exv10w5



 




Exhibit 10.5


NONCOMPETITION AND CONFIDENTIALITY AGREEMENT




     THIS NONCOMPETITION AND CONFIDENTIALITY AGREEMENT (this “Agreement”) is entered into
as of October 31, 2005, to be effective as of the Transaction Closing Date, by and between Dr.
Kenneth Q. Carlile (hereinafter referred to as “Dr. Carlile”), and Sabine Production
Partners, LP (the “Company”).



     WHEREAS, Cano Petroleum, Inc., a Delaware corporation (“Cano”), Carlile Management,
LLC, a Texas limited liability company (“Carlile Management”), and Haddock Enterprises,
LLC, a Texas limited liability company (“Haddock”), being all of the members of Sabine
Operating, as defined below (each a “Member” and collectively the “Members”)
entered into that certain SPP Transaction Summary dated August 4, 2005 (the “Summary”); and



     WHEREAS, the Members are the sole members of Sabine Production Operating, LLC, a Texas limited
liability company (“Sabine Operating”), which serves as the Manager of Sabine Production
Management, LLC, a Texas limited liability company (“Sabine Management”), which serves as
the general partner of the Company; and



     WHEREAS, Dr. Carlile will, subject to the terms and provisions of this Agreement and the below
described Regulations, serve as a member of the Governing Board of Managers and as an executive
officer of Sabine Operating; and



     WHEREAS, Dr. Carlile has informed the Company that he presently holds the position of officer,
director, member or partner in a number of entities as set forth in Paragraph 7 of this Agreement
(the “Other Entities”) and as such Dr. Carlile must also act in the best interest of the
Other Entities; and the Company hereby expressly agrees, understands and acknowledges that, subject
to the terms and provisions of this Agreement, actions taken for the Other Entities listed under
the Competition Disclosures in Paragraph 7 will not be deemed to constitute competition with the
Company in violation of the terms of this Agreement and shall not be deemed to constitute
usurpation of an opportunity of the Company; and



     WHEREAS, those certain Amended and Restated Regulations of Sabine Operating (the
“Regulations”) that the Members are entering into contemporaneously herewith incorporate
certain principles set forth in the Summary, including without limitation, the protocol, to be
followed by the Governing Board of Managers and its Conflicts Committee in evaluating any Related
Party Transaction; and



     WHEREAS, pursuant to Paragraph X of the Summary, the Members and the Company have
contemporaneously entered into the Omnibus Agreement dated the date hereof but to be effective as
of the Transaction Closing Date among the Members and the Company (the “Omnibus
Agreement”), the Regulations, the Compensation Reimbursement Agreement dated the date hereof
between Cano and the Company, and this Agreement (collectively, the “Transaction
Agreements”) effectuating the principles set forth in the Summary;



 









 





     NOW, THEREFORE, in consideration of and in reliance upon the foregoing premises, the mutual
covenants hereinafter set forth, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto do hereby agree as follows:



     1. Definitions. Except as may be otherwise herein expressly provided, the following terms and
phrases shall have the meanings set forth below:




     “Affiliate” of any specified Person means any other Person, directly or
indirectly, controlling or controlled by or under direct or indirect common control with such
specified Person. For the purposes of this definition, “control” when used with respect to any
Person means the power to direct the management and policies of such Person, directly or
indirectly, whether through the beneficial ownership of a majority of voting securities, by
contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative
to the foregoing. For purposes of this Agreement, the Company shall be deemed to be an
Affiliate of a Member with respect to a confidentiality obligation of a Member to a third party
relating to an Oil & Gas Opportunity.




     “Company Business Strategy” means the business strategy for the Company described
in the Company’s Registration Statement No. 333-1273203 on Form S-4 filed with the Securities
and Exchange Commission (the “Registration Statement”).




     “Identified Property” has the meaning set forth in the Omnibus Agreement.




     “Oil & Gas Opportunity” has the meaning set forth in the Omnibus Agreement.




