Exhibit 10.1

 

ASSET PURCHASE AND SALE AGREEMENT

 

by and between

 

NGS SUB. CORP.

(SELLER)

 

and

 

MWM ENERGY, LLC

(BUYER)

 

Dated: FEBRUARY 15, 2008

 

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ARTICLE 1. - DEFINITIONS

1

1.1.

“Definitions”

1

1.2.

“Accounting Referee”

1

1.3.

“Aggregate Defect Basket”

1

1.4.

“Agreement”

1

1.5.

“Allocated Value”

1

1.6.

“Assets”

2

1.7.

“Assumed Obligations”

2

1.8.

“Benefit Plan”

2

1.9.

“Business Day”

2

1.10.

“Buyer”

2

1.11.

“Buyer Group”

3

1.12.

“Buyer’s Credits”

3

1.13.

“Casualty Loss”

3

1.14.

“Certificate”

3

1.15.

“Claims”

3

1.16.

“Closing”

3

1.17.

“Closing Date”

3

1.18.

“Company”

3

1.19.

“Confidentiality Agreement”

3

1.20.

“Defect Value”

3

1.21.

“Defensible Title”

3

1.22.

“Effective Time”

3

1.23.

“Encumbrance”

3

1.24.

“Environmental Deductible”

3

1.25.

“Environmental Defect”

3

1.26.

“Environmental Defect Notice Date”

4

1.27.

“Environmental Obligations”

4

1.28.

“Escrow Agreement”

5

1.29.

“Escrow Deposit”

5

1.30.

“Excluded Assets”

5

1.31.

“Final Settlement” and “Final Settlement Statement”

6

1.32.

“Governmental Authority” and “Final Settlement Statement”

6

1.33.

“Hydrocarbons”

6

1.34.

“Inventory Hydrocarbons”

6

1.35.

“Leases”

6

1.36.

“Material”

6

1.37.

“Material Adverse Effect”

6

1.38.

“Material Contracts”

7

1.39.

“Permitted Encumbrances”

7

1.40.

“Person”

7

1.41.

“Plugging and Abandonment Obligations”

7

1.42.

“Preferential Purchase Rights”

7

1.43.

“Purchase Price”

8

1.44.

“Real Property, Personal Property and Incidental Rights”

8

1.45.

“Retained Obligations”

9

 

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1.46.

“Seller’s Credits”

9

1.47.

“Seller Group”

9

1.48.

“Shares”

9

1.49.

“Scheduled Interests” or “Scheduled Interest”

9

1.50.

“Tax” or “Taxes”

10

1.51.

“Taxing Authority”

10

1.52.

“Tax Return”

10

1.53.

“Third Party Interests”

10

1.54.

“Title Defect”

10

1.55.

“Title Defect Deductible”

10

1.56.

“Title Defect Notice Date”

10

1.57.

“Title Defect Property”

10

1.58.

“Well” or “Wells”

10

ARTICLE 2. - AGREEMENT TO PURCHASE AND SELL

10

ARTICLE 3. - PURCHASE PRICE AND PAYMENT

10

3.1.

Purchase Price

10

3.2.

Escrow Deposit

11

3.3.

Adjustments to Purchase Price

11

3.4.

Manner of Payment

12

3.5.

Final Settlement Statement

13

3.6.

Post Closing Revenues

13

3.2.

Post Closing Expenses

14

3.8.

Purchase Price Allocation

14

ARTICLE 4. - SELLER’S REPRESENTATIONS AND WARRANTIES

14

ARTICLE 5. - BUYER’S REPRESENTATIONS AND WARRANTIES

19

ARTICLE 6. - ACCESS TO INFORMATION AND INSPECTIONS

20

6.1.

Title Files

20

6.2.

Other Files

21

6.3.

Confidentiality Agreement

21

6.4.

Inspections

21

6.5.

No Warranty or Representation on Seller’s Information

21

ARTICLE 7. - ENVIRONMENTAL MATTERS AND ADJUSTMENTS

22

ARTICLE 8. - TITLE DEFECTS AND ADJUSTMENTS

23

8.1.

Definitions

23

(a)

“Allocated Value”

23

(b)

“Defensible Title”

23

(c)

“Title Defect”

24

(d)

“Title Defect Property”

25

(e)

“Permitted Encumbrances”

25

8.2.

Notice of Title Defects

26

8.3.

Title Defect Adjustment

27

8.4.

Environmental Defect and Title Defect Values

27

8.5.

Title Warranty

29

ARTICLE 9. - DISCLAIMERS

29

9.1.

Disclaimer – Representations and Warranties

29

9.2.

Statements and Information

30

 

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ARTICLE 10. - PREFERENTIAL PURCHASE RIGHTS

30

10.1.

Actions and Consents

30

ARTICLE 11. - COVENANTS

31

11.1.

Conduct of Operations

31

11.2.

Limitations on Seller’s Covenants Pending Closing

32

11.3.

Conduct of Company Business

32

11.4.

Return of Information

33

ARTICLE 12. - CLOSING CONDITIONS

33

12.1.

Seller’s Closing Conditions

33

12.2.

Buyer’s Closing Conditions

34

ARTICLE 13. - CLOSING

35

13.1.

Closing

35

13.2.

Seller’s Closing Obligations

35

13.3.

Buyer’s Closing Obligations

36

13.4.

Joint Closing Obligations

36

ARTICLE 14. —LIMITATIONS ON WARRANTIES

36

14.1.

Limitations on Warranties and Remedies

36

14.2.

Waiver of Trade Practices Acts

37

ARTICLE 15. - CASUALTY LOSS AND CONDEMNATION

38

ARTICLE 16. - REMEDIES

38

16.1.

Seller’s Remedies

38

16.2.

Buyer’s Remedies

39

16.3.

Other Remedies

39

16.4.

Effect of Termination

39

16.5.

Limitations on Damages

39

ARTICLE 17. - ASSUMPTION AND INDEMNITY

39

17.1.

Assumed Obligations; Pre-Closing Liabilities

39

17.2.

Buyer’s Indemnity

40

17.3.

Seller’s Indemnity

40

17.4.

Stipulation Regarding Express Negligence And Fault

40

17.5.

Broker or Finder’s Fee

41

17.6.

Litigation

41

17.7.

Insurance, Taxes

41

17.8.

Waiver of Certain Damages

41

17.9.

Extent of Indemnification

41

17.10.

Disclaimer of Application of Anti-Indemnity Statutes

41

17.11.

Waiver of Right to Rescission

42

17.12.

Indemnity Claims

42

ARTICLE 18. - MISCELLANEOUS

43

18.1.

Receivables and other Excluded Funds

43

18.2.

Arbitration

43

18.3.

Public Announcements

44

18.4.

Filing and Recording of Assignments, etc.

45

18.5.

Further Assurances and Records

45

18.6.

Notices

46

18.7.

Incidental Expenses

47

 

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18.8.

Waiver

47

18.9.

Binding Effect; Assignment

48

18.10.

Taxes

48

18.11.

Audits

49

18.12.

Like-Kind Exchanges

49

18.13.

Governing Law

49

18.14.

Entire Agreement

49

18.15.

Severability

50

18.16.

Exhibits and Schedules

50

18.17.

Delivery of Files After Closing

50

18.18.

Survival

50

18.19.

Subsequent Adjustments

50

18.20.

Counterparts

51

18.21.

Subrogation

51

18.22.

Suspended Monies

51

18.23.

Change of Name

51

18.24.

Replacement of Bonds, Letters of Credit and Guarantees

51

18.25.

No Third-Party Beneficiaries

51

18.26.

Time of Performance

52

 

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EXHIBITS

 

Exhibit “A-1”

Leases

Exhibit “A-2”

Wells

Exhibit “A-3”

Contracts and Other Agreements

Exhibit “A-4”

Right-of Ways, Easements and Surface Leases

Exhibit “A-5”

Surface Estates

Exhibit “B”

Escrow Agreement

Exhibit “C”

Allocated Values

Exhibit “D”

Assignment, Conveyance and Bill of Sale

Exhibit “E-1”

[Intentionally Deleted]

Exhibit “F”

Litigation

Exhibit “G”

Gas and Oil Imbalances

Exhibit “H”

Consents to Assign and Preferential Rights to Purchase and Burdens

Exhibit “I”

Non-Foreign Affidavit

Exhibit “J”

Certificate

 

SCHEDULES

 

Schedule 1.28(j)

Excluded Assets

Schedule 4.13(e)

Company Liabilities

Schedule 4.19

Company Banks/Financial Institutions

Schedule 4.23

Company Initial Contracts

 

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ASSET PURCHASE AND SALE AGREEMENT

 

This Asset Purchase and Sale Agreement (“Agreement”), dated as of February 15,
2008, is by and between NGS Sub. Corp., a Delaware corporation, whose address is
2500 City West Boulevard, Suite 1300, Houston, Texas 77042 (“Seller”), and MWM
Energy, LLC, a Texas limited liability company (“Buyer”), whose address is 114
30th Avenue South, Nashville, Tennessee  37212.  Seller and Buyer are sometimes
together referred to herein individually as a “Party” or collectively as
“Parties.”

 

R E C I T A L S

 

WHEREAS, Seller owns certain oil and gas leasehold interests and related assets
more fully described on the exhibits hereto;

 

WHEREAS, Seller owns all of the shares of Four Star Development Corporation as
more fully described herein;

 

WHEREAS, Seller desires to sell and Buyer desires to acquire these interests,
related assets, and shares on the terms and conditions hereinafter provided;

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, Seller and Buyer hereby agree as follows:

 

ARTICLE 1. - DEFINITIONS

 

1.1.                            “Definitions”  In this Agreement, capitalized
terms have the meanings provided in this Section, unless defined elsewhere in
this Agreement.  All defined terms include both the singular and the plural of
such terms.  All references to Sections refer to Sections in this Agreement and
all references to Exhibits or Schedules refer to Exhibits or Schedules attached
to and made a part of this Agreement.  When the term “herein” is used in this
Agreement, reference is made to the entire Agreement and not to any particular
Section or subparagraph of a Section.  The word “including” shall mean including
without limitation.

 

1.2.                            “Accounting Referee”  means the accounting firm
of KPMG, or such other nationally recognized United States based accounting firm
as is mutually agreed upon by the Parties, together with any experts such firm
may require in order to settle a particular dispute.

 

1.3.                            “Aggregate Defect Basket” shall be as defined in
Section 7.4.

 

1.4.                            “Agreement” shall mean this Asset Purchase and
Sale Agreement between Seller and Buyer.

 

1.5.                            “Allocated Value” shall mean the dollar amount
allocated to each Scheduled Interest as set forth on Exhibit “C.”

 

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1.6.                            “Assets” shall mean the following described
assets and properties (except to the extent constituting Excluded Assets):

 

(a)                                  the Leases;

 

(b)                                 the Real Property, Personal Property and
Incidental Rights;

 

(c)                                  the Inventory Hydrocarbons; and

 

(d)                                 the Shares.

 

1.7.                            “Assumed Obligations” shall mean with respect to
the Assets:

 

(a)                                  the Plugging and Abandonment Obligations;

 

(b)                                 all Environmental Obligations, whether
related to, or arising from, events occurring before or after the Effective
Date, except those specifically included in the definition of “Retained
Obligations”;

 

(c)                                  all obligations with respect to gas
production, sales or imbalances with third parties;

 

(d)                                 except as otherwise provided in this
Agreement, including the Seller’s obligations to indemnify, all other
liabilities, duties, and obligations that arise out of the ownership, operation
or use of the Assets after the Effective Time, including, but not limited to,
the payment of all operating expenses and capital expenditures relating to the
Assets, all liabilities, duties, and obligations, express or implied, imposed
upon Seller herein under the provisions of the Leases and any and all
assignments, subleases, farmout agreements, assignments of overriding royalty,
joint operating agreements, easements, rights-of-way, and all other contracts,
agreements and instruments affecting the Leases, or the premises covered
thereby, whether recorded or unrecorded, whether or not identified on the
Exhibits or schedules attached hereto and under all applicable laws, rules,
regulations, orders and ordinances.

 

1.8.                            “Benefit Plan” means: (a) each “employee benefit
plan,” as such term is defined in Section 3(3) of ERISA, (b) each plan that
would be an “employee benefit plan”, as such term is defined in Section 3(3) of
ERISA, if it were subject to ERISA, such as foreign plans and plans for
directors, (c) each stock bonus, stock ownership, stock option, stock purchase,
stock appreciation rights, phantom stock, or other equity-based plan, and
(d) each bonus or incentive compensation plan, or other compensation agreement,
contract or arrangement.

 

1.9.                            “Business Day” means a Day, except Saturday,
Sunday and Days when federally chartered banks in the United States are required
to be closed.

 

1.10.                     “Buyer” “Buyer” has the meaning set forth in the
introductory paragraph.

 

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1.11.                     “Buyer Group” “Buyer Group” means Buyer and its
officers, directors, agents, representatives, consultants and employees.

 

1.12.                     “Buyer’s Credits” shall be as defined in
Section 3.3(b).

 

1.13.                     “Casualty Loss” shall be as defined in Article 15.

 

1.14.                     “Certificate” means a document in the form of
Exhibit “J”.

 

1.15.                     “Claims” shall be as defined in Section 17.2.

 

1.16.                     “Closing” shall be as defined in Section 13.1.

 

1.17.                     “Closing Date” shall be as defined in Section 13.1.

 

1.18.                     “Company” shall mean Four Star Development
Corporation, a Louisiana corporation.

 

1.19.                     “Confidentiality Agreement” shall be as defined in
Section 6.3.

 

1.20.                     “Defect Value” shall be as defined in Section 8.4.

 

1.21.                     “Defensible Title” shall be as defined in
Section 8.1(b).

 

1.22.                     “Effective Time” shall mean 7:00 a.m., Central
Standard Time, on February 1, 2008.

 

1.23.                     “Encumbrance” shall mean any lien, security interest,
pledge, charge or encumbrance.

 

1.24.                     “Environmental Deductible” shall mean any lien,
security interest, pledge, charge or encumbrance.

 

1.25.                     “Environmental Defect” shall mean:

 

(a)                                  a condition or activity with respect to a
Scheduled Interest that is in material violation, or reasonably likely to
materially violate, any federal, state or local statute, or any rule, order,
ruling or regulation entered, issued or made by any court, administrative
agency, or other governmental body or entity, federal, state, or local, or any
arbitrator (“Environmental Law”), or surface or mineral lease obligation,
whether an express or implied obligation, relating to natural resources,
conservation, the environment, or the emission, release, storage, treatment,
disposal, transportation, handling or management of industrial or solid waste,
hazardous waste, hazardous or toxic substances, chemicals or pollutants,
petroleum, including crude oil, natural gas, natural gas liquids, or liquefied
natural gas, and any wastes associated with the exploration and production of
oil and gas (“Regulated Substances”); or

 

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(b)                                 the presence of Regulated Substances in the
soil, groundwater, or surface water in, on, at or under a Scheduled Interest in
any manner or quantity which is required to be remediated by Environmental Law
or by any applicable action or guidance levels or other standards published by
any governmental agency with jurisdiction over the Assets, or by a surface or
mineral lease obligation, whether an express or implied obligation.  Buyer and
Seller agree that for a condition to be in violation of any statute or
regulation it shall not be necessary that Seller shall be under notice of
violation from a federal or state regulatory agency or lessor.

 

The Parties agree and acknowledge that (i) Buyer will be provided an opportunity
to examine the Assets for potential naturally occurring radioactive materials
(“NORM”), and any potential obligations with respect to NORM, and (ii) that the
presence of NORM on any of the Assets may not be raised by Buyer as the subject
of an Environmental Defect.

 

1.26.                     “Environmental Defect Notice Date” shall be as defined
in Section 7.1.

 

1.27.                     “Environmental Obligations” shall mean all
liabilities, obligations, expenses (including, without limitation, all
attorneys’ fees), fines, penalties, costs, claims, suits or damages (including
natural resource damages) of any nature, associated with the Assets, and
attributable to or resulting from:

 

(a)                                  pollution or contamination of soil, surface
water, groundwater or air, on, in, by, from or under the Assets or lands in the
vicinity thereof, and any other contamination of or adverse effect upon the
environment;

 

(b)                                 underground injection activities and waste
disposal;

 

(c)                                  clean-up responses, remedial, control or
compliance costs, including the required cleanup or remediation of spills, pits,
lakes, ponds, or lagoons, including any subsurface or surface pollution caused
by such spills, pits, lakes, ponds, or lagoons;

 

(d)                                 noncompliance with applicable land use,
permitting, surface disturbance, licensing or notification requirements,
including those in a surface or mineral lease, whether an express or implied
obligation;

 

(e)                                  violation of any federal, state or local
Environmental Law or land use law, or surface or mineral lease obligation,
whether an express or implied obligation;

 

(f)                                    any other violation which could qualify
as an Environmental Defect (without being limited to Scheduled Interests); and

 

(g)                                 any and all indemnity obligations of Seller
with respect to the above, along with any and all Claims against Seller for
indemnity with respect to the above, under, pursuant to or arising from any
acquisition, purchase and sale or other agreement.

 

Notwithstanding any provision of this Agreement to the contrary, “Environmental

 

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Obligations” shall not include Plugging and Abandonment Obligations (including
with respect to NORM).

 

1.28.                     “Escrow Agreement” shall be defined in Section 3.2.

 

1.29.                     “Escrow Deposit” shall be as defined in Section 3.2.

 

1.30.                     “Excluded Assets” shall mean the following:

 

(a)                                  (i) all trade credits, accounts receivable,
notes receivable and other receivables attributable to Seller’s interest in the
Assets with respect to any period of time prior to the Effective Time; (ii) all
deposits, cash, checks in process of collection, cash equivalents and funds
attributable to Seller’s interest in the Assets with respect to any period of
time prior to the Effective Time; and (iii) all proceeds, benefits, income or
revenues accruing with respect to the Assets prior to the Effective Time;

 

(b)                                 all corporate, financial, and tax records of
Seller, and those records subject to attorney/client privilege; however, Buyer
shall be entitled to receive copies of any tax records which directly relate to
any Assumed Obligations, or which are necessary for Buyer’s ownership,
administration, or operation of the Assets;

 

(c)                                  all claims and causes of action of Seller
arising from acts, omissions or events, or damage to or destruction of the
Asset, occurring prior to the Effective Time; provided, however, Seller shall
transfer to Buyer all claims and causes of action of Seller against prior owners
of the Assets or third parties for Environmental Obligations that are not
Retained Obligations;

 

(d)                                 except as otherwise provided in Article 15,
all rights, titles, claims and interests of Seller relating to the Assets prior
to the Effective Time (i) under any policy or agreement of insurance or
indemnity; (ii) under any bond; or (iii) to any insurance or condemnation
proceeds or awards;

 

(e)                                  all Hydrocarbons produced from or
attributable to the Assets with respect to all periods prior to the Effective
Time, together with all proceeds from or of such Hydrocarbons, except the
Inventory Hydrocarbons and the unsold inventory of gas plant products, if any,
attributable to the Leases as of the Effective Time;

 

(f)                                    claims of Seller for refund of or loss
carry forwards with respect to production, windfall profit, severance, ad
valorem or any other taxes attributable to any period prior to the Effective
Time, or income or franchise taxes;

 

(g)                                 all amounts due or payable to Seller as
adjustments or refunds under any contracts or agreements (including take-or-pay
claims) affecting the Assets with respect to any period prior to the Effective
Time;

 

(h)                                 all amounts due or payable to Seller as
adjustments to insurance premiums

 

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related to the Assets with respect to any period prior to the Effective Time;

 

(i)                                     all proceeds, benefits, income or
revenues accruing (and any security or other deposits made) with respect to the
Assets, and all accounts receivable attributable to the Assets, prior to the
Effective Time; and

 

(j)                                     all of Seller’s intellectual property,
including, but not limited to, proprietary computer software, patents, trade
secrets, copyrights, names, marks and logos.

 

(k)                                  the Assets identified on Schedule 1.28(j).

 

1.31.                     “Final Settlement” and “Final Settlement Statement”
shall be as defined in Section 3.5.

 

1.32.                     “Governmental Authority” shall Governmental Authority”
means any federal, state, local, municipal or other governments; any
governmental, regulatory or administrative agency, commission, body or other
authority exercising or entitled to exercise any administrative, executive,
judicial, legislative, police, regulatory or taxing authority or power; and any
court or governmental tribunal

 

1.33.                     “Hydrocarbons” shall mean crude oil, natural gas,
casinghead gas, condensate, sulphur, natural gas liquids and other liquid or
gaseous hydrocarbons, and shall also refer to all other minerals of every kind
and character which may be covered by or included in the Leases and Assets.

 

1.34.                     “Inventory Hydrocarbons” shall mean all merchantable
oil and condensate (for oil or liquids in storage tanks, being only that oil or
liquids physically above the top of the inlet connection into such tanks)
produced from or attributable to the Leases prior to the Effective Time which
have not been sold by Seller and are in storage at the Effective Time.

 

1.35.                     “Leases” shall mean, except to the extent constituting
Excluded Assets, any and all interests owned by Seller in and to the oil, gas
and/or mineral leases set forth on Exhibit “A-1,” including any overriding
royalty interests, net profit interests, working interests, reversionary
interests, and any other interests of Seller in said oil, gas and/or mineral
leases, or the lands covered by said Leases.

 

1.36.                     “Material” shall be as defined in Section 7.1.

 

1.37.                     “Material Adverse Effect” “Material Adverse Effect”
means an event or circumstance that (a) results in a material adverse effect on
the business, Assets, financial condition, or results of operations of the
Company taken as a whole or (b) makes impossible the consummation of the
transactions contemplated by this Agreement; provided, however, that any actual
change or changes in reserves (including any reclassification or recalculation
of reserves in the ordinary course of business) or in the prices of
Hydrocarbons, ordinary wear and tear and any change in condition of the Assets
for production of Hydrocarbons through normal depletion or other mechanical
failure (including the watering-out of any well,

 

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collapsed casing or sand infiltration of any well), general economic conditions
or local, regional, national or international industry or economic conditions
(including changes in applicable Laws and changes in financial or market
conditions) shall be deemed not to constitute a “Material Adverse Effect.”

 

1.38.                     “Material Contracts” “Material Contracts” has the
meaning set forth in Section 4.23.

 

1.39.                     “Permitted Encumbrances” shall be as defined in
Section 8.1(e).

 

1.40.                     “Person”  means an individual, group, partnership,
corporation, limited liability company, trust or other entity.

 

1.41.                     “Plugging and Abandonment Obligations” shall mean the
responsibility and liability, including but not limited to Claims for damages
and/or other relief, for the following plugging and abandonment obligations
related to the Assets, regardless of whether they are attributable to the
ownership or operation of the Assets before or after the Effective Time:

 

(a)                                  the necessary and proper plugging,
replugging and abandonment of all Wells, whether plugged and abandoned before or
after the Effective Time;

 

(b)                                 the necessary and proper removal,
abandonment, and disposal of all platforms, structures, pipelines, equipment,
movables, immovables, abandoned property and junk located on or comprising part
of the Assets;

 

(c)                                  to the extent allowed by the applicable
authorized governmental body and the owners of the property affected, the
necessary and proper capping and burying of all associated flow lines located on
or comprising part of the Assets;

 

(d)                                 the necessary and proper restoration of the
Assets and/or the property covered by the Assets or upon which the Assets are
located, both surface, surface water, groundwater, waterbottom and subsurface,
to such condition as may be required by applicable laws, regulation or contract;

 

(e)                                  any necessary clean-up or disposal of
Assets contaminated by NORM as may be required by applicable laws, regulation or
contract;

 

(f)                                    all obligations arising from contractual
requirements and demands made by authorized governmental bodies or parties
claiming an interest in the Assets and/or the property covered by the Assets or
upon which the Assets are located; and

 

(g)                                 any and all indemnity obligations of Seller
with respect to the above, along with any and all Claims against Seller for
indemnity with respect to the above, under, pursuant to or arising from any
acquisition, purchase and sale or other agreement.

 

1.42.                     “Preferential Purchase Rights” shall be as defined in
Section 10.1(b).

 

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1.43.                     “Purchase Price” shall be as defined in Section 3.1.

 

1.44.                     “Real Property, Personal Property and Incidental
Rights” shall mean all right, title and interest of Seller in and to or derived
from the following insofar as the same do not constitute Excluded Assets and are
attributable to, appurtenant to, incidental to, or used for the operation of the
Leases:

 

(a)                                  all fee interests and surface estate
interests described on Exhibit “A-5”;

 

(b)                                 all easements, rights-of-way, surface
leases, permits, licenses, servitudes or other interests relating to the use of
the surface, including but not limited to those described on Exhibit “A-4,” or
in instruments described in Exhibit “A-3”;

 

(c)                                  all Wells, along with all equipment and
other personal property, inventory, spare parts, tools, fixtures, pipelines,
dehydration facilities, platforms, tank batteries, appurtenances, and
improvements situated upon the Leases or lands pooled or unitized therewith as
of the Effective Time and used or held for use in connection with the
development or operation of the Leases or the production, treatment, storage,
compression, processing or transportation of Hydrocarbons from or in the Wells
or the Leases or lands pooled or unitized therewith including, but not limited
to those described on Exhibit “A-2”;

 

(d)                                 all unit agreements, orders and decisions of
state and federal regulatory authorities establishing units, joint operating
agreements, enhanced recovery and injection agreements, farmout agreements and
farmin agreements, options, drilling agreements, exploration agreements,
assignments of operating rights, working interests, subleases and rights above
or below certain footage depths or geological formations, to the extent same is
attributable to the Assets, as of the Effective Time, including but not limited
to those described on Exhibit “A-3”;

 

(e)                                  all contracts, agreements, and title
instruments to the extent attributable to and affecting the Assets in existence
at Closing, including all Hydrocarbon sales, purchase, gathering,
transportation, treating, marketing, exchange, processing, disposal and
fractionating contracts, joint operating agreements, including but not limited
to those described on Exhibit “A-3”;

 

(f)                                    originals of all lease files, land files,
well files, production records, division order files (including paysheets and
supporting files), abstracts, title opinions, and contract files, insofar as the
same are directly related to the Leases, including, without limitation, all
geological, information and data, to the extent that such data is not subject to
any third party restrictions, but excluding Seller’s proprietary interpretations
of same; and

 

(g)                                 the Company books, records and files of Four
Star Development Corporation, including but not limited to, permits, licenses,
corporate records, minute book, contracts, title records, tax records relating
solely to the business of the Company, financial, engineering and safety
records.

 

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1.45.                     “Retained Obligations” shall mean:

 

(a)                                  any Environmental Obligation of any nature
related to the Excluded Assets;

 

(b)                                 all Environmental Obligations of any nature
that relate to or arise from events occurring as of the date NGS acquired the
Assets through the Closing Date.

 

(c)                                  Claims for personal injury or wrongful
death occurring prior to the Effective Time;

 

(d)                                 responsibility to any governmental agency
for any offsite storage and disposal by Seller, prior to the Effective Time, of
hazardous materials produced from the Assets, and stored or disposed of, on, in
or below any property which does not form a part of the Assets, for which and to
the extent that remediation is required by any environmental or conservation law
in effect as of the Effective Time; for purposes of this subpart “(d),” “offsite
storage and disposal” shall not include the seepage, leakage or other migration
of hazardous materials from the property forming part of the Assets to other
lands;

 

(e)                                  responsibility and liability for the
litigation and threatened litigation listed on Exhibit “F,” and the Claims
thereunder; and

 

(f)                                    except as otherwise provided in this
Agreement, all other liabilities, duties, and obligations that arise out of the
ownership, operation or use of the Assets prior to the Effective Time,
including, but not limited to, the payment of all operating expenses and capital
expenditures relating to the Assets, all liabilities, duties, and obligations,
express or implied, imposed upon Seller herein under the provisions of the
Leases and any and all assignments, subleases, farmout agreements, assignments
of overriding royalty, joint operating agreements, easements, rights-of-way, and
all other contracts, agreements and instruments affecting the Leases, or the
premises covered thereby, whether recorded or unrecorded, whether identified or
not on the Exhibits or Schedules attached hereto and under all applicable laws,
rules, regulations, orders and ordinances.

 

1.46.                     “Seller’s Credits” shall be as defined in
Section 3.3(a).

 

1.47.                     “Seller Group” means (a) Seller and its officers,
directors, agents, representatives, consultants and employees, and (b) Seller’s
Parent and Affiliates and their officers, directors, agents, representatives,
consultants and employees.

 

1.48.                     “Shares” shall mean all of the issued and outstanding
capital stock of Four Star Development Corporation, a Louisiana Corporation.

 

1.49.                     “Scheduled Interests” or “Scheduled Interest” shall
mean that portion of the Assets attributable to the Leases or Wells identified
on Exhibits “A-1” and “A-2” and having a value greater than $0.00.

 

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1.50.                     “Tax” or “Taxes” means all income, profits, franchise,
withholding, ad valorem, employment, social security, disability, occupation,
property, severance and excise taxes, together with any interest and penalties
with respect thereto, imposed by or on behalf of any Taxing Authority.

 

1.51.                     “Taxing Authority” means, with respect to any Tax, the
governmental entity or political subdivision thereof that imposes such Tax, and
the agency (if any) charged with the collection of such Tax for such entity or
subdivision, including any governmental or quasi-governmental entity or agency
that imposes, or is charged with collecting, social security or similar charges
or premiums.

 

1.52.                     “Tax Return” means any return, declaration, report,
claim for refund, or information return or statement relating to Taxes,
including any schedule or attachment thereto.

 

1.53.                     “Third Party Interests” shall be as defined in
Section 10.1(c).

 

1.54.                     “Title Defect” shall be as defined in Section 8.1(c).

 

1.55.                     “Title Defect Deductible” shall be as defined in
Section 8.3(a).

 

1.56.                     “Title Defect Notice Date” shall be as defined in
Section 8.2.

 

1.57.                     “Title Defect Property” shall be as defined in
Section 8.1(d).

 

1.58.                     “Well” or “Wells” shall refer to all wells located on
the Assets, or lands pooled or unitized therewith, including but not limited to
those listed on Exhibit “A-2” attached hereto, whether or not such wells are
producing, active or inactive, plugged and abandoned, temporarily abandoned,
shut-in, injection, disposal, water supply or otherwise.

 

ARTICLE 2. - AGREEMENT TO PURCHASE AND SELL

 

Subject to the terms and conditions of this Agreement, Seller agrees to sell and
convey to Buyer and Buyer agrees to purchase and pay for the Assets and to
assume the Assumed Obligations.

 

ARTICLE 3. - PURCHASE PRICE AND PAYMENT

 

3.1.                            Purchase Price.

 

Subject to adjustment as set forth below, the Purchase Price for the Assets
shall be Four Million Five Hundred Thousand and No/100 dollars ($4,500,000.00),
allocated among the Scheduled Interests as provided in Section 3.8.

 

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3.2.                            Escrow Deposit.

 

Immediately upon the execution hereof, Buyer shall tender to Wells Fargo Bank,
N.A. (the “Bank”), by wire transfer, the Escrow Deposit in the amount of One
Hundred Thousand and No/100 dollars ($100,000.00) (the “Escrow Deposit”). The
Escrow Deposit will be placed in an interest-bearing account with the Bank in
accordance with the escrow agreement that is attached hereto as Exhibit “B” (the
“Escrow Agreement”).  In the event the transaction contemplated hereby is
consummated in accordance with the terms hereof, the Escrow Deposit and any
accrued interest, shall be applied to the Purchase Price to be paid by Buyer at
Closing, in accordance with Section 3.3(b).  In the event this Agreement is
terminated by the Buyer or Seller in accordance with Article 16 below, the
Escrow Deposit and any accrued interest, shall be returned to Buyer or retained
by the Seller as provided for herein. In the event the Escrow Deposit is not
received by the Bank by the close of business on the first Business Day after
the execution of this Agreement, this Agreement shall be null and void, and the
Parties shall have no further obligation to each other hereunder.

 

3.3.                            Adjustments to Purchase Price.

 

The Purchase Price for the Assets shall be adjusted as follows with all such
amounts being determined in accordance with generally accepted accounting
principals and Council of Petroleum Accountants Society (COPAS) standards:

 

(a)                                  The Purchase Price shall be adjusted upward
by the following (“Seller’s Credits”):

 

(1)                                  the value of (i) all Inventory
Hydrocarbons, such value to be based upon the existing contract price for crude
oil in effect as of the Effective Time, less severance taxes, transportation
fees and other fees deducted by the purchaser of such oil, such oil to be
measured at the Effective Time by the operators of the Assets;

 

(2)                                  the amount of all direct expenditures,
production expenses, operating expenses, capital expenses, and all other
expenditures attributable to the Assets and incurred and paid by or on behalf of
Seller in the ordinary course of owning and/or operating the Assets and
attributable to the period from the Effective Time to the Closing Date,
provided, however, this provision shall be subject to Section 11.1 after the
execution of the Agreement through the Closing Date;

 

(3)                                  an amount equal to all prepaid expenses
that are actually paid by or on behalf of Seller prior to the Initial Closing
Date in the ordinary course of owning and/or operating the Assets as heretofore
owned and/or operated and attributable to the Assets and allocable to any period
after the Effective Time;

 

(4)                                  an amount equal to the sum of any upward
adjustments provided elsewhere in this Agreement; and

 

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(5)                                  any other amount agreed upon by Seller and
Buyer in writing prior to Closing.

 

(b)                                 The Purchase Price shall be adjusted
downward by the following (“Buyer’s Credits”):

 

(1)                                  the amount of gross proceeds received by or
credited to Seller that are attributable to the sale of any Hydrocarbon
production from the Assets for any period of time after the Effective Time net
of all applicable production related taxes and royalties paid by or on behalf of
Seller;

 

(2)                                  the amount of all unpaid ad valorem,
property, production, excise, severance and similar taxes and assessments (but
not including income taxes), which taxes and assessments become due and payable
or accrue to the Assets prior to the Effective Time, which amount shall, where
possible, be computed based upon the tax rate and values applicable to the tax
period in question; otherwise, the amount of the adjustment under this paragraph
shall be computed based upon such taxes assessed against the applicable portion
of the Assets for the immediately preceding tax period just ended;

 

(3)                                  the Escrow Deposit, and all accrued
interest thereon;

 

(4)                                  an amount equal to the sum of any downward
adjustments provided elsewhere in this Agreement; and

 

(5)                                  any other amount agreed upon by Seller and
Buyer in writing prior to Closing.

 

(c)                                  Seller shall prepare and deliver to Buyer,
at least five (5) business days prior to Closing, Seller’s estimate of the
adjusted Purchase Price to be paid at Closing, together with a preliminary
statement setting forth Seller’s estimate of the amount of each adjustment to
the Purchase Price to be made pursuant to this Section 3.3.  The Parties shall
negotiate in good faith and attempt to agree on such estimated adjustments prior
to Closing.  In the event any estimated adjustment amounts are not agreed upon
prior to Closing, the estimate of the adjusted Purchase Price for purposes of
Closing shall be calculated based on Seller’s and Buyer’s agreed upon estimated
adjustments and Seller’s good faith estimate of any disputed amounts (and any
such disputes shall be resolved by the Parties in connection with the resolution
of the Final Settlement Statement).

 

3.4.                            Manner of Payment.

 

At Closing, Buyer shall pay Seller the Adjusted Purchase Price by wire transfer
of immediately available funds pursuant to Seller’s written instructions.  At
Closing, the Buyer and Seller shall give joint instructions to the Bank to
disburse the Escrow Deposit to the Buyer, together with all accrued interest, in
payment of the Purchase Price as adjusted hereinabove.

 

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3.5.                            Final Settlement Statement.

 

As soon as reasonably practicable, but in no event later than ninety (90) days
after the Closing Date, Seller will deliver to Buyer a final settlement
statement (the “Final Settlement Statement”) setting forth the actual
adjustments to the Purchase Price pursuant to Section 3.3.  As soon as
reasonably practicable, but in no event later than thirty (30) Days after Buyer
receives the Final Settlement Statement, Buyer may deliver to Seller a written
report containing any changes that Buyer proposes to be made to such statement. 
Such changes shall be specified in reasonable detail with reasonable supporting
documentation.  Any changes not so specified shall be deemed waived, and
Seller’s determinations shall prevail.  If Buyer fails to timely deliver the
written report to Seller containing changes Buyer proposes to be made to the
Final Settlement Statement, the statement as delivered by Seller will be deemed
to be correct and will be final and binding on the Parties and not subject to
further audit or arbitration.  As soon as reasonably practicable, but in no
event later than fifteen (15) Days after Seller receives Buyer’s written report,
the Parties shall meet and undertake to agree on the final adjustments to the
Final Settlement Statement.  If the Parties fail to agree on the final
adjustments within the fifteen (15) Day period, either Party may submit the
disputed items to the Accounting Referee for resolution.  The Parties shall
direct the Accounting Referee to resolve the disputes within thirty (30) Days
after having the relevant materials submitted for review.  The decision of the
Accounting Referee will be binding on and non-appealable by the Parties.  The
fees and expenses associated with the Accounting Referee will be borne equally
by the Parties.  Any amounts owed by one Party to the other as a result of the
Final Settlement Statement will be paid within five (5) Business Days after the
date when the amounts are agreed upon by the Parties or the Parties receive a
decision of the Accounting Referee, and the items included in the Final
Settlement Statement will be final and binding between the Parties and not
subject to further audit or arbitration.

 

3.6.                            Post-Closing Revenues.

 

Except as expressly provided otherwise in this Agreement, Buyer will promptly
pay to Seller any and all amounts received after Closing (but prior to the
finalization of the Final Settlement Statement) by Buyer or the Company (to the
extent not accounted for in the Preliminary Settlement Statement) that are
attributable to the Assets or the business or the operations of the Company
prior to the Effective Time or that are attributable to the Excluded Assets. 
Except as expressly provided otherwise in this Agreement, Seller will pay to
Buyer any and all amounts received after Closing (but prior to the finalization
of the Final Settlement Statement) by Seller (to the extent not accounted for in
the Preliminary Settlement Statement) that are attributable to the Assets or the
business or the operations of the Company on and after the Effective Time.  The
Party responsible for the payment of amounts received shall reimburse the other
Party within five (5) Business Days after the end of the month in which such
amounts were received by the Party responsible for payment and such amounts
shall not be taken into account for purposes of the Final Settlement Statement. 
Notwithstanding the foregoing, this Section 3.6 shall not apply to amounts
received prior to Closing if such amounts are included in the Preliminary
Settlement Statement.  Such amounts

 

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(to the extent the same differ from estimates in the Preliminary Settlement
Statement) will be accounted for in the Final Settlement Statement.

 

3.7.                            Post-Closing Expenses.

 

Except as expressly provided otherwise in this Agreement, Seller will promptly
reimburse Buyer for any and all costs and expenses paid after Closing (but prior
to the finalization of the Final Settlement Statement) by Buyer or the Company
(to the extent not accounted for the Preliminary Settlement Statement) that are
attributable to the Assets or the business or the operations of the Company
prior to the Effective Time or that are attributable to the Excluded Assets. 
Except as provided otherwise in this Agreement, Buyer will reimburse Seller for
any and all costs and expenses paid after Closing (but prior to the finalization
of the Final Settlement Statement) by Seller (to the extent not accounted for in
the Preliminary Settlement Statement) that are attributable to the Assets or the
business or the operations of the Company on and after the Effective Time.  The
Party responsible for the payment of such costs and expenses shall reimburse the
other Party within five (5) Business Days after the end of the month in which
the applicable invoice and proof of payment of such invoice were received by the
Party responsible for payment and such amounts shall not be taken into account
for purposes of the Final Settlement Statement.  Notwithstanding the foregoing,
this Section 3.7 shall not apply to amounts paid prior to Closing if such
amounts are included, in whole or in part, in the Preliminary Settlement
Statement.  Such amounts (to the extent the same differ from the estimates in
the Preliminary Settlement Statement) will be accounted for in the Final
Settlement Statement.

 

3.8.                            Purchase Price Allocations.

 

Seller and Buyer agree to (i) allocate the Purchase Price as to the Scheduled
Interests in accordance with the allocation schedule attached as Exhibit “C”
hereto (the “Allocated Values”), (ii) treat and report the transactions
contemplated by this Agreement in all respects consistent with Exhibit “C” for
purposes of any Taxes, and (iii) not take any action inconsistent with such
obligations.  Seller and Buyer shall duly prepare and timely file such reports
and information returns as may be prescribed under Section 1060 of the Code,
including Form 8594, and any similar returns or reports required under other
applicable Law, to report the allocation of the Purchase Price in accordance
with Exhibit “C.”

 

ARTICLE 4. - SELLER’S REPRESENTATIONS AND WARRANTIES

 

Seller represents and warrants to Buyer as of the date hereof, and the Closing
Date that:

 

4.1.                            Seller is a corporation duly organized, validly
existing and in good standing under the Laws of the state of Delaware and has
all requisite corporate power and authority to own the Assets owned by Seller. 
Seller is duly licensed or qualified to do business as a foreign corporation and
is in good standing in the State of Louisiana.

 

4.2.                            Seller has all requisite power and authority to
carry on its business as

 

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presently conducted, to enter into this Agreement and the other documents and
agreements contemplated hereby, and to perform its obligations under this
Agreement and the other documents and agreements contemplated hereby. Effective
as of Closing, the consummation of the transactions contemplated by this
Agreement will not violate, nor be in conflict with, any provision of its
governing documents or any agreement or instrument to which it is a party or by
which it is bound (except any provision contained in agreements customary in the
oil and gas industry relating to (1) the Preferential Purchase Rights (defined
below) as to all or any portion of the Assets; (2) required consents to transfer
and related provisions; (3) any other third-party approvals or consents
contemplated herein), or any judgment, decree, order, statute, rule, or
regulation applicable to Seller.

 

4.3.                            This Agreement, and all documents and
instruments required hereunder to be executed and delivered by Seller at
Closing, constitute legal, valid and binding obligations of Seller in accordance
with its respective terms, subject to applicable bankruptcy and other similar
laws of general application with respect to creditors.

 

4.4.                            There are no bankruptcy, reorganization or
receivership proceedings pending, being contemplated by, or to the actual
knowledge of Seller threatened against Seller.

 

4.5.                            The execution, delivery and performance
(effective as of Closing) of this Agreement, and the transaction contemplated
hereunder has been duly and validly authorized by all requisite authorizing
action, corporate, partnership or otherwise, on the part of Seller.

 

4.6.                            Except for a) any consents or approvals
contained on any Leases, and b) any change of control provisions or other
applicable transfer restrictions in any contracts to which the Company is a
party or is bound, Seller’s execution and delivery of this Agreement and the
other documents and agreements contemplated hereby, to which it is a party and
the consummation of the transactions contemplated by this Agreement by it shall
not:

 

(i)                                     conflict with or require the consent of
any Person under any of the terms, conditions or provisions of the
organizational documents of Seller or of the Company;

 

(ii)                                  violate any provision of, or require any
filing, consent or approval under, any Laws applicable to Seller or the Company
except (in each case) where such violation or the failure to make or obtain such
filing, consent or approval would not have a Material Adverse Effect;

 

(iii)                               conflict with, result in a breach of,
constitute a default under or constitute an event that with notice or lapse of
time, or both, would constitute a default under, accelerate or permit the
acceleration of the performance required by, or require any consent,
authorization, approval, or change of control or similar payment under any
Material Contract, except where such conflict, breach or default would not have
a Material Adverse Effect; or

 

(iv)                              result in the creation or imposition of any
lien or Encumbrance upon one or more of the Scheduled Interests or Shares except
for the Permitted Encumbrances and except where such lien or Encumbrance would
not have a Material Adverse Effect.

 

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4.7.                            Seller has not incurred any obligation or
liability, contingent or otherwise, for brokers’ or finders’ fees in connection
with this Agreement and the transaction provided herein.

 

4.8.                            Other than as set forth in Exhibit “F,” there
are no claims, investigations, demands, actions, suits, or administrative, legal
or arbitration proceedings (including condemnation, expropriation, or forfeiture
proceedings) pending or, to the knowledge of Seller, threatened against Seller,
the Company, or any Asset: (i) seeking to prevent the consummation of the
transactions contemplated hereby, or (ii) which, individually or in the
aggregate, would have a Material Adverse Effect on the Assets.

 

4.9.                            The transfer of the Assets to Buyer will not
violate at the Closing Date any covenants or restrictions imposed on Seller by
any bank or other financial institution in connection with a mortgage or other
instrument, and will not result in the creation or imposition of a lien on any
portion of the Assets.

 

4.10.                     The authorized equity securities of the Company
consist of the Shares.  The Shares constitute all of the issued and outstanding
capital stock of the Company.  The Shares have been duly authorized and validly
issued and are fully paid and, to the extent provided by applicable Law,
nonassessable.  Seller owns all of the Shares free and clear of any security
interests, Claims, restrictions on transfer, options, warrants, purchase rights,
conversion rights, and exchange rights, and there are no other contracts or
commitments that could require Seller to sell, transfer, or otherwise dispose of
the Shares, other than this Agreement.  There are no voting trusts, proxies, or
other agreements or understandings with respect to the voting of the Shares.

 

4.11.                     Except as disclosed by Seller in writing, to Seller’s
knowledge, it is in material compliance with all laws, rules, regulations and
orders pertaining to such Scheduled Interest, including Environmental Laws.

 

4.12.                     To Seller’s knowledge, the Company has all
governmental permits necessary for the operation of the Scheduled Interest and
is not in material default under any permit, license or agreement relating to
the operation and maintenance of the Scheduled Interest.

 

4.13.                     (a)                                  The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Louisiana.  The Company has full corporate power and authority
to own, lease or otherwise hold the any assets it owns, leases or otherwise
holds and conduct its business in the manner presently conducted

 

(b)                                 Seller has delivered to Buyer true and
complete copies of the organizational documents of the Company.

 

(c)                                  Except as set forth on Schedule 4.13(e), as
of the Closing Date, the Company has no liabilities that would be required to be
reflected on a balance sheet (including the footnotes thereto) of the Company
prepared in accordance with GAAP, other than current liabilities incurred in the
ordinary course of business with respect to the Assets.

 

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(d)                                 The books of account, minute books, and
other records of the Company, which have been or will be made available to Buyer
prior to Closing, are complete and correct and accurately reflect all meetings
held of, and Company action taken by, the directors, officers and any committees
thereof.

 

(e)                                  The Company is an Operator in good standing
with the Louisiana Office of Conservation, Department of Natural Resources, with
full authority to carry on its business as it is currently conducted, and as it
will be conducted as of the Closing Date.

 

4.14.                     (a)                                  Effective as of
the Closing Date, Seller warrants Defensible Title to the Scheduled Interests
shown in Exhibits “A-1” and “A-2” and to the other Assets unto Buyer against
every Person whomsoever lawfully claiming or to claim the same or any part
thereof by, through or under Seller, but not otherwise, subject, however, to the
Permitted Encumbrances and to any matters properly filed of record in the Parish
wherein the property is located.

 

(b)                                 The tangible personal property comprising
the Assets is in a condition generally sufficient to operate the Assets as
currently operated.  The Assets are free and clear of all encumbrances other
than Permitted Encumbrances.

 

4.15.                     Except as set forth on Exhibit “H,” to Seller’s
knowledge, there are no waivers, consents to assign, approvals or similar rights
owned by third parties and required in connection with the conveyance of the
Assets from Seller to Buyer.

 

4.16.                     Except as set forth on Exhibit “H,” to Seller’s
knowledge, there are no rights of first refusal, preferential rights, preemptive
rights or contracts, or other commitments or understandings of a similar nature
to which Seller is a part or to which the Assets are subject.

 

4.17.                     No Hydrocarbons produced or to be produced from the
Leases are subject to any gas sales contracts other than those identified on
Exhibit “A-4” and, no third party has any call upon, option to purchase,
take-or-pay obligations, dedication rights or similar rights with respect to the
Hydrocarbons produced to be produced from Seller’s interest in the Leases,
except as described on Exhibit “A-4”.

 

4.18.                     Except as set forth on Exhibit “G,” there are no oil
or gas production imbalances with respect to the Leases.

 

4.19.                     Schedule 4.19 sets forth the name of each financial
institution in which the Company has borrowing or investment agreements, deposit
or checking accounts or safe deposit boxes and the types of those arrangements
and accounts, including, as applicable, names in which accounts or boxes are
held, the account or box numbers and the name of each Person authorized to draw
thereon or have access thereto.

 

4.20.                     The Company does not have any employees.  On and after
the Closing, the Company will not have any severance arrangements, change in
control payments or agreements, termination agreements or employment agreements,
in each case with respect to employees to the extent employed prior to the
Closing.

 

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4.21.                     On and after the Closing, the Company shall not
sponsor, maintain, contribute to or have any liability to or with respect to any
Benefit Plan that existed prior to the Closing or any former employee to the
extent employed prior to the Closing.

 

4.22.                     (a)                                  With respect to
the Assets, Seller has not entered into, or is not subject to, any agreements,
consents, orders, decrees, judgments, license or permit conditions, or other
directives of any Governmental Authority in existence as of the date of this
Agreement based on any Environmental Laws that relate to the future use of any
of the Assets and that require any change in the present conditions of any of
the Assets.

 

(b)                                 Except as set forth in Exhibit “F”, Seller
has not received written notice from any Person of any release, disposal, event,
condition, circumstance, activity, practice or incident concerning any land,
facility, asset or property included in the Assets that interferes with or
prevents compliance by Seller with any Environmental Law or the terms of any
license or permit issued pursuant thereto which would have a Material Adverse
Effect.

 

(c)                                  To Seller’s knowledge, all material
reports, studies, written notices from environmental Governmental Authorities,
tests, analyses, and other documents specifically addressing environmental
matters related to Seller’s ownership or operation of the Assets, which are in
Seller’s possession, have been made available to Buyer.

 

4.23.                     Material Contracts.

 

(a)                            Each of the contracts of the type described below
to which the Company is a party other than any such Contracts constituting
Excluded Assets (collectively, the “Material Contracts”) are set forth on
Schedule 4.23:

 

(i)                                     any Contract that can reasonably be
expected to result in aggregate payments by the Company of more than Ten
Thousand Dollars ($10,000) during the current or any subsequent fiscal year of
the Company (based solely on the terms thereof and without regard to any
expected increase in volumes or revenues);

 

(ii)                                  any Contract that can reasonably be
expected to result in aggregate revenues to the Company of more than Ten
Thousand Dollars ($10,000) during the current or any subsequent fiscal year of
the Company (based solely on the terms thereof and without regard to any
expected increase in volumes or revenues);

 

(iii)                               any indenture, mortgage, loan, credit or
sale-leaseback or similar Contract that can reasonably be expected to result in
aggregate payments by the Company of more than Ten Thousand Dollars ($10,000)
during the current or any subsequent fiscal year of the Company;

 

(iv)                              any Contract that constitutes a lease (other
than an oil and gas lease), under which the Company is the lessor or the lessee
of real or personal property which lease cannot be terminated by the Company
without penalty upon sixty (60) Days or less notice and involves an annual base
rental of more than Ten Thousand Dollars ($10,000); and

 

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(v)                                 any Contract with the Parent or an Affiliate
of Seller that will not be terminated prior to Closing.

 

(b)                                 Except as set forth on Schedule 4.23 and
except for such matters that would not have a Material Adverse Effect, the
Material Contracts are in full force and effect in accordance with their
respective terms, there exist no defaults thereunder by Seller or the Company
or, to Seller’s Knowledge, by any other Person that is a party to such Material
Contracts and no event has occurred that with notice or lapse of time or both
would constitute any default under any such Contract by the Company or, to
Seller’s Knowledge, any other Person who is a party to such Material Contract. 
Prior to the execution of this Agreement, Seller has furnished or made available
to Buyer copies of each Material Contract and all amendments thereto.

