BEFORE THE CORPORATION COMMISSION OF THE STATE OF OKLAHOMA RIMROCK RESOURCE OPERATING, LLC HORIZONTAL DRILLING AND SPACING UNIT

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1 BEFORE THE CORPORATION COMMISSION OF THE STATE OF OKLAHOMA APPLICANT: RELIEF SOUGHT RIMROCK RESOURCE OPERATING, LLC HORIZONTAL DRILLING AND SPACING UNIT CAUSE CD NO T LEGAL DESCRIPTION: SECTION 35, TOWNSHIP 2 NORTH, RANGE 2 WEST, GARVIN COUNTY, OKLAHOMA APPLICANT: RELIEF SOUGHT: RIMROCK RESOURCE OPERATING, LLC HORIZONTAL DRILLING AND SPACING UNIT ILE DI JUN COURT CLERKS OFFICE - OKC CORPORATION COMMISSION OF OKLAHOMA CAUSE CD NO T LEGAL DESCRIPTION: SECTION 2, TOWNSHIP 1 NORTH, RANGE 2 WEST, GARVIN COUNTY, OKLAHOMA REPORT OF THE ADMINISTRATIVE LAW JUDGE These causes came on for hearing before Keith T. Thomas, Administrative Law Judge (AU) for the Corporation Commission of the State of Oklahoma, in the Commission's Courtroom, Jim Thorpe Building, Oklahoma City, Oklahoma, pursuant to notice given as required by law and the rules of the Commission for the purpose of taking testimony and reporting to the Commission. SUMMARY OF THE CASE: These two applications of Rimrock Resource Operating, LLC (Applicant) seek the establishment of 640-acre horizontal drilling and spacing units for the drilling of a multiunit well in Section 35, Township 2 North, Range 2 West, Garvin County, Oklahoma (Section 35); and Section 2, Township 1 North, Range 2 West, Garvin County, Oklahoma (Section 2). The common sources of supply to be spaced are the Sycamore, Woodford and Hunton. Protestant Irene Hackett (Protestant) owns mineral interest in both sections.

2 The Applicant is aware there is a fault in Section 2, but does not believe that the presence of said fault should curtail exploration within a 640-acre horizontal spacing units. The Applicant opposes Protestant's suggestion that the Commission create irregular 480-acre horizontal units instead of 640-acre horizontal units. The Protestant states that the fault in Section 2 separates the north half of that section from the south half. The Protestant suggests that it would be appropriate to create two 480-acre horizontal spacing units comprised of the east half of Section 35 and the northeast quarter of Section 2; and to create a 480-acre horizontal spacing unit comprised of the west half of Section 35 and the northwest quarter of Section 2. Additionally, the Protestant believes that if a 640-acre horizontal unit is created, she will be sharing the proceeds from production with mineral owners in the south half of Section 2, who will not be contributing due to the sealing fault. R. L. Clampitt (Clampitt) is an operator with interests in close proximity to the proposed spacing units. Clampitt supports the applications for 640-acre horizontal spacing units believing this is the best way to prevent waste. RECOMMENDATIONS: It is the recommendation of the Administrative Law Judge that the Application of Rimrock Resource Operating, LLC in Causes CD T and CD T seeking to establish 640-acre horizontal drilling and spacing units in Section 35, Township 2 North, Range 2 West, Garvin County, Oklahoma, and in Section 2, Township 1 North, Range 2 West, Garvin County, Oklahoma, be denied; and that Protestant's request for affirmative relief be granted. HEARING DATES: March 3, 2016 March 4, 2016 APPEARANCES: Ron M. Barnes and Grayson M. Barnes, attorneys, appeared on behalf of Applicant, Rimrock Resource Operating, LLC. Gregory L. Mahaffey, attorney, and Benjamin F. Hackett, attorney, appeared on behalf of Protestant, Irene Hackett. Charles B. Davis, attorney, appeared on behalf of R. L. Clampitt & Associates, supporting the applications of Rimrock Resource Operating, LLC. FINDINGS AND SUMMARY OF EVIDENCE: A. The following numbered exhibits were accepted into evidence in Cause CD T: 1. An amended Exhibit "A" with the listed respondents to the application. Page 2 of 20

3 2. A nine section plat map centered on Section 35, Township 2 North, Range 2 West, Garvin County, Oklahoma, with production data. 3. A nine section Woodford structure map centered on Section 35, Township 2 North, Range 2 West, Garvin County, Oklahoma. 4. A nine section Woodford isopach map centered on Section 35, Township 2 North, Range 2 West, Garvin County, Oklahoma. 5. A development cost comparison illustration showing the cost of development under different drilling strategies. 6. Commission Order No with an attached fifteen section plat map centered on Section 28 and Section 33, Township 6 North, Range 14 East, Pittsburg County, Oklahoma and Section 4, Township 5 North, Range 14 East, Pittsburg County, Oklahoma. This order was issued in Cause CD T, which was an application for irregular standup horizontal drilling and spacing units. The attached plat map shows the existence of a fault in the south half of Section The application of Rimrock Resource Operating, LLC for a multiunit horizontal well in Cause CD T. 8. A twelve section plat map centered on Section 35, Township 2 North, Range 2 West, Garvin County, Oklahoma and Section 2, Township 1 North, Range 2 West, Garvin County, Oklahoma with well data included. This plat map has a 480-acre unit illustrated in the E12 of Section 35 and the NE/4 of Section A twelve section Woodford isopach map centered on Section 35, Township 2 North, Range 2 West, Garvin County, Oklahoma and Section 2, Township 1 North, Range 2 West, Garvin County, Oklahoma. This plat map has a 480-acre unit illustrated in the E/2 of Section 35 and the NE/4 of Section A twelve section Woodford structure map centered on Section 35, Township 2 North, Range 2 West, Garvin County, Oklahoma and Section 2, Township 1 North, Range 2 West, Garvin County, Oklahoma. This plat map has a 480-acre unit illustrated in the E/2 of Section 35 and the NE/4 of Section Two structural cross section illustrations. Each illustration compares the logs from three wells. 12. Well production data for wells in Township 1 North, Range 2 West, Garvin County, Oklahoma and Township 2 North, Range 2 West, Garvin County, Oklahoma. 13. Well data, including ultimate oil recovery, for seven Woodford wells in Township 2 North, Range 3 West, Garvin County, Oklahoma. Page 3 of 20