     “Person” has the meaning set forth in the Omnibus Agreement.




     A party’s “Representatives” shall include a party’s Affiliates and the directors,
managers, members, officers, employees, agents, partners or advisors of such party (including,
without limitation, attorneys, accountants, consultants, bankers and financial advisors) of all
of them.




     “Restrictive Period” means the period beginning on the Transaction Closing Date
and ending on the second anniversary of the Transaction Closing Date.




     “Transaction Closing Date” means the date on which the Company completes the
acquisition of assets of Sabine Royalty Trust as described in the Registration Statement.



     2. Non-Disclosure Agreement. Dr. Carlile will not directly or indirectly disclose any
Confidential Information of the Company, of Cano or its Affiliates (“Cano Entities”), of
Haddock or its Affiliates (the “Haddock Entities”), or of Carlile Management (the Cano
Entities, the Haddock Entities and Carlile Management are called the “Member Entities”);
provided, however, that Dr. Carlile may disclose Confidential Information to Carlile Management.
“Confidential Information” is information with respect to any Identified Property and any
Oil &



 









 







Gas Opportunity that is (a) disclosed in written form and identified by marking thereon as
“Confidential” or (b) is disclosed in another form and is identified as confidential at the time of
disclosure; provided, however, Confidential Information shall NOT include and shall exclude
information which (i) was in the possession of or known by Dr. Carlile without an obligation to
maintain confidentiality thereof prior to its receipt, (ii) is obtained by Dr. Carlile from a third
party who is not subject to a confidentiality obligation; (iii) is independently developed by Dr.
Carlile and/or one or more of the “Other Entities” as defined in Paragraph 9 hereof; (iv) is or
becomes available to the public or is generally known in the industry in which the Company operates
other than as a result of disclosure by any person (including but not limited to Dr. Carlile) in
violation of any obligation owing to the Company or the Members; or (v) Dr. Carlile is required to
disclose under any applicable laws, rules, regulations or directives of any government agency,
tribunal or authority having proper jurisdiction or under subpoena or other process of law.



     3. Non-Use Agreement. Except as specifically provided herein with respect to disclosure, Dr.
Carlile shall not use any Confidential Information for any purpose other than performing his
obligations to the Company. Except as specifically provided herein with respect to disclosure,
Dr. Carlile shall not make copies (written, electronic or in any other media) of any Confidential
Information except to the extent reasonably necessary for performance of his obligations to the
Company. If Dr. Carlile becomes aware during the Restrictive Period that any Confidential
Information appears to be information also being, or relating to a matter being, reviewed or
utilized by, or currently available to or the subject of an interest by, any of the Other Entities,
he shall promptly, but in any event within ten business days, after so becoming aware (i) notify
the Company and Sabine Operating that he will discontinue any review of such Confidential
Information; (ii) return any and all such Confidential Information to the Company or Sabine
Operating without making or retaining any copy or copies thereof; (iii) recuse himself from any
involvement in any decision (including any vote or votes pertaining thereto, whether in his
capacity as a member of the governing board of managers of Sabine Operating or otherwise) that may
be made by Sabine Operating or the Company in connection with such Confidential Information and the
Identified Property or Oil & Gas Opportunity which is the subject of such Confidential Information,
and (iv) waive and relinquish his right to receive any additional Confidential Information relating
to such matter; and he shall continue to maintain the confidentiality of any such Confidential
Information to which Dr. Carlile has been granted access.



     4. Duty to Return Confidential Information. The Confidential Information will remain the
property of the party that developed it and all reports, analyses, worksheets, compilations,
studies, memorandums, and other documents, whether contained in writing, on compact disc, on tape,
on computer disks or otherwise preserved in any medium, whether prepared by Sabine Operating, the
Company or any of the Member Entities, which contain or reflect Confidential Information
(“Other Materials”) will also be the sole property of the party that developed such Other
Materials. Upon the demand of the Company or the Member Entities, Dr. Carlile shall immediately
return or turn over all Confidential Information and Other



 









 





Materials, without making or retaining
any copies thereof in any medium, to the party which owns, generated
or developed the same. 


