THE STATE OIL AND GAS BOARD OF MISSISSIPPI ORDER. This day this cause came on to be heard on the petition

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1 BLED FOR RECORD J Jf\H OIL AND GAS BOARD Clyde R. Davs, State Ol & Gas Supervsor THE STATE OIL AND GAS BOARD OF MISSISSIPPI ^ DOCKET NO ORDER NO. ORDER Ths day ths cause came on to be heard on the petton of The Lousana Land and Exploraton Company, of New Orleans, Lousana, qualfed to do and dong busness n the State of Msssspp, requestng the Board to amend the Specal Feld Rules for the Aberdeen Gas Feld, Monroe County, Msssspp, and the Board fndng that due and legal notce of the meetng of the Board for the purpose of consderng the above petton has been gven n ^ the manner and form provded by the rules and regulatons of ths Board and that proofs of publcaton are on fle wth ths Board, and the Board has full jursdcton of the partes and the subject matter n sad cause, and havng heard the evdence of wtnesses and arguments of counsel and beng advsed n the premses, s of the opnon that sad petton should be granted. The Board further fnds that pettoner and ts assocates are the owners of the operatng rghts under the Sh of Secton 30, Townshp 14 South, Range 7 East, Monroe County, Msssspp, and have heretofore drlled a well known as the Lousana Land and r Exploraton Company - Lee H. Harrngton No. 1 Well on sad unt, U whch well encountered the Carter Sand Gas Pool, the Sanders Sand Gas Pool, the Evans Sand Gas Pool and the Lews Sand Gas Pool of the Mssssppan Formaton, whch pools are-separate and dstnct from all other producng gas pools n the area. The Board further fnds that by Order No entered n Docket No on August 18, 1965, ths Board adopted Specal Feld Rules for the Aberdeen Gas Feld; that from geologcal nformaton avalable, the areal extent of sad feld should be enlarged to nclude the herenafter descrbed lands, and t s necessary to amend the Specal Feld Rules n order to redefne \J the feld lmts and to dentfy and defne the above mentoned gas pools encountered n sad feld.

2 IT IS, THEREFORE, HEREBY ORDERED AND ADJUDGED by the State Ol and Gas Board of Msssspp that n order to protect the co equal and correlatve rghts of the owners n the Aberdeen Gas Feld and' for the preventon of waste, the Specal Feld Rules for the Aberdeen Gas Feld, Monroe County, Msssspp, should be and same are hereby amended so as to nclude n the areal extent of sad feld the followng descrbed lands, to-wt: Sectons 13 and 14, the N% of Secton 36, Town shp 14 South, Range 6 East, and Sectons 18, 19, 30, and 31, Townshp.14 South, Range 7 East, Monroe County, Msssspp, and to dentfy and defne the Carter Sand Gas Pool, the Sanders Sand Gas Pool, the Evans Sand Gas Pool and the Lews Sand Gas Pool of the Mssssppan Formaton, sad defntons beng set forth n the Specal Feld Rules for the Aberdeen Gas Feld, Monroe County, Msssspp, attached hereto as Exhbt "A". ORDERED AND ADJUDGED ths^?/^ day of December, STATE OIL AND GAS BOARD OF MISSISSIPPI CHAIRMAN -2-

