ex10_1.htm


    
      

    


    MASTER
SERVICE CONTRACT for RET

    


    THIS AGREEMENT (this “Contract”), made
and entered into and shall be effective as of this 5th day of December, 2008, by
and between the parties herein designated as “Company” and
“Contractor”.

    


    
      	
              Company:

            	
              Resource
      Energy Technologies, LLC (“RET”)

            


    

    


    
      	
              Address:

            	
              108
      Woodhill Road, Bardstown, KY 40004

            


    

    


    


    
      	
              Contractor:

            	
              Blast
      Energy Services, Inc., its subsidiaries, divisions and other affiliates
      (“Blast”)

            


    

    


    
      	
              Address:

            	
              14550
      Torrey Chase Blvd., Suite 330, Houston, TX
77014

            


    

    


    


    WITNESSETH:
THAT,

    


    WHEREAS, Company in the course
of such operations regularly and customarily enters into contracts with
independent contractors for the performance of service relating thereto;
and

    


    WHEREAS, Company desires, as a
matter of company policy, to establish and maintain an approved list of
Contractors and to offer work or contracts only to those Contractors who are
included on such approved list; and

    


    WHEREAS, Contractor represents
that it has adequate equipment in good working order and fully trained personnel
capable of efficiently operating such equipment and performing services for
Company.

    


    NOW THEREFORE IN CONSIDERATION
of the mutual promises, conditions and agreements herein contained, the
sufficiency of which is hereby acknowledged, and the specifications and special
provisions set forth in the exhibits attached hereto and made a part hereof, the
parties mutually agree as follows:

    


    
      	
              1.0  

            	
              AGREEMENT

            


    

    


    Upon
execution of this Contract, Company agrees that the name of Contractor shall be
added to the Company’s approved list of Contractors and this Contract shall
remain in force and effect until canceled by either party by giving the other
party ten (10) days prior written notice at the respective address of either
party.  If current work extends past such ten-day period, then
cancellation shall not be effective until work is completed.  This
Contract shall control and govern all work performed by Contractor for Company,
under subsequent verbal and/or written work orders.  Agreement or
stipulations in any such work order, delivery ticket, or other instrument, used
by Contractor not in conformity with the terms and provisions hereof shall be
null and void.  No waiver by Company of any of the terms, provisions
or conditions hereof shall be effective unless said waiver shall be in writing
and signed by an authorized officer of Company and specifically referencing this
Contract.

    


    
      
         

      

      
        1

        
          

        

      

      
         

      

       

    

    
      	
              2.0  

            	
              LABOR, WARRANTY, EQUIPMENT,
      MATERIALS, SUPPLIES AND SERVICES

            


    

    


    
      	
              2.1  

            	
              When
      notified by Company by written work order of the services and/or equipment
      desired and upon acceptance of same, Contractor shall commence furnishing
      same at the agreed upon time, and continue such operations diligently and
      without delay, in strict conformity with the specifications and
      requirements contained herein and such work
  orders.

            


    

    


    
      	
              2.2  

            	
              Contractor
      shall not employ in any work for Company any employee whose employment
      violates any labor, employment or other applicable
      laws.  Contractor shall not employ in any work for Company any
      employee who is a minor.

            


    

    


    
      	
              2.3  

            	
              All
      work or services rendered or performed by Contractor shall be done with
      due diligence in a good and workmanlike manner, using skilled, competent
      and experienced workmen and supervisors, and in accordance with good
      oilfield servicing practices.

            


    

    


    
      	
              (a)  

            	
              NOTWITHSTANDING
      ANYTHING TO THE CONTRARY CONTAINED HEREIN, THE TERMS OF THIS PARAGRAPH
      APPLY TO ANY SERVICES AND TO ANY EQUIPMENT RENTED OR LEASED WITH OR
      WITHOUT AN OPERATOR.  Contractor uses its best efforts to ensure
      that all service personnel furnished are competent and rental equipment is
      in good condition.  Contractor personnel will attempt to perform
      the work requested; however, because of the nature of the work to be
      accomplished and unpredictable conditions, the results of such services
      cannot be and are not guaranteed.  Contractor warrants the
      services provided hereunder for a period of thirty (30)
      days.  NO WARRANTY IS GIVEN WITH RESPECT TO ENGINEERING AND
      TECHNICAL INFORMATION FURNISHED BY CONTRACTOR OR WITH RESPECT TO THE
      RESULTS OF THE SERVICES PROVIDED BY CONTRACTOR.  CONTRACTOR
      MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, AS TO THE DESIGN,
      OPERATION, OR QUALITY OF THE MATERIAL OR WORKMANSHIP OF RENTAL EQUIPMENT
      USED TO SUPPLY THE SERVICES PROVIDED TO COMPANY HEREUNDER, AND CONTRACTOR
      MAKES NO WARRANTY OF MERCHANTABILITY OR FITNESS OF THE EQUIPMENT FOR ANY
      PARTICULAR PURPOSE OR ANY OTHER REPRESENTATION OR WARRANTY
      WHATSOEVER.

            


    

    


    
      	
              (b)  

            	
              Contractor
      shall have no responsibility for any materials furnished and/or
      specified-by Company.

