ex_10-3.htm


    Exhibit
      10.3

     

     

     

    
      


      PURCHASE
        AND SALE AGREEMENT

      


      


      This
        Purchase and Sale Agreement
        (referred to herein as the “Agreement”) is between SUMMIT PETROLEUM
        MANAGEMENT CORPORATION, a Texas corporation whose address is 550 West
        Texas, Suite 700, Midland, Texas 79701, SUMMIT
        PETROLEUM LLC, a Texas limited liability corporation whose address is
        550 West Texas, Suite 700, Midland, Texas 79701 (all of which
        are collectively referred to herein as the “Seller(s)”) and LEGACY
        RESERVES OPERATING LP, a Delaware limited partnership whose address is
­­­­­­­­­­­­­­­­­­303
        West Wall, Suite 1600, Midland, Texas 79701, (referred to herein as the “Buyer”)
        is made and entered August 28, 2007, to be effective for all intents and
        purposes as of the Effective Time designated herein.

      


      Seller
        and Buyer for and in
        consideration of the mutual promises and covenants under this Agreement,
        the
        benefits to be derived by each party, and for other good and valuable
        consideration, the receipt and sufficiency of which are hereby acknowledged,
        agree as follows:

      


      


      ARTICLE
        1

      RECITALS

      


      Seller
        desires to sell to Buyer, and
        Buyer desires to purchase from Seller, certain oil and gas properties and
        related Properties on the terms and conditions set forth in this
        Agreement.

      


      Seller
        and Buyer for and in
        consideration of the mutual promises and covenants under this Agreement,
        the
        benefits to be derived by each party, and for other good and valuable
        consideration, the receipt and sufficiency of which are hereby acknowledged,
        agree as follows:

      


      


      ARTICLE
        2

      PURCHASE
        AND SALE

      


      2.1           Purchase
        and Sale.  Seller agrees to sell and convey all of its right,
        title and interest in and to the Property or Properties (as defined in Article
        2.2) and Buyer agrees to purchase the Property or Properties (as defined
        in
        Article 2.2), subject to the terms and conditions of this
        Agreement.

      


      2.2           Properties
        Defined.  The undivided interest described as follows and on
        Exhibit “A” (hereafter called the “Property or Properties”), except as excluded
        in Article 2.2(e):

      


      
        	
                 

              	
                (a)

              	
                Leases,
                  Lands, Wells and Pooling and Unitization Agreements.  All of
                  Seller’s right, title, and interest of whatever nature in all leasehold
                  and other interests in; (i) the oil, gas and mineral leases limited
                  to
                  those portions described on Exhibit “A” and including the working and net
                  revenue interests set forth therein (the “Leases”), insofar and only
                  insofar as said Leases include and pertain to and cover the lands
                  and
                  depths as specifically described herein on attached Exhibit “A” (the
                  “Lands”); (ii) the oil and gas wells located on the Leases or on Lands
                  pooled or unitized therewith (the “Wells”) including those listed on
                  Exhibit “A”; and (iii) the units, pooled acreage, spacing or proration
                  units or other allocation of acreage applicable to the Wells established
                  by or in accordance with the applicable state, federal or local
                  law;

              


      

      


      
        	
                 

              	
                (b)

              	
                Production.  Hydrocarbons
                  produced from or allocable to the Wells for periods on or after
                  the
                  Effective Time (as defined in Section 2.3) and the proceeds
                  therefrom;

              


      

      


      
        	
                 

              	
                (c)

              	
                Equipment.  Personal
                  property, equipment, fixtures, and improvements appurtenant to
                  or located
                  on the Leases or the Lands, or used or obtained in connection with
                  the
                  ownership or operation of the Properties,
                  and

              


      

      


      
        	
                 

              	
                (d)

              	
                Easements,
                  Contracts, Land Files and Records.  (i) appurtenances,
                  surface leases, easements, permits, licenses, servitudes and
                  rights-of-way; (ii) all leases, farmout agreements, unitization
                  agreements, pooling agreements, unit declarations, division orders,
                  transfer orders, joint interest billings, accounting, production
                  payment/payout records, operating contracts, excluding drilling
                  rig
                  contracts which are proprietary and non-assignable and any other
                  applicable agreements and instruments, including to the extent
                  assignable
                  all applicable production sales agreements, the existing electric
                  supply
                  agreement and water disposal agreements (except as to the Windham
                  14 (STA)
                  SWD System will be assigned to Buyer only to the extent that Buyer’s
                  disposal volume needs are subordinate to Seller’s disposal volume needs on
                  the Windham 14 SWD System), and (iii) all Records as are defined
                  in
                  Section 7.4 (b); however Seller retains such rights under this
                  Section
                  2.2(d) to the extent necessary to enjoy the use and access to its
                  other
                  properties, leases and lands.

              


      

       

      
        
           

        

        
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                (e)

              	
                Excluded
                  Properties.   Seller’s interest in these Properties has
                  been collectively referred to  as “Property or Properties”,
                  provided, however, the Property or Properties shall not include
                  and there
                  is excepted, reserved  and excluded from this
                  Agreement  the produced water disposal system(s) and its
                  associated facilities and
                  equipment.

              


      

      


      2.3           Effective
        Time.                                           The
        transfer of the Properties shall occur at Closing, which is defined in Article
        7.1, effective as of 12:01 a.m., local time, September 1, 2007, (the “Effective
        Time”) on the Properties as described herein.

      


      2.4           Oil
        in Storage.  All oil in storage at the Effective Time, including
        working inventory, belongs to Seller.  “Oil in Storage” for purposes
        of this Agreement, will mean all oil which was produced from the Properties
        and
        which was, on the Effective Time, stored in tanks located on the Properties
        (or
        located elsewhere but used by Seller to store oil produced from the Properties
        prior to delivery to oil purchasers) and above pipeline connections shall
        be
        deemed to have been produced before the Effective Time. Oil inventories will
        be
        valued based on the realized price received by Seller for oil sales, from
        the
        Properties on the Effective Date.

      


      


      


      ARTICLE
        3

      PURCHASE
        PRICE

      


      3.1           Purchase
        Price; Allocations.

      


      
        	
                 

              	
                (a)

              	
                Amount.

              	
                The
                  Purchase
                  Price of the Properties shall be a consideration equal
                  to   FIFTEEN MILLION THREE HUNDRED THOUSAND ($15,300,000)
                  (Subject to
                  adjustment only as hereinafter provided).
                  

              


      

      


      
        	
                 

              	
                (b)

              	
                Allocation.  Buyer
                  has allocated the Purchase Price among the Properties including
                  the
                  undeveloped locations and behind pipe intervals, as set forth on
                  Exhibit
                  “A-1” attached hereto for the purpose of (1) establishing a basis for
                  certain taxes, and (2) giving notices of value to the owners of
                  any
                  preferential rights to purchase the Properties, (3) determining
                  the value
                  of a Title Defect(s) and/or Environmental Defect(s), if any and
                  (4)
                  allocation of the Purchase Price to each individual
                  Seller.

              


      

      


      
        	
                 

              	
                (c)

              	
                All
                  amounts required under this Article 3 to be paid by Buyer to Seller
                  shall
                  be made by wire transfer of immediately available funds to an account(s)
                  designated by Seller which designation shall be made on or before
                  the date
                  said payment is due.  These amounts are subject to further
                  adjustment after the Closing as provided in this
                  Agreement.  Seller may delay or refuse to proceed with the
                  Closing should Buyer refuse or fail to comply with payment provisions
                  as
                  set forth by Seller.  This right on the part of Seller is in
                  addition to all other rights and remedies Seller may have under
                  this
                  Agreement, at law, or in equity.

              


      

      


      
        	
                 

              	
                (d)

              	
                Buyer
                  and Seller hereby agree that Seller, in lieu of the sale of the
                  Properties
                  to Buyer for the cash consideration provided herein, shall have
                  the right
                  at any time prior to the Closing to assign all or a portion of
                  its rights
                  under this Agreement to a qualified intermediary, in order to accomplish
                  the transaction in a manner that will comply, either in whole or
                  in part
                  with the requirements of a like kind exchange pursuant to §1031 of the
                  Internal Revenue Code of 1986, as amended.  In the event Seller
                  does assign its rights under this Agreement pursuant to this Article
                  3.1(d), Seller agrees to notify Buyer in writing of such assignment
                  not
                  less than seven (7) days before Closing.  If Seller assigns its
                  rights under this Agreement, Buyer (i) consents to Seller's assignment
                  of
                  its rights in this Agreement, and (ii) deposit the Purchase Price
                  with the
                  qualified escrow or qualified trust account at the
                  Closing.

              


      

       

      
        
           

        

        
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                (e)

              	
                Buyer
                  has deposited with Seller, and Seller acknowledges receipt of,
                  a
                  performance deposit in an amount which represents ten percent (10%)
                  of the
                  Purchase Price (the "Deposit"), which amount shall be held by Seller
                  and
                  distributed as follows:

              


      

      


      
        	
                 

              	
                (i)

              	
                if
                  this Agreement is terminated by mutual consent of the parties as
                  provided
                  in Article 8.1, the Deposit shall be returned by Seller to Buyer,
                  without
                  interest;

              


      

      


      
        	
                 

              	
                (ii)

              	
                if
                  this Agreement is terminated by either party pursuant to the termination
                  right provided in Article 8.1 and at such time all of Buyer's conditions
                  to Closing as set forth in Article 7.3 have not been satisfied
                  (and such
                  failure is not due to a breach by Buyer of its obligations hereunder),
                  the
                  Deposit shall be returned by Seller to Buyer
                  without  interest;

              


      

      


      
        	
                 

              	
                (iii)

              	
                if
                  this Agreement is terminated by either party pursuant to the termination
                  right provided in Article 8.1 and at such time all of Buyer's conditions
                  to Closing as set forth in Article 7.3 have been satisfied, the
                  Deposit
                  shall be retained by Seller, and such shall constitute liquidated
                  damages
                  and Seller’s sole damages for any breach by Buyer of this Agreement
                  causing its termination as set forth in this section;
                  and

              


      

      


      
        	
                 

              	
                (iv)

              	
                if
                  Closing occurs, Seller shall apply the Deposit towards the Purchase
                  Price.

