RE: PETITION OF DENBURY ONSHORE, LLC TO … · re: petition of denbury onshore, llc to ^'led for recohd adopt special field rules for the lone : m, n nnnq pine field in madison county,

BEFORE THE STATE OIL AND GAS BOARD OF MISSISSIPPI

RE: PETITION OF DENBURY ONSHORE, LLC TO ^'LED FOR RECOHD ADOPT SPECIAL FIELD RULES FOR THE LONE : M, n nnnQ

PINE FIELD IN MADISON COUNTY, JUl- < ™ MISSISSIPPI STATE OILAND GAS BOARD

USA IVSHIN, SUPERVISOR

DOCKET NO. 240-2008-557

ORDER NO.

ORDER

THIS CAUSE came to be heard on the Petition of Denbury Onshore, LLC

("Petitioner") requesting the Board to adopt Special Field Rules for the Lone Pine Field in

Madison County, Mississippi; and

WHEREAS, the Boards finds that due, proper, and legal notice of the meeting of the

Board for the purpose of considering and taking action with respect to such matter was given

in the manner required by the rules and regulations of the Board; that due, legal, and

sufficient proofs of publication and service are on file with the Board; and that the Board has

full jurisdiction of the subject matter to hear and determine same; and

WHEREAS, pursuant to said Notice, a public hearing was held by said Board in the

Hearing Room, Suite E, 500 Greymont Avenue, Jackson, Mississippi, commencing on June

25,2008, at 10:00 o'clock a.m. at which hearing all persons present who desired to be heard

on said matter were heard and all testimony and the evidence were duly considered by those

present at said meeting; and

WHEREAS, the Board has fully considered said matter and the evidence and

recommendations made in said hearing and finds as follows:

1.

Petitioner recently re-entered the Canton Exchange Bank et al No. 1 in Section 31,

Township 9 North, Range 4 East, Madison County, Mississippi. That Well is a CO2 well

which Petitioner tested from an undefined CO2 gas pool.

2.

This Board has never adopted Special Field Rules to define this gas pool and to

develop spacing rules. Petitioner has filed Docket No. 239-2008-557 to create a compulsory

unit known as the Lone Pine Unit ("the Unit"). The Special Field Rules are being created

to define the Unit as a distinct CO2 pool for purposes of a joint effort to maximize recovery

under Miss. Code Ann. § 53-3-101 et seq.

3.

In Docket No. 239-2008-557 just approved by the Board, Petitioner approved a Plan

of Unitization for a compulsory unit to include lands described as:

TOWNSHIP 9 NORTH. RANGE 4 EAST

Section 29: All that part of the W/2 of the SW/4 lying south and west of Renfroe Road

Section 30: The S/2

Section 31: The Entire Section

Section 32: The W/2


Section 5: The W/2 of the NW/4

The NE/4 of the NW/4, less and except a two-acre tract described as follows:

COMMENCING AT A CONCRETE MONUMENT NUMBER

111 ON THE NORTHERN RIGHT OF WAY LINE OF THE

NATCHEZ TRACE PARKWAY, SAID MONUMENT BEING

NORTH 71 DEGREES 39 MINUTES EAST 1301.86 FEET

MEASURED FROM INTERSECTION OF SAID NATCHEZ

TRACE PARKWAY WITH THE EAST LINE OF BARNES

ROAD; THENCE RUN SOUTH 71 DEGREES 39 MINUTES

WEST ALONG THE NORTH LINE OF NATCHEZ TRACE

PARKWAY 1301.86 FEET TO ITS INTERSECTION WITH

THE EAST LINE OF BARNES ROAD; THENCE THE

FOLLOWING BEARING AND DISTANCES ALONG THE

SAID BARNES ROAD: NORTH 00 DEGREES 12 MINUTES

52 SECONDS WEST 1251.47 FEET; NORTH 01 DEGREE 16

MINUTES 13 SECONDS EAST 204.55 FEET; NORTH 00

DEGREES 09 MINUTES 18 SECONDS EAST 943.54 FEET;

NORTH 00 DEGREES 26 MINUTES 38 SECONDS WEST

115.7 FEET; THENCE LEAVING SAID ROAD RUN EAST

1147.07 FEET TO THE POINT OF BEGINNING OF THE

PROPERTY; THENCE CONTINUE EAST 276.96 FEET;

THENCE SOUTH 1060.3 FEET; THENCE WEST 276.96

FEET; THENCE NORTH 1060.3 FEET TO THE POINT OF

BEGINNING, CONTAINING 2 ACRES, MORE OR LESS.

