WAYNE CHRISTIAN, CHAIRMAN

CHRISTI CRADDICK, C011'fM/SSIONER

RY AN SITTON, COM1\I/JSSIONER

DANA A VANT LEWIS, DIRECTOR

RAILROAD COMMISSION OF TEXAS HEARINGS DIVISION

OIL AND GAS DOCKET NO. 08-0318579

APPLICATION OF OXY USA INC. (630591) AND OCCIDENTAL PERMIAN LTD. (617544) TO CONSOLIDATE THE COBRA (WOLFCAMP), DEWEY LAKE (WOLFCAMP), BLALOCK LAKE (WOLFCAMP), BLALOCK LAKE, S. (WOLFCAMP) AND POWELL (5900) FIELDS INTO THE SPRABERRY (TREND AREA) FIELD, GLASSCOCK COUNTY, TEXAS

HEARD BY: Petar Buva - Technical Examiner Jennifer N. Cook - Administrative Law Judge

DATE OF HEARING: CONFERENCE DATE:

APPEARANCES:

APPLICANT: John Soule Amanda Maxian Charles Angerman

June 19, 2019 August20,2019

REPRESENTING:

OXY USA Inc. and Occidental Permian Ltd.

EXAMINERS' REPORT AND RECOMMENDATION

STATEMENT OF THE CASE

OXY USA Inc. and Occidental Permian Ltd. ("OXY" or "Applicants") seek to consolidate the Cobra (Wolfcamp) (19235700), Dewey Lake (Wolfcamp) (24488650), Blalock Lake (Wolfcamp) (08734500), Blalock Lake, S. (Wolfcamp) (08739500) and Powell (5900) (72810380) Fields into the Spraberry (Trend Area) Field (85280300), Glasscock County, Texas. The application is unprotested, and the Technical Examiner and Administrative Law Judge (collectively, "Examiners") recommend approval of the field consolidation as requested by OXY.

DISCUSSION OF THE EVIDENCE

The Applicants are requesting consolidation of five fields, the Cobra (Wolfcamp ), Dewey Lake (Wolfcamp), Blalock Lake (Wolfcamp), Blalock Lake, S. (Wolfcamp) and Powell (5900) Field into the single Spraberry (Trend Area) Field. The proposed Spraberry (Trend Area) Field is an existing field in the area surrounding the fields to be consolidated and the correlative interval of the Spraberry (Trend Area) Field includes the same productive formations as the fields to be consolidated.

1701 NORTH CONGRESS AVENUE * POST OFFICE BOX 12967 * AUSTIN, TEXAS 78711-2967 * PHONE: 512/463-6924 * FAX: 512/463-6989 TDD 800/735-2989 OR TOY 512/463-7284 * AN EQUAL OPPORTUNITY EMPLOYER* HTTP://WWW.RRC.STATE.TX.US

OIL AND GAS DOCKET NO. 08-0318579 PAGE2

The Cobra (Wolfcamp) Field was discovered on June 20, 1984, at a depth of 7,947 feet. It produces from the Wolfcamp formation. There are currently five operators in the field, two of which are the Applicants. There are 48 oil wells and 4 gas wells identified on the proration schedule in the field.

The Dewey Lake (Wolf camp) Field was discovered on April 12, 1982, at a depth of 8,449 feet. It produces from the Wolfcamp formation. There are currently four operators in the field, one of which is an applicant. There are 6 oil wells on the proration schedule in the field. There is no associated gas field.

The Blalock Lake (Wolfcamp) Field was discovered on April 3, 1966, at a depth of 8,215 feet. It produces from the Wolfcamp formation. The two Applicants are the only operators in the field. There are 2 oil wells identified on the proration schedule. There is no associated gas field.

The Blalock Lake, S. (Wolf camp) Field was discovered on May 1, 197 4, at a depth of 8,246 feet. It produces from the Wolfcamp formation. There are currently four operators in the field, two of which are the Applicants. There are 20 oil wells and one gas well identified on the proration schedule in the field.

The Powell (5900) Field was discovered on August 31, 1991, at a depth of 5,804 feet. It produces from the Clearfork formation. One of the Applicants is currently the only operator in the field . There is one oil well identified on the proration schedule. There is no associated gas field.

