Unassociated Document


    
      Exhibit
        10.40

       

      EXECUTION
        COPY

    


    
      	
              STATE
                OF TEXAS

            	
              §

            
	 	
              §

            
	
              COUNTIES
                OF CHAMBERS

            	
              §

            
	
              AND
                GALVESTON

            	
              §

            


    

     

    ASSIGNMENT
      AND BILL OF SALE

    


    IN
      CONSIDERATION OF Ten Dollars ($10.00) and other good and valuable consideration,
      all cash, the receipt and sufficiency of which are acknowledged, and subject
      to
      the other provisions in this Assignment and Bill of Sale (the “Assignment”), to
      the extent of each of their respective interests, each of MASTERS RESOURCES,
      L.L.C. and MASTERS OIL & GAS, L.L.C., (collectively, “Assignor”) each a
      Texas limited liability company having its principal place of business at 9801
      Westheimer, Suite 1070, Houston, Texas 77042, hereby grants, bargains, sells,
      transfers, conveys and assigns to TEKOIL AND GAS GULF COAST, LLC, a Delaware
      limited liability company, having its principal place of business at 25050
      I-45
      North, Suite 528, The Woodlands, Texas 77380, all of the interest of Assignor
      in
      and to the following (collectively, the “Assets”):

    


    
      	 	
              1.1.

            	
              The
                oil, gas and mineral leases and other real property described on
                Exhibit A
                attached to and made a part of this Assignment (the
                “Property”);

            


    

    


    
      	 	
              1.2.

            	
              All
                oil and gas wells, salt water disposal wells, injection wells and
                other
                wells and pits located on or attributable to the Property (collectively
                the “Wells”), including, without limitation, the Wells described on
                Exhibit B attached to and made a part of this
                Assignment;

            


    

    


    
      	 	
              1.3.

            	
              All
                equipment, including without limitation the workover rig, vehicles,
                crew
                boats, work barges and vessels listed on Exhibit C attached to and
                made a
                part of this Assignment, and all machinery, flowlines, roads, gathering
                lines, pipelines, pole lines, appurtenances, materials, fixtures,
                improvements and other personal property located on, used in the
                operation
                of or relating to the production, treatment, sale or disposal of
                hydrocarbons, water or associated substances produced from or attributable
                to the Property (collectively the “Personal
                Property”);

            


    

    


    
      	 	
              1.4.

            	
              All
                hydrocarbons, including natural gas, casing head gas, drip gasoline,
                natural gasoline, natural gas liquids, condensate products and crude
                oil,
                whether gaseous or liquid, produced from or attributable to the Property
                or Wells on or after the Effective Time, as defined below (collectively
                the “Hydrocarbons”);

            


    

    


    
      	 	
              1.5.

            	
              To
                the extent transferable at no cost or expense to Assignor, copies
                (or
                originals if Assignor does not wish to retain the originals of such
                records) of all of Assignor’s geological, geophysical or seismic prospect
                maps, electric logs, survey maps,
                geological profiles, geophysical data (including, without limitation,
                field tapes and all processed versions,
                synthetics, and all other forms of expression of geophysical data),
                and
                geological
                and geophysical interpretative data, to the extent that the foregoing
                relate
                to
                the Property, or any portion
                thereof;

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	
              1.6.

            	
              All
                contracts, instruments and orders relating to the Property, Wells,
                Personal Property and Hydrocarbons (collectively the “Contracts”),
                including without limitation the Contracts described on Exhibit D
                attached
                to and made a part of this Assignment;
                and

            


    

    


    
      	 	
              1.7.

            	
              All
                files, records, information and materials relating to the Property,
                Wells,
                Personal Property, Hydrocarbons and Contracts owned by or in the
                possession of Assignor which Assignor is not prohibited from transferring
                to Assignee by law or existing contractual relationship (collectively
                the
                “Records”).

            


    

    


    Any
      provision to the contrary contained in this Assignment notwithstanding, Assignor
      excepts and reserves and there shall be excluded from this Assignment the
      following (collectively, the “Excluded Assets”):

    


    
      	 	
              2.1.

            	
              The
                oil and gas properties more particularly described on the attached
                Exhibit
                E which is attached to and made a part of this
                Assignment;

            


    

     

    
      	 	
              2.2.

            	
              All
                of Assignor’s reserve estimates, economic analyses, pricing forecasts,
                legal opinions (other than those related to title to any of the
                Properties) and other analyses relating to the Assets and all information
                relating to the Assets which Assignor considers confidential or protected
                by attorney-client privilege;

            


    

     

    
      	 	
              2.3.

            	
              All
                rights and claims relating to the Assets, other than rights or claims
                in
                connection with gas imbalances, arising, occurring or existing in
                favor of
                Assignor prior to the Effective Time, including all contract rights,
                claims, penalties, receivables, revenues, recoupment rights, recovery
                rights, accounting adjustments, mispayments, erroneous payments,
                property
                damage claims, insurance claims, indemnity claims, bond claims and
                condemnation claims;

            


    

     

    
      	 	
              2.4.

