AGREEMENT
 
THIS AGREEMENT (this “Agreement”) is entered into on the first day of November,
2006, by and between Burnett Oil Company, a general partnership whose address is
801 Cherry Street, Unit #9, Burnett Plaza, Suite 1500, Fort Worth, Texas
76102-6881 (hereinafter referred to as “Burnett”) and Standard Drilling, Inc., a
Nevada corporation whose address is 1155 Dairy Ashford St., Suite 402, Houston,
Texas 77079 (hereinafter referred to as “Standard”). Standard and Burnett are
sometimes collectively referred to herein as the “Parties” and individually as a
“Party.”

WHEREAS, Burnett is the owner of the oil and gas leases described in Exhibit A
(collectively the “Leases”); and
 
WHEREAS, the Parties desire to set forth the terms pursuant to which Standard
can earn an interest in the Leases by making a cash payment and drilling and
completing a well into the Barnett Shale;
 
NOW, THEREFORE, in consideration of the mutual benefits and obligations
hereunder, the Parties agree as follows:
 
1. Definitions. The following terms shall have the designated meanings:
 
“Assigned Interests” means an undivided 60% of 8/8ths interest which yields a
net revenue interest of 48% in and to the following assets:

(a)  the Leases (whose leasehold burdens cannot exceed 20%), including without
limitation all overriding royalty interests and working interests therein;

(b) the oil and gas wells located upon the lands covered by the Leases or pooled
or unitized therewith including the Earning Well (collectively, the “Wells”);

(c) all platforms, water source wells, injection wells, tubular goods, well
equipment, lease equipment, production equipment, pipelines and all other
personal property, fixtures and facilities appurtenant to or used in connection
with the Leases or the Wells (collectively the “Facilities”);

(d) all oil, gas, distillate, condensate, casinghead gas or other liquid or
vaporous hydrocarbons, or other minerals (collectively, the “Hydrocarbons”),
produced from or attributable to the Leases from and after the Effective Time,
and all Hydrocarbons produced prior to the Effective Time and in storage as of
the date of the Assignment;

(e) all production sales contracts, transportation agreements, pooling
agreements, unitization agreements, operating agreements, processing agreements,
surface leases, office or building leases, easements, permits, licenses and
rights-of-way, orders of governmental authorities, and all other contracts,
agreements and instruments related to or utilized in connection with the Leases,
Wells, Facilities, or the production, storage, treatment, transportation, sale
or disposal of Hydrocarbons or other substances therefrom (the “Contracts”); and

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(f) copies of all of Assignor’s files, records and data regarding the Leases,
Wells and Facilities including without limitation, all abstracts of title, title
opinions, title curative documents, title records, leases, assignments,
contracts, correspondence, geologic, geophysical and seismic records, data and
information, and production records, logs, core data, pressure data and decline
curves, production curves accounting records and all related items (the
“Files”).
 
“Assignment” means an assignment substantially in the form of Exhibit B.
 
“Burnett Group” shall mean, individually or in any combination, Burnett, its
affiliates, and each of their respective directors, officers, members and
employees.
 
“Defend” shall mean the obligation of the indemnitor at the indemnitees’
election (i) to defend the indemnitees at its sole expense or (ii) to reimburse
the indemnitees for the indemnitees’ reasonable expenses incurred in defending
themselves. Notwithstanding the indemnitee’s election of option (i) above, the
indemnitee shall be entitled to participate in its defense at its sole cost.

“Drilling Operations” means any and all operations related to or arising out of
drilling or completing the Earning Well or any replacement well therefore.

“Drilling Rig” means a drilling rig substantially meeting the specifications set
forth in Exhibit C which is to be supplied by Standard and which is capable of
reaching the total depth of the lateral in the Barnett Shale formation. If
Standard is unable to supply such drilling rig but elects to go forward, as
provided for in Section 2.2 below, with a third party drilling rig secured by
either Standard or Burnett that is capable of reaching the total depth of the
lateral in the Barnett Shale formation, then the term "Drilling Rig” shall mean
such third party drilling rig.
 
“Earning Well” shall have the meaning given that term in Section 3.1.

“Effective Time” shall have the meaning given that term in the Assignment.

