any way inure to the benefit of or be applicable to third parties who hold
or claim any interest in said 26,622.79 acre lease or who claim an
undivided    interest therin   either jointly or separately with Conoeo.
Nothing herein shan in any way prejudice any claim, demand or cause of
action which Vaquillas may have or assert against third parties holding any
leasehold interests in Vaquillas lands.       Nothing herein shall be construed
as a release or modification of any right, claim or cause of action which


                                      -10-                         i'cop.~ls51
GWB2/dm 130(1)                                                     ---~-------

                                                                                  294
Vaquillas may have aga.inst third parties who claim any interest in said
26,622.79 acre lease or any other Vaqui11as lease.


      27. Lessor does further RATIFY, CONFIRM and ADOPT all of the terms,
provisions and conditions of said June 15, 1974 Lease, as amended and as it
applies to those rights held by Conoco Inc. thereunder, and that such
lease, as amended and as it applies to Conoee Inc. is in full force and
effect as of this date.     Further, nothing contained herein shall in any way
inure to the benefit of or be' applicable to any interest held by third
parties in and to the June 15, 1974 Oil and Gas lease.




      DATED this   <51'~ day of January, 1988.
VAQUILLAS RANCH COMPANY, LTD.                   VAQUILLAS UNPROVEN MINERAL TRUST




                                                8y:


                                                By:




VAQUILLAS PROVEN MINERAL TRUST                    CONOCO INC.


           . Wal er, Jr.,   rustee          !jd   By:   ~.f~~~-Jl/~
By:   6: ,~og*~ &~ 'tl~
      E.     er
                    I
                   uiros,   ru tee
                                     )




                                         -11-
GWB2/dm 130(1)
                                                                                   295
                                                     EXH I 8 I T "A"

          .!!llir                    A8STRACT                CERTIFICATE             GRANTEE              ACRES

             16~9                       I'll 0                   llS8                eeso •        RGNG   640;0
             1651                       1112                     1159                eeso &        RGNG   640.0
             1652                       2876                     1159                \/. H. Taylor        640.0
             1661                       1122                     1164                CCSO & RGNG          640.0
             1663                       1123                     1165                ecso & RGNG          640.0
             1633                       1323                     4/808               GC & SF              640.0
             163~                      2252                      4/808               GC & SF              659.96
            1665                        1124                     1166                CCSO & RGNG          640.0
      5.1/21666                         2253                     1166                eeso & RGNG          328.75
      N.l/2 1666                        3142                     1166                ceso & RGNG          328.79
             468                        2255                      236                AS & H               659. '"
             467                         799                      236                AS • H               640.0
             1635                       1797                       17                TC Ry.               640.0
              865                       1438                     12/2541             H • GN               640.0
             1683                       1115                     1175                CCSO & RGNG          640.0
             1691                       1267                     5446                Ge • SF              640.0
             1696                       2418                     5448                GC • SF              640.0
             1695                       1268                     5448                Ge • SF              640.0
               279 (pt. only)           1353                     3702                GC & SF              458.2
             1004                       2421                     21105                J. Poi tevent       634.58
             1692                       2419                     5~~6                 GC • SF         .   613.04
             1693                       1269                     5447                 GC. SF              640.0
             2112                       2420     &   1925         631                 B.~F.    James      627.12
               276                      i552                     3700                 Ge & SF             640.23
               228                      2550                     134~, ..             CCSO ,& 'RGNG       636.93
              '227                      1133                     13W~                 ceso & RGNG         640.0
               988                      2593                     2/103                J •. Pol tevent     637.10
               987'                     2061                    .211,93'              J .. Poltevent      640.0
              213'                      1141                     13~9.                eeso & RGNG         640.0
            275'                        1336                     3700 '            , 'GC ',,& "SF'        640.0
          ·27H'                         1337                     3701                 cqQ& RGNG           640;0
  :~'.1/~ '31. BI9Ck 2                  1043                       453             ..eeso:,,& ,~GNG       320.0
           , 25. Block 2                1042                       ~52             'eeso & RGNG           640.0
          '232"                         2148                     1346                 CCSO & ReNe         462.70
           '233"                        1117                     1347                 ceso &ReNe          4~5.9
      N.H2     51. Block 2              1045                      460 .               ecso & ReNe         320.0
             ,259 (pt. only)            1137                     1074                 eeso &RGNG          600.0
             1955                       1328                     4526                 Ge & SF             640.0
             2057                        985                      302                 eeso & ReNG         652.25
             2060 (pt. only)            3329-30                   303                 CT & H              440.0
      LI/2 2059                          984                      303                 eT& H               320.0
      E.l/2 1953"                       1329                     4527                Ge& SF               320.0
             1627 (Pt. only)            1324                     4683                Ge & SF              160.0
             1629 (pt. only)            1275                     4682                GC & SF              292.65
      \/.1/2 1662                       2230                     1164                eeso     & RGNe
      E.l/21648                                                                                           329.31
      \/.1/21648
                                        24"                      1157                eeso     & RGNe      325.75
                                        3301                     1157                ceso     & ReNe      325.75
               26. Block 21'1                                     452                R. D •. Barnsley     640.0
            2335                        3025                     School              W. Brown              27.3
      E.l/2 1956*                       2560                     4526                Ge   &   SF          327.34
Lessor's·warranty hereunder as to all of Surveys 987,273,275,27],26, the E.l/Z of 1953,
E.I/2 of 1956 and ~Ol.9 acres out of Survey 233 (all except 54 acreS out of SW corner of said
Sur. 23;) Is expressly limited to 1/2 of the executIve rights In the 011. and gas rights In
and under said lands, and as to all of Survey 232 :I~ :e~pressly limited to 4/5 of the execut ive
rIghts In the oll.and gas rights.                .     .,

The following parts of surveys are expressly exc1uded'~eref~om, -vIz.·:.
(I)     The SE 1/4 of S~ 1/4, 511 1/4 of HE 1/4 (80 acs.L'andN ',1/2 of S~ I/~ and S\/ 1/4 of s~ 1/4
        (120 acs.) of CT&H Survey 2060.                            ..' .".', ..... ' ..

(2)     The w. 3/4 or GC~SF Survey 1627 described tn O&G Lse. to Daniel A. Pedrotti dated
        September 24, 1973, as a~ended.

        Any part of a survey listed herein not included \.,.Ithin any specific fraction.,1 reference
        preceding the su'rver refercnc;e.
(4)     The HE 160 acre' of GC&SF Survey 279.
(5)    ·Block 11 as per the E.D.Claggett Subdivision of rccord 2 Plat Records 29, Wcbh County,
        contiJinlng ~O acre~ tl~in9 the N\I I/lf of SE Ill; of CCSO & RGNG Survl'~' 259.
                                I

(6)     All of the \"I. 320 ;l.:r~'i> of Survey 1629 d(.'scribl!d and included In O&G lsc. tu l),lIllel A.
        Pedrotti dated $"j'\.';:lh\.'r 2~, 1973, a,s amcndt"d,
                                                                                 T~OPOOI2i57:.
                                                                                 --~---~-.---                       296
                                                     EXlIlIlT •


    C.lculatlon of toy.hy to b. SNld on ,II d.. ~I't'.nd to L..... or ,utill.tll for UII ,.M
nn for 1' . . . 1.') In ,,"cardlne. vlth p.,.,rlp)! 19.

    "lnclp.h             ,.y L.llor roy.Uy b.nd on thl ,r ..ttr of th' v.l;ht.d .v.,.;. price
                         ptld by th. th,u lar, .. t volUdtrtc pUrchllra for the ".l.nd,r qulner
                         In the .. at q\lIrttl' of v.bb Covnty 01' the 1III10"ttll 'Yin'll' of th. pr!c; ..
                         us.d by tilt L... or for roy., lY P')'MAt pIoIrpD . . . .




     Oat. Sourc.s        [n...vy 'luvdn; loot publication or IS reported to til.                 nu.      of tun hlr
                         IIv.rene. tax pvrpaa.,.

sup 1.     [lIlc;ul". th. v.I'IIht.d IIV'1'II0' prln tor the IIMth for ,lIc;h of tllll 'hI''' ttr..,."
           volu-. P\lrc;hllll. for til quirt., 11"_ the tax r.carda.




           Pureh .... fro .. 's!I!P'ny A

                   L.ne ,                    100,000              2.00       ZOO,a63
                   Unit 14                    ao,ooo              1.51       120,eOO



                                             leO,ezt              I."        29t,733


           TOtAL Unftltd T....               360,ez,
                 Tren._I .. ton


                                                          613,396/160,e21 • SI.70/MMltu.

           IIp .. t pl'oc.du,. for      reNlnln~     two lIantlll for thll purch ... r .nd for remaining tlla
           purch .......

 Step 2.   Calcul't. the vahllt.d IVerl\l' prle. of the thr ••              Ilrv.n     va\ulII.trlc    pur!;""'"        lor
           the qulrllt u.lno JIIOntilly VII" .. troll IUp 1.


                     "onth·J'oy,ry '9!§                Month· ,ebruuy 19815               Honth , H.reh IfIU!

 Emb.WL            VOlUM       Prlca    Extension      VO\\nI'    Pr!c.   Exten.lon      Val~.         Prlc.     Ext.nslan
                    Me'        l/HCf         •         MCf        S/HC'     •            Me'           S/KC'        •
 United Tax..     360,821       1.10     613,396      397,130     1.515    627,465      3Z0,l06        1.58      506,083
 TUMIII .. lon

 UTUO!
 South Gulf

 Tot.l.
                   'oo,m
                  ill..222 LH
                 1,136,044
                                1.5$     620,346
                                         ~
                                                      =
                                                      350,723


                                        1,833,74Z 1,047,009
                                                                  1.60
                                                                  WI.
                                                                           561,157
                                                                           lll.m
                                                                                        500,1261.55
                                                                                        ~.'~,5~'"--o'~~~'~'"'

                                                                          1,613,255 1,121,432
                                                                                                                 775,195


                                                                                                                1,756,658


                           SUI! of Volu.."           lUll ot ExUn,'o!\,          Vefghud    Ayerai'      P~!c,



 Toul.                       3,304,485                   5,263,855                          1.59

 sup 3.      tlleulu. w.IGht.d ,v,nv' prtu und by L..... to calcul'tI roy.lty p'YIII,nta on
             ' " d,llvered to L..... or .HtI"t .. and not for 1' . . . 1••

                         Month.January 'filII            Month.February 191111                 Mgnth·Mush 1988

                   Voh...      Pl'lc.    Extln.fan     vatu-.     Prfc.    Ext.n.lon     \/01101IIII   Prlc.      Exun,lon
                   MCf         '/IICf        •         Kef        SIMCf
                                                                             •           'Of           $-/Her
                                                                                                                    •
                  155,000      1.60       248,000      140,000 1.62         Z26,aOO     155,000        l.se        244,900




            III! 9' YoIV .."                         SUP' 9' ClIun.'on.          ""phtrd Aysrur Pelu

                                                          719,100                          1.60


 IUp 4.     COIIPIr. w.l,ht.d 'Y'l"Ig. price c,IGullt.d In Sup 2 to lh. 1I.!vhud ..... r.'. , .....
            prlc. c,lcul.ud In n.p 3.

            SI.60IHCf I, lraUer th.n St.59/KCf '0 no .ddltlon.t !"Oy.lty P.YIII,/1t •• r, requlrad
            10r th h qull'ur.




            VOIUIIII .nc! prlc" v"d In thlt t . . .pl. Itl Utld for IIlunl'ulan .nd ... y nat b.
            nfl'''I .... ' of .ctu.1 condltlona.

                                                                                                                              297
THE STATE OF TEXAS   §
                     §
COUNTY OF WEBB       §
                                                                     <.{iL
     This instrument was acknowledged before me on the q           day of
January, 1988, by J. O. WALKER, JR., General Partner of Vaquillas Ranch
Co., Ltd., A Texas Limited Partnership, on behalf of said partnership.


                                ~    .. &LA," *~V{'~
                                Notary Public in an or
                                     The State of Texas.                        <)C)
                                     My COl11llission Expires       7-3-        0   ,


                                        Lt:l\lRA    BA    LL€vJ
                                      Printed/stamped name of Notary.

THE STATE OF TEXAS   §
                     §
COUNTY   OF WEBB     §
                                                                oy--L
     This instrument was acknowledged before me on the          I             day of
January, 198B, by E. WALKER QUIROS, General Partner of Vaquillas Ranch Co.,
Ltd., A Texas Limited Partnership, on behalf of said partnership.




THE STATE OF TEXAS   §
                     §
COUNTY OF WEBB       §

     This instrument was acknowledged before me on the          9~ day of
January, 1988, by GENE S. WALKER, General Partner of Vaqulilas Ranch Co.,
Ltd., A Texas Limited Partnership, on behalf of said partnership.



                                          ~ ub~in and for
                                      The State of Texas.           J-          09'
                                      My Comission Expires          7- 3- "
                                           ~fI<)RA       804 usvJ
                                      Printed/stamped name of Notary.

THE STATE OF TEXAS   §
                     §
COUNTY OF WEBB       §

     This instrument was acknowledged before me on the      9~     day of
January, 1988, by EVAN B. QUIROS, General Partner of Vaquillas Ranch Co ..
Ltd., A Texas Limited Partnership, on behalf of said partnership.

                                    d.cblJ ~,J(1,,'}j
                                      Notary Public in and for
                                      The State of Texas.
                                      My COI11Ilisslon Expires '1-3-&,,9
                                           /v,q v I~/I   t5A LUi         vJ
                                      Printed/stamped     name      of        Notary.
                                   -12-
GWB2/dm 130( I)
                                                                                        298
THE STATE OF TEXAS   §
                     §
COUNTY OF WEBB       §
                                                                    ~
     This instrument was acknowledged before me on the CJ        day of
January, 1988, by J. O. WALKER, JR .. Trustee for The Vaquillas Unproven
Mineral Trust.

                                  c~          . itA- .~fi. flu.if
                                    Notary    ~ublic   in   a~for
                                    The State of Texas.                   00
                                    My Commission Expires:          7- 3- 6 I

                                          LA) t>RA     b>A UEN
                                    Printed/stamped name of Notary.

THE STATE OF TEXAS   §
                     §
COUNTY OF WEBB       §
                                                                    ~
     This instrument was acknowledged before me on the         7'
                                                               day of
January, 1988, by E. WALKER QUIROS, Trustee for the Vaquillas Unproven
Mineral Trust.


                                  ~"~4~~
                                    Notary Pu lie 1n and for
                                    The State of Texas.
                                    My Commission Expires: 7-:3-         8'9
                                          0A tJfG,4    HI! LLEvJ
                                     Printed/stamped name of Notary.


THE STATE OF TEXAS   §
                     §
COUNTY OF WEBB       §
                                                               n~
     Thi 5 instrument was acknowledged before me on the    -,       day of
January, 1988, by GENE S. WALKER, Trustee of the Vaquillas Unproven Mineral
Trust.


                                   ~"94~," oOr"t
                                      ~Pub ie in and for
                                     The State of Texas
                                     My Commission Expires:         '1- 3- 111
                                          /""1IUi2A    1:54 LLSvJ
                                     Printed/stamped name of Notary.


THE STATE OF TEXAS §
                     §
 COUNTY OF WEBB      §

     This instrument was acknowledged before me on the           day of
January, 1988, by EVAN B. QUIROS, Trustee of Vaquillas Unproven Minera 1
Trust.                                             ~ "
                                   -  ~   !! ), a"
                                  ~y Public in and for
                                                      4J! 0,,,9-'
                                     The State of Texas
                                     My Commission Expires: '7-3-117
                                          Lc,[)f(,a    15", LLe:vJ
                                     Printed/stamped name of Notary.



                                   -13-
 GWB2/dm 130(1)

                                                                                 299
THE STATE OF TEXAS   §
                     §
COUNTY OF WEBB       §

     This instrument was acknowledged before me on the  '1 ~ day of
January, 1988, by J. O. WALKER, JR., Trustee of Vaquillas Proven Mineral
Trust.



                                    NOtarY ic in and for
                                    The State of Texas                          "
                                    My Commission Expires: 7-3- i?{
                                           IvAM.A /2,,</ LIE vJ
                                    Prlnted/stamped name of Notary.


THE STATE OF TEXAS   §
                     §
COUNTY OF WEBB       §
                                                                       yh
                                                            the    9          day of
January, 1988, by E.                                              Proven Mineral Trust.

                                   (.~~~~~~~~~~~--
                                    otary u ic 1n and for
                                    The State of Texas
                                    My Commission Ex~es:               7-.:3- ~'l
                                           L4tJ!<A           &      Li..GvJ
                                     Printed/stamped name of Notary.


THE STATE OF TEXAS   §
                     §
COUNTY OF WEBB       §

     This instrument was acknowledged                       the    9   'ti0 day of
January, 1988, by GENE S.WALKER, Trust                       Proven Mineral Trust.

                                         otary ub   lC 1n    an for
                                     The State of Texas
                                     My Commission Expires:            7-.3 - 'g'1
                                           ivA iJ/2A BA LL;;;.,J
                                     Printed/stamped name of Notary.



THE STATE OF TEXAS   §
                     §
COUNTY OF WEBB       §

                                             on the
     This instrument was acknowledged before me         9      day of
                                                                       L
January, 1988, by EVAN B. QUIROS, Trustee of Vaquill as Proven Mineral
Trust.

                                     Notary Public in and for
                                     The State of Texas
                                     My COnInission Expires:           7-3- :;;J
                                           .LAuRA      8-4 LLevV
                                     Printed/stamped name of Notary.




                                   -14-
GWB2/dm 130(1)
                                                                                          300
......


         THE STATE OF TEXAS   §
                              §
         COUNTY OF WEBB       §

              This instrument was acknowledged before me on the 'l-J-b day of
         January, 1988, by       Iefi c. • .s"--;;l er                            ,
         Attorney·in-Fact for CONO(? INC., ali aware corporation, on behalf of said
         corporation.



                                             The State of Texas
                                             My Commission Expires: '7-I&" qg'
                                                  LJ e.11"" /J'la. Y' Ke. rt-
                                             Printedlstamped name of Notary.




                                           ·15·
         GWB2/dm 130(1)
                                                                                      301
                                                    ·r...".... .
.,
     •••••


     •


     J":
             '._ A


         'i • It.odIlUU U (1"1)
             .. i.J:I UD ACI" 1'00111\11: PrO>'b!t.on

                                                            •
                                                        OIL, GAS AND MINERAL LEASE
                 THIS AGltEEKENT mat. lbb,-1.~ .. _ _ _ _ _ _ .4&T ot. Novemb~L ____ R__ R. __ 'R. __ .. __ ._...lI..!!?_. ,*_11
               Vaguillas Rancl!SomruillY.t.-Ltd.; Vaqui11~Jm.p.roven_MinJrral Tn,tst i ...Y!9..l!.!.+1.~!"9.Y.~!L
             ~~ral-1.~ust..LI!f:..t,!!!~nd thr.g.H8!L.!~f!...&rulenLPJ!r..t.~ ....-h..JLr.....IDt1.lter. Jr ~._. ___ ._. _
             _ ~. Wal~r.-JlU-..!~,~~~~!!$~L~M_~"!!!J_I.. ....Q.\!ill_I!·            ,                     . ___._.'._.____ ..'

              ;::.~:~ 0111 ~ IrIOra) ...boN add .....           lu_ .,    p..!.~o:-i~;J:D86:-~p Texa!                              7804i=~===_====_~
              and      __G..?.!!~~.£:..z.y_~_~ox 219L..Jlo'!~!Q..lh_~~!lP_..l.1.£?_~____ ,. __ ._. ___ .•                    t.-. WlTNESS!:TH1
                     -I. ~ III ccmaW...,LlOII ot......!en Dollar"§._!lE.Q._.9,~J~~~!,-o_4....rul!Ly'~.!..\@blt;L~..QJ!§.!~.E~!!2.!L._R'-_...»oIl&r,
               II...! 0.00                             ) In bDd paM!,. ot Lbe lO,llUII bu.ln Pf'OyIW. Illd of  u..  Apft_t. of LMaw blf'lln toat.lM4, bereb, paa,ta.
              kuM L114 lott.o uclual....,. viii,;·L.'_ fur tb. rnupoM 01 IlIn,UaIUlla. t:XpJ.orllll'. Pr'OtPlCltill•• kDU ... u>d mIlIllI&' lor ...d. Pf'Odud.n.. 011. "" I.N!
              all otb ... mIr.lra", COII41Kt.1D.S p;plor.~n. noIo.le and I'toph,.1c&1 .",....,.. b,. ~a»b, COra UIl. 1'n.'Pi&;r &114, 1n&.. n.tl • - ...~:~~.
              au, ...tv ant! ~Ir flllld ......01 air lIIto ...bnrt.... nratl, II}'I .... pipe Una. bullcUl" ..-da "nita,. ~ ItILlD.... te _ _ U11M III _ ' - IlnIoo
              hIr'M tbtr.ull IIII!. 0.. , O.... r end. Urwl ludi _1IId or claim.:! b, Lutor adlac&llt alii! _ il INO     't~ to prod.\I~ "VI, tat. cer. or, kNot.
              t.ralI.IlJOl1. &114 _" laid llrodtlcb, ud. boaf;lll&' It. IIIIplonn. ~ toU_IN!' duenbtcl Iud hL __ H~  W   _ _ _ _ _ _ _• _ _• ___       Co"II~. T...... ""..I"


                      6~740 acres of land~ more or less~ situated in Webb County, Texas, more fully
                     described in Exhibit "AI] attached hereto and made a part of this Lease for all
                     relevant purposes, including limitations upon warranty as specifically set out
                     therein,




                                                                                                                                                                                 302
.'




          irATI;   or .

          ~
           OOUIITY .,._ __
                     ~~L-
                                        --}
                                  _ _ ._ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ ._ __



           =-_~     't:r ':...bt~~ ~-iii;;;ii~...nbMrlbed to the lorqolq hl~t. UI4 KlIIIO'WIedp;!. to =- tbd _he.... aecut«l
               GI.. " ulld" l1li' bud al'l4 lilt&! or ofnoe.,   u. .. u... ___ -U7 ot _ _ ._ _ _ _ _ _            ~   __________ • A. D. 11. ____ .••

                                                                                                                             --_.__._--_           ....
                                                                                   NotaQ Publlll   h~   fAd for          .----~~.   -----
                                                                     T&1UJ'OlNr A.CKHOWLJmOMEHT

          OOVNnO)':           ._--}


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                                                                                                                                                               303
                          •   ADDENDUM TO OIL AND GAS LEASE
                                                            •
                           From Vaquillas Ranch Co., Ltd. et al
                          To Conoco Inc., Dated November 1, 1987




         12. Should Lessee be prevented from complyin9 with covenants of this
    lease by reason of conditions or acts set forth in Paragraph '11' hereof,
    then Lessee agrees annually to pay to Lessor an amount equal to the delay
    rentals herein provided for during such period of prevention, whether same
    be during or subsequent to the primary term, and such payment shall be made
    at the end of each year of prevention either to Lessor or to the depository
    above named for credit to the account of Lessor.


         13. This lease does not cover or Include any right or privilege of
    hunting or fishing on any part of the above described 1and, and Lessee
    agrees with Lessor that neither he nor his aSSigns or agents or employees
    of his assigns, will bring firearms or dogs upon the leased premises, and
    should this provision against hunting and fishing be violated by any
    agents, servants J employees or contractors of Lessee IS ass igns, any such
•
    person so Violating same shall have no further right to enter upon the
    1eased   prem1 ses,   and such person sha 11   be   rega rded as   and   sha 11   be a

    trespasser on the premises of Lessor and be subject to the penalties
    imposed upon trespassers under the laws of the State of Texas.


         14.   It is expressly agreed and understood that after production of                   .,

    oil and gas in corrmercial Quantities is obtained from the leased premises,                  ~C'I

    the minimum annual       income to Lessor from payment of rentals, shut-in                       0   1 )



    royalty and royalty on production shall be sum of not less than Two_($2.00)
    Do1lars per acre on the total acreage retained and then covered by this

    lease, but this proviSion shall not impair the right and privilege of
    Lessee, his successors and aSSigns, to release and surrender any part of

    the above described leased premises as herein provided.                  Lessee, his
    successors and aSSigns, shall detennine within 90 days from the expiration
    of any lease year during which royalties             have been paid on actual
    production the amount of any deficiency, and shall within said 90-day

    period pay such deficiency to lessor or deposit same to Lessor's credit at



    GW82/dm 124(7)
                                                                             ""'I JUt 1 4   ~                  304
     ..
".        ,.



               the depository hereinabove designated.
                                                                              •
                                                                      Default in the payment of such
               deficiency shall not operate to terminate this lease or any part hereof.
               but Lessee. his successors and assigns. agrees to personally pay such
               deficiency to Lessor at Laredo in Webb County. Texas. together with any
               reasonable     cost,     including        attorney's   fees,    incurred   by   Lessor     in

               collecting such deficiency if not paid within the gO-day period hereinabove
               provided for.


                    15.     Nothwlthstanding any other provision herein contained. this oil.
               gas and mineral lease is limited to oil. gas and sulphur and minerals
               produced with oil and gas. and does not include minerals other than oil.
               gas and sulphur and minerals produced with oil and gas. as Lessor herein
               excludes from the        leasehold estate herein granted,             and reserves       unto
               himself. his heirs and assigns. all minerals other than Oil. gas and
               su1 phur and mi nera 1s that may be produced with oil and gas. but it is
               expressly agreed that            Igas'    as used herein includes gas, condensate,
               distillate or any other gaseous substance or any other mineral produced
               with oil and gas, including sulphur.


                    16.     The right to pool under Paragraph '4' of this oil. gas and
               mineral lease shall be limited to lease or leases on land belonging to
               lessor herein, or in which lessor owns an interest in the Oil, gas and
               other minera 1s .


                    17.     For the     purposes        of the   annual   rental   payments    due   under
               paragraph 5, lessor and lessee agree that said payments have been timely
               paid and     received.     and     that    this   Lease is     perpetuated. without       the
               necessity of further delay rental payments. until' the expiration of the
               primary term.



                    18.     At the end of the primary tenn hereof, lessee covenants and                        L ()?
               agrees to execute and deliver to lessor a written release of any and all
               portions of this lease which have not been drilled to a density of at least
               40 acres for each producing 011 well and 640 acres for each producing or
               shut-in gas well. except that in case any rule adopted by the Railroad
               Commission of Texas or other regulating authority for any field on this




               GWB2/dm 124(7)
                                                                                                                       305
                    •                               •
lease provides for a spacing or proration establ1shing different units of
acreage per well, then such established different units shall be held under
~e~se by - su~h production, in 1ieu of the 40 and 640-acre units above
mentioned; provided, however, that if at such date lessee is engaged in

drilling or reworking operations the date for the execution and delivery of
such release shall be postp~n;d a~d the entire Tease shall remain in force
so long as operations on said well or wells are prosecuted with reasonable
diligence, and if, after the completion or abandonment of any such well
                                                                                 ~.)   :
Lessee commences the drilling of an additional well within Ninety (90) days
 from the completion or abandonment of the preceding welT, or continuously
conducts drilling operations in good faith and with reasonable diligence on
 said lease without any ces?atjon for longer than Ninety (90) days, said
 lease shall remain in full force and effect during such drilling operations
 and until the end of Ninety (90) days after the completion or abandonment
 of the final well, at which time Lessee shall execute and deliver to Lessor
 said written release, releasing all portions of the lease not then so
 developed.     Each retained unit shall contain at least one (1) well
 producing or capable of producing oil or gas in paying quantities, and the
 acreage within a unit shall be contiguous.


 If, after the date the partial release called for under this Paragraph 18
 takes affect, all production from a retained unit around a well or wells

 cease to produce 011 or gas in commercial or in paying quantities, Lessee

 shall have one hundred eighty (180) days thereafter within which to
 commence operations to establish or re-establish production therein in

 cormnercial or paying quantities, whether such production be from the same
 well bore or other wellbore.     If such operations result in commercial
 product; on, then thi s 1ease, as it app 1; es to such uni t sha 11 conti nue
 until such commercial or paying production again ceases.    However, if such
 operations do not result in commercial production, then Lessee shall have
 ni nety (90) days after comp 1et i on of such operati ons within whi ch to
 commence drilling '·or reworking operations within such unit, and this lease,
 as it applies to said unit, shall remain in force so long as operations on
 said well or for drilling or reworking of any additional well therein are
 prosecuted with no cessation of more than ninety {gO} consecutive days, and
 if they result in the production of oil or gas therein, so long thereafter



 GWB2/ dm 124 (7)
                                                                                           306
                                 •                                   •
",   .   ,.




              as oil or gas is produced from said unit.        As to any unit upon which
              commercial production may periodically terminate, the above right to timely
              resume operations and continue this lease as to such unit shall be
              reoccurring right.


              The stipulation above as to the size of retained tracts around wells shall
              never be construed as a satisfaction of Lessee's right, duty and obligation
              to reasonably develop the leasehold held by Canoe a or its successors or
              ass 19ns.   After November I, 1990, Lessee agrees to dri 11 such add i tiona 1
              wells on the leased premises or such portions thereof as may be in force
              and effect from time to time, as may be necessary to reasonable develop the
              same for the production of oil and/or gas as a reasonable prudent operator.


              19. A portion of paragraph 3 has been deleted and the following Is in lieu
              thereof.


                    (b) on gas, including casinghead gas or other gaseous substances,
                   produced from said land, the Lessors royalty shall be calculated and
                   paid as follows:


                   a)     Sales To Non-Affiliated Third Parties:
                          In the event Lessee enters into a gas sales contract with a
                          non-affiliated third party, Lessor's royalty shall be one-fifth
                          (l/5) of the gross proceeds received by Lessee from the sale of
                          such gas.


                   b)     Sales To Related Or Affiliated Entities For Resale:
                          In the event Lessee enters into a gas sales contract to sell gas
                          to a related or affiliated entity, then Lessor's royalty shall be
                          computed on the greater of the following:
                          1.   One-fifth (1/5) of the gross proceeds received by Lessee or
                               any affiliate or related entity from the sale of such gas to
                               the first non-affiliated entity, or


                          2.   One-fifth (1/5) of the highest price reasonably obtainable
                               for gas by lessee and other producers or operators in the


                                                    -4-
              GWB2/dm 124(7)
                                                                                               307
                       •                                   •
                  east one-fourth of Webb County, Texas, who are producing gas
                  of like kind, quality and quantity.


                  In this regard, it is understood that the IIhighest price

                  reasonably   obtainable"     may    be   equal     to,       but    is   not
                  necessarily, the highest price then being obtained by other
                  producers or operators       in the east one-fourth of Webb
                  County. Texas. who are producing gas of like kind, quality
                  and quantity.


     c)   Taking, Selling Or Delivery Of Gas To lessee Or Its Related Or
          Affiliated Entities For Use (Not For Resale):
          In     the event Lessee takes gas          for its own use, or sells or

          transfers gas to a related or affiliated entity for use, then
          lessor's      royalty shall   be    computed on      the    greater of the
          following:


          1.      One-fifth (1/5) of the highest price reasonably obtainable
                  for gas by lessee and other producers or operators in the
                  east one-fourth of Webb County, Texas, who are producing gas
                  of like kind. quality and quantity.


                  In this regard, it is understood that the "highest price
                  reasonably   obtainable"     may    be   equal     to        but    is   not

                  necessarily the highest price then being obtained by other
                 producers or operators in the east one-fourth of Webb
                  County, Texas, who are producing gas of like kind, quality
                 and quantity, or



          2.     One-fifth (l/5) of the quarterly weighted average of the
                 prices being paid by "purchasers" (as hereinafter defined)
                  in   the east one-fourth of Webb County, Texas, who                      are

                 purchasing gas of like kind and quality.             For the purposes
                 of calculating the average price under this Paragraph e2.

                 prices paid shall      be    those as     reported       in    the    Energy
                 Planning Book publ ication or as reported to the State of



                                        -5-
GWB2/dm 124(7)
                                                                                                 308
                   •
                 Texas for severence tax purposes.
                 the   three      largest    purchasers
                                                              • "Purchasers II sha 11 mean
                                                             based    on   volume        of     gas
                 purchased for such calendar quarter, in the east one-fourth
                 of Webb County. Texas.           For an example of the calculation of
                 the quarterly weighted average of such price, see Exhibit




       Lessor and Lessee shall meet within eleven (11) months after the end
of each calander year.          At least thirty (30) days prior to such meeting,
lessee should furnish to Lessor a statement or other documentation of the
basis upon which royalties accrued to Lessor under the terms of the Lease
for the previous calender year.             Any additional royalties calculated by
Lessee to be due, if any, shall be paid at such meeting.                    Within one (1)
year    from   del ivery   of     the   above     referred    to     statement      or        other
documentation, Lessor shall notify Lessee of any discrepancies.                  Failure to
notify Lessee timely of any discrepancies shall constitute final acceptance
of royalty payments as covered by such statements or other documentation.
The first period for which Lessee shall prepare such statements or other
documentation shall begin on April I, 1988 and end on December 31, 1988.
Nothing in this paragraph shall preclude Lessor from claiming any royalty
which Lessor is entitled to as a result of mistake                         in computation,
overSight 1n computation, or error in computation of royalty or which may
result from the subsequent disclosure of a discrepancy.


       LESSOR'S royalty shall be without deduction for any costs, such as,
but not limited to, costs of producing. gathering, storing, separating,
treating, dehydrating, compreSSing, proceSSing, transporting and otherwise
making the Oil, gas and associated substances ready for sale or use, except
for a)    severance and related taxes, and b)                reasonable transportation
expenses which may be necessary to be paid to non-affiliated third parties
or entities to get Lessor's gas to a market or pOint of sale off the leased
premi ses and wh1 ch sa 1e or sa 1es wi 11 result in a net pri ce equa 1 to or                        r"
higher than if said gas had been sold at the wellhead.                                                " I



       LESSEE may submit a copy of a proposed gas sales contract to Lessor
which is acceptable to Lessee and request that Lessor approve same for


                                            -6-
GW82/dm 124(7)
                                                                                                            309
".   -




                             •
         roya lty computation purposes.
                                                                      •
                                             Lessor sha 11 have thirty (3D) days after
         receipt of a gas contract to approve same.             If Lessor approves same or does
         not timely decline to do so, then Lessor's royalty on gas sold under such
         gas sales contract shall be based on the gross proceeds received under said
         contract.


                GAS contracts with a term in eXcess of three (3) years shall contain a
         provision for price redetermination no later than the end of the 3rd year
         and subsequent price redeterminations thereafter at intervals no greater
         than two (2) years apart.


                20.   Lessee agrees to fill all    slu~h   pits and level the same when they
         have ceased to be used and to restore the land to as near its original
         state as is practicable and to pay for damages to the surface of the land
         and the improvements, water wells, growing crops and livestock thereon, and
         to any other personal property of Lessor, Vaquillas Ranch Company, Ltd.,
         occasioned by. arising out of, or resulting from operations by Lessee, his
         agents, employees or independent contractors on the land hereby leased to
         Lessee.      Lessee also agrees. when requested in writing by Lessor. to
         divulge to Lessor true and correct information as requested by Lessor as to
         all drilling, producing and marketing operations conducted under this lease
         and to furnish to Lessor copies of all electric well logs taken her.eunder;
         provided.     however,   lessee   shall   not     be     obligated   to    release   such
         information until it has been released to the industry.


                21.   Lessee hereby agrees to ensure that the two exit gates on F.M.
         2895   (Forest Gate and Reynolds Gate) are guarded in an efficient and
         prudent manner during drilling, reworking or plugging operations and at
         other times as mutually agreed to by Lessee and Lessor.                   As to the exit
         gate on the north side of U.S. Highway 59, Lessee agrees to use its best
         efforts to work out an arrangement with other exploration companies using
         such gate to ensure that it is guarded in an efficient and prudent manner
         during drilling, reworking or plugging operations and other times as
         mutually agreed to by Lessee and lessor.          Further, Lessee agrees to use its
         best efforts to work out an arrangement with TransAmerican Natural Gas
         Corporation or its successors or assigns to ensure that the exit gate


                                                   -7-
         GWB2/dm 124(7)
                                                                                                     310
                             •                                       •
....

       located 9 miles north of Aguilares, Texas, on F.M. 2895 is guarded in an
       efficient and        prudent manner during drilling, reworking or plugging
       operations and at other times as mutually agreed to by Conoco and Lessor.
       In regard to gates used by lessee and ather exploration companies, Lessee
       agrees to pay its share of the cost of guarding such gates when such gate
       guards are required under this agreement.           lessee shall not be obligated to
       furnish a gate guard on any gate which has been abandoned or is not being

       used by Lessee.


             22.   Lessee agrees that before abandoning any well drilled on said                  d; 'p':)
       lease for oil or gas purposes, it will notify the owner or the surface
       estate in person or by telephone of its intention to do so, and it will
       allow said owner of the surface estate a reasonable time, not exceeding

       twenty-four (24) hours thereafter, within which to elect to take over the
       hole for the purpose of attempting to make and complete a water well.
       lessee agrees to consult with such surface owner as to the location of a
       potentia 1 water        zone.   without   any    1iabil ity    or warranty   for    such
       consultation.        Upon the owner of the surface estate election, within the
       specified time, to attempt to complete the well as a water well and
       complying with all rules and regulations of the Railroad Commission of
       Texas and applicable statutes, Lessee will, at its expense, set all plugs
       to just below the designated water sand as may be required by the Railroad
       Commission and thereafter deliver the well to said owner of the surface
       estate, leaving in such well all surface casing and such intennediate
       casing as may have been run and set to at least the depth of the designated
       water sand and thereafter the owner of the surface state shall own the well
       and shall be responsible for all subsequent matters in connection with the
       well and for compliance with the applicable statutes and regulations of all
       regulatory agencies having jurisdiction.           Lessee shall have no liability to
       Lessor in connection with any of the operations which may be conducted by
       the   owner     of    the   surface   estate     who   shall    thereafter   bear   all
       responsibility and liability with respect thereto.                   It is expressly
       understood that lessee shall not be required to furnish any additional
       casing or other equipment for any well plugged back at the request of the
       owner of the surface estate under this paragraph.              Should the owner of the
       surface estate elect not to attempt to make a producing water well out of


                                                  -8-
       GWB2/dm 124(7)
                                                                                                             311
"   ..

                              •
         any such hole. Lessee shall plug the well in accordance with all applicable
         rules. regulations and statutes.


              23.     It is expressly agreed and understood that for the purposes of
         this lease the following definitions shall apply:


                      "Cormnences"     -   A well shall be deemed corranenced on the
                                           date which the drilling bit enters the
                                           earth for the drilling of a well.
                      IIAbandoned ll   -   A well shall be deemed abandoned on the
                                           day when it is finally plugged as a dry
                                           hole.
                      "Completed"      - A well shall be deemed completed thirty
                                         (30) days after the day the Lessee sets
                                         production casing.
              24.     Lessor and Lessee agree to limit the commencement of actua I Ao~
         drilling during deer hunting season to 1) those wells drilled in areas
         which would not disturb deer hunting. and 2) offset wells.            If Lessee must

         commenCe a well during deer hunting season to perpetuate said lease, then
         Lessor will either a) not object to the drilling of such well during deer
         hunting season or b) agree to extend the commencement date for such well to
         a mutually agreeable date after deer hunting season ends.           For the purposes
         of this paragraph "deer hunting season" shall be that period defined by
         State law.


              25.     Nothwithstanding anything contained herein to the contrary. the
         lessor at any time and from time to time, upon not less than ninety (90)

         days notice to the holder of this lease, may elect to require the payment

         of any royalties accruing to such royalty owner under this lease to be made
         in kindj provided that any expenses               incident to the exercise of such

         election shall be borne by Lessor·and such election shall be for periods of
         not 1es5 than twelve (12) months.           Lessor shall only be allowed to take in
         kind when Lessee is producing for his own account.           In the event of such an

         election by Lessor, Lessee shall cooperate fully with Lessor in allowing
         Lessor to take their royalty in kind, including permitting lessor to use

         lessee's wellhead equipment and, to the extent that lessee has assignable
         rights, the use of Lessee's purchaser'S transportation facilities in good

         fa ith and not to exceed preva i1 i ng charges for s imil ar servi ces in the

         industry at the time if lessee or its affiliates are transporting the gas,



                                                     -9-
         GWB2/dm 124( 7)
                                                                                                312
....   . '.
                                  .,                                  •
              but if Lessee has a third party contract for the transport of said gas,
              Lessor will be bound by said contract.       Should Lessee desire to enter into
              a gas purchase contract having a term of more than one (1) year, then (a)
              Lessee shall include in such contract a provision that allows Lessor to
              elect to   ta~e    its gas in kind and be released from such contract one
              hundred twenty (120) days after notice, or (b) Lessor may approve of such
              contract in writing, in which event, Lessor may elect to take its gas in
              kind either at the end of such gas contact or'one (1) year after notice to
              Lessee, whichever happens sooner.        Any   equipment installed by lessor
              necessary to take in kind must be approved by Lessee and maintained
              according to Lessee's specifications.


                    If Lessee is unable to obtain a more favorable gas contract because of
              Lessor's reservation of this election to take in kind, then Lessee may
              elect to give notice of its intention to sign a gas contract acceptable to
              Lessee and request that Lessor join in signing same, and if Lessor elects
              to sign same, then lessor's royalty share of revenue shall be bound by such
              contract and Lessor may not elect to take its royalty in kind during the
              term of such gas purchase contract.




                    DATED this    91Jr   day of January, 1988.



              VAQUILLAS RANCH COMPANY, LTD.                  VAQUILLAS UNPROVEN MINERAL TRUST



              BY~.~                                          Bti?~ge
                                                              ·~~r.,ru~tee


              By:   g~~
                     hra
                    E.
                         ~~w
                          eriliros
                                                             By:     g.
                                                                    E. Wa



                                                             By:




                                                             By:
                                                                   ""=:--.



                                                    -10-
              GWB2/dm 124(7)
                                                                                                313
                              •                               •
.. ,   ...




             VAQUILLAS PROVEN MINERAL TRUST              CONOCO INC.


             BY~~4                                   rif1BY: "':'{!fd:::=f:f¥:f1ia";;ct~--~
             By:   c$:Wy!'~~f(: Tr~




                                              -11-
             GWB2/dm 124(7)
                                                                                              314
'   ..

                                                                                  ,I'i :
                                                                                (; {'e...'
                                                                                           "1:j
                                                                               ,_,




            SURVEY          ABSTRACT      CERTIFICATE       GRANTEE                  ACRES


             ·1652            2876             1159         w. H. TAYLOR         640.0
            -1661             1122             1164         CCSD &  RGNG         640.0
           -1663              1123             1165         CCSD &  RGNG         640.0                   ~
                                                                                                        .y
         ~-."t63"3 .          1323              4/808       GC & SF              640.0 ,
            -'"1634           225..7_. __ ._.4/.8.08____ GC L~F._._· ...... __ 6_59.!-96...,
            =-n65             1124             1166         CCSD & RGNG          640.0
          ""~
         -~d635_              1797                17        TC RY;               640.0--.
           - 2060 (SE/4       3329-30       .- '303 . -"---CT--&'M'    -- ----r6-0":-0.·
                    only)
           -1953 (E 1/2)      1329            4527           GC & SF                 320.0
             1627 (pt.        1324            4683           GC L SF                 160.0
                    only)
           -1629 (pt.         1275            4682           GC & SF                 264.65
                    only)
             1662 (W 1/2)     2230            1164          CCSD & RGNG              329.31
             1648 (E 1/2)     2441            1157          CCSD &- RGNG             325.75
             1648 (W 1/2)     3301            1157          CCSD & RGNG              325.75
             2335             3025            SCHOOL        W. BROON                  27.3
           • 1956 (E 1/2)     2560            4526          GC & SF                  327.34


            The      following parts of surveys are expressly eXCluded herefrom,
            viz. :
            (1) The SE 1/4 of SW 1/4, SW 1/4 of NE 1/4 (80 acs.) and N 1/2
            of SW 1/4 and SW 1/4 of SW 1/4 (120 acs.) of €T & M Survey 2060.
             (2)  The W. 3/4 of GC & SF survey 1627 described in O&G Lease to
             Daniel A. Pedrotti dated September 24, 1973, as amended.

             (3)   All  of the W. 320 ~cres of Survey 1629 described and
             included in O&G Lease to Daniel A. Ped~otti dated September 24,
             1973, as amended.




                                                                                                  315
I\O~   for   ,,,.t,)
                              •
       ,.{cul.tlon of roy,lty n b. p.td on gn d.~IY.,.d to
                        In "'ardlne. vllh p.t.,r.ph 19.
                                                            lXlllllt •




                              'ty L"lot roy.lty ~.nd on th. "nUt of the v.l,hud ''1ln" prl"
                                                                                           I. .....
                                                                                                      •
                                                                                                      or Affllh'n for UII (.nd



                              p.lel by till tnr .. hr,.n Yol~trlC pur~ ... n hr th. nt.nd" qUtrUt
                              In th. un II.U,tUt of lI,bb CO\ll\~Y or tbt 1i,Iebtld IVlnu 01 'hi prln'
                              uud by ,h. LUlOr for roYllty P')'IIMt P'o/t'P0un

        C.1cul.tlon:          Oet,,..lnl .ddltlon.l roytlty p')'II.nu, If ,ny.

                              lnlrlY 'hMlnt loot publication or II reporud to ,h.                               st."       of Tun lor
                              "'IlrI""         Ull purpo ....

sup     1.     ,.1culiU th. v.llbUd                lY'u,.
                                               ptlet for th • .onth tor nch of th. tht ..                                        ,,,,.n
               vol\,a, pureh .... for "" qultU,. fro. th. tlX ncord ••

                                                            M2Mb·     J."y.,y     IOA§




                         I. .... 1                   100,000              Z.OO              ZOO,86)
                         Unit '4                       eo,ooo             1.51              1Z0,800

               'v.-ch" .. fC!!III     '2"'p,ny ,

                         \lIU '2                     180,821              1.62


               TOllL Vnlud Tun                       360,1121
                     TUM.lnlon


                                                                   611,396/360,1121 • $1.7o/MIt"~.

               llput prondun tor nllllning tvo _linIn, hI' thl. pur~h"lr t.mI tor rtlulnlng '.,,0
               purch, .. r ••

  "'P Z.       C.lc:",ln. lb, .",Ight,d .VIr.gl prlu of thl thrll I.r,nt vohlll.tric purch .. ln hr
               thl qu.rtlr Ulln" IIOnthly '1.11,111 trOll sup 1.


                                                                                                                    ~    Mereh 1900
                           M0nSb·J·oy'CY         12"            Montb • hbrupry 1!1I11                    Month


  ~                     Volva'       Prll::t    !xnn.lon        VOIUNI    PrlCi       !xtlnlhn           VoIUIII,       'ric:,    ElIuntlOn
                          Kef        S/Mcr
                                                    •           "Of       • /ltef
                                                                                            •            "Of            .s/Her       •
  Unlud hx ..           ~60,'Z1       1.70       611,~96     3PT,Uo       1,$1             617,465      nO,306          1.51S     506,083




                                                 -
  Tra""alulon

  UIIAoe                                         620,346                                   561,157      500,1261.n                175,195
  South Cult                                                                               l1Lill       Ul..2.22    'WJ,IIL..£"tll.J11I'22
                       1,136,044               '.83l,7n 1,047,009                    1,67],lS5 1,121,432                         1,756,858


                                'v- 0' VoIUlo"              Su.. of [!It$'l'IJlgn,              v.lghulf "Ylr.S' hiS!


  10ul.                                                                                                     '.59

   sup 3.        C,I;III.te ".I,hud .V'I'IVI prln "'ltd b.,. L..... to ulc:ulu. roytlt.,. p.YII.nu on
                 VIt dlllVlrtd to L..... or ,,,lIln .. Inc! not for ,"'1 ••

                              t!0n,b·J,nytcy 1911!!               IConth."bruary 19M                           Monfh'H!Ireh 19M


                         Yolu.I      'rln       htlnllon        VolulI'   PriCI        Eltlnllon         VotU-I         Prlc-.     Extrnllon
                        "Of          $IltC1
                                                    •           HCf       S/MCr
                                                                                            •            "Of            .s/MC'

                        155,000       1.60       241,000        140,000    1,62            126,800      ISS,oOO         l.sa        2U,900




                h,.    of V2'u.,,..                         SUI! 2' huC! '2n.

                                                                   719,700                                 1.60


  u.p '.        CPptr, .."I,hUd .... ".,' pd;, Clleul.tld In .sup Z to thl IIIhhud .... .,.g. ~"nl
                pd" ni;ui.t.d             'n
                                      ,up 3.

                '1,60/)lC1 'I ,r.n.r 111 .... $l.S9/MCf .0 no .ddlttOMt roy.lty p.y.tI\U ' f ' rtq\l.lftd
                tor this qUlrt,r,



 IIOUt          '101",-", IIId prlu. Ulld 'n tbl. 'XI.,l • • t I                 "'. . d   for IIlunrnlon .nd ••.,. not b.
                tlH,nlvI of ICtu.1              c:~hlont,

                                                                                                                                               316
,   .   ~




         ,
        , .                                THE STATE OF TEXAS
                                            COUNTY OF WEBB
                                                                   •
                                                                   §
                                                                   §
                                                                   §
                                                                                                 •
                                                This instrument was acknowledged before me on the               9~day
                                                                                                                  of
                                           January, 1988, by J. O. WALKER, JR., General Partner of Vaquillas Ranch
                                           Co., Ltd., A Texas Limited Partnership, on behalf of said partnership,



              $.-.1"
                                      .......
                     :':,".. ', ".- ..•.
                   ...
                                                ~;~.­
                                     ,- ~.. ... .
                                                     ...........
                                                                             ~!~
                                                                              ota+Y ~600.'S-
                                                                                          ~lC in and for
              i~/                                          . ..                  The State of Texas.
              \               :
                                                                                 My Coomission Expires
                                                                                                 6A LLGvJ
                                                                                                                7- B - '89
               '. '"'......... ._...... .
               ~
                                   ~..
                                                                                     .0A!J/?,q
                                                                                  Printed/stamped name of Notary.

                                            THE STATE OF TEXAS     §
                                                                   §
                                            COUNTY OF WEBB         §

                                                  This instrument was acknowledged before me on the 9Y+- day of
                                            January. 1988, by E. WALKER QUIROS, General Partner of Vaqulllas Ranch Co.,
                                            Ltd •• A Texas Limited Partnership. on behalf of said partnership.


               . •:!o"
                                                 .. f .
                                                          ""
                                                                               ~h~al2~J[y
                                                                                otarYublic in and for
              i . .~~/                                                           The State of Texas.
              § ~i                                                               My COlllllission Expires
                                                                                                                        (;I
                                                                                                               '7-:3 - 0 9
              •,                                                                      ~IJ.O)RA ~        LLEW
              \          ..       '~~':-- ..... -.                                Printed/stamped name of Notary.


                                            THE STATE OF TEXAS     §
                                                                   §
                                            COUNTY OF WEBB         §

                                                  This instrument was acknowledged before me on the 't'-II- day of
                                            January, 1988, by GENE S. WALKER. General Partner of Vaquillas Ranch Co.,
                                            Ltd .. A Texas Limited Partnership, on behalf of said partnership.


                                                                               ~~~~,,;y
                                                                                    an
                                                                                 NOtarYUbfc in           or
                                                                                 The State of Texas.
                                                                                 My COlllllission Expires 7- 3-89
                                                                                     L4tJt<A      13-4 LLevJ
                                                                                 Printed/stamped name of Notary.

                                            THE STATE OF TEXAS     §
                                                                   §
                                            COUNTY OF WEBB         §

                                                 This instrument was acknowledged before me on the          Cf 'I-k-
                                                                                                               day of
                                            January, 1988, by EVAN B. QUIROS, General Partner of Vaquillas Ranch Co.,
                                            Ltd., A Texas Limited Partnership, on behalf of said partnership.


                                                                                 ~ ublic in and for
                                                                                 The State of Texas.
                                                                                 My Commission Expires    7-3-89
                                                                                     LA IJi<A     &4 LLCJyj
                                                                                 Printed/stamped     name       of     Notary.
                                                                              -12-
                                           GWB2/dm 130(!)
                                                                                                                                 317
    •   ..   '   .




\




             318
'.   .-
 - • .                              •
                   THE STATE OF TEXAS
                   COUNTY OF WEBB
                                        §
                                        §
                                        §
                                                                      •
                        This instrument was acknowledged before me on the         9+L
                                                                                   day of
                   January, 1988, by J. O. WALKER, JR_, Trustee for The Vaquillas Unproven
                   Mineral Trust.

                                                     ~,~           ~a~{2gd}-
                                                      Offi'YPu1C in ancrror
                                                       The State of Texas -                    CIa
                                                       My CORmission Expires:         7- 3-a     I

                                                             LA~R.A    t>,,,, LLe"J
                                                        Printed/stamped name of Notary.

                   THE STATE OF TEXAS       §
                                            §
                   COUNTY OF WEBB           §

                        This instrument was acknowledged before me on the g~ day of
                   January, 1988, by E. WALKER QUIROS, Trustee for the Vaquillas Unproven
                   Mineral Trust.

          -   '.
                                                     ~~2ht~~
                                                       The State of Texas.                      9
                                                       My Conmission Expires:        '7-:3- g
                                                             LlluRA BAU,£vJ
                                                        Printed/stamped name of Notary.


                   THE STATE OF TEXAS       §
                                            §
                   COUNTY OF WEBB           §

                        This instrument was acknowledged before me on the        9 --r/:...J
                                                                                       day of
                   January, 1988, by GENE S. WALKER, Trustee of the Vaquillas Unproven Mineral
                   Trust.


                                                       Notary Pu ~in and for
                                                       The State of Texas
                                                       My Commission Expires:        7-3- 'i?'7
                                                             LA ORA     3,0 LLE:vJ
                                                        Printed/stamped name of Notary.


                   THE STATE OF TEXAS §
                                        §
                   COUNTY OF WEBB       §
                                                                                     '-f-L;
                        This instrument was acknowledged before me on the        9  day of
                   January, 1988, by EVAN B. QUIROS, Trustee of Vaquillas Unproven Mineral
                   Trust.

                       -.:/~                         ~c~n~Y
                                                        The State of Texas                      a
                                                        My Commission Expires:        7-3-f? I
                                                             JvMR/i     J:3A LLevJ
                                                        Printed/stamped name of Notary.



                                                      -13-
                   GWB2/dm 130(1)
                                                                                                     319
•   •   -,   ,.




             ---  320
Co· ._




     , ,

                               COUNTY OF WEBB
                                                  •
                               THE STATE OF TEXAS §
                                                    §
                                                    §
                                                                                 .
                                                                                        •       o~
                                    This instrument was acknowledged before me on the ,-,-::-.:-'--0'==-, day of
                               January, 1988, by J. O. WALKER, JR., Trustee of Vaquillas Proven Mineral
                               Trust.



           {~?/
                    .,- <: :;        ~ j

                                  ..-"<;                             ~         ~~ OCk.ft---
                                                                     atarYUiC'in an for
                                                                       The State of Texas
                                                                       My Coomission Expires:        '7'-:3 - J?9
           ~
           \ .. /~                                                         LA ORA ~ UBvJ
                ~"
                   ,...       - ......                                 Printed/stamped name of Notary.
                              .

                               THE STATE OF TEXAS §
                                                     §
                               COUNTY OF WEBB        §

                                    This instrument was acknowledged before me on the  day of       9'f1-,
                               January, 1988, by E. WALKER QUIROS, ~: vaqu~ Proven Mineral Trust.

                                   _' t,
                                     "," ,
                                                                       Notary putiM in
                                                                       The State of Texas
                                                                                           an~                00
                                                                       My Commi ss i on Expi res:     7- 3 - tJ   f

                                                                          LfiIJ/(,q     13A L1..HvJ
                                                                       Printed/stamped name of Notary,


                               THE STATE OF TEXAS §
                                                     §
                               COUNTY OF WEBB        §

                                    This instrument was acknowledged before me on the               9-tV
                                                                                                    day of
                               January, 1988, by GENE S.WALKER, Trustee of Vaquillas Proven Mineral Trust.


           }'
               ",
                     ~.                    .~
                                                                     ~~~d~~l(y
                                                                       The State of Texas
                '"        .                                            My Commission Expires!        7-3-/?9
                                                                            i..JAOI2A   BA     U_~ vJ
           '   ..
               -:.        "                                            Printed/stamped name of Notary_
               "




                                  THE STATE OF TEXAS §
                                                     §
                               COUNTY OF WEBB        §
                                                                                                      ~'
                                    This instrument was acknowledged before me on the 9      day of
                               January, 1988, by EVAN B. QUIROS, Trustee of Vaquillas Proven Mineral
                               Trust.

                                                                     ~uh4         ~" O~.a-='
                                                                     Notary Public in and for
                                                                       The State of Texas                     OQ
                                                                       My Conmission Expires:         7-3-0       I

                                                                             0Mi(A         80'1     LLBv.j
                                                                       Printed/stamped name of Notary.




                                                                     -14-
                               GWB2/dm 130( 1)
                                                                                                                      321
•   •   .,..
            ,.




             322
..

     THE STATE OF TEXAS
                        • §
                          §
                                               •
     COUNTY OF WEBB       §

          Thi s instrument                              '1 cit .   day of
     Attorney·in-Fact
     corporation.



                                The State of Texas
                                My Commission Expires: 9-/8' -yf'
                                     L)e//«.   fl1<>. Y'A-"er27
                                Printed/Stamped name of Notary.




                              ·15-
     GWB2/dm 130(1)
                                                                            323
                                                                                                1



                          RAILROAD COMMISSION OF TEXAS
                           OFFICE OF GENERAL COUNSEL

   OIL AND GAS DOCKET                           IN THE VAQUILLAS RANCH (LOBO
   NO. XX-XXXXXXX                               CONS.) FIELD, WEBB COUNTY, TEXAS


                                 FINAL ORDER
                        AMENDING FIELD RULES FOR THE
                      VAQUILLAS RANCH (LOBO CONS.) FIELD
                             WEBB COUNTY, TEXAS
       The Commission finds that after statutory notice in the above-numbered docket
heard on September 23, 2010, the presiding examiner has made and filed a report and
recommendation containing findings of fact and conclusions of law, for which service was
not required; that the proposed application is in compliance with all statutory requirements;
and that this proceeding was duly submitted to the Railroad Commission of Texas at
conference held in its offices in Austin, Texas.

       The Commission, after review and due consideration of the examiner's report and
recommendation, the findings of fact and conclusions of law contained therein, hereby
adopts as its own the findings of fact and conclusions of law contained therein, and
incorporates said findings of fact and conclusions of law as if fully set out and separately
stated herein.

       Therefore, it is ordered by the Railroad Commission of Texas that Rule 2 of the field
rules adopted in Final Order No. XX-XXXXXXX, effective February 24, 1998, for the Vaqui/las
Ranch (Lobo Cons.) Field, Webb County, Texas, is amended as hereafter set out:

        RULE 2: No well shall hereafter be drilled nearer than FOUR HUNDRED SIXTY
SEVEN (467) feet to any property line, lease line or subdivision line and no well shall be
drilled nearer than ONE THOUSAND TWO HUNDRED (1,200) feet to any applied for,
permitted or completed well in the same reservoir on the same lease, pooled unit or
unitized tract. Provided, however, there is no minimum between-well spacing requirement
between a well being permitted at least 660 feet from the nearest property line, lease line
or subdivision line, and the other wells permitted, drilled or completed on the same lease,
pooled unit or unitized tract. A well being permitted at a distance less than SIX HUNDRED
SIXTY (660) feet from the nearest property line, lease line or subdivision line must be a
minimum of ONE THOUSAND TWO HUNDRED (1,200) feet from any applied for,
permitted or completed well in the same reservoir on the same lease, pooled unit or
unitized tract, or an exception to Rule 37 must be obtained.

       The aforementioned distances in the above rule are minimum distances to allow an
operator flexibility in locating a well, and the above spacing rule and the other rules to
follow are for the purpose of permitting only one well to each drilling and proration unit.
Provided however, that the Commission will grant exceptions to permit drilling within

 . '"   ,~,                                                                       EXHIBIT

                                                                                    A-5   254
OIL AND GAS DOCKET NO. XX-XXXXXXX                                                  Page 2

 shorter distances and drilling more wells than herein prescribed whenever the Commission
shall have determined that such exceptions are necessary either to prevent waste or to
prevent the confiscation of property. When exception to these rules is desired, application
therefore shall be filed and will be acted upon in accordance with the provisions of
Commission Statewide Rule 37 and 38, which applicable provisions of said rule are
incorporated herein by reference. Provided however, that persons who are presumed to
be affected by a request for an exception to the between-well spacing requirement shall
be limited to the operators and ownersllessees of tracts, lease or units within one mile or
less of the proposed well.

       In applying this rule the general order of the Commission with relation to the
subdivision of property shall be observed.

      Done this 2nd day of November, 2010.

                                                RAILROAD COMMISSION OF TEXAS

                                                (Order approved and signatures
                                                affixed by OGe Unprotested Master
                                                Order dated November 2,2010)




                                                                                        255
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          «Prev Rule                                                                                                    Next Rule»
                                         Texas Administrative Code
                              TITLE 16                ECONOMIC REGULATION
                              PART 1                  RAILROAD COMMISSION OF TEXAS
                              CHAPTER 3               OIL AND GAS DIVISION
                              RULE §3.38              Well Densities


          (a) Definitions. The following words and terms. when used in this section. shall have the following
          meanings. unless the context clearly indicates otherwise.

           (I) Commission designee--Director of the Oil and Gas Division or any Commission employee designated in
          writing by the director or the Commission.

           (2) Drilling unit--The acreage assigned to a well for drilling purposes.

           (3) Proration unit--The acreage assigned to a well for the purpose of assigning allowables and allocating
          allowable production to the well.

           (4) Substandard acreage--Less acreage than the smallest amount established for standard or optional drilling
          units.

            (5) Surplus acreage--Substandard acreage within a lease, pooled unit, or unitized tract that remains
          unassigned after the assignment of acreage to each applied for, permitted, or completed well in a field, in an
          amount equaling or exceeding the amount established for standard or optional drilling units. Surplus acreage
          is distinguished from the term "tolerance acreage,"in that tolerance acreage is defined in context with
          proration regulation, while surplus acreage is defined by this rule only in context with well density
          regulation.

           (6) Tolerance acreage--Acreage within a lease, pooled unit, or unitized tract that may be assigned to a well
          for proration purposes pursuant to special field rules in addition to the amount established for a prescribed or
          optional proration unit.

          (b) Density requirements.

           (1) General prohibition. No well shall be drilled on substandard acreage except as hereinafter provided.

           (2) Standard units.

             (A) The standard drilling unit for all oil, gas, and geothermal resource fields wherein only spacing rules,
          either special, country regular, or statewide, are applicable is hereby prescribed to be the following.

          Attached Graphic

             (B) The spacing rules listed in subparagraph (A) of this paragraph are not exclusive. If any spacing rule
          not listed in subparagraph (A) of this subsection is brought to the attention of the commission, it will ber-----,
          gi ven an appropriate acreage assignment.                                                                  EXHIBIT

                                                                                                                                        A-2
          (c) Development to final density. An application to drill a well for oil, gas, or geothermal resource on a               L:::::::::::::::.J
          drilling unit composed of surplus acreage, commonly referred to as the "tolerance well," may be granted as
                                                                                                                             234


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          regular when the operator seeking such permit certifies to the commission in a prescribed form the necessary
          data to show that such permit is needed to develop a lease, pooled unit, or unitized tract to final density, and
          only in the following circumstances:

           (I) when the amount of surplus acreage equals or exceeds the maximum amount provided for tolerance
          acreage by special or county regular rules for the field, provided that this paragraph does not apply for a
          lease, pooled unit, or unitized tract that is completely developed with optional units and the special or county
          regular rules for the field do not have a tolerance provisions expressly made applicable to optional proration
          units;

           (2) if the special or county regular rules for the field do not have a tolerance provision expressly made
          applicable to optional proration units, when the amount of surplus acreage equals or exceeds one-half of the
          smallest amount established for an optional drilling unit; or

           (3) if the applicable rules for the field do not have a tolerance provision for the standard drilling or proration
          unit, when the amount of surplus acreage equals or exceeds one-half the amount prescribed for the standard
          unit.

          (d) Applications involving the voluntary subdivision rule.

           (I) Density exception not required. An exception to the minimum density provision is not required for the
          first well in a field on a lease, pooled unit, or unitized tract composed of substandard acreage, when the
          leases, or the drill site tract of a pooled unit or unitized tract:

            (A) took its present size and shape prior to the date of attachment of the voluntary subdivision rule
          (§3.37(g) of this title (relating to Statewide Spacing Rule)); or

             (B) took its present size and shape after the date of attachment of the voluntary subdivision rule (§3.37(g)
          of this title (relating to Statewide Spacing Rule)) and was not composed of substandard acreage in the field
          according to the density rules in effect at the time it took its present size and shape.

            (2) Density exception required. An exception to the density provision is required, and may be granted only
          to prevent waste, for a well on a lease, pooled unit, or unitized tract that is composed of substandard acreage
          and that:

             (A) took its present size and shape after the date of attachment of the voluntary subdivision rule (§3.37(g)
          of this title (relating to the Statewide Spacing Rule)); and

            (B) was composed of substandard acreage in the field according to the density rules in effect at the time it
          took its present size and shape.

           (3) Unit dissolution.

             (A) If two or more separate tracts are joined to form a unit for oil or gas development, the unit is accepted
          by the Commission, and the unit has produced hydrocarbons in the preceding twenty (20) years, the unit may
          not thereafter be dissolved into the separate tracts with the rules of the commission applicable to each
          separate tract if the dissolution results in any tract composed of substandard acreage for the field from which
          the unit produced, unless the Commission approves such dissolution.

             (B) The Commission shall grant approval only after application, notice, and an opportunity for hearing.
                                                                                                                        235


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          The applicant seeking the unit dissolution shall provide a list of the names and addresses of all current
          lessees and unleased mineral interest owners of each tract within the joined or unitized tract at the time the
          application is filed. The Commission shall give notice of the application to all current lessees and unleased
          mineral interest owners of each tract within the joined or unitized tract. Additionally, if one or more wells on
          the unitized tract has produced from the field within the l2-month period prior to the application, the
          applicant shall include on the list all affected persons described in subsection (h)(I)(A) of this section, and
          the Commission shall give notice of the application to these affected persons.

             (C) A Commission designee may grant administrative approval if the Commission designee determines
          that granting the application will not result in the circumvention of the density restrictions of this section or
          other Commission rules, and if either:

              (i) written waivers are filed by all affected persons; or

              (ii) no protest is filed within the time set forth in the notice of application.

          (e) Application involving unitized areas with entity for density orders. An exception to the minimum density
          provision is not required for a well in a unitized area for which the commission has granted an entity for
          density order, if the sum of all applied for, permitted, or completed producing wells in the field within the
          unitized area, multiplied by the applicable density provision, does not exceed the total number of acres in the
          unitized area. The operator must indicate the docket number of the entity for density order on the application
          form.

          (f) Exceptions to density provisions authorized. The Commission, or Commission designee, in order to
          prevent waste or, except as provided in subsection (d)(2) of this section, to prevent the confiscation of
          property, may grant exceptions to the density provisions set forth in this section. Such an exception may be
          granted only after notice and an opportunity for hearing.

          (g) Filing requirements.

            (I) Application. An application for permit to drill shall include the fees required in §3.78 of this title
          (relating to Fees and Financial Security Requirements) and shall be certified by a person acquainted with the
          facts, stating that all information in the application is true and complete to the best of that person's
          knowledge.

            (2) Plat. When filing an application for an exception to the density requirements of this section, in addition
          to the plat requirements in §3.5 of this title (relating to Application to Drill, Deepen, Reenter, or Plug Back)
          (Statewide Rule 5), the applicant shall attach to each copy of the application a plat that:

            (A) depicts the lease, pooled unit, or unitized tract, showing thereon the acreage assigned to the drilling
          unit for the proposed well and the acreage assigned to all current applied for, permitted, or completed oil,
          gas, or oil and gas wells in the same field or reservoir which are located within the lease, pooled unit, or
          unitized tract;

             (B) on large leases, pooled units, or unitized tracts, if the established density is not exceeded as shown on
          the face of the application, outlines the acreage assigned to the well for which the permit is sought and the
          immediately adjacent wells on the lease, pooled unit, or unitized tract;

            (C) on leases, pooled units, or unitized tracts from which production is secured from more than one field,
          outlines the acreage assigned to the wells in each field that is the subject of the current application;
                                                                                                                          236


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             (D) corresponds to the listing required under subsection (g)(1)(A) of this section.