3 / SPECIAL FIELD RULES FOR THE ABERDEEN GAS FIELD MONROE COUNTY, MISSISSIPPI The Aberdeen Gas Feld, as defned heren, s that area stuated n Sectons 23, 24, 25 and 26, Townshp 14 South, Ranqe 6 East, Sectons 13 and 14, the North Half of Secton 36, Townshp 14 South, Ranqe 6 East, Sectons 18, 19, 30, and 31, Townshp 14 South, Ranqe 7 East, Monroe County, Msssspp, underlan by the Carter Sand Gas Pool, the Sanders Sand Gas Pool, the Evans Sand Gas Pool and the Lews Sand Gas Pool of the Mssssppan Forma ton, and all productve extensons thereof. A. The Carter Sand Gas Pool n the Aberdeen Gas Feld ^ ^ shall be construed to mean those strata of the Mssssppan Formaton productve of qas n the nterval between the electrc log depths of feet and feet n the Lousana Land and Exploraton Company - Lee H. Harrngton No. 1 Well, as ndcated on the electrc log of sad well, and all sands correlatve of these strata productve of gas, sad well beng located 1,085 feet East of the West lne and 1587 feet North of the South lne of Secton 30, Townshp 14 South, Range 7 East, Monroe County, Msssspp. O B. The Sanders Sand Gas Pool n the Aberdeen Gas Feld shall be construed to mean those strata of the Mssssppan Formaton productve of gas n the nterval between the electrc log depths of 3514 feet and feet n the Lousana Land and Exploraton Company- Lee H. Harrngton No. Well, as ndcated on the electrc log!of sad well, and all sands, correlatve of these strata productve of gas, sad well beng located 1,0 85 feet East of the West lne and 1587 feet North of the South lne of Secton 30, Townshp 14 South, Range 7 East, Monroe County, Msssspp. o

4 C. The Evans Sand Gas Pool n the Aberdeen Gas Feld ( shall be construed to mean those strata of the Mssssppan Formaton productve of gas n the nterval between the electrc log depths of 3933 feet and 3962 feet n the Lousana Land and Exploraton Company - Lee H. Harrngton No. 1 Well, as ndcated on the electrc log of sad well, and all sands correlatve of these strata productve of gas, sad well beng located 1,085 feet East of the West lne and 1587 feet North of the South lne of Secton 30, Townshp 14 South, Range 7 East, Monroe County, Msssspp, D. The Lews Sand Gas Pool n the Aberdeen Gas Feld { ) shall be construed to mean those strata of the Mssssppan Formaton productve of gas n the nterval between the electrc log depths of feet and 4151 feet n the Lousana Land and Exploraton Company -Lee H. Harrngton No..1 Well, as ndcated on the electrc log of sad well, and all sands correlatve of these strata productve of gas, sad well beng located 1085 feet East of the West lne and feet North of the South lne of Secton 30, Townshp 14 South, Range 7 East, Monroe County, ' Msssspp.! E. The characterstcs of sad Carter Sand Gas Pool, r! V_y Sanders Sand Gas Pool, Evans Sand Gas Pool and Lews Sand Gas Pool n sad feld are such that a well located as herenafter! mately 320 contguous surface acres conformng to the requre ments of the rules heren contaned wll effcently dran and produce the recoverable gas from such unts n sad pools wthout avodable waste. I RULE 1 - SPACING OF GAS WELLS (1) All gas wells drlled and completed n the Aberdeen o Gas Feld shall be located upon 320-acre drllng unts, and a prescrbed and drlled upon a drllng unt contanng approx- -2-

5 tolerance of 2% shall be allowed to compensate for varances n (^/ the sze of drllng unts. (2) Each well completed n a separate gas pool shall be located at least 1320 feet from any other producble ;well com pleted n, or drllng well projected to, the same gas pool. (3) No well shall be located closer than 660 feet to any exteror boundary lne of a drllng unt, except upon specal permt granted by the Board after notce and hearng. RULE 2 - DRILLING AND COMPLETION (1) Adequate controls and equpment to prevent blow-outs \^J) shall be used n the drllng and completon of all wells. (2) The producton strng of casng shall be cemented wth a calculated amount of cement necessary to fll the annular space to a pont 50 0 feet above the shallowest producng gas pool penetrated by the well. (3) All wells shall be equpped wth and produced through a tubng strng of not more than 2-1/2" n nternal dameter. (4) Upon approval thereof by the Board, after notce and hearng, wells may be completed as dual completons, or as multple K.J (three or more) completons, producng smultaneously through two (2) or more tubng strngs, or through a combnaton of tubng strngs and casng-jtubng annulus, desgned to mantan separaton of producton from each separate gas pool. RULE 3 - ALLOCATION; OF GAS PRODUCTION. (1) The Board shall determne the ppelne capacty of each gas purchasng company to take gas from the feld and no nomnatons n excess of a gas purchasng company's capacty to o take gas shall be consdered by the Board.

