----

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**BINGER      PURCHASE, SALE AND CONTRIBUTION AGREEMENT**

**BY      AND BETWEEN**

**NIELSON      & ASSOCIATES, INC.**

**AS      SELLER**

**AND**

**LEGACY      RESERVES OPERATING LP**

**AS      BUYER**

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| 1.  | SALE                                          AND PURCHASE OF THE ASSETS.                                                                   | 1  |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------|----|
| 1.1 | Acquired                                          Assets                                                                                    | 1  |
| 1.2 | Assumed                                          Liabilities                                                                                | 2  |
| 2.  | PURCHASE                                          PRICE.                                                                                    | 3  |
| 2.1 | Purchase                                          Price                                                                                     | 3  |
| 2.2 | Deposit.                                                                                                                                    | 3  |
| 2.3 | Adjustments                                          to the Base Purchase Price                                                             | 4  |
| 2.4 | Allocation                                                                                                                                  | 5  |
| 3.  | CLOSING.                                                                                                                                    | 5  |
| 3.1 | Closing                                                                                                                                     | 5  |
| 3.2 | Delivery                                          by Seller                                                                                 | 5  |
| 3.3 | Delivery                                          by Buyer                                                                                  | 6  |
| 3.4 | Further                                          Cooperation                                                                                | 6  |
| 4.  | ACCOUNTING                                          ADJUSTMENTS.                                                                            | 6  |
| 4.1 | Closing                                          Adjustments                                                                                | 6  |
| 4.2 | Strapping                                          and Gauging.                                                                             | 7  |
| 4.3 | Taxes                                                                                                                                       | 7  |
| 4.4 | Post-Closing                                          Adjustments                                                                           | 8  |
| 4.5 | Suspended                                          Funds                                                                                    | 8  |
| 4.6 | Audit                                          Adjustments                                                                                  | 8  |
| 4.7 | Cooperation                                                                                                                                 | 9  |
| 5.  | DUE                                          DILIGENCE: TITLE MATTERS.                                                                      | 9  |
| 5.1 | General                                          Access                                                                                     | 9  |
| 5.2 | Defensible                                          Title                                                                                   | 9  |
| 5.3 | Defect                                          Letters.                                                                                    | 11 |
| 5.4 | Effect                                          of Title Defect                                                                             | 12 |
| 5.5 | Possible                                          Upward Adjustment                                                                         | 14 |
| 5.6 | Preferential                                          Rights and Consents.                                                                  | 14 |
| 6.  | ENVIRONMENTAL                                          ASSESSMENT.                                                                          | 16 |
| 6.1 | Physical                                          Condition of the Assets                                                                   | 16 |
| 6.2 | Inspection                                          and Testing.                                                                            | 16 |
| 6.3 | Notice                                          of Adverse Environmental Conditions                                                         | 17 |
| 6.4 | Rights                                          and Remedies for Adverse Environmental                                          Conditions. | 18 |
| 6.5 | Remediation                                          by Seller                                                                              | 19 |
| 7.  | REPRESENTATIONS                                          AND WARRANTIES OF SELLER.                                                          | 20 |
| 7.1 | Seller’s                                          Representations and Warranties                                                      | 20 |
| 7.2 | Scope                                          of Representations of Seller.                                                                | 22 |
| 8.  | REPRESENTATIONS                                          AND WARRANTIES OF BUYER.                                                           | 23 |
| 8.1 | Buyer’s                                          Representations and Warranties                                                       | 23 |
| 9.  | CERTAIN                                          AGREEMENTS OF SELLER                                                                       | 24 |
| 9.1 | Maintenance                                          of Assets                                                                              | 24 |
| 9.2 | Records                                                                                                                                     | 25 |

----

| 9.3   | Audit                        Rights                                      | 25 |
|-------|--------------------------------------------------------------------------|----|
| 10.   | CERTAIN                        AGREEMENTS OF BUYER                       | 26 |
| 10.1  | Plugging                        Obligation                               | 26 |
| 10.2  | Plugging                        Bond                                     | 26 |
| 10.3  | Seller’s                        Logos                              | 26 |
| 10.4  | Like-Kind                        Exchanges                               | 26 |
| 11.   | CONDITIONS                        PRECEDENT TO OBLIGATIONS OF BUYER      | 27 |
| 11.1  | No                        Litigation                                     | 27 |
| 11.2  | Representations                        and Warranties                    | 27 |
| 12.   | CONDITIONS                        PRECEDENT TO THE OBLIGATIONS OF SELLER | 27 |
| 12.1  | No                        Litigation                                     | 27 |
| 12.2  | Representations                        and Warranties                    | 27 |
| 13.   | TERMINATION.                                                             | 27 |
| 13.1  | Causes                        of Termination                             | 27 |
| 13.2  | Effect                        of Termination.                            | 28 |
| 14.   | INDEMNIFICATION.                                                         | 29 |
| 14.1  | Indemnification                        by Seller                         | 29 |
| 14.2  | Indemnification                        by Buyer                          | 31 |
| 14.3  | Physical                        Inspection                               | 31 |
| 14.4  | Notification                                                             | 31 |
| 15.   | MISCELLANEOUS.                                                           | 32 |
| 15.1  | Casualty                        Loss.                                    | 32 |
| 15.2  | Confidentiality.                                                         | 32 |
| 15.3  | Notices                                                                  | 33 |
| 15.4  | Press                        Releases and Public Announcements           | 34 |
| 15.5  | Compliance                        with Express Negligence Test           | 34 |
| 15.6  | Governing                        Law                                     | 34 |
| 15.7  | Exhibits                                                                 | 34 |
| 15.8  | Fees,                        Expenses, Taxes and Recording.              | 35 |
| 15.9  | Assignment                                                               | 35 |
| 15.10 | Entire                        Agreement                                  | 35 |
| 15.11 | Severability                                                             | 35 |
| 15.12 | Captions                                                                 | 36 |
| 15.13 | Time                        of the Essence                               | 36 |
| 15.14 | Amendments.                                                              | 36 |
| 15.15 | Counterparts                                                             | 36 |

----

| 1.1(A) | Oil                      and Gas Leases and Land               |
|--------|----------------------------------------------------------------|
| 1.1(B) | Deeded                      Land                               |
| 1.1(C) | Vehicles                      and Other Personal Property      |
| 1.1(G) | Assignment                      of Membership Interests        |
| 2.1(A) | Registration                      Rights Agreement             |
| 2.4    | Allocation                                                     |
| 3.2(A) | Form                      of Assignment and Bill of Sale       |
| 3.2(G) | Form                      of Warranty Deed                     |
| 7.1(E) | AFE’s                                                    |
| 7.1(G) | Pending                      Litigation                        |
| 7.1(K) | Material                      Agreements                       |
| 7.1(L) | Consents                      and Preferential Purchase Rights |
| 7.1(M) | Gas                      Imbalances                            |

----

**INDEX      OF DEFINED TERMS**

| **DEFINED                          TERM**                  | **PAGE** | **SECTION** |
|------------------------------------------------------------|----------|-------------|
| Adverse                          Environmental Condition   | 16       | 6.3         |
| Agreement                                                  | 1        | Preamble    |
| Allocated                          Value                   | 4        | 2.4         |
| Allocated                          Values                  | 4        | 2.4         |
| Assets                                                     | 1        | 1.1         |
| Assumed                          Liabilities               | 2        | 1.2         |
| Base                          Purchase Price               | 3        | 2.1         |
| Buyer                                                      | 1        | Preamble    |
| Buyer                          Group                       | 27       | 14.1        |
| Buyer's                          Response                  | 10       | 5.3(C)(ii)  |
| Casualty                                                   | 30       | 15.1(A)     |
| Casualty                          Loss                     | 30       | 15.1(B)     |
| Closing                                                    | 4        | 3.1         |
| Closing                          Adjustment Statement      | 5        | 4.1         |
| Closing                          Date                      | 4        | 3.1         |
| Confidential                          Information          | 31       | 15.2(A)     |
| Deeded                          Land                       | 1        | 1.1(B)      |
| Deposit                                                    | 3        | 2.2(A)(iii) |
| Easements                                                  | 1        | 1.1(A)      |
| Effective                          Time                    | 3        | 2.3(A)(iii) |
| Environmental                          Consultant          | 18       | 6.4(F)      |
| Environmental                          Defect Threshold    | 16       | 6.3         |
| Environmental                          Defect Notice       | 16       | 6.3         |
| Environmental                          Defect Value        | 16       | 6.3         |
| Environmental                          Laws                | 16       | 6.2(C)      |
| Equipment                                                  | 1        | 1.1(B)      |
| Exclusion                          Adjustment              | 13       | 5.6(A)      |
| Indemnity                          Threshold               | 28       | 14.1(D)(iv) |
| Interest                          Addition                 | 12       | 5.5         |
| Land                                                       | 1        | 1.1(A)      |
| Leases                                                     | 1        | 1.1(A)      |
| Loss                                                       | 27       | 14.1(A)     |
| Losses                                                     | 27       | 14.1(A)     |
| Net                          Revenue Interest              | 8        | 5.2(A)(i)   |
| NORM                                                       | 15       | 6.1(B)      |
| Notice                                                     | 10       | 5.3(A)      |
| Oil                          and Gas                       | 2        | 1.1(D)      |
| Parties                                                    | 1        | Preamble    |
| Party                                                      | 1        | Preamble    |
| Permits                                                    | 1        | 1.1(A)      |
| Permitted                          Encumbrances            | 8        | 5.2(C)      |
| Post-Closing                          Adjustment Statement | 6        | 4.4(A)      |
| Property                          Taxes                    | 6        | 4.3(A)      |