 

ARTICLE 5. - BUYER’S REPRESENTATIONS AND WARRANTIES

 

Buyer represents and warrants to Seller as of the date hereof, and the Closing
Date that:

 

5.1                               Buyer is a Texas limited liability company
duly organized, validly existing and in good standing under the Laws of the
State of Texas and has all requisite corporate power and authority to own the
Assets.  Buyer as of the Closing Date will be duly licensed or qualified to do
business as a foreign corporation and is in good standing in the State of
Louisiana.

 

5.2                               Buyer has all requisite power and authority to
carry on its business as presently conducted, to enter into this Agreement and
the other documents and agreements contemplated hereby, and to perform its
obligations under this Agreement and the other documents and agreements
contemplated hereby.  The consummation of the transactions contemplated by this
Agreement will not violate, nor be in conflict with, any provision of Buyer’s
articles of incorporation, partnership agreement(s), by-laws or governing
documents or any agreement or instrument to which it is a party or by which it
is bound, or any judgment, decree, order, statute, rule, or regulation
applicable to Buyer;

 

5.3                               The execution, delivery and performance of
this Agreement and the transactions contemplated hereunder have been duly and
validly authorized by all requisite authorizing action, corporate, partnership
or otherwise, on the part of Buyer;

 

5.4                               This Agreement, and all documents and
instruments required hereunder to be executed and delivered by Buyer at Closing,
constitute legal, valid and binding obligations of Buyer in accordance with
their respective terms, subject to applicable bankruptcy and other similar laws
of general application with respect to creditors;

 

5.5                               There are no bankruptcy, reorganization or
receivership proceedings pending, being contemplated by, or to the actual
knowledge of Buyer threatened against Buyer;

 

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5.6                               Buyer has not incurred any obligation or
liability, contingent or otherwise, for brokers’ or finders’ fees in connection
with this Agreement and the transaction provided herein;

 

5.7                               Buyer has, or by Closing will have, the
financial resources to close the transaction contemplated by this Agreement, and
pay to Seller the Purchase Price;

 

5.8                               Buyer acknowledges the existence of the claims
and suits described in Exhibit “F” and that these claims and suits are Permitted
Encumbrances as set forth in Section 8.1(e).  Buyer further acknowledges that
Buyer has, or by Closing will have, legal counsel of its choice fully review
those claims and suits identified on Exhibit “F.”  Buyer further acknowledges to
Seller that Buyer has inspected the Real Property and Personal Property, as
defined in Section1.44, and that any operating deficiencies present have been
incorporated into the negotiated Purchase Price.

 

5.9                               Buyer is acquiring the Interests for its own
account for use in its trade or business and not with a view toward any sale or
distribution thereof, nor with any present intention of making a distribution
thereof within the meaning of the Securities Act of 1933, as amended, and the
rules and regulations thereunder, any applicable state blue sky Laws or other
applicable securities Laws; and

 

5.10                        Buyer is sophisticated in the evaluation, purchase,
ownership and operation of oil and gas properties and related facilities.  In
making its decision to enter into this Agreement and to consummate the
transaction contemplated herein, Buyer has relied or shall rely solely on its
own independent investigation and evaluation of the Assets including the
environmental and physical condition of the Assets.  Prior to entering into this
Agreement, Buyer was advised by and has relied solely on its own expertise and
legal, tax, reservoir engineering, accounting, and other professional counsel
concerning this Agreement, the Assets and the value thereof; Buyer has no
Knowledge of any fact that results in the breach of any representation, warranty
or covenant of Seller given hereunder.

 

ARTICLE 6. - ACCESS TO INFORMATION AND INSPECTIONS

 

6.1.                            Title Files.

 

Promptly after the execution of this Agreement and until the Closing Date,
Seller shall permit Buyer and its representatives at reasonable times during
normal business hours to examine, in Seller’s offices at their actual location,
all abstracts of title, title opinions, title files, ownership maps, lease
files, assignments, division orders, payout statements, title curative, other
title materials and agreements pertaining to the Assets as requested by Buyer,
insofar as the same may now be in existence and in the possession of Seller.  No
warranty of any kind is made by Seller as to the information so supplied, and
Buyer agrees that any conclusions drawn therefrom are the result of its own
independent review and judgment.

 

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6.2.         Other Files.

 

Promptly after the execution of this Agreement and until the Closing Date,
Seller shall permit Buyer and its representatives at reasonable times during
normal business hours to examine, in Seller’s offices at their actual location,
all production, well, regulatory, engineering and geological information,
accounting information, environmental information, inspections and reports, and
other information, files, books, records, and data pertaining to the Assets as
requested by Buyer, insofar as the same may now be in existence and in the
possession of Seller, excepting economic evaluations and Seller’s proprietary
interpretations of same, reserve reports and any such information that is
subject to confidentiality agreements or to the attorney/client and work product
privileges.  No warranty of any kind is made by Seller as to the information so
supplied, and Buyer agrees that any conclusions drawn therefrom are the result
of its own independent review and judgment.

 

6.3.         Confidentiality Agreement.

 

All information made available to Buyer by Seller pursuant to the terms of this
Agreement shall be maintained confidential by Buyer until Closing. The
information protected by such confidentiality obligation does not include any
information that (i) at the time of disclosure is generally available to and
known by the public (other than as a result of a disclosure by Buyer), or which
after such disclosure comes into the public domain through no fault of Buyer or
its representatives, or (ii) is or was available to Buyer on a nonconfidential
basis, or (iii) is already known to Buyer, as evidenced by Buyer’s written
records, at the time of its disclosure by Seller to Buyer.  Buyer may disclose
the information or portions thereof to those employees, agents or
representatives of Buyer who need to know such information for the purpose of
assisting Buyer in connection with its performance of this Agreement. Further,
in the event that Buyer is requested or required (by deposition, interrogatory,
request for documents, subpoena, civil investigative demand or similar process)
to disclose any of the information, Buyer shall provide Seller with prompt
written notice of such request or requirement, so that Seller may seek such
protective order or other appropriate remedy as it may desire.  Buyer shall
further take reasonable steps to ensure that Buyer’s employees, consultants and
agents comply with the provisions of this Section 6.3.

 

6.4.         Inspections.

 

Promptly after the execution of this Agreement and until Closing, Seller,
subject to any necessary third-party operator approval, shall permit Buyer and
its representatives at reasonable times and at their sole risk, cost and
expense, to conduct reasonable inspections of the Assets for all purposes,
including any Environmental Defects.  The provisions of the Confidentiality
Agreement are hereby incorporated herein and adopted by reference and shall
apply to any such inspections of the Assets.

 

6.5.         No Warranty or Representation on Seller’s Information.

 

EXCEPT AS SET FORTH IN THIS AGREEMENT, SELLER MAKES NO WARRANTY OR
REPRESENTATION, EXPRESS OR IMPLIED, WITH RESPECT

 

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TO THE ACCURACY, COMPLETENESS, OR MATERIALITY OF THE INFORMATION, RECORDS, AND
DATA NOW, HERETOFORE, OR HEREAFTER MADE AVAILABLE TO BUYER IN CONNECTION WITH
THE ASSETS OR THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, ANY DESCRIPTION OF
THE ASSETS, QUALITY OR QUANTITY OF HYDROCARBON RESERVES, IF ANY, PRODUCTION
RATES, RECOMPLETION OPPORTUNITIES, DECLINE RATES, GAS BALANCING INFORMATION,
ALLOWABLES OR OTHER REGULATORY MATTERS, POTENTIAL FOR PRODUCTION OF HYDROCARBONS
FROM THE ASSETS, OR ANY OTHER MATTERS CONTAINED IN OR OMITTED FROM ANY OTHER
MATERIAL FURNISHED TO BUYER BY SELLER.  ANY AND ALL SUCH DATA, INFORMATION AND
MATERIAL FURNISHED BY SELLER IS PROVIDED AS A CONVENIENCE ONLY AND ANY RELIANCE
ON OR USE OF SAME IS AT BUYER’S SOLE RISK.

 

ARTICLE 7. - ENVIRONMENTAL MATTERS AND ADJUSTMENTS

 

7.1.         Upon execution of and pursuant to the terms of this Agreement,
Buyer shall have the right, at reasonable times during normal business hours, to
conduct its investigation into the status of the physical and environmental
condition of the Assets.  If, in the course of conducting such investigation,
Buyer discovers that any Scheduled Interest is subject to a material
Environmental Defect, Buyer may raise such material Environmental Defect in the
manner set forth hereafter.  For purposes hereof, the term “material” shall mean
that the Buyer’s good faith estimate, supported by documentation, of the cost of
remediating any single Environmental Defect, or the net reduction in value of
the Scheduled Interest affected by such Environmental Defect, whichever is
lesser, exceeds a Ten Thousand And No/100 dollars ($10,000.00) threshold amount,
and the sum of all material Environmental Defects in excess of each threshold
exceeds Fifty Thousand And No/100 dollars ($50,000.00) (the “Environmental
Deductible”). No later than 5:00 p.m. Central Standard Time on Friday,
February 22, 2008 (the “Environmental Defect Notice Date”), Buyer shall notify
Seller in writing specifying such Environmental Defects, if any, the Scheduled
Interests affected thereby, and Buyer’s good faith estimate of the costs of
remediating such defects, or the net reduction in value of the Scheduled
Interests affected by such defects, whichever is lesser, together with
supporting documentation.  Seller may, but shall be under no obligation to,
correct at its own cost and expense such defects on or before the Closing Date,
in which case there shall be no reduction to the Purchase Price.  Prior to
Closing, Buyer and Seller shall treat all information regarding any
environmental conditions as confidential, whether material or not, and shall not
make any contact with any governmental authority or third party regarding same
without the written consent of the other party unless required by law.

 

7.2.         If Buyer fails to notify Seller prior to or on the Environmental
Defect Notice Date of any Environmental Defects, all defects, whether known or
unknown, will be deemed waived for purposes of adjustments pursuant to this
Article 7, the Parties shall proceed with Closing, Seller shall be under no
obligation to correct the defects, and Buyer shall assume the risks, liability
and obligations associated with such defects.

 

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7.3.         In the event any Environmental Defect, for which notice has been
timely given as provided hereinabove, remains uncured as of Closing, Seller, at
its sole option, shall, (i) agree to cure or remediate any Environmental Defect
within a reasonable time after Closing not to exceed one hundred eighty (180)
and without any reduction to the Purchase Price in a manner acceptable to both
Parties, or (ii) reduce the Purchase Price by the amount of the Defect Value as
determined pursuant to Section 8.4, subject to application of the Environmental
Deductible described in Section 7.1 and the Aggregate Defect Basket described in
Section 7.4.

 

7.4.         The Parties agree that adjustments to the Purchase Price under this
Article 7 and Article 8 shall only occur to the extent that the aggregate Defect
Value for the Environmental Defects and Title Defects, collectively, exceed One
Hundred Thirty Five Thousand and No/100 dollars ($135,000.00) (the “Aggregate
Defect Basket”) after taking the applicable Environmental or Title Deductible
into account.  For the avoidance of doubt and by way of example only, if the sum
of the material Environmental Defects less the aggregate threshold for each
Environmental Defect is One Hundred Fifty Thousand dollars ($150,000.00) and the
sum of all Title Defects less the aggregate threshold for each Title Defect is
One Hundred Thousand dollars ($100,000.00), the total adjustment to the Purchase
Price would be One Hundred Fifteen Thousand dollars ($115,000.00) [being One
Hundred Fifty Thousand dollars ($150,000.00) for the Environmental Defects, plus
One Hundred Thousand dollars ($100,000.00) for the Title Defects, minus One
Hundred Thirty Five Thousand And No/100 dollars ($135,000.00) for the Aggregate
Defect Basket].

 

7.5.         In the event any adjustment to the Purchase Price is made due to an
Environmental Defect raised by Buyer, the Parties shall proceed with Closing,
Seller shall be under no obligation to correct the Environmental Defect, and the
Environmental Defect shall become an Assumed Obligation of Seller.

 

ARTICLE 8. - TITLE DEFECTS AND ADJUSTMENTS

 

8.1.         Definitions.

 

For purposes hereof, the terms set forth below shall have the meanings assigned
thereto.

 

(a)           “Allocated Value” shall mean the dollar amount allocated to each
Scheduled Interest as set forth on Exhibit “C.”

 

(b)           “Defensible Title”, subject to and except for the Permitted
Encumbrances (as hereinafter defined), means:

 

(1)           As to the Leases, such title held by Seller and reflected by
appropriate documentation properly filed in the official records of the parish
in which the Lease or Leases are located that (a) entitles Seller and will
entitle Buyer, after Closing, to own and receive and retain, without suspension,
reduction or termination, payment of revenues for not less than a net revenue
interest of at least that reflected on

 

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Exhibit “A-2” of all oil and gas produced, saved and marketed from or
attributable to the Wells listed, excluding Permitted Encumbrances;
(b) obligates Seller, and will obligate Buyer after Closing, to bear not more
than the working interest percentage of the costs and expenses reflected on
Exhibit “A-2” as to the Wells listed, without a corresponding proportionate
increase in the net revenue interest for such Well; (c) the Leases are free and
clear of any liens, claims or encumbrances of any kind or character as of the
Closing, except Permitted Encumbrances; and (d) the Seller is not in default
under a material provision of any Lease or other contract or agreement affecting
the Leases;

 

(2)           As to personal property included in the Assets, record title to
such property is free and clear of any liens, claims or encumbrances of any kind
or character as of the Closing, except Permitted Encumbrances; and

 

(3)           As to all other Assets, (a) such Assets are free and clear of any
liens, claims or encumbrances of any kind or character as of the Closing; and
(b) the Seller is not in default under a material provision of any Lease,
operating agreement, or other contract or agreement affecting the Assets.

 

(c)           “Title Defect” shall mean (i) any matter which causes Seller to
have less than Defensible Title to any of the Scheduled Interests as of the
Closing Date, or (ii) any matter that causes one or more of the following
statements to be untrue, except for Permitted Encumbrances:

 

(1)           Seller has not received written notice from any governmental
authority or any other person (including employees) claiming any violation of
any law, rule, regulation, ordinance, order, decision or decree of any
governmental authority with respect to the Scheduled Interests.

 

(2)           Seller, or the Operator of a Scheduled Interest, has complied in
all material respects with the provisions and requirements of all orders,
regulations and rules issued or promulgated by governmental authorities having
jurisdiction with respect to the Scheduled Interests and has filed for and
obtained all governmental certificates, permits and other authorizations
necessary for Seller’s current operation of the Scheduled Interests other than
permits, consents and authorizations required for the sale and transfer of the
Assets to Buyer;

 

(3)           Seller has not materially defaulted or materially violated any
agreement to which Seller is a party or any obligation to which Seller is bound
affecting or pertaining to the Scheduled Interests other than as disclosed
hereunder or on any exhibit attached hereto;

 

(4)           The Leases attributable to the Scheduled Interests are in full
force and effect; and

 

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(5)           All taxes, rentals, royalties, operating costs and expenses, and
other costs and expenses related to the Scheduled Interests which are due from
or are the responsibility of Seller have been paid.

 

(d)           “Title Defect Property” shall mean any Scheduled Interest or
portion thereof burdened by a Title Defect.

 

(e)           “Permitted Encumbrances” shall mean any of the following matters:

 

(1)           defects in the early chain of title consisting of failure to
recite marital status or the omission of succession or heirship proceedings;

 

(2)           defects or irregularities arising out of uncancelled mortgages,
judgments or liens, the inscriptions of which, on their face, have expired as a
matter of law prior to the Effective Time, or prior unreleased oil and gas
leases which, on their face, expired more than ten (10) years prior to the
Effective Time and have not been maintained in force and effect by production or
operations pursuant to the terms of such leases;

 

(3)           tax liens and operator’s liens for amounts not yet due and
payable, or those that are being contested in good faith by Seller in the
ordinary course of business;

 

(4)           to the extent any of the following do not materially diminish the
value of, or impair the conduct of operations on, any of the Assets and do not
impair Seller’s right to receive the revenues attributable thereto:
(i) easements, rights-of-way, servitudes, permits, surface leases and other
rights in respect of surface operations, pipelines, grazing, hunting, fishing,
logging, canals, ditches, lakes, reservoirs or the like, (ii) easements for
streets, alleys, highways, pipelines, telephone lines, power lines, railways and
other similar rights-of-way, on, over or in respect of property owned or leased
by Seller or over which Seller owns rights of way, easements, permits or
licenses, and (iii) the terms and conditions of all leases, agreements, orders,
instruments and documents pertaining to the Assets;

 

(5)           all lessors’ royalties, overriding royalties, net profits
interests, carried interest, production payments, reversionary interests and
other burdens on or deductions from the proceeds of production if the net
cumulative effect of such burdens or deductions does not reduce the net revenue
interest of Seller in any Well affected thereby to the extent that Seller will
not be able to deliver to Buyer at Closing, a net revenue interest of at least
that reflected on Exhibit “A-2” of all oil and gas produced, saved and marketed
from or attributable to the unitized sand or other sands listed from the Wells
listed, or impair the right to receive revenues attributable thereto;

 

(6)           preferential rights to purchase and required third party consents
to assignments and similar agreements with respect to which waivers or consents
are

 

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obtained from the appropriate parties, or the appropriate time period for
asserting the rights has expired without an exercise of the rights prior to the
Closing Date;

 

(7)           Required third-party consents to the assignment of the Leases,
which Seller has previously requested, but not obtained, and the lessor of any
such lease or holder of any such right has not prior to the execution of this
Agreement objected to such assignment or notified Seller in writing of such
objection obligation.

 

(8)           all rights to consent by, required notices to, filings with, or
other actions by governmental entities in connection with the sale or conveyance
of oil and gas leases or interests if they are customarily obtained subsequent
to the sale or conveyance;

 

(9)           defects or irregularities of title arising out of events or
transactions which have been barred by limitations or by acquisitive or
liberative prescription;

 

(10)         rights reserved to or vested in any municipality or governmental,
statutory or public authority to control or regulate any of the Assets in any
manner, and all applicable laws, rules and orders of governmental authority;

 

(11)         any encumbrance or other matter (whether or not constituting a
Title Defect) expressly waived in writing by Buyer or listed on Exhibit “F”;

 

(12)         the litigation and threatened litigation, and any Claims
thereunder, as listed on Exhibit “F.”

 

8.2.         Notice of Title Defects.

 

No later than 5:00 p.m. Central Standard Time on Friday, February 15, 2008 (the
“Title Defect Notice Date”), Buyer may provide Seller written notice of any
Title Defect along with a description of those matters which, in Buyer’s
reasonable opinion, constitute Title Defects and setting forth in detail Buyer’s
calculation of the value for each Title Defect.  Seller may elect, at its sole
cost and expense, but without obligation, to cure all or any portion of such
Title Defects prior to Closing, in a manner acceptable to both Parties, in which
case no reduction in the Purchase Price shall be made.  Buyer’s failure to
deliver to Seller such notice on or before the Title Defect Notice Date shall be
deemed a waiver by Buyer of all Title Defects, known or unknown, that Seller
does not have notice of from Buyer on such date.  Any defect or deficiency
concerning Seller’s title to the Scheduled Interests not asserted by Buyer on or
prior to the Title Defect Notice Date shall be deemed waived by Buyer for
purposes of any adjustment to the Purchase Price, the Parties shall proceed with
Closing, Seller shall be under no obligation to correct the defects, and Buyer
shall assume the risks, liability and obligations associated with such defects. 
However, such waiver shall not effect or impair the warranties of Seller set
forth in Section 8.5 or the indemnity obligations of Seller as set forth in
Article 17.

 

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8.3.         Title Defect Adjustment.

 

(a)           In the event any Title Defect, for which notice has been timely
given as provided hereinabove, remains uncured as of Closing, Seller may elect
to (i) cure such Title Defect by indemnifying Buyer against any damages, claims
or expenses that may arise out of such Title Defect, subject to the provisions
of Section 8.3(b) below, with no reduction in the Purchase Price; or (ii) reduce
the Purchase Price by an amount equal to the Defect Value as determined pursuant
to Section 8.4, to the extent that each individual Title Defect exceeds a Ten
Thousand And No/100 dollar ($10,000.00) threshold, and the sum of all individual
Title Defects in excess of each threshold amount exceeds Forty Five Thousand And
No/100 dollars ($45,000.00) (the “Title Defect Deductible”) and the Aggregate
Defect Basket described in Section 7.4.  Should Seller elect either alternative
“(i)” (indemnity) or “(ii)” (price reduction) in this Section 8.3(a), those
Assets affected by the Title Defect shall be transferred to Buyer at Closing.

 

(b)           The following provisions shall apply to an election by Seller
under the second sentence of Section 8.3(a) to cure a Title Defect by
indemnifying Buyer with regard to such Title Defect:

 

(1)           Seller’s indemnity shall be limited to a period of two (2) years
from the Effective Time.

 

(2)           In no event shall Seller’s indemnity exceed the amount of the
Defect Value as determined under Section 8.4 hereof.

 

(3)           Seller’s indemnity shall be freely transferable by Buyer to its
successors and assigns of the Assets affected by such Title Defect, including
without limitation, any lender to Buyer and any purchaser of such Assets,
whether directly from Buyer or through any foreclosure proceeding; and

 

(4)           If the Defect Value, as determined under Section 8.4 hereof,
individually or in the aggregate, for one or more Title Defects to be covered by
the Seller’s indemnity exceeds Seven Hundred Fifty Thousand and No/100 dollars
($750,000.00) (after application of the appropriate deductible(s) and without
application of the Aggregate Defect Basket provided for in Section 7.4), Seller
shall have no right under to indemnify Buyer with regard to such Title Defects
without Buyer’s consent.

 

(c)           In the event any adjustment to the Purchase Price is made due to a
Title Defect raised by Buyer, the Parties shall proceed with Closing, Seller
shall be under no obligation to correct such defect, and such defect shall
become an Assumed Obligation of Buyer.

 

8.4.         Environmental Defect and Title Defect Values.

 

Upon timely delivery of notice of an Environmental Defect and/or a Title Defect,
Buyer and Seller shall use their best efforts to agree on the validity and value
of the claim for

 

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the purpose of making any adjustment to the Purchase Price based on the
provisions herein (“Defect Value”).  Notwithstanding anything to the contrary
set forth herein, the Defect Value and any related adjustment to the Purchase
Price shall in no event exceed the Allocated Value of the affected Scheduled
Interest.  In determining the Defect Value of an Environmental Defect or a Title
Defect, it is the intent of the Parties to include, to the extent possible, only
that portion of the Scheduled Interests, whether an undivided interest, separate
interest or otherwise, materially and adversely affected by the defect.  The
following guidelines shall be followed by the Parties in establishing the Defect
Value of any Environmental Defect or Title Defect for the purpose of adjusting
the Purchase Price if the validity of the claim is agreed to by the Parties and
proper notice has been timely given, subject to (i) application of the
appropriate deductibles as set forth in this Agreement for Environmental Defects
and Title Defects, and (ii) application of the Aggregate Defect Basket
requirement as set forth in Section 7.4 for Environmental Defects and Title
Defects:

 

(a)           If the Title Defect is based on a difference in net revenue
interest or expense interest from that shown on Exhibit “C” for the affected
Scheduled Interest, then the Purchase Price shall be proportionately reduced or
increased as the case may be.

 

(b)           If the Environmental Defect or Title Defect is liquidated in
amount (for example, but not limited to, a lien, encumbrance, charge or
penalty), then the adjustment to the Purchase Price shall be the lesser of
(1) the sum necessary to be paid to the obligee to remove the defect from the
Scheduled Interest, or (2) the decrease in the fair market value (determined as
set forth below) of the Scheduled Interest as a result of the defect.

 

(c)           If the Environmental Defect or Title Defect represents an
obligation or burden upon the affected Scheduled Interest for which the economic
detriment is not liquidated but can be estimated with reasonable certainty as
agreed to by the Parties, the adjustment to the Purchase Price shall be the sum
necessary to compensate Buyer at Closing for the adverse economic effect which
the Environmental Defect or Title Defect will have on the affected Scheduled
Interest.  This sum shall be the lesser of the cost of remediating the defect,
or the decrease in the fair market value (determined as set forth below) of the
Scheduled Interest as a result of the defect.  The fair market value
determination shall be made by the Parties in good faith taking into account all
relevant factors, including, but not limited to, the following:

 

(1)           the Allocated Value of the Scheduled Interest affected by the
Environmental or Title Defect;

 

(2)           the productive status of the affected Scheduled Interest (i.e.,
proved developed producing, etc.) and the net present value of the future income
expected to be produced therefrom;

 

(3)           if the Title Defect represents only a possibility of title
failure, the probability that such failure will occur; and

 

(4)           the economic effect of the Environmental Defect or Title Defect.

 

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(d)           If the Defect Value cannot be determined using the above
guidelines, and if the Parties cannot otherwise agree on the amount of an
adjustment to the Purchase Price, or if the validity of the claim as to an
Environmental Defect or Title Defect cannot be agreed upon, then the Closing
shall include the Asset(s) affected thereby.  If the validity of the claim is in
dispute, there shall be no adjustment to the Purchase Price at Closing.  If the
Defect Value of the claim is in dispute, the Purchase Price at Closing shall be
adjusted by Seller’s good faith estimate of the Defect Value.  In either case,
Buyer shall have the right, exercisable within ninety (90) days after the
Closing Date, to refer the disputed matter to arbitration in accordance with
Section 18.2.  Subject to the terms of Section 18.2, the decision of the
arbitrator regarding any dispute as to the validity or Defect Value of an
Environmental Defect or a Title Defect Dispute shall be final as between the
Parties, provided in no event shall the Defect Value of the disputed
Environmental Defect or Title Defect exceed the Allocated Value of the affected
Scheduled Interest.

 

8.5.         Title Warranty.

 

SELLER SHALL CONVEY SELLER’S INTERESTS IN AND TO THE ASSETS TO BUYER AS PROVIDED
IN THE FORM OF ASSIGNMENT, CONVEYANCE AND BILL OF SALE ATTACHED AS EXHIBIT “D”
HERETO (THE “CONVEYANCE”).  THE CONVEYANCE SHALL BE MADE WITHOUT WARRANTY OF
TITLE, EITHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, AND WITHOUT RECOURSE,
EVEN AS TO THE RETURN OF THE PURCHASE PRICE OR OTHER CONSIDERATION, EXCEPT THAT,
SUBJECT TO THE PERMITTED ENCUMBRANCES, SELLER SHALL WARRANT TITLE TO THE ASSETS
AGAINST ALL CLAIMS, LIENS, BURDENS AND ENCUMBRANCES ARISING BY, THROUGH OR UNDER
SELLER, BUT NOT OTHERWISE AND NOT WITH RESPECT TO ANY IMPAIRMENT OR FAILURE OF
TITLE RELATED TO ANY LACK OF PRODUCTION IN PAYING QUANTITIES.  THE CONVEYANCE
SHALL BE MADE WITH FULL SUBSTITUTION AND SUBROGATION TO BUYER IN AND TO ALL
COVENANTS AND WARRANTIES BY OTHERS HERETOFORE GIVEN OR MADE TO SELLER WITH
RESPECT TO THE ASSETS.

 

THE PARTIES AGREE THAT THE EXISTENCE OF ANY SUCH IMBALANCES SHALL NOT BE DEEMED
A TITLE DEFECT.

 

ARTICLE 9. - DISCLAIMERS

 

9.1.         Disclaimer — Representations and Warranties.  Buyer acknowledges
and agrees that, except as otherwise expressly provided in Article 4, neither
Seller nor Seller’s parent makes any representation or warranty, express,
statutory, implied or otherwise with respect to the Company and the Assets. 
Except as otherwise expressly provided in Article 4, Seller, for itself and its
Parent, hereby expressly disclaims any and all representations and warranties
associated with the Company, or the Assets express, statutory, implied or
otherwise, including any representation or warranty

 

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regarding:  (a) title (except as provided in Section 8.5, (b) any costs,
expenses, revenues, receipts, accounts receivable, or accounts payable, (c) any
contractual, economic or financial information and data associated with the
Company, or the Assets, (d) the continued financial viability or productivity of
the Company or the Assets or transportability of product, (e) the environmental
or physical condition of the Assets, (f) any federal, state, local or tribal
income or other Tax consequences associated with the Company and the Assets,
(g) the absence of patent or latent defects, (h) the state of repair of the
Assets, (i) merchantability or conformity to models, (j) any rights of any
member of Buyer Group under appropriate Laws to claim diminution of
consideration or return of the purchase price, (k) freedom from patents,
copyright or trademark infringement, (l) fitness for a particular purpose, and
(m)  production rates, recompletion opportunities, decline rates, gas balancing
information or the quality, quantity or volume of the reserves of Hydrocarbons,
if any, attributable to the Assets.

 

9.2.         Disclaimer – Statements and Information.  Seller expressly
disclaims any and all representations and warranties, except as otherwise
expressly provided in Article 4, associated with the quality, accuracy,
completeness or materiality of the information, data and materials furnished
(whether electronically, orally, by video, in writing or any other medium, by
compact disk, in any data room, or otherwise) at any time to Buyer Group
associated with transactions contemplated by this Agreement, including,
information, data or materials regarding:  (a) title to the Assets, (b) costs,
expenses, revenues, receipts, accounts receivable or accounts payable associated
with the Company and the Assets, (c) contractual, economic or financial
information associated with the Company, the Assets , (d) the continued
financial viability or productivity of the Company or the Assets, or
transportability of product, (e) the environmental or physical condition of the
Assets, (f) federal, state, local or tribal income or other Tax consequences
associated with the Company, the Assets, (g) the absence of patent or latent
defects, (h) the state of repair of the Assets, (i) any warranty regarding
merchantability or conformity to models, (j) any rights of any member of Buyer
Group under appropriate Laws to claim diminution of consideration or return of
the purchase price, (k) any warranty of freedom from patent, copyright or
trademark infringement, (l) warranties existing under applicable Law now or
hereafter in effect, (m) any warranty regarding fitness for a particular purpose
and (n) production rates, recompletion opportunities, decline rates, gas
balancing information or the quality, quantity or volume of the reserves of
Hydrocarbons, if any, attributable to the Assets.

 

ARTICLE 10. - PREFERENTIAL PURCHASE RIGHTS

AND CONSENTS OF THIRD PARTIES

 

10.1.       Actions and Consents.

 

(a)           Seller and Buyer agree that each shall use all reasonable efforts
to take or cause to be taken all such action as may be necessary to consummate
and make effective the transactions provided in this Agreement and to assure
that it will not be under any material corporate, legal, or contractual
restriction that could prohibit or delay the timely consummation of such
transaction.

 

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(b)           Seller shall notify all holders of (i) preferential rights to
purchase the Assets (“Preferential Purchase Rights”), (ii) rights of consent to
the assignment, or (iii) rights of approval to the assignment of the Assets, and
of such terms and conditions of this Agreement to which the holders of such
rights are entitled.  Seller shall promptly notify Buyer if any Preferential
Purchase Rights are exercised, any consents or approvals denied, or if the
requisite period has elapsed without said rights having been exercised or
consents or approvals having been received.  If prior to Closing, any such
Preferential Purchase Rights are timely and properly exercised, or Seller is
unable to obtain a necessary consent or approval prior to Closing, the interest
or part thereof so affected shall be eliminated from the Assets and the Purchase
Price reduced by the portion of the Purchase Price allocated to such interest or
part thereof as provided in Exhibit “C.”  If any additional Preferential
Purchase Rights are discovered after Closing, or if a third party Preferential
Purchase Rights holder alleges improper notice, then Buyer agrees to cooperate
with Seller in giving effect to any such valid third party Preferential Purchase
Rights.  In the event any such valid third party preferential purchase rights
are validly exercised after Closing, Buyer’s sole remedy against Seller shall be
return by Seller to Buyer of that portion of the Purchase Price allocated under
Exhibit “C” to the portion of the assets on which such rights are exercised and
lost by Buyer to such third party.  The Parties agree that the Allocated Values
for properties subject to Preferential Purchase Rights shall be the sole
responsibility of Buyer, and Buyer agrees to indemnify and hold Seller harmless
from all liability and claims related to the reasonableness of such values.

 

(c)           With respect to any portion of the Assets for which a Preferential
Purchase Right has not been asserted prior to Closing or a consent or other
approval to assign has not been granted (other than Permitted Encumbrances) and
for which the time for election to exercise such Preferential Purchase Right or
to grant such consent has not expired, Closing with respect to the portion of
the Assets subject to such outstanding obligations will be deferred (the “Third
Party Interests”). Closing with respect to all other Assets will proceed as
provided in this Agreement, but the Base Purchase Price delivered to Seller at
Closing will be reduced by the Allocated Value of the Third Party Interests.  In
the event that within ninety (90) days after Closing any such Preferential
Purchase Right is waived or consent or approval is obtained or the time for
election to purchase or to deliver a consent or approval passes (such that under
the applicable documents, Seller may sell the affected Third Party Interest to
Buyer), then the Closing with respect to the applicable portion of the Third
Party Interests will proceed promptly. If such waivers, consents or approvals as
are necessary are not received by Seller within the applicable ninety (90) day
period, Seller shall retain such Third Party Interests and the Parties shall
have no further obligation to each other with respect thereto.

 

ARTICLE 11. - COVENANTS

 

11.1.       Conduct of Operations.

 

(a)           From and after the date of execution of this Agreement and until
the Closing, and subject to Section 11.2 and the constraints of applicable
operating and other agreements,

 

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Seller shall operate, manage, and administer or cause the operation, management
and administration of the Assets as a reasonable and prudent operator and in a
good and workmanlike manner consistent with its past practices, and shall carry
on its business with respect to the Assets in substantially the same manner as
before execution of this Agreement.  Prior to Closing, Seller shall use all
reasonable efforts to preserve in full force and effect all Leases, operating
agreements, easements, rights-of-way, permits, licenses, and agreements which
relate to the Assets in which Seller owns an interest, and shall perform all
obligations of Seller in or under all such agreements relating to the Assets;
provided, however, Buyer’s sole remedy for Seller’s breach of its obligations
under this Section 11.1(a) shall be limited to the amount of that portion of the
Purchase Price allocated in Exhibit “C” to that portion of the Assets affected
by such breach.  Seller shall, except for emergency action taken in the face of
serious risk to life, property, or the environment (1) submit to Buyer, for
prior written approval, all requests for operating or capital expenditures and
all proposed contracts and agreements relating to the Assets which involve
individual commitments of more than twenty-five thousand dollars ($25,000.00);
(2) consult with, inform, and advise Buyer regarding all material matters
concerning the operation, management, and administration of the Assets;
(3) obtain Buyer’s written approval prior to voting under any operating, unit,
joint venture, partnership or similar agreement; and (4) not approve or elect to
go nonconsent as to any proposed well or plug and abandon or agree to plug and
abandon any Well without Buyer’s prior written approval.  On any matter
requiring Buyer’s approval under this Section 11.1(a), Buyer shall respond
within five (5) days to Seller’s request for approval, and failure of Buyer to
respond to Seller’s request for approval within such time shall release Seller
from the obligation to obtain Buyer’s approval before proceeding on such
matter.  With respect to emergency actions taken by Seller in the face of
serious risk to life, property, or the environment, without prior approval of
Buyer pursuant to the provisions above, Seller will advise Buyer of its actions
as promptly as reasonably possible and consult with Buyer as to any further
related actions.

 

(b)           Seller shall promptly notify Buyer of any suit, lessor demand
action, or other proceeding before any court, arbitrator, or governmental agency
and any cause of action which relates to the Assets or which might result in
impairment or loss of Seller’s interest in any portion of the Assets or which
might hinder or impede the operation of the Assets.

 

11.2.       Limitations on Seller’s Covenants Pending Closing.

 

To the extent Seller is not the operator of any of the Assets, the obligations
of Seller in Section 11.1 concerning operations or activities which normally or
pursuant to existing contracts are carried out or performed by the operator,
shall be construed to require only that Seller use all reasonable efforts
(without being obligated to incur any expense or institute any cause of action)
to cause the operator of such Assets to take such actions or render such
performance as would a reasonable prudent operator and within the constraints of
the applicable operating agreements and other applicable agreements.

 

11.3.       Conduct of Company Business.

 

Except as set forth in Schedule 4.23, as provided in the Material Contracts,
required by Law or Order, as otherwise would not have a Material Adverse Effect
or as specifically

 

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contemplated by this Agreement, from the date of this Agreement until the
Closing Date, Seller shall cause the Company to, unless Buyer shall otherwise
consent in writing (which consent shall not be unreasonably withheld or
delayed):

 

(i)            operate only in the usual, regular and ordinary manner consistent
with past practice, and use its commercially reasonable efforts to preserve its
present business operations and organization;

 

(ii)           maintain books, accounts and records in the usual, regular and
ordinary manner, on a basis consistent with prior years, and comply in all
material respects with all contractual and other obligations;

 

(iii)          comply in all material respects with all applicable Laws and
Orders to which it is subject;

 

(iv)          not acquire by merger, consolidation, purchase of stock or assets,
or otherwise, any Person;

 

(v)           except in the ordinary course of business under existing lines of
credit, not create, incur or assume any debt for borrowed money;

 

(vi)          not make any material election with respect to Taxes;

 

(vii)         not amend or modify its organizational documents;

 

(viii)        not incur any capital expenditures in excess of Ten Thousand
Dollars ($10,000) except in case of emergency or as may otherwise be required to
prevent injury or damage to persons, property or the environment; and

 

(ix)           not agree to take any action or actions prohibited by any of the
foregoing clauses (i) through (ix).

 

11.4.       Return of Information.  In the event of termination of this
Agreement, Buyer shall promptly, and in any event, within ten (10) Days of such
termination, return or cause to be returned to Seller all documents and other
materials obtained from or on behalf of Seller in connection with the
transactions contemplated hereby and shall keep confidential any such
information, all in accordance with the provisions of Section 6.3.

 

ARTICLE 12. - CLOSING CONDITIONS

 

12.1.       Seller’s Closing Conditions.

 

The obligations of Seller under this Agreement are subject, at the option of
Seller, to the satisfaction, at or prior to the Closing, of the following
conditions:

 

(a)           All representations and warranties of Buyer contained in this
Agreement shall be true, accurate, and not misleading in all material respects
at and as of the Closing as if

 

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such representations and warranties were made at and as of the Closing, and
Buyer shall have performed, satisfied and complied with all agreements and
covenants required by this Agreement to be performed, satisfied and complied
with by Buyer at or prior to the Closing;

 

(b)           The execution, delivery, and performance of this Agreement and the
transactions contemplated thereby have been duly and validly authorized by all
necessary action, corporate, partnership or otherwise, on the part of Buyer, and
an officer’s certificate of Buyer confirming the same;

 

(c)           All necessary consents of and filings with any state or federal
governmental authority or agency relating to the consummation of the
transactions contemplated by this Agreement shall have been obtained,
accomplished or waived, except to the extent that such consents and filings are
normally obtained, accomplished or waived after Closing; and

 

(d)           As of the Closing Date, no suit, action or other proceeding
(excluding any such matter initiated by Seller) shall be pending or threatened
before any court or governmental agency seeking to restrain Seller or prohibit
the Closing or seeking damages against Seller as a result of the consummation of
this Agreement.

 

12.2.       Buyer’s Closing Conditions.

 

The obligations of Buyer under this Agreement are subject, at the option of
Buyer, to the satisfaction, at or prior to the Closing, of the following
conditions:

 

(a)           All representations and warranties of Seller contained in this
Agreement shall be true, accurate, and not misleading in all material respects
at and as of the Closing as if such representations and warranties were made at
and as of the Closing, and Seller shall have performed, satisfied and complied
with all agreements and covenants required by this Agreement to be performed,
satisfied and complied with by Seller at or prior to the Closing;

 

(b)           The execution, delivery, and performance of this Agreement and the
transactions contemplated thereby have been duly and validly authorized by all
necessary action, corporate, partnership or otherwise, on the part of Seller,
and an officer’s certificate of Seller confirming the same;

 

(c)           All necessary consents of and filings with any state or federal
governmental authority or agency relating to the consummation of the
transactions contemplated by this Agreement shall have been obtained,
accomplished or waived, except to the extent that such consents and filings are
normally obtained, accomplished or waived after Closing; and

 

(d)           As of the Closing Date, no suit, action or other proceeding
(excluding any such matter initiated by Buyer) shall be pending or threatened
before any court or governmental agency seeking to restrain Buyer or prohibit
the Closing or seeking damages against Buyer as a result of the consummation of
this Agreement.

 

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ARTICLE 13. - CLOSING

 

13.1.       Closing.

 

The closing of this transaction (the “Closing”) shall be held at the offices of
Adams and Reese, LLP located at 1221 McKinney, Suite 4400, Houston, Texas  77010
on March 3, 2008 at 10:00 a.m. Central Standard Time, or at such earlier date or
place as the Parties may agree in writing (herein called “Closing Date”).  Time
is of the essence and the Closing Date shall not be extended unless by written
agreement of the Parties.  Any extension of the Closing Date shall also extend
the Effective Date to March 1, 2008, without any corresponding change in the
Purchase Price.  On or before five (5) business days prior to Closing, Buyer and
Seller shall use their best efforts to provide each other copies of all closing
documents.

 

13.2.       Seller’s Closing Obligations.

 

At Closing, except to the extent comprising the Excluded Assets, Seller shall
deliver to Buyer the following:

 

(a)           the Assignment, Conveyance and Bill of Sale substantially in the
form attached as Exhibit “D,” and such other documents as may be reasonably
necessary to convey all of Seller’s interest in the Assets (except the Shares) 
to Buyer in accordance with the provisions hereof, executed by Seller;

 

(b)           two (2) non-foreign affidavit executed by an authorized officer of
Seller in the form attached as Exhibit “J”;

 

(c)           copies of all third-party waivers, consents, approvals, permits
and actions obtained;

 

(d)           exclusive possession of the Assets;

 

(e)           letters-in-lieu of transfer orders in form acceptable to Seller
and Buyer;

 

(f)            resignations of the board of directors and officers of the
Company;

 

(g)           two (2) originals of the Certificate executed by an officer of the
Seller;

 

(h)           two (2) originals of resolutions of Seller’s authorizing bodies
authorizing the transactions contemplated by this Agreement (including
designation of the Persons authorized to execute this Agreement on behalf of
Seller and the Operative Documents to which it is a party); and

 

(i)            Stock Power and stock certificate representing all outstanding
and issued capital stock of the Company.

 

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13.3.       Buyer’s Closing Obligations.

 

At Closing, Buyer shall deliver to Seller the following:

 

(a)           the Purchase Price, as adjusted, by wire transfer in immediately
available funds to a bank account designated, in writing, by Seller;

 

(b)           the Assignment, Conveyance and Bill of Sale substantially in the
form attached as Exhibit “D” executed by Buyer;

 

(c)           two (2) originals of the Certificate executed by an authorized
officer or an attorney-in-fact of Buyer; and

 

(d)           two (2) originals of resolutions of a Secretary’s certificate of
Buyer certifying resolutions of Buyer’s Board of Directors authorizing the
transactions contemplated by this Agreement (including designation of the
Persons authorized to execute this Agreement on behalf of Buyer)

 

13.4.       Joint Closing Obligations.

 

Both Parties at Closing shall execute a Settlement Statement evidencing the
amount actually wire transferred and all adjustments to the Purchase Price taken
into account at Closing.  All events of Closing shall each be deemed to have
occurred simultaneously with the other, regardless of when actually occurring
and each shall be a condition precedent to the other.

 

ARTICLE 14. –LIMITATIONS ON WARRANTIES

AND REMEDIES/DTPA-UTPCPL WAIVER

 

14.1.       Limitations on Warranties and Remedies.

 

THE EXPRESS REPRESENTATIONS AND WARRANTIES OF SELLER CONTAINED IN THIS AGREEMENT
ARE EXCLUSIVE AND ARE IN LIEU OF ALL OTHER REPRESENTATIONS AND WARRANTIES,
EXPRESS, IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY REPRESENTATION
OR WARRANTY WITH RESPECT TO THE QUALITY, QUANTITY OR VOLUME OF THE RESERVES, IF
ANY, OF OIL, GAS OR OTHER HYDROCARBONS IN OR UNDER THE LEASES, OR THE
ENVIRONMENTAL CONDITION OF THE ASSETS.  THE ITEMS OF PERSONAL PROPERTY,
EQUIPMENT, IMPROVEMENTS, FIXTURES AND APPURTENANCES CONVEYED AS PART OF THE
ASSETS ARE SOLD HEREUNDER “AS IS, WHERE IS, AND WITH ALL FAULTS” AND NO
WARRANTIES OR REPRESENTATIONS OF ANY KIND OR CHARACTER, EXPRESS OR IMPLIED,
INCLUDING ANY WARRANTY OF QUALITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE OR CONDITION, ARE GIVEN BY OR ON BEHALF OF SELLER.  IT IS UNDERSTOOD AND
AGREED THAT PRIOR TO CLOSING BUYER SHALL

 

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HAVE INSPECTED THE ASSETS FOR ALL PURPOSES AND HAS SATISFIED ITSELF AS TO THEIR
PHYSICAL AND ENVIRONMENTAL CONDITION, BOTH SURFACE AND SUBSURFACE, AND THAT
BUYER ACCEPTS SAME IN ITS “AS IS, WHERE IS AND WITH ALL FAULTS” CONDITION. 
BUYER HEREBY WAIVES ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT
LIMITATION, ANY IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE OR CONDITION, OR CONFORMITY TO SAMPLES.

 

BUYER EXPRESSLY WAIVES THE WARRANTY OF FITNESS FOR INTENDED PURPOSES OR
GUARANTEE AGAINST HIDDEN OR LATENT REDHIBITORY VICES UNDER LOUISIANA LAW,
INCLUDING LOUISIANA CIVIL CODE ARTICLES 2520 THROUGH 2548, AND THE WARRANTY
IMPOSED BY LOUISIANA CIVIL CODE ARTICLE 2475; BUYER WAIVES ALL RIGHTS IN
REDHIBITION PURSUANT TO LOUISIANA CIVIL CODE ARTICLE 2520, ET SEQ; BUYER
ACKNOWLEDGES THAT THIS EXPRESS WAIVER IS A MATERIAL AND INTEGRAL PART OF THIS
SALE AND THE CONSIDERATION THEREOF; AND BUYER ACKNOWLEDGES THAT THIS WAIVER HAS
BEEN BROUGHT TO THE ATTENTION OF BUYER AND EXPLAINED IN DETAIL AND THAT BUYER
HAS VOLUNTARILY AND KNOWINGLY CONSENTED TO THIS WAIVER OF WARRANTY OF FITNESS
AND/OR WARRANTY AGAINST REDHIBITORY VICES AND DEFECTS FOR THE ABOVE DESCRIBED
PROPERTY.

 

14.2.       Waiver of Trade Practices Acts.

 

(a)           It is the intention of the parties that Buyer’s rights and
remedies with respect to this transaction and with respect to all acts or
practices of Seller, past, present or future, in connection with this
transaction shall be governed by legal principles other than the Texas Deceptive
Trade Practices—Consumer Protection Act, Tex. Bus. & Com. Code Ann. § 17.41 et
seq. (the “DTPA”) or the Louisiana unfair trade practices and consumer
protection law, La. R.S. 51:1402, et seq. (the “UTPCPL”).  As such, Buyer hereby
waives the applicability of the DTPA and the UTPCPL to this transaction and any
and all duties, rights or remedies that might be imposed by the DTPA and/or the
UTPCPL, whether such duties, rights and remedies are applied directly by the
DTPA or the UTPCPL itself or indirectly in connection with other statutes;
provided, however, Buyer does not waive § 17.555 of the DTPA.  Buyer
acknowledges, represents and warrants that it is purchasing the goods and/or
services covered by this Agreement for commercial or business use; that it has
knowledge and experience in financial and business matters that enable it to
evaluate the merits and risks of a transaction such as this; that it is not in a
significantly disparate bargaining position with Seller, and that Buyer has been
represented by legal counsel in the negotiation of this Agreement and the terms
of this particular provision.

 

(b)           Buyer expressly recognizes that the price for which Seller has
agreed to perform its obligations under this Agreement has been predicated upon
the inapplicability of the DTPA and the UTPCPL and this waiver of the DTPA and
the UTPCPL.  Buyer further recognizes that

 

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Seller, in determining to proceed with the entering into of this Agreement, has
expressly relied on this waiver and the inapplicability of the DTPA and the
UTPCPL.

 

ARTICLE 15. - CASUALTY LOSS AND CONDEMNATION

 

If, prior to the Closing, all or any portion of the Scheduled Interests is
destroyed by fire or other casualty or if any portion of the Assets shall be
taken by condemnation or under the right of eminent domain (all of which are
herein called “Casualty Loss” and limited to property damage or taking only),
Buyer and Seller must agree prior to Closing either (i) to delete that portion
of the Scheduled Interests which is subject to the Casualty Loss from the
Assets, and the Purchase Price shall be reduced by the value allocated to the
deleted interest as set out in Exhibit “C,” or (ii) for Buyer to proceed with
the purchase of such Scheduled Interests, notwithstanding any such destruction
or taking (without reduction of the Purchase Price) in which case Seller shall
pay, at the Closing, to Buyer all sums paid to Seller by third parties by reason
of the destruction or taking of such Scheduled Interests and shall assign,
transfer and set over unto Buyer all insurance proceeds received by Seller as
well as all of the right, title and interest of Seller in and to any claims,
causes of action, unpaid proceeds or other payments from third parties arising
out of such destruction or taking.  If the Allocated Value of that portion of
the Scheduled Interests affected by the Casualty Loss as shown on Exhibit “C”
exceeds Seven Hundred Fifty Thousand and No/100 dollars ($750,000.00), Buyer and
Seller shall each have the right to terminate this Agreement upon written
notification to the other, the transaction shall not close and thereafter
neither Buyer nor Seller shall have any liability or further obligations to the
other hereunder.  In the event of such termination, Seller shall return the
Escrow Deposit to Buyer, without interest.  Prior to Closing, Seller shall not
voluntarily compromise, settle or adjust any amounts payable by reason of any
Casualty Loss without first obtaining the written consent of Buyer.

 

ARTICLE 16. - REMEDIES

 

16.1.       Seller’s Remedies.

 

If Seller and Buyer close the transaction contemplated by this Agreement on or
before the Closing Date, as it may be extended in accordance herewith, the
Escrow Deposit and any accrued interest will be applied to the Purchase Price
and the amount due from Buyer at Closing will be reduced by the amount of the
Escrow Deposit.  If the transaction contemplated by this Agreement does not
close on or before the Closing Date, as it may be extended in accordance
herewith, because (a) Seller is unable, unwilling or refuses to close, or
because (b) a condition to Buyer’s obligation to close, as set forth in
Section 12.2, is not satisfied or waived, or because (c) Buyer terminates this
Agreement under the provisions of Article_15, or as elsewhere provided for and
allowed in this Agreement, unless Buyer chooses the remedy of specific
performance, if applicable, as set forth in Section 16.2, Seller will provide
Buyer with written authorization to disburse the Escrow Deposit, with accrued
interest, within five (5) days following the later of the Closing Date or any
extension thereof in accordance with the provisions of this Agreement.  If for
any reason other than those set forth in subparagraphs (a), (b) and (c) above,
Buyer fails, refuses or is unable to close the transaction contemplated by this
Agreement on or before the Closing Date, as it may be extended in accordance
herewith, Seller shall retain the Escrow Deposit together with any

 

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accrued interest as a liquidated damage and not as a penalty, and terminate this
Agreement, as Seller’s sole and exclusive remedies for such default, all other
remedies (except as expressly retained in Section 16.3) being expressly waived
by Seller.

 

16.2.       Buyer’s Remedies.

 

Upon failure of Seller to comply herewith by the Closing Date, as it may be
extended in accordance herewith, Buyer, at its sole option and in addition to
any other remedies it may have at law or equity, may (i) enforce specific
performance, or (ii) terminate this Agreement.  In the event Buyer elects to
terminate this Agreement as set forth above, Seller shall immediately return the
Escrow Deposit to Buyer, without interest.

