Unassociated Document


    March 26, 2010

    


    Eternal
Energy Corp.

    2549 West
Main Street, Suite 202

    Littleton,
CO  80120

    


    Attention:  Brad
Colby

    


    Dear Mr.
Colby:

    


    
      
        	
                Re: 

              	
                Purchase
      of Royalty

              


      

    

    


    This letter sets out the agreement
between the undersigned concerning the matters described
below:

    


    Background

    


    A.           Eternal
Energy Corp. ("Eternal")
holds the following overriding royalties on production from the Royalty
Lands:

     

    
      
        	
                1.

              	
                Earned Solo
      Lands: A 4% overriding royalty on production in respect of the
      Earned Solo Lands (the "Eternal Solo ORR")
      pursuant to the Eternal Solo ORR
Agreement;

              


      

    

     

    
      
        	
                2.

              	
                Earned AMI
      Lands: A 5% overriding royalty on production in respect of the
      Earned AMI Lands (the "Eternal AMI ORR")
      pursuant to the Eternal AMI ORR Agreement;
and

              


      

    

     

    
      
        	
                3.

              	
                Residual Royalty
      Lands: A 5% overriding royalty on production in respect of the
      Residual Royalty Lands (the "General Eternal ORR")
      pursuant to the General Eternal ORR
Agreement.

              


      

    

     

    B.           Eternal
has agreed to sell and Ryland Oil Corporation ("Ryland") has agreed to
purchase 100% of the Eternal Royalties for cash, Ryland Shares and the Hardy
Assets as described below.

     

    Agreement

     

    Now therefore the parties agree as
follows:

     

    
      
        	
                1.

              	
                Definitions.  In
      addition to any other defined terms and phrases, the following definitions
      shall apply:

              


      

    

     

    
      
        	
              	
                (a)

              	
                “Border Acreage Sale” has
      the meaning set forth in Clause 12(a)(ii)
  hereof;

              


      

    

     

    
      
        	
              	
                (b)

              	
                "Claims" means all
      losses, damages, expenses (including reasonable legal and other
      professional fees), liabilities (whether accrued, actual, contingent,
      latent or otherwise), judgments, penalties, fines, claims, lawsuits,
      causes of action, proceedings, investigations and demands or other
      obligations of whatever nature or kind and all costs incurred in
      investigating or pursuing any of the foregoing or any proceeding relating
      to any of the foregoing;

              


      

    

     

    
      
        	
              	
                (c)

              	
                "Closing" means the
      completion of the transactions contemplated by this
    Agreement;

              


      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    - 2 -

     

    
      
        	
              	
                (d)

              	
                “Closing Date” means the
      later of the following:

              


      

    

     

    
      
        	
              	
                (i)

              	
                April
      7, 2010; and

              


      

    

     

    
      
        	
              	
                (ii)

              	
                Three
      (3) business days following TSXV approval as contemplated in Clause 7
      herein;

              


      

    

     

    
      
        	
              	
                (e)

              	
                "Crescent Point" means
      Crescent Point Energy Corp., the successor in interest to TriAxon's assets
      pursuant to a court approved Plan of Arrangement effective December 15,
      2009, such assets including, without limitation, TriAxon's interests under
      the 2009 Farmout and in and to the Earned AMI Lands, the Earned Solo Lands
      and the Earned 2009 Lands;

              


      

    

     

    
      	
            	
              (f)

            	
              "Earned AMI Lands" means
      the Petroleum Substances within the Bakken Formation underlying the
      following Royalty Lands:

            


    

     

    
      Sections
4, 9, 16,
17, 20 and 21-1-15 W2M;

    

     

    
      
        	
              	
                (g)

              	
                "Earned Solo Lands" means
      the Petroleum Substances within the Bakken Formation underlying the
      following Royalty Lands:

              


      

    

     

    Sections
5, 6, 7, 17 to 20, 29, 30 and 32-1-14 W2M and Sections 1, 2, 3, 10 to 15, 22, 23
and 24-1-15 W4M;

     

    
      
        	
              	
                (h)

              	
                “Effective Date” has the
      meaning set forth in Clause 6
hereof;

              


      

    

     

    
      
        	
              	
                (i)

              	
                "Environment" means the
      components of the earth and includes ambient air, land, surface and
      sub-surface strata, groundwater, surface water, all layers of the
      atmosphere, all organic and inorganic matter and living organisms, and the
      interacting natural systems that include such
  components;

              


      

    

     

    
      
        	
              	
                (j)

              	
                "Environmental
      Liabilities" means:

              


      

    

     

    
      
        	
              	
                (i)

              	
                any
      and all Claims arising directly or indirectly from contamination or other
      adverse situations pertaining to the Environment and relating to or caused
      by the Hardy Assets or operations thereon or related thereto, however and
      by whomsoever caused, and whether such Claim, contamination or other
      adverse situation occurs or arises in whole or in part prior to, at or
      subsequent to the Effective Date;
and

              


      

    

     

    
      
        	
              	
                (ii)

              	
                all
      past, present and future Claims arising directly or indirectly, whether
      before or after the Effective Date, from (A) Environmental Matters;
      (B) non-compliance with, violation of or liability under any Environmental
      Regulations; or (C) the Abandonment and Reclamation
      Obligations;

              


      

    

     

    
      
        	
              	
                (k)

              	
                "Environmental Matters"
      means, in relation to the Environment, any activity, event or circumstance
      in respect of or relating to past, present or future activities regarding
      the Hardy Assets including:

              


      

    

     

    
      
        	
              	
                (i)

              	
                the
      storage, use, holding, collection, accumulation, assessment, generation,
      manufacture, construction, processing, treatment, stabilization,
      disposition, handling, transportation or release of hydrocarbon, hazardous
      substances and environmental
contaminants;

              


      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    - 3 -

     

    
      
        	
              	
                (ii)

              	
                the
      protection of the Environment;
or

              


      

    

     

    
      
        	
              	
                (iii)

              	
                pollution,
      reclamation or restoration of the
Environment;

              


      

    

     

    
      
        	
                
                

              	
                (l)

              	
                "Environmental
      Regulations" means all statutes, laws, rules, orders and
      regulations in effect from time to time and made by governments or
      governmental boards or agencies having jurisdiction pertaining to the
      Environment in relation to the Hardy
Assets;

              


      

    

     

    
      	
            	
              (m)

