Case LSS Doc 1073 Filed 01/23/16 Page 1 of 6 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

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1 Case LSS Doc 1073 Filed 01/23/16 Page 1 of 6 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE ) In re: ) Chapter 11 ) Quicksilver Resources Inc., et al., 1 ) Case No (LSS) ) Debtors. ) Jointly Administered ) Re: D.I. 636 DEBTORS OMNIBUS REPLY IN SUPPORT OF DEBTORS MOTION FOR (I) AN ORDER ESTABLISHING BIDDING PROCEDURES AND GRANTING RELATED RELIEF AND (II) AN ORDER OR ORDERS APPROVING THE SALE OF THE ASSETS The debtors and debtors in possession in the above-captioned chapter 11 cases (collectively, the Debtors ) hereby submit this omnibus reply (the Reply ) in support of the Debtors Motion for (I) an Order Establishing Bidding Procedures and Granting Related Relief and (II) an Order or Orders Approving the Sale of the Assets [D.I. 636] (the Motion ), 2 the assumption and assignment of the Assigned Contracts, and in reply to those formal and informal responses set forth on Exhibit A hereto (collectively, the Responses ). In support of this Reply, the Debtors respectfully state as follows: PRELIMINARY STATEMENT 1. By the Motion, the Debtors sought approval of a Court-approved process to sell substantially all of their assets pursuant to Bankruptcy Code section 363 in an effort to set these cases on a path to exit and maximize the value of these estates for the benefit of all creditors. 1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor s federal tax identification number, are: Quicksilver Resources Inc. [6163]; Barnett Shale Operating LLC [0257]; Cowtown Drilling, Inc. [8899]; Cowtown Gas Processing L.P. [1404]; Cowtown Pipeline Funding, Inc. [9774]; Cowtown Pipeline L.P. [9769]; Cowtown Pipeline Management, Inc. [9771]; Makarios Resources International Holdings LLC [1765]; Makarios Resources International Inc. [7612]; QPP Holdings LLC [0057]; QPP Parent LLC [8748]; Quicksilver Production Partners GP LLC [2701]; Quicksilver Production Partners LP [9129]; and Silver Stream Pipeline Company LLC [9384]. The Debtors address is 801 Cherry Street, Suite 3700, Unit 19, Fort Worth, Texas Capitalized terms used but not otherwise defined herein shall have the meanings ascribed in the Motion, the Sale Order, or the Asset Purchase Agreement (as defined in the Sale Order), as applicable.

2 Case LSS Doc 1073 Filed 01/23/16 Page 2 of 6 Following this Court s entry of the Bidding Procedures Order, the Debtors and their advisors spent nearly four months marketing their assets and working with potential bidders to ensure a robust sale and auction process. As a result of those efforts, the Debtors received six bids for all or a portion of their assets, three of which were qualified. In accordance with the Bidding Procedures Order, the Debtors selected the bid they, in consultation with the Bid Consultation Parties, deemed highest and best as the opening bid and the Auction commenced on January 20, The Auction lasted for nearly nineteen hours through two days and culminated in the Debtors declaring, in consultation with their professionals and the Bid Consultation Parties, an all-cash bid of $245 million submitted by BlueStone Natural Resources II, LLC ( BlueStone ) as the highest, best, and winning bid at the Auction (the Successful Bid ). The Debtors believe that consummation of the Successful Bid and the related Sale Transaction will maximize the value of the Debtors estates and enable the Debtors to advance these cases toward an efficient exit. Notwithstanding that certain Responses and reservations of rights have been filed by various parties in interest, including the Committee, the Debtors do not believe that any opposition to the actual Sale Transaction with BlueStone has been raised. As a result, and as set forth more fully herein and as supported by the evidentiary record to be set forth at the Sale Hearing, the Motion should be granted, the Sale Transaction approved, and any unresolved Responses overruled to the extent that they have not been otherwise adjourned. JURISDICTION 3. This Court has jurisdiction over this matter pursuant to 28 U.S.C. 157 and This matter is a core proceeding within the meaning of 28 U.S.C. 157(b)(2). 4. Venue in this Court is proper pursuant to 28 U.S.C and

