# EDGAR Filing Document

**Accession Number:** 0001842556
**File Stem:** 0001213900-25-087039
**Filing Date:** 2025-9
**Character Count:** 208868
**Document Hash:** 1f87807f7fbd7956c368a3eb8e4858e1
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001213900-25-087039.hdr.sgml**: 20250912

**ACCESSION NUMBER**: 0001213900-25-087039

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 19

**CONFORMED PERIOD OF REPORT**: 20250909

**ITEM INFORMATION**: Entry into a Material Definitive Agreement

**ITEM INFORMATION**: Unregistered Sales of Equity Securities

**ITEM INFORMATION**: Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers

**ITEM INFORMATION**: Regulation FD Disclosure

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20250912

**DATE AS OF CHANGE**: 20250912

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** EON Resources Inc.
- **CENTRAL INDEX KEY:** 0001842556
- **STANDARD INDUSTRIAL CLASSIFICATION:** CRUDE PETROLEUM & NATURAL GAS [1311]
- **ORGANIZATION NAME:** 01 Energy & Transportation
- **EIN:** 854359124
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-41278
- **FILM NUMBER:** 251310023

**BUSINESS ADDRESS:**
- **STREET 1:** 3730 KIRBY DRIVE, SUITE 1200
- **CITY:** HOUSTON
- **STATE:** TX
- **ZIP:** 77098
- **BUSINESS PHONE:** 713.834.1145

**MAIL ADDRESS:**
- **STREET 1:** 3730 KIRBY DRIVE, SUITE 1200
- **CITY:** HOUSTON
- **STATE:** TX
- **ZIP:** 77098

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** HNR Acquisition Corp.
- **DATE OF NAME CHANGE:** 20210126

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 8-K**

**CURRENT REPORT**

**Pursuant to Section 13 or 15(d) of**

**The Securities Exchange Act of 1934**

**Date of Report (Date of earliest event reported): September 9, 2025**

**EON RESOURCES INC.**

**(Exact name of registrant as specified in its charter)**

---

| | | |
|:---|:---|:---|
| **Delaware** | **001-41278** | **85-4359124** |
| **(State or other jurisdiction<br> of incorporation)** | **(Commission File Number)** | **(IRS Employer<br> Identification No.)** |

---

**3730 Kirby Drive, Suite 1200**

**Houston, Texas 77098**

**(Address of principal executive offices, including zip code)**

**(713) 834-1145**

**(Registrant's telephone number, including area code)**

**N/A**

**(Former name or former address, if changed since last report.)**

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| **Title of each class:** | **Trading symbol** | **Name of each exchange on which registered** |
| Class A Common Stock, par value $0.0001 per share | EONR | NYSE American |
| Redeemable warrants, exercisable for three quarters of one share of Class A Common Stock at an exercise price of $11.50 per share | EONR WS | NYSE American |

---

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR§230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

**Item 1.01 Entry into a Material Definitive Agreement**

***New ORRI***

 ****

On September 9, 2025, LHO Operating, LLC, an entity of which EON Resources Inc. (the "Company") indirectly owns 100% of the outstanding equity interests, ("LHO") entered into a Conveyance of Overriding Royalty Interest (the "ORRI Conveyance") with an affiliate of Virtus Energy Partners, LLC ("Investor"). Pursuant to the ORRI Conveyance, LHO conveyed an overriding royalty interest in and to certain interests, hydrocarbons and wells owned by LHO (the "New ORR Interest") to Investor as follows: (i) a 15% perpetual overriding royalty interest in existing leases and wells in the Grayburg Jackson Field ("GJF"); and (ii) a 5% perpetual overriding royalty interest in the San Andres Formation (as defined in the ORRI Conveyance") in wells to be drilled under the Farmout Program (defined below) with Virtus Energy Assets, LLC ("Virtus"), an affiliate of Virtus Energy Partners, LLC.

In connection with the ORRI Conveyance, LHO and Investor entered into an Agreement Regarding Overriding Royalty Interest (the "ORRI Agreement") which, among other things, governs the terms of disbursements to be made to Investor in connection with the New ORR Interest. Pursuant to the ORRI Agreement, commencing on January 1, 2026, LHO is required to fund, or cause to be funded, qualified petroleum, exploration, development and production activities in an amount not less than $3,000,000 in each year through and including December 1, 2028 (the "Annual Capital Commitment"). If the Annual Capital Commitment is not met, the percentages of the New ORR Interest will increase by an amount (expressed in percentage points) equal to the product of (a) (i) 1.0 minus (ii) the amount of qualified expenditures divided by the Annual Capital Commitment, multiplied by (b) 0.02. Furthermore, LHO agreed to execute a conveyance of overriding royalty interests for any subsequently acquired interests in the subject interests, hydrocarbons and leases described in the ORRI Conveyance.

Investor has no right or power to participate in the operations of the GJF as a result of the conveyance of the New ORR Interest. LHO is required to use commercially reasonable efforts to market the subject hydrocarbons and utilize reasonable prudent operator standards in operating the GJF. LHO is not permitted to transfer any of the interests that are subject to the ORRI Conveyance or to assign or delegate any rights or obligations with respect to the New ORR Interest without the prior consent of Investor (except as described below in the Farmout Program).

The foregoing is a summary description of certain terms of the ORRI Conveyance and the ORRI Agreement. For a full description of all terms, please refer to copies of the ORRI Conveyance and the ORRI Agreement that are filed as Exhibits 10.1 and 10.2 to this Current Report on Form 8-K and are incorporated herein by reference.

***Virtus Farmout Program***

 ****

On September 9, 2025, LHO and Virtus entered into a Joint Development, Leasehold Purchase, and Area of Mutual Interest Agreement (the "Farmout Program"). Pursuant to the Farmout Program, Virtus paid LHO $5,000,000 in cash in consideration of the farmout of LHO's rights in the San Andres Formation in the GJF in which Virtus will own a 65% operated working interest (the "Assigned Interest") and LHO retained a 35% non-operated working interest. In connection with such farmout, Virtus has agreed to conduct certain confirmatory evaluation studies and to fund, drill, complete, and equip three horizontal wells within the GJF, with LHO's interest in such initial operations to be carried to the tanks by Virtus. If further drilling is determined to be commercially viable by Virtus, LHO and Virtus will drill up to 12 additional horizontal wells targeting the GJF on or before December 31, 2030, to be completed on a "heads-up" basis. If Virtus does not complete such drilling commitment by December 31, 2030, Virtus will be required to reassign to LHO all right, title and interest to the Assigned Interest, other than wellbores drilled by Virtus and other specified exceptions.

Furthermore, for five years following September 9, 2025, if either Investor or Virtus acquire any oil, gas or mineral leasehold rights, wellbore interest, or other interests in oil gas, or mineral estate in certain designated sections of the GJF, then such party will be required to give the other party the option to participate in such acquisition up to its Subsequent AMI Participation Percentage (35% for LHO and 65% for Virtus).

The Farmout Program also provides for a mutual five-year right of first offer in the event that either of the parties determines to sell its interests that are subject to the Farmout Program to a third-party. If such right of first offer is exercised, the exercising party will have 45 days to negotiate in good faith and consummate the transaction for the sale of the offered interests in accordance with the material terms and conditions under which the selling party proposed to sell the offered interests.

The foregoing is a summary description of certain terms of the Farmout Program. For a full description of all terms, please refer to copies of the Farmout Program that is filed as Exhibit 10.3 to this Current Report on Form 8-K and is incorporated herein by reference.

 ****

***Pogo Royalty Purchase, Sale, Termination and Exchange***

As previously reported, on February 10, 2025, the Company entered into a Purchase, Sale, Termination and Exchange Agreement (the "PSTE Agreement"), by and among the Company, HNRA Upstream, LLC, which is managed by, and is a subsidiary of, the Company ("OpCo"), HNRA Partner, Inc., which is a wholly owned subsidiary of OpCo ("SPAC Subsidiary"), EON Energy, LLC (f/k/a HNRA Royalties, LLC), which is a wholly owned subsidiary of the Company ("EON Energy"), CIC Pogo LP ("CIC"), DenCo Resources, LLC ("DenCo"), Pogo Resources Management, LLC ("Pogo Management"), 4400 Holdings, LLC ("4400"), and Pogo Royalty, LLC ("Pogo Royalty"). Pursuant to the PSTE Agreement, the Company agreed to purchase a 10% overriding royalty interest in existing leases and wells in the GJF (the "Pogo ORRI") from Pogo Royalty for $14,000,000 (the "Pogo ORRI Purchase Price"), payable in cash at the closing of the transactions contemplated by the PSTE Agreement (the "Closing"). In addition, at the Closing, Pogo Royalty agreed to waive all outstanding interest accrued under the promissory note in the aggregate principal amount of $15,000,000 issued to Pogo Royalty (the "Seller Note"), reduce the outstanding principal amount of the Seller Note to $7,000,000 and settle and discharge the Seller Note in exchange for the payment of $7,000,000 in cash. Pogo Royalty further agreed to assign and transfer the 1,500,000 preferred units of OpCo (the "OpCo Preferred Units"), which were convertible into Class B common units of OpCo on November 15, 2025 at a ratio equal to the quotient of $20 divided by the average of the daily VWAP of the Company's Class A Common Stock, $0.0001 per share ("Class A Common Stock"), during the five trading days prior to conversion, and thereafter were exchangeable for shares of Class A Common Stock on a one-to-one basis, to OpCo in exchange for the issuance by the Company of 1,500,000 shares of Class A Common Stock (the "Share Consideration") at the Closing.

On September 9, 2025, the Company entered into an Amendment No. 4 to the PSTE Agreement ("Amendment No. 4") whereby (i) the Pogo ORRI Purchase Price was reduced from $14,000,000 to $13,675,000, payable in cash at Closing, and (ii) the effective date of the transfer of the Pogo ORRI was changed from the first day of the month after the Closing occurs to the first day of the month in which the Closing occurs.

In addition, on September 9, 2025, the Closing occurred and the Company and Pogo Royalty consummated the transactions contemplated by the PSTE Agreement, including: (1) the Company paid the Pogo ORRI Purchase price to Pogo Royalty in cash; (2) the Company paid $7,000,000 in cash to Pogo Royalty for discharge and termination of the Seller Note; (3) Pogo Royalty assigned and transferred the OpCo Preferred Units to the Company; (4) the Company issued the Share Consideration to Pogo Royalty; and (5) Pogo Royalty transferred and conveyed the Pogo ORRI to the Company, effective as of September 1, 2025.

Following the Closing, the Company is the sole holder of all outstanding equity interests of OpCo.

Funds received by the Company for the conveyance of the New ORR Interest were utilized to make payments to Pogo Royalty to consummate the Closing.

The foregoing is a summary description of certain terms of Amendment No. 4. For a full description of all terms, please refer to the copy of Amendment No. 4 that is filed as Exhibit 2.1 to this Current Report on Form 8-K and is incorporated herein by reference.

***Termination of FIBT Term Loan***

 ****

As previously reported, the Company, OpCo, SPAC Subsidiary, Pogo, LHO, and First International Bank & Trust ("FIBT") entered into a Senior Secured Term Loan Agreement on November 15, 2023 (the "Loan Agreement"), setting forth the terms of a senior secured term loan facility in an aggregate principal amount of $28,000,000 (the "Term Loan"). The entire amount of the Term Loan was advanced in one tranche on November 15, 2023. In connection with the Term Loan, the Company, OpCo, SPAC Subsidiary, Pogo, LHO, and FIBT entered into a Pledge and Security Agreement on November 15, 2023 (the "Security Agreement"), whereby the Company, OpCo, SPAC Subsidiary, Pogo, and LHO granted a senior security interest to FIBT on all assets of such parties, except certain excluded assets described therein, including, among other things, any interests in the Pogo ORRI. Furthermore, in connection with the Term Loan, the Company, OpCo, SPAC Subsidiary, Pogo, LHO, and FIBT entered into a Guaranty Agreement on November 15, 2023 (the "Guaranty Agreement"), whereby the OpCo, SPAC Subsidiary, and LHO guaranteed payment and performance of the Company and each other under the Loan Agreement.

On September 9, 2025, the Company made payment to FIBT of approximately $19, 3000,000, representing the full amount owed to FIBT under the Term Loan, following which all obligations under the Loan Agreement, Security Agreement, and Guaranty Agreement were deemed satisfied and repaid in all respects (except those obligations expressly surviving the termination of such agreements), and the related lien on the assets of the Company, OpCo, SPAC Subsidiary, Pogo, and LHO were released by FIBT.

Funds received by the Company for the conveyance of the New ORR Interest were utilized to make payments to FIBT for satisfaction and termination of the Term Loan.

**Item 3.02 Unregistered Sales of Equity Securities**

The information contained above in "Item 1.01 Entry into a Material Definitive Agreement" related to the issuance of Class A Common Stock as the Share Consideration is hereby incorporated by reference into this Item 3.02. The Company issued such shares of Class A Common Stock in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the "Securities Act"), Rule 506(b) of Regulation D promulgated thereunder, and/or Section 3(a)(9) of the Securities Act.

This Current Report on Form 8-K shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall such securities be offered or sold in the United States absent registration or an applicable exemption from the registration requirements and certificates evidencing such shares contain a legend stating the same.

**Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.**

On September 8, 2025, the Board of Directors (the "Board") of the Company approved cash payments to certain directors and named executive officers, with a portion to be paid upon closing of the transactions with Virtus and Investor, and the remainder to be paid later in 2025. Such cash payments consist of: (1) $250,000 to Dante Caravaggio, the Company's Chief Executive Officer, President, and member of the Board, with $50,000 paid at closing, (2) $250,000 to David M. Smith, the Company's General Counsel and Secretary, with $50,000 paid at closing, (3) $250,000 to Mitchell B. Trotter, the Company's Chief Financial Officer and member of the Board, with $50,000 paid at closing, (4) $25,000 to Joseph Salvucci, Sr., a director and Chairman of the Board, with $10,000 paid at closing, (5) $25,000 to Joseph Salvucci, Jr., member of the Board, with $10,000 paid at closing, and (6) $25,000 to Byron Blount, a member of the Board, with $10,000 paid at closing.

In addition, the Board approved awards of restricted stock to certain directors and named executive officers, to be issued following approval by stockholders of the Company of a new equity incentive plan. Such equity awards consist of: (1) 250,000 shares of Class A Common Stock to Dante Caravaggio, (2) 250,000 shares of Class A Common Stock to David M. Smith, (3) 250,000 shares of Class A Common Stock to Mitchell B. Trotter (4) 25,000 shares of Class A Common Stock to Joseph Salvucci, Sr., (5) 25,000 shares of Class A Common Stock to Joseph Salvucci, Jr., and (6) 25,000 shares of Class A Common Stock to Byron Blount.

**Item 7.01 Regulation FD Disclosure.**

On September 9, 2025, the Company issued a press release announcing the conveyance of the New ORR Interest, the Closing of the PSTE Agreement, and the termination of the Term Loan. A copy of the press release is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

On September 10, 2025, the Company issued a press release announcing certain terms of the Farmout Program with Virtus. A copy of the press release is filed as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated herein by reference.

The information in Item 2.02 and this Item 7.01 and in Exhibits 99.1 and 99.2, attached hereto is being furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.

**Item 9.01. Financial Statements and Exhibits.**

(d) Exhibits

The following exhibits are being filed herewith:

---

| | |
|:---|:---|
| **Exhibit<br> Number** | **Description** |
| 2.1 | [Amendment No. 4 to Purchase, Sale, Termination and Exchange Agreement by and among the Company, OpCo, SPAC Subsidiary, EON Energy, Pogo Royalty, CIC, DenCo, Pogo Management, and 4400 dated September 9, 2025](ea025701901ex2-1_eon.htm) |
| 10.1†\* | [Conveyance of Overriding Royalty Interest by and between LHO and Investor dated September 9, 2025](ea025701901ex10-1_eon.htm) |
| 10.2\* | [Agreement Regarding Overriding Royalty Interest by and between LHO and Investor dated September 9, 2025](ea025701901ex10-2_eon.htm) |
| 10.3†\* | [Joint Development, Leasehold Purchase, and Area of Mutual Interest Agreement by and between LHO and Virtus dated September 9, 2025](ea025701901ex10-3_eon.htm) |
| 99.1 | [Press Release of EON Resources, Inc. entitled "EON Resources Inc. Announces $45.5 million of Funding Closed with the Simultaneous Settlement of Seller Obligations and Retirement of Senior Debt" issued on September 10, 2025](ea025701901ex99-1_eon.htm) |
| 99.2 | [Press Release of EON Resources, Inc. entitled "EON Resources Inc. Announces Farmout of San Andres Rights to Virtus Energy Partners, LLC, $300+ million San Andres Horizontal Drilling Program, Up to a 90 Wells with a Reserve Value Estimated at $95+ million in Net PV-10" issued on September 11, 2025](ea025701901ex99-2_eon.htm) |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |

---

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| | |
|:---|:---|
| † | Schedules and exhibits to this Exhibit omitted pursuant to Regulation S-K Item 601(b)(2). The Company agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request.<br>|
| \* | Certain portions of this exhibit have been redacted pursuant to Item 601(b)(10)(iv) of Regulation S-K. The omitted information is (i) not material and (ii) would likely cause competitive harm to the Company if publicly disclosed. |

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**SIGNATURE**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

---

| | | |
|:---|:---|:---|
| September 12, 2025 | **EON Resources Inc.** | **EON Resources Inc.** |
|  | By: | /s/ Mitchell B. Trotter |
|  | Name: | Mitchell B. Trotter |
|  | Title: | Chief Financial Officer |

---

## Exhibit 2.1

**Exhibit 2.1**

**Amendment No. 4** 

**to**

**purchase, SALE, TERMINATION AND EXCHANGE AGREEMENT**

This Amendment No. 4 (this "**<u>Amendment</u>**") effective as of September 9, 2025 (the "**<u>Amendment 4 Effective Date</u>**") to that certain Purchase, Sale, Termination and Exchange Agreement, dated as of February 10, 2025, is made by and among Pogo Royalty, LLC, a Texas limited liability company ("**<u>Pogo Royalty</u>**"), CIC Pogo LP, a Delaware limited partnership ("**<u>CIC</u>**"), DenCo Resources, LLC, a Texas limited liability company ("**<u>DenCo</u>**"), Pogo Resources Management, LLC, a Texas limited liability company ("**<u>Pogo Resources Management</u>**"), and 4400 Holdings, LLC, a Texas limited liability company ("**<u>4400</u>**" and, together with Pogo Royalty, CIC, DenCo and Pogo Resources Management, the "**<u>Sellers</u>**"), EON Resources Inc., a Delaware corporation (the "**<u>Company</u>**"), HNRA Upstream, LLC, a Delaware limited liability company ("**<u>OpCo</u>**"), HNRA Royalties, LLC, a Delaware limited liability company ("**<u>EONR Royalties</u>**") and HNRA Partner, Inc. a Delaware corporation (the "**<u>SPAC Subsidiary</u>**" and, together with the Company, OpCo and EONR Royalties, the "**<u>Purchasers</u>**"). The Sellers and the Purchasers are referred to herein individually as a "**<u>Party</u>**" and, collectively, as the "**<u>Parties</u>**." Any term used but not defined herein shall have the meaning assigned to such term in the PSA.

