**PURCHASE      AND SALE AGREEMENT **

**BETWEEN**

**WYOMING      MINERAL EXPLORATION, LLC**

**AS      SELLER**

**AND**

**AS      BUYER**

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**TABLE      OF CONTENTS**

| Article                I                            Assets                       | 5                                                          |
|----------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------|
|                                                                                                                                         |                                                       |
| Section                1.01                                                                                                                  | Agreement                to Sell and Purchase              | 5 |
| Section                1.02                                                                                                                  | Assets                                                     | 5 |
| Section                1.03                                                                                                                  | Excluded                Assets                             | 6 |
|                                                                                                                                         |                                                       |   |
| Article                II                          Purchase                Price           | 7                                                          |
|                                                                                                                                         |                                                       |
| Section                2.01                                                                                                                  | Purchase                Price                              | 7 |
| Section                2.02                                                                                                                  | Deposit                                                    | 7 |
| Section                2.03                                                                                                                  | Allocated                Values                            | 7 |
| Section                2.04                                                                                                                  | Effective                Time                              | 7 |
|                                                                                                                                         |                                                       |   |
| Article                III          Title                Matters                           | 8                                                          |
|                                                                                                                                         |                                                       |
| Section                3.01                                                                                                                  | Title                Examination Period                    | 8 |
| Section                3.02                                                                                                                  | Defensible                Title and Permitted Encumbrances | 8 |
| Section                3.03                                                                                                                  | Title                Defect                                | 10 |
| Section                3.04                                                                                                                  | Notice                of Title Defects.                    | 11 |
| Section                3.05                                                                                                                  | Remedies                for Title Defects.                 | 13 |
| Section                3.06                                                                                                                  | Special                Warranty of Title                   | 13 |
| Section                3.07                                                                                                                  | Consents                to Assignment                      | 14 |
| Section                3.08                                                                                                                  | Remedies                for Title Benefits.                | 14 |
|                                                                                                                                         |                                                       |   |
| Article                IV          Environmental                Matters                         | 15                                                         |
|                                                                                                                                         |                                                       |
| Section                4.01                                                                                                                  | Environmental                Review.                       | 15 |
| Section                4.02                                                                                                                  | Environmental                Definitions.                  | 16 |
| Section                4.03                                                                                                                  | Notice                of Environmental Defects.            | 17 |
| Section                4.04                                                                                                                  | Remedies                for Environmental Defects.         | 17 |
|                                                                                                                                         |                                                       |   |
| Article                V           Representations                and Warranties of Seller | 18                                                         |
|                                                                                                                                         |                                                       |
| Section                5.01                                                                                                                  | Seller’s                Existence                    | 18 |
| Section                5.02                                                                                                                  | Legal                Power                                 | 19 |
| Section                5.03                                                                                                                  | Execution                                                  | 19 |
| Section                5.04                                                                                                                  | Brokers                                                    | 19 |
| Section                5.05                                                                                                                  | Bankruptcy                                                 | 19 |
| Section                5.06                                                                                                                  | Suits                                                      | 19 |
| Section                5.07                                                                                                                  | Royalties                                                  | 19 |
| Section                5.08                                                                                                                  | Taxes                                                      | 19 |
| Section                5.09                                                                                                                  | Contracts                                                  | 20 |
| Section                5.10                                                                                                                  | Liens                                                      | 20 |
| Section                5.11                                                                                                                  | Information                                                | 20 |

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|                                                                                                                                   |                                                           |   |
|----------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------|--------|
| Article                VI          Representations                and Warranties of Buyer | 20                                                             |
|                                                                                                                                   |                                                           |
| Section                6.01                                                                                                            | Buyer’s                Existence                         | 20     |
| Section                6.02                                                                                                            | Legal                Power                                     | 20     |
| Section                6.03                                                                                                            | Execution                                                      | 20     |
| Section                6.04                                                                                                            | Brokers                                                        | 20     |
| Section                6.05                                                                                                            | Bankruptcy                                                     | 21     |
| Section                6.06                                                                                                            | Suits                                                          | 21     |
| Section                6.07                                                                                                            | Qualifications                                                 | 21     |
| Section                6.08                                                                                                            | Investment                                                     | 21     |
| Section                6.09                                                                                                            | Funds                                                          | 21     |
| Section                6.10                                                                                                            | Information                                                    | 22     |
|                                                                                                                                   |                                                           |   |
| Article                VII         Seller’s                Conditions to Close           | 21                                                             |
|                                                                                                                                   |                                                           |
| Section                7.01                                                                                                            | Representations                                                | 22     |
| Section                7.02                                                                                                            | Performance                                                    | 22     |
| Section                7.03                                                                                                            | Pending                Matters                                 | 22     |
| Section                7.04                                                                                                            | Purchase                Price                                  | 22     |
| Section                7.05                                                                                                            | Execution                and Delivery of the Closing Documents | 22     |
| Section                7.06                                                                                                            | Consents                and Preferential Rights to Purchase    | 22     |
|                                                                                                                                   |                                                           |   |
| Article                VIII        Buyer’s                Conditions to Close                 | 22                                                             |
|                                                                                                                                   |                                                           |
| Section                8.01                                                                                                            | Availability                & Cost of Injected Water       | 22     |
| Section                8.02                                                                                                            | Hydrocarbon                Leases                              | 23     |
| Section                8.03                                                                                                            | Representations                                                | 22     |
| Section                8.04                                                                                                            | Performance                                                    | 23     |
| Section                8.05                                                                                                            | Pending                Matters                                 | 23     |
| Section                8.06                                                                                                            | Execution                and Delivery of the Closing Documents | 23     |
| Section                8.07                                                                                                            | Consents                and Preferential Rights to Purchase    | 23     |
|                                                                                                                                   |                                                           |   |
| Article                IX          Tax                Matters                             | 23                                                             |
|                                                                                                                                   |                                                           |
| Section                9.01                                                                                                            | Transfer                Taxes                                  | 23     |
| Section                9.02                                                                                                            | Ad                Valorem and Similar Taxes                    | 23     |
|                                                                                                                                   |                                                           |   |
| Article                X           The                Closing                        | 23                                                             |
|                                                                                                                                   |                                                           |
| Section                10.01                                                                                                           | Time                and Place of the Closing                   | 23     |
| Section                10.02                                                                                                           | Adjustments                to Purchase Price at the Closing.   | 24     |
| Section                10.03                                                                                                           | Closing                Statement                               | 24     |
| Section                10.04                                                                                                           | Actions                of Seller at the Closing.               | 24     |
| Section                10.05                                                                                                           | Actions                of Buyer at the Closing.                | 25     |
|                                                                                                                                   |                                                           |   |
| Article                XI          Termination                                            | 25                                                             |
|                                                                                                                                   |                                                           |
| Section                11.01                                                                                                           | Right                of Termination                            | 25     |
| Section                11.02                                                                                                           | Effect                of Termination                           | 26     |
| Section                11.03                                                                                                           | Termination                Damages.                            | 26     |
| Section                11.04                                                                                                           | Attorneys’                Fees, Etc                      | 27     |

