THIS OPTION HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE OPTIONEE WILL NOT TRANSFER THIS OPTION OR THE UNDERLYING COMMON SHARES UNLESS
(I) THERE IS AN EFFECTIVE REGISTRATION COVERING SUCH OPTION OR SUCH SHARES, AS THE CASE MAY BE, UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS, (II) AMERICAN EAGLE ENERGY INC. FIRST RECEIVES A LETTER FROM AN ATTORNEY, ACCEPTABLE
TO IT, STATING THAT, IN THE OPINION OF THE ATTORNEY, THE PROPOSED TRANSFER IS EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND UNDER ALL APPLICABLE STATE SECURITIES LAWS, OR (III) THE TRANSFER IS MADE PURSUANT TO RULE 144 UNDER THE
SECURITIES ACT OF 1933, AS AMENDED.


NON-QUALIFIED STOCK OPTION AGREEMENT


THIS STOCK OPTION
AGREEMENT (the “Agreement”) is made and entered into effective as of the 30th day of December, 2010 (the
“Effective Date”), by and between American Eagle Energy Inc., a Nevada corporation (“AMZG”),
and Bradley Colby (the “Optionee”).


1.Recitals.
The Optionee has determined that to provide certain assets (the “Assets”) to AMZG, in respect of which he has
legal or beneficial ownership rights. In connection therewith, AMZG has determined to grant to the Optionee the option to purchase
that number of shares of its common stock on the terms and conditions set forth herein.


2.Shares
Subject to Option. As of the Effective Date, AMZG hereby grants to the Optionee the option (“Option”) to
purchase two hundred sixty-seven thousand seven hundred thirty (267,730) shares of AMZG’s common stock (the “Optioned
Shares”), at the price set forth in the Paragraph of this Agreement entitled “Exercise Price” (the “Exercise
Price”), subject to the terms and conditions and within the period of time set forth in this Agreement. This Option is
intended to be a non-statutory, non-qualified stock option which does not qualify as an “incentive stock option”
under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”).


3.Term.
This Agreement and the Option granted hereunder shall expire at 6:00 p.m. Mountain Time on the fifth anniversary of the Effective
Date. If all or any portion of this Option is unexercised upon the expiration of this Agreement, then, to that extent, this Option
shall be deemed to have been forfeited and of no further force or effect.


4.Vesting.
Upon the execution and delivery of this Agreement by AMZG, the Option granted hereunder shall be fully and immediately exercisable
in whole or in part at any time and from time to time and shall be fully vested, subject to any contrary terms in connection with
the agreement pursuant to which the Optionee provided the Assets to AMZG.


5.Exercise
Price. Subject to the provisions of Paragraph 4, above, and to adjustment in the manner provided below, the exercise price
for each Optioned Share shall be forty US Cents (USD$0.40).


6.Method
of Exercise. This Option shall be deemed to be exercised when written notice identifying the number of Optioned Shares as to
which this Option is then being exercised has been provided to AMZG in accordance with the terms of this Option and full payment
for the Optioned Shares with respect to which the Option is exercised has been received by AMZG. Upon the exercise of this Option
in whole or in part and payment of the Exercise Price in the manner provided by this Agreement, AMZG shall, as soon thereafter
as practicable, deliver to the Optionee a certificate or certificates for the shares purchased. The Exercise Price for the Optioned
Shares to be purchased upon the exercise of the Option may be paid (i) in cash or cash equivalents, (ii) by delivery (by either
actual delivery or attestation) of AMZG shares of its common stock already owned by the Optionee, having a Fair Market Value, defined
below, on the date of exercise less than (with the balance paid in cash or cash equivalents) or equal to the aggregate Exercise
Price for the purchased shares, (iii) to the extent permitted by law, by a “cashless exercise” procedure approved by
AMZG in the exercise of its reasonable discretion, or (iv) by a combination of the foregoing methods. The term “Fair Market
Value” for shares of AMZG’s common stock on any particular date shall mean the last reported sale price of the common
stock on the principal market on which the common stock trades on such date or, if no trades of common stock are made or reported
on such date, then on the next preceding date on which the common stock traded. If AMZG’s common stock ceases to be traded
on any market, the Optionee and the Board of Directors of AMZG shall mutually agree upon an alternative method of determining the
Fair Market Value for shares of AMZG’s common stock.



