FOR OFFICIAL USE ONLY
State of Colorado
FORM
38
Oil and Gas Conservation Commission
1120 Lincoln street, Suite 801, Denver, Colorado 80203 (303) 894-2100 Fax: (303) 894-2109
Rev
1/10
PAYMENT OF PROCEEDS HEARING REQUEST
This form may be submitted only by a payee legally entitled to payment from proceeds derived from the
sale of oil, gas, or associated products from a well in Colorado. The payee is to complete this form (one
form per well), attach required documentation and mail to: COGCC, 1120 Lincoln Street, Suite 801,
Denver, Colorado 80203 or fax to: (303) 894-2109. COGCC will investigate the report and determine
what action, if any, should be taken.
PAYEE INFORMATION
NAME OF PAYEE: ConocoPhillips Co pany
PHONE NO: 832-486-2377
ADDR SS: 600 North Dairy Ashford
FAX:
CITY: Houston
STATE: TX
ZIP: 77079
832-486-2027
E-MAIL: [email protected]
PAYEE NUMBER: 19160
MIN RAL INFORMATION
WELL NAME: Southe n Ute 33-9 #30-2
COUNTY: La Plata
QTR/QTR SEC: TOWNSHIP: RANGE:
API NUMBER: 05-067-08115
SENW Section 30 T33N-R9W
NON-COMPLIANCE ISSUES NOT RESOLVED
(PLEASE CHECK ALL THAT APPLY)
Required checkstub detail not provided:
Late payment
Non payment
No interest paid on late payment
No response to Form 37 inquiry
All pertinent documentation must be attached. This includes: completed
copy of operator contact Form 37, proof of mailing, response (if received
from operator), redacted checkstub detail and any other documentation
necessary.
James H. Vaiana
Managing Counsel - Lower 48 E&P
3WL3072
ConocoPhillips
600 North Dairy Ashford
Houston, Texas 77079-1175
832-486-2377
Email: [email protected]
November 30,2015
By Email; [email protected]
Jill Dorancy
Hearings Officer
Colorado Oil & Gas Conservation Commission
1120 Lincoln Street, Suite 801
Denver, Colorado 80203
Re: Form 38 - Payment of Proceeds Hearing Request
Maralex Resources, Inc.
Southern Ute 33-9 #30-2
API No. 05-067-08115
SENW Section 30 T33N R9W
La Plata County, Colorado
Dear Ms. Dorancy:
ConocoPhillips Company ( COP ) hereby respectfully submits its Form 38 - Payment of
Proceeds Hearing Request to the Colorado Oil & Gas Conservation Commission (“COGCC”)
conce ing failure by Maralex Resources, Inc. (“Maralex”) to pay proceeds attributable to an
overriding royalty interest owned by COP, which burdens production from the Southe Ute 339 #30-2 well located in La Plata County, Colorado. COP includes the following in support of its
Form 38 hearing request:
1. Assignment and Bill of Sale from SG Interests V, Ltd. to Conoco Inc. (predecessor in
interest to COP), dated effective July 1, 2001, and recorded October 3, 2001 at RCPT #
814703 of the records of La Plata County, Colorado, covering COP s overriding royalty
interest in the captioned well and interests in various other p operties. See Exhibit “A”
attached hereto.
2. Maralex s letter to COP dated July 6, 2015, in which Maralex acknowledges COP s
ownership of the overriding royalty interest and states in part that it “does not dispute the
fact that ConocoPhillips is due payment of the suspended funds”. The letter also slates
that approximately $330,000 is owed to COP.1 See Exhibit “B” attached hereto.
1 COP is separately filing a Form 38 with COGCC concerning Maralex s failure to pay proceeds attributable to an
oveniding royalty interest owned by COP that burdens production f om the Southern Ute 33-9 #30-3 well. The
approximate $330,000 owed by Maralex to COP includes proceeds attributable to the captioned well and the
Southern Ute 33-9 #30-3 well.
COGCC
Form 38 - Payment of Proceeds Hearing Request
Page 2
3. Division Order provided by Maralex for the captioned well executed by COP.2 See
Exhibit C attached hereto.
4. OOP s letter to Maralex dated September 30, 2015 demanding payment for proceeds
attributable to COP’s overriding royalty interest in the captioned well.3 This letter was
sent by certified mail to an address for Maralex in Fruita, Colorado but was returned
undelivered. COP subsequently sent by certified mail a follow up letter dated October
19, 2015 to an address for Maralex in Ignacio, Colorado. That letter, which reaffirmed
COP’s demand for payment and included a copy of the September 30th letter, was
received by Maralex on October 22, 2015. See Exhibit D attached hereto.
5. As of the date of this letter, Maralex has neither provided any written reply to COP’s
demand letters as referenced in paragraph 4 above nor tendered payment to COP.
Therefore, COP requests that this matter be set for hearing before the COGCC at the earliest
available date. COP also expressly reserves all rights, defenses and remedies available to protect
and recover amounts due and owing from Maralex concerning this matter, including but not
limited to those under CRS 34-60-118.5.
Please contact me if you need further information regarding this request. I look forward to
hearing from you.
