**Exhibit 10.1**

 

March 10, 2010

 

JamesRussell (J.R.) Reger

SouthFork Exploration, LLC

P.O. Box1782

Billings,Montana 59103

 

**Re:  Agreement to Purchase Oil, Gas and MineralLeases**

 

DearMr. Reger:

 

Thisletter sets forth the terms pursuant to which Plains Energy Investments, Inc.(“Plains”) agrees to purchase all right, title and interests of South ForkExploration, LLC (“SFE”) in those certain oil, gas and mineral leases set forthon Exhibit A hereto (the “Leases”).

 

Plainshereby agrees to pay SFE $1,374,375 cash and issue SFE 2,573,346 unregisteredshares of Plains common stock, par value $0.001 per share (the “Shares”) uponreceipt by Plains of the following:

 

·                  A fairness opinion from an independent partyacceptable in form and substance to Plains confirming that the terms of theproposed transaction are fair and reasonable to Plains and its shareholders;and

 

·                  Executed assignments from SFE on acounty-by-county basis substantially similar to the form attached hereto asExhibit B.

 

SFEhereby agrees to accept the foregoing consideration in exchange for assignmentto Plains of the Leases, and SFE hereby acknowledges the sufficiency of suchconsideration.  Either party mayterminate this agreement in the event Plains has not received a fairnessopinion acceptable in form and substance to Plains by April 1, 2010.

 

SFEhereby agrees to warrant and defend to Plains, its heirs, successors, legalrepresentatives or assigns against any and all lawful claims and/or demands ofall persons whomsoever claiming or to claim any part thereof and to reimbursePlains for any and all costs of suit to defend against the same (including, butnot limited to, reasonable attorneys’ fees and expenses) and for any damages ofPlains and any of its affiliates resulting from any claim made by any personclaiming or to claim any part thereof. In the event at any time hereafter a defect in title shall arise for anyof the Leases, SFE agrees to do remedy such situation by completing either ofthe following at SFE’s sole cost and expense no later than thirty (30) daysfollowing the date on which SFE or Plains (as the case may be) first discoversany title issue:  (i) SFE shall curesuch defect to Plains’ satisfaction or (ii) SFE shall assign to Plains areplacement lease (covering lands acceptable to Plains) at SFE’s sole cost andexpense.

 

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Pleaseacknowledge your agreement to the foregoing agreement by executing this letterin the space provided below.

 

 
|                                              | Sincerely,                                |
|---------------------------------------------------|-------------------------------------------|
|                                              |                                      |
|                                              | **Plains  Energy Investments, Inc.** |
|                                              |                                      |
|                                              | /s/  Mitchell Thompson                    |
|                                              | By  Mitchell Thompson                     |
|                                              | Its  Chief Financial Officer              |
|                                              |                                      |
|                                              |                                      |
| Agreed  and accepted this 10th day of March, 2010 |                                      |
| by  South Fork Exploration, LLC                   |                                      |
|                                              |                                      |
| /s/  J.R. Reger                                   |                                      |
| By  James Russell (J.R.) Reger                    |                                      |
| Its  President                                    |                                      |

 

2

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**Exhibit B**

 

**ASSIGNMENT OF OIL AND GAS LEASES**

 

KNOWALL MEN BY THESE PRESENTS:

 

Thatthe undersigned, **South Fork Exploration,LLC, P.O. Box 1782, Billings, Montana 59103***(hereinafter called Assignor)* for and in consideration ofOne Dollar ($1.00) the receipt whereof is hereby acknowledged, does herebysell, assign, transfer and set over unto **Plains EnergyInvestments, Inc., P.O. Box 1500, Billings, MT 59103***(hereinafter called Assignee)* all of its right, title andinterest in and to the oil and gas leases as set out in **Exhibit “A”**attached hereto and made a part hereof, insofar as said leases cover lands in **Mountrail County, North Dakota**,said oil and gas leases being hereinafter referred to as “Leases”.

 

Reserving,however, unto the Assignor herein an overriding royalty equal to the differencebetween the current existing burdens, and 20.0% of 8/8ths of all the oil, gasand other hydrocarbons produced, saved and marketed from the Leases.  It is the intent to deliver an 80.0% netrevenue interest in each Lease assigned of the oil, liquid hydrocarbons, gases(included without limitation, hydrogen sulfide gas) and their respectiveconstituent products produced, saved and marketed from the lands covered bysaid leases under and by virtue of said leases. This overriding royalty shall be free and clear of all exploration,development and operating costs incurred on or associated with obtainingproduction from the respective lease or lands pooled therewith, provided theoverriding royalty shall bear its proportionate share of all taxes and costsincurred after the production physically leaves the lease, unit or pooled areaboundary.  If Assignor’s interest, or theinterest assigned by Assignor to Assignee, in said Leases is less than the fullfee simple estate in the oil, gas and other hydrocarbons under any tract ortracts of land assigned hereby, the overriding royalty herein reserved byAssignor, with respect to that tract or tracts, shall be proportionatelyreduced.

 

Assignoragrees to warrant and defend to Assignee, its heirs, successors, legalrepresentatives and assigns, the title to the leases against any and all lawfulclaims and/or demands of all persons whomsoever claiming or to claim any partthereof.

 

Theprovisions of this Assignment of Oil and Gas Leases shall be binding upon allsuccessors, representatives and assigns of the Assignor and Assignee.

 

EXECUTEDthis              day of March, 2010.

 
|   | **ASSIGNOR:**                    |
|--------|----------------------------------|
|   |                             |
|   | **SOUTH  FORK EXPLORATION, LLC** |
|   |                             |
|   | By:                              |   |
|   |                             | James  Russell (J.R.) Reger, President |

 

B-1

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|   | **ASSIGNEE:**                             |
|--------|-------------------------------------------|
|   |                                      |
|   | **PLAINS  ENERGY INVESTMENTS, INC.** |
|   |                                      |
|   | By:                                       |   |
|   |                                      | Mitchell  Thompson, Chief Financial Officer |

 

 

**ACKNOWLEDGEMENT**

 
| STATE  OF MONTANA      | )         |
|------------------------|-----------|
|                   | )  § |
| COUNTY  OF YELLOWSTONE | )         |

 

Thisinstrument was acknowledged before me on the           day of March,2010, by James Russell (J.R.) Reger as President of South Fork Exploration, LLCand Mitchell Thompson as Chief Financial Officer of Plains Energy Investments, Inc.on behalf of said companies.

 

 
| Notary  Signature:                         |   |   |
|--------------------------------------------|--------|--------|
| Printed  Name of Notary:                   |   |   |
| Residing  at:                              |   | SEAL   |
| Montana  Notary Public Commission Expires: |   |   |
|                                            |        |        |  |  |  |

 

B-2

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