            (E) is certified by a person acquainted with the facts pertinent to the application that the plat is accurately
          drawn to scale and correctly reflects all pertinent and required data.

            (3) Substandard acreage. An application for a permit to drill on a lease, pooled unit, or unitized tract
          composed of substandard acreage must include a certification in a prescribed form indicating the date the
          lease, or the drill site tract of a pooled unit or unitized tract, took its present size and shape.

            (4) Surplus acreage. An application for permit to drill on surplus acreage pursuant to subsection (c) of this
          section must include a certification in a prescribed form indicating the date the lease, pooled unit, or unitized
          tract took its present size and shape.

           (5) Certifications. Certifications required under paragraphs (3) and (4) of this subsection shall be filed on
          Form W-lA, Substandard Acreage Certification.

            (A) The operator shall file the Form W-IA with the drilling permit application and shall indicate the
          purpose of filing. The operator shall accurately complete all information required on the form in accordance
          with instructions on the form.

            (B) The operator shall list the field or fields for which the substandard acreage certification applies in the
          designated area on the form. If there are more than three fields for which the certification applies, the
          operator shall attach additional Forms W-IA and shall number the additional pages in sequence.

             (C) The operator shall file the original Form W-IA with the Commission's Austin office and a copy with
          the appropriate district office, unless the operator files electronically through the Commission's Electronic
          Compliance and Approval Process (ECAP) system.

             (D) The operator or the operator's agent shall certify the information provided on the Form W-IA is true,
          complete, and correct by signing and dating the form, and listing the requested identification and contact
          information.

             (E) Failure to timely file the required information on the appropriate form may result in the dismissal of
          the application.

          (h) Procedure for obtaining exceptions to the density provisions.

           (1) Filing requirements. If a permit to drill requires an exception to the applicable density provision, the
          operator must file, in addition to the items required by subsection (g) of this section:

             (A) a list of the names and addresses of all affected persons. For the purpose of giving notice of
          application, the Commission presumes that affected persons include the operators and unleased mineral
          interest owners of all adjacent offset tracts, and the operators and unleased mineral interest owners of all
          tracts nearer to the proposed well than the prescribed minimum lease-line spacing distance. The Commission
          designee may determine that such a person is not affected only upon written request and a showing by the
          applicant that:

              (i) competent, convincing geological or engineering data indicate that drainage of hydrocarbons from the
          particular tracts subject to the request will not occur due to production from the proposed well; and

                                                                                                                        237


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              (ii) notice to the particular operators and unleased mineral interest owners would be unduly burdensome
          or expenSIve;

             (B) engineering and/or geological data, including a written explanation of each exhibit, showing that the
          drilling of a well on substandard acreage is necessary to prevent waste or to prevent the confiscation of
          property;

             (C) additional data requested by the Commission designee.

           (2) Notice of application. Upon receipt of a complete application, the Commission will give notice of the
          application by mail to all affected persons for whom signed waivers have not been submitted.

            (3) Approval without hearing. If the Commission designee determines, based on the data submitted, that a
          permit requiring an exception to the applicable density provision is justified according to subsection (f) of
          this section, then the Commission designee may issue the exception permit administratively if:

             (A) signed waivers from all affected persons were submitted with the application; or

             (B) notice of application was given in accordance with paragraph (2) of this subsection and no protest was
          filed within 21 days of the notice; or

             (C) no person appeared to protest the application at a hearing scheduled pursuant to paragraph (4)(A) of
          this subsection.

           (4) Hearing on the application.

            (A) If a written protest is filed within 21 days after the notice of application is given in accordance with
          paragraph (2) of this subsection, the application will be set for hearing.

            (B) If the application is not protested and the Commission designee determines that a permit requiring an
          exception to the applicable density provision is not justified according to subsection (f) of this section, the
          operator may request a hearing to consider the application.

          (i) Duration. A permit is issued as an exception to the applicable density provision shall expire two years
          from the effective date of the permit; unless drilling operations are commenced in good faith within the two
          year period.


          Source Note: The provisions of this §3.38 adopted to be effective November 1, 1989, 14 TexReg 5255;
          amended to be effective April 21, 1997,22 TexReg 3404; amended to be effective July 10,2000,25 TexReg
          6487; amended to be effective June 11,2001,26 TexReg 4088; amended to be effective February 13,2002,
          27 TexReg 906; amended to be effective September 1,2004,29 TexReg 8271


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                                                                                                                            238


50f6                                                                                                                           9/8/20143:17 PM
: Texas Administrative Code                                                        http://info.sos.state. tx. us/pls/pu b/readtac$ex t. TacPage ?sl=R&app=9& p_ d ...



                    HOM EI TEXAS RE GISTE RI TEXAS ADHIIUSTllATlVE CODE I OPEII MEETIIIG\ I HELP I




                                                                                                                                             239


6 of6                                                                                                                                            9/8120143: 17 PM
Figure: 16 TAC §3.38(b)(2)(A)                                     http://info.sos.state.tx.us/fids/ 16_0003_0038- I.html



         Figure: 16 TAC §3.38(b)(2)(A)



                                                     Acreage Requirement
                            Spacing Rule
         I                                      II                                         I

                                (1) 150 - 300                 2
                                                I                                          I
                                (2) 200 - 400                 4



                                (3) 330 - 660                10



                                (4) 330 - 933                20
         I
                                (5) 467 - 933                20



                            (6) 467 - 1200                   40



                            (7) 660 - 1320                   40




                                                                                                 240


I of I                                                                                               9/8120 143: 18 PM
                                                                                 · :: .,. ; iti "
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                                                                                               .... Urn':'':' . . . []fr h
                            CAUSE NO. 2014 CVQOOO 438 04                lO/~ NOV 2S       ,,) -4r L1~~:
VAQUILLAS UNPROVEN                        §      IN THE DlSTRlCT COPRT OF         PI'f I: S3
MINERALS
   ~       , LTD .,                       §                       "'tB8 e'IL.f::]
                                                                         OU1-ITy' ~
     Plaintiff,                           §                                     , rQAS
                                          §
v.                                        §      WEBB COUNT , E
                                          §
CONOCOPHILLlPS COMPANY,                   §
    Defendant                             §      406th JUDICIAL DlSTRlCT

              ORDER ON MOTIONS FOR SUMMARY JUDGMENT


       On October 30, 2014, Defendant's Motion for Summary Judgment and Plaintiffs

Cross-Motion for Partial Summary Judgment were heard. The Court, having reviewed

the motions, briefs, responses, competent' summary judgment evidence. and argument of

counsel, rules on these motions as follows.

       IT IS ORDERED, ADJUDGED, AND DECREED-that Defendant's Motion for

Summary Judgment is DENIED.

       IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Plaintiffs

Cross-Motion for Partial Summary Judgment is GRANTED. The Court DECLARES

that Defendant has breached the 26,622.79-acre Lease and the 6,740-acre Lease by

failing to release all acreage in excess of 40 acres for each producing and shut-in natural

gas well capable of producing in paying quantities.

      SIGNED this    z- S   day of November, 2014.



                                                                 -----------~
                                              OSCAR J. HALE, JR.
                                              JUDGE PRESIDING


ORDER ON MOTIONS FOR SUMM ARY JUDGMENT - Sole Page


                                                                                                              420
                                                                                                                                                                                            j ;,.                              ".
                                                                                                                                                                                            I ,' . .
                                                                                                                                                                 ro......II·'.,.I ..... :8•• I,,,n•• , f:n .• 11..... 11"". TIt.I.
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                                                          OIL, GAS AND MINERAL LEASE : '.v~1                                                                                                                       4GOPlcc324
                  TillS AI,Ilt:t;"U;NT ,..,,. tbi'                                                  15 th               •.,.,            . -lune,                                                                    III   74 ..... _
          VIIQUILLIIS MNCII COMPIINY, LTD., a limited partnership acting herein
          through its qeneral partners, J. O. WALKER, JR., GENE' S. WIILKER,
          E\(IIN D. QUIROS and E.•. NIILKER QUIROS (a/k/a Mary Elizabeth Quiros)
       Ltnor\Wh.'''.,CInI"rmu",._hun,rI<tml'l: .p. 0 •. Box 1086, Laredo, Texas 78040
       ••• CONTINENTIIL OIL COMPIINY                                                                                                                                 ,1....,·, WIlN".sr.TII,
                I, I ... ", I••• " "..... , . ,f TEN DOLLIIRS & OTIIER ,GOOD & VALUABLE CONSIDEi{l\'rION,,';_

       I' .10.00                                     ,. In hln4 paid. 01 Ihl "".ltl", herein lllo"itltd. ,n4 0' lb. ,.,,,,mtnU Dt .... _ htrtl" NIII ..i"..... htnbr .r,"t •.
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                                                                                       \
                            26,622.79 acres of land, more or less, situated in' Webb
                            County, Texas, more fully described in Exhibit "A" annexed
                            hereto and made a part of this lease for all relevant pur-
                            poses, including. limitations upon warranty as specifically
                            set out therein.




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                                                                                                                                                                                                            '_·.m, "''''I'S
     , .... : :.:. , ... ,,,1•.• I' ....·''''',.·•• h.1I ..... "1'1"." ..mnl.ll' 18 I.......·..... Ih., .... ' ·C'fI'l 1., .....·1'1.. 101 .. w ...... r., .. I.I, aunroh"M '0 , ...... "ta"....." n' . .... .. ...... , .1...
     h.,.1 I" '''1'1,,1 I'")·m,,., I,y ""fO .I,nll ""I ""1'('1 th(l ,;"rhll "f ,,! I,I" "'n ... h"J,I 0,,' 11(1 .. h PfI' OIntlu. It ai, (I, mo,. I'UI'U                                           I'n:;II.... If) ''',IlII,
                                                                                                                                                                                                              dui t;nlltinl
     an 1,::.,111 , .. r<:'r~i\'~ p;!,uwnl fu, lilt                                                                                                                                                                . .
               O. Tto(l b, ...,,,h I.,. L... wl' of                "n,
                                                               "loIilllllion .'i~'nl( 1. .. , .. "",1 .. , ~hllll n'" ....'n'k • '"rf(litllr~ or l<!I'm lnillion ot Ihi. I.. :o~. "or r:otlPe • ,.tminl'llinn
     or ,"\·.., .. "n .,r Ih., l"l il l(l .... ,,1,,<1 h.rt·!,,. nUf !~ I:r"",,,11 flo, " ,,11, .. 111.1;'111 h~,,·.'f ilO .... 1'1,,' .. or In ,IIlrt. In Ih .. 1'\'lInl l"ulI, "u"liII",. Ital ", ..·,,,I'·.n •
     • re n..1 "' " '" I",,. 1.,.1II1!' ·("""1,,,,14'<1 in '"ml,'inn". . . j,1l thl. Iln1... I ... ~""r .h,III nOI,f, I ......... In . , ilinll: of II., e.rtl r.l>ffi Ul'on .. "', r. ~I".n i n", a
     br"n r h hNI'"f. ",101 J ..' ....... ,f in .Irfnult •• h .. U I." ..., . i .,,. .111,' "h .. , ' ''-l'i l'l "f .", h ' n"n ...,;n .. h'rh 10 ,,,num"'" 11'1. ,,,mt,tjllnrr ...·ill, I~ .. ,,1·1i1·"',I}n'
     iml~' .... 1 I.,· VII'" ... f It". i""ru"'~nl. AiI,r 1M- ,Ii . ..",·.. r, of ni l. "" •• nr fl.Ihrr n,h".111 In roll,in", Q,p,"nli,iH oft ,";,1 I' rr ml .... I .... ~ . .. ~I nit d.'"''''''
     Ih .. ,.. r.",,'1' .... "." ...1 h., .. u ro .II" U" r~ .... n,.J.I, "n,.lffll 0,_1'1 .. , . bill in d ••,ha,.I". Ihi. nbll.'lion \I .... 11 In no .,,~nt be 'P,u jlN Itt d.·ill mo, . Ihan
     ",.r ".·If I ,.,- I .. , ,, ., '. , .. .. ... f , I... ,•••'" 10 •., ,,,,.1,,....·,,...1." " ... 1 ,·,.,."M.· ,.f 1 . ,·. ~ I, ... i".: ,.iI '" , " . );0,,' 'I" " "' i, ;.·, ",.. I " ,... ".·It ,,,., .;", ,.." "- I'''' ".,
     .rtl'''':' 1"!"UI..r .. " ,,' ,,, """'('11 100;; .. t '.0 IIo('r ... 0' th •• r.... rl'uinrd hl"l'untlu .lId ~ 1I 1 · "'. I' of I't .. lu~i" .. tI •• 0' oIh~r m i ne'" i n 1·;., i "l1 qu'''''Iin.
               Ifl. I ...... ·., h ... " " "'"r,"n" lind II l1r .~, 10 d.r.nd Ih, UII., 10 uld I,.n<l .nd 111ft..... thill 1.... _                  .1 it. ol.tion ml' ",a('h~'Jl~ "'" ta •. m',"" '''' ''
     or ,,11. .. , I... " .,! •• n . n, ,1 Inn.l ... ilto';, In .. h nl, ,,' in ,'nrl. "n.1 in .... nt U.aee 01......", it 110,,11 I.~ 11,10,,,.:,,' .. 01 to .II,h lil'n " 'i, h , i.: hl 10 (lrlf"n. 'I\no~ .nd
     al'l,l, 'rlllal. ", .. I ".)' ''I\l'·~ ",·r,u;n ... hr"'uln"" law.,d •• ti"f"lnll' .amf'. Wilh .."t ImIH.im,~nt of I.......,,·. ,i",h" IInd"r ,to .....nrrlln'r In . , .. n! nf
     til':"'" "r 10,1.·. il I, ".: .. ~.I 11".1 ,t Ihi, 1.n~f' ru,'l'n • I"•• inl u •• ' in 110. oil, •••• ,ul"hur. or oth~, minu.l. in .11 0, an, t,.,1 of 'Iid I.nd liolln
     II. ... nlon. "n.1 1II .• II,j",,1 f .... ~inll'l(I "'Inll' ,,,.. h.thl'r I ... ~ "" , · . in'I', ..1t I. h.,~,"
     p~~r-J;l~=IICa/
                                                                                                                                      .'...
                                                                                                                      Hi ...1 II' not).                           fI,
                                                                                                                                        no Inll"l'I' th .. '~in. ,h~'n II. .. I'}'II III" . OJoaIC
                                                      " t" rui,,1I' h "nl In, I'ul •• In " 'hlth th,. 1.11" ~u"PI' I.... Ihlln lu ~h full Inlp,ul. ,1'1,11 I... , .• i,1 '.n'~                      10. 1""I~'''i .. n      ,I!
         'h~ ;":",nt 11 .•·,,..n.
     . 10 ... 11                                      if IIU ~. r"~t' ... t t>, th i, 1(l1t.... L....H. I', II.. ,,·h(,llt .nd undl.';d... 1 f~ . imrol ....1.", Ih .. " in. All ,,,),,. It, inh r .. ·t -"" .. , ... 1 I"
     ~:,,~~·~·r_~i-~.:·'!':;":[. n;~\I"~~:.~: !;:~j'~'.:~~~I'~~'~~"'':;'~~;~:~~'li~~'p!;;;i:r ~~~';;~~'~:Ii~. ~:~ :=te~F:iI'::. ":,I::':..:'::'I'~...j:~" :~~!~','~.i.
     'h.rl un,I I"        .hall nOl IDlI," lr the , J"h l Clt 1"._ 10 ,~oJ Ut . ' o'.ll i....
                 11. Sto".. J,t l ... nPf I... {Ir .... ",rd fmm tompl,.inll' ... ilh an,. ul'r .... nr imro,l il'd fo .. ~nllnt 01 Ihi' I.".... from .. nnd"rtin", driJlinl/ n, ,. • •ltl.i,,1I'
     01·....";"". ItoC' ..... n u, h"m 1... ~I"r;l\.: n, 1 u .. I(U th"r"f,om I" rl'lI''''n 01 ~"nrf'" ... f nr inlll>ilitr 10 nbl.in or Itt UN! lf1",h,m."t 0, m ,lr:i.l. 0' b,
     uP",,,:.,,n of 'UTo''' ,nll)"l1". lin,. 1:... 1.,.1 0' 1110.'. I.. w                         tI,
                                                                                            "1'1,. 0,,1.,. ",I, or ,. ... ul,,'iol\ IIf I/o~,rnm. ntll l .ulhn,il,. th.n .hil .. .a 1""""'. '1. I ........••


                                                                                                                                                                                                                                                            -
     nt,Io,.:""o" In ".III: .lr ... ,'h aurl, ro.,.n.n, .h~U I.•• uol •• "d .. l. Ind I...,.~", .1'1,11 "uI 1,(1 linlol, In d.m",uI rto, f.iluT. to , .•mrol, th"""lIh ; . r.d Ihi,
     II'~'" .hall I.. f~ ·.· .. d.~1 .hil. ,.n.l .... I•. nll'"          I .... ~ ... il 1'" ... nl O'd I., lin, .uth t ... ""! from rnndurtin .. drillin .. or ,..n,l. ;n" ol,.r .. I,,"1 '" nr ""1'11
     ",' .• 1111" ... 10' toil or II.' f,"m Ih~ I,,,,,", I'r.n:tl .... ; "noJ Ihe IIIn, .1.,1., (..._ i, loG p ..... nl'd .h.n not be tlJllnltd. •• ain.t Ltn" •• nJ\h'fI~ In th;. kaaa                                                                         ,
     to tI,.       ",.n"'"      n'''' ''·,l h",.... I'''II'.




                              " ,




1-
                                                                                                                                                                                                                                              278
I
             12. It is mutually aqree~, notwithstandinq any other provision
                                                                                      .   '


          herein contained, as follows: "      .
             (al-- Should Lesse e be prevented from complying with covenants of       ,
          this leuse by reason of conditions or acts set forth in paragraph '.11',
          hereof, then Lessee agrees annually to pay to Lessor an amount equal        .
          to the delay rentals herein provided for during such period of pre·'
          vention, whether same be during or subsequent to the prlmary term,
          and such payment shall be made at the end of each year of preventi o n
          either to Lessor or to the depository above named for eredit to the
          account of Lessor.

             (b) This lease does not cover or include any right_o ar privilege
          of hunting or fishinq on uny purt of the above described' lund. and
          Lessee u yr ccs with Lessor that neither he nor his assigns .or ugcnts
          or employees of his 3ssiqns, will bring firearms or dogs upon the
    ,,-
          leased premises, and should this provision against hunting and fish-
          ing be violated by any agents, servants, employees or contractors of
          Lessce's assIgns, any such person so violating same shall have no
          further right ,to enter upon the leased premises, and such person shall
          be rcgarded as and shall be a trespasser on the premises of Lessor
          and be subject to the penalties imposed upon trespasser~ under the
          laws of the State of Texus.

I              (c)   I t is ' expressly ugreed and understood that, after production
          of oil and gas in conunercioll quantities is obtained from the leased
          premises, the minimum annual income to Lessor from payment of rentals,
          shut-in royalty and royalty on production shall be a sum of :lot lCHs
          than 1'wo (S2.00) Dollars per acre on the total acreage retained ami
          then covered by this lease, but this provision shall not impair th,~
          right and privilege of Lessee, his successors and assigns, to rele,lse
          and surrender any part of the above described leased premises as here-
          in provided. Lessee, his successors and assigns, shall determine
          wit!lin 90 days from the expiration of any lease year during which
          ro, cllties have been paid on actual production the amount of any defi-
          ciency, and shall within said 90-day period pay such defi.ciency to
          Les sor or deposit same to Lessor's credit at the depository herein-
          above designated. Default in the payment of such deficiency shall
          not operate to terminate this lease or any part hereof, but Lessee, his
          successors and assigns, agrees to personally p~y such deficiency to Lessor'
          at Laredo in \"'ebb County, Texas, together with any r~asohable cost, in-
          cluding attorney's fees, incurred by Lessor in collecting such deficiency
          if not paid within the 90-day period hereinabove provided for. ,

                                                                    460   ",tE 327'




                                                                                      279
                                                                                                                                  ,-
                 :,~j       !~~t:·./it~ ' st.lr.I..;.I.:lt; .lny (Jr:;' ~c 'n:-Ovi3io :\ h~:cc-in cO:'\t..l~r.':: d, t;,i          I)il.~
      'J·~ . i .l:\j :-.~~ .: r.ll l\! .I..>>! i:; ti ::li::c~ t::' olt. · rj.J.~ ~1.:1d ~.iulp~ui L!:1d ;,i~,~ .. ' .
       i ~ :··) ;h.: c..:!,j ·... !.:h oil .J.'1d 'jJ:.i, ..!.: .:,! d'J'~!> n:>t i:-•.::J.u:.i~ r.11.n·~ c.Jl.~ or:!\~= t:.:-: .•
      '.:<. ' .: 1:" .l;'\..! !;Ul;l:1t:: .:aad i:ti:".'::: .li:; :-:O '.i '.;c~a \ll:'~ oil ~~:1 ;i ';<l..i, ...t:..; L ·.! ...• v:
      ."': ~:. :~ ~{~ ...:;.. :::11": ·":~s ir c.) ~ tjL~ l ·: :: ,j.:: l.Jl..J .,:!S::'.J.:C :-: c:· c~":1 ti=- · ::.at.~·.!, ~1~rj, r ' ~ :; '~ : ':~:i




1-    ',.:-.:'.J h!..-..: :d l , hi::. r. ·: ,:i(5 ~tr. o .l :';':.i i.J:-.~ . ..'!.l~ mir. ·~!'.11::.o \:t: ~~c eft.l n (I ll 0:.1 ,
       ;~ ~
      ~i.~
               .!~ ~
               i:
                        ~~!~~ur
                       i~
                                        .l~~
                            ~x~r~s51y aqr0~d
                                                I~i~~r~l~           t~ ~t
                                                               t ~ .l:
                                                                             ~~I
                                                                          '~~s'
                                                                                      =c
                                                                     prod~cad ~Lth oil and :; l :i,
                                                                                      ~3
                                                                     u5ed ~er~in inclu~c~ (;!~.
      co:-.,";...!r.::i..lt..!, rii~tillatl! or .J.'1V ot!1er O.1;3eOUS su!:l::it.lr.cc or any o t: h~.c
      r.tLn <.! !'.'ll. pro..!uccd with oil <In:,;, qolS, inclucinc; sulphur.

              (0)      The right to pool un der pc1rac;ra?h '4' of this oil, gas clnd.
      n~~~:~l lease sh31l be limited to leasa or leases on l~nd belonqing
      t~ ~~ssor herein, or in "hich Lessor o~ns an interest in the oil, g3~ .
      ~n~ other ~iner~ls.
       ,,
               (=l Corrmencement                  of
                                    operati9ns for drilling of a well for oil or .
      glS       to a depth of 5,000 feet or less shall entitle Lessee to' a credit
      O~ tne rent~lsmquired under paraqraph '5' hereof only in the ~~dunt
      of Sl,Z80.00, but if operations for drilling are conducted to a depth
      b~lc .... S,~OO feet, such credit Sholl1 be increased from $i,280.00 to
      ~2,360.CO and Lessee shall, by an inscr~ent to be filed fc~ rcco~d
       ir: r:!"ic \J:ficc of the County Clerk of h'ebb County, select and desc::-ioe .
       G~O con~ig~ous acres as to which rentals are to ·be credited if tho
      ,,"~1.:!.. is drilled to a depth of 5,000 fe et or less, or select and de sc ribe
       i,LCO contiguous acres to, which rentals are to be credited if a w~ll            00
      i~ d=illed bdlow ddpth Ot 5,000 feet, and pay~ent of . delay rentals or           ~
      production of oil, gas and other minerals is to be required in o=cer               ~
      to ~cntinue the lease 1n force and effect as to the remaining acreaqa,             ~
      ~nd su:h payment or production shall eli~inate requirement to select
      ~c:es in accord~nce with above provisions.

              (g)        ht the end of the primary te~ hereof, Lessee covenants an~
      ~G=ces            to execute and deliver to Lessor a written release of any a~ d
       .!ll portions ot this lease which have not been drilled to a densi,,:~' of
        ~~ l~dst 40 acros for each producing oil well and 640 acres tor each
..      o~~=~ci~g or shut-in g~s well, except that in c~se any rule adoptee




I
       by th~ Railroad Cor.unission of Texas or other regu1atinq autho:-icj" ~ol.·
       any field on this lease provides for a spacinq or proration establish-
       inG' dif':erent units of acreage per ,.,ell, then such established di:::eront
       unit~ sh~ll be held under this lease by such production, in lieu of the
       ':0 3:id 6~0-d.cre units above r.tantio:1edi provide\!, however, that i! Zo. t
       such Colt!! lessee is enc;aged in drilling or reworkinq operatio:1s t~E.· cate
        to :' the ~xecution and delivery of such releas~ shall be postponed e.;'I d
        t : ~~ entire lea3~ shall renJ.in in force so long as operJ.tions on 5.t :' :; well
      c:" I,. ~lls are prosecuted with reasonable diliqenc~, ar.::! if, a~t~r T:.::~
      c ; ~::-. ;Jlet!.on or abandon;:i\ent of any such well Lessee cornr.tences the d=i 111n;
      of. .JJ) dl!ditional well within tlinety (90) days from the co~?l9tion CJ::
      abJ.ndor'J:~ent of the preceding well, 0:' continuously conduct.s 0=':'1:..:.,:;
      o~~ratio:is in good faith and with reasonable diligence on s~id l~~;~
      \t/~thoL!t ~::''1 cessa~i.on for lO:1qer tha;'l Ninety (90) days, said l~as ·! 5 .1;t!!
      r'~;-:.l ':'r:. L .... :;,;11 :o=ce anc. effect d~::in9 such drillir:g- o?ecatio:'.s a:-.',;. .i.:1~il
       r.: ;-.2' ·.!:1C 0 :: ~li net'l ( c;lO) daY:i .J:t.ec tr.e coo:.pleti'On or abanc.o:\.;;a:-at c : !"";-:.e
      :i::.)l ·... e .:. .:., ...l ~ h'nic;' t L7.e. Lessee :;hall e x sc:.!t.e ar.c! d~li'/ar to :..~s:; o :.- said
     ! ~ rit: 0 n :~~~13e. r cl~dsinq all portio~s of th2 l~ase not th~~ 30 ~ ~v~lo~ed.

              (Ill     I t is .J lJ rc.· ed that where the Lessee hcreunuer cntcrs into .J ' ;015 !
     pur cj)oJ.~i(!    contrclCl w ith .J th i rd party culling for a price olt the wellhc3d
     .Jt le .l st cquoJl to the tDcn iJest obt.:.ainable price for ":las of the san.\~ or
     sir.1i t .:.. r i).T.U. content at th e wellhead in \iebb County, that the <Jus !'rice
     so p rc.Nicied for i'n such c ontract silall be considered to be the mol rh.· t v.Jl ue
     o f th c' (jol~ fo r the pUQ)()SC 5 of computing t he royalty on 'JolS hcrcund,!r;
     l.l rovl(lcd LCS 5CC shall not e llter in to any gas purchase with a third P;l.rt'l
     aurinq t.he t er m of t h is l ec1~c exce p t and unless such qas purchase COOl:ract
     cont a ins specific provi s ion for rcdctcrmin c1 tion oC price con si stent with
     tilL' iir'st s e ntence in this polra<Jr~1ph, be ing the then best obtc1i nab ll! j,ricc
     inr 1)":'5 olt the wellhead in the area .lnu thClt such C)ilS purchase cont 1",lc t
     SJ,.l ll I'C"viuc tholt r c d<'tl ~nd n.ltion be made ~t intervals no q rc<ltcr tll .ln
     two (l) yc.1rs .1j>art.



J             (d              a'lrc cs t o f ill ~111 :;1 11 :">)) p i tH Clnd leve l lht' !;.WI., \"';" '; 1
                       J.(!s :; (~e
     U,,':' h.lve (.'t·.I!lod to ht!       U:il!d ,111(1 to re:'lorc thu l,and to .l:i n". ll' i t:i
     nri'illhtl :.ti,tu ,III i H pr.u~ ti( ; 'l i, l o ..lfld to P ;I\' fur d.ll:"\'I ,':1 l , ' t Ill' :;ul'l.a·'~·
     (,1' l!I!.: 1.1I1d •• nd llll..' iUlpl'lIV'·I ; h.~lItn, \.... l.ll'r wt...dl!i, 'Jrowin'l cr op: . .Ilhi 11\,,·-
     fito ck lhecoon, iH\U to .uti OthCl' pcr :.ona l property uf lotHHH .•r, V,hJuil i· l!.>




                                                                                                                                                            280
        Itanch Company, r,ttl., nccaRjoned by·, arising out of, or resulting .from
        operations by Lessee, his olgcnts, employees or indepcmdentcontractor~.
        on the land hereby leased to Lossee. Lessee also agrees, when request I,d
        in writincJ by Lessor, to divulqe to Lessor true· and correct informaliidl
        as relJuested by Lessor as to all drilliny, producing and marketinq 01'(·1·,1-
        t ions conducted under this lease and to furnish to Lessor copies of .I i                                                      j

        eleetric well logs taken h~rC!under: provided, however, Lessee shall m,t
        be (1)1 iqatcd to release such information until it has been released t l '
        the industry.

           IN \-.JITNESS WIIEREOF, this instrument is executed on the                                                da~e     first
        aLu'/e wr i t ten ~


                                                                                           VAQUILLAS RANCII COMPANY, LTD.



                                                                                           BY"J+i~~~~~~-q~~~,
                                                                                                         «;Ieneral
                                                                                                                            partner



                 ~-
                              ~

                                  ..          ~

                                              !.
        r:
        I,
                 -.        L


                           ,
                            "

                                  ,-
                                              ••

                  '"," .-
        l ,-,
                 .... .
                 ~.,

                    ,.
                  --,
                                                                                           BY,   t. {(lalkll ~Ln
                                                                                                 E. WALKER QUIROS, a general
                           "                                              \                                            partner


         STATE OF TEXAS

        COUNTY OF WEBB                                         I
                                                                              .
                BEFORE ME, the undersigned authority, on this day personally appeared
        J. o. \;ALKER, JR., EVAN B. QUIROS and E. WALKER QUIROS, members of th.,
        partnership firm of VAQUILLAS RANCH COMPANY, LTD., known to me to be the
         persons whose names are subscribed to the foregoing instrument, and                                                          ~lck­
        nowledged to me that they executed the same as the act of VAQUILLAS JU'NCH
        C01>WANY, LTD., a limited partnership,                                        for the purposes and considerat:ion
        therein                 cxp~essed,                          andm the capacity therein stated.
                (lj\iE~'-m;DE~'MY                                  llANO AND SEAL OF OFFICE, this the         .IJf'~L day   of Jun<>,1974 •
                                               .    ~     '.

    "                                                                              ~        ---?        _d"'~
                                                     ,                               -Notary Public, Webb County, Texas

                                       .. '    .   .:.


        s'rA1'E Ot· TEXAS

        COUNTY OF, WEBB

                DEFORE Mr., the undersigned authority, on this day personally appeared
        GEUt:            S.            ~IALKI:R,                   a member of the partnership ,'irm of VAQUILLAS RANCH
        COfo.1PANY, LTD., known to me to be the person whose name is subscribed to I
        the for.q'golng instrument, and acknowledged to me that he executed the
        same as the act of VAQUILLAS RANCII COMPANY, LTD., a limited partnership,
"
        for ·the PUClJOSeS and consiucrcltion therein expressed, and in the capacity
        therein state~.t
                GIVEN U\IDER.HY llANO AND SEAL OF OFFICE,                                           this the .(i>1'day of Jun".1974 •
                                          ."       ....
                          .......
                                                                                       .. ~~---r?'~::;:;::::;;cc~
                                                                                  ~-;-;:-
                                                                                                                                  __ _
                                                                                       Notary PubliC, Webb Coun ty, 'l'cxas




                                                                                                                                              281
                                 "':'-#-
                                 ~
                                         c;3               .         EXHIBIT "A"

                             ~                           ASSTRAeT          CERTIFICATE          GRANTEE
                             It~9                          1110 .              1158            eeso • ReNe              6~O , O
                             It51                          1112                1159            eeso , ReNe              6~0.0
                             1651                          2876                1159            w.   H. Taylor           64').0
                             It61                          1122                1164            eeso     'ReNe           640.0
                             166)                          112 )               1165            eeso     & ReNe          640.0
                             16J)                          132)                4/808           ee ,     SF              640 . 0
                             16)~                         2252                 4/808           ee &     SF              659.96
                           1665                           '124                  1166           eeso     & ReNe          640. 0
                    5.1/1 It66                            2253                  1166           eeso     • ReNG          328.7S
                    N. I/2 1666                           )142                  1166           eeso     , ReNe          )28 . 7 ~
                            468                           2255                   236           AS ,     "               659. II,
                            467                            799                   236           AS ' ,   "               640 . 0
                                                                                               TC Ry .                  640 , 0 __
                           16)5                           1797                    17
                            865                           1438                  1212541        H , eN                   640 . 0
                           168)                           1115                 '1175           eeso & ReNe              640.0
                           1691                           1267                 5446            Ge & SF                  640.0
                           1696                           2418                 5448            ee & SF                  640.0
                           1695                           1268 ,               5448            ec   & SF                640 .0
                            279 (pL only)                 135)                 3702            ee , SF                  458.1
                           1004                           2421                 21105           J . Poltevent            634.58
                           It92                            2~19                5446            ee • SF                  t11 . 04
                           169)                            1269                5447            ec& SF                   640.0
                           2112                            2.20 & 192$           631           8. F. James              627.12
                              276~ ·                      ,2552                3700            e(   & SF              "640 . 1)-
                              228                         '2550                 1344           e(SO     &    ReNe     - 6)6 . 9)
                              227 -                        11 ))<              1344            eeso     &    ReNe       640.0
                              988                          2593                21103           J. Poltevent             637,10
                              981" .                       206'1               2/103           J . Poitevent            640.0
                              2]) ' _                      1141                1)49            CCsO     &    ReNe       640 . 0
                              275 ','                      1336                3700            ee   &   SF              640 . 0
                              277'                        ~1Jl7                3701            e(so & ReNe              640.0
'1                  5. 112    ~I, 8 1 ~ck2
                                25, Sbck 2
                                                           104}.
                                                           10102
                                                                                453
                                                                                452
                                                                                               eeso & ReNG
                                                                                               eeso & ReNe
                                                                                                                        320.0-'
                                                                                                                       640,0    ~~,
                                                                                                                                          C




•
                              :2)2 '                       2148                1346            eeso & ReNe             462.70   rflC
                              2)3"-                        1117                1347            eeso & ReNe             455.9 -.  .:..:

-,                  H. I/2      51, S:ock 2
                               259 (p t . ollly)
                            '1955
                                                           1045
                                                           11 37
                                                           1328
                                                                                460
                                                                               1074
                                                                               4526
                                                                                )oi
                                                                                               eeso & ReNe
                                                                                               eeso & ReNe
                                                                                               ee   & SF
                                                                                               eeso & ReNe
                                                                                                                       320 . 0
                                                                                                                       600.0
                                                                                                                       640.0
                                                                                                                       652.2;
                                                                                                                                     ~.' i
                                                                                                                                 .". .
                              2057                          985
                           '2060 ·Ipt. only)               3329-30              30)            eT & "                  440 , 0   ~,'
                    LI/2 ' 2059 '                           984                 )0)            eT& "                    32h . o      --       :','
                    E. I/l-1953'"'                         1329                4527            ec& SF                   310 . 0      ~!
                           - 1627 (p t. only)              1324                4683            ee & SF                  160.0        ~ I ..•
                             .1629 ip t. only)             1275                4682            ee •     SF              192 . 6:; '. vU, > :.
                    W. II2 - lt62                          2230                1164            eeso & ReNe              319,3 , 9        .,. '
                    £0112 1648                             2441                1157            eeso & ReNe              325.7!;~ ; .
                    W.1/21648                              3301                1157            eeso & ReNe              315.7';               ,"
                                                                                452            R. 0, Barns ley          640 . 0' ·       ~\ .~ : ,.
                             -26, .Hock ,2*
                             2JJ ;                         3025                School          W. Brown                  27 . 3          ~i'
                    £.1/ 2. 1950"                          2~60                4526            ee   &   SF              327.3 L          .~- ~

             less o r's      WJrr;:.nt '!   hereunder as to all of Surveys 987.213.275,277,26, the E.1/2 'of I~SL
             E . 112 of 19S~ ,"11 ':; 401.9 acres out of Survey 233 (a1) e Kcept S~ acre,s out . of SW corner of s aid
             Sur. 233) is e~;')ressly Itmite~ to 112 of the executive rights In the 011 and gas .right!i In
             clnd un d~.r said lands, .)nd as to all of Survey 232 is expressly linlit-."d t o 4/S of the n :.c cutive
             rlqtll'" ill thl.' 9 i ; ,lnd gas rights.

             The f o llo\'tlng rhuts of surveys olre expressly excluded herefrom, viz.:

             (1)      Th e 5£ 1/4 o(   sw 1/4: SW 1/4 of NE 1/4 (80 acs.) and N 1/2 of SW 1/4 and SW 1/4 o f SW 1/.
                       (1/0 ae •. ) of eT&" Survey ' 2060.

                      TIlt.' W. 3/4 of CC&sr Survey 1627 described In O&C Lse. to, Daniel A. Pcdrou I datt·.!

I:
             (2 )
                      S"IJtcn lbcr 2 ~, 1973. il';i .11l1 '~ II(J('d,




I
             (})      AllY Polrt of .J s.urvcy II'loh:d herl,.,ln not 11l,IIHJt'd wIthin any sputlfl, fr.lctlnnlll 1, ' 1 " "'11\',,
                      p " ,· c.: I~dln~J the c.urv,'Y referencc,
             (/0)     1111' N( 1(,0 .Jcre", of Ge&Sf Surv,'y 179.
             (S)      Ult.d 11 a~ pcr thll E,O . Cla!I' ICll CjulKllvl ... lon of "'cord 'I PI.u R,'(. ol'd '. ='~. Webb r . hIllIY.
                      t: lllllolinl1l9 ltD .1crcs, bcln9 tlu' NOW 1/4 of SE 1/4 ' of r.CSD I. HGNG 511/\,'.,." ;>1,'1 ,
             (6)      /\11 of tb.! W. 320 .left''> u f S.iI,V·' .... 16]9 d c,. ~ rihl.·d clnd Includ"d In or. (; t·"" w D.!" j., J A,
                      1"' d""tllllil ll~d . Sl.' I"I· II'''' 'r ::.. !''J / I. as amended •

     .
     ~

         ,
                                                                                                                                         282
                                                                                                        Filed
                                                                                        9/8/20144:12:20 PM
                                                                                           Esther Degollado
                                                                                               District Clerk
                                                                                               Webb District
                                                                                       2014 CVQOOO 438 D4

                            CAUSE NO. 2014 CVQOOO 438 D4

VAQUILLAS UNPROVEN MINERALS,                    §   IN THE DISTRICT COURT OF
LTD.,                                           §
Plaintiff,                                      §
                                                §   WEBB COUNTY, TEXAS
v.                                              §
                                                §
CONOCOPHILLIPS COMPANY,                         §   406th JUDICIAL DISTRICT
Defendant

                            AFFIDAVIT OF DINO O. SMITH

STATE OF TEXAS               §
                             §
COUNTY OF WEBB               §

       Before me, the undersigned authority, on this day personally appeared Dino O.
Smith, who, after being placed by me under oath, stated the following:

     1. "My name is Dino O. Smith. I am over eighteen years of age, am of sound mind,
        have never been convicted of a felony or a crime involving moral turpitude, and I
        am fully competent to make this Affidavit. I have personal knowledge of the facts
        stated in this Affidavit, and they are true and <;orrect.

     2. I am a member Management Committee of Vaquillas LLC. ("Managing
        Member"), the general partner of Vaquillas Unproven Minerals, Ltd.
        ("Vaquillas"). I have served on this board since January 2012. I am involved in
        various aspects of the operations of Vaquillas, including the day to day
        management of the various mineral interests owned by Vaquillas. These
        responsibilities include, but are not limited to:
            a. planning and directing of Vaquillas Energy department activities, policies,
               objectives, and initiatives according to the mission of the organization,
            b. ensuring the department meets budgeted financial goals and objectives,
            c. negotiating leases, easements, surface use agreements, and other contracts,
            d. reviewing lanalyzing existing agreements, contracts, abstracts and title
               opinions, and
            e. developing and maintaining a functional on-line energy library.
         In order to carry out these responsibilities, I have had to become familiar with the
         business records and record keeping practices of Vaquillas.

     3. Except as to royalty interests in production from certain wellbores, Vaquillas


                                                                       IRX'~nIT I
        Unproven Minerals, Ltd. is the successor to the entities that were original lessors

AWIDA vcr OF DINO O. SMITH                                                           PAGE<
                                                                                          273
      to Continental Oil Company and Conoco, Inc. of the oil and gas leases set out
      below.

                          BUSINESS RECORDS AFFIDAVIT

   4. As a member of the board of Vaquillas LLC and in my capacity of manager of
      mineral interests of Vaquillas, I have personal knowledge regarding the records
      and recordkeeping practices of the company and am qualified to attest to the
      authenticity of the companies' business records.

   5. The documents listed below and attached as exhibits to this Affidavit are records
      from Vaquillas. These records are kept by Vaquillas in the regular course of
      business, and it was the regular course of business of this company for an
      employee or representative of the company, with knowledge of the act, event or
      opinion that was recorded, to make this record or to transmit the information to be
      included in these records. These records were made at or near the time or
      reasonably soon after the act, event, condition, opinion, or diagnosis that was
      recorded. These records are exact duplicates ofthe originals."

      Exhibit B-1: June 15, 1974 Oil, Gas and Mineral Lease between Vaquillas Ranch
                   Company, Ltd., a limited partnership acting herein through its
                   general partners, J.O. Walker, Jr., Gene S. Walker, Evan B. Quiros
                   and E. Walker Quiros (a/k/a Mary Elizabeth Quiros) and Continental
                   Oil Company for 26,622.79 acres of land, more or less, situated in
                   Webb County, Texas.

      Exhibit B-2: November 1, 1987 Oil, Gas and Mineral Lease Amending Oil, Gas
                   and Mineral Lease dated June 15, 1974 (As Amended) between
                   Vaquillas Ranch Company, Ltd.; Vaquillas Unproven Mineral Trust;
                   Vaquillas Proven Mineral Trust; acting by and through its general
                   partners, J. O. Walker, Jr., E. Walker Quiros, Gene S. Walker and
                   Evan B. Quiros, and Conoco, Inc., Lessee for 26,622.79 acres, more
                   or less, situated in Webb County, Texas.

      Exhibit B-3: November I, 1987 Oil, Gas and Mineral Lease between Vaquillas
                   Ranch Company, Ltd.; Vaquillas Unproven Mineral Trust; Vaquillas
                   Proven Mineral Trust; acting by and through its general partners, J. O.
                   Walker, Jr., E. Walker Quiros, Gene S. walker and Evan B. Quiros
                   and Conoco Inc. for 6,740 acres, more or less, situated in Webb
                   County, Texas.




AFFIDAVIT OF DINa O. SMITH                                                        PAGE 2
                                                                                        274
-
                             RAILROAD COMMISSION OF TEXAS
                              OFFICE OF GENERAL COUNSEL

    OIL AND GAS DOCKET
    NO. XX-XXXXXXX

                                 FINAL ORDER
             CONSOLIDATING VARIOUS FIELDS INTO A NEW FIELD CALLED
                 THE VAQUILLAS RANCH (LOBO CONS.) FIELD AND
                        ADOPTING FIELD RULES FOR THE
                     VAQUILLAS RANCH (LOBO CONS.) FIELD
                             WEBB COUNTY, TEXAS

           The Commission finds that after statutory notice in the above-numbered docket
    heard on October 8, 1997, the presiding examiner has made and filed a report and
    recommendation containing findings of fact and conclusions of law, for which service was
    not required; that the proposed application is in compliance with all statutory
    requirements; and that this proceeding was duly submitted to the Railroad Commission
    of Texas at conference held in its offices in Austin, Texas.

           The Commission, after review and due consideration of the examiner's report and
    recommendation, the findings of fact and conclusions of law contained therein, hereby
    adopts as its own the findings of fact and conclusions of law contained therein, and
    incorporates said findings of fact and conclusions of law as if fully set out and separately
    stated herein.

            Therefore, it is ordered by the Railroad Commission of Texas that the following
    fields located in Webb County, Texas, are hereby combined into a new field called the
    Vaquillas Ranch (Lobo Cons.) Field (No. q3~t 5 400                ):

                 BALTAZAR (LOBO 6 10470) FIELD                            05357400
                 BARNSLEY (LOBO 10900) FIELD                              05791 800
                 BARNSLEY (LOBO) FIELD                                    05791 400
                 BONEBRAKE (LOBO 6) FIELD                                 10419 500
                 BONEBRAKE (UPPER LOBO) FIELD                             10419 800
                 CALICHE CREEK (LOBO) FIELD                               14735225
                 CARR (LOBO 10100) FIELD                                  15874 350
                 CARR (LOBO 8300) FIELD                                   15874 235
                 CARR (LOBO 8600) FIELD                                   15874 250
                 CARR (LOBO 8700) FIELD                                   15874275
                 CARR (LOBO) FIELD                                        15874200
                 CARR (WILCOX 8200) FIELD                                 15874 600
                 CARR (WILCOX 8300) FIELD                                 15874 700
                 CARR (WILCOX) FIELD                                      15874 500
                 CATTO (LOBO 9900) FIELD                                  16405400
                 CATTO (LOBO 10200) FIELD                                 16405 500

                                                                                        EXHIBIT
                                                                                           A-4
                                                                                             245
    OIL AND GAS DOCKET NO. XX-XXXXXXX                                             PAGE 2

                 DESPARADO (LOBO 6) FIELD                             24394500
                 DIAMONDBACK (LOBO 3) FIELD                           24574400
                 GATO CREEK (9800) FIELD                              34238400
                 GATO CREEK (LOBO 1) FIELD                            34238 300
                 GATO CREEK (LOBO 1-SEGA) FIELD                       34238 325
                 GATO CREEK (LOBO 3) FIELD                            34238 350
                 GATO CREEK (LOBO 6 SEGMENT A) FIELD                  34238 375
                 GATO CREEK, SE (9800) FIELD                          34242 980
                 GATO CREEK, SE (LOBO 1) FIELD                        34242 500
                 GATO CREEK, SE (UP. LOBO STRAY) FIELD                34242 750
                 HIRSCH (LOBO 9746) FIELD                             41659075
                 JURASCHEK (LOBO) FIELD                               47740 500
                 JURASCHEK (WILCOX 11600) FIELD                       47740600
                 LUNDELL (LOBO 9200) FIELD                            55755 180
                 LUNDELL (LOBO) FIELD                                 55755 175
                 MCLEAN (LOBO) FIELD                                  59725500
                 MUJERES CREEK (LOBO 1) FIELD                         63668 300
                 MUJERES CREEK (LOBO 3) FIELD                         63668400
                 MUJERES CREEK (LOBO 6) FIELD                         63668500
                 MUJERES CREEK (LOBO) FIELD                           63668250
                 MUJERES CREEK, SOUTH (LOBO) FIELD                    63670500
                 NICHOLSON (LOBO 3) FIELD                             65469020
                 NORDAN (LOBO) FIELD                                  65934500
                 POZO (LOBO) FIELD                                    72838500
                 RANCHO VIEJO, S. (LOBO 6) FIELD                      74570 100
                 RANCHO VIEJO (LOBO 3) FIELD                          74568680
                 RANCHO VIEJO (LOBO 6) FIELD                          74568700
                 VAQUILLAS RANCH (LOBO 8100) FIELD                    93215450
                 VAQUILLAS RANCH (UP. LOBO STRAY) FIELD               93215600
                 VAQUILLAS RANCH (WALKER 8300) FIELD                  93215680
                 VAQUILLAS RANCH (WALKER 8600) FIELD                  93215690
                 VAQUILLAS RANCH (WALKER, N.) FIELD                   93215670
                 VAQUILLAS RANCH (WILCOX 11,100) FIELD                93215 700
                 VAQUILLAS RANCH (WILCOX 11,600) FIELD                93258750
                 VAQUILLAS RANCH (WILCOX 11,900) FIELD                93215 725
                 VAQUILLAS RANCH (YARSA) FIELD                        93258 900
                 VENADA (9800) FIELD                                  93436 800
                 VENADA (LOBO) FIELD                                  93436300
                 VERGARA (LOBO 9300) FIELD                            93537750
                 VERGARA (LOBO) FIELD                                 93537 500

      It is further ordered that the following rules are adopted for the Vaquillas Ranch (Lobo
Cons.) Field:




                                                                                      246
                                                                                                       r
                                                                                                       !
                                                                                                       I
    OIL AND GAS DOCKET NO. XX-XXXXXXX                                                  PAGE 3

       RULE 1:     The entire Lobo Formation from the Lobo Unconformity to the top of the Wills
Point (Midway Shale) and including the above listed fields in Webb County, Texas, shall be
designated as a single reservoir for proration purposes and be designated as the Vaquillas
Ranch (Lobo Cons.) Field.

        RULE 2: No gas well shall hereafter be drilled nearer than FOUR HUNDRED SIXTY
 SEVEN (467) feet to any property line, lease line or subdivision line and no well shall be drilled
nearer than ONE THOUSAND TWO HUNDRED (1,200) feet to any applied for, permitted or
completed well in the same reservoir on the same lease, pooled unit or unitized tract. The
aforementioned distances in the above rule are minimum distances to allow an operator flexibility
in locating a well, and the above spacing rule and the other rules to follow are for the purpose
of permitting only one well to each drilling and proration unit. Provided however, that the
Commission will grant exceptions to permit drilling within shorter distances and drilling more wells
than herein prescribed whenever the Commission shall have determined that such exceptions
are necessary either to prevent waste or to prevent the confiscation of property. When exception
to these rules is desired, application therefore shall be filed and will be acted upon in accordance
with the provisions of Commission Statewide Rule 37 and 38, which applicable provisions of said
rule are incorporated herein by reference. Provided however, that persons who are presumed
to be affected by a request for an exception to the between-well spacing requirement shall be
limited to the operators and ownersllessees of tracts, lease or units within one mile or less of the
proposed well.

       In applying this rule the general order of the Commission with relation to the subdivision
of property shall be observed.

        RULE 3: The daily allowable production of gas from individual wells completed in the
subject field shall be determined by allocating the allowable production, after deductions have
been made for wells which are incapable of producing their gas allowables, among the individual
wells in the following manner:

      TEN percent (10%) of the total field allowable shall be allocated equally among the
      individual wells producing from this field.

      NINETY percent (90%) of the total field allowable shall be allocated among the individual
      wells in the proportion that the deliverability of such well, as evidenced by the most recent
      G-10 test filed with the Railroad Commission bears to the summation of the deliverability
      of all proratable wells producing from this field.

        It is further ordered by the Railroad Commission of Texas that the allocation formula for
the Vaquillas Ranch (Lobo Cons.) Field be suspended. The allocation formula may be reinstated
administratively if the market demand for gas in the Vaquillas Ranch (Lobo Cons.) Field drops
below 100% of deliverability. If the market demand for gas in the Vaquillas Ranch (Lobo Cons.)
Field drops below 100% of deliverability while the allocation formula is suspended, the operator
shall immediately notify the Commission and the allocation formula shall be immediately




                                                                                                           11

                                                                                            247


                                                                                                       J
    OIL AND GAS DOCKET NO. XX-XXXXXXX                                              PAGE 4

reinstated. Failure to give such notice to the Commission may result in a fine (as provided for
in Tex. Nat. Res. Code §86.222) for eac day the operators fail to give notice to the Commission.

      Effective this   d/f ~ay of                                  ,   19q9 .




                                        COMMISSIO~
                                    a:zON




                                                                                        248
 CHARUS R. MAlTHEWS, 0iAJRMAN                                                                      LINDIL C. FOWLER, JR., G£Nf:.RA1. COUNSEL
 BARRY WII.L1AMSON, COMMISSIONER                                                                            LARRy BOREllA, Am: DIRECTOR
 CARoLE KEETON RYU.NDER, COIIMISSIONER                                                                                  OlL & GAS SE.cnON



                               RAILROAD COMMISSION OF TEXAS
                                        OFFICE OF GENERAL COUNSEL
                                                           February 24, 1998

             OIL AND GAS DOCKET NO. XX-XXXXXXX



             THE APPLICATION OF CONOCO INC. TO CONSIDER CONSOLIDATION OF
             VARIOUS FIELDS INTO A NEW FIELD CALLED THE VAQUILLAS RANCH (LOBO
             CONS.) FIELD, WEBB COUNTY


             Heard by: Donna K. Chandler on October 8, 1997

             Appearances:                                           Representing:

                     Ron Schultz                                            Conoco Inc.
                     Gary Compton
                     Kerry Pollard
                     Oracio Estrada

                    James Doherty                                           Sonat Exploration Co.-Houston

                    Don Rhodes                                              Hurd Enterprises LTD

                                       EXAMINER'S REPORT AND RECOMMENDATION

                                                   STATEMENT OF THE CASE

                   Conoco Inc. requests that 56 fields be consolidated into a new field to be called
             the Vaquillas Ranch (Lobo Cons.) Field. Conoco further requests that the following rules
             be adopted for the new field:

                    1.        Designation of the Vaquillas Ranch (Lobo Cons.) Field as the entire Lobo
                              Formation described as the interval from the Lobo unconformity to the Wills
                              Point (Midway Shale);

                .,,2.         Well spacing a minimum of 467 feet from lease lines and 1,200 feet
        ,'                    between wells.

                  . 3.        Allocation based on 90% deliverability and 10% per well .

       .,Gonoco also requests that the allocation formula in the consolidated field be
         suSpended.

1701 NORm CONGRESS AVENUE          *
roo 800-735·2989 OR roy 512-463-7284
                                        POST OFFICE Box 12967   *   AUSTIN, TEXAS 78711·2967
                                                       AN EQUAL OPPORruNITY EMPLOYER
                                                                                               *   PHONE: 5121463-6924 FAX: 512/463-6989
                                                                                                                                 250
                                                                                                                    http://www.rrc.state.tx.us
                                                                                                I
                                                                                                i
OIL AND GAS DOCKET NO. XX-XXXXXXX                                                  PAGE 2

      At the hearing, Conoco amended its application to include 4 fields which had not
been included in the Notice of Hearing and delete 4 fields which had been included in
the Notice of Hearing.

       After the hearing, Conoco requested that, in conjunction with the proposed 467
f-1,200' well spacing rule, that persons presumed to be affected by a between-well
spacing exception be limited to operators and ownersllessees of tracts, leases or units
within one mile or less of the proposed well. Notice of this request was given to aI/
operators in the fields and no objections were received. The examiner recommends
approval of the field consolidation, adoption of the proposed field rules and suspension
of the allocation formula.

                           DISCUSSION OF THE EVIDENCE

      The fields proposed for consolidation into the Vaquillas Ranch (Lobo Cons.) Field
were all discovered after 1981. All aFe Lobo gas reservoirs and most operate under
Statewide rules. The allocation formula in each field is currently suspended.

      There are currently more than 600 active wells in the 56 fields. Current average
production is 320 MCFD per well, with a range from less than 50 MCFD to over 1,200
MCFD. Cumulative production from the fields is over 1 TCF of gas.

       It is proposed that the consolidated field interval include the entire Lobo Formation
from the base of the Lobo Unconformity to the top of the Wills Point (Midway Shale).
The depth interval is generally approximately 7,200 feet to 9,700 feet.

      With consolidation, wells can be produced to a lower economic limit. Conoco
estimates that incremental recovery per new well will be a minimum of 25 MMCF.
Conoco plans to drill approximately 400 new wells in this area, resulting in additional
recovery of 10,000 MMCF.

       Because the proposed consolidated field consists of numerous productive zones,
a two-factor allocation formula is necessary. The proposed two-factor allocation formula
based on 10% per well and 90% deliverability satisfies this requirement.

      The allocation formula in each field is currently suspended. It is therefore
appropriate to suspend the allocation formula in the consolidated field ..

                                  FINDINGS OF FACT

      1.     Notice of this hearing was sent to all affected persons in the .subject area
             field at least ten (10) days prior to the subject hearing.

      2.     The 56 fields proposed for consolidation into the Vaquillas Ranch (Lobo
             Cons.) Field were all discovered after 1980 and are all non-associated
             Lobo gas reservoirs.




                                                                                          251
OIL AND GAS DOCKET NO. XX-XXXXXXX                                                  PAGE 3

       3.     There are currently more than 600 active wells in the 56 fields and current
              average production is 320 MCFD per well. Cumulative production from the
              56 fields is over 1 TCF of gas.

       4.     The Lobo Formation in this area is found from approximately 7,200 feet to
              approximately 9,600 feet.

       5.     It is estimated that a minimum incremental recovery of 25 MMCF per new
              well will result from the consolidation and approximately 400 new wells are
              planned for this area.

       6.     The proposed two-factor allocation formula based on 10% per well and
              90% deliverability is a reasonable formula which will protect the correlative
              rights of mineral owners in the fields.

       7.     The allocation formula in each field is currently suspended.

                                CONCLUSIONS OF LAW

       1.     Proper notice was given to all parties as set out in the provisions of all
              applicable codes and regulatory statutes.

       2.     All things have occurred and been accomplished to give the Commission
              jurisdiction in this matter.

       3.     Approval of the proposed field consolidation, adoption of the proposed field
              rules and suspension of the allocation formula will prevent waste and will
              not harm correlative rights.

                          EXAMINER'S RECOMMENDATION

       Based on the above findings and conclusions of law, the examiner recommends
approval of the field consolidation and adoption of the field .rules for the Vaquillas Ranch
(Lobo Cons.) Field. It is further recommended that the allocation formula in the
consolidated field be su:;pended.




                                                 Technical Examiner




                                                                                          252
 VICTOR G. CARRILLO, CHAIRMAN                                                                         LINDIL C. FOWLER, JR., GENERAL COUNSEL
 ELIZABETH A. JONES, COMMISSIONER                                                                               COLIN K. LINEBERRY, DIRECTOR
 MICHAEL L. WILLIAMS, COMMISSIONER                                                                                          HEARINGS SECTION




                                 RAILROAD COMMISSION OF TEXAS
                                           OFFICE OF GENERAL COUNSEL
           OIL AND GAS DOCKET NO. XX-XXXXXXX


           THE APPLICATION OF CONOCOPHILLIPS COMPANY TO AMEND THE FIELD RULES
           FOR THE VAQUILLAS RANCH (LOBO CONS.) FIELD, WEBB COUNTY, TEXAS


           Heard by:            Donna K. Chandler on September 23,2010

           Appearances:                                              Representing:

                      Jamie Nielson                                           ConocoPhillips Company
                      Greg Cloud
                      Tod Lippincott

                      Glenn Johnson                                          Chesapeake Operating, Inc.

                                       EXAMINER'S REPORT AND RECOMMENDATION

                                                      STATEMENT OF THE CASE

                  Field rules for the Vaquillas Ranch (Lobo Cons.) Field were adopted on February
           24, 1998 in Docket No. XX-XXXXXXX. The rules in effect for the field are summarized as
           follows:

                      1.        Designation of the field as the correlative interval from the top of the Lobo
                                Unconformity to the top of the Wills Point (Midway Shale);

                     2.         467'-1,200 well spacing;

                     3.         Allocation based on 90% deliverability and 10% per well.

                  ConocoPhiJIips requests that the spacing rule be amended to eliminate the between-
          well spacing requirement, as long as the well to be permitted is at least 660 feet from a
          lease line. If the well to be permitted is less than 660 feet from a lease line, then the well
          must be 1,200 feet from the nearest well on the lease, or a Rule 37 exception must be
          obtained;

                 '-This application was unprotested and the examiner recommends approval of the
          re:ql1ested field rule change.



1701 NORTH CONGRESS AVENUE
TDD 800.735·2989 OR TDY 512-463·7284
                                       *   POST OFFICE Box 12967   *   AUSTIN, TEXAS 78711·2967
                                                          AN EQUAL OPPORTUNITY EMPLOYER
                                                                                                  *   PHONE: 512/463·6924   FAX: 261
                                                                                                                                 512/463·6989
                                                                                                                       h_. 11 •• _-" ,"   "   ,   .
OIL AND GAS DOCKET NO. XX-XXXXXXX                                                        Page 2



                             DISCUSSION OF THE EVIDENCE

      The Vaquillas Ranch (Lobo Cons.) Field was formed in 1998 with the consolidation
of numerous fields. The field is classified as associated-prorated with AOF status. There
are 593 gas wells on the current schedule and no oil wells.

       The subject field is one of 11 fields in the Wilcox Lobo trend in Webb and Zapata
Counties for which a change in spacing rule is being requested. The Wilcox throughout
the area is highly faulted and as a result of the very complex geology, it is difficult to
develop the many separate fault blocks which comprise the various fields. Recent infill
wells are encountering fault blocks which have virgin pressure.

       Several fields in the area have already adopted a spacing rule which eliminates the
between-well spacing requirement. ConocoPhillips is proposing a between-well spacing
rule which is more restrictive. The proposed rule eliminates a between-well spacing
requirement as long as the well to be permitted is at lease 660 feet from lease lines. If the
proposed well is less than 660 feet from lease lines, then the well would require a Rule 37
exception if it is less than 1,200 feet from the nearest well. This rule would allow operators
to exploit interior portions of their leases, while still giving notice of a between-well spacing
exception to offsetting operators if the proposed location is less than 660 feet from the
lease line. Offset operators will be given an opportunity to protest an application if they
believe that such location would encounter a fault block which may extend to their property.

                                    FINDINGS OF FACT

       1.     Notice of this hearing was given to all persons entitled to notice at least ten
              days prior to the date of hearing.

       2.     Field rules for the Vaquillas Ranch (Lobo Cons.) Field provide for a
              designated interval, 467'-1,200' well spacing and allocation based on 90%
              deliverability and 10% per well.

       3.     The Vaquillas Ranch (Lobo Cons.) Field is classified as associated-prorated
              with AOF status. There are 593 gas wells on the current schedule and no
              oil wells.

       4.     The Wilcox throughout the area of Webb and Zapata Counties is highly
              faulted. As a result of the very complex geology, it is difficult to develop the
              many separate fault blocks which comprise the various fields.

       5.     Many fields in the Wilcox Lobo trend in Webb and Zapata Counties have
              rules which eliminate the between-well spacing requirement.




                                                                                              262
        At




 OIL AND GAS DOCKET NO. XX-XXXXXXX
                                                                                  Page 3

        6.     The spacing rule proposed by ConocoPhillips eliminates a between-well
              spacing requirement as long as the well to be permitted is at lease 660 feet
              from lease lines. The proposed rule will provide for ease of development of
              interior portions of leases.

                               CONCLUSIONS OF LAW

       1.    Proper notice of this hearing was given to all persons legally entitled to
             notice.

       2.    All things have occurred or been accomplished to give the Railroad
             Commission jurisdiction in this matter.

      3.     Amending the spacing rule for the Vaquillas Ranch (Lobo Cons.) Field is
             necessary to prevent waste and protect correlative rights.

                         EXAMINER'S RECOMMENDATION

      Based on the above findings and conclusions, the examiner recommends that the
spacing rule for the Vaquillas Ranch (Lobo Cons.) Field be amended as proposed by
ConocoPhillips.




                                              Donna K. Chandler
                                              Technical Examiner




                                                                                       263
                                 CAUSE NO. 2014CVQ000438 D4

VAQUILLAS UNPROVEN MINERALS,                      §        IN THE DISTRICT COURT OF
LTD,                                              §
                                                  §
         Plaintiff,                               §
                                                  §
v.                                                §        WEBB COUNTY, TEXAS
                                                  §
CONOCOPHILLIPS COMPANY,                           §
                                                  §
         Defendant.                               §        406TH JUDICIAL DISTRICT


  DEFENDANT CONOCOPHILLIPS COMPANY'S RESPONSE TO PLAINTIFF
VAQUILLAS UNPROVEN MINERALS, LTD. 'S FIRST SET OF INTERROGATORIES

         Defendant ConocoPhillips Company, acting pursuant to Tex. R. Civ. P. 197, responds to

Plaintiffs First Set of Interrogatories as shown on the attached pages.

         By Rule 11 agreement between counsel for Plaintiff and Defendant, ConocoPhillips' time

for responding to these interrogatories was extended to and including July 7, 2014.

         ConocoPhillips objects to the "Definitions" set forth on pages 4-5 of Plaintiffs First Set

of Interrogatories as follows:

         1.     ConocoPhillips objects to the twenty-one "Definitions" in their entirety for the

reason that they consist mainly of boilerplate "definitions," not tailored to Plaintiffs First Set of

Interrogatories. For example, they include instructions "to produce" documents, which is not the

proper function of interrogatories. As another example, the definitions include many words

never used in Plaintiffs interrogatories. ConocoPhillips declines to attempt to comply with

Plaintiffs boilerplate definitions, but instead will comply with the requirements of Tex. R. Civ.

P.195.

         2.     ConocoPhillips objects to the definitions of "documents" and "records." This

"definition" was obviously not written to be used with interrogatories because it talks about


                                                                                         EXHIBIT

                                                                                            A-3
                                                                                                  241
               which it relies established units of different sizes from 40 acres for oil wells and
               640 acres for gas wells, then that is wrong, and ConocoPhillips denies it.

14.    Identify by the Well name(s) used in the Partial Releases and the corresponding API
       Number each Well you contend entitles you to any Retained Acreage pursuant to the
       Vaquillas Leases.

       ANSWER: Objection: ConocoPhillips objects to this interrogatory because it is vague
           and ambiguous.

                       Subject to the foregoing objection, the Partial Releases described in
               Plaintiff s Definition 19 provide well names and numbers, and ConocoPhillips
               does not understand what more Plaintiff wants other than API numbers. The API
               numbers are equally available to Plaintiff from public sources as they are
               available to ConocoPhillips; but ConocoPhillips will attach, as Exhibit A to these
               Answers to Interrogatories, a map from which Plaintiffs counsel may derive API
               numbers.

15.    Identify by API Number any Wells located on the acreage covered by the Vaquillas
       Leases that were not drilled by or for Conoco under the Vaquillas Leases but in which
       Conoco owns an interest.

       ANSWER: Objection: ConocoPhillips objects to this interrogatory because it is
           incomprehensible, vague, and ambiguous. It asks about "Wells," which Plaintiff
           defines in its Definition 16 as "wells drilled by or for Conoco," but this
           interrogatory purports to inquire of wells "not drilled by or for Conoco," so the
           interrogatory contradicts itself. The interrogatory also appears to ask whether
           ConocoPhillips owns an interest in Wells on acreage covered by the Vaquillas
           Leases, but that are not subject to the Vaquillas Leases, yet Plaintiffs definition
           of "Wells" states they were drilled under the terms of the Vaquillas Leases.
           ConocoPhillips cannot be required to guess or speculate what Plaintiff is asking.

16.    Identify by API Number and rig release date the Final Well completed or abandoned
       during Conoco's drilling and reworking operations engaged in on and after November 1,
       1990 on the 26,622.79 Acre Lease.

       ANSWER:         The well was the Vaquillas A-7 249, API No. 42-479-41635.

17.    State the date you contend to be the 90th day after completion or abandonment of the
       Final Well at which time a written release of acreage was to be provided pursuant to
       Paragraph 18 of the 26,622.79 Acre Lease.

       ANSWER:         ConocoPhillips believes the relevant date was June 21, 2012.

18.    Identify by API Number and rig release date the Final Well completed or abandoned
       during Conoco's drilling and reworking operations engaged in on and after November 1,
       1990 on the 6,740 Acre Lease.