3 Case LSS Doc 1073 Filed 01/23/16 Page 3 of 6 BACKGROUND A. The Sale 5. On October 6, 2015, the Court entered the Bidding Procedures Order [D.I. 681]: (i) approving proposed bidding procedures (the Bidding Procedures ) by which the Debtors were to solicit and select the highest or otherwise best offer for the sale of substantially all or a portion of their assets (the Assets ) through one or more sales of the Assets (each, a Sale Transaction or Sale executory contracts and unexpired leases, including notice of proposed cure amounts (the Assumption and Assignment Procedures approving the form and manner of notice with respect to certain procedures, protections, schedules, and agreements described therein (iv) scheduling (a) an auction (the Auction ) if the Debtors received two or more timely and acceptable Qualified Bids, and (b) a final hearing (the Sale Hearing ) to approve one or more. On November 6, 2015, the Debtors, in consultation with the Consultation Parties, determined that continuing certain of the deadlines set forth in the Bidding Procedures Order by approximately forty days would allow for a more robust auction, thus maximizing value. See Notice of Modified Sale Process Dates [D.I. 805]. 6. At the conclusion of a two-day, nearly nineteen-hour auction, the Debtors, in consultation with their professionals and the Bid Consultation Parties, selected BlueStone as the Successful Bidder for the Debtors Oil and Gas Assets. The Successful Bid submitted by BlueStone contemplates an all-cash purchase price of $245 million, with $240 million allocated to the Debtors oil and gas assets located in the Barnett Shale in the Fort Worth basin of North Texas (the Barnett Shale ) and $5 million allocated to the Delaware basin in West Texas ( West Texas ). The Debtors also designated Barnett Shale Gas LLC ( BSG LLC ) as the Backup Bidder. The Backup Bid proposes to purchase the Barnett Shale and West Texas for a 3

4 Case LSS Doc 1073 Filed 01/23/16 Page 4 of 6 total purchase price of $250 million, comprised of $93 million in cash and $157 million in credit bid. The Debtors will seek approval by this Court of the Successful Bid and the related Sale Transaction at the Sale Hearing scheduled for January 27, 2016 and, if approved, intend to close no later than the Outside Date of March 31, B. Contract Assumption and Assignment 7. Pursuant to the Bidding Procedures Order, which established procedures for assuming and assigning executory contracts and unexpired leases to a purchaser in connection with a Sale Transaction, the Debtors filed and served the Designated Contracts List on contract and lease counterparties on December 15, See D.I The Debtors have since supplemented the Designated Contracts List by filing and serving a Supplemental Designated Contracts List. See D.I The Debtors intend to file a further amended Designated Contracts List (the Amended and Restated Cure Schedule ) in advance of the Sale Hearing. In addition to identifying contracts and leases that may be assumed and assigned in connection with a Sale Transaction, the Designated Contracts List and the Supplemental Designated Contracts List provided proposed amounts, if any, the Debtors believed to be owing to the respective counterparty to cure any monetary defaults existing under the contract or lease (the Cure Costs ). 8. Certain of the counterparties listed on the Designated Contracts List and Supplemental Designated Contracts List and certain other interested parties (collectively, the Objectors ) filed the Responses to the relief requested in the Motion and/or the assumption or assignment of their respective executory contracts or unexpired leases in accordance with the Assumption and Assignment Procedures. A summary of the issues raised by each of the Objectors in their respective Responses is attached hereto as Exhibit A. 4