The tracts described below lying in the NW/4:

(Unit Tract 7) 8.0 ACRE TRACT LOCATED IN THE NW/4

DESCRIBED BY METES AND BOUNDS, TO-WIT:

COMMENCING AT A CONCRETE MONUMENT NO. 111

ON THE NORTHERN RIGHT OF WAY LINE OF NATCHEZ

TRACE PARKWAY AND RUN SOUTH 71 DEGREES 39

MINUTES 00 SECONDS WEST ALONG SAID NORTHERN

RIGHT OF WAY FOR A DISTANCE OF 1301.86 FEET TO

THE EASTERN RIGHT OF WAY LINE OF BARNES ROAD;

RUN THENCE ALONG THE EASTERN RIGHT OF WAY

OF SAID BARNES ROAD THE FOLLOWING COURSES

AND DISTANCES NORTH 00 DEGREES 12 MINUTES 52

SECONDS WEST FOR A DISTANCE OF 1241.47 FEET;

THENCE NORTH 01 DEGREES 16 MINUTES 13 SECONDS

EAST FOR A DISTANCE OF 204.55 FEET, THENCE

-2-

NORTH 00 DEGREES 09 MINUTES 18 SECONDS EAST FOR A DISTANCE OF 43.7 FEET TO AN IRON PIN

MARKING THE POINT OF BEGINNING OF THE PROPERTY HEREIN DESCRIBED; THENCE CONTINUE

ALONG LAST MENTIONED CALL NORTH 00 DEGREES

09 MINUTES 18 SECONDS EAST 400.0 FEET; THENCE

LEAVING SAID EAST RIGHT OF WAY RUN EAST 807.7

FEET; THENCE SOUTH 400.00 FEET; THENCE WEST

871.1 FEET TO THE POINT OF BEGINNING.

(Unit Tract 8) 5.32 ACRE TRACT LOCATED IN THE SE/4

OF THE NW/4 AND BEING MORE PARTICULARLY




NATCHEZ TRACE PARKWAY, AND RUN SOUTH 71

DEGREES 39 MINUTES WEST ALONG SAID NORTHERN


THE EASTERN RIGHT OF WAY LINE OF BARNES ROAD,

HAVING A FORTY FOOT RIGHT OF WAY; RUN THENCE

ALONG THE EASTERN RIGHT OF WAY OF SAID

BARNES ROAD NORTH 00 DEGREES 12 MINUTES 52

SECONDS WEST 1201.8 FEET TO THE POINT OF

BEGINNING OF THE PROPERTY DESCRIBED HEREIN;

THENCE CONTINUE ALONG LAST MENTIONED CALL


49.67 FEET; THENCE NORTH 01 DEGREES 16 MINUTES

43 SECONDS EAST AND CONTINUE ALONG SAID EAST

RIGHT OF WAY 204.55 FEET; THENCE NORTH 00

DEGREES 09 MINUTES 18 SECONDS EAST AND

CONTINUE ALONG SAID EAST RIGHT OF WAY 43.7

FEET; THENCE LEAVING SAID EAST RIGHT OF WAY

RUN EAST 773.2 FEET; THENCE SOUTH 297.9 FEET;

THENCE WEST 776.9 FEET TO THE POINT OF BEGINNING.

(Unit Tract 9) 5.95 ACRE TRACT OF LAND IN THE SE/4

NW/4 DESCRIBED AS: COMMENCING AT A CONCRETE

MONUMENT NUMBER 111 ON THE NORTHERN RIGHT

OF WAY LINE OF THE NATCHEZ TRACE PARKWAY,

SAID MONUMENT BEING NORTH 71 DEGREES 39

MINUTES EAST 1301.86 FEET MEASURED FROM THE

INTERSECTION OF SAID NATCHEZ TRACE PARKWAY

WITH THE EAST LINE OF BARNES ROAD; THENCE RUN

SOUTH 71 DEGREES 39 MINUTES WEST ALONG THE NORTH LINE OF NATCHEZ TRACE PARKWAY 1301.86

FEET TO ITS INTERSECTION WITH THE EAST LINE OF

BARNES ROAD; THENCE NORTH 00 DEGREES 12

MINUTES 52 SECONDS WEST 867.6 FEET TO THE POINT

OF BEGINNING OF THE PROPERTY DESCRIBED HEREIN; THENCE CONTINUE NORTH 00 DEGREES 12

MINUTES 52 SECONDS EAST ALONG THE EAST LINE

OF BARNES ROAD 334.2 FEET; THENCE LEAVING SAID

BARNES ROAD RUN EAST 776.9 FEET; THENCE SOUTH

334.22 FEET; THENCE WEST 775.6 FEET TO THE POINT

OF BEGINNING.

(Unit Tract 15) 6.74 ACRE TRACT SITUATED IN THE

NE/4 NW/4 AND THE SE/4 NW/4 DESCRIBED AS:






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TRACE PARKWAY WITH THE EAST LINE OF BARNES ROAD; THENCE RUN SOUTH 71 DEGREES 39 MINUTES



THE EAST LINE OF BARNES ROAD, THENCE THE

FOLLOWING BEARINGS AND DISTANCES ALONG THE SAID BARNES ROAD, NORTH 00 DEGREES 12 MINUTES 52 SECONDS WEST, 1251.47 FEET; NORTH 01 DEGREE 16


DEGREES 26 MINUTES 38 SECONDS EAST, 115.7 FEET;

THENCE LEAVING SAID ROAD RUN EAST 870.2 FEET TO THE POINT OF BEGINNING OF THE PROPERTY

DESCRIBED HEREIN; THENCE CONTINUE EAST 276.87 FEET; THENCE SOUTH 1040.28 FEET; THENCE WEST

276.FEET; THENCE NORTH 1040.28 FEET TO THE POINT OF BEGINNING.

