Comments from July 13°”

Staff Report & Agenda Item Details

Comments from July 13°” Objection made by the General Manager to this being introduced for the truth of the matter, but no objection for the limited purpose of reflecting previous discussion. Middle Pecos GCD Minutes for July 18, 2017 Page 12 of 18 FSH 6: Supplement to the July 13" letter which reflects comments that were actually bringing forward next month in connection with the Management Zone rule making, and will also be used in discussions in the future with respect to the study, etc. Objection made by the General Manager to this being introduced for the truth of the matter, but no objection for the limited purpose of reflecting previous discussion. FSH 7: The Settlement Agreement that FSH entered into with the Pecos County WCID#1. FSH 8: The Rule 11 Agreement that FSH entered into with the Brewster County GCD. A copy will be added to the record once received. The parties had no objection, except as noted above on FSH 5 and FSH 6 to the Exhibits being admitted. The General Manager's objections were sustained and the Exhibits were admitted into the record subject to the qualified admission of FSH 5 and 6 due to the General Manager's objections. Mr. Ed McCarthy asked that the proceedings before this Board from the 2010/2011 hearings be officially on the record for this Remand. There were no objections, and it is accepted into the official record. Mr. McCarthy: Fort Stockton Holdings, L.P.(FSH) is seeking a permit and requests authority to produce and beneficially use 28,400 acre feet. The permit conditions that we are agreeing to with respect to the permit apply only to FSH. The next hearing is an application from FSH to amend/reduce its Historic and Existing Use Permit by 28,400 acre feet. We request that the Board follow through with the Special Conditions and grant the permit that has been presented as part of the settlement. Pecos County: Drew Miller reported that Pecos County and FSH have negotiated a settlement agreement. There is no objection to the issuance of this permit as presented today. City of Fort Stockton: Mark Harral stated that the City and FSH have negotiated a settlement agreement. There is no objection to the issuance of this permit. Pecos County WCID#1: Harvey Gray stated that PCWCID#1 and FSH have negotiated a settlement agreement. There is no objection to the issuance of this permit. Middle Pecos GCD Minutes for July 18, 2017 Page 13 of 18 Adjourn hearing and consider and/or act on Application for a Production Permit and Transport Authorization on Remand from the El Paso Court of Appeals for Fort Stockton Holdings, L.P. President Jerry McGuairt adjourned the hearing at 1:48 p.m. HEARING ON FORT STOCKTON HOLDINGS, L.P.’s APPLICATION TO AMEND HISTORIC AND EXISTING USE PERMITS Call to order at 1:48 p.m. by President Jerry McGuairt. An application to amend its historic and existing (H&E) use permits which requests for 28,400 acre feet of FSH’s H&E Use production rights from specific wells and reduced production volumes in specific wells listed in appendix C of FSH's application. FSH will retain the remaining acre feet of its remaining H&E use permits authorized for agricultural use on its own property. FSH submits this application on the condition that this amendment application involves several thousand acres Leon Belding Farms area of Pecos County, Texas on several thousand acres of property owned by Clayton Williams Farms, Inc., which is approximately 10-15 miles west/southwest of the City of Fort Stockton. Party representing application: Ed McCarthy/Attorney Public Comment: None Seeking Party Status: Cockrell Investment Partners, LLC - Buck Benson, Attorney. City of Fort Stockton - Mark Harral/Attorney. Cockrell Investment Partners, LLC Mr. Buck Benson: Our main issue is we do not feel we have gotten to be a part of the process and are concemed about that, and in particular we left the meeting yesterday and thought there was an agreement not to go below that historic low. W

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