EXECUTION VERSION

Exhibit 10.8
 
ASSIGNMENT, BILL OF SALE AND CONVEYANCE
 
STATE OF TEXAS
 
COUNTY OF BRAZORIA
 
This ASSIGNMENT, BILL OF SALE AND CONVEYANCE (this “Assignment”) is dated the
18th day of September, 2007, but effective as of the 1st day of July, 2007, at
7:00 a.m., local time where the Properties (as such term is defined below) are
located (the “Effective Time”), is from PRIME NATURAL RESOURCES, INC., a Texas
corporation, whose address is 2500 City West Boulevard, Suite 1750 Houston,
Texas 77042 (“Seller”) to ICF ENERGY CORPORATION, a Texas corporation, whose
address is 1400 Woodloch Forest Drive, Suite 530, The Woodlands, Texas 77380
(“Purchaser”).
 
FOR Ten Dollars and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Seller has GRANTED, BARGAINED,
SOLD, CONVEYED, ASSIGNED, TRANSFERRED, SET OVER and DELIVERED and hereby GRANTS,
BARGAINS, SELLS, CONVEYS, ASSIGNS, TRANSFERS, SETS OVER and DELIVERS unto
Purchaser, effective as of the Effective Time, the following (collectively, the
“Properties,” and individually, a “Property”):
 
All of Seller’s right, title and interest in and to the oil and gas leases and
minerals described or referred to in Exhibit A-1 attached hereto and made a part
hereof, and all other lands described or referred to in Exhibit A-1, it being
the intent of Seller to convey, and Seller does hereby convey to Purchaser, all
right, title and interest in any wells and plants located on such leases and
lands, including, without limitation, the wells described or referred to in
Exhibit A-2 attached hereto, and it also being the intent of Seller to convey,
and Seller does hereby convey to Purchaser all of Seller’s right, title and
interest in, to and under such leases, even though such interests, the lands
covered thereby, or the leases themselves be incorrectly or qualitatively or
quantitatively deficient and/or insufficiently described in, or a description of
any such interest, leases or lands be omitted from Exhibit A-1, together with:
 
(a) all of Seller’s right, title and interest in equipment, personal property
and fixtures in, on and under the property described in Exhibits A-1 and A-2,
including gas processing plants and gas gathering systems which are used with
oil and/or gas operations thereon or thereunder, held for use in connection
therewith or servicing the same, including, without limitation, the wells,
injection wells, salt water disposal facilities, well heads, casing, tubing,
pumps, motors, gauges, valves, heaters, treaters, gathering lines, flow lines,
gas lines, water lines, vessels, tanks, boilers, equipment, separators,
buildings, compressors, pipelines, power lines, machinery and other facilities;
 
(b) all of Seller’s right, title and interest in, to and under or derived from
unitization, pooling and operating agreements and the units created thereby
(including any and all units formed under orders, regulations, rules or other
official acts of the Governmental Authority having jurisdiction), whether
recorded or unrecorded, insofar as the same cover or relate to the leases and
lands described in Exhibit A-1;
 

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(c) all of Seller’s right, title and interest, including future income, in, to
and under or received from any production payments sales, purchase and
processing contracts and agreements, including the gas processing rights and
agreements associated with any gas processing plants, insofar as the same relate
to any and all wells described in Exhibit A-2, including, without limitation,
all permits, franchises, licenses, surface leases, servitudes, easements and
rights-of-way relating to such wells or gas plants;
 
(d) all of Seller’s right, title and interest in and to any rights which Seller
may have under indemnifications, warranties, and covenants under prior
conveyances affecting the interests sold, conveyed, transferred and assigned
herein;
 
(e) all of Seller’s right, title and interest in and to all petroleum and
hydrocarbons stored upon or produced from the leases, lands, and wells described
in Exhibits A-1 and A-2 or from any property pooled or unitized therewith which
are attributable to the leases, lands, and wells described in Exhibits A-1 and
A-2, pursuant to contract or otherwise;
 
