Exhibit 10.5


 


COMBINATION AGREEMENT


 


This
Combination Agreement (this “Agreement”)
is entered into as of August 1, 2005 by and among Stroud Oil Properties, Inc.,
an Oklahoma corporation (“SOP”), all
the shareholders of SOP as listed on the signature page to this Agreement,
Stroud Energy Management, Ltd., a Texas limited partnership (“Management”), all the limited
partners of Management as listed on the signature page to this Agreement,
Stroud Energy, Ltd., a Texas limited partnership (“Stroud
Ltd.”), all the limited partners of Stroud Ltd. as listed on the
signature page to this Agreement, and Stroud Energy, Inc., a Delaware
corporation (“Newco”).  The shareholders (and limited partners after
the merger described below) of SOP and the limited partners of Management and
Stroud Ltd. (other than SOP) are collectively referred to as the “Owners”.


 


RECITALS


 


The
Owners desire to exchange their ownership interests in SOP, Management and
Stroud Ltd. for stock in Newco through the series of transactions contemplated by
this Agreement.


 


The
following actions have been taken prior to the date hereof or will be taken
prior to the date of the closing described herein:


 


1.             Newco was formed immediately
prior to the date hereof to participate in this reorganization.


 


2.             Newco formed a new
wholly-owned Delaware limited liability company (“GP LLC”).


 


3.             Newco formed a new
wholly-owned Delaware limited liability company (“LP LLC”).


 


4.             GP LLC and Newco have formed
a new Delaware limited partnership (“SOP Ltd.”)
to participate in the merger described in Section 1.6, with GP LLC serving
as sole general partner with a 0.1 % general partnership interest in SOP Ltd.
and Newco serving as sole limited partner with a 99.9% limited partnership
interest in SOP Ltd.


 


Pursuant
to this Agreement, each of the following matters shall occur in the order
stated:


 


1.             Stroud Ltd., Management and
SOP will make any tax distribution required to allow their owners to pay tax on
their share of undistributed taxable income for 2005.


 


2.             All Owners will transfer
their ownership interests in SOP, Management and Stroud Ltd. (except the
preferred limited partnership interests) to Newco in exchange for Newco common
stock.


 


3.             Newco will issue Newco
common stock to the Owners.


 


4.             Immediately after the
preceding step, Newco will transfer 0.1% of its stock in SOP to GP LLC.


 


1





















 


5.             Immediately after the
preceding step, SOP will be merged into SOP Ltd., and will elect to be treated
as a corporation for tax purposes.


 


6.             Newco will transfer all its
99.9% limited partnership interests in SOP Ltd. to LP LLC.


 


7.             Management will be converted
into a Texas limited liability company (“SEM LLC”).


 


8.             Newco will transfer all its membership
interests in SEM LLC to SOP Ltd.


 


9.             Newco will transfer all its
limited partnership interests in Stroud Ltd. to SOP Ltd.


 


10.           Newco will transfer offering
proceeds to SOP Ltd. in an amount sufficient for the purchase of the preferred
partnership interests in Stroud Ltd.


 


11.           SOP Ltd. will purchase the
preferred partnership interests in Stroud Ltd.


 


ARTICLE I

Transfers of Various Ownership Interests


 


The parties hereby agree, as promptly as reasonably practicable, to
undertake the following transactions in the order set forth in this Article.


 


Section 1.1             Tax Distribution.  Prior to the transfer of ownership interests
to Newco pursuant to Section 1.2, Stroud Ltd. will estimate its “Presumed
Partnership Tax Liability” (as defined in Section 5.8 of the Third Amended
and Restated Agreement of Limited Partnership of Stroud Ltd., dated January 1,
2004 (“Stroud Ltd.’s Partnership Agreement”))
as of the Closing (as hereinafter defined) and make a tax distribution in
accordance with such Section 5.8 of Stroud Ltd.’s Partnership Agreement to
allow the Owners to pay tax on their direct or indirect share of Stroud Ltd.’s
undistributed taxable income for the short taxable year ending on the Closing.  Following this distribution by Stroud Ltd.,
Management and SOP will make similar tax distributions to allow their Owners to
pay tax on their direct or indirect shares of Management’s and SOP’s
undistributed taxable income for the short taxable year ending on the Closing.