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7.Withholding.
AMZG may, in its discretion, require that the Optionee pay to it at or after the time of the exercise of any portion of this Option
any such additional amount as AMZG deems necessary, in the exercise of its reasonable discretion, to satisfy its liability to withhold
federal, state, or local income tax or any other tax incurred by reason of the exercise of this Option. The Optionee may satisfy
this requirement by (i) tendering to AMZG shares of AMZG’s common stock already owned by the Optionee, which, in the case
of shares of common stock purchased by the Optionee pursuant to the exercise of an option granted by AMZG, have been held by the
Optionee for at least six months following the date of such purchase or (ii) by electing to have AMZG withhold from delivery Optioned
Shares, provided that, in either case, such shares have a Fair Market Value equal to the minimum amount of tax required to be withheld.
Such shares shall be valued on the date as of which the amount of tax to be withheld is determined. Fractional share amounts shall
be settled in cash. Such election may be made with respect to all or any portion of the Optioned Shares to be delivered pursuant
to exercise of this Option.


8.Adjustment
of Optioned Shares. In the event that there is any stock dividend, stock split, reverse stock split, combination,
reclassification, reorganization, recapitalization, merger, consolidation, split-up, spin-off, combination, repurchase, or
exchange of common stock or other securities of AMZG, issuance of warrants or other rights to purchase common stock or other
securities of  AMZG, or other similar corporate
transaction or events that affect the common stock of AMZG such that an adjustment is necessary to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available pursuant to this Option, then the number of
unexercised Optioned Shares subject to this Option and the exercise price per share of such Optioned Shares shall be
proportionately adjusted.


9.Option
Non-Transferable. This Option shall not be transferable other than by will or the laws of descent and distribution and this
Option shall be exercisable during the Optionee’s lifetime only by the Optionee or his guardian or legal representative.
Any purported assignment of this Option, or of any right or privilege conferred hereunder, contrary to the provisions hereof shall
be null and void.


10.Laws
and Regulations. No shares of common stock shall be issued under this Option unless and until all legal requirements applicable
to the issuance of such shares have been complied with to the satisfaction of AMZG in the exercise of its reasonable discretion.


11.Rights
in Stock Before Issuance and Delivery. The Optionee shall not be entitled to the privileges of stock ownership in respect of
any shares issuable upon exercise of this Option, unless and until such shares have been issued to the Optionee by AMZG. Except
as provided in this Agreement, no adjustment shall be made in the number of shares of common stock issued to the Optionee or in
any other rights of the Optionee upon exercise of this Option by reason of any dividend (other than a stock dividend), distribution,
or other right granted to the AMZG’s stockholders for which the record date is prior to the date of exercise of this Option.



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12.Tax
Consequences.


12.1Section
409A. This Option is intended to meet the requirements of Internal Revenue Code Section 409A and the Treasury Regulations promulgated
thereunder. If the Option contained in this Agreement is determined to be taxable to the Optionee and/or to AMZG, then AMZG, after
consultation with the Optionee, shall have the authority to adopt, prospectively or retroactively, such amendments to this Agreement
that AMZG determines in its reasonable discretion to be appropriate to: (i) exempt the transactions contemplated under this Agreement
from Section 409A; (ii) make this Agreement comply with the requirements of Section 409A; or (iii) avoid more generally the
adverse tax consequences of Section 409A as it applies to this Agreement.