            	
              All
                corporate, financial and tax records of Assignor; provided, however,
                that
                upon request, Assignee will be entitled to receive copies of all
                financial
                and tax records which directly relate to the Assets and which are
                necessary for Assignee’s ownership, administration or operation of the
                Assets;

            


    

     

    
      	 	
              2.5.

            	
              All
                claims of Assignor for refund of or loss carry forwards with respect
                to
                production, windfall profit, severance, ad valorem, income, franchise
                and
                all other taxes attributable to the Assets for all periods prior
                to the
                Effective Time;

            


    

     

    
      	 	
              2.6.

            	
              All
                amounts due or payable to Assignor as adjustments or refunds under
                any
                contract affecting the Assets for all periods prior to the Effective
                Time;

            


    

     

    
      	 	
              2.7.

            	
              All
                amounts due or payable to Assignor as adjustments to insurance premiums
                related to the Assets for all periods prior to the Effective
                Time;

            


    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

       

    

    
      	 	
              2.8.

            	
              All
                monies, proceeds, accruals, benefits, receipts, credits, income,
                revenues,
                security or deposits attributable to the Assets prior to the Effective
                Time;

            


    

     

    
      	 	
              2.9.

            	
              All
                of Assignor’s patents, trade secrets, copyrights, names, marks and
                logos;

            


    

     

    
      	 	
              2.10.

            	
              All
                computers, hardware, software and software
                licenses;

            


    

     

    
      	 	
              2.11.

            	
              All
                licensed raw or processed geophysical data and all interpretations
                of that
                data which Assignor is prohibited from transferring to Assignee by
                law or
                existing contractual relationship;

            


    

     

    
      	 	
              2.12.

            	
              The
                overriding royalties conveyed by Assignor to Masters Pipeline, L.L.C.,
                by
                Assignment of Overriding Royalty Interests of even date herewith
                recorded
                or to be recorded in Chambers and Galveston Counties, Texas, and
                all
                overriding royalties held by individuals associated with Assignor
                as of
                the Effective Time; and

            


    

     

    
      	 	
              2.13.

            	
              All
                personal property owned by Masters Offshore, L.L.C., and its surface
                facilities located in the vicinity of the Assets as depicted on the
                attached Exhibit F which is attached to and made a part of this
                Assignment.

            


    

     

    This
      Assignment from Assignor to Assignee is delivered by Assignor and accepted
      by
      Assignee subject to the following (“Existing Burdens”):

    


    
      	 	
              3.1.

            	
              Lessor’s
                royalties, non-participating royalties, overriding royalties, division
                orders and
                sales contracts containing customary terms and provisions covering
                oil,
                gas or other
                associated liquefied or gaseous hydrocarbons, reversionary interests
                and
                similar burdens;

            


    

    


    
      	 	
              3.2.

            	
              Preferential
                rights to purchase with respect to which prior to the date of this
                Assignment, waivers have been obtained from the appropriate parties
                or the
                appropriate time period for asserting those rights have expired without
                an
                exercise of those rights;

            


    

    


    
      	 	
              3.3.

            	
              Third
                party consents to assignment to the extent only that such consents
                are
                customarily obtained after Closing, including rights to consent by,
                required notices to,
                filings with or other actions
                required by governmental
                entities in connection with
                this Assignment;

            


    

    


    
      	 	
              3.4.

            	
              Liens
                for taxes or assessments not yet due or delinquent, or if delinquent,
                that
                are being contested in good faith in the normal course of business
                and for
                which
                an
                appropriate reserve has been established by Assignor and transferred
                to
                Assignee;

            


    

    


    
      	 	
              3.5.

            	
              Conventional
                rights of reassignment requiring notice to the holders of those
                rights;

            


    

    


    
      	 	
              3.6.

            	
              Easements,
                road-use agreements, rights-of-way, servitudes, permits, surface
                leases
                and other rights with respect to surface operations as long as the
                rights
                do not have a Material Adverse Effect on the Assets and do not otherwise
                impair the ownership, operation, use or value of the Assets on or
                after
                the Effective Time;

            


    

    


    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

       

    

    
      	 	
              3.7.

            	
              Zoning,
                planning and environmental laws and regulations to the extent that
                they
                are valid
                and applicable to the Assets and do not have a Material Adverse Effect
                on
                the Assets;

            


    

    


    
      	 	
              3.8.

            	
              Vendors’,
                carriers’, warehousemen’s, repairmen’s, mechanics’, workmen’s,
                materialmen’s, construction and other liens arising by operation of law in
                the ordinary
                course
                of business
                or incident to the construction or improvement of any property whose
                underlying obligations are not yet
                due;

            


    

    


    
      	 	
              3.9.

            	
              Defects,
                irregularities and deficiencies in title which in the aggregate do
                not
                have a Material Adverse Effect on the Assets and do not otherwise
                impair
                the ownership, operation, use or value
                of the Assets on or after the
                Effective Time;

            


    

    


    
      	 	
              3.10.

            	
              Farmouts,
                areas of mutual interest, participation agreements and other exploration
                agreements relating to the Assets;

            


    

    


    
      	 	
              3.11.