 


Section 1.2             Transfer of Ownership Interests
to Newco.  Pursuant to the
form of Assignment attached hereto as Exhibit A or the form of
Assignment and Stock Power attached hereto as Exhibit B, as
applicable, each Owner will grant, contribute, transfer, assign and convey to Newco,
its successors and assigns, all its right, title and interest in and to all its
ownership interests in SOP, Management and Stroud Ltd. as shown on Schedule I
attached hereto, and Newco will accept these ownership interests as a
contribution to the capital of Newco.


 


Section 1.3             Receipt of Stock in Newco.  The parties hereto acknowledge that the
transactions described in this Agreement constitute “Capital Transactions” and
the proceeds thereof constitute “Capital Proceeds” as defined in Stroud Ltd.’s
Partnership Agreement.  In exchange for
the transfers described above, Newco will issue shares of Newco common stock to
each Owner assuming a relative value for each Owner’s ownership interest and
calculated in


 


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accordance with Section 5.6(c) of
Stroud Ltd.’s Partnership Agreement (except for the preferred partnership
interests in Stroud Ltd. which will be purchased pursuant to Section 1.12)
and in keeping with the examples of calculations shown on Schedule II
attached hereto; provided, however, that the Reserved Class B Interests that
were to be issued to members of management under Management’s Partnership
Agreement, but have not been specifically allocated, will become reserved
shares (the “Unallocated Class B Interest Shares”)
retained by Newco for future issuance in accordance with the Stroud Energy, Inc.
2005 Restricted Stock Plan (the “Newco Restricted Stock
Plan”) and, independent of the calculation referred to above,
shall be fixed in number at 226,608 shares. 
  The Unallocated Class B
Interest Shares would otherwise have been issued to Owners of SOP by virtue of
SOP’s ownership of Class B Partnership Interests in Management as of the
Closing.  Shares of Newco common stock
issued in exchange for the Class B Partnership Interests in Management
that were granted to management employees in May 2005 and that are subject
to forfeiture restrictions as of the Closing shall be issued pursuant to the
Newco Restricted Stock Plan and such shares of Newco common stock shall be
subject to the same forfeiture restrictions as were in effect with respect to
such Class B Partnership Interests prior to the Closing.  Shares of Newco common stock issued in
exchange for Class B Partnership Interests in Management that were issued
to management employees prior to May 2005 shall not be subject to forfeiture
and shall be fully vested.


 


Section 1.4             Newco Stock Incentive Plan and
Restricted Stock Plan.  In connection with the transactions
contemplated by this Agreement but prior to the merger of SOP described in Section 1.6
and the consummation of the Private Offering, (i) the Stroud Oil
Properties, Inc. 2001 Stock Incentive Plan (the “SOP Plan”)
will be assumed and adopted by Newco and restated into the form of the Newco
Stock Incentive Plan and (ii) the Newco Stock Incentive Plan and the Newco
Restricted Stock Plan will be approved and adopted by the board of directors
and the stockholders of Newco.  Upon the
consummation of the Private Offering, outstanding options under the SOP Plan
will be assumed by Newco and adjusted to become options to purchase shares of
Newco common stock in accordance with the rules set forth in Treasury
Regulations Section 1.424-1(a).


 


Section 1.5             Transfer of Ownership Interests
in SOP by Newco.  Pursuant to the
form of Assignment and Stock Power attached hereto as Exhibit B,
Newco will grant, contribute, transfer, assign and convey to GP LLC, its
successors and assigns, all its right, title and interest in and to 0.1% of its
stock in SOP as shown on Schedule I attached hereto, and GP LLC
will accept these ownership interests as a contribution to the capital of GP
LLC.