            


    

    


    
      	
              (c)  

            	
              With
      regard to materials or equipment furnished by third party vendors and/or
      suppliers, Contractor’s liability therefor shall be limited to the
      assignment of such third party vendor’s and/or supplier’s warranty to
      Company, provided such warranties are
  assignable.

            


    

    


    
      	
              2.4  

            	
              Contractor
      agrees to maintain his equipment in good operating condition at all times
      and shall use all reasonable means to control and prevent fires and
      blowouts, protect the hole, and protect Company’s equipment. Contractor’s
      use of down-hole equipment as it pertains to Sections 2.5 and 2.6 is
      limited to the following major
items:

            


    

     

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

       

    

    
      	
              (a)  

            	
              The
      Blast down-hole deflection shoe and packers, the stainless steel tubing
      and nozzles used to laterally jet into the hole, and the one inch coiled
      tubing string all of which are estimated to have a value not exceeding
      sixty thousand ( $60,000).

            


    

    


    
      	
               
      

            	
              2.5

            	
              Notwithstanding
      anything to the contrary contained herein, except when Contractor’s
      equipment is lost or damaged as a result of the sole negligence of
      Contractor, Company agrees to defend, indemnify and hold Contractor
      harmless from the loss of or damage to Contractor’s tools or equipment
      occurring in the hole, or in the drill string below the level of the
      rotary table. Company will replace such tools/equipment or reimburse
      Contractor with the current replacement cost new.  Should
      Company decide to replace lost or damaged tools/equipment, the replaced
      items should be new and purchased or obtained from a reputable
      manufacturer and should meet all original equipment manufacturer’s
      specifications.  Company agrees to reimburse Contractor for the
      cost of repair to such tools and equipment that are damaged other than
      from normal wear-and-tear during the contract period.  However,
      before any major repairs are made to damaged equipment, approval for such
      repairs must be secured from an authorized representative of
      Company.  Company shall not be responsible if Contractor’s
      tools/equipment is damaged as a result of Contractor’s negligent acts
      and/or omissions.

            


    

    


    
      	
               
      

            	
              2.6

            	
              Notwithstanding
      anything to the contrary contained herein, it is expressly agreed and
      understood that in the event Contractor’s equipment is leased or rented to
      Company pursuant to the Contract and is not returned or is damaged beyond
      repair, Company will replace such equipment or reimburse Contractor with
      the current replacement cost new of such equipment.  Should
      Company decide to replace lost or damaged assets, the replaced items
      should be new and purchased or obtained from a reputable manufacturer and
      should meet all original equipment manufacturer’s
      specifications.  Company agrees to reimburse Contractor for the
      cost of repair to such tools and equipment that are damaged other than
      from normal wear-and-tear during the contract period.  However,
      before any major repairs are made to damaged equipment, approval for such
      repairs must be secured from an authorized representative of
      Company.  Company shall not be responsible to the extent that
      Contractor’s equipment is damaged as a result of Contractor’s negligent
      acts and/or omissions.

            


    

    


    3.0           PAYMENT

    


    
      	
               
      

            	
              3.1

            	
              The
      Company shall pay Contractor based upon the rates and timing stipulated in
      Section 18.1 and 18.2 provided for herein, subject to same being accepted
      by Company as fully complying with all the terms, conditions,
      specifications and requirements of this
  Contract.

            


    

    


    
      	
              3.2  

            	
              Company
      shall have the right to audit Contractor’s books and records relating to
      all invoices issued pursuant to this agreement.  Contractor
      agrees to maintain such books and records for a period of two (2) years
      from the date such costs were incurred and to make such books and records
      available to Company at any time or times within such two (2) year
      period.

            


    

    


    
      	
               
      

            	
              3.3

            	
              In
      the event that Company’s account with Contractor becomes delinquent,
      Contractor has the right to revoke any and all discounts previously
      applied in arriving at the net invoice price, which are
      unpaid.  Upon revocation, the full invoice price without
      discount will become immediately due and owing and subject to
      collection.  Notwithstanding anything herein to the contrary,
      Contractor may file liens if Company fails to pay Contractor’s valid
      charges as required by this Contract or any court
  order.

            


    

     

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    
 

    
      	
              4.0  

            	
              REPORTS
      TO BE FURNISHED BY CONTRACTOR

            


    

    


    
      	
              4.1  

            	
              The
      quantity, description and condition of the materials and supplies and/or
      services furnished shall be verified and checked by Contractor, and all
      delivery tickets shall be properly certified as to receipt by Contractor’s
      representative.  Contractor must obtain approval of Company’s
      representative on the well site of delivery tickets for materials and
      supplies for which Contractor is to be reimbursed by
    Company.

            


    

    


    
      	
               
      

            	
              4.2

            	
              Contractor
      shall immediately orally report to Company, as soon as practicable
      followed by an appropriate written report, all accidents or occurrences
      resulting in death or injuries to Contractor’s employees, agents or third
      parties, or damage to property of Company or third parties arising out of
      or during the course of work to be performed
      hereunder.  Contractor shall furnish Company with a copy (within
      ten days) of all records made available by Contractor to Contractor’s
      insurer or governmental authorities or to others of such accidents and
      occurrences.