4 B. The following numbered exhibits were accepted into evidence in Cause CD T: 1. An amended Exhibit "A" with the listed respondents to the application. 2. A nine section plat map centered on Section 2, Township 1 North, Range 2 West, Garvin County, Oklahoma, with production data. 3. A nine section Woodford structure map centered on Section 2, Township 1 North, Range 2 West, Garvin County, Oklahoma. 4. A nine section Woodford isopach map centered on Section 2, Township 1 North, Range 2 West, Garvin County, Oklahoma. 5. A development cost comparison illustration showing the cost of development under different drilling strategies. 6. Commission Order No with an attached fifteen section plat map centered on Section 28 and Section 33, Township 6 North, Range 14 East, Pittsburg County, Oklahoma and Section 4, Township 5 North, Range 14 East, Pittsburg County, Oklahoma. This order was issued in Cause CD T, which was an application for irregular standup horizontal drilling and spacing units. The attached plat map shows the existence of a fault in the south half of Section The application of Rimrock Resource Operating, LLC for a multiunit horizontal well in Cause CD T. 8. A twelve section plat map centered on Section 35, Township 2 North, Range 2 West, Garvin County, Oklahoma and Section 2, Township 1 North, Range 2 West, Garvin County, Oklahoma with well data included. This plat map has a 480-acre unit illustrated in the E/2 of Section 35 and the NE/4 of Section A twelve section Woodford isopach map centered on Section 35, Township 2 North, Range 2 West, Garvin County, Oklahoma and Section 2, Township 1 North, Range 2 West, Garvin County, Oklahoma. This plat map has a 480-acre unit illustrated in the E/2 of Section 35 and the NE/4 of Section A twelve section Woodford structure map centered on Section 35, Township 2 North, Range 2 West, Garvin County, Oklahoma and Section 2, Township 1 North, Range 2 West, Garvin County, Oklahoma. This plat map has a 480-acre unit illustrated in the E/2 of Section 35 and the NE/4 of Section Two structural cross section illustrations. Each illustration compares the logs from three wells. 12. Well production data for wells in Township I North, Range 2 West, Garvin County, Page 4 of 20

5 Oklahoma and Township 2 North, Range 2 West, Garvin County, Oklahoma. 13. Well data, including ultimate oil recovery, for seven Woodford wells in Township 2 North, Range 3 West, Garvin County, Oklahoma. C. At the request of the Court the attorneys made opening statements. D. Mr. Barnes called Debra Langley to give testimony. Ms. Langley told the Court that she is a professional landman in the employ of the Applicant. Ms. Langley has testified before the courts of the Oklahoma Corporation Commission on more than one occasion and has had her qualifications as an expert in the field of petroleum land management accepted. Her qualifications were retained without objection. Ms. Langley sponsored Exhibits I and 7 in each of the causes. The entirety of her testimony is contained in the transcript of the proceedings. I. Under direct examination by Mr. Barnes, the Witness testified that Applicant owns an interest in Section 35 and in Section 2, and that said interest is about equally divided between the east and west halves of the sections. Ms. Langley stated that Clampitt owns 152 acres in Section 35 and approximately 128 acres in Section 2. Clampitt's acreage in Section 35 is in the west half. Clampitt's acreage is in both halves of Section 2. The Witness told the Court that the Protestant owns acreage in the east half of both sections. Ms. Langley stated the Protestant's acreage holding is 13 acres in Section 2 and "about" 13 acres in Section 35. The Witness exercised due diligence in giving notice of the instant cause to anyone having a right to share in production from the formations being spaced. 2. Under cross examination by Mr. Mahaffey the Witness stated that the Applicant is planning to drill a multi-unit well in Sections 2 and 35. The Applicant has filed an application in Cause CD , seeking a Commission order authorizing the drilling of a multi-unit horizontal well in Sections 2 and 35. Ms. Langley acknowledged that the surface location and the vertical portion of the proposed well will be in SE/4 of the NE/4 of Section 2. However, a surface agreement has not been settled for the use of the surface. As stated in the application in Cause CD the interim allocation for the proposed well is 33% for Section 2 and 67% for Section 35. The Witness is not aware of any intention of the Applicant to drill a lateral from the north half of Section 2 into the south half of the section, or from south to north in that section. Mr. Mahaffey informed the Witness that the Protestant prefers a 480-acre drilling and spacing unit comprised of the E/2 of Section 35 and the NE/4 of Section 2, as opposed to the 640-acre drilling and spacing unit applied for in the instant cause. The Protestant owns acres in the NE/4 of the NE/4 of Section 2. The acreage owned by the Protestant calculates to roughly one third of the 40 acre tract. In Section 35 the Protestant owns acres in the S/2 of the SE of the section. Counsel for the Protestant then asked the Witness about the allocation of 67% for Section 35 and 33% for Section 2, if the application for a 640-acre spacing unit is approved by the Pages of 20

6 Commission. Protestant's share was calculated at slightly more than 2%. The 2% figure is what would be used if the Protestant elected to participate and also used to calculate Protestant's share of production. Mr. Mahaffey then made the same calculations based upon a hypothetical 480-acre spacing unit preferred by the Protestant. If an irregular 480-acre spacing unit were approved by the Commission, the Protestant's share would be slightly more than 5.6%. Under the Applicant's plan of development, based upon a 640-acre spacing unit, 16.66% of the production from the well would be allocated to the S/2 of Section 2 even though none of the lateral would exist in the S12. It is possible that the Applicant will not drill any additional wells in either Section 35, Section 2, or the S/2 of Section 2. Mr. Mahaffey then inquired about Clampitt's interest in the proposed spacing unit. The Applicant and Clampitt are attempting to reach an agreement regarding Clampitt's interest. The Protestant is currently involved in a dispute with Clampitt. It is the position of the Protestant that leases on the Protestant's minerals taken by Clampitt have expired. The Applicant is claiming an interest of 163 acres in Section 35. The Witness stated that said 163 acre interest is exclusive of the Clampitt acres. In Section 2 the Applicant is claiming an interest of 280 acres. 3. On re-direct examination by Mr. Barnes the Witness told the Court that she did the land work, but was not consulted as to whether the unit should be a standard 640-acre unit, or an irregular 480-acre unit. Ms. Langley stated that her title work in the area is ongoing. With the Clampitt acreage the Applicant's total in Section 35 would be 315 acres. The Witness stated that the total amount of leasehold in the section was not a factor in the consideration of the size of the drilling and spacing unit. The planning of additional wells in the unit is outside the scope of what this witness does. A well drilled from the S/2 of Section 2 into Section 11 would be on another unit. 4. Under additional cross examination by Mr. Mahaffey the Witness told the Court that Clampitt does not own any interest in the E12 of Section 35. The Applicant owns 8 acres in the E12 of Section 35. Therefore, most of the 163 acres owned by the Applicant in Section 35 is in the W/2 of the section. Ms. Langley does not believe the Commission should base spacing on ownership. 5. Following questioning of Ms. Langley by the Court, Mr. Barnes had additional questions for the Witness. Ms. Langley told the Court that she was part of the team that made decisions about the drilling of a well. The Witness stated that while she was part of Applicant's team, her role was limited to issues dealing with land and not the size of the drilling and spacing units. E. Mr. Davis called Darla Ragland to give testimony. She told the Court that she is an independent professional landman engaged by R. L. Clampitt & Associates, Inc. for the purpose of determining Clampitt's interest in Section 35 and Section 2. Ms. Ragland has testified before the courts of the Oklahoma Corporation Commission on more than one occasion and has had her qualifications as an expert in the field of petroleum land management accepted. Her qualifications were retained without objection. The entirety of her testimony is contained in the Page 6 of 20

