Exhibit 10.1

EXECUTION COPY

$450,000,000

W&T OFFSHORE, INC.

8.25% SENIOR NOTES DUE 2014

PURCHASE AGREEMENT

June 8, 2007

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June 8, 2007

Morgan Stanley & Co. Incorporated

As Representative of the several

    Initial Purchasers named in Schedule I attached hereto

c/o Morgan Stanley & Co. Incorporated

1585 Broadway

New York, New York 10036

Ladies and Gentlemen:

W&T Offshore, Inc., a Texas corporation (the “Company”), proposes to issue and
sell to the several purchasers named in Schedule I hereto (the “Initial
Purchasers”), for whom you are acting as representative (the “Representative”),
$450,000,000 principal amount of its 8.25% Senior Notes due 2014 (the
“Securities”) to be issued pursuant to the provisions of an Indenture, dated as
of June 13, 2007 (the “Indenture”) among the Company, the “Guarantors” (as
defined below) and Wells Fargo Bank, N.A., as Trustee (the “Trustee”). The
Securities will be initially and severally guaranteed (the “Guarantees”) by each
entity set forth in Schedule IV hereto (referred to herein as the “Guarantors”).
The Securities and the Guarantees are referred to collectively herein as the
“Offered Securities.” The Offered Securities will be offered without being
registered under the Securities Act of 1933, as amended (the “Securities Act”),
to qualified institutional buyers in compliance with the exemption from
registration provided by Rule 144A under the Securities Act and in offshore
transactions in reliance on Regulation S under the Securities Act
(“Regulation S”).

In connection with the sale of the Offered Securities, the Company has prepared
a preliminary offering memorandum (the “Preliminary Memorandum”) and will
prepare a final offering memorandum (the “Final Memorandum”) including a
description of the terms of the Offered Securities, the terms of the offering
and a description of the Company. For purposes of this Agreement, “Additional
Written Offering Communication” means any written communication (as defined in
Rule 405 under the Securities Act) that constitutes an offer to sell or a
solicitation of an offer to buy the Offered Securities other than the
Preliminary Memorandum or the Final Memorandum, and “Time of Sale Memorandum”
means the Preliminary Memorandum together with the Additional Written Offering
Communications, if any, each identified in Schedule II hereto. As used herein,
the terms Preliminary Memorandum, Time of Sale Memorandum and Final Memorandum
shall include the documents, if any, incorporated by reference therein.

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1. Representations and Warranties. Each of the Company and the Guarantors,
jointly and severally, represents and warrants to, and agrees with, you that:

(a) (i) the Time of Sale Memorandum does not, and at the time of the sale of the
Offered Securities in connection with the offering when the Final Memorandum is
not yet available to prospective purchasers and at the Closing Date (as defined
in Section 4), the Time of Sale Memorandum, as then amended or supplemented by
the Company, if applicable, will not, contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
and (ii) the Preliminary Memorandum does not contain and the Final Memorandum,
in the form used by the Initial Purchasers to confirm sales and on the Closing
Date (as defined in Section 4), will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except that the representations and warranties set forth in this
paragraph do not apply to statements or omissions in the Preliminary Memorandum,
the Time of Sale Memorandum or the Final Memorandum based upon information
relating to any Initial Purchaser furnished to the Company in writing by such
Initial Purchaser through you expressly for use therein.

(b) Except for the Additional Written Offering Communications, if any,
identified in Schedule II hereto, and electronic road shows, if any, furnished
to you before first use, the Company has not prepared, used or referred to, and
will not, without your prior consent, prepare, use or refer to, any Additional
Written Offering Communication.

(c) The Company has been duly incorporated, is validly existing as a corporation
in good standing under the laws of the jurisdiction of its incorporation, has
the corporate power and authority to own its property and to conduct its
business as described in the Time of Sale Memorandum and is duly qualified to
transact business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not, individually or in the aggregate have a material
adverse effect on the general affairs, management, consolidated financial
position, stockholders’ equity, results of operations, business or prospects of
the Company and its subsidiaries, taken as a whole (a “Material Adverse
Effect”).

 

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(d) Each Guarantor has been duly formed, is validly existing as a corporation or
limited liability company in good standing under the laws of jurisdiction of its
incorporation or formation, has the corporate or limited liability company power
and authority necessary to own or hold its property and to conduct its business
as described in the Time of Sale Memorandum and is duly qualified to transact
business and is in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a Material Adverse Effect; all of the membership
interests of each Guarantor have been duly and validly authorized and issued,
are fully paid and non-assessable and are owned directly by the Company, free
and clear of all liens, encumbrances, equities or claims except for liens and
encumbrances permitted under the Company’s “Credit Facilities” (as defined
below); and other than the subsidiaries listed on Exhibit 21 to the Annual
Report on Form 10–K for the year ended December 31, 2006 (the “Form 10-K”), none
of the Company’s subsidiaries is a “significant subsidiary,” as such term is
defined in Rule 405 under the Securities Act.

(e) The Company and the Guarantors have all requisite power and authority to
execute and deliver this Agreement and to otherwise perform their respective
obligations under this Agreement and this Agreement has been duly authorized,
executed and delivered by the Company and each of the Guarantors.

(f) (i) The shares of common stock of the Company that are outstanding, prior to
the issuance of the Offered Securities, have been duly authorized and are
validly issued, fully paid and non-assessable, (ii) with respect to the
Guarantors, the membership interests of each subsidiary of the Company that are
outstanding prior to the issuance of the Offered Securities have been duly
authorized, and are validly issued, fully paid and non-assessable, and
(iii) except as set forth in the Time of Sale Memorandum and the Final
Memorandum, such membership interests are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or claims except
for liens and encumbrances permitted under the Company’s Credit Facilities. The
Company does not own, directly or indirectly, any capital stock, membership
interest, partnership interest, joint venture interest or other equity or
ownership interest in any person or entity, other than the subsidiaries listed
on Exhibit 21 to the Company’s Form 10-K. As used in this Agreement, “Credit
Facilities” means the Third Amended and Restated Credit Agreement made as of
May 26, 2006, as amended, by and among the Company and the various financial
institutions and other persons from

 

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time to time parties hereto, as lenders, each Issuer referred to therein, as
issuers of Letters of Credit, Toronto Dominion (Texas) LLC, individually and as
agent for the Lenders, Lehman Commercial Paper Inc., as syndication agent,
Harris Nesbitt Financing, Inc., Fortis Capital Corp. and Bank of Scotland, as
Co–Documentation Agents, Natexis Banques Populaires, as Co–Agent, and TD
Securities (USA) LLC and Lehman Brothers Inc., as Co–Lead Arrangers and
Co–Bookrunners.

(g) The table under the caption “Capitalization” in the Time of Sale Memorandum
and in the Final Memorandum (including the footnote thereto) sets forth or will
set forth, as of the date of such table, (i) the actual cash and cash
equivalents and capitalization of (x) the Company and its subsidiaries on a
consolidated basis and (ii) the pro forma cash and cash equivalents and
capitalization of the Company and its subsidiaries on a consolidated basis,
after giving effect to the offer and sale of the Offered Securities and the
application of the net proceeds therefrom as described in the Time of Sale
Memorandum and in the Final Offering Memorandum under the section entitled “Use
of Proceeds.”

(h) No labor disturbance by the employees of the Company or the Guarantors
exists or, to the knowledge of the Company or the Guarantors, is imminent or
threatened, which might be expected to have a Material Adverse Effect.

