Purchase and Sale Agreement


 EXHIBIT 10.2 
 PURCHASE AND SALE AGREEMENT 
 Pogo Producing Company LLC 
 Pogo Producing (San Juan) Company 
 and 
 Pogo Partners Inc. 
 (collectively, the “Sellers”) 
 and 
 XTO Energy Inc. 
 (the
“Buyer”) 
 December 14, 2007 






 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page
	 ARTICLE 1 DEFINITIONS
	  	1
		
	 ARTICLE 2 SALE, PURCHASE AND EXCHANGE OF PROPERTIES
	  	8
			
	 2.1.
	  	 Sellers’ Properties
	  	8
	 2.2.
	  	 Buyer’s Properties
	  	10
		
	 ARTICLE 3 PURCHASE PRICE
	  	11
			
	 3.1.
	  	 Purchase Price
	  	11
		
	 ARTICLE 4 ADJUSTMENTS TO PURCHASE PRICE AND BUYER’S PURCHASE PRICE
	  	11
			
	 4.1.
	  	 Increases in Purchase Price
	  	11
	 4.2.
	  	 Decreases in Purchase Price
	  	12
	 4.3.
	  	 Increases in Buyer’s Purchase Price
	  	12
	 4.4.
	  	 Decreases in Buyer’s Purchase Price
	  	13
		
	 ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF SELLERS
	  	14
			
	 5.1.
	  	 Organization
	  	14
	 5.2.
	  	 Authority
	  	14
	 5.3.
	  	 No Conflict
	  	14
	 5.4.
	  	 Enforceability
	  	14
	 5.5.
	  	 Contracts
	  	14
	 5.6.
	  	 Litigation and Claims
	  	15
	 5.7.
	  	 Finder’s Fees
	  	15
	 5.8.
	  	 Sale Contracts
	  	15
	 5.9.
	  	 Notices
	  	15
	 5.10.
	  	 Imbalances
	  	15
	 5.11.
	  	 Property Obligations
	  	15
	 5.12.
	  	 Property Operation
	  	15
	 5.13.
	  	 Take-or-Pay
	  	15
	 5.14.
	  	 Taxes
	  	16
	 5.15.
	  	 Timely Receipt
	  	16
	 5.16.
	  	 Timely Payment
	  	16
	 5.17.
	  	 Outstanding Obligations
	  	16
	 5.18.
	  	 Material Differences
	  	16
	 5.19.
	  	 Basis of Sellers Decision; Property Review
	  	16
	 5.20.
	  	 Sellers Experience and Counsel
	  	16
	 5.21.
	  	 Closing Funds
	  	17
	 5.22.
	  	 No Further Distribution
	  	17
	 5.23.
	  	 Sellers Ability to Take Title
	  	17
	 5.24.
	  	 Sellers Ability to Operate
	  	17








 TABLE OF CONTENTS 
 (Continued) 


					
	 	  	 	  	Page
	 ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF BUYER
	  	17
			
	 6.1.
	  	 Organization
	  	17
	 6.2.
	  	 Authority
	  	17
	 6.3.
	  	 No Conflicts
	  	17
	 6.4.
	  	 Enforceability
	  	18
	 6.5.
	  	 Basis of Buyer’s Decision; Property Review
	  	18
	 6.6.
	  	 Buyer’s Experience and Counsel
	  	18
	 6.7.
	  	 Closing Funds
	  	18
	 6.8.
	  	 No Further Distribution
	  	18
	 6.9.
	  	 Buyer’s Ability to Take Title
	  	18
	 6.10.
	  	 Buyer’s Ability to Operate
	  	18
	 6.11.
	  	 Finder’s Fees
	  	19
	 6.12.
	  	 Contracts
	  	19
	 6.13.
	  	 Litigation and Claims
	  	19
	 6.14.
	  	 Intentionally Deleted
	  	19
	 6.15.
	  	 Sale Contracts
	  	19
	 6.16.
	  	 Notices
	  	19
	 6.17.
	  	 Imbalances
	  	19
	 6.18.
	  	 Property Obligations
	  	19
	 6.19.
	  	 Property Operation
	  	20
	 6.20.
	  	 Take-or-Pay
	  	20
	 6.21.
	  	 Taxes
	  	20
	 6.22.
	  	 Timely Receipt
	  	20
	 6.23.
	  	 Timely Payment
	  	20
	 6.24.
	  	 Outstanding Obligations
	  	20
	 6.25.
	  	 Material Differences
	  	20
		
	 ARTICLE 7 COVENANTS OF SELLER
	  	20
			
	 7.1.
	  	 Conduct of Business Pending Closing
	  	20
	 7.2.
	  	 Access
	  	21
	 7.3.
	  	 Satisfaction of Conditions
	  	22
		
	 ARTICLE 8 COVENANTS OF BUYER
	  	22
			
	 8.1.
	  	 Satisfaction of Conditions
	  	22
	 8.2.
	  	 Conduct of Business Pending Closing
	  	22
	 8.3.
	  	 Access
	  	23
		
	 ARTICLE 9 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER
	  	23
			
	 9.1.
	  	 Representations and Warranties
	  	23
	 9.2.
	  	 Covenants
	  	23
	 9.3.
	  	 No Litigation
	  	23
	 9.4.
	  	 Consents
	  	23

  

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 TABLE OF CONTENTS 
 (Continued) 


					
	 	  	 	  	Page
	 9.5.
	  	Release of Liens	  	23
		
	 ARTICLE 10 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER
	  	24
			
	 10.1.
	  	 Representations and Warranties
	  	24
	 10.2.
	  	 Covenants
	  	24
	 10.3.
	  	 No Litigation
	  	24
	 10.4.
	  	 Consents
	  	24
	 10.5.
	  	Release of Liens	  	24
		
	 ARTICLE 11 TITLE MATTERS
	  	24
			
	 11.1.
	  	 Title Defect Notice by Buyer
	  	24
	 11.2.
	  	 Determination of Title Defects and Defect Values for the Properties
	  	24
	 11.3.
	  	 Calculation of Defect Value
	  	25
	 11.4.
	  	 Exclusion of Properties Subject to Title Defects
	  	26
	 11.5.
	  	 Purchase Price Adjustment for Title Benefits
	  	26
	 11.6.
	  	 Title Defect Notice by Sellers
	  	26
	 11.7.
	  	 Determination of Title Defects and Defect Values for the Buyer’s Properties
	  	26
	 11.8.
	  	 Calculation of Defect Value
	  	27
	 11.9.
	  	 Exclusion of Properties Subject to Title Defects
	  	28
	 11.10.
	  	 Buyer’s Purchase Price Adjustment for Buyer’s Title Benefits
	  	28
		
	 ARTICLE 12 ENVIRONMENTAL MATTERS
	  	28
			
	 12.1.
	  	 Presence of Wastes, NORM, Hazardous Substances and Asbestos
	  	28
	 12.2.
	  	 Environmental Assessment
	  	29
	 12.3.
	  	 Notice of Adverse Environment Conditions
	  	29
	 12.4.
	  	 Determination of Adverse Environmental Conditions and Remediation Values
	  	30
	 12.5.
	  	 Exclusion of Properties Subject to Adverse Environmental Conditions
	  	32
		
	 ARTICLE 13 SUSPENSE FUNDS HELD BY SELLERS AND BUYER
	  	32
			
	 13.1.
	  	 Suspense Funds Held By Sellers
	  	32
	 13.2.
	  	 Suspense Funds Held By Buyer
	  	33
		
	 ARTICLE 14 CLOSING
	  	34
			
	 14.1.
	  	 The Closing
	  	34
	 14.2.
	  	 Closing Statement
	  	34
	 14.3.
	  	 Closing Deliveries
	  	34
		
	 ARTICLE 15 POST-CLOSING ADJUSTMENTS
	  	35
			
	 15.1.
	  	 Final Settlement Statement
	  	35
	 15.2.
	  	 Arbitration
	  	35
	 15.3.
	  	 Payment of Final Net Purchase Price
	  	36

  

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 TABLE OF CONTENTS 
 (Continued) 


					
	 	  	 	  	Page
	 ARTICLE 16 ALLOCATION OF RISK
	  	36
			
	 16.1.
	  	 Sellers’ Indemnity
	  	36
	 16.2.
	  	 Survival of Sellers’ Representations and Warranties
	  	36
	 16.3.
	  	 Buyer’s Indemnity
	  	37
	 16.4.
	  	 Survival of Buyer’s Representations and Warranties
	  	37
	 16.5.
	  	 Scope of Indemnity
	  	37
	 16.6.
	  	 Assumption by Buyer
	  	38
	 16.7.
	  	 Assumption by Sellers
	  	38
	 16.8.
	  	 Limitations of Sellers’ Warranties
	  	38
	 16.9.
	  	 Limitations of Buyer’s Warranties
	  	40
	 16.10.
	  	 Gas Balancing
	  	41
		
	 ARTICLE 17 RISK OF LOSS
	  	42
			
	 17.1.
	  	 Casualty Loss
	  	42
	 17.2.
	  	 Sellers’ and Buyer’s Risk of Loss
	  	42
		
	 ARTICLE 18 TERMINATION AND REMEDIES
	  	43
			
	 18.1.
	  	 Termination
	  	43
	 18.2.
	  	 Effect of Termination
	  	43
	 18.3.
	  	 Remedies
	  	44
		
	 ARTICLE 19 ADDITIONAL COVENANTS
	  	44
			
	 19.1.
	  	 Further Assurances
	  	44
	 19.2.
	  	 Access to Records
	  	44
	 19.3.
	  	 Use of Sellers’ Name
	  	45
	 19.4.
	  	 Use of Buyer’s Name
	  	45
	 19.5.
	  	 Employees
	  	45
		
	 ARTICLE 20 ARBITRATION
	  	46
			
	 20.1.
	  	 Determination
	  	46
	 20.2.
	  	 Decision Binding
	  	46
		
	 ARTICLE 21 MISCELLANEOUS
	  	46
			
	 21.1.
	  	 Notice
	  	46
	 21.2.
	  	 Governing Law
	  	47
	 21.3.
	  	 Assignment
	  	48
	 21.4.
	  	 Entire Agreement
	  	48
	 21.5.
	  	 Amendment; Waiver
	  	48
	 21.6.
	  	 Severability
	  	48
	 21.7.
	  	 Construction
	  	48
	 21.8.
	  	 Confidentiality
	  	49

  

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 TABLE OF CONTENTS 
 (Continued) 
  


					
	 	  	 	  	Page
	 21.9.
	  	 Headings
	  	49
	 21.10.
	  	 Counterparts
	  	49
	 21.11.
	  	 Expenses, Fees and Taxes
	  	49
	 21.12.
	  	 Laws and Regulations
	  	49
	 21.13.
	  	 Tax-Deferred Exchange Option
	  	50
	 21.14.
	  	 Pre-Closing Like-Kind Exchange Option
	  	50
	 21.15.
	  	 Public Announcements
	  	50

 Exhibits and Schedules: 
  

			
	 Exhibit A
	  	 Leases

	 Exhibit A-1
	  	 Buyer’s Leases

	 Exhibit B
	  	 Wells

	 Exhibit B-1
	  	 Buyer’s Wells

	 Exhibit C
	  	 Form of Assignment from Sellers

	 Exhibit C-1
	  	 Form of Assignment from Buyer


  

			
	 Schedule 5.3
	  	 Consents; Preferential Purchase Rights

	 Schedule 5.5
	  	 Material Contracts

	 Schedule 5.6
	  	 Litigation

	 Schedule 5.9
	  	 Notices

	 Schedule 5.10
	  	 Gas Imbalances

	 Schedule 5.12
	  	 Property Operation

	 Schedule 5.17
	  	 Obligations

	 Schedule 6.3
	  	 Buyer’s Consents; Buyer’s Preferential Purchase Rights

	 Schedule 6.12
	  	 Buyer’s Material Contracts

	 Schedule 6.12
	  	 Buyer’s Litigation

	 Schedule 6.17
	  	 Buyer’s Gas Imbalances

	 Schedule 6.19
	  	 Buyer Property Operation

	 Schedule 6.25
	  	 Buyer’s Obligations


  

 v 







 PURCHASE AND SALE AGREEMENT 
 This Purchase and Sale Agreement (“Agreement”) is made and entered into on December 14, 2007, by and among POGO Producing
Company LLC, a Delaware limited liability company (“POGO”), Pogo Producing (San Juan) Company, a Texas corporation (“PPSJ”), and Pogo Partners Inc., a Texas corporation
(“PPI”) (collectively, “Sellers”) and XTO Energy Inc., a Delaware corporation (“XTO”) (“Buyer,” and together with Sellers,
the “Parties”). 
 ARTICLE 1 
 DEFINITIONS 
 “Adverse Environmental Condition” means any contamination or
condition exceeding regulatory limits and not otherwise authorized by permit or law, resulting from any discharge, release, production, storage, treatment, seepage, escape, leakage, emission, emptying, leaching or any other activities on, in or from
any Property, or the migration or transportation from other lands to any Property, of any wastes, pollutants, contaminants, hazardous materials or other materials or substances subject to regulation relating to the protection of the environment that
require remediation based upon the condition at the Effective Time pursuant to any current federal, state or local laws or statutes, including the Environmental Laws. 
 “Adverse Environmental Condition Notice” is defined in Section 12.3. 
 “Adverse Environmental Condition Removal” is defined in Section 12.5. 
 “Agreement” is defined in the preamble. 
 “Allocated Value” with respect to any
Property means the value allocated to Sellers’ interest in such Property as set forth on Exhibit B and Buyer’s interest in Buyer’s Properties as set forth on Exhibit B-1. 
 “Assignment” is defined in Section 14.3.1. 
 “Business Day” means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banks in Houston, Texas,
are generally authorized or obligated, by law or executive order, to close. 
 “Buyer” is defined in the preamble.

 “Buyer’s Assignment” is defined in Section 14.3. 
 “Buyer’s Contracts” is defined in Section 2.2.3. 
 “Buyer’s Data” is defined in Section 8.3. 
 “Buyer’s Easements” is defined in Section 2.2.4. 
 “Buyer Group” means Buyer, its affiliates and their respective employees, officers, directors, agents and representatives.







 “Buyer’s Facilities” is defined in Section 2.2.2. 
 “Buyer’s Knowledge means the actual knowledge of any of Vaughn Vennerberg, Tim Petrus, Mark Pospisil and James Death. 

“Buyer’s Lands” is defined in Section 2.2.1. 
 “Buyer’s Leases” is defined in Section 2.2.1. 
 “Buyer’s Permits” is defined in Section 2.2.6. 
 “Buyer’s Properties” is defined in Section 2.2. 
 “Buyer Property” is defined in Section 2.2. 
 “Buyer’s Purchase Price” is defined in Section 3.1. 
 “Buyer’s Records” is defined in Section 2.2.7. 
 “Buyer’s Wells” is defined in Section 2.2.2. 
 “Buyer’s Suspense Account” is defined in Article 13. 
 “ Buyer’s Retained Liabilities” is defined in Section 16.3. 
 “Casualty Loss” is defined in Section 17.1. 
 “Claim” means any loss, cost or expense (including reasonable attorneys’ fees, experts’ fees and court costs), damage,
obligation, claim, liability or cause of action caused by, relating to or arising out of any lawsuit, regulatory or administrative action whose basis is the violation of any law or regulation. 
 “Closing” is defined in Section 14.1. 
 “Closing Date” is defined in Section 14.1. 
 “Confidentiality
Agreement” is defined in Section 21.4. 
 “Contract” is defined in
Section 2.1.3. 
 “Data” is defined in Section 7.2. 
 “Defect Notification Deadline” means 5:00 p.m., Houston, Texas time, on January 30, 2008. 
 “Defect Value” means, with respect to each Property that is agreed or determined to be subject to a Title Defect, the lesser of
(a) the Allocated Value of the Property subject to such Title Defect and (b) the amount determined in accordance with Section 11.2.2 with respect to such Title Defect. 
  

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 “Easement” is defined in Section 2.1.4. 
 “Effective Time” is defined in Section 2.1. 
 “Environment Defects Notice” is defined in Section 12.3. 
 “Environmental Laws” means all applicable laws and regulations concerning or relating to the pollution or protection of the
environment, including the Clean Air Act, the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”), the Federal Water Pollution Control Act, the Safe Drinking Water Act, the Toxic Substance
Control Act, the Hazardous and Solid Waste Amendments Act of 1984, the Superfund Amendments and Reauthorization Act of 1986, the Hazardous Materials Transportation Act, the Clean Water Act, the National Environmental Policy Act, the Endangered
Species Act, the Fish and Wildlife Coordination Act, the National Historic Preservation Act and the Oil Pollution Act of 1990, as such laws may be amended from time to time and all regulations, orders, rulings, directives, requirements and
ordinances promulgated thereunder. 
 “Exchange Agreement” is defined in Exhibit D. 
 “Facilities” is defined in Section 2.1.2. 
 “Final Settlement Statement” is defined in Section 15.1. 
 “GAAP” means United States generally accepted accounting principles. 
 “Good and Defensible Title” means such title to the Properties that (a) entitles Sellers to receive not less than the Net
Revenue Interests set forth in Exhibit B in all Hydrocarbons produced from the Wells, units or Leases described in Exhibit B and (b) obligates Sellers to bear not more than the Working Interest set forth in Exhibit B in the
Wells, units or Leases described in Exhibit B (unless there is a corresponding increase in the Net Revenue Interest) and (ii) is free and clear of all liens and encumbrances, except for Permitted Encumbrances, and such title to the
Buyer’s Properties that (a) entitles Buyer to receive not less than the number of net mineral acres set forth in Exhibit B-1 for Buyer’s Properties and Buyer’ Leases described in Exhibit B-1 and (b) obligates
Buyer to bear not more than the royalty burdens and other burdens set forth in Exhibit B-1 for Buyer’s Properties and Buyer’s Leases described in Exhibit B-1 and (ii) is free and clear of all liens and encumbrances,
except for Permitted Encumbrances. 
 “Hydrocarbons” means oil, gas, natural gas liquids, condensate and related
hydrocarbons. 
 “Leases” is defined in Section 2.1. 
 “Liquidated Title Defect Payment” is defined in Section 11.3.2. 
 “Lands” is defined in Section 2.1.1. 
 “Loss” means all damages, losses, liabilities, obligations, payments, amounts paid in settlement, fines, penalties, costs (including reasonable fees and expenses of attorneys, 

  

 Page 3 







 
accountants and other professional advisors, as well as of expert witnesses, and other costs of investigation, preparation and litigation in connection with
any pleading, claim, demand or other action) of any kind or nature whatsoever, whether known or unknown, contingent or vested, or matured or unmatured. 
 “Material Adverse Effect” means a material adverse effect on the ownership, use or value of the Properties, taken as a whole. 
 “Material Contract” is defined in Section 5.5. 
 “Minimal Defect” means any individual Title Defect with a Defect Value of less than the greater of (a) 2% of the Allocated
Value of the Property affected thereby or (b) $15,000, or any individual Adverse Environmental Condition with a Remediation Value of less than the greater of (x) 2% of the Allocated Value of the Property affected thereby and or
(y) $15,000. 
 “Net Purchase Price” is defined in Section 3.1. 
 “Net Revenue Interest” means Sellers’ interest in and to all production of Hydrocarbons saved, produced and sold from any
Well, unit or Lease described in Exhibit B after giving effect to all valid lessor’s royalties, overriding royalties, production payments, carried interests, liens and other encumbrances or charges against production therefrom.

