**Exhibit10.1**

** **

**EXPLORATION AND DEVELOPMENT AGREEMENT WITH AREA OF MUTUAL INTEREST**

 

**DJ NIOBRARA PROJECT**

 

**Weld County, ColoradoLaramie County, Wyoming**

 

ThisEXPLORATION AND DEVELOPMENT AGREEMENT WITH AREA OF MUTUAL INTEREST (this “Agreement”),dated effective as of the 1st day of May, 2010 (the “Effective Date”), is byand between **Slawson Exploration Company, Inc.**,a Kansas corporation, whose principal place of business is 727 North Waco, Suite 400,Wichita, Kansas, 67203 (hereafter “SECI”), and **VoyagerOil & Gas, Inc.**, whose address is 2812 1st Ave. N., Suite 506, Billings, Montana,59101 (hereafter “Participant”).  SECIand Participant may be hereinafter collectively referred to as “Party” or “Parties.”

 

RECITALS

 

A.                                   Whereas, SECIhas acquired State of Colorado Oil and Gas leasehold interests covering 32,960gross and net acres in lands located in Weld County, Colorado, within SECI’s DJNiobrara Project.  Such State of ColoradoOil and Gas Leases shall be hereafter referred to as “State Leases.”  The area of SECI’s DJ Niobrara Project isdepicted on Exhibit “A” attached hereto and covers all of Weld County,Colorado, and all of Laramie County, Wyoming, said area being hereafterreferred to as the “Project Area.”  Adescription of the State Leases is attached hereto as Exhibit “B.”

 

B.                                     Whereas, theState Leases have expiration dates of November 15, 2010.  The State of Colorado has agreed that SECImay extend the State Leases for an additional term of one year by:  (1) drilling three horizontal Niobrarawells; (2) obtaining drilling permits on any other State Leases that SECIdesires to extend; (3) drilling and setting surface casing with a drillingrig capable of drilling to a depth of 3,500 feet on each of the State Leasesthat SECI desires to extend; and (4) paying prior to November 15,2010 a $10 per acre rental fee for each of the State Leases that SECI desiresto extend.

 

C.                                     Whereas, inorder to extend the State Leases, SECI will, in most cases, be required to pay100% of the costs to drill and set surface casing on wells where SECI does notown 100% of the spacing unit. Nonetheless, should these wells be drilled at a later date to a depthdeeper than the surface casing, SECI will use its best efforts to recoup fromany third party that participates in the drilling operations to deepen thesewells, such third party’s share of costs to drill and set surface casing.

 

D.                                    Whereas,Participant desires to participate with SECI in the leasing, evaluation,drilling, and development of the Project Area pursuant to the provisions ofthis Agreement and the agreements by which SECI acquires leasehold contractswithin the Project Area.

 

AGREEMENT

 

NOWTHEREFORE, the Parties hereto, for the mutual promises contained herein andother good and valuable consideration, the sufficiency of which is herebyacknowledged, do hereby contract and agree as follows:

 

ARTICLE 1.Participation Interest

 

a.               By execution of this Agreement and payment offunds as set forth in Article 2.a. below, Participant shall own a 50%interest in the State Leases. Participant shall also have the right to acquirea 30% interest in leases and lands (other than the State Leases) that areacquired by the Parties in the Project Area, subject to the terms of thisAgreement.  Participant agrees to pay itsproportionate share of all reasonable actual costs incurred in the Project Areapursuant to the terms set out herein. Participant agrees that any interestacquired from SECI by Participant shall be subject to the terms of the StateLeases and any other leases, options, and other agreements by which thoseleasehold interests are acquired in the Project Area by the Parties. 

 

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Participant shall be assigned and deliveredproportionately reduced 79.5% net revenue interest leases in the State Leases.

 

Asto lands not covered by the State Leases in which SECI owns an interest,Participant shall have a first right of refusal to acquire additional interests(other than the 30% interest refusal above) from SECI in the event that SECIelects to sell additional working interest in the Project Area. In the eventSECI elects to sell additional interest in the Project Area, SECI shall giveParticipant written notice of the terms of the sale and Participant shall havefifteen (15) days after receipt of such notice in which to make an election toacquire such additional working interest from SECI under the terms of thesale.  Failure by Participant to givewritten notice to SECI within the 15-day period shall be deemed an election byParticipant to not acquire the additional working interest. This first right ofrefusal shall not apply to any working interest that SECI may transfer toSlawson family members or other companies that are owned by SECI or Slawsonfamily members.

 

ARTICLE 2.Leasehold Expenses

 

a.               Participant shall pay SECI on or before June 23,2010 the sum of seven million, five hundred thousand dollars ($7,500,000.00)for costs associated with acquiring the State Leases.

 

b.              After the drilling of the first three horizontalNiobrara wells described in Article 3 below, Participant shall pay SECIthe sum of $500.00 per net acre owned by Participant in the drillsite spacingunit on such State Leases within ten (10) days after the date that SECIcommences operations to drill to deeper depths.

 

c.               After the drilling of the first threehorizontal Niobrara wells, as to any well drilled below the depth of surfacecasing that includes leases other than State Leases, Participant shall pay SECIthe sum of $250.00 per net acre then owned by Participant in the drillsitespacing unit in such other leases within ten (10) days after the date thatSECI commences operations to drill to deeper depths.

 

d.              Should SECI acquire leasehold interests in theAMI (as defined in Article 14) through a land trade, such as drilling awell for a third party where a third party only retains an overriding royaltyinterest, that does not include the payment of funds by SECI to earn suchleasehold interests, it shall be deemed that the acreage so earned shall have avalue of $500.00 per net acre and Participant shall pay SECI the sum of $500.00per net mineral acre acquired by Participant in such leasehold earned bySECI.  As to any lands earned through afarmin where a third party retains the right to receive a backin workinginterest after payout of a well, Participant shall not be subject to aleasehold payment, but will be entitled to its proportionate share of suchleasehold earned.  Participant shall paySECI within ten (10) days after the date that the leasehold is earned bySECI.