 


Section 1.6             Merger of SOP.  Newco will take all actions necessary or
convenient under the Oklahoma General Corporation Act and the Limited
Partnership Act of the State of Delaware to cause SOP to merge into SOP Ltd.
and the surviving entity will file an election to be treated as a corporation
for federal tax purposes.


 


Section 1.7             Transfer of Ownership Interests
in SOP Ltd. by Newco.  Pursuant to the
form of Assignment attached hereto as Exhibit A, Newco will grant, contribute,
transfer, assign and convey to LP LLC, its successors and assigns, all its
right, title and interest in and to all its 99.9% limited partnership interests
in SOP Ltd. as shown on Schedule I attached hereto, and LP LLC will
accept these ownership interests as a contribution to the capital of LP LLC.


 


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Section 1.8             Conversion of Management.  Newco will take all actions necessary or
convenient under the Texas Revised Limited Partnership Act and the Texas
Limited Liability Company Act to cause Management to convert to a Texas limited
liability company.


 


Section 1.9             Transfer of Ownership Interests
in SEM LLC by Newco to SOP Ltd.  Pursuant to the form of
Assignment attached hereto as Exhibit A, Newco will grant,
contribute, transfer, assign and convey to SOP Ltd., its successors and
assigns, all its right, title and interest in and to all its membership
interests in SEM LLC as shown on Schedule I attached hereto, and
SOP Ltd. will accept these membership interests.


 


Section 1.10           Transfer
of Ownership Interests in Stroud Ltd. by Newco.  Pursuant to the form of
Assignment attached hereto as Exhibit A, Newco will grant,
contribute, transfer, assign and convey to SOP Ltd., its successors and
assigns, all its right, title and interest in and to all its limited
partnership interests in Stroud Ltd. as shown on Schedule I
attached hereto, and SOP Ltd. will accept these ownership interests.


 


Section 1.11           Contribution
of Proceeds by Newco.  Newco will contribute proceeds of the Private
Offering (as hereinafter defined) to SOP Ltd. in an amount sufficient to make
the purchase of preferred partnership interests in Stroud Ltd. pursuant to Section 1.12.


 


Section 1.12           Purchase
of Preferred Partnership Interests.  Pursuant to the form of Purchase Agreement
attached hereto as Exhibit C, SOP Ltd. will purchase, and the EnCap
Partners (as hereinafter defined) will sell, the preferred partnership
interests in Stroud Ltd. for a cash purchase price using proceeds of the
Private Offering received pursuant to Section 1.11.


 


ARTICLE II

Closing


 


Section 2.1             Closing.  The closing of the transactions described in ARTICLE I
(the “Closing”) will occur immediately
prior to, and at the place of, the closing of the private offering of Newco common
stock with proceeds and on terms satisfactory to Newco in its sole discretion
(the “Private Offering”).


 


Section 2.2             Registration Rights.  Prior to the Closing, each Owner will have
entered into a Registration Rights Agreement with Newco in substantially the
form attached hereto as Exhibit D.


 


ARTICLE III

Tax Matters


 


Section 3.1             Tax Treatment.


 


(a)           The parties hereto intend
for the transactions described in Section 1.2 to qualify under Section 351(a) of
the Internal Revenue Code of 1986, as amended (the “Code”).  The parties agree to report the transactions
in accordance with the foregoing sentence on all federal income tax and
information returns and reports.


 


4





















 


(b)           Although the parties will
report the transactions described in Section 1.2 as a tax-free exchange
under Section 351 of the Code, Newco is giving no assurances in this
regard.  Further, the tax treatment of
the transactions may differ for various Owners. 
Accordingly, each Owner is expected to consult his, her, or its own tax
advisor regarding the tax effects of the exchange.


 


(c)           Immediately after the Closing,
the parties hereto intend for (i) each of GP LLC and LP LLC to be treated
as disregarded as separate entities from Newco for federal tax purposes and (ii) each
of SEM LLC and Stroud Ltd. to be treated as disregarded as separate entities
from SOP Ltd. for federal tax purposes. 
The parties agree to file all federal income tax returns and reports in
accordance with the foregoing sentence.