**Recitals**

**Whereas**, the Sellers and the Purchasers are parties to that certain Purchase, Sale, Termination and Exchange Agreement, dated as of February 10, 2025 (as amended by Amendment No. 1, Amendment No. 2 and Amendment No. 3, dated June 2, 2025, June 6, 2025 and June 13, 2025, the "**<u>PSA</u>**");

**WHEREAS**, pursuant to <u>Section 8.3</u> of the PSA, the PSA may be amended by a written agreement duly executed by each of the Parties thereto; and

**WHEREAS**, the Sellers and the Purchasers desire to enter into this Amendment in order to amend the PSA in the manner set forth herein.

**Now, Therefore**, in consideration of the representations, warranties, covenants and agreements herein made and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

**Agreement**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. **<u>Amendment to PSA</u>**. The PSA is hereby amended as follows (with Section references below in this Section 1 being the section of the PSA that is being amended):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Section 1.1(b)</u> is hereby amended and restated in its entirety as follows:

"The aggregate consideration for the purchase and sale of the ORRI shall be an amount in cash equal to $13,675,000 (the "**<u>ORRI Purchase Price</u>**")."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Section 2.3(a)</u> and <u>Section 2.4(c)</u> are hereby amended to provide that the effective date of the conveyance referenced by each section be the first day of the month during which the Closing Date occurs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. **<u>Effect on the PSA</u>**. Except as specifically amended by this Amendment, the PSA shall remain in full force and effect, and the PSA, as amended by this Amendment, is hereby ratified and confirmed in all respects. From and after the Amendment 4 Effective Date, each reference in the PSA to "this Agreement," "herein," "hereof," "hereunder" or words of similar import, or to any provision of the PSA, as the case may be, shall be deemed to refer to the PSA or such provision as amended by this Amendment, unless the context otherwise requires.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. **<u>Miscellaneous</u>**. The provisions of <u>Sections 8.2</u> (Governing Law; Submission to Jurisdiction; Consent to Service of Process), <u>8.3</u> (Entire Agreement; Amendments and Waivers), <u>8.4</u> (Notices), <u>8.5</u> (Severability), <u>8.6</u> (Binding Effect; Assignment), <u>8.7</u> (Non-Recourse), <u>8.8</u> (Counterparts), <u>8.9</u> (Exhibits), <u>8.10</u> (Specific Performance) and <u>8.11</u> (Waiver of Jury Trial) of the PSA are incorporated by reference into this Amendment *mutatis mutandis*.

[*Remainder of Page Intentionally Left Blank; Signature Pages Follow*]

IN WITNESS WHEREOF, the Parties have executed this Agreement on the dates indicated below, effective as of the Amendment 4 Effective Date.

---

| | |
|:---|:---|
| **<u>THE SELLERS</u>:** | **<u>THE SELLERS</u>:** |
| **pogo royalty, LLC** | **pogo royalty, LLC** |
| By: | /s/ Kirk Pogoloff |
| Name: | Kirk Pogoloff |
| Title: | Manager |
| **CIC POGO LP** | **CIC POGO LP** |
| By: | cic iv gp, llc |
| Its: | General Partner |
| By: | /s/ Bayard Friedman |
| Name: | Bayard Friedman |
| Title: | Manager |
| **DENCO Resources, LLC** | **DENCO Resources, LLC** |
| By: | /s/ John L. Denman, Jr. |
| Name: | John L. Denman, Jr. |
| Title: | President |
| **pogo resources management, LLC** | **pogo resources management, LLC** |
| By: | /s/ Kirk Pogoloff |
| Name: | Kirk Pogoloff |
| Title: | Manager |
| **4400 holdings, LLC** | **4400 holdings, LLC** |
| By: | /s/ Kirk Pogoloff |
| Name: | Kirk Pogoloff |
| Title: | Manager |

---

[*Signature Page to Amendment No. 4 to Purchase, Sale, Termination and Exchange Agreement*]

---

| | |
|:---|:---|
| **<u>THE PURCHASERS</u>:** | **<u>THE PURCHASERS</u>:** |
| **EON RESOURCES INC.** | **EON RESOURCES INC.** |
| By: | /s/ Mitchell B. Trotter |
| Name: | Mitchell B. Trotter |
| Title: | President and Chief Financial Officer |
| **HNRA UPSTREAM, LLC** | **HNRA UPSTREAM, LLC** |
| By: | /s/ Mitchell B. Trotter |
| Name: | Mitchell B. Trotter |
| Title: | President and Chief Financial Officer |
| **HNRA ROYALTIES, LLC** | **HNRA ROYALTIES, LLC** |
| By: | /s/ Mitchell B. Trotter |
| Name: | Mitchell B. Trotter |
| Title: | President and Chief Financial Officer |
| **HNRA PARNTER, INC.** | **HNRA PARNTER, INC.** |
| By: | /s/ Mitchell B. Trotter |
| Name: | Mitchell B. Trotter |
| Title: | President and Chief Financial Officer |

---

[*Signature Page to Amendment No. 4 to Purchase, Sale, Termination and Exchange Agreement*]

## Exhibit 10.1

**Exhibit 10.1**

**CERTAIN INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED.**

**[\*\*\*] INDICATES THAT INFORMATION HAS BEEN REDACTED**

**CONVEYANCE OF OVERRIDING ROYALTY INTEREST**

This Conveyance of Overriding Royalty Interest (this "***Conveyance***") is made effective as of 7:00 A.M. Mountain Time on September 9, 2025 (the "***Effective Time***"), from LH Operating, LLC, a Texas limited liability company, with offices at 3730 Kirby Drive, Suite 180, Houston, Texas 77098 ("***Grantor***"), in favor of [\*\*\*] ("***Grantee***"). This Conveyance is made in conjunction with that certain Agreement Regarding Overriding Royalty Interest dated effective as of the Effective Time, by and between Grantor and Grantee (the "***Override Agreement***"). Capitalized terms not otherwise defined herein shall have the meanings set forth in the Override Agreement.

For and in consideration of Ten and NO/100 Dollars ($10.00) and other good and valuable consideration to Grantor in hand paid by Grantee, the receipt and sufficiency of which are hereby acknowledged by Grantor, Grantor hereby GRANTS, BARGAINS, SELLS, CONVEYS, ASSIGNS, TRANSFERS, SETS OVER, and DELIVERS unto Grantee and its successors and assigns, effective as of the Effective Time, subject to the terms hereof, an overriding royalty interest in and to the Subject Interests, the Subject Hydrocarbons, and the Subject Wells equal to the Specified Percentage of all Subject Hydrocarbons produced from and after the Effective Time, together with all and singular the rights and appurtenances thereto in anywise belonging, subject to proportionate reduction as provided below (the "***ORR Interest***"); *provided, however*,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) if the Subject Interests include less than the entirety of the working interest in any Hydrocarbon lease (a "***Lease***") or portion thereof, or should any such Lease not cover the entirety of the fee mineral estate in the lands described therein, the associated portion of the ORR Interest shall be proportionately reduced from the gross fifteen percent (15%) of all Hydrocarbons produced and saved from the lands subject to such Lease in accordance with the ratio that the net interest of Grantor in the Lease bears to the entire working interest therein or the net interest in the fee mineral estate in the lands covered by the Lease bears to the entire fee mineral estate therein; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) this overriding royalty attaches to renewals, extensions, and top leases only to the extent covering the same lands within the Subject Interests and the same depths actually burdened, and then only in proportion to the interest acquired by Grantor, with full proportionate reduction.

As used herein, the following definitions apply:

"***Farmout Agreement***" means that certain Joint Development, Leasehold Purchase, and Area of Mutual Interest Agreement dated September 9, 2025, between Grantor and Virtus Energy Assets, LLC.

"***Recompleted***" means the deepening, sidetracking, re-completion or perforation of any Subject Well listed on <u>Exhibit B</u> after the Effective Time that is completed by Virtus Energy Assets, LLC or its Affiliates pursuant to the terms of the Farmout Agreement as a well producing or capable of producing Subject Hydrocarbons from the San Andres Formation.

"***San Andres Formation***" means the stratigraphic equivalent of 3,314 feet to 4,811' feet measured depth as seen in the spectral gamma ray log, run on June 27, 2010, by Halliburton in the NFE Federal No. 10 well, API 30-015-37360 located in Section 8, Township 17S Range 31E, N.M.P.M, Eddy County, New Mexico.

"***Specified Percentage***" means:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) fifteen percent (15%) as to all interests in the Subject Interests as to depths and formations that are from the surface of the earth to the top of and not included in the San Andres Formation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) fifteen percent (15%) as to all interests in the Subject Wells that are spud or completed prior to the Effective Time, including, but not limited to any Subject Wells completed as to any portion of the San Andres Formation and any interests in any and all Subject Interests that are allocated to, or pooled, unitized or communitized with, the wellbore of such Subject Wells (such existing Subject Wells and interests, the "***Existing Subject Wells***"); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) five percent (5%) as to any interests in the Subject Interests to the extent constituting depths and formations that are included within the San Andres Formation, SAVE and EXCEPT any Existing Subject Wells and any Subject Interests to the extent allocated to, or pooled, unitized or communitized with, the wellbore of any Existing Subject Well;

 

*provided, however*:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) in the event that any Existing Subject Well is Recompleted after the Effective Date as a well producing or capable of producing Subject Hydrocarbons from the San Andres Formation, then effective as of the date of first production thereof after such Recompletion the Specified Percentage as to the portion of the Subject Interests that are included within the San Andres Formation and that are allocated to, or pooled, unitized or communitized with, the wellbore of such Recompleted Existing Subject Well shall be decreased from fifteen percent (15%) to five percent (5%);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) with respect to any as to any interests in the Subject Interests to the extent constituting depths and formations that are included within the San Andres Formation (excluding any Subject Interests to the extent allocated to, or pooled, unitized or communitized with, the wellbore of any Subject Well existing at the applicable date of re-assignment, re-conveyance or transfer) that are re-assigned, re-conveyed or transferred to Grantor pursuant to the terms of Section 4.4(a) of the Farmout Agreement, then effective as of the date such Subject Interests are required to be re-assigned, re-conveyed or transferred to Grantor thereunder, the Specified Percentage with respect to such Subject Interests shall be increased from five percent (5%) to ten percent (10%); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) in the event of a Funding Deficiency, the Specified Percentage shall be increased as provided in Section 1.1(c) of the Override Agreement.

"***Subject Hydrocarbons***" means all Hydrocarbons in and under and that may be produced, saved, and sold from and attributable to the Subject Interests, provided that (a) there shall not be included in the Subject Hydrocarbons (i) any Hydrocarbons attributable to non-consent operations conducted with respect to the Subject Interests (or any portions thereof) as to which Grantor shall be a non-consenting party that are dedicated to the recoupment or reimbursement of costs and expenses of the consenting party or parties by the terms of the relevant operating agreement, unit agreement, contract for development, or other instrument providing for such non-consent operations (including any interest, penalty, or other amounts related thereto), or (ii) any Hydrocarbons unavoidably lost in production or used by Grantor for production operations (including, without limitation, fuel or secondary or tertiary recovery) conducted solely for the purpose of producing Subject Hydrocarbons, and (b) there shall be included in the Subject Hydrocarbons any Hydrocarbons attributable to non-consent operations conducted with respect to the Subject Interests (or any portions thereof) as to which Grantor shall be a non-consenting party that are produced, saved, and sold from and attributable to the Subject Interests from and after the recoupment or reimbursement of costs and expenses (including any interest, penalty, or other amounts related thereto) of the consenting party or parties by the terms of the relevant operating agreement, unit agreement, contract agreement, contract development, or other instruments providing for such non-consent operations.

"***Subject Interests***" means (a) each kind and character of right, title, claim, or interest (collectively the "***rights***"), that Grantor has or owns in the Leases held by Grantor as of the date hereof, including the Leases described on <u>Exhibit A</u>, attached hereto, (b) any leasehold interests of Grantor in any other leases of Hydrocarbons derived from the pooling or unitization of the foregoing Leases (or portions thereof) with other leases of Hydrocarbons, (c) any rights of Grantor in respect of any of the lands covered by the Subject Interests whether arising under any unitization or pooling order, an operating agreement, a division order, or a transfer order, or under or by virtue of any other type of claim or title, legal or equitable, recorded or unrecorded, (d) any Secondary Arrangements or interests therein, and (e) in each of the foregoing cases, all as such rights shall be (i) enlarged or diminished by virtue of the pooling and unitization provisions of this Conveyance or any terms and provisions of the Override Agreement, and (ii) enlarged by the discharge of any payments out of production or by the removal of any charges or encumbrances to which any of such rights are subject (provided that such removal is pursuant to the express terms of the instrument that created such charge or encumbrance).

"***Subject Wells***" means the Hydrocarbon wells that are now or hereafter located on the Subject Interests, including the wells listed on <u>Exhibit B**.**</u>

TO HAVE AND TO HOLD all and singular the ORR Interest unto Grantee and its successors and assigns forever, and Grantor does hereby bind Grantor and Grantor's successors and assigns to warrant and forever defend, all and singular, the ORR Interest unto Grantee and its successors and assigns against all Persons whomsoever claiming or to claim the same, or any part thereof, when such claims are made by, through or under Grantor, but not otherwise.

Subject to the terms of the Override Agreement, any payments in respect of the ORR Interest shall be free and clear of (i) all drilling, completing, developing, and operating costs and expenses, and (ii) all post-production costs, including the costs of compression, processing, gathering, and treating to make the production marketable and the costs of marketing and transportation (collectively, "***Post-Production Costs***") incurred or charged by Grantor or any of its Affiliates with respect to Subject Hydrocarbons prior to the Point of Sale of such Subject Hydrocarbons. For purposes of this Conveyance the "***Point of Sale***" shall be the place where title and risk of loss to the Subject Hydrocarbons fully transfers (with Grantor and its Affiliates having no further rights or interest in or to the Subject Hydrocarbons, contingent or otherwise) to a Third Party purchaser of the Subject Hydrocarbons (such Third Party, the "***Purchaser***"). The ORR Interest shall be paid upon the gross proceeds actually received by Grantor from the Purchaser for the sale of the applicable Subject Hydrocarbons as of the Point of Sale (net of any treating, gathering, transporting and other costs incurred and paid by Purchaser from and after the Point of Sale to third parties un-Affiliated with Purchaser or Grantor), and shall bear its proportionate share of all severance, excise, production, and similar taxes.

Grantor shall have the right to pool or unitize all or any of the Subject Interests as to any one or more of the formations or horizons thereunder, when, in the reasonable judgment of Grantor, it is necessary or advisable to do so in order to form a drilling or proration unit to facilitate the orderly development of the relevant Subject Interests or to comply with any Governmental Requirement relating to the spacing of wells or proration of the production therefrom. Any exercise of such pooling right shall be in good faith, and the portion of the ORR Interest derived from a Subject Interest shall not be pooled in a manner that differs from the manner in which the remainder of the Subject Interest or the royalty interests of the lessors of the applicable Leases are pooled; provided that in the event of pooling or unitization, this overriding royalty burdens only the portion of production allocable to the Subject Interests and the depths actually burdened, and is subject to proportionate reduction based on Grantor's actual working interest attributable to the Subject Interests included in such pooled/unitized area.

This Conveyance is made subject to the Override Agreement. In the event of a conflict between the Override Agreement and this Conveyance, the terms and provisions of the Override Agreement shall control to the extent and only to the extent of the conflict. The terms, provisions, and obligations set forth in the Override Agreement shall survive the execution of this Conveyance and shall not merge with or into this Conveyance.

The ORR Interest does not include any right, title, or interest in and to any personal property, fixtures, or equipment and is exclusively an overriding royalty interest in and to the Subject Interests, the Subject Hydrocarbons, and the Subject Wells.