6 (2) The Board shall determne the amount of acreage assgned to each gas well n each pool n the feld to whch a gas purchasng company s connected. (3) On or before the 20th day of each calendar month each gas purchasng company shall, f so requred, fle wth the Board nomnatons n the form of affdavts, statng the volume of gas whch wll be purchased by t from each pool n the feld durng the next succeedng calendar month. These nomnatons must conform to the actual volumes of gas whch the gas purchas ng company n good fath antcpates t wll actually wthdraw durng the succeedng month. C^ (4) In settng allowables, the Board may take nto con sderaton any and all facts whch t may deem pertnent for the purpose of preventng waste and protectng correlatve rghts of owners and carryng out the provsons of Chapter 25 6 of Laws of 1948 and Amendments thereto. In determnng the feld allowable for the thrd calendar month after a ppelne connecton n the feld has been made and producton commenced, and each succeed ng month thereafter, the Board shall also take nto consdera ton the dfferences between the second prevous month's allowable and actual producton. ^ (5) Allowables for each gas dranage area or gas producng unt of each pool shall be fxed.by the Board on a monthly bass by determnng a popl allowable producton of gas whch shall be dvded and allocated to each gas well n each pool connected to a ppelne and ts producng unt n the amount that the acreage allocated to sad well, same beng 320 acres wth a tolerance not to exceed 2% therefrom, bears to the total acreage dstrbuted and allocated to all such wells n each pool and ther producng unts, but.due adjustments shall be made by the Board for defcent wells so that the total pool allowable may be produced from both r*^ the defcent and non-defcent wells n the pool. In assgnng

7 allowables to partcular wells the Board shall not assgn to any well an allowable n excess of the amount shown on the latest delverablty test fled wth the Board for sad well n each, pool, but n the event such allowable should cause waste to be commtted, or be detrmental to the pool as a whole, such allow able shall be subject to adjustment by the Board. (6) In addton to the allowable assgned each gas well n each pool n the feld, t shall be permtted to produce that quantty of gas necessary for use as fuel and lght n lease operatons n the feld. (7) The gas producng companes shall regulate ther pro ducton of gas from the gas wells n each pool n the feld so that each well n each pool wll produce, durng each calendar month approxmately ts proporton of the allowable for sad pool, and that all overproducton and underproducton wll be kept reasonably n balance among the gas wells n each pool n the feld. (8) Orders fxng allowable producton of gas n each pool shall be ssued by -the Board on or before the 27th day of the month precedng the1! month for whch orders are to be effectve; provded, however, jthat as to wells drlled and wells to be drlled n sad feld and bbfore an allowable may be gven to any well for '» any pool n whch sjad well has not heretofore been gven an allow able, the operator of sad well shall fle wth the Board for approval a plat shoeng the locaton of the well, and the acreage assgnable to the well, and such data as may by the Board be re qured to determne that the well so drlled n sad feld and connected s and wll be properly located upon sad unt, and that a certfcate of complance for sad well has been fled and approved. (9) Each operator of each gas well n each pool n the o Aberdeen Gas Feld may produce such well n excess of the monthly -5-

