Exhibit 10.1

Execution Version

$600,000,000

HALCÓN RESOURCES CORPORATION

8 7/8% SENIOR NOTES DUE 2021

PURCHASE AGREEMENT

January 9, 2013

WELLS FARGO SECURITIES, LLC

As Representative of the several

    Initial Purchasers named in Schedule I attached hereto,

c/o Wells Fargo Securities, LLC

1000 Louisiana Street, 12th Floor

Houston, Texas 77002

Ladies and Gentlemen:

Halcón Resources Corporation, a Delaware corporation (the “Company”), proposes,
upon the terms and conditions set forth in this agreement (this “Agreement”), to
issue and sell to you, as the initial purchasers (the “Initial Purchasers”),
$600,000,000 in aggregate principal amount of its 8 7/8% Senior Notes due 2021
(the “Notes”). The Notes will (i) have terms and provisions that are summarized
in the Offering Memorandum (as defined below), and (ii) are to be issued
pursuant to that certain Indenture dated as of November 6, 2012 (as supplemented
by the First Supplemental Indenture dated as of December 6, 2012, the
“Indenture”), by and among the Company, the Guarantors (as defined below) and
U.S. Bank Trust National Association, as trustee (the “Trustee”) pursuant to
which the Company previously issued, on November 6, 2012, $750 million in
aggregate principal amount of 8 7/8% Senior Notes due 2021 (the “Existing
Notes”). The Notes and the Existing Notes will be treated as a single class of
debt securities under the Indenture.

The Company’s obligations under the Notes, including the due and punctual
payment of interest on the Notes, will be irrevocably and unconditionally
guaranteed (the “Guarantees”) by the guarantors listed in Schedule II hereto
(together the “Guarantors”). As used herein, the term “Notes” shall include the
Guarantees, unless the context otherwise requires. This Agreement is to confirm
the agreement concerning the purchase of the Notes from the Company by the
Initial Purchasers.

1.Purchase and Resale of the Notes. The Notes will be offered and sold to the
Initial Purchasers without registration under the Securities Act of 1933, as
amended (the “Securities Act”), in reliance on an exemption pursuant to
Section 4(2) under the Securities Act.

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The Company and the Guarantors have prepared a preliminary offering memorandum,
dated January 8, 2013 (the “Preliminary Offering Memorandum”), a pricing term
sheet substantially in the form attached hereto as Schedule III (the “Pricing
Term Sheet”) setting forth the terms of the Notes omitted from the Preliminary
Offering Memorandum and certain other information and an offering memorandum,
dated January 9, 2013 (the “Offering Memorandum”), setting forth information
regarding the Company, the Guarantors, the Notes and the Exchange Notes (as
defined herein) and the Guarantees and the Exchange Guarantees (as defined
herein). The Preliminary Offering Memorandum, as supplemented and amended as of
the Applicable Time (as defined below), together with the Pricing Term Sheet and
any of the documents listed on Schedule IV(A) hereto are collectively referred
to as the “Pricing Disclosure Package”. The Company and the Guarantors hereby
confirm that they have authorized the use of the Pricing Disclosure Package and
the Offering Memorandum in connection with the offering and resale of the Notes
by the Initial Purchasers. “Applicable Time” means 3:45 pm (New York City time)
on January 9, 2013.

Any reference to the Preliminary Offering Memorandum, the Pricing Disclosure
Package or the Offering Memorandum shall be deemed to refer to and include each
of the Company’s and GeoResources’ most recent Annual Report on Form 10-K and
all subsequent documents filed with the United States Securities and Exchange
Commission (the “Commission”) pursuant to Section 13(a), 13(c) or 15(d) of the
United States Securities Exchange Act of 1934, as amended (the “Exchange Act”),
on or prior to the date of the Preliminary Offering Memorandum, the Pricing
Disclosure Package or the Offering Memorandum, as the case may be that are
incorporated by reference therein. Any reference to the Preliminary Offering
Memorandum, Pricing Disclosure Package or the Offering Memorandum, as the case
may be, as amended or supplemented, as of any specified date, shall be deemed to
include any documents filed with the Commission by the Company pursuant to
Section 13(a), 13(c) or 15(d) of the Exchange Act after the date of the
Preliminary Offering Memorandum, Pricing Disclosure Package or the Offering
Memorandum, as the case may be, and prior to such specified date. All documents
filed under the Exchange Act that are incorporated by reference therein shall be
deemed to be included in the Preliminary Offering Memorandum, Pricing Disclosure
Package or the Offering Memorandum, as the case may be, or any amendment or
supplement thereto are hereinafter called the “Exchange Act Reports.”

You have advised the Company that you will offer and resell (the “Exempt
Resales”) the Notes purchased by you hereunder on the terms set forth in each of
the Pricing Disclosure Package and the Offering Memorandum, as amended or
supplemented, solely to (i) persons whom you reasonably believe to be “qualified
institutional buyers” as defined in Rule 144A under the Securities Act (“QIBs”),
and (ii) outside the United States to certain persons who are not U.S. Persons
(as defined in Regulation S under the Securities Act (“Regulation S”)) (such
persons, “Non-U.S. Persons”) in offshore transactions in reliance on Regulation
S. As used herein, the terms “offshore transaction” and “United States” have the
meanings assigned to them in Regulation S. Those persons specified in clauses
(i) and (ii) are referred to herein as “Eligible Purchasers.”

Holders (including subsequent transferees) of the Notes will have the
registration rights set forth in the registration rights agreement in a form
satisfactory to the Initial Purchasers (the “Registration Rights Agreement”)
between the Company, the Guarantors and the Initial

 

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Purchasers to be dated the Closing Date (as defined herein), for so long as such
Notes constitute “Transfer Restricted Securities” (as defined in the
Registration Rights Agreement). Pursuant to the Registration Rights Agreement,
the Company and the Guarantors will agree to file with the Commission under the
circumstances set forth therein, a registration statement under the Securities
Act relating to the Company’s 8 7/8% Senior Notes due 2021 (the “Exchange
Notes”) and the Guarantors’ Exchange Guarantees (the “Exchange Guarantees” to be
offered in exchange for the Notes and the Guarantees. Such portion of the
offering is referred to as the “Exchange Offer”.

2. Representations, Warranties and Agreements of the Company and the Guarantors.
The Company and each of the Guarantors, jointly and severally, represent,
warrant and agree as follows:

(a) When the Notes and Guarantees are issued and delivered pursuant to this
Agreement, such Notes and Guarantees will not be of the same class (within the
meaning of Rule 144A under the Securities Act) as securities of the Company or
the Guarantors that are listed on a national securities exchange registered
under Section 6 of the Exchange Act or that are quoted in a United States
automated inter-dealer quotation system.

(b) Neither the Company nor any subsidiary of the Company is or, after giving
effect to the offer and sale of the Notes and the application of the proceeds
therefrom as described under “Use of Proceeds” in each of the Pricing Disclosure
Package and the Offering Memorandum, will be an “investment company” or a
company “controlled” by an “investment company” within the meaning of the
Investment Company Act of 1940, as amended, and the rules and regulations of the
Commission thereunder.

(c) Assuming the accuracy of your representations and warranties in
Section 3(b), the purchase and resale of the Notes pursuant hereto (including
pursuant to the Exempt Resales) are exempt from the registration requirements of
the Securities Act. No form of general solicitation or general advertising
within the meaning of Regulation D (including, but not limited to,
advertisements, articles, notices or other communications published in any
newspaper, magazine or similar medium or broadcast over television or radio, or
any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising) was used by the Company, the Guarantors, or
any person acting on behalf of the Company or the Guarantors (other than you, as
to whom the Company and the Guarantors make no representation) in connection
with the offer and sale of the Notes.

(d) No directed selling efforts within the meaning of Rule 902 under the
Securities Act were used by the Company, the Guarantors, any affiliate of the
Company or the Guarantors or any person acting on behalf of the Company or the
Guarantors (other than you, as to whom the Company and the Guarantors make no
representation) with respect to Notes sold outside the United States to Non-U.S.
Persons, and the Company and any person acting on its behalf (other than you, as
to whom the Company and the Guarantors make no representation) has complied with
and will implement the “offering restrictions” required by Rule 902 under the
Securities Act.

 

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(e) Each of the Preliminary Offering Memorandum, the Pricing Disclosure Package
and the Offering Memorandum, each as of its respective date, contains all the
information specified in, and meeting the requirements of, Rule 144A(d)(4) under
the Securities Act.

(f) The Preliminary Offering Memorandum, the Pricing Disclosure Package and the
Offering Memorandum have been prepared by the Company and the Guarantors for use
by the Initial Purchasers in connection with the Exempt Resales. No order or
decree preventing the use of the Preliminary Offering Memorandum, the Pricing
Disclosure Package or the Offering Memorandum, or any order asserting that the
transactions contemplated by this Agreement are subject to the registration
requirements of the Securities Act has been issued, and no proceeding for that
purpose has commenced or is pending or, to the knowledge of the Company or any
of the Guarantors is contemplated.

(g) The Pricing Disclosure Package did not, as of the Applicable Time, and will
not, as of the Closing Date, contain an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
provided that no representation or warranty is made as to information contained
in or omitted from the Pricing Disclosure Package in reliance upon and in
conformity with written information furnished to the Company through the
Representative by or on behalf of any Initial Purchaser specifically for
inclusion therein, which information is specified in Section 8(e).

(h) The Offering Memorandum will not, as of its date or as of the Closing Date,
contain an untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided that no representation or
warranty is made as to information contained in or omitted from the Offering
Memorandum in reliance upon and in conformity with written information furnished
to the Company through the Representative by or on behalf of any Initial
Purchaser specifically for inclusion therein, which information is specified in
Section 8(e).

(i) Neither the Company nor any Guarantor has made any offer to sell or
solicitation of an offer to buy the Notes that would constitute a “free writing
prospectus” (if the offering of the Notes was made pursuant to a registered
offering under the Securities Act), as defined in Rule 405 under the Securities
Act (a “Free Writing Offering Document”) without the prior consent of the
Representative; any such Free Writing Offering Document the use of which has
been previously consented to by the Initial Purchasers is listed on Schedule IV.

(j) The Pricing Disclosure Package, when taken together with each Free Writing
Offering Document listed in Schedule IV(B) hereto, did not, as of the Applicable
Time, and will not, as of the Closing Date, contain an untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided that no representation or warranty is made as to
information contained in or omitted from the Pricing Disclosure Package (or Free
Writing Offering Document listed in Schedule IV(B) hereto) in reliance upon and
in conformity with written information furnished to the Company through the
Representative by or on behalf of any Initial Purchaser specifically for
inclusion therein, which information is specified in Section 8(e).

 

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(k) The Company’s Exchange Act Reports, when they were or are filed with the
Commission, conformed or will conform in all material respects to the applicable
requirements of the Exchange Act and the applicable rules and regulations of the
Commission thereunder. The Company’s Exchange Act Reports did not and will not,
when filed with the Commission, contain an untrue statement of material fact or
omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading.

(l) The statistical and market-related data relating to the Company included in
the Pricing Disclosure Package and the Offering Memorandum and the consolidated
financial statements of the Company and its subsidiaries and the financial
statements of the East Texas Assets (as defined in the Pricing Disclosure
Package and the Offering Memorandum), GeoResources, Inc. (“GeoResources”) and
the assets acquired in connection with the acquisition (the “Williston Basin
Acquisition”) of all of the membership interests in Petro-Hunt Fort
Berthold/Marmon Successor Entity LLC and Pillar Fort Berthold/Marmon Successor
Entity LLC from Petro-Hunt, L.L.C. and Pillar Energy, LLC (together, the
“Sellers”) pursuant to the Reorganization and Interest Purchase Agreement (the
“Purchase and Sale Agreement”) between Halcón Energy Properties, Inc. (a wholly
owned subsidiary of the Company) and the Sellers, dated October 19, 2012 (the
“Williston Basin Assets”) included and/or incorporated by reference in the
Pricing Disclosure Package and the Offering Memorandum are based on or derived
from sources that the Company believes to be reliable in all material respects.

(m) The Company has been duly incorporated, is validly existing and is in good
standing under the laws of State of Delaware, with corporate power and authority
to own, lease and operate its properties and conduct its business as described
in the Pricing Disclosure Package and the Offering Memorandum; the Company is
duly qualified as a foreign corporation to transact business and is in good
standing in each other jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure to qualify or to be in good standing would
not have a material adverse effect on the business, properties, prospects,
financial condition, stockholders’ equity or results of operations of the
Company and its subsidiaries taken as a whole (a “Material Adverse Effect”);
each subsidiary of the Company other than those subsidiaries which would not,
individually or in the aggregate, constitute a “significant subsidiary” as
defined in Item 1-02(w) of Regulation S-X (each such “significant subsidiary,” a
“Subsidiary”) is a corporation, partnership, limited liability company or
business trust duly incorporated or organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
organization, with the requisite entity power and authority to own, lease and
operate its properties. The Company does not own or control, directly or
indirectly, any corporation, association or other corporate entity that,
individually or in the aggregate would constitute a Subsidiary, other than the
subsidiaries listed on Schedule II hereof. On a consolidated basis, the Company
and its subsidiaries conduct their business as described in the Pricing
Disclosure Package and the Offering Memorandum and each Subsidiary is duly
qualified as a foreign corporation, partnership, limited liability company,
business trust or other organization to transact business and is in good
standing in each jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the conduct of business,
except where the failure to qualify or to be in good standing would not result
in a Material Adverse Effect.

