Case KG Doc 610 Filed 02/28/14 Page 1 of 5 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

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1 Case KG Doc 610 Filed 02/28/14 Page 1 of 5 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: GREEN FIELD ENERGY SERVICES, INC., et. al. Debtor. Chapter 11 Jointly Administered CASE NO KG NOTICE OF PERFECTION, CONTINUATION OR MAINTENANCE OF LIEN PURSUANT TO SECTION 546(b) Mississippi Sand LLC ( Mississippi ) hereby gives notice pursuant to 11 U.S.C. 546(b) of the perfection of a lien upon mineral property pursuant to the laws of the state of Texas. In support of this filing, Mississippi would show the Court as follows: 1. Mississippi is a creditor in the above-captioned and numbered jointly administered cases. Mississippi furnished goods, materials, supplies, machinery, equipment and/or labor under contract with one or more of the Debtors in connection with oil and gas operations for which Mississippi has not been paid. The principal indebtedness is not less than $337,390.20, exclusive of contractual interest, attorneys fees and costs. Mississippi s claim is secured by statutory mineral subcontractor liens, including those liens described on the attached Exhibit A 1 (the Mineral Liens ). 2. Mississippi s Mineral Liens attach to and encumber (i) the subject well(s); (ii) the whole of such land or leasehold or lease for oil and gas purposes; (iii) the material, machinery and supplies furnished by the lien claimant; (iv) all other material, machinery and supplies used for mineral activities; (v) all personal property; (vi) all buildings; (vii) all appurtenances; (viii) all 1 In an effort to preserve judicial resources, the invoices are only attached to the Mineral Liens themselves, as filed in the real property records of the applicable county.

2 Case KG Doc 610 Filed 02/28/14 Page 2 of 5 other oil, gas and water wells and pipelines located on the subject leases; (ix) the oil and gas produced from the subject leases; and (x) the proceeds from the sale thereof (collectively the Subject Property ). See Tex. Prop. Code ; Abella v. Knight Oil Tools, 945 S.W.2d 847 (Tex. App. Houston [1st Dist.] 1997, no writ). 3. Mississippi s Mineral Liens encumber the following interests in the Subject Property: a. the interests of the contracting party (operator) and any mineral property owner on whose behalf such contracting party contracted as trustee, agent, receiver or mineral contractor; b. the interests of identified working interests owners with a recorded assignment as of the applicable mineral lien inception date; and c. the interests of any working interest owners without a recorded assignment as of the applicable mineral lien inception date. 4. Mississippi s Mineral Liens attach to and encumber any funds owed by any nonoperating working interest owners to the operator, as of the date of service of a mineral subcontractor lien notice and thereafter. Further, the holders of perfected mineral subcontractor liens have a first lien on the amounts owed by non-operating interest owners for operations performed on their behalf by the operator and are entitled to be paid directly from the nonoperating working interest owners in satisfaction of their respective mineral subcontractor liens. See F.D.I.C. v. Mid-America, Inc., 83 B.R. 933 (Bankr. N.D. Tex. 1988); Youngstown Sheet and Tube Co. v. Lucey Products Co., 403 F.2d 135 (5th Cir. 1968); Energy-Agri v. Eisenman Chemical Co., 717 S.W.2d 651 (Tex. Civ. App. Amarillo 1986, no writ). It is established law that:

