Exhibit
        10.11

      


      CONFIDENTIAL
        TREATMENT

      REQUESTED
        PURSUANT TO RULE 24b-2

    

     

    Certain
      portions of this exhibit have been omitted pursuant to a request for
      confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934.
      The omitted materials have been filed separately with the Securities and
      Exchange Commission.

    


    Bach
      Enterprises

    2777
      Lynx
      Lane

    Kingsley,
      Michigan 49649

    


    July
      10th,
      2006

    


    Aurora
      Oil & Gas Corporation 

    Attn:
      William Deneau

    4110
      Copper Ridge Drive 

    Suite
      100

    Traverse
      City, MI 49684

    


    
      	
            	Re:	
              Purchase
                of Certain Assets 

            


    

     

    Dear
      Mr.
      Deneau:

    


    This
      letter indicates the binding agreement of Aurora Oil & Gas Corporation
      ("AOG"), or its wholly owned subsidiary ("Buyer"), to purchase all of the assets
      held by Bach Enterprises, Inc. ("Company") (including certain assets used by
      the
      Company but owned by Bach Energy LLC ("Energy")). Richard and Robin Bach
      (collectively, "Stockholders") agree to cause. Company to carry out the terms
      and conditions contained in this letter of intent ("Letter of
      Intent").

     

    
      	 	
              1.

            	
              Form.
                Stockholders
                will cause Company to transfer its assets into Buyer or Buyer's designated
                wholly owned subsidiary in the form of a tax-deferred exchange pursuant
                to
                368(a)(1)(C) of the Internal Revenue Code of 1986, as
                amended.

            


    

     

    
      	 	
              2.

            	
              Assets
                Involved &
                Liabilities
                Assumed. Prior
                to the asset transfers to Buyer, Stockholders will transfer to Company
                all
                of Stockholders' interest in all intellectual property previously
                developed by them, and will transfer the assets set forth on the
                attached
                Exhibit
                A,
                which are held by Energy (which includes certain equipment, intellectual
                property, and majority interests in certain oil and natural gas assets
                described on Exhibit
                B). In
                addition to the assets on Exhibit B, the assets of Company to be
                transferred to Buyer shall include the Company's assets listed on
                Exhibit
                C. Buyer
                shall assume no liabilities other than trade payables and other
                liabilities disclosed on Company's financial statements or the attached
                Exhibit
                D.

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

      Page
        2

    

     

    
      	 	
              3.

            	
              Oil
                &
                Gas
                Working Interests. Energy
                will retain its working interest in producing properties. As to
                undeveloped leasehold (prospects), Energy will assign to Company
                all of
                its working interest in each lease, reserving an overriding royalty
                interest in each lease equal to .5 x (.20 - existing lease burdens).
                The
                reserved overriding royalty interest shall bear the same production
                and
                post-production costs as the lessor's royalty in the oil and gas
                lease(s)
                from which the overriding royalty interest is derived. Company will
                bear a
                3% carried working interest (at 80% nri in favor of third parties)
                to the
                tanks (if oil) or to the meter (if gas). Company can then recoup
                out of
                production attributable to the carried working interest the costs
                from
                total depth to the tanks or meter, as the case may be. The stated
                carried
                working interest shall be owned by a certain third party as to 2%,
                and
                another third party as to 1%. Energy shall also have the right to
                participate to the extent of up to an undivided 10% working interest
                at
                cost in any wells drilled by Aurora on the leasehold assigned, subject
                to
                its proportionate share of the carried working interests in favor
                of third
                parties. Company's interests, as assigned from Energy to Company
                per the
                above, shall be transferred as part of the assets transferred to
                Buyer's
                subsidiary at the closing.

            


    

     

    
      	 	
              4.

            	
              RB
                Investment LLC. RB
                Investments LLC, which is controlled by Stockholders, shall convey
                to
                Company prior to the closing all membership interests in Aurora Antrim
                North, LLC and Aurora Holdings, L.L.C. claimed by RB Investments,
                LLC, a
                Michigan limited liability company. Such LLC interests shall be part
                of
                the assets transferred by Company to
                Buyer.

            


    

     

    
      	 	
              5.