 

16.3.       Other Remedies.

 

Notwithstanding the foregoing, termination of this Agreement shall not prejudice
or impair Buyer’s obligations under Section 6.3 (and the Confidentiality
Agreement referenced therein).  The prevailing Party in any legal proceeding
brought under or to enforce this Agreement shall be additionally entitled to
recover court costs and reasonable attorneys’ fees from the non-prevailing
Party.  Notwithstanding the provisions of Sections 16.1 and 16.2, the remedy of
mediation and arbitration provided in Section 8.4(d) shall be the exclusive
remedy for the matters provided for in such Section.

 

16.4.       Effect of Termination.

 

In the event of termination of this Agreement under this Article 16, the
transaction shall not close and neither Buyer nor Seller shall have any further
obligations, remedies, liabilities, rights or duties to the other hereunder,
except as expressly provided herein.

 

16.5.       Limitations on Damages.

 

Notwithstanding any other provision contained elsewhere in this Agreement to the
contrary, the Parties acknowledge that this Agreement does not authorize one
Party to sue for or collect from the other Party its own punitive damages, or
its own consequential or indirect damages in connection with this Agreement and
the transactions contemplated hereby and each Party expressly waives for itself
and on behalf of its affiliates, any and all Claims it may have against the
other Party for its own such damages in connection with this Agreement and the
transactions contemplated hereby.

 

ARTICLE 17. - ASSUMPTION AND INDEMNITY

 

17.1.       Assumed Obligations; Pre-Closing Liabilities.

 

Upon and after Closing, Buyer shall own the Assets, together with all the
rights, duties, obligations, and liabilities accruing after Closing, including
the Assumed Obligations and Buyer’s indemnity obligations hereunder.  Buyer
agrees to assume and pay, perform, fulfill and discharge all Assumed Obligations
and Buyer’s indemnity obligations.  Seller

 

39

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agrees to retain and pay, perform, fulfill and discharge all Retained
Obligations, and Seller’s indemnity obligations.

 

17.2.       Buyer’s Indemnity.

 

BUYER AGREES TO INDEMNIFY, DEFEND AND HOLD SELLER, SELLER’S GROUP AND SELLER’S
EMPLOYEES, OFFICERS AND DIRECTORS HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS,
DEMANDS, LOSSES, DAMAGES, PUNITIVE DAMAGES, COSTS, EXPENSES, CAUSES OF ACTION OR
JUDGMENTS OF ANY KIND OR CHARACTER INCLUDING, WITHOUT LIMITATION, ANY INTEREST,
PENALTY, REASONABLE ATTORNEYS’ FEES AND OTHER COSTS AND EXPENSES INCURRED IN
CONNECTION THEREWITH OR THE DEFENSE THEREOF (COLLECTIVELY THE “CLAIMS”), WITH
RESPECT TO ALL LIABILITIES AND OBLIGATIONS OR ALLEGED OR THREATENED LIABILITIES
AND OBLIGATIONS CAUSED BY, RELATED TO, ATTRIBUTABLE TO, OR ARISING OUT OF THE
ASSUMED OBLIGATIONS.  THE DEFENSE AND INDEMNITY OBLIGATIONS PROVIDED BY THIS
SECTION SHALL APPLY REGARDLESS OF THE SOLE OR PARTIAL OR COMPARATIVE OR
CONCURRENT OR OTHER FAULT, NEGLIGENCE OR STRICT, PRE-EXISTING OR OTHER LIABILITY
ON THE PART OF SELLER.  ADDITIONALLY, THE DEFENSE AND INDEMNITY OBLIGATIONS
PROVIDED BY THIS SECTION SHALL APPLY REGARDLESS OF THE NATURE OF THE OBLIGATIONS
OF SELLER, BE THEY IN TORT, CONTRACT, QUASI-CONTRACT, STATUTORY, OR OTHERWISE.

 

17.3.       Seller’s Indemnity.

 

SELLER AGREES TO INDEMNIFY, DEFEND AND HOLD BUYER AND BUYER’S EMPLOYEES,
OFFICERS AND DIRECTORS HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS WITH RESPECT
TO ALL LIABILITIES AND OBLIGATIONS OR ALLEGED OR THREATENED LIABILITIES AND
OBLIGATIONS CAUSED BY, RELATED TO, ATTRIBUTABLE TO, OR ARISING OUT OF THE
RETAINED OBLIGATIONS.  THE DEFENSE AND INDEMNITY OBLIGATIONS PROVIDED BY THIS
SECTION SHALL APPLY REGARDLESS OF THE SOLE OR PARTIAL OR COMPARATIVE OR
CONCURRENT OR OTHER FAULT, NEGLIGENCE OR STRICT, PRE-EXISTING OR OTHER LIABILITY
ON THE PART OF BUYER.  ADDITIONALLY, THE DEFENSE AND INDEMNITY OBLIGATIONS
PROVIDED BY THIS SECTION SHALL APPLY REGARDLESS OF THE NATURE OF THE OBLIGATIONS
OF BUYER, BE THEY IN TORT, CONTRACT, QUASI-CONTRACT, STATUTORY, OR OTHERWISE.

 

17.4.       Stipulation Regarding Express Negligence And Fault.

 

THE PARTIES HERETO BOTH AGREE AND STIPULATE THAT THEY HAVE ACTUAL KNOWLEDGE OF
ALL INDEMNITY PROVISIONS HEREIN, THAT THEY ARE FAMILIAR WITH THE EXPRESS
NEGLIGENCE TEST, THAT

 

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THIS DEFENSE AND INDEMNIFICATION AGREEMENT COMPLIES WITH THE EXPRESS NEGLIGENCE
TEST, THAT THE PARTIES CLEARLY INTEND TO TRANSFER THE RISK OF LOSS FOR THE
INDEMNITEE’S NEGLIGENCE, FAULT AND OTHER LIABILITIES AND OBLIGATIONS AS SET
FORTH ABOVE TO BUYER, AND THAT THESE INDEMNIFICATION PROVISIONS ARE CONSPICUOUS.

 

17.5.       Broker or Finder’s Fee.

 

Each Party hereby agrees to indemnify and hold the other harmless from and
against any claim for a brokerage or finder’s fee or commission in connection
with this Agreement or the transactions contemplated by this Agreement to the
extent such claim arises from or is attributable to the actions of such
indemnifying Party, including, without limitation, any and all losses, damages,
punitive damages, attorneys’ fees, costs and expenses of any kind or character
arising out of or incurred in connection with any such claim or defending
against the same.

 

17.6        Litigation.             Seller shall retain responsibility and
liability for the litigation and threatened litigation listed on Exhibit “F,”
and the Claims thereunder, except as provided in this Section 17.6.

 

17.7.       Insurance, Taxes.  The amount of any Claims for which any party is
entitled to indemnification under this Agreement shall be reduced by any
corresponding (a)  tax benefit created or generated or (b)  insurance proceeds
realized by such party if a claim were properly pursued under the relevant
insurance arrangements.

 

17.8.       Waiver of Certain Damages.  Each of the Parties expressly waives and
agrees not to, and to cause the members of the Buyer Group in the case of Buyer
and the members of the Seller Group in the case of Seller not to, seek indirect,
consequential, punitive or exemplary damages or damages for lost profits of any
kind with respect to any dispute arising under, related to, or in connection
with this Agreement or breach hereof (except such damages that are payable to a
third party with respect to a third party claim for which any Person is seeking
indemnification hereunder).  The Parties agree that no indemnified Person shall
be entitled to any such damages under this Agreement.

 

17.9.       Extent of Indemnification.  Without limiting or enlarging the scope
of the indemnification, disclaimer and assumption obligations set forth in this
Agreement, to the fullest extent permitted by Law, an indemnified Person shall
be entitled to indemnification hereunder in accordance with the terms hereof,
regardless of whether the indemnifiable loss giving rise to any such
indemnification obligation is the result of the sole, active, passive,
concurrent or comparative negligence, strict liability or other legal fault or
violation of any Law of or by any such indemnified Person.  Buyer and Seller
acknowledge that this statement complies with the express negligence rule and is
conspicuous.

 

17.10.     Disclaimer of Application of Anti-Indemnity Statutes.  The Parties
acknowledge and agree that the provisions of any anti-indemnity statute relating
to

 

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oilfield services and associated activities shall not be applicable to this
Agreement or the transactions contemplated hereby.

 

17.11.     Waiver of Right to Rescission.  Seller and Buyer acknowledge that the
payment of money, as limited by the terms of this Agreement, shall be adequate
compensation for breach of any representation, warranty, covenant or agreement
contained herein or for any other claim arising in connection with or with
respect to the transactions contemplated in this Agreement.  As the payment of
money shall be adequate compensation, Buyer and Seller waive any right to
rescind this Agreement or any of the transactions contemplated hereby.

 

17.12.     Indemnity Claims.

 

From and after Initial Closing, any demand for indemnity hereunder shall be made
by written notice, together with a written description of any Claims asserted
stating the nature and basis of such Claim and, if ascertainable, the amount
thereof.  The Party upon whom notice is served shall have a period of twenty
(20) days after receipt of such notice within which to respond thereto or, in
the case of an underlying demand which requires a shorter time for response,
then within such shorter period as specified in such notice (the “Notice
Period”).  If the Party upon whom notice is served denies liability or fails to
provide the defense for any Claim, the other Party may defend or compromise the
Claim as it deems appropriate.  If the Party upon whom notice is served accepts
liability and responsibility for the defense of any Claim, it shall so notify
the other Party as soon as is practicable prior to the expiration of the Notice
Period and undertake the defense or compromise of such Claim with counsel
selected by the Party accepting such liability.  If the Party on whom notice is
served undertakes the defense or compromise of such Claim, the other Party shall
be entitled, at its own expense, to participate in such defense.  No compromise
or settlement of any Claim shall be made without reasonable notice to the other
Party, and without the prior written approval of the other Party, which approval
shall not be unreasonably withheld or delayed.  No such approval shall be
withheld if such compromise or settlement includes a general and complete
release of the other Party, its successors, assigns, Affiliates and their
respective Representatives in respect of the matter, with prejudice, and with no
express or written admission of liability on the part of the other Party, its
Affiliates and their respective Representatives, and is without cost or
liability and has no constraints on the future conduct of its or their
respective businesses. Buyer and Seller acknowledge that their obligations to
indemnify, defend and hold the other Party and its Affiliates harmless under
this Agreement include obligations to pay the attorneys’ fees and court and
arbitral costs incurred by the other Party and its Affiliates in defending said
Claims, regardless of the merits of said Claims, where the Party to whom notice
is served hereunder denies liability or fails to provide the defense for any
said Claim.           Seller and Buyer shall have the right at all times to
participate, at their sole cost, in the preparation for any defense, hearing or
trial related to the indemnities set forth in this Agreement, as well as the
right to appear on their own behalf or to retain separate counsel to represent
them at any such hearing or trial.

 

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ARTICLE 18. - MISCELLANEOUS

 

18.1.       Receivables and other Excluded Funds.

 

Buyer shall be under no obligation to collect on behalf of Seller any
receivables or other funds included in the Excluded Assets above.  With respect
to receivables, Buyer shall be free to treat the interests of any party with a
delinquent receivable in any manner deemed appropriate by Buyer.

 

18.2.       Arbitration.

 

Unless expressly provided otherwise in this Agreement, any and all claims or
causes of action arising out of or relating to this Agreement must be resolved
through the use of binding arbitration using three (3) arbitrators, in
accordance with the Commercial Arbitration Rules of the AAA, as supplemented to
the extent necessary to determine any procedural appeal questions by the Federal
Arbitration Act (Title 9 of the United States Code).  If there is any
inconsistency between this Article and the Commercial Arbitration Rules or the
Federal Arbitration Act, the terms of this Article shall control the rights and
obligations of the Parties.  If there is more than one (1) Arbitrable Dispute
that involves the same facts and parties as the facts and parties with respect
to which an arbitration has been initiated pursuant to this Agreement, such
disputes shall be consolidated into the first arbitration initiated pursuant to
this Agreement.  No other arbitration shall be consolidated with any arbitration
initiated pursuant to this Agreement without the agreement of the Parties or
parties thereto.  Arbitration may be initiated by a Party (“Claimant”) serving
written notice on the other Party (“Respondent”) that the Claimant has referred
the Arbitrable Dispute to binding arbitration.  Claimant’s notice initiating
binding arbitration must describe in reasonable detail the nature of the
Arbitrable Dispute and the facts and circumstances relating thereto and identify
the arbitrator Claimant has appointed.  Respondent shall respond to Claimant
within thirty (30) Days after receipt of Claimant’s notice, identifying the
arbitrator Respondent has appointed.  If Respondent fails for any reason to name
an arbitrator within the thirty (30) Day period, Claimant shall name the
arbitrator for Respondent’s account.  The two (2) arbitrators so chosen shall
select a third arbitrator (who must have not less than seven (7) years
experience as a lawyer in the energy industry) within thirty (30) Days after the
second arbitrator has been appointed.  If the two arbitrators are unable to
agree on a third arbitrator within thirty (30) Days from the date the second
arbitrator has been appointed, then a third arbitrator shall be selected by the
AAA office in Houston, Texas, with due regard given to the selection criteria
above and input from the Parties and other arbitrators.  The AAA shall select
the third arbitrator not later than ninety (90) Days from initiation of
arbitration.  In the event AAA should fail to select the third arbitrator within
ninety (90) Days from initiation of arbitration, then either Party may petition
the Chief United States District Judge for the Southern District of Texas to
select the third arbitrator.  Due regard shall be given to the selection
criteria above and input from the Parties and other arbitrators.  Claimant shall
pay the compensation and expenses of the arbitrator named by or for it, and
Respondent shall pay the compensation and expenses of the arbitrator named by or
for it.  Claimant and Respondent shall each pay one-half of the compensation and
expenses of the third arbitrator.  All arbitrators must be neutral parties who
have never been officers, directors or employees of the Parties or any of their
Affiliates.  Unless expressly provided otherwise in this Agreement, the two (2)

 

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arbitrators named by the Parties must have not less than seven (7) years
experience in the energy industry, and must have a formal education or training
in the area of dispute resolution.  The hearing shall be conducted in Houston,
Texas and commence within sixty (60) Days after the selection of the third
arbitrator.  The Parties and the arbitrators should proceed diligently and in
good faith in order that the award may be made as promptly as possible.  The
arbitrators shall determine the Arbitrable Disputes of the Parties and render a
final award in accordance with the substantive Law of the State of Texas,
excluding the conflicts provisions of such Law.  The arbitrators shall render
their decision on or before sixty (60) Days following the completion of the
hearing.  The arbitrator’s decision shall be in writing and set forth the
reasons for the award and shall include an award of costs to the prevailing
party, including without limitation reasonable attorneys’ fees and
disbursements.  All statutes of limitations and defenses based upon passage of
time applicable to any Arbitrable Dispute (including any counterclaim or setoff)
shall be interrupted by the filing of the arbitration and suspended while the
arbitration is pending.  The terms hereof shall not create or limit any
obligations of a Party to defend, indemnify, or hold harmless another Party
against court proceedings or other Claims.  In order to prevent irreparable
harm, the arbitrators shall have the power to grant temporary or permanent
injunctive or other equitable relief.  A Party may, notwithstanding any other
provision of this Agreement, seek temporary injunctive relief from any court of
competent jurisdiction; provided that the Party seeking such relief shall (if
arbitration has not already been commenced) simultaneously commence
arbitration.  Such court-ordered relief shall not continue more than ten
(10) Days after the appointment of the arbitrators and in no event for longer
than sixty (60) Days.  Except as provided in the Federal Arbitration Act, the
decision of the arbitrators shall be binding on and non-appealable by the
Parties.  Each Party agrees that any arbitration award against it may be
enforced in any court of competent jurisdiction and that any Party may authorize
any such court to enter judgment on the arbitrators’ decisions.  The arbitrators
may not grant or award indirect, consequential, punitive or exemplary damages or
damages for lost profits.

 

18.3.       Public Announcements.

 

The Parties hereto agree that prior to Closing, each may publicly disclose the
principal terms of this Agreement following its execution, provided that prior
to making any public announcement or statement with respect to the transaction
contemplated by this Agreement, the Party desiring to make such public
announcement or statement shall consult with the other Party hereto and exercise
its best efforts to (i) agree upon the text of a joint public announcement or
statement to be made by both of such Parties; or (ii) obtain written approval of
the other Party hereto to the text of a public announcement or statement to be
made solely by Seller or Buyer, as the case may be.  Nothing contained in this
paragraph shall be construed to require either Party to obtain approval of the
other Party hereto to disclose information with respect to the transaction
contemplated by this Agreement to any state or federal governmental authority or
agency to the extent (i) required by applicable law or by any applicable rules,
regulations or orders of any governmental authority or agency having
jurisdiction; or (ii) necessary to comply with disclosure requirements of the
American Stock Exchange or other recognized exchange or over the counter, and
applicable securities laws.

 

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18.4.       Filing and Recording of Assignments, etc.

 

Buyer shall be solely responsible for all filings and the prompt recording of
assignments and other documents related to the transfer of the Assets as
contemplated hereunder and for all fees connected therewith, and Buyer shall
furnish certified copies of all such filed and/or recorded documents to Seller. 
Seller shall not be responsible for any loss to Buyer because of Buyer’s failure
to file or record documents correctly or promptly.  Buyer shall promptly file
all appropriate forms, declarations or bonds with federal and state agencies
relative to its assumption of operations and Seller shall cooperate with Buyer
in connection with such filings.  Buyer shall also comply with all notice
provisions contained in the Leases or otherwise applicable to the transfer of
the Assets.

 

18.5.       Further Assurances and Records.

 

(a)           After the Closing, each of the Parties will execute, acknowledge
and deliver to the other such further instruments, and take such other action,
as may be reasonably requested in order to more effectively assure to said Party
all of the respective properties, rights, titles, interests, estates, and
privileges intended to be assigned, delivered or inuring to the benefit of such
Party in consummation of the transactions contemplated hereby.  Without limiting
the foregoing, in the event Exhibits “A-1” through “A-5” incorrectly or
insufficiently describe or reference an interest intended to be conveyed hereby,
Seller agrees to, within twenty (20) days of Seller’s receipt of Buyer’s written
request, together with supporting documentation satisfactory to Seller, correct
such Exhibit and/or execute an amended assignment or other appropriate
instruments necessary to transfer the property or interest intended to be
conveyed hereby to Buyer.

 

(b)           Buyer agrees to maintain the files and records of Seller that are
acquired pursuant to this Agreement for seven (7) years after Closing.  Buyer
shall provide Seller and its representatives reasonable access to and the right
to copy such files and records for the purposes of (i) preparing and delivering
any accounting provided for under this Agreement and adjusting, prorating and
settling the charges and credits provided for in this Agreement; (ii) complying
with any law, rule or regulation affecting Seller’s interest in the Assets prior
to the Closing Date; (iii) preparing any audit of the books and records of any
third party relating to Seller’s interest in the Assets prior to the Closing
Date, or responding to any audit prepared by such third parties; (iv) preparing
tax returns; (v) responding to or disputing any tax audit; or (vi) asserting,
defending or otherwise dealing with any claim or dispute under this Agreement or
as to the Assets.

 

(c)           Buyer agrees that within thirty (30) days after Closing or within
thirty (30) days after operations are actually transferred, whichever is later,
it will remove or cause to be removed its signs and the names and marks used by
Seller and all variations and derivatives thereof and logos relating thereto
from the Assets and will not thereafter make any use whatsoever of such names,
marks and logos.

 

(d)           To the extent not obtained or satisfied as of Closing, Seller
agrees to continue to use all reasonable efforts, but without any obligation to
incur any cost or expense in

 

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connection therewith, and to cooperate with Buyer’s efforts to obtain for Buyer
(i) access to files, records and data relating to the Assets in the possession
of third parties; and (ii) access to wells constituting a part of the Assets
operated by third parties for purposes of inspecting same.

 

(e)           Buyer shall comply with all current and subsequently amended
applicable laws, ordinances, rules, and regulations applicable to the Assets and
shall promptly obtain and maintain all permits required by governmental
authorities in connection with the Assets.

 

18.6.       Notices.

 

Except as otherwise expressly provided herein, all communications required or
permitted under this Agreement shall be in writing and may be given by personal
delivery, facsimile, US mail (postage prepaid), or commercial delivery service,
and any communication hereunder shall be deemed to have been duly given and
received when actually delivered to the address of the Parties to be notified as
set forth below and addressed as follows:

 

If to Seller, as follows:

 

 

 

 

 

 

 

NGS Sub. Corp.

 

 

 

2500 City West Blvd, Suite 1300

 

 

 

Houston, Texas 77042

 

 

 

Attention: Robert S. Herlin, President

 

 

 

Facsimile:

713-935-0199

 

Confirm:

713-935-0122

 

 

 

 

With a copy to:

 

 

 

 

 

 

 

Mark A. Mathews

 

 

 

Adams and Reese LLP

 

 

 

4400 One Houston Center

 

 

 

1221 McKinney

 

 

 

Houston, Texas 77010

 

 

 

Facsimile:

713-652-5152

 

Confirm:

713-652-5151

 

 

 

 

If to Buyer, as follows:

 

 

 

 

 

 

 

MWM Energy, LLC

 

 

 

114 30th Avenue South

 

 

 

Nashville, Tennessee 37212

 

 

 

Attention: Stephen F. Moore, CEO

 

 

 

Facsimile:

615-340-5391

 

Confirm:

615-340-5389

 

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With copies to:

 

 

 

 

 

 

 

Gary Wadkins

 

 

 

5100 Sweetbriar Lane, Suite 121

 

 

 

Tyler, Texas 75703

 

 

 

Facsimile:

903-534-6005

 

Confirm:

903-534-2944

 

 

RR Advisors, LLC

 

 

 

21 Waterway, Suite 300

 

 

 

The Woodlands, Texas 77380

 

 

 

Attention:

W. Mark Meyer

 

Facsimile:

214-871-8644

 

Confirm:

832-287-8523

 

 

Charles Robert Bone

 

 

 

Bone McAllester Norton PLLC

 

 

 

511 Union Street, Suite 1600

 

 

 

Nashville, Tennessee 37219

 

 

 

Facsimile:

615-238-6301

 

Confirm:

615-238-6301

 

Provided, however, that any notice required or permitted under this Agreement
will be effective if given verbally within the time provided, so long as such
verbal notice is followed by written notice thereof in the manner provided
herein within twenty-four (24) hours following the end of such time period.  Any
Party may, by written notice so delivered to the other, change the address to
which delivery shall thereafter be made.

 

18.7.       Incidental Expenses.

 

Buyer shall bear and pay (i) all state or local government sales, transfer,
gross proceeds, or similar taxes incident to or caused by the transfer of the
Assets to Buyer, (ii) all documentary, transfer and other state and local
government taxes incident to the transfer of the Assets to Buyer; and (iii) all
filing, recording or registration fees for any assignment or conveyance
delivered hereunder.  Each Party shall bear its own respective expenses incurred
in connection with the negotiation and Closing of this transaction, including
its own consultants’ fees, attorneys’ fees, accountants’ fees, and other similar
costs and expenses.

 

18.8.       Waiver.

 

Any of the terms, provisions, covenants, representations, warranties or
conditions hereof may be waived only by a written instrument executed by the
Party waiving compliance.  Except as otherwise expressly provided in this
Agreement, the failure of any Party at any time or times to require performance
of any provision hereof shall in no manner affect such Party’s right to enforce
the same.  No waiver by any Party of any condition, or of the breach of any
term, provision, covenant, representation or warranty contained in this

 

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Agreement, whether by conduct or otherwise, in any one or more instances, shall
be deemed to be or construed as a further or continuing waiver of any such
condition or breach or a waiver of any other condition or of the breach of any
other term, provision, covenant, representation or warranty.

 

18.9.       Binding Effect; Assignment.

 

All the terms, provisions, covenants, obligations, indemnities, representations,
warranties and conditions of this Agreement shall be covenants running with the
land and shall inure to the benefit of, and be binding upon, and shall be
enforceable by, the parties hereto and their respective successors and assigns. 
The rights of Buyer under this Agreement to acquire the Assets are personal and
this Agreement may not be assigned or transferred by Buyer to any other party,
firm, corporation or other entity, without the prior, express and written
consent of Seller, and such consent may be withheld for any reason, including
convenience.  Any attempt to assign this Agreement by Buyer over the objection
or without the express written consent of the Seller shall be absolutely void. 
Seller may condition its consent to assign this Agreement on Buyer providing
Seller with an appropriate guarantee of its assignee’s performance.  Any
subsequent transfer of this Agreement or of all or any part of the Assets shall
be made expressly subject to the terms and provisions of this Agreement.  In the
event Buyer sells, assigns or otherwise transfers all or a portion of the
Assets, (i) this Agreement shall remain in effect between Buyer and Seller as to
all the Assets regardless of such sale, assignment or transfer (and Buyer shall
not be thereby released, but shall remain obligated hereunder), (ii) Buyer shall
require its successors and assigns expressly to assume its duties,
responsibilities and obligations under this Agreement, to the extent related or
applicable to the Assets or the portion thereof acquired by them, but such
assumption shall not release Buyer from any such assumed obligations, and
(iii) Buyer shall obtain Seller’s prior written consent.  Any sale, assignment
or other transfer of the Leases or other Assets shall also contain such other
language as is necessary to satisfy the terms and provisions of such Leases or
the agreements applicable to such Assets.

 

18.10.     Taxes.

 

(a)           Seller and Buyer agree that this transaction may be subject to the
reporting requirement of Section 1060 of the Internal Revenue Code of 1986, as
amended, and that, therefore, IRS Form 8594, Asset Acquisition Statement, will
be filed for this transaction.  The Parties will confer and cooperate in the
preparation and filing of their respective forms to reflect a consistent
reporting of the agreed upon allocation.

 

(b)           Seller shall be responsible for all state, local and federal
property, ad valorem, excise, and severance taxes attributable to or arising
from the ownership or operation of the Assets prior to the Effective Time. 
Buyer shall be responsible for all property and severance taxes attributable to
or arising from the ownership or operation of the Assets after the Effective
Time.  Any Party which pays such taxes for the other Party shall be entitled to
prompt reimbursement upon evidence of such payment.  Each Party shall be
responsible for its own federal and state income taxes, if any, as may result
from this transaction.

 

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(c)           If this transaction is determined to result in state sales or
transfer taxes, Buyer shall be solely responsible for any and all such taxes due
on the Assets acquired by Buyer by virtue of this transaction.  If Buyer is
assessed such taxes, Buyer shall promptly remit same to the taxing authority. 
If Seller is assessed such taxes, Buyer shall reimburse Seller for any such
taxes paid by Seller to the taxing authority.

 

18.11.     Audits.

 

It is expressly understood and agreed that Seller retains its right to receive
its proportionate share of the proceeds from any audits relating to activities
prior to the Effective Time, and Seller shall likewise pay its share of any
costs attributable to the period prior to the Effective Time resulting from any
such audits.

 

18.12.     Like-Kind Exchanges.

 

Seller  may elect to engage in a “like-kind exchange” under Section 1031 of the
Internal Revenue Code of 1986, as amended, and the Treasury Regulations
promulgated thereunder (collectively, the “1031 Rules”) with the Assets as
“replacement property” under the 1031 Rules.  If Seller so elects, and at
Seller’s reasonable request, Buyer shall perform such actions and execute such
documents as Seller believes to be necessary or appropriate to facilitate
Seller’s exchange transaction; provided however that (i) Seller agrees to hold
Buyer harmless from and against any expenses or liability for performing such
actions or executing such documents and (ii) Seller shall not be permitted to
assign any of its obligations under this Agreement in connection with any such
transaction.

 

18.13.     Governing Law.

 

THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS
OTHERWISE APPLICABLE TO SUCH DETERMINATIONS.  JURISDICTION AND VENUE WITH
RESPECT TO ANY DISPUTES ARISING HEREUNDER SHALL BE PROPER ONLY IN HARRIS COUNTY,
TEXAS.

 

18.14.     Entire Agreement.

 

This Agreement embodies the entire agreement between the Parties and replaces
and supersedes all prior agreements, arrangements and understandings related to
the subject matter hereof, whether written or oral.  No other agreement,
statement, or promise made by any Party, or to any employee, officer or agent of
any Party which is not contained in this Agreement shall be binding or valid. 
This Agreement may be supplemented, altered, amended, modified or revoked by a
writing only, signed by the Parties hereto.  The headings herein are for
convenience only and shall have no significance in the interpretation hereof. 
The Parties stipulate and agree that this Agreement shall be deemed and
considered for all purposes, as prepared through the joint efforts of the
Parties, and shall not be construed

 

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against one Party or the other as a result of the preparation, submittal or
other event of negotiation, drafting or execution thereof.

 

18.15.     Severability.

 

If any provision of this Agreement is found by a court of competent jurisdiction
to be invalid or unenforceable, that provision will be deemed modified to the
extent necessary to make it valid and enforceable, and if it cannot be so
modified, it shall be deemed deleted and the remainder of the Agreement shall
continue and remain in full force and effect.

 

18.16.     Exhibits and Schedules.

 

All Exhibits attached to this Agreement, and the terms of those Exhibits and
Schedules which are referred to in this Agreement, are made a part hereof and
incorporated herein by reference.

 

18.17.     Delivery of Files After Closing.

 

The Assets set out in Section 1.44 shall be made available to Buyer within ten
(10) business days after the Closing Date at a location to be specified by
Seller.  Any transportation, postage, or delivery costs from Seller’s offices
shall be at Buyer’s sole cost, risk and expense.

 

18.18.     Survival.

 

Unless otherwise specifically provided in this Agreement, all of the covenants,
representations, warranties, and agreements of or by the Parties hereto shall
not survive the Closing Date, provided, however, (i) the representations and
warranties of the Parties set forth in Articles 4 and 5 shall survive the
Closing for a period of ninety (90) days after the Closing Date, and (ii) the
indemnity obligation between the Parties contained in Article 17 and the
Arbitration provisions contained in Section 18.2 shall survive Closing without
limit.

 

18.19.     Subsequent Adjustments.

 

Regardless of the date set for the Final Settlement, Buyer and Seller agree that
their intent is to allow for the earliest practical forwarding of revenue and
reimbursement of expenses between them, and Seller and Buyer recognize that
either may receive funds or pay expenses after the Final Settlement Date which
are properly the property or obligation of the other.  Therefore, upon receipt
of net proceeds or payment of net expenses due to or payable by the other Party
hereto, whichever occurs first, Seller or Buyer, as the case may be, shall
submit a statement to the other Party hereto showing the relevant items of
income and expense with supporting documentation. Payment of any net amount due
by Seller or Buyer, as the case may be, on the basis thereof shall be made
within ten (10) days of receipt of the statement.

 

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18.20.     Counterparts.

 

This Agreement may be executed in any number of counterparts, and each and every
counterpart shall be deemed for all purposes one (1) agreement.

 

18.21.     Subrogation.

 

To the fullest extent allowed by law and the applicable agreements with third
parties, Seller grants Buyer a right of subrogation in all claims or rights
Seller may have against third parties to the extent they relate to the Assumed
Obligations.

 

18.22.     Suspended Monies.

 

Except as provided in Section 3.5, at Closing, Seller shall deliver to Buyer the
monies held in suspense by Seller for the account of third parties, or relate to
a title dispute or question as to ownership, along with any documentation in
Seller’s possession or available to Seller in support of such suspended funds. 
Except as provided in Section 3.5, any additional monies of this nature received
by Seller after Closing shall be remitted to Buyer within one hundred twenty
(120) days after the Closing hereof.  At Closing, Buyer shall assume the
obligation for the payment of these monies.

 

18.23.     Change of Name.

 

As promptly as practicable, but in any case within thirty (30) days after the
Closing Date, Buyer shall eliminate the names “NGS Sub. Corp.”, “Evolution
Petroleum Corporation,” or “Natural Gas Systems, Inc.” and any variants of these
names from the Assets acquired pursuant to this Agreement and, except with
respect to such grace period for eliminating existing usage, shall have no right
to use any logos, trademarks or trade names belonging to Seller, its parent or
any of its Affiliates.

 

18.24.     Replacement of Bonds, Letters of Credit and Guarantees.

 

The parties understand that none of the bonds, letters of credit and guarantees,
if any, posted by Seller with Governmental Bodies and relating to the Assets may
be transferable to Buyer.  Promptly following Closing, Buyer shall obtain, or
cause to be obtained in the name of Buyer, replacements for such bonds, letters
of credit and guarantees, to the extent such replacements are necessary to
permit the cancellation of the bonds, letters of credit and guarantees posted by
Seller or to consummate the transactions contemplated by this Agreement.

 

18.25.     No Third-Party Beneficiaries.

 

Nothing in this Agreement shall entitle any Person other than Buyer and Seller
to any Claims, remedy or right of any kind, except as to those rights expressly
provided to Seller Indemnitees and Buyer Indemnitees (provided, however, any
claim for indemnity hereunder on behalf of a Seller Indemnitee or a Buyer
Indemnitee must be made and administered by a Party to this Agreement).

 

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18.26.     Time of Performance.: Time is of the essence in the performance of
this Agreement.

 

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

 

 

SELLER:

 

 

 

 

NGS SUB. CORP.

 

 

 

 

 

 

 

By:

/s/Robert S. Herlin

 

 

   Robert S. Herlin, President

 

 

 

 

 

 

 

BUYER:

 

 

 

 

MWM ENERGY, LLC.

 

 

 

 

 

 

 

By:

/s/W. Mark Meyer

 

 

W. Mark Meyer, Chairman

 

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Exhibit “A-1”

 

Attached hereto and made a part of that certain

Asset Purchase and Sale Agreement dated February 15, 2008,

by and between NGS Sub. Corp., as Seller, and

MWM Energy, LLC, as Buyer

 

LEASES

 

Being the following oil and gas leases described in that certain Act of Sale and
Assignment dated September 2, 2004 from Atkins Production, Inc., et al to NGS
Sub. Corp., as recorded in Book 291, Page 179 of the Conveyance Records of
LaSalle Parish, Louisiana, more fully described as follows, to-wit:

 

1.                                       Oil, gas and mineral lease executed by
William E. Zimmerman in favor of W.S. Ezell of date April 18, 1925, recorded at
Oil and Gas Lease Book 3, Page 14, Registry 1333 of the records of LaSalle
Parish, Louisiana, insofar as the said lease covers the following described
property, to-wit: The Northeast Quarter of the Southwest Quarter of Section 25,
Township 10 North, Range 1 East, LaSalle Parish, Louisiana.

 

Lexington – Zimmerman #1 – 100’ North and 226’ West from the SE Corner of NE/4
of Section 25, Township 10 North, Range 1 East, LaSalle Parish, Louisiana

Lexington – Zimmerman #2 – 440’ North and 100’ West from the SE Corner of NE/4
of SW/4 of Section 25, Township10 North, Range 1 East, LaSalle Parish, Louisiana

Lexington – Zimmerman #3 – 669’ North and 115’ West from the SE corner of NE/4
of SW/4 of Section 25, Township 10 North, Range 1 East, LaSalle Parish,
Louisiana

Lexington – Zimmerman #4– 490’North and 290’ West from the SE corner of NE/4 of
SW/4 of Section 25, Township 10 North, Range 1 East, LaSalle Parish, Louisiana

Lexington – Zimmerman #5– 327’ North and 430’ West from the SE corner of NE/4 of
SW/4 of Section 25, Township 10 North, Range 1 East, LaSalle Parish, Louisiana

Lexington – Zimmerman #6– 100’ North and 630’ West from the SE corner of NE/4 of
SW/4 of Section 25, Township 10 North, Range 1 East, LaSalle Parish, Louisiana

Lexington – Zimmerman #7– 300’ North and 630’ West from the SE corner of NE/4 of
SW/4 of Section 25, Township 10 North, Range 1 East, LaSalle Parish, Louisiana

Lexington – Zimmerman #8– 387’ North and 788’ West from the SE corner of NE/4 of
SW/4 of Section 25, Township 10 North, Range I East, LaSalle Parish, Louisiana

Lexington – Zimmerman #14– 505’ South and 1217’ West from the NE corner of NE/4
of SW/4 of Section 25, Township 10 North, Range 1 East, LaSalle Parish,
Louisiana

Lexington – Zimmerman #15– 345’ South and 1095’ West from the NE corner of NE/4
of SW/4 of Section 25, Township 10 North, Range 1 East, LaSalle Parish,
Louisiana

Lexington – Zimmerman #16– 100’ South and 1135’ West from the NE corner of NE/4
of SW/4 of Section 25, Township 10 North, Range 1 East, LaSalle Parish,
Louisiana

Lexington – Zimmerman #17– 258’ South and 552’ West from the NE corner of NE/4
of SW/4 of Section 25, Township 10 North, Range 1 East, LaSalle Parish,
Louisiana

Lexington – Zimmerman #18– 245’ South and 300’ West from the NE corner of NE/4
of SW/4 of Section 25, Township 10 North, Range I East, LaSalle Parish,
Louisiana

 

2.                                  (Hardtner “A” Lease) Oil, gas and mineral
lease executed by the Urania Lumber Company in favor of Southern Carbon Company
of date January 23, 1923, and recorded at Oil and Gas

 

1

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Lease Book 2, Page 449, Registry 069784 of the records of LaSalle Parish,
Louisiana, insofar as the said lease covers the following described property
to-wit: The Southeast Quarter of the Southeast Quarter of Section 7, Township 10
North, Range 2 East, LaSalle Parish, Louisiana.

 

3.                                  (Hardtner “C” Lease) Oil, gas and mineral
lease executed by the Urania Lumber Company in favor of S.M. Collins and A.
Gibbons of date November 27, 1922, recorded at Oil and Gas Lease Book 2,
Page 18, Registry 06608 of the records of LaSalle Parish, Louisiana, insofar as
the said lease covers the following described property, to-wit: That portion of
the Northwest Quarter of the Northeast Quarter of Section 18, Township 10 North,
Range 2 East, lying south and east of the Iron Mountain Railway Company
railroad.

 

4.                                     (Urania A, B, C and Hardtner-Edenborn
lease) Oil, gas and mineral lease executed by Q.T. Hardtner, Jr., et al, in
favor of Ed Alexander of date October 26, 1972, recorded at Oil and Gas Lease
Book 36, Page 392, Registry 91253 of the records of LaSalle Parish, Louisiana,
insofar as the above described lease covers the following described property,
to-wit:

 

Township 10 North – Range 2 East

 

Section 19:

 

NE/4 of NW/4 of NE/4;

NW/4 of SE/4 of NW/4 of NE/4;

SE/4 of SE/4 of NW/4 of NE/4;

NW/4 of SW/4 of NE/4;

NW/4 of NE/4 of NW/4 of SE/4;

NE/4 of NE/4 of NW/4 of SE/4;

SE/4 of NE/4 of NW/4 of SE/4;

SW/4 of SW/4 of NW/4 of E/4;

S/2 of NW/4 of SE/4 of NE/4;

SW/4 of NE/4 of SE/4 of NE/4;

NE/4 of SW/4 of NE/4 of SE/4;

E/2 of SW/4 of NE/4;

SW/4 of SE/4 of NW/4 of NE/4;

NW/4 of SW/4 of NE/4 of SE/4;

NE/4 of SW/4 less the NW/4;

NW/4 of NW/4 of SE/4 of SW/4;

SW/4 of SE/4 of NW/4 of NE/4.

 

5.                                (New Pendarvis lease) Oil, gas and mineral
lease from W.P. Pendarvis in favor of M.H. O’Hara, W.B. Letson, W.T. Murray, and
W.L. Fort, dated August 16, 1923, recorded at Oil and Gas Lease Book 2, Page 74
of the records of LaSalle Parish, Louisiana, insofar and only insofar as the
said lease covers and applies from the surface of the earth to 100’ below the
top of the Wilcox Group, and insofar and only insofar as the above described
lease covers and affects one acre in the form of a square around the following
wells:

 

2

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Monroe Well Service – La. Petr. Assoc. - W.P. Pendarvis No. I – SN 193828 –
located 145’ N and 415’ W from South Quarter Corner of Section 26, T10N – R1E,
LaSalle Parish, Louisiana.

Monroe Well Service – La. Petr. Assoc. – W.P. Pendarvis No. 2 – SN 193829 –
located 345’ N and 415’ W from South Quarter Corner of Section 26, T10N-R1E,
LaSalle Parish, Louisiana.

Monroe Well Service – La. Petr. Assoc. – W.P. Pendarvis No. 3 – SN 193830 –
located 545’ N and 415’ W from South Quarter Corner of Section 26, T10N-R1E,
LaSalle Parish, Louisiana.

Monroe Well Service – La. Petr. Assoc. – W.P. Pendarvis No. 4 – SN 193831 –
located 745’ N and 415’ W from South Quarter Corner of Section 26, T10N-R1E,
LaSalle Parish, Louisiana.

Monroe Well Service – La. Petr. Assoc. – W.P. Pendarvis No. 5 – SN 193832 –
located 790’ N and 215’ W from South Quarter Corner of Section 26, T10N-R1E,
LaSalle Parish, Louisiana.

Monroe Well Service – La. Petr. Assoc. – W.P. Pendarvis No. 6 – SN 193833 –
located 590’ N and 215’ W from South Quarter Corner of Section 26, T10N-R1 E,
LaSalle Parish, Louisiana.

Monroe Well Service – La. Petr. Assoc. – W.P. Pendarvis No. 7 – SN 193834 –
located 390’ N and 215’ W from South Quarter Corner of Section 26, T10N-R1E,
LaSalle Parish, Louisiana.

Monroe Well Service – La. Petr. Assoc. – W.P. Pendarvis No. 8 – SN 193835 –
located 190’ N and 215’ W from South Quarter Corner of Section 26, T10N-R1 E,
LaSalle Parish, Louisiana.

Monroe Well Service – La. Petr. Assoc. – W.P. Pendarvis No. 10 – SN 193837 –
located 435.14’ N and 15’ W from South Quarter Corner of Section 26, T10N-R1E,
LaSalle Parish, Louisiana.

Monroe Well Service – La. Petr. Assoc. – W.P. Pendarvis No. 11 – SN 193838 –
located 635.14’ N and 15’ W from South Quarter Corner of Section 26, T10N-R1E,
LaSalle Parish, Louisiana.

Monroe Well Service – La. Petr. Assoc. – W.P. Pendarvis No. 12 – SN 194758 –
located 345’ N and 170’ E from the S/Q/C of Sec. 26, T10N, R1E, LaSalle Parish,
Louisiana.

Monroe Well Service – Beaver – Pendarvis No. I – (SN 193250) – located 1218’ N
and 369’ W from the S/Q/C of Sec. 26, T10N, R1E, LaSalle Parish, Louisiana.

Monroe Well Service – Beaver – Pendarvis No. 2 – (SN 193251) – located 1218’ N
and 169’ W from the S/Q/C of Sec. 26, T10N, R1E, LaSalle Parish, Louisiana.

Monroe Well Service - Beaver - Pendarvis No. 3 - (SN 193252) - located 818’ N
and 320’ E from the S/Q/C of Sec. 26, T10N, R1E, LaSalle Parish, Louisiana.

Monroe Well Service - Beaver - Pendarvis No. 4 - (SN 193253) - located 618’ N
and 411’ E from the S/Q/C of Sec. 26, T10N, R1E, LaSalle Parish, Louisiana.

Monroe Well Service - Beaver - Pendarvis No. 6 - (SN 193255) - located 100’ N
and 301’ E from the S/Q/C of Sec. 26, T10N, R1E, LaSalle Parish, Louisiana.

Monroe Well Service - Beaver - Pendarvis No. 7 - (SN 194757) - located 444’ N
and 345’ E from the S/Q/C of Sec. 26, T10N, R1E, LaSalle Parish, Louisiana.

Monroe Well Service - Beaver - Pendarvis No. 9 - (SN 194759) - located 545’ N
and 165’ E from the S/Q/C of Sec. 26, T10N, R1E, LaSalle Parish, Louisiana.

Monroe Well Service - Beaver - Pendarvis No. 10 - (SN 194760) - located 765’ N
and 140’ E from the S/Q/C of Sec. 26, T10N, R1E, LaSalle Parish, Louisiana.

Monroe Well Service - Beaver - Pendarvis No. 11 - (SN 194761) - located 970’ N
and 175’ E from the S/Q/C of Sec. 26, T10N, R1E, LaSalle Parish, Louisiana.

Monroe Well Service - Beaver - Pendarvis No. 12 - (SN 194762) - located 870’ N
and 30’ W from the S/Q/C of Sec. 26, T10N, R1E, LaSalle Parish, Louisiana.

Monroe Well Service - Beaver - Pendarvis No. 13 - (SN 194763) - located 1085’ N
and 8’ W from the S/Q/C of Sec. 26, T10N, R1E, LaSalle Parish, Louisiana.

 

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Monroe Well Service - Beaver - Pendarvis No. 14 - (SN 194764) - located 1020’ N
and 200’ W from the S/Q/C of Sec. 26, T10N, R1E, LaSalle Parish, Louisiana.

 

6.                                  (Old Pendarvis lease) Oil, gas and mineral
lease from W.P. Pendarvis in favor of M.H. O’Hara, W.B. Letson, W.T. Murray, and
W.L. Fort, dated August 16, 1923, recorded at Oil and Gas Lease Book 2, Page 74
of the records of LaSalle Parish, Louisiana, INSOFAR AND ONLY INSOFAR as said
lease covers and affects one acre in the form of a square around each of the
following wells:

 

Pendarvis No. 3 - SN 010281 - located 640’ N and 712’ W from SE/C of SW/4 of
SE/4 of Section 26, T1ON - R1E, LaSalle Parish, Louisiana

 

Pendarvis No. 4 - SN 010331 - located 85’ N and 827’ W from SE/C of SW/4 of SE/4
of Section 26, T1ON - RIE, LaSalle Parish, Louisiana

 

7.                                  Oil, gas and mineral lease dated May 24,
1979, recorded in Oil and Gas Book 43, Page 750, Registry 142221 of the records
of LaSalle Parish, Louisiana, executed by Missouri Pacific Railroad, Lessor, in
favor of Charles B. Bice, Lessee; insofar and only insofar as said lease covers
and affects the following:

 

SSS Mopac No. 8, (SN 183703), located in the center of Lot 10 Block 1 of the
original Town of Tullos, being 356’ North and 17’ West from the East Quarter
Corner of Section 26 Township 10 North, Range 1 West.

 

8.                                 Oil, Gas and Mineral Lease from Tremont
Lumber Company to Jackie D. Nelson, dated May 20, 1968, recorded in Oil and Gas
Book 31, Page 729, insofar as said lease covers the Southwest Quarter of
Northwest Quarter of Section 30, Township 10 North, Range 2 East, LaSalle
Parish, Louisiana, from the ground to the base of the Wilcox Formation.

 

9.                                 Oil, Gas and Mineral Lease dated November 5,
1975, recorded November 11, 1975, in Oil, Gas and Mineral Lease Record Book 67,
Page 367, records of Winn Parish, Louisiana, executed by C.S. Meredith, et al,
Lessors, unto J.B. Stafford, Lessee, covering and affecting:

 

Southeast Quarter of Northwest Quarter (SE/4 of NW/4), Section 6, Township 10
North, Range 1 East, Winn Parish, Louisiana, and INSOFAR as said lease covers
and affects down to the base of the Wilcox, together with a like interest in all
oil and/or gas well located upon said lease.

 

10.                                 Oil, Gas and Mineral Lease executed by C.S.
Meredith, curator for Betty Lou Meredith to and in favor of Atkins
Production, Inc., a Louisiana Corporation, dated May 15, 1989, recorded in
Conveyance Book 124 at Page 66, records of Winn Parish, Louisiana covering and
affecting the following described property, to-wit:

 

The Southeast Quarter of Northwest Quarter of Section 6, Township 10 North,
Range 1 East, Winn Parish, Louisiana.

 

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11.                               Oil, Gas and Mineral Lease executed by Monroe
Well Service, Delaware to and in favor of SSM Partnership, dated June 21, 1990,
recorded in Conveyance Book 127 at Page 636 records of Winn Parish, Louisiana,
INSOFAR AND ONLY INSOFAR as said lease covers and affects one acre in the from
of a square (with the well in the center thereof) around each of the following 8
wells in the NW/4 of Section 5, Township 10 North, Range 1 East, Winn Parish,
Louisiana.

 

SSS Drilling Asso. Tremont No. 1 – SN 182799 – located 940’ N and 100’ E of the
SW corner of SW/4 of NW/4 of said Section 5

SSS Drilling Asso. Tremont No. 2 – SN 182800 – located 1021’ N and 451’ E from
the SW corner of SW/4 of NW/4 of said Section 5

SSS Drilling Asso. Tremont No. 3 – SN 182801 – located 920’ N and 77’ E of the
SW corner of the SW/4 of NW/4 of said Section 5

SSS Drilling Asso. Tremont No. 4 – SN 182802 – located 620’ N and 855’ E of the
SW corner of SW/4 of NW/4 of said Section 5

SSS Drilling Asso. Tremont No. 5 – SN 182803 – located 294’ N and 895” E of the
SW corner of SW/4 of NW/4 of said Section 5

SSS Drilling Asso. Tremont No. 6 – SN 182804 – located 104’ N and 821’ E of the
SW corner of SW/4 of NW/4 of said Section 5

SSS Drilling Asso. Tremont No. 7 – SN 182805 – located 105’ N and 1020’ E of the
SW corner of SW/4 of NW/4 of said Section 5

SSS Drilling Asso. Tremont No. 8 – SN 184928 – located 100’N and 517’ E of the
SW corner of SW/4 of NW/4 of said Section 5 being 8 acres situated in the South
half of the NW/4 of Section 5, T1ON, R1E.

 

12.                            (Old Universal D lease) Oil, Gas and Mineral
Lease dated October 22, 1943 from Urania Lumber Company in Favor of M&W Oil
Company, which lease is recorded in Book 11 at Page 284 of the conveyance
records of LaSalle Parish, Louisiana and covers:

 

One acre in the form of a square (with the well as the center thereof) around
each of the following three wells; the SSM – Urania Lumber Company #D-1 Well, SN
115191, located 100 feet South and 100 feet West of the Northeast Corner of the
SE/4 of NE/4 of NE/4, Section 24, TI ON – R1E; SSM – Urania Lumber Company #D-2
Well, SN 115192, located 100 feet South and 540 feet West of the Northeast
Corner of the NE/4 of NE/4 of said Section 24, SSM-Urania Lumber Company D-3
well, SN 115468, being three acres situated in the SE/4 of NE/4 of NE/4,
Section 24 T1 ON – R1E, LaSalle Parish, Louisiana, and INSOFAR as said lease
covers a depth down to 1600 feet

 

13.                            (Old Universal C lease) Oil, Gas and Mineral
Lease dated June 12, 1941 from the Urania Lumber Company in favor of Willis C.
Martin and M.E. Waldron, which lease is recorded in Book 9 at Page 249 of the
conveyance records of LaSalle Parish, Louisiana and covers:

 

One acre in the form of a square (with the well as the center thereof) around
each of the following three wells; SSM – Urania Lumber Company #C-2 Well, SN
115773, located 100 feet North and 100 feet East of the Southwest corner of the
NW/4 of NW/4 of NW/4 Section 19, T1ON – R2E; SSM- Urania Lumber Company#C-5
Well, SN 115986, located 340 feet South and 100 feet East of the Northwest
Corner of said Section 19, C-4 well, SN 116282, being three acres situated in
the NW/4 of NW/4 of NW/4, Section 19, T1ON – R2E, LaSalle Parish, Louisiana and
INSOFAR as said lease covers a depth down to 1600’

 

5

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14.                            (Old Universal A lease) Oil, Gas and Mineral
lease dated October 22, 1943 from the Urania Lumber Company in favor of M&W Oil
Company, which lease is recorded in Book 11 at Page 284 of the conveyance
records of LaSalle Parish, Louisiana and covers:

 

One acre in the form of a square (with the well as the center thereof) around
each of the following wells; SSM – Urania Lumber Company #A-2 Well, SN 114278,
located 545 feet South and 545 feet West of the Northeast Corner of Section 24,
T1ON-R1E; SSM – Urania Lumber Company #A-2 Well SN 114442, located 300 feet West
and 100 feet North of the Southeast Corner of the NE/4 of NE/4 of NE/4 of said
Section 24; SSM – Urania Lumber Company 14A-5 Well SN 114534 located 345 feet
South and 100 feet West of the Northeast Corner of said Section 24, being three
acres situated in the NE/4 of NE/4 of NE/4, Section 24, TION-R1E, LaSalle
Parish, Louisiana and INSOFAR as said lease covers a depth down to 1600 feet

 

15.                            (MDP Lease) Lease dated September 28, 1949,
recorded in Oil and Gas Lease Book 14, Page 127, records of LaSalle Parish,
Louisiana, executed by Walter Herbert, Lessor, in favor of John T. Cupples,
Lessee, INSOFAR and ONLY INSOFAR as said lease covers and effects:

 

Lot 3 of Block 2, Original Town of Tullos, containing the Monroe Drilling
Maxwell No. 1 well, Serial Number 179671, Monroe Drilling Maxwell No. 2 well, SN
179672 located 174 feet North and 359 feet West from the East Quarter Corner of
Section 26, Township 10 North, Range 1 East, LaSalle Parish, Louisiana, and Lot
5 of Block 2, Original Town of Tullos, containing the Monroe Drilling Maxwell
No. 2 well, SN 179672 North and 424 feet West from the East Quarter Corner of
Section 26, Township 10 North, Range 1 East, LaSalle Parish, Louisiana.