 


Section 3.2             Allocation of 2005 Taxable Income.  The parties hereto agree to
allocate the taxable income of Stroud Ltd. for the 2005 taxable year between
the period ending on the Closing and the period thereafter based on an interim
closing of the books as of the Closing.


 


Section 3.3             Tax Distribution.  The parties hereto agree that Stroud Ltd.,
Management and SOP will make tax distributions to their Owners as provided in Section 1.1.


 


Section 3.4             Partnership Termination.  Each party hereto acknowledges that Stroud
Ltd. will be treated as terminated for federal income tax purposes under Section 708
of the Code as of the Closing.


 


ARTICLE IV

Further Assurances


 


From time to time after the date
hereof, and without any further consideration, each of the parties to this
Agreement shall execute, acknowledge and deliver all such additional instruments,
notices and other documents and will do all such other acts and things, all in
accordance with applicable law, as may be necessary or convenient to more fully
and effectively carry out the purposes and intent of this Agreement.


 


ARTICLE V

Consents and Other Requirements


 


Section 5.1             Admission of Limited Partners in
Management.


 


(a)           SOP, as the general partner
of Management, hereby consents, as required for such transfers by Article VII
of the Limited Partnership Agreement of Management, dated January 1, 2004
(“Management’s Partnership Agreement”),
to all transfers of limited partnership interests in Management provided for in
this Agreement.


 


(b)           SOP, as the general partner
of Management and sole owner of SEM LLC, hereby consents, as required by Article VII
of Management’s Partnership Agreement, to the admission of Newco and SOP Ltd.,
pursuant to Section 1.2 and Section 1.9 respectively, as substituted
partners or members of Management and SEM LLC, respectively.


 


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(C)          AS REQUIRED BY SECTION 7.02
OF MANAGEMENT’S PARTNERSHIP AGREEMENT, EACH OWNER OF MANAGEMENT HEREBY AGREES
TO INDEMNIFY AND HOLD HARMLESS MANAGEMENT AND ALL THE OTHER OWNERS OF
MANAGEMENT FROM AND AGAINST ANY COSTS, DAMAGES, CLAIMS, SUITS OR FEES SUFFERED
OR INCURRED BY MANAGEMENT OR THE OTHER OWNERS OF MANAGEMENT ARISING OUT OF OR
RESULTING FROM ANY CLAIMS IN CONNECTION WITH THE TRANSFERS BY SUCH OWNER OF LIMITED
PARTNERSHIP INTERESTS IN MANAGEMENT PROVIDED FOR IN THIS AGREEMENT.  EACH OWNER OF SEM LLC ALSO HEREBY AGREES TO
INDEMNIFY AND HOLD HARMLESS SEM LLC AND ALL THE OTHER OWNERS OF SEM LLC FROM
AND AGAINST ANY COSTS, DAMAGES, CLAIMS, SUITS OR FEES SUFFERED OR INCURRED BY
SEM LLC OR THE OTHER OWNERS OF SEM LLC ARISING OUT OF OR RESULTING FROM ANY
CLAIMS IN CONNECTION WITH THE TRANSFERS BY SUCH OWNER OF MEMBERSHIP INTERESTS
IN SEM LLC PROVIDED FOR IN THIS AGREEMENT.


 


Section 5.2             Admission of Limited Partners in
Stroud Ltd.


 


(a)           Management (and after the
conversion described in Section 1.8, SEM LLC), as the general partner of Stroud
Ltd., hereby consents, as required for such transfers by Article XI of
Stroud Ltd.’s Partnership Agreement, to all transfers of limited partnership
interests in Stroud Ltd. provided for in this Agreement.


 


(b)           EnCap Energy Capital Fund
IV, L.P. and EnCap IV-B Acquisitions, L.P. (the “EnCap
Partners”) hereby consent, as required for such transfers by Article XI
of Stroud Ltd.’s Partnership Agreement, to all transfers of limited partnership
interests in Stroud Ltd. provided for in this Agreement.


