Exhibit 10.1

                                                           STRICTLY CONFIDENTIAL

                                ENGAGEMENT LETTER

                                                               February 21, 2011

BARON ENERGY, INC.
392 W. Mill Street
New Braunfels, TX 78130
Attention: Mr. Ronnie L. Steinocher
           President & Chief Executive Officer

     Re: Global Corporate Finance Advisory Assignment

Mr. Steinocher:

     This agreement (this "Agreement") will confirm the arrangements under which
Sunrise  Securities Corp.  ("Sunrise") has been engaged by Baron Energy,  Inc. a
corporation  organized under the laws of Nevada (the  "Company"),  to advise the
Company on a broad  array of issues  which face the  Company,  which are broadly
defined  as:  (a)  financing;   (b)  corporate  restructuring  and  acquisitions
advisory; and (c) merger/tender advisory for targeted acquisition(s).

1. Engagement.

a.   Financing.  The Company hereby  retains  Sunrise and Sunrise shall have the
     right to act as the Company's  primary  advisor and lead  placement  agent,
     arranger,  lead  advisor  or  initial  purchaser,  as the case  may be,  in
     connection  with any and all possible  issuances of capital by the Company,
     and performing analysis for the Company of potential  transactions  related
     to debt,  equity,  convertible  securities  of the  Company,  or any  other
     acquisition and drilling finance  structures  ("Securities"),  in each case
     relating to the  acquisition of properties or other  companies,  during the
     term of this engagement.

b.   Corporate  Restructuring and Acquisition  Advisory.  In connection with its
     engagement hereunder, Sunrise shall:

     i.   Advise the Company on optimal  strategies for  restructuring its debt,
          whether  secured or unsecured,  and assist the Company in  negotiating
          new  terms  for  its  debt,   whether  via   reduction  in  principal,
          forgiveness  of interest,  and/or  exchange for equity or  convertible
          securities of the Company.

     ii.  Provide an in-depth  analysis of the potential  value of  acquisitions
          currently  contemplated  by the  Company,  and assist  the  Company in
          generating models, analysis and interpretations  thereof,  independent
          reserve reports, lease operating expenses,  gathering and transmission
          assets and agreements, product pricing and environmental reports;
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     iii. Advise the  Company on the  optimal  acquisition  strategy,  including
          pricing, use of equity and/or debt;

     iv.  Assist  the  Company   with   financial   modeling   of   acquisitions
          contemplated by the Company;

     vi.  Identify for the Company third party  consultants and advisers,  which
          may include but is not limited to engineering,  technical,  accounting
          and market consultants;

     vii. Negotiate,  as directed by the Company,  definitive  documentation and
          other   agreements   necessary  or  desirable   with  respect  to  the
          consummation of the acquisition and the financing thereof.

c.   Merger/Tender  Advisory.  In  connection  with  its  engagement  hereunder,
     Sunrise shall:

     i.   Advise the Company on optimal  strategies  for a  potential  merger or
          tender  for  the  assets  or  units  of  other   entities   ("Targeted
          Acquisitions");

     ii.  Provide  an  in-depth  analysis  of the  potential  value of  Targeted
          Acquisitions  to the Company and its potential to influence the public
          share price of the Company's  common stock,  and assist the Company in
          generating models, analysis and interpretations  thereof,  independent
          reserve reports, lease operating expenses,  gathering and transmission
          assets and agreements, product pricing and environmental reports;

     iii. Advise the  Company on the  optimal  acquisition  strategy,  including
          pricing, use of equity and/or debt;

     iv.  Assist the Company with financial modeling of Targeted Acquisitions;

     vi.  Identify for the Company third party  consultants and advisers,  which
          may include but is not limited to engineering,  technical,  accounting
          and market consultants;

     vii. Negotiate,  as directed by the Company,  definitive  documentation and
          other   agreements   necessary  or  desirable   with  respect  to  the
          consummation of Targeted Acquisition(s) and the financing thereof;

     viii.Negotiate,  as  directed  by  the  Company,  with  shareholders,  unit
          holders,  officers,  general  partners,  and creditors in an effort to
          consummate  a  merger/tender   between  the  Company  and  the  target
          entity(ies).