            


    

    


    
      	
              5.0  

            	
              INDEPENDENT
      COMPANY RELATIONSHIP

            


    

    


    
      	
               
      

            	
              In
      the performance of any work by Contractor for Company, Contractor shall be
      deemed to be an independent contractor, with the authority and right to
      direct and control all of the details of the work, Company being
      interested only in the results obtained.  However, all work
      contemplated shall meet the approval of Company and shall be subjected to
      the general right of inspection.  Company shall have no right or
      authority to supervise or give instructions to the employees, agents, or
      representative of Contractor, but such employees, agents or
      representatives at all times shall be under the direct and sole
      supervision and control of Contractor.  Any suggestions or
      directions given by Company or its employees shall be given only to the
      superintendent or other person in charge of Contractor’s crew, provided
      however, that in the event any employee of Company should give any order
      or instructions to the employees of Contractor (which employee of Company
      shall not in any event be authorized to do) and such order is not
      countermanded by Contractor’s superintendent or other person in charge of
      Contractor’s employees or crew, it shall be deemed that such orders or
      instructions are the orders or instructions of Contractor.  It
      is the understanding and intention of the parties hereto that no
      relationship of master and servant or principal and agent shall exist
      between Company and the employees, agents, or representatives of
      Contractor, and that all work or services covered hereby shall be
      performed at the sole risk of
Contractor.

            


    

    


    
      	
              6.0  

            	
              INDEMNITY
      OBLIGATIONS

            


    

    


    
      	
              6.1  

            	
              Definitions.  The
      following terms shall have the designated
  definitions.

            


    

    


    
      	
              (a)  

            	
              Company Group
      includes, individually or in any combination, Company, its affiliates,
      contractors (other than Contractor) and entities for which Company is
      performing services and each of their respective directors, officers
      agents, representatives, employees and
invitees.

            


    

     

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    
 

    
      	
              (b)  

            	
              Contractor
      Group includes, individually or in any combination, Contractor, and
      its affiliates and contractors, and each of their respective directors,
      officers, agents, representatives, employees and
  invitees.

            


    

    


    
      	
              (c)  

            	
              Defend – the
      obligation of the indemnitor (i) to defend the indemnitees at it’s sole
      expense, or at the indemnitees’ election (ii) to reimburse the indemnitees
      for the indemnitees’ reasonable expenses incurred in defending
      themselves.  Notwithstanding the indemnitee’s election of option
      (i) above, the indemnitee shall be entitled to participate in its defense
      at its sole cost.

            


    

    


    
      	
              (d)  

            	
              Losses –
      claims, demands, causes of action, losses, judgments, liabilities,
      indemnity obligations, costs, damages or expenses of any kind and
      character (including attorney’s fees and other legal
      expenses).

            


    

    


    
      	
               
      

            	
              6.2

            	
              Contractor.  Contractor
      shall release, defend, indemnify, and hold harmless Company Group from and
      against any and all Losses arising out of bodily injury or death or
      property damage or loss (including patent or license infringement
      resulting from the use of the Contractor Group’s property) suffered by any
      of the Contractor Group in connection with this Contract, REGARDLESS OF WHETHER CAUSED OR
      CONTRIBUTED TO BY THE SOLE, JOINT OR CONCURRENT NEGLIGENCE (IN ANY
      AMOUNT), STRICT LIABILITY OR OTHER FAULT OF ANY  MEMBER OF
      COMPANY GROUP.

            


    

    


    
      	
              6.3  

            	
              Company.  Company
      shall release, defend, indemnify, and hold harmless Contractor Group from
      and against all Losses arising out of bodily injury or death or property
      damage or loss (including patent or license infringement resulting from
      the use of the Company Group’s property) suffered by any of the Company
      Group in connection with this Contract, REGARDLESS OF WHETHER CAUSED OR
      CONTRIBUTED TO BY THE SOLE, JOINT OR CONCURRENT NEGLIGENCE (IN ANY
      AMOUNT), STRICT LIABILITY OR OTHER FAULT OF ANY  MEMBER OF
      CONTRACTOR GROUP.

            


    

    


    
      	
              6.4  

            	
              Insurance
      Support/Limitation.  The mutual indemnity obligations in
      Sections 6.2 and 6.3 above shall be supported by insurance provided by the
      parties hereto in the amounts and the types described in Exhibit
      A.

            


    

    


    
      	
              6.5  

            	
              NOTWITHSTANDING
      ANYTHING TO THE CONTRARY CONTAINED HEREIN, COMPANY HEREBY AGREES TO ASSUME
      THE ENTIRE RESPONSIBILITY AND LIABILITY FOR, AND AGREES TO RELEASE,
      DEFEND, INDEMNIFY AND HOLD CONTRACTOR HARMLESS FROM AND AGAINST ALL
      CLAIMS, LIABILITIES, DAMAGES AND EXPENSES (INCLUDING WITHOUT LIMITATION
      ATTORNEYS’ FEES, COURT COSTS, EXPERT WITNESS FEES AND ANY OTHER COST OF
      DEFENSE) FOR AND ARISING OUT OF THE FOLLOWING SPECIFIED TYPES OF CLAIMS,
      LOSSES OR EVENTS:

            


    

    


    
      	
               
      

            	
              1.

