BEFORE THE OIL CONSERVATION DIVISION

NEW MEXICO ENERGY, MINERALS AND NATURAL RESOURCES DEPARTMENT

IN THE MATTER OF THE APPLICATION OF YATES PETROLEUM CORPORATION FOR A NONSTANDARD GAS SPACING UNIT, EDDY COUNTY, NEW MEXICO.

CASE NO. 13927

AFFIDAVIT

STATE OF NEW MEXICO ) ss.

COUNTY OF SANTA FE

William F. Carr, attorney in fact and authorized representative of Yates Petroleum

Corporation, the Applicant herein, states that notice of the above-referenced Application was

mailed to the interested parties shown on Exhibit "A" attached hereto in accordance with Oil

Conservation Division Rules, and that true and correct copies of the notice letter and proof of

notice are attached hereto.

SUBSCRIBED AND SWORN to before me this j £ _ day of \MJM1 . 2007 by William F. Carr

My commission expires QiltillL § NOTARY PUBU&STATgOFMEWMEXICO

BEFORE THE OIL CONSERVATION COMMISSION

Santa Fe, New Mexico Case No. ) 3927....Exhibit No. 4

Submitted by: YAJ^J^ETJiOJJUiMXQRPCjlATJPJl

EXHIBIT A APPLICATION OF

YATES PETROLEUM CORPORATION FOR A NON-STANDARD GAS SPACING UNIT

EDDY COUNTY, NEW MEXICO.

(Hedgerow BFH State Com Well No. 1)

Claremont Corporation PO Box 3226 Tulsa, OK 74101-3226

Davoil, Inc. PO Box 122269 Fort Worth, TX 76121 2269

Devon Energy Production Co, LP 20 North Broadway Oklahoma City, OK 73102-8260

Great Western Drilling Co. POBox 1659 Midland, TX 79702-1659

Edward R. Hudson, Jr. 616 Texas Street Fort Worth, TX 76102-4612

William A. Hudson, II 616 Texas Street Fort Worth, TX 76102-4612

Ard Energy Group, Inc. 222 West 4 t h St. Fort Worth, TX 76102

J&L Resources, Inc. 310 Morton St, Ste 160 Richmond, TX 77469

Redfern Enterprises, Inc. PO Box 2127 Midland, TX 79702-2127

Sieb Resources, Inc. POBox 1107 Richmond, TX 77406

Energen Resources Corporation 605 N. Richard Arrington Jr Blvd Birmingham, AL 35203-2707

Dorothy Nell Sumner Corn 2421 Quinton Ave #105 Lubbock, TX 79710-1734

Betty June, a/k/a Betty Sumner Moran 11100 Los Lagos NE Albuquerque, NM 87111-7533

William e. Sumer c/o Suzanne Simpson 6000 CortaDeraNE #3112 Albuquerque, NM 87111

Mary Gene Weber Box 117 Elmer, OK 73539

Ard Oil, LTD 222 West 4 l h St. Fort Worth, TX 76102

Agnes Dunigan c/o Thomas Lea Dunigan PO Box 9846 Santa Fe, NM 87504

Jospeh L. Dunigan Will c/o Thomas Lea Dunigan PO Box 9846 Santa Fe, NM 87504

Roy & Connie Dunn 5511 North Delno Fresno, CA 93711-3024

John & Helen Frankot Trust 1940 Verbenia Drive Las Vegas, NV 89134

R. Daniel Israel 70 Shadow Play Irvine, CA 92620

John Halagan, Jr. 9 Jefferson Irvine, CA 92620-3269

Joe Halagan 6462 Upper Lake Cir Westerville, OH 43082

Hudson New Mexico Mineral Trust, E. Randall Hudson III 616 Texas Street Fort Worth, TX 76102-4612

Lindy's Living Trust Francis H. Hudson, Trustee 6300 Ridglea Place Ste 1005A Fort Worth, TX 76116

Patricia Mayfteld Janzen c/o George V. Janzen 3488 "B" Calle Azul Laguna Woods, CA 92653

Thomas Moore Mayfield, Jr. Patricia Mayfield Will c/o George V. Janzen 3488 "B" Calle Azul Laguna Woods, CA 92653

John W. Gates, LLC 706 West Grand Avenue Artesia, NM 88210

Thomas G. Laros Address Unknown

Grace E. Larue c/o Craig E. Malmgren 24470 Hidden Court Hayward, CA 94541

Delmar Hudson Lewis Living Trust PO Box 2546 Fort Worth, TX 76113-2546

Lloyd Co, A Partnership Colorado State Bank and Trust PO Box 1588 Littleton, CO 74101-1588