     5. Competition Disclosure During Restrictive Period. If Dr. Carlile becomes aware during the
Restrictive Period that any Other Entity is likely to compete directly or indirectly with the
Company with respect to any Identified Property or Oil & Gas Opportunity, he shall promptly, but in
any event within ten business days, after so becoming aware (i) notify the Company and Sabine
Operating that he will discontinue any review of such Confidential Information; (ii) return any and
all such Confidential Information to the Company or Sabine Operating without making or retaining
any copy or copies thereof; (iii) recuse himself from any involvement in any decision (including
any vote or votes pertaining thereto, whether in his capacity as a member of the governing board of
managers of Sabine Operating or otherwise) that may be made by Sabine Operating or the Company in
connection with such Confidential Information and the Identified Property or Oil & Gas Opportunity
which is the subject of such Confidential Information, and (iv) waive and relinquish his right to
receive any additional Confidential Information relating to such matter; and he shall continue to
maintain the confidentiality of any such Confidential Information to which Dr. Carlile has been
granted access. It is acknowledged, agreed and understood by and between Dr. Carlile and the
Company that (x) even if the Company has provided Dr. Carlile Confidential Information regarding an
Identified Property or Oil & Gas Opportunity, the Other Entities are not prohibited or foreclosed
from competing for such Identified Property or Oil & Gas Opportunity provided that such Other
Entities did not receive any Confidential Information from Dr. Carlile regarding such Identified
Property or Oil & Gas Opportunity and provided such Other Entities became aware of or developed
knowledge of such Identified Property or Oil & Gas Opportunity independently or from a third party
source which did not have a contractual obligation with the Company to keep such data confidential;
and (y) except as provided herein, the Omnibus Agreement does not apply to Dr. Carlile.



     6. Reasonableness. Dr. Carlile acknowledges and agrees that the restrictions imposed in this
Agreement are reasonable as to time, activity and geographical scope; are not oppressive; were
accepted by Dr. Carlile with full knowledge and understanding of their implications; and are
necessary to protect the business interests of the Company. The Company and Dr. Carlile recognize
that the laws and public policies of various jurisdictions may differ as to the validity and
enforceability of covenants and undertakings of noncompetition and intend that the provisions shall
be enforced to the fullest extent permissible under the laws and public policies of each
jurisdiction in which enforcement is sought and that unenforceability (or modification to conform
to laws and public policies) of any provision of this Agreement shall not render unenforceable or
impair the remainder of the provisions of this Agreement. Accordingly, if any provision shall be
determined to be invalid or unenforceable, in whole or in part, under the laws or public policies
of any jurisdiction in which enforcement is sought, then, as to such jurisdiction, the provisions
shall be deemed amended to delete or modify as necessary the offending provision and to alter the
balance thereof in order to render it valid and enforceable in such jurisdiction.



 









 





     7. Competition Disclosures. The Company acknowledges that, as of the execution date of this
Agreement, Dr. Carlile has the affiliations (“Other Capacities”) with the other entities
(“Other Entities”) engaged in oil and gas activities as set forth in Schedule A
attached hereto and incorporated herein by reference. On or prior to the Transaction Closing Date,
Dr. Carlile shall furnish to the Company an updated listing, in the same form as the attached
Schedule A, of Dr. Carlile’s Other Capacities with Other Entities as of the Transaction
Closing Date and that listing shall replace and be substituted for the Schedule A
attached to this Agreement as of the Effective Date. From and after that time, all references in
this Agreement to Schedule A shall mean and refer to that substituted Schedule A.



     The Company acknowledges that Dr. Carlile may enter into or maintain Other Capacities with
other businesses not listed in Schedule A hereto, but Dr. Carlile agrees to provide the
Company written notice of any other entities that may potentially compete with the Company whether
now in existence or formed in the future (each an “Additional Other Entity”) and to furnish
the Company with adequate disclosure (similar to the disclosure above) regarding each Additional
Other Entity. Each Additional Other Entity shall be regarded as an Other Entity for all purposes
hereunder.