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|                                                                                                                             |                                                                                 |   |
|----------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------|--------|
| Article                XII         Post                Closing Obligations               | 27                                                                                   |
|                                                                                                                             |                                                                                 |
| Section                12.01                                                                                                     | Allocation                of Expense and Revenues.                                   | 27     |
| Section                12.02                                                                                                     | Final                Accounting Statement.                                           | 28     |
| Section                12.03                                                                                                     | Further                Cooperation                                                   | 29     |
|                                                                                                                             |                                                                                 |   |
| Article                XIII        Operation                of the Assets                     | 29                                                                                   |
|                                                                                                                             |                                                                                 |
| Section                13.01                                                                                                     | Operations                after Execution Date                                       | 29     |
| Section                13.02                                                                                                     | Limitations                on the Operational Obligations and Liabilities of Seller  | 32     |
| Section                13.03                                                                                                     | Operation                of the Assets After the Closing                             | 32     |
| Section                13.04                                                                                                     | Risk                of Loss; Casualty Loss.                                          | 33     |
| Section                13.05                                                                                                     | Operatorship                                                                         | 34     |
| Section                13.06                                                                                                     | Transition                Period                                                     | 34     |
|                                                                                                                             |                                                                                 |   |
| Article                XIV       Obligations                and Indemnification                    | 35                                                                                   |
|                                                                                                                             |                                                                                 |
| Section                14.01                                                                                                     | Retained                Obligations                                                  | 35     |
| Section                14.02                                                                                                     | Assumed                Obligations                                                   | 35     |
| Section                14.03                                                                                                     | Buyer’s                Indemnification                                         | 35     |
| Section                14.04                                                                                                     | Seller’s                Indemnification - Third Party Non-Environmental Claims | 36     |
| Section                14.05                                                                                                     | Seller’s                Indemnification - Third Party Environmental Claims     | 36     |
| Section                14.06                                                                                                     | Notices                and Defense of Indemnified Matters                            | 36     |
|                                                                                                                             |                                                                                 |   |
| Article                XV        Limitations                on Representations and Warranties | 37                                                                                   |
|                                                                                                                             |                                                                                 |
| Section                15.01                                                                                                     | Disclaimers                of Representations and Warranties                         | 37     |
| Section                15.02                                                                                                     | Independent                Investigation                                             | 38     |
| Section                15.03                                                                                                     | Survival                                                                             | 38     |
|                                                                                                                             |                                                                                 |   |
| Article                XVI      Dispute                Resolution                                       | 38                                                                                   |
|                                                                                                                             |                                                                                 |
| Section                16.01                                                                                                     | General                                                                              | 38     |
| Section                16.02                                                                                                     | Senior                Management                                                     | 39     |
| Section                16.03                                                                                                     | Dispute                by Independent Expert.                                        | 39     |
| Section                16.04                                                                                                     | Limitation                on Arbitration                                             | 40     |
|                                                                                                                             |                                                                                 |   |
| Article                XVII     Miscellaneous                                                                | 40                                                                                   |
|                                                                                                                             |                                                                                 |
| Section                17.01                                                                                                     | Names                                                                                | 40     |
| Section                17.02                                                                                                     | Expenses                                                                             | 40     |
| Section                17.03                                                                                                     | Document                Retention                                                    | 40     |
| Section                17.04                                                                                                     | Entire                Agreement                                                      | 40     |
| Section                17.05                                                                                                     | Waiver                                                                               | 40     |
| Section                17.06                                                                                                     | Publicity                                                                            | 41     |
| Section                17.07                                                                                                     | Construction                                                                         | 41     |
| Section                17.08                                                                                                     | No                Third Party Beneficiaries                                          | 41     |
| Section                17.09                                                                                                     | Assignment                                                                           | 41     |
| Section                17.10                                                                                                     | Governing                Law                                                         | 41     |
| Section                17.11                                                                                                     | Notices                                                                              | 41     |
| Section                17.12                                                                                                     | Severability                                                                         | 42     |
| Section                17.13                                                                                                     | Time                of the Essence                                                   | 42     |
| Section                17.14                                                                                                     | Counterpart                Execution                                                 | 42     |

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**EXHIBITS      AND SCHEDULES**

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**PURCHASE      AND SALE AGREEMENT **

**W      I T N E S S E T H:**

**Article      I**

**Assets**

|   | (a) | the                leasehold estates in and to the oil, gas and mineral leases described                or                referred to in Exhibit A (the “Leases”)                and any overriding royalty interests in and to the lands covered                by the                Leases, assignments and other documents of title described or referred                to                in Exhibit A, all as more specifically described in Exhibit A                (collectively, the “Subject                Interests,”                or singularly, a “Subject                Interest”); |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | all                rights incident to the Subject Interests, including, without limitation,                (i) all rights with respect to the use and occupation of the surface                of                and the subsurface depths under the Subject Interests; (ii) all rights                with respect to any pooled, communitized or unitized acreage by virtue                of                any Subject Interest being a part thereof, including all Hydrocarbon                (as                defined in Subsection (d) of this Section 1.02) production after                the                Effective Time (as defined in Section 2.04) attributable to the Subject                Interests or any such pool or unit allocated to any such Subject                Interest; |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | to                the extent assignable or transferable, all easements, rights-of-way,                surface leases, servitudes, permits, licenses, franchises and other                estates or similar rights and privileges directly related to or used                solely in connection with the Subject Interests (the “Easements”),                including, without limitation, the Easements described or referred                to in                Exhibit A; |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | (d) | to                the extent assignable or transferable, all personal property, equipment,                fixtures, inventory and improvements located on or used in connection                with                the Subject Interests and the Easements or with the production, treatment,                sale, or disposal of oil, gas or other hydrocarbons (collectively,                “Hydrocarbons”),                byproducts or waste produced therefrom or attributable thereto, including,                without limitation, all wells located on the lands covered by the                Subject                Interests or on lands with which the Subject Interests may have been                pooled, communitized or unitized (whether producing, shut in or abandoned,                and whether for production, injection or disposal), including, without                limitation, the wells described in Exhibit B, wellhead equipment,                pumps, pumping units, flowlines, gathering systems, piping, tanks,                buildings, treatment facilities, injection facilities, disposal                facilities, compression facilities, and other materials, supplies,                equipment, facilities and machinery (collectively, “Personal Property”); |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (e) | to                the extent assignable or transferable, all contracts, agreements                and other                arrangements that directly relate to the Subject Interests, the Leases                or                the Easements, including, without limitation, production sales contracts,                farmout agreements, operating agreements, service agreements and                similar                arrangements (collectively,                the“Contracts”); |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (f) | to                the extent assignable or transferable, all books, records, files,                muniments of title, reports and similar documents and materials,                including, without limitation, lease records, well records, and division                order records, well files, title records (including abstracts of                title,                title opinions and memoranda, and title curative documents related                to the                Assets), contracts and contract files, correspondence, that relate                to the                foregoing interests in the possession of, and maintained by, Seller                (collectively, the “Records”);                and |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (g) | all                geological and geophysical data relating to the Subject Interests,                other                than such data that is interpretive in nature or which cannot be                transferred without the consent of or payment to any Third Party                as                disclosed on Exhibit A. For purposes of this Agreement, “Third                Party”                means any person or entity, governmental or otherwise, other than                Seller                or Buyer, and their respective affiliates; the term includes, but                is not                limited to, working interest owners, royalty owners, lease operators,                landowners, service contractors and governmental                agencies. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**Article      II**