            	
              The
                overriding royalties conveyed by Assignor to Masters Pipeline, L.L.C.,
                by
                Assignment of Overriding Royalty Interests of even date herewith
                recorded
                or to be recorded in Chambers and Galveston Counties, Texas, and
                all
                overriding royalties held by individuals associated with Assignor
                as of
                the Effective Time.

            


    

    


    TO
      HAVE
      AND TO HOLD, all and singular, the Assets unto Assignee and Assignee’s
      successors in title and assigns forever. Assignor agrees to warrant and forever
      defend title to the Assets unto Assignee, its successors and assigns, against
      the claims and demands of all persons claiming, or to claim the same, or any
      part thereof by, thorugh or under Assignor, but not otherwise. The reference
      herein to the Existing Burdens is for the purposes of protecting Assignor on
      Assignor’s warranties, and shall not create, nor constitute a recognition of,
      any rights in third parties. This Assignment, in respect of the Personal
      Property, Hydrocarbons, Contracts and Records, is made without further warranty
      or covenants, express or implied, and, in respect of the Personal Property,
      the
IMPLIED
      WARRANTY OF MERCHANTABILITY AND THE IMPLIED WARRANTY OF FITNESS FOR A PARTICULAR
      PURPOSE ARE HEREBY EXPRESSLY NEGATED.
      This
      Assignment is made with full substitution and subrogation of Assignee in and
      to
      all covenants, indemnities, representations and warranties by others heretofore
      given or made with respect to the Assets or any part thereof.

    


    The
      term
“oil, gas and mineral lease” as used in this Assignment and in Exhibit A hereto
      includes in addition to oil, gas and mineral leases, oil and gas leases, oil,
      gas and sulphur leases, other mineral leases, co-lessor’s agreements, lease
      ratifications and extensions and subleases of any of the foregoing, as
      appropriate. The term “Material
      Adverse Effect” as used in this Assignment means any fact, condition or
      circumstance having a value of greater than $100,000.

    


    Assignor
      agrees to execute, to acknowledge and to deliver to Assignee any additional
      instruments, notices, division orders, transfer orders and other documents
      and
      to do any other acts and things which may be necessary to more fully and
      effectively assign and convey to Assignee and Assignee’s
      successors in title and assigns the Properties intended to be assigned
      hereby.

    


    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

       

    

    This
      Assignment is further subject to the following provisions:

    


    
      	 	
              4.1.

            	
              No
                Warranties or Representations.
                Assignor makes no warranty or representation of any kind as to the
                accuracy or completeness of any data, information or material furnished
                to
                Assignee in connection with the Assets, the quality or quantity of
                Hydrocarbon reserves attributable to the Assets or the ability of
                the
                Assets to produce Hydrocarbons. Assignee has inspected the Assets
                and is
                satisfied with their physical and environmental condition, both surface
                and subsurface. Assignee accepts the Assets in an “As Is, Where Is”
                condition.

            


    

     

    
      	 	
              4.2.

            	
              Assumption
                of Duties and Obligations.
                As of the Effective Time, Assignee will assume all duties and obligations
                of Assignor with respect to the Assets, including any request or
                order to
                plug, re-plug or abandon any Well, remove any Well or appurtenance,
                or
                take any clean-up or remediation action with respect to the
                Assets.

            


    

     

    
      	 	
              4.3.

            	
              Indemnity.
                Assignee will indemnify Assignor and hold Assignor harmless for all
                expenses, settlements, judgments, court costs, interest and attorney’s
                fees incurred as a result of any litigation or threat of litigation
                relating to this Assignment, the Assets or any prior or future operations
                on, of or with respect to the
                Assets.

            


    

     

    
      	 	
              4.4.

            	
              Taxes/Fees.
                Assignee will pay all transactional taxes, including sales, use,
                lease and
                ad valorem taxes, and all recording fees due as a result of this
                Assignment.

            


    

     

    
      	 	
              4.5.

            	
              Other
                Agreements.
                This Assignment is made subject to the Purchase and Sale Agreement,
                between Assignor and Assignee, dated November 13,
                2006.

            


    

     

    
      	 	
              4.6.

            	
              Effect
                of Assignment and Bill of Sale.
                This Assignment shall be binding upon Assignor and Assignee as well
                as
                their respective successors and
                assigns.

            


    

    


    [REMAINDER
      OF PAGE INTENTIONALLY BLANK. SIGNATURES ARE ON NEXT PAGE.]

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    Signed:
      May 11, 2007, TO BE EFFECTIVE, HOWEVER, AS OF October 1, 2006, at 12:00 midnight
      Central Standard Time (the “Effective Time”).

     

    
      	 	 	 	 
	ASSIGNOR:	
              ASSIGNEE:

            
	 	 	 
	
              MASTERS
                RESOURCES, L.L.C. and 

              MASTERS
                OIL & GAS, L.L.C.