Section 6: All of that part of the N 3A lying north of Natchez Trace


Section 1: TheE/2


Section 25: The SE/4 of the SE/4

Section 36: The SE/4

The E/2 NE/4

The W/2 NE/4, less and except all that acreage lying north of Dampeer Road, and less and except the following:

A PARCEL OF LAND LYING AND SITUATED IN THE

NW/4 NE/4 OF SAID SECTION, BEING MORE

PARTICULARLY DESCRIBED AS FOLLOWS:

COMMENCE AT A RAILROAD SPIKE REPRESENTING

THE NE CORNER OF SAID SECTION 36 AND RUN

THENCE SOUTH 0 DEGREES 00 MINUTES 00 SECONDS

WEST FOR A DISTANCE OF 187.48 FEET TO A POINT;

THENCE RUN SOUTH 90 DEGREES 00 MINUTES 00

SECONDS WEST FOR A DISTANCE OF 1683.60 FEET TO AN IRON PIN ON THE SOUTH RIGHT OF WAY OF

DAMPIERROAD, WHICH IS THE POINT OF BEGINNING

OF THE PARCEL HEREIN DESCRIBED. FROM THE

POINT OF BEGINNING RUN THENCE SOUTH 74

DEGREES 46 MINUTES 41 SECONDS WEST ALONG THE

SOUTH RIGHT OF WAY OF DAMPIER ROAD (CIRCA

MAY, 1997) FOR A DISTANCE OF 458.00 FEET TO AN

IRON PIN; THENCE RUN SOUTH 0 DEGREES 14

MINUTES 03 SECONDS WEST FOR A DISTANCE OF 491.00 FEET TO AN IRON PIN; THENCE RUN O DEGREES

14 MINUTES 03 SECONDS WEST FOR A DISTANCE OF

491.00 FEET TO AN IRON PIN; THENCE RUN NORTH 75

DEGREES 19 MINUTES 29 SECONDS EAST FOR A

DISTANCE OF 456.87 FEET TO AN IRON PIN; THENCE

RUN NORTH 0 DEGREES 13 MINUTES 41 SECONDS

EAST FOR A DISTANCE OF 495.51 FEET TO THE POINT

OF BEGINNING, CONTAINING 5.1325 ACRES, MORE OR LESS.

-4-

Containing 2,567.35 acres, more or less.

4.

If the proposed fieldwide Unit is established and approved and put in effect, it is

necessary to amend the Special Field Rules for the Field to define the Unit and to establish

spacing and production allocation requirements applicable to the fieldwide Unit. In addition,

it will be necessary that said Special Field Rules provide rules for the operation of the

fieldwide Unit for the joint effort calculated to substantially increase the ultimate recovery

of CO2 from the fieldwide Unit and to prevent waste.

5.

The Special Field Rules for the Field should be adopted for these purposes as more

fully set forth below, which are incorporated herein and made a part hereof for all purposes

if the owners in interest ratify the new Unit as required by statute.

6.

The adoption of the Special Field Rules as set forth below for the Field promotes

conservation, protects the co-equal and correlative rights of all owners in interest, avoids the

drilling of unnecessary wells and permits CO2 to be produced which would not otherwise be

recoverable.

IT IS, THEREFORE, ORDERED AND ADJUDGED by the State Oil and Gas

Board of Mississippi that the Special Field Rules for the Lone Pine Field shall be and hereby

are adopted as follows:

SPECIAL FIELD RULES

LONE PINE FIELD

MADISON COUNTY. MISSISSIPPI

I. FIELD AREA

A. The Lone Pine Field, as used herein, is that area consisting of the following lands:



Section 30: The S/2


Section 32: The W/2


Section 5: The W/2 of the NW/4

The NE/4 of the NW/4, less and except a two-acre tract described

as follows:

COMMENCING AT A CONCRETE MONUMENT NUMBER 111 ON THE NORTHERN RIGHT OF WAY

LINE OF THE NATCHEZ TRACE PARKWAY, SAID

MONUMENT BEING NORTH 71 DEGREES 39 MINUTES

EAST 1301.86 FEET MEASURED FROM INTERSECTION

OF SAID NATCHEZ TRACE PARKWAY WITH THE

EAST LINE OF BARNES ROAD; THENCE RUN SOUTH

71 DEGREES 39 MINUTES WEST ALONG THE NORTH

LINE OF NATCHEZ TRACE PARKWAY 1301.86 FEET

TO ITS INTERSECTION WITH THE EAST LINE OF

BARNES ROAD; THENCE THE FOLLOWING BEARING

AND DISTANCES ALONG THE SAID BARNES ROAD:


1251.47 FEET; NORTH 01 DEGREE 16 MINUTES 13

SECONDS EAST 204.55 FEET; NORTH 00 DEGREES 09


DEGREES 26 MINUTES 38 SECONDS WEST 115.7 FEET;

THENCE LEAVING SAID ROAD RUN EAST 1147.07

FEET TO THE POINT OF BEGINNING OF THE






(Unit Tract 7) 8.0 ACRE TRACT LOCATED IN THE

NW/4 DESCRIBED BY METES AND BOUNDS, TO-WIT:


ON THE NORTHERN RIGHT OF WAY LINE OF

NATCHEZ TRACE PARKWAY AND RUN SOUTH 71

DEGREES 39 MINUTES 00 SECONDS WEST ALONG

SAID NORTHERN RIGHT OF WAY FOR A DISTANCE

OF 1301.86 FEET TO THE EASTERN RIGHT OF WAY

LINE OF BARNES ROAD; RUN THENCE ALONG THE

EASTERN RIGHT OF WAY OF SAID BARNES ROAD

THE FOLLOWING COURSES AND DISTANCES NORTH

00 DEGREES 12 MINUTES 52 SECONDS WEST FOR A

DISTANCE OF 1241.47 FEET; THENCE NORTH 01


DISTANCE OF 204.55 FEET, THENCE NORTH 00


DISTANCE OF 43.7 FEET TO AN IRON PIN MARKING

THE POINT OF BEGINNING OF THE PROPERTY

HEREIN DESCRIBED; THENCE CONTINUE ALONG

LAST MENTIONED CALL NORTH 00 DEGREES 09

MINUTES 18 SECONDS EAST 400.0 FEET; THENCE




(Unit Tract 8) 5.32 ACRE TRACT LOCATED IN THE

SE/4 OF THE NW/4 AND BEING MORE

PARTICULARLY DESCRIBED BY METES AND

BOUNDS, TO-WIT: COMMENCING AT A CONCRETE

MONUMENT NUMBER 111 ON THE NORTHERN

RIGHT OF WAY LINE OF THE NATCHEZ TRACE

PARKWAY, AND RUN SOUTH 71 DEGREES 39

MINUTES WEST ALONG SAID NORTHERN RIGHT OF

WAY FOR A DISTANCE OF 1301.86 FEET TO THE

EASTERN RIGHT OF WAY LINE OF BARNES ROAD,

HAVING A FORTY FOOT RIGHT OF WAY; RUN

THENCE ALONG THE EASTERN RIGHT OF WAY OF

SAID BARNES ROAD NORTH 00 DEGREES 12

-6-

MINUTES 52 SECONDS WEST 1201.8 FEET TO THE POINT OF BEGINNING OF THE PROPERTY

DESCRIBED HEREIN; THENCE CONTINUE ALONG

LAST MENTIONED CALL NORTH 00 DEGREES 12

MINUTES 52 SECONDS WEST 49.67 FEET; THENCE

NORTH 01 DEGREES 16 MINUTES 43 SECONDS EAST

AND CONTINUE ALONG SAID EAST RIGHT OF WAY

204.55 FEET; THENCE NORTH 00 DEGREES 09

MINUTES 18 SECONDS EAST AND CONTINUE ALONG

SAID EAST RIGHT OF WAY 43.7 FEET; THENCE

LEAVING SAID EAST RIGHT OF WAY RUN EAST 773.2 FEET; THENCE SOUTH 297.9 FEET; THENCE WEST



NW/4 DESCRIBED AS: COMMENCING AT A

CONCRETE MONUMENT NUMBER 111 ON THE

NORTHERN RIGHT OF WAY LINE OF THE NATCHEZ

TRACE PARKWAY, SAID MONUMENT BEING NORTH

71 DEGREES 39 MINUTES EAST 1301.86 FEET

MEASURED FROM THE INTERSECTION OF SAID

NATCHEZ TRACE PARKWAY WITH THE EAST LINE

OF BARNES ROAD; THENCE RUN SOUTH 71 DEGREES

39 MINUTES WEST ALONG THE NORTH LINE OF

NATCHEZ TRACE PARKWAY 1301.86 FEET TO ITS

INTERSECTION WITH THE EAST LINE OF BARNES

ROAD; THENCE NORTH 00 DEGREES 12 MINUTES 52



THENCE CONTINUE NORTH 00 DEGREES 12 MINUTES

52 SECONDS EAST ALONG THE EAST LINE OF

BARNES ROAD 334.2 FEET; THENCE LEAVING SAID

BARNES ROAD RUN EAST 776.9 FEET; THENCE

SOUTH 334.22 FEET; THENCE WEST 775.6 FEET TO THE POINT OF BEGINNING.