**Purchase      Price**

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**Article      III**

**Title      Matters**

** **

|   | (a) | entitles                Seller to receive not less than the percentage set forth in Exhibit                A as                Seller’s “Net                Revenue Interest”                of all Hydrocarbons produced, saved and marketed from each leasehold                property as set forth in Exhibit A; and |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | is                free and clear of all liens and encumbrances in                title. |
|--------|-----|-----------------------------------------------------------------------------------------|

|   | (c) | The                term “Permitted Encumbrances” shall mean any of the following matters to                the extent the same are valid and subsisting and affect the                Assets: |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (i) | the                Leases, and Contracts; |
|--------|-----|-------------------------------------------|

|   | (ii) | any                (A) undetermined or inchoate liens or charges constituting or securing                the                payment of expenses that were incurred incidental to the maintenance,                development, production or operation of the Assets or for the purpose                of                developing, producing or processing Hydrocarbons therefrom or therein,                and                (B) materialman’s, mechanics’, repairman’s, employees’, contractors’,                operators’ liens or other similar liens or charges for liquidated amounts                arising in the ordinary course of business (1) that Seller has agreed                to                assume or pay pursuant to the terms hereof, or (2) for which Seller                is                responsible for paying or releasing at the                Closing; |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iii) | any                liens for taxes and assessments not yet delinquent or, if delinquent,                that                are being contested in good faith in the ordinary course of business                and                for which any Seller has agreed to pay pursuant to the terms hereof                or                which have been prorated pursuant to the terms                hereof; |
|--------|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | (iv) | the                terms, conditions, restrictions, exceptions, reservations, limitations                and                other matters contained in (including any liens or security interests                created by law or reserved in oil and gas leases for royalty, bonus                or                rental, or created to secure compliance with the terms of) the agreements,                instruments and documents that create or reserve to Seller its interest                in                the Assets; |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (v) | any                obligations or duties affecting the Assets to any municipality or                public                authority with respect to any franchise, grant, license or permit                and all                applicable laws, rules, regulations and orders of any Governmental                Authority (as defined in Section                4.02(b)); |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (vi) | any                (A) easements, rights-of-way, servitudes, permits, surface leases                and                other rights in respect of surface operations, pipelines, grazing,                hunting, lodging, canals, ditches, reservoirs or the like, and (B)                easements for streets, alleys, highways, pipelines, telephone lines,                power                lines, railways and other similar rights-of-way on, over or in respect                of                property owned or leased by Seller or over which Seller owns                rights-of-way, easements, permits or licenses, to the extent that                same do                not materially interfere with the oil and gas operations to be conducted                on the Assets; |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (vii) | all                lessors’ royalties, overriding royalties, net profits interests, carried                interests, production payments, reversionary interests and other                burdens                on or deductions from the proceeds of production created or in existence                as of the Effective Time, whether recorded or filed, provided that                such                matters do not operate to reduce the Net Revenue Interests of Seller                below                those set forth in Exhibit A, decrease the Working Interests of Seller                below those set forth in Exhibit A, or increase the Working Interests                of                Seller above those set forth in Exhibit A without a corresponding                increase                in the Net Revenue Interests; |
|--------|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (viii) | preferential                rights to purchase or similar agreements with respect to which (A)                waivers                or consents are obtained from the appropriate parties for the transaction                contemplated hereby, or (B) required notices have been given for                the                transaction contemplated hereby to the holders of such rights and                the                appropriate period for asserting such rights has expired without                an                exercise of such rights; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ix) | required                Third Party consents to assignments or similar agreements with respect                to                which (A) waivers or consents are obtained from the appropriate parties                for the transaction contemplated hereby, or (B) required notices                have been                given for the transaction contemplated hereby to the holders of such                rights and the appropriate period for asserting such rights has expired                without an exercise of such rights; |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | (x) | all                rights to consent by, required notices to, filings with, or other                actions                by Governmental Authorities in connection with the sale or conveyance                of                oil and gas leases or interests therein that are customarily obtained                subsequent to such sale or                conveyance; |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (xi) | production                sales contracts; division orders; contracts for sale, purchase, exchange,                refining or processing of Hydrocarbons; unitization and pooling                designations, declarations, orders and agreements; operating agreements;                agreements of development; area of mutual interest agreements; gas                balancing or deferred production agreements; processing agreements;                plant                agreements; pipeline, gathering and transportation agreements; injection,                repressuring and recycling agreements; carbon dioxide purchase or                sale                agreements; salt water or other disposal agreements; seismic or                geophysical permits or agreements; and any and all other agreements                that                have terms that are ordinary and customary to the oil, gas, sulphur                and                other mineral exploration, development, processing or extraction                business                or in the business of processing of gas and gas condensate production                for                the extraction of products therefrom, to the extent the same do not                reduce                the Net Revenue Interests of Seller below those set forth in                Exhibit A, decrease the Working Interests of Seller below those set                forth in Exhibit A, or increase the Working Interests of Seller above                those set forth in Exhibit A without a corresponding increase in the                Net Revenue Interest; |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (xii) | rights                reserved to or vested in any Governmental Authority to control or                regulate                any of the Assets and the applicable laws, rules, and regulations                of such                Governmental Authorities; and |
|--------|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (xiii) | all                defects and irregularities affecting the Assets which individually                or in                the aggregate (A) do not operate to (1) reduce the Net Revenue Interest                of                Seller, (2) increase the proportionate share of costs and expenses                of                leasehold operations attributable to or to be borne by the Working                Interests of Seller, (3) decrease the Working Interests of Seller                below                those set forth in Exhibit A, or (4) otherwise interfere materially                with                the operation, value or use of the Assets, or (5) that would not                be                considered material when applying general industry standards; or                (B)                operate to increase the proportionate share of costs and expenses                of                leasehold operations attributable to or to be borne by the Working                Interest of Seller, so long as there is a proportionate increase                in                Seller’s Net Revenue Interest. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | (a) | If                Buyer discovers any Title Defect affecting any Asset, Buyer shall                notify                Seller as promptly as possible, but no later than the expiration                of the                Title Examination Period of such alleged Title Defect. To be effective,                such notice must (i) be in writing, (ii) be received by Seller prior                to                the expiration of the Title Examination Period, (iii) describe the                Title                Defect in sufficient, specific detail (including any alleged variance                in                the Net Revenue Interest), (iv) identify the specific Asset or Assets                affected by such Title Defect. Any matters that may otherwise constitute                Title Defects, but of which Seller has not been specifically notified                by                Buyer in accordance with the foregoing, shall be deemed to have been                waived by Buyer for all purposes and shall constitute Permitted                Encumbrances and Assumed Obligations hereunder. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | Upon                the receipt of such effective notice from Buyer, Seller and Buyer                shall                attempt to mutually agree on a resolution including, but not limited                to                (i) attempt to cure such Title Defect at any time prior to the Closing,                (ii) exclude the affected Asset from the sale and reduce the Purchase                Price by the mutually agreed allocated value of such affected Asset,                or                (iii) not take any action with respect to the alleged Title Defect                and                Seller shall indemnify Buyer pursuant to Section 14.04 against all                costs                which Buyer may incur in connection with same. As soon as possible                after                providing notice of any Title Defect, Buyer agrees to provide to                Seller                copies of all data, title opinions and other documents and information                in                Buyer’s possession or control that are not privileged and that bear upon                or relate to the alleged Title Defect and Buyer’s determination of the                Title Defect Value, and include the value of such Title Defect as                reasonably determined by Buyer in good                faith. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | (c) | The                value attributable to each Title Defect (the “Title Defect Value”) that is                asserted by Buyer in the Title Defect notices shall be determined                based                upon the criteria set forth below: |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (i) | If                the Title Defect is a lien upon any Asset, the Title Defect Value                is the                amount necessary to be paid to remove the lien from the affected                Asset. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | If                the Title Defect asserted is that the Net Revenue Interest attributable                to                any Subject Interest or the Working Interest is less than that stated                in                Exhibit A or the Working Interest attributable to any well or unit                is                greater than that stated in Exhibit A, then the Title Defect Value                shall                be the absolute value of the number determined by the following                formula: |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iii) | If                the Title Defect represents an obligation, encumbrance, burden or                charge                upon the affected Asset (including any increase in Working Interest                for                which there is not a proportionate increase in Net Revenue Interest)                for                which the economic detriment to Buyer is unliquidated, the amount                of the                Title Defect Value shall be determined by taking into account the                Allocated Value of the affected Asset, the portion of the Asset affected                by the Title Defect, the legal effect of the Title Defect, the potential                discounted economic effect of the Title Defect over the life of the                affected Asset, and the Title Defect Values placed upon the Title                Defect                by Buyer and Seller. |
|--------|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iv) | If                a Title Defect is not in effect or does not adversely affect an Asset                throughout the entire productive life of such Asset, such fact shall                be                taken into account in determining the Title Defect                Value. |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (v) | The                Title Defect Value of a Title Defect shall be determined without                duplication of any costs or losses included in another Title Defect                Value                hereunder. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | (vi) | Notwithstanding                anything herein to the contrary, in no event shall a Title Defect                Value                exceed the Allocated Value of the wells, units or other Assets affected                thereby. |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (vii) | Such                other factors as are reasonably necessary to make a proper                evaluation. |
|--------|-------|-----------------------------------------------------------------------------------------------------------|

