BEFORE THE DIVISION OF GAS AND OIL BOARD- DOCKET NO: VGOB 24-0416-4281, Keyrock Energy, LLC

BEFORE THE VIRGINIA

GAS AND OIL BOARD

APPLICANT: Keyrock Energy, LLC

DIVISION OF GAS AND OIL

DOCKET NO:

VGOB 24-0416-4281

RELIEF SOUGHT: Creation of sealed gob unit and Pooling

LOCATION: See "Exhibit A"

UNIT NUMBER: Keyrock Slope Drain Vent Pipe

IN DICKENSON COUNTY, VIRGINIA

HEARING DATE: May 21, 2024

PLACE: Virginia Dept.

of Energy

3405 Mountain Empire Rd.

Big Stone Gap, VA 24219

TIME: 10:00 a.m.

RESPONDENTS: UNKNOWN

NOTICE OF HEARING

COMMONWEALTH OF VIRGINIA: To all persons owning or claiming an interest in oil and gas, coalbed methane gas, coal, or other minerals and to all other persons who have or claim to have an interest in the coalbed methane underlying and within the Keyrock Energy, LLC Unit Slope Drain Vent Pipe and the lands described on “Exhibit A" to the Application, which is attached to this Notice, in the Kenady District of Dickenson County, Virginia (hereinafter "Subject Lands") and adjacent lands, and in particular to the following persons, their known and unknown heirs, executors, administrators, devisees, assigns and successors, both immediate and remote:

NOTICE IS HEREBY GIVEN that Applicant is requesting that the Virginia Gas and Oil Board (hereinafter "Board") issue an order creating a sealed gob unit and pooling all the rights, interests, and estates of the above-named persons pursuant to Virginia Code Ann. § 45.2-1600, et seq., in regard to the development, and production of coalbed methane gas from said Unit Keyrock Slope Drain Vent Pipe containing approximately 300.66 +/- acres, for the mined-out Lower Banner Coal Seam (hereinafter "Subject Formation"). Applicant requests that the Board issue an order providing as follows:

a) Creating a sealed gob unit consisting of 300.66 +/- acres for the development, and production of coalbed methane gas from the sealed gob and the Subject Formation, which unit is further described and depicted in "Exhibit A" annexed hereto and which unit is described as follows: BEGINNING at a point having Virginia State Plane NAD 83 coordinates of N: 3,586,646.69 AND E: 10,311,242.88. beginning at a point; thence S 64°10'30" W 127.4 feet to a point; thence S 21°56'00" E 77.1 feet to a point; thence S 17°30'10" W 214.5 feet to a point; thence S 67°24'50" W 244.0 feet to a point; thence N 76°00'30" W 419.6 feet to a point; thence N 26°15'40" W 513.5 feet to a point; thence N 27°38'10" W 1305.5 feet to a point; thence N 64°04'10" E 373.2 feet to a point; thence S 25°34'00" E 303.6 feet to a point; thence S 64°23'40" E 231.5 feet to a point; thence S 25°49'50" E 128.4 feet to a point; thence N 63°35'20" E 576.1 feet to a point; thence S 28°43'40" E 87.5 feet to a point; thence N 78°03'50" E 201.2 feet to a point; thence N 09°09'30" W 196.2 feet to a point; thence N 62°28'40" E 3617.0 feet to a point; thence N 09°31'20" W 111.2 feet to a point; thence N 61°15'20" E 509.2 feet to a point; thence S 39°40'20" E 123.5 feet to a point; thence N 58°10'40" E 98.8 feet to a point; thence N 28°20'30" W 318.6 feet to a point; thence N 62°29'00" E 2886.4 feet to a point; thence N 83°20'00" E 93.4 feet to a point; thence N 62°02'40" E 434.3 feet to a point; thence S 26°59'40" E 318.5 feet to a point; thence S 23°06'10" W 104.0 feet to a point; thence S 45°15'50" E 150.7 feet to a point; thence N 56°38'10" E 112.6 feet to a point; thence N 02°59'40" E 1182.7 feet to a point; thence N 89°51'20" E 455.7 feet to a point; thence N 04°34'40" E 186.3 feet to a point; thence N 58°35'20" E 144.8 feet to a point; thence S 86°33'30" E 268.1 feet to a point; thence S 02°38'20" W 58.8 feet to a point; thence S 86°37'00" E 83.6 feet to a point; thence S 03°32'30" W 726.3 feet to a point; thence S 01°18'40" W 1159.9 feet to a point; thence S 82°32'10" E 63.6 feet to a point; thence S 03°13'00" E 206.7 feet to a point; thence S 02°21'30" W 787.5 feet to a point; thence S 83°40'00" W 30.2 feet to a point; thence S 02°32'10" E 792.8 feet to a point; thence S 80°07'00" E 22.4 feet to a point; thence S 05°25'10" E 239.1 feet to a point; thence S 88°07'00" E 66.0 feet to a point; thence S 03°44'30" E 807.1 feet to a point; thence N 88°20'50" E 38.4 feet to a point; thence S 04°52'50" E 117.6 feet to a point; thence S 89°39'40" W 43.6 feet to a point; thence S 05°22'00" E 66.7 feet to a point; thence N 84°51'20" E 57.8 feet to a point; thence S 02°17'50" E 196.8 feet to a point; thence S 01°54'30" W 273.3 feet to a point; thence S 00°38'40" W 355.8 feet to a point; thence S 84°31'40" W 86.0 feet to a point; thence S 02°45'40" E 177.9 feet to a point; thence S 83°09'10" W 59.4 feet to a point; thence S 04°18'00" E 351.1 feet to a point; thence S 79°58'40" W 135.2 feet to a point; thence S 04°06'50" E 84.5 feet to a point; thence S 84°34'40" W 276.3 feet to a point; thence N 04°55'30" W 837.6 feet to a point; thence N 78°37'30" E 66.3 feet to a point; thence N 02°13'20" W 133.4 feet to a point; thence S 76°11'20" W 70.7 feet to a point; thence N 00°48'40" W 223.7 feet to a point; thence N 76°11'20" E 70.7 feet to a point; thence N 10°05'50" W 430.8 feet to a point; thence S 88°05'10" W 44.5 feet to a point; thence N 01°51'30" W 373.7 feet to a point; thence N 82°20'00" E 64.5 feet to a point; thence N 03°35'00" W 423.8 feet to a point; thence S 82°27'50" W 59.2 feet to a point; thence N 04°20'30" W 592.6 feet to a point; thence N 03°28'40" W 361.2 feet to a point; thence N 01°47'00" W 184.1 feet to a point; thence N 28°43'10" W 897.0 feet to a point; thence S 62°44'30" W 3160.4 feet to a point; thence N 29°04'30" W 130.0 feet to a point; thence S 62°26'10" W 4367.6 feet to a point; thence N 76°15'30" W 176.6 feet to a point; thence S 51°20'30" W 196.1 feet to a point; thence S 28°54'40" E 656.0 feet to a point; thence S 65°09'20" W 87.0 feet to a point; thence S 27°24'20" E 2673.3 feet to a point; thence N 28°00'40" W 2662.4 feet to a point; which is the point of BEGINNING, containing 300.66 acres by the unit boundary.

b) The pooling of interests of Respondents named in Exhibit B herein, and their known and unknown heirs, executors, administrators, devisees, trustees, assigns, and successors, both immediate and remote, for the development, and production of coalbed methane gas from the subject unit for the Subject Formation underlying and comprised of the Subject Lands;

c) Establishing the percentages for division of interest for production, revenue, and costs for all Respondents in accordance with those percentages as are set forth in “Exhibit B".

d) With respect to coalbed methane gas in the subject unit, the applicant requests that the Board establish a procedure whereby each person named in Exhibit B-3 hereto, shall have the right to elect 1) to assign or lease his interest in the subject unit to the designated operator, 2) to enter into a voluntary agreement with the designated operator to share in the operation (including the sharing in all reasonable costs of development of the unit) at a rate of payment mutually agreed to by the person making the election hereunder and the designated operator herein or 3) to share in the operation of the well(s) and costs of production as a nonparticipating operator on a carried basis after the proceeds allocable to such person's share equal the following:

In case of a leased tract, 300 percent of the share of such costs allocable to such person's interest; or

