**Exhibit10.18**

**PURCHASEAND SALE AGREEMENT**

**between**

**PRBENERGY, INC. (“Seller”)**

**and**

**ARETEINDUSTRIES, INC (“Purchaser”)**

**Asof September 1, 2006**

----

**PURCHASEAND SALE AGREEMENT**

ThisPurchase and Sale Agreement (the “Agreement”) entered into this  4 thday of August, 2006, is the agreement between PRB Energy, Inc., 1875 LawrenceStreet, Suite 450, Denver, Colorado 80202 (the “Seller”) and ArêteIndustries, Inc., 7260 Osceola Street, Westminster, Colorado 80030 (the “Buyer”)concerning the sale and purchase of certain coal bed methane gas gatheringpipeline and compressor station-related assets described below.  For purposes of this Agreement, the effectivedate of the purchase and sale shall be 12:01 a.m. Mountain Time on September 1,2006 (the “Effective Date”).  Sellerand Buyer shall close the transaction contemplated by this Agreement on orbefore September 1, 2006, (the “Closing Date”.)

RECITALS:

A.                                   Buyerand Seller desire to enter into an agreement whereby the Seller seeks to selland the Buyer seeks to buy the coal bed methane gas gathering pipeline andcompressor station-related assets currently associated with the TOP GatheringSystem in Campbell County, Wyoming (hereinafter referred to as the “TOP”); and

B.                                     Buyerand Seller desire to enter into this Agreement to complete said transaction.

Nowtherefore, in consideration of the mutual agreements and covenants containedherein, Buyer and Seller agree as follows:

1.                                       Purchaseand Sale of Assets.  Subject to theterms, conditions and exclusions of this Agreement, Seller agrees to sell andBuyer agrees to purchase Seller’s right, title and interest in and to “TOP”located in Campbell County, Wyoming as depicted on Exhibit A

a.               RealProperty.  All easements, rights of way, permits,licenses, prescriptive rights structures or other interests in real propertyassociated with or relating to the Assets as listed on Exhibit A-1;

b.              Equipment.  All pipelines, equipment, valves, vessels,fittings, meters or other measurement facilities, operational and controlequipment, pig launchers, pig catchers, tanks and all other personal property,as depicted on Exhibit A****(onedehydration unit & one ecology pot currently on site are excluded from thepurchase and sale)****;

c.               Contractset al.  All contracts and agreementsrelating to the use of the assets, as depicted on Exhibit A-1; 

d.              OtherInterests in the Assets.  All other rights, titles and interests in andto the Assets as described above are part of the Assets, it being the purposeand intent of this Agreement that Seller sell and Buyer purchase all of Seller’sright, title and interest in and to the Assets.

2.                                       PurchasePrice.  In consideration of theconveyance of the Assets, upon execution of this Agreement, Buyer shall pay toSeller the sum of Three Hundred and Thirty Thousand Dollars and no cents($330,000.00)  (the “Purchase Price”)

3.                                       Seller’sRepresentations and Warranties. Seller represents and warrants, to the best of its knowledge, thefollowing to Buyer as of the Closing Date:

a.               PreferentialRights to Purchase.  No third partyholds any preferential right to purchase, right of first offer, right of lastrefusal or other preferential right to purchase the Assets.

b.              Signatory forSeller.  The signatory for Seller hasthe full power and authority to bind the Seller to the terms hereof, and tocomplete the sale contemplated hereby.

c.               AgreementRepresents.  This Agreementrepresents the valid and subsisting agreement of Seller, fully binding uponSeller and subject only to general principles of equity and bankruptcy laws.

d.              No Abandonment.  Seller has taken no actions that demonstratean intent to abandon the Assets, or released of record any rights of waypertaining to the Assets.

e.               Fees.  Seller has incurred no liability, contingentor otherwise, for broker’s or finder’s fees in respect to this transaction forwhich Buyer shall have any responsibility whatsoever.

4.                                       Buyer’sRepresentations and Warranties. Buyer represents and warrants, to the best of Buyer’s knowledge, thefollowing to Seller as of the Closing Date:

a.               Consents andApprovals.  No consent, approval,authorization, license, order or permit, or declaration, filing or registrationwith, or notification to any governmental authority or any other person, isrequired

----

to be obtained by theBuyer in connection with the execution and delivery of this Agreement by theBuyer or the performance of the Buyer’s obligations hereunder;

b.              Fees.  Buyer has not incurred any liability,contingent or otherwise, for brokers’ or finders’ fees relating to thetransactions contemplated by this Agreement for which Seller shall have anyresponsibility whatsoever;

c.               Restoration.  Buyer has the sole responsibility todetermine the necessary measures and to perform all necessary restoration ofthe Assets.