DEFENDANT'S RESPONSE TO PLAINTIFF'S
FIRST SET OF INTERROGATORIES                    -8
                                                                                                 242
                            PARTIAL RELEASE OF OIL AND GAS LEASE

STATE OF TEXAS                   §
                                 §
COUNTY OF WEBB                   §


        WHEREAS on June 15, 1974, Vaquitlas Ranch Company, Ltd., a limited partnership acting- therein
through its general partners, J.D. Walker, Jr., Gene S. Walker, Evan B. Quiros and E. Walker Quiros, as
Lessors, and Continental Oil Company, as Lessee, entered into an Oil and Gas Lease, recorded in Volume 460,
Page 324 of the Deed Records of Webb County, Texas, covering 26,622.79 acres of land, more or less,
hereinafter referred to as ~the Lease,· and;


        WHEREAS the Lease was revised, more particularly described in that certain Oil. Gas and Mineral
Lease Amending Oil, Gas and Mineral Lease dated November 1, 1987, as evidenced by said Memorandum of
Amendment to Oil and Gas Lease, dated June 16, 1988: recorded in Volume 1303, Page 879 in the Real
Property Records of Webb County. Texas.


        WHEREAS the Lease has also been amended from time to time. as reflected in the Public Records of
Webb County, Texas, and all references to the Lease herein shall be to the Lease as amended.


           NOW THEREFORE, in consideration of Ten Dollars ($10.00) and other good and valuable
consideration, the receipt of which is hereby acknowledged, ConocoPhillips Company, does hereby
RELEASE, RELINQUISH and SURRENDER unto the Lessor, all of its right, title and interest and estate in the
Lease SAVE AND EXCEPT THOSE LANDS AS MORE PARTICULARLY DESCRIBED ON THE EXHIBIT
"A," AND FURTHER DESCRIBED ON EXHIBITS A-1 THROUGH A-36 ATTACHED HERETO AND MADE A
PART HEREOF.


Provided, however, Lessee shall have and retain full rights of access and all easements of ingress and egress
over and across those lands covered by the Lease, including the lands which are hereby released, for the
production of oil and gas and operations in the acreage not hereby released, and Lessee shall not be required
to remove or relocate any pipelines. utilities, roads. tank batteries, or other surface equipment or installations
from any portion of the Lease or lands herein released for so long as same continues to be used for the
exploration, development or operation of such portions of the Lease that continue in force and effect


This instrument is binding upon and inures to the benefit of the parties hereto, their heirs, successors and
assigns.


Executed this      ) 1'th     day of   f.kaflj ,2014.


                                                 LESSEE:




                                                 ::~oc~
                                                         Michael P. Rose
                                                         Attorney-In-Fact




                                                            Volume: 3577 Page: 454 - 530
                                                            00e#1194188
                                                            Doc Type: PARTIAL RB.EASE OF OIL & GAS lEASE
                                                            Recocd Date: 21251201411:28:17 AM Record By: Mtc
199129-001                                                  Fees·$330.00.
                                                            Margie RamIrez Ibarra, Webb County Cieri!.
                                                                                                                     90
                                        ACKNOWLEDGEMENT


STATE OF TEXAS               §
                             §
COUNTY OF HARRIS             §

       ACKNOWLEDGED BEFORE ME, this            11Ie). day of   F...
                                                                 'bonnJ                      , 2014, by
Michael P. Rose. Attorney-in-Fact for ConocoPhillips Company, a Delaware (Corporation, on behalf of said
corporation.




199129-001

                                                                                                           91
                                                                                                                                                             OVERALL EXHIBIT "A"
                                                                                                                                                   CONOCOPHILLIPS COMPANY
                                                                                                                                             VAQUILLAS RANCH RETAINEO TRACTS 1-36
                                                                                                                                             CONTAINING A TOTAL OF 21,291.86 ACRES

                                                                                                                      J "i
                                                                                             r-l~"                             M
                                                                              f'1T"
                                                                                             I,              :~I!iI     A-I
                                                                           •                                          640.00             ,
                                                                           ,             :             j

                                                                      t
                                                                                                                       kr8S              '
                                                                                                                                    .J
                                                                       ___ "-2.                                                :
                                                                      ,    640.00                                              I
                                                                    .      AcrH:                                             :
                                                                    I~.                                              "_,,J
                                                                : , . rI'
                                                              ~.~
                                                              .}-
                                                                    ~-.'
                                                                      ,A-l'l
                                                               C------.... •• __ .J"ACr
                                                                                    515.~
                                                                                       ..,

                                                                                                                         !"l-                , --I,
                                                                                                             F""'---"                                    .~.
                                                                                                                              A-S
                                                                                                                                             f-------- ---\\..._._··-"l

                                                              ~
                                                                                                                 ~A 6
                                                     ~-----r-                                -                   6~;:
                                                                                                                             640,00
                                                                                                                               Acr.,.


                                                                     "i       '[-"-'l-
                                              I
                                                  , _ !-= . *~ ~:, ~f-'-"+"-"-'-"_' '-"1
                                                     L.

                                                           -r---                   A-I,                 Acres
                                                                                                                         A-7




                                                                                                                                     i
                                                                                                                                                    ',"-




                                                                                                                                                                                  "J~-          .. __ .J
              r   --T'-T--~---1:                                          : 6':~                      A 0               ..         _.J t36~~                   A 14            s1~~2._
             .
              .~::
                     I       I                                -·-·-+---r··-j6~O.OO
                                                                          :
                                                                          I
                                                                                     I
                                                                                     I
                                                                                                  ,   AcrO!!J
                                                                                                                      ~
                                                                                                                        =
                                                                                                                        All I                 Acres

                                                                                                                                                     A 18
                                                                                                                                                               S.:.:o;!O
                                                                                                                                                                   I.
                                                                                                                                                                              ~
                                                                                                                                                                                ~j64
                                                                                                                                                                                ""~
                                                              ---"1-
                   ._---                           "-J5                                    A-12                                                     615.92
                  A-J.4                           640,00                  :          ,6-40.00 Acras                   ---"11                        Ac               A-17     I----J
                  606.8<1
                   Acre!
                                                  Ac~                                                            :             :                    ,0.-19          635.73
                                                                                                                                                                     k/ll.8
                    _.    : , ._[        ! !                                                                                                        6':~~      r----:
                   ~j L...J,,-J L,,_ .. -L,,_ .. _L._ ..                                                                                       i.                ~:''-'-''l                                ~
                                                                                                                                                                 502.31



                                                                                                                                                    ,~9:o'.
                                                                                                                                                     Acral
                                                                                                                                                                  ;,:"
                                                                                                                                                                   Ac......
                                                                                                                                                                              ~,_~"_,, I    :
                                                                                                                                                                                                                     0          A-"
                                                                                                                                                                                                                         ~~.og ~~:-t
                                                                                                                                                                                                              :            -W,OD Ac.
                                                                                                                                                     A-2<C.
                                                                                                                                                    633.38                        ~~O+---t-··-··...,
                                                                                                                                                                                  Acres                   -J.      1.-30   I
                                                                                                                                                     A-25               618.~62!:rD5                          :    323.87 :
                                                                                                                                                    s:'~c;o i'f-":':'::::A=_i"F-t--'-"+'~~--i
                                                                                                                             r-----
                                                                                                                                             -t---+-~S~'~7'f"'-i"'~~;'rl
                                                                                                                                                    ...-26         ...-27         J~7::O
                                                                                                                                                                                                              .I           I
                                                                                                                             i                      635.36        614.74 I_~""~~~+;::;:;-r'---,-'_.J
                                                                                                                                                                              r 4~O~:1,         ~23t<C.1            !
                                                                                                                             1----                  kres           Acn!s
                                                                                                                                                                                  kru           Ac::res             !
                                                                                                                             iii                                              ;             ,             !         I
                                                                                                                             '--c.. . ...l." _.J..,,---L._ . ..L                                  ·--L j
                            GRAPIflC SCALE


                                    ( It!   f[[1 )




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                            11!PEf'lmI\eghn
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                                                    AND SURVEYING CO_
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                                            WWN.hoWIandcompanles.com
                                                                                                                                                              CONOCOPHILLIPS COMPANY
                                                                                                                                                               VAQUIUAS RANCH RETAINED
                                                                                                                                                                           TRACTS BASE HAP
                                                                                                                                                                           LEASE 199129-001
                                                                                                                                                                                  WE.aa COUNTY, TEXAS
      WARNING; BASIS OF BE.ARlNG: C.P.S. TK. So"th 20n .., NAD.-27.
      nas   Pl.Jl.T IoIAY HOT SHOll' AU. CIIOSStICS or PFEIJIfES Oft CABl£S. ~D Elfl)ljEEJIIH(:                                                                     H A
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                                                                                                                                                                                 I
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      NIl) ~c             co., IiC. ASSI..t-ItS NO RESPONSIBIlITY TO lOC\1£ ppElJl-£ Oft CAa£ ~cs.                                                                                                        CHECKED BY:           J.S.
      =~H:C~RE~~~~~~~.OIAt                                                                            fEE 0'M6SHP Oft
                                                                                                                                                                                                          JOB No.        22131-13
                                                                                                                                                                                                          SHEff;         1 OF     1



It\fICI'MNID\i1lR\lO'WG DUAAr>.OltI1\Iob>\2DlNllJI_lJ\27\ll_IJ.do.g.IJI/2Ol.2:].:I ....... _               PDf
                                                                                                                                                                                                                                            92
HONLAND
  ENGINEERING AND SURVEYING CO.

                                                 EXIllBIT "A-l"

                                                  FIELD NOTES
                                                      FOR
                                      CONOCOPmLL~SCOMPANY
                    VAQUILLAS RANCH LEASE 199129.{l01
                           RETAlNED TRACT 1
       (VAQUILLAS RANCH WELLS A·3 No. 61, No. 67, No. 199, No. 200, & No. 203)
                              640.00 ACRES

     A TRAer OF LAND CONTAINING 640.00 ACRES, more or less, being out of the VaquiUas
     Ranch Lease 199129·001, 26,622.79 Acres (Called), situated in Survey 1955, G.C. & S.F. R.R.
     CO., Abstract 1328, Webb County, Texas, and being more particularly described as follows:

     BEGINNING at a fOWld !h." iron rod next to a fence comer, which bears N 56°51'30" W, a
     dislance of 886.46 feet, from the Vaqui1las Ranch A 3 No. 199 Well;

     THENCE, N 89004'24" E, along an existing fence line, a distance of392.77 FEET, to a point
     for a deflection right;

     THENCE, N 89°17'59" E. continuing along said existing fence line, a distance of 1,379.80
     FEET, to a point for a deflection right;

     THENCE, N 89042'30" E, continuing along said existing fence line, a distance of 695.33 FEET,
     to a found 1 W' pipe at fence comer, for the Northeast comer hereof;

     THENCE, S OO~O'36" E, along an existing fence line, a distance of2,S33.32 FEET, to a point
     for a deflection right;

     THENCE, S 00°19' 10" E, continuing along said existing fence line, a distance of2,829.S2
     FEET, to a point for a deflection left;

     THENCE, S 00°20'17" E, continuing along said existing fence line, a distance of2,697.S8
     FEET, to a point, for the Southeast corner hereof;

     THENCE, S 89°39'43" W, a distance of 4,334.37 FEET, to a point for the Southwest comer
     hereof;

     THENCE, N 00°38'14" W, a distance of 4,273.09 FEET, to a point under an existing fence line,
     for an exterior comer hereof;

     THENCE, N 89°20'19" E, along an existing fence line, a distance of 1,910.21 FEET, to a fOWld
     Y.t" iron rod at fence comer, for an interior comer hereof;

     THENCE, N O()039'19" W, along an existing fence line, a distance of3,668.08 FEET, to a point
     for 8 deflection right;

     THENCE, N 00°33'14" W, continuing along said existing fence line, 8 distance of96.40 FEET,
     to the POJNT OF BEGINNING, containing 640.00 acres of land, more or less.

                               Basis of Bearing: G.P.S., TX. South Zone, NAO-27




                                                   SHEETlOF2
                        H;\HOWLAND\SURVEYING DEPARTMEN1\lobs\2013\l2131.1-13\22J31.1-J3.doc


                       www.howlandcompanies.com
 7615 N. Bartlett Avenue , P.O. 80)(451128 (78045) i Laredo, TX78041 P. 956.722.4411          F.956.722.5414
                   TBPE Firm Registration No. F-4097 I TBPLS Arm Registration No. 100464-00


                                                                                                               93
                                                              CONOCO PHILLIPS COMPANY
                            VAQUIUAS RANCH LEASE 199129-001. N RETAINED lRACT 1
                   (VAQUIUAS RANCH A-3 WELLS No. 61. No. 67. No. 199. No. 200. '" No. 203)
                                               640.00 ACRES
                                              WEBS coutm', TEXAS




       SURVEY 294
      ABSTRACT 2227
 -       •• -          •• --c:::;::;::;..<----




                                                                                            VAOUILLAS
                                                                                             RANCH
                                                                                           A-3 No. 61
                                                                                                        :0 VAQUILlAS
                                                                                                            RANCH
                      SURVEY 2096
                     D. C. FANNING                                        ,                   (SHL)       A-.3 No. 61
                                                                                                             (BHL)
                     ABSTRACT 2226
                                                                          '"
                                                                          ~

                                                                          t
                                                                          z                    SURVEY 1955
                                                                                        G.C. & S.F. R.R. CO.
                                                                                           ABSTRACT 1328
                                                                                        WEBB COUNTY, TEXAS
                                                                                                                                 WEST 1/2
                                                                                                                               SURVEY 1844
                                                                                                                              P.K. CONNOWAY
                                          N 89"20'19- E ...                                                                   ABSTRACT 2168
                                                                                                          VAOUILLAS     -¢-
                                                                                                   RANCH A-J No. 67


 AVAQUlllAS
 ¥  RANCH
    No. 211




                                                                     CONOCOPHILLIPS COMPANY
                                                              VAQUILLAS RANCH LEASE 199129-001
                                                                      26,622.79 ACRES (CALlED)
                                                                       RETAINED 840.00 ACRE UNrr
     SURVEY 1956
     H. E. BROCK                  !
 ABSTRACT 2560                   J:
                                 ...
                                 ~
                                               VAQUILlAS RANCH
                                              A-J No. 200 (BHl)-® VAQUILlAS RANCH
                                                                          A-3 No. 200 (SHL)
                                 z
                                                                                              VAQUJLl.AS -¢f)VAQUILLAS
                                                                                               RANCH             RANCH
                                                                                            A-3 No. 203      A-3 No. 203
                                                                                                (BHL)             (SHL)




r-~~--.'.--"--LT-"-'--------------"--"                                          __ __________________-,__JL__• _______ --------
                                                                                       ~

                    GRAPHIC SCALE

 T.-...............'"'""""",~~~T·
                          (Ill fEET)
                                                                                       SURVEY 2058
                                                                               C.T. & M.C. RR. CO .
                                                                                   ABSTRACT 2880
                                                                                                                               SURVEY 851
                                                                                                                               S.B. TURNER
                                                                                                                              ABSTRACT 1842
                       , 10<10 _ lacon.




                                                                                                           ww.
                                                                                                           UHIT UH£
                                                                                           - ,-            """ "'<£
                                                                                            -------        TIES
                                                                                            _  •• _        SURVEY UNE
 ~ a>.s1S OF BEARINC: COPS. Tx. South ZQl'1C, NAD.-27.
 TNS PlAT "'1'1' If'JT .5I-JJW ,ou CROss:tICS ~ I'F'£lJNES OR CIa!S. ~D ENClNtElllHG
                                                                          CfIOSSUj=
 Nf:J SUJM:1'IIC Co.. INC. ASSUIoIES HO II£SI'OHSItIUT'I' TO ~Tt ~D.I'tt OR c.oa.r
 ItO CU&I IS IIERD!T II.IDE ~ CUIRENT OR ...cn.w. S{g1CE/lt1/l~ f"E:E aMf£R$HtP OR
 I.LSSOR. lml 0R.0M'tC W« El<CU/SMl.'I' roo ~ CDII)JfY.
 ~ HOM.NIO ~ N'I;) SUIIV£I'WC co.. ..c. 2!lIlCl




                                                                                                                                              94
  ENGINEERING AND SURVEYING CO.


                                            EXHIBIT"A-2"

                                     FIELD NOTES
                                         FOR
                               CONOCOPHILLIPS COMPANY
                           V AQUILLAS RANCH LEASE 199129-001
                                        RETAINED TRACT 2
      (VAQUILLAS RANCH A-S WELLS No. 126, No. 166, No. 205, & No. 230)
                                             640.00 ACRES

    A TRACT OF LAND CONTAINING 640.00 ACRES, more orless, being out of the
    V.quillas Ranch Lease 199129·001,26,622.79 Acres (Called), situated in Survey 2057,
    C.T. & M.C. R.R. CO., Abstract 985, Webb County, Texas, and being more particularly
    described as follows:

    BEGINNING at a found fence comer post, which bears N 38°52'07" W, a distance of
    2,936.16 feet, from the V.quillas Ranch A-5 No. 205 Well;

    THENCE, N 89°22'34" E. along an existing fence line, a distance 0[3,669.76 FEET, to
    a found 60 D nail at fence comer, for a deflection right;

    THENCE, N 89°35'52" E. along an existing fence line, a distance of 1,477.59 FEET, to
    a point for the Northeast corner hereof;

    THENCE, S 00'37'35" E, a distance of 5,425.18 FEET, to a point, for the Southeast
    comer hereof;

    THENCE, WEST. a distance of 5,187.42 FEET. to a point for the Southwest comer
    hereof;

    THENCE, NORTH, a distance 0[3,634.94 FEET, to a found W' iron rod at fence
    comer, for a deflection left;

    THENCE, N OOOJ7'32" W, along an existing fence line, a distance of 1,739.69 FEET.
    to the POINT OF BEGINNING, containing 640.00 acres ofland, more or less.

                         Basis of Bearing: G.P.S., TX. South Zone, NAD-27




                                              SHEET I OF2
                                                                                                             ..f\'·~·
                     H:\HOWLAND\sURVEYlNG DEPARTMENl\Job5\2013\22131.2·13U1131.2·13.00c                  .   ;/:-:-"
                                                                                                       : ;:;X.~"J
                                                                                                       :{i~"·;·;
                     www.howlandcompanies.com
7615 N. Bartlett Avenue ! P.O. Box 451128 (78045) r Laredo, lX78041 P. 956.722.4411 r F.956.722.5414
                  TBPE Firm RegIstration No. F-4097 : TBPLS Firm Registration No. 100464-00


                                                                                                                        95
                                                                                                    EXHIBIT "A-2"
                                                  CONOCOPHILLIPS COMPANY
                                    VAQUILLAS RANCH LEASE 199129-001 N RErAINED TRACT 2
                              (VAQUILLAS RANCH A-5 WELLS No. 126. No. 166. No. 205. &; No. 230)
                                                        640.00 ACRES
                                                                                                         WEBB COUNTY. TEXAS




                                                      !,

  (PO~
             SURVEY 1954
            D. C. FANNING
            ABSTRACT 2226
                                                      I

                                                      :
                                                                                            SURVEY 1956
                                                                                           D. C. FANNING
                                                                                           ABSTRACT 2591


                                                                                                                   Faund 60 0 Naa
                                                                                                                                        I I
                                                                                                                                          ;
                                                                                                                                                              SURVEY 1956
                                                                                                                                                              H. E. BROCK
                                                                                                                                                             ABSTRACT 2560



    ~.J-
    o    found Fenc:o
                                                      I                N 89'22'34- E _ 3.689.76" 0 fence                     Comer-z.. t           N    ~~:::        E
        Carner Post              ~--..-1----~~~~:-~~~~,~~~,::~,~::~,~~~::~,f:::~'::::~'~_-T"I--"·------
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                                                                                                                                                                              XI     I
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                                                                    '\.~                            ~:              CONOCOPHILLIPS COMPANY                                    XI     :
                                                                      \"\
                                                                           \~&>"-S-
                                                                              '\"6'.:
                                                                                     I
                                                                                                    NI          VAQUILlAS RANCH LEASE 199129-001
                                                                                                                    26,622.79 ACRES (CAlLED)
                                                                                                                     RErAlHED 840.00 ACRE UNIT
                                                                                                                                                                              ><
                                                                                                                                                                               \
                                                                                                                                                                                     I
                                                                                                                                                                                     I

~-----~'71                                         'found       t                     "              l                                                                         iI
                                           '-:-..Iron      Rod                            '\         I                                             VAQUlllAS A                ~.I
                                                o F..-.ca Comer                                \,    :             VAOUILLAS RANCH                      RANCH    V
                                      _______ ~~~ _______ {)                                                     .-¢- A-5    No. 205             A-5 No. 166                   ~I
                                                                                      VAQUILlAS RANCH                       (BHl)                                              10-.
                                                                                          A-5 No. 205             VAQUILlAS RANCH-¢- .                                         .~.I
                                                                                                (SHl)              A-5 No. 2.30                                                _
              ,;                                                                                                      (BHL)                         .                         ':n I
                                                                                                                                        VAQUlllAS RANCHO                       I')

                                                                                                                                                                              ~ I'
              U'"
                 .N            11;
          '"'"
          "''''''                                                                                            SURVEY 2057      A-5 No. 230
                                                                                                                                                                               ~
                               ~..;
                 .~                                                                                                              (SHL)
          ~"                                                                                             C.T. & M.C. R.R. CO.

          ~~~                   ,                                                                            ABSTRACT 9S5

          "",,,,,,,....
                                                                                                         WEBB COUNTY. TEXAS
                                                                                                                                                                                   \:
           "'u!:!
              ci
                                ~                                                      A
                                                                                       V
                                                                                            VAQUILLAS
                                                                                              RANCH                                                                                ~
                                                                                                                                                                                   1
                                                                                           A-5 No. 126




--------~------------~~~~~----r__----~~----~
       ,     VAOUllLAS -¢- WEST ... ~.187.42·
                                      ,                                 RANCH
                                                                     A-5 No. 118                                                VAQUILlAS
                                                                                                                                                   I
                                                                                                                               A-5 No. 101         I

                                      I,                                                                                            -¢-
                                                                                                                                                                                         f
                                                                                                                     I-~-:;: -O~ ~
                                                                              SURVEY 2060
                                      ,                                     L.F. UPDEGROVE                                                                      00::;;;
                                                                                                                                                                "'Ol'"

                                                                                                                                                                                     Ii
                                                                             ABSTRACT 3330
                                                                                                                                                                ~~:
                                      1,                                                                                                                        >-1Zl~
                                                                                           A
                                                                                           ¥. RANCH
                                                                                                    VAQUILLAS
                                                                                                                     :         NE 1/4               :           g; "
                          GRAPHIC SCALE                                                         A-5 No. 40                SURVEY 2060               1           !5~&J
                                                                               T                                           R.D. GUINN                           "''''!:!
                                                                                                                    1
                                                                                                                    ,    ABSTRACT 3331              ,
                                                                                                                                                                                         I
                               ( tI FEET )
                            , ... h _ lDCOFl.



                                                                                                                                         lEGEND
                                                                                                                                                                                         ,
                                                                                                                                                                               R.... I.lon     0 .. '_

                          HOWLAN~                                                                                        0
                                                                                                                       -¢-  W",-
                                                                                                                                    '" HORIZONTAL \'tElL
                                                                                                                                       5Ul1FAC£ I.OCJITlOH                               ,
                                                                                                                                                                                         ,
                                                                                                                                                                                             04-12 13
                                                                                                                                                                                             QS-l1 13
                             ENGINEERING AND SURVEYING CO.
                     TBPEArmR<lgb_No.f.4Cm TBPLSfhn~Ho.IOO46+O)                                                          ,  UNIT UHt
                                                                                                                            f'[HCE UNt
                                                                                                                                                                                             00--06-1J
                         7815N._A_ landQ,TX.7!GI1 P.!irM.1ttMll
                                                                                                                     - -- - ""                                                           •   10-18-13


WARNING: 8ASIS OF BEARING; C.P.S.
                                     ww-N.howlandcompanles.=m

                                                          r•.   South Zone, HAD. 27.
                                                                                                                         -- SURVEY UIIE

ntS PlAT w.y NOt Sl'fO'II' AU. mosstICS Of PI'WI£$ OR C\Il.ES. HOOI\NIO [NOII££.IIN;                                                                            DRAWN BY: LAF./S.LU,
,tIIO SIJR\ItYIHG CO- IHC.. ASSIJI,I£5 NO R£SPOIG!IIUIY TO !.OCATE PIP£l.I£ 011 CIo6U: CIIOSSN'lS.
toO Cl).III IS Il£R[B"I' WD£ R.[c.o.<!o./C CIMIEHT OR =wi.. sutT~ F'El: 0Wt!ERSHI" OR                                                                           CHECKED BY: J.S.
lt$SCIl. !)tIS DAAIrIIfC .....oc EXCI.USMl.Y ftIR ~ Cl)UIWN.
                                                                                                                                                                JOB No.    221J1.2 13
~ ~o [N(;»I(.tAII'C NrJ ~c co., \He:. 2D1JC
                                                                                                                                                                SHEET:     2 OF      2




                                                                                                                                                                                                         96
HOWLJ[\~~D)
   ENGINEERING AND SURVEYING CO.

                                                 EXHIBIT"A-3"

                                                 FIELD NOTES
                                                         FOR
                                    CONOCOPmLL~SCOMPANY
                    V AQUILLAS RANCH LEASE 199129-001
                            RETAINED TRACT 3
           (VAQUILLAS RANCH A-5 WELLS No. 40, No. 97, No. 101, No. 108,
                         No. 110, No. 113, & No. 118)
                               515.26 ACRES

     A TRACT OF LAND CONTAlNlNG 515.26 ACRES, more or less, being out of the
     Vaquillas RlmchLease 199129-001, 26,622.79 Acres (Called), silUated in Survey 2059,
     C.T. & M.C. RR. CO., Abslracl 984, acd Survey 2060, L.F. Updegrove, Abslracl 3330,
     Webb County, Texas, and being more particularly described as follows:

     BEGINNING al a poinl which bears N 11 °25'37" W, a distance of2, 799.89 fee~ from
     the Vaquillas Ranch A-5 No. 108 Well;

     THENCE, EAST, a distance of 6,540.37 FEET, to a point for the Northeast corner
     hereof;

     THENCE, S 01°14'46" E. a distance ofl,214.36 FEET, to a point for an exterior comer
     hereof;

     THENCE, S 88°51'20" W, a distance 0[1,363.69 FEET, to a point for an interior
     comer hereof;

     THENCE, S 00°34'04" E, a distance of 1,364.74 FEET, to a point for an exterior corner
     hereof;

     THENCE, S 89°54'17" W. a distance of 2,712.87 FEET, to a point for an interior
     comer hereof;

     THENCE, S OO~3'37" E, a distance of24.86 FEET, to a point for a deflection left;

     THENCE, S 00°33'33" E, a distance of2,796.79 FEET, to a point under an existing
     fence line, for the Southeast comer hereof;

     THENCE, S 89°25'42" W. along an existing fence line, a distance 0[2,494.30 FEET, to
     a point for a deflection right;

     THENCE, S 89°37'21" W. continuing along said existing fence line, a distance 0[60.97
     FEET, to a point for the Southwest comer hereof;

     THENCE, N 00'14'54" E, a distance of5,457.34 FEET, 10 the POINT OF
     BEGINNING, containing 515.26 acres of land, more or less.

                             Basis of Bearing: G.P.S., TIC South Zone, NAD-27




                                                  SHEET 1 OF2
                        Il:\HOWLAND\sURVEYlNG DEP ARTMENl\Jobs\2013\22131.3-J3\22131.3-13.00c



                       www.howlandcompanies.com
 7615 N. Bartlett Avenue . P.o. Bo)( 451128 (78045) j Laredo, TX78041 P. 956.722.4411          F.956.722.5414
                   TaPE Firm Registration No. F-4097 : TaPLS Firm Registration No. 100464-00


                                                                                                                97
                                                                                EXHIBIT "A-3"
                                                                         CONOCOPHILLiPS COMPANY
                                              VAQUIUAS RANCH LEASE 199129-001 N RETAINED lRACT 3
                                               (VAQUIUAS RANCH A-5 WELLS No. 40. No. 97. No. 101.
                                                      No. 108. No. 110. No. 113.8< No. 118)
                                                                  515.26 ACRES
                                                                                       WEBB COUNlY. lEXAS




                                                                                                                                                SURVEY 2057
                                        SURVEY 1953                                                                                         C.T. & M.C. R.R. CO.
                                    G.C. & S.F. R.R. CO.                                                                                       ABSTRACT 985
                                       ABSTRACT 1329                                                       A       VAQUILlAS
                                                                                                           Y      RANCH
                                                                                                               A-5 No. 126




                                                                                    EAST ... 8,.540.37"
--~---r----------~~~~-----------------4-----
   ,, 1,
             ,  ,        -¢-
                             ,                                                                              VAQUILlAS
                                                CONQCQPHILLIPS COMPANY                                                                                 VAQUJLLAS
             \\"L ;,-1'                     VAQUILlAS RANCH LEASE 199129-001
                                                                                                               RANCH
                                                                                                          A-5 No. 116
                                                                                                                                                      A-5 No. 101

              \...        rt I                      26,622.79 ACRES (CALLED)                                                                                   -¢-
                 \",      NI                            RETAINED S1fj.26 ACRE UNrT                          SURVEY 2060
                 \'j.        I
                                                                                                          L.F. UPDEGROVE
                  \!1,       t                                                                            ABSTRACT 3330
                  \£     I
                                                                                                                                                     S 88'15"20- W
                     It  :                                                                      VAOUILLAS                                              1,383.69'                     00::;;
                                                                                                                                                                                     ~111~
                     \t->I


    .                   ,. ,
                      \~ I

                         \~.:
                                        SURVEY 2059
                                    C.T. & M.C. R.R. CO.
                                       ABSTRACT 984
                                                                          I
                                                                                                  RANCH
                                                                                               A-5 No. 40 y
                                                                                                               A                            ILl
                                                                                                                                            !,.,.
                                                                                                                                            0....
                                                                                                                                                       SWI/40F
                                                                                                                                                           NE 1/4
                                                                                                                                                                                 I "'S:E-<
                                                                                                                                                                                 :

                                                                                                                                                                                     ~ZU

    ~,
                                                                                                                                            ~:t      SURVEY 2060                     ;> rt.l ~
                         \,!,       WEBB COUNTY. TEXAS                    ,                                                                 !!~       R.D. GUINN  ,                  "''';E-<
    ••                    , I                                                                                                               II) -   ABSTRACT 3331 I                  ~ tri fg
                           \i                                  SEE ' - '                                                                                                   I      .~
                                                              DETAIL LO_-'';--~S-:':::~:::''~'I='"':-::W:-N-:2.::-7=':::2Hr:-::::----?-''' .. -
    1&1                  VAQUILLAS
    •       ' - p67',J.,  RANCH                                                                                                                                      .... -L- .... -
    ,.:1i   1- - - - V A-5 No, 108
                                                                                                                                                    cr~~~'1iO. ~~CH
    ~                                                                                            SURVEY 2060
                                                                                                  R.D. GUINN
                                                                                                                                                                (SHl)
                                                                                                                                                           ~ VAQUlLlAS RANCH
    z


                                                                              ~,
                                                                                                ABSTRACT 3332                                              V         L-4 No. 95
                                                           VAQUILLAS                                                                                                    (BHL)



                                                                                                           r------i
                                                             RANCH
                                                          A-5 No. 113                                                                                              SURVEY 2060
                                 -¢- VAQUILlAS                  -¢-
                                      RANCH
                                    A-S No. 97
                                                                              ...                                                                                 C.C. MARSHALL
                                                                                                                                                                  ABSTRACT 3329
                                                                                                                    SE 1/4 OF           :
                                                                                                                      SW 1/4            I
                                                                                                           i                            i
                                                                                                                   SURVEY 2060                         A       VAQUILLAS RANCH
                                                                                                                                                       V        L-4 No. 105
                                                                                                                    R.D. GUINN
                                    VAQUILLAS       A                                                            ABSTRACT 3331
                                      RANCH   ¥
                                   A-S No. 110



                                                                                               DETAIL.: N.T.5.
          -s      89"37'21- W
                   60.97'
                                                                                                                                      NORTH HALF SURVEY 1838
                                                                                               5 00'23'3/ E./                              P.K. CONNOWAY
                                                                                                   24.86' ---/                             ABSTRACT 2187

                           GRAPIDC
~
  ~
    --••J-"       ~~

                                    (If fUT)
                                 I Inch _ lOOOrt.
                                                                  T
                                                                                                                           LEGEND                                     R_yllion         Dat,:
                                                                                                           o
                          HOWLANIJ ENGINEERING ANO SURVEYING co.
                                                                                                           -¢-
                                                                                                                      = IIORllONTAI. WElL
                                                                                                                      = =ACE I..OCAnOH
                                                                                                                                                                         1
                                                                                                                                                                         :I.
                                                                                                                                                                                     0411131
                                                                                                                                                                                     QS-17-13
                         T8PEFbI~NO.fJHn            TBPUIAm ~"""'I~
                                 781~H._A ..... Lot.,m,lX.78DoII P.IIM.7U44I'
                                                                                                      --":,:--=: ~.rCEU~~E                                               3           0&-06-13

                                       WtWI.howtandcomp.llnles.com                                                    . "'"
                                                                                                                      .. SURVEY UNE
                                                                                                                                                                         4           Io-'B-I3

WARNING: BASIS OF 8EARING: G.P.S. Tx. South Z""~, NAD.-:l.7.
                                                                                                     FIELD 1lI\T£
                                                                                                                          ''''''      .,'           DRAWN BY: LAF./S.UJ.
                                                                                                                                                    CHECKED BY; J.S.
                                                                                                                                                    JOB No. 22131.3-13
                                                                                                                                                    SHEET:  2 OF 2




                                                                                                                                                                                                 98
HOWLANID;
   ENGINEERING AND SURVEYING CO.


                                                    EXHIBIT "A-4"

                                            FIELD NOTES
                                                  FOR
                                    CONOCOPHllWWFSCOMPANY
                               V AQUILLAS RANCH LEASE 199129-001
                                         RETAINED TRACT 4
                           (VAQUILLAS RANCH CO., LTD. WELLS No. 11,
                           No. 20, No. 30 & VAQUILLAS STATE G.V. No. 5)
                                             640.00 ACRES

      A TRACT OF LAND CONTAlNlNG 640.00 ACRES, more or less, being out of the
      Vaquillas Ranch Lease 199129-001,26,622.79 Acres (Called), situated in Survey 468,
      N.B. Gossett, Abstract 2255; and Survey 1634, N.B. Gossett, Abstract 2252, Webb
      County, Texas, and being more particularly described as follows:

      BEGINNlNG at a point which bears N 15°06'54" E, a distance of 1,098.65 fee~ from
      the Vaquillas Ranch State G.U. No.5 Well;

      THENCE, S 00°31'13" E, a distance of 1,549.69 FEET, to a point for the Southeast
      corner hereof;

      THENCE, S 89°43'43" W, a distance of 10,925.96 FEET, to a point for the Southwest
      comer hereof;

      THENCE, N 00°12'49" W, a distance of3,536.51 FEET, to a point for the Northwest
      corner hereof;

      THENCE, N 89°52'00" E, a distance of5,489.79 FEET, to a point for an exterior
      comer hereof;

      THENCE, S OO~2'48" E, a distance of 1,945.34 FEET, to a point for an interior comer
      hereof;

      THENCE, S 89°58'23" E, a distance of 5,422.26 FEET, to the POINT OF
      BEGINNING, containing 640.00 acres of land, more or less.


                               Basis of Bearing: G.P.S., TIC South Zone, NAD·27




                                                      SHEET 1 OF2
                           H:\HOWLANDISURVEYING DEPARTMEN1\Jobs\20 13\22 [11.4-13U2131.4-I3.doc

                           www.howlandcompanies.com
 7515 N. Bartlett Avenue   ,   P.O. Box 451128 {7B045}   ~    laredo, TX78041 P. 956.722.4411   I   F.956.722.5414
                  TBPE FIrm Registration No. F-4097          TBPLS Arm Registration No. 100464-00


                                                                                                                     99
                                                                                                                                                                                                                      100
                                                   SURVEY 1633
                                               G.C. & S.F. R.R. CO.
                                                  ABSTRACT 1323




t--                           N 89"S2'OO· E ... ~480.7S1·
                                                                                                                                                                                            r-
                                 CONOCOPHILLIPS COMPANY
                                                                                             I...                           SURVEY 467
                                                                                                                             A.B. & M.
                                                                                                                           ABSTRTACT 799
                                                                                                                                                                                                      SURVEY 1664
                                                                                                                                                                                                       G.T. BLACK
                                                                                                                                                                                                     ABSTRACT 2698
                             VAQUllLAS RANCH lEASE 199129-001


  i,.•
                                  26,622.79 ACRES (CALLED)
                                   RETJJN£D &40.00 ACRE UNIT
                                                                                             I
                                                                                             '"                              S 89"58'23- E ... 5,422.26'
                                                                                                                                                                   VAQUILlAS RANCH
                                                                                                                                                                 STATE G.U. No. l-R
                                                                                                                                                                              -¢-                        rpo~
                                                                                                                                                                                                         (BBG~~J
                                                                                                                                                                                                         ~



  ~                                SURVEY 1634                                                                                                          -¢-                           :   .../
  ~                                                                                                                                                                                  ~J ~/:f
                                                                                                                                                                                        .~~~ ~~
                                                                                                                                                                                             ..
                                   N.B. GOSSE'IT                                                                                                VAQUllLAS RANCH
                                                                                                                                                CO. LTD. No. 20
  z                               ABSTRACT 2252                                                                                                                                      -I
                                WEBB COUNTY. TEXAS                                                                                VAQUILLAS                                           i ~13      ~II!

                                                                                                                                                                                      ~,. ~ ~
                                                                                                           VAQUILlAS             RANCH CO.
                                                                                                           RANCH CO.             LTD. No. 11
                                                                                                           LTD. No. 30
                                                                                                                                       -¢-                           YAOUILLAS RAN
                                                                                                                                                                                  NO.C~
                                                                                                              -¢-                                                    STATE G.V.                      W


                                                            S 89'43'4j--W----;; 10.925.98'
                                                                                                                                                               SURVEY 468                        •

                                                                                                                                                                                                 IYAO~l:'
                                                                                                                    VACUIUAS RA"';CH                          N.8. GOSSETT
                                                                                                                    co. LTD. No, 73                         ABSTRTACT 2255
         GRAPHIC SCALE                                                                                                    -¢-
k.-_-L:~-r           Ii           1j                                                                                                   -¢- VAQUlllJIS   RANCH
                                                                                                                                             CO. LTD. No. 59
                                                                                                                                                                                                            ,"" - -
                                                                                                                                                                                                 I RANCH CO.V
            ( IH rtET )                                                                                                                                                                                No. 24
          \ 1n,h .. IOOOn.




                                                                              CONOCOPHILLIPS COMPANY
                                                                       VAQUILlAS RANCH lEASE 199129-001
                                                                                     RETAINED TRACT 4                                                   _     " SURVEY ut/£
                                                             (VAQUILlAS RANCH CO.• LID. WELLS No. 11. No. 20,
                                                                  No. 30, 8< VAQUILlAS STATE G.U. No.5)
                                                                               640.00 ACRES
                                                                                      wEBB COUNTY, TEXAS
HOWLAND
   ENGINEERING AND SURVEYING CO.

                                                 EXHIBIT "A-5"

                                       FIELD NOTES
                                            FOR
                              CONOCOPIDLLWSCOMPANY
                         V AQUUJ..AS RANCH LEASE 199129-001
                                   RETAINED TRACT 5
                    (VAQUllJ..AS RANCH CO., LTD. WELLS No.3, No. 14,
                                  No. 41, No. 45, & No. 69,)
                                       640.00 ACRES

      A TRACT OF LAND CONTAJNING 640.00 ACRES, more or less, being out ofthe
      V.quillas Ranch Lease 199129-001, 26,622.79 Acres (Called), situated in Survey 865, H.
      & G.N. R.R. CO., Abstract 1438, Webb County, Texas, and being more particularly
      described as follows:

      BEGINNING at a point under an existing fence line which bears N 24°04'13" W, a
      distance of2,161.34 feet, from the Vaquillas Ranch Co., LTD. No. 69 Well;

      THENCE, N 89'30'43" E, partially along an existing fence line, a distance of 5,303.50
      FEET, to a point for the Northeast comer hereof;

      THENCE, S 000:28'34" E, a distance of2,802.66 FEET, to a point for a deflection right;

      THENCE, S 00°09'23" E, a distance of2,489.65 FEET, to a point for the Southeast
      comer hereof;

      THENCE, S 89°35'00" W, a distance of5,256.20 FEET, to a point for the Southwest
      corner hereof;

      THENCE, N 00°14'17" W, a distance of3,677.21 FEET, to a point for an interior
      corner hereof;

      THENCE, S 89°45'43" W, a distance of 44.35 FEET, to a found I" pipe at fence
      corner, for an exterior corner hereof;

     THENCE, N 00°37'50" W, along an existing fence line, a distance of 1,608.36 FEET,
     to the POINT OF BEGINNING, containing 640.00 acres of land, more or less.

                             Basis of Bearing: G.P.S., TX. South Zone, NAD-27




                                                   SHEETlOF2
                         H:\HOWLANOOURVEYING DEPAR1MENJ\JabsUO 13U2131.5-13U2131.5-13.doc




                        www.howlandcompanies.com
 7615 N. Bartlett Avenue     P.O. Box 451128 (78045)   !     Laredo, 1X 78041 P. 956.722.4411       F.956.722.5414
                   T6PE Firm RegistratIon No. F-4097       TBPL$ Firm Registration No. 100464-0{)


                                                                                                                     101
                                               CONOCOPHILLIPS COMPANY
                                VAQUIUAS RANCH LEASE 1N99129-001 - RETAINED "TRACT 5
                        (VAQUIUAS RANCH CO•• LTD. WELLS No.3. No. 14 No. 41. No. 45. & No. 69)
                                                                                              640.00 ACRES
                                                                                             WEBB COUNlY. TEXAS




                                                                                                      SURVEY      BBB
    SURVEY 2238                                                                              FRANCISCO CONTRERAS
    P.O. BODE                                                                                   ABSTRACT 2065
  ABSTRACT 3016                    I




     SURVEY 2336
    J.E. ANDERSON
    ABSTRACT 3183



                                                                                                                                      -¢-                '"
                                                                                                                                                       {Oi§a:
                                                                                                                                                       ",.,~

                                                                                                                        VAQUILLAS RANCH
                                                                                                                        CO. LTD. No. 45     ~          "' ... '"
                                                                                                                                                       ~Z


                                                                                                                                            ~          ~ot
                                                                                                                                                        u'"
                                                                                                                                            N
                                                                                                                                                       !30~
                                                                                                                                                         u'"
                                                                                                                                            ~          ",~"
                                                                                                                                                         ",,,,
                                                                                                           -¢-
                                                                                                 VAQUllLAS RANCH
                                                                                                 CO. LID. No. 14                -¢-                       '"
                                                                                                                        VAQUILlAS RANCH
                                                                                                                         CO. LTD. No. 41
                                   .t-C_,",--·VAIJUILLAS RANCH                                                                              on
                                                                  CO. LTD.
                    -¢-                                       No. 69 (SHL)
  VAOUILlAS RANCH
      CO. LTD.                                                                        CONOCOPHIWPS COMPANY
       No. 56                                                                     VAQUIUAS RANCH LEASE 199129-001
                                                                                       26,622.79 ACRES (CALLED)
                                                                                        RET'AJNED 840.00 ACRE UNfT



                                                                                                SURVEY 665
                                                                                             H. & C.N. R.R. CO.
                                                                                               ABSTRACT 1436
                                                                                            WEBB COUNTY. TEXAS




     Found 1" Pipe
    o Fene.. Comar
                                                                          SURVEY 1683
                                                            C.C,S.D. & R.G.N.G. RR. CO.
   S 89"45'04Y W                                                        ABSTRACT 1115
          ...."..                                                                                                                 SURVEY 1700
                                                                                                                                   H.E. BROCK
                                                                                                                                 ABSTRACT 2559
                                                                                                           -¢-
                        GRAPHIC                                                                   VAQUILLAS RANCH
                                                                                                       CO. LID.
 ~              ~
  ki......J-I
                            500
                                                                     T                                  No. 23

                            1 "'<h _ lDOOF\.




WARNING: 8I.SlS OF BOOING: C.P.S. lx. South Zone. I-IAO.-27.
THIS IVIl IlAY HOT $HOW ALI. aIOSSI'ICS Of P\PQJN£S OR CA8.tS. IIO\\\NI()             E>IGII~                                                    .1.
AAI) ~e          en,      lie. ~ NO ~IIUTY TO lOCA.TE Pf'UK CIt                       coa£ D!CISSINCS.
NO CI.AIW IS HEN££r1 1M!)( R£lW!\lIH(l I;:l.1lR[HT OR ...:TUI,L SUIU'.o.et/lolHERN.   ru:   OWNERSIfP OR
I.£SSOIt. 1lItS QFV,JIIIIC: WDE DCClllSMl.y Rl!I CONOCOI'HUJPS 1Xl!.IP.lHY.
COP'I'RlCHT HOWl.OHl ENGIIlEEItIiG N«l SI.JIM'IlI«O  co..  n;:. 20130




                                                                                                                                                                   102
HOWU1\N~)
   ENGINEERING AND SURVEYING CO.

                                                     EXHIBIT"A-6"

                                                      FIELD NOTES
                                                            FOR
                               CONOCOPmLLWSCOMFANY
                            VAQUILLAS RANCH LEASE 199129-001
                                   RETAINED TRACT 6
                      (VAQUILLAS RANCH CO., LTD. WELLS No. 31, No. 56 &
                                  W.R. CARR, ET AL No.1)
                                       620.58 ACRES

      A TRACf OF LAND CONTAINING 620.58 ACRES, more or less, being out of the Vaquillas
      Ranch Lease 199129·001, 26,622.79 Acres (Called1 situated in Survey 1635, T.C. R.R. CO.,
      Abstract 1797; Survey 865, H. & G.N. R.R. CO., Abstract 1438; and Survey 467, A.B. & M.,
      Abstract 799, Webb County, Texas, and being more particularly described as follows:

      BEGINNING at a point which bears N 67°46'35" W. a distance of4,196.87 feet. from the
      Vaquillas Ranch Co., LTD. No. 31 Well;

      THENCE, N 88°55'14" E, a distance of2,040.09 FEET, to a point under an existing fence line,
      for a deflection right;

      THENCE, N 89051'04" E, a distance of3,989.57 FEET, to a found I" pipe at fence comer, for
      a deflection left;

      THENCE, N 89°45'43" E, a distance of 44.35 FEET, to a point for the Northeast comer hereof;

      THENCE, S 00°14'17" E, a distance of3,677.21 FEET, to a point for an exterior comer hereof;

      THENCE, S 89°35'00" W. a distance of 44.35 FEET, to a point for a deflection right;

      THENCE, S 89054'09" W, a distance of 1,767.82 FEET, to a point for an interior comer hereof;

      THENCE, S 00°17'52" E, a distance of3,432.25 FEET, to a p'oint for a deflection left;

      THENCE, S 00°38'54" E, a distance of 54.14 FEET. to a point for the Southeast comer hereof;

      THENCE, N 89°49'18" W, a distance of2,249.93 FEET. to a point for the Southwest comer
      hereof;

      THENCE, N 00°10'41" E, a distance of 54.13 FEET, to a point for a deflection left;

     THENCE, N 00°21'54" W, a distance of 1,361.31 FEET, to a found fence corner post, for a
     deflection left;

      THENCE, N 00°30'20" W, a10ng an existing fence line, a distance of 1,631.92 FEET, to a point
      for a deflection right;

      THENCE, N 00°28'47" W, continuing along said existing fence line, a distance of 882.77
      FEET, to a point for a deflection left;

      THENCE, N 00°29'28" W. continuing along said existing fence line, a distance of 1,092.72
      FEET, to a point for an interior comer hereof;




                                                      SHEET 1 OF3


                           www.howlandcompanies.com
 7615 N. Bartlett Avenue        P.O. Box 451128 (78045) j Laredo, 1)( 78041 P. 956.722.4411       F.956.722.5414
                  TBPE     FInn Registration No. F-4C97 • TBPts Firm Reglstratlon No. 100464-00


                                                                                                                   103
     Continuation


     THENCE, S 88°55'14" W, a distance of 1,965.93 FEET, to a point for an exterior comer
     hereof;

     THENCE, N 01°04'46" W, a distance of2,125.56 FEET, to the POINT OF BEGINNING,
     containing 620.58 acres ofland, more or less.




                                Basis of Bearing: G.P.S., TX. South Zone, NAD-27




                                                    SHEET 2 OF3
                        H:\HOWLAND\SURVEYING DEP ARTMEN1\Jobs\20 13U2131.6·13\22131.6-13.doe


                       www.howlandcompanies.com
7615 N. Bartlett Avellue    P.O. Box 451128 (78045)        laredo,1)( 78041 P. 956.722.4411       F. 956.722.5414
                  TBPE FIrm Registratioll No. F-4097 i   TBPLS Firm Reglstratioll No. 100464-00


                                                                                                                    104
                                                                                     EXHIBIT "A-6"
                                                                           CONOCOPHILLIPS COMPANY
                                        VAQUlllAS RANCH LEASE 199129-001 N RETAIN EO TRACT 6
                                          (VAQUlllAS RANCH CO•• LID. WELLS No. 31. No. 56 &:
                                                        W.R. CARR. ET AL No.1)
                                                                                         620.58 ACRES
                                                                                         WEBB COUNlY. TEXAS




                                                                                                                                                                                       VAQUlllAS
                                                                                                                                                                                         RANCH
                                                                                                                                                                                        CO. LTD.
                                                                                                                                                                                         No. 69
                                                                                                                                                                                          (SHL)
                                                                K


                      W.R. CARR.
                      ET At No. 1
                                                                I
                                                                K

                      -¢-
                                                                I
                        S 88'65'104,- W
                          1.985.93'




                                                                             CONOCOPHILUPS COMPANY
             SURVEY 1632                                                 VAQUfUAS RANCH LEASE 199129-001
            FRANK BARRETI                                                     26,622.79 ACRES (CAUED)
            ABSTRACT 2140                                                      RET~ED 820M ACRE UNrT

                                                                                                                 ~~~~~~------­
                                                                                                                   S 89"54'09" W
                                                    z
                                                                                                                                 S 89'35'00- W
                                                                                                                                        1.767.82'                                 ........
     DETAil:      1i r . . . .·
                       N 89"4&'43" E
                                                    ..'" ',                                                             ~.
                                                                                                                                               SURVEY 1683
                                                                                                                                 C.C.S.D. & R.G.N.G. R.R.                          co.
      N.T.S.                                                                                                            ill             ABSTRACT 1115
                                                    il"'l
                                                    g~                                                                  ~VAOUILLAS RANCH
         Found 1·)                                  S..:-                                                                           C~~. \~.
        PlJ>ftc!~~"                                 Z      I'                                                           ...I
1--' --, --, --, --, - - X ---!"
                                                                I    \~ound Fenca
                                                                                                                        ~
                                                           ,~          eom.,.. Post
                                                                                                                        ~                    o C6~~~~~o.~~C~T
                                                    ~.;ti~.
                                                        ·1                                                                                                  (SHl)
                                                                                                                        "

                                                     ~~i
 - -- - - -- -                    ~ -00-'-0';1: ~E-=~t~;-~-::,;;;;;;.-~-;.:::;;:;;;-~-;;
                                                                                      -=~'-S 00'38'54"                                             E     VAOUILlAS RANCH
   SURVEY 467                         54.13"                               N 89"49'18" W ... 2,249.93"              •              154.14'                   CO. LTD.
    LR&M.
 ABSTRTACT 799                                                                   -¢-
                                                                            VAOUILLAS RANCH                   {)-
                                                                                                                    I
                                                                                                                    ,                                    No. JJ 5T (BHL)



                      GRAPHIC SCALE                                          CO. LTD. No. 71         VAQUILlAS I
               9 ~                                                                                    C~CT~.                                                           -¢-
  !.GO                      500
   : - . - . - - - - ( 1/1 F'([f )[
                                       'or'

                            I loch _ lOOlln.
                                                        .
                                                                    2000
                                                                     1
                                                                                                       No. 53       I
                                                                                                                    I
                                                                                                                                                         VAQU1LlAS RANCH
                                                                                                                                                                 CO. LTD.
                                                                                                                                                                  No.5

                                                                                                                               LEGEND                                   Rnillon
                                                                                                        o           =      HORIZONTAL WEll                                               M-17 13
                                                                                                        -¢-         " =ACt 1.OC.I.TIOH                                                   06-06-13
                             ENGINEERING AND SURVEYING CD.                                           _';':;'._ _ :~1.R(~£                                                                08-14 13
                  TlIPE Fhn IIo;IMdoo _    ~1    T8P\..S Fhn   ~...,.         1000IM«I
                        7~"N._AYalII. ~-"TX.7lllMl              P.III:I4.72:1.4411                                                                                                       10-18-13
                                   www.howlandcompanies.com                                          - - - - - - - = TIES
                                                                                                          .. ..    = SURV£Y UItE                                                         11-27-13
 WARNING: BAStS or BOOING: G.P.s. Tx. South 2on... NAD.-27.
 n.:; PlAt IUIoI' NDl' SIIOJf IU aIOSSJjCS Of' PlPEIJIoIES 00 coatS.. ~tI ~                         FlUD DATE
                                                                                                                         "'0'           PAGE   ~       DRAWN BY: LAF./S.I.Id.
 ANti    ~c    CO.• ItIC. ASSI..IW£S HO RESI'ONSElUTY Ttl lOCAl'( PP£lJNE 00 c.oa..E al'CSSlNGS..
 ~~~":~l~~~~FD:~~OR                                                                                    "'                 'I'            'I'           CHECKED BY: J.S.
                                                                                                                                                       JOB No.     22131.6-13
 COI'T!IJ::Hf HQWl.AIo[I DlCI££RINC NIO ~ co~ tlC.20130
                                                                                                                                                       SHEET:     .l   or    :5



                                                                                                                                                                                                    105
                                                EXHIBIT "A-7"

                                                 FIELD NOTES
                                                     FOR
                                    CONOCOPmLL~SCOMWANY
                       VAQUILLAS RANCH LEASE 199129-001
                                RETAlNED TRACT 7
                   (VAQUllLAS RANCH CO., LTD. WELLS No.5, No.8,
                          No. 23, No. 25, No. 33 ST, & No. 64)
                                    639.48 ACRES

     A TRACT OF LAND CONTAINING 639.48 ACRES, more or less, being out of the
     Vaquillas Ranch Lease 199129-001,26,622.79 Acres (Called), situated in Survey 1683,
     C.C.S.D. & R.G.N.G. RR. CO., Abstract 1115, Webb County, Texas, and being more
     particularly described as follows:

     BEGINNING at a point which bears N 09'35'49" W, a distance ofl,4l7.68 feet, from
     the Vaquillas Ranch Co., LTD. No. 64 Well;

     THENCE, N 89°54'09" E, a distance of 1,767.82 FEET, to a point fora deflection left;

    THENCE, N 89'35'00" E, a distance of3,454.97 FEET, to a point for the Northeast
     corner hereof;

    THENCE, S 00'02'16" W, a distance of 4,514.84 FEET, to a point for a deflection left;

    THENCE, S 00'56'49" E, a distance of 845.79 FEET, to a point for the Southeast
    corner hereof;

    THENCE, S 89°46'53" W, a distance af 2,479.20 FEET, to a paint for a deflection
    right;

    THENCE, S 89°59'21 n W, a distance af2,715.08 FEET, to. a paint for the Southwest
    corner hereof;

    THENCE, N 00°38'54" W, a distance of 1,910.27 FEET, to a point for a deflection
    right;

    THENCE, N 00'17'52" W, a distance of3,432.25 FEET, to the POINT OF
    BEGINNING, containing 639.48 acres af land, more or less.

                            Basis of Bearing: G.P.S., TIC South Zone, NAD-27




                                                  SHEET 10F2
                       H:\HOWLAND\sURVEYrNG DEP ARTMENl'JohJ\20 13\22131.7·13\221 J 1.7-1 J.doc



                      www.howlandcompanies.com
7615 N. Bartlett Avenue I P.O. 80)(451128 (78045)     ;     Laredo, 1X78041 P. 956.722.4411 !     F.956.722.5414
                   TBPE Rnn Registration No. F-4097       TSPLS Firm Registration No. 100464-00


                                                                                                                   106
                                                                                 EXHIBIT "A-T'
                                                                            CONOCOPHILLIPS COMPANY
                                            VAQUILLAS RANCH LEASE 199129-001 N RETAINED TRACT 7
                                             (VAQUILLAS RANCH CO., LTD. WEllS No.5, No. S, No. 23,
                                                          No. 25, No. 33 ST, & No. 64)
                                                                  639.46 ACRES
                                                                                       WEBB COUNTY. TEXAS

                       -¢-VAQUILlAS             RANCH
                            CO. LTD. No. 31


                   SURVEY 1635
                   T.C. R.R. CO.                                                                                     SURVEY 665
                  ABSTRACT 1797                                                                                   H. & G.N. R.R. CO.
                                                                                  I                                 ABSTRACT 1438



                                                  ~~                              1:
                                           N 88'54'09- E          N   1.787.82'                     N 89'35'00- E ,.. 3.454.91'
                                    ~~~~~----~~~~~--~-----­
                                      , 1
        N 09'35'49" W--..             I     I
          1.417.68'      "             \    I
                                      ~     lia
                                             l~
                                           i,,-                                                SURVEY 1683
                                                                                       C.C.S.D. & R.G.N.G. R.R. CO.
                              ~ \l                                                            ABSTRACT 1115
                              ill
                              Ifi
                                      ~~~VAQUILLAS RANCH
                                         CO. LTD. No. 64
                                                                                          WEBB COUNTY, TEXAS

                               ,
                               ~
                                                "'.                                                                  VAQUILLAS RANCH..Q-
                                                                                                                         eD. LTD. No. 23                               !
                                                                                                                                                                         ~
                                                         VAQUILtAS RANCH
                                                        CO. LTD. No. 3.3 ST
                                                              o                                                                                                            , 8::.:::g'"
                                                                                                                                                                                <-UN
                                                               (SHL)
                                                                                            CONOCOPHILLIPS COMPANY
                                                                                       VAQUILlAS RANCH LEASE 199129-001                                                .l;'" ~§1t>
                                                                                                                                                                         m
                                                                                                                                                                                _0


                                                                                                                                                                             g;,;01
                                                                                           26.622.79 ACRES (CAllED)
                                                                                            RETNNED 6Ji.48 ACRE UNIT
                                                                                                                                                                                 .&;
                                                                                                                                                                        S "'''''''<:
                                                                                                                                                                         "
--------                                          VAOUIllA$ RANCH               co.~
                               ~
                                                  LTD. No. 33 ST (8HL)


                  VAQUlllAS    5
                  C~N&~. -¢-
                   No. 53       t
                                                                                                                                                   -¢-
                               '"                              VAQUILLAS RANC$l-
                                                                co. LTD. No.5                               -¢-                         VAQUILlAS RANCH
                                                                                                                                         CO. LTD. No. 8
                                                                                                                                                                     ~ ...... _ _

                                                                                                 VAQUllLAS RANCH
    SURVEY 467                                                                                   co. LTD. No. 25
     A.B.&M.
ABSTRTACT 799 z
                                                                                                                  ____~----____--_¢"
                                     }-----~~~~~~~--~r_--
                                                      S 89"9'21· W ... 2.71S.0S'                   !              S 89"48'53- W - 2,479.20'
                                                                                                                                                                     ,
                                                                  SURVEY 1684-                      •                                                                •               ~

                                                                  D. B. GRACY
                                                                ABSTRACT 2910                      I                                                                 I,          ~oco
                                                                                                                                                                                ",u_
                                                                                                                                                                                -)-oO:;u
                                                                                                                                                                                     'e-
                                                                                                                         SURVEY 1684                                   ,        f:!00<
                                     1--------- ----- _..-I                                                               G.T. BLACK                                            'p~CI'l
                                                                                                                                                                                 " .~
                                                                                                                    ABSTRACT 2698                                     I,        ",e-<;;j
                      GRAPHIC SCALE                                                                                                                                     ,
                            ( IN f'tET)
                                                                      T                                                                                                I,
                         I InI:h _ lOOOn.


                                                                                                                           LEGEND                                 R,vlston
                                                                                                                                                                            ,      Dola

                     HOWlANf3
                            ENGINEERING AND SURVEYING
                   TI!PE Fmo I\t9IOII'-'Ho. F-«1i11 TBPL.SArm~tfc.l~
                                                                          co.
                                                                                                        o
                                                                                                        -¢-
                                                                                                                    -
                                                                                                                    ='

                                                                                                  - " ; : ; ' , - - ::
                                                                                                                         HORIZONTAL


                                                                                                                         ~C£u~
                                                                                                                                      ww.
                                                                                                                         ~AC( lOCA.TIOH                                  ,
                                                                                                                                                                         ,
                                                                                                                                                                                 04-06-13
                                                                                                                                                                                  0~17-13

                                                                                                                                                                                 06 06-13
                          n.nN.IW'tI;A-.. ......,.. 'IX. J'eGll P.II:\6.n:1.4411
                                www.howllloocompllnles.eom                                                        - = TIES
                                                                                                                    .. SURVEY ~E
                                                                                                                                                                            •     06-'4 13

WARNING: BASIS Of" BEARING: G.P.S. h. South Centrol Zonll, NAD. 27.
11«5 !'tAT WOY NOr SHOW AU. CROSStiCS Of PIP£l.ffES OR ~ HCNlJ.I10 D<GUfEmNG
NfO SIRo'E'I"tIG CO~ IN(;. ASSUolES NO IlESPCitGINlY TO LOCAl[ PPUIfE OR eo.au: C/lOSSIIiGS.
HO CI.RK IS HEREB'I" w.ot ~ CUVIO(\" OR /<CT\IAl SURF"ACt/IIIHEIW. f"EE O'II'>IJ!S>F OR
LLSSOR. l1II:5 DRA>nHC; w«: fXCI.USMl.y fUR IUIUNCTON ~ OA<: co. IP.
                                                                                                  FlELD DATE             eo,
                                                                                                                         'I'
                                                                                                                                      ''''
                                                                                                                                        'I'
                                                                                                                                              .   DRAWN BY:
                                                                                                                                                  CHECKED BY:
                                                                                                                                                                LA-f".
                                                                                                                                                                     J.S.
                                                                                                                                                  JOB No.   22131.7 13
CCIP'tRICllT   IIO'WI\H<l) ~~       NO SI..I'M'n-IG   co..   tic. 20IJQ
                                                                                                                                                  SHEET:    2   or       2




                                                                                                                                                                                             107
                                                EXHIBIT"A-8"

                                      FIELD NOTES
                                           FOR
                             CONOCOPHILLIPS COMPANY
                        V AQUILLAS RANCH LEASE 199129-001
                                   RETAINED TRACT 8
               (V AQUILLAS RANCH CO., LTD. WELLS No. 29 ST, No. 53,
                    No. 61, No. 71, AND STATE G_u. No. 1-R & No. 15)
                                      640.00 ACRES

    A TRACf OF LAND CONTAINING 640.00 ACRES, more or less, being out of the
    Vaquillas Ranch Lease 199129-001,26,622.79 Acres (Called), situated in Survey 467,
    A.B. & M., Abstract 799, Webb County, Texas, and being more particularly described .s
    follows:

    BEGINNING at a point which bears N 71 °42'56" W, a distance 00,308.04 feet, from
    the Vaquillas Ranch Co., LTD. No. 29 ST Well;

    THENCE, N 89°34'30" E, a distance 0[3,072.45 FEET, to a point for an exterior
    comer hereof;

    THENCE, S 00°10'42" W, a distance of54.13 FEET, to a point for an interior comer
    hereof;

    THENCE, S 89°49'18" E, a distance of2,249.93 FEET, to a point for the Northeast
    comer hereof;

    THENCE, S 00°38'54" E, a distance 0[1,856.13 FEET, to a point for a deflection right;

    THENCE, S 00°10'56" E, a distance ofl~31.92 FEET, to a point for a deflection right;

    THENCE, S 00°33'35" W. a distance of 1,995.98 FEET, to a point for the Southeast
    corner hereof;

    THENCE, N 89°58'23" W, a distance of 5,333.62 FEET, to • point for the Southwest
    corner hereof;

    THENCE, N 00°22'48" W, a distance of 1,945.34 FEET, to a point for a deflection
    right;                                                                                                     : .i


    THENCE, N 00°19'36" E, a distance of 3,274.41 FEET, to the POINT OF
    BEGINNING, containing 640.00 acres ofland, more or less.

                           Basis of Bearing: G.P.S., TX. South Zone, NAD-27




                                                 SHEET 1 OF2
                       H:\HOWLANDISURVEYING DEPARTMENru0b5\20 13\22131.8-13\22131.8-13.doc



                      www.howlandcompanies.com
7615 N. Bartlett Avenue I P.O. Box 451128 (78045J ! Laredo, 1)( 78041 P. 956.722.4411         F.956.722.5414
                  TBPE Firm RegIstration No. F-4097 I TBPL5 Firm Registration No. 100464-00


                                                                                                                      108
                                                            CONOCOPHILLIPS COMPANY
                                   VAQUILLAS RANCH LEASE 199129-001 N RETAINED mACT 8
                                     (VAQUILLAS RANCH CO.• LTD. WELLS No. 29 ST. No. 53.
                                      No. 61. No. 71. AND            No. 1-R &: No. 15)


                                             SURVEY 1632
                                           FRANK BARRE'IT                               I ><

~-"~:-;"11;. =q-, ___ xABS~CTx 214~ __ , __ ,~
                                                                                                            SURVEY 1635
                                                                                                            T.C. R.R. CO.                                    VAOUILlAS
                                                                                                                                                                      o
                                                                                                                                                               RANCH
                                                                                                           ABSTRACT 1797                                     No. .33 ST
                                                                                                                                                               (SHL)


                                                                                                                                                             oU
                                   .... N 89"34'30- E .... 3,072.46'" ..
                         -...
                                ------___ !!    7,., •
                                                                   S OO'tO'42- W
                                                                       54.13'                      I           VAQUILL.AS RANCH                 ..,
                                                                                                                                                        '"
                                                                                                                                                             '".-
                                                                                                                                                        tr:I~~
                                               - -...258"                                       1G!1       AD.     LTD. No. 71                4         "'C>-
       0                                              - - --"...,_J.~..:.
                                                                        "                                  Y                               V '~
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       U'"                                                         --""Er__                       I                        VAOUILLAS RANCH       Z      >",01
         .N
    "'"'''''''
                                                                               -_...              J

                                                                                       --""Cf------~~~:..----------
                                                                                                                           CO. LTD. No. 5.3     III
                                                                                                                                                        '"=>",'"...
    -'" ... ;f.                                                                                                                                         a>     .~
                                                                                                                                                ~
    ,. ·u                                                              VAOUIt.LAS RANCH'
                 ~                                                                                                                                           ".;
    ~~g           ,                                                   CO. LTD. No. 29 5T .
                                                                                (SHL)                  .                                                     u
    =>"''''      ...                                                            VAQUILlAS RANCH-¢-
                                                                                                                                   VAOUILLAS
                                                                                                                                    RANCH
                                                                                                                                                i5
                                                                                                                                                             u
    "'U~                                                                                                                                        '"
                 ~m
                                                                           CO. LTD. No. 29 S1                                      STATE G.U.
                                                                                                                                      No. 15
                                                                                                                                                        ------
                                                                                                                                                                       -
                                                                                  (BHL)
     0                                                                                                                                 (BHL)
                 §
                                           CONOCOPHILllPS COMPANY                               -¢-                             o       -¢-     ...            ...",UN
                                                                                                                                                               "',.'"
                                                                                                                                                                       0



                                                                                                                                                ~~
                 Z                                                                                                          VAQUILlAS

                                                                                                                                                              ~01t;
                                       VAQUIUAS RANCH lEASE 199129-001
                                           26,622.79 ACRES (CAlLED)
                                             RETAINED     &40.00   ACRE UNIT
                                                                                               VAQUILLAS RANCH
                                                                                               CO. LTO. No. 61
                                                                                                                             RANCH
                                                                                                                           SlATE G,U.
                                                                                                                             No. 15             -....
                                                                                                                                                b"'!
                                                                                                                                                ~:l                 ':01
                                                                                                                              (SHL)                           0:"''''
                                                                                                                                                              ;::::Jt::i oo
                                                                                                                                                '"           a> ~
                                                                                                                                                        .... _--
 -----                                                                   SURVEY 46?
                                                                          A.B. & M.

                 ~
                                                                        ABSTRACT 799
                                                                     WEBB COUNTY. TEXAS                                                         .,
                                                                                                                                                10


                 ~,                                                                                                                             t
           N
   "'1::'"
   "'",N
   ~cnN          "'                                                                                                                             "'
     "'E-<
   ,.OU

   §l~"'O1
        . E-<
      "''''
   a>Z~
                 ~~
                 z
                                                                                                        VAQUILLA5 RANCH-¢-
                                                                                                       STATE C.U. No. l-R
                                                                                                                                                I
                                                                                                                                                '"
                                                                                                                                                         ... '"'"
                                                                                                                                                         "'''''''
                                                                                                                                                         "'UN
                                                                                                                                                         - j ...
                                                                                                                                                         ,.",U

                                                               N 89"58'23- W .... S.333.62'                                                              ~"g
                                                                                                                                                         §loa>
                                                              SURVEY 46B
                                                                                                       -¢-VAQUILLAS
                                                                                                            co.
                                                                                                                           RANCH
                                                                                                                   LTD. No. 20
                                                                                                                                                         a> ~
                                                              N.B. GOSSETT
                                                             ABSTRACT 2255


                                                                                  -¢-                                                    -¢-
                                VAQUILLAS RA.'\ICH   n.                                                                    VAOUILlAS RANCH
                                CO. LTD. No . .30 V                    VAQUILLAS RANCH                                       STATE .G.U.
                                                                        CO. LTO. No. 11                                        No.5




 ~--A..J--~
                GRAPHIC SCALE



                       (IIH'EIT)
                                 I;                   'j
                                                                                                                                                r-----
                     I look _ l000R.




                                                                                                            UNIT IDlE
                                                                                        -,--                rENC[ UN[
                                                                                        -------             TIES
                                                                                        ----                SUI!V['I"UN[
 ~ Bt.S1S OF 8E.AR1IiG; C.P.S. Tx. Souttl Zone. NAO.-27.




                                                                                                                                                                              109
HOWLA~~D
   ENGINEERING AND SURVEYING CO.


                                                    EXHIBIT "A-9"

                                  FIELD NOTES
                                       FOR
                          CONOCOPIDLLWSCOMPANY
                       VAQUll..LAS RANCH LEASE 199129-001
                               RETAINED TRACT 9
            (VAQUll..LAS RANCH CO., LTD. WELLS No. 39, No. 40, & No. 46)
                                  635.23 ACRES

     A TRACT OF LAND CONTAlNlNG 635.23 ACRES, more or less, being out ofthe
     Vaquillas Ranch Lease 199129-001,26,622.79 Acres (Called), situated in Survey 1633,
     G.C. & S.F. R.R. CO., Abstract 1323; and Survey 467, A.B. & M., Abstract 799,Webb
     County. Texas, and being more particularly described as fcl1ows:

     BEGINNING.t a point which bears N 66°46'35" W,. distance of 1,328.20 feet, from
     the V.quill.s Ranch Co., LTD. No. 40 Well;

     THENCE, N 89°30'45" E, a distance of2,492.56 FEET, to a found fence corner post,
     for a deflection right;

     THENCE, N 89°32'27" E, along an existing fence line, a distance ofl,572.15 FEET, to
     a point for a deflection left;

     THENCE, N 89°29'25" E, continuing along said existing fence line, a distance of
     2,016.77 FEET, to a point for the Northeast comer hereof;

     THENCE, S 00°33'08" W, a distance of 1,348.09 FEET, to a point to an exterior corner
     hereof;

     THENCE, S 89°34'30" W, a distance 0£80.70 FEET, to a point to an interior comer
     hereof;

     THENCE, S 00°19'36" W, a distance of3,274.41 FEET, to a point for the Southeast
     corner hereof;

     THENCE, S 89°52'00" W, a distance of 5,977.93 FEET, to a point for the Southwest
     corner hereof;

     THENCE, N 00°06'46" E,' distance of4,585.15 FEET, to the POINT OF
     BEGINNING, containing 635.23 acres of land, more or less.

                               Basis of Bearing: G.P .S., TX. South Zone, NAD-27




                                                      SHEET 1 OF2
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                           www.howlandcompanies.com
 7615 N. Bartlett Avenue   i   P.O. Bo)( 451128 (78045)   i     Laredo, lX 78041 P_ 956.722.4411      F.956.722.5414
                  TBPE Firm Registration No. F-4097           TBPLS Firm Registration No. 100464-00


                                                                                                                       110
                                                                             EXHIBIT "A-9"
                                                      CONOCOPHILLIPS COMPANY
                                        VAQUILU\S RANCH LEASE 199129-001 N RETAINED TRACT 9
                                      (VAQUILU\S RANCH CO., LTD. WElLS No. 39, No. 4{), & No. 46)
                                                             635.23 ACRES
                                                                                     WEBS COUNlY. TEXI\S




                                                                                                                                                                                     .,
                                                                                                                                                                                I j

r----,,                                 SURVEY 1631
                                  G,C. & S.F. R.R. CO.




                                                                                                                                                                            A
                                      ABSTRACT 1317
                                                                                                                              SURVEY 1632
                  ,                                                                                                         FRANK BARRE'IT
                                                                                                                            ABSTRACT        2140
                  I

                                                                                                           SURVEY 1633
                                                                                                    G.C. & S.F. R.R. CO.
                                                                                                       ABSTRACT 1323
                                                                                                   WEBB COUNTY. TEXAS
",.,,,,
  "'"        10                                                                                                                                                    '"
                                                                                                                                                                   1-----
~~gJ
  ~   ... ~,                                                                               -¢-VAQUJLlAS                                                            S 89".34'30- W
~O~
                                                                                                                RANCH
                                                                                                   CO. LTO. No. 39                                                          80.70'
","''''
::>i!i!;; ~I
enu",
   :!;<      ~,                                                          CONOCQPHILLIPS COMPANY
             1!l,                                                    VAQUILlAS RANCH LEASE 199129-001

              ~I,
                                                                         26.622.79 ACRES (CALLED)
                                                                          RETAINED 635.23 ACRE UNrr

                  ,
                  I,,                                                     -¢-VAQUlllAS         RANCH
                                                                               CO. LTD. No. 46


I- - ----1
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      0                                                                   S 89"52'00" W ... 5,9n 33'                                                                  > ....
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                   I,                                                                                                                                          ,
                    ,                                                                 SURVEY 1634
     ,.;
                  I•
                                                                                      N.R GOSSETT
                                                                                     ABSTRACT 2252                                                            I•
                   I
                    •

                         GRAPHIC SCALE
                                                                                                                                                              r----
                                                                                                                                                              •



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                                (l/IfWJ
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                                                                                                                           LEGEND                         R....blon           DCI~


                        HOWa.,tif!N~                                                                        0
                                                                                                           -¢-
                                                                                                                       = HORI20tn'AL
                                                                                                                       '" W£l..L
                                                                                                                                     WELL
                                                                                                                         SURFACE LOCAnOH
                                                                                                                                                              2
                                                                                                                                                               1            04-12-13
                                                                                                                                                                            06-17-1J

                                                                                                           _.,
                                ENGINEERING AND SURVEYING CO.                                                             UMITUHE                             J             06-06-13
                      1llPE AnII~ ...... f-109l' TtIPUI f\'m I!agIIhi!I::n _ 1-.00
                                                                                                                         FnlC[ LINE
                            1lI1'~Botto!IA...... ~T.ll.1DI1 P.1l5&.1'Z1AoI11
                                                                                                       -           .
                                    www.howlondc:ornpanles.com

 WARNING: BASIS OF B£ARlNG: G.P.s. Tx. South Zon ... NAO. 27.
                                                                                                            ..           n"
                                                                                                                         SlJRVtY UHr
                                                                                                                                                              4             10-18-13



 ms P\.IIl ....T Hal' StOI ~ CI!OSSIIClS Df PIP£l.JN[S OR C08.£S. IIOIIII.JIIIO EliGll<[(RIItt;:      FJELD DAT(                             ORAWN BY: LAF.jS.l.I.t
 NffJ ~ CO~ IHC. ASsWES HO RtSPOIIS8IJTT m LDC.IJE ~ ~ c:oau: CROSSIIfGS.
                                                                                                                                             CHECKED BY: J,S.
 ~~~~~~~~fU~O>I                                                                                                                              JOB No.   22131.9 13
 CCIPIlI!tIn" MOII'..Io/<I) ~ AHD SUi\01tIIl co., toH;. 2OIlO
                                                                                                                                             SHEET:    2 OF   2