(i) No “nationally recognized statistical rating organization” (as such term is
defined for purposes of Rule 436(g)(2) under the Act) (i) has imposed (or has
informed the Company that it is considering imposing) any condition (financial
or otherwise) on the Company relating to any rating assigned to the Company or
the Guarantors or to any securities of the Company or the Guarantors, or
(ii) has indicated to the Company that it is considering (A) the downgrading,
suspension, or withdrawal of, or any review for a possible change that does not
indicate the direction of the possible change in, any rating so assigned, or
(B) any change in the outlook for any rating of the Company or the Guarantors or
any securities of the Company or the Guarantors.

(j) The Company intends to use the proceeds of the offering and sale of the
Offered Securities in the manner described in the Time of Sale Memorandum and
the Final Offering Memorandum under the caption “Use of Proceeds.”

(k) Except as disclosed in the Time of Sale Memorandum or the Final Offering
Memorandum and as it relates to the Initial Purchasers, neither the Company nor
any affiliate (as defined in Rule 501(b) under the

 

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Securities Act) has and, to its knowledge after due inquiry, no one acting on
its behalf has, (i) taken, directly or indirectly, any action designed to cause
or to result in, or that has constituted or which might reasonably be expected
to constitute, the stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of any of the Offered Securities,
(ii) sold, bid for, purchased, or paid anyone any compensation for soliciting
purchases of, any of the Offered Securities, or (iii) except as disclosed in the
Time of Sale Memorandum or the Final Offering Memorandum, paid or agreed to pay
to any person any compensation for soliciting another to purchase any other
securities of the Company.

(l) The Securities have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and delivered
to and paid for by the Initial Purchasers in accordance with the terms of this
Agreement, will be valid and binding obligations of the Company, enforceable in
accordance with their terms, except that the enforcement thereof may be subject
to (i) bankruptcy, insolvency, reorganization, receivership, moratorium,
fraudulent conveyance or other similar laws now or hereafter in effect relating
to creditors’ rights generally and (ii) general principles of equity (whether
applied by a court of law or equity) and the discretion of the court before
which any proceeding therefor may be brought.

(m) The Guarantees, as evidenced by the notations of Guarantees in the
Indenture, have been duly and validly authorized by the Guarantors and, upon
their execution by the Guarantors, such notations will be duly executed, issued
and delivered by each of the Guarantors. When the Securities have been issued,
executed and authenticated in accordance with the terms of the Indenture and
delivered to and paid for by the Initial Purchasers in accordance with the terms
of this Agreement, the Guarantee of each Guarantor will be duly issued and the
legal, valid and binding obligation of such Guarantor, entitled to the benefit
of the Indenture, and enforceable against such Guarantor in accordance with its
terms, except that the enforcement thereof may be subject to (i) bankruptcy,
insolvency, reorganization, receivership, moratorium, fraudulent conveyance or
other similar laws now or hereafter in effect relating to creditors’ rights
generally and (ii) general principles of equity (whether applied by a court of
law or equity) and the discretion of the court before which any proceeding
therefor may be brought.

(n) The Indenture has been duly authorized, executed and delivered by, and is a
valid and binding agreement of, the Company and

 

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the Guarantors, enforceable in accordance with its terms, except that the
enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, receivership, moratorium, fraudulent conveyance or other similar
laws now or hereafter in effect relating to creditors’ rights generally and
(ii) general principles of equity (whether applied by a court of law or equity)
and the discretion of the court before which any proceeding therefor may be
brought.

(o) No transaction has occurred between or among the Company, any of its
subsidiaries and their affiliates, officers or directors or any affiliate or
affiliates of any such officer or director that is required to have been
described under applicable securities laws in the Company’s filings under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”) and is not so
described.

(p) The execution and delivery by the Company and the Guarantors of, and the
performance by the Company and the Guarantors of their respective obligations
under, this Agreement, the Indenture, and the Offered Securities will not
contravene any provision of applicable law or the certificate of incorporation,
or the by-laws or other governing documents of the Company or any of its
subsidiaries, or any indenture, mortgage, deed of trust, loan agreement or other
agreement or other instrument binding upon the Company or any of its
subsidiaries or to which any of the property or assets of the Company or any of
its subsidiaries is subject that is material to the Company and its
subsidiaries, taken as a whole, or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Company or any
subsidiary or any of their property or assets, nor will such action result in
the creation or imposition of any material lien, charge, claim or encumbrance
upon any property or asset of the Company or any subsidiaries, and (subject to
the accuracy of the representations and warranties in Section 7 hereof) no
consent, approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by the Company and
the Guarantors of their obligations under this Agreement, the Indenture or the
Offered Securities, except such as may be required by the securities or Blue Sky
laws of the various states in connection with the offer and sale of the Offered
Securities, the consummation of the transactions contemplated hereby, and the
application of the proceeds from the sale of the Offered Securities as described
under “Use of Proceeds” in each of the Time of Sale Memorandum and the Final
Offering Memorandum.

 

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(q) The statements set forth in the Time of Sale Memorandum and the Final
Offering Memorandum under the captions “Description of Notes,” and “Certain
United States Federal Tax Considerations,” as the case may be, insofar as they
constitute summaries of the legal matters, documents or proceedings referred to
therein, fairly present, in all material respects, the information presented
with respect to such legal matters, documents or proceedings.

(r) Offered Securities are eligible for resale pursuant to Rule 144A under the
Act and no other securities of the Company are of the same class (within the
meaning of Rule 144A under the Act) as the Offered Securities and listed on a
national securities exchange registered under Section 6 of the Exchange Act, or
quoted in a U.S. automated inter-dealer quotation system. No securities of the
Company of the same class as the Offered Securities have been offered, issued or
sold by the Company or any of its Affiliates, including any sales pursuant to
Rule 144A or Regulation D or S of the Securities Act, within the six-month
period immediately prior to the date hereof.

(s) Neither the Company nor any of its subsidiaries has sustained, since the
date of the latest audited financial statements included in the Time of Sale
Memorandum, any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, nor
from any labor dispute or court or governmental action, order or decree; and,
otherwise than as set forth or contemplated in the Time of Sale Memorandum,
since such date, there has not been any material change in the capital stock or
long–term debt of the Company or any of its subsidiaries or any material adverse
change, or any development involving a prospective material adverse change, in
or affecting the general affairs, management, consolidated financial position,
stockholders’ equity, results of operations, business or prospects of the
Company and its subsidiaries.

(t) The historical financial statements (including the related notes and
supporting schedules) included in the Time of Sale Memorandum comply in all
material respects with the applicable requirements under the Securities Act,
other than the with respect to the Kerr-McGee historical financial statements
for the six-month periods ending June 30, 2006 and 2005, and such financial
statements present fairly in all material respects the financial condition,
results of operations and cash flows of the entities purported to be shown
thereby, at the dates and for the periods indicated, and have been prepared in
conformity with generally accepted accounting principles applied on a consistent
basis

 

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throughout the periods indicated. The financial information contained in the
Time of Sale Memorandum under the caption “Summary Historical and Pro Forma
Financial Information” and “Selected Historical Financial Information” (i) with
respect to the Company is derived from the accounting records of the Company and
its subsidiaries and fairly presents the information purported to be shown
thereby, and (ii) with respect to the properties (referred to herein as the
“Kerr–McGee properties”) acquired from Kerr–McGee Corporation (“Kerr–McGee”) is
derived from the accounting records of Kerr–McGee and, to the knowledge of the
Company, such financial information fairly presents the information purported to
be shown thereby. The pro forma financial information and the financial and
operating data contained in the Time of Sale Memorandum has been prepared on a
basis consistent with the historical financial statements contained in the Time
of Sale Memorandum (except for the pro forma adjustments specified therein),
includes all material adjustments to the historical financial information
required by Rule 11–02 of Regulation S–X under the Securities Act and the
Exchange Act to reflect the transactions described in the Time of Sale
Memorandum, gives effect to assumptions made on a reasonable basis and fairly
presents the transactions described in the Time of Sale Memorandum. The other
historical financial and statistical information and data included in the Time
of Sale Memorandum are, in all material respects, fairly presented.