|   | (a) | With                respect to each Title Defect that is not cured on or before the Closing,                except as otherwise provided in this Section 3.05, the Purchase Price                shall be reduced by an amount equal to the Title Defect Value agreed                upon                in writing by Buyer and Seller. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | If                any Title Defect is in the nature of an unobtained consent to assignment                or other restriction on assignability, the provisions of Section                3.08                shall apply. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | If                on or before Closing the Parties have not agreed upon the validity                of any                asserted Title Defect or have not agreed on the Title Defect Value                attributable thereto, either Party shall have the right to elect                to have                the validity of such Title Defect and/or such Title Defect Value                determined by an Independent Expert pursuant to Section 16.03. If                the                validity of any asserted Title Defect, or the Title Defect Value                attributable thereto, is not determined before Closing, the Purchase                Price                paid at Closing shall not be reduced by virtue of such disputed Title                Defect or Title Defect Value, and upon the final resolution of such                dispute the Title Defect Value, if any, found to be attributable                to such                Title Defect shall, subject to this Section, be promptly refunded                by                Seller to Buyer. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (d) | Notwithstanding                anything to the contrary in this Agreement, (i) if the value of a                given                individual Title Defect (or individual Title Benefit (as defined                in                Section 3.08(a))) does not exceed $25,000, then no adjustment to                the                Purchase Price shall be made for such Title Defect (or Title Benefit),                (ii) if the aggregate adjustment to the Purchase Price determined                in                accordance with this Agreement for Title Defects (exceeding $25,000)                does                not exceed two per cent (2%) of the Purchase Price prior to any                adjustments thereto, then no adjustment of the Purchase Price shall                be                made therefor, and (iii) if the aggregate adjustment to the Purchase                Price                determined in accordance with this Agreement for Title Defects (exceeding                $25,000) does exceed two per cent (2%) of the Purchase Price prior                to any                adjustments thereto, then the Purchase Price shall only be adjusted                by the                amount of such excess. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | (a) | If                either Party discovers any Title Benefit during the Title Examination                Period affecting the Assets, it shall promptly notify the other Party                in                writing thereof on or before the expiration of the Title Examination                Period. Subject to Section 3.05, Seller shall be entitled to an upward                adjustment to the Purchase Price pursuant to Section 10.02(a)(i)                with                respect to all Title Benefits, in an amount mutually agreed upon                by the                Parties. For purposes of this Agreement, the term “Title                Benefit”                shall mean Seller’s interest in any Subject Interest that is greater than                or in addition to that set forth in Exhibit A (including, without                limitation, a Net Revenue Interest that is greater than that set                forth in                Exhibit A) or Seller’s Working Interest in any Subject Interest that is                less than the Working Interest set forth in Exhibit A (without a                corresponding decrease in the Net Revenue Interest). Any matters                that may                otherwise constitute Title Benefits, but of which Buyer has not been                specifically notified by Seller in accordance with the foregoing,                shall be                deemed to have been waived by Seller for all purposes. The Title                Benefit                Value shall be the absolute value of the number determined by the                following formula: |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | If                with respect to a Title Benefit the Parties are not deemed to have                agreed                on the amount of the upward Purchase Price adjustment or have not                otherwise agreed on such amount prior to the Closing Date, Seller                or Buyer                shall have the right to elect to have such Purchase Price adjustment                determined by an Independent Expert pursuant to Section 16.03. If                the                amount of such adjustment is not determined pursuant to this Agreement                by                the Closing, the undisputed portion of the Purchase Price with respect                to                the Asset affected by such Title Benefit shall be paid by Buyer at                the                Closing and, subject to Section 3.05, upon determination of the amount                of                such adjustment, any unpaid portion thereof shall be paid by Buyer                to                Seller. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Article      IV**

