GENERALASPECTS OF THE OKLAHOMA COMMISSIONS

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GENERALASPECTS OF THE OKLAHOMA CORPORATION COMMISSIONS OFFICE OF ADMINISTRATIVE PROCEEDINGS PLEASE SEND INQUIRIES TO: MICHAEL DECKER DIRECTOR ADMINISTRATIVE LAW JUDGE OKLAHOMA CORPORATION COMMISSION OFFICE OF ADMINISTRATIVE PROCEEDINGS TELEPHONE: (405) 521-2241 E-MAIL: m.decker@occemail.com WEBSITE : www.occeweb.com

The Oklahoma Corporation Commission & Office ofadministrative Proceedings Page 2 A. THE OKLAHOMA CORPORATION COMMISSION REGULATES ESSENTIAL PUBLIC SERVICES^ The Oklahoma Corporation Commission (OCC or Commission) is the primary regulatory body over several vital sectors of the economy of the state of Oklahoma. The agency is one of the few remaining constitutionally empowered state ratemaking, permitting and regulatory agencies possessing combined authority over telecommunications, transportation and transmission of electricity and natural gas, and natural resource extraction. The OCC regulates railroads, pubhc utilities and public service corporations including electricity and natural gas rates and dehvery and telecommunications and transmission, rural water utilities and cotton gins,' oil and gas conservation including exploration, production, gathering, abandonment, waste disposal, pollution abatement, prevention and remediation; transportation and motor carriers including pipeline and motor carrier safety; and aboveground and underground tank storage and dehvery of petroleum-based motor fuels. Further, the OCC is a court of record with respect to adjudicatory authority over its jurisdictional areas. The OCC performs these functions through the work of its approximately 400 employees separated into six primary public service divisions Public Utilities, Oil and Gas Conservation, Transportation, Petroleum Storage Tank, Administrative Proceedings and Consumer Services and three divisions that provide services to the other divisions Information Technology, Office of General Counsel, and Administration. The primary functions ofthe OCC are- 1. To regulate and enforce requirements through orders and rules, the rates and charges of public utilities and public service corporations in a manner to prevent and eliminate monopolistic or discriminatory practices, and to oversee the quality of service of most public utilities and service providers in the state with respect to the delivery and operation of telecommunication, electrical and natural gas services to industrial and private consumers. This authority entails response and assistance to consumer complaints about such public services. 2. To regulate and enforce requirements through orders, permits, licenses and rules, the conservation, exploration, development, production, operation, site* abandonment and remediation ofoil and gas resources in Oklahoma, and to exercise the specific duties to prevent the waste of such resources and to protect the correlative rights of private owners of minerals in the state. This authority further entails the prevention and abatement of pollution associated with oil and gas ^ Portions of text J&rom Oklahoma Corporation Commission's Annual Report, Fiscal Year2012 dit 2.