 “NORM” means naturally occurring radioactive material. 
 “Party” is defined in the preamble. 
 “Permit” is defined in Section 2.1.6. 
 “Permitted
Encumbrances” means: 
 With respect to the Properties: 
 (a) Lessors’ royalties, overriding royalties, reversionary interests and similar burdens if the cumulative effect of the burdens does not operate to
reduce Sellers’ Net Revenue Interest in a Well, unit or Lease described in Exhibit B below the Net Revenue Interest for such Well, unit or Lease set forth in Exhibit B or operate to increase Sellers’ Working Interest in a
Well, unit or Lease described in Exhibit B to more than the Working Interest for such Well, unit or Lease set forth in Exhibit B; 
 (b) Division orders and sales contracts terminable without penalty upon no more than 30 days notice to the purchaser; 
 (c)
Required third-party consents to assignment and similar agreements with respect to which waivers or consents (i) are obtained from the appropriate parties or (ii) are routinely obtained after Closing for transactions of this nature;

 (d) Materialman’s, mechanic’s, repairman’s, employee’s, contractor’s, operator’s, tax and other similar
liens or charges arising in the ordinary course of business for obligations (i)

  

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that are not delinquent or that will be paid and discharged in the ordinary course of business or (ii) if delinquent, that are being contested in good
faith by appropriate action of which Buyer is notified in writing before Closing and for which Sellers indemnify Buyer subsequent to Closing; 
 (e) All rights to consent by, required notices to, filings with, or other actions by governmental entities in connection with the sale or conveyance of oil and gas leases or interests therein if they are routinely obtained subsequent to the
sale or conveyance; 
 (f) Easements, rights-of-way, servitudes, permits, surface leases and other rights in respect of surface operations
that do not materially interfere with oil and gas operations to be conducted on any Well or Lease; 
 (g) All (i) operating agreements,
unit agreements, unit operating agreements, pooling agreements and pooling designations affecting the Properties that are contained in Sellers’ files or (ii) compulsory or commissioner’s pooling or units; provided that the effect of
any such documents will not reduce Sellers’ interest with respect to oil and gas produced from any Well, unit or Lease below the Net Revenue Interest set forth in Exhibit B, or increase such Sellers’ Working Interest in such Well,
unit or Lease to more than the Working Interest set forth in Exhibit B for such Well, unit or Lease (unless there is a corresponding increase in the Net Revenue Interest); 
 (h) Conventional rights of reassignment prior to release or surrender requiring notice to the holders of the rights; 
 (i) All rights reserved to or vested in any 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 to the extent such rights do not adversely affect the net revenue interest or working interest set forth in Exhibit B; 
 (j) The terms and conditions of the Leases, and of all agreements that are contained in Sellers’ files or that are recorded in the public records of
the appropriate jurisdiction and which do not reduce Sellers’ interest with respect to oil and gas produced from any Well, unit or Lease below the Net Revenue Interest set forth in Exhibit B for such Well, unit or Lease, or increase
Sellers’ Working Interest in such Well, unit or Lease to more than the Working Interest set forth in Exhibit B for such Well, unit or Lease (unless there is a corresponding increase in the Net Revenue Interest); 
 (k) All other liens, charges, encumbrances, contracts, agreements, instruments, obligations, defects and irregularities affecting the Properties which
individually or in the aggregate are not such as to interfere materially with the operation, value or use of any of the Properties, could not reasonably be expected to prevent or delay Buyer from receiving the proceeds of production from any of
Well, unit or Lease and which do not reduce Sellers’ interest with respect to Hydrocarbons produced from any Well, unit or Lease below the Net Revenue Interest set forth in Exhibit B for such Well, unit or Lease, or increase
Sellers’ Working Interest in such Well, unit or Lease to more than the Working Interest set forth in Exhibit B for such Well, unit or Lease (unless there is a corresponding increase in the Net Revenue Interest); 
 (l) Any Title Defects that constitute Minimal Defects; and 
  

 Page 5 







 (m) Any Title Defects Buyer has expressly waived in writing or which are deemed to have become Permitted
Encumbrances under Section 11.1. 
 With respect to Buyer’s Properties: 
 (a) Lessors’ royalties, overriding royalties, reversionary interests and similar burdens if the cumulative effect of the burdens does not operate to
increase the royalty burdens and other burdens for a Buyer’s Property or Buyer’s Lease described in Exhibit B-1 below that for such Buyer’s Property or Buyer’s Lease set forth in Exhibit B-1; 
 (b) Division orders and sales contracts terminable without penalty upon no more than 30 days notice to the purchaser; 
 (c) Required third-party consents to assignment and similar agreements with respect to which waivers or consents (i) are obtained from the
appropriate parties or (ii) are routinely obtained after Closing for transactions of this nature; 
 (d) Materialman’s,
mechanic’s, repairman’s, employee’s, contractor’s, operator’s, tax and other similar liens or charges arising in the ordinary course of business for obligations (i) that are not delinquent or that will be paid and
discharged in the ordinary course of business or (ii) if delinquent, that are being contested in good faith by appropriate action of which Buyer is notified in writing before Closing and for which Buyer indemnifies Buyer subsequent to Closing;

 (e) All rights to consent by, required notices to, filings with, or other actions by governmental entities in connection with the sale or
conveyance of oil and gas leases or interests therein if they are routinely obtained subsequent to the sale or conveyance; 
 (f) Easements,
rights-of-way, servitudes, permits, surface leases and other rights in respect of surface operations that do not materially interfere with oil and gas operations to be conducted on any Buyer’s Well or Buyer’s Lease; 
 (g) All (i) operating agreements, unit agreements, unit operating agreements, pooling agreements and pooling designations affecting Buyer’s
Properties that are contained in Buyer’s files or (ii) compulsory or commissioner’s pooling or units; provided that the effect of any such documents will not reduce Sellers’ interest with respect to oil and gas produced from any
Buyer’s Well, Buyer’s unit or Buyer’s Lease below the Net Revenue Interest set forth in Exhibit B, or increase the royalty burdens and other burdens in such Buyer’s Property or Buyer’s Lease to more than the royalty
burdens and other burdens set forth in Exhibit B-1 for such Buyer’s Property or Buyer’s Lease; 
 (h) Conventional rights of
reassignment prior to release or surrender requiring notice to the holders of the rights; 
 (i) All rights reserved to or vested in any
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 to the extent such rights do not adversely affect the net mineral acres
or royalty burdens or other burdens set forth in Exhibit B-1; 
  

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 (j) The terms and conditions of the Leases, and of all agreements that are contained in Buyer’s
files or that are recorded in the public records of the appropriate jurisdiction and which do not increase the royalty burdens or other burdens in Buyer’s interest with respect to oil and gas produced from any Buyer’s Property or
Buyer’s Lease above the royalty burdens and other burdens set forth in Exhibit B-1 for such Buyer’s Property or Buyer’s Lease; 
 (k) All other liens, charges, encumbrances, contracts, agreements, instruments, obligations, defects and irregularities affecting Buyer’s Properties which individually or in the aggregate are not such as to
interfere materially with the operation, value or use of any of Buyer’s Properties, could not reasonably be expected to prevent or delay Sellers from receiving the proceeds of production from any of Well, unit or Lease and do not increase the
royalty burdens or other burdens in Buyer’s interest with respect to oil and gas produced from any Buyer’s Property or Buyer’s Lease above the royalty burdens and other burdens set forth in Exhibit B-1 for such Buyer’s
Property or Buyer’s Lease; 
 (l) Any Title Defects that constitute Minimal Defects; and 
 (m) Any Title Defects Sellers have expressly waived in writing or which are deemed to have become Permitted Encumbrances under Section 11.6.

 “POGO” is defined in the preamble. 
 “Pogo Partners Inc.” is defined in the preamble. 
 “Pogo Producing (San
Juan) Company” is defined in the preamble. 
 “Preliminary Net Purchase Price” is defined in
Section 14.2. 
 “Property” is defined in the last sentence of Section 2.1. 
 “Purchase Price” is defined in Section 3.1. 
 “Record” is defined in Section 2.1.7. 
 “Remediation Value” is defined in Section 12.3. 
 “Sellers” is defined in the preamble. 
 “Seller Group” means Sellers, their
affiliates and the respective employees, officers, directors, agents and representatives of Sellers and their affiliates. 
 “Sellers’ Knowledge” means the actual knowledge of any of Doss Bourgeois, Marc Hensel, Mark Kidder, Rowdy Lemoine, Wright Williamson and Jim Rumsey. 
 “Sellers’ Retained Liabilities” is defined in the last sentence of Section 16.1. 
 “Tax Deferred Exchange” is defined in Section 21.13. 
 “Title Benefit” is defined in Section 11.5. 
  

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 “Title Defect” is defined in Section 11.1. 
 “Title Defect Notice” is defined in Section 11.1. 
 “Title Defect Removal” is defined in Section 11.4. 
 “Uncured Title Defect” means any Title Defect, other than a Minimal Defect, neither removed pursuant to a Title Defect Removal,
nor cured, not later than two Business Days prior to Closing. 
 “Uncured Title Defects Value” means the Aggregate
Defect Value for all Uncured Title Defects minus the aggregate value of all Title Benefits. 
 “Unremedied Adverse
Environmental Condition” means any Adverse Environmental Condition, other than a Minimal Defect, that has not been removed pursuant to an Adverse Environmental Condition Removal, and for which Seller has not elected to remediate under
Section 12.4.3. 
 “Unremedied Adverse Environmental Conditions Value” means the aggregate Remediation
Value of all Unremedied Adverse Environmental Conditions. 
 “Wells” is defined in Section 2.1.2.

 “Working Interest” means, with respect to the Wells, units or Leases set forth in Exhibit B, Sellers’
interest in and to the full and entire leasehold estate created under and by virtue of the Leases and all rights and obligations of every kind and character appurtenant thereto or arising therefrom, without regard to any valid lessor’s royalty,
overriding royalties, production payments, carried interests, liens, or other encumbrances or charges against production therefrom insofar as such interest in said leasehold estate is burdened with the obligation to bear and pay costs of operations.
It also means with respect to Buyer’ Wells, Buyer’s units or Buyer’s Leases set forth in Exhibit B-1, Buyer’s interest in and to the full and entire leasehold estate created under and by virtue of Buyer’s Leases and
all rights and obligations of every kind and character appurtenant thereto or arising therefrom, without regard to any valid lessor’s royalty, overriding royalties, production payments, carried interests, liens, or other encumbrances or charges
against production therefrom insofar as such interest in said leasehold estate is burdened with the obligation to bear and pay costs of operations. 
 ARTICLE 2 
 SALE, PURCHASE AND EXCHANGE OF PROPERTIES 
 2.1. Sellers’ Properties. Subject to the terms and conditions herein set forth, Sellers agree to sell, assign, convey and deliver to Buyer,
and Buyer agrees to purchase and acquire from Sellers at the Closing, but effective as of 7:00 A.M. on January 1, 2008 (the “Effective Time”), all of Sellers’ right, title and interest in and to the following:

 2.1.1. The oil, gas and mineral leases, and the leasehold estates created thereby, described in Exhibit A
(collectively, the “Leases”), and all of the lands covered by the Leases (“Lands”), together with corresponding interests in and to all the property and 

  

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rights incident thereto, including all rights in any pooled or unitized acreage by virtue of the Lands being a part thereof, all production from the pool or
unit allocated to any such Lands; and all interests in any wells within the pool or unit associated with the Lands, and whether or not such interests are incorrectly described or omitted from Exhibit A; 
 2.1.2. All producing, non-producing, shut-in and abandoned oil and gas wells, salt water disposal wells, injection wells, and water wells
located on the Leases or lands pooled or unitized therewith, including the wells described in Exhibit B and the proration units associated therewith (“Wells”), the Leases, or portions thereof, associated with proved
undeveloped reserves separately identified as individual Properties in Exhibit B and all pipelines, personal property, equipment, fixtures, and improvements located on and appurtenant to the Leases and Lands or elsewhere insofar as they are used or
obtained in connection with the operation of the Leases or relate to the production, treatment, sale, or disposal of Hydrocarbons or water produced from the Leases or Lands or attributable thereto (the “Facilities”);

 2.1.3. All farmout and farmin agreements, operating agreements, production sales and purchase contracts, saltwater disposal
agreements, surface leases, division and transfer orders, and (to the extent transferable by Sellers without material restrictions under third party agreements) all other contracts, contractual rights, interests and other agreements covering or
affecting any or all of the Leases, Lands, Wells and Facilities (the “Contracts”); 
 2.1.4. All
easements, rights-of-way, licenses, authorizations, permits, and similar rights and interests applicable to, or used or useful in connection with, any or all of the Leases, Lands, Wells and Facilities (the “Easements”);

 2.1.5. All Hydrocarbons (or the proceeds from the sale of Hydrocarbons) produced after the Effective Time attributable to
Sellers’ interest in the Leases, Lands, Wells, Facilities and Contracts; 
 2.1.6. All environmental and other
governmental (whether federal, state or local) permits, licenses, orders, authorizations, franchises and related instruments or rights relating to the ownership, operation or use of the Leases, Lands, Wells and Facilities (the
“Permits”); and 
 2.1.7. To the extent transferable without material restriction or payment of a
transfer or licensing fee under third party agreements, all books, files, records, correspondence, studies, surveys, reports, geologic, proprietary geophysical and seismic data (including raw data and any interpretative data or information relating
to such geologic, geophysical and seismic data) and other data in the actual possession or control of Sellers and relating to the operation of the Leases, Lands, Wells and Facilities, including all title records, customer lists, supplier lists,
sales materials, promotional materials, operational records, technical records, production and processing records, division order and lease right-of-way files, accounting files and contract files (the “Records”). 

 

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 All of the real and personal properties, rights, titles, and interests described in Sections 2.1.1 through 2.1.7,
subject to the limitations and terms expressly set forth herein and in Exhibits A and B, are hereinafter collectively called the “Properties” or, individually, a “Property.” 
 2.2. Buyer’s Properties. Subject to the terms and conditions herein set forth, Buyer agrees to sell, assign, convey and deliver to and
exchange with Sellers, and Sellers agree to purchase and acquire from Buyer at the Closing, but effective as of the Effective Time, all of Buyer’s right, title and interest in and to the following: 
 2.2.1. The oil, gas and mineral leases, and the leasehold estates created thereby, described in Exhibit A-1 (collectively, the
“Buyer’s Leases”), and all of the lands covered by the Leases (“Buyer’s Lands”), together with corresponding interests in and to all the property and rights incident thereto, including all
rights in any pooled or unitized acreage by virtue of the Buyer’s Lands being a part thereof, all production from the pool or unit allocated to any such Buyer’s Lands; and all interests in any wells within the pool or unit associated with
Buyer’s Lands, and whether or not such interests are incorrectly described or omitted from Exhibit A-1; 
 2.2.2.
All producing, non-producing, shut-in and abandoned oil and gas wells, salt water disposal wells, injection wells, and water wells located on Buyer’s Leases or lands pooled or unitized therewith, including the wells described in Exhibit B-1 and
the proration units associated therewith (“Buyer’s Wells”), Buyer’s Leases, or portions thereof, associated with proved undeveloped reserves separately identified as individual Buyer’s Properties in Exhibit B-1
and all pipelines, personal property, equipment, fixtures, and improvements located on and appurtenant to Buyer’s Leases and Buyer’s Lands or elsewhere insofar as they are used or obtained in connection with the operation of Buyer’s
Leases or relate to the production, treatment, sale, or disposal of Hydrocarbons or water produced from Buyer’s Leases or Buyer’s Lands or attributable thereto (“Buyer’s Facilities”); 
 2.2.3. All farmout and farming agreements, operating agreements, production sales and purchase contracts, saltwater disposal agreements,
surface leases, division and transfer orders, and (to the extent transferable by Buyer without material restrictions under third party agreements) all other contracts, contractual rights, interests and other agreements covering or affecting any or
all of Buyer’s Leases, Buyer’s Lands, Buyer’s Wells and Buyer’s Facilities (“Buyer’s Contracts”); 
 2.2.4. All easements, rights-of-way, licenses, authorizations, permits, and similar rights and interests applicable to, or used or useful in connection with, any or all of Buyer’s Leases, Buyer’s Lands,
Buyer’s Wells and Buyer’s Facilities (“Buyer’s Easements”); 
 2.2.5. All Hydrocarbons
(or the proceeds from the sale of Hydrocarbons) produced after the Effective Time attributable to Buyer’s interest in Buyer’s Leases, Buyer’s Lands, Wells, Buyer’s Facilities and Buyer’s Contracts; 
  

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 2.2.6. All environmental and other governmental (whether federal, state or local)
permits, licenses, orders, authorizations, franchises and related instruments or rights relating to the ownership, operation or use of Buyer’s Leases, Buyer’s Lands, Buyer’s Wells and Buyer’s Facilities (“Buyer’s
Permits”); and 
 2.2.7. To the extent transferable without material restriction or payment of a transfer or
licensing fee under third party agreements, all books, files, records, correspondence, studies, surveys, reports, geologic, proprietary geophysical and seismic data (including raw data and any interpretative data or information relating to such
geologic, geophysical and seismic data) and other data in the actual possession or control of Buyer and relating to the operation of the Buyer’s Leases, Buyer’s Lands, Buyer’s Wells and Buyer’s Facilities, including all title
records, customer lists, supplier lists, sales materials, promotional materials, operational records, technical records, production and processing records, division order and lease right-of-way files, accounting files and contract files
(“Buyer’s Records”). 
 All of the real and personal properties, rights, titles, and interests described in Sections 2.2.1
through 2.2.7, subject to the limitations and terms expressly set forth herein and in Exhibits A-1 and B-1, are hereinafter collectively called the “Buyer’s Properties” or, individually, a
“Buyer’s Property.” 
 ARTICLE 3 
 PURCHASE PRICE 
 3.1. Purchase Price. The total purchase price for all of
Sellers’ interest in the Properties shall be Two Hundred Million Dollars ($200,000,000) (the “Purchase Price”), subject to any applicable adjustments as hereinafter provided. The total purchase price for all of
Buyer’s interest in Buyer’s Properties shall be Twenty Million Dollars ($20,000,000) (“Buyer’s Purchase Price”). The Purchase Price less Buyer’s Purchase Price shall be deemed to be the “Net
Purchase Price”). 
 ARTICLE 4 
 ADJUSTMENTS TO PURCHASE PRICE AND BUYER’S PURCHASE PRICE 
 The Purchase Price shall be adjusted
as follows: 
 4.1. Increases in Purchase Price. The Purchase Price shall be increased by an amount equal to the sum of the following
amounts: 
 4.1.1. The amount of costs and expenses actually paid or to be paid by Sellers and their affiliates related to
owning, operating, producing and maintaining the Properties from the Effective Time to the Closing Date, including capital expenditures, plus a fixed overhead charge of One Hundred Twenty Five Thousand Dollars ($125,000) per month, which shall be in
lieu of any per-well COPAS administrative charges on wells operated by any Seller or any affiliate of Sellers; 
  