(f) all of Seller’s right, title and interest in and to all contracts and
contractual rights relating to the leases, lands, and wells described in
Exhibits A-1 and A-2 and to the foregoing property to the extent valid and
subsisting;
 
(g) to the extent not prohibited by third party contracts, all of the files,
records and data relating to the leases, lands, and wells described in Exhibits
A-1 and A-2 and to the items described in subsections (a) through (f) above (the
“Records”), including, without limitation, title records (including abstracts of
title and title curative documents); contracts; correspondence; microfiche
lists; computer output; geological, geophysical and seismic records, plats,
surveys, maps, cross-sections, data, and interpretive reports; engineering
reports, whether produced by Seller’s personnel or outside consultants; and
production records, electric logs, cuttings, cores, core data, pressure data and
decline curves and graphical production curves, well files and all related
matters; provided, that Seller has rights to make and retain copies of such
Records as Seller may desire prior to the delivery of the Records to Purchaser
and access to the Records as Purchaser may have in its possession in the future;
and
 
(h) the benefit of and the right to enforce the covenants and warranties, if
any, which Seller is entitled to enforce with respect to the items described in
the preceding paragraphs (a) through (g) against Seller’s predecessors in title
thereto; and Purchaser and its successors, assigns and legal representatives
shall be substituted and fully subrogated, to the extent assignable, in and to
all covenants and warranties, if any, by Seller’s predecessors in title, with
full subrogation of all rights accruing under the statutes of limitation or
prescription.
 
Excluded Properties. The Properties do not include, and there is hereby
expressly excepted and reserved to Seller (collectively the “Excluded
Properties”): (A) all of Seller’s minute books, financial records, and other
business records that relate to Seller’s business generally (excluding the
ownership and operation of the Properties); (B) all trade credits, all accounts,
receivables and all other proceeds, income or revenues attributable to the
Properties with respect to any period of time prior to the Effective Time; (C)
all claims and causes of action of Seller arising under or with respect to any
contracts and agreements that are attributable to periods of time prior to the
Effective Time (including claims for adjustments or refunds); (D) all rights and
interests of Seller under any policy or agreement of insurance or indemnity,
under any bond or to any insurance or condemnation proceeds or awards arising,
in each case, from acts, omissions or events, or damage to or destruction of
property prior to the Effective Time; (E) all oil, gas and other hydrocarbons
produced and sold from the Properties with respect to all periods prior to the
Effective Time; (F) all claims of Seller for refunds of or loss carry forwards
with respect to production or any other taxes attributable to any period prior
to the Effective Time, income or franchise taxes or any taxes attributable to
the Excluded Properties; (G) all of Seller’s proprietary computer software,
patents, trade secrets, copyrights, names, trademarks, logos and other
intellectual property; (H) all documents and instruments of Seller that may be
protected by an attorney-client privilege; (I) all audit rights arising under
any of the contracts and agreements or otherwise with respect to any period
prior to the Effective Time or to any of the Excluded Properties; (J) documents
prepared or received by Seller with respect to lists of prospective purchasers
for such transactions compiled by Seller, correspondence between or among
Seller, its representatives, and any prospective purchaser other than Purchaser
and correspondence between Seller or any of its respective representatives with
respect to any of such prospective purchaser other than Purchaser, the
prospective purchasers, or the transactions contemplated in that certain
PURCHASE AND SALE AGREEMENT (a copy of which may be obtained from Purchaser at
the above referenced address) dated the 31st day of August, 2007 by and between
Seller and Purchaser (the “Purchase Agreement”); (K) all of Seller’s employee
benefit plans, including all rights, obligations and assets related thereto; and
(L) all of Seller’s rights and obligations under accounting and human resources
outsource contracts.
 