 

e.               As to subsequent acquisitions of leaseholdinterests acquired pursuant to the terms of this Agreement, other thanleasehold acquired under the terms of Article 2.d., Participant shall pay50% of all the costs to acquire such leasehold interest, including brokeragefees, for a 30% interest in such acquired leasehold interests.  Participant shall remit payment for suchleasehold within ten (10) days from the date of invoice therefor.  Failure to remit payment within said ten (10) daysshall be deemed an election not to participate in the leasehold acquisition.

 

ARTICLE 3.Participation Terms

 

a.               Three (3) Horizontal Niobrara Wells.  SECIhas proposed the drilling of three (3) horizontal Niobrara wells to belocated on the State Leases that have full interest in the 640-acre spacingunit for each well.  It is anticipatedthat the first well will spud on July 1, 2010, with the remaining twowells to be drilled back to back after the first well.  Participant agrees to participate in allcosts to drill, equip, complete, test, and plug each of the initial three (3) horizontalNiobrara wells with its 50% working interest 

 

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and agrees to sign and return a copy of SECI’sAuthority for Expenditure (“AFE”) prior to the drilling of each well.  Participant will pay all AFE costs for eachwell on an at-cost basis no later than two (2) business days following theactual spud date of the well.  SECI issubject to a non-performance payment of $400,000.00, to a third party, for eachof the three wells that are not drilled. SECI agrees to use best efforts to drill each of the three wells.  If for any reason all three wells are notdrilled, Participant shall be obligated to pay 50% of the performance penaltyfor any of the three wells not drilled.

 

b.              Drilling and Setting Surface Casing.  As toany well that is drilled prior to November 15, 2010 to a depth to setsurface casing on State Leases for the purpose of receiving a one yearextension to the term of such lease, Participant agrees to participate in allcosts to drill and set surface casing and all costs to plug each well with a50% working interest.  SECI will provideParticipant with an informational AFE showing the estimated costs through the settingof surface casing.  Participant will paysuch AFE costs for each well on an at-cost basis no later than two (2) businessdays following the actual spud date of the well.  It is understood that SECI and Participantmay be required to pay 100% of the cost to drill and set surface casing on somewells in order to obtain a one-year extension on State Leases even though theParties may not own 100% of the spacing unit. SECI will use its best efforts to recoup payment from a third party atany time for the setting of surface casing and if payment is received, SECIshall credit Participant with 50% of the funds received by such third party.

 

c.               Election to Not Participate in Drilling onState Leases.  Should either SECI or Participant elect to orbe deemed to not participate in the deepening of a well on State Leases aftersurface casing has been set, the Party electing not to participate shallforfeit all of its interest in any section located within two (2) miles ofthe section line for the applicable spacing unit, except that noforfeiture shall occur as to lands within a spacing unit in which State Leasesare located, and in which such Party has participated in a well beyond thesetting of surface casing.  The forfeiting party shall not receiveany refund of costs associated with the forfeited leases or well costs.

 

ARTICLE 4.Geophysical and Geological Data

 

Participantshall own in proportion to its share of interest in the Project Area, and shallhave access to review, all geophysical and exploration data acquired by SECIwithin the Project Area.  Participantwill participate and pay its proportionate share of costs plus 10% on any newlyacquired seismic in the Project Area acquired by SECI or a third party, up to amaximum aggregate amount of $3,000,000.00. Participant must consent or agree to the acquisition of any seismiccosts in excess of $3,000,000.00. Participant agrees to pay SECI within ten (10) days after receiptof an invoice for such costs.

 

ARTICLE 5.Other Costs

 

Asto all other costs not covered in the preceding paragraphs, Participant shallpay, on an at cost basis, its Participation Interest share of all otherreasonable actual third party costs incurred in the Project Area, or chargeableunder the applicable Joint Operating Agreement to operations in whichParticipant elects to participate, or in which Participant is obligated toparticipate by execution hereof, pursuant to the provisions of this Agreement.

 

ARTICLE 6.Assignment of Leasehold Interest

 

SECIshall assign to Participant its Participation Interest in the lease(s) comprisingthe spacing unit for the applicable wells in each instance no later than sixty(60) days following the rig release date; provided, however, that in the eventParticipant is required under the terms of its senior lending facility toassign such rights to such lender, such assignment shall be made as soon asreasonably practicable but no sooner than thirty (30) days following the rigrelease date.  On the second anniversaryof the date of this Agreement, SECI shall assign to Participant its 

 

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ParticipationInterest in all of the lease(s) depicted on Exhibit “B” that arestill in effect, to the extent not previously assigned to Participant.

 

 ARTICLE 7.

 

DrillingProposals on Lands Other Than on the State Leases

 

a.               SECI will develop a drilling program for theidentified well site(s), focusing on a logical development of the ProjectArea.  SECI will generally be responsiblefor initiating well proposals to Participant and other parties participating;however, either Party that owns an interest in the State Leases or the otherleases may recommend the drilling of a well. If SECI receives a well recommendation from Participant relative to aproposed location and SECI does not initiate a well proposal comparable to thatreceived from Participant for circulation to all participants within thirty(30) days of receipt of Participant’s drilling recommendation, then Participantmay initiate a proposal relative to such proposed site.  Any such well shall be governed by thisagreement and references herein to “Participant” and “SECI” shall refer to SECIand Participant, respectively.