**Environmental      Matters**

|   | (a) | Buyer                shall have the right to conduct or cause a consultant (“Buyer’s                Environmental Consultant”)                to conduct an environmental review of the Assets following the Execution                Date until September 15, 2006 at 5:00 p.m. Mountain Time (the                “Environmental Examination Period”) (“Buyer’s                Environmental Review”).                The cost and expense of Buyer’s Environmental Review, if any, shall be                borne solely by Buyer. Buyer shall (and shall cause Buyer’s Environmental                Consultant to): (i) consult with Seller before conducting any work                comprising Buyer’s Environmental Review, (ii) perform all such work in a                safe and workmanlike manner and so as to not unreasonably interfere                with                Seller’s operations, and (iii) comply with all applicable laws, rules, and                regulations. Buyer shall be solely responsible for obtaining any                Third                Party consents that are required in order to perform any work comprising                Buyer’s Environmental Review, and Buyer shall consult with Seller prior                to                requesting each such Third Party consent. Seller shall have the right                to                have a representative or representatives accompany Buyer and Buyer’s                Environmental Consultant at all times during Buyer’s Environmental Review.                With respect to any samples taken in connection with Buyer’s Environmental                Review, upon the request of Seller, Buyer shall take split samples,                providing one of each such sample, properly labeled and identified,                to                Seller. Buyer hereby agrees to release, defend, indemnify and hold                harmless Seller from and against all claims, losses, damages, costs,                expenses, causes of action and judgments of any kind or character                arising                out of or relating to Buyer’s Environmental Review, but said                indemnification shall exclude any claims of Seller for loss of market                value of the Assets. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | Unless                otherwise required by applicable law, Buyer shall (and shall cause                Buyer’s                Environmental Consultant to) treat confidentially any matters revealed                by                Buyer’s Environmental Review and any reports or data generated from such                review (the “Environmental                Information”),                and Buyer shall not (and shall cause Buyer’s Environmental Consultant to                not) disclose any Environmental Information to any Governmental Authority                or other Third Party without the prior written consent of Seller.                Unless                otherwise required by law, Buyer may use the Environmental Information                only in connection with the transactions contemplated by this Agreement                and may not, directly or indirectly use the Environmental Information                in                any manner contrary to Seller’s interests. If Buyer, Buyer’s Environmental                Consultant, or any Third Party to whom Buyer has provided any                Environmental Information become legally compelled to disclose any                of the                Environmental Information, Buyer shall provide Seller with prompt                notice                sufficiently prior to any such disclosure so as to allow Seller to                file                any protective order, or seek any other remedy, as it deems appropriate                under the circumstances. If this Agreement is terminated prior to                the                Closing, Buyer shall deliver the Environmental Information to Seller,                which Environmental Information shall become the sole property of                Seller.                Buyer shall provide copies of the Environmental Information to Seller                without charge. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (a) | Environmental                Defects.                For purposes of this Agreement, the term “Environmental                Defect”                shall mean, with respect to any given Asset, an individual environmental                condition that constitutes a material violation of Environmental                Laws in                effect as of the date of this Agreement in the jurisdiction in which                such                Asset is located. Environmental Defect shall not be deemed to include                an                environmental condition disclosed in writing to Buyer prior to the                execution of this Agreement. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | Governmental                Authority.                For purposes of this Agreement, the term “Governmental                Authority”                shall mean, as to any given Asset, the United States and the state,                county, parish, city and political subdivisions in which such Asset                is                located and that exercises jurisdiction over such Asset, and any                agency,                department, board or other instrumentality thereof that exercises                jurisdiction over such Asset. |
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|   | (c) | Environmental                Laws.                For purposes of this Agreement, the term “Environmental                Laws”                shall mean all laws, statutes, ordinances, court decisions, rules                and                regulations of any Governmental Authority pertaining to the environment                as                may be interpreted by applicable court decisions or administrative                orders. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (d) | Environmental                Defect Value.                For purposes of this Agreement, the term “Environmental                Defect Value”                shall mean, with respect to any Environmental Defect, the value,                as of the                Closing Date, of the estimated costs and expenses to correct such                Environmental Defect in the most cost-effective manner reasonably                available, consistent with Environmental Laws, taking into account                that                non-permanent remedies (such as mechanisms to contain or stabilize                hazardous materials, including monitoring site conditions, natural                attenuation, risk-based corrective action, institutional controls                or other                appropriate restrictions on the use of property, caps, dikes,                encapsulation, leachate collection systems, etc.) may be the most                cost-effective manner reasonably available. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (a) | If                Buyer discovers any Environmental Defect that materially affects                the                Assets, Buyer shall notify Seller prior to the expiration of the                Environmental Examination Period of such alleged Environmental Defect.                To                be effective, such notice must: (i) be in writing; (ii) be received                by                Seller prior to the expiration of the Environmental Examination Period;                (iii) describe the Environmental Defect in sufficient, specific detail,                including, without limitation, (A) the written conclusion of Buyer’s                Environmental Consultants that an Environmental Defect exists, which                conclusion shall be reasonably substantiated by the factual data                gathered                in Buyer’s Environmental Review, and (B) a separate specific citation of                the provisions of Environmental Laws alleged to be violated and the                related facts that substantiate such violation; (iv) identify the                specific                Assets that are materially affected by such Environmental Defect;                (v)                identify the procedures recommended to correct the Environmental                Defect,                together with any related recommendations from Buyer’s Environmental                Consultant; and (vi) state Buyer’s estimate of the Environmental Defect                Value, including the basis for such estimate, for which Buyer would                agree                to adjust the Purchase Price in order to accept such Environmental                Defect                if Seller elected Section 4.04(b) as the remedy therefor. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | Upon                the receipt of such effective notice from Buyer, Seller and Buyer                shall                attempt to mutually agree on a resolution including, but not limited                to,                (i) attempt to cure such Environmental Defect at any time prior to                the                Closing; (ii) exclude the affected Asset from the sale and reduce                the                Purchase Price by the allocated value of such affected Asset; or                (iii) not                take any remedial action with respect to the alleged Environmental                Defect                and Seller agrees to indemnify Buyer pursuant to Section 14.05 against                all                costs which Buyer may incur in connection with                same. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | Any                matters that may otherwise constitute Environmental Defects, but                of which                Seller has not been specifically notified by Buyer in accordance                with the                foregoing, together with any environmental matter that does not constitute                an Environmental Defect, shall be deemed to have been waived by Buyer                for                all purposes and constitute an Assumed Obligation (as defined in                Section                14.02). |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (a) | If                any Environmental Defect described in a notice delivered in accordance                with Section 4.03 is not cured on or before the Closing, then the                Purchase                Price shall be reduced by the Environmental Defect Value of such                Environmental Defect as agreed by the                Parties. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (b) | If                Buyer and Seller have not agreed as to the validity of any asserted                Environmental Defect, or if the Parties have not agreed on the                Environmental Defect Value therefor, then on or before five (5) Business                Days prior to the Closing Date either Party shall have the right                to elect                to have validity of the asserted Environmental Defect, and/or the                Environmental Defect Value for such Environmental Defect, determined                by an                Independent Expert pursuant to Section 16.03. If the validity of                any such                asserted Environmental Defect or the amount of any such Environmental                Defect Value is not determined by the Closing, the Asset affected                by such                disputed Environmental Defect shall be excluded from the Closing                and the                Purchase Price paid at Closing shall be reduced by the value allocated                to                that Asset. Upon resolution of such dispute, the Environmental Defect                Value, if any, found to be attributable to such Environmental Defect                shall, subject to this Section 4.04, be paid by Seller to Buyer and                the                Asset conveyed to the Buyer, if that is part of the mutually agreed                settlement. Notwithstanding the foregoing, either party shall have                unilateral right to exclude an Asset from the sale if the Environmental                Defect Value exceeds the Allocated Value of the Asset(s) affected                thereby. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | Notwithstanding                anything to the contrary in this Agreement, (i) if the Environmental                Defect Value for a given individual Environmental Defect does not                exceed                $25,000, then no adjustment to the Purchase Price shall be made for                such                Environmental Defect; (ii) if the aggregate adjustment to the Purchase                Price determined in accordance with this Agreement for Environmental                Defects (exceeding $25,000) does not exceed two per cent (2%) of                the                Purchase Price prior to any adjustments thereto, then no adjustment                of the                Purchase Price shall be made therefore; and (iii) if the aggregate                adjustment to the Purchase Price determined in accordance with this                Agreement for Environmental Defects (exceeding $25,000) does exceed                two                per cent (2%) of the Purchase Price prior to any adjustments thereto,                then                the Purchase Price shall only be adjusted by the amount of such                excess. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Article      V**

**Representations      and Warranties of Seller**

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|   | (a) | any                provision of Seller’s articles of organization, operating agreement or                other governing documents; |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | except                for any preferential purchase rights and consents to assignment disclosed                on Schedule 5.02 to this Agreement, any material agreement or instrument                to which Seller is a party or by which Seller is bound;                or |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | any                judgment, order, ruling or decree applicable to Seller as a party                in                interest or any law, rule or regulation applicable to                Seller. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**Article      VI**

**Representations      and Warranties of Buyer**

|   | (a) | any                provision of Buyer’s charter, bylaws**,**                or                other governing documents; |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | any                material agreement or instrument to which Buyer is a party or by                which                Buyer is bound; or |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | any                judgment, order, ruling or decree applicable to Buyer as a party                in                interest or any law, rule or regulation applicable to                Buyer. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**Article      VII**