                                                                                                                                                                                          111
HOWIMANlt~
   ENGINEERING AND SURVEYING CO.


                                                 EXIDBIT "A-I0"

                                                   FIELD NOTES
                                                                FOR
                               CONOCOPBILUPSCOMPANY
                          VAQUILLAS RANCH LEASE 199129-001
                                    RETAINED TRACT 10
                 (VAQUILLAS RANCH CO., LTD. WELLS No. 27, No. 43,
              No. 44, No. 59, No. 73, No. 74 & VAQUILLAS RANCH A-2 No.6)
                                        640.00 ACRES

     A TRACT OF LAND CONTAlNING 640.00 ACRES, more or less, being out ofthe
     Vaquillas Ranch Lease 199129-001,26,622.79 Acres (Called), situated in Survey 468,
     N.B. Gossett, Abstract 2255; North V, of Survey 166, A.C. Goeth, Abstract 3142; and
     Survey 1634, N.B. Gossett, Abstract 2252, Webb County, Texas, and being more
     particularly described as follows:

      BEGINNING at a point which bears N 29°17'05" E, a distance 0[2,149.76 feet, from
      the Vaquillas Ranch Co. Ltd. No. 44 Well;

      THENCE, S 00'31'13" E, a distance of 3,087.94 FEET, to a point for the Southeast
      corner hereof;

      THENCE, WEST, a distance 0[7,909.49 FEET, to a point for the Southwest comer
      hereof;

     THENCE, N 00°00'03" W, a distance 0[1,852.04 FEET, to a point for an interior
     comer hereof;

     THENCE, S 89°43'42" W, a distance 0[3,039.93 FEET, to a point for an exterior
     comer hereof;

     THENCE, N 00°12'49" W. a distance of 1,198.42 FEET, to a point for the Northwest
     corner hereof;

     THENCE, N 89'43'43" E, a distance of 10,925.96 FEET, to the POINT OF
     BEGINNING, containing 640.00 acres of land, more or less.


                               Basis of Bearing: G.P.S., TX. South Zone, NAD-27




                                                    SHEET 1 OF2
                           H:\HOWLANmSURVEYING DEI'AR'IMENlVobs\2013\22131.ll-13\22I3I.II-l3.doc


                           www.howlandcompanies.com
 7615 N. Bartlett Avenue  i P.O. Box 451128 (78045)       I     Laredo, TX78041 P. 956.722.4411       F.956.722.5414
                  TaPE Finn Registration No. F-4097   f       TBPLS Firm Registration No. 100464-00


                                                                                                                       112
                                                                                                                                                                                                                                        113
                                                                                                                                                                 -¢-                                             SURVEY 1684
                                                                                                                                                                                                                  G.T. BLACK
                                                                                                                                                          VAQUIUAS RANCH
                                                                                                                                                          CO. LTD. No. 20                                       ABSTRACT 2898
                                                             SURVEY 1634                                                                 VAQUlllAS
                                                                                                                  VAQUILLAS              RANCH CO.
                                                             N.B. GOSSETT                                         RANCH CO.              LTD. No. 11
                                                            ABSTRACT 2252                                       LTD. No. 30
                                                                                                                     -¢-                         -¢-                        VAQUIUAS RANCH-¢-
                                                                                                                                                                            STATE G.U. No. 5
                                                                      N 8V43'4J"



                                        CQNQCOPHllLiPS COMPANY                                                             VAQUILLAS RANCH
                                  VAQUllLAS RANCH LEASE 199129-001                                                         CO. LTD. No. 73
                                        26,622.79 ACRES (CALLED)                                                                 -¢-
                                         RETAINED &40,00 JaIE. UNrT
   z                                                                                                                                             -¢- VAOUlllAS   RANCH
                                                                                                                                                                                                          ..               -¢-
I-.l                   s   89"043'''2- W ,.. 3.039.93'        •
                                                                  ,------------1I                 VAQUILLAS RANCH
                                                                                                  CO. LTD. No. 43-¢-
                                                                                                                                                       CO. LTD. No. 59
                                                                                                                                                                                                          CI!
                                                                                                                                                                                                          8
                                                                                                                                                                                                                  VAQUILLAS
                                                                                                                                                                                                                 RANCH CO.
                                                                                                                                                                                                          ri     LTD. No. 24
                                                                                                                                           SURVEY 468                                                     ,          .,;
                                                                          NORTH 1/2                  -¢-VAQUlLlAS  RANCH
                                                                                                                                          N.B. GOSSETT                         -rt-___ 1Q.6!'__ --I1o.I              u,..

                                                              .         SURVEY 1666
                                                                         A.C. GOETH
                                                                       ABSTRACT 3142
                                                                                                         CO. LTD. No. 74                 ABSTRTACT 2255
                                                                                                                                       WEBB COUNTY. TEXAS
                                                                                                                                                                         CO. LTD .
                                                                                                                                                                                                     ,..,_
                                                                                                                                                                                                       •
                                                                                                                                                                                                          ;;;
                                                                                                                                                                                                                  ;cd~
                                                                                                                                                                                                                  to .......
                                                                                                                                                                                                                  - PO
                                                                                                                                                                                                                  >-. t;
                       SURVEY 1665
               C.C.S.D. & R.G.N.G. RR CO.
                      ABSTRACT 1124
                                                              I        VAQUILLAS RANCH
                                                                            A-2 No.6-¢-
                                                                                                                                       -¢-VAQUllLAS    RANCH
                                                                                                                                             CO. LTD. No. 27
                                                                                                                                                                                                          !'lf;1"'' '
                                                                                                                                                                                                          ., '" '" [::
                                                                                                                                                                                                                  " "'til
                                                                                                                                                                                                                  til .';';]
                                                                                                                                                                                                                     U
                                                                                                                                                                                                                     .;
                                                                                                                                  WEST   N    7.909...•                                A                                         -¢--
                                                                                                          co.     lTD. No. 32                                                         -y-                          VAQUILLAS



                                                                                              L ____ .________________ :O~ :'N:._2~l~D~ ~1 __
                                                                                              I                                                                               VAQUILLAS RANCH         I            RANCH CO


                 GRAPHIC SCALE
 50.!.   _.9    ~               lope!              2c:x'
                       (tlrm)
                   I      _ l000fl
                       Inc~




                                                                                          EXHIBIT "A-ion
                                                                                      CONOCOPHILLIPS COMPANY
                                                                                  VAQUIUAS RANCH LEASE 199129-001                                                         UNIT UH[
                                                                                                                                                           - - , - - .. rENCE UN£
                                                                                          RETAINED TRACT 10                                                - - - - - - - = m;s
                                                                       (VAQUIUAS RANCH CO.. LTD. WEllS No. 27. No. 43. No. 44.                                                   u"'
                                                                         No. 59. No. 73. No. 74 '" VAQUIUAS RANCH A-2 No.6)
                                                                                             640.00 ACRES
                                                                                            WEBB COUNT'(, TEXAS
                                ~ ~$,l~
HO'lQfllj
   ••              A~~'i!.[lr::lhb7
    ENGINEERING AND SURVEYING CO.


                                                   EXHIBIT "A-11"

                                    FIELD NOTES
                                         FOR
                          CONOCOPIDLLWSCOMPANY
                    V AQUILLAS RANCH LEASE 199129-001
                               RETAINED TRACT 11
          (VAQUILLAS RANCH CO., LTD. WELLS No.7, No. 12, No. 18, No. 22,
                   No. 24, No. 35, No. 51, No. 65, No. 67, & No. 68)
                                    640.00 ACRES

      A TRACT OF LAND CONTAlNlNG 640.00 ACRES, mOre or less, being out of the
      Vaquillas Ranch Lease 199129-001,26,622.79 Acres (Called), situated in Survey 1691,
      G.C. & S.F. R.R. CO., Abstract 1267; Survey 1696, G.C. & S.F. R.R. Co., Abstract 2418;
      North Y, of Survey 1666, A.C. Goeth, Abstract 3142; and South Y, of Survey 1666, N.B.
      Gossett, Abstract 2253, Webb County. Texas, and being more particularly described as
      follows:

      BEGINNING at a point which bears N 67°14'28" W, a distance of 873.05 feet, from the
      Vaquillas Ranch Co. LID. No. 24 Well;

      THENCE, N 89°24'40" E, a distance of5,260.70 FEET, to a point for an exterior
      comer hereof;

      THENCE, S OO~2'59" E, a distance of 1,911.15 FEET, to a point for an interior corner
      hereof;

      THENCE, EAST, a distance of 1,816.67 FEET, to a point for an exterior corner hereof;

      THENCE, SOUTH, a distance of 3,271.85 FEET, to a point under an existing fence
      line, for the Southeast corner hereof;

      THENCE, WEST, along an existing fence line, a distance of 4,066.67 FEET, to a point
      for an interior comer hereof;

      THENCE, SOUTH, a distance of 50.64 FEET, to a point for an exterior corner hereof;

      THENCE, S 89°32'20" W. a distance of249.85 FEET, to a point for an exterior comer
      hereof;

      THENCE, NORTH, a distance of 1,930.06 FEET, to a point for an interior comer
      hereof;

      THENCE, WEST, a distance of 2,743.83 FEET, to a point for an exterior comer hereof;

      THENCE, N 00°31'13" W, a distance of3,251.63 FEET, to the POlNT OF
      BEGINNING, containing 640.00 acres of land, more or less.

                                Basis of Bearing: G.P.S., TX. South Zone, NAD-27




                                                      SHEET 1 OF2
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                           www.howlandcompanies.com
  7615 N. BartfettAvenue    ,   P.O. Box 451128 (78045)       :    laredo, lX7S041 P. 956.722.4411        F.956.722.5414
                  TBPE Arm Registration No. F-4097        ;       TBPl5 Firm Registration No. 1004&4-00


                                                                                                                           114
                                                                                EXHIBIT "A-11"
                                                                         CONOCOPHILLiPS COMPANY
                                    VAQUIli.AS RANCH LEASE 199129-001 N RETAINED TRACT 11
                                 (VACUIli.AS RANCH CO .• LID. WELLS No.7. No. 12. No. 18. No. 22.
                                          No. 24. No. 35. No. 51. No. 65. No. 67. & No. 68)
                                                            640.00 ACRES
                                                                                         WEBa COUNTY. TEXAS




                                                                                                                                                                                         M
                                                                                                                                                                                         .J
                                                                                                                                                          -¢-                      •. i. )
                                                    SURVEY 1684                                                                                   VAQUIUAS
                                                    G.T. BLACK                                                                                      RANCH                          ,
                                                                                                                                                  A-1 No . .3                     j.
                                                  ABSTRACT 269B

                                                                                                                                                                               .~'I'
                                                                                                                                                                               .:..:.::.:.JH
                   N 6714'28' W
                          m:os---- - - - .... _                                 .... _       .... - - - - - - -                                                           VAQUIUAS
                                                 N 89"24'W E ,.. S.260.70·                                                                                                RANCH
    ...........    !5!                                                                                                                          VAQUILLAS              A-l No. 214
                                                                                                                                                                           {BHL}
           "
       -~'--'::V-  "
                  VAOUILLAS                                                                                        VAQUlllAS
                                                                                                                                                  RANCH
                                                                                                                                                A-1 No.7                  ¢-
                              RANCH CO.                                                                      -¢-   RANCH CO.                       -¢-                     VAQUJUAS
                          LTO. No. 24                                                                              LlO. No. 7                                                RANCH
                                                        VAOUlLlAS                                                                                                         A-l No. 214
          SURVEY 468                             -¢-    RANCH CO.                                                                                                            (SHl)
                                                       LTD. No. 67
           A.B. & M.                                                                                                                               SURVEY 1696
         ABSTRACT 2255                                                                                                                          G.C. & S.F. R.R. CO.
                                                                                                                                                  ABSTRACT 2418
                                     CONOCOPHILLIPS COMPANY
                               VAQU1LLAS RANCH LEASE 199129-001
                                    26.622.79 ACRES (CALLED)                                        VAQUILLAS                                    EAST .... 1.818.67"
                                      RETAHD 540.00 ACRE UNIT                                 -¢-   RANCH CO.
                                                                                                    LTD. No. 12
                                                                                                                  SURVEY 1691
z                                 VAQUllLAS                                                                   G.C. & S.F. R.R. CO.
                           -¢-    RANCH CO.
                                                                           VAQUILLAS
                                                                                                                 ABSTRACT 1287
                                 LTO. No. 51                                                                  WEBB COUNTY. TEXAS
                                                               -¢-       RANCH CO.
                                                                       LTD. No. 18
                                                                                                                     VAQUILLAS
                                                                                                                     RANCH CO.
                                                                                                                    LTO. No. 65
                                                                                                                   .O(SHL)
                              WEST - 2.743.83"                                            VAQUILLAS   -¢- .                               VAOUILLAS
             NORTH 1/2 SURVEY 1666
                  A.C. GOETH
                                                                      ~_.'::!             RANCH CO.
                                                                                         LTO. No, 65
                                                                                                                                    -¢-    RANCH CO.
                                                                                                                                          LTD. No. 35
                                                                                            (BHL)
    ----- ------- --- --,
                ABSTRACT 3142

                                                                                                VAQUlllAS ~                                           VAQUILLAS
                                                                                                                                                     RANCH CO.V
                                                                                                                                                                   _r't
                                                                                                RANCH CO. ~
                       SOUTH 1/2                                                               LTD. No. 68           . VAQUILLAS                    LTD. No. 22
                     SURVEY 1666                                                                     (BHL)             RANCH CO.
                                                                                                                      LTO. No. 68
                     N.B. GOSSETT                                                                                           (SHL)
                    ABSTRACT 2253

    -- - ---                       --- - --                      - - !,.,.4;===---==:::~~~.----~I.--.<
                                                                                  WEST ,.. 4,066.67    .....,
                                                                                            SOUTH ,.. &>.64'
                                                S 89"32'20· W
                                                   249.85'




                                                                                                                     SURVEY 1678
                                                                                                         C.C.S.D. & RG.N.G. RR CO.
                                                                                                                    ABSTRACT 2495
                     GRAPHIC SCALE

    .---.---
                                                                                                                              LEGEND                            Rublon                 o"t.
                                                                                                             o         '"
                   HOWLANDENGINEERING AND SURVEYING CO.
                  TBP£flrmRooknltlnND..Fo4W1 TBI'L!I~~oGc:<l"",'(l(1164.OO
                                                                                                             -¢-
                                                                                                       ""';",-- : ::; u"'
                                                                                                                            HORIZONTAL WELL
                                                                                                                            SU!lFAC[ LOCATION
                                                                                                                                                                   2
                                                                                                                                                                                05-17-13
                                                                                                                                                                                060613
                                                                                                                                                                                08     14-1~
                          76'SH._ ....VOBIO   ~.l)(.7fIG4'   P.IIoSII.T.Z:Z.44lt                              X        =    FEHe( UNt
                                                                                                       - - - - - - - ,. TIES                                                    10-18 13
                                 WoIfW.howlandcomp&r"lles.com
                                                                                                                       • SURVEY UNE                                             11-27 13
WARNING; Bo\SIS          or   BEARING: G.PS. Tx. South ZOllO, NAD.-27.
                                                                                                       FIELD DATE                                DRAWN BY: ur./Sol.I.!.
                                                                                                                                                 CHECKED BY: J.S.
                                                                                                                                                 JOB No. 22131.12-1J
                                                                                                                                                 SHEET:     2 OF   2



                                                                                                                                                                                               115
                                                 EXHIBIT "A-12"

                                                   FlELDNOTES
                                                       FOR
                                      CONOCOPHllL~SCOMFANY
                       V AQUILLAS RANCH LEASE 199129-001
                              RETAINED TRACT 12
                 (VAQUlLLAS RANCH A-2 WELLS No.4, No. 38, No. 68 &
                     VAQUlLLAS RANCH CO. LTD. No.2, No. 32)
                                 640.00 ACRES

     A TRACT OF LAND CONTAINING 640.00 ACRES, more or less, being out of the
    Vaquillas Ranch Lease 199129-001, 26,622.79 Acres (Called), situated in Survey 468,
    N.B. Gossett, Abstract 2255; North 112 of Survey 1666, A.C. Goeth, Abstract 3142; and
    South lI2 of Survey 1666, N.B. Gossett, Abstract 2253, Webb County, Texas, and being
    more particularly described as follows:

     BEGINNING at a point which bears N 65'04'35" W, a distance of5,456.00 feet, from
     the Vaquillas Ranch A-2 No. 38 Well;

    THENCE, EAST, a distance of7,909.49 FEET. to a point for an exterior comer hereof;

    THENCE, S 00°31'13" E, a distance of864.99 FEET, to a point for an interior comer
    hereof;

    THENCE, EAST. a distance 0[2,743.83 FEET, to a point for an exterior comer hereof;

    THENCE, SOUTH, a distance of 1,930.06 FEET, to a point for the Southeast comer
    hereof;

     THENCE, S 89°32'20" W, a distance 0[10,661.34 FEET, to a point for the Southwest
    comer hereof;

    THENCE, N 00'00'13" W, a distance of 2,880.79 FEET, to the POINT OF
     BEGINNING and containing 640.00 acres of land, more or less.

                               Basis of Bearing: G.P.S.) TX. South Zone, NAD~27




                                                     SHEETIOF2
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                          www.howlandcompanies.com
7615 N. Bartlett Avenue    .   P.O. BoK451128 (78045)     laredo, TX78041 P. 956.722.4411         F.956.722.5414
                 TBPE FIrm Registration No. F-4097      TBPtS Finn Registration No. l00464-{)(J


                                                                                                                   116
                                          ·...   __ ._..._ - - - - - - - - - - - - - -




                                                                                                                                                                                                                                         117
                                             A     VAQUILl'S                                                           VAQUILlAS
                                             ¥     RANCH CO.
                                                  LTD. No. 74
                                                                                                                 1:/ LTO.
                                                                                                                      RANCH CO.
                                                                                                                          No. 44
                                                                                                                                                     SURVEY 1691
                                                                                                                                              G.C. & S.F. R.R.                 co.
                                                                              VAQUILlAS
                                                                         -¢- RANCH    CO.
                                                                             LTD. No. 27
                                                                                                                                                ABSTRACT 1267                                            VAQUILlAS
                                                                                                                                                                                                         RANCH CO.
                                                                                                                                                                                                      LlD. No. 12
                                                                                                                                                                                                               1:/            II.;~
    i<....                                       :VAQUILl,A::>
                                                    Q:'
                                                                FASl' - 7.009••••                                                  ~
                                                                                                                                       IIJ
                                                                                                                                                     VAQUILLAS
                                                                                                                                                1:/ Llo.
                                                                                                                                                    RANCH CO.
                                                                                                              VAQUILJ...6S~_       - ~.                  No. 51                                  VAQUILlAS
                                                   RANCH CO.
                                                                                     SURVEY 466
                                                                                                             RANCH CO.,.,...           :-8:                                               -¢-    RANCH CO.


                                      L _________ _
                                                  LTD. No. 32                                                LTD. No.2
                                                                                     N.B. GOSSETT                                      ~:t                                                      LTD. No. 18               VAQU1LlAS
                                                                                                                                       !!~                                                                                RANCH CO.
                                                                                    ABSTRACT 2255                                                                                                                        LTD. No.6':
                                                                                                                                                     EAST ... 2.74J.83'
                                                                                                                                       '"                                                                                     (SHL)
                                                                                                                                                                                                            VAQUILLAS  1:/ . 0

                                                                              -_ ....        _ _----- ---- -- --- --- -- -- -----
                                                                                               NORTH 1/2 SURVEY 1666
                                                                                             A.C. GaETH. ABSTRACT 3142
                                                                                                   ....       VAQUILLAS
                                                                                                           1:/A-2RANCH
                                                                                                                   No.4                       SOUTH 1/2 SURVEY 1666
                                                                                                                                                                         -
                                                                                                                                                                                                            RANCH CO.
                                                                                                                                                                                                           LTD. No. 65
                                                                                                                                                                                                              (BHL)
                                                                                                                                                                                                                  VAQUILLAS
                                                                                                                                                                                                                  RANCH CO.
                                                                                                                                                                                                                 LTD. No. Sa.n.",.
                                                                                                                                                                                                                      (8HL)      "'I'U
                                                                                                                                                  N.B. GOSSETT                                                            VAQUILLAS
                                                                                                          CONOCOPH1U1PS COMPANY                                                                                           RANCH
                                                                                                  VAQUJLlAS RANCH lEASE 199129-001                    ABSTRACT 2253                                                      LTD. No.
                                                                                                       26,622.79 ACRES (CAlLED)                 WEBB COUNTY. TEXAS                                                            (SHL)
                                                                                                        RETNNED 640.00 ACRE UNT


                                                                                                               w ...   to.681~·

                                                                                                                                                                                                             SURVEY 1676
                                              SURVEY 1667                                                                                                                                            I    C.C.S.D. & R.G.N.G.
                                      C.C.S.D. & R.G.N.G. R.R. CO.                                                                     SURVEY 1677                                                              R.R. CO.
             GRAPHIC SCALE                   ABSTRACT 1125                                                                     e.C.S.D. & R.G.N.G. R.R. co.                                                  ABSTRACT 2495
~    1;;U
1-;;-.-                Ii     2000I                                                                                                   ABSTRACT 1130

                {IN tUT 1
              I noh _ nXl9n



                                                                                    EXHIBIT "A-12"
                                                                                                                                                                                ~~ = = = : = ~I~'~· ~'·,~"~'~ iD!.'~'·~ l
                                                                                                                                                                                 ,L'ftEI..L                               04 11-1J

                                                                                                                                                       ¥       _        ....
                                                                                                                                                                                 ~OCATlON                                 05-17-13

                                                                                                                                                               . "" ""'
                                                                                                                                                                   w~




                                                                                CONOCOPHILLIPS COMPANY
                                                            VAQUIUAS RANCH LEASE 199129-001 N RETAINED TRACT 12                                                .. rENeE UNE                                               "-,,-,,
                                                                                                                                                - - - - - - - .. 11£S
                                                                                                                                                 _     ... _   .. SUII\II:YUHE
                                                              (VAQUIUAS RANCH A-2 WELLS No.4, No. 38. No. 68 &
                                                                    VAQUIUAS RANCH               co.
                                                                                        LlD. No.2. No. 32)
                                                                                640.00 ACRES
                                                                                            WEBB COUNlY. TEXAS
                                               EXHIBIT "A-13"

                                                FIELD NOTES
                                                               FOR
                        CONOCOPHUJJPSCOMPANY
                     VAQUILLAS RANCH LEASE 199129-001
                           RETAINED TRACT 13
             (VAQUlLLAS RANCH A-I WELLS No.3, No.7, No. 33, No. 144,
                           No. 156, No. 163, No. 214)
                                636.53 ACRES

    A TRACT OF LAND CONTAlNlNG 636.53 ACRES, more or less, being out of the
    Vaquillas Ranch Lease 199129·001,26,622.79 Acres (Called), situated in Survey 1696,
    P.B. Reynolds, Abstract 2418; and Survey 1695, G.C. & S.F. R.R. CO., Abstract 1268,
    Webb County. Texas, and being more particularly described as follows:

    BEGINNING at a point which bears N 53°13'51" W, a distance of 1,137.24 feet, from
    the Vaquillas Ranch A-I No.3 Well;

    THENCE, N 89°19'22" E, a distance of 6,735.31 FEET, to a point for the Northeast
    comer hereof;

    THENCE, S 00°58'29" E, a distance of 4,150.50 FEET. to a point for the Southeast
    corner hereof;

    THENCE, S 89°19'59" W, a distance of 11.7S FEET, to a point for a deflection right;

    THENCE, N 89°52'06" W, a distance of 4,950.94 FEET, to a point for a deflection left;

    THENCE, WEST, a distance of 1,816.67 FEET, to a point for the Southwest comer
    hereof;

    THENCE, N 00°22'59" W, a distance ofl,911.15 FEET, to a point for a deflection
    right;

    THENCE, N 00"21'20" W, a distance of 2,147.98 FEET, to the POINT OF
    BEGINNING and containing 636.53 acres of land, more or less.

                            Basis of Bearing: G.P.S., TX. South Zone, NAD-27




                                                  SHEET 1 OF2
                      K\HOWLAND\sURVEYING DE>ARTMEN1\IobsUOl1U211I.14-13U2131.14-13.doc


                      www.howlandcompanies.com
7615 N. S<lrtlettAvenue I P.O. Box 451128 (78045)         !     laredo, TX78041 P. 956.722.4411        F.956.722.5414
                  TBPE Firm Registration No. F-4097   j       TBPLS Firm Registration No. 100464-{10


                                                                                                                        118
                                                     CONOCOPHILLIPS COMPANY
                                      VAQUILlAS RANCH LEASE 199129-001 ~ RETAINED lRACT 13
                                     (VAQUILlAS RANCH A-1 WELLS No.3. No.7. No. 33. No. 144.
                                                     No. 156. No. 163. No. 214)
                                                           636.53 ACRES




                                                                            SURVEY 1697
                                                                            T.M. RR CO.
                                                                           ABSTRACT 1813

                                                                      -,--,--,-



                                                                           VAQUILLAS    -¢-
                                                                             RANCH
                                                                          A-t No. 3::5

                                                  3                                                                                                  VAQUILlAS

                                                                                                                                               -¢-A_t~o~H153
                                                                                                        CONOCOPHILLIPS COMPANY
                                                                                                    VAQUIL!AS RANCH LEASE 199129-001
                                                                                                         26,622.79 ACRES (CALLED)
                                                                                                         RETAINED   ~        ACRE UMJ'
                                                   VAQUlUAS
                                                   RANCH
                                                                                                                                                                           ...
                                                                                                        VAQUILlAS
                         VAOUILLAS
                           RANCH
                                                A-I No. 214
                                                      (BHL)
                                                                                                    -¢-A-IRANCH
                                                                                                            No. 144
                        A-I No.7                   ¢-                                                                                           VAQUILlAS
                             -¢-                      VAQUILLAS
                                                                                                                                                     RANCH
                                                                                                                                               A-I No. 156
                                                      RANCH
                                                   A-I No. 214
                                                                                                 SURVEY 1696
                                                                                                P.B. REYNOLDS
                                                                                                                                                  (SHL)      ¢-            '"    al
                                                      (SHL)                                    ABSTRACT 2418                                           VAQUILLAS
                                                                                                                                                                             """
                                                                                                                                                                             """
                                                                                                                                                                              ~~
                                                                                             WEBB COUNTY. TEXAS                                          RANCH
                                                                                                                                                      A-1 No. 156
                                                                                                                                                          (SHL)




                       WEST ... ',816.87'                                                              N 69"52'06" W ....    4,9~.94'
                                                                                                                                                                DETAIL

                                                                                                                              DETAIL: N.T.S.

                SURVEY 1691
                                                                                                                               5 89"19'59" W
            G.C. & S.F. R.R. CO.
                                                                               SURVEY 1692                                           11.75'~
               ABSTRACT 1267
                                                                              P.B. REYNOLDS
                                                                              ABSTRACT 2419
                VAQUlllAS
         -¢-    RANCH CO.
               LTD. No. 35                                                                                                                                          RANCH
                                                                                                                                          VAQUJLlAS               A-l No. 73

                              VAQUILLAS                                                                                                     RANCH
                                                                                                                                         A-L No. 106
                              RANCH CO.-¢-
                             LTD. No. 22                                                                                                    (8HL)
                                                                                                                 VAQUILlAS
                      GRAPHIC SCALE                                                                       -¢-     RANCH                        -¢-
 ~';~I)(I                             1000

  ~!ioIii-~-Iii-~",=~==;;;;,\,~lIIIIIjiiiiiiiiiiiii,\'~~~~""II'
                                                                2000 A

                                                                      ¥
                                                                             VAQUILlAS
                                                                               RANCH
                                                                            A-I No. 72
                                                                                                                A-l No. 24
                                                                                                                                                o     VAQUlllAS A-l No.
                                                                                                                                                        RANCH
                                                                                                                                                     A-L No. 'O~
                                                                                                                                                                         (BHL)
                                                                                                                                                                          ~
                              (IH F'ED)                                                                                                                 (SHL)             V
                          1 ItI<h _ 'COOn.




                                                                                                                      Ut\IT UNE
                                                                                                                      rENeE UNE
                                                                                                                      n",
                                                                                                                      SlJRVFt UN<:
~ &.SIS OF BEARING: G.P.s. Tx. South Zone, NAD.-27.
1KS    PI..(f WI.. NOT SI:IOW .ou ~ or PPEI.JNES QI. coaIS. ItC7IilHIO ~
NlD SIJI!YE'VIHC CO- INC. ASSU.IES /K) RESPQ.SU'UTT TO I,OCO.Tt PI!'EI.H:: 0lI CA8I.( CRDSSI'IGS.
IfO ClNII IS IIER£8T w.l)r ~ CI.IRIIDfT 011 AI:TU\I. SURfACE/W~ f[£ O'MID!SMIP OR
I.LSSCa ntIS tfI.t.\fI'M'; W.DE CXCWSMJ.Y fOR CCHCICOF'tlU.I' COU'N«.
 IXPI'RIGHT IIOWI.NlO ~ IH) Sl.1IM'I'1NG co., INC. 20130




                                                                                                                                                                                      119
HOW~~~[lW
   ENGINEERING AND SURVEYING CO.

                                                EXHIBIT "A-14"

                                       FIELD NOTES
                                            FOR
                              CONOCOPHllWWFSCOMPANY
                          V AQUILLAS RANCH LEASE 199129-001
                                   RETAINED TRACT 14
                       (VAQUILLAS RANCH A-I WELLS No. 18, No. 35,
                             No. 85, No. 155, No. 185, & No. 240)
                                       640.00 ACRES

     A TRACT OF LAND CONTAINING 640.00 ACRES, more or less, being out of the
     V.quillas Ranch Lease 199129-001,26,622.79 Acres (Called), situated in Survey 1695,
     G.B. & C.N.G. R.R. CO., Abstract 1268, Webb County, Texas, and being more
     particularly described as follows:

     BEGINNING.t. found 2" pipe which bears N 41°50'50" W,' distance of 1,969.80
     feet, from the V.quillas Ranch A-I No. 35 Well;

     THENCE, N 89~1'27" E, a distance of 6,725.49 FEET, to a point for the Northeast
     comer hereof;

     THENCE, S 00°48'50" E, a distance ofl,999.0S FEET, to a point for a deflection right;

     THENCE, S 00°39'16" E, a distance of2,lSO.OO FEET, to a point for the Southeast
     corner hereof;

     THENCE, S 89°20'44" W, • distance of 6,707.86 FEET, to • point for the Southwest
     comer hereof;

     THENCE, N 00°58'29" W, • distance of 4,150.50 FEET, to the POiNT OF
     BEGINNING and containing 640.00 acres of land, more or less.

                            Basis of Bearing: G.P.S., TX. South Zone, NAD-27




                                                  SHEET 1 OF2
                       H:\HOWLAND\SURVEYrNG DEr ARTMEN1'Jobs\20 13\22131.15-13\22131.15-13.doc


                       www.howlandcompanies.com
 7615 N. Bartlett Avenue . P.O. Box 451128 (78045) . Laredo, TIC 78041 P. 956.722.4411         F.956.722.5414
                   TBPE Firm Registration No. F-4097 , TBPL5 Firm Registration No. 100464-00


                                                                                                                120
                                                                      EXHIBIT "A-14"
                                                       CONOCOPHILLIPS COMPANY
                                      VAQUILLAS RANCH LEASE 199129-001 - RETAINED TRACT 14
                                             (VAQUILLAS RANCH A-1 WELLS No. 1B. No. 35.
                                                 No. B5. No. 155. No. 185. &: No. 240)
                                                             640.00 ACRES
                                                                                WEBB COUNTY, TEXAS


       !                                                                                                                                                              :•
                                                                                                                                                                      I•
                                                                                                                                                                       •
                                                                                                                                                                      I•           0
                                                                                                                                                                       •           ""
                                                                                                                                                                                '"<-"'''
                                                                                                                                                                                    .'"
                                                                             SURVEY 1698
                                                                             T.M. R.R. CO.
                                                                                                                                                                      I•        Np:; .....
                                                                                                                                                                                >- .t;
                                                                            ABSTRACT 2592
                                                                                                                                                                       •        [;!"'g
                                                                                                                                                                                ",'"

                                                                                                                                                                                "'''''''
                                                                                                                                                                                '" .~
                                                                _ • N 89"21'zr E ,.. 8.725..49'                                                                                     "
                                                                                                                                                                                   oj

                                      t,,
                                   ~:
                                   ~,
                                        ,
                                      ,,,
                                                                                                                                                                        I..,
                                        ,
                                                                        CONOCOPHllLIPS COMPANY
   •                           ',\:           VAQUILLAS
   Ii!     L... ____',,~L   ___ -¢-           RANCH
                                                                    YAQUIU..AS RANCH lEASE 199129-0Q1
                                                                         26,622.79 ACRES (CAUEO)
   S       I                                A-l No. 35                    RET.NNED &40.00 Jal£ lRoIlT
   :;;
       ,                                                                                                                                                                ----
   ~
                                                                                   VAQUILLAS
                                                                            -¢-A-IRANCH
  Iz
                                                  VAQU1LlAS
                                                                                    No. 185

                                                                                     SURVEY 1695
                                                                                G.B. & C.N.G. R.R. CO.
                                                                                    ABSTRACT 1286
                                            -¢- A-IRANCH
                                                     No. 18
                                                                                WEBB COUNTY. TEXAS
                                                                                    VAQUILLAS                              VAOUILlAS
                                                                                -¢-A-IRANCH                            -¢- A-IRANCH
                                                                                                                                No. 85
                                                                                       No. 155




               VAQUILLAS
                                                                  S 89"20'4-4- W     I'"   8.707.86'
                 RANCH                        VAQU1LLAS
              A-I No. 215~-O    RANCH                                                •I     VAQUIUAS
                                                                                                                                             VAQUILLAS ,..l.,:
                                                                                                                                               RANCH       V
                 (8HL)  ¥    A-I No. 215
                                                                                     tr                                                 A-I No. 191
                                                (SHl)
                                                                                     r        RANCH
                                                                                           A-I No. 193                 VAQUILlAS
                                                       VAOUILLAS                                              RANCH
                                                -¢-      RANCH                                             A-I No. 24'-r\.,.
                                                      A-I No. 11
                                                                                                              (BHL)                  '"0
                                                                                                                             VAQUlllAS
                                                                                                  o liAS n.                    RANCH
                             SURVEY 1692                                                        VARA~CH V                   A-I No. 241
                            P.B. REYNOLDS                                                      A-I No. 184                     (SHl)                           -¢-
 VAOUILlAS ~                ABSTRACT 2419                                                                         SURVEY 2112                         VAQUILLAS         I
  RANCH ¥                                                                                                        P.B. REYNOLDS                             RANCH'
A-1 No. 73
                                                                                                                 ABSTRACT 2420                      A-I No.          1301
                    GRAPHIC SCALE                                                                                                         VAOUtLlAS
                                                                                                                                       -¢-  RANCH                       VAQUllLAS
 k-_J_~~                              'j                                                                   VAQUILlAS
                                                                                                       -¢- A-IRANCH                      A-l No. 186                      RANCH
                                                                                                                No. 15                                                 A-l No. 2~
                         I It< FEET   )
                      , Inch _    .ooon.                                                                                                                                   I    (BHL) ~

                                                                                                                  LEG£HD                                   Revision              0. ••

                   HOWlANlW
                         ENGINEERING AND SURVEYING CO.
                  lW'E"""'~""F-40!J7             TDPl.!I"""RIQ1ontoA .... l~
                                                                                                 0
                                                                                                 -¢-
                                                                                                  ,
                                                                                                            -   HORIZOHTAL WELl.
                                                                                                                SURF...a: UlCATlOH
                                                                                                                wru.
                                                                                                                UNIT UNC
                                                                                                                                                               ,
                                                                                                                                                               ,
                                                                                                                                                                 1             04-12 13
                                                                                                                                                                               05-17 13
                                                                                                                                                                               06 06-13
                                                                                                                ITHCt Wit
                     781~   .... _ A ......   LattocIi>.lX.~l
                              YNNI.howIandcompanlot>.com
                                                              P.II5S.72Z.4411
                                                                                              -------
                                                                                                 .. ""                                                 I       •               10--16 13

 WARNING: B.ISIS OF OCARlNG; G.P.S. Ix. South Zone, HAD. 27.
 TlfS pv,:r IoI<Y NOT SHlW AU. ~ CK PlPEUNES OR CoIa.l:S. ItO'II\JMI OQ<E£RHG
 »ID SlJR'o'(YH; CC_ IHC. AS:SU.1ES NO ~ TO LOC,I,TE P'IPWNE OR CIa..E a!OSSllGS.
                                                                                              flEW DATE
                                                                                                                SURVEY WIt

                                                                                                                '00,        ,N.    .    DRAWN BY: LAF./S.l.t.4.
 N:I a.NIj IS 1IUI£B"f u,o,oc ~ Cle!OfT OR JoClUI,L SUIII'~ Ftt 0IfI'If0!SHP OR
 I.L$SOIt nlIS CfWI'RtC u,o,oc ncuJSMl."I' FtlIi cc:tIOCOI'HWPS CC ....Nlr.
                                                                                                "'              "'                      CHECKED BY: J.S.
                                                                                                                                        JOB No. 22131.15 13
 COPY!I1(;IIf IIOWVJIl DfCII£IRtfG Nfl) ~ co.• K:. 2013C
                                                                                                                                        SHEET:       2 OF      2



                                                                                                                                                                                             121
HO·.•Q~1J i&r~ ~1~~.",
 . '• •J~·31;>~<t\..&J~~
     ENGINEERING AND SURVEYING CO.

                                                  EXHIBIT "A-IS"

                                                   FIELD NOTES
                                                           FOR
                                       CONOCOPHILUPSCO~ANY
                           VAQUILLAS RANCH LEASE 199129-001
                                   RETAINED TRACT 15
                       (VAQUILLAS RANCH A-I WELLS No. 180 & No. 217)
                                      541.82 ACRES

        A TRACT OF LAND CONTA1NING 541.82 ACRES, more or less, being out oflhe
        Vaquillas Ranch Lease 199129-001,26,622.79 Acres (Called), situated in Survey 279,
        O.C. & S.F. R.R. CO., Abstract 1353; and Survey 1004, P.B. Reynolds, Abstract 2421,
        Webb County, Texas, and being more particularly described as follows:

       BEGINNING ata point which bears S 54'13'31" E, a distance of 2,749.54 feet, from the
       Vaquillas Ranch A-I No. 180 Well;

       THENCE, S 89°24'49" W, a distance of 5,281.57 FEET, to a point for the Southwest
       corner hereof;

        THENC~        N 00°46'34" W. a distance of2,624.47 FEET, to a point for a deflection
       rigbt;

       THENCE, N 00°30'06" W, a distance of 3,119.05 FEET, to a point for the Northwest
       comer hereof;

       THENCE, N 89°45'42" E, a distance of2,654.31 FEET, to a point for an exterior
       corner hereof;

       THENCE, S OO~8'SO" E, a distance of2,550.31 FEET, to a point for an interior comer
       hereof;

       THENCE, N 89°35'17" E, a distance of2,653.22 FEET, to a point for an exterior
       corner hereof;

       THENCE, S 00°16'38" E, a distance of3,169.04 FEET, to the POINT OF
       BEGINNING, containing 541.82 acres of land, more or less.

                               Basis of Bearing: G.P.S., TX. South Zone, NAD-27




                                                    SHEET 1 OF2
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                         www_howlandcompanies.com
   7615 N. Bartlett Avenue , P.O. 80)(451128 (78045) , laredo, TX78041 P. 956.722.4411           F.956.722.5414
                     TBPE Flrm Registration No. F-4097 : TBPLS Finn RegIstration No. 100464-00


                                                                                                                  122
                                                                                EXHIBIT "A-15"
                                                                             CONOCOPHILLIPS COMPANY
                                                                    VAQUILLAS RANCH LEASE 199129-001
                                                                                   RETAINED lRACT 15
                                                    (VAQUILLAS RANCH A-I WEllS No. 180 & No. 217)
                                                                     541.82 ACRES
                                                                                       WEBB                TEXAS


                                                                                                                                                                                          SURVEY 41



   ---~
                                                                                      SURVEY 280                                                                                          C.C.S.D. 8<
                                                                                       J. LEONARD                                                                               ~ R.G,N.G. R.R. CO.
                                                                                     ABSTRACT 2634                                                                              \ ABSTRACT 1039



   SURVEY 1698 •

IABT,'SM'T'I"R'C·R'T·   i~92~
                                •
                                         __    N:;. :"':.;:;":. '~: 2;•. .:E;"N-="::"":.:::.3;.;1_'- - ? - - - -        - - -- - - -- - -                                     -1
                                                                                                                          SURVEY 279
                                                                                                                   G.C. 8< S.F. R.R. CO.
                                                                                                                     ABSTRACT 1353




            I
                                                                                                                   WEBB COUNTY. TEXAS




                                                                                                     '"
                            z                                                                                                                                                    '------
                                                                                                                                                                                         SURVEY 40
                                                                                                                                                                                         C.R. DAVIS
                                                                                                                                                                                       ABSTRACT 2203
                                                                            CONOCOPHILL1PS COMPANY
                                                                    VAOUILLAS RANCH LEASE 199129-001
                                                                         26,622.79 ACRES (CALLED)
                                                                          RETAlh£D 541.82 N.!R£ t.tm'


                                                                                       VAQUILlAS RANCH
                                                                                          A-I No. 180*:: ________ !~~:...                                   _________              I&J



                                                                                                             1     "                                                               ~
                                ,.                             VAQUILlAS RANCH .
                                                                                      0                       r
                                                                                                              1
                                                                                                                       ',....
                                                                                                                                ' ..... to
                                                                                                                                                                                   io
                                                                                                                                                                                   ....
                                ~                                                                                                         :S~.
                  -¢-           •
                                                                  A-\ No. 217
                                                                        (SHL)                              ~I
                                                                                                              1                       <::. ..
                                                                                                                                        ~;-41...J:                                 .,~
 VAQUILLAS RANCH!                                                                                          "!J                                  "'~s.l~('
   A 1 No 104  .,                                                                                          -"                                                            ._
      -.                        z - - - - - - - - - - .. -                                .... - - - : - - - - - - - ..                                     .... , ... - ..
                                                    VAQUILLAS RANCH                                           i                                                    ' . ., . .
                                              -¢-      A-I No. 217    jl      ...... ~

      VAQUILLAS
                        ~OC~
                             ~----------~(8~H~0~--~~~~~--~~~------------------·1r--,
                                                 S 89"24'49- W ... fi,281.57'
           A-I No
                                -y                                                                                 VAQUILlAS RANCH
                                     •                                                                       "'.OA-l No. 242
                                                                                    VAQUlllAS RANCHV'                       (SHl)
                                                                                     A-I No. 242
                                                                                             (BHL)

                                                                    VAQUIUAS RANCHA                                      SURVEY 1004
                                                                       A-I No. 157 Y                                    P.B. REYNOLDS
                                                                                                                        ABSTRACT 2421

                          GRAPHIC SCALE                                                    VAQUILlAS RANCH

      bo-...........
    !!CO           0    ~!!CO             If'

                                           I                                              -0-
                                                                                          o
                                                                                             A-l No. 218
                                                                                                (BHL)
                                                                                              VAQUIUAS RANCH
                                                                                                                                                                                          RANCH
                                                                                                                                                                                           216




                                                                                                                       ~,~~l~~
                                                                                                          =--':;--= := nES
                                                                                                                           .. SURVtY UH£
   WARNING: BASIS OF BEARING: G.PS. Tx. South Zon.., NAD.-27.
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                                                                                                                                                                                                        123
  ENGINEERING AND SURVEYING CO.

                                               EXHIBIT "A-16"

                                                FIELD NOTES
                                                    FOR
                                   CONOCOPBIL~SCOMPANY
                      V AQUILLAS RANCH LEASE 199129-001
                               RETAINED TRACT 16
                (VAQun.LAS RANCH A-I WELLS No. 29, No. 44, No. 157,
                         No. 212, No. 216, No. 218, & No. 242)
                                    558.74 ACRES

    A TRACT OF LAND CONTAlNING 558.74 ACRES, more or less, being out of the
    V.quillas Ranch Lease 199129-001,26,622.79 Acres (Called), situated in Survey 1004,
    P.B. Reynolds, Abstract 2421, Webb County, Texas, and being more particularly
    described as follows:

    BEGINNlNG at a point which bears N 74°36'06" E, a distance of 2,077.33 feet, from
    the V.quillas Ranch A·I No. 242 Well;

    THENCE, S 00°31 '16" E, a distance of 4,612.08 FEET, to a point for the Southeast
    comer hereof;

    THENCE, S 89°23'44" W, a distance of 5,270.83 FEET, to a point for the Southwest
    corner hereof;

    THENCE, N 00°39'16" W, a distance of 4,613.75 FEET, to a point for the Northwest
    comer hereof;

    THENCE, N 89"24'49" E, a distance of 5,281.57 FEET, to the POINT OF
    BEGINNING, containing 558.74 acres of land, more or less.

                            Basis of Bearing: G.P.S., TX. South Zone, NAD·27




                                                                                                               j
                                                                                                               ,I




                                                 SHEET 1 OF2
                       H:\HOWLAND\sURVEYlNG DEPARTMEN1\lohs\20 13UlI31.17-13U2131.17-13.doc



                      www.howlandcompanies.com
7615 N. Bartlett Avenue : P.O. Box 451128 (78045) , laredo, TX 78041 P. 955.722.4411          F.955.722.5414
                  TBPE Firm Registration No. F-4097 , TBPL5 Firm Registration No. 100464-00


                                                                                                                    124
                                                                                          EXHIBIT "A-16"
                                                                   CONOCO PHILLIPS COMPANY
                                                    VAQUILlAS RANCH LEASE 199129-001 N RErAINED TRACT 16
                                                      (VAQUIUAS RANCH A-1 WELLS No. 29. No. 44. No. 157.
                                                             No. 212. No. 216. No. 218. & No. 242)
                                                                          558.74 ACRES
                                                                                                     WEBB COUNTY. TEXAS

                                        I,                                                                                     VAQUIUAS!
                                                                                                                         A           RANCH


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                                        I


                                        I
                                                                SURVEY 279
                                                     G,C. & S.F. R.R. CO.
                                                        ABSTRACT 1353                            0
                                                                                                          VAQUILtAS
                                                                                                           RANCH
                                                                                                                         V   A _ 1 No. 180
                                                                                                                                                                                          I
                                                                                                                                                                                          •



                              VAQUILlAS                                                               A-I No. 217                                                                         I
    "'''''''
        ·N _n...
    '"
              ....
    "''''~ VA-l
    ~
                               RANCH
                                    No. 104
                                                                                                .        (SHl)
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    ",_to                                                                A-1 No. 217
    to~':!i!
                                        :                                     (BHL)     -¢-          N 89"2...·-49· E ... 5.281.5'"                                                       :
         <Xi
         ci                                                                                                                      I                              . < _----
                                                                                                                             ;...j                   .... :!IS·.9§..- ... -
                VAQUIUAS-Q                                                                                VAQUILLAS:a1                        _1:!..1iO"f1·~
                     RANCH                                                                                 RANCH          A&~~:.: ___ ~ __________ _
              A-I No. 240                                                                             A-I No. 242 V                   VAQUILlAS             2.008'
                                                                                                         (BHL)                          RANCH
                                                                                                                                     A-I No. 242
                                                                                                                                         (SHL)                                                        SURVEY 40
                                                                                                      -""t.. VAQUILlAS
5                                                                                                     V       RANCH                                                                                    C.R. DAVIS
                                                                                                           A-I No. 157                                                                          ABSTRACT 2203

 -     -----;:-
                                    ~
                                                                                                  CONOCOPHILLIPS COMPANY
                                                                                              VAQUILlAS RANCH LEASE 199129-001
                                                                                                   26,622.79 ACRES (CALLED)                                                                   ~
                                                                                                    RETAlliED &!58..74 ~ UNIT
                                                                                                                                                                                              ~
    VAOUILlAS
        RANCH
A-1 No. 191
                         A   G
                         -y- oi
                                                                                       VAQUrLLAS
                                                                                      RANCH  .Q-                                                     VA~~~                                    r------
                                                                                                                                                                                              •
     SURVEY 2112 t
    P .B. REYNOLDS :It
                                                                                   A-I No. 21SO VAQUIUAS
                                                                                        (BHl)                RANCH
                                                                                                          A-I No. 218
                                                                                                                                                    A-1 No. 216d'"'t..
                                                                                                                                                          (BHL)               ¥
                                                                                                                                                                          VAQUJLLAS
                                                                                                                                                                                              ...
                                                                                                                                                                                              ':0
    ABSTRACT 2420.                                                                                           (SHL)                                                         RANCH

P     VAOUILLAS
    RANCH       ,.,
                                    ~                                                                                         SURVEY 1004
                                                                                                                           P.B. REYNOLDS
                                                                                                                                                                      A-I No. 216 -
                                                                                                                                                                              (SHL)           ~
 A-1 No. 241    ~                                                                                                         ABSTRACT 2421
    (5HL)    -¢-Z                                                                                    VAOUILlAS          WEBB COUNTY. TEXAS
                                                                                               -¢-     RANCH
                 VAOUlllAS                                                                           A-l No. 29
                     RANCH
               A-1 No. 130                                         VAOUlUAS
                                                                         RANCH
h    VAOUILLAS                                                   A-1 No. 212
rr.    RANCH
                                                                 o       (SHL)
    A-I No. 186                                                                                                                                          VAQUILlAS            -¢-
                                                        _N          VAOUIU.AS                                                                                RANCH
                                                        ¥           RANCH                                                                              A-1 No. 44
                                                               A-I No. 212 (BHl)
                                                                                              S 89"23'''- W ~ a.27D.aJ'
 VAQUILL.AS  VAQUILLAS
   RANCH    ~ RANCH
A-I No. 239 A-1 No. 187
         (SHL)                               1
                 ().          VAQU1UAS
                     V          RANCH
                             A-I No. 239

                                (BHLI


                                                                                                                              SURVEY 1003
                                                                                                                              J. POITEVENT
                                                                                                                             ABSTRACT 1655




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                                                                                                                                                                                                                        125
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         ENGINEERING AND SURVEYING CO.

                                                     EXHIBIT "A-17"

                                       FIELD NOTES
                                           FOR
                                CONOCOPRUJJPSCOMPANY
                             VAQUILLAS RANCH LEASE 199129·001
                                    RETAINED TRACT 17
                       (VAQUILLAS RANCH A-1 WELLS No. 15, No. 71, No. 130,
                  ~~~~~~~m~m~~~~~~
                             No. 239, No. 241, & VAQUILLAS RANCH A No. 89)
                                                635.73 ACRES

            A TRACT OF LAND CONTAlNlNG 635.73 ACRES, more or less, being out of the
            Vaquillas Ranch Lease 199129·001,26,622.79 Acres (Called), situated in Survey 2112,
            P.B. Reynolds, Abstract 2420, Webb County, Texas, and being more particularly
            described as follows:

           BEGINNING at a point which bears N 41°40'24" W. a distance of 1,866.60 feet, from
           the Vaquillas Ranch A·I No. 184 Well;

            THENCE, N 89"20'44" E, a distance of3,399.18 FEET, to a point for the Northeast
            comer hereof;

            THENCE, S 00°39'16" E, a distance of3,089.17 FEET, to a point for a deflection right;

           THENCE, S 00°12'57" E, along an existing fence line, a distance of3,414.86 FEET, to
           a point for the Southeast comer hereof;

•          THENCE, S 89°22'44" W, a distance 0[5,109.93 FEET. to a point for the Southwest
            comer hereof;

           THENCE, N 00°20'48" E, a distance of3,275.75 FEET, to a point for an exterior
           corner hereof;

           THENCE, N 89°26'27" E, a distance of 1,655.49 FEET, to a point for an interior comer
           hereof;

           THENCE, N 00°13'32" W, a distance of3,228.56 FEET, to the POINT OF
           BEGINNING, containing 635.73 acres ofland, more or less.

                                  Basis of Bearing: G.P.S., TX. South Zone, NAD·27




                                                        SHEET 1 OF2
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                             www.howlandcompanies.com
       7615 N. SarttettAvenue     P.O. Box 451U8 (78045)          laredo, 1)( 78041 P. 956.722.4411     F.956.722.5414
                        TBPE Firm Registration No. F-4097   I   TBPLS Firm Registration No. 100464-00


                                                                                                                         126
                                                                                       EXHIBIT "A-17"
                                          CONOCOPHILLIPS COMPANY
                           VAQUIUAS RANCH LEASE 199129-001 N RETAINED TRACT 17
           (VAOUIUAS RANCH A-l WEllS No. 15. No. 71. No. 130. No. 145. No. 184. No. 186. No. 187.
              No. 191. No. 192. No. 193. No. 194. No. 239. No. 241. & VAQUIUAS RANCH A No. 89)
                                                 635.73 ACRES
                                                                                                WEBB COUNTY. TEXAS

                                                                                                                                                                      VAQUILlAS
                                                                                                                                                                       RANCH) ..,...:
                                                                                                                                                                                          .rJ
                                     VAOUlliAS
                              -¢-                                                                                                                                  A-I No. 240      I

                                                                                                                                                                                                                 .~
                                      RANCH                         VAOUJUAS
                                    A-I No. 18                      RANCH
                                                                 A-I No. 155                                                                    VAOUJUAS
                                                                           -¢-                                                        -¢-


                                                                                                                                                                                                              J
                            SURVEY 1695                                                                                                          RANCH
                       G.B. & C.N.G. R.R. CO.                                                                                               A-I No. 85
                             ABSTRACT 1268
                                                                                 -d~________~N~~~~·:":·-!E~-~3~~~~.1~8~·                                           __________~
f- - - - - • - - - - - - - - - -                                       --               ",...                                 t
                                VAOUILLAS                                                   " 1

                  V
                     "0. A-IRANCH
                             No. 215
                                                               VAQUJUAS
                                                                RANCH
                                                                                       tr '<.iro;'~...                        1·I
                                                                                                                                                               VAQUILlAS
                                                                                                                                                                 RANCH or
                                                                                                                                                              A-I No. 191
                                                                                                                                                                                 r'-I:

          VAQUILlAS                 (SHL)                    A-I No. 193                            \.   ~                    I~          VAQUILLAS                                                             ~CIlc;j
                                                                                                                                                                                                                o~ ...
     A-l;~~215                             VA~~                              ~ij                         "("~~,~Q•.• !,~
                                                                                                                                            RANCH                                               1::
                                                                                                                                         A-I No. 241                                                            00'"

                                                                                                                                                                                                ~
                                    A                                                                                                                                                                           ~Z    ...
                                                                                                                                                (BHL)    A
                                    '¥' A-I        No. 11
                                                                                                                              I
                                                                                                                                                         "'tJ VAQUILlAS                                         ~~'-'
                                                                                                                                                                                                                  ,,,OJ
                                                                                                                                                                                                                '" ....
                                                                                 I')                                   '.\.
                                                                                                                                                                   RANCH                         1
                             SURVEY 1692                                         1     1----,"',.----4;l-                                                     A-1 No. 241                       w               "m"'
                            P.B. REYNOLDS                                        ~                 ,               VAQUILLAS                                       (SHL)
                                                                                                                                                                                     -¢-        :.              "''';~
I.....                                                                                                                 RANCH
rv        VAQU1LLAS
            RANCH
         1\-1 No. 7J
                            AB,STRACT 2419
                                                      VAOUILLAS
                                                                                                              A-I No. 184                                              VAQUJLlAS
                                                                                                                                                                           RANCH
                                                                                                                                                                                                j                VAOtJlLLAS
                                                                                                                                                                      /1-1 No. 130
                                                        RANCH                                                                                                                                                      RANCH
                                                                                                                                                                                                                A-1 No. 212
                                                 A-I No. 237
                                         VAQUILlAS (8Hl)
                                                                                 z
                                                                                                                       VAQUIUAS
                                                                                                                                                          A
                                                                                                                                                          ¥
                                                                                                                                                                VAQUILlAS
                                                                                                                                                                 RANCH                          '"                 (SHL)

           VAOUILLAS
                                            RANCH
                                      A-I No.        237
                                                        ail-                                                 -¢-          RANCH
                                                                                                                   A-I No. 15
                                                                                                                                                              A-I No. 186
                                                                                                                                                                                                                   0
         A_t~o~H198                         (SHL)
 o           (SHL)                            N 89"2S'2r E
                             ~~<~__~1~.~==.~~~·                  ______~                                                                                                V=6~                    r---'            V=6~
J...-..,        ,~-=.
                                                                                                                                                                      A-I No. 187                               A-I No. 212
                                                                                                                                                          VAQUllLAS             ---""--                            (8HL)
                                                                                                                                                            RANCH               V
              -¢- VAOUlu.AS
                       RANCH
                   A-I No. 91
                                                              -¢-                          CONOCOPHILlIPS COMPANY
                                                                                                                                                         A-I No. 239
                                                                                                                                                              (SHL)    %
                                                                                       VAOUILlAS RANCH LEASE 199129-001                                                     .

         VAOUILlAS
                                                     VAQUIllAS
                                                        RANCH
                                                                                            26,622.79 ACRES (CAllED)                                                   VA~~~~                   ill
                                                                                                                                                                                                -. .
                                                                                             RETAINED W.73 ACRE UN:T                                                  A-I No. 239
           RANCH                                    A-I No. 192
                                                                                                                                                                         (BHL)                  ~
b  A-I No. 195
           (SHL)                                                                                                              VAQUILLAS
                                                                                                                                    RANCH                                                        1
                                                                                                                              II No. 89
                                 w
                                                                               SURVEY 2112
    SURVEY 1693 ~     VAQUILLAS                                               P.B. REYNOLDS
                  • A   RANCH
    G.B. & C.N.G. ~ VA_I No. 194                                             ABSTRACT 2420
       R.R. CO.   0                                                        WEBB COUNTY. TEXAS
   ABSTRACT 1269:z
                                                                                                                                                                                                '"
                                                                                                                              VAOUllLAS
             VAQUILLA5                                                                                         -¢-                  RANCH
              RANCH                                                                                                           A-I No. 71
            A-I No. 90                                                     VAQUILLAS
                -¢-                                             -¢- II
                                                                            RANCH
                                                                            1 No. 145

b-                                                                                       589"22'44- W .... 5.109.93'

                                                                                                                                                                                          ~.
         VAOUILlAS
           RANCH                                                                                                               SURVEY 2367
   A-I No. 208                                                                                                                      F.R. FEILLE
                                                                                                                          AB~:T.~ _ _ _ ._
                                                                                                  .. '11                ..    "Ii           I           w_ _ • _ _ , _ _ ,
                                                                                 ='lI



                          GRAPHIC SCALE                                                                                                          SURVEY 278
                                                                                                                                                 FRED SPEED
     ~~~~?~_~~~~':'~~~~'=~'~~~T                                                                                                                 ABSTRACT 2462
                                 CIIII"EET)
                              1 In<~ ~   '(lOOn.