**5.****                                     ****WARRANTY****.   BUYER ACKNOWLEDGESAND AGREES THAT THE ASSETS LISTED IN EXHIBITS A, A-1 AND B ARE BEINGTRANSFERRED, ASSIGNED AND CONVEYED FROM SELLER TO BUYER “AS IS, WHERE IS ANDWITH ALL FAULTS” IN THEIR PRESENT CONDITION AND STATE OF REPAIR.  SELLER HEREBY DISCLAIMS ANY AND ALL REPRESENTATIONSAND WARRANTIES CONCERNING THE ASSETS, EXPRESS OR IMPLIED, WHETHER ARISING INCONTRACT, TORT OR ANY OTHER THEORY OF LAW, INCLUDING, WITHOUT LIMITATION, ANYWARRANTY OF TITLE, MERCHANTABILITY OR FITNESS FOR A GENERAL OR PARTICULARPURPOSE.  FURTHER, BUYER SPECIFICALLYAGREES THAT SELLER IS MAKING NO REPRESENTATION OR WARRANTY, EITHER EXPRESS ORIMPLIED, AS TO THE ADEQUACY OR COMPLETENESS OF THE UNDERLYING REAL PROPERTYINTERESTS ASSOCIATED WITH OR USED IN CONNECTION WITH THE ASSETS, INCLUDING BUTNOT LIMITED TO EASEMENTS AND RIGHTS OF WAY.**

**6.****                                      Indemnification.**

**a.****                                       BySeller.  Seller agrees to indemnify,defend and hold Buyer harmless on account of all debts, liabilities or causesof action attributable to Buyer’s ownership of the property and to transactionsapplicable to the Contracts which accrued prior to the date of Closing exceptas otherwise set forth below; and**

**b.****                                       ByBuyer.  Buyer agrees to indemnify,defend and hold Seller harmless on account of all debts, liabilities or causesof action attributable to Seller’s ownership of the property and totransactions applicable to the Contracts which accrued after to the date ofClosing.**

**c.****                                      ****All indemnities of or by the parties under this Agreementshall survive the Closing Date hereof.**

7.                                       ConveyanceDocuments.  At Closing, Seller shallexecute and deliver an Assignment, Conveyance, and Bill of Sale in the form ofwhich is attached as Exhibit B.

8.                                       Conditionsto Closing - Seller.  The Seller’sobligations at Closing are subject, at Seller’s option, to the satisfaction ator prior to the Closing Date of the following conditions precedent:

a.               All representationsand warranties of Buyer contained in Paragraph 4 of this Agreement shall betrue and correct in all material respects, and Buyer shall have performed andsatisfied all covenants and agreements required by this Agreement to beperformed and satisfied by Buyer at or prior to the Closing Date in allmaterial respects;

b.              Buyershall have executed and delivered to Seller all of the documents that are contemplatedto be executed and delivered pursuant to this Agreement prior to or at theClosing Date.

9.                                       Conditionsto Closing - Buyer.  The Buyer’s obligations at Closing aresubject, at Buyer’s option, to the satisfaction at or prior to the Closing Dateof the following conditions precedent:

a.               Allrepresentations and warranties of Seller contained in Paragraph 3 of thisAgreement shall be true and correct in all material respects, and Seller shallhave performed and satisfied all covenants and agreements required by thisAgreement to be performed and satisfied by Seller at or prior to the ClosingDate in all material respects;

b.              Sellershall have executed and delivered to Buyer all of the documents that arecontemplated to be executed and delivered pursuant to this Agreement prior toor at the Closing Date.

10.                                 Termination. This Agreement may be terminated in accordance with the followingprovisions:

a.               BySeller if the conditions set forth in Paragraph 8 are not satisfied, through nofault of the Seller, or waived by Seller in writing, as of the Closing Date; or

----

b.              ByBuyer if the conditions set forth in Paragraph 9 are not satisfied, through nofault of the Buyer, or waived by Buyer in writing, as of the Closing Date.