----

| Purchase                      Price             | 3      | 2.3         |
|-------------------------------------------------|--------|-------------|
| Records                                         | 2      | 1.1(F)      |
| Remediate                                       | 17     | 6.4(E)      |
| Remediation                                     | 17     | 6.4(E)      |
| Rights-of-Way                                   |   | 1           |
| 1.1(A)                                          |   |        |
| Seller                                          | 1      | Preamble    |
| Seller’s                      Group       | 15     | 6.2(B)      |
| Seller’s                      Response    | 10     | 5.3(C)(i)   |
| Severance                      Taxes            | 6      | 4.3(C)      |
| Survival                      Period            | 28     | 14.1(D)(i)  |
| Title                      Consultant           | 10     | 5.3(C)(iii) |
| Title                      Defect               | 10     | 5.3(A)      |
| Title                      Defect Threshold     | 10     | 5.3(A)      |
| Title                      Defect Value         | 12     | 5.4(B)      |
| Value                      of Interest Addition | 13     | 5.5         |
| Wells                                           | 1      | 1.1(B)      |
| Working                      Interest           | 8      | 5.2(A)(ii)  |

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| A. | Seller                desires to sell to Buyer certain oil, gas and mineral properties                and other                assets on the terms and conditions set forth in this                Agreement. |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| B. | Buyer                desires to purchase from Seller such oil, gas and mineral properties                and                other assets on the terms and conditions set forth in this                Agreement. |
|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (A) | All                of Seller’s right, title, interest and obligations in, to and under the                oil and gas leases described in Exhibit 1.1(A) attached hereto (the                “Leases”), covering the land described in Exhibit 1.1(A) (the                “Land”), whether or not such interests or land are accurately or                completely described on Exhibit 1.1(A),  together with                all the property and rights incident thereto, including without limitation                Seller’s rights and obligations in, to and under all operating agreements;                pooling, communitization and unitization agreements; farmout agreements;                joint venture agreements; product purchase and sale contracts;                transportation, processing, treatment or gathering agreements; leases;                permits (the “Permits”); rights-of-way (the “Rights-of-Way”); surface use                agreements; surface leases; easements (the “Easements”); licenses;                options; declarations; orders; contracts; and instruments in any                way                relating to the Leases; |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (B) | All                  of Seller’s right, title and interest in and to the wells (“Wells”)                  situated on or used in conjunction with operations on the Leases                  and Land                  or on land pooled, communitized or unitized therewith (“Pooled Land”), and                  the real property described in Exhibit 1.1(B) (the “Deeded Land”),                  together with all of Seller’s interests in and to all of the personal                  property, fixtures, improvements and other property, whether real,                  personal or mixed, now or as of the Effective Time on, appurtenant                  to or                  used or obtained by Seller in connection with the Leases, Land,                  Pooled                  Land or Wells or with the production, injection, treatment, sale                  or                  disposal of hydrocarbons and all other substances produced                  therefrom |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (C) | All                of Seller’s right, title and interest in and to the vehicles and other                personal property described in Exhibit 1.1(C) attached                hereto; |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (D) | All                of the oil and gas and associated hydrocarbons (“Oil and Gas”) in and                under or otherwise attributable to the Leases, Land, and Pooled Land                or                produced from the Wells; |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (E) | To                the extent assignable, all governmental permits, licenses and                authorizations, as well as any applications for the same, related                to the                Leases, Land, Pooled Land and Wells or the use                thereof; |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (F) | All                of the files, records, and data of Seller relating to the items described                in subsections (A), (B), (C), (D) and (E) above (the “Records”),                including, without limitation, lease records, well records, and division                order records; well files and prospect files; title records (including                abstracts of title, title opinions and memoranda, and title curative                documents related to the Leases and Wells); contracts and contract                files;                correspondence; computer data files; micro-fiche data files; geological,                geophysical and seismic records, interpretations, data, maps and                information, subject to the provisions of Section 1.3 regarding the                licensing of proprietary seismic data; production records, electric                logs,                core data, pressure data, decline curves and graphical production                curves;                and accounting records, to the extent only that the Records can be                transferred without violation of any third-party restriction and                are not                protected by Seller’s attorney-client privilege.  The Records do                not include any appraisals or other evaluation materials related                to                Seller’s preparation of the Assets for sale hereunder, any reservoir                and/or development studies prepared by or on behalf of                Seller,  nor any of Seller’s income tax returns or files related                thereto; and |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (G) | All                of Seller’s right, title and interest in Binger Operations, LLC, an                Oklahoma limited liability company, with such transfer being evidenced                by                an assignment of membership units substantially in the form as set                forth                in Exhibit 1.1(G) |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

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| (A) | The                Base Purchase Price shall be adjusted upward                by: |
|-----|------------------------------------------------------------------------------------|

|                    (i) | any                amount determined to be due Seller pursuant to Section                4.2; |
|---------------------------------------|-----------------------------------------------------------------------------------------------|

|                   (ii) | Property                Taxes and Severance Taxes related to the Assets paid by Seller for                the                period following the Effective Time as determined pursuant to Section                4.3; |
|----------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                  (iii) | an                amount equal to the costs, expenses and other expenditures (whether                capitalized or expensed) paid by Seller in accordance with this Agreement                that are attributable to the Assets for the period from and after                7:00                a.m. (Central Time) on February 1, 2007 (the “Effective                Time”); |
|-----------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                  (iv) | a                fixed monthly rate, prorated if necessary, per active Well, as provided                in                the applicable operating agreement, for operation and maintenance                expenses                (excluding workover costs, plugging and abandoning costs, and major                costs)                incurred by Seller while operating the Assets from and after the                Effective                Time. |
|----------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|    (v) | any                amount related to the Value of Interest Additions as determined pursuant                to Section 5.5; |
|-----------------------|----------------------------------------------------------------------------------------------------------------------------|

|                  (vi) | an                amount equal to the amount of proceeds derived from the sale of Oil                and                Gas, net of royalties and severance taxes paid by Buyer, actually                received                by Buyer and directly attributable to the Wells which are, in accordance                with generally accepted accounting principles, attributable to the                period                of time prior to the Effective Time;                and |
|----------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  (vii) | any                other amount agreed upon in writing by Seller and                Buyer. |
|-------------|--------------------------------------------------------------------------------------------|

| (B) | The                Base Purchase Price shall be adjusted downward                by: |
|-----|--------------------------------------------------------------------------------------|

|                    (i) | an                amount equal to the amount of proceeds derived from the sale of Oil                and                Gas, net of royalties and severance taxes paid by Seller, actually                received by Seller and directly attributable to the Wells which are,                in                accordance with generally accepted accounting principles, attributable                to                the period of time from and after the Effective                Time; |
|---------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                   (ii) | an                amount equal to all expenditures, liabilities and costs relating                to the                Assets (other than Taxes related to the Assets) that are unpaid as                of the                Closing Date and assessed for or attributable to periods of time                or the                ownership of production prior to the Effective Time regardless how                such                expenditures, liabilities and costs are calculated provided that                to the                extent the actual amounts cannot be determined prior to the agreement                of                Buyer and Seller with respect to the Closing Adjustment Statement,                a                reasonable estimate of such expenditures, liabilities and costs shall                be                used (and to such extent Buyer shall assume the liability and                responsibility for payment                therefor); |
|----------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                  (iii) | all                amounts related to Title Defects as determined pursuant to Section                5.4,                consents and preferential rights as determined pursuant to Section                5.6,                Adverse Environmental Conditions as determined pursuant to Section                6.4,                Exclusion Adjustments as determined pursuant to Sections 5.6 or 6.4,                and                Casualty Losses as determined pursuant to Section                15.1; |
|-----------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                  (iv) | Property                Taxes and Severance Taxes related to the Assets to be paid by Buyer                for                the period prior to the Effective Time as determined pursuant to                Section                4.3;  and, |
|----------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                   (v) | any                other amount agreed upon in writing by Seller and                Buyer. |
|---------------------------------|--------------------------------------------------------------------------------------------|

|                  (vi) | the                amount of any cash distribution to be made by Legacy in May, 2007,                that                relates to the first quarter distribution for owners of                record. |
|----------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (C) | Seller                shall have the right to collect any receivable, refund or other amounts                associated with periods prior to the Effective Time.  To the                extent that Buyer collects any such receivable, refund or other amounts,                then Buyer shall promptly remit any such amounts to                Seller. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (A) | An                Assignment and Bill of Sale, substantially in the form attached hereto                as                Exhibit 3.2(A), effecting the sale, transfer, conveyance and                assignment of the Assets, with (i) a special warranty of the real                property title by, through and under Seller but not otherwise, and                (ii) with all personal property and fixtures conveyed “AS IS, WHERE                IS,” with no warranties whatsoever, express, implied or                statutory. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (B) | Any                governmental forms required to effect transfer in accordance with                applicable regulations; |
|-----|-----------------------------------------------------------------------------------------------------------------------------|