(u) The pro forma financial information and the related notes of the Company set
forth in the Time of Sale Memorandum and the Final Offering Memorandum include
assumptions that were made in good faith and provide a reasonable basis for
presenting the significant effects directly attributable to the transactions and
events described therein. The related pro forma adjustments give appropriate
effect to those assumptions and the pro forma adjustments reflect the proper
application of those adjustments and the pro forma adjustments reflect the
proper application of those adjustments to the historical financial statement
amounts in the pro forma financial data included in the Time of Sale Memorandum
and the Final Offering Memorandum. The pro forma financial data set forth under
“Summary Historical and Pro Forma Financial Information” and “Unaudited Pro
Forma Condensed Consolidated Financial Information” in the Time of Sale
Memorandum and the Final Offering Memorandum comply as to form in all material
respects with the applicable accounting requirements of Regulation S-X under the
Act and the pro forma adjustments have been properly applied to the historical
amounts in the compilation of those statements.

 

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(v) Other than proceedings accurately described in all material respects in the
Time of Sale Memorandum, there are no legal or governmental proceedings pending
or threatened to which the Company or any of its subsidiaries is a party or to
which any of the properties of the Company or any of its subsidiaries is subject
that would have a Material Adverse Effect, or a material adverse effect on the
power or ability of the Company and the Guarantors to perform their obligations
under this Agreement, the Indenture or the Offered Securities or to consummate
the transactions contemplated by the Time of Sale Memorandum.

(w) There are no contracts or other documents which are required to be described
in the Company’s filings under the Exchange Act or filed as exhibits to the Form
10–K or the Company’s Quarterly Report on Form 10–Q for the quarter ended
March 31, 2007 by the Exchange Act or by the rules and regulations thereunder
which have not been described or filed as required.

(x) The Company and its subsidiaries (i) are in compliance with any and all
applicable foreign, federal, state and local laws and regulations relating to
the protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants (“Environmental Laws”),
(ii) have received all permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct their respective businesses and
(iii) are in compliance with all terms and conditions of any such permit,
license or approval, except where such noncompliance with Environmental Laws,
failure to receive required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses or approvals
would not, singly or in the aggregate, have a Material Adverse Effect, whether
or not arising from transactions in the ordinary course of business. Neither the
Company nor its subsidiaries have been named as a “potentially responsible
party” under the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended.

(y) There has been no storage, disposal, generation, manufacture, refinement,
transportation, handling or treatment of toxic wastes, medical wastes, hazardous
wastes or hazardous substances by the Company or any of its subsidiaries (or, to
the knowledge of the Company, any of their predecessors in interest) at, upon or
from any of the property now or previously owned or leased by the Company or its
subsidiaries in violation of any applicable law, ordinance, rule, regulation,
order, judgment, decree or permit or which would require remedial action under
any applicable law, ordinance, rule, regulation, order, judgment, decree or

 

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permit, except for any violation or remedial action which would not have, or
could not be reasonably likely to have, individually or in the aggregate with
all such violations and remedial actions, a Material Adverse Effect; there has
been no material spill, discharge, leak, emission, injection, escape, dumping or
release of any kind onto such property or into the environment surrounding such
property of any toxic wastes, medical wastes, solid wastes, hazardous wastes or
hazardous substances due to or caused by the Company or any of its subsidiaries
or with respect to which the Company or any of its subsidiaries have knowledge,
except for any such spill, discharge, leak, emission, injection, escape, dumping
or release which would not have or would not be reasonably likely to have,
individually or in the aggregate with all such spills, discharges, leaks,
emissions, injections, escapes, dumpings and releases, a Material Adverse
Effect; and the terms “hazardous wastes”, “toxic wastes”, “hazardous substances”
and “medical wastes” shall have the meanings specified in any applicable local,
state, federal and foreign laws or regulations with respect to environmental
protection.

(z) Ernst & Young LLP, who have (i) certified certain financial statements of
the Company, whose report appears in the Time of Sale Memorandum and the Final
Memorandum and who have delivered the initial letters referred to in
Section 5(e) hereof, are independent public accountants with respect to the
Company as required by the Securities Act and the rules and regulations
thereunder.

(aa) The Company and each of its subsidiaries have (i) generally satisfactory
title to all their respective interests in their natural gas and oil properties
owned or leased by them, title investigations having been carried out by the
Company and its subsidiaries in accordance with the practice in the oil and gas
industries in the areas in which the Company and its subsidiaries operate,
(ii) good and marketable title in fee simple to all real property owned by them
to the extent necessary to carry on their business and (iii) good and marketable
title to all personal property owned by them to the extent necessary to carry on
their business, in each case free and clear of all liens, encumbrances and
defects, except as may be a “Permitted Lien” as defined under the caption
“Description of Notes” in the Time of Sale Memorandum (other than under clauses
(3), (4) and (5) of such definition) or such as are described in the Time of
Sale Memorandum or such as do not materially affect the value of such property
and do not materially interfere with the use made and proposed to be made of
such property in the aggregate by the Company and its subsidiaries; and, to the
extent material to the business and operations of the Company and its
subsidiaries, taken as a whole, all assets held under

 

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lease by the Company and its subsidiaries are held by them under valid,
subsisting and enforceable leases, with such exceptions that do not interfere
with the use made of such properties and proposed to be made of such property
and buildings by the Company or any of its subsidiaries.

(bb) The Company and its subsidiaries carry, or are covered by, insurance by
reputable and solvent insurers in such amounts and covering such risks as is
adequate for the conduct of the business operated by them and the value of their
properties and as is customary for companies engaged in the oil and gas
exploration and production industry. In the Company’s reasonable judgment, such
insurance insures against such losses and risks as are adequate to protect the
Company and the subsidiaries and their business. Neither the Company nor any
subsidiary has received notice from any insurer or agent of such insurer that
substantial capital improvements or other expenditures will have to be made in
order to continue such insurance; and all such insurance is outstanding and duly
in force on the date hereof and will be outstanding and duly in force on the
Closing Date.

(cc) The Company and its subsidiaries own or possess adequate rights to use all
material patents, patent applications, trademarks, service marks, trade names,
trademark registrations, service mark registrations, copyrights and licenses
necessary for the conduct of their business and have no reason to believe that
the conduct of their respective businesses will conflict with, and have not
received any notice of any claim of conflict with, any such rights of others,
where if determined adversely to the Company or its subsidiaries would have a
Material Adverse Effect.

