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Exhibit 10.1
EXECUTION COPY

BRIGHAM EXPLORATION COMPANY

 
$35,000,000 9⅝% Senior Notes due 2014

PURCHASE AGREEMENT
 
dated March 30, 2007

 
 
Banc of America Securities LLC
 
Credit Suisse Securities (USA) LLC
 
 

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Table of Contents
 
Section 1.
Representations and Warranties
3
(a)
No Registration Required
3
(b)
No Integration of Offerings or General Solicitation
3
(c)
Eligibility for Resale under Rule 144A
3
(d)
The Offering Memorandum
4
(e)
The Purchase Agreement
4
(f)
The Registration Rights Agreement
4
(g)
The DTC Agreement
5
(h)
Authorization of the Notes, the Exchange Notes and the Guarantees
5
(i)
Authorization of the Indenture
5
(j)
Description of the Securities and the Indenture
6
(k)
No Material Adverse Change
6
(l)
Independent Accountants
6
(m)
Independent Petroleum Engineers
7
(n)
Preparation of the Financial Statements
7
(o)
Incorporation and Good Standing of the Company and its Subsidiaries
7
(p)
Capitalization and Other Capital Stock Matters
8
(q)
NASDAQ Listing
8
(r)
Non-Contravention of Existing Instruments; No Further Authorizations or
Approvals Required
9
(s)
No Material Actions or Proceedings
10
(t)
Intellectual Property Rights
10
(u)
All Necessary Permits, etc
10
(v)
Title to Properties
11
(w)
Tax Law Compliance
11
(x)
Not an Investment Company
11
(y)
Insurance
11
(z)
No Price Stabilization or Manipulation
12
(aa)
Solvency
12
(bb)
Compliance with Sarbanes-Oxley
12
(cc)
MD&A
12
(dd)
Company’s Accounting System
13
(ee)
Disclosure Controls and Procedures
13
(ff)
Compliance with Environmental Laws
13
(gg)
Periodic Review of Costs of Environmental Compliance
14
(hh)
ERISA Compliance
15
(ii)
Compliance with Labor Laws
15
(jj)
No Unlawful Contributions or Other Payments
16
(kk)
Compliance with Regulation S
16
(ll)
Taxes; Fees
166
Section 2.
Purchase, Sale and Delivery of the Securities
176
(a)
The Securities
17
(b)
The Closing Date
17
(c)
Delivery of the Securities
17
(d)
Initial Purchasers as Qualified Institutional Buyers
17
Section 3.
Additional Covenants
17
(a)
Preparation of Final Offering Memorandum; Initial Purchasers’ Review of Proposed
Amendments and Supplements
18

 
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(b)
Amendments and Supplements to the Final Offering Memorandum and Other Securities
Act Matters
18
(c)
Copies of the Offering Memorandum
19
(d)
BlueSky Compliance
19
(e)
Use of Proceeds
19
(f)
The Depositary
19
(g)
Additional Issuer Information
19
(h)
Agreement Not To Offer or Sell Additional Securities
20
(i)
Future Reports to the Initial Purchasers
20
(j)
No Integration
20
(k)
No Restricted Resales
21
(l)
Legended Securities
21
(m)
PORTAL
21
Section 4.
Payment of Expenses
21
Section 5.
Conditions of the Obligations of the Initial Purchasers
22
(a)
Accountants’ Comfort Letter
22
(b)
No Material Adverse Change or Ratings Agency Change
23
(c)
Opinion of Counsel for the Company
23
(d)
Opinion of Counsel for the Initial Purchasers
23
(e)
Officers’ Certificate
23
(f)
Engineers Letter
24
(g)
PORTAL Listing
24
(h)
Registration Rights Agreement and Indenture
24
(i)
Additional Documents
24
Section 6.
Reimbursement of Initial Purchasers’ Expenses
24
Section 7.
Offer, Sale and Resale Procedures
25
Section 8.
Indemnification.
26
(a)
Indemnification of the Initial Purchasers
27
(b)
Indemnification of the Company and the Guarantors
27
(c)
Notifications and Other Indemnification Procedures
28
(d)
Settlements
29
Section 9.
Contribution
30
Section 10.
Termination of this Agreement
31
Section 11.
Representations and Indemnities to Survive Delivery
32
Section 12.
Notices
32
Section 13.
Successors
33
Section 14.
Partial Unenforceability
33
Section 15.
Governing Law Provisions
33
(a)
Consent to Jurisdiction
33
Section 16.
Default of One or More of the Several Initial Purchasers
34
Section 17.
No Advisory or Fiduciary Responsibility
34
Section 18.
General Provisions
35

 
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EXECUTION COPY

PURCHASE AGREEMENT

March 30, 2007

BANC OF AMERICA SECURITIES LLC
CREDIT SUISSE SECURITIES (USA) LLC
As Initial Purchasers
c/o Banc of America Securities LLC
9 West 57th Street
New York, New York 10019

Ladies and Gentlemen:

Introductory. Brigham Exploration Company, a Delaware corporation (the
“Company”), proposes to issue and sell to the several initial purchasers named
in Schedule A (the “Initial Purchasers”), acting severally and not jointly, the
respective amounts set forth in such Schedule A of $35,000,000 aggregate
principal amount of the Company’s 9 ⅝% Senior Notes due 2014 (the “Notes”). Banc
of America Securities LLC and Credit Suisse Securities (USA) LLC have agreed to
act as the several Initial Purchasers in connection with the offering and sale
of the Securities (as defined below).

The Securities will be issued pursuant to an indenture, to be dated as of April
20, 2006 (the “Indenture”), among the Company, the Guarantors (as defined
below), and Wells Fargo Bank, N.A., as trustee (the “Trustee”). Securities
issued in book-entry form will be issued in the name of Cede & Co., as nominee
of The Depository Trust Company (the “Depositary”) pursuant to a blanket issuer
letter of representations, to be dated on or before the Closing Date (as defined
in Section 2 hereof) (the “DTC Agreement”), among the Company and the
Depositary.

The holders of the Securities will be entitled to the benefits of a registration
rights agreement, to be dated as of April 9, 2007 (the “Registration Rights
Agreement”), among the Company, the Guarantors and the Initial Purchasers,
pursuant to which the Company and the Guarantors will agree to file with the
Commission (as defined below), under the circumstances set forth therein, (i) a
registration statement under the Securities Act (as defined below) relating to
another series of debt securities of the Company with terms substantially
identical to the Notes (the “Exchange Notes”) to be offered in exchange for the
Notes (the “Exchange Offer”) and (ii) to the extent required by the Registration
Rights Agreement, a shelf registration statement pursuant to Rule 415 of the
Securities Act relating to the resale by certain holders of the Notes, and in
each case, to use its best efforts to cause such registration statements to be
declared effective.

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The payment of principal of, premium, if any, and interest on the Notes will be
fully and unconditionally guaranteed on a senior unsecured basis, jointly and
severally, by Brigham, Inc., a Nevada corporation, and Brigham Oil & Gas, L.P.,
a Delaware limited partnership, and any subsidiary of the Company that executes
an additional guarantee after the Closing Date in accordance with the terms of
the Indenture, and their respective successors and assigns (collectively, the
“Guarantors”), pursuant to their guarantees (the “Guarantees”). The Notes and
the Guarantees attached thereto are herein collectively referred to as the
“Securities;” and the Exchange Notes and the Guarantees attached thereto are
herein collectively referred to as the “Exchange Securities.”

The Company understands that the Initial Purchasers propose to make an offering
of the Securities on the terms and in the manner set forth herein and in the
Pricing Disclosure Package (as defined below) and agrees that the Initial
Purchasers may resell, subject to the conditions set forth herein, all or a
portion of the Securities to purchasers (the “Subsequent Purchasers”) at any
time after the time this Agreement is executed by the parties hereto (the “Time
of Execution”). The Securities are to be offered and sold to or through the
Initial Purchasers without being registered with the Securities and Exchange
Commission (the “Commission”) under the Securities Act of 1933 (as amended, the
“Securities Act,” which term, as used herein, includes the rules and regulations
of the Commission promulgated thereunder), in reliance upon exemptions
therefrom. Pursuant to the terms of the Securities and the Indenture, investors
who acquire Securities shall be deemed to have agreed that Securities may only
be resold or otherwise transferred, after the date hereof, if such Securities
are registered for sale under the Securities Act or if an exemption from the
registration requirements of the Securities Act is available (including the
exemptions afforded by Rule 144A under the Securities Act (“Rule 144A”) or
Regulation S under the Securities Act (“Regulation S”)).

The Company has prepared and delivered to each Initial Purchaser copies of a
Preliminary Offering Memorandum, dated March 30, 2007 (the “Preliminary Offering
Memorandum”), and has prepared and delivered to each Initial Purchaser copies of
a Pricing Supplement, dated March 30, 2007 (the “Pricing Supplement”),
describing the terms of the Securities, each for use by such Initial Purchaser
in connection with its solicitation of offers to purchase the Securities. The
Preliminary Offering Memorandum and the Pricing Supplement are herein referred
to as the “Pricing Disclosure Package.” Promptly after the Time of Execution,
the Company will prepare and deliver to each Initial Purchaser a final offering
memorandum dated the date hereof (the “Final Offering Memorandum”).

All references herein to the terms “Pricing Disclosure Package” and “Final
Offering Memorandum” shall be deemed to mean and include all information filed
under the Securities Exchange Act of 1934 (as amended, the “Exchange Act,” which
term, as used herein, includes the rules and regulations of the Commission
promulgated thereunder) prior to the Time of Execution and incorporated by
reference in the Pricing Disclosure Package (including the Preliminary Offering
Memorandum) or the Final Offering Memorandum (as the case may be).

The Company hereby confirms its agreements with the Initial Purchasers as
follows:

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SECTION 1.  Representations and Warranties. Each of the Company and the
Guarantors, jointly and severally, hereby represents, warrants and covenants to
each Initial Purchaser that, as of the date hereof and as of the Closing Date
(references in this Section 1 to the “Offering Memorandum” are to (x) the
Pricing Disclosure Package in the case of representations and warranties made as
of the date hereof and (y) the Final Offering Memorandum in the case of
representations and warranties made as of the Closing Date):

(a)    No Registration Required. Subject to compliance by the Initial Purchasers
with the representations and warranties set forth in Section 2 hereof and with
the procedures set forth in Section 7 hereof, it is not necessary in connection
with the offer, sale and delivery of the Securities to the Initial Purchasers
and to each Subsequent Purchaser in the manner contemplated by this Agreement
and the Offering Memorandum to register the Securities under the Securities Act
or, until such time as the Exchange Securities are issued pursuant to an
effective registration statement, to qualify the Indenture under the Trust
Indenture Act of 1939 (the “Trust Indenture Act,” which term, as used herein,
includes the rules and regulations of the Commission promulgated thereunder).

(b)    No Integration of Offerings or General Solicitation. None of the Company,
the Guarantors or any of their respective subsidiaries, or its affiliates (as
such term is defined in Rule 501 under the Securities Act) (each, an
“Affiliate”), or any person acting on its or any of their behalf (other than the
Initial Purchasers, as to whom no representation or warranty is made) have,
directly or indirectly, solicited any offer to buy or offered to sell, or will,
directly or indirectly, solicit any offer to buy or offer to sell, in the United
States or to any United States citizen or resident, any security which is or
would be integrated with the sale of the Securities in a manner that would
require the Securities to be registered under the Securities Act. None of the
Company, the Guarantors, any of their subsidiaries or its Affiliates, or any
person acting on its or any of their behalf (other than the Initial Purchasers,
as to whom no representation or warranty is made) have engaged or will engage,
in connection with the offering of the Securities, in any form of general
solicitation or general advertising within the meaning of Rule 502 under the
Securities Act. With respect to those Securities sold in reliance upon
Regulation S, (i) none of the Company, the Guarantors, any of their subsidiaries
or Affiliates or any person acting on its or any of their behalf (other than the
Initial Purchasers, as to whom no representation or warranty is made) has
engaged or will engage in any directed selling efforts within the meaning of
Regulation S and (ii) each of the Company, the Guarantors, any of their
subsidiaries or Affiliates and any person acting on its or their behalf (other
than the Initial Purchasers, as to whom no representation or warranty is made)
has complied and will comply with the offering restrictions set forth in
Regulation S.