7 transcript of the proceedings. 1. Under direct examination by Mr. Davis, the Witness testified that she is in the process of determining Clampitt's interest in the two sections of interest. Ms. Ragland told the Court that her work has determined that as to Section 35, Clampitt owns 290 acres in the Third Deese. However, Clampitt's interest in all zones is 32.5 acres in that section. Clampitt operates wells producing from the Third Deese. The Witness did not refute the testimony of Ms. Langley as to Clampitt's ownership in Section 35 and Section 2. According to the Witness, running title in the two sections is difficult. Clampitt wants it on the record that it believes it owns an interest in both sections. 2. Under cross examination by Mr. Mahaffey the Witness stated that Clampiu's claim of ownership in Section 35 includes leases that cover Protestant's mineral interest. Ms. Ragland believes the Protestant's minerals are being held by a Third Deese well. The Third Deese is shallower than the Woodford. Ms. Ragland believes that Protestant's minerals are included in the 32 acres claimed by Clampitt in Section 2, but only as to the Third Deese. The Witness is aware that the Protestant is claiming the Clampitt leases have expired due to noncommerciality. Ms. Ragland did not have an explanation for the differences between her acreage totals and those of Ms. Langley. Additionally, the Witness did not know where Clampitt's leasehold was located within Section 2. F. The Applicant then called Mike Fouke to give testimony. He told the Court that he is a professional geologist in the employ of Applicant. The Witness has testified before the Commission on numerous occasions and has had his qualifications as an expert in the field of petroleum geology accepted. His qualifications were retained without objection. Mr. Fouke sponsored Exhibits 2 through 4 in each of the causes. The entirety of his testimony is contained in the transcript of the proceedings. I. Under direct examination by Mr. Barnes, the Witness testified that there are no horizontal Woodford wells in the twelve sections centered on Sections 35 and 2. It is the intent of the Applicant to drill horizontal wells in the area to produce from the Woodford, with the Sycamore and Hunton as associated common sources of supply. The Applicant is seeking to establish each section as a 640-acre drilling and spacing unit. Additionally, the Applicant is asking that the Sycamore and Hunton be permitted at a distance not closer than six hundred sixty feet from the unit boundary, with the Woodford being permitted at a distance not closer than one hundred sixty-five feet from the north and south lines, and three hundred thirty feet from the east and west lines of the unit. Mr. Fouke told the Court that the requested relief would co-exist with existing one hundred sixty acre vertical spacing for the Sycamore, Woodford and Hunton. The Applicant possesses 3D Seismic data on the area and the Witness stated that said data was shared with Protestant's witness. The seismic data provided information on faulting in the area. Mr. Fouke told the Court that the throw of the significant fault running east/west through the center of Section 2 is approximately two hundred feet. However, the throw of the fault in Section 2 is not greater than the thickness of the Woodford. The Witness stated Page 7 of 20

8 Cause CD T that the Woodford is a very tight unconventional reservoir. There is a portion of the Woodford which extends contiguously from one half of Section 2 into the other half of Section 2. It is intended that the proposed well would be drilled from the N12 of Section 2 into Section 35. The Applicant does not intend to drill its horizontal well through the fault. Mr. Fouke stated that his calculation of the thickness of the Woodford differed from the calculation of the Protestant. The Applicant used a log to determine the thickness of the Woodford, while the Protestant did not. It is the belief of the Witness that if the Protestant had the log, its calculated thickness of the Woodford would be similar to that of the Applicant. Mr. Fouke believes the proposed well will be successful and that additional wells would be drilled based upon the success of the initial well. Further, the Witness told the Court that 640-acre units are appropriate because the Woodford is a tight shale with low permeability and low porosity. Due to the nature of the Woodford it will take numerous wells to fully develop the section and as such 640-acre spacing units are warranted. It is not anticipated that the initial well will be able to affect the reservoir in the entire 640-acre spacing unit. The tight nature of the Woodford and the presence of the fault in Section 2 will limit the recovery from the initial well to be drilled in Section 35 and Section 2. Finally, Mr. Fouke told the Court that the Sycamore and Hunton were included as associated common sources of supply because they could be affected during the completion of the well. 2. On cross examination by Mr. Mahaffey the Witness acknowledged that he had not drilled any horizontal wells in the area of the Applicant's proposed well. Upon questioning about Rimrock's application for a multi-unit well in Cause CD T, Mr. Fouke stated that the application accurately depicted the track of the proposed well in the E12 of the E/2 of Sections 35 and 2. The Applicant intends to build the surface location of the well in the SE of the NE/4 of Section 2. It is estimated that the true vertical depth of the well will be approximately 8,000 feet, and with a measured depth of about 15,000 feet. The Applicant will be drilling the well from south to north because it wants to drill the well in an 'up-dip" direction to aid in drainage. Mr. Fouke used a gamma marker to show the top of the Woodford. The Witness told the Court how he calculated the thickness of the Woodford. The estimates of Mr. Fouke and the geologist for the Protestant regarding the thickness of the Woodford in sections adjoining Sections 35 and 2 vary only slightly. Mr. Fouke shows the thickness of the Woodford in a well sited in the NW/4 of the SE/4 of Section 2 as being 253 feet thick. The Woodford Isopach maps prepared by the geologist for the Protestant do not show the Woodford thickness in that well. Mr. Fouke stated he determined the thickness of the Woodford in the well based upon a log he had for the well. The Witness stated the log was in the public domain and did not know why the Protestant had not seen the log. Regarding faulting, the Witness identified a fault in the NW/4 of Section 35. Mr. Fouke did not have an expert opinion on that fault. Mr. Fouke and the Protestant's geologist place the east/west trending fault in Section 2 close to the center of the section. The Witness based his placement of the fault on seismic data. The Applicant shared the seismic data with the Protestant. Mr. Fouke believes the fault in Section 2 is a normal fault and not a thrust fault. Page 8 of 20