(dd) The Company is in compliance in all material respects with all presently
applicable provisions of the Employee Retirement Income Security Act of 1974, as
amended, including the regulations and published interpretations thereunder
(“ERISA”); no “reportable event” (as defined in ERISA) has occurred with respect
to any “pension plan” (as defined in ERISA) for which the Company would have any
liability; the Company has not incurred and does not expect to incur liability
under (i) Title IV of ERISA with respect to termination of, or withdrawal from,
any “pension plan” or (ii) Sections 412 or 4971 of the Internal Revenue Code of
1986, as amended, including the regulations and published interpretations
thereunder (the “Code”); and each “pension plan” for which the Company would
have any liability that is intended to be qualified under Section 401(a) of the
Code is so qualified in all material respects and nothing has occurred, whether
by action or by failure to act, which would cause the loss of such
qualification.

 

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(ee) The Company and its subsidiaries have filed all federal, state and local
income and franchise Tax returns required to be filed through the date hereof
and have paid all Taxes due thereon, and no Tax deficiency has been determined
adversely to the Company or any of its subsidiaries which has had (nor does the
Company or any of the Guarantors have any knowledge of any Tax deficiency which,
if determined adversely to the Company or any of its subsidiaries, might have) a
Material Adverse Effect. The accruals and reserves on the books and records of
the Company and the Guarantors in respect of any material Tax liability for any
taxable period not finally determined are adequate to meet any assessments of
Tax for any such period. For purposes of this Agreement, the term “Tax” and
“Taxes” shall mean all Federal, state, local and foreign taxes, and other
assessments of a similar nature (whether imposed directly or through
withholding), including, without limitation, any interest, additions to tax, or
penalties applicable thereto.

(ff) The Company (i) makes and keeps accurate books and records and
(ii) maintains internal accounting controls which provide reasonable assurance
that (A) transactions are executed in accordance with management’s
authorization, (B) transactions are recorded as necessary to permit preparation
of its financial statements and to maintain accountability for its assets,
(C) access to its assets is permitted only in accordance with management’s
authorization and (D) the reported accountability for its assets is compared
with existing assets at reasonable intervals.

(gg) Neither the Company nor any of the Guarantors (i) is in violation of its
articles of incorporation, bylaws or other governing documents, (ii) is in
default (and no event has occurred which, with notice or lapse of time or both,
would constitute such a default), in the due performance or observance of any
term, covenant or condition contained in any material indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which it is a party
or by which it is bound or to which any of its properties or assets is subject
where such default would reasonably be expected to have a Material Adverse
Effect or (iii) is in violation in any material respect of any law, ordinance,
governmental rule, regulation or court decree to which it or its property or
assets may be subject or has failed to obtain any material license, permit,
certificate, franchise or other governmental authorization or permit necessary
to the ownership of its property or to the conduct of its business. To the
knowledge of the Company and its subsidiaries, no third party to any indenture,
mortgage, deed of trust, loan agreement or other material agreement or
instrument to which the Company or its subsidiaries is a

 

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party or by which it is bound or to which any of its properties are subject is
in default under any such agreement, where such default would reasonably be
expected to have a Material Adverse Effect.

(hh) Neither the Company nor any of its subsidiaries, nor any director, officer,
agent, employee or other person associated with or acting on behalf of the
Company or any of its subsidiaries, has used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expense relating to
political activity; made any direct or indirect unlawful payment to any foreign
or domestic government official or employee from corporate funds; violated or is
in violation of any provision of the Foreign Corrupt Practices Act of 1977; or
made any bribe, rebate, payoff, influence payment, kickback or other unlawful
payment.

(ii) Netherland, Sewell & Associates, whose report regarding the oil and natural
gas reserves of the Company and its subsidiaries is referred to in the Time of
Sale Memorandum and the Final Memorandum (the “Company Reserve Report”), and who
has delivered the letter regarding the Company referred to in Section 5(f)
hereof, was, as of the date of such report, and is, as of the date hereof, an
independent petroleum engineer with respect to the Company. The information
underlying the estimates of oil and natural gas reserves of the Company and its
subsidiaries, which the Company prepared and supplied to Netherland, Sewell &
Associates for the purpose of preparing the Company Reserve Report was true and
correct in all material respects on the dates such estimates were made, except
for such inaccuracies when taken as a whole would not result in the material
misstatement of the estimate of proved reserves of the Company and its
subsidiaries, the future net cash flows therefrom or the present value thereof,
and such information was supplied and was prepared in accordance with customary
industry practices; other than normal production of the reserves and intervening
product price fluctuations as described in the Time of Sale Memorandum and the
Final Memorandum, the Company is not aware of any facts or circumstances that
would result in an adverse change in the reserves, or the present value of
future net cash flows therefrom, as described in the Time of Sale Memorandum and
the Final Memorandum and as reflected in the Company Reserve Report, that would
reasonably be expected to result in a Material Adverse Effect; estimates of such
reserves and present values as described in the Time of Sale Memorandum and the
Final Memorandum and reflected in the Company Reserve Report comply in all
material respects with applicable requirements of Regulation S–X and Industry
Guide 2 under the Securities Act.

 

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(jj) The Company has established and maintains disclosure controls and
procedures (as such term is defined in Rule 13a–15(e) under the Exchange Act);
(ii) such disclosure controls and procedures are designed to ensure that
information required to be disclosed by the Company in the reports that the
Company will file or submit under the Exchange Act is recorded, processed,
summarized and reported, within the time periods specified in the Commission’s
rules and forms, and are designed to ensure that information required to be
disclosed by the Company in the reports that it will file or submit under the
Exchange Act is accumulated and communicated to the Company’s management,
including the Company’s principal executive and principal financial officers, or
persons performing similar functions, as appropriate to allow timely decisions
regarding required disclosure; and (iii) such disclosure controls and procedures
are effective in all material respects to perform the functions for which they
were established.

(kk) Since the date of the latest audited financial statements included in the
Time of Sale Memorandum, there has been no change in the Company’s internal
control over financial reporting that has materially adversely affected, or is
reasonably likely to materially adversely affect the Company’s internal control
over financial reporting.

(ll) The Company is in compliance in all material respects with applicable
provisions of the Sarbanes–Oxley Act of 2002 and the rules and regulations of
the Commission and the NYSE that pertain thereto that are effective, and is
actively taking steps to ensure that it will be in compliance in all material
respects with other applicable provisions of the Sarbanes–Oxley Act of 2002 and
the rules and regulations of the Commission and the NYSE that pertain thereto
upon the effectiveness of such provisions.

(mm) The Company has not engaged any broker, finder, commission agent or other
person (other than the Initial Purchasers) in connection with the offering or
any of the transactions contemplated in this Agreement, the Indenture or the
Offered Securities, and the Company is not under any obligation to pay any
broker’s fee or commission in connection with such transactions (other than
commissions or fees to the Initial Purchasers).

(nn) Each certificate signed by any officer of the Company or the Guarantors
delivered to the Representative shall be deemed a representation and warranty by
the Company or the Guarantors (and not individually by such officer) to the
Representative with respect to the matters covered thereby.

 

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(oo) Neither the Company nor the Guarantors are, and after giving effect to the
offering and sale of the Offered Securities and the application of the proceeds
thereof as described in the Final Memorandum will be, required to register as an
“investment company” as such term is defined in the Investment Company Act of
1940, as amended.