            	
              LOSS
      OR LIABILITY FOR DAMAGES OR AN EXPENSE ARISING FROM PROPERTY INJURY THAT
      RESULTS FROM RESERVOIR OR UNDERGROUND DAMAGE, INCLUDING LOSS OF OIL, GAS,
      OTHER MINERAL SUBSTANCE, OR WATER OR THE WELLBORE ITSELF;
    OR

            


    

     

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    
 

    
      	
               
      

            	
              2.

            	
              LOSS
      OR LIABILITY FOR DAMAGES OR ANY EXPENSE ARISING FROM COST OF CONTROL OF
      WILD WELL, UNDERGROUND OR ABOVE THE
SURFACE.

            


    

    


    
      	
               
      

            	
              THIS
      OBLIGATION TO INDEMNIFY, DEFEND AND RELEASE APPLIES REGARDLESS OF WHETHER
      OR NOT THE CLAIM OR LOSS IS OCCASIONED BY OR RESULTS FROM THE ACTUAL OR
      ALLEGED NEGLIGENCE OF CONTRACTOR OR ANY OTHER PERSON, OR ENTITY, IN WHOLE
      OR IN PART, WHETHER SOLE, JOINT, ACTIVE OR PASSIVE, EXCEPT TO THE EXTENT
      THE CLAIM OR LOSS IS DUE TO CONTRACTOR’S SOLE NEGLIGENCE, GROSS NEGLIGENCE
      OR WILLFUL MISCONDUCT.

            


    

    


    
      	
               
      

            	
              6.6.

            	
              NOTWITHSTANDING
      THE FOREGOING, CONTRACTOR SHALL HAVE SOLE RESPONSIBILITY AND LIABILITY FOR
      THE CONTROL AND REMOVAL OF AND SHALL HOLD COMPANY HARMLESS FROM PROPERTY
      LOSS OR DAMAGE, FINES AND/OR PENALTIES FROM SUCH POLLUTION OR
      CONTAMINATION THAT RESULTS FROM SPILLS OF FUELS, LUBRICANT, MOTOR OILS,
      PIPEDOPE, PAINTS, SOLVENTS, BALLAST, BILGE, METALLIC OBJECTS AND GARBAGE
      IN CONTRACTOR’S SOLE POSSESSION AND CONTROL, REGARDLESS OF OWNERSHIP,
      REGARDLESS OF WHETHER OR NOT OCCASIONED BY OR RESULTING FROM THE
      NEGLIGENCE, STRICT LIABILITY, BREACH OF WARRANTY OR OTHER FAULT OF
      COMPANY, IN WHOLE OR IN PART, WHETHER SOLE, JOINT, ACTIVE OR
      PASSIVE.  THE INITIATION OF CLEAN-UP OPERATIONS INCLUDING
      CONTROL, RESPONSE AND REMOVAL, BY EITHER PARTY SHALL NOT BE AN ADMISSION
      OF ASSUMPTION OF LIABILITY BY THE INITIATING PARTY OR
    PARTIES.

            


    

    


    
      	
               
      

            	
              6.7

            	
              Indirect or
      Consequential Damages.  The parties hereto waive and
      release all claims against the other party for indirect, special, punitive
      or consequential damages arising out of this Contract, REGARDLESS OF WHETHER CAUSED OR
      CONTRIBUTED TO BY THE SOLE, JOINT OR CONCURRENT NEGLIGENCE (IN ANY
      AMOUNT), STRICT LIABILITY OR OTHER FAULT OF ANY  OF THE OTHER
      PARTY. As used herein, “indirect or consequential damages” shall
      include, but not be limited to, loss of revenue, profit or use of capital,
      production delays, loss of product, reservoir loss or damage, losses
      resulting from failure to meet other contractual commitments or deadlines
      and downtime of facilities or
vessels.

            


    

    


    
      	
               
      

            	
              6.8

            	
              No
      Limit.  Except as otherwise provided for herein, the
      foregoing indemnity obligations shall not be limited to the amount of
      insurance coverage maintained by the
parties.

            


    

    


    
      	
              6.9  

            	
              The
      provisions of this Section shall extend to and be enforceable by and for
      the benefit of Contractor Group and Company
  Group.

            


    

    


    
      	
              6.10  

            	
              During the term of this
      Contract, Contractor and its subcontractors or their officers, directors
      and employees may have occasion to be upon or about property, platforms,
      vessels, equipment or other premises belonging to or under the control of
      or in the possession of or under contract to Company while performing
      services for another company or while in transit between a vessel and
      another location.  In such event, Contractor’s and Company’s
      indemnification rights and obligations under this Contract shall apply to
      the same extent as if Contractor had been employed at the request of or
      for the benefit or account of
Company.