 

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(n) The Company has the authorized equity capitalization as set forth in the
Pricing Disclosure Package and the Offering Memorandum, and all of the issued
and outstanding shares of capital stock of the Company have been duly authorized
and validly issued and are fully paid and non-assessable. Except as otherwise
disclosed in the Pricing Disclosure Package and the Offering Memorandum, all of
the issued and outstanding capital stock or other ownership interests of each
subsidiary of the Company (i) have been duly authorized and validly issued,
(ii) are fully paid and non-assessable and (iii) are owned by the Company
directly or through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity except as described in the
Pricing Disclosure Package and the Offering Memorandum and except for such
security interests, mortgages, pledges, liens, encumbrances, claims or equities
that would not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect.

(o) The Company and each Guarantor has all requisite corporate power,
partnership or limited liability company and authority, as applicable, to
perform its obligations under the Indenture. The Indenture has been duly and
validly authorized, executed and delivered by the Company and the Guarantors and
constitutes a valid and binding agreement of the Company and the Guarantors,
enforceable against the Company and the Guarantors in accordance with its terms,
except as such enforceability may be limited by bankruptcy, fraudulent
conveyance, insolvency, reorganization, moratorium, and other laws relating to
or affecting creditors’ rights generally and by general equitable principles
(regardless of whether such enforceability is considered in a proceeding in
equity or at law). No qualification of the Indenture under the Trust Indenture
Act of 1939 (the “Trust Indenture Act”) is required in connection with the offer
and sale of the Notes contemplated hereby or in connection with the Exempt
Resales. The Indenture conforms to the description thereof in each of the
Pricing Disclosure Package and the Offering Memorandum.

(p) The Company has all requisite corporate power and authority to execute,
issue, sell and perform its obligations under the Notes. The Notes have been
duly authorized by the Company and, when duly executed by the Company in
accordance with the terms of the Indenture, assuming due authentication of the
Notes by the Trustee, upon delivery to the Initial Purchasers against payment
therefor in accordance with the terms hereof, will be validly issued and
delivered and will constitute valid and binding obligations of the Company
entitled to the benefits of the Indenture, enforceable against the Company in
accordance with their terms, except as such enforceability may be limited by
bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium, and
other laws relating to or affecting creditors’ rights generally and by general
equitable principles (regardless of whether such enforceability is considered in
a proceeding in equity or at law). The Notes will conform in all material
respects to the description thereof in each of the Pricing Disclosure Package
and the Offering Memorandum.

(q) The Company has all requisite corporate power and authority to execute,
issue and perform its obligations under the Exchange Notes. The Exchange Notes
have been duly and validly authorized by the Company and if and when issued and
authenticated in

 

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accordance with the terms of the Indenture and delivered in accordance with the
Exchange Offer provided for in the Registration Rights Agreement, will be
validly issued and delivered and will constitute valid and binding obligations
of the Company entitled to the benefits of the Indenture, enforceable against
the Company in accordance with their terms, except as such enforceability may be
limited by bankruptcy, fraudulent conveyance, insolvency, reorganization,
moratorium, and other laws relating to or affecting creditors’ rights generally
and by general equitable principles (regardless of whether such enforceability
is considered in a proceeding in equity or at law).

(r) Each Guarantor has all requisite corporate, partnership or limited liability
company power and authority, as applicable, to execute, issue and perform its
obligations under the Guarantees. The Guarantees have been duly and validly
authorized, executed and delivered by the Guarantors upon the due execution,
authentication and delivery of the Notes in accordance with the Indenture and
the issuance of the Notes in the sale to the Initial Purchasers contemplated by
this Agreement, will constitute valid and binding obligations of the Guarantors,
enforceable against the Guarantors in accordance with their terms, except as
such enforceability may be limited by bankruptcy, fraudulent conveyance,
insolvency, reorganization, moratorium, and other laws relating to or affecting
creditors’ rights generally and by general equitable principles (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
The Guarantees will conform in all material respects to the description thereof
in each of the Pricing Disclosure Package and the Offering Memorandum.

(s) Each Guarantor has all requisite corporate, partnership or limited liability
company power and authority, as applicable, to execute, issue and perform its
obligations under the Exchange Guarantees. The Exchange Guarantees have been
duly and validly authorized by the Guarantors and if and when executed and
delivered by the Guarantors in accordance with the terms of the Indenture and
upon the due execution and authentication of the Exchange Notes in accordance
with the Indenture and the issuance and delivery of the Exchange Notes in the
Exchange Offer contemplated by the Registration Rights Agreement, will be
validly issued and delivered and will constitute valid and binding obligations
of the Guarantors entitled to the benefits of the Indenture, enforceable against
the Guarantors in accordance with their terms, except as such enforceability may
be limited by bankruptcy, fraudulent conveyance, insolvency, reorganization,
moratorium, and other laws relating to or affecting creditors’ rights generally
and by general equitable principles (regardless of whether such enforceability
is considered in a proceeding in equity or at law).

(t) The Company and each Guarantor has all requisite corporate, partnership or
limited liability company power and authority, as applicable, to execute,
deliver and perform its obligations under the Registration Rights Agreement. The
Registration Rights Agreement has been duly authorized by the Company and each
Guarantor and, when executed and delivered by the Company and each Guarantor in
accordance with the terms hereof and thereof, will be validly executed and
delivered and (assuming the due authorization, execution and delivery thereof by
you) will be the legally valid and binding obligation of the Company and each
Guarantor in accordance with the terms thereof, enforceable against the Company
and each Guarantor in accordance with its terms, except as such enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium and other
similar laws relating to or affecting creditor’s rights generally, by general
equitable principles (regardless of whether such

 

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enforceability is considered in a proceeding in equity or at law) and, as to
rights of indemnification and contribution, by principles of public policy. The
Registration Rights Agreement will conform in all material respects to the
description thereof in each of the Pricing Disclosure Package and the Offering
Memorandum.

(u) The Company and each Guarantor have all requisite corporate power to
execute, deliver and perform its obligations under this Agreement. This
Agreement has been duly and validly authorized, executed and delivered by the
Company and each of the Guarantors.

(v) The issue and sale of the Notes and the Guarantees, the execution, delivery
and performance by the Company and the Guarantors of the Notes, the Guarantees,
the Exchange Notes, the Exchange Guarantees, the Indenture, the Registration
Rights Agreement and this Agreement, the application of the proceeds from the
sale of the Notes as described under “Use of Proceeds” in each of the Pricing
Disclosure Package and the Offering Memorandum, the consummation of the
transactions contemplated hereby and thereby, will not (i) conflict with or
result in a breach or violation of any of the terms or provisions of, impose any
lien, charge or encumbrance upon any property or assets of the Company, the
Guarantors or their respective subsidiaries, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement, license, lease or other
agreement or instrument to which the Company, the Guarantors or any of their
respective subsidiaries is a party or by which the Company, the Guarantors or
any of their respective subsidiaries is bound or to which any of the property or
assets of the Company, the Guarantors or any of their respective subsidiaries is
subject, (ii) result in any violation of the provisions of the charter or
by-laws (or similar organizational documents) of the Company, the Guarantors or
any of their respective subsidiaries, or (iii) result in any violation of any
statute or any judgment, order, decree, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company, the Guarantors
or any of their respective subsidiaries or any of their properties or assets,
except, with respect to clauses (i) and (iii), conflicts or violations that
would not reasonably be expected to have a Material Adverse Effect.

(w) No consent, approval, authorization or order of, or filing, registration or
qualification with, any court or governmental agency or body, domestic or
foreign, having jurisdiction over the Company is required for the offering and
sale of the Notes or the consummation by the Company of the other transactions
contemplated by this Agreement or the Registration Rights Agreement, except for
the filing of the registration statement by the Company with the Commission
pursuant to the Securities Act, as required by the Registration Rights
Agreement, and such consents, approvals, authorizations, orders, registrations,
filings or qualifications which shall have been obtained or made prior to the
Closing Date as described in this Agreement or as may be required by the
securities or blue sky laws of the various states, the Securities Act and the
securities laws of any jurisdiction outside the United States in which the Notes
are offered.

(x) Except for the Registration Rights Agreement and as disclosed in the Pricing
Disclosure Package and the Offering Memorandum, there are no contracts,
agreements or understandings between the Company, any Guarantor and any person
granting such person the right to require the Company or any Guarantor to file a
registration statement under the Securities Act with respect to any securities
of the Company or any Guarantor owned or to be

 

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owned by such person or to require the Company or any Guarantor to include such
securities in the securities registered pursuant to the Registration Rights
Agreement or in any securities being registered pursuant to any other
registration statement filed by the Company or any Guarantor under the
Securities Act.

(y) Neither the Company, any Guarantor nor any other person acting on behalf of
the Company or any Guarantor has sold or issued any securities that would be
integrated with the offering of the Notes contemplated by this Agreement
pursuant to the Securities Act, the rules and regulations thereunder or the
interpretations thereof by the Commission.

(z) Neither the Company, the Guarantors nor any of their respective subsidiaries
has sustained, since the date of the latest audited financial statements
included and incorporated by reference in the Pricing Disclosure Package and the
Offering Memorandum, any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, and, since
such date, there has not been any change in the capital stock, partnership or
limited liability interests, as applicable, or long-term debt, of the Company,
the Guarantors or any of their respective subsidiaries or any adverse change, or
any development involving a prospective adverse change, in or affecting the
business, properties, prospects, financial condition, stockholders’ equity or
results of operations of the Company and its subsidiaries, taken as a whole, in
each case except as could not, in the aggregate, reasonably be expected to have
a Material Adverse Effect.

(aa) The historical financial statements (including the related notes and
supporting schedules) of each of the Company and GeoResources included and/or
incorporated by reference in the Pricing Disclosure Package and the Offering
Memorandum present fairly in all material respects the financial condition,
results of operations and cash flows of the entities purported to be shown
thereby, at the dates and for the periods indicated, and have been prepared in
conformity with accounting principles generally accepted in the United States
applied on a consistent basis throughout the periods involved. The statement of
revenues and direct operating expenses of each of the East Texas Assets and the
Williston Basin Assets present fairly in all material respects the revenues and
direct operating expenses of the East Texas Assets and the Williston Basin
Assets, as applicable, at the dates and for the periods indicated. The
interactive data in eXtensible Business Reporting Language (“XBRL”) included or
incorporated by reference in the Pricing Disclosure Package and the Offering
Memorandum fairly presents the financial information called for in all material
respects and has been prepared in accordance with the Commission’s rules and
guidelines applicable thereto.

(bb) The pro forma financial statements included in the Pricing Disclosure
Package and the Offering Memorandum include assumptions that provide a
reasonable basis for presenting the significant effects directly attributable to
the transactions and events described therein, the related pro forma adjustments
give appropriate effect to those assumptions, and the pro forma adjustments
reflect the proper application of those adjustments to the historical financial
statement amounts in the pro forma financial statements included in the Pricing
Disclosure Package. The pro forma financial statements included in the Pricing
Disclosure Package have been prepared in accordance with the Commission’s rules
and guidance with

 

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respect to pro forma financial information. The pro forma financial statements
included in the Pricing Disclosure Package and the Offering Memorandum have been
prepared on the basis consistent with such historical financial statements,
except for the pro forma adjustments specified therein, and include all material
adjustments to the historical financial data required by Rule 11-02 of
Regulation S-X to reflect the GeoResources Merger (as defined therein), the
acquisition of the East Texas Assets, the offering of $750 million of 9.75%
Senior Notes due 2020, the Williston Basin Acquisition, the offering of the
Existing Notes and the private placement of approximately 41.9 million shares of
the Company’s common stock, and to give effect to the other transactions
described therein, and give effect to assumptions made on a reasonable basis and
in good faith and present fairly in all material respects the historical and
proposed transactions reflected therein. The other financial information and
data included and incorporated by reference in the Offering Memorandum,
historical and pro forma, are, in all material respects, accurately presented
and prepared on a basis consistent with such financial statements and the books
and records of the Company.

(cc) Deloitte & Touche LLP, who have delivered the initial letter referred to in
Section 7(f) hereof, are independent registered public accountants as required
by the Securities Act and the rules and regulations thereunder and the rules and
regulations of the Public Company Accounting Oversight Board (the “PCAOB”)
during the periods covered by the financial statements on which they reported
contained in and incorporated by reference in the Pricing Disclosure Package and
the Offering Memorandum.

(dd) Grant Thornton LLP, who have certified certain financial statements of
GeoResources, whose reports appear in the Pricing Disclosure Package and the
Offering Memorandum or are incorporated by reference therein and who have
delivered the initial letter referred to in Section 7(f) hereof, were
independent registered public accountants of GeoResources as required by the
Securities Act and the rules and regulations thereunder and the rules and
regulations of the PCAOB during the periods covered by the financial statements
on which they reported contained in and incorporated by reference in the Pricing
Disclosure Package and the Offering Memorandum.

(ee) UHY LLP, who have certified certain financial statements of the Company,
the East Texas Assets and the Williston Basin Assets, whose reports appear in
the Pricing Disclosure Package and the Offering Memorandum or are incorporated
by reference therein and who have delivered the initial letter referred to in
Section 7(f) hereof, are independent registered public accountants as required
by the Securities Act and the rules and regulations thereunder and the rules and
regulations of the PCAOB during the periods covered by the financial statements
on which they reported contained in and incorporated by reference in the Pricing
Disclosure Package and the Offering Memorandum.