Respectfully submitted,
CONOCOPHILLIPS COMPANY
Attachments:
Exhibit A - Assignment and Bill of Sale
Exhibit B - Division Order
Exhibit C - Maralex letter
Exhibit D - COP letters
cc: By Email: [email protected]
Jennifer A. Ritcher
Maralex Resources, Inc.
2 COP also executed a Division Order provided by Maralex for the Southern Ute 33-9 #30-3 well.
3 COP s letter also demands payment for the overriding royally owned by COP in the Soulhem Ute 33-9 #30-3 well.
864 20 Road, Unit A
Fruita, Colorado 81521
(970) 858-8560
AX (970) 858-8155
P.O. Box 338
Ignacio, Colorado 81137
(970) 563-4000
FAX (970)563-4116
ConocoPhillips Company
3401 E. 30th Street
Farmington, New Mexico 87402
Attn: Ben J. Mitchell
RE: Southern Ute 33-9-30 #2
Southern Ute 33-9-30#3
La Plata County, Colorado
Dear Ben,
Reference is made to your conversations with Maralex concerning the suspended monies pertaining to
the override in the captioned wells.
ConocoPhillips acquired an interest in the captioned wells, along with other properties from SG Interests
effective July 1, 2001. Maralex was never notified of this transfer of interest by ConocoPhillips but found
a copy of the Assignment on the La Plata County online records in February of 2015. Maralex then
notified ConocoPhillips.
Maralex takes its production in-kind from these wells, which are operated by BP, and pays the overrides
on the tracts in which it has a working interest. The interest, which Maralex believed to be owned by SG,
was placed into suspense in November 2001 in order to net it against expenses for other SG properties in
which Maralex operates.
Maralex does not dispute the fact that ConocoPhillips is due payment of the suspended funds. However,
payment of the suspended funds is complicated due to the fact that Maralex wasn't timely notified of the
change in ownership. Rather than the funds sitting in a suspense account, they were netted against an
outstan ing A/P balance owed to Maralex by SG. There is currently approximately $330,000.00, in
suspense on the books. Maralex proposes a series of monthly payments to ConocoPhillips, over a five
year period, with each monthly payment in an appro imate amount of $5,500.00.
Any funds paid to SG prior to November 1, 2001 would be ConocoPhillips responsibility to collect. In
addition, we have sent a Division Order to ConocoPhillips for execution. It is my understanding that this
has been sent to the Bartlesville office for execution. To date, aralex has not received this back from
ConocoPhillips. Once Maralex receives it, ConocoPhillips will be placed in pay status going forward.
We thank you for your patience while we have sorted through the history of this. If this proposal is
acceptable to ConocoPhillips, please advise and we will prepare a formal document with detailed back-up
for execution by both parties. Should you have any questions, you may reach e at (817) 337-4512 or
[email protected]
Sincerel ,
/Jennifer AURitcher,
for Maralex Resources,Inc.
DFVTSION O DER
TO: MaraJex Resources, fnc.
P.O. Box 338
DATF.: July 1, 001
Iguacio. CO 81137
Phone: (970)5(53-4000
Fax: (970) 563-4116
Property Name: Southern Ute 33-9; 30-2 & 30-3 wells
Operato BP Ame ica Production Com any
Property
Description: To ship 33 North, Range 9 West, N.M.P.M.
Section 30: N/2
La Plata Count , Colorado
Formation: Fruitland Co l
Owner Name: ConocoP illips Compa y
Address do Burlington Resources Oil & Gas Company LP
P.O. Box 22295 Network Plac
Chica o. 1L 60673-1222
Typeoflnterest: OR
Decimal Interest: .0312187
Maralex pa s - 0.00849775 (BP pays *>maindw=)
Our grossed up Dumber is 0.04138753
The u d rsigne certifies the ownership of their eci al interest in pro uction or roceeds as described above payable by M ralex
Resources, I c.
Marale Resources, Inc. shall be notified, in writing, of an cha ge in o n rship, ecimal interest, or payment a ress, if different
from above. No change of ownership nor transfer of interest shall be binding until an e ecute Transfer Or er or revised Division
Order and the recorded instrument evidencing the ch nge of ownership or transfer, or a certifie cop thereof; is furnishe to Mar lex.
ll such changes shall be effective the f st da of the month f llo ing receipt of such notice. aralex shall not be hel liable for an
payments made in error as a result of not being furnished the change of ownershi or trans er of interest information required in this
paragraph.
Marale Resources, Inc. is authorized to wit hold payment pending resolution of any title dispute or adverse claim asserted re ar i g
the interest in prod ction claimed herein by the u dersig ed. The u dersigned agrees to indemnify nd reimburse Marale e ources,
Inc. any amount attribut ble to an interest to hich the undersigned is not entitled.
If Maralex withholds or suspends pa ment to Ow er pursuant to n provision o this Division Order, Owner a rees to in emnify and
hold har less Maralex from liability for an ta es, costs or expe ses suffere or imposed upon Maralex to ether with interest and
penalties hich mi ht be im osed or assessed a ainst, or p id b Marale on account of the sums so ithheld from pa ment to a thir
part . O ner a rees that M r lex ma educt all such taxes, costs, ex enses, interest an penalties ai b Maralex from an sums
due to O ner,
Marale Resourc s, Inc. may accrue proceeds until the total amount equals twenty-five dollars (S25.00) or p y annuall , whichever
occurs first, or as re uired by applicable st te statute.
