CONVEYANCE OF OVERRIDING ROYALTY INTEREST
 
For a good and valuable consideration, the receipt of which is hereby
acknowledged, Sonterra Resources, Inc., a Delaware corporation, with principal
offices located at 523 North Sam Houston Parkway East, Suite 175, Houston, Texas
77060 (“Grantor”), does hereby grant, bargain, sell, transfer, assign and convey
to Longview Marquis Master Fund, L.P. (“Grantee”), a British Virgin Island
limited partnership, whose address is c/o Summerline Asset Management LLC, 70
West Red Oak Lane, 4th Floor, White Plains, New York 10604, Attention: Robert
Brantman, an overriding royalty interest (the “Overriding Royalty”) equal to
three percent (3%) of the Applicable Percentage (defined below) of the oil, gas
and other minerals in, under and that may be produced from the lands (a)
described in Exhibit “A” attached hereto and made a part hereof or (b) covered
by the oil and gas leases described in such Exhibit “A” (collectively the
“Subject Lands”), commencing at the Effective Time (defined below) and at all
times thereafter. As used herein, the terms (i) “Subject Leases” refers to the
oil and gas leases described in Exhibit “A”, (ii) “Working Interest” and “WI”
mean the cost bearing percentage interest that the owner thereof must bear
relative to 100% of all costs to explore, develop, and produce oil and/or gas
from the applicable portion of the Subject Lands, and (iii) “Applicable
Percentage” shall mean, with respect to each portion of Subject Lands identified
on Exhibit “A”, the percentage set forth on such Exhibit “A” as the “Working
Interest” or “WI” for such portion of the Subject Lands.
 
It is understood and agreed that though the Overriding Royalty is conveyed by
Grantor to Grantee out of Grantor's interest (such interest, subject to the
Overriding Royalty, being herein called the “Burdened Interest”) in the Subject
Leases insofar as they cover Subject Lands, such Overriding Royalty shall be
equal to three percent (3%) of the Applicable Percentage of the oil, gas and
other minerals in, under and that may be produced from the Subject Lands (the
“ORRI Percentage”), commencing at the Effective Time and at all times
thereafter, and the ORRI Percentage shall not be reduced by Grantor to less than
3% of the Applicable Percentage for any reason, including, without limitation,
the same shall not be reduced if the Working Interest of Grantor in a Subject
Lease is less than the Working Interest stated on Exhibit “A” with respect to
such Subject Lease or that portion of the Subject Lands covered by such Subject
Lease, or if the interest in oil, gas and other minerals underlying any portion
of the Subject Lands which is covered by a particular Subject Lease (or group of
Subject Leases) is less than the entire interest in the oil, gas and other
minerals underlying such portion of the Subject Lands, or if the share of
production from any portion of Subject Lands to which Grantor is entitled by
virtue of its ownership interest in the Subject Leases is less than the
Applicable Percentage set forth on Exhibit “A” for such portion of the Subject
Lands.
 
TO HAVE AND TO HOLD the Overriding Royalty unto Grantee, its successors and
assigns forever. The Overriding Royalty herein conveyed, and the Burdened
Interest of Grantor, shall be subject to the following provisions:

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1. Grantor shall have the obligation to market, or cause to be marketed, the
oil, gas and other minerals produced from the Subject Lands and attributable to
the Overriding Royalty (the “ORRI Hydrocarbons”) on behalf of and for the
account of Grantee in arm's-length transactions with reputable purchasers in
accordance with prudent business judgment, with each such sale to be: (i) upon
terms and conditions which are the best terms and conditions reasonably
available taking into account all relevant circumstances, including without
limitation, price, quality of production, access to markets or lack thereof,
minimum purchase guarantees, identify of purchaser and length of commitment,
(ii) upon terms and conditions at least as favorable as (a) Grantor obtains for
the share of oil, gas and/or other minerals attributable to the Burdened
Interest in the Subject Lands to which such sale relates, (b) Grantor obtains
for its interest in other oil, gas and/or other minerals which are of comparable
type and quality and which are produced in the same area as the Subject Lands to
which such sale relates, and (c) those obtained by any Affiliates (below
defined) of Grantor for oil, gas and/or other minerals produced from the Subject
Lands to which such sale relates or from lands in the same area, and (iii) made
to a party who is not an Affiliate of Grantor. As used herein, “Affiliate” shall
mean, with respect to any person or entity, another person or entity that,
directly or indirectly, (a) has an equity interest in that person or entity, (b)
has a common ownership with that person or entity, (c) controls that person or
entity, (d) is controlled by that person or entity or (e) shares common control
with that person or entity. “Control” or “controls” for purposes hereof means
that a person or entity has the power, direct or indirect, to conduct or govern
the policies of another person or entity. Grantor shall duly perform all
obligations performable by it under production sales contracts under which ORRI
Hydrocarbons are sold and shall take all appropriate measures to enforce the
performance under each such production sales contract of the obligations of the
other parties thereto.
 
2. Grantor does hereby represent and warrant to Grantee (i) that Grantor owns
the interests specified in Exhibit “A” hereto in and to the Subject Leases (and
Grantor has good and marketable title to such interests, free of liens and
encumbrances, except liens and encumbrances in favor of Summerline Asset
Management, LLC on its own behalf and in its capacity as collateral agent), (ii)
that Grantor has good right and authority to sell and convey the Overriding
Royalty, and (iii) that this Conveyance of Overriding Royalty Interest (“this
Conveyance”) vests in Grantee good and marketable title to the Overriding
Royalty free of any other liens and encumbrances not referenced in this
sentence. Grantor hereby covenants and agrees to use its reasonable best efforts
to rectify any defects in its title to the interests specified in Exhibit “A”
hereto, and otherwise to cause the foregoing representations and warranties to
be true and correct in all respects (without giving effect to the exception set
forth in the clause at the end of the immediately preceding sentence), to the
extent reasonably possible. Grantor hereby binds itself to warrant and forever
defend, all and singular, title to the Overriding Royalty unto Grantee, its
successors and assigns, against the claims and demands of all persons claiming
or to claim the same or any part thereof by, through or under Grantor. This
Conveyance is made with full substitution and subrogation of Grantee in and to
all covenants and warranties by others heretofore given or made.
 