            	
              "Eternal AMI ORR
      Agreement" means that certain Overriding Royalty Agreement dated
      May 21, 2009 between Pebble, TriAxon and Wild River Resources Ltd. (whose
      interests were acquired by Crescent Point as to 75% and Shelter Bay Energy
      Inc. as to 25%), as Royalty Payors and Eternal, as Royalty Owner, as
      amended;

            


    

     

    
      
        	
              	
                (n)

              	
                "Eternal Royalties" means
      the entire right, title and interest of Eternal in and to any and all
      overriding royalties which Eternal currently holds or has the right to
      acquire in and to any and all production from any and all of the Royalty
      Lands, including without limitation, the Eternal Solo ORR, the Eternal AMI
      ORR and the General Eternal
ORR;

              


      

    

     

    
      
        	
              	
                (o)

              	
                "Eternal Royalty
      Agreements" means the Eternal Solo ORR Agreement, the Eternal AMI
      ORR Agreement and the General Eternal ORR
  Agreement;

              


      

    

     

    
      
        	
              	
                (p)

              	
                "Eternal Solo ORR
      Agreement" means that certain Overriding Royalty Agreement dated
      May 21, 2009 between Pebble and TriAxon, as Royalty Payors and Eternal, as
      Royalty Owner, as
      amended;

              


      

    

     

    
      
        	
              	
                (q)

              	
                "General Eternal ORR
      Agreement" means that certain Overriding Royalty Agreement dated
      September 4, 2008 between Pebble, as Royalty Payor and Eternal, as Royalty
      Owner, as amended;

              


      

    

     

    
      
        	
              	
                (r)

              	
                "GST" means the goods and
      services tax exigible pursuant to the Excise Tax Act (Canada)
      with respect to the subject
transactions;

              


      

    

     

    
      
        	
              	
                (s)

              	
                "Hardy Abandonment and
      Reclamation Obligations" means all obligations to (i) abandon the
      Hardy Well and restore and reclaim the surface site thereof, (ii)
      decommission and remove any facilities and equipment comprised in the
      Tangibles and restore and reclaim the surface sites thereof, and (iii)
      reclaim and restore the surface of any of the Hardy Lands, all in
      accordance with the Environmental
Regulations;

              


      

    

     

    
      
        	
              	
                (t)

              	
                "Hardy Assets" means the Hardy PNG
      Rights, the Hardy Tangibles and the Hardy Miscellaneous
      Interests;

              


      

    

     

    
      
        	
              	
                (u)

              	
                "Hardy Lands" means the
      specified stratigraphic zones or intervals within, upon or under the lands
      set forth and described in Schedule "B", insofar as rights to the
      Petroleum Substances within those zones or intervals are granted by the
      Hardy Leases;

              


      

    

     

    
      
        	
              	
                (v)

              	
                "Hardy Leases" means the
      leases, licenses, permits and other documents of title by virtue of which
      the holder thereof is (i) entitled to drill for, win, take, own or remove
      the Petroleum Substances within, upon or under the Hardy Lands, (ii deemed
      to be entitled to a share of Petroleum Substances removed from the Hardy
      Lands or any lands with which the Hardy Lands are pooled or unitized or
      (iii) entitled to share in the proceeds generated by, or to receive
      payments calculated by reference to the quantity or value of, such
      production including, without limitation, the documents of title as
      described in Schedule "B" and, if applicable, all renewals and extensions
      of such documents and all documents issued in substitution
      therefor;

              


      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

      - 4 -

       

    

    
      
        	
              	
                (w)

              	
                "Hardy Miscellaneous
      Interests" means the entire interest of Ryland/Pebble in and to all
      property, assets, interests and rights on or with respect to the Hardy
      Lands, other than the Hardy PNG Rights and the Hardy Tangibles per se, to
      the extent such property, assets, interests and rights pertain to the
      Hardy PNG Rights or the Hardy Tangibles, or any rights relating thereto
      including, without limitation, the Hardy Well, the associated wellbore and
      the casing contained therein;

              


      

    

     

    
      
        	
              	
                (x)

              	
                "Hardy PNG Rights" means
      the entire interest of Ryland/Pebble in and to the Hardy Lands and the
      Hardy Leases;

              


      

    

     

    
      
        	
              	
                (y)

              	
                "Hardy Tangibles" means
      the entire interest of Ryland/Pebble in and to the equipment described in
      Schedule “B” and any facilities and any other tangible depreciable
      property and assets located in or on the Hardy Lands and used or intended
      to be used to produce, store, process, gather, treat, measure, make
      marketable or inject the Petroleum Substances or in connection with water
      injection or removal operations that pertain to the Hardy PNG Rights
      including, without limitation, any and all gas plants, oil batteries,
      buildings, production equipment, pipelines, pipeline connections, meters,
      generators, motors, compressors, treaters, dehydrators, separators, pumps,
      tanks and boilers;

              


      

    

     

    
      
        	
              	
                (z)

              	
                “Hardy Well" means the
      well described in Schedule
"B";

              


      

    

     

    
      
        	
              	
                (aa)

              	
                "Pebble" means Pebble
      Petroleum Inc.;

              


      

    

     

    
      
        	
              	
                (bb)

              	
                "Petroleum
      Substances" means
      crude oil, crude bitumen and products derived therefrom, synthetic crude
      oil, petroleum, natural gas, natural gas liquids, sulphur and every other
      mineral or substance, whether liquid, solid or gaseous, or any of
      them;

              


      

    

     

    
      
        	
              	
                (cc)

              	
                “PST” means the 5% provincial sales
      tax exigible pursuant to the Act for the Imposition and
      Collection of Taxes on Consumers and Users of Tangible Personal Property
      and Certain Services
(Saskatchewan);

              


      

    

     

    
      
        	
              	
                (dd)

              	
                "Residual Royalty Lands"
      means all of the Royalty Lands, excepting the Earned AMI Lands and the
      Earned Solo Lands;

              


      

    

     

    
      
        	
              	
                (ee)

              	
                "Royalty Lands" means the
      hydrocarbon properties described in Schedule "A", the same being comprised
      of the Earned AMI Lands, the Earned Solo Lands and the Residual Royalty
      Lands and, for greater certainty, includes any and all lands within the
      Pebble Beach Prospect (as likewise described in Schedule "A") in which
      Pebble holds an interest as of the date of this
  Agreement;

              


      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

      - 5 -

       

    

    
      
        	
              	
                (ff)

              	
                "Ryland Shares" means
      voting common shares without par value in the capital stock of
      Ryland;

              


      

    

     

    
      
        	
              	
                (gg)

              	
                "TriAxon" means TriAxon Limited
      Partnership;

              


      

    

     

    
      
        	
              	
                (hh)

              	
                “TSXV” means the TSX Venture Exchange;
      and

              


      

    

     

    
      	
            	
              (ii)

            	
              "2009
      Farmout" means that
      certain Letter Farmin Agreement dated February 25, 2009 between Pebble, as
      Farmor and TriAxon, as
Farmee.