9 The Witness reiterated that the Applicant did not want to drill through the fault. He believes there will be instability in the formation in the fault zone. Mr. Fouke estimated the fault zone to have a width of "a couple hundred feet", but acknowledged it could be three hundred and thirty feet in width. The Witness told the Court that the drilling of more wells would provide data on the exact width of the fault zone. Additionally, the throw of the fault could be less than one hundred and fifty feet in the east half of Section 2, but increases in the west half of the section. To develop the minerals in the S/2 of Section 2 would require another well. Mr. Fouke considers the Sf2 of Section 2 to be productive of the Woodford, but no well site has been selected. It is probable that to develop the S/2 of Section 2 would require pairing that part of Section 2 with Section 11 to the south in a multi-unit well. Upon questioning by Mr. Mahaffey the Witness agreed that the Woodford underlies the entire area. Mr. Fouke acknowledged that regardless of whether the size of the spacing unit is 640-acres or 480-acres, the same low porosity and low permeability rock would underlie the spacing unit. The Applicant intends to drill its first well down the center of the section; therefore, the Protestant's proposed 480-acre stand-up unit in the E/2 of Section 35 and the NE/4 of Section 2 would not allow the drilling of the initial well in the desired location. The Witness knows that potentially six or more wells can be drilled in a unit. Mr. Fouke acknowledged that if the Commission approved the Protestant's 480-acre unit plan, the Applicant would not be prevented from drilling a one and a half mile long lateral. Mr. Mahaffey asked the Witness about the potential of unitizing for the purpose of drilling multiple wells in multiple sections, but Mr. Fouke stated he did not possess the knowledge to speculate on developing the area through unitization. The Witness was aware that the Applicant would have to obtain Commission approval to drill any additional wells. It is not likely that anyone would drill a one half mile lateral. 3. On re-direct examination by Mr. Barnes the Witness stated that he does not know what further development will be necessary for the units being sought. Mr. Fouke anticipates that the development of the Sf2 of Section 2 would be part of a multi-unit well as is intended for the N12 of Section Upon additional cross examination by Mr. Mahaffey the Witness stated that every owner in the spaced unit should participate in production from the unit. Owners in the Sf2 of Section 2 would participate in a well drilled in the proposed unit even though the proposed lateral does not penetrate the Woodford in the Sf2 of said section. 5. Under additional examination by Mr. Barnes the Witness told the Court that owners in Section 2 would participate in the production from multi-unit wells drilled in Sections 2 and 35, and from multi-unit wells drilled in Sections 2 and In response to questions from the Court the Witness answered additional questions under cross examination by Mr. Mahaffey. Mr. Fouke stated that the fault in the NW/4 of Section 35 did not have as much throw as the fault through the center of Section 2. The Commission allows a Woodford well to be as close as 165 feet from the north and south boundary lines Pane 9 of 20

10 due to limited north/south drainage. Applicant intends to drill the vertical portion of the well approximately 200 feet from the fault running through the center of Section 2. Mr. Fouke does not believe there will be any contribution from the S12 of Section 2 to wells drilled in the N12 of Section 2. G. Mr. Barnes then called Bob McNulty to give testimony. Mr. McNulty told the Court that he is a consulting petroleum engineer engaged by the Applicant. The Witness has testified before the Commission on numerous occasions and has had his qualifications as an expert in the field of petroleum engineering accepted. His qualifications were retained without objection. Mr. McNulty sponsored Exhibit 5 in each of the causes. The entirety of his testimony is contained in the transcript of the proceedings. 1. Under direct examination by Mr. Barnes the Witness told the Court why he would recommend 640-acre drilling and spacing units instead of the 480-acre unit proposed by the Protestant. The oil and gas industry has the ability to drill horizontal wells longer than one mile. However, the Commission will only allow drilling and spacing units as large as 640 acres. Therefore, the oil and gas industry seeks 640-acre spacing in multiple sections. This gives operators the option to drill multi-unit wells. Mr. McNulty believes that a 480-acre unit could result in some of the acreage being "orphaned" and part of the acreage would not be developed because the tract is too small. The Witness stated that the perforations in a Woodford well would effect 100 to 150 feet north and south of the completion spot and 200 to 300 feet east and west. Even though the drainage area is only 100 to 150 feet north and south, and 200 to 300 feet east and west, the 640-acre unit is ideal. An operator needs the information from the initial well and perhaps as many as two or three additional wells to determine the reservoir characteristics. Without this data an operator will not know how many Woodford wells will be needed to fully develop the unit. Mr. McNulty investigated the economics of a 480-acre unit comprised of the E/2 of Section 35 and the NE/4 of Section 2, and for a 320-acre laydown unit in the S/2 of Section 2. It would not be economically efficient to drill a one half mile lateral in the S/2 of Section 2. A more practical plan would be to drill a multi-unit well in the S/2 of Section 2 and Section 11. Mr. McNulty testified regarding the establishment of irregular spacing units for another operator. The establishment of said spacing units involved the presence of a fault and were created to conform to the location of the fault. The Witness distinguished that situation from the instant application by stating that the multi-unit rule did not exist when the earlier unit was established. Originally the Commission's rules only allowed a well to be no closer than 330 feet or 660 feet from the north and south lines, depending upon the size of the unit. To get any closer to the unit boundary required a location exception. However, the new rules allow a Woodford well to be no closer than 165 feet from the north or south lines. The Commission's rules evolved to fit reality. Mr. McNulty stated the irregular units necessary in the past, are no longer necessary. He believes with the current rules allowing multi-unit wells, it is best to create 640-acre spacing units for the drilling of multi-unit wells. The Witness told the Court that the goal is to drill a long lateral leaving the least amount of Page 10 of 20