     The Company acknowledges that, as of the execution date of this Agreement, the Counties
and/or Parishes in which the Other Entities operate leasehold interests, non-operated leasehold
interests, undeveloped leasehold interests, prospects, overriding royalty interests, royalty
interests and surface rights are set forth in Schedule B attached hereto and incorporated
herein by reference. On or prior to the Transaction Closing Date, Dr. Carlile shall furnish to the
Company a listing, in the same form as the attached Schedule B, of the Counties and/or
Parishes in which the Other Entities, as of the Transaction Closing Date, operate leasehold
interests, non-operated leasehold interests, undeveloped leasehold interests, prospects, overriding
royalty interests, royalty interests and surface rights and that listing shall replace and be
substituted for the Schedule B attached to this Agreement as of the Effective Date. From
and after that time, all references in this Agreement to Schedule B shall mean and refer to
that substituted Schedule B.



     The Company expressly and explicitly understands, acknowledges and agrees that the performance
by Dr. Carlile of Dr. Carlile’s duties in his Other Capacities for the Other Entities, as set forth
above, shall be deemed NOT to be a breach or a violation of this Agreement provided that Dr.
Carlile otherwise complies with the terms and provisions of this Agreement.



     Further, Dr. Carlile and the Company expressly and explicitly understand, acknowledge and
agree that, this Agreement does not in any way or manner limit the States, Counties and/or Parishes
in which the Company, Dr. Carlile or one or more of the above described Other Entities may attempt
to acquire and/or actually acquires interests or conducts oil and gas activities, even if it is in
the same Counties and/or Parishes in which the Company, Dr. Carlile or the Other Entities owns oil
and gas interests or in which the Company, Dr. Carlile or the Other Entities plans to attempt to
acquire oil and gas interests in the future.



 









 





     The Company also understands and acknowledges that as of the execution date of this Agreement,
the only entity of the Other Entities in which Dr. Carlile owns controlling interest is KCZC Oil &
Gas, Ltd. and KCZC Operating, LLC. On or prior to the Transaction Closing Date, Dr. Carlile shall
identify to the Company in writing each of the Other Entities in which Dr. Carlile owns a
controlling interest as of that date.



     8. Change in Business Strategy by an Other Entity. The Company understands that the Other
Entities currently have different primary business
strategies than the Company Business Strategy and presently intend to continue executing their
business strategies. If during the Restrictive Period one or more of the Other Entities alter its
primary business strategy to a primary business strategy that matches the Company Business
Strategy, Dr. Carlile shall give the Company written notice thereof promptly, but in any event
within ten business days, upon first becoming aware of such alteration. Upon the receipt of such
notice, the Company, acting through its remaining Members, may, by the unanimous decision of Cano
and Haddock, request that Dr. Carlile resign from the governing board of managers and all other
offices of Sabine Operating, whereupon Dr. Carlile and Carlile Management shall elect within ten
business days of a request, either (x) to resign all such positions and relinquish all voting
rights and powers they may have as a Member of Sabine Operating and as a member of the governing
board of managers of Sabine Operating; or (y) to agree in writing to bind himself and that Other
Entity to the provisions of Sections 5 and 10 of the Omnibus Agreement as fully as Cano or its
Affiliates and Haddock or its Affiliates are thereby bound (that is, to waive the exception set
forth in Section 2 of the Omnibus Agreement). It is hereby understood that the pursuit of a
producing oil and gas property (or group of properties) acquisition by one or more of the Other
Entities from time to time and not in connection with an alteration of a primary business strategy
shall not constitute an alteration in primary business strategy to match the Company Business
Strategy.