            


    

     

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    
 

    7.0           INSURANCE

    


    Contractor
shall carry insurance (with reliable insurance companies that are satisfactory
to Company) in the amounts set forth in Exhibit A, such insurance to be
effective prior to the commencement of any work under this
Contract.  In each such policy, to the extent of the liabilities
agreed to be assumed by Contractor, Contractor shall cause (i) all deductibles
to be for Contractor’s account, (ii) the insurer to waive all rights of
subrogation against Company Group, (iii) Company Group to be listed as
additional insureds, and (iv) such policy to be primary as to any other existing
valid and collectible insurance of Company Group or otherwise.  Before
engaging in any work hereunder, Contractor shall furnish Company an executed
Certificate of Insurance (in form satisfactory to Company) evidencing the
foregoing insurance.  Contractor shall cause each insurer to agree to
give Company at least thirty (30) days written notice of cancellation or
expiration of any such policies or of any other changes that would materially
reduce the limits of coverage of such policies.  Notwithstanding any
provision herein to the contrary, failure to secure the insurance coverage, or
the failure to comply fully with any of the insurance provisions of this
Contract, or the failure to secure such endorsements on the policies as may be
necessary to carry out the terms and provisions of this Contract, (x) shall in
no way act to relieve Contractor from the obligations of this Contract, and (y)
shall constitute grounds for the immediate termination of this Contract by
Company (in addition to any other rights or remedies available to the
Company).

    


    
      	
              8.0  

            	
              THIRD
      PARTY BENEFICIARIES

            


    

    


    Except as
provided in Section 6.9 above with regard to Company Group and Contractor Group,
nothing herein shall be construed to confer any benefit on any third party not a
party to this Contract nor to provide any rights to such third parties to
enforce the provisions hereof.

    


    
      	
              9.0  

            	
              TAXES
      AND CLAIMS

            


    

    


    
      	
              9.1  

            	
              Contractor
      agrees to pay all taxes, licenses, and fees levied or assessed on
      Contractor in connection with or incident to the performance of this
      Contract by any governmental agency and unemployment compensation
      insurance, old age benefits, social security, or any other taxes upon the
      wages of Contractor, its agents, employees, and
      representatives.  Contractor agrees to require the same
      agreements and be liable for any breach of such agreements by any of its
      sub-Contractors.

            


    

    


    
      	
              9.2  

            	
              Contractor
      agrees to reimburse Company on demand for all such taxes or governmental
      charges, State or Federal that Company may be required or deem it
      necessary to pay on account of employees of Contractor or its
      sub-Contractors.  Contractor agrees to furnish Company with the
      information required to enable it to make the necessary reports and pay
      such taxes or charges.  At its election, Company is authorized
      to deduct all sums so paid for such taxes and governmental charges from
      such amounts as may be or become due to Contractor
    hereunder.

            


    

    


    
      	
              9.3  

            	
              Contractor
      agrees to pay all claims for labor, materials, services, and supplies
      furnished to Contractor hereunder and agrees to allow no lien or charge to
      be fixed upon the rig, the lease, the well, the land on which the well is
      located, or other property of Company or the party for whom Company is
      performing services with respect to such claims.  Contractor
      agrees to indemnify, protect, defend, and hold Company harmless from and
      against all such claims, charges, and liens.  If Contractor
      shall fail or refuse to pay any claims or indebtedness incurred by
      Contractor in connection with the services provided hereunder, it is
      agreed that Company shall have the right to pay any such claims or
      indebtedness out of any money due or to become due to Contractor
      hereunder.  Notwithstanding the foregoing, Company agrees that
      it will not pay any such claim or indebtedness as long as same is being
      actively contested by Contractor and Contractor has taken all actions
      necessary (including the posting of a bond when appropriate) to protect
      the property interests of Company or any other party affected by such
      claim or indebtedness.

            


    

     

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    
 

    
      	
              9.4  

            	
              Before
      payments are made by Company to Contractor, Company may require Contractor
      to furnish proof that there are no unsatisfied claims for labor,
      materials, equipment, and supplies or for injuries to persons or property
      not covered by insurance.

            


    

    


    
      	
              10.0  

            	
              LAWS,
      RULES AND REGULATIONS

            


    

    


    
      	
              10.1  

            	
              Company
      and Contractor respectively agree to comply with all laws, rules, and
      regulations which are now or may become applicable to operations covered
      by this Contract or arising out of the performance of such
      operations.  If either party is required to pay any fine or
      penalty resulting from the other party’s failure to comply with such laws,
      rules, or regulations, the party failing to comply shall immediately
      reimburse the other for any such
payment.

            


    

    


    
      	
              10.2  

            	
              In
      the event any provision of this Contract is inconsistent with or contrary
      to any applicable law, rule, or regulation, said provision shall be deemed
      to be modified to the extent required to comply with said law, rule, or
      regulation, and this Contract as so modified, shall remain in full force
      and effect.

            


    

    


    
      	
              10.3  

            	
              This
      Contract shall be governed, construed and interpreted in accordance with
      the laws of Kentucky.

