***Sunray
      Operating Company LLC***


16444
      Old
      Richmond Road


Sugar
      Land, Texas 77478


281/879-9973
      (o)


281/734-5849
      (c)


281/933-9054
      (f)


w5bxx@aol.com








David S. Topp
              *President*




October
      26, 2006


Matrixx
      Resource Holdings, Inc..


23852
      Pacific Coast Hwy., Suite 167


Malibu,
      CA 90265


Attn:
      Catherine Thompson





Re: Participation
      Agreement


Fite
      No.
      3 Well


Sandy
      Point Prospect


Brazoria
      County, Texas





Dear
      Mrs.
      Thompson:





Sunray
      Operating Company LLC (“Sunray”) is the owner of oil and gas leases (“Leases”)
      covering 196 acres, more or less, in the captioned area as described on Exhibit
      “A” attached hereto. Based on information provided by Sunray, you (“Matrixx”)
      have agreed to acquire an undivided interest in the Leases and participate
      in
      the drilling of a 6700’ well, subject to the following terms and
      conditions:





|1. | On
              or before November 8, 2006, Matrixx shall pay to Sunray the sum of
              $7,428.57 as consideration for an assignment from Sunray of an undivided
              10.00% interest in the Leases.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2. | The
              assignment shall be subject to this agreement, the terms of the Leases,
              the Joint Operating Agreement (“JOA”) mentioned below, and burdened with
              royalty and existing overriding royalty interests equal to 25% of 8/8.
              Additionally, Sunray shall be entitled to a one-eighth of eight-eighths
              (12.50% 0f 8/8) working interest, proportionally reduced, at payout
              of the
              above well.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3. | The
              assignment shall be without warranty of title, either express or implied,
              except as to acts by, through or under Sunray, but not
              otherwise.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4. | Concurrently
              with the receipt by Sunray of the above sum and the receipt by Matrixx
              of
              the above assignment, the parties hereto agree to be bound by the terms
              of
              the form of JOA which names Sunray as the initial Operator and governs
              all
              further operations on the Leases, a copy of which is submitted
              herewith.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|5. | Since
              it is anticipated the drilling of the Fite No. 3 well is eminent, you
              will
              forward to Sunray $44,500.00, representing your proportionate share
              of the
              estimated dry hole cost of $445,000.00, on or before November 8,
              2006.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------







The
      activities of this drilling program will involve a high degree of risk and
      results cannot be predicted. There is no assurance that any oil or gas
      production will be obtained through the activities undertaken pursuant to this
      program or that such production, if obtained, will enable Matrixx to make a
      profit on or even recoup its investment. In addition, hazards such as unusual
      or
      unexpected formations, pressures or other conditions are involved in drilling
      wells.





Matrixx
      represents that it is aware that there is no assurance that this drilling
      program will not be treated as an association, taxable as a corporation and
      further, that there is no assurance that the current Federal income tax laws
      will not be changed.





It
      is not
      the purpose or the intention of this Agreement to create, nor shall the same
      be
      construed as creating any mining partnership, commercial partnership, or other
      partnership relation; nor shall the operations of parties hereunder be construed
      to be considered a joint venture or any association that would make either
      party
      liable to the other party for any claims whatsoever.





Kindly
      acknowledge that the foregoing represents the entire agreement between Sunray
      and Matrixx by executing below and returning one fully executed copy to
      Sunray.





Sunray
      Operating Company LLC











By___________________________


David
      S.
      Topp


President





AGREED
      TO
      AND ACCEPTED


This_____day
      of _________, 2006.





Matrixx
      Resource Holdings, Inc.











By________________________________


Catherine
      Thompson


President