     9. Time of Essence. Time is of the essence in the performance of this Agreement.



     10. Remedies for Breach. Dr. Carlile and the Company admit that a breach of any provision of
this Agreement would cause irreparable damage to the other party and that monetary damages for any
such breach would be an inadequate remedy to the non-breaching party. Therefore, Dr. Carlile and
the Company consent that the non-breaching party shall be entitled to seek, before any court having
jurisdiction, and without the posting of bond or other security and without the necessity of
proving monetary loss or the inadequacy of monetary damages, a temporary restraining order and a
temporary or permanent injunction or injunctions to prevent breaches of any provision of this
Agreement by any party and to enforce specifically the performance of the provisions of this
Agreement by a party hereto. The remedies under this paragraph are not exclusive and will be in
addition to any other remedy which a party hereto may have by law, at equity or otherwise.



     11. Non-Assignability. No party hereto may assign its rights or obligations hereunder without
the prior written consent of all of the other parties hereto.



     12. Applicable Law. THIS AGREEMENT IS MADE, DELIVERED AND PERFORMABLE IN TARRANT COUNTY,
TEXAS, AND SHALL BE CONSTRUED



 









 







UNDER, GOVERNED BY AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF TEXAS WITHOUT REGARD TO ITS CHOICE OF LAW PRINCIPLES WHICH WOULD REFER TO THE LAW OF
ANOTHER JURISDICTION. ANY ACTION OR PROCEEDING AGAINST ANY PARTY HERETO UNDER OR IN CONNECTION
WITH THIS AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT IN TARRANT COUNTY, TEXAS. EACH OF
THE PARTIES HERETO IRREVOCABLY (A) SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURTS AND (B)
WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE
VENUE OF ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT OR THAT ANY SUCH COURT IS AN
INCONVENIENT OR IMPROPER FORUM.



     13. Notices. Notices shall be sent to the parties at the following addresses:



     If to the Company or Sabine Operating:


Sabine Production Operating, LLC

Attn: Governing Board of Managers

512 Main Street, Suite 1200

Fort Worth, TX 76102

Facsimile: (817) 885-8391



     If to Dr. Carlile:


Dr. Kenneth Q. Carlile

2615 East End Blvd. South

Marshall, TX 75672

Facsimile: (903) 935-0521


Notices may be sent be certified mail, return receipt requested, Federal Express or comparable
overnight delivery service, or facsimile. Notice will be deemed received on the fourth business day
following deposit in U.S. mail and on the first business day following deposit with Federal Express
or other delivery service, or transmission by facsimile. Any party to this Agreement may change its
address for notice by giving written notice to the other party at the address and in accordance
with the procedures provided above.




     14. Miscellaneous. This document contains the entire agreement between Dr. Carlile and the
Company on the subject matter hereof, supersedes all prior agreements, understandings and
discussions between Dr. Carlile and the Company on the subject matter hereof (including but not
limited to the Summary), and may not be modified or waived in any manner except in a writing signed
by all parties. No failure or delay by any party in exercising any right will operate as a waiver
thereof. The obligations contained herein may not be delegated to any other person. The parties’
agreements shall survive termination of this Agreement, cessation of their service, and redelivery
of all Confidential Information. To the extent permitted by applicable law, this Agreement shall
be binding on the parties hereto and their respective heirs, assigns, and legal representatives.
If any provision of this Agreement is held invalid or unenforceable, the remaining provisions of
this Agreement shall not be affected thereby. The parties agree that, at



 









 







the request of the other
party,
they will without further consideration execute and deliver all other instruments, agreements and
documents, and do all other actions, as the requesting party may reasonably request in order more
effectively to carry out the purposes and intentions of this Agreement.



     15. Term. This Agreement shall expire and be of no further force or effect on the second
anniversary of the Transaction Closing Date.



     16. Termination in Event Transaction Is Delayed. Notwithstanding anything to the contrary
contained in this Agreement, this Agreement shall terminate, without continuing obligation or
liability on the part of any party hereto, if the Transaction Closing Date has not occurred on or
before December 31, 2006.