11 stranded reserves. Then, regarding the fault in Section 2, the Witness agreed with Mr. Fouke's assessment that it would be imprudent for the proposed well to be south of the fault. Being too close to the fault could negatively effect the completion of the well. Development of the area would depend on the data obtained from the initial well. If the initial well is successful, the entire area will be developed. Mr. McNulty stated that from a development standpoint a 480-acre unit would make it more difficult to place subsequent wells. In regard to Protestant's suggestion of using unitization to develop the acreage, the Witness told the Court he believes that unitization would be too complicated. Mr. McNulty said unitization would require too much "pre-planning". Since the Commission began permitting multi-unit wells, the Witness does not remember requesting spacing units that were altered to accommodate faults. The Witness told the Court that the acreage on the north side of the fault in the NW/4 of Section 35 could be part of a multi-unit well involving Section 35 and Section On cross examination by Mr. Mahaffey the Witness stated that he agreed with Mr. Fouke that it would not be advisable to drill through the fault or complete the well in close proximity to the fault. Mr. McNulty has seen Woodford wells drilled as close as 150 feet to the north and south boundaries without any impact to adjoining units. As to the drilling of the proposed well, it should take less than 500 feet to make the curve and land the lateral. The Applicant intends to drill the vertical portion of the wellbore at a location 200 feet from the south line of the NE/4 of Section 2. The Woodford beyond 150 feet from the southernmost perforation will not contribute production; therefore, the S/2 of Section 2 will not contribute production. Mr. McNulty agreed that the length of the proposed lateral in the E/2 of Sections 35 and 2 would be the same whether the unit is a conventional 640-acre unit, or an irregular 480-acre unit as proposed by the Protestant. Additionally, the Witness acknowledged that the proposed 480-acre unit would not result in fewer wells than a 640- acre unit. It would not be economical to drill a lateral limited to the S/2 of Section 2. To develop the S/2 of Section 2, it would have to be part of a multi-unit well with Section 11. Mr. McNulty is aware that in the past the Commission took the presence of faults into consideration when it created irregular spacing units. The Shale Reservoir Development Act took effect in Mr. McNulty told the Court that he has never been part of a unitization authorized under the Shale Unitization Act. The Witness believed that process to be complicated. Mr. Mahaffey asked the Witness about another operator's plan of development for unitization west of the Applicant's proposed unit. Mr. McNulty noted that said plan of development showed that no well was planned down the center of the unit. The Shale Unitization Act does away with the need for Commission authorized location exceptions or increased well densities. Mr. McNulty did not know if unitization would be advantageous. Based upon his calculation of recoverable reserves, the Witness believes that five multiunit wells should be drilled in Sections 35 and 2. The area used by the Witness to make his volumetric calculation was the 960-acres comprised of the N/2 of Section 2 and the entirety of Section 35. Mr. McNulty believes that some operators are drilling more wells in a unit because some of the wells target the upper portion of the Woodford, while some of the wells Page 11 of 20

12 target the lower portion. 3. On additional direct examination by Mr. Barnes the Witness reiterated that he believes that 640-acre spacing units are the appropriate sized units. Mr. McNulty acknowledged that it is possible that reserves could be left behind. However, the Witness stated that a 480-acre unit would face the same possibility. Mr. McNulty then answered questions about differences between his volumetric calculations for specific wells in the area and the volumetric calculations made by others for the same wells. The Witness did not know why his estimates of ultimate recovery were higher than those of the Protestant. 4. Mr. Mahaffey then conducted additional cross examination of the Witness. Mr. McNulty answered questions about the ultimate recovery of wells referenced during direct examination by Mr. Barnes. 5. Upon additional questioning by Mr. Barnes the Witness told the Court that he did not agree with the methodology used in the Protestant's comparison of calculated ultimate recovery in wells. Mr. McNulty stated that the wells being compared are in different reservoirs, are at different depths, the gas to oil ratio differed, and one of the wells was excluded from the comparison. 6. On additional cross examination by Mr. Mahaffey the Witness told the Court that he believed the ultimate recovery would be two hundred fifty-seven thousand barrels from a lateral that is seventy-three hundred feet in length. Mr. McNulty agreed that the actual number of wells needed in the unit depended upon the recovery factor. 7. The Court then had questions for the Witness. Mr. McNulty stated it is his opinion that if the initial well in the proposed 640-acre unit is drilled in the W/2 of the W12 of Sections 2 and 35, the second well in the unit should be drilled as far away from the initial well as possible. The Witness told the Court that since the Applicant intends to develop several sections in the area, this strategy would allow the Applicant to obtain a greater amount of data on the reservoir. 8. In response to questions from the Court the Witness answered additional questions under examination by Mr. Mahaffey. Mr. McNulty gave his definition of "hopping the fault". The Witness told the Court that he takes this expression to mean drilling through the fault. 9. Upon additional questioning by Mr. Barnes the Witness stated that he believes there are reserves in the Woodford south of the fault in Sections 2. Mr. McNulty believes that as long as there is sufficient thickness, there will be reserves in the Woodford south of the fault in Section Under additional examination by Mr. Mahaffey the Witness told the Court he believed the Woodford was of sufficient thickness in Section 11. H. The Protestant then called its first witness, Gerard J. Medina, to give testimony. Mr. Medina Page 12 of 20