            	
              TEKOIL
                AND GAS GULF COAST, LLC

            
	 	 	 
	 	 
 	By:
	Tekoil
&
Gas
              Corporation, Its Managing Member
	 	 	 	 
	By:  	/s/ John W. Barton 	By:  	/s/
              Mark Western
              
	 	
              

              John
                W. Barton, Managing Member

            	 	
              

              Mark
                Western, CEO and Chairman of the Board of
                Directors

            


    

     

    EXHIBITS:

    

      
        	
                Exhibit
                  A

              	
                Property

              
	
                Exhibit
                  B

              	
                Wells

              
	
                Exhibit
                  C

              	
                Personal
                  Property

              
	
                Exhibit
                  D

              	
                Contracts

              
	
                Exhibit
                  E

              	
                Excluded
                  oil and gas properties

              
	
                Exhibit
                  F

              	
                Excluded
                  personal property and surface facilities in vicinity of Assets
                  owned by
                  Masters Offshore, L.L.C.

              


      

    

     

    Signature
      Page to Assignment and Bill of Sale

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    
      	STATE OF TEXAS	§
	 	§
	COUNTY OF HARRIS	§


    

     

    This
      instrument was acknowledged before me this 11th
      day of
      May, 2007, by John W. Barton, Managing Member of each of Masters Resources,
      L.L.C. and Masters Oil & Gas, L.L.C., each a Texas limited liability
      company, on behalf of each of said limited liability companies.

     

    
      	 	 	 
	RHONDEE M. DAMON	
            	/s/ Rhondee
              M. Damon
	
              Notary Public, State of
                Texas

              
                My
                  Commission Expires

                April
                  26, 2009

              

            	
              
Notary
              Public in and for the State of
              Texas


    

     

    
      	STATE OF TEXAS	§
	 	§
	COUNTY OF HARRIS	§


    

     

    This
      instrument was acknowledged before me this 11th
      day of
      May, 2007, by Mark Western, CEO and Chairman of the Board of Directors of Tekoil
      & Gas Corporation, the Managing Member of Tekoil and & Gas Gulf Coast,
      LLC, a Delaware limited liability company, on behalf of said limited liability
      company.

    


    
      	 	 	 
	RHONDEE M. DAMON	
            	/s/ Rhondee
              M. Damon
	
              Notary Public, State of
                Texas

              
                My
                  Commission Expires

                April
                  26, 2009

              

            	
              
Notary
              Public in and for the State of
              Texas


    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    
      


       

      


      
        

      


      


      
        

      


      


      
        

      


      


      
        

      


      


      
        

      


      


      
        

      


      


      
        

      


      


      
        

      


      


      
        

      


      


      
        

      


      


      
        

      


      


      
        

      


      


      
        

      


      


      
        

      


      


      
        

      


      


      
        

      


      


      
        

      


      


      
        

      


      


      
        

      


      


      
        

      


      


      
        

      


      


      
        

      


      


      
        

      


      


      
        

      


      


      
        

      


      


      
        

      


      


      
        

      


      


      
        

      


      


      
        

      


      


      
        

      


      


      
        

      


      


      
        

      


      


      
        

      


      


      
        

      


      


      
        

      


      


      
        

      


      


      
        

      


      


      
        

      


      


      
        

      


      


      
        

      


      


      
        

      


      


      
        

      


      


      
        

      


      


      
        

      


      


      
        

      


      


      
        

      


      


      
        

      


      


      
        

      


      


      
        

      


      


      
        

      


      


      
        

      


      


      
        

      


      


      
        

      

    

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Exhibit
      C

    Personal
      Property


    


    PERSONAL
      PROPERTY

    (OWNED)

    


    
      	
              Equipment/Vessel

            	 	
              ID
                No.

            	 	
              Location

            	 	
              Year
                Built

            	 	
              Length

            	 	
              Depth

            	 	
              Width

            
	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Masters
                Rig #1

              (Slotted
                Key Way Barge

            	 	
              No
                Hull #

            	 	 	 	
              2005

            	 	
              200’

            	 	
              3’

            	 	
              53’

            
	
              Generator

            	 	
              Inline
                6 Cyl Detroit 200 HP

            	 	 	 	 	 	 	 	 	 	 
	
              Generator

            	 	
              Kubota
                2 Cyl 20 HP

            	 	 	 	 	 	 	 	 	 	 
	
              Rig

            	 	
              12V
                71 Detroit 450 HP

            	 	 	 	 	 	 	 	 	 	 
	
              Pump

            	 	
              8V
                71 Detroit 300 HP

            	 	 	 	 	 	 	 	 	 	 
	
              Mixing
                Pump

            	 	
              Inline
                4 Cyl CAT 100 HP

            	 	 	 	 	 	 	 	 	 	 
	
              Blending
                Pump

            	 	
              Inline
                4 CYl Deutz 50 HP

            	 	 	 	 	 	 	 	 	 	 
	
              Manitowoc
                (30 ton) Crane

            	 	
              Inline
                4 Cycl Detroit 150 HP

            	 	 	 	 	 	 	 	 	 	 
	
              Miss
                Tracy

            	 	
              LAFCO1224

            	 	
              Oak
                Island

            	 	
              1974

            	 	
              29’

            	 	
              3”

            	 	
              10”

            
	
              Miss
                Susie

            	 	
              JBC19893G495

            	 	 	 	
              1994

            	 	
              18’

            	 	
              1”

            	 	
              6”

            
	
              Miss
                Rhea

            	 	
              1138953

            	 	
              Oak
                Island

            	 	
              1972

            	 	
              39’