The Oklahoma Corporation Commission & Office ofadministrative Proceedings Page 3 exploration and production including the duty to protect the public health, safety and environment and waters of the state from pollution. Also, this function entails response and assistance to consumer complaints about oil and gas exploration and production and royalty owner problems. The OCC regulates the development of certain mineral brines in a manner similar to oil and gas resources. 3. To regulate and enforce requirements through orders, permits and rules, the safety and operation of intrastate railroads and motor carriers including the regulation of railroad safety, railroad crossings and standards, and the regulation of motor carrier safety, insurance and taxation requirements and permitting of deleterious substance transporters in the state. This authority includes regulation and oversight of petroleum and other tj^es of transportation pipelines (and gathering lines under certain conditions) in terms of public health, safety and environment protection, pollution prevention, abatement and closure and remediation. 4. To regulate and enforce requirements through orders, permits and rules, the storage, delivery, and quality of refined motor fuels including the oversight, closure and reclamation of petroleum storage tanks in terms of public health, safety and environmental protection, pollution prevention, abatement and remediation in the state. The OCC derives its ratemaking and anti-monopoly authority from the Oklahoma Constitution, Article IX. From this mandate, as well as other enabung statutes, the OCC possesses wide discretion to implement and enforce its authority over its specified jurisdictional areas through the unique combination of executive, legislative and judicial power. The agency exercises statewide legislative prerogatives through its constitutional ratemaking powers and rulemaking authority under the state Administrative Procedures Act and various enabling statutes. The OCC can enforce requirements through its executive and police power through orders, citations, subpoenas and other legal process. The OCC functions as a court of record when it adjudicates matters by hearing and order in an individual proceeding within its regulatory jurisdiction. The OCC's three (3) commissioners make the final decisions on all regulatory matters within the agency's jurisdiction. The OCC's orders and rulemaking actions can be appealed only to the Oklahoma Supreme Court. Article IX of the Oklahoma Constitution estabhshed the OCC in 1907, and the First Legislature gave the Commission authority to regulate public service corporations, those businesses whose services are considered essential to the public welfare. The legal principle for such regulation had been established in 1877 when the United States Supreme Court ruled in Munn v. Illinois, 94 U.S. 113 (1877), that when a private company's business affects the community at large, it becomes a public entity subject to state regulation.

The Oklahoma Corporation Commission & Office ofadministrative Proceedings Page 4 Initially, the OCC regulated transportation and transmission companies, mostly railroads and telephone and telegraph companies. The OCC also was directed to collect and maintain records of the stockholders, officers and directors of all corporations chartered or licensed to do business in Oklahoma (about 12,500 at statehood). As the state grew, the records collection task became larger than one agency could handle. The OCC kept authority for public service companies, and responsibility for other corporations was allocated to the Secretary of State and other state commissions and agencies according to business t5rpe. Pipelines and telephone service were placed under OCC jurisdiction in 1908. Regulation of water, heat, light and power rates began in 1913. The OCC began regulating oil and gas in 1914 when it restricted oil drilling and production in the Cushing and Healdton fields to prevent waste when production exceeded pipeline transport capacity. In 1915, the Legislature passed the Oil and Gas Conservation act. This expanded oil and gas regulation to include the protection of the rights of all parties entitled to share in the benefits of oil and gas production. Also in 1915, the Legislature declared cotton gins to be public utilities and extended the OCC's authority over utility companies to include practices as well as rates. While the basic regulatory responsibility of the OCC has remained intact, many changes in state and federal laws have changed what is regulated. The OCC presently regulates public utilities, except those under municipal or federal jurisdiction or exempt from regulation; oil and gas drilling, production and environmental protection; the safety aspects of motor carrier, rail and pipeline transportation and the environmental integrity of petroleum storage tank systems. It also has responsibility for the proper operation of fuel dispensing units ("gas pumps") at retail filling stations. The OCC also enforces federal regulations for underground injection of water and chemicals, underground disposal of certain oil and gas waste fluids and remediation of soil and groundwater pollution caused by leaking petroleum products storage tanks. As mentioned previously, Oklahoma Constitution, Article IX, established the OCC in 1907, and the First Legislature gave the agency authority to regulate public service corporations, those businesses whose services are considered essential to the public welfare. Since the establishment of its general constitutional power, the agency has been granted statutory authority by subsequent Oklahoma Legislatures through omnibus provisions in Oklahoma Statutes, Title 17, Chapters 1 through 5, and various enabling acts covering specific areas of OCC jurisdiction in Oklahoma Statute, Titles 17, 27A, 29, 47, 52, 68 and 82. These acts include:

The Oklahoma Corporation Commission & Office ofadministrative Proceedings Page 5 1. PUBLIC UTILITY REGULATION: Oklahoma Telecommunications Act of 1997 Retail Electric Supplier Certified Territory Act Retail Electric Consumer Cost Reduction, Safety and Service Efficiency Act of 2008 Electric Restructuring Act of 1997 Oklahoma Carbon Capture and Geologic Sequestration Act Oklahoma Wind Energy Development Act of 2010 Oklahoma Electric Usage Data Protection Act of 2011 2. PETROLEUM STORAGE TANK REGULATION: Oklahoma Storage Tank Regulation Act Oklahoma Petroleum Storage Tank Release Indemnity Program Oklahoma Environmental Quality Act Oklahoma Environmental QuaUty Code 3. OIL AND GAS CONSERVATION AND RELATED REGULATION: Pipelines Act of 1907 Production and Transportation Act of 1913 Natural Gas Act of 1913 Oil and Gas Conservation Act of 1933 Surface Trash and Debris Act Well Plugging Act of 1965 Surface Damages Act Seismic Exploration Regulatory Act Oil and Gas Owners' Lien Act of 2010 Shale Reservoir Development Act of 2011 Oil and Gas Exploration Rights Act of 2011 Energy Litigation Reform Act of 2012 Oklahoma Environmental Quality Act Oklahoma Environmental Quality Code Oklahoma Brine Development Act Hazardous Liquid Transportation System Safety Act Oklahoma Energy Education and Marketing Act Standard Gas Measurement Law Production Revenue Standards Act Natural Gas Market Sharing Act Oklahoma Wildlife Conservation Code Gross Production Tax Code

The Oklahoma Corporation Commission & Office ofadministrative Proceedings Page 6 4. MOTOR CARRIER REGULATION: Oklahoma Motor Carrier Safety and Hazardous Materials Transportation Act Motor Carrier Act of 1995 Trucking One-Stop Shop Act of 2004 Motor Carrier Harvest Permit Act of 2006 Household Goods Act of 2009 Oklahoma Weigh Station Act of 2012 Antifreeze Act As summarized above, the Commission exercises its combined judicial, legislative and administrative authority through actions of the three (3) commissioners elected by statewide vote to six-year terms, who rule on all regulatory matters within the agency's jurisdiction. The terms are staggered so one commissioner vacancy occurs every two (2) years. The election pattern was established when the Commission was created by the state constitution. The first three (3) elected commissioners drew lots for two-year, four-year and six-year terms. In-term vacancies are filled by gubernatorial appointment. Appointed commissioners serve until the next regular election. Fifteen (15) commissioners have been seated by appointment. E.R. Hughes is the only commissioner to serve two non-successive terms. He was elected in 1920, lost a bid for reelection in 1926, and then won another term in 1928. There have been 39 Commission panels (the same three commissioners sitting together) since the Commission was created in 1907. The average tenure for a panel is about 4 years. The panel with the longest tenure was the 20th, when Harold Freeman, Wilburn Cartwright and Ray C. Jones sat together for more than 13 years (1955-1968). Jones has the longest individual tenure, serving nearly 30 years before retiring in January 1976 for health reasons. The longest individual tenure of the current panel is that of Commissioner Bob Anthony, who has served since January 1989. Presently, the Oklahoma Corporation Commission is comprised of the following state officials* Commissioner Bob Anthony, Chairman Commissioner Patrice Douglas, Vice Chairman Commissioner Dana Murphy In January 2015, the Honorable Todd Hiett, Commissioner-Elect and former Speaker of the Oklahoma House of Representatives, will replace Commissioner Patrice Douglas, who did not seek reelection in 2014.