            	
              Purchase
                Price. The
                purchase price will be $4.7 million worth of AOG stock, plus $765,000
                of
                cash. The number of AOG shares to be transferred at closing shall
                be based
                on a per share price equal to the average of the AMEX daily closing
                prices
                for the 30-day calendar period immediately preceding (and: not: including)
                the day of closing. The purchase price shall be allocated as
                follows:

            


    

    

      
        	
                AOG
                  Stock:

              	
                4,700,000

              	 	 	 	 
	 	 	 	 	 	 
	 	 	 	
                3,850,000

              	 	
                Bach
                  Enterprise corporation value

              
	 	 	 	 	 	 
	 	 	 	
                250,000

              	 	
                intellectual
                  property

              
	 	 	 	 	 	 
	 	 	 	
                600,000

              	 	
                oil
                  and gas interests from Bach Energy added

              
	 	 	 	 	 	 
	 	 	 	
                4,700,000

              	 	
                TOTAL—for
                  Bach Enterprises and certain assets in Bach Energy

              
	 	 	 	 	 	 
	
                Cash
                  at closing:

              	
                765,000

              	 	
                400,000

              	 	
                salary
                  down payment

              
	 	 	 	 	 	 
	 	 	 	
                100,000

              	 	
                covenant
                  not to compete payments

              
	 	 	 	 	 	 
	 	 	 	
                200,000

              	 	
                oil
                  & gas interests purchased for cash

              
	 	 	 	 	 	 
	 	 	 	
                65,000

              	 	
                based
                  on $450,000 value of real estate less $385,000 of debt

              
	 	 	 	 	 	 
	
                
                  
                    
                      
                        
                          TOTAL
                            OF ABOVE:

                        

                      

                    

                  

                

              	
                5,465,000

              	 	 	 	 
	 	 	 	 	 	 
	
                ***

              	
                 ***

              	 	 	 	 


      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

      

        Page
          3

      

       

    

    
      	 	
              6.

            	
              AOG
                Stock. The
                AOG stock to be transferred at closing will be unregistered, unrestricted
                stock that is subject to Rule 144 trading limitations. There will
                be a
                one-year lock-up period for the AOG stock transferred at closing,
                during
                which time the AOG stock may not be sold (however, this lock-up period
                will not prohibit Stockholders from selling any shares in Buyer that
                were
                previously acquired and Stockholders shall not be subject to Rule
                144
                limitations for their previously acquired
                stock).

            


    

     

    
      	
            	7.	
              Closing
                Date. Closing
                shall occur within 90 days of this
                letter.

            


    

     

    
      	 	
              8.

            	
              Employment.
                Each
                of Stockholders will become employees of Buyer's subsidiary (with
                performance guaranteed by Buyer) and will enter into employment agreements
                having five-year terms. The total salary to be paid to each of the
                Stockholders over the five-year term shall be at least ***. Neither
                Stockholder's employment may be terminated without just cause. In
                the
                event of a termination without just cause, 75% of the compensation
                due for
                the remainder of the employment term will be due and payable as liquidated
                damages. Stockholders will be eligible to receive and included in
                the
                stock options pool for Buyer's current key
                employees.

            


    

     

    
      	 	
              9.

            	
              Employee
                Bonuses. Bonus
                opportunities will be discussed by the parties after the
                closing.

            


    

     

    
      	 	
              10.

            	
              Covenant
                Not to Compete; Confidential Information. Stockholders
                will agree not to compete anywhere in the United States during their
                employment and for a period of one year following the termination
                of their
                employment; provided, however, Stockholders shall not compete during
                the
                remaining term of their employment agreement, plus one year, if Buyer
                pays
                the liquidated damages indicated in Section 8 following Buyer's
                termination without cause. Stockholders will agree not to use any
                confidential information regarding Company and Buyer. In exchange
                for the
                covenants not to compete and in addition to payment of the Price
                as stated
                above, each Seller shall be paid
                $***.

            


    

     

    
      	 	
              11.

            	
              Confidentiality
                Information. Prior
                to closing, Buyer and its agents will keep all information which
                is
                proprietary to Stockholders or Company confidential ("Confidential
                Information") and shall refrain from disclosing such without the
                prior
                written approval of Stockholders. In the event this agreement is
                breached
                and the closing does not occur, Buyer will, upon Stockholders' request,
                return to Stockholders or destroy all copies of documents within
                Buyer's
                possession or control containing information Stockholders have provided
                to
                Buyer. The confidentiality obligations contained herein will not
                be deemed
                to restrict the use and/or disclosure by Buyer of any information
                that is
                or becomes publicly known or within the public domain without the
                breach
                of this Letter of Intent by Buyer or that is required by any court
                or
                governmental agency or authority. Without limiting its remedies,
                Stockholders are expressly granted a right to enforce the confidentiality
                obligation contained in this paragraph by injunctive
                relief.