 


(c)           Management (and after the
conversion described in Section 1.8, SEM LLC), as the general partner of Stroud
Ltd., hereby consents, as required by Article XI of Stroud Ltd.’s
Partnership Agreement, to the admission of Newco and SOP Ltd., pursuant to Section 1.2
and Section 1.12 respectively, as substituted partners of Stroud Ltd.


 


(d)           The EnCap Partners hereby
consent, as required by Article XI of Stroud Ltd.’s Partnership Agreement,
to the admission of Newco and SOP Ltd., pursuant to Section 1.2 and Section 1.12
respectively, as substituted partners of Stroud Ltd.


 


Section 5.3             Transfers of Stock in SOP.  As they relate to the transfers of stock in
SOP provided for in this Agreement, SOP and each
Owner of SOP hereby waive all rights of notice and first refusal related to
transfers of stock in SOP provided by Section 6 of the Omnibus Agreement
between SOP, the Owners of SOP, Management, and the EnCap Partners, dated January 1,
2004 (the “Omnibus Agreement”).


 


Section 5.4             Termination of Omnibus Agreement.  Pursuant to Section 10(e) of the
Omnibus Agreement, the EnCap Partners and SOP hereby agree to terminate the
Omnibus Agreement effective as of the date of this Agreement.


 


6





















 


ARTICLE VI

Miscellaneous


 


Section 6.1             Order of Completion of
Transactions.  The transactions
provided for in ARTICLE I of this Agreement shall be completed in the
order set forth in that article.


 


Section 6.2             Headings; References;
Interpretation.  All article and
section headings in this Agreement are for convenience only and shall not
be deemed to control or affect the meaning or construction of any of the
provisions hereof.  The words “hereof,” “herein”
and “hereunder” and words of similar import, when used in this Agreement, shall
refer to this Agreement as a whole, including without limitation, all exhibits
attached hereto, and not to any particular provision of this Agreement.  All references herein to articles, sections,
and exhibits shall, unless the context requires a different construction, be
deemed to be references to the articles, sections and exhibits of this Agreement,
respectively, and all such exhibits and schedules attached hereto are hereby
incorporated herein and made a part hereof for all purposes.  All personal pronouns used in this Agreement,
whether used in the masculine, feminine or neuter gender, shall include all
other genders, and the singular shall include the plural and vice versa.  The use herein of the word “including”
following any general statement, term or matter shall not be construed to limit
such statement, term or matter to the specific items or matters set forth
immediately following such word or to similar items or matters, whether or not
non-limiting language (such as “without limitation,” “but not limited to,” or
words of similar import) is used with reference thereto, but rather shall be
deemed to refer to all other items or matters that could reasonably fall within
the broadest possible scope of such general statement, term or matter.


 


Section 6.3             Successors
and Assigns.  The Agreement shall be binding upon and inure
to the benefit of the parties signatory hereto and their respective successors
and assigns.


 


Section 6.4             No Third
Party Rights.  The provisions
of this Agreement are intended to bind the parties signatory hereto as to each
other and are not intended to and do not create rights in any other person or
confer upon any other person any benefits, rights or remedies and no person is
or is intended to be a third party beneficiary of any of the provisions of this
Agreement.


 


Section 6.5             Counterparts.  This Agreement may be
executed in any number of counterparts, all of which together shall constitute
one agreement binding on the parties hereto.


 


Section 6.6             Governing Law.  This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Texas applicable to
contracts made and to be performed wholly within such state without giving
effect to conflict of law principles thereof, except to the extent that it is
mandatory that the law of some other jurisdiction shall apply.


 


Section 6.7             Severability.  If any of the provisions of this Agreement
are held by any court of competent jurisdiction to contravene, or to be invalid
under, the laws of any political body having jurisdiction over the subject
matter hereof, such contravention or invalidity shall not invalidate the entire
Agreement.  Instead, this Agreement shall
be construed as if it did not contain the particular provision or provisions
held to be invalid, and an equitable adjustment


 


7





















 


shall be made and necessary provision added
so as to give effect to the intention of the parties as expressed in this
Agreement at the time of execution of this Agreement.


