Exhibit
      10.3

    


    SUPPLEMENTAL
      FARM- OUT ASSIGNMENT

    


    THIS
      FARM-OUT ASSIGNMENT made and entered into this the 10th day of December, 2007,
      by and between K & D ENERGY, a Kentucky Partnership, by Partners, Danny
      Thomasson, of P. O. Box 360, Bremen, Kentucky 42325, and Keith Conn, 85 Tyson
      Lane, Dunmore, Kentucky 42339, being all partners in the partnership,
      hereinafter ASSIGNOR and KY USA ENERGY, INC., C/O Steve Eversole, 321 Somerset
      Road, London, Kentucky 40741, hereinafter ASSIGNEE;

    


    WITNESSETH:
      Whereas, ASSIGNOR owns certain oil and gas leases in West Central, Kentucky,
      more specifically described hereinafter and desire to do this Farm-Out
      Assignment to ASSIGNEE to form a core basis for a publicly traded company so
      that money can be raised to fully develop the project from which ASSIGNOR will
      receive a carried working interest and by their signatures below the parties
      agree to this Assignment on the following terms and conditions:

    


    WHEREAS,
      ASSIGNOR has previously assigned the three (3) leases described below to
      ASSIGNEE, but these three (3) leases were about to expire; and

    


    WHEREAS,
      ASSIGNOR has acquired a new lease to replace those that were about to expire
      and
      does now desire to assign the new leases under the same terms and conditions
      as
      set out in the previous assignment;

    


    NOW,
      THEREFORE, for and in consideration of the above terms and conditions, and
      one
      dollar ($1.00) plus other good and valuable considerations, the receipt and
      sufficiency of which are acknowledged, the ASSIGNOR does hereby bargain,
      transfer and assign to ASSIGNEE the following described Oil and Gas
      Leases:

    


    
      	
              Lease
                Name

            	 	
              County

            	 	
              Lease
                Book/Page

            	 	
              Date

            	 	
              Acreage

            	 
	 	 	 	 	 	 	 	 	 	 
	
              Lakefield/Taylor

            	 	
              Muhlenberg

            	 	
              94/734

            	 	
              10/18/07

            	 	
              130

            	 
	
              Freda/Jeff
                Johnston

            	 	
              Todd

            	 	
              22/697

            	 	
              10/8/07

            	 	
              323

            	 
	
              Jeff
                Johnston

            	
                

            	
              Christian

            	
                

            	
              43/464

            	
                

            	
              10/8/07

            	
                

            	
              326

            	
                

            


    

    



    
      
         

      

      
         

        
          

        

      

      
         

      

    

    


    TO
      HAVE
      AND TO HOLD unto ASSIGNEE, its successors and assigns, a 75% Net Revenue
      Interest as the 100% Working Interest in above described leases, subject to
      all
      the aforesaid terms and conditions, as well as all terms and conditions in
      the
      original leases with only such Warranty of title as ASSIGNOR actually possesses,
      subject to all terms and conditions of a prior Assignment dated October 4,
      2007
      and recorded as follows: 

    


    
      	
              Todd
                County

            	
              Lease
                Book 22, Page ______

            
	
              Muhlenberg
                County

            	
              Lease
                Book 94, Page 697

            
	
              Christian
                County

            	
              Lease
                Book 43, Page 484

            


    

    


    ASSIGNOR
      does warrant that there are no undisclosed material defects in the above leases
      of which ASSIGNOR is aware and the ASSIGNOR has taken no action or made no
      omissions in actions that would render any of the above leases invalid or of
      no
      effect. 

    


    WITNESS
      the signatures of the parties hereto on this the ____ day of October,
      2007.

    


    
      	 	
              K
                & D ENERGY

            
	 	 
	 	
              BY:

            	 	 
	 	 	
              DANNY
                THOMASSON, Partner

            
	 	 
	 	
              BY:

            	 	 
	 	 	
              KEITH
                CONN, Partner

            
	 	 	
              By:
                Danny Thomas son, POA

            
	 	
              ASSIGNOR

            
	 	 
	 	
              KY
                USA ENERGY, INC.

            
	 	 
	 	
              BY:

            	 	 
	 	 	
              STEVE
                EVERSOLE

            
	 	 	
              ASSIGNEE

            


    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    


    COMMONWEALTH
      OF KENTUCKY

    


    COUNTY
      OF____________________

    


    SIGNED
      AND ACKNOWLEDGED to before me by K & D ENERGY, by and through its partner,
      DANNY THOMASSON, who personally appeared before me and known to me or
      satisfactorily identified by me, to be his free act and deed, on this the 10th
      day of October, 2007.

    


    __________________________________

    NOTARY
      PUBLIC

    My
      Commission Expires:_____________

    


    


    COMMONWEALTH
      OF KENTUCKY

    


    COUNTY
      OF
      ______________

    


    


    SIGNED
      AND ACKNOWLEDGED to before me by K & D ENERGY, by and through its partner,
      KEITH CONN, who personally appeared before me and known to me or satisfactorily
      identified by me, to be his free act and deed, on this the 10th day of October,
      2007.

    


    


    __________________________________

    NOTARY
      PUBLIC

    My
      Commission Expires:____________

    


    


    COMMONWEALTH
      OF KENTUCKY

    


    COUNTY
      OF
      ______________

    


    


    SIGNED
      AND ACKNOWLEDGED to before me by KY USA ENERGY, INC. by and through STEVE
      EVERSOLE, who personally appeared before me or satisfactorily identified by
      me,
      to be his free act and deed, on this the 10th day of October,
      2007.


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    


    ___________________________________

    NOTARY
      PUBLIC,

    My
      Commission Expires: 

    



    


    THIS
      INSTRUMENT PREPARED BY:

    


    BASIL
      LAW
      FIRM

    231
      West
      Main Street

    Glasgow,
      Kentucky 42141

    TELEPHONE:
      270-651-9822

    FAX:
      270-651-8026

    


    
      	
              BY:

            	 	 
	 	
              DANNY
                J. BASIL

            	 


    

    


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