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 4.1.2. The amount of all prepaid expenses, including ad valorem, property and similar
taxes and assessments based upon or measured by ownership, relating to the Properties, paid by Sellers and attributable to periods of time after the Effective Time; 
 4.1.3. The amount of all upward adjustments to the Purchase Price provided for in this Agreement; and 
 4.1.4. The value of (a) all oil and other Hydrocarbons in pipelines or in tanks above the pipeline sales connection, in each case at
the Effective Time that is credited to the Properties and not sold by Sellers prior to Closing, (b) all unsold inventory of gas plant products attributable to the Properties at the Effective Time and not sold by Sellers prior to Closing, each
such value to be the market or, if applicable, the contract price in effect as of the Effective Time, less any applicable severance taxes and royalties and (c) all gas imbalance volumes owed to a Seller by a third party as of the Effective Time
as reflected on Schedule 5.10, multiplied by $7.00 per mmbtu. 
 4.2. Decreases in Purchase Price. The Purchase Price
shall be decreased by an amount equal to the sum of the following amounts: 
 4.2.1. The amount of all proceeds paid or to be
paid to Sellers, including proceeds from the sale of production, net of all applicable taxes and royalties actually paid or to be paid by Sellers, attributable to the Properties for periods of time after the Effective Time; 
 4.2.2. An amount equal to all ad valorem, property, and similar taxes and assessments based upon or measured by ownership, relating to the
Properties that are unpaid as of the Closing Date and attributable to periods of time prior to the Effective Time; 
 4.2.3.
The amount, if any, relating to Title Defect Removals under Section 11.4; 
 4.2.4. The amount, if any, by which
the Uncured Title Defects Value exceeds two percent (2%) of the Purchase Price; 
 4.2.5. The amount, if any, by which
the Unremedied Adverse Environmental Conditions Value exceeds two percent (2%) of the Purchase Price; 
 4.2.6. All gas
imbalance volumes owed by a Seller to a third party as of the Effective Time as reflected on Schedule 5.10, multiplied by $7.00 per mmbtu; and 
 4.2.7. Any other amount provided for in this Agreement. 
 The Buyer’s Purchase Price shall be adjusted
as follows: 
 4.3. Increases in Buyer’s Purchase Price. Buyer’s Purchase Price shall be increased by an amount equal to the
sum of the following amounts: 
 4.3.1. The amount of costs and expenses actually paid or to be paid by Buyer and its
affiliates related to owning, operating, producing and maintaining the Buyer’s Properties from the Effective Time to the Closing Date, including capital expenditures; 
  


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 4.3.2. The amount of all prepaid expenses, including ad valorem, property and similar
taxes and assessments based upon or measured by ownership, relating to the Buyer’s Properties, paid by Buyer and attributable to periods of time after the Effective Time; 
 4.3.3. The amount of all upward adjustments to Buyer’s Purchase Price provided for in this Agreement; and 
 4.3.4. The value of (a) all oil and other Hydrocarbons in pipelines or in tanks above the pipeline sales connection, in each case at
the Effective Time that is credited to Buyer’s Properties and not sold by Buyer prior to Closing, (b) all unsold inventory of gas plant products attributable to Buyer’s Properties at the Effective Time and not sold by Buyer prior to
Closing, each such value to be the market or, if applicable, the contract price in effect as of the Effective Time, less any applicable severance taxes and royalties and (c) all gas imbalance volumes owed to Buyer by a third party as of the
Effective Time as reflected on Schedule 11.9, multiplied by $7.00 per mmbtu. 
 4.4. Decreases in Buyer’s Purchase Price.
Buyer’s Purchase Price shall be decreased by an amount equal to the sum of the following amounts: 
 4.4.1. The amount of
all proceeds paid or to be paid to Buyer, including proceeds from the sale of production, net of all applicable taxes and royalties actually paid or to be paid by Buyer, attributable to Buyer’s Properties for periods of time after the Effective
Time; 
 4.4.2. An amount equal to all ad valorem, property, and similar taxes and assessments based upon or measured by
ownership, relating to Buyer’s Properties that are unpaid as of the Closing Date and attributable to periods of time prior to the Effective Time; 
 4.4.3. The amount, if any, relating to Buyer’s Title Defect Removals under Section 11.9; 
 4.4.4. The amount, if any, by which Buyer’s Uncured Title Defects Value exceeds two percent (2%) of Buyer’s Purchase Price; 
 4.4.5. The amount, if any, by which the Buyer’s Unremedied Adverse Environmental Conditions Value exceeds two percent (2%) of
Buyer’s Purchase Price; 
 4.4.6. All gas imbalance volumes owed by a Buyer to a third party as of the Effective Time as
reflected on Schedule 6.17, multiplied by $7.00 per mmbtu; and 
 4.4.7. Any other amount provided for in this
Agreement. 
  

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 ARTICLE 5 
 REPRESENTATIONS AND WARRANTIES OF SELLERS 
 Sellers represent and warrant to Buyer that each of the
statements made in this Article 5 are true and correct as of the date of this Agreement and will be true and correct as of the Closing Date. 
 5.1. Organization. Pogo Producing Company LLC is a Delaware limited liability company validly existing and in good standing under the laws of the State of Delaware. Pogo Producing (San Juan) Company is a corporation validly existing
and in good standing under the laws of the state of Texas. Pogo Partners Inc. is a corporation validly existing and in good standing under the laws of the state of Texas. Each Seller is in good standing and duly qualified to do business in each
other jurisdiction in which the conduct of its business or ownership or leasing of its properties makes such qualification or registration necessary. 
 5.2. Authority. Each Seller has full power to enter into and perform its obligations under this Agreement and has taken all proper limited partnership or limited liability company action to authorize entering
into this Agreement and performing its obligations hereunder. 
 5.3. No Conflict. To Sellers’ Knowledge, neither the execution
and delivery of this Agreement, nor the consummation of the transactions contemplated hereby, nor the compliance with the terms hereof will result in any default under any material agreement or instrument to which any Seller is a party (including
its governing documents) or by which any of the Properties is bound, or violate any order, writ, injunction, decree, statute, rule or regulation applicable to any Seller or to any of the Properties, other than requirements to obtain (a) those
consents to assignment or waivers of preferential rights to purchase from third parties set forth in Schedule 5.3 and (b) approvals from governmental entities customarily obtained post-closing. 
 5.4. Enforceability. This Agreement has been duly executed and delivered on behalf of each Seller and constitutes (and the Assignment, when
executed and delivered at Closing, will constitute) the legal, valid and binding obligation of such Seller, enforceable in accordance with its terms, except as limited by bankruptcy or other similar laws applicable generally to creditors’
rights and as limited by general equitable principles. 
 5.5. Contracts. To Sellers’ Knowledge, Schedule 5.5 describes
(a) all area of mutual interests agreements (other than area of mutual provisions of customary joint operating agreements), all purchase or sale agreements (other than with respect to production of Hydrocarbons and the disposition of field
equipment in the ordinary course), partnership (other than tax partnerships), joint venture and/or exploration or development program agreements relating to Wells and Leases or otherwise included in the Properties, (b) all of the production
sales, marketing and processing agreements relating to the Wells and Leases, other than such agreements which are terminable by Sellers without penalty on 30 or fewer days’ notice and (c) any contracts or agreements (other than contracts
for utility services) burdening the Properties which could reasonably be expected to obligate Sellers to expend in excess of Two Hundred Fifty Thousand Dollars ($250,000) in any calendar year ((a) – (c) collectively, the
“Material Contracts”). To Sellers’ Knowledge, (x) no Seller has received written notice of its default under any of the Material Contracts, (y) the Leases or the Easements; the Material Contracts
and the Leases are in full force and effect and have not been modified or amended in any material respect; and (z) no Seller is in default in any material respect thereunder or under any Easement. 
  

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 5.6. Litigation and Claims. Except as set forth on Schedule 5.6, no suit, action, demand,
proceeding, lawsuit or other litigation is pending or, to Sellers’ Knowledge, threatened with respect to any Seller that could reasonably be expected to materially and adversely affect the ownership, operation or value of the Properties or any
of the Wells or Leases. 
 5.7. Finder’s Fees. No Seller has incurred any liability, contingent or otherwise, for brokers’
or finders’ fees with respect to this transaction for which Buyer shall have any responsibility whatsoever. 
 5.8. Sale
Contracts. Except for (a) contracts governing the sale of Hydrocarbons in the ordinary course or (b) the disposition in the ordinary course of equipment no longer suitable for oil and gas field operations, there are no contracts or
options outstanding for the sale, exchange or transfer of any Seller’s interest in the Properties or any portion thereof. 
 5.9.
Notices. To Sellers’ Knowledge, and except as set forth on Schedule 5.9 or Schedule 5.12, (a) Sellers’ operation of the Properties is not the subject of any pending regulatory compliance or enforcement actions and
(b) no Seller has received written notice, which has not heretofore been complied with, of any violation of laws, rules or regulations (federal, state and local) issued with respect to the Properties. 
 5.10. Imbalances. To Sellers’ Knowledge, except as set forth on Schedule 5.10, there are no gas or other Hydrocarbon production,
pipeline, transportation or processing imbalances existing as of the Effective Time with respect to any of the Properties. 
 5.11.
Property Obligations. All rentals, royalties, shut-in royalties, overriding royalties and other payments due pursuant to or with respect to the Leases have been properly paid, except for such failures to pay which could not reasonably be
expected to have a Material Adverse Effect. 
 5.12. Property Operation. To Sellers’ Knowledge, and except as set forth on
Schedule 5.9 or Schedule 5.12, the Wells have been drilled, completed, operated, developed and produced in material compliance with all applicable judgments, orders, laws, rules and regulations (other than those relating to
environmental or title matters, which are dealt with in Article 11 and Article 12) and all necessary certificates, consents, permits, licenses and other governmental authorizations (other than those relating to environmental or title
matters, which are dealt with in Article 11 and Article 12) which are material to the ownership, use or operation of the Properties have been obtained and are in force. 
 5.13. Take-or-Pay. To Sellers’ Knowledge, except as set forth on Exhibit B, neither Seller is obligated, under a take-or-pay or
similar arrangement, or by virtue of an election to non-consent, or not participate in a past or current operation on the Properties pursuant to the applicable operating agreement, to produce Hydrocarbons, or allow Hydrocarbons to be produced,
without receiving full payments at the time of delivery in an amount that corresponds to the Net Revenue Interest in the Hydrocarbons attributable to any Well, unit or Lease described in Exhibit B. 
  

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 5.14. Taxes. All taxes that are due based on or measured by the ownership of any Property, the
production or removal of Hydrocarbons therefrom or the receipt of proceeds therefrom have been properly paid. 
 5.15. Timely Receipt.
To Sellers’ Knowledge, each Seller is timely receiving, in all material respects, its share of proceeds from the sale of Hydrocarbons produced from the Properties without suspense, counterclaim or set-off. There has been no production of
Hydrocarbons from the Properties in excess of the allowable production established pursuant to applicable state or federal law or regulation that would result in any material restriction on production from the Leases subsequent to the Effective
Time. 
 5.16. Timely Payment. Each Seller has paid its share of all costs payable by it under the Leases and the Material Contracts,
except those being contested in good faith. 
 5.17. Outstanding Obligations. Except as otherwise described in Schedule 5.17,
to Sellers’ Knowledge, there are no outstanding authorizations for expenditures or other written commitments or proposals to conduct operations on the Properties. 
 5.18. Material Differences. To Sellers’ Knowledge, there exist no material differences between the Lease Operating Expense and Revenue statements for the Properties provided by Sellers to Buyer as compared
to the lease operating expenses incurred by Sellers and the revenues received by Sellers for the periods covered in the statements. 
 5.19.
Basis of Sellers Decision; Property Review. Sellers: 
 5.19.1. Have such knowledge and experience in financial and
business matters that they are capable of evaluating the merits and risks of their investment in Buyer’s Properties contemplated hereby, and are able to bear the economic risk of such investment indefinitely; 
 5.19.2. Have (a) had the opportunity to meet with representative officers and other representatives of Buyer to discuss Buyer’s
Properties and (b) received all materials, documents and other information that Sellers deem necessary or advisable to evaluate Buyer’s Properties; 
 5.19.3. Have made their own independent examination, investigation, analysis and evaluation of Buyer’s Properties, including their
own estimate of the value of Buyer’s Properties; and 
 5.19.4. Have undertaken such due diligence pertaining to
Buyer’s Properties as Sellers deem adequate, including that described above. 
 5.20. Sellers Experience and Counsel. Sellers are
experienced and knowledgeable investors and operators in the oil and gas business. Prior to entering into this Agreement, Sellers were advised by and has relied solely on their own expertise and legal, tax, engineering, and other professional
counsel concerning this Agreement, Buyer’s Properties and the value thereof. 
  

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 5.21. Closing Funds. Sellers have or will have at the Closing sufficient funds to enable the
payment to Buyer by wire transfer of the Net Purchase Price in accordance with Article 14 and otherwise to perform Sellers’ obligations under this Agreement. 
 5.22. No Further Distribution. Sellers are acquiring Buyer’s Properties for their own account and not with a view to, or for offer of resale in connection with, a distribution thereof, within the meaning
of the Securities Act of 1933, 15 U.S.C. § 77a et seq., and any other rules, regulations, and laws pertaining to the distribution of securities. Sellers have not sought or solicited, nor are Sellers participating with, investors,
partners or other third parties in order to fund the Net Purchase Price and to close this transaction, and all funds used by Sellers in connection with this transaction are Sellers own funds. 
 5.23. Sellers Ability to Take Title. Sellers are unaware of any fact or circumstance which would preclude or inhibit unconditional approval of
Buyer’s assignment of Buyer’s Properties to Sellers by any governmental agency, including meeting existing or increased bonding requirements. 
 5.24. Sellers Ability to Operate. Sellers are unaware of any fact or circumstance which would preclude or inhibit Sellers’ qualification to operate any oil, gas and mineral leases and pipeline(s)
previously operated by Buyer, including meeting existing or bonding or other security requirements of any lessee or governmental agency. 
 ARTICLE 6 
 REPRESENTATIONS AND WARRANTIES OF BUYER 
 Buyer represents and warrants to Sellers that each of the statements made in this Article 6 are true and correct as of the date of this Agreement
and will be true and correct as of the Closing Date. 
 6.1. Organization. Buyer is a corporation validly existing and in good
standing under the laws of the State of its incorporation. Buyer is in good standing and duly qualified to do business in each other jurisdiction in which the conduct of its business or ownership or leasing of its properties makes such qualification
or registration necessary, and, as of Closing, will be qualified to do business and be in good standing under the laws of the States of Texas and New Mexico. 
 6.2. Authority. Buyer has full power to enter into and perform its obligations under this Agreement and has taken all proper corporate action to authorize entering into this Agreement and performing its
obligations hereunder. 
 6.3. No Conflicts. To Buyer’s Knowledge, neither the execution and delivery of this Agreement, nor the
consummation of the transactions contemplated hereby, nor the compliance with the terms hereof will result in any default under any material agreement or instrument to which Buyer is a party (including its governing documents) or by which any of
Buyer’s Properties is bound, or violate any order, writ, injunction, decree, statute, rule or regulation applicable to Buyer or to any of Buyer’s Properties, other than requirements to obtain (a) those consents to assignment or
waivers of preferential rights to purchase from third parties set forth in Schedule 6.3 and (b) approvals from governmental entities customarily obtained post-closing. 
  

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 6.4. Enforceability. This Agreement has been duly executed and delivered on behalf of Buyer and
constitutes the legal, valid and binding obligation of Buyer, enforceable in accordance with its terms, except as limited by bankruptcy or other similar laws applicable generally to creditor’s rights and as limited by general equitable
principles. 
 6.5. Basis of Buyer’s Decision; Property Review. Buyer: 
 6.5.1. Has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of its
investment in the Properties contemplated hereby, and is able to bear the economic risk of such investment indefinitely; 
 6.5.2. Has (a) had the opportunity to meet with representative officers and other representatives of Sellers to discuss the Properties and (b) received all materials, documents and other information that Buyer deems necessary or
advisable to evaluate the Properties; 
 6.5.3. Has made its own independent examination, investigation, analysis and
evaluation of the Properties, including its own estimate of the value of the Properties; and 
 6.5.4. Has undertaken such due
diligence pertaining to the Properties as Buyer deems adequate, including that described above. 
 6.6. Buyer’s Experience and
Counsel. Buyer is an experienced and knowledgeable investor and operator in the oil and gas business. Prior to entering into this Agreement, Buyer was advised by and has relied solely on its own expertise and legal, tax, engineering, and other
professional counsel concerning this Agreement, the Properties and the value thereof. 
 6.7. Closing Funds. Buyer has or will have at
the Closing sufficient funds to enable the payment to Sellers by wire transfer of the Net Purchase Price in accordance with Article 14 and otherwise to perform Buyer’s obligations under this Agreement. 
 6.8. No Further Distribution. Buyer is acquiring the Properties for its own account and not with a view to, or for offer of resale in connection
with, a distribution thereof, within the meaning of the Securities Act of 1933, 15 U.S.C. § 77a et seq., and any other rules, regulations, and laws pertaining to the distribution of securities. Buyer has not sought or solicited, nor is
Buyer participating with, investors, partners or other third parties in order to fund the Net Purchase Price and to close this transaction, and all funds used by Buyer in connection with this transaction are Buyer’s own funds. 
 6.9. Buyer’s Ability to Take Title. Buyer is unaware of any fact or circumstance which would preclude or inhibit unconditional approval of
Sellers’ assignment of the Properties to Buyer by any governmental agency, including meeting existing or increased bonding requirements. 
 6.10. Buyer’s Ability to Operate. Buyer is unaware of any fact or circumstance which would preclude or inhibit Buyer’s qualification to operate any oil, gas and mineral leases and pipeline(s) previously operated by Sellers,
including meeting existing or bonding or other security requirements of any lessee or governmental agency. 
  