NE/4 NW/4 AND THE SE/4 NW/4 DESCRIBED AS:

COMMENCING AT A CONCRETE MONUMENT

NUMBER 111 ON THE NORTHERN RIGHT OF WAY

LINE OF THE NATCHEZ TRACE PARKWAY, SAID

MONUMENT BEING NORTH 71 DEGREES 39 MINUTES

EAST 1301.86 FEET MEASURED FROM INTERSECTION

OF SAID NATCHEZ TRACE PARKWAY WITH THE

EAST LINE OF BARNES ROAD; THENCE RUN SOUTH

71 DEGREES 39 MINUTES WEST ALONG THE NORTH

LINE OF NATCHEZ TRACE PARKWAY 1301.86 FEET

TO ITS INTERSECTION WITH THE EAST LINE OF

BARNES ROAD, THENCE THE FOLLOWING

BEARINGS AND DISTANCES ALONG THE SAID

BARNES ROAD, NORTH 00 DEGREES 12 MINUTES 52

SECONDS WEST, 1251.47 FEET; NORTH 01 DEGREE 16



THENCE LEAVING SAID ROAD RUN EAST 870.2 FEET

TO THE POINT OF BEGINNING OF THE PROPERTY

DESCRIBED HEREIN; THENCE CONTINUE EAST

276.87 FEET; THENCE SOUTH 1040.28 FEET; THENCE

WEST 276.FEET; THENCE NORTH 1040.28 FEET TO

THE POINT OF BEGINNING.

Section 6: All of that part of the N Va lying north of Natchez Trace

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Section 1: The E/2




The E/2 NE/4

The W/2 NE/4, less and except all that acreage lying north of Dampeer Road, and less and except the following:




COMMENCE AT A RAILROAD SPIKE REPRESENTING THE NE CORNER OF SAID SECTION 36 AND RUN

THENCE SOUTH 0 DEGREES 00 MINUTES 00

SECONDS WEST FOR A DISTANCE OF 187.48 FEET TO A POINT; THENCE RUN SOUTH 90 DEGREES 00

MINUTES 00 SECONDS WEST FOR A DISTANCE OF

1683.60 FEET TO AN IRON PIN ON THE SOUTH RIGHT

OF WAY OF DAMPIER ROAD, WHICH IS THE POINT OF BEGINNING OF THE PARCEL HEREIN DESCRIBED.

FROM THE POINT OF BEGINNING RUN THENCE

SOUTH 74 DEGREES 46 MINUTES 41 SECONDS WEST

ALONG THE SOUTH RIGHT OF WAY OF DAMPIER

ROAD (CIRCA MAY, 1997) FOR A DISTANCE OF 458.00

FEET TO AN IRON PIN; THENCE RUN SOUTH 0

DEGREES 14 MINUTES 03 SECONDS WEST FOR A


RUN O DEGREES 14 MINUTES 03 SECONDS WEST FOR

A DISTANCE OF 491.00 FEET TO AN IRON PIN;

THENCE RUN NORTH 75 DEGREES 19 MINUTES 29

SECONDS EAST FOR A DISTANCE OF 456.87 FEET TO

AN IRON PIN; THENCE RUN NORTH 0 DEGREES 13

MINUTES 41 SECONDS EAST FOR A DISTANCE OF

495.51 FEET TO THE POINT OF BEGINNING,

CONTAINING 5.1325 ACRES, MORE OR LESS.

Containing 2,567.35 acres, more or less underlain by the Norphlet CO2 Pool and including

all productive extensions to all such pool.

II. POOL DEFINITION

A. The Norphlet CO2 Pool means those strata of the Norphlet Formation

productive of CO2 in the interval between 15,110 feet to a depth of 15,688 feet ELM and all

formations between same productive of CO2, as indicated on the electric log of the Denbury

Onshore, LLC - Canton Exchange Bank et al No. 1 Well located 1,846 feet from the South

line and 2,327 feet from the East line of Section 31, Township 9 North, Range 4 East,

Madison County, Mississippi, including those strata which can be correlated therewith.

-8-

HI. RULES;

RULE 1 - LONE PINE UNIT

1.1. Description of Fieldwide Unit Area. The Unit is that portion of the following

described lands lying within the Lone Pine Field underlain by the unitized Norphlet CO, Pool

("Unitized Formation") and described as follows:



Section 30: The S/2


Section 32: The W/2


Section 5: The W/2 of the N W/4

The NE/4 of the NW/4, less and except a two-acre tract described as follows:










THE EAST LINE OF BARNES ROAD; THENCE THE

FOLLOWING BEARING AND DISTANCES ALONG THE

SAID BARNES ROAD: NORTH 00 DEGREES 12 MINUTES

52 SECONDS WEST 1251.47 FEET; NORTH 01 DEGREE 16


DEGREES 09 MINUTES 18 SECONDS EAST 943.54 FEET;