| (C) | Letters                in lieu of transfer orders instructing purchasers of production to                pay to                Buyer the proceeds of sales of Oil and Gas from the                Assets; |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (D) | Executed                change of operator forms as required by applicable governmental                regulation; |
|-----|--------------------------------------------------------------------------------------------------------------------|

| (E) | Releases                of the mortgages in favor of any bank or other third party that may                be                currently encumbering the Assets; |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (F) | The                Closing Adjustment Statement; |
|-----|--------------------------------------------------|

| (G) | A                Warranty Deed, substantially in the form attached hereto as Exhibit                3.2(G), effecting the sale, transfer and conveyance of the Deeded                Land; |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (H) | Possession                of the Records and all other                Assets; |
|-----|-------------------------------------------------------------------------------|

| (I) | Letters                of resignation as operator of these Assets, as appropriate, along                with                ballot forms to the partners as directed by the operating                agreements. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (A) | Property                Taxes.  All ad valorem taxes, real property taxes, personal                property taxes and similar obligations assessed on the Assets (“Property                Taxes”) shall be apportioned as of the Effective Time between Buyer and                Seller.  Buyer shall file or cause to be filed all required                reports and returns incident to Property Taxes which are due on or                after                the Closing, and shall pay or cause to be paid to the taxing authorities                all such taxes reflected on such reports and returns.  The                Post-Closing Adjustment Statement shall settle all liability for                Property                Taxes, using estimates based on previous assessments to the extent                current                assessments are not known.  For clarification purposes, the 2007                ad valorem tax bill that is based on 2006 production will be for                the                account of Seller.  The 2008 ad valorem tax bill that is based                on 2007 production will be for the account of Buyer, prorated to                the                Effective Date between the parties. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (B) | Sales                Taxes, Filing Fees, Etc. The Base Purchase Price is net of any sales                taxes or other transfer taxes.  Buyer shall be liable for any                sales tax or other transfer tax as well as any applicable conveyance,                transfer and recording fees, and real estate transfer stamp or taxes                imposed upon the sale pursuant to this Agreement.  If Seller is                required by applicable state law to report and pay these taxes or                fees,                Buyer shall promptly reimburse Seller in full payment of the                invoice. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (C) | Severance                Taxes.  All production, severance or excise taxes,                conservation fees and other similar such taxes or fees (other than                income                taxes) payable on a current basis with respect to Oil and Gas produced                and                sold from the Assets (“Severance Taxes”) shall be borne by Seller to the                extent the production on which such taxes are based occurs during                Seller’s                ownership prior to the Effective Time and shall be borne by Buyer                to the                extent such production occurs after the Effective                Time. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (A) | A                post-closing adjustment statement (the “Post-Closing Adjustment                Statement”) based on the actual income and expenses shall be prepared and                delivered by Seller to Buyer within ninety (90) days after the Closing,                proposing further adjustments to the calculation of the Purchase                Price                based on the information then available.  Seller or Buyer, as                the case may be, shall be given access to and shall be entitled to                review                and audit the other Party’s records pertaining to the computation of                amounts claimed in such Post-Closing Adjustment                Statement. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (B) | Within                thirty (30) days after receipt of the Post-Closing Adjustment Statement,                Buyer shall deliver to Seller a written statement describing in reasonable                detail its objections (if any) to any amounts or items set forth                on the                Post-Closing Adjustment Statement.  If Buyer does not raise                objections within such period, then the Post-Closing Adjustment Statement                shall become final and binding upon the Parties at the end of such                period. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (C) | If                Buyer raises objections, the Parties shall negotiate in good faith                to                resolve any such objections.  If the Parties are unable to                resolve any disputed item within thirty (30) days after Buyer’s receipt of                the Post-Closing Adjustment Statement, any disputed accounting item                shall                be submitted to a nationally recognized independent accounting firm                mutually agreeable to the Parties who shall be instructed to resolve                such                disputed item within thirty (30) days.  The resolution of                disputes by the accounting firm so selected shall be set forth in                writing                and shall be conclusive, binding and non-appealable upon the Parties                with                respect to the accounting matters submitted and the Post-Closing                Adjustment Statement shall become final and binding upon the Parties                on                the date of such resolution.  The fees and expenses of such                accounting firm shall be paid one-half by Buyer and one-half by                Seller. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (D) | After                the Post-Closing Adjustment Statement has become final and binding                on the                Parties, Seller or Buyer, as the case may be, shall pay to the other                such                sums as are due to settle accounts between the Parties due to differences                between the estimated Purchase Price paid pursuant to the Closing                Adjustment Statement and the actual Purchase Price set forth on the                Post-Closing Adjustment Statement. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (A) | During                reasonable business hours, Seller agrees to grant Buyer physical                access to                the Leases and Wells to allow Buyer to conduct, at Buyer’s sole risk and                expense, on-site inspections and environmental assessments of the                Leases                and Wells. Buyer agrees not to enter onto the Leases or contact field                employees without Seller’s prior knowledge. In connection with any such                on-site inspections, Buyer agrees not to interfere with the normal                operation of the Leases and Wells and agrees to comply with all                requirements of the operators of the Wells.  If Buyer or its                agents prepares an environmental assessment of any Lease or Well,                Buyer                agrees to keep such assessment confidential and to furnish copies                thereof                to Seller.  In connection with granting such access, Buyer                represents that it is adequately insured and waives, releases and                agrees                to indemnify the Seller against all claims for injury to, or death                of,                persons or for damage to operations or property arising in any way                from                the access afforded to Buyer hereunder or the activities of                Buyer.  This waiver, release and indemnity by Buyer shall                survive termination of this                Agreement. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (B) | Upon                the execution of this Agreement, Seller shall give Buyer and its                representatives, employees, consultants, independent contractors,                attorneys and other advisors reasonable access to the Records during                regular office hours for any and all inspections and                copying. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (A) | As                to the Assets, that record title or operating rights of Seller                which: |
|-----|--------------------------------------------------------------------------------------------------------|

|                    (i) | entitles                Seller to receive not less than the interests shown in Exhibit 2.4                as the                “Net Revenue Interest” of all Oil and Gas produced, saved and marketed                from or allocated to the formations in the associated Wells which                are                producing as of the date of this Agreement or which have otherwise                been                given Allocated Value, all without reduction, suspension or termination                except as stated in such Exhibit or otherwise permitted as Permitted                Encumbrances; and |
|---------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                   (ii) | obligates                Seller to bear a percentage of the costs and expenses relating to                the                maintenance and development of, and operations relating to, the producing                formations in each associated Well not greater than the “Working Interest”                shown in Exhibit 2.4 (without a proportionate increase in the Net                Revenue                Interest), all without increase except as stated in such Exhibit                or                otherwise permitted as Permitted Encumbrances;                and |
|----------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (B) | That                title of Seller to the Assets is free and clear of liens, encumbrances                and                defects that materially and adversely affect the ownership, operation                or                use of the Assets, except for Permitted                Encumbrances. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (C) | As                used herein, the term “Permitted Encumbrances” shall mean any one or more                of the following: |
|-----|------------------------------------------------------------------------------------------------------------------------------------------|

