EXHIBIT
      10.17

    


     

    


    


    October
      16, 2007

      

    Mr.
      Bradley W. Fischer

    1061
      Smith Road

    Xenia,
      Ohio 45385 

     

    
      
        	RE:	
                Separation
                  and Release Agreement

              


      

    

     

    Dear
      Mr.
      Fischer:

    


    This
      letter (“Separation and Release Agreement” or “Agreement”) is your notice that
      we accept your resignation as a director of Chancellor Group, Inc., a Nevada
      corporation (“Chancellor” or “the Company”) and from all offices held by you in
      Chancellor, or in Gryphon Production Company, LLC and Gryphon Field Services
      Company, LLC (subsidiaries of Chancellor, the “Gryphon Subsidiaries”), effective
      October 16, 2007 (the “Separation Date”). This Agreement also sets forth the
      terms and conditions of Chancellor’s and the Gryphon Subsidiaries’ termination
      of employment (“Employment”) with you.

    


    In
      consideration of your agreements made as provided herein, Chancellor and the
      Gryphon Subsidiaries, jointly and severally, agree to and shall indemnify you
      and hold you harmless if you are a party to or threatened to be made a party
      to
      or otherwise involved in any threatened, pending or completed action, suit
      or
      proceeding, against the Company or the Gryphon Subsidiaries, whether of a civil,
      criminal or administrative or investigative nature, (other than an action or
      proceeding by or in the name of the Company to procure a judgment in its favor),
      against all expenses, judgments, fines, and penalties actually and reasonably
      incurred (or which would be incurred but for this indemnity and hold harmless
      obligation) by you in connection with the defense or settlement of such action
      or proceeding, to the fullest extent permitted by Nevada law; provided that
      any
      settlement be approved in writing by the Company.

    


    Further,
      Chancellor, the Gryphon Subsidiaries and the undersigned directors and
      shareholders of Chancellor, as releasors (the “Chancellor Releasors”), remise,
      release and forever discharge you, your respective, agents, representatives,
      heirs, successors and assigns, jointly and severally, from any and all debts,
      demands, actions, causes of action, suits, damages, claims and liabilities
      based
      on matters relating to your Employment or any other matter of whatever kind
      or
      nature, known or unknown, suspected or unsuspected, accrued or unaccrued,
      whether in law, equity or otherwise, and whether under contract, warranty,
      tort
      or otherwise, which the Chancellor Releasors ever had, now have or may have,
      claim or assert from the beginning of the world to the date of this Separation
      and Release Agreement, excepting for your obligations under this Separation
      and
      Release Agreement. 

    


    Chancellor’s,
      its directors’ and shareholders’ and Gryphon Subsidiaries’ agreements to provide
      you with the indemnification and releases outlined above is conditioned upon
      your agreement to the following: 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    First,
      In
      consideration for settlement of the termination of your employment as provided
      hereinabove and the agreements of the Chancellor Releasors made as provided
      herein, you waive any rights to any salary or unreimbursed expenses owed to
      you
      by Chancellor or the Gryphon Subsidiaries, and you, as releasor, remise, release
      and forever discharge the Chancellor Releasors, their respective officers,
      directors, agents, representatives, counsel, successors and assigns, jointly
      and
      severally, from any and all debts, demands, actions, causes of action, suits,
      damages, claims and liabilities based on matters relating to your Employment
      or
      any other matter of whatever kind or nature, known or unknown, suspected or
      unsuspected, accrued or unaccrued, whether in law, equity or otherwise, and
      whether under contract, warranty, tort or otherwise, which you ever had, now
      have or may have, claim or assert from the beginning of the world to the date
      of
      this Settlement Agreement, excepting for the obligations of the Chancellor
      Releasors under this Separation and Release Agreement.

    


    Second,
      you agree that you will promptly return to Chancellor all certificates for
      shares of common stock of Chancellor owned by you for cancellation, such
      certificates to be endorsed to the Company; provided, that, you shall not be
      obligated to return to Chancellor your certificate for 1,000,000 shares of
      common stock of Chancellor that was lost, and your execution of this Separation
      and Release Agreement shall constitute the assignment of all right, title and
      interest in and to that certificate to the Company. You will return all Company
      property, data, and information belonging to Chancellor and the Gryphon
      Subsidiaries and agree that you will not use or disclose to others any
      confidential or proprietary information concerning Chancellor and the Gryphon
      Subsidiaries or the Released Parties. In addition, you agree to keep the terms
      of this Separation and Release Agreement confidential between you and Chancellor
      and the Gryphon Subsidiaries, except that you may tell your immediate family
      and
      your attorney or accountant, if any, as needed, but in no event should you
      discuss this Agreement or its terms with any current employee of Chancellor
      and
      the Gryphon Subsidiaries. 