**Seller’s      Conditions to Close**

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**Article      VIII**

**Buyer’s      Conditions to Close**

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**Article      IX**

**Tax      Matters**

**Article      X**

**The      Closing**

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|   | (a) | At                the Closing, the Purchase Price shall be increased by the following                amounts: |
|--------|-----|---------------------------------------------------------------------------------------------------------------|

|   | (i) | all                upward Purchase Price adjustments for Title Benefits determined in                accordance with Article III; |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | any                other amount provided for in this Agreement or agreed upon in writing                by                Buyer and Seller; and |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iii) | an                estimate of any and all transfer, sales, gross receipts, compensating                use                or similar taxes, or assessments resulting from the                transaction. |
|--------|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | At                the Closing, the Purchase Price shall be decreased by the following                amounts: |
|--------|-----|---------------------------------------------------------------------------------------------------------------|

|   | (i) | the                Allocated Value of any Subject Interest sold prior to the Closing                to the                holder of a preferential right pursuant to Section                3.07; |
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|   | (ii) | all                downward Purchase Price Adjustment for Title Defects and Environmental                Defects determined in accordance with Article III and Article IV; |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iii) | any                other amount provided for in this Agreement or agreed upon by Buyer                and                Seller; and |
|--------|-------|--------------------------------------------------------------------------------------------------------------------------------------|

|   | (iv) | the                Deposit and any accrued interest on the                Deposit. |
|--------|------|------------------------------------------------------------------------------------|

|   | (c) | The                adjustments described in Sections 10.02(a) and (b) are hereinafter                referred to as the “Purchase                Price Adjustments.” |
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|   | (a) | execute,                acknowledge and deliver to Buyer the Assignment (as defined in Exhibit                D                of this Agreement) and such other instruments (in form and substance                mutually agreed upon by Buyer and Seller) as may be reasonably necessary                to convey the Assets to Buyer; |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | execute,                acknowledge and deliver to Buyer letters in lieu of transfer or division                orders directing all purchasers of production from the Subject Interests                to make payment of proceeds attributable to such production to Buyer                from                and after the Closing Date as reasonably requested by Buyer prior                to the                Closing Date; |
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|   | (c) | deliver                to Buyer possession of the Assets; |
|--------|-----|-----------------------------------------------------------|

|   | (d) | execute                and deliver to Buyer an affidavit attesting to its non-foreign status; |
|--------|-----|-----------------------------------------------------------------------------------------------|

|   | (e) | deliver                to Buyer appropriate change of operator forms on those Assets operated                by                Seller; and |
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|   | (f) | execute,                acknowledge and deliver any other agreements provided for herein                or                necessary or desirable to effectuate the transactions contemplated                hereby. |
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|   | (a) | deliver                to Seller the Purchase Price (as adjusted pursuant to the provisions                hereof and net of the Deposit) by wire transfer to an account designated                in writing by Seller; |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | take                possession of the Assets; and |
|--------|-----|---------------------------------------------------|

|   | (c) | execute,                acknowledge and deliver the Assignment and any other agreements provided                for herein or necessary or desirable to effectuate the transactions                contemplated hereby. |
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**Article      XI**

**Termination**

|   | (a) | by                mutual written consent of the                Parties; |
|--------|-----|-------------------------------------------------------------------------|

|   | (b) | by                Seller on the Closing Date if the conditions set forth in Article                VII have                not been satisfied in all material respects by Buyer or waived by                Seller                in writing by the Closing Date; |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | (c) | subject                to the objection deadline stated in Section 8.01 and Section 8.02,                by                Buyer on the Closing Date if the conditions set forth in Article                VIII have                not been satisfied in all material respects by Seller or waived by                Buyer                in writing by the Closing Date; |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (d) | by                Seller if the Closing shall not have occurred on or before November                30,                2006,                unless the parties have otherwise mutually agreed to extend the Closing                Date; |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (e) | by                either Party if any Governmental Authority shall have issued an order,                judgment or decree or taken any other action challenging, restraining,                enjoining, prohibiting or invalidating the consummation of any of                the                transactions contemplated herein; |
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|   | (f) | by                either Party if (i) the aggregate amount of the Purchase Price Adjustments                agreed by the Parties or otherwise finally determined pursuant to                this                Agreement with respect to all uncured Title Defects (net of the aggregate                amount of the Purchase Price Adjustments for all Title Benefits agreed                by                the Parties) plus (ii) the aggregate amount of the Environmental                Defect                Values agreed by the Parties or otherwise finally determined pursuant                to                this Agreement with respect to all Environmental Defects, exceeds                fifteen                percent (15%) percent of the Purchase Price; |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (g) | by                Seller if Buyer shall not have paid the Deposit amount on or before                the                due date as provided herein; or |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (h) | as                otherwise provided herein; |
|--------|-----|----------------------------------------------|

|   | (a) | If                all conditions precedent to the obligations of Buyer set forth in                Article                VIII have been met and the transactions contemplated by this Agreement                are                not consummated on or before the Closing Date because of the failure                of                Buyer to perform any of its material obligations hereunder or the                breach                of any representation herein by Buyer, then in such event, Seller                shall                have the option to terminate this Agreement, in which case Seller                shall                retain (i) the Deposit and any accrued interest, (ii) intellectual                property, data, reports of Buyer and Buyer’s agents and contractors                related to the Big Muddy field, except to the extent said reports                and data                are not subject to the attorney-client or work-product privileges,                and                (iii) improvements, tools, equipment, and fixtures related to the                Big                Muddy field, all of (i) through (iii) to be deemed liquidated damages                on                account of Buyer’s failure to perform its obligations under this Agreement                or Buyer’s breach of any representation under this Agreement, which remedy                shall be the sole and exclusive remedy available to Seller for Buyer’s                failure to perform or breach. Buyer shall also be responsible for                paying                the costs and expenses stated in Section 13.01(b)(ii)-(vii). Buyer                and                Seller acknowledge and agree that (i) Seller’s actual damages upon the                event of such a termination are difficult to ascertain with any certainty,                (ii) that the Deposit is a reasonable estimate of such actual damages                and                (iii) such liquidated damages do not constitute a                penalty. |
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|   | (b) | If                this Agreement is terminated under paragraphs (c), (f), or (g) of                Section                11.01 or by the mutual written agreement of Buyer and Seller, then                Seller                shall return the Deposit with accrued interest to Buyer in immediately                available funds within three (3) Business Days after the event giving                rise                to such payment to Buyer. Buyer and Seller shall thereupon have the                rights                and obligations set forth elsewhere herein. |
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**REGARDLESS      OF WHETHER CAUSED OR CONTRIBUTED TO BY THE SOLE, JOINT, COMPARATIVE OR      CONCURRENT NEGLIGENCE OR STRICT LIABILITY OF THE OTHER      PARTY**