(ff) The Company and its subsidiaries have defensible title to all of their
interests in oil and gas properties (other than interests earned under farm-out,
participation or similar agreements in which an assignment or transfer is
pending) and all their interests in other real property and good title to all
other properties owned by them, in each case, free and clear of all mortgages,
pledges, liens, security interests, claims, restrictions or encumbrances of any
kind except such as (i) are described in the Pricing Disclosure Package and the
Offering Memorandum, (ii) liens and encumbrances under operating agreements,
unitization and pooling

 

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agreements, production sales contracts, farm-out agreements and other oil and
gas exploration participation and production agreements, in each case that
secure payment of amounts not yet due and payable for the performance of other
unmatured obligations and are of a scope and nature customary in the oil and gas
industry or arise in connection with drilling and production operations, or
(iii) would not have a Material Adverse Effect; except as described in the
Pricing Disclosure Package or the Offering Memorandum or as would not have a
Material Adverse Effect, all of the leases and subleases of real property of the
Company or any of its subsidiaries and under which the Company or any of its
subsidiaries holds properties described in the Pricing Disclosure Package and
the Offering Memorandum, are in full force and effect.

(gg) Forrest A. Garb & Associates (the “Company Reservoir Engineer”), whose
report dated February 7, 2012, is summarized or excerpted in reports
incorporated by reference, or included, in the Pricing Disclosure Package and
the Offering Memorandum, was, as of the date of such report, and is, as of the
date hereof, an independent petroleum engineer with respect to the Company. The
written engineering report prepared by the Company Reservoir Engineer dated
February 7, 2012 setting forth the proved reserves attributed to the oil and gas
properties of the Company and its subsidiaries accurately reflects in all
material respects the interests of the Company its subsidiaries in the
properties therein as of December 31, 2011 and was prepared in accordance with
the SEC’s rules and regulations relating to the reporting of oil and natural gas
reserves; the information furnished by the Company to the Company Reservoir
Engineer for purposes of preparing its report, including, without limitation,
production, costs of operation and development, current prices for production,
agreements relating to current and future operations and sales of production,
was true, correct and complete in all material respects on the date supplied and
was prepared in accordance with customary industry practices, as indicated in
the letter of the Company Reservoir Engineer dated February 7, 2012. The
estimates of proved reserves and related information relating to the East Texas
Assets prepared by the Company’s internal reserve engineering staff as of
April 1, 2012 accurately reflect in all material respects the interests that the
Company expects to acquire therein following closing of such acquisition and
were prepared in a manner consistent with the rules and regulations of the SEC
relating to the reporting of oil and gas reserves; the information used by the
Company’s internal reserve engineers for purposes of preparing such estimates of
proved reserves, including, without limitation, production, costs of operation
and development, current prices for production, agreements relating to current
and future operations and sales of production, was true, correct and complete in
all material respects as of the date of such reserves.

(hh) Cawley, Gillespie & Associates, Inc. (the “GeoResources Reservoir
Engineer”), whose report dated February 27, 2012, is summarized or excerpted in
the Pricing Disclosure Package and the Offering Memorandum, was, as of the date
of such report, an independent petroleum engineer with respect to GeoResources.
The written engineering report prepared by the GeoResources Reservoir Engineer
dated February 27, 2012 setting forth the proved reserves attributed to the oil
and gas properties of GeoResources and its subsidiaries accurately reflects in
all material respects the interests of GeoResources and its subsidiaries in the
properties therein as of December 31, 2011 and was prepared in accordance with
the SEC’s rules and regulations relating to the reporting of oil and natural gas
reserves; the information furnished by GeoResources to the GeoResources
Reservoir Engineer for purposes of preparing its report, including, without
limitation, production, costs of operation and development, current prices for
production, agreements relating to current and future operations and sales of

 

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production, was true, correct and complete in all material respects on the date
supplied and was prepared in accordance with customary industry practices, as
indicated in the letter of the GeoResources Reservoir Engineer dated
February 27, 2012. The estimates of proved reserves and related information
relating to the Brookeland fields prepared by GeoResources’ internal reserve
engineering staff as of December 31, 2011 accurately reflect in all material
respects the interests that GeoResources has therein and were prepared in a
manner consistent with the rules and regulations of the SEC relating to the
reporting of oil and gas reserves; the information used by GeoResources’
internal reserve engineers for purposes of preparing such estimates of proved
reserves, including, without limitation, production, costs of operation and
development, current prices for production, agreements relating to current and
future operations and sales of production, was true, correct and complete in all
material respects as of the date of such reserves.

(ii) W. D. Von Gonten & Co. (the “Williston Basin Assets Reservoir Engineer”),
was, as of the date that it prepared the estimate as of August 1, 2012, an
independent petroleum engineer with respect to the Company. To the knowledge of
the Company, the engineering report prepared by the Williston Basin Assets
Reservoir Engineer setting forth the proved reserves attributed to the Williston
Basin Assets accurately reflects in all material respects the interests of the
Sellers in the properties therein as of August 1, 2012 and was prepared in
accordance with the SEC’s rules and regulations relating to the reporting of oil
and natural gas reserves; to the knowledge of the Company, the information
furnished by the Company and the Sellers to the Williston Basin Assets Reservoir
Engineer for purposes of preparing its estimate, including, without limitation,
production, costs of operation and development, current prices for production,
agreements relating to current and future operations and sales of production,
was true, correct and complete in all material respects on the date supplied and
was prepared in accordance with customary industry practices.

(jj) As of the date of this Agreement, no reports or estimates of the proved
reserves of the Company and its subsidiaries as of December 31, 2012 have been
prepared in accordance with the Commission’s rules and regulations relating to
the reporting of oil and natural gas reserves.

(kk) The Company and each of its subsidiaries have such permits, licenses,
patents, franchises, certificates of need and other approvals or authorizations
of governmental or regulatory authorities (“Permits”) as are necessary under
applicable law to own their properties and conduct their businesses in the
manner described in the Pricing Disclosure Package and the Offering Memorandum,
except for any of the foregoing that could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect; each of the Company and its
subsidiaries has fulfilled and performed all of its obligations with respect to
the Permits, and no event has occurred that allows, or after notice or lapse of
time would allow, revocation or termination thereof or results in any other
impairment of the rights of the holder or any such Permits, except for any of
the foregoing that could not reasonably be expected to have a Material Adverse
Effect.

(ll) The Company and each of its subsidiaries own or possess adequate rights to
use all material patents, patent applications, trademarks, service marks, trade
names, trademark registrations, service mark registrations, copyrights,
licenses, know-how, software, systems and technology (including trade secrets
and other unpatented and/or unpatentable

 

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proprietary or confidential information, systems or procedures) necessary for
the conduct of their respective businesses and have no reason to believe that
the conduct of their respective businesses will conflict in any material respect
with, and have not received any notice of any claim of conflict with, any such
rights of others.

(mm) Other than as set forth in the Pricing Disclosure Package and the Offering
Memorandum, there are no legal or governmental proceedings pending to which the
Company or any of its subsidiaries is a party or of which any property of the
Company or any of its subsidiaries is the subject which if determined adversely
to the Company, or such subsidiary, would individually or in the aggregate, have
a Material Adverse Effect or which would materially and adversely affect the
consummation of the transactions contemplated under this Agreement or the
Registration Rights Agreement or the performance by the Company or any Guarantor
of their obligations hereunder or thereunder; and, to the Company’s and the
Guarantors’ knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.

(nn) There are no contracts or other documents that would be required to be
described in a registration statement filed under the Securities Act or filed as
exhibits to a registration statement of the Company pursuant to Item 601(10) of
Regulation S-K, or a periodic report of the Company under the Exchange Act that
would be incorporated by reference therein, that have not been described in the
Pricing Disclosure Package and the Offering Memorandum. The statements made in
the Pricing Disclosure Package and the Offering Memorandum, insofar as they
purport to constitute summaries of the terms of the contracts and other
documents that are so described, constitute accurate summaries of the terms of
such contracts and documents in all material respects. Neither the Company, the
Guarantors nor any of their respective subsidiaries has knowledge that any other
party to any such contract or other document has any intention not to render
full performance as contemplated by the terms thereof.

(oo) The statements made in the Pricing Disclosure Package and the Offering
Memorandum under the captions “Business” (as incorporated by reference from the
Company’s Exchange Act Reports), “Certain U.S. Federal Income Tax
Considerations” and “Certain ERISA Considerations,” insofar as they purport to
constitute summaries of the terms of statutes, rules or regulations, legal or
governmental proceedings or contracts and other documents, constitute accurate
summaries of the terms of such statutes, rules and regulations, legal and
governmental proceedings and contracts and other documents in all material
respects.

(pp) No relationship, direct or indirect, that would be required to be described
in a registration statement of the Company pursuant to Item 404 of Regulation
S-K, exists between or among the Company or any Guarantor and their respective
subsidiaries, on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company or any Guarantor and their respective
subsidiaries, on the other hand, that has not been described in the Pricing
Disclosure Package and the Offering Memorandum.

(qq) No labor disturbance by or dispute with the employees of the Company or any
of its subsidiaries exists or, to the knowledge of the Company or any Guarantor,
is imminent that could reasonably be expected to have a Material Adverse Effect.

 

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(rr) (i) Each “employee benefit plan” (within the meaning of Section 3(3) of the
Employee Retirement Security Act of 1974, as amended (“ERISA”)) for which the
Company or any member of its “Controlled Group” (defined as any organization
which is a member of a controlled group of corporations within the meaning of
Section 414 of the Internal Revenue Code of 1986, as amended (the “Code”)) would
have any liability (each a “Plan”) has been maintained in compliance with its
terms and with the requirements of all applicable statutes, rules and
regulations including ERISA and the Code in all material respects; (ii) with
respect to each Plan subject to Title IV of ERISA (a) no “reportable event”
(within the meaning of Section 4043(c) of ERISA) has occurred or is reasonably
expected to occur, (b) no “accumulated funding deficiency” (within the meaning
of Section 302 of ERISA or Section 412 of the Code), whether or not waived, has
occurred or is reasonably expected to occur, (c) the fair market value of the
assets under each Plan exceeds the present value of all benefits accrued under
such Plan (determined based on those assumptions used to fund such Plan) and
(d) neither the Company or any member of its Controlled Group has incurred, or
reasonably expects to incur, any liability under Title IV of ERISA (other than
contributions to the Plan or premiums to the PBGC in the ordinary course and
without default) in respect of a Plan (including a “multiemployer plan”, within
the meaning of Section 4001(c)(3) of ERISA); and (iii) to the knowledge of the
Company, each Plan that is intended to be qualified under Section 401(a) of the
Code is so qualified and nothing has occurred, whether by action or by failure
to act, which would cause the loss of such qualification.

(ss) The Company and each of its subsidiaries has filed all federal, state,
local and foreign income and franchise tax returns required to be filed through
the date hereof, subject to permitted extensions, and paid all taxes due
thereon, and (i) no tax deficiency has been determined adversely to the Company,
the Guarantors or any of their respective subsidiaries, nor (ii) does the
Company or any Guarantor have any knowledge of any tax deficiencies that could,
in the case of clause (i) or (ii) in the aggregate, reasonably be expected to
have a Material Adverse Effect.

(tt) There are no transfer taxes or other similar fees or charges under Federal
law or the laws of any state, or any political subdivision thereof, required to
be paid in connection with the execution and delivery of this Agreement or the
issuance by the Company or sale by the Company of the Notes.

(uu) Since the date as of which information is given in the Pricing Disclosure
Package and the Offering Memorandum and except as may otherwise be described in
the Pricing Disclosure Package and the Offering Memorandum, neither the Company
nor any Guarantor has (i) incurred any liability or obligation, direct or
contingent, other than liabilities and obligations that were incurred in the
ordinary course of business, (ii) entered into any material transaction not in
the ordinary course of business or (iii) declared or paid any dividend on its
capital stock.

(vv) Neither the Company nor any of its subsidiaries (i) is in violation of its
charter or by-laws (or similar organizational documents), (ii) is in default,
and no event has occurred that, with notice or lapse of time or both, would
constitute such a default, in the due performance or observance of any term,
covenant, condition or other obligation contained in any indenture, mortgage,
deed of trust, loan agreement, license or other agreement or instrument to which
it is a party or by which it is bound or to which any of its properties or
assets is subject, or

 

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(iii) is in violation of any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over it or its property
or assets or has failed to obtain any license, permit, certificate, franchise or
other governmental authorization or permit necessary to the ownership of its
property or to the conduct of its business, except in the case of clauses
(ii) and (iii), to the extent any such conflict, breach, violation or default
could not, in the aggregate, reasonably be expected to have a Material Adverse
Effect or would not materially impair the ability of the Company or any
Guarantor to perform their obligations under this Agreement or the transactions
contemplated by the Purchase and Sale Agreement.