(pp) Neither the Company nor any affiliate (as defined in Rule 501(b) of
Regulation D under the Securities Act, an “Affiliate”) of the Company has
directly, or through any agent, (i) sold, offered for sale, solicited offers to
buy or otherwise negotiated in respect of, any security (as defined in the
Securities Act) which is or will be integrated with the sale of the Offered
Securities in a manner that would require the registration under the Securities
Act of the Offered Securities or (ii) offered, solicited offers to buy or sell
the Offered Securities by any form of general solicitation or general
advertising (as those terms are used in Regulation D under the Securities Act)
or in any manner involving a public offering within the meaning of Section 4(2)
of the Securities Act.

(qq) None of the Company, its Affiliates or any person acting on its or their
behalf has engaged or will engage in any directed selling efforts (within the
meaning of Regulation S) with respect to the Offered Securities and the Company
and its Affiliates and any person acting on its or their behalf have complied
and will comply with the offering restrictions requirement of Regulation S,
except no representation, warranty or agreement is made by the Company in this
paragraph with respect to the Initial Purchasers.

(rr) Assuming the accuracy of representations and warranties in Section 7
hereof, it is not necessary in connection with the offer, sale and delivery of
the Offered Securities to the Initial Purchasers in the manner contemplated by
this Agreement to register the Offered Securities under the Securities Act or to
qualify the Indenture under the Trust Indenture Act of 1939, as amended.

(ss) The Securities satisfy the requirements set forth in Rule 144A(d)(3) under
the Securities Act.

2. Agreements to Sell and Purchase. The Company hereby agrees to sell to the
several Initial Purchasers, and each Initial Purchaser, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the
Company the respective principal amount of Securities set forth in Schedule I
hereto opposite its name at a purchase price of 99.089% of the principal amount
thereof (the “Purchase Price”) plus accrued interest, if any, to the Closing
Date.

 

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3. Terms of Offering. You have advised the Company that the Initial Purchasers
will make an offering of the Offered Securities purchased by the Initial
Purchasers hereunder as soon as practicable after this Agreement is entered into
as in your judgment is advisable.

4. Payment and Delivery. Payment for the Offered Securities shall be made to the
Company in Federal or other funds immediately available in New York City against
delivery of such Offered Securities for the respective accounts of the several
Initial Purchasers at 10:00 a.m., New York City time, on June 13, 2007, or at
such other time on the same or such other date as shall be designated in writing
by you. The time and date of such payment are hereinafter referred to as the
“Closing Date.”

The Offered Securities shall be in global form and registered in the name of
Cede & Co., as nominee of The Depository Trust Company (“DTC”). The Offered
Securities shall be delivered to you on the Closing Date through the facilities
of DTC for the respective accounts of the several Initial Purchasers, with any
transfer taxes payable in connection with the transfer of the Offered Securities
to the Initial Purchasers duly paid, against payment of the Purchase Price
therefor plus accrued interest, if any, to the date of payment and delivery.

5. Conditions to the Initial Purchasers’ Obligations. The several obligations of
the Initial Purchasers to purchase and pay for the Offered Securities on the
Closing Date are subject to the following conditions:

(a) Subsequent to the execution and delivery of this Agreement and prior to the
Closing Date:

(i) 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 of the securities of the Company or any of its
subsidiaries by any “nationally recognized statistical rating organization,” as
such term is defined for purposes of Rule 436(g)(2) under the Securities Act;
and

(ii) there shall not have occurred any change, or any development involving a
prospective change, in the condition, financial or otherwise, or in the
earnings, business or operations of the Company and its subsidiaries, taken as a
whole, from that set forth in the Time of Sale Memorandum provided to the
prospective purchasers of the Offered Securities that, in your judgment, is
material and adverse and that makes it, in your

 

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judgment, impracticable to market the Offered Securities on the terms and in the
manner contemplated in the Time of Sale Memorandum.

(b) The Initial Purchasers shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer of the
Company and the Guarantors, to the effect set forth in Section 5(a)(i) and to
the effect that the representations and warranties of the Company and the
Guarantors contained in this Agreement are true and correct as of the Closing
Date and that the Company and the Guarantors have complied with all of the
agreements and satisfied all of the conditions on their part to be performed or
satisfied hereunder on or before the Closing Date.

The officer signing and delivering such certificate may rely upon the best of
his or her knowledge as to proceedings threatened.

(c) The Initial Purchasers shall have received on the Closing Date an opinion of
Adams & Reese LLP, outside counsel for the Company, dated the Closing Date, to
the effect set forth in Exhibit A. Such opinion shall be rendered to the
Representative at the request of the Company and shall so state therein.

(d) The Initial Purchasers shall have received on the Closing Date an opinion of
White & Case LLP, counsel for the Initial Purchasers, dated the Closing Date, to
the effect set forth in Exhibit B.

(e) The Representative, on behalf of the Initial Purchasers, shall have received
from Ernst & Young, LLP as public accountants for the Company, a letter, and
from Ernst & Young, LLP, as auditors of the statement of revenues and direct
operating expenses of the Kerr-McGee properties, a letter, in each case on each
of the date hereof and the Closing Date, dated the date hereof or the Closing
Date, as the case may be, in each case in form and substance satisfactory to the
Representative, from Ernst & Young, LLP, independent public accountants,
containing statements and information of the type ordinarily included in
accountants’ “comfort letters” to underwriters with respect to the financial
statements and certain financial information contained in the Time of Sale
Memorandum and the Final Memorandum; provided that the letter delivered on the
Closing Date shall use a “cut-off date” not earlier than three days prior to the
date hereof.

(f) The Initial Purchasers shall have received from Netherland Sewell &
Associates, the Company’s independent petroleum engineers, a

 

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letter or letters dated, respectively, the date of this Agreement and the
Closing Date, in form and substance reasonably satisfactory to the
Representative, each stating, as of the date of such letter (or, with respect to
matters involving changes or developments since the respective dates as of which
information regarding the natural gas and oil reserves and future net cash flows
is given in the Time of Sale Memorandum and the Final Offering Memorandum, as of
the date not more than five days prior to the date of such letter), the
conclusions and findings of such firm with respect to the natural gas and oil
reserves of the Company and such other matters as the Representative reasonably
may request.

6. Covenants of the Company and the Guarantors. The Company and the Guarantors
covenant with each Initial Purchaser as follows:

(a) To furnish to you in New York City, without charge, prior to 10:00 a.m. New
York City time on the business day next succeeding the date of this Agreement
and during the period mentioned in Section 6(d) or (e), as many copies of the
Time of Sale Memorandum, the Final Memorandum, any documents referred to therein
and any supplements and amendments thereto as you may reasonably request.

(b) Before amending or supplementing the Preliminary Memorandum, the Time of
Sale Memorandum or the Final Memorandum, to furnish to you a copy of each such
proposed amendment or supplement and not to use any such proposed amendment or
supplement to which you reasonably object.

(c) To furnish to you a copy of each proposed Additional Written Offering
Communication to be prepared by or on behalf of, used by, or referred to by the
Company and not to use or refer to any proposed Additional Written Offering
Communication to which you reasonably object.

(d) If the Time of Sale Memorandum is being used to solicit offers to buy the
Offered Securities at a time when the Final Memorandum is not yet available to
prospective purchasers and any event shall occur or condition exist as a result
of which it is necessary to amend or supplement the Time of Sale Memorandum in
order to make the statements therein, in the light of the circumstances, not
misleading, or if, in the opinion of counsel for the Initial Purchasers, it is
necessary to amend or supplement the Time of Sale Memorandum to comply with
applicable law, forthwith to prepare and furnish, at its own expense, to the
Initial Purchasers and to any dealer upon request, either amendments or
supplements to the Time of Sale Memorandum so that the statements in the Time of
Sale

 

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Memorandum as so amended or supplemented will not, in the light of the
circumstances when delivered to a prospective purchaser, be misleading or so
that the Time of Sale Memorandum, as amended or supplemented, will comply with
applicable law.