              


      

      


      
        	
                 

              	
                (v)

              	
                the
                  Deposit shall be sent by wire transfer by end of business on August
                  31,
                  2007, as instructed by Seller.

              


      

      


         At
        Closing, Buyer shall pay to Seller the total Purchase Price set forth in
        Article
        3.1(a) less an amount equal to the Deposit set forth in Article 3.1(e) and
        less
        any adjustments as set forth in Article 7.5

      


      


      ARTICLE
        4

      TITLE
        & ENVIRONMENTAL

      


      4.1           General
        Access.  Immediately upon execution of this Agreement and prior to
        Closing, Seller will provide Buyer, at Buyer’s sole risk, cost and expense,
        access at all reasonable times to the Properties and to the files, records,
        contracts, correspondence, maps, data, reports, plats, title opinions and
        title
        reports and other documents of Seller pertaining to the Properties for purposes
        of conducting due diligence to determine the existence of any Title Defects
        and/or Environmental Defects.

      


      4.2           Seller’s
        Title.  Each Seller hereby warrants and represents by through and
        under each Seller, but not otherwise, to Buyer that each Seller's title to
        the
        Properties as of the Effective Time is (and as of the Closing will be) free
        of
        "Title Defects", as defined below.

      


      4.3           Title
        Defect. The term “Title Defect” as used herein shall mean any encumbrance,
        encroachment, irregularity, defect in or objection to Seller’s title to the
        Properties (except Permitted Encumbrances) that alone or in combination with
        other defects renders Seller’s title to the Properties less than Defensible
        Title, as defined in Article 5.1(d) below, including; (i) liens securing
        unpaid
        indebtedness or taxes; (ii) preferential rights, consents to assignment and
        similar provisions of the type commonly encountered in the oil and gas industry;
        (iii) matters indicating that Buyer, or Buyer's successor could not successfully
        defend against a claim by any person or entity that a defect exists as to
        any
        Property; (iv) differences between the net revenue interest or the working
        interest as set out on Exhibit “A-1”, and the net revenue interest and working
        interest determined by Buyer pursuant to its review of title; (v) obligations
        to
        deliver production at a future date without payment for the production; and/or
        (vi) a default by Seller under some material provision of a lease, farmout
        agreement or agreement affecting any Property.

       

      
        
           

        

        
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      4.4           Permitted
        Encumbrances.  “Permitted Encumbrances” shall mean: (i) minor
        defects in title which do not require the payment of money and otherwise
        do not
        have a material adverse effect on the value or operation of the affected
        portion
        of the Properties; (ii) liens for labor, services, materials or supplies
        furnished to the Properties which are not delinquent and which will be paid
        or
        discharged in the ordinary course of business; (iii) liens for taxes or
        assessments not yet due and not delinquent; (iv)  Lessor’s royalties,
        overriding royalties, division orders and similar burdens if the net cumulative
        effect of such burdens does not operate to reduce the net revenue interest
        from
        that set forth on Exhibit “A-1”;and (v) production sale contracts, so long as
        the prices payable under the contracts are representative of general arms
        length
        market prices being paid for similar production in the area, unitization
        and
        pooling declarations and agreements and any operating agreements, insofar
        as
        such contracts and agreements do not operate to increase the working interest
        or
        decrease the net revenue interest of Buyer from that stipulated on Exhibit
“A-1”
attached hereto; (vi) preferential rights to purchase and required third
        party
        consents to assignments and similar agreements with respect to which, prior
        to
        Closing, (A) waivers or consents are obtained from the appropriate parties,
        (B)
        the appropriate time period for asserting such rights has expired without
        an
        exercise of such rights, or (C) with respect to consent, failure to obtain
        consent does not affect the validity of an assignment to Buyer; (vii) all
        rights
        to consent by, required notices to, filings with, or other actions by
        Governmental Bodies in connection with the sale or conveyance of oil and
        gas
        leases or interests therein if the same are customarily obtained subsequent
        to
        such sale or conveyance; (viii) rights reserved to or vested in any municipality
        or governmental, statutory, or public authority to control or regulate any
        of
        the Properties in any manner, and all applicable laws, rules and orders of
        any
        governmental authority; (ix) such Title Defects as Buyer shall have waived;
        and
        (x) liens released at Closing.

      


      4.5           Notice
        of Title Defects.  Buyer shall give Seller notice of any Title
        Defects as soon as practicable.  The notice shall:

      


      
        	
                 

              	
                (a)

              	
                be
                  in writing;

              


      

      


      
        	
                 

              	
                (b)

              	
                describe
                  in sufficient detail the nature of Title Defect and include appropriate
                  evidence to substantiate the Title
                  Defect;

              


      

      


      
        	
                 

              	
                (c)

              	
                describe
                  the steps and actions (in reasonable detail) which are necessary
                  in
                  Buyer’s opinion for the curing of identified Title
                  Defects;

              


      

      


      
        	
                 

              	
                (d)

              	
                be
                  delivered to Seller as soon as possible, but no later than September
                  24,
                  2007

              


      

      


      Buyer
        shall be deemed to have waived all Title Defects of which Seller has not
        been
        given the notice described in this Article 4.5.

      


      4.6           Remedies
        for Title Defects.  Seller shall have until Closing (after receipt
        of Buyer’s notification as to a specific Title Defect) in which to provide Buyer
        written evidence that the subject Title Defect has been either cured or
        removed.  Should Seller fail or be unable to provide evidence of Title
        Defect curative or removal then Buyer may at its option:

      


      
        	
                 

              	
                (a)

              	
                waive
                  such Title Defect; or

              


      

      


      
        	
                 

              	
                (b)

              	
                In
                  the event the Seller and Buyer cannot mutually agree on a purchase
                  price
                  adjustment for an alleged Title Defect, Buyer shall have the right
                  to (i)
                  proceed to Closing and accept the Interest with no purchase price
                  adjustment, or (ii)terminate this Agreement as to the Properties
                  affected
                  by the alleged Title Defect and receive a Purchase Price adjustment
                  for
                  such Properties as set forth in the allocation of value set forth
                  in
                  Exhibit “A-1”, or , where feasible, the proportionate allocated value;
                  or.

              


      

      


      
        	
                 

              	
                (c)

              	
                Buyer
                  and Seller may proceed to Closing without any adjustment to the
                  Purchase
                  Price and Seller will have until the Post-Closing to provide evidence
                  of
                  cure of any such Title Defect. If Seller is unable to cure under
                  this
                  Section 4.6(c), Buyer shall be entitled to an adjustment at Post-Closing
                  in accordance with Section 4.6(b).

              


      

       

      
        
           

        

        
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      If
        the reduction in the Purchase Price
        from an aggregate total of all Title Defect adjustments does not exceed One
        Hundred Thousand Dollars ($100,000), then there shall be no adjustment to
        the
        Purchase Price. However, if the aggregate total of all Title Defects exceeds
        One
        Hundred Thousand Dollars ($100,000), then the Purchase Price shall be adjusted
        by the total amount of such Title Defects.

      


      Should
        Seller be unable to provide
        evidence of Title Defect curative or desire to not make adjustment to the
        Purchase Price and it is determined by Seller that such Title Defect will
        materially and adversely reduce the net value of the Properties affected
        by an
        amount equal to or greater than ten percent (10%) of the Purchase Price,
        either
        Seller or Buyer may terminate this Agreement.  In such event, the
        Deposit shall be promptly returned to Buyer, without interest.

      


      If
        Buyer notifies Seller of a Title
        Defect, as provided for in Section 4.5 which Buyer desires to have cured
        and for
        which an adjustment to the Purchase Price has been made in accordance with
        the
        terms of this Agreement, Seller agrees to cooperate with Buyer prior to or
        after
        the Closing in endeavoring to cure any such defects (but Seller shall have
        no
        obligation to pay money or to undertake any legal obligation in this
        regard).  Buyer agrees to bear the cost of examining the title data
        furnished by Seller as curative hereunder, if any, or obtained by
        Buyer.