12.2Other Tax
Consequences. Except as otherwise provided in this Agreement, the Optionee acknowledges that AMZG has not made any representations
or warranties to the Optionee with respect to the tax consequences related to the transactions contemplated in this Agreement,
and the Optionee is in no manner relying on AMZG or its representatives for an assessment of such tax consequences. The Optionee
acknowledges that (i) there may be adverse tax consequences upon acquisition or disposition of this Option or the Shares subject
to this Option, (ii) that AMZG has no responsibility to the Optionee to ensure any particular tax result, and (iii) that the
Optionee should consult his own tax advisor prior to acquisition, exercise, or disposition of this Option, the exercise thereof,
and the underlying Shares with regard the particular tax treatment of this Option as it relates to the Optionee.


13.Miscellaneous.


13.1Agreement
Binding. This Agreement shall be binding upon the parties, their legal representatives, and permitted successors and assigns.


13.2Entire
Agreement. This Agreement supersedes any statements, representations, or agreements of AMZG with respect to the grant of the
Option made herein and any related rights set forth herein and affecting the grant of this Option and the Optionee hereby waives
any rights or claims related to any such statements, representations, or agreements. Except to the extent specifically set forth
herein, this Agreement does not supersede or amend any existing agreement, between the Optionee and AMZG. No addition to or modification
of any provision of this Agreement shall be binding upon the Optionee or AMZG unless made in writing and signed by both the Optionee
and AMZG.


13.3Notice.
All notices, demands or other communications to be given or delivered under or by reason of the provisions of this Agreement shall
be in writing and shall be deemed to have been given (a) when delivered to and received personally by the recipient, (b) when sent
to and received by the recipient by facsimile (receipt electronically confirmed by sender’s facsimile machine) if during
normal business hours of the recipient, otherwise on the next business day, (c) one business day after the date when sent to the
recipient by reputable express overnight courier service (charges prepaid) and delivery confirmed, or (d) three business days after
the date when mailed to the recipient by certified or registered mail, return receipt requested and postage prepaid and such receipt
is confirmed. Such notices, demands and other communications shall be sent to the parties at the addresses indicated below or to
such other address as a party may direct on written notice given pursuant to the terms of this Sub-paragraph:



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		If to the Optionee:	Bradley Colby



			2549 West Main Street, Suite 202



			Littleton, Colorado 80120



			Fax: 303-798-5767



		If to AMZG:	American Eagle Energy Inc.



			27 North 27th Street, Suite 21G



			Billings, Montana 59101



			Fax: 406-294-9764



			Attn: Richard Findley, President



13.4Non-Waiver.
No delay or failure by either party to exercise any right under this Agreement, and no partial or single exercise of that right,
shall constitute a waiver of that or any other right, unless otherwise expressly provided herein.


13.5Governing
Law; Jurisdiction; Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada,
exclusive of the conflict of law provisions thereof. The parties agree that the District Court of the County of Clark, Nevada,
United States of America shall have exclusive jurisdiction, including in personam jurisdiction, and shall be the exclusive
venue for any and all controversies and claims arising out of or relating to this Agreement or a breach thereof, except as otherwise
jointly agreed upon by the parties.


13.6Attorneys’
Fees. If any party shall commence any action or proceeding against another party in order to enforce the provisions hereof,
or to recover damages as the result of alleged breach of any of the provisions hereof, the prevailing party therein shall be entitled
to recover all reasonable costs incurred in connection therewith, including, but not limited to, reasonable attorney’s fees.


13.7Gender
and Number. As used herein, the masculine gender shall include the feminine and neuter genders, and the singular shall include
the plural, and vice versa, where the context requires.


13.8Caption.
All captions, titles, headings, and divisions hereof are for purposes of convenience and reference only and shall not be construed
to limit or affect the interpretation of this Agreement.


IN WITNESS WHEREOF,
AMZG has executed this Agreement as of the day and year first above written.


AMERICAN EAGLE ENERGY INC.


	By:	 
	 	Richard Findley, President


 



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