2. Cooperation.

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a.   To the extent  legally and  contractually  permissible,  the Company  shall
     furnish Sunrise with all  information and data in the Company's  possession
     or  reasonably  available  to the Company  that  Sunrise  shall  reasonably
     request in connection  with  Sunrise's  activities on the Company's  behalf
     hereunder,  and shall provide  Sunrise  reasonable  access to the Company's
     officers,  directors,  employees  and  professional  advisors.  The Company
     agrees to promptly advise Sunrise of all developments  materially affecting
     the Company,  any proposed  transaction or the accuracy of the  information
     previously furnished to Sunrise by the Company.

b.   Sunrise:  (i) will be  relying  on  information  and data  provided  by the
     Company and available from generally  recognized  public  sources,  without
     having  independently  verified the accuracy or  completeness  of the same,
     (ii) does not assume responsibility for the accuracy or completeness of any
     such  information and data,  (iii) will not make an appraisal of any assets
     or  liabilities  of the Company,  and (iv) retains the right to perform due
     diligence on the Company during the course of this engagement.

c.   In connection with its responsibilities  under this Agreement,  the Company
     may  prepare  with  Sunrise's  assistance,   a  registration  statement  or
     confidential offering or placement memorandum or road show materials to use
     in connection with a transaction  (the "Offering  Document") and such other
     documents as are necessary for a  transaction,  in such form as Sunrise and
     the Company determine is appropriate to market the Securities.  The Company
     agrees that the Offering Document shall not, as of its date of publication,
     to the best of its knowledge contain any untrue statement of material fact,
     or omit to state a material fact necessary to make the statements contained
     therein,  in light  of the  circumstances  in which  they  were  made,  not
     misleading;  provided  the Company  shall not be liable for any  statements
     based on information provided by third parties.

3. Use of Name, etc.

a.   The Company agrees that,  unless  required by law, any reference to Sunrise
     in any release, announcement, or marketing material is subject to Sunrise's
     prior  written  approval,  which  may be  given  or  withheld  in its  sole
     discretion.  If Sunrise resigns upon written notice to the Company prior to
     the  dissemination  of any such  release,  communication  or  material,  no
     reference  shall be made  therein to  Sunrise,  despite  any prior  written
     approval that may have been given therefore.

b.   In  connection  with  any  transaction,  (i) the  purchase  and sale of any
     instruments, including the determination of the offering price, or interest
     rate, as the case may be, of the instruments and any related  discounts and
     commissions to Sunrise,  shall be an  arm's-length  commercial  transaction
     between the  Company and its  counterparty,  (ii)  Sunrise  will not be the
     fiduciary of the Company or its stockholders,  creditors,  employees or any
     other party,  (iii) Sunrise shall not assume a fiduciary  responsibility in
     favor of the  Company  (irrespective  of whether  Sunrise has advised or is
     currently  advising the Company on other matters) and Sunrise shall have no

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     obligation to the Company with respect to any transaction  except as may be
     set forth in this  Agreement or another  definitive  agreement  between the
     parties,  and  (iv)  Sunrise  shall  not  provide  any  legal,  accounting,
     regulatory  or tax advice with respect to any  transaction  and the Company
     shall consult its own legal, accounting, regulatory and tax advisors to the
     extent it deems appropriate.