      


       

      4.7                      Environmental
        Defects. Buyer is aware that the interests and property have been used for
        exploration, development, and production of oil and gas and that there may
        be
        petroleum, produced water, wastes, or other materials located on or under
        the
        Property or associated with the interests. Equipment and sites included in
        the
        interests or property may contain asbestos, hazardous substances, or NORM.
        Notwithstanding anything to the contrary in this Agreement (including, without
        limitation, the provisions of Section 5.1(r) hereof), (a) this Section 4.7
        and
        Section 10.3 contains all representations and warranties with regard to any
        Environmental Laws (as hereinafter defined) and, except as expressly set
        forth
        in this Section 4.7 and Section 10.3, SELLER EXPRESSLY DISCLAIMS ANY
        REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, REGARDING OR IN ANY WAY RELATING
        TO OBLIGATIONS OR LIABILITIES UNDER ANY ENVIRONMENTAL LAWS OR THE ENVIRONMENTAL
        CONDITION OF THE PROPERTIES, and (b) it makes no representation or
        warranty of any kind whatsoever regarding the presence or absence of any
        naturally occurring radioactive materials ("NORMs") on or near any of the
        Properties, and Buyer shall not be entitled to any adjustment to the Purchase
        Price or any other remedy or settlement of any kind whatsoever except as
        provided for in this Section 4.7, and it shall have no obligation or liability
        of any kind whatsoever to Buyer or any of its successors or assigns, with
        respect to any NORMs. To the best of Seller’s knowledge, (i) neither the
        Properties nor the operation thereof are in violation of any Environmental
        Laws
        in any material respect and (ii) it has not received any notice from any
        Governmental Authority (as hereinafter defined) of any violation of any
        Environmental Laws. For purposes of this Agreement, the term "Environmental
        Laws" shall mean, as to any given Property, all laws, statutes, ordinances,
        rules and regulations of any Governmental Authority pertaining to protection
        of
        the environment in effect as of the Effective Time and as interpreted by
        court
        decisions or administrative orders as of the Effective Time in the jurisdiction
        in which such Property is located. For purposes of this Section 4.7 the term
        "Governmental Authority" shall mean, as to any given Property, the United
        States
        and the state, county, parish, city and political subdivisions in which such
        Property is located and which exercises jurisdiction over such Property,
        and any
        agency, department, board or other instrumentality thereof that exercises
        jurisdiction over such Property.

       

      Upon
        Closing, Buyer will assume all liability for the assessment, remediation,
        removal, transportation, and disposal of wastes, asbestos, hazardous substances,
        and NORM from the interests and property and associated activities and will
        conduct these activities in accordance with all applicable laws and regulations,
        including the Environmental Laws.

       

      Buyer
        will have until September 24, 2007 to notify Seller of any material adverse
        environmental condition associated with the Property that Buyer finds
        unacceptable and that has an estimated cost net to the Property greater than
        One
        Hundred Thousand Dollars ($100,000) and is documented by third party evidence
        of
        said condition for which remediation is required under any Environmental
        Law.
        Upon Seller’s receipt of such notification, Seller will have until two (2) days
        before the Closing Date in which to elect to:

       

      
        
           

        

        
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                (a)

              	
                proceed
                  with Closing and either elect to remedy the condition or account
                  for said
                  costs for the remediation of the condition contained in Buyer’s
                  notification as a normal pre-Effective Time operating expense item
                  in the
                  Post Closing Adjustment, or

              


      

       

       

      
        	
                 

              	
                 (b)

              	
                remove
                  the subject Property from this Agreement and adjust the Purchase
                  Price
                  based upon the allocation of value set forth in Exhibit A-1,
                  or

              


      

       

       

      
        	
                 

              	
                (c)    terminate
                  this Agreement if the total cost to remediate all Environmental
                  Matters
                  will exceed  ten percent (10%) of the Purchase
                  Price.

              


      

       

       

      Should
        Seller elect to remedy the condition set forth in Section 4.7 (a) above,
        Seller
        shall remain as operator of the Property and continue remediation of the
        condition until the first of the following occur:

       

       

      
        	
                 

              	
                (I)

              	
                the
                  appropriate governmental authorities provide written notice to
                  Seller or
                  Buyer that no further remediation of the condition is required
                  to comply
                  with the applicable Environmental Laws;
                  or

              


      

       

       

      
        	
                 

              	
                (II)

              	
                An
                  independent third party determines to Seller’s and Buyer’s reasonable
                  satisfaction that the condition has been remediated to the level
                  required
                  by the Environmental Laws or as mutually agreed to by Buyer and
                  Seller.

              


      

       

       

      Upon
        the
        occurrence of either (I) or (II) above, Seller will notify Buyer that
        remediation of the condition is complete and provide a copy of the notification
        provided in (I) above, if applicable. Upon delivery of Seller’s notice, Seller
        will be released from all liability and have no further obligations under
        Section 4.7 and Section 10.3 of this Agreement.

       

       

      Buyer,
        for that period of time for which Buyer is operator of the Properties, Buyer
        will store, handle, transport, and dispose of or discharge all materials,
        substances, and wastes from the interests and property (including produced
        water, drilling fluids, NORM, and other wastes), whether present before or
        after
        the Effective Time, in accordance with applicable local, state, and federal
        laws
        and regulations. Buyer will keep records of the types, amounts, and location
        of
        materials, substances, and wastes that are transported, handled, discharged,
        released, or disposed of onsite and offsite.

       

       

      Notwithstanding
        any other provision within this Section 4.7, Buyer shall have the right to
        waive
        all such Environmental Matters and proceed with Closing.

       

      


      


      ARTICLE
        5

      REPRESENTATIONS
        AND WARRANTIES

      


      5.1           Seller’s
        Representations and Warranties.  Each Seller represents and
        warrants, with respect to such Seller, to Buyer as follows:

      


      
        	
                 

              	
                (a)

              	
                Description
                  and Title.  Seller represents and warrants that Exhibit “A”
                  sets forth a true, complete and legally sufficient description
                  of the
                  Properties.  It is understood that pursuant to this Agreement,
                  Seller warrants title to the Properties as set forth on Exhibit
“A” by,
                  through and under Seller only, but not
                  otherwise.

              


      

      


      
        	
                 

              	
                (b)

              	
                Organization,
                  Standing and Power.  To the extent that each Seller is a
                  corporation, partnership or similar entity, the affected Seller
                  is validly
                  existing and in good standing under the laws of the State
                  of  Texas and has all requisite powers and authority to own,
                  lease, operate, sell and convey the Properties and to carry on
                  its
                  business as is now being conducted.

              


      

      


      
        	
                 

              	
                (c)

              	
                Authority
                  and Enforceability.  The execution and delivery of this
                  Agreement, and the consummation of the transactions contemplated
                  hereby,
                  have been duly and validly authorized by all necessary action on
                  the part
                  of each party constituting Seller.  This Agreement is the valid
                  and binding obligation of Seller, enforceable against each Seller
                  in their
                  respective proportionate ownership share in accordance with its
                  terms.  Neither the execution and delivery by Seller of this
                  Agreement nor the consummation of the transactions contemplated
                  hereby nor
                  the compliance by Seller with any of the provisions hereof will
                  conflict
                  with or result in a breach of any provision of Seller's organization
                  documents or by-laws.  The execution and delivery hereof by
                  Seller does not, and the fulfillment and compliance with the terms
                  and
                  conditions hereof, and the consummation of the transactions contemplated
                  hereby, will not result in the creation or imposition of any lien,
                  charge
                  or other encumbrance on the
                  Properties.

              


      

       

      
        
           

        

        
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                (d)   Seller's
                  Title to Properties.  Seller has Defensible Title to the
                  Properties.  The
                  term         “Defensible
                  Title” shall mean in the case of the leasehold interests listed on Exhibit
                  “A”, such right, title and interest (owned beneficially or of record)
                  that, except for Permitted
                  Encumbrances:

              


      

      


      
        	
                 

              	
                (i)

              	
                is
                  free from reasonable doubt that a prudent person engaged in the
                  business
                  of purchasing and owning, developing and operating producing oil
                  and gas
                  properties with knowledge of all of the facts and their legal effect
                  would
                  be willing to accept the title;

              


      

      


      
        	
                 

              	
                (ii)

              	
                entitles
                  Seller to receive not less than the interest set forth in Exhibit
“A-1” as
                  the net revenue interest with respect to all of the oil, gas, and
                  hydrocarbon minerals produced, saved and marketed from each unit
                  or well,
                  as the case may be, that relates to Seller’s producing interval in the
                  lands and depths included within each property identified in Exhibit
                  “A-1”;

              


      

      


      
        	
                 

              	
                (iii)

              	
                obligates
                  Seller to pay costs and expenses relating to the operations on
                  and the
                  maintenance and development of each unit or well, as the case may
                  be, that
                  relates to Seller’s producing interval in the lands and depths included
                  within each property, in an amount not greater than the working
                  interest
                  set forth in Exhibit “A-1”;

              


      

      


      
        	
                 

              	
                (iv)

              	
                is
                  free and clear of any mortgages, pledges, deeds of trust, hypothecations
                  and production payments, except for the DML Properties which currently
                  partially secures a line of Credit between WM. Mark Cranmer, Trustee
                  and
                  JPMorgan Chase Bank N.A. as Lender and Summit Petroleum LLC, et
                  al as
                  borrower (recorded May 14, 2007, INS. No. 101006, Vol. 82, Page
                  346 in the
                  Official Public Records of Reagan County, Texas, which will be
                  released no
                  later than 5 days prior to Closing;

              


      

      


      For
        purposes of this Article 5.1(d), “owned beneficially or of record” means
        Seller’s ownership interest reflected of record in the office of the county
        clerk in the county where the relevant lands are located, ownership interests
        reflected with respect to federal or state owned lands, in the office of
        the
        federal or state agency having jurisdiction, subject to and as impacted by
        the
        terms and provisions of the Permitted Encumbrances.

      


      
        	
                 

              	
                (e)

              	
                Liability
                  for Brokers’ Fees.  Seller has not incurred any liability,
                  contingent or otherwise, for brokers’ or finders’ fees relating to this
                  Transaction for which Buyer shall have any responsibility
                  whatsoever.

              


      

      


      
        	
                 

              	
                (f)

              	
                Insurance.  Seller
                  shall maintain through the Closing with respect to the Properties
                  its
                  existing insurance coverage.