 


Section 6.8             Amendment or Modification.  This Agreement may be
amended or modified from time to time only by the written agreement of all the
parties hereto.


 


Section 6.9             Integration.  This Agreement supersedes
all previous understandings or agreements between the parties, whether oral or
written, with respect to its subject matter. 
This document is an integrated agreement which contains the entire
understanding of the parties.  No
understanding, representation, promise or agreement, whether oral or written,
is intended to be or shall be included in or form part of this Agreement unless
it is contained in a written amendment hereto executed by the parties hereto
after the date of this Agreement.


 


Section 6.10           Representations and Warranties.  Each party hereto represents and warrants to
each of the other parties hereto as follows:


 


(a)           Such party has the right,
power and authority for, and has taken all necessary corporate and other action
to authorize, the execution, delivery and performance of the transactions
contemplated by this Agreement; and


 


(b)           This Agreement has been duly
executed and delivered by the duly authorized officers of such party and
constitutes the legal, valid and binding obligation of such party, enforceable
in accordance with its terms.


 


Section 6.11           Additional
Representations and Warranties of the Owners.  Each Owner represents and warrants to each of
the other parties hereto as follows:


 


(a)           That the ownership interests
shown on Schedule I attached hereto constitute all such Owner’s
interests in SOP, Management and Stroud Ltd.; and


 


(b)           That such Owner has, and
will transfer in the transactions described herein, valid title to the
ownership interests shown on Schedule I attached hereto, free and
clear of all encumbrances except for restrictions imposed by applicable federal
and state securities laws and arising under existing agreements between the
parties hereto.


 


(c)           That such Owner, either
alone or with the assistance of professional advisors, has such knowledge and
experience in financial and business matters to be capable of evaluating the
merits and risk of an investment in Newco common stock and has the net worth to
undertake such risks.


 


(d)           That such Owner believes
that an investment in Newco common stock is suitable for such Owner based upon
his investment objectives and financial needs, and such Owner has adequate
means for providing for his current financial needs and personal contingencies
and has no need for liquidity of investment with respect to the Newco common
stock.


 


(e)           That such Owner has
received, had the opportunity to fully review and has fully reviewed and
understands the Preliminary Offering Memorandum describing the Private


 


8





















 


Offering, together with all exhibits and addenda
thereto, and has been given ample access to all other information regarding an
investment in Newco common stock and has utilized such access to his satisfaction
to obtain such information as he has reasonably requested; and, particularly, such
Owner has been given reasonable opportunity to ask questions and receive
answers concerning the terms and conditions of the offering of Newco common
stock and to obtain any additional information, to the extent reasonably
available.


 


(f)            That such Owner understands
that the Newco common stock to be received pursuant to this Agreement is being issued
under exemptions from registration provided for in the Securities Act of 1933,
as amended, and this transaction has not been reviewed by the United States Securities
and Exchange Commission or by any administrative agency charged with the administration
of the securities or “blue sky” laws of any state.


 


(g)           That such Owner is receiving
the Newco common stock for his own investment portfolio and account (and not on
behalf of, and without the participation of, any other person) with the intent
of holding them for investment and without the intent of participating,
directly or indirectly, in a distribution of the Newco common stock and not
with a view to, or for resale in connection with, any distribution of Newco
common stock or any portion thereof.


 


Section 6.12           Costs.  Each transferee/assignee
hereunder shall pay all sales, use and similar taxes arising out of the
contributions, conveyances and deliveries to be made hereunder, and shall pay
all documentary, filing, recording, transfer, deed, and conveyance taxes and
fees required in connection therewith.


 


Section 6.13           Joinder
of Spouses.  The spouses of each individual Owner are joining
in the execution of this Agreement to acknowledgment its existence and its
provisions, and to evidence the desire to bind their interests in the ownership
interests transferred under this Agreement, if any, to the performance of this
Agreement.