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Purchaser shall not be responsible for, and Seller expressly retains, all
liabilities related to the Excluded Properties, whether such liabilities arise
before or after the Effective Time. It is understood that certain of the
Excluded Properties may not be embraced by the term “Properties”. The fact that
certain properties, rights and interests have been expressly excluded is not
intended to suggest that had they not been excluded they would have constituted
Properties and shall not be used to interpret the meaning of any word or phrase
used in describing the Properties.
 
TO HAVE AND TO HOLD the Properties unto Purchaser and its successors and assigns
forever, and, and this Assignment is made with full rights of substitution and
subrogation of Purchaser in and to all indemnifications, covenants, and
warranties by others heretofore given or made with respect to the Properties,
subject to the following terms and conditions:
 
1. Special Warranty of Title. Except with respect to matters to which this
Assignment is made subject, Seller does hereby bind itself and its successors
and assigns to WARRANT AND FOREVER DEFEND the interests in and to the Properties
as set forth on Exhibits A-1 and A-2 against every person whomsoever lawfully
claiming the same or any part thereof by, through, or under Seller, but not
otherwise, and does otherwise bind itself and its successors and assigns to
WARRANT AND FOREVER DEFEND all and singular title to the Properties unto
Purchaser, its successors and assigns, against every person whomsoever lawfully
claiming the same or any part thereof by, through or under Seller, but not
otherwise, as follows:
 
(i) Seller is entitled to receive (free and clear of all royalties, overriding
royalties, non-participating royalties, net profits interests, production
payments, or other burdens on or measured by production of hydrocarbons) not
less than the interest shown in Exhibit A-2 (the decimal interest shown in the
column in such Exhibit with the caption, “NRI”) of all hydrocarbons produced,
saved, and marketed from the applicable Property and of all hydrocarbons
produced, saved and marketed from any unit of which the Property is a part and
allocated to such Property, all without reduction, suspension, or termination of
the interests in the relevant Property or Seller’s right to gross or net
proceeds from the relevant Property throughout the duration of such Property,
except as stated in Exhibit A-2;
 
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(ii) Seller is obligated to bear a percentage of the costs and expenses relating
to the maintenance and development of, and operations relating to, the
applicable Property and wells associated with the Property not greater than the
working or expense-bearing interest shown in Exhibit A-2 (the decimal interest
shown in the column in such Exhibit with the caption, “WI”) without increase of
the working interest in the relevant Property throughout the duration of such
Property, except as stated in Exhibit A-2; and
 
(iii) the Properties are free and clear (except for Permitted Encumbrances, as
such term is defined in the Purchase Agreement) of liens, encumbrances,
obligations, or defects which arise as a result of actions taken (or effective)
or omitted at or prior to the Effective Time, and (A) are otherwise subject only
to contractually binding arrangements which are conventional, which are
customarily experienced in the oil and gas industry, and (B) are not subject to
any matters which will result in a breach of any representation or warranty of
Seller made in this Assignment or to be contained in any documents to be
delivered by Seller and connected with this Assignment.
 