“Force Majeure” means acts of God, acts of government or any agency, subdivision
or instrumentality thereof, acts of civil disorder, acts of industrial disorder,
failures of facilities or vessels, shortages, any inability to obtain or
acquire, at reasonable cost, necessary authorizations or equipment, and any
other occurrence, condition, or situation not within the control of the Party
and that could not have been prevented by the exercise of reasonable diligence.

“Losses” shall mean claims, demands, causes of action, losses, liabilities,
indemnity obligations, costs, damages or expenses of any kind and character
(including attorney’s fees and other legal expenses and punitive, exemplary and
the multiplied portion of multiplied damages).
 

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“JOA” means a joint operating agreement substantially in the form of Exhibit D
governing the operation of the Leases.

“Standard Group” shall mean, individually or in any combination, Standard, its
affiliates, and each of their respective directors, officers and employees.

“Well Costs” shall mean all costs associated with the Earning Well incurred up
to the date when Standard has completed the on-lease tie-in point to a gathering
pipeline that will transport gas from the Leases to a third party gathering or
sales pipeline, including, but not limited to, costs of permitting, surveying,
title opinions, roads, location, drilling, completion and equipping.

2. Cash Consideration.
 
2.1 Payment. Standard shall pay to Burnett the sum of $250,000 (the “Cash
Consideration”) on or before November 1, 2006 in partial consideration for the
Assigned Interests, subject to the terms hereof.
 
2.2 Mobilization and Forfeiture. Standard shall promptly notify Burnett when the
Drilling Rig is in a condition to permit mobilization to location (the “Rig
Completion Notice”). If Standard fails to provide such notice on or before
November 30, 2006, it shall forfeit the Cash Consideration (subject to Section
2.3) and this Agreement shall terminate. If, prior to November 30, 2006,
Standard learns that it will be unable to mobilize the Drilling Rig to location
by such date, it will give Burnett immediate notice thereof and either party
will be free to locate and secure another drilling rig in order to save the
Leases prior to the end of their primary terms. In that event, if either
Standard or Burnett locates and secures another drilling rig for the Earning
Well, Standard must elect within forty eight (48) hours of receipt of an
executed drilling rig contract to either go forward with the drilling of the
Earning Well or, if it elects not to do so or fails to respond within the forty
eight (48) hour notice period (which shall be deemed an election not to go
forward), Standard shall forfeit the Cash Consideration (subject to Section 2.3
below) and this agreement shall terminate. If Standard pays the Well Costs
associated with the Drilling Operations, Standard shall be deemed to have
satisfied its obligation to drill and complete the Earning Well. Provided (i)
Burnett has obtained all necessary consents and authorizations for Standard to
drill the Earning Well and receive the Assignment, including those required
under Section 3.1, (ii) the drillsite location for the Earning Well is completed
as necessary to support the Drilling Operations by the Drilling Rig, and (iii)
Burnett is not in breach of this Agreement, Burnett shall notify Standard, or
the other agreed to drilling contractor, when it is ready for Standard to
mobilize the Drilling Rig to location (the “Mobilization Notice”). If, following
receipt of a Mobilization Notice in compliance with the foregoing, and if
Standard has provided Burnett the Rig Completion Notice, Standard fails to
commence actual drilling with the Drilling Rig on location within fourteen (14)
days after the later to occur of the Rig Completion Notice or such Mobilization
Notice (such 14 day period being referred to herein as the “Mobilization
Period”), Standard shall forfeit the Cash Consideration (subject to Section 2.3)
and this Agreement shall terminate. If Standard has given Burnett the Rig
Completion Notice and Burnett fails to give Standard a Mobilization Notice in
compliance with the foregoing or fails to obtain the consents, permits and
authorizations in accordance with Section 3.1, in either case at least fourteen
(14) days prior to Lease termination, or if this Agreement terminates prior to
Burnett assigning the Assigned Interests to Standard, Burnett shall promptly
reimburse Standard for all actual, out of pocket Well Costs.
 

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2.3 Return of Cash Consideration. Burnett shall promptly return the Cash
Consideration to Standard if Burnett breaches this Agreement, including without
limitation failing to obtain all necessary consents, permits and authorizations
in accordance with Section 3.1, failing to deliver the Assignment upon
completion of the Earning Well in accordance with Section 8, or breaching at any
time during this Agreement its warranty of title set forth in Section 5.3 and
the Assignment.
 