**Article      XII**

**Post      Closing Obligations**

|   | (a) | Provided                that the Closing occurs, appropriate adjustments shall be made between                Buyer and Seller so that (i) Seller will receive all proceeds from                sales                of Hydrocarbons that are produced and saved from and after the Execution                Date and any other revenues arising out of the ownership or operation                of                the Assets from and after the Execution Date, net of all applicable                production, severance, and similar taxes, and net of all costs and                expenses that are incurred in the ownership or operation of the Assets                from and after the Execution Date, including, without limitation,                all                drilling costs, all capital expenditures, all overhead charges under                applicable operating or other agreements (regardless of whether Seller                or                an affiliate of Seller serves as operator prior to the Closing) through                the Closing Date, and (ii) Buyer will receive all proceeds from sales                of                Hydrocarbons that are produced and saved after the Closing                Date and                any other revenues arising out of the ownership or operation of the                Assets                after the Closing Date, net of all applicable production, severance,                and                similar taxes, and net of all costs and expenses that are incurred                in the                ownership or operation of the Assets after the Closing                Date. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | (b) | In                addition to the foregoing, the Seller will be paid (i) the amount                as of                the Closing Date of all prepaid ad valorem, property or similar taxes                and                assessments based upon or measured by ownership of the Assets and                any                prepaid costs, including rentals and insurance premiums, insofar                as such                prepaid costs relate to periods of time prior to the Closing Date,                and                (ii) the value of all merchantable Hydrocarbons produced prior to                the                Closing Date but in storage above the inlet connection or upstream                of the                applicable sales meter on the Closing Date. Notwithstanding the foregoing,                to the extent that the ad valorem tax liabilities of the parties                under                this Agreement as set forth in Section 9.02 cannot be finally determined                by the Closing Date, the parties each agree to reconcile the ad valorem                liability and pay or reimburse (as may be necessary) the other party                as                soon as said liability can be                determined. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | In                addition to the foregoing, the Buyer will be paid (i) an amount equal                to                all unpaid ad valorem, property, production, severance and similar                taxes                and assessments based upon or measured by the ownership of the Assets                that                are attributable to periods of time prior to the Closing Date, which                amounts shall, to the extent not actually assessed, be computed based                on                such taxes and assessments for the preceding tax year (such amount                to be                prorated for the period of Seller’s and Buyer’s ownership before and after                the Closing Date), and (ii) an amount equal to all cash in, or                attributable to, suspense accounts relative to the Assets for which                Buyer                has assumed responsibility under Section 14.02.                Notwithstanding                the foregoing, to the extent that the ad valorem tax liabilities                of the                parties under this Agreement as set forth in Section 9.02 cannot                be                finally determined by the Closing Date, the parties each agree to                reconcile the ad valorem liability and pay or reimburse (as may be                necessary) the other party as soon as said liability can be                determined. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (d) | All                amounts due under this Section 12.01 will be settled in accordance                with                final Accounting Statement under Section                12.03. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (a) | On                or before sixty (60) days after the Closing Date, Seller shall prepare                and                deliver to Buyer a post-closing statement setting forth a detailed                calculation of all post-Closing adjustments applicable to the period                for                time between the Effective Time and Closing (“Accounting Statement”).                Buyer agrees that, if necessary, the sixty (60) day time period may                be                extended for an additional thirty (30) day period. The Accounting                Statement shall include any adjustment or payment which was not finally                determined as of the Closing Date and the allocation of revenues                and                expenses as determined in accordance with Section 12.01. To the extent                reasonably required by Seller, Buyer shall assist in the preparation                of                the Accounting Statement. Seller shall provide Buyer such data and                information as Buyer may reasonably request supporting the amounts                reflected on the Accounting Statement in order to permit Buyer to                perform                or cause to be performed an audit. The Accounting Statement shall                become                final and binding upon the parties on the thirtieth (30th) day following                receipt thereof by Buyer (the “Final Settlement Date”) unless Buyer gives                written notice of its disagreement (a “Notice of Disagreement”) to Seller                prior to such date. Any Notice of Disagreement shall specify in detail                the                dollar amount, nature and basis of any disagreement so asserted.                If a                Notice of Disagreement is received by Seller in a timely manner,                then the                Parties shall resolve the Dispute (as defined in Section 16.01) evidenced                by the Notice of Disagreement in accordance with Article                XVI. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (b) | Within                fifteen (15) Business Days after the Final Settlement Date, Seller                shall                pay to Buyer or Buyer shall pay to Seller in immediately available                funds                the net amount due. For purposes of this Agreement, the term “Final                Statement”                shall mean (i) the revised Statement becoming final pursuant to this                Section, or (ii) upon resolution of any Dispute regarding a Notice                of                Disagreement, the revised Statement reflecting such resolutions,                which the                Parties shall issue, or cause the Independent Expert or arbitrators                to                issue, as applicable, following such resolution. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Article      XIII**

**Operation      of the Assets**

----

----

----

|   | (a) | From                and after the date of execution of this Agreement and until the Closing,                and subject to the provisions of applicable operating and other                agreements, and further subject to the provisions of this Article                XIII,                Seller shall use its reasonable efforts to operate the Assets and                use its                reasonable efforts to cause any other operators to operate and administer                the Assets in a manner consistent with its past practices, and shall                carry                on its business with respect to the Assets in substantially the same                manner as before execution of this Agreement. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | Notwithstanding                anything to the contrary in this Article XIII, Seller shall have                no                liability to Buyer for, and Buyer hereby agrees to release, defend,                indemnify and hold harmless Seller from, the incorrect payment of                delay                rentals, royalties, shut-in royalties or similar payments or for                any                failure to pay any such payments through mistake or oversight **(INCLUDING                THOSE RESULTING FROM SELLER’S SOLE, JOINT, COMPARATIVE OR CONCURRENT                NEGLIGENCE OR STRICT LIABILITY)**                provided that such payments relate to production months after the                Closing                Date. In no event shall Buyer’s remedy for any Seller’s breach of its                obligations under this Article XIII exceed the Allocated Value of                the                Subject Interest affected by such                breach. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**(INCLUDING      THOSE RESULTING FROM SELLER’S SOLE, JOINT, COMPARATIVE OR CONCURRENT NEGLIGENCE      OR STRICT LIABILITY)**

|   | (a) | Subject                to the provisions of clauses (b) and (c) of this Section, after the                Execution Date Buyer shall assume all risk of loss with respect to,                and                any change in the condition of, the depreciation of personal property,                and                the depletion of Hydrocarbons even if caused by the watering-out                of any                well, the collapse of casing, or sand infiltration of                wells. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | Subject                to the provisions of clauses (a), (b) and (c) of this Section, Seller                shall assume all risk of loss with respect to, and any change in                the                condition of, casualty to tools, lines, tanks, and equipment prior                to                Closing. If after the date of this Agreement and prior to the Closing                any                part of the Assets shall be damaged or destroyed by fire or other                casualty, this Agreement shall remain in full force and effect                notwithstanding any such damage or destruction, and the Parties shall                proceed with the transactions contemplated by this Agreement                notwithstanding such damage or destruction, subject to the following.                If a                claim is submitted to Seller’s insurer, and Seller shall retain sole                discretion whether it submit any claim, then any proceeds from insurance                shall be applied to the repair or replacement of the damaged or destroyed                Asset(s) and the Purchase Price shall not be reduced. If no claim                is                submitted or if a claim is submitted and coverage is denied, the                Purchase                Price shall be reduced by an amount agreed upon in writing by Buyer                and                Seller. If on or before Closing the Parties have not agreed upon                the value                on a damaged or destroyed Asset for which no claim is submitted or                for                which there is no coverage, either Party shall have the right to                elect to                have the value determined by an Independent Expert pursuant to Section                16.03. If the value is not determined before Closing, the Purchase                Price                paid at Closing shall not be reduced by virtue of such disputed value,                and                upon the final resolution of such dispute the value, if any, shall,                subject to this Section, be promptly refunded by Seller to Buyer.                Notwithstanding anything to the contrary in this Agreement, (i) if                the                value of an individual Asset damaged or destroyed by fire or other                casualty does not exceed $25,000, then no adjustment to the Purchase                Price                shall be made. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (c) | If                after the date of this Agreement and prior to the Closing any part                of the                Assets shall be taken in condemnation or under the right of eminent                domain                or if proceedings for such purposes shall be pending or threatened,                this                Agreement shall remain in full force and effect notwithstanding any                such                destruction, taking or proceeding, or the threat thereof and the                Parties                shall proceed with the transactions contemplated by this Agreement                notwithstanding such taking without reduction of the Purchase Price,                but                subject to the following. In the event of any taking described in                this                subsection, at the Closing, Seller shall pay to Buyer all sums paid                to                Seller by third parties by reason of the taking of such Assets (up                to the                Allocated Value thereof), including any sums paid pursuant to any                policy                or agreement of insurance or indemnity, and shall assign, transfer                and set                over unto Buyer all of the rights, title and interest of Seller in                and to                any claims, causes of action, unpaid proceeds or other payments from                third                parties arising out of such taking (up to the Allocated Value                thereof). |
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|   | (d) | Other                than policies that are listed on Schedule 13.04, Seller shall not                be                obligated to carry or maintain, and shall have no obligation or liability                to Buyer for its failure to carry or maintain, any insurance coverage                with                respect to any of the Assets. |
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**Article      XIV**