5 Case LSS Doc 1073 Filed 01/23/16 Page 5 of 6 REPLY 9. With respect to the Responses, the Debtors have worked diligently to resolve or otherwise address the issues raised by the Objectors. Indeed, a number of the Responses have been consensually resolved, with the corresponding resolution reflected on Exhibit A (collectively, the Resolved Responses ). Certain other Responses, however, have not yet been resolved but may be resolved or otherwise become moot without the need for a hearing before this Court if given the benefit of additional time. As such, the Debtors, in accordance with the Bid Procedures Order, have adjourned those Responses (collectively, the Adjourned Responses ) to a future hearing date and will work to resolve and document any resolution of the Adjourned Responses in advance of that date. Each of the Adjourned Responses are summarized, including the current status, and clearly marked as adjourned on Exhibit A. 10. The current status of each remaining Response (collectively, the Unresolved Responses ) as of the filing of this Reply is also listed on Exhibit A. Before the Sale Hearing, the Debtors will continue to work with the Objectors who have lodged Unresolved Responses that have not otherwise been adjourned in an effort to reach a consensual resolution. To the extent that any of the Unresolved Responses remain unresolved as of the Sale Hearing and are not otherwise being adjourned, however, the Debtors will be prepared to address such Responses at the Sale Hearing. For all of the reasons set forth herein, in the Motion and as will be set forth at the Sale Hearing, the Debtors request that the Court grant the Motion, set the Adjourned Responses for a future hearing date, and overrule any Unresolved Responses. 5

6 Case LSS Doc 1073 Filed 01/23/16 Page 6 of 6 WHEREFORE, for all of the foregoing reasons, the Debtors respectfully request that the Court (i) adjourn or overrule, as applicable, the Responses as listed in Exhibit A, (ii) grant the relief requested in the Motion and at the Sale Hearing, and (iii) grant such other relief as may be just and proper. Wilmington, Delaware Date: January 23, 2016 /s/ Rachel L. Biblo RICHARDS, LAYTON & FINGER, P.A. Paul N. Heath (DE 3704) Amanda R. Steele (DE 5530) Rachel L. Biblo (DE 6012) One Rodney Square 920 North King Street Wilmington, Delaware Telephone: (302) Facsimile: (302) and AKIN GUMP STRAUSS HAUER & FELD LLP Charles R. Gibbs (admitted pro hac vice) Sarah Link Schultz (admitted pro hac vice) Travis A. McRoberts (DE 5274) 1700 Pacific Avenue, Suite 4100 Dallas, Texas Telephone: (214) Facsimile: (214) Ashleigh L. Blaylock (admitted pro hac vice) Robert S. Strauss Building 1333 New Hampshire Avenue, N.W. Washington, DC Telephone: (202) Facsimile: (202) CO-COUNSEL FOR DEBTORS AND DEBTORS IN POSSESSION 6

7 Case LSS Doc Filed 01/23/16 Page 1 of 9 EXHIBIT A

8 Case LSS Doc Filed 01/23/16 Page 2 of 9 EXHIBIT A Summary of Objections and Responses to the Motion and Cure Schedule Responses Page 1. ENI Petroleum US LLC ( ENI ) [D.I. 985] 3 2. Cigna Health and Life Insurance Company, Life Insurance Company of North America and Cigna Behavioral Health, Inc. (collectively, Cigna ) [D.I. 989] 3 3. The City of Fort Worth, FW Sports Authority, and Alliance Airport Authority, Inc. (collectively, the Fort Worth Parties ) [D.I. 990, 991, 992] 3 4. Oracle America, Inc., successor in interest to Oracle USA, Inc. and Hyperion Solutions Corporation (collectively, Oracle ) [D.I. 993] 4 5. Crestwood Midstream Partners LP, Cowtown Pipeline Partners L.P., and Cowtown Gas Processing Partners L.P. (collectively, Crestwood ) [D.I. 994] 4 6. TG Barnett Resources, LP ( TG Barnett ) [D.I. 995, 1021, 1049] 4 7. Weatherford U.S., L.P., and its affiliates (collectively, Weatherford ) [D.I. 996] 5 8. SAP America, Inc. ( SAP ) [D.I. 998] 5 9. EnLink Gas Marketing, LP ( EnLink ) [D.I. 1020] U.S. Department of the Interior (the U.S. DoI ) [D.I. 1032] Fortune Creek G&P Partnership ( Fortune Creek ) [D.I. 1038] Western Marketing Inc. ( Western Marketing ) [D.I. 1046] Bosque County, Texas, Denton County, Texas, Hill County, Texas and Hill Central Appraisal District (the Ad Valorem Taxing Jurisdictions ) [D.I. 1053] 7