3. Grantor shall be obligated to explore, develop, operate and maintain the
Burdened Interest as would a prudent operator. As to any portions of the
Burdened Interest as to which Grantor is not the operator, Grantor shall take
all such action and exercise all such rights and remedies as are reasonably
available to it to cause the operator to so explore, develop, maintain and
operate such portions of the Burdened Interest. Grantor shall promptly (and,
unless the same are being contested in good faith and by appropriate
proceedings, before the same are delinquent) pay all costs and expenses
(including all taxes and all costs, expenses and liabilities for labor,
materials and equipment incurred in connection with the Burdened Interests and
all obligations to the holders of royalty interests and other interests
affecting the Subject Leases) incurred in developing, operating and maintaining
the Burdened Interests.

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4. Grantor shall revise and supplement Exhibit “A” promptly upon any increase in
the Grantor’s Working Interest in the Subject Lands, by purchase or otherwise,
that occurs at any time prior to the date on which Grantor has repaid in full
all of the outstanding Notes (as defined in the Securities Purchase Agreement
dated November 13, 2008, between Grantor and Grantor, pursuant to which this
Conveyance was originally issued), to reflect such increase and to reflect the
accordingly increased “Applicable Percentage” pertaining to the Subject Lands.
For purposes of clarification, upon any increase in Grantor’s Working Interests
in the Subject Lands that occurs at any time prior to the date on which Grantor
has repaid in full all of the outstanding Notes, whether or not Exhibit “A” has
been updated in accordance with this Section 4, such increase in Working
Interests shall become subject to this Overriding Royalty and with respect to
that portion of the Subject Lands in which Grantor increases its Working
Interest, such increased Working Interest shall be the revised increased
“Applicable Percentage” for such portion of the Subject Lands; provided,
however, that the ORRI Percentage shall (i) always equal 3% of the Applicable
Percentage, as the same may be increased from time to time pursuant to this
Section 4, and (ii) with respect to each portion of Subject Lands identified on
Exhibit “A”, the amount of the Applicable Percentage, shall never be less than
the percentage set forth on such Exhibit “A” as the “Working Interest” or “WI”
for such portion of the Subject Lands, as the same may be increased from time to
time pursuant to this Section 4.
 
5. Grantee shall be entitled to receive payment for all ORRI Hydrocarbons
directly from the purchasers thereof or from other parties obligated to make
payment therefor. Grantor shall cause to be prepared and executed such division
orders, transfer orders, or instructions in lieu thereof, as Grantee (or any
third party) may require from time to time to cause payments to be made directly
to Grantee. In the event that, for any reason, Grantee cannot (or does not)
receive such payments directly, the same shall be collected by Grantor and shall
constitute trust funds in Grantor's hands and shall be immediately paid over to
Grantor. Grantee may also, at any time, and from time to time, at Grantee's
option, take all or any part of the ORRI Hydrocarbons in kind and all production
sales contracts entered into by Grantor covering ORRI Hydrocarbons shall be
subject to such right; during such time or times as Grantee is so taking ORRI
Hydrocarbons in kind Grantor's obligation to market the same, as provided above,
shall be suspended as to the ORRI Hydrocarbons so taken, but shall again become
effective where Grantee elects to cease such taking in kind.

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6. Grantor shall keep full, true, and correct records of the oil, gas, and other
hydrocarbons produced from or attributable to the Subject Lands each calendar
month, and the portion attributable to the Overriding Royalty. Such records may
be inspected by Grantee or its authorized representatives and copies thereof may
be made by Grantee at all reasonable times upon prior written notice from
Grantee to Grantor requesting such inspection and copying. Grantee shall also
have, upon request, access to review all reports, data and information relating
to the Subject Lands or to exploration, development, production and other
operations conducted on the Subject Lands. On or before the earlier of (a) the
fifth business day after Grantor’s first public disclosure, by issuance of a
press release or filing of a report with the Securities and Exchange Commission,
of Grantor’s production from the Subject Lands or other results of operations
for the most recently completed fiscal quarter or fiscal year, or (b) the last
day on which the Grantor can timely (without giving effect to any extensions of
time permitted by Rule 12b-25 under the Securities Exchange Act of 1934) file a
quarterly report on Form 10-Q or annual report on Form 10-K, as applicable, with
respect to such fiscal quarter of fiscal year, Grantor shall (a) deliver to
Grantee a statement (a “Production Statement”) setting forth (i) the production
from the Subject Lands for the most recently completed fiscal quarter, (ii) the
portion of such production attributable to the Overriding Royalty, (iii) to the
extent Grantee does not receive direct payment of proceeds from sale of ORRI
Hydrocarbons (or take ORRI Hydrocarbons in kind) pursuant to Section 5 above,the
gross proceeds (“ORRI Collected Proceeds”) attributable to the sale of ORRI
Hydrocarbons (and the taxes and other costs permitted to be deducted therefrom
under Section 7 below) during such fiscal quarter and (iv) such other data as
Grantee may reasonably request in such form as Grantee may reasonably request,
and (b) make a payment to Grantee of such ORRI Collected Proceeds (less such
costs permitted to be deducted therefrom under Section 7 below) in immediately
available funds by wire transfer (or such other form specified by Grantee) to
such bank or location as Grantee may direct from time to time in writing. No
Production Statement delivered to Grantee shall contain any information
regarding the production from the Subject Lands or reserves that has not been
publicly disclosed by Grantor or any other material non-public information. If
any Production Statement contains, or Grantor otherwise provides Grantee, any
information regarding aggregate production from the Subject Lands or reserves
that has not been publicly disclosed (or any other material non-public
information), Grantee shall have the right to make public disclosure of such
information and Grantee shall not have any liability to Grantor, any of its
subsidiaries or any of its or their respective officers, directors, employees,
shareholders or agents for any such disclosure. Grantor shall not publicly
disclose its results of operations for any fiscal quarter or fiscal year unless
it contemporaneously publicly discloses, or prior thereto has publicly
disclosed, the production from the Subject Lands for the most recently completed
fiscal quarter.