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                                                                                                                                                                                SHEET:      2 OF         2




                                                                                                                                                                                                                               127
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                                                     EXHIBIT "A-18"

                                       FlELDNOTES
                                             FOR
                              CONOCOPmLLWSCOMPANY
                          V AQUILLAS RANCH LEASE 199129-001
                                   RETAINED TRACT 18
                  (VAQUILLAS RANCH A-I WELLS No. 11, No. 24, No. 72, No. 73,
                             No. 106, No. 198, No. 215, & No. 237)
                                        615.92 ACRES

           A TRACT OF LAND CONTAlNlNG 615.92 ACRES, more or less, being out of the
           Vaquillas Ranch Lease 199129-001,26,622.79 Acres (Called), situated in Survey 1692,
           P.B. Reynolds, Abstract 2419, Webb County, Texas, and being more particularly
           described as follows:

           BEGINNING at a point which bears N 77'14'2T' E, a distance of2,088.50 feet, from
           the Vaquillas Ranch A-I No. 215 Well;

          THENCE, S 00°13'32" E, a distance of3,228.56 FEET, to a point for the Southeast
           comer hereof;

          THENCE, S 890:26'27" W. a distance of7,026.24 FEET, to a found fence comer post
          for a deflection right;

          THENCE, S 89'56'25" W, a distance ofl,257.95 FEET, to a point for the Southwest
          comer hereof;

          THENCE, NORTH, a distance of3,271.85 FEET, to a point for the Northwest comer
          hereof;

          THENCE, S 89°52'06" E, a distance of 4,950.94 FEET, to a point for a deflection left;

          THENCE, N 89°20'44" E, a distance of3,320,43 FEET, to the POINT OF
          BEGINNING, containing 615.92 acres ofland. more or less.

                                  Basis of Bearing: G.P.S., TX. South Zone, NAD·27




                                                       SHEET 1 OF2
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                            www.howlandcompanies.com
      7615 N. Bartlett Avenue     P.O. Box 451128 (78045) : laredo, TX 78041 P. 956.722.4411        F.956.722.5414       ..
                        TBPE Finn Registration No. F-4097 : TBPLS Firm Registration No. 100464-00
                                                                                                                     ~'::;.~{:

                                                                                                                                 128
                                                                                                                                                                                                                                                                                         129
                                                                                                                                                                                                          VAQUILL6.S
                                                                                                                                                                                                                RANCH
                                                                                                                                                                                                        A-I No. 18
                                                                                SURVEY 1698                                                   '. 156                                                                                             VAQUILLAS
                                                                                                                                                                            SURVEY 1695                                                    -¢-     RANCH
                                                                                P.B. REYNOLDS                                              (SHL)
                                                                                                                                                                    G.B. & C.N.G. R.R. CO.                                                      A-I No. 155
                                                                                ABSTRACT 2418                                                                           ABSTRACT 1268                                            N 7714'27· (
                                                                                                                                                                                                                                   2,088.50'
                I                                                                 S   OIlll·Q;t UO   Co ... 't,IIIIOU.IIII't                                                 ... 011 "'... ....,.   1:. ......""'.... .,.... [
                '--- - - - - - -                                                                                                                                                                                          ,                       J>'"'""'-'::
                                                                                                                                                                     VAQUILLAS
                                                                                                                                                                      RANCH
                                                                                                                                                                   A-1 No. 215>'<A-_---
                                                                                                                                                                          (BHL)        V\.J----------:;;:;..-;,---                                      VAQUILLAS
                                                                                                                                                                                       VAQUILLAS                                                          RANCH
                                                                           1                                                                                                              RANCH                                                        A-I No. 193
                         SURVEY 1691                                       "                                                                                                        A-I No. 215                   VAQUILLAS


                                                                        ~il                                                                                                                                                                         i,
 VAQUILL6.S     G.C. & S.F. R.R. CO.                                                       CONOCOPHILLIPS COMPANY                                                                          (SHL)          -¢- A-IRANCH
RANCH CO.             ABSTRACT 1267                                                VAQUILLAS RANCH LEASE 199129-001                                                                                                No. 11
LTD. No. 65                                           ~                                 26,622.79 ACRES (CAllED)
o   (SHL)
                                                                        ~I!              RET~ED 61S.92 ~ UrtT                                                                          SURVEY 1692
                                                                                                                                                                                     P.B. REYNOLDS
                                                                                                                                                                                                                                                                  VAQUILLAS A
                                                                                                                                                                                                                                                                    RANCH V
                     VAQUILLAS                                                                                                                                                                                                                                   A-l No. 184
              i)-    RANCH CO.
                                                                        ·"1                                                                                                          ABSTRACT 2419                                                   '"
                                                                        ~I""I
                                                                                                                                                        VAQUILLAS .r'-f

                                                                                                                                                                                                                                                     ~
                    LTD. No. 35                                                                                                                          RANCH V             WEBB COUNTY, TEXAS
                                                      §z                                                                        VAQUIUAS
                                                                                                                                 RANCH
                                                                                                                                                       A-I No. 73
                                                                                                                                                                                                                         VAQUILl.AS
                                                                                                                                                                                                                           RANCH                     §
                                       VAQUILLAS A                                                                             A-l No. 106                                                                              A-I No. 237
                                                                                                                                                                                                                                                     .,
                                                                         .II"
                                      RANCH CO.V                                                                                  (BHL)                    VAQUILLAS                                             VAQUILLAS (BHL)                                            VAQUILLAS
                                      LTD. No. 22          VAOUILlAS
                                                             RANCH                      -¢-
                                                                                                  VAQUILLAS
                                                                                                   RANCH                           A                         RANCH                                                 RANCH
                                                                                                                                                                                                                A-I No. 237
                                                                                                                                                                                                                                 cP-                                 -¢-      RANCH
                                                                                                                                                                                                                                                                           A-l No. lS

                                                                         .II"
 LTD. No. 68                                               A-I No. 72                            A-I No. 24                        -y-    VAQUILlAS A-I No 198 VAQUILLAS
    (SHL)                                                    -¢-                                                                    O       RANCH      (BHL)     RANCH                                             (SHL)
                                                                                       F"an<:a
                                                                                        Poot
                                                                                                                                       ' A-L No. 106    f-t.        0
                                                                                                                                                              A-I No 198
                                                                                                                                            (SHL)       V        (SHL)

                                                                                                                                       s
                                                             1.257.~'                                                                                                             -¢- VAQUILlAS             •
                                       SURVEY 1678                                                                                                                                       RANCH              I

                                      ABSTRACT 2495                                                                                                                                    A-I No.         911                          -¢-
                                                                                                                                                                                                                                        VAQUILLAS
                                                                                                                                                                                                                                          RANCH
                                                                                                                                                                                                                                       A-I No. 192
                                                                            1
                                                                            "
                                                                                  VAQUILLAS                                                    VAQUILlAS                                                                                        SURVEY 2112
               GRAPHIC SCALE                                                          RANCH                                                      RANCH    A             VAQUILLAS                                                           P .B. REYNOLDS
                                                                                  A-I No. 92                                                  A-I No. 195 V        0      RANCH                                                             ABSTRACT 2420                    VAOUfLLAS
'~B;
 ..:-.-~
                       (!If ..... I
                    , ,... h ..
                                    'j
                                  ,ooon.
                                                     ""I                  It           -¢-                                                       (BHL)                 A-I No. 19S
                                                                                                                                                                          (SHL)
                                                                                                                                                                                                                                                                        -¢-     RANCH
                                                                                                                                                                                                                                                                              A No. 89




                                                                                                             EXHIBIT "A-18"
                                                                                                            CONOCOPHILLIPS COMPANY
                                                                             VAQUIUAS RANCH L£ASE 199129-001 ~ RETAINED TRACT 18
                                                                           (VAQUIUAS RANCH A-1 WEUS No. 11, No. 24, No. 72, No. 73.
                                                                                     No, 106, No, 198. No. 215, '" No. 237)
                                                                                                  615.92 ACRES
                                                                                                                          WEBB COUNtY, TEXAS
HOWLAND
  ENGINEERING AND SURVEYING CD.

                                               EXHIBIT "A-19"

                                                FlELDNOTES
                                                           FOR
                          CONOCOPmLLWSCOMPANY
                      V AQUILLAS RANCH LEASE 199129-001
                               RETAlNED TRACT 19
             (VAQUILLAS RANCH A-I WELLS No. 25, No. 90, No. 91, No. 92,
                     No. 132, No. 143, No. 195 No. 208, & No. 238)
                                    640.00 ACRES

    A TRACT OF LAND CONTAINING 640.00 ACRES, more or less, being out of the
    V.quillas Ranch Lease 199129·001,26,622.79 Acres (Called), situated in Survey 1693,
    G.B. & C.N.G. R.R. CO., Abstract 1269, Webb County, Texas, and being more
    particularly described as follows:

    BEGINNING at a point which bears N 24°31 '42" W, a distance of 1,631.39 feet, from
    the Vaquillas Ranch A·I No. 92 Well;

    THENCE, N 89026'27" E, a distance of5,370.75 FEET, to a point for the Northeast
    comer hereof;

    THENCE, S 00020'48" W, a distance of3,275.75 FEET. to a point for a deflection
    right;

    THENCE, S 00°41'52" W, a distance of 862.52 FEET, to a point for a deflection-left;

    THENCE, S 00021'12" E, a distance of 1,087.58 FEET, to a point for the Southeast
    corner hereof;

    THENCE, S 89'28'19" W, a distance of 5,311.17 FEET, to a point for the Southwest
    comer hereof;

    THENCE, N 00"23'39" W, a distance of 5,222.38 FEET, to the POINT OF
    BEGINNING and containing 640.00 acres of land, more or less.

                           Basis of Bearing: G.P.S., TX. South Zone, NAD-27




                                                 SHEET 1 OF2
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                      www.howlandcompanies.com
7615 N. Bartlett Avenue    P.O. Box 451128 (78045)   i     Laredo, 1X7B041 P. 956.722.4411      F.956.722.5414
                  TBPE Rrm Registration No. F-4097       TBPLS Arm Registration No. 100464-00


                                                                                                                 130
                                                      CONOCOPHllLiPS COMPANY
                                      VAQUlllAS RANCH lEASE 199129-001 N RETAINED TRACT 19
                                 (VAQUlllAS RANCH A-1 WElLS No. 25, No. 90, No. 91, No. 92, No. 132,
                                                No. 143, No. 195 No. 208, '" No. 238)
                                                            640.00 ACRES


                            il                                                                                                                      A
                                                                                                                                                    V
                                                                                                                                                              VAQUIUAS
                                                                                                                                                               RANCH
                                                                                                                                                         A-I No. 11

                            "I
                            I"
                            XI                       SURVEY 1892

                            I    "I                 !B~T:::J:~Ift~                   VAQUILLAS
                                                                                       RANCH
                                                                                                                          -¢-A:~~~:3                                   VAQUlllAS
                                                                                                                                                                         RANCH
                            "I ><                                                   A-L No. 106                                                                     A-I No. 237
                                                           VAQUlllAS                   (BHL)                                                                           (BHL)


                            II
                                                            RANCH                         >'<.                 VAQUIWIS                                                ""'-
                            ><                      -¢-   A-I No. 24                      V                     RANCH                                                    LIT'
  1"-<: VAQUILlAS                ><                                                              VA~~6~     A-I No. 198        VA~~6~                             VAQUILlAS
  V         RANCH                                                                                        106      (BHL)      A-1 No. 198                            RANCH
      A-I No. 72            ><                                                  -¢- 0 (SHL)         A-I No. 237
~._....__                                                                                                  ....
                    .~~_"':::;;::::::::::'...!!N~"'~2:!.'~2J":'~E:,~:..!~~~:"' _:''::~'::~ ",,''Y-- __ (_5H_L)__ _                        ....
                                                                                                                                  -¢- VAqUIUAS
                                                                                                                                         RANCH
                                                                                                                                       A-I No. 91
                                                                                                                                                                            -¢-
                                                                                                                                                                       VAQUIUAS
                                                                                                                           VAOUILLAS                                     RANCH
                                                                                                    VAQUILlAS                RANCH                                 A-I No. 192
                                                                                                     RANCH         A      A-I No. 195

                                                                  92
                                                                                                  A-I No. 195
                                                                                                     (BHl)
                                                                                                                   ¥o          (SHL)
                                                                                                                                                        (I)




                    ....,                                 VAOU!LlAS J?c... VAQUILLAS
                                                           RANCH ' U RANCH
                                                                                                        VAQUIUAS
                                                                                                                                                        -¢-
                                                                                                                                                                VAQUlllAS
                                                                                                                                                                 RANCH
                                                                                                                                                              A-I No. 194
                    ~.,
                                                      A-I No. 238           A-I No. 238
      0:                                                 (BHL)                 (SHL)
                                                                                                  -¢-     RANCH
      ~

            on      ,            "
                                                                                                        A-I No. 25
                                                                                                                                                           SURVEY 2112
  "'~'"
  r-  "
  ~C.?N             •            1                                             CONOCOPHllLlPS COMPANY
                                                                           VAQU1LlAS RANCH LEASE 199129-001
                                                                                                                                VAQUllLAS
                                                                                                                                 RANCH
                                                                                                                                                          P.B. REYNOLDS
                                                                                                                                                         ABSTRACT 2420
   "' ....
                    i !~I                                                      26,622.79 ACRES (CALlEO)                        A-I No. 90
  ~~~                                                                           RETAINED &40.00 ACRE UNIT                          -¢-
  ~B~                            "
                                                                                                                       -¢-                                     -------¢-
  "'~~              z
                                                                                                                    VAQUllLAS

      ,."                         I~
                                                                                                                       RANCH
                                                                                                                  A-I No. 208
                                                                                                                                                                 SURVEY 2367
                                                                                                                                                                  F.R. FEILLE
                                                                                                                                                                ABSTRACT 3333

                                 II
                                  "
                                                                                        SURVEY 1693
                                                                                   G.B. & C.N.G. R.H. CO.
                                                                                       ABSTRACT 1269
                                  I                                                WEBB COUNTY, TEXAS


                                  I                   ..-'"-<: VAQUILlAS
                                                      ¥      RANCH
                                                          A-I No. 1.32

                                                                                                                                                           SURVEY 276
                                                                               5                                                                           FRED SPEED
                                                                                                                                                          ABSTRACT 2462
                                  I
                                  "
                                  I
                                  "
                                                                                       SURVEY 1694
                                                                                       FRED SPEED
                                  I                                                   ABSTRACT 2461




                                      ( IN FlIT )




                                                                                                                                                                                   131
                                               EXHIBIT "A-20"

                                        FIELD NOTES
                                            FOR
                                   CONOCOPHILLIPS COMPANY
                           VAQUILLAS RANCH LEASE 199129-001
                                  RETAINED TRACT 20
                        (VAQUILLAS RANCH E WELLS No. 31, No. 70,
                               No. 82, No. 209, & No. 210 S'I")
                                       502.31 ACRES

     A TRACT OF LAND CONTAINING 502.31 ACRES, more or less, being out ofthe
     Vaquillas Ranch Lease 199129-001,26,622.79 Acres (Called), situated in Survey 277,
     G.C. & S.F. R.R. CO., Abstract 1337, Webb County, Texas, and being more particularly
     described as follows:

     BEGlNNlNG at a point which bears N 66"41 '22" W, a distance ofl,659.92 feet, from
     the Vaquillas Ranch E No. 31 Well;

    THENCE, N 88°50'37" E. a distance of 10,425.89 FEET. to a found concrete
    monument under an existing fence line, for the Northeast comer hereof;

    THENCE, S 00°36'47" E, along an existing fence line, a distance of 686.92 FEET, to a
    point for an exterior comer hereof;

    THENCE, S 89°31'31" W. a distance of 5,280.30 FEET. to a point for an interior
    corner hereof;

    THENCE, S OO~8'29" E. a distance of2,992.64 FEET. to a point for an exterior comer
    hereof;

    THENCE, S 89°49'01" W. a distance of 5,164.33 FEET. to a point for the Southwest
    corner hereof;

    THENCE, N 00°11 '12" W, a distance of 3,529.26 FEET, to the POlNT OF
    BEGINNING. containing 502.31 acres of land. more or less.

                            Basis of Bearing; G.P.S., TX. South Zone, NAD-27




                                                 SHEET 1 OF2
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                      www.howlandcompanies.com
7615 N. Bartlett Avenue I P.O. Box 451128 (78045) : Laredo. TX 78041 P. 956.722.4411 J        F.956.722.5414
                  TaPE Firm Registration No. F-4097 ! TBPLS Firm Registration No. 100464-00


                                                                                                               132
                                                                                                                                                                                                     133
                                                                             SURVEY 278
                                                                             FRED SPEED
                                                                            ABSTRACT 2482


                                         ____________-.____________________________                                                            ______________________________________ '"
                                  ~
                                   ~                                                                    ~N~8<~~:·sr~~E:-~'~O~.'~~~B9~·------                                            -y~.
                                                                                                                                                                                          :t~
                                                                                                                   VAQUILLAS                                                              :I! iii'
                                                                                                VAQUILLAS         RANCH                                                                   Is
                                                                                                 RANCH       -¢-E No. 209                                                                 (Il

                                                                                             AE No. 210 ST
                                                                                     o       V    ('HL)
                                                                                                                                                   -   ~-   ....... W ...   ~.280.JO·


                                                           E No. 31            VAQUILtAS
                                                                                RANCH
                                                                             E No. 210 ST
 SURVEY 1694
 FRED SPEED
ABSTRACT 2461
                             .,
                                                           SURVEY 277
                                                       G.C. & S.F. R.R. CO.
                                                          ABSTRACT 1337
                                                                            (SHL)
                                                                                                      -¢- VAQUILLAS
                                                                                                           RANCH
                                                                                                           E No. 70
                                                                                                                        I~5
                                                                                                                          N

                                                       WEBB COUNTY. TEXAS
                             ~
                                                                                                                          '"
                             §
                                                                                                                          ~
                                                            CONOCOPHllLIPS COMPANY
                                                        VAQUILlAS RANCH LEASE 199129-001                                                                   SURVEY 32
                             z                              26,622.79 ACRES (CALLED)
                                                             RETNNED 502.31 ACRE UNIT
                                                                                                       A   VAQUlLlAS    I Is                               C.R. DAVIS
                                                                                                                                                         ABSTRACT 2582
                                                                                                       ¥    RANCH
                                                                                                           E No. 82




                                                              S 89"-49'01· W ... 5,164.33'
                                                                           SURVEY 275
                                                                       G.C. & S.F. R.R. CO.
               GRAPHIC SCALE                                              ABSTRACT 1336
        .J
 i.-.-.-.
  "I
!!oOO
        _. . . .
             l!oO   ~oo



                       ( JI fEET)
                                   '
                                  1000          2000
                                                 I                       VAQUILLAS
                                                                           RANCH
                    1 .... h _ 1000",
                                                                         A No. 19



                                                                                               EXHIBIT "A-20"
                                                                                        CONOCOPHILLIPS COMPANY                                                              UNIT UH£
                                                                                                                                                        - - , - - '" rENCr UHr
                                                                        VAQUILlAS RANCH LEASE 199129-001 - RETAINED lRACT 20                            - - - - - - - '" TI[s
                                                                                (VAQUILlAS RANCH E WELLS No. 31. No. 70.
                                                                                     No. 82. No. 209. & No. 210 Sf)
                                                                                              502.31 ACRES
                                                                                                     WEBB COUNTY, TEXAS
  ENGINEERING AND SURVEYING CO.

                                               EXHIBIT "A-21"

                                                 FIELD NOTES
                                                        FOR
                                   CONOCOPHllL~SCOMPANY
                             V AQUILLAS RANCH LEASE 199129-001
                                          RETAlNED TRACT 21
                            (VAQUILLAS RANCH A-7 WELL No. 249)
                                                 608.05 ACRES

    A TRACT OF LAND CONTAlNlNG 648.05 ACRES. more or less. being out of the
    Vaquillas Ranch Lease 199129-001,26,622.79 Acres (Called), situated in Survey 259,
    C.C.S.D. & R.GN.G. & R.R. CO., Abslract 1137, Webb County, Texas, and being more
    particularly described as follows:

    BEGINNING at a point which bears N 39°24'54" W, a dislance of 1,866.66 feet, from
    the Vaquillas Ranch A·7 No. 249 Well;

    THENCE, N 88°53'51" E, a dislance of5,385.00 FEET, to a point for the Northeast
    comer berof;

    THENCE, S 00°35'40" E, a distance of 5,280.00 FEET, to a point for the Southeast
    comer hereof;

    THENCE, S 89°32'20" W. a distance 0[5,369.40 FEET, to a point for the Southwest
    comer hereof;

    THENCE, N 00°45'49" W, a dislance of 5,219.79 FEET, to the POINT OF
    BEGINNING and containing 648.05 acres of land, more or less.

    LESS AND EXCEPT 40.00 ACRES, described as follows:

    BEGINNING at a point which bears S 52°35'23" E, a dislance of 1,871.58 feet, from the
    Vaquillas Ranch A-7 No. 249 Well;

    THENCE, N 89°32'20" E, a distance ofl,320.00 FEET, to a point for the Northeast
    corner hereof;

    THENCE, S 00<>27'40" E, a distance 0[1,320.00 FEET, to a point for the Southeast
    comer hereof;

    THENCE, S 89°32'20" W, a distance 0[1,320.00 FEET, to a point for the Southwest
    corner hereof;

    THENCE, N 00°27'40" W, a dislance of 1,320.00 FEET, to the POINT OF
    BEGINNING, containing 40.00 acres of land, more or less.


                            Basis of Bearing: G.P.S., TX. South Zone, NAD-27




                                                  SHEET! OF2
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                      www.howlandcompanies.com
7615 N. Bartlett Avenue : P.O. Box 451128 (78045) ; lan:do, lX 78041 P. 956.722.4411          F.956.722.5414
                  TBPE FJrm Reg15tration No. F-4097 , T8PL5 Firm Registration No. 100464-00


                                                                                                               134
                                                                          EXHIBIT "A-21"
                                                                      CONOCOPHILLIPS COMPANY
                                                           VAQUILlAS RANCH LEASE 199129-001
                                                                    RETAINED TRACT 21
                                                          (VAQUILlAS RANCH A-7 WEll. No. 249)
                                                                      608.05 ACRES
                                                                                     WEBB COUNTY, TEXAS


  SURVEY 36                                                                                                                                         ~,
  C.R. DAVIS
ABSTRACT 2581
              ,
                         I                                                         SURVEY 35
                                                                                    C.C.S.D. &
                                                                                R.G.N.G. R.R. CO.
                                                                                     ABSTRACT 1036
                                                                                                                                                     I
                                                                                                                                                    I   SURVEY 18

                                                                                                                                                     I  C.C.S.D. &
                                                                                                                                                     R.G.N.G. R.N. CO.
                                                                                                                                                    I ABSTRACT 2727
                                                                                                                                                    ,



                                                                                                          SURVEY 259
                                                                                                           C.C.S.D. &                                      SURVEY 264
                                                                                                        R.G.N.G. R.R. CO.                                      G.C. &
                                                                                                         ABSTRACT 1137
                                                                                                                                                           S.F. R.R. CO.
                                                                                                      WEBB COUNTY. TEXAS                                  ABSTRACT 3302




                                                                                                                                                         ,
                                                                                         ~                                ...                            ...
                                                                                         ~~      l£SS .. EXCEI'T
                                                                                                   40.00 H:RES
                                                                                                                          ~8
                                                                                                                          \:;0
                                                                                         ~~                               l!~
                                                                                         z                                .
                                                                                                 S 89'3220 W
                                                                                                    1,320.00'
                                             CONQCOPHILLIPS COMPANY
                                         VAQUJLlAS RANCH LEASE 199129-001
                                              26.622.79 ACRES (CAlLED)
                                               RETNNED 608.05 M;R£ lNf




- - - - - - --{-----------::;S..,""W32;:;::·20;n-·;W,-:_:"<5.3
                                                             W                                      '.;-."':;;:-.-----------t-- ------
                                                                                                                                   0",
                                                                                                                                                        ,,         '" u ....
                                                                                                                                                                   ~:d~~
                                                                               NORTH HALF SURVEY 34
                                                                                                                                                                   >-oAt:t:E-<
                                                                                      C.C.S.D. &
                                                                                  R.G.N.G. R.R. CO.                                                     I,             . u
                                                                                                                                                                   [;'~00l
                                                                                                                                                                   ~ L! 'Eo<
                                                                                        ABSTRACT 2816                                                    ,         :>uZi{f}
                                                                                                                                                                   "'    "Ol
                                                                                                                                                                         ",""
                                                                                                                                                        I,
                GRAPHIC SCALE
                                                                                                                                                         ,

                     I
                         ( 1M
                         Ir>e~
                                 rro )
                                 _ lD01Jf\.
                                                             T                                                                                           I,,
                                                                                                                  LEGEND                                Rnlslon
                                                                                                                                                               ,         Do'.
               HOW~L~~tQ)ENGINEERING AND SURVEYlNG CO.
                                                                                                     0
                                                                                                    -¢-
                                                                                                              " HORIZONTAl WHl
                                                                                                                SUAr... CC l.OC.I.nOH
                                                                                                                Will
                                                                                                                                                               ,        04-12-13
                                                                                                                                                                        05-17-13
             lIIPEFhnIl8gklrollan ...... f..4aI1 ltIPLSFmIlogialldcnNo.IOO4&I-(I()
                   1'I115N._ ...-... UncII>.1X.11IO<1 P.9:!6.172Mll
                                                                                                     ,           UtlIT UHC
                                                                                                                fUlCi:   ~E
                                                                                                                                                               ,
                                                                                                                                                               J        06 06 13
                                                                                                -
                                 www.howlandcompanles.com

WARNING: IlIoS1S Of BEARING: C,PS. T~. South Csntrnl Zeme, NAD.-27.
                                                                                                    ..    -     .n
                                                                                                                SURVEY lINE
                                                                                                                                                                        08 14-13


                                                                                                                                        OAAWN BY:   ALC./LAF.
                                                                                                                                        CHECKED BY: J.S.
                                                                                                                                        JOB No. 22131.2J-1J
                                                                                                                                        SHEET:   2 OF        2




                                                                                                                                                                                   135
HOWLAI~D
   ENGINEERING AND SURVEYING CO.

                                                EXHIBIT"A-22"

                                  FIELD NOTES
                                       FOR
                            CONOCOPHDUWPSCOMPANY
                        V AQUILLAS RANCH LEASE 199129-001
                               RETAlNED TRACT 22
                  (VAQUILLAS RANCH A WELLS No. 14, No. 19, No. 20, &
                            VAQUILLAS RANCH B No. 13)
                                  612.33 ACRES

     A TRACT OF LAND CONTAINlNG 612.33 ACRES, more or less, being out ofthe
     Vaquillas Ranch Lease 199129·001,26,622.79 Acres (Cailed), situated in Survey 275,
     G.C. & S.F. R.R. CO., Abstract 1336, Webb County, Texas, and being more particularly
     described as follows:

     BEGINNING ata point which bears N 46°23'57" W, a distance of936.17 feet, from the
     Vaquillas Ranch A No. 14 Well;

     THENCE, N 89°49'01" E, a distance of5,164.33 FEET, to a point for the Northeast
     comer hereof;

     THENCE, S 00°30'14" E, a distance of5,150.08 FEET, to a point for the Southeast
     comer hereof;

     THENCE, S 89°49'01" W. a distance of5,194.07 FEET, to a point for the Southwest
     comer hereof;

     THENCE, N 00°10'23" W, a distance of 5,150.00 FEET, to the POINT OF
     BEGINNING. containing 612.33 acres of land, more or less.

                             Basis of Bearing: G.P.s., TIC South Zone, NAD·27




                                                   SHEET 1 OF2
                       H;U:l.QWLAND\SURVEYrnG DEPARl'MEN"NobsUOI3\22\ J L24-13\22lll.24-I3.doc




                       www.howlandcompanies.com
 7615 N. Bartlett Avenue i P.O. Box 451128 (78045)         i     Laredo, l'X 78041 P. 956.722.4411     F. 956.722.5414
                   TBPE Firm Registration No. F-4097   J       TBPLS Firm Registration No. 100464-00


                                                                                                                         136
                                                    EXHIBIT "A-22"
                                                 CONOCOPHILLIPS COMPANY
                   VAQUILLAS RANCH LEASE 199129-001 N RETAINED TRACT 22
        (VAQUILLAS RANCH A WEllS No. 14. No. 19. No. 20. &: VAQUILLAS RANCH B No. 13)
                                        612.33 ACRES
                                                        WEBB COUNlY. TEXAS



                                                                                             ..... VAQUJUAS
                                                                                             V    RANCH        •
                                                                                                 E No. 70



                                                              SURVEY 277




       I
                                                         G.C. & S.F. R.R. CO.
                                                            ABSTRACT 1337

                      I                                                                      V
                                                                                              .r·C VAQUILlAS
                                                                                                      RANCH

       i f.pafJft ~                                                                                E No. 82


______ If !,""""""G


                                                                VAQUILLAS
                                                                  RANCH
                                                                 A No. 19




                ~:i                                 CONOCOPHllLlPS COMPANY
                                                 VAQUlllAS RANCH LEASE 199129-001                                  ~
 <o~:g '"        ,                                   26,622.79 ACRES (CALLED)                                      :i
                                                                                                                   i------
 fuON                                                 RETAINED 812..33 ACRE UNIT
 ,..:'1 ..
                                                                                                                   '"
       ..
                ~
 ~"'U                                                                                                              It
 13 ..,.n!      ~
 rt.l0~
                0



                ,.~
                                                          SURVEY 275
                                                      G.C. & S.F. R.R. CO.
                                                                                                                   ~
                                                         ABSTRACT 1336                                             '"
                                                     WEBB COUNTY, TEXAS


                                                                                                                            o
                                                                                                                            u
                                                                                                      -¢-
                                 VAQUILLAS
                                  RANCH
                                 A No. 20
                                                                                          VAQUILLAS
                                                                                           RANCH
                                                                                          8 No. 13
                                                                                                                         Ii~
                                                                                                                        ~ei8
                                                                                                                            '"
                                                                                                                        >-ze-o
                                                                                                                        ~ei~
------                                                S 89"49'01· W ... ~.194.07'
                                                                                                                        "",,,,,,,...
                                                                                                                        """ 0:

                                                                                                                            Q';l
                                                                                                                            rn
                                                                                                                            u
                                                                                                                            u
                                                                            SURVEY 274
                                                                             G.T. BLACK
                                                                        ABSTRACT 2551

             GRAPHIC SCALE


                 (IN m:r)
                          'i                 r
              1 Inch ~ .DODFl.




                                                                                                                                       137
HOWLAND
  ENGINEERING AND SURVEYING CO.

                                                 EXHIBIT" A-23"

                                                  FIELD NOTES
                                                      FOR
                                     CONOCOPmL~COMFANY
                            V AQUllLAS RANCH LEASE 199129-001
                                   RETAlNED TRACT 23
                         (VAQUILLAS RANCH A WELLS No. 27, No. 36,
                                 No. 146, No. 149, & No. 158)
                                       639.04 ACRES

     A TRACT OF LAND CONTAINING 639.04 ACRES, more or less, being out ofthe
     Vaquillas Ranch Lease 199129-001,26,622.79 Acres (Called), situated in Survey 276,
     G.T. Black, Abstract 2552, Webb County. Texas, and being more particularly described
     as follows:

     BEGINNING at a found iron rod on the West right-of-way line of Ranch Road 2895,
     which bears N 52°54'37" W, a distance of 838.32 feet, from the Vaquillas Ranch A No.
     36 Well;

     THENCE, N 89°34'02" E, along as existing fence line, a distance of5,282.71 FEET, to
     a found concrete monument, for the Northeast comer hereof;

     THENCE, S 00°10'23" E, a distance of 5,279.75 FEET, to a point for the Southeast
     corner hereof;

     THENCE, S 89°33'08" W, a distance of 5,260.79 FEET, to a found 2" pipe. for the
     Southwest comer hereofj

     THENCE, N 00024'40" W, a distance of 5,281.06 FEET, to the POINT OF
     BEGINNING. containing 639.04 acres efland, more or less.

                             Basis of Bearing : G.P.S., TX. South Zone, NAD-27




                                                   SHEET 1 OF2
                       H:\HOWLAND\SURVEYING DEPARTMENl\JobsUO \3\22 BI.25-13\22131.ZS·13.doc


                       www.howlandcompanies.com
7615 N. Bartlett Avenue     P.O. Box 45112B (7B045)      J    Laredo, TX 78041 P. 956.722.4411       F.956.722.5414
                  TBPE FIrm Registration No. F--4097 !       TBPL5 Firm Registration No. 100464000


                                                                                                                      138
                                                          CONOCOPHILLIPS COMPANY
                                          VAQUILLAS RANCH LEASE 199129-001 ~ RETAINED TRACT 23
                                                  (VAOUILLAS RANCH A WELLS No. 27. No. 36.
                                                         No. 146. No. 149. ole No. 158)
                                                                 639.04 ACRES

                                ·I                                                                                                                     !
                                     ~
                                  •
                                 .Ii

                                 ·I
                                     ~

                                     I~
                                                                                        SURVEY 1694
                                                                                          F. SPEED
                                                                                       ABSTRACT 2461



                                                                                                                                 Found
                                                                                                                                         I
                                                                                                                                         I       j
.. _--- ~~-.-----'::'':::'::;:;':::'''':'~::::':'''-----+- ---                                                                                              --
    N 52'54'37"
       838.32'                1-+-;;;.;;-.:0- VAQUILLAS
                                                     RANCH
                                                    A No. 36
                                                                                       VAOUILlAS
                                                                                         RANCH
                                                                                                                                                    -¢-
                                                                                       A No. 27                                                  VAQUIUAS
                                 •                                                                                                                RANCH


                                 ·II
                                                                                                                                                 A No. 14


                                                            VAQUILLAS

                                                      -¢- A ~~C~49
                                 ·I                                                                                                      '.,"
                                 ·I                                                         CONOCOPH1LLIPS COMPANY
                                                                                     VAQUllLAS RANCH LEASE 199129-001
                                                                                                                                         ~
                                                                                                                                                       0


          '"
          ~                      ·I        -¢-
                                                  VAQUILtAS
                                                                                              26,622.79 ACRES (CAUEO)
                                                                                               RETAINED 839.04 ACRE UtIT
                                                                                                                                         ...       .
                                                                                                                                                   '" "'''
                                                                                                                                                       U'"
                                                                                                                                                       ..,
                                                                                                                                                   N!i ......
        O~~
                                                   RANCH
                                                                                                                                                   ~.:t;
        '"< ....
        ~OC\J                     ·I              A No. 158
                                                                                      SURVEY 276
                                                                                                                                         j:l
                                                                                                                                         0

                                                                                                                                             ~
                                                                                                                                                   ",.;0'1
                                                                                                                                                   ",,,,!;;
        >-~t;
        ~E~
                          z      ·I                                                   G.T. BLACK
                                                                                    ABSTRACT 2552
                                                                                  WEBB COUNTY. TEXAS                   VAQUILlAS
                                                                                                                                         U>
                                                                                                                                                   en u.!:l
                                                                                                                                                       ci
        en~!:l
           Z
                                  ·I                                                                                     RANCH
                                                                                                                       A No. 146
                                                                                                                         (8HL)    -¢-
          ",..                    ·I
                                   I                                                                VAQUllLAS
                                                                                                                                                       VAQUJLlAS
                                                                                                                                                        RANCH
                                                                                                                                                       A No. 20

                                   I                                                                  RANCH
                                                                                                    A No. 14S0
                                                                                                       (SHL)
                                                                                                               .



 ------ ~+-------:-=~~::-::::--------f-- -- --                                5                    W ... 5.2.60.79'

                                                                                     VAQUILlAS
                                                                              -¢-      RANCH


                                     ·I                                               No. 174


                                                                                                                SURVEY 226
                                I,                                                                               G.T. BLACK
                                                                                                               ABSTRACT 2550
                      GRAPHIC SCALE
 :500            9   ~    ~               1000                  2000
  ,"_-,.wi;;;..,jwwwi                         I                   I
                              ( tI   rn;r )




~ BASIS 0, SEARING: G.P.S. Tx. SDUth Control Zon .. , NAD.-27.
nus PlAT w.y NOT SKlW 1U CRCISSJjCS or PI'El.JNES 011 CAil.£S. HOIIItNIO EllWiElJaNC
NO SUIM'I'IIG co.. INC, ASSIJII£S NO /!ES?OI'ISI!JUfY 1'0 lOCATE PPEI..II£ Of! coa.£ CROSSIH'lS.
~~~~~~~~~CJJ~a:--°!l
~ IICN\JKI ~ NO SUIM'rNl co.. tIC. 2Q1JC




                                                                                                                                                                   139
HO "'~ IfiJ., ffi1),~wr.~1
 . '• •J[.~~~[l):b,Jt
                co.
     ENGINEERING AND SURVEYING

                                                    EXHIBIT"A-24"

                                                      FIELD NOTES
                                                                FOR
                            CONOCOPmLUWSCOMPANY
                         VAQUILLAS RANCH LEASE 199129-001
                                RETAINED TRACT 24
                  (VAQUILLAS RANCH WELLS No. 16, No. 164, No. 174, AND
                  VAQUILLAS RANCH A WELLS No. 111, No. 116, & No. 125)
                                   633.38 ACRES

        A TRACT OF LAND CONTAINING 633.38 ACRES, more or less, being out of the
        Vaquillas Ranch Lease 199129-001,26,622.79 Acres (Called), situated in Survey 228,
        G.T. Black, Abstract 2550, Webb Couoty, Texas, and being more particularly described
        as follows:

        BEGINNING at a found 2" pipe on the West right-of-way line of Ranch Road 2895,
        which bears N 73"18'04" W, a distance of2,034.65 feet, from the Vaquillas Ranch No.
        174 Well;

        THENCE, N 89033'08" E, a distance 0[5,260.79 FEET, to a point for the Northeast
        corner hereof;

        THENCE, S 00°10'58" E, a distance of 5,254.72 FEET, to a point for the Southeast
        corner hereof;

       THENCE, S 89032'59" W, a distance of 5,240.13 FEET, to a point under an existing
       fence on the West right-of-way line of said Ranch Road 2895, for the Southwest comer
       hereof;

        THENCE, N 00°24'29" W, a distance of 5,254.89 FEET, to the POINT OF
        BEGINNING, containing 633.38 acres ofland, more or less.

                                  Basis of Bearing: G.P.S., TIC South Zone, NAD·27


                                                                                                                                  ,.
                                                                                                                                 !;
                                                                                                                                X1.,
                                                                                                                               j;;':
                                                                                                                              ;,ii·~
                                                                                                                              ~:~1
                                                                                                                         h~l
                                                                                                                         /.. .~;
                                                                                                                          "




                                                        SHEET 1 OF2
                             H:\HOWLANDl.SURVEYlNQ DEPARTMEt-rNobsU013\22131.26-13\22131.l6-13.doc




                             www.howlandcompanies.com
   7615 N. Bartlett Avenue       P.O. Box 451128 (78045)    .   laredo, TX 78041 P. 956.722.4411   I   F. 956.722.5414
                    TBPE Firm Registration No. F·4097      ; TBPLS FIrm Registration No. 100464-00


                                                                                                                                       140
                                                     CONOCOPHILLIPS COMPANY
                                      VAQUILLAS RANCH L£ASE 199129-001 N RETAINED TRACT 24
                                       (VAQUILLAS RANCH WEllS No. 16. No. 164. No. 174. AlND
                                       VAQUILLAS RANCH A WELLS No. 111. No. 116. '" No. 125)
                                                           633.36 ACRES


              ej
         o~~
         "'<'"
         ~ClCIJ                                                                  SURVEY 276
                                                                                  G.T. BLACK
          "''''
         ~~(J                                                                   ABSTRACT 2552
         "'O~
         ::>-u>
                                                                                                                                                            VAQUILlAS
                                                                                                                                                        -¢- A RANCH
         rt.l~~                                                                                          VAQUILl.AS                                            No. 20

  ~
______-{!010:-_______...:;N"...
                            :;;.:..
                                                               '" RANCH
                                  :;:·.;;08:.·..:E'-'-N..::=:..:..________-ir - - -
                                                              VA No. 146
                                                                                                                                                                 --

                                                                            VAQUIu.AS
                                                                                RANCH
                                                                             No. 174



                                                                                                                                                       SURVEY 274
                                                                                                                                                       G.T. BLACK
                                                                                        SURVEY 228                                                 ABSTRACT 2551
                                                                                     G.T. BLACK
              o
              (J
                                                                                   ABSTRACT 2550
                                                        VAQUllLAS     _no        WEBB COUNTY, TEXAS

         -~g
         '"
              '".~
                                                          RANCH V
                                                         No. 164

         "'''~
         ~~t
                                                                            CONOCOPHILLIPS COMPANY
                                                                        VAQUJUAS RANCH LEASE 199129-001

         "''''~
                                                                             26,622.79 ACRES (CALLED)
         ::>",u>
                                                                              RETAtiED 8J3.J8 N:R£ UNrr
         "' . ':!
           '"
           U
              rIi                                                                                     VAQUILL.AS
                                                                                                                                -¢-
                                                                                                                                    VAQUIll.AS
                                                                                                                                      RANCH
                                                                                                                                                  ..
              U                  Ii                                                            -¢-      ""'NCH
                                                                                                      A No. 116
                                                                                                                                    A No. 125

                               -~
                               I

                                                                             I"'f VAQUILLAS                                     A     VAQUILLAS
                                                                            V       RANCH                                       V      RANCH
                                                                                  No. 16                                              A No. 111


---                 - - ---rt.l-------:::-:::::::::::-:::--:-:=-------1
                                          s      W ... 15,240.13'


                                                                                                       VAQUILlAS
                                                                                                  -¢-
                           'II -                                                                        RANCH
                                                                                                        No. 10



                           ,I                                          SURVEY 227
                                                          C.C.S.D. & R.G.N.G. RR CO.                                     VAQUILlAS~
                                                                                                                          RANCH

                           i1i
                           ~
                                                                    ABSTRACT 1133                                        No. 12 T




                      GRAPHIC SCALE

    i\O-.____ Uf,
   soo              ?_~ soo

                             ( .HUT)
                                                              T
                         1 1'><>1 ~ l000fl.




                                                                                                        =   HORIZONTAl. WELL
                                                                                                            SURFACE l.OCATlOH
                                                                                                            wru
                                                                                                            UNIT LDlE
                                                                                           -  ,-            m«:£ UNE
                                                                                           -------          T1£S
                                                                                           _   •• _         SURVEY UH[

~ BASIS OF BEARING, G.P.S. Tx. South Zoo", NAD.-27.
llG PLAT I&I.Y toOT S>!OW IoU. CROSSINGS or I'!I'(U;£5 011 CIBlES. I/OWlNID EHGNDlIIG
NID SU~ co~ IHC. ASSIJIoIES NO ~ 10 l.OCATE WatfE 011 coa.E CROSSINGS.
~~~~~~O)~:~ rn:                                                         OWHEIISHP OR
CIJP'rI'IICHT ItOIII\NIO o.'CIH[ERIIIGAlCl ~ O)~ INC. 20IlC




                                                                                                                                                                        141
 , UlI[Li1j'\~\D[5)
HO 'WWA~~~tliJ'''''LlW ~1Lz---'
     ENGINEERING AND SURVEYING CO.


                                                     EXHIBIT "A-25"

                                                      FIELD NOTES
                                                                     FOR
                                     CONOCOPHILLIPS COMPANY
                                VAQUILLAS RANCH LEASE 199129-001
                                        RETAINED TRACT 25
                              (VAQUILLAS RANCH WELLS No. 10, No. 11,
                             No. 12, VAQUILLAS RANCH A No. 80, & No. 99)
                                            640.00 ACRES

        A TRACT OF LAND CONTAlNlNG 640.00 ACRES, more or less, being out of the
        V.quillas Ranch Lease 199129-001,26,622.79 Acres (Called), situated in Survey 227,
        C.C.S.D. & R.G.N.G. R.R. CO., Absttact 1133; and Survey 273, C.C.S.D. & R.G.N.G.
        R.R. C.O., Abstract 1141, Webb County. Texas, and being more particularly described as
        follows:

        BEGlNNlNG at a point which bears N 33'34'02" E, • distance of 1,360.57 feet, from
        the Vaquillas Ranch No. 12 Well;

        THENCE, S 00D26'16" E, a distance of 4,991.78 FEET, to a point for the Southeast
        comer hereof;

        THENCE, S 89°36'57" W. a distance of332.74 FEET, to a point for a deflection left;

        THENCE, S 89°36'41" W, a distance of 5,270.89 FEET, to a point for the Southwest
        comer hereof;

        THENCE, N 00°05'03" W, a distance of 4,985.84 FEET, to a point for the Northwest
        corner hereof;

        THENCE, N 89'32'59" E, a distance of 5,572.87 FEET. to the POINT OF
        BEGINNING and containing 640.00 acres afland. more or less.


                                  Basis of Bearing: G.P.S., TX. South Zone, NAD·27




                                                         SHEET 1 OF2
                             H;\HOWLAND\sURVEYJNG DEPARTMENT\JobsUO 13\22131.27-13\22131.27-13.1101:



                             www.howlandcompanies.com
    7615 N. SartiettAvenue    :   P.O. 80)(451128 (78045)       ,    Laredo, TX78041 P. 956.722.4411    J   F.956.n2.5414
                     TBPE Finn Registration No. F-4097      :       TBPLS Finn Registration No. 100464-00


                                                                                                                            142
                                                                                  IBIT "A-25"
                                                        CONOCOPHILLiPS COMPANY
                                        VAQUILLAS RANCH LEASE 199129-001 ~ RETAINED TRACT 25
                                             (VAQUILLAS RANCH WELLS No. 10. No. 11. No. 12.
                                                  VAQUILLAS RANCH A No. 80. & No. 99)
                                                              640.00 ACRES


      a
      C)                                                                                                                        -¢-
      Pi                                                                                                                            VAQUllLAS
                                                                                                        VAQUILLAS                 RANCH
 .-\~~                                                        SURVEY 226                      foe RANCH                         A No. 125
 .0     .   ~                                                  G.T. BLACK                     V A No. 116
 <D,,~
                                                             ABSTRACT 2550
 ~:Z;t;
 ~~O'i
g;"'E-o
 en"~                                                                                                                           n     VAOUILlAS I     SURVEY 274
      "oj
      C)
                                                                         ,...... VAQUILtAS
                                                                         V      RANCH
                                                                                                                                V       RANCH •
                                                                                                                                      A No. 111
                                                                                                                                                       G.T. BLACK
                                                                                                                                                     ABSTRACT 2551
                                                                                No. 16
      ti
                                                                   H



                                                                                                        VAQUILlAS
                            "                                                                      -¢-    RANCH


      .0
                            I
                            "
                                                                                                          No. 10


 "'",.0
  ffi~~                     I                                    CONQCOPHILLIPS COMPANY                                   No. 12


                            ii
  ~
                                                              VAQUlllAS RANCH LEASE 199129-001
 .. ~t;                                                           26,622.79 ACRES (CAlLED)
  ~",O'i                                                           RET~ED &40.00 N:1£ UNIT
  g; . b;                   "1
                            I",
 en"'"
            '"    J,., Iol! " ~
                                                                                                    VAQUILtAS
                                                                                                  -¢-   RANCH
                                                                                                        No. 11



                  ~:g       i"                                           -¢-
                                                                                                 SURVEY 227
                                                                                        C.C.S.D. & R.G.N.G. R.R. CO.
                                                                                               ABSTRACT 1133
                  !3
                            I
                                                                    YAQUILlAS              WEBB COUNTY. TEXAS
                  z                                                     RANCH
                                                 VAQutLlAS             A No, 99
                                       -¢-        RANCH
                                                 A No. 80
                            I
                            I
                            "
                            I
------                                                             5 89'36'41· W ... :5,270,.89'
                                                                                                                                                                   w
                            "                     VAQUILLAS

                            I
                            "
                                                -¢- RANCH
                                                   No. 18              -¢-
                                                                          VAQUILLAS
                                                                            RANCH
                                                                           No. 15
                                                                            (8HL)
                            I
                            "                                            OVA~~~                                     VAQUILLAS

                            I
                            "
                                                                               No. 15
                                                                                (SHL)
                                                                                                              ~ RANCH
                                                                                                                    A No. 2J1
                                                                                                                                                I
                                                                                                                                                     SURVEY 967
                                                                                                                                                    J. POITEVENT
                            I                                                                 SURVEY 966
                                                                                                                                                I   ABSTRACT 2061
                   GRAPHIC SCALE
                 ~~~
                                                                                              J.H. FULLER
 py.;;----
500


                             ( IN ro:r )
                                           :
                                        iO'X!
                                                              T                              ABSTRACT 2593

                        I   In</! _   looon




                                                                                                                 UNIT UHt
                                                                                              -,-                n:/tCE; UNE
                                                                                              -------            nrs
                                                                                              -     •• -         S\lR'V£Y UHE
~ BASIS OF BE'ARlNG: G.P.s. Tx. South Zone. NAO.-27.




                                                                                                                                                                       143
HOWi~~~[x)
   ENGINEERING AND SURVEYING CO.


                                                EXHIBIT"A-26"

                                    FIELD NOTES
                                         FOR
                            CONOCOPHILLIPS COMPANY
                         VAQUllLAS RANCH LEASE 199129-001
                                RETAiNED TRACT 26
               (VAQUllLAS RANCH WELLS No. 15, No. 18, No. 154, No. 177,
                 No. 182, AND VAQillLLAS RANCH A No. 175, & No. 231)
                                    635.36 ACRES

      A TRACT OF LAND CONTAINING 635.36 ACRES, more or less, being out of the
      Vaquillas Ranch Lease 199129-001,26,622.79 Acres (Called), situated in Survey 988,
      J.H. Fuller, Abstract 2593, Webb County. Texas, and being more particularly described
      as follows:

      BEGlNNING at a point which bears N 59'15'10" W, a distance of907.68 feet, from the
      Vaquillas Ranch No. 18 Well;

      THENCE, N 89°36'41" E, a distance of 5,270.89 FEET. to a point for the Northeast
      comer hereof;

      THENCE, S 00'06'58" E, a distance of 5,240.20 FEET, to a point for the Southeast
      comer hereof;

      THENCE, S 89°23'40" W. a distance of5,272.32 FEET, to a point for the Southwest
      comer hereof;

      THENCE, N 00'06'07" W, a distance of 5,260.16 FEET, to the POINT OF
      BEGINNING, containing 635.36 acres of land, more or less.

                             Basis of Bearing: G.P.S., TX. South Zone, NAD-27




                                                  SHEET 1 OF2
                        H:\HOWLAND\sURVEYING DEP ARTMENl\JobstlO 13\22131 28-13\221lI.2g..13.doc



                       www.howlandcompanies.com
 7615 N. Bartlett Avenue ; P.O. Box 451128 (78045) : Laredo, TX 78041 P. 956.722.4411          F.956.722.5414
                   TSPE FIrm Registration No. F-4097 ; TBPL5 FIrm RegistratIon No. 100464-00


                                                                                                                144
                                                                                   EXHIBIT "A-26"
                                                                                 CONOCOPHILLIPS COMPANY
                                             VAQUILlAS RANCH LEASE 199129-001 N RETAINED TRACT 26
                                             (VAQUILlAS RANCH WELLS No. 15. No. 18. No. 154. No. 177.
                                                No. 182. AND VAQUILlAS RANCH A No. 175. ole No. 231)
                                                                   635.36 ACRES
                                                                                            WEBB COUNlY, TEXAS

                                        ~
                                                                                                                                                                          !,
                          J!
                          ~             "
                                                                VAOUILlAS
                                                                  RANCH
                                                                                                  -¢-
                                                                                            VAOUILI.,AS
                                                                                              RANCH
                                                                                            A No. 99
                                                                                                                                                                          I
                              ~ tI
                                                                A No. 80


                                                                                                SURVEY 227
                                                                                       C.C.S.D. & R.G.N.G. R.R.                        co.
                                                                                              ABSTRACT 1133
                                         I              N 59"15'10· W                                                                                                                                       ___



I-- - - -                               i /                     07.61,1.'
                                                                                           N 1S9"J8'41· E - S,270.e9'
                      - -:::..j.,:/-I-....----....::....:::=:....:....:.;.;:::::::::..------:7""'"1"'" - - -
                                                                                                                                                                                         ... ---,,---
                                                                                                                                                                                         ..
                                                                                                                                                                                                            --
                                       1"'( to                                                                                                      _,-'
                                       rtI---::~VAaUJLlAS
                                        ><.

                                        ><
                                                  779                 RANCH

                                                                      No. 18
                                                                                             -¢-VAQUlllAS
                                                                                              .       RANCH
                                                                                                      No. 15
                                                                                                       (BHL)
                                                                                                                                   __ '1---"



                                        "I                                                        OVA~~~S                                      VAQUJllAS
                                                                                                                                          -¢-RANCH A
                                        i                                                               No. 15
                                                                                                        (SHL)
                                                                                                                       SURVEY 986
                                                                                                                                               No. 231




                                        "                                                                              J.H. FUILER
                                                                                                                  ABSTRACT 2593

                                         I                                                                      WEBB COUNTY. TEXAS


                                         I                                  _'~NO'
                                                                                                  A
                                                                                                      VAQUILlAS
                                                                                                        RANCH                                       .~.
                                                                                                                                                           VAQUILlAS
                                                                                                                                                           RANCH A
                                        "

                                            _,,-"
                                                  __ "                                                     182

                                                                                                          "1----
                                                                                                                 '1---- ;.\
                                                                                                                          ../\                      V      No. 175




                              z
                                                                                CONOCOPH1LLIPS COMPANY
                                                                            VAQUILLAS RANCH LEASE 199129-001
                                                                                 26,622.79 ACRES (CALLED)
                                                                                                                                  "
                                                                                                                                   \                                          ..
                                                        ,..,
                                                               VAQUILlAS
                                                                RANCH
                                                                                 REl'AliED 835.3e ACRE UNIT
                                                                                                                                   "\
                                                        V No. 154
                                                                                                                                     "\
                                I
                                  ><

                                                                                             V
                                                                                              ,. ,   VAOUllLAS'\
                                                                                                      RANCH
                                                                                                      No. 177
                                                                                                                                           \



_____ )U"
       -,
         f-------:=~~:_:::_
                  5 89"23'40"' W ... .5,272.32.'
                                                 .........                                                                                     \---r-                                          ~~




                                                                                                                                                                           ,,
                                                                                                                                                                           I,                       ",co
                                                                                                                                                                            ,                 0'-''''
                                                                                                                                                                                              coo",

                                                                                                                                                                                               :~:"
                                                                                                                    SURVEY 229
                                                                                                        C.C.S.D. & R.G.N.G. R.R. CO.
                                                                                                                                                                           I,,                [;'
                                                                                                                                                                                              '::>" • en~
                                                                                                                  ABSTRACT 1132
                       GRAPIDC SCALE

                                                                             T                                                                                                                 en~':'l
                          I
                              { IN f'!:rT
                              ""'~
                                              l
                                       _ lOOCn.
                                                                                                                                                                           I,
                                                                                                                                       l.£CENO                             Rlvblon
                                                                                                                                                                                     ,               Dol.

                     HOWlANtldENGINEERING AND SURVEYING CO.
                   llIPEFmRoglon _ _ ~l TlII'LSFm~ND.'1XM64-O:J
                                                                                                                    o
                                                                                                                    -¢-
                                                                                                                                 .. IIORIZONTAl. WELL
                                                                                                                                   SURFACt LOCATION
                                                                                                                                   wru
                                                                                                                                   UNIT UNt
                                                                                                                                                                                                    0"-11-13


                                                                                                                                   FENCE UN£:
                        7815N._II_ t.ot.lo.TX.7IIO'1 P.Il:ie.T.l2.Mll
                                     w...w.howlandcompanles.com                                                                    .'"
                                                                                                                                   SURV£Y UN!
 WARNING: BASIS OF" BEAAlNG: G.P.s. Tx. South Central Zone. NAD.-27.
 1}G   PUJ lIAr NOT SHOW JU alOSStfCS Of' PIPElJNE5 00 c.oaJ:li. HO\II'lHiO ENCl1NCERING                        FIElD DATE        BOOK           PAGE,      DRAWN BY:    L.A.!=".
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                                                                                 0IiINERS>IP Of!                   "               "              "'        CHECKED BY: J.S.
                                                                                                                                                            JOB No. 22131.28-13
 COI"I'RICHT ItCIWI»Il ENCII£EI!fiG AND Sl.Rt'E'I'I/<C co., t«:. 2013C
                                                                                                                                                            SHEET:     2 OF      2




                                                                                                                                                                                                                  145
HOWLL~~\~~~
   ENGINEERING AND SURVEYING CO.

                                              EXHIBIT "A-27"

                                  FIELD NOTES
                                       FOR
                            CONOCOPmLLWSCOMPANY
                        V AQUILLAS RANCH LEASE 199129-001
                               RETAINED TRACT 27
                   (VAQUILLAS RANCH A-12 WELLS No. 168 & No. 202)
                                  614.74 ACRES

     A TRACT OF LAND CONTAlNlNG 614.74 ACRES, more or less, being out ofthe
     Vaquillas Ranch Lease 199129-001,26,622.79 Acres (Called), situated in Survey 987, 1.
     Poitevent, Abstract 2061, Webb County, Texas, and being more particularly described as
     follows:

     BEGlNNlNG at a point which bears N \3°58'44" E, a distance of 1,605.58 feet, from
     the Vaquillas A-12 Ranch No. 168 Well;

     THENCE, S 00°30'00" E. a distance of 5,218.37 FEET, to a found 8" fence comer POst.
     for the Southeast comer hereof;

     THENCE, S 89~2'22" W, a distance of5,138.40 FEET, to a point for the Southwest
     corner hereof;

     THENCE, N 00·06'58" W, • distance of 5,240.20 FEET, to a point for the Northwest
     comer hereof;

     THENCE, N 89°36'57" E, a distance of 5,103.29 FEET, to the POINT OF
     BEGINNING, containing 614.74 acres afland, more or less.

                           Basis of Bearing: G.P.S., TIC South Zone, NAD-27




                                               SHEET 1 OF2
                      H:\HOWLANDISURVEYING DEP ARTMENl'Jobs\20 13U2131.29-13U2 131.29-13.doc



                      www.howlandcompanies.com
 7615 N. Bartlett Avenue     P.O. 80)1451128 (78045) i Laredo, lX78041 P. 956.722.4411 I F.956.722.5414
                   TBPE Firm RegIstration No. F-4097 i TBP15 Firm Registration No. 100464-00


                                                                                                          146
                                                                                EXHIBIT "A-27"
                                                                            CONOCOPHILLIPS COMPANY
                                              VAQUlllAS RANCH LEASE 199129-001 ~ RETAINED TRACT 27
                                                 (VAQUlllAS RANCH A-12 WELLS No. 168 '" No. 202)
                                                                   614.74 ACRES
                                                                                       WEBB COUNTY, TEXAS




                                                                   SURVEY 273
                                                     C.C.S.D. & RG.N.G. R.R. CO.                                          /

    SURVEY 227                         I                          ABSTRACT 1141

                                                                                                    ,.--f
                                                                                                                      •

I~'C.';.~.
         & R.G.N.G .•
      R.R. CO.
   ABSTRACT 1133
                                                        ...____'
                                                                       ___ '1.--'1.--r          x
                                                                                                                                                                               VAQUILlAS
                                        .--'$.---'"
                                ~.103.29·
    --- -,-~'::::':"-----:':"=:::"""'::"~=~---r'?'
                             \
                                                                           N 89"Msr E                   ...                                                                     RANCH
                                                                                                                                                                            A-4 No. 173

                                                    ~/
                                             .1 J~                                                  x

                              \              ~I :ltd
                                                !:!,--                                                                                           VAQUIL1.AS..:1

                                                                                                    \                                              RANCH
                                                                                                                                               A-12 No. 168~
                                                                                                                                                   (BHL)
                                                                                                                                                               I ;e:1

                                                                                                                                                               I :
   SURVEY 9BB
    J.H. FUlJ.ER
  ABSTRACT 2593
                                                                                                    \         x
                                                                                                                                                                '"
                                                                                                                                                                I,

                                                                                                                                                   VAOUlllAS0-401•
                                                                                                                                                    RANCH                      -¢-
                                                                      SURVEY 9B7     \                                                          A-12 No. 168                    VAQUILlAS



                                 l                                   J. POITEVENT     Xi                                                              (SHL)                          RANCH
                                                                    ABSTRACT 2061                                                                                             A-4 No. 121
                                                                  WEBB COUNTY, TEXAS
                VAQUJUAS          l                                                                               x
          .n.    RANCH           :I:
          VA No. 175·
                                                                                                                  I                    A    VAOUIUAS


                                 i                                             CONOGOPH1LLlPS COMPANY
                                                                           VAQUILLAS RANCH LEASE 199129-001
                                                                                                                  x

                                                                                                                  I
                                                                                                                                       ~-     RANCH
                                                                                                                                           A-12 No. 202




                                                                                26,622.79 ACRES (CALLED)
                                                                                 RErAIN£D 814.74 ACRE utIT

                                                                                                                  I
                                                                                                                  x

                                                                                                                  I                                                                  oj

                                                                                                                                                                             VAQUllLAS
                                                                                                                                                                                          -¢-
                                                                                                                  I                                                           RANCH
                                                                                                                                                                             C No. 64



                                                                                  5 89"22'22"' W -                        15.138.40"                                    Found 8"
                                                                                                                                                                        Fanca Post



                                                                                    SURVEY 230
                                                                                 W.R. A1J.DREDGE
                                                                                 ABSTRACT 2523




                         GRAPHIC SCALE
   :lOO          0     2SO     SOO            1000

    "'.-.«w...J--i               ( tll'!FI )
                             1   In<~   ~   .DOOR.




                                                                                                                                       UNIT UNE
                                                                                                                      -,-              fI"HCEUl'IE
                                                                                                                      -------          TIts
                                                                                                                      -       .... -   SURVEY UHE
  ~ BIoSIS                or     BEARlIiG: G.P.S. lx. South Central Zone. NAD.-27.
  Tlf:S PI.» W.T NJT S>IOIII' ALl. CIIOSSIIc:s Of' P'PEI.Jt6 OR   CAel.[S. tlOWlAIID £NCIN(£~




                                                                                                                                                                                                147
HOWLA~JD
   ENGINEERING AND SURVEYING CO.

                                                EXHIBIT "A-28"

                                                  FIELD NOTES
                                                      FOR
                                     CONOCOPHIL~SCOMPANY
                   V AQUILLAS RANCH LEASE 199129-001
                           RETAlNED TRACT 28
       (VAQUlLLAS RANCH A-6 WELLS No. 41, No. 57, No. 229, VAQUlLLAS
          RANCH H No. 28, No. 109, VAQUlLLAS RANCH H No. 224 A &
                      V AQUILLAS RANCH H No. 46 C)
                                640.00 ACRES

     A TRACT OF LAND CONTA1NING 640.00 ACRES, more or less, being out of the
     Vaquillas Ranch Lease 199129-001,26,622.79 Acres (Called), situated in Survey 31,
     C.C.S.D. R.G.N.G. R.R. CO., Abstract 1043; and Survey 26, R.O. Barnesley, Abstract
     2133, Webb County, Texas, and being more particularly described as follows:

     BEG1NN1NG at a point which bears N 58°26'33" W, a distance of 1,644.66 feet, from
     the Vaquillas Ranch A-6 No. 41 Well;

     THENCE, N 89"29'46" E, a distance 0[5,358.90 FEET, to a point for the Northeast
     corner hereof;

     THENCE, S OO~9'0S" E, a distance of2,525.78 FEET, to a point for a deflection left;

     THENCE, S 01°28'37" E, a distance of2,670.53 FEET, to a point for the Southeast
     comer hereof;

     THENCE, S 89°32'59" W, a distance of 5,399.74 FEET, to a point for the Southwest
     comer hereof:

     THENCE, N 00°32'40" W, a distance of5,190.85 FEET, to the P01NT OF
     BEGINNING and containing 640.00 acres of land, more or less.

                             Basis of Bearing: G.P.S., TX. South Zone, NAD·27




                                                   SHEET 1 OF2
                        H:\HOWLAND\SURVEYING DEPARTMENNobs\2013\22131.31-13\22\lJ.31.13.doc

                       www.howlandcompanies.com
 7615 N. Bartlett Avenue : P.O. Bo)(451128 (78045)       laredo, TX78041 P. 956.722.4411       F.956.722.5414
                   TBPE Arm RegIstration No. 1'-4097   TBPL5 Firm Registration No. 100464-00


                                                                                                                148
                                                                           EXHIBIT "A-28"
                                                                       CONOCOPHILLIPS COMPANY
                         VAQUIUAS RANCH LEASE 199129-001 ~ RETAINED TRACT 26
              (VAQUIUAS RANCH A-6 WEllS No. 41, No. 57, No. 229, VAQUIUAS RANCH H No. 26,
                  No. 109, VAQUIUAS RANCH H No. 224 A 8< VAQUIUAS RANCH H No •.46 C)
                                                                                      640.00 ACRES
                                                                                      WEBB COUI'nY. TEXAS
                                                                                                                                                                       ,
                                                                                                                                                                      (
                                                                                                                                                                     Aj



          VAQUJlLAS
             RANCH
           B No. 13
                                                                                   SURVEY 31
                                                                          C.C.S.D. & R.G.N.G. R.R. CO.
                                                                                 ABSTRACT 1043
                                                                                WEBB COUNTY. TEXAS
                                                                                                                                                                 A
                                                                                                    CONOCOPHIWPS COMPANY


                                                                                                                                                        ~,
                                                                                                VAQUIUAS RANCH LEASE 199129-001
                                                                                                    26.622.79 ACRES (CAlLED)
                                                                                                     RETAttED &40.00 Jaf£ UNIT

                                                                                                  VAQUJUAS
                                                                                                   RANCH
                                                                                             A-6 No. 229
                                                                                                                                                        '"
                                                                                            _¢_ (SHL)                                 VAQUILLAS
                                                                                                                                        RANCH

                           ~~                                                                                .0     VAQUllLAS
                                                                                                                     RANCH
                                                                                                                                  -¢- A-6   No. 57



                            ,                                                                                     A-6 No. 229
                                                                                                                     (SHL)
                           ~

                           ~ r-------------------------~-----

                           ~z                                                                                VAQUILLAS
                                                                VAQUIUAS                                         RANCH
                                                                   RANCH                               -¢- H     No. 109
                                                         -¢-H No. 46 C

      SURVEY 274
      G.T. BLACK
   ABSTRACT 2551
                                                                                             SURVEY 26
                                                                                          R.O. BARNESLEY
                                                        VAQUILLAS
                                                                                          ABSTRACT 2133
                                                           RANCH
                                                  -¢-H No. 224 A
                                                                                                                    VAQUIUAS
                                                                                                                                                                          -¢-
                                                                                                                         RANCH                                   VAQUILLAS
                                                                                                                                                                  RANCH
t- ______ ~-------__;:_:::::::;:~::__:_:::::-¢-~H:_N-O-._28_ _ _ _ _~                                                                                         A-6 No. 83

                                                                                      5 89"32'59- W ... S,399.74'
                                                        VAOUILLAS
                                                           RANCH
                                                  -¢-   H No. 96




                    CRAPtnC SCALE                                                                              VAQUILLAS
  ~   0           ~:IOG              1;                                                VAQUllLAS                 RANCH

   ~.----                  ( IN FEEr ) ,                                        -¢- H
                                                                                         RANCH
                                                                                         No. 225
                                                                                                           -¢-H No. 115

                        I Inch _ l000n




                   HOWLANDENGINEERING AND SURVEYING CO.
                 TaPE FmI fto\IIoO'IoIlon Mo.I'-4O!I7 1WU All> ~ No:>. 1!X1018of..m
                       71115N. _ _ I.M.:Io. TX.71004' P._722-'4l1
                                www.howIondcompanies..com
                                                                                                                     SURVEY UN[
 WARNING: BASIS OF 8(AR1NG: G.P,s. lx. South Zon ... NAD.-27.
 TICS PlAT w.y NOT ~ ALI. CROSSINt$ Of P\PEa£S OR coa.E5. 1i0WlNf0 ~                                flELD DATE                         DRAWN BY; LA''/S.I.I.I.
 AIIO SUIMYfIG CO~ IHC:. ~ NO R£:SI>ONSIBUIY TO LOCUt PF£UI( OR C>aL CRCISSIHGS.
 ~1I~~~~~d:x:o~~.ElW. m:                                                          OIMRSIIP OR          "                               OiECKED BY: J.5.
                                                                                                                                       JOB NC). 221J1.J1 13
 COP'rI!IGHT IfC7IIIlNIO ~ANO SlIIM:'I'\NC CO~ toIC.. 2013C
                                                                                                                                       SHEET:   2 0. 2




                                                                                                                                                                                149
HOWL1i\~;~~
   ENGINEERING AND SURVEYING CO.

                                                EXHIBIT "A-29"

                                                  FIELD NOTES
                                                      FOR
                                     CONOCOPIDLL~SCOMPANY
                     V AQUILLAS RANCH LEASE 199129-001
                            RETAINED TRACT 29
            (VAQUILLAS RANCH H WELLS No. 96, No. 115, No. 162, No. 226,
                 VAQUILLAS RANCH D No. 117, No. 153, No. 223 &
                          VAQUILLAS RANCH No. 17)
                               618.16 ACRES

     A TRACT OF LAND CONTAlNING 618.16 ACRES, more or less, being out ofthe
     Vaquillas Ranch Lease 199129-001,26,622.79 Acres (Called), situated in Survey 26,
     R.O. Bamesley, Abstract 2133; aod Survey 273, C.C.S.D. & R.G.N.G. R.R. C.O.,
     Abstract 1141, Webb County, Texas, and being more particularly described as follows:

      BEGINNING at Ii point which bears N 33'41'33" E, a distance of 1,796.29 feet, from
      the Vaquillas Ranch H No. 162 Well;

     THENCE, S 01'28'37" E, a distaoce of2,576.14 FEET, to a point for the Southeast
     comer hereof;

     TllENCE, S 89'10'24" W, a distaoce of 10,341.47 FEET, to a point for the Southwest
     comer hereof;

     TllENCE, N 00'26'16" W, a distaoce of2,643.65 FEET, to a point for the Northwest
     comer hereof;

     THENCE, N 89'32'59" E, a distaoce of 10,294.50 FEET, to the POINT OF
     BEGINNING and containing 618.16 acres of land, more or less.

                             Basis of Bearing: G.P.S., TIC South Zone, NAD-27




                                                  SllEET 1 OF2
                       H;\HOWLAND\SURVEYING DEPARTMEN"Nobs\20 I 3\22 13\.32-t)\22131.32-13.doc



                       www.howlandcompanies.com
 7615 N. Bartlett Avenue i P.O. Box 451128 (78045) I laredo, 1)(78041 P. 956.722.4411          F.956.722.5414
                   TaPE FIrm Registration No. F-4097 I TBPLS FIrm Registration No. 100464-00


                                                                                                                150
                                                                                                                                                                                                                                                                151
                                                           SURVEY 274
                                                            G.T. BLACK
                                                          ABSTRACT 2551
                                                                                                                                   VAQUIl.l..AS                                                 ~
                                                                                                                                     RANCH                                                            POIH1' 01'
                                                                                                                            ,..o..H No. 224-A                                                        BEGINNING
~~'                                                                                                                         V                                                  ~
                                                                                                                                                                              VAQUILLM               __


                              ------_ .... _--_ .... --
V      RANCH       I                                                                                                                                                     A    H No. 28
     A No. { "                                                                     .... _ _ .... _    .. ..        N 8g'32,'S- E .... 10,294lSO'                         V                                                   ,
       ....                                                                                                                                                                                          II              I
                                                                                                                                                                                                                         /

                                                                                                                                                                                                              '1~
                                                                                                                                                                                                                                 I;;~In
                                                                                                                                VAQUILlAS                           SURVEY 26                        I         I.W
                                                                                                                                                                                                     i
                                                                                                                                                                                                            ~t'<r
                                   VAQUlllAS                                                                                       RANCH                         R 0 BARNESLEY

                        ~ -r>0 RANCH                                                                                        A    H No, 96                        ABSTRACT 2133                  ;""1
                                                                                                                                                                                                           ~~Oj                                   e,;
                               No. 117                                                                                      V                                  WEBB COUNTY, TEXAS               !:
                                                                                                                                                                                                                                           -'Z U,..'"...
                                                                                                                                                                                                               'I'"
                        ooj                                                                                                                                                                          ,,>                            "      ",to          0
                        <Ii
                        C'l                                CONOCOPHILLIPS COMPANY                                                                                                                    I: / '                                       0:: 0 . . .
                                                                                                                                                                                                                                           j!;:
       -¢-                                             VAQUILLAS RANCH LEASE 199129-001                                                                                                               1/                                   !>.:d        .0
    VAQUILLAS           ~                                   26,622.79 ACRES (CALLED)                                                                                                                 '" ___'"~___                  1:;     ~ .o:;~
     RANCH              10
                                   VAQUIUAS _r'-!._
                                     RANCH V
                                                            RETAINED 018.10 ACRE   oorr                                                                                   VAOUILlAS              V                                  icI    ~~~~
    No. 12 T                                                                                                                                                                 RANCH             VAOUILtAS                            t'oI
                                                                                                                                                                                                                                                  '-i ';j
                        i
                                   o No. 223                                                                                                             VAQUILtAS


                        z
                                                                    VAQU1UAS
                                                                  RANCH No. 17
                                                                      (SHL)
                                                                          o
                                                                                                                                                   -¢-
                                                                                                                                                           RANCH
                                                                                                                                                         H No. 226
                                                                                                                                                                     ,..J..,: H No. 115
                                                                                                                                                                     V
                                                                                                                                                                                                 RANCH
                                                                                                                                                                                               H No. 162
                                                                                                                                                                                                                                    .
                                                                                                                                                                                                                                    :;
                                                                                                                                                                                                                                                  U




       ~
     t--~
              "~
     ~~O"'"
       "",..
     E"oj~
     !5~~Ul                                                    SURVEY 273
     tIl~     ~                                       C.C.S.D. & R.G.N.G. R.R. CO.
       t.i                                                   ABSTRACT 1141


                       GRAPHlC SCALE                                 j
                           \ IN .ITT )
                        1 ''''~ .. 1000 Fl
                                                               ,.-1

                   HOWLAND                                                                            EXHIBIT "A-29"
                                                                                                     CONOCOPHILLIPS COMPANY
                                                                              VAQUILLAS RANCH LEASE 199129-001 - RETAINED TRACT 29                                   --,--
                                                                                (VAQUILLAS RANCH H WEUS No. 96, No. 115, No. 162,                                    -   .... _     • SU!IVtY UIIE
                                                                              No. 226, VAQUILLAS RANCH D No. 117, No. 153, No. 223 &
                                                                                              VAQUILLAS RANCH No. 17)
                                                                                                    618.16 ACRES
                                                                                                              WEBB COUNTY. TEXAS
HOWLL~~~j[ID
  ENGINEERING AND SURVEYING CO.

                                                EXHIBIT "A-30"

                                                 FIELD NOTES
                                                     FOR
                                    CONOCOPIDLL~SCOMPANY
                      VAQUILLAS RANCH LEASE 199129-001
                             RETAlNED TRACT 30
               (VAQUILLAS RANCH A.{i WELLS No. 30, No. 83, & No. 228)
                                323.87 ACRES

     A TRACT OF LAND CONTAINING 323.87 ACRES, more or less, being out of the
     Vaquillas Ranch Lease 199129-001,26,622.79 Acres (Called), situated in Survey 51,
     C.C.S.D. & R.G.N.G. R.R. CO., Abstract 1045, Webb County, Texas, and being more
     particularly described as fonows:

     BEGINNING at a point which bears S 60°45'43" W, a distance of 996.74 feet, from the
     Vaquillas Ranch A-6 No. 83 Well;

     THENCE, N 01~8'38" W. a distance of2,622.92 FEET. to a point for the Northwest
     comer hereof;

     THENCE, N 89°15'20" E, a distance of 5,375.43 FEET, to a point for the Northeast
     comer hereof;

     THENCE, S 00°51 '59" E, a distance of2,640.06 FEET. to a point for the Southeast
     comer hereof;

     THENCE, S 89°26'29" W, a distance of5,347.54 FEET, to the POINT OF
     BEGINNING, containing 323.87 acres of land. more or less.

                            Basis of Bearing: G.P.S., TIC South Zone, NAD-27




                                                  SHEET 10F2
                       H:\HOWLAND\SURVEYING DEPARThlENTUobs\2013\22J31.33-13\2213 I .3l-13.doc



                       www.howlandcompanies.com
 7615 N. Bartlett Avenue : P.O. 80)(451128 (78045) ; laredo, TX 78041 P. 956.722.4411          F.956.722.5414
                   TBPE Firm Registration No. F-4097 i TBPL5 Finn Registration No. 100464-00


                                                                                                                152
                                                                               EXHIBIT "A-30"
                                                         CONOCOPHILLIPS COMPANY
                                         VAQUILLAS RANCH LEASE 199129-001 ~ RETAINED TRACT 30
                                          (VAQUILLAS RANCH A-6 WELLS No. 30. No. 83, '" No. 228)
                                                              323.87 ACRES
                                                                                      WEBB COUNTY, TEXAS



              8
              '"
              Ii~
                                                                                                                                      \-----l
           ~ci~
           >oZe-.
           ~ci"
           g;,"~
           ",,,,,,,
              o~
              .,;
              t.i                                                                      SURVEY 260
              t.i
                                                                                    ERNEST C. GASSER
           VAQUILlAS
             RANCH                                                                    ABSTRACT 2607
 -¢- A-6
                                                                                                                                      ,,
                No. 57




_____ -+_ _ _                                                                   N 89"15'20· E ...      ~.J1!5.43·
                                                                             ....::..::~:...:...=::::.:=-              __           --L-.-----
                                                                                                                                      I
                                                                                                            VAQUILlAS
                                                     CONOCDPHllLlPS COMPANY                                  RANCH
                                                 vAourlLAS RANCH LEASE 199129-001                      -¢-A-6   No. 30
                                                      26,622.79 ACRES (CALLED)
                                                       REfAINED 323.87 ACRE UtIT



                                                                                                                    VAQUILlAS
                                                                                                                     RANCH
                                                                                                           -¢-A-6     No. 228




                                   :\.~.
                                   I~
                                   ,
                                   ,                                                SURVEY 51
                                                                           C.C.S.D. & R.G.N.G. R.R. CO.
                                                                                  ABSTRACT 1045
         r'-!_ VAOUlLlAS                                                      WEBB COUNTY. TEXAS
         ¥      RANCH
            H No. 162




  _____ +--------------------------+---'---1
                        GRAPlUC SCALE
                0     2511   SOD         100(1                                                          SURVEY 24
                                                                   'j
 !)O(I

   &-.-:;;;;J-I                            .                                                          R.O. BARNESLEY
                                                                                                      ABSTRACT 2134




                                                                                                                      UMIJ UHE

                                                                                                                      """ "'"
                                                                                                                      nES
                                                                                                                      SURV£'r UHE
~ BASIS D. BEAArNG: G.P.s. Tx. South Central 20nll, NAD.-27.
ll1IS P\JIT IoIo',T HOT $»OW ,ou CROSSJ'II:S Of' PIPElJI/Ell OR C\a£S. IIOOI'IHfO   ~
}JjI) !iUI'o£TI'IC co.. ~ ASSIAI£S HO /lE5PIJIiSI9UT'1' TO L.OCA.TE Pf'U.II,E OR CIa..[ CIIOSSINCS.
HO CUIII 15 HDtElI'I' w.oc ~ C\R!£NT OR JCfUlL Sl.WJa/W([!IA(. fU ~ OR
1lSSOR. 1'1115 OIIAIYI'IG IW)( I'JIa.U5fYD.Y fOR !II.AJNCTCW IIES(UIClS 00K co. LP.
~ HOWI.AICl DICIl€tRN: NtO Sl.IIM"'I'Il'!G CO., N;:. 20130




                                                                                                                                                 153
 ..,a'WWj
HO    •• :~.i.        J
                       ~-~    q
     ENGINEERING AND SURVEYING CD.
                                  ,/YA~ ~rl~~~i':!
                                   ·-~El \J~.'

                                                    EXHIBIT "A-31"

                                  FlELDNOTES
                                       FOR
                            CONOCOPHILLIPS COMPANY
                         VAQUILLAS RANCH LEASE 199129-001
                               RETAINED TRACT 31
                 (VAQUILLAS RANCH A-4 WELLS No. 150, No. 167 & No. 227)
                                  567.81 ACRES

       A TRACf OF LAND CONTAINING 567.81 ACRES, more or less, being out ofthe
       Vaquillas Ranch Lease 199129-001,26,622.79 Acres (Called), situated in Survey 25,
       C.C.S.D. & R.G.N.G. R.R. CO., Abstract 1042; and Survey 273, C.C.S.D. & R.G.N.O.
       R.R. CO., Abstract 1141, Webb County, Texas, and being more particularly described as
       follows:

       BEGINNING at a point which bears N 34°45'22" E, a distance of820.70 feet, from the
       Vaquillas Ranch A-4 No. ISO Well;

       THENCE, S 01°11 '23" E, • distance of2,428.19 FEET, to a point for the Southeast
       comer hereof;

       THENCE, S 89°36'57" W, a distance ofl0,373.11 FEET, to a point for the Southwest
       corner hereof;

       THENCE, N 00"26'16" W, a distance 0[2,348.13 FEET, to a point for the Northwest
       comer hereof;

       THENCE, N 89°10'24" E, a distance of 10,341.47 FEET, to the POINT OF
       BEGINNING and containing 567.81 acres of land, more or less.

                                  Basis of Bearing: G.P.S., TX. South Zone, NAD-27




                                                      SHEET 1 OF2
                             H:UIO\VL.AND\SURVEYING DEPARTMENNob.s\20 13\22131.34-13\22\3 L34-1J.doc


                             www.howlandcompanies.com
   7615 N. Bartlett Avenue : P.O. Box 451128 (7S045) . laredo, TX7B041 P. 956.722.4411           F.956.722.5414
                     TBPE Firm RegistratIon No. F-4097 i TBPLS Firm Registration No. 10Q464.00
                                                                                                                  >.~i?::·'f" :'
                                                                                                                  ":g ..

                                                                                                                                   154
                                                                                                                                                                                                                                                                         155
                                                                                                                                     SURVEY 26
                                                                                                                                                                                                      VAQUILlAS                                    r.:i       LO
                                                                                                                                                                                                        RANCH                                      Z          "
                                                                                                                                  R.O. BARNESLEY                                                      H No. 152
                                                                                                                                                                                                                                                 LO~O"""
                                                                                                                                                                                                                                                 -  '   0

                                                   SURVEY 273
                                                                                                                                  ABSTRACT 2133
                                                                                                                                                                                        VAQUILlAS      -¢-                                       >-Cr:UE-<

                                          C.C.S.D. & R.G.N.G. R.R. CO.                                                                                              VAQUILLAS             RANCH                                                  ~oOl,,~
                                                                                                                                                                                                                                                 ~~~~
                                                                                                                                                                                                        ~
                                                                                                                                                                                                              ~
                                                                                                                                                                     RANCH           -¢-H No. 115
                                                 ABSTRACT 1141                                                                                               -¢-   H No. 226
                                                                                                                                                                                                                                                   ~ ~
                                                                                                                                                                                                         iiIODININO )
                                                                                                                                                                                                              ~
                                                                                                                                                                                                                                                   oj

                                                                                                        N 89"10'24- E ... 10.341.47"                                         SURVEY/UNIT UNE
                                                                                                                                                        VAQUIllAS                                                                      /          .... -            ..
                                                                                                                                                          RANCH                                                        I           I           N J4'45'22" E
     d                                                                                                                                                 A-4 No. 167                VAQU1LLAS                        1;;1        I                  620.70'
     u
                         ;.,                                                                                                                              (9HL)     _A
                                                                                                                                                                    V
                                                                                                                                                                                    RANCH
                                                                                                                                                                                 A-4 No. 227
                                                                                                                                                                                                                   ",I
                                                                                                                                                                                                                      1/
                                                                                                                                                                                                                           /
                                                                                                                                                                                                                                           •
     ~ (")
'" "'" I            ;    ~                     CONOCOPHllUPS COMPANY                                                                                                    o                -¢-           VAQUILlAS    ~o\!Il:                 ~
gg ci;:::
                         ~
                          t
                                          YAQU!LlAS RANCH LfASE 199129-001
                                              26,622.79 ACRES (CALLED)
                                                                                                                                                                   VAQUILLAS
                                                                                                                                                                 RANCH
                                                                                                                                                                                                         RANCH
                                                                                                                                                                                                      A-4 No. 150
                                                                                                                                                                                                                                            ~
                                                                                                                                                                                                                                            N
     Z E-<          I                            RErolJNED 561.81                 N:;fiE   UNIT                                                               A-4 No. 167
~~U                      ~                                                                                                                                                                                                                 ...
                                                                                  .                                                                              (SHL)
~"'~

                   + .____'- .
                         ~~....J
                                                                                    /

",oOl~
     <=i            ,Ii                                     ----I'
                                                                                                                                                                                     SURVEY 25
                                                                                                                                                                            C.C.S.D. & R.G.N.G. R.R. CO.
                                                                                                                                                                                                                                           e
                                                                                                                                                                                                                                           1_
     Cf.I                Z                  'I.. _ _ 'f..      \                                                                                                                  ABSTRACT 1042                                            0

     l.i
     u                         _,                                                                                                                                               WEBB COUNTY. TEXAS                                         U>             >< ....
                                                                                                                                                                                                                                                   ~!j~
~~~                     ---~--------------------~'~\----S-U-~--I-U-N-"--U-NE---------------'~~S~~~3.~'=07=·~W~H~1~~-3-73-.-"~·----------------------------------------~                                                                                   .
                                                                                                                                                                                                                                                   '"~~'''"
COn:~
~ ~ C\l
                                                                   ..                                                                          -¢-                                                                                                 "'""'~~..
                                                                                                                         II A_4rv.::O~HI73
                                                                   \                                                     I   •             VAQUILLAS                                                                                                        .",