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

(xx) The Company and each of its subsidiaries (i) are, and at all times prior
hereto were, in compliance with all laws, regulations, ordinances, rules,
orders, judgments, decrees, permits or other legal requirements of any
governmental authority, including without limitation any international,
national, state, provincial, regional, or local authority, relating to the
protection of human health or safety, the environment, or natural resources, or
to hazardous or toxic substances or wastes, pollutants or contaminants
(“Environmental Laws”) applicable to such entity, which compliance includes,
without limitation, obtaining, maintaining and complying with all permits and
authorizations and approvals required by Environmental Laws to conduct their
respective businesses, and (ii) have not received notice of any actual or
alleged violation of Environmental Laws, or of any potential liability for or
other obligation concerning the presence, disposal or release of hazardous or
toxic substances or wastes, pollutants or contaminants, except in the case of
clause (i) or (ii) where such non-compliance, violation, liability, or other
obligation could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect. Except as described in the Pricing Disclosure Package,
(A) there are no proceedings that are pending, or known to be contemplated,
against the Company or any of its subsidiaries under Environmental Laws in which
a governmental authority is also a party, other than such proceedings regarding
which it is reasonably believed no monetary sanctions of $100,000 or more will
be imposed, (B) the Company, the Guarantors and their respective subsidiaries
are not aware of any issues regarding compliance with Environmental Laws, or
liabilities or other obligations under Environmental Laws or concerning
hazardous or toxic substances or wastes, pollutants or contaminants, that could
reasonably be expected to have a Material Adverse Effect, and (C) none of the
Company, the Guarantors and their respective subsidiaries anticipates material
capital expenditures other than in the ordinary course of business relating to
Environmental Laws.

(yy) None of the transactions contemplated by this Agreement (including, without
limitation, the use of the proceeds from the sale of the Notes), will violate or
result in a violation of Section 7 of the Exchange Act, or any regulation
promulgated thereunder, including, without limitation, Regulations T, U and X of
the Board of Governors of the Federal Reserve System.

 

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(zz) The statements contained in the Pricing Disclosure Package and the Offering
Memorandum under the caption “Description of the Notes,” insofar as they purport
to constitute a summary of the terms of the Indenture, the Notes, the
Registration Rights Agreement and the Guarantees and under the captions
“Description of Other Indebtedness” and “Plan of Distribution” insofar as they
purport to describe the provisions of the documents referred to therein, are
accurate in all material respects.

(aaa) The Company and its affiliates have not taken, directly or indirectly, any
action designed to or that has constituted or that could reasonably be expected
to cause or result in the stabilization or manipulation of the price of any
security of the Company or the Guarantors in connection with the offering of the
Notes.

(bbb) The Company and each of its subsidiaries maintain a system of internal
control over financial reporting (as such term is defined in Rule 13a-15(f) of
the Exchange Act) that complies with the requirements of the Exchange Act and
that has been designed by, or under the supervision of, the Company’s principal
executive and principal financial officers, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted
accounting principles in the United States. The Company and each of its
subsidiaries maintains internal accounting controls that are sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with management’s general or specific authorization, (ii) transactions are
recorded as necessary to permit preparation of the Company’s financial
statements in conformity with accounting principles generally accepted in the
United States and to maintain accountability for its assets, (iii) access to the
Company’s assets is permitted only in accordance with management’s general or
specific authorization, (iv) the recorded accountability for the Company’s
assets is compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences, and (v) the interactive data in
XBRL included or incorporated by reference in the Pricing Disclosure Package and
the Offering Memorandum fairly presents the information called for in all
material respects and is prepared in accordance with the Commission’s rules and
guidelines applicable thereto.

(ccc) (i) The Company and each of its subsidiaries have established and maintain
disclosure controls and procedures (as such term is defined in Rule 13a-15 under
the Exchange Act), (ii) such disclosure controls and procedures are designed to
ensure that the information required to be disclosed by the Company in the
reports they file or submit under the Exchange Act (assuming the Company was
required to file or submit such reports under the Exchange Act) is accumulated
and communicated to management of the Company and its subsidiaries, including
their respective principal executive officers and principal financial officers,
as appropriate, to allow timely decisions regarding required disclosure to be
made; and (iii) such disclosure controls and procedures are effective in all
material respects to perform the functions for which they were established.

 

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(ddd) Since the date of the most recent balance sheet of the Company and its
consolidated subsidiaries audited by UHY LLP and reviewed by the audit committee
of the board of directors of the Company, (i) the Company has not been advised
of by its auditors, nor has it identified (A) any significant deficiencies in
the design or operation of internal controls, that would adversely affect the
ability of the Company or any of its subsidiaries to record, process, summarize
and report financial data, or any material weaknesses in internal controls, and
(B) any fraud, whether or not material, that involves management or other
employees who have a significant role in the internal controls of the Company
and each of its subsidiaries; and (ii) there have been no changes in internal
controls or in other factors that have materially affected or are reasonably
likely to materially affect internal controls, including any corrective actions
with regard to significant deficiencies and material weaknesses.

(eee) No subsidiary of the Company is currently prohibited, directly or
indirectly, from paying any dividends to the Company, from making any other
distribution on such subsidiary’s capital stock, from repaying to the Company
any loans or advances to such subsidiary from the Company or from transferring
any of such subsidiary’s property or assets to the Company or any other
subsidiary of the Company, except as described in the Pricing Disclosure Package
and the Offering Memorandum.

(fff) There is and has been no failure on the part of the Company and any of the
Company’s directors or officers, in their capacities as such, to comply with the
provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations
promulgated in connection therewith.

(ggg) The section entitled “Management’s Discussion and Analysis of Financial
Condition and Results of Operations–Critical Accounting Policies and Estimates”
as incorporated by reference from the Company’s Exchange Act Reports in the
Pricing Disclosure Package and the Offering Memorandum accurately and fully
describes in all material respects (A) the accounting policies that the Company
believed as of the date thereof were the most important in the portrayal of the
Company’s financial condition and results of operations and that required
management’s most difficult, subjective or complex judgments; (B) the judgments
and uncertainties affecting the application of critical accounting policies; and
(C) the likelihood that materially different amounts would be reported under
different conditions or using different assumptions and an explanation thereof.

(hhh) The operations of the Company and its subsidiaries are and have been
conducted at all times in compliance with applicable financial recordkeeping and
reporting requirements of the Currency and Foreign Transactions Reporting Act of
1970, as amended, the money laundering statutes of all jurisdictions, the rules
and regulations thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any governmental agency
(collectively, the “Money Laundering Laws”) and no action, suit or proceeding by
or before any court or governmental agency, authority or body or any arbitrator
involving the Company or any of its subsidiaries with respect to the Money
Laundering Laws is pending or, to the knowledge of the Company or any Guarantor,
threatened, except, in each case, as would not reasonably be expected to have a
Material Adverse Effect.

(iii) Neither the Company nor any of its subsidiaries nor, to the knowledge of
the Company or any Guarantor, any director, officer, agent, employee or
affiliate of the Company or any of its subsidiaries is currently subject to any
U.S. sanctions administered by the Office of Foreign Assets Control of the U.S.
Treasury Department (“OFAC”); and the Company

 

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will not directly or indirectly use the proceeds of the offering, or lend,
contribute or otherwise make available such proceeds to any subsidiary, joint
venture partner or other person or entity, for the purpose of financing the
activities of any person currently subject to any U.S. sanctions administered by
OFAC.

(jjj) The Company has not taken any action or omitted to take any action (such
as issuing any press release relating to any Notes without an appropriate
legend) which may result in the loss by any of the Initial Purchasers of the
ability to rely on any stabilization safe harbor provided by the Financial
Services Authority under the Financial Services and Markets Act 2000 (the
“FSMA”). The Company has been informed of the guidance relating to stabilization
provided by the Financial Services Authority, in particular in Section MAR 2
Annex 2G of the Financial Services Handbook.

(kkk) Immediately after the consummation of the issuance and sale of the Notes
in accordance with the terms of this Agreement, each of the Company and each of
the Guarantors will be Solvent. As used in this paragraph, the term “Solvent”
means, with respect to a particular date, that on such date (i) the present fair
market value (or present fair saleable value) of the assets of the Company and
its subsidiaries and the Guarantors and their subsidiaries are not less than the
total amount required to pay the probable liabilities of the Company and its
subsidiaries and the Guarantors and their subsidiaries on their total existing
debts and liabilities (including contingent liabilities) as they become absolute
and matured, (ii) the Company and its subsidiaries and the Guarantors and their
subsidiaries are able to realize upon their assets and pay their debts and other
liabilities, contingent obligations and commitments as they mature and become
due in the normal course of business, (iii) assuming the sale of the Notes as
contemplated by this Agreement, the Pricing Disclosure Package and the Offering
Memorandum, the Company and its subsidiaries and the Guarantors and their
subsidiaries are not incurring debts or liabilities beyond their ability to pay
as such debts and liabilities mature and (iv) the Company and its subsidiaries
and the Guarantors and their subsidiaries are not engaged in any business or
transaction, and are not about to engage in any business or transaction, for
which their property would constitute unreasonably small capital after giving
due consideration to the prevailing practice in the industry in which the
Company and its subsidiaries and the Guarantors and their subsidiaries are
engaged. In computing the amount of such contingent liabilities at any time, it
is intended that such liabilities will be computed at the amount that, in the
light of all the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured liability.

(lll) As of the date hereof, (i) all royalties, rentals, deposits and other
amounts owed under the oil and gas leases constituting the oil and gas
properties of the Company, the Guarantors and their respective subsidiaries have
been properly and timely paid (other than amounts held in suspense accounts
pending routine payments or related to disputes about the proper identification
of royalty owners), and no amount of proceeds from the sale or production
attributable to the oil and gas properties of the Company, the Guarantors and
their respective subsidiaries are currently being held in suspense by any
purchaser thereof, except where such amounts due could not, individually or in
the aggregate, have a Material Adverse Effect, and (ii) there are no claims
under take-or-pay contracts pursuant to which natural gas purchasers have any
make-up rights affecting the interests of the Company, the Guarantors or their
respective subsidiaries in their oil and gas properties, except where such
claims could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.

 

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(mmm) Neither the Company nor any of its subsidiaries is a party to any
contract, agreement or understanding with any person (other than this Agreement)
that could give rise to a valid claim against the Initial Purchasers for a
brokerage commission, finder’s fee or like payment in connection with the
offering and sale of the Notes.

(nnn) Neither the Company nor any of its subsidiaries is in violation of or has
received notice of any violation with respect to any federal or state law
relating to discrimination in the hiring, promotion or pay of employees, nor any
applicable federal or state wage and hour laws, the violation of any of which
could reasonably be expected to have a Material Adverse Effect.

(ooo) Any certificate signed by any officer of the Company or any Guarantor and
delivered to the Representative or counsel for the Initial Purchasers in
connection with the offering of the Notes shall be deemed a representation and
warranty by the Company or any such Guarantor, jointly and severally, as to
matters covered thereby, to each Initial Purchaser.

3.Purchase of the Notes by the Initial Purchasers, Agreements to Sell, Purchase
and Resell.

(a) The Company and the Guarantors, jointly and severally hereby agree, on the
basis of the representations, warranties, covenants and agreements of the
Initial Purchasers contained herein and subject to all the terms and conditions
set forth herein, to issue and sell to the Initial Purchasers and, upon the
basis of the representations, warranties and agreements of the Company and the
Guarantors herein contained and subject to all the terms and conditions set
forth herein, each Initial Purchaser agrees, severally and not jointly, to
purchase from the Company, at a purchase price of 103.250% of the principal
amount thereof, the total principal amount of Notes set forth opposite the name
of such Initial Purchaser in Schedule I hereto. The Company and the Guarantors
shall not be obligated to deliver any of the securities to be delivered
hereunder except upon transfer of immediately available funds to the Company for
all of the securities to be purchased as provided herein.

(b) Each of the Initial Purchasers, severally and not jointly hereby represents
and warrants to the Company that it will offer the Notes for sale upon the terms
and conditions set forth in this Agreement and in the Pricing Disclosure
Package. Each of the Initial Purchasers, severally and not jointly, hereby
represents and warrants to, and agrees with, the Company, on the basis of the
representations, warranties and agreements of the Company and the Guarantors,
that such Initial Purchaser: (i) is a QIB with such knowledge and experience in
financial and business matters as are necessary in order to evaluate the merits
and risks of an investment in the Notes; (ii) in connection with the Exempt
Resales, will solicit offers to buy the Notes only from, and will offer to sell
the Notes only to, the Eligible Purchasers in accordance with this Agreement and
on the terms contemplated by the Pricing Disclosure Package; and (iii) will not
offer or sell the Notes, nor has it offered or sold the Notes by, or otherwise
engaged in, any form of general solicitation or general advertising (within the
meaning of Regulation D, including, but not limited to, advertisements,
articles, notices or other communications published in any newspaper, magazine,
or similar medium or broadcast over television or radio, or any seminar or
meeting whose attendees have been invited by any general solicitation or general
advertising)

 

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and will not engage in any directed selling efforts within the meaning of Rule
902 under the Securities Act, in connection with the offering of the Notes. The
Initial Purchasers have advised the Company that they will offer the Notes to
Eligible Purchasers at a price initially equal to 105.000% of the principal
amount thereof, plus accrued interest, if any, from the date of issuance of the
Notes. Such price may be changed by the Initial Purchasers at any time without
notice.