3. Earning Well.
 
3.1 Consents and Authorizations. Burnett shall obtain, in form and substance
satisfactory to Standard, acting reasonably, the consents and authorizations
described below that are necessary to permit Standard to have the right to, at
its sole cost through the on-lease tie-in point to a gathering pipeline that
will transport the gas from the Leases to a third party gathering or sales
pipeline, drill, complete, and equip one (1) well substantially at the location
and in accordance with the drilling program and the specifications set forth in
Exhibit E (the “Earning Well”), to receive the Assignment, and to further assign
all or part of its interest to Calibre Energy, Inc. (“Calibre”), as follows:
 
(a) drilling permit or any other necessary permit, any consent to build the
drillsite location, clear title for drilling purposes, proof of surface damage
payment, proof of drilling water payment and proof of permission from Johnson
County to access county roads; and

(b) all necessary consents to the Assignment (and further assignment to Calibre)
including any consents by the lessors under the Leases.
 
3.2 Costs for the Earning Well. If any Well Costs are incurred with respect to
any matter (including but not limited to facilities, equipment, improvements,
roads, permits, surveys, or opinions) that is subsequently used in connection
with any well or operation on the Leases other than the Earning Well, Burnett
shall promptly reimburse Standard for its appropriate working interest
percentage of the Well Costs attributable to such matter.
 
3.3 Drilling Well as Consideration/No Obligation. Nothing in this Agreement
shall be construed as obligating Standard to drill or complete the Earning Well,
or any well, it being acknowledged and agreed that drilling and completion of
the Earning Well constitutes performance consideration from Standard (in
addition to the Cash Consideration) for the Assigned Interests and Standard
shall have no liability, and Burnett shall release and indemnify Standard from
any such liability, for failing to drill and complete the Earning Well, or any
well. If Standard elects to drill and complete the Earning Well, Standard shall
consult with Burnett regarding the technical aspects of drilling and completing
the Earning Well.
 

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4. Standard’s Representations and Warranties. Standard hereby represents and
warrants as follows:
 
4.1 Standard is a corporation duly organized and validly existing under the laws
of Nevada. Standard is qualified to conduct business in each jurisdiction where
necessary to perform this Agreement.
 
4.2 Standard has full power and authority to execute and perform this Agreement
and the Assignment.
 
4.3 Standard has the financial assets and capability to meet its financial
obligations under this agreement.
 

 
5. Burnett’s Representations and Warranties. Burnett hereby represents and
warrants as follows:
 
5.1 Burnett is a general partnership duly organized and validly existing under
the laws of Texas. Burnett is qualified to conduct business in each jurisdiction
where necessary to perform this Agreement.
 
5.2 Burnett has full power and authority to execute and perform this Agreement
and to execute and deliver the Assignment.
 
5.3 The Leases are in full force and effect, and neither Burnett nor any other
person is in breach or default thereunder (or with the giving of notice or lapse
of time or both, would be in breach or default). Burnett owns the Leases free
and clear of any liens, mortgages, security interests, charges, pledges,
restrictions, ownership rights of third persons, or other defects or
encumbrances of any kind or character except for the terms and conditions of the
Leases. Burnett is (i) entitled to receive not less than 80% of all Hydrocarbons
produced, saved and marketed from the Leases or any Wells thereon or lands
covered thereby, all without reduction, suspension or termination of such
interest throughout the duration of the life of such Leases and Wells, and (ii)
obligated to bear not more than 100% of the costs and expenses relating to the
maintenance, development and operation of such Leases and any Wells, without
increase throughout the duration of the life of such Leases or Wells.
 

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6. Indemnification.
 
6.1 Standard’s Personnel. Standard shall release, Defend, indemnify, and hold
harmless Burnett Group from and against any and all Losses arising out of the
bodily injury or death, or property damage or loss, of any of Standard’s
contractors (but in no event including Burnett), representatives, employees,
agents or invitees (or the representatives, employees, agents or invitees of
such contractors), arising out of, related to or in connection with Drilling
Operations, REGARDLESS OF WHETHER CAUSED OR CONTRIBUTED TO BY THE SOLE, JOINT OR
CONCURRENT NEGLIGENCE, STRICT LIABILITY OR OTHER FAULT OF ANY MEMBER OF BURNETT
GROUP, OR A PREEXISTING CONDITION.

