DAILY & WOODS A PROFESSIONAL LIMITED LIABILITY COMPANY ATTORNEYS AT LAW

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1 JERRY L. CANFIELD, P.A. THOMAS A. DAILY, P.A. WYMAN R. WADE, JR., P.A. DOUGLAS M. CARSON, P.A. ROBERT R. BRIGGS, P.A. C. MICHAEL DAILY, P.A.! L. MATTHEW DAVIS, P.A. COLBY T. ROE Also Licensed in Oklahoma! Also Licensed in Wyoming & North Dakota DAILY & WOODS A PROFESSIONAL LIMITED LIABILITY COMPANY ATTORNEYS AT LAW KMW BUILDING 58 SOUTH SIXTH STREET P.O. BOX 1446 FORT SMITH, AR TELEPHONE (479) FAX (479) JAMES E. WEST DALE CARLTON PHILLIP E. NORVELL OF COUNSEL HARRY P. DAILY ( ) JOHN P. WOODS ( ) JOHN S. DAILY ( ) BEN CORE ( ) August 7, 2012 Arkansas Oil and Gas Commission 2215 West Hillsboro El Dorado, Arkansas Re: ORDER REFERENCE NO Application of Weiser-Brown Oil Company for Establishment of an Exploratory Drilling Unit consisting of the East 30 acres of the Southeast Quarter of the Southwest Quarter; the Southwest Quarter of the Southeast Quarter, and the West 10 acres of the Southeast Quarter of the Southeast Quarter of Section 19, Township 14 South, Range 21 West, Nevada County, Arkansas and for Integration of all Unleased Mineral Owners and Uncommitted Working Interest Owners Commissioners: Weiser-Brown Oil Company, P.O. Box 500, Magnolia, AR 71753, hereby applies to the Arkansas Oil and Gas Commission for the establishment of an exploratory drilling unit and for the integration of all unleased mineral interests and uncommitted leasehold working interests in its proposed drilling unit which is described above. 1. The proposed drilling unit is in a lay-down configuration and contains 80 acres, more or less The proposed drilling unit is geographically within the confines of the Willisville Southwest Field, but its proposed objective formation (the Smackover Limestone Formation) is not yet within the confines of the field. The Applicant has applied for and extension to the field rules of the Willisville Southwest Field to include the Smackover Limestone Formation (Docket No ). Nevertheless, the Applicant requests that if, for any reason, the proposed unit does not qualify as an extension to the Willisville Southwest Field at the time of hearing, the above unit be designated as an exploratory drilling unit. The proposed drilling unit is prospective of oil, since the geological data available to applicant indicates that there is a reasonable possibility that a well drilled therein would recover oil in paying quantities. Persons who own at least an undivided 50% interest in the right to drill and produce oil and/or gas from the total proposed unit area have agreed to the formation of such exploratory unit. Applicant proposes to drill a well at a non-exceptional location which is within the Southeast Quarter of the Southwest Quarter of Section 19. The well will be drilled to an