7. The Overriding Royalty shall be free of all costs, expenses, and liabilities,
of whatever kind or character, except the Overriding Royalty shall bear its
proportionate share of the costs charged to Grantor by a third party (not an
Affiliate of Grantor) for compression, dehydration and transportation that are
incurred between the first point of receipt of production by such third party
and the redelivery of such compressed and dehydrated production to Grantor.
Specifically, but not by way of limitation, the Overriding Royalty shall never
bear, either directly or indirectly, any costs, expenses or liabilities for
building, constructing, acquiring, drilling, developing, producing, operating,
gathering, separating, trucking, or transporting (except as set forth in the
first sentence of this Section 7) or any post production expenses, related or
pertaining to the Subject Lands, Subject Leases, or wells, pipelines, or other
facilities or improvements situated on the Subject Lands or lands pooled
therewith, or production of oil and/or gas from the Subject Lands or lands
pooled therewith; provided, however, the Overriding Royalty shall bear its
proportionate share of (i) the third party costs identified in the first
sentence of this Section 7 and (ii) production, severance and similar taxes.

8. Grantor agrees to execute and deliver, and, to the extent it is within
Grantor's power to do so, to cause any third parties to execute and deliver, to
Grantee all such other and additional instruments and to do all such further
acts and things as may be necessary more fully to vest in and assure to Grantee
all of the rights, titles, interests, remedies, powers and privileges herein
granted or intended so to be.

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9. Exhibit “A” sets forth those certain portions, if any, of the Subject Lands
that have been pooled or unitized for the production of oil, gas and/or minerals
prior to the date hereof. With respect to each such existing pool or unit set
forth on such Exhibit “A”, and with respect to each pool or unit in which the
Overriding Royalty is included, as below provided, after the date hereof, the
Overriding Royalty in each portion of Subject Lands included in such pool or
unit shall apply to the portion of production from such pool or unit which is
attributable to such portion of Subject Lands under and by virtue of the
applicable pooling and unitization agreements, designations and/or orders. From
and after the date hereof, Grantor shall have the right and power to unitize or
pool in good faith on customary terms any portion or portions of the Overriding
Royalty with other lands in which the mineral interest thereof is owned by a
person or entity other than Grantor or an Affiliate of Grantor and on which is
located, or will be located, a well producing, or capable of producing, oil
and/or gas in commercially paying quantities (collectively “Third Party Lands”);
provided, however, Grantor shall not have the right and power to unitize or pool
any portion or portions of the Overriding Royalty with any non Third Party Lands
without first obtaining the prior written consent of Grantee. If pursuant to any
law, rule, regulation or order of any governmental body or official, any portion
of the Subject Lands is pooled or unitized in any manner, or if Grantee has
joined in or agreed to any pooling or unitization, the Overriding Royalty
insofar as it affects such portion of Subject Lands shall also be pooled and
unitized and, in each event, the Overriding Royalty shall apply to the
production which is attributable to such portion of Subject Lands under and by
virtue of such pooling and unitization arrangements.

10. Nothing herein contained shall in any way limit or restrict the right of
Grantee to sell, convey, assign or mortgage (or grant a deed of trust on) the
Overriding Royalty (including its rights, titles, interests, estates, remedies,
powers and privileges appurtenant or incident to the Overriding Royalty under
this Conveyance) in whole or in part. No change of ownership of the Overriding
Royalty shall be binding upon Grantor until Grantor is furnished with copies of
the original documents evidencing such change. Upon receipt by Grantor of copies
of the original documents evidencing a sale, conveyance, assignment or mortgage
(or grant of a deed of trust on) the Overriding Royalty, Grantor shall deal with
the purchaser or assignee in place of Grantee and shall deal with the mortgagee
(or the beneficiary of the deed of trust) in addition to the Grantee, and
references herein to the Grantee shall thereafter also be deemed to be
references to such purchaser, assignee or mortgagee (or the beneficiary of the
deed of trust).

