Court Opinion

ID: 4073067
Source: CourtListenerOpinion
Date Created: 2016-09-30 03:26:03.716483+00
Date Added: 2024-06-11T12:03:49.097812
License: Public Domain

ACCEPTED
                                                                                                     01-15-00867-CV
                                                                                          FIRST COURT OF APPEALS
                                                                                                  HOUSTON, TEXAS
                                                                                               11/12/2015 8:00:39 PM
                                                                                               CHRISTOPHER PRINE
                                                                                                              CLERK

                                     NO. 01-15-00867-CV

                                                                                 FILED IN
                                FIRST COURT OF APPEALS                    1st COURT OF APPEALS
                                                                              HOUSTON, TEXAS
                                      HOUSTON, TEXAS                      11/12/2015 8:00:39 PM
                                                                          CHRISTOPHER A. PRINE
                                                                                   Clerk

   PENN VIRGINIA OIL & GAS GP, L.L.C. & PENN VIRGINIA OIL AND GAS, L.P.,
                                Appellants.

                                               v.
 ALFREDO DE LA GARZA, INDIVIDUALLY AND AS NEXT FRIEND FOR XXXXXX
         XX XX XXXXX AND XXXXXXXX XX XX XXXXX, MINORS

                                                &

  JOHN PAUL ADAME, INDIVIDUALLY AND AS NEXT FRIEND OF XXXXXXXXX
  XXXXXX XXXXX, XXXX XXXX XXXXX XXX, AND XXXX XXXXXXXX XXXXX,
                             MINORS,
                             Appellees

                      On Appeal from the 215th Judicial District Court,
                                   Harris County, Texas
                                  Cause No. 2014-42519

         APPELLEES' MOTION TO DISMISS FOR LACK OF JURISDICTION

TO THE HONORABLE JUSTICES OF THE FIRST COURT OF APPEALS:

       NOW COMES Appellee Alfredo De La Garza, individually and as next friend for

XXXXXX XX XX XXXXX AND XXXXXXXX XX XX XXXXX, minors, and files this

Appellees' Motion to Dismiss Appellants, Penn Virginia Oil & Gas GP, LLC and Penn Virginia

Oil & Gas L.P. 's appeal, and in support thereof would respectfully show the Court the following:
                             Introduction & Summary of Motion

1. Appellants are Penn Virginia Oil & Gas GP, LLC and Penn Virginia Oil & Gas L.P. Appellees

   are Alfredo De La Garza, individually and as next friend for XXXXXX XX XX XXXXX AND

   XXXXXXXX XX XX XXXXX, minors.

2. Appellants filed their Motion to Compel Arbitration and to Abate on June 18, 2015. A copy of

   that motion is attached as Exhibit "A". Appellees filed their response to appellants' Motion

   to Compel Arbitration and to Abate on July 30, 2015. A copy of that response is attached as

   Exhibit "B". On August 26, 2015, appellees filed their First Amended Response to appellants'

   Motion to Compel Arbitration and to Abate. A copy of this amended response is attached as

   "Exhibit "C". On September 10, 2015, appellants filed their reply to appellees' Response to

   Motion to Compel Arbitration and to Abate. A copy of appellants' reply is attached as Exhibit

   "D". On September 11, 2015, appellees filed their first supplement to their First Amended

   Response to appellants' Motion to Compel Arbitration and to Abate.            A copy of this

   supplement is attached as Exhibit "E".       The hearing on appellants' Motion to Compel

   Arbitration and to Abate was initially set on July 31,2015, but was reset at appellees' request

   for September 11,2015 with agreement of counsel for appellants. On September 11,2015, the

   trial court heard appellants' Motion to Compel Arbitration and to Abate. Appellants' Motion

   to Compel Arbitration and to Abate was denied by order dated September 11, 2015. See

   Exhibit "F".

3. Appellants filed a Motion for Reconsideration of Order Denying Motion to Compel Arbitration

   on October 1, 2015. A copy of this motion is attached as Exhibit "G". Appellees opposed

   this motion and objected to the. affidavit of Ernest Nelson, attached to appellants' Motion for

   Reconsideration of Order Denying Motion to Compel Arbitration. A copy of appellees'
   response is attached as Exhibit "H". On October 9, 2015, appellants filed their reply to

   appellees' Response to Motion for Reconsideration of Order Denying Motion to Compel

   Arbitration. A copy of appellants' reply is attached as Exhibit "1". The Hon. Elaine Palmer,

   Judge of the 215th District Court denied appellants' Motion for Reconsideration of Order

   Denying Motion to Compel Arbitration on October 12, 2015. A copy of the order is attached

   as Exhibit "J".

4. Appellants filed their Notice of Appeal on October 13, 2015. A copy of this notice is attached

   hereto as Exhibit "K". In appellants' Notice of Appeal, they seek to appeal the court's order

   denying appellants' Motion to Compel Arbitration and to Abate signed on September 11, 2015.

   Appellants also seek to appeal the order denying defendant's motion for reconsideration of the

   order denying the motion to compel arbitration signed by Judge Palmer on October 12, 2015.

5. On October 14, 2015, appellants filed their Motion for Extension of Time to File Notice of

   Appeal.

6. The notice of appeal was untimely. The facts averred to by appellants' counsel fail to

   reasonably explain the need for an extension.

7. The order denying appellants' Motion for Reconsideration of Order Denying Motion to

   Compel Arbitration is not an appealable order.

                                  Argument and Authorities

8. This is an accelerated appeal pursuant to Tex. R. App. P. 28.1. Perfecting the appeal is

   completed by timely filing notice of appeal within 20 days pursuant to Tex. R. App. P. 28.1(b)

   and 26.1(b). Appellants' notice of appeal was filed 33 days after Judge Palmer's September

   11, 2015 order was signed and is untimely. The notice should have been filed on October 1,

   2015.
9. The facts alleged in appellants' motion and supported by appellants' affidavit attached to their

   motion for extension of time do not reasonably explain the need for extension as required by

   Tex. R. App. P. 10.5(b)(l)(C).

10. The reply filed by appellants in response to Appellees' Response to Appellants' Motion for

   Extension of Time to File Notice of Appeal fails to address Thomas J. Smith's knowledge of

   the deadline for filing the notice of appeal in an accelerated appeal. The verification of Kelly

   C. Hartmann filed by appellants was not timely filed within fifteen days as required by Tex.

   R. App. P. 26.3 and Tex. R. App. P. 10.5(b).

11. Appellants also seek to appeal the October 12, 2015 order denying appellants' motion for

   reconsideration of the trial court's order denying appellants' motion for arbitration and to

   abate. This is a non-appealable order. Tex. Civ. Prac. & Rem. Code§ 51.016. 9 U.S.C. § 16(a).

   The motion for reconsideration also did not extend the appellate timetable.               Hydro

   Management Systems, LLC v. Jalin, Ltd., No. 04-09-00813-CV, 2010 WL 1817813 (Tex.

   App.-San Antonio May 5, 2010, no pet. h.). See also Nabors Well Servs. Co. v. Aviles, No.

   06-10-00018-CV, 2010 WL 2680087, at *1-2 (Tex. App. July 7, 2010, no pet. h.).

12. Tex. Civ. Prac. & Rem. Code§ 51.016. provides that "[i]n a matter subject to the [FAA], a

   person may take an appeal or writ of error to the court of appeals from the judgment or

   interlocutory order of a district court, county court at law, or county court under the same

   circumstances that an appeal from a federal district court's order or decision would be permitted

   by 9 U.S.C. Section 16." Tex. Civ. Prac. & Rem. Code Ann.§ 51.016.
13. Section 16(a) of the FAA, titled "Appeals," provides, in relevant part, as follows:

    *2 (a) An appeal may be taken from(1)-

               (1) an order-

               (A) refusing a stay of any action under section 3 of this title,

               (B) denying a petition under section 4 of this title to order arbitration to proceed,

               (C) denying an application under section 206 of this title to compel arbitration,

               (D) confirming or denying confirmation of an award or partial award, or

               (E) modifying, correcting, or vacating an award.

   9 U.S.C. § 16(a) (2015).

14. Lucchese Boot Co. v. Licon, 388 S.W.3d 365 (Tex. App. El Paso 2012, no pet. h.) is

   distinguishable because it dealt with an amended motion to compel arbitration on an arbitration

   agreement which had not previously been offered as a basis for its original motion to compel

   arbitration. See also: Nazareth Hall Nursing Ctr. v. Castro, 374 S.W.3d 590 (Tex. App. El

   Paso 2012, no pet. h.) (following Hydro Mgmt. Sys. LLC. and distinguishing Lucchese).

                                              Prayer

       Wherefore, premises considered, appellees, Alfredo De la Garza, XXXXXX XX XX

XXXXX and XXXXXXXX XX XX XXXXX, minors, pray that this Court dismiss appellants'

appeal for want of jurisdiction pursuant to Tex. R. App. P. 42.3(a), and for such other and further

relief to which they may be entitled, whether in law or in equity.
                                            Respectfully submitted,

                                            JOHN DAVID HART
                                            State Bar No. 09147700

                                            THE LAW OFFICES OF JOHN DAVID HART
                                            Wells Fargo Tower
                                            201 Main Street, Suite 1720
                                            Fort Worth, Texas 76102
                                            (817) 870-2102 - phone
                                            (817) 332-5858 - facsimile
                                            j ohnhart@hartlaw. com

                                           ATTORNEY FOR APPELLEES, ALFREDO DE
                                           LA GARZA, INDIVIDUALLY AND AS NEXT
                                           FRIEND FOR XXXXXXX XX XX XXXXX and
                                           XXXXXXXX XX XX XXXXX, MINORS

                            CERTIFICATE OF CONFERENCE
       Pursuant to Tex. R. App. P. 10.l(a)(5), I conferred with counsel for Appellants on October
21, 2015 who have indicated that they are opposed to this Motion.
                               CERTIFICATE OF SERVICE
       The undersigned hereby certifies that a copy of the above and foregoing instrument has
been forwarded on this the 12th day of November, 2015 to the following attorneys of record
pursuant to Tex. R. App. P. 9.5:

VIA CERTIFIED MAIL & E-MAIL                       VIA CERTIFIED MAIL & E-MAIL
Mr. Thomas J. Smith                               Mr. J.J. Knauff
Mr. Kelly C. Hartmann                             The Miller Law Firm
Ms. Alexis M. Butler Hester                       Turtle Creek Centre
Galloway, Johnson, Tompkins,                      3811 Turtle Creek Blvd., Ste. 1950
Burr & Smith                                      Dallas, Texas 75219
1301 McKinney, Suite 400                          Attorney for Third Party Defendant
Houston, Texas 77010                              Penn Virginia MC Energy, LLC
Attorneys for Appellants, Penn Virginia
Oil & Gas GP, LLC and Penn Virginia               VIA CERTIFIED MAIL & E-MAIL
Oil & Gas, L.P.                                   Mr. BritT. Brown
                                                  Mr. Benjamin A. Escobar, Jr.
VIA CERTIFIED MAIL & E-MAIL                       Beirne, Maynard & Parsons, L.L.P.
Mr. J. Javier Gutierrez                           1300 Post Oak Blvd., Suite 2500
Ms. Ana Laura Gutierrez                           Houston, Texas 77056
The Gutierrez Law Firm, Inc.                     Attorney for Third Party Plaintiff
700 East Third Street                            Cudd Pressure Control, Inc.
Alice, Texas 78332
Attorneys for Appellees, John Paul Adame,
Individually and as Next Friend for
x:xxxxxxxx x:xxxx.x xxxxx, .x:xxx
.X:XXX .XXXX.X ~ and .X:XXX
.X'XXXXXX"X XXXXX, minors
    REDACTED
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               EXHIBIT "A"
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                      CTED
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                                                                                                                7/30/2015 7:58:21 AM
                                                                                           Chris Daniel - District Clerk Harris County
                                                                                                              Envelope No. 6284037
                                                                                                          By: JEANETTA SPENCER
                                                                                                        Filed: 7/30/2015 7:58:21 AM

                                         CAUSE NO. 2014-42519

ALFREDO DE LA GARZA,                                        §        IN THE DISTRICT COURT OF
INDIVIDUALLY and AS NEXT FRIEND                             §
FOR REDACTED            and                                 §
REDACTED              , minors                              §
                                                            §
v.                                                          §        HARRIS COUNTY, TEXAS
                                                            §
PENN VIRGINIA OIL & GAS, L.P., PENN                         §
VIRGINIA OIL & GAS GP LLC,                                  §
MIKE FERGUSON, TRIFECTA OILFIELD                            §
SERVICES, LLC, CUDD PRESSURE                                §
CONTROL, INC., ROYWELL                                      §        21Sth JUDICIAL DISTRICT
SERVICES, INC., and OAKS PERSONNEL                          §
SERVICES, INC. d/b/a THE OAKS GROUP                         §

  PLAINTIFFS' RESPONSE TO DEFENDANTS, PENN VIRGINIA OIL & GAS, L.P.
AND PENN VIRGINIA OIL & GAS GP LLC'S MOTION TO COMPEL ARBITRATION
                           AND TO ABATE

TO THE HONORABLE JUDGE OF SAID COURT:

        NOW COMES Plaintiff Alfredo De La Garza, individually and as next friend for REDA
                                                                                      RED
                                                                                                           CTED
                                                                                                            ACT
REDACTED                                                                                                    ED
                                              minors, and files this Plaintiffs' Response to Defendants,

Penn Virginia Oil & Gas, L.P. and Penn Virginia Oil & Gas GP, LLC's Motion to Compel

Arbitration and to Abate, and in support thereof would respectfully show the Court the following:

                                     I. SUMMARY OF ARGUMENT

        There is no valid agreement to arbitrate between Plaintiff Alfredo De La Garza and

Defendants Penn Virginia Oil & Gas, L.P. and Penn Virginia Oil & Gas GP LLC (hereinafter

referred to collectively as the Penn Virginia defendants). The incident made the basis of this

lawsuit occurred on April 29, 2014 on the Welhausen A2H well in Lavaca County, Texas. The

work done between Nabors Completion & Production Services Co. (hereinafter referred to as

Plaintiffs' Response to Defendants, Penn Virginia Oil & Gas, L.P. and Penn Virginia Oil & Gas GP LLC's      Page 1
Motion to Compel Arbitration and to Abate

                                         EXHIBIT "B"
"NCPS"), and Penn V.irginia Oil & Gas, L.P., the operator of the well, was performed pursuant to

a Master Service Contract (hereinafter referred to as the "MSC") dated March 28, 2013. A copy

of this MSC is attached as Exhibit "A". This MSC does not reference Nabors Industries, Inc.'s

Dispute Resolution Program (hereinafter referred to as the "DRP"), and does not provide that either

Penn Virginia Oil & Gas, L.P. or Penn Virginia Oil & Gas GP LLC is an "electing entity" or would

participate in Nabors Industries,    Inc~'s   DRP. A copy of the DRP is attached as Exhibit "B". The

Penn Virginia defendants' argument that Penn Virginia Oil & Gas, L.P. and Penn Virginia Oil &

Gas GP LLC are "electing entity[ies ]"under the DRP is not a valid argument. The Penn Virginia

defendants rely on a 2008 drilling contract between Penn Virginia Oil & Gas, L.P. and Nabors

Drilling USA, LP for a well in Jefferson County, Texas, attached as Exhibit "C", and a 2010

drilling contract between Penn Virginia MC Energy, LLC and Nabors Drilling USA, LP for a well

in Oklahoma, attached as Exhibit "D", as the basis for their argument that they were an "electing

entity" under the Nabors Industries, Inc.'s DRP. Both of these contracts were only valid for the

term for completion of operations for drilling those wells. Those contracts did not control any of

the work done on the Welhausen A2H well or the relationship between NCPS and the Penn

Virginia entities for the work done on the Welhausen A2H well in April, 2014.

        The drilling contracts relied on by the Penn Virginia defendants only apply to           "pr~sent   and

former" employees and applicants ofNabors' entities at the time of the contracts. Plaintiff Alfredo

De La Garza was not a "present or former" employee of any Nabors entity as of 2008 or 201 0, as

noted in Keith Nicholson's affidavit, attached as Exhibit "E".

        Furthermore, arbitration cannot be compelled in this matter because claims asserted by

Plaintiffs Alfredo De La do not fall within the scope of the DRP and its arbitration provisions.

Additionally, Defendants have failed to establish that Plaintiffs REDACTED                                    ,

Plaintiffs' Response to Defendants, Penn Virginia Oil & Gas, L.P. and Penn Virginia Oil & Gas GP LLC's   Page 2
Motion to Compel Arbitration and to Abate
minors, are subject to any valid arbitration agreement. Plaintiffs further contend that arbitration

should not be compelled in this matter because Defendants have waived any right to compel

arbitration in this matter.

        For the foregoing reasons, Plaintiffs respectfully request that the Penn Virginia defendants'

Motion to Compel Arbitration and to Abate be denied. In the alternative, Plaintiffs request that

their continuance of Defendants' motion be granted; that they be allowed to conduct discovery as

to arbitrability; that they be allowed to participate in a full evidentiary hearing as to the Penn

Virginia defendants' Motion to Compel Arbitration and to Abate; and that upon hearing the

arguments and evidence, that Defendants' Motion to Compel Arbitration and to Abate be denied.

        Plaintiffs request that their claims against Defendant Mike Ferguson and Defendant Oaks

Personnel Services, Inc. d/b/a The Oaks Group be severed from any claims against the Penn

Virginia defendants and that these claims be tried on October 19, 2015. While Defendant Mike

Ferguson has pled for arbitration, he has not filed a motion for arbitration, a notice of arbitration,

nor has he joined in the Penn Virginia defendants' motion for arbitration. Defendant Oaks

Personnel Services, Inc. d/b/a The Oaks Group has not asserted a claim or plead that it is entitled

to arbitration in connection with Plaintiffs' claims.

                        II. INTRODUCTION & FACTUAL BACKGROUND

        On April29, 2014, Plaintiff Alfredo De La Garza was an employee ofNabors Completion

& Production Services Co. (hereinafter referred to as "NCPS"). NCPS is a subsidiary of Nabors

Industries, Inc. On this date, Plaintiff was working on Nabors Rig No. 1480, outside of Shiner,

Texas. Penn Virginia Oil & Gas, L.P. was the operator of the well and was directing workover and

completion operations on the well.

Plaintiffs' Response to Defendants, Penn Virginia Oil & Gas, L.P. and Penn Virginia Oil & Gas GP LLC's   Page 3
Motion to Compel Arbitration and to Abate
        The well service operations on the W elhausen A2H well were being conducted pursuant to

a MSC between Penn Virginia Oil & Gas, L.P. and NCPS dated March 28, 2013. The MSC is

attached to this response as Exhibit "A". By its terms, the MSC supersedes all prior agreements

between the parties. The agreement states in part that, "This Contract shall become effective the

date first hereinabove written and shall supersede all prior service contracts between the parties

hereto with respect to new work or services commenced during the term of this Contract to be

performed in connection with this Contract." Exhibit "A", page 2. There is no reference in the

MSC to Nabors Industries, Inc.'s DRP. The MSC does not contain an agreement that either of the

Penn Virginia defendants and NCPS agree that Penn Virginia Oil & Gas, L.P. or Penn Virginia

Oil & Gas GP LLC will be an "electing entity" in Nabors Industries, Inc.'s DRP.

        During the operations, there was a pressure control failure that caused senous and

permanent injuries to Plaintiff Alfredo De La Garza. As a result of the serious, permanent, and

disabling injuries to Plaintiff Alfredo De La Garza, minors Plaintiffs REDACTED

                          have suffered a loss of consortium.

        Plaintiffs filed this action against the Penn Virginia defendants on July 24. 2014. A copy

of this petition is attached as Exhibit "F". Plaintiffs' filed their First Amended Original Petition

on September 8, 2014. A copy of Plaintiffs' First Amended Original Petition is attached as Exhibit

"G". Plaintiffs filed their Second Amended Original Petition on October 1, 2014. A copy is of

this petition is attached as Exhibit "H".

        On June 18, 2015, the Penn Virginia defendants filed their Motion to Compel Arbitration

and to Abate. A copy of the Nabors Industries, Inc.'s DRP is attached as Exhibit "B". In this

motion, the Penn Virginia defendants contend that Plaintiffs' claims against Defendants fall within

Plaintiffs' Response to Defendants, Penn Virginia Oil & Gas, L.P. and Penn Virginia Oil & Gas GP LLC's   Page 4
Motion to Compel Arbitration and to Abate
the scope of a valid arbitration agreement governed by Nabors Industries, Inc.'s DRP and the

Federal Arbitration Act.

        The Nabors' DRP states that"[t]he Program is designed to provide a means for the quick,

fair, accessible, and inexpensive resolution of Disputes between the Company and the Company's

present and former Employees and Applicants for employment related to and arising out of a

current, former, or potential employment relationship with the Company." Exhibit "B" at p. 2.

Nabors' DRP further provides the following definitions:

        "'Company' means Sponsor and every direct or indirect subsidiary (whether a corporation,
        limited liability company, company partnership or other legal entity of Sponsor, any
        Electing Entity ... provided, however, that in the case of an Electing Entity, "Company"
        shall include the Electing Entity only to the extent provided in the Electing Entity's
        agreement to be bound by the Program."

        " 'Dispute' means all legal and equitable claims, demand, and controversies, of whatever
        nature or kind, whether in contract, tort, under statute or regulation, or some other law,
        between persons bound by the Program or by agreement to resolve Disputes under the
        Program, or between a person bound by the Program and a person or entity otherwise
        entitled to its benefits, including, but not limited to, any matters with respect to: ... any
        personal injury allegedly incurred in or about a Company workplace or in the course and
        scope of an Employee's employment."

        " 'Electing Entity' means any legal entity that has agreed to be bound by the Program as
        provided herein."

        "'Employee' means any person who is or has been in the employment of the Company on
        or after the effective date of this Program ... "

        "'Party' means, with respect to a particular Dispute, affected person and/or entities bound
        by this Program."

        " 'Sponsor' means Nabors Industries, Inc., a Delaware corporation."

!d. at pp. 2-4.

        As to "Electing Entities", the Nabors' DRP provides:"[ c]orporations or other.legal entities,

not otherwise Parties, may elect to be bound by this Program by written agreement with Sponsor."

Plaintiffs' Response to Defendants, Penn Virginia Oil & Gas, L.P. and Penn Virginia Oil & Gas GP LLC's   Page 5
Motion to Compel Arbitration and to Abate
I d. at p. 7. The DRP further provides that: "[ e]lection may be made only as to some types of

Disputes, or only as to some persons, in the discretion of Electing Entity." Id.

        The Penn Virginia defendants rely on the 2008 International Association of Drilling

Contractors Drilling Bid Proposal and Daywork Drilling Contract- U.S. (hereinafter referred to

as the "2008 drilling contract"), attached as Exhibit "C". NCPS was not a party to this contract.

The 2008 drilling contract between Penn Virginia Oil & Gas, L.P. and NaborsDrilling USA, LP

was only in force and effect until drilling operations were completed for the well which was being

drilled in Jefferson County, Texas in 2008. The term of that agreement is defined in Paragraph 6.1:

        "Duration of Contract: This Contract shall remain in full force and effect until drilling
        operations are con1pleted on the well or v1ells specified in Paragraph 1 above, or for a term
        of         , commencing on the date specified in Paragraph 2 above." Exhibit "C", p. 1.

        By its terms, the provisions relied on by the Penn Virginia defendants relating to Nabors

Industries, Inc.'s DRP only apply to "the present and former Employees and Applicants ofNabors"

as of the date of this drilling contract in 2008:

        "Operator, its parent, subsidiary and affiliated corporations, as well as the employees,
        officers and directors of each (collectively, "Operator") is cognizant of the Nabors Dispute
        Resolution Program and wishes to become an Electing Entity, as defined in that Program.
        Accordingly, Operator and Nabors Industries, Inc. ("Nabors") hereby agree that Operator
        is an Electing Entity as to all Disputes between Operator and the present and former
        Employees and Applicants of Nabors pursuant to the Nabors Dispute Resolution
        Program as it currently exists and as maybe amended from time to time [emphasis added].
        In the event the Program is amended, Nabors agrees to provide a copy of the amendment(s)
        to Operator. Operator may withdraw this election to participate in the Program at any time
        by giving notice of such withdrawal to Nabors, such revocation to be effective with respect
        to any claims not yet instituted as of the date of revocation. Operator understands that it is
        bound by the terms of the Program with respect to all Disputes with Nabors employees,
        regardless of whether such Dispute is initiated by the employee or by Operator. Operator
        and Nabors acknowledge that the Program does not apply to disputes between Operator
        and Nabors and that the Program does not alter the terms of any indemnification agreement
        between them." Exhibit C, page 1 of the 2008 drilling contract's Exhibit "C": Contractors
        Special Provisions.

Plaintiffs' Response to Defendants, Penn Virginia Oil & Gas, L.P. and Penn Virginia Oil & Gas GP LLC's   Page 6
Motion to Compel Arbitration and to Abate
        The Penn Virginia defendants also rely on the 2010 International Association of Drilling

Contractors Drilling Bid Proposal and Daywork Drilling Contract- U.S. (hereinafter referred to

as the "2008 drilling contract"), attached as Exhibit "D". NCPS was also not a party to this

contract. The 2010 drilling contract between Penn Virginia MC Energy, LLC and Nabors Drilling

USA, LP was only in force and effect until drilling operations were completed for the well which

was being drilled in Logan County, Oklahoma in 2010. The term of that agreement is defined in

Paragraph 6.1:

        "Duration of Contract: This Contract shall remain in full force and effect until drilling
        operations are completed on the well or 'Neils specified in Paragraph 1 above, or fur a term
        of         , commencing on the date specified in Paragraph 2 above." Exhibit D, page 1.

        By its terms, the provisions relied on by the Penn Virginia defendants relating to Nabors

Industries, Inc.'s DRP only apply to "the present and former Employees and Applicants ofNabors"

as ofthe date of this agreement in 2010:

         "Operator, its parent, subsidiary and affiliated corporations, as well as the employees,
        officers and directors of each (collectively, "Operator") is cognizant of theN abors Dispute
        Resolution Program and wishes to become an Electing Entity, as defined in that Program.
        Accordingly, Operator and Nabors Industries, Inc. ("Nabors") hereby agree that Operator
        is an Electing Entity as to all Disputes between Operator and the present and former
        Employees and Applicants of Nabors pursuant to the Nabors Dispute Resolution
        Program as it currently exists and as may be amended from time to time [emphasis added].
        In the event the Program is amended, Nabors agrees to provide a copy of the amendment(s)
        to Operator. Operator may withdraw this election to participate in the Program at any time
        by giving notice of such withdrawal to Nabors, such revocation to be effective with respect
        to any claims not yet instituted as of the date of revocation. Operator understands that it is
        bound by the terms of the Program with respect to all Disputes with Nabors employees,
        regardless of whether such Dispute is initiated by the employee or by Operator. Operator
        and Nabors acknowledge that the Program does not apply to disputes between Operator
        and Nabors and that the Program does not alter the terms of any indemnification agreement
        between them." Exhibit D, page 1 of the 2010 drilling contract's Exhibit "C": Contractors
        Special Provisions.

        Plaintiff Alfredo De La Garza was not a present or former employee ofNCPS in 2008 or

in 2010. Plaintiff Alfredo De La Garza initially applied for employment with NCPS on July 16,

Plaintiffs' Response to Defendants, Penn Virginia Oil & Gas, L.P. and Penn Virginia Oil & Gas GP LLC's   Page 7
Motion to Compel Arbitration and to Abate
2013. Mr. De La Garza's application is attached as Exhibit "1".                     Further, per Mr. Keith

Nicholson's sworn affidavit, Mr. De La Garza executed a document entitled "Application for

Hourly and Daily Employment." His affidavit is attached as Exhibit "E".

         There is no written agreement purporting to bind the minor Plaintiffs REDACTED

                               to arbitration.

        There is no written agreement purporting to bind Defendant Mike Ferguson or Defendant

Oaks Personnel Services, Inc. d/b/a The Oaks Group to arbitration.

                                III.APPLICABLE LEGAL STANDARDS

        Under the Federal Arbitration Act ("FAA"), 9 U.S.C. § 1, et seq., a party seeking to compel

arbitration must first establish the existence of an arbitration agreement subject to the FAA. In re

First Merit Bank, NA., 52 S.W.3d 749, 753 (Tex. 2001) (orig. proceeding). If one party denies

that there is a binding arbitration agreement, the trial court may summarily decide whether to

compel arbitration on the basis of uncontroverted affidavits, pleadings, discovery, and

stipulations. Jack B. Anglin Co. v. Tipps, 842 S.W.2d 266, 269 (Tex.1992) (orig. proceeding).