            


    

    


    
      	
              11.0  

            	
              FORCE
      MAJEURE

            


    

    


    Except
for the duty to make payments hereunder when due, and the indemnification
provisions under this Contract, neither Company nor Contractor shall be
responsible to the other for any delay, damage or failure caused by or
occasioned by a Force Majeure Event.  As used in this Contract, “Force
Majeure Event” includes, but is not limited to: acts of God, action of the
elements, warlike action, insurrection, revolution or civil strife, piracy,
civil war or hostile action, strikes, differences with workers, acts of public
enemies, federal or state laws, rules and regulations of any governmental
authorities having jurisdiction in the premises or of any other group,
organization or informal association (whether or not formally recognized as a
government); inability to procure material, equipment or necessary labor in the
open market, acute and unusual labor or material or equipment shortages, or any
other causes (except financial) beyond the control of either
party.  Delays due to the above causes, or any of them, shall not be
deemed to be a breach of or failure to perform under this
Contract.  Neither Company nor Contractor shall be required against
its will to adjust any labor or similar disputes except in accordance with
applicable law.

     

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    
 

    
      	
              12.0  

            	
              PATENTS

            


    

    


    In
addition to all other indemnity provisions contained herein, Contractor
represents and warrants that the use or construction of any and all tools and
equipment furnished by Contractor and used in the work provided for herein does
not infringe on any license or patent issued or applied for, and Contractor
agrees to indemnify and hold Company harmless from any and all claims, demands,
and causes of action of every kind and character in favor of or made by an
patentee, licensee, or claimant of any rights or priority to such tool or
equipment, or the use or construction thereof, that may result from or arise out
of furnishing or use of any such tool or equipment by Contractor in connection
with the work.

    


    
      	
              13.0  

            	
              ASSIGNMENTS

            


    

    


    Company
and Contractor agree that neither will assign nor delegate this Contract or any
of the work or services required hereunder, except for work normally performed
by Contractors, and not to assign any sum that may accrue to Contractor
hereunder, without prior written consent of the other party.  If any
assignment by Company is made that significantly alters Contractor’s financial
burden, Contractor’s compensation shall be adjusted to give effect to any change
in Contractor’s operating costs.

    


    
      	
              14.0  

            	
              TERMINATION
      OF WORK

            


    

    


    
      	
              14.1  

            	
              Company
      may, with 30 days written notification, in its sole discretion, terminate
      work covered by any work order, oral or written, issued hereunder, in
      which event Contractor shall be paid at the applicable rates stipulated in
      Contractor’s Rate Schedule or Bid for services rendered up to the date of
      such termination.  In no event shall Contractor be entitled to
      be paid prospectively for work unperformed by reason of such termination,
      nor shall Contractor be entitled to any other compensation or damages for
      loss of anticipated profits or otherwise.  On notice of such
      termination, Contractor shall promptly remove its personnel, machinery,
      and equipment from the location and shall further cooperate with Company
      or its designee to ensure an orderly and expeditious transition and
      completion of the work.

            


    

    


    
      	
              14.2  

            	
              The
      foregoing paragraph shall in no way limit (other than compensation for
      goods and/or services already provided) Company’s right to terminate
      Contractor without additional compensation in the event of Contractor’s
      breach of this Contract.

            


    

    


    
      	
              15.0  

            	
              GIFTS
      AND GRATUITIES

            


    

    


    It is
considered to be in conflict with the Company’s interest for its employees or
any member of their immediate family to accept gifts, payments, extravagant
entertainment, services, or loans in any form from anyone soliciting business,
or who may already have established business relations with the Company. Gifts
of nominal value and entertainment, meals, and social invitations that are
customary and proper under the circumstances and do not place the recipient
under obligation are acceptable.  If any employee of the Company
should solicit a gift or gratuity from the Contractor, Contractor hereby agrees
to notify an officer of the Company of such act.  It is agreed that
the Company will hold such notification in confidence.  It is further
understood that failure by the Contractor to comply with the Company’s policies
regarding gifts and gratuities may, at the Company’s option, result in the
termination of this Contract and may further preclude any future dealings
between the parties.

     

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    
 

    
      	
              16.0  

            	
              ILLEGAL
      DRUGS, ALCOHOL, AND FIREARMS

            


    

    


    
      	
              16.1  

            	
              To
      help insure a safe, productive work environment, Company may establish a
      program designed to prohibit the use, transportation and possession of
      firearms, drugs and/or controlled substances, drug paraphernalia and
      alcoholic beverages on drilling locations, or Company’s other
      premises.  Illegal drugs include marijuana, amphetamines,
      barbiturates, opiates, cocaine, codeine, morphine, hallucinogenic
      substances (LSD) and any similar drugs and/or chemicals synthetics deemed
      hazardous by Company.

            


    

    


    
      	
              16.2  

            	
              Such
      programs, if established, upon notice shall apply to Contractor’s
      employees, agents, servants and
Contractors.

            


    

    


    
      	
              16.3  

            	
              Company
      specifically reserves the right to carry our reasonable searches of
      individuals, their personal effects, and vehicles when entering on and
      leaving Company’s premises.  The searches will be initiated by
      Company without prior announcement.  Individuals found in
      violation will be removed from Company’s premises
      immediately.  Submission to such a search is strictly voluntary;
      however, refusal may be cause for not allowing that individual on the
      wellsite or Company’s other premises.  It is Contractor’s
      responsibility to notify its employees of this prohibition and its
      enforcement.