>- :> t;                                            SURVEY 987                                       VAQUILLAS
                                                                                                                                                                                                                                                          ~\;!
~ .. ;s                                           J. POITEVENT                                         RANCH
~'"I':                                                                                              A-12 No. 16B-¢-      "
CIJ ..,;    !a.,
                                                 ABSTRACT 2061
                                                                        ><\                             (BHL)            'I.(C.J.  SURVEY 232
                                                                                                                                      BERGSTROM
                                                                                                                                  ABSTRACT 2148                         VAQUllLAS                            GRAPHIC SCALE

                                                                          ><
                                                                                                     VAQUILlAS
                                                                                                      RANCH
                                                                                                   A-12 No. 168
                                                                                                                  0      I
                                                                                                                         I I         -¢-
                                                                                                                                           VAQUllLAS
                                                                                                                                             RANCH
                                                                                                                                                                          RANCH
                                                                                                                                                                   -r>-A-4 No. 151                  ksJ,;;J..J'·r      ( IN IUT l
                                                                                                                                                                                                                                                                    T
                                                                              \                        (SHL)             • I            A-4 No. 121                                                                , .... h _ l000f\.



                                                                                                                 EXHIBIT "A-31 "
                                                                                                          CONOCOPHILLIPS COMPANY
                                                                                             VAQUIUAS RANCH LEASE 199129-001 N RETAINED TRACT 31
                                                                                            (VAQUIUAS RANCH A-4 WELlS No. 150. No. 167 & No. 227)
                                                                                                                567.81 ACRES
                                                                                                                      WEBB COUNT'!', TEXAS
HO·.     au.       riW'l
         'W1rjhLi~~S~~~
                             If§}. a\~~l
    ENGINEERING AND SURVEYING CO.


                                                EXHIBIT "A-32"

                                                  FIELD NOTES
                                                      FOR
                                     CONOCOPmLL~SCOMPANY
                   VAQUILLAS RANCH LEASE 199129-001
                          RETAINED TRACf 32
        (VAQUILLAS RANCH C WELLS No. 84, No. 103, No. 160, & No. 246 S1")
                             460.44 ACRES

       A TRACT OF LAND CONTAlNlNG 460.44 ACRES, more or less, being out ofthe
       V.quillas Ranch Lease 199129·00 I, 26,622.79 Acres (Called), situated in Survey 232,
       C.J. Bergstrom, Abstract 2148. Webb County. Texas, and being more particularly
      described as follows:

      BEGINNlNG at a point which bears S 25'59'31" W, a distance of2,521.75 feet, from
      the Vaquillas Ranch C No. 84 Well;

      THENCE, N 00°08'17" W, a distance of 1,437.56 FEET, to a point for a deflection left;

      THENCE, N 00'30'00" W, a distance of5,218.37 FEET, to a point for the Northwest
      comer hereof;

      THENCE, N 89°36'.57" E, a distance of 131.54 FEET, to a point for the northernmost
      Northeast corner hereof;

      THENCE, S OO~8'50" E, a distance of2,901.83 FEET, to a point for an interior comer
      hereof;

      THENCE, N 89°56'18" E. a distance of 5,133.27 FEET, to a point for the southernmost
      Northeast comer hereof;

      THENCE, S 00'43'00" E, a distance of3,709.15 FEET, to a point for the Southeast
      comer hereof;

      THENCE, S 89'26'29" W, a distance of 5,286.78 FEET, to the POINT OF                                       ,
      BEGINNING, containing 460.44 acres of land, more or less.                                                ,~



                             Basis of Bearing: G.P.S., TX. South Zone, NAD-27




                                                   SHEET 1 OF2
                        H:\HOWLAND\sURVEYING DEP ARTMEN1\Jobs\20 13U2131.J5-1l\2213 U5-13.doe


                        www.howlandcompanies.com
  7615 N. Bartlett Avenue ; P.O. Bo)l;451U8 (78045) j laredo,1X78041 P. 956.722.4411          F.956.722.5414
                    TBPE FIrm RegistratIon No. M097 ; TBPLS FIrm RegistratIon No. 100464-00


                                                                                                                    156
                                                                                           EXHIBIT "A-32"
                                                       CONOCOPHILLIPS COMPANY
                                        VAQUILLAS RANCH LEASE 199129-001 ~ RETAINED TRACT 32
                                   (VAQUILLAS RANCH C WELLS No. 84. No. 103. No. 160. '" No. 246 sr)
                                                             460.44 ACRES
                                                                                                 WEBB COUt((Y, TEXAS


         SURVEY 273                    1
 C.C.S.D. &: R.G.N.G. I _N 8V.:se'S7" E
       R.R. CO.       '/    131.54'
                                                                                                                                                                  1                      .'
                                                                                                                                                                  •
,...------
    ABSTRACT 1141
                                                                                                                                                                  •
                                                                                                                                                                                        c',l




                                                                                                                                                                              ~ ....
                                                                             -¢-                                                                                  1
                                                                     VAOUILLAS                         SURVEY 25                                                  •
                                                                     RANCH
                                                                  A-4 No. 173
                                                                                              C.C.S.D. & R.G.N.G. R.R. CO.                                        •
   VAQUILlAS                                                                                         ABSTRACT 1042
     RANCH
A-12 No. 168¥
                       "'.                                                                                                                                        1
         (BHL)                                                                                                                                                     •
                                         ...                                                            VAQUILlAS
                                                                                                                                                                   •
                                                                                                       RANCH                                                                              ~~~
                                                                                                                                                                  1
                                        I                                                                                                                                                """0>
    VAOUIUASO                                                                                    -¢-A-4 No. 151
                                                            -¢-
    RANCH
 A-12 No. 168                                               VAQUILlAS
                                                                                                                             VAQUlUAS
                                                                                                                              RANCH
                                                                                                                                                                   •
                                                                                                                                                                   •                       '"
                                                                                                                                                                                         "Z'"
                                                                                                                                                                                         "'eii"
          (SHL)                                            RANCH                                                        A-4 No. 247
                                                                                                                        o                                                                ~",Ol
                                         on             A-4 No. 121                                                        (SHl)
                                                                                                                                                                   1                     "m ·m...
                                                                                                                             VAQUILLAS                             •                            ~!:l
                                                                                                                                 RANCH                             •
                                                                                                                        ..l..A-4 No. 247
                                                                                                                        V        (BHl)
                                                                                                                                                                              ------
                              z                                                         .n_ VAQUlllAS             SURVEY 232
                                                                                        V       RANCH
                                                                                              C No. 160         C.J. BERGSTROM
   SURVEY 987                                                                                                   ABSTRACT 2148
  J. POITEVENT                                                                                                WEBB COUNTY. TEXAS
 ABSTRACT 2061

                                       ____ !.!!1~ ___ A                       VARAOUN'llAS
                                                                                                      CONOCQPH1LLIPS COMPANY
                                                                                                  VAQU1LL.AS RANCH LEASE 199129-001
                                                                                                                                                                       '"
                                                                                                                                                                       ~
                                                                                                                                                                       ._
                                                                                                                                                                                       VAQUILlAS,.¢
                                                                                                                                                                                     RANCH
                                                                                                                                                                                   B-t No. 23
                                                                        ,tr'          CH                 26,622.79 ACRES (CAllED)                                      I'S'          ci
                                                                     ;.,/,        C No. 84                RErAiNED 4eO.44 N:;R£ UNIT                                    l
                                                                                                                                                                                   C')~ ; :
                                                                 ~i                                                                                                    ...         ~t?o-

t- - - -              ---                             "*'   I
                                                                u~ :1

                                                                         1
                                                                               "S
                                                                               _

                                       >=f=li'==.''t=l=l=l=l=l-l=l-l=-'-,-'-,- ~
                                                                                                               VAQUIUAS                            ~ VAQUIUAS
                                                                                                                                                           0
                                                                                                                                                                                   ~ ... .,
                                                                                                                                                                                       '"Ut;
                                                                                                                                                                                   !5ci:~
                        ~
                                                   • /
                                                 .':;1
                                                                         I",
                                                                         1~
                                                                                                                RANCH
                                                                                                               CNo.10Jn
                                                                                                                                                   RANCH
                                                                                                                                                 CNo.246srU)                       rod            ~
                                                                                                                             V
                        'J..'iD
                        ..... aq
                                               ~'
                                                 '" I

                                               "',
                                                                         I <-l"
                                                                         I
                                                                         I
                                                                                                                                       VAQUILlAS
                                                                                                                                        RANCH
                                                                                                                                      CNo.246ST
                                                                                                                                                   (SHL)
                                                                                                                                                                                       "-¢-
                        "86                '?                             :                                                                (BHL)                                   VAQUILLAS
                        ~,..:
                        Z,'
                              /              :I                                                                                                                                        RANCH
                                                                                                                                                                                  A-10 No. 81


  SURVEY 230                       / _ _ _ _Li
                                   ~                                              _ _-:;-=:::::::::-:-:-:-:::::-::::;--------r - - -                                                               ---
W.R. AlLDREDGE
ABSTRACT 2523                     il
                                   I


                                                     POINTol\
                                                                                              S 89"2S'29- W ,.. 5.288.7S'



                                  ·1             ~
                                  I:                                                                    SURVEY 231
                                                                                               C.C.S.D. & R.G.N.G. R.R. CO.
                               11                                                                     ABSTRACT 1116

                               i:
                        GRAPHIC SCALE

   :-.-.*'L;;;;I--J
  :.00            0   2.ro:soa
                                                 :
                                               1000

                                                                                  T                                                                                 •
                             1 wh _ looon

                                                                                                                                     LECEND
                                                                                                                                                                   i   Rnlslon                   Oat.
                                                                                                                    o
                       HOWLAND ENGINEERING AND SURVEYING CO.
                      llIPE_Rog1o_tc.~WI                        T'1IPUlnm~_'(J)16+.CO
                                                                                                                                 = HORIZOHTAI.   wru.                         I                !H-09-1J



                             7 & " N , _ A _ lMwdo,.lX.nool P.II5e.722.«ll
                                       www.howlandccmpanles.com
 WARNING: BoOSlS OF BEARING: G.P.S. lx. South ~ntrol Zone. NAD. 27.
 lllIS PVoT IlAV HOT St!O'II' ,IU Cf'!OS!';NCS or PFEl..JNES 01 coaLS. HCNI\J:HD DQ,£ERN:                       Flao OA.TE        8   ,          PAGE"   DRAWN BY: UF.
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 ~ti:s~~~~~~~~=r:xJ.tttlP~                                                                               QI         "              "'             "      CHECK£O BY: J.S.
                                                                                                                                                         JOB No. 221~'.JS         1~
 COP"I'RC>{T IfO'IIlNIO DIC:fI~ NiO SlJlM."nHC CO~ INC. 2013=
                                                                                                                                                         SHEET:  2 OF 2



                                                                                                                                                                                                          157
HOaQl   'WWJ~~
                             &~~ r~\J; loKi
   ENGINEERING AND SURVEYING CO.
                                          '.   ~:&f;or

                                                 EXHIBIT"A-33"

                                                  FIELD NOTES
                                                      FOR
                                    CONOCOPHIL~SCOMPANY
                    V AQUILLAS RANCH LEASE 199129-001
                            RETAINED TRACT 33
            (VAQUILLAS RANCH WELL A-I0 No. 81, VAQUILLAS RANCH
                         B-1 WELLS No. 23, & No. 120)
                               382.64 ACRES

     A TRACf OF LAND CONTAlNlNG 382.64 ACRES, more or less, being out of the
     Vaquillas Ranch Lease 199129-001,26,622.79 Acres (Called), situated in Survey 233,
     C.C.S.D. & R.G.N.G. R.R. CO., Abstract 1117, Webb County, Texas, and being more
     particularly described as follows:

     BEGINNING at a point which bears N 42°39'42" W, a distance of 1,797.35 feet, from
     the Vaquillas Ranch B-1 No. 23 Well;

      THENCE, N 89°08'54" E, a distance of 4,485.02 FEET. to a point under an existing
      fence linc, for the Northeast comer hereof;

      THENCE, S 00°19'51" E, along an existing fence line, a distance of 3,744.45 FEET, to
      a point for the Southeast comer hereof;

     THENCE, S 89°36'00" W, a distance of4,459.86 FEET, to a point for the Southwest
      comer hereof;

      THENCE, N 00°43'00" W, a distance of3,709.15 FEET, to the POINT OF
      BEGINNING, containing 382.64 acres of land, more or less.

                            Basis of Bearing: G.P.S., TX. South Zone, NAD-27




                                                   SHEET 1 OF2
                       H:\HOWLANDISURVEYING DEPARTMENNobs\1O\3\21\31.36-\3\2113L36-13.doc




                       www_howlandcompanies.com
 7615 N. BartlettAvenue     P.O. Box 451128 (78045) l laredo, TIC 78041 P. 956.722.4411       F.956.722.5414
                  TaPE Arm Registration No. F-4097 ! TBPLS Firm RegistratIon No. lOO464-{lO


                                                                                                               158
                                                                             EXHIBIT "A-33"
                                                                         CONOCOPHILLIPS COMPANY
                                  VAQUlUAS RANCH LfASE 199129-001 ~ RETAINED TRACT 33
                              (VAQUlUAS RANCH A-l0 waL No. 81. VAQUlUAS RANCH 8-1 WELlS
                                                   No. 23. &: No. 120)
                                                      382.64 ACRES
                                                                                        WEBB COUNlY. TEXAS

                                              :
                                              I


                                              I

                                                                                                       SURVEY 24
                                                                                                    R.O. BARNESLEY
                                                                                                    ABSTRACT 2134




      SURVEY 232
    C.J. BERGSTROM
    ABSTRACT 2148
                                                                                            CONOCOPHILLIPS COMPANY
                                                                                        VAQUILlAS RANCH LEASE 199129-001
                                                                                             26.622.79 ACRES (CALlED)
                                                                                             RErAlHED J82.M Iaf£. UNT

                                                                                                                                             J,
                              z
                                                                                                                                             ...
                                                                                                                                             ~         SURVEY 271
~l~~)(...!....-i(_-                                                             SURVEY 233                                                   b     C.C.S.D. & R.G.N.G.
                   VAQUILlAS                                           C.C.S.D. & R.G.N.G. R.R. CO.                                          .,          R.R. CO.
                                                                                                                           VAQUILlAS
             #      RANCH C
                  No. 246 5T
                                                                              ABSTRACT 1117
                                                                          WEBB COUNTY. TEXAS                         -r;f-'
                                                                                                                            RANCH
                                                                                                                             No. 120         '"
                                                                                                                                                     ABSTRACT 1136
    VA~~~            (SHL)
C No. 246 51                                              -¢-
   (BHL)                                           VAQUlllAS
                                                    RANCH
                                                  A-l0 No. 81


-        ---            - - 4-----::-=:::-:::--:-:::-:::::-----1
                                        S 89"3fI'OO· W ........ 4!59.86·
     SURVEY 231                       I
 C.C.S.D. & R.G.N.G.
       RR. CO.
     ABSTRACT 1116
                                      I
                                      I
                                                                                                                                            I
                                                                                              SURVEY 234
                                                                                                                                           1
                                                                                            C.J. BERGSTROM
                                                                                            ABSTRACT 2146

                                                                                                                                            1
 ~
    1-;;-.---- [
                      GRAPHIC SCALE
               9Z70:IOO               Ij
                            ( III n::u)
                         1 ItIdI .. lOOOrt.
                                                                  T                                                                        I1
                                                                                                                       LEGEND                           R.... lslon     Dcle
                                                                                                       o
                    HOWLANDENGINEERING AN) SURVEYING CO.
                  Tll?EAooI~Ha.F-4D!17             TUP\..SFkmRoogllhlotlNl>.ICIO'&4«I
                                                                                                       -¢-
                                                                                                    -~,--
                                                                                                                 = H0RI2ONTAL
                                                                                                                 =
                                                                                                                               WElL
                                                                                                                     ;m:ACE lOCATION

                                                                                                                  : ~a:UKJa:
                                                                                                                                                              ,       04-09-IJ



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                                www.howlandoompanies.oom                                            - - - - - - - = TIES
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WARNING: BASIS OF BOOING: G.P.S. lx. South Centrol ZonD, NAO.-27.
ms   PUll YAY HOT SHall' AU. tmISSHCS OF Pl'£l..l1IES 01'1   CIa.£S. HOWI.N«I   ~                  flElD DATE                    PAGE 5   DRAWN BY:   UF.
                                                                                                      "I'                                 CHECKED BY: J.S.
                                                                                                                                          JOO No. 221:::11.36-13
                                                                                                                                          SHEET:  2 OF 2




                                                                                                                                                                                 159
HOWLAND
  ENGINEERING AND SURVEYING CO.


                                                 EXBlBIT "A-34"

                                                  FIELD NOTES
                                                      FOR
                                      CONOCOPIDL~SCOMPANY
                          V AQUILLAS RANCH LEASE 199129-001
                                 RETAINED TRACT 34
                      (VAQUILLAS RANCH A-8 WELLS No. 59, No. 66, &
                              VAQUILLAS RANCH A No. 86)
                                    606.84 ACRES

     A TRACT OF LAND CONTAINING 606.84 ACRES, more or less, being out of the
     Vaquillas Ranch Lease 199129·001,26,622.79 Acres (Called), situated in Survey 1649,
     C.C.S.D. & R.G.N.G. R.R. CO., Abstract 1110, Webb County, Texas, and being more
     particularly described as follows:

     BEGINNING at a point which bears N 38'23'35" E, a distance of2,217.27 feet, from
     the Vaquillas Ranch A-8 No. 59 Well;

     THENCE, S 00°17'51" W, a distance 0[5,027.60 FEET, to a point for the Southeast
     comer hereof;

     THENCE, S 89°24'12" W, a distance of5,177.16 FEET, to a point for the Southwest
     corner hereof;

     THENCE, N 00°30'01" W, a distance of 5,115.58 FEET, to a point for the Northwest
     corner hereof;

     THENCE, S 89°37'46" E, a distance of 5,247.75 FEET, to the POINT OF
     BEGINNING, containing 606.84 acres ofland, more or less.

                               Basis of Bearing: G.P.S., TX. South Zone, NAD-27




                                                    SHEET 1 OF2
                           H:\HOWLAND\sURVEYING DEPAR1MENl\JobsUO \3\22131.37-13\22131.37-I3.doc


                           www.howlandcompanies.com
 7615 N. Bartlett Avenue  , P.O. Box 451128 (78045) ! laredo, TX78041 P. 956.722.4411        F.956.722.5414
                  TBPE Firm Registration No. F4097 ; TBPLS Firm Registration No. 100464-00


                                                                                                              160
                                                                            EXHIBIT "A-34"
                                                                        CONOCOPHILLIPS COMPANY
                               VAQUILLAS RANCH lEASE 199129-001 N RETAINEO lRACT 34
                      (VAQUILLAS RANCH A-8 WELLS No. 59. No. 65. '" VAQUILLAS RANCH A No. 86)
                                                    606.84 ACRES
                                                                                    WEBB COUNTY, TEXAS


                                                                                                                                                                :
                                                                                                                                                                 I
                                                       SURVEY 1646                                                    SURVEY 1648
                                                                           srrz
                                                                                                                                                                   rpo;;.~
                                                    O.A. '" F.A.                                                      C.M. SAWYER
                                                     ABSTRACT 3301                                                   ABSTRACT 2441
                                                                                                                                                                I: (,~
                                                                                                    ,
                                 r-----------~~~~~~~---l.-------~/~-------
                                                                             S 89"37'46- E          1-   S/l47.75'


                                                                                                                                 I                       4/
                                                                                                                                 "                   ~";I
 SURVEY 1927
  T.M.R.R. CO.                                                                                                                   ,              ,'"'
ABSTRACT 1808
                                                                                                                             ~I                 ~/
                                                                                                                             . .::        ..:?/
                                                                                                                                I     _6.'?/'
                                                                                                                                :
                                                                                                                                I
                                                                                                                                     ~7
                                                                                                                                     ,
                                                                                                                              I '
                                                                                                                              1/
        ~                                                      CONOCOPHILUPS COMPANY                                         ~------" . .----                     h
                                                                                                                                                                   ~
        :a                                                 VAQUILlAS RANCH lEASE 199129-00 I                             VAOUlUAS
                                                                                                                                                                   S
f-------~,                                                     26,622.79 ACRES (CALlED)
                                                                RETAI£D 608.84 ...mE UNT
                                                                                                                          RANCH
                                                                                                                        A-B No. 59                                 .n
                                                                                                                                                                    ,
                             .'"                                                                                                                                   '"
                             i
                             z
                                                                             SURVEY 1649
                                                                     C.C.S.D. '" R.G.N.G. R.R. CO.
                                                                            ABSTRACT 1110
                                                                                                                                     VAQUILlAS
                                                                                                                                       RANCH
                                                                                                                                     A-a No. 66
                                                                                                                                                     rc
                                                                                                                                                     V
                                                                                                                                                                  ~
                                                                                                                                                                  ..~
                                                                        WEBB COUNTY. TEXAS




                                                                                                                      VAQUILLAS
                                                                                                                -¢-    RANCH
                                                                                                                      A No. 86




-.-----~-----------~~~~~--------~~-.--
                ~ 89'24"2- W ... 5.1".18' .. -
                                                                              ,
                                           SURVEY 1906
                                           T.T. R.R. CO.
                                          ABSTRACT 3103

                                                                                                                              SURVEY 1653
                                                                                                                      e,C.S.D. & R.G.N.G. R.R. co.
                                                                                                                             ABSTRACT 1099




                      GRAPHIC SCALE


                               ( IN fEEl" )
                            • IncIo _ loroR.




                                                                                                                                                                            0+-11->'




WARNING: BASIS         or     BfARING: G.P.S. T~. So ... th ZOI'll!, NAD. 27.
nus ptAT WI'!' IiOl SHOll' ALI. CROSSt!GS Of I'\I'EIJhG OR a.a.r:s.. IlCJIII'lNIO ENC1I/I£ERN;
..... 0 SUIM:'I'I'tG co. INC. ~ NO Ii£SPC»!SIEIlIIY ro lOClTE PIPDJNt OR C08IL CIIIlS$HClS.
NO Q).&I IS ItERmT ....c[ I!teN!P!IG OJRRDIT 011 IoCfUI.L SIRlF.ra:tJaNf1tAI. r:EI: 0II't0S>!P OR
                                                                                                        FlEUl DATE
                                                                                                                        .,           PAGE :s      DRAWN SY:
                                                                                                                                                  CHECKED   av:
                                                                                                                                                                  LA.F.
                                                                                                                                                                     J.S.
u=R. nIlS 0IWI'IH(l WNX txQ..l.!SMl.Y RlII CCINOCOP1iU.1P5 COIWNIT.                                                                               JOB No.     221J1.J7-1J
 COPTlIlCHT ~ EHCNDiHD .lHO ~ 1;0., INC. 20130
                                                                                                                                                  SHEET:    2   or      2




                                                                                                                                                                                       161
HOWL.A~~mJ
   ENGINEERING AND SURVEYING CO.


                                                   EXHIBIT"A·35"

                              FIELD NOTES
                                   FOR
                       CONOCOPRU J ,IPS COMPANY
                    VAQUILLAS RANCH LEASE 199129·001
                          RETAINED TRACT 35
          (VAQUILLAS RANCH A·l1 WELLS No. 55, No. 58, No. 79 & No. 147)
                              640.00 ACRES

      A TRACT OF LAND CONTAlNlNG 640.00 ACRES, mare or less, being out of the
      Vaquillas Ranch Lease 199129-001,26,622,79 Acres (Called), situated in Survey 1651,
      C,C.S,D, & R.G,N,G. R.R. CO" Abstract 1112, Webb County, Texas. and being more
      particularly described as follows:

      BEGINNING at a point which bearsN 46°43'15" W, a distance of799.66 feet, from the
      Vaquillas Ranch A·II No. 79 Well;

      THENCE, EAST, a distance of 5,173.18 FEET, to a point for the Northeast corner
      hereof;

      THENCE, S 00°01'12" E, a distance 0[5,422.60 FEET, to a point for the Southeast
      comer hereof;

      THENCE, WEST, a distance 0[5,077.78 FEET, to a point for the Southwest comer
      hereof;

      THENCE, N 01°30'06" W, a distance of3,788.66 FEET. to a point for a deflection
      right;

     THENCE, N 00°04'11" E, a distance of 1,635.25 FEET, to the POINT OF
     BEGINNING and containing 640.00 acres of land, more or less.

                                Basis of Bearing: G,P.S" TJC South Zone, NAD·27




                                                      SHEET 1 OF2
                           H:\HOWLANDISURVEYING DEPARTMENl'Jobs\2013U2131.38-i3\22131.38-13.doc


                           www.howiandcompanies.com
 7615 N. Bartlett Avenue    ,   P.O. 80,,451128 (78045)       i    Laredo, 1)[ 78041 P. 956.722.4411   I F.956.722.5414
                  TBPE FInn Registration No. F-4097       I       TBPLS Finn RegistratIon No. 100464-00


                                                                                                                          162
                                                      EXHI              "A-35"
                                    CONOCOPHILLIPS COMPANY
                     VAQUILLAS RANCH LEASE 199129-001 ~ RETAINEO TRACT 35
                 (VAQUILLAS RANCH A-11 WEU.S No. 55. No. 58. No. 79. '" No. 147)
                                         640.00 ACRES
                                                           WEBB COUNTY, T£XIo.S




  SURVEY 1647
   C.C.S.D. &
R.G.N.G. R.R. CO.
 ABSTRACT 11 01     i
                    I
                                                              SURVEY 1646
                                                               BLAS PENA
                                                             ABSTRACT 2396

   ~                          _ N 46"43'15' W
                               p799.66·
                    f-o-- - - - - - - - - - -EAST
                                              - -... ,&.173.18
                                                       ........---------


                                                                                                                   SURVEY 1664

               .                                                                                                   W.H. TAYLOR
                                                                                                                   ABSTRACT 2877


               ~
                                                                                   A    VAQU!UAS
                                                                                   V     RANCH
                                                                                       A-l' No. 55

 -----~
                                                        CONOCQPHIUIPS COMPANY
                                                    VAQUILlAS RANCH lEASE 199129-001
                                                         26.622.79 ACRES (CALLED)
                                                          RETAINED 540.00 II;fl£ UNTT                 -¢-
                                                                                                   VAQUIUAS
                                                                                                     RANCH
                                                                                               A-11 No. 58

                                                             SURVEY 1651
                                                     C.C.S.D. & R.G.N.G. R.R. CO.
                                                            ABSTRACT 1112
                                                        WEBB COUNTY. TEXAS




                                                                                                              f-------
                                                                                                       -¢-                  .;
                                                                                                                            u
                                                                                                 VAQUILlAS
                                                                                                  RANCH
 SURVEY 1650                                                                                   A-11 No. 147
 C.M. SAWYER
ABSTRACT 2444
                                                             WEST ... ~.CfT1.7e·




                                                                SURVEY 1652




------1    GRAPHIC SCALE
                                                                W.H. TAYLOR
                                                               ABSTRACT 2876                                  ••
                                                                                                              -p-VAaUIUA~
                                                                                                              I     RANCH
                                                                                                              I L No. 196
                                                                                                                            '<




               ( tl /'EO' )
                                                T




                                                                                                                                   163
HOWlt~~~
   ENGINEERING AND SURVEYING CO.


                                               EXHIBIT "A-36"

                                                FIELD NOTES
                                                        FOR
                                    CONOCOPHIL~SCOMPANY
                   V AQUILLAS RANCH LEASE 199129-001
                          RETAINED TRACT 36
        (VAQUILLAS RANCH A-4 WELLS No. 121, No. 151, No. 173 & No. 247)
                             367.60 ACRES

     A TRACT OF LAND CONTA1NING 367.60 ACRES, more or less, being out ofthe
     Vaquillas Ranch Lease 199129·001,26,622.79 Acres (Called), situated in Survey 25,
     C.C.S.D. & R.G.N.G. R.R.CO., Abstract 1042, Webb County, Texas, and being more
     particularly described as follows:

     BEGINNING at a point which bears N 72'18'31" W, a distance of 1,190.94 fee~ from
     the Vaquillas Ranch A-4 No. 173 Well;

     THENCE, N 89036'57" E, a distance 0[5,471.02 FEET. to a point for the Northeast
     comer hereof;

     THENCE, S 01°11'25" E, a distance of2,927.97 FEET, to a point for the Southeast
     comer hereof;

     THENCE, S 89°08'54" W, a distance of374.16 FEET, to a point for a deflection right;

     THENCE, S 89'56'18" W, a distance of 5,133.27 FEET, to a point for the Southwest
     comer hereof;

     THENCE, N 00'28'50" W, a distance of 2,901.83 FEET, to the POINT OF
     BEGINNING and containing 367.60 acres of land, more or less.


                            Basis of Bearing: G.P.S., TX. South Zone, NAD-27




                                                 SHEET 1 OF2
                       H:\HOWLAND\SURVh"YING DEPARTMENI\JobsUOI3122131.39-J3U2J31.39-13.doc


                       www.howlandcompanies.com
 7615 N. BartJettAvenue I P.O. Box 451U8 (78045) ; laredo,1)( 78041 P.956.72Z.4411           F.956.nZ.5414
                  TBPE Arm Registration No. F-4097 I TBPLS Firm Registration No. 100464-00


                                                                                                             164
                                                                                           EXHIBIT "A-36"
                                                                                         CONOCOPHILLIPS COMPANY
                                       VAQUIUAS RANCH LEASE 199129-001 N RETAINED TRACT 36
                                  (VAQUIUAS RANCH A-4 WEUS No. 121. No. 151. No. 173. '" No. 247)
                                                           367.60 ACRES
                                                                                                   WEBB COUNTY, TEXAS


                                                 :                                                 -¢-                                                                                                            i~


                                                                                         -=
                 ou                                                                                      VAOUILLAS                                                                         t



                 '"
             M~:;jl
             ~r.;:::
             ~:Z;t>
                                                 ~----- """:~-::;."" ---:,:=--+ ·i~
                                                 ,,                                     A-4 No 167. n                  A-4 No. 227                          RANCH                          I
             Ct:~~                                                                         (BHL)         ¥                        -¢-                A-4 No. 150-¢-

             ::J.:d~                                                                             VAOU'wP                                                                                   I '.j!j1'
             "' . <
                 "cjoj
                                                 I,                                                RANCH
                                                                                             A-4 No. 167
                                                                                                                                                                                                 1H
                                                 ,                                                 (SHL)

                 cj
                                                 I,                                                              SURVEY 25
                                                                                                        C.C.S.D. & R.G.N.G. R.R. CO.
                                                 ,                                                             ABSTRACT 1042
                                                                                                           WEBB COUNTY. TEXAS
                                                                            N 72'18'3'· W
                                                                           /,,190.94'                                                                                                          I
                                  _


                                     ~~~                 __-,/L-__7i______-!N~8V~3~.~~~7~·~E~-~~~'7~1~.02~·______________________~
                                                                      k!
-         - - -            - -
                                          !,            ---- I
                                                            -"'-_ ... 1:).
                                                     ___ .lJ.~:'_~~ VAQUlUAS
                                                     ---         -y- RANCH
                                                                                       A-4 No. 173                   CONOCOPHILLIPS COMPANY
          VAQUllLAS
          RANCH
       A-12 No. 168A
           (BHL)  ¥
                                          1:1
                                          ;;
                                          ::I
                                           •
                                                                                                                 VAQUILLAS RANCH LEASE 199129-001




                                                                                                             VAQUILLAS
                                                                                                                      26,622.79 ACRES (CAlLED)
                                                                                                                       RETAiNm 357.eo N:iP£ UNIT
                                                                                                                                                                                                   !•
                                                                                                                                                                                                   w
                                                                             VAQUlU.AS

                                          i!"'
          VAQUlllAS        0                                              RANCH
                                                                    -¢-A-4 No. 121
                                                                                                              RANCH
                                                                                                        -¢-A-4 No. 151
            RANCH
                                                                                                                                  VAOUILlAS
      A-12 No. 168
          (SHL)
                                          iii                                                                                       RANCH
                                          ~                                                                                    A-4 No. 247
                                          z                                                                                   o   (SHL)

                                                                     VAQUllLAS
                                                                       RANCH



                                                                                                                                                                           vr
                                                                    A-4 No. 247·
                                                 ~________________~~(B_H~~_-~~.~______________~~____                                                                                                                   _
                                                                                                    S 89'58'18· W ,.. 6.133.27"                                        •
                                                                                                                                                     S 89"08'54- W
       SURVEY 987                                                                            A     VAQUILlAS                                                374.16'
      J. POITEVENT                                                                            Y      RANCH                                                                        I
                                                                                                   C No. 160
    ABSTRACT 2061
                                                                                                                       SURVEY 232
                                                                                                                     C.J. BERGSTROM
                                                                                       VAQUILlAS                     ABSTRACT 2148
                                                                                        RANCH
                                                                                -¢-    C No. 84



                                                                                                                                                                                  ,,
                                                                                                                                            V~~2~                            J
_ ___ __
                                   -t=I                   :==~==~===~==2==~==~==~===*== C No. 246 ~x----x
                                                                               VAOUILlAS  (BHL)     VAQUILlAS
                                                                                                                       RANCH
                                                                                                                     C No     103 .n.
                                                                                                                                  V
                                                                                                                                            VAOUILl.AS
                                                                                                                                                RANCH
                                                                                                                                                        m
                                                                                                                                                         ~I
                                                                                                                                                      C No 246 &
                                                                                                                                                                 RANCH
                                                                                                                                                        No 246 STl
                                                                                                                                                                              I
                                                                                                                                                                                  •
                                                                                                                                                                                  I




                                                                                                                                                                       --1 ~~:~~~:'
                                                                                                                                          C No. 246 STl    (SHL)                                          -¢-

    =~ ~_~_~_~-8~i i =~:"'~R~,~ .!.,i ~ _~ ~ ~·);"~nAL~E~ ~ ~=31 _____________ ~L~                                                                       __



                                                                                                                                                                                                         Dol,
                                                                                                                                        L£GEHO                                 R.v\slon
                                                                                                                                                                                       ,
                          HOWLANDENGINEERING AND SURVEYING CO.
                         1l!I'£~~Ho.F-OOI7 T5PlSAnI~HD.'~                                           •
                                                                                                                      0
                                                                                                                      -¢-
                                                                                                                          ,
                                                                                                                                  " HORlZOKT.l.L wtU.
                                                                                                                                    SURFACE UlCo\TlOH
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                                                                                                                                  .. UHIT UKE
                                                                                                                                                                                                       10-18-13



                                                                                                                                  " FENCE LtlE
                              1.151(._.1......               ~ lX.7lI041
                                      W'MV.howlandcompanles.com
                                                                                 P.~122M'J
                                                                                                                  - -..       - = 11£5

                                                                                                                                                        .
                                                                                                                                  .. SURV[Y UHE
    WARNING: &.SIS OF BEAAlNG: G.P.S. Tlr. South Zone. NAO.-21.
                                                                                                                 FJELD QATE                      ,
    'MS P\.I.T ""'T lICIT SfOJI ALL ~ OF PHlJKES OR CIa..ES. 1!O'II'I.AHtI'~
    AHO SIJIIVI:THP CO. ftC. AS9.IoIES NO FIESPCIHSIIllIT TIl L.OC.'-TE ~ OR CIa..[ CI!OSSNGS.
    ~r!s~~~~~~                                                                               rttC7MIDlSHP OR          "            "'"'
                                                                                                                                    W'               •
                                                                                                                                                              DRAWN BY:
                                                                                                                                                             CHECKED BY:
                                                                                                                                                                             SJ.t.I
                                                                                                                                                                                J.S.
                                                                                                                                                             JOB No.       221.:n.J9 13
    CCIP'r1'IICKl' tfCJWlA,'m DONEIRING   N(J         SUIM."!1NG   co...   N:. 20lJC
                                                                                                                                                              SHEET:       2 or       2




                                                                                                                                                                                                                           165
EXHIBITD



           166
                            PARTIAL RELEASE OF OIL AND GAS LEASE

STATE OF TEXAS                   §
                                 §
COUNTY OF WEBB                   §


           WHEREAS on January 9, 1988, Vaquillas Ranch Company, Ltd., Vaquillas Unproven Mineral Trust and
Vaquillas Proven Mineral Trust acting therein through its general partners, J.O. Walker, Jr., Gene S. Walker,
Evan B. Quiros and E. Walker Quiros. as Lessors, and Canoee Inc.• as Lessee. entered into an Oil. Gas and
Mineral Lease dated November 1, 1987. covering 6,740 acres of land, more or less, hereinafter referred to as
~the   Lease,· and;


           WHEREAS the Lease description was amended May 31, 1988, by deleting the acreage covered from
6,740 acres, more or less, to include a revised total of 4,800 acres, more or less, as evidenced by
Memorandum of Oil and Gas lease, dated June 16, 1988; recorded In Volume 1303, Page 886 of                   the   Real
Property Records of Webb County, Texas.


           WHEREAS the Lease has also been amended from time        to time, as reflected in the Public Records of
Webb County, Texas, and all references to the Lease herein shall be to the Lease as amended.


           NOW THEREFORE, in consideration of Ten Dollars ($10.00) and other good and valuable
consideration, the receipt of which Is hereby acknowledged, ConocoPhlilips Company, does hereby
RELEASE, RELINQUISH and SURRENDER unto the Lessor, all of its right, title and interest and estate in the
Lease SAVE AND EXCEPT THOSE LANDS AS MORE PARTICULARLY DESCRIBED ON THE EXHIBIT
"A," AND FURTHER DESCRIBED ON EXHIBITS A-1 THROUGH A-5 ATTACHED HERETO AND MADE A
PART HEREOF.


Provided, however, Lessee shali have and retain full rights of access and all easements of ingress and egress
over and across those lands covered by the Lease, including the lands which are hereby released, for the
production of oil and gas and operations in the acreage not hereby released, and Lessee shall not be required
to remove or relocate any pipelines, utilities, roads, tank batteries, or other surface equipment or installations
from any portion of the lease or lands herein released for so long as same continues to be used for the
exploration, development or operation of such portions of the Lease that continue in force and effect


This instrument is binding upon and inures to the benefit of the parties hereto, their heirs, successors and
assigns.
                          ~                                         VOIm1e: 35T7 Page:44D-453
Executed this         n       day of f~\o",'Q""
                                                 I
                                                     . 2014.        Doc # 1194181
                                                                    OocType: PARTIAL RB£ASE OF Oil & GAS lEASE
                                                                    Record DIlle: 21251201" 11:28:17 AM Record By: MIC
                                                                    Fees $71.00
                                                                    Margie Ramirez JbamI. Webb County Clerk



                                                 LESSEE:




                                                 ::~OC~
                                                         Michael P. Rose
                                                         Attorney-In-Fact




25757Hl01

                                                                                                                          167
                                       ACKNOWLEDGEMENT


STATE OF TEXAS               §
                             §
COUNTY OF HARRIS             §

        ACKNOWLEDGED BEFORE ME, this          rl '"   day of   1"''''10"•• %                  ' 2014, by
Michael P. Rose, Attorney-in-Fact for ConocoPhiltips Company, a Delaware   orporation, on behalf of said
corporation.




257577-001

                                                                                                           168
             OVERALL EXHIBIT "A"                                                                                                                               !
                                                                                                               :\------,--'-iL
        CONOCOPHILLIPS COMPANY
   VAQUILLAS RANCH RETAINED TRACTS 1-5
                                                                                                               i                          !! I
   CONTAINING A TOTAL OF 2,379.77 ACRES                                                                    j                              ii'
                                                                                                  j--:                   A-,                         'I        I
                                                                                                  "    I                ,,,,.                        ,
                                                                                             /        ~ __ -1-''''''''-,----'-----+-, _j
                                                                                         !------I
                                                                                         ,
                                                                                                                             !I                      !
                                                                                                                                                     I
                                                                                       / , _____ +-__                         i      -----~

                                                                               r   :
                                                                                       ~
                                                                                         I        'rl ~--              A->
                                                                                                                             !
                                                                                                                             ,


                                                                               \---} _____ i I ':;::;
                                                                               L-__ ~ _____ ~---

                                                                                                                             r:[}\C
                                                               ~-----T-----~
                                                                                 r--- ,
                                                                                            I
                                                                                               ~------
                                                                                               :
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                                                                                       ! i--;' ------I:
                                                               I                                                             ,                                      I

                                                               L---r-----l-j---l- __ --L___
                                                                          ,                       :                ,                      -                -j---------t

        i, !!
             --T--T------f
                 ::
                     ~------t-----+---r--,
                                                  :
                                                       ------t-----i--------'
                                                                         i
                                                                        : :
                                                                                                  i                ,-------
                                                                                                                                        ~::T-- :
                                                                                                                                        1------
                                                                                                                                                          t--- - -\                   :
                                                                                                                                                                                      ,
                                                                                                                                                                                      '
        ~--~--+-----l     i    ! L----:=----~--=4                                                                                                                   : -----~
        ,   i                                    :                       :                        ,L-----,------r---~----
        ~--~--                                    ------- oE~                                     ---I                           !                   !                   !
                 L--L ___ Ur~                                                  --A-< --                L------L-----~-----tl ----
                                                                                598.98
                                                                                ~s                                                                                       :
                                                                                                                                                                           L ___ _
                  GRAPlfiC SCALE
300(1        0   1~,3OOD         ~

  ,"---oj;;;;;jo-!                 ,


                                                                                                                   CONOCOPHILLIPS COMPANY
                   HOWLAND
                         ENGINEERINO AND SURVEYING CO.
                 TBPERmRrlglolr__ IIo.F'-OCm   TBPl.5Fm1~lIo.l_
                                                                                                                   n.QUILIAS RANCH RETAINED
                                                                                                                             TRACTS BASE YAP
                      7111SN._ .........   I.anIcIO, TX.nGll
                             www.howtandcompanJas.com
                                                               P.IIM.nz..wll                                                 LEASE 2~7~77-001
                                                                                                                                     WEBB COUNJY, TEXAS
 WARNING: BASIS OF B£.I.RING: C.P.S. T•. South Zon ... NAD. 27.
 ms Pl.lT w:t HOT Stm "'-L CRCSSIHCS Of I'If'£l.I'£S OR eo.au:s. IKJIIII..NlD ~c                                                                          DRAWN BY:     LAF./S.l,M.
 1M) ~ co.. INC. J.SSULS HO ReiPCI'ISIIUlY TO LOCATE PF£I.K (II coa.t CIIOSSlNCS.
                                                                                                                                          IO-II-1J
                                                                                                                                                          CHECKED aY:      J.S.
 ~r::sH~~~~,3'~u.W"~ FE£~                                                                    OR                                                           JOB No.   22160-13
                                                                                                                                                          SHEET:    1 Of     1




                                                                                                                                                                                          169
HOWLAND
   ENGINEERING AND SURVEYING CO.

                                                 EXHIBIT "A-I"

                                           F1ELDNOTES
                                               FOR
                                      CONOCOPmLLWSCOMPANY
                                VAQUILLAS RANCH LEASE 257577-001
                                       RETAINED TRACT I
                               (VAQUILLAS RANCH L-6 WELL No. 211)
                                         328.36 ACRES

     A TRACf OF LAND CONTAINING 328.36 ACRES, more or less, being out of the VaquiUas
     Ranch Lease 257577'{)01, 6,740.00 ActOS (Called), situated in Survey 1956, HE. Brock, AbslIact
     2560, Webb County, Texas, and being more particularly described as follows:

     BEGINNING at a found monument at fence comer, which bears N 70°15'08" W. a distance of
     1,699.67 fee~ from the Vaquillas Ranch L-6 No. 211 Well;

     THENCE, N 89~O'09" E, along an existing fence line, a distance of3,112.47 FEET, to a point
     for the Northeast comer hereof;

     THENCE, S 00°38'14" E, a distance of 4,600.71 FEET. to a point under an existing fence, for
     the Southeast comer hereof;

     THENCE, S 89030'49" W, along an existing fence line, a distance of 1,416.19 FEET, to a point
     for a deflection right;

     THENCE, S 89035'52" W, continuing along said existing fence 1ine, a distance of 1,696.63
     FEET. to a found 60 D nail at fence comer, for the Southwest corner hereof;

     THENCE, N 00°37'59" W, continuing along an existing fence line, a distance of 4,588.56
     FEET, to the POINT OF BEGINNING, containing 328.36 acres of land, more or less.


                               Basis of Bearing: G.P.S., TIC. South Zone, NAD-27




                                                                                                                 ,:
                                                                                                                .'




                                                   SHEET! OF2
                        H:\HOWLAND\SURVEYING DEPARTMENNobs\20IJ\22160.1-1JI22160.I-IJ.doc


                       www.howlandcompanies.com
 7615 N. Bartlett Avenue ; P.O. Box 45112B (78045) : Laredo, TX 78041 P. 956.722.4411         F. 956.722.5414
                   TBPE Firm Registration No. F4097 .- TBPLS Arm Registration No. 100464-00


                                                                                                                      170
                                                                                 EXHIBIT "A-1 "
                                                                         CONOCOPH1LLlPS COMPANY
                                                               VAQUILLAS RANCH LfASE 257577-001
                                                                        RETAINED TRACT 1
                                                              (VAQU1LLAS RANCH L-6 WELL No. 211)
                                                                                       328.36 ACRES
                                                                                      WEBB COUNTY. TEXAS




                                                                                  SURVEY 2096
                                                                                  D.C. FANNING
                                                                                 ABSTRACT 2228

         ,,
  _---'1'-- _ _ _            ___                __         ~.,...,__-!N!.."""~!!:·!!l09!..·~E,.:~~3.!l11~2.""'!...-_ _                          """\r"_________
                                                         -: -----!J.«r                                      t,
                           Found IoIonl.lll'lllllt                                ,-~..'aor.                 1m
                           o Fence Comer                                          '6.9"9.ijjl..Jt
                                                                  ~-----T.59:r-----v VAQUILLAS RANCH
                                                                                                    ---      I
                                                                                                          ......                                                  SURVEY 1955
                                                                                                                                                           G.C. & S.F. R.R.         co.
                                                                                                                         L-6 No. 211                              ABSTRACT 1326


                                                                                  CONOCOPHILLIPS COMPANY
                                                                         VAQUILlAS RANCH LEASE 257577-001
                                                                                    6.740.00 ACRES (CALLED)
                                                                                    RETNNED J28.38 ACRE UNfT



                                                                                                                                                                  VAOUILlAS RANCH
                                                                                                                                                               A-3 No. 200 (BHL)
               SURVEY 1956
               D.C. FANNING                                                                                                                                                       -!b
              ABSTRACT 2591                                 z                            SURVEY 1956                                                                        VAOUlUAS RANCH
                                                                                          H.E. BROCK                                                                       A-3 No. 200 (SHL)
                                                                                        ABSTRACT 2560
                                                                                      WEBB COUNTY. TEXAS




                                                                  r   cfound 60 0
                                                                  ~ .. Ko~ 0 Fencl! ComIIr

~-~.----~" '--~';-~~'--~'~'~~~':-~S~~~30~"~2'.~W~·~"-1=;-~I---'S~.~~~~~"~·~W;--<~-----~---'-------~--~
                                                                                 1.696.63'                  ~                  1,416.19'


                                     SURVEY 2057
                                                                                                             \       :
                                 C.T. & M.C. R.R. CO.
                                     ABSTRACT 965                                                           \I
                                                                                                            1:                                        SURVEY 2056
                                                                                                            "\ I,                                 C.T. & M.C. R.R. CO.
                                                                                                                                                     ABSTRACT 2680

VAQUILlAS RANCH
  A-5 No. 205
       (SHl)O
                                VAQUILlAS RANCH
                             -¢- A-5         No. 205
                                           (BHL)
                                                                           VA~~~-Q.
                                                                        A-S No. 166
                                                                                                             Ii: \
                   GRAPHIC SCALE                                                                                 II
                                                                   T                    O VAQU1UAS "RANCH
                                                                                            A-5 No. 230
                        ( "HErr)
                                                                                                      (SHL~J

                                                                                                                                       LEGEND
                                                                                                                      o        .'"
                  HOWLAND
                        ENGINEERING AND SURVEYING CO.
                                                                                                                     -¢-
                                                                                                                                     HORIZONTAl WELL
                                                                                                                                     ~.f.CE   LOCATION
                                                                                                                                                                              1   04-10-13


                TBPE;FhnRogllt-.~f..Q11
                     761"'._"--..          ~
                                               TlII'I.SIlm~_IOOoI64-CIO
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                                                                                                                         - -   .. SURVEY lINE
 WARNING: BASIS OF a[AAING: GJ>.S. b. SoLlIh Zone. HAD. 27.
 rn:s PlAT I,IoI,T NOr 9I)W N.1. CROSStlc:s OF PftI..IIml OR CAllUS. IIOWI.NIO ~
 .-NO $l.IFN£TtIG co~ tfe. ASSUoIES flO ~ 10 I,DCU'[ I'ftI.JI£ OR CAII..E ~
                                                                                                            FlELD OIITE              000.
                                                                                                                                                 "" ,    ORAWlII BY:   .... LC.
 NO Q)II,I 15 KER£BT WOC ~ CU!IIOa OR H;T\W. SURI'~ f""EE ~ 011
 USSOR. un QR.\II'J'tG WOC aa.usvEl.T FOR ~ COIIPAIfT.
 CIIP"rIIIQIT HC'M..IHD DONEERttC Ne:I ~ CO .. N:. 2CIIJC
                                                                                                                     "               "'          '"      CHECKED BY: J.S.
                                                                                                                                                         ~OB No. 22\60.\-\3
                                                                                                                                                         SHEET:    2 OF      2




                                                                                                                                                                                               171
HO~~~~\ ~'ii,I~I[~®
  'WW~~~~ \1l~~f7
    ENGINEERING AND SURVEYING CO.

                                                       EXHIBIT"A·2"

                                              FIELD NOlES
                                                   FOR
                                         CONOCOPHllWWPSCOMPANY
                                VAQUILLAS RANCH LEASE 257577-001
                                        RETAiNED TRACT 2
                            (VAQUILLAS RANCH L4 WELLS No. 95 & No. 105)
                                           172.43 ACRES

       A TRACT OF LAND CONTAINING 172.43 ACRES, more or less, being out of the Vaquillas
       Ranch Lease 257577-001. 6,740.00 Acres (Called), situated in SE !4 of Survey 2060, C.C.
       Marshall, Abstract 3329, Webb County, Texas, and being more particularly described as follows:

       BEGINNING at a point which bears N 50°34'35" W, a distance of 490.36 feet, from the
       Vaquillas Ranch L-4 No. 95 Well;

       THENCE, N 89°18'10" E. a distance of 1,350.57 FEET, to a point for a deflection right;

       THENCE, S 89°39'06" E, a distance of 1,338.93 FEET, to a point on an existing fence line, for
       the Northeast comer hereof;

       THENCE, S 00°18'08" E, along an existing fence line, a distance of2,765.12 FEET, to a found
       fence comer post, for the Southeast comer hereof;

       THENCE, S 89°15'36" W, along said existing fence line, a distance of2,691.33 FEET, to a
       point for the Southwest comer hereof;

       THENCE, N 00°48'19" W, a distance of 1,517.91 FEET, to a point for a deflection right;

       THENCE, N 00"22'53" E, • distance ofl,273.82 FEET, to the POINT OF BEGINNING,
       containing 172.43 acres of land, more or less.