**Obligations      and Indemnification**

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** **
**.**

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**Article      XV**

**Limitations      on Representations and Warranties**

**EXCEPT      FOR THE EXPRESS REPRESENTATIONS OF SELLER IN THIS AGREEMENT,**
**BUYER      ACKNOWLEDGES THAT SELLER HAS NOT MADE, AND SELLER HEREBY EXPRESSLY DISCLAIMS      AND      NEGATES, AND BUYER HEREBY EXPRESSLY WAIVES, ANY REPRESENTATION OR WARRANTY,      EXPRESS, IMPLIED, AT COMMON LAW, BY STATUTE OR OTHERWISE RELATING TO (a)      PRODUCTION RATES, RECOMPLETION OPPORTUNITIES, DECLINE RATES, GAS BALANCING      INFORMATION OR THE QUALITY, QUANTITY OR VOLUME OF THE RESERVES OF HYDROCARBONS,      IF ANY, ATTRIBUTABLE TO THE ASSETS, (b) THE ACCURACY, COMPLETENESS OR      MATERIALITY OF ANY INFORMATION, DATA OR OTHER MATERIALS (WRITTEN OR ORAL) NOW,      HERETOFORE OR HEREAFTER FURNISHED TO BUYER BY OR ON BEHALF OF SELLER, AND (c)      THE ENVIRONMENTAL CONDITION OF THE ASSETS. **
**EXCEPT      FOR THE EXPRESS REPRESENTATIONS OF SELLER IN THIS AGREEMENT,**
**SELLER      EXPRESSLY DISCLAIMS AND NEGATES, AND BUYER HEREBY WAIVES, AS TO PERSONAL      PROPERTY, EQUIPMENT, INVENTORY, MACHINERY AND FIXTURES CONSTITUTING A PART      OF      THE ASSETS (i) ANY IMPLIED OR EXPRESS WARRANTY OF MERCHANTABILITY, (ii) ANY      IMPLIED OR EXPRESS **

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**WARRANTY      OF FITNESS FOR A PARTICULAR PURPOSE, (iii) ANY IMPLIED OR EXPRESS WARRANTY      OF      CONFORMITY TO MODELS OR SAMPLES OF MATERIALS, (iv) ANY RIGHTS OF PURCHASERS      UNDER APPROPRIATE STATUTES TO CLAIM DIMINUTION OF CONSIDERATION OR RETURN OF      THE      PURCHASE PRICE, (v) ANY IMPLIED OR EXPRESS WARRANTY OF FREEDOM FROM DEFECTS,      WHETHER KNOWN OR UNKNOWN, (vi) ANY AND ALL IMPLIED WARRANTIES EXISTING UNDER      APPLICABLE LAW, AND (vii) ANY IMPLIED OR EXPRESS WARRANTY REGARDING      ENVIRONMENTAL LAWS, THE RELEASE OF MATERIALS INTO THE ENVIRONMENT, OR PROTECTION      OF THE ENVIRONMENT OR HEALTH, IT BEING THE EXPRESS INTENTION OF BUYER AND SELLER      THAT THE PERSONAL PROPERTY, EQUIPMENT, INVENTORY, MACHINERY AND FIXTURES      INCLUDED IN THE ASSETS SHALL BE CONVEYED TO BUYER, AND BUYER SHALL ACCEPT SAME,      AS IS, WHERE IS, WITH ALL FAULTS AND IN THEIR PRESENT CONDITION AND STATE OF      REPAIR AND BUYER REPRESENTS TO SELLER THAT BUYER WILL MAKE OR CAUSE TO BE MADE      SUCH INSPECTIONS WITH RESPECT TO SUCH PERSONAL PROPERTY, EQUIPMENT, INVENTORY,      MACHINERY AND FIXTURES AS BUYER DEEMS APPROPRIATE. SELLER AND BUYER AGREE THAT,      TO THE EXTENT REQUIRED BY APPLICABLE LAW TO BE EFFECTIVE, THE DISCLAIMERS OF      CERTAIN WARRANTIES CONTAINED IN THIS SECTION ARE “CONSPICUOUS” DISCLAIMERS FOR      THE PURPOSES OF ANY APPLICABLE LAW, RULE OR ORDER.**

**Article      XVI**

**Dispute      Resolution**

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** **

|   | (a) | Each                Party shall have the right to submit Disputes regarding title issues,                environmental issues, damaged Assets under Section 13.04(b), or                calculation of the Statement or revisions thereto, to an independent                expert appointed in accordance with this Section 16.03 (each, an                “Independent                Expert”),                who shall serve as the sole arbitrator, subject to the following.                The                Independent Expert shall be appointed by mutual agreement of the                Parties                from among candidates with experience and expertise in the area that                is                the subject of such Dispute, and failing such agreement, Buyer and                Seller                shall each appoint an Independent Expert with experience and expertise                in                the area that is the subject of such Dispute and the two Independent                Experts will select a third Independent Expert. Disputes to be resolved                by                Independent Expert(s) shall be resolved in accordance with mutually                agreed                procedures and rules and failing such agreement, in accordance with                the                rules and procedures of the Wyoming Arbitration Act and the Rules                of the                American Arbitration Association to the extent such Rules do not                conflict                with such Wyoming Arbitration Act or the provisions of this Agreement                The                Independent Expert(s) shall be instructed by the Parties to resolve                such                Dispute as soon as reasonably practicable in light of the circumstances.                The decision and award of the Independent Expert(s) shall be binding                upon                the Parties as an award under the Federal Arbitration Act and final                and                nonappealable to the maximum extent permitted by law, and judgment                thereon                may be entered in a court of competent jurisdiction and enforced                by any                Party as a final judgment of such                court. |
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|   | (b) | The                charges and expenses of the Independent Expert(s) shall be shared                equally                by Seller and Buyer. |
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|   | (c) | Any                arbitration hearing held pursuant to Section 16.03 shall be held                in                Casper, Wyoming. |
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**Article      XVII**

**Miscellaneous**

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| Seller: | Wyoming                Mineral Exploration, LLC139                W. Second Street, Suite 3E                        Casper,                WY                82601                                              Fax:                307-577-8799                                 |
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| Buyer: | Rancher                Energy Corp.                        1050-17th                Street, Suite 1700Denver,                Colorado 80265      Fax:                720-904-5698                 |
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| **SELLER:** **WYOMING                MINERAL EXPLORATION, LLC** By:________________________________Name:______________________________ Title:_______________________________                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
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| **BUYER:** **RANCHER                ENERGY CORP.** By:                /s/ John                Works                                                              Name:                John                Works                                                              Title:                President and                CEO                                      |

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