|                   (1) | The                provisions of the Leases and any lessors’ royalties, overriding royalties,                net profits interests, carried interests, production payments,                reversionary interests and similar burdens reflected in the public                records                or in the Records, if the net cumulative effect of the burdens does                not                operate to reduce the Net Revenue Interest of Seller below the interests                described in Section 2.4; |
|---------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                   (2) | Any                increase in lessor’s royalty occasioned by the repeal or suspension of any                governmental regulation providing for the reduction of royalty for                wells                producing below defined threshold                amounts; |
|---------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                   (3) | Division                orders and production sales contracts terminable without penalty                upon no                more than ninety (90) days notice to the                purchaser; |
|---------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                   (4) | Preferential                Rights and required third party consents to assignment and similar                agreements with respect to which waivers or consents are obtained                from the                appropriate parties, or the appropriate time period for asserting                any such                right has expired without an exercise of the                right; |
|---------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                   (5) | Materialman’s,                mechanic’s, repairman’s, employee’s, contractor’s, operator’s and other                similar liens or charges arising in the ordinary course of business                for                obligations that are not delinquent or that will be paid and discharged                in                the ordinary course of business, or if delinquent, that are being                contested in good faith by appropriate action of which Buyer is notified                in writing before Closing; |
|---------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                   (6) | All                rights to consent by, required notices to, filings with, or other                actions                by governmental entities in connection with the sale or conveyance                of oil                and gas leases or interests therein if they are routinely obtained                subsequent to the sale or                conveyance; |
|---------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                   (7) | Easements,                rights-of-way, servitudes, permits, surface leases and other rights                in                respect of surface operations that do not materially interfere with                the                oil and gas operations to be conducted on any Well or                Lease; |
|---------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                   (8) | All                operating agreements, unit agreements, unit operating agreements,                pooling                agreements and pooling designations affecting the Assets that are                either                (i) of record in Seller’s chain of title or (ii) reflected or                referenced in the Records or (iii) included as Material Agreements on                Exhibit 7.1(K); |
|---------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                   (9) | Conventional                rights of reassignment prior to release or surrender requiring notice                to                the holders of the rights; |
|---------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|  (10) | All                rights reserved to or vested in any governmental, statutory or public                authority to control or regulate any of the Assets in any manner,                and all                applicable laws, rules and orders of governmental                authority; |
|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  (11) | All                agreements affecting the Assets that are of record in Seller’s chain of                title, or are reflected or referenced in the                Records; |
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|  (12) | Defects                that are defensible by possession under applicable statutes of limitation                for adverse possession or for prescription; and |
|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  (13) | All                other liens, charges, encumbrances, contracts, agreements, instruments,                obligations, defects and irregularities affecting the Assets that                individually or in the aggregate are not such as to materially interfere                with the operation, value or use of any of the Assets or have not                prevented, and cannot reasonably be expected to prevent, Buyer from                receiving the proceeds of production from the affected                Assets. |
|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (A) | Buyer                may from time to time and no later than five (5) business days prior                to                Closing notify Seller in writing (a “Notice”) of any matter which would                cause title to all or part of the Assets not to be Defensible Title                (“Title Defect”), provided that no Title Defect shall be deemed to exist                unless the Title Defect Value thereof exceeds Seventy-Five Thousand                Dollars ($75,000.00). Further, there shall be no adjustment to the                Base                Purchase Price unless the aggregate Title Defect Values of all Title                Defects satisfying the condition in clause (i) exceed one percent                (1%) of the Base Purchase Price (the “Title Defect Threshold”) (such                amount being a threshold , not a deductible).  In order to                provide Seller a reasonable opportunity to cure any Title Defects                prior to                Closing, Buyer shall use reasonable efforts to provide the Notice                as soon                as reasonably possible after becoming aware of or making its determination                of the Title Defect. |
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| (B) | In                the Notice, Buyer must describe with reasonable detail each alleged                Title                Defect it has discovered and the steps required to cure each Title                Defect,                include Buyer’s reasonable estimate of the Title Defect Value attributable                to each, and include all data and information in Buyer’s possession or                control bearing thereon.  Buyer shall be deemed to have                conclusively waived all Title Defects not disclosed to Seller in                a Notice                before five (5) business days prior to Closing.  Buyer waives                any remedy against Seller for Title Defects that do not exceed the                Title                Defect Threshold or for which timely notice is not given as provided                hereunder or for which adjustment is made as hereafter                provided. |
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| (C) | Upon                timely delivery of a Notice by                Buyer: |
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|                    (i) | within                three (3) business days after Seller’s receipt of the Title Defects                Notice, Seller shall notify Buyer whether Seller agrees with Buyer’s                claimed Title Defects and/or the proposed Title Defect Values therefore                (“Seller’s Response”).  If Seller does not agree with any                claimed Title Defect and/or the proposed Title Defect Value therefor,                then                the Parties shall enter into good faith negotiations and shall attempt                to                agree on such matters; |
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|                   (ii) | within                one (1) business day after Seller’s notice of its cure of a Title Defect,                Buyer shall notify Seller whether Buyer agrees with Seller’s proposed cure                of a Title Defect (“Buyer’s Response”).  If Buyer does not agree                with any such cure, then the Parties shall enter into good faith                negotiations and shall attempt to agree on such                matters; |
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|                  (iii) | if                the Parties cannot reach agreement concerning either the existence                of a                Title Defect, Seller’s proposed cure of a Title Defect, or a Title Defect                Value within ten (10) days after Buyer’s receipt of Seller’s Response or                Seller’s receipt of Buyer’s Response, as applicable, upon either Party’s                request, the Parties shall mutually agree on and employ an attorney                experienced in title examination in the state where the Assets are                located                (“Title Consultant”) to resolve all points of disagreement relating to                Title Defects and Title Defect Values; provided that Seller or Buyer                may                elect not to proceed to Closing with regard to such Assets and adjust                the                Base Purchase Price in the amount of the Allocated Value and not                submit                such matter to arbitration; |
|-----------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                  (iv) | if                at any time any Title Consultant so chosen fails or refuses to perform                hereunder, a new Title Consultant shall be chosen by the                Parties.  The cost of any such Title Consultant shall be borne                fifty percent (50%) by Seller and fifty percent (50%) by                Buyer.  Each Party shall present a written statement of its                position on the Title Defect and/or Title Defect Value in question                to the                Title Consultant within five (5) days after the Title Consultant                is                selected, and the Title Consultant shall make a determination of                all                points of disagreement in accordance with the terms and conditions                of this                Agreement within ten (10) business days of receipt of such position                statements.  The determination by the Title Consultant shall be                conclusive and binding on the Parties, and shall be enforceable against                any Party in any court of competent jurisdiction.  If necessary,                the Closing Date shall be deferred only as to those Assets affected                by any                unresolved disputes regarding the existence of a Title Defect and/or                the                Title Defect Value until the Title Consultant has made a determination                of                the disputed issues with respect thereto and all subsequent dates                and                required activities with respect to any such Assets having reference                to                the Closing Date shall be correspondingly deferred; provided, however,                that, unless Seller and Buyer mutually agree to the contrary, the                Closing                Date shall not be deferred in any event for more than thirty (30)                days                beyond the scheduled Closing Date in Section 3.1.  Once the                Title Consultant’s determination has been expressed to both Parties, if                applicable, Seller shall have five (5) days in which to advise Buyer                in                writing which of the options available to Seller under Section 5.4                that                Seller elects regarding each of the Assets as to which the Title                Consultant has made a determination.  In evaluating whether a                Title Defect exists, due consideration shall be given to the length                of                time that the particular Asset has been producing Oil and Gas and                whether                such fact, circumstance or condition is of the type expected to be                encountered in the area involved and is usual and customarily acceptable                to reasonable and prudent operators, working interest owners and/or                purchasers engaged in the business of the exploration, development,                and                operation of oil and gas                properties. |
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| (A) | In                the event Buyer provides Seller with a timely Notice and the Title                Defects                are valid and exceed the Title Defect Threshold, for those Title                Defects                not cured by Closing, Seller may, at its sole                discretion: |
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|                    (i) | adjust                the Base Purchase Price in the amount of the Title Defect Value of                the                Asset to which such Title Defect relates and proceed to Closing on                all                Assets; provided that Seller shall not be obligated to transfer any                Assets                for which the Title Defect Value equals or exceeds such Asset’s Allocated                Value; or |
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|                   (ii) | proceed                with (a) Closing on those Assets not affected by the valid Title                Defects                and such Assets to which a Title Defect relates but for which Seller                has                elected to proceed to Closing with an adjustment of the Base Purchase                Price in the amount of the Title Defect Value of such Assets and                (b) defer Closing on those other Assets to which a Title Defect                relates and for which Seller has elected to attempt to cure such                Title                Defect and to not proceed to Closing, for which Buyer shall place                into                escrow an amount equal to the Allocated Values of the Assets affected                by                the valid Title Defects, which withheld amount shall be paid to Seller                when the Asset affected by any valid Title Defect is cured or the                Title                Defect is waived by Buyer and the affected Asset is conveyed from                Seller                to Buyer.  If neither of the above occurs and if Seller later                determines it will not cure a Title Defect on or before six (6) months                from the Closing Date, the amount in the escrow account attributable                to                such Title Defect will be returned to Buyer and Seller shall retain                such                Asset affected by such Title                Defect. |
|----------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (B) | The                diminution in value of an Asset attributable to a valid Title Defect                (the                “Title Defect Value”) notified in a Notice shall be determined by the                following: |
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|                    (i) | if                the valid Title Defect asserted is that the actual Net Revenue Interest                attributable to the producing or valued formation in any Asset is                less                than that stated in the applicable Exhibit, then the Title Defect                Value is                the product of the Allocated Value attributed to the affected formation(s)                in such Asset, multiplied by a fraction, the numerator of which is                the                difference between the Net Revenue Interest set forth in the applicable                Exhibit and the actual Net Revenue Interest, and the denominator                of which                is the Net Revenue Interest stated in the applicable Exhibit;                or |
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|                   (ii) | if                the valid 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),                the amount of the Title Defect Value is to be determined by taking                into                account the Allocated Value of such Asset, the portion of the Asset                affected by the Title Defect, the legal effect of the Title Defect,                the                potential 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. |
|----------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                  (iii) | Notwithstanding                the above, in no event shall the total of the Title Defect Values                related                to a particular Asset exceed the Allocated Value of such                Asset. |
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| (C) | If                the aggregate value of (i) the Base Purchase Price adjustment for                Title Defect Values plus (ii) the Allocated Value of Assets which are                retained in lieu of cure or adjustment equals or exceeds ten percent                (10%)                of the Base Purchase Price, then by notice delivered prior to the                Closing                either Party may terminate this Agreement and neither Party shall                have any                further obligation to conclude the transfer of the Assets under this                Agreement. |
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| (A) | Consents. |
|-----|-----------|