However, if the material facts necessary to determine the issue are controverted, by an opposing

affidavit or otherwise admissible evidence, the trial court must conduct an evidentiary hearing to

determine the disputed material facts. Id.; TEX. CIV. PRAC. & REM. CODE§ 171.021.

        When deciding whether the parties agreed to arbitrate under the FAA, court should apply

ordinary state law principles regarding the formation of contract. In reD. Wilson Canst. Co., 196

S.W.3d 774,781 (Tex. 2006); 9 U.S.C. § 1, et. seq.; TEX. CIV. PRAC. & REM. CODE§ 171.001

et seq. An arbitration agreement must meet all the requisite contract elements, and even though

there is a strong presumption favoring arbitration, the presumption only arises after the part seeking

to compel arbitration proves that a valid arbitration agreement exists. J.M Davidson, Inc. v.

Plaintiffs' Response to Defendants, Penn Virginia Oil & Gas, L.P. and Penn Virginia Oil & Gas GP LLC's   Page 8
Motion to Compel Arbitration and to Abate
Webster, 128 S.W.3d 223, 227 (Tex. 2003); In re Halliburton, 80 S.W.3d 566, 570 (Tex. 2002).

The policy in favor of arbitration agreements does not apply when a court is examining the

threshold question of whether an arbitration agreement exists. Granite Rock Co. v. Int 'l

Brotherhood ofTeamsters, 130 S. Ct. 2847 (2010); In re Morgan Stanley & Co., 293 S.W.3d 182,

183 (Tex. 2009). If the trial court finds there is a valid agreement to arbitrate, the burden shifts to

the party opposing arbitration to prove his defenses. JM Davidson, Inc., 128 S.W.3d at 227. An

agreement to arbitrate may be avoided on a ground that exists at law or in equity for the revocation

of a contract. TEX. CIV. PRAC. & REM. CODE§ 171.001; Rachal v. Reitz, 403 S.W.3d 840, 843

(Tex. 2013).

        Once a valid agreement to arbitrate has been established, the court must further determine

whether the non-movant's claims fall within the scope of the arbitration agreement. In re First

Merit Bank, NA., 52 S.W.3d at 753. Federal policy embodied in the FAA favors agreements to

arbitrate and courts must resolve any doubts about an arbitration agreement's scope in favor of

arbitration. !d. at 753. But those public policies favoring arbitration do not extend to any favorable

inclination one way or the other with regard to the questions of who is bound by the arbitration

agreement because the purpose of the FAA is to "make arbitration agreement as enforceable as

other contracts, but not more so." In re SSP Partners d/b/a Circle K and Jose Almaguer, 241
S.W.3d 162, 167-168 (Tex. App.          Corpus Christi 2007, orig. proceeding [mand. denied]).

                                   IV. ARGUMENT & AUTHORITIES

    A. Defendants have failed to prove the existence of an agreement to arbitrate between
       Plaintiff Alfredo De La Garza and the Penn Virginia defendants.

Plaintiffs' Response to Defendants, Penn Virginia Oil & Gas, L.P. and Penn Virginia Oil & Gas GP LLC's   Page 9
Motion to Compel Arbitration and to Abate
        The Court cannot properly compel arbitration of Plaintiffs claims in this matter because the

Penn Virginia defendants have failed to prove that an agreement to arbitrate exists between either

Penn Virginia entity and Plaintiffs.

        In Defendants' Motion to Compel Arbitration, there is no contention that there is any direct

arbitration agreement between Plaintiffs and the Penn Virginia defendants. Rather, the Penn

Virginia defendants rely entirely on Nabors' Dispute Resolution Program relating to Plaintiff

Alfredo De La Garza's employment with Nabors Industries, Inc.'s subsidiary, NCPS.

        The initial burden of the party seeking to compel arbitration - to establish the arbitration

agreement's existence       includes proving the entity seeking to enforce the arbitration agreement

was a party to it or had the right to enforce the agreement notwithstanding. See Pepe Int 'l Dev. Co.

v. Pub Brewing Co., 915 S.W.2d 925, 931 (Tex. App.- Houston [1st Dist.] 1996, no writ).

        The MSC specifically provides that it will govern work by and among Penn Virginia Oil

& Gas Corporation, Penn Virginia Oil & Gas, L.P., Penn Virginia MC Energy L.L.C., and Nabors

Completion & Production Services Co. The parties to that agreement did not choose to include

any reference to the Nabors Industries, Inc.'s DRP. The contract did not include any agreement

that either Penn Virginia defendant would be an "electing entity" in the Nabors Industries, Inc.'s

DRP. As a matter of law, there is no agreement to arbitrate between Plaintiffs and the Penn

Virginia defendants based on the MSC.

        Despite their contentions, the Penn Virginia defendants have not established their right to

enforce any arbitration agreement that may exist between Plaintiff Alfredo De La Garza and

NCPS. The Penn Virginia defendants cannot avail themselves of the Nabors Dispute Resolution

Program as an "Electing Entity", as any agreement entered into by Defendants to be bound by

Nabors' DRP fails by the express terms of the DRP.

Plaintiffs' Response to Defendants, Penn Virginia Oil & Gas, L.P. and Penn Virginia Oil & Gas GP LLC's Page 10
Motion to Compel Arbitration and to Abate
        As dictated by the terms of Nabors' DRP, an Electing Entity "may elect to be bound by

this Program by written agreement with Sponsor." Id. atp. 7. The Sponsor under the DRP is Nabors

Industries, Inc. Id. at p. 4. Although Defendants state that it is an "undisputed fact" that they are

Electing Entities ofN abors' DRP, no written agreement between the Penn Virginia defendants and

Nabors Industries, Inc., as a signatory, is attached to Defendants' motion establishing such status.

Instead, Defendants attached two "IADC contracts" to its motions: (1) a 2008 contract executed

by Defendant Penn Virginia Oil & Gas, LP and Nabors Drilling ysA, LP. Exhibit "C"; and, (2)

a 2010 contract executed by Penn Virginia MC Energy and Nabors Drilling USA, LP. Exhibit

"D". Neither contract establishes a written agreement with Nabors Industries, Inc., the Sponsor of

Nabors' DRP; therefore, the Penn Virginia defendants cannot take advantage of any agreement to

arbitrate that may exist between Plaintiff Alfredo De La Garza and his employer NCPS because

Defendants do not qualify as an Electing Entity under the Program. Each of these contracts would

certainly have expired by its own terms years before the incident made the basis of the suit

occurred.

        Plaintiffs should not be compelled to arbitrate their claims against the Penn Virginia

defendants in absence of an agreement to do so. Trico Marine Servs., Inc. v. Stewart & Stevenson

Technical Services, Inc., 73 S.W.3d 545, 548 {Tex. App. - Houston [1st Dist.] 2002, orig.

proceeding [mand. denied]). The burden is upon the party seeking to compel arbitration to establish

the existence of an arbitration agreement. In re Oakwood Mobile Homes, Inc., 987 S.W.2d 571,

573 (Tex. 1999). Because Defendants have failed to meet this burden, Defendant's Motion to

Compel Arbitration and to Abate should be denied as to the claims of Plaintiffs Alfredo De La

Garza and minor Plaintiffs REDACTED                                               .

Plaintiffs' Response to Defendants, Penn Virginia Oil & Gas, L.P. and Penn Virginia Oil & Gas GP LLC's Page 11
Motion to Compel Arbitration and to Abate
    B. Defendants have failed to establish that Plaintiff Alfredo De La Garza's claims are
       within the scope of any arbitration agreement.

        Defendants have failed to establish that Plaintiff Alfredo De La Garza's claims fall within

the scope of any agreement to arbitrate.

        If a valid arbitration agreement is found to exist, the Court would then need to determine

if the claims asserted by Plaintiffs fall within the scope of the arbitration agreement. Personal Sec.

& Safety Sys., Inc. v. Motorola, Inc., 297 F.3d 388, 392 (5th Cir. 2002); In re Oakwood Mobile

Homes, Inc., 987 S.W.2d at 573. Only matters subject to the covenant of arbitration should be

arbitrated. See Wee Tots Pediatrics, P.A. v. Morohunfola, 268 S.W.3d 784, 793 (Tex. App.-Fort

Worth 2008, no pet. & orig. proceeding). In determining whether a claim falls within the scope of

an arbitration agreement, looks at the facts alleged, rather than the legal causes of actions

presented, and considers whether the facts touch matters covered by the underlying arbitration

agreement. Rachal v. Reitz, 403 S.W.3d at 846. Here, Plaintiff Alfredo De La Garza's claims are·

outside the express scope of the purported arbitration agreement and elections allegedly made by

the Penn Virginia defendants in 2008 and 2010.

        In Defendants' Motion to Compel Arbitration, the Penn Virginia defendants contend that

Plaintiff Alfredo De La Garza's claims "clearly fall within the scope of the arbitration agreement"

because "the DRP clearly and unequivocally states that it applies to and binds the Company, each

Employee and Applicant." Defendants argue that Plaintiff Alfredo De La Garza was an employee

of NCPS at the time of the incident giving rise to Plaintiffs' claims and therefore is subject to

Nabors' DRP. Defendants' contentions fail to take into account the specific terms of the election

made by Defendants its written agreements to be bound by the Nabors' DRP. Specifically, in the

agreements the Penn Virginia defendants elected to be bound by Nabors' DRP as to current and

former employees of Nabors Industries, Inc.

Plaintiffs' Response to Defendants, Penn Virginia Oil & Gas, L.P. and Penn Virginia Oil & Gas GP LLC's Page 12
Motion to Compel Arbitration and to Abate
        In their motion, Defendants attached two "IADC contracts": (1) the 2008 contact executed

by Defendant Penn Virginia Oil & Gas, LP and Nabors Drilling USA, LP (Exhibit "C"); and, (2)

the 2010 contract executed by Penn Virginia MC Energy and Nabors Drilling USA, LP (Exhibit

"D").   Defendants contend that a provision in the "Contractors Special Provisions" of these

contracts constitutes Defendants' agreement to be bound to Nabors' DRP. In both contracts, the

provision states:

        "Operator, its parent, subsidiary and affiliated corporations, as well as the employees,
        officers and directors of each (collectively, "Operator") is cognizant ofthe Nabors Dispute
        Resolution Program and wishes to become an Electing Entity, as defined in that Program.
        Accordingly, Operator and Nabors Industries, Inc. ("Nabors") hereby agree that Operator
        is an Electing Entity as to all Disputes between Operator and the present and former
        Employees and Applicants ofNabors".

Exhibit "C", page 1 of the 2008 drilling contract's Exhibit "C": Contractors Special Provisions

(emphasis added); Exhibit "D", page 1 of the 2008 drilling contract's Exhibit "C": Contractors

Special Provisions (emphasis added).

        Under the express terms of the "Contractors Special Provisions" that Defendants contend

binds them to Nabors' DRP, Defendants elected to limit its participation in the DRP as to only

current and former employees of Nabors Industries, Inc. Nabors' DRP specifically provides for

such an election, stating that: "[ e]lection may be made only as to some types of Disputes, or only

as to some persons, in the discretion of Electing Entity." Exhibit "B", page 7.

        Here, it is undisputed that Plaintiff Alfredo De La Garza was hired by NCPS as a crew

worker on July 22, 2013. Exhibit "E" at 3. Further, it is undisputed that Plaintiff Alfredo De La

Garza was an employee of NCPS at the time of the incident giving rise to his claims against

Defendants. I d. at 3. As such, Plaintiff Alfredo De La Garza was not a current or former employee

of Nabors Industries, Inc. or any subsidiary during or prior to 2010. The drilling contracts were

entered into on September 23, 2008 and September 8, 2010, years before Plaintiff Alfredo De La

Plaintiffs' Response to Defendants, Penn Virginia Oil & Gas, L.P. and Penn Virginia Oil & Gas GP LLC's Page 13
Motion to Compel Arbitration and to Abate
Garza applied to or was ever employed by NCPS, a subsidiary of Nabors Industries, Inc. Plaintiff

Alfredo De La Garza's claims fall outside the scope of the arbitration agreement alleged to exist

by the Penn Virginia defendants. Defendants' Motion to Compel Arbitration and to Abate should

be denied as to the claims of Plaintiff Alfredo De La Garza or his minor children.

    C. Defendants have failed to establish that Plaintiffs REDACTED
              loss of consortium claims are subject to arbitration.

        Defendants have failed to establish a valid arbitration agreement that encompasses the loss

of consortium claims of the minor children of Plaintiff Alfredo De La Garza, REDACTED

                 A child can recover for loss of parental consortium when the parent suffered

serious, permanent, and disabling injury or death. In re SSP Partners, 241 S.W.3d at 171 (citing

Reagan v. Vaughn, 804 S.W.2d 463, 467 (Tex. 1990)). Although a claim for loss of parental

consortium is derivative to the extent that liability for the parent's injury must be established, the

claim is separate and independent and not automatically extinguished merely because, for instance,

the injured parent settled his claim for personal injuries. I d. (citing Lehamn v. Har-Con Corp., 76
S.W.3d 555, 564 (Tex. App.-Houston [14th Dist.] 2002, no pet.)). Because Defendants have

provided no evidence of a written agreement signed by the children, an express provision of

Nabors' DRP binding the children to arbitration, or the application of direct-benefits estoppel,

Defendants have failed to demonstrate that Plaintiffs REDACTED                                    claims are

subject to arbitration.

        Arbitration is a matter of contract and should not be compelled without an agreement. Trico

Marine Servs., Inc., 73 S.W.3d at 548. As previously addressed, public policies favoring arbitration

do not extend to any favorable inclination one way or the other with regard to the questions of who

is bound by the arbitration agreement because the purpose of the FAA is to "make arbitration

agreement as enforceable as other contracts, but not more so." In re SSP Partners, 241 S.W.3d at

Plaintiffs' Response to Defendants, Penn Virginia Oil & Gas, L.P. and Penn Virginia Oil & Gas GP LLC's Page 14
Motion to Compel Arbitration and to Abate
167-168 (court refused to enforce an arbitration agreement in connection with claims for loss of

parental consortium by minor children of an etnployee who was injured on the job and who has

signed an enforceable agreement to arbitrate all disputes relating to her employment). In this case,

the Penn Virginia defendants contend that the claims of Plaintiffs REDACTED                                  ,

minors, are "subject to the arbitration agreement as they are derivative of De La Garza['s] claims."

Defendants provide no other basis or support for this contention.

        Under Nabors' DRP, a "dispute" is defined as "all legal and equitable claims, demand, and

controversies, of whatever nature or kind, whether in contract, tort, under statute or regulation, or

some other law, between persons bound by the Program or by agreement to resolve Disputes under

the Program, or between a person bound by the Program and a person or entity otherwise entitled

to its benefits, including, but not limited to, any matters with respect to: ... any personal injury

allegedly incurred in or about a Company workplace or in the course and scope of an Employee's

employment." Id. at p. 3. This provision does not expressly bind the minor children of any person

bound by the Program, unless the children are found to be "otherwise entitled to [the Program's]

benefits." Id. Here, the Penn Virginia defendants have provided no evidence that Plaintiffs REDA
                                                                                                       CTED
                                are third-party beneficiaries of the purported arbitration agreement

between their father and NCPS. In re SSP Partners, 241 3d at 170-171 (court refused to apply

direct benefits estoppel because minor children were not bringing claims that sought direct benefits

from a contract containing an arbitration clause, nor were they seeking and obtaining substantial

benefits from the contact itself outside the litigation). Moreover, Plaintiffs REDACTED

REDACT did not individually sign any written agreement that would bind them to the Nabors'
ED
DRP. "Texas law does not ordinarily bind children to the contracts their parents sign. In re SSP

Partners, 241 S.W.3d at 170 ((quoting Fleetwood Enterprises, Inc. v. Gaskmap, 280 F.3d 1069,

Plaintiffs' Response to Defendants, Penn Virginia Oil & Gas, L.P. and Penn Virginia Oil & Gas GP LLC's Page 15
Motion to Compel Arbitration and to Abate
1076 (5 1h Cir. 2002) (applying Texas law), opinion supplemented on denial ofreh'g, 303 F.3d 570

(5th Cir. 2002)( court held minor children were not bound by arbitration agreement where children

did not personally sign the arbitration agreement and there was no provision expressly stating that

parents, on behalf of their children, agreed to submit the children's claims to arbitration)). Plaintiff

Alfredo De La Garza did not sign any agreement or document acknowledging the Nabors' DRP

on behalf of his minor children or as representative of his children. Additionally, there is no

provision within any executed documents or the Nabors' DRP stating that Plaintiff Alfredo De La

Garza agreed to submit his children's claims to arbitration. Absent express agreement, Texas law

does not require that minors arbitrate "simply because they are minors and their claims are related

to that of their pa~ent." I d. at 170. Defendants have failed to establish that minor Plaintiffs REDA
                                                                                                       CTED
REDACTED                           parental consortium claims are bound by any valid arbitration

agreement. Defendants' Motion to Compel Arbitration and to Abate should be denied as to the

claims of the minor children.

    D. The Penn Virginia defendants waived their right to compel arbitration

        Even if the Penn Virginia defendants had established that a valid arbitration agreement

exists and Plaintiffs' claims fall within its scope, Defendants have substantially invoked the

judicial process and have waived their right to compel arbitration in this matter.

        A party seeking to enforce an arbitration agreement can lose their right to do so through

waiver. The right to have a dispute submitted to arbitration, like any other contractual right, may

be waived either expressly or implicitly. Perry Homes v. Cull, 258 S.W.3d 580, 593 (Tex. 2008),

cert. denied, 129 S. Ct. 952 (2009). Express waiver arises when a party affirmatively indicates that

it wishes to resolve the case in the judicial forum, rather than through arbitration. In re Citigroup

Plaintiffs' Response to Defendants, Penn Virginia Oil & Gas, L.P. and Penn Virginia Oil & Gas GP LLC's Page 16
Motion to Compel Arbitration and to Abate
Global Markets, Inc., 258 S.W.3d 623, 626 (Tex. 2008). Implied waiver arises when a party acts

inconsistently with the right to arbitrate and prejudices the opposing party. Id.

           The legal test for a waiver of arbitration requires conduct or activity inconsistent with the

right to arbitration and prejudice to the party claiming waiver. In re Bank One, NA., 216 S.W.3d
825, 826 (Tex. 2007) (orig. proceeding) (per curiam). A party waives an arbitration clause when

it substantially invokes the judicial process to the other party's detriment. Perry Homes, 258
S.W.3d at 590. To invoke the judicial process, a party must engage in some overt act in court that

evinces a desire to resolve the arbitrable dispute through litigation rather than arbitration. Pilot

Travel Centers, LLC v. McCray, 416 S.W.3d 168, 187 (Tex. App.-Dallas 2013, no pet.). As it

applies to waiver, "prejudice" relates to inherent unfairness in terms of delay, expense, or damag~

to a party's legal position that occurs when the party attempts to have it both ways by switching

between litigation and arbitration to its own advantage. Kennedy Hodges, L.L.P. v. Gobellan,             ~33

S.W.3d 542, 545 (Tex. 2014) (per curiam); Perry Homes, 258 S.W.3d at 597.

           The issue of whether there has been a waiver of arbitration rights is to be decided case by

case based on the totality of the circumstances. Gobellan, 433 S.W.3d at 545; Perry Homes, 258
S.W.3d at 591. In assessing the totality of the circumstances, the court will consider the following

factors:

    (1) whether the movant was the plaintiff, who chose to file in court, or the defendant, who
         merely responded;
    (2) how long the movant delayed before seeking arbitration;
    (3) when the movant knew of the arbitration clause;
    (4) whether the movant sought or opposed arbitration earlier in the case;
    (5) how much time and expense had been incurred in litigation;
    (6) whether activity in court would be duplicated in arbitration;
    (7) whether the movant filed affirmative claims or dispositive motions or sought judgment on
         the merits;
    (8) how much discovery had been conducted and who initiated it;
    (9) how much of the discovery would be useful in arbitration; and
    (1 0) how much pretrial activity related to the merits, rather than arbitrability or jurisdiction.

Plaintiffs' Response to Defendants, Penn Virginia Oil & Gas, L.P. and Penn Virginia Oil & Gas GP LLC's Page 17
Motion to Compel Arbitration and to Abate
Perry Homes, 258 S.W.3d at 591-592.

        Plaintiffs filed this case against the Penn Virginia defendants on July 24, 2014. Exhibit

"F". Plaintiffs' filed their First Amended Original Petition on September 8, 2014. Exhibit "G".

Plaintiffs filed their Second Amended Original Petition on October 1, 2014. Exhibit "H".

        On August 25, 2014, the Penn Virginia defendants filed their Original Answer which was

not subject to a motion to compel arbitration. Defendants filed a First Amended Answer to

Plaintiffs' Second Amended Petition on April 10, 2015. Defendants waited until the filing of this

answer to plead in the alternative that Defendants would assert the affirmative defenses of

arbitration and award. On April 20, 2015, Defendants filed their Second Amended Answer to

Plaintiffs' Second Amended Petition. It was not until this answer that Defendants specifically

plead that Plaintiffs' claims are "subject to mandatory binding arbitration and as such this suit must

be abated and/or dismissed. On this same date, Defendants sent a notice of arbitration. A copy of

this notice is attached as Exhibit "J".

        This case has been pending before this Court for over a year. Defendants waited until June

18, 2015, to file their Motion to Compel Arbitration and to Abate. In the meantime, Defendants

have propounded interrogatories on Plaintiffs; submitted requests for production and requests for

admissions; participated in numerous depositions; and, responded to Plaintiffs' written discovery.

Defendants did not raise the issue of arbitration in any motions, pleadings, or filings made before

their amended answer filed on April 10, 2015. Defendants delayed in filing a motion to compel

arbitration until approximately four months before the date scheduled for trial of October 19, 2015.

This delay wasted judicial resources and disadvantaged Plaintiffs who are preparing for an October

19, 2015 trial. Defendants have caused detriment and prejudice to Plaintiffs through their delay in

seeking arbitration to the extent that Plaintiffs' trial setting may be delayed.

Plaintiffs' Response to Defendants, Penn Virginia Oil & Gas, L.P. and Penn Virginia Oil & Gas GP LLC's Page 18
Motion to Compel Arbitration and to Abate
        While Defendant Mike Ferguson has pled for arbitration, he has not filed a motion for

arbitratio.n, a notice of arbitration, nor has he joined in the Penn Virginia defendants' motion for

arbitration. Defendant Oaks Personnel Services, Inc. d/b/a The Oaks Group has not asserted a

claim or plead that it is entitled to arbitration in connection with Plaintiffs' claims. This case

should proceed to trial against Defendant Mike Ferguson and Defendant Oaks Personnel Services,

Inc. d/b/a The Oaks Group on October 19, 2015.

                                     V. CONCLUSION & PRAYER

        WHEREFORE, PREMISES CONSIDERED, Plaintiffs respectfully request that the Penn

Virginia defendants' Motion to Compel Arbitration and to Abate be denied. In the alternative,

Plaintiffs request that their continuance of this motion be granted, that they be allowed to conduct

discovery as to arbitrability, and that they be allowed to participate in a full evidentiary hearing as

to the Penn Virginia defendants' Motion to Compel Arbitration and to Abate; and upon hearing

the arguments and evidence, that Defendants' Motion to Compel Arbitration and to Abate be

denied. Plaintiffs request that their claims against Defendant Mike Ferguson and Defendant Oaks

Personnel Services, Inc. d/b/a The Oaks Group be severed from any claims against the Penn

Virginia defendants and' that these claims be tried on October 19, 2015.

Plaintiffs' Response to Defendants, Penn Virginia Oil & Gas, L.P. and Penn Virginia Oil & Gas GP LLC's Page 19
Motion to Compel Arbitration and to Abate
                                                   Respectfully submitted,

                                                   J       DAVIDHART

                                                   State Bar No. 09147700
                                                   THE LAW OFFICES OF JOHN DAVID HART
                                                  Wells Fargo Tower
                                                  201 Main Street, Suite 1720
                                                  Fort Worth, Texas 76102
                                                  (817) 870-2102- Telephone
                                                  (817) 332-5858 -Facsimile
                                                  j ohnhart@hartlaw. com

                                                   ATTORNEY FOR PLAINTIFFS

                                      CERTIFICATE OF SERVICE

        The undersigned hereby ;zrtifies that a copy of the above and foregoing instrument has
    been forwarded on this :jO ~ay of July, 2015, to the following attorneys of record pursuant
    to the Texas Rules of Civil Procedure as indicated below:

    VIA CMRRR & FACSIMILE                                      VIA CMRRR & FACSIMILE
    Mr. Thomas J. Smith                                        Mr. J. Javier Gutierrez
    Mr. K~lly C. Hartmann                                      Ms. Ana Laura Gutierrez
    Ms. Alexis Butler Hester                                   The Gutierrez Law Firm, Inc.
    Galloway, Johnson, Tompkins,                               700 East Third Street
    Burr & Smith                                               Alice, Texas 78332
    1301 McKinney, Suite 1400
    Houston, Texas 77010                                       VIA CMRRR & FACSIMILE
                                                               Mr. Benjamin A. Escobar, Jr.
                                                               Mr. BritT. Brown
                                                               Beirne, Maynard & Parsons, L.L.P.
                                                               1300 Post Oak Blvd., Suite 2500
                                                               Houston, Texas 77056

                                                           JcfuN DAVID HART

Plaintiffs' Response to Defendants, Penn Virginia Oil & Gas, L.P. and Penn Virginia Oil & Gas GP LLC's Page 20
Motion to Compel Arbitration and to Abate
                                    CAUSE NO. 2014-42519

ALFREDO DE LA GARZA,                                  §      IN THE DISTRICT COURT OF
INDIVIDUALLY and AS NEXT FRIEND                       §
FOR REDACTED            and                           §
REDACTED              , minors                        §
                                                      §
v.                                                    §      HARRIS COUNTY, TEXAS
                                                      §
PENN VIRGINIA OIL & GAS, L.P., PENN                   §
VIRGINIA OIL & GAS GP LLC,                            §
MIKE FERGUSON, TRIFECTA OILFIELD                      §
SERVICES, LLC, CUDD PRESSURE                          §
CONTROL, INC., ROYWELL                                §      215th JUDICIAL DISTRICT
SERVICES, INC., and OAKS PERSONNEL                    §
SERVICES, INC. d/b/a THE OAKS GROUP                   §

                            AFFIDAVIT OF JOHN DAVID HART

STATE OF TEXAS                 §
COUNTY OF TARRANT §
        Before me, the undersigned notary, on this day personally appeared John David Hart, a
person whose identity is known to me. After I administered an oath to him, upon his oath he stated
the following:

      "My name is John David Hart. I am over 18 years of age, of sound mind, and capable of
making this affidavit. I am counsel for the Plaintiffs in the above styled case."

        "I certify that the Master Service Contract between Penn Virginia Oil & Gas, L.P. and
Nabors Completion & Production Services Co. referenced in the above response is a true and
correct copy of the Master Service Contract between these entities as produced by Defendants."

       "These documents were produced to Plaintiffs in response to Requests for Production that
were served on the Penn Virginia defendants."

         "I certify that the Affidavit of Keith Nicholson referenced in the above response is a true
and correct copy of the Affidavit of Keith Nicholson as produced by the Penn Virginia defendants
in their motion for arbitration."

        "I certify that the Notice of Arbitration referenced in the above response is a true and
correct copy of the Notice of Arbitration as produced by the Penn Virginia defendants on April20,
2015."

Affidavit of John David Hart                                                                 Page 1
        "Further, I certify that on January 13, 2015; pursuant to Rule 193.7 of the Texas Rules of
Civil Procedure, Defendants Penn Virginia Oil & Gas, L.P. and Penn Virginia Oil & Gas GP LLC
were advised that Plaintiffs intend to use the documents produced by these Defendants in
connection this cause of action."

       "I certify that the Nabors Dispute Resolution Program and Rules referenced in the above
response is a true and correct copy of the Nabors Dispute Resolution Program and Rules as
produced by Nabors Completion & Production Services Co. in response to a subpoena request."
        "I certify that the 2008 International Association of Drilling Contractors Drilling Bid
Proposal and Daywork Drilling Contract- U.S. referenced in the above response is a true and
correct copy of the 2008 International Association of Drilling Contractors Drilling Bid Proposal
and Daywork Drilling Contract - U.S. as produced by Nabors Completion & Production Services
Co. in response to a subpoena request."

        "I certify that the 2010 International Association of Drilling Contractors Drilling Bid
Proposal and Daywork Drilling Contract - U.S. referenced in the above response is· a true and
correct copy of the 2010 International Association of Drilling Contractors Drilling Bid Proposal
and Daywork Drilling Contract - U.S. as produced by Nabors Completion & Production Services
Co. in response to a subpoena request."
       "I certify that the Application for Hourly and Daily Employment for Alfredo De La Garza
with Nabors Completion & Production Services Co. that is referenced in the above response is a
true and correct copy of the Application for Hourly and Daily Employment for Alfredo De La
Garza with Nabors Completion & Production Services Co. as produced by Nabors Completion &
Production Services Co. in response to a subpoena request."
        "I certify that Plaintiffs' Original Petition and any amendments thereof that are referenced
in the above response are true and correct copies of all petitions filed by Plaintiffs with the Court
in this matter."