            


    

    


    
      	
              17.0  

            	
              GOVERNMENT
      REGULATIONS

            


    

    


    The
following regulations, where required by law, are incorporated in the agreement
by reference as if fully set out.

    


    
      	
              (1)  

            	
              The
      Equal Opportunity Clause prescribed in 41CFR
  60-1.4;

            


    

    


    
      	
              (2)  

            	
              The
      Affirmative Action Clause prescribed in 41 CFR 60-250.4 regarding veterans
      and veterans of the Vietnam era;

            


    

    


    
      	
              (3)  

            	
              The
      Affirmative Action Clause for handicapped workers prescribed in 41 CFR
      60-741.4;

            


    

    


    
      	
              (4)  

            	
              The
      Certification of Compliance with Environmental Laws prescribed in 40 CFR
      15.20.

            


    

    


    
      	
              18.0  

            	
              SPECIAL
      PROVISIONS

            


    

    


    This
Contract sets forth the entire agreement between Company and Contractor with
respect to its subject matter.  All prior negotiations and dealings
regarding the subject matter hereof are superseded by and merged into the
Contract, including any existing Master Service Contracts between Company
and  Blast Energy Services, Inc. or any of its subsidiaries or
divisions.  No modification of this Contract shall be effective unless
made in writing and signed by both parties.

    


    This
contract shall be set forth and administered under the provisions of the first
two phases specified below:

     

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    
 

    18.1   Phase
I – Test Phase

    


    
      	
              (1)  

            	
              Company
      will define three (3) well locations to be prepared by Company for testing
      on their lease acreage in the Park City area of
  Kentucky.

            


    

    


    
      	
              (2)  

            	
              Company
      and Contractor will agree upon a written work program to test the impact
      of lateral jetting on the production of the Company wells. Such program
      will identify the number of zones in each well, their vertical depths, and
      the number of laterals required for each zone as well as the geographical
      orientation that the Company desires. (See Exhibit
  B)

            


    

    


    
      	
              (3)  

            	
              Contractor
      will carry the cost of building the 4 and 1⁄2 inch deflection shoes and
      other down-hole equipment for the program at their sole
    cost.

            


    

    


    
      	
              (4)  

            	
              Contractor
      will carry the cost of mobilizing and demobilizing the jetting equipment
      and the living costs of operating personnel while on the road and while
      resident in Kentucky for the term of this phase of the
      contract.

            


    

    


    
      	
              (5)  

            	
              Company
      agrees to reimburse Contractor with fifty thousand dollars ($50,000) paid
      ratably over a period not to exceed one hundred and twenty (120) days from
      the end of Phase I.

            


    

    


    
      	
              (6)  

            	
              Company
      and Contractor will jointly document and sign off on the production
      results of Phase I, both before and after the service is provided, from
      each well activity contemplated by the work program. (See Exhibit
      C)

            


    

    


    18.2   Phase
II – Maximum 100 Well Program

    


    
      	
              (1)  

            	
              Contractor
      hereby grants to Company a sixty (60) day option to enter into an
      exclusive well program to stimulate up to one hundred (100) wells on the
      Company’s lease acreage in the Park City area of Kentucky. The option
      expires sixty (60) days from the completion of Phase I. (See Exhibit
      D)

            


    

    


    
      	
              (2)  

            	
              Company
      will exercise said option in writing at its sole discretion based upon
      their satisfaction with the documented results of the Test
      Phase.  If exercised, such program is scheduled to begin in the
      spring of 2009 after the rainy season has ended and will be subject to the
      same documentary requirements defined in Exhibits B and
  C.

            


    

    


    
      	
              (3)  

            	
              If
      Company exercises its option to begin Phase II, Contractor will provide
      the jetting service to Company at zero cost (save and except the cost of
      mobilizing the rig to Kentucky from its previous location) in exchange for
      a forty percent (40%) share in the net revenues from the increased
      production of the 100 Well Program and the Company shall retain the
      remaining sixty percent (60%).

            


    

    


    18.3   Phase
III – Joint Venture for the State of Kentucky

    


    
      	
              (1)  

            	
              No
      terms and conditions have been agreed to for Phase
  III.

            


    

    


    
      	
              (2)  

            	
              Any
      terms or conditions that might be negotiated for Phase III will be
      separately documented in a new independent
  agreement.

            


    

    


     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    
 

    


    
      	
              19.0  

            	
              NOTICES

            


    

     

    
      
        	
                Company:

              	
                Resource
      Energy Technologies, LLC

              
	 
      	
                John
      F. Charles

              
	 
      	
                108
      Woodhill Road

              
	 
      	
                Bardstown,
      KY 40004

              
	 
      	
                Office:
      502-331-9147

              
	 
      	
                Fax:
      502-350-3349

              
	 
      	
                Cell:
      502-827-1058

              


      



      
        	
                Contractor:

              	
                John
      O’Keefe

              
	 
      	
                Blast
      Energy Services Inc.