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| (B) | Preferential                Purchase Rights. |
|-----|----------------------------------------------|

|                    (i) | If                any preferential right to purchase any portion of the Assets is exercised                prior to the Closing Date, or if the time frame for the exercise                of such                preferential purchase rights has not expired and Seller has not received                notice of an intent not to exercise or waiver of the preferential                purchase                right, that portion of the Assets affected by such preferential purchase                right shall be excluded from the Assets and the Purchase Price shall                be                adjusted downward by an amount equal to the Allocated Value of such                affected Assets without the requirement for Buyer to give notice                (with                such adjustment being an “Exclusion Adjustment”). Notwithstanding any                other provision in this Agreement, if a preferential purchase right                subject to this Agreement is exercised, Buyer has the right, at its                sole                discretion, to terminate this Agreement, provided that the allocated                value                of all preferential rights exercised is equal to or exceeds ten percent                (10%) of the Base Purchase Price. |
|---------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                   (ii) | If                a third party exercises its preferential right to purchase, but fails                to                consummate the purchase prior to the Closing, Seller shall retain                the                affected Assets and the Purchase Price shall be adjusted downward                by an                amount equal to the Allocated Value of such affected Assets (with                such                adjustment being an “Exclusion                Adjustment”). |
|----------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                  (iii) | If                a third party exercises its preferential right to purchase, but does                not                consummate the purchase within the time frame specified in the                preferential purchase right, Seller agrees to convey the affected                Asset to                Buyer effective as of the Effective Time, and Buyer agrees to pay                Seller                the Allocated Value of the Affected                Asset. |
|-----------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                  (iv) | If                a preferential purchase right is not discovered prior to Closing,                and the                affected Asset is conveyed to Buyer at Closing, and the preferential                purchase right is exercised and subsequently consummated after Closing,                Buyer agrees to convey such affected Assets to the party exercising                such                right on the same terms and conditions under which Seller conveyed                such                Assets to Buyer and retain all amounts paid by the party exercising                such                preferential right to purchase.  In the event of such exercise,                Buyer shall prepare, execute and deliver a form of conveyance of                such                Asset to such exercising party, such conveyance to be in form and                substance as provided in this Agreement, and Seller agrees to hold                harmless and indemnify Buyer from any and all liabilities and obligations                associated with such conveyed Asset, and to reimburse Buyer for reasonable                expenses incurred by Buyer relating to the conveyed                Asset. |
|----------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (C) | Exclusive                Remedy. |
|-----|----------------------------------|

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| (A) | Buyer                acknowledges that the Assets have been used for oil and gas drilling                and                production operations and possibly for the storage and disposal of                waste                materials or hazardous substances related to standard oil field                operations.  Physical changes in or under the Assets or adjacent                lands may have occurred as a result of such uses.  The Assets                also may contain previously plugged and abandoned wells, buried pipelines,                storage tanks and other equipment, whether or not of a similar nature,                the                locations of which may not now be known by Seller or be readily apparent                by a physical inspection of the Assets.  Buyer understands that                Seller does not have the requisite information with which to determine                the                exact nature or condition of the Assets nor the effect any such use                has                had on the physical condition of the Assets.  Pursuant to the                Safe Water Drinking and Toxic Enforcement Act of 1986, Buyer is hereby                notified and assumes the risk that detectable amounts of chemicals                known                to cause cancer, birth defects and other reproductive harm may be                found                in, on or around the Assets.  Upon consummation of the Closing                Buyer shall be deemed to have assumed the risk of expense, claim,                damage                or liability arising from any such matter referred to in this section,                including without limitation the risk that the Assets may contain                waste or                contaminants and that adverse physical conditions, including the                presence                of waste or contaminants, may not have been revealed by Buyer’s                investigation.  Consummation of the Closing shall transfer all                responsibility and liability related to disposal, spills, waste or                contamination from, on or below the Assets from Seller to                Buyer. |
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| (B) | In                addition, Buyer acknowledges that some oil field production equipment                located on the Assets may contain asbestos and/or naturally-occurring                radioactive material (“NORM”).  In this regard, Buyer expressly                understands that NORM may affix or attach itself to inside of wells,                materials and equipment as scale or in other forms, and that wells,                materials and equipment located on the Assets described herein may                contain                NORM and that NORM-containing materials may be buried or have been                otherwise disposed of on the Assets.  Buyer also expressly                understands that special procedures may be required for the removal                and                disposal of asbestos and NORM from the Assets where it may be found,                and                that upon consummation of the Closing Buyer shall be deemed to have                assumed all liability when such activities are                performed. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (A) | Prior                  to Closing, Buyer shall have the right, at its sole cost and risk,                  to                  review Seller’s Phase I environmental assessments of the Assets and to                  conduct any further environmental assessment of the Assets it deems                  appropriate, to the extent that Seller has the authority to grant                  such                  right to Buyer; provided that Seller shall have the right to review                  and                  approve any plan to conduct such an environmental assessment, with                  such                  approval not to be unreasonably withheld, delayed or conditioned                  by                  Seller.  Buyer shall immediately provide to Seller any data                  obtained from such assessments, including any reports and                  conclusions.  Seller and Buyer shall keep all information                  relating to such |
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----