9 Case LSS Doc Filed 01/23/16 Page 3 of Official Committee of Unsecured Creditors (the Committee ) [D.I. 1055] Culberson County-Allamoore ISD, Culberson County, Dallas County, Fort Bend County, Hood CAD, Northwest ISD, Parker CAD, Reeves County, and Tarrant County (collectively, the Texas Tax Authorities ) [D.I. 1058] Google Inc. ( Google ) (Informal) Trunkline Gas ( Trunkline ) (Informal) IndemCo (Informal) Chaparral Lane Investment, LLC ( Chaparral Lane ) (Informal) Devon Energy (Informal) 8 2

10 Case LSS Doc Filed 01/23/16 Page 4 of 9 Response Disposition 1 1. ENI Petroleum US LLC ( ENI ) [D.I. 985] On December 28, 2015, ENI filed its Limited Objection [D.I. 985] setting forth the following with respect to ENI s contracts with the Debtors: (i) the Cure Schedule contains inaccurate listings of relevant cure amounts (a Cure Amount Allegation ); (ii) the Debtors have not provided adequate assurance of the contracts cure and/or future performance thereunder (an Adequate Assurance Allegation ); and (iii) the Debtors must assume and assign in full any contract or group of contracts that constitute a single merged executory contract (an Assumein-Full Allegation ). The objection also included a reservation to preserve ENI s alleged right to file additional objections and/or otherwise change their objection (a Future Objection RoR ). Adjourned to March 17, Discussions between the Debtors and ENI regarding its objection are ongoing. ENI s objection has been adjourned to continue discussions. 2. Cigna Health and Life Insurance Company, Life Insurance Company of North America and Cigna Behavioral Health, Inc. (collectively, Cigna ) [D.I. 989] On December 29, 2015, Cigna filed its Objection [D.I. 989] setting forth the following with respect to Cigna s contracts with the Debtors: (i) a Cure Amount Allegation; (ii) an Adequate Assurance Allegation; (iii) the Cure Schedule does not provide sufficient information to identify the contracts (a Contract Information Allegation ); and (iv) assumption and assignment of the contracts must be consistent with their terms and functions. Adjourned to February 10, In accordance with the Bidding Procedures Order, the Debtors are adjourning this matter to the hearing on February 10, 2016, to the extent that it is not otherwise resolved in advance of such hearing. 3. The City of Fort Worth, FW Sports Authority, and Alliance Airport Authority, Inc. (collectively, the Fort Worth Parties ) [D.I. 990, 991, 992] On December 29, 2015, the Fort Worth Parties filed three substantively identical objections, each, an Objection to Cure Amounts [D.I. 990, 991, 992] setting forth (i) a Cure Amount Allegation with respect to the Fort Worth Parties contracts with the Debtors and (ii) a Future Objection RoR. Resolved. The Fort Worth Parties objection has been resolved; provided, however, that the Fort Worth Parties reserve the right to assert cure obligations with respect to amounts that arise between November 1, 2015, and the date that the Sale Transaction closes. The Debtors intend to continue to pay amounts due under their leases with the Fort Worth Parties in the ordinary course of business. 1 Capitalized terms used but not defined herein shall have the meaning ascribed to them in the Reply. 3