2 approximate depth of 5,450 feet to test the Smackover Limestone and any intervening formation. 2. Applicant owns oil and gas leases covering a substantial part of the proposed unit. Weiser-Brown Operating Company should be named as operator of the well. The person or persons to be integrated are shown on Exhibit "A" attached hereto. 3. Applicant has made diligent efforts to negotiate with the non-participating leasehold working interest owners, each of said parties owning an oil and gas leasehold interest in the proposed unit, but applicant has been unable to secure an assignment of the leasehold interest on an equitable basis or to secure participation by said parties in the drilling of the proposed well. 4. Applicant states that it has made repeated efforts to negotiate with the owners of the unleased mineral interests in order to agree on a plan of development of said drilling unit; that those owners have been offered an opportunity to participate in the proposed well; that they have been offered a fair and reasonable bonus consideration for the execution of an oil and gas lease covering their interests; that they have been furnished with a proposed oil and gas lease and a copy of the form of the AAPL operating agreement which applicant proposes to use in connection with the drilling of said well; but that all of the efforts of applicant have produced no agreement by said parties. 5. Applicant states that it is in the best interest of conservation and the protection of correlative rights of all interested parties that the proposed unit be developed for oil and gas production without undue delay. 6. Applicant requests that the Arkansas Oil and Gas Commission set this matter for public hearing, and after same, issue its order, in the alternative, that: (a) (b) The East 30 acres of the Southeast Quarter of the Southwest Quarter; the Southwest Quarter of the Southeast Quarter, and the West 10 acres of the Southeast Quarter of the Southeast Quarter of Section 19, Township 14 South, Range 21 West, Nevada County, Arkansas, is an extension to the Willisville Southwest Field, or The East 30 acres of the Southeast Quarter of the Southwest Quarter; the Southwest Quarter of the Southeast Quarter, and the West 10 acres of the Southeast Quarter of the Southeast Quarter of Section 19, Township 14 South, Range 21 West, Nevada County, Arkansas be established as an exploratory drilling unit, 7. In order that applicant may proceed with the orderly development of said unit, applicant hereby requests that the Arkansas Oil and Gas Commission issue its order, in the alternative, that:

3 (a) (b) The owners of non-consenting oil and gas leasehold working interests indicated above shall participate in the cost of drilling, testing and completion of the test well to be drilled by applicant on the captioned unit, subject to the terms of an Operating Agreement which substantially employs the terms of the AAPL Operating agreement, with a COPAS attached. All of the non-consenting oil and gas leasehold working interests within the proposed unit shall be force pooled and integrated into said unit, and a reasonable risk factor shall be established and assessed as a penalty against said integrated interest. 8. Applicant further states that due to the risks and costs inherent in the drilling of the proposed well, the Commission should fix a reasonable risk factor to be assessed as a penalty against the integrated interests within the unit. The risk factor should be applied to the proportionate cost and expense of drilling, completing and equipping the well, which would have been borne by the interest of said parties had they participated. Applicant requests that if the integrated parties do not elect within 15 days after issuance of the Commission's order as between alternatives (a) and (b), it shall be assumed that the integrated parties elected alternative (b) in lieu of the right to participate in the working interest in said unit. 9. In order that applicant may proceed with the orderly development of said unit, applicant hereby requests that the Arkansas Oil and Gas Commission issue its order, in the alternative, that: (a) (b) (c) Each of the owners of the unleased mineral interests indicated above execute and deliver to applicant a one year oil and gas lease for a bonus consideration of $ per net mineral acre to be paid as fair and reasonable compensation in lieu of the right to participate in the working interest in said unit, and that said oil and gas lease provide for a royalty of 1/5th on oil and gas. Each of the owners of unleased mineral interests indicated above be force pooled and integrated into the captioned unit with assessment of a reasonable risk factor penalty against their interest. The owners of unleased mineral interests shall participate in the cost of drilling, testing and completion of the test well to be drilled by applicant on the captioned unit, subject to the terms of an operating agreement which substantially employs the terms of the AAPL Operating Agreement. Applicant further requests that said mineral owners be required to elect within fifteen (15) days after issuance of the Commission's order which method will be pursued in the development of the above described unit, and, in the event no election is made, that it shall be assumed that the owner of said unleased mineral interest has

4 elected to accept a bonus of $ per net mineral acre as compensation in lieu of the right to participate in the working interest in said unit, and with the royalty to be 1/5th. 10. Applicant further states that due to the risks and costs inherent in the drilling of the proposed well, the Commission should fix a reasonable risk factor to be assessed as a penalty against the integrated interests within the unit. The risk factor should be applied to the proportionate cost and expenses of drilling, completing and equipping the well, which would have been borne by the interest of said parties had they participated. 11. Applicant further requests that this Commission's order specifically provide that any party electing either to participate or be force pooled subject to recoupment of a risk factor penalty be bound by the terms of the attached AAPL Operating Agreement for the life of commercial production within the unit so that all future unit operations might be proposed pursuant to the provisions of such agreement without the necessity of future action by this Commission. 12. Applicant also requests that said order be made applicable to any unknown spouse, heir, devisee, personal representative, successor or assign of said parties. 13. The names and addresses of parties interested in this proceeding are set forth in Exhibit "A" attached hereto and made a part hereof. 14. Please note the appearance of Thomas A. Daily of Daily & Woods, P.L.L.C., P.O. Box 1446, Fort Smith, Arkansas, 72902, on behalf of applicant. Very truly yours, Thomas A. Daily jmt