13 told the Court that he is a consulting petroleum geologist contracted by the Protestant. Mr. Medina has testified before the Commission on numerous occasions and has had his qualifications as an expert in the field of petroleum geology accepted. His qualifications were retained without objection. Mr. Medina sponsored Exhibit 6 and Exhibits 8 through 12 in each of the causes. The entirety of his testimony is contained in the transcript of the proceedings. 1. Upon questioning by Mr. Mahaffey on direct examination the Witness stated that he concurred with Mr. Fouke's testimony that the Sycamore, Woodford and Hunton underlie Section 35 and the N/2 of Section 2. Mr. Medina agreed that if the proposed well is productive, it would produce predominately oil. The Witness then testified about his geologic interpretation of the area. Mr. Medina told the Court that his structure map is 'very similar" to that of Mr. Fouke's. The Witness then gave the Court his expert opinion about the east/west fault that runs through the center of Section 2. The fault is a normal fault and not a reverse fault or thrust fault. According to Mr. Medina the fault zone exists in an area of approximately three hundred feet. Mr. Medina's interpretation of the fault does not have said fault dipping as far south in the W/2 of Section 2 as does Mr. Fouke. The Witness then testified regarding his isopach map. Mr. Medina used data from the same wells used by Mr. Fouke with the exception of a well in the NW/4 of the SE/4 of Section 2. The Witness told the Court that he could not find a log for that well even though Mr. Fouke stated he had found a log for the well. Based upon the information he has obtained about this well, Mr. Medina says his interpretation would differ from that of Mr. Fouke. However, Mr. Medina told the Court the only difference would be that the Applicant shows the Woodford as being slightly thicker in the SE/4 of Section 2. The Witness stated that this differing of interpretation would not impact his opinion of the appropriate size of the spacing unit. As to the appropriate size of the spacing unit needed by the Applicant for a well in Sections 35 and 2, Mr. Medina recommended a 480-acre spacing unit. The Witness said his opinion was in the best interest of protection of correlative rights and the prevention of waste. In the opinion of the Witness, a 480-acre spacing unit would not prevent the Applicant from drilling as many multi-unit wells as would be necessary in Sections 35 and 2. Mr. Medina believes that due to the fact that the mineral owners in the S/2 of Section 2 would not be contributing to the production from the well, the S/2 of Section 2 should not be part of the spacing unit. The Witness agreed that it is most likely that the S/2 of Section 2 will be developed with Section 11. Mr. Medina told the Court that it would be possible for an operator to create a 480-acre unit in the SE/4 of Section 2 and the E/2 of Section 11 that would "mirror" the Protestant's proposed 480-acre unit in the NE/4 of Section 2 and the E/2 of Section 35. There is no guarantee that the Applicant will drill any wells other than the proposed initial well. The Witness does not believe it is equitable for non-contributing owners to share in the production. If a 480-acre unit is established instead of the 640-acre unit the Applicant seeks, the Applicant could still drill a well down the center of the sections by forming a unitized unit. 2. On cross examination by Mr. Barnes the Witness stated that his placement of the fault in Section 2 differed only slightly from that of Mr. Fouke. Additionally, Mr. Medina Page 13 of 20

14 acknowledged that his estimates of thickness using a Completion Report and those made by Mr. Fouke using a log were, also, only slightly different. No horizontal wells have been drilled in Section 35 or Section 2. Further, no horizontal wells have been drilled in any of the sections adjoining Sections 35 and 2. Mr. Medina told the Court that he has not been involved in any applications for irregular horizontal units, such as the 480-acre unit proposed by the Protestant. The Witness also acknowledged that he has never testified for a client seeking a unitized unit as suggested by the Protestant in the instant cause. If a well is not allowed in the center of the sections, but rather there are three in one half and two in the other half, Mr. Medina agreed that more hydrocarbons would be drained from the half with the additional well. If the Commission grants the Applicant an irregular 480-acre spacing unit, the only way a well could be drilled down the center of the sections is if the Applicant seeks a unitization. 3. On re-direct examination by Mr. Mahaffey the Witness reiterated that if a 480-acre unit is granted by the Commission, the Applicant could drill a well down the center of the section if the Applicant obtains an order allowing unitization. 4. Upon questioning by the Court the Witness stated that he did not believe the thickness of the Woodford to be as great in Section 11 as it is in Section 2. If the Woodford in Section 11 is not as "attractive" as the Woodford in Section 2, it is not likely that a multi-unit well will be drilled in the S/2 of Section 2 and Section Following the Court's inquiry of the Witness, Mr. Barnes had additional questions for Mr. Medina. None of the exhibits presented show the thickness of the Woodford in Section 11. Mr. Fouke did not testify about the thickness of the Woodford in Section 11. Mr. Medina acknowledged that he did not calculate the thickness of the Woodford in Section 11. I. Mr. Davis called Mr. Jon Stromberg to the stand for the purpose of giving testimony regarding well data he prepared and which had been referred to during the testimony of a previous witness in the instant proceedings. The Witness told the Court that he is a consulting petroleum engineer engaged by the Protestant. Mr. Stromberg has testified before the Commission on numerous occasions and has had his qualifications as an expert in the field of petroleum engineering accepted. His qualifications were retained without objection. Mr. Stromberg sponsored Exhibit 13 in each of the causes. The entirety of his testimony is contained in the transcript of the proceedings. 1. On direct examination by Mr. Davis the Witness addressed a production data sheet he prepared. The data is from several horizontal Woodford wells in Township 2 North, Range 3 West, Garvin County, Oklahoma. 2. Under examination of Mr. Stromberg by Mr. Mahaffey, the Witness stated he believes the wells cited in the data sheet he prepared are some of the closest horizontal Woodford wells to the Applicant's proposed well. The data contains Mr. Stromberg's estimate of each well's ultimate oil recovery. Four of the wells on which Mr. Stromberg focused are four of Page 14 of 20

15 the wells identified by Mr. McNulty. The calculations on ultimate recovery by Mr. Stromberg differ from those of Mr. McNulty. Mr. Stromberg opined that the difference in the ultimate recovery figures was due to how the decline curve of the wells was interpreted. The Witness told the Court that he was not aware of any wells drilled by the Applicant in Garvin County. 3. On cross examination by Mr. Barnes the Witness agreed that the area in which Applicant's proposed well is to be drilled is referred to as the "up-dip" portion of the SCOOP (South Central Oklahoma Oil Province). Mr. Stromberg stated that other than the instant causes he has not ever been hired to evaluate horizontal drilling in the SCOOP. 4. Upon questioning by the Court the Witness stated that in regard to the figures on the ultimate recovery for the wells referenced in the exhibits, he believes that his numbers, and those of Mr. McNulty, are just calculated estimates. Mr. Stromberg reiterated that the discrepancy in his numbers and those of Mr. McNulty can be attributed to how the calculations were made. The wells referenced are relatively new wells. Although Mr. Stromberg has very limited experience with horizontal Woodford wells in the SCOOP, he has extensive experience with horizontal Woodford wells in other areas of the state. 5. In response to questions from the Court the Witness answered the additional questions of Mr. Mahaffey. Mr. Stromberg gave the Court a definition for hyperbolic decline. The Witness explained the difference between a hyperbolic decline and an exponential decline. The type of decline seen in shale plays is almost always a hyperbolic decline. Mr. Stromberg expects that a substantial portion of the production from a shale well, such as the one proposed by the Applicant, would be produced within the first three years of production. 6. Upon additional questioning by Mr. Barnes the Witness told the Court about his experience with horizontal Woodford wells in other areas. As far as whether an operator should drill a horizontal Woodford well or not, Mr. Stromberg has been involved in that decision making process 10 to 15 times. However, Mr. Stromberg has testified in "thousands" of spacing hearings for such wells. The Witness acknowledged that he has virtually no experience in the SCOOP, which is close to the proposed well site. It is anticipated that wells in this area will produce a substantial amount of natural gas. J. Mr. Mahaffey then called Irene Hackett to give testimony. The Witness told the Court that she owns a mineral interest in Section 35, Township 2 North, Range 2 West, Garvin County, Oklahoma; and in Section 2, Township 1 North, Range 2 West, Garvin County, Oklahoma. This was the first time Ms. Hackett had given testimony in the courts of the Oklahoma Corporation Commission. The entirety of her testimony is contained in the transcript of the proceedings. 1. On direct examination by Mr. Mahaffey the Witness stated that she concurred with Ms. Langley's statements regarding her, Ms. Hackett's, mineral ownership in Sections 35 and 2. Ms. Hackett holds mineral acres in Section 35 and mineral acres in Section 2. The Witness owns surface rights in both sections as well. Ms. Hackett believes it would be unfair to create 640-acre spacing units in Sections 35 and 2. The Witness believes a multi- Page 15 of 20