115.7 FEET; THENCE LEAVING SAID ROAD RUN EAST

1147.07 FEET TO THE POINT OF BEGINNING OF THE






(Unit Tract 7) 8.0 ACRE TRACT LOCATED IN THE NW/4



ON THE NORTHERN RIGHT OF WAY LINE OF NATCHEZ

TRACE PARKWAY AND RUN SOUTH 71 DEGREES 39

MINUTES 00 SECONDS WEST ALONG SAID NORTHERN


THE EASTERN RIGHT OF WAY LINE OF BARNES ROAD;

RUN THENCE ALONG THE EASTERN RIGHT OF WAY

OF SAID BARNES ROAD THE FOLLOWING COURSES

-9-

AND DISTANCES NORTH 00 DEGREES 12 MINUTES 52

SECONDS WEST FOR A DISTANCE OF 1241.47 FEET;

THENCE NORTH 01 DEGREES 16 MINUTES 13 SECONDS EAST FOR A DISTANCE OF 204.55 FEET, THENCE

NORTH 00 DEGREES 09 MINUTES 18 SECONDS EAST

FOR A DISTANCE OF 43.7 FEET TO AN IRON PIN

MARKING THE POINT OF BEGINNING OF THE

PROPERTY HEREIN DESCRIBED; THENCE CONTINUE

ALONG LAST MENTIONED CALL NORTH 00 DEGREES

09 MINUTES 18 SECONDS EAST 400.0 FEET; THENCE




(Unit Tract 8) 5.32 ACRE TRACT LOCATED IN THE SE/4

OF THE NW/4 AND BEING MORE PARTICULARLY DESCRIBED BY METES AND BOUNDS, TO-WIT:



NATCHEZ TRACE PARKWAY, AND RUN SOUTH 71

DEGREES 39 MINUTES WEST ALONG SAID NORTHERN RIGHT OF WAY FOR A DISTANCE OF 1301.86 FEET TO

THE EASTERN RIGHT OF WAY LINE OF BARNES ROAD,

HAVING A FORTY FOOT RIGHT OF WAY; RUN THENCE

ALONG THE EASTERN RIGHT OF WAY OF SAID

BARNES ROAD NORTH 00 DEGREES 12 MINUTES 52



THENCE CONTINUE ALONG LAST MENTIONED CALL


49.67 FEET; THENCE NORTH 01 DEGREES 16 MINUTES

43 SECONDS EAST AND CONTINUE ALONG SAID EAST

RIGHT OF WAY 204.55 FEET; THENCE NORTH 00

DEGREES 09 MINUTES 18 SECONDS EAST AND

CONTINUE ALONG SAID EAST RIGHT OF WAY 43.7 FEET; THENCE LEAVING SAID EAST RIGHT OF WAY

RUN EAST 773.2 FEET; THENCE SOUTH 297.9 FEET;

THENCE WEST 776.9 FEET TO THE POINT OF BEGINNING.


NW/4 DESCRIBED AS: COMMENCING AT A CONCRETE

MONUMENT NUMBER 111 ON THE NORTHERN RIGHT

OF WAY LINE OF THE NATCHEZ TRACE PARKWAY,

SAID MONUMENT BEING NORTH 71 DEGREES 39

MINUTES EAST 1301.86 FEET MEASURED FROM THE

INTERSECTION OF SAID NATCHEZ TRACE PARKWAY

WITH THE EAST LINE OF BARNES ROAD; THENCE RUN

SOUTH 71 DEGREES 39 MINUTES WEST ALONG THE

NORTH LINE OF NATCHEZ TRACE PARKWAY 1301.86

FEET TO ITS INTERSECTION WITH THE EAST LINE OF

BARNES ROAD; THENCE NORTH 00 DEGREES 12

MINUTES 52 SECONDS WEST 867.6 FEET TO THE POINT

OF BEGINNING OF THE PROPERTY DESCRIBED

HEREIN; THENCE CONTINUE NORTH 00 DEGREES 12

MINUTES 52 SECONDS EAST ALONG THE EAST LINE

OF BARNES ROAD 334.2 FEET; THENCE LEAVING SAID

BARNES ROAD RUN EAST 776.9 FEET; THENCE SOUTH

334.22 FEET; THENCE WEST 775.6 FEET TO THE POINT OF BEGINNING.


NE/4 NW/4 AND THE SE/4 NW/4 DESCRIBED AS: COMMENCING AT A CONCRETE MONUMENT NUMBER

-10-









THE EAST LINE OF BARNES ROAD, THENCE THE

FOLLOWING BEARINGS AND DISTANCES ALONG THE

SAID BARNES ROAD, NORTH 00 DEGREES 12 MINUTES

52 SECONDS WEST, 1251.47 FEET; NORTH 01 DEGREE 16



THENCE LEAVING SAID ROAD RUN EAST 870.2 FEET

TO THE POINT OF BEGINNING OF THE PROPERTY

DESCRIBED HEREIN; THENCE CONTINUE EAST 276.87


276.FEET; THENCE NORTH 1040.28 FEET TO THE POINT

OF BEGINNING.