            	 	
              6.5”

            	 	
              14”

            
	
              Airboat

            	 	
              MPH00196B494

            	 	
              Oak
                Island

            	 	
              1994

            	 	
              15’

            	 	
              0

            	 	
              8”

            
	
              Kabota
                Tractor 8200

            	 	 	 	
              Pt.
                Barrow

            	 	 	 	 	 	 	 	 
	
              Kabota
                Tractor B21

            	 	 	 	
              Goat
                Island

            	 	 	 	 	 	 	 	 
	
              Welding
                Machines (2)

            	 	 	 	
              Oak
                Island

            	 	 	 	 	 	 	 	 
	
              Air
                Compressors (2)

            	 	 	 	
              Oak
                Island

            	 	 	 	 	 	 	 	 
	
              1998
                Chevrolet S-10 Pickup Truck

            	 	
              1GCCS14XXW8213584

            	 	
              Pt.

              Barrow

            	 	 	 	 	 	 	 	 
	
              2006
                Ford F150 Pickup Truck

            	 	
              1FTPW145X6KB15212

            	 	
              Pt.

              Barrow

            	 	 	 	 	 	 	 	 
	
              2006
                Ford F350 Pickup Truck

            	 	
              1FTWW31P96ED61003

            	 	
              Pt.

              Barrow

            	 	 	 	 	 	 	 	 
	
              Cat
                398 - 

              Engine
                G398 A-51

              Compressor
                Chicago Pneumatiac Size 6FE Frame

            	 	
               

              73B1282P

              82210PPNt1000

            	 	
              A-Lease

            	 	 	 	 	 	 	 	 


    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

      Exhibit
        C

      Personal
        Property

    

    


    PERSONAL
      PROPERTY

    (LEASED)


    


    
      	
              Equipment/Vessel

            	 	
              Location.

            	 	
              Lessor/Term

            	 	
              Year
                Built

            	 	
              Length

            	 	
              Depth

            	 	
              Width

            
	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Taylor
                Forklift

            	 	
              Oak
                Island

            	 	
              Paul’s
                Rentals

              (monthly)

            	 	 	 	 	 	 	 	 
	
              Cat.
                Forklift

            	 	
              Oak
                Island

            	 	
              Paul’s
                Rentals

              (monthly)

            	 	 	 	 	 	 	 	 
	
              Roanoke
                Forklift

            	 	
              Pt.
                Barrow

            	 	
              Paul’s
                Rentals

              (monthly)

            	 	 	 	 	 	 	 	 
	
              Carry
                Deck Crane

            	 	
              Pt.
                Barrow

            	 	
              Paul’s
                Rentals

              (Monthly)

            	 	 	 	 	 	 	 	 
	
              Mahindra
                Tractor

            	 	
              Pt.
                Barrow

            	 	
              Paul’s
                Rentals

              (Monthly)

            	 	 	 	 	 	 	 	 
	
              Case
                Tractor

            	 	
              Pt.
                Barrow

            	 	
              Paul’s
                Rentals

              (Monthly)

            	 	 	 	 	 	 	 	 
	
              Masters
                Meteor (Crew Boat)

            	 	
              Oak
                Island

            	 	
              Marine
                Transportation

              (Monthly)

            	 	
              2004

            	 	
              27’

            	 	
              48”
                

            	 	
              10”

            
	
              M/V
                Carp (Crew Boat)

            	 	
              Oak
                Island

            	 	
              Marine
                Transportation

              (Monthly)

            	 	
              1984

            	 	
              29’

            	 	
              48”

            	 	
              10”

            
	
              Audrey
                (Crew Boat)

            	 	
              Oak
                Island

            	 	
              Marine
                Transportation

              (Monthly)

            	 	
              1971

            	 	
              28’

            	 	
              2’

            	 	
              10’4”

            
	
              Who
                Dat

            	 	
              Oak

              Island

            	 	
              Marine

              Transportation

              (Monthly)

            	 	
              1970

            	 	
              28’

            	 	
              10.8’

            	 	
              3’

            
	
              Houma
                II

            	 	
              Oak

              Island

            	 	
              CWR
                Rental

              (Monthly)

            	 	
              1995

            	 	
              32’

            	 	
              10.3’

            	 	
              .5’

            
	
              Tiger
                II (Tug Boat)

            	 	
              Oak
                Island

            	 	
              Marine
                Towing & Salvage

              (Monthly)

            	 	 	 	 	 	 	 	 
	
              Barge
                #1

            	 	
              Oak
                Island

            	 	
              Marine
                Towing & Salvage

              (Monthly)

            	 	 	 	 	 	 	 	 
	
              American
                Crane

            	 	
              Oak
                Island

            	 	
              Marine
                Towing & Salvage

              (Monthly)

            	 	 	 	 	 	 	 	 
	
              F-250
                (Land Gauger)

            	 	
              Pt.
                Barrow

            	 	
              Enterprise

              (Monthly)

            	 	 	 	 	 	 	 	 
	
              Cat
                3516 Compressor

            	 	
              F-Lease

            	 	
              Universal

              (Monthly)