                                                      John David Hart

                                                                       jk.
       SWORN TO AND SUBSCRIBED TO before me on this ~day of July, 2015 .

            ,,uu,,,
      ~~~~~           CELINA DAVILA
        .
      ~:~ ~_.tJ MY COMMISSION EXPIRES
      "'-<~·.?;.;".~~~-: March 22, 2018

My Commission Expires:         3- U . . , 8           Notary Public, State of Texas

Affidavit of John David Hart                                                                 Page 2
                         ........   ·-·--------

                                             CONTRACT NO.GC-13-28

                                                                                     :i
         MASTER SERVICE CONTRACT                                                     [
                                                                                     ~:

          DATED AS OF MARCH 28, 2013                                                 ·.

                 BYANDAMONG

    PENN 'VIRGINIA OIL & GAS CORPORATION,

         PEI\"N VIRGINIA OIL & GAS, L.P .,

       PENN VIRGINIA MC ENERGY L.L.C.

                       AND

NABORS COl\1PLETION & PRODUCTION SERVICES CO.

                                                                        EXHIBIT

                                                              I            A
                                               Nabors MSA (PV cmts   3·28-13).d~

                                                                            PVOG 1
-------------=======-==--===~~~--·----····                                                                                     ..... .

                                                                  TABLE OF CONTENTS

                                                                                                                                                         ·     Page

        I.     WORK OR SERVICES COVERED .............................................:····...........................                                          u   ••• 1
        I~.    WARRANTIES AND OTHER MATIERS REGARDING MANNER OF
               PERFORMANCE OF WORK OR SERVICES ......................... ~ ..........................:......... .".. 2
        III.   RELATIONSHIP OF TI-IE PARTIES ................................................................................ 4
        N.     LAws Al"\lD REGULATIONS ............................................................................................ 5
        V.     IN"SU"RANCEREQUmED ................................................................................................ 6
        \TI.   rnDE1v.Il'-IIFICATION.......................................................................................................... 7
        VII. ENVIRONMENTAL MATIERS .................................................................................... 12
        VIII. FIDELITY......................................................................................................................... 14
        IX.    TERM ...............................................:.. .. ........ ..... ... ... .•. ........ .... ..•.. .. ..... .... .. ................ .. .. .. . 15
        X.     NOTICES .......................................................................................................................... 15
        XI.    ASSIGNMENT ................................................................................................................. 15
        XII. AUTJIORITY OF EXECUTING PARTIES ......................                                                n   ............................................   15
        XIII. AUDIT PROVISION ........................................................................................................ 15
        XIV. APPLICABLE LAW ........................................................................................................ 16
      . if!ol. \VAIVER OF LIEN .......................................................................................................... 16
        XVI. AFF~IA1ED COMPANIES ........................................................................................... 16
        XVII. GONFIDENTIALITY....................................................................................................... 17
        XVIII. ARBITRATION ............................................................................................................... 17
        XIX. MISCELLANEOUS ......................................................................................................... 18

        EXHIBITS
        EXHIBIT "A"                    MINIMUM INSURANCE REQtnREivffiNTS
        EXHIBIT ''Bu                   WAIVER OF LIEN AGREElvlENT
        EXHIBIT "C"                    JOINDER TO MASTER SERV1CE CONTRACT
        EXHIBIT "D"                    ADDITIONAL PROVISIONS

                                                                                                                                                                      PVOG2
                                                                                                          i!
                               MASTER SERVICE CONTRACT                                                    I

                                                                                                          !
         THIS MASTER SERVICE CONTRACT (this "Contract"), made and entered this 28TH                       l.
                                                                                                          r~
day of March, 2013, by and among (i) PENN VIRGINIA OlL & GAS CORPORATION~ a                              ·:
Virginia corporation ("PVOG Corp.',), PENN VIRGINIA OIL & GAS, L.P.:t a Texas limited                     i
partnership ("PVOG LP,~) and PENN VIRGINIA MC EN4RGY L.L.C., a Delaware limited                           ~
liability company e'PVMCE''), herein collectively referred to as "Company'', and (li) Nabors              i
Completion & Production Services Co., a Delaware corporation, herein referred to as                       i·
                                                                                                          I
"Contractor.':t

 IMPORTANT NOTICE: SECTIONS VI AND VII OF THIS CONTRACT
                                                                                                          I
                                                                                                          !.

   CONTAIN OBLIGATIONS TO INDEMNIFY AND RELEASE THE
 OTHER PARTY FOR DAMAGES CAUSED BY ITS OWN NEGLIGENCE,
         STRICT LIABILITY OR OTHER LEGAL FAULT
                                       WITNESSETH, that:

        For and in co:uSideration of the mutual covenants and agreements herein contained and of
the payments which may be made by. Company to Contractor pursuant to the provisions hereof,
the parties hereto mutually agree as follows:                 ·                                            I
                                                                                                           i
I.      WORK OR SERVICES COVERED                                                                           i  l
        A.        This Contract is for operations conducted by (i) PVOG Corp. in        Kentucky~·            i
                                                                                                              i
Mississippi, New Yor~ Pennsylvania, Virginia and/or West Virginia, (ii) PVOG LP in Louisiana                  !

and/or Texas and (iii) PVMCE in Oklahoma and/or Texas. For the purposes of this Contractt the
term "Company'~ shall refer to the applicable Company entity that requests that Contractor                !
perform work or services as set forth in Section I(B) of· this Contract. Contractor shall be in
privity of contract with respect to specific work or services only with the Company entity
requesting sucli work or services. The liability of each Company entity under this Contract shall             :.
be several, and not joint. Accordingly, the obligationS, representations, covenants and
ag1:ee1nents of each Cmnpany entity under this Cont1·act are several and relate only to the work or
services requested by such Company to be performed by Contractor under this Contract.

        B.      Company desires to establish and mait1tain an approved list of contractors and to
offer work or contracts only to those contractors who are included on such approved list. It is
contemplated that, from time to time during the term of this Contract, Company may request~
either orally or in 'Writing, that Contractor perform work or render services for the benefit or
account of Company. In the event that Contractor agrees to undertake the perfonnance of such
work or services for Company, the~ in each instance, the designation of work or services to be
performed and the consideration to be paid by Company to Contractor shall be as agreed by the
parties in writing and incorporated herein by reference; provided, however, that: (i) the
provisions of this Contract shall govern and be fully applicable to the performance of all such
work <;>r services and the relationship of the parties relating to or arising out of the performance
of such work. and services shall be controlled and regulated hereby; and (il) in the event of a
dispute or conflict between this Contract and any Wiiting (including, without limitation, any

                                                  1

                                                                                                 PVOG3
work order, work ticket, manifest or other vvriting between the parties) entered into or executed
subsequent to the date first set forth above, this Contract shall govern in all instances. In the
event that there is no written agreement on pricing between the parties, then pricing will be at the       i
rates agreed to· at the time such services are provided. However, any work or services provided            r
by Contractor to Company shall be governed by this Contract even if no such writirig is                    l
generated. This Contract shall become effective the date first hereinabove Wlitten and shall               !
supersede all prior service contracts between the parties hereto witli respect to new work· or             l
services commenced during the term of tllis Contract to be performed in cmmection with this
Contract.                                                                ·
                                                                                                           I
                                                                                                           i
        C.     The words "work" and Hservices", as used herein, contemplate any business
activity of Contractor which requires that its employees, servants, agents or representatives, or
the employees, servants, agents or representatives of its subcontractor(s), enter upon or utilize
any property or premises owned (in whole or in part), leased or operated by Company or which
requires that Contractor or its subcontractor(s) construct, install, recondition, 1naintain or repairt
for the benefit of Company, any propetty owned (in whole or in part), leased or operated by
Company. All work or services will be subject to the availability of excess personnel and
equipment at Contractor's facility in the area such services are to be provided.

      D.      Tlus Contract does not obligate Company to order or request any work or services
from Contractor, nor does it obligate Contractor to accept orders or request for work or services
                                                                                                           ,.'
from Company, but this Contract shall govern the parties' rights and obligations concerning all
work or services provided by Contractor to Company.

II.     WARRANTIES AND OTHER MATTERS REGARDING MANNER OF
        PERFORMANCE OF WORIC OR SERVICES

        Contractor warrants as follows:

       A.      Contractor will perform, and will cause its subcontractors to perfom1, all work or
services contemplated by this Contract with due diligence and in a good, workmanlike and
timely manner) all in strict conformity with the specifications of Company, generally accepted
industry pt•actices, all Laws (as defined in Section N(A)) and this Contract The term
"worlananlike manner" means services performed in a manner deemed proficient by those with
the speciallmowledge, training and experience to judge such. services.

       B.      Contractor shall furnish, at its sole expense and risk, all necessary personnel,
equipment, materials, tools, supplies, expertise and supervision reasonably necessary for the safe
performance of the work or services. Contractor !las adequate equipment in good working order
and adequate numbers of fully trained personnel capable of safely operating such equipment and              I

performing the work or services. Contractor shall test its equipment to ensure the same is in good
working order prior to delivery" to the work site and regularly conduct training and safety programs
for such personnel. Contractor shall not employ in any work for Company any employee whose                  r
employment violates any labor, employment or other applicable Laws. Contractor shall not                    r
employ in any workfor Company any employey who is a minor.

                                                   2

                                                                                                   PVOG4
        C.      All Contractor supplied products and equipment shall meet Company's
specifications with respect to the services for which such products an4 equipment are used. All
such products and equipment shall be selected and used with good oilfield practices for their
respective purposes and shall be in good working condition and free from defects in design}           .·
workmanship and nmterials and shall comply with all Laws. Any portion of the work found               i
defective or unsuitable shaH be removed, replaced or corrected by Contractor without additional
cost or risk to Company. ·contractor agrees to hispect ~ll materials arid· equipn1ent furnished by
Company directly employed in the course of operations conducted hereunder and shall notify
                                                                                                      I
                                                                                                      l

Company of any defects therein before using such materials and equipment. Should Contractor
use such materials and equipment without notifying Company of any defect, Contractor shall be         I
                                                                                                      1
deemed to have assumed all risk and liability for any mishap that may occur in the operations
conducted hereunder by reason of failure or defect in such materials and equipment. Unless
otherwise stated in writing, the risk of loss remains with Contractor until Company has care,
custody and control of such products, equipment or other goods; provided, however-; that title to
such products shall pass upon delivery of such products to Company. Contractor shall provide
Company and its other applicable subcontractors all Material Safety Data Sheets applicable to all
products, equipment and other goods delivered to Company>s work site. Contractor agrees to            •.
maintain its equipment in good opet·ating condition at all times and shall use all reasonable
means to control and prevent fires and blowouts, protect the hole and protect Con1pani•s
property, equipment and other goods. If Contractor provides rental products or equipmen~ such         r
                                                                                                      !
products or equipment shall be (and shall be kept) in good working order and conditio~ shall          !
include all appropriate safety and emissions control devices, shall include all emergency and         i
environmental placards and warnings and ·shall meet Company's specifications with respect to          I·
                                                                                                      !
the services for which such products and equipment are used. All consumable goods provided
by Contractor shall meet the specifications when delivered and for their normal shelf life. For
shelf life, Contractor warrants that the represented quality, composition and effectiveness of the
goods shall not be materially lessened during storage. Tins warranty requires that such stol'age
complies in material respects with the manufacturer's or supplier's recommended storage
conditions and storage period. The product or matel'ial must meet the specifications on the date
of use and on the last day ofi1s shelf life.

        D.     Contractor and its subcontractors and their respective employees, agents and
representatives shall be familiar with and comply with Company's "Health and Safety Policy,
(the "Manual"), a copy of which has been given to Contractor. Contractor agrees to ensure that
its employees~ subcontractors, agents and representatives performing work or services under this
Contract have been supplied wlth a copy of the Manual and shall comply with it.

       E.     Contractor shall comply with (i) Company,s requirements with respect to drug
testing programs under U.S. Department of Transportation regulations (if applicable) and
(ii) Company's -written policies~ if any, concerning a drug free workplace.
                                                                                                          !·
       F.      Contractor shall comply with the requirements of Company for maintaining and               i.
                                                                                                          !
providing daily recol'ds of work or services perf01med under this Contract.
                                                                                                          !
       G.      Contractor shall promptly cure or begin to cure~ if not curable within 5 days) all
defects described in Company's written notices within 5 days of notice from Company. If
Contractor fails to so cure such defects within a reasonable time after being notified, Company

                                                 3

                                                                                              PVOG5
                                                                                                         -·--,
                                                                                                            I~
                                                                                                            ,.
                                                                                                            i
may cure such defects dkectly or through another contractor, vendor or supplier. What is a                  i
                                                                                                            J
"reasonable time" shall depend upon the circumstances~ but in no event shall it exceed thirty (30)          !
                                                                                                            l.
                                                                                                            :•
days. Within thirty (30) days after receipt of a written invoice, Contractor shall reimburse                 l
                                                                                                             i!
Company for the reasonable cost of sttch warranty work; provided> that, the ammmt of such                    I

waiTanty work is uncontested by Contractor. Contractor shall not be required to pay such                     i
                                                                                                             Il
amount if Contractor is disputing its warranty obligation in good faith and has provided notice of           I
such dispute in writing to Company within 10 business days of Company, s written notice to a
Corporate Officer of Contractor of the defect with sufficient detail in Company's notice to
                                                                                                            I
provide Contractor the ability to understand the location of the defect, the general estimated
amount of the rein1bursement required, the location and date such defective work was performed
                                                                                                            lj·
                                                                                                             i
and that such notice references that there is a limitation of 10 business days for Contractor to             !
respond per the provisions of this Contract. The provisions of this Paragraph G shall be subject             i
                                                                                                             !~
to Article I, Paragraph C above.                                                                             =·l·
                                                                                                             i
                                                                                                             !·
       H.       In addition to Contractor's walTanties, Contractor shall obtain, to the maximum              F.
extent reasonably possible, assignable warranties from its subcontractors, vendors and suppliers             ~
that are no less f-avorable than the general product warranty and general service warranty provided
herein. Whatever warranty is obtained, however, shall be assigned to Company. If no formal
assignment is made, such warranties shall be deemed assigned when the applicable services
hereunder have been performed. If the foregoing warranty is breachec4 Contractor, if necessary to
                                                                                                            liI
                                                                                                             i
enforce the warranty, shall accept return of the goods and present the manufacturer or supplier with         I
a demand that the warranty be honored.                                                                       !

       I. EXCEPT AS IS OTHERWISE EXPRESSLY PROVIDED PURSUANT TO THE                                          !
TERMS OF THIS CONTRACT, GONTRACTOR MAKES NO WARRANTY OF ANY KIND,
EXPRESS OR IMPLIED (INCLUDING) WITHOUT LIN1ITATION, IMPLffiD
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE),
                                                                                                             !
REGARDING THE MATERIALS SUPPLIED BY AGREEMENT OR WORK PERFORMED
BY CO:NTRACTOR.

Ill.   RELATIONSHIP OF THE PARTIES

        A.     It is expressly understood that Contractor shall perform work or services as an
independent contractor, wltl1 the authority and right to direct and control all of the details of the
work. Company shall exercise no control over Contractor's employees, servants, .agents or
representatives, nor those of its subcontractor(s), nor the methods or means employed by
Contractor in the performance of such work or services, Company being solely interested in the
attainment of tl,.e desired results. Compa11y shall only have the right of inspection and
supervision in order to secure the satisfactory completion of the work or services. Contractor is
not authorized to enter into or commit Company to any agreements or contracts, and Contractor
shall not represent itself as the agent or legal representative of Company.

       B.     In all cases where Contractor's or its subcontractors' employees (defined to
include, without limitation, direct, borrowed, special or statutory employees) are subject to the
Louisiana Worker's Compensation Act~ La. R.S. 23.:1021 et seq., the parties agree and recognize,·
and Contractor stipulates, that all work and operations pe1fonned by Contractor and its
employees pursuant to this Contract and any orders are an integral part of and are essential to the

                                                  4

                                                                                                 PVOG6
                                                                                                           i
  ability of Company to genetate Company's goods, products and services for purposes of La. R.S.           j
  23:1061 (A)(l). Furthermore, the Parties agree and recognizet and Contractor stipulates, that
  Company is the principal or statutory employer of Contractor's employees for purposes of La.
                                                                                                           L
  R.S. 23:1061 (A)(3) and Company shall be entitled to the protections that are afforded a stattttory      f
                                                                                                           !

  employer.under Louisiana law. In·espective of Company's status as the statutory employer or              i
                                                                                                           i
                                                                                                           I'
  special employer [as defined in La. R.S. 23:1031 (C)] of Contractor's employees) Contractor
  agrees to remhln solely and primarily responsible for the payment of Louisiana Worker's
  Compensation benefits to its employees and shall not be entitled to seek contribution for any
                                                                                                           i
                                                                                                           i
  such payments from Company. Contractor and/or Contractor's insurers agree that they shall
  have no right to seek, and shall not seek, any contribution or indemnity from Comp~y for any
  compensation benefits paid by Contractor and/or its insurers.
                                                                                                           !
          C.      In all cases where Contractor, s or its subcontractors 2 employees are covered by
  the Longshore and Harbor Wo1·kers' Compensation Act, the parties agree and recognize, and
  Contractor stipulates, that all work and operations perfonned by Contractor and its                      1-
                                                                                                           i
  subcontractors and its and their employees pursuant to this Contract are an integra[ part of and
                                                                                                           ~.
  are essential to the ability of Company to generate Company's goods and services at Company's            :.
  work site for the duration of the project pursuant to Company's health and safety policies, that         f.
  Company is the temporary or special employer of such employees for purposes of the Longshore
  and Harbor \Vorkers, Compensation Act, that Company may direct such employees beyond
  necessary cooperation but not to the extent of control required by the doctrine of respondeat
  superior, that remuneration received by Contractor from Company for services rendered will be
  used directly or indirectly to pay such employees and that Contractor will remove any of such
  employees from the project and replace· the same when required by Company. Claims made
  against Company by such employees of Contractor or its subcontractors based upon the doctrine
  of"borrowed. servant" shall, for the purposes of Longshore and Harbor Workers' Compensation
  Act insurance of Contractor, be treated ao;; a claim arising under said insurance against Contractor
  or its subcontractor as the case may be, and Company shall have benefit of said insurance to that
  extent. Irrespective of Company's status as the tempoiary or special employer of Contractor's or
  its subcontractors' employees) between Contractor and Company, Contractor agrees to remain
~ primarily responsible through its or its subcontractors' insurance for the payment of benefits
  under the Longshore and Harbor .workers' Compensation Act to its employees and its
  subcontractors" employees and Contractor and its subcontractors and its and their insurance
  carriers shall not be entitled to seek contribution for any such payments from Company.

  IV.     LAWSANDREGULATIONS

          A.     In oonnection with the performance of work and services contemplated by tills
  Contract, Contractor agrees to comply with all laws, statutes, rules and regulation.S, Federal,
  State, County/Parish and Municipal, which are now, or during the term of this Contract may be,
  applicable to its business, equipment and employees engaged in, or in any manner connected
  with, Contractor's performance of work or services for Company (collectively; "Laws,),
  including, but not limited to, Laws pertaining to protection or conservation of the air~ land, water,
  human health, industrial hygiene or other aspects of the environment, including, without
  limitatio~ the following statutes, as supplemented       and  amended: the Clean Air Act, the
  Comprehensive Environmental Response, Compensation and Liability Act, the Federal Water
  Pollution Control Act, the Solid Waste Disposal Act, the Resource Conservation and Recovery

                                                    5

                                                                                                   PVOG7
.........----·-·-·---:-----------·-··

          Act, the Safe Drinking Water Act, the Toxic Substances Control Act~ the Hazardous Materials
          Transportation Act, the Federal Oil Pollution Act of 1990) Articles 15, 17, 27 and 40 of the New
          York State Envirorunental Conservation Law; Article 12 ofthe New Yol'k State Navigation Law,
          the Pennsylvania Solid Waste Management Act, 35 P.S. § 6018.103) and any other comparable
          federal~ state or local laws, statutes; ordinances and codes and the rules, regulations; policies,
          guidelines, interpretations, decisions~ orders and directives of federal, state and/or local
          governmental ·agencies 'and authorities with ·respect thereto (collectively, "Environmental
          Laws,').

                  B.      In particular, Contractor shall fully comply with the following statutes and
          executive orders as well as the regulations, orders and rules promulgated under suclJ. statutes and
          executive orders, where required by applicable Laws, and such statutes and executive orders, as
          they may be hereafter amended, are hereby inco:rporated in this Contract by reference as if fully set
          out: (1) Equal Opportunity Clause (Applicable to aU work or purchase orders in excess of $10,000,
          41 CFR 60-1.4); (2) Affrrmative Action Compliance Programs (Applicable to work or purchase
          orders of $.50,000 or more and if Contractor has 50 or more employees, 4 I CFR 60" 1.40);
          (3) Equal Employment Oppottunity Reporting Requirements (Applicable to work or purchase
          orders of $50.,000 or more and if Contractor has 50 or more· employees, 41 CFR 60-1.7);
          (4) Affirmative Action Regarding Individuals with Disabilities (Applicable to work or purchase
          orders of$2,500 or more, 41 CFR 60~741); (5) Employment of Disabled Veterans and Veterans of
          the Vietnam Era (Applicable to work or purchase orders of $10,000 or more, 41 CFR 60-250);
          (6) Utilization of Minority Business Enterprises (Applicable to work or purchase orders of $10,000
          or more~ 41 CFR 1-1.13); (7) Utilization of Small Business Concerns (Applicable to work or
          purchase orders of $10,000 or more, 41 CFR 1-1.710-3); (8) Utilization of Labor Surplus Area
          Concerns (Applicable to work or purchase orders of $10,000 or more, 41 CPR l~I.805-3(a));
          (9) ~mority Business Enterplise Subcontracting, Small Business Subcontracting and Labor
          Surplus Area Subcontracting Programs (Applicable to work or purchase orders of $500,000 or
          more, 41 CFR 1-1.1310-2(b), 1-1710-3(b), 1-1.805.3); and (10) Clean Air and Water (Applicable
          to work or purchase orders of $100,000 or more, 40 CFR 15.4 and 15.5, 41 CFR 1-1.2303). If
          Company is required to pay any fine or penalty resulting from Contractor,s failure to comply with
          applicable Laws and/or Environmental Laws, then Contractor shall :immediately reimburse
          Company for such payment.

                 C.      Contractor certifies that it does not and will not (i) maintain or provide for its
          employees any segregated facilities at any of its establishments and (ii) permit its employees to
          perform their services at any locati.on, under its control, where segregated facilities are
          maintained. Contractor agrees that it will obtain identical certifications from proposed
          subcontractors.

          V.      INSURANCE REQUIRED

                 A.     Contractor and Company each agrees to procure and maintain at its sole ex.pense
          during the entire term of this Contract the policies of insurance in the specified minimum
          amounts set forth in Exhibit "A" attached hereto and made a prot hereof. Such insurance shall
          support each party's ·indemnity obligations to the other and other potential liabilities hereunder.

                                                            6

                                                                                                           PVOG8
             ··-- ··;·-· ...-----....   ·---~·-··-------   ...                                 ·---········--··-~-,

                                                                                                                 f
                                                                                                                 i

        B.       Prior to the commencement of any work or· senrices contemplated by this
 Contract, Contractor shall furnish to Company certificates, in duplicate~ on a fmm acceptable to
 Company, signed by an authorized representative of the insurance companies providing the
.coverage, evidencing ~ coverages, extensions and limits requh·ed to be carried by Contractor
 under the provisions of this Contract. Upon request, Company sball.have the right to examine or
 inspect the originals or certified copies of such insurance policies in the offices of Contractor
 during its rionnal business hours. ·                     ·                       ·

        C.     Failure to secure the insurance coverages, or the failure to comply fully with any
of the insurance provisions of this Contract, shall in no way act to relieve any party from the
obligations of this Contract, any provisions hereof to the contrary notwithstanding. Jf a party
fails to maintain any of the insurance herein required, such party shall release~ protect, defend,
indemnifY and hold harmless the other party's Group~ including their insurers, from and against
any and all Claims (as defmed in Section VI(A))7 which would otherwise be covered by such
insurance. Unless expressly stipulated to the contrary herein, a party's indemnification
obligations under this Contract (express or implied) shall not be limited to the amount or scope
of coverage provided by the insurance which is required to be maintained by such party under
the terms hereof. "Group" means Company Group or Contractor Group, as applicable (each as
defined in Section VI(A)).

       D.      Contractor shall require all of its subcontractors to secure and maintain the
insurance described in Exhibit "A".

VI.     INDEMNIFICATION

        The parties recogniZe that in connection with th~ petformance of the work or services
and/or the provision of goods) equipment and facilities contemplated. by this Contract, there is
some risk that accidents and events may occur in which property is lost, damaged or destroyed
and/or in which persons may be ldlled or injured. Th.e parties desire to allocate these risks
between them and to require that these risks be adequately insured so as to minimize the
possibility of disputes and to engage in effective risk management For these reasons, the parties
agree to the indemnities and defense obligations set furth below.

        A.      Mutual Release, Defense and Indemnity.

               1.       Cmnpany Group shall not be liable for and Contractor agrees to release,
protect, defend) indemnify and ~old harmless Company Group from and against any and all
claims, damages, liabilities, losses, demands, liens, encumbrances, causes of action of any kind
(including, without limitation, actions in rem or in. personam (civil or criminal) and those
concerning personal injury, death or property loss or damage), obligations) costs (including,
without limitation, l'easonable attorney 7 s fees), judgments, interest and awards, whether created
by law, contract, tort, or otherwise (collectively, '~Claims'') for personal injury, illness> death,
property (whether real or personal) owned or leased) damage and loss arising out of or resulting
from the performance of this Contract or any breach hereof by any member(s) of Contractor
Group suffered by any member(s) of Contractor Group (including Claims of spouses, heirs,
survivors or legal representatives, successors and assigns of any member(s) of Contractor
Group)t even if such are contributed to or caused by the sole, joint, comparative,

                                                                 7

                                                                                                PVOG9
                                                                                   -~-..-r- ....· - - - - · -.. ·-·~·· -~··.,........._-·~

                                                                                                                                       t

concurrent, active or passive negligence or g-ross negligence of any mcmber(s) of Company
Group. The release, protection, defense~ indemnity and hold harmless obligations assumed by
Contractor, ~nd the limitatiol].s afforded Company Group, in this Section VI(A)(l) include any
liab~lity for employment .discl'imination, medical, compensation or other benefits owed to
employees of Contractor Group as a result of the direct employ1nent relationship of such
individuals with a member of Conil:actor Group even if such individuals are determined to be the
bon:owed or statutory employee of any inember(s) of Company Group. "Company· GrouJl"
                                                                                                                                       li.
means Company, its contractors (other than Contractor and its subcontractors of any tier),.
subcontractors) co..interest owners, joint venturers, co~lessees and invitees~ and its/their affiliates,
                                                                                                                                       r:
                                                                                                                                        1
                                                                                                                                        t
shareholders, partners, members, officers, directors, employees (including the Company                                                  I

representative at the work site whether a consultant or not), agents, consultants, servants and                                        l
insurers.                                                                                                                               !:
                                                                                                                                        ~=
                                                                                                                                        ;
               2.     Contractor Group shall not be liable for and Company agrees to release,
protect) defend1 indemnify and hold harmless Contractor Group from and against any and all                                              rr
Claims for personal injury, illness, death, property (whether real or personal, owned or leased)                                        ::.
                               of
damage and loss adsing out or resulting from the performance of this Contract or any breach
                                                                                                                                        ..~
hereof by any member(s) of Company Grortp suffered by any member(s) of Company Group
(including Claims of spouses, heirs, survivors or legal representatives, successors and assigns of
any n-~ember(s) of Company Group)) even if sueh are contributed to or caused by the sole,
joint, comparative, concurrent, active or passive negligence or gross negligence of any                                                 II
member{s) of Contractor Group. The release, protectio~ defense, indemnity and hold                                                      !
harmless obligations assumed by Company, and the limitations afforded Contractor Group~ in                                              I
                                                                                                                                        !

this Section VI(A)(2) include any liability for employment discrimination, medical,                                                     r
compensation or other benefits owed to employees of Company Group as a result of the direct
employment relationship of such individuals with a member of Company Group even if such
individuals are determined to be the borrowed or statutory employee of any member(s) of
                                                                                                                                        I.
Contractor Group. ('Contractor Group'' means Contractor, its contractors and subcontractors, co-
interest owners, joint venturers, co-lessees and invitees, and its/their affiliates:. shareholderst
partners, members, officers, directors, employees, agents, consultants, servants and insurers.                                          :·

        B.      Indemnification: Savings Clauses

                1.    The indemnities in this Contract shall only be effective to the maximum
extent pennitted by applicable 'Laws. If any Law is enacted in any state that limits in any way
the extent of which indemnification may be provided to an indemnitee and such Law is
applicable to this Contrac4 then this Contract shall automatically be amended to provide that the
indemnification provided hereunder shall extend only to the maximum extent permitted by the
applicable Laws, but shall extend to such maximum extent.