The McCaw Family Trust 210 Crossbow Rd Artesia, NM 88210

Edith B. Myers 2717 South Lyon Indianapolis, IN 46241

W.T. & Jeanette J. Probandt 415 W. Wall, Ste 2206 Midland, TX 79701

Reva Co, A Partnership Colorado State Bank and Trust POBox 1588 Tulsa, OK 74101-1588

Gwendolyn Taylor Rutledge 354 Calle Colina Santa Fe, NM 87501-0354

Joe B. Schutz PO Box 973 Santa Fe, NM 87504

Rosina C. Schutz PO Box 9602 Santa Fe, NM 87504

Swinehart 1973 Trust 10713 S. Logan Canyon Rd S Jordan, UT 84095

Ann F. Tollefson 231 East 10th St Casper, WY 82601

Gene Trowbridge, Jr. POBox 1169 Saratoga, WY 82331

Patricia B. Young PO Box 1639 Solana Beach, CA 92075

Southwest Royalties, Inc. PO Box 1658 Carlsbad, NM 88221-1658

Sol West PO Box 10120 El Paso, TX 79995

Yates Petroleum Corporation 105 South Fourth Street Artesia, NM 88210-2118

Abo Petroleum Corporation 105 South Fourth Street Artesia, NM 88210-2118

MYCO Industries, Inc. 105 South Fourth Street Artesia, NM 88210-2118

Yates Drilling Company 105 South Fourth Street Artesia, NM 88210-2118

COG Operating, LLC 550 West Texas Avenue Suite 1300 Midland, Texas 79701

3711506_1.DOC

)

H OLLAND& HART William F. Carr wcarr@hollandhart.com

May 17, 2007

C E R T I F I E D MAIL - RETURN R E C E I P T REQUESTED

TO ALL AFFECTED INTEREST OWNERS

Re: Application of Yates Petroleum Corporation for a nonstandard gas spacing unit, Eddy County, New Mexico.

Ladies and Gentlemen:

This letter is to advise you that Yates Petroleum Corporation has filed the enclosed application with the New Mexico Oil Conservation Division seeking an order approving a 160-acre nonstandard gas spacing unit in the Salado-Strawn Gas Pool for its Hedgerow BFH State Com Well No. 1 located 660 feet from the South line and 1136 feet from the West line of Section 28, Township 20 South, Range 28 East, NMPM, Eddy County, New Mexico.

This application has been set for hearing before a Division Examiner at 8:15 AM on June 7, 2007. The hearing will be held in Porter Hall in the Oil Conservation Division's Santa Fe Offices located at 1220 South Saint Francis Drive, Santa Fe, New Mexico 87505. You are not required to attend this hearing, but as an owner of an interest that may be affected by this application, you may appear and present testimony. Failure to appear at that time and become a party of record will preclude you from challenging the matter at a later date.

Parties appearing in cases are required by Division Rule 1208.B to file a Pre-hearing Statement four days in advance of a scheduled hearing. This statement must be filed at the Division's Santa Fe office at the above specified address and should include the names of the parties and their attorneys; a concise statement of the case; the names of all witnesses the party will call to testify at the hearing; the approximate time the party will need to present its case; and identification of any procedural matters that are to be resolved prior to the hearing.

William FJCarr j Attorney for Yates Petroleum Corporation

Enclosures cc: Mr. Charles Moran

Yates Petroleum Corporation

STATE OF NEW MEXICO 3 DEPARTMENT OF ENERGY, MINERALS AND NATURAL RESOURCES^

OIL CONSERVATION DIVISION =2

IN THE MATTER OF THE APPLICATION OF ° ° YATES PETROLEUM CORPORATION FOR ^ A NON-STANDARD GAS SPACING UNIT, EDDY COUNTY, NEW MEXICO.