              


      

      


      
        	
                 

              	
                (g)

              	
                Compliance
                  with Law.  Seller has not received a written notice of a
                  material violation of any statute, law, ordinance, regulation,
                  permit,
                  rule or order of any federal, state, tribal or local government
                  or any
                  other governmental department or agency, or any judgment, decree
                  or order
                  of any court, applicable to the Properties or operations on the
                  Properties, which remains uncured.

              


      

      


      
        	
                 

              	
                (h)

              	
                Plugging
                  Obligations.  To the best of Seller’s knowledge, except for
                  the Nordic B No. 4 Well , there are no dry holes or shut-in or
                  otherwise
                  inactive wells, located on the Properties on lands pooled or unitized
                  therewith that Seller has the current obligation to plug and
                  abandon.

              


      

       

      
        
           

        

        
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                (i)

              	
                Governmental
                  Permits.  To the best of Seller’s knowledge, Seller has all
                  governmental licenses, filings and permits (including, without
                  limitation,
                  permits, licenses, approval registrations, notifications, exemptions
                  and
                  any other authorizations pursuant to Law) necessary or appropriate
                  to own
                  and operate the Properties as presently being owned and
                  operated.  To the best of Seller’s knowledge, Seller has not
                  received written notice of any violations in respect of any such
                  licenses
                  or permits that remains uncured.

              


      

      


      
        	
                 

              	
                (j)

              	
                Personal
                  Property and Equipment.  Seller has not removed any personal
                  property, equipment and fixtures from the Wells, unless it has
                  been
                  replaced with personal property, equipment and fixtures of similar
                  grade
                  and utility.  Unless removed, repaired or replaced with personal
                  property, equipment and fixtures or similar grade and utility,
                  the
                  personal property, equipment and fixtures currently attendant to
                  the Wells
                  was the equipment historically used on the Wells to produce the
                  Hydrocarbons prior to the execution of this
                  Agreement.  

              


      

      


      
        	
                 

              	
                (k)

              	
                No
                  Alienation.  Within 120 days of the date hereof, Seller has
                  not sold, assigned, conveyed, or transferred or contracted to sell,
                  assign, convey or transfer any right or title to, or interest in,
                  the
                  Properties other than (i) production sold in the ordinary course
                  of
                  Seller’s business and (ii) equipment which was worthless, obsolete or
                  replaced by equipment of equal suitability and
                  value.

              


      

      


      
        	
                 

              	
                (l)

              	
                Property
                  Expenses.  In the ordinary course of business, Seller has
                  paid all costs and expenses attributable to the period of time
                  prior to
                  the Effective Time as such costs and expenses become due, and such
                  costs
                  and expenses are being paid in a timely manner before the same
                  become
                  delinquent, except such costs and expenses as are disputed in good
                  faith
                  by Seller in a timely manner and for which Seller shall retain
                  responsibility.

              


      

      


      
        	
                 

              	
                (m)

              	
                Records.   Seller
                  makes no representations regarding the accuracy of any of the Records;
                  provided, however, Seller does represent that (i) all of the Records
                  are
                  files, or copies thereof, that Seller has used in the ordinary
                  course of
                  operating and owning the Properties, (ii) Seller has not intentionally
                  withheld any material information from the Records or (iii) Seller
                  has not
                  intentionally misrepresented any material information in the
                  Records.  Except as set forth in this Section 5.1, no
                  representation or warranty of any kind is made by Seller as to
                  the
                  information or with respect to the Properties to which the information
                  relates and Buyer expressly agrees that any conclusions drawn therefrom
                  shall be the result of its own independent review and judgment.
                  The
                  representations contained in this paragraph shall apply only to
                  matters of
                  fact, and shall not apply to any information, data, printouts,
                  extrapolations, projections, documentation, maps, graphs, charts,
                  or
                  tables which reflect, depict, present, portray, or represent, or
                  which are
                  based upon or derived from, in whole or in part, interpretation
                  of the
                  information including, but not limited to, matters of geological,
                  geophysical, engineering, or scientific
                  interpretation.

              


      

      


      
        	
                 

              	
                (p)

              	
                Gas
                  Imbalances.  To the best of Seller’s knowledge, no gas
                  imbalance exists with respect to the
                  Properties.

              


      

      


      
        	
                 

              	
                (q)

              	
                Leases.  To
                  the best of Seller's knowledge, the Leases have been maintained
                  according
                  to their material terms, in compliance with the agreements to which
                  the
                  Leases are subject, and are presently in full force and
                  effect.  To the best of Seller's knowledge, there has not
                  occurred any event, fact or circumstance which with the lapse of
                  time or
                  the giving of notice, or both, would constitute such a material
                  breach or
                  default on behalf of Seller under the provisions of the
                  Leases.

              


      

      


      
        	
                 

              	
                (r)

              	
                Litigation.  To
                  the best of Seller’s knowledge, there are no actions, suits, claims,
                  proceedings, agency enforcement actions or investigations pending,
                  or to
                  the best knowledge of Seller, threatened against or affecting the
                  Properties.  There is no suit, action, claim, investigation or
                  inquiry by any person or entity or by any administrative agency
                  or
                  governmental body and no legal, administrative or arbitration proceeding
                  pending, or, to the best knowledge of Seller threatened against
                  Seller
                  which has affected or could affect Seller's ability to consummate
                  the
                  transaction contemplated by this
                  Agreement.

              


      

      


      
        
           

        

        
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            8of 18

          
            

          

        

        
           

        

      

      


      5.2           Buyer’s
        Representations and Warranties.  Buyer represents and warrants to
        Seller as follows:

      


      
        	
                 

              	
                (a)

              	
                Organization,
                  Standing and Power.  Buyer is a limited partnership duly
                  organized, validly existing and in good standing under the laws
                  of the
                  State of Delaware and has all requisite powers and authority to
                  own, lease
                  and operate the Properties and to carry on its business as is now
                  being
                  conducted in the jurisdictions where the nature of its properties
                  or
                  business so requires such
                  qualification.

              


      

      


      
        	
                 

              	
                (b)

              	
                Authority
                  and Enforceability.  The execution and delivery of this
                  Agreement, and the consummation of the transactions contemplated
                  hereby,
                  have been duly and validly authorized by all necessary corporate
                  action on
                  the part of Buyer.  This Agreement is the valid and binding
                  obligation of Buyer, enforceable against Buyer in accordance with
                  its
                  terms.  Neither the execution and delivery by Buyer of this
                  Agreement nor the consummation of the transactions contemplated
                  hereby nor
                  the compliance by Buyer with any of the provisions hereof will
                  conflict
                  with or result in a breach of any provision of Buyer's articles
                  and
                  by-laws.  The execution and delivery hereof by Buyer does not,
                  and the fulfillment and compliance with the terms and conditions
                  hereof
                  and the consummation of the transactions contemplated hereby will
                  not,
                  result in the creation or imposition of any lien, charge or other
                  encumbrance on the Properties.

              


      

      


      
        	
                 

              	
                (c)

              	
                Warranty
                  Maintenance.  Buyer shall cause all the representations and
                  warranties of Buyer contained in this Agreement to be true and
                  correct on
                  and as of the Closing Date.

              


      

      


      
        	
                 

              	
                (d)

              	
                Buyer
                  represents that it did not solely rely upon representations or
                  materials
                  provided to Buyer by Seller or Seller’s marketing agents in evaluating the
                  Properties, but rather has also relied upon its individual evaluations
                  and
                  due diligence.

              


      

      


      
        	
                 

              	
                (e)     Buyer
                  represents that it has sufficient funds on hand or commitments
                  from one or
                  more  banking institutions to fund payment of the Purchase Price
                  at the Closing.

              


      

      


      


      5.3           Liability
        Regarding Access.  In connection with Buyer’s access to the
        Properties prior to Closing for due diligence review, Buyer waives and releases
        all claims, whether known or unknown, against Seller, Seller’s partners,
        Seller’s and each partner’s parent, subsidiary companies or other affiliates,
        and directors, officers, employees, consultants or agents of such parties,
        respectively, for injury to, or death of persons or for damage to property
        suffered by Buyer’s employees, agents, representatives, consultants or
        contractors arising in any way from the conduct of Buyer’s investigations and
        examinations of the Properties or the exercise of such rights of
        access.  Buyer shall indemnify Seller, Seller’s partners, Seller’s and
        each such partner’s parent and subsidiary companies and other affiliates, and
        directors, officers, employees, consultants and agents of such parties,
        respectively, from and against any and all claims, actions, liabilities,
        losses,
        damages, costs or expenses (including, but not limited to court costs and
        attorney’s fees) whatsoever suffered or incurred by
        Buyer’s  employees, agents, representatives, consultants or
        contractors arising out of the exercise of such rights of investigation and
        examination (or exercise of such right of access).

      


      


      ARTICLE
        6

      COVENANTS

      


      6.1           Covered
        Area.  This Agreement is limited to the Properties.

      


      6.2           Existing
        Agreements, Assignments and Conveyances.  This Agreement and the
        Assignment of Oil and Gas Leases are further subject to the terms and conditions
        of all existing agreements, assignments and conveyances.

       

      
        
           

        

        
          Page
            9of 18

          
            

          

        

        
           

        

      

       

      6.3           New
        Agreements and Sales.  Unless this Agreement is terminated as
        provided for herein, Buyer and/or Seller will not, without the prior written
        consent of the other: a) enter into any new agreements or commitments with
        respect to the Properties which extend beyond the Effective Time; b) except
        as
        set forth in Schedule 6.3, drill any new wells, abandon any existing wells
        or
        release or abandon all or any portion of the lands included within any lease
        or
        modify or terminate any contracts and agreements affecting the Properties
        and
        sell or otherwise dispose of any of the Properties or any part thereof, other
        than personal property and equipment unless it is replaced with personal
        property and equipment of equivalent quality and value.  From the date
        hereof until the Closing, Seller shall maintain the Properties in a good
        and
        workmanlike manner consistent with past practice.