               2.      In the event that this Contract is interpreted under the Laws of the State of
Texas for a particular occtmence, then Sections VI(A)(l) and VI(A)(2) shall apply, but for the
purposes of Title 6, Chapter 127 of the Texas Civil Practice and Remedies Code, commonly
known as the Texas Oilfield Anti ..Inderonity Act, the indemnity and insurance provisions of this
Contract applicable to properly damage and the indemnity m1d insurance provisions· applicable to
personal injury, bodily injury and death shall be deemed separate for interpretation,·enforcement
and other purposes. All indemnities in this Contract shall only be effective to .the maximum

                                                    8

                                                                                                           PVOG 10
                                                                                                           i

extent permitted by applicable Laws. If the Laws of the State of Texas gove1n this Contract,               [.
then Contractor and Company incorporate Title 6) Chapter 127 of the Texas Civil Practice ru).d            ·'t
Remedies Code (Texas Oilfield Anti-Indemnity Act) and agree to the limits of that statute.                 r~
                                                                                                           ::.
         The parties will each support their respective mutual indemnity obligations by furnishing         iI
liability insurance coverage (or qualified selfwinsurance) of the types set furth above obtained by
each of the parties for the benefit of the other party and its respective Group as indemnitee(s).          I·

        The parties will each support their respective ·unilateral indemnity obligation by
                                                                                                           I·
                                                                                                           \:\
furnishing liability insurance coverage (or qualified self-insurance) of the types set forth above in
                                                                                                           '
the applicable statutory amounts.                                                                          '

        If the foregoing provisions do not meet the criteria for either a mutual or unilateral             '•

indemnity obligation under such statutory provision) then the same shall be modified by the court
to the extent necessary to so comply.

              3.      In the event that this Contract is interpreted under the Laws of the State of
Louisiana for a particular occut1·ence, then Sections VI(A)(l) and VI(A)(2) shall apply, but for
the purposes of La. R.S. 9:2780, commonly known as the Louisiana Oilfield Anti-Indemnity Act,
the indemnity and insurance provisions of this Contract applicable to pr-operty damage and the
indemnity and insm·ance provisions applicable to personal injury, bodily injury and death shall
be deemed separate for interpretation, enforcement and other purposes. All indemnities in tlrls
Contract shall only be effective to the maximum extent pennitted by applicable Laws. If the
Laws of the State of Louisiana govern. tlrls Contract~ then Contractor and Company incorporate
La. R.S. 9:2780 (Louisiana Oilfield Anti-Indemnity Act) and agree to the limits of that statute.               ::

For any services for wl1ich such statute would apply, Company agrees that it will, on behalf of
Company Group, pay the premium for the extension of Contractor's insurance to cover Company
Group as an additional insured to the extent of the liabilities assumed by Conh·actor herein, and
Contractor agrees that its insurers will ilwoice Company the premium for such extension of
coverage in favor of Company Group. Contractor warrants that such premium shall constitute all
material costs for such extension of coverage. At each subsequent renewal, Contractor shall
advise Company as respects the amount for the premium required fur such extension of coverage
and shall acrange to have Company billed for the material costs of the premium for such
extension of coverage to Company Group. For any services for which such statute would apply,
Contractor agrees that it will, on behalf of Contractor Group, pay the premium for the extension
of Company,s insurance to cover Contractor Group as an additional insured to the extent of the
liabilities assumed by Company herein, and Company agrees that· its insurers will invoice
Contractor the premium for such extension of coverage in favor of Contractor Group. Company
warrants that such premimn shall constitute all material costs for such extension of coverage. At
each subsequent renewal, Company shall advise Contractor as respects the amount for the
premium required for such extension of coverage and shall arrange to have Contractor billed for
the matetial costs of the premium for such extension of coverage to Contractor Group.

               4.     In the event that New York General Obligations Law§ 5-322.1, W.Va.
Code § 55-8-14 or any other or similar Law purporting ·to limit indemnity obligations in
construction or similar contracts, is found to be appl!cable with respect to this Contract or any
services provided hereunder, then this Section VI is hereby modified to the extent necessary for

                                                  9

                                                                                                PVOG 11
                                                                         ~~--      .......,...._ _ _ _ _ _...;.--*'-"":"'---:."'--:""·----~

                                                                                                                                        !
                                                                                                                                        f.·

                                                                                                                                        .·..
compliance with and enforceability under such Law or Laws. Notwithstanding the foregoing,
however, no modification of this Section VI pursuant hereto shall cause any change to or
modification of the liability insurance coverage required by Section V or Exhibit A hereto, which
cove.rage Contractor confinns and agrees to ensu~e shall continue to fully support Contractor's
indemnity obligations above as and to the full extent set forth in this Contract.                                                        '
                                                                                                                                         i

       c; · Indemnity Not Altered by Third Party Obligations
                                                                                                                                        I
                                                                                                                                        !
        All indemnities in this Contract shall apply even though an insurer or other person or                                          !
                                                                                                                                        !•
entity is required to pay for any Claim or to make a contribution to such Claim. Even though
insurance may be arranged or other persons or entities may have certain liabilities or obligations,                                      !
each party hereto remains responsible for its indemnity and other obligations under this Contract,
even if such insurer or such other person or entity, for any reason, does not pay.

       D.      Third Party Liability

                1.      Except as provided in this Contract to the contrary, Contractor shall
release) protect, defend, indemnify and hold harmless COJ.l!.pany Gl.'oup for personal injury,
illness, death, property (whether real or personal or owned or leased) damage and other loss to
the extent that third party claims arising out of or resulting from the performance of this Contract
are contributed to or caused by the negligence, gross negligence or willful or wanton misconduct
of any member(s) of Contractor Group.                                    ·

               2.     Except as provided in this Contract to the contrary, Company shall release,
protect, defend, indemnify and hold harmless Contractor Gl·oup for personal injury, illness,
death, property (whether reaL or personal or owned or leased) damage and other loss to the extent
that third party claims arising out of or resulting from the performance of this Contract are
contributed to or caused by the negligence, gross negligence or willful or wanton misconduct of
anymember{s) ofCompany Group.

                3.      For the ptuJ1oses of this Section VI, the plu:ase "arising out of or resulting
from the p~rformance of tlrls Contract" shall be broadly construed to include, but not be limited
to, not only formal work) but also any occurrences at the work site, including transportation to
and from the work (other than personal or public transportation to· the work site), breaks,                                                  ;·.

recreation, rest periods and any other presence at the wor~ site.

       E.       Consequential Damages                                                                                                        f:
        Notwithstanding anything to the contrru·y in this Contract, neither party shall be liable to
the other for special, indirect or consequential damages, including, without limitation, loss of
use, loss of data, loss of assets, loss of business, loss of profit or business interruptions, resulting
from or arising out of this Contract, however same may be caused and regardless of the sole,
joint, comparative, concurrent, active or pa8sive negligence or gross negligence of the other
party. In no event, however, shall the provisions of this Section VI(E) limit the indemnities
given in. this Contract with respect to actions bl'ought by third parties.

        F.      h1tellectual Property

                                                   10

                                                                                                            PVOG 12
=..,._......,...__ _ _ _ _ _ _..........,._ _ _ _ _ _"""':.~..:-:". ..._,.....:-'.""l.'=""=......,..-·   ---~~-~~--------·--·-··   ...
                                                                                                                                                   "··-·----.-~

                                                                                                                                                             l

                                                                                                                                                             !·

                           Contractor shall indemnify, defend and hold harmless Company from and against any
                   and all Claims arising from or by reason of any infringement or alleged infringement of any
                   patent, trademark, copyright or other like right protected by law in respect of any property~
                   equipmell,t, services, work) methods ot process furnished or used by Contractor in connection
                   with this Contract.                                                        .

                             G.        Radioactivity, Wild Well, ReserVoir Damage, and Subsurface Trespass

                          Contractor Group shall not be liable for and Company agrees to protect, defend,
                   indemnifY, and hold harmless Contractor and its subcontractors from and against any' and                              all
                   claims for personal injury, illness, death~ property (whether real or personal,. owned or leased)
                   loss and damage, excluding that suffered by any employee of Contractor or its subcontractors,
                   incidental to or resulting :from (a) radioactivity where the release is caused, in whole or in part,
                   by conditions or events below the rotary table~ (b) loss of well control ("a wild well"), including
                   (without limitation) the costs of controlling a .wild well) (c) reservoir or underground damage,
                   including (without limitation) the costs of oil, gas, other mineral substances, water, and the well
                   bore, and (d) subsurface trespass or any action in the nature thereof, even if the Claims are
                   contributed to or caused by the sole, joint, comparative, enncurrent, active or passive
                   negligence of any n1ember(s) of Contractnr Group.

                             H.        General

                          'VITHOUT LIMITING TI~ GENERALITY OF THE FOREGOING, THE
                   PARTIES EXPRESSLY·ACI, "restricted hazardous waste'\ "infectious
waste", "toxic substances") or any other tenn or expression intended to defme, list or ·classify
~ubstances by reason of properties harmful to health, safety or the indoor or outdoor env1ronment
(including hannful properties such as ignitabillty, corrosivity, reactivity, carcinogeni~ity,
toxicity, reproductive toxicity, "TCLP toxicity, or "EPA toxicity" or words of similar import
under any applicable Environmental Laws);

                       (ii)        any oil, petroleum, petroleum fraction or petroleum derived
substance;

                     (iii) any drilling fluids, produced waters and other wastes associated
with the exploration, development or production of crude oil) natural gas or geothennal
resources;

                       (iv)        any flammable substances or explosives;

                       (v)         any radioactive materials;

                       (vi)        any asbestos~containing materials;

                       (vii)       urea formaldehyde foam insulation;

                      (viii) electrical equipn1ent which contains any oil or dielectric fluid
containing polychlorinated biphenyls;

                       (ix)        pesticides; and

                        (x)   any other chemical, material or substance, exposure to which is
prohibited, limited or regulated by any governmental authority or which may or could pose a
hazard to the health and saf-ety of the owners, occupants or any petsons in the vicinity of any
WOlic site or to the indoor   or
                             outdoor environment:                      .                      .

                                                     13

                                                                                              PVOG 15
                                                                                                         i·.·
                                                                                                         ~·.
                4.       In conducting its operations hereunder, Contractor agrees to comply with        i.
all Environmental Laws. Contractor agrees to report to Company, as soon as reasonably
practicable, all the details of every environmental upset or spillage and to fully cooperate in all
clean up and reclamation activities by providing .labor and equipment ~n order to restore and
protect the environment. Clean up and reclamation activities by Company Group shall not
relieve Contractor of its duties or liabilities under this Contract Contractor shall reimburse
·company Group for all such costs l'elated to clean up and reclamation by Company Group to the
 extent that such risk is allocated to Contractor herein.

       C.      General

       WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THE
PARTIES EXPRESSLY ACICNOWLEDGE AND AGREE, AND HEREBY INTEND TO
CLEARLY AND UNEQUIVOCALLY AFFIRM, THAT THE APPLICATION OF THE
PROVISIONS OF TillS SECTION VII MAY INVOLVE (I) INDEMNIFICATION FOR
CLAIMS/LOSSES DUE TO THE INDEMNITEE'S OWN NEGLIGENCE, GROSS
NEGLIGENCE, STRICT LIABILITY OR OTHER FAULT, AS WELL AS
(II) INDEMNIFICATION FOR CLAIMS/LOSSES DUE TO THE NEGLIGENCE OF
OTHERS (i.e., TIDRD PARTIES). BOTH PARTIES AGREE THAT TillS STATEMENT
COMPLIES WITH THE REQUIREI\1ENT~ KNOWN AS THE "EXPRESS
NEGLIGENCE RULE," TO EXPRESSLY STATE IN A CONSPICUOUS MANNER
THAT ONE PARTY (I'HE INDEMNITOR) HAS RESPONSIDILITY FOR THE
NEGLIGENCE, GROSS NEGLIGENCE, STRICT LIABILITY OR OTIIER FAULT OF
ANOTHER PARTY (THE INDEMNITOR}.

Vill. FIDELITY
        Neither Contractor nor any of its subcontractors perfonning work or services hereunder
shal1 pay any commissions or fees or grant any rebates or other remuneration or gratuity to any
employee, dil'ector, agent or representative of Company m· to any member of the immediate
family of any of the foregoing persons. Neither Conu:actot nor any of its subcontractors
performing work or services hereU.nder shall pay any commissions or fees or grant any rebates or
other xemtmeration or gratuity to any employee, director, agent or representative of the other or
to any member of the imn1ediate family of any of the foregoing persons. Gifts of nominal value
and entertainment) meals and social invitations that are customary and proper under the
circumstances and do not place the recipient under obligation are acceptable. If any employee of
Company should soli9it a gift or gratuity from Contractor) then Contractor hereby agrees to
notify an officer of Company of such act, and Company agl'ees to hold such notification in
confidence. Failure by Contractor to comply with this Seciion VIII may, at the Company's
option, result in the termination of this Contract and may preclude any :further dealings between         !.
the parties. Company ~hall have the right to inspect and audit all records of Contractor, of
whatsoever nature, relating to ~y gifts or gratuities :fu:rtrlshed to any member of Company Group
at any time, and from time to time, while this Contract remains in effect and for a period of
two (2) years ther~after.

                                                 14

                                                                                               PVOG 16
 IX.     TERM
          This Contract shall have a term of one (1) year from and after the date hereof and shall
  continue. in full force and effect thereafter, on a year-to-year basis, unless sooner tenninated by
  the parties as hereinafter provided. It is understood and agreed, however, that either party hereto
  may tenninate this Contract at any tune by giving the other party at least thirty (30) days' prior
· written notice of such termination and that Company may terminate this Contract immediately if
  Contractor is in breach of any of the terms hereof. Notwithstanding the foregoing~ (i) the
  provisions of Sections II~ VI, VII) XITI, XIV, XVII, XVIII and XIX and Exhibit "D, shall
  survive the tennination of this Contract, and (ii) all of the tetms and conditions hereof shall
  survive the tennination of this Contract for all completed and cun·ent orders.

 X.      NOTICES

         Any and all notices req~1ired or permitted to be given hereunder shall be deemed to have
 been properly given when delivered via Federal Exp1·ess or similar courier, via telecopy to the
 address shown on the signature page hel'eto or via mail addressed, postage prepaid, to the
 add!'esses shown on the signature page hereto. Either party may change its address shown by
 giving written notice thereof to the other party.

 XI.     ASSIGNMENT
         Contractor may not alienate, transfer or assign any rights hereunder to any third party
 without the express mitten approval of Company, which approval may be withheld in
 Company's sole discretion. Any purported assignment without such \Witten approval shall be
 null and void. Except as limited by the foregoing, this Contract shall be binding upon the
 transferees, successors and assigns of the parties hereto.

 XII.    AUTHORITY OF EXECUTING PARTIES

         Each of the persons executing this Contract represents and wan·ants that he or she has full
 right and authority to execute this Contract on behalf of Company or Contractor:~ as the case may
 be, and to bind such party to the fulfillment of all of the provisions hereof.

 XIII.   AUDIT PROVISION

         Contractor shall maintain a tnte and correct set of records pertaining to its performance of
 services hereunder for a period of not less than two (2) calendar years following the end of the
 calendar year in which the final invoice for such services was sent. This two-year period is not a
 limitation on C01npany' s right to atldit. .Any representative or representatives authorized by
 Company may inspect and audit any and all records of Contractor pertaining to the goods and
 services provided under this Contract. Such inspection shall be conducted at Contractor's offices
 during normal business hours after 1·easonable notice. Contractor shall make a good faith effort
 to include a similar audit provision in its subcontracts. Contractor shall promptly reimburse
 Company for any overpayments discovered in the audit, and Contractor hereby waives any
 statute of limitations or laches concerning the same. In addition, all safety, environmental and
 health infonnation furnished by Contractor to Company will be subject to audit and shall be
 retained by Contractor for the same period or as otherwise required by Law.           ·

                                                  15

                                                                                                PVOG 17
XIV. APPLICABLE LAW

        This Contract may govetn goods and services supplied by Contractor to Company in
several different jurisdictions. W~th respect to the selection of the governing law in this
Section XIV, the parties stipulate that certainty of enforcement is an important expectation
negotiated between the parties in entering this Contract. Where any goods or service are to be
provided in a geographic location covered by the General Maritime law, General Maritime law
shall apply and shall govern the validity~ interpretation and perfmmance of this Contract. In
those instances where the General Maritime law does not apply, the Laws· of the State where the
principal work site is located shall apply and govern the validity, interpretation and performance
of this Contract. With respect to any govetning Laws that the parties select, the parties agree that
the Laws of the selected jurisdiction shall apply exclusive of any principles of conflicts of laws
that would require application of the substantive laws of another jurisdiction. References in this
Contract to any Law shall be deemed to include references to such as the same may be amended)
replaced or reenacted fi·om time to time.

XV.    WAIVEROFLIEN

        To the extent pe1.n1itted by Law, Contractor shall not encumber and shall not allow its
subcontractors to encumber Company's property. Whether a claim is valid or invalid) no lien,
privilege, charge or similar encun1brance shall become fixed upon Company) s leases, wells,
equipment, lands., :fixtures) improvements or other property because of the failure of any member
of Contractor Group to be paid for goods or services provided for hereunder. After being
notified ofthe existence of any such lien., privilege, charge or encumbrance, Contractor shall take
all necessary steps to obtain the release of such lien, ptivilege) charge or encumbrance.                 l
                                                                                                          i
Contractor shall ensure that all subcontractors, as a condition of providing work or services for         l

Contractor covered by this Contract, shall execute a Waiver of Lien Agreement in the form set
forth in Exhibit "B', hereto. Contractor shall provide Company with a list of subcontractors}
                                                                                                          r
together with documents evidencing that all laborers, subcontractors and suppliers of mate1ials
and equipment have been paid and are not claiming liens on Company's property for such labor,
services or materials under the provisions of applicable Laws.

XVI.   AFFILIATED COMPANIES

        Affiliates of Contractor may join this Contract (any such joining affiliate, a «Joining
Contractor") by executing a joinder hereto in the fom1 set forth in Exhibit ''C" hereto. and
f01warding it to Company. Any and all references to "Contractorn in thls Contract shall be
deemed to refer to Contractor or any Joining Contractor, as applicable to the particular work or
services performed hereunder. The liability of Contractor and any Joining Contractor under this
Contract shall be severaL) and not joint A.ccordingly, the obligations, representations, covenants
and agreements of Contractor and any Joining Contractor under this Contract are several and
relate only to the work or services perf01med or to be performed by Contractor or such Joining
Contractor under tlus Contract.

                                                 16

                                                                                                PVOG 18
                                                                                                         I~

 XVII. CONFIDENTIALITY                                                                                   i
                                                                                                         !·
                                                                                                         l
         A.     Infom1ation provided by Company to Contractor while performing services                  ~ ..
 (including> without limitation> information·regarding Companyts operations, a well being drilled,       :.!
 or geological· and/or geophysical information, such ·as the depth of a well, the formations
 penetrated, the results of coring) logging, testing and surveying) is proprietary to Company, and
 such information and the existence and terms and conditions of this Contract or any work or
                                                                                                         r
                                                                                                         :·
 services perfonned under this Contract e'Confidential Information'') are confidential. Contractor
 shall use Confidential Information only in connection with the work or services to be performed
 under this Contract, and Contractor shall not divulge Confidential Inf01mation and shall take all
 reasonable steps to assure that Contractor~s and its subcontractors, and their respective officers,
 directors, employeest ~gents, representatives, consultants and subcontractors, will not divulge
 Confidential Information to any person or entity other than Company's representatives.
 Contractor shall safeguard and protect all Confidential Information in its custody or control.
 Contractor's confidentiality obligation shall survive the termination of this Contract for five (5)
 years.

        B.      Contractor agrees that no adequate remedy at law exists for a breach or threatened
 breach of any of the provisions of tlus Section XVII, t11e continuation of which, ·if not remedied)
 will cause the non-breachlng party to suffer irreparable harm. Accordingly, Company and
 Contractor agree that Company shall be entitled, in addition to other remedies that may be
 available to Company, to immediate injunctive relief from any breach of any of the provisions of
 this Section XVII and to specific pe1formance of its rights hereunder, as well as to any other
 remedies available at law or in equity.
                                                                                                          '•.

 XVIII. ARBITRATION
          A.     Any disputes and claims arising out of or resulting from the performance of this
  Contract shall be resolved by binding arbitration, to be held in Housto~ Texas, as set forth
  beJow. If at any time any party shall desire to bring a claim against any the other party, and the
  parties cannot agree upon the resolution of such claim) then such claim shall be referred to a
  board of arbitrators (the "Board"). The Board shall be composed of one representative chosen by
  each party, and a third arbitrator who shall be chosen by the two arbitrators herein provided for.
  Each arbitrator shall be independent of the parties and shall have at least ten (1 0) years
  experience in the oil and gas business. In the event that the two arbitrators are unable to agree
  within ten (1 0) days upon a third arbitrator, then the American Arbitration Association shall
  designate a disinterested person to act as such arbitrator; and, in the event that the Receiving
  Party (as defineQ. below) should, for a period of ten (1 0) days after receipt of an Arbitration
  Notice (as defmed below), fail to select and make known in writing to the Notifying Party (as
  defined below) the arbitrator selected by the Receiving Party> the Board shall be comprised of
. the one sole arbitrator chosen by the Notifying Party. Either party {the ~~otifying Party") may at
  any time serve upon the other (the "Receiving Party,} a notice (an uArbitration Notice") setting
  forth the point or points upon which the decision of the Board is desired and the identity of the
  arbitrator chosen by the Notifying Party. Within ten (1 0) days after the date of such Arbitration
  Notice, the Receiving Party shall deliver a com:iter..notice to the Notifying Party which shall
  identify the arbitrator chosen by the Receiving Party, respond to the claim in the Arbitration

                                                  17

                                                                                               PVOG 19
                                                                                                         !.
                                                                                                         I

                                                                                                         J!
                                                                                                         .•..:
                                                                                                         ~

Notice and specify any additional points or differences arbitrable hereunder upon which the
Receiving Party may desire a decision.

        B.      . Promptly after the coJp.position of the Board has been identified, the Board shall
give the respective parties written notice of the time and place of arbitration hearing, which
hearing must take place .within six (6} months of the date of the Arbitration Notice, The parties
may then commence with and exchange requests for documents in accordance with: Rule .34 of
the Federal Rules of Civil Procedure. No other form of discovery, including, but not limited to,
interrogatories, requests for admissions, or depositions, shall be pe1mitted. The Board (or the
sole arbitrator, as the case may be) shaH conduct the arbitration heru..ing for as long as the Board
deems reasonably necessary and the parties shall be entitled to submit expert testimony and/or
written documentation in such hearing. The Board shall, by majority vote taken within two (2)
days after such hearing> select the position of one party with respect to the claim(s) and notify
both parties in writing of such selection. The decision of the Board (or the soie arbitrator) as the
case may be) shall be final, conclusive and obligatory upon the parties and their successors and
assigns, and without appeal, and each party agrees to abide by and comply with every such
decision. Judgment on the decision of the Board may be entered and enforced by a court of
competent jurisdiction. The costs ofboth parties in connection with any such arbitration shall be
paid by the losing party. Notwithstanding the requirement to arbitrate any dispute, any party
hereto may appty to a court for interim measures, such as injtmctions, attaclnnents and
conservation orders, which measures may be immediately enforced by comt order. Any decision
with respect to such interim measures shall promptly be referred to the Board for review and
final decision.

XIX. :tv1ISCELLANEOUS

        A.      The parties may, by mutual written agreement, amend this Contract in any
respect, and either party, as to such party, may (i) extend the lime for the performance of any of
the obligations of the other party; (li) waive any inaccuracies in representations and warranties
by the other party; (iii) waive compliance by the other party with any of the co:venants or
agreements contained herein ·and performance of any obligations by the other party; and
(iv) waive the fulfillment of any condition that is precedent to the performance by such party of
any of its obligations under this Contract. To be effective, any such extension or waiver must be
in writing and be signed by the party providing such waiver or extension, as the case may be. No
such. extension or waiver by any party, nor any waiver by any Pru:ty of any breach of any
provision of this Contract, shall operate or be construed as a waiver of any subsequent breach,
whether or not similar. No failure or any delay by any pru.ty in exercising any right, power or
privilege under this Contract shall operate as a waiver of such right) power or p1ivilege, and no
single or partial exercise of any such right, power or privilege shall preclude any other or further
exercise of such rigbt, power or privilege or the exercise of any other right, power or privilege.
Except as otherwise 1)rovided in this Contract, the rights and remedies herein provided are
cumulative and are not altel'native.

       B.     The headings, sub-headings and other s~bdivisions of this Contract are inserted
for convenience of reference orily. The parties do riot intend them to be· an aid in legal
construction.

                                                 18

                                                                                               PVOG 20
         C.      All references to cash or monetary amounts refer to U.S. Dollars only unless
specifically stated to be in the currency of anothe1' govennnent. The words Hthls Contract,'~
'~herein,,) "hereby,') "hereundet, and ~'hereof:" and words of similar import, refer to this Contt.·act
as a whole and not to any particular subdivisio11, unless expressly so limited. The wprds "tllis
Article," '~this Section~' and "this subsection," and words of sirnllar import, refer only to the
Articles, Sections or subsections, respectively, hereof in which such words occur. The vvord
"including'~ (in its various forms) means "including without lhnitation., Any reference to any
federal, state or local Law shall be deemed also to refer to all rules and regulations promulgated
                                                                                                             i
thereunder, unless the context requires otherwise. Pronouns in masculine, feminine or neuter                 !·

genders shall be construed to state and include any other gender and words, terms and titles
(including terms defined herein) in the singular fonn shall be construed to include the plural and
vice versa, unless the context otherwise expressly requires. Unless the context otherwise
requires~ all defined terms contained herein shall include the singular and plural and the
conjunctive and disjunctive forms of such defined terms.

        D.     Except for the designation of the work or service to be performed and the
consideration provided for h1 Section I, it is understood and agreed between the parties hereto
that this Contract constitutes the sole and complete basis· for the agreement between the parties
and that no other representations of any kind, oral or otherwise, have been made to Contractor.

       E.      In the event one or more of the provisions contained in this Contract shall be held,
for any reason, to be invalid, void, illegal or unenforceable in any respect, such invalidity,
voidness, illegality or 1Ulenforceability shall not affect the remaining provisions hereof, and this
Contract shall remain unaffected and shall be construed as if such invalid~ void, illegal or
unenforceable provision never had been contained herein.

        F.      No consideration shall be given to the fact or presumption that one party has a
greater or lesser hand in drafting this Contract.

      G.    Tins Contract represents a final, complete and exclusive statement of the agreement
between the parties, supersedes any prior oral or written representation, agreement or
understanding between the parties, and may not be modified, supplemented, explained or waived,
except in writing signed by an authorized representative of both parties.

       H.      This Contract may be executed in any number of counterpatts> and each such
counterpart shall be deemed an original of this Contract for all purposes. No party shall be
bound to this Contract unless and until all parties have executed a: counterpart. A signature page
signed by a party and sent by facsimile or other electric transmission to the other party shall be
deemed to be valid as an original and shall be binding as between the parties.

     I.  IN SIGNING TIDS CONTRACT, CONTRACTOR EXPRESSLY
ACKNOWLEDGES THAT IT IS AWARE OF ITS RIGHT TO OBTAIN LEGAL
COUNSEL TO REVIEW TillS CONTRACT. FURTHERMORE, CONTRACTOR
EXPRESSLY ACKNOWLEDGES THAT IT HAS READ AND UNDERSTANDS ALL OF
THE PROVISIONS CONTAINED IN TIDS CONTRACT, INCLUDING WITHOUT
LIMITATION, THE INDEMNITY AND RELEASE PROVISIONS, AND AGREES TO

                                                   19

                                                                                                   PVOG 21
           ALL SUCI! PROVISIONS, AS INDICATED BY THE SIGNATURE OF ITS
           AUTHORllZED REPRESENTATJLVE BELOW.
                                                                                                  l

                                                                                                  !'
-----------·~-Additional-ptovisions;-ifany;-are-attached-hereto-as-Exhibiti..'D~-----------------t-­
                                                                                                  i
                                                                                                  ~
                                       [Signature Pages Follow]                                   !
                                                                                                  i
                                                                                                  i

                                                  20

                                                                                     PVOG 22
-:--------"""""""""""""_   _..........,....=....,.,..---.,----------_....,.-..........,-._-~_....,.,.---·----·-~--·--~'-=---''-,
                                                                                                                                          I
                                                                                                                                          I
                                                                                                                           i              !