 

b.              A well shall be proposed by the Parties bymailing to all working interest owners a proposal identifying the location ofthe well to be drilled, the objective(s) to be tested and an AFE.  Parties receiving this well proposal willhave twenty (20) days from the date of receipt to elect to either: (1) participateas to their working interest in the proposed drilling venture; or (2) electnot to participate in the proposed drilling venture.  Elections shall be made in writing to theParty proposing the well.  Failure totimely elect shall be deemed to constitute an election not to participate inthe proposed drilling venture.  Any Partyelecting not to participate in the well shall forfeit all rights in any sectionlocated within one (1) mile of the section line for the applicable spacingunit.  The non-participating party shallreassign to the participating party all such leasehold working interest that itowns in the section or spacing unit, as appropriate, at no cost to theparticipating party.  Notwithstanding theforegoing, however, in order for any such forfeiture to occur and be binding onthe non-participating party, a rig capable of drilling the well to total depthmust commence drilling the well within a period of ninety (90) days after thedate of the expiration of the election period. The non-participating partyshall not be required to relinquish lands that are included in a spacing unitfor a well in which that party participated, nor any area that is part of aspacing unit for a well which is then drilling and in which that party isparticipating.  Participation electionsin subsequent wells within an established spacing unit shall be subject to thenon-consent provisions of the applicable Joint Operating Agreement.

 

c.               For each well in the Project Area in whichParticipant elects to participate or is required to participate by executionhereof, Participant shall pay its proportionate share of all AFE costs and anyother well-specific project costs on an at-cost basis no later than two (2) businessdays following the actual spud date of a well.

 

ARTICLE 8.

Proposalson State Lands

 

a.               For each well that SECI proposes to deepen,SECI will mail to Participant a proposal identifying the location and objective(s) tobe tested and an AFE.  Participant willhave twenty (20) days from the date of receipt to elect to either: (1) participatewith its full working interest in the proposed operation, or (2) elect notto participate in the proposed operation. Failure to timely elect shall be deemed to constitute an election not toparticipate in the deepening of such well, and such non-participating partywill be subject to the penalties set out in Article 3.b. herein.

 

ARTICLE 9.Joint Operating Agreement

 

Exceptfor participation elections and penalties resulting from those elections onwells which are specifically governed by this Agreement, the drilling of alljointly owned wells shall 

 

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begoverned by the form of Joint Operating Agreement (“JOA”), attached hereto as Exhibit “C,”within the Project Area and shall cover the spacing unit in which each well isdrilled.  In the event of a conflictbetween the terms of this Agreement and the JOA, the terms of this Agreementshall prevail.

 

ARTICLE 10.Funding Obligation — Well Costs

 

a.               As to all wells drilled to a depth to setsurface casing for the purpose of extending State Leases, and in whichParticipant has elected to participate in the deepening of such well, SECIshall provide Participant with written notice of the commencement of deepeningof each well and notice of any required payment for AFE costs.  Participant and SECI shall likewise beobligated to pay to SECI, or into a drilling contractor’s escrow account ifrequired, their share of remaining AFE costs through completion no later thanten (10) days of receipt of notice or two (2) days following thecommencement of deepening operations on any well, whichever is the latter.  Failure to timely make payment within five (5) daysfollowing receipt of written notice of failure to make such payment may, atSECI’s option, be deemed to constitute a modification of Participant’selection, and Participant shall be deemed to have elected not to participatewith respect to that operation in the applicable well.

 

Asto all other wells drilled within the Project Area, Participant agrees totimely remit payment for all wells costs as required pursuant to the terms ofthis Agreement.  Failure to timely makeany such payment or to make payment within five (5) days following receiptof written notice of failure to make such payment shall constitute, at the SECI’soption, an election by Participant not to participate in the well.  SECI, at its option, may either declare theParticipant to be a non-participating party in the well or require payment ofthe amount due from Participant based upon the participation electionpreviously made by Participant.

 

ARTICLE 11.

Net Revenue Interest

 

Participantshall acquire from SECI a net revenue interest in leasehold acquired in theProject Area equal to the net revenue interest acquired by SECI, less anoverriding royalty interest of 3% of 8/8ths in favor of SECI, proportionatelyreduced to the interest acquired by Participant as to all leasehold other thanState Leases which will be assigned to Participant at a proportionate 79.5% netrevenue interest.  Notwithstanding the foregoing,Participant shall not be delivered a net revenue interest lease less than 77%unless the net revenue interest received by SECI is less than 77%, then the netrevenue interest delivered to Participant shall be that received by SECI.

 

ARTICLE 12.Leasehold

 

SECIshall be responsible for acquiring leases by direct purchase and/or pursuant tooption agreements or other contractual agreements.  Upon completion of a well in whichParticipant has participated through completion, SECI shall assign to Participantits proportionate share of the lease(s) comprising the spacing unit forthe applicable well.  SECI shall beresponsible for maintenance of leases within the Project Area and shall timelyremit lease payments, rental and option extensions when due, and comply withthe other obligations of the lease(s) and option agreements on behalf ofParticipant.  SECI shall not be liablefor either direct or consequential damages resulting from SECI’s failure totimely make lease payment, rental or extension payment absent a showing ofnegligence, willful misconduct or wanton disregard of responsibilities in thefailure to make such payment. Participant agrees to bear its proportionate share of any such paymentincurred by SECI on its behalf.

 

ARTICLE 13.Billings

 

Exceptas otherwise provided above, billings attributable to Participant’s interest inleases and operated wells shall be billed and payable pursuant to theaccounting provisions of the applicable JOA.

 

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ARTICLE 14.AMI

 

AnArea of Mutual Interest (AMI) shall be established within the boundaries of theProject Area.  The AMI shall be for aperiod of three (3) years from the date of this Agreement.  Subject only to the specific terms of thisAgreement to the contrary, a Party acquiring an interest in leasehold withinthe boundary of the AMI and during its term shall be obligated to offer theleasehold to the other Party in the proportion that each Party owns in nonstate lands under this Agreement. The acquiring party shall give thenon-acquiring Party written notice of all information relevant to the leaseholdacquired. The non-acquiring Party shall have 20 days after receipt of noticefrom the acquiring Party to elect, in writing, to participate in such acquisition.Failure to make an election to participate in the acquisition within the twenty(20) day period shall be deemed an election to not participate in theacquisition. Should a Party elect not to take its proportionate share of aleasehold interest, the non-acquiring Party shall forfeit its right toparticipate in future leasehold acquisitions in all sections of land that fallwithin a 3-mile radius of the lands being acquired in such leaseholdacquisition.