(c)    Eligibility for Resale under Rule 144A. The Securities are eligible for
resale pursuant to Rule 144A and will not be, at the Closing Date, of the same
class as securities listed on a national securities exchange registered under
Section 6 of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”) or quoted in a U.S. automated interdealer quotation system.

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(d)    The Offering Memorandum. Neither the Pricing Disclosure Package, as of
the Time of Execution, nor the Final Offering Memorandum, as of its date or (as
amended or supplemented in accordance with Section 3(a), if applicable) as of
the Closing Date, contains or represents an untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided that this representation, warranty and agreement shall not
apply to statements in or omissions from the Pricing Disclosure Package, the
Final Offering Memorandum or any amendment or supplement thereto made in
reliance upon and in conformity with information furnished to the Company in
writing by any Initial Purchaser through Banc of America Securities LLC
expressly for use in the Pricing Disclosure Package, the Final Offering
Memorandum or amendment or supplement thereto, as the case may be. The Pricing
Disclosure Package contains, and the Final Offering Memorandum will contain, as
of its date, all the information specified in, and meeting the requirements of,
Rule 144A. The Company has not distributed and will not distribute, prior to the
later of the Closing Date and the completion of the Initial Purchasers’
distribution of the Securities, any offering material in connection with the
offering and sale of the Securities other than the Pricing Disclosure Package
and the Final Offering Memorandum. The documents incorporated or deemed to be
incorporated by reference in the Offering Memorandum at the time they were or
hereafter are filed with the Commission complied and will comply in all material
respects with the requirements of the Exchange Act.

(e)    The Purchase Agreement. This Agreement has been duly authorized, executed
and delivered by, and is a valid and binding agreement of, the Company and each
of the Guarantors, enforceable against the Company and each of the Guarantors in
accordance with its terms, except as rights to indemnification hereunder may be
limited by applicable law and except as the enforcement hereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general
equitable principles.

(f)    The Registration Rights Agreement. The Registration Rights Agreement has
been duly authorized and, on the Closing Date, will have been duly executed and
delivered by, and will constitute a valid and binding agreement of, the Company
and the Guarantors, enforceable against the Company and each of the Guarantors
in accordance with its terms, except as the enforcement thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general
equitable principles and except as rights to indemnification under the
Registration Rights Agreement may be limited by applicable law.

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(g)    The DTC Agreement. The DTC Agreement has been duly authorized and, on the
Closing Date, will have been duly executed and delivered by, and (assuming the
due authorization, execution and delivery thereof by the other parties thereto)
will constitute a valid and binding agreement of, the Company, enforceable
against the Company in accordance with its terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting the rights and remedies of creditors
or by general equitable principles.

(h)    Authorization of the Notes, the Exchange Notes and the Guarantees. (i)
The Notes to be purchased by the Initial Purchasers from the Company are in the
form contemplated by the Indenture, have been duly authorized for issuance and
sale pursuant to this Agreement and the Indenture and, at the Closing Date, will
have been duly executed by the Company and, when authenticated in the manner
provided for in the Indenture and delivered against payment of the purchase
price therefor, will constitute valid and binding agreements of the Company,
enforceable against the Company in accordance with their terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the rights and
remedies of creditors or by general equitable principles and will be entitled to
the benefits of the Indenture. (ii) The Exchange Notes have been duly and
validly authorized for issuance by the Company, and when issued and
authenticated in accordance with the terms of the Indenture, the Registration
Rights Agreement and the Exchange Offer, will constitute valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium, or similar laws relating to or affecting
enforcement of the rights and remedies of creditors or by general principles of
equity and will be entitled to the benefits of the Indenture. (iii) The
Guarantees of the Notes and the Exchange Notes are in the respective forms
contemplated by the Indenture, have been duly authorized for issuance and sale
pursuant to this Agreement and the Indenture and, at the Closing Date, will have
been duly executed by each of the Guarantors and, when the Notes and the
Exchange Notes have been authenticated in the manner provided for in the
Indenture and delivered against payment of the purchase price therefor, will
constitute valid and binding agreements of each such Guarantor, enforceable
against it in accordance with their terms, except as the enforcement thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights and remedies of creditors or by
general equitable principles and will be entitled to the benefits of the
Indenture.

(i)    Authorization of the Indenture. The Indenture has been duly authorized by
the Company and the Guarantors and, at the Closing Date, will have been duly
executed and delivered by, and will constitute a valid and binding agreement of,
the Company and the Guarantors, enforceable against the Company and each of the
Guarantors in accordance with its terms, except as the enforcement thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights and remedies of creditors or by
general equitable principles.

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(j)    Description of the Securities and the Indenture. The Securities, the
Exchange Securities and the Indenture conform, or will conform, in all material
respects to the respective statements relating thereto contained in the Offering
Memorandum.

(k)    No Material Adverse Change. Except as otherwise disclosed in the Offering
Memorandum, subsequent to the respective dates as of which information is given
in the Offering Memorandum: (i) there has been no material adverse change, or
any development that could reasonably be expected to result in a material
adverse change, in the condition, financial or otherwise, or in the earnings,
business, operations or prospects, whether or not arising from transactions in
the ordinary course of business, of the Company, the Guarantors and their
respective subsidiaries, considered as one entity (any such change or
development is called a “Material Adverse Change”); (ii) the Company, the
Guarantors and their respective subsidiaries, considered as one entity, have not
incurred any material liability or obligation, indirect, direct or contingent,
not in the ordinary course of business, nor entered into any material
transaction or agreement not in the ordinary course of business and (iii) there
has been no dividend or distribution of any kind declared, paid or made by the
Company, the Guarantors or their respective subsidiaries, on any class of
capital stock or other equity interest (other than cash dividends with respect
to the Company’s Series A Preferred Stock, $0.01 par value, $20 stated and
redemption value, maturing on October 31, 2010, as disclosed in the Offering
Memorandum) or repurchase or redemption by the Company, the Guarantors or any of
their respective subsidiaries of any class of capital stock or other equity
interest.

(l)    Independent Accountants. KPMG LLP, which expressed its opinion with
respect to the Company’s fiscal 2006 financial statements (which term as used in
this Agreement includes the related notes thereto) of the Company and its
subsidiaries filed with the Commission and included in the Offering Memorandum,
are independent public or certified public accountants within the meaning of
Regulation S-X under the Securities Act and the Exchange Act, and any non-audit
services provided by KPMG LLP to the Company or any of the Guarantors have been
approved by the Audit Committee of the Board of Directors of the Company.

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PricewaterhouseCoopers LLP, which expressed its opinion with respect to the
Company’s fiscal 2004 and 2005 financial statements (which term as used in this
Agreement includes the related notes thereto) of the Company and its
subsidiaries filed with the Commission and included in the Offering Memorandum,
are independent public or certified public accountants within the meaning of
Regulation S-X under the Securities Act and the Exchange Act, and any non-audit
services provided by PricewaterhouseCoopers LLP to the Company or any of the
Guarantors have been approved by the Audit Committee of the Board of Directors
of the Company.

(m)    Independent Petroleum Engineers. The written engineering reports prepared
by Cawley, Gillespie & Associates, Inc. (“Cawley, Gillespie”), an oil and gas
engineering consulting firm, as of December 31, 2006, setting forth the
engineering values attributable to the oil and gas properties of the Company and
its subsidiaries accurately reflect in all material respects the ownership
interests of the Company and its subsidiaries in the properties therein as of
December 31, 2006, except as otherwise disclosed in the Offering Memorandum. The
information furnished by the Company to Cawley, Gillespie for purposes of
preparing its report, including, without limitation, production, costs of
operation and development, agreements relating to current and future operations
and sales of production, was true, correct and complete in all material respects
on the date supplied and was prepared in accordance with customary industry
practices. Cawley, Gillespie, independent petroleum consultants, who prepared
estimates of the extent and value of proved oil and natural gas reserves, are
independent with respect to the Company and its subsidiaries.

(n)    Preparation of the Financial Statements. The financial statements,
together with the related schedules and notes, included in the Offering
Memorandum present fairly the consolidated financial position of the entities to
which they relate as of and at the dates indicated and the results of their
operations and cash flows for the periods specified. Such financial statements
have been prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved, except as may be
expressly stated in the related notes thereto. The financial statements and the
financial information included in the Offering Memorandum comply as to form with
the requirements applicable to registration statements on Form S-1 under the
Securities Act. The financial data set forth in “Item 6. Selected Consolidated
Financial Data” of the Company’s Form 10-K for the fiscal year ended December
31, 2006 (the “Form 10-K”) fairly present the information set forth therein on a
basis consistent with that of the audited financial statements contained in the
Form 10-K.

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(o)    Incorporation and Good Standing of the Company and its Subsidiaries. Each
of the Company and its subsidiaries has been duly incorporated or formed and is
validly existing as a corporation, limited partnership or limited liability
company, as the case may be, in good standing under the laws of the jurisdiction
of its incorporation or formation and has corporate, partnership or company, as
the case may be, power and authority to own, lease and operate its properties
and to conduct its business as described in the Offering Memorandum and, in the
case of the Company and the Guarantors, to enter into and perform its respective
obligations under each of this Agreement, the Registration Rights Agreement, the
DTC Agreement, the Securities, the Exchange Securities and the Indenture, as the
case may be, to which it is a party. Each of the Company and each subsidiary is
duly qualified as a foreign corporation, limited partnership or limited
liability company, as the case may be, to transact business and is in good
standing or equivalent status in each jurisdiction in which such qualification
is required, whether by reason of the ownership or leasing of property or the
conduct of business, except for such jurisdictions where the failure to so
qualify or to be in good standing would not, individually or in the aggregate,
result in a Material Adverse Change. All of the issued and outstanding capital
stock of each subsidiary has been duly authorized and validly issued, is fully
paid and nonassessable and is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge, lien,
encumbrance or claim (except as encumbered under the Company’s senior credit
agreement in effect on the date hereof). The Company does not own or control,
directly or indirectly, any corporation, association or other entity other than
the subsidiaries listed in Exhibit B hereto.

(p)    Capitalization and Other Capital Stock Matters. At December 31, 2006, on
an actual basis, and on an as adjusted basis, after giving pro forma effect to
the issuance and sale of the Securities pursuant hereto, the Company would have
an authorized and outstanding capitalization as set forth in the Offering
Memorandum under the caption “Capitalization” (other than for subsequent
issuances of capital stock, if any, pursuant to employee benefit plans described
in the Offering Memorandum or upon exercise of outstanding options or warrants
described in the Offering Memorandum). All of the outstanding shares of common
stock of the Company (the “Common Stock”) have been duly authorized and validly
issued, are fully paid and nonassessable and have been issued in compliance with
federal and state securities laws. None of the outstanding shares of Common
Stock were issued in violation of any preemptive rights, rights of first refusal
or other similar rights to subscribe for or purchase securities of the Company.
There are no authorized or outstanding options, warrants, preemptive rights,
rights of first refusal or other rights to purchase, or equity or debt
securities convertible into or exchangeable or exercisable for, any capital
stock of the Company or any of its subsidiaries other than those accurately
described in the Offering Memorandum. The description of the options or other
rights granted and/or exercised under the Company’s stock option plans set forth
in the Offering Memorandum accurately and fairly describes such options and
rights.

(q)    NASDAQ Listing. The Common Stock is registered pursuant to Section 12(b)
of the Exchange Act and is listed on The NASDAQ Stock Market (“NASDAQ”), and the
Company has taken no action designed to, or likely to have the effect of,
terminating the registration of the Common Stock under the Exchange Act or
delisting the Common Stock from NASDAQ, nor has the Company received any
notification that the Commission or the NASD, Inc. (the “NASD”) is contemplating
terminating such registration or listing.