 


Section 6.14           Assignment.  To the extent required by applicable law,
this Agreement shall also constitute a “deed,” “bill of sale” or “assignment”
of assets such that no additional assignment document shall be necessary to
effect the assignments described herein.


 


[THE REMAINDER OF THIS
PAGE IS INTENTIONALLY LEFT BLANK]


 


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IN
WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto as
of the date first above written.


 


	
  SOP:

  	
   

  	
  STROUD OIL PROPERTIES, INC.,

  
	
   

  	
   

  	
  an
  Oklahoma corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Patrick J. Noyes

  
	
   

  	
   

  	
   

  	
  Name:
  Patrick J. Noyes

  
	
   

  	
   

  	
   

  	
  Title:
  President & Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  MANAGEMENT:

  	
   

  	
  STROUD ENERGY MANAGEMENT, LTD.,

  
	
   

  	
   

  	
  a
  Texas limited partnership

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Stroud
  Oil Properties, Inc., an Oklahoma

  corporation, its general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
         /s/
  Patrick J. Noyes

  
	
   

  	
   

  	
   

  	
  Name:
  Patrick J. Noyes

  
	
   

  	
   

  	
   

  	
  Title:
  President & Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  STROUD LTD.:

  	
   

  	
  STROUD ENERGY, LTD.,

  
	
   

  	
   

  	
  a
  Texas limited partnership

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Stroud
  Energy Management, Ltd.,

  
	
   

  	
   

  	
   

  	
  a
  Texas limited partnership,

  
	
   

  	
   

  	
   

  	
  its
  general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  Stroud
  Oil Properties, Inc.,

  
	
   

  	
   

  	
   

  	
   

  	
  an
  Oklahoma corporation,

  
	
   

  	
   

  	
   

  	
   

  	
  its
  general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/
  Patrick J. Noyes

  
	
   

  	
   

  	
   

  	
   

  	
  Name:
  Patrick J. Noyes

  
	
   

  	
   

  	
   

  	
   

  	
  Title:
  President & Chief Executive

  
	
   

  	
   

  	
   

  	
   

  	
  Officer

  
						



 


S-1





















 


	
  NEWCO:

  	
   

  	
  STROUD ENERGY, INC.,

  
	
   

  	
   

  	
  a
  Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Patrick J. Noyes

  
	
   

  	
   

  	
   

  	
  Patrick
  J. Noyes, President

  



 


S-2





















 


	
  OWNERS OF SOP:

  	
  /s/
  Bruce F. Braden

  
	
   

  	
  Bruce
  F. Braden

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Christopher A. Wright

  
	
   

  	
  Christopher
  A. Wright

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Elizabeth S. Wright

  
	
   

  	
  Elizabeth
  S. Wright

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Robert S. Colman

  
	
   

  	
  Robert
  S. Colman, Trustee of the Robert

  S. Colman Trust u/d/t 3/18/85

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Robert S. Colman

  
	
   

  	
  Robert
  S. Colman, Trustee, Edwin W.

  Colman Children’s Trust FBO Robert S.

  Colman

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Daniel I. Kemper

  
	
   

  	
  Daniel
  I. Kemper, Trustee, Daniel I.

  Kemper Family Trust

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Rockwell A. Schnabel

  
	
   

  	
  Rockwell
  A. Schnabel

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Marna Schnabel

  
	
   

  	
  Spouse
  of Rockwell A. Schnabel, joining

  for the limited purposes set forth in

  Section 6.13

  



 


S-3





















 


	
   

  	
  /s/
  Patrick J. Noyes

  
	
   

  	
  Patrick
  J. Noyes

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Cindy Noyes

  
	
   

  	
  Spouse
  of Patrick J. Noyes, joining for

  the limited purposes set forth in

  Section 6.13

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Edward H. Schweitzer

  
	
   

  	
  Edward
  H. Schweitzer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Chris A. Schweitzer

  
	
   

  	
  Spouse
  of Edward H. Schweitzer, joining

  for the limited purposes set forth in

  Section 6.13

  
	