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 6.11. Finder’s Fees. Buyer has not incurred any liability, contingent or otherwise, for
brokers’ or finders’ fees in respect to this transaction for which any Seller shall have any responsibility whatsoever. 
 6.12.
Contracts. To Buyer’s Knowledge, Schedule 6.12 describes (a) all area of mutual interests agreements (other than area of mutual provisions of customary joint operating agreements), all purchase or sale agreements (other than
with respect to production of Hydrocarbons and the disposition of field equipment in the ordinary course), partnership (other than tax partnerships), joint venture and/or exploration or development program agreements relating to Buyer’s Wells
and Buyer’s Leases or otherwise included in Buyer’s Properties, (b) all of the production sales, marketing and processing agreements relating to Buyer’s Wells and Buyer’s Leases, other than such agreements which are
terminable by Buyer without penalty on 30 or fewer days’ notice and (c) any contracts or agreements (other than contracts for utility services) burdening the Buyer’s Properties which could reasonably be expected to obligate Buyer to
expend in excess of Two Hundred Fifty Thousand Dollars ($250,000) in any calendar year ((a) – (c) collectively, the “Buyer’s Material Contracts”). To Buyer’s Knowledge, (x) Buyer has not received
written notice of its default under any of Buyer’s Material Contracts, (y) Buyer’s Leases or Buyer’s Easements; Buyer’s Material Contracts and Buyer’s Leases are in full force and effect and have not been modified or
amended in any material respect; and (z) Buyer is not in default in any material respect thereunder or under any Buyer Easement. 
 6.13. Litigation and Claims. Except as set forth on Schedule 6.13, no suit, action, demand, proceeding, lawsuit or other litigation is pending or, to Buyer’s Knowledge, threatened with respect to Buyer that could
reasonably be expected to materially and adversely affect the ownership, operation or value of Buyer’s Properties or any of Buyer’s Wells or Buyer’s Leases. 
 6.14. Intentionally Deleted. 
 6.15.
Sale Contracts. Except for (a) contracts governing the sale of Hydrocarbons in the ordinary course or (b) the disposition in the ordinary course of equipment no longer suitable for oil and gas field operations, there are no
contracts or options outstanding for the sale, exchange or transfer of Buyer’s interest in Buyer’s Properties or any portion thereof. 
 6.16. Notices. To Buyer’s Knowledge, and except as set forth on Schedule 6.16 or Schedule 6.19, (a) Buyer’s operation of Buyer’s Properties is not the subject of any pending regulatory compliance or
enforcement actions and (b) Buyer has not received written notice, which has not heretofore been complied with, of any violation of laws, rules or regulations (federal, state and local) issued with respect to Buyer’s Properties.

 6.17. Imbalances. To Buyer’s Knowledge, except as set forth on Schedule 6.17, there are no gas or other Hydrocarbon
production, pipeline, transportation or processing imbalances existing as of the Effective Time with respect to any of Buyer’s Properties. 
 6.18. Property Obligations. All rentals, royalties, shut-in royalties, overriding royalties and other payments due pursuant to or with respect to Buyer’s Leases have been properly paid, except for such failures to pay which
could not reasonably be expected to have a Material Adverse Effect. 
  

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 6.19. Property Operation. To Buyer’s Knowledge, and except as set forth on Schedule
6.16 or Schedule 6.19, the Buyer’s Wells have been drilled, completed, operated, developed and produced in material compliance with all applicable judgments, orders, laws, rules and regulations (other than those relating to
environmental or title matters, which are dealt with in Article 11 and Article 12) and all necessary certificates, consents, permits, licenses and other governmental authorizations (other than those relating to environmental or title
matters, which are dealt with in Article 11 and Article 12) which are material to the ownership, use or operation of Buyer’s Properties have been obtained and are in force. 
 6.20. Take-or-Pay. To Buyer’s Knowledge, except as set forth on Exhibit B-1, Buyer is not obligated, under a take-or-pay or similar
arrangement, or by virtue of an election to non-consent, or not participate in a past or current operation on Buyer’s Properties pursuant to the applicable operating agreement, to produce Hydrocarbons, or allow Hydrocarbons to be produced,
without receiving full payments at the time of delivery in an amount that corresponds to Buyer’s interest in the Hydrocarbons attributable to any Buyer Property or Buyer Lease described in Exhibit B-1. 
 6.21. Taxes. All taxes that are due based on or measured by the ownership of any Buyer Property, the production or removal of Hydrocarbons
therefrom or the receipt of proceeds therefrom have been properly paid. 
 6.22. Timely Receipt. To Buyer’s Knowledge, Buyer is
timely receiving, in all material respects, its share of proceeds from the sale of Hydrocarbons produced from Buyer’s Properties without suspense, counterclaim or set-off. There has been no production of Hydrocarbons from Buyer’s
Properties in excess of the allowable production established pursuant to applicable state or federal law or regulation that would result in any material restriction on production from Buyer’s Leases subsequent to the Effective Time. 

6.23. Timely Payment. Buyer has paid its share of all costs payable by it under Buyer’s Leases and Buyer’s Material Contracts, except
those being contested in good faith. 
 6.24. Outstanding Obligations. Except as otherwise described in Schedule 6.24, to
Buyer’s Knowledge, there are no outstanding authorizations for expenditures or other written commitments or proposals to conduct operations on Buyer’s Properties. 
 6.25. Material Differences. To Buyer’s Knowledge, there exist no material differences between the Lease Operating Expense and Revenue
statements for Buyer’s Properties provided by Buyer to Sellers as compared to the lease operating expenses incurred by Buyer and the revenues received by Buyer for the periods covered in the statements. 
 ARTICLE 7 
 COVENANTS OF SELLER 

 7.1. Conduct of Business Pending Closing. From the date hereof to the Closing Date, except as provided herein, as required by any
obligation, agreement, Lease, contract, or instrument referred to on any Exhibit or Schedule or as otherwise consented to in writing by Buyer, each Seller will: 
 7.1.1. Not (a) act in any manner with respect to the Properties other than in the normal, usual and customary manner, consistent with
prior practice; (b) dispose of, encumber or relinquish any of the Properties (other than any relinquishment resulting from the expiration of any Lease or Material Contract in accordance with its terms); (c) waive, compromise or settle any
material right or claim with respect to any of the Properties; or (d) except with respect to those matters identified in Schedule 5.17, make capital or workover expenditures with respect to the Properties in excess of $100,000 (net to
Sellers’ interest), except when required by an emergency when there shall have been insufficient time to obtain advance consent (provided, that Seller will promptly notify Buyer of any such emergency expenditures); 
  

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 7.1.2. Use commercially reasonable efforts to preserve relationships with all third
parties having business dealings with respect to the Properties; 
 7.1.3. Cooperate with Buyer in the notification of all
applicable governmental regulatory authorities of the transactions contemplated hereby and cooperate with Buyer in obtaining the issuance by each such authority of such permits, licenses and authorizations as may be necessary for Buyer to own and
operate the Properties following the Closing; 
 7.1.4. Use commercially reasonable efforts, when necessary in Buyer’s
opinion, to seek appointment of Buyer as the successor operator to Seller with respect to all Properties currently operated by Seller; 
 7.1.5. Until Closing maintain all insurance with respect to the Properties currently in force with the same coverages and limits as are in effect at the date hereof; and 
 7.1.6. Use commercially reasonable efforts to obtain the consents or waivers listed on Schedule 5.3. 
 7.2. Access. Each Seller shall afford to Buyer and its authorized representatives reasonable access, at Buyer’s sole risk and expense, from
the date hereof until the Closing Date during normal business hours, to (a) the Properties operated by such Seller (provided, however, that Buyer shall indemnify and hold harmless Seller from and against any and all Claims arising from
Buyer’s inspection of the Properties (including Claims for personal injuries, property damage and reasonable attorneys’ and experts’ fees, AND SPECIFICALLY FOR CLAIMS ARISING OUT OF OR PARTIALLY OR FULLY CAUSED BY THE NEGLIGENCE OF
SELLERS OR THEIR AGENTS OR REPRESENTATIVES)), and (b) such Seller’s operating, accounting, contract, corporate and legal files, records, materials, data and information regarding the Properties (“Data”); provided,
however, that Data shall not include (x) any legal materials the disclosure of which such Seller determines would jeopardize the assertion of a privilege in ongoing or anticipated litigation with third parties, or (y) information, the
disclosure of which would violate any confidentiality agreement to which such Seller is bound. 
  

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 7.3. Satisfaction of Conditions. Sellers will use commercially reasonable efforts to take all
actions and to do all things necessary to consummate, make effective and comply with all of the terms of this Agreement (including satisfaction, but not waiver, of the Closing conditions for which they are responsible or otherwise in control).

 ARTICLE 8 
 COVENANTS
OF BUYER 
 8.1. Satisfaction of Conditions. Buyer will use commercially reasonable efforts to take all actions and to do all
things necessary to consummate, make effective and comply with all of the terms of this Agreement (including satisfaction, but not waiver, of the Closing conditions for which it is responsible or otherwise in control). 
 8.2. Conduct of Business Pending Closing. From the date hereof to the Closing Date, except as provided herein, as required by any obligation,
agreement, Buyer Lease, contract, or instrument referred to on any Exhibit or Schedule or as otherwise consented to in writing by Sellers, Buyer will: 
 8.2.1. Not (a) act in any manner with respect to Buyer’s Properties other than in the normal, usual and customary manner,
consistent with prior practice; (b) dispose of, encumber or relinquish any of Buyer’s Properties (other than any relinquishment resulting from the expiration of any Buyer’s Lease or Buyer’s Material Contract in accordance with
its terms); (c) waive, compromise or settle any material right or claim with respect to any of Buyer’s Properties; or (d) except with respect to those matters identified in Schedule 6.24, make capital or workover expenditures
with respect to Buyer’s Properties in excess of $100,000 (net to Buyer’s interest), except when required by an emergency when there shall have been insufficient time to obtain advance consent (provided, that Buyer will promptly notify
Seller of any such emergency expenditures); 
 8.2.2. Use commercially reasonable efforts to preserve relationships with all
third parties having business dealings with respect to Buyer’s Properties; 
 8.2.3. Cooperate with Sellers in the
notification of all applicable governmental regulatory authorities of the transactions contemplated hereby and cooperate with Sellers in obtaining the issuance by each such authority of such permits, licenses and authorizations as may be necessary
for Sellers to own and operate Buyer’s Properties following the Closing; 
 8.2.4. Use commercially reasonable efforts,
when necessary Sellers’ opinion, to seek appointment of one of the Sellers as the successor operator to Buyer with respect to all of Buyer’s Properties currently operated by Seller; 
 8.2.5. Until Closing maintain all insurance with respect to Buyer’s Properties currently in force with the same coverages and limits
as are in effect at the date hereof; and 
 8.2.6. Use commercially reasonable efforts to obtain the consents or waivers
listed on Schedule 6.3. 
  

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 8.3. Access. Buyer shall afford to Sellers and their authorized representatives reasonable access,
at Sellers’ sole risk and expense, from the date hereof until the Closing Date during normal business hours, to (a) Buyer’s Properties operated by Buyer (provided, however, that Sellers shall indemnify and hold harmless Buyer from and
against any and all Claims arising from Sellers’ inspection of Buyer’s Properties (including Claims for personal injuries, property damage and reasonable attorneys’ and experts’ fees, AND SPECIFICALLY FOR CLAIMS ARISING OUT OF OR
PARTIALLY OR FULLY CAUSED BY THE NEGLIGENCE OF BUYER OR ITS AGENTS OR REPRESENTATIVES)), and (b) Buyer’s operating, accounting, contract, corporate and legal files, records, materials, data and information regarding the Properties
(“Buyer’s Data”); provided, however, that Buyer’s Data shall not include (x) any legal materials the disclosure of which Buyer determines would jeopardize the assertion of a privilege in ongoing or anticipated
litigation with third parties, or (y) information, the disclosure of which would violate any confidentiality agreement to which Buyer is bound. 
 ARTICLE 9 
 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER 
 The obligations of Sellers to be performed at the Closing are subject to the fulfillment (or waiver by Sellers in their sole discretion), before or at
the Closing, of each of the following conditions: 
 9.1. Representations and Warranties. The representations and warranties by Buyer
set forth in Article 6 shall be true and correct in all material respects at and as of the Closing as though made at and as of the Closing; provided, however, that in no event shall the existence of a Title Defect or an Adverse Environmental
Condition cause a representation or warranty to be untrue or incorrect. 
 9.2. Covenants. Buyer shall have performed and complied
with in all material respects all covenants and agreements required to be performed and satisfied by it at or prior to Closing. 
 9.3. No
Litigation. There shall be no suits, actions or other proceedings pending or threatened to restrain or prohibit the consummation of the transactions contemplated by this Agreement. 
 9.4. Consents. All consents and approvals required to be obtained before Closing shall have been obtained or shall have expired without being
exercised and have therefore been waived, except for those consents and approvals which are customarily obtained after closing of transactions similar to those contemplated hereby. 
 9.5. Release of Liens. All mortgages, deeds of trust and other liens of record burdening Buyer’s Properties, if any (other than Permitted
Liens), which secure indebtedness of Sellers or any of their affiliates shall be released at or before Closing. 
  

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 ARTICLE 10 
 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER 
 The obligations of Buyer to be performed at the
Closing are subject to the fulfillment (or waiver by Buyer in its sole discretion), before or at the Closing, of each of the following conditions: 
 10.1. Representations and Warranties. The representations and warranties of the Sellers set forth in Article 5 shall be true and correct in all material respects at and as of the Closing as though made at and as of the
Closing; provided, however, that in no event shall the existence of a Title Defect or an Adverse Environmental Condition cause a representation or warranty to be untrue or incorrect. 
 10.2. Covenants. Sellers shall have performed and complied with in all material respects all covenants and agreements required to be performed and
satisfied by them at or prior to Closing. 
 10.3. No Litigation. There shall be no suits, actions or other proceedings pending or
threatened to restrain or prohibit the consummation of the transactions contemplated by this Agreement. 
 10.4. Consents. All
consents and approvals required to be obtained before Closing shall have been obtained or shall have expired without being exercised and have therefore been waived, except for those consents and approvals which are customarily obtained after closing
of transactions similar to those contemplated hereby. 
 10.5. Release of Liens. All mortgages, deeds of trust and other liens of
record burdening the Properties, if any (other than Permitted Liens), which secure indebtedness of Buyer or any of its affiliates shall be released at or before Closing. 
 ARTICLE 11 
 TITLE MATTERS 
 11.1. Title Defect Notice by Buyer. Buyer shall in good faith provide Sellers with written notice (a “Title Defect
Notice”) at or before the Defect Notification Deadline of any fact that renders Sellers’ title to any Property less than Good and Defensible Title (“Title Defect”), in each case together with, in reasonable
detail, a description of (a) the Well, unit and/or Lease with respect to which the claimed Title Defect(s) relate, (b) the nature of such claimed Title Defect(s) and (c) Buyer’s calculation of the value of each claimed Title
Defect(s) in accordance with the guidelines set forth in Section 11.3. Any Title Defect that is not identified in a properly and timely delivered Title Defect Notice shall thereafter be forever waived and expressly assumed by Buyer and
shall be deemed to have become a Permitted Encumbrance. 
 11.2. Determination of Title Defects and Defect Values for the Properties.

 11.2.1. Within ten Business Days after Sellers’ receipt of a Title Defect Notice, the applicable Seller shall notify
Buyer as to whether Sellers agree with the Title Defects claimed therein and/or the values proposed for such Title Defects therein. If such Seller 

  

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does not agree with any such claimed Title Defect and/or any such proposed value, then the Parties shall promptly enter into good faith negotiations and
shall attempt to agree on such matters. The value agreed by the Parties with respect to a Title Defect shall be the Defect Value for such Title Defect. 
 11.2.2. If the Parties cannot reach agreement concerning either the existence of a Title Defect or a value therefor with respect to any Property prior to Closing, then, upon any Party’s written request, the
Parties shall submit such dispute to a mutually acceptable attorney or other consultant experienced in title examination in the state in which such Property is located for prompt resolution; provided, however, that if at any time any consultant so
chosen fails or refuses to perform hereunder, a new consultant shall be chosen by the Parties. The cost of any such consultant shall be borne 50% by Sellers and 50% by Buyer. For any such dispute resolution process, Sellers and Buyer shall present a
written statement of their respective positions on the dispute to the consultant within three Business Days after the consultant is selected, and the consultant shall make a determination of all points of disagreement in accordance with the terms
and conditions of this Agreement within ten Business Days of receipt of such statements. The determination by the consultant shall be conclusive and binding on the Parties and shall be enforceable against any Party in any court of competent
jurisdiction, and the value determined by the consultant with respect to a Title Defect shall be the Defect Value for such Title Defect. If necessary to complete such determination, the Closing Date shall be deferred until the consultant has made a
determination of the disputed issues with respect thereto and all subsequent dates and required activities having reference to the Closing Date shall be correspondingly deferred; provided, however, that, unless the Parties mutually agree in writing
to the contrary, the Closing Date shall not be deferred under this Section 11.2.2 in any event for more than ten Business Days. 
 11.2.3. Sellers shall have the right, but not the obligation, to cure any fact agreed or determined to be a Title Defect. 
 11.3. Calculation of Defect Value. 
 11.3.1. If a Title Defect exists because Sellers
own a lesser Net Revenue Interest in a Property than that shown for such Property on Exhibit B, then the Defect Value with respect to such Title Defect shall be the amount equal to the product of (a) the Allocated Value of such Property
and (b) a fraction, the numerator of which is the interest agreed or determined to be owned by Sellers and the denominator of which is the respective interest set forth on Exhibit B. 
 11.3.2. If a Title Defect is a lien, encumbrance or other charge upon a Property which is liquidated in amount, but such Title Defect is
not a Minimal Defect, then Sellers shall either (a) instruct Buyer to pay at Closing the sum necessary to be paid to the obligee to remove the Title Defect from such Property (the aggregate of all such amounts, the “Liquidated Title
Defect Payment”) or (b) retain the obligation of such Title Defect and elect to challenge the validity thereof (or of any portion thereof), in which case Buyer shall extend reasonable cooperation to Sellers in such efforts at no
risk or expense to Buyer. 
  

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 11.3.3. If a Title Defect represents an obligation or burden upon a Property for which
the economic detriment to Buyer is not liquidated but can be estimated with reasonable certainty, the Defect Value with respect to such Title Defect shall be the sum the Parties mutually agree upon in good faith as the present value of the adverse
economic effect such Title Defect will have on such Property. If the Parties cannot reach an agreement as to such Defect Value, then such dispute shall be resolved in the manner set forth in Section 11.2. 
 11.4. Exclusion of Properties Subject to Title Defects. With respect to any Property subject to a Title Defect, Sellers shall have the option
(which must be exercised by written notice to Buyer at least five Business Days prior to Closing) to remove such Property from this Agreement, in which case the Purchase Price shall be reduced by the Allocated Value of such Property. If a third
party exercises an applicable preferential right of purchase with respect to any Property, the Purchase Price shall be reduced by the Allocated Value of such Property or, if the preferential right affects less than 100% of such Property, a pro rata
portion thereof calculated in accordance with Section 11.3.1, and such Property (or portion thereof) shall be removed from this Agreement. The removal of a Property or portion thereof under this Section 11.4 is referred to as a
“Title Defect Removal”. 
 11.5. Purchase Price Adjustment for Title Benefits. If it is agreed or determined
that Sellers own a greater Net Revenue Interest in a Property than is set forth in Exhibit B which exceeds an amount (calculated on the same basis as Defect Values) equal to the greater of (a) 2% of the Allocated Value of such Property or
(b) $15,000 (a “Title Benefit”), the aggregate amount thereof will be taken as an offset to the Uncured Title Defects Value, if any; otherwise, no adjustment to the Purchase Price shall be made therefor. 
 11.6. Title Defect Notice by Sellers. Sellers shall in good faith provide the Buyer with written notice (a “Title Defect
Notice”) at or before the Defect Notification Deadline of any fact that renders Buyer’s title to any Buyer Property less than Good and Defensible Title (“Title Defect”), in each case together with, in
reasonable detail, a description of (a) Buyer’s Well, Buyer’s unit and/or Buyer’s Lease with respect to which the claimed Title Defect(s) relate, (b) the nature of such claimed Title Defect(s) and (c) Sellers’
calculation of the value of each claimed Title Defect(s) in accordance with the guidelines set forth in Section 11.8. Any Title Defect that is not identified in a properly and timely delivered Title Defect Notice shall thereafter be
forever waived and expressly assumed by Sellers and shall be deemed to have become a Permitted Encumbrance. 
 11.7. Determination of
Title Defects and Defect Values for the Buyer’s Properties. 
 11.7.1. Within ten Business Days after Buyer’s
receipt of a Title Defect Notice relating to the Buyer’s Properties, Buyer shall notify Seller as to whether Buyer agrees with the Title Defects claimed therein and/or the values proposed for such Title Defects therein. If Buyer does not agree
with any such claimed Title Defect and/or any such proposed value, then the Parties shall promptly enter into good faith negotiations and shall attempt to agree on such matters. The value agreed by the Parties with respect to a Title Defect shall be
the Defect Value for such Title Defect. 
  