6.2 Burnett’s Personnel. Burnett shall release, Defend, indemnify, and hold
harmless Standard Group from and against any and all Losses arising out of the
bodily injury or death, or property damage or loss, of any of Burnett’s
contractors (but in no event including Standard), representatives, employees,
agents or invitees (or the representatives, employees, agents or invitees of
such contractors), arising out of, related to or in connection with Drilling
Operations, REGARDLESS OF WHETHER CAUSED OR CONTRIBUTED TO BY THE SOLE, JOINT OR
CONCURRENT NEGLIGENCE, STRICT LIABILITY OR OTHER FAULT OF ANY MEMBER OF STANDARD
GROUP, OR A PREEXISTING CONDITION.

6.3 Insurance Support/Limitation. The mutual indemnity obligations in
Sections 6.1 and 6.2 above shall be supported by insurance provided by the
Parties in equal amounts, of the types described in Exhibit F. Notwithstanding
anything in this Agreement to the contrary, (i) in the event enforcement of
Sections 6.1 and/or 6.2 above is governed by the Texas Anti-Indemnity Statute
(Tex. Civ. Prac. & Rem. Code Ann. §§127.001-127.007 (1986 & Supp. 1996) as
amended) or similar statute in another jurisdiction, and (ii) to the extent the
indemnified losses under such Section 6.1 or 6.2, as applicable, result from the
indemnitee’s negligence, then the obligations of the indemnitor under such
Section 6.1 or 6.2, as applicable, shall be limited to the extent of insurance
required pursuant to this Section 6.3 (or any such greater amount allowed by
law).

6.4 Standard’s Property. Standard shall release, Defend, indemnify, and hold
harmless Burnett Group from and against any and all Losses arising out of the
damage or loss of (or patent or license infringement resulting from the use of)
Standard Group’s property, including the Drilling Rig (collectively, “Standard’s
Property”) arising out of, related to or in connection with Drilling Operations,
REGARDLESS OF WHETHER CAUSED OR CONTRIBUTED TO BY THE SOLE, JOINT OR CONCURRENT
NEGLIGENCE, STRICT LIABILITY OR OTHER FAULT OF ANY MEMBER OF BURNETT GROUP, OR A
PREEXISTING CONDITION.

6.5 Burnett’s Property. Burnett shall release, Defend, indemnify, and hold
harmless Standard Group from and against any and all Losses arising out of the
damage or loss of (or patent or license infringement resulting from the use of)
Burnett Group’s property arising out of, related to or in connection with
Drilling Operations, REGARDLESS OF WHETHER CAUSED OR CONTRIBUTED TO BY THE SOLE,
JOINT OR CON-CUR-RENT NEGLIGENCE, STRICT LIABILITY, OR OTHER FAULT OF ANY MEMBER
OF STANDARD GROUP, OR A PREEXISTING CONDITION.
 

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6.6 Indirect or Consequential Damages. The Parties waive and release all claims
against the other Party for indirect or consequential damages arising out of
this Agreement or Drilling Operations, REGARDLESS OF WHETHER CAUSED OR
CONTRIBUTED TO BY THE SOLE, JOINT OR CONCURRENT NEGLIGENCE OR STRICT LIABILITY
OF THE OTHER PARTY, OR A PREEXISTING CONDITION. As used herein, “indirect or
consequential damages” shall include, but not be limited to, loss of revenue,
profit or use of capital, production delays, loss of product, reservoir loss or
damage, losses resulting from failure to meet other contractual commitments or
deadlines and downtime of facilities.

6.7 No Limit. Except as otherwise provided herein, the foregoing indemnity
obligations shall not be limited to the amount of insurance carried by the
Parties.

6.8 Ownership Indemnity. Upon execution and delivery of the Assignment, but
subject to Burnett’s indemnity obligation below and the JOA, Standard agrees to
indemnify, release, Defend and hold harmless Burnett Group from and against any
and all Losses caused by, arising from, attributable to, or alleged to be caused
by, arising from or attributable to the ownership or operation of the Assigned
Interests and arising from and after the Effective Time. Upon execution and
delivery of the Assignment, Burnett agrees to indemnify, release, Defend and
hold harmless Standard Group from and against any and all Losses caused by,
arising from, attributable to, or alleged to be caused by, arising from or
attributable to the ownership or operation of the Assigned Interests and arising
prior to the Effective Time.