This Division Or er ocs not amend any lease or operating a reement between the un ersi ne an the lessee or operator or any other
contracts for the purchase of oil or gas.
The un ersigned agrees that if Marale Resources, Inc. is re uire to deh drate, treat, com r ss, odorize, ga her or tran port ny oil,
gas and the components thereof, as ma be re uire by the purchaser and before elivery to the purchaser, Mar lex Resources. Inc.
shall be entitle to de uct undersigned s proportionate part of sai costs.
Marale Resources, Inc. is selling its as (and any gas which is not separ tely taken or disposed of by owner) to a marketing entit
under terms and conditions hich it believes to be the market value of the as at the wellhead at the time of s le. As of the e ecution
date of this instrument, the gas is bei g committed to contracts not exceeding one year in length at a price currently related to n in ex
price used for gas in this geographic area, at the ellhead, less the costs of transporting the g s from the le sehol remises to such
pricin point
In addition to the terms and conditions of this Division Order, the un ersigne and Maralex Resources, Inc. ma have certain statutot
rights under the l ws of the state in which the proper is located.
This Division Or er s ll ecome valid nd binding on each Owner who signs it, hether or not ail Owners sign Division Order.
The provisions hereof shall e binding upon each executin O ner's heirs, successors, executors, a mi istrators, le l representati es
and assigns. This Division Order shall also be binding as to Maralc s successors a d assi ns.
E ecuted this day of
2015.
Owncrfs) signature Owner Ta ID Number: Owner Daytime Telephone #:
CONOCOPHILLIPS COMPANY
NOTE: Federal La re uires ou to fu ish our Social Securit or Tax ayer Identification Number. Failure to compl will result
in 28% tax ithhol ing and ill not be refun able by Maralex Resources, Inc.
Type of Interest Codes: R]=Roy lty Interest, O Overriding Royalt Interest, Wl=Workin Interest, BPO=Before Pa out,
APO fter Payout
76b?
D/eZ'y l ~£>O0(
OOQI
THIS SIGNATURE PAGE IS AN A TACHMENT TO YOUR DIVISION ORDER
NO.
¦k; jl
Wit ess
CONOCOPHELLIPS COMPANY, BY
RICHARD L. HARTMAN
DIRECTOR-DIVISION ORDER AND
OW ER ELATIONS
REAL PROPERTY ADMINISTR TION
MAIL REMITTANCE TO:
CONOCOPHE LIPS COMPA Y
P.O. BOX 22295 ETWORK PLACE
CHICAGO, E 60673-1222
TA ID #73-0400345
MAIL CORRESPONDENCE ONLY:
CONOCOPHIL IPS COMP NY
EAL PROPERTY ADMINISTRATION
P.O. BOX 7500
B RTLESVILLE, OK 7 005
CONOCOPHILLIPS D/O #: Ob i jj
DATE REVIEWED A D RETURNED:
DIVISION ORDER
TO:
Mar iex Resources, Inc.
P.O. Box 338
DATE: July 1,2001
i nario, CO 811 7
p'hone: (970) 563-1000
Fax: (970) 563-4116
Property Na e:
Southern Ute 33- ; 30-2 & 30-3 wells
Operaton
BP America Pro uction Company
Pro erty
Description:
To nship 33 North, Range 9 West, N.M.P.M.
Section 30:N/2
La Plata Count , Colorado
Formation:
Fruitland Coal
Owner Name:
ConocoPhilljps Com any
Address:
c o Burli gton Resources Oil & Gas Compan LP
P.O. Box 222 5 et ork Pl ce
Chicago, IL 60673-1222
Type of Interest:
OR
Decimal Interest:
.03121879
Maralex pays 0.C
Our grossed up number is 0.04138753
certifies the ownersbip of their decimal interest i production or proceeds as described above pa able b Maralcx
InC' Sfa11 be n° fied 111 'vrilin® 0fan> chan2c o erehip. decimal interest, or payment address, if ifferent
OHer n,h ch .«f 0' h,p nor transfer of .merest shall be bin ing until an executed Transfer Order or revise Division
reco d inst2irBent «v.denc the change of o nership or transfer, or a certified cop thereof is furnishe to Maraiex.
TfS £CI firSt day of th£ month fo!lo 6 «ipt of such notice. Marai x sh ll not be held liablefo
p Japh
3
f 1101 S ChC Cbange of ownershiPor *™>sfer of interest information required in this
Maraiex Resources, Inc. is authorized to withhold payment pending re olution f an title dispute or adverse claim as erted re arding
£ l!!! her n by *e underei ed- d
ecs .o indemnify and reimburse jSSS fiSS
Inc. ny amount attributable to an mtcresi to which the undersigne i not entitled. Ces
|
=s?s=;s=g=
und£rs rt
Executed this
. da of_
Ownerfs) si nature
d Msra,
• « »
.2015.
O ner Tax iD Number: Owner Daytime Telephone #:
CONOCOPHIIliPS COMPANY
Aft ?So d€S: IU=ROyalty Intewst> Ofc Owrridiag Royalty Interest, \VI=\Vorking Interest, BPO=Before Pa out,
„
70
fryoto t
0(0 I
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ooot-
THIS SIGNATURE PAGE IS AN ATTACHMENT TO YOUR DIVISION ORDER
NO.