 

16.                            (Shemen SWD) Oil, Gas and Mineral Lease executed
by Urania Lumber Company in favor of Willis C. Martin and M.E. Waldron of date
June 12, 1941, recorded at Oil and Gas Lease Book 9, Page 249 of the records of
LaSalle Parish, Louisiana, INSOFAR AND ONLY INSOFAR as said lease covers a depth
from the surface of the Earth down to a depth of 1600 feet, and INSOFAR AND ONLY
INSOFAR as the above described lease covers and affects one acre in the form of
a square around the following wells:

 

Urania Lumber Co., SWD #1, SN-971328, 100’ S of NE/C Section 24, T10N, R1E

 

17.                           Oil, Gas and Mineral Lease executed by the Urania
Lumber Company in favor of M&W Oil Company of date October 22, 1943, recorded at
Oil and Gas Lease Book 11, Page 284 of the records of LaSalle Parish, Louisiana,
INSOFAR AND ONLY INSOFAR as said lease covers a depth from the surface of the
Earth down to a depth of 1600 feet, and INSOFAR AND ONLY INSOFAR as the above
described lease covers and affects one acre in the form of a square around the
following wells:

 

(Urania Lumber Co. – Shemen lease)

 

Monroe Well Service – Shemen – Urania Lumber Co. No. 1 - (SN 191712) – located
362’ N and 507’ W from the SE/C of NE/4 of NE/4 of Section 24, T 10 N, R 1 E,
LaSalle Parish, Louisiana

Monroe Well Service – Shemen – Urania Lumber Co. No. 2 - (SN 191713) – located
162’ N and 507’ W from the SE/C of NE/4 of NE/4 of Section 24, T 10 N, R 1 E,
LaSalle Parish, Louisiana

 

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Monroe Well Service – Shemen – Urania Lumber Co. No. 3 (SN 191714) – located
362’ N and 307’ W from the SE/C of NE/4 of NE/4 of Section 24, T 10 N, R 1 E,
LaSalle Parish, Louisiana

 

(Urania A – Shemen lease)

 

Monroe Well Service – Shemen – Urania “A” No. 1 - (SN 191709) – located 559’ S
and 78’ W from the NE/C Section 24, T 10 N, R 1 E, LaSalle Parish, Louisiana

Monroe Well Service – Shemen – Urania “A” No. 2 - (SN 191784) – located 369’ S
and 351’ W from the NE/C Section 24, T 10 N, R 1 E, LaSalle Parish, Louisiana

Monroe Well Service – Shemen – Urania “A” No. 6 - (SN 191788) – located 131’ S
and 100’ W from the NE/C Section 24, T 10 N, R 1 E, LaSalle Parish, Louisiana

 

18.                            Oil, Gas and Mineral Lease executed by the Urania
Lumber Company in favor of Willis C. Martin and M.E. Waldron of date June 12,
1941, recorded at Oil and Gas Lease Book 9, Page 249 of the records of LaSalle
Parish, Louisiana, INSOFAR AND ONLY INSOFAR as said lease covers a depth from
the surface of the Earth down to a depth of 1600 feet, and INSOFAR AND ONLY
INSOFAR as the above described lease covers and affects one acre in the form of
a square around the following wells:

 

Monroe Well Service – Shemen – Urania “C” No. 1 (SN 191783) – located 131’ S and
100’ E from the NW/C Section 19, T 10 N, R 2 E, LaSalle Parish, Louisiana

Monroe Well Service – Shemen – Urania “C” No 2 - (SN 191779) – located 359’ S
and 302’ E from the NW/C Section 19, T 10 N, R 2 E, LaSalle Parish, Louisiana

 

19.                            (LPO) Oil, Gas and Mineral Lease executed by
Louisiana Pacific Corporation to and in favor of Atkins Production, Inc., dated
February 27, 1990, recorded under file number 144131 in Conveyance Book 174,
Page 631 of the records of LaSalle Parish, Louisiana. Covering and affecting the
following property as described:

 

Northeast Quarter of Northeast Quarter of Section 13, Township 10 North, Range 1
East

 

20.                            (LPO) Oil, Gas and Mineral Lease executed by
William Dows Blake, et al, to and in favor of Atkins Production, Inc., dated
February 1, 1990, recorded under file number 144130 in Conveyance Book 174,
Page 628 of the records of LaSalle Parish, Louisiana. Covering and affecting the
following property as described:

 

Northeast Quarter of the Northeast Quarter (NE/4 of NE/4), Section 13, Township
10 North, Range 1 East.

 

21.                            (Silver City SWD) Urania E SWD #1, Serial
#971269, located 192’ South and 1210’ East from the Center of Section 19, TI ON,
R2E, LaSalle Parish, Louisiana, along with all related Salt Water Disposal
Equipment.

 

Hartner A SWD #1, Serial #971237, located 374’ North and 998’ West from the SE
corner of Section 7, T1ON, R2E, LaSalle Parish, Louisiana.

 

22.                                 (WP Pendarvis-La Petro lease) Pendarvis SWD
Well #1, Serial #971428, located in Section 26, T1ON, RIE, LaSalle Parish,
Louisiana

 

7

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23.                            (Miles Heirs and Miles Essex leases) That certain
oil, gas and mineral lease executed by D.F. Miles, et al, in favor of Essex
Drilling Co., Inc., dated February 14, 1984, as recorded in Oil and Gas Lease
Book 61 at Page 302 of the records of LaSalle Parish, Louisiana;

 

That certain oil, gas and mineral lease executed by D.F. Miles, et al, in favor
of Essex Drilling Co., Inc., dated March 22, 1984, as recorded in Oil and Gas
Lease Book 61 at Page 405 of the records of LaSalle Parish, Louisiana;

 

That certain oil, gas and mineral lease executed by William J. Miles, et al, in
favor of Essex Drilling Co., Inc., dated as per acts recorded in Oil and Gas
Lease Book 60, Pages 688 and 733; and Oil and Gas Lease Book 61, Pages 39, 41,
43, 45, 47, 49, 51, 53, 55, 57, 185, 187, 189, 242 and 260 of the records of
LaSalle Parish, Louisiana;

 

Insofar as said leases cover and affect the following described lands in LaSalle
Parish, Louisiana, to-wit:

 

Begin at the NE Corner of the NW/4 of NW/4 of Section 25, T10N, R1E, and run
thence South 0 degrees 12’ West 533.9 feet for the point of beginning; run
thence South 0 degrees 12’ West 376 feet; run thence north 87 degrees 41’ West
391.7 feet to an iron pipe in the center of the Columbia-Alexandria Road; run
thence South 38 degrees 28’ West 278.5 feet to an iron pipe in the center of
said road; run thence north 61 degrees 37’ West 29 feet to an iron pipe on an
old rail fence line on the property line of F.J. Miles; run north 16 degrees 44’
East 402 feet to an iron pipe; run thence north 51 degrees 58’ West 10 feet to
an iron pipe; run thence North 16 degrees 44’ East 184 feet to an iron pipe on
the line of the old Kendrick Gin Lot; run thence North 89 degrees 25’ East 424.7
feet to the point of beginning.

 

That certain oil, gas and mineral lease dated August 25, 1983, from William
Julious Miles to Essex Drilling Co., Inc., as recorded in Oil and Gas Lease Book
60 at Page 688 of the records of LaSalle Parish, Louisiana;

 

That certain oil, gas and mineral lease dated September 6, 1983, from Edna Miles
Gatherer and Lillie Mae Miles Little to Essex Drilling Co., Inc., as recorded in
Oil and Gas Lease Book 60 at Page 733 of the records of LaSalle Parish,
Louisiana. Co-Lessors’ Agreements identified with the Edna Miles Gatherer, et
al. Lease as recorded in Oil and Gas Lease Book 61 at Pages 39, 41, 43, 45, 47,
49, 51, 53, 55, 57, 185, 187, 189, 242 and 260;

 

Insofar as said leases cover and affect the following described lands in LaSalle
Parish, Louisiana, to-wit:

 

A tract of land in the W/2 NW/4 of Section 25, Township 10 North, Range 1 East,
described as beginning at the SWC of lands owned by W.T. Bass on the East side
of the Missouri Pacific right-of-way, running South along the right-of-way 224
yards, run thence East 106 yards, run thence North 224 yards to the SEC of the
W.T. Bass, run thence West 106 yards to the point of beginning.

 

8

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Oil, gas and mineral lease dated August 16, 1983, from Frank Doughty, Chairman
of the Board for the LaSalle State Bank in Favor of Russell A, Flowers, husband
of Sally Ann Flowers, as recorded in Oil and Gas Lease Book 60 at Page 745 of
the records of LaSalle Parish, Louisiana

 

Insofar as said lease covers the following described lands in LaSalle Parish,
Louisiana, to-wit:

 

Lots 1, 2, 3 and 4 of Block 2, and Lot 4 of Block 12 of the Urania Lumber
Company Addition to the Town of Tullos, LaSalle Parish, Louisiana, or 728 West
and 803 North from SEC of SW/4 NW/4 of Section 25, Township 10 North, Range I
East, LaSalle Parish, Louisiana.

 

Being the following Oil, Gas and Mineral Leases described in that certain
Assignment of Oil, Gas and Mineral Leases dated December 28, 2004 from Atkins
Production, Inc. to Natural Gas Systems Corporation, as recorded in Conveyance
Book 294, Page 455 of the records of LaSalle Parish, Louisiana, more fully
described as follows, to-wit:,

 

24.           Oil, Gas and Mineral lease executed by Southern Heritage Bank in
favor of Atkins Production, Inc. dated October 8, 2004, recorded at Conveyance
Book 292, Page 99 of the records of LaSalle Parish, Louisiana

 

Oil, Gas and Mineral Lease executed by the Town of Tullos in favor of Atkins
Production, Inc. as recorded December 9, 2004 at Conveyance Book 293, Page 330
of the records of LaSalle Parish, Louisiana.

 

Insofar as said leases cover and affect Lots 1, 2, 3 and 4 of Block 2 and Lot 4
of Block 12 of the Urania Lumber Company Addition to the Town of Tullos, LaSalle
Parish, Louisiana.

 

Being the following Oil, Gas and Mineral Leases described in that certain
Assignment of Oil, Gas and Mineral Leases dated June 22, 2005 from Atkins
Production, Inc. to NGS SUB. Corp. as recorded under Registry Number 191278 and
in Conveyance Book 149, Page 438 of the records of Winn Parish, Louisiana, more
fully described as follows, to-wit:

 

25.           Oil, Gas and Mineral Lease dated May 23, 2005 from Cornelia Pray,
et al to Atkins Production, Inc., as recorded in Conveyance Book 149, Page 424
of the records of Winn Parish, Louisiana

 

26.           Oil, Gas and Mineral Lease dated May 23, 2005 from Priscilla Long
Bedgood to Atkins Production, Inc., as recorded in Conveyance Book 149, Page 428
of the records of Winn Parish, Louisiana

 

9

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27.           Oil, Gas and Mineral Lease dated May 23, 2005 from Cynthia Brown
Beauchamp to Atkins Production, Inc., as recorded in Conveyance Book 149,
Page 432 of the records of Winn Parish, Louisiana

 

28.           Oil, Gas and Mineral Lease dated March 22, 2005 from Brandon R.
Hawkins and Brandy Coburn Hawkins to Atkins Production, Inc., as recorded in
Conveyance Book 149, Page 436 of the records of Winn Parish, Louisiana

 

Being the following oil and gas leases described in that certain Act of Sale and
Assignment dated February 1, 2005 from Chadco, Inc., et al to NGS Sub. Corp., as
recorded in Book 294, Page 333 of the Conveyance Records of LaSalle Parish,
Louisiana, more fully described as follows, to-wit:

 

29.           Oil, gas and mineral lease executed by William C. Pringle, et al,
in favor of E.R. Waller dated August 26, 1936, recorded in Oil and Gas Lease
Book W, Page 449-A, Registry #23478, records of LaSalle Parish, Louisiana,
covering lands in Lot 15, Section 26, Township 10 North, Range I East, LaSalle
Parish, Louisiana.

 

30.           Oil, gas and mineral lease executed by Russell A. Flowers, et ux,
in favor of Sara Productions, dated June 6, 1995, recorded in Conveyance Book
220, Page 252, Registry #159489, records of LaSalle Parish, Louisiana, covering
the following described property, to-wit:

 

Section 26, Township 10 North, Range 1 East

 

Lot 4, Block 10, original Town of Tullos, in the NE/4 of SE/4.

Lot 1 of Russell Flowers Subdivision being a re-subdivision of Lot 3 of Block 13
of the Original Town of Tullos, in the NE/4 of SE/4.

Lot 2 of the Russell Flowers Subdivision being a re-subdivision of Lot 3 of
Block 13 of the original Town of Tullos, in the NE/4 of the SE/4.

Lot 3 of the Russell Flowers Subdivision being a re-subdivision of Lot 3 of
Block 13 of the original Town of Tullos, in the NE/4 of the SE/4.

Lot 4 of the Russell Flowers Subdivision, in the SE/4 of the SE/4.

Lot 5 of the Russell Flowers Subdivision, in the SE/4 of the SE/4.

 

31.         Oil, gas and mineral lease executed by The Urania Lumber Co. Ltd.,
in favor of Southern Carbon Company, dated January 23, 1923, recorded in Oil and
Gas Lease Book 2, Page 449, Registry #6978, records of LaSalle Parish,
Louisiana, as the said lease covers the following described property, to-wit:

 

The specific acreage in the SE/4 of SE/4, of Section 7, Township 10 North, Range
2 East, LaSalle Parish, Louisiana.

 

INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS ONE (1) ACRE IN A SQUARE
SURROUNDING THE FOLLOWING WELLS, TO-WIT:

 

Hardtner A No. 3, SN186514; located 270’ N & 516’W from SE corner of Sec. 7

 

10

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Hardtner A No. 4, SN186515; located 105’ N & 630’ W from SE corner of Sec. 7

Hardtner A No. 5, SN186516; located 320’ N & 305’ W from SE corner of Sec. 7

Hardtner A No. 6, SN186517; located 105’ N & 206’ W from SE corner of Sec. 7

Hardtner A No. 11, SN187940; located 670’ N & 500’ W from SE corner of Sec.7

Hardtner A No. 12, SN187871; located 670’ N & 702’W from SE corner of Sec. 7

Hardtner A No. 13, SN187872 located 275’ N & 740’ W from SE corner of Sec 7.

Hardtner A No. 15, SN187874; located 862’ N & 452’ W from SE corner of Sec.7

Hardtner A No. 16, SN187875 located 618’ N & 897’ W from SE corner of Sec. 7

Hardtner A No. 17, SN187876; loc. 395’ N & 908’ W from SE corner of Sec 7

Hardtner A No. 18, SN187877; loc. 217’ N & 1001’ W from SE corner of Sec. 7

Hardtner A No. 28, SN188202; loc. 100’ N & 1167’ W from SE corner of Sec. 7

 

32.           Oil, gas and mineral lease executed by Willie Green Bradford, et
ux, in favor of Russell A. Flowers, dated May 18, 1981, recorded in Oil and Gas
Lease Book 48, Page 703, Registry #114379, records of LaSalle Parish, Louisiana,
covering lands in the SE/4 of the SE/4 of Section 26, Township 10 North, Range 1
East, LaSalle Parish, Louisiana.

 

33.           Oil, gas and mineral lease executed by Board of Levee
Commissioners Tensas Basin Levee District, in favor of Max W. Maxwell dba M & M
Oil Properties, dated May 19, 1969, recorded in Oil and Gas Lease Book 32,
Page 683, Registry #8289, records of LaSalle Parish, Louisiana, the following
described property located in the NW/4 of NE/4, of Section 26, Township 10
North, Range 1 East, LaSalle Parish, Louisiana,

 

INSOFAR AND ONLY INSOFAR AS the said lease covers and affects one (1) acre in
the form of a square (with the well as the center hereof) around the following
drillsite locations:

 

Tensas Basin Levee District No. 1, SN134605; located 345’ S 380’ E of NW corner
of NW/4 of NE/4 of Section 26, Township10 North, Range I East, LaSalle Parish,
Louisiana.

Tensas Basin Levee District No. 3, SN 178732; located 120’ S & 180’ E from NW
corner of Section 26, Township10 North, Range 1 East, LaSalle Parish, Louisiana.

Tensas Basin Levee District SWD No.2, SN990623; located 196’ South & 113’ East
of NW/C of the NW/4 of NE/4 of Section 26, Township 10 North, Range 1 East,
LaSalle Parish, Louisiana.

 

34.       Oil, gas and mineral lease executed by Tremont Lumber Company, in
favor of Arkansas Fuel Oil Company, dated May 1, 1947, recorded in Oil and Gas
Lease Book 13, Page 88, records of LaSalle Parish, Louisiana,

 

INSOFAR AND ONLY INSOFAR as the following wells on a sub-lease 100’ in a circle
around each:

 

Tremont B. No. 1, SN187623; located 189.9’ FNL & 892.8’ FEL of SW/4 of NE/4 of
Section 25, Township 10 North, Range 1, East, LaSalle Parish, La.

Tremont B. No. 3, SN187822; located 307.2’ FNL & 27.1’ FEL of SW/4 of NE/4 of
Section 25, Township 10 North, Range 1, East, LaSalle Parish, LaTremont B.
No. 4, SN187824; located 404’ FNL & 405.2’ FEL of SW/4 of NE/4 of Section 25,
Township 10 North, Range 1, East, LaSalle Parish, La.

Tremont B. No. 5, SN188181; located 1131’ FEL & 604’ FNL of SE/4 of NE/4 of
Section 25, Township 10 North, Range 1, East, LaSalle Parish, La.

Tremont B. No. 6, SN189535; located 678.8’ NWL & 420.2’ FSL of SW/4 of NE/4 of
Section 25, Township 10 North, Range 1, East, LaSalle Parish, La.

 

11

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Tremont B. SWD No. 1, SN187820; located 193.3’ FNL & 889.3’ FEL of SW/4 of NE/4
of Section 25, Township 10 North, Range 1, East, LaSalle Parish, La.

Tremont B. No. 7, SN189696; located 1276’ FEL & 1022’ FNL of SE/4 of NE/4 of
Section 25, Township 10 North, Range 1, East, LaSalle Parish, La.

Tremont B. No. 8, SN 191205; located 443’ FEL & 109’ FNL of SE/4 of NE/4 of
Section 25, Township 10 North, Range 1, East, LaSalle Parish, La.

Tremont B. No. 9, SN 191207; located 202.1’ FNL & 355.4’ FWL of SE/4 of NE/4 of
Section 25, Township 10 North, Range 1, East, LaSalle Parish, La.

Tremont B. No. 10, SN178262; located 656’ North & 471’ East of SW/C of NE/4 of
Section 25, Township 10 North, Range 1, East, LaSalle Parish, La.

Tremont B. No. 12, SN182291; located 382’ South and 100’ West of NE/C of
Section 25, Township 10 North, Range 1, East, LaSalle Parish, La.

Tremont B. No. 13, SN182292; located 321’ South & 356’ West of NE/C of
Section 25, Township 10 North, Range 1, East, LaSalle Parish, La.

Tremont B. No. 14, SN 182295; located 383’ South & 546’ West of NE/C of
Section 25, Township 10 North, Range 1, East, LaSalle Parish, La.

Tremont B. No. 15, SN182296; located 100’ South & 200’ East of NW/C of NE/4 of
NE/4, of Section 25, Township 10 North, Range 1, East, LaSalle Parish, La

Tremont B. No. 16, SN183884; located 378’ South & 749’ West of NE/C of
Section 25, Township 10 North, Range 1, East, LaSalle Parish, La.

Tremont B. No. 17, SN183885; located 210’ South & 863’ West of NE/C of
Section 25, Township 10 North, Range 1, East, LaSalle Parish, La.

 

35.           Oil, gas and mineral lease executed by Roberta Stewart Taylor, in
favor of Russell Flowers, dated October 7, 1991, recorded in Conveyance Book
190, Page 195, Registry #149263 records of LaSalle Parish, Louisiana covering
lands located in Lot 15 of the original Town of Tullos, Section 26, Township 10
North, Range 1 East, LaSalle Parish, Louisiana.

 

36.          Oil, gas and mineral lease executed by Southern Heritage Bank, in
favor of Marvin Douglas Murphrey, dated October 18, 1993, recorded in Conveyance
Book 206, Page 280, Registry #154486, records of LaSalle Parish, Louisiana,
covering Lots 2, 3 and 4 of Block 6 of the Russell addition to Tullos,
Louisiana, and a strip of land adjacent thereto located in the SE/C of
Section 26, Township 10 North, Range 1 East, LaSalle Parish, Louisiana.

 

37.          Oil, gas and mineral lease executed by Anadarko Land Corp., et al,
in favor of Chadco, Inc., dated February 1, 2003, recorded in Conveyance Book
278, Page 318, Registry #187644, records of LaSalle Parish, Louisiana, covering
the following described property, to-wit:

 

Township 10 North, Range 1 East, Section 26:

 

Lots 8, 10 and 12 of Block 17, Town of Tullos, LaSalle Parish, Louisiana. Lots
2, 6, 8 and 10 of Block 20, Town of Tullos, LaSalle Parish, Louisiana.

 

38.          Oil, gas and mineral lease executed by Lane Capps, et al, in favor
of Chadco, Inc., dated May 28, 2004, recorded in Oil and Gas Lease Book 289,
Page 496, Registry #193577, records of LaSalle Parish, Louisiana, covering the
following described property, to-wit: One (1) acre, more or less, located in the
original Town of Tullos, situated in Section 25, Township 10 North, Range 1
East, LaSalle Parish, Louisiana.

 

12

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39.          Oil, gas and mineral lease executed by Tremont Lumber Company, in
favor of Arthur W. Sour, Jr., dated May 31, 1966, recorded in Oil and Gas Lease
Book 28, Page 553, Registry #75957, records of LaSalle Parish, Louisiana,
covering lands in Section 26, Township 10 North, Range 1 East, LaSalle Parish,
Louisiana,

 

INSOFAR AND ONLY INSOFAR as the said lease covers the following described
property, to-wit:

 

Moore & Munger Hydrocarbons, Inc., S.T. Holland #1 and S.T. Holland #2, Lot 10,
Block 6, Tremont Addition to Tullos, LA., as located in the SE/4 of the NW/4 of
Section 25, Town 10 North, Range 1 East, LaSalle Parish, Louisiana.

 

40.           Oil, gas and mineral lease executed by Richard L. Walsh, et ux, in
favor of Walter W. Heard, Jr., dated September 8, 1958, recorded in Oil and Gas
Lease Book 20, Page 216, Registry #59119, records of LaSalle Parish, Louisiana,
covering three (3) lots located in the original Town of Tullos, Louisiana,
located in the SW/4 of the NE/4 of Section 26 Township 10 North, Range 1 East,
LaSalle Parish, Louisiana.

 

41.           Oil, gas and mineral lease executed by Johnny C. Maxwell, Jr., in
favor of Len White, dated June 24, 1992, recorded in Conveyance Book 194,
Page 155, Registry 150724, records of LaSalle Parish, Louisiana, covering Lots
1, 2 and 3 of the Urania Lumber Company Addition to the Town of Tullos, LaSalle
Parish, Louisiana

 

42.           Oil, gas and mineral lease executed by Thelma W. Allbritton, et
al, in favor of Chadco, Inc., dated June 23, 1993, recorded in Conveyance Book
204, Page 151, Registry #153940, records of LaSalle Parish, Louisiana; and

 

Oil, gas and mineral lease executed by Gerald J. Wright in favor of
Chadco, Inc., dated June 29, 1993, recorded in Conveyance Book 204, Page 156,
Registry #153941, records of LaSalle Parish, Louisiana; and

 

Oil, gas and mineral lease executed by Herman.Wright, in favor of Chadco. Inc.,
dated July 20, 1993, recorded in Conveyance Book 204, Page 160, Registry
4153942, records of LaSalle Parish, Louisiana;

 

Said leases covering three (3) lots located in the Town of Tullos, in the SE/4
of the SE/4 of Section 26, Township 10 North, Range 1 East.

 

43.           Oil, gas and mineral lease executed by Lacey Leon Tullos, in favor
of Milton Galoob, dated September 10, 1979, recorded in Oil and Gas Lease Book
44, Page 401, Registry #109233, records of LaSalle Parish, Louisiana, covering
lands in Section 26, Township 10 North, Range 1 East.

 

44.           Oil, gas and mineral lease executed by Tensas Basin Levee
District, in favor of Alfred S. Black, Trustee, dated June 14, 1955, recorded in
Oil and Gas Lease Book 17, Page 574, Registry #53780, records of LaSalle Parish,
Louisiana, covering Lot 2 or Tract. NW1/4 of NE/4 of

 

13

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Section 26, Township 10 North, Range 1 East, containing 28.54 acres, more or
less, situated in LaSalle Parish, Louisiana.

 

45.           Oil, gas and mineral lease executed by Thomas Clarence Long, in
favor of M.E. McGaugh, dated June 17, 1958, recorded in Oil and Gas Lease Book
20, Page 23, Registry #58398, records of LaSalle Parish, Louisiana, and
Correction to Description, executed by Thomas Clarence Long, in favor of M.E.
McGaugh, dated March 11, 1959, recorded in Oil and Gas Lease Book 20, Page 480;
Registry #60095, covering lands in the original Town of Tullos, located in
Section 26, Township 10 North, Range 1 East.

 

46.           Oil, gas and mineral lease executed by Missouri Pacific Railroad
Company, in favor of Warren B. Melton, dated December 20, 1960, recorded in Oil
and Gas Lease Book 22, Page 195, Registry #63943, records of LaSalle Parish,
Louisiana, covering Lots 2, 4, 6, 10 and 12; Block 18, Lots 2, 6, 8 and 10;
Block 20 and all of Fractional Block H, all in the Townsite of Tullos, located
in Section 26, Township 10 North, Range 1 East. LaSalle Parish, Louisiana.

 

47.           Oil, gas and mineral lease executed by Alene Atnip Holmes, in
favor of ZAD, Inc., dated May 22, 1998, recorded in Conveyance Book 244,
Page 99, Registry #169627, records of LaSalle Parish, Louisiana, covering lands
in Lots 11 and 12, Block 1, Holmes and Adams addition to Town of Tullos and Lot
A of original Town of Tullos as per plat in Conveyance Book M, Page 166, LaSalle
Parish, Louisiana, Section 25, Township 10 North, Range 1 East.

 

48.           Oil, gas and mineral lease executed by A.P. Kyle, et al, in favor
of J.L. Ferguson, dated February 23, 1926, recorded in Oil and Gas Lease Book 3,
Page 175, Registry #3407, records of LaSalle Parish, Louisiana, covering lands
in Lot Eight (8) of Block one (1) of Holmes and Adams Addition to the Town of
Tullos in LaSalle Parish, Louisiana, according to the new plat of said Town of
Tullos, in Section 25, Township 10 North, Range 1 East.

 

49.           Oil, gas and mineral lease executed by Georgia-Pacific
Corporation, in favor of Ed Alexander, dated September 13, 1972, recorded in Oil
and Gas Lease Book 36, Page 388, Registry #91252, records of LaSalle Parish,
Louisiana; and

 

Oil, gas and mineral lease executed by Q.T. Hardtner, Jr., Agent, et al, in
favor of Ed Alexander, dated October 26, 1972, recorded in Oil and Gas Lease
Book 36, Page 392, Registry #91253, records of LaSalle Parish, Louisiana,

 

Both of the above leases covering lands all in Section 19 Township 10 North,
Range 2 East,

 

INSOFAR AND ONLY INSOFAR AS SAID LEASES COVER AND AFFECT ONE (1) ACRE IN THE
FORM OF A SQUARE AROUND THE FOLLOWING WELLS, TO-WIT:

 

LTF-Urania No. 6, SN 193625; located 1606’ S & 495’ E from NW/C of NE/4 of
Section 19, T10N, R2E.

 

14

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50.           Oil, gas and mineral lease executed by Harry R. Brinkley, et al,
in favor of C.A. McCartney, dated September 15, 1980, recorded in Oil and Gas
Lease Book 96, Page 236, Registry #115261, records of Winn Parish, Louisiana;
and

 

Oil, gas and mineral lease executed by Harry R. Brinkley, et al, in favor of
C.A. McCartney, dated April 20, 1981, recorded in Oil and Gas Lease Book 97,
Page 20, Registry #115676, records of Winn Parish, Louisiana; and Oil, gas and
mineral lease executed by Harry R. Brinkley, et al, in favor of Chadco, Inc.,
dated January 15, 1990, recorded in Oil and Gas Lease Book 127, Page 90,
Registry #145329, records of Winn Parish, Louisiana;

 

All of the above leases covering lands located in the NW/4 of NE/4 of
Section 30. Township 11 North, Range I West, Winn Parish, Louisiana.

 

INSOFAR AND ONLY INSOFAR AS said leases cover and affect one (1) acre in the
form of a square (with the well in the center thereof) around each of the
following 8 wells:

 

Brinkley Heirs LTF No. 1, SN186324; located 100’ N & 100’ E from SW/C of NW/4 of
NW/4 of NE/4, Section 30, T11N, R1W.

Brinkley Heirs LTF SWD No. 2, SN186325; located 300’ N & 100’ E from SW/C of
NW/4 of NW/4 of NE/4, Section 30, T11N RI W.

Brinkley Heirs LTF No. 3, SN186326; located 500’ N & 100’ E from SW/C of NW/4 of
NW/4 of NE/4, Section 30, T11N, RI W.

Brinkley Heirs LTF No. 4, SN 186327; located 375’ N & 375’ W from SE/C of NW/4
of NW/4 of NE/4, Section 30, T1 IN, RI W.

Brinkley Heirs LTF No. 5, SN186328; located 100’ N & 150’ W from SE/C of NW/4 of
NW/4 of NE/4, Section 30, T11N, R1W.

Brinkley Heirs LTF No. 6, SN186329; located 300’ N & 150’ W from SE/C of NW/4 of
NW/4 of NE/4, Section 30, T11N, R1W.

Brinkley Heirs LTF No. 7, SN187021; located 500’ N & 488’ E from SW/C of NW/4 of
NW/4 of NE/4, Section 30, TI 1N, R1W.

Brinkley Heirs LTF No. 8, SN187179; located 560’ N & 294’ E from SW/C of NW/4 of
NW/4 of NE/4, Section 30, T11N, RI W.

 

51.           Oil, gas and mineral lease executed by Mrs. Bonnie Bartley, et ux,
in favor of W.O. Weaver, dated November 12, 1959, recorded in Oil and Gas Lease
Book 18, Page 67, Registry #6731, records of Winn Parish, Louisiana, covering
lands located in the SE/4 of SE/4 of Section 20, Township 11 North, Range 1
West, Winn Parish, Louisiana.

 

52.           Oil, gas and mineral lease executed by Judge Jones, in favor of
W.O. Weaver, dated June 30, 1959, recorded in Oil and Gas Lease Book 17,
Page 299, Registry #6582, records of Winn Parish, Louisiana, covering the NE/4
of SE/4 of Section 20, Township 11 North, Range 1 West, Winn Parish, Louisiana.

 

53.           Oil, gas and mineral lease executed by Jewel Taylor, et al, in
favor of Frontier, Inc., dated September 20, 1990, recorded in Oil and Gas Lease
Book 128, Page 498, Registry #147837, records of Winn Parish, Louisiana,
covering all that portion of the N 1/3 of NE/4 of SE/4 of Section 20, T1N, R1W,
Winn Parish, Louisiana.

 

15

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

 

Lease acquired by NGS SUB Corporation

 

54.           Oil and Gas Lease dated December 2, 2005 from the LP Mineral
Owners to NGS SSUB. Corporation, as recorded in Conveyance Book 300, Page 708 of
the records of LaSalle Parish, Louisiana.

 

55.           Oil and Gas Lease dated December 5, 2005 from William D. Blake, as
Agent and Attorney-In-Fact for Henry E. Blake, et al, to NGS Sub Corporation, as
recorded in Conveyance Book 300, Page 713 of the records of LaSalle Parish,
Louisiana.

 

56.           Oil, Gas and Mineral Lease dated December 1, 2005 from Lane Capps
and Sherry Capps Cannon to NGS SUB. Corp., as recorded in Conveyance Book 300,
Page 39 of the records of LaSalle Parish, Louisiana.

 

16

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

 

Exhibit “A-2”

 

Attached to and made a part of that certain

Asset Purchase and Sale Agreement dated February 15, 2008

by and between NGS Sub. Corp., as Seller, and

MWM Energy, LLC, as Buyer

 

WELLS

 

 

 

Serial

 

LUW

 

 

 

Well

 

 

 

 

 

 

 

 

 

No.

 

Code

 

Well Name

 

No.

 

WI

 

NRI

 

Comments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ag Oil - Capps Lease

 

 

 

 

 

 

 

 

 

1

 

173393

 

037481

 

Ag Oil - Capps

 

1

 

1.000

 

0.83333

 

 

 

2

 

173394

 

037481

 

Ag Oil - Capps

 

2

 

1.000

 

0.83333

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ag-Oil MOPAC Lease

 

 

 

 

 

 

 

 

 

3

 

166837

 

037288

 

Ag-Oil MOPAC

 

1

 

1.000

 

0.75000

 

misnamed in Sonris as Bice-Mopac #1

 

4

 

171065

 

037288

 

Ag-Oil MOPAC

 

2

 

1.000

 

0.75000

 

 

 

5

 

171066

 

037288

 

Ag-Oil-MOPAC

 

3

 

1.000

 

0.75000

 

 

 

6

 

171067

 

037288

 

Ag-Oil-MOPAC

 

4

 

1.000

 

0.75000

 

 

 

7

 

171069

 

037288

 

Ag-Oil-MOPAC

 

6

 

1.000

 

0.75000

 

 

 

8

 

171070

 

037288

 

Ag-Oil-MOPAC

 

7

 

1.000

 

0.75000

 

 

 

9

 

171068

 

037288

 

Ag-Oil-MOPAC SWD

 

5

 

1.000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Atkins B Lease

 

 

 

 

 

 

 

 

 

10

 

159038

 

037633

 

Atkins B

 

1

 

1.000

 

0.81250

 

 

 

11

 

160179

 

037633

 

Atkins B

 

2

 

1.000

 

0.81250

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

B Bartley Lease

 

 

 

 

 

 

 

 

 

12

 

77088

 

010224

 

B Bartley

 

1

 

1.000

 

0.82639

 

 

 

13

 

77089

 

010224

 

B Bartley

 

2

 

1.000

 

0.82639

 

 

 

14

 

83034

 

010224

 

B Bartley

 

3

 

1.000

 

0.82639

 

 

 

15

 

89960

 

010224

 

B Bartley

 

4

 

1.000

 

0.82639

 

 

 

 

1

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

 

16

 

125107

 

010224

 

B Bartley

 

5

 

1.000

 

0.82639

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bradford Lease

 

 

 

 

 

 

 

 

 

17

 

175684

 

037857

 

Bradford

 

1

 

1.000

 

0.83000

 

 

 

18

 

182138

 

037857

 

Bradford

 

4

 

1.000

 

0.83000

 

 

 

19

 

199462

 

037857

 

Bradford

 

5

 

1.000

 

0.83000

 

 

 

20

 

990616

 

037857

 

Bradford SWD

 

3

 

1.000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Brinkley Heirs LTF Lease

 

 

 

 

 

 

 

 

 

21

 

186324

 

040080

 

Brinkley Heirs LTF

 

1

 

1.000

 

0.83000

 

 

 

22

 

186326

 

040080

 

Brinkley Heirs LTF

 

3

 

1.000

 

0.83000

 

 

 

23

 

186327

 

040080

 

Brinkley Heirs LTF

 

4

 

1.000

 

0.83000

 

 

 

24

 

186328

 

040080

 

Brinkley Heirs LTF

 

5

 

1.000

 

0.83000

 

 

 

25

 

186329

 

040080

 

Brinkley Heirs LTF

 

6

 

1.000

 

0.83000

 

 

 

26

 

187021

 

040080

 

Brinkley Heirs LTF

 

7

 

1.000

 

0.83000

 

 

 

27

 

187179

 

040080

 

Brinkley Heirs LTF

 

8

 

1.000

 

0.83000

 

 

 

28

 

186325

 

 

 

Brinkley Heirs LTF SWD

 

2

 

1.000

 

 

 

 

 

29

 

173495

 

037681

 

Brinkley Heirs N

 

1

 

1.000

 

0.83000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Flowers, Russell Lease

 

 

 

 

 

 

 

 

 

30

 

197897

 

041921

 

Flowers, Russell

 

1

 

1.000

 

0.80000

 

 

 

31

 

197898

 

041921

 

Flowers, Russell

 

2

 

1.000

 

0.80000

 

 

 

32

 

199021

 

041921

 

Flowers, Russell

 

3

 

1.000

 

0.80000

 

 

 

33

 

199022

 

041921

 

Flowers, Russell

 

4

 

1.000

 

0.80000

 

Sonris records not updated from prior transfers

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gates Lease

 

 

 

 

 

 

 

 

 

34

 

168176

 

036775

 

Gates

 

1

 

1.000

 

 

 

no lease or production

 

35

 

168341

 

 

 

Gates SWD

 

4

 

1.000

 

 

 

no lease or production

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hardtner (Atkins) A Lease

 

 

 

 

 

 

 

 

 

36

 

990145

 

007087

 

Hardtner A

 

2

 

1.000

 

0.80000

 

Sonris records not updated for transfer from Atkins

 

37

 

990146

 

007087

 

Hardtner A

 

7

 

1.000

 

0.80000

 

Sonris records not updated for transfer from Atkins

 

38

 

149552

 

007087

 

Hardtner A

 

9

 

1.000

 

0.80000

 

 

 

 

2

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

 

39

 

153621

 

007087

 

Hardtner A

 

11

 

1.000

 

0.80000

 

 

 

40

 

971237

 

007087

 

Hardtner A SWD

 

1

 

1.000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hartdner (Atkins) C Lease

 

 

 

 

 

 

 

 

 

41

 

19746

 

007089

 

Hardtner C

 

9

 

1.000

 

0.80000

 

 

 

42

 

107472

 

007089

 

Hardtner C

 

13

 

1.000

 

0.80000

 

 

 

43

 

153622

 

007089

 

Hardtner C

 

14

 

1.000

 

0.80000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hardtner (Chadco) A Lease

 

 

 

 

 

 

 

 

 

44

 

186438

 

040289

 

Hardtner A

 

1

 

1.000

 

0.828125

 

Sonris records not updated for transfer from Atkins/Phoenix

 

45

 

186514

 

7087

 

Hardtner A

 

3

 

1.000

 

0.828125

 

 

 

46

 

186515

 

7087

 

Hardtner A

 

4

 

1.000

 

0.828125

 

 

 

47

 

186516

 

7087

 

Hardtner A

 

5

 

1.000

 

0.828125

 

 

 

48

 

186517

 

7087

 

Hardtner A

 

6

 

1.000

 

0.828125

 

 

 

49

 

187871

 

7087

 

Hardtner A

 

12

 

1.000

 

0.828125

 

 

 

50

 

187872

 

7087

 

Hardtner A

 

13

 

1.000

 

0.828125

 

 

 

51

 

187873

 

040289

 

Hardtner A

 

14

 

1.000

 

0.828125

 

Sonris records not updated for transfer from Atkins/Phoenix

 

52

 

187875

 

7087

 

Hardtner A

 

16

 

1.000

 

0.828125

 

 

 

53

 

187876

 

7087

 

Hardtner A

 

17

 

1.000

 

0.828125

 

 

 

54

 

187877

 

7087

 

Hardtner A

 

18

 

1.000

 

0.828125

 

 

 

55

 

188134

 

040289

 

Hardtner A

 

20

 

1.000

 

0.828125

 

Sonris records not updated for transfer from Atkins/Phoenix

 

56

 

188202

 

7087

 

Hardtner A

 

28

 

1.000

 

0.828125

 

 

 

57

 

187940

 

7087

 

Hardtner A

 

29

 

1.000

 

0.828125

 

 

 

58

 

187874

 

7087

 

Hardtner A 15 SWD

 

15

 

1.000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Holland, ST Lease

 

 

 

 

 

 

 

 

 

59

 

186412

 

040355

 

Holland, ST

 

1

 

1.000

 

0.78711

 

 

 

60

 

187825

 

040355

 

Holland, ST

 

2

 

1.000

 

0.78711

 

 

 

61

 

971390

 

 

 

SSM SWD

 

1

 

1.000

 

 

 

 

 

 

3

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

 

 

 

 

 

 

 

Holmes, WL Lease

 

 

 

 

 

 

 

 

 

62

 

154696

 

034641

 

Holmes, WL

 

1

 

1.000

 

0.75000

 

 

 

63

 

154738

 

034641

 

Holmes, WL

 

2

 

1.000

 

0.75000

 

 

 

64

 

154737

 

034641

 

Holmes, WL

 

3

 

1.000

 

0.75000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

J Jones Lease

 

 

 

 

 

 

 

 

 

65

 

77712

 

010223

 

J Jones

 

1

 

1.000

 

0.82639

 

 

 

66

 

77885

 

010223

 

J Jones

 

2

 

1.000

 

0.82639

 

 

 

67

 

80893

 

010223

 

J Jones

 

3

 

1.000

 

0.82639

 

 

 

68

 

80331

 

010223

 

J Jones

 

4

 

1.000

 

0.82639

 

 

 

69

 

82292

 

010223

 

J Jones

 

5

 

1.000

 

0.82639

 

 

 

70

 

82778

 

010223

 

J Jones

 

6

 

1.000

 

0.82639

 

 

 

71

 

83229

 

010223

 

J Jones

 

8

 

1.000

 

0.82639

 

 

 

72

 

204917

 

010223

 

J Jones

 

11

 

1.000

 

0.82639

 

 

 

73

 

972679

 

010223

 

J Jones SWD

 

12

 

1.000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

J Jones A Lease

 

 

 

 

 

 

 

 

 

74

 

212912

 

046565

 

J Jones A

 

2

 

1.000

 

0.83000

 

 

 

75

 

212913

 

046565

 

J Jones A

 

3

 

1.000

 

0.83000

 

 

 

76

 

83979

 

046565

 

J Jones A

 

4

 

1.000

 

0.83000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Kyle-Davis Lease

 

 

 

 

 

 

 

 

 

77

 

9400

 

007688

 

Kyle-Davis

 

1

 

1.000

 

0.83000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

La Pacific O Lease

 

 

 

 

 

 

 

 

 

78

 

154412

 

039847

 

LA PACIFIC O

 

2

 

1.000

 

0.80000

 

 

 

79

 

156342

 

039847

 

LA PACIFIC O

 

5

 

1.000

 

0.80000

 

 

 

80

 

155943

 

039847

 

LA PACIFIC O

 

2D

 

1.000

 

0.80000

 

 

 

81

 

156839

 

039847

 

LA PACIFIC O SWD

 

6

 

1.000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

La Pacific Lease

 

 

 

 

 

 

 

 

 

82

 

150510

 

034425

 

La Pacific

 

1

 

1.000

 

0.80000

 

 

 

83

 

150771

 

034425

 

La Pacific

 

3

 

1.000

 

0.80000

 

 

 

84

 

154606

 

034425

 

La Pacific

 

4

 

1.000

 

0.80000

 

 

 

85

 

154605

 

034425

 

La Pacific SWD

 

5

 

1.000

 

 

 

 

 

 

4

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

 

86

 

009597

 

009751

 

Urania Voltz

 

1

 

1.000

 

0.80000

 

 

 

87

 

059103

 

009751

 

Urania Voltz

 

2

 

1.000

 

0.80000

 

 

 

88

 

148110

 

009751

 

Urania Voltz

 

3

 

1.000

 

0.80000

 

 

 

89

 

175370

 

009751

 

Urania Voltz

 

4

 

1.000

 

0.80000

 

 

 

90

 

175371

 

009751

 

Urania Voltz

 

5

 

1.000

 

0.80000

 

 

 

91

 

096703

 

009751

 

Urania Voltz

 

6

 

1.000

 

0.80000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

La Salle St Bank Lease

 

 

 

 

 

 

 

 

 

92

 

190522

 

040711

 

LASALLE ST BANK

 

3

 

1.000

 

0.80000

 

 

 

93

 

190558

 

040711

 

LASALLE ST BANK

 

4

 

1.000

 

0.80000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loe, Glen D Lease

 

 

 

 

 

 

 

 

 

94

 

196405

 

041637

 

Loe, Glen D

 

1

 

1.000

 

 

 

no lease or production

 

95

 

196406

 

041637

 

Loe, Glen D

 

2

 

1.000

 

 

 

no lease or production

 

96

 

197043

 

041637

 

Loe, Glen D

 

3

 

1.000

 

 

 

no lease or production

 

97

 

197330

 

041637

 

Loe, Glen D

 

4

 

1.000

 

 

 

no lease or production

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long, CO Lease

 

 

 

 

 

 

 

 

 

98

 

146924

 

033544

 

Long , CO

 

1

 

1.000

 

0.80000

 

 

 

99

 

153135

 

033544

 

Long , CO

 

2

 

1.000

 

0.80000

 

 

 

100

 

153170

 

033544

 

Long , CO

 

3

 

1.000

 

0.80000

 

 

 

101

 

153171

 

033544

 

Long , CO

 

4

 

1.000

 

0.80000

 

 

 

102

 

153346

 

033544

 

Long , CO

 

5

 

1.000

 

0.80000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long, Mary Lease

 

 

 

 

 

 

 

 

 

103

 

146886

 

033540

 

Long, Mary

 

1

 

1.000

 

 

 

no lease or production

 

104

 

153134

 

033540

 

Long, Mary

 

2

 

1.000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long, TC Lease

 

 

 

 

 

 

 

 

 

105

 

71148

 

007906

 

Long, TC

 

1

 

1.000

 

0.75000

 

 

 

106

 

165436

 

No LUW

 

Long, TC

 

3

 

1.000

 

0.75000

 

 

 

 

 

http://sonlite.
dnr.state.la.us
/sundown/cart
_prod/cart_co
n_wellinfo2?
p_wsn=17248
0%20

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5

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

 

107

 

163343

 

 

 

Maxwell SWD

 

1

 

1.000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Meredith C, SK Lease

 

 

 

 

 

 

 

 

 

108

 

183009

 

039273

 

Meredith C, SK

 

1

 

1.000

 

0.80000

 

 

 

109

 

183012

 

039273

 

Meredith C, SK

 

4

 

1.000

 

0.80000

 

 

 

110

 

183013

 

039273

 

Meredith C, SK

 

5

 

1.000

 

0.80000

 

 

 

111

 

154273

 

034685

 

Meredith, Cecil

 

2

 

1.000

 

0.80000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MILES HEIRS Lease

 

 

 

 

 

 

 

 

 

112

 

191214

 

040915

 

MILES HEIRS

 

1

 

1.000

 

0.80000

 

 

 

113

 

191251

 

040915

 

MILES HEIRS

 

4

 

1.000

 

0.80000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MILES - AG OIL EJ Lease

 

 

 

 

 

 

 

 

 

114

 

172482

 

037360

 

MILES-AG OIL-EJ

 

3

 

1.000

 

0.80000

 

 

 

115

 

172483

 

037360

 

MILES-AG OIL-EJ

 

4

 

1.000

 

0.80000

 

 

 

116

 

172480

 

037360

 

MILES-AG OILEJ SWD

 

1

 

1.000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

http://sonlite.
dnr.state.la.us
/sundown/car
t_prod/cart_c
on_wellinfo2
?p_wsn=172
480%20

 

 

 

Miles Essex Lease

 

 

 

 

 

 

 

 

 

117

 

190736

 

040778

 

MILES-ESSEX

 

3

 

1.000

 

0.80000

 

 

 

118

 

190783

 

040778

 

MILES-ESSEX

 

4

 

1.000

 

0.80000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MDP Maxwell Lease

 

 

 

 

 

 

 

 

 

119

 

179671

 

038553

 

MDP MAXWELL

 

1

 

1.000

 

0.80000

 

 

 

120

 

179672

 

038553

 

MDP MAXWELL

 

2

 

1.000

 

0.80000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MOP Lease

 

 

 

 

 

 

 

 

 

121

 

91994

 

016494

 

Missouri Pacific RR

 

2

 

1.000

 

0.75000

 

 

 

122

 

83963

 

012886

 

MOP #1 SWD

 

1

 

1.000

 

 

 

 

 

 

6

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

 

123

 

183703

 

039526

 

MOPAC SSS

 

8

 

1.000

 

0.80000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Morrison, James Lease

 

 

 

 

 

 

 

 

 

124

 

176677

 

038190

 

Morrison, James

 

1

 

1.000

 

0.83000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Maxwell, JC M80 Lease

 

 

 

 

 

 

 

 

 

125

 

170664

 

037215

 

Maxwell, JC M80

 

1

 

1.000

 

0.80000

 

 

 

126

 

171769

 

037215

 

Maxwell, JC M80

 

2

 

1.000

 

0.80000

 

 

 

127

 

171770

 

037215

 

Maxwell, JC M80

 

3

 

1.000

 

0.80000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pendarvis Lease

 

 

 

 

 

 

 

 

 

128

 

193250

 

041573

 

PENDARVIS

 

1

 

1.000

 

0.7657824

 

 

 

129

 

193251

 

041573

 

PENDARVIS

 

2

 

1.000

 

0.7657824

 

 

 

130

 

193252

 

041573

 

PENDARVIS

 

3

 

1.000

 

0.7657824

 

 

 

131

 

193253

 

041573

 

PENDARVIS

 

4

 

1.000

 

0.7657824

 

 

 

132

 

193255

 

041573

 

PENDARVIS

 

6

 

1.000

 

0.7657824

 

 

 

133

 

194757

 

041573

 

PENDARVIS

 

7

 

1.000

 

0.7657824

 

 

 

134

 

194759

 

041573

 

PENDARVIS

 

9

 

1.000

 

0.7657824

 