(c) Each of the Initial Purchasers, severally and not jointly, represents and
warrants to the Company that:

 

  (i) it has complied and will comply with all applicable provisions of the FSMA
with respect to anything done by it in relation to the Notes in, from or
otherwise involving the United Kingdom, and it has only communicated or caused
to be communicated and it will only communicate or cause to be communicated any
invitation or inducement to engage in investment activity (within the meaning of
section 21 of the FSMA) received by it in connection with the issue or sale of
any Notes, in circumstances in which section 21(1) of the FSMA does not apply to
the Company; and

 

  (ii) in relation to each Member State of the European Economic Area which has
implemented the Prospectus Directive (each, a Relevant Member State), with
effect from and including the date on which the Prospectus Directive is
implemented in that Relevant Member State (the “Relevant Implementation Date”),
it has not made and will not make an offer of the Notes to the public in that
Relevant Member State prior to the publication of a prospectus in relation to
the Notes which has been approved by the competent authority in that Relevant
Member State or, where appropriate, approved in another Relevant Member State
and notified to the competent authority in that Relevant Member State, all in
accordance with the Prospectus Directive, except that it may, with effect from
and including the Relevant Implementation Date, make an offer of the Notes to
the public in that Relevant Member State at any time:

 

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

 

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

 

  (C) to fewer than 100, or if the Relevant Member State has implemented the
relevant provision of the 2010 Prospectus Directive Amending Directive 150,
natural or legal persons (other than qualified investors) subject to obtaining
the prior consent of the representatives for any offer; or

 

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  (D) in any other circumstances which do not require the publication by the
issuer of a prospectus pursuant to Article 3 of the Prospectus Directive;

For the purposes of this representation, the expression an “offer of securities
to the public” in any Relevant Member State means the communication in any form
and by any means of sufficient information on the terms of the offer and the
Notes to be offered so as to enable an investor to decide to purchase or
subscribe the Notes, as the same may be varied in that Relevant Member State by
any measure implementing the Prospectus Directive in that Relevant Member State
and the expression “Prospectus Directive” means Directive 2003/71/EC (and
amendments thereto, including the 2010 Prospectus Directive Amendment Directive
to the extent implemented in the Relevant Member State) and includes any
relevant implementing measure in each Relevant Member State.

(d) The Initial Purchasers have not nor, prior to the later to occur of (A) the
Closing Date and (B) completion of the distribution of the Notes, will not, use,
authorize use of, refer to or distribute any material in connection with the
offering and sale of the Notes other than (i) the Preliminary Offering
Memorandum, the Pricing Disclosure Package, the Offering Memorandum, (ii) any
written communication that contains no “issuer information” (as defined in Rule
433(h)(2) under the Act) that was not included (including through incorporation
by reference) in the Preliminary Offering Memorandum or any Free Writing
Offering Document listed on Schedule IV hereto, (iii) the Free Writing Offering
Documents listed on Schedule IV hereto, (iv) any written communication prepared
by such Initial Purchaser and approved by the Company in writing, or (v) any
written communication relating to or that contains the terms of the Notes and/or
other information that was included (including through incorporation by
reference) in the Preliminary Offering Memorandum, the Pricing Disclosure
Package or the Offering Memorandum.

Each of the Initial Purchasers understands that the Company and, for purposes of
the opinions to be delivered to the Initial Purchasers pursuant to Sections 7(c)
and 7(d) hereof, counsel to the Company and counsel to the Initial Purchasers,
will rely upon the accuracy and truth of the foregoing representations,
warranties and agreements, and the Initial Purchasers hereby consents to such
reliance.

4. Delivery of the Notes and Payment Therefor. Delivery to the Initial
Purchasers of and payment for the Notes shall be made at the office of Vinson &
Elkins LLP, at 10:00 A.M., New York City time, on January 14, 2013 (the “Closing
Date”). The place of closing for the Notes and the Closing Date may be varied by
agreement between the Initial Purchasers and the Company.

 

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The Notes will be delivered to the Initial Purchasers, or the Trustee as
custodian for The Depository Trust Company (“DTC”), against payment by or on
behalf of the Initial Purchasers of the purchase price therefor by wire transfer
in immediately available funds, by causing DTC to credit the Notes to the
account of the Initial Purchasers at DTC. The Notes will be evidenced by one or
more global securities in definitive form (the “Global Notes”) and will be
registered, in the case of the Global Notes, in the name of Cede & Co. as
nominee of DTC, and in the other cases, in such names and in such denominations
as the Initial Purchasers shall request prior to 10:00 A.M., New York City time,
on the second business day preceding the Closing Date. The Notes to be delivered
to the Initial Purchasers shall be made available to the Initial Purchasers in
New York City for inspection and packaging not later than 10:00 A.M., New York
City time, on the business day next preceding the Closing Date.

5. Agreements of the Company and the Guarantors. The Company and the Guarantors,
jointly and severally, agree with each of the Initial Purchasers as follows:

(a) The Company and the Guarantors will furnish to the Initial Purchasers,
without charge, within one business day of the date of the Offering Memorandum,
such number of copies of the Offering Memorandum as may then be amended or
supplemented as they may reasonably request.

(b) The Company and the Guarantors will not make any amendment or supplement to
the Pricing Disclosure Package or to the Offering Memorandum of which the
Initial Purchasers shall not previously have been advised or to which they shall
reasonably object after being so advised.

(c) The Company and each of the Guarantors consents to the use of the Pricing
Disclosure Package and the Offering Memorandum in accordance with the securities
or Blue Sky laws of the jurisdictions in which the Notes are offered by the
Initial Purchasers and by all dealers to whom Notes may be sold, in connection
with the offering and sale of the Notes.

(d) If, at any time prior to completion of the distribution of the Notes by the
Initial Purchasers to Eligible Purchasers, any event occurs or information
becomes known that, in the judgment of the Company or any of the Guarantors or
in the opinion of counsel for the Initial Purchasers, should be set forth in the
Pricing Disclosure Package or the Offering Memorandum so that the Pricing
Disclosure Package or the Offering Memorandum, as then amended or supplemented,
does not include any untrue statement of material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, or if it is
necessary to supplement or amend the Pricing Disclosure Package or the Offering
Memorandum in order to comply with any law, the Company and the Guarantors will
forthwith prepare an appropriate supplement or amendment thereto, and will
expeditiously furnish to the Initial Purchasers and dealers a reasonable number
of copies thereof.

(e) None of the Company nor any Guarantor will make any offer to sell or
solicitation of an offer to buy the Notes that would constitute a Free Writing
Offering Document without the prior consent of the Representative, which consent
shall not be unreasonably withheld or delayed. If at any time following issuance
of a Free Writing Offering Document any event occurred or occurs as a result of
which such Free Writing Offering Document conflicts with the information in the
Preliminary Offering Memorandum, the Pricing Disclosure Package

 

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or the Offering Memorandum or, when taken together with the information in the
Preliminary Offering Memorandum, the Pricing Disclosure Package or the Offering
Memorandum, includes an untrue statement of a material fact or omits to state
any material fact necessary in order to make the statements therein, in the
light of the circumstances then prevailing, not misleading, as promptly as
practicable after becoming aware thereof, the Company will give notice thereof
to the Initial Purchasers through the Representative and, if requested by the
Representative, will prepare and furnish without charge to each Initial
Purchaser a Free Writing Offering Document or other document which will correct
such conflict, statement or omission.

(f) Promptly from time to time to take such action as the Initial Purchasers may
reasonably request to qualify the Notes for offering and sale under the
securities or Blue Sky laws of such jurisdictions as the Initial Purchasers may
request and to comply with such laws so as to permit the continuance of sales
and dealings therein in such jurisdictions for as long as may be necessary to
complete the distribution of the Notes; provided that in connection therewith
the Company shall not be required to (i) qualify as a foreign corporation in any
jurisdiction in which it would not otherwise be required to so qualify,
(ii) file a general consent to service of process in any such jurisdiction, or
(iii) subject itself to taxation in any jurisdiction in which it would not
otherwise be subject.

(g) For a period commencing on the date hereof and ending on the 90th day after
the date of the Offering Memorandum, the Company and the Guarantors agree not
to, directly or indirectly, (i) offer for sale, sell, or otherwise dispose of
(or enter into any transaction or device that is designed to, or would be
expected to, result in the disposition by any person at any time in the future
of) any debt securities of the Company substantially similar to the Notes or
securities convertible into or exchangeable for such debt securities of the
Company, or sell or grant options, rights or warrants with respect to such debt
securities of the Company or securities convertible into or exchangeable for
such debt securities of the Company, (ii) enter into any swap or other
derivatives transaction that transfers to another, in whole or in part, any of
the economic benefits or risks of ownership of such debt securities of the
Company, whether any such transaction described in clause (i) or (ii) above is
to be settled by delivery of debt securities of the Company or other securities,
in cash or otherwise, (iii) file or cause to be filed a registration statement,
including any amendments, with respect to the registration of debt securities of
the Company substantially similar to the Notes or securities convertible,
exercisable or exchangeable into debt securities of the Company substantially
similar to the Notes, or (iv) publicly announce an offering of any debt
securities of the Company substantially similar to the Notes or securities
convertible or exchangeable into debt securities substantially similar to the
Notes, in each case without the prior written consent of Wells Fargo Securities,
LLC, on behalf of the Initial Purchasers, except in exchange for the Exchange
Notes and the Exchange Guarantees in connection with the Exchange Offer.

(h) Upon request, so long as any of the Notes are outstanding, the Company and
the Guarantors will, furnish at their expense to the Initial Purchasers and to
the holders of the Notes the information required by Rule 144A(d)(4) under the
Securities Act (if any).

(i) The Company and the Guarantors will apply the net proceeds from the sale of
the Notes to be sold by it hereunder substantially in accordance with the
description set forth in the Pricing Disclosure Package and the Offering
Memorandum under the caption “Use of Proceeds.”

 

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(j) The Company, the Guarantors and their respective affiliates will not take,
directly or indirectly, any action designed to or that has constituted or that
reasonably could be expected to cause or result in the stabilization or
manipulation of the price of any security of the Company or the Guarantors in
connection with the offering of the Notes.

(k) The Company and the Guarantors will use their best efforts to permit the
Notes to be eligible for clearance and settlement through DTC.

(l) The Company and the Guarantors will not, and will not permit any of their
respective affiliates (as defined in Rule 144 under the Securities Act) to,
resell any of the Notes that have been acquired by any of them, except for Notes
purchased by the Company, the Guarantors or any of their respective affiliates
and resold in a transaction registered under the Securities Act.

(m) The Company and the Guarantors will take precautions designed to insure that
any offer or sale, direct or indirect, in the United States or to any U.S.
person (as defined in Rule 902 under the Securities Act), of any Notes or any
substantially similar security issued by the Company or any Guarantor, within
six months subsequent to the date on which the distribution of the Notes has
been completed (as notified to the Company by the Initial Purchasers), is made
under restrictions and other circumstances reasonably designed not to affect the
status of the offer and sale of the Notes in the United States and to U.S.
persons contemplated by this Agreement as transactions exempt from the
registration provisions of the Securities Act, including any sales pursuant to
Rule 144A under, or Regulations D or S of, the Securities Act.

(n) None of the Company or any of the Guarantors or any other person on its or
their behalf (other than the Initial Purchasers, as to which no covenant is
given) will (i) solicit offers for, or offer or sell, the Notes by means of any
form of general solicitation or general advertising within the meaning of Rule
502(c) of Regulation D or in any manner involving a public offering within the
meaning of Section 4(2) of the Securities Act or (ii) engage in any directed
selling efforts within the meaning of Regulation S, and all such persons will
comply with the offering restrictions requirement of Regulation S.

(o) The Company and the Guarantors agree to comply with all the terms and
conditions of the Registration Rights Agreement and all agreements set forth in
the representation letters of the Company and the Guarantors to DTC relating to
the approval of the Notes by DTC for “book entry” transfer.

(p) The Company and the Guarantors will use their best efforts to (i) do and
perform all things required or necessary to be done and performed under this
Agreement by them prior to the Closing Date, and (ii) satisfy all conditions
precedent to the Initial Purchasers’ obligations hereunder to purchase the
Notes.

6. Expenses. Whether or not the transactions contemplated by this Agreement are
consummated or this Agreement is terminated, the Company and the Guarantors,
jointly and severally, agree, to pay all expenses, costs, fees and taxes
incident to and in connection with:

 

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(a) the preparation, printing, filing and distribution of the Preliminary
Offering Memorandum, the Pricing Disclosure Package and the Offering Memorandum
(including, without limitation, financial statements and exhibits) and all
amendments and supplements thereto (including the fees, disbursements and
expenses of the Company’s and the Guarantors’ accountants and counsel, but not,
however, legal fees and expenses of the Initial Purchasers’ counsel incurred in
connection therewith); (b) the preparation, printing (including, without
limitation, word processing and duplication costs) and delivery of this
Agreement, the Indenture, the Registration Rights Agreement, all Blue Sky
memoranda and all other agreements, memoranda, correspondence and other
documents printed and delivered in connection therewith and with the Exempt
Resales (but not, however, legal fees and expenses of the Initial Purchasers’
counsel incurred in connection with any of the foregoing other than fees of such
counsel plus reasonable disbursements incurred in connection with the
preparation, printing and delivery of such Blue Sky memoranda); (c) the issuance
and delivery by the Company of the Notes and by the Guarantors of the Guarantees
and any taxes payable in connection therewith; (d) the qualification of the
Notes and Exchange Notes for offer and sale under the securities or Blue Sky
laws of the several states and any foreign jurisdictions as the Initial
Purchasers may designate (including, without limitation, the reasonable fees and
disbursements of the Initial Purchasers’ counsel relating to such registration
or qualification); (e) the furnishing of such copies of the Preliminary Offering
Memorandum, the Pricing Disclosure Package and the Offering Memorandum, and all
amendments and supplements thereto, as may be reasonably requested for use in
connection with the Exempt Resales; (f) the preparation of certificates for the
Notes (including, without limitation, printing and engraving thereof); (g) the
approval of the Notes by DTC for “book-entry” transfer (including fees and
expenses of counsel for the Initial Purchasers reasonably incurred in connection
therewith); (h) the rating of the Notes and the Exchange Notes; (i) the
obligations of the Trustee, any agent of the Trustee and the counsel for the
Trustee in connection with the Indenture, the Notes and the Guarantees, the
Exchange Notes; and the Exchange Guarantees; (j) the performance by the Company
and the Guarantors of their other obligations under this Agreement; and (k) all
travel expenses (including expenses related to chartered aircraft) of each
Initial Purchaser and the Company’s officers and employees and any other
expenses of each Initial Purchaser and the Company in connection with attending
or hosting meetings with prospective purchasers of the Notes, and expenses
associated with any electronic road show.