11 Case LSS Doc Filed 01/23/16 Page 5 of 9 Response Disposition 1 4. Oracle America, Inc., successor in interest to Oracle USA, Inc. and Hyperion Solutions Corporation (collectively, Oracle ) [D.I. 993] On December 29, 2015, Oracle filed its Limited Objection [D.I. 993] setting forth the following with respect to Oracle s contracts with the Debtors: (i) a Contract Information Allegation and (ii) some (if not all) of the contracts may not be assigned absent consent by the non-debtor party thereto (a Prior Consent Allegation ). Adjourned to February 10, In accordance with the Bidding Procedures Order, the Debtors are adjourning this matter to the hearing on February 10, 2016, to the extent that it is not otherwise resolved in advance of such hearing. 5. Crestwood Midstream Partners LP, Cowtown Pipeline Partners L.P., and Cowtown Gas Processing Partners L.P. (collectively, Crestwood ) [D.I. 994] On December 29, 2015, Crestwood filed its Objection [D.I. 994] setting forth the following with respect to Crestwood s contracts with the Debtors (the Crestwood Contracts ): (i) a Cure Amount Allegation; (ii) any cure amount reconciliation is complicated by certain crediting terms under the contracts; and (iii) an Adequate Assurance Allegation. The objection also included a Future Objection RoR. Moot. The rejection of the Crestwood Contracts is a condition precedent to closing the Sale Transaction. Because these contracts are not being assumed and assigned to the proposed purchaser pursuant to the Sale Transaction, this objection is moot and need not be determined by the Court at the Sale Hearing. 6. TG Barnett Resources, LP ( TG Barnett ) [D.I. 995, 1021, 1049] TG Barnett filed its Objection [D.I. 995] on December 29, 2015, its Supplemental Objection [D.I. 1021] on January 6, 2016, and an additional Objection [D.I. 1049] on January 15, 2016, setting forth the following with respect to TG Barnett s contracts with the Debtors: (i) a Cure Amount Allegation; (ii) an Adequate Assurance Allegation; (iii) an Assume-in-Full Allegation; (iv) any documents memorializing the Sale Transaction(s) must explicitly preserve certain of TG Barnett s alleged interests in the Assets; (v) prior to any assumption of the contracts, TG Barnett s audit rights thereunder must be preserved; (vi) assignments due and owing under the contracts must be made before assignments thereof; and (vii) additional arguments concerning covenants running with the land. TG Barnett also reserved its alleged right to amend, supplement, or modify information regarding its cure obligations (a Cure RoR ). Adjourned to March 17, Discussions between the Debtors and TG Barnett regarding its objection are ongoing. TG Barnett s objection has been adjourned to continue discussions. 4

12 Case LSS Doc Filed 01/23/16 Page 6 of 9 Response Disposition 1 7. Weatherford U.S., L.P., and its affiliates (collectively, Weatherford ) [D.I. 996] On December 29, 2015, Weatherford filed its Objections [D.I. 996] setting forth the following with respect to Weatherford s contracts with the Debtors: (i) the Cure Amount Allegation; (ii) the Adequate Assurance Allegation; (iii) the Contract Information Allegation; (iv) certain of the contracts are not executory and may not be assumed or assigned; and (v) the assumption and assignment of certain of the contracts may prejudice Weatherford, including its alleged right to collect certain royalties. The objection also includes a Cure RoR. Adjourned to February 10, Discussions between the Debtors and Weatherford regarding its objection are ongoing. In accordance with the Bidding Procedures Order, the Debtors are adjourning this matter to the hearing on February 10, 2016, to the extent that it is not otherwise resolved in advance of such hearing. 8. SAP America, Inc. ( SAP ) [D.I. 998] On December 29, 2015, SAP filed a reservation of rights [D.I. 998] setting forth a Prior Consent Allegation with respect to the contracts between SAP and the Debtors (the SAP Contracts ). Adjourned to February 10, To the extent SAP s consent is required for the assignment (if any) of the SAP Contracts, such consent will be requested prior to any such assignment. In accordance with the Bidding Procedures Order, the Debtors are adjourning this matter to the hearing on February 10, 2016, to the extent that it is not otherwise resolved in advance of such hearing. 9. EnLink Gas Marketing, LP ( EnLink ) [D.I. 1020] On January 6, 2016, EnLink filed its Limited Objection and RoR [D.I. 1020] setting forth the following with respect to a settlement agreement between EnLink and certain of the Debtors (the Settlement Agreement ): (i) a Cure Amount Allegation; (ii) the agreement has already been rejected and therefore should not be listed on the Cure Schedule and may not be assumed or assigned; and (iii) a Prior Consent Allegation (to the extent the Settlement Agreement is assumable). Resolved. The Settlement Agreement will be removed from the Amended and Restated Cure Schedule. 5