The Okl ihoma Corporation Commission & Office ofadministrative Proceedings Page 7 B. OKLAHOMA CORPORATION COMMISSION OFFICE OF ADMINISTRATIVE PROCEEDINGS FUNCTIONS AND OPERATIONS In addition to the Director's Office and Administrative Support, there are four (4) specialized areas of the Office of Administrative Proceedings (OAP), which operate from two (2) Regional Service Offices of the Oklahoma Corporation Commission (OCC) in Oklahoma City and Tulsa^ 1. Oil and Gas Conservation s (ALJs) conduct hearings, issue recommendations, and review and approve Commission orders in applications relating to oil and gas conservation, petroleum storage tank regulation, and enforcement matters in these areas of OCC jurisdiction. The Oil and Gas ALJs conduct initial hearings on the merits of applications and motions in Oklahoma City and Tulsa. A staff of Court Reporters transcribes testimony and proceedings in both Regional Service Offices. 2. Public Utility and Transportation ALJs conduct hearings, issue recommendations, and review and approve OCC orders in apphcations relating to regulation of public utilities (including consumer complaints), transportation and motor carrier activity, and enforcement matters in these areas of OCC jm-isdiction. The PU ALJs conduct hearings in Oklahoma City. 3. The Oil and Gas Appellate Referee/ALJ conducts appellate and exception hearings in oil and gas conservation and petroleum storage tank matters, which are protested before the initial ALJs. 4. The OCC's Court Clerk accepts the filing of applications, notices, affidavits and issues OCC orders, accepts payment of court fees and fines, and maintains public records in the form of OCC orders, appucation and court files, and docket information in hard copy and digital formats. Court Clerk offices and public records are maintained at the OCC's Regional Service Offices in Oklahoma City and Tulsa. C. OFFICE OF ADMINISTRATIVE PROCEEDINGS ANNUAL REPORT - FISCAL YEAR 2014 The Office of Administrative Proceedings (OAP) is the judicial division of the Oklahoma Corporation Commission (Commission or OCC). OAP's staff includes administrative law judges (ALJs), legal secretaries, court reporters, and the Court Clerk's Office. Adjudicative proceedings are conducted in two offices - the Western Regional Office, Oklahoma City and the Eastern Regional Office, Tulsa. Both locations maintain a Court Clerk's Office, which accepts filings of

The Oklahoma Corporation Commission & Office ofadministrative Proceedings Page 8 applications, notices, affidavits, hearing exhibits, and other pleadings in cases brought for relief from the OCC pursuant to its regulatory jurisdiction. The Eastern Regional Service Office's Court Clerk only receives court documents and permit filings which relate to oil and gas conservation matters. Pursuant to statute, to maximize the convenience of the public, parties, and witnesses, testimony and evidence may be presented in the court of record proceedings by telephonic connection, instead of requiring personal appearances before an administrative law judge and court reporter. Telephone hearings are conducted in both the Regional Service Offices. The Eastern Regional Service Office in Tulsa provides telephonic connections to OAP's Oklahoma City courtrooms and a teleconferencing connection to the Commission's primary courtroom in Oklahoma City. Correspondingly, the Western Regional Service Office provides telephone connections to the Tulsa courtrooms. In FY2014 testimony was presented by telephone in 2,282 hearings. 1. HEAEINGS: Most applications requiring OCC action are considered first by ALJs, who conduct evidentiary hearings; rule on objections, motions and emergency applications; interpret and apply law; make oral and written recommendations to the Commissioners for consideration and action; and review proposed orders prior to submission to the Commission's signing agenda. Exceptions to the ALJs' recommendations may be filed with the full Commission, which can entertain oral arguments. The Commissioners, however, may refer the oral arguments on exceptions in certain types of matters to its oil and gas appellate referee, who files an additional report recommending a course of action. Commission orders may be appealed to the Oklahoma Supreme Court. During FY2014, twelve administrative law judges and two appellate referees conducted 40,594 hearings. 2. OIL AND GAS CONSERVATION & PETROLEUM STORAGE TANKS: Oil and gas administrative law judges conduct hearings involving applications within the OCC's jurisdiction over oil and gas conservation, petroleum storage tanks, and natural gas gathering fees and open access. The oil and gas ALJs hear enforcement cases involving these areas of regulatory authority. The Oklahoma City office's oil and gas ALJ staff consists of seven full-time members who conduct hearings exclusively on oil and gas conservation/petroleum storage tank dockets. The Tulsa office's oil and gas ALJ staff consists of one full-time member and one part-time member who conduct hearings exclusively on oil and gas conservation dockets. The division director also serves as an oil and gas ALJ in both offices. There is one primary oil and gas appellate referee who hears exceptions arising from the Regional Service Offices. Also, one public utility administrative law 8