5 Interested Parties List Integration Mineral Owners A.B. HILL ADDRESS UNKNOWN CHARLES E. SMITH, JR., GLORIA RINGOLD, & GENEVA SPROLES ADDRESS UNKNOWN HUGHES FAMILY TRUST C/O EVANDA P. HUGHES & DOROTHY ADDRESS UNKNOWN J. E. MCKINNEY ESTATE C/O GLADYS DUCKERY 314 NEVADA 123 WALDO, AR MARY ANN DANIEL 8523 THACKERY ST., APT. #7206 DALLAS, TX MARY F. MCINTOSH ADDRESS UNKNOWN STANLEY M. BAYMAN ADDRESS UNKNOWN

6 Interested Parties List Integration Working Interest Owners William Elliott Ranney heirs Address unknown

7 RESUME OF EFFORTS TO SAID LEASE TOWNSHIP 14 SOUTH, RANGE 21 WEST SECTION 19: The Northeast Quarter of the Southwest Quarter of the Southeast Quarter; and The Northwest Quarter of the Southeast Quarter of the Southeast Quarter. Gross Acres: Net Acres: A.B. Hill Estate Address unknown May 31, 2012 June 1, 2012 June 8, 2012 June 27, 2012 Checked old leases, royalty payment records, and peoplefinders.com to locate address and contact information. Checked probate records in Nevada County. Called other landman. James Roy Brown, Auby Rowe, III. No success. Checked probates in other counties. July 3, 2012 July 20, 2012 August 3, 2012 James Roy Brown check courthouse records again. Called McKenzie & Vasser abstract to try to find information. Called Lyndia at Lion Oil to try to find information.

8 RESUME OF EFFORTS TO SAID LEASE TOWNSHIP 14 SOUTH, RANGE 21 WEST SECTION 19: The Northeast Quarter of the Southwest Quarter of the Southeast Quarter; and The Northwest Quarter of the Southeast Quarter of the Southeast Quarter. Gross Acres: Net Acres: Charles E. Smith, Jr., Gloria Ringold, and Geneva Sproles Address unknown May 31, 2012 June 1, 2012 June 8, 2012 June 27, 2012 Checked old leases, royalty payment records, and peoplefinders.com to locate address and contact information. Checked probate records in Nevada County. Called other landman. James Roy Brown, Auby Rowe, III. No success. Checked probates in other counties. July 3, 2012 July 20, 2012 August 3, 2012 James Roy Brown check courthouse records again. Called McKenzie & Vasser abstract to try to find information. Called Lyndia at Lion Oil to try to find information.

9 RESUME OF EFFORTS TO SAID LEASE TOWNSHIP 14 SOUTH, RANGE 21 WEST SECTION 19: The Northeast Quarter of the Southwest Quarter of the Southeast Quarter; and The Northwest Quarter of the Southeast Quarter of the Southeast Quarter. Gross Acres: Net Acres: Hughes Family Trust Address unknown May 31, 2012 June 1, 2012 June 8, 2012 June 27, 2012 Checked old leases, royalty payment records, and peoplefinders.com to locate address and contact information. Checked probate records in Nevada County. Called other landman. James Roy Brown, Auby Rowe, III. No success. Checked probates in other counties. July 3, 2012 July 20, 2012 August 3, 2012 James Roy Brown check courthouse records again. Called McKenzie & Vasser abstract to try to find information. Called Lyndia at Lion Oil to try to find information.