     17. Counterparts. This Agreement shall become binding upon the parties hereto upon execution
and delivery of this document by all parties, which execution and delivery may occur by facsimile
and in multiple counterparts, each of which being deemed an original and all of which, when taken
together being deemed a single document.



     18. Re Omnibus Agreement. In the event of a conflict between the terms and conditions of this
Agreement and the terms and conditions of the Omnibus Agreement of even date herewith among Cano
Petroleum, Inc., Carlile Management, LLC, Haddock Enterprises, LLC and the Company, the terms and
conditions of this Agreement shall govern and prevail.


Accepted and agreed by and among the Company and Dr. Carlile as of the date first set forth
hereinabove, but effective as of the Transaction Closing Date.




/s/ DR.
KENNETH Q. CARLILE
DR. KENNETH Q. CARLILE




SABINE PRODUCTION PARTNERS, LP

By: Sabine Production Management, LLC, its general partner

By: Sabine Production Operating, LLC, its Manager




By: /s/
GERALD W. HADDOCK

          Gerald W. Haddock, Chairman




 









 








SCHEDULE A




OTHER CAPACITIES AND OTHER ENTITIES

as of October 31, 2005




     (a) Dr. Carlile is a Limited Partner in Camterra Resources Partners, Ltd., a Texas Limited
Partnership. Camterra Resources Partners, Ltd. currently owns interest in numerous oil and gas
wells, numerous undeveloped Oil, Gas and Mineral Leases, various unleased mineral interests,
royalty interests, overriding royalty interests and surface rights.



     (b) Dr. Carlile is a Co-Chairman of the Board of Directors, a Shareholder and the Chief
Executive Officer of Camterra Resources, Inc., a Texas Corporation, which is the Managing General
Partner of Camterra Resources Partners, Ltd.



     (c) Dr. Carlile is a Limited Liability Partner and a Managing Partner of Martex Drilling
Company, LLP, a Texas Registered Limited Liability Partnership. Martex Drilling Company, LLP
drills wells for third parties on a contract basis, and it owns non-operating working interests in
a large number of wells. Martex Drilling Company, LLP owns significant leasehold working
interests, royalty interests, overriding royalty interests, mineral interests and surface rights.
Martex Drilling Company, LLP is continuously participating in the drilling of oil and gas wells
with its leasehold working interests. Martex Drilling Company, LLP is continuously acquiring
interests in Oil, Gas and Mineral Leases. Most leasehold, royalty, overriding royalty and surface
rights owned by Martex Drilling Company, LLP are located in Northwest Louisiana and Northeast
Texas.



     (d) Dr. Carlile is a Limited Liability Partner and a Managing Partner in Martex Well Services,
LLP, a Texas Registered Limited Liability Partnership. Martex Well Services, LLP owns workover
rigs, swab rigs and oilfield construction equipment and works for many companies. Martex Well
Services, LLP owns working interest and overriding royalty interests in various oil and gas wells
located within Northeast Texas and Northwest Louisiana.



     (e) Dr. Carlile is a Limited Partner of Fowler Transportation, Ltd., a Texas Limited
Partnership. Fowler Transportation, Ltd. moves drilling rigs and other oilfield equipment for
third parties on a contract basis.



     (f) Dr. Carlile is a Member of Fowler Management, LLC, a Texas Limited Liability Company.
Fowler Management, LLC is the General Partner of Fowler Transportation, Ltd.



     (g) Dr. Carlile is a Limited Partner in KCZC Oil & Gas, Ltd., a Texas Limited Partnership.
KCZC Oil & Gas, Ltd. owns working interests, royalty interests and overriding royalty interests in
numerous producing oil and gas wells. KCZC Oil & Gas, Ltd. also owns working interests, royalty
interests and
overriding royalty interests in numerous undeveloped Oil, Gas and Mineral Leases. KCZC Oil & Gas,
Ltd. also owns various surface interests in various Counties and/or Parishes. KCZC Oil & Gas, Ltd.
is continuously investing and participating in



 









 







the drilling of wells exploring for oil and/or gas
production and in the acquisition of Oil, Gas and Mineral Leases. The Counties and Parishes in
which KCZC Oil & Gas, Ltd. and the Other Entities currently own working interests, overriding
royalty interests, royalty interests, mineral rights and surface rights are listed on the attached
Exhibit B.