 

 

135

 

194760

 

041573

 

PENDARVIS

 

10

 

1.000

 

0.7657824

 

 

 

136

 

194761

 

041573

 

PENDARVIS

 

11

 

1.000

 

0.7657824

 

 

 

137

 

194762

 

041573

 

PENDARVIS

 

12

 

1.000

 

0.7657824

 

 

 

138

 

194763

 

041573

 

PENDARVIS

 

13

 

1.000

 

0.7657824

 

 

 

139

 

194764

 

041573

 

PENDARVIS

 

14

 

1.000

 

0.7657824

 

 

 

140

 

10281

 

008680

 

PENDARVIS A

 

3

 

1.000

 

0.7657824

 

 

 

141

 

10331

 

008680

 

PENDARVIS A

 

4

 

1.000

 

0.7657824

 

 

 

142

 

971428

 

 

 

PENDARVIS A SWD

 

1

 

1.000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pendarvis LaPetro Lease

 

 

 

 

 

 

 

 

 

143

 

193828

 

041572

 

Pendarvis - La Petro

 

1

 

1.000

 

0.7657824

 

 

 

144

 

193829

 

041572

 

Pendarvis - La Petro

 

2

 

1.000

 

0.7657824

 

 

 

145

 

193830

 

041572

 

Pendarvis - La Petro

 

3

 

1.000

 

0.7657824

 

 

 

146

 

193831

 

041572

 

Pendarvis - La Petro

 

4

 

1.000

 

0.7657824

 

 

 

147

 

193832

 

041572

 

Pendarvis - La Petro

 

5

 

1.000

 

0.7657824

 

 

 

148

 

193833

 

041572

 

Pendarvis - La Petro

 

6

 

1.000

 

0.7657824

 

 

 

149

 

193834

 

041572

 

Pendarvis - La Petro

 

7

 

1.000

 

0.7657824

 

 

 

150

 

193835

 

041572

 

Pendarvis - La Petro

 

8

 

1.000

 

0.7657824

 

 

 

 

7

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

 

151

 

193837

 

041572

 

Pendarvis - La Petro

 

10

 

1.000

 

0.7657824

 

 

 

152

 

193838

 

041572

 

Pendarvis - La Petro

 

11

 

1.000

 

0.7657824

 

 

 

153

 

194758

 

041572

 

Pendarvis - La Petro

 

12 SWD

 

1.000

 

 

 

 

 

 

 

http://sonlite.
dnr.state.la.u
s/sundown/ca
rt_prod/cart_
con_wellinfo
2?p_wsn=97
1428%20

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pringle Heirs Lease

 

 

 

 

 

 

 

 

 

154

 

158868

 

035563

 

Pringle Heirs

 

1

 

1.000

 

0.81250

 

 

 

155

 

162747

 

035563

 

Pringle Heirs SWD

 

2

 

1.000

 

 

 

 

 

156

 

19432

 

035563

 

Pringle SWD

 

3

 

1.000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PV 80 MILES TB

 

 

 

 

 

 

 

 

 

157

 

172920

 

037330

 

PV 80 - MILES

 

1

 

1.000

 

0.80000

 

 

 

158

 

172922

 

037330

 

PV 80 - MILES

 

3

 

1.000

 

0.80000

 

 

 

159

 

172923

 

037330

 

PV 80 - MILES

 

4

 

1.000

 

0.80000

 

 

 

160

 

172924

 

037330

 

PV 80 - MILES

 

5

 

1.000

 

0.80000

 

 

 

161

 

172925

 

037330

 

PV 80 - MILES

 

6

 

1.000

 

0.80000

 

 

 

162

 

172926

 

037330

 

PV 80 - MILES

 

7

 

1.000

 

0.80000

 

 

 

163

 

174930

 

037330

 

PV 80 - MILES

 

9

 

1.000

 

0.80000

 

 

 

164

 

182489

 

039369

 

JRB MAXWELL

 

2

 

1.000

 

0.80000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PV 80 - MOPAC Lease

 

 

 

 

 

 

 

 

 

165

 

172927

 

037539

 

PV 80 - MOPAC

 

2

 

1.000

 

0.75000

 

 

 

166

 

172928

 

037539

 

PV 80 - MOPAC

 

3

 

1.000

 

0.75000

 

 

 

167

 

172929

 

037539

 

PV 80 - MOPAC

 

4

 

1.000

 

0.75000

 

 

 

168

 

172930

 

037539

 

PV 80 - MOPAC

 

5

 

1.000

 

0.75000

 

 

 

169

 

174030

 

037539

 

PV 80 - MOPAC

 

7

 

1.000

 

0.75000

 

 

 

170

 

174029

 

037539

 

PV 80 - MOPAC

 

8

 

1.000

 

0.75000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tensas BLD Lease

 

 

 

 

 

 

 

 

 

171

 

134605

 

031228

 

Tensas BLD

 

1

 

1.000

 

0.75000

 

 

 

172

 

178732

 

031228

 

Tensas BLD

 

3

 

1.000

 

0.75000

 

 

 

 

8

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

 

173

 

183525

 

031228

 

Tensas BLD

 

4

 

1.000

 

0.75000

 

 

 

174

 

178731

 

031228

 

Tensas BLD

 

5

 

1.000

 

0.75000

 

 

 

175

 

990623

 

031228

 

Tensas BLD SWD

 

2

 

1.000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tensas BLD A Lease

 

 

 

 

 

 

 

 

 

176

 

59321

 

009515

 

Tensas BLD A

 

1

 

1.000

 

0.80000

 

 

 

177

 

64687

 

009515

 

Tensas BLD A

 

2

 

1.000

 

0.80000

 

 

 

178

 

153875

 

009515

 

Tensas BLD A

 

5

 

1.000

 

0.80000

 

 

 

179

 

153876

 

009515

 

Tensas BLD A

 

6

 

1.000

 

0.80000

 

 

 

180

 

182387

 

009515

 

Tensas BLD A

 

7

 

1.000

 

0.80000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tremont B Lease

 

 

 

 

 

 

 

 

 

181

 

187623

 

043930

 

Tremont B

 

1

 

1.000

 

0.78711

 

 

 

182

 

187822

 

043930

 

Tremont B

 

3

 

1.000

 

0.78711

 

 

 

183

 

187824

 

043930

 

Tremont B

 

4

 

1.000

 

0.78711

 

 

 

184

 

188181

 

043930

 

Tremont B

 

5

 

1.000

 

0.78711

 

 

 

185

 

189535

 

043930

 

Tremont B

 

6

 

1.000

 

0.78711

 

 

 

186

 

189696

 

043930

 

Tremont B

 

7

 

1.000

 

0.78711

 

 

 

187

 

191207

 

043930

 

Tremont B

 

9

 

1.000

 

0.78711

 

 

 

188

 

178262

 

043930

 

Tremont B

 

10

 

1.000

 

0.78711

 

 

 

189

 

182059

 

043930

 

Tremont B

 

11

 

1.000

 

0.78711

 

 

 

190

 

182291

 

043930

 

Tremont B

 

12

 

1.000

 

0.78711

 

 

 

191

 

182292

 

043930

 

Tremont B

 

13

 

1.000

 

0.78711

 

 

 

192

 

182295

 

043930

 

Tremont B

 

14

 

1.000

 

0.78711

 

 

 

193

 

182296

 

043930

 

Tremont B

 

15

 

1.000

 

0.78711

 

 

 

194

 

183884

 

043930

 

Tremont B

 

16

 

1.000

 

0.78711

 

 

 

195

 

187820

 

043930

 

Tremont B SWD

 

1

 

1.000

 

 

 

 

 

196

 

191205

 

 

 

Tremont B

 

8

 

1.000

 

0.78711

 

P&A but remains on SONRIS

 

197

 

183885

 

 

 

Tremont B

 

17

 

1.000

 

0.78711

 

P&A but remains on SONRIS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tremont SSS Lease

 

 

 

 

 

 

 

 

 

198

 

182799

 

039161

 

Tremont SSS

 

1

 

1.000

 

0.80000

 

 

 

199

 

182800

 

039161

 

Tremont SSS

 

2

 

1.000

 

0.80000

 

 

 

 

9

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

 

200

 

182801

 

039161

 

Tremont SSS

 

3

 

1.000

 

0.80000

 

 

 

201

 

182802

 

039161

 

Tremont SSS

 

4

 

1.000

 

0.80000

 

 

 

202

 

182803

 

039161

 

Tremont SSS

 

5

 

1.000

 

0.80000

 

 

 

203

 

182804

 

039161

 

Tremont SSS

 

6

 

1.000

 

0.80000

 

 

 

204

 

182805

 

039161

 

Tremont SSS

 

7

 

1.000

 

0.80000

 

 

 

205

 

184928

 

039161

 

Tremont SSS

 

8

 

1.000

 

0.80000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

206

 

990137

 

009660

 

Tullos, Frank

 

1

 

1.000

 

 

 

no lease or production

 

207

 

203730

 

009660

 

Tullos, Frank

 

2

 

1.000

 

 

 

no lease or production

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Urania A Lease

 

 

 

 

 

 

 

 

 

208

 

214541

 

047519

 

URANIA

 

1

 

1.000

 

0.75000

 

 

 

209

 

214542

 

047519

 

URANIA

 

2

 

1.000

 

0.75000

 

 

 

210

 

127062

 

040908

 

URANIA LBR CO A

 

1

 

1.000

 

0.75000

 

 

 

211

 

127414

 

040908

 

URANIA LBR CO A

 

2

 

1.000

 

0.75000

 

Sonris records not updated for transfer from Atkins

 

212

 

127415

 

040908

 

URANIA LBR CO A

 

5

 

1.000

 

0.75000

 

 

 

213

 

126926

 

040908

 

URANIA LBR CO A

 

6

 

1.000

 

0.75000

 

 

 

214

 

127417

 

040908

 

URANIA LBR CO A

 

7

 

1.000

 

0.75000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

http://sonlite.
dnr.state.la.u
s/sundown/ca
rt_prod/cart_
con_wellinfo
2?p_wsn=97
1269%20

 

 

 

Urania B Lease

 

 

 

 

 

 

 

 

 

215

 

127264

 

040909

 

URANIA LBR CO B

 

1

 

1.000

 

0.75000

 

 

 

216

 

127418

 

040909

 

URANIA LBR CO B

 

3

 

1.000

 

0.75000

 

Sonris records not updated for transfer from Atkins

 

217

 

214543

 

047519

 

URANIA

 

3

 

1.000

 

0.75000

 

 

 

 

10

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

 

 

 

 

 

 

 

Urania C TB

 

 

 

 

 

 

 

 

 

218

 

127389

 

040910

 

URANIA LBR CO C

 

1

 

1.000

 

0.75000

 

Sonris records not updated for transfer from Atkins

 

219

 

128428

 

040910

 

URANIA LBR CO C

 

3

 

1.000

 

0.75000

 

 

 

220

 

128427

 

040910

 

URANIA LBR CO C

 

6

 

1.000

 

0.75000

 

 

 

221

 

121694

 

040910

 

URANIA LBR CO C

 

7

 

1.000

 

0.75000

 

 

 

222

 

125446

 

040910

 

URANIA LBR CO C

 

8

 

1.000

 

0.75000

 

 

 

223

 

134419

 

029323

 

HARDTNER-EDENBORN

 

1

 

1.000

 

0.75000

 

 

 

224

 

128374

 

040909

 

URANIA LBR CO B

 

4

 

1.000

 

0.75000

 

 

 

225

 

128336

 

040909

 

URANIA LBR CO B SWD

 

2

 

1.000

 

 

 

 

 

226

 

971269

 

 

 

URANIA LBR CO E SWD

 

1

 

1.000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Urania LTF Lease

 

 

 

 

 

 

 

 

 

227

 

187028

 

040144

 

Urania, LTF

 

1

 

1.000

 

0.75000

 

 

 

228

 

193625

 

040144

 

Urania, LTF

 

6

 

1.000

 

0.75000

 

 

 

 

 

http://sonlite.
dnr.state.la.u
s/sundown/ca
rt_prod/cart_
con_wellinfo
2?p_wsn=97
1269%20

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Urania Shemen  TB

 

 

 

 

 

 

 

 

 

229

 

191712

 

041167

 

URANIA-SHEMEN

 

1

 

1.000

 

0.75000

 

 

 

230

 

191713

 

041167

 

URANIA-SHEMEN

 

2

 

1.000

 

0.75000

 

 

 

231

 

191714

 

041167

 

URANIA-SHEMEN

 

3

 

1.000

 

0.75000

 

 

 

232

 

115191

 

040839

 

URANIA LBRCO D

 

1

 

1.000

 

0.75000

 

 

 

233

 

115192

 

040839

 

URANIA LBRCO D

 

2

 

1.000

 

0.75000

 

 

 

234

 

115468

 

040839

 

URANIA LBRCO D

 

3

 

1.000

 

0.75000

 

 

 

235

 

191709

 

041134

 

URANIA A-SHEMEN

 

1

 

1.000

 

0.75000

 

 

 

236

 

191784

 

041134

 

URANIA A-SHEMEN

 

2

 

1.000

 

0.75000

 

 

 

237

 

191783

 

041135

 

URANIA C-SHEMEN

 

1

 

1.000

 

0.75000

 

 

 

238

 

191779

 

041135

 

URANIA C-SHEMEN

 

2

 

1.000

 

0.75000

 

 

 

239

 

114278

 

040908

 

URANIA LBR CO A

 

3

 

1.000

 

0.75000

 

 

 

240

 

114442

 

040908

 

URANIA LBR CO A

 

4

 

1.000

 

0.75000

 

 

 

241

 

114534

 

040908

 

URANIA LBR CO A

 

8

 

1.000

 

0.75000

 

 

 

242

 

115773

 

040910

 

URANIA LBR CO C

 

2

 

1.000

 

0.75000

 

 

 

 

11

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

 

243

 

116282

 

040910

 

URANIA LBR CO C

 

4

 

1.000

 

0.75000

 

 

 

244

 

115986

 

040910

 

URANIA LBR CO C

 

5

 

1.000

 

0.75000

 

 

 

245

 

971328

 

 

 

URANIA LBR CO SWD

 

1

 

1.000

 

 

 

 

 

246

 

191788

 

041134

 

URANIA A-SHEMEN SWD

 

6

 

1.000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Urania Stenco Lease

 

 

 

 

 

 

 

 

 

247

 

126642

 

026661

 

URANIA-STENCO

 

2

 

1.000

 

0.80000

 

 

 

248

 

33328

 

026661

 

URANIA-STENCO

 

3

 

1.000

 

0.80000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Walsh Lease

 

 

 

 

 

 

 

 

 

249

 

72539

 

009846

 

Walsh

 

1

 

1.000

 

0.83000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

White , Mike Lease

 

 

 

 

 

 

 

 

 

250

 

189448

 

040597

 

White, Mike

 

1

 

1.000

 

0.78711

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wright , WE Lease

 

 

 

 

 

 

 

 

 

251

 

175340

 

037484

 

Wright, WE

 

1

 

1.000

 

0.83000

 

 

 

252

 

173245

 

037484

 

Wright, WE

 

2

 

1.000

 

0.83000

 

 

 

253

 

174438

 

037484

 

Wright, WE

 

3

 

1.000

 

0.83000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Zimmerman Lease

 

 

 

 

 

 

 

 

 

254

 

990136

 

010118

 

Zimmerman

 

6

 

1.000

 

0.80000

 

 

 

255

 

43888

 

010118

 

Zimmerman

 

14

 

1.000

 

0.80000

 

 

 

256

 

53293

 

010118

 

Zimmerman

 

16

 

1.000

 

0.80000

 

 

 

257

 

58021

 

010118

 

Zimmerman

 

17

 

1.000

 

0.80000

 

 

 

258

 

62964

 

010118

 

Zimmerman

 

18

 

1.000

 

0.80000

 

 

 

259

 

66344

 

010118

 

Zimmerman

 

19

 

1.000

 

0.80000

 

 

 

260

 

68370

 

010118

 

Zimmerman

 

20

 

1.000

 

0.80000

 

 

 

261

 

77368

 

010118

 

Zimmerman

 

22

 

1.000

 

0.80000

 

 

 

262

 

86436

 

010118

 

Zimmerman

 

23

 

1.000

 

0.80000

 

 

 

263

 

40901

 

010118

 

Zimmerman

 

A-4

 

1.000

 

0.80000

 

 

 

 

12

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

 

 

 

http://sonlite.
dnr.state.la.u
s/sundown/ca
rt_prod/cart_
con_wellinfo
2?p_wsn=99
0136%20

 

 

 

Zimmerman , Lex Lease

 

 

 

 

 

 

 

 

 

264

 

187003

 

040143

 

ZIMMERMAN, Lex

 

1

 

1.000

 

0.80000

 

 

 

265

 

187004

 

040143

 

ZIMMERMAN, Lex

 

2

 

1.000

 

0.80000

 

 

 

266

 

187007

 

040143

 

ZIMMERMAN, Lex

 

4

 

1.000

 

0.80000

 

 

 

267

 

187008

 

040143

 

ZIMMERMAN, Lex

 

5

 

1.000

 

0.80000

 

 

 

268

 

187010

 

040143

 

ZIMMERMAN, Lex

 

7

 

1.000

 

0.80000

 

 

 

269

 

187011

 

040143

 

ZIMMERMAN, Lex

 

8

 

1.000

 

0.80000

 

 

 

270

 

187012

 

040143

 

ZIMMERMAN, Lex

 

9

 

1.000

 

0.80000

 

 

 

271

 

187236

 

040143

 

ZIMMERMAN, Lex

 

14

 

1.000

 

0.80000

 

 

 

272

 

187237

 

040143

 

ZIMMERMAN, Lex

 

15

 

1.000

 

0.80000

 

 

 

273

 

187238

 

040143

 

ZIMMERMAN, Lex

 

16

 

1.000

 

0.80000

 

 

 

274

 

187239

 

040143

 

ZIMMERMAN, Lex

 

17

 

1.000

 

0.80000

 

 

 

275

 

187240

 

040143

 

ZIMMERMAN, Lex

 

18

 

1.000

 

0.80000

 

 

 

276

 

236125

 

40143

 

Zimmerman, Lex

 

19

 

1.000

 

0.80000

 

 

 

277

 

187009

 

040143

 

ZIMMERMAN, Lex  SWD

 

6

 

1.000

 

 

 

 

 

278

 

973077

 

040143

 

ZIMMERMAN, Lex SWD

 

12

 

1.000

 

 

 

 

 

 

13

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

 

Exhibit “A-3”

 

Attached to and made a part of that certain

Asset Purchase and Sale Agreement dated February 15, 2008

by and between NGS Sub. Corp., as Seller, and

MWM Energy, LLC, as Buyer.

 

CONTRACTS AND OTHER AGREEMENTS

 

1.               Pumping Service Contract by and between NGS Sub Corp. and Carl
Bruce

 

2.               Pumping Service Contract by and between NGS Sub Corp. and
Sumrall Pumper Service

 

3.               Pumping Service Contract by and between NGS Sub Corp. and James
W. Sumrall II

 

4.               Pumping Service Contract by and between NGS Sub Corp. and Lance
Coleman

 

5.               Salt Water Disposal Contract by and between NGS Sub Corp. and
Page Development, LLC for use of the Hardtner A SWD #2

 

6.               Verbal agreement for salt water disposal by Donnie Morrow into
Bradford SWD

 

7.               Verbal agreement for salt water disposal by Quentin Sagdahl
into Bradford SWD

 

8.               Verbal agreement for salt water disposal by AJ  & J Thornton
into Urania SWD

 

1

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

 

Exhibit “A-4”

 

Attached to and made a part of that certain

Asset Purchase and Sale Agreement dated February 15, 2008

by and between NGS Sub. Corp., as Seller, and

MWM Energy, LLC, as Buyer

 

Right-of-Ways, Easements and Surface Leases

 

NONE

 

1

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

 

Exhibit “A-5”

 

Attached to and made a part of that certain

Asset Purchase and Sale Agreement dated February 15, 2008

by and between NGS Sub. Corp., as Seller, and

MWM Energy, LLC, as Buyer

 

SURFACE ESTATES

 

FEE LAND

 

TRACT I:

 

Lots 1, 3, 5, Block 16, Lots 1, 3, 9, 11, Block 21, and Lots 1, 3, 5, 7, 9, 11,
Block 23 of the Original Town of Tullos, Section 26, Township 10 North, Range 1
East, LaSalle Parish, Louisiana

 

TRACT II:

 

A certain parcel of land thirty (30) feet square, situated in the Southwest
corner of property described hereinbelow, with well described below situated
thereon.

 

Monroe Well Service/SSM – SWD #1, serial #971390, Section 25, Township 10 North,
Range 2 East, Tullos-Urania Field, LaSalle Parish, Louisiana.

 

Tracts I and II, being the same land described in that certain Act of Sale and
Assignment dated September 2, 2004 from Atkins Production, Inc. to NGS Sub.
Corp., as recorded in Book 291, Page 179 of the Conveyance Books of LaSalle
Parish, Louisiana.

 

1

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

 

Exhibit “B”

 

Attached to and made a part of that certain

Asset Purchase and Sale Agreement dated February 15, 2008

by and between NGS Sub. Corp., as Seller, and

MWM Energy, LLC, as Buyer

 

ESCROW ACCOUNT AGREEMENT

 

This Escrow Agreement (“Escrow Agreement”) is entered into as of the 15th day
of  February, 2008 by and among NGS Sub. Corp. (‘Seller”), MWM Energy, LLC
(“Buyer”), and together with Seller, sometimes referred to individually as Party
and collectively as the “Parties”) and Wells Fargo Bank, N.A. (“Escrow Agent”).

 

The Parties hereby appoint the Escrow Agent as their escrow agent for the
purposes set forth herein, and the Escrow Agent hereby accepts such appointment
under the terms and conditions set forth herein.

 

Now, therefore, the Buyer, Seller and Escrow Agent agree as follows:

 

1.             Concurrent with the execution hereof by all Parties and Escrow
Agent, Buyer shall deposit into escrow with the Escrow Agent by wire transfer of
immediately available funds the sum of One Hundred Thousand And No/100 Dollars
($100,000.00) (the “Escrow Deposit”) to be held by Escrow Agent in an interest
bearing Money Market Deposit Account as set forth in Schedule 1  at Wells Fargo
Bank, N.A. (“Escrow Account”) representing an initial deposit by the Buyer for
the purchase of oil and gas producing properties from the Seller.   The Escrow
Agent shall hold the Escrow Deposit, together with all interest accrued thereon
(collectively, the “Escrow Funds”) as directed herein.

 

2.             The Escrow Agent shall, promptly upon receipt of the Escrow
Deposit deliver a facsimile acknowledgement substantially in the form set forth
in Schedule 2, to the Seller and Buyer, acknowledging receipt of each such
deposit.

 

3.             The Escrow Agent is hereby authorized and directed to hold the
Escrow Funds in the Escrow Account (“Escrow Account”) in accordance with the
terms and provisions hereof, and to disburse the Escrow Fund as may be
authorized and directed, and only as authorized and directed, by an Approval for
Disbursement signed by each of Seller and Buyer substantially in the form
attached hereto as Exhibit “A” and made a part hereof (“Disbursement Letter”). 
The Escrow Agent shall disburse the Escrow Fund within one (1) Business Day
following receipt of the Disbursement Letter.  “Business Day” shall mean any day
other than a Saturday, Sunday or any other day on which the Escrow Agent located
at the notice address set forth in Paragraph 9 below is authorized or required
by law or executive order to remain closed.

 

4.             Notwithstanding anything to the contrary, if Seller and Buyer
cannot agree on how the Escrow Fund should be disbursed in accordance with this
Escrow Agreement and the PSA, then upon a Final Determination (as defined below)
with respect to any such disbursement, either Seller or Buyer may submit an
Approval for Disbursement signed by such Party substantially in the form
attached hereto as Exhibit “B” and made a part hereof (“Final Determination
Disbursement Request”).  The Escrow Agent shall disburse the Escrow Funds within
one (1) Business Day following receipt of the Final Determination Disbursement
Request.  A “Final Determination” shall mean a final non-appealable judgment of
a court of competent jurisdiction pursuant to the terms of the PSA.  The Escrow
Agent shall act on such Final Determination Disbursement Request without further
question or the Escrow Agent may file an interpleader action in any court of
competent jurisdiction, and upon the filing thereof, the Escrow Agent shall be
relieved of all liability as to the Escrow Funds and shall be entitled to
recover attorneys’ fees, expenses and other costs incurred in commencing and
maintaining any such interpleader action.

 

Escrow Agreement

(7/19/07 – Vers. 1)

 

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

 

5.             Each of the Parties and the Escrow Agent agree that the following
provisions shall control with respect to the rights, duties, liabilities,
privileges and immunities of the Escrow Agent:

 

(a)           The Escrow Agent is not a party to and is not bound by, or charged
with notice of (except as provided in Paragraph (11)), any agreement out of
which the escrow arrangement contemplated hereby may arise.  The Escrow Agent is
acting hereunder as a depository only, and is not responsible or liable in any
manner whatsoever for the sufficiency, correctness, genuineness or validity of
any instrument or other written instructions, including the Disbursement Letter
or the Final Determination Disbursement Request, given to the Escrow Agent
pursuant to this Escrow Agreement.

 

(b)           The Escrow Funds held in the Escrow Account shall not be subject
to any right of set-off or claim which the Escrow Agent may have from time to
time against either Seller or Buyer.

 

(c)           In carrying out and performing its duties under this Escrow
Agreement, the Escrow Agent shall not incur any liability to anyone for any
damages, losses, or expenses with respect to the establishment and
administration of the Escrow Account hereunder, except for its willful
misconduct or gross negligence, and accordingly the Escrow Agent shall not incur
any liability with respect to:

 

(1)           Any action taken or omitted to be taken in good faith upon the
advice of the Escrow Agent’s counsel given with respect to any questions
relating to the duties and responsibilities of the Escrow Agent under this
Escrow Agreement. The Escrow Agent shall be under no duty to inquire into or
investigate the validity, accuracy or content of any such document, notice,
instruction or request.  The Escrow Agent shall have no duty to solicit any
payments which may be due it or the Escrow Funds.  The Escrow Agent shall not be
liable for any action taken or omitted by it in good faith except to the extent
that a final adjudication pursuant to Paragraph 11 below determines that the
Escrow Agent’s gross negligence or willful misconduct was the primary cause of
any loss to either of the Parties.  In the event the Escrow Agent shall be
uncertain as to its duties or rights hereunder, it shall be entitled to refrain
from taking any action and its sole obligation shall be to keep safely all
property held in escrow until it shall be directed otherwise either in writing
by each of the Buyer and Seller or in a Final Determination.  Anything in this
Escrow Agreement to the contrary notwithstanding, in no event shall the Escrow
Agent be liable for special, indirect or consequential loss or damage of any
kind whatsoever (including but not limited to lost profits), even if the Escrow
Agent has been advised of the likelihood of such loss or damage and regardless
of the form of action. No party to this Escrow Agreement shall be liable to any
other party for losses due to, or if it is unable to perform its obligations
under the terms of this Escrow Agreement because of, acts of God, fire, war,
terrorism, floods, strikes, electrical outages, equipment or transmission
failure, or other causes reasonably beyond its control.

 

(2)           Any action taken or omitted to be taken in reliance upon the
Disbursement Letter, the Final Determination Disbursement Request, or any other
instrument or written instructions signed by Seller and Buyer.

 

(3)           Any instructions received by the Escrow Agent pursuant to the
Disbursement Letter, the Final Determination Disbursement Request or the
accuracy, validity, or propriety of any such instructions or any statement
therein.  The Escrow Agent shall be under no duty or obligation to make any
inquiry about or verify the authenticity of any signature on any letter or
document received pursuant to this Escrow Agreement, including the Disbursement
Letter, the Final Determination Disbursement Request, or the authority of the
person purporting to have signed said document.

 

Escrow Agreement

(2/18/08 – Vers. 1)

 

3

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

 

(d)           Seller and Buyer jointly and severally agree to indemnify, defend
and hold harmless the Escrow Agent and its directors, officers, agents and
employees (the “indemnitees”) against any and all losses, claims, damages,
liabilities and expenses, including reasonable costs of investigation and fees
and payments to outside counsel, which may be imposed upon or incurred by the
Escrow Agent in connection with the acceptance of its appointment hereunder, the
establishment and administration of the Escrow Account hereunder, or the
performance of any of its duties hereunder, except as may be caused by the gross
negligence or willful misconduct by or on the part of the Escrow Agent or any
indemnitee.  Promptly after receipt by the Escrow Agent or any indemnitee of
service of process for the commencement of any action the Escrow Agent will, if
a claim with respect thereto is to be made against any of the Parties, notify
the Parties of the commencement of such action. The Parties hereto acknowledge
that the foregoing indemnities shall survive the resignation or removal of the
Escrow Agent or the termination of this Escrow Agreement.

 

(e)           The Escrow Agent may seek the advice of legal counsel concerning
any matter relating to its duties hereunder, and it shall incur no liability in
acting in accordance with the opinion and instructions of such counsel.

 

(f)                            (1)           The Escrow Agent may resign and be
discharged from its duties or obligations hereunder by giving thirty (30) days
advance notice in writing of such resignation to the Parties specifying a date
when such resignation shall take effect.  Any corporation or association into
which the Escrow Agent may be merged or converted or with which it may be
consolidated, or any corporation or association to which all or substantially
all the escrow business of the Escrow Agent’s corporate trust line of business
may be transferred, shall be the Escrow Agent under this Escrow Agreement
without further act.  Escrow Agent’s sole responsibility after such thirty (30)
day notice period expires shall be to hold the Escrow Funds (without any
obligation to reinvest the same) and to deliver the same to a designated
substitute escrow agent, if any, or in accordance with the directions of a final
order or judgment of a court of competent jurisdiction, at which time of
delivery Escrow Agent’s obligations hereunder shall cease and terminate.  If the
Parties have failed to appoint a successor escrow agent prior to the expiration
of thirty (30) days following receipt of the notice of resignation, the Escrow
Agent may petition any court of competent jurisdiction for the appointment of a
successor escrow agent or for other appropriate relief, and any such resulting
appointment shall be binding upon the Parties.

 

(2)           The Parties, acting together, may at any time replace the Escrow
Agent hereunder by giving notice to such effect and the details of a successor
escrow agent to the Escrow Agent.  Within ten (10) days of receipt of such
notice and details, the Escrow Agent shall transfer the Escrow Funds to the
successor escrow agent.

 

6.             The Escrow Agent’s fee of $2,000.00 shall be paid equally by the
Seller and Buyer at the time this Agreement is delivered to Escrow Agent.  The
Buyer further agrees to reimburse Escrow Agent upon demand for all expenses
incurred in connection with this Escrow Agreement, including without limitation,
Escrow Agent’s service fees for all services performed in connection with this
Escrow Agreement as described in its applicable fee and information schedule. 
This provision shall survive the termination of this Agreement.

 

7.

a.     Each of the Parties represents that its correct Taxpayer Identification
Number (“TIN”) assigned by the Internal Revenue Service (“IRS”) is set forth on
the signature page hereof.  All income earned by the Escrow Agent on funds
invested pursuant to this Escrow Agreement shall be reportable as

 

4

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

 

income to the Internal Revenue Service or any applicable State Revenue
Department, as income of the Buyer.  Any tax returns or reports required to be
prepared and filed on behalf of or by the Escrow Funds will be prepared and
filed by Buyer and the Escrow Agent shall have no responsibility for the
preparation and/or filing or any tax return with respect to any income earned by
the Escrow Funds.  In addition, any tax or other payments required to be made
pursuant to such tax return or filing will be paid by Buyer.  Escrow Agent shall
have no responsibility for such payment.  Any payment by the Escrow Agent under
this Escrow Agreement shall by made without any deduction or withholding for or
on account of any taxes or other amounts.

 

b.     Prior to closing, the Buyer and Seller shall provide the Escrow Agent
with certified tax identification numbers by furnishing appropriate forms W-9 or
W-8 and such other forms and documents that the Escrow Agent may request.   The
parties understand that if such tax reporting documentation is not provided and
certified to the Escrow Agent, the Escrow Agent may be required by the Internal
Revenue Code of 1986, as amended, and the Regulations promulgated thereunder, to
withhold a portion of any interest or other income earned on the investment of
the Escrow Funds.

 

c.     To the extent that the Escrow Agent becomes liable for the payment of any
taxes in respect of income derived from the investment of the Escrow Funds, the
Escrow Agent shall satisfy such liability to the extent possible from the Escrow
Funds.  The Parties, jointly and severally, shall indemnify, defend and hold the
Escrow Agent harmless from and against any tax, late payment, interest, penalty
or other cost or expense that may be assessed against the Escrow Agent on or
with respect to the Escrow Funds and the investment thereof unless such tax,
late payment, interest, penalty or other expense was directly caused by the
gross negligence or willful misconduct of the Escrow Agent.  The indemnification
provided by this Section 7(c) is in addition to the indemnification provided in
Section 5(d) and shall survive the resignation or removal of the Escrow Agent
and the termination of this Escrow Agreement.

 

8.             This Escrow Agreement shall remain in force and effect until the
earlier of (i) the disbursement by the Escrow Agent of the Escrow Funds in
accordance with the Disbursement Letter or the Final Determination Disbursement
Request, or (ii) the resignation of the Escrow Agent as Escrow Agent and the
delivery to a successor specified by the Parties of the Escrow Agreement, the
Escrow Funds and any other related instruments or documents.  Notwithstanding
the foregoing, if a an arbitration is pending challenging Seller’s right to the
Escrow Funds, or otherwise alleging a dispute as to the distribution of the
Escrow Funds, and provided the Escrow Agent has received written notice thereof
and a copy of all pleadings filed as of the date of such notice, the Escrow
Agent shall maintain such funds under the further provisions of this Escrow
Agreement until an award or decision is entered or the Parties otherwise
mutually agree in writing.

 

9.             All notices, requests and instructions permitted or required to
be given under the terms of this Escrow Agreement shall be in writing, and may
be served by personal delivery by certified US mail addressed to the party to be
notified, postage prepaid, return receipt requested or by facsimile
transmission.  Notice deposited in the mail in the manner hereinabove described
shall be deemed to have been given and received on the date of the delivery as
shown on the return receipt.  Notice sent by facsimile transmission shall be
deemed to have been given if the recipient confirms via telephone or facsimile
its receipt of such notice to the sender.  Notice served in any other manner
shall be deemed to have been given and received only if and when actually
received by the addressee.

 

5

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

 

If to Seller:

 

NGS Sub. Corp.

2500 City West Blvd, Suite 1300

Houston, Texas 77042

Attention: Robert S. Herlin, President

Facsimile:      713-935-0199

Telephone:     713-935-0122

 

6

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

 

With a copy to:

 

Adams and Reese LLP

1221 McKinney, Suite 4400

Houston, Texas 77010

Attention:       Mr. Mark A. Mathews

Telephone:     (713) 308-0158

Telecopy:       (713) 652-5152

 

If to Buyer:

 

MWM Energy, LLC

114 30th Avenue South

Nashville, Tennessee  37212

Attention: Stephen F. Moore, CEO

Facsimile:      615-340-5391

Telephone:     615-340-5389

 

If to Escrow Agent:

Wells Fargo Bank, N.A.

1021 Main Street, Suite 2403

MAC:  T5017-241

Houston, Texas  77002

Attention: Josie Hixon

Telephone:     (713) 289-3469

Telecopy:       (713) 289-3488

 

The Parties’ and the Escrow Agent’s respective addresses may be changed by the
appropriate Party or entity so notifying the other Party or entity in the manner
provided above.

 

10.           This Escrow Agreement and all instruments executed in accordance
herewith shall be governed by and interpreted in accordance with the laws of the
State of Texas, without regard to conflict of law rules that would direct
application of the laws of another jurisdiction.

 

11.           Any claim, counterclaim, demand, cause of action, dispute, or any
other controversy arising out of or relating to this Escrow Agreement solely
between the Buyer and Seller or in any way relating to the subject matter of
this Escrow Agreement (each a “Dispute”) shall be resolved by binding
arbitration by the Parties hereto.  A Dispute shall be resolved through
arbitration regardless of whether the Dispute involves claims that this Escrow
Agreement is unlawful, unenforceable, void, or voidable or involves claims under
state or federal statutory or common law.  The validity, construction and
interpretation of this Escrow Agreement to arbitrate, and all other procedural
aspects of the arbitration conducted pursuant hereto shall be decided by the
arbitrators.  Any Party hereto may commence an arbitration proceeding by
transmitting written notice to the other Parties hereto pursuant to the notice
provisions of Paragraph (k) of this Escrow Agreement and to the AAA regional
office associated with the Location, of such party’s demand for arbitration with
respect to such party’s cause of action or claim that is a Dispute (the “Demand
for Arbitration”).  Any arbitration under this Escrow Agreement shall be
conducted in accordance with the Commercial Arbitration Rules (the “Rules”) of
the American Arbitration Association (“AAA”).  In resolving any Dispute, the
arbitrators shall refer to the governing law as specified in the first sentence
of this

 

7

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

 

Paragraph (11).  THE ARBITRATORS SHALL NOT BE EMPOWERED TO AWARD, AND SHALL NOT
AWARD, PUNITIVE, EXEMPLARY, MULTIPLE, TREBLE, CONSEQUENTIAL, INDIRECT, AND
SPECIAL DAMAGES, REGARDLESS OF THE NATURE OF THE CAUSE OF ACTION, INCLUDING
WITHOUT LIMITATION, BREACH OF CONTRACT, TORT, AND NEGLIGENCE.  EACH OF THE
PARTIES AND THE ESCROW AGENT WAIVES ANY RIGHT THAT SUCH PARTY OR ENTITY MAY HAVE
TO RECOVER SUCH DAMAGES FROM ANY OTHER PARTY OR ENTITY.  The arbitration shall
be held in Harris County, Texas (the “Location”).  If the parties hereto
initiate multiple arbitration proceedings, the subject matters of which are
related by common questions of law or fact and which could result in conflicting
awards or obligations, then all such proceedings may be consolidated into a
single arbitral proceeding.  Unless otherwise agreed by the parties to the
Dispute, the Dispute shall be decided by a panel of three (3) neutral
arbitrators selected as follows.  If there are only two (2) parties to the
Dispute, then each party to the Dispute shall appoint one (1) arbitrator within
thirty (30) days of the filing of the arbitration, and the two arbitrators so
appointed shall select the presiding arbitrator within thirty (30) days after
the latter of the two arbitrators has been appointed by the parties to the
Dispute.  If a party to the Dispute fails to appoint its party-appointed
arbitrator or if the two party-appointed arbitrators cannot reach an agreement
on the presiding arbitrator within the applicable time period, then the AAA
shall serve as the appointing authority and shall appoint the remainder of the
three arbitrators not yet appointed.  If the arbitration is to be conducted by
three arbitrators and there are more than two parties to the Dispute, then
within thirty (30) days of the filing of the arbitration, all claimants shall
jointly appoint one arbitrator and all respondents shall jointly appoint one
arbitrator, and the two arbitrators so appointed shall select the presiding
arbitrator within thirty (30) days after the latter of the two arbitrators has
been appointed by the parties to the Dispute.  In the event of a dispute
concerning the alignment of the parties to the Dispute, such dispute shall be
resolved by the AAA as the administrative authority.  If  either of the Parties
is not a party to the Dispute, it will not appoint an arbitrator.  If the
parties to the Dispute agree in writing, the Dispute may be decided by a single
arbitrator who shall be specified in such written agreement between or among the
parties to the Dispute.  The arbitrators may award interim measures or
injunctive relief, which may be enforced by the arbitrators or by a court of
law. The arbitration award issued by the arbitrators shall be final and
binding.  The award shall be required to be in writing, stating the amount of
the award, and if applicable the amount of attorneys’ fees and costs.  Any
litigation relating to or arising under this Paragraph (11) must be brought in
the state or federal courts sitting in the Location.  The Parties further hereby
waive any right to a trial by jury with respect to any lawsuit or judicial
proceeding arising or relating to this Escrow Agreement.  Any arbitration award
may be enforced by the state or federal courts of Texas or by any court of
competent subject matter jurisdiction (including but not limited to any
jurisdiction in which a party to the Dispute holds or keeps assets).  The
parties hereto agree that service of process may be accomplished according to
the notice procedures of Paragraph (k) or by any other means authorized by
applicable law.  The parties hereto agree to waive any objection they may have
to service of process if accomplished according to the procedures of Paragraph
(k).  The arbitrators are authorized to award costs of the arbitration in its
award, including without limitation (i)  the reasonable fees and expenses of the
arbitrators; (ii) the reasonable costs of assistance required by the tribunal,
including its experts; (iii) the reasonable fees and expenses of the
administrator; (iv) the reasonable costs for legal representation of a
successful party to the Dispute, including attorneys’ fees, expert witness fees,
out of pocket costs and other reasonable expenses; and (v) any such reasonable
costs incurred in connection with an application for interim measures or
emergency relief and to allocate those costs between the parties to the
Dispute.  The award shall include pre-judgment interest at a rate to be
determined by the arbitrators (not to exceed the maximum amount permitted by
law) from the date of the breach or default.  Interest shall accrue until the
date the award is paid in full.  Any arbitration (including a settlement
resulting from an award, documents exchanged or produced during an arbitration
proceeding, and memorials, briefs or other documents prepared for the
arbitration) shall be confidential and may not be disclosed by the parties
hereto, their employees, officers, directors, counsel, consultants, and expert
witnesses, except (i) in a legal proceeding to enforce rights under this
Paragraph (11), (ii) in response to a subpoena or legal process, but only after
giving the other parties hereto reasonable notice in advance for them to take
steps to preserve the confidentiality of the material, (iii) by agreement of the
parties hereto or (iv) as required by applicable law or any applicable stock
exchange.  A breach of this Paragraph (11) shall not void any settlement or
award.  If any provision of Paragraph (11) is found by a court to be
unenforceable or unlawful, then it shall be severed from this Escrow Agreement
and the remaining terms shall be enforced as written.

 

8

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

 

12.           This Escrow Agreement shall be binding upon and inure to the
benefit of the Parties and the Escrow Agent, and their respective successors and
assigns.

 

13.           In the event a Disbursement Letter or Final Determination
Disbursement Request is given, the Escrow Agent is authorized to seek
confirmation of such instructions by telephone call-back to the person or
persons designated on Schedule 3 hereto, and the Escrow Agent may rely upon the
confirmation of anyone purporting to be the person or persons so designated. 
Each Disbursement Letter or Final Determination Disbursement Request shall be
executed by an authorized signatory, a list of such authorized signatories is
set forth on Schedule 3.  The undersigned is authorized to certify that the
signatories on Schedule 3 are authorized signatories.  The persons and telephone
numbers for call-backs may be changed only in a writing actually received and
acknowledged by the Escrow Agent.  The Escrow Agent and the beneficiary’s bank
in any funds transfer may rely solely upon any account numbers or similar
identifying numbers provided by Seller or Buyer to identify (i) the beneficiary,
(ii) the beneficiary’s bank, or (iii) an intermediary bank.  The Escrow Agent
may apply any of the escrowed funds for any payment order it executes using any
such identifying number, even when its use may result in a person other than the
beneficiary being paid, or the transfer of funds to a bank other than the
beneficiary’s bank or an intermediary bank designated.  The parties to this
Escrow Agreement acknowledge that these security procedures are commercially
reasonable.

 

14.           The provisions of this Escrow Agreement may be waived, altered,
amended or supplemented, in whole or in part, only by a writing signed by the
Parties and Escrow Agent.  This Escrow Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. All signatures of the
Parties and of the Escrow Agent may be transmitted by facsimile, and such
facsimile will, for all purposes, be deemed to be the original signature of such
Party or entity whose signature it reproduces, and will be binding upon such
Party or entity.

 

15.           In the event that any portion of the Escrow Funds shall be
attached, garnished or levied upon by any court order, or the delivery thereof
shall be stayed or enjoined by an order of a court, or any order, judgment or
decree shall be made or entered by any court order affecting the Escrow Funds,
the Escrow Agent is hereby expressly authorized, in its sole discretion, to obey
and comply with all writs, orders or decrees so entered or issued, which it is
advised by legal counsel of its own choosing is binding upon it, whether with or
without jurisdiction, and in the event that the Escrow Agent obeys or complies
with any such writ, order or decree it shall not be liable to any of the Parties
or to any other person, firm or corporation, by reason of such compliance
notwithstanding such writ, order or decree be subsequently reversed, modified,
annulled, set aside or vacated.

 

9

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

 

IN WITNESS WHEREOF, the Parties and the Escrow Agent have executed this Escrow
Agreement as of the date set forth above.

 

 

BUYER:

 

 

 

MWM ENERGY, LLC

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

 

Title:

 

 

 

 

TIN:

 

 

 

 

SELLER:

 

 

 

NGS SUB CORP.

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

 

Title:

 

 

 

 

TIN:

 

 

 

 

 

 

ESCROW AGENT:

 

 

 

WELLS FARGO BANK, N.A.

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

 

Title:

 

 

10

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

 

Schedule 1

 

Agency and Custody Account Direction

For Cash Balances

Wells Fargo Money Market Deposit Accounts

 

Direction to use the following Wells Fargo Money Market Deposit Accounts for
Cash Balances for the escrow account or accounts (the “Account”) established
under the Escrow Agreement to which this Exhibit A is attached.

 

You are hereby directed to deposit, as indicated below, or as I shall direct
further in writing from time to time, all cash in the Account(s) in the
following money market deposit account of Wells Fargo Bank, National Association
(Bank):

 

Wells Fargo Money Market Deposit Account (MMDA)

 

I understand that amounts on deposit in the MMDA are insured, subject to the
applicable rules and regulations of the Federal Deposit Insurance Corporation
(FDIC), in the basic FDIC insurance amount of $100,000 per depositor, per
insured bank. This includes principal and accrued interest up to a total of
$100,000.   I understand that deposits in the MMDA are not secured.

 

I acknowledge that I have full power to direct investments of the Account(s).

 

I understand that I may change this direction at any time and that it shall
continue in effect until revoked or modified by me by written notice to you.

 

 

 

 

 

Authorized Representative,

 

Authorized Representative,

NGS Sub. Corp.

 

MWM Energy, LLC

 

 

 

Date: February 15, 2008

 

Date: February 15, 2008

 

Schedule 1

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

 

Schedule 2

 

FORM OF ESCROW AGENT’S ACKNOWLEDGEMENT

 

TO:

 

NGS Sub Corp.

 

MWM Energy, LLC

2500 City West Blvd

 

114 30th Avenue South

Suite 1300

 

Nashville, Tennessee 37212

Houston, Texas 77042

 

Attention: Stephen F. Moore, CEO

Attention: Robert S. Herlin, President

 

Facsimile:

615-340-5391

Facsimile:713-935-0199

 

Telephone:

615-340-5389

Telephone:     713-935-0122

 

 

 

REFERENCE:

 

Escrow Agreement dated as of the 15th day of February, 2008  (“Escrow
Agreement”) by and among NGS Sub Corp. (“Seller”), MWM Energy, LLC (“Buyer”) and
Wells Fargo Bank, N.A. (“Escrow Agent”) pursuant to which an escrow account
designated as the               account bearing Account Number
                     (the “Escrow Account”) has been established.

 

ACKNOWLEDGEMENT:

 

In our capacity as Escrow Agent under the Escrow Agreement, we hereby
acknowledge receipt of $[                                            ] from
Buyer by wire transfer of immediately available funds into the Escrow Account.

 

Dated: [                      ], 2008

 

 

ESCROW AGENT:

 

 

 

WELLS FARGO BANK, N.A.

 

 

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

 

 

Title:

 

 

Schedule 2

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

 

SCHEDULE 3

 

TELEPHONE NUMBER(S) AND SIGNATURE(S) FOR

 

PERSON(S) DESIGNATED TO GIVE AND CONFIRM FUNDS TRANSFER INSTRUCTIONS

 

If to Seller:

 

 

 

 

 

 

 

 

Name

 

Telephone Number

 

Signature

 

 

 

 

 

 

1.

Robert S. Herlin

 

(713) 935-0122

 

 

 

 

 

 

 

 

2.

 

 

 

 

 

 

 

 

 

 

 

3.

 

 

 

 

 

 

 

 

 

 

 

If to Buyer:

 

 

 

 

 

 

 

 

 

 

 

Name

 

Telephone Number

 

Signature

 

 

 

 

 

 

1.

W. Mark Meyer

 

(281) 296-3140

 

 

 

 

 

 

 

 

2.

 

 

 

 

 

 

 

 

 

 

 

3.

 

 

 

 

 

 

Telephone call backs shall be made to both Seller and Buyer if joint
instructions are required pursuant to the Escrow Agreement. All funds transfer
instructions must include the signature of the person(s) authorizing said funds
transfer.

 

 

Escrow Agreement

(7/19/07 – Vers. 1)

 

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

 

Exhibit “A”

 

To that certain Escrow Agreement

dated the          day of February , 2008 by and among

NGS Sub. Corp., MWM Energy, LLC and

Wells Fargo Bank, N.A.

 

APPROVAL FOR DISBURSEMENT

 

Wells Fargo Bank, N.A.

1000 Louisiana St, 4th Floor

Houston, TX 77002

MAC T5002-044

Telecopy:  713 739-1080

 

RE:

Escrow Agreement

 

Escrow Account No.

 

 

 

Gentlemen:

 

The undersigned, being all of the parties (other than Escrow Agent) to that
certain Escrow Agreement dated the            day of February, 2008 hereby
request that the following amounts be paid out of the referenced Escrow Account
via wire transfer of immediately available funds to the named payees at the
addresses and banking coordinates indicated below:

 

Payee

 

Amount

 

 

 

 

 

NGS Sub Corp.

 

$

                  

 

 

 

 

 

Bank:

 

 

 

ABA No.:

 

 

 

Account Number:

 

 

 

 

 

 

 

MWM Energy, LLC

 

$

                  

 

 

 

 

 

Bank:

 

 

 

ABA No.:

 

 

 

Account Number:

 

 

 

 

Should you have any questions regarding the above instructions, please contact
representatives of each of the undersigned parties.

 

 

SELLER:

 

 

 

NGS SUB CORP.

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

 

Title:

 

 

1

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

 

 

BUYER:

 

 

 

MWM ENERGY, LLC

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

 

Title:

 

 

2

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

 

Exhibit “B”

 

To that certain Escrow Agreement

dated the          day of February, 2008 by and among

NGS Sub. Corp., MWM Energy, LLC and

Wells Fargo Bank, N.A.

 

FINAL DETERMINATION DISBURSEMENT REQUEST

 

Wells Fargo Bank, N.A.

1000 Louisiana St, 4th Floor

Houston, TX 77002

MAC T5002-044

Telecopy:  713 739-1080

 

RE:

Escrow Agreement

 

Escrow Account No.

 

 

 

Gentlemen:

 

The undersigned, being a party to that certain Escrow Agreement dated the
           day of February, 2008 (the “Escrow Agreement”) by and among NGS Sub
Corp. (“Seller”), MWM Energy, LLC (“Buyer”) and Wells Fargo Bank, N.A. (“Escrow
Agent”), hereby requests that the following amounts be paid out of the
referenced Escrow Account via wire transfer of immediately available funds, to
the named payees at the addresses and banking coordinates indicated below
pursuant to this Final Determination Disbursement Request (as defined in the
Escrow Agreement), a copy of the Final Determination (as defined in the Escrow
Agreement) is attached hereto:

 

Payee

 

Amount

 

 

 

 

 

NGS Sub Corp.

 

$

                   

 

Bank:

 

 

 

ABA No.:

 

 

 

Account Number:

 

 

 

 

 

 

 

MWM Energy, LLC

 

$

                   

 

 

 

 

 

Bank: .

 

 

 

ABA No.: Account Number:

 

 

 

 

Should you have any questions regarding the above instructions, please contact
representatives of the Seller and Buyer.