(e) If, during such period after the date hereof and prior to the date on which
all of the Offered Securities shall have been sold by the Initial Purchasers,
any event shall occur or condition exist as a result of which it is necessary to
amend or supplement the Final Memorandum in order to make the statements
therein, in the light of the circumstances when the Final Memorandum is
delivered to a purchaser, not misleading, or if, in the opinion of counsel for
the Initial Purchasers, it is necessary to amend or supplement the Final
Memorandum to comply with applicable law, forthwith to prepare and furnish, at
its own expense, to the Initial Purchasers and to such dealers as the
Representative may designate, either amendments or supplements to the Final
Memorandum so that the statements in the Final Memorandum as so amended or
supplemented will not, in the light of the circumstances when the Final
Memorandum is delivered to a purchaser, be misleading or so that the Final
Memorandum, as amended or supplemented, will comply with applicable law.

(f) To endeavor to qualify the Offered Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request.

(g) To use the proceeds from the offer and sale of the Offered Securities in the
manner described in the Time of Sale Memorandum and the Final Offering
Memorandum under the caption “Use of Proceeds.”

(h) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of their respective obligations under this
Agreement, including: (i) the fees, disbursements and expenses of the Company’s
counsel and the Company’s accountants in connection with the issuance and sale
of the Offered Securities and all other fees or expenses in connection with the
preparation of the Preliminary Memorandum, the Time of Sale Memorandum, the
Final Memorandum, any Additional Written Offering Communication prepared by or
on behalf of, used by, or referred to by the Company and any amendments and
supplements to any of the foregoing, including all printing costs associated
therewith, and the delivering of copies thereof to the Initial Purchasers, in
the quantities herein above specified, (ii) all costs and expenses related to
the issue and delivery of the Offered Securities to the Initial Purchasers,
including any transfer or other

 

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taxes payable thereon, (iii) the cost of printing or producing any Blue Sky or
legal investment memorandum in connection with the offer and sale of the Offered
Securities under state securities laws and all expenses in connection with the
qualification of the Offered Securities for offer and sale under state
securities laws as provided in Section 6(f) hereof, including filing fees and
the reasonable fees and disbursements of counsel for the Initial Purchasers in
connection with such qualification and in connection with the Blue Sky or legal
investment memorandum, (iv) any fees charged by rating agencies for the rating
of the Offered Securities, (v) the fees and expenses, if any, incurred in
connection with the admission of the Securities for trading in PORTAL or any
appropriate market system, (vi) the costs and charges of the Trustee and any
transfer agent, registrar or depositary, (vii) the cost of the preparation,
issuance and delivery of the Offered Securities, (viii) the costs and expenses
of the Company relating to investor presentations on any “road show” undertaken
in connection with the marketing of the offering of the Offered Securities,
including, without limitation, expenses associated with the preparation or
dissemination of any electronic road show, expenses associated with production
of road show slides and graphics, fees and expenses of any consultants engaged
in connection with the road show presentations with the prior approval of the
Company, travel and lodging expenses of the representatives and officers of the
Company and any such consultants, and the cost of any aircraft chartered in
connection with the road show, and (ix) all other cost and expenses incident to
the performance of the obligations of the Company hereunder for which provision
is not otherwise made in this Section. It is understood, however, that except as
provided in this Section, Section 8, and the last paragraph of Section 10, the
Initial Purchasers will pay all of their costs and expenses, including fees and
disbursements of their counsel, transfer taxes payable on resale of any of the
Offered Securities by them and any advertising expenses connected with any
offers they may make.

(i) Neither the Company nor any Affiliate will sell, offer for sale or solicit
offers to buy or otherwise negotiate in respect of any security (as defined in
the Securities Act) which could be integrated with the sale of the Offered
Securities in a manner which would require the registration under the Securities
Act of the Offered Securities.

(j) Not to solicit any offer to buy or offer or sell the Offered Securities by
means of any form of general solicitation or general advertising (as those terms
are used in Regulation D under the Securities Act) or in any manner involving a
public offering within the meaning of Section 4(2) of the Securities Act.

 

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(k) While any of the Offered Securities remain “restricted securities” within
the meaning of the Securities Act, to make available, upon request, to any
seller of such Offered Securities the information specified in Rule 144A(d)(4)
under the Securities Act, unless the Company is then subject to Section 13 or
15(d) of the Exchange Act.

(l) If requested by you, to use its best efforts to permit the Securities to be
designated PORTAL securities in accordance with the rules and regulations
adopted by the National Association of Securities Dealers, Inc. relating to
trading in the PORTAL Market.

(m) None of the Company, its Affiliates or any person acting on its or their
behalf (other than the Initial Purchasers) will engage in any directed selling
efforts (as that term is defined in Regulation S) with respect to the Offered
Securities, and the Company and its Affiliates and each person acting on its or
their behalf (other than the Initial Purchasers) will comply with the offering
restrictions requirement of Regulation S.

(n) 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 Offered Securities which constitute
“restricted securities” under Rule 144 that have been reacquired by any of them.

The Company also agrees that, without the prior written consent of Morgan
Stanley & Co. Incorporated on behalf of the Initial Purchasers, it will not,
during the period beginning on the date hereof and continuing to and including
the Closing Date, offer, sell, contract to sell or otherwise dispose of any debt
securities of the Company or warrants to purchase debt securities of the Company
substantially similar to the Offered Securities (other than the sale of the
Offered Securities under this Agreement).

7. Offering of Offered Securities; Restrictions on Transfer. (a) Each Initial
Purchaser, severally and not jointly, represents and warrants that such Initial
Purchaser is a qualified institutional buyer as defined in Rule 144A under the
Securities Act (a “QIB”). Each Initial Purchaser, severally and not jointly,
agrees with the Company that (i) it will not solicit offers for, or offer or
sell, such Offered Securities by any form of general solicitation or general
advertising (as those terms are used in Regulation D under the Securities Act)
or in any manner involving a public offering within the meaning of Section 4(2)
of the Securities Act and (ii) it will solicit offers for such Offered
Securities only from, and will offer such Offered Securities only to, persons
that it reasonably believes to be (A) in the case of offers inside the United
States, QIBs and (B) in the case of offers outside the United States, to persons
other than U.S. persons (“foreign

 

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purchasers,” which term shall include dealers or other professional fiduciaries
in the United States acting on a discretionary basis for foreign beneficial
owners (other than an estate or trust)) in reliance upon Regulation S under the
Securities Act that, in each case, in purchasing such Offered Securities are
deemed to have represented and agreed as provided in the Final Memorandum under
the caption “Notice to Investors”.

