**Exhibit 10.4**

** **

**ASSIGNMENT AGREEMENT**

 

THIS ASSIGNMENT AGREEMENT (this “Agreement”) isentered into effective as of June 1, 2004 (“Effective Date”) by andbetween Reef Partners LLC, a Nevada limited liability company (“Transferor”)and Reef Global Energy III, L.P., a Nevada limited partnership (“Transferee”).

 

**Preliminary Statements**

 

WHEREAS, Transferor serves as the managing generalpartner of Transferee, and in such capacity and in consideration for themanagement fee received by Transferor in such role, Transferor from time totime acquires interests in oil, gas and mineral leases on Transferee’s behalf; 

 

WHEREAS, effective as of May 1, 2004, Transferorentered into an agreement with ORX Resources, Inc. (the “ORX”) toparticipate in the drilling of certain oil, gas and mineral leases located inSt. Mary Parish, Louisiana within the area known as the “Bayou Carlin Prospect”(more fully described on Exhibit A hereto) (the “Bayou CarlinParticipation Agreement”);

 

WHEREAS, the terms of the Bayou Carlin ParticipationAgreement provide for, among other things, Transferee to receive 37.496% of allof ORX’s right, title and interest in and to all oil, gas and mineral leases,or other contracts currently owned, or hereafter acquired, by ORX to the extentthat such oil, gas and mineral contracts are included within the boundaries ofthe AMI created and established for the Bayou Carlin Prospect, it being theintent of ORX to convey Transferor a 28.5% interest in the units establishedfor the initial test well on the Bayou Carlin Prospect (the “ReefParticipation Interest”);

 

WHEREAS, the Reef Participation Interest has not yetbeen recorded in the name of Transferor, it being Transferor’s knowledge andbelief that the Reef Participation Interest will be assigned by ORX toTransferor upon the drilling and completion of a producing well on the BayouCarlin Prospect; and

 

WHEREAS, in its role as managing general partner ofTransferee, Transferor acquired a portion of its right, title and interest tothe Reef Participation Interest for the benefit of Transferee, and by way ofthis Agreement intends to assign to Transferee such portion of the ReefParticipation Interest, it being the intent of Transferor to convey toTransferee a working interest equal to 1.5472% before payout and 1.3538% afterpayout in THE BAYOU CARLIN PROSPECT SL 13470 #1 ST #1 WELL BORE AND WELLBOREONLY (the “Assigned Interest”).

 

**Agreement**

** **

For good and valuable consideration, the receipt andadequacy of which are hereby acknowledged, the parties to this Agreement,intending to be legally bound, agree as follows:

 

**1.             Assignment**.Transferor hereby conveys, transfers and assigns to, and contributes to thecapital of, Transferee, its successor and assigns, forever, all of Transferor’srights, title, privileges and interest in and to the Assigned Interest arisingunder the Bayou Carlin Participation Agreement.  The recordation of such assignment shall occur in St. MaryParish, Louisiana as soon as reasonably practicable following ORX’s assignmentof the Reef Participation Interest to Transferor.

 

**2.             Further Assurances**.  Transferor and Transferee, for themselvesand their respective successors and assigns, covenant and agree that they willexecute and deliver such additional agreements, instruments or documents suchas deeds, bills of sale, assignments, UCC financing statements, transfers andconveyances, powers of attorney, assurances, consents or assumptions, and willtake such further actions, as are necessary to transfer and assign more fullythe Assigned Interest.

 

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**3              Governing Law**.This Agreement shall be construed in accordance with and all disputes hereundershall be governed by the laws of the State of Nevada, excluding its conflict oflaw rules.

 

The parties to this Agreement have executed anddelivered this Agreement as of the Effective Date.

 
| TRANSFEROR:                  |                          | TRANSFEREE: |               |
|------------------------------|-------------------------------|-------------|--------------------|
|                         |                          |        |               |
| REEF PARTNERS LLC            | REEF GLOBAL ENERGY III,  L.P. |
|                         |                          |        |               |
|                         |                          |        |               |
| By:  Reef Partners, LLC | By:  Reef Partners, LLC  |        |
|                         |                          |        |               |
|                         |                          |        |               |
| By:                          | /s/ Michael J. Mauceli        |        | By:                | /s/ Michael J. Mauceli |   |
| Name:                        | Michael J. Mauceli            | Name:       | Michael J. Mauceli |
| Title:                       | Manager                       | Title:      | Manager            |
|                              |                               |             |                    |  |  |  |  |  |

 

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**ExhibitA**

 

**Oil, Gasand Mineral Leases within the Bayou Carlin Prospect Subject to Assignment**

** **

(a)                                  MineralLease granted by Miami Corporation to Am-Per Enterprises, Inc., dated July 12,2001, a memorandum of which, dated of even date with said mineral lease, isrecorded in Conveyance Book 44-I, page 538, Entry No. 274,405 of the records ofSt. Mary Parish, Louisiana.

 

(b)                                 MineralLease granted by Kearny Properties, L.L.C., to Am-Per Enterprises, Inc., datedJune 1, 2001, a memorandum of which dated June 14, 2001, is recorded inConveyance Book 44-1, page 126, entry No. 274,405 of the records of St. MaryParish, Louisiana.

 

(c)                                  Optionto enter into Oil, Gas and Mineral Lease by Kearny Properties, L.L.C. to ORXResources, Inc. dated effective March 31, 2004, which is recorded in ConveyanceBook 57, page 298, Entry No. 285,498 of the records of St. Mary Parish,Louisiana.

 

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