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11. If the Grantor proposes or intends to make any sale, transfer or other
disposition of all or any portion of its Burdened Interest, including without
limitation a proposed or intended sale, transfer or disposition of its Burdened
Interest by merger, reorganization, consolidation, or by sale of all or
substantially all of its assets (other than a sale, transfer or other
disposition to a directly or indirectly wholly-owned subsidiary of Grantor), and
such sale, transfer or other disposition will result in Grantor owning less than
a fifty percent (50%) Working Interest in such Burdened Interest and/or
resigning as operator of such Burdened Interest, Grantor shall so inform Grantee
by notice in writing (the “Transfer Notice”) describing the interest (or portion
thereof) that is the subject of such proposed or intended sale, transfer or
disposition (the “Offered Interest”), and the other pertinent and reasonable
details of such proposed or intended sale, transfer or disposition. Grantee
shall thereupon have fifteen (15) days after receipt of the Transfer Notice to
notify Grantor in writing that Grantee desires to participate in such sale,
transfer or disposition and contribute the Overriding Royalty, or some portion
thereof, as a part of the properties to be covered by such sale, transfer or
disposition. Failure of Grantee to notify Grantor in writing that Grantee
desires to participate in such sale, transfer or disposition within such fifteen
(15) day period shall be deemed an election by Grantee not to participate. If
Grantee does timely submit its notice to Grantor (i) the Burdened Interest, or
portion thereof that is to be covered by such sale, transfer or disposition,
shall not be sold or disposed of separate and apart of the Overriding Royalty
(or portion thereof as designated by Grantee in its notice) and (ii) Grantor and
Grantee shall mutually agree upon the price or value that Grantee shall receive
upon conclusion of such sale, transfer or disposition for the Overriding Royalty
(or portion thereof) that is to be a part of the properties covered by such
sale, transfer or disposition. In the event Grantor and Grantee cannot so
mutually agree, Grantor and Grantee shall retain the services of a petroleum
reservoir engineer experienced in the valuation of oil and gas properties
employed by Ryder Scott & Associates of Houston, Texas (or its successors in
interest) to serve as the sole arbiter of such disagreement (the “Arbiter”). In
the event Ryder Scott & Associates (or its successor in interest) is unwilling
or incapable of having one of its petroleum reservoir engineers serve as
Arbiter, then Grantor and Grantee shall mutually agree on the person to serve as
Arbiter, and in the event Grantor and Grantee cannot so mutually agree, the
selection of the Arbiter shall be made by a federal judge sitting in the
Southern District of New York in the borough of Manhattan, New York, New York,
upon petition filed by either Grantor or Grantee requesting that such selection
be made. The decision of the Arbiter as to such price or value Grantee shall
receive shall be delivered by the Arbiter within ten (10) days of his retention,
and shall be final as to Grantor and Grantee for all purposes. The costs of such
Arbiter shall be borne equally by Grantor and Grantee.

12. Grantor shall have the right without the joinder of Grantee to release,
surrender and/or abandon its Burdened Interest, or any part thereof, or interest
therein, even though the effect of such release, surrender or abandonment will
be to release, surrender or abandon the Overriding Royalty; provided, however,
that Grantor shall not release, surrender or abandon any Burdened Interest
unless and until Grantor has determined in good faith that such Burdened
Interest will no longer produce in paying quantities, and provided further that,
Grantor will, at least thirty (30) days prior to the release, surrender or
abandonment (unless a lesser period of time governing such release, surrender or
abandonment is provided for in an applicable operating agreement entered into by
and between Grantor and a person or entity that is not an Affiliate of Grantor,
in which case at least the number of days provided for in such lesser time
period) of any Burdened Interest, or any part thereof or interest therein,
notify Grantee (in writing, giving a description of each Burdened Interest, or
part thereof or interest therein, proposed to be released, surrendered or
abandoned, and the date upon which such release, surrender or abandonment is
projected to occur) and, if Grantee shall so request, Grantor shall assign to
Grantee the interests proposed to be released, surrendered or abandoned,
together with the interest attributable to the Burdened Interests in all
equipment located thereon or used in connection therewith; provided further
that, in the event of such an assignment from Grantor to Grantee, Grantee shall
pay to Grantor the salvage value of any equipment so conveyed by Grantor to
Grantee.

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13. Without prior written notice to Grantee providing Grantee with the
opportunity to acquire the affected interest of Grantor at no additional cost to
Grantee other than assumption by Grantee of the obligations of Grantor
pertaining to the affected interest, Grantor shall not elect to be a
non-participating party (whether pursuant to an operating agreement or other
agreement or arrangement, including without limitation, non-consent rights and
obligations imposed by statute and/or regulatory agency) with respect to any
drilling, deepening, plugging back, reworking, sidetracking or completion (or
other) operation on any Burdened Interest or elect to be an abandoning party
with respect to a well located on any Burdened Interest; provided, however, if
such direct acquisition by Grantee would be prohibited by the applicable
operating agreement or other agreement or arrangement and Grantee has timely
notified Grantor that Grantee elects to acquire such affected interest, Grantor
agrees to use reasonable commercial efforts to enter into a mutually
satisfactorily contractual arrangement with Grantee that would allow Grantee to
indirectly acquire such affected interest, or have the same economic
consequences of ownership of such affected interest, and not be in violation or
breach of such applicable operating agreement or other agreement or arrangement.
Grantor agrees to provide such prior written notice to Grantee as soon as is
reasonably possible in order to afford Grantee as much time as reasonably
possible to respond. Such prior written notice shall include information
advising Grantee of the time period required by the applicable operating
agreement, other agreement or arrangement for response on this matter, and
failure on the part of Grantee to notify Grantor of its election to acquire such
affected interest within such time period shall be deemed an election by Grantee
to not acquire such affected interest. Notwithstanding anything to the contrary
contained herein, Grantor shall not elect, as to any Burdened Interest, to be a
non-participating party with respect to any operation contemplated in this
Section 11 in the event Grantor or any Affiliate of Grantor will also be a
participating party in such operation.

14. The Overriding Royalty shall apply to all renewals, extensions and other
similar arrangements (and/or interests therein) of the Subject Leases insofar as
they cover Subject Lands. A new lease taken before the expiration of the
existing Subject Lease which it replaced or within one (1) year after expiration
of such Subject Lease, and covering the same interest (or any part thereof) that
was covered by the Subject Lease, shall be considered a renewal or extension for
the purposes hereof. Additionally, the Overriding Royalty shall continue in
force and effect and not be extinguished in the event Grantor acquires the
mineral estate covered by a Subject Lease and thereafter releases such Subject
Lease.

15, The agreements and obligations of Grantor in Sections 9, 11 and 13 above
shall not be covenants running with the land and shall be personal agreements
and obligations of Grantor and any Affiliate of Grantor that shall terminate
upon a sale, transfer or disposition of Grantor’s Burdened Interest to a third
party that is not an Affiliate of Grantor. All other covenants and agreements of
Grantor herein contained shall be deemed to be covenants running with the
Burdened Interest. All of the provisions hereof shall inure to the benefit of
Grantee and its successors and assigns.

