Exhibit
      10.1

    


    


    


    March
      20,
      2007

    Angel
      LLC

    CN
      Energy
      LLC

    Swanson
      Energy Company, LLC

    Fuel
      Exploration, LLC

    MHBR
      Energy, LLC

    Rocky
      Mountain Rig LLC 

    


    c/o
      Howard L. Farkas

    6601
      East
      Progress Avenue

    Greenwood
      Village, Colorado 80111

    


    


    
      	
            	Re:	
              Ute
                Muddy Sand Unit, Fence Creek Muddy Sand Unit, Boos
                Unit

            


      	 	 	Campbell and Sheridan Counties,
              Wyoming


    

     

     

    Dear
      Mr.
      Farkas:

     

     

    This
      letter constitutes a letter of intent regarding the terms and conditions under
      which True North Energy Corporation (“Buyer”) is willing to acquire all
      interests of Angel
      LLC, CN Energy LLC, Swanson Energy Company, LLC, Fuel Exploration, LLC and
      MHBR
      Energy, LLC (collectively
      “Sellers”) in the units described above (the “Units”) together with the workover
      rig (the “Rig”) owned by Rocky Mountain Rig LLC (“RMR”), a wholly owned
      subsidiary of Sellers. 

     

    1. Properties.
      The
      "Properties" are all interests in the Units owned by Sellers as of
      7:00 a.m., local time on March 1, 2007 (the Effective Date") as described
      in the offering brochure made available to Buyer by P&M Petroleum Management
      LLC (“P&M”) on February 20, 2007, including without limitation the interests
      in the wells listed on Exhibit A attached hereto and all of Seller's right,
      title and interest in and to the producing and nonproducing oil and gas
      properties contained in the areas of the Units outlined on the plats attached
      hereto as Exhibits B-1, B-2 and B-3 together with a corresponding interest
      in
      all related oil and gas interests (including related oil and gas units and
      the
      unit and/or pooling declarations, agreements, and orders that affect those
      units), oil and gas wells, injection and disposal wells, equipment, materials,
      production facilities, pipelines, plants, gathering lines, contracts (in-cluding
      farmout or other acquisition agreements, oil and gas sales contracts, and
      operating agreements), options, easements, rights-of-way, permits, and surface
      leases; and all other rights, properties and privileges associated with the
      use,
      ownership, and/or operation of any of the foregoing. The "Properties" also
      include the Rig and all of Sellers’ and RMR’s files and information relating to
      the foregoing.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    2. Purchase
      Price.
      The
      purchase price for the Properties other than the Rig (the "Units Purchase
      Price") shall be $22,000,000, payable by Buyer to Seller at closing 50% in
      cash
      and 50% in the issuance of a number of shares of Buyer’s common stock computed
      by dividing $11,000,000 by the sum of $0.20 per share of Buyer’s common stock
      plus average closing trading price of Buyer’s common stock for the ten trading
      days immediately preceding the day on which the Definitive Agreement is
      executed. The purchase price for the Rig shall be $650,000 payable entirely
      in
      cash (the “Rig Purchase Price”). Sellers
      will be granted piggyback rights pursuant to which Sellers may request that
      Buyer include the common stock consideration provided as part of the Purchase
      Price in any registration statement filed with the Securities and Exchange
      Commission to register other common stock of Buyer (other than a registration
      on
      Form S-4 or S-8, or any successor or other forms promulgated for similar
      purposes). Each party will be responsible for payment of its own costs and
      expenses in connection with this transaction. Each party agrees to discharge
      its
      own brokerage or finders’ fees or agents’ commissions or like payment in
      connection with the transactions contemplated by this letter of
      intent.

     

    3. Definitive
      Agreement.
      Upon
      execution of this letter, the parties agree to undertake, diligently and in
      good
      faith, to execute a definitive purchase and sale agreement (the "Definitive
      Agreement") no later than June 1, 2007, which shall contain the provisions
      of
      this letter of intent and other mutually acceptable provisions customary in
      transactions of this sort. The
      Definitive Agreement will contain representations, warranties and
      indemnification customary in an asset purchase agreement for this type of
      property, including representations, warranties and indemnification as to good
      and marketable title to the Properties, material contracts, due payment of
      royalties and taxes, litigation matters, environmental condition, and compliance
      with law. All representations will be made as of the execution and delivery
      of
      the Definitive Agreement and shall survive the Closing for a period of one
      (1)
      year, except for all representations regarding environmental, royalty, and
      tax
      matters, which will extend for the applicable statute of
      limitations.
      Upon
      execution of the Definitive Agreement, Buyer shall deposit into escrow with
      an
      independent escrow agent the sum of $220,000 which shall be paid to Sellers
      as
      part of the Purchase Price delivered at closing or paid to Sellers upon Buyer’s
      wrongful failure to close, and refunded to Buyer in the event of Sellers’
wrongful failure to close in addition to any other remedies available to Buyer
      under the Definitive Agreement or applicable law. 