                                                                                                                           I·:            I
                                                                                                                                          I

                                                                                                                           rI•            i

                      IN WITNESS WHElrnOF, the pl:ll'ties hereto have executed and delivered this Contract                 l
                                                                                                                                          :

              effective as ofthe date fil'st hereinabove shown.
                                                                                                                           \. r.
                                                           COMPANY:                                                        ..
                                                                                                                                          r
                                                                                                                                          f
                                                                                                                           i
                                                          PENN VIRGINIA OlL & GAS CORPORATION.                              ~             1
                                                                                                                            (
                                                                            VI{
                                                          By~·-------it=:;;..._---===-­
                                                                                                                            !' :          !:
                                                                 Name:                                                      i
                                                                                                                               I
                                                                                                                                          i
                                                                 Title:

                                                              Address:          840 Gessner> Suite 800                     ! ..
                                                                               Houston, TX 77024                                              >·
                                                                                                                               !·
                                                              Telepl1one:      (713) 722-6500
                                                              Telecopy:        (713) 722-6600                                                 :.•

                                                                                                                           l
                                                                                                                               I t~:~
                                                              WITNESS OR ATTEST:
                                                                                                                                              .·
                                                                                                                                :
                                                                                                                                i
                                                         . Name: C .....~··     Jean M. Whitehead                               I
                                                                        ·      · (Please Print)                                 l             j\
                                                                                                                                !I
                                                                                                                                !             ;~
                                                                                                                                              ..
                                                                                                                                i
                                                              PENN Vffi.GINIA OIL & GAS, L.P                                    !
                                                              By:  Penn Virginia Oil & Gas GP LLC,                                            (~
                                                                       its general partner                                                    ..
                                                                                                                                              ..
                                                                                                                                   ..
                                                              By,
                                                                    Name:
                                                                             lJI\_d?r"
                                                                              Nancy M. Sfiyder                                                :
                                                                                                                                               l;r

                                                                    Title:    Executive Vice President                                         .::

                                                              Address:          840 Gessner, Suite 800                              i.
                                                                                Houston, TX 77024                                   r          ~·

                                                              Telephone:
                                                              Telecopy:
                                                                                (713) 722..6500
                                                                                (713) 722.. 6600
                                                                                                                                               ;~
                                                                                                                                               ::
                                                                                                                                               :·~
                                                                                                                                    \:·
                                                              WITNESS OR ATTEST:                                                               ~-:
                                                                                                                                    ~·~
                                                                                                                                    I

                                                                                                                                    r·

                                                          ·
                                                                    ~~.~~
                                                              Name:~Jean.M.
                                                                      Whitehead ·
                                                                       -,       (Please J?rlnt)

                                          Signature Page to Master Service Contract

                                                                                                            PVOG 23
                                                                                              i.
----:-------.----:------~-----------------------.......,..                                    .\:
                                                                                               ;.
                                                                                               ~:-
                                                                                               l
                                                                                               :J.

                                   PENN VIRGINIA MC ENERGY L.L.C.

                                   By:_ _~"---~~·~-______...,::;;;..._
                                                             _ _-_-_
                                      Name:
                                      Title:                                         .   i
                                                                                         :
                                                                                         i
                                                                                         i
                                   Address:       840 Gessner, Suite 800
                                                  Houston, TX 77024                      !i
                                   Telephone:     (713) 722-6500                         i
                                   Telecopy:      (713) ?22-6600

                                    PIITNESSORATTES'f:

                                    CONTRACTOR:

                                    By:_______________________
                                    Name: _ _~---------
                                    Title:._ _ _ _ _ _ _ _ _ _ _ __

                                    Address:

                                    Telephone:
                                    Telecopy: ·

                                    WITNESS OR ATTEST:

                                                                                              .:
                                    Name:,_ _ _ _ _ _ _ _ _ _ __
                                                   (Please Print)

                    Signature Page to Master Service Contract

                                                                           PVOG 24
                l?ENN VIRGINIA MC ENERGY L~L.C.

                By:·----~~--~-----------
                   Name: Nancy Snyder   M:
                 · Title: Executive Vice President

                Address:          840 Gessner, Suite 800
                                  Houston, TIC 77024
                Telephone:        (713) 722-6500
                Telecopy;         (713) 722-6600

                 WITNESS OR ATTEST:

                ·Name:_ _"'"'.~Jean~..:.;M.~w!.!:;·-~h:i~tee;h~ea~d~--­
                              (P1ease Print)

                 CONTRACTOR:

                 Address;         515 W. Greens Road, Suite 1170
                                  Houston1 Texas 77067
                 Telephone:.      281-775-5124
                 Telecopy:        281-775-4855

                 Wri'NESS OR ATTEST:

Signature .Page to Master Service Contract

                                                                          PVOG 25
                                                                                                        /·.:~

                                       EXIDBIT "A"

                      MINIMUM INSURANCE REQUIREMENTS

      The following minimmn insurance requirements shall be complied with by Contractor
and Company:

A.    General Requirements (Applicable to all policies of Contractor and Company)

      1.     Contractor agrees that all of Contractor,s insurance policies (with the exception of
             Workers' Compensation policies and only with respect to coverages and
             applicable minimum limits required in this Contract) shall be endorsed to-
             specifically name the Company Group as Additional Insureds thereunder. As
             used herein, "Company Group" shall have the meaning set forth in
             Section VI(A)(l) of the Contract. Company agrees that all of Company's
             insul'ance policies (with the exception of Workers' Compensation policies and
             only with respect to coverages and applicable minilnum limits required in this
             Contract) shall be endorsed to specifically name the Contractor Group as
             Additional Insureds thereunder. As used herein, "Contractor Group" shall have
             the meaning set forth in Section VI(A)(2) of the Contract. For aU insurance
             policies where an additional insured has been named, such insurance policies shall
             also contain a separation or severability of interest clause (sometimes called cross
             liability coverage) so that each insm·ed shall be treated separately under the
             policy. This provision shall not cause any change of the insured risks or any
             change :in the amount of insurance provided.

      2.     All policies shall contain a waiver of subrogation in favor of Company Group or
             Contractor Group) as the case may be~ including their respective insurers.

      3.     All policies cru.tied by each party shall provide thirty days' Wl'itten notice to the
             other party of cancellation or any material changes.

      4.     Coverage. under all insurance required to be carried by Contractor or Company
             shall be primary to, and receive no contribution from) any other insurance
             maintained by or on behalf of> or benefiting Company Group or Contractor
             Group. In addition, neither Contractor Group nor Company Group shall be
             responsible or liable for any deductibles, self-insured retentions and/or premiums
             of the other Group,s insurance.

      5.     All policies required to be carried by the parties shall have adequate territorial and
             navigational limits for the location of the work.

      6.     In all cases where either party has assumed responsibility through an indemnity
             obligation or other promise, its insurance coverage shall b(! deemed primary.

      7.     Company will maintain, at Company's expense, Operators Extra Expense (OEE)
             or Energy Exploration and Development (EED) insurance covering the liabilities

                                              A-1

                                                                                              PVOG 26
             specifically assumed by Co1npany in this Agreement, including but not limited to
             those related to well control issues (including Underground Control of Well); Re-
             drilling/Ex.tra Expense (including Unlimited Re-drlll); Seepage and Pollution;
             Cleanup and Containme11t; and such other extensions of coverage as may be
             considered appropriate in the amounts listed below:

             (a)    For work outside of cased hdle:

             $10 million for work outside of cased hole

             (b)     For work fuside of cased hole:

             $10 million for work inside cased hole in wells with a total measured depth
             greater than 15,000;

             $5 million for work inside cased hole in wells with a total measured depth greater
             than. 9,500' but equal to or less than 15,000,;

             $3 million for work inside cased hole in wells with a total measured depth of
             9,500' or less;

             (c)    Notwithstanding the above) $5 million for stimulation, cementing,
             wireline, or coil tubing services.

B.   Worker's Compensation and Occupational Disease Insurance in accordance with the
     statutory requirements of the state in which work is to be performed, the state in which
     the insured party's employees reside and the state in which the insured party is domiciled;
     Employer's Liability insurance with limits of not less than $1,000,000 per accident or
     occUlrenceincluding:

     (i)     Coverage amended to provide that a claim In Rem shall be treated as a claim
             against the employer.
     (ii)    Borrowed Servant/Alte1nate Employer endorsement
     (iii)   Other States coverage.
     (iv)    Stop Gap Liability- monopolistic states (if applicable) .
     (v)     Territorial extensions to cover all work areas including, when applicable, the Gulf
             of Mexico

     In the event any watercraft or offshore services are to be provided by Contractor,
     Contractor shall also obtain:

     (i)     Protection for liabilities under the United States Longshore and Harbor Workers'
             Co1npensation Act and the Outer Continental Shelf Lands Act.
     (ii)    Coverage for liability tmder the Merchant Marine Act of 1920:. commonly known
             as Jone~ Act; the Admiralty Act; and the Death on ~gh Seas Act with li~ts of
             not less than $1,000,000 per accident                           ·
     (iii)   Protection against maritime liability of employer to provide transportation, wages,
             maintenance and cure with. a minimum of$1,000,000.

                                              A-2

                                                                                           PVOG 27
==;o=.--=-====-----~-------------- ~-·------····-······-·"                ..

                                                                                                                  .•
                                                                                                                  •.
             (iv)    Voluntary Compensation Maritime endorsement.

             If either party obtains its employees from any employee leasing company or similar type
             arrangement, such party. shall require that the employee leasing company provide all of
             the same coverages and endorsements enumerated in this Exhibit A in accordance with
             all ?fthe General Require~ents of this Exhibit A.

        C.   Comprehensive General Liability Insurance, with limits of $2,000,000 per occurrence
             combined single limit for both Bodily Injury and Property Damage, including the
             following coverages:

             (i)    Premises and operations coverage
             (ii)   Independent Contractors coverage
             (iii)  Contractual Liability coverage
             (iv)   Products/Completed Operations coverage
             (v)    Liability for nx, ~ ucu and "U', (Explosion, Collapse and Underground)
             (vi)   Broad Form Property Damage Liability
             (vii)  Personal Injury liability
             (viii) In Rem endorsement
             (ix)   Territorial extensions to cover all work areas including, wheq applicable, the Gulf
                    of Mexico
             (x)    Actions Over Indemnity buyback coverage
             (xi)   Underground Resources and Equipment coverage
             (xii) Punitive Damages coverage
             (xiii) Seepage and pollution coverage- sudden and accidental basis
             (xiv) Blowout and cratering coverage

             In the event any watercraft or offshore services are to be provided by Contractor>
             Contractor shall ensure that the watercraft exclusion is deleted.

        D.   Comprehensive Automobile Liability Insurance cover.ing all o~ed! non-owned and
             hired vehicles, including broadened pollution coverage, with a minimum combined single
             limit of$1)000,000 per occurrence for both bodily injury and prope1ty damage.

             If the insured party is a n1otor carrier, then such party shall carry those limits and types of
             coverages as specified by applicable federal, state and local laws and regulations.
             Further, if the insured is a motor canier, then it shall name the other party's Group as
             additional insured and waive subrogation against the other party's Group only to the
             extent permitted by applicable Laws.

        E.   If Contractor is a professional services finn, Profession Liability Insurance, with limits of
             not less than $5,000,000 per occurrence.

        F.   If either party owns or operates vessels to provide services or conduct operations for
             Company, such pru.ty shall calTy:

                                                                                                        PVOG 28
                               -- -------·-------.,..,.

                                                                                                        l
                                                                                                        '·
     (i)     Hull and Machinery Insurance with coverage eq~al to that provided by the
             American Institute Hull Clause (6/77) including limits of liability at least equal to
             the full value of the vessel and with navigation limits adequate for contractor to
             perform the contract~d work. Where the vessel is engaged in towing operations7
             the insurance shall include full Tower's Liability with the sistership clause
                                                                                                        ;
             unamended.
                                                                                                        r
     (ii)    Protection and Indemnity Insurance with limits of $1,000,000 combined single               !'
             limit per occurrence, including, but not limited to, coverage for contractual
             liability for those liabilities assumed by the insured party, liability for pollution ·
             and cleanup on a sudden and accidental basis as per WQIS policy form or
             equivalent, full crew coverage, Collision and Tower's Liability ·and Cargo Legal
             Liability. The parties shall also carry Voluntary Removal of Wreck/Debris
             Insurance covering their equipment in an amount not less than $10,000,000 per
             occurrence.

     (iii)   All policies and coverages required under this Paragraph F shall be endorsed as
             follows:

             (a)     to provide full coverage to the other party's Group as additional insured
                     without limiting coverage to liability "as the owner of the vessel" and to
                     delete any "as owner" clause and any other language purporting to limit
                     coverage to liability of an insured "as ovmer of the vessel',.

             (b)     to delete any language limiting coverage fol' the other party's Group in the
                     event of the applicability of a limitation of liability statute.

G.   If either party owns or operates aircraf4 including helicopters, to provide services to or
     conduct operations for Company, such party shall carry:

     (i)     Aircraft liability insurance covering aU owned, non-owned and hired aircraft with
             a minimum combined single limit of $10,000,000 per occurrence. Such policy
             shall be endorsed to provide coverage in all tenitories where Contractor provides
             services to or conducts operations for Company.

     (li)    General/airport liability insurance including premises/operations, products,
             contractual) independent contractors and hangers' keepers, liability witlt a
             mirrimum combined single limit of$10,000,000 per occurrence.

     (iii)   All Risks Hull Insurance for an agreed value, including> without limitation)
             coverage for collision liability.

H.   Umbrella/Excess Liability Insurance with limits not less than $5,000,000 each
     occurrence/aggregate where applicable to be excess of coverage and limits required in
     Paragraphs A through G.

I.   Physical Damage Insurance on the insured's own property to the extent of its replacemep.t
     cost.

                                                 A-4

                                                                                              PVOG 29
------:--~-------=~""""""-~--""""'-··.-~---~··-.----···

          J,   The foregoing MinilnUm Insurance Requirements are subject to change at the direction of
               Company, and Company reserves the right to require cetiified copies of any or all
               policies.

                                                     A-5

                                                                                                  PVOG 30
                                         EXHIBIT "B"

                             WAIVER OF LIEN AGREEl\1ENT

STATES OF _____________________________                                                                 ·.
                                                                                                        ...
COUNTffiS~ARlSBESOF          ___________________________

KNOW ALL :MEN BY THESE PRESENTS THAT:

        WFIEREAS,                                   , a                              corporation,
whose address is                                                      (hereinafter referred to as
"Contractor~)), and PENN VIRGINIA OJL & GAS CORPORATION, a Virginia corporation
with offices in Houston) Texas, PENN VlRGINIA OIL & GAS, L.P., a Texas limited partnership
with offices in Houston, Texas, and PENN VIRGINIA MC ENERGY L.L.C., a Delaware
limited liability company with offices in Houston, Texas (hereinafter collectively referred to as
((CompanyH)t have entered into a Master Service Contract (the "Master Service Contract")
whereby Contractor has agreed to provide work and services in various co1.mties in the State(s) of
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _;and

        WHEREAS, under the Master Service Contract, Contractor must submit to Company a
list of subcontractors to be used in the performance of such work and services, together with
doctunents evidencing that all laborers, subcontractors and suppliers of materials and equipment
have been paid and are not claiming liens on Company>s prop~rty for such labor, services or
materials under the provisions of the applicable Constitution, Statutes~ Rules and Regulations of        ;.
such State(s); and

       WHEREAS, the undersigned                                     a---------
corporation (hereinafter referred to as "Subcontractor,'), has petformed and/or fumished or
agreed to perform and/or finnish labor, services, eq·uipment, material or supplies or any
combination of the foregoing for the work or services; and

        WHEREAS, Subcontractor wishes to be considered by Contractor for some of the labor,
services or materials to be performed and/or ftunished to Contractor for the work or services.

        NOW, THEREFORE) for and in consideration of $10 in hand paid to Subcontractor by
Contractor on behalf of Company, and in consideration of the purposes and objectives
hereinabove expressed, Subcontractor hereby agrees with Contractor for the benefit of Company,
as follows:

       1.      Subcontractor hereby waives and relinquishes all rights to assert each and every
mechanics=- materialmen, laborers and other liens provided for by the Constitution, Statutes,
Rules and Regulations of the State of                                     which it may otherwise
be entitled to for the labor, services, materials or supplies performed and furnished or to be
performed and furnished in the performance of work or services insofar only as such liens (or
any of them) apply to property or equipment of Company and/or proceeds therefrom owned by
Company up to the full amount due for labor, ~ervices or supplies, principal and interest, and any ·

                                               B-1

                                                                                              PVOG 31
===-'""""'~===,..,......--...,--- . . . . . . .....------~------~~--==....,.=-...=~· ---~------·------·-----

                                                                                                                      !~

             statutory attorney~s fees due Subcontractor. Notwithstanding the foregoing, Contractor and
             Subcontractor hereby agree that all remedies of Subcontractor against Contractor shall remain in
             effect and are not waived or impaired by execution of this waiver.

                    2.     Suboontractor agrees that Company may pay the full Contract price to Contractor
             and that Subcontractor relieves Company of any responsibility tbr seeing to the distribution of
             such Contract funds and Subcontractor jndemnifies Company from any loss, cost or expense for
             having paid the Contract price to Contractor and agrees that it will look solely to Contractor for
             payment.

                     3.     Subcontractor recognizes and agrees that Contractor and Cmnpany are not joint
             venturers nor a partnership and that debts· due and owing to Subcontractor by Contractor for the
             work or services are exclusively the debts of Contractor contracted by Contractor on its own
             behalf and not as an agent, representative or partner of Company.

                    4.       Contractor hereby agrees that it will be liable to Subcontractor only in accordance
             with the contract between Contractor and Subcontractor and represents that it is not acting as
             agent or as a partner or joint venturer with or for Company.

                    5.      Notwithstanding the foregoing, if for any reason Subcontractor shall acquire a lien
             on the property or equipment of Company, then Subcontractor agrees to subordinate such lien to
             Company's ownership interests within ten (1 0) days after request therefo1· by Contractor or
             Company.

                                                 [Signature Page Follows]

                                                                                                                       "
                                                                                                                       :·:

                                                             B-2

                                                                                                            PVOG 32
                                         ·---~-··-- ... ---·-,----··~~.-........... '\>,................   ~   ................... - ....... ~

          IN WITNESS WHEREOF this agreement is executed by Subcontractor and Contractor
on this           day of                 2fH_.

                                          SUBCONTRACTOR:

                                          By:_ _ _ _ _ _ _ _ _ _ __
                                              Name:
                                              Title:

                                          WITNESS OR ATTEST:

                                          Name: _ _ _ _ _ _ _ _ _ _ __
                                                              (Please Print)

                                          CONTRACTOR:

                                          By: _ _ _ _ _ _ _ _ _ _ __
                                               Name:
                                               Title:

                                          ff'ITNESS OR ATTEST:

                                          Nrune:______________________
                                                     (Ple.ase Plint)

                                             B-3

                                                                                                           PVOG 33
                                                                           -·-········-----··"·   --·-·---·---

                                       EXHIBIT "C"

                     JOINDER TO MASTER SE~VICE CONTRACT

                                                        a                          corporation
("Joining Contractor',} hereby JOms in that certain Master Service Contract dated
______, 201_, by and among (i) Penn Virginia Oil & Gas Corporation, a Virginia
corporation, Pe1m Virginia Oil & Gas, L.P., a Texas limited partnership, and Penn Virginia MC
Energy         L.L.C.,     a      Delaware       .limited     liability     company,       and
(ii)                                                 a                             corporation
("Contractor"), as amended or supplemented prior to the date hereof and in effect on the date
hereof(as amended or supplemented, the "Master Service Contract"). Joining Contractor hereby
ratifies, confirms and adopts the Master Service Contract and agrees to be bound by all of the
obligations, covenants, terms and conditions contained therein that apply to "Contractor" as
though an original party thereto.

       Executed effective as of _ _ _ _ _ 201_.
                                             _;>

                                           JOINING CONTRACTOR:

                                           By: _ _ _ _ _ _ _ _ _ _ _~
                                               Name;
                                               Title:

                                            WITNESS OR ATTEST:

                                           Name:.___________________________
                                                       (Please Print)

                                               c

                                                                                                  PVOG 34
                                  ADDITIONAL PROVISIONS

. FORCE MAJEURE .

Except for the indemnification provisions under this Contract and the duty to make payrnents for
services already provided along with force majeure or standby payments during the Force
Majeure Event, neither Company nor Contractor shall be responsible to the other for any delay,
damage or failure caused by or occasioned by a Force Majeure Event. As used in this Contract,
"Force Majeure Event', includes acts of God, action of the elements, warlike action, insurrection,
revolution or civil strife, piracy, civil war or hostile action, strikes, differences with workers, acts
of public enemies, acute and unusual labor, material or equipment shortages, or any other  the fiduciaries) agents and
         employees of all such plans, and the successors and
         assigns of all such entities, plans and persons; provid-
         ed~ however, that in the case of an Electing Entity,
         "Company" shall include the Electing Entity only to
         the extent provided in the Electing Entity's agreetnent
         to be bound by fue Program.

      E.   ·~Dispute''  means all legal and equitable clairns,
           dern,ands 1 and controversies} of Wl-latever nature or
           kind, whether in contract, tort, under statute or regu-
           lation~ or some other law, between persons bound by
           the Progran1 or by an agreen1ent to resolve Disputes
           :ler the Program, or between a person t nd by the
        Progran1 and a person or entity othezv.rise entitled to
        its benefits, including, but not lhnited to~ any
        matters ·with respect to:

        1.    this Program;

        2.   the employment or potential reemploym.ent of an
             Employee, including the tenns, conditions~ or
             termination of such employment with the
             Com.pany;

        3.   employee· benefits or incidents of employment
             \Vith the Company;

     :~~-4:- -- any·-other·'matter"Tefated·"to- ·or· concernilig.···the   ··---'~-­
                relationship between the Employee and the
             Company including~ by way of example and
             without limitation~ allegations of: discrimination
             based on race, sex~ religion, national origin~ age,
             veteran status or disability; sexual or other kinds
             of harassment; workers' compe11sation retalia-
             tion; defan1ation; infliction of emotional distress,
             antitrust claim concerning wages or otherwise, or
             status, claim or membership vvith regard to any
             employee benefit plan;

        5.   an Applica:nfs application for employment and
             the Con1pany's actions and decisions regarding
             such application; and

       6.    any personal injury allegedly incurred in or about
             a Company workplace or in t11e course and scope
             of an En1ployee~s employment

       "Dispute" includes all such matters regardless of
       when the events on which they are based occurred,
       including matters based on events occurring before
       the E1nployee became subject to this Program (so
       long as such disputes v;,rere not previously asserted in
       a judicial forum) or after termination of the employ-
       ment relatim1shlp.

F.     "Electing Entity~, means any legal entity that has
       agreed to be bound by the Program as provided herein.

G. "E1nployee'' n1eans any person ·who is or ha~ been in
   the employment of the Company on or after the effec-
   tive date of this Program, \Vhether or not employed at
   the tin1e a daim is brought with respect to a Dispute,
   residing in the United States, or othervvise subject to
              laws of the United States or any state,· 1icipality,
          or other political subdivision of the Unitea State-s.

      II. "Applicanf' rneans any person who is seeking or has
          sought employment with the Company after the effec-
          tive date of this Program.

     I.   "Party" m.cans~ \Vith respect to a particular Dispute,
          affecte.d persons and/or entities bound by this
          Progratn.

     J.   "'Progr8.1n~'means this Nabors Dispute Resolution
          Progra1n, as an1ended fi:mn tin1e to thne.

     K. aRules" means the Nabors Dispute Resolution Rules)
      .. "as amended from time .tothne. . which ~rt; gppli.q~b.t~J9 ."
          mediation and arbitration.

     L. ''Sponsor,' means Nabors I11dustries~ Inc.) a Delaware
        corporation.

3.   Nan1c, Application and Coverage

     A. TI1e Program shall be referred to as the ~'Nabors
        Dispute Resolution Program." Alternatively, it may
        be referred to as the 'Tii:;pute Resolution Program.~·

     B. Until revoked by Sponsor pursuant to this Progrru.nt
        this Program applies to and hinds the Company~ each
        Employee a11d Applicant and the heirs~ beneficiaries
        and assigns of any such person or entity; provided~
        however> that this Program shall noi apply to any
        Employee in a unit of Employees represented by a
        labor organization, or to the Cmnpany V\:ith respect to
        such en1pJoyees, except to the extent penniited in an
          applicable collective bargaining agreement or lawfully
          imposed by the Company \Vhen no collective bargain-
          ing agreeme_nt is in effect

     C. Except as provided for herein~ this Program applies to
        any Dispute.

     D. Notwithstanding anything to the contrary iu this
        Progn1n1.> the Progrru.n does not apply to cla.ilns for
        \vorl, and
         defenses of all Parties are preserved. In the case of
         arbitration, the arbitrator shall have the authority to
         detem1ine the applicable law and to order any and all
         relief, l~gal or equitable) which a Party could obtain
         from a court of competent jurisdiction on the basis of
           the claims made in the proceeding.

     D. Other than as expressly provided herein., or in the
        Rules, ·the Program shall not be construed to grant
        additional substantive~ legal.~ or contractual rights~
           remedies or defenses which would not be applied by
           a court of competent jurisdiction in the absence of the
           Program.

     E. Notwithstanding the provisions of the preceding sub-
        section) in any proceeding before an arbitrator~ the
        arbitrator~ in his or her discretion, may allow a
        prevailing Employee or Applicant a reasonable
        attorney's fee as part of the award. The discretion to
        allow an award of fees under this subsection is in
        addition to any discretion, right or power which the
           arbitrator may have under applicable law. If the
           arbitrator awards attorney fees withou~ authorization
           for such an award by statute or contract, such award
           ~ill be limited to $2,500.00.

9.   Administrative Proceedings

     A. This Program shall apply to a Dispute pending before
        any local, state or federal administrative body or court
           unless prohibited by law.

     B. Participation in any administrative or judicial
         proceeding by the Cmnpany shall not affect the
         applicability of the Program to any such Dispute upon
       . terrnination of ilie administrative or. judicial
         proceedings. A finding} recommendation or decision
         by an ad1ninistra1ive body on the merits of a Dispute
         shall have the san1e legal weight or effect under the
         Program as it would in a coutt of competent jurisdic-
         tion.
      10. Ex(                 ive Remedy

               Proceedings under the Program shall be the exclusive~
               final and binding method by which Disputes are resolved.

     11. Electing Entities

               A. Corporations or other legal entities, not otherwise
                  Parties:> 1nay elect to be bound by this Program by
                        ·written agreement with Sponsor.

              B. Election may be made only as to son1e types of
                 Disputes> or only as to som~ persons~ in the· discretion.
                       of Electing Entity .

.' ""J2.~""')~f!~£._~.:Y~"",!?a.!,~~'"'"·o-·-.·~<"'~-''''"'=o:··.,.·.""'''".~"""'""~­
              The Effective Date of this Program shall be April 15,
              2001.

    13. Severability

             The terms of this Program and the Rules are severable.
             The invalidity or unenforceability of any provision there-
             in shall not affect the application of any other provision.
             Where possible, consistent with the purposes of the
             Program, any other~rise invalid provision of the Progrrun
             or the Rules may be reformed and, as refonned., enforced.

    14. Assent

             Employment or continued employment after the Effective
             Date of this Program constitutes consent by both the
             Employee and the Cotnpany to be bound by this Program,
             both during the enlployment and after tennination of
             employment. Subn1ission of.an application~ regardless of
             form, for employment constitutes consent by both the
             Applicant and the Company to be bound by this Program.

         NABORS DISPUTE RESOLUTION RULES

   1..      Definitions

            All definitions included in the Nahors Dispute Resolution
            Program apply to these Rules.

  2.        AppJication

            A, If different rules ·are applicable to a specific class of
               Disputes, and have been adopted by Sponsor and
               served on AAA or JAMS;. these Rules shall not apply
               to such class of Disputes.
                                      B.       ~se Rules apply in the fonn existing\                   the time
                                            proceedings are initiated under the1n.

                                      C. To the extent consistent vvith these                      Rules~      the
                                            Employment Dispute Resolution Rules of AAA or
                                            JAMS also apply to all proceedings gove1:11ed. by these
                                            Rules.