2. DISCLAIMER. THE SPECIAL WARRANTY OF SELLER CONTAINED IN SECTION 1 ABOVE IS
EXCLUSIVE AND IS IN LIEU OF ALL OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS,
IMPLIED, STATUTORY OR OTHERWISE, AND, WITHOUT LIMITATION ON THE SPECIAL WARRANTY
CONTAINED IN SECTION 1 ABOVE, SELLER EXPRESSLY DISCLAIMS, AND PURCHASER HEREBY
EXPRESSLY WAIVES ANY RIGHT OR CAUSE OF ACTION ARISING FROM OR RELATING TO, ANY
AND ALL OTHER REPRESENTATIONS AND WARRANTIES. WITHOUT LIMITATION OF THE
FOREGOING, EXCEPT FOR THE SPECIAL WARRANTY CONTAINED IN SECTION 1 ABOVE, THE
PROPERTIES SHALL BE CONVEYED PURSUANT HERETO WITHOUT ANY WARRANTY OR
REPRESENTATION WHETHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, RELATING TO THE
CONDITION, QUANTITY, QUALITY, FITNESS FOR A PARTICULAR PURPOSE, CONFORMITY TO
THE MODELS OR SAMPLES OF MATERIALS OR MERCHANTABILITY OF ANY EQUIPMENT FOR ITS
FITNESS FOR ANY PURPOSE. SUBJECT TO THE TERMS OF THE PURCHASE AGREEMENT,
PURCHASER HAS INSPECTED, OR WAIVED ITS RIGHT TO INSPECT, THE PROPERTIES FOR ALL
PURPOSES AND SATISFIED ITSELF AS TO THEIR PHYSICAL AND ENVIRONMENTAL CONDITION,
BOTH SURFACE AND SUBSURFACE, INCLUDING BUT NOT LIMITED TO CONDITIONS
SPECIFICALLY RELATED TO THE PRESENCE, RELEASE OR DISPOSAL OF HAZARDOUS
SUBSTANCES, SOLID WASTES, ASBESTOS AND OTHER MAN MADE MATERIAL FIBERS, OR
NATURALLY OCCURRING RADIOACTIVE MATERIALS (COLLECTIVELY, “HAZARDOUS WASTES”).
PURCHASER IS RELYING UPON ITS OWN INSPECTION OF THE PROPERTIES, AND PURCHASER,
SUBJECT TO THE TERMS OF THE PURCHASE AGREEMENT, HEREBY ACCEPTS ALL OF THE SAME
IN THEIR “AS IS, WHERE IS” CONDITION. SELLER DISCLAIMS ALL LIABILITY ARISING IN
CONNECTION WITH THE PRESENCE OF ANY HAZARDOUS WASTES ON THE PROPERTIES. IN
ADDITION, SELLER AND ITS REPRESENTATIVES MAKE NO WARRANTY OR REPRESENTATION,
EXPRESS OR IMPLIED, AS TO THE ACCURACY OR COMPLETENESS OF ANY DATA, INFORMATION
OR MATERIALS HERETOFORE OR HEREAFTER FURNISHED PURCHASER IN CONNECTION WITH THE
PROPERTIES OR AS TO THE QUALITY OR QUANTITY OF OIL, GAS AND OTHER HYDROCARBON
RESERVES (IF ANY) ATTRIBUTABLE TO THE PROPERTIES OR THE ABILITY OF THE
PROPERTIES TO PRODUCE OIL, GAS AND OTHER HYDROCARBONS. ANY AND ALL SUCH DATA,
INFORMATION AND OTHER MATERIALS FURNISHED BY SELLER AND ITS REPRESENTATIVES WAS
PROVIDED TO PURCHASER AS A CONVENIENCE AND ANY RELIANCE ON OR USE OF THE SAME
HAS BEEN AND SHALL BE AT PURCHASER’S SOLE RISK TO THE MAXIMUM EXTENT PERMITTED
BY LAW.
 
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3. Agreements. This Assignment is made subject to and shall be burdened by the
terms, covenants and conditions contained in any contracts, agreements and
instruments affecting the Properties; and at and after the Effective Time, with
respect to the contracts, agreements, and instruments that are described on
Exhibit A-3 attached hereto, Purchaser agrees to be bound by, assume the
obligations and rights arising under, and, from and after the Effective Time,
perform all of the terms, covenants and conditions contained therein to which
Seller is presently a party.
 
4. Compliance With Laws: This Assignment is made subject to all applicable laws,
statutes, ordinances, permits, decrees, orders, judgments, rules and regulations
which are promulgated, issued or enacted by a governmental entity having
appropriate jurisdiction, and Purchaser shall comply with the same from and
after the date of this Assignment.
 
5. Successors and Assigns. The terms, covenants and conditions contained in this
Assignment shall be binding upon and inure to the benefit of the parties hereto
and their respective successors, assigns, and legal representatives.
 