      


      6.4           Maintenance
        of Seller's Business.  Seller shall carry on the business of
        Seller with respect to the Properties in substantially the same manner as
        Seller
        has heretofore and shall not introduce any new method of management, operation
        or accounting with respect to the Properties.

      


      6.5           Notification
        of Breach.  Seller shall promptly notify Buyer (i) if any
        representation or warranty of Seller contained in this Agreement is discovered
        to be or becomes untrue or (ii) if Seller fails to perform or comply with
        any
        covenant or agreement contained in this Agreement or it is reasonably
        anticipated that Seller will be unable to perform or comply with any covenant
        or
        agreement contained in this Agreement.

      


      


      


      ARTICLE
        7

      CLOSING

      


      7.1   Date
        and Place of Closing  The purchase by Buyer and the sale by Seller
        of the Properties as contemplated by this Agreement (the "Closing") shall
        be
        held on or before October 1, 2007 (the “Closing Date”), at the offices of
        Summit Petroleum LLC in Midland, Texas.  However, Buyer may, at its
        option and upon approval by Seller, accelerate the date of the Closing upon
        giving Seller three (3) business days prior written notice, if, on or before
        the
        date of such notice, Buyer has also notified Seller of any Title Defects
        and any
        Environmental Defects as provided for herein.  Additionally, the
        parties may mutually agree in writing on a different date and place for the
        Closing.

      


      


      7.2           Conditions
        of Closing by Seller.  The obligation of Seller to close is
        subject to the satisfaction of the following conditions:

      


      
        	
                 

              	
                (a)

              	
                All
                  representations and warranties of Buyer contained in this Agreement
                  shall
                  be true, correct, and not misleading in all material respects,
                  and Buyer
                  shall have performed and satisfied all agreements and covenants
                  in all
                  material respects required by this Agreement to be performed and
                  satisfied
                  by Buyer; and

              


      

      


      
        	
                 

              	
                (b)

              	
                No
                  suit or other proceeding shall be pending or threatened before
                  any court
                  or governmental agency seeking to restrain, prohibit, or declare
                  illegal,
                  or seeking substantial damages in connection with the transaction
                  contemplated hereby.

              


      

      


      
        	
                 

              	
                (c)

              	
                Should
                  there be downward adjustments to the Purchase Price in excess of
                  ten
                  percent (10%) of the Purchase Price, due to asserted Title Defects
                  and
                  Environmental Defects; Seller has the option to terminate this
                  Agreement
                  with no liability to Buyer other than return of the
                  Deposit.

              


      

      


      7.3           Conditions
        of Closing by Buyer.  The obligation of Buyer to close is subject
        to the satisfaction of the following conditions:

      


      
        	
                 

              	
                (a)

              	
                All
                  representations and warranties of Seller contained in this Agreement
                  shall
                  be true, correct, and not misleading in all material respects,
                  and Seller
                  shall have performed and satisfied all agreements and covenants
                  in all
                  material respects required by this Agreement to be performed and
                  satisfied
                  by Seller;

              


      

       

      
        
           

        

        
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                (b)

              	
                No
                  suit or other proceeding shall be pending or threatened before
                  any court
                  or governmental agency seeking to restrain, prohibit, or declare
                  illegal,
                  or seeking substantial damages in connection with the transaction
                  contemplated hereby; and

              


      

      


      
        	
                 

              	
                (c)

              	
                Should
                  there be downward adjustments to the Purchase Price in excess of
                  ten
                  percent (10%) of the Purchase Price, due to asserted Title Defects
                  and
                  Environmental Defects; Buyer has the option to terminate this Agreement
                  with no liability to Buyer other than return of the
                  Deposit.

              


      

      


      
        	
                 

              	
                (d)

              	
                No
                  material adverse change in the condition of or title to the Properties
                  shall have occurred subsequent to the Effective Time, except depletion
                  through normal production within authorized allowables, ordinary
                  changes
                  in rates of production, and depreciation of equipment through ordinary
                  wear and tear.

              


      

      


      7.4           Closing
        Obligations.  At the Closing, the following shall
        occur:

      


      
        	
                 

              	
                (a)

              	
                Seller
                  shall execute, acknowledge and deliver to Buyer, the original Assignment
                  of Oil and Gas Leases and Bill of Sale attached hereto as Exhibit
“B” (the
                  “Assignment”), conveying title to the Properties to Buyer, as well as such
                  certificates or other documents as are required to effect the transfer
                  of
                  the Properties.

              


      

      


      
        	
                 

              	
                (b)

              	
                All
                  books, records and files  in the possession of Seller pertaining
                  to the Properties, including, without limitation, the following,
                  if and to
                  the extent that such files exist: all books, records, reports,
                  manuals,
                  files, title documents, including correspondence, records of production
                  and maintenance, revenue, sales, expenses, warranties, lease files,
                  land
                  files, well files, title opinions and title reports, abstracts,
                  division
                  order files, assignments, contract files, operations files, copies
                  of tax
                  and accounting records (but excluding Federal and state income
                  tax returns
                  and records) and files, maps, core data, hydrocarbon analysis,
                  well logs,
                  mud logs, field studies together with other files, contracts and
                  other
                  records and data including all geological, geophysical (including
                  any
                  micro seismic) and engineering information, except for that data
                  prohibited by third party confidentiality agreements (the “Records”),
                  shall be made available for delivery to Buyer, at Buyer’s cost, at
                  Seller’s offices where currently maintained, within fifteen (15) business
                  days after the Closing.  Seller shall have the right to retain
                  copies of the Records (and receive from Buyer, at Seller’s expense, copies
                  of Records requested by Seller from Buyer in the future) and to
                  retain
                  canceled checks and general ledger, purchasing and other general
                  accounting records of Seller.  Buyer’s reliance on same shall be
                  at Buyer’s sole risk.

              


      

      


                     
        (c)           Seller
        shall deliver to Buyer exclusive possession of the Exhibit “A”
interests.

      


      
        	
                 

              	
                (d)

              	
                Seller
                  and Buyer shall execute, acknowledge and deliver such transfer
                  orders or
                  letters in lieu thereof as Buyer may request, directing all purchasers
                  of
                  production to make payment of proceeds attributable to production
                  from the
                  Properties after the Effective Time to
                  Buyer.

              


      

      


      
        	
                 

              	
                (e)

              	
                Buyer
                  shall deliver the cash consideration of the total Purchase Price
                  to Seller
                  by Wire Transfer on the date of Closing as adjusted to reflect
                  the Deposit
                  and matters described in Article 7.5. To the extent that actual
                  amounts
                  are not available, the parties will use reasonable estimates of
                  such
                  amounts less any adjustments due to Title Defects and/or Environmental
                  Matters as applicable as set out in Article
                  4.

              


      

      


      
        	
                 

              	
                (f)

              	
                Seller
                  will provide such reasonable assistance to Buyer as Buyer may request
                  in
                  order for Buyer to prepare its required SEC
                  filings.

              


      

      


      
        	
                 

              	
                (g)

              	
                Seller
                  will provide Buyer with executed assignments of assignable contracts
                  which
                  relate to the Properties.

              


      

      


      
        
           

        

        
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      7.5           Adjustments
        and Accounting.  Any adjustments pursuant to this Article will be
        made at Closing, utilizing estimates where necessary. Seller will prepare
        and
        deliver to Buyer not less than three (3) days before Closing a preliminary
        Closing settlement Statement reflecting the adjustments called for in this
        Article 7.5. The parties shall sign the agreed upon settlement statement
        at
        Closing. Seller shall prepare a final Post Closing settlement statement
        containing adjustments, including but not limited to the following, and will
        be
        made within, and only within, ninety (90) days of Closing.

      (a)                 Upward
        Adjustments.  The Purchase Price shall be adjusted upward by the
        following:

      


      
        	
                 

              	
                (i)

              	
                The
                  amount of all direct costs and expenditures chargeable to Seller's
                  interest incurred and paid by
                  Seller:

              


      

      


      
        	
                 

              	
                (A)

              	
                that
                  are attributable to the drilling, completion, recompletion, reworking,
                  operation and maintenance of the Properties on and after the Effective
                  Time;

              


      

      
        	
                 

              	
                (B)

              	
                bonuses,
                  lease rentals and shut-in payments due after (and expressly excluding
                  those due before) the Effective
                  Time;

              


      

      
        	
                 

              	
                (C)

              	
                ad
                  valorem, property and other taxes that are allocated to the Buyer
                  pursuant
                  to Article 7.5(d) herein below; and

              


      

      
        	
                 

              	
                (D)

              	
                amounts
                  relating to obligations arising under the Contracts relating to
                  the
                  Properties with respect to operations or production after the Effective
                  Time;

              


      

      


      
        	
                 

              	
                (ii)

              	
                The
                  value of all Hydrocarbons, which have been produced and are merchantable,
                  and are in storage and/or credited to the Properties as of the
                  Effective
                  Time, net of all severance taxes, and less an appropriate deduction
                  based
                  on industry practice for basic sediment, water and other non-merchantable
                  liquids; and

              


      

      


      
        	
                 

              	
                (iii)

              	
                Any
                  other amount agreed upon by Seller and
                  Buyer

              


      

      


            
        (b)           Downward
        Adjustments.  The Purchase Price shall be adjusted downward by the
        following:

      


      
        	
                 

              	
                (i)

              	
                The
                  amount of all proceeds received by Seller that are attributable
                  to its
                  ownership and the operation of the Properties on or after the Effective
                  Time;

              


      

      


      
        	
                 

              	
                (ii)

              	
                The
                  following amounts to the extent paid by
                  Buyer:

              


      

      


      
        	
                 

              	
                (A)

              	
                all
                  direct unrelated costs and expenditures chargeable to Seller's
                  interest
                  that are attributable to the drilling, completion, recompletion,
                  reworking, operation and maintenance of the Properties prior to
                  the
                  Effective Time;

              


      

      


      
        	
                 

              	
                (B)

              	
                all
                  bonuses, lease rentals and shut-in payments due prior to the Effective
                  Time; and

              


      

      


      


                    
        (iii)           Those
        amounts resulting from Title Defects and/or Environmental Defects, as provided
        in Article 4; and

      


                    
        (iv)           Any other
        amount agreed upon by Seller and Buyer.