13 Case LSS Doc Filed 01/23/16 Page 7 of 9 Response Disposition U.S. Department of the Interior (the U.S. DoI ) [D.I. 1032] The U.S. DoI received an extension (an Extension ) of the deadline for filing objections to the Cure Schedule (the Objection Deadline ) and, on January 11, 2016, filed its Objection [D.I. 1032] setting forth the following with respect to the U.S. DoI s contracts with the Debtors: (i) the Cure Amount Allegation; (ii) certain additional contracts between the Debtors and U.S. DoI are active but not listed on the Cure Schedule; (iii) these contracts may not be assigned absent the approval of the Secretary of the Interior, which is contingent on meeting all of the regulatory criteria for assignment including cure of defaults, adequate financial assurances, assumption of audit, and decommissioning obligations; and (iv) any purchaser of the Debtors assets must assume all decommissioning and plugging and abandonment obligations under the contracts. Going forward. The Debtors are actively working with counsel to U.S. DoI to resolve its objection. To the extent that the objection is not resolved before the Sale Hearing, or such other hearing to which the Debtors and the U.S. DoI may agree to adjourn the objection, any dispute with respect to the Sale Transaction will go forward before the Court. Adjourned to February 10, In accordance with the Bidding Procedures Order, the Debtors are adjourning the Cure Amount Allegation to the hearing on February 10, 2016, to the extent that it is not otherwise resolved in advance of such hearing. 11. Fortune Creek G&P Partnership ( Fortune Creek ) [D.I. 1038] Fortune Creek received an Extension and, on January 13, 2016, filed its Objection [D.I. 1038] setting forth a Cure Amount Allegation with respect to the contracts between Fortune Creek and the Debtors. Adjourned to February 10, In accordance with the Bidding Procedures Order, the Debtors are adjourning this matter to the hearing on February 10, 2016, to the extent that it is not otherwise resolved in advance of such hearing. 12. Western Marketing Inc. ( Western Marketing ) [D.I. 1046] On January 14, 2016, Western Marketing filed its Limited Objection [D.I. 1046] alleging that the Debtors are obligated to purchase certain products from Western Marketing in exchange for rent-free use of certain equipment that is owned by Western Marketing and with respect to which the Debtors have no ownership rights. Western Marketing therefore filed its objection (i) out of an abundance of caution to be sure that the Debtors are not seeking to sell the equipment as part of the Sale Transaction and (ii) to reserve Western Marketing s alleged rights with respect to any future assumption and assignment of the Debtors contracts with Western Marketing (the Western Marketing Contracts ). Going forward. The Debtors are actively working with Western Marketing to resolve their objection. To the extent that the objection is not resolved before the Sale Hearing, or such other hearing to which the Debtors and Western Marketing agree to adjourn the objection, any dispute with respect to the Sale Transaction will go forward before the Court. 6