            	 	 	 	 	 	 	 	 
	
              Waukashau
                3521

            	 	
              C-Lease

            	 	
              Hanover

              (Monthly)

            	 	 	 	 	 	 	 	 
	
              Waukashau
                7042

            	 	
              Aggie
                Junction

            	 	
              JW
                Operating

              (Monthly)

            	 	 	 	 	 	 	 	 
	
              Cat
                3516

            	 	
              Aggie
                Junction

            	 	
              JW
                Operating

              (Monthly)

            	 	 	 	 	 	 	 	 
	
              Waukashau
                F18

            	 	
              Goat
                Island

            	 	
              Hanover

              (Monthly)

            	 	 	 	 	 	 	 	 
	
              Cat
                Compressor

            	 	
              Monroe
                City

            	 	
              Delta
                Compression

              (Monthly)

            	 	 	 	 	 	 	 	 
	
              30’
                Gooseneck

            	 	 	 	
              Monthly

            	 	 	 	 	 	 	 	 
	
              6
                HP 33 Gallon Electric Air Compressor

            	 	 	 	
              Monthly

            	 	 	 	 	 	 	 	 
	
              50
                KW Generator Greenpower Canopy

            	 	 	 	
              Monthly

            	 	 	 	 	 	 	 	 
	
              16’
                Trailer

            	 	 	 	
              Paul’s
                Rentals

              (Monthly)

            	 	 	 	 	 	 	 	 
	
              21’
                Trailer

            	 	 	 	
              Paul’s
                Rentals

              (Monthly)

            	 	 	 	 	 	 	 	 
	
              Bushhog
                10’

            	 	 	 	
              Monthly

            	 	 	 	 	 	 	 	 
	
              Case
                backhoe-580 SuperL

            	 	 	 	
              Paul’s
                Rentals

              (Monthly)

            	 	 	 	 	 	 	 	 
	
              1979
                Galion 15 ton crane

            	 	 	 	
              Monthly

            	 	 	 	 	 	 	 	 
	
              5000
                lb warehouse forklift

            	 	 	 	
              Paul’s
                Rentals

              (Monthly)

            	 	 	 	 	 	 	 	 
	
              3”
                Pump

            	 	 	 	
              Paul’s
                Rentals

              (Monthly)

            	 	 	 	 	 	 	 	 
	
              2.5
                Power Swivel

            	 	 	 	
              Monthly

            	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 


    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Exhibit
      D

    Contracts

     

    
      
        	
                N
                  Point Bolivar

              	 	 
	 	 	 
	
                LC-103-0005

              	 	
                Exploration
                  Agrmt & JOA dtd 2/1/06 btwn Masters Resources LLC & Erskine Energy
                  LLC

              
	 	 	 
	
                LC-103-0014

              	 	
                Barge
                  Dock & Surface Use Agrmt dtd eff 9/22/06 btwn Masters Resources LLC,
                  St. Mary Land & Expl Co. & Erskine Energy Partners II LP LLC
                  covering barge dock facility at Goat Island, ST 342 (Expires
                  9/22/2011)

              
	 	 	 
	
                GC-103-0008

              	 	
                Production
                  Handling Agrmt dtd October 11, 2006 btwn St. Mary Land & Expl Co &
                  Masters Resources LLC (ST 342)

              
	 	 	 
	
                Dorado

              	 	 
	 	 	 
	
                LC-110-0001

              	 	
                E/A
                  & JOA dtd 4/21/05 btwn Davis Petroleum Corp. & Masters Resources
                  LLC covering ST 113/132/133/203

              
	 	 	 
	
                LC-110-0004

              	 	
                JOA
                  dtd 6/1/06 btwn Davis Petroleum Corp & Masters Resources LLC covering
                  ST 204 Unit

              
	 	 	 
	
                Fishers
                  Reef

              	 	 
	 	 	 
	
                LC-101-0016

              	 	
                Exploration
                  Agreement & JOA dtd 1/31/05 btwn Masters Resources LLC & Erskine
                  Energy Partners LP & Erskine Energy LLC covering State Tract 2-3A Unit
                  (M-96828 & M-96829)

              
	 	 	 
	
                LC-101-0023

              	 	
                Exploration
                  Agreement dtd 2/23/05 btwn Masters Resources LLC & Erskine Energy
                  Partners, LP & Erskine Energy LLC Covering State Tract
                  6-7A

              
	 	 	 
	
                LC-101-0024

              	 	
                Exploration
                  Agreement & O/A dtd 2/27/06 btwn Masters Resources LLC & Masters
                  Oil & Gas LLC & Erskine Energy Partners LP, Erskine Energy LLC
                  covering State Tract 5-8A

              
	 	 	
                Letter
                  Agreement dtd 6/20/05 btwn Masters Resources LLC & Palace Exploration
                  Co. etal

              
	 	 	
                Letter
                  Agreement dtd 7/11/05 btwn Masters Resources LLC, Erskine Energy
                  Partners
                  etal & Palace Exploration Co.