The Oklahoma Corporation Commission & Office ofadministrative Proceedings Page 9 judge serves as an oil and gas appellate referee; and when necessary, hears some exceptions arising from the Regional Service Offices. During FY2014, there were hearings concerning 12,340 initial applications and 2,653 motions brought before the OCC's oil and gas administrative law judges, while 62 protested initial applications and motions were the subject of exception proceedings conducted by the oil and gas referee. There were 376 initial oil and gas conservation applications heard and processed to final order pursuant to the optional hearing procedure for uncontested spacing-related causes. 3. transportation: Transportation and railroad cases are heard as part of the caseload of one administrative law judge in the Oklahoma City office, who also conducts public utility hearings. The administrative law judge also hears applications regarding grade crossings. The ALJ hears enforcement proceedings in this area of the OCC's jurisdiction. During FY2014, the Transportation Docket experienced 25,216 docketed causes resulting in hearings from which 230 final orders issued in EN, MC, MCC, and TD cases. 4. PUBLIC UTILITY & CONSUMER SERVICES: Three administrative law judges in the Oklahoma City office conduct public utility and consumer services related hearings. One of the ALJs also conducts hearings as an oil and gas appellate referee when necessary. Hearings are held for applications to provide local exchange telephone service; arbitration proceedings regarding interconnection agreements, mergers and acquisitions of public utilities; rate cases; territorial boundary disputes; tariff filings; purchase fuel adjustment clauses; and cotton gins. Consumer service complaints and enforcement proceedings are conducted within the OCC's public utility regulatory authority. During FY2014, there were 234 pubhc utility and consumer services cases heard. 5. COURT REPORTERS & COURT CLERK'S OFFICE: Court reporters transcribe hearings and prepare transcripts upon request by case participants or other interested persons. The OCC's court reporting staff consists of six full-time and two part-time court reporters. The court reporters provide services in both Oklahoma City and Tulsa. The Court Clerk's Office is the official repository of the agency's court documents and is responsible for accepting and processing applications for the OCC's action. The Court Clerk's Office maintains court files, and public records relating to the application, hearing and order process, including both paper copies and digital images of these documents. The Court Clerk's Office also responds to public requests to view and/or copy official records. During FY2014, the Court Clerk's Office, staffed by six full-time docket

The Oklahoma Corporation Commission & Office ofadministrative Proceedings Page 10 clerks, two temporary docket clerks, and one administrative program officer/court clerk in Oklahoma City, and one full-time docket clerk and one part-time docket clerk in Tulsa, processed 9,520 applications and 14,079 Commission orders. D. ADMINISTRATIVE LAW JUDGE HEARINGS CASELOAD (FY'1995 - FY'2014) Fiscal Year Oil/Gas Referee Public Fuel Initial Total Initial Exceptions Trans. Utility Hearings 1995 5,654 133 3,422 405 230 9,844 1996 5,340 106 3,772 607 229 10,054 1997 5,118 226 5,270 1,248 101 11,963 1998 5,297 266 6,190 984 389 13,126 1999 5,157 125 6,695 893 161 13,031 2000 5,567 106 6,148 705 25 12,551 2001 7,084 110 7,679 827 126 15,825 2002 6,273 139 8,798 624 5 15,839 2003 5,430 159 11,800 800 2 18,191 2004 7,475 126 11,143 1,089 60 19,893 2005 9,579 115 23,216 1,476 57 34,443 2006 11,037 126 27,332 562 90 39,021 2007 11,615 102 21,130 561 115 33,523 2008 13,582 62 17,764 631 131 32,273 2009 11,280 89 23,560 483 170 35,582 2010 6,997 83 19,357 402 142 26,981 2011 9,373 84 20,642 314 91 30,504 2012 12,197 89 19,040 414 65 31,805 2013 14,468 88 25,103 327 66 40,052 2014 14,993 62 25,216" 234 89 40,594 This calculation for FY 2014 is based on 25,216 docketed applications/citations on the Transportation Docket, from which 230 final orders issued involving EN, MC, MCC and TD cases 10