11.                                 Confidentiality.Unless required by applicable law, rules or regulations, neither party heretoshall make a public announcement or communication to any third party concerningthis Agreement or the transactions contemplated hereby without the expresswritten consent of the other party.  Notwithstandingany of the foregoing, Buyer and Seller shall be permitted to communicate asdeemed necessary in its sole discretion regarding change of ownership ofProperty.

12.                                 EntireAgreement.  This Agreement, together with Exhibits “A”, “A-1”and “B” attached hereto and data delivered hereunder, shall constitute thecomplete agreement between the parties hereto and shall supersede all prioragreements, whether written or oral, and any representations or conversationswith respect to the purchase and sale of the Assets.

13.                                 BindingEffect.  This Agreement shall be binding upon andshall inure to the benefit of the parties hereto, and their successors andassigns.  This Agreement may be assignedto a party’s parent, subsidiary, member or affiliate without the consent of theother party provided notice of such assignment is provided to the otherparty.  No other assignment by eitherparty shall be made without the express written consent of the other party,which shall not be unreasonably withheld.

14.                                 Counterparts.  This Agreement may be executed in any numberof counterparts each of which shall be considered an original and each of whichshall be an enforceable agreement.

15.                                 LawApplicable.  This Agreement shall be governed by andconstrued in accordance with the laws of the State of Wyoming applicable tocontracts made and performed entirely therein.

16.                                 JointDraft.  This Agreement was drafted and prepared bySeller and Buyer with each party having access to their own legal counsel.  Seller and Buyer each waive any position orclaim that it may now have or may have in the future based on the argument thatthe Agreement was drafted by only one of the parties and not jointly preparedby Seller and Buyer.

17.                                 Severability:  Each and every provision of this Agreement isintended to be severable.  If any term orprovision is held to be invalid or illegal for any reason whatsoever, all otherconditions and provisions of this Agreement shall nevertheless remain in fullforce and effect so long as the economic or legal substance contemplated bythis transaction is not affected in a materially adverse manner with respect toeither party.

18.                                 Mediation:  No civil action with respect to any dispute,claim or controversy arising out of or relating to this Agreement may becommenced until the matter has been submitted to a mediator for mediation.  Either Party may commence mediation byproviding to the other party a written request for mediation, setting forth thesubject of the dispute, claim or controversy and the relief requested.  It is hereby agreed that the Parties, uponoccasion that such a notice is delivered, shall endeavor for a period of thirty(30) days to reach an accord on the disputed matter prior to going to formalmediation.  Should the Parties fail toreach such an accord, the Parties agree to cooperate and act in good faith inthe selection of a mutually agreed to mediator and in scheduling the mediationproceedings.  The Parties furthercovenant that they will participate in the mediation in good faith, and thatthey will share equally in its costs. All offers, promises, conduct and statements, whether oral or written,made in the course of the mediation by any of the Parties, their agents,attorneys, employees, or experts, and by the mediator and the mediator’semployees, are confidential, privileged and inadmissible for any purposes,including impeachment, in any litigation or other proceeding involving theparties, provided that evidence that is otherwise admissible or discoverableshall not be rendered inadmissible non-discoverable as a result of its use inthe mediation.  Either Party may seekequitable relief prior to the mediation to preserve the status quo pendingcompletion of the mediation process. Except for an action to obtain equitable relief, neither party maycommence a civil action with respect to the matters submitted to mediationuntil after the completion of the initial mediation session, or 45 days afterthe date of filing of the written request for mediation, whichever occursfirst.  Mediation may continue after thecommencement of a civil action, if the Parties so desire.  The provisions of this clause may be enforcedby any Court of competent jurisdiction in the State of Wyoming, and the Partyseeking enforcement shall be entitled to an award of all costs, fees andexpenses, including attorneys’ fees, to be paid by the Party against whom theenforcement is ordered.

19.                                 Attorney’sFees.  The prevailing party in any dispute hereundershall be entitled to recover its reasonable attorneys’ fees and costs.  In addition, should either party decline tocomplete the closing and associated transaction, the declining party shall payall attorney’s fees and costs of the party seeking to close the transaction.

20.                                 Waivers.  No party’s rights hereunder will be deemedwaived except by a writing signed by such party.

----

21.                                 Incorporationof Exhibits.  All exhibits and schedules referred to hereinare attached hereto and are made a part hereof by this reference.  This Agreement shall be the controlling documentto the extent there is any conflict between the language of this Agreement andany of the exhibits.