7. Conditions to Initial Purchasers’ Obligations. The respective obligations of
the Initial Purchasers hereunder are subject to the accuracy, when made and on
and as of the Closing Date, of the representations and warranties of the Company
and the Guarantors contained herein, to the performance by the Company and the
Guarantors of their respective obligations hereunder, and to each of the
following additional terms and conditions:

(a) The Initial Purchasers shall not have discovered and disclosed to the
Company on or prior to the Closing Date that the Pricing Disclosure Package or
the Offering Memorandum, or any amendment or supplement thereto, contains an
untrue statement of a fact which, in the opinion of Vinson & Elkins LLP, counsel
to the Initial Purchasers, is material or omits to state a fact which, in the
opinion of such counsel, is material and is necessary in order to make the
statements therein, in the light of the circumstances then prevailing, not
misleading.

 

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(b) All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the Notes, the Guarantees,
the Exchange Notes, the Exchange Guarantees, the Registration Rights Agreement,
the Indenture, the Pricing Disclosure Package and the Offering Memorandum, and
all other legal matters relating to this Agreement and the transactions
contemplated hereby shall be reasonably satisfactory in all material respects to
counsel for the Initial Purchasers, and the Company and the Guarantors shall
have furnished to such counsel all documents and information that they may
reasonably request to enable them to pass upon such matters.

(c) Thompson & Knight LLP shall have furnished to the Initial Purchasers its
written opinion, as counsel to the Company and the Guarantors, addressed to the
Initial Purchasers and dated the Closing Date, in form and substance reasonably
satisfactory to the Initial Purchasers, substantially in the form of Exhibit A
hereto.

(d) David Elkouri, General Counsel of the Company, shall have furnished to the
Initial Purchasers his written opinion, as counsel to the Company and the
Guarantors and dated the Closing Date, in form and substance reasonably
satisfactory to the Initial Purchasers, substantially in the form of Exhibit B
hereto.

(e) The Initial Purchasers shall have received from Vinson & Elkins LLP, counsel
for the Initial Purchasers, such opinion or opinions, dated the Closing Date,
with respect to the issuance and sale of the Notes, the Pricing Disclosure
Package, the Offering Memorandum and other related matters as the Initial
Purchasers may reasonably require, and the Company shall have furnished to such
counsel such documents and information as such counsel reasonably requests for
the purpose of enabling them to pass upon such matters.

(f) At the time of execution of this Agreement, the Initial Purchasers shall
have received from each of (a) Deloitte & Touche LLP, (b) UHY LLC and (c) Grant
Thornton LLP a letter, in form and substance satisfactory to the Initial
Purchasers, addressed to the Initial Purchasers and dated the date hereof
(i) confirming that they are independent public accountants within the meaning
of the Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of Regulation S-X
of the Commission and (ii) stating, as of the date hereof (or, with respect to
matters involving changes or developments since the respective dates as of which
specified financial information is given in the Pricing Disclosure Package, as
of a date not more than three days prior to the date hereof), the conclusions
and findings of such firm with respect to the financial information and
(iii) covering such other matters as are ordinarily covered by accountants’
“comfort letters” to underwriters in connection with registered public
offerings.

(g) With respect to the letters of each of (a) Deloitte & Touche LLP, (b) UHY
LLC and (c) Grant Thornton LLP referred to in the preceding paragraph and
delivered to the Initial Purchasers concurrently with the execution of this
Agreement (the “initial letter”), the Company shall have furnished to the
Initial Purchasers a “bring-down letter” of such accountants, addressed to the
Initial Purchasers and dated the Closing Date (i) confirming that they are
independent public accountants within the meaning of the Securities Act and are
in compliance with the applicable requirements relating to the qualification of
accountants under Rule 2-01 of Regulation S-X of the Commission, (ii) stating,
as of the Closing Date (or, with

 

26

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respect to matters involving changes or developments since the respective dates
as of which specified financial information is given in each of the Pricing
Disclosure Package or the Offering Memorandum, as of a date not more than three
days prior to the date of the Closing Date), the conclusions and findings of
such firm with respect to the financial information and other matters covered by
the initial letter, and (iii) confirming in all material respects the
conclusions and findings set forth in the initial letter.

(h) Except as described in the Pricing Disclosure Package and the Offering
Memorandum, (i) neither the Company, any Guarantor nor any of their respective
subsidiaries shall have sustained, since the date of the latest audited
financial statements included and incorporated by reference in the Pricing
Disclosure Package and the Offering Memorandum, any loss or interference with
its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action,
order or decree, or (ii) since such date, there shall not have been any change
in the capital stock or long-term debt of the Company, any Guarantor or any of
their respective subsidiaries or any change, or any development involving a
prospective change, in or affecting the business, properties, prospects,
financial condition, stockholders’ equity or results of operations of the
Company, the Guarantors and their respective subsidiaries, taken as a whole, the
effect of which, in any such case described in clause (i) or (ii), is,
individually or in the aggregate, in the judgment of the Representative, so
material and adverse as to make it impracticable or inadvisable to proceed with
the offering or the delivery of the Notes being delivered on the Closing Date on
the terms and in the manner contemplated in the Pricing Disclosure Package and
the Offering Memorandum.

(i) At the time of execution of this Agreement, the Initial Purchasers shall
have received from each of (a) Forrest A. Garb & Associates, (b) Cawley
Gillespie & Associates, Inc. and (c) W.D. Von Gonten & Co. an initial letter
(the “initial expert letter”), in form and substance satisfactory to the Initial
Purchasers, addressed to the Initial Purchasers and dated the date hereof and a
subsequent letter dated as of the Closing Date, which such letter shall cover
the period from any initial expert letter to the Closing Date, confirming that
they are independent with respect to the Company and stating the conclusions and
findings of such firm with respect to matters pertaining to the Company’s use of
the reports of proved reserves from Forrest A. Garb & Associates, GeoResources’
use of the reports of proved reserves from Cawley Gillespie & Associates, Inc.,
and the Company’s use of the estimates of proved reserves from W.D. Von Gonten &
Co. for the Williston Basin Assets, as is customary to initial purchasers in
connection with similar transactions.

(j) The Company and each Guarantor shall have furnished or caused to be
furnished to the Initial Purchasers dated as of the Closing Date a certificate
of the Chief Executive Officer and Chief Financial Officer of the Company and
each Guarantor, or other officers satisfactory to the Initial Purchasers, as to
such matters as the Representative may reasonably request, including, without
limitation, a statement that:

 

  (i) The representations, warranties and agreements of the Company and the
Guarantors in Section 2 are true and correct on and as of the Closing Date, and
the Company and the Guarantors have complied with all its agreements contained
herein and satisfied all the conditions on its part to be performed or satisfied
hereunder at or prior to the Closing Date; and

 

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  (ii) They have examined the Pricing Disclosure Package and the Offering
Memorandum, and, in their opinion, (A) the Pricing Disclosure Package, as of the
Applicable Time and as of the Closing Date, and the Offering Memorandum, as of
its date and as of the Closing Date, did not and do not contain any untrue
statement of a material fact and did not and do not omit to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading and (B) since the date of the Pricing
Disclosure Package and the Offering Memorandum, no event has occurred which
should have been set forth in a supplement or amendment to the Pricing
Disclosure Package and the Offering Memorandum.

(k) Subsequent to the earlier of the Applicable Time and the execution and
delivery of this Agreement (i) no downgrading shall have occurred in the rating
accorded the Company’s debt securities by any “nationally recognized statistical
rating organization,” as such term is used in Section 15E of the Exchange Act,
and (ii) no such organization shall have publicly announced that it has under
surveillance or review, or has changed its outlook with respect to, its rating
of the Notes or of any other debt securities issued or guaranteed by the Company
or any of the Guarantors (in each case, other than an announcement with positive
implications of a possible upgrading); provided, however, that this Section 7(k)
shall not apply to the announcement by Moody’s Investors Service, Inc. on
January 9, 2012 of its initiation of a review of the Company’s debt securities.

(l) The Notes shall be eligible for clearance and settlement through DTC.

(m) The Company and the Guarantors shall have executed and delivered the
Registration Rights Agreement, and the Initial Purchasers shall have received an
original copy thereof, duly executed by the Company and the Guarantors.

(n) Subsequent to the execution and delivery of this Agreement there shall not
have occurred any of the following: (i) trading in securities generally on the
New York Stock Exchange or the NYSE Amex Equities or in the over-the-counter
market, or trading in any securities of the Company on any exchange or in the
over-the-counter market, shall have been suspended or materially limited or the
settlement of such trading generally shall have been materially disrupted or
minimum prices shall have been established on any such exchange or such market
by the Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction, (ii) a general moratorium on
commercial banking activities shall have been declared by federal or state
authorities, (iii) the United States shall have become engaged in hostilities,
there shall have been an escalation in hostilities involving the United States
or there shall have been a declaration of a national emergency or war by the
United States, (iv) a material disruption in commercial banking or securities
settlement or clearance services in the United States, or (v) there shall have
occurred such a material adverse change in general economic, political or
financial conditions, including, without limitation, as a result of terrorist
activities after the date hereof (or the effect of international conditions on
the financial

 

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markets in the United States shall be such), as to make it, in the judgment of
the Representative, impracticable or inadvisable to proceed with the offering or
delivery of the Notes being delivered on the Closing Date on the terms and in
the manner contemplated in the Pricing Disclosure Package and the Offering
Memorandum or that, in the judgment of the Representative, could materially and
adversely affect the financial markets or the markets for the Notes and other
debt securities.

(o) There shall exist at and as of the Closing Date no condition that: (i) would
constitute a default (or an event that with notice or the lapse of time, or
both, would constitute a default) under the Indenture or (ii) a breach under the
Purchase and Sale Agreement as in effect at the Closing Date (or an event that
with notice or lapse of time, or both, would constitute such a breach) excluding
for purposes of (ii) any breach or prospective breach of the Purchase and Sale
Agreement that would not reasonably be expected to have a Pro Forma Material
Adverse Effect.

(p) The Notes and the notation of guarantees shall be executed by the Company
and the Guarantors in substantially the respective forms set forth in the
Indenture and the Notes shall be authenticated and delivered by the Trustee in
accordance with Section 2.2 of the Indenture.

All opinions, letters, evidence and certificates mentioned above or elsewhere in
this Agreement shall be deemed to be in compliance with the provisions hereof
only if they are in form and substance reasonably satisfactory to counsel for
the Initial Purchasers.

8. Indemnification and Contribution.

(a) The Company and each Guarantor, hereby agrees, jointly and severally, to
indemnify and hold harmless each Initial Purchaser, its affiliates, directors,
officers and employees and each person, if any, who controls any Initial
Purchaser within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act, from and against any loss, claim, damage or liability,
joint or several, or any action in respect thereof (including, but not limited
to, any loss, claim, damage, liability or action relating to purchases and sales
of Notes), to which that Initial Purchaser, affiliate, director, officer,
employee or controlling person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained (A) in any Free Writing Offering Document, the
Preliminary Offering Memorandum, the Pricing Disclosure Package or the Offering
Memorandum or in any amendment or supplement thereto, (B) in any Blue Sky
application or other document prepared or executed by the Company or any
Guarantor (or based upon any written information furnished by the Company or any
Guarantor) specifically for the purpose of qualifying any or all of the Notes
under the securities laws of any state or other jurisdiction (any such
application, document or information being hereinafter called a “Blue Sky
Application”), or (C) in any materials or information provided to investors by,
or with the approval of, the Company or any Guarantor in connection with the
marketing of the offering of the Notes (“Marketing Materials”), including any
road show or investor presentations made to investors by the Company (whether in
person or electronically) or any materials prepared for the purpose of
compliance with the Canadian securities laws, or (ii) the omission or alleged
omission to state in any Free Writing Offering Document, the Preliminary
Offering Memorandum, the Pricing

 

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Disclosure Package or the Offering Memorandum, or in any amendment or supplement
thereto, or in any Blue Sky Application or in any Marketing Materials, any
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, and shall
reimburse each Initial Purchaser and each such affiliate, director, officer,
employee or controlling person promptly upon demand for any legal or other
expenses reasonably incurred by that Initial Purchaser, affiliate, director,
officer, employee or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred; provided, however, that the Company and
the Guarantors shall not be liable in any such case to the extent that any such
loss, claim, damage, liability or action arises out of, or is based upon, any
untrue statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Offering Memorandum, the Pricing Disclosure Package or
Offering Memorandum, or in any such amendment or supplement thereto, or in any
Blue Sky Application or in any Marketing Materials, in reliance upon and in
conformity with written information concerning such Initial Purchaser furnished
to the Company through the Representative by or on behalf of any Initial
Purchaser specifically for inclusion therein, which information consists solely
of the information specified in Section 8(e). The foregoing indemnity agreement
is in addition to any liability that the Company or the Guarantors may otherwise
have to any Initial Purchaser or to any affiliate, director, officer, employee
or controlling person of that Initial Purchaser.