              
	 	 	 
	
                GC-101-0003

              	 	
                Gas
                  Transportation Contract dated 5/22/06 between Masters Resources
                  LLC and
                  Erskine Energy Partners II LP (ST 5-8A #1, #2, ST 6-7A #1
                  wells)

              
	 	 	 
	
                GC-101-0004

              	 	
                Crude
                  Oil Gathering Contract dated 5/22/06 between Masters Resources
                  LLC and
                  Erskine Energy Partners II LP

              
	 	 	
                (ST
                  5-8A #1, #2, ST 6-7A #1 wells)

              


      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        Exhibit
          D

        Contracts

         

      

      
        	
                Red
                  Fish Reef

              	 	 
	 	 	 
	
                LC-102-0002

              	 	
                Term
                  Acreage Agreement dtd 4/19/01 btwn Masters Resources LLC &
                  Alcorn-Texana Resources et. al.

              
	
              	 	 


      

    

     

    Joint
      Operating Agreement dated May 1, 2006 by and between Davis Petroleum Corp.
      (‘Operator’) and Masters Resources, LLC, et. al. covering the Dolphin Prospect,
      being 800 acres in State Tracts 199 and 226 and the associated Area of Mutual
      Interest.

    


    Subject
      to one or more Amendments to Lease of varying dates providing for the addition
      to the lease of rework and/or shut-in gas well clauses.

    


    Subject
      to Pooling Agreement dated 10/6/98 covering 320 acres of State Tract 2-3A -
      3A
      (State Tract 2-3A Unit #1) recorded under File No. 98 395 730, Chambers Co.,
      TX

    


    Subject
      to Pooling Agreement dated 9/15/98 covering 320 acres being 110 acres of State
      Tract 2-3A -3A, 75 acres of State Tract 46 and 135 acres of State Tract 47
      (State Tract 46 No. 1) recorded under File No. 00 453 686.

    


    Subject
      to Pooling Agreement dated 12/11/01 covering 320 acres being 76 acres out of
      State Tract 1-4A, 152 acres out of State Tract 5-8A, 80 acres out of State
      Tract
      2-3A, 90 acres out of State Tract 2-3A, 40 acres out of State Tract 6-7A (State
      Tract 1-4A Unit).

    


    Subject
      to Participation and Farmout Agreement dated 3/6/00 between Vintage Petroleum
      Inc. and Davis Petroleum Corp.

    


    Subject
      to JOA dated 6/20/00 between Vintage Petroleum Inc., Palace Exploration Co.,
      Davis Petroleum Corp., Andex Resources LLC covering land within Pooled Unit
      for
      State Tract 1-4A No. 1 well (State Tract 1-4A No. 1 well).

    


    Subject
      to JOA dated 3/6/00 between Vintage Petroleum Inc., Palace Exploration Co.,
      Davis Petroleum Corp., and Andex Resources LLC covering lands within the Pooled
      Unit for State Tract 46 No. 1 (State Tract 46 No. 1 well).

    


    Subject
      to JOA dated 9/1/00 between Vintage Petroleum Inc., Davis Petroleum Corp.,
      Andex
      Resources LLC covering 250 acres within that portion of State Tract 9-12B,
      limited from the surface of the ground down to the stratigraphic equivalent
      of
      the total depth drilled in the Initial Test, except the Unitized formations
      established by Unit Agreement for the Fishers Reef Field Unit No. 1 but
      including any wellbore interest earned therein, as more specifically identified
      and defined in those certain Participation Farmout Agreements, as amended,
      between Vintage and each of the other parties (State Tract 9-12B #1
      well).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      
         

        Exhibit
          D

        Contracts

         

      

    

    Subject
      to call on oil and gas production in Assignment and Bill of Sale dated 5/1/91
      and recorded under File No. 91 146 152 from Exxon Corporation to Vintage
      Petroleum Inc. whereby Exxon Corporation reserves a preferential right to
      purchase oil and gas for a term of 21 years from assignment date.

    


    Possibly
      subject to two final judgments which are as follows: 1) Final Judgment dated
      7/24/74 in the case of State of Texas et al, Plaintiff vs. Exxon Corporation,
      Defendant in the District Court of Travis County, Texas, the 53rd
      Judicial
      District, Case No. 207789 and 2) Final Judgment dated 2/23/76 in the case of
      the
      State of Texas et al, Plaintiff vs. Exxon Corporation and Sun Oil Company
      (Delaware), Defendants, in the District Court of Travis County, Texas,
      53rd
      Judicial
      District, Case No. 238904.

    


    CEDAR
      POINT/HEMATITE FIELD

    


    Subject
      to the certain Operating Agreement dated 2/15/99 by and between Vintage
      Petroleum Inc. and MCNIC O & G Properties, Inc., Carrizo O&G Inc.,
      Century Offshore Management Corp. and Yuma Exploration and Production Company,
      Inc.

    


    Subject
      to that certain Participation Agreement by and between Yuma Exploration and
      Production Company, Inc., Vintage Petroleum Inc., Carrizo Oil & Gas Inc. and
      MCNIC

    Oil
&
      Gas Properties, Inc. dated 4/6/98.

