Unassociated Document


    LETTER
OF INTENT

     

    THIS LETTER OF INTENT,
hereinafter referred to as the “LOI”, is entered into, dated and made effective
this 25th day of August, 2009,

    
      	 	 
	
              BETWEEN:

            	
              AMERICAN PETRO-HUNTER,
      INC.

            
	 	 
	 	(“APH”)
	 	 
	AND:	S&W
      OIL & GAS, LLC
	 	 
	 	(“S&W”)
	 	 


    

    WHEREAS S&W owns one
hundred percent (100%) of the working interest in and the exclusive rights to
drill an oil well in the Colby Prospect (the “Prospect”);

    


    AND WHEREAS APH wishes to
acquire a twenty five percent (25%) working interest in the Prospect, and
S&W wishes to sell and transfer to APH, such interest in exchange for
payment to S&W due and payable as set forth upon cash call.

    


    AND WHEREAS the parties wish
to enter into this letter of intent (the “LOI”) that sets forth the material
terms of agreement and payment structure.

     

    NOW, THEREFORE, in
consideration of $10.00 and other good and valuable consideration, the parties
agree as follows:

     

    
      	
              1.  

            	
              APH
      agrees to acquire 16/64ths or twenty five percent (25%) working interest
      in the Prospect for a cash payment to be determined on cash call. S&W
      will issue 16 units representing the twenty five percent (25%) working
      interest, to APH after receiving the
payment.

            


    

     

    
      	
              2.  

            	
              In
      the event S&W or its representatives determine that the drill stem
      tests and or logs support commercial production, an additional payment per
      1/64th
      will be due from APH for completion of the oil well and for the purchase
      of necessary equipment.

            


    

     

    
      	
              3.  

            	
              If
      any party hereto decides to not pursue the transactions contemplated by
      this LOI, all funds advanced by APH pursuant to this LOI will be due
      immediately and shall be repaid in full to APH.  Any outstanding
      balance shall be subject to a late charge interest rate of one percent
      (1%) per month.

            
	 	 
	4.  	S&W,
      represents and warrants to APH that:
	 	 


    

    
      	
              (a)  

            	
              it
      is validly incorporated and is in good standing with all regulatory
      agencies;

            


    

     

    
      
        
        

      

      
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              (b)  

            	
              there
      are no legal actions against S&W or its directors or officers nor does
      S&W know of any intended legal actions against it or any of its
      officers or directors and S&W is not engaged in any legal actions
      against other parties, and is current in all filings with tax and
      regulatory authorities;

            


    

    


    
      	
              (c)  

            	
              it
      owns one hundred percent (100%) of the working interest in and the
      exclusive rights to drill an oil well in the Colby Prospect , subject to
      any liens, charges, securitizations, UCC filings or debts disclosed to APH
      prior to the execution of this LOI;
and

            


    

    


    
      	
              (d)  

            	
              it
      has the authority and is not precluded by law or contract from issuing the
      twenty five percent (25%) working interest in the Prospect contemplated
      under this LOI.

            


    

    


    
      	
              5.

            	
              Neither
      APH, on the one hand, nor S&W on the other, will make any disclosure
      or public announcements of the proposed transactions, this LOI, or the
      terms hereof without the prior knowledge of the other, which shall not be
      unreasonably withheld.

            


    

    


    
      	
              6.

            	
              Each
      party agrees and acknowledges that such party and its directors, officers,
      employees, agents and representatives will and may disclose business
      information and information about the proposed transaction in the course
      of securing financings for APH and S&W and that both parties and their
      representatives may be required to disclose that information under
      applicable regulatory requirements, if
any.

            


    

    


    
      	
              7.

            	
              This
      LOI shall be construed in accordance with, and governed by, the laws of
      the State of Nevada, and each party separately and unconditionally
      subjects to the jurisdiction of any court of competent authority in the
      State of Nevada, and the rules and regulations thereof, for all purposes
      related to this agreement and/or their respective performance hereunder
      and regardless of whether or not any business, transaction of business or
      other connection to the State of Nevada is
  absent.

            


    

    


    
      	
              8.

            	
              This
      LOI sets forth the entire understanding of the parties with respect to the
      subject matter hereof and may be modified only by a written document
      signed by all parties.

            


    

    


    
      	
              9.

            	
              If
      any term or provision hereof shall be held illegal or invalid, this LOI
      shall be construed and enforced as if such illegal or invalid term or
      provision had not been contained
herein.

            


    

    


    
      	
              10.

            	
              All
      references to currency in this LOI are references to the lawful currency
      of the United States of America.

            


    

     

    
      
        
        

      

      
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              11.

            	
              APH,
      and its successors, assigns or affiliates may, at any time upon prior
      consent of S&W, which consent shall not be unreasonably withheld, at
      their sole discretion, assign any or all of their interest in and to this
      LOI.  The purpose of this paragraph is to permit APH to engage
      in a going public, financing or similar
  transaction.

            


    

    


    
 

    DATED
EFFECTIVE THIS 25TH DAY OF AUGUST, 2009

    


    


    AMERICAN
PETRO-HUNTER, INC.

    


    


    /s/
Robert McIntosh

    Name:
Robert McIntosh

    Title:
President, CEO

    


    


    


    The
above terms are hereby read, understood, acknowledged and accepted effective the
25th day of August, 2009.

    


    


    


    S&W
GAS & OIL, LLC

    


    


    /s/
R.D. Wood

    Name:
R.D. Wood

    Title:
President

    


    
      
        
        

      

      
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