 

ARTICLE 15.Term

 

Theterms of this Agreement shall bind the Parties as to activities on theleasehold acquired pursuant to this Agreement for the term of each leaseholdinterest and any extension or renewal of each leasehold interest, or as tolands within a producing spacing unit for so long as an applicable JOA remainsin effect within the boundaries of a spacing unit.

 

ARTICLE 16.Notices

 

Allnotices required hereunder shall be considered given when delivered personally,or when received by e-mail, facsimile, or US Mail, properly addressed as follows:

 
| SECI:        |   | Slawson  Exploration Company, Inc.              |
|--------------|--------|------------------------------------------------------|
| Address:     |   | 727  North Waco, Suite 400                      |
| City,  ST:   |   | Wichita,  KS 67203                                   |
| Phone:       |   | (316)  263-3201                                      |
| Fax:         |   | (316)  268-0702                                      |
| E-mail:      |   | cstokes@slawsoncompanies.com                         |
|         |   |                                                 |
| Participant: |   | Voyager  Oil & Gas, Inc.               |
| Address:     |   | 2812  1st Ave. N., Suite 506               |
| City,  ST:   |   | Billings,  MT 59101                                  |
| Phone:       |   | (406)  245-4901                                      |
| Fax:         |   | (406)  245-4914                                      |
| E-mail:      |   | jr.reger@voyageroil.com                              |
|         |   | mitch.thompson@voyageroil.com                        |
|         |   |                                                 |
|         |   | with  a copy (which shall not constitute notice) to: |
|         |   |                                                 |
|         |   | Thomas  F. Steichen                                  |
|         |   | Fredrikson &  Byron, P.A.                   |
|         |   | 200  South Sixth Street                              |
|         |   | Minneapolis,  MN 55402                               |
|         |   | Fax:  (612) 492-7077                                 |
|         |   | tsteichen@fredlaw.com                                |

 

ARTICLE 17.Nature of Agreement

 

Theliabilities of the Parties shall be several and not joint or collective andeach Party shall be responsible only for its share of the costs and liabilitiesincurred as provided hereunder.  It isnot the purpose or intention of this Agreement to create any partnership,mining partnership, 

 

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orassociation, and neither this Agreement nor the operations hereunder shall beconstrued or considered as creating any such legal relationship.

 

ARTICLE 18.Marketing

 

SECIshall be responsible for marketing 100% of the production from the wellsdrilled pursuant to this Agreement, and shall account to Participant for itsproportionate share thereof. Participant, however, shall have the right to take and market itsproduction in kind, but in doing so shall also assume the obligations ofdisbursing revenue to royalty and any others burden to its interest.

 

ARTICLE 19.Operations

 

SECIwill be the operator of the Project Area, including drilling, completing andproducing phases of spacing units.  Inthe event multiple third party working interest owners exist in a proposedspacing unit for a well, Participant shall nominate SECI as operator for thespacing unit.

 

ARTICLE 20.

MiscellaneousProvisions

 

b.              Entire Agreement, Amendment.  ThisAgreement constitutes the entire agreement between the Parties with respect tothe subject matter hereof. There are no verbal understandings, agreements,representations or warranties which are not expressly set forth herein.  This Agreement supersedes all prioragreements and understandings between the Parties, both written and oral. ThisAgreement may not be amended, modified, altered, or changed in any respectexcept in writing, signed by the Parties hereto.

 

c.               Headings. The paragraph headings of this Agreement areinserted for convenience only, and should not be considered a part of thisAgreement or used in its interpretation.

 

d.              Jurisdiction.   TheParties may only bring an action to resolve a dispute with respect to thesubject matter hereof in the state or federal courts located in Denver County,Colorado. Said court shall have exclusive jurisdiction and each of the Partiessubmits to the sole jurisdiction of such court in any such action and waivesall defenses relating to improper venue or personal jurisdiction.

 

e.               No Consequential Damages. Neither Party shall be entitled to claim or recover from the otherParty, and each Party hereby disclaims, releases and waives any claim againstthe other Party for any special, punitive, exemplary, indirect or consequentialdamages.

 

f.                 Governing Law.  ThisAgreement shall be governed by and construed in accordance with the laws of thestate of Colorado, except with respect to substantive oil and gas and realproperty matters which shall be governed and construed in accordance with thelaws of the state of Colorado.

 

g.              Severability. In the event any one or more of the provisionscontained in this Agreement shall for any reason be declared to be invalid,illegal, unenforceable, or void in any respect, such declaration shall not havethe effect of invalidating or voiding the remainder of this Agreement, and theparties hereto agree that the part or parts of this Agreement so held to beinvalid, illegal, unenforceable, or void will be deemed to have been strickenherefrom and the remainder will have the same force and effectiveness as if suchpart had never been included herein.

 

h.              Construction.  TheParties acknowledge that each Party and its counsel have had the opportunity toreview and negotiate the terms and conditions of this Agreement, and that thenormal rule of construction to the effect that any ambiguities are to beconstrued against the drafting party shall not be employed in theinterpretation of this Agreement or any exhibits or amendments hereto.

 

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i.                  Counterparts.  This Agreementmay be executed in one or more counterparts and delivered via facsimile ore-mail, each of which shall be deemed an original, but all of which togethershall constitute but one and the same instrument.  Any signature delivered via facsimile ore-mail shall be deemed to be an original signature hereto.

 

j.                  Binding Effect.  ThisAgreement shall inure to the benefit of and be binding upon not only theParties hereto, but their respective heirs, successors, and assigns.

 

k.               Prohibited Encumbrance..  IfParticipant, after receiving a recorded leasehold assignment, encumbers,hypothecates, mortgages, or pledges any or all interests so acquired from SECI,Participant nevertheless expressly agrees that SECI has a first and prior rightof lien and offset against any revenues payable to Participant to the extent ofany delinquent and unpaid expenses then and thereafter owed to SECI, andParticipant expressly agrees that such first and prior right of lien and offsetwill be preserved in favor of SECI in any documents executed by Participantwhich create an encumbrance.  .