16 unit well drilled on two 640-acre units in Sections 35 and 2 would be inequitable since the S/2 of Section 2 would not contribute to the production. Ms. Hackett understands that if the Commission approves her request for the establishment of a 480-acre spacing unit in the E/2 of Section 35 and the NE/4 of Section 2 as an alternative to the 640-acre units, she would not participate in any wells drilled in the S/2 and NW/4 of Section 2, or the W12 of Section Under cross examination by Mr. Barnes the Witness told the Court that she hired the experts who evaluated the Applicant's spacing application. The experts she hired recommended a 480-acre spacing unit. Ms. Hackett believes a 480-acre unit is in her best interest. Ms. Hackett's share of production will be greater if the Commission approves a 480-acre spacing unit rather than the 640-acre units being sought by the Applicant. 3. Ms. Hackett was then asked additional questions by Mr. Mahaffey. The Witness told the Court that she heard the expert witnesses testify that the S/2 of Section 2, and the W/2 of Sections 35 and 2, will not contribute production to the proposed well. Ms. Hackett stated it would not be fair for non-contributing acreage to share in the well's production. 4. Mr. Barnes then conducted further cross examination of the Witness. Ms. Hackett understands that if a 640-acre unit is established for Section 2, she would receive her proportionate share of the production from any well drilled south of the fault in Section 2. K. Mr. Barnes called Mike Fouke to give additional testimony. 1. Upon questioning by Mr. Barnes the Witness told the Court the well drilled in the SE/4 of Section 11 only had 87 feet of Woodford due to the fact that the well drilled through a fault. The Woodford in that particular well was shortened by the fault. Mr. Fouke told the Court that the Woodford is approximately 250 feet thick on the north and south sides of the fault in Section 11. Even though the Woodford on the north side of the fault and the Woodford on the south side of the fault have a different top and a different base, the two sides of the fault share approximately 87 feet of Woodford. Mr. Fouke's exhibit shows the fault in the N12 of the SE/4 of Section On cross examination by Mr. Mahaffey the Witness stated that he had data on the thickness of the Woodford in a well "within a couple of miles" south of the fault in Section 11. Mr. Fouke does not know the exact thickness of the Woodford in the remaining portion of Section 11. The fault in Section 11 is a sealing fault. Additionally, the fault in Section 11 would shorten any lateral drilled from the S/2 of Section 2 into Section 11. Mr. Fouke stated that a lateral could be drilled between the faults in Sections 2 and 11. A lateral drilled from Section 2 into Section 11 would be longer in the W/2 of Section 11 because the fault is not present in the W/2 of Section 11. The Applicant has not drilled any Woodford wells in Garvin County. L. Mr. Mahaffey made his closing arguments. Counsel for the Protestant stated that Applicant wanted 640-acre spacing units so as to control as much acreage as possible. Mr. Mahaffey Page 16 of 20

17 added that with the limits on north/south drainage from the Woodford, there would be no contribution from the S/2 of Section 2. He stated that Ms. Hackett was correct in her statement that it would be unfair for the mineral owners in the S/2 of Section 2 to participate in the proceeds from a well to which they did not contribute production. Any discussions by the Applicant about additional wells being drilled from the S/2 of Section 2 into Section 11 are only speculation. Counsel then proceeded to cite case law for the Court's consideration and detailed the relevance of said cases to the instant cause. M. In closing, Mr. Barnes stated that the Commission order offered into evidence by the Protestant established an irregular unit comprised of parts of more than one governmental section. Counsel for the Applicant added that said order was issued by the Commission prior to the enactment of the statute allowing multi-unit wells. Mr. Barnes told the Court that the Applicant is seeking 640-acre units because its experts believe a unit of that size is needed so wells can be located where they need to be so as to prevent waste. Applicant contends that it would constitute waste if it is not allowed to drill a well down the middle of the section. Though there have not been any horizontal Woodford wells in the immediate area, the Applicant intends to develop the area in question in the same manner as has been done in other areas. Applicant is planning on using 640-acre units with extended laterals and placing wells in the ideal location to develop the Woodford. Mr. Barnes reiterated that 640-acre units will allow the Applicant the freedom to locate the wells where they will be the most productive. Counsel pointed out that the testimony confirmed that the Woodford common source of supply existed on both sides of the fault in Section 2 and shared footage of said common source of supply in common. Mr. Barnes told the Court that what the Protestants are suggesting will cause the drilling of unnecessary wells and, therefore, will not be protective of correlative rights. Counsel for the Applicant stated that in his experience the establishment of a unitized unit, as suggested by Protestant, is troublesome. Mr. Barnes told the Court that there was no reason to believe that his client would not fully develop the Woodford. N. To supplement his closing comments Mr. Mahaffey stated that both sides agree that there is a sealing fault running through Section 2. While the Commission does not generally space along reservoir lines, it does do so if the data dictates that it should be done. Even though the Applicant believes it would want to drill a well down the center of the unit, the Woodford units closest to Applicant's proposed unit do not have a well down the center of the unit. Mr. Mahaffey does not believe the unitization process to be as arduous a task as was portrayed by Mr. Barnes. Counsel cited some of the benefits of forming a unitized unit. 0. In his final remarks Mr. Barnes told the Court that Mr. Mahaffey's comments about his experience with the establishment of irregular units for Hunton development is irrelevant because a Hunton multi-unit well is not covered by the Shale Act. Mr. Barnes reminded the Court that the Woodford is in the N12 of Section 2, runs through the fault, and is in the S/2 of Section 2. The fault does not completely seal-off the Woodford in the N/2 from the Woodford in the S/2 of Section 2. Having heard the testimony of the witnesses and after reviewing the evidence submitted the AU took the cause under advisement and closed the record. Page 17 of 20