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(r)    Non-Contravention of Existing Instruments; No Further Authorizations or
Approvals Required. None of the Company, the Guarantors or any of their
respective subsidiaries is in violation of its charter, regulations, by-laws,
partnership agreement, limited liability company agreement or similar
constitutive document or is in default (or, with the giving of notice or lapse
of time, would be in default) (“Default”) under any indenture, mortgage, loan or
credit agreement, note, contract, franchise, lease, license or other instrument
to which the Company, any of the Guarantors or any of their respective
subsidiaries is a party or by which it or any of them may be bound (including,
without limitation, the Company’s existing senior credit agreement and the
Company’s existing subordinated credit agreement) or to which any of the
property or assets of the Company or any of the Guarantors or any of their
respective subsidiaries is subject (each, an “Existing Instrument”), except for
such Defaults as would not, individually or in the aggregate, result in a
Material Adverse Change. The execution, delivery and performance of this
Agreement, the Registration Rights Agreement, the DTC Agreement and the
Indenture by the Company and each Guarantor party thereto, and the issuance and
delivery of the Securities and the Exchange Securities, and consummation of the
transactions contemplated hereby and thereby and by the Offering Memorandum (i)
have been duly authorized by all necessary corporate, partnership or company, as
the case may be, action and will not result in any violation of the provisions
of the charter, regulations, by-laws, partnership agreement, operating agreement
or other similar constitutive document of the Company, any Guarantor or any of
their respective subsidiaries, (ii) will not conflict with or constitute a
breach of, or Default or a Debt Repayment Triggering Event (as defined below)
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company, any Guarantor or any of
their respective subsidiaries pursuant to, or require the consent of any other
party to, any Existing Instrument, except for such conflicts, breaches,
Defaults, liens, charges or encumbrances as would not, individually or in the
aggregate, result in a Material Adverse Change and such consents as have been
obtained and are in full force and effect, and (iii) will not result in any
violation of any law, administrative regulation or administrative or court
decree applicable to the Company, any Guarantor or any of their respective
subsidiaries. No consent, approval, authorization or other order of, or
registration or filing with, any court or other governmental or regulatory
authority or agency, is required for the Company’s and the Guarantors’
execution, delivery and performance of this Agreement, the Registration Rights
Agreement, the DTC Agreement or the Indenture, to which it is a party, or the
issuance and delivery of the Securities or the Exchange Securities, or
consummation of the transactions contemplated hereby and thereby and by the
Offering Memorandum, except such as have been obtained or made by the Company or
the Guarantors and are in full force and effect under the Securities Act,
applicable securities laws of the several states of the United States or
provinces of Canada and except such as may be required by the securities laws of
the United States and the several states of the United States or provinces of
Canada with respect to the Company’s obligations under the Registration Rights
Agreement. As used herein, a “Debt Repayment Triggering Event” means any event
or condition which gives, or with the giving of notice or lapse of time would
give, the holder of any note, debenture or other evidence of indebtedness (or
any person acting on such holder’s behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by the Company,
the Guarantors or any of their respective subsidiaries.

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(s)    No Material Actions or Proceedings. To the best of the Company’s or any
Guarantor’s knowledge, there are no legal or governmental actions, suits,
investigations or proceedings pending or threatened (i) against or affecting the
Company, any Guarantor or any of their respective subsidiaries or (ii) which has
as the subject thereof any property owned or leased by, the Company, the
Guarantors or any of their respective subsidiaries, which (in any such case
under (i) or (ii) above) action, suit, investigation or proceeding, if
determined adversely to the Company, such Guarantor or such subsidiary would
result in a Material Adverse Change or adversely affect the consummation of the
transactions contemplated by this Agreement.

(t)    Intellectual Property Rights. The Company, the Guarantors and their
respective subsidiaries own, possess or license sufficient trademarks, trade
names, patent rights, copyrights, licenses, approvals, trade secrets and other
similar rights (collectively, “Intellectual Property Rights”) reasonably
necessary to conduct their businesses as now conducted; and the expected
expiration of any such Intellectual Property Rights, individually or in the
aggregate, would not result in a Material Adverse Change. None of the Company,
the Guarantors or any of their respective subsidiaries has received any notice
of infringement or conflict with asserted Intellectual Property Rights of
others, which infringement or conflict, if the subject of an unfavorable
decision, ruling or filing would result in a Material Adverse Change. None of
the Company, the Guarantors or any of their respective subsidiaries is in
default under the terms of any license or similar agreement related to any
Intellectual Property Rights necessary to conduct their business as now
conducted or contemplated except as would not result in a Material Adverse
Change.

(u)    All Necessary Permits, etc. Each of the Company, the Guarantors and their
respective subsidiaries possess such valid and current certificates, franchises,
grants, authorizations, qualifications, licenses, permits, easements, variances,
exceptions, certifications, registrations, consents, certificates or approvals
issued by the appropriate local, state, federal or foreign regulatory agencies
or bodies necessary for it to own, lease and operate the assets and properties
or to conduct their respective businesses, and none of the Company, the
Guarantors or any of their respective subsidiaries has received any notice of
proceedings relating to the revocation, cancellation or modification of, or
non-compliance with, any such certificate, authorization or permit which, either
individually or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, could result in a Material Adverse Change.

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(v)    Title to Properties. The Company, the Guarantors and each of their
respective subsidiaries have good and indefeasible title to (i) its oil and gas
properties to the extent included or reflected in the reports of Cawley,
Gillespie referenced in Section 1(m) above and (ii) all of the other properties
and assets reflected as owned in the financial statements referred to in Section
1(n) hereof (or elsewhere in the Offering Memorandum), in each case (except as
encumbered under the Company’s senior credit agreement in effect on the date
hereof) free and clear of any security interests, mortgages, liens,
encumbrances, equities, claims and other title defects, except such as do not
materially and adversely affect the value of such property and do not materially
interfere with the use made or proposed to be made of such property by the
Company, such Guarantor or such subsidiary. The real property, improvements,
equipment and personal property held under lease by the Company, any Guarantor
or any subsidiary are held under valid and enforceable leases, with such
exceptions as do not materially interfere with the use made or proposed to be
made of such real property, improvements, equipment or personal property by the
Company, such Guarantor or such subsidiary.

(w)    Tax Law Compliance. The Company, the Guarantors and their respective
subsidiaries have filed all necessary federal, state and foreign income and
franchise tax returns and have paid all taxes required to be paid by any of them
and, if due and payable, any related or similar assessment, fine or penalty
levied against any of them. The Company and each Guarantor have made, in all
material respects, accurate charges, accruals and reserves in the applicable
financial statements referred to in Section 1(n) hereof in respect of all
federal, state and foreign income and franchise taxes for all periods as to
which the tax liability of the Company, the Guarantors, or any of their
respective subsidiaries has not been finally determined.

(x)    Not an Investment Company. The Company and the Guarantors have been
advised of the rules and requirements under the Investment Company Act of 1940,
as amended (the “Investment Company Act,” which term, as used herein, includes
the rules and regulations of the Commission promulgated thereunder). The Company
and the Guarantors and their respective subsidiaries are not, and after receipt
of payment for the Securities will not be, an “investment company” within the
meaning of Investment Company Act and will each conduct their business in a
manner so that they will not become subject to the Investment Company Act.

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(y)    Insurance. Each of the Company the Company and its subsidiaries are
insured by recognized, financially sound institutions with policies in such
amounts and with such deductibles and policy limits and covering such risks as
are generally deemed adequate, appropriate and customary for their businesses
including, but not limited to, policies covering professional liability,
malpractice, product liability, employee and customer health, workers’
compensation, general liability, director and officer, business interruption,
real and personal property owned or leased by the Company and its subsidiaries
against theft, damage, destruction, acts of terrorism and vandalism and
earthquakes. The Company believes it has adequate, sufficient and appropriate
coverage under its policies to cover all of its known litigation and the Company
has sufficient insurance against its litigation reserves therefor, so that it
believes there is no need to take any additional reserve for any such litigation
under generally accepted accounting principles. The Company has no reason to
believe that it or any of its subsidiaries will not be able (i) to renew its
existing insurance coverage as and when such policies expire or (ii) to obtain
adequate and comparable coverage from similar institutions as may be necessary
or appropriate to conduct its business as now conducted and at a cost that would
not result in a Material Adverse Change. There are no claims by the Company or
any of its subsidiaries under any current insurance policy as to which any
insurance company or institution is denying, or will deny, liability or coverage
or defending under a reservation of rights clause.

(z)    No Price Stabilization or Manipulation. None of the Company, the
Guarantors or any of their respective Affiliates has taken or will take,
directly or indirectly, any action designed to or that might be reasonably
expected to cause or result in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Securities.

(aa)    Solvency. Each of the Company and the Guarantors is, and immediately
after the Closing Date will be, Solvent. As used herein, the term “Solvent”
means, with respect to any such person on a particular date, that on such date
(i) the fair market value of the assets of such person is greater than the total
amount of liabilities (including contingent liabilities) of such person, (ii)
the present fair salable value of the assets of such person is greater than the
amount that will be required to pay the probable liabilities of such person on
its debts as they become absolute and matured, (iii) such person is able to
realize upon its assets and pay its debts and other liabilities, including
contingent obligations, as they mature and (iv) such person does not have
unreasonably small capital.

(bb)    Compliance with Sarbanes-Oxley. The Company and its subsidiaries and
their respective officers and directors are in compliance in all material
respects with the applicable provisions of the Sarbanes-Oxley Act of 2002 (the
“Sarbanes-Oxley Act,” which term, as used herein, includes the rules and
regulations of the Commission promulgated thereunder). The principal executive
officer and the principal financial officer of the Company have made all
certifications required by the Sarbanes-Oxley Act, and the statements contained
in any such certification are complete and correct.

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(cc)    MD&A. There are no transactions, arrangements or other relationships,
including but not limited to off balance sheet transactions, which would be
required to be included in the Offering Memorandum if the Offering Memorandum
were a registration statement on Form S-1 by Item 303 of Regulation S-K under
the Securities Act which are not so described or described as required.

(dd)    Company’s Accounting System. The Company and its subsidiaries maintain a
system of accounting controls that is in compliance in all material respects
with the Sarbanes-Oxley Act and is sufficient to provide reasonable assurances
that: (i) transactions are executed in accordance with management’s general or
specific authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.

(ee)    Disclosure Controls and Procedures. The Company has established and
maintains disclosure controls and procedures (as such term is defined in Rules
13a-15 and 15d-14 under the Exchange Act); such disclosure controls and
procedures are designed to ensure that material information relating to the
Company and its subsidiaries is made known to the chief executive officer and
chief financial officer of the Company by others within the Company or any of
its subsidiaries, and such disclosure controls and procedures are reasonably
effective to perform the functions for which they were established subject to
the limitations of any such control system; the Company’s auditors and the Audit
Committee of the Board of Directors of the Company have been advised of: (i) any
significant deficiencies or material weaknesses in the design or operation of
internal controls which could adversely affect the Company’s ability to record,
process, summarize, and report financial data; and (ii) any fraud, whether or
not material, that involves management or other employees who have a role in the
Company’s internal controls; and since the date of the most recent evaluation of
such disclosure controls and procedures, there have been no significant changes
in internal controls or in other factors that could significantly affect
internal controls, including any corrective actions with regard to significant
deficiencies and material weaknesses.