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 11.7.2. If the Parties cannot reach agreement concerning either the existence of a Title
Defect or a value therefor with respect to any Buyer Property prior to Closing, then, upon any Party’s written request, the Parties shall submit such dispute to a mutually acceptable attorney or other consultant experienced in title examination
in the state in which such Property is located for prompt resolution; provided, however, that if at any time any consultant so chosen fails or refuses to perform hereunder, a new consultant shall be chosen by the Parties. The cost of any such
consultant shall be borne 50% by Sellers and 50% by Buyer. For any such dispute resolution process, Sellers and Buyer shall present a written statement of their respective positions on the dispute to the consultant within three Business Days after
the consultant is selected, and the consultant shall make a determination of all points of disagreement in accordance with the terms and conditions of this Agreement within ten Business Days of receipt of such statements. The determination by the
consultant shall be conclusive and binding on the Parties and shall be enforceable against any Party in any court of competent jurisdiction, and the value determined by the consultant with respect to a Title Defect shall be the Defect Value for such
Title Defect. If necessary to complete such determination, the Closing Date shall be deferred until the consultant has made a determination of the disputed issues with respect thereto and all subsequent dates and required activities having reference
to the Closing Date shall be correspondingly deferred; provided, however, that, unless the Parties mutually agree in writing to the contrary, the Closing Date shall not be deferred under this Section 11.7.2 in any event for more than ten
Business Days. 
 11.7.3. Buyer shall have the right, but not the obligation, to cure any fact agreed or determined to be a
Title Defect. 
 11.8. Calculation of Defect Value. 
 11.8.1. If a Title Defect exists because Buyer owns a lesser number of net mineral acres in a Buyer Property than that shown for such
Buyer Property on Exhibit B-1, then the Defect Value with respect to such Title Defect shall be the amount equal to the product of (a) the Allocated Value of such Buyer Property and (b) a fraction, the numerator of which is the
number of net mineral acres agreed or determined to be owned by Buyer and the denominator of which is the respective number of net mineral acres set forth on Exhibit B-1 for such Buyer Property. 
 11.8.2. If a Title Defect is a lien, encumbrance or other charge upon a Property which is liquidated in amount, but such Title Defect is
not a Minimal Defect, then Buyer shall either (a) instruct Sellers to pay at Closing the sum necessary to be paid to the obligee to remove the Title Defect from such Buyer Property (the aggregate of all such amounts, the “Liquidated
Title Defect Payment”) or (b) retain the obligation of such Title Defect and elect to challenge the validity thereof (or of any portion thereof), in which case Sellers shall extend reasonable cooperation to Buyer in such efforts at
no risk or expense to Sellers. 
 11.8.3. If a Title Defect represents an obligation or burden upon a Buyer Property for which
the economic detriment to Buyer is not liquidated but can be estimated with reasonable certainty, the Defect Value with respect to such Title Defect shall be the sum 

  

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the Parties mutually agree upon in good faith as the present value of the adverse economic effect such Title Defect will have on such Buyer Property. If the
Parties cannot reach an agreement as to such Defect Value, then such dispute shall be resolved in the manner set forth in Section 11.7. 
 11.9. Exclusion of Properties Subject to Title Defects. With respect to any Buyer Property subject to a Title Defect, Buyer shall have the option (which must be exercised by written notice to Sellers at least five Business Days prior
to Closing) to remove such Buyer Property from this Agreement, in which case Buyer’s Purchase Price shall be reduced by the Allocated Value of such Buyer Property. If a third party exercises an applicable preferential right of purchase with
respect to any Buyer Property, Buyer’s Purchase Price shall be reduced by the Allocated Value of such Buyer Property or, if the preferential right affects less than 100% of such Buyer Property, a pro rata portion thereof calculated in
accordance with Section 11.8.1, and such Buyer Property (or portion thereof) shall be removed from this Agreement. The removal of a Buyer Property or portion thereof under this Section 11.9 is referred to as a “Title
Defect Removal”. 
 11.10. Buyer’s Purchase Price Adjustment for Buyer’s Title Benefits. If it is agreed or
determined that Buyer owns a greater number of net mineral acres in a Buyer Property than is set forth in Exhibit B-1 which exceeds an amount (calculated on the same basis as Defect Values for Buyer’s Property) equal to the greater of
(a) 2% of the Allocated Value of such Buyer Property or (b) $15,000 (a “Title Benefit”), the aggregate amount thereof will be taken as an offset to the Uncured Title Defects Value, if any; otherwise, no adjustment
to Buyer’s Purchase Price shall be made therefor. 
 ARTICLE 12 
 ENVIRONMENTAL MATTERS 
 12.1. Presence of Wastes, NORM, Hazardous Substances
and Asbestos. BUYER ACKNOWLEDGES THAT THE PROPERTIES, AND SELLERS ACKNOWLEDGE THAT BUYER’S PROPERTIES, HAVE BEEN USED TO EXPLORE FOR, DEVELOP AND PRODUCE HYDROCARBONS, AND THAT SPILLS OF WASTES, CRUDE OIL, PRODUCED WATER, HAZARDOUS
SUBSTANCES AND OTHER MATERIALS MAY HAVE OCCURRED THEREON. ADDITIONALLY, BOTH THE PROPERTIES AND BUYER’S PROPERTIES, INCLUDING PRODUCTION EQUIPMENT, MAY CONTAIN ASBESTOS, HAZARDOUS SUBSTANCES OR NORM. NORM MAY AFFIX OR ATTACH ITSELF TO THE
INSIDE OF WELLS, MATERIALS AND EQUIPMENT AS SCALE OR IN OTHER FORMS, AND NORM-CONTAINING MATERIAL MAY HAVE BEEN BURIED OR OTHERWISE DISPOSED OF ON THE PROPERTIES OR THE BUYER’S PROPERTIES. A HEALTH HAZARD MAY EXIST IN CONNECTION WITH THE
PROPERTIES BY REASON THEREOF. SPECIAL PROCEDURES MAY BE REQUIRED FOR REMEDIATION, REMOVING, TRANSPORTING AND DISPOSING OF ASBESTOS, NORM, HAZARDOUS SUBSTANCES AND OTHER MATERIALS FROM A PROPERTY OR A BUYER’S PROPERTY. With respect to the
Properties actually acquired by Buyer at Closing hereunder, Buyer assumes all liability for the assessment, remediation, removal, transportation and disposal of these materials and associated activities in accordance with the applicable rules,
regulations and requirements of governmental agencies, unless otherwise 

  

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provided in this Article 12. With respect to the Buyer Properties actually acquired by Sellers at Closing hereunder, Sellers assume all liability for
the assessment, remediation, removal, transportation and disposal of these materials and associated activities in accordance with the applicable rules, regulations and requirements of governmental agencies, unless otherwise provided in this
Article 12. 
 12.2. Environmental Assessment. Buyer shall have the opportunity to conduct at its sole risk and expense an
environmental assessment of the Properties; provided, however, that Buyer shall not conduct any Phase II audits without Sellers’ prior written consent. Seller will provide reasonable access for this purpose to Properties operated by Seller; for
any Property not operated by Seller, Seller will reasonably cooperate with Buyer in contacting the operators of any such non-operated Property directly to arrange for access for the purposes of environmental assessment. While performing any
environmental assessment, Buyer or any of its representatives and agents must comply with Seller’s environmental and safety rules and policies on Seller-operated Properties, and with the operator’s environmental and safety rules and
policies on all other Properties. Prior to Closing, Buyer will not disclose any information obtained in its environmental assessment to third parties unless agreed to in writing by Seller or unless such disclosure is expressly required by applicable
law or regulation or is required pursuant to legal process of any court or governmental authority. Buyer will notify Seller in advance of any such disclosure and will furnish Seller copies of all materials to be disclosed prior to any disclosure
thereof. As soon as possible after Buyer’s receipt thereof, Buyer shall forward to Seller copies of all reports, data, analysis, test results, remediation costs estimates and recommended remediation procedure or other information concerning or
derived from Buyer’s environmental assessment. Sellers shall have the opportunity to conduct at their sole risk and expense an environmental assessment of the Properties; provided, however, that Sellers shall not conduct any Phase II audits
without Buyer’s prior written consent. Buyer will provide reasonable access for this purpose to Properties operated by Buyer; for any Buyer Property not operated by Buyer, Buyer will reasonably cooperate with Sellers in contacting the operators
of any such non-operated Buyer Property directly to arrange for access for the purposes of environmental assessment. While performing any environmental assessment, Sellers or any of their representatives and agents must comply with Buyer’s
environmental and safety rules and policies on Buyer-operated Properties, and with the operator’s environmental and safety rules and policies on all other Buyer Properties. Prior to Closing, Sellers will not disclose any information obtained in
their environmental assessment to third parties unless agreed to in writing by Buyer or unless such disclosure is expressly required by applicable law or regulation or is required pursuant to legal process of any court or governmental authority.
Sellers will notify Buyer in advance of any such disclosure and will furnish Buyer copies of all materials to be disclosed prior to any disclosure thereof. As soon as possible after Sellers’ receipt thereof, Seller shall forward to Buyer copies
of all reports, data, analysis, test results, remediation costs estimates and recommended remediation procedure or other information concerning or derived from Seller’s environmental assessment. 
 12.3. Notice of Adverse Environment Conditions. Buyer shall in good faith provide Sellers with written notice (an “Adverse
Environmental Condition Notice”) at or before the Defect Notification Deadline of any claimed Adverse Environmental Condition, in each case together with, in reasonable detail, a description of (a) the Well, unit and/or Lease or
Easement with respect to which such Adverse Environmental Condition(s) is claimed, (b) the nature of 

  

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such claimed Adverse Environmental Condition(s) and (c) Buyer’s proposed calculation of the cost to remediate such claimed Adverse Environmental
Condition(s) (the “Remediation Value”). Any Adverse Environmental Condition that is not identified in a properly and timely delivered Environmental Defects Notice shall thereafter be forever waived and expressly assumed by
Buyer. Sellers shall in good faith provide Buyer an Adverse Condition Notice at or before the Defect Notification Deadline of any claimed Adverse Environmental Condition, in each case together with, in reasonable detail, a description of
(a) Buyer’s Well, Buyer’s unit and/or Buyer’s Lease or Buyer’s Easement with respect to which such Adverse Environmental Condition(s) is claimed, (b) the nature of such claimed Adverse Environmental Condition(s) and
(c) Sellers’ proposed Remediation Value to remediate such claimed Adverse Environmental Condition(s). Any Adverse Environmental Condition that is not identified in a properly and timely delivered Environmental Defects Notice shall
thereafter be forever waived and expressly assumed by Sellers. 
 12.4. Determination of Adverse Environmental Conditions and Remediation
Values. 
 12.4.1. Within ten Business Days after a Party’s receipt of an Adverse Environmental Conditions Notice,
the notified Party shall notify the notifying Party as to whether they agree with the Adverse Environmental Condition claimed therein and/or the Remediation Value proposed to be required for remediation of such Adverse Environmental Condition. If
the Parties do not agree with any such claimed Adverse Environmental Condition and/or any such proposed Remediation Value, then the Parties shall promptly enter into good faith negotiations and shall attempt to agree on such matters. The value
agreed by the Parties with respect to an Adverse Environmental Condition shall be the Remediation Value for such Adverse Environmental Condition. 
 12.4.2. If the Parties cannot reach agreement concerning either the existence of an Adverse Environmental Condition or a Remediation Value therefor with respect to any Property or Buyer Property prior to Closing,
then, upon any Party’s written request, the Parties shall submit such dispute to a mutually acceptable environmental consultant or other consultant experienced in oil and gas producing property environmental remediation in the state in which
such Property or Buyer Property is located for prompt resolution; provided, however, that if at any time any consultant so chosen fails or refuses to perform hereunder, a new consultant shall be chosen by the Parties. The cost of any such consultant
shall be borne 50% by Sellers and 50% by Buyer. For any such dispute resolution process, Sellers and Buyer shall present a written statement of their respective positions on the dispute to the consultant within three Business Days after the
consultant is selected, and the consultant shall make a determination of all points of disagreement in accordance with the terms and conditions of this Agreement within ten Business Days of receipt of such statements. The determination by the
consultant shall be conclusive and binding on the Parties and shall be enforceable against any Party in any court of competent jurisdiction, and the value determined by the consultant with respect to an Adverse Environmental Condition shall be the
Remediation Value for such Adverse Environmental Condition. If necessary to complete such determination, the Closing Date shall be deferred until the consultant has made a determination of the disputed issues with respect thereto and all subsequent
dates and required activities having reference to the 

  

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Closing Date shall be correspondingly deferred; provided, however, that, unless the Parties mutually agree to the contrary, the Closing Date shall not be
deferred under this Section 12.4.2 in any event for more than ten Business Days. 
 12.4.3. Sellers shall have the
right, but not the obligation, to remediate any Adverse Environmental Condition affecting the Property at Sellers’ sole cost in accordance with applicable Environmental Laws. If Sellers elect to remediate an Adverse Environmental Condition, and
such remediation cannot be accomplished prior to the Closing Date, Sellers may notify Buyer of Sellers’ intention to diligently pursue and complete such remediation and to exercise all reasonable efforts and diligence to complete remediation
within 90 days of the Closing Date. In such event, the affected Property shall be withheld from the Closing on the Closing Date and the Allocated Value associated therewith shall be withheld from the Preliminary Net Purchase Price otherwise payable
by Buyer. On the date the final settlement of the Net Purchase Price adjustments is completed pursuant to Section 15.3, Sellers will accept, pay for in accordance with this Agreement and receive an assignment of any such Buyer’s
Properties as to which Buyer has remediated to Sellers’ reasonable satisfaction any Adverse Environmental Condition asserted prior to Closing. As to any such Buyer’s Properties still then subject to Adverse Environmental Conditions,
Sellers, at their sole option may (a) offer Buyer an extension of the remediation period on such terms and conditions as Sellers may, in their sole discretion, elect to impose and Buyer may accept or reject such extension; (b) waive the
unremediated Adverse Environmental Condition(s) and accept, pay for in accordance with this Agreement and receive an assignment of the affected Buyer’s Properties subject to such unremediated Adverse Environmental Condition(s); or
(c) eliminate the affected Buyer’s Properties from the purchase and sale transaction and retain the previously withheld portion of the Preliminary Purchase Price related to such Buyer’s Properties, or portion thereof, free and clear
of any claim by Buyer, and thereupon any and all rights of Sellers in or to such Buyer’s Properties shall terminate. During the post-Closing remediation period specified above (as the same may be extended) and through the date the affected
Buyer’s Properties are purchased and sold hereunder, with respect to any such Buyer’s Properties subject to Adverse Environmental Conditions that Buyer is attempting to cure, Buyer shall remain the record owner thereof and shall continue
to conduct its operations thereof or with respect thereto pursuant to the provisions of Article 7 and any other applicable provisions of this Agreement. 
 12.4.4. Buyer shall have the right, but not the obligation, to remediate any Adverse Environmental Condition affecting Buyer Property at
Buyer’s sole cost in accordance with applicable Environmental Laws. If Buyer elects to remediate an Adverse Environmental Condition, and such remediation cannot be accomplished prior to the Closing Date, Buyer may notify Sellers of Buyer’s
intention to diligently pursue and complete such remediation and to exercise all reasonable efforts and diligence to complete remediation within 90 days of the Closing Date. In such event, the affected Buyer’s Property shall be withheld from
the Closing on the Closing Date and the Allocated Value associated therewith shall be withheld from the Preliminary Net Purchase Price otherwise payable by Sellers. On the date the final settlement of the Net Purchase Price adjustments is completed
pursuant to Section 15.3, Sellers will accept, pay for in accordance with this Agreement and receive an assignment of any such 

  

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Buyer’s Properties as to which Buyer has remediated to Sellers reasonable satisfaction any Adverse Environmental Condition asserted prior to Closing. As
to any such Buyer’s Properties still then subject to Adverse Environmental Conditions, Sellers, at their option may (a) offer Buyer an extension of the remediation period on such terms and conditions as Sellers may, in their sole
discretion, elect to impose and Buyer may accept or reject such extension; (b) waive the unremediated Adverse Environmental Condition(s) and accept, pay for in accordance with this Agreement and receive an assignment of the affected
Buyer’s Properties subject to such unremediated Adverse Environmental Condition(s); or (c) eliminate the affected Buyer’s Properties from the purchase and sale transaction and retain the previously withheld portion of the Preliminary
Net Purchase Price related to such Buyer’s Properties, or portion thereof, free and clear of any claim by Sellers, and thereupon any and all rights of Sellers in or to such Buyer’s Properties shall terminate. During the post-Closing
remediation period specified above (as the same may be extended) and through the date the affected Buyer’s Properties are purchased and sold hereunder, with respect to any such Buyer’s Properties subject to Adverse Environmental Conditions
that Buyer is attempting to cure, a Buyer shall remain the record owner thereof and shall continue to conduct its operations thereof or with respect thereto pursuant to the provisions of Article 7 and any other applicable provisions of this
Agreement. 
 12.5. Exclusion of Properties Subject to Adverse Environmental Conditions. With respect to any Property subject to an
Adverse Environmental Condition, Sellers shall have the option (which must be exercised by written notice to Buyer at least five Business Days prior to Closing) to remove such Property from this Agreement, in which case the Purchase Price shall be
reduced by the Allocated Value of such Property. With respect to any Buyer Property subject to an Adverse Environmental Condition, Buyer shall have the option (which must be exercised by written notice to Sellers at least five Business Days prior to
Closing) to remove such Buyer Property from this Agreement, in which case Buyer’s Purchase Price shall be reduced by the Allocated Value of such Buyer Property. The removal of a Property or Buyer Property or portion thereof under this
Section 12.5 is referred to as a “Adverse Environmental Condition Removal”. 
 ARTICLE 13