                                3.    Initiation of the Process

                                      A. A Party may initiate proceedings under these Rules at
                                         any time, subject to any defenses including those
                                         applicable to the timeliness of the claim~ inclurung
                                         lin1itations and laches.

,~,.--·v····~···-., .....   ·    ··--·'B·:---·:P<.::-Party·:nray~it.d:timt1··proeeedil'1gs·by·-serving--a·w,x.iiten

                                           requ~st to initiate proceedings on AAAor J A~~fS, and
                                           tendering the appr0priate ad1ninistrative fee.

                                     C. Copies of the request shall be served on all other
                                           Parties to the Dispute by AAAor JAMS. The request
                                           shall describe the nature of the Dispute~ the amount
                                           involved; if any, the remedy sought, aud the proceeding
                                           locale requested.

                                     D. Proceeding~ may also be initiated by an E1nployee or
                                        Applicant by serving a 'Written request to initiate pro-
                                           ceedings on the Company$s Dispute Resolution
                                           Program Administrator. In such a case, the Company
                                           shall promptly fcnward any properly served request it
                                           has received to AAA or JAMS.

                                     E. Parties against whom a claim is asserted shall file an
                                        answering staten1ent within 21 days of receiving
                                        notice of intent to arbitrate or a specification of
                                        claims, which shall include any counterclaims and
                                        any request that the arbitrator (if any) prepare a state~
                                        ment of reasons for the award.

                                4.   Administrative Conference

                                     AAA or JA..1v!S shall convene an administrative conference
                                     as soon as possible after receipt of the ansv{etip:g state... ·
                                     1nent or after expiration of the time for filing an answering
                                     statement if one. has not been filed. The conference may
                                     be held in person or by telephone. At the conference,
                                     AAA or JAMB \¥ill determine whether the Parties are in
                                     agree1nent on a 1nethod to resolve the Dispute. If the
                                     P~rties are in agreement, AAA or JAMS vvill implement
                                     the procedure in accordance with their rules upon payment
                                     of any applicable fee. If the Parties cannot agree, or if the
                           Pan    have previously attempted and failed 1 esolve the
                           Dispute by mediation or another nonbinding mec.hanism,
                           the Dispute shall be arbitrated under these Rules.

                    5.    Appointment of Arbitrator

                            Imn1ediately after payment of the arbitration fee, AAA or
                            JAMS shall sin1ultaneously send. each Party an identical
                            list of names of persons chosen from a panel of qualified
                            arbitrators which AAAor JAMS shall select and maintain.
                            Each Party to the Dispute shalt have fourteen ( 14) days
                           from the transmittal date to strike any names objected to_,
                         · number the remaining names in order of preference, and
                           return the list to AAAor JAMS. If a Party does not.tetu.rn
                           the Hst \Vithin the time specified~ all persons therein shall
                           he ·deemed:""acceptabl~·From· ..·among-the·-persons··who-·"""·'--:-.---------·------·<--·-·- -•~ -=·. ··
                           have been approved on both lists, and in accordance with
                           the order of mutual preference, AAAor JAMS shall invite
                           the acceptance of the arbitrator or arbitrators to serve. In
                           those cases where more thari $2,.000~000 is in controversy,
                           either Party shall have the right to require that the
                           arbitration proceed before a three member panel rather
                           than a single arbitrator. The Party who elects for a panel
                          in these circumstances shaH notify the other Parties during
                          the administrative. conference described in Section 4 of
                          the Progrrun. Any Party shall have the right to strike one
                          list of arbi~ators in it's entirety. when a Party exercises
                         this· right) AAA or JAMS shall issue a new list of
-~;;.-·,·-
   ~:,:::'-
             ,.,         arbitrators consistent with the above procedures.

                   6.    Qualifications of the Arbitrator

                         No person shaH serve as an arbitrator in any matter in
                         w1Jich that person has any financial or personal interest.
                         Prior to accepting appointment~ the prospective arbitrator
                         shall disclose any circumstance likely to prevent a prompt
                         heating or create a presumption of bias. Upon receipt of
                         such information from the arbitrator or any other source,
                         AAA or JAMS V\:ill either replace that person or
                         communicate the information to the Parties for comment.
                         Thereafter, AAAor JAMS may disqualify that person, and
                         its decision shall be conclusive.

                   7.    Vacancies

                         If a vacancy occurs f<;Jr any reason or if an appointed
                         arbitrator is unable to serve promptly) the appointn1ent
                         procedure in Section 5 shall apply to the selection of a
                         substitute arbitrator.
8,    Da.t     Time and Place of Hearings

      A. The arbitrator shall set the dates tune and place of any
         proceeding pursuant to the requirements of Section
         8B of the Program.

      B. Notice of any hearing shall be given at least ten (1 0)
         days in advance, unless the arbitrator detenniries or
         the Parties agree that a shorter time is necessary.

      C. The arbitrator shall make every effort, without undu-
             ly incurring expense; to accommodate the Employee
             or Applicant il1 the selection of a proceeding.Jocation.

     At the request of AAA or JAMS; or of a Party or on the
     initiative of the arbitrator~ the arbitrator or AAA or JAMS
     may notice and hold conferences for the discussion and
     determination of any matter \vhich will expedite the
     proceeding, including:

     A. venue,

     B. clarification of issues,

     C. determination of prelin1inary issues, including sunl-
          mary determination of dispositive legal issues,

     D. discovery,

     E. the time and location of proceedings or conferences,

     F. interhn legal or equitable relief authorized by applica-
          ble law~

     G. pre- or post-hearing 1nemorand~

     H. stipulations; and/or

     I.   any other matter of substance or procedure.

10. Mode of Hearings and Conferences

     In the discretion of the arbitrator or by agreeinent of t.l-te
     Parties, conferences and hearings n1ay be conducted by
     telephone or by vvritten submission, as well as in person.
1L P:re.      a.ring Discovery

    A. On any schedule determined by the arbitrator, each
       Party shall submit in advance the names and address-
       es of the witnesses it intends to produce and any doc ..
       uments it L.itend.s to present

    B. The arbitrator shall have discretion to determine the
       form, amount and frequency of discovery by the
           Parties.

    C. Discovery may take any form pernutted by the
       F:ederal Rules· of Civil Procedure, as amended fron1
       time to time~ subject to any restrictions imposed by
       the arbitrator,

12. Representation

    Any Party may be represented by counsel or by any other
    authorized representative.

13. Attendance at Hearings

    The arbitrator shall maintain the privacy of the proceedings
    to the extent permitted by law. Any person having a direct
    interest in the matter is enthled to attend the proceedings.

   The arbitrator shall otherwise have the povver to exclude
   any witness, otl1er than a Party or other essential person}
   during the testintony of any other witness. The arbitrator
   shaH determine whether any other person may attend the
   pYoceeding. Upon the request of any Party) the arbitrator
   shall exclude any witness during the testimony of any
   other witness.

14. Postponement

   A. The arbitrator} for good cause shown by a Party} or on
      agreement of the Parties, tnay postpone any proceed-
      ing or conference.

   B. The pendency of court proceedings related to the
      srune matter is not good cause for postponeinent

15. Oaths

   Before proceeding with the first hearing, each arbitrator
   ro.ay take an oath of office and) if required by la\v~ shall do
   so. The axbitrator n1ay require witnesses to testify under
   oath ad1ninistered by any duly qualified person and~ if
   req-t.lired by la\V or requested by any Party) shall do so.
16. Rec'         l of Proceedings

        There shall be no stenographic, audio, or video record of
        the proceedings unless either requested by one of the
        Parties or specified by the arbitratot The Party requesting
        the record shall bear the entire cost of producing the same.
        Copies of the record shall be furnished to all other Parties
        upon request and upon pay1nent of the cost of reproduc-
        tion.

17. Procedure

        TI1e pl'oceedings shall be conducted by the arbitrator in
        whatever order and 1nan11er will most expeditiously
        permit full presentation of the evidence and argum.ents of
  A~-   i1teJ?atties:;

18. Arbitration in the Absence of a Party

        Th_e arbitrator may 1)roceed in the absence of Pruties or
        representatives who~ after due notice, fail to be present or
        fail to obtain a postponement. An award shall not be tnade
        solely on the default of a Party. The arbiu:ator shall
        require any Pmty who is present to submit such evidence
        as the arbitrator tnay require for the making of an award.

19. Evidence

        A. The arbitrator shall be the sole judge of the relevancy,
           m.a.teriality ~ and ad1nissibility of evidence offered.
           Confonttity to legal rules of evidence shall not be
           necessary.

        B. The arbitrator n1ay subpoena \\itnesses or docum.ents
           at the request of a Party or on the arbitrator»s own
           initiative.,

        C. The arbitrator n1ay consider the evidence of witnesses.
           by affidavit or declaration, but shall give jt only such
           weight as the arbitrator deems appropriate after con-
           sideration of any objection made to its admission.

20. Post. .Hearing Submissions

        All docmnentary evidence to be conf:.idered by the arbitrator
        shall be filed a.t the hearing unless the arbitrator finds good
    cause to pennit a post-hearing subn1ission. All Pmties
    shall be afforded an opportunity to exatnine and comment
    on any post-hearing evidence, The arbitrator shaH pern1h
    the filing of post~ hearing brief.<; at the re.quest of a Patty
    and shall detemline the procedure ai1d timing of such filings.
· 21. Ck         g and Reopening of Proceedings

       A. \Vhen the arbitrator is satisfied that the record is
          completeJ including the submission of any post-hearing
          briefs or documents permitted by the arbitrator,. the
          arbitrator shall declare the proceeding closed.

       B. The proceeding may be reopened on the arbitrator,s
          initiative or upon application of a Party at any tune
          before the award is made.

22. Waiver of Procedures

        Any Party who fails to object in \vtiting~ after knowledge
        that any provision or requirements of these procedures and
,,, --·" &th Floor
                        New York, NY 10154
                        (212) 751~2700
                        Fax: (212) 751-4099
              C.     .y notice, service or c.ommunicati(                      with the
                   Company vvill be to:

                               Legal Department
                               Nabors Industries, Inc.
                               515 West Greens Road~ Suite 1200
                               Houston, Texas 77067-4525
                               (281) 874~0035
                               Fax: (281) 775-8431

       25. Communication with the Arbitrator

                         There shall be no communication between the Parties and
                         the arbitrator other than at any oral hearings or confer-
                         ences. Any other oral or written communications from the
..,. ~--···. --- . ,. __ parties .tO-the~arbitrator . shall. be.directed, to.the_.AAA ..or-
             JAMS (and copied to the Parties) for transmission to the
             arbitrator, unless the Parties and the arbitrator agree other-
             'vise.

       26. Time of Award

             The award shall be promptly made by the arbitrator,
             unless otherwise agreed by the Parties or specified by
             applicable Jaw~ no later than thirty (30) days from the date
             of the closing of the proceeding or) if applicable, the
             closing of a reopened proceeding.

       21. Form of Award

             The award shall be in ¥rrriting a..t1d shall be signed by the
             arbitrator. The arbitrator shall write a staten1ent of reasons
             for the award if requested to do so in the request to
            ,initiate proceedings or in the answering statement. The
            award shall be executed in any manner required by appli-
            cable law.

      28. Modification of A'vard

            On order of a court of competent jurisdiction, or on agree. .
            1nent of the Parties~ the arbitrator shall n1odify any a·ward.
            The arbitrator tnay modify an award on the n1otion of a
            Party if the arbitrator finds that the award, as rendered~ is
            ambiguous or defective in form> or if the award requires
            an. illegal or hnpossible act . These are the only circun).-
            stances under which an arbitrator shall have jurisdiction to
            withdraw or modify an award.
                                                        29. Set      nent

                                                             If the Parties settle their Dispute during the course of the
                                                             arbitration, the arbitrator may set out the terms of the
                                                             settlement in a consent award.

                                                       30. Scope of Arbitrator's Authority

                                                                  The arbitrator ~s authority shall be limited to the resolution
                                                                  of legal Disputes between the Parties. As such, the
                                                                  arbitrator shall be bound by and shall apply applicable law~
                                                                  including that related to the allocation of the burden of
                                                                  proof; as weH as substantive law. The arbitrator shall not
                                                                  have the authority either fo abridge ot enlarge substantive
                                                                .·rights available under applicable law. The arbitrator 1nay
;.'" . ';"'.:· .• _.:....: ____________ "'----~'.;   ·· ·.· _;,:.,.alscr·grant ·elnergency-or-tetnpofary·reliefthatis·or·would:
                                                            be authorized by applicable law. The arbitrator shall be
                                                            bound by and shall comply with the provisions of the
                                                            Progrrun and Rules.

                                                       31. Judicial Proceedings and Exclusion of Liability

                                                            A. Neither AAA, JAMS> nor any arbitrator is a necessary
                                                               Party in any judicial proceedings relating to proceed-
                                                               ings under these Rules~

                                                            B. Neither AAA, JAl\1S, nor any arbitrator shall be liable
                                                               to any Party for any aqt or omiss1on in connection
                                                               with any proceedings within. the scope of these Rules.

                                                            C. Any court with Jurisdiction over the Parties may
                                                               compel a Party to proceed under these Rules at any
                                                               place and may enforce any award made.

                                                            D. Parties to these Rules shall be deemed to have
                                                               consented that judgment upon ihe award of the
                                                               arbitrator may be entered and enforced in any federal
                                                               or state court having jurisdiction of the Parties.

                                                           E. Initiation of: participation in, or removal of a legal
                                                              proceeding shaH not constitute waiver of the right to
                                                              proceed under these Rules.

                                                           F.   Any court with jurisdiction over the Parties n1ay issue
                                                                any injunctive . orders{including prelin1inary injunc-
                                                                tions) if the necessary legal and equitable require-
                                                                ments under applicable law are met~ pending the
                                                                institution of proceedings under these Rules.
 32. Fee    td Expenses

     A. The expenses of witnesses shall be borne by the Party
        producing such vv-itnesses} except as otherwise
        provided by law or in the award of the arbitrator.

     B. A.ll attmneys' fees shall be borne by tl1e Pa1.ty
        inculTing them except as otherwise provided by Jaw~
        by the Program~ or in the award of the arbitrator.

    C. Discovery costs (e.g.) court reporter fees for original
       transcripts) shall be borne by the Party initiating the
       · discovery. The cost of copies of deposition transcripts
         or other discovery shall be borne by the Party ordering
         the copy.

    D. The fees and expenses of experts~ consultants and othM
       ers retained or consulted by a Party shall be borne by
       the Party utilizing those services.

    E. The Etnployee or Applicant shall pay a $150 fee if he
       or she initiates arbitration or 111e.diation. Othervvise,
       Etnployee/Applicant Patiies shall not be responsible
       for payment of fees and expenses of proceedings
       under the.se Rules~ including requi1·ed travel of an
       arbitrator or a mediator) expenses of an arbitrator)
       1nediator~ AAA or JAMS, and the cost of any proof
        produced at the discretion of an arbitrator.

    F. If the dem.and for tnediation or arbitration is initiated
       by the Con1pany, such fees wiH be paid by the.
       Con1pany.

    G. Except as otherwise. provided by law or in the a\Vard
       of the arbitrator, all otbet· expenses~ fees and costs of
       proceedings under these Rules shall be borne equally
       by the Parties who arc not E1nployees/Applicants.

33. Interpretation and Application of These Rules

    The arhin~ator shall interpret and apply these Rules insofar
    as they relate to the arbitrator~s powers and duties. All
    othef rules shall be in interpreted and applied by the AAA ·
    or JAMS.

34. Applicable Law

   .A. Proceedings under these Rules and any judicial
       reviev-,t of aV~rards shall be govetT.Jed by the Act
   B~ J      cept where otherwise expressly provi ! in these
          Kules, the substantive law applied shall be state or
          federal substantive law which would be applied by a
          United States District Court sitting at the place of the
          proceeding.

35. Mediation

   At any time before the proceeding is closed~ the Parties
   may agree to mediate their dispute by notifying AAA or
   JAMS. AAA or JAMS shall dctennbte what procedures
   apply to any such mediation.

36. Spanish
Nabors Industries! Inc.
      AprH 2001
  January 17, 2007
  TO:     All Employees of Nabors Industries, Inc. and Subsidiaries ·

  RE: · Nabors Dispute Resolution Program

  Dear Employee:

  Effective ten (1 0} days after the date of this~ notice~ pursmmt to Section 6 of the Nabors Dispute
  Resolution Pro~ Nabors Industries; Inc~ e(Nabors,} and its subsidiaries are amending the
  Nabors' Dispu~e Resolution .Progt:am ~if Rules for the determination of all disputes between
  employees ~d Nabors or on~ ·of ~ts :sub~idi~e~k                ,           ·
  Th~-;;n;p_~;nts ~-th~ P;~~~ and Rul~ ate 009fosed on the b~~k.of,ilifs·;:~~.                                Nabors is
 amending ·one (lJ' seCtion of the Nabors· Dispute Resolution Program and one (1) section of the
 Nabors Dispute Resolution Rules. You. should already have a copy of the current Program and
 Ru1es~ or they may be found on the Nabors Intranet under policy number 200.80.1 at
 )tf :'·     · · ; t.nabo        10/Hil.       ··        .t:lefaufi:.                                 +

   As before, tlie Nabors Dispute Resolution Pro~ as amended, gives you .the most effective
  ! sh3U be at th$ sole discretion and risk of the user parties. Users
  of the form contract or any portion or variation thereof are l!!ncouraged to seek !he advice of counsel to ensure that their conlrnct reflects the complete agre{lment
  of the parties and applicable law. The International Association of Orilang Contractors disclaims any liab!Jity whatsoever for loss or damages whiCh may result
  from use of \he form conlrnct or portions or variations thereof. Computer generated form, reproduced under li<;ense from IAOC.

                                                                                                                                                                   Revised April, 2003
                                                      INTERNATIONAL ASSOCIATION OF ORIWNG CONTRACTORS
                                                                   DRILLING BID PROPOSAL
                                                                            AND
                                                               DAYWORK DRILLING CONTRACT· U.S.

 Please submit bid on thfs drilling contract form 1or performing 11\e w0111 CXJ~ined below. upon the terrru> and for the consiclera1ion set forth, with the undernla!'lding ~t
if the bid is acoepte
lhlblllty for ail consequences of operations by borh p;utles while on a Cayworlc Basis, Jnclurflng resuln and all other risks or liabilities Incurred fn or lncfdent to
such operations.
1.        l.OCATION OF WELl.:
          WeliName                       •
          and Number: To be      adv1sed by Operator
          ~I                                                                                        Field
          coonty: Jefferson                            _T:..;e:::x:=a::;:s:______ Name:
                                                               smte:                                            ------------------
          Welllocation and                                                                                    --
          land description: To be   advised by Operator
          1.1 AddiUonal Well Locations or Areas: None.
LO(alfons described above are for well and Contract ldentif'tealion only and CO!llrnctor assumes no liability whatsoever for a. sxoper survey or location stake on Operator's
lease.
2.    COMMENCEMENT DATE:
      Contractor agrees to use reasonable effort& to commence <>perations for1he dJiKing of the wen~                            ~                                :-:!0
~* immediately following rig rel~ase from Contractor's current customer. lf Operator does not provide a - -
sound location to accept Contractor's rig immediately following rig release from Contractor's current
customer, Contractor shalf have the right to terminate this Contract unless Operator pays Contractor the
Standby Time Rate from such release date until the location is ready. If Contractor so terminates, the
termination shall be deemed to be a termination at Operator's election, and the provisions of Sub-paragraph
6.4(a) shall apply.
3.   DEI>'rn:
     3.1 Well Depth: The well{s) shall be dlilled 1o a depth of awoximately         10,500'           feet,~---------------
~Ill~~. but the Contractor shall not be required Mteunder to drlli said well(s) below a maximum depth of - - , - - - - - - - feel, unless
Contractor and Operator mutually agree to drill to a ~realer depth. - Not to excHd capacity of rig as described on tho rig lnventQry attached herein.
4.    OAYWORI\ RAreS:
      Contractor Shall be paid at the following rates for the work performed hereunder.
      4.1 Mobllixatlon: Operator shall pay Con\raclor ~                                                             wl'iAglf.letlme 'lie fig ja.ift~m~~site&, oommaR~.()Il - - - - - - - - -
~.;                                                   part•raR\yfG~ or subcontracts for certain items or services which Operator Jsl'l)qulred herein
to provide, for p1.1rposes cf th& Indemnity and release provl!ilons 'Of thTs Contract., :said Item$ or servlcf!.$ shall be               d~ed       to be   Op~or fuml!>h~ Items     or
servlces. Any subcontractors so hired shall be deemed to be Operator's contractor, and Operator shall not be relfeved of any of Jts 1/ablfities In connactlon
therewith. Notwfths~ndlng th~ foregotng, Contractor shalt not. be obliged to purchase any items on behalf of Operator.
      4.10 Revlsl(lll in R~: The rates and/or payments herein set forth due to Contractor from Operator shall be revised to re11ect !he change in costs if the costs of any
of the ilems hereinafter listed shall vary by more than           ;U1'9 101      percent from the costs tnereor on !he date of this Contract or by the same percent after the dale of
any re\l!slon pursuant to thfs Subparagraph:

              {a)    Labor costs, Including all bene!lts, of Contractor's personnel;
              (b)    Contracto(s cQSI of insurance premiums:
              ~~     ~~~=~~ ::~~~~~~~.~:na::!:bie7 tees; the cost pergaUoniMCF being $__..Nw1A::~....._ _: Operator shall provide all fuel.
              (e}    If Operator requires Contractor to incrr:ase ?r decrease the n~mbar of Conlraclo(s personnel;
                                                                                                                              ~a-                           pa1~At et-~~~
                     ~tfle..:pal'liessl:lall!!&al~eiJ.S~~~~~·~~~~siCWPY119192}
                     194eie~~~
              {g}(t) If there i$ any ChMge ill legislation or reguta~ons.ln the area in whicll Contractor is working or other unforeseen, unusual event that altets Conlractor's
                     finandal burden.
5.    TIME OF PAYMENT
      Payment is due by Operator to Contractor as follows:
      5.1 Payment for      mobili~atton,   drilling and other viOri<: performed at applicable rates, and all otl1er applicable dlatges shaU be due, upon presentation of invoice
!here1or,upoo completion of mobilization, demobiliultlan, rig release oral the end of the month in Whfdl suCh \YOfY. was perfonned orotherdlarges are Incurred, Ylhiehever
shalf first occur. AD invoices may be mailed to Operator at thb address hereinabove shown, unless Operator does hereby designate that such invoices shall be mailed as
folloWs: _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __

      5.:2 Disputed lnvofc§ and tate P;~ym~t~ Operator shall pay alf Invoice~ wilhin                   thirty pOl days after receipt      eJ~cept   that if Operator disputes an invoice
or any part thereof, Operator shall, within fiff.een days after receipt of the Invoice, ootlfy contractor of the item disputed, speclfyiflQ the reason therefor, an<:l payment of 1he
disputed item may be wlthheld untlt $et1lement of the dispute, but timely payment shall be made of any undisp\Jied portion. Any sums (including amounts ultimately paid
with respect to a disputed Invoice} not paid within the above specified days shall bear Interest at the rate of               1112            percent or the maximum legal rate,
wflichever is tess, per month from tha due dale until paid. lr Operator does not pay undiSputed items. wilhin the above stated lime, Contractor may suspend opetaUons or
terminate tllis Contract as specified under Subparagraph 6.3.
6.    TERM:
      6.1     Duration of Contract: This COntract sl'lall remaln In full fotee and effect until driUing operations are oompleled on the well~ specified In Paragraph

                                                                                                              wel!(s)Grfsra~;:::-·==============
by··9M!A!rRGtl~~~~~!t-least.===~ia¥!l...er'ior~~ftt.\e• >!!lrl!=ieA ilel~.or-ll;<-_.l:l,ot....,u,....s_,ed"".--------------

      G.:S    Early Termination:
      (a}     By Eithe-r Party: Upon giving of written notice, either party may terminate this Contract when total toss or des1Nction of lhe rig. or a major breakdown With
Indefinite repair tlme necessitate stoppitlg operations hereunder.

                                                 (U.$ Cl of reimb!.Jt!lerneots dVe, be less tha~ would have
  been earned for _ _ _.u.:f!v..,e'-"(!!J.----- days at the applicable rate "W~hout Drill Pipe" and the actual amount due for drill pipe used in aocordance with the above
  rates: or {2) at the election Of Contractor and in lieu of the foregoing. Operator shall pay Contractor for all expenses reasonably and necessarily incurred and to
  be incurred by reason of this Contract and by reason ot such premature termination plus, a-~t.$                                                       p«wlsed, M• a   at, if ttl is GGRtfaGt
  ~na11                            aRe "e!l sr rar a jilaRaa ar ~1*!1'~1!-~ctar, iR alleitle~be •e, tl'le FarGe Haje11re Rate less aRy \IRAec;essaf)
  tallef:4~ta~ll~-~                                                    n liquidated damaaM and not as oenaltv a lump sum equal to five !5! dm at the Standby TI® Batt

  7.    CASING PROGRAM
        Operator shall have the right to designata the points at which C(l.$ing will be set and 1he manner of $e1!ing, cementing                ;:~nd   testlrlg. Opett'
                                                                                                                                                                    NCPS             lV9~5
         •
                                                        e                                                                e
a!,lvise Contractor of any subSurface condillons, or ab$tructlons (mduding, but not li.mited to, mines, caverns, slnl<. holes, streams, pipelines, power lines and
                                                                                                                                                                      _
                                                                                                                                                                  Rt~~ April,   2003

communication lines) Which Contractor might efl(X)unter while en route 1o 1he Jocailon or during operalions hereunder. 1/l the event subsurface ccmditlons cause a
craterin'g or shifting of the loc~tlon surface, or if seabed condltfons prove ufl$flt/sfactory to properly support the rig during marine operations hereunder, and

toss or damage to the           tig   or Its assocli!ted -equipment results therefrom, Operator shall, Withcvt regard to other provisions of this Crmtract. Including
Subparagraph 14.1 hereof, «tlmburse Contractor for afl such Toss or damage lncfudlng removal of debris and payment of Force Majeure Rate during repafr

and/or demoblfi:tl1tlon If iilppl/cable.

11.   EQUIPMENTCAPACITY
      Operations shall not be attempted under any COflllitions which exceed the capacity of 1he equipment specified to be used hereunder er •fllera GaRal-ar •~ater t:apiRG
~l(Ge&G-of                                                       - . -teet. Without preJUdice to 1he PfOYisions of Paragraph 14 hereunder. Contrae1or shall have the light to make
the final decision as to when an operation or atlempted o~ratiQn would exceed the capacity of specified equipment.
12,   TERMINATfON OF lOCAilON LIABILITY:
      When Contractor          hn concluded operations at the well location, Operator shall thereafter be liable ror chmage to propeny, personaT Injury or death
of any person which occurs as Jl result Of condltJons of the location and Contrar:tor shalf be refleved of such liability; provided, however, If Contrar:tor shall

subsequently rnenter upcn the location for any             reason,   Including removal of the rig, any term of the Contract relating to such reentry llctivlty shall become

appffcable during such period.

13.   INSURANCe
      Ouli~      the life of this Contract, contractor shall at Contr~ors wqJense maintain, with an Insurance compa~y or companies authorized 1o do business in the
state where !he work is 1o be perfoJ'll'led or through a self·insurance PfOQram, Insurance COYefC!96S of the kind and in !he amount set fonh in Exhibit "A", insuring the
liabilities specificany assumed by Contraelor in Paragraph 14 of this Contract. Contracfor sha!l procure from the company or companies writing said Insurance a certificate
or certificates that said Insurance is In full f¢rce and effect ami that     tne   same shalf not be canceled or materially cllaoged without ten (10} days Pfior written notice to
Operator. For liabi!iiies assumed hereunder by Contractor, its insurance shall be endorsed to provide that tile underwriters wai11e their right orsubrogaUon ~ainst Operator.
Operator will,   <1$   well, cause its Insurer to waive subrogallon against Contractor fOI' liability It assumes and shall maintain, at Operi!lor's expense, or shall setr lnS\Ife,
insurance co~~erage <1$ setrorth In Exhibit •N or 1he same kind and in the same amount as Is required of Con!ractor. insuring 1he liabilities specifically assumed by Operator
in Paragraph 14 or 1his Contract Operator shall procure from the company or companies WTiling said insurance a certifiCate or <:ertiflCSies 1hat said lnsvrance Is in hJII (Orca
and effect and that 1he same shan not be canceleo or materially <:hanged Without ten {10) day$ ptior written notice to Contr~or. Operator ano Contractor shall cause their
re$pecllve underwriters to name the other additionally insvred but only to the exteno of the lndefnl'lification obUga1lOns assumed herein.
14.   RESPONSIBILITY FOR LOSS OR OAMAGE,INOEMNJTY, RELEASE OF LIA81U1Y AND ALLOCATION OF RISK:
      14.1 Contractors Surface Equtpmeltt: Contractor S/la/1 assume liability ;it a1f times        rw damage to or destruction o1 Contractor'$ $urface l](lllipment, regard/W. of
When or how such damage or destruction occurs, and Contlactor :shall release Operator of ;my /(ability for any such foss, ~txcept loss or damage under the
provisions of Paruch toss or darrntge: the value to be dettmnlned

by agreement between Contractor and Operator iii$ cumJnt repair costs or                     100      percent of current n&W replacement cost of such equipment delivered
to the weft site.