Section 6: All of that part of the N V* lying north of Natchez Trace


Section 1: TheE/2




The E/2 NE/4

The W/2 NE/4, less and except all that acreage lying north of Dampeer Road,

and less and except the following:




COMMENCE AT A RAILROAD SPIKE REPRESENTING

THE NE CORNER OF SAID SECTION 36 AND RUN

THENCE SOUTH 0 DEGREES 00 MINUTES 00 SECONDS

WEST FOR A DISTANCE OF 187.48 FEET TO A POINT;

THENCE RUN SOUTH 90 DEGREES 00 MINUTES 00

SECONDS WEST FOR A DISTANCE OF 1683.60 FEET TO

AN IRON PIN ON THE SOUTH RIGHT OF WAY OF

DAMPIER ROAD, WHICH IS THE POINT OF BEGINNING

OF THE PARCEL HEREIN DESCRIBED. FROM THE

POINT OF BEGINNING RUN THENCE SOUTH 74

DEGREES 46 MINUTES 41 SECONDS WEST ALONG THE

SOUTH RIGHT OF WAY OF DAMPIER ROAD (CIRCA

MAY, 1997) FOR A DISTANCE OF 458.00 FEET TO AN

IRON PIN; THENCE RUN SOUTH 0 DEGREES 14

MINUTES 03 SECONDS WEST FOR A DISTANCE OF

491.00 FEET TO AN IRON PIN; THENCE RUN O DEGREES

14 MINUTES 03 SECONDS WEST FOR A DISTANCE OF

491.00 FEET TO AN IRON PIN; THENCE RUN NORTH 75



RUN NORTH 0 DEGREES 13 MINUTES 41 SECONDS

-11-

EAST FOR A DISTANCE OF 495.51 FEET TO THE POINT

OF BEGINNING, CONTAINING 5.1325 ACRES, MORE OR

LESS.

Containing 2,567.35 acres, more or less.

1.2. Unitized Formation. The Unitized Formation is the interval defined in Article

1.2 of the Unit Agreement (Exhibit "1") as follows:

1.2 "Unitized Formation" is the subsurface portion of the Unit Area

described as those strata from 15,110 feet to a depth of 15,688 feet ELM and

all formations between same productive of CO2, as indicated on the electric log

of the Denbury Onshore, LLC - Canton Exchange Bank, et al No. 1 Well

located 1,846 feet from the South line and 2,327 feet from the East line of

Section 31, Township 9 North, Range 4 East, Madison County, Mississippi,

including those strata which can be correlated therewith, which Unitized

Formation may be enlarged as herein provided. It is referred to herein as the

Norphlet CO2 Pool.

1.3. Spacing of Wells in Lone Pine Unit.

(a) Notwithstanding any other provisions contained in these Special Field Rules,

the location of injection and production wells in the Unit shall be selected by the Operator

and shall be governed by the standards of geology and petroleum engineering designed to

promote the greatest ultimate recovery of CO2 contained in the pool. However, no well may

be drilled, injected into or produced from said pool nearer than 100 feet from any exterior

boundary of the fieldwide unit, except upon permit issued by the Mississippi State Oil and

Gas Board, after notice and hearing.

(b) The Operator may drill either injection or producing wells utilizing directional

or horizontal drilling techniques designed to increase the ultimate recovery of hydrocarbons

contained in the pool without notice and hearing; provided, however, that (1) no portion of

the wellbore located within the unitized interval or horizon of any such well so drilled shall

be nearer than 100 feet from any exterior boundary of the Unit, except upon permit issued

by the Mississippi State Oil and Gas Board, after notice and hearing, and (2) the Operator

shall file a directional survey and other information required by rule or written policy of the

Mississippi State Oil and as Board after completion

(c) Furthermore, the Operator may drill either injection or producing wells on the

Unit utilizing directional or horizontal drilling techniques as hereinabove described

regardless of whether the surface location of such wells is within or outside the unit

boundaries of the fieldwide unit.

1.4. Pressure Maintenance and Secondary Recovery Authorized.

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Denbury Onshore, LLC, as Operator of the Unit, is hereby authorized to conduct and

carry out secondary recovery, pressure maintenance, repressuring operations, cycling

operations, water flooding operations, and the injection of extra-neous substances in the Unit,

and any combination thereof, or any other form of joint effort calculated to substantially

increase the ultimate recovery of CO2 from the fieldwide unit as is authorized by the Plan of

Unitization placed into effect by the Mississippi State Oil and Gas Board. The Operator may

use for injection purposes existing wells located in the said Unit which may be converted to

injection wells or wells may be drilled on said fieldwide unit for such purposes. Any such

wells drilled as injection wells or converted to injection wells by the Operator of the

fieldwide unit as a part of pressure maintenance and/or secondary recovery operations may

be approved by the Mississippi State Oil and Gas Board on administrative permit, without

notice and hearing, upon the Operator filing with the Board a duly executed Form 2, the

required permit fee for each such well, and all evidence and information required under

Statewide Rule 63. In addition, existing fieldwide unit injection wells may be converted to

fieldwide unit producing wells on administrative permit, without notice and hearing, upon

the Operator filing with the Board a duly executed Form 2, the required permit fee for each

such well, and all other evidence and information the Board may require.