4.  Compensation.  The Company agrees to pay Sunrise at closing an amount out of
proceeds of Securities sold in the Transaction:

a.   Financing. Upon the placement,  purchase or origination,  as applicable, of
     any equity instruments,  a fee in an amount of 7% of the gross proceeds for
     equity instruments placed,  purchased, or originated,  as applicable.  Upon
     the  placement,  purchase  or  origination,  as  applicable,  of  any  debt
     instruments  (excluding  bank debt),  a fee in an amount of 3% of the gross
     proceeds  for  debt  instruments  placed,   purchased,  or  originated,  as
     applicable. Upon the placement,  purchase or origination, as applicable, of
     any convertible or preferred  instruments,  a fee in an amount of 5% of the
     gross proceeds of convertible or preferred  instruments placed,  purchased,
     or originated, as applicable.

b.   Corporate Restructuring and Acquisition Advisory. For services described in
     Section 1b of this Agreement, the Company shall grant Sunrise:

     i.   Upon  execution  of this  Agreement,  1,250,000  warrants  to purchase
          restricted  common stock in the Company at a price of $0.01 per share.
          The warrants will expire three years from grant date.

     ii.  Upon the  recapitalization  or all  current  private  debt,  1,250,000
          warrants to purchase restricted common stock in the Company at a price
          of $0.01 per share.  The  warrants  will expire three years from grant
          date.

c.   Merger/Tender  Advisory  for Targeted  Acquisitions.  In the event that the
     Company  successful  consummates a  transaction  as described in 1c of this
     agreement,  the Company shall grant Sunrise 2,500,000  warrants to purchase
     restricted  common stock in the Company at a price of $0.01 per share.  The
     warrants will expire three years from grant date.

5.  Expenses.  In  addition  to any fees that may be paid to Sunrise  hereunder,
whether or not any  transaction  occurs,  the Company  will  reimburse  Sunrise,
promptly upon receipt of an invoice  therefore,  for all out-of-pocket  expenses
(including travel expenses, reasonable fees and expenses of its counsel, and the
reasonable  fees and  expenses  of any other  independent  experts  retained  by
Sunrise)  incurred by Sunrise in  connection  with the  engagement  contemplated
hereunder  which  expenses  are  pre-approved  in writing by the  Company not to
exceed $1,000.

6.  Indemnification,  etc. As further  consideration  under this Agreement,  the
Company shall indemnify and hold harmless the Indemnified Persons (as defined in

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Schedule A) in accordance  with Schedule A. The terms and provisions of Schedule
A are  incorporated  by  reference  herein,  constitute  a part hereof and shall
survive any termination or expiration of this Agreement.

7. Termination.  Sunrise's engagement hereunder will commence upon the execution
of this Agreement by both parties, and will continue unless terminated by either
party  on five  (5)  business  days'  written  notice  to the  other.  Upon  any
termination  of this  Agreement,  the  Company  shall  promptly  pay Sunrise any
accrued  but  unpaid  fees  hereunder,  and  shall  reimburse  Sunrise  for  any
unreimbursed  expenses  that are  reimbursable  hereunder.  In the  event of any
termination  of this  Agreement by the Company  (other than because of Sunrise's
material breach of an express obligation under this Agreement), Sunrise shall be
entitled to the applicable fee set forth in Section 4 if the Company consummates
a  transaction  from a Sunrise  source  prior to that date which is twelve  (12)
months from the date of  termination  of this  Agreement.  Any such fee shall be
payable  upon  the  closing  of  any  such  transaction.  In  the  event  of any
termination of this  Agreement by Sunrise,  Sunrise shall not be entitled to any
fees  hereunder.  Upon  any  termination  of  this  Agreement,  the  rights  and
obligations of the parties hereunder shall terminate, except for the obligations
set forth in Sections  4-7,  9-15,  and  Schedule A, which  shall  survive  such
termination.

8. Other Transactions,  Disclaimer.  The Company  acknowledges that Sunrise is a
full service financial institution engaged in a wide range of investment banking
and  other  activities  (including  investment  management,  corporate  finance,
securities  issuing,  trading and brokerage  activities) from which  conflicting
interests,  or duties, may arise.  Information that is held elsewhere within the
Sunrise,  but of which none of the individuals in Sunrise's  investment  banking
department  involved in providing the services  contemplated  by this  Agreement
actually has (or without  breach of internal  procedures  can  properly  obtain)
knowledge,  will  not for any  purpose  be taken  into  account  in  determining
Sunrise's responsibilities to the Company under this Agreement. Sunrise will not
have any duty to disclose to the  Company or utilize for the  Company's  benefit
any non-public  information  acquired in the course of providing services to any
other person,  engaging in any  transaction (on its own account or otherwise) or
otherwise  carrying on its business.  The Company  acknowledges  and agrees that
Sunrise shall have no express or implied  authority or permission to directly or
indirectly  enter into or bind the Company to any commitments or to agree to the
terms of any transaction.