In addition to filing the Conveyance, Grantor and Grantee shall execute and file with appropriate authorities, whether federal, state, or local, all forms or instruments required by applicable law to effectuate the conveyance contemplated by the Conveyance and this Agreement. Said instruments shall be deemed to contain all of the exceptions, reservations, rights, titles, and privileges set forth in the Conveyance and this Agreement as fully as though the same were set forth in each such instrument. The interests conveyed by such separate assignments are the same and not in addition to the interests conveyed in the Conveyance.

[*Signature Pages Follow*]

IN WITNESS WHEREOF, this Conveyance is dated as of the parties' respective acknowledgments below, but shall be effective for all purposes as of the Effective Time.

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| | |
|:---|:---|
| **GRANTOR:** | **GRANTOR:** |
| **LH OPERATING, LLC** | **LH OPERATING, LLC** |
| **By:** | /s/ Mitchell B. Trotter |
|  | **Mitchell B. Trotter, CFO** |

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STATE OF TEXAS § <br> § <br> COUNTY OF DALLAS §

The foregoing instrument was acknowledged before me on this _____ day of __________, 2025, by Mitchell B. Trotter as CFO of LH Operating, LLC, on behalf of said limited liability company.

  <br> Notary Public in and for the State of Texas

[Signature Page to Conveyance of Overriding Royalty Interest]

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| |
|:---|
| **GRANTEE:** |
| **[\*\*\*]** |
| [\*\*\*] |
| [\*\*\*] |

---

STATE OF FLORIDA § <br> § <br> COUNTY OF MIAMI-DADE §

The foregoing instrument was acknowledged before me on this 9<sup>th</sup> day of September, 2025, by [\*\*\*] as [\*\*\*] of [\*\*\*], on behalf of said limited liability company.

<u>[\*\*\*]</u> <br> Notary Public in and for the State of Florida

[Signature Page to Conveyance of Overriding Royalty Interest]

## Exhibit 10.2

**Exhibit 10.2**

**CERTAIN INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED.**

**[\*\*\*] INDICATES THAT INFORMATION HAS BEEN REDACTED**

**AGREEMENT REGARDING OVERRIDING ROYALTY INTEREST**

This Agreement Regarding Overriding Royalty Interest (this "***Agreement***") is made effective as of 7:00 A.M. Mountain Time September 9, 2025 (the "***Effective Time***"), by and between LH Operating, LLC, a Texas limited liability company, with offices at 3730 Kirby Drive, Suite 180, Houston, Texas 77098 ("***Grantor***"), and [\*\*\*] ("***Grantee***").

**RECITALS**

WHEREAS, Assignor is the owner of the Subject Interests, Subject Wells and Subject Hydrocarbons (as defined below);

WHEREAS, as of the Effective Time and for other good and valuable consideration (as described herein), the receipt and sufficiency of which are hereby acknowledged, Grantor, subject to the other terms and provisions hereof, hereby GRANTS, BARGAINS, SELLS, CONVEYS, ASSIGNS, TRANSFERS AND DELIVERS unto Grantee, subject to the terms, exceptions and reservations herein contained, including all rights, estates, powers and privileges appurtenant thereto, with respect to the Subject Interest, the ORR Interest; and

WHEREAS, reference is made to that certain Conveyance of Overriding Royalty Interest between Grantor and Grantee executed in conjunction herewith and made effective as of the Effective Time (the "***Conveyance***"). Capitalized terms used herein shall have the meanings set forth in <u>Exhibit A</u>, attached hereto, provided that capitalized terms used but not defined herein shall have the meanings set forth in the Conveyance.

NOW, THEREFORE, BE IT RESOLVED, that for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Grantor and Grantee hereby agree as follows:

**ARTICLE 1<br> PAYMENT**

Section 1.1 **<u>Payment of ORR Interest</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Grantor shall disburse to Grantee, within sixty (60) days after the Grantor's receipt of payment for Subject Hydrocarbons (the "***Due Date***") the amounts payable with respect to the ORR Interest in immediately available funds. Until disbursed to Grantee, Grantor will not commingle, spend, pledge, dispose of, or encumber all proceeds of the Subject Hydrocarbons attributable to the ORR Interest. Any amount not paid by Grantor to Grantee with respect to the ORR Interest by its Due Date shall bear, and Grantor hereby agrees to pay, interest at a rate of twelve percent (12%), compounded monthly, from the Due Date until such amount has been paid.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Subject to the terms hereof, any payments in respect of the ORR Interest shall be free and clear of (i) all drilling, completing, developing, and operating costs and expenses, and (ii) all post-production costs, including the costs of compression, processing, gathering, and treating to make the production marketable and the costs of marketing and transportation (collectively, "***Post-Production Costs***") incurred or charged by Grantor or any of its Affiliates with respect to Subject Hydrocarbons prior to the Point of Sale of such Subject Hydrocarbons. For purposes of this Agreement the "***Point of Sale***" shall be the place where title and risk of loss to the Subject Hydrocarbons fully transfers (with Grantor and its Affiliates having no further rights or interest in or to the Subject Hydrocarbons, contingent or otherwise) to a Third Party purchaser of the Subject Hydrocarbons (such Third Party, the "***Purchaser***"). The ORR Interest shall be paid upon the gross proceeds actually received by Grantor from the Purchaser for the sale of the applicable Subject Hydrocarbons as of the Point of Sale (net of any treating, gathering, transporting and other costs incurred and paid by Purchaser from and after the Point of Sale to third parties un-Affiliated with Purchaser or Grantor), and shall bear its proportionate share of all severance, excise, production, and similar taxes. For example:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) If the Point of Sale to any Gas is at the well, and the price paid by Purchaser to Grantor under the applicable sales contract is calculated by Purchaser by taking (A) an index price of $4.00/MMBtu and subtracting (B) treating, gathering, transporting and other costs incurred and paid by Purchaser from and after the Point of Sale to third parties un-Affiliated with Purchaser or Grantor, for a Point of Sale price paid by Purchaser to Grantor of $3.70/MMBtu, then the payment to Grantee for the applicable ORR Interest shall be calculated as the applicable Specified Percentage of $3.70/MMBtu.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) If the Point of Sale to any Gas is downstream of the well, and the price paid by Purchaser to Grantor under the applicable sales contract is $4.00/MMBtu at the Point of Sale, and Grantor incurred $0.30/MMBtu in other costs, including costs to treat, gather and transport such Gas to the Point of Sale, then the payment to Grantee for the applicable ORR Interest shall be calculated as the applicable Specified Percentage of $4.00/MMBtu.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) If (A) any Gas produced from any well is utilized as fuel or otherwise lost or unaccounted for prior to any Point of Sale and (B) the volume weighted average price paid by all Purchasers to Grantor under the applicable sales contracts for all Gas purchased that month is $4.00/MMBtu at the Point of Sale, then the payment to Grantee for the applicable ORR Interest with respect to such Gas utilized as fuel or otherwise lost or unaccounted for prior to any Point of Sale shall be calculated as the applicable Specified Percentage of $4.00/MMBtu.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Commencing on January 1, 2026 and continuing through and including December 31, 2028 (each such calendar year, an "***Annual Commitment Period***"), Grantor shall fund, or cause to be funded, petroleum exploration, development and production activities that constitute "***Qualified Project Expenditures***" in an amount not less than Three Million Dollars (US $3,000,000) in each Annual Commitment Period (the "***Annual Capital Commitment***"). If, during any Annual Commitment Period, the aggregate Qualified Project Expenditures exceed the Annual Capital Commitment, the amount of such excess (the "***Banked Commitment Credit***") shall be credited toward satisfaction of the Annual Capital Commitment for the immediately succeeding Annual Commitment Period only, and any portion of the Banked Commitment Credit not applied during such succeeding period shall automatically expire without further force or effect. For the avoidance of doubt, no Banked Commitment Credit may be applied retroactively to any prior period, nor may any Banked Commitment Credit be carried forward more than one (1) year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Subject to the foregoing <u>Section 1.1(c)</u>, if in any Annual Commitment Period the sum of Grantor's Qualified Project Expenditures *plus* any available Banked Commitment Credit is *less* than the Annual Capital Commitment (such shortfall, the "***Funding Deficiency***"), the Specified Percentage shall automatically and permanently increase, effective as of the first day following the end of the applicable Annual Commitment Period in which the Funding Deficiency occurs, by an amount (expressed in percentage points) equal to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) (1.0 *minus* (Qualified Project Expenditures *divided by* Annual Capital Commitment)) *multiplied by* 0.02. For the avoidance of doubt and for illustrative purposes only, see <u>Annex A</u> for an example of such calculation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) For the avoidance of doubt, and notwithstanding anything herein contained herein the contrary, any increase to the Specified Percentage shall be cumulative and irrevocable, shall apply to all of the Subject Hydrocarbons produced and saved from and after Effective Date, and shall not be subject to reduction on account of Grantor's performance in any subsequent Annual Commitment Period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) **After-Acquired Interests.** In the event that after the Effective Time, Grantor or any Affiliate of Grantor acquires any right, title, claim, or interest (collectively the "***rights***" in and to formations and depths from the surface of the earth through the San Andres Formation in and to (a) any lands described in any of the Subject Interests (whether or not such rights are burdened by the Subject Leases), including any and all rights to any Hydrocarbon wells, (b) any leasehold interests derived from the pooling or unitization of the Subject Interests or any leases described in subpart (a) of this definitions (or portions thereof) with other leases of Hydrocarbons, (c) any of the lands covered by the Subject Interests whether arising under any unitization or pooling order, an operating agreement, a division order, or a transfer order, or under or by virtue of any other type of claim or title, legal or equitable, recorded or unrecorded, (d) any Secondary Arrangements or interests therein ("***Subsequently Acquired Interests***"), then Grantor shall, and shall cause its applicable Affiliates to execute and deliver to Grantee (i) a conveyance of overriding royalty interests substantially in the form of the Conveyance, with such Subsequently Acquired Interests being the only rights listed on Exhibit A and Exhibit B of such conveyance and (ii) an agreement regarding overriding royalty interest substantially in the form of this Agreement, with the definition of the "Conveyance" therein being modified to reference the applicable conveyance referenced in the immediately foregoing subpart (i) of this paragraph.

Section 1.2 **<u>Statements</u>**. In connection with each payment by Grantor, or the purchaser of production, to Grantee of proceeds attributable to the ORR Interest, Grantor shall include or cause the purchaser of production to include a statement of proceeds, deductions, and other calculations pertaining to such payment containing substantially similar information to the statements delivered by Grantor to royalty owners in the ordinary course of business in connection with payment of royalties, including written notification to Grantee of the date of initial production for each new Subject Well. Grantor shall maintain true and correct books, records, and accounts of (i) all transactions required or permitted by the Conveyance and this Agreement and (ii) the financial information necessary to properly reflect such transactions and in each case shall retain such records for a period of four years from and after the date of such transactions. Upon at least thirty (30) days' prior written notice to Grantor, at Grantee's sole cost and expense, Grantor shall give Grantee reasonable access in Grantor's office during Grantor's normal business hours to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) all Subject Well production data in the possession of Grantor, as to the Leases and the Subject Wells; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) all reasonably appropriate records pertaining to the production, transportation, marketing and sales of the Subject Hydrocarbons from the Leases and Subject Wells and the determination of the Subject Hydrocarbons and the ORR Interest and such other information as Grantee reasonably requests to verify the calculation of the Subject Interest and the ORR Interest.

Section 1.3 **<u>Overpayment; Past Due Payments</u>**. If Grantor ever pays Grantee more than the amount of money then due and payable to Grantee with respect to the ORR Interest, Grantor may at any time during the one (1) year period following the overpayment retain out of the amount which would otherwise be payable pursuant to <u>Section 1.1</u> for its own account an amount equal to the overpayment, and in the event that Grantor fails to exercise its right to retain said amount, Grantor's right to recover such overpayment shall cease and be of no further force and effect. Grantor shall give Grantee written notice of any underpayment or overpayment with respect to the ORR Interest, together with supporting documentation, computations, and data, promptly after obtaining knowledge of such underpayment or overpayment. Underpayments shall bear interest in accordance with <u>Section 1.1</u>.

Section 1.4 **<u>Option to Take In-Kind</u>**. Notwithstanding anything to the contrary set forth in this Agreement or in the Conveyance, on sixty (60) days' notice to Grantor, Grantee shall have the right and option to take in kind or separately dispose of the proportionate share of all Subject Hydrocarbons derived from or attributable to the ORR Interest, provided that any extra expenditure incurred by Grantee in such taking in kind or separate disposition by shall be borne by Grantee, and Grantee shall bear its proportionate share of all severance, excise, production, and similar taxes with respect thereto.

Section 1.5 **<u>Certain Affidavits and Stipulations</u>**. In the event of the occurrence of (a) any Funding Deficiency, (b) any Recompletion of any Existing Well after the Effective Date as a well producing or capable of producing Subject Hydrocarbons from the San Andres Formation and/or (c) the re-assignment, re-conveyance or transfer of any Subject Interests to Grantor pursuant to the terms of Section 4.4(a) of the Farmout Agreement, then Grantor and Grantee shall promptly execute, deliver and record an affidavit in the applicable counties where the Subject Interests are located evidencing and putting third parties on notice of (i) the occurrence thereof, (ii) the increase or increase, as applicable to the Specified Percentage as to the Subject Interests and Subject Wells affected thereby and (iii) the effective date of such occurrence.

**ARTICLE 2<br> OPERATION OF THE SUBJECT INTERESTS**

Section 2.1 **<u>Operations</u>**. It is the express intent of Grantor and Grantee that the ORR Interest shall constitute (and the Conveyance shall conclusively be construed for all purposes as creating) a non-operating, non-cost bearing mineral right in the nature of a royalty interest for all purposes, free of all costs, expenses, and fees associated with the production of the Subject Hydrocarbons and free of all Post-Production Costs. Without limitation of the generality of the immediately preceding sentence, Grantor and Grantee acknowledge that Grantee has no right or power to participate in the selection of a drilling contractor, to propose the drilling of a well, to commence or shut down production, or to take over operations; *provided*, *however*, for clarity, this <u>Section 2.1</u> shall not permit any release, surrender or abandonment for the primary purpose or intent of causing or effecting a termination of the ORR Interest; and *provided*, *further*, Grantor shall have no charge, management or control of or with respect to the ORR Interest itself, but instead such charge, management and control with respect to the ORR Interest will be vested solely in Grantee. Grantor (subject to the terms and provisions of any applicable operating agreements and the other provisions of this Agreement or the Conveyance): (x) will operate, maintain and develop any Leases or any Subject Wells operated by Grantor, to the extent applicable, or its Affiliates, or cause any Leases or any Subject Wells operated by Grantor, to the extent applicable, or its Affiliates to be operated, maintained and developed in accordance with the Reasonably Prudent Operator Standard and (y) will make elections under the Leases, operating agreement, unit agreement, contract for development and other similar instrument or agreement (including all determinations with respect to pooling and unitization, elections concerning abandonment of any Subject Well or release of any Lease or any Subject Well) in accordance with the Reasonably Prudent Operator Standard. As to those Leases and Wells for which Assignor is not the operator, Assignor shall vote its working interests and any other voting interests and exercise its rights with respect thereto under applicable operating or unit operating agreements in accordance with the Reasonably Prudent Operator Standard. Grantor and Grantee hereby expressly negate any intent to create (and the Conveyance and this Agreement shall never be construed as creating) a mining or other partnership or joint venture or other relationship subjecting Grantor and Grantee to joint liability. Nothing contained in the Conveyance or this Agreement shall be deemed to prevent or restrict Grantor from electing not to participate in any operations that are to be conducted under the terms of any operating agreement, unit operating agreement, contract for development, or similar instrument affecting or pertaining to the Subject Interests and permitting consenting parties to conduct non-consent operations thereon.

Section 2.2 **<u>[Intentionally Remitted.]</u>**

Section 2.3 **<u>Marketing</u>**. Subject to Grantee's rights under <u>Section 1.4</u>, (a) as between Grantor and Grantee, Grantor exercise due diligence and use all commercially reasonably efforts to, and shall have charge and control to, the marketing of all Subject Hydrocarbons, including those attributable to the ORR Interest, (b) Grantor shall market the Subject Hydrocarbons attributable to the ORR Interest in the same manner that it markets its share of the Subject Hydrocarbons, and (c) Grantor shall not be entitled to charge any fee for marketing the Subject Hydrocarbons attributable to the ORR Interest. With respect to the marketing of Subject Hydrocarbons attributable to the ORR Interest, Grantor shall have a duty of good faith and fair dealing, and shall undertake commercially reasonable efforts, but Grantor shall not have a duty to obtain a net price for Subject Hydrocarbons attributable to the ORR Interest in excess of the net price Grantor obtains for its own production of Subject Hydrocarbons; *provided*, that (i) no sale of any Subject Hydrocarbons shall (A) provide for payment for production to be paid in advance of such production occurring (including "take or pay" provisions), (B) allow the purchaser to defer payments for production for more than three (3) months after the month in which such production is sold and delivered to such purchaser (excluding disputed payments, delays in connection with initial payments for production due to normal industry delays for division order opinions, division orders or other matters) or (C) provide for payments to be made other than by wire transfers or other similar electronic means for the immediate payment of money and (ii) at any time that any Subject Hydrocarbons are marketed by a Person other than Grantor or an Affiliate of Grantor, the Reasonably Prudent Operator Standard shall apply to such marketing by Grantor.