The Oklahoma Corporation Commission & Office ofadministrative Proceedings Page 11 E. QKT.AHQMA CORPORATION COMMISSION ADMINISTRATIVE LAW JUDGES Michael Decker Michael Norris James Myles Curtis Johnson Director (Tulsa) (405) 521-2241 (405) 521-2165 (405) 521-4135 (918) 581-2296 Susan Osburn (405) 521-2244 David Leavitt (405) 521-4117 Kathy McKeown Jacqueline Miller Michael Porter Paul Porter (Tulsa) (918) 581-2296 (405) 522-2398 (405) 521-2274 (405) 521-4116 Patricia MacGuigan Oil and Gas Appellate Referee (405) 521-2257 Mary Candler Niles Stuck (405) 521-3511 521-2636 Ben Jackson / Appellate Referee (405)- (405)- 521-2322 11

The Oklahoma Corporation Commission & Office ofadministrative Proceedings Page 12 Signing Agenda (405) 521-2756 Fax Number (405) 521-3512 HELPFUL NUMBERS Court Clerk's Office (405) 521-2352 Cashiers Desk (405) 521-3951 Appellate Referee (405) 521-2257 Court Reporters (405) 521-2486 Tulsa Office* Main Number (918) 581-2296 Fax Number (918) 581-2597 12

The Oklahoma Corporation Commission & Office of Administrative Proceedings Page 13 OFFICE OF ADMINISTRATIVE PROCEEDINGS QUARTERLY REPORT FOURTH QUARTER FISCALYEAR 2014 13

Office ofadministrative Proceedings Division Director: Michael Decker Division Highlights: During FY 2014, OAP staff members met extensively with representatives of Iron Data Co. regarding the implementation ofthe Star PSC case management system. Also, staff members participated in task force meetings organized by the Administration Division to design a protocol for Commissioners' approval oforders through Star PSC. December 10, 2013, the kick-off for Star PSC phase one implementation occurred involving Iron Data and OCC staff from all divisions. Thereafter, OAP was the first division to meet with Iron Data to finalize programming details for Star PSC, with consultations occurring throughout the year. During FY 2014, OAP's staff members made progress with a review of proposed form orders to be recommended as templates for certain types ofoil and Gas Conservation and Public Utility applications for use with future in online filing. Planning commenced in March, when OAP staff members met with the Administration Division, Office of General Counsel, and the Oil and Gas Conservation Division to plan stakeholder input and development of form applications and orders. Next, in April and May, OAP staff members developed order drafts. By June, staff members were ready to circulate drafts to other divisions. Ultimately, drafts will be provided to a focus group ofexternal-users, who utilize existing digital facsimile filing processes. The project will culminate with delivery ofform orders for inclusion in online filing procedures. During the quarter, OAP's staffmembers conferred with the Commissioners' offices, the Public Utility Division, and the Office of General Counsel regarding the scheduling of Universal Service Fund reconsideration applications, which have increased during the first halfof2014. OAP's staffmembers participated in meetings to develop a procedure by which the Commission can efficiently process such applications through hearing and final order. OAP 4^ Quarter 2014 Page 1