            


    

     

    
      
        	
                2.

              	
                Schedules.  The
      following schedules are attached hereto and made a part of this
      Agreement:

              


      

    

    
    

     

    
      	
              Schedule
      “A”

            	
              -

            	
              Royalty
      Lands

            
	
              Schedule
      “B”

            	
              -

            	
              Hardy
      Assets

            
	
              Schedule
      “C”

            	
              -

            	
              Form of
      Representation Letter of the Seller

            


    

    
 

    
      
        	
                3.

              	
                Sale
      of Royalties.  Eternal, for
      the consideration set out in Clause 4, agrees to sell, convey, transfer
      and assign to Ryland 100% of Eternal's right, title, estate and interest
      in and to the Eternal Royalties (the "Sale Royalties") such
      sale, conveyance, transfer and assignment to have effect as of the
      Effective Date.

              


      

    

     

    
      
        	
                4.

              	
                Consideration.  In
      consideration of the sale, conveyance, transfer and assignment of the Sale
      Royalties by Eternal to Ryland, Ryland shall pay to Eternal the
      following:

              


      

    

     

    
      
        	
              	
                (a)

              	
                Share
      Consideration:  On Closing, issue 2,145,883 Ryland Shares
      (the "Sale
      Shares") to Eternal at a deemed price of CDN $0.36 per share for a
      total deemed share consideration value of CDN $772,500 (the "Share
      Consideration").  Eternal acknowledges that the Sale
      Shares will be subject to a hold period expiring four (4) months and one
      day after the date of issuance, after which the Sale Shares shall be
      freely tradeable in Canada. Eternal further acknowledges that the Sale
      Shares will not be registered in the United States and consequently there
      will be resale restrictions in the United States. The certificate or
      certificates in respect of the Sale Shares shall be endorsed with legends
      reflecting the foregoing
restrictions:

              


      

    

     

    "UNLESS
PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT
TRADE THE SECURITY BEFORE [THE DATE THAT IS 4 MONTHS AND A DAY AFTER THE
DISTRIBUTION DATE].

     

    THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "U.S. SECURITIES ACT") OR QUALIFIED
UNDER ANY U.S. STATE SECURITIES LAW, AND, UNLESS SO REGISTERED, SUCH SECURITIES
MAY ONLY BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED (A) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE U.S. SECURITIES ACT, (B) TO THE CORPORATION,
(C) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER
THE U.S. SECURITIES ACT, OR (D) IN A TRANSACTION THAT DOES NOT REQUIRE
REGISTRATION UNDER THE U.S. SECURITIES ACT AND THE SELLER FURNISHES TO THE
CORPORATION AN OPINION OF COUNSEL OF RECOGNIZED STANDING IN FORM AND SUBSTANCE
REASONABLY SATISFACTORY TO THE CORPORATION TO SUCH EFFECT AND, IN EACH CASE, IN
COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS.  IN ADDITION,
HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN
COMPLIANCE WITH THE U.S. SECURITIES ACT.  "UNITED STATES" AND "U.S.
PERSON" ARE AS DEFINED BY REGULATION S UNDER THE U.S. SECURITIES
ACT.";

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

      - 6 -

       

    

    provided that, if at the time any or all of the Sale
Shares are sold (a) Ryland is then a “foreign issuer” as defined in Regulation S
under the United States Securities Act of 1933, as amended (the “U.S. Securities
Act”) and (b) the Sale Shares are sold in compliance with the requirements of
Rule 904 of Regulation S under the U.S. Securities Act and in compliance with
applicable Canadian securities laws and regulations, then Ryland shall, or shall
cause its transfer agent to, remove the legend on the certificate representing
such shares within two business days of the receipt of a duly executed
Representation Letter of the Seller in substantially the form annexed hereto as
Schedule C;

     

    provided further, that, if any of the Sale
Shares are being sold pursuant to Rule 144 of the U.S. Securities Act, the
legend may be removed upon the delivery to Ryland’s transfer agent of an opinion
of counsel of recognized standing in form and substance reasonably satisfactory
to Ryland, to the effect that the legend is no longer required under applicable
requirements of the U.S. Securities Act or applicable state securities
laws.

     

    
      
        	
              	
                (b)

              	
                Property
      Consideration:  On Closing, convey, transfer and assign
      the Hardy Assets to Eternal, or its nominee, EERG Energy ULC, its wholly
      owned Canadian subsidiary, for a deemed value of CDN $240,001 (the "Property
      Consideration"), the same to be allocated as
    follows:

              


      

    

     

    
      
        	
              	
                (i)

              	
                Hardy PNG
      Rights:  CDN
$115,000;

              


      

    

     

    
      
        	
              	
                (ii)

              	
                Hardy
      Tangibles:  CDN $125,000;
and

              


      

    

     

    
      
        	
              	
                (iii)

              	
                Hardy Miscellaneous
      Interests:  CDN
$1.00.

              


      

    

     

    Eternal
acknowledges that the Hardy Assets are currently owned by Pebble and that
ownership will be transferred to Ryland prior to Closing; and

     

    
      
        	
              	
                (c)

              	
                Cash
      Consideration:  On June 1, 2010, pay to Eternal USD
      $3,000,000 (net of any required withholding taxes Ryland is obligated to
      deduct from the aforesaid payment and remit to the Canada Revenue Agency
      (the "CRA") as
      provided in Section 116 of the ITA) by way of wire transfer or as
      otherwise directed by Eternal in writing (the "Cash Consideration").
      Ryland acknowledges and agrees that a re-conveyance back to Eternal for
      60% of the Sale Royalties will be escrowed at Closing with Miller Thomson,
      solicitors for Ryland, who will be appointed as escrow agent, as security
      for the payment of the Cash Consideration.   The parties
      further agree that such re-conveyance of 60% of the Sale Royalties shall
      be released to Eternal immediately upon Ryland’s failure to pay the Cash
      Consideration by the close of business on June 1,
  2010.