9.  Governing  Law.  This  Agreement  shall be  governed  by, and  construed  in
accordance with, the internal laws of the State of Texas.

10.   Jurisdiction  and  Venue.   Each  of  the  Company  and  Sunrise  consents
specifically  to the exclusive  jurisdiction of the federal courts of the United
States  sitting in the  Southern  District of Texas,  or if such  federal  court
declines  to  exercise  jurisdiction  over any  action  filed  pursuant  to this
Agreement, the courts of the State of Texas sitting in the County of Harris, and
any court to which an appeal may be taken in  connection  with any action  filed
pursuant to this Agreement,  for the purposes of all legal  proceedings  arising
out of or relating to this Agreement.  In connection with the foregoing consent,
each party  irrevocably  waives,  to the fullest  extent  permitted  by law, any
objection which it may now or hereafter have to the court's exercise of personal

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jurisdiction  over each of the Company and Sunrise or the laying of venue of any
such  proceeding  brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient  forum.  The Company
will  pay  Sunrise's  legal  fees  in  connection   with  Sunrise's   successful
enforcement  of its  rights  under  this  Agreement.  The  Company  and  Sunrise
irrevocably agree to waive any right to trial by jury in any action, proceeding,
claim or counterclaim  (whether based upon contract,  tort or otherwise) brought
by or on  behalf of any  party  related  to or  arising  out of this  engagement
letter,  any transaction or the performance of the services  hereunder.  Each of
the Company and Sunrise further consents that service of process may be affected
in any manner permitted under the laws of the State of Texas.

11.  Payments.   All  payments  to  be  made  to  Sunrise   hereunder  shall  be
non-refundable  and made in cash by wire transfer of immediately  available U.S.
funds.  Such fee may be paid by the  Company in the form of a "gross  spread" or
similar  underwriting  discount,  if  Sunrise's  role  hereunder  is  that of an
underwriter or an initial purchaser.  The Company's obligation to pay any fee or
expense set forth herein shall be absolute  and  unconditional  and shall not be
subject to reduction by way of setoff, recoupment or counterclaim.  Fees payable
under Section 4(a) of this agreement shall be withheld by Sunrise from the gross
proceeds of any Transaction.

12.  Announcements,  etc. The Company  agrees that Sunrise  may,  following  the
consummation of a transaction,  describe the transaction in any form of media or
in Sunrise's marketing  materials,  stating Sunrise's role and, with the consent
of the Company,  other material terms of the Transaction and using the Company's
name and logo in connection therewith. The Company agrees that any press release
it may issue  announcing a  transaction  will, at Sunrise's  request,  contain a
reference to Sunrise's  role in the  transaction.  Sunrise  agrees to secure the
Company's  approval on all press releases is may issue,  which approval will not
be unreasonably withheld.

13.  Notices.  Notice given  pursuant to any of the provisions of this Agreement
shall be in writing and shall be mailed or delivered  (a) if to the Company,  at
392 W. Mill Street, New Braunfels, TX 78130, Attn: Ronnie L. Steinocher, and (b)
if to Sunrise  Securities  Corp, at 641  Lexington  Avenue,  New York,  New York
10022, Attention: Marcia Kucher.