                                  Basis of Bearing: G.P.S., TX. South Zone, NAD~27




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  7615 N. Bartlett Avenue      P.O. Box 451128 (78045)       !    Laredo, 1)( 78041 P. 956.722.4411      F.956.722.5414
                   TBPE Finn Registration No. F-4097     •       TBPLS Firm Registration No. 100464-00


                                                                                                                          172
                                                                                   EXHIBIT "A-2"
                                                             CONOCOPHILLIPS COMPANY
                                                         VAQUILLAS RANCH LEASE 257577-001
                                                                  RETAINED TRACT 2
                                                  (VAQUILLAS RANCH, L-4 WEllS No. 95 /I< No. 105)
                                                                    172.43 ACRES
                                                                                       WEBS COUNTY, TEXAS


I                                 A VAQUILlAS
                                  ¥  RANCH
                                      A-5 No. 126
                                                                                                                                                        SURVEY 2058
I
·
I
                                                                                                                                                    C.T. & M.C. R.R. CO.
                                                                                                                                                                 A-2880

·
I                                                                                                                                                                                        't




I! .~- .. - .. - .. ~~~~~;-·--··-V"A"Q-U'"~: -~-------+------------1~,;!:-,
U-.
                                               !                       I,.~,I·"·~:-
                                          A-5 No. 118                                 A-5   _~Ol I'                    8_                    1                                     .
          SURVEY 2080                                                                       V                    0         ..
    C,TAa~T~~T R:i~30CO,                                                                                 :       ~::                         i                                    /~i!i
                       VAQUILLAS RANCH
                         A-S No. 40
                                                                             , - - -- - -            --i I
                                                                                                                 ~~~
                                                                                                                 => Od CIl                   lj
                                      o                                      :    SURVEY 2060
                                                                                   R.D. GUINN            I
                                                                                                         I       rn U"",
                                                                                                                       ~
                                                                                                                           ';i!
                                         ~                                   I   ABSTRACT 3331



 I ______                    --~~:h.;:b":.V~~l~ E i ~=: E                                                    s                                                SURVEY 1884
 I                                                   49Cl36'
                                                               tI.I          hBi"
                                                                                 ~i   VAQUILLAS RANCH
                                                                                        L-4 No. 95
                                                                                                                                                              M.E. WIDEMAN
                                                                                                                                                             ABSTRACT 2501

            SURVEY 2060
                                                               i:l i!                 ",     (SHL)

             R.D. GUINN                                        "§ 11Pi                 -¢-VAQUlUAS RANCH
                                                                                            L-4 No. 95
           ABSTRACT 3332                                              ....                           (BHL)
                                                               z
                                                                                      CONOCOPHILLIPS COMPANY                                  ...
                                 r------                                          VAQUILLAS RANCH LEASE 257577-001 8
                                                                                        6,740.00 ACRES (CALLED)    co
                                 I            0     ~          J:                       ""'..NED 112.43 ACRE UN~                              §
                                              tOZM             ••
                                              OZM              at ...
                                              NSf-"            :-~                                        SE 1/4 OF
                                              ~ ill
                                              I> .
                                                  " u          ~:;;
                                                               !l- VAQUIL~ RANCH                        SURVEY 2060
                                                                                                       c. C. MARSHAlL
                                              0:: A E-o        Z                 L-4 No. 105           ABSTRACT 3329
                                              =>~rIl

W--._._._._.l:-=--·'_...!.___                                                                   ;;:WE~IO",:"B,,":~~::-U;;:~:i:'i:·.33;;TrEXA_S-t'--rl-- - - - - - - - - - -
                                                                                            S<R...

                                                                                                                                  =rr~~~            I
                                                                                                                                                    •
                                                           NORTH 1/2 SURVEY 1836
                                                               P.K. CONNOWAY
                                                               ABSTRACT 2187
                                                                                                                                                    I
                                                                                                                                                                  SURVEY 260
                                                                                                                                                           MARY E. WIDEMAN
                                                                                                                                                             ABSTRACT 2504



                     GRAPHIC         SC~                  - - - - - - - - - -S::                                 ~--                  - -        --i
    k-.JJ-; Ii
                           ( IN FlIT )
                                                                 T                                   ~~J:~
                                                                                                     ABSTRACT 2137
                                                                                                                                                    :I
                        I III<:h - 10CXlF\.


                                                                                                                                  LEGEND                               Ravl.lon
                                                                                                                                                                            ,      Do'.
                   HOWlANrE
                          ENGINEERING AND SURVEYING CO.
                  TIIPE flm Ro;Iahb> Ho>.I4C9l' T1IPLS flm~ No.. 1(I041I0I.00
                                                                                                             o         ,. HORIZOKTAl. WELL
                                                                                                                          stJRI'ACt LOC4l1OH
                                                                                                                           "'"-
                                                                                                                           UNIT UHE
                                                                                                                                                                           ,      -" "
                                                                                                                                                                                  "
                                                                                                                                                                                       27-1J

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                               WNW.how1andcompanles.com
                                                                                                                  ..       n",
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                                                                                                                           ,,                ME.        DRAWN BY:     A.LC.

 IISSOR. JIIIS 0AA>n<~ I&UlE: txcwSIVEl.Y fOR ~ COIFNf'f.
                                                                                                                           "'                "'         OlECKED BY:      J.s.
 IXII"I'I'iUtJ HCIIIII..lKI DlCHIIING AND SUM'nIIC CO., He. 2DIJO
                                                                                                                                                        JOB No.
                                                                                                                                                        SHEET:    , OF     ,
                                                                                                                                                                   22160.2-1J




                                                                                                                                                                                               173
  ENGINEERING AND SURVEYING CO.

                                                 EXHIBIT"A-3"

                                                 FIELD NOTES
                                                        FOR
                       CONOCOPHILLIPS COMPANY
                    VAQUILLAS RANCH LEASE 257577-1)01
                           RETAINED TRACT 3
       (VAQUILLAS RANCH L WELLS No. 129, No. 137, No. 171, No. 135 & No. 196)
                              640.00 ACRES

    A TRACT OF LAND CONTAINING 640.00 ACRES, more or less, being out of the Vaquillas
    Ranch Lease 257577-001, 6,740.00 Acres (Called), situated in Survey 1661, C.C.S.D. &
    R.G.N.G. R.R. CO., Abstract 1122; and Survey 1663, C.C.S.D. & R.G.N.G. R.R. CO., Abstract
    1123, Webb County, Texas, and being more particularly described as follows:

    BEGINNING at a point which bears N 52D 37'00" E. a distance of 1,377.16 feet, from the
    VaquiUas RanchL No. 137 Well;

    THENCE, S 00°36'33" W, a distance of 4,858.64 FEET, to a point for a deflection left;

    THENCE, S 00°31'54" W, a distance 0[355.21 FEET, to a point for the Southeast corner
    hereof;

    THENCE, WEST, a distance of 5,314.75 FEET. to a point for the Southwest COmer hereof;

    THENCE, N 00°07'00" W, a distance of 5,213.52 FEET, to a point for the Northwest corner
    hereof;

    THENCE, N 89°59'58" E, a distance 0[5,380.33 FEET, to the POINT OF BEGINNING,
    containing 640.00 acres of land, more or less.


                              Basis of Bearing: G.P.S., TX. South Zone, NAD-27




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                      www.howlandcompanies.com
7615 N. Bartlett Avenue     P.O. Box 45112B (78045) ! Laredo, 1)( 78041 P. 956.722.4411       F.956.722.5414
                  TBPE FIrm Registration No. F-4097 ; TBPL5 FIrm Registration No. 100464-00


                                                                                                               174
                                                                 CONOCOPHILLIPS COMPANY
                                                          VAQUILLAS RANCH LFASE 257577-001
                                                                           RETAINED TRACT 3
                    (VAQUILLAS RANCH L WELLS No. 129, No. 137, No. 171, No. 135 & No. 196)
                                                 640.00 ACRES
                                                                            WEBB            TEXAS


                                                                                                                                      SURVEY 1665
                                                                                                                                       e.C.S.D. &
                                                                                    SURVEY 1664                                     R.G.N.G. R.R. CO.
                                                                                    W.H. TAYLOR                                   • ABSTRACT 1124
                                                                                   ABSTRACT 2877




          -¢-
  VAOUlllAS
   RANCH
A-l1 No. 147

                                                      CONOCOPH1LLlPS COMPANY
                                                 VAQU1LlAS RANCH lEASE 257577-001
                                                      6,740.00 ACRES (CAlLED)
                                                      RETAINED 640.00 ACRE UNIT



                    ~
                    "       VAQUIUAS
                             RANCH
                           L No. 196
                    ~
                                                                   SURVEY 1663
                    $                                      C.C.S.D. & R.G.N.G. R.R. CO.
                    !>                                            ABSTRACT 1123
                    !!                                        WEBB COUNTY. TEXAS
                    z
                                                                                                          VAQUILlAS     -¢-
                                                                                                            RANCH
                                                                                                          L No. 129
                            VAOUILLAS
                              RANCH
                            l No, 171


                                                                                                            VAQUILlAS
                                                                                                              RANCH
                                                                                                            l No. 135
                                -- - - - -                    ---          --- - - -- - -                 -- -$- --
                                                                       WEST ...    ~.314.7!5·




                                                                              SURVEY 1661
                                                                      C.C.S.D. & R.G.N.G. R.R. CO.
                                                                             ABSTRACT 1122


--~
                                      VAQUILlAS
                                       RANCH
                                     L No. 190                                                                                     SURVEY 1668
                                  -¢-                                                                      VAQUIUAS           I    Y. VERGARA
                                                                                                                RANCH         • ABSTRACT 2490
                                                                                                           l No. 136


                         GRAPIDC SCALE
                                                                                                                        -¢-   I
   :.00         0    ~:.oo              'DIXI
    !ow__"""""                            .                   T                                         VAOULLLAS
                                                                                                         RANCH
                           1 net. _ IDOOrt.                                                         -¢- L No.    134




~ BASIS OF BEAAlNG:                c,p.s.       Tx. South Zone, NAD.-27.
ms PU.T WIlY NOT SIIO'II' IU O!OSSHCS OF PI'ElJ/£S OR tAlUS. tK7IIIVHJ ~
N!O !aJ'M;Y'tIO CO•• NC. A$SlJ,I[S HQ ~ TO l..IX:-'lL I'IPELI!£ OR ~ C'!OS$NCS.
I«) aNII IS HtRDI'r loW)[ I!tCOIDIC aRI01T 011 ILT\W. SlW~ FU: ~ OR
l(SSOR.   n.s DfWIIHG IoWlE EXI;1lISMl.y fOIl cottCICOPHUS'S COloiPNfY.
CCIPI'RDIT IIOfI\HIO ~ IHJ SlIM:YIHC 00., tIC. 2Ql~C




                                                                                                                                                        175
  ENGINEERING AND SURVEYING CO.

                                                    EXHIBIT"A-4"

                                          FIELD NOTES
                                              FOR
                                    CONOCOPHllWWPSCOMPANY
                                 VAQUILLAS RANCH LEASE 257577"()01
                                              RETAINED TRACT 4
             (VAQUILLAS RANCH L WELLS No. 134, No. 136, No. 140, & No. 190)
                                 598.98 ACRES

    A TRACT OF LAND CONTAINING 598.98 ACRES, more or less, being out of the Vaquillas
    Ranch Lease 257577-001. 6.740.00 Acres (Called). situated in Survey 1661. C.C.S.D. &
    R.G.N.G. R.R. CO., Abstract 1122, Webb County, Texas, and being more particularly described
    as follows:

    BEGINNING at a point which bears S 69°30'42" W, a distance of 936.29 feet, from the
    Vaquillas Ranch L No. 140 Well;

     THENCE, N 00°00'04" E, a distance of 3,136.05 FEET. to a point for an exterior comer hereof;

    THENCE, EAST, a distance of 611.10 FEET, to a point for an interior comer hereof;

    THENCE, N 00007'00" W. a distance of 1,238.25 FEET, to a point for the Northwest corner
    hereof;

     THENCE, EAST, a distance of 5,314.75 FEET, to a point for the Northeast corner hereof;

    THENCE, S 00°31'54" W. a distance of 4tl53.62 FEET, to a point for the Southeast comer
    hereof;

    THENCE, S 89il31'S4" W, a distance of2,354.96 FEET, to a point for an interior comer hereof;

    THENCE, S OOOZ8'06" E, a distance of597.66 FEET, to a point for the South comer hereof;

    THENCE, N 80025'28" W, a distance of3,582.90 FEET, to the POINT OF BEG1NNING,
    containing 598.98 acres of land, more or less.


                                Basis of Bearing: G.P.S., TX. South Zone, NAD-27




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7615 N. Bartlett Avenue      P.O. Box 451128 (78045)       : Laredo, TX78041 P. 956.722.4411        F.956.722.5414
                 TBPE Arm Registration No. F-4097      :    TBPLS Firm Registration No. 100464-00


                                                                                                                     176
                                                                          EXHIBIT "A-4"
                                                                     CONOCOPHllLiPS COMPANY
                                                  VAQUIUAS RANCH lEASE 257577-001
                                                          RETAINEO TRACT 4
                                    (VAQUIUAS RANCH L WELLS No. 134, No. 136, No. 140, &: No. 190)
                                                            598.98 ACRES
                                                                                 WEBB COUNTY, TEXAS

                               i                                        SURVEY 1663
                                                                                                                                  VAQUIUAS      -Q-
                               i~ VAQUlllAS
                                                                C.C.S.D. & R.G.N.G. R.R.
                                                                       ABSTRACT 1123
                                                                                                                 co.
                                                                                                                                     RANCH
                                                                                                                                  L No. 129



                               itr" RANCH
                                     L No. 171



                               i                                                                                                     VAQUlllAS
                                                                                                                                      RANCH
                                                                                                                                    L No. 135
                               r··_··_··_··_··_··_··_··_··_··_··_··_··_··-.:r-··-··i
                                                                                 EAST    ow     .5.314.75'


                                                                           SURVEY 1661
                                                                   C.C.S.D. 8< R.G.N.G. R.R. CO.
                        z                                                 ABSTRACT 1122
                                                                      WEBB COUNTY. TEXAS
                    fAST
___ _         r·:::'.::'·~10:..'~
                                                                                                                                               VAQurUAS
                                           -¢-VAQUIUAS                                                                                          RANCH
                                                     RANCH                                                                                     L No. 136
                                                    L No. 190                                                                                    -¢-


                                                     CONOCOPHILLIPS COMPANY                                              -¢- VAQUILLAS
                                                 VAQUILlAS RANCH LEASE 257577-001                                               RANCH
                                                      6,740.00 ACRES (CALLED)                                                 L No. 134
                                                       RETAINED 159B.V8 ACRE UNff




          z

                                                                                                                                                              r-"-"-"-"
 --                                                                                                               S 8Sr31 154 W       ow   2,.354.96'



              POIN'f        or'\
              BJlGOOfINCV


                                                          SURVEY 374
                                                             L. AYALA
                                                        ABSTRACT 2125                      I
                                                                                                                                        SURVEY 1660
                                                                                                                                C.C.S.D. & R.G.N.G. R.R. CO.
                                                                                          I                                            ABSTRACT 2229




  ~
                        GRAPHIC SCALE
                O:l3ll!>DO               'i
                                                                                         I
   ~-----                                  [
                              , Inoh _ !rooFl.
                                                                                       i                                                                                         ..
                                                                                                         0
                                                                                                                           LEGEND
                                                                                                                                                                    ,
                                                                                                                                                                 Rm.lon               ~