6.9 Indemnified Groups. The provisions of this Section 6 shall extend to and be
enforceable by and for the benefit of the members of Burnett Group and Standard
Group.

7. Insurance. During Drilling Operations, Standard shall carry insurance in the
amounts and of the types set forth in Exhibit F.
 
8. Assignment. Promptly upon installation of the Christmas tree for the Earning
Well, Burnett shall execute and deliver the Assignment to Standard (or its
designee).
 
9. JOA and Subsequent Drilling.
 
9.1 JOA. Upon execution and delivery of the Assignment, the Parties shall cause
to be executed and delivered the JOA and appoint Burnett as operator thereunder.
 
9.2      Subsequent Drilling Operations. Standard shall have the right to submit
proposals for all future drilling operations with respect to the Leases.
Provided that Standard’s proposal includes financial terms no less favorable
than those offered by reputable third parties using comparable equipment and
crews, and provided that Burnett is satisfied with the quality and efficiency of
Standard’s equipment and crews, in its sole discretion, Burnett shall retain
Standard to conduct such drilling operations.
 

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10. Miscellaneous.
 
10.1  Confidentiality. The Parties agree that this Agreement and any financial
or technical information furnished or disclosed to a Party hereunder shall not
be disclosed or made available to any other Person without the prior written
consent of the other Party; provided that nothing herein shall limit the
disclosure of any such information (i) to the extent required by statute, rule,
regulation or judicial, administrative or regulatory process, (ii) to counsel
for the Parties, (iii) to auditors or accountants of the Parties, (iv) in
connection with any litigation to which the Party is a party, (v) to an
affiliate of the Party, and (vi) to a bona fide potential purchaser from the
Party. Notwithstanding the above restrictions, neither Party shall have any
obligation for any disclosure of confidential information that is, or becomes,
generally known to the public without breach of the terms of this Agreement. The
confidentiality obligations in this section shall survive termination of this
Agreement for one (1) year, whereupon they shall likewise terminate.
 
10.2 Relationship of Parties. The relationship of the Parties will be that of
independent contractors and will not be that of lender-borrower, partners, joint
venturers, principal and agent or employer and employee. Nothing herein shall be
construed to create a partnership. Accordingly, the Parties each herein disclaim
and waive any fiduciary duty that either of them may be argued to have to the
other. Neither Party has any authority whatsoever to, and neither Party shall:
(i) make any agreement, representation or warranty in the name of or on behalf
of the other Party; (ii) bind the other Party in any matter; (iii) act as the
agent or representative of the other Party; or (iv) assume, create or incur any
obligation or liability of any nature whatsoever, in the name of or on behalf of
the other Party whether by contract or otherwise. Nothing herein shall be
construed to (A) limit the right of the Parties to independently pursue other
business opportunities, whether of a similar or dissimilar nature to those
involved in this agreement, or (B) create any right or option of either Party to
participate in such independent business opportunities of the other Party.
 
10.3 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas other than such laws that would
apply the laws of another jurisdiction.
 
10.4 Force Majeure. The Parties shall be relieved of their respective
obligations (other than their obligations to pay or repay the Cash Consideration
and Burnett’s obligation under Section 3.1) under this Agreement to the extent
that the performance thereof is prevented by Force Majeure. The Party claiming
it is prevented from performing an obligation hereunder as a result of Force
Majeure shall give notice thereof to the other Party as soon as practicable
after the commencement thereof and shall exercise reasonable diligence to
overcome such Force Majeure and resume performance; provided, however, that the
settlement of any labor dispute to prevent or end any such Force Majeure shall
be within the sole discretion of the claiming Party.
 
10.5 Interpretation. As used herein, “include” or “including” shall be deemed to
mean including without limitation. Headers are inserted for convenience only and
shall not be deemed to affect the meaning of this Agreement. This Agreement
shall not be construed for or against any Party on the grounds that such Party
was the drafter of this Agreement, it being acknowledged and agreed that this
Agreement was mutually drafted by the Parties.
 
10.6 Entire Agreement. This Agreement and all Exhibits hereto embody the final,
entire agreement between the Parties hereto and supersedes any and all prior
commitments, agreements, representations, and understandings, whether written or
oral, relating to the subject matter hereof.
 