(b'A Jk.j Ja JuS iLd
l
Witness
MAIL REMITTANCE TO:
CONOCOPHILLIPS COMPANY
P.O. BOX 22295 NETWORK PLACE
CHICAGO, DL. 60673-1222
TAX ID #73-0400345
MAIL CORRESPONDENCE ONLY:
CO OCOPHILLIPS COMPANY
REAL PROPERTY AD INISTRATION
P.O. BOX 7500
BARTLES3TLLE, OK 74005
CONOCOPHILLIPS D/O #:
DATE REVIEWED A D RETUR ED:
CONOCOPHI LIPS COMPA Y, BY
RICHARD L. H TMAN
DI ECTOR-DIVISIO OR ER AND
OWNER ELATIONS
REAL PROPERTY AD INIST ATION
James H. Vaiana
Managing Counsel - Lower 48 E&P
3WL3072
ConocoPhillips
600 North Dairy Ashford
Houston, Texas 77079-1175
832-486-2377
Email: [email protected]
October 19, 2015
By Certified Mail - Return Receipt Re este
Mara ex Reso rces, Inc.
P.O. Box 338
Ignacio, Colo ado 81137
Attention: Jennifer A. Rilcher
Re: Demand for Payment of Suspended Funds
So the Ute 33-9-30 #2
Southern Ute 33-9-30 #3
La Plata County, Colorado
Dear Ms. Rilcher:
The enclosed letter dated September 30, 2015 was recently sent by U.S. certified mail by
ConocoPhillips Company to your attention at Maralex Resou ces, Inc. with the following
address:
Maralex Resources, Inc.
864 20 Road, Unit A
Fruita, Colorado 81521
This lette was ret rned to our office with the mailing envelope changed to reflect the Ignacio,
Colorado address noted above (co y lso enclosed). We reaffirm the demand for payment and
reserve the rights and remedies a stated in our September 30th letter, an await a reply.
Sincerely,
NOCOPHILLJIPS COMPANY
Vt • //\f
es H. Vaiana
Enclosure
James H. Vaiana
Managing Counsel - Lower 48 E&P
3WL3072
ConocoPhillips
600 North Dairy Ashford
Houston, Texas 77079-1175
832-486-2377
Email; [email protected]
September 30, 2015
By Certified Mail - Return Receipt Req ested
Maralex Resources, Inc.
864 20 Road, Unit A
Fruita, Colorado 81521
Attention: Jennifer A. Rilcher
Re: Demand for Pay ent of Suspended Funds
Southern Ute 33-9-30 #2
Southern Ute 33-9-30 #3
La Pl ta County, Colo ado
Dear Ms. Ritcher:
Your letter dated July 6, 2015 addressed to Ben J. Mitchell, who works in the Land Depa tment
at our field office in Far ington, New Mexico was ecently sent to me fo eview. A copy of
your letter is enclosed.
In response, ConocoPhillips Company ( COP ) hereby demands full payment within twenty (20)
days of receipt of this letter of all proceeds held in suspense by Maralex Resources, Inc.
( Maralex”) that are attributable to the interests of COP in the captioned wells, as described in
your letter dated July 611'. The offe f om Maralex to p y such roceeds held in suspense to COP
over a five-year period as described in your letter is rejected. Maralex should tender payment for
the full a ount of the suspended proceeds as follo s:
ConocoPhillips Company
600 North Dairy Ashford
Houston, Texas 77079-1175
Attention: James FI. Vaiana
COP also demands information and calculations as required under CRS 34-60-118.5 with respect
to pay ent of the above-described suspended p oceeds. Such information and calculatio s
should be provided to COP either concurrently or as soon as possible after Mar lex s tende of
the suspended proceeds. We expressly reserve the right to challenge the amount of suspended
Maralex Resources, Inc.
Demand for Payment of Suspended Funds
Page 2
proceeds tendered by Maralex subsequent to ou receipt nd review of the above-desc ibed
info mation and calculations.
COP e pressly excepts and reserves all rights and remedies available to protect and recover
amounts due and owing from aralex concerning this matter, including but not limited to those
under CRS 34-60-1 18.5.
Sincerely,
CONGCOPHILLUPS COM ANY
Enclo ure
Li'
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Extra Ssivlcss & Fees (ch k bo , add too os appropilato)
Cl R-ilurn Receipt (jnudcopy) $
l Rolum Receipt (electronic) $
Certified Moll RMlrtcted Delivery $
Adult Signatura equired $
CD
l dult Slynnluro estricted Delive y $
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t-n Sent To
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City, Slate
Attn: Jennifer A. Ritcher
Maralex Resources, Inc.
P.O. Box 338
Ignacio, Colorado 81137
PS Form 3800, April 2015 PSN 7530-02 000 3047 SeeRo ersefor Instructi
Complete items 1, 2, and 3.
Print your name and address on the reverse
so that we can return the card to you.
Attach this ca d to the back of the mailpiece
or on the front if space permits.
1. Article Addressed to:
Attn: Jennifer A. Ritcher
Marale Resou ces, Inc.