              


      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

      - 7 -

       

    

    
      
        	
                5.

              	
                Canadian
      Tax
Matters.  

              


      

    

     

    
      
        	
              	
                (a)

              	
                Section 85
      Rollover:  It is the intention of the parties that the
      sale of the Sale Royalties will be effected as a "rollover" pursuant to
      section 85(1) of the Income Tax Act (Canada)
      (the "ITA") with the intent that Eternal will not be liable for the
      immediate payment of income tax in Canada on the Share Consideration, but
      rather will obtain a tax deferral until such time as Eternal sells the
      Sale Shares.  The parties will file all necessary documents with
      the CRA to evidence their election to effect the purchase and sale of the
      Sale Royalties as a transaction under section 85(1) of the ITA concurrent
      with the tax clearance application described in Clause 5(b)
      below.

              


      

    

     

    
      
        	
              	
                (b)

              	
                Withholding
      Tax:  Promptly following execution of this Agreement,
      Eternal, with the assistance of Ryland, will apply to the CRA for a tax
      clearance certificate under section 116 of the ITA to limit the Canadian
      withholding tax on the Property Consideration and the Cash Consideration
      to no more than 28%.  To that end, Eternal acknowledges that it
      may be required to prepare and file a tax return with the CRA in support
      of its application.

              


      

    

     

    
      
        	
              	
                (c)

              	
                Ryland
      Assistance:  Ryland agrees to instruct its Canadian tax
      advisors to provide all advice and assistance reasonably required by
      Eternal and its tax advisors to complete the application described above
      and all ancillary forms and to assist in filing same with the CRA and
      responding to questions and comments, all with a view to having Eternal's
      application granted within a reasonable
time.

              


      

    

     

    
      
        	
              	
                (d)

              	
                Possible
      Amendments:  The parties agree to amend this Agreement or
      execute such additional agreements as may be recommended by their tax
      advisors to more properly reflect their intentions as set out in this
      Section 5.

              


      

    

     

    
      
        	
              	
                (e)

              	
                GST and PST:
      Eternal acknowledges that it is liable for payment on Closing of federal
      GST and PST on the sale price of the Hardy Tangibles and the Hardy
      Miscellaneous Interests.

              


      

    

     

    
      
        	
                6.

              	
                Adjustments.  The
      effective date of the sale, conveyance, transfer and assignment of the
      Sale Royalties to Ryland and the conveyance, transfer and assignment of
      the Hardy Assets to Eternal will be April 1, 2010 (the "Effective Date"). The
      parties acknowledge and agree that, upon Closing and except as may
      hereafter be expressly provided to the contrary, Ryland (as to the Sale
      Royalties) and Eternal (as to the Hardy Assets) will assume and be
      responsible for 100% of all expenses and obligations associated with the
      assets they acquire hereunder but there will be no adjustment or accrual
      with respect to any expenses and obligations paid or incurred prior to the
      Effective Date.  For greater certainty, an adjustment will be
      made to reflect the royalties payable to Eternal by Pebble to March 31,
      2010 and payable in accordance with the Eternal Royalty Agreements. Final
      adjustments will be made by May 31,
2010.

              


      

    

     

    
      
        	
                7.

              	
                TSXV
      Acceptance.  This Agreement is subject to TSXV
      acceptance. Ryland agrees to make application to the TSXV for acceptance
      promptly upon execution of this Agreement and use its reasonable best
      efforts to obtain such acceptance within 30 days of execution. Eternal
      agrees to assist Ryland by providing such information as the TSXV may
      reasonably require and which is within Eternal's knowledge or
      control.

              


      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

      - 8 -

       

    

    
      
        	
                8.

              	
                Closing.  The Closing shall
      take place at 2:00 pm on the Closing Date in the offices of Ryland in
      Vancouver, BC or at such other date, time, place and manner as the parties
      may mutually agree upon in writing. On Closing (a) Eternal shall execute
      and deliver such general and specific conveyances, transfers and
      assignments and other documents as Ryland may reasonably require to
      complete the sale, conveyance, transfer and assignment of the Sale
      Royalties, and (b) Ryland shall deliver the TSXV acceptance letter and a
      certificate representing the Sale Shares and, further, Ryland shall
      execute and deliver such general and specific conveyances, transfers and
      assignments and other documents as Eternal may reasonably require to
      complete the conveyance, transfer and assignment of the Hardy
      Assets.  Each party shall also deliver such further
      documentation as the other party may reasonably request to complete the
      transactions contemplated hereby including, without limitation, officer's
      certificates in respect of each party's representations and warranties and
      any required escrow documentation to secure the payment of the Cash
      Consideration.  All documentation delivered at Closing shall be
      in form and substance satisfactory to the parties, acting
      reasonably.
      Eternal shall deliver to Ryland all of its files and other records
      pertaining to the Sale Royalties as soon as commercially reasonable
      following Closing and Ryland, in turn, shall deliver to Eternal all of its
      lease and agreement files and other records pertaining to the Hardy Assets
      as soon as commercially reasonable following
  Closing.

              


      

    

     

    
      
        	
                9.

              	
                Pre-Closing
      Hardy Operations.  Prior to Closing, Ryland shall cause
      the Hardy Assets to be maintained in the ordinary course of business,
      consistent with past practice and applicable law, and shall cause all
      obligations under the relevant mineral leases and any other agreements
      affecting the Hardy Assets to be performed and complied with and neither
      Ryland nor Pebble shall, without Eternal's prior written consent, commence
      or consent to any operation in respect of the Hardy Assets, remove or
      dispose of any of the Hardy Assets, amend any Hardy Lease or other
      agreement affecting the Hardy Assets or grant any security interest in
      respect of the Hardy Assets.

              


      

    

     

    
      
        	
                10.

              	
                Hardy
      Review Period.  Ryland agrees that Eternal shall have
      until March 31, 2010 to undertake a title review and
      environmental assessment in respect of the Hardy Assets ("Review
      Period").  On or before the end of the Review Period,
      Eternal shall advise Ryland in writing if in Eternal's sole opinion,
      acting reasonably, Ryland/Pebble's title to such interests is sufficient
      and it has obtained a satisfactory environmental assessment that it wishes
      to proceed with the sale of the Sale Royalties.  Failure to
      provide Ryland with such a notice prior to the expiration of the Review
      Period will be deemed to be an election by Eternal to
    proceed.

              


      

    

     

    
      
        	
                11.

              	
                Liability.