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(ff)    Compliance with Environmental Laws. Except as would not, individually or
in the aggregate, result in a Material Adverse Change: (i) the Company, the
Guarantors and each of their respective subsidiaries have all permits,
authorizations and approvals required under any Environmental Laws (as defined
below) and are in compliance with their requirements, (ii) to the best of the
Company’s and the Guarantors’ knowledge, none of the Company, the Guarantors or
any of their respective subsidiaries is in violation of any federal, state,
local or foreign law or regulation relating to pollution or protection of human
health or the environment (including, without limitation, ambient air, surface
water, groundwater, land surface or subsurface strata) or wildlife, including,
without limitation, laws and regulations relating to emissions, discharges,
releases or threatened releases of chemicals, pollutants, contaminants, wastes,
toxic substances, hazardous substances, petroleum and petroleum products
(collectively, “Materials of Environmental Concern”), or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Materials of Environmental Concern (collectively,
“Environmental Laws”), which violation includes, without limitation,
noncompliance with any permits or other governmental authorizations required for
the operation of the business of the Company, the Guarantors or any of their
respective subsidiaries under applicable Environmental Laws, or noncompliance
with the terms and conditions thereof, nor have the Company, any Guarantor or
any of their respective subsidiaries received any written communication, whether
from a governmental authority, citizens group, employee or otherwise, that
alleges that either the Company, any Guarantor or any of their respective
subsidiaries is in violation of any Environmental Law; (iii) there is no claim,
action or cause of action filed with a court or governmental authority, no
investigation with respect to which the Company has received written notice, and
no written notice by any person or entity alleging potential liability for
investigatory costs, cleanup costs, governmental responses costs, natural
resources damages, property damages, personal injuries, attorneys’ fees or
penalties arising out of, based on or resulting from the presence, or release
into the environment, of any Material of Environmental Concern at any location
owned, leased or operated by the Company, any Guarantor or any of their
respective subsidiaries, now or in the past (collectively, “Environmental
Claims”), pending or, to the best of the Company’s and the Guarantors’
knowledge, threatened against the Company, any Guarantor or any of their
respective subsidiaries or any person or entity whose liability for any
Environmental Claim the Company, any Guarantor or any of their respective
subsidiaries has retained or assumed either contractually or by operation of
law; and (iv) to the best of the Company’s and the Guarantors’ knowledge, there
are no past or present actions, activities, circumstances, conditions, events or
incidents, including, without limitation, the release, emission, discharge,
presence or disposal of any Material of Environmental Concern, that could result
in a violation of any Environmental Law or form the basis of a potential
Environmental Claim against the Company, any Guarantor or any of their
respective subsidiaries or against any person or entity whose liability for any
Environmental Claim the Company, any Guarantor or any of their respective
subsidiaries has retained or assumed either contractually or by operation of
law. Neither the Company nor any of its subsidiaries has been named as a
“potentially responsible party” under the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended.

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(gg)    Periodic Review of Costs of Environmental Compliance. In the ordinary
course of its business, the Company conducts a periodic review of the effect of
Environmental Laws on the business, operations and properties of the Company and
its subsidiaries, in the course of which it identifies and evaluates associated
costs and liabilities (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related constraints
on operating activities and any potential liabilities to third parties). On the
basis of such review and the amount of its established reserves, the Company has
reasonably concluded that such associated costs and liabilities would not,
individually or in the aggregate, result in a Material Adverse Change.

(hh)    ERISA Compliance. The Company and its subsidiaries and any “employee
benefit plan,” as defined under the Employee Retirement Income Security Act of
1974 (as amended, “ERISA,” which term, as used herein, includes the regulations
and published interpretations thereunder), established or maintained by the
Company, its subsidiaries or their “ERISA Affiliates” (as defined below) are in
compliance in all material respects with the applicable provisions of ERISA, or
if not in material compliance such noncompliance would not result in a Material
Adverse Change. “ERISA Affiliate” means, with respect to the Company or a
subsidiary, any member of any group of organizations described in Section 414 of
the Internal Revenue Code of 1986 (as amended, the “Code,” which term, as used
herein, includes the regulations and published interpretations thereunder) of
which the Company or such subsidiary is a member. No “reportable event” (as
defined under ERISA) for which notice requirements have not been waived has
occurred or is reasonably expected to occur with respect to any “employee
benefit plan” established or maintained by the Company, its subsidiaries or any
of their ERISA Affiliates and which is covered by Title IV of ERISA, except for
such reportable events which would not, individually or in the aggregate, result
in a Material Adverse Change. No “employee benefit plan” established or
maintained by the Company, its subsidiaries or any of their ERISA Affiliates, if
such “employee benefit plan” were terminated as of the most recent annual
valuation date for such plan, would have any “amount of unfunded benefit
liabilities” (as defined under ERISA) that would result in a Material Adverse
Change. Neither the Company, its subsidiaries nor any of their ERISA Affiliates
has incurred or reasonably expects to incur any liability under (i) Title IV of
ERISA with respect to termination of, or withdrawal from, any “employee benefit
plan” or (ii) Sections 412, 4971, 4975 or 4980B of the Code. Each “employee
benefit plan” established or maintained by the Company, its subsidiaries or any
of their ERISA Affiliates that is intended to be qualified under Section 401 of
the Code is so qualified and nothing has occurred, whether by action or failure
to act, which would cause the loss of such qualification. For the purposes of
this section (hh), “subsidiaries” means those companies listed on Exhibit B
hereto.

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(ii)    Compliance with Labor Laws. Except as would not, individually or in the
aggregate, result in a Material Adverse Change, (i) to the best of the Company’s
and the Guarantors’ knowledge, there is (A) no unfair labor practice complaint
pending or threatened against the Company, the Guarantors or any of their
respective subsidiaries before the National Labor Relations Board or any state
or local labor relations board, and no grievance or arbitration proceeding
arising out of or under collective bargaining agreements pending or threatened,
against the Company, the Guarantors or any of their respective subsidiaries, (B)
no strike, labor dispute, slowdown or stoppage pending or threatened against the
Company, the Guarantors or any of their respective subsidiaries and (C) no union
representation question existing with respect to the employees of the Company,
the Guarantors or any of their respective subsidiaries and no union organizing
activities taking place, (ii) there has been no violation of any federal, state
or local law relating to discrimination in hiring, promotion or pay of employees
or of any applicable wage or hour laws, and (iii) none of the Company or its
subsidiaries is aware of any existing, threatened or imminent labor disturbance
by the employees of any of its principal customers, suppliers or contractors.

(jj)    No Unlawful Contributions or Other Payments. Except as would not,
individually or in the aggregate, result in a Material Adverse Change, neither
the Company, the Guarantors or any of their respective subsidiaries nor, to the
best of the Company’s and the Guarantors’ knowledge, any director, officer,
employee or agent of the Company, any Guarantor or any of their respective
subsidiaries, has, directly or indirectly (i) made any contribution or other
payment to any official of, or candidate for, any federal, state or foreign
office in violation of any law of the character necessary to be disclosed in the
Offering Memorandum in order to make the statements therein not misleading, (ii)
used any corporate funds for unlawful contributions, gifts, entertainment or
other unlawful expenses relating to political activity; (iii) violated any
provision of the Foreign Corrupt Practices Act of 1977, as amended; or (iv) made
any other unlawful payment.

(kk)    Compliance with Regulation S. The Company, the Guarantors their
respective affiliates and all persons acting on their behalf (other than the
Initial Purchasers, as to whom the Company and the Guarantors make no
representation) have complied with and will comply with the offering
restrictions requirements of Regulation S in connection with the offering of the
Securities outside the United States and, in connection therewith, the Offering
Memorandum will contain the disclosure required by Rule 902. The Company is a
“reporting issuer,” as defined in Rule 902 under the Securities Act.

(ll)    Taxes; Fees. There are no stamp or other issuance or transfer taxes or
duties or other similar fees or charges required to be paid by the Company or
the Guarantors in connection with the execution and delivery of this Agreement
or the issuance or sale by the Company and the Guarantors of the Securities or
the Exchange Securities.

Any certificate signed by an officer of the Company, any Guarantor or any of
their respective subsidiaries and delivered to the Initial Purchasers or to
counsel for the Initial Purchasers on the Closing Date shall be deemed to be a
representation and warranty by the Company, such Guarantor or such subsidiary to
each Initial Purchaser as to the matters set forth therein.

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SECTION 2.  Purchase, Sale and Delivery of the Securities.

(a)    The Securities. Each of the Company and the Guarantors agrees to issue
and sell to the Initial Purchasers, severally and not jointly, all of the
Securities, and the Initial Purchasers agree, severally and not jointly, to
purchase from the Company and the Guarantors the aggregate principal amount of
Securities set forth opposite their names on Schedule A, at a purchase price of
97.50% of the principal amount thereof payable on the Closing Date, in each
case, on the basis of the representations, warranties and agreements herein
contained, and upon the terms, subject to the conditions thereto, herein set
forth.

(b)    The Closing Date. Delivery of certificates for the Securities in
definitive form to be purchased by the Initial Purchasers and payment therefor
shall be made at the offices of Fried, Frank, Harris, Shriver & Jacobson LLP,
One New York Plaza, New York, New York 10004 (or such other place as may be
agreed to by the Company and Banc of America Securities LLC) at 9:00 a.m. New
York City time, on April 9, 2007 or such other time and date as Banc of America
Securities LLC shall designate by notice to the Company (the time and date of
such closing are called the “Closing Date”). The Company hereby acknowledges
that circumstances under which Banc of America Securities LLC may provide notice
to postpone the Closing Date as originally scheduled include, but are in no way
limited to, any determination by the Company or the Initial Purchasers to
recirculate to investors copies of an amended or supplemented Offering
Memorandum or a delay as contemplated by the provisions of Section 16 hereof.

(c)    Delivery of the Securities. The Company shall deliver, or cause to be
delivered, to Banc of America Securities LLC for the accounts of the several
Initial Purchasers certificates for the Notes and the Guarantees at the Closing
Date against the irrevocable release of a wire transfer of immediately available
funds for the amount of the purchase price therefor to an account or accounts
specified by the Company. The certificates for the Notes shall be in such
denominations and registered in the name of Cede & Co., as nominee of the
Depositary, pursuant to the DTC Agreement, and shall be made available for
inspection on the business day preceding the Closing Date at a location in New
York City, as Banc of America Securities LLC may designate. Time shall be of the
essence, and delivery at the time and place specified in this Agreement is a
further condition to the obligations of the Initial Purchasers.

(d)    Initial Purchasers as Qualified Institutional Buyers. Each Initial
Purchaser severally and not jointly represents and warrants to, and agrees with,
the Company that it is a “qualified institutional buyer” within the meaning of
Rule 144A (a “Qualified Institutional Buyer”).

SECTION 3.  Additional Covenants. The Company and the Guarantors, jointly and
severally, further covenant and agree with each Initial Purchaser as follows:

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(a)    Preparation of Final Offering Memorandum; Initial Purchasers’ Review of
Proposed Amendments and Supplements. As promptly as practicable following the
Time of Execution and in any event not later than the second business day
following the date hereof, the Company will prepare and deliver to the Initial
Purchasers the Final Offering Memorandum, which shall consist of the Preliminary
Offering Memorandum as modified only by the information contained in the Pricing
Supplement. The Company will not amend or supplement the Preliminary Offering
Memorandum or the Pricing Supplement. The Company will not amend or supplement
the Final Offering Memorandum prior to the Closing Date unless the Initial
Purchasers shall previously have been furnished a copy of the proposed amendment
or supplement at least two business days prior to the proposed use or filing,
and shall not have objected to such amendment or supplement.

(b)    Amendments and Supplements to the Final Offering Memorandum and Other
Securities Act Matters. If, prior to the later of (x) the Closing Date and (y)
the completion of the placement of the Securities by the Initial Purchasers with
the Subsequent Purchasers, any event shall occur or condition exist as a result
of which it is necessary to amend or supplement the Final Offering Memorandum,
as then amended or supplemented, in order to make the statements therein, in the
light of the circumstances when the Final Offering Memorandum is delivered to a
Subsequent Purchaser, not misleading, or if in the judgment of the Initial
Purchasers or counsel for the Initial Purchasers it is otherwise necessary to
amend or supplement the Final Offering Memorandum to comply with law, the
Company agrees to promptly prepare (subject to Section 3 hereof), and furnish at
its own expense to the Initial Purchasers, amendments or supplements to the
Final Offering Memorandum so that the statements in the Final Offering
Memorandum as so amended or supplemented will not, in the light of the
circumstances at the Closing Date and at the time of sale of Securities, be
misleading or so that the Final Offering Memorandum, as amended or supplemented,
will comply with all applicable law.