8 allowables allocated to such well, and each ppelne purchaser ( may purchase sad gas, provded that no waste s occasoned thereby, but no well shall be permtted to produce n excess of the amount shown, on the latest delverablty test fled wth the Board for sad well, subject to the provsons of paragraphs (5) and (7). (10) Any gas well n the Aberdeen.Gas Feld whose cumula tve producton status s below the cumulatve monthly allowable for such well n any pool on the last day of February of any year, as shown by the Producton Status Report ssued durng the month of Aprl coverng producton through the month of February of each / year, shall have the next ensung sx months begnnng Aprl 1 of each year, n whdh to produce such cumulated underproducton n addton to ts regular monthly allowables. At the end of any sx months1 make-up perod, such cumulatve underproducton" whch has not been made up shall be cancelled out wth the ssuance of monthly gas allowables effectve December 1 of each year. (11) In makng up such underproducton, no well shall be produced at a rate n excess of the amount shown on the latest I delverablty test! fled wth the Board for sad well, or pro duced n such manner that waste s occasoned thereby or that may ( be detrmental to the well or the feld as a whole. (12) In lke manner any gas well whose cumulatve produc ton status s n excess of the cumulatve monthly allowables for such well on the last day of February of any year, as shown by the Producton Status Report ssued durng the month of Aprl coverng producton through the month of February of each year, shall cut ts producton for the next ensung sx months, begnnng Aprl 1 of each year, below the regular monthly allowables so as to brng ts producton n balance wth ts allowables at the end of such make-up perod. If, however, such overproducton s not QJ) made up by the end of such make-up perod, effectve December 1 of

9 each year, the well shall be closed n untl all overproducton ( s n balance wth the allowed producton. (13) Whenever overproducton or underproducton of any well equals three tmes ts monthly current allowable, the Board may, after notce and hearng, take such acton as t deems necessary and propervto- protect the co-equal and correlatve rghts of pro ducers and owners n the feld. (14) On or before the 20th day of.each calendar month the Board shall determne the actual quantty of gas wthdrawn from each well n each pool n the feld durng the month mmedately pror to the precedng calendar month and shall ssue a Producton Status Report showng the status of each gas well or unt as to over or underproducton for such month mmedately pror to the precedng month, ard also showng the cumulatve status of each gas well or unt n the feld. The amount of over or underproduc ton shall be determned by calculatng the dfference between the allowables and the!actual producton of each well for each unt. The status of each jwell as shown by such statement shall be con trollng n determnng overproducton or underproducton of gas ' therefrom. The deljverablty of each gas well n each gas pool. shall be determned: by the Board under the procedure set out n r ) Rule 41 of the Statjewde Rules and Regulatons and any amendments thereto. RULE 4 - PRODUCTION OF GAS AND LIQUIDS TO. CENTRAL FACILITIES (1) Should, producton from any well or wells completed n! the feld requre separaton and storage of lqud hydrocarbons, or other treatng operatons, whch may be more convenently or economcally performed through constructon and operaton of con soldated or central storage facltes desgned to process such gas and/or lquds so as to prevent waste and to protect the co- 'equal and correlatve rghts of all owners and royalty owners concerned then, upon wrtten request and submsson of approprate -7-

10 (b) Specfc gravty and temperature determnatons shall be made of the gas perodcally n order to provde a bass of measurement, and all.gap measurements shall be,. corrected for specfc gravty, temperature and super compressblty. (c) All wells flowng nto such facltes shall be connected to separators and to storage n such a manner as to allow perodc testng of each well under average operatng condtons. (d) Allocaton of lqud hydrocarbons produced nto stock tanks, and allocaton of saleable gas, shall be made on the basjs of the gas-ol rato of each ndvdual well as determned through perodc testng, and all meters used ^ n such determnatons shall be perodcally calbrated. (e) All such central facltes shall be operated n an orderly and prudent manner wth due respect to authorzed allowables,'well performance, faclty capacty,- and other factors pertnent to the allocaton to each owner, or de lverance to the purchaser for the account of each owner, of the gas and lqud hydrocarbons produced therefrom. All rules and regulatons contaned n the Statewde Order ^ no , and amendments thereto, not specfcally covered n the O : dagrams and descrptons of such consoldated or central facl- ', tes by the producer to the Supervsor of the Board, the Supervsor shall have the authorty to approve the constructon and operaton of same wthout specal, notce and hearng before the Board pro vded sad facltes comply wth the followng requrements: (a) Each well connected to any such faclty shall be provded wth an ndvdual flow lne meter of a type generally accepted n the ndustry. -8-

11 foregong rules are hereby adopted and wll apply by nference to the Aberdeen Gas Feld. The Board expressly reserves ts rght, after notce and hearng, to alter, amend, or repeal any and all of the foregong rules and regulatons. o -9-