 SUSPENSE FUNDS HELD BY SELLERS AND BUYER 
 13.1. Suspense Funds Held By Sellers. WITHIN 90 DAYS AFTER THE CLOSING, SELLERS SHALL PROVIDE TO BUYER A LISTING SHOWING ALL PROCEEDS FROM PRODUCTION ATTRIBUTABLE TO THE PROPERTIES THAT ARE CURRENTLY HELD IN
SUSPENSE WHICH ARE OWING TO THIRD PARTY OWNERS OF ROYALTY, OVERRIDING ROYALTY, WORKING OR OTHER INTERESTS IN RESPECT OF PAST PRODUCTION OF OIL, GAS OR OTHER HYDROCARBONS ATTRIBUTABLE TO THE PROPERTIES, AND SHALL TRANSFER TO BUYER ALL SUCH SUSPENDED
PROCEEDS (“BUYER’S SUSPENSE ACCOUNTS”). WITHIN 90 DAYS AFTER CLOSING, SELLERS WILL DELIVER TO BUYER, IN “EXCEL” FORMAT, THE OWNER NAME, OWNER NUMBER, SOCIAL SECURITY OR FEDERAL ID NUMBER, REASON FOR SUSPENSE, AND THE AMOUNT
OF SUSPENSE FUNDS PAYABLE FOR EACH ENTRY, TOGETHER WITH 

  

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MONTHLY LINE ITEM PRODUCTION DETAIL INCLUDING GROSS AND NET VOLUMES AND DEDUCTIONS FOR ALL SUSPENSE ENTRIES. UPON RECEIPT OF SUCH INFORMATION, BUYER SHALL
ADMINISTER ALL SUCH ACCOUNTS AND ASSUME ALL PAYMENT OBLIGATIONS RELATING TO THE SUSPENSE FUNDS IN ACCORDANCE WITH ALL APPLICABLE LAWS, RULES AND REGULATIONS, AND SHALL BE LIABLE FOR THE PAYMENT THEREOF TO THE PROPER PARTIES; PROVIDED THAT, UNTIL THE
FIRST ANNIVERSARY OF THE DATE THAT SELLERS PROVIDE TO BUYER THE INFORMATION REFERRED TO ABOVE, SELLERS WILL RETAIN ALL RESPONSIBILITY AND LIABILITY FOR (I) STATUTORY PENALTIES AND INTEREST, IF ANY, OWING TO ANY INTEREST OWNER ATTRIBUTABLE TO
THE SUSPENSE FUNDS ACCRUING PRIOR TO THE EFFECTIVE TIME AND (II) PENALTIES AND INTEREST, IF ANY, ATTRIBUTABLE TO THE SUSPENSE FUNDS ACCRUING PRIOR TO THE EFFECTIVE TIME, PAYABLE TO ANY STATE UNDER EXISTING ESCHEAT OR UNCLAIMED PROPERTY STATUTES. IN
THE EVENT BUYER DETERMINES PRIOR TO THE FIRST ANNIVERSARY OF THE DATE THAT SELLERS PROVIDE TO BUYER THE INFORMATION REFERRED TO ABOVE THAT ANY SUCH PENALTIES OR INTEREST ARE DUE TO THE RESPECTIVE SUSPENSE ACCOUNT OWNER OR ANY STATE UNDER SUCH
STATUTES AND SELLERS FAIL TO PROMPTLY REIMBURSE SUCH SUMS TO BUYER, THEN BUYER SHALL RETURN TO SELLERS THE SUSPENSE FUNDS IN SUCH ACCOUNT THAT EXISTED AS OF THE EFFECTIVE TIME, AND SELLERS SHALL THEREUPON ASSUME ALL OBLIGATIONS FOR THE FINAL PAYMENT
AND SETTLEMENT OF ANY SUCH CLAIMS AND ACCOMPANYING SUSPENSE FUNDS. 
 13.2. Suspense Funds Held By Buyer. WITHIN 90 DAYS AFTER THE
CLOSING, BUYER SHALL PROVIDE TO SELLERS A LISTING SHOWING ALL PROCEEDS FROM PRODUCTION ATTRIBUTABLE TO THE BUYER PROPERTIES THAT ARE CURRENTLY HELD IN SUSPENSE WHICH ARE OWING TO THIRD PARTY OWNERS OF ROYALTY, OVERRIDING ROYALTY, WORKING OR OTHER
INTERESTS IN RESPECT OF PAST PRODUCTION OF OIL, GAS OR OTHER HYDROCARBONS ATTRIBUTABLE TO BUYER’S PROPERTIES, AND SHALL TRANSFER TO SELLERS ALL SUCH SUSPENDED PROCEEDS (“SELLERS’ SUSPENSE ACCOUNTS”). WITHIN 90 DAYS AFTER CLOSING,
BUYER WILL DELIVER TO SELLERS, IN “EXCEL” FORMAT, THE OWNER NAME, OWNER NUMBER, SOCIAL SECURITY OR FEDERAL ID NUMBER, REASON FOR SUSPENSE, AND THE AMOUNT OF SUSPENSE FUNDS PAYABLE FOR EACH ENTRY, TOGETHER WITH MONTHLY LINE ITEM PRODUCTION
DETAIL INCLUDING GROSS AND NET VOLUMES AND DEDUCTIONS FOR ALL SUSPENSE ENTRIES. UPON RECEIPT OF SUCH INFORMATION, SELLERS SHALL ADMINISTER ALL SUCH ACCOUNTS AND ASSUME ALL PAYMENT OBLIGATIONS RELATING TO THE SUSPENSE FUNDS IN ACCORDANCE WITH ALL
APPLICABLE LAWS, RULES AND REGULATIONS, AND SHALL BE LIABLE FOR THE PAYMENT THEREOF TO THE PROPER PARTIES; PROVIDED THAT, UNTIL THE FIRST ANNIVERSARY OF THE DATE THAT BUYER PROVIDES TO BUYER THE INFORMATION REFERRED TO ABOVE, BUYER WILL RETAIN ALL
RESPONSIBILITY AND LIABILITY FOR (I) STATUTORY PENALTIES AND 

  

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INTEREST, IF ANY, OWING TO ANY INTEREST OWNER ATTRIBUTABLE TO THE SUSPENSE FUNDS ACCRUING PRIOR TO THE EFFECTIVE TIME AND (II) PENALTIES AND INTEREST, IF
ANY, ATTRIBUTABLE TO THE SUSPENSE FUNDS ACCRUING PRIOR TO THE EFFECTIVE TIME, PAYABLE TO ANY STATE UNDER EXISTING ESCHEAT OR UNCLAIMED PROPERTY STATUTES. IN THE EVENT SELLERS DETERMINE PRIOR TO THE FIRST ANNIVERSARY OF THE DATE THAT BUYER PROVIDES
TO SELLERS THE INFORMATION REFERRED TO ABOVE THAT ANY SUCH PENALTIES OR INTEREST ARE DUE TO THE RESPECTIVE SUSPENSE ACCOUNT OWNER OR ANY STATE UNDER SUCH STATUTES AND BUYER FAILS TO PROMPTLY REIMBURSE SUCH SUMS TO SELLERS, THEN SELLERS SHALL RETURN
TO BUYER THE SUSPENSE FUNDS IN SUCH ACCOUNT THAT EXISTED AS OF THE EFFECTIVE TIME, AND BUYER SHALL THEREUPON ASSUME ALL OBLIGATIONS FOR THE FINAL PAYMENT AND SETTLEMENT OF ANY SUCH CLAIMS AND ACCOMPANYING SUSPENSE FUNDS. 
 ARTICLE 14 
 CLOSING 

14.1. The Closing. The closing of the purchase and sale of the Properties pursuant to this Agreement (“Closing”) shall
be held in Houston, Texas at the Sellers’ offices at 700 Milam, Suite 3100, Houston, Texas 77002 on February 15, 2008 or such earlier date mutually agreed by the Parties (the “Closing Date”). 
 14.2. Closing Statement. Seller shall provide Buyer with a closing statement reflecting its good faith estimation of the Net Purchase Price, as
adjusted pursuant to Article 4, (the “Preliminary Net Purchase Price”) at least three Business Days prior to the Closing. 
 14.3. Closing Deliveries. At Closing the following events shall occur, each event under the control of one Party hereto being a condition precedent to the events under the control of the other Party, and each
event being deemed to have occurred simultaneously with the other events: 
 14.3.1. Sellers shall execute and deliver to
Buyer, and Buyer shall execute and receive, one or more instruments of assignment, in substantially the form of the Bill of Sale, Assignment and Assumption Agreement set forth as Exhibit C (“Assignment”); 

14.3.2. Buyer shall execute and deliver to Sellers, and Sellers shall execute and receive, one or more instruments of assignment, in
substantially the form of the Bill of Sale, Assignment and Assumption Agreement for Buyer’s Properties set forth as Exhibit C-1 (“Buyer’s Assignment”) 
 14.3.3. Buyer shall deliver via wire transfer to an account specified by Sellers, in immediately available funds, the Preliminary Net
Purchase Price and, if applicable, less the Buyer’s Liquidated Title Defect Payment, taking into account Seller’s Liquidated Title Defect Payments, if any; 
  

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 14.3.4. Sellers shall execute, acknowledge and deliver division orders, transfer orders
or letters in lieu thereof directing all purchasers of production from the Properties to make payment of proceeds attributable to such production occurring on or after the Effective Time to Buyer; 
 14.3.5. Buyer shall execute, acknowledge and deliver division orders, transfer orders or letters in lieu thereof directing all purchasers
of production from Buyer’s Properties to make payment of proceeds attributable to such production occurring on or after the Effective Time to Sellers; and 
 14.3.6. As to those Properties operated by a Seller or an affiliate, such Seller and Buyer shall execute all appropriate state or local
forms required to be executed to effect an assignment of operations and the administrative change of operator of such Properties from such Seller or affiliate to Buyer 
 14.3.7. As to those Properties operated by a Buyer or an affiliate, Buyer and the appropriate Seller shall execute all appropriate state
or local forms required to be executed to effect an assignment of operations and the administrative change of operator of such Properties from such Buyer or affiliate to such Seller. 
 ARTICLE 15 
 POST-CLOSING ADJUSTMENTS 
 15.1. Final Settlement Statement. After the Closing Date, Sellers shall prepare, in accordance with this Agreement and with GAAP, a statement
(“Final Settlement Statement”), a copy of which shall be delivered by Sellers to Buyer no later than 90 days after the Closing Date, setting forth each adjustment to the Purchase Price and Buyer’s Purchase Price
necessary to determine the Net Purchase Price and showing the calculation of such adjustments in accordance with GAAP and Article 4. Buyer shall have 60 days after receipt of the Final Settlement Statement to review such statement and to
provide written notice to Sellers of Buyer’s objection to any item on the statement. Buyer’s notice shall clearly identify the item(s) objected to and the reasons and support for the objection(s). If Buyer does not provide written
objection(s) within the 60-day period, the Final Settlement Statement shall be deemed correct and shall not be subject to further adjustment. If Buyer provides written objection(s) within the 60-day period, the Final Settlement Statement shall be
deemed correct with respect to the items not objected to. Buyer and Sellers shall meet to negotiate and resolve the objections within 15 days of Sellers’ receipt of Buyer’s objections. If the Parties agree on all objections the adjusted
Final Settlement Statement shall be deemed correct and shall not be subject to further adjustment. Any items not agreed to at the end of the 15-day period may, upon any Party’s written request, be resolved by arbitration in accordance with
Section 15.2. 
 15.2. Arbitration. If the Parties cannot agree upon the Final Settlement Statement, the dispute shall be
promptly submitted to a mutually agreeable third-party accountant, which shall act as an arbitrator and promptly decide all points of disagreement with respect to the Final Settlement Statement. The decision of such arbitrator on all such points
shall be final and binding upon the Parties and shall be enforceable against any Party in any court of competent jurisdiction. The costs and expenses of the such arbitrator shall be borne 50% by Sellers and 50% by Buyer. 
  

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 15.3. Payment of Final Net Purchase Price. If the Net Purchase Price shown on the Final Settlement
Statement is more than the Preliminary Net Purchase Price, Buyer shall pay such difference to Sellers in immediately available funds within five Business Days after the Final Settlement Statement has been agreed by the Parties or decided by the
arbitrator, as applicable. If the Net Purchase Price shown on the Final Settlement Statement is less than the Preliminary Purchase Net Price, Sellers shall pay such difference to Buyer in immediately available funds within five Business Days after
the Final Settlement Statement has been agreed by the Parties or decided by the arbitrator, as applicable. 
 ARTICLE 16 
 ALLOCATION OF RISK 
 16.1.
Sellers’ Indemnity. After Closing, each Seller shall indemnify and hold harmless Buyer Group from and against any and all Losses suffered by Buyer Group arising from or relating to: 
 16.1.1. any breach of any obligation expressly undertaken by such Seller in this Agreement which by its terms is required to be performed
after the Closing, with respect to which breach Buyer has delivered written notice thereof to such Seller within two years after Closing; 
 16.1.2. intentionally deleted; 
 16.1.3. the offsite disposal, prior to the Closing and
during such Seller’s ownership of the Properties, of hazardous materials arising from the operation or use of the Properties; and 
 16.1.4. any Losses in excess of an aggregate amount of $500,000 related to (a) the payment of any taxes related to the Properties or production therefrom accruing prior to the Effective Time, (b) the proper
payment or accounting for royalties or other lease burdens related to production from the Properties prior to the Effective Time, (c) any personal injuries (including death) or property damages claims arising out of the ownership or operation
of the Properties prior to the Effective Time, and (d) disputes related to the proper billing or payment of Joint Interest Billing Accounts related to ownership or operation of the Properties prior to the Effective Time; provided that with
respect to any such Losses or claims, Buyer has delivered written notice thereof to Sellers within two years after the Closing. 
 The matters for which
Sellers have the obligation to indemnify and hold harmless under this Section 16.1, to the extent of such obligation, are referred to herein as “Sellers’ Retained Liabilities.” 
 16.2. Survival of Sellers’ Representations and Warranties. Notwithstanding anything to the contrary contained herein, the representations and
warranties made by Sellers in this Agreement shall not survive Closing and shall not be actionable thereafter. 
  

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 16.3. Buyer’s Indemnity. After Closing, Buyer shall indemnify and hold harmless Sellers Group
from and against any and all Losses suffered by Sellers Group arising from or relating to: 
 16.3.1. any breach of any
obligation expressly undertaken by Buyer in this Agreement which by its terms is required to be performed after the Closing, with respect to which breach Sellerer has delivered written notice thereof to Buyer within two years after Closing;

 16.3.2. the litigation identified in Schedule 6.13; 
 16.3.3. the offsite disposal, prior to the Closing and during Buyer’s ownership of Buyer’s Properties, of hazardous materials
arising from the operation or use of Buyer’s Properties; and 
 16.3.4. any Losses in excess of an aggregate amount of
$500,000 related to (a) the payment of any taxes related to Buyer’s Properties or production therefrom accruing prior to the Effective Time, (b) the proper payment or accounting for royalties or other lease burdens related to
production from Buyer’s Properties prior to the Effective Time, (c) any personal injuries (including death) or property damages claims arising out of the ownership or operation of Buyer’s Properties prior to the Effective Time, and
(d) disputes related to the proper billing or payment of Joint Interest Billing Accounts related to ownership or operation of Buyer’s Properties prior to the Effective Time; provided that with respect to any such Losses or claims, Sellers
have delivered written notice thereof to Buyer within two years after the Closing. 
 The matters for which Buyer has the obligation to indemnify and hold
harmless under this Section 16, to the extent of such obligation, are referred to herein as “Buyer’s Retained Liabilities.” 
 16.4. Survival of Buyer’s Representations and Warranties. Notwithstanding anything to the contrary contained herein, the representations and warranties made by Buyer in this Agreement shall not survive
Closing and shall not be actionable thereafter. 
 16.5. Scope of Indemnity. 
 16.5.1. Except to the extent of Sellers’ Retained Liabilities, after Closing, Buyer shall indemnify and hold harmless Buyer Group
from and against any and all Losses suffered by Buyer Group relating to the ownership or operation of the Properties, whenever arising, whether before or after the Effective Time, including (a) accidents or injuries associated with the Wells,
the casings, and all other leasehold equipment in and on the Wells, gathering lines, pipelines, tanks and all other personal property and fixtures used on or in connection with the Properties, (b) all Adverse Environmental Conditions, including
any such conditions arising out of or relating to any discharge, release, production, storage, treatment or any activities on or in Sellers’ Properties, or the migration or transportation from any other lands to the Sellers’ Properties
(specifically excluding transportation and disposal by Buyer from the Sellers’ Properties to offsite locations prior to Closing), whether before or after the Effective Time, of materials or 

  

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substances that are at present, or become in the future, subject to regulation under federal, state or local laws or regulations, whether such laws or
regulations now exist or are hereafter enacted INCLUDING ANY LOSSES ARISING IN WHOLE OR IN PART FROM THE SOLE OR CONCURRENT NEGLIGENCE OR STRICT LIABILITY OF ANY MEMBER OF BUYER GROUP. BUYER HEREBY RELEASES BUYER GROUP FROM AND AGAINST ANY AND ALL
CLAIMS FOR CONTRIBUTION UNDER CERCLA AND/OR ANY OTHER PRESENT OR FUTURE ENVIRONMENTAL LAW. 
 16.5.2. Except to the extent of
Buyer’s Retained Liabilities, after Closing, Sellers shall indemnify and hold harmless Seller Group from and against any and all Losses suffered by Seller Group relating to the ownership or operation of Buyer’s Properties, whenever
arising, whether before or after the Effective Time, including (a) accidents or injuries associated with Buyer’s Wells, the casings, and all other leasehold equipment in and on Buyer’s Wells, gathering lines, pipelines, tanks and all
other personal property and fixtures used on or in connection with the Buyer’s Properties, (b) all Adverse Environmental Conditions, including any such conditions arising out of or relating to any discharge, release, production, storage,
treatment or any activities on or in Buyer’s Properties, or the migration or transportation from any other lands to the Buyer’s Properties (specifically excluding transportation and disposal by Sellers from the Buyer’s Properties to
offsite locations prior to Closing), whether before or after the Effective Time, of materials or substances that are at present, or become in the future, subject to regulation under federal, state or local laws or regulations, whether such laws or
regulations now exist or are hereafter enacted INCLUDING ANY LOSSES ARISING IN WHOLE OR IN PART FROM THE SOLE OR CONCURRENT NEGLIGENCE OR STRICT LIABILITY OF ANY MEMBER OF BUYER GROUP. BUYER HEREBY RELEASES BUYER GROUP FROM AND AGAINST ANY AND ALL
CLAIMS FOR CONTRIBUTION UNDER CERCLA AND/OR ANY OTHER PRESENT OR FUTURE ENVIRONMENTAL LAW. 
 16.6. Assumption by Buyer. Except to the
extent of Sellers’ Retained Liabilities, effective at Closing, Buyer hereby assumes and agrees to fully and timely pay, perform, and discharge in accordance with their terms, all duties, liabilities and obligations arising out of or otherwise
related to the Properties acquired by Buyer at Closing, whether vested, absolute or contingent, known or unknown, asserted or unasserted, accrued or unaccrued, liquidated or unliquidated, due or to become due, and whether contractual, statutory or
otherwise. 
 16.7. Assumption by Sellers. Except to the extent of Buyer’s Retained Liabilities, effective at Closing, Sellers
hereby assume and agree to fully and timely pay, perform, and discharge in accordance with their terms, all duties, liabilities and obligations arising out of or otherwise related to Buyer’s Properties acquired by Sellers at Closing, whether
vested, absolute or contingent, known or unknown, asserted or unasserted, accrued or unaccrued, liquidated or unliquidated, due or to become due, and whether contractual, statutory or otherwise. 
 16.8. Limitations of Sellers’ Warranties. Notwithstanding anything in this Agreement to the contrary, the Properties are being sold by
Sellers to Buyer without recourse, covenant, or warranty of any kind, express, implied, or statutory, except (i) to the extent of 