6. Covenants Running with the Land. The terms, covenants and conditions hereof
shall be covenants running with the land and with each subsequent sale,
conveyance, transfer or assignment of the Properties, or any part thereof.
 
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7. Purchase Agreement. This Assignment is made in accordance with and is subject
to the terms, covenants and conditions contained in the Purchase Agreement.
Seller and Purchaser acknowledge and agree that in the event of any conflict or
inconsistency between the terms and provisions of the Purchase Agreement and the
terms and provisions of this Assignment, the terms and provisions of the
Purchase Agreement shall control.
 
8. Further Assurances. Seller and Purchaser agree to deliver or cause to be
delivered to each other any additional instrument that the other party may
reasonably request for the purpose of carrying out the intent of this
Assignment. Seller shall execute, acknowledge and deliver all such further
conveyances, transfer orders, division orders, notices, assumptions, releases
and acquittances, and such other instruments, and shall take such further
actions as may be necessary or appropriate to assure fully to Purchaser, its
successors, assigns, and legal representatives, the conveyance of all of the
Properties intended to be conveyed to Purchaser by the parties hereto.
 
9. No Rights Created in Third Parties. The references herein to liens,
encumbrances, burdens, defects and other matters are for the purpose of defining
the nature and extent of Seller’s warranty and shall not be deemed to ratify or
create any rights in third parties. Except as otherwise provided herein, the
terms and conditions of this Assignment shall inure to the benefit of, and be
binding upon, the respective successors, assigns, and legal representatives of
the parties hereto. Neither this Assignment nor any other agreement contemplated
hereby shall be deemed to confer upon any person not a party hereto or thereto
any rights or remedies hereunder or thereunder.
 
10. Counterparts; Exhibits. This Assignment may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. All Exhibits attached
hereto are an integral part of this Assignment and are hereby made a part of
this Assignment and incorporated herein by this reference. Any reference to this
Assignment includes such Exhibits.
 
11. Recording. Purchaser shall, at its own expense, record or cause to be
recorded this Assignment in the county or counties in which the Properties are
located.
 
12. Governing Law. THIS ASSIGNMENT SHALL BE GOVERNED BY AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO ITS CONFLICT
OF LAW RULES THAT WOULD DIRECT APPLICATION OF THE LAWS OF ANOTHER JURISDICTION,
EXCEPT TO THE EXTENT THAT IT IS MANDATORY THAT THE LAW OF SOME OTHER
JURISDICTION, WHEREIN ANY OF THE PROPERTIES ARE LOCATED, SHALL APPLY.
 
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IN WITNESS WHEREOF, this Assignment is executed on the day and year first
referenced above, but effective as of the Effective Time.

       

SELLER:
 
PRIME NATURAL RESOURCES, INC.
 
   
   
  By:   /s/ John R. Hager  

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Printed Name: John R. Hager 
Title: Chief Financial Officer

       

PURCHASER:
 
ICF ENERGY CORPORATION
 
   
   
  By:   /s/ John I. Folnovic  

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John I. Folnovic,
President and CEO

 
STATE OF TEXAS
 
COUNTY OF HARRIS
 
BEFORE ME, on this 30th day of August, 2007, appeared John R. Hager, to me
personally known, who, being by me duly sworn did say that he is the Chief
Financial Officer of PRIME NATURAL RESOURCES, INC., a Texas corporation, and
that said instrument was signed on behalf of said corporation by authority of
its Board of Directors and such person acknowledged said instrument to be the
free act and deed of said corporation.
 
Given under my hand and seal of office the day and year last above written.

    /s/ Sue A. Alford  
 

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Notary Public for the State of Texas
 
Printed Name: Sue A. Alford
 
My commission expires: 5-24-10

Signature Page

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STATE OF TEXAS
 
COUNTY OF HARRIS
 
BEFORE ME, on this 3st day of August, 2007, appeared John I. Folnovic, to me
personally known, who, being by me duly sworn did say that he is the President
and CEO of ICF ENERGY CORPORATION, a Texas corporation, and that said instrument
was signed on behalf of said corporation by authority of its Board of Directors
and such person acknowledged said instrument to be the free act and deed of said
corporation.
 