In the case of an unleased tract, 200 percent, of the share of such costs allocable to such person's interest, all as determined by the Board.

e) Providing that any Respondent in “Exhibit B-3” herein who does not make a timely written election under the terms of the Order to be entered herein shall be deemed to have leased or assigned his coalbed methane gas interests in the subject unit to the Applicant herein at a rate to be established by the Board.

f) Designating Keyrock Energy, LLC, as Unit Operator; providing that the operator shall have the right to develop, produce, market and sell coalbed methane gas from the subject unit; and shall further have the right to generate and market carbon credits; granting the operator the right to market and sell the coalbed methane gas from the subject unit which is attributable to the conflicting claims and interests pooled herein; providing that the operator shall have an operator's lien on the coalbed methane gas estate and rights owned or claimed by the persons named herein in the subject unit; and granting the operator the right to drill at any legal or specially permitted location on subject unit; and granting the operator the right to drill wells at any legal or specially permitted location on the subject unit.

g) Making any necessary provisions for the escrow of funds pursuant to Va. Code Ann. §§ 45.1-361.21 and 45.1-361.22.

h) Providing that the order to be entered herein shall expire two (2) years from the date of its issuance if operations have not commenced by said date; but further providing that if operations have commenced during said two-year period, then said order shall remain in effect for so long as operations continue on the subject unit. However, in the event an appeal is taken from the order issued, the time between the mailing of the notice of appeal and the final order of the Circuit Court shall be excluded in calculating the two-year period referred to herein.

i) With respect to separately owned tracts and separately owned interests in the unit, joining all the interests within the unit for the production of coalbed methane gas so that each owner in the unit will share in all production and costs regarding the unit in the proportion that the acreage owned by each owner bears to the entire acreage in the unit.

j) Providing that operations under and in accordance with this order shall be regarded and considered as development, operation and production upon all lands included within the subject unit. Production from any well(s) drilled on, operated, or produced from any part of the unit, no matter where located, shall for all purposes be regarded as production from each separately-owned tract within the subject unit. The portion of production produced from and attributed to the unit and any separately owned tract therein, shall be deemed for all purposes to have been actually produced from such unit and tract, and development, exploration, or production operations with respect to any portion of the unit shall be deemed for all purposes to be the conduct of such operations for the production of gas from each separately owned tract in said unit.

k) The Respondents listed in “Exhibit D" are lessors of the Applicant. They are joined as Respondents hereto only with regard to the creation of the sealed gob unit described in “Exhibit A". Their joinder as Respondents is necessary because the leases in question do not contemplate a unit of the size requested herein. This Application does not seek to pool leased interests in the unit on a compulsory basis, said interests are to be voluntarily pooled in the unit to be created herein. Therefore, any order entered herein need not afford leased parties, the Respondents identified at “Exhibit D", election options.

l) Amending all prior Board Pooling Orders entered with regard to those units located within the subject unit to provide that the terms of the Order to be entered herein shall govern and control the allocation of production, revenue and costs for all purposes on and after midnight of the day on which the construction of the seals to isolate the mine works shown on Exhibit L and within the Subject Drilling Unit is completed.

m) Granting such other relief as is merited by the evidence and is just and equitable, whether or not such relief has been specifically requested herein.

NOTICE IS FURTHER GIVEN that this cause has been set for hearing and the taking of evidence before the Board at 10:00 AM, on April 16, 2024, at the offices of the Virginia Department of Energy at 3405 Mountain Empire Road, Big Stone Gap, VA 24219, and that notice will be published as required by law and the rules of the Board.

NOTICE IS FURTHER GIVEN that you may attend this hearing, with or without an attorney, and offer evidence or state any comments you have. For further information or a copy of the application and exhibits, contact the Virginia Gas and Oil Board, State Oil and Gas Inspector, Department of Mines, Minerals, and Energy, Division of Gas and Oil, 3405 Mountain Empire Road, Big Stone Gap, Virginia 24219, or the Applicant at the address shown below.

Dated: March 11, 2024

Keyrock Energy, LLC

Applicant

By:

Morgan Pate, Geologist

Keyrock Energy, LLC

207 East Main St.,

Suite 2-D

PO Box 2223

Johnson City, TN 37605

5-1-1t