 

l.                  Press Releases.  SECIacknowledges that Participant will be required to publicly announce thisAgreement and file a copy of this Agreement with the Unites States Securitiesand Exchange Commission.  Participant andSECI agree to not release any press release on any well for a term of three (3) monthsfollowing the date of completion of fracture stimulation of a well, unlessrequired by applicable securities disclosure laws or regulations on the adviceof legal counsel. Participant and SECI shall consult with each other withregard to all press releases and other announcements issued after the date ofexecution of this agreement and, except as may be required by applicable lawsor the applicable rules of any governmental agency or stock exchange,Participant and SECI shall not issue any such press release or other publicitywithout the prior written consent of the other Party, which consent shall notbe unreasonably withheld or delayed.

 

Executedeffective as of the day and year first above written.

 
|   | **VOYAGER  OIL & GAS, INC.**  |
|--------|---------------------------------------------|
|   |                                        |   |
|   |                                        |   |
|   | By:                                         | /s/  J.R. Reger |
|   |                                        |   |
|   | Print  Name:                                | James  R. (J.R.) Reger |
|   |                                        |   |
|   | Print  Title:                               | CEO |
|   |                                        |   |
|   | Date  of Execution:                         | June 23,  2010 |
|   |                                        |   |
|   | ** **                                  |
|   | **SLAWSON  EXPLORATION COMPANY, INC.** |
|   | ** **                                  |
|   |                                        |   |
|   | By:                                         | /s/  Coni J. Stokes |
|   | Coni  J. Stokes, Vice President             |
|   |                                        |   |
|   | Date  of Execution:                         | June 22,  2010 |
|        |                                             |  |  |  |  |  |  |

 

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EXHIBITS

 
| **Exhibit** | ** ** | **Description**           |
|-------------|------------|---------------------------|
|        |       |                      |
| A           |       | Project Area              |
|        |       |                      |
| B           |       | State Lease Descriptions  |
|        |       |                      |
| C           |       | Joint Operating Agreement |

 

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Exhibit“B”