| (B) | Buyer                waives and releases all claims against Seller, its affiliates, and                each of                their respective directors, officers, employees, agents, and other                representatives and their successors and assigns (collectively, the                “Seller’s Group”), for injury to or death of persons, or damage to                property, arising in any way from the exercise of rights granted                to Buyer                hereby or the activities of Buyer or its employees, agents or contractors                on the Assets.  BUYER SHALL INDEMNIFY THE SELLER’S GROUP AGAINST                AND HOLD THE MEMBERS OF THE SELLER’S GROUP HARMLESS FROM ANY AND ALL LOSS,                COST, DAMAGE, EXPENSE OR LIABILITY, INCLUDING REASONABLE ATTORNEY’S FEES,                WHATSOEVER ARISING OUT OF (I) ANY AND ALL STATUTORY OR COMMON LAW                LIENS OR                OTHER ENCUMBRANCES FOR LABOR OR MATERIALS FURNISHED IN CONNECTION                WITH                SUCH TESTS, SAMPLINGS, STUDIES OR SURVEYS AS BUYER MAY CONDUCT WITH                RESPECT TO THE ASSETS; AND (II) ANY INJURY TO OR DEATH OF PERSONS OR                DAMAGE TO PROPERTY OCCURRING IN, ON OR ABOUT THE ASSETS AS A RESULT                OF                SUCH EXERCISE OR ACTIVITIES. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (C) | “Environmental                Laws” means all applicable local, state, and federal laws, rules,                regulations, and orders regulating or otherwise pertaining to:                (i) the use, generation, migration, storage, removal, treatment,                remedy, discharge, release, transportation, disposal, or cleanup                of                pollutants, contamination, hazardous wastes, hazardous substances,                hazardous materials, toxic substances or toxic pollutants;                (ii) surface waters, ground waters, ambient air and any other                environmental medium on or off any Lease; or (iii) the environment,                habitat protection or health and safety-related matters; including                the                following as from time to time amended and all others whether similar                or                dissimilar: the Comprehensive Environmental Response, Compensation,                and                Liability Act of 1980, as amended by the Superfund Amendments and                Reauthorization Act of 1986, the Resource Conservation and Recovery                Act of                1976, as amended by the Used Oil Recycling Act of 1980, the Solid                Waste                Disposal Act Amendments of 1980, and the Hazardous and Solid Waste                Amendments of 1984, the Hazardous Materials Transportation Act, the                Toxic                Substance Control Act, the Clean Air Act, the Clean Water Act, the                Safe                Drinking Water Act, the National Environmental Policy Act, the Endangered                Species Act, the Oil Pollution Act of 1990, and all regulations                promulgated pursuant thereto. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (A) | With                respect to any Adverse Environmental Conditions affecting one or                more of                the Assets which exceed the Environmental Defect Threshold, Seller                may on                an Asset-by-Asset basis (i) Remediate the Adverse Environmental                Conditions, but Seller shall have no obligation to do so, and proceed                to                Closing with no adjustment of the Base Purchase Price; (ii) proceed                to Closing and adjust the Base Purchase Price in an amount equal                to the                applicable Environmental Defect Value; provided that such adjustment                shall                not exceed the Allocated Value for such Asset; or (iii) retain the                affected Asset and reduce the Base Purchase Price by the Allocated                Value                of the affected Asset (“Exclusion                Adjustment”). |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (B) | Buyer                waives any Adverse Environmental Condition for which Buyer has received                an                adjustment to the Base Purchase Price in accordance with Section                6.4(A). |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (C) | If                Buyer delivers a valid Environmental Defect Notice to Seller and                if the                aggregate of the Environmental Defects claimed is less than or equals                the                Environmental Defect Threshold, Buyer will be deemed to have accepted                the                Assets “where-is, as-is” with respect to all Adverse Environmental                Conditions in, on or under the Assets and the Adverse Environmental                Condition(s) in, on and under the Assets will be deemed to be part                of the                Assumed  Liabilities.  The Environmental Defect                Threshold is a threshold and not a deductible.  The                Environmental Defect Threshold and the Title Defect Threshold are                separate                and distinct and operate                independently. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (D) | If                the aggregate value of (i) the Base Purchase Price adjustment for                Adverse Environmental Conditions plus (ii) any Exclusion Adjustments                in lieu of Remediating any Adverse Environmental Conditions equals                or                exceeds ten percent (10%) of the Base Purchase Price, either Party                may                terminate this Agreement and neither Party shall have any further                obligation to conclude the transfer of the Assets under this                Agreement. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (E) | The                term “Remediate” or “Remediation” means, with respect to any valid Adverse                Environmental Condition, the undertaking and completion of those                actions                and activities necessary to eliminate or correct such Adverse                Environmental Condition to the degree sufficient that such Adverse                Environmental Condition no longer constitutes an Adverse Environmental                Condition as defined above.  Seller shall promptly notify Buyer                at such time as it believes that it has Remediated an Adverse                Environmental Condition.  Buyer shall promptly notify Seller                whether it agrees such condition is Remediated.  If Buyer fails                to notify Seller of its determination with respect to such Remediation                within ten (10) business days following Seller’s notice, such Adverse                Environmental Condition shall be deemed                Remediated. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (F) | If                Seller and Buyer are unable to agree on the amount of the Environmental                Defect Value within ten (10) business days after Seller’s receipt of the                Environmental Defect Notice or that an Adverse Environmental Condition                exists, has been Remediated or is required to be Remediated, then                the                dispute will be submitted to TRC Consultants or another mutually                acceptable company with recognized expertise in the oil and gas                environmental remediation and regulation field (the “Environmental                Consultant”) whose determination shall be final and binding upon the                Parties.  Seller and Buyer shall each bear their respective                costs and expenses incurred in connection with any such dispute,                and                one-half (1/2) of the fees, costs and expenses charged by the                Environmental Consultant.  Each Party shall present a written                statement of its position on the Adverse Environmental Condition                and/or                the Environmental Defect Value in question to the Environmental Consultant                within five (5) business days after the Environmental Consultant                is                selected, and the Environmental Consultant shall make a determination                of                all points of disagreement in accordance with the terms and conditions                of                this Agreement within ten (10) business days of receipt of such position                statements.  If necessary, the Closing Date shall be deferred                only as to those Assets affected by any unresolved disputes regarding                the                existence of an Adverse Environmental Condition and/or the Environmental                Defect Value until the Environmental Consultant has made a determination                of the disputed issues with respect thereto and all subsequent dates                and                required activities with respect to any such Assets having reference                to                the Closing Date shall be correspondingly deferred; provided, however,                that, unless Seller and Buyer mutually agree to the contrary, the                Closing                Date shall not be deferred in any event for more than thirty (30)                days                beyond the scheduled Closing Date in Section 3.1.  All Assets as                to which no such dispute(s) exist shall be conveyed to Buyer subject                to                the terms of this Agreement at Closing.  Once the Environmental                Consultant’s determination has been expressed to both Parties, if                applicable, Seller shall have five (5) business days in which to                advise                Buyer in writing which of the options available to Seller under Section                6.4(A) Seller elects regarding each of the Assets as to which the                Environmental Consultant has made a                determination. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| (B) | Seller                shall Remediate the Adverse Environmental Condition to the level                agreed                upon by Seller and Buyer (or failing such agreement to the level                determined by the Environmental Consultant), but in no event shall                Seller                be required to Remediate the Adverse Environmental Condition beyond                the                level required by the Environmental Laws in effect at the Effective                Time. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (C) | Buyer                shall grant and warrant access and entry to the Assets after Closing                to                Seller and third parties conducting assessments or Remediation, to                the                extent and as long as necessary to conduct and complete the assessment                or                Remediation work, to remove equipment and facilities, and to perform                any                other activities reasonably necessary in connection with assessment                or                Remediation. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (D) | Buyer                shall facilitate Seller’s ingress and egress or assessment or Remediation                activities after the Closing.  Seller shall make reasonable                efforts to perform the work so as to minimize disruption to Buyer’s                business activities. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (E) | Seller                shall continue Remediation of the Adverse Environmental Condition                until                the first of the following occurs: |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                    (i) | the                appropriate governmental authorities provide notice to Seller or                Buyer                that no further Remediation of the Adverse Environmental Condition                is                required; or |
|---------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                   (ii) | the                Adverse Environmental Condition has been Remediated to the level                required                by the Environmental Laws or as agreed by the                Parties. |
|----------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (F) | Until                Seller completes Remediation of an Adverse Environmental Condition,                Seller                and Buyer shall each notify the other of any pending or threatened                claim,                action, or proceeding by any authority or private party that relates                to or                would affect the environmental condition, the assessment, or the                Remediation of the Assets. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (B) | Corporate                Authority.  Seller owns the Assets and has the requisite                power and authority to enter into this Agreement, to carry out the                transactions contemplated hereby, to transfer the Assets in the manner                contemplated by this Agreement, and to undertake all of the obligations                of                Seller set forth in this Agreement. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (C) | Validity                of Obligations.  This Agreement and any documents or                instruments delivered by Seller at the Closing shall constitute legal,                valid and binding obligations of Seller enforceable in accordance                with                their terms subject, however, to the effects of bankruptcy, insolvency,                reorganization, moratorium and other laws for the protection of creditors,                as well as to general principles of equity, regardless whether such                enforceability is considered in a proceeding in equity or at                law. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (D) | No                Violation.  The execution and delivery of this Agreement                does not, and the fulfillment of and compliance with the terms and                conditions hereof will not, as of Closing, violate, or be in conflict                with, any provision of Seller’s governing documents, or any statute, rule                or regulation applicable to Seller or any agreement or instrument                to which                Seller is a party or by which it is bound, or, to Seller’s knowledge,                violate, or be in conflict with any judgment, decree or order applicable                to Seller or require the approval or consent of any third party (subject                to governmental consents and approvals customarily obtained after                the                Closing). |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (E) | AFE’s.  With                respect to the joint, unit or other operating agreements relating                to the                Assets, except as set forth in Exhibit 7.1(E), there are no                material outstanding calls or payments under authorities for expenditures                for payments relating to the Assets which are due or which Seller                has                committed to make which have not been                made. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (F) | Contractual                Restrictions.  Except to the extent otherwise permitted by                this Agreement, Seller has not entered into any contracts for or                received                prepayments, take-or-pay arrangements, buydowns, buyouts for Oil                and Gas,                or storage of the same relating to the Assets which Buyer shall be                obligated to honor and make deliveries of Oil and Gas or pay refunds                of                amounts previously paid under such contracts or                arrangements. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (G) | Litigation.  Except                as set forth in Exhibit 7.1(G), there is no suit or action pending,                arising out of, or to Seller’s knowledge threatened that would have a                material adverse affect upon the ownership, operation or value of                the                Assets. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (H) | Permits                and Consents.  To Seller’s knowledge, with respect to Assets                for which Seller is the operator, Seller has (i) acquired all                material permits, licenses, approvals and consents from appropriate                governmental bodies, authorities and agencies to conduct operations                on the                Assets in compliance with applicable laws, rules, regulations, ordinances                and orders; and (ii) is in material compliance with all such permits,                licenses, approvals and consents. |
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| (I) | Broker’s                Fees.  Seller shall retain the obligation or liability,                contingent or otherwise, for brokers’ or finders’ fees in respect of the                matters provided for in this Agreement and Buyer shall have no                responsibility therefor. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| (J) | Taxes.  (i) Seller                has filed (with respect to the Assets) all material returns for Property                Taxes and Severance Taxes that are due, (ii) all payments (with                respect to the Assets) shown to be due on such returns have been                paid, and                (iii) there is no material dispute or claim concerning any Property                Tax or Severance Tax liability of the Seller (with respect to the                Assets)                claimed or raised by any tax authority in                writing. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (K) | Material                Agreements.  To the best of Seller’s knowledge, all                agreements material to the ownership, operation or value of the Assets                are                listed in Exhibit 7.1(K) (“Material                Agreements”). |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (L) | Consents                and Preferential Purchase Rights.  To the best of Seller’s                knowledge, Exhibit 7.1(L) lists all consents and preferential                purchase rights contained in the Leases or Material                Agreements. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (M) | Gas                Imbalances.  To the best of Seller’s knowledge, Exhibit                7.1(M) lists all gas imbalances with respect to the Assets as of the                Effective Time. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| (B) | Independent                Investigation.  Buyer agrees that it has, or by Closing will                have, made its own independent investigation, analysis and evaluation                of                the Assets and the transaction contemplated by this Agreement (including                Buyer’s own estimate and appraisal of the extent and value of Seller’s Oil                and Gas reserves attributable to the Assets and an independent assessment                and appraisal of the environmental risks and liabilities associated                with                the acquisition of the Assets).  Buyer agrees that it has had,                or will have prior to Closing, access to all information necessary                to                perform its investigation and has not relied and will not rely on                any                representations by Seller other than those expressly set forth in                this                Agreement |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (A) | Status                of Incorporation.  Buyer is a limited partnership duly                organized, validly existing and in good standing under the laws of                the                State of Delaware. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (B) | Corporate                Authority.  Buyer has the corporate power and authority to                enter into this Agreement, to carry out the transactions contemplated                hereby and to undertake all of the obligations of Buyer set out in                this                Agreement. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (C) | Validity                of Obligations.  The consummation of the transactions                contemplated by this Agreement will not in any respect violate, nor                be in                conflict with, any provision of Buyer’s charter, by-laws or other                governing documents, or any agreement or instrument to which Buyer                is a                party or is bound, or any judgment, decree, order, statute, rule                or                regulation applicable to Buyer (subject to governmental consents                and                approvals customarily obtained after the Closing).  This                Agreement and the documents executed and delivered by Buyer in connection                with the Closing constitute legal, valid and binding obligations                of Buyer,                enforceable in accordance with their                terms. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (D) | Qualification                and Bonding.  Buyer is in compliance with the bonding and                liability insurance requirements of all applicable state or federal                laws                or regulations that could affect Buyer’s ability or authority to own and                operate the Assets and is qualified to own any federal, Indian or                state                oil and gas leases that constitute part of the                Assets. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (E) | Non-Security                  Acquisition.  Buyer                  intends to                  acquire the Assets for its own benefit and account and is not acquiring                  the Assets with the intent of distributing fractional undivided                  interests                  thereof such as would be subject to regulation by federal or state                  securities laws, and if, in the future, it should sell, transfer                  or                  otherwise dispose of the Assets or                  fractional |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| (F) | Evaluation.  By                reason of Buyer’s knowledge and experience in the evaluation, acquisition                and operation of oil and gas properties, Buyer has evaluated the                merits                and risks of purchasing the Assets from Seller and has formed an                opinion                based solely upon Buyer’s knowledge and experience and not upon any                representations or warranties by                Seller. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (G) | Financing.  Buyer                has sufficient cash, available lines of credit or other sources of                immediately available funds to enable it to pay the Purchase Price                to                Seller at the Closing. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (H) | Broker’s                Fees.  Buyer has incurred no obligation or liability,                contingent or otherwise, for brokers’ or finders’ fees in respect of the                matters provided for in this Agreement, and, if any such obligation                or                liability exists, it shall remain an obligation of Buyer, and Seller                shall                have no responsibility therefor. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (I) | No                Knowledge of Seller’s Breach.  As of the Closing Date, Buyer                has no knowledge of any breach by Seller of any representation or                warranty                of Seller, or of any other fact, event, condition or circumstance                that                would excuse Buyer from the timely performance of its obligations                hereunder. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (J) | Disregarded                Entity.  Legacy Reserves Operating LP is a wholly-owned                subsidiary of Legacy Reserves LP, and therefore qualifies as a disregarded                entity for purposes of compliance with the Internal Revenue                Code. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (K) |   |
|-----|--------|