Environmental Indicators: sums PDsPolution Docket CO=Conservatlon Docket EN=Enforcement Docket 4Ihair 4th atr 4lhau 4inQlr 4lhQlr 4lh 01/ 4th Qlr f/ Oiland Gas Hearings Conducted FY InltiaJ Tclaphonle RtftrM CEB 4thttlU 4theitM 4Uiau10 4«iai>11 4lilOI>12 40101111 4Uait14 OAP 4^ Quarter 2014 Page 2

Ill/ InitialHearinssHeld History Orders Sisned - History OAP 4'*' Quarter 2014 Page 3

FY 2014 Environmental Indicators: CD/PD/EN Cases Filed FY 2014 By Quarter PD's CD's PD=Polution Docket CD^Conservation Docket EN=Enforcement Docket IslQtrU 2mlQlr14 3fdQtr14 4lhQtr11 Oil and Gas Hearings Conducted FY2014ByQtr InlUal Telephonic IReferee unn OAP 4^'^ Quarter 2014 Page 4

InitialHearingsHeld FY2014 m OrdP.rsi SienaH- FY2014 OAP 4^ Quarter 2014 Page 5

Division Activity Indicators: CDCase Average Days From Recommendation to Final Order FYll FY12 FY12 FY12 FY12 FY13 FY13 FY13 FY13 FY14 FY14 FY14 FY14 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Horiz Spacing 17.83 24.21 19.12 1 20.66 i 1 17.68 : 18.54 23.95 18.46 19.71 20.83 24.69 21.85 20.15 r Inc Dens 24.24 23.19 30.77 21.94 : 18.92 i 21.8 27.76 16.21 19.82 17.61 24.44 18.01 20.29 Loc Except 94.58 92.58 108.15 97.81 : 73.04 : 68.35 55.27 47.78 45.67 29.24 51.06 46.35 42.96 Multi Horiz Well 440.23 1 36: 130.25 34.2 49.09 48.5 26.5 22.67 26.57 43.5 Pooling 19.41 20.47 20.74 19.16 i 19 i 19.21 25.41 22.88 21.72 20.4 22.18 22.43 22.04 Spacing 23.63 17.46 19.21 15.68 i 16.12 i 15.98 18.56 17.72 17.29 16.63 19.94 20.86 19.93 Horiz Spacing Inc Dens Loc Except Multi Horiz Well Pooling Spacing T 1 1 1 1 1 FYll FY12 FY12 FY12 FY12 FY13 FY13 FY13 FY13 FY14 FY14 FY14 FY14 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 03 Q4 OAP 4*Quarter 2014 Page 6

CD Case Average Days From Filingto Final Order FYll FY12 FY12 FY12 FY12 FY13 FY13 FY13 FY13 FY14 FY14 FY14 FY14 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Horiz Spacing Inc Dens 69.64 60.35 56.45 74.47 71.31 52.15 58.09 51.74 52.99 64.72 64.25 70.38 61.43 65.77 55.87 61.33 60.79 58.04 65.06 67.86 50.06 55.92 51.18 74.24 61.24 60.72 Loc Except Multi Horiz Well Pooling Spacing 59.16 63.44 66.9 58.66 59.89 65.96 59.8 63.1 60.19 68.18 67.67 63.35 68.07 59.25 72.4 64.42 53.36 56.95 67.72 57.82 48.46 55.24 56.38 63.01 61.03 Horiz Spacing >lnc Dens Loc Except Multi Horiz Well Pooling Spacing T 1 1 1 1 1 1 1 1 FYll FY12 FY12 FY12 FY12 FY13 FY13 FY13 FY13 FY14 FY14 FY14 FY14 Q4 Q1 Q2 Q3 Q4 Q1 a2 Q3 Q4 Q1 Q2 Q3 Q4 OAP 4"" Quarter 2014 Page 7