Section 2.4 **<u>Secondary Arrangements</u>**. Grantor shall have the right, without the consent of Grantee, to enter into or acquire an interest in any renewal, extension, modification, amendment, supplement, new lease, replacement lease, or other similar arrangement that covers or relates to a Subject Interest or the interests from which the Subject Interests are derived (including, without limitation, the mineral estate covered by a Subject Interest consisting of a Lease) (a "***Secondary Arrangement***"); *provided* that (i) the ORR Interest shall apply to each and every Secondary Arrangement to the extent the ORR Interest had previously applied as conveyed to or acquired, directly or indirectly, by Grantor within two (2) years after the date of alleged termination (whether in whole or in part) of the Subject Interest associated with the Secondary Arrangement and (ii) Grantor will provide written notice to Grantee and cause a conveyance in the form substantially similar to the Conveyance to be executed by Grantor or its Affiliate, as applicable, delivered to Grantee and filed of record in all appropriate counties where the properties subject to such replacement lease is located, which conveyance shall convey to Grantee an ORR Interest in the applicable portions of the replacement Lease equal to the existing percentage of the ORR Interest. In the event that an Affiliate of Grantor acquires an interest that would qualify as a Secondary Arrangement if it had been acquired by Grantor, then, for purposes of this Conveyance, such interest shall be deemed a Secondary Arrangement of Grantor, and Grantor shall cause such Affiliate to assign and Transfer all rights and obligations related to such Secondary Arrangement to Grantor effective as of the time the interest was acquired by such Affiliate. No Secondary Arrangement (including, without limitation, the terms and provisions of any renewals, extensions, modifications, amendments, supplements, or other arrangements) shall adversely affect any of Grantee's rights hereunder, including, without limitation, the computation or method of payment applicable to the ORR Interest, except to the extent that Grantor's rights are proportionately adversely affected. Grantor shall furnish Grantee with written notice of any Secondary Arrangement within twenty (20) days from the acquisition thereof, which notice shall include a copy of all documents and instruments consisting of or relating to the Secondary Arrangement. In the event any Subject Interest that will expire or terminate in the absence of a Secondary Arrangement and Grantor does not intend to enter into a Secondary Arrangement, Grantor shall give Grantee written notice (such notice, a "***Notice of Non-Renewal***") no later than twenty (20) days prior to the date upon which such Subject Interest will expire or terminate. Subject to any Third Party rights of consents of preferential rights, within twenty (20) days after receiving any Notice of Non-Renewal, Grantee may elect, by written notice to Grantor no later than ten (10) days prior to the date upon which such Subject Interest will expire or terminate, to acquire the Subject Interests described in the applicable Notice of Non-Renewal. If Grantee elects to acquire any Subject Interests described in a Notice of Non-Renewal, Grantor, within five (5) days of Grantee's written election, shall execute and deliver to Grantee a conveyance of such Subject Interests with a special warranty of title. If Grantee fails to exercise its right to acquire a Subject Interest in response to a Notice of Non-Renewal, Grantee shall be deemed to have elected not to acquire the Subject Interest. In the event Grantee acquires the Subject Interest, Grantee shall assume and indemnify and hold Grantor harmless from lease obligations and plugging and abandonment responsibility for applicable wells.

Section 2.5 **<u>Abandonment</u>**. Grantor shall have the right to release, surrender, or abandon any Subject Interest or any portion thereof, provided, however, that Grantor shall give Grantee written notice (such notice, a "***Notice of Abandonment***") no later than thirty (30) days prior to any such proposed release, surrender, or abandonment. Subject to any Third Party rights of consents of preferential rights, within twenty (20) days after receiving any Notice of Abandonment, Grantee may elect, by written notice to Grantor, to acquire the Subject Interests described in the applicable Notice of Abandonment. If Grantee elects to acquire any Subject Interests described in a Notice of Abandonment, Grantor shall, within fifteen (15) days of Grantee's election, execute and deliver to Grantee a conveyance of such Subject Interests with a special warranty of title. If Grantee fails to exercise its right to acquire a Subject Interest in response to Notice of Abandonment, Grantee shall be deemed to have elected not to acquire the Subject Interest. Grantor shall have no duty, express or implied, to maintain any of the Subject Interests in force and effect. In the event Grantee acquires the Subject Interest, Grantee shall assume and indemnify and hold Grantor harmless from lease obligations and plugging and abandonment responsibility for applicable wells.

**ARTICLE 3<br> TRANSFERS**

Section 3.1 **<u>Assignment by Grantor</u>**. Grantor shall not Transfer any of the Subject Interests or assign or delegate Grantor's rights or obligations with respect to the ORR Interest without the express prior written consent of Grantee (such consent not to be unreasonably withheld, conditioned or delayed). In the event Grantor makes any Transfer of any Subject Interests, the ORR Interest shall continue to burden the Subject Interests, and Grantee shall not be entitled to any portion of the consideration payable to Grantor in connection with such Transfer. Any Transfer of a Subject Interest made without the express prior written consent shall be null and void *ab initio*. It is agreed that Grantor shall assign certain right, title and interest in, to and under the Subject Interests to Virtus Energy Partners, LLC and/or its affiliates provided the ORRI Interest shall not be affected by such assignment and Virtus Energy Partners, LLC shall take subject to and in assumption of its proportionate responsibility for the ORR Interest.

Section 3.2 **<u>Assignment by Grantee</u>**. Grantee may Transfer all or any undivided interest in the ORR Interest (or any part thereof) without the consent of Grantor. No Transfer of the ORR Interest or any portion thereof shall be binding on Grantor until notice (consisting of a copy of the instrument evidencing such assignment or transfer) thereof shall have been furnished to Grantor. Notwithstanding the foregoing, if Grantee proposes to sell the ORR Interest to any Third Party with a date of Transfer within two (2) years from the Effective Time, Grantee shall have the right of first offer to purchase the ORR Interest.

**ARTICLE 4<br> OWNERSHIP OF PROPERTY; LIABILITY OF GRANTEE;<br> NO RIGHT OF OPERATIONS BY GRANTEE**

Section 4.1 **<u>Ownership of Certain Property</u>**. The ORR Interest does not include any right, title, or interest in and to any personal property, fixtures, or equipment and is exclusively an overriding royalty interest in and to the Subject Interests, the Subject Hydrocarbons, and the Subject Wells.

Section 4.2 **<u>No Personal Liability; Indemnity</u>**. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THE CONVEYANCE OR THIS AGREEMENT, GRANTEE SHALL NEVER BE RESPONSIBLE OR LIABLE FOR PAYMENT OF ANY PART OF THE COSTS, EXPENSES OR LIABILITIES INCURRED IN CONNECTION WITH THE EXPLORING, DRILLING, EQUIPPING, TESTING, DEVELOPING, OPERATING, PRODUCING, MAINTAINING, OR PLUGGING AND ABANDONMENT OF THE SUBJECT INTERESTS, THE SUBJECT HYDROCARBONS, THE SUBJECT WELLS, OR THE LANDS ASSOCIATED THEREWITH, OR THE STORING, HANDLING, TRANSPORTING, TREATING, OR MARKETING OF PRODUCTION THEREFROM EXCEPT TO THE EXTENT THAT GRANTEE TAKES PRODUCTION IN KIND WHEN GRANTEE SHALL BE LIABLE FOR SAME APPLICABLE TO ITS PRODUCTION TAKEN IN KIND. EXCEPT AS TO PRODUCTION TAKEN BY GRANTEE IN KIND, GRANTOR HEREBY COVENANTS AND AGREES TO INDEMNIFY, PAY, AND HOLD HARMLESS GRANTEE, GRANTEE'S AFFILIATES, AND THEIR RESPECTIVE OFFICERS, MEMBERS, SHAREHOLDERS, PARTNERS, DIRECTORS, TRUSTEES, EMPLOYEES, ADVISORS, REPRESENTATIVES, AND AGENTS, AND THE SUCCESSORS AND ASSIGNS OF ALL OF THE FOREGOING ("***INDEMNITEES***") FROM AND AGAINST ANY AND ALL SUCH RESPONSIBILITY AND LIABILITY AND FROM AND AGAINST ANY LOSSES, COSTS (INCLUDING, WITHOUT LIMITATION, ANY ATTORNEYS' FEES, COURT COSTS, WITNESS FEES, COSTS OF INVESTIGATION, AND OTHER LEGAL COSTS), LIABILITIES (INCLUDING THE COSTS OF ANY INVESTIGATION, STUDY, SAMPLING, TESTING, ABATEMENT, CLEANUP, REMOVAL, REMEDIATION, OR OTHER RESPONSE ACTION NECESSARY OR APPROPRIATE FOR THE REMOVAL, REMEDIATION, CLEANUP, OR ABATEMENT OF ANY HAZARDOUS MATERIALS OR HAZARDOUS MATERIALS ACTIVITY), DAMAGES (INCLUDING NATURAL RESOURCE DAMAGES), FINES, PENALTIES, CLAIMS (INCLUDING ENVIRONMENTAL CLAIMS), CAUSES OF ACTION, INVESTIGATIONS, AND PROCEEDINGS, WHETHER BASED ON ANY GOVERNMENTAL REQUIREMENT (INCLUDING SECURITIES AND COMMERCIAL LAWS, STATUTES, RULES OR REGULATIONS AND ENVIRONMENTAL LAWS), ON COMMON LAW, IN EQUITY, ON CONTRACT, OR OTHERWISE, AND ALL EXPENSES AND DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER, IN ALL CASES WHETHER DIRECT, INDIRECT, PUNITIVE, EXEMPLARY, OR CONSEQUENTIAL, ARISING OUT OF, RESULTING FROM, OR ATTRIBUTABLE TO SAME OR TO THE BREACH BY SUCH GRANTOR OF ANY OF ITS OBLIGATIONS UNDER THE CONVEYANCE OR THIS AGREEMENT, AND IN ALL CASES WHETHER OR NOT CAUSED BY OR ARISING, IN WHOLE OR IN PART, OUT OF THE COMPARATIVE, CONTRIBUTORY, GROSS, OR SOLE NEGLIGENCE OF ANY INDEMNITEE.

**ARTICLE 5<br> MISCELLANEOUS**

Section 5.1 **<u>Notices</u>**. Unless otherwise specifically provided herein, any notice or other communication required or permitted to be given to Grantee or Grantor under the Conveyance or this Agreement shall be sent to such Person's address as set forth in the first paragraph of this Agreement. Each notice hereunder shall be in writing and may be personally served or sent United States certified or registered mail or courier service and shall be deemed delivered on the date of receipt. Either party may specify its proper address or any other post office address within the continental limits of the United States by giving notice to the other party, in the manner provided in this Section, at least ten (10) days prior to the effective date of such change of address.

Section 5.2 **<u>Amendments</u>**. Neither the Conveyance nor this Agreement may be amended or modified except pursuant to a written instrument executed by Grantor and Grantee. Notwithstanding anything herein to the contrary, in no event shall any amendment to the Farmout Agreement or affirmative waiver of any rights or remedies under the Farmout Agreement, including Section 4.4 thereof, by any of the parties thereto after the date hereof have any adverse impact or reduction of any of the rights, obligations or interests of Grantee under this Agreement or the Conveyance (including any amendment or waiver that would result in the reduction of the Specified Percentage or the waiver or delay in any increase to the Specified Percentage), it being understood that the rights and remedies of Grantee under this Agreement or the Conveyance shall be determined and calculated as of no such amendment or waiver occurs.

Section 5.3 **<u>Further Assurances</u>**. Grantor and Grantee shall from time to time do and perform such further acts and execute and deliver such further instruments, conveyances, and other documents as may be required or reasonably requested by Grantor or Grantee, as applicable, to establish, maintain, or protect the respective rights and remedies of Grantor and Grantee and to carry out and effectuate the intentions and purposes of the Conveyance and this Agreement.

Section 5.4 **<u>Waivers</u>**. The failure of Grantor or Grantee to insist upon strict performance of any provision of the Conveyance or this Agreement shall not constitute a waiver of or estoppel against asserting the right to require such performance in the future, nor shall a waiver or estoppel in any one instance constitute a waiver or estoppel with respect to a later breach of a similar nature or otherwise.

Section 5.5 **<u>Governing Law</u>**. THE CONVEYANCE AND THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF GRANTOR AND GRANTEE UNDER EACH SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW MEXICO WITHOUT REGARD TO CONFLICT-OF-LAWS PRINCIPLES.

Section 5.6 **<u>Rule Against Perpetuities</u>**. It is not the intent of Grantor or Grantee that any provision in the Conveyance or this Agreement violate any applicable law regarding the rule against perpetuities, the suspension of the absolute power of alienation, or other rules regarding the vesting or duration of estates, and the Conveyance and this Agreement shall be construed as not violating any such applicable law to the extent the same can be so construed consistent with the intent of Grantor and Grantee. In the event, however, that any provision of the Conveyance or this Agreement is determined to violate any such applicable law, then such provision shall nevertheless be effective for the maximum period (but not longer than the maximum period) permitted by any such applicable law that will result in no violation thereof. To the extent such maximum period is permitted to be determined by reference to any life-in-being, Grantor and Grantee agree that life-in-being shall refer to the lifetime of the last to die of the now living lineal descendants of the late Joseph P. Kennedy (father of the late President of the United States of America).

Section 5.7 **<u>Government Forms</u>**. Separate governmental forms of assignment covering the ORR Interest in the Subject Hydrocarbons may be executed by Grantor to Grantee in sufficient counterparts to satisfy applicable statutory and regulatory requirements. Those assignments shall be deemed to contain all of the exceptions, reservations, warranties, rights, titles, power and privileges set forth in this Agreement and the Conveyance as fully as though they were set forth in each such assignment. The interests covered by such separate assignments are the same, and not in addition to, the interests conveyed in this Agreement and the Conveyance.

Section 5.8 **<u>Tax Matters</u>**. Nothing in the Conveyance or this Agreement shall be construed to constitute a partnership or to cause (under state law or for tax purposes) Grantor to be treated as being the agent of, or in partnership with, Grantee or Grantee to be treated as being the agent of, or in partnership with, Grantor. For all federal income tax purposes and any similar state or local tax purposes, (i) the ORR Interest shall be treated as a production payment within the meaning of IRC section 636 and Treasury Regulation Section 1.636-3(a), which is treated as a mortgage loan described in Treasury Regulation Section 1.636-1(a), (ii) such loan receivable shall be treated as distributed by Grantor to its members and then contributed by such members to Grantee, and (iii) each of Grantor and Grantee agree to report the ORR Interest consistently with this <u>Section 5.8</u> and shall not assert in any audit or other proceeding with respect to taxes any treatment of the ORR Interest that is inconsistent with this <u>Section 5.8</u>. For avoidance of doubt, Grantor and Grantee acknowledge and agree that Grantor (and not Grantee) is entitled to all items of taxable income, gain, loss, and deduction (including depletion) with respect to the Subject Interests and the production of minerals attributable thereto.

Section 5.9 **<u>No Duplication</u>**. In addition to filing the Conveyance, Grantor and Grantee shall execute and file with appropriate authorities, whether federal, state, or local, all forms or instruments required by applicable law to effectuate the conveyance contemplated by the Conveyance and this Agreement. Said instruments shall be deemed to contain all of the exceptions, reservations, rights, titles, and privileges set forth in the Conveyance and this Agreement as fully as though the same were set forth in each such instrument. The interests conveyed by such separate assignments are the same and not in addition to the interests conveyed in the Conveyance.

Section 5.10 **<u>Binding Effect</u>**. All the covenants and agreements of Grantor contained in the Conveyance and this Agreement shall be deemed to be covenants running with the land. All of the provisions of the Conveyance and this Agreement shall inure to the benefit of Grantee and its successors and assigns and shall be binding upon Grantor and its successors and assigns and all other owners of the Subject Interests or any part thereof or any interest therein.

Section 5.11 **<u>Termination of Subject Interests</u>**. In the event any of the Subject Interests (or portions thereof, as applicable) should be released, surrendered, or abandoned by Grantor, then, subject to <u>Section 2.4</u> and <u>Section 2.5</u>, the ORR Interest shall no longer apply to such Subject Interests (or portions thereof, as applicable), but the ORR Interest shall remain in full force and effect and undiminished as to all remaining Subject Interests (and the remaining portions thereof, as applicable).

Section 5.12 **<u>Severability</u>**. In case any provision in or obligation of the Conveyance or this Agreement shall be invalid, illegal, or unenforceable in any jurisdiction, (i) the validity, legality, and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby, (ii) Grantor and Grantee shall amend the Conveyance and this Agreement to the minimum extent necessary to restore the validity, legality, and enforceability of such provision or obligation, and (iii) in the absence of such amendment, the invalid, illegal, or unenforceable provision or obligation shall be reformed to the minimum extent necessary to restore the validity, legality, and enforceability thereof.

Section 5.13 **<u>Successors and Assigns</u>**. This Agreement and the Conveyance binds and inures to the benefit of Grantor and Grantee and their respective heirs, successors and assigns, and all the covenants hereof shall run with the working interests as to the Subject Wells and the Leases, and the lands covered thereby or subject thereto, with respect to the ORR Interest conveyed hereby, and in the event of any Transfer of any of Grantor's interests derived from the Leases or the Subject Wells (including any judicial or non-judicial foreclosure sale by a receiver or trustee in bankruptcy and the granting of any lien by any court), such Transferred interests will be subject to all obligations of Grantor with respect to this Agreement and the Conveyance; *provided*, *however*, it being the intent of the Parties that any heirs, successors and/or assigns of Grantor's interest in the Subject Hydrocarbons shall be responsible for the obligations hereunder only with respect to the Subject Hydrocarbons or such portion thereof so Transferred; *provided*, *further*, that except for those obligations arising under <u>Section 1.1(a)</u> and <u>Section 1.1(b)</u> of this Agreement and insofar and only insofar as they relate to the proportionate interest in and to the Subject Interests Transferred from LH Operating, LLC, as Assignor, to Virtus Energy Assets, LLC, as Assignee, as provided under Article 1 of the Farmout Agreement and the corresponding Assignment and Bill of Sale contemplated therein, this Agreement and its covenants and/or conditions shall not bind or effect Virtus Energy Assets, LLC. All Appendices, Exhibits and Schedules attached hereto are hereby made part hereof and incorporated herein by this reference. The Conveyance are intended to be recorded and filed of record. To facilitate recordation, there may omitted from the Exhibits to the Conveyance in certain counterparts descriptions of property located in recording jurisdictions other than the jurisdiction (tax district, county, parish, state or federal agency) in which the particular counterpart is to be filed or recorded.