(b) Each Initial Purchaser, severally and not jointly, represents, warrants, and
agrees with respect to offers and sales outside the United States that:

(i) such Initial Purchaser understands that no action has been or will be taken
in any jurisdiction by the Company that would permit a public offering of the
Offered Securities, or possession or distribution of the Preliminary Memorandum,
the Time of Sale Memorandum, the Final Memorandum or any other offering or
publicity material relating to the Offered Securities, in any country or
jurisdiction where action for that purpose is required;

(ii) such Initial Purchaser will comply with all applicable laws and regulations
in each jurisdiction in which it acquires, offers, sells or delivers Offered
Securities or has in its possession or distributes the Preliminary Memorandum,
the Time of Sale Memorandum, the Final Memorandum or any such other material, in
all cases at its own expense;

(iii) the Offered Securities have not been registered under the Securities Act
and may not be offered or sold within the United States or to, or for the
account or benefit of, U.S. persons except in accordance with Rule 144A or
Regulation S under the Securities Act or pursuant to another exemption from the
registration requirements of the Securities Act;

(iv) such Initial Purchaser has offered the Offered Securities and will offer
and sell the Offered Securities (A) as part of their distribution at any time
and (B) otherwise until 40 days after the later of the commencement of the
offering and the Closing Date, only in accordance with Rule 903 of Regulation S
or as otherwise permitted in Section 7(a); accordingly, neither such Initial
Purchaser, its Affiliates or any persons acting on its or their behalf have
engaged or will engage in any directed selling efforts (within the meaning of
Regulation S) with respect to the Offered Securities, and any such Initial
Purchaser, its Affiliates and any such persons have complied and will comply
with the offering restrictions requirement of Regulation S;

 

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(v) such Initial Purchaser, in relation to each Member State of the European
Economic Area which has implemented the Prospectus Directive (each, a “Member
State”), has represented and agreed that with effect from and including the date
on which the Prospectus Directive is implemented in that Member State it has not
made and will not make an offer of Offered Securities to the public in that
Member State, except that it may, with effect from and including such date, make
an offer of Offered Securities to the public in that Member State:

(A) at any time to legal entities which are authorized or regulated to operate
in the financial markets or, if not so authorised or regulated, whose corporate
purpose is solely to invest in securities;

(B) at any time to any legal entity which has two or more of (1) an average of
at least 250 employees during the last financial year; (2) a total balance sheet
of more than €43,000,000 and (3) an annual net turnover of more than
€50,000,000, as shown in its last annual or consolidated accounts; or

(C) at any time in any other circumstances which do not require the publication
by us of a prospectus pursuant to Article 3 of the Prospectus Directive.

For the purposes of the above, the expression an “offer of Offered Securities to
the public” in relation to any Offered Securities in any Member State means the
communication in any form and by any means of sufficient information on the
terms of the offer and the Offered Securities to be offered so as to enable an
investor to decide to purchase or subscribe the Offered Securities, as the same
may be varied in that Member State by any measure implementing the Prospectus
Directive in that Member State and the expression Prospectus Directive means
Directive 2003/71/EC and includes any relevant implementing measure in that
Member State;

(vi) such Initial Purchaser has represented and agreed that it has only
communicated or caused to be communicated and will only communicate or cause to
be communicated an invitation or inducement to engage in investment activity
(within the

 

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meaning of Section 21 of the Financial Services and Markets Act 2000) in
connection with the issue or sale of the Offered Securities in circumstances in
which Section 21(1) of such Act does not apply to us and it has complied and
will comply with all applicable provisions of such Act with respect to anything
done by it in relation to any Offered Securities in, from or otherwise involving
the United Kingdom;

(vii) such Initial Purchaser understands that the Offered Securities have not
been and will not be registered under the Securities and Exchange Law of Japan,
and represents that it has not offered or sold, and agrees not to offer or sell,
directly or indirectly, any Offered Securities in Japan or for the account of
any resident thereof except pursuant to any exemption from the registration
requirements of the Securities and Exchange Law of Japan and otherwise in
compliance with applicable provisions of Japanese law; and

(viii) such Initial Purchaser agrees that, at or prior to confirmation of sales
of the Offered Securities, it will have sent to each distributor, dealer or
person receiving a selling concession, fee or other remuneration that purchases
Offered Securities from it during the restricted period 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 (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 their distribution at any time or (ii) otherwise until 40 days
after the later of the commencement of the offering and the Closing Date, except
in either case in accordance with Regulation S (or Rule 144A if available) under
the Securities Act. Terms used above have the meaning given to them by
Regulation S.”

Terms used in this Section 7(b) have the meanings given to them by Regulation S.

8. Indemnity and Contribution. (a) The Company and each Guarantor agrees,
jointly and severally, to indemnify and hold harmless each Initial Purchaser,
each person, if any, who controls any Initial Purchaser within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act, and
each affiliate of any Initial Purchaser within the meaning of Rule 405

 

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under the Securities Act from and against any and all losses, claims, damages
and liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Preliminary Memorandum, the Time of Sale
Memorandum, any Additional Written Offering Communication prepared by or on
behalf of, used by, or referred to by the Company, or the Final Memorandum or
any amendment or supplement thereto, or caused by any omission or alleged
omission to state therein a material fact necessary to make the statements
therein in the light of the circumstances under which they were made not
misleading, except insofar as such losses, claims, damages or liabilities are
caused by any such untrue statement or omission or alleged untrue statement or
omission based upon information relating to any Initial Purchaser furnished to
the Company in writing by such Initial Purchaser through you expressly for use
therein.

(b) Each Initial Purchaser agrees, severally and not jointly, to indemnify and
hold harmless the Company, each Guarantor, their respective directors, its
officers and each person, if any, who controls the Company within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act to the
same extent as the foregoing indemnity from the Company to such Initial
Purchaser, but only with reference to information relating to such Initial
Purchaser furnished to the Company in writing by such Initial Purchaser through
you expressly for use in the Preliminary Memorandum, the Time of Sale
Memorandum, any Additional Written Offering Communication prepared by or on
behalf of, used by or referred to by the Company, or the Final Memorandum or any
amendment or supplement thereto.

(c) In case any proceeding (including any governmental investigation) shall be
instituted involving any person in respect of which indemnity may be sought
pursuant to Section 8(a) or 8(b), such person (the “indemnified party”) shall
promptly notify the person against whom such indemnity may be sought (the
“indemnifying party”) in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing

 

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interests between them. It is understood that the indemnifying party shall not,
in respect of the legal expenses of any indemnified party in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all such indemnified parties and that all such fees and expenses
shall be reimbursed as they are incurred. Such firm shall be designated in
writing by Morgan Stanley & Co. Incorporated, in the case of parties indemnified
pursuant to Section 8(a), and by the Company, in the case of parties indemnified
pursuant to Section 8(b). The indemnifying party 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 from and against
any loss or liability 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 the second and third sentences of this paragraph,
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 30 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 of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.

(d) To the extent the indemnification provided for in Section 8(a) or 8(b) is
unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages or liabilities referred to therein, then each indemnifying party
under such paragraph, in lieu of indemnifying such indemnified party thereunder,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (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 Offered Securities or (ii) if the allocation provided by
clause 8(d)(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 8(d)(i) above but also the relative fault of the Company and the
Guarantors on the one hand and of the Initial Purchasers on the other hand in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative

 

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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
Offered Securities shall be deemed to be in the same respective proportions as
the net proceeds from the offering of the Offered Securities (before deducting
expenses) received by the Company and the Guarantors and the total discounts and
commissions received by the Initial Purchasers bear to the aggregate offering
price of the Offered Securities. The relative fault of the Company and the
Guarantors on the one hand and of the Initial Purchasers on the other hand shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company and the
Guarantors or by the Initial Purchasers and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. For purposes of the preceding two sentences, the net
proceeds deemed to be received by the Company shall be deemed to be also for the
benefit of the Guarantors and information supplied by the Company shall also be
deemed to be supplied by the Guarantors. The Initial Purchasers’ respective
obligations to contribute pursuant to this Section 8 are several in proportion
to the respective principal amount of Offered Securities they have purchased
hereunder, and not joint.