10.7 Assignability. No Party shall assign, transfer or otherwise dispose of any
of its rights or obligations hereunder, without the consent of the other Party;
provided, however, that Standard may assign the right to acquire the Assigned
Interest hereunder to any of its affiliates designated for such purpose.
 
10.8 Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original instrument, but all which shall
constitute but one Agreement.
 

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IN WITNESS WHEREOF the Parties have executed this Agreement as of the date first
indicated above.

 

 
BURNETT OIL COMPANY
     
By: Burnett Oil Co., Inc., its Managing General Partner
     
By:
 
Name:
 
Title:
     
STANDARD DRILLING, INC.
 
 
By:
 
Name:
 
Title:
   

 
 

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EXHIBIT A
LEASES
 
 
 
 

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EXHIBIT B
FORM OF ASSIGNMENT 

ASSIGNMENT, BILL OF SALE AND CONVEYANCE

THIS ASSIGNMENT, BILL OF SALE AND CONVEYANCE (this “Assignment”), effective as
of 7:00 a.m. local time on _______________, 2006 (the “Effective Time”), is made
from Burnett Oil Company, a Texas general partnership, whose address is 801
Cherry Street, Unit #9, Burnett Plaza, Suite 1500, Fort Worth, Texas 76102-6881
(hereinafter called “Assignor”) to [Standard Drilling, Inc. or its designee], a
Nevada corporation, whose address is 1155 Dairy Ashford St., Suite 402, Houston,
Texas 77079 (hereinafter called “Assignee”).

ARTICLE I
GRANTING AND HABENDUM CLAUSES

For good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, Assignor does hereby grant, bargain, sell, transfer,
convey, set over, assign and deliver unto Assignee an undivided 60% of 8/8
interest in and to the following assets (collectively, such interests in such
assets are referred to as the “Assigned Interests”):

(a)  the oil and gas leases described in Attachment A (collectively the
“Leases”), including, without limitation, all overriding royalty interests and
working interests therein;

(b) the oil and gas wells located upon the lands covered by the Leases or pooled
or unitized therewith including the well described in Attachment A
(collectively, the “Wells”);

(c) all platforms, water source wells, injection wells, tubular goods, well
equipment, lease equipment, production equipment, pipelines and all other
personal property, fixtures and facilities appurtenant to or used in connection
with the Leases or the Wells (collectively the “Facilities”);

(d) all oil, gas, distillate, condensate, casinghead gas or other liquid or
vaporous hydrocarbons, or other minerals (collectively, the “Hydrocarbons”),
produced from or attributable to the Leases from and after the Effective Time,
and all Hydrocarbons produced prior to the Effective Time and in storage as of
the date hereof;

(e) all production sales contracts, transportation agreements, pooling
agreements, unitization agreements, operating agreements, processing agreements,
surface leases, office or building leases, easements, permits, licenses and
rights-of-way, orders of governmental authorities, and all other contracts,
agreements and instruments related to or utilized in connection with the Leases,
Wells, Facilities, or the production, storage, treatment, transportation, sale
or disposal of Hydrocarbons or other substances therefrom (the “Contracts”); and
 

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(f) copies of all of Assignor’s files, records and data regarding the Leases,
Wells and Facilities including without limitation, all abstracts of title, title
opinions, title curative documents, title records, leases, assignments,
contracts, correspondence, geologic, geophysical and seismic records, data and
information, and production records, logs, core data, pressure data and decline
curves, production curves accounting records and all related items (the
“Files”);

TO HAVE AND TO HOLD the Assigned Interests unto Assignee and its successors and
assigns, forever.

ARTICLE II
WARRANTY

2.1 Warranty. Assignor hereby binds itself, its successors and assigns, subject
to the terms of the Leases, to warrant and forever defend all and singular the
Assigned Interests unto Assignee against every person whosoever lawfully
claiming or to claim the same by, through or under Assignor but not otherwise.
Assignor does further bind and obligate itself and its successors and assigns to
warrant and forever defend unto Assignee, its successors and assigns, against
all persons lawfully claiming or to claim the same or any part thereof by,
through or under Assignor, but not otherwise, that, as a result of the
conveyance of the Assigned Interests pursuant to this Assignment and pursuant to
the foregoing warranty, Assignee is and will be (i) entitled to receive not less
than 48% (being 60% of 80% of 8/8) of all Hydrocarbons produced, saved and
marketed from the Leases or any wells thereon or lands covered thereby, all
without reduction, suspension or termination of such interest throughout the
duration of the life of such Leases and Wells; and (ii) obligated to bear not
more than 60% of the costs and expenses relating to the maintenance, development
and operation of such Leases or Wells, without increase throughout the duration
of the life of such Leases or Wells.