| (A) | Administer                and operate the Assets in accordance with the applicable operating                agreements. |
|-----|-------------------------------------------------------------------------------------------------------------------------|

| (B) | Not                introduce any new methods of management, operation or accounting                with                respect to any or all of the                Assets. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (C) | Use                commercially reasonable efforts to maintain and keep the Assets in                full                force and effect; and fulfill all contractual or other covenants,                obligations and conditions imposed upon Seller with respect to the                Assets,                including, but not limited to, payment of royalties, delay rentals,                shut-in gas royalties and any and all other required                payments. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (D) | Except                  to the extent necessary or                  advisable to avoid forfeiture or penalties, not enter into agreements                  to                  drill new wells or to rework, plug back, deepen, plug or abandon                  any Well,                  nor commence any drilling, reworking or completing or other operations                  on                  the Leases |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| (E) | Not                voluntarily relinquish its position as operator to anyone other than                Buyer                with respect to any of the Assets or voluntarily abandon any of the                Wells                other than as required pursuant to the terms of a Lease or by                regulation. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (F) | Not,                without the prior written consent of Buyer (which consent shall not                be                unreasonably withheld, delayed or conditioned), (i) enter into any                agreement or arrangement (other than one constituting a Permitted                Encumbrance) transferring, selling or encumbering any of the Assets                (other                than in the ordinary course of business, including ordinary course sales                of production, inventory or salvage or with respect to any Assets                with a                value less than $25,000 or pursuant to any agreements existing on                the date                hereof); (ii) grant any preferential or other right to purchase or                agree to require the consent of any party not otherwise required                to                consent to the transfer and assignment of the Assets to Buyer;                (iii) enter into any new sales contracts or supply contracts which                cannot be cancelled upon thirty (30) days prior notice; or (iv) incur                or agree to incur any contractual obligation  (absolute or                contingent) with respect to the Assets except as otherwise provided                herein                (including ordinary course sales of production, inventory or salvage                or                with respect to any Assets with a value less than $25,000 net to                Seller or                pursuant to any disclosed AFEs covering the                Assets). |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (G) | To                the extent known to Seller, provide Buyer with written notice of                (i) any claims, demands, suits or actions made against Seller which                materially affect the Assets; or (ii) any proposal from a third party                to engage in any material transaction (e.g., a farmout) with respect                to                the Assets. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| (A) | At                any time by mutual consent of the                Parties. |
|-----|-----------------------------------------------------------------------------|

| (B) | By                either Party as provided in Sections 5.4(C) or 6.4(D) pertaining                to Title                Defects or Adverse Environmental Conditions,                respectively. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (C) | By                  Buyer if, on the Closing Date,                  any of the conditions set forth in Article 11 hereof shall not                  have been                  satisfied or waived; provided, however, that Seller shall have                  the right                  to satisfy such condition for a period of twenty (20) days following                  delivery of notice from Buyer regarding such failure or, if such                  condition                  cannot reasonably be satisfied within such 20-day period, Seller                  shall                  have the right to commence the actions necessary                  to |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| (D) | By                Seller if, on the Closing Date, any of the conditions set forth in                Article                12 hereof shall not have been satisfied or waived; provided, however,                that                with respect to any condition other than a material failure of Buyer                to                perform its obligations under Section 3.2, as to which the granting                of any                cure period shall be entirely within Seller’s sole and absolute                discretion, Buyer shall have the right to satisfy such condition                for a                period of twenty (20) days following delivery of notice from Seller                regarding such failure or, if such condition cannot reasonably be                satisfied within such 20-day period, Buyer shall have the right to                commence the actions necessary to satisfy such condition within such                20-day period and thereafter to diligently continue such actions                beyond                such period until such satisfaction has been                effected. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (A) | Buyer’s                Breach. |
|-----|--------------------------------------|

| (B) | Seller’s                Breach. |
|-----|---------------------------------------|

| (C) | Termination                Pursuant to Section 13.1. |
|-----|------------------------------------------------------|

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| (D) | Effect                of Termination. |
|-----|---------------------------------------|

| (A) | MISREPRESENTATIONS.  ALL                CLAIMS, DEMANDS, LIABILITIES, JUDGMENTS, LOSSES AND REASONABLE COSTS,                EXPENSES AND ATTORNEYS’ FEES (INDIVIDUALLY A “LOSS” AND COLLECTIVELY, THE                “LOSSES”) ARISING FROM THE BREACH BY SELLER OF ANY REPRESENTATION OR                WARRANTY SET FORTH IN THIS AGREEMENT THAT SURVIVES                CLOSING; |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (B) | BREACH                OF COVENANTS.  ALL LOSSES ARISING FROM THE BREACH BY SELLER                OF ANY COVENANT SET FORTH IN THIS AGREEMENT;                AND |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (C) | OWNERSHIP                AND OPERATION.  ALL LOSSES ARISING FROM SELLER’S OWNERSHIP                AND OPERATION OF THE ASSETS PRIOR TO THE EFFECTIVE TIME DIRECTLY                ASSOCIATED WITH THE FOLLOWING                MATTERS: |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                    (i) | DAMAGES                TO PERSONS OR PROPERTY FOR CLAIMS ASSERTED BY ANY THIRD PARTY PRIOR                TO THE                EFFECTIVE TIME; |
|---------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------|

|                   (ii) | THE                VIOLATION BY SELLER OF THE TERMS OF ANY AGREEMENT BINDING UPON SELLER;                AND |
|----------------------------------|--------------------------------------------------------------------------------------------------------------|

|                  (iii) | CLAIMS                AGAINST SELLER BY CO-OWNERS, PARTNERS, JOINT VENTURERS AND OTHER                PARTICIPANTS IN THE WELLS. |
|-----------------------------|----------------------------------------------------------------------------------------------------------------------------------|

| (D) | Notwithstanding                the above, the following limitations shall apply to Seller’s                indemnification obligations: |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------|