3 Case KG Doc 610 Filed 02/28/14 Page 3 of 5 [Mineral Lien] Claimants who perfected their subcontractor s lien under the Texas Liens on Mineral Property Statute have first claim to the funds trapped by their notices. The second claim to the proceeds of the... [joint interest billings] is in favor of the unpaid [Mineral Lien] Claimants since for their services the Non- Operator is paying. The third claim to the... [joint interest billings] belongs to the F.D.I.C. as holder of a lien on... [the debtor s] accounts receivable. F.D.I.C. v. Mid-America Petroleum, Inc., 83 B.R. at Once filed and perfected, Mississippi s Mineral Liens incept and relate back to the date Mississippi commenced furnishing labor and/or materials on the subject leases and/or units. See Youngstown Sheet & Tube Co. v. Lucey Products Co., 403 F.2d 135, 143 (5th Cir. 1968); In re Meg Petroleum Corp., 61 B.R. 14, 20 (Bankr. N.D. Tex. 1986); Bandera Drilling Co. v. Lavino, 824 S.W.2d 782, 784 (Tex. App. Eastland 1992, no writ); Trevor Rees-Jones, Trustee for Atkins Petroleum Corp. v. Trevor Rees-Jones, Trustee for Apache Services, Inc., 799 S.W.2d 463 (Tex. App. El Paso 1990, writ denied). 6. Mississippi hereby gives notice of the filing and perfection of the statements and affidavits in support of liens on mineral property as to the Subject Property and associated rights thereon. Mississippi intends to enforce its interests in the Subject Property secured by the Mineral Liens. limitation. 7. Mississippi further claims all rights concerning the tolling of applicable statutes of 8. Under applicable non-bankruptcy law, Mississippi has the right to commence a lien foreclosure action and have a receiver appointed to seize and preserve the proceeds of production from the Subject Property pending a judicial foreclosure. See Tex. Prop. Code , ; Tex. Civ. Prac. & Rem. Code et seq.; Abella v. Knight Oil Tools, 945 S.W.2d 847 (Tex. App. Houston [1st Dist.] 1997, no writ). Further, Mississippi is required to file suit to enforce its mineral liens within two years after the last day in which the lien affidavit

4 Case KG Doc 610 Filed 02/28/14 Page 4 of 5 may be filed. See Tex. Prop. Code , Pursuant to 11 U.S.C. 546(b), Mississippi hereby gives notice in lieu of commencement of such an action to perfect, maintain or continue perfection of Mississippi s interest in the Subject Property. Mississippi further requests adequate protection of its interest in the Subject Property. 9. Any party in interest may obtain a copy of the Mineral Liens and Mineral Subcontractor Lien Notices by contacting: Mississippi Sand LLC c/o Cox Smith Matthews Incorporated Attn: Meghan E.B. DeBard 112 E. Pecan Street, Ste San Antonio, Texas Mississippi reserves the right to supplement and/or amend this Notice. Mississippi further reserves all rights with respect to the Mineral Liens under applicable law, including but not limited to seeking relief from the stay. WHEREFORE PREMISES CONSIDERED, please take notice that all proceeds of any sale of the property securing the Mineral Lien constitutes cash collateral under 11 U.S.C. 363(a) and may not be used unless each entity that has an interest in such cash collateral consents. Mississippi does not consent to the use of its cash collateral.

5 Case KG Doc 610 Filed 02/28/14 Page 5 of 5 Dated: February 28, 2014 Respectfully submitted, COX SMITH MATTHEWS INCORPORATED 112 E. Pecan St., Suite 1800 San Antonio, Texas (210) (210) (Fax) By: /s/ Meghan E.B. DeBard Meghan E.B. DeBard Texas State Bar No ATTORNEYS FOR MISSISSIPPI SAND LLC AND ILLINI STATE TRUCKING CO. CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the foregoing has been served electronically upon those parties registered to receive electronic notice via the Court s CM/ECF system on this 28 th day of February, /s/ Meghan E.B. DeBard Meghan E.B. DeBard

6 Case KG Doc Filed 02/28/14 Page 1 of 1 EXHIBIT A MISSISSIPPI SAND LLC RECORDED MINERAL LIENS Well/Lease County, State Amount Recording Information Dimmit, Texas $337, Inst. No Vol Pg Shell Wells, including, but not limited to Piloncillo C6H, Shell A-12, and D18GH-D Shell Wells, including, but not limited to Piloncillo C6H, Shell A-12, and D18GH-D Shell Wells, including, but not limited to Piloncillo C6H, Shell A-12, and D18GH-D Webb, Texas $337, Doc. No Vol Pg LaSalle, TX $337, Doc. No Vol. 758 Pg