Following the consummation of the Exchange Offer or the effectiveness of an
applicable shelf registration statement and for so long as the Securities are
outstanding if, in the judgment of the Initial Purchasers, the Initial
Purchasers or any of their affiliates (as such term is defined in the Securities
Act) are required to deliver a prospectus in connection with sales of, or
market-making activities with respect to, the Securities, to periodically amend
the applicable registration statement so that the information contained therein
complies with the requirements of Section 10 of the Securities Act, to amend the
applicable registration statement or supplement the related prospectus or the
documents incorporated therein when necessary to reflect any material changes in
the information provided therein so that the registration statement and the
prospectus will not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances existing as of the date the prospectus is so
delivered, not misleading and to provide the Initial Purchasers with copies of
each amendment or supplement filed and such other documents as the Initial
Purchasers may reasonably request.

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The Company and the Guarantors hereby expressly acknowledge that the
indemnification and contribution provisions of Sections 8 and 9 hereof are
specifically applicable and relate to each offering memorandum, registration
statement, prospectus, amendment or supplement referred to in this Section 3.

(c)    Copies of the Offering Memorandum. The Company agrees to furnish the
Initial Purchasers, without charge, as many copies of the Pricing Disclosure
Package and the Final Offering Memorandum and any amendments and supplements
thereto as they shall have reasonably requested.

(d)    Blue Sky Compliance. Each of the Company and the Guarantors shall
cooperate with the Initial Purchasers and counsel for the Initial Purchasers to
qualify or register (or to obtain exemptions from qualifying or registering) all
or any part of the Securities for offer and sale under the securities laws of
the several states of the United States, the provinces of Canada or any other
jurisdictions designated by the Initial Purchasers, shall comply with such laws
and shall continue such qualifications, registrations and exemptions in effect
so long as required for the distribution of the Securities. None of the Company
or any of the Guarantors shall be required to qualify as a foreign corporation
or to take any action that would subject it to general service of process in any
such jurisdiction where it is not presently qualified or where it would be
subject to taxation as a foreign corporation. The Company will advise the
Initial Purchasers promptly of the suspension of the qualification or
registration of (or any such exemption relating to) the Securities for offering,
sale or trading in any jurisdiction or any initiation or threat of any
proceeding for any such purpose, and in the event of the issuance of any order
suspending such qualification, registration or exemption, each of the Company
and the Guarantors shall use its reasonable best efforts to obtain the
withdrawal thereof at the earliest possible moment.

(e)    Use of Proceeds. The Company shall apply the net proceeds from the sale
of the Securities sold by it in the manner described under the caption “The
Offering -Use of Proceeds” in the Pricing Disclosure Package.

(f)    The Depositary. The Company will cooperate with the Initial Purchasers
and use its best efforts to permit the Securities to be eligible for clearance
and settlement through the facilities of the Depositary.

(g)    Additional Issuer Information. Prior to the completion of the placement
of the Securities by the Initial Purchasers with the Subsequent Purchasers, the
Company shall file, on a timely basis, with the Commission and NASDAQ all
reports and documents required to be filed under Section 13 or 15 of the
Exchange Act. Additionally, at any time when the Company is not subject to
Section 13 or 15 of the Exchange Act, for the benefit of holders and beneficial
owners from time to time of the Securities, the Company shall furnish, at its
expense, upon request, to holders and beneficial owners of Securities and
prospective purchasers of Securities information (“Additional Issuer
Information”) satisfying the requirements of Rule 144A(d).

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(h)    Agreement Not To Offer or Sell Additional Securities. During the period
of 180 days following the date hereof, the Company and each of the Guarantors
will not, without the prior written consent of Banc of America Securities LLC
(which consent may be withheld at the sole discretion of Banc of America
Securities LLC), directly or indirectly, sell, offer, contract or grant any
option to sell, pledge, transfer or establish an open “put equivalent position”
within the meaning of Rule 16a-1 under the Exchange Act, or otherwise dispose of
or transfer, or announce the offering of, or file any registration statement
under the Securities Act in respect of, any debt securities of the Company or
any of the Guarantors or securities exchangeable for or convertible into debt
securities of the Company or any of the Guarantors (other than as contemplated
by this Agreement and to register the Exchange Securities).

(i)    Future Reports to the Initial Purchasers. At any time when the Company is
not subject to Section 13 or 15 of the Exchange Act and any Securities or
Exchange Securities remain outstanding, the Company will furnish to Banc of
America Securities LLC: (i) as soon as practicable after the end of each fiscal
year, copies of the Annual Report of the Company containing the balance sheet of
the Company as of the close of such fiscal year and statements of income,
stockholders’ equity and cash flows for the year then ended and the opinion
thereon of the Company’s independent public or certified public accountants;
(ii) as soon as practicable after the filing thereof, copies of each proxy
statement, Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current
Report on Form 8-K or other report filed by the Company with the Commission, the
NASD or any securities exchange; and (iii) as soon as available, copies of any
report or communication of the Company mailed generally to holders of its
capital stock or debt securities (including the holders of the Securities), if,
in each case, such documents are not filed with the Commission within the time
periods specified by the Commission’s rules and regulations under Section 13 or
15 of the Exchange Act.

(j)    No Integration. The Company agrees that it will not, and will cause its
Affiliates and subsidiaries not to, make any offer or sale of securities of the
Company of any class if, as a result of the doctrine of “integration” referred
to in Rule 502 under the Securities Act, such offer or sale would render invalid
(for the purpose of (i) the sale of the Securities by the Company to the Initial
Purchasers, (ii) the resale of the Securities by the Initial Purchasers to
Subsequent Purchasers or (iii) the resale of the Securities by such Subsequent
Purchasers to others) the exemption from the registration requirements of the
Securities Act regarding the Securities provided by Section 4(2) thereof or by
Rule 144A or by Regulation S thereunder or otherwise.

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(k)    No Restricted Resales. During the period of two years after the Closing
Date, the Company will not, and will not permit any of its affiliates (as
defined in Rule 144 under the Securities Act) to resell any of the Notes which
constitute “restricted securities” under Rule 144 that have been reacquired by
any of them.

(l)    Legended Securities. Each certificate for a Note will bear the legend
contained in “Notice to Investors” in the Preliminary Offering Memorandum for
the time period and upon the other terms stated in the Preliminary Offering
Memorandum.

(m)    PORTAL. The Company will use its reasonable best efforts to cause such
Notes to be eligible for the PORTAL Market.

Banc of America Securities LLC, on behalf of the several Initial Purchasers,
may, in its sole discretion, waive in writing the performance by the Company or
any Guarantor of any one or more of the foregoing covenants or extend the time
for their performance.

SECTION 4.  Payment of Expenses. Each of the Company and the Guarantors agrees
to pay all costs, fees and expenses incurred in connection with the performance
of its obligations hereunder and in connection with the transactions
contemplated hereby, including, without limitation, (i) all expenses incident to
the issuance and delivery of the Securities (including all printing and
engraving costs), (ii) all necessary issue, transfer and other stamp taxes in
connection with the issuance and sale of the Securities to the Initial
Purchasers, (iii) all fees and expenses of the Company’s and the Guarantors’
counsel, independent public or certified public accountants and other advisors,
(iv) all costs and expenses incurred in connection with the preparation,
printing, filing, shipping and distribution of the Pricing Disclosure Package
and the Final Offering Memorandum (including financial statements and exhibits),
and all amendments and supplements thereto, this Agreement, the Registration
Rights Agreement, the Indenture, the DTC Agreement and the Notes and Guarantees,
(v) all filing fees, attorneys’ fees and expenses incurred by the Company, the
Guarantors or the Initial Purchasers in connection with qualifying or
registering (or obtaining exemptions from the qualification or registration of)
all or any part of the Securities for offer and sale under the securities laws
of the several states of the United States, the provinces of Canada or other
jurisdictions designated by the Initial Purchasers (including, without
limitation, the cost of preparing, printing and mailing preliminary and final
blue sky or legal investment memoranda and any related supplements to the
Pricing Disclosure Package or the Final Offering Memorandum), (vi) the fees and
expenses of the Trustee, including the reasonable fees and disbursements of
counsel for the Trustee in connection with the Indenture, the Securities and the
Exchange Securities, (vii) any fees payable in connection with the rating of the
Securities or the Exchange Securities with the ratings agencies and the listing
of the Securities with the PORTAL Market, (viii) any filing fees incident to,
and any reasonable fees and disbursements of counsel to the Initial Purchasers
in connection with the review by the NASD, if any, of the terms of the sale of
the Securities or the Exchange Securities, (ix) all fees and expenses (including
reasonable fees and expenses of counsel) of the Company and the Guarantors in
connection with approval of the Securities by the Depositary for “book-entry”
transfer, and the performance by the Company and the Guarantors of their
respective other obligations under this Agreement, and (x) all of the Company’s
expenses incident to the “road show” for the offering of the Securities,
including one-half of the cost of any chartered airplane or other
transportation. Except as provided in this Section 4 and Sections 6, 8 and 9
hereof, the Initial Purchasers shall pay their own expenses, including the fees
and disbursements of their counsel.

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SECTION 5.  Conditions of the Obligations of the Initial Purchasers. The
obligations of the several Initial Purchasers to purchase and pay for the
Securities as provided herein on the Closing Date shall be subject to the
accuracy of the representations and warranties on the part of the Company and
the Guarantors set forth in Section 1 hereof as of the date hereof and as of the
Closing Date as though then made and to the timely performance by the Company
and the Guarantors of their covenants and other obligations hereunder, and to
each of the following additional conditions:

(a)    Accountants’ Comfort Letters. (x) On the date hereof, the Initial
Purchasers shall have received from PricewaterhouseCoopers LLP, the Company’s
former independent public or certified public accountants, a “comfort letter”
dated the date hereof addressed to the Initial Purchasers, in form and substance
satisfactory to the Initial Purchasers, covering certain financial information
in the Preliminary Offering Memorandum and the Pricing Supplement and other
customary matters. In addition, on the Closing Date, the Initial Purchasers
shall have received from such accountants, a “bring-down comfort letter” dated
the Closing Date addressed to the Initial Purchasers, in form and substance
satisfactory to the Initial Purchasers, in the form of the “comfort letter”
delivered on the date hereof, except that (i) it shall cover the financial
information in the Final Offering Memorandum and any amendment or supplement
thereto and (ii) procedures shall be brought down to a date no more than three
business days prior to the Closing Date.

(y)    On the date hereof, the Initial Purchasers shall have received from KPMG
LLP, the Company’s current independent public or certified public accountants, a
“comfort letter” dated the date hereof addressed to the Initial Purchasers, in
form and substance satisfactory to the Initial Purchasers, covering certain
financial information included in the Preliminary Offering Memorandum and the
Pricing Supplement and other customary matters. In addition, on the Closing
Date, the Initial Purchasers shall have received from such accountants, a
“bring-down comfort letter” dated the Closing Date addressed to the Initial
Purchasers, in form and substance satisfactory to the Initial Purchasers, in the
form of the “comfort letter” delivered on the date hereof, except that (i) it
shall cover the financial information included in the Final Offering Memorandum
and any amendment or supplement thereto and (ii) procedures shall be brought
down to a date no more than three business days prior to the Closing Date.

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(b)    No Material Adverse Change or Ratings Agency Change. For the period from
and after the date of this Agreement and prior to the Closing Date:

(i)    in the reasonable judgment of the Initial Purchasers there shall not have
occurred any Material Adverse Change; and

(ii)    there shall not have occurred any downgrading, nor shall any notice have
been given of any intended or potential downgrading or of any review for a
possible change that does not indicate the direction of the possible change, in
the rating accorded any securities or indebtedness of the Company, any Guarantor
or any of their respective subsidiaries by any “nationally recognized
statistical rating organization” as such term is defined for purposes of Rule
436 under the Securities Act.