16. All communications required or permitted to be given under this Conveyance
shall be in writing and shall be given by registered or certified mail, postage
prepaid or telecopy, or by personal service (including express or courier
service), and addressed to the addresses specified at the beginning of this
Conveyance (or to such other address or telecopy number as may be designated in
writing in accordance herewith). Notices shall be deemed given upon receipt.

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17. This Conveyance is being executed in several counterparts, all of which are
identical, except that, to facilitate recordation, in certain counterparts
hereof only that portion of Exhibit “A” which contains specific descriptions of
the Subject Lands located in the recording jurisdiction in which the counterpart
is to be recorded shall be included, and all other portions of Exhibit “A” shall
be included by reference only. Complete copies of this Conveyance containing the
entire Exhibit “A” have been retained by Grantor and Grantee. All of such
counterparts together shall constitute but one and the same instrument.

18. WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW, THIS CONVEYANCE SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE
OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN
SUCH STATE AND THE LAWS OF THE UNITED STATES OF AMERICA, EXCEPT THAT TO THE
EXTENT THAT THE LAW OF A STATE IN WHICH A PORTION OF THE OVERRIDING ROYALTY IS
LOCATED (OR WHICH IS OTHERWISE APPLICABLE TO A PORTION OF THE OVERRIDING
ROYALTY) NECESSARILY OR, IN THE SOLE DISCRETION OF GRANTEE, APPROPRIATELY
GOVERNS, WITH RESPECT TO PROCEDURAL AND SUBSTANTIVE MATTERS RELATING TO THE
CREATION, PERFECTION AND VESTING OF THE OVERRIDING ROYALTY, AND OTHER RIGHTS AND
REMEDIES OF THE GRANTEE GRANTED HEREIN, THE LAW OF SUCH STATE SHALL APPLY AS TO
THAT PORTION OF THE OVERRIDING ROYALTY LOCATED IN (OR WHICH IS OTHERWISE SUBJECT
TO THE LAWS OF) SUCH STATE. GRANTOR AND GRANTEE HEREBY IRREVOCABLY SUBMIT TO THE
EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY OF
NEW YORK, NEW YORK, BOROUGH OF MANHATTAN, FOR THE ADJUDICATION OF ANY DISPUTE
HEREUNDER OR IN CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY
OR DISCUSSED HEREIN, AND HEREBY IRREVOCABLY WAIVE, AND AGREE NOT TO ASSERT IN
ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO
THE JURISDICTION OF ANY SUCH COURT, THAT SUCH SUIT, ACTION OR PROCEEDING IS
BROUGHT IN AN INCONVENIENT FORUM OR THAT THE VENUE OF SUCH SUIT, ACTION OR
PROCEEDING IS IMPROPER. GRANTOR AND GRANTEE HEREBY IRREVOCABLY WAIVE PERSONAL
SERVICE OF PROCESS AND CONSENT TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION
OR PROCEEDING BY MAILING A COPY THEREOF TO SUCH PARTY AT THE ADDRESS SHOWN ABOVE
FOR SUCH PARTY, AND AGREE THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT
SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED
TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW.
THE PARTIES ACKNOWLEDGE THAT GRANTEE’S PRINCIPAL OFFICE IS IN THE STATE OF NEW
YORK AND GRANTEE HAS MADE PAYMENTS TO GRANTOR FROM ITS BANK ACCOUNT LOCATED IN
THE STATE OF NEW YORK. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY
HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY
DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS CONVEYANCE OR
ANY TRANSACTION CONTEMPLATED HEREBY.

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19. It is not the intent of the Grantor or Grantee that any provision herein
violate any applicable law regarding the rule against perpetuities, and this
Conveyance shall be construed as not violating such rule to the extent the same
can be construed consistent with the expressed intent of the Grantor and Grantee
as set forth in this Conveyance. In the event, however, that any provision of
this Conveyance is determined to violate such rule, then such provision shall
nevertheless be effective for the maximum period (but not longer than the
maximum period) permitted by such rule that will result in no such violation. To
the extent such maximum period is permitted to be determined by reference to
lives in being, Grantor and Grantee agree that “lives in being” shall refer to
the lifetime of the last to die of the now living lineal descendants of George
Herbert Walker Bush, 41st President of the United States of America.

IN WITNESS WHEREOF, this Conveyance is executed as of the date indicated below,
effective as of 7 o'clock a.m. local time at the locations of the Subject Lands,
respectively on November 13, 2008 (the “Effective Time”)

[signatures and acknowledgement pages to follow]

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“GRANTOR”
 
SONTERRA RESOURCES, INC.
 
By:
   
D. E. Vandenburg, President
   
“GRANTEE”
 
LONGVIEW MARQUIS MASTER FUND, L.P.
 
By: Viking Asset Management, LLC
Its: Investment Adviser
 
By:
 
Name: Peter T. Benz
Title: Chairman

STATE OF TEXAS                              )
                                                              ) ss:
COUNTY OF HARRIS                        )

The foregoing instrument was acknowledged before me on this ___ day of
_________, 2008, by D.E. Vandenburg, President of Sonterra Resources, Inc., a
Delaware corporation, as the act and deed and on behalf of said corporation.

     
Notary Public, State of Texas
   
[SEAL]
   
(printed name)

My commission expires:

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STATE OF                                            )
                                                                                
) ss:
COUNTY OF                                        )

The foregoing instrument was acknowledged before me on this ___ day of
___________, 2008, by Peter T. Benz, Chairman of Viking Asset Management, LLC,
as investment adviser to Longview Marquis Master Fund, L.P., a British Virgins
Island limited partnership, as the act and deed of such _____________ on behalf
of said limited partnership.