    


    Third,
      Chancellor and the Gryphon Subsidiaries, and the undersigned directors of
      Chancellor, and you agree that neither will make any written or verbal
      statements, or encourage others to make any such statements, that disparage
      or
      criticize the personal or business reputation, practices or conduct of
      Chancellor, any of its directors, the Gryphon Subsidiaries or any of the other
      Released Parties, or you. Chancellor, the Gryphon Subsidiaries and the
      undersigned directors and shareholders of Chancellor will not make any written
      or verbal statements, or encourage others to make any such statements, that
      disparage or criticize your personal or business reputation, practices or
      conduct.

    


    Fourth,
      Chancellor will state to prospective employers the following information either
      in writing or orally:

    


    Mr.
      Fischer was employed by Chancellor and the Gryphon Subsidiaries from April
      13th,
      2007
      until the Separation Date as President and Chief Executive Officer. The
      employment relationship between Mr. Fischer and Chancellor and the Gryphon
      Subsidiaries was terminated by his voluntary resignation.

    


    Fifth,
      you agree to transition to Chancellor and the Gryphon Subsidiaries and their
      employees electronic files and directory, correspondence, agreements, collateral
      materials, and other such matters as may be considered consequential to their
      ongoing business.

    


    Sixth,
      nothing in this agreement shall be construed to alter, modify, or limit your
      rights (i) pursuant to applicable statutes, common law, or insurance provisions
      to seek or obtain indemnification from Chancellor and the Gryphon Subsidiaries
      respecting defense costs, judgments and other liabilities, and (ii) to assert
      a
      claim for reimbursement under any potentially applicable directors and officers
      liability insurance policy.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    Finally,
      you agree that after the Separation Date, you will not, either directly or
      indirectly, separately or in association with others, (1) interfere with
      Chancellor and the Gryphon Subsidiaries’ relationship with any of their
      investors or prospective investors; and (2) current or prospective employees
      by
      soliciting, encouraging or causing others to solicit or encourage any of them
      to
      discontinue their employment with Chancellor or the Gryphon
      Subsidiaries.

     

    This
      Separation and Release Agreement is intended to satisfy the Older Workers’
Benefit Protection Act, 29 U.S.C. section 626(f). Accordingly, by signing this
      Agreement where indicated below, you acknowledge: (1) that you have read and
      understand the terms of this Agreement; (2) that you have consulted an attorney
      at your own expense and not relied on advice of Jackson & Campbell, P.C.,
      counsel for Chancellor, who is not representing you; and (3) that you have
      consulted your legal counsel as you deem necessary, such that you are signing
      this Agreement freely, knowingly and voluntarily. You will have twenty-one
      (21)
      days from today to consider whether or not to sign this Agreement. You are
      not
      required to use the full 21 days. 

    


    This
      Separation and Release Agreement is intended to be a binding legal document
      and
      contains all of the agreements between you and Chancellor and the Gryphon
      Subsidiaries and the undersigned directors and shareholders with respect to
      your
      employment and termination from Employment. The terms of this Agreement cannot
      be modified except in a written document signed by both of us. This Agreement
      is
      effective and your resignation is effective as of the date on the date set
      forth
      in the first paragraph hereof.

     

    If
      the
      foregoing terms and conditions are entirely satisfactory to you, please date
      and
      sign this Separation and Release Agreement below and return the original to
      the
      Company.

    


    Sincerely,

    


    CHANCELLOR
      GROUP, INC.

    


    By:
      /s/
      Thomas Grantham

    Thomas
      H.
      Grantham, President 

     

    


    GRYPHON
      PRODUCTION COMPANY, LLC

     

    By:
      /s/
      Thomas Grantham

    Thomas
      H.
      Grantham, President

    


    


    GRYPHON
      FIELD SERVICES COMPANY, LLC

     

    By:
      /s/
      Thomas Grantham

    Thomas
      H.
      Grantham, President

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    AGREED:

     

    /s/
      Bradley W. Fischer

    Bradley
      W. Fischer

    


    Date: ___________________

    


    CHANCELLOR
      GROUP, INC. DIRECTORS AND SHAREHOLDERS:

     

    /s/
      Maxwell Grant

    Maxwell
      Grant

     

    Date:
      22
      October, 2007

     

     

    /s/
      Robert Gordon

    Robert
      Gordon

     

    Date:
      22/10/07

     

     

    /s/
      Dudley Muth

    Dudley
      Muth

    


    Date:
      22/10/07

     

     

    /s/
      John Lee

    John
      C.Y.
      Lee

    


    Date:
      22/10/07

     

     

    /s/
      Peter Harris

    Peter
      Harris

    


    Date:
      22/10/07

     

    


    
      
         

      

      
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