1.5 Allocation of Production.

The allowable for the Unit shall be that amount that the Operator shall deem prudent

to produce per day which may be produced from any well or wells on said fieldwide unit;

provided, however, that no well shall be operated in such a manner as to cause waste as

defined by the Laws of the State of Mississippi.

1.6 Surface Storage. Measurement, and Transfer Systems.

(a) The Operator of the Unit may maintain such separators, stock tanks,

metering devices, connections and storage facilities as it deems necessary to

accurately measure the total production from the fieldwide unit. Separate

measurement or storage for the wells and leases within the fieldwide unit shall not be

required.

(b) Automatic custody transfer systems which automatically test, sample,

measure and transfer the production from the Operator to the purchaser are hereby

authorized in said fieldwide unit. Such systems will be equipped with a sampling

device which will take a representative sample of the total production passing through

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the system in order that the specific gravity and basic sediment and water content can

be determined. Each custody transfer system will be equipped with a volume

displacement type metering device which registers the volume of oil passed through

it in barrels or multiples thereof.

RULE 2 - ADMINISTRATIVE PERMITTING OF DEVIATED WELLS IN NON-UNITIZED POOLS

A. The Supervisor of the Mississippi State Oil and Gas Board is authorized to

issue permits authorizing the drilling of intentionally deviated wells (either directional or

horizontal wells) into non-unitized pools or intervals within the Lone Pine Field upon

administrative permit, without notice and hearing, upon the Operator filing with the

Mississippi State Oil and Gas Board a duly executed FORM 2, the required permit

application fee for each such well, a duly certified location plat depicting the proposed

drilling unit, the proposed surface location and the proposed bottom hole location and/or

terminus point of such well on such unit, and such other or additional information as the

Board may require.

B. Intentionally deviated wells into non-unitized pools or intervals within the

Lone Pine Field may only be administratively permitted, without notice and hearing, so long

as the proposed bottom hole location or terminus point of such well(s) is regular and fully

complies with all applicable spacing requirements and so long as no portion of the producing

perforations in said well are closer to exterior drilling unit boundaries than authorized by the

Special Field Rules.

C. A complete angular deviation and directional survey of the finished hole of any

such intentionally deviated well(s) shall be conducted and a duly certified copy of such

survey shall be filed with the Mississippi State Oil and Gas Board within thirty (30) days

thereof, all as required by Statewide Rule 14 and the Special Field Rules.

RULE 3 - MEASUREMENT PROCEDURES AND FACILITIES

A. The Operator of the Lone Pine Field shall b e permitted to commingle

production at the surface from all fieldwide and individual units for collection and sale at a

central site as part of its joint effort to develop this area and to prevent waste. This includes

a central tank battery and a central facility for oil, water, and CO2 production, cycling and

injection operations. The CO2 production from the Field may be commingled in a common

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storage or pipeline system. The Operator shall install a flow line, header and measurement

system that allows each well to be separately and individually tested on a periodic basis, not

less than once each month. If, upon a sale therefrom, a variance exists between the

measurement from the common storage system and the measurement from the production

of all the wells commingled in such common storage system, then such variance shall be

allocated back to each of the wells producing into the common storage system

proportionately to the production measured from each of the wells on the basis of the

periodic tests.

B. Each producing well shall be so equipped that gas/oil ratio and bottom hole or

other pressure test may be made.

C. Each producing well shall be connected to a metering system as will permit the

adequate testing of each individual well under usual operating conditions without the

necessity of closing in any other well. Each well shall be tested not less than once per month

for allocation of fieldwide production and between individual units. Separators, stock tanks

or measuring devices and connections thereto shall be subject to approval by the Supervisor.

RULE 4 - APPLICABILITY OF STATEWIDE RULES

All rules and regulations contained in the Statewide Order No. 201-51 and amendments

thereto not specifically covered in the foregoing rules are hereby adopted and shall apply to

Lone Pine Field.

***End of Special Field Rules***

IT IS FURTHER ORDERED AND ADJUDGED that this Order shall be in force

and effect from and after June 25, 2008.

IT IS FURTHER ORDERED AND ADJUDGED that Petitioner shall acquire any

other permits, if any, required by any other permitting authority.

ORDERED AND ADJUDGED this 7^- day of0^y,,; , 2008.

STATE OIL AND GAS BOARD OF

MISSISSIPPI

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Prepared By:

William F. Blair

BLAIR & BONDURANT, P.A.

Post Office Box 321423

Jackson, MS 39232

(601) 992-4477 - Telephone

(601) 992-9189 - Telecopier

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Documents

RE: PETITION OF DENBURY ONSHORE, LLC TO … · re: petition of denbury onshore, llc to ^'led for recohd adopt special field rules for the lone : m, n nnnq pine field in madison county,