10 RESUME OF EFFORTS TO SAID LEASE TOWNSHIP 14 SOUTH, RANGE 21 WEST SECTION 19: The Northeast Quarter of the Southwest Quarter of the Southeast Quarter; and The Northwest Quarter of the Southeast Quarter of the Southeast Quarter. Gross Acres: Net Acres: J.E. McKinney Estate c/o Gladys Dockery 314 Nevada 123 Waldo, AR May 31, 2012 June 1, 2012 June 6, 2012 June 14, 2012 June 28, 2012 July 3, 2012 July 11, 2012 July 20, 2012 Checked old leases, royalty payment records, and peoplefinders.com to locate address and contact information. Mailed lease package to Gladys Dockery, Trustee of the Pirdis McKinney Jones Left message Left message Left message mailed another lease package. left message left message August 2, 2012 left message

11 RESUME OF EFFORTS TO SAID LEASE TOWNSHIP 14 SOUTH, RANGE 21 WEST SECTION 19: The Northeast Quarter of the Southwest Quarter of the Southeast Quarter; and The Northwest Quarter of the Southeast Quarter of the Southeast Quarter. Gross Acres: Net Acres: Mary Ann Daniel 8523 Thackery St, Apt #7206 Dallas, TX May 31, 2012 June 1, 2012 June 6, 2012 June 28, 2012 July 3, 2012 July 11, 2012 July 20, 2012 Checked old leases, royalty payment records, and peoplefinders.com to locate address and contact information. Mailed lease package. Left message Left message mailed another lease package. left message left message

12 RESUME OF EFFORTS TO SAID LEASE TOWNSHIP 14 SOUTH, RANGE 21 WEST SECTION 19: The Northeast Quarter of the Southwest Quarter of the Southeast Quarter; and The Northwest Quarter of the Southeast Quarter of the Southeast Quarter. Gross Acres: Net Acres: Mary F. McIntosh Address unknown May 31, 2012 June 1, 2012 June 8, 2012 June 27, 2012 Checked old leases, royalty payment records, and peoplefinders.com to locate address and contact information. Checked probate records in Nevada County. Called other landman. James Roy Brown, Auby Rowe, III. No success. Checked probates in other counties. July 3, 2012 July 20, 2012 August 3, 2012 James Roy Brown check courthouse records again. Called McKenzie & Vasser abstract to try to find information. Called Lydia at Lion Oil to try to find information.

13 RESUME OF EFFORTS TO SAID LEASE TOWNSHIP 14 SOUTH, RANGE 21 WEST SECTION 19: The Northeast Quarter of the Southwest Quarter of the Southeast Quarter; and The Northwest Quarter of the Southeast Quarter of the Southeast Quarter. Gross Acres: Net Acres: Stanley M. Bayman Address unknown May 31, 2012 June 1, 2012 June 8, 2012 June 27, 2012 Checked old leases, royalty payment records, and peoplefinders.com to locate address and contact information. Checked probate records in Nevada County. Called other landman. James Roy Brown, Auby Rowe, III. No success. Checked probates in other counties. July 3, 2012 July 20, 2012 August 3, 2012 James Roy Brown check courthouse records again. Called McKenzie & Vasser abstract to try to find information. Called Lyndia at Lion Oil to try to find information.