APPLICATION

YATES PETROLEUM CORPORATION ("Yates"), by its undersigned attorneys, hereby

makes application to the Oil Conservation Division for an order establishing a non-standard 160-

acre spacing unit within the Saladar-Strawn Gas Pool (84412) to comprise the SW/4 of Section

28, Township 20 South, Range 28 East, NMPM, Eddy County, New Mexico to be dedicated to

its Hedgerow BFH State Com Well No. 1 (API No. 30-015-33715) located at a standard gas well

location 660 feet from the South line and 1136 feet from the West line (Unit M) of said Section

28 and in support of this application states:

1. The SW/4 of Section 28 is located in the Saladar-Strawn Gas Pool which is

unprorated and is therefore not subject to Part H of the Division's statewide rules entitled "Gas

Proration and Allocation" (Rules 601 through 605). However, the pool is currently governed by

Division Rule 104.C(2), which requires 320-acre spacing units comprised of two contiguous

quarter sections of a single governmental section with wells located not closer to a quarter

section line than 660 feet nor closer to any internal quarter-quarter section line than 10 feet, and

allows an optional infill well within an existing spacing unit provided the infill well is located in

the quarter section not containing the unit's initial producing gas well.

2. The N/2 of Section 28 was dedicated in the Strawn formation to the Great

Western Drilling Company Burton State Well No. 1. This well produced from the Strawn for

approximately 8 years and was plugged and abandoned in 1982.

3. A nonstandard gas spacing unit comprised of the SE/4 of Section 28 is dedicated

to the Ocean Energy, Inc. Burton Flat Deep Unit Well No. 13 (API No. 30-015-21125). This

nonstandard unit, approved by Division Order No. R-11928 entered on March 26, 2003, was

created because the SE/4 of Section 28 is in the Burton Flat Deep Unit and the lease covering the

SW/4 of the Section 28 had expired at the time the nonstandard unit was created. Approval of a

160-acre nonstandard unit for the SE/4 of the Section prevented adverse impacts on the parties

who had initially paid for the well when it was drilled to the Morrow formation.

4. The SW/4 of Section 28 is the only acreage in this section in the Strawn formation

that has not been drained or is not currently dedicated to an existing and producing nonstandard

spacing unit in this formation.

5. Approval of this application will be in the best interest of conservation, will

prevent the waste of hydrocarbons and will enable the owners of interests under the SW/4 of

Section 28 to produce their just and equitable share of the reserves under this property thereby

protecting correlative rights.

WHEREFORE, YATES PETROLEUM CORPORATION requests that this application

be included on the docket for the June 7, 2007 examiner hearing docket and that after notice and

hearing as required by law, the application be granted.

Respectfully submitted,

HOLLAND & HART. LLP

By:

WILLIAM F. CARR \ Post Office Box 2208 Santa Fe, New Mexico 87504 Telephone: (505)988-4421

ATTORNEYS FOR YATES PETROLEUM CORPORATION

Application of Yates Petroleum Corporation for a nonstandard gas spacing unit, Eddy County, New Mexico. Applicant, in the above-styled cause seeks an approving a 160-acre non-standard gas spacing unit comprised of the SW/4 of Section 28, Township 20 South, Range 28 East, NMPM, to be dedicated to its Hedgerow BFH State Com Well No. 1 (API No. 30-015-33715) to be recompleted from the Morrow formation to the Strawn formation, Saladar-Strawn Gas pool (84412) at a standard gas well location 660 feet from the South line and 1136 feet from the West line of said Section 28. Said unit is located approximately 9 miles north northeast of Carlsbad, New Mexico.

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Affidavit of Publication NO. 19751

Copy of Publication:

STATE OF NEW MEXICO

County of Eddy:

Gary D. Scott being duly

sworn,says: That he is the Publ isher of The

Artesia Daily Press, a daily newspaper of general

circulation, published in English at Artesia, said county

and county and state, and that the here to attached

Legal Notice

was published in a regular and entire issue of the said

Artesia Daily Press.a daily newspaper duly qualified

for that purpose within the meaning of Chapter 167 of

the 1937 Session Laws of the state of New Mexico for

1 Consecutive week/days on the same

day as follows:

First Publication

Second Publication

Third Publication

Fourth Publication

May 18 2007

Subscribed and : sworn to before me this

24th l ^ Day May 2007

Notary Public, Eddy County, New Mexico

My Commission expires April 5,2011

' LEGAL .NOTICE

NOTICE OF PUBLICATION

STATE OF NEW MEXICO

ENERGY, MINERALS AND NATURAL RESOURCES DEPARTMENT ,

OIL CONSERVATION > DIVISION ;