      


      (c)                 Seller
        shall be entitled to all proceeds and shall be responsible for all expenses
        accruing to the Properties prior to the Effective Time and Buyer shall be
        entitled to all proceeds and shall be responsible for all expenses accruing
        to
        the Properties, including plugging of the wells, after the Effective
        Time.

      


      (d)                 All
        taxes, real property taxes and similar obligations for the current year shall
        be
        prorated based upon the prior year’s tax rates if tax statements for the current
        year have not been received by Seller within ninety (90) days following
        Closing.

      


      
        
           

        

        
          Page
            12of 18

          
            

          

        

        
           

        

      

      


      The
        parties have determined that the Hart-Scott-Rodino Antitrust Improvements
        Act of
        1976 does not apply to this transaction.

      


      


      ARTICLE
        8

      TERMINATION

      


      8.1           Termination.  This
        Agreement and the transactions contemplated may be terminated in the following
        instances:

      


      
        	
                 

              	
                (a)

              	
                by
                  Buyer or Seller in accordance with Article 4.6 concerning Remedies
                  for
                  Title Defects and Article 4.7 Remedies for Environmental
                  Defects;

              


      

      


      
        	
                 

              	
                (b)

              	
                by
                  Buyer if the conditions set forth in Article 5.1 and/or Article
                  7.3 are
                  not satisfied in all

              


      

      material
        respects or waived prior to the Closing, and notwithstanding any other
        provisions of   this Agreement to the contrary, by Buyer if the
        Buyer is not in default hereunder and the Closing has not occurred on or
        before
        October 8, 2007;

      


      
        	
                 

              	
                (c)

              	
                by
                  Seller if the conditions set forth in Article 5.2 and/or Article
                  7.2 are
                  not satisfied in all material respects or waived prior to the Closing
                  Date, and notwithstanding any other provisions of this Agreement
                  to the
                  contrary, by the Seller if the Seller is not in default hereunder
                  and the
                  Closing has not occurred on or before October 8, 2007;
                  or

              


      

      


      (d)           by
        the mutual written agreement of Buyer and Seller

      


      8.2           Remedies.  If
        Closing does not occur on the Closing Date, as that may be extended by Seller
        and Buyer hereunder, due to Seller's breach of the terms of this Agreement,
        then
        Buyer may either declare this Agreement terminated and of no further force
        or
        effect and receive the prompt return of the Deposit or seek specific performance
        of this Agreement. If Closing does not occur due to Buyer's breach of the
        terms
        of this Agreement, Seller may declare this Agreement terminated and of no
        further force or effect and retain the Deposit as liquidated damages and
        not as
        a penalty for such breach. It is agreed that actual damages would be difficult
        to ascertain and that the amount of the liquidated damages is reasonable.
        Upon
        termination of this Agreement, Seller shall be free immediately to enjoy
        all
        rights of ownership of the Properties and to sell, transfer, encumber or
        otherwise dispose of the Properties to any party without any restriction
        under
        this Agreement.

      


      


      


      


      


      ARTICLE
        9

      DISCLAIMER

      


      ANY
        ASSIGNMENT AND BILL OF SALE EXECUTED PURSUANT HERETO SHALL BE EXECUTED WITHOUT
        ANY EXPRESS OR IMPLIED WARRANTY OR REPRESENTATION AS TO THE MERCHANTABILITY
        OF
        ANY OF THE WELLS OR EQUIPMENT OR THEIR FITNESS FOR ANY PURPOSE, AND WITHOUT
        ANY
        OTHER EXPRESS OR IMPLIED WARRANTY OR REPRESENTATION WHATSOEVER EXCEPT AS
        EXPRESSLY SET FORTH IN SAID ASSIGNMENT AND BILL OF SALE.  IT IS
        UNDERSTOOD AND AGREED THAT BUYER SHALL HAVE INSPECTED THE PROPERTY AND PREMISES
        AND SATISFIED ITSELF AS TO THEIR PHYSICAL AND ENVIRONMENTAL CONDITION, BOTH
        SURFACE AND SUBSURFACE, AND THAT BUYER SHALL ACCEPT ALL OF THE SAME IN THEIR
“AS
        IS, WHERE IS” CONDITION.  IN ADDITION NEITHER, SELLER, NOR SELLER’S
        REPRESENTATIVE (SUMMIT PETROLEUM LLC), MAKES ANY WARRANTY OR REPRESENTATION,
        EXPRESS OR IMPLIED, AS TO THE ACCURACY OR COMPLETENESS OF ANY DATA, INFORMATION
        OR MATERIALS HERETOFORE OR HEREAFTER FURNISHED BUYER IN CONNECTION WITH THE
        PROPERTIES, OR AS TO THE QUALITY OR QUANTITY OF HYDROCARBON RESERVES (IF
        ANY)
        ATTRIBUTABLE TO THE PROPERTIES OR THE ABILITY OF THE PROPERTIES TO PRODUCE
        HYDROCARBONS.  ANY AND ALL SUCH DATA, INFORMATION AND OTHER MATERIALS
        FURNISHED BY SELLER AND SELLER’S REPRESENTATIVE IS PROVIDED BUYER AS A
        CONVENIENCE AND ANY RELIANCE ON OR USE OF THE SAME SHALL BE AT BUYER’S SOLE
        RISK.  BUYER EXPRESSLY WAIVES THE PROVISIONS OF CHAPTER XVII,
        SUBCHAPTER E, SECTIONS 17.41 THROUGH 17.63, INCLUSIVE (OTHER THAN SECTION
        17.555, WHICH IS NOT WAIVED), VERNON’S TEXAS CODE ANNOTATED BUSINESS AND
        COMMERCE CODE (THE “DECEPTIVE TRADE PRACTICES ACT”).

      


      
        
           

        

        
          Page
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      ARTICLE
        10

      ASSUMPTIONS
        AND INDEMNIFICATION

      


      10.1
        BUYER’S ASSUMPTION AND INDEMNIFICATION; POTENTIAL THIRD PARTY
        LIABILITIES.  EXCEPT AS OTHERWISE PROVIDED IN
        THIS AGREEMENT, BUYER AGREES UPON THE OCCURRENCE OF CLOSING (I) TO ASSUME,
        AND
        TIMELY PAY AND PERFORM, ALL DUTIES, OBLIGATIONS AND LIABILITIES RELATED TO
        THE
        OWNERSHIP AND/OR OPERATION OF THE PROPERTIES, INSOFAR AND ONLY INSOFAR AS
        SUCH
        DUTIES, OBLIGATIONS AND LIABILITIES ARISE AND ARE ATTRIBUTABLE TO PERIODS
        FROM
        AND AFTER THE EFFECTIVE TIME AND LIMITED (AND ATTRIBUTABLE) TO THE INTERESTS
        INTHE PROPERTIES ASSIGNED TO BUYER BY SELLER (COLLECTIVELY, THE ASSUMED
        LIABILITIES) INCLUDING , WITHOUT LIMITATION, THOSE ARISING UNDER THE CONTRACTS
        AND AGREEMENTS DESCRIBED IN ARTICLE 2.2, AND (II) TO INDEMNIFY AND HOLD SELLER,
        ITS RELATED ENTITIES AND AFFILIATES, AND THE DIRECTORS, OFFICERS , EMPLOYEES
        CONSULTANTS AND AGENTS OF SUCH PARTIES, RESPECTIVELY HARMLESS FROM AND AGAINST
        ANY AND ALL CLAIMS, ACTIONS, LIABILITIES, LOSSES, DAMAGES, COSTS OR EXPENSES
        (INCLUDING COURT COSTS AND ATTORNEYS’ FEES) OF ANY KIND OR CHARACTER ARISING OUT
        OF OR OTHERWISE RELATING TO THE ASSUMED LIABILITIES. IN CONNECTION WITH (BUT
        NOT
        IN LIMITATION OF) THE FOREGOING, BUT SUBJECT TO THE OTHER PROVISIONS OF THIS
        AGREEMENT, IT IS SPECIFICALLY UNDERSTOOD AND AGREED THAT ASSUMED LIABILITIES
        SHALL INCLUDE ALL OBLIGATIONS TO PROPERLY PLUG AND ABANDON, OR RE-PLUG AND
        RE-ABANDON, ANY WELLS PRODUCING, SHUT-IN, OR DRILLED ON OR AFTER THE EFFECTIVE
        DATE AND LOCATED ON THE PROPERTIES. HOWEVER, EXCEPT FOR BUYER’S OBLIGATIONS SET
        FORTH UNDER ARTICLE 10.3, BUYER SHALL NOT INDEMNIFY OR HOLD SELLER HARMLESS
        FOR
        CLAIMS, COSTS, EXPENSES AND LIABILITIES INCURRED BY SELLER WITH RESPECT TO
        THE
        SALE OF THE PROPERTIES TO BUYER, OR THE NEGOTIATIONS LEADING TO SUCH SALE,
        OR
        THOSE THAT RESULT FROM OR ARE ATTRIBUTABLE TO ANY REPRESENTATION OF SELLER
        CONTAINED IN THIS AGREEMENT BEING UNTRUE OR A BREACH OF ANY WARRANTY OR COVENANT
        OF SELLER CONTAINED IN THIS AGREEMENT.