     

    4. Closing.
      Buyer’s
      obligation to close the purchase of the Properties shall be subject to
      satisfactory results of Buyer’s due diligence as described below and to Buyer’s
      obtaining a satisfactory commitment to finance payment of the Purchase Price
      and
      to other customary closing conditions. In addition, Buyer’s obligation to close
      the purchase of the Rig shall be subject to Buyer’s obtaining a satisfactory
      commitment from the operator of the Rig to remain contracted for work on the
      Rig
      for a satisfactory period after the Closing. Closing of the purchase and sale
      of
      the Properties shall occur upon satisfaction of all conditions to closing but
      no
      later than July 16, 2007 in the offices of Buyer’s counsel, and the transfer of
      the Properties shall be effective as of the Effective Date. At the Closing,
      Sellers shall convey the Properties other than the Rig to Buyer by assignment
      and bill of sale containing a special warranty of title, i.e., a warranty
      against claims arising by, through and under Sellers, and shall deliver
      governmental assignment forms, certificates, opinions of counsel relating to
      due
      authorization, enforceability of the transaction and other corporate matters
      relating to Sellers’ execution and performance of the Definitive Agreement and
      related documents, and post-closing financial assurances as shall be reasonably
      required to provide Buyer with appropriate indemnity security. At the Closing
      RMR shall convey the Rig to Buyer by bill of sale and certificate of title
      containing a special warranty of title. The Properties will be conveyed free
      and
      clear of all encumbrances and other burdens not disclosed to and accepted by
      Buyer prior to execution of the Definitive Agreement.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    5. Due
      Diligence.
      Upon
      execution of this letter of intent and until the first to occur of the
      termination of this letter of intent pursuant to paragraph 11 below or the
      Closing, Buyer shall have the opportunity to conduct a complete and unrestricted
      "due diligence" inspection of the Properties and review of the files relating
      thereto, including files and operations of third parties operating the
      Properties, in order to satisfy itself with respect to the Properties. In
      particular, Buyer will have the opportunity to satisfy itself with respect
      to
      the following matters (and such other matters as the parties shall agree in
      the
      Definitive Agreement):

     

    	a.  	
            That
              Sellers have good and marketable title to the working interests and
              net
              revenue interests in the Properties evaluated by Buyer, subject to
              mutually agreeable dollar thresholds and baskets for excepting minor
              ownership variances;

          


     

    	b.  	
            That
              the wells, equipment, and facilities included in the Properties presently
              being produced are in good condition and are
              operational;

          


     

    	c.  	
            That
              none of the Properties are subject to or involved in any demands,
              lawsuits, disputes, investigations, or controversies prior to Closing
              that
              might materially adversely affect their ownership or their
              value;

          


     

    	d.  	
            That
              the Properties have been operated in a prudent manner, in compliance
              with
              law, and that there are no conditions on the Properties giving rise
              to
              liability under any environmental laws; 

          


     

    	e.  	
            That
              all royalties and taxes have been properly and completely
              paid;

          


     

    	f.  	
            That
              all leases and contracts included in the Properties are in full force
              and
              effect, and that there are no unusual or onerous provisions in any
              of the
              leases or contracts that would materially affect the value, ownership
              or
              operation of any of the Properties;

          


     

    	g.  	
            That
              Sellers have obtained or will obtain at Closing all necessary approvals
              for transfer of the Properties to Buyer;

          


     

    	h.  	
            That
              the Rig is in satisfactory condition for safe and adequate operation
              and
              is in good repair with all required ratings and licenses and is not
              subject to any contracts with any third parties or to any indebtedness
              or
              other claims or approvals of third parties other than the approval
              of
              Sellers; and

          


     

    	i.  	
            That
              production from the Properties is not committed to any gathering
              agreement, purchase agreement, hedging agreement, call on production,
              prepayment agreement or other agreement relating to the gathering,
              treatment, transportation, processing, sale or marketing of production
              not
              terminable by Buyer upon occurrence of the
              Closing.