P.O. Box 338
Ignacio, Colorado 81137
3. Service Type
¦JS'IQ IhOl ClOOh SCI?]. 1340 BO
2. Article Number (Transfer from service label)
7015 nt,4D D3 L]547 fc1?,37
PS Form 3811, April 2015 PS 7530-02-000-9053
O Priority Mail Express®
Adult Signature
Registered Mall,M
A ult Signature Restricted Delivery
Registered Mall Restricted
O Certiliod Mail®
Deli ery
Certified Mail Restricte Delivery
8 Return Receipt for
Merchandise
Collect on Deliver
Signature Confirmation™
Collect on Deli ery Restricted Delivery
Signature Confirmation
Insured Mail
Restricted Delivery
Insur Mail Restricte Delivery
(over $500)
Domestic Return Receipt
FOR OFFICIAL USE ONLY
FORM
38
State of Colorado
Oil and Gas Conservation Commission
1120 Lincoln street, Suite 801, Denver, Colorado 80203(303)894-2100 Fax: (303)894-2109
Rev
1/10
j
PAYMENT OF PROCEEDS HEARING REQUEST
This form may be submitted only by a payee legally entitled to payment from proceeds derived from the
sale of oil, gas, or associated products from a well in Colorado. The payee is to complete this form (one
form per well), attach required documentation and mail to: COGCC, 1120 Lincoln Street, Suite 801,
Den er, Colorado 80203 or fax to: (303) 894-2109. COGCC will investigate the report and determine
what action, if any, should betaken.
PAYEE INFORMATION
NAME OF PAYEE: ConocoPhillips Company
PHONE NO: 832-486-2377
ADDRESS: 600 North Dairy Ashford
FAX: 832-486-2027
CITY: Houston
STATE: TX
ZIP: 77079
E-MAIL: [email protected]
PAYEE NUMBER: 19160
MINERAL INFORMATION
WELL NAME: Southern Ute 33-9 #30-3
QTR/QTR SEC:
TOWNSHIP:
COUNTY: La Plata
RANGE:
SWNE Section 30T33N-R9W
API NUMBER: 05-067-08712
NON-COMPLIANCE ISSUES NOT RESOLVED
(PLEASE CHECK ALL THAT APPLY)
Required checkstub detail not provided:
Late payment
x
Non payment
No interest paid on late payment x
No response to Form 37 inquiry _
All pertinent documentation must be attached. This includes: completed
copy of operator contact Form 37, proof of mailing, response (if received
fro operator), redacted checkstub detail and any other documentation
necessary.
James H. Vaiana
Managing Counsel - Lower 48 E&P
3WL3072
ConocoPhillips
600 North Dairy Ashford
Houston, Texas 77079-1175
832-486-2377
Email: [email protected]
November 30, 2015
By Email: [email protected]
Jill Dorancy
Hearings Officer
Colorado Oil & Gas Conservation Commission
1120 Lincoln Street, S ite 801
Denver, Colorado 80203
Re: Form 38 - Payment of Proceeds Plearing Request
Maralex Resources, Inc.
Southern Ute 33-9 #30-3
API No. 05-067-08712
SWNE Section 30 T33N R9W
La Plata County, Colorado
Dear Ms. Dorancy:
ConocoPhillips Company ( COP ) hereby respectfully submits its Form 38 - Payment of
Proceeds Hearing Request to the Colorado Oil & Gas Conservation Commission (“COGCC”)
concerning failure by Maralex Resources, Inc. (“Maralex”) to pay proceeds attributable to an
overriding royalty interest owned by COP, which burdens production from the Southern Ute 339 #30-3 well located in La Plata County, Colorado. COP includes the following in support of its
Form 38 hearing request:
1. Assignment and Bill of Sale from SG Interests V, Ltd. to Conoco Inc. (predecessor in
interest to COP), dated effective July 1, 2001, and recorded October 3, 2001 at RCPT #
814703 of the records of La Plata County, Colorado, covering COP s overriding royalty
interest in the captioned well and interests in various other properties. See Exhibit “A”
attached hereto.
2. Maralex s letter to COP dated July 6, 2015, in which Maralex acknowledges COP s
ownership of the overriding royalty interest and states in part that it “does not dispute the
fact that ConocoPhillips is due payment of the suspended funds”. The letter also states
that approximately $330,000 is owed to COP.1 See Exhibit “B” attached hereto.
1 COP is separately filing a Form 38 with COGCC conce ning Maralex s failure to pay proceeds attributable to an
overriding royalty interest owned by COP that burdens production from the Southern Ute 33-9 #30-2 well. The
approxi ate $330,000 owed by aralex to COP includes proceeds attributable to the captioned well and the
Southern Ute 33-9 #30-2 well.
COGCC
Form 38 - Payment of Proceeds Hearing Request
Page 2
3. Division Order provided by Maralex for the captioned well executed by COP.2 See
Exhibit C attached hereto.
4. OOP s letter to Maralex dated September 30, 2015 demanding payment for proceeds
attributable to OOP’s overriding royalty interest in the captioned well.3 This letter was
sent by certified mail to an address for Maralex in Fruita, Colorado but was returned
undelivered. COP subsequently sent by certified mail a follow up letter dated October
19, 2015 to an address for Maralex in Ignacio, Colorado. That letter, which reaffirmed
COP’s demand for payment and included a copy of the September 30th letter, was
received by Maralex on October 22, 2015. See Exhibit D attached hereto.