14.  Miscellaneous.  This Agreement constitutes the entire agreement between the
parties with  respect to the subject  matter  hereof,  and may not be amended or
modified  except in writing signed by each party hereto.  This Agreement may not
be assigned by either  party  hereto  without the prior  written  consent of the
other, to be given in the sole discretion of the party from whom such consent is
being  requested.  Any attempted  assignment of this Agreement made without such
consent  shall be void and of no  effect,  at the  option  of the  non-assigning
party.  This  Agreement is solely for the benefit of the Company and Sunrise and
no other  person  shall  acquire or have any  rights  under or by virtue of this
Agreement.  If any  provision  hereof  shall  be held by a  court  of  competent
jurisdiction to be invalid,  void or  unenforceable  in any respect,  or against
public policy,  such determination  shall not affect such provision in any other
respect nor any other provision  hereof.  The Company and Sunrise shall endeavor
in good  faith  negotiations  to  replace  the  invalid,  void or  unenforceable

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provisions. Headings used herein are for convenience of reference only and shall
not affect the interpretation or construction of this Agreement.  This Agreement
may be executed in facsimile counterparts, each of which will be deemed to be an
original  and all of  which  together  will  be  deemed  to be one and the  same
document.

15.  Patriot Act.  Sunrise  hereby  notifies  the Company  that  pursuant to the
requirements  of the USA  PATRIOT  Act (the  "Patriot  Act"),  it is required to
obtain,  verify and record  information  that identifies the Company in a manner
that  satisfies  the  requirements  of the Patriot Act.  This notice is given in
accordance with the requirements of the Patriot Act.

Please sign below and return to Sunrise to indicate your acceptance of the terms
set forth herein,  whereupon this Agreement and your acceptance shall constitute
a binding agreement between the Company and Sunrise as of the date first written
above.

                                         Sincerely,

                                         SUNRISE SECURITIES CORP.


                                         By /s/ Frank D. Bracken, III
                                            ------------------------------------
                                         Name: Frank D. Bracken, III
                                         Title: Senior Managing Director

Accepted and Agreed:

BARON ENERGY, INC.


By /s/ Ronnie L. Steinocher
   -----------------------------------------
Name: Ronnie L. Steinocher
Title: President  & Chief Executive Officer

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                                   SCHEDULE A

Reference is made to the  engagement  letter  attached  hereto  between  Sunrise
Securities  Corp.  and the Company as defined  therein (as amended  from time to
time in accordance with the terms thereof,  the  "Agreement").  Unless otherwise
noted,  all  capitalized  terms used herein shall have the meanings set forth in
the Agreement.

As further  consideration  under the Agreement,  the Company agrees to indemnify
Sunrise,  its  affiliates,  and each of their  respective  officers,  directors,
managers,  members,  partners,  employees  and  agents,  and any  other  persons
controlling  Sunrise  or any of its  affiliates  within  the  meaning  of either
Section  20 of  the  Securities  Exchange  Act  of  1934  or  Section  15 of the
Securities Act of 1933 (each such person,  including Sunrise,  is referred to as
an  "Indemnified  Person')  from and against any  claims,  liabilities,  losses,
damages,  joint or several  (including  all legal or other  expenses  reasonably
incurred by an  Indemnified  Person in connection  with the  preparation  for or
defense of any threatened or pending claim,  action,  or proceeding,  whether or
not resulting in any liability)  ("Losses"),  related to or arising out of or in
connection with Sunrise's  services (whether  occurring before, at, or after the
date hereof)  under the  Agreement,  a transaction  or any proposed  transaction
contemplated  by the  Agreement or any  Indemnified  Person's role in connection
therewith,  whether or not resulting  from an Indemnified  Person's  negligence,
provided, however, that the Company will not be liable to the Indemnified Person
hereunder to the extent such Losses are determined,  by a final,  non-appealable
judgment by a court of competent jurisdiction, , to have resulted from the gross
negligence,  bad faith, or willful  misconduct of the Indemnified Person seeking
indemnification hereunder.