(b) Each Initial Purchaser, severally and not jointly, hereby agrees to
indemnify and hold harmless the Company, each Guarantor, their respective
officers and employees, each of their respective directors, and each person, if
any, who controls the Company or any Guarantor within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act, from and against any
loss, claim, damage or liability, joint or several, or any action in respect
thereof, to which the Company, any Guarantor or any such director, officer,
employee or controlling person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained (A) in any Free Writing Offering Document, Preliminary
Offering Memorandum, the Pricing Disclosure Package or the Offering Memorandum
or in any amendment or supplement thereto, (B) in any Blue Sky Application, or
(C) in any Marketing Materials, or (ii) the omission or alleged omission to
state in any Free Writing Offering Document, Preliminary Offering Memorandum,
the Pricing Disclosure Package or the Offering Memorandum, or in any amendment
or supplement thereto, or in any Blue Sky Application or in any Marketing
Materials any material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
but in each case only to the extent that the untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information concerning such Initial Purchaser furnished
to the Company through the Representative by or on behalf of that Initial
Purchaser specifically for inclusion therein, which information is limited to
the information set forth in Section 8(e). The foregoing indemnity agreement is
in addition to any liability that any Initial Purchaser may otherwise have to
the Company, any Guarantor or any such director, officer, employee or
controlling person.

(c) Promptly after receipt by an indemnified party under this Section 8 of
notice of any claim or the commencement of any action, the indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under this Section 8, notify the

 

30

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indemnifying party in writing of the claim or the commencement of that action;
provided, however, that the failure to notify the indemnifying party shall not
relieve it from any liability that it may have under this Section 8 except to
the extent it has been materially prejudiced (through the forfeiture of
substantive rights or defenses) by such failure and; provided, further, that the
failure to notify the indemnifying party shall not relieve it from any liability
that it may have to an indemnified party otherwise than under this paragraph
(a) or (b) of this Section 8. If any such claim or action shall be brought
against an indemnified party, and it shall notify the indemnifying party
thereof, the indemnifying party shall be entitled to participate therein and, to
the extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the indemnifying party
to the indemnified party of its election to assume the defense of such claim or
action, the indemnifying party shall not be liable to the indemnified party
under this Section 8 for any legal or other expenses subsequently incurred by
the indemnified party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, that the Initial
Purchasers shall have the right to employ counsel to represent jointly the
Initial Purchasers and their respective affiliates, directors, officers,
employees and controlling persons who may be subject to liability arising out of
any claim in respect of which indemnity may be sought by the Initial Purchasers
against the Company or any Guarantor under this Section 8, if (i) the Company,
the Guarantors and the Initial Purchasers shall have so mutually agreed;
(ii) the Company and the Guarantors have failed within a reasonable time to
retain counsel reasonably satisfactory to the Initial Purchasers; (iii) the
Initial Purchasers and their respective affiliates, directors, officers,
employees and controlling persons shall have reasonably concluded, based on the
advice of counsel, that there may be legal defenses available to them that are
different from or in addition to those available to the Company and the
Guarantors; or (iv) the named parties in any such proceeding (including any
impleaded parties) include both the Initial Purchasers or their respective
affiliates, directors, officers, employees or controlling persons, on the one
hand, and the Company and the Guarantors, on the other hand, and representation
of both sets of parties by the same counsel would present a conflict due to
actual or potential differing interests between them, and in any such event the
fees and expenses of such separate counsel shall be paid by the Company and the
Guarantors. No indemnifying party shall (x) without the prior written consent of
the indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding and does not include a
statement as to, or an admission of fault, culpability or a failure to act by or
on behalf of any indemnified party, or (y) be liable for any settlement of any
such action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with the consent of the indemnifying
party or if there be a final judgment of the plaintiff in any such action, the
indemnifying party agrees to indemnify and hold harmless any indemnified party
from and against any loss or liability by reason of such settlement or judgment.

(d) If the indemnification provided for in this Section 8 shall for any reason
be unavailable to or insufficient to hold harmless an indemnified party under
Section 8(a) or 8(b) in respect of any loss, claim, damage or liability, or any
action in respect thereof, referred to therein, then each indemnifying party
shall, in lieu of indemnifying such indemnified party,

 

31

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contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company and the Guarantors, on the one hand, and the Initial
Purchasers, on the other, from the offering of the Notes, or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Guarantors, on the one hand, and the Initial Purchasers, on the other, with
respect to the statements or omissions that resulted in such loss, claim, damage
or liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Guarantors, on the one hand, and the Initial Purchasers, on the other, with
respect to such offering shall be deemed to be in the same proportion as the
total net proceeds from the offering of the Notes purchased under this Agreement
(before deducting expenses) received by the Company and the Guarantors, on the
one hand, and the total discounts and commissions received by the Initial
Purchasers with respect to the Notes purchased under this Agreement, on the
other hand, bear to the total gross proceeds from the offering of the Notes
under this Agreement as set forth on the cover page of the Offering Memorandum.
The relative fault shall be determined by reference to whether the untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the Company, the
Guarantors, or the Initial Purchasers, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent
such statement or omission. For purposes of the preceding two sentences, the net
proceeds deemed to be received by the Company shall be deemed to be also for the
benefit of the Guarantors, and information supplied by the Company shall also be
deemed to have been supplied by the Guarantors. The Company, the Guarantors, and
the Initial Purchasers agree that it would not be just and equitable if
contributions pursuant to this Section 8(d) were to be determined by pro rata
allocation (even if the Initial Purchasers were treated as one entity for such
purpose) or by any other method of allocation that does not take into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, damage or liability, or
action in respect thereof, referred to above in this Section 8(d) shall be
deemed to include, for purposes of this Section 8(d), any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8(d), no Initial Purchaser shall be required to
contribute any amount in excess of the amount by which the net proceeds from the
sale to Eligible Purchasers of the Notes initially purchased by it exceeds the
amount of any damages that such Initial Purchaser has otherwise paid or become
liable to pay by reason of any untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Initial Purchasers’ obligations to contribute as provided
in this Section 8(d) are several in proportion to their respective purchase
obligations and not joint.

(e) The Initial Purchasers severally confirm and the Company and the Guarantors
acknowledge and agree that the statements contained in the second sentence under
the heading “Plan of Distribution—Rule 144A and Regulation S” in the Pricing
Disclosure Package and the Offering Memorandum are correct and constitute the
only information concerning such Initial Purchasers furnished in writing to the
Company or any Guarantor by or on behalf of the Initial Purchasers specifically
for inclusion in any Free Writing Offering Document, the Preliminary Offering
Memorandum, the Pricing Disclosure Package, the Offering Memorandum, or in any
amendment or supplement thereto or in any Blue Sky Application or in any
Marketing Materials.

 

32

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9. Defaulting Initial Purchasers.

(a) If, on the Closing Date, any Initial Purchaser defaults in its obligations
to purchase the Notes that it has agreed to purchase under this Agreement, the
remaining non-defaulting Initial Purchasers may in their discretion arrange for
the purchase of such Notes by the non-defaulting Initial Purchasers or other
persons satisfactory to the Company on the terms contained in this Agreement.
If, within 36 hours after any such default by any Initial Purchaser, the
non-defaulting Initial Purchasers do not arrange for the purchase of such Notes,
then the Company shall be entitled to a further period of 36 hours within which
to procure other persons satisfactory to the non-defaulting Initial Purchasers
to purchase such Notes on such terms. In the event that within the respective
prescribed periods, the non-defaulting Initial Purchasers notify the Company
that they have so arranged for the purchase of such Notes, or the Company
notifies the non-defaulting Initial Purchasers that it has so arranged for the
purchase of such Notes, either the non-defaulting Initial Purchasers or the
Company may postpone the Closing Date for up to seven full business days in
order to effect any changes that in the opinion of counsel for the Company or
counsel for the Initial Purchasers may be necessary in the Pricing Disclosure
Package, the Offering Memorandum or in any other document or arrangement, and
the Company agrees to promptly prepare any amendment or supplement to the
Pricing Disclosure Package or the Offering Memorandum that effects any such
changes. As used in this Agreement, the term “Initial Purchaser” includes, for
all purposes of this Agreement unless the context requires otherwise, any party
not listed in Schedule I hereto that, pursuant to this Section 9, purchases
Notes that a defaulting Initial Purchaser agreed but failed to purchase.

(b) If, after giving effect to any arrangements for the purchase of the Notes of
a defaulting Initial Purchaser or Initial Purchasers by the non-defaulting
Initial Purchasers and the Company as provided in paragraph (a) above, the
aggregate principal amount of such Notes that remains unpurchased does not
exceed one-eleventh of the aggregate principal amount of all the Notes, then the
Company shall have the right to require each non-defaulting Initial Purchaser to
purchase the principal amount of Notes that such Initial Purchaser agreed to
purchase hereunder plus such Initial Purchaser’s pro rata share (based on the
principal amount of Notes that such Initial Purchaser agreed to purchase
hereunder) of the Notes of such defaulting Initial Purchaser or Initial
Purchasers for which such arrangements have not been made; provided that the
non-defaulting Initial Purchasers shall not be obligated to purchase more than
110% of the aggregate principal amount of Notes that it agreed to purchase on
the Closing Date pursuant to the terms of Section 3.

(c) If, after giving effect to any arrangements for the purchase of the Notes of
a defaulting Initial Purchaser or Initial Purchasers by the non-defaulting
Initial Purchasers and the Company as provided in paragraph (a) above, the
aggregate principal amount of such Notes that remains unpurchased exceeds
one-eleventh of the aggregate principal amount of all the Notes, or if the
Company shall not exercise the right described in paragraph (b) above, then this
Agreement shall terminate without liability on the part of the non-defaulting
Initial Purchasers. Any termination of this Agreement pursuant to this Section 9
shall be without liability on the part

 

33

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of the Company or the Guarantors, except that the Company and each of the
Guarantors will continue to be liable for the payment of expenses as set forth
in Sections 6 and 11 to the non-defaulting Initial Purchasers and except that
the provisions of Section 8 shall not terminate and shall remain in effect.

(d) Nothing contained herein shall relieve a defaulting Initial Purchaser of any
liability it may have to the Company, the Guarantors or any non-defaulting
Initial Purchaser for damages caused by its default.

10. Termination. The obligations of the Initial Purchasers hereunder may be
terminated by the Initial Purchasers by notice given to and received by the
Company prior to delivery of and payment for the Notes if, prior to that time,
any of the events described in Sections 7(h), (i), (l) or (q) shall have
occurred or if the Initial Purchasers shall decline to purchase the Notes for
any other reason permitted under this Agreement.

11. Reimbursement of Initial Purchasers’ Expenses. If (a) the Company for any
reason fails to tender the Notes for delivery to the Initial Purchasers, or
(b) the Initial Purchasers shall decline to purchase the Notes for any reason
permitted under this Agreement, the Company and the Guarantors shall jointly and
severally reimburse the Initial Purchasers for all reasonable out-of-pocket
expenses (including fees and disbursements of counsel for the Initial
Purchasers) incurred by the Initial Purchasers in connection with this Agreement
and the proposed purchase of the Notes, and upon demand the Company and the
Guarantors shall pay the full amount thereof to the Initial Purchasers. If this
Agreement is terminated pursuant to Section 9 by reason of the default of one or
more Initial Purchasers, the Company and the Guarantors shall not be obligated
to reimburse any defaulting Initial Purchaser on account of those expenses.

12. Notices, etc. All statements, requests, notices and agreements hereunder
shall be in writing, and:

(a) if to any Initial Purchasers, shall be delivered or sent by hand delivery,
mail, telex, overnight courier or facsimile transmission to Wells Fargo
Securities, LLC, 301 S. College Street, Charlotte, North Carolina 28288,
Attention: Transaction Management Department with a copy to Vinson & Elkins LLP,
1001 Fannin Street, Suite 2500, Houston, Texas 77002, Attention: Kathryn Wilson
(Fax: (713) 615-5792);

(b) if to the Company or any Guarantor, shall be delivered or sent by mail,
telex, overnight courier or facsimile transmission to Halcón Resources
Corporation, 1000 Louisiana Street, Suite 6700, Houston, Texas 77002, Attention:
David Elkouri, with a copy to Thompson & Knight LLP, 333 Clay Street, Suite
3300, Houston, Texas 77002, Attention: William T. Heller IV;

provided, however, that any notice to an Initial Purchaser pursuant to
Section 8(c) shall be delivered or sent by hand delivery, mail, telex or
facsimile or electronic transmission to such Initial Purchaser at its address
set forth in its acceptance telex to Wells Fargo Securities, LLC, which address
will be supplied to any other party hereto by Wells Fargo Securities, LLC upon
request. Any such statements, requests, notices or agreements shall take effect
at the time of receipt thereof. The Company shall be entitled to act and rely
upon any request, consent, notice or agreement given or made on behalf of the
Initial Purchasers by Wells Fargo Securities, LLC.

 

34

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(c) In accordance with the requirements of the USA Patriot Act (Title III of
Pub. L. 107-56 (signed into law October 26, 2001)), the Initial Purchasers are
required to obtain, verify and record information that identifies their
respective clients, including the Company, which information may include the
name and address of their respective clients, as well as other information that
will allow the Initial Purchasers to properly identify their respective clients.

13. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the
benefit of and be binding upon the Initial Purchasers, the Company, the
Guarantors and their respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except that
the representations, warranties, indemnities and agreements of the Company and
the Guarantors contained in this Agreement shall also be deemed to be for the
benefit of the affiliates, directors, officers and employees of the Initial
Purchasers and each person or persons, if any, controlling any Initial Purchaser
within the meaning of Section 15 of the Securities Act. Nothing in this
Agreement is intended or shall be construed to give any person, other than the
persons referred to in this Section 13, any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision contained herein.

14. Survival. The respective indemnities, rights of contribution,
representations, warranties and agreements of the Company, the Guarantors and
the Initial Purchasers contained in this Agreement or made by or on behalf of
them, respectively, pursuant to this Agreement, shall survive the delivery of
and payment for the Notes and shall remain in full force and effect, regardless
of any termination of this Agreement or any investigation made by or on behalf
of any of them or any person controlling any of them.

15. Definition of the Terms “Business Day”, “Affiliate”, and “Subsidiary”. For
purposes of this Agreement, (a) “business day” means any day on which the New
York Stock Exchange, Inc. is open for trading, and (b) “affiliate” and
“subsidiary” have the meanings set forth in Rule 405 under the Securities Act.

16. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.

17. Waiver of Jury Trial. The Company and each of the Initial Purchasers hereby
irrevocably waives, to the fullest extent permitted by applicable law, any and
all right to trial by jury in any legal proceeding arising out of or relating to
this Agreement or the transactions contemplated hereby.

18. No Fiduciary Duty. The Company and the Guarantors acknowledge and agree that
in connection with this offering, or any other services the Initial Purchasers
may be deemed to be providing hereunder, notwithstanding any preexisting
relationship, advisory or otherwise, between the parties or any oral
representations or assurances previously or subsequently made by the Initial
Purchasers: (a) no fiduciary or agency relationship between the Company, any
Guarantor and any other person, on the one hand, and the Initial Purchasers, on
the other, exists;

 

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(b) the Initial Purchasers are not acting as advisors, expert or otherwise, to
the Company or the Guarantors, including, without limitation, with respect to
the determination of the purchase price of the Notes, and such relationship
between the Company and the Guarantors, on the one hand, and the Initial
Purchasers, on the other, is entirely and solely commercial, based on
arms-length negotiations; (c) any duties and obligations that the Initial
Purchasers may have to the Company and the Guarantors shall be limited to those
duties and obligations specifically stated herein; (d) the Initial Purchasers
and their respective affiliates may have interests that differ from those of the
Company and the Guarantors; and (e) the Company and the Guarantors have
consulted their own legal and financial advisors to the extent they deemed
appropriate. The Company and the Guarantors hereby waive any claims that the
Company and the Guarantors may have against the Initial Purchasers with respect
to any breach of fiduciary duty in connection with the Notes.

19. Counterparts. This Agreement may be executed in one or more counterparts
and, if executed in more than one counterpart, the executed counterparts shall
each be deemed to be an original but all such counterparts shall together
constitute one and the same instrument.

20. Headings. The headings herein are inserted for convenience of reference only
and are not intended to be part of, or to affect the meaning or interpretation
of, this Agreement.

 

36

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If the foregoing correctly sets forth the agreement between the Company, the
Guarantors, and the Initial Purchasers, please indicate your acceptance in the
space provided for that purpose below.

 

Very truly yours, HALCÓN RESOURCES CORPORATION By:   /s/ David S. Elkouri  
Name:   David S. Elkouri   Title:     Executive Vice President and General
            Counsel GREAT PLAINS PIPELINE COMPANY HALCÓN ENERGY PROPERTIES, INC.
HALCÓN FIELD SERVICES, LLC HALCÓN HOLDINGS, INC. HALCÓN OPERATING CO., INC.
HALCÓN RESOURCES OPERATING, INC. HALCÓN LOUISIANA OPERATING, L.P.  

By: HLP GULF STATES, LLC,

 

its General Partner

HLP GULF STATES, LLC HRC ENERGY HOLDINGS (LA), INC. HRC ENERGY LOUISIANA, LLC
HRC ENERGY RESOURCES (LAFOURCHE), INC. HRC ENERGY RESOURCES (WV), INC. HALCÓN
GEO HOLDINGS, LLC HALCÓN WILLISTON I, LLC HALCÓN WILLISTON II, LLC PONTOTOC
PRODUCTION COMPANY, INC. AROC (TEXAS), INC. CATENA OIL & GAS LLC G3 ENERGY, LLC
G3 OPERATING, LLC SOUTHERN BAY OPERATING, L.L.C. SOUTHERN BAY ENERGY, LLC
SOUTHERN BAY LOUISIANA, LLC WESTERN STAR DRILLING COMPANY By:   /s/ David S.
Elkouri Name:   David S. Elkouri Title:   Executive Vice President and General
Counsel

Signature Page to Purchase Agreement

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

Accepted:

WELLS FARGO SECURITIES, LLC

For itself and as Representative of the several

Initial Purchasers named on Schedule I hereto.

 

By:   /s/ Jeff Gore   Authorized Signatory

Signature Page to Purchase Agreement

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

SCHEDULE I

 

     Principal        Amount of        Notes        to be  

Initial Purchasers

   Purchased  

Wells Fargo Securities, LLC

   $ 150,000,000   

RBC Capital Markets, LLC

     120,000,000   

J.P. Morgan Securities LLC

     90,000,000   

Barclays Capital Inc.

     45,000,000   

Goldman, Sachs & Co.

     45,000,000   

BMO Capital Markets Corp.

     13,500,000   

Merrill Lynch, Pierce, Fenner & Smith Incorporated

     13,500,000   

Capital One Southcoast, Inc.

     13,500,000   

Credit Agricole Securities (USA) Inc.

     13,500,000   

Deutsche Bank Securities Inc.

     13,500,000   

ING Financial Markets LLC

     13,500,000   

Natixis Securities Americas LLC

     13,500,000   

RBS Securities Inc.

     13,500,000   

SunTrust Robinson Humphrey, Inc.

     13,500,000   

Credit Suisse Securities (USA) LLC

     10,500,000   

Comerica Securities, Inc.

     6,000,000   

KeyBanc Capital Markets Inc.

     6,000,000   

Scotia Capital (USA) Inc.

     6,000,000      

 

 

 

Total

   $ 600,000,000      

 

 

 

 

I-1

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SCHEDULE II

LIST OF GUARANTORS

 

     State of Incorporation

Subsidiary

   or Organization

Great Plains Pipeline Company

   Delaware

Halcón Energy Properties, Inc.

   Delaware

Halcón Field Services, LLC

   Delaware

Halcón Holdings, Inc.

   Delaware

Halcón Operating Co., Inc.

   Texas

Halcón Resources Operating, Inc.

   Delaware

Halcón Louisiana Operating, L.P.

   Delaware

HLP Gulf States, LLC

   Oklahoma

HRC Energy Holdings (LA), Inc.

   Delaware

HRC Energy Louisiana, LLC

   Delaware

HRC Energy Resources (LaFourche), Inc.

   Louisiana

HRC Energy Resources (WV), Inc.

   Delaware

Halcón GEO Holdings, LLC

   Delaware

Halcón Williston I, LLC

   Texas

Halcón Williston II, LLC

   Texas

Pontotoc Production Company, Inc.

   Texas

AROC (Texas), Inc.

   Texas

Catena Oil & Gas LLC

   Texas

G3 Energy, LLC

   Colorado

G3 Operating, LLC

   Colorado

Southern Bay Operating, L.L.C.

   Texas

Southern Bay Energy, LLC

   Texas

Southern Bay Louisiana, LLC

   Texas

Western Star Drilling Company

   North Dakota

 

II-1

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SCHEDULE III

 

LOGO [g466794g79d57.jpg]

HALCÓN RESOURCES CORPORATION

$600,000,000 Re-Opening of 8 7/8% Senior Notes due 2021

January 9, 2013

Pricing Supplement

Pricing Supplement dated January 9, 2013 to the Preliminary Offering Memorandum
dated January 8, 2013 of Halcón Resources Corporation. This Pricing Supplement
is qualified in its entirety by reference to the Preliminary Offering
Memorandum. The information in this Pricing Supplement supplements the
Preliminary Offering Memorandum and supersedes the information in the
Preliminary Offering Memorandum to the extent it is inconsistent with the
information in the Preliminary Offering Memorandum. Capitalized terms used in
this Pricing Supplement but not defined have the meanings given them in the
Preliminary Offering Memorandum.

 

Issuer    Halcón Resources Corporation Guarantors    The notes will be
guaranteed on a senior unsecured basis by the Issuer’s current subsidiaries and
by any future restricted subsidiaries that guarantee the Issuer’s indebtedness
under a credit facility. Title of Securities    8 7/8% Senior Notes due 2021
(the “Notes”) Aggregate Principal Amount    $600,000,000 Distribution    144A /
Regulation S with Registration Rights Maturity Date    May 15, 2021 Issue Price
   105.000%, plus interest accrued from November 6, 2012 Coupon    8.875% Yield
to Worst    7.787% Interest Payment Dates    May 15 and November 15 of each
year, beginning on May 15, 2013 Record Dates    May 1 and November 1 of each
year Trade Date    January 9, 2013 Settlement Date    January 14, 2013 (T+3)
Optional Redemption    On or after November 15, 2016, at the following
redemption prices (expressed as a percentage of principal amount), plus accrued
and unpaid interest, if any, on the Notes redeemed during the twelve-month
period indicated beginning on November 15 of the years indicated below:

 

Year

  

Price

 

2016

     104.438 % 

2017

     102.219 % 

2018 and thereafter

     100.000 % 

 

III-1

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Equity Clawback    Up to 35% at 108.875% prior to November 15, 2015 Make-Whole
Redemption    Make-whole redemption at Treasury Rate + 50 basis points prior to
November 15, 2016 Change of Control Put    101% plus accrued and unpaid interest
(following a Rating Decline) Joint Global Coordinators   

Wells Fargo Securities, LLC

RBC Capital Markets, LLC

Joint Book-Running Managers   

J.P. Morgan Securities LLC

Barclays Capital Inc.

Goldman, Sachs & Co.

Co-Managers   

BMO Capital Markets Corp.

Merrill Lynch, Pierce, Fenner & Smith Incorporated

Capital One Southcoast, Inc.

Credit Agricole Securities (USA) Inc.

Deutsche Bank Securities Inc.

ING Financial Markets LLC

Natixis Securities Americas LLC

RBS Securities Inc.

SunTrust Robinson Humphrey, Inc.

Credit Suisse Securities (USA) LLC

Comerica Securities, Inc.

KeyBanc Capital Markets Inc.

Scotia Capital (USA) Inc.

CUSIP Numbers   

Rule 144A: 40537Q AC4

Regulation S: U4057P AC9

ISIN Numbers   

Rule 144A: US40537QAC42

Regulation S: USU4057P AC96

Denominations    Minimum denominations of $2,000 and integral multiples of
$1,000 in excess thereof

 

 

All information (including financial information) presented in the Preliminary
Offering Memorandum is deemed to have changed to the extent affected by the
changes described herein.

Additional Changes to the Preliminary Offering Memorandum:

Use of Proceeds

We estimate the net proceeds of this offering will be approximately $619.5
million after deducting the initial purchasers’ discounts and commissions and
before estimated offering expenses, but excluding accrued interest.

Capitalization

The “Halcón Pro Forma As Adjusted” column of the “Capitalization” table on page
41 of the Preliminary Offering Memorandum is amended to show Cash and cash
equivalents of $712.4 million, 8.875% senior notes due 2012 of $1,374.4 million,
Total long-term debt of $2,364.4 million and Total Capitalization of $4,448.9
million.

Footnote 5 to the Capitalization Table is hereby restated as follows:

Includes $750.0 million principal amount of existing notes, net of $5.6 million
discount, and pro forma as adjusted includes the additional $600 million
principal amount of notes offered hereby, including $30.0 million issue premium
on such notes.

 

 

This material is strictly confidential and has been prepared by the Issuer
solely for use in connection with the proposed offering of the securities
described in the Preliminary Offering Memorandum. This material is personal to
each offeree and does not constitute an offer to any other person or the public
generally to subscribe for or otherwise acquire the securities. Please refer to
the Preliminary Offering Memorandum for a complete description.

The securities have not been registered under the Securities Act of 1933, as
amended (the “Securities Act”), and are being offered only to (1) “qualified
institutional buyers” as defined in Rule 144A under the Securities Act and
(2) outside the United States to non-U.S. persons in compliance with Regulation
S under the Securities Act, and this communication is only being distributed to
such persons.

 

III-2

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This communication is not an offer to sell the securities and it is not a
solicitation of an offer to buy the securities in any jurisdiction to any person
to whom it is unlawful to make such offer or soliciation in such jurisdiction.

Any disclaimers or notices that may appear on this Pricing Supplement below the
text of this legend are not applicable to this Pricing Supplement and should be
disregarded. Such disclaimers may have been electronically generated as a result
of this Pricing Supplement having been sent via, or posted on, Bloomberg or
another electronic mail system.

 

III-3

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SCHEDULE IV

A. Insert list of each document provided as an amendment or supplement to the
Preliminary Offering Memorandum.

B. Insert list of any “road show” materials that are Free Writing Offering
Documents.

 

IV-1