    


    POINT
      BARROW FACILITY

    


    Subject
      to Saltwater Disposal Agreement dated 10/01/01 between Vintage Petroleum Inc.
      and Masters Resources LLC whereby Vintage will accept Masters’ water produced
      from Masters’ wells located in the Trinity Bay Field, Chambers Co., TX for
      disposal in its Point Barrow saltwater disposal facility located on the Point
      Barrow Facility so long as excess capacity in the Facility exists over and
      above
      that required by Vintage’s operations. The term of this Agreement has expired,
      but both parties continue to perform.

    


    Subject
      to Surface Lease and Easement dated 12/19/02 between Vintage Petroleum Inc.,
      Lessor, and Masters Resources LLC., Lessee wherein Lessor grants to Lessee
      a
      non-exclusive easement on and overt the Point Barrow Facility to Lessee for
      the
      purpose of operating and maintaining and constructing pipelines, facilities,
      power line or roads to and from the leased premises. Lessee owns equipment
      currently located on the leased premises, including 1) TB #1 - 1500 BBL -
      Bottled Gun Barrel; 2) TB #2 - 500 BBL - Settling Tank; 3)TB #3 - 1000 BBL
      -
      Sales Tank; 4) TB Heater; 5) Associated Flow lines. 

    


    Subject
      to all easements, rights of way, surface leases and all similar grants of
      surface use affecting this land whether recorded or unrecorded in addition
      to
      those specifically described in Deed and Bill of Sale dated 5/31/91 between
      Exxon Corporation, Grantor and Vintage Petroleum Inc., Grantee recorded under
      File No. 91 146 205, Chambers Co., TX.

    


    Subject
      to reservation of a 1/16th
      of
      8/8ths Non-participating Royalty Interest in favor of Estelle Ervine and J.
      E.
      Bishop, Individually and as Independent Executors of the Estate of J. E. Ervine,
      and their predecessors in interest.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      
         

        Exhibit
          D

        Contracts

         

      

    

    GAS
      CONTRACTS

    


    Crude
      Oil
      Purchase Contract Nos. 05-10247, 05-10248 and 06-55239 dated 08/08/05, 08/09/05
      and 12/29/06 by and between Masters Resources LLC, as Seller, and Pacific
      Marketing and Transportation LLC, as Buyer and as assigned to Plains Marketing
      LP due to merger on 11/15/06.

    


    Base
      Contract for Sale and Purchase of Natural Gas, as amended, dated 02/27/07 by
      and
      between Masters Resources, LLC, Seller and Petrocom Ventures Ltd., as
      Buyer.

    


    Gas
      Purchase Agreement, as amended, dated 03/01/07 by and between Masters Resources
      LLC, as Seller, and Kinder Morgan Tejas Pipeline L.P., as Buyer.

    


    Gas
      Gathering Agreement dated 07/01/98, as amended, between Masters Resources LLC
      and Gateway Offshore Pipeline Company for Galveston Bay State Tract 343
      Lease.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Exhibit
      E

    Excluded
      Oil & Gas Properties

     

    EXCLUDED
      ASSETS

    


    Masters
      Offshore LLC Properties

     

    All
      of
      the assets owned by Masters Offshore LLC, including but not limited to, a
      construction office facility located at Oak Island, Texas, including various
      tug
      boats, barges, vessels, construction equipment not expressly conveyed in the
      Purchase and Sale Agreement.

    


    Louisiana-Mississippi

     

    All
      acreage and wells owned by Masters Resources LLC and/or Masters Oil & Gas
      LLC located in Louisiana and Mississippi, including but not limited to the
      Bayou
      Sorrell-Green Jacket Prospect in Iberville Parish and the South Lake Charles
      Prospect in Calcasieu Parish, Louisiana.

    


    Trout
      Point Prospect-Chambers County, Texas

     

    All
      acreage and wells in the Trout Point Prospect being approximately 600 acres
      in
      the Edward T. Branch Survey, A-40 and 660 acres in Galveston Bay being the
      N/2
      of State Tract 198 all in Chambers County, Texas.

    


    Lions
      Field Prospect

     

    All
      acreage and wells located in the Lions Field Prospect being approximately 1590
      acres located in the J.M. Mancha Survey in Goliad County, Texas.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Exhibit
      F

    Excluded
      Personal Property

    

      EXCLUDED
        ASSETS OWNED BY MASTERS OFFSHORE LLC

    


    
      	
              Equipment/Vessel

            	 	
              ID
                No.

            	 	
              Location

            	 	
              Year
                Built

            	 	
              Length

            	 	
              Depth

            	 	
              Width

            
	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Miss
                Georgia

            	 	
              1115314

            	 	 	 	
              1976

            	 	
              32’

            	 	
              6”

            	 	
              12”

            
	
              Bad
                Dog

            	 	 	 	 	 	
              1952

            	 	
              43’

            	 	
              6.1”

            	 	
              12.3”

            
	
              Opportunity
                (Jackup)

            	 	 	 	 	 	
              1978

            	 	
              63’

            	 	
              4.8”

            	 	
              24.1”

            
	
              Welding
                Machines (7)

            	 	 	 	 	 	 	 	 	 	 	 	 
	
              Barge
                #2

            	 	
              Marine
                Towing & Salvage (Monthly)

            	 	
              Oak
                Island