The Company  agrees that no  Indemnified  Person shall have any liability to the
Company or its owners,  parents,  affiliates,  security holders or creditors for
any  Losses,  except to the  extent  such  Losses  are  determined,  by a final,
non-appealable judgment by a court of competent  jurisdiction,  to have resulted
from the gross negligence,  bad faith, or willful  misconduct of the Indemnified
Person seeking indemnification hereunder.

The Company shall not be liable for the  settlement,  compromise,  or consent to
the entry of any judgment in any pending or threatened claim,  action,  suit, or
proceeding   ("Action")  without  its  written  consent,   which  shall  not  be
unreasonably withheld or delayed. In addition, the Company will not, without the
prior written consent of Sunrise, settle, compromise, or consent to the entry of
any  judgment  in  any  pending  or  threatened   Action  in  respect  of  which
indemnification  may be sought hereunder  (whether or not any Indemnified Person
is a party to such Action) unless  Sunrise has given its prior written  consent,
which  shall  no  be  unreasonably  withheld  or  delayed,  or  the  settlement,
compromise, consent or termination (i) includes an express unconditional release
of such  Indemnified  Person from all Losses arising out of such Action and (ii)
does not include any admission of fault on the part of any Indemnified Person.

If, for any reason (other than the gross negligence or willful  misconduct of an
Indemnified  Person as provided  above) the  foregoing  indemnity is  judicially
determined  to be  unavailable  to an  Indemnified  Person  for  any  reason  or
insufficient to hold any Indemnified Person harmless, then the Company agrees to
contribute to any such Losses in such  proportion as is  appropriate  to reflect
the relative benefits received by the Company on the one hand and Sunrise on the
other,  but also the relative  fault of the Company and Sunrise,  as well as any
other relevant equitable considerations.  Notwithstanding the provisions hereof,
the aggregate  contribution of all  Indemnified  Persons to all Losses shall not
exceed the amount of fees  actually  received  by  Sunrise  with  respect to the
services rendered  pursuant to the Agreement.  Relative benefits to the Company,
on the one hand, and to Sunrise, on the other hand, shall be deemed to be in the
same  proportion as (i) the total  transaction  value of the  transaction or the
proposed  transaction  bears to (ii) all fees  actually  received  by Sunrise in
connection with the Agreement.

The  Company  agrees to  reimburse  the  Indemnified  Persons  for all  expenses
(including,  without  limitation,  fees and  expenses  of  counsel)  as they are
incurred in connection with investigating,  preparing, defending or settling any
Action for which  indemnification or contribution has or is reasonably likely to
be  sought  by  the  Indemnified  Person,  whether  or not  in  connection  with
litigation in which any  Indemnified  Person is a named party;  provided that if
any such  reimbursement is determined by a final,  non-appealable  judgment by a
court of competent  jurisdiction,  to have resulted  solely from Sunrise'  gross
negligence or willful  misconduct,  such Indemnified Person shall promptly repay
such amount to the Company;  provided further,  the Company shall be entitled to
control the defense of any Action and provide legal  representation on behalf of
Sunrise.  If any of  Sunrise's  professional  personnel  appears as witness,  is
deposed or is otherwise  involved in the defense of any Action against  Sunrise,
the  Company or the  Company's  affiliates,  officers,  managers,  directors  or
employees,  the Company will reimburse Sunrise for all reasonable  out-of-pocket
expenses incurred by Sunrise by reason of any of its personnel being involved in
any such Action.

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The indemnity,  contribution  and expense  reimbursement  obligations  set forth
herein (i) shall be in  addition  to any  liability  the Company may have to any
Indemnified Person at common law or otherwise, (ii) shall survive the expiration
or termination  of the Agreement or completion of Sunrise ' services  hereunder,
(iii) shall apply to any modification of Sunrise ' engagement, (iv) shall remain
operative and in full force and effect regardless of any  investigation  made by
or on behalf of Sunrise or any other Indemnified Person, (v) shall be binding on
any  successor  or  assign of the  Company  and  successors  or  assigns  to the
Company's  business  and  assets  and (vi)  shall  inure to the  benefit  of any
successor or assign of any Indemnified Person.

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