      14.3 Contractnn; Equipment - Environmental Loss or Damage: Notwftlutandlng the provisions of Subparagraph 14.1 above, Operator shalt .assUI!ienStt rasulilng from
opetat/Oil!S unw thts Contract on account ofInJury to, desfruction of, or toss or Jmpa/rm&nt ofllfiY propeny ffgtd in or to oil,    gas, orothw mlnera1 substance or~ If at
tile flme cf1he #ct or omls.slon causing sUCh injury, destrtictiQn.Joss, or lmpalrrnettt, .said substance had not been reduced to phy.;Jcal p¢.$$eSSion above the surra~ of th~
earth, and for any lOS$ or dama~ to any fotmatfoo, strata, or reservoir beneath th-e surlace of th-e ~Jarth.

      14.7 Inspection of M~.als Fumf.slled by Operator: contractor agr6(:S to vlsuatry Inspect all materials fum/shoo by Operator b$tore using                       seme and to
notify Opetator of any apparent defects ~ Contr.lctl)r shall              not be 1/abfe for any loss or damage Te~Witing from tim use Qf material$ fum/shed by Operator, and
Operator shall relea$e Cornractor from, and shall protect, d&fend and Indemnify Contractor from end against, any :such liability.

      14.8 Contrnctors flldemnlflca1ion of Oper.ator. Contractor shall release Opeliltor of any Hab/11ty tor, and shall proti!C(. defend and Indemnify Operator from and
agafnstBIJ cJalms, demands, and ceases ofaction ofwery ldnd and c.lr.lract«. wflhout.limltandwfthout regard to-the caus& or causes thereof orthif negtlgenc4 allfnY party

or p:artz'es, arlsihg in connection herewtth In fiMw of COntractor's empk>yees or Confrlldor's subcontractors of any tier (Inclusive of any 8g(l(lt or consu1tartt fll1{}a9ed by

Confr.lctorj or their employees,. or Contractor's IIW#ees, on          account   of bO$iminat/on for l+M:h ~ Contractor or Operator, for IKJom 5uch
party Is performlti!J ~         Is   fWd to bf11egatly liablo, the responsibfl/ty therefor shaU be consldererth in (a} and (b) above, shalt be specifically applied.

      1<1. 12 Cons~Mfuent/at Danmges: Subject to at~dwfthout affecting til& provfslons of this Contractl"tlgNdlngthe payment right$ Ntd obllfPiions oftM parties or the risk

of Toss, release am:! Indemnity n"ght:t; :andobilg81Jons of thO: parties, eact1 party shan itt all~~ respot!$1~ for and hold harm/e$$ Md Indemnify the other party flim! and
against its own speclai, Indirect or consequential damage&, and the ~ agree that $pi!C(al, lrldlred cr COilSequenti<# damageS shalt biJ deem«! to JndUde, Wfthout
llmftiltion, the folfowfng: /o$S of profit or revenue; costs and expense$ resulting from ~ Interruptions; /o$S of or delay In prodUction; /o$S of or damage to the

Teasehold; loss of or tklay in dtffHng or opel3(}ng rights; cost of or loss oltJSe of property, equlpmM(, ~and ~Ices, it/Citlditrg without tlmJt.ttfOI'I ~ prov{ded by

contr.Jctots or subcontractors of every tier 01 by third partie$. Ope/a tor shall ;d all tfmes be responsible for :and hold harmless and (fldcmnl(y COf1tractor and Its $tlppli¥s,
conttactor$ :and sl.lbctlntractors of anytferfrom Btld against all cfalms, demands and causes of action of evt!l)' kind Blld clwac:ter In co~ with 5UCh spedai.lndfrec1
or consequential~ suffered by Opetator's ~ co-ventun:n;, co-lessoos, farmors, farmees, parlnl!(S :andjoint oWfH!I"S.

      U.131ndemnity Obligation: Except as otherwfs& expressly tftltlteilragtaphs 10, 12 and 14 shaltlnute to the benellt of such parties, their co-vMt~JreiS,                   co-lessees. }oint owners,       their

parent, holding am;l affiliated companies ;md the officers, d"treetors, stockholders, partners, managen;, representatives, employees, comsvltants,                                    agents,
servantS and Insurers of each. Except as otherwise provided here/11, such Indemnification and assumption$ of /lability shall not be deemed to create any lights
to Jndemn/ffcation in any person or entTty not a party to this Contra.c.t. either as e thfrd party beneficiary Qr by reason of any agreement of Indemnity betwGen

one of the parlles hereto and another person or entity not a party to tills Contract.

15.   AUDIT
      H any payment provided for hereunder Is made on 1he basis of Contractor's costs, Operator shall have 1he light to a\IQit Contractor's books and records relating
to such costs. Contractor agrees to maintain such books and recor(!s for a pertOII of two {2) years                 from the date such costs were incurred and to make such boes), tnp tank vOlume probes <1 probe Included with option for 1 addllklnal probe), and
       return flOw paddle.

2S.    ACCEPTANCE OF CONTRACT:

       The fore~golng Contract, fncludfng the provfs.fons relatfng to Indemnity, release of liability and allocation of risk of Subpamgraphs 4.9 and 6.3(c),

P8ragraph$ 10 ;:nd 12, amt Subparagraphs 14.1 through 14.12, Is acknowledged, agreed to and accepted by Operator this                          ..l_3 day of $ ep              .zo_oo.

The foregoing Contract. .Including the provisions rafatlng              to Indemnity, rt!lease of liability and allor:E>r Werke~· GG!'RpeRsatiGA AGt aRG Mafitif!le liallilill! iRGIIIGiR!I maiRI6RBAG8 aRil G\11'8 ill11if!lits ef $
      ~eatiHlf.·in)u!)'W QRe ~RI'JR 9A!~-$.                                                    far any GAB aGGiGeFit
      3.$    Other Insurance:       Exens !lability lnsuraf!C9 In tft9 11mount of $4 million dollars On excess of 3.1. 3.2 and 3.3} OptratOr will purci\AAe OEE Insurance
      In an amount not less. than $1G million dollars Insuring the llabllltle! assumed by the Operator ui\OOr this Contract.

4. EQUIPMENT, MATERIALS AND SERVICES TO BE FURNISHED BY CONTRACTOR:
     The maChinery, equipment. toOls, materials, supplies, illStruments, services and labor hereinafter listed, including any transportation required for such
items, shall be provided at the well location at the expense of Contractor vnless otherwise noted by this Contract.
      4.1    Drilling Rlg •subject to avallabutty
      Complete drilllng rig, designated by Contractor as its Rig No.                       71 r                 the major Items of equipment being:
Dra\W/Orks: Make and Model             Per rlq Inventory attached hernto and made a part hereof
Engines: Make, Model, and H.P.
            No. on Rig _______________________________________________________________________________
Pumps: No, i Make, Size, and Power __________________________________________________
          No.2 Make. Size, and Power _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
Mud Mixing Pvmp: Make. Size. MO Power ______________________________________________

Boilers: Number, Mkifmal.~ aRtl               Gllemlsals.
           4.8    Shale Shaker.
           4.9
           4.10 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
           4.11 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
           4.12 -------------~---------------------------
           4.13 - . . , - - - - - - - - - - - · - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
           ~14  ------------------------------------------------------
           4.15 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
           4.18   -----------~----------------------~------
           4.17 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
     5. EQUIPMENT, MATERIALS AND SERVICES TO BE FURNISHED BY OPERATOR:
          ihe machine!)', equipment, tools. materials, supplies, Instruments. se~s and IabOt hereinafter listed, induding any transportation required for sUCh items, .$1\all be
     provided at the well location at ltle expense or Operator unl$ss otheiWise noted by thls Contract

           5.1 Furnish al\d maintain adequate roadWay Cal wlreHne fogging s<31'Vices.
          5.18 Directional. caliper. or other special services.
          S.19 Gun or jet perforating serviCes.
          5.20 Explosives and shQoting devices.
          5.21 Formation testing, hydraulic fracturing, acldizlng and other related services.
          5.:22 Equipment fOf drill stem testlng.
          5.23 Mod JoQging services.
          5.24 Sidewall coring    service.
          5.25 Welding service ror welding bottom joints of casing. guide shoe, float shoe, float collar and in connection wilh installing of wen head equipment If required.
          5.2& Casing, tubing,linefS, screen,lloat collars, guide and float shOes and associated equipment
          5.27 C<)Siog scratchers and centralizers.
          5.28 Well head connections and all equipment to be Installed in or on well or on the premises for use in connection with testing, completion and operation of well.
          5.29 SpeciMed April, 2003
  6.     EQUIPMEN'r, MATERIALS AND SERVICES "rOBE FURNISHED BY OestGNATED PARTY:
        The machinery. equipment. tools, materials. supplies. instruments, services, and labor listed as 1he following numbered items, including any 1ransportati0n

, requiree for such items unless olhefwise spedtied, shall be provided at the well focation and at 1he ~ose of the party hereto as designate<:! by a~ X mark in the
  appropriate column.
                                                                                                                                                                                                                                                To B& Provided By and
                                                                                                                                                                                                                                                  At The Expense Of
                                                                           Item                                                                                                                                                      O~rator                             Contmctor
        6.1      Cellar and Runways ......- .........................................................- ....................... ..                                                                                                       X
        $.2      Ditches and sumps ..............................................................................................                                                                                                       X
        6.3      Fuel (located at                                                        .... ,.......................................... ..                                                                                            X
        &.4     Fuel lines (leng1h               cf rig only                           L .............................. w._ ......... . .                                                                                                                                    X
        6,5     Water at source, inclUding required permits ........................................................                                                                                                                    X
        6.6     Water well, including feie water and bottled wtru!r ........................................................................                                                                                                              X
       6.10     t..abOr to operate water well or water pump (Rig C:lliW only) ...............................                                                                                                                                                                X
       6.11     Maintenance of water well. if required .................................................................                                                                                                                X
       6.12     Water Pump ....................................................................................................... .                                                                                                    X
       6.1~     Fuel for water pump .............................................................................................                                                                                                       X
       $.14     Mats for engines and boilers, or motors and mod pumps ..............................,.. ..                                                                                                                              X
       6.15     Tr      Drill pipe protectors for Kelly joint and drill pipe running
                inside of Protection Casing..................................................................................                                                                                                           X
       6.2.1    Rate of penetration rec:ording device (Epoch (t\llctronlc) ..................................                                                                                                                                                                X
       6.22     Extra labor for running and cementlng casing (Casing crews) .......................... ..                                                                                                                               X
       6.23     Casing toots .........................................................................................................                                                                                                  X
       6.24     Power casing tongs ..................,.........................................................................                                                                                                         X
       6.25     Laydown and pickup ma<:hine .............................................................................
       6.26     Tubing toots ........................................................................................................ .                                                                                                 X
       6.27     Povrer1ubingtong ................................................................................................                                                                                                       X
       6.28     Crew Boat&. NuMber                                          .....................................................                                                                                                      NJA                                  N/A
       6.29     Service Barge ......................................................................................................                                                                                                   N!A                                  N/A
       6.30     Service Tug Boat .....................,...........................................................................                                                                                                     NIA                                  N/A
       6.31     Ral Hole ............................................................................................................ ..                                                                                                X
       G.al     Mouse Hole .....................................................................................,.................. .                                                                                                   X
       &.33     Reserve Pits ..................... ,., ................................................................................                                                                                                 X
       6.34     Upper Kelty Cock.................................................................................................                                                                                                                                            X
       6.3S     Lower Kel!yVatve ................................................................................................                                                                                                                                            X
       6.36'    Drill Pipe Safety Valve ......................................................................................,..                                                                                                                                            X
       6.37     lnsfda Blowout Preventer................................................................................,... .                                                                                                                                               X
       6.38     Drilling hole ror or driving for conductor pipe .......................................................                                                                                                                 X
       6.39     Charges, cost of bonds for public roads ..............................................................                                                                                                                  X
       6.40     Portable fOilet .....................................................................................................                                                                                                   X
       6.41     Trash Receptacle ................................................................................................                                                                                                       X
       6.42     l.iAeaf.Motlon-Shale Shaker (f'er rig Inventory} ............................................... .                                                                                                                                                           X
       &.43     Shale Shaker Screens..... ,. ..................................................................................                                                                                                         X
       6.44     Mud Cleaner ........................................................................................................                                                                                                    X
       6.45     MuO((f Contr~t- '&h.'Ot. A• • Pllge 3}
                                   Copyright It> 2003 International Assoclafloo of DrilHng Contractors
                                                                                                                                                                                                                                                     form provided by Forms On-A·Disk
                                                                                                                                                                                                                                                     (214} 340-9429 • FormsOnADisk.com
                                                                                                                                                                                                                                                                                               ~~\j~~
                                                                                                                                                                                                                                                                           NCPS 00095
                                                                                                           Revised April, 2003

7.   OTHER PROVISIONS:

                                                                                                       /

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                                                                                               I
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                                                                      I

                              (U.S. D.3yworl: Contract- 'exhibit A• ·Page 4)
                  Copyright e 2003 International Association of Orilting Contractors
                                                                                                                                                ReWs«< Apiif, 2003

                                                                                           EXHI61T"6"
                                                                                (See Subparagraph 8.3}

The following clauses, when required by taw, are incorporated in 1he Contract by reference as if fully set out:
(1)         The Equal Opportunity Clause prescribed in 41 CFR 60-1.4.
(2)         ~Affirmative Action Clause prescribed in 41 CFR 60-250.4 regarding veterans and veterans of the Vietnam era.
(3)        The Affirmative Action Clause for handicapped workers prescribed In 41 CFR 60-741.4.
(4)         The Certification of Compliance with Environmental laws prescribed in 40 CFR 15.20.

                                       (U.S. Oaywork Contract-   •ex/lib{( a·- Page   1)                              Form provided by Forms On-A-Disk
                          COpyright Q 2003 International Association of Drilling COntractors                         (2t4) 340-9429. Formso~~pcgn
                                                                                                                                                      000
                                                  EXHIBtT«C"

                                   CONTRACTORS SPECIAL PROVISIONS

1.    Contractor shall furnish initial tested annular preventer element. If the element is damaged due to destructive
      elements introduced to the mud, stripping, or excessive testing, the Operator agrees to furnish a new element

2.    Chemical Additives to the mud for preventing oxidation of the drill string and hydrogen sulfide scavengirtg
      chemicals to treat the mud or drilling fluid as necessary to remove all traces of H2S and to control oxygen
      corrosion to be furnished by the Operator.

3.    Operator shall furnish all labor, equipment and matertals to clean rig after use of oit base mud and/or completion
      fluid.

4.    Extra cost to rig up for drilling with oil base mud including, but not limited to, the cost of pit cove~. steam
      cleaners. drip pans, mud vacs and cleaning materials shall be at Operator's expense.

5.    Initial inspection of all Contractor's drill pipe, drill collars, kelly, kelly joints, valves, subs and HWDP shall be at
      Contractor's expense. All repairs, replacements and hauling for repairs will be at Contractor's expense. (The
      inspection will be to T.H. Hill, DS1, Category 3 or Its equivalent.)

6.    Subsequent inspections (including the inspection at the end of the job) of all drill pipe, drill collars, kelly, kelly
      joints, valves, subs and HWDP shall be at the Operator's expense. All repairs, replacements and hauling for
      repairs wm beat Operator's expense. (The inspection will be to T.H. Hill, OS1, Category 3 or its equivalent.)

7.    Operator shall furnish all screens tor shale shakers.

8.    Operator sh?ll furnish all potable water for Operator ard Contractor personneL

9.    Operator, Operator's representatives and Operators sub-contractors shall support Contractor's Safety Policies
      and Procedures in general and in particular, will (:amply with all Contractor's personal protective equipment
      requirements.

10.   Operator will be responsible for the provision and maintenance of any site septic systems.

11.   Contractor will provide only one size of mud pump liners. Any additional sizes required by Operator will be
      provided by Operator at Operator's cost.

12.   AU third party equipment required to nipple up/nipple down BOP equipment will be provided and paid for by
      Operator.

13.   The rates contained in this Contract are based on the rig inventory attached hereto. Any modification or addition
      to the rig requested by Operator will be at Operator's expense.

14.   Operator shall test BOP equipment at intervals as specified in federal, state or local regulations, API
      Recommended Practice or every twenty-one (21) days whichever interval is more stringent AU testing will be
      performed by an independent testing company provided and paid for by Operator.

15.   In all cases where Contractor's employees (including Contractor's direct. borrowed, special or statutory
      employees) are covered by the Louisiana Worker's Compensation Act, La. R. S. 23:1021 et seq., Operator and
      Contractor agree that all work and operations performed by Contractor and its employees pursuant to this
      agreement are an integral part of and are essential to the abl!ity of Operator to generate Operator's goods,
      products and services, Furthermore, Operator and Contractor agree that Operator is a statutory employer of
      Contractors employees for purposes of La. R. S. 23:1061 (A) {3). Notwithstanding Operator's status as a
      statutory employer or special employer (as defined in La. R S. 23:1031 (C)) of Contractors employees,
      Contractor shall remain primarily responsible for the payment of louisiana Worker's Compensation benefits to its
      employees, and shall not be entitled to seek contribution for any such payments from Operator.

16.   Operator, its parent, subsidiary and affiliated corporations, as well as the employees, officers and directors of
      each (collectively, •opera lor") is cognizant of the Nabors Dispute Resolution Program and wishes to become an
      Electing Entity, as defined in that Program. Accordingly, Operator and Nabors Industries, Inc. ('Nabors") hereby
      agree that Operator is an Electing Entity as to all Disputes between Operator and the present and former
      Employees and Applicants of Nabors pursuant to the Nabors Dispute Resolution Program as it currently exists
      and as may be amended from time to time. Jn the event the Program is amended, Nabors agrees to provide a
      copy of the amendment(s} to Operator. Operator may withdraw this election to participate in the Program at any
      time by giving notice of such withdrawal to Nabors, such revocation to be effective with respect to any claims not
      yet institute<;! as of the date of revocation. Operator unde~tands that it is bound by the terms of the Program With
      respect to all Disputes with Nabors employees, regardless of whether such Dispute is initiated by the employee or
      by Operator. Operator and Nabo~ acknowledge that the Program does not apply to disputes between Operator
      and Nabors and that the Program does not alter the terms of any indemnification agreement between them.

17.   In the event Operator elects to drill a substitute well it shall be Operator's obligation to advise Contractor in writing
      of such change.      Notwithstanding Operator's failure to notify Contractor of such change, the terms of this
      Contract shall apply to such substitute well as if such substitute well were the well specified in Paragraph 1 of the
      Contract.

                                                                                                                        Q
                                                                                               Exhibit_C_Ol_Texas_~W
                                                                                                       NCPS 000954
                                     NABORS DRILLING USA, LP
                                                 Rig No. 712
                                             Diesel Electric Land Rig
                                                                                                            fill~
DRAWWORKS:         Mid - Continent U712 EA, with an input rating of 1,000 horsepower, Baylor 6032 Dynamatic brake,
                   crown-o-matic and Foster catheads. Drum is lebus grooved for a 1 1/4" drilling line.

PRIMARY POWER:     Three caterpillar D-399 engines rated at 1,215 horsepower each, driving three KATO 1030 I0N
                   generators with a Ross Hill SCR system.

MAST:              Dreco 136' cantilever, 136' dear height x 21' base at floor. API static hook load of 571,000 lbs.   w/ 10
                   lines strung.

SUBSTRUCTURE:      Dreco "Slingshot", with a 22' floor height and 18' dear height under the rotary beams. Substructure is
                   designed for a 600,000 lbs. casing load simultaneous with a setback load of 350,000 lbs.

MUD PUMPS:         Two Gardner Denver PZ-10 triplex mud pumps rated at 1,300 horsepower each, driven by one 1000
                   horsepower GE 752 motors each.

MUD TANKS:         Two tank, 970 barrel system with a 75 barrel slugging compartment in the suction tank. Mud system is
                   equipped with stirring guns and clean out gates. Mud mixing and 10 HP mud agitators.

SOLIDS CONTROL:    12 cone desUter.
                   2 cone desander.
                   Two linear motion shale shakers.

WATER STORAGE:     One 500 barrel tank.

FUEL STORAGE:      One 12,000 gallon tank.

HOOK/BLOCK:        BJ 5350 Hook and National 545G Bloc~ both rated at 350 tons.

SWIVEL:            CE LB 400. 400 ton.

ROTARY:            GD 27 1/2".

ACCUMULATOR:       Koomey, 180 gallon, eight station, with an electric powered triplex pump, 1:\tt- A-tJc. - ~•                                   b-tl           (.)/r •      "r,        -
3.    DEPTH:
     3.1 Well Depth: The well(s) shall be drilled to a depth of approximately                TBA               Feet,~---------------
fG!matlaR, " 11isAe"er is deejler, but the Contractor shall not be required hereunder to drill said well(s) below a maximum depth of - - - - - - - - feet, unless
Contractor and Operator mutually agree to drill to a greater depth. ** Not to exceed capacity of rig as described on the rig Inventory attached herein.
4.   DAYWORK RATES:
     Contractor shall be paid at the following rates for the work performed hereunder.
      4.1 Mobilization: Operator shall pay Contractor a ffieililizaliGR fee sf$                                     Gf a mobilization day rate of$
per day. This sum shall be due and payable in full at the time the rig is rigged up or positioned at the well site ready to spud. Mobilization shal'l-:in-cl-:-u..,-de-:- - - - - -
Move-in and rig up on the new well site.
*Plus actual costs of trucks, cranes and permits and                                              for man-lifts, light towers and string up services.
      4.2 Demobilization: Operator shall pay Contractor~

      1 3 Me •ing Rate· {)~JfiRg the !iffie the rig is iR !faRsit te ar ffeffi a erill site, ar be~ eaR erill sites, sommeRGiR!l OR - - - - - - - - -
-Gootfastmm-¢.$                                      Jl8F ~' 2003 International Association of Drilling Contractors
                                                                                                                                 Form provided by Forms    On·A·Dls~~~S~·,)
                                                                                                                                (214) 340-9429 • FormsOnADisk.co      t\"             /
                                                                                                                                                          NCPS 0                S6
                                                                                                                                                                      Revised April, 2003

If under the above column 'With Drill Pipe" no rates are specified, the rate per twenty-four hour day when drill pipe is in use shall be the applicable rate specified in the
column "Without Drill Pipe" plus compensation for any drill pipe actually used at the rates specified below. computed on the basis of the maximum drill pipe in use at any
time during each twenty-four hour day.
                                                                           DRILL PIPE RATE PER 24·HOUR DAY
                                                                                                        Directional or
            Straight Hole                               Size                Grade                Uncontrollable Deviated Hole                         Size                  Grade
                 N/A              perft.                                                                      N/A               perft.
                 N/A              perft.                                                                      N/A               perft.
                 N/A              perft.                                                                      N/A               perft.

Directional or uncontrolled deviated hole will be deemed to exist when deviation exceeds -----degrees or when the change of angle exceeds - - - - -
degrees per one hundred feet.
      Drill pipe shall be considered in use not only when in actual use but also while it is being picked up or laid down. When drill pipe is standing in the derrick, it shall not
be considered in use, provided, however, that if Contractor furnishes special strings of drill pipe, drill collars, and handling tools as provided for in Exhibit "A", the same shall
be considered in use at all times when on location or until released by Operator. In no event shall fractions of an hour be considered in computing the amount of time drill
pipe is in use but such time shall be computed to the nearest hour, with thirty minutes or more being considered a full hour and less than thirty minutes not to be counted.                        ~

      4.5 Repair Time: In the event it is necessary to shut down Contractor's Ji9.)for bep~~irs, excluding routine rig servicing, Contractor shall j!;ll~~)
compensation at the applicable rate for such shut down time up to a maximum             of{<>~ ~urs ror any one rig repair job, but not to exceel';tf.;'"!,, f3Qi "ho!s                             I
of such ~mpensation for any calendar month. Thereafter, Co~tractor shall be compensated at a rate of$                      zero !0\         per twenty-four (24) hour day. Routin~ rig              I
servicing shall include, but not be limited to, cutting and slipping drilling fine, changing pump or swivel expendables, testing BOP equipment, lubricating rig, and

~~IT:~c~b;I~~:~S ::~t~;~tenance. When two !2) mud oumps are reouired to be used simultaneously the time soent changing expendable pump parts shal~
                                           100% of the Operating Day Rate
      4.6 Standby Time Rate: $               f              per twenty.four(24) day. Standby time shall be defined to include lime when the rig is shut down although in readiness
to begin or resume operations but Contractor is waiting on orders of Operator or on materials, services or other items to be furnished by Operator.
      4.7 Drilling Fluid Rates: When drilling fluids of a type and characteristic that increases Contractor's cost of performance hereunder, including, but not limited to,
oil-based mud or potassium chloride, are in use, Operator shall pay Contractor in addition to the operating rate specified above:
               (a)   $_      _ _ _ per man per day for Contractor's rig-site personnel.
               (b)   $_        __per day additional operating rate; and
               (c)  Cost of all labor, material and services plus       twentv·four !24!        hours operating rate to clean rig and related equipment.
                                        100% of the Operating Day Rate
      4.8      Force Majeure Rate: $ f                            per twenty-four (24) hour day for any continuous period that normal operations are suspended or cannot be
canried on due to conditions of Force Majeure as defined in Paragraph 17 hereof. It is, however, understood that subject to Subparagraph 6.3 below, Operator
can release the rig in accordance with Operator's right to direct stoppage of the work, effective when conditions will permit the rig to be moved from the location.
      4.9      Reimbursable Costs: Operator shall reimburse Contractor for the costs of material, equipment. work or services which are to be furnished by Operator as
provided for herein but which for convenience are actually furnished by Contractor at Operator's request, plus                fifteen 115! percent for such cost of handling. When,
at Operator's request and with Contractor's agreement, the Contractor furnishes or subcontracts for certain items or setvices which Operator is required herein
to provide, for purposes of the Indemnity and release provisions of this Contract, said Items or setvlces shall be deemed to be Operator furnished items or
setvlces. Any subcontractors so hired shall be deemed to be Operator's contractor, and Operator shall not be relieved of any of Its liabilities In connection
therewith. Notwithstanding the foregoing, Contractor shall not be obliged to purchase any Items on behalf of Operator.
      4.10 Revision In Rates: The rates and/or payments herein set forth due to Contractor from Operator shall be revised to reflect the change In costs If the costs of any
of the items hereinafter listed shall vary by more than            zero COl     percent from the costs thereof on the date of this Contract or by the same percent after the date of
any revision pursuant to this Subparagraph:
              (a}    Labor costs, including all benefits, of Contractor's personnel;
              (b)    Contractor's cost of insurance premiums;
              (c)    Contractor's cost of fuel, including all taxes and fees; the cost per gallon!MCF being $ NJA                 ; Operator shall provide all fuel.
              (d)    Contractor's cost of catering, when applicable;
              (e)    If Operator requires Contractor to increase or decrease the number of Contractor's personnel;
              (~GaRtFaGtar's east af sjlare jlafto aRil svpplies "'itA ~mliAIJ that sYGR spare paFts aAd sllpplies GGAslitute _ _ _ _ parseR! ef IRa GperaliA€1 rate
                     aRd tllal tile paRies sf:lallllse IRe IJ.S. 8\l;eau ef laear Stalistiss Oil Field ami Gas Fielll O;illiA!l MasRiAer, PraduGer PFise lmlex (Sel'ies 10 ..,Pif119102)
                     ta aeteFmiRe ta llat eKteRt a prise "ariaRse !las eeGilR'ell iA sale spare flaFts aRe s~Jpplies;
              {g}(f) If there is any change in legislation or regulations in the area in which Contractor is working or other unforeseen, unusual event that alters Contractor's
                     financial burden.
5.    TIME OF PAYMENT
      Payment is due by Operator to Contractor as follows:
      5.1 Payment for mobilization, drilling and other work performed at applicable rates, and all other applicable charges shall be due, upon presentation of invoice
therefor, upon completion of mobilization, demobilization, rig release or at the end of the month in which such work was pertormed or other charges are incurred, whichever
shall first occur. All invoices may be mailed to Operator at the address hereinabove shown, unless Operator does hereby designate that such Invoices shall be mailed as

follows:-----------------------------------------------
  5.2 Disputed Invoices and late Payment: Operator shall pay all invoices within thlrtv !30) days after receipt except that if Operator disputes an invoice
or any part thereof, Operator shall, within fifteen days after receipt of the invoice, notify Contractor of the   ~em   disputed. specifying the reason therefor, and payment of the
disputed Item may be withheld until settlement of the dispute, but timely payment shall be made of any undisputed portion. Any sums (including amounts ultimately paid
with respect to a disputed invoice) not paid within the above specified days shall bear interest at the rate of               1 112        percent or the maximum legal rate,
whichever is less, per month from the due date unUI paid. If Operator does not pay undisputed items within the above stated time, Contractor may suspend operations or
terminate this Contract as specified under Subparagraph 6.3.
6.    TERM:
      6.1     Duration of Contract: This Contract shall remain in full force and effect until drilling operations are completed on the          well~          specified In Paragraph
            er for a terrn af                                                                                                                                                                       I
                                                                                                                                                                                                    Ik
1 above,                                               ,.commencing on the date specified In Paragraph 2 above.                                                      .
      6.2     ElltenslaR ef+arm· Operater         rna~ extaA9 !Fie teFm eftflis GaAtraet for                 "ail(s) erfora flSRGd of

B) gi iAg Aelise to GeRtrastar at least             t);;_lf;pt';J;j/f/;)/!},t ~~eA ~~~~:/;. b'{.(-'1 ;;;;~..>(} h-9$ JlJ ~ 11;                                    /.il ;;, GQIAIJ ~
      6.3     EartyTermlnatlon:.t'..:yt.o~tc/JJ1i~ I we//~~ ff;JL;I/~1::; 6 f-l/,~1/J Sv~J-t:.4-1-/i:;>/Jt.()rv.t/f~ ~~~tJed
                                                                                                                        9
                                                                                                                             JA~.,S ,TUIIf.J
      (a)     By Either Party:      ~~ ~ivfn'gvj tv1Jtten ~~tice, either party may termmate this Contract when total loss or destruction of the rig, or a major breakdown With

                                                                                                                                                                              @
indefinite repair time necessitate stopping operations hereunder.