 

 

[NGS SUB CORP.]

 

 

 

[OR]

 

 

 

[MWM ENERGY, LLC]

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

 

Title:

 

 

1

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

 

Exhibit “D”

 

Attached to and made a part of that certain

Asset Purchase and Sale Agreement dated February 15, 2008

by and between NGS Sub. Corp., as Seller, and

MWM Energy, LLC, as Buyer

 

ASSIGNMENT, CONVEYANCE AND BILL OF SALE

 

STATE OF LOUISIANA

 

§

 

 

 

§

 

PARISHES OF LASALLE AND WINN

 

§

 

 

THAT, NGS Sub. Corp., a Delaware corporation, whose address is 2500 City West
Boulevard, Suite 1300, Houston, Texas 77042 (“Assignor”), in consideration of
Ten Dollars ($10.00) and other good and valuable consideration to it in hand
paid, the receipt and sufficiency of which are hereby acknowledged, does hereby
GRANT, BARGAIN, CONVEY, SELL, ASSIGN, TRANSFER and DELIVER to MWM Energy, LLC, a
Texas limited liability company, whose address is 114 30th Avenue South,
Nashville, Tennessee 37212 (“Assignee”), effective February 1, 2008 at 7:00 a.m.
CST (the “Effective Time”), the assets and properties described in Section II
below, except to the extent constituting Excluded Assets, which, after said
exclusion, shall be collectively referred to as the “Assets.”  This Assignment,
Conveyance and Bill of Sale (the “Conveyance”) relates to that certain Purchase
and Sale Agreement dated February 15, 2008, effective February 1, 2008, between
Assignor and Assignee (referred to as the “Agreement”).  Each capitalized term
used in this Conveyance that is not otherwise defined herein shall have the
meaning as set out in the Agreement.

 

I.  DEFINITIONS

 

In this Conveyance, capitalized terms have the meanings provided in this
Section, unless defined elsewhere in this Conveyance.  All defined terms include
both the singular and the plural of such terms.  All references to Sections
refer to Sections in this Conveyance and all references to Exhibits or Schedules
refer to Exhibits or Schedules attached to and made a part of this Conveyance. 
When the term “herein” is used in this Conveyance, reference is made to the
entire Conveyance and not to any particular Section or subparagraph of a
Section.  The word “including” shall mean including without limitation.

 

(a)                                  “Assignee Group” means Assignee and its
officers, directors, agents, representatives, consultants and employees.

 

(b)                                 “Assignor Group” means (1) Assignor and its
officers, directors, agents, representatives, consultants and employees, and
(2) Assignor’s Parent and Affiliates and their officers, directors, agents,
representatives, consultants and employees.

 

Escrow Agreement

(7/19/07 – Vers. 1)

 

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

 

(c)                                  “Claims” shall mean any and all claims,
demands, losses, damages, punitive damages, costs, expenses, causes of action or
judgments of any kind or character including, without limitation, any interest,
penalty, reasonable attorneys’ fees and other costs and expenses incurred in
connection therewith or the defense thereof.

 

(d)                                 “Company” shall mean Four Star Development
Corporation, a Louisiana corporation.

 

(e)                                  “Environmental Defect” shall mean:

 

(1)                                  a condition or activity with respect to a
Scheduled Interest that is in material violation, or reasonably likely to
materially violate, any federal, state or local statute, or any rule, order,
ruling or regulation entered, issued or made by any court, administrative
agency, or other governmental body or entity, federal, state, or local, or any
arbitrator (“Environmental Law”), or surface or mineral lease obligation,
whether an express or implied obligation, relating to natural resources,
conservation, the environment, or the emission, release, storage, treatment,
disposal, transportation, handling or management of industrial or solid waste,
hazardous waste, hazardous or toxic substances, chemicals or pollutants,
petroleum, including crude oil, natural gas, natural gas liquids, or liquefied
natural gas, and any wastes associated with the exploration and production of
oil and gas (“Regulated Substances”); or

 

(2)                                  the presence of Regulated Substances in the
soil, groundwater, or surface water in, on, at or under a Scheduled Interest in
any manner or quantity which is required to be remediated by Environmental Law
or by any applicable action or guidance levels or other standards published by
any governmental agency with jurisdiction over the Assets, or by a surface or
mineral lease obligation, whether an express or implied obligation.  Assignee
and Assignor agree that for a condition to be in violation of any statute or
regulation it shall not be necessary that Assignor shall be under notice of
violation from a federal or state regulatory agency or lessor.

 

The Parties agree and acknowledge that Assignee was provided an opportunity to
examine the Assets for potential naturally occurring radioactive materials
(“NORM”), and any potential obligations with respect to NORM and that the
presence of NORM on any of the Assets, except with respect to inactive wells,
facilities, pipelines and other equipment, may not be raised by Assignee as the
subject of an Environmental Defect.

 

(f)                                    “Environmental Obligations” shall mean
all liabilities, obligations, expenses (including, without limitation, all
attorneys’ fees), fines, penalties, costs, claims, suits or damages (including
natural resource damages) of any nature, associated with the Assets, and
attributable to or resulting from:

 

(1)                                  pollution or contamination of soil, surface
water, groundwater or air, on, in, by, from or under the Assets or lands in the
vicinity thereof, and any other contamination of or adverse effect upon the
environment;

 

3

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

 

(2)                                  underground injection activities and waste
disposal;

 

(3)                                  clean-up responses, remedial, control or
compliance costs, including the required cleanup or remediation of spills, pits,
lakes, ponds, or lagoons, including any subsurface or surface pollution caused
by such spills, pits, lakes, ponds, or lagoons;

 

(4)                                  noncompliance with applicable land use,
permitting, surface disturbance, licensing or notification requirements,
including those in a surface or mineral lease, whether an express or implied
obligation;

 

(5)                                  violation of any federal, state or local
Environmental Law or land use law, or surface or mineral lease obligation,
whether an express or implied obligation;

 

(6)                                  any other violation which could qualify as
an Environmental Defect (without being limited to Scheduled Interests); and

 

(7)                                  any and all indemnity obligations of
Assignor with respect to the above, along with any and all Claims against
Assignor for indemnity with respect to the above, under, pursuant to or arising
from any acquisition, purchase and sale or other agreement.

 

Notwithstanding any provision of this Conveyance or the Agreement to the
contrary, “Environmental Obligations” shall not include Plugging and Abandonment
Obligations (including with respect to NORM).

 

(g)                                 “Governmental Authority” means any federal,
state, local, municipal or other governments; any governmental, regulatory or
administrative agency, commission, body or other authority exercising or
entitled to exercise any administrative, executive, judicial, legislative,
police, regulatory or taxing authority or power; and any court or governmental
tribunal.

 

(h)                                 “Permitted Encumbrances” shall mean any of
the following matters:

 

(1)                                  defects in the early chain of title
consisting of failure to recite marital status or the omission of succession or
heirship proceedings;

 

(2)                                  defects or irregularities arising out of
uncancelled mortgages, judgments or liens, the inscriptions of which, on their
face, have expired as a matter of law prior to the Effective Time, or prior
unreleased oil and gas leases which, on their face, expired more than ten
(10) years prior to the Effective Time and have not been maintained in force and
effect by production or operations pursuant to the terms of such leases;

 

(3)                                  tax liens and operator’s liens for amounts
not yet due and payable, or those that are being contested in good faith by
Assignor in the ordinary course of business;

 

(4)                                  to the extent any of the following do not
materially diminish the value of, or impair the conduct of operations on, any of
the Assets and do not impair Assignor’s right to receive the revenues
attributable thereto: (i) easements, rights-of-way, servitudes,

 

4

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

 

permits, surface leases and other rights in respect of surface operations,
pipelines, grazing, hunting, fishing, logging, canals, ditches, lakes,
reservoirs or the like, (ii) easements for streets, alleys, highways, pipelines,
telephone lines, power lines, railways and other similar rights-of-way, on, over
or in respect of property owned or leased by Assignor or over which Assignor
owns rights of way, easements, permits or licenses, and (iii) the terms and
conditions of all leases, agreements, orders, instruments and documents
pertaining to the Assets;

 

(5)                                  all lessors’ royalties, overriding
royalties, net profits interests, carried interest, production payments,
reversionary interests and other burdens on or deductions from the proceeds of
production if the net cumulative effect of such burdens or deductions does not
reduce the net revenue interest of Assignor in any Well affected thereby below
that reflected on Exhibit “A-2” of all oil and gas produced, saved and marketed
from or attributable to the unitized sand or other sands listed from the Wells
listed, or impair the right to receive revenues attributable thereto;

 

(6)                                  preferential rights to purchase and
required third party consents to assignments and similar agreements with respect
to which waivers or consents are obtained from the appropriate parties, or the
appropriate time period for asserting the rights has expired without an exercise
of the rights prior to the date of execution of this Conveyance;

 

(7)                                  Required third-party consents to the
assignment of the Leases, which Assignor has previously requested, but not
obtained, and the lessor of any such lease or holder of any such right has not
prior to the execution of the Agreement objected to such assignment or notified
Assignor in writing of such objection obligation;

 

(8)                                  all rights to consent by, required notices
to, filings with, or other actions by governmental entities in connection with
the sale or conveyance of oil and gas leases or interests if they are
customarily obtained subsequent to the sale or conveyance;

 

(9)                                  defects or irregularities of title arising
out of events or transactions which have been barred by limitations or by
acquisitive or liberative prescription;

 

(10)                            rights reserved to or vested in any municipality
or governmental, statutory or public authority to control or regulate any of the
Assets in any manner, and all applicable laws, rules and orders of governmental
authority;

 

(11)                            any encumbrance or other matter (whether or not
constituting a Title Defect) expressly waived in writing by Assignee or listed
on Exhibit “F”; and

 

(12)                            the litigation and threatened litigation, and
any Claims thereunder, as listed on Exhibit “F.”

 

(i)                                     “Person” means an individual, group,
partnership, corporation, limited liability company, trust or other entity.

 

5

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(j)                                     “Plugging and Abandonment Obligations”
shall mean the responsibility and liability, including but not limited to Claims
for damages and/or other relief, for the following plugging and abandonment
obligations related to the Assets, regardless of whether they are attributable
to the ownership or operation of the Assets before or after the Effective Time:

 

(1)                                  the necessary and proper plugging,
replugging and abandonment of all Wells, whether plugged and abandoned before or
after the Effective Time;

 

(2)                                  the necessary and proper removal,
abandonment, and disposal of all platforms, structures, pipelines, equipment,
movables, immovables, abandoned property and junk located on or comprising part
of the Assets;

 

(3)                                  to the extent allowed by the applicable
authorized governmental body and the owners of the property affected, the
necessary and proper capping and burying of all associated flow lines located on
or comprising part of the Assets;

 

(4)                                  the necessary and proper restoration of the
Assets and/or the property covered by the Assets or upon which the Assets are
located, both surface, surface water, groundwater, waterbottom and subsurface,
to such condition as may be required by applicable laws, regulation or contract;

 

(5)                                  any necessary clean-up or disposal of
Assets contaminated by NORM as may be required by applicable laws, regulation or
contract;

 

(6)                                  all obligations arising from contractual
requirements and demands made by authorized governmental bodies or parties
claiming an interest in the Assets and/or the property covered by the Assets or
upon which the Assets are located; and

 

(7)                                  any and all indemnity obligations of
Assignor with respect to the above, along with any and all Claims against
Assignor for indemnity with respect to the above, under, pursuant to or arising
from any acquisition, purchase and sale or other agreement.

 

(k)                                  “Scheduled Interests” or “Scheduled
Interest” shall mean that portion of the Assets attributable to the Leases or
Wells identified on Exhibits “A-1” and “A-2” and having a value greater than
$0.00.

 

(l)                                     “Tax” or “Taxes” means all income,
profits, franchise, withholding, ad valorem, employment, social security,
disability, occupation, property, severance and excise taxes, together with any
interest and penalties with respect thereto, imposed by or on behalf of any
Taxing Authority.

 

(m)                               “Taxing Authority” means, with respect to any
Tax, the governmental entity or political subdivision thereof that imposes such
Tax, and the agency (if any) charged with the collection of such Tax for such
entity or subdivision, including any governmental or quasi-governmental

 

6

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entity or agency that imposes, or is charged with collecting, social security or
similar charges or premiums.

 

II.  ASSETS CONVEYED

 

The Assets shall be comprised of all of Assignor’s right, title and interest in
and to or derived from the following, except to the extent constituting Excluded
Assets:

 

(a)                                  any and all interests owned by Assignor in
and to the oil, gas and/or mineral leases set forth on Exhibit “A-1” (“the
Leases”), including any overriding royalty interests, net profit interests,
working interests, reversionary interests, and any other interests of Assignor
in said oil, gas and/or mineral leases, or the lands covered by said Leases;

 

(b)                                 all right, title and interest of Assignor in
and to or derived from the following insofar as the same do not constitute
Excluded Assets and are attributable to, appurtenant to, incidental to, or used
for the operation of the Leases (collectively, “the Real Property, Personal
Property and Incidental Rights”):

 

(1)                                  all fee interests and surface estate
interests described on Exhibit “A-5”;

 

(2)                                  all easements, rights-of-way, surface
leases, permits, licenses, servitudes or other interests relating to the use of
the surface, including but not limited to those described on Exhibit “A-4,” or
in instruments described in Exhibit “A-3”;

 

(3)                                  all wells located on the Assets, or lands
pooled or unitized therewith, including but not limited to those listed on
Exhibit “A-2”, whether or not such wells are producing, active or inactive,
plugged and abandoned, temporarily abandoned, shut-in, injection, disposal,
water supply or otherwise (collectively “the Wells”), along with all equipment
and other personal property, inventory, spare parts, tools, fixtures, pipelines,
dehydration facilities, platforms, tank batteries, appurtenances, and
improvements situated upon the Leases or lands pooled or unitized therewith as
of the Effective Time and used or held for use in connection with the
development or operation of the Leases or the production, treatment, storage,
compression, processing or transportation of crude oil, natural gas, casinghead
gas, condensate, sulphur, natural gas liquids and other liquid or gaseous
hydrocarbons, and all other minerals of every kind and character which may be
covered by or included in the Leases and Assets (“the Hydrocarbons”), from or in
the Wells or the Leases or lands pooled or unitized therewith including, but not
limited to those described on Exhibit “A-2”;

 

(4)                                  all unit agreements, orders and decisions
of state and federal regulatory authorities establishing units, joint operating
agreements, enhanced recovery and injection agreements, farmout agreements and
farmin agreements, options, drilling agreements, exploration agreements,
assignments of operating rights, working interests, subleases and rights above
or below certain footage depths or geological formations, to the extent same is
attributable to the Assets, as of the Effective Time, including but not limited
to those described on Exhibit “A-3”;

 

7

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(5)                                  all contracts, agreements, and title
instruments to the extent attributable to and affecting the Assets in existence
as of the date of execution of this Conveyance, including all Hydrocarbon sales,
purchase, gathering, transportation, treating, marketing, exchange, processing,
disposal and fractionating contracts, joint operating agreements, including but
not limited to those described on Exhibit “A-3”;

 

(6)                                  originals of all lease files, land files,
well files, production records, division order files (including paysheets and
supporting files), abstracts, title opinions, and contract files, insofar as the
same are directly related to the Leases, including, without limitation, all
geological, information and data, to the extent that such data is not subject to
any third party restrictions, but excluding Assignor’s proprietary
interpretations of same; and

 

(7)                                  the Company books, records and files of
Four Star Development Corporation, a Louisiana Corporation, including but not
limited to, permits, licenses, corporate records, minute book, contracts, title
records, tax records relating solely to the business of the Company, financial,
engineering and safety records;

 

(c)                                  all merchantable oil and condensate (for
oil or liquids in storage tanks, being only that oil or liquids physically above
the top of the inlet connection into such tanks) produced from or attributable
to the Leases prior to the Effective Time which have not been sold by Assignor
and are in storage at the Effective Time (“the Inventory Hydrocarbons”); and

 

(d)                                 all of the issued and outstanding capital
stock of Four Star Development Corporation, a Louisiana Corporation (“the
Shares”).

 

(e)                                  It is the intent of the Parties that this
Conveyance shall, except for the Excluded Assets (as defined in this
Conveyance), assign, transfer and convey all of Assignor’s right, title and
interest in the Assets, and all Hydrocarbons produced therefrom after the
Effective Time, irrespective of whether those Assets and rights are set forth on
the exhibits and schedules attached hereto.

 

III.  EXCLUDED ASSETS

 

There is specifically SAVED, EXCEPTED and RESERVED from this Conveyance, the
following described assets and properties, herein called “Excluded Assets.”  As
used in this Conveyance, the term “Excluded Assets” shall mean the following:

 

(a)                                  (i) all trade credits, accounts receivable,
notes receivable and other receivables attributable to Assignor’s interest in
the Assets with respect to any period of time prior to the Effective Time;
(ii) all deposits, cash, checks in process of collection, cash equivalents and
funds attributable to Assignor’s interest in the Assets with respect to any
period of time prior to the Effective Time; and (iii) all proceeds, benefits,
income or revenues accruing with respect to the Assets prior to the Effective
Time;

 

8

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(b)                                 all corporate, financial, and tax records of
Assignor, and those records subject to attorney/client privilege; however,
Assignee shall be entitled to receive copies of any tax records which directly
relate to any Assumed Obligations, or which are necessary for Assignee’s
ownership, administration, or operation of the Assets;

 

(c)                                  all claims and causes of action of Assignor
arising from acts, omissions or events, or damage to or destruction of the
Asset, occurring prior to the Effective Time; provided, however, Assignor shall
transfer to Assignee all claims and causes of action of Assignor against prior
owners of the Assets or third parties for Environmental Obligations that are not
Retained Obligations;

 

(d)                                 all rights, titles, claims and interests of
Assignor relating to the Assets prior to the Effective Time (i) under any policy
or agreement of insurance or indemnity; (ii) under any bond; or (iii) to any
insurance or condemnation proceeds or awards;

 

(e)                                  all Hydrocarbons produced from or
attributable to the Assets with respect to all periods prior to the Effective
Time, together with all proceeds from or of such Hydrocarbons, except the
Inventory Hydrocarbons and the unsold inventory of gas plant products, if any,
attributable to the Leases as of the Effective Time;

 

(f)                                    claims of Assignor for refund of or loss
carry forwards with respect to production, windfall profit, severance, ad
valorem or any other taxes attributable to any period prior to the Effective
Time, or income or franchise taxes;

 

(g)                                 all amounts due or payable to Assignor as
adjustments or refunds under any contracts or agreements (including take-or-pay
claims) affecting the Assets with respect to any period prior to the Effective
Time;

 

(h)                                 all amounts due or payable to Assignor as
adjustments to insurance premiums related to the Assets with respect to any
period prior to the Effective Time;

 

(i)                                     all proceeds, benefits, income or
revenues accruing (and any security or other deposits made) with respect to the
Assets, and all accounts receivable attributable to the Assets, prior to the
Effective Time;

 

(j)                                     all of Assignor’s intellectual property,
including, but not limited to, proprietary computer software, patents, trade
secrets, copyrights, names, marks and logos; and

 

(k)                                  the Assets identified on Schedule 1.28(j).

 

IV.  OBLIGATIONS ASSUMED BY ASSIGNEE

 

Assignee expressly assumes and agrees to pay, perform, fulfill and discharge the
following obligations (the “Assumed Obligations”), except to the extent included
within those matters which Assignor has agreed to indemnify, defend and hold
Assignee harmless from under Section VI(g) below:

 

9

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(a)                                  the Plugging and Abandonment Obligations;

 

(b)                                 all Environmental Obligations, whether
related to, or arising from, events occurring before or after the Effective
Date, except those specifically included under Section V below as “Retained
Obligations”;

 

(c)                                  all obligations with respect to gas
production, sales or imbalances with third parties;

 

(d)                                 except as otherwise provided in this
Conveyance or in the Agreement, including the Assignor’s obligations to
indemnify, all other liabilities, duties, and obligations that arise out of the
ownership, operation or use of the Assets after the Effective Time, including,
but not limited to, the payment of all operating expenses and capital
expenditures relating to the Assets, all liabilities, duties, and obligations,
express or implied, imposed upon Assignor herein under the provisions of the
Leases and any and all assignments, subleases, farmout agreements, assignments
of overriding royalty, joint operating agreements, easements, rights-of-way, and
all other contracts, agreements and instruments affecting the Leases, or the
premises covered thereby, whether recorded or unrecorded, whether or not
identified on the Exhibits or schedules attached hereto or to the Agreement and
under all applicable laws, rules, regulations, orders and ordinances.

 

V.  OBLIGATIONS RETAINED BY ASSIGNOR

 

As of the Effective Time, Assignor expressly retains and agrees to pay, perform,
fulfill and discharge the following (collectively, “Retained Obligations”):

 

(a)                                  any Environmental Obligation of any nature
related to the Excluded Assets;

 

(b)                                 all Environmental Obligations of any nature
that relate to or arise from events occurring as of the date Assignor acquired
the Assets through the date of execution of this Conveyance;

 

(c)                                  Claims for personal injury or wrongful
death occurring prior to the Effective Time;

 

(d)                                 responsibility to any governmental agency
for any offsite storage and disposal by Assignor, prior to the Effective Time,
of hazardous materials produced from the Assets, and stored or disposed of, on,
in or below any property which does not form a part of the Assets, for which and
to the extent that remediation is required by any environmental or conservation
law in effect as of the Effective Time; for purposes of this subpart “(d),”
“offsite storage and disposal” shall not include the seepage, leakage or other
migration of hazardous materials from the property forming part of the Assets to
other lands;

 

(e)                                  responsibility and liability for the
litigation and threatened litigation listed on Exhibit “F,” and the Claims
thereunder; and

 

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(f)                                    except as otherwise provided in this
Conveyance or the Agreement, all other liabilities, duties, and obligations that
arise out of the ownership, operation or use of the Assets prior to the
Effective Time, including, but not limited to, the payment of all operating
expenses and capital expenditures relating to the Assets, all liabilities,
duties, and obligations, express or implied, imposed upon Assignor herein under
the provisions of the Leases and any and all assignments, subleases, farmout
agreements, assignments of overriding royalty, joint operating agreements,
easements, rights-of-way, and all other contracts, agreements and instruments
affecting the Leases, or the premises covered thereby, whether recorded or
unrecorded, whether identified or not on the Exhibits or Schedules attached
hereto or to the Agreement and under all applicable laws, rules, regulations,
orders and ordinances.

 

VI.  LIMITED WARRANTIES, WAIVERS AND INDEMNIFICATIONS

 

(a)                                  THIS CONVEYANCE IS MADE WITHOUT WARRANTY OF
TITLE, EITHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, AND WITHOUT RECOURSE,
EVEN AS TO THE RETURN OF THE PURCHASE PRICE OR OTHER CONSIDERATION, EXCEPT THAT,
SUBJECT TO THE PERMITTED ENCUMBRANCES, ASSIGNOR WARRANTS TITLE TO THE ASSETS
AGAINST ALL CLAIMS, LIENS, BURDENS AND ENCUMBRANCES ARISING BY, THROUGH OR UNDER
ASSIGNOR, BUT NOT OTHERWISE AND NOT WITH RESPECT TO ANY IMPAIRMENT OR FAILURE OF
TITLE RELATED TO ANY LACK OF PRODUCTION IN PAYING QUANTITIES.  THIS CONVEYANCES
IS MADE WITH FULL SUBSTITUTION AND SUBROGATION TO ASSIGNEE IN AND TO ALL
COVENANTS AND WARRANTIES BY OTHERS HERETOFORE GIVEN OR MADE TO ASSIGNOR WITH
RESPECT TO THE ASSETS.

 

(b)                                  ASSIGNEE ACKNOWLEDGES AND AGREES THAT,
EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THE AGREEMENT, NEITHER ASSIGNOR NOR
ASSIGNOR’S PARENT MAKES ANY REPRESENTATION OR WARRANTY, EXPRESS, STATUTORY,
IMPLIED OR OTHERWISE WITH RESPECT TO THE COMPANY AND THE ASSETS.  ASSIGNOR, FOR
ITSELF AND ITS PARENT, HEREBY EXPRESSLY DISCLAIMS ANY AND ALL REPRESENTATIONS
AND WARRANTIES ASSOCIATED WITH THE COMPANY, OR THE ASSETS, EXPRESS, STATUTORY,
IMPLIED OR OTHERWISE, INCLUDING ANY REPRESENTATION OR WARRANTY REGARDING: 
(A) TITLE (EXCEPT AS PROVIDED IN SECTION VI(a) ABOVE, (B) ANY COSTS, EXPENSES,
REVENUES, RECEIPTS, ACCOUNTS RECEIVABLE, OR ACCOUNTS PAYABLE, (C) ANY
CONTRACTUAL, ECONOMIC OR FINANCIAL INFORMATION AND DATA ASSOCIATED WITH THE
COMPANY, OR THE ASSETS, (D) THE CONTINUED FINANCIAL VIABILITY OR PRODUCTIVITY OF
THE COMPANY OR THE ASSETS OR TRANSPORTABILITY OF PRODUCT, (E) THE ENVIRONMENTAL
OR PHYSICAL CONDITION OF THE ASSETS, (F) ANY FEDERAL, STATE, LOCAL OR TRIBAL
INCOME OR OTHER TAX CONSEQUENCES ASSOCIATED WITH THE COMPANY AND THE ASSETS,
(G) THE ABSENCE OF PATENT OR LATENT DEFECTS, (H) THE STATE OF REPAIR OF THE
ASSETS, (I) MERCHANTABILITY OR CONFORMITY TO MODELS, (J) ANY RIGHTS OF ANY
MEMBER OF

 

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ASSIGNEE GROUP UNDER APPROPRIATE LAWS TO CLAIM DIMINUTION OF CONSIDERATION OR
RETURN OF THE PURCHASE PRICE, (K) FREEDOM FROM PATENTS, COPYRIGHT OR TRADEMARK
INFRINGEMENT, (L) FITNESS FOR A PARTICULAR PURPOSE, AND (M) PRODUCTION RATES,
RECOMPLETION OPPORTUNITIES, DECLINE RATES, GAS BALANCING INFORMATION OR THE
QUALITY, QUANTITY OR VOLUME OF THE RESERVES OF HYDROCARBONS, IF ANY,
ATTRIBUTABLE TO THE ASSETS.

 

(c)                                  THE EXPRESS REPRESENTATIONS AND WARRANTIES
OF ASSIGNOR CONTAINED IN THIS CONVEYANCE ARE EXCLUSIVE AND ARE IN LIEU OF ALL
OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, INCLUDING,
WITHOUT LIMITATION, ANY REPRESENTATION OR WARRANTY WITH RESPECT TO THE QUALITY,
QUANTITY OR VOLUME OF THE RESERVES, IF ANY, OF OIL, GAS OR OTHER HYDROCARBONS IN
OR UNDER THE LEASES, OR THE ENVIRONMENTAL CONDITION OF THE ASSETS.  THE ITEMS OF
PERSONAL PROPERTY, EQUIPMENT, IMPROVEMENTS, FIXTURES AND APPURTENANCES CONVEYED
AS PART OF THE ASSETS ARE SOLD HEREUNDER “AS IS, WHERE IS, AND WITH ALL FAULTS”
AND NO WARRANTIES OR REPRESENTATIONS OF ANY KIND OR CHARACTER, EXPRESS OR
IMPLIED, INCLUDING ANY WARRANTY OF QUALITY, MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE OR CONDITION, ARE GIVEN BY OR ON BEHALF OF ASSIGNOR.  IT IS
UNDERSTOOD AND AGREED THAT ASSIGNEE HAS INSPECTED THE ASSETS FOR ALL PURPOSES
AND HAS SATISFIED ITSELF AS TO THEIR PHYSICAL AND ENVIRONMENTAL CONDITION, BOTH
SURFACE AND SUBSURFACE, AND THAT ASSIGNEE ACCEPTS SAME IN ITS “AS IS, WHERE IS
AND WITH ALL FAULTS” CONDITION.  ASSIGNEE HEREBY WAIVES ALL WARRANTIES, EXPRESS
OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR CONDITION, OR CONFORMITY TO
SAMPLES.

 

(d)                                  THE EXPRESS REPRESENTATIONS AND WARRANTIES
OF ASSIGNOR CONTAINED IN THIS CONVEYANCE ARE EXCLUSIVE AND ARE IN LIEU OF ALL
OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, INCLUDING,
WITHOUT LIMITATION, THE WARRANTY OF FITNESS FOR INTENDED PURPOSES OR GUARANTEE
AGAINST HIDDEN OR LATENT REDHIBITORY VICES UNDER LOUISIANA LAW, INCLUDING
LOUISIANA CIVIL CODE ARTICLES 2520 (1870) THROUGH 2548 (1870), AND THE WARRANTY
IMPOSED BY LOUISIANA CIVIL CODE ARTICLE 2476; AND ASSIGNEE EXPRESSLY WAIVES THE
WARRANTY OF FITNESS FOR INTENDED PURPOSES OR GUARANTEE AGAINST HIDDEN OR LATENT
REDHIBITORY VICES UNDER LOUISIANA LAW, INCLUDING LOUISIANA CIVIL CODE ARTICLES
2520 THROUGH 2548, AND THE WARRANTY IMPOSED BY LOUISIANA CIVIL CODE ARTICLE
2475; ASSIGNEE WAIVES ALL RIGHTS IN REDHIBITION PURSUANT TO LOUISIANA CIVIL CODE
ARTICLE 2520, ET SEQ; ASSIGNEE ACKNOWLEDGES THAT THIS EXPRESS WAIVER IS A
MATERIAL

 

12

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AND INTEGRAL PART OF THIS SALE AND THE CONSIDERATION THEREOF; AND ASSIGNEE
ACKNOWLEDGES THAT THIS WAIVER HAS BEEN BROUGHT TO THE ATTENTION OF ASSIGNEE AND
EXPLAINED IN DETAIL AND THAT ASSIGNEE HAS VOLUNTARILY AND KNOWINGLY CONSENTED TO
THIS WAIVER OF WARRANTY OF FITNESS AND/OR WARRANTY AGAINST REDHIBITORY VICES AND
DEFECTS FOR THE ABOVE DESCRIBED PROPERTY.

 

(e)                                  TO THE EXTENT APPLICABLE TO THE ASSETS OR
ANY PORTION THEREOF, ASSIGNEE HEREBY VOLUNTARILY WAIVES THE PROVISIONS OF THE
TEXAS DECEPTIVE TRADE PRACTICES ACT (DTPA), CHAPTER 17, SUBCHAPTER E, SECTIONS
17.41 THROUGH 17.63, INCLUSIVE (OTHER THAN SECTION 17.555, WHICH IS NOT WAIVED),
TEX. BUS. & COM. CODE, A LAW THAT GIVES CONSUMERS SPECIAL RIGHTS AND
PROTECTIONS.  IN ORDER TO EVIDENCE ITS ABILITY TO GRANT SUCH WAIVER, ASSIGNEE
HEREBY REPRESENTS AND WARRANTS TO ASSIGNOR THAT IT (i) IS IN THE BUSINESS OF
SEEKING OR ACQUIRING, BY PURCHASE OR LEASE, GOODS OR SERVICES FOR COMMERCIAL OR
BUSINESS USE; (ii) HAS CONSULTED WITH AN ATTORNEY OF ASSIGNEE’S OWN CHOOSING;
(iii) HAS KNOWLEDGE AND EXPERIENCE IN FINANCIAL, BUSINESS AND OIL AND GAS
MATTERS THAT ENABLE IT TO EVALUATE THE MERITS AND RISKS OF THE TRANSACTIONS
CONTEMPLATED HEREBY; (iv) IS NOT IN A SIGNIFICANTLY DISPARATE BARGAINING
POSITION; AND (v) UNDERSTANDS THAT THIS WAIVER IS A MATERIAL AND INTEGRAL
PART OF THIS CONVEYANCE AND THE CONSIDERATION THEREOF.  IN ADDITION, ASSIGNEE
WAIVES ITS RIGHTS UNDER ALL OTHER CONSUMER PROTECTION STATUTES OF TEXAS OR ANY
OTHER STATE APPLICABLE TO THIS TRANSACTION THAT MAY BE WAIVED INCLUDING BUT NOT
LIMITED TO THE LOUISIANA UNFAIR TRADE PRACTICES AND CONSUMER PROTECTION LAW, LA.
R.S. 51:1402, ET SEQ. (THE “UTPCPL”). ASSIGNEE EXPRESSLY RECOGNIZES THAT THE
PURCHASE PRICE FOR WHICH ASSIGNOR HAS AGREED TO PERFORM ITS OBLIGATIONS UNDER
THIS CONVEYANCE HAS BEEN PREDICATED UPON THE INAPPLICABILITY OF THE DTPA AND THE
UTPCPL, AND THE WAIVER OF ASSIGNEE OF ITS RIGHTS UNDER CONSUMER PROTECTION
STATUTES AND ASSIGNEE FURTHER RECOGNIZES THAT ASSIGNOR IN DETERMINING TO PROCEED
WITH THE ENTERING INTO OF THIS CONVEYANCE, HAS EXPRESSLY RELIED ON THIS WAIVER
AND THE INAPPLICABILITY OF THE DTPA, THE UTPCPL AND THE CONSUMER PROTECTION
STATUTES.

 

(f)                                    ASSIGNEE AGREES TO INDEMNIFY, DEFEND AND
HOLD ASSIGNOR, ASSIGNOR’S GROUP AND ASSIGNOR’S EMPLOYEES, OFFICERS AND DIRECTORS
HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS, LOSSES, DAMAGES, PUNITIVE
DAMAGES, COSTS, EXPENSES, CAUSES OF ACTION OR JUDGMENTS OF ANY KIND OR CHARACTER
INCLUDING, WITHOUT LIMITATION, ANY INTEREST, PENALTY, REASONABLE ATTORNEYS’ FEES
AND OTHER COSTS AND EXPENSES INCURRED IN CONNECTION THEREWITH OR THE DEFENSE
THEREOF (COLLECTIVELY THE “CLAIMS”), WITH RESPECT TO ALL LIABILITIES AND
OBLIGATIONS OR

 

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ALLEGED OR THREATENED LIABILITIES AND OBLIGATIONS CAUSED BY, RELATED TO,
ATTRIBUTABLE TO, OR ARISING OUT OF THE ASSUMED OBLIGATIONS.  THE DEFENSE AND
INDEMNITY OBLIGATIONS PROVIDED BY THIS SECTION SHALL APPLY REGARDLESS OF THE
SOLE OR PARTIAL OR COMPARATIVE OR CONCURRENT OR OTHER FAULT, NEGLIGENCE OR
STRICT, PRE-EXISTING OR OTHER LIABILITY ON THE PART OF ASSIGNOR.  ADDITIONALLY,
THE DEFENSE AND INDEMNITY OBLIGATIONS PROVIDED BY THIS SECTION SHALL APPLY
REGARDLESS OF THE NATURE OF THE OBLIGATIONS OF ASSIGNOR, BE THEY IN TORT,
CONTRACT, QUASI-CONTRACT, STATUTORY, OR OTHERWISE.

 

(g)                                 ASSIGNOR AGREES TO INDEMNIFY, DEFEND AND
HOLD ASSIGNEE AND ASSIGNEE’S EMPLOYEES, OFFICERS AND DIRECTORS HARMLESS FROM AND
AGAINST ANY AND ALL CLAIMS WITH RESPECT TO ALL LIABILITIES AND OBLIGATIONS OR
ALLEGED OR THREATENED LIABILITIES AND OBLIGATIONS CAUSED BY, RELATED TO,
ATTRIBUTABLE TO, OR ARISING OUT OF THE RETAINED OBLIGATIONS.  THE DEFENSE AND
INDEMNITY OBLIGATIONS PROVIDED BY THIS SECTION SHALL APPLY REGARDLESS OF THE
SOLE OR PARTIAL OR COMPARATIVE OR CONCURRENT OR OTHER FAULT, NEGLIGENCE OR
STRICT, PRE-EXISTING OR OTHER LIABILITY ON THE PART OF ASSIGNEE.  ADDITIONALLY,
THE DEFENSE AND INDEMNITY OBLIGATIONS PROVIDED BY THIS SECTION SHALL APPLY
REGARDLESS OF THE NATURE OF THE OBLIGATIONS OF ASSIGNEE, BE THEY IN TORT,
CONTRACT, QUASI-CONTRACT, STATUTORY, OR OTHERWISE.

 

(h)                                 THE PARTIES HERETO BOTH AGREE AND STIPULATE
THAT THEY HAVE ACTUAL KNOWLEDGE OF ALL INDEMNITY PROVISIONS HEREIN, THAT THEY
ARE FAMILIAR WITH THE EXPRESS NEGLIGENCE TEST, THAT THIS DEFENSE AND
INDEMNIFICATION AGREEMENT COMPLIES WITH THE EXPRESS NEGLIGENCE TEST, THAT THE
PARTIES CLEARLY INTEND TO TRANSFER THE RISK OF LOSS FOR THE INDEMNITEE’S
NEGLIGENCE, FAULT AND OTHER LIABILITIES AND OBLIGATIONS AS SET FORTH ABOVE TO
ASSIGNEE, AND THAT THESE INDEMNIFICATION PROVISIONS ARE CONSPICUOUS.

 

(i)                                    Each Party hereby agrees to indemnify and
hold the other harmless from and against any claim for a brokerage or finder’s
fee or commission in connection with this Conveyance or the transactions
contemplated by this Conveyance to the extent such claim arises from or is
attributable to the actions of such indemnifying Party, including, without
limitation, any and all losses, damages, punitive damages, attorneys’ fees,
costs and expenses of any kind or character arising out of or incurred in
connection with any such claim or defending against the same.

 

(j)                                    The amount of any Claims for which any
party is entitled to indemnification under this Conveyance shall be reduced by
any corresponding (1)  tax benefit created or

 

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generated or (2)  insurance proceeds realized by such party if a claim were
properly pursued under the relevant insurance arrangements.

 

(k)                                Each of the Parties expressly waives and
agrees not to, and to cause the members of the Assignee Group in the case of
Assignee and the members of the Assignor Group in the case of Assignor not to,
seek indirect, consequential, punitive or exemplary damages or damages for lost
profits of any kind with respect to any dispute arising under, related to, or in
connection with this Conveyance or breach hereof (except such damages that are
payable to a third party with respect to a third party claim for which any
Person is seeking indemnification hereunder).  The Parties agree that no
indemnified Person shall be entitled to any such damages under this Conveyance.

 

(l)                                    Without limiting or enlarging the scope
of the indemnification, disclaimer and assumption obligations set forth in this
Conveyance, to the fullest extent permitted by Law, an indemnified Person shall
be entitled to indemnification hereunder in accordance with the terms hereof,
regardless of whether the indemnifiable loss giving rise to any such
indemnification obligation is the result of the sole, active, passive,
concurrent or comparative negligence, strict liability or other legal fault or
violation of any Law of or by any such indemnified Person.  Assignee and
Assignor acknowledge that this statement complies with the express negligence
rule and is conspicuous.

 

(m)                              The Parties acknowledge and agree that the
provisions of any anti-indemnity statute relating to oilfield services and
associated activities shall not be applicable to this Conveyance or the
transactions contemplated hereby.

 

(n)                                 Assignor and Assignee acknowledge that the
payment of money, as limited by the terms of this Conveyance and/or the
Agreement, shall be adequate compensation for breach of any representation,
warranty, covenant or agreement contained herein or for any other claim arising
in connection with or with respect to the transactions contemplated in this
Conveyance and/or the Agreement.  As the payment of money shall be adequate
compensation, Assignee and Assignor waive any right to rescind this Conveyance
and/or the Agreement or any of the transactions contemplated by this Conveyance
and/or the Agreement.

 

(o)                                 Any demand for indemnity hereunder shall be
made by written notice, together with a written description of any Claims
asserted stating the nature and basis of such Claim and, if ascertainable, the
amount thereof.  The Party upon whom notice is served shall have a period of
twenty (20) days after receipt of such notice within which to respond thereto
or, in the case of an underlying demand which requires a shorter time for
response, then within such shorter period as specified in such notice (the
“Notice Period”).  If the Party upon whom notice is served denies liability or
fails to provide the defense for any Claim, the other Party may defend or
compromise the Claim as it deems appropriate.  If the Party upon whom notice is
served accepts liability and responsibility for the defense of any Claim, it
shall so notify the other Party as soon as is practicable prior to the
expiration of the Notice Period and undertake the defense or compromise of such
Claim with counsel selected by the Party accepting such liability.  If the Party
on whom notice is served undertakes the defense or compromise of such Claim, the
other Party shall be entitled, at its own expense, to participate in such
defense.  No compromise or

 

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settlement of any Claim shall be made without reasonable notice to the other
Party, and without the prior written approval of the other Party, which approval
shall not be unreasonably withheld or delayed.  No such approval shall be
withheld if such compromise or settlement includes a general and complete
release of the other Party, its successors, assigns, Affiliates and their
respective Representatives in respect of the matter, with prejudice, and with no
express or written admission of liability on the part of the other Party, its
Affiliates and their respective Representatives, and is without cost or
liability and has no constraints on the future conduct of its or their
respective businesses. Assignee and Assignor acknowledge that their obligations
to indemnify, defend and hold the other Party and its Affiliates harmless under
this Agreement include obligations to pay the attorneys’ fees and court and
arbitral costs incurred by the other Party and its Affiliates in defending said
Claims, regardless of the merits of said Claims, where the Party to whom notice
is served hereunder denies liability or fails to provide the defense for any
said Claim.  Assignor and Assignee shall have the right at all times to
participate, at their sole cost, in the preparation for any defense, hearing or
trial related to the indemnities set forth in this Agreement, as well as the
right to appear on their own behalf or to retain separate counsel to represent
them at any such hearing or trial.

 

VII.  MISCELLANEOUS PROVISIONS

 

(a)                                  Governing Law.  THIS CONVEYANCE SHALL BE
GOVERNED, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
LOUISIANA, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS OTHERWISE
APPLICABLE TO SUCH DETERMINATIONS.  IN THE EVENT OF ANY DISPUTE WITH RESPECT TO
THIS CONVEYANCE, THE RESOLUTION THEREOF SHALL BE SUBJECT TO AND GOVERNED BY THE
PROVISIONS OF SECTION 18.2 OF THE AGREEMENT.

 

(b)                                 Captions.  The captions in this Conveyance
are for convenience only and shall not be considered a part of or affect the
construction or interpretation of any provision of this Conveyance.

 

(c)                                  Ejusdem Generis  The word “includes” and
“including” and their syntactical variants mean “includes, but not limited to”
and its corresponding syntactical variants.  The rule of ejusdem generis may not
be invoked to restrict or limit the scope of the general term or phrase followed
or proceeded by an enumeration of particular examples.

 

(d)                                 No Ratification.  Recitation of or reference
to any agreement or other instrument in this Conveyance, including its exhibits,
does not operate to ratify, confirm, revise, or reinstate the agreement or
instrument if it has previously lapsed or expired.

 

(e)                                  Not to be Construed Against Drafter. 
Assignor and Assignee acknowledge that they have read this Conveyance, have had
the opportunity to review it with an attorney of their respective choice, and
have agreed to all its terms.  Under these circumstances, Assignee and Assignor
agree that the rule of construction that a contract be construed against the
drafter shall not be applied in interpreting this Conveyance and that in the
event of any ambiguity in any of the terms or conditions of this Conveyance,
including any exhibits hereto and whether or not

 

16

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placed of record, such ambiguity shall not be construed for or against any party
hereto on the basis that such party did or did not author the same.

 

(f)                                    Waiver of Jury Trial.  ASSIGNOR AND
ASSIGNEE DO HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW,
ANY AND ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, SUIT OR OTHER LEGAL
PROCEEDING BASED UPON, ARISING OUT OF OR RELATING TO THIS CONVEYANCE, THE RIGHTS
AND OBLIGATIONS UNDER THIS CONVEYANCE OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

(g)                                 Express Negligence Rule; Conspicuousness.
ASSIGNOR AND ASSIGNEE ACKNOWLEDGE THAT THE PROVISIONS IN THIS CONVEYANCE THAT
ARE SET OUT IN ITALICS, IN BOLD, UNDERLINE OR CAPITALS (OR ANY COMBINATION
THEREOF) SATISFY THE REQUIREMENTS FOR THE EXPRESS NEGLIGENCE RULE AND/OR ARE
CONSPICUOUS.

 

(h)                                 Counterparts.  This Conveyance may be
executed in one or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument.

 

(i)                                     Compliance with Laws.  Assignee shall
comply with all current and subsequently amended applicable laws, ordinances,
rules, and regulations applicable to the Assets and shall promptly obtain and
maintain all permits required by governmental authorities in connection with the
Assets.

 

(j)                                     Recognition.  Assignee will take all
necessary steps to ensure that Assignee is recognized as the owner of the
Assets, as provided herein, by all appropriate parties, including any regulatory
commission, body or board or jurisdiction.

 

(k)                                  Purchase and Sale Agreement. This
Conveyance is subject to the terms and conditions of the Agreement.  The
Agreement remains in force and effect in accordance with its terms and is not
intended to be, and is not, merged into this Conveyance.  In the event of a
conflict or inconsistency between the terms and provisions of this Conveyance
and the Agreement, the terms of the Agreement shall control.

 

(l)                                     Further Assurances.  Each of the Parties
will execute, acknowledge and deliver to the other such further instruments, and
take such other action, as may be reasonably requested in order to more
effectively assure to said Party all of the respective properties, rights,
titles, interests, estates, and privileges intended to be assigned, delivered or
inuring to the benefit of such Party in consummation of the transactions
contemplated hereby.  Without limiting the foregoing, in the event Exhibits
“A-1” through “A-5” incorrectly or insufficiently describe or reference an
interest intended to be conveyed hereby, Assignor agrees to, within twenty (20)
days of Assignor’s receipt of Assignee’s written request, together with
supporting documentation satisfactory to Assignor, correct such Exhibit and/or
execute an amended assignment or other appropriate instruments necessary to
transfer the property or interest intended to be conveyed hereby to Assignee.

 

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(m)                               Exhibits.  All exhibits and schedules attached
to this Conveyance, and the terms of those exhibits and schedules which are
referred to in this Conveyance, are made a part hereof and incorporated herein
by reference.  References in such exhibits or schedules to instruments on file
in the public records are made for all purposes.  Unless provided otherwise, all
recording references in such exhibits or schedules are to the appropriate
records of the County/Parish or Counties/Parishes in which the Assets are
located.

 

(n)                                 Unenforceability.  If any provision of this
Conveyance is found by a court of competent jurisdiction to be invalid or
unenforceable, that provision will be deemed modified to the extent necessary to
make it valid and enforceable, and if it cannot be so modified, it shall be
deemed deleted and the remainder of the Conveyance shall continue and remain in
full force and effect.

 

(o)                                 Covenants Running with the Land.  All the
terms, provisions, covenants, obligations, indemnities, representations,
warranties and conditions of this Conveyance shall be covenants running with the
land and shall inure to the benefit of and be binding upon, and shall be
enforceable by, the parties hereto and their respective successors and assigns,
subject to the requirements of this Section VII(o).  Any subsequent transfer of
all or any part of the Assets conveyed and assigned herein shall be made
expressly subject to the terms and provisions of this Conveyance and the
Agreement.  In the event Assignee sells, assigns or otherwise transfers all or a
portion of the Assets, (i) this Conveyance and the Agreement shall remain in
effect between Assignee and Assignor as to all the Assets regardless of such
sale, assignment or transfer (and Assignee shall not be thereby released, but
shall remain obligated hereunder), (ii) Assignee shall require its successors
and assigns expressly to assume its duties, responsibilities and obligations
under this Conveyance and the Agreement, to the extent related or applicable to
the Assets or the portion thereof acquired by them, but such assumption shall
not release Assignee from any such assumed obligations, and (iii) Assignee shall
obtain Assignor’s prior written consent.  Any sale, assignment or other transfer
of the Leases or other Assets shall also contain such other language as is
necessary to satisfy the terms and provisions of such Leases or the agreements
applicable to such Assets.

 

(p)                                 Notices.  Except as otherwise expressly
provided herein, all communications required or permitted under this Conveyance
shall be in writing and may be given by personal delivery, facsimile, US mail
(postage prepaid), or commercial delivery service, and any communication
hereunder shall be deemed to have been duly given and received when actually
delivered to the address of the Parties to be notified as set forth below and
addressed as follows:

 

If to Assignor, as follows:

 

 

 

NGS Sub. Corp.

 

2500 City West Blvd, Suite 1300

 

Houston, Texas 77042

 

Attention: Robert S. Herlin, President

Facsimile:

713-935-0199

Confirm:

713-935-0122

 

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With a copy to:

 

 

 

Mark A. Mathews

 

Adams and Reese LLP

 

4400 One Houston Center

 

1221 McKinney

 

Houston, Texas 77010

Facsimile:

713-652-5152

Confirm:

713-652-5151

 

If to Assignee, as follows:

 

 

 

MWM Energy, LLC

 

114 30th Avenue South

 

Nashville, Tennessee 37212

 

Attention: Stephen F. Moore, CEO

Facsimile:

615-340-5391

Confirm:

615-340-5389

 

With copies to:

 

 

 

Gary Wadkins

 

5100 Sweetbriar Lane, Suite 121

 

Tyler, Texas 75703

Facsimile:

903-534-6005

Confirm:

903-534-2944

 

RR Advisors, LLC

 

21 Waterway, Suite 300

 

The Woodlands, Texas 77380

Attention:

W. Mark Meyer

Facsimile:

214-871-8644

Confirm:

832-287-8523

 

 

Charles Robert Bone

Bone McAllester Norton PLLC

511 Union Street, Suite 1600

Nashville, Tennessee 37219

Facsimile:

615-238-6301

Confirm:

615-238-6301

 

Provided, however, that any notice required or permitted under this Conveyance
will be effective if given verbally within the time provided, so long as such
verbal notice is followed by written notice thereof in the manner provided
herein within twenty-four (24) hours following the end of such time period.  Any
Party may, by written notice so delivered to the other, change the address to
which delivery shall thereafter be made.

 

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(q)                                 Filing and Recording of Assignments, etc. 
Assignee shall be solely responsible for all filings and the prompt recording of
assignments and other documents related to the transfer of the Assets as
contemplated hereunder, including but not limited to this Conveyance, and for
all fees connected therewith, and Assignee shall furnish certified copies of all
such filed and/or recorded documents to Assignor.  Assignor shall not be
responsible for any loss to Assignee because of Assignee’s failure to file or
record documents, including but not limited to this Conveyance, correctly or
promptly.  Assignee shall promptly file all appropriate forms, declarations or
bonds with federal and state agencies relative to its assumption of operations
and Assignor shall cooperate with Assignee in connection with such filings. 
Assignee shall also comply with all notice provisions contained in the Leases or
otherwise applicable to the transfer of the Assets.

 

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

 

IN WITNESS WHEREOF, the undersigned have executed this instrument on the dates
of the respective acknowledgments annexed hereto, but effective as of the
above-stated Effective Time.

 

 

 

ASSIGNOR:

 

NGS SUB. CORP.

 

 

 

By:

 

 

 

 

 

Title:

 

 

 

 

 

 

 

 

 

ASSIGNEE:

 

MWM ENERGY, LLC

 

 

 

By:

 

 

 

 

 

Title:

 

 

 

20

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STATE OF TEXAS

 

COUNTY OF HARRIS

 

On this         day of March, 2008, before me personally appeared
                                            , to me personally known, who, being
by me duly sworn, did say that he is the                                     of
NGS SUB. CORP., a Delaware corporation and that the foregoing instrument was
signed and delivered on behalf of such corporation and that he acknowledged the
instrument to be the free act and deed of said corporation.