The Spraberry (Trend Area) Field was discovered on December 22, 1952. Since its inception, the field has grown geographically and geologically. Geographically, it covers more than eight counties in two of the Railroad Commission's districts (7C and 08). Wells in the field now surround the fields the Applicants are seeking to consolidate. Geologically, the correlative interval from 6,865 feet to 10,605 feet in the Houpt No. 1 (API No. 42-329-31029), in Midland County Texas, is the current designated interval for the Spraberry (Trend Area) Field. The designated field interval includes all reservoirs between the top of the Clearfork and the top of the Strawn formations, specifically the Clearfork, Spraberry, Dean and Wolfcamp formations.

The Cobra (Wolfcamp), Dewey Lake (Wolfcamp), Blalock Lake (Wolfcamp), Blalock Lake, S. (Wolfcamp) and Dewey Lake (Wolfcamp) Fields all produce from the Wolfcamp formation, while the Powell (5900} Field produces from the Clearfork formation. The fields are surrounded by Spraberry (Trend Area) Field wells and are all producing from within the same correlative interval. Consolidation of the five fields would reduce issues with the reporting requirements.

The fields to be consolidated are governed by a variety of special field rules or by statewide rules. The Spraberry (Trend Area) Field is governed by special rules. No changes to those rules are requested. The proposed consolidation of the fields will eliminate problems with permitting and completion of wells within the Spraberry (Trend Area) Field interval in the area of the fields being consolidated and will facilitate development of the various reservoirs found within the formations in the Spraberry (Trend Area) Field on a consistent basis. OXY requests consolidation of the Cobra (Wolf camp), Dewey Lake (Wolfcamp ), Blalock Lake (Wolf camp), Blalock Lake, S. (Wolfcamp) and Powell (5900) Fields into the Spraberry (Trend Area) Field. OXY also requests the transfer of all wells in those of five fields into the Spraberry (Trend Area) Field.

OIL AND GAS DOCKET NO. 08-0318579 PAGE3

FINDINGS OF FACT

1. Notice of this hearing was provided to all operators in the affected fields at least ten ( 10) days prior to the date of the hearing.

2. The Cobra (Wolfcamp) Field was discovered on June 20, 1984, at a depth of 7,947 feet and produces from the Wolfcamp formation.

3. The Dewey Lake (Wolfcamp) Field was discovered on April 12, 1982, at a depth of 8,449 feet and produces from the Wolfcamp formation.

4. The Blalock Lake (Wolfcamp) Field was discovered on April 3, 1966, at a depth of 8,215 feet and produces from the Wolfcamp formation.

5. The Blalock Lake, S. (Wolfcamp) Field was discovered on May 1, 197 4, at a depth of 8,246 feet and produces from the Wolfcamp formation.

6. The Powell (5900) Field was discovered on August 31 , 1991, at a depth of 5,804 feet and produces from the Clearfork formation.

7. The geographic area in which wells have been permitted and completed in the Spraberry (Trend Area) Field has expanded considerably since the field was discovered in 1952. That area now surrounds the five fields for which consolidation into the Spraberry (Trend Area) Field is requested.

8. The Spraberry (Trend Area) Field's designated field interval includes the Clearfork, Spraberry, Dean and Wolfcamp formations.

9. The applicants have requested no changes of Spraberry (Trend Area) Field rules.

10. Applicants agreed in writing or on the record that, pursuant to the provisions of Texas Government Code §2001.144(a)(4)(A), this Final Order can be final and effective on the date a Master Order relating to this Final Order is signed.

CONCLUSIONS OF LAW

1. Proper notice was issued as required by all applicable statutes and regulatory codes.

2. All things have occurred and been accomplished to give the Commission jurisdiction in this matter.

3. The requested field consolidation will prevent waste, protect correlative rights, and promote the orderly development of the affected fields .

4. Pursuant to §2001.144(a)(4)(A) of the Texas Government Code and by agreement of the parties in writing or on the record, the Final Order can be final and effective when a Master Order relating to the Final Order is signed.

OIL AND GAS DOCKET NO. 08-0318579 PAGE4

EXAMINERS' RECOMMENDATION

Based on the above findings of fact and conclusions of law, the Examiners recommend that the Cobra (Wolfcamp ), Dewey Lake (Wolf camp), Blalock Lake (Wolf camp), Blalock Lake, S. (Wolfcamp) and Powell (5900) Fields be consolidated into the Spraberry (Trend Area) Field, in Glasscock County, Texas, and that all wells in the Cobra (Wolfcamp), Dewey Lake (Wolfcamp), Blalock Lake (Wolfcamp), Blalock Lake, S. (Wolfcamp) and Powell (5900) Fields be transferred into the Spraberry (Trend Area) Field, as requested by OXY USA Inc. and Occidental Permian Ltd.

Respectfully submitted,

Petar Buva Technical Examiner