              


      

    

     

    
      
        	
              	
                (a)

              	
                Pre-Effective Date
      Obligations:  Eternal shall remain liable for all
      liabilities and obligations in respect of the Sale Royalties existing or
      that arise out of events occurring prior to the Effective Date and Eternal
      shall discharge and satisfy such liabilities and obligations and indemnify
      Ryland from and against any and all Claims associated
      therewith.  Subject to Clause 11(c), Ryland shall likewise
      remain liable for all liabilities and obligations in respect of the Hardy
      Assets existing or that arise out of events occurring prior to the
      Effective Date and Ryland shall discharge and satisfy such obligations and
      indemnify Eternal from and against any and all Claims associated
      therewith.

              


      

    

     

    
      
        	
              	
                (b)

              	
                Post-Effective Date
      Obligations:  Upon Closing, Ryland shall assume 100% of
      all liabilities and obligations in respect of the Sale Royalties arising
      or that arise out of events occurring after the Effective Date and Ryland
      shall discharge and satisfy such liabilities and obligations and indemnify
      Eternal from and against any and all Claims associated
      therewith.  Eternal, upon Closing, shall assume 100% of all
      liabilities and obligations in respect of the Hardy Assets (including,
      without limitation, those arising under the Hardy Leases or any other
      relevant agreements), arising or that arise out of events occurring after
      the Effective Date and Eternal shall discharge and satisfy such
      obligations and indemnify Ryland from and against any and all Claims
      associated therewith.

              


      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

      - 9 -

       

    

    
      
        	
              	
                (c)

              	
                Hardy Environmental
      Liabilities:  Notwithstanding anything else herein
      contained, Eternal agrees that it shall, upon Closing (i) be solely liable
      and responsible for any and all Claims relating to events or conditions
      on, prior to, and after the Effective Date which Ryland or Pebble may
      suffer, sustain, pay or incur, and (ii) indemnify and save Ryland and
      Pebble harmless from any and all Claims whatsoever which may be brought
      against or suffered by them or which they may sustain, pay or incur, in
      either case as a result of any matter or thing arising out of, resulting
      from, attributable to or connected with any Environmental Liabilities
      pertaining to the Hardy Assets, or any of them, including, without
      limitation, damage from or removal of hazardous or toxic substances,
      clean-up and the Abandonment and Reclamation Obligations.  Once
      Closing has occurred, Eternal shall be solely responsible for all
      Environmental Liabilities respecting the Hardy Assets and the performance
      of the Abandonment and Reclamation Obligations (as between Ryland/Pebble
      and Eternal), and releases Ryland and Pebble from any Claims Eternal may
      have against Ryland and Pebble with respect to all such liabilities and
      responsibilities.  The parties have taken into account Eternal's
      assumption of responsibility for the future Abandonment and Reclamation
      Obligations associated with the Hardy Assets, as set forth in this
      Agreement, and Ryland and Pebble's release of responsibility therefor when
      they determined the Property
Consideration.

              


      

    

     

    
      
        	
              	
                (d)

              	
                Pre-Closing
      Termination Options:  Notwithstanding the foregoing,
      should any liability or obligation arise after the Effective Date but
      prior to Closing which would materially affect the value of the Sale
      Royalties or the Hardy Assets, Ryland or Eternal, as applicable, shall
      have the option prior to Closing to terminate the proposed transactions by
      giving the other party written
notice.

              


      

    

     

    
      
        	
                12.

              	
                Representations
      and Warranties.

              


      

    

     

    
      
        	
              	
                (a)

              	
                Eternal:  Eternal
      makes the following  representations and warranties to Ryland,
      all of which shall be true and accurate in all material respects as of the
      Closing:

              


      

    

     

    
      
        	
              	
                (i)

              	
                Organization and
      Standing:  Eternal is a corporation duly organized,
      validly existing and in good standing under the laws of the State of
      Nevada;

              


      

    

     

    
      
        	
              	
                (ii)

              	
                Power and
      Authority:  Eternal has all requisite power and authority
      to carry on its business as presently conducted, to enter into this
      Agreement and to perform its obligations hereunder and this Agreement has
      been approved by all necessary corporate action on the part of
      Eternal.  The consummation of this Agreement will not violate,
      nor be in conflict with, (A) any provision of the governing documents of
      Eternal, (B) any agreements to which Eternal is a party, or (C) any
      judgment, decree, ordinance, law, regulation or permit. In particular, the
      within sale of the Sale Royalties and the proposed concurrent sale to
      Rover Resources, Inc. ("Rover") of Eternal's
      interest in certain North Dakota hydrocarbon properties (the "Border Acreage Sale")
      does not constitute a sale of substantially all of Eternal's assets and,
      consequently, Eternal does not require the approval of its shareholders to
      enter into this Agreement or to perform its obligations
      hereunder;

              


      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

      - 10 -

       

    

    
      
        	
              	
                (iii)

              	
                Enforceability:  This
      Agreement and all other agreements and instruments executed in accordance
      herewith shall constitute the valid and binding obligation of Eternal
      enforceable in accordance with their respective terms, subject to
      applicable bankruptcy, insolvency, fraudulent conveyance, reorganization
      or similar laws affecting the rights of creditors generally and subject to
      the general principles of
equity;

              


      

    

     

    
      
        	
              	
                (iv)

              	
                Litigation:  To
      the best of Eternal’s knowledge, there is no claim, lawsuit, accident
      investigation, arbitration or administrative proceeding pending or
      threatened in any venue involving Eternal or the Sale Royalties which
      would or might have an adverse effect on the Sale Royalties or the ability
      of Eternal to consummate the transactions contemplated by this
      Agreement;

              


      

    

     

    
      
        	
              	
                (v)

              	
                No Consents or Rights
      of First Refusal:  Except for the consent of the royalty
      payors under the Eternal Royalty Agreements, there are no consents
      required or rights of first refusal or similar rights triggered as a
      result of the contemplated sale of the Sale
  Royalties;

              


      

    

     

    
      
        	
              	
                (vi)

              	
                Compliance with
      Laws:  To the best of Eternal's knowledge, all laws,
      rules, regulations, ordinances and orders of all local, provincial and
      federal governmental bodies having jurisdiction over the Sale Royalties
      have been complied with;

              


      

    

     

    
      
        	
              	
                (vii)

              	
                Contracts:  Except
      for the Eternal Royalty Agreements, there are no other contractual
      arrangements with respect to the Sale Royalties;
  and

              


      

    

     

    
      
        	
              	
                (viii)

              	
                Full
      Disclosure:  To the best of Eternal's knowledge, none of
      the above representations and warranties fails to state a material fact
      necessary to make the statements contained therein not
      misleading.