5. As of the date of this letter, Maralex has neither provided any written reply to COP’s
demand letters as referenced in paragraph 4 above nor tendered payment to COP.
Therefore, COP requests that this matter be set for hearing before the COGCC at the earliest
available date. COP also expressly reserves all rights, defenses and remedies available to protect
and recover amounts due and owing from Maralex concerning this matter, including but not
limited to those under CRS 34-60-118.5.
Please contact me if you need further information regarding this request. I look forward to
hearing from you.
Respectfully submitted,
CONOCOPHILLIPS COMPANY
H. Vaiana
Attachments:
Exhibit A - Assignment and Bill of Sale
Exhibit B - Division Order
Exhibit C - Maralex letter
Exhibit D - COP letters
cc: By Email: [email protected]
Jennifer A. Ritcher
Maralex Resources, Inc.
2 COP also executed a Division Order provided by Maralex for the Southern Ute 33-9 #30-2 well.
3 COP s letter also demands pay ent for the overriding royalty owned by COP in the Southern Ute 33-9 #30-2 well.
EXHIBIT
B
ARALEX
Resources, Inc.
July 6, 2015
864 20 Road. Unit A
Fruita, Colorado 81521
(970) 858-8550
FAX (970) 858-8155
P.O. Box 338
Ignacio, Colorado 81137
(970) 563- 000
FAX (970)563-4116
ConocoPhillips Company
3401 E. 30th Street
Farmington, New Mexico 87402
Attn: Ben J. Mitchell
RE: Southern Ute 33-9-30 #2
Southern Ute 33-9-30#3
La Plata County, Colorado
Dear Ben,
Reference is made to your conversations with Maralex concerning the suspended monies pertaining to
the override in the captioned wells.
ConocoPhillips acquired an interest in the captioned wells, along with other properties from SG Interests
effecti e July 1, 2001. Maralex was never notified of this transfer of interest by ConocoPhillips but found
a copy of the Assignment on the La Plata County online records in February of 2015. Maralex then
notified ConocoPhillips.
Maralex takes its production in-kind from these wells, which are operated by BP, and pays the overrides
on the tracts in which it has a working interest. The interest, which Maralex believed to be owned by SG,
was placed into suspense in November 2001 in order to net it against expenses for other SG properties in
which Maralex operates.
Maralex does not dispute the fact that ConocoPhillips is due payment of the suspended funds. However,
payment of the suspended funds is complicated due to the fact that Maralex wasn't timely notified of the
change in ownership. Rather than the funds sitting in a suspense account, they were netted against an
outstanding A/P balance owed to aralex by SG. There is currently approximately $330,000.00, in
suspense on the books. Maralex proposes a series of monthly payments to ConocoPhillips, o er a five
year period, with each monthly payment in an approximate amount of $5,500.00.
Any funds paid to SG prior to November 1, 2001 would be ConocoPhillips responsibility to collect. In
addition, we have sent a Division Order to ConocoPhillips for execution. It is my understanding that this
has been sent to the Bartlesville office for execution. To date, Maralex has not received this back from
ConocoPhillips. Once Maralex recei es it, ConocoPhillips will be placed in pay status going forward.
We thank you for your patience while we have sorted through the history of this. If this proposal is
acceptable to ConocoPhillips, please advise an we will prepare a formal document with detailed back-up
for execution by both parties. Should you have any questions, you may reach me at (817) 337-4512 or
[email protected]
Sincerely,
'Ll
/Jennifer AL&itcher,
for Maralex Resourcesjnc.
DIVISION ORDER
TO: Maralex Resources. Inc.
P.O. Box 338
DATE: Jul 1.2001
Ignacio, CO 81137
Phone: (970) 563 000
Fax: ( 70) 563-4116
Property Name: Southe Ute 33-9; 30-2 & 30-3 wells
Operator BP America Production Company
Propert
Description: Township 33 North, Range 9 West, N.M.P.M.
Section 30: N/2
La Plata Count , Colorado
Formation: Fruitland Coal
Owner Name: Conoc Phillips Compan
Address: do Burlington Resources Oil & Gas Compan LP
P.O. Box 222 5 Network Place
Chica o, IL 0 73-1222
Type of Interes OR
Decimal Interest: .03121879
Maralex pays - 0.0084 775 fBP payo remainder)
Our grossed u number is 0.04138753
The und rsigned c rtifi s the ownership of t eir decimal i terest n production or procee s as described bove pa able by Maralex
Resources. Inc.
Maralex Resources, Inc. shall be notifie , in writing, of any ch nge in o nership, decim l interest, or pay ent a ress, if ifferent
from above. o change ofownershi nor transfer of interest shall be bin ing until an execute Transfer Or er or revised Division
Or er and the rec r e instrument evi encing the change of o nership or transfer, or a certified copy thereof; is furnishe to Marale .
All s ch changes shall be effective t e first da of the month ollowing receipt of such notice. Marale shall not be held lia le for an
payments made in error as a result of not being furnishe the change of o ners ip or transfer of interest infor ation required in this
paragraph.
