Exhibit 10.6

THIRD AMENDMENT OF PURCHASE AND SALE AGREEMENT

WHEREAS, on November 16, 2006, Smith Production Inc. (“Smith”), a Texas
corporation, as seller, and Edge Petroleum Exploration Company (“Edge”), a
Delaware corporation, as purchaser, entered into two different Purchase and Sale
Agreements, each Purchase and Sale Agreement being effective as of January 1,
2007, at 12:01 a.m., but each Purchase and Sale Agreement covering different oil
and gas properties.

WHEREAS, in order to differentiate one Purchase and Sale Agreement from the
other for purposes of description and reference in this Third Amendment of
Purchase and Sale Agreement  (the “Amendment”), Edge and Smith stipulate and
agree that (i) the Purchase and Sale  Agreement in which the first page of
Exhibit 1.2(a) Leases describes the Angelita Prospect in San Patricio County,
Texas shall be described as “Purchase and Sale Agreement #1” and (ii) the
Purchase and Sale Agreement in which the first page of Exhibit 1.2(a) Leases
describes the Black Stone Prospect in Hidalgo County, Texas shall be described
as “Purchase and Sale Agreement #2.”

WHEREAS, this Amendment pertains only to Purchase and Sale Agreement #1 which is
referred to in this Amendment as the “Agreement”.

WHEREAS, Smith and Edge amended the Agreement by First Amendment of Purchase and
Sale Agreement executed on December 15, 2006.

WHEREAS, Smith and Edge amended the Agreement by Second Amendment of Purchase
and Sale Agreement executed on January 15, 2007.

WHEREAS, Smith and Edge desire to amend the Agreement a final time as set forth
below by executing this Amendment.

NOW THEREFORE, for valuable consideration received, Smith and Edge hereby amend
the Agreementas follows:

1. Section 11.3(a) of the Agreement is amended by adding the following at the
end of the section: “Notwithstanding anything to the contrary set forth in this
Section 11.3(a), Seller and Purchaser agree and stipulate that, in the event of
Closing, Purchaser hereby assumes, becomes liable for, agrees to perform and
discharge all obligations and liabilities of Seller to the extent that they are
attributable to or arise out of that certain litigation styled Smith Production
Inc. v. Zeke Paul, filed in Cause No. 69279 in Liberty County, Texas.”

2. Section 11.3(b) of the Agreement is amended as follows:

(a) the period (ending punctuation) at the end of 11.3(b)(ix) is deleted and
replaced with a semi-colon as ending punctuation;

(b) the word “OR” is inserted at the end of 11.3(b)(ix) after the semi-colon;
and

(c) the following text is added as a new 11.3(b)(x):

(x) that certain litigation styled Smith Production Inc. v. Zeke Paul, filed in
Cause No. 69279 in Liberty County, Texas.

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3. Section 11.5 of the Agreement is amended by adding the following text:
“Purchaser’s Indemnification Obligations in Section 11.3(b)(x) shall terminate
after that certain litigation styled Smith Production Inc. v. Zeke Paul, filed
in Cause No. 69279 in Liberty County, Texas has been finally resolved or settled
by all parties to said lawsuit by entry of a non-appealable, final judgment in a
court of competent jurisdiction or by a final settlement agreement.

To the extent that any other provisions in the Agreement require amendment in
order to make the context of such provisions correct as the result of the
foregoing amendments, all such provisions in the Agreement that require
amendment are deemed to be amended.

As amended herein, the Agreement is hereby adopted, ratified and confirmed as
being in full force and effect.

This Amendment shall be binding on each party that executes same, regardless of
whether the Amendment is executed by all of the parties who are named below. The
provisions of this Amendment shall be binding upon and inure to the benefit of
each signatory party and their respective successors and assigns.

This Amendment may be executed in one or more counterparts, each of which shall
have the same force and effect as an original, and each counterpart shall be
binding upon the parties executing the same.

IN WITNESS WHEREOF, this Amendment is executed as of the dates shown below to be
effective as of November 16, 2006.

Smith Production Inc.

 

 

 

 

 

By:

 

/s/ Glenn R. Smith

 

 

Glenn R. Smith, President

 

 

Date: January 31, 2007

 

 

 

 

 

Edge Petroleum Exploration Company

 

 

 

 

 

By:

 

/s/ C. W. MacLeod

 

 

C.W. MacLeod

 

 

Senior Vice President Business Development and Planning

Date: January 31, 2007

 

 

 

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