**AGREEMENT FOR        CONDITIONAL OPTION FOR EXCHANGE OF NET        PROFITS INTEREST FOR CONVERTIBLE PREFERRED STOCK**

TIIIS AGREEMENT is by and        between TENGASCO, INC., a Tennessee corporation, as GRANTOR and HOACTZIN PARTNERS, L.P. as        GRANTEE.

In consideration of the        following agreements of Grantee:

Grantee's agreement to        receive a net profits interest in a methane extraction project of Manufactured Methane        Corporation as set out in conveyance dated September 17, 2007 from Manufactured Methane        Corporation to Grantee (the "Net Profits Interest") which interest is to be reduced if        certain sums are received by Grantee as set out in the Net Profits Interest; and

Grantee's agreement to enter        into a subscription for all available units in and to that certain drilling program dated        September 17, 2007 for a ten well program by Grantor in Kansas (the "Drilling Program") and        to receive working interest revenues and to pay management fees to Grantor for certain        periods;

**Grantor and Grantee hereby        enter into the agreements set out below, and Grantor grants and conveys to Grantee those        rights, interests, or privileges set out below:**

In the event that the Grantee        has not received from its interest in the Drilling Program and the Net Profits Interest,        twenty five percent (25%) of the aggregate consideration paid for the Drilling Program by        Grantee on or before December 31, 2009, then on January 1, 2010 Grantee shall have the        right at Grantee's option (the "Option") to exchange 20% of its Net Profits Interest for        shares of convertible preferred stock of Grantor (the "Convertible Preferred") with a        liquidation value equal to 20% of the consideration paid for the Drilling Program by        Grantee plus the total of all additional expenses funded in relation thereto, less the net        proceeds (net of any and all operating expenses and management fees) received by Grantor        from its interests in the Drilling Program and the Net Profits Interest at the time of such        exchange. Grantor hereby agrees that it will take all steps to authorize and issue to        Grantee upon request of Grantee such Convertible Preferred in such amount.

In addition, the Grantee        shall have, commencing on January 1, 2011 and on January 1 of each successive year, an        additional right to exchange a portion of its Net Profits Interest for Convertible        Preferred as set out in this paragraph. If during each year commencing January 1, 2011 the        Investment (defined below) is reduced by proceeds of the Drilling Program and/or the Net        Profits Interest received by Grantee by less than 20% fromthe amount at January 1 of        that same year, then Grantee shall have on such date and on each anniversary of such date        thereafter the option to exchange up to 20% of its Net ProfitsInterest for Convertible        Preferred with a liquidation value equal to 20% of the amount of the Investment as exists        on such date. The "Investment" for the purpose of this paragraph shall consist of the total        consideration paid for the Drilling Program by Grantee (including any funding of operating        or other expenses in relation thereto), less the net proceeds (net ofany and all operating        expenses and management fees) received by Grantee from its

interests in the Drilling        Program and the Net Profits Interest, and less the initial liquidationvalue of Convertible        Preferred received by operation of this or the preceding paragraph, if any.**Notwithstanding any        provision herein contained to the contrary, Grantor shall****have at all times the        right to make payment to Grantee on or before December 31 in****any****year****in****such****amounts****and****from****any****source****of****funds****available****to****Grantor****from****time to time as may be        required, when taken together with any other reductions to****the Investment        occurring in that year, to reduce the Investment by either 25% or****20% in any year and to        thereby preclude any option by Grantee to exchange for****Convertible Preferred to        come into*****existence        as*****to*****that*****year.**

The Convertible Preferred        shall have the following characteristics:

|  | ·      | No specified                    redemption date. |
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|  | ·      | Liquidation value                    is convertible at option of holder to TGC common stock at the average closing                    price of the common stock on the twenty trailing business days prior to the                    date of such issuance. |
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|  | ·      | Conversion right                    limited to no more than 19% of the then-outstanding common shares of the                    Grantor or to such smaller number that will result in shareholder approval of                    the issuance of common stock to be issued on conversion not being required                    -under the then-applicable rules of the American Stock Exchange or such                    exchange on which the Grantor's common stock may then be traded. |
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|  | ·      | 10% Dividend                    payable quarterly. |
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**The parties hereto further        agree as follows:**

|  | 1.      | Failure by                    Grantor to promptly issue the Convertible Preferred when obligated shall                    constitute a breach of this Agreement and of the Kansas Ten Well Drilling                    Programand Agreement and                    Conveyance of Net Profit Interest, each of even date herewith, and Grantee                    shall be entitled to any and all remedies available at law or equity, including                    specific performance. |
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|  | 2.      | This Agreement                    shall be governed by and construed in accordance with the laws of the State of                    Tennessee. Any provision of this Agreement that may be unenforceable or invalid                    under any law shall be ineffective to the extent of such ninenforceahility or                    invalidity without affecting the enforceability or validity of anyother provision                    hereof. |
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|  | 3.      | Any notice                    required to be given to any person shall be deemed sufficient if mailed,                    postage prepaid, to such person's address as follows, unless other address is                    furnished**to**the other party                    at any time for the purpose of receiving notices hereunder: |
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Tengasco, Inc.

10215 Technology Drive, Suite        301

Knoxville, TN        37932

Hoactzin Partners,        L.P.P. O. Box        16867

Fernandina Beach, FL        32035

|  | 4.      | This Agreement                    may not be assigned without the written consent of the other party, provided                    that the Grantor's consent to an assignment by Grantee of its interests shall                    not be unreasonably withheld. The provisions of this Agreement are binding on                    any assigns and successors of the assigning party. |
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|  | 5.      | The Parties                    hereby irrevocably consent and submit to the exclusive jurisdiction of, and                    exclusive venue in, the United States federal courts and the courts of the                    State of Tennessee in Knoxville, Tennessee, in connection with any action or                    proceeding arising out of or relating to this Agreement and Conveyance or any                    document or instrument delivered pursuant hereto. |
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|  | 6.      | Notwithstanding                    anything**to**the contrary, in                    no event shall the amount taken, reserved or paid, charged or agreed to be                    paid, for the use, forbearance or detention of money advanced pursuant hereto                    or pursuant to any other document executed in connection herewith, exceed the                    maximum rate allowed by Tennessee law. If any one or more of the provisions                    contained herein, or the application thereof in any circumstance, is held                    invalid, illegal or unenforceable in any respect for any reason,the validity,                    legality and enforceability of any other provisions hereof shall not be in any                    way impaired, unless the provisions held invalid, illegal or unenforceable                    shall substantially impair the benefits of the remaining provisions                    hereof. |
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The parties hereto agree that        each of them shall execute such documents and perform such further acts (including, without        limitation, obtaining any consents, exemptions, authorizations or other actions by, or        giving any notices to, or making any filings with, any governmental authority or any other        person) as may be reasonably required or appropriate to        carr        y out or to perform the provisions of this Agreement.         

SIGNED AND EFFECTIVE this the        17th day of September, 2007, Tengasco, Inc.

By:s/Jeffrey R.        Bailey

Jeffrey R. Bailey, Chief        Executive Officer

HOACTZIN PARTNERS,        L.P.

By: Dolphin Advisors, LLC,        its managing general partnerBy: Dolphin Management Inc.,        its managing member

By:s/Peter E.        Salas

Title: President