ColoradoState Leases

 
| ** ** | ** ** | **Lessor**         | ** ** | **Lease date** | ** ** | **Lease desc**                                   | ** ** | **SEC** | ** ** | **TWN** | ** ** | **RNG** | ** ** | **Gross  acres** | ** ** | **Surface  Gross  acres** | ** ** | **Net acres** | ** ** | **Mineral  interest** | ** ** | **Lessor Royalty** | ** ** | **Existing ORRI** | ** ** | **Expiration** | ** ** |
|------------|------------|--------------------|------------|----------------|------------|--------------------------------------------------|------------|---------|------------|---------|------------|---------|------------|------------------|------------|---------------------------|------------|---------------|------------|-----------------------|------------|--------------------|------------|-------------------|------------|----------------|------------|
| 1          |       | State  of Colorado |       | *              |       | N2SW:SESW:W2SE:SESE  Section 5              |       | 5       |       | 9N      |       | 62W     |       | 240              |       | 240                       |       | *             |       | 100.00                | %          | 12.50%             |       | 5.00%             |       | *              |       |
| 2          |       | State  of Colorado |       | *              |       | Lots  1-3 S2NE,NESE Section: 6                   |       | 6       |       | 9N      |       | 62W     |       | 239.44           |       | 239.44                    |       | *             |       | 100.00                | %          | 12.50%             |       | 5.00%             |       | *              |       |
| 3          |       | State  of Colorado |       | *              |       | NE:NESE  Section: 8                              |       | 8       |       | 9N      |       | 62W     |       | 200              |       | 200                       |       | *             |       | 100.00                | %          | 12.50%             |       | 5.00%             |       | *              |       |
| 4          |       | State  of Colorado |       | *              |       | SW  Section: 9                                   |       | 9       |       | 9N      |       | 62W     |       | 160              |       | 160                       |       | *             |       | 100.00                | %          | 12.50%             |       | 5.00%             |       | *              |       |
| 5          |       | State  of Colorado |       | *              |       | All                                              |       | 16      |       | 9N      |       | 62W     |       | 640              |       | 640                       |       | *             |       | 100.00                | %          | 12.50%             |       | 5.00%             |       | *              |       |
| 6          |       | State  of Colorado |       | *              |       | Lots  2-4:E2SW:SWSE Section 18: Township: 9 |       | 18      |       | 9N      |       | 62W     |       | 243.64           |       | 243.64                    |       | *             |       | 100.00                | %          | 12.50%             |       | 5.00%             |       | *              |       |
| 7          |       | State  of Colorado |       | *              |       | N2NE:NENW  Section: 19                           |       | 19      |       | 9N      |       | 62W     |       | 120              |       | 120                       |       | *             |       | 100.00                | %          | 12.50%             |       | 5.00%             |       | *              |       |
| 8          |       | State  of Colorado |       | *              |       | W2NW:SENW:N2SW:SESW:S2SE:NWSE  Section:20        |       | 20      |       | 9N      |       | 62W     |       | 360              |       | 360                       |       | *             |       | 100.00                | %          | 12.50%             |       | 5.00%             |       | *              |       |
| 9          |       | State  of Colorado |       | *              |       | SWNE:NW:NESW:NWSE  Section: 28                   |       | 28      |       | 9N      |       | 62W     |       | 280              |       | 280                       |       | *             |       | 100.00                | %          | 12.50%             |       | 5.00%             |       | *              |       |
| 10         |       | State  of Colorado |       | *              |       | N2NE  Section: 29                                |       | 29      |       | 9N      |       | 62W     |       | 80               |       | 80                        |       | *             |       | 100.00                | %          | 12.50%             |       | 5.00%             |       | *              |       |
| 11         |       | State  of Colorado |       | *              |       | All                                              |       | 36      |       | 9N      |       | 62W     |       | 640              |       | 640                       |       | *             |       | 100.00                | %          | 12.50%             |       | 5.00%             |       | *              |       |
| 12         |       | State  of Colorado |       | *              |       | Lot  2 & 4:SENE:E2SE                    |       | 4       |       | 9N      |       | 63W     |       | 200.9            |       | 200.9                     |       | *             |       | 100.00                | %          | 12.50%             |       | 5.00%             |       | *              |       |
| 13         |       | State  of Colorado |       | *              |       | NWNE:S2NE:NWSE                                   |       | 10      |       | 9N      |       | 63W     |       | 160              |       | 160                       |       | *             |       | 100.00                | %          | 12.50%             |       | 5.00%             |       | *              |       |
| 14         |       | State  of Colorado |       | *              |       | S2SE                                             |       | 11      |       | 9N      |       | 63W     |       | 80               |       | 80                        |       | *             |       | 100.00                | %          | 12.50%             |       | 5.00%             |       | *              |       |
| 15         |       | State  of Colorado |       | *              |       | N2:NESE                                          |       | 13      |       | 9N      |       | 63W     |       | 360              |       | 360                       |       | *             |       | 100.00                | %          | 12.50%             |       | 5.00%             |       | *              |       |
| 16         |       | State  of Colorado |       | *              |       | All                                              |       | 16      |       | 9N      |       | 63W     |       | 640              |       | 640                       |       | *             |       | 100.00                | %          | 12.50%             |       | 5.00%             |       | *              |       |
| 17         |       | State  of Colorado |       | *              |       | Lots  3 & 4:E2SW:SE                     |       | 18      |       | 9N      |       | 63W     |       | 321.37           |       | 321.37                    |       | *             |       | 100.00                | %          | 12.50%             |       | 5.00%             |       | *              |       |
| 18         |       | State  of Colorado |       | *              |       | NW:E2SW:SE                                       |       | 20      |       | 9N      |       | 63W     |       | 400              |       | 400                       |       | *             |       | 100.00                | %          | 12.50%             |       | 5.00%             |       | *              |       |
| 19         |       | State  of Colorado |       | *              |       | S2NW:SW:W2SE                                     |       | 28      |       | 9N      |       | 63W     |       | 320              |       | 320                       |       | *             |       | 100.00                | %          | 12.50%             |       | 5.00%             |       | *              |       |
| 20         |       | State  of Colorado |       | *              |       | All                                              |       | 36      |       | 9N      |       | 63W     |       | 640              |       | 640                       |       | *             |       | 100.00                | %          | 12.50%             |       | 5.00%             |       | *              |       |
| 21         |       | State  of Colorado |       | *              |       | NWSW:S2S2                                        |       | 28      |       | 9N      |       | 64W     |       | 200              |       | 200                       |       | *             |       | 100.00                | %          | 12.50%             |       | 5.00%             |       | *              |       |
| 22         |       | State  of Colorado |       | *              |       | NWSW:S2SW                                        |       | 34      |       | 9N      |       | 64W     |       | 120              |       | 120                       |       | *             |       | 100.00                | %          | 12.50%             |       | 5.00%             |       | *              |       |
| 23         |       | State  of Colorado |       | *              |       | All                                              |       | 36      |       | 9N      |       | 64W     |       | 640              |       | 640                       |       | *             |       | 100.00                | %          | 12.50%             |       | 5.00%             |       | *              |       |
| 24         |       | State  of Colorado |       | *              |       | SW:NESE:S2SE                                     |       | 4       |       | 9N      |       | 65W     |       | 280              |       | 280                       |       | *             |       | 100.00                | %          | 12.50%             |       | 5.00%             |       | *              |       |
| 25         |       | State  of Colorado |       | *              |       | All                                              |       | 16      |       | 9N      |       | 65W     |       | 640              |       | 640                       |       | *             |       | 100.00                | %          | 12.50%             |       | 5.00%             |       | *              |       |
| 26         |       | State  of Colorado |       | *              |       | Lot  1:SWNE:NENW:N2SE:SESE                       |       | 18      |       | 9N      |       | 65W     |       | 236.5            |       | 236.5                     |       | *             |       | 100.00                | %          | 12.50%             |       | 5.00%             |       | *              |       |
| 27         |       | State  of Colorado |       | *              |       | E2                                               |       | 36      |       | 10N     |       | 61W     |       | 320              |       | 320                       |       | *             |       | 100.00                | %          | 12.50%             |       | 5.00%             |       | *              |       |

 