other Details: Tuesday, May 20, 2014, OAP's Western Regional Service office hosted a delegation of 15 attorneys from Shenzhen, China. The delegation was sponsored in Oklahoma City by the Oklahoma City University School of Law for a 30-day training program. The delegation observed hearings at the OCC from 8:30 to 11:30, including a visit to the Commissioners' daily signing agenda. Thereafter, the delegation attended a panel discussion regarding American energy law practice hosted by GableGotwals law firm at its Oklahoma City office. During the quarter, contact was reestablished with William Brunson, Special Projects Coordinator, National Judicial College, regarding the potential for an NJC program in Oklahoma City designed for all OCC legal staff and ALJs. At the end of June, Mr. Brunson was in communication with the Office of General Counsel about the terms of a draft contract for the event. The program is being considered for the 2015 summer desk week. In May 2014, the Oil and Gas Conservation ALJ staff completed an approximate 90-day survey of order review time through the submission of a report to the Administration Division summarizing information recorded in spread sheets and developed from analysis of entries into the Access order tracking program. The initiative was a primary focus across most of FY 2014. Development of spread sheets commenced in the first quarter. The system was completed and tested during the second quarter, with use beginning in January. Completion of the survey in May provided a statistical picture of processing time and other aspects the review process for oil and gas conservation orders. The information hopeftilly will be usefiil as the division transitions into the Star PSC case management system in 2015. The fiscal year saw the completion of planning and execution of the 2013 Oil and Gas Institute. The Institute was held Friday, October 18, 2013, at the University of Oklahoma-Tulsa's Schusterman Learning Center. Planning commenced prior the start of the fiscal year, but was a major objective in the second quarter. Entitled ''Bright Horizons: Recent Trends in Oklahoma Oil and Gas Conservation Law and Practice,'' the event attracted approximately 280 attendees from across the southwest. OAP 4*Quarter 2014 Page 8

Office of Administrative Proceedings Director, OAP 7213 Michael Decker PIN 129 OIL & GAS COURT CLERK OFFICE PUBLIC UTILITY & TRANSPORTATION O&G APPEALS ADMINISTRATIVE SUPPORT Oklahoma City Tulsa Adm Progs Off, E12B G Wortham PIN 155 Dep ALJ, 7232 J Myles PIN 132 Dep ALJ, 7232 JT Miller PIN 182 /^pls ALJ, 7273 PD MacGuigan PIN 133 APO, E12A S Marsee PIN 152 SrALJ, 7231 MD Norris PIN 138 )ep ALJ, 7232 CM Johnson PIN 136 I Dock Clk, E15A D Monroe PIN 161 Dock Clk, E15B KA Tucker PIN 157 APO, E12A F Ludwick PIN 124 Leg Sec, E25B AG Cooper PIN 153 Leg Sec. E25A J Sutton PIN 151 SrALJ, 7231 M. Porter PIN 139 PIN 140 M ALJ, 722 sr OsDurn PIN 135 SrALJ, 7231 PE Porter PIN 163 SrALJ, 7231 80Vo K McKeown PIN 131 Dock Clk, EISA TTeague PIN 255 Dock Clk, E15B J Ortega PIN 158 Dock Clk, 0020* B Linn PIN 0021 Dock Clk. E15A B Griffin PIN 156 Dock Clk, E15B R Moser PIN 160 Dock Clk, 0020* K Johnson PIN 180 Court Rptr, E14A RD Hejny PIN 143 Court Rptr, E14A RM Kidder PIN 144 Temp, 0020* S Johnson PIN 146 COURT REPORTERS Court Rptr, E14A S Dennis PIN 142 Court Rptr, E14A LH Wrany PIN 149 Court Rptr, E14A T Thompson PIN 145 SrALJ, 7231 M Candler PIN 141 SrALJ, 7231 N Stuck PIN 397 Dock Clk, El5B 72.5% G Post PIN 162 Dock Clk, E15B E Million PIN 023 E Cruchon PIN 148 Tulsa Court Rptr E14A 56% SD Davidson PIN 147 Temporary Effective 05/01/14