Section 5.14 **<u>Counterparts</u>**. This Agreement may be executed in several counterparts and all of such counterparts together shall constitute on and in the same instrument.

Section 5.15 **<u>Headings</u>**. Section headings in the Conveyance and this Agreement are included for convenience of reference only and shall not constitute a part of the Conveyance or this Agreement, as applicable, for any other purpose or be given any substantive effect.

Section 5.16 **<u>Conflicts</u>**. In the event of a conflict between this Agreement and the Conveyance, the terms and provisions of this Agreement shall control to the extent and only to the extent of the conflict. The terms, provisions, and obligations set forth in this Agreement shall survive the execution of the Conveyance and shall not merge with or into the Conveyance.

Section 5.17 **<u>Entire Agreement</u>**. THE CONVEYANCE AND THIS AGREEMENT REPRESENT THE FINAL AGREEMENT AMONG GRANTOR AND GRANTEE AND SUPERSEDE IN THEIR ENTIRETY ANY PRIOR WRITTEN OR ORAL AGREEMENT BETWEEN GRANTOR AND GRANTEE AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF GRANTOR AND GRANTEE. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG GRANTOR AND GRANTEE.

Section 5.18 **<u>Incorporation of Exhibits and Recitals</u>**. The Exhibits attached to the Conveyance and this Agreement and the recitals set forth in each are incorporated into and shall form a part of the Conveyance or this Agreement, as applicable, for all purposes.

[*Signature Page Follows*]

IN WITNESS WHEREOF, this Agreement is dated as of the Effective Time.

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| | |
|:---|:---|
| **<u>GRANTOR:</u>** | **<u>GRANTOR:</u>** |
| **LH OPERATING, LLC** | **LH OPERATING, LLC** |
| By: | /s/ Mitchell B. Trotter |
|  | Mitchell B. Trotter, CFO |
| **<u>GRANTEE:</u>** | **<u>GRANTEE:</u>** |
| [\*\*\*] |  |
| By: | [\*\*\*] |
| Name: | [\*\*\*] |
| Title: | [\*\*\*] |

---

Virtus Energy Partners, LLC joins in the execution hereof for the sole purpose of recognizing and acknowledging that the Farmout Agreement and right, title and interests to be conveyed thereunder shall be subject to the ORRI Interest of [\*\*\*] under this Agreement and Conveyance and Virtus Energy Partners, LLC shall assume its proportionate responsibility thereof.

---

| | |
|:---|:---|
| **VIRTUS ENERGY PARTNERS, LLC** | **VIRTUS ENERGY PARTNERS, LLC** |
| By: | /s/ Lance L. Taylor |
|  | Lance L. Taylor, CEO and Manager |

---

[Signature Page to Agreement Regarding Overriding Royalty Interest]

**EXHIBIT A**

<u>Definitions</u>:

As used herein, the following terms shall have the meaning given to them below:

"***Affiliate***" means, with respect to any Person, any other Person that directly or indirectly (through one or more intermediaries) Controls, is Controlled by, or is under common Control with such specified Person.

"***Agreement***" shall have the meaning given to it in the first paragraph of this Agreement.

"***Control***" and its syntactical variants shall mean the ability (directly or indirectly through one or more intermediaries) to direct or cause the direction of the management or affairs of a Person, whether through the ownership of voting interests, by contract, or otherwise.

"***Conveyance***" shall have the meaning given to it in the second paragraph of this Agreement.

"***Due Date***" has the meaning given to it in <u>Section 1.1(a)</u>.

"***Effective Time***" shall have the meaning given to it in the first paragraph of this Agreement.

"***Farmout Agreement***" shall have the meaning given to it in the Conveyance.

"***Governmental Authority***" means any federal, state, municipal, national or other government, governmental department, commission, board, bureau, court, agency or instrumentality or political subdivision thereof or any entity or officer exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to any government or any court, in each case whether associated with a state of the United States, the United States, or a foreign entity or government.

"***Governmental Requirement***" means, at any time, any law, statute, code, ordinance, order, determination, rule, regulation, judgment, decree, injunction, franchise, permit, certificate, license, authorization or other directive or requirement (whether or not having the force of law), whether now or hereinafter in effect, including, without limitation, environmental laws, energy regulations and occupational, safety and health standards or controls, of any Governmental Authority.

"***Grantee***" shall have the meaning given to it in the first paragraph of this Agreement, and such entity's successors and assigns; and, unless the context in which it is used shall otherwise require, such term shall include any successor owner at the time in question of any or all of such the ORR Interest.

"***Grantor***" shall have the meaning given to it in the first paragraph of this Agreement, and such entity's successors and assigns; and, unless the context in which it is used shall otherwise require, such term shall include any successor owner at the time in question of any or all of the Subject Interests.

"***Hydrocarbons***" shall mean oil, condensate, natural gas and other gaseous hydrocarbons or minerals (including helium), and any other liquid hydrocarbons recovered by field equipment or facilities or that are removed from a gas stream by the liquids-extraction process of any field facility or gas processing plant and delivered by the facility or plant as natural gas liquids, including ethane, propane, butane, and natural gasoline, and mixtures thereof.

Agreement Regarding Overriding Royalty Interest

Exhibit A - Page 1

"***Indemnitees***" shall have the meaning given to it in <u>Section 4.2</u>.

"***Lease***" shall have the meaning given to it in the Conveyance.

"***LH Operating***" shall have the meaning given to such term in the Recitals.

"***Notice of Abandonment***" shall have the meaning given to it in <u>Section 2.5</u>.

"***Notice of Non-Renewal***" shall have the meaning given to it in <u>Section 2.4</u>.

"***ORR Interest***" shall have the meaning given to it in the Conveyance.

"***Person***" means and includes natural persons, corporations, limited partnerships, general partnerships, limited liability companies, limited liability partnerships, joint stock companies, joint ventures, associations, companies, trusts, banks, trust companies, land trusts, business trusts, or other organizations, whether or not legal entities, and Governmental Authorities.

"***Point of Sale***" shall have the meaning given such term in <u>Section 1.1(b)</u>.

"***Post-Production Costs***" shall have the meaning given such term in <u>Section 1.1(b)</u>.

"***Purchaser***" shall have the meaning given such term in <u>Section 1.1(b)</u>.

"***Reasonably Prudent Operator Standard***" means the standard of conduct of a reasonably prudent oil and gas operator under the same or similar circumstances, acting with respect to its own property and without giving effect to the existence of the ORR Interest.

"***Recompleted***" shall have the meaning given to it in the Conveyance.

"***San Andres Formation***" shall have the meaning given to it in the Conveyance.

"***Secondary Arrangement***" shall have the meaning given to it in <u>Section 2.4</u>.

"***Specified Percentage***" shall have the meaning given to it in the Conveyance.

"***Subject Hydrocarbons***" shall have the meaning given to it in the Conveyance.

"***Subject Interests***" shall have the meaning given to it in the Conveyance.

"***Subject Well***" shall have the meaning given to it in the Conveyance.

"***Third Party***" shall mean any Person other than Grantor, Grantee, or any Affiliate of Grantor or Grantee.

"***Transfer***" and its syntactical variants shall mean any assignment, sale, transfer, conveyance, or disposition of any property.

"***Treasury Regulations***" shall mean the United States federal income tax regulations promulgated under the Internal Revenue Code of 1986, as amended.

Agreement Regarding Overriding Royalty Interest

Exhibit A - Page 2

**<u>ANNEX A</u>**

<u>Illustrative Calculation Example</u>:

By way of illustration only, if the Qualified Project Expenditures in the 2026 Annual Commitment Period equals $2,500,000 and no Banked Commitment Credit is available, the Specified Percentage as to all Subject Interests and Subject Wells shall increase by (1.0 – (2,500,000 ÷ 3,000,000)) × 0.02 = 0.0033 (*i.e.,* 0.33%), thereby increasing the Specified Percentage by thirty-three hundredths percent (0.33%).

Agreement Regarding Overriding Royalty Interest

Annex A - Page 1

## Exhibit 10.3

**Exhibit 10.3**

**CERTAIN INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH NOT**

**MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED.**

**[\*\*\*] INDICATES THAT INFORMATION HAS BEEN REDACTED**

**Joint Development, Leasehold Purchase, and<br> Area of Mutual Interest Agreement**

This Joint Development, Leasehold Purchase, and Area of Mutual Interest Agreement ("***Agreement***"), dated effective as of September 9, 2025 ("***Effective Date***") is between Virtus Energy Assets, LLC, a Delaware limited liability company ("***Virtus***") and LH Operating, LLC, a Texas limited liability company ("***LH Operating***"). Virtus and LH Operating may be referred to individually as a "***Party***" and collectively as the "***Parties.***"

**Recitals:**

A. It
 is the intention of the Parties to jointly develop oil and gas leasehold interests and associated
 rights in Township 17S, Range 31E, Eddy County, New Mexico, limited **INSOFAR AND ONLY INSOFAR** as the San Andres Formation, and being those lands and depths more fully described on <u>Exhibit A</u> (the "  ***Grayburg-Jackson Property*** ").

B. Further,
 it is the intention of the Parties to create an Area of Mutual Interest in the Designated
 Sections whereby the Parties agree to certain option rights in proportion to their Participation
 Percentage for acquisitions made within the Designated Sections after the Effective Date.

C. LH Operating
 has agreed to sell, and Virtus has agreed to purchase a 65% interest in the Grayburg-Jackson
 Property. LH Operating will retain a 35% interest in the Grayburg-Jackson Property,
 all existing wellbores (existing as of the Effective Date), and other rights as more particularly
 set forth in this Agreement and the corresponding conveyance.

D. The
 Parties desire to define their respective rights and obligations with respect to the joint
 development, exploration, drilling, completion, operation, and production of oil and gas
 from the Grayburg-Jackson Property, the terms of the purchase and sale of leasehold interests
 in the Grayburg-Jackson Property, and the establishment of an area of mutual interest in
 the Designated Sections.

E. Virtus
 intends to conduct certain confirmatory evaluation studies and to fund, drill, complete,
 and equip three horizontal wells within the Grayburg-Jackson Property, with LH Operating's
 interest in such initial operations carried to the tanks by Virtus, and with further development
 to proceed thereafter on a heads-up basis.

F. It
 is the Parties' intent that defined terms not otherwise defined herein are given the
 meaning provided in <u>Section 7.23</u>. The following exhibits and schedules are attached
 to this Agreement and are incorporated in and made a part of this Agreement:

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| | |
|:---|:---|
| **Exhibit / Schedules:** | **Document:** |
| Exhibit A | [\*\*\*] |
| Exhibit B-1 | [\*\*\*] |
| Exhibit B-2 | [\*\*\*] |
| Exhibit B-3 | [\*\*\*] |
| Exhibit B-4 | [\*\*\*] |
| Exhibit B-5 | [\*\*\*] |
| Exhibit C | [\*\*\*] |
| Exhibit D | [\*\*\*] |
| Exhibit E | [\*\*\*] |
| Schedule 2.1(d) | [\*\*\*] |
| Schedule 2.1(e) | [\*\*\*] |

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For and in consideration of $10.00 and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged the Parties mutually agree as follows:

**ARTICLE 1<br> Purchase and Sale of Existing Leases**

Section 1.1 **<u>Assignment of LH Operating Leases</u>**. LH Operating agrees to sell to Virtus, and Virtus agrees to purchase from LH Operating, an undivided 65% of LH Operating's right, title, and interest in and to all oil and gas leases covering the Grayburg-Jackson Property, that are owned by LH Operating as of the Effective Date, insofar as the same cover the Grayburg-Jackson Property (collectively, the "***LH Operating Leases***"), whether or not accurately described on <u>Exhibit B-1</u>, subject to the exclusions in <u>Section 1.1(b)</u>. Simultaneously with the execution of this Agreement, the Parties shall execute an Assignment and Bill of Sale in the form attached as <u>Exhibit B-4</u> (the "***Existing Lease ABOS***") to effect such conveyance.

(a) The
 grant made by LH Operating to Virtus in the Existing Lease ABOS shall expressly include
 each of the following (collectively, the "  ***Assigned Interests*** "):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) only
 rights in and to the Grayburg-Jackson Property, and the grant to Virtus under the Existing
 Lease ABOS shall be limited accordingly;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) to
 the extent transferable by LH Operating without being a default under or in violation
 of applicable law or third-party agreements (without the payment of any funds or consideration
 that LH Operating elects not to pay), originals of all books, records, files, muniments
 of title, reports and similar documents and materials (including, but not limited to, digital
 form, if available) only insofar as the same relate to the Grayburg-Jackson Property and
 that are in the possession or control of LH Operating, including, without limitation,
 all contract files, title files, title records, title opinions, abstracts, property ownership
 reports, well files, well logs, well tests, maps, engineering data and reports, health, environmental
 and safety information and records, regulatory records, accounting and financial records,
 production records, tax records and operational records, as such data is assembled and maintained
 in the normal course of business, provided that (A) if LH Operating does not possess
 originals of the foregoing, LH Operating shall provide copies of any of the foregoing,
 or (B) if any of the foregoing are proprietary or LH Operating is prohibited from conveying
 such information, LH Operating is not required to provide such information (the "  ***Records*** ");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the
 contracts, easements, and agreements described on <u>Exhibit B-3</u>, and all other rights,
 properties and interests necessary in connection with the ownership, exploration, development,
 production or operation of the LH Operating Leases, including: (A) easements, licenses,
 servitudes, rights-of-way, surface leases and other surface rights appurtenant to, and used
 or held for use in connection with, the LH Operating Leases; and (B) all permits, licenses,
 orders, approvals, variances, waivers, franchises, rights, and other authorizations issued
 by any governmental authority (and any variances or waivers related thereto and applications
 therefor) to the extent relating to the LH Operating Leases (the "  ***Contracts*** ");
 and, for the avoidance of doubt, each Party shall have, and be entitled to exercise, such
 concurrent rights under the Contracts as are reasonably necessary to perform its obligations
 under this Agreement and under any other agreements with third parties relating to the LH
 Operating Leases, and, further, any costs, expenses, or liabilities incurred in connection
 with the exercise of such rights insofar as they relate to the Assigned Interests shall be
 borne by the Parties in proportion to their respective Participation Percentages.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) to
 the extent transferable by LH Operating without being at default under or in violation
 of applicable law or third-party agreements (without the payment of any funds or consideration
 that LH Operating elects, in its sole discretion, not to pay), all geological, geophysical
 and seismic data (including, without limitation, raw data and interpretive data whether in
 written or electronic form), pertaining to the interests described in <u>Section 1.1(a)</u> (the "  ***G&G Data*** ").

(b) The
 Existing Lease ABOS shall expressly exclude and reserve to LH Operating all of LH Operating's
 right, title, and interest in:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) a
 35% interest in the LH Operating Leases as of the Effective Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) all
 existing wells, wellbores, and associated production facilities owned as of the Effective
 Date, even if such wellbores and associated production facilities are producing from the
 Grayburg-Jackson Property and whether or not the wells, wellbores, and associated production
 facilities are accurately described or omitted from the Exhibit attached to the Existing
 Lease ABOS;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) all
 rights, title, and interest outside of the Grayburg-Jackson Property, including, for clarity,
 interest in and to any depths or formations other than the San Andres Formation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) those
 reservations made in the Existing Lease ABOS and defined as Excluded Assets therein;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) all
 right, title and interest in and to the Records, Contracts, and G&G Data insofar as same
 are not expressly included in the Assigned Interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) all
 existing wells, wellbores, and associated production facilities owned as of the Effective
 Date, even if such wellbores and associated production facilities are producing from the
 Grayburg-Jackson Property and whether or not the wells, wellbores, and associated production
 facilities are accurately described, including all production facilities, surface facilities,
 pumping units, tanks, flow lines, meters, injection wells, compressors, and associated production
 facilities or equipment owned or operated by LH Operating, LLC.

(c) Simultaneously
 with the execution of this Agreement and the Existing Lease ABOS, LH Operating shall
 execute and deliver the FIRPTA Certificate in the form attached as <u>Exhibit B-5</u>.

(d) LH Operating
 shall deliver to Virtus, concurrent with the execution of the Existing Lease ABOS, electronic
 copies of all Records and G&G Data.

Section 1.2 **<u>Consideration</u>**. Within three Business Days of the execution of this Agreement and as partial consideration for the Existing Lease ABOS, Virtus shall pay LH Operating $5,000,000 in immediately available funds (the "***Purchase Price***"), being $709.38 *multiplied by* the Net Revenue Acres that Virtus is to receive immediately upon closing, by wire transfer to the account provided below:

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| | |
|:---|:---|
| [\*\*\*] | [\*\*\*] |
| [\*\*\*] | [\*\*\*] |
| [\*\*\*] | [\*\*\*] |
| [\*\*\*] | [\*\*\*] |
| [\*\*\*] | [\*\*\*] |

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Each Party agrees to bear all of the costs and expenses incurred by such Party associated with such Party's acquisition and divestiture of the Existing LH Operating Leases.