22.                                 Survival.  Except as otherwise provided herein, therepresentations and warranties contained in this Agreement shall not survivethe closing.

23.                                 FurtherAssurances and Agreements. Seller and Buyer eachagree that it will take such further or other action(s) and to execute ordeliver such other documents necessary to carry out the purposes and intent ofthis Agreement or any document delivered pursuant to this Agreement.

INWITNESS WHEREOF, the Parties to this Agreement have executed this Agreement asof the Effective Date first above written.

 
| “ASSIGNOR” |                            | “ASSIGNEE”       |
|----------------------|---------------------------------|----------------------------|
| **PRB ENERGY, INC.** |                            | **ARETE INDUSTRIES, INC.** |
|                 |                            |
|                 |                            |
| By:                  | /s/ William F.  Hayworth        |                       | By: | /s/ Charles  Gamber |
|                 | William F.  Hayworth, President |                       | Charles Gamber,  CEO President |
|                 |                            |                       |   |   |   |

 

----

**EXHIBITA**

**ATTACHEDTO AND MADE A PART OF THAT CERTAIN**

**PURCHASEAND SALE AGREEMENT BY AND BETWEEN**

**ARETEINDUSTRIES, INC. and PRB ENERGY, INC.**

**DESCRIPTIONOF ASSETS**

**Pipelines**

 

·                  4.5 Miles 8”coated steel pipe, hydro-tested, welds x-rayed and cathodically protected

·                  Piglauncher/receiver

**Interconnect**

 

·                  Building

·                  Slug catcher

·                  LevelController/Scrubber pot

·                  400 BBL Tank

·                  Piglauncher/receiver

**Buff Station**

·                  Inlet Separator

·                  Separator flashtanks (2)

·                  400 BBL Tank

·                  Various Pipingand various valves – heat traced and insulated

·                  Emergency shutdown system – fire eyes (4), gas detectors (4)

·                  Meter houses (3)– Barton Chart meter, Total Flow Meters

·                  Oxygen analyzer

·                  Suction controlvalves (4)

·                  Regulators

·                  Buildings(4)

----

**EXHIBITA-1**

 

**ATTACHEDTO AND MADE A PART OF THAT CERTAIN**

**PURCHASEAND SALE AGREEMENT BY AND BETWEEN**

**ARETEINDUSTRIES, INC. and PRB ENERGY, INC.**

**RealProperty and Leasehold Interests**

 

·                  Compressor SiteAgreement by and between the WYO Davis Family Limited Partnership and PRB GasTransportation, Inc. successor to TOP Gathering LLC, dated June 3, 2002

·                  PipelineRight-of-Way Grant by and between Ohmans, Inc. a Wyoming Corporation and PRBGas Transportation, Inc. successor to TOP Gathering LLC, dated September26,2001

·                  Receipt PointSite Lease by and between Ohmans, Inc., a Wyoming Corporation and PRB GasTransportation, Inc. successor to TOP gathering, LLC dated December 31, 2001

·                  GasCompressor Equipment Master Rental Agreement by and between UniversalCompression and PRB Gas Transportation, Inc. successor to TOP Gathering LLC,dated December 17, 2001

**Governmental Authorizations**

·                  Stateof Wyoming, Department of Environmental Quality Air Quality Permit CT-2598,Buff Compressor Station, dated November 23, 2001 as modified by Permit No.MD-837, dated December 17, 2002

**Contracts and Agreements**

·                  GatheringServices Agreement by and between Bear Paw Energy, LLC and PRB GasTransportation, Inc. successor to TOP Gathering LLC, dated September 20, 2001

·                  GatheringServices Agreement by and between PRB Gas Transportation, Inc. successor to TOPgathering LLC and United Energy Trading, dated July 18, 2002

·                  Gathering ServicesAgreement by and between PRB Gas Transportation, Inc. successor to TOPGathering LLC and Natural Gas Fuel Company, Inc. dated October 15, 2001

·                  GatheringServices Agreement by and between PRB Gas Transportation, Inc. successor to TOPGathering LLC and Natural Gas Fuel Company, Inc. – Emerald  dated July 18, 2002 (Expired)

·                  OperatingAgreement of TOP Gathering LLC dated October 15, 2001 (Expired)

·                  ContributionAgreement dated October 15, 2001, by and among Pete Haman, Knorstar Energy,LLC, data management Consultants, Inc. and Crescent Holding, LLC (Expired)