Given under my hand and seal of office the day and year last above written.

    /s/ Theresa M. Thornton  
 

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Notary Public for the State of Texas
 
Printed Name: Theresa M. Thornton
 
My commission expires: 5/28/08

Signature Page

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Exhibit A-1
 
Leasehold Interests
 
Oil and Gas Leases and Minerals
(all recording references are to the Official Records of Brazoria County, Texas)

 
Lessor
 
Lessee
 
Lease Date
 
Recording Information
Eugenia T. Whitlock Trust
 
Roger A Soape Inc
 
03/20/00
 
00 018426
Cornelia H. Decker , et al
 
Roger A Soape Inc
 
03/20/00
 
00 021735
Sylvia A. Woodruff
 
Roger A Soape Inc
 
03/02/00
 
00 013450
Billie Glenn Cornman
 
Roger A Soape Inc
 
03/02/00
 
00 015575
Vera Carmel Brown
 
Roger A Soape Inc
 
03/02/00
 
00 015576
Ernest E. Freeman, et ux
 
Roger A Soape Inc
 
03/02/00
 
00 015577
J. H. Rayburn Jr, et al
 
Roger A Soape Inc
 
02/17/00
 
00 013453
Mary L. Chase
 
Roger A Soape Inc
 
02/24/00
 
00 024490
J. H. Rayburn, Jr.
 
Roger A Soape Inc
 
02/17/00
 
00 018427
Jack S. Josey
 
Roger A Soape Inc
 
07/25/00
 
00 044259
J. Shelby Bryan
 
Roger A Soape Inc
 
07/28/00
 
00 044258
Josephine S Masterson
 
Roger A Soape Inc
 
09/18/00
 
01 036412
Kay C. Foster
 
Roger A Soape Inc
 
02/05/00
 
00 013451
Marjorie Persson, et al
 
Roger A Soape Inc
 
02/06/00
 
00 013452
Michael M. Martin
 
Roger A Soape Inc
 
03/17/00
 
00 018428
William Polk Martin
 
Roger A Soape Inc
 
03/17/00
 
00 018429
Thomas Masterson, III, et al
 
Roger A Soape Inc
 
07/17/00
 
00 033346
Peter M. Turnbull
 
Roger A Soape Inc
 
07/11/00
 
00 039724
Gloria C. Wilburn
 
Roger A Soape Inc
 
08/10/00
 
00 039725
Lynne Fisher Echegaray
 
Roger A Soape Inc
 
08/15/00
 
00 044257
Betsy Schwarz Vaughan, et al
 
Roger A Soape Inc
 
08/26/00
 
00 046881
Compass Bank Trustee
 
Prime Natural Resources Inc
 
12/20/00
 
01 037779
Mary Nell Enlow Boyd
 
Roger A Soape Inc
 
03/01/03
 
03 017685
Robert M. Davant Jr., et al
 
Roger A Soape Inc
 
06/23/00
 
00 033342
Elizabeth L. Howe
 
Roger A Soape Inc
 
07/01/00
 
00 033343
Amelia Ann Sundberg
 
Roger A Soape Inc
 
07/01/00
 
00 033344
Valerie L. Hundley
 
Roger A Soape Inc
 
07/01/00
 
00 033345
Mary L. Crecy
 
Prime Natural Resources Inc
 
02/01/02
 
02 025904
James T. Little
 
Prime Natural Resources Inc
 
02/03/02
 
02 025905
Mary Lou Eckerdt
 
Prime Natural Resources Inc
 
02/02/02
 
02 025906
Betty Lou Patterson
 
Prime Natural Resources Inc
 
02/04/02
 
02 025907
John W. Berry Jr
 
Prime Natural Resources Inc
 
02/04/02
 
02 025908
Robert Little
 
Prime Natural Resources Inc
 
02/04/02
 
02 025909
Lewis B. Demille
 
Prime Natural Resources Inc
 
02/04/02
 
02 025910
Norma Lathrop
 
Prime Natural Resources Inc
 
02/04/02
 
02 019489
James F. Lathrop, Jr.
 