(c)    Opinion of Counsel for the Company. On the Closing Date the Initial
Purchasers shall have received the favorable opinion of Thompson & Knight LLP,
counsel for the Company, dated as of such Closing Date, the form of which is
attached as Exhibit A.

(d)    Opinion of Counsel for the Initial Purchasers. On the Closing Date the
Initial Purchasers shall have received the favorable opinion of Fried, Frank,
Harris, Shriver & Jacobson LLP, counsel for the Initial Purchasers, dated as of
such Closing Date, with respect to such matters as may be reasonably requested
by the Initial Purchasers.

(e)    Officers’ Certificate. On the Closing Date the Initial Purchasers shall
have received a written certificate executed by the Chairman of the Board, Chief
Executive Officer or President of the Company and each Guarantor and the Chief
Financial Officer or Chief Accounting Officer of the Company and each Guarantor,
dated as of the Closing Date, to the effect set forth in Section 5(b)(ii)
hereof, and further to the effect that:

(i)    for the period from and after the date of this Agreement and prior to the
Closing Date there has not occurred, to the best of their knowledge, any
Material Adverse Change;

(ii)    the representations, warranties and covenants of the Company and the
Guarantors set forth in Section 1 hereof were true and correct as of the Time of
Execution and are true and correct as of the Closing Date with the same force
and effect as though expressly made on and as of the Closing Date; and

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(iii)    the Company and the Guarantors have complied with all the agreements
and satisfied all the conditions on their part to be performed or satisfied at
or prior to the Closing Date.

(f)    Engineers Letter. On the date hereof, the Initial Purchasers shall have
received from Cawley, Gillespie, a letter dated the date hereof addressed to the
Initial Purchasers, in form and substance satisfactory to the Initial
Purchasers, containing the conclusions and findings of such firm with respect to
the oil and gas properties of the Company and its subsidiaries. In addition, on
the Closing Date, the Initial Purchasers shall have received from Cawley,
Gillespie, a letter dated the Closing Date addressed to the Initial Purchasers
(which may refer to the letter previously delivered to the Initial Purchasers),
in form and substance satisfactory to the Initial Purchasers, containing the
conclusions and findings of such firm with respect to the oil and gas properties
of the Company and its subsidiaries.

(g)    PORTAL Listing. At the Closing Date the Notes shall have been designated
for trading on the PORTAL Market.

(h)    Registration Rights Agreement and Indenture. The Company and the
Guarantors shall have entered into the Registration Rights Agreement and the
Indenture, the Trustee shall have entered into the Indenture and the Initial
Purchasers shall have received executed counterparts thereof.

(i)    Additional Documents. On or before the Closing Date, the Initial
Purchasers and counsel for the Initial Purchasers shall have received such
information, documents and opinions as they may reasonably require for the
purposes of enabling them to pass upon the issuance and sale of the Securities
as contemplated herein, or in order to evidence the accuracy of any of the
representations and warranties, or the satisfaction of any of the conditions or
agreements, herein contained.

If any condition specified in this Section 5 is not satisfied when and as
required to be satisfied, this Agreement may be terminated by the Initial
Purchasers by notice to the Company at any time on or prior to the Closing Date,
which termination shall be without liability on the part of any party to any
other party, except that Sections 4, 6, 8 and 9 hereof shall at all times be
effective and shall survive such termination.

SECTION 6.  Reimbursement of Initial Purchasers’ Expenses. If this Agreement is
terminated by the Initial Purchasers pursuant to Section 5 or 10 hereof,
including if the sale to the Initial Purchasers of the Securities on the Closing
Date is not consummated because of any refusal, inability or failure on the part
of the Company to perform any agreement herein or to comply with any provision
hereof (other than as a result of a breach by this Agreement by the Initial
Purchasers), the Company agrees to reimburse the Initial Purchasers (or such
Initial Purchasers as have terminated this Agreement with respect to
themselves), severally, upon demand for all out-of-pocket costs and expenses
that shall have been reasonably incurred by the Initial Purchasers in connection
with the proposed purchase and the offering and sale of the Securities,
including, without limitation, fees and disbursements of counsel, printing
expenses, travel expenses, expenses associated with the road show for the
marketing of the Securities, postage, facsimile and telephone charges.

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SECTION 7.  Offer, Sale and Resale Procedures. Each of the Initial Purchasers,
on the one hand, and the Company and the Guarantors, on the other hand, hereby
agree to observe the following procedures in connection with the offer and sale
of the Securities:

(A)  Offers and sales of the Securities will be made only by the Initial
Purchasers or Affiliates thereof qualified to do so in the jurisdictions in
which such offers or sales are made. Each such offer or sale shall only be made
to persons whom the offeror or seller reasonably believes to be Qualified
Institutional Buyers or non-U.S. persons outside the United States to whom the
offeror or seller reasonably believes offers and sales of the Securities may be
made in reliance upon Regulation S, upon the terms and conditions set forth in
Annex I hereto, which Annex I is hereby expressly made a part hereof.

(B)  The Securities will be offered by approaching prospective Subsequent
Purchasers on an individual basis. No general solicitation or general
advertising (within the meaning of Rule 502 under the Securities Act) will be
used in the United States in connection with the offering of the Securities.

(C)  Upon original issuance by the Company, and until such time as the same is
no longer required under the applicable requirements of the Securities Act, the
Notes (and all securities issued in exchange therefor or in substitution
thereof, other than the Exchange Notes) shall bear the following legend:

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“THIS NOTE AND THE GUARANTEES ENDORSED HEREON HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE
SECURITIES LAWS. NEITHER THIS NOTE, THE GUARANTEES ENDORSED HEREON, NOR ANY
INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION
OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO THE REGISTRATION
REQUIREMENTS OF, THE SECURITIES ACT. THE HOLDER OF THIS NOTE AND THE GUARANTEES
ENDORSED HEREON, BY ITS ACCEPTANCE HEREOF, AGREES NOT TO OFFER, SELL OR
OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE WHICH IS TWO YEARS AFTER THE
LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY
OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS NOTE AND THE GUARANTEES
ENDORSED HEREON (OR ANY PREDECESSOR OF THIS NOTE AND THE GUARANTEES ENDORSED
HEREON) (THE “RESALE RESTRICTION TERMINATION DATE”), EXCEPT THAT THE NOTES AND
GUARANTEES MAY BE TRANSFERRED (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (C)
FOR SO LONG AS THE NOTES AND THE GUARANTEES ENDORSED THEREON ARE ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”), TO A PERSON
IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE
144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT
OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY’S AND
THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (1) PURSUANT TO
CLAUSE (D) PRIOR TO THE END OF THE 40-DAY DISTRIBUTION COMPLIANCE PERIOD WITHIN
THE MEANING OF REGULATION S UNDER THE SECURITIES ACT OR PURSUANT TO CLAUSE (E)
PRIOR TO THE RESALE RESTRICTION TERMINATION DATE TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH
OF THEM, AND (2) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE
OF TRANSFER IN THE FORM APPEARING ON THIS NOTE IS COMPLETED AND DELIVERED BY THE
TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF A
HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.”

Following the sale of the Securities by the Initial Purchasers to Subsequent
Purchasers pursuant to the terms hereof, the Initial Purchasers shall not be
liable or responsible to the Company or any Guarantor for any losses, damages or
liabilities suffered or incurred by the Company or any Guarantor, including any
losses, damages or liabilities under the Securities Act, arising from or
relating to any resale or transfer of any Security by a Subsequent Purchaser or
a subsequent transferee.

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SECTION 8.  Indemnification.

(a)    Indemnification of the Initial Purchasers. Each of the Company and the
Guarantors, jointly and severally, agrees to indemnify and hold harmless each
Initial Purchaser, its directors, officers and employees, and each person, if
any, who controls any Initial Purchaser within the meaning of the Securities Act
and the Exchange Act against any loss, claim, damage, liability or expense, as
incurred, to which such Initial Purchaser, director, officer, employee or
controlling person may become subject, under the Securities Act, the Exchange
Act or other federal or state statutory law or regulation, or at common law or
otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of the Company and/or any Guarantor sought to
be bound), insofar as such loss, claim, damage, liability or expense (or actions
in respect thereof as contemplated below) arises out of or is based: (i) upon
any untrue statement or alleged untrue statement of a material fact contained in
the Pricing Disclosure Package or the Final Offering Memorandum (or any
amendment or supplement thereto), or the omission or alleged omission therefrom
of a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; or (ii)
any act or failure to act or any alleged act or failure to act by any Initial
Purchaser in connection with, or relating in any manner to, the offering
contemplated hereby, and which is included as part of or referred to in any
loss, claim, damage, liability or action arising out of or based upon any matter
covered by clause (i) above, provided that the Company and the Guarantors shall
not be liable under this clause (ii) to the extent that a court of competent
jurisdiction shall have determined by a final judgment that such loss, claim,
damage, liability or action resulted directly from any such acts or failures to
act undertaken or omitted to be taken by such Initial Purchaser through its
gross negligence or willful misconduct; and to reimburse each Initial Purchaser
and each such director, officer, employee or controlling person for any and all
expenses (including the reasonable fees and disbursements of counsel chosen by
Banc of America Securities LLC) as such expenses are reasonably incurred by such
Initial Purchaser or such director, officer, employee or controlling person in
connection with investigating, defending, settling, compromising or paying any
such loss, claim, damage, liability, expense or action; provided, however, that
the foregoing indemnity agreement shall not apply to any loss, claim, damage,
liability or expense to the extent, but only to the extent, arising out of or
based upon any untrue statement or alleged untrue statement or omission or
alleged omission made in reliance upon and in conformity with written
information furnished to the Company by the Initial Purchasers expressly for use
in the Pricing Disclosure Package or the Final Offering Memorandum (or any
amendment or supplement thereto). The indemnity agreement set forth in this
Section 8(a) shall be in addition to any liabilities that the Company and the
Guarantors may otherwise have.

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(b)    Indemnification of the Company and the Guarantors. Each Initial Purchaser
agrees, severally and not jointly, to indemnify and hold harmless the Company,
each Guarantor, each of their respective directors, officers and employees and
each person, if any, who controls the Company or any Guarantor within the
meaning of the Securities Act or the Exchange Act, against any loss, claim,
damage, liability or expense, as incurred, to which the Company, any Guarantor
or any such director, officer or employee or controlling person may become
subject, under the Securities Act, the Exchange Act, or other federal or state
statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of such Initial Purchaser), insofar as such loss, claim, damage,
liability or expense (or actions in respect thereof as contemplated below)
arises out of or is based upon any untrue statement or alleged untrue statement
of a material fact contained in the Pricing Disclosure Package or the Final
Offering Memorandum (or any amendment or supplement thereto), or the omission or
alleged omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in the Pricing Disclosure Package or the Final Offering
Memorandum (or any amendment or supplement thereto), in reliance upon and in
conformity with written information furnished to the Company by the Initial
Purchasers expressly for use therein; and to reimburse the Company, any
Guarantor and each such director, officer, employee or controlling person for
any and all expenses (including the reasonable fees and disbursements of
counsel) as such expenses are reasonably incurred by the Company, any Guarantor
or such director, officer or employee or controlling person in connection with
investigating, defending, settling, compromising or paying any such loss, claim,
damage, liability, expense or action. Each of the Company and the Guarantors
hereby acknowledges that the only information that the Initial Purchasers have
furnished to the Company expressly for use in the Pricing Disclosure Package or
the Final Offering Memorandum (or any amendment or supplement thereto) are the
statements in the fourth sentence of the sixth paragraph, the eighth paragraph
and the tenth paragraph under the caption “Plan of Distribution” in the
Preliminary Offering Memorandum and the Final Offering Memorandum. The indemnity
agreement set forth in this Section 8 (b) shall be in addition to any
liabilities that each Initial Purchaser may otherwise have.