  

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Sellers’ Retained Liabilities and (ii) that Sellers will warrant title to the Net Revenue Interests and Working Interests in the Properties as set
forth in Exhibit B, subject to the Permitted Encumbrances, against every person whomsoever lawfully claiming or to claim the same or any part thereof by, through, or under Sellers, but not otherwise. WITHOUT LIMITATION OF THE GENERALITY OF
THE IMMEDIATELY PRECEDING SENTENCE, SELLERS CONVEY THE PROPERTIES AS-IS, WHERE-IS AND WITH ALL FAULTS AND EXPRESSLY DISCLAIM AND NEGATE ANY IMPLIED OR EXPRESS WARRANTY OF (A) MERCHANTABILITY, (B) FITNESS FOR A PARTICULAR PURPOSE,
(C) CONFORMITY TO MODELS OR SAMPLES OF MATERIALS AND (D) FREEDOM FROM REDHIBITORY VICES OR DEFECTS. SELLERS ALSO EXPRESSLY DISCLAIM AND NEGATE ANY IMPLIED OR EXPRESS WARRANTY AT COMMON LAW, BY STATUTE OR OTHERWISE RELATING TO THE ACCURACY
OF ANY OF THE INFORMATION FURNISHED WITH RESPECT TO THE EXISTENCE OR EXTENT OF RESERVES OR THE VALUE OF THE PROPERTIES BASED THEREON OR THE CONDITION OR STATE OF REPAIR OF ANY OF THE PROPERTIES; THIS DISCLAIMER AND DENIAL OF WARRANTY ALSO EXTENDS TO
THE EXPRESS OR IMPLIED REPRESENTATION OR WARRANTY AS TO THE PRICES BUYER AND SELLERS ARE OR WILL BE ENTITLED TO RECEIVE FROM PRODUCTION OF HYDROCARBONS FROM THE PROPERTIES, IT BEING UNDERSTOOD THAT ALL RESERVE, PRICE AND VALUE ESTIMATES UPON WHICH
BUYER HAS RELIED OR IS RELYING HAVE BEEN DERIVED BY THE INDIVIDUAL EVALUATION OF BUYER. BUYER HEREBY WAIVES ANY WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, WITH RESPECT TO THE ACCURACY, COMPLETENESS OR MATERIALITY OF THE INFORMATION, REPORTS,
PROJECTIONS, MATERIALS, RECORDS, AND DATA NOW, HERETOFORE, OR HEREAFTER FURNISHED OR MADE AVAILABLE TO BUYER IN CONNECTION WITH THE PROPERTIES OR THIS AGREEMENT (INCLUDING ANY DESCRIPTION OF THE PROPERTIES, WORKING INTERESTS OR NET REVENUE
INTERESTS, QUALITY OR QUANTITY OF HYDROCARBON RESERVES (IF ANY), PRODUCTION RATES, RECOMPLETION OPPORTUNITIES, DECLINE RATES, PRICING ASSUMPTIONS, ABILITY OR POTENTIAL FOR PRODUCTION OF HYDROCARBONS FROM THE LEASES, ENVIRONMENTAL CONDITION OF THE
PROPERTIES, OR ANY OTHER MATTERS CONTAINED IN ANY OTHER MATERIAL FURNISHED OR MADE AVAILABLE TO BUYER BY SELLERS OR BY SELLERS’ AGENTS OR REPRESENTATIVES). ANY AND ALL SUCH INFORMATION, REPORTS, PROJECTIONS, MATERIALS, RECORDS, AND DATA NOW,
HERETOFORE OR HEREAFTER FURNISHED BY SELLERS IS PROVIDED AS A CONVENIENCE ONLY AND ANY RELIANCE ON OR USE OF SAME IS AT BUYER’S SOLE RISK. WITH RESPECT TO THE EASEMENTS, SELLERS EXPRESSLY DISCLAIM, AND BUYER HEREBY WAIVES (BUT WITHOUT PREJUDICE
TO BUYER’S RIGHTS TO ENFORCE SELLERS’ SPECIAL WARRANTY OF TITLE WITH RESPECT THERETO TO BE CONTAINED IN THE ASSIGNMENT), ANY WARRANTIES AND REPRESENTATIONS THAT SELLERS OWN THE EASEMENTS; AND EXCEPT AS EXPRESSLY SET FORTH IN SECTION 5.5,
SELLERS DISCLAIM ALL WARRANTIES OR REPRESENTATIONS THAT SUCH EASEMENTS ARE IN FORCE AND EFFECT; THAT THEY MAY BE ASSIGNED; THAT THEY ARE CONTIGUOUS; THAT THE PIPELINES LIE WITHIN THE EASEMENTS, OR THAT THEY GRANT THE RIGHT TO LAY, MAINTAIN, REPAIR,

  

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REPLACE, OPERATE, CONSTRUCT, OR REMOVE ANY PIPELINES. If necessary, Buyer shall secure its own rights and permits to operate and maintain any pipelines or
Facilities comprising a portion of the Properties on the land of others at its own expense. If any consents or approvals of third parties, including any governmental body, are required to assign the surface leases, easements, rights-of-way, permits,
or other agreements with respect to the pipelines or facilities and are not secured prior to Closing, Buyer shall secure any necessary consents to assign and approvals at its own expense; provided, however, that Sellers shall provide such assistance
to Buyer to secure the consents and approvals as may reasonably be required. THERE ARE NO WARRANTIES THAT EXTEND BEYOND THE FACE OF THIS AGREEMENT. BUYER ACKNOWLEDGES THAT THIS WAIVER IS CONSPICUOUS. 
 16.9. Limitations of Buyer’s Warranties. Notwithstanding anything in this Agreement to the contrary, Buyer’s Properties are being sold
by Buyer to Sellers without recourse, covenant, or warranty of any kind, express, implied, or statutory, except (i) to the extent of Buyer’s Retained Liabilities and (ii) that Buyer will warrant title to the Net Revenue Interests and
Working Interests in Buyer’s Properties as set forth in Exhibit B, subject to the Permitted Encumbrances, against every person whomsoever lawfully claiming or to claim the same or any part thereof by, through, or under Buyer, but not
otherwise. WITHOUT LIMITATION OF THE GENERALITY OF THE IMMEDIATELY PRECEDING SENTENCE, BUYER CONVEYS BUYER’S PROPERTIES AS-IS, WHERE-IS AND WITH ALL FAULTS AND EXPRESSLY DISCLAIM AND NEGATE ANY IMPLIED OR EXPRESS WARRANTY OF
(A) MERCHANTABILITY, (B) FITNESS FOR A PARTICULAR PURPOSE, (C) CONFORMITY TO MODELS OR SAMPLES OF MATERIALS AND (D) FREEDOM FROM REDHIBITORY VICES OR DEFECTS. BUYER ALSO EXPRESSLY DISCLAIMS AND NEGATES ANY IMPLIED OR EXPRESS
WARRANTY AT COMMON LAW, BY STATUTE OR OTHERWISE RELATING TO THE ACCURACY OF ANY OF THE INFORMATION FURNISHED WITH RESPECT TO THE EXISTENCE OR EXTENT OF RESERVES OR THE VALUE OF THE BUYER’S PROPERTIES BASED THEREON OR THE CONDITION OR STATE OF
REPAIR OF ANY OF THE PROPERTIES; THIS DISCLAIMER AND DENIAL OF WARRANTY ALSO EXTENDS TO THE EXPRESS OR IMPLIED REPRESENTATION OR WARRANTY AS TO THE PRICES BUYER AND SELLERS ARE OR WILL BE ENTITLED TO RECEIVE FROM PRODUCTION OF HYDROCARBONS FROM THE
BUYER’S PROPERTIES, IT BEING UNDERSTOOD THAT ALL RESERVE, PRICE AND VALUE ESTIMATES UPON WHICH SELLERS HAVE RELIED OR ARE RELYING HAVE BEEN DERIVED BY THE INDIVIDUAL EVALUATION OF SELLERS. SELLERS HEREBY WAIVE ANY WARRANTY OR REPRESENTATION,
EXPRESS OR IMPLIED, WITH RESPECT TO THE ACCURACY, COMPLETENESS OR MATERIALITY OF THE INFORMATION, REPORTS, PROJECTIONS, MATERIALS, RECORDS, AND DATA NOW, HERETOFORE, OR HEREAFTER FURNISHED OR MADE AVAILABLE TO SELLERS IN CONNECTION WITH THE
BUYER’S PROPERTIES OR THIS AGREEMENT (INCLUDING ANY DESCRIPTION OF THE PROPERTIES, WORKING INTERESTS OR NET REVENUE INTERESTS, QUALITY OR QUANTITY OF HYDROCARBON RESERVES (IF ANY), PRODUCTION RATES, RECOMPLETION OPPORTUNITIES, DECLINE RATES,
PRICING ASSUMPTIONS, ABILITY OR POTENTIAL FOR PRODUCTION OF HYDROCARBONS FROM THE LEASES, ENVIRONMENTAL CONDITION OF THE BUYER’S PROPERTIES, OR ANY OTHER MATTERS CONTAINED IN ANY OTHER MATERIAL FURNISHED OR 

  

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MADE AVAILABLE TO SELLERS BY BUYER OR BY BUYER’S AGENTS OR REPRESENTATIVES). ANY AND ALL SUCH INFORMATION, REPORTS, PROJECTIONS, MATERIALS, RECORDS, AND
DATA NOW, HERETOFORE OR HEREAFTER FURNISHED BY BUYER IS PROVIDED AS A CONVENIENCE ONLY AND ANY RELIANCE ON OR USE OF SAME IS AT SELLERS’ SOLE RISK. WITH RESPECT TO THE EASEMENTS, BUYER EXPRESSLY DISCLAIMS, AND SELLERS HEREBY WAIVE (BUT WITHOUT
PREJUDICE TO SELLERS’ RIGHTS TO ENFORCE BUYER’S SPECIAL WARRANTY OF TITLE WITH RESPECT THERETO TO BE CONTAINED IN BUYER’S ASSIGNMENT), ANY WARRANTIES AND REPRESENTATIONS THAT BUYER OWNS THE EASEMENTS; AND EXCEPT AS EXPRESSLY SET FORTH
IN SECTION 6.12, BUYER DISCLAIMS ALL WARRANTIES OR REPRESENTATIONS THAT SUCH BUYER’S EASEMENTS ARE IN FORCE AND EFFECT; THAT THEY MAY BE ASSIGNED; THAT THEY ARE CONTIGUOUS; THAT THE PIPELINES LIE WITHIN THE BUYER’S EASEMENTS, OR THAT THEY
GRANT THE RIGHT TO LAY, MAINTAIN, REPAIR, REPLACE, OPERATE, CONSTRUCT, OR REMOVE ANY PIPELINES. If necessary, Sellers shall secure its own rights and permits to operate and maintain any pipelines or Buyer’s Facilities comprising a portion of
Buyer’s Properties on the land of others at its own expense. If any consents or approvals of third parties, including any governmental body, are required to assign Buyer’s surface leases, easements, rights-of-way, permits, or other
agreements with respect to the pipelines or facilities and are not secured prior to Closing, Sellers shall secure any necessary consents to assign and approvals at its own expense; provided, however, that Buyer shall provide such assistance to
Sellers to secure the consents and approvals as may reasonably be required. THERE ARE NO WARRANTIES THAT EXTEND BEYOND THE FACE OF THIS AGREEMENT. SELLERS ACKNOWLEDGE THAT THIS WAIVER IS CONSPICUOUS. 
 16.10. Gas Balancing. 
 16.10.1. The Parties recognize that as of the Effective Time there are over and under imbalances with respect to gas production or processing attributable to the Properties and hereby agree that the Properties acquired by Buyer at Closing
will be conveyed at Closing specifically subject to such imbalances, with Buyer bearing and assuming all obligations with respect to any overproduction account or liability associated with the Properties and receiving the benefit of and being
credited with any unproduction account or credit existing as of the Effective Time with respect to the Properties. The Parties agree that such overproduction accounts and liabilities are Permitted Encumbrances hereunder, and the existence of such
overproduction accounts or liabilities shall not constitute grounds for Buyer to assert that the Properties affected thereby are subject to any Title Defects. From and after the Closing, Buyer shall defend, save harmless and indemnify Sellers, their
respective successors and assigns, and their respective affiliates, directors, officers, stockholders and partners, as appropriate, from all Claims or Losses arising from such overproduction accounts and liabilities. 
 16.10.2. The Parties recognize that as of the Effective Time there are over and under imbalances with respect to gas production or
processing attributable to the Properties and hereby agree that Buyer’s Properties acquired by Sellers at Closing will be conveyed at Closing specifically subject to such imbalances, with Sellers bearing and 

  

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assuming all obligations with respect to any overproduction account or liability associated with Buyer’s Properties and receiving the benefit of and
being credited with any unproduction account or credit existing as of the Effective Time with respect to the Buyer’s Properties. The Parties agree that such overproduction accounts and liabilities are Permitted Encumbrances hereunder, and the
existence of such overproduction accounts or liabilities shall not constitute grounds for Sellers to assert that Buyer’s Properties affected thereby are subject to any Title Defects. From and after the Closing, Sellers shall defend, save
harmless and indemnify Buyer, its respective successors and assigns, and their respective affiliates, directors, officers, stockholders and partners, as appropriate, from all Claims or Losses arising from such overproduction accounts and liabilities
relating to Buyer’s Properties. 
 ARTICLE 17 
 RISK OF LOSS 
 17.1. Casualty Loss. 
 17.1.1. If, after the date hereof and prior to the Closing any substantial portion of the Properties shall be substantially damaged or
destroyed by fire or other casualty, or if any substantial portion of the Properties shall be taken by condemnation or the exercise of eminent domain (in either case, a “Casualty Loss”), Buyer shall be entitled to any
applicable insurance proceeds or condemnation awards and an adjustment to the Purchase Price based upon the Allocated Value of the Property destroyed or harmed, to the extent such loss is not covered by insurance or condemnation award; provided,
however, that if prior to Closing an event occurs, whether fire, other casualty or eminent domain, causing a loss (after taking into account insurance and indemnity proceeds) to the Property of more than ten percent (10%) of the Purchase Price,
any Party shall have the right to terminate this Agreement by delivery of written notice to the other Parties. 
 17.1.2. If,
after the date hereof and prior to the Closing any substantial portion of Buyer’s Properties shall be substantially damaged or destroyed by fire or other casualty, or if any substantial portion of Buyer’s Properties shall be taken by a
Casualty Loss, Sellers shall be entitled to any applicable insurance proceeds or condemnation awards and an adjustment to Buyer’s Purchase Price based upon the Allocated Value of the Buyer’s Property destroyed or harmed, to the extent such
loss is not covered by insurance or condemnation award; provided, however, that if prior to Closing an event occurs, whether fire, other casualty or eminent domain, causing a loss (after taking into account insurance and indemnity proceeds) to Buyer
Property of more than ten percent (10%) of the Buyer’s Purchase Price, either Party shall have the right to exclude all of Buyer’s Properties from this transaction; provided, that such exclusion shall not terminate this Agreement as
to the Properties. 
 17.2. Sellers’ and Buyer’s Risk of Loss. 
 17.2.1. Except as specifically provided in Section 17.1.1 with respect to any Casualty Loss, Buyer shall assume all risk of
loss with respect to any change in condition of the Properties from the Effective Time and no Seller shall have any liability, as operator of the Properties or otherwise, for losses or damages sustained with respect to the condition of the
Properties or their ability to produce Hydrocarbons. 
  

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 17.2.2. Except as specifically provided in Section 17.2.1 with respect to any
Casualty Loss, Sellers shall assume all risk of loss with respect to any change in condition of Buyer’s Properties from the Effective Time and Buyer shall have no liability, as operator of Buyer’s Properties or otherwise, for losses or
damages sustained with respect to the condition of Buyer’s Properties or their ability to produce Hydrocarbons. 
 ARTICLE 18 

 TERMINATION AND REMEDIES 
 18.1. Termination. This Agreement may be terminated as provided below. 
 18.1.1. The Parties may terminate
this Agreement by mutual written consent at any time prior to the Closing Date. 
 18.1.2. If the transactions contemplated
hereby do not close on or before February 22, 2008, any Party may terminate this Agreement by delivery of written notice to the other Parties; provided, however, that no Party may terminate this Agreement pursuant to this
Section 18.1.2 if such Party’s failure to comply with its obligations under this Agreement caused the Closing not to occur on or before the Closing Date. 
 18.1.3. Buyer may terminate this Agreement by delivery of written notice to Sellers at any time prior to the Closing Date if, as of the
Closing Date, any Seller has breached any representation, warranty or covenant in this Agreement in any material respect and such Seller has failed to cure such breach within a reasonable time period after receiving written notice of such breach.