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|                    (i) | Seller                shall not be obligated to indemnify Buyer for any Loss unless Buyer                has                delivered a written notice of such Loss within the Survival Period                (as                defined below) applicable to such Loss.  Any Loss for which                Seller does not receive written notice before the end of the Survival                Period shall be deemed to be an Assumed Liability.  The                “Survival Period” applicable to Losses shall                mean: |
|---------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (1) | With                regard to a breach of representations and warranties contained in                Sections                7.1(A), (B), (C) and (D), for a period of one (1) year following                the                Closing; |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | All                of the other representations and warranties by Seller in this Agreement                for a period of six (6) months following the                Closing; |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | With                regard to a breach of covenants, an indefinite period following the                Closing; |
|--------|-----|-----------------------------------------------------------------------------------------------------------------|

|   | (4) | With                regard to the matters covered by Section 14.1 (C), for a period of                six                months after the Closing. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------|

|                   (ii) | The                indemnification obligations of Seller pursuant to this Agreement                shall be                limited to actual Losses and shall not include incidental, consequential,                indirect, punitive, or exemplary Losses or                damages; |
|----------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                  (iii) | Seller’s                aggregate liabilities and obligations under this Article 14 shall                not                exceed ten percent (10%) of the Base Purchase                Price; |
|-----------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   (iv) | Seller                shall have no liability or obligation for any Losses, unless and                until the                aggregate Losses for which Buyer is entitled to recover under this                Agreement exceeds one percent (1%) of the Base Purchase Price (the                “Indemnity Threshold”) (such amount being a threshold and not a                deductible). |
|------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                   (v) | Seller                shall have no liability in excess of the Allocated Value, less any                prior                adjustments to the Base Purchase Price, for any Losses associated                with the                claim that Seller does not have Defensible Title associated with                a                particular Asset; |
|---------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                  (vi) | The                amount of Losses required to be paid by Seller to indemnify Buyer                pursuant                to this Agreement shall be reduced to the extent of any amounts actually                received by Buyer pursuant to the terms of the insurance policies                (if any)                covering such claim and any tax benefits received by                Buyer. |
|----------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  (vii) | Seller’s                    indemnification obligations shall not cover any liabilities,                    duties and                    obligations relating to properly plugging and abandoning wells,                    restoring                    and reclaiming the surface, removal of all pipelines, equipment, and                    related facilities now or hereafter located on the Assets, and                    cleaning                    up, restoring and Remediation of the Assets in accordance with                    the                    Environmental Laws and the relevant Leases, or any other violation                    or                    claimed violation of Environmental Laws (including but not limited                    to the                    payment of fines, penalties, monetary sanctions or other civil                    liabilities) or the presence, disposal, release or threatened                    release of                    any hazardous substance or hazardous waste from the Assets into                    the                    atmosphere |
|-------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (viii) | Buyer                acknowledges and agrees that the indemnification provisions in this                Article 14 and the termination rights in Article 13 shall be the                exclusive                remedies of Buyer with respect to the transactions contemplated by                this                Agreement. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (A) | MISREPRESENTATIONS.  ALL                LOSSES ARISING FROM THE BREACH BY BUYER OF ANY REPRESENTATION OR                WARRANTY                SET FORTH IN THIS AGREEMENT THAT SURVIVES                CLOSING; |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (B) | BREACH                OF COVENANTS.  ALL LOSSES ARISING FROM THE BREACH BY BUYER                OF ANY COVENANT SET FORTH IN THIS                AGREEMENT; |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (C) | ASSUMED                LIABILITIES.  ALL LOSSES ARISING FROM OR COMPRISING THE                ASSUMED LIABILITIES. |
|-----|------------------------------------------------------------------------------------------------------------------------------|

----

| (A) | An                event of casualty means volcanic eruptions, acts of God, fire, explosion,                earthquake, wind storm, flood, drought, condemnation, the exercise                of any                right of eminent domain, confiscation and seizure (a                “Casualty”).  A Casualty does not include depletion due to                normal production and depreciation or failure of equipment or                casing. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (B) | If,                prior to the Closing, a Casualty occurs (or Casualties occur) which                results in a reduction in the value of any of the Assets in excess                of                twenty-five percent (25%) of the Allocated Value of the affected                Assets                (“Casualty Loss”), (i) Seller may retain such Asset and such Asset                shall be the subject of an adjustment to the Base Purchase Price                in the                same manner set forth in Section 5.4 hereof, or (ii) at the Closing,                Seller shall assign to Buyer the right to receive all insurance proceeds                or other sums payable to Seller by reason of such Casualty Loss,                the Base                Purchase Price shall not be adjusted by reason of such payment, and                Seller                shall convey the affected Assets to                Buyer. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (C) | For                purposes of determining the diminution in value of an Asset as a                result of                a Casualty Loss, the Parties shall use the same methodology as applied                in                determining the diminution in value of an Asset as a result of a                Title                Defect as set forth in Section 5.5. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (A) | Prior                  to Closing, to the extent not already public, Buyer shall not disclose                  to                  any party that it is conducting negotiations with Seller or has                  entered                  into this Agreement other than as expressly permitted in the                  confidentiality agreement executed by Buyer in Seller’s favor prior to the                  execution of this Agreement, which shall continue to apply until                  the                  Closing and thereafter in the event of termination of this Agreement                  prior                  to the Closing. Buyer shall exercise all due diligence in safeguarding                  and                  maintaining secure all |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (B) | In                the event of termination of this Agreement for any reason, Buyer                shall not                use or knowingly permit others to use such Confidential Information                in a                manner detrimental to Seller, and will not disclose any such Confidential                Information to any person, firm, corporation, association or other                entity                for any reason or purpose whatsoever, except to Seller or to a                governmental agency pursuant to a valid subpoena or other order or                pursuant to applicable governmental regulations, rules or                statutes. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (C) | The                undertaking of confidentiality shall not diminish or take precedence                over                any separate confidentiality agreement between the                Parties.  Should this Agreement terminate, such separate                confidentiality agreement shall remain in full force and                effect. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**SELLER:**

----

**BUYER:**

|   | With                copy to:  Lynch, Chappell &Alsup |
|--------|--------------------------------------------------------------------|

|   | 300                N. Marienfeld, Suite 700 |
|--------|---------------------------------------------|

|   | Midland,                Texas  79701 |
|--------|------------------------------------------------|

----

| (A) | Each                Party shall be solely responsible for all costs and expenses incurred                by                it in connection with this transaction (including, but not limited                to fees                and expenses of its counsel and accountants) and shall not be entitled                to                any reimbursements from the other Party, except as otherwise provided                in                this Agreement. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (B) | Buyer                shall file all necessary Tax returns and other documentation with                respect                to all transfer, documentary, sales, use, stamp, registration and                other                similar Taxes and fees, and, if required by applicable law, Seller                shall                join in the execution of any such Tax returns and other                documentation.  Notwithstanding anything set forth in this                Agreement to the contrary, Buyer shall pay any transfer, documentary,                sales, use, stamp, registration and other similar Taxes and fees                incurred                in connection with this Agreement and the transactions contemplated                hereby.  Buyer shall also pay any equipment lease transfer fees                or other fees or expenses incurred in connection with transfer of                the                Assets to Buyer except as otherwise provided by this                Agreement. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (C) | Buyer                shall, at its own cost, immediately record all instruments of conveyance                and sale in the appropriate office of the state and county in which                the                lands covered by such instrument are located.  Buyer shall                immediately file for and obtain the necessary approval of all federal,                Indian, tribal or state government agencies to the assignment of                the                Assets.  The assignment of any state, federal or Indian tribal                oil and gas leases shall be filed in the appropriate governmental                offices                on a form required and in compliance with the applicable rules of                the                applicable government agencies.  Buyer shall supply Seller with                a true and accurate photocopy reflecting the recording information                of all                the recorded and filed assignments within a reasonable period of                time                after their recording and filing.  In the event that Seller                undertakes to record and/or file the conveyance instruments and other                documents associated with this transfer of interest, Buyer shall                reimburse                Seller for all associated fees at Post                Closing. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | **SELLER:** NIELSON & ASSOCIATES, INC. |                                                                           |
|--------|-------------------------------------------------|--------------------------------------------------------------------------------|
|   |                                            |                                                                           |   |
|   | By:                                             | /s/ Thomas              Fitzsimmons                                       |   |
|   |                                            | Thomas              Fitzsimmons                                                |   |
|   |                                            | Executive              Vice President and              Chief Operating Officer |   |
|   |                                            |                                                                           |   |

|   | **BUYER:** LEGACY RESERVES OPERATING LPLEGACY RESERVES OPERATING GP, LLC, GENERAL                PARTNER |                                                |
|--------|---------------------------------------------------------------------------------------------------------------|-----------------------------------------------------|
|   |                                                                                                          |                                                |   |
|   | By:                                                                                                           | /s/              Cary D. Brown                      |   |
|   |                                                                                                          | Cary              D. Brown                     |   |
|   |                                                                                                          | Chairman              & Chief Executive Officer |   |
|   |                                                                                                          |                                                |   |

----