M rale Resou ces, Inc. is authorize to withhold pa ment pending resolution of any title dis ute or a verse claim sser ed re ardin
the interest in pro uctio cl imed herein by the undersigned. The unde signed agrees to indemnify nd reimburse Ma alex Reso rces,
Inc. any amount attribut ble to an interest to hich t e undersigned is not entitle .
If aralex ithholds or sus en s payment to Owner pursuant to an provision of this Division Order, O ner agrees to indemnify and
hol harmless Maralex from liability f r an t es, costs or expenses suffere or imposed pon Maralex together with interest a
penalties which mi ht be imposed or assesse a inst, or p id b Maralex on account of the sums so withhel from payment to a third
art . Owner agrees th t Maralex may deduct all s ch taxes, costs, ex enses, inte est n enalties aid by Maral from n suras
due to O ner.
M r le Resources, Inc. may accr e proceeds until the tot l amount e uals t enty-five dollars (525.00) or pay annuall , whic ever
occurs first, or s re uire by applicable state statute.
This Division Order does not amen any lease or operating agreement between the undersi ned an the lessee or operator or any other
contracts for the rchase of oil or gas.
The undersigned agrees that if Maralex esou ces, Inc. is require to dehydrate, treat, compress, odorize, ather or transport any oil
gas and t e components thereo , s may be re uired by the purch ser and before delivery to the p rchaser, a alex Resources. Inc.
shall be entitled to de uct undersigne s pro ortionate part of said costs.
Marale Resources, Inc. is selling its gas ( nd any as hich is not separatel taken or dispose of b owner) to a marketing entit
under terms an con itions which it believes to be the market v lue of the as at th wellhe d at the time of sale. As of the execution
date of this instrument, the as is bei g committed to co tracts not exceeding one ear in length at a rice currentl related to an in e
price use for gas in this geo raphic area, at the wellhea . less the costs of transporti g the eas from the l asehold premises to such
pricing point
In addition to the terms and conditions of this Division Order, the undersigned and Maralex Resources, Inc. may have certain statutor
rights under the laws of the state i which the property is located.
This Division Order shall become valid an binding on each Owner who signs it, whether or not all O ners si n a Division Order.
The provisions hereof sh ll be binding upon each executing Owner s heirs, successors, e ecutors, administrators, legal rep esentatives
nd assigns. This Division Order shall also be binding as to Marale ’s successors and assigns.
E ecuted this day of , 2015.
Owne s) signature Owner Ta ID Number: Owner Da time Telephone #:
CONOCOPHILLIPS COMP NY
OTE: Fe eral L w re uires you to fur ish your Social Security or Taxpayer identification Number. Failure to comply ill result
in 28% tax ithholdin an will not be refun able y M r lex Resources. Inc.
T pe f Interest Codes: Rl-Ro ait Interest, OROverriding Royalt Interest, Wl=Working Interest BPO=Before Payout.
APO-Afrer a out
Dl°8"?3l ~0OO(
eb ,? o„rt3\~Ooo
THIS SIGNATURE PAGE IS AN ATTACHME T TO YOUR DIVISION ORDER
NO.
'
0 aaakM j QJu JOfcrtzi
Witness
MAIL REMITTANCE TO:
CONOCOPHC LIPS COMPA Y
P.O. BOX 22295 NETWORK PLACE
CHICAGO, E 60673-1222
TAX ED #73-0400345
M IL CORRESPONDENCE O LY:
CON0 COPKO LIPS COMP NY
REAL PROPERTY AD INISTRATION
P.O. BOX 7500
BA TLESVILLE, OK 74005
CONOCOPHTELTPS D/O #:
DATE EVIEWED A D R TU ED:
CONOCOPHELLDPS COMPANY, BY
RICHARD L. HARTMAN
DIRECTOR-DIVISION O DER A
O NER RELATIO S
EAL PROPERTY ADMINIST ATION
DIVISION ORDER
TO:
Mar lex Resources, Inc.
P.O. Box 338
DATE: July 1,2001
Ignacio, CO 81137
Phone: (970)563-4000
Fa : (970)563-411
Pro erty Name:
Southern Ute 3 -9; 30-2 & 30-3 wells
Operaton
BP Americ Pro uction Comp ny
Property
Descri tion:
Townshi 33 North, Range 9 West, N.M.P.M.
Section 3 : N/2
La Plata Count . Colorado
Formation:
Fruitia
O ner Name:
ConocoPhillips Compan
Address
c/o Burlington Resources Oil & Gas Compan LP
P.O, Box 22295 etwork Place
Chica o, fL 0673-1222
Type of Interest:
OR
Decimal Interest:
Coal
.03121879
Maralex ays - 0.C
Our rossed up number is 0.04138753
RewurceT ownershiP of Uleir decima3 interest in production or proceeds as described above pa able b Maralex
Marale Resources, Inc. shall be notified, in writing, of any change in ownership, ecimal interest, or payment a dress, if different
from bove No chang of ownership nor transfer of interest shall be binding u til an execute Transfer Ord r or revise Division
Alw iS6 recC° dMdu S neri1 chaDS« of ownership or transfer, or a certifie copy thereof is furnished to Maralex.