      


      10.2 LIMITATIONS
        ON DAMAGES. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN
        THIS AGREEMENT, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY
        EXEMPLARY, PUNITIVE, SPECIAL, INDIRECT, CONSEQUENTIAL, REMOTE OR SPECULATIVE
        DAMAGES OF  ANY OTHER PARTY ARISING OUT OF OR RELATING TO, IN ANY
        MANNER, THIS AGREEMENT, THE TRANSACTION CONTEMPLATED HEREUNDER, OR THE
        PROPERTIES; PROVIDED, HOWEVER THAT THIS WAIVER SHALL NOT AFFECT OR RELEASE
        ANY
        CLAIMS OF THIRD PARTIES (BEING PERSONS, ENTITIES OR GOVERNMENTAL AUTHORITIES
        WHO
        ARE NOT THE BUYER AND NOT THE SELLER) FOR WHICH A PARTY IS OBLIGATED TO
        INDEMNIFY THE OTHER UNDER THIS AGREEMENT.

      


      


      10.3  Assumption
        and Indemnification of Environmental
        Matters. Buyer agrees
        and acknowledges that (i) it has had, or prior to the
        Closing will have access to and the opportunity to inspect the Properties
        for
        all purposes, including without limitation, for the purposes of detecting
        the
        presence of hazardous or toxic substances, pollutants or other contaminants,
        environmental hazards, naturally occurring radioactive materials (NORM) and
        produced water contamination of the surface and/or subsurface, (ii) it has,
        or
        prior to the Closing will have, satisfied itself as to the physical and
        environmental condition of the Properties, both surface and subsurface, and
        their method of operation and except as set forth herein, agrees to accept
        an
        assignment of the Properties at Closing on an “AS IS, WHERE IS” BASIS,
“WITH ALL FAULTS”,  and (iii) in making the decision to enter
        into this Agreement and consummate the transactions contemplated hereby,
        Buyer
        has relied solely on the basis of its own independent investigation of the
        Properties and the records related thereto.

       

      
        
           

        

        
          Page
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      UPON
        CLOSING, BUYER HEREBY ASSUMES AND SHALL BE RESPONSIBLE FOR AND AGREES TO
        INDEMNIFY, DEFEND AND HOLD HARMLESS SELLER FROM AND AGAINST ANY AND ALL CLAIMS,
        LIABILITY OR LOSSES, (INCLUDING, WITHOUT LIMITATION, LOSSES FROM DAMAGE TO
        PROPERTY, ALLEGED GROUNDWATER CONTAMINATION, INJURY TO OR DEATH OF PERSONS
        OR
        OTHER LIVING THINGS, NATURAL RESOURCE DAMAGES, CERCLA RESPONSE COSTS,
        ENVIRONMENTAL REMEDIATION AND RESTORATION COSTS OR FINES) OR PENALTIES ARISING
        OUT OF OR ATTRIBUTABLE TO, IN WHOLE OR IN PART BY A VIOLATION OF, FAILURE
        TO
        FULFILL DUTIES IMPOSED BY OR INCURRENCE OF LIABILITY UNDER ANY COMMON LAW
        RELATING TO HUMAN HEALTH, SAFETY OR THE ENVIRONMENT OR ANY ENVIRONMENTAL
        LAWS
        (AN “ENVIRONMENTAL MATTER”) OCCURRING AT ANY TIME BEFORE, AT OR AFTER THE
        EFFECTIVE TIME WITHOUT REGARD TO THE SOLE, PARTIAL OR CONCURRENT NEGLIGENCE,
        STRICT LIABLITY OR OTHER FAULT OF THE SELLER, REGARDLESS OF WHEN THE EVENTS
        THAT
        CAUSED SUCH CONDITION TO EXIST OR THE OBLIGATION TO ARISE, 
        PROVIDED, HOWEVER, THAT SELLER SHALL INDEMNIFY, DEFEND AND HOLD HARMLESS
        THE
        BUYER FROM AND AGAINST ANY AND ALL LOSSES RESULTING FROM ANY ENVIRONMENTAL
        MATTER OCCURRING AT ANY TIME PRIOR TO THE EFFECTIVE TIME TO THE EXTENT THAT
        SUCH
        LOSSES RESULT FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SELLER OR
        THAT
        HAVE BEEN ASSERTED IN A THIRD-PARTY LAWSUIT OR ADMINISTRATIVE PROCEEDING
        OR
        ORDER THAT IS FILED, ISSUED OR COMMENCED AGAINST SELLER OR HAS BEEN DOCUMENTED
        BY BUYER TO SELLER IN WRITING ON OR BEFORE THE CLOSING
        DATE.

      


      


      10.4   Occasional
        Sale.  Since this transaction is an isolated or occasional sale,
        no tax will be collected from Buyer. If, however, this transaction is later
        deemed to be other than an occasional sale, Buyer agrees to be responsible,
        and
        shall indemnify and hold Seller harmless, for any and all sales or transfer
        taxes or fees (including related penalty, interest or legal costs) due by
        virtue
        of this transaction on the Properties assigned and conveyed, and the Buyer
        shall
        remit such sales or transfer taxes at that time. Seller and Buyer agree to
        reasonably cooperate with each other in demonstrating that the requirements
        for
        an occasional or isolated sale or any other sales tax exemption have been
        met.

      


      


      ARTICLE
        11

      ARBITRATION
        AND MEDIATION

      


      In
        case
        of a disagreement between the Parties to this Agreement as to any right,
        obligation, term or provision hereof or involving a total disputed amount
        or
        claim(s) equal to or greater than $25,000.00, the Parties shall make an earnest
        effort to settle such disagreement to their mutual satisfaction.  If
        any such dispute regarding this Agreement cannot be reconciled by the Parties
        to
        this Agreement, then any Party may provide notice to the other specifying
        with
        particularity the items of disagreement and a request that the matter be
        resolved by mediation.  Such notice shall include the name of a
        mediator acceptable to the Party requesting mediation.  If the dispute
        is not resolved by mediation to the satisfaction of the Parties, or if the
        Parties are unable to agree upon a mediator, within thirty (30) days after
        receipt of such written notice, then any such dispute shall be settled by
        arbitration and the results of such arbitration shall be binding upon all
        Parties to this Agreement in all respects as set forth below. Arbitration
        may be
        initiated by written notice from any Party to this Agreement to the other
        that
        the previously noticed dispute has not been resolved by mediation and is
        being
        submitted to arbitration under the terms of this Agreement.  A single
        arbitrator shall be chosen by the Parties to the dispute by submitting names
        of
        eleven (11) arbitrators experienced in the area of the dispute from a listing
        of
        twenty (20) arbitrators supplied by the American Arbitration
        Association.  Said selection by both Parties shall take place within
        ten (10) days after the Parties have received the listing from the American
        Arbitration Association.  The lists of the Parties shall be compared
        and the first name to appear on both lists shall be the arbitrator of the
        dispute.  Should either Party fail or refuse to submit a list of
        eleven arbitrators then the other Party shall select an arbitrator who shall
        be
        the sole arbitrator and shall resolve the dispute as set out
        herein.  All arbitrators shall be individuals who have had prior
        experience in oil and gas exploration and production and shall function as
        independent and neutral arbitrators.  In the selection of arbitrators,
        the Parties shall take into consideration the nature of the matter submitted
        for
        arbitration.  (Thus, for example, professional engineers should be
        selected to arbitrate issues which are primarily engineering in nature and
        accountants who are members of the Council of Petroleum Accountants Societies
        should be selected to arbitrate matters which are primarily accounting in
        nature.)  Arbitrations under this paragraph shall be conducted under
        the Texas Arbitration Statute (Vernon’s Ann. Tex. Civ. St. Arts. 224 to 238-6)
        and shall apply Texas law.  All matters concerning the conduct of the
        arbitrators shall be governed by the provisions of the American Arbitration
        Association.  No dispute related to this Agreement shall be brought
        before any court of law or equity; however, judgment upon the award or decision
        rendered by the arbitrators may be entered in any court having
        jurisdiction.

      


      
        
           

        

        
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      ARTICLE
        12

      MISCELLANEOUS

      


      12.1                      Notices.  All
        notices required or permitted under this Agreement shall be in writing, and
        any
        notice hereunder shall be deemed to have been made when delivered whether
        by:
        (i) hand; (ii) overnight delivery service; (iii) telecopy; (iv) electronic
        or
        (v) first class certified mail, postage prepaid, with return receipt requested,
        to the address as set forth below.  Either party may, by written
        notice deliver to the other, change the address to which notices shall be
        delivered.