                                                   (U.S. Daywork Contract· Page 2)                                                     Form provided by Forms On-A-Disk
                                Copyright© 2003 International Association of Drilling Contractors                                     (214) 340·9429 • FormsOnAOisk.com              ~\~~.
                                                                                                                                                               NCPSO            ~57/
                                                                                                                                                                                        .........
                                                                                                                                                                                              Revis!ld April, 2003
       (b)     By Operator: Notwithstanding the provisions of Paragraph 3 with respect to the depth to be drilled, Operator shall have the right to direct the stoppage of the
work to be performed by Contractor hen!under at any time prior to reaching the specified depth, and even though Contractor has made no default hereunder. In auch event,
Operator shall reimburse Contractor as set f~ In Subparagraph 6.4 hereof.
       (c)     By Contractor: Notwithstanding .the provisions of Paragraph 3 with respect to the depth to be drilled, in the event Operator shall become Insolvent, or be
adjudicated a bankrupt, or fila, by way of petition or answer, a debtor's petition or other pleading seeking adjustment of Operator's debts, under any bankruptcy or debtor's
relief laws nrm or hereafter pravaillng, or if any sucti be filed against Operator, or in case a recaiver be appointed or Operator or Operator's property, or any part thereof, or
Operator's affairs be placad ln the hands of a Creditor's Committee, or, following three business days prior written notice to Operator if Operator does not pay Contractor
within the lime specified In Subparagraph 5.2 all undiSpUted items due and owing, Contractor may. at its option. (1) elect to terminate further performance of any work under
this Contract and Contractor's right to compehsallon shal.l be as set forth in Subparagraph 6.4 hereof, or {2} suspend operations until payment is made by Operator ln whiCh
event the standby llme rate contained. in Subparagraph 4.6 shall apply until payment is made by Operator and operations are resumed. In acMitlon                                      wContractor's rights
to suspend operations or terminate performance i.mder this Paragraph, Operator hereby expressly agrees to protect, defend and indemnify Contractor from and
against any claims, demands apd causes of action, Including all costs of cietense1 In favor of Operator, Operator's co-venturers, co-lesseeS and joint owners, or
any other parties arising out              of any drilling comtr(Jtments or obilgatJom; contained In any ltN,!Se, farmout agreement or other agreement. which may be affected
by such suspSTision of operationn; or termination of performance h.ereunder.
       6.4 ·Early Termination Compensation:
       (a)     Prior to Commencement: In the event Opamtor termjnates this Conlract prior to commencement of operations hereunder, Operator shall pay Contractor as
liquidated damages and not as a penalty a sum equalletl=!e .staRd~· lime ra~                      (Subparajjrapll-4,6~ a Jump                                                 sum of$          140 (!(!(!
       (b)     Prior to Spudding: If such termination occurs after commencement of operations but prior to the Gpudding of the well, Operator shall pay to Contractor the sum
or the following: (1) all expenses reasonably and. necessarily lncuired ar~d tQ be incurred by Contractor by reason of the Contract and by reason of the premature termination
olll)e work, in«ludiryg th,e expense of drilling or other mw rnem!)!jrs and superllislon directly asSigned to the rig; (2} ten percent (1 0%} of the amOtint of such reimbursable
ex!leflSBS; and (a) a slim cafcutated at. the standby !lme rate for an !lme from the date upon whiCh Contractor commences any operations hereunder down to such date
subsequent to the date of termination as wiD. alford Contramor rea&onabla time to dismantle its rig and equipment iJFG>4daEl, l=!go e 'llll~;-<,11REa~·"teoe>~'el!'rF,-lfif-IIIRmisKC;;'RO\f!SIONS

1. CASING PROGRAM (See Paragraph 7)

                               Hole                  Casing                        Weight                        Grade                    Approxlmat&                     Walt on Cement
                                Size                  Size                                                                                Setting Oefnh                        Time
  Conductor                              in.                        in.                        lbslft.                                 _ _ _ _ _ ft.                     _ _ _ _ _ _ hrs

  Surface                                ln.                        in.
                                                                                                                                       _ _ _ _ _ ft.                     _ _ _ _ _ _ hrs
                                                                                               lbslft.
  Protection                             in.                        in.                        lbslft.                                 _ _ _ _ _ ft.                     _ _ _ _ _ _ hrs

                                         ln.                                                   lbslft.                                  _ _ _ _ _ _ It                   _ _ _ _ _ _ hr.;
                                                                    in.
  Production                             ln.                                                   lbslft                                  _ _ _ _ _ It                                  hr.;
                                                                    in.
  Liner                                  in.                        in.                        lbslft.
                                                                                                                                       _ _ _ _ _ It                      ------
                                                                                                                                                                         _ _ _ _ _ _ hr.;

                                         in.                        in.                                                                _ _ _ _ _ _ It                    _ _ _ _ _ _ hrs
                                                                                               lbslft

2. MUD CONTROL PROGRAM (See Subparagraph 8.2)

                      Depth Interval
                           (ft)
                                                                                                              Weight                                                         Water Loss
                                                                                                            (lbsJgal.)                                                          (cc)
             From                            To                           Type Mud

Othermudspeefficatlons: _ _ _ _ _ _ _ _ _-'-..:.....-_.__ _ _ _ _ _ _ _ _ _ _....,-_ _ _ _ _- - - - - - - - - - -

3. INSURANCE {See Paragraph 13}
      3.1      Adequate Workers' Compensation Insurance complying wltll State Laws applicable or Employers' liability lnsutance with limits or$                          one 111 million
               covering all of Contractor's employees working under this Contract.
      3.2      Commercial {or Comprehensive} General liability lnsutan<:(l, Including contractual obr.gations ·as respects this Contract and proper coverage for all
               other obUgatJons assumed in thla Contract. The limit shall be s_,.ooo..,..,r...,1!um!!ll,.ll!oo.:n...__ _ _ _ _ combined single limit per occurrence for Bodily Injury and
               Property Damage.
      3.3      Automobile Public Liability Insurance with limits of$         one 111 million             for the .lr

  B.O.P. ClOsing Unit:
  B.O.P. Accumulator;

      4.2   Derrick timbers.
      4.3   Normal strings of drill pipe and dnll collars specified above.
      4.4   Conventional dlift indicator.
      4.5   Cin:ulatlng mud pi!$.
      4.6   Necessary pipe racks and rigging up material.
     4.7    WO!'Iilalslal'age far m11~ aRe shemisals.
     4.8    Shale Shaker.
     4.9

     4.10   -----------~--------------------------------------------
     4.11 - - - , . - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
     4.12 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
     4.13 -..,.---'------------------------------------~-~~~~~
     4.14 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ; . . , . . ; . . - - - -
     4.15 - - - - - - , - - - - - - ; _ _ ; _ __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _---,...,---,-;__------
     4~16   -----,----------,--------------------'--..,------,...-
     4.17   --------~~-------------------------------------~~------
5; EQUIPMENT, MATERW..S AND SERVICES TO BE FURNISHED BY OPERATOR:
     The ma<:hlnery, equipment. tools, material:~, supplies, inslruments, services and labor hereinafter listed, inclUding any transportation required for such Item$, Shall be
provided at the well location at the expense of Operator unless otherwise noted by this Contract.

     5. f    Fumish and maintain adequate roadway and/or canal to location, rlght-of-way, Including rlghts-of-way ror fuel and water lines, river crossings, highway
             crossings, gates and cattle guards.
      5.2 Siake.lcicatlon, clear  an.d    grade location. and provide turnaround, including surfacing when necessary.
      5,3 Test tanks With pipe and fittings.
      5.4 Mud stornge tanks wito pipe and fittings.
      5.5 Separator With pipe and fittings.
      6.6 Labor and materials to connect and disconnect mud tank, test tank, and mud gas separator.
      5.7 LabOr to.dlsconnect and clean test tanks and mud gas Separator.
      5.8 Drilling niud, chemicals; lost circi.Jiatlon materials and other additives.
      5.9 Pipe and connections foro~ circulating lines.
      5.10 Labor to lay, bury andrecover oil circulating 11nes.
      5.11.. Drilling bits, ·reamers•. reamer cutters, stabilizers and special tool.s.
      5.1.2 Contract fishing tool sei'VIces and tool rental.
      5;13 Wire line cere bitS or heads, core barrels and wire Hne core catchers if required.
      5.14 Convenllonal core bits, core catchers and core barrels.
     ·5.15 Diamond core barrel with head.
     M& Cement and Cemeriung service.
     5.17 EleCtriCai wiretine JOgging services.
     5.111 Directlonsl, caliper, or o1her special services.
     5.19. Gun orjet perforating servlce3.
     s.20 Explosives and shooting devices.
     5.21. · Formation testing, hydraulic fracturtng, acidizing and other related services.
     5.22 Equipment for i:lrill stem testing.
     5.23 · Mud logging services.
     5.24 ~id~ll coring sei'/lce.
     5.25 Welding SEl!VIce for wekling bottom joints of casing, guide shoe. float shoe, float collar ani:lln connection with insta:lflng of well heai:l equipment If required.
     5.26. Casing, tubing, finers, screen, Hoat collars, guide and float shoes and associated equipment.
     5.27 Casing scra~ers. and centralizers.
     5.28 Well head cOnneCtions and all equipmant to be Installed In or on well or on the premises for use in connection With testing, completion and operation of well.
     5.29 Special or added storage ror mui:l and chemicals.
     5.3.0 Casinghead, API series, to confonn to that shown for the blowout preventers specified In Subparagraph 4.1 above.
     6.31 Blowout preventer testing pad\off and testing services.
     5.32 Replacement of BOP rubbers, elements and seals. if required, after initial test
     5.33 Casing Thread Protectors and CaGing Lubricants.
     6.34 rbS training and equipment as necessary or as required by law.
     5.35 Slte.septic systems.
     5.36      Ditching around rig and location
     5.37      Third party BOP testing urvlce

     5.38 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
     5.39 --------------------~~----~---------------------------------------------------
     5.~ ------------~----------------------------------------------------------------------~
     5A1 ------~---------------'-------------------------------------------~--~--~--~-----
     5A2 -----------------------------~~-------------------------------------------------
     6.43 ------------------------------------------------------------------------~--~---
     5.M ----------------~------------------------------------------------------------~-
     5.~ --~----------------------;__----------------------------------------------~~---
     5.~-------------------------------------------------------------------------,...-----
     5.47 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
     5.~ -----------------~------~----------------------------------------------------~
     5.49 - - - - - - - ' - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ' - - - - -
     5.50 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

                                                                                                                                                                                 ····~"\    ,
                                                                                                                                                                                           ..
                                         (U.S. DaywotkContract • •Exhibit A·· P;tgt~ 2)
                          Copyright Q 2003 International Association of Drilling Contraetors
                                                                                                                                   Fonn provided by Forms On-A-Disk~- C'· '~\
                                                                                                                                  {214) 340-9429 • FormsOnADisk.com "X\)>J~f' i

                                                                                                                                                     .        NCPS               0~63
                                                                                                                                                                                             Revised April, 2003
6.    EQUIPMENT, MATERIALS AND SERVICES TO BE FURNISHED BY DESIGNATED PARTY:

      The machinety, equipment. tools, materials, supplies, instruments, sefVices, and labor listed as the folloWing numbered items, Including any transport.atlon
required for such items unless otherwise specified, shall be provided at the well location and at the expense of the party hereto as designated by an X mark In the
appropriate column.
                                                                                                                                                           To Be Provided By and
                                                                                                                                                             At The Expense Of
                                                                       Item                                                                     Operator                            Contractor
      6.1    Cellar and Runways ............................................................................................                      X
      6.2    Ditches and sumps ..............................................................................................                      X
      6.3    Fuel (located at                                                        .................................................             X
      6.4    Fuel Lines (length              of rig only                           ) .................................................                                                  X
      6.5    Water at source, induding required permits ........................................................                                   X
      6.6    Water well, induditlg required permits ................................................................                               X
      6.7    Water lines, including required permits ...............................................................                               X
      6.8    Water storage tanks                                         capacity (Per ng lnventoty) .............. ..                                                                  X
      6.9    Potable water and bottled water ....................................................................... .                             X
     6.10    Labor to operate water welt or water pump {Rig crew only)...............................                                                                                    X
     6.11    Maintenance of water well, If required .................................................................                              X
     6.12    Water Pump ........................................................................................................                   X
     6.13    Fuel for water pump.............................................................................................                      X
     6.14    Mats for engines and boilers, or motors and mud pumps ...................................                                             X
     6.15    Transportation of Contractor's property;
             Move ln ........................................·........................................................................      See Paragraph 4.1
             Move out .............................................. ;................................................. :........... ..     See Paragraph 4.2
     6.16    Materials for "boxing in" rig and derrick ...............................................;....,........ ..                            NJA                                 NJA
     6.17    Spedal sirlngs of drill pipe and drill collars as follows:
             Any required                                                                                                                          X

     6.18   Kelly joints, subs, elevators, tongs, slips and BOP rams for use with special
            drill pipe ..............:...............................; ....................;...........................................            X
     6.19   Drill pipe protectors for Kelly joint and each joint
            of drill pipe running Inside of Surface Casing as required,
            tor use with normal strings of drill pipe .............................:..................................                             X
     6.20   Drill pipe protectors for Kelly joint and drill pipe running
            Inside or Protection Casing .........................................,., .•:......................, ............ .                     X
     6.21   Rate of penetration recording device (Can rig el&ctronlc) ..................................                                                                                 X
     6.22   Extra labol' for running and cementing casing (Casing crews) ............................                                              X
     6.23   Casing tools ...........................................................................:.............................                 X
     6.24   Power casing tongs ........................,....................................,...............................                       X
     6.25   Laydown and pickup machine ............,.~ .......... :.....................:.............................                             X
     6.26   Tubing toots ........................................'.. :........ :, .........................;...................~ ... ;..           X
     6.27   Power tubing tong ... ;......:....... ;........... :.............. ;,,;,:,.;••••:.........:..... ;....... :; .........,•.;.;.
     6.28   Crew Boats, Number_..;..._ _ _ _ _.....................................................                                               NIA                                  NIA
     6.29   Service Barge ......... ;.............................:.......;.............:...................... :.................. ..            NJA                                  N/A
     6.30   Service Tug Boat ...................................................................;.......................;... ..                   NJA                                  NIA
     6.31   Rat Hole ..................................................................;..............:.... ;..............:.....:..               X
     6.32   Mouse Hole .....................................:.............:..........................:..........................                   X
     6.33   Reserve.Pits .................;.................:.............................,,. .........:....................:..... ..              X
     6.34   Upper Kelly Cock.................................;..........·............... ,.....................................                                                          X
     6.35   Lower Kelly Valve .....................................;............................,.............................                                                          X
     6.36   Orlll Pipe Safety Valve ........................:.......;..:.......;............;......:.... ~ .........~ ......... .                                                       X
     6.37   Inside Blowout Preventer: .................................;.......................................:........ ..                                                             X
     6.38   Drilling Hole for or driving for conductor pipe.~ ...............:•.•. ,........:...................;.. .                              X
     6.39   CHarges, cost of bonds:ror public roads ......:..................................:.................. ..                                X
     6.40   Portable Toilet .......................................:...........................................;.................                  X
     6.41   Trash Receptacle ..................................:.....................:.......................................                      X
     6.42   ~Shale SHaker (Per rlg lnv&ntory) ......................................,........ ,                                                                                         X
     6.43   Shale Shaker Screens................,........................................................................ .                        X
     6.44   Mud Cleaner ............. ;.........................................................:.................~; .............                 X
     6.45   Mud/Gas Separator ........... ;.................................................................................                       X
     6.4&   Desander ................................................:.....................;............................:..........                                                     X
     6.47   Desilter ...................................,. ...............;................ ;...........................................                                                X
     6.48   Degasser (Per rig Inventory) .........;••.,......., .........................................,.... ;.. ,... ..                                                              X
     6.49   Centrifuge .........................;..................................................................................                X
     6.50   Rotating Head .....................................................................................................                    X
     6.$1   Rotating Head Rubbers .......................................................................................                          X
     6.52   Hydraulic Adjustable Choke ......................................................................;.........                            X
     6.63   Pit Volume Totalizer ............................................................................................                      X
     6.54   Communication, type                   CCellular phone for rig usg ontvl                                        ........... ..                                               X
     6.55   Forklift, capacity            Model JLG G9-43A INOUSA. LP prgferred model! or a
            JLG G10-55A !10,000 lb Uft With O\ltrigge!Jl With a Star Industries gulcJs·Iach
            TMS boom Model1302..JLG                                                 .                                                              X
     6.56   Corrosion Inhibitor for protecting drill string ....... ;.................................................                             X
     6.57
     6.58
     6.69
     6.60

                                                                                                                                                                                                        .. ~···- ........
                                                                                                                                                                                                    /
                                                   (U.S. Oeywork CQnt~ • "Exhibit A"· Page 3)                                                                   Form provided by Forms On-A-Disk/            . :
                               Copyright e 2003 International Association of Drilling Contractors                                                               (214) 340-9429 • formsOnADisk.~.,:. ·           __.

                                                                                                                                                                                       NCPS\~foa64
     7.   OTHER PROVISIONS:

                                    (U.S. Daywork Contract· 'Exhibit A"- Page 4)
                        Copyright C 2003 International Association of Drilling Contractors

----------------------------------------·-··---·-----·---·----·---------
                                                                                                                                                   Revissd April, 2003

                                                                                         EXHIBlTwB"
                                                                                 (See Subparagraph 8.3)

The following clauses, when required by law, are Incorporated in the Contract by reference as if fully set out
(1)         The Equal Opportunity Clause prescribed in 41 CFR 60·1.4.
(2)         The Affirmative Action Clause prescribed in 41 CFR 60-250.4 regarding veterans and veterans of the Vietnam era.
(3)         The Alflrmallve Action Clause for handicapped workers prescribed in 41 CFR 60-741.4.
(4)         The CertiflCS.tion or Compliance with Environmental Laws prescn'bed in 40 CFR 15.20.

                                                                                                                                                               ,.. ... :-·-......
                                       (U.S. Daywori< Cootract • "Exhibit$"· PIS<}& 1)                                   Form provided by Forms On·A·Disk /'. . .
                          Copytlgllt C 2003 lntemalional Association of Drilling Contractors                            {214} 340.9429 • FormsOnADisk.com 1 ~·'

                                                                                                                                              NCPS~66
                        -----·-------·---·--··--------------------------,

                                                EXHIBIT "C"
                                CONTRACTORS SPECIAL PROVISIONS

1.    Contractor shafl furnish initial tested annular preventer element. If the element is damaged due to destructive
      elements introduced to the mud, stripping, or ex;;essive testing, the Operator agrees to furnish a new element.

2.    Chemical Additives to the mud for preventing oXidation of the drill string and hydrogen sulfide scavenging
      chemicals to treat the mud or drilling fluid as necessary to remove all traces of H2S and to control oxygen
      corrosion to be furnished by the Operator.

3.    Operator shall furnish all labor, equipment and materials to clean rig after use of oil base mud and/or completion
      fluid.

4.    Extra cost to rig up for drilling with oil base mud including, but not limited to, the cost of pit covers, steam
      cleaners, drip pans, mud vacs and cleaning materials shall be at Operator's expense.

5.    Initial inspection of all Contractor's drill pipe, drill collars, kelly, kelly joints, valves, subs and HWDP shall be at
      Contractor's expense. All repairs, replacements and hauling for repairs will be at Contractor's expense. {The
      inspection will be to T.H. Hill, OS 1, Category 3 or its equivalent).

6.    Subsequent inspections (including the inspection at the end of the job) of all drill pipe, drill collars, kelly, kelly
      joints, valves, subs and HWDP shall be at the Operator's expense. All repairs, replacements and hauling for
      repairs will be at Operator's expense; {The inspection will be to T.H. Hill, DS1, Category 3 or its equivalent).

7.    Operator shall furnish all screens for shale shakers.

8.    Operator shall furnish all potable water for Operator and Contractor personneL

9.    Operator, Operator's representatives and. Operator's sub-contractors shall support Contractor's Safety Policies
      and Pr.oce198 S.W.3d 240, 249 (Tex. App.-San Antonio 2006, orig.
       proceeding). Most recently; the San Antonio Fourth Court of Appeals found that the
       beneficiaries of a deceased Nabors ernployee were bound by the decedent's agreement to
       arbitrate pursuant to Nabors' DRP. Nabors Drilling USA, LP v. Pena, 385 S.W.3d 103 (Tex.
       App.-San Antonio 20 12).

                It is undisputed that Mr. De La Garzat as an NCPS employee, agreed to be botu1d by the
       DRP and to submit all claims against the Company to arbitration. There is no question that
       PVOG~ as an Electing Entity, is a member of the Company and is, therefore, entitled to the
       bene·fits of the DRP. Thls lawsuit clearly arises out of Mr. De La Garza's employment with
       NCPS and he has filed a claim against the Company. Therefore, the DRP is applicable to this
       matter. Accordingly, PVOG fonnally requests that you dismiss the present civil suit against it
       and initiate the claim in arbitration. Should you fail to voluntarily do so., we are prepared to
       proceed with a Motion to Compel Arbitration and will seek to abate the claims against PVOG
       pending resolution of the Motion to CompeL
04/20/2015 MON    18~33     FAX     44 4   John David Hart                                                               il!004/040

                           GALLOWAY
                           JOHNSON

        GjiBs              TOMPKINS
                           BURR AND
                           SMITH

                               Texas • Louisiana • M16sourl • MISsissippi • Alabama • Florida • Georgia
       Mr. .John Hart
       PageJ

                 We look forward to receiving your response. In the event you have any questions or
       concerns~   please do not hesitate to contact us.
                                                                       Sincerely,                 _______..

                                                                   ~-~---------                               ........

                                                                       Thomas J. Smith
                                                                       Kelly C. Hartmann
       TJS/KCH/ABH
       Attachments

       cc:       Via Ft1csimile
                 Benjamin A. Escobar, Jr.
                 Brit T. Brown

                 Via   Ft~csimile
               Conrad Bodden

               Via Facsinrile
               J. Javier Gutierrez
               Ana Laura Gutierrez

                 Via Facsinrile
               Douglas E. DiJley
               Hella V. Scheuerman
               Miguel E. Dilley
                                                     THE LAW OFFICES OF

                                                JOHN DAVID HART
                                                                                                           METRO:
         BOARD CERTIFIED                             WELLS FARGO TOWER                                  (817) 654-1922
TEXAS BOARD OF LEGAL SPECIALIZATION              201 MAIN STREET, SUITE 1720                                  FAX:
         CIVIL TRIAL LAW                          FORTWORTH, TEXAS 76102                                (817) 332-5858
    PERSONAL INJURY TRIAL LAw                     TELEPHONE(817)870-2102
                                              E-MAIL: JOHNHART@HARTLA W.COM

                                                      July 30, 2015

         VIAE-FILING
         Clerk of the Court
         215 1h Judicial District Court
         Harris County Civil Courthouse
         201 Caroline, 13 1h Floor
         Houston, Texas 77002

         Re:      Cause No. 2014-42519
                  Alfredo De La Garza, Individually and as Next Friend for REDACTED
                  REDACTED            a, minors v. Penn Virginia Oil & Gas, L.P., Penn Virginia Oil & Gas
                  GP LLC, Mike Ferguson, Trifecta Oilfield Services, LLC, Cudd Pressure Control, Inc.,
                  Roywell Services, Inc. and Oaks Personnel Services, Inc. d/b/a The Oaks Group

         Dear Clerk:

                Enclosed please find Plaintiffs' Response to Defendants, Penn Virginia Oil & Gas, L.P.
         and Penn Virginia Oil & Gas GP LLC's Motion to Compel Arbitration and to Abate.

                  I .am also providing a copy of this response to all counsel of record.

                                                         John David Hart

         JDH/cd
         Enclosure

         Cc:      VIA CMRRR & FACSIMILE                                   VIA CMRRR & FACSIMILE
                  Mr. Thomas J. Smith                                     Mr. BritT. Brown
                  Mr. Kelly C. Hartmann                                   Mr. Benjamin A. Escobar, Jr.
                  Ms. Alexis Butler Hester                                Beirne, Maynard & Parsons, L.L.P.
                  Galloway, Johnson, Tompkins,                            1300 Post Oak Blvd., Suite 2500
                  Burr & Smith                                            Houston, Texas 77056
                  1301 McKinney, Suite 1400
                  Houston, Texas 77010
Clerk of the Court
July 30, 2015
Page 2 of2

          VIA CMRRR & FACSIMILE
          Mr. J. Javier Gutierrez
          Ms. Ana Laura Gutierrez
          The Gutierrez Law Firm, Inc.
          700 East Third Street
          Alice, Texas 78332
                                        CAUSE NO. 2014-42519

ALFREDO DE LA GARZA,                                      §        IN THE DISTRICT COURT OF
INDIVIDUALLY and AS NEXT FRIEND                           §
FORREDACTED             and                               §
REDACTED              , minors                            §
                                                          §
v.                                                        §        HARRIS COUNTY, TEXAS
                                                          §
PENN VIRGINIA OIL & GAS, L.P., PENN                       §
VIRGINIA OIL & GAS GP LLC,                                §
MIKE FERGUSON, TRIFECTA OILFIELD                          §
SERVICES, LLC, CUDD PRESSURE                              §
CONTROL, INC., ROYWELL                                    §       215th JUDICIAL DISTRICT
SERVICES, INC., and OAKS PERSONNEL                        §
SERVICES, INC. d/b/a THE OAKS GROUP                       §

  ORDER DENYING DEFENDANTS, PENN VIRGINIA OIL & GAS, L.P. AND PENN
  VIRGINIA OIL & GAS GP LLC'S MOTION TO COMPEL ARBITRATION AND TO
                                ABATE

        On _ _ _ day of _ _ _ _ _ _, 2015, came to be considered Defendants, Penn

Virginia Oil & Gas, L.P. and Penn Virginia Oil & Gas GP LLC's Motion to Cmnpel Arbitration

and to Abate. After considering the motion and hearing the arguments of counsel, this Court is of

the opinion that the Motion should be DENIED and that Plaintiffs' claims against Defendant Mike

Ferguson and Defendant Oaks Personnel Services, Inc. d/b/a The Oaks Group be severed fro1n and

proceed to trial on October 19,2015.

                                 SIGNED this _ _ _ day of _ _ _ _ _ _, 2015

                                         Elaine H. Palmer
                                         JUDGE, 215TH DISTRICT COURT

Order Denying Defendants, Penn Virginia Oil & Gas, L.P. and Penn Virginia Oil & Gas GP LLC's   Page 1 of 1
Motion to Compel Arbitration and to Abate