     
Notary Public, State and County of
[SEAL]
       
(printed name)

My commission expires:

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EXHIBIT “A”

Shark Prospect

 
1.
Oil and Gas Lease dated July 1, 2003, from the State of Texas, as Lessor, to
Cinco Natural Resources Corporation, as Lessee, covering Oil and Gas Lease No.
M-103194, being the South One-Half (S/2) of State Tract 150, Matagorda Bay,
Calhoun County, Texas, containing approximately 320.0 acres, recorded in File
No. 82095, Volume 349, Page 1 of the Official Records of Calhoun County, Texas.

 
Lease Interest:
 
Surface down to 9400' true vertical depth as seen in the Cockrell Corporation –
Aquamarine Unit Well No. 1 (API No. 42-057-31600).
 
72.80 WI / 57.512% NRI
 
Rights between 9401' and 50' below the stratigraphic equivalent of the top of
the 9800' Sand, said top of the 9800' Sand being equal to 9790' TVD as seen on
the electric log for the Cockrell Corporation – Aquamarine Unit Well No. 1 (API
No. 42-057-31600).
 
30.30% WI / 23.55825% NRI
 
Rights below 50' below the stratigraphic equivalent of the top of the 9800'
Sand, said top of the 9800' Sand being equal to 9790' TVD as seen on the
electric log for the Cockrell Corporation – Aquamarine Unit Well No. 1 (API No.
42-057-31600).
 
30.30% WI / 23.331% NRI
 
Well Interest:
 
Flash – State Tract 150 No. 1 Well, API No. 42-057-31770: 72.80% WI / 57.512%
NRI (Shut-In)
 
Flash – State Tract 150 No. 1 ST #1 Well, API No. 42-057-31770: 72.80% WI /
57.512% NRI (Sidetrack well scheduled for 4th Quarter 2008)
 
BOSS – State Tract 150 No. 2 Well, API No. 42-057-31692: 30.30% WI / 23.55825%
NRI (Current NRI)
 
Recompletion of the State Tract 150 No. 2 Well, API No. 42-057-31692, scheduled
in 2009 will be drilled by shallow owners only and Sonterra’s WI and NRI
percentages are as follows: 72.8% WI / 57.512% NRI (before a negotiated NPI to
deep interest owners).

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Ray Prospect

 
2.
Oil and Gas Lease dated October 19, 2004, from the State of Texas, by and
through the Commissioner of the General Land Office of the State of Texas, as
Lessor, to Cinco Natural Resources Corporation, as Lessee, covering Oil and Gas
Lease Number M-104265, being the South One-Half (S/2) of Tract 175, Matagorda
Bay, Matagorda and Calhoun Counties, Texas, containing approximately 320 acres
as shown on the applicable Official Submerged Area Map on file in the Texas
General Land Office, Austin, Texas, and recorded in the Official Records of
Matagorda County, Texas, as File No. 050427, and recorded in the Official
Records of Calhoun County, Texas, as File No. 91879, Volume 400, Page 525.

Lease Interest: 30.30% WI / 22.04325% NRI
 

 
3.
Oil and Gas Lease dated October 19, 2004, from the State of Texas, by and
through the Commissioner of the General Land Office of the State of Texas, as
Lessor, to Cinco Natural Resources Corporation, as Lessee, covering Oil and Gas
Lease Number M-104266, being the South One-Half (S/2) of Tract 178, Matagorda
Bay, Matagorda County, Texas, containing approximately 320 acres as shown on the
applicable Official Submerged Area Map on file in the Texas General Land Office,
Austin, Texas, and recorded in the Official Records of Matagorda County, Texas,
as File No. 050428.

Lease Interest: 30.30% WI / 22.04325% NRI
 

 
4.
Oil and Gas Lease dated October 19, 2004, from the State of Texas, by and
through the Commissioner of the General Land Office of the State of Texas, as
Lessor, to Cinco Natural Resources Corporation, as Lessee, covering Oil and Gas
Lease Number M-104267, being the North One-Half (N/2) of Tract 179, Matagorda
Bay, Matagorda County, Texas, containing approximately 320 acres as shown on the
applicable Official Submerged Area Map on file in the Texas General Land Office,
Austin, Texas, and recorded in the Official Records of Matagorda County, Texas,
as File No. 050429.

Lease Interest: 30.30% WI / 22.04325% NRI
 
Starfish Prospect

 
5.
Oil and Gas Lease dated April 5, 2005, from the State of Texas, by and through
the Commissioner of the General Land Office of the State of Texas, as Lessor, to
Cinco Energy Corporation, as Lessee, covering Oil and Gas Lease Number M-104829,
being the South One-Half (S/2) of Tract 96, Matagorda Bay, Calhoun County,
Texas, containing approximately 320 acres as shown on the applicable Official
Submerged Area Map on file in the Texas General Land Office, Austin, Texas, and
recorded in the Official Records of Calhoun County, Texas, as File No. 92724,
Volume 406, Page 35.

Lease Interest: 30.30% WI / 22.422% NRI (to April 5, 2009)/ 21.6645% NRI (after
April 5, 2009)

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6.
Oil and Gas Lease dated July 19, 2005, from the State of Texas, by and through
the Commissioner of the General Land Office of the State of Texas, as Lessor, to
Cinco Resources, Inc., as Lessee, covering Oil and Gas Lease Number M-105371,
being the North One-Half (N/2) of Tract 104, Matagorda Bay, Calhoun County,
Texas, containing approximately 320 acres as shown on the applicable Official
Submerged Area Map on file in the Texas General Land Office, Austin, Texas, and
recorded in the Official Records of Calhoun County, Texas, as File No. 96377,
Volume 426, Page 912.