 

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

 

 

 

 

 

 

 

Notary Public in and for the State of Texas

 

 

STATE OF TEXAS

 

COUNTY OF HARRIS

 

On this            day of March, 2008, before me personally came and appeared
                                             to me known, who, being by me duly
sworn, did say that he is the                                  of MWM Energy,
LLC, a Texas limited liability company, that he signed the foregoing instrument
on behalf of said limited liability company and as the free act and deed of said
limited liability company.

 

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

 

 

 

 

 

 

 

Notary Public in and for the State of Texas.

 

21

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Exhibit “A-1”

 

Attached to and made a part of that certain

Assignment, Conveyance and Bill of Sale dated effective February 1, 2008

by and between NGS Sub. Corp., as Assignor, and

MWM Energy, LLC, as Assignee

 

LEASES

 

Being the following oil and gas leases described in that certain Act of Sale and
Assignment dated September 2, 2004 from Atkins Production, Inc., et al to NGS
Sub. Corp., as recorded in Book 291, Page 179 of the Conveyance Records of
LaSalle Parish, Louisiana, more fully described as follows, to-wit:

 

1.                                       Oil, gas and mineral lease executed by
William E. Zimmerman in favor of W.S. Ezell of date April 18, 1925, recorded at
Oil and Gas Lease Book 3, Page 14, Registry 1333 of the records of LaSalle
Parish, Louisiana, insofar as the said lease covers the following described
property, to-wit: The Northeast Quarter of the Southwest Quarter of Section 25,
Township 10 North, Range 1 East, LaSalle Parish, Louisiana.

 

Lexington – Zimmerman #1 – 100’ North and 226’ West from the SE Corner of NE/4
of Section 25, Township 10 North, Range 1 East, LaSalle Parish, Louisiana

Lexington – Zimmerman #2 – 440’ North and 100’ West from the SE Corner of NE/4
of SW/4 of Section 25, Township10 North, Range 1 East, LaSalle Parish, Louisiana

Lexington – Zimmerman #3 – 669’ North and 115’ West from the SE corner of NE/4
of SW/4 of Section 25, Township 10 North, Range 1 East, LaSalle Parish,
Louisiana

Lexington – Zimmerman #4– 490’North and 290’ West from the SE corner of NE/4 of
SW/4 of Section 25, Township 10 North, Range 1 East, LaSalle Parish, Louisiana

Lexington – Zimmerman #5– 327’ North and 430’ West from the SE corner of NE/4 of
SW/4 of Section 25, Township 10 North, Range 1 East, LaSalle Parish, Louisiana

Lexington – Zimmerman #6– 100’ North and 630’ West from the SE corner of NE/4 of
SW/4 of Section 25, Township 10 North, Range 1 East, LaSalle Parish, Louisiana

Lexington – Zimmerman #7– 300’ North and 630’ West from the SE corner of NE/4 of
SW/4 of Section 25, Township 10 North, Range 1 East, LaSalle Parish, Louisiana

 

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Lexington – Zimmerman #8– 387’ North and 788’ West from the SE corner of NE/4 of
SW/4 of Section 25, Township 10 North, Range I East, LaSalle Parish, Louisiana

Lexington – Zimmerman #14– 505’ South and 1217’ West from the NE corner of NE/4
of SW/4 of Section 25, Township 10 North, Range 1 East, LaSalle Parish,
Louisiana

Lexington – Zimmerman #15– 345’ South and 1095’ West from the NE corner of NE/4
of SW/4 of Section 25, Township 10 North, Range 1 East, LaSalle Parish,
Louisiana

Lexington – Zimmerman #16– 100’ South and 1135’ West from the NE corner of NE/4
of SW/4 of Section 25, Township 10 North, Range 1 East, LaSalle Parish,
Louisiana

Lexington – Zimmerman #17– 258’ South and 552’ West from the NE corner of NE/4
of SW/4 of Section 25, Township 10 North, Range 1 East, LaSalle Parish,
Louisiana

Lexington – Zimmerman #18– 245’ South and 300’ West from the NE corner of NE/4
of SW/4 of Section 25, Township 10 North, Range I East, LaSalle Parish,
Louisiana

 

2.                                  (Hardtner “A” Lease) Oil, gas and mineral
lease executed by the Urania Lumber Company in favor of Southern Carbon Company
of date January 23, 1923, and recorded at Oil and Gas Lease Book 2, Page 449,
Registry 069784 of the records of LaSalle Parish, Louisiana, insofar as the said
lease covers the following described property to-wit: The Southeast Quarter of
the Southeast Quarter of Section 7, Township 10 North, Range 2 East, LaSalle
Parish, Louisiana.

 

3.                                  (Hardtner “C” Lease) Oil, gas and mineral
lease executed by the Urania Lumber Company in favor of S.M. Collins and A.
Gibbons of date November 27, 1922, recorded at Oil and Gas Lease Book 2,
Page 18, Registry 06608 of the records of LaSalle Parish, Louisiana, insofar as
the said lease covers the following described property, to-wit: That portion of
the Northwest Quarter of the Northeast Quarter of Section 18, Township 10 North,
Range 2 East, lying south and east of the Iron Mountain Railway Company
railroad.

 

4.                                       (Urania A, B, C and Hardtner-Edenborn
lease) Oil, gas and mineral lease executed by Q.T. Hardtner, Jr., et al, in
favor of Ed Alexander of date October 26, 1972, recorded at Oil and Gas Lease
Book 36, Page 392, Registry 91253 of the records of LaSalle Parish, Louisiana,
insofar as the above described lease covers the following described property,
to-wit:

 

2

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Township 10 North – Range 2 East

 

Section 19:

 

NE/4 of NW/4 of NE/4;

NW/4 of SE/4 of NW/4 of NE/4;

SE/4 of SE/4 of NW/4 of NE/4;

NW/4 of SW/4 of NE/4;

NW/4 of NE/4 of NW/4 of SE/4;

NE/4 of NE/4 of NW/4 of SE/4;

SE/4 of NE/4 of NW/4 of SE/4;

SW/4 of SW/4 of NW/4 of E/4;

S/2 of NW/4 of SE/4 of NE/4;

SW/4 of NE/4 of SE/4 of NE/4;

NE/4 of SW/4 of NE/4 of SE/4;

E/2 of SW/4 of NE/4;

SW/4 of SE/4 of NW/4 of NE/4;

NW/4 of SW/4 of NE/4 of SE/4;

NE/4 of SW/4 less the NW/4;

NW/4 of NW/4 of SE/4 of SW/4;

SW/4 of SE/4 of NW/4 of NE/4.

 

5.                                  (New Pendarvis lease) Oil, gas and mineral
lease from W.P. Pendarvis in favor of M.H. O’Hara, W.B. Letson, W.T. Murray, and
W.L. Fort, dated August 16, 1923, recorded at Oil and Gas Lease Book 2, Page 74
of the records of LaSalle Parish, Louisiana, insofar and only insofar as the
said lease covers and applies from the surface of the earth to 100’ below the
top of the Wilcox Group, and insofar and only insofar as the above described
lease covers and affects one acre in the form of a square around the following
wells:

 

Monroe Well Service – La. Petr. Assoc. - W.P. Pendarvis No. I – SN 193828 –
located 145’ N and 415’ W from South Quarter Corner of Section 26, T10N – R1E,
LaSalle Parish, Louisiana.

Monroe Well Service – La. Petr. Assoc. – W.P. Pendarvis No. 2 – SN 193829 –
located 345’ N and 415’ W from South Quarter Corner of Section 26, T10N-R1E,
LaSalle Parish, Louisiana.

Monroe Well Service – La. Petr. Assoc. – W.P. Pendarvis No. 3 – SN 193830 –
located 545’ N and 415’ W from South Quarter Corner of Section 26, T10N-R1E,
LaSalle Parish, Louisiana.

Monroe Well Service – La. Petr. Assoc. – W.P. Pendarvis No. 4 – SN 193831 –
located 745’ N and 415’ W from South Quarter Corner of Section 26, T10N-R1E,
LaSalle Parish, Louisiana.

Monroe Well Service – La. Petr. Assoc. – W.P. Pendarvis No. 5 – SN 193832 –
located 790’ N and 215’ W from South Quarter Corner of Section 26, T10N-R1E,
LaSalle Parish, Louisiana.

 

3

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Monroe Well Service – La. Petr. Assoc. – W.P. Pendarvis No. 6 – SN 193833 –
located 590’ N and 215’ W from South Quarter Corner of Section 26, T10N-R1 E,
LaSalle Parish, Louisiana.

Monroe Well Service – La. Petr. Assoc. – W.P. Pendarvis No. 7 – SN 193834 –
located 390’ N and 215’ W from South Quarter Corner of Section 26, T10N-R1E,
LaSalle Parish, Louisiana.

Monroe Well Service – La. Petr. Assoc. – W.P. Pendarvis No. 8 – SN 193835 –
located 190’ N and 215’ W from South Quarter Corner of Section 26, T10N-R1 E,
LaSalle Parish, Louisiana.

Monroe Well Service – La. Petr. Assoc. – W.P. Pendarvis No. 10 – SN 193837 –
located 435.14’ N and 15’ W from South Quarter Corner of Section 26, T10N-R1E,
LaSalle Parish, Louisiana.

Monroe Well Service – La. Petr. Assoc. – W.P. Pendarvis No. 11 – SN 193838 –
located 635.14’ N and 15’ W from South Quarter Corner of Section 26, T10N-R1E,
LaSalle Parish, Louisiana.

Monroe Well Service – La. Petr. Assoc. – W.P. Pendarvis No. 12 – SN 194758 –
located 345’ N and 170’ E from the S/Q/C of Sec. 26, T10N, R1E, LaSalle Parish,
Louisiana.

Monroe Well Service – Beaver – Pendarvis No. I – (SN 193250) – located 1218’ N
and 369’ W from the S/Q/C of Sec. 26, T10N, R1E, LaSalle Parish, Louisiana.

Monroe Well Service – Beaver – Pendarvis No. 2 – (SN 193251) – located 1218’ N
and 169’ W from the S/Q/C of Sec. 26, T10N, R1E, LaSalle Parish, Louisiana.

Monroe Well Service - Beaver - Pendarvis No. 3 - (SN 193252) - located 818’ N
and 320’ E from the S/Q/C of Sec. 26, T10N, R1E, LaSalle Parish, Louisiana.

Monroe Well Service - Beaver - Pendarvis No. 4 - (SN 193253) - located 618’ N
and 411’ E from the S/Q/C of Sec. 26, T10N, R1E, LaSalle Parish, Louisiana.

Monroe Well Service - Beaver - Pendarvis No. 6 - (SN 193255) - located 100’ N
and 301’ E from the S/Q/C of Sec. 26, T10N, R1E, LaSalle Parish, Louisiana.

Monroe Well Service - Beaver - Pendarvis No. 7 - (SN 194757) - located 444’ N
and 345’ E from the S/Q/C of Sec. 26, T10N, R1E, LaSalle Parish, Louisiana.

Monroe Well Service - Beaver - Pendarvis No. 9 - (SN 194759) - located 545’ N
and 165’ E from the S/Q/C of Sec. 26, T10N, R1E, LaSalle Parish, Louisiana.

Monroe Well Service - Beaver - Pendarvis No. 10 - (SN 194760) - located 765’ N
and 140’ E from the S/Q/C of Sec. 26, T10N, R1E, LaSalle Parish, Louisiana.

Monroe Well Service - Beaver - Pendarvis No. 11 - (SN 194761) - located 970’ N
and 175’ E from the S/Q/C of Sec. 26, T10N, R1E, LaSalle Parish, Louisiana.

 

4

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Monroe Well Service - Beaver - Pendarvis No. 12 - (SN 194762) - located 870’ N
and 30’ W from the S/Q/C of Sec. 26, T10N, R1E, LaSalle Parish, Louisiana.

Monroe Well Service - Beaver - Pendarvis No. 13 - (SN 194763) - located 1085’ N
and 8’ W from the S/Q/C of Sec. 26, T10N, R1E, LaSalle Parish, Louisiana.

Monroe Well Service - Beaver - Pendarvis No. 14 - (SN 194764) - located 1020’ N
and 200’ W from the S/Q/C of Sec. 26, T10N, R1E, LaSalle Parish, Louisiana.

 

6.                                  (Old Pendarvis lease) Oil, gas and mineral
lease from W.P. Pendarvis in favor of M.H. O’Hara, W.B. Letson, W.T. Murray, and
W.L. Fort, dated August 16, 1923, recorded at Oil and Gas Lease Book 2, Page 74
of the records of LaSalle Parish, Louisiana, INSOFAR AND ONLY INSOFAR as said
lease covers and affects one acre in the form of a square around each of the
following wells:

 

Pendarvis No. 3 - SN 010281 - located 640’ N and 712’ W from SE/C of SW/4 of
SE/4 of Section 26, T1ON - R1E, LaSalle Parish, Louisiana

 

Pendarvis No. 4 - SN 010331 - located 85’ N and 827’ W from SE/C of SW/4 of SE/4
of Section 26, T1ON - RIE, LaSalle Parish, Louisiana

 

7.                                  Oil, gas and mineral lease dated May 24,
1979, recorded in Oil and Gas Book 43, Page 750, Registry 142221 of the records
of LaSalle Parish, Louisiana, executed by Missouri Pacific Railroad, Lessor, in
favor of Charles B. Bice, Lessee; insofar and only insofar as said lease covers
and affects the following:

 

SSS Mopac No. 8, (SN 183703), located in the center of Lot 10 Block 1 of the
original Town of Tullos, being 356’ North and 17’ West from the East Quarter
Corner of Section 26 Township 10 North, Range 1 West.

 

8.                                 Oil, Gas and Mineral Lease from Tremont
Lumber Company to Jackie D. Nelson, dated May 20, 1968, recorded in Oil and Gas
Book 31, Page 729, insofar as said lease covers the Southwest Quarter of
Northwest Quarter of Section 30, Township 10 North, Range 2 East, LaSalle
Parish, Louisiana, from the ground to the base of the Wilcox Formation.

 

9.                                 Oil, Gas and Mineral Lease dated November 5,
1975, recorded November 11, 1975, in Oil, Gas and Mineral Lease Record Book 67,
Page 367, records of Winn Parish, Louisiana, executed by C.S. Meredith, et al,
Lessors, unto J.B. Stafford, Lessee, covering and affecting:

 

5

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Southeast Quarter of Northwest Quarter (SE/4 of NW/4), Section 6, Township 10
North, Range 1 East, Winn Parish, Louisiana, and INSOFAR as said lease covers
and affects down to the base of the Wilcox, together with a like interest in all
oil and/or gas well located upon said lease.

 

10.                                 Oil, Gas and Mineral Lease executed by C.S.
Meredith, curator for Betty Lou Meredith to and in favor of Atkins
Production, Inc., a Louisiana Corporation, dated May 15, 1989, recorded in
Conveyance Book 124 at Page 66, records of Winn Parish, Louisiana covering and
affecting the following described property, to-wit:

 

The Southeast Quarter of Northwest Quarter of Section 6, Township 10 North,
Range 1 East, Winn Parish, Louisiana.

 

11.                               Oil, Gas and Mineral Lease executed by Monroe
Well Service, Delaware to and in favor of SSM Partnership, dated June 21, 1990,
recorded in Conveyance Book 127 at Page 636 records of Winn Parish, Louisiana,
INSOFAR AND ONLY INSOFAR as said lease covers and affects one acre in the from
of a square (with the well in the center thereof) around each of the following 8
wells in the NW/4 of Section 5, Township 10 North, Range 1 East, Winn Parish,
Louisiana.

 

SSS Drilling Asso. Tremont No. 1 – SN 182799 – located 940’ N and 100’ E of the
SW corner of SW/4 of NW/4 of said Section 5

SSS Drilling Asso. Tremont No. 2 – SN 182800 – located 1021’ N and 451’ E from
the SW corner of SW/4 of NW/4 of said Section 5

SSS Drilling Asso. Tremont No. 3 – SN 182801 – located 920’ N and 77’ E of the
SW corner of the SW/4 of NW/4 of said Section 5

SSS Drilling Asso. Tremont No. 4 – SN 182802 – located 620’ N and 855’ E of the
SW corner of SW/4 of NW/4 of said Section 5

SSS Drilling Asso. Tremont No. 5 – SN 182803 – located 294’ N and 895” E of the
SW corner of SW/4 of NW/4 of said Section 5

SSS Drilling Asso. Tremont No. 6 – SN 182804 – located 104’ N and 821’ E of the
SW corner of SW/4 of NW/4 of said Section 5

SSS Drilling Asso. Tremont No. 7 – SN 182805 – located 105’ N and 1020’ E of the
SW corner of SW/4 of NW/4 of said Section 5

SSS Drilling Asso. Tremont No. 8 – SN 184928 – located 100’N and 517’ E of the
SW corner of SW/4 of NW/4 of said Section 5 being 8 acres situated in the South
half of the NW/4 of Section 5, T1ON, R1E.

 

12.                            (Old Universal D lease) Oil, Gas and Mineral
Lease dated October 22, 1943 from Urania Lumber Company in Favor of M&W Oil
Company, which lease is recorded in Book 11 at Page 284 of the conveyance
records of LaSalle Parish, Louisiana and covers:

 

6

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One acre in the form of a square (with the well as the center thereof) around
each of the following three wells; the SSM – Urania Lumber Company #D-1 Well, SN
115191, located 100 feet South and 100 feet West of the Northeast Corner of the
SE/4 of NE/4 of NE/4, Section 24, TI ON – R1E; SSM – Urania Lumber Company #D-2
Well, SN 115192, located 100 feet South and 540 feet West of the Northeast
Corner of the NE/4 of NE/4 of said Section 24, SSM-Urania Lumber Company D-3
well, SN 115468, being three acres situated in the SE/4 of NE/4 of NE/4,
Section 24 T1 ON – R1E, LaSalle Parish, Louisiana, and INSOFAR as said lease
covers a depth down to 1600 feet

 

13.                            (Old Universal C lease) Oil, Gas and Mineral
Lease dated June 12, 1941 from the Urania Lumber Company in favor of Willis C.
Martin and M.E. Waldron, which lease is recorded in Book 9 at Page 249 of the
conveyance records of LaSalle Parish, Louisiana and covers:

 

One acre in the form of a square (with the well as the center thereof) around
each of the following three wells; SSM – Urania Lumber Company #C-2 Well, SN
115773, located 100 feet North and 100 feet East of the Southwest corner of the
NW/4 of NW/4 of NW/4 Section 19, T1ON – R2E; SSM- Urania Lumber Company#C-5
Well, SN 115986, located 340 feet South and 100 feet East of the Northwest
Corner of said Section 19, C-4 well, SN 116282, being three acres situated in
the NW/4 of NW/4 of NW/4, Section 19, T1ON – R2E, LaSalle Parish, Louisiana and
INSOFAR as said lease covers a depth down to 1600’

 

14.                            (Old Universal A lease) Oil, Gas and Mineral
lease dated October 22, 1943 from the Urania Lumber Company in favor of M&W Oil
Company, which lease is recorded in Book 11 at Page 284 of the conveyance
records of LaSalle Parish, Louisiana and covers:

 

One acre in the form of a square (with the well as the center thereof) around
each of the following wells; SSM – Urania Lumber Company #A-2 Well, SN 114278,
located 545 feet South and 545 feet West of the Northeast Corner of Section 24,
T1ON-R1E; SSM – Urania Lumber Company #A-2 Well SN 114442, located 300 feet West
and 100 feet North of the Southeast Corner of the NE/4 of NE/4 of NE/4 of said
Section 24; SSM – Urania Lumber Company 14A-5 Well SN 114534 located 345 feet
South and 100 feet West of the Northeast Corner of said Section 24, being three
acres situated in the NE/4 of NE/4 of NE/4, Section 24, TION-R1E, LaSalle
Parish, Louisiana and INSOFAR as said lease covers a depth down to 1600 feet

 

15.                            (MDP Lease) Lease dated September 28, 1949,
recorded in Oil and Gas Lease Book 14, Page 127, records of LaSalle Parish,
Louisiana, executed by Walter Herbert,

 

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Lessor, in favor of John T. Cupples, Lessee, INSOFAR and ONLY INSOFAR as said
lease covers and effects:

 

Lot 3 of Block 2, Original Town of Tullos, containing the Monroe Drilling
Maxwell No. 1 well, Serial Number 179671, Monroe Drilling Maxwell No. 2 well, SN
179672 located 174 feet North and 359 feet West from the East Quarter Corner of
Section 26, Township 10 North, Range 1 East, LaSalle Parish, Louisiana, and Lot
5 of Block 2, Original Town of Tullos, containing the Monroe Drilling Maxwell
No. 2 well, SN 179672 North and 424 feet West from the East Quarter Corner of
Section 26, Township 10 North, Range 1 East, LaSalle Parish, Louisiana.

 

16.                            (Shemen SWD) Oil, Gas and Mineral Lease executed
by Urania Lumber Company in favor of Willis C. Martin and M.E. Waldron of date
June 12, 1941, recorded at Oil and Gas Lease Book 9, Page 249 of the records of
LaSalle Parish, Louisiana, INSOFAR AND ONLY INSOFAR as said lease covers a depth
from the surface of the Earth down to a depth of 1600 feet, and INSOFAR AND ONLY
INSOFAR as the above described lease covers and affects one acre in the form of
a square around the following wells:

 

Urania Lumber Co., SWD #1, SN-971328, 100’ S of NE/C Section 24, T10N, R1E

 

17.                           Oil, Gas and Mineral Lease executed by the Urania
Lumber Company in favor of M&W Oil Company of date October 22, 1943, recorded at
Oil and Gas Lease Book 11, Page 284 of the records of LaSalle Parish, Louisiana,
INSOFAR AND ONLY INSOFAR as said lease covers a depth from the surface of the
Earth down to a depth of 1600 feet, and INSOFAR AND ONLY INSOFAR as the above
described lease covers and affects one acre in the form of a square around the
following wells:

 

(Urania Lumber Co. – Shemen lease)

 

Monroe Well Service – Shemen – Urania Lumber Co. No. 1 - (SN 191712) – located
362’ N and 507’ W from the SE/C of NE/4 of NE/4 of Section 24, T 10 N, R 1 E,
LaSalle Parish, Louisiana

Monroe Well Service – Shemen – Urania Lumber Co. No. 2 - (SN 191713) – located
162’ N and 507’ W from the SE/C of NE/4 of NE/4 of Section 24, T 10 N, R 1 E,
LaSalle Parish, Louisiana

Monroe Well Service – Shemen – Urania Lumber Co. No. 3 (SN 191714) – located
362’ N and 307’ W from the SE/C of NE/4 of NE/4 of Section 24, T 10 N, R 1 E,
LaSalle Parish, Louisiana

 

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(Urania A – Shemen lease)

 

Monroe Well Service – Shemen – Urania “A” No. 1 - (SN 191709) – located 559’ S
and 78’ W from the NE/C Section 24, T 10 N, R 1 E, LaSalle Parish, Louisiana

Monroe Well Service – Shemen – Urania “A” No. 2 - (SN 191784) – located 369’ S
and 351’ W from the NE/C Section 24, T 10 N, R 1 E, LaSalle Parish, Louisiana

Monroe Well Service – Shemen – Urania “A” No. 6 - (SN 191788) – located 131’ S
and 100’ W from the NE/C Section 24, T 10 N, R 1 E, LaSalle Parish, Louisiana

 

18.                            Oil, Gas and Mineral Lease executed by the Urania
Lumber Company in favor of Willis C. Martin and M.E. Waldron of date June 12,
1941, recorded at Oil and Gas Lease Book 9, Page 249 of the records of LaSalle
Parish, Louisiana, INSOFAR AND ONLY INSOFAR as said lease covers a depth from
the surface of the Earth down to a depth of 1600 feet, and INSOFAR AND ONLY
INSOFAR as the above described lease covers and affects one acre in the form of
a square around the following wells:

 

Monroe Well Service – Shemen – Urania “C” No. 1 (SN 191783) – located 131’ S and
100’ E from the NW/C Section 19, T 10 N, R 2 E, LaSalle Parish, Louisiana

Monroe Well Service – Shemen – Urania “C” No 2 - (SN 191779) – located 359’ S
and 302’ E from the NW/C Section 19, T 10 N, R 2 E, LaSalle Parish, Louisiana

 

19.                            (LPO) Oil, Gas and Mineral Lease executed by
Louisiana Pacific Corporation to and in favor of Atkins Production, Inc., dated
February 27, 1990, recorded under file number 144131 in Conveyance Book 174,
Page 631 of the records of LaSalle Parish, Louisiana. Covering and affecting the
following property as described:

 

Northeast Quarter of Northeast Quarter of Section 13, Township 10 North, Range 1
East

 

20.                            (LPO) Oil, Gas and Mineral Lease executed by
William Dows Blake, et al, to and in favor of Atkins Production, Inc., dated
February 1, 1990, recorded under file number 144130 in Conveyance Book 174,
Page 628 of the records of LaSalle Parish, Louisiana. Covering and affecting the
following property as described:

 

Northeast Quarter of the Northeast Quarter (NE/4 of NE/4), Section 13, Township
10 North, Range 1 East.

 

21.                            (Silver City SWD) Urania E SWD #1, Serial
#971269, located 192’ South and 1210’ East from the Center of Section 19, TI ON,
R2E, LaSalle Parish, Louisiana, along with all related Salt Water Disposal
Equipment.

 

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Hartner A SWD #1, Serial #971237, located 374’ North and 998’ West from the SE
corner of Section 7, T1ON, R2E, LaSalle Parish, Louisiana.

 

22.                                 (WP Pendarvis-La Petro lease) Pendarvis SWD
Well #1, Serial #971428, located in Section 26, T1ON, RIE, LaSalle Parish,
Louisiana

 

23.                            (Miles Heirs and Miles Essex leases) That certain
oil, gas and mineral lease executed by D.F. Miles, et al, in favor of Essex
Drilling Co., Inc., dated February 14, 1984, as recorded in Oil and Gas Lease
Book 61 at Page 302 of the records of LaSalle Parish, Louisiana;

 

That certain oil, gas and mineral lease executed by D.F. Miles, et al, in favor
of Essex Drilling Co., Inc., dated March 22, 1984, as recorded in Oil and Gas
Lease Book 61 at Page 405 of the records of LaSalle Parish, Louisiana;

 

That certain oil, gas and mineral lease executed by William J. Miles, et al, in
favor of Essex Drilling Co., Inc., dated as per acts recorded in Oil and Gas
Lease Book 60, Pages 688 and 733; and Oil and Gas Lease Book 61, Pages 39, 41,
43, 45, 47, 49, 51, 53, 55, 57, 185, 187, 189, 242 and 260 of the records of
LaSalle Parish, Louisiana;

 

Insofar as said leases cover and affect the following described lands in LaSalle
Parish, Louisiana, to-wit:

 

Begin at the NE Corner of the NW/4 of NW/4 of Section 25, T10N, R1E, and run
thence South 0 degrees 12’ West 533.9 feet for the point of beginning; run
thence South 0 degrees 12’ West 376 feet; run thence north 87 degrees 41’ West
391.7 feet to an iron pipe in the center of the Columbia-Alexandria Road; run
thence South 38 degrees 28’ West 278.5 feet to an iron pipe in the center of
said road; run thence north 61 degrees 37’ West 29 feet to an iron pipe on an
old rail fence line on the property line of F.J. Miles; run north 16 degrees 44’
East 402 feet to an iron pipe; run thence north 51 degrees 58’ West 10 feet to
an iron pipe; run thence North 16 degrees 44’ East 184 feet to an iron pipe on
the line of the old Kendrick Gin Lot; run thence North 89 degrees 25’ East 424.7
feet to the point of beginning.

 

That certain oil, gas and mineral lease dated August 25, 1983, from William
Julious Miles to Essex Drilling Co., Inc., as recorded in Oil and Gas Lease Book
60 at Page 688 of the records of LaSalle Parish, Louisiana;

 

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That certain oil, gas and mineral lease dated September 6, 1983, from Edna Miles
Gatherer and Lillie Mae Miles Little to Essex Drilling Co., Inc., as recorded in
Oil and Gas Lease Book 60 at Page 733 of the records of LaSalle Parish,
Louisiana. Co-Lessors’ Agreements identified with the Edna Miles Gatherer, et
al. Lease as recorded in Oil and Gas Lease Book 61 at Pages 39, 41, 43, 45, 47,
49, 51, 53, 55, 57, 185, 187, 189, 242 and 260;

 

Insofar as said leases cover and affect the following described lands in LaSalle
Parish, Louisiana, to-wit:

 

A tract of land in the W/2 NW/4 of Section 25, Township 10 North, Range 1 East,
described as beginning at the SWC of lands owned by W.T. Bass on the East side
of the Missouri Pacific right-of-way, running South along the right-of-way 224
yards, run thence East 106 yards, run thence North 224 yards to the SEC of the
W.T. Bass, run thence West 106 yards to the point of beginning.

 

Oil, gas and mineral lease dated August 16, 1983, from Frank Doughty, Chairman
of the Board for the LaSalle State Bank in Favor of Russell A, Flowers, husband
of Sally Ann Flowers, as recorded in Oil and Gas Lease Book 60 at Page 745 of
the records of LaSalle Parish, Louisiana

 

Insofar as said lease covers the following described lands in LaSalle Parish,
Louisiana, to-wit:

 

Lots 1, 2, 3 and 4 of Block 2, and Lot 4 of Block 12 of the Urania Lumber
Company Addition to the Town of Tullos, LaSalle Parish, Louisiana, or 728 West
and 803 North from SEC of SW/4 NW/4 of Section 25, Township 10 North, Range I
East, LaSalle Parish, Louisiana.

 

Being the following Oil, Gas and Mineral Leases described in that certain
Assignment of Oil, Gas and Mineral Leases dated December 28, 2004 from Atkins
Production, Inc. to Natural Gas Systems Corporation, as recorded in Conveyance
Book 294, Page 455 of the records of LaSalle Parish, Louisiana, more fully
described as follows, to-wit:,

 

24.                                 Oil, Gas and Mineral lease executed by
Southern Heritage Bank in favor of Atkins Production, Inc. dated October 8,
2004, recorded at Conveyance Book 292, Page 99 of the records of LaSalle Parish,
Louisiana

 

11

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Oil, Gas and Mineral Lease executed by the Town of Tullos in favor of Atkins
Production, Inc. as recorded December 9, 2004 at Conveyance Book 293, Page 330
of the records of LaSalle Parish, Louisiana.

 

Insofar as said leases cover and affect Lots 1, 2, 3 and 4 of Block 2 and Lot 4
of Block 12 of the Urania Lumber Company Addition to the Town of Tullos, LaSalle
Parish, Louisiana.

 

Being the following Oil, Gas and Mineral Leases described in that certain
Assignment of Oil, Gas and Mineral Leases dated June 22, 2005 from Atkins
Production, Inc. to NGS SUB. Corp. as recorded under Registry Number 191278 and
in Conveyance Book 149, Page 438 of the records of Winn Parish, Louisiana, more
fully described as follows, to-wit:

 

25.                                 Oil, Gas and Mineral Lease dated May 23,
2005 from Cornelia Pray, et al to Atkins Production, Inc., as recorded in
Conveyance Book 149, Page 424 of the records of Winn Parish, Louisiana

 

26.                                 Oil, Gas and Mineral Lease dated May 23,
2005 from Priscilla Long Bedgood to Atkins Production, Inc., as recorded in
Conveyance Book 149, Page 428 of the records of Winn Parish, Louisiana

 

27.                                 Oil, Gas and Mineral Lease dated May 23,
2005 from Cynthia Brown Beauchamp to Atkins Production, Inc., as recorded in
Conveyance Book 149, Page 432 of the records of Winn Parish, Louisiana

 

28.                                 Oil, Gas and Mineral Lease dated March 22,
2005 from Brandon R. Hawkins and Brandy Coburn Hawkins to Atkins
Production, Inc., as recorded in Conveyance Book 149, Page 436 of the records of
Winn Parish, Louisiana

 

Being the following oil and gas leases described in that certain Act of Sale and
Assignment dated February 1, 2005 from Chadco, Inc., et al to NGS Sub. Corp., as
recorded in Book 294, Page 333 of the Conveyance Records of LaSalle Parish,
Louisiana, more fully described as follows, to-wit:

 

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29.                                 Oil, gas and mineral lease executed by
William C. Pringle, et al, in favor of E.R. Waller dated August 26, 1936,
recorded in Oil and Gas Lease Book W, Page 449-A, Registry #23478, records of
LaSalle Parish, Louisiana, covering lands in Lot 15, Section 26, Township 10
North, Range I East, LaSalle Parish, Louisiana.

 

30.                                 Oil, gas and mineral lease executed by
Russell A. Flowers, et ux, in favor of Sara Productions, dated June 6, 1995,
recorded in Conveyance Book 220, Page 252, Registry #159489, records of LaSalle
Parish, Louisiana, covering the following described property, to-wit:

 

Section 26, Township 10 North, Range 1 East

 

Lot 4, Block 10, original Town of Tullos, in the NE/4 of SE/4.

Lot 1 of Russell Flowers Subdivision being a re-subdivision of Lot 3 of Block 13
of the Original Town of Tullos, in the NE/4 of SE/4.

Lot 2 of the Russell Flowers Subdivision being a re-subdivision of Lot 3 of
Block 13 of the original Town of Tullos, in the NE/4 of the SE/4.

Lot 3 of the Russell Flowers Subdivision being a re-subdivision of Lot 3 of
Block 13 of the original Town of Tullos, in the NE/4 of the SE/4.

Lot 4 of the Russell Flowers Subdivision, in the SE/4 of the SE/4.

Lot 5 of the Russell Flowers Subdivision, in the SE/4 of the SE/4.

 

31.                            Oil, gas and mineral lease executed by The Urania
Lumber Co. Ltd., in favor of Southern Carbon Company, dated January 23, 1923,
recorded in Oil and Gas Lease Book 2, Page 449, Registry #6978, records of
LaSalle Parish, Louisiana, as the said lease covers the following described
property, to-wit:

 

The specific acreage in the SE/4 of SE/4, of Section 7, Township 10 North, Range
2 East, LaSalle Parish, Louisiana.

 

INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS ONE (1) ACRE IN A SQUARE
SURROUNDING THE FOLLOWING WELLS, TO-WIT:

 

Hardtner A No. 3, SN186514; located 270’ N & 516’W from SE corner of Sec. 7

Hardtner A No. 4, SN186515; located 105’ N & 630’ W from SE corner of Sec. 7

Hardtner A No. 5, SN186516; located 320’ N & 305’ W from SE corner of Sec. 7

Hardtner A No. 6, SN186517; located 105’ N & 206’ W from SE corner of Sec. 7

Hardtner A No. 11, SN187940; located 670’ N & 500’ W from SE corner of Sec.7

Hardtner A No. 12, SN187871; located 670’ N & 702’W from SE corner of Sec. 7

Hardtner A No. 13, SN187872 located 275’ N & 740’ W from SE corner of Sec 7.

Hardtner A No. 15, SN187874; located 862’ N & 452’ W from SE corner of Sec.7

Hardtner A No. 16, SN187875 located 618’ N & 897’ W from SE corner of Sec. 7

Hardtner A No. 17, SN187876; loc. 395’ N & 908’ W from SE corner of Sec 7

 

13

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Hardtner A No. 18, SN187877; loc. 217’ N & 1001’ W from SE corner of Sec. 7

Hardtner A No. 28, SN188202; loc. 100’ N & 1167’ W from SE corner of Sec. 7

 

32.                                 Oil, gas and mineral lease executed by
Willie Green Bradford, et ux, in favor of Russell A. Flowers, dated May 18,
1981, recorded in Oil and Gas Lease Book 48, Page 703, Registry #114379, records
of LaSalle Parish, Louisiana, covering lands in the SE/4 of the SE/4 of
Section 26, Township 10 North, Range 1 East, LaSalle Parish, Louisiana.

 

33.                                 Oil, gas and mineral lease executed by Board
of Levee Commissioners Tensas Basin Levee District, in favor of Max W. Maxwell
dba M & M Oil Properties, dated May 19, 1969, recorded in Oil and Gas Lease Book
32, Page 683, Registry #8289, records of LaSalle Parish, Louisiana, the
following described property located in the NW/4 of NE/4, of Section 26,
Township 10 North, Range 1 East, LaSalle Parish, Louisiana,

 

INSOFAR AND ONLY INSOFAR AS the said lease covers and affects one (1) acre in
the form of a square (with the well as the center hereof) around the following
drillsite locations:

 

Tensas Basin Levee District No. 1, SN134605; located 345’ S 380’ E of NW corner
of NW/4 of NE/4 of Section 26, Township10 North, Range I East, LaSalle Parish,
Louisiana.

Tensas Basin Levee District No. 3, SN 178732; located 120’ S & 180’ E from NW
corner of Section 26, Township10 North, Range 1 East, LaSalle Parish, Louisiana.

Tensas Basin Levee District SWD No.2, SN990623; located 196’ South & 113’ East
of NW/C of the NW/4 of NE/4 of Section 26, Township 10 North, Range 1 East,
LaSalle Parish, Louisiana.

 

34.                     Oil, gas and mineral lease executed by Tremont Lumber
Company, in favor of Arkansas Fuel Oil Company, dated May 1, 1947, recorded in
Oil and Gas Lease Book 13, Page 88, records of LaSalle Parish, Louisiana,

 

INSOFAR AND ONLY INSOFAR as the following wells on a sub-lease 100’ in a circle
around each:

 

Tremont B. No. 1, SN187623; located 189.9’ FNL & 892.8’ FEL of SW/4 of NE/4 of
Section 25, Township 10 North, Range 1, East, LaSalle Parish, La.

Tremont B. No. 3, SN187822; located 307.2’ FNL & 27.1’ FEL of SW/4 of NE/4 of
Section 25, Township 10 North, Range 1, East, LaSalle Parish, LaTremont B.
No. 4, SN187824; located 404’ FNL & 405.2’ FEL of SW/4 of NE/4 of Section 25,
Township 10 North, Range 1, East, LaSalle Parish, La.

 

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Tremont B. No. 5, SN188181; located 1131’ FEL & 604’ FNL of SE/4 of NE/4 of
Section 25, Township 10 North, Range 1, East, LaSalle Parish, La.

Tremont B. No. 6, SN189535; located 678.8’ NWL & 420.2’ FSL of SW/4 of NE/4 of
Section 25, Township 10 North, Range 1, East, LaSalle Parish, La.

Tremont B. SWD No. 1, SN187820; located 193.3’ FNL & 889.3’ FEL of SW/4 of NE/4
of Section 25, Township 10 North, Range 1, East, LaSalle Parish, La.

Tremont B. No. 7, SN189696; located 1276’ FEL & 1022’ FNL of SE/4 of NE/4 of
Section 25, Township 10 North, Range 1, East, LaSalle Parish, La.

Tremont B. No. 8, SN 191205; located 443’ FEL & 109’ FNL of SE/4 of NE/4 of
Section 25, Township 10 North, Range 1, East, LaSalle Parish, La.

Tremont B. No. 9, SN 191207; located 202.1’ FNL & 355.4’ FWL of SE/4 of NE/4 of
Section 25, Township 10 North, Range 1, East, LaSalle Parish, La.

Tremont B. No. 10, SN178262; located 656’ North & 471’ East of SW/C of NE/4 of
Section 25, Township 10 North, Range 1, East, LaSalle Parish, La.

Tremont B. No. 12, SN182291; located 382’ South and 100’ West of NE/C of
Section 25, Township 10 North, Range 1, East, LaSalle Parish, La.

Tremont B. No. 13, SN182292; located 321’ South & 356’ West of NE/C of
Section 25, Township 10 North, Range 1, East, LaSalle Parish, La.

Tremont B. No. 14, SN 182295; located 383’ South & 546’ West of NE/C of
Section 25, Township 10 North, Range 1, East, LaSalle Parish, La.

Tremont B. No. 15, SN182296; located 100’ South & 200’ East of NW/C of NE/4 of
NE/4, of Section 25, Township 10 North, Range 1, East, LaSalle Parish, La

Tremont B. No. 16, SN183884; located 378’ South & 749’ West of NE/C of
Section 25, Township 10 North, Range 1, East, LaSalle Parish, La.

Tremont B. No. 17, SN183885; located 210’ South & 863’ West of NE/C of
Section 25, Township 10 North, Range 1, East, LaSalle Parish, La.

 

35.                                 Oil, gas and mineral lease executed by
Roberta Stewart Taylor, in favor of Russell Flowers, dated October 7, 1991,
recorded in Conveyance Book 190, Page 195, Registry #149263 records of LaSalle
Parish, Louisiana covering lands located in Lot 15 of the original Town of
Tullos, Section 26, Township 10 North, Range 1 East, LaSalle Parish, Louisiana.

 

36.                               Oil, gas and mineral lease executed by
Southern Heritage Bank, in favor of Marvin Douglas Murphrey, dated October 18,
1993, recorded in Conveyance Book 206, Page 280, Registry #154486, records of
LaSalle Parish, Louisiana, covering Lots 2, 3 and 4 of Block 6 of the Russell
addition to Tullos, Louisiana, and a strip of land adjacent thereto located in
the SE/C of Section 26, Township 10 North, Range 1 East, LaSalle Parish,
Louisiana.

 

15

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37.                               Oil, gas and mineral lease executed by
Anadarko Land Corp., et al, in favor of Chadco, Inc., dated February 1, 2003,
recorded in Conveyance Book 278, Page 318, Registry #187644, records of LaSalle
Parish, Louisiana, covering the following described property, to-wit:

 

Township 10 North, Range 1 East, Section 26:

 

Lots 8, 10 and 12 of Block 17, Town of Tullos, LaSalle Parish, Louisiana. Lots
2, 6, 8 and 10 of Block 20, Town of Tullos, LaSalle Parish, Louisiana.

 

38.                               Oil, gas and mineral lease executed by Lane
Capps, et al, in favor of Chadco, Inc., dated May 28, 2004, recorded in Oil and
Gas Lease Book 289, Page 496, Registry #193577, records of LaSalle Parish,
Louisiana, covering the following described property, to-wit: One (1) acre, more
or less, located in the original Town of Tullos, situated in Section 25,
Township 10 North, Range 1 East, LaSalle Parish, Louisiana.

 

39.                               Oil, gas and mineral lease executed by Tremont
Lumber Company, in favor of Arthur W. Sour, Jr., dated May 31, 1966, recorded in
Oil and Gas Lease Book 28, Page 553, Registry #75957, records of LaSalle Parish,
Louisiana, covering lands in Section 26, Township 10 North, Range 1 East,
LaSalle Parish, Louisiana,

 

INSOFAR AND ONLY INSOFAR as the said lease covers the following described
property, to-wit:

 

Moore & Munger Hydrocarbons, Inc., S.T. Holland #1 and S.T. Holland #2, Lot 10,
Block 6, Tremont Addition to Tullos, LA., as located in the SE/4 of the NW/4 of
Section 25, Town 10 North, Range 1 East, LaSalle Parish, Louisiana.

 

40.                                 Oil, gas and mineral lease executed by
Richard L. Walsh, et ux, in favor of Walter W. Heard, Jr., dated September 8,
1958, recorded in Oil and Gas Lease Book 20, Page 216, Registry #59119, records
of LaSalle Parish, Louisiana, covering three (3) lots located in the original
Town of Tullos, Louisiana, located in the SW/4 of the NE/4 of Section 26
Township 10 North, Range 1 East, LaSalle Parish, Louisiana.

 

41.                                 Oil, gas and mineral lease executed by
Johnny C. Maxwell, Jr., in favor of Len White, dated June 24, 1992, recorded in
Conveyance Book 194, Page 155, Registry 150724, records of LaSalle Parish,
Louisiana, covering Lots 1, 2 and 3 of the Urania Lumber Company Addition to the
Town of Tullos, LaSalle Parish, Louisiana

 

16

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42.                                 Oil, gas and mineral lease executed by
Thelma W. Allbritton, et al, in favor of Chadco, Inc., dated June 23, 1993,
recorded in Conveyance Book 204, Page 151, Registry #153940, records of LaSalle
Parish, Louisiana; and

 

Oil, gas and mineral lease executed by Gerald J. Wright in favor of
Chadco, Inc., dated June 29, 1993, recorded in Conveyance Book 204, Page 156,
Registry #153941, records of LaSalle Parish, Louisiana; and

 

Oil, gas and mineral lease executed by Herman.Wright, in favor of Chadco. Inc.,
dated July 20, 1993, recorded in Conveyance Book 204, Page 160, Registry
4153942, records of LaSalle Parish, Louisiana;

 

Said leases covering three (3) lots located in the Town of Tullos, in the SE/4
of the SE/4 of Section 26, Township 10 North, Range 1 East.

 

43.                                 Oil, gas and mineral lease executed by Lacey
Leon Tullos, in favor of Milton Galoob, dated September 10, 1979, recorded in
Oil and Gas Lease Book 44, Page 401, Registry #109233, records of LaSalle
Parish, Louisiana, covering lands in Section 26, Township 10 North, Range 1
East.

 

44.                                 Oil, gas and mineral lease executed by
Tensas Basin Levee District, in favor of Alfred S. Black, Trustee, dated
June 14, 1955, recorded in Oil and Gas Lease Book 17, Page 574, Registry #53780,
records of LaSalle Parish, Louisiana, covering Lot 2 or Tract. NW1/4 of NE/4 of
Section 26, Township 10 North, Range 1 East, containing 28.54 acres, more or
less, situated in LaSalle Parish, Louisiana.

 

45.                                 Oil, gas and mineral lease executed by
Thomas Clarence Long, in favor of M.E. McGaugh, dated June 17, 1958, recorded in
Oil and Gas Lease Book 20, Page 23, Registry #58398, records of LaSalle Parish,
Louisiana, and Correction to Description, executed by Thomas Clarence Long, in
favor of M.E. McGaugh, dated March 11, 1959, recorded in Oil and Gas Lease Book
20, Page 480; Registry #60095, covering lands in the original Town of Tullos,
located in Section 26, Township 10 North, Range 1 East.

 

46.                                 Oil, gas and mineral lease executed by
Missouri Pacific Railroad Company, in favor of Warren B. Melton, dated
December 20, 1960, recorded in Oil and Gas Lease Book 22, Page 195, Registry
#63943, records of LaSalle Parish, Louisiana, covering Lots 2, 4, 6, 10 and 12;
Block 18, Lots 2, 6, 8 and 10; Block 20 and all of Fractional Block H, all in
the Townsite of Tullos, located in Section 26, Township 10 North, Range 1 East.
LaSalle Parish, Louisiana.

 

17

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

 

47.                                 Oil, gas and mineral lease executed by Alene
Atnip Holmes, in favor of ZAD, Inc., dated May 22, 1998, recorded in Conveyance
Book 244, Page 99, Registry #169627, records of LaSalle Parish, Louisiana,
covering lands in Lots 11 and 12, Block 1, Holmes and Adams addition to Town of
Tullos and Lot A of original Town of Tullos as per plat in Conveyance Book M,
Page 166, LaSalle Parish, Louisiana, Section 25, Township 10 North, Range 1
East.

 

48.                                 Oil, gas and mineral lease executed by A.P.
Kyle, et al, in favor of J.L. Ferguson, dated February 23, 1926, recorded in Oil
and Gas Lease Book 3, Page 175, Registry #3407, records of LaSalle Parish,
Louisiana, covering lands in Lot Eight (8) of Block one (1) of Holmes and Adams
Addition to the Town of Tullos in LaSalle Parish, Louisiana, according to the
new plat of said Town of Tullos, in Section 25, Township 10 North, Range 1 East.

 

49.                                 Oil, gas and mineral lease executed by
Georgia-Pacific Corporation, in favor of Ed Alexander, dated September 13, 1972,
recorded in Oil and Gas Lease Book 36, Page 388, Registry #91252, records of
LaSalle Parish, Louisiana; and

 

Oil, gas and mineral lease executed by Q.T. Hardtner, Jr., Agent, et al, in
favor of Ed Alexander, dated October 26, 1972, recorded in Oil and Gas Lease
Book 36, Page 392, Registry #91253, records of LaSalle Parish, Louisiana,

 

Both of the above leases covering lands all in Section 19 Township 10 North,
Range 2 East,

 

INSOFAR AND ONLY INSOFAR AS SAID LEASES COVER AND AFFECT ONE (1) ACRE IN THE
FORM OF A SQUARE AROUND THE FOLLOWING WELLS, TO-WIT:

 

LTF-Urania No. 6, SN 193625; located 1606’ S & 495’ E from NW/C of NE/4 of
Section 19, T10N, R2E.

 

50.                                 Oil, gas and mineral lease executed by Harry
R. Brinkley, et al, in favor of C.A. McCartney, dated September 15, 1980,
recorded in Oil and Gas Lease Book 96, Page 236, Registry #115261, records of
Winn Parish, Louisiana; and

 

Oil, gas and mineral lease executed by Harry R. Brinkley, et al, in favor of
C.A. McCartney, dated April 20, 1981, recorded in Oil and Gas Lease Book 97,
Page 20, Registry #115676, records of Winn Parish, Louisiana; and Oil, gas and
mineral lease executed by Harry R. Brinkley, et al, in favor of Chadco, Inc.,

 

18

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

 

dated January 15, 1990, recorded in Oil and Gas Lease Book 127, Page 90,
Registry #145329, records of Winn Parish, Louisiana;

 

All of the above leases covering lands located in the NW/4 of NE/4 of
Section 30. Township 11 North, Range I West, Winn Parish, Louisiana.

 

INSOFAR AND ONLY INSOFAR AS said leases cover and affect one (1) acre in the
form of a square (with the well in the center thereof) around each of the
following 8 wells:

 

Brinkley Heirs LTF No. 1, SN186324; located 100’ N & 100’ E from SW/C of NW/4 of
NW/4 of NE/4, Section 30, T11N, R1W.

Brinkley Heirs LTF SWD No. 2, SN186325; located 300’ N & 100’ E from SW/C of
NW/4 of NW/4 of NE/4, Section 30, T11N RI W.

Brinkley Heirs LTF No. 3, SN186326; located 500’ N & 100’ E from SW/C of NW/4 of
NW/4 of NE/4, Section 30, T11N, RI W.

Brinkley Heirs LTF No. 4, SN 186327; located 375’ N & 375’ W from SE/C of NW/4
of NW/4 of NE/4, Section 30, T1 IN, RI W.

Brinkley Heirs LTF No. 5, SN186328; located 100’ N & 150’ W from SE/C of NW/4 of
NW/4 of NE/4, Section 30, T11N, R1W.

Brinkley Heirs LTF No. 6, SN186329; located 300’ N & 150’ W from SE/C of NW/4 of
NW/4 of NE/4, Section 30, T11N, R1W.

Brinkley Heirs LTF No. 7, SN187021; located 500’ N & 488’ E from SW/C of NW/4 of
NW/4 of NE/4, Section 30, TI 1N, R1W.

Brinkley Heirs LTF No. 8, SN187179; located 560’ N & 294’ E from SW/C of NW/4 of
NW/4 of NE/4, Section 30, T11N, RI W.

 

51.                                 Oil, gas and mineral lease executed by
Mrs. Bonnie Bartley, et ux, in favor of W.O. Weaver, dated November 12, 1959,
recorded in Oil and Gas Lease Book 18, Page 67, Registry #6731, records of Winn
Parish, Louisiana, covering lands located in the SE/4 of SE/4 of Section 20,
Township 11 North, Range 1 West, Winn Parish, Louisiana.

 

52.                                 Oil, gas and mineral lease executed by Judge
Jones, in favor of W.O. Weaver, dated June 30, 1959, recorded in Oil and Gas
Lease Book 17, Page 299, Registry #6582, records of Winn Parish, Louisiana,
covering the NE/4 of SE/4 of Section 20, Township 11 North, Range 1 West, Winn
Parish, Louisiana.