              


      

    

     

    
      
        	
              	
                (b)

              	
                Ryland:  Ryland
      makes the following  representations and warranties to Eternal,
      all of which shall be true and accurate in all material respects as of the
      Closing:

              


      

    

     

    
      
        	
              	
                (i)

              	
                Organization and
      Standing:  Ryland is a corporation duly organized,
      validly existing and in good standing under the laws of the Province of
      Ontario and is authorized, operating through Pebble, to conduct business
      in the Province of
Saskatchewan;

              


      

    

     

    
      
        	
              	
                (ii)

              	
                Power and
      Authority:  Ryland has all requisite power and authority
      to carry on its business as presently conducted, to enter into this
      Agreement and to perform its obligations hereunder and this Agreement has
      been approved by all necessary corporate action on the part of
      Ryland.  The consummation of this Agreement will not violate,
      nor be in conflict with, (A) any provision of the governing documents of
      Ryland, (B) any agreements to which Ryland is a party, or (C) any
      judgment, decree, ordinance, law, regulation or
  permit;

              


      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

      - 11 -

       

    

    
      
        	
              	
                (iii)

              	
                Enforceability:  This
      Agreement and all other agreements and instruments executed in accordance
      herewith shall constitute the valid and binding obligation of Ryland
      enforceable in accordance with their respective terms subject to
      applicable bankruptcy, insolvency, fraudulent conveyance, reorganization
      or similar laws affecting the rights of creditors generally and subject to
      the general principles of
equity;

              


      

    

     

    
      
        	
              	
                (iv)

              	
                Litigation:  To
      the best of Ryland’s knowledge, there is no claim, lawsuit, accident
      investigation, arbitration or administrative proceeding pending or
      threatened in any venue involving Ryland or the Hardy Assets which would
      or might have an adverse effect on the Hardy Assets or the ability of
      Ryland to consummate the transactions contemplated by this
      Agreement;

              


      

    

     

    
      
        	
              	
                (v)

              	
                Material
      Agreements:  All of the material agreements which relate
      to or otherwise affect the Hardy Assets are listed in Schedule
      "B";

              


      

    

     

    
      
        	
              	
                (vi)

              	
                Taxes
      Paid:  All taxes and assessments based upon or measured
      by the ownership of the Hardy Assets which have become due and payable
      prior to the Effective Date have been timely paid and any of the foregoing
      which need to be paid prior to Closing will likewise be timely
      paid;

              


      

    

     

    
      
        	
              	
                (vii)

              	
                Lease Burdens
      Paid:  All rentals and other financial burdens arising in
      respect of the Hardy Assets have been timely and properly paid and will
      continue to be timely and properly paid up to
  Closing;

              


      

    

     

    
      
        	
              	
                (viii)

              	
                Validity of
      Leases:  Ryland has not received any notices of default
      in respect of the Hardy Leases or any other agreements related to the
      Hardy Assets and, to the best of Ryland's knowledge, the foregoing leases
      and agreements are in full force and
effect;

              


      

    

     

    
      
        	
              	
                (ix)

              	
                No Consents or Rights
      of First Refusal:  There are no consents required or
      rights of first refusal or similar rights triggered as a result of the
      contemplated sale and transfer of the Hardy
  Assets;

              


      

    

     

    
      
        	
              	
                (x)

              	
                Compliance with
      Laws:  To the best of Ryland's knowledge, all laws,
      rules, regulations, ordinances and orders of all local, provincial and
      federal governmental bodies having jurisdiction over the Hardy Assets have
      been complied with;

              


      

    

     

    
      
        	
              	
                (xi)

              	
                No Proposals or
      Commitments:  No proposals or commitments exist that
      would obligate Eternal to make expenditures in respect of the Hardy Assets
      after the Effective Date other than routine expenses incurred in the
      normal operation of the Hardy Assets, other than any expenditures which
      Eternal may choose to make in order to meet the offset obligations set out
      in those two Notices of Offset Obligations issued May 15, 2009 by the
      Saskatchewan Ministry of Energy and Resources in respect of Lease PN61692,
      copies of which have been delivered to
Eternal;

              


      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      
         

        - 12 -

         

      

    

    
      
        	
              	
                (xii)

              	
                Hardy
      Environmental:  Pebble has not been charged with and, to
      the best of Ryland's knowledge, there are no pending charges or
      investigations against Pebble relating to any breach of Environmental
      Regulations,  nor has Pebble any knowledge of any breach of
      Environmental Regulations, nor any knowledge of the basis for a claim by
      any third party (including governmental authorities) of pollution or other
      environmental damage arising from the Hardy Assets or the ownership
      thereof, and Pebble has not received (i) any orders or directives under
      the Environmental Regulations which relate to Environmental Liabilities
      and which require any work, repairs, construction or capital expenditures
      with respect to the Hardy Assets, where such orders or directives have not
      been complied with in all material respects; or (ii) any demand or notice
      issued under the Environmental Regulations with respect to the breach of
      any environmental, health or safety law applicable to the Hardy Assets
      including, without limitation, any Environmental Regulations relating to
      the release, use, storage, treatment, transportation or disposition of
      environmental contaminants, which demand or notice remains
      outstanding;

              


      

    

     

    
      
        	
              	
                (xiii)

              	
                Contracts:  To
      the best of Ryland's knowledge, there are no gas contracts, gas balancing
      or similar arrangements, agreements for the transportation, processing or
      disposal of hydrocarbons, joint operating agreements or contract operating
      agreements affecting the Hardy
Assets;

              


      

    

     

    
      
        	
              	
                (xiv)

              	
                No Wells other than
      the Hardy Well:  To the best of Ryland's knowledge ,
      except for the Hardy Well, there are no wells located on or directly
      related to the operation of the Hardy
Assets;

              


      

    

     

    
      
        	
              	
                (xv)

              	
                No Areas of Mutual
      Interest:  To the best of Ryland's knowledge, the Hardy
      Assets are not subject to an agreement which provides for an area of
      mutual interest;

              


      

    

     

    
      
        	
              	
                (xvi)

              	
                Sale
      Shares:  The Sale Shares will on issuance be fully paid
      and non-assessable and will be listed for trading on the
    TSXV;

              


      

    

     

    
      
        	
              	
                (xvii)