Prime Natural Resources Inc
 
02/04/02
 
02 019490

 
Exhibit A-1-1

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Holy Comforter Episcopal
 
Prime Natural Resources Inc
 
02/05/02
 
02 019492
Anne H Mealey
 
Prime Natural Resources Inc
 
02/04/02
 
02 019493
Louise A. Miller
 
Prime Natural Resources Inc
 
02/04/02
 
02 019494
George Loe
 
Prime Natural Resources Inc
 
02/04/02
 
02 029006
Laura Ruth Haynie
 
Prime Natural Resources Inc
 
02/04/02
 
02 033083
Paris Eugene Smith
 
Prime Natural Resources Inc
 
06/03/02
 
02 033084
Sarah Janin Wilson Zerr
 
Prime Natural Resources Inc
 
06/03/02
 
02 039347
K. Wortham Smith
 
Prime Natural Resources Inc
 
06/03/02
 
02 043286
Floyd Fiser, Jr.
 
Prime Natural Resources Inc
 
10/23/02
 
03 003092
Corinne Laurie Brierley
 
Prime Natural Resources Inc
 
10/23/02
 
03 003091
Fern Fletcher
 
Prime Natural Resources Inc
 
02/21/03
 
03 022644
Shirley W. Fiser, et al
 
Prime Natural Resources Inc
 
10/23/02
 
03 026623
Herman Bell, et ux
 
Prime Natural Resources Inc
 
03/07/02
 
02 019491
Jimmy Phillips, Jr.
 
Prime Natural Resources Inc
 
03/04/02
 
02 019495
Michael Phillips
 
Prime Natural Resources Inc
 
03/04/02
 
02 019496
Arthur Ray Clark, Sr., et ux
 
Prime Natural Resources Inc
 
03/09/02
 
02 029005
Peggy Gupton Boone
 
Prime Natural Resources Inc
 
03/21/02
 
02-029001
Dolores Gupton Rader
 
Prime Natural Resources Inc
 
03/21/02
 
02-029002
Kirby W. Gupton
 
Prime Natural Resources Inc
 
03/06/02
 
02 029003
Denise Gupton Ingram
 
Prime Natural Resources Inc
 
03/18/02
 
02 029004
Earnestine Grise Randon
 
Prime Natural Resources Inc
 
03/09/02
 
02-029000
Devon Energy
Production Co.
 
Prime Natural Resources Inc
 
04/29/02
 
02 049386
Anthony Alexander, Sr.
 
Prime Natural Resources Inc
 
04/24/02
 
02 031957
Josephine Masterson
 
Prime Natural Resources Inc
 
04/23/02
 
02 039348
Jack S. Josey
 
Prime Natural Resources Inc
 
05/03/02
 
02 039349
J. Shelby Bryan
 
Prime Natural Resources Inc
 
06/14/02
 
02 055294
Eugenia T. Whitlock Trust
 
Prime Natural Resources Inc
 
04/22/02
 
03 010299
Ethel F. Graham, Indep. Exec.
 
Prime Natural Resources Inc
 
11/15/03
 
03 078513
Devon Energy Production Co.
 
Prime Natural Resources Inc
 
04/02/03
 
03 023650
Fee Mineral Tract
 
All of Prime Natural Resources, Inc. interest in 316.85 acres, more or less out
of the S. F. Austin League No. 48. being the same lands conveyed to Prime
Natural Resources, Inc. by Mineral and Royalty Deed from Roger A. Soape, Inc.
dated July 18, 2003, recorded as Document No. 03 046145 of the Official Records
of Brazoria County, Texas.

