E.B. Germany & Sons, LLC

Exhibit 10.1

March 16, 2010

Shane Broesky

Lux Energy Corporation

2562C  Main Street

West Kelowna, BC V4T2N5

CANADA

RE:

Participation Letter Agreement

Dear Mr. Broesky:

This letter shall evidence an agreement between E.B. Germany & Sons, LLC
(hereinafter referred to as “Germany”), and Lux Energy Corporation (hereinafter
referred to as “Participant”), with respect to the drilling of a well on lands
included within the area designated on Exhibit “A” attached hereto and made a
part thereof. Said area is subject to those oil, gas and mineral leases
(“Subject Leases”) described on Exhibit “B” attached hereto and made a part
hereof.

It is agreed as follows:

1.

Subject to obtaining the requisite approvals and permits necessary to proceed,
Germany or its designated operator, shall on or before March 31, 2010, commence
or cause to be commenced, operations for the drilling of a well (The “Initial
Test Well”) within the area designated on Exhibit “A”. Thereafter, Germany shall
continue such operations in a good and workmanlike manner in accordance with
current industry standards to a depth of 10,800 feet below the surface of the
ground or to a depth sufficient to test the C sand of the lower Tuscaloosa
formation, whichever shall be first encountered (“Contact Depth”), unless
granite or other practically impenetrable substance is encountered at a lesser
depth in which event a well shall be drilled in substitute thereof (“Substitute
Well”). All terms and provisions provided for herein for the Initial Well shall
apply to the "Substitue Well”. Said well shall be drilled so as to comply fully
with the Regulations of the State of Mississippi and the requirements of the
Subject Leases and any agreements relating thereto.

2.

At such time as the Initial Well has been drilled to Contract Depth and has been
logged and tested (if required) in accordance with industry standards
(hereinafter referred to as “Casing Point”), Germany shall notify Participant
whether it recommends a completion attempt and its recommended completion
procedure. Participant shall have twenty-four (24) hours within which to accept
or reject Germany’s recommendation. Failure to respond shall be deemed an
election to accept the Operator’s recommendation to set production casing or
plug and abandon the well.

3.

Participant shall pay to E.B. Germany & Sons, LLC:

A.

Contemporaneous with the execution of this Letter Agreement, Participant agrees
to pay to Germany the Sum of $13,330 representing Participant’s proportionate
share of all costs attributable to leases, geological and geophysical, road and
location, drilling said well to the point of setting production casing or
through abandonment.

B.

Within five (5) days of receipt of Operator’s invoice, Participant agrees to pay
the estimated cost to complete the Initial Well as a commercial producer,
including the cost of tank batteries, flow lines and other production facilities
(“Completion Costs”). Failure to do so shall result in Participant forfeiting
and relinquishing all of its rights, title and interest in and to the Initial
Well, its production unit and the Subject Leases subject to the terms and
conditions of the Operating Agreement attached hereto marked Exhibit “C”.

4.

At such time as Participant has paid its Proportionate Share of Dry Hole and
Completion Costs as provided above in 3.a., 3.b., and 3.c., Germany shall assign
to Participant an undivided 1 % of 8/8ths Working Interest in and to the Subject
Leases and all leasehold equipment. Said assignment shall deliver to 100% of the
Working Interest a net revenue of seventy-five percent (75%). Such assignment
shall be without warranty of title, expressed or implied, but with transfer and
subrogation of rights and action of warranty which Germany may have against
prior owners.

Dallas, Texas Office

 

Jackson, Mississippi Office

Post Office Box 670218

 

Post Office Box 5198

Dallas, Texas 75367

 

Jackson, Mississippi 39296

Phone: 214-365-9550

 

Phone: 601-969-6090

Fax: 214-365-9555

 

Fax: 601-969-6094

--------------------------------------------------------------------------------

E.B. Germany & Sons, LLC

5.

An “Area of Mutual Interest” shall exist as to any acreage within the boundaries
of the area depicted on the Exhibit “A”. Should any acreage be acquired within
the Area of Mutual Interest, Participant shall have the opportunity to
participate in said acquisition as per the terms of said Operating Agreement.

6.

E.B. Germany & Sons shall serve as Operator. The Parties hereto agree to enter
into an Operating Agreement in form attached hereto, marked Exhibit “C”. At all
times during the drilling and completion of the Initial Well the designated
operator shall require the drilling contractor to maintain in full force and
effect insurance in type and amounts customary in the industry for wells similar
to the Initial Well.

7.

Germany shall furnish to Participant a copy of the location plat, daily drilling
reports, copies of all logs, core analysis and report and tests. Participant
shall have free access to the drillsite and derrick floor at its own risk.
Participant shall be given sufficient notice so that its representative may be
present to witness any coring, logging, testing or completion attempts.

If Participant or Participant’s representative is not present at the drillsite
or cannot be reached by telephone when any decision hereunder is required to be
made, Participant appoints Germany to act as Participant’s agent and shall abide
by its decision.

8.

Any notice to be given between the parties under terms of this agreement shall
be conclusively taken as sufficient when given by telephone, (to be confirmed in
writing within twenty-four hours) telephone facsimile, electronic mail,
telegram, Federal Express or United States Mail, certified and postage prepaid,
addressed to the proper party. Any party hereto may, by such notice, change its
address or telephone number. The addresses and telephone number of the parties
and their representatives for the purpose thereof are:

Germany:

E.B. Germany & Sons, LLC

N. Forrest Germany

P.O. Box 5198

601.969.6090 (Phone)

Jackson, MS  39296

601.969.6094 (Fax)

Participant:

Lux Energy Corporation

2562C  Main Street

West Kelowna, BC V4T2N5

CANADA

780.669.0936 (Office Phone)

780.628.3490 (Office Fax)

780.940.9474 (Mobile)

9.

All operations hereunder shall comply with all Federal and State laws, rules and
regulations applicable to such operations. In addition, this agreement, and its
application or interpretation, shall be governed by the laws of the United
States of America and the State of Mississippi. Venue for any action arising
hereunder shall lie in Hinds County, Mississippi.

10.

It is hereby understood and accepted by Participant that participation in this
drilling prospect involves significant financial risk and is highly speculative.
Participant represents that it is familiar with and understands the terms, risks
and merits of participation in this prospect.

11.

It is not the purpose or intention of this agreement to create a joint venture,
mining partnership or other relationship whereby the parties are held liable for
the acts or omissions of each other. In the event that Section 761 of the
Internal Revenue Code of 1986 should be so construed as to constitute these
joint operations as a partnership for federal tax purposes, we each hereby elect
to be excluded from the application of Subchapter K of Chapter 1 Subtitle A of
such code.

Dallas, Texas Office

 

Jackson, Mississippi Office

Post Office Box 670218

 

Post Office Box 5198

Dallas, Texas 75367

 

Jackson, Mississippi 39296

Phone: 214-365-9550

 

Phone: 601-969-6090

Fax: 214-365-9555

 

Fax: 601-969-6094

--------------------------------------------------------------------------------

E.B. Germany & Sons, LLC

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Dallas, Texas Office

 

Jackson, Mississippi Office

Post Office Box 670218

 

Post Office Box 5198

Dallas, Texas 75367

 

Jackson, Mississippi 39296

Phone: 214-365-9550

 

Phone: 601-969-6090

Fax: 214-365-9555

 

Fax: 601-969-6094