2.2 Subrogation. Assignor hereby transfers and assigns unto Assignee, its
successors and assigns, all of its right, title and interest under and by virtue
of all covenants and warranties pertaining to the Assigned Interests, express or
implied (including, without limitation, title warranties and manufacturers,’
suppliers’ and contractors’ warranties), that have heretofore been made by any
of Assignor’s predecessors in title, or by any third party manufacturers,
suppliers and contractors. This Assignment is made with full substitution and
subrogation in and to all of the covenants and warranties that Assignor has or
may have against predecessors in title and with full subrogation of all rights
accruing under the applicable statutes of limitations and all rights and actions
of warranty against all former owners of the Assigned Interests.

2.3 Disclaimers. All tangible equipment and personal property included in the
Assigned Interest is sold “AS IS, WHERE IS” AND ASSIGNOR MAKES NO, AND DISCLAIMS
ANY, REPRESENTATION OR WARRANTY, WHETHER EXPRESSED OR IMPLIED, AND WHETHER BY
LAW, STATUTE OR OTHERWISE, AS TO FITNESS FOR ANY PARTICULAR PURPOSE,
MERCHANTABILITY, CONFORMITY OF MODELS OR SAMPLES OF MATERIALS, AND PHYSICAL
CONDITION. Assignor and Assignee agree that to the extent required by applicable
law to be operative, the disclaimers of certain warranties contained in this
paragraph are conspicuous. Nothing in this Section 2.3 shall impair the warranty
of title given by Assignor in Section 2.1 hereof.

ARTICLE III
MISCELLANEOUS

3.1 Further Assurances. Assignor covenants and agrees to execute and deliver to
Assignee all such other and additional conveyances, instruments and other
documents and to do all such other acts and things as may be necessary to more
fully vest in Assignee record title to all of the Assigned Interests herein
granted or intended to be granted, and to put Assignee in actual possession
thereof.

3.2 Assumption. Assignee expressly assumes all of Assignor's obligations
relating to the Assigned Interests but only insofar as same arise and are
attributable to periods of time from and after the Effective Time.

3.3 Counterparts. This Assignment may be executed in any number of counterparts,
and each counterpart hereof shall be deemed to be an original instrument, but
all such counterparts together shall constitute but one conveyance.

3.4 Successors and Assigns. This Assignment shall bind and inure to the benefit
of Assignor and Assignee and their respective successors and assigns.

Executed this ___ day of _________________, 2006, but effective for all purposes
as of the Effective Time.

     
ASSIGNOR:
     
Burnett Oil Company
     
By: Burnett Oil Co., Inc., its Managing General Partner
     
By:
 
Name:
 
Title:
   
 
   
ASSIGNEE:
 
[Standard Drilling, Inc. or its designee]
     
By:
 
Name:
 
Title:

 

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ACKNOWLEDGMENT

State of Texas      §
 
County of _________   §

This instrument was acknowledged before me on ________(date) by __________(name
of officer), ________ (title of officer), on behalf of Burnett Oil Co., Inc., as
Managing General Partner of Burnett Oil Company .
 

(SEAL)
 
 
   
(Signature of Officer)
 
 
(Title of Officer)

 

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ACKNOWLEDGMENT

State of Texas  §
 
County of _________ §

This instrument was acknowledged before me on ________(date) by __________(name
of officer), ____________(title of officer), of [Standard Drilling, Inc. or its
designee], a ________________ corporation, on behalf of said corporation.
 

(SEAL)
 
 
   
(Signature of Officer)
 
 
(Title of Officer)

 

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ATTACHMENT A TO ASSIGNMENT
LEASES/WELL
 

 

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EXHIBIT C
DRILLING RIG
 
 

 

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EXHIBIT D
FORM OF JOINT OPERATING AGREEMENT
[To be attached]

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EXHIBIT E
DRILLING PROGRAM AND WELL SPECIFICATIONS
 

 

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EXHIBIT F
INSURANCE

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