Lease Interest:  36.2874% WI / 26.852676% NRI (to July 19, 2009) / 25.945491%
(after July 19, 2009)
 
Barracuda Prospect

 
7.
Oil and Gas Lease dated April 5, 2005, from the State of Texas, by and through
the Commissioner of the General Land Office of the State of Texas, as Lessor, to
Cinco Energy Corporation, as Lessee, covering Oil and Gas Lease Number M-104827,
being the North One-Half (N/2) of Tract 94, Matagorda Bay, Calhoun County,
Texas, containing approximately 320 acres as shown on the applicable Official
Submerged Area Map on file in the Texas General Land Office, Austin, Texas, and
recorded in the Official Records of Calhoun County, Texas, as File No. 92722,
Volume 406, Page 21.

Lease Interest: 30.30% WI / 22.422% NRI (to April 5, 2009)/ 21.6645% NRI (after
April 5, 2009)
 

 
8.
Oil and Gas Lease dated April 5, 2005, from the State of Texas, by and through
the Commissioner of the General Land Office of the State of Texas, as Lessor, to
Cinco Energy Corporation, as Lessee, covering Oil and Gas Lease Number M-104828,
being the South One-Half (S/2) of Tract 94, Matagorda Bay, Calhoun County,
Texas, containing approximately 320 acres as shown on the applicable Official
Submerged Area Map on file in the Texas General Land Office, Austin, Texas, and
recorded in the Official Records of Calhoun County, Texas, as File No. 92723,
Volume 406, Page 28.

 
Lease Interest: 30.30% WI / 22.422% NRI (to April 5, 2009)/ 21.6645% NRI (after
April 5, 2009)
 
Mackerel Prospect
 

 
9.
Oil and Gas Lease dated July 19, 2005, from the State of Texas, by and through
the Commissioner of the General Land Office of the State of Texas, as Lessor, to
Cinco Resources, Inc., as Lessee, covering Oil and Gas Lease Number M-105373,
being the North One-Half (N/2) of Tract 175, Matagorda Bay, Calhoun and
Matagorda Counties, Texas, containing approximately 320 acres as shown on the
applicable Official Submerged Area Map on file in the Texas General Land Office,
Austin, Texas, and recorded in the Official Records of Calhoun County, Texas, as
File No. 96378, Volume 426, Page 919, and recorded in the Official Records of
Matagorda County, Texas, as File No. 063722.

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Lease Interest: 36.2874% WI / 26.852676% (to July 19, 2009) / 25.945491% (after
July 19, 2009)
 

 
10.
Oil and Gas Lease dated October 4, 2005, from the State of Texas, by and through
the Commissioner of the General Land Office of the State of Texas, as Lessor, to
Cinco Resources, Inc., as Lessee, covering Oil and Gas Lease Number M-105679,
being the North One-Half (N/2) of Tract 178, Matagorda Bay, Matagorda County,
Texas, containing approximately 320 acres as shown on the applicable Official
Submerged Area Map on file in the Texas General Land Office, Austin, Texas, and
recorded in the Official Records of Matagorda County, Texas, as File No. 059741.

Lease Interest: 30.30% WI / 22.422% NRI (to October 4, 2009)/ 21.6645% NRI
(after October 4, 2009)
 

 
11.
Oil and Gas Lease dated October 4, 2005, from the State of Texas, by and through
the Commissioner of the General Land Office of the State of Texas, as Lessor, to
Cinco Resources, Inc., as Lessee, covering Oil and Gas Lease Number M-105678,
being the South One-Half (S/2) of Tract 176, Matagorda Bay, Calhoun and
Matagorda Counties, Texas, containing approximately 320 acres as shown on the
applicable Official Submerged Area Map on file in the Texas General Land Office,
Austin, Texas, and recorded in the Official Records of Calhoun County, Texas, as
File No. 96971, Volume 429, Page 918, and recorded in the Official Records of
Matagorda County, Texas, as File No. 059740.

Lease Interest: 30.30% WI / 22.422% NRI (to October 4, 2009)/ 21.6645% NRI
(after October 4, 2009)
 
Sydney/150-Deep Prospect
 

 
12.
Oil and Gas Lease dated July 1, 2003, from the State of Texas, by and through
the Commissioner of the General Land office of the State of Texas, as Lessor, to
LLOG Exploration Texas, L.P., as Lessee, covering Oil and Gas Lease Number
M-103190, being the North One-Half (N/2) of Tract 127, Matagorda Bay, Calhoun
County, Texas, containing approximately 320 acres as shown on the applicable
Official Submerged Area Map on file in the Texas General Land Office, Austin,
Texas, and recorded in the Official Records of Calhoun County, Texas, as File
No. 00081323, Volume 344, Page 875.

 
13.
Oil and Gas Lease dated July 1, 2003, from the State of Texas, by and through
the Commissioner of the General Land office of the State of Texas, as Lessor, to
LLOG Exploration Texas, L.P., as Lessee, covering Oil and Gas Lease Number
M-103191, being the South One-Half (S/2) of Tract 127, Matagorda Bay, Calhoun
County, Texas, containing approximately 320 acres as shown on the applicable
Official Submerged Area Map on file in the Texas General Land Office, Austin,
Texas, and recorded in the Official Records of Calhoun County, Texas, as File
No.0081324, Volume 344, Page 882.

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14.
Oil and Gas Lease dated July 1, 2003, from the State of Texas, as Lessor, to
Cinco Natural Resources Corporation, as Lessee, covering Oil and Gas Lease No.
M-103194, being the south one-half (S/2) of State Tract 150, Matagorda Bay,
Calhoun County, Texas, containing approximately 320.0 acres, recorded in File
No. 82095, Volume 349, Page 1 of the Official Records of Calhoun County, Texas.
(This tract is also in the Shark Prospect.)