Section 1.3 **<u>Review of Title to the LH Operating Leases</u>**. Beginning on the Effective Date of this Agreement and for a period of 90 days thereafter, Virtus, at its sole cost and expense, shall have the right to conduct a title examination of the interest Virtus received under the Existing Lease ABOS. If, after completion of its title examination, Virtus identifies title defects that result in Virtus not having Good and Defensible Title to the represented Net Revenue Acres shown on <u>Exhibit B-2</u>, then Virtus shall provide notice to LH Operating identifying such defects in reasonable detail (the "***Defect Notice***"), whereupon LH Operating shall have 60 days to cure such title defects to the reasonable satisfaction of Virtus. If LH Operating fails to cure any such title defects within 60 days after receipt of the Defect Notice then such defective interests shall be removed from this transaction and LH Operating shall, within 15 days thereafter, reimburse Virtus the proportionate portion of the Purchase Price attributable to the Net Revenue Acres described in the Defect Notice with a defect that remains uncured.

Section 1.4 **<u>LH Operating Leases Representations and Warranties</u>**. LH Operating represents and warrants to Virtus the following matters:

(a) *Tax Compliance*. All federal, state and local tax and information returns relating to the
 LH Operating Leases and required under the statutes, rules and regulations of such jurisdiction
 have been filed, and all taxes attributable to LH Operating's ownership of the
 LH Operating Leases through the Effective Date, including, but not limited to, ad valorem
 and severance taxes (other than those being contested in good faith for which adequate provisions
 will be made and for payment of which LH Operating shall remain responsible) whether
 or not shown or required to be shown on said returns to be due, and additional assessments
 received prior to the date hereof which are due and payable, have been paid.

(b) *Leases*.
 LH Operating represents and warrants that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) LH
 Operating and any of its Affiliates have not received a written notice or demand which has
 not been cured with respect to any LH Operating Lease in which the lessor thereunder
 is seeking to terminate, cancel, rescind, procure judicial reformation or asserting any material
 breach of, or demanding damages in connection with, any such Lease, in whole or in part;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) none
 of the LH Operating Leases is subject to any unfulfilled obligation to drill a well
 (excluding, for avoidance of doubt, optional drilling to maintain a LH Operating Lease
 within or beyond its primary term);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) no
 LH Operating Lease contains an express provision obligating the lessee to spud and drill
 a well;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) no
 LH Operating Leases are currently being maintained by the payment of shut-in royalties
 or similar lease maintenance payments in lieu of operations or production;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) all
 of the LH Operating Leases are in full force and effect as of the Effective Date, and LH
 Operating warrants Good and Defensible Title in and to those interests in the LH Operating
 Leases reflected on <u>Exhibit B-2</u>; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) neither
 LH Operating nor any of its Affiliates, nor any third-party, is in default with respect to
 any of its obligations under any of the LH Operating Leases.

(c) *Consents*.
 There are no consents to assignment, prohibitions on assignments or requirements to obtain
 consents from any third-party that are required in connection with the consummation of the
 transactions contemplated by this Agreement by LH Operating or any of its Affiliates.

(d) *Affiliate Transfers*.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Except
 the interest created under that certain Conveyance of Overriding Royalty Interest recorded
 in the Official Public Record of Eddy County, New Mexico, as Instrument No. 2308085
 between LH Operating, LLC, and Pogo Royalty, LLC, as Grantor, and Pogo Royalty, LLC,
 as Grantee, LH Operating has not transferred, sold, mortgaged, or pledged all or any part
 of the LH Operating Leases to an Affiliate or third party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) No
 Affiliate of LH Operating owns any right or interest in the LH Operating Leases that
 contributes to LH Operating's Net Revenue Interest or Working Interest, in each
 case, as set forth on <u>Exhibit B-2</u>.

(e) *No Material Undisclosed Information*. To LH Operating's knowledge, there are no
 facts or circumstances relating to the LH Operating Leases, the Assigned Interests,
 or the transactions contemplated by this Agreement that have not been disclosed in writing
 to Virtus that would, individually or in the aggregate, materially and adversely affect Virtus's
 decision to enter into or consummate this Agreement or the value or use of the Assigned Interests.

(f) *Contracts*.
 Each Contract is a legal, valid, and a binding obligation of LH Operating or on LH Operating's
 interest in the Assigned Interests and, to LH Operating's knowledge, each other
 party thereto, is enforceable in accordance with its terms against LH Operating or on
 LH Operating's interest in the Assigned Interests and, to LH Operating's
 knowledge, each other party thereto and, to LH Operating's knowledge, is in full
 force and effect, subject to any bankruptcy, insolvency, reorganization, moratorium, fraudulent
 transfer or other laws, now or hereafter in effect, relating to or limiting creditors'
 rights generally and to general principles of equity (regardless of whether such enforceability
 is considered in a proceeding in equity or at law). Neither LH Operating nor, to such
 LH Operating's knowledge, any other party thereto, is in breach or default under
 any Contract in any respect, and no event, occurrence, condition or act has occurred that,
 with the giving of notice, the lapse of time or the happening of any other event or condition,
 would become any such breach or default in any respect by LH Operating or, to LH Operating's
 knowledge, any other party thereto. LH Operating has not received or given any unresolved
 written notice of any price redetermination, market out, curtailment or termination with
 respect to any Contract.

**ARTICLE 2<br> Representations and Warranties**

Section 2.1 **<u>Representations and Warranties of LH Operating</u>**. LH Operating hereby represents and warrants to Virtus the following matters:

(a) *Organization; Existence*. LH Operating is a limited liability company duly organized, validly existing
 and in good standing under the laws of the state of its formation and has all requisite power
 and authority to own and operate its property and to carry on its business as now conducted.

(b) *Authorization*.
 LH Operating has full power and authority to enter into and perform this Agreement and
 the transactions contemplated herein. The execution, delivery and performance by LH Operating
 of this Agreement and each Exhibit have been duly and validly authorized and approved by
 all necessary company action on the part of LH Operating. This Agreement is the valid
 and binding obligation of LH Operating and enforceable against LH Operating in
 accordance with its terms, subject to the effects of bankruptcy, insolvency, reorganization,
 moratorium and similar laws, as well as to principles of equity (regardless of whether such
 enforceability is considered in a proceeding in equity or at law).

(c) *No Conflicts*. The execution, delivery, and performance by LH Operating of this Agreement
 and the consummation of the transactions contemplated herein will not (i) conflict with
 or result in a breach of any provisions of the organizational or other governing documents
 of LH Operating, (ii) result in a default or the creation of any lien or encumbrance
 or give rise to any right of termination, cancellation or acceleration under any of the terms,
 conditions or provisions of any note, bond, mortgage, indenture, license or other agreement
 to which LH Operating is a party or by which LH Operating or any of its property
 may be bound, or (iii) violate any law applicable to LH Operating or any of its
 property, except where such default, lien, encumbrance, termination, cancellation, acceleration
 or violation would not have a material adverse effect on LH Operating's ability
 to consummate the transactions contemplated in this Agreement.

(d) *Consents and Preference Rights*. Except as provided in <u>Schedule 2.1(d)</u>, there are no consents,
 preference rights, or other restrictions on assignment, including requirements for consents
 from third-parties to any assignment (in each case), that would be applicable in connection
 with the consummation of the transactions contemplated by this Agreement by LH Operating.

(e) *Material Contracts*. <u>Schedule 2.1(e)</u> contains a true and complete listing of all Material
 Contracts. (i) All Material Contracts are in full force and effect as to LH Operating
 and, to LH Operating's knowledge, all Material Contracts are in full force and effect
 as to any third party to such Material Contracts except as such enforceability may be limited
 by applicable bankruptcy or other similar laws affecting the rights and remedies of creditors
 generally as well as to general principles of equity (regardless of whether such enforceability
 is considered in a proceeding in equity or at law), (ii) LH Operating is not in default in
 any respect, and no written notice of alleged default has been received by LH Operating that
 remains unresolved, under any Material Contract, (iii) to LH Operating's knowledge,
 no other party to a Material Contract is in default thereunder in any respect, (iv) any contract
 between LH Operating and an Affiliate of LH Operating is on terms no less favorable than
 the customary, prevailing terms for comparable services by non-Affiliates of LH Operating,
 and (v) there exists no condition or event that, with or without notice or lapse of time
 or both, would constitute a default under any Material Contract by LH Operating or, to LH
 Operating's knowledge, any other party thereto.

(f) *Bankruptcy*.
 There are no bankruptcy, reorganization, or receivership proceedings pending, being contemplated
 by or, to LH Operating's knowledge, threatened in writing against LH Operating.

(g) *Litigation*.
 There is no suit, action, investigation or inquiry by any person or by or before any governmental
 authority, and no legal, administrative or arbitration proceedings pending, or, to LH Operating's
 knowledge, threatened against LH Operating, or to which LH Operating is a party,
 that could reasonably be expected to have a material adverse effect upon the ability of LH Operating
 to consummate the transactions contemplated in this Agreement.

(h) *Independent Evaluation*. LH Operating is sophisticated in the evaluation, purchase, ownership,
 and operation of oil and gas properties and related facilities. In making its decision to
 enter into this Agreement and to consummate the transaction contemplated herein, LH Operating,
 except to the extent of Virtus's representations in <u>Section 2.2</u> has relied
 or shall rely solely on its own independent investigation and evaluation of the Agreement
 and the advice of its own legal, tax, economic, environmental, engineering, geological and
 geophysical advisors and the express provisions of this Agreement and not on any comments,
 statements, projections or other materials made or given by Virtus or by any representatives,
 consultants, or advisors engaged by Virtus.

(i) *Brokers' Fees*. LH Operating has incurred no liability, contingent or otherwise, for brokers'
 or finders' fees relating to the transactions contemplated by this Agreement for which
 Virtus or any Affiliate of Virtus shall have any responsibility.

(j) *Accredited Investor*. LH Operating is an "  ***accredited investor,***" as
 such term is defined in Regulation D of the Securities Act of 1933, as amended, and will
 acquire or maintain interests contemplated hereunder for its own account and not with a view
 to a sale or distribution thereof in violation of the Securities Act of 1933, as amended,
 and the rules and regulations thereunder, any applicable state blue sky laws, or any other
 applicable securities laws. LH Operating has such knowledge, sophistication, and experience
 in business and financial matters and in the ownership and operation of oil and gas properties
 and assets that LH Operating is capable of evaluating the merits and risks of the acquisition
 or maintenance of the interests contemplated hereunder, and has so evaluated the merits and
 risks. LH Operating is able to bear the economic risk of its acquisition or maintenance
 of the interests contemplated hereunder, and is able to afford a complete loss of such investment.

Section 2.2 **<u>Representations and Warranties of Virtus</u>**. Virtus hereby represents and warrants to LH Operating the following matters:

(a) *Organization; Existence*. Virtus is a limited liability company duly organized, validly existing and
 in good standing under the laws of the state of its formation and has all requisite power
 and authority to own and operate its property and to carry on its business as now conducted.

(b) *Authorization*.
 Virtus has, or will have at the time of performance, full power and authority to enter into
 and perform this Agreement and the transactions contemplated herein. The execution, delivery
 and performance by Virtus of this Agreement and each Exhibit have been duly and validly authorized
 and approved by all necessary company action on the part of Virtus. This Agreement is the
 valid and binding obligation of Virtus and enforceable against Virtus in accordance with
 its terms, subject to the effects of bankruptcy, insolvency, reorganization, moratorium and
 similar laws, as well as to principles of equity (regardless of whether such enforceability
 is considered in a proceeding in equity or at law).

(c) *No Conflicts*. The execution, delivery, and performance by Virtus of this Agreement and the
 consummation of the transactions contemplated herein will not (i) conflict with or result
 in a breach of any provisions of the organizational or other governing documents of Virtus,
 (ii) result in a default or the creation of any lien or encumbrance or give rise to any right
 of termination, cancellation or acceleration under any of the terms, conditions or provisions
 of any note, bond, mortgage, indenture, license or other agreement to which Virtus is a party
 or by which Virtus or any of its property may be bound, or (iii) violate any law applicable
 to Virtus or any of its property, except where such default, lien, encumbrance, termination,
 cancellation, acceleration or violation would not have a material adverse effect on Virtus's
 ability to consummate the transactions contemplated in this Agreement.

(d) *Consents and Preference Rights*. There are no consents, preference rights, or other restrictions
 on assignment, including requirements for consents from third-parties to any assignment (in
 each case), that would be applicable in connection with the consummation of the transactions
 contemplated by this Agreement by Virtus.

(e) *Bankruptcy*.
 There are no bankruptcy, reorganization or receivership proceedings pending, being contemplated
 by or, to Virtus's knowledge, threatened in writing against Virtus.

(f) *Litigation*.
 There is no suit, action, investigation or inquiry by any person or by or before any governmental
 authority, and no legal, administrative or arbitration proceedings pending, or, to Virtus's
 knowledge, threatened against Virtus, or to which Virtus is a party, that could reasonably
 be expected to have a material adverse effect upon the ability of Virtus to consummate the
 transactions contemplated in this Agreement.

(g) *Independent Evaluation*. Virtus is sophisticated in the evaluation, purchase, ownership and operation
 of oil and gas properties and related facilities. In making its decision to enter into this
 Agreement and to consummate the transaction contemplated herein, Virtus, except to the extent
 of LH Operating's representations in <u>Section 1.4</u>, <u>Section 2.1</u>,
 and any special warranty of title delivered under a transfer hereunder, has relied or shall
 rely solely on its own independent investigation and evaluation of the Agreement and the
 advice of its own legal, tax, economic, environmental, engineering, geological and geophysical
 advisors and the express provisions of this Agreement and not on any comments, statements,
 projections or other materials made or given by LH Operating or any representatives,
 consultants, or advisors engaged by LH Operating.

(h) *Brokers' Fees*. Virtus has incurred no liability, contingent or otherwise, for brokers' or
 finders' fees relating to the transactions contemplated by this Agreement for which
 LH Operating or any Affiliate of LH Operating shall have any responsibility.

(i) *Accredited Investor*. Virtus is an "  ***accredited investor,***" as such term
 is defined in Regulation D of the Securities Act of 1933, as amended, and will acquire the
 Assigned Interests for its own account and not with a view to a sale or distribution thereof
 in violation of the Securities Act of 1933, as amended, and the rules and regulations thereunder,
 any applicable state blue sky laws, or any other applicable securities laws. Virtus has such
 knowledge, sophistication, and experience in business and financial matters and in the ownership
 and operation of oil and gas properties and assets that Virtus is capable of evaluating the
 merits and risks of the acquisition of the Assigned Interests, and has so evaluated the merits
 and risks of such acquisition. Virtus is able to bear the economic risk of its acquisition
 of the Assigned Interest, and is able to afford a complete loss of such investment.

Section 2.3 **<u>Disclaimer of Representations and Warranties</u>**. **Except for the representations and warranties of the Parties in <u>Section 1.4</u>, <u>Section 2.1</u>, <u>Section 2.2</u>, and the special warranty of title to be included in any transfers to be executed pursuant hereto, this Agreement is made by each of the Parties without any express, implied, or statutory warranty or representation whatsoever.**

**ARTICLE 3<br> Area of Mutual Interest and Subsequent Acquisitions**

Section 3.1 **<u>AMI Term</u>**. The Area of Mutual Interest (AMI) shall be the Designated Sections. The AMI terms under this <u>Article 3</u> shall commence on the Effective Date and continue in force for a term of five years, unless earlier terminated by mutual written agreement of the Parties.

Section 3.2 **<u>Subsequent Acquisitions; Option Right</u>**.

(a) If
 either Party acquires, directly or indirectly, any oil, gas, or mineral leasehold interests,
 wellbore interest, or other interests in the oil, gas, or mineral estate, or easements, licenses,
 servitudes, rights-of-way, surface leases and other surface rights appurtenant to the mineral
 estate, including but not limited to fee mineral interests, overriding royalty interests,
 working interests, net profits interests, operating rights, or other rights to earn or acquire
 interests in the Designated Sections (a "  ***Subsequent Property*** "),
 such Party (the "  ***Acquiring Party***") shall, within 30 days of such
 acquisition, provide written notice (an "  ***Option Notice***") to the
 other Party (the "  ***Non-Acquiring Party*** ").

(b) The
 Option Notice shall include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) full
 details of the acquisition, including the net mineral acres, net leasehold acres, working
 interest, net revenue interest, depths, and a legal description of the acreage acquired;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) a
 copy of the executed assignment, lease, or other acquisition documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) all
 title information obtained in connection with such acquisition, including lease files, title
 opinions, abstracts, runsheets, and related records in the Acquiring Party's possession
 or reasonably available to it; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) a
 list of the leasehold costs and the total actual costs paid by the Acquiring Party to acquire
 the Subsequent Property (the "  ***Leasehold Purchase Price*** "), *provided*, *however*, (A) if any Subsequent Property lies partially within and partially outside
 the Designated Sections, then the Non-Acquiring Party's Option shall apply only to
 that portion located within the Designated Sections and the Parties shall negotiate in good
 faith to allocate a portion of the Leasehold Purchase Price to the interests located within
 the Designated Sections (the "  ***Allocated AMI Value*** "). The Parties
 agree that, if needed, the Allocated AMI Value shall be used as the basis for calculating
 the Non-Acquiring Party's Subsequent AMI Participation Percentage purchase price under <u>Section 3.2(c)</u>. Unless mutually agreed to by the Parties, the Non-Acquiring Party
 must exercise its option right as to all interests in the Subsequent Property described in
 the Option Notice and located within the Designated Sections.

By way of illustration only and not as a limitation, if an Acquiring Party obtains an interest in both the San Andres Formation and those depths below the base of the San Andres Formation, then the Non-Acquiring Party must exercise its rights as to both the San Andres Formation and those depths below the base of the San Andres Formation.