·                  LetterAgreement dated June 12, 2002 by and between TOP Gathering LLC and GlobalVision Solutions LLC for an internet based monitoring system (Expired)

----

**EXHIBITB**

**ATTACHEDTO AND MADE A PART OF THAT CERTAIN**

**PURCHASEAND SALE AGREEMENT BY AND BETWEEN**

**ARETEINDUSTRIES, INC. and PRB ENERGY, INC.**

**ASSIGNMENT,CONVEYANCE, and BILL OF SALE**
| STATE OF WYOMING   | ) |
|--------------------|---|
|               | ) |
| COUNTY OF CAMPBELL | ) |

 

THISASSIGNMENT, CONVEYANCE, AND BILL OF SALE (the “Assignment”) dated as ofSeptember 13, 2006 is entered into between ARETE INDUSTRIES, INC. (“Assignee”)and PRB ENERGY, INC. (“Assignor”).

**WITNESSETH:**

FORTEN DOLLARS ($10.00) AND OTHER GOOD AND VALUABLE CONSIDERATION, the receipt andsufficiency of which are hereby acknowledged, Assignor hereby GRANTS, CONVEYS,QUITCLAIMS and ASSIGNS to Assignee all of Assignor’s right, title and interestin and to the following properties (real, personal, or mixed) and rights(contractual or otherwise) unless expressly reserved or excluded herein:together with all rights incident thereto as set forth in Exhibits A andA-1.  All properties, real, personal, ormixed and rights (contractual or otherwise) included hereinabove are sometimesreferred to hereinafter as the “Property” or “Properties”.

TOHAVE AND TO HOLD the Properties subject to the following terms and conditions:

1.                                       Theterms, covenants, and conditions hereof bind and inure to the benefit of theparties hereto and their respective successors and assigns.  All future conveyances of any portion of theProperties and/or their associated facilities and equipment shall recognize andperpetuate the rights and obligations set out herein.

2.                                       ASSIGNEEACKNOWLEDGES AND AGREES THAT THE ASSETS LISTED IN EXHIBITS A and A-1 ARE BEINGTRANSFERRED, ASSIGNED AND CONVEYED FROM ASSIGNOR TO ASSIGNEE “AS IS, WHERE ISAND WITH ALL FAULTS” IN THEIR PRESENT CONDITION AND STATE OF REPAIR.  ASSIGNOR HEREBY DISCLAIMS ANY AND ALLREPRESENTATIONS AND WARRANTIES CONCERNING THE ASSETS, EXPRESS OR IMPLIED,WHETHER ARISING IN CONTRACT, TORT OR ANY OTHER THEORY OF LAW, INCLUDING,WITHOUT LIMITATION, ANY WARRANTY OF TITLE, MERCHANTABILITY OR FITNESS FOR AGENERAL OR PARTICULAR PURPOSE.  FURTHERASSIGNEE SPECIFICALLY AGREES THAT ASSIGNOR IS MAKING NO REPRESENTATION ORWARRANTY, EITHER EXPRESS OR IMPLIED, AS TO THE ADEQUACY OR COMPLETENESS OF THEUNDERLYING REAL PROPERTY INTERESTS ASSOCIATED WITH OR USED IN CONNECTION WITHTHE ASSETS, INCLUDING BUT NOT LIMITED TO EASEMENTS AND RIGHTS OF WAY.

3.                                       ThisAssignment and its performance shall be construed in accordance with, andgoverned by, the laws of the State of Wyoming without regard to the choice oflaw rules of any jurisdiction, and Assignor and Assignee submits to theexclusive jurisdiction of State Courts located in Gillette, Campbell County,Wyoming.

EXECUTEDthis 13 day of September, 2006.

**INWITNESS WHEREOF,** the Parties have executed this Agreement asof the date first set forth above.
| “ASSIGNOR” |                            | “ASSIGNEE”       |
|----------------------|---------------------------------|----------------------------|
| **PRB ENERGY, INC.** |                            | **ARETE INDUSTRIES, INC.** |
|                 |                            |
|                 |                            |
| By:                  | /s/ William F.  Hayworth        |                       | By: | /s/ Charles  Gamber |
|                 | William F.  Hayworth, President |                       | Charles Gamber,  CEO President |
|                 |                            |                       |   |   |   |

 

----