18 RECOMMENDATIONS AND CONCLUSIONS: After taking into consideration all of the testimony, facts, circumstances, and evidence presented in these causes, it is the recommendation of the AU that the Application of Rimrock Resource Operating, LLC in Causes CD T/O and CD T/O seeking to establish 640-acre horizontal drilling and spacing units in Section 35, Township 2 North, Range 2 West, Garvin County, Oklahoma, and in Section 2, Township 1 North, Range 2 West, Garvin County, Oklahoma, be denied; and that Protestant Irene Hackett's request for affirmative relief be granted. There is a primary issue and a related secondary issue that had to be addressed before a decision could be rendered in the instant causes. The primary issue is which proposed size for the spacing unit is the most likely to prevent waste and protect correlative rights. Secondarily, the relevance of the fault to the creation of a spacing unit that is preventative of waste and protective of correlative rights had to be determined. This Court believes that addressing the second issue revealed the answer to the primary issue. To find the answer as to the relevance of the fault required scrutiny of the testimony of the witnesses and the exhibits submitted by the parties. First and foremost it had to be determined whether the Woodford underlies the entire area. There was no dispute amongst the parties as to the fact that the Woodford underlies Sections 35 and 2. Then it had to be established whether the acknowledged existence of a sealing fault prevented the communication between the Woodford in the N12 and the S/2 of Section 2. The parties agreed as to the presence of the fault that bisected Section 2. There was even relative agreement as to the throw of said fault. Additionally, this Court noted that the Applicant made a point of stressing that the Woodford in the N/2 of Section 2 was not completely segregated from the Woodford in the S/2 of Section 2. The two halves of Section 2 shared common footage of Woodford. Both sides agreed that it would not be prudent to drill through the fault. In the testimony of Applicant's engineering witness it was made clear that the Applicant would not be drilling close to the fault and that the perforations in the well would not be able to produce hydrocarbons from the other side of the fault. It was, therefore, uncontested that there would be no contribution of hydrocarbons from the S/2 of Section 2 to a lateral drilled from the N/2 of Section 2 into Section 35. Applicant correctly stated that the Commission does not space based upon ownership, but rather spacing is based upon ultimate recovery. However, any well drilled north of the fault in Section 2 will not recover any hydrocarbons from the S/2 of Section 2. The fact that there would be no contribution from the S/2 of Section 2 eviscerates Applicant's argument that the approval of a 480-acre spacing unit instead of 640-acre units would cause waste. After recognizing that the S/2 of Section 2 would not contribute to the unit the only surviving argument supporting Applicant's contention that a 480-acre unit would cause waste is the assertion that said unit would not allow for the drilling of a multi-unit well down the center of Sections 2 and 35. Evidence presented showed that the closest spacing units with multi-unit wells had six wells. The spacing units referenced had three wells in each half of the section. This Court sees Applicant stating that it needs to drill a well down the center of the two sections Page 18 of 20

19 is presumptive speculation. In Denver Producing & Refining Co. vs. State, 184 P.2d 961, (Okla. 1947), the Oklahoma Supreme Court held that the prevention of waste must take precedence over the protection of correlative rights. However, the Denver Court also stated that in exercising the police power of the state the Commission is charged with prevention of waste, but also notes that private rights are not to be ignored. The granting of the 480-acre spacing unit requested by the Protestant would not violate Title S et seq., because there would be no waste. Therefore, since the threat of waste is no longer an issue this Court turned its focus to the protection of correlative rights. In summation, it is the position of this Court that since the risk of waste is not more likely to occur if a 480-acre spacing unit is established instead of Applicant's requested 640-acre unit, the Commission's attention must be focused upon the protection of correlative rights. In regard to the protection of correlative rights the Applicant pointed out that if Protestant's 480-acre unit is approved, Protestant would not have a share of the production from any wells drilled in the S12 of Section 2. Additionally, if said 480-acre unit is approved, the other mineral owners with holdings exclusive to the N12 of Section 2 would also be excluded from sharing in the production from any well in the S/2 of the section. Conversely, the correlative rights of the mineral owners in the S/2 of Section 2 would have those rights protected by the establishment of 480-acre units. Although, the fault in Section 2 does not completely separate the Woodford in Sections 2 and 35, it has ostensibly done so by virtue of creating a barrier that prevents drilling from the N12 into the S12 of the section. Therefore, the establishment of 480-acre units would protect the correlative rights of the mineral owners in both the N/2 of Section 2 and the S/2 of Section 2. In Caudillo vs. Corporation Commission, 551 P.2d 1110, (Okla. 1976) the Oklahoma Supreme Court cites Panhandle Eastern Pipe Line Co. vs. Corporation Commission 285 P.2d 847, (Okla. 1955) to say that the Commission does not have the authority to include acreage, that is known to be non-productive, in a drilling and spacing unit. In citing Application of Peppers Refining Co., 272 P.2d 416, (Okla. 1954), the Panhandle Court states that it is more important to protect correlative rights than to secure the maximum profits of some owners. Evidence presented by the Protestant showed that the Commission has previously granted irregular spacing units under very similar circumstances. In the referenced spacing application the presence of a major fault was deemed to warrant the granting of irregular spacing units to prevent waste and protect correlative rights. Said spacing order granted irregular units to "prevent undrilled orphan acreage". Further, the Oklahoma Supreme Court again relied upon its decision in Panhandle in Hester vs. Sinclair Oil and Gas Company, 351 P.2d 751, (Okla. 1960). In Hester, the Court reversed a Commission spacing order because the Commission did not rely on "substantial" evidence to alter an existing spacing unit. The Hester Court stated that the Commission wrongfully granted the new spacing unit because the applicant had failed to provide substantial evidence of the drainage pattern expected from the well. In an effort to define "substantial evidence" the Oklahoma Supreme Court in Union Texas Petroleum v. Corporation Commission, 651 P.2d 652 (Okla. 1981), states that substantial evidence possesses substance and is of relevant consequence. In the instant causes, both parties agreed that there was substantial evidence that due to the existence of a fault, there would be no contribution from the S/2 of Section 2. Further, Page 19 of 20