/dlsuch chan es shall be effective the first da of the month following receipt of such notice. Maralex shall not be held liable for any
ph m CITOr 3 FCSU 1 0fn E bem& rurTlished the ch3nSe of owner hip or transfer of intere t information required in this
o 10 SaymeQl peDding rcsolution ot!my d pute or advers claim asserte regar ing
£! m 1,1 an b lhe un ersigned. he unde signed agrees to in em ify and reimburse Maralex Resources,
Inc. any mount attnbutable to n interest to which the undersigne is not entitled.
0Pt inS a
- ¦* or op,™, „r my
- M>ral
Execute this
, da
of
R ' - -r
«-««-
,2015.
O ner(s) signature
Owner Tax
Number: O ner Daytime Telephone U:
CONOCOPHTT.I.r ; COMPANY
RI=R yaJty ,ntCrCSt Ro \V]=Worlcmg Interest. BPO=Before Payout,
_ A70b%\
£)k%5 \-00<9(
THIS SIGNATURE PAGE IS AN ATTACHMENT TO YOUR DIVISION OR ER
NO.
(Lku3I
Wit ess
CONOCOPBDDLLIPS COMPAm7, BY
RICH RD L. HARTMAN
DIRECTO -DIVISION ORDE AND
OW ER RELATIONS
REAL PROPERTY ADMINISTRATION
MAIL REMITTANCE TO:
CONOCOPHILLIPS COMPANY
P.0. BOX 22295 NETWORK PLACE
CHICAGO, IL 60673-1222
TAX ID #73-0400345
M IL CORRESPONDENCE ONLY:
CONOCOPHILLIPS CO PA Y
REAL PROPE TY AD INISTRATION
P.O. BOX 7500
BA TLESVILLE, OK 74005
rONOCOPTTTLLIPS D/O #: I) (a 9i
D TE REVIEWED A D RETURNED:
BY:
James H. Vaiana
Managing Counsel - Lower 48 E&P
3WL3072
ConocoPhillips
600 North Daily Ashfo d
Houston, Texas 77079-1175
832-486-2377
Email: [email protected]
October 19, 2015
By Certified Mail - Retur Receipt Req ested
Maralex Resources, Inc.
P.O. Box 338
Ignacio, Colorado 81137
Attention: Jennifer A. Rilcher
Re: Demand for Payment of Suspended Funds
Southe n Ute 33-9-30 #2
Southern Ute 33-9-30 #3
La Plata County, Colorado
Dear Ms. Rilcher:
The enclosed letter dated September 30, 2015 was recently sent by U.S. certified mail by
ConocoPhillips Company to your attention at Maralex Resources, Inc. with the following
add ess:
aralex Resources, Inc.
864 20 Road, Unit A
Fruita, Colorado 81521
This letter was retu ed to our office with the mailing envelope ch nged to reflect the Ignacio,
Colorado address noted above (copy also enclosed). We reaffirm the demand for payment and
reserve the rights and re edies a st ted in our September 30lh letter, an await a reply.
Sincerely,
NOCOPH1LL1PS COMPANY
es H. Vaiana
Enclosu e
James H. Vaiana
Managing Counsel - Lower 48 E&P
3WL3072
ConocoPhillips
600 North Dairy Ashford
Houston, Texas 77079-1175
832-486-2377
Email: James.H,[email protected]
September 30, 2015
By Certifie Mail - Return Receipt Req ested
Maralex Reso rces, Inc.
864 20 Road, Unit A
Fruit , Colorado 81521
Attention: Jennifer A. Ritcher
Re: Demand for Payment of Suspended Funds
Southern Ute 33-9-30 #2
Southern Ute 33-9-30 #3
La Plata County, Colorado
Dear Ms. Ritcher:
Your letter dated July 6, 2015 addressed to Ben J. Mitchell, who works in the Land Department
at our field office in Farmington, New Mexico was recently sent to me for review. A copy of
your letter is enclosed.
In response, ConocoPhillips Company ( COP ) hereby demands full payment within twenty (20)
days of receipt of this lette of all p oceeds held in suspense by Maralex Resources, Inc.
( Maralex”) that are attributable to the interests of COP in the captioned wells, as described in
your letter dated July 6th. The offer from Maralex to pay such proceeds held in suspense to COP
over a five-year period as described in your letter is rejected. Maralex should tender payment for
the full amount of the suspended proceeds as follows:
ConocoPhillips Company
600 North Dairy Ashford
Houston, Texas 77079-1175
Attention: ames H. Vaiana
COP also demands information and calculations as required under CRS 34-60-118.5 with respect
to payment of the above-described suspended proceeds. Such information and calculations
should be provided to COP either concurrently or as soon as possible afte Maralex5s tender of
the suspended proceeds. We expressly reserve the right to challenge the amount of suspended
Maralex Resources, Inc.
Demand for Payment of Suspended Funds
Page 2
proceeds tendered by Maralex subsequent to our receipt and review of the above-described
information and calculations.
COP expressly excepts and rese ves all rights and remedies available to protect and recover
amoun s due and owing fro Maralex concerning this matter, including but not limited to those
under CRS 34-60-118.5.
Sincerely,
CONOCOPH1LL1PS COMPANY
mes H. Vai na
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Attn: Jennifer A. Ritcher
Maralex Reso rces, Inc.
P.O. Box 338
Ignacio, Colorado 81137
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Marale Resources, Inc.
P.O. Box 338
Ignacio, Colorado 81137
'm Ol CIDOh 5071 1340 B l
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