14 RESUME OF EFFORTS TO SAID LEASE TOWNSHIP 14 SOUTH, RANGE 21 WEST SECTION 19: THE SOUTH HALF TO THE SOUTHWEST QUARTER OF THE SOUTHEAST QUARTER. Gross Acres: Net Acres: Williams Elliott (W.E.) Ranney address unknown September 6, 2011 September 7, 2011 September 22, 2011 October 4, 2011 October 5, 2011 November 15, 2011 November 16, 2011 January 10, 2012 January 26, 2012 February 9, 2012 February 15, 2012 March 7, 2012 March 16, 2012 March 29, 2012 April 5, 2012 April 6, 2012 Researched court records, probate, and tax records for heirship information. Run several Ranney names in Arkansas and Louisiana. Since Tom Stuart also had interest in this tract, I called him and ask if he knew of Ranney. He said this was old interest acquired from this father and he did not know Ranney. Drove to Bossier Parish courthouse and run names Ranney, Myers, etc. Found Succession on Doris Kate Myers Ranney, widow of W.E. Called attorney that handled the Succession. They provided probate documents for W.E. and Doris Myers Ranney. W.E. and Doris were married several times to different people. I started calling some of the heirs Louisana Succession stated W.E. had 2 sons, which would own this interest. I made contact with Robert (Bob) Henry Harrison, which is one the heirs of Doris. He knew of the 2 sons, but didn't know where they lived or how to get in touch with them. He said one of them was in jail at one time, but it was a long time ago. W.E. was a geologist and did some work with the O'Briens in Shreveport, LA. I called Jenny, who works with O'Brien, and said they would research and ask some of the older employees. I followed up with Jenny with O'Brien. She said he did use to work with them, but did not have any contact information on heirs. I called Phillip Davis, a geologist in Shreveport area. I asked him if he knew W.E. Ranney. He said he would ask around. I found a Myers name in the producing tax books so I called them. She advised that they are of no relation. Phillips Davis called me back and could not find any information. I called James Roy Brown, Landman and previous Nevada county judge that lives in Nevada County. He did not know Ranney. I called Auby Rowe, III, Landman that lives in Miller County. He did not know Ranney. James Roy Brown run the names again at courthouse. Checked probate, tax cards, etc, again. He asked people who work at McKenzie Abstract office in Prescott. Alan Ribble checked with acquaintances that he knew. No success. June 12, 2012 Phillip Davis called back and said he talked with John Palmer. John said Geoge Moran might know something about Ranney. They both used to work with O'Brien.

15 EXHIBIT C Applicant s statement regarding Operating Agreement The applicant requests incorporation of the Model Form Joint Operating Agreement for Liquid Hydrocarbon Wells approved by the Arkansas Oil and Gas Commission on February 22, 2010, with Paragraph III.1.A.(1) of the COPAS providing for a drilling well rate of $4, and a producing well rate of $450.00, and with the following proposed revisions, deletions and/or insertions, if applicable: NONE

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18 AFFIDAVIT AND TESTIMONY OF RODNEY MAY, A PETROLEUM LANDMAN STATE OF ARKANSAS COUNTY OF NEVADA Rodney May, having been first duly sworn, makes the following affidavit: My name is Rodney May I am a petroleum landman employed by Atlanta Exploration Co., an independent petroleum land service provider retained by Weiser Brown Oil Co. to assist in securing oil and gas leases and/or commitments to participate in certain wells including the applicant's planned well, which is the subject of this application (the "subject proposed well".) I understand that I am submitting this Affidavit, under oath, as testimony in this docketed matter. This Affidavit is submitted in lieu of live testimony in this matter and is materially the same as the testimony which I would present herein as a live witness. I am familiar with the information contained within the Summary of Efforts To Secure Leases and/or Participation which has been pre-filed as an exhibit in connection with this Application. The summary of efforts to secure such leases and/or participation documented within that exhibit is true and correct, to the best of my knowledge, as of immediately before the filing of the Application. If there are material additional efforts made to secure such leases and/or participation up to, and including, the hearing date, they will be documented on a supplemental or replaced exhibit, which, I pledge, will likewise be true and correct, to the best of my knowledge. To the best of my knowledge, as of the date of the filing of the Application the best terms (bonus and royalty) paid in the unit containing the subject proposed well are $100/ac, l/5th royalty. In the event that the applicant secures an oil and gas lease upon any better terms than those set out above, within such unit, I pledge that I will prepare and file a supplemental affidavit setting out such better lease terms or the applicant will present live testimony explaining such better terms. I know of my own personal knowledge that the applicant and its participating partners have secured oil and gas leases covering approximately % of the net mineral acres contained within the unit containing the proposed subject well, as of the date of the filing of the Application. I also know of my own personal knowledge that persons consenting to the drilling of the subject proposed well controlled at least 50% of the right to drill within the unit as of the date of the filing of the Application.

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