     (h) Dr. Carlile is a Member and the Managing Member of KCZC Operating, LLC, a Texas Limited
Liability Company which serves as the General Partner of KCZC Oil & Gas, Ltd.



     (i) Dr. Carlile is a Limited Liability Partner and a Managing Partner in Unitex Properties,
LLP, a Texas Registered Limited Liability Partnership. Unitex Properties, LLP owns non-operating
working interest, royalty interest and overriding royalty interests in numerous oil and gas
properties located primarily in Northeast Texas and Northwest Louisiana.



     (j) Dr. Carlile is a Member in Leonard Road Farms, LLC, a Louisiana Limited Liability Company.
Leonard Road Farms, LLC owns mineral interest, royalty interest and the surface of various lands
located in the Elm Grove Field in Caddo Parish, Louisiana. Dr. Carlile is the Chief Executive
Officer of Camterra Resources, Inc., which is the Manager of Leonard Road Farms, LLC.



     (k) Dr. Carlile is a Member of Robson Farms, LLC, a Louisiana Limited Liability Company.
Robson Farms, LLC owns mineral interest, royalty interest and the surface of various lands located
in the Elm Grove Field in Caddo Parish, Louisiana.



     (l) Dr. Carlile owns various oil and gas working interests, overriding royalty interests,
royalty interests and mineral interests in his own name, Kenneth Q. Carlile.



 









 





SCHEDULE B




COUNTIES AND PARISHES IN WHICH OTHER ENTITIES HAVE INTERESTS

As of October 31, 2005




 









 








EXHIBIT
“B”

To

NONCOMPETITION AGREEMENT AND CONFIDENTIALITY AGREEMENT




	 	 	 	 	 	 	 	 	 	 	 	 	 
	State of Arkansas	 	State of Kansas	 	State of Louisiana	 	State of Mississippi	 	State of New Mexico	 	State of North Dakota	 	State of Oklahoma
	Columbia County

	 	Cove County
	 	Bienville Parish
	 	Covington County
	 	Lea County
	 	Divide County
	 	McClain County
	Union County

	 	 	 	Bossier Parish
	 	Jefferson Davis County
	 	Eddy County	 	 	 	 
	 

	 	 	 	Caddo Parish
	 	Wayne County	 	 	 	 	 	 
	 

	 	 	 	Claiborne Parish	 	 	 	 	 	 	 	 
	 

	 	 	 	DeSoto Parish	 	 	 	 	 	 	 	 
	 

	 	 	 	Jackson Parish	 	 	 	 	 	 	 	 
	 

	 	 	 	Lincoln Parish	 	 	 	 	 	 	 	 
	 

	 	 	 	Ouachita Parish	 	 	 	 	 	 	 	 
	 

	 	 	 	Red River	 	 	 	 	 	 	 	 
	 

	 	 	 	Webster Parish	 	 	 	 	 	 	 	 






	 	 	 	 	 
	State of Texas	 	State of Wyoming
	Andrews County

	 	Morris County
	 	Albany County
	Calhoun County

	 	Nacogdoches County
	 	Big Horn County
	Cass County

	 	Navarro County
	 	Carbon County
	DeWitt County

	 	Ochiltree County
	 	Fremont County
	Freestone County

	 	Panola County
	 	Hot Springs County
	Glasscock County

	 	Reeves County	 	 
	Gregg County

	 	Rusk County	 	 
	Harrison County

	 	Shelby County	 	 
	Henderson County

	 	Smith County	 	 
	Karnes County

	 	Titus County	 	 
	Leon County

	 	Upshur County	 	 
	Madison County

	 	Ward County	 	 
	Marion County

	 	Winkler County	 	 
	Midland County

	 	Wood County