              
	 
      	
                14550
      Torrey Chase Blvd, Suite 330

              
	 
      	
                Houston,
      Texas 77014

              
	 
      	
                Office:
      281-453-2888

              
	 
      	
                Fax:
      281-453-2899

              
	 
      	
                Cell:
      713-725-1876

              


      



    20.0           ACCEPTANCE
OF CONTRACT

    


    IN
WITNESS WHEREOF, the parties hereto have executed this Contract upon the date
above shown in several counterparts, each of which shall be considered as an
original.

     

    
      
        	 
      	
                COMPANY

              
	 
      	 
      
	 
      	 
      
	 
      	 
      	
                By:

              	
                /s/
      John Charles

              
	 
      	 
      	 
      	 
      
	 
      	 
      	
                Title:

              	
                CEO

              
	 
      	 
      	 
      	 
      
	 
      	 
      	
                Date:

              	
                December
      5, 2008

              


      

    

    


    
      	 
      	
              CONTRACTOR

            
	 
      	 
      
	 
      	 
      
	 
      	 
      	
              By:

            	
              /s/
      John O’Keefe

            
	 
      	 
      	 
      	 
      
	 
      	 
      	
              Title:

            	
              CEO

            
	 
      	 
      	 
      	 
      
	 
      	 
      	
              Date:

            	
              December
      5, 2008

            


    


    
      
         


      

      
        12

        
          

        

      

      
         


      

    


    INSURANCE

    


    Exhibit
A

    


    


    Contractor
shall carry insurance (with reliable insurance companies that are satisfactory
to Company) in the minimum amounts set forth below, such insurance to be
effective prior to the commencement of any work under this
Contract.  In each such policy, to the extent of the liabilities
agreed to be assumed by Contractor, Contractor shall cause (i) all deductibles
to be for Contractor’s account, (ii) the insurer to waive all rights of
subrogation against Company Group, (iii) Company Group to be listed as
additional insureds, and (iv) such policy to be primary as to any other existing
valid and collectible insurance of Company Group or otherwise.  Before
engaging in any work hereunder, Contractor shall furnish Company an executed
Certificate of Insurance (in form satisfactory to Company) evidencing the
foregoing insurance.  Contractor shall cause each insurer to agree to
give Company at least thirty days written notice of cancellation or expiration
of any such policies or of any other changes that would materially reduce the
limits of coverage of such policies.  Notwithstanding any provision
herein to the contrary, failure to secure the insurance coverage, or the failure
to comply fully with any of the insurance provisions of this Contract, or the
failure to secure such endorsements on the policy as may be necessary to
carry  out the terms and provisions of this contract, (x) shall in no
way act to relieve Contractor from the obligations of this Contract, and (y)
shall constitute grounds for the immediate termination of this Contract by
Company (in addition to any other rights or remedies available to the
Company).

    


    
      	
              1.  

            	
              Workers’
      Compensation insurance to the full extent required by all laws applicable
      in any jurisdiction in which the Work is to be performed or the contracts
      of employment for Contractor’s employees are made or expressed to be
      made.  The Employer’s Liability Insurance shall not be less than
      $1,000,000.

            


    

    


    
      	
              2.  

            	
              Comprehensive
      or Commercial General Liability insurance for any incidents or series of
      incidents covering the operations of the Contractor in the performance of
      the contract, in an amount of not less than
  $1,000,000.

            


    

    


    
      	
              3.  

            	
              Automobile
      Bodily Injury and Property Damage Liability Insurance extending to owned,
      non-owned, and hired automobiles used by Contractor in the performance of
      this Contract in the amount of not less than
  $1,000,000.

            


    

    


    
      	
              4.  

            	
              Excess
      Liability Insurance over and above the coverages listed above in the
      amount of not less than $2,000,000.

            


    

    


    


    


    


    


    


    


    



    
      
         


      

      
        13

        
          

        

      

      
         


      

    


    PHASE I WORK
PROGRAM

    


    Exhibit
B

    


    


    Depth                                           # of
Laterals                                                   Orientation

    


    


    Well #1

    


    Zone
1

    


    


    Zone
2

    


    


    


    


    


    Well #2

    


    Zone
1

    


    


    Zone
2

    


    


    


    


    Well #1

    


    Zone
1

    


    


    Zone
2


    
      
         


      

      
        14

        
          

        

      

      
         


      

    


    PHASE I PRODUCTION
RESULTS

    


    Exhibit
C

    


    


    Well
Name                                           Location                                Pre
Contract                                                      Post
Contract

    Production                                                      Production
(mcf/d)(mcf/d)

    


    



    
      
         


      

      
        15

        
          

        

      

      
         


      

    


    PHASE II OPTION
EXERCISE

    


    Exhibit
D

    


    


    Contractor
hereby grants Resource Energy Technologies, LLC the exclusive option to enter
into a one hundred (100) well lateral jetting stimulation program for their
lease acreage in the Park City area of Kentucky, on the terms and conditions
defined in Section 18.2 of this Agreement. This option expires thirty (60) days
from the completion of Phase I.

    


    


    


    


    We
hereby agree to exercise this option and abide by the terms and conditions
stipulated in Section 18.2 of this Agreement:

    


    


    


    Signed:    ________________________

    


    By:    ___________________________

    


    On behalf
of Resource Energy Technologies, LLC

    


    


    Dated:      _________________________