   

  	
   

  
	
   

  	
   

  
	
  OWNERS OF MANAGEMENT:

  	
  /s/
  Gregory P. Smith

  
	
   

  	
  Gregory
  P. Smith

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Linda K. Smith

  
	
   

  	
  Spouse
  of Gregory P. Smith, joining for the limited purposes set forth in
  Section 6.13

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Patrick J. Noyes

  
	
   

  	
  Patrick
  J. Noyes

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Cindy Noyes

  
	
   

  	
  Spouse
  of Patrick J. Noyes, joining for

  the limited purposes set forth in

  Section 6.13

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Christopher L. Hammack

  
	
   

  	
  Christopher
  L. Hammack

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Gregory D. Frazier

  
	
   

  	
  Gregory
  D. Frazier

  



 


S-4





















 


	
   

  	
  /s/
  Stephen M. Clark

  
	
   

  	
  Stephen
  M. Clark

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Connie S. Clark

  
	
   

  	
  Spouse
  of Stephen M. Clark, joining for

  the limited purposes set forth in

  Section 6.13

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  G. Christopher Veeder

  
	
   

  	
  G.
  Christopher Veeder

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Priscilla Veeder

  
	
   

  	
  Spouse
  of G. Christopher Veeder, joining

  for the limited purposes set forth in

  Section 6.13

  
	
   

  	
   

  
	
   

  
	
  OWNERS OF STROUD LTD.:

  	
  STROUD OIL PROPERTIES, INC.,

  
	
   

  	
  an
  Oklahoma corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Patrick J. Noyes

  
	
   

  	
   

  	
  Name:
  Patrick J. Noyes

  
	
   

  	
   

  	
  Title:
  President & Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Bruce F. Braden

  
	
   

  	
  Bruce
  F. Braden

  
	
   

  	
   

  
	
   

  	
  /s/
  Robert S. Colman

  
	
   

  	
  Robert
  S. Colman, Trustee of the Robert S. Colman

  
	
   

  	
  Trust
  u/d/t 3/18/85

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Christopher A. Wright

  
	
   

  	
  Christopher
  A. Wright

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Elizabeth S. Wright

  
	
   

  	
  Elizabeth
  S. Wright

  
				



 


S-5





















 


	
   

  	
  ENCAP ENERGY CAPITAL FUND IV, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  EnCap
  Equity Fund IV GP, L.P., General

  Partner of EnCap Energy Capital Fund IV,

  L.P.

  
	
   

  	
  By:

  	
  EnCap
  Investments L.P., General Partner of

  EnCap Equity Fund IV GP, L.P.

  
	
   

  	
  By:

  	
  EnCap
  Investments GP, L.L.C., General

  Partner of EnCap Investments L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  David B. Miller

  
	
   

  	
   

  	
  David
  B. Miller, Senior Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ENCAP IV-B ACQUISITIONS, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  EnCap
  IV-B Acquisitions GP, LLC, General

  Partner of EnCap IV-B Acquisitions, L.P.

  
	
   

  	
  By:

  	
  EnCap
  Energy Capital Fund IV-B, L.P., Sole

  Member of EnCap IV-B Acquisitions GP,

  LLC

  
	
   

  	
  By:

  	
  EnCap
  Equity Fund IV GP, L.P., General

  Partner of EnCap Energy Capital Fund IV-B,

  L.P.

  
	
   

  	
  By:

  	
  EnCap
  Investments L.P., General Partner of

  EnCap Equity Fund IV GP, L.P.

  
	
   

  	
  By:

  	
  EnCap
  Investments GP, L.L.C., General

  Partner of EnCap Investments L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  David B. Miller

  
	
   

  	
   

  	
  David
  B. Miller, Senior Managing Director

  



 


S-6





















 


	
  ADDITIONAL OWNER OF MANAGEMENT:

  	
  NOYES FAMILY PARTNERSHIP

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Patrick J. Noyes

  
	
   

  	
   

  	
  Patrick
  J. Noyes, Partner

  



 


S-7