SANTA FE, NEW MEXICO

The State: of New Mexico] through its Oil Conserva-j tion Division hereby I gives notice pursuant to! law and the Rules and! Regulations of the Divi­sion of the following pub­lic'hearing to be held atj 8 15 AM. on June 7,i 2007, in the Oill Conservation' Division Heanng Room at 1220 South St. Francis, Santa Fe, New Mexico, before an examiner duly appoint for the heanng. If you ^re an individual with a disability who is in need of a reader, amplifier, qualified sign language interpreter, or any other form of auxiliary aid or service to attend or par­ticipate • in the hearing.* please contact. Florenej Davidson at 505-476-3458 or through the New Mexico Relay N e- t w o r k , 1-800-659-1779 by May 28, 2007. Public docu-j ments including thej agenda and minutes, can' be provided in various! accessible forms.! Please contact Florenej Davidson if. a summary! or other type of access*] ble form is needed. ;

STATE OF NEW . MEXICO TO:

All named parties and i persons having any ' right, title, Interest .

or claim in the following cases

and notice to the J public.

(NOTE: . All land de-| scnptions herein refer to ! the New Mexico Principal! Mendian whether or noM so stated.)

CASE 13927: Applica-; tion of Yates Petroleum, Corporation for a non-; standard gas spacing! unit, Eddy County, New

seeks an approving order for a 160-acre non-sta­ndard gas spacing unit comprised; of the? SW/4 of Section 28, Township 20 South, Range 28 East, NMPM, to be dedi­cated to its Hedgerow BFH State Com Well No 1, (API No. 30-015-33715) to be re-' completed from the Mor­row formation to the Strawn formation, Sadar-Strawn: Gas pool (84412) at a standard' gas well location 660 feet] from the South line and' 1136 feet from the West] line of said Section 28J Notice is hereby provided to all parties and persons haying any right, title, in terest or claim in the propefty * described herein above including Thomas G Laios whose1

address is - unknown > Said unit is located ap­proximately 9 miles north northeast of Carlsbad, New Mexico.

... Given, under t h e Seal of the State of New ' Mexico, Oil Conservation - Com­mission at Santa Fe, New Mexico on this 17th day of May 2007.

STATE OF NEW MEXICO:

OIL CONSERVATION, DIVISION i

Mark E. Fesmire, P.E.,, Director

Published in the Artesia; Daily Press, Artesia,! N M.May 18,2007 j

Legal 19751

NOTICE OF PUBLICATION

STATE OF NEW MEXICO ENERGY, MINERALS AND NATURAL RESOURCES DEPARTMENT

OIL CONSERVATION DIVISION SANTA FE, NEW MEXICO

The State of New Mexico through its Oil Conservation Division hereby gives notice pursuant to law and the Rules and Regulations of the Division of the following public hearing to be held at 8:15 A.M. on June 7, 2007, in the Oil Conservation Division Hearing Room at 1220 South St. Francis, Santa Fe, New Mexico, before an examiner duly appoint for the hearing. If you are an individual with a disability who is in need of a reader, amplifier, qualified sign language interpreter, or any other form of auxiliary aid or service to attend or participate in the hearing, please contact: Florene Davidson at 505-476-3458 or through the New Mexico Relay Network, 1-800-659-1779 by May 28, 2007. Public documents including the agenda and minutes, can be provided in various accessible forms. Please contact Florene Davidson if a summary or other type of accessible form is needed.

STATE OF NEW MEXICO TO: All named parties and persons having any right, title, interest or claim in the following cases

and notice to the public.

(NOTE: All land descriptions herein refer to the New Mexico Principal Meridian whether or not so stated.)

CASE 13927: Application of Yates Petroleum Corporation for a nonstandard gas spacing unit, Eddy County, New Mexico. Applicant, in the above-styled cause seeks an approving order for a 160-acre non-standard gas spacing unit comprised of the SW/4 of Section 28, Township 20 South, Range 28 East, NMPM, to be dedicated to its Hedgerow BFH State Com Well No. 1, (API No. 30-015-33715) to be recompleted from the Morrow formation to the Strawn formation, Sadar-Strawn Gas pool (84412) at a standard gas well location 660 feet from the South line and 1136 feet from the West line of said Section 28. Notice is hereby provided to all parties and persons having any right, title, interest or claim in the property described herein above including Thomas G. Laros whose address is unknown. Said unit is located approximately 9 miles north northeast of Carlsbad, New Mexico..

Given under the Seal of the State of New Mexico Oil Conservation Commission at Santa Fe, New Mexico on this 17th day of May 2007.

STATE OF NEW MEXICO OIL CONSERVATION DIVISION

Mark E. Fesmire, P.E., Director

3707770..DOC