          


     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    6. Adjustments
      to Purchase Price; Indemnities.
      All
      liabilities and benefits relating to the Properties shall be apportioned between
      the parties as of the Effective Date. The Purchase Price shall also be subject
      to the usual and customary adjustments for title defects, environmental defects,
      production in tanks, gas take imbalances, the net operating income received
      by
      Sellers for the period after the Effective Date, ad valorem and severance taxes
      based on ownership of property or production, and such other adjustments as
      are
      usual or customary in the purchase and sale of producing oil and gas properties,
      or as are agreed upon by the parties. Each party shall either indemnify or
      defend the other against the liabilities retained or assumed by such party
      and
      against any breaches of representations and warranties and covenants of such
      party contained in the Definitive Agreement, whether discovered before or after
      the Closing. 

     

    7. Exclusivity.
      Until
      the first to occur of the termination of this letter of intent or the execution
      of the Definitive Agreement, Sellers and RMR shall not, directly or indirectly,
      encourage, solicit, or entertain any other offers, inquiries, or proposals
      for
      the purchase and sale of the Properties, or conduct any negotiation or
      discussion or provide any information pertaining to the sale of the Properties
      with any person or entity other than Buyer or its representatives.

     

    8. Disclosure.
      Except
      as and to the extent required by law or otherwise as a result of Buyer’s status
      as a public company, without the prior written consent of either Buyer or
      Sellers and RMR as to the disclosure by the other, neither Sellers nor RMR
      nor
      Buyer shall, and each shall direct its respective officers, directors, owners,
      managers, employees, affiliates, and advisors not to, directly or indirectly,
      make any public comment, statement or communication with respect to, or
      otherwise disclose or permit the disclosure of the existence of discussions
      regarding, a possible transaction between the parties or any of the terms,
      conditions or other aspects of the transaction proposed in this letter of
      intent.

     

    9. Non-Public
      Information.
      Sellers
      and RMR hereby acknowledge that during the period from the date hereof through
      the Closing, Sellers and RMR may become aware of “material non-public
      information” (as defined under applicable securities laws) regarding Buyer.
      Sellers and RMR shall refrain, and shall communicate to other persons, including
      their respective officers, directors, owners, managers, employees, affiliates
      and advisors, having knowledge of such information that they are required under
      applicable securities laws to refrain from trading in Buyer’s securities while
      such information is material.

     

    10. Counterparts.
      This
      letter of intent may be executed in one or more counterparts, each of which
      will
      be deemed to be an original copy and all of which, when taken together, will
      be
      deemed to constitute one and the same document. This letter of intent shall
      not
      be effective for any purpose as against any party hereto unless and until all
      parties hereto have executed a counterpart of this letter.

     

    11. Term. If
      all
      parties have not executed this letter of intent by March 31, 2007, this letter
      of intent shall be deemed to have terminated. Following execution of this letter
      of intent by all parties, this letter of intent shall remain in effect until
      the
      earlier of 60 days from the date of this letter or the execution of the
      Definitive Agreement.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    12. Limitations
      on Binding Obligations. This
      letter is a letter of intent and except for the provisions of paragraphs 7,
      8
      and 9 shall not contain a binding or contractual obligation of any party hereto
      with respect to the purchase and sale of the Properties. Such binding
      obligations shall be created, if at all, by execution of the Definitive
      Agreement.

     

    If
      the
      provisions of this letter are acceptable, please have all Sellers and RMR
      execute and return one executed counterpart to the undersigned. We appreciate
      the opportunity to acquire these Properties, and we look forward to working
      with
      you to close this transaction as soon as possible.

     

    Sincerely,

    True
      North Energy Corporation

     

    
      	By	
              /s/
                John Folvonic 

            


      	 	
              
                

              

              John
                I. Folnovic

              President
                and CEO

            


    

    
      
The
      foregoing accepted and agreed to this 22nd
      day of
      March, 2007:

    


    Rocky
      Mountain Rig, LLC

    


    
      	By	
              /s/
                Jerry Calley

            


      	 	
              
Manager


    

    


    Angel,
      LLC

    


    
      	By	
              /s/
                Howard L. Farkas

            


      	 	
              
Manager


    

     

    CN
      Energy, LLC

    


    
      	By	
              /s/
                Jerry Calley

            


      	 	
              
Manager


    

     

    Swanson
      Energy Company, LLC

     

    
      	By	
              /s/
                Vern Swanson

            


      	 	
              
Manager


    

     

    Fuel
      Exploration, LLC

    


    
      	By	
              /s/
                Ray Danton

            


      	 	
              
                
Manager

            


    

     

    MHBR
      Energy, LLC

    


    
      	By	
              /s/
                Meyer H. Saltzman

            


      	 	
              
Manager