              	
                Securities
      Filings:  The Sale Shares will be issued to Eternal
      pursuant to an exemption from the registration and prospectus requirements
      of applicable securities laws and regulations. Forthwith after the
      Closing, Ryland shall file such forms and documents as may be required
      under the applicable securities laws and regulations in Canada relating to
      the issuance of the Sale Shares, including a Form 45-106F1 as prescribed
      by National Instrument
45-106;

              


      

    

     

    
      
        	
              	
                (xviii)

              	
                Full
      Disclosure:  To the best of Ryland's knowledge, none of
      the above representations and warranties fails to state a material fact
      necessary to make the statements contained therein not misleading;
      and

              


      

    

     

    
      
        	
              	
                (xix)

              	
                SEDAR
      Filings:  All documents filed by Ryland on SEDAR (the
      “Ryland Disclosure
      Documents”) as of their respective dates, were filed on a timely
      basis and in compliance in all material respects with all applicable
      legislation and did not, when filed, contain any untrue statement of a
      material fact or omit to state any material fact required to be stated
      therein or necessary in order to make the statements therein not
      misleading.  As of their respective dates, the financial
      statements of Ryland included in the Ryland Disclosure Documents complied
      as to form in all material respects with applicable accounting
      requirements and legislation.  Such financial statements fairly
      presented the financial position of Ryland at and as of the dates thereof
      and the results of its operations, cash flows, and changes in
      shareholders’ equity for the periods then
ended.

              


      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      
         

        - 13 -

         

      

    

    
      
        	
                13.

              	
                Conditions
      of Closing.  The obligations of the parties to close the
      subject transactions shall be subject to satisfaction of the following
      conditions, which may be waived by notice in
  writing:

              


      

    

     

    
      
        
          	
                	
                  a)

                	
                  TSXV
      Acceptance:  The TSXV shall have accepted for filing this
      Agreement on the terms set out
herein;

                


        

      

    

     

    
      
        	
              	
                (b)

              	
                Compliance with
      Agreement:  Each party shall have delivered all documents
      required to be delivered by it and otherwise complied with the terms of
      this Agreement in all material
respects;

              


      

    

     

    
      
        	
              	
                (c)

              	
                Representations and
      Warranties:  The representations and warranties of each
      party shall be true and accurate in all material respects on and as of
      Closing;

              


      

    

     

    
      
        
          	
                	
                  d)

                	
                  No Material Adverse
      Change:  Prior to Closing, no material adverse change in
      the Sale Royalties or the Hardy Assets or the business conducted in
      relation thereto shall have occurred, whether by casualty or otherwise;
      and

                


        

      

    

     

    
      
        	
              	
                (e)

              	
                Concurrent Closing of
      Border Acreage Sale:  Rover and Eternal shall
      concurrently close the Border Acreage
Sale.

              


      

    

     

    
      
        	
                14.

              	
                Casualty.  The
      risk of loss due to fire or other casualty or condemnation shall be with
      Eternal (as to the Sale Royalties) and Ryland (as to the Hardy Assets) at
      all times prior to Closing and shall be borne 100% by Ryland (as to the
      Sale Royalties) and Eternal (as to the Hardy Assets)
      thereafter.  If any material portion of the assets generating
      the Sale Royalties or the Hardy Assets shall be damaged, destroyed or
      condemned prior to Closing (or if condemnation is threatened), Eternal and
      Ryland shall each have the right to terminate this Agreement at or prior
      to Closing without further obligation to the non-terminating
      party.

              


      

    

     

    
      
        	
                15.

              	
                Survival.  The
      representations and covenants of Eternal and Ryland shall survive Closing
      for a period of 6 months and shall be deemed to apply to all agreements
      and instruments executed in accordance herewith, it being the express
      intention of the parties that there shall not be any merger of the
      aforesaid representations and covenants notwithstanding any rule of law,
      equity of statute to the contrary, all such rules being
      waived.  Each of Eternal and Ryland shall indemnify the other
      from and against all Claims arising within the aforesaid survival period
      which are occasioned by reason of a representation being untrue or
      inaccurate.

              


      

    

     

    
      
        	
                16.

              	
                No
      Consequential Damages.  No party shall be liable to the
      other hereunder for indirect, consequential, special or punitive damages
      including, without limitation, loss of future revenue, income or profits,
      diminution of value or loss of business reputation or
      opportunity.

              


      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      
         

        - 14 -

         

      

    

    
      
        	
                17.

              	
                Press
      Releases.  The parties each acknowledge that the other is
      a publicly traded entity and that each shall be required to issue a press
      release concerning this Agreement and the transactions contemplated
      hereunder.  Nothing herein shall prevent a party from furnishing
      any information to any governmental agency or regulatory authority or to
      the public insofar and to the extent such disclosure is required by
      applicable law (including, without limitation, securities laws or the
      rules or regulations of any stock exchange applicable to such party),
      provided that a party which proposes to make such a public disclosure
      shall, to the extent reasonably possible, provide the other party with a
      draft of such statement in sufficient time prior to its release to enable
      such other party to review such draft and advise the disclosing party of
      any comments it may have with respect
thereto.

              


      

    

     

    
      
        	
                18.

              	
                Amendment.  This
      Agreement may only be amended by a formal written instrument executed by
      proper signing officers for the
parties.

              


      

    

     

    
      
        	
                19.

              	
                Waiver.  The
      parties acknowledge and agree that any waiver of the provisions of this
      Agreement shall only be binding upon the waiving party if evidenced in
      writing and signed on behalf of the waiving party; any such waiver shall
      apply only to the particular breach, default, obligation or provision
      specifically identified and waived and not to any other breaches,
      defaults, obligations or provisions, whether or not similar; any such
      waiver shall not constitute a continuing waiver unless expressly stated;
      and any delay or omission on the part of a party in exercising any right
      or power under this Agreement shall not impair the ability of such party
      to exercise such right or power or be considered to be a waiver of, or
      acquiescence to, any breach or
default.

              


      

    

     

    
      
        	
                20.

              	
                Notices.  Any
      notices which may be required to be given under the terms of this
      Agreement shall be in writing and shall be considered duly delivered if
      personally delivered or sent by facsimile to the addresses of the parties
      as set out below:

              


      

    

     

    
      
        	
                

                  If to Ryland:

                

              	 	
                

                  If to Eternal:

                

              
	
                 

              	 	
                 

              
	
                

                  Ryland
      Oil Corporation

                

              	 	
                Eternal
      Energy Corp.