                                                                                                         -¢-
                                                                                                                       - HORIZONTAL WELL
                                                                                                                         SURFACE: I..OCATIOH                        ,          04-11 13
                                                                                                                                                                               05-12 13
                               ENGINEERING AND SURVEYING CO.
                                                                                                             ,
                                                                                                                       • wm
                                                                                                                     .. IJIoIfT UH[                                 ,          06-05-13
                    T8PEn..~",,-.....wr TBI'lSFmI~ND.'OO4&I-O:I
                            1'I15N._A_ u..do, lX.7!041 P.II56.t22M11
                                    lWiW.howlandcompanies.com                                        -
                                                                                                                     " f'DICE UH£
                                                                                                             - - - - - TIES
                                                                                                                                                                    ,          10-22-13
                                                                                                                     • SURVEY UHE
 WARNING: BASIS          or    BEAAlm>: G.P.s. Tx. South Zone. HAD. 27.
 THIS PW' WAY Hal' SH:IW .IU. QIOSStlGS        or
                                          PI'El..N!i OR CIa!S. IQIWIO EHQHEERIHG                    FIELD DATE                                    DAAWN B't'; A.LC./S.1.IoI.
 NIl SIJ!f\ItTIIGco..
                    tIC. ASSlAI£S NO R£SPOICSI!lIlJI 'to lOCArt I'PQJNE OR coa.t CROSSIla::~.
 ~~~~~~~~g~.DIAI.                                                          FEE 0'fMRSIF OR               "'                                       CHECKED B't': J.S.
                                                                                                                                                  JOB No. 22160.~ 13
 ~ IIOWI.IHO ~ NIl su:M:YH:: co., He. 201Je
                                                                                                                                                  SHEET:    2 OF    2




                                                                                                                                                                                          177
                                                     EXHIBIT"A-S"

                                                     FIELD NOTES
                                                         FOR
                                        CONOCOP~L~SCOMPANY
                      V AQUILLAS RANCH LEASE 257577-001
                             RETAINED TRACT 5
           (VAQUILLAS RANCH L WELLS No. 138, No. 139, No. 133 & No. 188 ST)
                                640.00 ACRES

     A TRACT OF LAND CONTAINING 640.00 ACRES, more or less, being out of the VaquiIlas
     Ranch Lease 257577-00 I, 6,740.00 Acres (Called), situated in the West Y2 of Survey 1662. RE.
     Farr, Abstract 2230; and Survey 1652, W.H. Taylor, Abstract 2876, Webb County, Texas, and
     being more particularly described as follows:

     BEGINNING at a point which bears S 41°48'58" E. a distance of782.90 feet, from the VaquiUas
     Raneh L No. 138 Well;

     THENCE, N 800 01'00" W. a distance of 1,834.72 FEET, to a point for the Southwest comer
     hereof;

     THENCE, NORTH. a distance of 1,133.33 FEET, to a point for an exterior comer hereof;

     THENCE, EAST, a distance of97.21 FEET, to a point for an interior comer hereof;

     THENCE, NORTH, a distance of 5,125.38 FEET. to a point for the Northwest comer hereof;

     THENCE, S 89°33'23" E, a distance of 5,644.97 FEET, to a point for the Northeast comer
     hereof;

     THENCE, S 00°07'00" E, a distance of 4,247.26 FEET, to a point for an exterior comer hereof;

     THENCE, WEST, a distance of3,943.78 FEET, to a point for an interior comer hereof;

     THENCE, S 00 0 00'05" E, a distance of1,285.82 FEET, to the POINT OF BEGINNING,
     containing 640.00 acres of land, more or less.


                                Basis of Bearing: G.P.S., TX. South Zone, NAD-27




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7615 N. Bartlett Avenue   :   P.O. Box 451128 (7S045)       :    laredo, lX 78041 P. 956.722.4411       F.956.722.5414
                 TaPE FIrm Registration No. F-4097      ;       TaPLS Firm ReSlstration No. 100464-00



                                                                                                                         178
                                                                 EXHIBIT "A-5"
                                        CONOCOPHILLIPS COMPANY
                                    VAQUIUAS RANCH LEASE 257577-001
                                            RETAINED TRACT 5
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                                                                                                                                                                                         179
                                                                                                      Filed
                                                                                      9/3/20144:05:53 PM
                                                                                         Esther Degollado
                                                                                             District Clerk
                                                                                             Webb District
                                                                                      2014CVQ000438 D4

                          CAUSE NO. 2014 CVQOOO 438 D4

VAQUILLAS UNPROVEN MINERALS,                     §    IN THE DISTRICT COURT OF
LTD,                                             §
Plaintiff,                                       §
                                                 §    WEBB COUNTY, TEXAS
v.                                               §
                                                 §
CONOCOPHILLIPS COMPANY,                          §    406th JUDICIAL DISTRICT
Defendant

             PLAINTIFF'S FIRST AMENDED ORIGINAL PETITION

TO THE HONORABLE JUDGE OF SAID COURT:

      Vaquillas Unproven Minerals, Ltd.              ("Vaquillas"), Plaintiff, complains of

ConocoPhillips Company ("Conoco"), Defendant, and respectfully shows:

                                      I.
                           DISCOVERY CONTROL PLAN

       1.    Plaintiff affirmatively pleads that discovery should be conducted           III


accordance with Texas Rule of Civil Procedure 190.4 (Level 3).

                                           II.
                                       PARTIES

      2.     PlaintiffVaquillas is a Texas Limited Partnership with its principal place of

business in Laredo, Webb County, Texas.

      3.     Defendant Conoco is a Delaware Corporation with its principal place of

business in Houston, Texas. Conoco has been served and appeared herein.

      4.     Pursuant to Rule 39(c)'s requirement to name, if known, any person

described in subdivision (a) (1)-(2) as persons to be joined if feasible, Vaquillas hereby

identifies ExxonMobil Corp., Devon Energy Production Co., L.P., Kim Lake Inc., and

PLAINTIFF'S FIRST AMENDED ORIGINAL PETITION                                          Page 1

                                                                                        190
Muryl Olinger. The reason they have not been made parties is because Vaquillas has

only recently determined (through Conoco's supplementation of its discovery responses)

that they are owners of interests in the oil and gas leases that are the subject of this

litigation. In addition, they appear to be parties to a Joint Operating Agreement under

which Conoco is the "Operator" and they are "Non-Operators."               That operating

agreement provides for the defense of lawsuits such as this to be under the general

direction of a committee of lawyers representing the parties with the Operator's attorney

as Chairman, and includes provisions for the Operator and non -operators to share the

costs of the litigation. Based on the operating agreement's provision relating to defense

of lawsuits, Conoco's attorneys would act as Chairman in accordance with the operating

agreement. This issue has been raised with Conoco. Vaquillas stands ready to join these

persons and entities as parties if Conoco objects to their non-joinder, so long as it does

not delay the case or cause prejudice to Vaquillas.

                                                III.
                             JURISDICTION AND VENUE

       5.     The District Courts of the State of Texas have jurisdiction over these claims

and these parties. Conoco's principal offices are in Houston, Texas, and its Texas oil and

gas operations are the subject of this cause.

       6.     This suit involves a dispute over two oil and gas leases which relate to real

property in Webb County, Texas. Venue is therefore proper (and mandatory) in Webb

County, Texas, under Sections 15.002(a) (I) and 15.011 of the Texas Civil Practice &

Remedies Code.

PLAINTIFF'S FIRST AMENDED ORIGINAL PETITION                                          Page 2

                                                                                        191
                                         IV.
                                   RELIEF SOUGHT

       7.     Vaquillas seeks a release of acreage previously the subject of an oil and gas

lease, specific performance, and monetary relief over $1,000,000.

                                             V.
                                          FACTS

       8.     Conoco has violated its agreement with Vaquillas by failing to execute and

deliver to Vaquillas a written release of all acreage in excess of 40 acres for each

producing and shut-in natural gas well capable of producing in paying quantities on

certain leased property that reverted to Vaquillas as a matter of law.

       9.     The following properties (the "Subject Property") are the subject of this

lawsuit:

       26,622.79 acres ofland, more or less, situated in Webb County, Texas more
       fully described in the Oil, Gas and Mineral Lease dated June 15, 1974 (as
       amended) between Vaquillas Ranch Company, Ltd. et aI., as Lessor, and
       Conoco Inc., as Lessee, a copy of which is recorded in Volume 460, Pages
       324-330 of the Webb County Deed Records (hereinafter the "26,622.79
       acre lease"); and

       6,740 acres of land, more or less, situated in Webb County, Texas more
       fully described in the Oil, Gas and Mineral Lease, dated effective
       November 1, 1987, and entered into by and between Vaquillas Ranch
       Company, Ltd., Vaquillas Unproven Mineral Trust, and Vaquillas Proven
       Mineral Trust, as Lessor, and Conoco Inc., as Lessee, a Memorandum of
       which is recorded in Volume 1303, Pages 886 et seq. of the Webb County
       Real Property Records (hereinafter the "6,740 acre lease").

       10.    Plaintiff Vaquillas is successor-in-interest to the Lessor(s) with respect to

both oil and gas leases described above. Defendant Conoco is a successor-in-interest to

the Lessee(s) with respect to both oil and gas leases described above.

PLAINTIFF'S FIRST AMENDED ORIGINAL PETITION                                          Page 3

                                                                                        192
      11.      Both leases described in Paragraph 8 above have been amended and

supplemented a number of times. On or about November 1, 1987, the 26,622.79 acre

lease was amended to include a Paragraph 18. On the same date, the 6,740 acre lease was

entered into, containing the same Paragraph 18. This paragraph provides for the release

of acreage at the end of the continuous drilling program. In order to be engaged in a

continuous drilling program, Conoco must commence the drilling of a new well within 90

days after the completion of each well. At the end of the continuous drilling program

(i.e., when Conoco ceases to commence the drilling of new wells within the 90 day

period(s», Conoco is allowed to maintain its leases of the Subject Property only as to an

amount of acreage surrounding each well it drilled that is capable of producing in paying

quantities.   Both leases require Conoco to execute and deliver to Vaquillas a written

release of any acreage not earned by drilling operations.

       12.     Under Paragraph 18 of both oil and gas leases, un-earned acreage reverted

to Vaquillas 90 days after Conoco ceased drilling wells under the continuous drilling

clause. In this case, that date occurred no later than June 21, 2012 ("Release Date").

This is the date ninety days after Conoco's Vaquillas Ranch A-7 No. 249 Well was

completed. Conoco's Vaquillas Ranch A-7 No. 249 Well was the last well it drilled on

the Subject Property.

       13.     Conoco takes the position that it has earned 40 acres per oil well and 640

acres per gas well. Conoco's position is not correct as to gas wells because it disregards

an important provision of both leases.



PLAINTIFF'S FIRST AMENDED ORIGINAL PETITION                                         Page 4

                                                                                       193
       14.    Paragraph 18 of both leases controls how much acreage Conoco is allowed

to retain for each well it has drilled. Paragraph 18 states that if the Railroad Commission

of Texas adopts a rule for the field that provides for a spacing or proration establishing

units of acreage per well different than 40 acres for oil wells or 640 acres for gas wells,

Conoco may retain only the acreage provided by the units established by virtue of the

spacing provided by the Commission's rule:

       ... Lessee covenants and agrees to execute and deliver to Lessor a written
       release of any and all portions of this lease which have not been drilled to a
       density of at least 40 acres for each producing oil well and 640 acres for
       each producing or shut-in gas well, except that in case any rule adopted
       by the Railroad Commission of Texas or other regulating authority for
       any field on this lease provides for a spacing or proration establishing
       different units of acreage per well, then such established different units
       shall be held under this lease by such production, in lieu of the 40 and
       640-acre units above mentioned. (Emphasis supplied).

       15.   After the November 1, 1987 amendment to the two leases, the Railroad

Commission did adopt a rule for the Vaquillas Ranch (Lobo Cons.) Field that provided

for spacing that established 40 acre units of acreage for each gas well rather than 640

acres. Therefore, Conoco is not allowed to retain more than 40 acres for each of the gas

wells it drilled on the Subject Property. The acreage to be released will hereafter be

referred to as the "Reverted Minerals."

       16.    On February 17,2014, Conoco filed of record in Webb County, Texas two

Partial Releases ("Partial Releases") of the two oil and gas leases, but these releases did

not release all the reverted acreage (i.e., all acreage in excess of 40 acres for each

producing and shut-in natural gas wells).



PLAINTIFF'S FIRST AMENDED ORIGINAL PETITION                                             PageS

                                                                                          194
       17.    Without waiver of its right to do so at a later time and retaining all of its

rights under the two leases in question, Vaquillas does not challenge by this cause

Conoco's rights or interest in the wells it drilled on the Subject Property and producing in

paying quantities at the Release Date.

                                        VI.
                                 CAUSES OF ACTION

       18.    The foregoing Paragraphs 1 to 15, which are incorporated by reference

herein as if recited verbatim, support the following causes of action and claims:

       19.    Breach of Contract:        At the Release Date, the Reverted Minerals

automatically reverted to Vaquillas. Conoco was required to provide Vaquillas with a

fully executed and recordable release of Reverted Minerals under the 26,622.79 acre

lease and the 6,740 acre lease, but Conoco has failed and refused to provide Vaquillas

with a release of all acreage in excess of 40 acres for each producing and shut-in natural

gas well capable of producing in paying quantities. Vaquillas has suffered direct and

foreseeable and indirect or consequential damages from these breaches of contract in

excess of the minimum jurisdictional amount.

       20.    Specific Performance:      Conoco has failed to provide Vaquillas with a

release of all acreage in excess of 40 acres for each producing and shut-in natural gas

well, as provided for in the leases. Conoco should be ordered to specifically perform this

obligation to provide to Vaquillas a release of all acreage in excess of 40 acres for each

producing and shut-in natural gas well capable of producing in paying quantities.




PLAINTIFF'S FIRST AMENDED ORIGINAL PETITION                                           Page 6

                                                                                         195
      21.    Removal of Cloud and Action to Quiet Title: As is set out above, the

26,622.79 acre lease and the 6,740 acre lease terminated as of the Release Date as to the

Reverted Minerals. Vaquillas would show that after making the oil and gas leases of the

Subject Property it was the owner of the reversionary interest in the mineral estate in the

Subject Property. On the Release Date, the mineral interest in the Reverted Minerals

reverted to Vaquillas. By Conoco's filing of the Partial Releases that did not release all

acreage in excess of 40 acres for each producing and shut-in natural gas well capable of

producing in paying quantities Conoco has clouded Vaquillas' title to the Reverted

Minerals, forcing Vaquillas to seek judicial confirmation of Vaquillas' interest in the

Reverted Minerals and judgment quieting title to the Reverted Minerals in Vaquillas.

      22.    Attorneys' Fees: As set out above, Conoco has breached (and continues to

breach) its obligation under the 26,622.79 acre lease and the 6,740 acre lease to execute

and deliver to Vaquillas a written release of all acreage in excess of 40 acres for each

producing and shut-in natural gas well capable of producing in paying quantities.

Vaquillas' claims have been presented to Conoco and Conoco has failed to release the

acreage in question within 30 days after presentment. Accordingly, Vaquillas is entitled

to its reasonable and necessary attorneys' fees with respect to this action.    TEX. CIV.

PRAC. & REM. CODE    §38.00 1.

      23.    Conditions Precedent: All conditions precedent to the bringing of these

claims has been performed or has occurred and Vaquillas was at all relevant times ready,




PLAINTIFF'S FIRST AMENDED ORIGINAL PETITION                                          Page 7

                                                                                        196
willing and able to timely perform and did perform all of its obligations under the two

leases.

                                        VII.
                              REQUEST FOR DISCLOSURES

          24.   Pursuant to Texas Rule of Civil Procedure 194, Plaintiff requests that

Defendant supplement Plaintiff's request for disclosure pursuant the Texas Rules of Civil

Procedure.

                                           PRAYER

          25.   For these reasons, Plaintiff Vaquillas Unproven Minerals, Ltd. asks for

judgment against Defendant ConocoPhillips Company for the following:

                I.      damages, both direct and indirect or consequential in excess of the
                        minimum jurisdictional amount;
                II.     judgment holding that the oil and gas leases in question have
                        terminated as to all acreage described in such leases except 40 acres
                        around the wellbore of each producing and shut-in natural gas well
                        drilled by Conoco and capable of producing in paying quantities;
                111.    judgment holding that the Partial Releases are in valid and
                        unenforceable, removing them from the title to the property made
                        the subject of this litigation, and quieting title in Plaintiff;
                IV.     judgment ordering Conoco to execute a written release of the
                        Reverted Minerals;
                v.      reasonable and necessary attorneys' fees;
                VI.     prejudgment interest as provided by law;
                V11.    post-judgment interest as provided by law;
                V111.   costs of suit; and
                IX.     all other relief to which Plaintiff is entitled.

                                            Respectfully submitted,


                                            By:    lsi Gregg Owens
                                                   Gregg Owens



PLAINTIFF'S FIRST AMENDED ORIGINAL PETITION                                            Page 8

                                                                                          197
                                 Gregg Owens, SBN 15383500
                                 gregg.owens@haysowens.com
                                 John R. Hays, Jr., SBN 09303300
                                 john.hays@haysowens.com
                                 Alicia R. Ringnet, SBN 24074958
                                 alicia.ringuet@haysowens.com
                                 HA YS & OWENS L.L.P.
                                 807 Brazos Street, Suite 500
                                 Austin, Texas 78701
                                 (512) 472-3993
                                 (512) 472-3883 Facsimile

                                 Michael Jung, SBN 11054600
                                 michaeljung@strasburger.com
                                 STRASBURGER & PRICE, LLP
                                 901 Main Street, Suite 4400
                                 Dallas, Texas 75202-3794
                                 (214) 651-4724
                                 (214) 651-4330 Facsimile

                                 Armando X. Lopez, SBN 12562400
                                 mandox@rio.bravo.net
                                 LAW OFFICES OF ARMANDO X. LOPEZ
                                 1510 Calle Del Norte, Suite 16
                                 Laredo, Texas 78041
                                 (956) 726-0722
                                 (956) 726-6049 Facsimile

                                 Raul Leal, SBN 24032657
                                 rleal@rl-lawfirm.com
                                 RAUL LEAL INCORPORATED
                                 5810 San Bernardo, Suite 390
                                 Laredo, Texas 78041
                                 (956) 727 -0039
                                 (956) 727-0369 Facsimile

                                 ATTORNEYS FORVAQUILLAS
                                 UNPROVEN MINERALS, LTD.




PLAINTIFF'S FIRST AMENDED ORIGINAL PETITION                        Page 9

                                                                      198
                             CERTIFICATE OF SERVICE


       I hereby certifY that a true copy of this document is being served on the following
persons by the means shown on this the 3rd day of September, 2014.


                                         By:    lsi Gregg Owens
                                                Gregg Owens


Mr. Michael V. Powell                                                via Electronic Mail
mpowell@lockelord.com
Ms. Elizabeth L. Tiblets
etiblets@lockelord.com
LOCKE LORD LLP
2200 Ross Avenue, Suite 2200
Dallas, Texas 75201-6776

Mr. Adolfo Campero                                                   via Electronic Mail
acampero@camperolaw.com
CAMPERO & ASSOCIATES, P.C.
315 Calle Del Norte, Suite 207
Laredo, Texas 78041

ATTORNEYS FOR DEFENDANT
CONOCOPHILLIPS COMPANY




PLAINTIFF'S FIRST AMENDED ORIGINAL PETITION                                        Page 10

                                                                                       199
                                                                                                           Filed
                                                                                         7/30/201412:03:15 PM
                                                                                              Esther Degollado
                                                                                                  District Clerk
                                                                                                  Webb District
                                                                                           2014CVQ000438 D4

                              CAUSE NO. 2014CVQ000438 D4

VAQUILLAS UNPROVEN MINERALS,                    §       IN THE DISTRICT COURT OF
LTD,                                            §
                                                §
       Plaintiff,                               §
                                                §
v.                                              §       WEBB COUNTY, TEXAS
                                                §
CONocopmLLIPS COMPANY,                          §
                                                §
       Defendant.                               §       406TH JUDICIAL DISTRICT

                DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

TO THE HONORABLE JUDGE OF SAID COURT:

       Defendant ConocoPhillips Company ("ConocoPhillips") moves, pursuant to Tex. R. Civ.

P. I 66a(b), for summary judgment that Plaintiff Vaquillas Unproven Minerals, Ltd.

("Vaquillas") take nothing by this action. There are no genuine issues of material fact, and

ConocoPhillips is entitled to judgment as a matter oflaw.

        I. INTRODUCTION: VAQUILLAS' SUIT PRESENTS ONE ISSUE
     ABOUT THE PROPER INTERPRETATION OF TWO OIL AND GAS LEASES

       This action turns on the proper interpretation of certain language found in two Oil, Gas,

and Mineral Leases under which Vaquillas claims to be the sole current "Lessor," and

ConocoPhillips is the current Lessee. (See Plaintiff s Original Petition   ~   9). Vaquillas has

described the two Leases in paragraph 8 of its Original Petition as the "26,622.79 Acre Lease"

and the "6,740 Acre Lease," and ConocoPhillips has attached true and correct copies of those

two Leases (without amendments not pertinent here) as Exhibits A and B to the Declaration of

Dana C. Huebner attached at Tab 1 to this Motion for Summary Judgment (the "Leases").




DEFENDANT'S MOTION FOR SUMMARY JUDGMENT                                                 PAGEl

                                                                                               27
       Although all of the language in the Leases is important, 1 Vaquillas bases all of its claims

in this lawsuit on the following language from Paragraph 18 of both Leases. 2 (ConocoPhillips

will indent and number the sentences and separate phrases quoted from Paragraph 18 in order to

facilitate later discussion of them.i

               Sentence (1): On November I, 1990, Lessee covenants and agrees to

       execute and deliver to Lessor a written release of any and all portions of this lease

       which have not been drilled to a density of at least 40 acres for each producing oil

       well and 640 acres for each producing or shut-in gas well,

               Sentence (2): except that in case any rule adopted by the Railroad

       Commission of Texas or other regulating authority for any field on this lease

       provides for a spacing or proration establishing different units of acreage per well,

       then such established different acreages shall be held under this lease by such

       production, in lieu ofthe 40 and 640-acre units above mentioned;

               Sentence (3): provided, however, that if at such date lessee is engaged in

       drilling or reworking operations the date for the date for execution and delivery of

       such release shall be postponed and the entire lease shall remain in force so long


       1When interpreting an oil and gas lease, the Court must "examine the entire document
and consider each part with every other part so that the effect and meaning of one part on any
other part may be determined." Heritage Resources, Inc. v. NationsBank, 939 S.W.2d 118, 121
(Tex. 1996).

       2Each of the alleged causes of action in Plaintiffs Original Petition is based on Vaquillas'
erroneous interpretation of Paragraph 18. See Plaintiffs Original Petition '11'11 17-20. This
Motion for Summary Judgment explains why Vaquillas' interpretation is wrong as a matter of
law. Consequently, this motion seeks summary judgment on the entire case.

       3This quotation is from the "26,622.79 Acre Lease," as described in Paragraph 8 of
Vaquillas' Petition. The only difference between this language in the two Leases is that the
second lease, the "6,740 Acre Lease" described by Vaquillas starts with: "At the end of the
primary term, Lessee covenants and agrees .... "
DEFENDANT'S MOTION FOR SUMMARY JUDGMENT                                                    PAGE 2

                                                                                                 28
       as operations on said well or wells are prosecuted with reasonable diligence, and

       if, after the completion or abandonment of any such well Lessee commences the

       drilling of an additional well within Ninety (90) days from the completion or the

       abandonment of the preceding well, or continuously conducts drilling operations

       in good faith and with reasonable diligence on said lease without any cessation for

       longer than Ninety (90) days, said lease shall remain in full force and effect

       during such drilling operations and until the end of Ninety (90) days after the

       completion or abandonment of the final well, at which time Lessee shall execute

       and deliver to Lessor said written release, releasing all portions of the lease not

       then so developed.

               Sentence (4): Each retained unit shall contain at least one (1) well

       producing or capable of producing oil or gas in paying quantities, and the acreage

       within a unit shall be contiguous.

See Petition ~~ 11, 13; Huebner Declaration, Exhs. A & B (emphasis added).

       The wells on the Leases produce gas, so the relevant "development" obligation and the

retained acreage size to which the parties agreed in Sentence (1), quoted above, is 640 acres.

There is no dispute between the parties that ConocoPhillips maintained the 26,622.79 Acre Lease

in full force and effect for many years after November 1, 1990, and the 6,740 Acre Lease in full

force and effect for many years after its primary term by continuous drilling. There is no dispute

that ConocoPhillips' continuous drilling operations ended at or about the time Vaquillas states in

Paragraph II of its Original Petition. Due to the end of continuous drilling operations, COPC

filed the Releases of Acreage that it believed were due to Vaquillas as stated in the final phrase

of Sentence (3) and in Sentence (4), copies of which are attached as Exhibits C and D to the



DEFENDANT'S MOTION FOR SUMMARY JUDGMENT                                                   PAGE 3

                                                                                                29
Huebner Declaration, filed herewith. ConocoPhillips' Releases of Acreage retained 640-acre

units around producing gas wells, as agreed in Sentence (1).

         The sole dispute between the parties to this case turns the proper interpretation of

Sentence (2), quoted above. There is no disagreement that the Railroad Commission of Texas

(the "Commission") has adopted Field Rules for the Vaquillas Ranch (Lobo Cons.) Field, Webb

County, Texas. Those Field Rules apply to the wells at issue in this case. Those Field Rules,

originally effective February 24, 1998, were amended into their current form effective November

2,2010. The Field Rules for the Vaquillas Ranch (Lobo Cons.) Field, as amended, are attached

as Tab 2 to this Motion. The Court may take judicial notice of these Field Rules adopted by the

Commission, and ConocoPhillips requests it to do so. TEX. R. EVID. 201.

         Vaquillas contends the Field Rules triggered the exception in Sentence (2) to the parties'

basic agreement of Sentence (1), which was that ConocoPhillips would retain 640 acres for gas

wells.    (Plaintiffs Original Petition   ~~   13-14).   Vaquillas contends that the Field Rules

"established different units of acreage per well," specifically only 40-acre units for gas wells, and

that consequently, COPC must forfeit, because of Paragraph 18, a great deal more acreage from

the two Leases than it already has released to Vaquillas. (See Plaintiffs Original Petition ~~ 14,

17,18,19).

         For the reasons explained below, Vaquillas' contentions are wrong               Under the

straightforward, plain meaning of Paragraph 18, the Commission's Field Rules do not "establish"

different units of acreage per well. Those Rules state only that no well may be drilled on less

than 40 acres, which is exactly the same minimum density that applied under the Commission's

Statewide Rules in effect for these Leases before the Commission adopted Field Rules. The

Field Rules say nothing about any maximum acreage that may be assigned to gas wells.



DEFENDANT'S MOTION FOR SUMMARY JUDGMENT                                                     PAGE 4

                                                                                                   30
Consequently, nothing in the Field Rules is inconsistent with, or overrides, the parties' basic

agreement that gas wells retain 640 acres. Nothing about those Field Rules "establishes" any

unit different from 640 acres. 4

                 II.     PERTINENT PROVISIONS OF THE TWO LEASES

       As Texas oil and gas leases, the two Leases actually are conveyances by which the Lessor

granted a fee simple determinable in the minerals in and under the land described in the Leases

to the Lessee, who is more properly referred to as a "Grantee." Natural Gas Pipeline Co. v.

Pool, 124 S.W.3d 188, 192 (Tex. 2003); accord Anadarko Petroleum Corp. v. Thompson, 94

S.W.3d 550, 554 (Tex. 2002). By the first Lease, Vaquillas and its predecessors granted to

ConocoPhillips' predecessor the mineral estate in and under 26,622.79 acres of Webb County

land for "five years (called "primary term") and as long thereafter as oil, gas or other mineral is

produced from said land or land with which said land is pooled hereunder." By the second

Lease, Vaquillas and its predecessors did the same for an additional 6,740 acres of Webb County

land, except the term of that Lease was for "three years ... and as long thereafter as oil, gas or

other mineral is produced from said land or land with which said land is pooled .... "

       "An oil, gas and mineral lease is indivisible by its nature. Production from any part of

the lease keeps the lease in effect during the primary term and for long as oil, gas and other

minerals are being produced as to all lands described in the instrument." Shown v. Getty Oil Co.,

645 S.W.2d 555, 560 (Tex. App.-San Antonio 1982, writ refd). Accord, Matthews v. Sun Oil



        4 There are field rules that do "establish" maximum acreages. As one example, Tab 3 to
this Motion is a copy of the Final Order Adopting Temporary Rules and Regulations for the Big
Reef (Edwards) Field, Webb County. Rule 3 of that Field Rule establishes standard drilling and
proration units to be 160 acres. Those rules provide that "no proration unit shall consist of more
than ONE HUNDRED SIXTY (160) acres, plus a 10% tolerance. ConocoPhillips' point is that
the Field Rules for the Vaquillas Ranch (Lobo Cons.) Field do not establish any such
"maximum" units.
DEFENDANT'S MOTION FOR SUMMARY JUDGMENT                                                    PAGES

                                                                                                 31
Co., 425 S.W.2d 330, 333 (Tex. 1968); Humphrey v. Seale, 716 S.W.2d 620, 622 (Tex. App.-

Corpus Christi 1986, no writ).

        Accordingly, ConocoPhillips' extensive production from the two Leases entitles

ConocoPhillips to maintain the Leases in full force and effect as to all of the land covered by the

Leases until one of two events came to pass, both of which are "limitations on the grant." The

first limitation on the grant is found in the habendum clauses of the two Leases and is cessation

of production in paying quantities, an event that has not occurred. Under Vaquillas' arguments,

the second limitation on the grant is the requirement to deliver releases of undeveloped acreage

that is contained in Paragraph 18. Consequently, the question posed by Vaquillas' Petition is

whether by virtue of a second limitation on the grant contained in the two Leases,

ConocoPhillips must release thousands of additional acres it has earned by extensive drilling and

would continue to hold under the habendum clauses because Sentence (2) of Paragraph 18 means

it may retain only 40, rather than the agreed 640, acres around producing wells?

       Note that both Leases expressly authorized ConocoPhillips to assign acreage up to 640-

acres (plus a tolerance of 10 percent) to gas wells. Paragraph 4 of both Leases grants optional

pooling authority to the Lessee and says:

               ... units pooled for gas hereunder shall not substantially exceed in area
       640 acres each plus a tolerance often percent (10%) thereof, provided that should
       governmental authority having jurisdiction prescribe or permit the creation of
       units larger than those specified, for the drilling or operation of a well at a regular
       location or for obtaining maximum allowable from any well to be drilled, drilling
       or already drilled, units thereafter may conform substantially in size with those
       prescribed or permitted by governmental regulations.

Paragraph 16 of both Leases created an additional limitation on the Lessee's pooling authority by

restricting the option to pool to leases covering land belonging to Vaquillas or in which

Vaquillas owned an interest, but that restriction is not pertinent here.



DEFENDANT'S MOTION FOR SUMMARY JUDGMENT                                                      PAGE 6

                                                                                                 32
       Accordingly, the normal and completely authorized block of acreage under these Leases

for gas wells is 640 acres. As noted above, that acreage for gas wells was expressly authorized

by the pooling clause. Under Sentence (1) of Paragraph 18, that was the parties' agreement for

"retained acreage" around gas wells at the time Paragraph 18 came into playas an active

limitation on the grant of a fee simple determinable to ConocoPhillips "as long thereafter as oil,

gas or other mineral is produced from said land or land with which said land is pooled .... "

(Leases ~2).

                                   III.    THE FIELD RULES

       The Field Rules do not, on their face, say anything about a minimum density, or

minimum acreage around wells. (See Tab 2 to this Motion). The Field Rules state (with an

important exception) that wells must be at least 467 feet from property and lease boundaries

("lease line spacing") and at least 1,200 feet apart if they are drilled to the "same reservoir on the

same lease, pooled unit, or unitized tract" ("between well spacing"). The exception added by the

20 I 0 amendment to the Field Rules is that there is no between well spacing for wells drilled at

least 660 feet from the nearest property or lease boundary.

       The minimum distances of 467 feet for lease line spacing and 1,200 feet for between well

spacing are the very same minimum distances set forth by Statewide Spacing Rule 37, which

governed wells on these Leases before the Commission adopted Field Rules. See 16 T.A.C. §

3.37(a)(l) (stating the Statewide Spacing Rule as follows: "No well for ... gas ... shall

hereafter be drilled nearer than 1,200 feet to any well completed in or drilling to the same

horizon on the same tract or farm, and no well shall be drilled nearer than 467 feet to any

property line, lease line, or subdivision line."). So, the Field Rules did not adopt any "different"




DEFENDANT'S MOTION FOR SUMMARY JUDGMENT                                                       PAGE 7

                                                                                                    33
spacing rules from the Statewide Rules already in effect before the Commission promulgated

those Field Rules.

        When, as here, a Field Rule of the Commission does not contain a well density

requirement, which is the minimum amount of acreage needed to drill a well, but does prescribe

minimum spacing requirements, one looks to the Commission's Statewide Rule 38, titled "Well

Densities," to ascertain minimum densities. 16 T.A.C. § 3.38. "Rule 38 establishes the minimum

number of acres to be assigned to each well in a given reservoir." 2 E. Smith & J. Weaver,

TEXAS LAW     OF OIL   AND GAS   ~   9.3(B) (2013). Statewide Rule 38(b)(2)(A) provides that for

spacing rules requiring a minimum 467 feet lease line spacing and 1,200 feet between-wells

spacing (which is the case for both the Statewide Spacing Rule 37 and the Field Rules for the

Vaquillas Ranch (Lobo Cons.) Field), the minimum number of acres that must be assigned to

each well is 40 acres. There is no maximum number of acres that may be assigned to each well.

Except for the requirement that there must be at least 40 acres, Rule 38 does not require acreages

of any particular size to be assigned to gas wells. s

       The only relevant prohibition in Rule 38 is that "[nlo well shall be drilled on substandard

acreage," which means in this case, no well shall be drilled on less than 40-acre units. 16 T.A.C.

§3.38(b)(1). None of the applicable Commission rules prohibits drilling on, or retention of, units

larger than 40 acres per well. As stated above, neither the Field Rules nor Statewide Rule 38




        5Proper interpretation of the Commission's Field Rules is, of course, a question oflaw for
the Court. See, e.g., State v. Bilbo, 392 S.W.2d 121, 122 (Tex. 1965) (interpretation of certificate
issued by the Commission presents a question oflaw).


DEFENDANT'S MOTION FOR SUMMARY JUDGMENT                                                    PAGES

                                                                                                  34
establishes any maximum acreage per well. 6         Consequently, these parties' agreement that

ConocoPhillips may retain 640 acres of retained acreage around gas wells complies in every

respect with the Field Rules for the Vaquillas Ranch (Lobo Cons.) Field and Statewide Rule 3S.

As a matter of common sense, blocks of 640 acres plainly satisfy the requirement that there must

be at least 40 acres assigned.

       As will be discussed in greater detail below, nothing in the Field Rules for the Vaquillas

Ranch (Lobo Cons.) Field requires, mandates, or-important here--"establishes" any units of less

than 640 acres.

       Rule 3 of the Field Rules addresses proration. There is no factor in the proration formula

for the Vaquillas Ranch (Lobo Cons.) Field for the amount of acreage assigned to wells. Other

field rules do employ acreages as a factor for proration, but these Field Rules do not.

                           IV.    ARGUMENT AND AUTHORITIES

       A.         The Word the Parties Chose for Paragraph 18: "Establish."

       In order to decide this case, the Court must closely analyze the specific language these

parties chose to use for Paragraph IS of these Leases. The operative words from the exception in

Sentence (2), quoted above, are: "in case any rule adopted by the [Commission] for any field on

this lease provides for a spacing or proration establishing different units of acreage per well. then

such established different units shall be held under this lease by such production, in lieu of the ..

. 640-acre units above mentioned."

       The leading Texas Supreme Court opinion on this type of language-which

ConocoPhillips says compels a decision in its favor-is Jones v. Killingsworth, 403 S.W.2d 325



       6As  noted above, the maximum acreage limitation for the wells at issue here is set forth in
Paragraph 4 of the Leases. Paragraph 4 prohibits ConocoPhillips from assigning more than 640
acres (Plus a 10 percent tolerance) to each gas well.
DEFENDANT'S MOTION FOR SUMMARY JUDGMENT                                                     PAGE 9

                                                                                                   35
(Tex. 1965). In Jones, the Court was called upon to construe a pooling provision in an oil and

gas lease that provided, in pertinent part, as follows:

       Units pooled for oil hereunder shall not substantially exceed 40 acres each in area,
       and units pooled for gas hereunder shall not substantially exceed 640 acres each
       plus a tolerance of 10% thereof, provided that should governmental authority
       having jurisdiction prescribe or permit the creation of units larger than those
       specified, units thereafter created may conform substantially in size with those
       prescribed by governmental regulations.

Id. at 327 (emphasis added). The Railroad Commission promulgated Field Rules for the field

covered by the Jones lease, and those Field Rules required operators to assign a minimum of 80

acres to oil wells, but went further to permit them also to assign an additional 80 acres, for a total

of 160 acres to oil wells. Id.

       The dispute before the Supreme Court was that the lessor, Jones, contended the language

of her lease authorized the lessee, Killingsworth, to unitize only 80 acres around oil wells.

Killingsworth, the lessee, contended the Field Rules permitted him to create units that conformed

substantially to the maximum acreage of 160 acres that was permitted for oil wells by the

applicable Field Rules. The Supreme Court decided the case for Jones by focusing on the

difference between two specific words-"prescribed" and "permitted"-that the parties had

employed in the Jones-to-Killingsworth lease. The Court held as follows:

               The lessors did not consent to enlarge an oil proration unit to any size
       permitted by governmental regulations. They gave their consent to enlarge a unit
       of substantially 40 acres, but only to the extent of the size of units prescribed by
       the regulatory authority. The fact that the Railroad Commission may permit a
       much larger unit cannot be read into the lease contract when, as here, the authority
       create larger units is expressly limited to units of the size prescribed by the
       Railroad Commission. The Commission prescribed a unit of 80 acres. [The field
       rules clearly say that there must be a proration unit of at least 80 acres, and there
       may be larger units of not more than 160 acres]. * * *

              The parties obviously knew when the lease contract was executed that a
       permitted oil proration unit could conceivably be much larger in area than one
       prescribed by governmental authority. To say that a lessee can pool lessors' land


DEFENDANT'S MOTION FOR SUMMARY JUDGMENT                                                     PAGE 10

                                                                                                    36
        with units of any size permitted by the Railroad Commission would defeat the
        intention of the parties to restrict the size of the units to the size prescribed by
        govemmental authority.

Id at 328 (emphasis in original).

        The same analysis is applicable here.      Before the exception in Sentence (2) of the

Vaquillas Leases, quoted above, comes into play, the Railroad Commission must "establish"

units for gas wells of a different size than 640 acres. The parties used the word "establish" twice,

saying first "establishing different units of acreage," and second, referring to "established

different units." The parties did not say the exception in Sentence (2) comes into play if the

Railroad Commission adopts a Field Rule that merely "permits" the creation of gas units of

fewer than 640 acres, and that is all the Field Rules for the Vaquillas Ranch (Lobo Cons.) Field

do. They permit operators to drill wells on a minimum of 40 acres, but they do not "establish"

40 acre units.

        Unless words are specifically defined in oil and gas leases, Texas courts give those words

their "plain, ordinary, and generally accepted meaning." Heritage Resources, 939 S.W.2d at

121. The ordinary meaning of the word "establish" is "to settle, make, or fix firmly." BLACK'S

LEGAL DICTIONARY at 626 (9th ed. 2009). Similarly, an old Texas case says "established"

means "[m]ake steadfast, firm, or stable, to settle on a firm or permanent basis." Rowley v.

Braley, 286 S.W. 241,245 (Tex. Civ. App.-Amarillo 1926, writ dism'd). WEBSTER'S THIRD

NEW INTERNATIONAL UNABRIDGED DICTIONARY (1993) says "establish" means either "to make

firm or stable," or to "settle or fix after consideration by enactment or agreement." Id at 778.

Using those definitions, it is flatly incorrect for Vaquillas to argue that the Field Rules in

question "settle" or "fix firmly" that there must be only 40 acre units of acreage for gas wells.

Those Rules clearly do not. Those Rules provide nothing more than that gas wells must have a



DEFENDANT'S MOTION FOR SUMMARY JUDGMENT                                                   PAGE 11

                                                                                                  37
minimum of 40 acres, and ConocoPhilIips' retained acreage blocks of 640 acres clearly meet that

minimum limit.

       ConocoPhillips was well within its authority under the Vaquillas Leases' pooling clauses

to assign 640 acres to gas wells, and nothing in the Field Rules "established" or in any way

compelled ConocoPhilIips to reduce its units to any different size.

       In order for the Court to give Sentence (2) the meaning for which Vaquillas contends, the

Court would have to rewrite that sentence in both Vaquillas Leases to say something like: "in

case any rule adopted by the Railroad Commission of Texas or other regulating authority for any

field on this lease provides for a spacing or proration [permitting] different units of acreage per

well, then such [permitted] different units shall be held under this lease by such production, in

lieu of the ... 640-acre units above mentioned." But this Court may not rewrite the Vaquillas

Leases in the guise of interpreting them. E.g., EOG Resources, Inc. v. Killam Oil Co., Ltd., 239

S.W.3d 293, 300 (Tex. App.-San Antonio 2007, pet. denied).              And that is precisely the

interpretation the Supreme Court rejected in Jones. 7 "Prescribe" does not mean "permit," and

"establish" does not mean "permit."

       B.      The Presumption Against a "Limitation on the Grant."

       For the reasons explained above, there is no room for doubt about the proper meaning of

Sentence (2). As explained above, "establish" does not mean "permit." Indeed, "establish"

means "to settle, make, or fix firmly," which is a far cry from "permit" or "allow." But even if

there were some possible doubt or ambiguity in Paragraph 18, the Court would be required to

interpret Paragraph 18 as ConocoPhillips contends because of the long-standing, very strong,


        7The Supreme Court decided Jones v. Killingsworth in 1965, several years before either
of the Vaquillas Leases was executed. With knowledge of the Court's interpretation in Jones,
there can be little doubt that if these parties intended for Sentence (2) to apply when the Railroad
Commission merely permitted smaller units, they would have said so.
DEFENDANT'S MOTION FOR SUMMARY JUDGMENT                                                   PAGE 12

                                                                                                  38
rule in Texas law that "the language used by the parties to an oil and gas lease will not be held to

impose a special limitation on the grant unless it is clear and precise and so unequivocal that it

can reasonably be given no other meaning." Rogers v. Ricane Enterprises, Inc., 773 S.W.2d 76,

79 (Tex. 1989). Accord, Anadarko Petroleum Corp. v. Thompson, 94 S.W.3d 550, 554 (Tex.

2002); Fox v. Thoreson, 398 S.W.2d 88, 92 (Tex. 1966); Knight v. Chicago Corp., 188 S.W.2d

564, 566 (Tex. 1945).

       VaquiIIas wants the Court to interpret Sentence (2) of Paragraph 18 as a limitation on the

lessors' grant to ConocoPhiIIips of a fee simple determinable in the mineral estate in and under

all land described in the VaquiIIas Leases. Although ConocoPhillips disagrees, VaquiIIas even

describes Paragraph 18 as an automatic, self-executing limitation on VaquiIIas' grant to

ConocoPhiIIips. Paragraph 11 of Plaintiffs Original Petition alleges: "Under Paragraph 18 of

both oil and gas leases, un-earned acreage reverted to Vaquillas 90 days after Conoco ceased

drilling wells under the continuous drilling clause." VaquilIas even describes the additional

acreage it contends ConocoPhillips must release as the "Reverted Minerals."              (Plaintiffs

Original Petition   ~   14). Accordingly, VaquiIIas wants the Court to interpret Sentence (2) to

result in ConocoPhilIips' loss of an additional thousands of acres of leasehold estate, i.e.,

VaquiIIas seeks a ruling from this Court that ConocoPhillips forfeited the thousands of acres

VaquiIIas calls the "Reverted Minerals," which are those acres included within the 640-acre

"Retained Units" that ConocoPhillips retained when it executed releases to Vaquillas under

Paragraph 18, but would not be within the only 40-acre blocks Vaquillas claims Sentence (2)

allowed ConocoPhillips to retain.

       When the word "establish" in Sentence (2) is given its proper, ordinary meaning,

Vaquillas' interpretation of Sentence (2) is not a permissible--or even reasonable--



DEFENDANT'S MOTION FOR SUMMARY JUDGMENT                                                   PAGE 13

                                                                                                  39
interpretation. That is especially true in view of the Texas Supreme Court's strong presumption

against construing lease provisions as limitations on the grant, which is what Vaquillas contends

Sentence (2) of Paragraph 18 is. Vaquillas' interpretation should be rejected as a matter oflaw.

                         V.       THE SUMMARY JUDGMENT RECORD

        The summary judgment record that ConocoPhillips places before the Court consists of:

        1.       The Declaration of Dana C. Huebner, attached as Tab I, which authenticates

copies of the two Leases and the Partial Releases of Oil and Gas Leases that ConocoPhillips has

already filed of record releasing acreage from the two Leases, but retaining 640-acre blocks of

acreage around producing gas wells.

        2.       The Field Rules for the Vaquillas Ranch (Lobo Cons.) Field, Webb County,

Texas, as amended, attached at Tab 2.

        3.       ConocoPhillips relies on Plaintiffs Original Petition to show what Plaintiff

contends in this case and for certain admissions therein that demonstrate that certain facts are

undisputed. ConocoPhillips has generally denied the allegations in Plaintiffs Original Petition.

If this Motion for Summary Judgment is denied, ConocoPhillips reserves all rights to contest the

allegations in the Petition.

                                   VI.   PRAYER FOR RELIEF

        Defendant ConocoPhillips Company prays that this Motion for Summary Judgment will

be granted and that final judgment be entered that Plaintiff Vaquillas Unproven Minerals, Ltd.,

take nothing by this action. ConocoPhillips also prays for recovery of its costs and for all other

relief to which it is entitled.




DEFENDANT'S MOTION FOR SUMMARY JUDGMENT                                                  PAGE 14

                                                                                                   40
                                 CERTIFICATE OF SERVICE

        I hereby certify that a true and correct copy of the foregoing Defendant's Motion for
Summary Judgment was served via email on the following counsel of record for Plaintiff as
stated on this 30th day of July 2014:

Gregg Owens                                     Raul Leal
Email: gregg.owens@haysowens.com                Raul Leal Incorporated
Robert G. Hargrove                              5810 San Bernardo, Suite 390
Email: rob.hargrove@haysowens.com               Laredo, Texas 78041
Hays & Owens L.L.P.                             Tel:    956.727.0039
807 Brazos Street, Suite 500                    Fax:    956.727.0369
Austin, Texas 7870 I                            Email: rleal@rl-Iawfirm.com
Tel:    512.472.3993
Fax:    512.472.3883

Michael Jung                                    Armando X. Lopez
Strasburger & Price, LLP                        1510 Calle Del Norte, Suite 16
90 I Main Street, Suite 4400                    Laredo, Texas 78041
Dallas, Texas 75202-3794                        Tel: (956) 726-0722
Tel:    214.651.4724                            Fax: (956) 726-6049
Fax:    214.651.4330 (main)                     mandox@rio.bravo.net
Fax:    214.659.4022 (direct)
Email: michael.jung@strasburger.com

Counsel for Vaquillas Unproven Minerals, Ltd.




DEFENDANT'S MOTION FOR SUMMARY JUDGMENT                                             PAGE 16

                                                                                           41
Dated: July 30, 2014         Respectfully submitted,


                                7n~~c'7
                             Michael powell
                              State Bar No. 16204400
                             Email: mpowell@lockelord.com
                             Elizabeth L. Tiblets
                              State Bar No. 24066194
                             Email: etiblets@lockelord.com
                             LOCKE LORD LLP
                             2200 Ross Avenue, Suite 2200
                             Dallas, Texas 75201-6776
                             Tel: 214-740-8520
                             Fax: 214-740-8800

                             Adolfo Campero
                              State Bar No. 00793454
                             CAMPERO & ASSOCIATES, P.C.
                             315 Calle Del Norte, Suite 207
                             Laredo, Texas 78041
                             Tel:   956-796-0330
                             Fax: 956-796-0399
                             Email: acampero@camperolaw.com

                             ATTORNEYS FOR DEFENDANT
                             CONOCOPHILLIPS COMPANY




DEFENDANT'S MOTION FOR SUMMARY JUDGMENT                       PAGE 15

                                                                   42
                                                                                      Filed
                                                                      9/8/20144:12:20 PM
                                                                         Esther Degollado
                                                                             District Clerk
                                                                             Webb District
                                                                     2014 CVQOOO 438 D4
                      CAUSE NO. 2014 CVQOOO 438 D4

VAQUILLAS UNPROVEN MINERALS,          §   IN THE DISTRICT COURT OF
LTD.,                                 §
Plaintiff,                            §
                                      §
v.                                    §   WEBB COUNTY, TEXAS
                                      §
CONOCOPHILLIPS COMPANY,               §
Defendant                             §   406th JUDICIAL DISTRICT




                   PLAINTIFF'S CROSS-MOTION FOR
                  PARTIAL SUMMARY JUDGMENT AND
                     RESPONSE TO DEFENDANT'S
                  MOTION FOR SUMMARY JUDGMENT




PLAINTIFF'S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND
RESPONSE TO DEFENDANT'SMOTJON FOR SUMMARY JUDGMENT                  PAGEl
                                                                        200
                                                     TABLE OF CONTENTS

I.         SUMMARY ......................................................................................................................... 3

II.        SUMMARY JUDGMENT STANDARD .......................................................................... 6

III.       BACKGROUND ................................................................................................................. 7

     A. The purpose of an oil and gas lease, as well as a retained acreage clause, is to develop
     property to produce minerals ................................................................................................... 7
     B.     Spacing, density, and proration units .............................................................................. 8
     C. The Leases contain a retained acreage clause limiting the amount of acreage Conoco
     was allowed to retain for each well........................................................................................ 10
     D. The Railroad Commission adopted spacing rules for the Vaquillas Ranch (Lobo
     Cons.) Field .............................................................................................................................. 12
IV.        ARGUMENT AND AUTHORITIES ............................................................................. 13

     A. Under the plain language of the Leases, Conoco is entitled to retain no more than the
     40-acre units per well established by the Railroad Commission ........................................ 13
     B. Conoco's contention that the field rules for the Vaquillas Ranch (Lobo Cons.) field
     do not establish 40-acre units requires the Court to disregard or to add words to the
     Leases ........................................................................................................................................ 16
     C. Jones v. Killingsworth, cited by Conoco, supports Vaquillas's position that the field
     rules "establish" or "prescribe" 40-acre units, and operators are only "permitted" to
     form larger units ...................................................................................................................... 19
     D. Conoco's interpretation ignores the inherent role of drilling units as specifying the
     minimum acreage required to drill wells, and thereby renders the word "spacing" in
     Paragraph 18's agreed exception meaningless ..................................................................... 22
     E. Conoco's argument regarding a presumption against a "limitation on the grant" is
     not relevant to the question of whether Conoco is obligated to execute a formal release of
     the Reverted Minerals. Further, the presumption does not apply in the context of
     Paragraph 18's clear condition .............................................................................................. 24
V.         CONCLUSION ................................................................................................................. 25

VI.        SUMMARY JUDGMENT EVIDENCE ....................... ....................... ........................... 26

VI.        PRAYER ........................................................................................................................... 28




PLAINTIFFS CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND
RESPONSE TO DEFENDANT'S MOTION FOR SUMMARY JUDGMENT                                                                                        PAGE 2
                                                                                                                                                  201
                              CAUSE NO. 2014 CVQOOO 438 D4

VAQUILLAS UNPROVEN MINERALS,                       §   IN THE DISTRICT COURT OF
LTD.,                                              §
Plaintiff,                                         §
                                                   §
v.                                                 §   WEBB COUNTY, TEXAS
                                                   §
CONOCOPHILLIPS COMPANY,                            §
Defendant                                          §   406th JUDICIAL DISTRICT

PLAINTIFF'S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND
  RESPONSE TO DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

TO THE HONORABLE JUDGE OF SAID COURT:

          Plaintiff Vaquillas Unproven Minerals, Ltd. ("Vaquillas") moves for partial

summary judgment against Defendant ConocoPhillips Company ("Conoco"), and urges

the denial of Cono co's motion for summary judgment, and in support respectfully shows:

     I.   SUMMARY

          Vaquillas seeks a partial summary judgment holding that Conoco retains only 40

acres for each producing and shut-in gas well drilled by Conoco on the oil and gas leases

that are the subject of this lawsuit. Vaquillas also seeks denial of Conoco's motion for

summary judgment.

          The central issue in this case is the legal interpretation of a retained acreage clause

that is identical in two oil and gas leases between Vaquillas, as lessor, and Conoco, as

lessee. Under both leases, Conoco was entitled to retain acreage for each producing or

shut-in gas well capable of producing in paying quantities upon the expiration of its

continuous drilling program. For each gas well Conoco drilled, it was entitled to retain

acreage equal to the size of units established by the spacing provided in the rules adopted

PLAINTIFF'S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND
RESPONSE TO DEFENDANT'SMOTJON FOR SUMMARY JUDGMENT                                       PAGE 3
                                                                                              202
by the Railroad Commission for the field of production, here 40 acres per well. Had the

Commission not adopted such rules, Conoco would have been entitled to retain 640 acres

per gas well.     But that is not the case.       Conoco did not drill the additional wells to

develop the leasehold acreage to the density provided by the Railroad Commission rules.

Accordingly, the leases terminated as to all but the 40 acres retained for each well, and

the remaining acreage reverted to Vaquillas.

        The key language is in Paragraph 18 of both Leases:

        ... Lessee covenants and agrees to execute and deliver to Lessor a written
        release of any and all portions of this lease which have not been drilled to a
        density of at least 40 acres for each producing oil well and 640 acres for
        each producing or shut-in gas well, except that in case any rule adopted
        by the Railroad Commission of Texas ... for any field on this lease
        provides for a spacing or proration establishing different units of
        acreage per well, then such established different units shall be held
        under this lease by such production, in lieu of the 40 and 640-acre units
        above mentioned ...

(Emphasis added).l

        Some 33,363 acres were leased to Conoco.               As reflected in Conoco's written

releases, 208 wells were drilled under the leases prior to the expiration of the continuous
                   2
drilling program       As it was entitled to retain 40 acres for each well, Conoco was entitled

to retain a total of up to 8,320 acres (208 x 40)3 The remaining 25,043 acres reverted to

Vaquillas (the "Reverted Minerals").




126,622.79 Acre Lease at ~ 18 (Ex. B-2 to Smith Aff.); 6,740 Acre Lease at ~ 18 (Ex. B-3 to Smith Aff.).
2 Conoco's Motion for Summary Judgment ("Conoco MSJ") at Exs. C and D.
3 This, of course, is assuming that each of the 208 wells is producing or capable of producing in paying

quantities. That issue is not before the Court in this motion.

PLAINTIFF'S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND
RESPONSE TO DEFENDANT'SMOTJON FOR SUMMARY JUDGMENT                                             PAGE 4
                                                                                                     203
        Summary judgment evidence establishes the following as a matter of law or

uncontested fact:

        •       The Railroad Commission of Texas adopted special field rules for the
                                                   4
                Vaquillas Ranch (Lobo Cons.) Field

        •       Those field rules apply to the wells drilled by Conoco under the two
                                 5
                Vaquillas Leases

        •       The spacing provided for in the special field rules established units of
                acreage for gas wells. 6

                                                                  7
        •       Those units were different than 640 acres.

        •       The units established were 40 acres per well. 8

        •       Conoco ended its continuous drilling program on or about June 21, 2012
                (90 days after the completion date of Conoco's Vaquillas Ranch A-7 No.
                249 Well (API No. 42-479-41635), which is the last well drilled under the
                continuous drilling program)9

        •       The leases terminated for all but 40 acres for each producing or shut-in gas
                well capable of producing in paying quantities on June 21, 2012 (90 days
                after completion of the above-referenced well), and the acreage thereby
                reverted to Vaquillas lO

        •       Conoco was required to execute a formal release for the Reverted Minerals,
                but has not done so as to most of the acreage that comprises the Reverted
                  ·
                Mmera  Is. 11

        Conoco acknowledges that it was not entitled to retain all the leasehold acreage,

but claims that it is entitled to retain significantly more than 40 acres per well, for a total


4Ex. A-I to Ringuet Aff., accord Conoeo MSJ at 4.
sId.
616 TAC § 3.38(b)(2)(A) (Ex. A-2 to Ringuet Aff.).
7Id.
sid.
9 Conoeo's Resp. to Interrogs. Nos. 16 & 17 at p. 8. (Ex. A-3 to Ringuet Aff.).
10 Ex. B-2 & B-3 to Smith Aff.
11 Ex. B-2 & B-3 to Smith Aff.; Exs. C & D to Conoeo Motion.



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                                                                                            204
                        12
of 23,671.63 acres.          This stands in sharp contrast to the 8,320 acres retainable on the

basis of 40 acres per well. Conoco thus wrongfully claims title to 15,351.63 acres of the

Reverted Minerals. Conoco's wrongful claim of title to these disputed minerals forced

Vaquillas to file this case.

          In support of its argument that it is entitled to retain 640 acres per well, Conoco

argues that the Commission did not "establish" 40-acre units because the units

established by the special field rule for the Vaquillas Ranch (Lobo Cons.) Field only set

out the minimum amount of acreage for drilling units required to drill a well. Conoco

also suggests that the 40-acre units established by the special field rules for the Vaquillas

Ranch (Lobo Cons.) Field do not trigger the exception set forth in Paragraph 18 because

they are not different than the 40-acre units established by the statewide rules.         Each

contention misses the point and requires that certain language be ignored and that other

words be added to the Leases, contrary to accepted rules of contract instruction.

 II.      SUMMARY JUDGMENT STANDARD

          This is a "traditional" motion for summary judgment, filed pursuant to Rule

166a(c), as to certain of Va quill as's claims against Conoco. "[T]here is no genuine issue

as to any material fact and [Vaquillas is] entitled to judgment as a matter of law on the

issues expressly set out in the motion.,,13




12   Conoeo MSJ at Exs. C and D.
13   TEX. R. CIV. P. 166a(e).

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                                                                                            205
III.      BACKGROUND

       A. The purpose of an oil and gas lease, as well as a retained acreage clause, is to
          develop property to produce minerals.

          An oil and gas lease is, at its core, a bargain struck by a landowner/lessor to have

developed the hydrocarbons beneath his land with another who has the experience and

capability to do so by undertaking the complex process of drilling and producing those

hydrocarbons.14 The landowner/lessor wants the mineral value of the land developed; the

oil and gas company/lessee wants the opportunity to make a profit. In order to have their

minerals developed, landowners/lessors generally must transfer the rights to explore,

drill, produce, and market the minerals to an oil and gas company with the skill and
                                                15
financial ability to do so, such as Conoco.          The oil and gas lease is the instrument that is

almost invariably used to transfer these rights to the oil and gas company. 16 In return for

the risk assumed by the oil and gas company, it receives the lion's share of the profit

derived from production and a generous time period (typically so long as production is

obtained and maintained in paying quantities) within which to continue operations on the

lease.

          Absent an express limitation in the lease, a lessee's rights under an oil and gas

lease may continue, as to the entire property, for an indefinitely long period of time. This

is the case because leases are typically structured so that if oil or gas in paying quantities

is found during the lease's primary term, the oil and gas company's rights to operate will



14 1 Ernest E. Smith and Jacqueline Lang Weaver, Texas Law of Oil and Gas § 4.1(B) (2014).
15 ld.
16 ld.



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                                                                                                 206
continue for so long thereafter as any well is producing oil or gas in paying quantities on

the leased property. 17

        Oil and gas leases frequently contain a retained acreage clause that provides

operators with the choice and flexibility to develop the acreage to a specified density, or

to not do so and have acreage revert to the landowners/lessors. The retained acreage

clause also helps the landowners/lessors ensure that his property is fully developed within

a reasonable period of time, by allowing development of reverted acreage by another

lessee. IS In specifying the density for development, the clause may provide for reference
                                 19
to Railroad Commission rules.

     B. Spacing, density, and proration units.

        The Railroad Commission is responsible for preventing waste of the state's oil and

gas natural resources and protecting the correlative rights of mineral owners, and it
                                                                                      20
adopts statewide rules and special field rules as means to accomplish this end             Special

field rules for a given field (reservoir) are commonly referred to simply as "field rules."

        Field rules typically address, among other things, spacing requirements. The

Railroad Commission's spacing requirements typically establish the minimum distance a

well can be located to the nearest lease line, property line, or subdivision line, and to
                                                                         21
other wells on the same lease completed in the same reservoir                 Spacing in effect



17 ld.
18  1 Smith & Weaver § 5.2(B)(3).
19 1 Smith & Weaver § 5.2(B)(3) (citing ConocoPhillips Co. v. Ramirez, 2006 WL 1748584 (Tex. App.-

San Antonio 2006, no pet.) (mem. op.).
20 R.R. Com'n of Texas v. WED Oil & Gas Co., 104 S.W.3d 69 (Tex. 2003).
21 16 TAC § 3.37.



PLAINTIFF'S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND
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                                                                                               207
mandates that a certain number of acres be allotted to a given well, and is intertwined

with "density."

        The Railroad Commission's "density" requirements govern the number of wells
                                                                             22
that may be drilled on a given amount of acreage in a reservoir                   The density

requirement does so by prescribing the minimum required size of the "drilling unit" - the

minimum number of acres the operator must have to drill a well. 23 This is the essential

nature of the drilling unit. The "drilling unit" is on occasion also referred to as a "spacing

unit" or a "development unit.,,24          Such units are by their nature minimum-sized units,

because they prescribe the minimum acreage required to obtain a Railroad Commission

permit to drill a well. An operator may always drill a well with more acreage than the

mmlmum.

        The Railroad Commission also regulates production levels to prevent waste and

protect correlative rights. One way this is done is through specification of "prescribed"

"proration units" for a field. These units are often confused with drilling units, though

they are very different. A prescribed proration unit does not address the number of acres
                              25
necessary to drill a we1l          It simply specifies the maximum amount of acres that an

operator may assign to a well as the proration unit for that well. In tum, the Commission

uses the well proration units designated by operators for the purpose of assigning




2216 TAC § 3.38. (Ex. A-2 to Ringuet Aff.)
23 16 TAC § 3.38(a)(2), (d)(l). (Ex. A-2 to Ringuet Aff.)
242 Smith & Weaver § 1O.1(B)(2).
25 See 2 Smith & Weaver § 1O.1(B)(2).



PLAINTIFF'S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND
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                                                                                           208
                                                                                                         26
production allowables that allocate total field production among individual wells

Prescribed proration units are by their nature maximum-sized units, because they

prescribe the maximum acreage that an operator may assign to a well as a proration unit

for production allowable purposes. An operator may always assign fewer acres to its

proration unit than the maximum.

     C. The Leases contain a retained acreage clause limiting the amount of acreage
        Conoco was allowed to retain for each well.
                                                                                                 27
        The properties that are the subject of this lawsuit are a 26,622.79-acre tract                and a

6,740-acre tract,28 both located in Webb County, Texas. Vaquillas is the successor-in-

interest to the original lessor(s) under both the 26,622.79-acre lease and the 6,740-acre

lease (the "Leases,,)29        Defendant Conoco is a successor-in-interest to the original

lessee(s).

        The Leases have been amended and supplemented a number of times. On or about

                                                                                                  30
November 1, 1987, the 26,622.79-acre lease was amended to include Paragraph 18                          On

the same date, the 6,740-acre lease was entered into, containing the same Paragraph 18.

This paragraph provides for the release of acreage at the end of the continuous drilling


26
   16 TAC § 3.38(a)(3). (Ex. A-2 to Ringuet Aff.)
27
   26,622.79 acres of land, more or less, situated in Webb County, Texas more fully described in the Oil,
Gas and Mineral Lease dated June 15, 1974 (as amended) between Vaquillas Ranch Company, Ltd. et aI.,
as Lessor, and Conoco Inc., as Lessee, a copy of which is recorded in Volume 460, Pages 324-330 of the
Webb County Deed Records (hereinafter the "26,622.79-acre lease"). (Ex. B-2 to Smith Aff.).
28
   6,740 acres ofland, more or less, situated in Webb County, Texas more fully described in the Oil, Gas
and Mineral Lease, dated effective November 1, 1987, and entered into by and between Vaquillas Ranch
Company, Ltd., Vaquillas Unproven Mineral Trust, and Vaquillas Proven Mineral Trust, as Lessor, and
Conoco Inc., as Lessee, a Memorandum of which is recorded in Volume 1303, Pages 886 et seq. of the
Webb County Real Property Records (hereinafter the "6,740-acre lease"). (Ex. B-3 to Smith Aff.).
29 See Ex. B Smith Aff.

30 The retained acreage clause found in Paragraph 18 was also in the original 26,622.79-acre lease. In the

original 1974 lease, the clause was found in section 12(g). (Ex. B-2 to VAQ Aff.).

PLAINTIFF'S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND
RESPONSE TO DEFENDANT'SMOTJON FOR SUMMARY JUDGMENT                                              PAGE 10
                                                                                                        209
program. In order to be engaged in a continuous drilling program, after the end of the

primary term, Conoco must commence the drilling of a new well within 90 days after the

completion of each well.            At the end of the continuous drilling program (i.e., when

Conoco elects to cease commencement of the drilling of new wells within the 90 day

period(s», the Leases are maintained only as to an amount of acreage for each producing

or shut-in gas well that is capable of producing in paying quantities. The Leases go on to

require Conoco to execute and deliver to Vaquillas a written release of any acreage not

retained.

          Paragraph 18 states in pertinent part:

         ... Lessee covenants and agrees to execute and deliver to Lessor a written
         release of any and all portions of this lease which have not been drilled to a
         density of at least 40 acres for each producing oil well and 640 acres for
         each producing or shut-in gas well, except that in case any rule adopted by
         the Railroad Commission of Texas or other regulating authority for any field
         on this lease provides for a spacing 2.!: proration establishing different
         units of acreage per well, then such established different units shall be
         held under this lease by such production, in lieu of the 40 and 640-acre
         units above mentioned.

(Emphasis added)3l

          Conoco and Vaquillas thus agreed to an exception to Conoco's otherwise-existing

right to retain 640 acres for each gas well. If the Commission adopts a rule for the field

providing for spacing or proration that establishes units of acreage different than 40 acres

[oil wells] or 640 acres [gas wells], Paragraph 18's "except" provision is triggered and

Conoco therefore retains only the amount of acreage per well established by the spacing

provided in the Railroad Commission's rules for the field. The expressed intent of the

31   Exs. B-2 & B-3 to Smith Aff. at ~ 18.

PLAINTIFF'S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND
RESPONSE TO DEFENDANT'SMOTJON FOR SUMMARY JUDGMENT                                   PAGE 11
                                                                                          210
parties' agreed exception is clear. In lieu of the default 640 acres, the units established by

the Railroad Commission's rules for the field were to determine the amount of acreage

that would be retained for each well.

    D. The Railroad Commission adopted spacing rules for the Vaquillas
       Ranch (Lobo Cons.) Field.

        The Railroad Commission of Texas adopted spacing rules in its special field rules

for the Vaquillas Ranch (Lobo Cons.) Field 32 Each of the wells drilled under the Leases

is in the Vaquillas Ranch (Lobo Cons.) Field 33

        After the November I, 1987, amendment to the Leases, at Conoco's request, the

Railroad Commission adopted rules specifically for the Vaquillas Ranch (Lobo Cons.)

Field. These field rules, which were initially adopted on February 24, 1998, contained

spacing rules providing that no well could be drilled nearer than 467 feet to any property

line, lease line, or subdivision line (the "lease-line spacing" requirement), and that no

well could be drilled nearer than 1,200 feet from any other well (the "between-well

spacing" requirement)34 Under such rules, the established spacing unit (i.e., drilling

unit) was a minimum of 40 acres per well.

        On or about November 2, 2010, and agam at Conoco's request, the Railroad

Commission held a field rule hearing for the Vaquillas Ranch (Lobo Cons.) Field.

Following the hearing, the Commission amended the rules for the field, leaving the 40-

32 Conoco MSJ at 4.
331d.
34 The 467 foot lease-line spacing and 1,200 foot between-well spacing requirements happen to be

identical to the requirements set out in Statewide Rule 37, which would apply in the absence of field
rules. The Commission, through its adoption of special field rules for the field, considered the evidence
presented and in its expertise concluded that this was the appropriate spacing rule for development in this
particular field. (Ex. A-4 to Ringuet Aff.J.

PLAINTIFF'S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND
RESPONSE TO DEFENDANT'SMOTJON FOR SUMMARY JUDGMENT                                               PAGE 12
                                                                                                       211
                                          35
acre drilling unit requirement intact          The 1998 field rules, as amended, remain in effect

today.

         The amended field rules continue to provide for lease-line spacing of 467 feet, and

between-well spacing of 1,200 feet, with one exception.                 As has become common for

certain types of fields, in the 2010 amendments to the field rules, the Commission

eliminated the minimum between-well spacing requirement for wells located at least 660

feet from the nearest property line, lease line, or subdivision line. This gave the operators

                                                          36
in the field greater flexibility in locating wells.            The 40-acre established drilling unit

                                                                          37
requirement continued to apply for all wells drilled in the field

IV.      ARGUMENT AND AUTHORITIES

      A. Under the plain language of the Leases, Conoco is entitled to retain no more
         than the 40-acre units per well established by the Railroad Commission.

         Paragraph 18 of the Leases unambiguously provides that when the Railroad

Commission adopts field rules that provide for spacing "establishing different units of



35 Ex. A-5 to Ringuet Aff.
36 Conoco sought to eliminate the between-well spacing requirement for interior wells because the area is

highly faulted. Because of the complexity of the geology, the difficulty of developing the many separate
fault blocks in the field, and the desire to ensure all the "sweet spots" were produced, the between-well
spacing requirement for interior wells was eliminated. See Ex. A-5 to Ringuet Aff.
37 Importantly, while the field rules were amended in 2010 to remove the between-well spacing

requirement for interior wells, the amendments did not affect the density requirement for any wells drilled
on the Subject Property. As discussed above, the purpose of the elimination of the between-well spacing
requirement for interior wells was to promote production in a tight formation and deal with structural
anomalies. The effect was not to amend or remove the density requirement. The Commission did not
amend or eliminate the acreage requirement for drilling wells, including interior wells, in the field.
Where field rules are amended, but the amendments do not expressly amend, eliminate, or address an
already-existing portion of the field rule, that section of the rule is unaffected by the amendments. After
the 2010 amendments, the Commission continued to require standard drilling units of 40 acres per well.
See, e.g., "Field Rules Display" for the field on the Commission's website. (Ex. A-I to Ringuet Aff.J.
Further, the 40-acre standard drilling unit requirement is consistent with Conoco's W-l drilling permits.
~ W-l for API No. 42-479-41635. (Ex. A-6 to Ringuet Aff.J.


PLAINTIFF'S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND
RESPONSE TO DEFENDANT'SMOTJON FOR SUMMARY JUDGMENT                                               PAGE 13
                                                                                                       212
acreage per well, then such established different units shall be held under this lease by

such production, in lieu of the 40 [for oil wells land 640-acre [for gas wells1 units above

mentioned.,,38 The Railroad Commission did adopt field rules providing for spacing that

established 40-acre units for the Vaquillas Ranch (Lobo Cons.) Field. Conoco, therefore,

may retain no more than 40 acres per gas well.

          In Paragraph 18, the parties agreed to an exception to Conoco's otherwise existing

right to retain 640 acres for gas wells.            The exception is triggered by the Railroad

Commission's adoption of spacing or proration establishing "... different units of

acreage per well ... " (the "agreed exception"). Thus, the parties clearly contemplated

that spacing rules (as well as proration rules) trigger the agreed exception, if the units of

acreage thereby established are different than 640 acres for gas wells. When triggered,

the agreed exception allowed Conoco to retain only those units of acreage per well

established by the spacing provided in the Railroad Commission rules, thus reducing the

acreage Conoco could retain. This is precisely what occurred here. It is undisputed that

the Railroad Commission, through its special field rules, provided spacing rules for the
                                             39
Vaquillas Ranch (Lobo Cons.) Field                As discussed below, these spacing rules in tum

establish 40-acre units per well.

          In situations such as this one, in which the Commission adopts rules for a field

providing for spacing, but where the field rules do not explicitly set out the required

density (minimum acres required to drill a well), Railroad Commission Rule 38 operates



38   Exs. B-2 & B-3 to Smith Aff. at ~ 18.
39   Conoeo MSJ at 4.

PLAINTIFF'S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND
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                                                                                             213
to prescribe the units of acreage established by the spacing provided in the rules for the

field. 16 TEX. ADMIN. CODE § 3.38 ("Rule 38")40 Rule 38 provides in pertinent part:

           The standard drilling unit for all oil, gas, and geothermal resource fields
           wherein only spacing rules... are applicable is hereby prescribed to be
           the following.

                                    Spacing Rule        Acreage
                                                      Requirement
                                (1) 150 - 300              2

                                (2) 200 - 400               4

                                (3) 330 - 660              10

                                (4) 330 - 933              20

                                (5) 467 - 933              20

                                (6) 467 - 1200             40

                                (7) 660 - 1320             40


16 TEX. ADMIN. CODE § 3.38(b)(2)(A) (emphasis added)41

           The Commission's special field rules provide a spacing rule - 467 feet lease-line

spacing and 1,200 feet between-well spacing - for the Vaquillas Ranch (Lobo Cons.)

Field. As is contemplated by Rule 38, these special field rules did not contain a density

rule. Nevertheless, as shown on the above table, the special field rules' designation of




40   Ex. A -2 to Ringuet Aff.
41   Ex. A-2 to Ringuet Aff.

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RESPONSE TO DEFENDANT'SMOTJON FOR SUMMARY JUDGMENT                                  PAGE 15
                                                                                         214
spacing operated to prescribe and establish 40-acre drilling units for each oil or gas well

                                               42
in the Vaquillas Ranch (Lobo C.) Field

        The agreed exception was triggered by the adoption of the Vaquillas Ranch (Lobo

Cons.) special field rules, which included spacing that established 40 acre units. Conoco

was therefore entitled to retain no more than 40 acres for each of the gas wells it drilled

on the Subject Property. Consistent with the fundamental purpose of the oil and gas lease

- to develop and produce the minerals - this allows Conoco to continue to produce the

minerals from the wells that it has drilled on the acreage that it has developed.                        The

remaining undeveloped acreage reverts to Vaquillas, allowing Vaquillas or another party

to develop the undeveloped reverted acreage and produce the minerals underlying that

acreage.

     B. Conoco's contention that the field rules for the Vaquillas Ranch (Lobo Cons.)
        field do not establish 40-acre units requires the Court to disregard or to add
        words to the Leases.

        Conoco argues that the established 40 acre spacing/drilling units are not

"established" because they constitute a mmlmum (with no maximum) acreage

requirement for drilling each well. In advancing this argument, Conoco would have the

Court ignore well-settled rules of contract construction in order to fulfill Conoco's quest




42 Prior to 1955, the Commission relied upon spacing rules alone to govern the density of drilling.
Observing that on tracts of irregular size and shape, wells could be drilled with less acreage per well (i.e.,
to a greater density), as compared to regularly-shaped tracts, i.e., square tracts, in 1955, the Commission
first adopted the chart found in Rule 38. The chart was adopted to prescribe the required minimum
number of acres per well based on the applicable spacing to remedy this "disadvantage" for regularly-
shaped tracts. The chart remains the same to this date. (Exs. A-2, A-7 of Ringuet Aff.). The chart in Rule
38 effectively serves as a backstop or gap-filler when only spacing is provided for in the special field
rules.

PLAINTIFF'S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND
RESPONSE TO DEFENDANT'SMOTJON FOR SUMMARY JUDGMENT                                                 PAGE 16
                                                                                                          215
to retain 640 acres for each well drilled under the Leases 43 Conoco's reading is at odds

with the plain language of the Leases.

          Paragraph 18's agreed exception to Conoco's otherwise existing right to retain 640

acres for gas wells is triggered by the Railroad Commission's field rules providing for

spacing or proration establishing "... different units of acreage per well .... " It does not

use the words establishing " ... maximum units of acreage per well .... " The units are no

less "established" or "prescribed" because they operate as minimums. Acceptance of

Conoco's argument that because the 40 acre units are only minimums, Paragraph 18's

agreed exception is not triggered, would require that the court add words to the language

chosen by the parties, contrary to accepted rules of contract interpretation. 44

          To the extent that Conoco means to imply that because the 40-acre units

established by the spacmg provided in the field rules for the Vaquillas Ranch (Lobo

Cons.) Field are the same as the statewide rules (which apply if field rules have not been

established), the exception provision of Paragraph 18 is not triggered, Conoco is
.            45
mcorrect.

          Where the language of Paragraph 18 refers to the Railroad Commission's adoption

of "spacing ... establishing ... different units of acreage per well ... ," the word

"different" refers back to the 40 acres for each oil well and 640 acres for each producing




43   See Am. Mfrs. Mut.lns. Co. v. Schaefer, 124 S.W.3d 154, 162 (Tex. 2003) (courts "may neither rewrite
the parties' contract nor add to its language," but rather, must interpret unambiguous contract language as
written).
441d.
45   Conoco MSJ at 8.

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RESPONSE TO DEFENDANT'SMOTJON FOR SUMMARY JUDGMENT                                               PAGE 17
                                                                                                        216
or shut-in gas well earlier in the sentence 46 The word "different" here does not, as

Conoco suggests, mean different from the "statewide rules" for well density; had it meant

that, the parties would have referenced the statewide rules 47 Conoco's effort to add

words to the contract must again be rejected.

       Conoco also appears to take the position that the reference to "units of acreage per

well" refers only to "proration units" and does not include "drilling units.,,48 The parties

chose the broader term "units of acreage," and specified that spacing rules or proration

rules could trigger the exception.        Thus the provision cannot be limited to proration

units, but must include both drilling units and proration units. This is consistent with the

language of Paragraph 18' s agreed exception referring to " ... spacing or proration

establishing different units of acreage per well."

       In addition, Conoco references the pooling clause in the Leases 49                 Under the

Leases, however, the pooling clause has nothing to do with or effect on the acreage

limitation in the retained acreage clause.        Conoco's statement that the pooling clause

somehow establishes the "normal and completely authorized block of acreage" under the

Leases would render meaningless the agreed exception 50




46 Indeed, Conoco acknowledges this on page 11 of its Motion for Summary Judgment, when it states that
before Paragraph 18's exception is triggered, "the Railroad Commission must 'establish' units for gas
wells of a different size than 640 acres."
47 Notably, there is no reference to statewide rules in Paragraph 18.
481d. at 4.
49 Conoco MSJ at 6.

50 Conoco MSJ at 7.



PLAINTIFF'S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND
RESPONSE TO DEFENDANT'SMOTJON FOR SUMMARY JUDGMENT                                          PAGE 18
                                                                                                   217
         The Commission has, through the spacing rules adopted for the field, established a

40-acre spacing/drilling unit requirement. Paragraph 18's condition was thus triggered.

Conoco is entitled to retain no more than 40 acres per well.


    C. Jones v. Killingsworth, cited by Conoco, supports Vaquillas's position that the
       field rules "establish" or "prescribe" 40-acre units, and operators are only
       "permitted" to form larger units.

         Jones v. Killingsworth, 403 S.W.2d 325 (Tex. 1965), dealt with a pooling clause

and proration units prescribed by the Railroad Commission, not a retained acreage clause.

Nonetheless, the case is instructive and supports Vaquillas's position that the

Commission's field rules for the Vaquillas Ranch (Lobo Cons.) Field "establish" 40-acre

units.

         Jones involved a lessee's attempt to create a pooled unit for oil of 160 acres rather

than an 80-acre unit, which the lessor believed to be the maximum size allowed under the

pooling clause of the parties' oil and gas lease. Similar to the retained acreage clause in

this case, the pooling provision in Jones also created an exception to the default

maximum pooled unit size when a different one was prescribed by a governmental

authority.

         Units pooled for oil hereunder shall not substantially exceed 40 acres each
         plus a tolerance of 10% thereof, provided that should governmental
         authority having jurisdiction prescribe or permit the creation of units larger
         than those specified, units thereafter created may conform substantially in
         size with those prescribed by governmental regulations.

Id. at 327 (emphasis added).




PLAINTIFF'S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND
RESPONSE TO DEFENDANT'SMOTJON FOR SUMMARY JUDGMENT                                   PAGE 19
                                                                                           218
       The lessee in Jones argued that because rules adopted by the Railroad Commission

prescribed oil proration units of not less than 80 acres but merely permitted up to 160

acres for each oil unit, that by reading these rules into the lease's pooling provision the

lease would read: "the size of the units thereafter created may not be substantially less

than 80 acres nor substantially more than 160 acres. Id. at 327. The Supreme Court

disagreed with this construction, writing:

       The lessors did not consent to enlarge an oil proration unit to any size
       permitted by governmental regulations. They gave their consent to enlarge
       a unit of substantially 40 acres, but only to the extent of the size of units
       prescribed by the regulatory authority.        The fact that the Railroad
       Commission may permit a much larger unit cannot be read into the lease
       contract when, as here, the authority to create larger units is expressly
       limited to units the size prescribed by the Railroad Commission. The
       Commission prescribed a unit of 80 acres. The field rules clearly say that
       there must be a proration unit of at least 80 acres, and there may be larger
       units of not more than [160] acres. The parties obviously knew when the
       lease contract was executed that a permitted oil proration unit could
       conceivably be much larger in area than one prescribed by
       governmental authority. To say that a lessee can pool lessor's land
       with units of any size permitted by the Railroad Commission would
       defeat the intention of the parties to restrict the size of the units to a
       size prescribed by governmental authority.

Id. at 327-28 (boldface added; italics in original).

Jones stands for the proposition that when an oil and gas lease provIsIOn references

acreage prescribed by a Railroad Commission rule as a marker that will restrict or limit

the size of the units that the lessee is otherwise allowed to retain, the unit size prescribed

by the Commission rule controls over a larger-sized unit that is merely permitted or

allowed by such Commission rule.




PLAINTIFF'S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND
RESPONSE TO DEFENDANT'SMOTJON FOR SUMMARY JUDGMENT                                   PAGE 20
                                                                                           219
        Like Jones, here the Vaquillas retained acreage clause clearly contemplated a

restriction in the size of the otherwise allowed 40- or 640-acre units to the size prescribed

by Railroad Commission field rules. The parties knew when the Leases were executed

that field rules could be adopted for a field on the Vaquillas Ranch providing for spacing

that established units different than 640 acres per gas well. That is what happened. The

467 -1200 spacing in the field rules established the 40-acre drilling unit requirement.

               The standard drilling unit for all oil, gas, and geothermal resource
        fields wherein only spacing rules ... are applicable is hereby prescribed
        to be the following.

             Spacing Rule                        Acreage Requirement

             (6) 467 - 1200                              40


16 TEX. ADMIN. CODE § 3.38(b)(2)(A) (emphasis supplied).                 51   The field rules provide for

spacing establishing 40 acre units. In the Jones pooling provision, the limiting word was

"prescribed."       In the Vaquillas Leases, the word of limitation is "established."                  As

Conoco's motion correctly states, Black's Law Dictionary defines "Establish" as "To

settle, make or fix firmly; place on a permanent footing; found; create; put beyond doubt
     "                  .    ,,52
or d lspute; prove; convmce.             Black's also defines "Prescribe" with an equivalent

meaning: "Prescribe"- "To dictate, ordain, or direct; to establish authoritatively (as a

ru 1e or gUl.de l'me ) .,,53   (emphasis added).      The applicable rules for the field include



51 Ex. A-2 to Ringuet Aff.
52 Conoco MSJ at 1l.
                                        th
53 Black's Legal Directory at 1373 (10     ed. 2014). Likewise, Webster's Dictionary defines "prescribe" to
include "to establish rules, laws, or directions." Webster's II New College Dictionary at 874 (Houghton
Mifflin Company 1999).

PLAINTIFF'S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND
RESPONSE TO DEFENDANT'SMOTJON FOR SUMMARY JUDGMENT                                               PAGE 21
                                                                                                        220
spacing rules that clearly "establish" or "prescribe" 40-acre units for the Vaquillas Ranch

(Lobo Cons.) Field.

          Conoco argues that because the prescribed density rule sets out only a minimum

amount of acreage required for a drilling unit (i.e., to drill a well) rather than a fixed

acreage or the maximum acreage, that this somehow means the spacing rules provided in

the special field rules do not establish units of acreage different than 640 acres. 54 This is

incorrect.       The units are no less "prescribed" and "established" because they are

mmlmums. And, the prescribed and established 40-acre units are unarguably different

than 640-acre units. Conoco's argument tracks the argument made (and lost) by the lessee

in Jones.      That argument was rejected by the Texas Supreme Court, and it should be

rejected by this Court.

      D. Conoco's interpretation ignores the inherent role of drilling units as
         specifying the minimum acreage required to drill wells, and thereby renders
         the word "spacing" in Paragraph 18's agreed exception meaningless.

          Conoco's erroneous interpretation of Paragraph 18 also fails because it would

render Paragraph l8's "except" clause meaningless as it relates to spacing.

          The Texas Supreme Court has held that in construing an oil and gas lease, one

must "examine the entire document and consider each part with every other part so that

the effect and meaning of one part on any other part may be determined.,,55 This is

because the court presumes "that the parties to a contract intend every clause to have




54   Conoeo MSJ at 4, 8, 11-12.
55   Heritage Res., Inc. v. NationsBank, 939 S.W.2d ll8, 121 (Tex. 1996) (emphasis added).

PLAINTIFF'S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND
RESPONSE TO DEFENDANT'SMOTJON FOR SUMMARY JUDGMENT                                           PAGE 22
                                                                                                 221
some effect. ,,56 And in construing the language of a contract, the court should consider

the surrounding circumstances as part of determining whether the language can be given

a definite meaning. E.g., Sun Oil Co. (Delaware) v. Madeley, 626 S.W.2d 726, 731 (Tex.

1981).

         Conoco argues that spacing provided in the Railroad Commission's field rules do

not "establish" 40-acre units, because they "permit operators to drill wells on a minimum

of 40 acres.,,57 By their very nature, because of their purpose, the Railroad Commission's

density requirements establish only a minimum acreage requirement - they establish the
                                                                        58
minimum amount of acreage required for drilling a we1l                         Conoco's construction,

whereby the exception applies only when the Commission establishes a precise and fixed

drilling unit size or proration unit size, ignores the fact that by their nature, prescribed

drilling units are minimum requirements 59               The agreed exception of Paragraph 18,

however, unquestionably indicates that the parties contemplated that special field rules

that provide for spacing could trigger the retained acreage clause's exception, and thereby

reduce the number of acres that Conoco could otherwise retain. 60


56 Id. (emphasis added).
57 Conoco MSJ at II.
58 This, of course, is because any other requirement would lead to absurd results (e.g., an operator with a

45 acre tract being denied a drilling permit, where the established density is 40 acres) and because the
Commission's concern in establishing drilling units is to prevent waste caused by excessively dense
drilling.
59 This motion concerns drilling/spacing units, and not proration units. Conoco's reference to proration

units in footnote 4, page 5 of its Motion for Summary Judgment ignores this distinction and the lease
langnage that speaks to "spacing or proration establishing ... units." As noted above, proration units serve
an entirely different purpose than drilling units, and establish the maximum amount of acreage that an
operator may assign to a well for proration purposes.
60 It is settled law that contracts are presumed to incorporate regnlations and laws existing at the time of

execution. Amarillo Oil Co. v. Energy-Agri Products, Inc., 794 S.W.2d 20, 22-25 (Tex. 1990); Houston
Lighting & Power Co. v. R.R. Comm'n, 529 S.W.2d 763, 766 (Tex. 1975).

PLAINTIFF'S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND
RESPONSE TO DEFENDANT'SMOTJON FOR SUMMARY JUDGMENT                                               PAGE 23
                                                                                                        222
       If Conoco were correct that the Commission-established 40-acre units do not

apply because the required drilling units are always only the minimum acreage required

to drill a well, then there would be no circumstances under which the agreed "except"

provision of Paragraph 18 could apply where field rules provide for spacing alone. Thus,

Conoco's reading would render the reference to "spacing" in the parties' agreed

exception meaningless and violate the rules of construction that every provision in a

contract be given effect and that it be construed in light of the surrounding circumstances.

For this reason also, Conoco's argument fails.

   E. Conoco's argument regarding a presumption against a "limitation on the
      grant" is not relevant to the question of whether Conoco is obligated to
      execute a formal release of the Reverted l\1inerals. Further, the presumption
      does not apply in the context of Paragraph 18's clear condition.

       Whether the agreed exception constitutes a covenant or a condition is not relevant

to the issue of whether Conoco is required to execute a formal release for all acreage in

excess of 40 acres for each producing and shut-in natural gas well capable of producing

in paying quantities.

       Nonetheless, the cases cited by Conoco in support of its argument regarding a

presumption against a limitation do not apply in this case because Paragraph 18 contains

a clear limitation or condition. A distinction is generally drawn between covenants and

conditions in oil and gas leases. See, e.g., Rogers v. Ricane Enterprises, Inc., 772 S.W.2d

76, 79 (Tex. 1989). Breach of a condition results in automatic termination of the

leasehold estate upon the happening of stipulated events. Id. Breach of a covenant does




PLAINTIFF'S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND
RESPONSE TO DEFENDANT'SMOTJON FOR SUMMARY JUDGMENT                                 PAGE 24
                                                                                         223
not automatically terminate the estate, but instead subjects the breaching party to liability

for damages, or the remedy of a decree of cancellation. Id

          Paragraph 18 specifies the acreage that "shall be held" by Conoco, thus

necessarily also providing for the acreage that shall not be held (i.e., shall revert to

Vaquillas). The agreed exception and the phrase "shall be held" cannot be construed to

be anything other than a condition, breach of which results in termination of the leasehold
                                         61
estate as to the Reverted Minerals

 V.       CONCLUSION

          Conoco has drilled some 208 wells on the leases and retains up to 40 acres for

each well capable of producing in paying quantities. This acreage allows Conoco to

operate these wells and produce them at maximum potential.                   This case concerns the

remaining 25,000+ acres that Conoco has not developed to the density provided by

Railroad Commission rules for the field. Yet, Conoco wants to hold that acreage and

thereby prevent Vaquillas from having it developed by another operator.

          The Leases unequivocally provide in Paragraph 18 that Conoco retains only that

acreage for each well equal to the acreage per unit established by the Railroad

Commission's spacing rules for the field if those units are different than 640 acres for gas

wells. Conoco does not dispute that the applicable drilling/spacing units - the minimum

amount of acres required to drill a well - established by the Commission field rules are

40 acres per well. Instead, Conoco makes a number of arguments that simply do not fit

with the language of the Leases and would have this Court rewrite that language.

61   See, e.g., Freeman v. Magnolia Petroleum Co., 171 S.W.2d 339, 340 (Tex. 1943).

PLAINTIFF'S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND
RESPONSE TO DEFENDANT'SMOTJON FOR SUMMARY JUDGMENT                                         PAGE 25
                                                                                                224
       Conoco has refused to acknowledge that the undeveloped acres that it elected not

to earn by drilling additional wells has reverted to Vaquillas. And, consistent with this

refusal, Conoco has not provided the formal releases required by the Leases. Vaquillas

simply asks this Court to rectify this situation.

VI.    SUMMARY JUDGMENT EVIDENCE

               In support of this Motion, Vaquillas relies on the following summary

judgment evidence, which is filed with the Motion and is hereby incorporated as part of

this Motion:

       Exhibit A:     Affidavit of Alicia R. Ringuet.

               ExhibitA-l: Field Rules Display for the Vaquillas Ranch (Lobo Cons.)
                           Field.

               Exhibit A-2: Railroad Commission Rule 38 (16 TAC §3.38).

               Exhibit A-3: Defendant ConocoPhillips Company's Response to Numbers
                            16 and 17 of Plaintiff Vaquillas Unproven Minerals, Ltd.'s
                            First Set ofInterrogatories in the above-captioned case.

               Exhibit A-4: Proposal For Decision and Final Order in the Texas Railroad
                            Commission, Oil and Gas Docket No. XX-XXXXXXX.

               Exhibit A-5: Proposal For Decision and Final Order in the Texas Railroad
                            Commission, Oil and Gas Docket No. XX-XXXXXXX.

               ExhibitA-6: Form W-l filed with Texas Railroad Commission for API
                           No. 42-479-41635.

               Exhibit A-7: Special Order Pertaining to Density Development in All
                            Fields Where Standard Proration Units Have Not Been
                            Adopted, Oil and Gas Docket Nos. 108, 124, 125, 126, 128,
                            129 and 146, August 15, 1955.




PLAINTIFF'S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND
RESPONSE TO DEFENDANT'SMOTJON FOR SUMMARY JUDGMENT                              PAGE 26
                                                                                      225
     Exhibit B:   Affidavit of Dino O. Smith.

           Exhibit B-1: June 15, 1974 Oil, Gas and Mineral Lease between Vaquillas
                        Ranch Company, Ltd., a limited partnership acting herein
                        through its general partners, 10. Walker, Jr., Gene S. Walker,
                        Evan B. Quiros and E. Walker Quiros (a/k/a Mary Elizabeth
                        Quiros) and Continental Oil Company for 26,622.79 acres of
                        land, more or less, situated in Webb County, Texas.

           Exhibit B-2: November 1, 1987 Oil, Gas and Mineral Lease Amending
                        Oil, Gas and Mineral Lease dated June 15, 1974 (As
                        Amended) between Vaquillas Ranch Company, Ltd.;
                        Vaquillas Unproven Mineral Trust; Vaquillas Proven Mineral
                        Trust; acting by and through its general partners, 1 O.
                        Walker, Jr., E. Walker Quiros, Gene S. Walker and Evan B.
                        Quiros, and Conoco, Inc., Lessee for 26,622.79 acres, more or
                        less, situated in Webb County, Texas.

           Exhibit B-3: November 1, 1987 Oil, Gas and Mineral Lease between
                        Vaquillas Ranch Company, Ltd.; Vaquillas Unproven Mineral
                        Trust; Vaquillas Proven Mineral Trust; acting by and through
                        its general partners, 10. Walker, Jr., E. Walker Quiros, Gene
                        S. walker and Evan B. Quiros and Conoco Inc. for 6,740 acres,
                        more or less, situated in Webb County, Texas.

           Exhibit B-4: December 19, 1984 Mineral Deed from Vaquillas Ranch Co.,
                        Ltd. to 1 O. Walker, Jr., et al. a copy of which is recorded in
                        Volume 1097, Pages 66 et seq. of the Deed Records of Webb
                        County, Texas.

           Exhibit B-5: December 19, 1984, Mineral Deed from 10. Walker, Jr., et
                        al. to 10. Walker et aI., as Trustees of the Vaquillas
                        Unproven Minerals Trust, a copy of which is recorded in
                        Volume 1097, Pages 101 et seq. of the Deed Records of
                        Webb County, Texas.

           Exhibit B-6: Effective December 31, 1996, Mineral Deed from the
                        Trustees of the Vaquillas Unproven Minerals Trust to
                        Vaquillas Unproven Minerals, Ltd. a copy of which is
                        recorded in Volume 471, Pages 711 et seq. of the Official
                        Public Records of Webb County, Texas.



PLAINTIFF'S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND
RESPONSE TO DEFENDANT'SMOTJON FOR SUMMARY JUDGMENT                            PAGE 27
                                                                                    226
       Pursuant to Rules 201 and 204 of the Texas Rules of Evidence, Vaquillas requests

that the Court take judicial notice of the following:

              Exhibit A-2: Railroad Commission Rule 38 (16 TAC §3.38).

              Exhibit A-4: Proposal For Decision and Final Order in the Texas Railroad
                           Commission, Oil and Gas Docket No. XX-XXXXXXX.

              Exhibit A-5: Proposal For Decision and Final Order in the Texas Railroad
                           Commission, Oil and Gas Docket No. XX-XXXXXXX.

              Exhibit A-7: Special Order Pertaining to Density Development in All
                           Fields Where Standard Proration Units Have Not Been
                           Adopted, Oil and Gas Docket Nos. 108, 124, 125, 126, 128,
                           129 and 146, August 15, 1955.

VI.    PRAYER

       For these reasons, Plaintiff Vaquillas Unproven Minerals, Ltd. asks for judgment

against Defendant ConocoPhillips Company for the following:

       A.     Judgment granting Vaquillas's cross-motion for partial summary judgment;

       B.     Judgment that Conoco has breached the Leases by failing to release all
              acreage in excess of 40 acres for each producing and shut-in natural gas
              well capable of producing in paying quantities;

       C.     Judgment denying Conoco's motion for summary judgment;

       D.     All other and further relief to which Plaintiff may be justly entitled.




PLAINTIFF'S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND
RESPONSE TO DEFENDANT'SMOTJON FOR SUMMARY JUDGMENT                                      PAGE 28
                                                                                            227
                                  Respectfully submitted,


                                  By:   Is/Gregg Owens
                                        Gregg Owens

                                  Gregg Owens, SBN 15383500
                                  gregg.owens@haysowens.com
                                  John R. Hays, Jr., SBN 09303300
                                  john.hays@haysowens.com
                                  Alicia R. Ringuet, SBN 24074958
                                  alicia.ringuet@haysowens.com
                                  HA YS & OWENS L.L.P.
                                  807 Brazos Street, Suite 500
                                  Austin, Texas 78701
                                  (512) 472-3993
                                  (512) 472-3883 Facsimile

                                  Michael Jung, SBN 11054600
                                  michaeljung@strasburger.com
                                  STRASBURGER & PRICE, LLP
                                  901 Main Street, Suite 4400
                                  Dallas, Texas 75202-3794
                                  (214) 651-4724
                                  (214) 651-4330 Facsimile

                                  Armando X. Lopez, SBN 12562400
                                  mandox@rio.bravo.net
                                  LAW OFFICES OF ARMANDO X. LOPEZ
                                  1510 Calle Del Norte, Suite 16
                                  Laredo, Texas 78041
                                  (956) 726-0722
                                  (956) 726-6049 Facsimile

                                  Raul Leal, SBN 24032657
                                  rleal@rl-lawfirm.com
                                  RAUL LEAL INCORPORATED
                                  5810 San Bernardo, Suite 390
                                  Laredo, Texas 78041
                                  (956) 727-0039
                                  (956) 727-0369 Facsimile

                                  ATTORNEYS FORVAQUILLAS
                                  UNPROVEN MINERALS, LTD.

PLAINTIFF'S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND
RESPONSE TO DEFENDANT'SMOTJON FOR SUMMARY JUDGMENT                  PAGE 29
                                                                        228
                            CERTIFICATE OF SERVICE


      I hereby certify that a true copy of this document is being served on the following
persons by the means shown on this the 8th day of September, 2014.


                                         By:   Is/Gregg Owens
                                               Gregg Owens


Mr. Michael V. Powell                                               via Electronic Mail
mpowell@lockelord.com
Ms. Elizabeth L. Tiblets
etiblets@lockelord.com
LOCKE LORD LLP
2200 Ross A venue, Suite 2200
Dallas, Texas 75201-6776

Mr. Adolfo Campero                                                  via Electronic Mail
acampero@camperolaw.com
CAMPERO & ASSOCIATES, P.C.
315 Calle Del Norte, Suite 207
Laredo, Texas 78041

ATTORNEYS FOR DEFENDANT
CONOCOPHILLIPS COMPANY




PLAINTIFF'S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND
RESPONSE TO DEFENDANT'SMOTJON FOR SUMMARY JUDGMENT                              PAGE 30
                                                                                      229
 !,
                                                                                                                          Filed
                                                                                                       12/31/201410:06:04 AM
                                                                                                             Esther Degollado
                                                                                                                 District Clerk
.-~                                                                                                              Webb District
                                                                                                          2014CVQ000438D4
                                     CAUSE NO. 2014CVQ000438 D4

      VAQUILLAS UNPROVEN MINERALS,                      §        IN THE DISTRICT COURT
      LTD,                                              §
.,,
                                                        §
             Plaintiff,                                 §
                                                        §
      v.                                                §        WEBB COUNTY, TEXAS
:!                                                      §
.,    CONOCOPHILLIPS COMPANY,                           §
                                                        §
             Defendant.                                 §        406TH JUDICIAL DISTRICT

                 UNOPPOSED MOTION TO ALLOW INTERLOCUTORY APPEAL

      TO THE HONORABLE JUDGE OF SAID COURT:

             Defendant ConocoPhillips Company ("ConocoPhillips") moves pursuant to TEXAS CIVIL

      PRACTICE & REMEDIES CODE § 51.014(d) for the Court to enter an Amended Order on Summary

      Judgment that will allow an interlocutory appeal of the Court's November 25, 2014, Order on

      Motions for Summary Judgment.

             This action was filed March 7, 2014. Accordingly, the 2011 amendment to TEXAS CIVIL

      PRACTICE & REMEDIES CODE § 51.0 14(d) applies to this case. Under that statute:

             (d) On a party's motion or on its own initiative, a trial court· in a civil action may,
             by written order, permit an appeal from an order that is not otherwise appealable
             if:

                 (1) the order to be appealed involves a controlling question oflaw as to which
                 there is a substantial ground for difference of opinion; and

                 (2) an immediate appeal from the order may materially advance the ultimate
                 termination of the litigation.

             On November 25, 2014, this Court signed its Order on Motions for Summary Judgment

      ("November 25 Order"). That Order denied ConocoPhillips' Motion for Summary Judgment

      and granted Vaquillas' Cross-Motion and declared that ConocoPhillips breached both of the oil




      UNOPPOSED MOTION FOR INTERLOCUTORY ApPEAL                                                    PAGEl

                                                                                                            422
     and gas leases at issue "by failing to release all acreage in excess of 40 acres for each producing

     and shut-in natural gas well capable of producing in paying quantities."

            The November 25 Order decided a controlling question of law. The Order determined, as

     a matter of law, how the "retained acreage" clauses of the two leases should be construed with

     regard to the central issue in the case: the number of acres per well ConocoPhillips retains under

     the "retained acreage" clauses following the end of ConocoPhillips' continuous drillings

     operations.    The controlling question of law involves the two parties' competing legal

     interpretations of the "retained acreage" clauses and certain Field Rules adopted by the Railroad

     Commission of Texas.

            Immediate, interlocutory appeal from the Court's November 25 Order will materially

     advance the ultimate conclusion of this litigation. Plaintiff Vaquillas Unproven Minerals, Ltd.,

     the lessor, seeks judgment ordering ConocoPhillips to execute releases of more than 15,000 acres

     covered by the two leases. Plaintiff also alleges direct and consequential damages flowing from

     ConocoPhillips' alleged breach of contract. It may create significant problems if ConocoPhillips

     is required to release the 15,000 acres, but later convinces an appellate court that ConocoPhillips'

     interpretation is correct. On the other hand, Plaintiff desires a final release of the acreage as soon

     as possible.   Additionally, determining whether Plaintiff has suffered damages will be an

     expensive and time-consuming task.

            As a consequence, the most expeditious way to advance this litigation to a final

     conclusion is allow ConocoPhillips to take an immediate, interlocutory appeal from this Court's

     November 25, 2014, Order. Final judgment on appeal will allow an orderly approach to any

     remaining issues in the case.
!1
'I


     UNOPPOSED MOTION FOR INTERLOCUTORY ApPEAL                                                    PAGE 2

                                                                                                        423
           In order to allow an interlocutory appeal, ConocoPhillips moves the Court to enter an

    Amended Order on Cross-Motions for Summary Judgment making the necessary findings and

    granting this Court's permission for an interlocutory appeal. TEX. R. CIY. P. 168 ("Permission

    must be stated in the order to be appealed.") If a court, as did this Court, issues an order without

    granting permission to appeal, but later determines to allow the appeal, the "order previously

    issued may be amended to include such permission." TEX. R. CIY. P. 168. A proposed form of

    Amended Order, which both parties have approved as to form, is attached to this motion as

    Exhibit "A".l

           ConocoPhillips also moves the Court to stay this action pending the interlocutory appeal,

    except as the parties may agree or the Court may subsequently so order.

           Counsel for Plaintiff Vaquillas Unproven Minerals, Ltd., has stated that the plaintiff is

    not opposed to this motion.

           WHEREFORE, PREMISES CONSIDERED, Defendant ConocoPhillips Company prays

    that the Court will grant this motion and enter an Amended Order on Cross-Motions for

    Summary Judgment that makes the necessary findings and grants this Court's permission for an




       The attached proposed form of Amended Order copies the Court's rulings from the Courts'
       November 25 Order on Motions for Summary Judgment. That Order denied ConocoPhillips'
       motion for summary judgment and granted Plaintiffs cross-motion. ConocoPhillips
       continues to insist the Court erred by denying its Motion for Summary Judgment and by
       granting the Plaintiffs Cross-Motion, and has agreed to this Motion and is participating in
I      submission of the attached proposed form of Amended Order only so that ConocoPhillips
       may appeal from this Court's November 25 Order. ConocoPhillips disagrees with, and
       excepts to, the first two Ordering paragraphs and the Declaratory portion of the proposed
       Amended Order. ConocoPhillips' submission of this motion and the attached proposed form
       of Amended Order does not mean, and should not be construed to mean, that ConocoPhillips
       agrees with the content of the first two Ordering paragraphs or the Declaratory part of the
       attached proposed form of Amended Order. See First Nat'l Bank of Beeville v. Fojtik, 775
       S.W.2d 632 (Tex. 1989).
    UNOPPOSED MOTION FOR INTERLOCUTORY ApPEAL                                                  PAGE 3

                                                                                                     424
interlocutory appeal. ConocoPhillips requests the Court to enter an Amended Order substantially

in the form of that attached as "Exhibit A" to this Motion.

Dated: December 31, 2014                     Respectfully sUb~itted,     . /)


                                                 ~P'Ucj-/~
                                             Michael . Powell
                                              State Bar No. 16204400
                                              Email: mpowell@lockelord.com
                                             Elizabeth L. Tiblets
                                              State Bar No. 24066194
                                              Email: etiblets@lockelord.com
                                             LOCKE LORD LLP
                                             2200 Ross Avenue, Suite 2200
                                             Dallas, Texas 75201-6776
                                             Tel: 214-740-8520
                                             Fax: 214-740-8800

                                              Adolfo Campero
                                               State Bar No. 00793454
                                               Email: acampero@camperolaw.com
                                              CAMPERO & ASSOCIATES, P.C.
                                              315 Calle Del Norte, Suite 207
                                              Laredo, Texas 78041
                                              Tel: 956-796-0330
                                              Fax: 956-796-0399

                                              ATTORNEYS FOR DEFENDANT
                                              CONOCOPHILLIPS COMPANY


                             CERTIFICATE OF CONFERENCE

         I hereby certify that on December 30, 2014, I conferred with Mr. Michael Jung, counsel
for PlaintiffVaquillas, regarding this motion. Mr. Jung stated that Vaquillas is unopposed to the
relief requested in this motion.                               , / )


                                                 ~~~~
                                              Michael    . Powell




UNOPPOSED MOTION FOR INTERLOCUTORY APPEAL                                               PAGE 4

                                                                                              425
                                      CERTIFICATE OF SERVICE

               I hereby certify that on the 31st day of December, 2014, a true and correct copy of this
       motion was served was served via email on the following counsel of record for Plaintiff through
       its counsel of record listed below:

       Gregg Owens                                      Raul Leal
        Email: gregg.owens@haysowens.com                 Email: rleal@rl-Iawfirm.com
       Robert G. Hargrove                               Raul Leal Incorporated
        Email: rob.hargrove@haysowens.com               5810 San Bernardo, Suite 390
       Hays & Owens L.L.P.                              Laredo, Texas 78041
       807 Brazos Street, Suite 500                     Tel: 956-727-0039
       Austin, Texas 78701                              Fax: 956-727-0369
       Tel: 512.472.3993
       Fax: 512.472.3883

       P .. Michael Jung                                Armando X. Lopez
        Email: michael.jung@strasburger.com              Email: mandox@rio.bravo.net
       Strasburger & Price, LLP                         Law Offices of Armando X. Lopez
       901 Main Street, Suite 4400                      1510 Calle Del Norte, Suite 16
       Dallas, Texas 75202-3794                         Laredo, Texas 78041
       Tel: 214-651-4724                                Tel: 956-726-0722
       Fax: 214-651-4330 (main)                         Fax: 956-726-6049
       Fax: 214-659-4022 (direct)

       Counsel for Vaquillas Unproven Minerals, Ltd.




': ~
"


,I




       UNOPPOSED MOTION FOR INTERLOCUTORY ApPEAL                                               PAGES
                                                                                                    426
812512014                                                                                           Field Rules Display


                                                                                                                                                                           Log In    I


       Field Rules Display
            Field Query Previous Querv


                                          Field Rules for Field: VAQUILLAS RANCH (LOBO CONS.)
                                                                Field Number: 93215400                                    District Name: 04

            Oil field Rules:
               County Regular: N Salt Dome: N field Location: LAND                                                                    Don't Permit: N
            Schedule Remarks: UNITIZED TRACT.
                   Comments: SEE REMARKS FOR OPTIONAL RULES
            Rule                                   Lease                     Well                Acres per           Tolerance               Diagonal      Diagonal Max
                                Depth
            Type                                   Spacing                   Spacing             Unit                Acres                   Code          Length
            Special                All                                                                                                         Corner to
                                                                467               1200              40.0                        0.0                             1200
            Rules                Depths                                                                                                         Corner




            Gas field Rules:
               County Regular: N Salt Dome: N field Location: LAND                                                                    Don't Permii: N
            Schedule Remarks: NO P-15 OR PLAT REQUIRED.
                   Comments: SEE REMARKS
            Rule                                       Lease                  Well               Acres per                Tolerance           Diagonal     Diagonal Max
                                 Depth
            Type                                       Spacing                Spacing            Unit                     Acres               Code         Length
            Special                All
            Rules                Depths
                                                                467                1200             40.0                        0.0                              0




         [ Cancel       I



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                                                                                                                                                                       232
http://webapps.rrc.state.tx.us/DP/fieldSelectAction.do                                                                                                                              111
API No.
                       42-479-41635                                                        RAILROAD COMMISSION OF TEXAS                                                                                               FORMW-l                         07/2004
 Drilling Pennit #
                                                                                                 OIL & GAS DIVISION
                          730240                                                                                                                                                                             Permit Status:              Approved
 SWR Exception CaseIDocket No.
                                                               APPLICATION FOR PERMIT TO DRILL, RECOMPLETE, OR RE-ENTER
                                                                                     This facsimile W-J was generated electronically from data submitted to the RRC.
                                                                                       A certification ofthe automated data is available in the RRC's Austin office.
 1. RRC Operator No.                                     2. Operator's Name (as shown on fonn P-5, Organization Report)                                               3. Operator Address (include street, city, state, zip):
                     172232                                                          CONOCOPHILLIPS COMPANY
 4. Lease Name

GENERAL INFORMATION
                                              VAQUILLAS RANCH A7
                                                                                                                   I      5. Well No.
                                                                                                                                                     249


 6. Purpose of filing (mark ALL appropriate boxes):                      IXI   New Drill               D    Recompletion                   D   Reclass                   D     Field Transfer                  D    Re-Enter
                                                                          D    Amended                 D        Amended as Drilled (BHL)(Also File Fonn WolD)

 7. Wellbore Profile (mark ALL appropriate boxes):                D     Vertical              D Horizontal (Also File Fonn W-lH)                         IX] Directional (Also File Fonn WolD)                                      D Sidetrack

 8. Total Depth
       12150
                                  I   9. Do you have the right to develop the
                    minerals under any right-of-way?
                                                                                     !XI   Yes     D       No     110. Is this well subject to Statewide Rule 36 (hydrogen sulfide area)?                  DYes             IXI   No

 SURFACE LOCATION AND ACREAGE INFORMATION
 11. RRC District No.             112. County
                          04                                      WEBB                        113. Surface Location                 [XJ Land            D    Bay/Estuary          D     Inland Waterway              D Offshore

 14. This well is to be located            10.9     .      miles in a           NE               direction from                                Aguilares                            which is the nearest town in the county of the well site.

 15. Section          \16. Block             117. Survey                                                                          18. Abstract No.          119. Distance to nearest lease line:       20. Number of contiguous acres in
               259                                                 CCSD&RGNG RR CO                                                        A-1137                             1066               ft.    lease, pooled unit, or unitized tract:         640
 21. Lease Perpendiculars:                 1166                 ft from the                WEST                        line and            1480               ftfrom the               NORTH                        line.

 22. Survey Perpendiculars:                1166                 ft from the                WEST                        line and            1480               ft from the              NORTH                       line.

 23. Is this a pooled unit?    DYes           IKl   No     124. Unitization Docket No:                             125. Are you applying for Substandard Acreage Field?               DYes              (attach Fonn W-IA)                 IKl   No

 FIELD INFORMATION                    List all fields of anticipated completion including Wildcat List one zone per line.
26. RRC      27. Field No.              28. Field Name (exactly as shown in RRC records)                                                29. Well Type                    30. Completion Depth          31. Distance to Nearest         32. Number of Wells on
District No.                                                                                                                                                                                               Well in this Reservoir          this lease in this
                                                                                                                                                                                                                                           Reservoir

    04         93215400                  VAQUILLAS RANCH (LOBO CONS.)                                                                    Oil or Gas Well                         10650                             0.00                           1




BOTTOMHOLE LOCATION INFORMATION is required for DIRECTIONAL, HORIZONTAL, AND AMENDED AS DRILLED PERMIT APPLICATIONS                                                                                                    (see W-1 D attachment)
Remarks                                                                                                                                                                                         Certificate:
[RRC STAFF Dec 21, 2011 4:40 PM): Manual review ok for density.                                                                                                 I certifY that infonnation stated in this application is true and complete, to the
                                                                                                                                  EXHIBIT                       best of my knowledge.
                                                                                                                                                                     Christina Gustartis, Sr. Regulatory
                                                                                                                                                                                      S~ecialist                                  Dec 19, 2011
                                                                                                                                      A-6                      Name of filer                                                   Date submitted
                                                                                                                                                                    {83224 862463                     christina.gustartis(Q2conocol2hillil2s.com
RRCUseOnly                    Data Validation Time Stamp:           Dec 21, 20114:44 PM( 'As Approved' Version)                                                  Phone                                E-mail Address (OPTIONAL)
                                                                                                                            Page 1 of2
                                                                                                                                                                                                                                                      265
                                                                    RAILROAD COMMISSION OF TEXAS
                                                                                                                                                                  Form W-ID                             07/2004
Pennit Status:          Approved
                                                                                                                                                                  Supplemental Directional Well Information
      The RRe has not approved this
                                                                          OIL & GAS DIVISION
app[jcation. Dup[jcation or distribution of                                                                                                                               Permit #                  730240
   information is at the user's own risk.
                                                 APPLICATION FOR PERMIT TO DRILL, RECOMPLETE, OR RE-ENTER
                                                              Thisfacsimile W-J was generated electronically from data submitted to the RRe.                          Approved Date: Dec 21, 2011
                                                                A certification ofthe automated data is available in the RRe's Austin office.

I. RRC Operator No. \2. Operator's Name (exactly as shown on form P-5, Organization Report)       \3. Lease Name                                                                   \4. Well No.
     172232                             CONOCOPHILLIPS COMPANY                                                   VAQUILLAS RANCH A7                                                               249
 "lateral Drainholelhcation Information
                                                                                                                ..                                                                       ."       "."




5. Field as shown on Form W-I       VAQUILLAS RANCH (LOBO CONS.) (Field # 93215400, RRC District 04)
6. Section
         259
                         17. Block                   18.   Survey
                                                                CCSD&RGNG RR CO
                                                                                                                                                I   9. Abstract
                                                                                                                                                     1137
                                                                                                                                                                      I 10. County ofBHL
                                                                                                                                                                        WEBB
     II. Botton hole Lease Line Perpendiculars
                      1066       ft. from the
                                                           West                 line. and
                                                                                              1478        ft. from the
                                                                                                                                    North                                   line

     12. Bottom hole Survey Line Perpendiculars #
                      1066       ft. from the
                                                        West                    line. and
                                                                                              1478       ft. from the
                                                                                                                                    North                                   line




                                                                                                 Page 2 of2
                                                                                                                                                                                                             266
                                                                                 SURVEY 36
                                                                         C.C.S.D. & R.O,N.O.R.R.CO.
                                                                                    ABSTRACT 1036
                                                                      SURVCYCD OCTOBER 20. 1879



            --'x.~=;;;;;;;~;;;;;;;';;;;;';;;;;;;~~X~~~~!

                                                                                                                                                                                 !
  ',166' FWL LruE
                                                                                                                                                                        rv(J)X
1,166':1; FWL SURVEY



   1,066' FWL LruE
 I,OB6';t FWL SURVEY'-~'--'
                                                                                                                                                                                 I~
                                                                                                                 CONOCOPHILLIPS COMPANY
                                                                                                                     VAOUIUAS RANCH A7 249
                                                                                                                          640.00 ACRES (CALLED)




                                                                                               SURVEY 269
                                                                                        C.C.S.D. & R.O,N,O.R.R.CO.
                                                                                              ABSTRACT US?
                                                                                       SURVEYED AUGUST 25. /885




                                                                                                      L[ASE LINE


                                                         DFiTAIL: Nor ro SCALf:
                                                                                                                          NORTH HALF SURVEY 34
                                                                                                                              R.O, BARNESLEY
                                                                                                                              ABSTRACT 2m 8
                                                                                                                          SURVEYED JUL Y 12, 1922




\                                             W/////H/HAY/////////#/#//J'W'///dA'/#AW//AI'//Q/A¥/////////&



    \
        \                                                                                          RevIsion      Dcle
                                                                                                               12-07-11
                                                                                                                                              GRAPHlC SCALE

                                                                                                                                                             'or
            \                                                                                                                'k...,.JJ.j           (INFm)
                                                                                                                                                I It'd! • 1000 n..



VAQUILLAS RANCH A7 249
STATE PlANE COORDINATES - TEXAS SOUTH ZONE - NAO 19:1.7,                                       PROPOSED BOTTOM HOLE (PBHL)
PROPOSED SURFACE LOCATION (PSHL)                                                               N: 697090    E: 1841021
N: 697090    E: 1841121                                         LEASE: 1,066' FWL & 1,478' FNL SURVEY: 1,066':1; FWL &< 1.478';t FNL
; GEOGRAPHIC NAD 27:     Lo!': 27'J5'O'"    Long.: 98'59'26"
  GEOG!VJ'HIC NAD 83:    La!.: 27'J5'02"    Long.: 98'59'27"                                       ... LrASt UN£
  ELEVATION: 674'                                                                   """- ....... _ ;;' SURVr:Y UIIE
. L~E: 1,166' FWL &: 1,480 FNL SURVEY: I,166';t FWL & 1,480':1; FNL                 - - - - - - - '" PfRPEHDICUUJ/ ncs

 HOWLAND ENGINEERING AND SU                                                                                       CONOCOPHILLIPS COMPANY
    .           7(i{5 N. Borl/eU Avenu9, Laredo                                                                          VAQUILtAS RANCH A7 249 WISe
              , OrneE', (956) 722-44" fAX, (                                                                                   640.00 ACReS CALLF:O)
 TOPE firm Re9Jslrotton No. F-i097      TBPlS                                                                                         SIWArw IN



                                                                                                                                     $'".
                                                                                                              SURYrY 259, C. C. S.D. & R.G.N.G.R.R. CO., ABSTRACr IIJ7
!hI. Plot r~priiil.nf' 0 WELt LOCATION ,UIVOY                                                                                    WEBB COUNTY. TEXAS
glaund SUf)'~l. deeds and olher oVl1"'obfe in"
(0 b~ a 'buundcuy ~urv6y. bill (or the sole p
RaUroa CommissIon I~Ot.   a dtifling permit. Thts                                                   FlELO DATE BOOK PAGE S
                                                                                                     11-29-11   77   01 02
                                                                                                                                                      DRAWN BY:        tAr.
of CON OPHIWPS CO           NY.                                                                                                      <         .~     JOB No.        208J2-f/

                         ~                                                                                                               0.
                                                                                                                                     J;U;~~
                                                                                                                                              .'      SCALE:
                                                                                                                                                      QUAD NAME:
                                                                                                                                                                     f '~fOOD'
                                                                                                                                                                       ,11$ BOf1nell
            .P.LS. N.. 52-TEXAS
                                                                                                                                                                                       267