By way of illustration only and not as a limitation, if an Acquiring Party obtains an interest covering lands both within and outside of the Designated Sections, then the Non-Acquiring Party's option right shall be limited exclusively to that portion of the interest located within the Designated Sections, and the applicable price to be paid or borne proportionately at the Subsequent AMI Participation Percentage by the Non-Acquiring Party for such portion shall be the Allocated AMI Value agreed to by the Parties (rather than the Leasehold Purchase Price).

(c) The
 Non-Acquiring Party shall have 20 Business Days following receipt of the Option Notice (the
 "  ***Option Period***") to elect in writing to acquire its Subsequent
 AMI Participation Percentage of the Acquiring Party's interest in the Subsequent Property
 for the Leasehold Purchase Price (or Allocated AMI Value, as applicable).

(d) Failure
 of the Non-Acquiring Party to timely deliver written notice exercising its option shall be
 deemed an election not to acquire its Subsequent AMI Participation Percentage in such Subsequent
 Property.

(e) The
 Acquiring Party shall have no further obligations to the Non-Acquiring Party with respect
 to any such Subsequent Property in which the Non-Acquiring Party elects not to participate.
 The Acquiring Party shall thereafter be entitled to market, sell, partner, or otherwise develop
 or dispose of its interest in such Subsequent Property without restriction, and the AMI shall
 be deemed amended to exclude the Acquiring Party's interest in such Subsequent Property
 to the extent necessary to permit such activities.

Section 3.3 **<u>Closing of Subsequent Acquisitions</u>**.

(a) Closing
 of any Subsequent Property acquisition in which the Non-Acquiring Party elects to participate
 shall occur on the last Business Day of the calendar month in which the Option Period expires.

(b) No
 later than three Business Days after such closing, the Non-Acquiring Party shall pay the
 Acquiring Party, in immediately available funds, an amount equal to its Subsequent AMI Participation
 Percentage of the Leasehold Purchase Price (or Allocated AMI Value, as applicable).

(c) The
 Acquiring Party shall promptly assign the applicable Subsequent AMI Participation Percentage
 in each such Subsequent Property to the Non-Acquiring Party, or its designee, using an assignment
 substantially in the form of <u>Exhibit C</u>, effective as of the date of the original
 acquisition by the Acquiring Party.

Section 3.4 **<u>Title Review and Defects of Subsequent Property</u>**.

(a) The
 Non-Acquiring Party shall have 60 days following the end of the Option Period (the "  ***Defect Notice Date***") to deliver to the Acquiring Party written notice of any alleged
 title defects ("  ***Asserted Defects*** "). Such notice shall:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) identify
 each Asserted Defect and the lease(s) affected;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) include
 supporting documentation reasonably necessary to describe the basis for the Asserted Defect;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) set
 forth the Non-Acquiring Party's good faith estimate of (A) the cost of curing such
 Asserted Defect or (B) any variance in net revenue interest, working interest, or Net Mineral
 Acres arising therefrom;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) attach
 relevant evidence supporting the Asserted Defect; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) state
 any proposed adjustment to the Leasehold Purchase Price (or Allocated AMI Value, as applicable)
 and the specific actions required to cure the Asserted Defect.

(b) Any
 Asserted Defect that the Non-Acquiring Party fails to timely assert shall be deemed waived.
 Except for breaches of any special warranty of title in the applicable assignment, the Acquiring
 Party shall have no liability for any defect so waived or any defect arising thereafter.

Section 3.5 **<u>Cure of Defects on Subsequent Properties</u>**.

(a) The
 Acquiring Party shall have 30 days after the Defect Notice Date (the "  ***Cure Period*** ")
 to cure any Asserted Defects.

(b) If
 the Acquiring Party cures an Asserted Defect during the Cure Period to the reasonable satisfaction
 of the Non-Acquiring Party, such Asserted Defect shall be deemed cured.

(c) If
 the Acquiring Party is unable or unwilling to cure an Asserted Defect, the Parties shall
 negotiate in good faith to agree upon an appropriate downward adjustment to the Leasehold
 Purchase Price (or Allocated AMI Value, as applicable) (the "  ***Defect Settlement*** ")
 which shall be promptly refunded back to the Non-Acquiring Party.

(d) If
 the Parties are unable to agree upon the existence of a defect or the amount allocated to
 a Defect Settlement within 10 days after the expiration of the Cure Period, the Acquiring
 Party may elect:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) to
 exclude the affected lease(s) from the assignment and refund any amounts paid by the Non-Acquiring
 Party for such lease(s); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) to
 submit the dispute to arbitration administered by the American Arbitration Association under
 its Commercial Arbitration Rules to resolve whether a defect exists and the appropriate price
 adjustment.

**ARTICLE 4<br> Drilling Program**

Section 4.1 <u>**Evaluation Studies**.</u>

(a) *Conduct of Studies*. Virtus shall undertake certain confirmatory geological, engineering, technical,
 financial, economic, operational, commercial, legal, regulatory, and any other studies, assessments,
 reviews, investigations, or analyses that Virtus, in its sole discretion, deems necessary,
 useful, or advisable to evaluate the San Andres Formation, the Assigned Interests, or the
 Grayburg-Jackson Property, and to identify optimal drilling locations, development methods,
 or commercial strategies (collectively, the "  ***Evaluation Studies*** ").
 Evaluation Studies may include, without limitation, fluid and pressure sampling, recompletions,
 workovers, stimulation, artificial lift installation, drilling of pilot holes, cased or open
 hole logging, seismic or microseismic studies, preparation of regulatory filings, analysis
 of commercial terms or contracts, reservoir modeling, title and legal analyses, infrastructure
 or facilities assessments, cost estimation, marketing evaluations, risk assessments, negotiations
 with third-parties, and any other activities or analyses that Virtus, in its sole discretion,
 elects to undertake in connection with such evaluation. Notwithstanding the foregoing, Evaluation
 Studies shall be conducted in a commercially reasonable manner and in compliance with applicable
 laws and HSE standards, without materially and adversely impacting LH Operating's existing
 operations absent LH Operating's prior written consent. Virtus shall promptly furnish
 to LH Operating all data, analyses, reports, logs, models, and work product resulting from
 the Evaluation Studies.

(b) *Funding of Studies*. Virtus shall fund not less than $1,000,000 in aggregate costs (on an 8/8ths
 basis) for the Evaluation Studies. If the aggregate costs incurred by Virtus for Evaluation
 Studies total less than $1,000,000, then Virtus shall pay to LH Operating, as additional
 consideration for the Assigned Interest, an amount equal to the shortfall between such actual
 aggregate costs and $1,000,000.

(c) *Carry Obligation*. LH Operating shall bear no cost for the first $2,000,000 in aggregate
 costs (on an 8/8ths basis) of the Evaluation Studies, which costs shall be borne entirely
 by Virtus and shall not be subject to recoupment from LH Operating's share of
 production. Any costs of Evaluation Studies exceeding $2,000,000 shall be borne by the Parties
 in accordance with their respective Participation Percentages under this Agreement. No overhead,
 administrative charge, affiliate uplift, surcharge, or other indirect cost shall be assessed
 against LH Operating's carried share for any carried operation or Evaluation Study,
 and no back-door recovery of carried costs shall be permitted through joint interest billings
 or accounting procedures.

(d) *Completion Deadline and True-Up*. The Parties agree that the Evaluation Studies shall be completed,
 or deemed completed for purposes of cost allocation, no later than March 31, 2026. On or
 before April 30, 2026, Virtus shall (i) determine and notify LH Operating in writing
 of the aggregate costs incurred for the Evaluation Studies, and (ii) pay to LH Operating
 any amount due pursuant to <u>Section 4.1(b)</u> if the costs incurred are less than
 $1,000,000. If the aggregate costs incurred exceed $1,000,000 but are less than or equal
 to $2,000,000, all such costs shall remain the sole obligation of Virtus pursuant to <u>Section 4.1(c)</u>.
 Any Evaluation Studies costs incurred after March 31, 2026, or in excess of $2,000,000, shall
 be borne by the Parties in accordance with their respective Participation Percentages under
 this Agreement.

Section 4.2 <u>**Initial Drilling Program**.</u>

(a) *Commitment to Drill*. Virtus shall use commercially reasonable efforts to drill, complete, and equip
 three horizontal wells within the Grayburg-Jackson Property (the "  ***Initial Drilling Program*** ").

(b) *Timing*.
 Virtus shall make reasonable efforts to cause the first well in the Initial Drilling Program
 to be spud on or before March 31, 2026, subject to operational, regulatory, and title constraints,
 force majeure, and any other factors outside the reasonable control of Virtus.

(c) *Carry Obligation*. Virtus shall bear 100% of the costs to drill, complete, and equip the wells
 included in the Initial Drilling Program, including the portion attributable to LH Operating's
 35% Participation Percentage, through first production and delivery to tanks (the "  ***Carry Obligation*** "). LH Operating shall bear no obligation to reimburse Virtus
 for such carried costs, and Virtus shall not have the right to recoup any such costs from
 LH Operating's share of production revenues from the Initial Drilling Program
 wells.

Section 4.3 <u>**Drilling Commitment Wells**.</u>

(a) *Commitment to Drill*. If the Initial Drilling Program is determined by Virtus, in good faith and
 in its reasonable discretion, to be commercially viable, the Parties shall proceed with further
 development of the Grayburg-Jackson Property. Virtus shall drill or cause to be drilled 12
 additional horizontal wells targeting the Grayburg-Jackson Property (the "  ***Drilling Commitment*** "). For the avoidance of doubt, the aggregate well obligation under
 this Agreement across both the Initial Drilling Program and Drilling Commitment shall be
 15 wells.

(b) *Timing*.
 Virtus must satisfy the Drilling Commitment on or before December 31, 2030, subject to operational,
 regulatory, and title constraints, force majeure, and any other factors outside the reasonable
 control of Virtus.

(c) *Heads-Up Development*. Except for the Carry Obligation described in <u>Section 4.2(c)</u> (which is applicable only to the Initial Drilling Program wells), all Drilling Commitment
 wells shall be drilled, completed, and equipped on a "  ***heads-up*** "
 basis, with costs and expenses shared by the Parties in proportion to their respective Participation
 Percentages.

Section 4.4 **<u>Failure to Fulfill Drilling Commitment</u>**<u>.</u>

(a) *Reassignment Obligation*. If Virtus fails or elects not to fulfill the Drilling Commitment by December
 31, 2030, and such failure is not excused by force majeure or as otherwise provided herein,
 then Virtus shall, at LH Operating's written request, reassign to LH Operating
 all right, title, and interest acquired by Virtus in the Assigned Interest, except for:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) any
 wellbores drilled by Virtus or its Affiliates in which Virtus owns an economic interest;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) all
 tangible personal property, equipment, fixtures and improvements, including all injection
 wells, salt water disposal facilities, gathering systems, well heads, flow lines, casing,
 tubing, pumps, motors, gauges, valves, heaters, treaters, water lines, vessels, tanks, tank
 batteries, boilers, separators, treating equipment, compressors, SCADA and wellhead communication
 systems hardware utilized by or for beneficial use of the wellbores in (i), above, fee minerals,
 units, easements, other equipment, automation systems including meters and related telemetry
 on wells, power lines, telephone and communication lines and other appurtenances owned in
 connection with the production, gathering, treating, storing, transportation or marketing
 of hydrocarbons in each case, to the extent relating to the ownership or operation of those
 wellbores in (i), above;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) all
 contracts, agreements and other written agreements, including, without limitation, all production
 sales contracts, farmout agreements, operating agreements, service agreements, equipment
 leases, division orders, unit agreements, gas gathering and transportation agreements, water
 disposal agreements and other similar agreements, in each case, to the extent relating to
 the ownership or operation of those wellbores in (i), above;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) all
 easements, rights-of-way, servitudes, surface use agreements, surface leases and similar
 rights, obligations and interests that are primarily related to the use, ownership or operation
 of those wellbores in (i), above;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) all
 lands, leasehold interests, depths, and associated rights and interests located within or
 allocated to any drilling or spacing unit (DSU) in which a well described in subsection (i)
 is located, together with all contracts, agreements, permits, and other rights that are applicable
 solely to such DSU; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) the
 leasehold interests and acreage reasonably allocated to such wellbores or DSUs in accordance
 with applicable regulations, field rules, or prudent engineering practices.

(b) *Documentation*.
 Any reassignment required under this Section shall be made by an instrument in recordable
 form, providing for a special warranty of defensible title by, through, and under, but not
 otherwise. Within 30 days from LH Operating's written request under <u>Section 4.4(a)</u>,
 Virtus shall deliver to LH Operating (i) fully executed assignments, (ii) all data
 pertinent to the reassigned interest.

(c) *No Further Liability*. Upon any reassignment required under this Section, such reassignment,
 together with the Evaluation Studies and LH Operating retaining the Purchase Price, shall
 constitute full and complete liquidated damages and the sole and exclusive remedy available
 to LH Operating for Virtus's failure to fulfill the Initial Drilling Program or
 the Drilling Commitment. Except for obligations expressly stated to survive under this Agreement
 that accrued prior to the effective date of such reassignment, Virtus shall have no further
 obligations or liabilities under this Agreement with respect to the Grayburg-Jackson Property,
 the Initial Drilling Program, the Drilling Commitment, or any associated development, and
 LH Operating shall not be entitled to seek, and hereby waives and releases, any other
 claims, remedies, damages (including consequential, incidental, indirect, special, or punitive
 damages) in connection thereto.

Section 4.5 <u>**Additional Provisions**.</u>

(a) *Well Proposals*. All proposed Initial Drilling Program Wells and Development Wells shall be
 subject to the proposal procedures, consents, and non-consent penalties as set forth in the
 Joint Operating Agreement, a form of which is attached as <u>Exhibit D</u> (the "  ***JOA*** "),
 which shall govern all matters related to well proposals, operations, and elections for each
 such well. A JOA shall be entered into on a well-by-well or unit-by-unit basis, unless otherwise
 agreed by the Parties in writing.

(b) *Operator Rights*. Virtus, Virtus Energy Operating, LLC, or another Affiliate of Virtus (as designated
 by Virtus in its sole and absolute discretion) shall serve as Operator of all wells and operations
 under this Agreement unless otherwise provided in a Joint Operating Agreement or otherwise
 agreed by the Parties in writing. LH Operating agrees to vote for and take all actions
 reasonably available to it to designate and maintain Virtus or an Affiliate of Virtus as
 the Operator under any Joint Operating Agreement which includes third-parties and to vote
 in favor of any elections or decisions made by Virtus or an Affiliate of Virtus, in its capacity
 as the Operator under the Joint Operating Agreement, with respect to the development Grayburg-Jackson
 Property, provided such elections or decisions are consistent with the terms of this Agreement
 and the Joint Operating Agreement. This includes, but is not limited to, elections related
 to drilling, completing, equipping, and operating the wells.

(c) *Coordination of Operations*. The Parties agree to cooperate in good faith to coordinate operations,
 minimize interference with one another's activities, and share access to facilities
 and infrastructure as reasonably necessary for the efficient development of the Grayburg-Jackson
 Property.

(d) *Cost Controls*. Virtus and LH Operating shall each use commercially reasonable efforts
 to minimize costs for any operations conducted under this <u>Article 4</u>, including
 costs allocated through Joint Interest Billing (JIB) statements.

(e) *Annual Review of COPAS*. The Parties may, but are not obligated to, meet during the month of
 November, at a mutually agreeable time and place or by telephone, to review the fixed rates,
 overhead charges, and other costs under the Council of Petroleum Accountants Societies ("  ***COPAS*** ")
 Accounting Procedure attached to the applicable Joint Operating Agreement(s). If the Parties
 mutually agree in writing on revised rates and costs for the succeeding calendar year, the
 Operator shall amend the COPAS accordingly, and upon the Non-Operator's written acceptance
 of the revised COPAS, such amendment shall become effective as of January 1 of the succeeding
 year. For any calendar year in which approved COPAS rates are used (whether revised or approved
 as remaining the same as the previous year's rates), each Party waives its audit rights
 under the Joint Operating Agreement and COPAS with respect to the agreed rates and costs
 for that year. If the Parties fail to meet or fail to agree on revised rates and costs, the
 rates and costs in effect for the prior calendar year shall remain in effect.

Section 4.6 **<u>Retained Wellbores</u>**.

(a) *Ownership of Existing Perforations*. LH Operating shall continue to own all right, title, and interest
 in and to the wellbores existing as of the Effective Date and as the same were reserved as
 provided in <u>Section 1.1(b)(i)</u> (the "  ***Retained Wellbores*** "),
 including the perforations and completions existing therein, whether such perforations are
 located above, within, or below the San Andres Formation.

(b) *New Perforations and Recompletions*. If any new perforations or recompletions are added after
 the Effective Date to a Retained Wellbore within the San Andres Formation and located on
 the Grayburg-Jackson Property, then (i) Virtus shall own an 65% working interest and LH Operating
 shall own an undivided 35% working interest in such new perforations or recompletions, and
 (ii) all costs, risks, and liabilities, and all revenues, production, and proceeds attributable
 thereto shall be borne and shared by the Parties in accordance with their respective Participation
 Percentages, subject to the terms of the applicable Joint Operating Agreement.

(c) *Consent Right*. No new perforations or recompletions within the San Andres Formation on the Grayburg-Jackson
 Property may be undertaken in a Retained Wellbore without Virtus's prior written consent,
 which consent may be withheld for any reason a prudent operator would consider.