 
Units
 
O’Leary Unit No. 1
 
662 acres of land, more or less, out of the Stephen F. Austin League No. 48,
A-26 and the George Harrison Survey, A-73, Brazoria County, Texas, described in
that certain Designation of Unit (O’Leary Gas Unit) filed June 13, 2003,
recorded under Clerk’s File No. 03-035767, as amended by documents recorded
under Clerk’s File Nos. 03-046147 and 2004020014 of the Official Records of
Brazoria County, Texas.
     
Devon Fee Gas Unit
 
401.85 acres, more or less, out of the Stephen F. Austin League No. 48, A-26,
Brazoria County, Texas, being the Devon Fee Gas Unit as described in that
certain designation of Unit dated April 28, 2004, recorded at Entry 2004024815,
in the Official Records of Brazoria County, Texas.

Exhibit A-1-2

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Exhibit A-2
 
Wells
 
Well
 
API Well No.
 
Working Interest
 
Net Revenue Interest
 
O’Leary Unit No. 1
   
42-039-32803
   
40.6700%
 
 
29.0120%
                     
Devon Fee No. 1
   
42-039-32823
   
75.0000%
 
 
60.4500%*
                   
Includes fee minerals
 

Exhibit A-2-1

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Exhibit A-3
 
Contracts
 
DEVON FEE NO. 1

 
1.
Gas Transportation Agreement dated August 1, 2007, between Sweeny Gathering,
L.P.. and Prime Natural Resources, Inc.

 
2.
Participation Agreement dated October 1, 2003 between Burk Davis Gulf Coast and
Prime Natural Resources, Inc.

 
3.
Joint Operating Agreement dated October 1, 2003 between Davis Gulf Coast and
Prime Natural Resources, Inc.

 
4.
Crude Oil Sales Contract dated May 24, 2004 between Cokinos Oil Company and
Prime Natural Resources, Inc.

 
5.
Gas Sales Contract dated May 24, 2004 between Prime Natural Resources, Inc. and
Cokinos Oil Company

O’LEARY GAS UNIT

 
1.
Crude Oil Sales Contract dated June 25, 2007 between Cokinos Oil Company and
Prime Natural Resources, Inc.

 
2.
Joint Operating Agreement dated February 14, 2003 between Davis Gulf Coast and
Prime Natural Resources, Inc.

 
3.
Letter Agreement dated May 2, 2003 between Davis Gulf Coast and Prime Natural
Resources, Inc.

 
4.
Letter Agreement dated March 13, 2003 between Davis Gulf Coast and Prime Natural
Resources, Inc.

 
5.
Letter of Intent dated February 10, 2003 between Davis Gulf Coast and Prime
Natural Resources, Inc.

 
6.
Sales Letter dated May 1, 2003 between Hilcorp and Prime Natural Resources, Inc.

PROSPECTS

 
7.
Letter Agreement dated May 1, 2003 between Hilcorp and Prime Natural Resources,
Inc.

Exhibit A-3-1

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EXPLORATION OPPORTUNITIES IN THE OLD OCEAN FIELD

 
The following interests are described by and reserved in that certain
Assignment, Conveyance and Bill of Sale, dated effective March 1, 2003 between
Prime Natural Resources, Inc., as Assignor, and Hilcorp Energy I, L. P., as
Assignee, filed for record and recorded May 13, 2003 in the Official Records of
Brazoria County, Texas and filed for record on June 12, 2003 in the Official
Records of Matagorda County, Texas,

 
South Sweeny Prospect
 
The interests described in Exhibit A-4 of the above described Assignment. This
interest is limited to the depths below the F-21 Sand and Prime Natural
Resources, Inc. is obligated to P & A the Old Ocean Unit 238 well.

Old Ocean Unit 240 Prospect Offset
 
The interests described in Exhibit A-6 of the above described Assignment

Old Ocean Unit 235 Prospect (F-24 Sand)
 
The interests described in Exhibit A-7-I of the above described Assignment

Exhibit A-3-2

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