(e) The Company, the Guarantors and the Initial Purchasers agree that it would
not be just or equitable if contribution pursuant to this Section 8 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 that does
not take account of the equitable considerations referred to in Section 8(d).
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in Section 8(d) shall be deemed to
include, subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 8, no Initial Purchaser shall be required to contribute any amount in
excess of the amount by which the total price at which the Offered Securities
resold by it in the initial placement of such Offered Securities were offered to
investors exceeds the amount of any damages that such Initial Purchaser has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section 8 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.

 

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(f) The indemnity and contribution provisions contained in this Section 8 and
the representations, warranties and other statements of the Company contained in
this Agreement shall remain operative and in full force and effect regardless of
(i) any termination of this Agreement, (ii) any investigation made by or on
behalf of any Initial Purchaser, any person controlling any Initial Purchaser or
any affiliate of any Initial Purchaser or by or on behalf of the Company, its
officers or directors or any person controlling the Company and (iii) acceptance
of and payment for any of the Offered Securities.

9. Termination. The Initial Purchasers may terminate this Agreement by notice
given by you to the Company, if after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on, or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange, the NASDAQ Global Market, the
Chicago Board of Options Exchange, the Chicago Mercantile Exchange or the
Chicago Board of Trade, (ii) trading of any securities of the Company shall have
been suspended on any exchange or in any over-the-counter market, (iii) a
material disruption in securities settlement, payment or clearance services in
the United States shall have occurred, (iv) any moratorium on commercial banking
activities shall have been declared by Federal or New York State authorities or
(v) there shall have occurred any outbreak or escalation of hostilities, or any
change in financial markets or any calamity or crisis that, in your judgment, is
material and adverse and which, singly or together with any other event
specified in this clause (v), makes it, in your judgment, impracticable or
inadvisable to proceed with the offer, sale or delivery of the Offered
Securities on the terms and in the manner contemplated in the Time of Sale
Memorandum or the Final Memorandum.

10. Effectiveness; Defaulting Initial Purchasers. This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.

If, on the Closing Date, any one or more of the Initial Purchasers shall fail or
refuse to purchase Offered Securities that it or they have agreed to purchase
hereunder on such date, and the aggregate principal amount of Offered Securities
which such defaulting Initial Purchaser or Initial Purchasers agreed but failed
or refused to purchase is not more than one-tenth of the aggregate principal
amount of Offered Securities to be purchased on such date, the other Initial
Purchasers shall be obligated severally in the proportions that the principal
amount of Offered Securities set forth opposite their respective names in
Schedule I bears to the aggregate principal amount of Offered Securities set
forth opposite the names of all such non-defaulting Initial Purchasers, or in
such other proportions as you may specify, to purchase the Offered Securities
which such defaulting Initial Purchaser or Initial Purchasers agreed but failed
or refused to purchase on such date;

 

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provided that in no event shall the principal amount of Offered Securities that
any Initial Purchaser has agreed to purchase pursuant to this Agreement be
increased pursuant to this Section 10 by an amount in excess of one-ninth of
such principal amount of Offered Securities without the written consent of such
Initial Purchaser. If, on the Closing Date any Initial Purchaser or Initial
Purchasers shall fail or refuse to purchase Offered Securities which it or they
have agreed to purchase hereunder on such date and the aggregate principal
amount of Offered Securities with respect to which such default occurs is more
than one-tenth of the aggregate principal amount of Offered Securities to be
purchased on such date, and arrangements satisfactory to you and the Company for
the purchase of such Offered Securities are not made within 36 hours after such
default, this Agreement shall terminate without liability on the part of any
non-defaulting Initial Purchaser or of the Company. In any such case either you
or the Company shall have the right to postpone the Closing Date, but in no
event for longer than seven days, in order that the required changes, if any, in
the Time of Sale Memorandum, the Final Memorandum or in any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Initial Purchaser from liability in respect of any
default of such Initial Purchaser under this Agreement.

If this Agreement shall be terminated by the Initial Purchasers, or any of them,
because of any failure or refusal on the part of the Company to comply with the
terms or to fulfill any of the conditions of this Agreement, or if for any
reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Initial Purchasers or such Initial
Purchasers as have so terminated this Agreement with respect to themselves,
severally, for all out-of-pocket expenses (including the fees and disbursements
of their counsel) reasonably incurred by such Initial Purchasers in connection
with this Agreement or the offering contemplated hereunder.

11. Entire Agreement. (a) This Agreement, together with any contemporaneous
written agreements and any prior written agreements (to the extent not
superseded by this Agreement) that relate to the offering of the Offered
Securities, represents the entire agreement between the Company and the Initial
Purchasers with respect to the preparation of the Preliminary Memorandum, the
Time of Sale Memorandum, the Final Memorandum, the conduct of the offering, and
the purchase and sale of the Offered Securities.

(b) The Company and the Guarantors acknowledge that in connection with the
offering of the Offered Securities: (i) the Initial Purchasers have acted at
arms length, are not agents of, and owe no fiduciary duties to, the Company, the
Guarantors or any other person, (ii) the Initial Purchasers owe the Company and
the Guarantors only those duties and obligations set forth in this

 

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Agreement and prior written agreements (to the extent not superseded by this
Agreement) if any, and (iii) the Initial Purchasers may have interests that
differ from those of the Company and the Guarantors. The Company and the
Guarantors waive to the full extent permitted by applicable law any claims it
may have against the Initial Purchasers arising from an alleged breach of
fiduciary duty in connection with the offering of the Offered Securities.

12. Counterparts. This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.

13. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.

14. Headings. The headings of the sections of this Agreement have been inserted
for convenience of reference only and shall not be deemed a part of this
Agreement.

15. Notices. All communications hereunder shall be in writing and effective only
upon receipt and if to the Initial Purchasers shall be delivered, mailed or sent
to you in care of Morgan Stanley & Co. Incorporated, 1585 Broadway, New York,
New York 10036, Attention: High Yield Syndicate Desk, with a copy to the Legal
Department; and if to the Company shall be delivered, mailed or sent to W&T
Offshore, Inc. Nine Greenway Plaza, Suite 300, Houston, Texas 77046, Attention:
Tracy W. Krohn (Fax: 713-626-8527).

 

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Very truly yours, Very truly yours, W&T OFFSHORE, INC. By:  

/s/ John D. Gibbons

Name:   John D. Gibbons Title:   Senior Vice President and Chief Financial
Officer GULF OF MEXICO OIL AND GAS PROPERTIES LLC OFFSHORE ENERGY I LLC OFFSHORE
ENERGY II LLC OFFSHORE ENERGY III LLC OFFSHORE SHELF LLC W&T ENERGY VI, LLC W&T
ENERGY VII, LLC By:  

/s/ Thomas F. Getten

Name:   Thomas F. Getten Title:   Authorized Representative

 

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Accepted as of the date hereof Morgan Stanley & Co. Incorporated Acting
severally on behalf of itself and the
several Initial Purchasers named in
Schedule I hereto. By:   Morgan Stanley & Co. Incorporated By:  

/s/

Name:   Title:  

 

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