              
	
                Suite
      302, 1620 West 8th
      Avenue

              	 	
                2549
      West Main Street, Suite 202

              
	
                Vancouver,
      British Columbia

              	 	
                Littleton,
      Colorado

              
	
                V6J
      1V4

              	 	
                80120

              
	
                Facsimile:     

              	
                604.639.4458

              	 	
                Facsimile:     

              	
                303.798.5767

              
	
                Attn: 

              	
                Gerry
      Shields

              	 	
                Attn:  

              	
                Brad
      Colby

              
	 	
                President

              	 	 	
                Chief
      Executive Officer

              


      

       

    

    
      
        	
                21.

              	
                Non-Assignable.  This
      Agreement is not assignable by either
party.

              


      

    

     

    
      
        	
                22.

              	
                Inurement.  This
      Agreement shall be binding upon and inure to the benefit of the parties
      and their respective successors, receivers, receiver-managers and
      trustees.

              


      

    

     

    
      
        	
                23.

              	
                Headings.  The
      headings utilized in this Agreement are inserted for convenience of
      reference only and shall not affect the construction of the provisions
      hereof.

              


      

    

     

    
      
        	
                24.

              	
                Gender
      and Number.  This Agreement shall be read with all
      changes in gender and number as may be required by the
      context.

              


      

    

     

    
      
        	
                25.

              	
                Conflict.  Wherever
      any provision, whether express or implied, of any schedule conflicts or is
      at variance with any provision of the main body of this Agreement, the
      provision in the main body shall prevail. Wherever any provision, whether
      express or implied, of this Agreement conflicts or is at variance with any
      documentation issued in furtherance thereof, the provision of this
      Agreement shall prevail.

              


      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      
         

        - 15 -

         

      

    

    
      
        	
                26.

              	
                Weekend
      or Holiday Dates.  If any date for the payment of monies
      or the fulfillment of an obligation or any other stipulated deadline falls
      on a Saturday, Sunday or statutory holiday, such date will be postponed to
      the next following business day unless the parties expressly agree to the
      contrary.

              


      

    

     

    
      
        	
                27.

              	
                Governing
      Law/Courts.

              


      

    

     

    
      
        	
              	
                (a)

              	
                Governing
      Laws:  This Agreement shall, in all respects, be subject
      to, interpreted, construed and enforced in accordance with and under the
      laws of the Province of Alberta and the laws of Canada applicable therein
      and shall, in every regard, be treated as a contract made in the Province
      of Alberta.  To the extent that the location of the Royalty
      Lands or the Hardy Assets in the Province of Saskatchewan requires the
      application of the laws in force in the Province of Saskatchewan, such
      laws shall be adduced as evidence in the Alberta courts having
      jurisdiction in respect of a dispute arising
  hereunder.

              


      

    

     

    
      
        	
              	
                (b)

              	
                Courts:  The
      parties irrevocably attorn and submit to the exclusive jurisdiction of the
      courts of the Province of Alberta and courts of appeal therefrom in
      respect of all matters arising out of this
  Agreement.

              


      

    

     

    
      
        	
                28.

              	
                Invalidity
      of Provisions.  If any provision of this Agreement or the
      application thereof to any party or circumstance shall to any extent be
      held invalid, illegal or unenforceable by a court of competent
      jurisdiction, the remainder of this Agreement, the application of such
      provision to parties or circumstances other than those to which it is held
      invalid, illegal or unenforceable or the validity, legality or
      enforceability of such provision in any other jurisdiction shall not in
      any way be affected or impaired thereby and such provision shall be
      severable from this Agreement to the extent of such invalidity, illegality
      or unenforceability.

              


      

    

     

    
      
        	
                29.

              	
                Negotiated
      Transaction.  The parties have participated jointly in
      the negotiation and drafting of this Agreement and, in the event an
      ambiguity or question of intent or interpretation arises, this Agreement
      shall be construed as jointly drafted by the parties and no presumption or
      burden of proof shall arise favouring or disfavouring any party by virtue
      of the authorship of any provision of this
  Agreement.

              


      

    

     

    
      
        	
                30.

              	
                Further
      Assurances, Intent.  It is Eternal’s intent to convey to
      Ryland 100% of Eternal’s right, title, estate and interest in and to the
      Sale Royalties, legal, beneficial or equitable, and it is likewise
      Ryland’s intent to, among other things, convey to Eternal 100% of
      Ryland/Pebble’s right, title, estate and interest in and to the Hardy
      Assets, legal, beneficial or equitable.  In this regard, both
      parties agree to execute and deliver all such instruments, conveyances and
      other documents and do such other acts not inconsistent with the terms of
      this Agreement as may be necessary or advisable to carry out each party’s
      intent as stated herein.

              


      

    

     

    
      
        	
                31.

              	
                Complete
      Agreement.  This Agreement constitutes the complete
      agreement between the parties regarding the matters addressed herein and
      shall supercede all prior agreements between the parties in relation
      thereto, whether written or oral.  In addition, each of Ryland
      and Eternal acknowledges and agrees that this Agreement and the agreement
      providing for the Border Acreage Sale supercede and replace that certain
      Letter Agreement dated November 25, 2009 between Ryland and Eternal, and
      the Lock Up Agreements executed in conjunction therewith by the officers
      and directors of Eternal, pursuant to which Ryland was going to acquire
      all of the issued and outstanding shares of common stock of
      Eternal.

              


      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      
         

        - 16 -

         

      

    

    
      
        	
                32.

              	
                Counterpart
      Execution/Delivery.  This Agreement may be executed in
      one or more counterparts, each of which shall be considered an original
      but all of which together shall constitute one and the same instrument. In
      addition, facsimile or scanned email copies of executed counterparts shall
      be conclusively regarded for all purposes as originally executed
      counterparts pending the delivery of the
  originals.

              


      

    

     

    Please confirm your agreement to the
foregoing by signing and returning a copy of this Agreement to the attention of
the undersigned prior to
4:30 p.m. MST on March 26, 2010.

    


    Sincerely,

    


    RYLAND
OIL CORPORATION

    


    Per:          /s/ Gerald J.
Shields                     
     

    Gerald J.
Shields

    President

     

    AGREED to
and ACCEPTED this 26th day of March, 2010.

    


     

    ETERNAL
ENERGY CORP.

    


    Per:          /s/ Bradley M.
Colby                        


    Bradley M. Colby

    Chief Executive Officer