 

 
15.
Oil and Gas Lease dated July 1, 2003, from the State of Texas, by and through
the Commissioner of the General Land office of the State of Texas, as Lessor, to
LLOG Exploration Texas, L.P., as Lessee, covering Oil and Gas Lease Number
M-103195, being the South One-Half (S/2) of Tract 151, Matagorda Bay, Calhoun
County, Texas, containing approximately 320 acres as shown on the applicable
Official Submerged Area Map on file in the Texas General Land Office, Austin,
Texas, and recorded in the Official Records of Calhoun County, Texas, as File
No. 00081326, Volume 344, Page 896.

 

 
16.
Oil and Gas Lease dated July 1, 2003, from the State of Texas, by and through
the Commissioner of the General Land office of the State of Texas, as Lessor, to
LLOG Exploration Texas, L.P., as Lessee, covering Oil and Gas Lease Number
M-103192, being the North One-Half (N/2) of Tract 128, Matagorda Bay, Calhoun
County, Texas, containing approximately 320 acres as shown on the applicable
Official Submerged Area Map on file in the Texas General Land Office, Austin,
Texas, and recorded in the Official Records of Calhoun County, Texas, as File
No. 00081325, Volume 344, Page 889.

 

 
17.
Oil and Gas Lease dated July 6, 2004, from the State of Texas, by and through
the Commissioner of the General Land office of the State of Texas, as Lessor, to
LLOG Exploration Texas, L.P., as Lessee, covering Oil and Gas Lease Number
M-104022, being the North One-Half (N/2) of Tract 150, Matagorda Bay, Calhoun
County, Texas, containing approximately 320 acres as shown on the applicable
Official Submerged Area Map on file in the Texas General Land Office, Austin,
Texas, and recorded in the Official Records of Calhoun County, Texas, as File
No. 00088242, Volume 381, Page 433.

 

 
18.
Oil and Gas Lease dated July 19, 2005, from the State of Texas, by and through
the Commissioner of the General Land office of the State of Texas, as Lessor, to
LLOG Exploration Texas, L.P., as Lessee, covering Oil and Gas Lease Number
M-105372, being the South One-Half (S/2) of Tract 154, Matagorda Bay, Calhoun
County, Texas, containing approximately 320 acres as shown on the applicable
Official Submerged Area Map on file in the Texas General Land Office, Austin,
Texas, and recorded in the Official Records of Calhoun County, Texas, as File
No. 00095163, Volume 420, Page 166.

 
Lease Interest: N/2 ST 150 (SAVE AND EXCEPT the portion excluded from the State
Tract 127 No. 1 Unit, being depths above the stratigraphic equivalent of 100’
below the base of the 9800’ Sand TVD as seen in the Cockrell Corporation
Aquamarine Unit Well No. 1 (API No. 42-057-31600) and the S/2 of ST 154: 53.8 %
WI / 39.6775 % NRI
 
Lease Interest: INSOFAR only as to that portion of the N/2 ST 150 excluded from
the State Tract 127 No. 1 Unit, being depths above the stratigraphic equivalent
of 100’ below the base of the 9800’ Sand TVD as seen in the Cockrell Corporation
Aquamarine Unit Well No. 1 (API No. 42-057-31600): 74.8 % WI / 55.165% NRI
 
Lease Interest: S/2 and the N/2 of ST 127; N/2 ST 128; and the S/2 of ST 151:
53.8 % WI / 38.3325 % NRI

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Unit Well Interest:
 
Sonterra – State Tract 127 No. 1 Unit #1 Well, API No. 42-057-31770:
 

 
A.
3.558523% WI to Casing Point/ 5.113335% NRI to Casing Point;

 
B.
7.025190% WI at Casing Point BPO of Raptor and Hayes non-consent WI and BPO
Rainier 4.5% WI / 5.113335% NRI;

 
C.
6.571999% WI APO Rainier 4.5% WI and BPO Raptor and Hayes non-consent WI /
4.783477 % NRI; and

 
D.
11.359472% WI APO Raptor and Hayes non-consent (and simultaneous back-in to 25%
of South Texas Oil’s WI/NRI **) / 8.268073 % NRI

 
Unit Description:
 
State of Texas Tract 127 No. 1 Unit Well #1, covering 2,240 acres, consisting of
oil and gas leases covering the S/2 and the N/2 of State Tract 127; the N/2 of
State Tract 128; the S/2 of State Tract 151; the S/2 of State Tract 154; the S/2
ST 150, Save and Except depths above the stratigraphic equivalent of 100' below
the base of the 9800' Sand TVD as seen in the Cockrell Corporation Aquamarine
Unit Well No. 1 (API No. 42-057-31600); and the N/2 ST 150 North Half of State
Tract 150, Save and Except the depths above the stratigraphic equivalent of 100
feet below the base of the 9800’ Sand TVD as seen in the Cockrell Corporation
Aquamarine Unit Well No. 1 (API No. 42-057-31600) which shall be excluded from
the Term Pooling Agreement described below:
 
Term Pooling Agreement from the Commissioner of the General Land Office, as
Lessor, to Sonterra Resources, Inc., as Lessee, dated February 20, 2008, but
effective December 11, 2008, and filed of record on February 28, 2008 as
Instrument No. 111111 in the Official Records of Calhoun County, Texas, forming
a pooled unit covering all depths, except from the surface to 10,000’ TVD on all
of State Lease M-103194 and that part of State Lease M-104022 shown on Exhibit
“D” attached thereto encompassing the S/2 of Tract 127 (M-103191); N/2 of Tract
127 (M-103190); N/2 of Tract 128 (M-103192); N/2 of Tract 150 (M-104022); S/2 of
Tract 151 (M-103195); and S/2 of Tract 154 (M-105372).
 
Pipeline:
An undivided 100.0% interest in and to the seven (7) mile six-inch (6") S80 Gr B
pipeline connecting Matagorda Bay, Calhoun County, Texas State Tract 150 No. 1
line heater platform to the Keller Bay Facility onshore.

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