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| 28 |   | State  of Colorado |   | * |   | All                                |   | 16 |   | 10N |   | 62W |   | 640    |   | 640    |   | * |   | 100.00 | % | 12.50% |   | 5.00% |   | * |   |
|----|--------|--------------------|--------|---|--------|------------------------------------|--------|----|--------|-----|--------|-----|--------|--------|--------|--------|--------|---|--------|--------|---|--------|--------|-------|--------|---|--------|
| 29 |   | State  of Colorado |   | * |   | Lots  1-4:E2SW                     |   | 31 |   | 10N |   | 62W |   | 234.44 |   | 234.44 |   | * |   | 100.00 | % | 12.50% |   | 5.00% |   | * |   |
| 30 |   | State  of Colorado |   | * |   | SWNE:NENW:SESE                     |   | 32 |   | 10N |   | 63W |   | 120    |   | 120    |   | * |   | 100.00 | % | 12.50% |   | 5.00% |   | * |   |
| 31 |   | State  of Colorado |   | * |   | All                                |   | 36 |   | 10N |   | 63W |   | 640    |   | 640    |   | * |   | 100.00 | % | 12.50% |   | 5.00% |   | * |   |
| 32 |   | State  of Colorado |   | * |   | All                                |   | 36 |   | 10N |   | 64W |   | 640    |   | 640    |   | * |   | 100.00 | % | 12.50% |   | 5.00% |   | * |   |
| 33 |   | State  of Colorado |   | * |   | Lot  1:SENE:E2SE                   |   | 6  |   | 10N |   | 65W |   | 161.12 |   | 161.12 |   | * |   | 100.00 | % | 12.50% |   | 5.00% |   | * |   |
| 34 |   | State  of Colorado |   | * |   | All                                |   | 16 |   | 10N |   | 65W |   | 640    |   | 640    |   | * |   | 100.00 | % | 12.50% |   | 5.00% |   | * |   |
| 35 |   | State  of Colorado |   | * |   | All                                |   | 36 |   | 10N |   | 65W |   | 640    |   | 640    |   | * |   | 100.00 | % | 12.50% |   | 5.00% |   | * |   |
| 36 |   | State  of Colorado |   | * |   | E2                                 |   | 14 |   | 11N |   | 65W |   | 320    |   | 320    |   | * |   | 100.00 | % | 12.50% |   | 5.00% |   | * |   |
| 37 |   | State  of Colorado |   | * |   | All                                |   | 16 |   | 11N |   | 65W |   | 640    |   | 640    |   | * |   | 100.00 | % | 12.50% |   | 5.00% |   | * |   |
| 38 |   | State  of Colorado |   | * |   | E2E2                               |   | 30 |   | 11N |   | 65W |   | 160    |   | 160    |   | * |   | 100.00 | % | 12.50% |   | 5.00% |   | * |   |
| 39 |   | State  of Colorado |   | * |   | All                                |   | 36 |   | 11N |   | 65W |   | 640    |   | 640    |   | * |   | 100.00 | % | 12.50% |   | 5.00% |   | * |   |
| 40 |   | State  of Colorado |   | * |   | Lots  1 & 2:S2N2:S2 (All) |   | 2  |   | 11N |   | 66W |   | 639.16 |   | 639.16 |   | * |   | 100.00 | % | 12.50% |   | 5.00% |   | * |   |
| 41 |   | State  of Colorado |   | * |   | Lots  1-4:S2NE:SENW:E2SW           |   | 6  |   | 11N |   | 66W |   | 493.83 |   | 493.83 |   | * |   | 100.00 | % | 12.50% |   | 5.00% |   | * |   |
| 42 |   | State  of Colorado |   | * |   | NE:S2                              |   | 8  |   | 11N |   | 66W |   | 480    |   | 480    |   | * |   | 100.00 | % | 12.50% |   | 5.00% |   | * |   |
| 43 |   | State  of Colorado |   | * |   | All                                |   | 16 |   | 11N |   | 66W |   | 640    |   | 640    |   | * |   | 100.00 | % | 12.50% |   | 5.00% |   | * |   |
| 44 |   | State  of Colorado |   | * |   | Lot  1:E2:E2NW                     |   | 18 |   | 11N |   | 66W |   | 480.6  |   | 480.6  |   | * |   | 100.00 | % | 12.50% |   | 5.00% |   | * |   |
| 45 |   | State  of Colorado |   | * |   | NE                                 |   | 20 |   | 11N |   | 66W |   | 160    |   | 160    |   | * |   | 100.00 | % | 12.50% |   | 5.00% |   | * |   |
| 46 |   | State  of Colorado |   | * |   | E2NW:NWSE                          |   | 32 |   | 11N |   | 66W |   | 120    |   | 120    |   | * |   | 100.00 | % | 12.50% |   | 5.00% |   | * |   |
| 47 |   | State  of Colorado |   | * |   | All                                |   | 36 |   | 11N |   | 66W |   | 640    |   | 640    |   | * |   | 100.00 | % | 12.50% |   | 5.00% |   | * |   |
| 48 |   | State  of Colorado |   | * |   | Lots  1 & 2:S2N2:SW:N2SE  |   | 2  |   | 11N |   | 67W |   | 559.76 |   | 559.76 |   | * |   | 100.00 | % | 12.50% |   | 5.00% |   | * |   |
| 49 |   | State  of Colorado |   | * |   | Lot  2:S2NW:SW                     |   | 4  |   | 11N |   | 67W |   | 322.93 |   | 322.93 |   | * |   | 100.00 | % | 12.50% |   | 5.00% |   | * |   |
| 50 |   | State  of Colorado |   | * |   | W2  of Lot 1:Lot 4:SWNE:E2SW:W2SE  |   | 6  |   | 11N |   | 67W |   | 305.86 |   | 305.86 |   | * |   | 100.00 | % | 12.50% |   | 5.00% |   | * |   |
| 51 |   | State  of Colorado |   | * |   | E2                                 |   | 8  |   | 11N |   | 67W |   | 320    |   | 320    |   | * |   | 100.00 | % | 12.50% |   | 5.00% |   | * |   |
| 52 |   | State  of Colorado |   | * |   | All                                |   | 10 |   | 11N |   | 67W |   | 640    |   | 640    |   | * |   | 100.00 | % | 12.50% |   | 5.00% |   | * |   |
| 53 |   | State  of Colorado |   | * |   | All                                |   | 12 |   | 11N |   | 67W |   | 640    |   | 640    |   | * |   | 100.00 | % | 12.50% |   | 5.00% |   | * |   |
| 54 |   | State  of Colorado |   | * |   | All                                |   | 14 |   | 11N |   | 67W |   | 640    |   | 640    |   | * |   | 100.00 | % | 12.50% |   | 5.00% |   | * |   |
| 55 |   | State  of Colorado |   | * |   | All                                |   | 16 |   | 11N |   | 67W |   | 640    |   | 640    |   | * |   | 100.00 | % | 12.50% |   | 5.00% |   | * |   |
| 56 |   | State  of Colorado |   | * |   | Lots  1 & 2:E2:E2W2(All)  |   | 18 |   | 11N |   | 67W |   | 608.2  |   | 608.2  |   | * |   | 100.00 | % | 12.50% |   | 5.00% |   | * |   |
| 57 |   | State  of Colorado |   | * |   | N2NE:SENE:NW:NESE                  |   | 22 |   | 11N |   | 67W |   | 320    |   | 320    |   | * |   | 100.00 | % | 12.50% |   | 5.00% |   | * |   |
| 58 |   | State  of Colorado |   | * |   | All                                |   | 24 |   | 11N |   | 67W |   | 640    |   | 640    |   | * |   | 100.00 | % | 12.50% |   | 5.00% |   | * |   |
| 59 |   | State  of Colorado |   | * |   | S2  of Lot1:Lot2:SESW:S2SE         |   | 30 |   | 11N |   | 67W |   | 216.36 |   | 216.36 |   | * |   | 100.00 | % | 12.50% |   | 5.00% |   | * |   |
| 60 |   | State  of Colorado |   | * |   | SWNW:NWSW:S2SW                     |   | 32 |   | 11N |   | 67W |   | 160    |   | 160    |   | * |   | 100.00 | % | 12.50% |   | 5.00% |   | * |   |

