SECOND AMENDMENT TO LOAN AGREEMENT

THIS SECOND AMENDMENT TO LOAN AGREEMENT (this “Amendment”) is entered into as of
the 2nd day of January 2009, by and among PERMIAN LEGEND PETROLEUM, LP, a Texas
limited partnership, whose address 3327 West Wadley Avenue, Suite 3, No. 267,
Midland, Texas 79707 (the “Borrower”); PERMIAN LEGEND, LLC, a Texas limited
liability company, whose address is also 3327 West Wadley Avenue, Suite 3,
No. 267, Midland, Texas 79707 (“Permian LLC”); LISA P. HAMILTON, an individual,
whose address is 3327 West Wadley Avenue, Suite 3, No. 267, Midland, Texas 79707
(“Hamilton”); RONNIE L. STEINOCHER, also an individual, whose address is 2100
West Wadley Avenue, No. 21, Midland, Texas 79701 (“Steinocher”); and AMERICAN
STATE BANK, a Texas banking association, whose address is 620 North Grant,
Odessa, Texas 79764-4797 (alternatively, the “Bank” or the “Lender”). Permian
LLC, Hamilton, and Steinocher are collectively referred to herein as the
“Guarantors”.

NOTICE IS TAKEN OF THE FOLLOWING:

A.   Borrower, Guarantors, and Lender have previously entered into that certain
Loan Agreement, dated as of August 1, 2008, as modified and amended by that
certain First Amendment to Loan Agreement, dated as of October 15, 2008 (as so
amended, the “Existing Loan Agreement”). The Existing Loan Agreement amended and
superseded previously existing loan agreements by and among the same parties.

B.   The Existing Loan Agreement provides for a term loan in the amount of One
Million Six Hundred and Seventy-Five Thousand and No/100 Dollars
($1,675,000.00)(the “Loan”). The Loan is evidenced by a Term Note, dated as of
August 1, 2008, as modified and amended by that certain Modification and
Amendment of Term Note, dated as of October 15, 2008, in the original principal
amount of One Million Six Hundred and Seventy-Five Thousand and No/100 Dollars
($1,675,000.00), executed by the Borrower in favor of the Lender (as so
modified, the “Note”). As amended, the Note matures on December 31, 2008 (the
“Maturity Date”). The current principal balance outstanding under the Note is
One Million Twenty-One Thousand Six Hundred Eighty-Eight and 20/100 Dollars
($1,021,688.20)

C.   The Note is collateralized by Deeds of Trust covering oil and gas
properties owned by the Borrower in Haskell, Jones, Nolan, Reagan, Runnels, and
Taylor Counties, in the State of Texas (as modified or amended, collectively,
the “Deeds of Trust”). In addition, Borrower’s performance under the Note is
collateralized by Guaranty Agreements, under which each Guarantor agrees to
guaranty the Borrower’s indebtedness evidenced by the Note (collectively, the
“Guaranty Agreements”).

D.   The Borrower and Guarantors have now asked the Bank to extend the Maturity
Date from December 31, 2008 to February 15, 2009 (the “Extended Maturity Date”).
The Bank has agreed to this extension, subject to the satisfaction of the terms
and conditions stated in this Amendment.

E.   The Borrower, the Guarantors, and the Lender have agreed to execute this
Amendment in order to recognize the extension of the Maturity Date to the
Extended Maturity Date.

NOW, THEREFORE, for and in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree to amend the terms of the Existing Loan
Agreement as follows:

1.   Definitions.

Unless otherwise specifically defined herein, all defined terms used in this
Amendment shall have their respective meanings set forth in the Existing Loan
Agreement.

2. Amendments.

          A.  
The definition of “Maturity Dates” found in the Existing Loan Agreement is
  hereby amended to refer to the Extended Maturity
Date. B.  
The term “Structure” is hereby amended by deleting it in its entirety and
  substituting the following:    
Structure
 
   
 
 

Borrower will make a payment of principal under the Loan, in the amount of Ten
Thousand and No/100 Dollars ($10,000.00), plus accrued interest, on or before
February 1, 2009. On February 15, 2009, the date of final maturity hereunder,
all of the outstanding principal and accrued, unpaid interest due under the Loan
will be due and payable.

3. Effectiveness.

  A.   Except to the extent specifically amended and supplemented hereby, all of
the terms, conditions and provisions of the Existing Loan Agreement shall remain
unmodified, and the Existing Loan Agreement, as amended and supplemented by this
Amendment, is ratified and confirmed as being in full force and effect.

  B.   All references to the Existing Loan Agreement herein or in any other
document or instrument among Borrower, Guarantors, and Lender shall hereafter be
construed to be references to the Existing Loan Agreement, as modified by this
Amendment (as so modified, the “Loan Agreement”).

  C.   Borrower and Guarantors expressly acknowledge and agree that until such
time as they have tendered full and final payment of all fees and expenses
(including attorneys’ fees) incurred by the Bank down to the date of this
Amendment, the extension granted by the Bank under this Amendment shall be
invalid and of no force and effect.

4.   Guarantors. To evidence their continuing guaranty of the Borrower’s
obligation under the Loan, Guarantors have executed this Amendment.

5.   Counterparts: This Amendment may be executed in any number of counterparts,
each of which when executed and delivered shall be deemed an original, but all
of which constitute one instrument. In making proof of this Amendment, it shall
not be necessary to produce or account for more than one counterpart thereof
signed by each of the parties hereto.

6.   Notice of Final Agreement:

THIS WRITTEN AGREEMENT AND ANY OTHER INSTRUMENTS EXECUTED BY THE PARTIES
CONTEMPORANEOUSLY HEREWITH REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.

{The remainder of this page is intentionally left blank. Signature page
follows.}

IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the
date and year first above written.

BORROWER:

PERMIAN LEGEND PETROLEUM LP,

A Texas Limited Partnership

      By:   Permian Legend, LLC     General Partner By:  
      /s/ Lisa P. Hamilton—
   
 
   
Lisa P. Hamilton
Manager
By:  
/s/ Ronnie L. Steinocher—
   
 
   
Ronnie L. Steinocher
Manager
GUARANTORS:   By:  
Permian Legend, LLC
General Partner
By:  
      /s/ Lisa P. Hamilton—
   
 
   
Lisa P. Hamilton
Manager
By:  
/s/ Ronnie L. Steinocher—
   
 
   
Ronnie L. Steinocher
Manager

/s/       Lisa P. Hamilton—
Lisa P. Hamilton, Individually

/s/       Ronnie L. Steinocher—

Ronnie L. Steinocher, Individually

LENDER:

AMERICAN STATE BANK

By:       /s/       Mike Marshall—
Mike Marshall
Executive Vice President