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

      Page
        4

    

     

    
      	 	
              12.

            	
              Costs
                and Expenses. Each
                party will bear its own costs and expenses in connection with the
                proposed
                transactions, including without limitation, the costs of their respective
                legal counsel, brokers, accountants, engineers, and other professional
                advisors.

            


    

    


    
      	 	
              13.

            	
              Governing
                Law. The
                purchases contemplated herein and all related documents shall be
                governed
                by and enforced under Michigan law.

            


    

     

    
      	 	
              14.

            	
              Due
                Diligence. Buyer
                shall have a period of 60 days to conduct its due diligence; provided,
                however, Buyer shall be required to close unless Buyer discovers
                information during its due diligence period that materially and adversely
                affects the value of the Company or if Buyer discovers liens other
                than
                Company's bank debt and business lines of credit. An item (or items
                cumulatively) shall be considered material if it exceeds 5% of the
                purchase price indicated in Section 5. During the 60-day due diligence
                period, Buyer may send representatives to Company's place of business
                and
                Stockholders shall provide and make available to Buyer's representatives
                all existing documentation reasonably requested by Buyer. If Buyer
                discovers an item (or items) it considers as material, it shall give
                Stockholders written notice of such items and allow the Stockholders.
                or
                the Company a period of 30 days to remedy the item(s); Buyer shall
                close
                if the item is remedied or
                eliminated.

            


    

     

    
      	 	
              15.

            	
              Representations
                &
                Warranties.
                Stockholders
                shall represent that the assets are free and clear of liens except
                for
                disclosed bank debt and trade payables, that the assets can be freely
                transferred, that the obligations are binding on the. Stockholders
                and the
                Company, that there is proper corporate authority, that the business
                has
                been conducted in compliance with laws, and that there is no pending
                or
                threatened proceedings. Buyer shall otherwise acquire the Company's
                assets
                in an "as is - where is" condition. A brief Asset Purchase Agreement
                shall
                be prepared consistent with this Section; it shall be prepared within
                30
                days of the last party signing this
                letter.

            


    

     

    
      	 	
              16.

            	
              Real
                Estate. Buyer
                shall acquire from Stockholders (and their co-owner) the limited
                liability
                company known as Kingsley Development LLC ("Kingsley"), which holds
                the
                office used by the Company. The price for the real estate shall be
                the
                portion of the purchase price indicated in Section 4 above plus assumption
                of the mortgage against the real estate. Title to the real estate
                shall
                effectively be conveyed by transferring the LLC membership interests
                in
                Kingsley to Buyer. Stockholders represent that they own voting control
                of
                Kingsley and have authority to cause the transfer of the real estate
                held
                by Kingsley in the event the third LLC member of Kingsley will not
                agree
                to convey his LLC interest.

            


    

    


    Once
      signed, this Letter of Intent is binding on and constitutes the agreement of
      the
      parties. This Letter of Intent is intended to impose an obligation on
      Stockholders and Buyer to bargain in good faith to the extent necessary to
      agree
      to further details of the transaction.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

      

        Page
          5

         

      

    

    Please
      indicate your agreement with the Letter of Intent by signing below. This Letter
      of Intent may be signed in any number of counterparts, each of which shall
      be
      deemed an original, but all of which, when taken together, shall constitute
      one
      instrument. Buyer's signature hereto shall
      mean that Buyer's board of directors has consented to the terms herein or that
      the board has
      delegated authority to effectuate this transaction, pursuant to the terms
      hereof, to the corporate officers signing this letter agreement on behalf of
      Buyer.

    


    
      	 	
              Very
                truly yours,

               

              /s/
                Richard G. Bach

               

              Richard
                G. Bach

            	
               

               

              /s/
                Robert W. Bach

               

              Robin
                W. Bach

            


    

    


    Accepted
      and agreed to on July
      10th
      ,
      2006.


    

      
        	
                Aurora
                  Oil & Gas Corporation

              
	 
	
                By:

              	
                /s/
                  William W. Deneau

              
	 	
                William
                  W. Deneau, its President