 18.1.4. Sellers may terminate this Agreement by delivery of written notice to Buyer at any time prior to the Closing Date
if Buyer has breached any representation, warranty or covenant in this Agreement in any material respect and Buyer has failed to cure such breach within a reasonable time period after receiving written notice of such breach. 
 18.1.5. Either Party may terminate this Agreement in accordance with Article 17. 
 18.1.6. Any Party may terminate this Agreement by delivery of written notice to the other Parties if the aggregate of (a) the Uncured
Title Defects Value plus (b) the Liquidated Title Defect Payment plus (c) the aggregate reduction in the Purchase Price pursuant to Title Defect Removals plus (d) the Unremedied Adverse Environmental Conditions Value plus (e) the
aggregate reduction in Purchase Price pursuant to Adverse Environmental Condition Removals exceeds ten percent (10%) of the Purchase Price. 
 18.2. Effect of Termination. Each Party’s right of termination under Section 18.1 is in addition to any other rights it may have under this Agreement or otherwise, and the exercise of such right of termination will not be
an election of remedies. If this Agreement is terminated 

  

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pursuant to Section 18.1, all obligations of the Parties under this Agreement will terminate, except that Buyer’s indemnity obligations
under Section 7.2, and the obligations of the Parties in this Section 18.2 and Article 21, will survive; provided, however, that if this Agreement is terminated because of a breach of this Agreement by the
nonterminating Party or because the any Party’s condition to Closing is not satisfied as a result of the nonterminating Party’s failure to comply with its obligations under this Agreement, the terminating Party’s or Parties’
rights to pursue all legal remedies will survive such termination unimpaired. 
 18.3. Remedies. 
 18.3.1. Buyer and Sellers acknowledge and agree that Sellers or Buyer would be irreparably damaged if any of the provisions of this
Agreement are not performed in accordance with their specific terms and that any breach of this Agreement by the other party could not be adequately compensated in all cases by monetary damages alone. Accordingly, in addition to any other right or
remedy to which Sellers and Buyer may be entitled, at law or in equity, they shall be entitled to enforce any provision of this Agreement by a decree of specific performance. 
 18.3.2. The rights and remedies of the Parties are cumulative and not alternative. 
 ARTICLE 19 
 ADDITIONAL COVENANTS

 19.1. Further Assurances. After the Closing, each Seller and Buyer shall execute, acknowledge and deliver or cause to be
executed, acknowledged and delivered such instruments and take such other action as may be necessary or advisable to carry out their respective obligations under this Agreement and under any exhibit, document, certificate or other instrument
delivered pursuant hereto. Each Seller shall use commercially reasonable efforts to cooperate with Buyer’s efforts to obtain all approvals and consents required by or necessary for the transactions contemplated by this Agreement that are
customarily obtained after Closing. Without limiting the foregoing, Buyer and Sellers shall use all reasonable good faith efforts to cooperate with one another in the prosecution, defense and/or settlement of the litigation matters set forth on
Schedule 5.6, including by the taking of the actions specified thereon under the heading “Litigation Protocols”. 
 19.2.
Access to Records. 
 19.2.1. Within 30 days after Closing, each Seller shall deliver to Buyer, at Sellers’
address, or at such other place as any of same may be kept, the originals of all Records and Data, except that each Seller may retain (a) the originals of all Data which are related to properties other than the Properties being sold herein, in
which case such Seller shall deliver duplicate copies of any such retained originals to Buyer, and (b) the originals of all accounting Data, in which case such Seller shall deliver duplicate copies of any such retained originals which relate to
the Properties to Buyer. For a period of four (4) years after the date of Closing, Buyer will retain the Data delivered to it pursuant hereto and will make such Data available to each Seller upon reasonable notice at Buyer’s headquarters
at reasonable times and during office hours. Buyer shall notify each Seller 

  

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in writing within thirty (30) days of the sale to a third party of all or any part of the Properties which involves the transfer of any of the Data of
the name and address of the buyer(s) in any such sale. Buyer shall require as part of any such sales transaction that such third party assume the obligations imposed on Buyer in this Section 19.2.1. 
 19.2.2. Within 30 days after Closing, each Buyer shall deliver to Sellers, at Buyer’s address, or at such other place as any of same
may be kept, the originals of all Records and Data, except that Buyer may retain (a) the originals of all Data which are related to properties other than Buyer’s Properties being sold herein, in which case such Buyer shall deliver
duplicate copies of any such retained originals to Seller, and (b) the originals of all accounting Data, in which case Buyer shall deliver duplicate copies of any such retained originals which relate to Buyer’s Properties to Sellers. For a
period of four (4) years after the date of Closing, Sellers will retain the Data delivered to it pursuant hereto and will make such Data available to Buyer upon reasonable notice at Sellers’ headquarters at reasonable times and during
office hours. Sellers shall notify Buyer in writing within thirty (30) days of the sale to a third party of all or any part of Buyer’s Properties which involves the transfer of any of the Data of the name and address of the buyer(s) in any
such sale. Sellers shall require as part of any such sales transaction that such third party assume the obligations imposed on Sellers in this Section 19.2.2. 
 19.3. Use of Sellers’ Name. Buyer agrees that, as soon as practicable after the Closing, it will remove or cause to be removed the names and marks “Pogo Producing Company LLC” and [POGO
Subsidiary] and all variations and derivatives thereof and logos relating thereto from the Properties of which it has assumed operations and will not thereafter make any use whatsoever of such names, marks and logos. 
 19.4. Use of Buyer’s Name. Sellers agree that, as soon as practicable after the Closing, it will remove or cause to be removed the names and
marks of Buyer and all variations and derivatives thereof and logos relating thereto from Buyer’s Properties of which they have assumed operations and will not thereafter make any use whatsoever of such names, marks and logos. 
 19.5. Employees. 
 19.5.1. For a period 18 months after the Closing, neither Buyer nor any of its affiliates shall hire, retain or attempt to hire or retain any employee or independent contractor of any Seller or in any way interfere with the relationship
between any Seller and any of its employees or independent contractors; provided that, this provision shall not apply in the event such employee or contractor contacts Buyer in response to an advertisement identifying employment opportunities
published by Buyer in a newspaper of general circulation or on its web site. Buyer shall be permitted to contact any of Sellers’ independent contractors whose services relate to the Properties to discuss post-Closing services. 
 19.5.2. For a period of 18 months after the Closing, neither Sellers nor any of their affiliates shall hire, retain or attempt to hire or
retain any employee or independent contractor of any Buyer or in any way interfere with the relationship between Buyer and 

  

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any of its employees or independent contractors; provided that, this provision shall not apply in the event such employee or contractor contacts Sellers in
response to an advertisement identifying employment opportunities published by Sellers in a newspaper of general circulation or on its web site. Sellers shall be permitted to contact any of Buyer’s independent contractors whose services relate
to Buyer’s Properties to discuss post-Closing services. 
 ARTICLE 20 
 ARBITRATION 
 Except as elsewhere provided in this Agreement, any controversy,
dispute or claim between the Parties arising under this Agreement shall be determined by binding arbitration, the conduct of which shall be governed by the Commercial Arbitration Rules of the American Arbitration Association. 
 20.1. Determination. The arbitrators selected to act hereunder under the Commercial Arbitration Rules of the American Arbitration Association
shall be qualified by education and experience to pass on the particular question in dispute. The arbitrators shall promptly hear and determine (after due notice of hearing and giving the parties a reasonable opportunity to be heard) the questions
submitted, and shall render their decision within 60 days after appointment of the third arbitrator. The arbitration shall be held in Houston, Texas. If within such period a decision is not rendered by the board, or majority thereof, new arbitrators
may be named and shall act hereunder at the election of either Buyer or Sellers in like manner as if none had been previously named. 
 20.2.
Decision Binding. The decision of the arbitrators, or the majority thereof, made in writing shall be final and binding upon the Parties as to the questions submitted, shall be enforceable against any Party in any court of competent
jurisdiction, and Buyer and Sellers will abide by and comply with such decision. The expenses of arbitration, including reasonable compensation to the arbitrators, shall be borne equally by the Parties. 
 ARTICLE 21 
 MISCELLANEOUS

 21.1. Notice. All notices required or permitted under this Agreement shall be in writing and shall be delivered personally,
overnight delivery service or by certified mail, postage prepaid and return receipt requested or by telecopier as follows: 
  

					
	 Sellers:            
	  	Pogo Producing Company LLC
		  	Pogo Producing (San Juan) Company
		  	Pogo Partners Inc.
		  	700 Milam, Suite 3100
		  	Houston, Texas 77002
		  	 Attention:
	  	Marc A. Hensel
		  	Vice President – Acquisitions and Divestments
		  	Telephone:	  	(713) 579-6033
		  	 Telecopier:
	  	(713) 579-6200

  

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	 with a copy to:
	  		  	
		
		  	Plains Exploration & Production Company
		  	700 Milam, Suite 3100
		  	Houston, Texas 77002
		  	Attention:	  	John F. Wombwell
		  		  	Executive Vice President,
		  		  	General Counsel and Corporate Secretary
		  	Telephone:	  	(713) 579-6123
		  	Telecopier:	  	(713) 579-6200
			
	with a copy to:	  		  	
		
		  	David Patton
		  	Locke Lord Bissell & Liddell LLP
		  	600 Travis Street, Suite 3400
		  	Houston, Texas 77002-3095
		
	Buyer:	  	XTO Energy Inc.
		  	810 Houston St.
		  	Fort Worth, Texas 76102
		  	Attention:	  	Vaughn O. Vennerberg, II
		  	Sr. Vice President & Chief of Staff
		  	Telephone:	  	(817) 885-2341
		  	Telecopier:	  	(817) 885-2224
			
	with a copy to:	  		  	
		
		  	Warren Ludlow
		  	Associate General Counsel
		  	XTO Energy Inc.
		  	Fort Worth, Texas 76102

 or to such other place within the United State of America as either Party may designate as to itself by written
notice to the other. All notices given by personal delivery, overnight delivery service or mail shall be effective on the date of actual receipt at the appropriate address. Notices given by telecopier shall be effective upon actual receipt if
received during recipient’s normal business hours or at the beginning of the next Business Day after receipt if received after the recipient’s normal business hours. All notices by telecopier shall be confirmed in writing on the day of
transmission by either mailing by postage prepaid certified mail with return receipt requested, overnight delivery service, or by personal delivery. 
 21.2. Governing Law. This Agreement and the obligations of the Parties hereunder will be governed by and construed in accordance with the laws of the State of Texas, without giving effect to any choice of law
principles. 
  

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 21.3. Assignment. This Agreement shall be binding upon and shall inure to the benefit of the
Parties hereto and their respective permitted successors and assigns. Notwithstanding the preceding sentence, neither Party shall assign this Agreement or its rights hereunder without the other Party’s written consent, which shall not be
unreasonably withheld. 
 21.4. Entire Agreement. This Agreement, together with the Exhibits and Schedules hereto and
the certificates, documents, instruments and writings that are delivered pursuant hereto, constitutes the entire agreement and understanding of the Parties in respect of its subject matters and supersedes all prior understandings, agreements, or
representations by or among the Parties, written or oral, to the extent they relate in any way to the subject matter hereof or the Transactions, including the non-disclosure/non-solicitation agreement between Sellers and Buyer dated
November 29, 2007 (the “Confidentiality Agreement”); provided, however, the Parties acknowledge and agree that since the Exhibits and Schedules attached to this Agreement at the time of execution of this Agreement are
not complete and accurate in all respects, the Parties will endeavor in good faith to complete and attach mutually acceptable complete and accurate Exhibits and Schedules to this Agreement on before January 4, 2007. There are no third party
beneficiaries having rights under or with respect to this Agreement. 
 21.5. Amendment; Waiver. No amendment, modification,
replacement, termination or cancellation of any provision of this Agreement will be valid, unless the same will be in writing and signed by Buyer and Sellers. No waiver by any Party of any default, misrepresentation or breach of warranty or covenant
hereunder, whether intentional or not, may be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising because of any prior or subsequent such
occurrence. 
 21.6. Severability. The provisions of this Agreement will be deemed severable and the invalidity or unenforceability of
any provision will not affect the validity or enforceability of the other provisions hereof; provided, however, that if any provision of this Agreement, as applied to any Party or to any circumstance, is adjudged by a court of competent
jurisdiction, arbitrator, or mediator not to be enforceable in accordance with its terms, the Parties agree that the court of competent jurisdiction, arbitrator, or mediator making such determination will have the power to modify the provision in a
manner consistent with its objectives such that it is enforceable, and/or to delete specific words or phrases, and in its reduced form, such provision will then be enforceable and will be enforced. 
 21.7. Construction. The Parties have participated jointly in the negotiation and drafting of this Agreement. If an ambiguity or question of intent
or interpretation arises, this Agreement will be construed as if drafted jointly by the Parties and no presumption or burden of proof will arise favoring or disfavoring any Party because of the authorship of any provision of this Agreement. Any
reference to any federal, state, local, or foreign law will be deemed also to refer to such law as amended and all rules and regulations promulgated thereunder, unless the context requires otherwise. The words “include,”
“includes” and “including” will be deemed to be followed by “without limitation.” Pronouns in masculine, feminine, and neutral genders will be construed to include any other gender, and words in the singular form will
be construed to include the plural and vice versa, unless the context otherwise requires. The words “this Agreement,” “herein,” “hereof,” “hereby,” “hereunder” and words of similar import refer to
this 

  

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Agreement as a whole and not to any particular subdivision unless expressly so limited. The Exhibits and Schedules identified in this Agreement
are incorporated herein by reference and made a part hereof. References herein to any Section or Article shall be references to a Section or Article of this Agreement unless the context clearly requires otherwise.

 21.8. Confidentiality. All information made available to Buyer by Sellers, or to Sellers by Buyer, respectively, pursuant to this
Agreement shall be maintained as confidential by the receiving Party until Closing. Buyer shall remain subject, until the Closing, to the Confidentiality Agreement, at which time of Closing such Confidentiality Agreement shall terminate. Buyer and
Sellers shall take all actions reasonably necessary to ensure that Buyer’s and Sellers’ respective employees, consultants, representatives and agents comply with the provisions of this Section 21.8. 
 21.9. Headings. The article and section headings contained in this Agreement are inserted for convenience only and will not affect in any way the
meaning or interpretation of this Agreement. 
 21.10. Counterparts. This Agreement may be executed in two or more counterparts, each
of which will be deemed an original but all of which together will constitute one and the same instrument. 
 21.11. Expenses, Fees and
Taxes. Each of the Parties hereto shall pay its own fees and expenses incident to the negotiation and preparation of this Agreement and consummation of the transactions contemplated hereby, including brokers’ fees. Buyer shall be
responsible for the cost of all fees for the recording of transfer documents relating to the Properties, and Sellers’ shall be responsible for the cost of all fees for the recording of the transfer documents relating to Buyer’s Properties.
All other costs shall be borne by the Party incurring them. Notwithstanding anything to the contrary herein, it is acknowledged and agreed by and between Sellers and Buyer that the Purchase Price excludes any sales taxes or other taxes in connection
with the sale of property pursuant to this Agreement. If a determination is ever made that a sales tax or other transfer tax applies, Buyer shall be liable for such tax as well as any applicable conveyance, transfer and recording fees, and real
estate transfer stamps or taxes imposed on any transfer of the Properties pursuant to this Agreement, and Sellers shall be liable for such tax as well as any applicable conveyance, transfer and recording fees, and real estate transfer stamps or
taxes imposed on any transfer of the Buyer’s Properties pursuant to this Agreement. Buyer and Seller, respectively, shall indemnify and hold the other Party, harmless with respect to the payment of any of such taxes, including any interest or
penalties assessed thereon. The indemnity and hold harmless obligation contained in the preceding sentence shall survive the Closing. 
 21.12. Laws and Regulations. 
 21.12.1. From and after the Closing, (a) Buyer shall comply with all
applicable laws, ordinances, rules and regulations and shall properly obtain and maintain all permits required by public authorities with regard to the Properties, and shall provide and maintain with the applicable regulatory agency(ies) all
required bonds, and (b) Buyer shall assume all of each Seller’s obligations with regard to abandonment of all existing unplugged wells, whether producing or nonproducing, and abandonment of the leasehold 

  

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property including, where applicable, the plugging of wells and the restoration of the surface as completely as practicable and/or in compliance with all
applicable laws, rules, regulations and in compliance with all leases and other agreements affecting the Properties, and shall indemnify and hold each Seller harmless with respect to any and all of those obligations. Such obligations shall survive
the Closing and Buyer shall remain liable therefor as regards Sellers even if Buyer shall assign, sell or transfer the Properties to a third party. 
 21.12.2. From and after the Closing, (a) Sellers shall comply with all applicable laws, ordinances, rules and regulations and shall properly obtain and maintain all permits required by public authorities with
regard to the Buyer’s Properties, and shall provide and maintain with the applicable regulatory agency(ies) all required bonds, and (b) Sellers shall assume all of Buyer’s obligations with regard to abandonment of all existing
unplugged wells, whether producing or nonproducing, and abandonment of the leasehold property including, where applicable, the plugging of wells and the restoration of the surface as completely as practicable and/or in compliance with all applicable
laws, rules, regulations and in compliance with all leases and other agreements affecting the Buyer’s Properties, and shall indemnify and hold Buyer harmless with respect to any and all of those obligations. Such obligations shall survive the
Closing and Sellers shall remain liable therefore as regards Buyer even if Sellers shall assign, sell or transfer the Buyer’s Properties to a third party. 
 21.13. Tax-Deferred Exchange Option. Each Seller and Buyer, respectively, shall have the right to elect to effect a tax-deferred exchange under Internal Revenue Code Section 1031 (a “Tax
Deferred Exchange”) for the Properties and the Buyer’s Properties at any time prior to the Closing Date. If such Party elects to effect a Tax-Deferred Exchange, the other Party agrees to execute escrow instructions, documents,
agreements or instruments to effect the exchange; provided, however, that the other Party shall incur no additional costs, expenses, fees or liabilities as a result of or connected with the exchange. Each Seller and Buyer, as the case may be, may
assign any of its rights and delegate performance of any of their duties under this Agreement in whole or in part to a third party in order to effect such an exchange; provided, however, that each such Seller and/or Buyer shall remain responsible to
the other Party for the full and prompt performance of their respective delegated duties. The electing Party shall indemnify and hold the other Party and its affiliates harmless from and against all claims, expenses (including reasonable
attorneys’ fees), loss and liability resulting from its participation in any exchange undertaken pursuant to this Section 21.13 pursuant to the request of the electing Party. 
 21.14. Pre-Closing Like-Kind Exchange Option. With respect to a portion of the Properties, prior to Closing Sellers and Buyer shall effect a
like-kind exchange under Internal Revenue Code 1031 (a “Like-Kind Exchange”) in which Buyer accepts certain of the Properties and in which Sellers accept Buyer’s Properties pursuant to an Exchange Agreement to be negotiated between
the Parties on or before January 4, 2008. 
 21.15. Public Announcements. The Parties agree that prior to making any public
announcement or statement with respect to the transactions contemplated by this Agreement, the Party desiring to make such public announcement or statement shall consult with the other 

  

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Parties hereto and endeavor in good faith to obtain approval of the other Parties hereto to the text of a public announcement or statement to be made solely
by Sellers, on the one hand, or Buyer, on the other, as the case may be; provided, however, if Sellers, on the one hand, or Buyer, on the other is required by law or the rules of the New York Stock Exchange to make such public announcement or
statement, then the same may be made without the approval of the other Parties. 
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 Executed as of the date set forth above. 
  

			
	 SELLERS:

	
	POGO PRODUCING COMPANY, LLC
	
	POGO PRODUCING (SAN JUAN) COMPANY
	
	POGO PARTNERS INC.
		
	 By:
	 	 /s/ Doss R. Bourgeois

		 	Doss R. Bourgeois
		 	Vice President
		
	 BUYER:
	 	
	
	XTO Energy Inc.
		
	 By:
	 	 /s/ Vaughn O. Vennerberg, II

		 	Vaughn O. Vennerberg, II
		 	Senior Executive Vice President & Chief of Staff


  

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