Estate of Algerine Allen Smith - Page 3




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          production obtained from certain tracts of land in Wood County.             
          Humble was subsequently acquired by Exxon Corporation (Exxon).              
               Jessamine and Frankie Allen died in 1979 and 1989,                     
          respectively, and decedent served as the independent executrix of           
          both estates.  Upon Jessamine’s death, decedent inherited a                 
          portion of Jessamine’s interest in the leased property.  Upon               
          Frankie’s death, decedent inherited all of Frankie’s interest in            
          the leased property, as well as the remaining portion of                    
          Jessamine’s interest, which Frankie had previously inherited.               
               Decedent’s, Frankie’s, and Jessamine’s interests in the Wood           
          County property were part of a unit formation known as the                  
          Hawkins Field Unit (HFU).  The Texas Railroad Commission, which             
          regulates oil and gas operations in Texas, approved the HFU for             
          unitization on November 26, 1974.  In a unit agreement, effective           
          January 2, 1975, interest owners in the area utilized oil and gas           
          rights pertaining to the unitized formation.  The unit agreement            
          embraces interests of approximately 2,200 royalty interest                  
          owners2 and 300 working interest owners.  Exxon is the sole unit            
          operator of the HFU and possesses the exclusive right to conduct            
          HFU operations pursuant to a unit operating agreement between               
          Exxon and the other working interest owners.3                               



               2Decedent, Jessamine, and Frankie were royalty interest                
          owners.                                                                     
               3Exxon was the HFU’s largest working interest owner.                   




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