      


        Legacy
        Reserves Operating
        LP

      
        	
                 

              	
                  303
                  West Wall, Suite 1600

              


      

      
        	
                 

              	
                  Midland,
                  Texas 79702

              


      

      
        	
                 

              	
                Fax:
                  (432) 684-3774

              


      

      
        	
                 

              	
                Phone:
                  (432) 682-2516

              


      

      
        	
                 

              	
                kmcgraw@legacylp.com

              


      

      
        	
                 

              	
                Attention:
                  Mr. Kyle A. McGraw

              


      

      


      
        	
                 

              	
                Summit
                  Petroleum Management Corporation

              


      

      
        	
                 

              	
                550
                  West Texas, Suite 700

              


      

      
        	
                 

              	
                Midland,
                  Texas 79701

              


      

      


      
        	
                 

              	
                Fax:
                  (432) 682-9809

              


      

      Phone:  (432)
        682-9800

      jbehrmann@summitpetroleumllc.com

      Attention:  Mr.
        James J.
        Behrmann

      


      


      12.2           Reservations
        and Exceptions.  Sale and purchase of the Properties is made
        subject to all reservations, exceptions, limitations, contracts and other
        burdens or instruments which are of record or of which Buyer has actual or
        constructive notice, including any matter included or referenced in the
        materials made available by Seller to Buyer.

      


      12.3           Entire
        Agreement.  This instrument states the entire agreement between
        Buyer and Seller and supersedes all other agreements, either written or oral,
        between Seller and Buyer concerning the sale and purchase of the
        Properties.  This Agreement may be supplemented, altered, amended,
        modified or revoked in writing only, signed by all of the parties.  No
        material representation, warranty, covenant, agreement, promise, inducement
        or
        statement, whether oral or written, has been made by Seller or Buyer and
        relied
        upon by the other that is not set forth in this Agreement or in the instruments
        referred to herein, and neither Seller nor Buyer shall be bound by or liable
        for
        any alleged representation, warranty, covenant, agreement, promise, inducement
        or statement not so set forth.

       

      
        
           

        

        
          Page
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      12.4           Survival.  All
        representations, warranties and covenants made herein by Buyer and Seller
        shall
        be continuing and shall be true and correct on and as of the Closing Date
        with
        the same force and effect as if made at that time and all such representations,
        warranties and covenants shall, subject to the limitations set forth below,
        survive the Closing and deliverance of the Assignment for a period of six
        (6)
        months.   Notwithstanding the foregoing, the representations and
        warranties of Seller under Article 5.1(d) shall terminate immediately upon
        Closing and any liability of Seller (or any party claimed to be liable by,
        through or under Seller) for damages, losses or costs alleged to arise from
        the
        breach, falsity, failure or violation of the representations and warranties
        under Article 5 shall be limited to the allocated Purchase Price for the
        affected Property or Properties.

      


      12.5           Assignability.  This
        Agreement shall be binding upon and shall inure to the benefit of the parties
        and their respective successors and assigns; provided, however, neither Buyer
        or
        Seller may, prior to the Closing, assign its rights or delegate its duties
        or
        obligations under this Agreement without the prior written consent of the
        other
        party.

      


      12.6           Publicity.   Seller
        and Buyer shall consult with each other with regard to all publicity and
        other
        releases at or prior to the Closing concerning this Agreement and the
        transaction contemplated hereby and except as required by applicable law
        or
        other applicable rules or regulations of any governmental body or stock
        exchange, neither party shall issue any publicity, public notice concerning
        the
        Purchase Price or other release without the prior written consent of the
        other
        party.

      


      12.7           Further
        Assurance.  After Closing each of the parties shall execute,
        acknowledge and deliver to the other such further instruments, and take such
        other actions as may be reasonably necessary to carry out the provisions
        of this
        Agreement.  However, Buyer shall assume all responsibility for
        notifying the purchaser of oil and gas production from the Properties, and
        such
        other designated persons who may be responsible for disbursing payments for
        the
        purchase of such production, of the change of ownership of the
        Properties.  Seller shall take all actions necessary to effectuate the
        transfer of such payments to Buyer as of the Effective Time.

      


      12.8           Destruction.  For
        a period of five (5) years after the Closing Date (or for such longer period
        as
        may be required by law or governmental regulation), Buyer shall not
        intentionally destroy or give up possession of any original or final copy
        of the
        documents delivered by Seller to Buyer hereunder without first offering Seller
        the opportunity (by delivery of written notice to Seller), at Seller’s expense
        (without any payment to Buyer), to obtain such original or final copy or
        a copy
        thereof.

      


      12.9           Headings.  The
        headings are for guidance only and shall have no significance in the
        interpretations of this Agreement.

      


      12.10                      Counterpart
        Execution.  This Agreement may be executed by Buyer and Seller in
        any number of counterparts, no one of which need be executed by all
        parties.  Each of such counterparts shall be deemed an original
        instrument, and all counterparts shall together constitute but one and the
        same
        instrument.  This agreement shall become operative when each party has
        executed at least one counterpart. The return of executed documents by facsimile
        or electronic transmission shall be effective between the parties and shall
        be
        followed by the return of executed originals.

      


      12.11                      Severance.  If
        any provision of this Agreement shall be determined void, illegal or
        unenforceable, all of the other provisions of this Agreement shall remain
        in
        full force and effect, and the provision or provisions that are determined
        to be
        void, illegal or unenforceable shall be limited so that they shall remain
        in
        effect to the extent permitted by law.

      


      12.12        
         Relationship of the Parties.   This Agreement does
        not create and shall not be construed to create a partnership, association,
        joint venture or a fiduciary relationship of any kind or character between
        any
        parties to this Agreement (including one individual Seller to another Seller
        or
        Seller to Buyer) and shall not be construed to impose any duty, obligation
        or
        liability arising from such a relationship by or with respect to any party
        to
        this Agreement.

      


      12.13                      No
        Third-Party Beneficiaries.  This Agreement is not intended to
        confer upon any person not a party hereto any rights or remedies hereunder,
        and
        no person other than the parties hereto is entitled to rely on any
        representation, covenant or agreement contained herein.

       

      
        
           

        

        
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      12.14     Governing
        Law.  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
        HERETO SHALL BE GOVERNED, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS
        OF
        THE STATE OF TEXAS WITHOUT REFERENCE TO CONFLICT OF LAWS.  THE PARTIES
        AGREE THAT ANY LITIGATION RELATING DIRECTLY OR INDIRECTLY TO THIS AGREEMENT
        MUST
        BE BROUGHT BEFORE AND DETERMINED BY A COURT OF COMPETENT JURISDICTION IN
        MIDLAND
        COUNTY, TEXAS.

       

      12.15   Audit
        Rights.

       

      Seller
        agrees to make available to Buyer prior to and for a period of twelve months
        following Closing any and all existing information and documents in the
        possession of Seller that Buyer may reasonably require to comply with Buyer’s
        tax and financial reporting requirements and audits.  Without limiting
        the generality of the foregoing, Seller will use its commercially reasonable
        efforts after execution of this Agreement and for twelve months following
        Closing to cooperate with the independent auditors chosen by Buyer (“Buyer’s
        Auditor”) in connection with their audit of any annual revenue and expenses
        statements of the Assets that Buyer or any of its Affiliates requires to
        comply
        with their tax and financial reporting requirements, and their review of
        any
        interim quarterly revenue and expense statements of the Assets that Buyer
        requires to comply with such reporting requirements.  Buyer’s
        cooperation will include (i) such reasonable access to Seller’s employees who
        were responsible for preparing the revenue and expense statements and work
        papers and other supporting documents used in the preparation of such financial
        statements as may be required by Buyer’s Auditor to perform an audit in
        accordance with generally accepted auditing standards, and (ii) delivery
        of one
        or more customary representation letters (in substantially the form previously
        approved by Seller and Buyer) from Seller to Buyer’s Auditor that are requested
        by Buyer to allow such auditors to complete an audit (or review of any interim
        quarterly financials), and to issue an opinion that in Buyer’s experience is
        acceptable with respect to an audit or review of those revenue and expense
        statements required pursuant to this Section.  Buyer will reimburse
        Seller, within three (3) business days after demand therefore, for any
        reasonable out-of-pocket and overhead costs with respect to any costs incurred
        by Seller in complying with the provisions of this Section 12.15.

      


      12.16  Board
        Approval.      This Agreement is expressly
        subject to Buyer obtaining approval of the board of directors of its general
        partner, which approval shall be obtained on or before August 31, 2007.  In
        the event Buyer does not notify Seller of such board approval on or before
        5:00
        pm Central Standard Time, August 31, 2007, this Agreement shall terminate
        and be
        of no further force and effect.

      


      EXECUTED
        this 28th day
        of August, 2007.

      

        	 	
                SELLER:

                 

                SUMMIT PETROLEUM MANAGEMENT
                  CORPORATION

              	 
	 	 	 	 
	
                 

              	
                By:
                  

              	/s/ Dennis
                R.
                Johnson	 
	 	 	Dennis
                R.
                Johnson	 
	 	 	President
&
                CEO	 
	 	 	 	 


      

    

    	 	SUMMIT
            PETROLEUM LLC	 
	 	 	 	 
	
             

          	
            By:
              

          	/s/ Dennis
            R. Johnson	 
	 	 	Dennis
            R. Johnson	 
	 	 	President
            & CEO	 
	 	 	 	 


     

    
      	 	
              BUYER:

               

              LEGACY RESERVES OPERATING LP,
                a

              Delaware limited
                partnership

              BY: Legacy Reserves Operating GP LLC,
                its

              general partner

              By: Legacy Reserves LP, its sole
                member

              By: Legacy Reserves GP, LLC, its general
                partner 

            	 
	 	 	 	 
	
               

            	
              By:
                

            	/s/ Kyle
              A. McGraw	 
	 	 	Kyle
              A. McGraw	 
	 	 	Executive
              Vice President Business Development and Land	 
	 	 	 	 


    

     

    
      
         

      

      
        Page
          18of 18