 

53.                                 Oil, gas and mineral lease executed by Jewel
Taylor, et al, in favor of Frontier, Inc., dated September 20, 1990, recorded in
Oil and Gas Lease Book 128, Page 498, Registry #147837, records of Winn Parish,
Louisiana, covering all that portion of the N 1/3 of NE/4 of SE/4 of Section 20,
T1N, R1W, Winn Parish, Louisiana.

 

19

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

 

Lease acquired by NGS SUB Corporation

 

54.                               Oil and Gas Lease dated December 2, 2005 from
the LP Mineral Owners to NGS SSUB. Corporation, as recorded in Conveyance Book
300, Page 708 of the records of LaSalle Parish, Louisiana.

 

55.                                 Oil and Gas Lease dated December 5, 2005
from William D. Blake, as Agent and Attorney-In-Fact for Henry E. Blake, et al,
to NGS Sub Corporation, as recorded in Conveyance Book 300, Page 713 of the
records of LaSalle Parish, Louisiana.

 

56.                                 Oil, Gas and Mineral Lease dated December 1,
2005 from Lane Capps and Sherry Capps Cannon to NGS SUB. Corp., as recorded in
Conveyance Book 300, Page 39 of the records of LaSalle Parish, Louisiana.

 

20

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

 

Exhibit “A-2”

 

Attached to and made a part of that certain

Assignment, Conveyance and Bill of Sale dated effective February 1, 2008

by and between NGS Sub. Corp., as Assignor, and

MWM Energy, LLC, as Assignee

 

WELLS

 

 

 

Serial

 

LUW

 

 

 

Well

 

 

 

 

 

 

 

 

 

No.

 

Code

 

Well Name

 

No.

 

WI

 

NRI

 

Comments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ag Oil - Capps Lease

 

 

 

 

 

 

 

 

 

1

 

173393

 

037481

 

Ag Oil - Capps

 

1

 

1.000

 

0.83333

 

 

 

2

 

173394

 

037481

 

Ag Oil - Capps

 

2

 

1.000

 

0.83333

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ag-Oil MOPAC Lease

 

 

 

 

 

 

 

 

 

3

 

166837

 

037288

 

Ag-Oil MOPAC

 

1

 

1.000

 

0.75000

 

misnamed in Sonris as Bice-Mopac #1

 

4

 

171065

 

037288

 

Ag-Oil MOPAC

 

2

 

1.000

 

0.75000

 

 

 

5

 

171066

 

037288

 

Ag-Oil-MOPAC

 

3

 

1.000

 

0.75000

 

 

 

6

 

171067

 

037288

 

Ag-Oil-MOPAC

 

4

 

1.000

 

0.75000

 

 

 

7

 

171069

 

037288

 

Ag-Oil-MOPAC

 

6

 

1.000

 

0.75000

 

 

 

8

 

171070

 

037288

 

Ag-Oil-MOPAC

 

7

 

1.000

 

0.75000

 

 

 

9

 

171068

 

037288

 

Ag-Oil-MOPAC SWD

 

5

 

1.000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Atkins B Lease

 

 

 

 

 

 

 

 

 

10

 

159038

 

037633

 

Atkins B

 

1

 

1.000

 

0.81250

 

 

 

 

1

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

 

11

 

160179

 

037633

 

Atkins B

 

2

 

1.000

 

0.81250

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

B Bartley Lease

 

 

 

 

 

 

 

 

 

12

 

77088

 

010224

 

B Bartley

 

1

 

1.000

 

0.82639

 

 

 

13

 

77089

 

010224

 

B Bartley

 

2

 

1.000

 

0.82639

 

 

 

14

 

83034

 

010224

 

B Bartley

 

3

 

1.000

 

0.82639

 

 

 

15

 

89960

 

010224

 

B Bartley

 

4

 

1.000

 

0.82639

 

 

 

16

 

125107

 

010224

 

B Bartley

 

5

 

1.000

 

0.82639

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bradford Lease

 

 

 

 

 

 

 

 

 

17

 

175684

 

037857

 

Bradford

 

1

 

1.000

 

0.83000

 

 

 

18

 

182138

 

037857

 

Bradford

 

4

 

1.000

 

0.83000

 

 

 

19

 

199462

 

037857

 

Bradford

 

5

 

1.000

 

0.83000

 

 

 

20

 

990616

 

037857

 

Bradford SWD

 

3

 

1.000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Brinkley Heirs LTF Lease

 

 

 

 

 

 

 

 

 

21

 

186324

 

040080

 

Brinkley Heirs LTF

 

1

 

1.000

 

0.83000

 

 

 

22

 

186326

 

040080

 

Brinkley Heirs LTF

 

3

 

1.000

 

0.83000

 

 

 

23

 

186327

 

040080

 

Brinkley Heirs LTF

 

4

 

1.000

 

0.83000

 

 

 

24

 

186328

 

040080

 

Brinkley Heirs LTF

 

5

 

1.000

 

0.83000

 

 

 

25

 

186329

 

040080

 

Brinkley Heirs LTF

 

6

 

1.000

 

0.83000

 

 

 

26

 

187021

 

040080

 

Brinkley Heirs LTF

 

7

 

1.000

 

0.83000

 

 

 

27

 

187179

 

040080

 

Brinkley Heirs LTF

 

8

 

1.000

 

0.83000

 

 

 

28

 

186325

 

 

 

Brinkley Heirs LTF SWD

 

2

 

1.000

 

 

 

 

 

29

 

173495

 

037681

 

Brinkley Heirs N

 

1

 

1.000

 

0.83000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Flowers, Russell Lease

 

 

 

 

 

 

 

 

 

30

 

197897

 

041921

 

Flowers, Russell

 

1

 

1.000

 

0.80000

 

 

 

31

 

197898

 

041921

 

Flowers, Russell

 

2

 

1.000

 

0.80000

 

 

 

32

 

199021

 

041921

 

Flowers, Russell

 

3

 

1.000

 

0.80000

 

 

 

 

2

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

 

33

 

199022

 

041921

 

Flowers, Russell

 

4

 

1.000

 

0.80000

 

Sonris records not updated from prior transfers

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gates Lease

 

 

 

 

 

 

 

 

 

34

 

168176

 

036775

 

Gates

 

1

 

1.000

 

 

 

no lease or production

 

35

 

168341

 

 

 

Gates SWD

 

4

 

1.000

 

 

 

no lease or production

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hardtner (Atkins) A Lease

 

 

 

 

 

 

 

 

 

36

 

990145

 

007087

 

Hardtner A

 

2

 

1.000

 

0.80000

 

Sonris records not updated for transfer from Atkins

 

37

 

990146

 

007087

 

Hardtner A

 

7

 

1.000

 

0.80000

 

Sonris records not updated for transfer from Atkins

 

38

 

149552

 

007087

 

Hardtner A

 

9

 

1.000

 

0.80000

 

 

 

39

 

153621

 

007087

 

Hardtner A

 

11

 

1.000

 

0.80000

 

 

 

40

 

971237

 

007087

 

Hardtner A SWD

 

1

 

1.000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hartdner (Atkins) C Lease

 

 

 

 

 

 

 

 

 

41

 

19746

 

007089

 

Hardtner C

 

9

 

1.000

 

0.80000

 

 

 

42

 

107472

 

007089

 

Hardtner C

 

13

 

1.000

 

0.80000

 

 

 

43

 

153622

 

007089

 

Hardtner C

 

14

 

1.000

 

0.80000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hardtner (Chadco) A Lease

 

 

 

 

 

 

 

 

 

44

 

186438

 

040289

 

Hardtner A

 

1

 

1.000

 

0.828125

 

Sonris records not updated for transfer from Atkins/Phoenix

 

45

 

186514

 

7087

 

Hardtner A

 

3

 

1.000

 

0.828125

 

 

 

46

 

186515

 

7087

 

Hardtner A

 

4

 

1.000

 

0.828125

 

 

 

47

 

186516

 

7087

 

Hardtner A

 

5

 

1.000

 

0.828125

 

 

 

48

 

186517

 

7087

 

Hardtner A

 

6

 

1.000

 

0.828125

 

 

 

49

 

187871

 

7087

 

Hardtner A

 

12

 

1.000

 

0.828125

 

 

 

50

 

187872

 

7087

 

Hardtner A

 

13

 

1.000

 

0.828125

 

 

 

 

3

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

 

51

 

187873

 

040289

 

Hardtner A

 

14

 

1.000

 

0.828125

 

Sonris records not updated for transfer from Atkins/Phoenix

 

52

 

187875

 

7087

 

Hardtner A

 

16

 

1.000

 

0.828125

 

 

 

53

 

187876

 

7087

 

Hardtner A

 

17

 

1.000

 

0.828125

 

 

 

54

 

187877

 

7087

 

Hardtner A

 

18

 

1.000

 

0.828125

 

 

 

55

 

188134

 

040289

 

Hardtner A

 

20

 

1.000

 

0.828125

 

Sonris records not updated for transfer from Atkins/Phoenix

 

56

 

188202

 

7087

 

Hardtner A

 

28

 

1.000

 

0.828125

 

 

 

57

 

187940

 

7087

 

Hardtner A

 

29

 

1.000

 

0.828125

 

 

 

58

 

187874

 

7087

 

Hardtner A 15 SWD

 

15

 

1.000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Holland, ST Lease

 

 

 

 

 

 

 

 

 

59

 

186412

 

040355

 

Holland, ST

 

1

 

1.000

 

0.78711

 

 

 

60

 

187825

 

040355

 

Holland, ST

 

2

 

1.000

 

0.78711

 

 

 

61

 

971390

 

 

 

SSM SWD

 

1

 

1.000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Holmes, WL Lease

 

 

 

 

 

 

 

 

 

62

 

154696

 

034641

 

Holmes, WL

 

1

 

1.000

 

0.75000

 

 

 

63

 

154738

 

034641

 

Holmes, WL

 

2

 

1.000

 

0.75000

 

 

 

64

 

154737

 

034641

 

Holmes, WL

 

3

 

1.000

 

0.75000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

J Jones Lease

 

 

 

 

 

 

 

 

 

65

 

77712

 

010223

 

J Jones

 

1

 

1.000

 

0.82639

 

 

 

66

 

77885

 

010223

 

J Jones

 

2

 

1.000

 

0.82639

 

 

 

67

 

80893

 

010223

 

J Jones

 

3

 

1.000

 

0.82639

 

 

 

68

 

80331

 

010223

 

J Jones

 

4

 

1.000

 

0.82639

 

 

 

69

 

82292

 

010223

 

J Jones

 

5

 

1.000

 

0.82639

 

 

 

70

 

82778

 

010223

 

J Jones

 

6

 

1.000

 

0.82639

 

 

 

71

 

83229

 

010223

 

J Jones

 

8

 

1.000

 

0.82639

 

 

 

72

 

204917

 

010223

 

J Jones

 

11

 

1.000

 

0.82639

 

 

 

73

 

972679

 

010223

 

J Jones SWD

 

12

 

1.000

 

 

 

 

 

 

4

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

 

 

 

 

 

 

 

J Jones A Lease

 

 

 

 

 

 

 

 

 

74

 

212912

 

046565

 

J Jones A

 

2

 

1.000

 

0.83000

 

 

 

75

 

212913

 

046565

 

J Jones A

 

3

 

1.000

 

0.83000

 

 

 

76

 

83979

 

046565

 

J Jones A

 

4

 

1.000

 

0.83000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Kyle-Davis Lease

 

 

 

 

 

 

 

 

 

77

 

9400

 

007688

 

Kyle-Davis

 

1

 

1.000

 

0.83000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

La Pacific O Lease

 

 

 

 

 

 

 

 

 

78

 

154412

 

039847

 

LA PACIFIC O

 

2

 

1.000

 

0.80000

 

 

 

79

 

156342

 

039847

 

LA PACIFIC O

 

5

 

1.000

 

0.80000

 

 

 

80

 

155943

 

039847

 

LA PACIFIC O

 

2D

 

1.000

 

0.80000

 

 

 

81

 

156839

 

039847

 

LA PACIFIC O SWD

 

6

 

1.000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

La Pacific Lease

 

 

 

 

 

 

 

 

 

82

 

150510

 

034425

 

La Pacific

 

1

 

1.000

 

0.80000

 

 

 

83

 

150771

 

034425

 

La Pacific

 

3

 

1.000

 

0.80000

 

 

 

84

 

154606

 

034425

 

La Pacific

 

4

 

1.000

 

0.80000

 

 

 

85

 

154605

 

034425

 

La Pacific SWD

 

5

 

1.000

 

 

 

 

 

86

 

009597

 

009751

 

Urania Voltz

 

1

 

1.000

 

0.80000

 

 

 

87

 

059103

 

009751

 

Urania Voltz

 

2

 

1.000

 

0.80000

 

 

 

88

 

148110

 

009751

 

Urania Voltz

 

3

 

1.000

 

0.80000

 

 

 

89

 

175370

 

009751

 

Urania Voltz

 

4

 

1.000

 

0.80000

 

 

 

90

 

175371

 

009751

 

Urania Voltz

 

5

 

1.000

 

0.80000

 

 

 

91

 

096703

 

009751

 

Urania Voltz

 

6

 

1.000

 

0.80000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

La Salle St Bank Lease

 

 

 

 

 

 

 

 

 

92

 

190522

 

040711

 

LASALLE ST BANK

 

3

 

1.000

 

0.80000

 

 

 

93

 

190558

 

040711

 

LASALLE ST BANK

 

4

 

1.000

 

0.80000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loe, Glen D Lease

 

 

 

 

 

 

 

 

 

94

 

196405

 

041637

 

Loe, Glen D

 

1

 

1.000

 

 

 

no lease or production

 

95

 

196406

 

041637

 

Loe, Glen D

 

2

 

1.000

 

 

 

no lease or production

 

 

5

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

 

96

 

197043

 

041637

 

Loe, Glen D

 

3

 

1.000

 

 

 

no lease or production

 

97

 

197330

 

041637

 

Loe, Glen D

 

4

 

1.000

 

 

 

no lease or production

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long, CO Lease

 

 

 

 

 

 

 

 

 

98

 

146924

 

033544

 

Long , CO

 

1

 

1.000

 

0.80000

 

 

 

99

 

153135

 

033544

 

Long , CO

 

2

 

1.000

 

0.80000

 

 

 

100

 

153170

 

033544

 

Long , CO

 

3

 

1.000

 

0.80000

 

 

 

101

 

153171

 

033544

 

Long , CO

 

4

 

1.000

 

0.80000

 

 

 

102

 

153346

 

033544

 

Long , CO

 

5

 

1.000

 

0.80000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long, Mary Lease

 

 

 

 

 

 

 

 

 

103

 

146886

 

033540

 

Long, Mary

 

1

 

1.000

 

 

 

no lease or production

 

104

 

153134

 

033540

 

Long, Mary

 

2

 

1.000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long, TC Lease

 

 

 

 

 

 

 

 

 

105

 

71148

 

007906

 

Long, TC

 

1

 

1.000

 

0.75000

 

 

 

106

 

165436

 

No LUW

 

Long, TC

 

3

 

1.000

 

0.75000

 

 

 

 

 

http://sonli
te.dnr.state
.la.us/sund
own/cart_
prod/cart_
con_wellin
fo2?p_wsn
=172480%
20

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6

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

 

107

 

163343

 

 

 

Maxwell SWD

 

1

 

1.000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Meredith C, SK Lease

 

 

 

 

 

 

 

 

 

108

 

183009

 

039273

 

Meredith C, SK

 

1

 

1.000

 

0.80000

 

 

 

109

 

183012

 

039273

 

Meredith C, SK

 

4

 

1.000

 

0.80000

 

 

 

110

 

183013

 

039273

 

Meredith C, SK

 

5

 

1.000

 

0.80000

 

 

 

111

 

154273

 

034685

 

Meredith, Cecil

 

2

 

1.000

 

0.80000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MILES HEIRS Lease

 

 

 

 

 

 

 

 

 

112

 

191214

 

040915

 

MILES HEIRS

 

1

 

1.000

 

0.80000

 

 

 

113

 

191251

 

040915

 

MILES HEIRS

 

4

 

1.000

 

0.80000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MILES - AG OIL EJ Lease

 

 

 

 

 

 

 

 

 

114

 

172482

 

037360

 

MILES-AG OIL-EJ

 

3

 

1.000

 

0.80000

 

 

 

115

 

172483

 

037360

 

MILES-AG OIL-EJ

 

4

 

1.000

 

0.80000

 

 

 

116

 

172480

 

037360

 

MILES-AG OILEJ SWD

 

1

 

1.000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Miles Essex Lease

 

 

 

 

 

 

 

 

 

 

 

http://sonli
te.dnr.state
.la.us/sund
own/cart_
prod/cart_
con_wellin
fo2?p_wsn
=172480%
20

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7

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

 

117

 

190736

 

040778

 

MILES-ESSEX

 

3

 

1.000

 

0.80000

 

 

 

118

 

190783

 

040778

 

MILES-ESSEX

 

4

 

1.000

 

0.80000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MDP Maxwell Lease

 

 

 

 

 

 

 

 

 

119

 

179671

 

038553

 

MDP MAXWELL

 

1

 

1.000

 

0.80000

 

 

 

120

 

179672

 

038553

 

MDP MAXWELL

 

2

 

1.000

 

0.80000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MOP Lease

 

 

 

 

 

 

 

 

 

121

 

91994

 

016494

 

Missouri Pacific RR

 

2

 

1.000

 

0.75000

 

 

 

122

 

83963

 

012886

 

MOP #1 SWD

 

1

 

1.000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

123

 

183703

 

039526

 

MOPAC SSS

 

8

 

1.000

 

0.80000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Morrison, James Lease

 

 

 

 

 

 

 

 

 

124

 

176677

 

038190

 

Morrison, James

 

1

 

1.000

 

0.83000

 

 

 

 

 

 

 

 

 

Maxwell, JC M80 Lease

 

 

 

 

 

 

 

 

 

125

 

170664

 

037215

 

Maxwell, JC M80

 

1

 

1.000

 

0.80000

 

 

 

 

8

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

 

126

 

171769

 

037215

 

Maxwell, JC M80

 

2

 

1.000

 

0.80000

 

 

 

127

 

171770

 

037215

 

Maxwell, JC M80

 

3

 

1.000

 

0.80000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pendarvis Lease

 

 

 

 

 

 

 

 

 

128

 

193250

 

041573

 

PENDARVIS

 

1

 

1.000

 

0.7657824

 

 

 

129

 

193251

 

041573

 

PENDARVIS

 

2

 

1.000

 

0.7657824

 

 

 

130

 

193252

 

041573

 

PENDARVIS

 

3

 

1.000

 

0.7657824

 

 

 

131

 

193253

 

041573

 

PENDARVIS

 

4

 

1.000

 

0.7657824

 

 

 

132

 

193255

 

041573

 

PENDARVIS

 

6

 

1.000

 

0.7657824

 

 

 

133

 

194757

 

041573

 

PENDARVIS

 

7

 

1.000

 

0.7657824

 

 

 

134

 

194759

 

041573

 

PENDARVIS

 

9

 

1.000

 

0.7657824

 

 

 

135

 

194760

 

041573

 

PENDARVIS

 

10

 

1.000

 

0.7657824

 

 

 

136

 

194761

 

041573

 

PENDARVIS

 

11

 

1.000

 

0.7657824

 

 

 

137

 

194762

 

041573

 

PENDARVIS

 

12

 

1.000

 

0.7657824

 

 

 

138

 

194763

 

041573

 

PENDARVIS

 

13

 

1.000

 

0.7657824

 

 

 

139

 

194764

 

041573

 

PENDARVIS

 

14

 

1.000

 

0.7657824

 

 

 

140

 

10281

 

008680

 

PENDARVIS A

 

3

 

1.000

 

0.7657824

 

 

 

141

 

10331

 

008680

 

PENDARVIS A

 

4

 

1.000

 

0.7657824

 

 

 

142

 

971428

 

 

 

PENDARVIS A SWD

 

1

 

1.000

 

 

 

 

 

 

9

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

 

 

 

 

 

 

 

Pendarvis LaPetro Lease

 

 

 

 

 

 

 

 

 

143

 

193828

 

041572

 

Pendarvis - La Petro

 

1

 

1.000

 

0.7657824

 

 

 

144

 

193829

 

041572

 

Pendarvis - La Petro

 

2

 

1.000

 

0.7657824

 

 

 

145

 

193830

 

041572

 

Pendarvis - La Petro

 

3

 

1.000

 

0.7657824

 

 

 

146

 

193831

 

041572

 

Pendarvis - La Petro

 

4

 

1.000

 

0.7657824

 

 

 

147

 

193832

 

041572

 

Pendarvis - La Petro

 

5

 

1.000

 

0.7657824

 

 

 

148

 

193833

 

041572

 

Pendarvis - La Petro

 

6

 

1.000

 

0.7657824

 

 

 

149

 

193834

 

041572

 

Pendarvis - La Petro

 

7

 

1.000

 

0.7657824

 

 

 

150

 

193835

 

041572

 

Pendarvis - La Petro

 

8

 

1.000

 

0.7657824

 

 

 

151

 

193837

 

041572

 

Pendarvis - La Petro

 

10

 

1.000

 

0.7657824

 

 

 

152

 

193838

 

041572

 

Pendarvis - La Petro

 

11

 

1.000

 

0.7657824

 

 

 

153

 

194758

 

041572

 

Pendarvis - La Petro

 

12 SWD

 

1.000

 

 

 

 

 

 

10

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

 

 

 

http://so
nlite.dnr.
state.la.u
s/sundo
wn/cart_
prod/cart
_con_we
llinfo2?p
_wsn=97
1428%2
0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pringle Heirs Lease

 

 

 

 

 

 

 

 

 

154

 

158868

 

035563

 

Pringle Heirs

 

1

 

1.000

 

0.81250

 

 

 

155

 

162747

 

035563

 

Pringle Heirs SWD

 

2

 

1.000

 

 

 

 

 

156

 

19432

 

035563

 

Pringle SWD

 

3

 

1.000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PV 80 MILES TB

 

 

 

 

 

 

 

 

 

157

 

172920

 

037330

 

PV 80 - MILES

 

1

 

1.000

 

0.80000

 

 

 

158

 

172922

 

037330

 

PV 80 - MILES

 

3

 

1.000

 

0.80000

 

 

 

159

 

172923

 

037330

 

PV 80 - MILES

 

4

 

1.000

 

0.80000

 

 

 

160

 

172924

 

037330

 

PV 80 - MILES

 

5

 

1.000

 

0.80000

 

 

 

161

 

172925

 

037330

 

PV 80 - MILES

 

6

 

1.000

 

0.80000

 

 

 

162

 

172926

 

037330

 

PV 80 - MILES

 

7

 

1.000

 

0.80000

 

 

 

163

 

174930

 

037330

 

PV 80 - MILES

 

9

 

1.000

 

0.80000

 

 

 

164

 

182489

 

039369

 

JRB MAXWELL

 

2

 

1.000

 

0.80000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PV 80 - MOPAC Lease

 

 

 

 

 

 

 

 

 

165

 

172927

 

037539

 

PV 80 - MOPAC

 

2

 

1.000

 

0.75000

 

 

 

 

11

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

 

166

 

172928

 

037539

 

PV 80 - MOPAC

 

3

 

1.000

 

0.75000

 

 

 

167

 

172929

 

037539

 

PV 80 - MOPAC

 

4

 

1.000

 

0.75000

 

 

 

168

 

172930

 

037539

 

PV 80 - MOPAC

 

5

 

1.000

 

0.75000

 

 

 

169

 

174030

 

037539

 

PV 80 - MOPAC

 

7

 

1.000

 

0.75000

 

 

 

170

 

174029

 

037539

 

PV 80 - MOPAC

 

8

 

1.000

 

0.75000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tensas BLD Lease

 

 

 

 

 

 

 

 

 

171

 

134605

 

031228

 

Tensas BLD

 

1

 

1.000

 

0.75000

 

 

 

172

 

178732

 

031228

 

Tensas BLD

 

3

 

1.000

 

0.75000

 

 

 

173

 

183525

 

031228

 

Tensas BLD

 

4

 

1.000

 

0.75000

 

 

 

174

 

178731

 

031228

 

Tensas BLD

 

5

 

1.000

 

0.75000

 

 

 

175

 

990623

 

031228

 

Tensas BLD SWD

 

2

 

1.000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tensas BLD A Lease

 

 

 

 

 

 

 

 

 

176

 

59321

 

009515

 

Tensas BLD A

 

1

 

1.000

 

0.80000

 

 

 

177

 

64687

 

009515

 

Tensas BLD A

 

2

 

1.000

 

0.80000

 

 

 

178

 

153875

 

009515

 

Tensas BLD A

 

5

 

1.000

 

0.80000

 

 

 

179

 

153876

 

009515

 

Tensas BLD A

 

6

 

1.000

 

0.80000

 

 

 

 

12

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

 

180

 

182387

 

009515

 

Tensas BLD A

 

7

 

1.000

 

0.80000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tremont B Lease

 

 

 

 

 

 

 

 

 

181

 

187623

 

043930

 

Tremont B

 

1

 

1.000

 

0.78711

 

 

 

182

 

187822

 

043930

 

Tremont B

 

3

 

1.000

 

0.78711

 

 

 

183

 

187824

 

043930

 

Tremont B

 

4

 

1.000

 

0.78711

 

 

 

184

 

188181

 

043930

 

Tremont B

 

5

 

1.000

 

0.78711

 

 

 

185

 

189535

 

043930

 

Tremont B

 

6

 

1.000

 

0.78711

 

 

 

186

 

189696

 

043930

 

Tremont B

 

7

 

1.000

 

0.78711

 

 

 

187

 

191207

 

043930

 

Tremont B

 

9

 

1.000

 

0.78711

 

 

 

188

 

178262

 

043930

 

Tremont B

 

10

 

1.000

 

0.78711

 

 

 

189

 

182059

 

043930

 

Tremont B

 

11

 

1.000

 

0.78711

 

 

 

190

 

182291

 

043930

 

Tremont B

 

12

 

1.000

 

0.78711

 

 

 

191

 

182292

 

043930

 

Tremont B

 

13

 

1.000

 

0.78711

 

 

 

192

 

182295

 

043930

 

Tremont B

 

14

 

1.000

 

0.78711

 

 

 

193

 

182296

 

043930

 

Tremont B

 

15

 

1.000

 

0.78711

 

 

 

194

 

183884

 

043930

 

Tremont B

 

16

 

1.000

 

0.78711

 

 

 

195

 

187820

 

043930

 

Tremont B SWD

 

1

 

1.000

 

 

 

 

 

 

13

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

 

196

 

191205

 

 

 

Tremont B

 

8

 

1.000

 

0.78711

 

P&A but remains on SONRIS

 

197

 

183885

 

 

 

Tremont B

 

17

 

1.000

 

0.78711

 

P&A but remains on SONRIS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tremont SSS Lease

 

 

 

 

 

 

 

 

 

198

 

182799

 

039161

 

Tremont SSS

 

1

 

1.000

 

0.80000

 

 

 

199

 

182800

 

039161

 

Tremont SSS

 

2

 

1.000

 

0.80000

 

 

 

200

 

182801

 

039161

 

Tremont SSS

 

3

 

1.000

 

0.80000

 

 

 

201

 

182802

 

039161

 

Tremont SSS

 

4

 

1.000

 

0.80000

 

 

 

202

 

182803

 

039161

 

Tremont SSS

 

5

 

1.000

 

0.80000

 

 

 

203

 

182804

 

039161

 

Tremont SSS

 

6

 

1.000

 

0.80000

 

 

 

204

 

182805

 

039161

 

Tremont SSS

 

7

 

1.000

 

0.80000

 

 

 

205

 

184928

 

039161

 

Tremont SSS

 

8

 

1.000

 

0.80000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

206

 

990137

 

009660

 

Tullos, Frank

 

1

 

1.000

 

 

 

no lease or production

 

207

 

203730

 

009660

 

Tullos, Frank

 

2

 

1.000

 

 

 

no lease or production

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Urania A Lease

 

 

 

 

 

 

 

 

 

208

 

214541

 

047519

 

URANIA

 

1

 

1.000

 

0.75000

 

 

 

209

 

214542

 

047519

 

URANIA

 

2

 

1.000

 

0.75000

 

 

 

210

 

127062

 

040908

 

URANIA LBR CO A

 

1

 

1.000

 

0.75000

 

 

 

 

14

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

 

211

 

127414

 

040908

 

URANIA LBR CO A

 

2

 

1.000

 

0.75000

 

Sonris records not updated for transfer from Atkins

 

212

 

127415

 

040908

 

URANIA LBR CO A

 

5

 

1.000

 

0.75000

 

 

 

213

 

126926

 

040908

 

URANIA LBR CO A

 

6

 

1.000

 

0.75000

 

 

 

214

 

127417

 

040908

 

URANIA LBR CO A

 

7

 

1.000

 

0.75000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

http://sonlite
.dnr.state.la.
us/sundown/
cart_prod/ca
rt_con_welli
nfo2?p_wsn
=971269%2
0

 

 

 

Urania B Lease

 

 

 

 

 

 

 

 

 

215

 

127264

 

040909

 

URANIA LBR CO B

 

1

 

1.000

 

0.75000

 

 

 

216

 

127418

 

040909

 

URANIA LBR CO B

 

3

 

1.000

 

0.75000

 

Sonris records not updated for transfer from Atkins

 

217

 

214543

 

047519

 

URANIA

 

3

 

1.000

 

0.75000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Urania C TB

 

 

 

 

 

 

 

 

 

218

 

127389

 

040910

 

URANIA LBR CO C

 

1

 

1.000

 

0.75000

 

Sonris records not updated for transfer from Atkins

 

219

 

128428

 

040910

 

URANIA LBR CO C

 

3

 

1.000

 

0.75000

 

 

 

 

15

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

 

220

 

128427

 

040910

 

URANIA LBR CO C

 

6

 

1.000

 

0.75000

 

 

 

221

 

121694

 

040910

 

URANIA LBR CO C

 

7

 

1.000

 

0.75000

 

 

 

222

 

125446

 

040910

 

URANIA LBR CO C

 

8

 

1.000

 

0.75000

 

 

 

223

 

134419

 

029323

 

HARDTNER-EDENBORN

 

1

 

1.000

 

0.75000

 

 

 

224

 

128374

 

040909

 

URANIA LBR CO B

 

4

 

1.000

 

0.75000

 

 

 

225

 

128336

 

040909

 

URANIA LBR CO B SWD

 

2

 

1.000

 

 

 

 

 

226

 

971269

 

 

 

URANIA LBR CO E SWD

 

1

 

1.000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Urania LTF Lease

 

 

 

 

 

 

 

 

 

227

 

187028

 

040144

 

Urania, LTF

 

1

 

1.000

 

0.75000

 

 

 

228

 

193625

 

040144

 

Urania, LTF

 

6

 

1.000

 

0.75000

 

 

 

 

 

http://sonlite
.dnr.state.la.
us/sundown/
cart_prod/ca
rt_con_welli
nfo2?p_wsn
=971269%20

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Urania Shemen TB

 

 

 

 

 

 

 

 

 

229

 

191712

 

041167

 

URANIA-SHEMEN

 

1

 

1.000

 

0.75000

 

 

 

 

16

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

 

230

 

191713

 

041167

 

URANIA-SHEMEN

 

2

 

1.000

 

0.75000

 

 

 

231

 

191714

 

041167

 

URANIA-SHEMEN

 

3

 

1.000

 

0.75000

 

 

 

232

 

115191

 

040839

 

URANIA LBRCO D

 

1

 

1.000

 

0.75000

 

 

 

233

 

115192

 

040839

 

URANIA LBRCO D

 

2

 

1.000

 

0.75000

 

 

 

234

 

115468

 

040839

 

URANIA LBRCO D

 

3

 

1.000

 

0.75000

 

 

 

235

 

191709

 

041134

 

URANIA A-SHEMEN

 

1

 

1.000

 

0.75000

 

 

 

236

 

191784

 

041134

 

URANIA A-SHEMEN

 

2

 

1.000

 

0.75000

 

 

 

237

 

191783

 

041135

 

URANIA C-SHEMEN

 

1

 

1.000

 

0.75000

 

 

 

238

 

191779

 

041135

 

URANIA C-SHEMEN

 

2

 

1.000

 

0.75000

 

 

 

239

 

114278

 

040908

 

URANIA LBR CO A

 

3

 

1.000

 

0.75000

 

 

 

240

 

114442

 

040908

 

URANIA LBR CO A

 

4

 

1.000

 

0.75000

 

 

 

241

 

114534

 

040908

 

URANIA LBR CO A

 

8

 

1.000

 

0.75000

 

 

 

242

 

115773

 

040910

 

URANIA LBR CO C

 

2

 

1.000

 

0.75000

 

 

 

243

 

116282

 

040910

 

URANIA LBR CO C

 

4

 

1.000

 

0.75000

 

 

 

244

 

115986

 

040910

 

URANIA LBR CO C

 

5

 

1.000

 

0.75000

 

 

 

245

 

971328

 

 

 

URANIA LBR CO SWD

 

1

 

1.000

 

 

 

 

 

246

 

191788

 

041134

 

URANIA A-SHEMEN SWD

 

6

 

1.000

 

 

 

 

 

 

17

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

 

 

 

 

 

 

 

Urania Stenco Lease

 

 

 

 

 

 

 

 

 

247

 

126642

 

026661

 

URANIA-STENCO

 

2

 

1.000

 

0.80000

 

 

 

248

 

33328

 

026661

 

URANIA-STENCO

 

3

 

1.000

 

0.80000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Walsh Lease

 

 

 

 

 

 

 

 

 

249

 

72539

 

009846

 

Walsh

 

1

 

1.000

 

0.83000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

White , Mike Lease

 

 

 

 

 

 

 

 

 

250

 

189448

 

040597

 

White, Mike

 

1

 

1.000

 

0.78711

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wright , WE Lease

 

 

 

 

 

 

 

 

 

251

 

175340

 

037484

 

Wright, WE

 

1

 

1.000

 

0.83000

 

 

 

252

 

173245

 

037484

 

Wright, WE

 

2

 

1.000

 

0.83000

 

 

 

253

 

174438

 

037484

 

Wright, WE

 

3

 

1.000

 

0.83000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Zimmerman Lease

 

 

 

 

 

 

 

 

 

254

 

990136

 

010118

 

Zimmerman

 

6

 

1.000

 

0.80000

 

 

 

255

 

43888

 

010118

 

Zimmerman

 

14

 

1.000

 

0.80000

 

 

 

256

 

53293

 

010118

 

Zimmerman

 

16

 

1.000

 

0.80000

 

 

 

257

 

58021

 

010118

 

Zimmerman

 

17

 

1.000

 

0.80000

 

 

 

258

 

62964

 

010118

 

Zimmerman

 

18

 

1.000

 

0.80000

 

 

 

 

18

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

 

259

 

66344

 

010118

 

Zimmerman

 

19

 

1.000

 

0.80000

 

 

 

260

 

68370

 

010118

 

Zimmerman

 

20

 

1.000

 

0.80000

 

 

 

261

 

77368

 

010118

 

Zimmerman

 

22

 

1.000

 

0.80000

 

 

 

262

 

86436

 

010118

 

Zimmerman

 

23

 

1.000

 

0.80000

 

 

 

263

 

40901

 

010118

 

Zimmerman

 

A-4

 

1.000

 

0.80000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

http://sonlite
.dnr.state.la.
us/sundown/
cart_prod/ca
rt_con_welli
nfo2?p_wsn
=990136%20

 

 

 

Zimmerman , Lex Lease

 

 

 

 

 

 

 

 

 

264

 

187003

 

040143

 

ZIMMERMAN, Lex

 

1

 

1.000

 

0.80000

 

 

 

265

 

187004

 

040143

 

ZIMMERMAN, Lex

 

2

 

1.000

 

0.80000

 

 

 

266

 

187007

 

040143

 

ZIMMERMAN, Lex

 

4

 

1.000

 

0.80000

 

 

 

267

 

187008

 

040143

 

ZIMMERMAN, Lex

 

5

 

1.000

 

0.80000

 

 

 

268

 

187010

 

040143

 

ZIMMERMAN, Lex

 

7

 

1.000

 

0.80000

 

 

 

269

 

187011

 

040143

 

ZIMMERMAN, Lex

 

8

 

1.000

 

0.80000

 

 

 

270

 

187012

 

040143

 

ZIMMERMAN, Lex

 

9

 

1.000

 

0.80000

 

 

 

 

19

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

 

271

 

187236

 

040143

 

ZIMMERMAN, Lex

 

14

 

1.000

 

0.80000

 

 

 

272

 

187237

 

040143

 

ZIMMERMAN, Lex

 

15

 

1.000

 

0.80000

 

 

 

273

 

187238

 

040143

 

ZIMMERMAN, Lex

 

16

 

1.000

 

0.80000

 

 

 

274

 

187239

 

040143

 

ZIMMERMAN, Lex

 

17

 

1.000

 

0.80000

 

 

 

275

 

187240

 

040143

 

ZIMMERMAN, Lex

 

18

 

1.000

 

0.80000

 

 

 

276

 

236125

 

40143

 

Zimmerman, Lex

 

19

 

1.000

 

0.80000

 

 

 

277

 

187009

 

040143

 

ZIMMERMAN, Lex SWD

 

6

 

1.000

 

 

 

 

 

278

 

973077

 

040143

 

ZIMMERMAN, Lex SWD

 

12

 

1.000

 

 

 

 

 

 

20

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

 

Exhibit “A-3”

 

Attached to and made a part of that certain

Assignment, Conveyance and Bill of Sale dated effective February 1, 2008

by and between NGS Sub. Corp., as Assignor, and

MWM Energy, LLC, as Assignee

 

CONTRACTS AND OTHER AGREEMENTS

 

9.               Pumping Service Contract by and between NGS Sub Corp. and Carl
Bruce

 

10.         Pumping Service Contract by and between NGS Sub Corp. and Sumrall
Pumper Service

 

11.         Pumping Service Contract by and between NGS Sub Corp. and James W.
Sumrall II

 

12.         Pumping Service Contract by and between NGS Sub Corp. and Lance
Coleman

 

13.         Salt Water Disposal Contract by and between NGS Sub Corp. and
Page Development, LLC for use of the Hardtner A SWD #2

 

14.         Verbal agreement for salt water disposal by Donnie Morrow into
Bradford SWD

 

15.         Verbal agreement for salt water disposal by Quentin Sagdahl into
Bradford SWD

 

16.         Verbal agreement for salt water disposal by AJ  & J Thornton into
Urania SWD

 

1

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

 

Exhibit “A-4”

 

Attached to and made a part of that certain

Assignment, Conveyance and Bill of Sale dated effective February 1, 2008

by and between NGS Sub. Corp., as Assignor, and

MWM Energy, LLC, as Assignee

 

Right-of-Ways, Easements and Surface Leases

 

NONE

 

1

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

 

Exhibit “A-5”

 

Attached to and made a part of that certain

Assignment, Conveyance and Bill of Sale dated effective February 1, 2008

by and between NGS Sub. Corp., as Assignor, and

MWM Energy, LLC, as Assignee

 

SURFACE ESTATES

 

FEE LAND

 

TRACT I:

 

Lots 1, 3, 5, Block 16, Lots 1, 3, 9, 11, Block 21, and Lots 1, 3, 5, 7, 9, 11,
Block 23 of the Original Town of Tullos, Section 26, Township 10 North, Range 1
East, LaSalle Parish, Louisiana

 

TRACT II:

 

A certain parcel of land thirty (30) feet square, situated in the Southwest
corner of property described hereinbelow, with well described below situated
thereon.

 

Monroe Well Service/SSM – SWD #1, serial #971390, Section 25, Township 10 North,
Range 2 East, Tullos-Urania Field, LaSalle Parish, Louisiana.

 

Tracts I and II, being the same land described in that certain Act of Sale and
Assignment dated September 2, 2004 from Atkins Production, Inc. to NGS Sub.
Corp., as recorded in Book 291, Page 179 of the Conveyance Books of LaSalle
Parish, Louisiana.

 

1

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

 

Exhibit “F”

 

Attached to and made a part of that certain

Assignment, Conveyance and Bill of Sale dated effective February 1, 2008

by and between NGS Sub. Corp., as Assignor, and

MWM Energy, LLC, as Assignee

 

LITIGATION AND CLAIMS

 

Litigation:

 

NONE

 

Claims:

 

Those claims relating to certain requests for information from the United States
Environmental Protection Agency, Region 6, pursuant to Clean Water Act
Section 308 relating to a release of hydrocarbons in LaSalle Parish, Louisiana ,
on or about August 1, 2007, identified in NRC Report No. 844158 and HI-07-04354,
and penalties potentially resulting therefrom.

 

1

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

 

Schedule 1.28(j)

 

Attached to and made a part of that certain

Assignment, Conveyance and Bill of Sale dated effective February 1, 2008

by and between NGS Sub. Corp., as Assignor, and

MWM Energy, LLC, as Assignee

 

Excluded Assets

 

Wells and related leasehold for all rights, title and interest in and to:

 

1.             Lexington-Zimmerman #2 Well (SN 187004), together with and
including a 1 acre tract surrounding the wellbore.

 

2.             Zimmerman #6 Well (SN 990136), together with and including a 1
acre tract surrounding the wellbore.

 

The identified wells and acreage are located in the Tullos Urania Field,
Section 25, Township 10 North, Range 1 East, LaSalle Parish, Louisiana.

 

Equipment:

 

1.             Two (2) two hundred (200) barrel swab tanks; and

 

2.             ten (10)  man-way covers.

 

Additional Excluded Assets:

 

1.             Any and all reimbursements, refunds, claims, causes of action,
and any other rights to payment, whether now pending or as may be made or come
due in the future, relating to a release of hydrocarbons in LaSalle Parish,
Louisiana, on or about August 1, 2007, identified in NRC Report No. 844158 and
HI-07-04354, including any insurance proceeds, claims against the Oil Spill
Liability Trust Fund, and recoveries from any third-party.

 

1

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

 

Exhibit D

 

1

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

 

Exhibit “E-1”

 

Attached to and made a part of that certain

Asset Purchase and Sale Agreement dated February 15, 2008

by and between NGS Sub. Corp., as Seller, and

MWM Energy, LLC, as Buyer

 

[INTENTIONALLY LEFT BLANK]

 

1

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

 

Exhibit “F”

 

Attached to and made a part of that certain

Asset Purchase and Sale Agreement dated February 15, 2008

by and between NGS Sub. Corp., as Seller, and

MWM Energy, LLC, as Buyer

 

LITIGATION AND CLAIMS

 

Litigation:

 

NONE

 

Claims:

 

Those claims relating to certain requests for information from the United States
Environmental Protection Agency, Region 6, pursuant to Clean Water Act
Section 308 relating to a release of hydrocarbons in LaSalle Parish, Louisiana ,
on or about August 1, 2007, identified in NRC Report No. 844158 and HI-07-04354,
and penalties potentially resulting therefrom.

 

1

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

 

Exhibit “G”

 

Attached to and made a part of that certain

Asset Purchase and Sale Agreement dated February 15, 2008

by and between NGS Sub. Corp., as Seller, and

MWM Energy, LLC, as Buyer

 

OIL AND GAS IMBALANCES

 

NONE

 

1

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

 

Exhibit “H”

 

Attached to and made a part of that certain

Asset Purchase and Sale Agreement dated February 15, 2008

by and between NGS Sub. Corp., as Seller, and

MWM Energy, LLC, as Buyer

 

CONSENTS TO ASSIGN AND PREFERENTIAL RIGHTS TO PURCHASE

 

The following agreements require consent to assign:

 

1)                                      Oil, Gas and Mineral Lease dated
February 27, 1990 from Louisiana-Pacific Corporation to Atkins Production, Inc.,
as recorded in Conveyance Book 174, Page 631 of the records of LaSalle Parish,
Louisiana.

 

2)                                      Oil and Gas Lease dated September 13,
1972 from Georgia Pacific Corporation to Ed Alexander, as recorded in Oil and
Gas Lease Book 36, Page 388 of the records of LaSalle Parish, Louisiana

 

3)                                      Oil, Gas and Mineral Lease dated
February 1, 2003 from Anadarko Land Corporation to Chadco, Inc., as recorded
Conveyance Book 278, Page 318, as recorded in the records of LaSalle Parish,
Louisiana.

 

4)                                      Oil and Gas Lease dated December 2, 2005
from the LP Mineral Owners to NGS SUB. Corporation, as recorded in Conveyance
Book 300, Page 708 of the records of LaSalle Parish, Louisiana.

 

5)                                      Oil and Gas Lease dated December 5, 2005
from William D. Blake, Agent and Attorney-in-Fact for Henry E. Blake, et al to
NGS Sub Corporation, as recorded in Conveyance Book 300, Page 713 of the records
of LaSalle Parish, Louisiana

 

1

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

 

Exhibit “I”

 

Attached to and made a part of that certain

Asset Purchase and Sale Agreement dated February 15, 2008

by and between NGS Sub. Corp., as Seller, and

MWM Energy, LLC, as Buyer

 

Non-Foreign Certificate

 

Exemption from Withholding of Tax For

Dispositions of U.S. Real Property Interests

 

Article 1445 of the Internal Revenue Code provides that a transferee of a U.S.
real property interest must withhold tax if the transferor is a foreign person. 
To inform MWM Energy, LLC (“Buyer”) that withholding of tax is not required upon
the disposition of a U.S. real property interest by NGS Sub Corp. (“Seller”),
the undersigned hereby certifies as follows:

 

1.             Seller is not a nonresident alien, foreign corporation, foreign
partnership, foreign trust, or foreign estate for purposes of U.S. income
taxation (as those terms are defined in the Internal Revenue Code of 1986, as
amended and the Treasury regulations thereunder).

 

2.             Seller’s taxpayer identifying number is
                            ; and

 

3.             Seller has an office at 2500 City West Boulevard, Suite 1300,
Houston, Texas, 77042.

 

Seller understands that this certification may be disclosed to the Internal
Revenue Service by Buyer and that any false statement contained herein could be
punished by fine, imprisonment, or both.

 

Under penalty of perjury, I declare that I have examined this certification and,
to the best of my knowledge and belief, it is true, correct, and complete, and I
further declare I have authority to sign this document.

 

 

 

NGS SUB CORP.

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

1

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

 

STATE OF TEXAS

§

 

§

COUNTY OF HARRIS

§

 

The foregoing instrument was acknowledged before me this                day of
February 2008, by                                 , as
                                               on behalf of NGS Sub Corp.  a
Delaware corporation.

 

 

 

 

 

Name (Printed, Typed or Stamped)

 

Notary Public in and for the State of Texas

 

2

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

 

Exhibit “J”

 

Attached to and made a part of that certain

Asset Purchase and Sale Agreement dated February 15, 2008

by and between NGS Sub. Corp., as Seller, and

MWM Energy, LLC, as Buyer

 

Certificate (Buyer)

 

This Certificate is being delivered in connection with Section 10.3(b) of that
certain Asset  Purchase and Sale Agreement, dated as of February 15, 2008 (the
“Purchase Agreement”), by and between NGS Sub Corp. (“Seller”) and MWM Energy,
LLC (“Buyer”).  All capitalized terms used herein and not otherwise defined
herein shall have the respective meanings given to those terms in the Purchase
Agreement.

 

The undersigned hereby certifies that he/she is an authorized officer of Buyer
and that he/she has carefully reviewed the contents of this Certificate.  Based
on the foregoing, the undersigned has concluded and certifies on behalf of Buyer
that:

 

(a)           The representations and warranties of Buyer contained in Article 7
of the Purchase Agreement are true and correct in all material respects at and
as of Closing as though such representations and warranties were made at such
time; and

 

(b)           Buyer has complied in all material respects with all covenants and
obligations contained in the Purchase Agreement to be performed or complied with
by Buyer prior to Closing.

 

IN WITNESS WHEREOF, this Certificate is executed by the undersigned as of
[                                       ], 2008.

 

 

MWM ENERGY, LLC

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

1

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

 

Exhibit “J”

 

Attached to and made a part of that certain

Asset Purchase and Sale Agreement dated February 15, 2008

by and between NGS Sub. Corp., as Seller, and

MWM Energy, LLC, as Buyer

 

Certificate (Seller)

 

This Certificate is being delivered in connection with Section 10.2(c) of that
certain Asset Purchase and Sale Agreement, dated as of February 15, 2008 (the
“Purchase Agreement”), by and between MGS Sub Corp. (“Seller”) and MWM Energy,
LLC (“Buyer”) all capitalized terms used herein and not otherwise defined herein
shall have the respective meanings given to those terms in the Purchase
Agreement.

 

The undersigned hereby certifies that he/she is an authorized officer of Seller
and that he/she has carefully reviewed the contents of this Certificate.  Based
on the foregoing, the undersigned has concluded and certifies on behalf of
Seller that:

 

(a)           The representations and warranties of Seller contained in
Article 6 of the Purchase Agreement (i) that are qualified as to Material
Adverse Effect are true and correct as of the Closing Date as though such
representations and warranties were made at such time (except to the extent such
representations and warranties expressly relate to an earlier date, in which
case as of such earlier date), and (ii) those not so qualified are true and
correct as of the Closing Date as though such representations and warranties
were made at such time (except to the extent such representations and warranties
expressly relate to an earlier date, in which case as of such earlier date),
except for failures of the representations and warranties referred to in this
clause (ii) to be true and correct as would not reasonably be expected to have,
in the aggregate, a Material Adverse Effect; and

 

(b)           Seller has complied in all material respects with all covenants
and obligations contained in the Purchase Agreement to be performed or complied
with by Seller prior to Closing.

 

IN WITNESS WHEREOF, this Certificate is executed by the undersigned as of
[                                           ], 2008.

 

 

NGS SUB CORP.

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

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Schedule 1.28(j)

 

Attached to and made a part of that certain

Asset Purchase and Sale Agreement dated February 15, 2008

by and between NGS Sub. Corp., as Seller, and

MWM Energy, LLC, as Buyer

 

Excluded Assets

 

Wells and related leasehold for all rights, title and interest in and to:

 

1.             Lexington-Zimmerman #2 Well (SN 187004), together with and
including a 1 acre tract surrounding the wellbore.

 

2.             Zimmerman #6 Well (SN 990136), together with and including a 1
acre tract surrounding the wellbore.

 

The identified wells and acreage are located in the Tullos Urania Field,
Section 25, Township 10 North, Range 1 East, LaSalle Parish, Louisiana.

 

Equipment:

 

1.             Two (2) two hundred (200) barrel swab tanks; and

 

2.             ten (10)  man-way covers.

 

Additional Excluded Assets:

 

1.             Any and all reimbursements, refunds, claims, causes of action,
and any other rights to payment, whether now pending or as may be made or come
due in the future, relating to a release of hydrocarbons in LaSalle Parish,
Louisiana, on or about August 1, 2007, identified in NRC Report No. 844158 and
HI-07-04354, including any insurance proceeds, claims against the Oil Spill
Liability Trust Fund, and recoveries from any third-party.

 

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Schedule 4.13(e)

 

Attached to and made a part of that certain

Asset Purchase and Sale Agreement dated February 15, 2008

by and between NGS Sub. Corp., as Seller, and

MWM Energy, LLC, as Buyer

 

Company Liabilities

 

NONE, other than as disclosed on Exhibit “F”.

 

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Schedule 4.19

 

Attached to and made a part of that certain

Asset Purchase and Sale Agreement dated February 15, 2008

by and between NGS Sub. Corp., as Seller, and

MWM Energy, LLC, as Buyer

 

Company Banks/Financial Institutions

 

NONE

 

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Schedule 4.23

 

Attached to and made a part of that certain

Asset Purchase and Sale Agreement dated February 15, 2008

by and between NGS Sub. Corp., as Seller, and

MWM Energy, LLC, as Buyer

 

Company Material Contracts

 

NONE

 

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