14 Case LSS Doc Filed 01/23/16 Page 8 of 9 Response Disposition Bosque County, Texas, Denton County, Texas, Hill County, Texas and Hill Central Appraisal District (the Ad Valorem Taxing Jurisdictions ) [D.I. 1053] On January 15, 2016, the Ad Valorem Taxing Jurisdictions filed their objection [D.I. 1053] setting forth (i) they do not propose the sale so long as their interests are adequately protected, (ii) requesting that cash proceeds of the sale be set aside in an amount sufficient to satisfy the taxes, (iii) the proceeds from the sale of the collateral to which their ad valorem tax liens attach should not be distributed until they are paid in full; and (iv) if there is a credit bid by a junior lienholder, the property should be sold subject to the senior tax liens. Going forward. The Debtors are actively working with counsel to the Ad Valorem Taxing Jurisdictions to resolve their objection. To the extent that the objection is not resolved before the Sale Hearing, or such other hearing to which the Debtors and the Ad Valorem Taxing Jurisdictions agree to adjourn the objection, any dispute with respect to the Sale Transaction will go forward before the Court. 14. Official Committee of Unsecured Creditors (the Committee ) [D.I. 1055] On January 15, 2016, the Committee filed its reservation of rights [D.I. 1055] to preserve the Committee s alleged right to file an objection or otherwise seek relief with respect to (i) the value of encumbered and unencumbered assets included in any bid; (ii) any credit bid submitted by the Debtors second lien secured creditors; (iii) the recharacterization of certain adequate protection payments; (iv) Bankruptcy Code section 552(b); (v) Bankruptcy Code section 506(c); and (vi) the winning bid or bidder. The Committee also reserved its alleged right to take any additional action with respect to the Sale Transaction and be heard with respect to the Sale Transaction and to raise additional arguments or objections. Going forward. The Debtors are not aware of an actual objection to the Sale Transaction by the Committee at this time. The Debtors intend to work with the Committee to understand and address any potential objections to the Sale Transaction as necessary. To the extent that such objections are not resolved before the Sale Hearing, or such other hearing to which the Debtors and the Committee agree to adjourn such objections, any dispute with respect to the Sale Transaction will go forward before the Court. 15. Culberson County-Allamoore ISD, Culberson County, Dallas County, Fort Bend County, Hood CAD, Northwest ISD, Parker CAD, Reeves County, and Tarrant County (collectively, the Texas Tax Authorities ) [D.I. 1058] On January 15, 2016, the Texas Tax Authorities filed their Objection [D.I. 1058] setting forth (i) the attachment of certain tax liens to sale proceeds does not adequately protect the Texas Tax Authorities liens and claims; (ii) the proceeds from the sale of the collateral to which these liens attach should not be distributed until the authorities are paid in full; and (iii) if there is a credit bid by a junior lienholder, the property should be sold subject to the senior tax liens. Going forward. The Debtors are actively working with counsel to the Texas Tax Authorities to resolve their objection. To the extent that the objection is not resolved before the Sale Hearing, or such other hearing to which the Debtors and the Texas Tax Authorities agree to adjourn the objection, any dispute with respect to the Sale Transaction will go forward before the Court. 16. Google Inc. ( Google ) (Informal) Counsel for Google contacted Akin Gump to request additional information about certain contracts between Google and the Debtors listed in the Cure Schedule (the Google Contracts ). Resolved. The Debtors determined that the Google Contracts have expired by their terms and, as such, the Google Contracts will be removed from the Amended and Restated Cure Schedule. 7

15 Case LSS Doc Filed 01/23/16 Page 9 of 9 Response Disposition Trunkline Gas ( Trunkline ) (Informal) Counsel for Trunkline contacted Akin Gump to request additional information about certain agreements between Trunkline and the Debtors listed in the Cure Schedule (the Trunkline Contracts ). Specifically, Trunkline asserted that the Trunkline Contracts were not eligible for assumption as they were amendments to a contract previously rejected by order of this Court. Resolved. The Trunkline Contracts will be removed from the Amended and Restated Cure Schedule. 18. IndemCo (Informal) Counsel for IndemCo contacted Akin Gump to request that additional information relating to certain bonds (the Bonds ) and supplements (the Supplements ) be added to the Cure Schedule. Resolved. After discussions, the Debtors and IndemCo agreed that no revisions to the Amended and Restated Cure Schedule were necessary. 19. Chaparral Lane Investment, LLC ( Chaparral Lane ) (Informal) The owner of Chaparral Lane contacted Akin Gump, as it believed that notwithstanding its inclusion on the Cure Schedule, no agreement exists between the Debtors and Chaparral Lane (the Chaparral Lane Lease ). Resolved. The Chaparral Lane Lease will be removed from the Amended and Restated Cure Schedule. 20. Devon Energy (Informal) Counsel from Devon Energy contacted Akin Gump to request that certain contracts between the Debtors and Devon Energy (the Devon Energy Contracts ) be added to the Cure Schedule. Resolved. The Debtors will either add the Devon Energy Contracts to the Amended and Restated Cure Schedule if the Purchaser intends to assume the Devon Energy Contracts, or the Devon Energy Contracts will not appear on the Amended and Restated Cure Schedule if they are not proposed to be assumed and assigned to the Purchaser. 8