 

----

 
| 61     |   | State  of Colorado |   | *      |   | All                               |   | 36     |   | 11N    |   | 67W    |   | 640    |   | 640    |   | *     |   | 100.00 | %      | 12.50% |   | 5.00%  |   | *      |   |
|--------|--------|--------------------|--------|--------|--------|-----------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|-------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| 62     |   | State  of Colorado |   | *      |   | All                               |   | 36     |   | 12N    |   | 64W    |   | 640    |   | 640    |   | *     |   | 100.00 | %      | 12.50% |   | 5.00%  |   | *      |   |
| 63     |   | State  of Colorado |   | *      |   | Lot  2:E2SW(SW)                   |   | 30     |   | 12N    |   | 65W    |   | 157.16 |   | 157.16 |   | *     |   | 100.00 | %      | 12.50% |   | 5.00%  |   | *      |   |
| 64     |   | State  of Colorado |   | *      |   | All                               |   | 36     |   | 12N    |   | 65W    |   | 640    |   | 640    |   | *     |   | 100.00 | %      | 12.50% |   | 5.00%  |   | *      |   |
| 65     |   | State  of Colorado |   | *      |   | Lots1-4:S2N2:S2                   |   | 20     |   | 12N    |   | 66W    |   | 584.99 |   | 584.99 |   | *     |   | 100.00 | %      | 12.50% |   | 5.00%  |   | *      |   |
| 66     |   | State  of Colorado |   | *      |   | W2W2                              |   | 28     |   | 12N    |   | 66W    |   | 160    |   | 160    |   | *     |   | 100.00 | %      | 12.50% |   | 5.00%  |   | *      |   |
| 67     |   | State  of Colorado |   | *      |   | Lots  1 & 2:E2W2:E2      |   | 30     |   | 12N    |   | 66W    |   | 651.24 |   | 651.24 |   | *     |   | 100.00 | %      | 12.50% |   | 5.00%  |   | *      |   |
| 68     |   | State  of Colorado |   | *      |   | NW:S2                             |   | 32     |   | 12N    |   | 66W    |   | 480    |   | 480    |   | *     |   | 100.00 | %      | 12.50% |   | 5.00%  |   | *      |   |
| 69     |   | State  of Colorado |   | *      |   | All                               |   | 36     |   | 12N    |   | 66W    |   | 640    |   | 640    |   | *     |   | 100.00 | %      | 12.50% |   | 5.00%  |   | *      |   |
| 70     |   | State  of Colorado |   | *      |   | Lot1:S2NE:NESW:NWSE               |   | 20     |   | 12N    |   | 67W    |   | 176.5  |   | 176.5  |   | *     |   | 100.00 | %      | 12.50% |   | 5.00%  |   | *      |   |
| 71     |   | State  of Colorado |   | *      |   | Lots  1-4:S2N2:N2SW:SWSW:SE       |   | 22     |   | 12N    |   | 67W    |   | 498.36 |   | 498.36 |   | *     |   | 100.00 | %      | 12.50% |   | 5.00%  |   | *      |   |
| 72     |   | State  of Colorado |   | *      |   | Lots  1-4:S2N2:S2                 |   | 24     |   | 12N    |   | 67W    |   | 533.07 |   | 533.07 |   | *     |   | 100.00 | %      | 12.50% |   | 5.00%  |   | *      |   |
| 73     |   | State  of Colorado |   | *      |   | All                               |   | 26     |   | 12N    |   | 67W    |   | 640    |   | 640    |   | *     |   | 100.00 | %      | 12.50% |   | 5.00%  |   | *      |   |
| 74     |   | State  of Colorado |   | *      |   | All                               |   | 28     |   | 12N    |   | 67W    |   | 640    |   | 640    |   | *     |   | 100.00 | %      | 12.50% |   | 5.00%  |   | *      |   |
| 75     |   | State  of Colorado |   | *      |   | Lots  1 & 2:E2:E2W2(All) |   | 30     |   | 12N    |   | 67W    |   | 615.44 |   | 615.44 |   | *     |   | 100.00 | %      | 12.50% |   | 5.00%  |   | *      |   |
| 76     |   | State  of Colorado |   | *      |   | N2NE:SENE:NENW:S2SE               |   | 32     |   | 12N    |   | 67W    |   | 240    |   | 240    |   | *     |   | 100.00 | %      | 12.50% |   | 5.00%  |   | *      |   |
| 77     |   | State  of Colorado |   | *      |   | N2:SW                             |   | 34     |   | 12N    |   | 67W    |   | 480    |   | 480    |   | *     |   | 100.00 | %      | 12.50% |   | 5.00%  |   | *      |   |
| 78     |   | State  of Colorado |   | *      |   | All                               |   | 36     |   | 12N    |   | 67W    |   | 640    |   | 640    |   | *     |   | 100.00 | %      | 12.50% |   | 5.00%  |   | *      |   |
|   |   |               |   |   |   |                              |   |   |   |   |   |   |   |   |   |   |   | ***** |   |   |   |   |   |   |   |   |   |

 

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*Confidential treatment has been requested with respect to certain portions ofthis exhibit.  Omitted portions have beenfiled separately with the Securities and Exchange Commission.

 

----