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(c)    Notifications and Other Indemnification Procedures. Promptly after
receipt by an indemnified party under this Section 8 of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party under this Section 8, notify
the indemnifying party in writing of the commencement thereof, but the omission
so to notify the indemnifying party will not relieve it from any liability which
it may have to any indemnified party for contribution or otherwise under the
indemnity agreement contained in this Section 8 other than to the extent it is
prejudiced as a proximate result of such failure. In case any such action is
brought against any indemnified party and such indemnified party seeks or
intends to seek indemnity from an indemnifying party, the indemnifying party
will be entitled to participate in and, to the extent that it shall elect,
jointly with all other indemnifying parties similarly notified, by written
notice delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof with counsel
reasonably satisfactory to such indemnified party; provided, however, if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that a conflict may arise between the positions of the indemnifying party and
the indemnified party in conducting the defense of any such action or that there
may be legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate counsel to
assume such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of such indemnifying
party’s election so to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will not be liable to such
indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the immediately preceding sentence (it being
understood, however, that the indemnifying party shall not be liable for the
expenses of more than one separate counsel (together with local counsel),
approved by the indemnifying party (Banc of America Securities LLC in the case
of Sections 8(b) and 9 hereof), representing the indemnified parties who are
parties to such action) or (ii) the indemnifying party shall not have employed
counsel satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after notice of commencement of the action, in each of
which cases the fees and expenses of counsel shall be at the expense of the
indemnifying party.

(d)    Settlements. The indemnifying party under this Section 8 shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
against any loss, claim, damage, liability or expense by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by this
Section 8, the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 60 days after receipt by such indemnifying
party of the aforesaid request and (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to the
date of such settlement. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement, compromise or consent
to the entry of judgment in any pending or threatened action, suit or proceeding
in respect of which any indemnified party is or could have been a party and
indemnity was or could have been sought hereunder by such indemnified party,
unless such settlement, compromise or consent (i) includes an unconditional
release of such indemnified party from all liability on claims that are the
subject matter of such action, suit or proceeding and (ii) does not include any
statements as to or any findings of fault, culpability or failure to act by or
on behalf of any indemnified party.

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SECTION 9.  Contribution. If the indemnification provided for in Section 8
hereof is for any reason held to be unavailable to or otherwise insufficient to
hold harmless an indemnified party in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount paid or payable by such indemnified party, as
incurred, as a result of any losses, claims, damages, liabilities or expenses
referred to therein (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Guarantors, on the one hand,
and the Initial Purchasers, on the other hand, from the offering of the
Securities pursuant to this Agreement or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company and the Guarantors, on the one
hand, and the Initial Purchasers, on the other hand, in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Guarantors, on the one
hand, and the Initial Purchasers, on the other hand, in connection with the
offering of the Securities pursuant to this Agreement shall be deemed to be in
the same respective proportions as the total net proceeds from the offering of
the Securities pursuant to this Agreement (before deducting expenses) received
by the Company and the total discount received by the Initial Purchasers bear to
the aggregate initial offering price of the Securities. The relative fault of
the Company and the Guarantors, on the one hand, and the Initial Purchasers, on
the other hand, shall be determined by reference to, among other things, whether
any such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Company and the Guarantors, on the one hand, or the Initial Purchasers, on the
other hand, and the parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.

The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in Section 8 hereof, any legal or other
fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim. The provisions set forth in
Section 8 hereof with respect to notice of commencement of any action shall
apply if a claim for contribution is to be made under this Section 9; provided,
however, that no additional notice shall be required with respect to any action
for which notice has been given under Section 8 hereof for purposes of
indemnification.

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The Company, the Guarantors and the Initial Purchasers agree that it would not
be just and equitable if contribution pursuant to this Section 9 were determined
by pro rata allocation (even if the Initial Purchasers were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in this Section 9.

Notwithstanding the provisions of this Section 9, no Initial Purchaser shall be
required to contribute any amount in excess of the discount received by such
Initial Purchaser in connection with the Securities distributed by it. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11 of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Initial Purchasers’ obligations
to contribute pursuant to this Section 9 are several, and not joint, in
proportion to their respective commitments as set forth opposite their names in
Schedule A. For purposes of this Section 9, each director, officer and employee
of an Initial Purchaser and each person, if any, who controls an Initial
Purchaser within the meaning of the Securities Act and the Exchange Act shall
have the same rights to contribution as such Initial Purchaser, and each
director, officer or employee of the Company or any Guarantor, and each person,
if any, who controls the Company or any Guarantor within the meaning of the
Securities Act and the Exchange Act shall have the same rights to contribution
as the Company and the Guarantors.

SECTION 10.  Termination of this Agreement. Prior to the Closing Date, this
Agreement may be terminated by the Initial Purchasers by notice given to the
Company if at any time after the date of this Agreement: (i) trading or
quotation in any of the Company’s securities shall have been suspended or
limited by the Commission or by NASDAQ, or trading in securities generally on
either NASDAQ or the NYSE shall have been suspended or limited, or minimum or
maximum prices shall have been generally established on any of such quotation
system or stock exchange by the Commission or the NASD; (ii) a general banking
moratorium shall have been declared by any of federal, New York or Delaware
authorities; (iii) there shall have occurred any outbreak or escalation of
national or international hostilities or any crisis or calamity, or any change
in the United States or international financial markets, or any substantial
change or development involving a prospective substantial change in United
States’ or international political, financial or economic conditions, as in the
judgment of the Initial Purchasers is material and adverse and makes it
impracticable to proceed with the offering sale or delivery of the Securities in
the manner and on the terms described in the Pricing Disclosure Package or to
enforce contracts for the sale of securities; (iv) in the judgment of the
Initial Purchasers there shall have occurred any Material Adverse Change; or (v)
the Company and its subsidiaries shall have sustained a loss by strike, fire,
flood, earthquake, accident or other calamity of such character as in the
judgment of the Initial Purchasers may interfere materially with the conduct of
the business and operations of the Company and its subsidiaries regardless of
whether or not such loss shall have been insured. Any termination pursuant to
this Section 10 shall be without liability on the part of (i) the Company or any
Guarantor to any Initial Purchaser, except that the Company and the Guarantors
shall be obligated to reimburse the expenses of the Initial Purchasers pursuant
to Sections 4 and 6 hereof, (ii) any Initial Purchaser to the Company, or (iii)
any party hereto to any other party, except that the provisions of Sections 8
and 9 hereof shall at all times be effective and shall survive such termination.

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SECTION 11.  Representations and Indemnities to Survive Delivery. The respective
indemnities, agreements, representations, warranties and other statements of the
Company and the Guarantors and of each of their respective officers and of the
several Initial Purchasers set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation made by or on
behalf of any Initial Purchaser or the Company or any of the Guarantors or any
of its or their partners, officers, directors, employees or any controlling
person, as the case may be, and will survive delivery of and payment for the
Securities sold hereunder and any termination of this Agreement.

SECTION 12.  Notices. All communications hereunder shall be in writing and shall
be mailed, hand delivered, couriered or facsimiled and confirmed to the parties
hereto as follows:

If to the Initial Purchasers:

Banc of America Securities LLC
9 West 57th Street
New York, NY 10019
Facsimile: (212) 415-9634
Attention: Lex Maultsby

with a copy to:

Fried, Frank, Harris, Shriver & Jacobson LLP
One New York Plaza
New York, NY 10004
Facsimile: (212) 859-4000
Attention: Valerie Ford Jacob, Esq.
 
If to the Company or the Guarantors:

6300 Bridge Point Parkway
Building 2, Suite 500
Austin, TX 78730
Phone: (512) 427-3300
Facsimile: (512) 427-3400
Attention: Eugene B. Shepherd, Jr.
Chief Financial Officer

with a copy to:

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Thompson & Knight LLP
1700 Pacific Avenue, Suite 3300
Dallas, Texas 75201
Facsimile: (214) 969-1751
Attention: Joe Dannenmaier

Any party hereto may change the address or facsimile number for receipt of
communications by giving written notice to the others.

SECTION 13.  Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto, including any substitute Initial Purchasers
pursuant to Section 16 hereof, and to the benefit of the indemnified parties
referred to in Sections 8 and 9 hereof, and in each case their respective
successors, and no other person will have any right or obligation hereunder. The
term “successors” shall not include any Subsequent Purchaser of other purchaser
of the Securities as such from any of the Initial Purchasers merely by reason of
such purchase.

SECTION 14.  Partial Unenforceability. The invalidity or unenforceability of any
section, paragraph or provision of this Agreement shall not affect the validity
or enforceability of any other section, paragraph or provision hereof. If any
section, paragraph or provision of this Agreement is for any reason determined
to be invalid or unenforceable, there shall be deemed to be made such minor
changes (and only such minor changes) as are necessary to make it valid and
enforceable.

SECTION 15.  Governing Law Provisions. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE WITHOUT REGARD
TO CONFLICTS OF LAW PRINCIPLES THEREOF.

(a)    Consent to Jurisdiction. Any legal suit, action or proceeding arising out
of or based upon this Agreement or the transactions contemplated hereby
(“Related Proceedings”) may be instituted in the federal courts of the United
States of America located in the City and County of New York or the courts of
the State of New York in each case located in the City and County of New York
(collectively, the “Specified Courts”), and each party irrevocably submits to
the exclusive jurisdiction (except for suits, actions, or proceedings instituted
in regard to the enforcement of a judgment of any Specified Court in a Related
Proceeding, as to which such jurisdiction is non-exclusive) of the Specified
Courts in any Related Proceeding. Service of any process, summons, notice or
document by mail to such party’s address set forth above shall be effective
service of process for any Related Proceeding brought in any Specified Court.
The parties irrevocably and unconditionally waive any objection to the laying of
venue of any Specified Proceeding in the Specified Courts and irrevocably and
unconditionally waive and agree not to plead or claim in any Specified Court
that any Related Proceeding brought in any Specified Court has been brought in
an inconvenient forum.

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SECTION 16.  Default of One or More of the Several Initial Purchasers. If any
one or more of the several Initial Purchasers shall fail or refuse to purchase
Securities that it or they have agreed to purchase hereunder on the Closing
Date, and the aggregate number of Securities which such defaulting Initial
Purchaser or Initial Purchasers agreed but failed or refused to purchase does
not exceed 10% of the aggregate number of the Securities to be purchased on such
date, the other Initial Purchasers shall be obligated, severally, in the
proportions that the number of Securities set forth opposite their respective
names on Schedule A bears to the aggregate number of Securities set forth
opposite the names of all such non-defaulting Initial Purchasers, or in such
other proportions as may be specified by the Initial Purchasers with the consent
of the non-defaulting Initial Purchasers, to purchase the Securities which such
defaulting Initial Purchaser or Initial Purchasers agreed but failed or refused
to purchase on the Closing Date. If any one or more of the Initial Purchasers
shall fail or refuse to purchase Securities and the aggregate number of
Securities with respect to which such default occurs exceeds 10% of the
aggregate number of Securities to be purchased on the Closing Date, and
arrangements satisfactory to the Initial Purchasers and the Company for the
purchase of such Securities are not made within 48 hours after such default,
this Agreement shall terminate without liability of any party to any other party
except that the provisions of Sections 4, 6, 8 and 9 hereof shall at all times
be effective and shall survive such termination. In any such case either the
Initial Purchasers or the Company shall have the right to postpone the Closing
Date, as the case may be, but in no event for longer than seven days in order
that the required changes, if any, to the Final Offering Memorandum or any other
documents or arrangements may be effected.

As used in this Agreement, the term “Initial Purchaser” shall be deemed to
include any person substituted for a defaulting Initial Purchaser under this
Section 16. Any action taken or not taken under this Section 16 shall not
relieve any defaulting Initial Purchaser from liability in respect of any
default of such Initial Purchaser under this Agreement.

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SECTION 17.  No Advisory or Fiduciary Responsibility. Each of the Company and
the Guarantors acknowledges and agrees that: (i) the purchase and sale of the
Securities pursuant to this Agreement, including the determination of the
offering price of the Securities and any related discounts and commissions, is
an arm’s-length commercial transaction between the Company and the Guarantors,
on the one hand, and the several Initial Purchasers, on the other hand, and the
Company and the Guarantors are capable of evaluating and understanding and
understand and, assuming the accuracy of the representations and warranties of
the Initial Purchasers and the fulfillment by them of their obligations, accept
the terms, risks and conditions of the transactions contemplated by this
Agreement; (ii) in connection with each transaction contemplated hereby and the
process leading to such transaction each Initial Purchaser is and has been
acting solely as a principal and is not the agent or fiduciary of the Company,
Guarantors or their respective affiliates, stockholders, creditors or employees
or any other party; (iii) no Initial Purchaser has assumed or will assume an
advisory or fiduciary responsibility in favor of the Company and the Guarantors
with respect to any of the transactions contemplated hereby or the process
leading thereto (irrespective of whether such Initial Purchaser has advised or
is currently advising the Company or the Guarantors on other matters) or any
other obligation to the Company and the Guarantors except the obligations
expressly set forth in this Agreement; (iv) the several Initial Purchasers and
their respective affiliates may be engaged in a broad range of transactions that
involve interests that differ from those of the Company and the Guarantors and
that the several Initial Purchasers have no obligation to disclose any of such
interests by virtue of any fiduciary or advisory relationship; and (v) the
Initial Purchasers have not provided any legal, accounting, regulatory or tax
advice with respect to the offering contemplated hereby and the Company and the
Guarantors have consulted their own legal, accounting, regulatory and tax
advisors to the extent they deemed appropriate.

This Agreement supersedes all prior agreements and understandings (whether
written or oral) between the Company, the Guarantors and the Initial Purchasers,
or any of them, with respect to the subject matter hereof. The Company and the
Guarantors hereby waive and release, to the fullest extent permitted by law, any
claims that the Company and the Guarantors may have against the Initial
Purchasers with respect to any breach or alleged breach of fiduciary duty.

SECTION 18.  General Provisions. This Agreement constitutes the entire agreement
of the parties to this Agreement and supersedes all prior written or oral and
all contemporaneous oral agreements, understandings and negotiations with
respect to the subject matter hereof. This Agreement may be executed in two or
more counterparts, each one of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument. This
Agreement may not be amended or modified unless in writing by all of the parties
hereto, and no condition herein (express or implied) may be waived unless waived
in writing by each party whom the condition is meant to benefit. The section
headings herein are for the convenience of the parties only and shall not affect
the construction or interpretation of this Agreement.

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If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to the Company the enclosed copies hereof, whereupon this
instrument, along with all counterparts hereof, shall become a binding agreement
in accordance with its terms.

 
Very truly yours,
     
BRIGHAM EXPLORATION COMPANY, a Delaware corporation
         
By: 
/s/ Eugene B. Shepherd, Jr.
 
Name: 
Eugene B. Shepherd, Jr.
 
Title:
Chief Financial Officer
                 
BRIGHAM, INC., a Nevada corporation
         
By:
/s/ Eugene B. Shepherd, Jr.
 
Name:
Eugene B. Shepherd, Jr.
 
Title:
Chief Financial Officer
                 
BRIGHAM OIL & GAS, L.P., a Delaware limited partnership
         
By:
BRIGHAM, INC.,
   
Its managing general partner 
         
By:
/s/ Eugene B. Shepherd, Jr.
 
Name:
Eugene B. Shepherd, Jr.
 
Title:
Chief Financial Officer

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The foregoing Purchase Agreement is hereby confirmed and accepted by the Initial
Purchasers as of the date first above written.

BANC OF AMERICA SECURITIES LLC
CREDIT SUISSE SECURITIES (USA) LLC

By:
Banc of America Securities LLC
       
By: 
/s/ Lex Maultsby
   
Name: 
Lex Maultsby
   
Title:
Managing Director
 

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SCHEDULE A

Initial Purchasers
 
Aggregate
Principal Amount
of Securities to be Purchased
 
Banc of America Securities LLC
 
$
17,500,000
 
Credit Suisse Securities (USA) LLC
   
17,500,000
 
Total
 
$
35,000,000
 

Sch A-1

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EXHIBIT A

Form of Opinion of Thompson & Knight LLP, Counsel for the Company, to
beDelivered Pursuant to Section 5(c) of the Purchase Agreement

1.    The Company is a corporation that is validly existing and in good standing
under the laws of Delaware. Brigham, Inc. is a corporation that is validly
existing and in good standing under the laws of Nevada. Brigham Oil & Gas is a
limited partnership that is validly existing and in good standing under the laws
of Delaware.

2.    Each Relevant Party (a) has the corporate or limited partnership power, as
the case may be, to execute, deliver and perform each Transaction Document to
which it is a party and in the case of the Company to conduct its business as
described in the Pricing Disclosure Package and the Final Offering Memorandum,
(b) has taken all corporate or limited partnership action, as the case may be,
necessary to authorize the execution, delivery and performance of such
Transaction Documents, and (c) has duly executed and delivered the Purchase
Agreement, the Registration Rights Agreement, the DTC Agreement, the Indenture,
the Notes and the Guarantees.

3.    Based solely on certificates of public officials, each Relevant Party was
in good standing and authorized to do business in each state specified with
respect to such Relevant Party in Schedule I.C hereto as of the date specified
in such Schedule.

4.    Each of the Registration Rights Agreement, the DTC Agreement and the
Indenture to which a Relevant Party is a party is such Relevant Party’s valid
and binding obligation, enforceable against it in accordance with the terms
thereof. When executed and authenticated as provided in the Indenture, the
Notes, the Exchange Notes, the Guarantees and the Guarantees of the Exchange
Notes to which a Relevant Party is a party will be such Relevant Party’s valid
and binding obligation, enforceable against it in accordance with the terms
thereof

5.    The execution and delivery by each Relevant Party of the Transaction
Documents to which it is a party do not, and the performance by each such
Relevant Party of its obligations thereunder will not, (a) violate the
certificate of incorporation or the certificate of formation or bylaws or
regulations of such Relevant Party, (b) breach or result in a default under, or
require that any consent, approval, license, or authorization be obtained under,
any agreement or instrument listed in Schedule I.D hereto (the “Applicable
Contracts”) or (c) result in a violation by any such Relevant Party of any
Applicable Laws.

6.    No Relevant Party is, or as a result of the transactions contemplated by
the Transaction Documents will be, required to register as an investment company
under the Investment Company Act of 1940, as amended.

A-1

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7.    No authorization, approval or other action by, and no notice to or filing
with, any United States federal or New York governmental authority or regulatory
body, or any third party that is a party to any Applicable Contract, is required
for the due execution, delivery or performance by any Relevant Party of any
Transaction Document to which it is a party, except as may be required under the
Securities Act and the Trust Indenture Act of 1939, as amended, in connection
with the registration statement described in the Final Offering Memorandum and
contemplated by the Registration Rights Agreement and as may be required under
the securities or blue sky laws of any jurisdiction in the United States in
connection with the offer and sale of the Securities.

8.    Based upon the representations, warranties and agreements of the Company
and the Initial Purchasers in the Purchase Agreement and assuming compliance
with the offering and transfer procedures and restrictions described in the
Final Offering Memorandum, it is not necessary in connection with the offer and
sale of the Securities to you under the Purchase Agreement or in connection with
the initial resale of such Securities by you in the manner contemplated by the
Purchase Agreement to register the Securities under the Securities Act of 1933,
as amended, other than any registration that may be required in connection with
the Exchange Offer contemplated by the Final Offering Memorandum and the
Registration Rights Agreement, it being understood that no opinion is expressed
as to any subsequent resale of any Securities.

9.    The statements in the Pricing Disclosure Package and the Final Offering
Memorandum under the captions “Plan of Distribution” and “Description of the
Exchange Notes” and, in each case, insofar as such statements constitute
summaries of legal matters or documents referred to therein, fairly summarize in
all material respects the legal matters or documents referred to therein. The
statements in the Pricing Disclosure Package and the Final Offering Memorandum
under the caption “United States Federal Income Tax Considerations,” insofar as
such statements constitute summaries of legal matters referred to therein,
fairly summarize in all material respects the legal matters referred to therein.

10.    The documents incorporated by reference in the Pricing Disclosure Package
and the Final Offering Memorandum (other than the financial statements and
financial schedules therein, as to which no opinion need be rendered), when they
were filed with the Commission, complied as to form in all material respects
with the requirements of the Exchange Act.

A-2

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In the course of our acting as counsel to the Company in connection with the
preparation of the Pricing Disclosure Package and the Final Offering Memorandum,
we participated in conferences with officers and other representatives of the
Relevant Parties, representatives of the Initial Purchasers and the Initial
Purchasers’ counsel, and representatives of the independent public accountants
for the Relevant Parties, at which the contents of the Pricing Disclosure
Package and the Final Offering Memorandum and related matters were discussed
and, although we are not passing upon, and do not assume any responsibility for,
the accuracy, completeness or fairness of the statements contained in the
Pricing Disclosure Package and the Final Offering Memorandum and have not made
any independent checks or verification thereof, during the course of such
participation, nothing has come to our attention that leads us to believe that
the Pricing Disclosure Package, as of the Time of Execution, or that the Final
Offering Memorandum, as of the date thereof and as of the date hereof, contained
or contains any untrue statement of any material fact or omitted or omits to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading; except that we express no opinion and provide
no negative assurance as to the financial statements and related notes and
schedules and other financial, oil and gas reserves or prospects or production
data and statistical data derived from such financial statements, notes and
schedules and other financial, oil and gas reserves or prospects or production
data.

A-3

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EXHIBIT B

Subsidiaries of Brigham Exploration Company

BRIGHAM, INC.

BRIGHAM OIL & GAS, L.P.

BRIGHAM HOLDINGS I, LLC

BRIGHAM HOLDINGS II, LLC

B-1

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ANNEX I
 
Resale Pursuant to Regulation S or Rule 144A. Each Initial Purchaser understands
that:

Such Initial Purchaser agrees that it has not offered or sold and will not offer
or sell the Securities in the United States or to, or for the benefit or account
of, a U.S. Person (other than a distributor), in each case, as defined in Rule
902 of Regulation S (i) as part of its distribution at any time and (ii)
otherwise until 40 days after the later of the commencement of the offering of
the Securities pursuant hereto and the Closing Date, other than in accordance
with Regulation S or another exemption from the registration requirements of the
Securities Act. Such Initial Purchaser agrees that, during such 40-day
restricted period, it will not cause any advertisement with respect to the
Securities (including any “tombstone” advertisement) to be published in any
newspaper or periodical or posted in any public place and will not issue any
circular relating to the Securities, except such advertisements as are permitted
by and include the statements required by Regulation S.

Such Initial Purchaser agrees that, at or prior to confirmation of a sale of
Securities by it to any distributor, dealer or person receiving a selling
concession, fee or other remuneration during the 40-day restricted period
referred to in Rule 903 of Regulation S, it will send to such distributor,
dealer or person receiving a selling concession, fee or other remuneration a
confirmation or notice to substantially the following effect:

“The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933, as amended (the “Securities Act”), and may not be
offered and sold within the United States or to, or for the account or benefit
of, U.S. persons (i) as part of your distribution at any time or (ii) otherwise
until 40 days after the later of the date the Securities were first offered to
persons other than distributors in reliance upon Regulation S and the Closing
Date, except in either case in accordance with Regulation S under the Securities
Act (or in accordance with Rule 144A under the Securities Act in transactions
that are exempt from the registration requirements of the Securities Act), and
in connection with any subsequent sale by you of the Securities covered hereby
in reliance on Regulation S under the Securities Act during the period referred
to above to any distributor, dealer or person receiving a selling concession,
fee or other remuneration, you must deliver a notice to substantially the
foregoing effect. Terms used above have the meanings assigned to them in
Regulation S under the Securities Act.”
 
 
I-1

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