(d) *Production from Multiple Zones*. If any Retained Wellbore produces, or after recompletion is capable
 of producing, from depths or formations other than the San Andres Formation in addition to
 the San Andres Formation, then the Parties shall cooperate in good faith to establish a mutually
 agreeable allocation of costs, revenues, and production as between (i) the San Andres
 Formation perforations (owned and shared by the Parties in accordance with their respective
 Participation Percentages), and (ii) any other formations owned exclusively by LH Operating.

(e) *After-Acquired Wellbores*. The provisions of this <u>Section 4.6</u> shall likewise apply to any
 wellbores hereafter acquired by LH Operating or its Affiliates from third parties that, at
 the time of acquisition, are producing from formations other than the San Andres Formation
 but are recompletion candidates for the San Andres Formation. For clarity, such after-acquired
 wellbores shall constitute "Subsequent Properties" under <u>Article 3</u> (*Area of Mutual Interest and Subsequent Acquisitions*) and be subject to the option rights therein,
 provided that, upon acquisition by LH Operating, such wellbores shall be treated as Retained
 Wellbores for purposes of this <u>Section 4.6</u>.

**ARTICLE 5<br> Assignment Restrictions; Term**

Section 5.1 **<u>Assignments of Interest</u>**<u>.</u> Neither Party shall Assign all or any portion of its interest in the Grayburg-Jackson Property (the "***Joint Interests***") to a third-party without first complying with this <u>Article 5</u>. Any Assignment or purported Assignment in violation of this <u>Article 5</u> shall be null and void.

Section 5.2 <u>**Mutual Right of First Offer**.</u>

(a) *Grant of Right*. During the period beginning on the Effective Date and continuing for five years
 thereafter, neither Party interested in selling all or any part of their Joint Interests
 (as applicable, the "  ***ROFO Selling Party***") may undertake a planned
 process to market and sell all or any portion of its Joint Interests to a third party (and,
 for the avoidance of doubt, this <u>Section 5.2</u> shall not apply to or be triggered
 by any unsolicited offer or inquiry received by a third-party) without first offering to
 sell such Joint Interests to the other Party (the "  ***ROFO Non-Selling Party*** ")
 pursuant to this Section.

(b) *ROFO Notice*. If the ROFO Selling Party decides to initiate and pursue a planned sale process
 for all or any portion of its Joint Interests, the ROFO Selling Party shall deliver written
 notice (a "  ***ROFO Notice***") to the ROFO Non-Selling Party stating
 (i) the specific Joint Interests proposed to be sold (the "  ***Offered Interests*** "),
 and (ii) the material terms and conditions on which the ROFO Selling Party proposes
 to Assign the Offered Interests.

(c) *ROFO Offer Period*. The ROFO Non-Selling Party shall have 10 Business Days after receipt of
 a ROFO Notice to deliver written notice to the ROFO Selling Party of its intention to proceed
 with negotiations on a potential transaction. The written notice must include a definitive
 offer stating the purchase price and any material terms and conditions upon which the ROFO
 Non-Selling Party is willing to purchase all (but not less than all) of the Offered Interests
 (the "  ***ROFO Offer*** ").

(d) *Negotiation Period; Permitted Third-Party Sale*. If the ROFO Non-Selling Party fails to timely deliver
 a ROFO Offer under <u>Section 5.2(c)</u>, fails to respond, or affirmatively elects
 not to proceed, then the ROFO Selling Party may immediately proceed with its planned marketed
 sale of the Offered Interests. If the ROFO Non-Selling Party timely delivers a ROFO Offer,
 then, for the remainder of the 45-day period following delivery of the ROFO Notice (the "  ***ROFO Negotiation Period*** "), the Parties shall negotiate in good faith to seek to
 consummate a transaction for the sale of the Offered Interests. If, at the end of the ROFO
 Negotiation Period, the Parties have not executed a definitive agreement for such sale, the
 ROFO Selling Party may proceed with its planned marketed sale of the Offered Interests to
 any third-party.

(e) *Renewal of ROFO Right*. If the ROFO Selling Party does not consummate an Assignment of the Offered
 Interests to a third-party within one year from the date a ROFO Offer is delivered, then
 any subsequent plan to market and sell all or any portion of its Joint Interests shall once
 again be subject to this <u>Section 5.2</u> and require a new ROFO Notice.

(f) *No Obligation to Sell*. Nothing in this <u>Section 5.2</u> obligates either Party to
 sell any of its Joint Interests to the ROFO Non-Selling Party or to any third-party, and
 the ROFO Selling Party retains the right to withdraw any proposed sale at any time prior
 to execution of a definitive agreement with the ROFO Non-Selling Party or a third-party.

Section 5.3 **<u>Termination</u>**.

(a) *Term*.
 Unless earlier terminated as provided below, this Agreement shall continue in full force
 and effect until the later of the expiration of the AMI Term or fulfillment (or earlier termination)
 of all obligations set forth in <u>Article 4</u> (*Drilling Program*).

(b) *Termination for Default*. Either Party may terminate this Agreement (excluding those provisions that
 expressly survive termination) upon written notice to the other Party if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the
 other Party materially breaches any provision of this Agreement and fails to cure such breach
 within 90 days after receiving written notice specifying the nature of the breach in reasonable
 detail; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the
 other Party (1) makes a general assignment for the benefit of creditors; (2) suffers
 or permits the appointment of a receiver for its business or material assets; (3) commences
 or becomes the subject of any proceeding as debtor under the federal bankruptcy laws or any
 state statute relating to insolvency or creditor protection; or (4) engages in fraud
 or makes a material misrepresentation with respect to its performance under this Agreement
 or any JOA entered into pursuant to this Agreement.

(c) *Survival of Rights and Remedies*. The termination of this Agreement in accordance with this Section
 shall not impair, impede, or otherwise adversely affect any right, claim, or cause of action
 that either Party may have arising prior to or as a result of such termination, including
 the right to receive any payment or assignment owed under this Agreement.

(d) *Survival of Provisions*. Unless expressly stated otherwise, the provisions of this Agreement that
 by their nature should survive termination shall so survive.

(e) *Survival of JOAs*. Notwithstanding anything in this Section to the contrary, for each JOA executed
 as required under this Agreement and applicable to wells drilled pursuant to this Agreement,
 such JOA shall remain in full force and effect and shall survive until terminated in accordance
 with its own terms, and termination of this Agreement shall not operate to terminate any
 such JOA.

**ARTICLE 6<br> Covenants**

Section 6.1 **<u>Outside Business Interests</u>**. Except as otherwise provided in this Agreement, nothing precludes either Party or any of its Affiliates from (a) engaging in any business, (b) drilling and completing any well, or (c) acquiring or obtaining any property of any nature or kind, whether or not in competition with the operations and activities contemplated by this Agreement. Except as otherwise provided herein, any such activities and operations may be engaged in by either Party or any of its Affiliates without consulting the other Party or inviting or allowing the other Party to participate therein. The doctrine of corporate opportunity, or any analogous or similar doctrine, shall not apply with respect to any such activity or operation, and neither Party shall have any duty or obligation, except as expressly set forth in this Agreement or the JOA, to the other Party and its Affiliates with respect to the matters provided in this Agreement or the JOA.

Section 6.2 **<u>Tax Treatment</u>**. The Parties desire to jointly explore and develop the Grayburg-Jackson Property, but do not intend to treat their relationship hereunder as a partnership for United States federal and applicable state income tax purposes. The Parties each agree not to report such undertaking as a tax partnership and, if necessary, the Parties agree they will elect out of the provisions of Subchapter K, Chapter 1, Subtitle A, of the Code, or similar provisions of applicable state laws. The Parties further agree that neither will elect to change the tax status applicable to the transactions contemplated by this Agreement to a tax partnership or take any action that could cause the joint undertaking described herein to be treated as a partnership for tax purposes.

Section 6.3 **<u>Force Majeure</u>**. Each Party's obligations under this Agreement, whether express or implied, shall be subject to all applicable laws, rules, regulations, and orders of any governmental authority having jurisdiction, including restrictions on the drilling, completion, and production of wells, and regulation of the price or transportation of oil, gas, and other substances covered hereby. When drilling, completion, reworking, production, or other operations are prevented or delayed by such laws, rules, regulations, or orders, or by inability to obtain necessary permits, equipment, services, material, water, electricity, fuel, access, or easements, or by fire, flood, adverse weather conditions, war, sabotage, rebellion, insurrection, riot, strike, or labor disputes, or by inability to obtain a satisfactory market for production or failure of purchasers or carriers to take or transport such production, or by any other cause not reasonably within a Party's control, this Agreement shall not terminate because of such prevention or delay, and, at the delayed Party's option, the period of such prevention or delay shall be added to any applicable deadline. Neither Party shall be liable to the other for breach of any provisions or implied covenants of this Agreement when drilling, production, or other operations are so prevented or delayed.

Section 6.4 **<u>Saltwater Disposal</u>**.

(a) Beginning
 on the Effective Date and ending at 11:59 p.m. MDT on September 9, 2026 (the "  ***SWD Term*** "), produced saltwater attributable to (i) wells drilled under the
 Initial Drilling Program, (ii) any Drilling Commitment or other Development wells, (iii) any
 vertical recompletions, (iv) any after-acquired or AMI wells in which either Party owns
 an interest within the Grayburg-Jackson Property, and (v) San Andres Formation recompletions
 of Retained Wellbores on the Grayburg-Jackson Property (collectively, "  ***Covered Wells***") may, at the electing Party's option, be disposed into saltwater
 disposal facilities owned or operated by the other Party or its Affiliate ("  ***Party-Owned SWD*** ").

(b) The
 initial internal transfer rate for disposal into any Party-Owned SWD during the SWD Term
 shall be $0.60 per barrel ("  ***SWD Rate*** "). All saltwater disposal
 charges under this <u>Section 6.4</u> (whether at the SWD Rate for Party-Owned SWD or
 at third-party actuals) are "Lease Operating Expenses" for the applicable Covered
 Wells and shall be billed through JIB and borne by the Parties in accordance with their respective
 Participation Percentages, except to the extent a Party's interest in a particular
 operation is carried, in which case such charges shall burden payout and be included as operating
 costs for payout calculations under the applicable carry or JOA provisions.

(c) Upon
 the expiration of the SWD Term, the SWD Rate will be reviewed in conjunction with the annual
 review of COPAS under <u>Section 4.5(e)</u>.

Section 6.5 **<u>UCC-3 Financing Statement Terminations</u>**. Promptly following the Effective Date, LH Operating shall make reasonable efforts to have the following financing statements on file with the Texas Secretary of State removed by obtaining a UCC-3 Termination Statement from the Secured Party and promptly providing Virtus with copies of the same when filed:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. [\*\*\*]

Section 6.6 **<u>Assumption and Indemnification</u>**.

(a) *Assumption*.
 As partial consideration for this Agreement, LH Operating assumes and accepts full responsibility
 and liability for all conditions, risks, claims, demands, causes of action, damages, and
 losses of every kind and character, whether known or unknown, fixed or contingent (including,
 without limitation, fines, penalties, remedial obligations, court costs, and attorneys'
 fees) associated with the Contracts and the LH Operating Leases, whether known or unknown,
 foreseeable or unforeseeable, fixed or contingent, arising before the Effective Date, including,
 without limitation, breaches thereof, and any obligations relating to the investigation,
 remediation, cleanup, removal, or disposal of hazardous substances or environmental contamination
 imposed under any local, state, or federal law, regulation, order, or common law.

(b) *Scope*.
 LH Operating shall **DEFEND, INDEMNIFY**, **RELEASE,** and **HOLD HARMLESS** Virtus
 and Virtus' its parent, subsidiaries, Affiliates, joint-venturers, partners, joint-interest
 owners, co-owners, lessees, co-lessees, invitees, consultants, contractors and subcontractors
 of every tier, officers, directors, members, employees, servants, representatives, agents,
 and insurers (collectively "  ***Virtus Parties***") from and against all
 claims, demands, causes of action, damages, and losses of every kind and character, whether
 known or unknown, fixed or contingent (including, without limitation, fines, penalties, remedial
 obligations, court costs, and attorneys' fees) (collectively, the "  ***Indemnifiable Claims***") arising out of or relating to (i) the LH Operating Leases or
 Contracts with respect to periods prior to the Effective Date, or (ii) the acts, omissions,
 or liabilities of LH Operating or its predecessors. This Section includes first- and third-party
 Indemnifiable Claims. **LH Operating's obligations under this Section includes Indemnifiable Claims resulting from the sole, active, passive, concurrent, or comparative negligence, strict liability, or other fault or violation of law of or by any Virtus Parties, excepting only gross negligence or willful misconduct by Virtus Parties.** 

(c) *Process*.
 The applicable Virtus Party shall promptly notify LH Operating of any Indemnifiable Claim.
 Delay in notice shall not relieve LH Operating of its obligations unless LH Operating is
 materially prejudiced by the delay. LH Operating must promptly assume and diligently conduct
 the defense of each Indemnifiable Claim, at LH Operating's own expense, using counsel
 acceptable to the Virtus Party. LH Operating shall not settle or compromise an Indemnifiable
 Claim without the Virtus Party's prior written consent if it (i) does not include an
 unconditional release of the Virtus Party, (ii) imposes any payment or admission of wrongdoing
 on the Virtus Party, (iii) imposes any material obligation on the Virtus Party, or (iv) includes
 an admission of liability by Virtus Party. This indemnification is not subject to any limitation
 of liability and is independent of insurance obligations. If LH Operating fails or refuses
 to promptly assume and defend the Virtus Party, or if a conflict arises, the Virtus Party
 may assume the defense and LH Operating shall reimburse the Virtus Party for all resulting
 losses, costs, and expenses. This Section shall survive the closing of the transaction contemplated
 by this Agreement indefinitely and shall not merge with or into the Existing Lease ABOS.

**ARTICLE 7<br> Miscellaneous**

Section 7.1 **<u>Waiver</u>**. No waiver of any provision of this Agreement will be effective unless it is in writing and signed by the Party granting the waiver. No failure or delay in exercising any right or remedy under this Agreement will operate as a waiver of that right or remedy. A waiver granted on one occasion will not operate as a waiver on future occasions.

Section 7.2 **<u>Severability</u>**. If any provision of this Agreement is deemed invalid, prohibited, or unenforceable, it shall not affect the validity of the remaining provisions. If such provision can be more narrowly drawn to not be invalid, prohibited, or unenforceable, it shall be so narrowly drawn.

Section 7.3 **<u>No Third-Party Beneficiaries</u>**. Except as provided herein, this Agreement shall not confer rights or remedies upon anyone other than the Parties and their respective successors and assigns. The Parties reserve the right to amend, modify, terminate, supplement, or waive any or all provisions of this Agreement without the approval of third-party beneficiaries.

Section 7.4 **<u>Further Assurances</u>**. Each Party shall execute all documents and take further action as may be reasonably requested or required to effectuate the terms and intent of this Agreement.

Section 7.5 **<u>Amendments</u>**. To be effective, an amendment to this Agreement must be in a writing that identifies itself as an amendment and signed each Party's authorized representatives.

Section 7.6 **<u>Assignment</u>**<u>.</u>

(a) Neither
 Party may Assign this Agreement or any of its rights or interests under this Agreement, or
 delegate any of its obligations or liabilities under this Agreement, without the prior written
 consent of the other Party, which consent may not be unreasonably withheld, conditioned,
 or delayed. Any such purported Assignment or delegation is void *provided, however*,
 either Party may mortgage its rights or interests under this Agreement to obtain, maintain
 or create financing arrangements or collateral arrangements benefitting such Party, subject
 to the terms and provisions of this Agreement.

(b) Notwithstanding <u>Section 7.6(a)</u>, either Party may, without the consent of the other Party, Assign
 this Agreement or any of its rights or interests under this Agreement, or delegate any of
 its obligations or liabilities under this Agreement, to one or more Affiliates of such Party; *provided*, *however*, the assigning or delegating Party shall remain liable and
 responsible for all of its obligations and liabilities under this Agreement incurred before
 such assignment or delegation.

Section 7.7 **<u>Successors and Assigns</u>**. This Agreement will bind and inure to the benefit of each Party and their heirs, executors, administrators, legal representatives, permitted successors, and permitted assigns.

Section 7.8 **<u>Calculation of Deadlines</u>**. If the date specified in this Agreement for giving any notice or taking any action is not a Business Day (or if the period during which any notice is required to be given or any action taken expires on a date which is not a Business Day), then the date for giving such notice or taking such action (and the expiration date of such period during which notice is required to be given or action taken) shall be the next day which is a Business Day. "***Business Day***" means any day other than a Saturday, a Sunday, or a day on which banks are closed for business in Fort Worth, Texas.

Section 7.9 **<u>Entire Agreement</u>**. This Agreement (and each of the Exhibits incorporated herein) supersedes all discussions, communications, and agreements (whether oral or written) between the Parties with respect to its subject matter and constitutes (along with the documents referred to in this Agreement) a complete and exclusive statement of the terms of the agreement between the Parties with respect to its subject matter.

Section 7.10 **<u>Memorandum of Agreement</u>**. Contemporaneously with the execution hereof, the Parties shall execute a memorandum of agreement in the form attached as <u>Exhibit E</u> to be promptly recorded by Virtus in the real property records of each county in which the Grayburg-Jackson Property is located and promptly upon the expiration of the term, the Parties shall execute a full release and termination of such memorandum and record such release and termination in the real property records of each county; *provided, however*, if this Agreement has expired or terminated, each Party is hereby authorized and the other Party agrees that any such Party may execute and record in the applicable real property records any such release and termination without the execution, consent or acknowledgement of the other Party and such release and termination shall be effective for all purposes.

Section 7.11 **<u>Notice</u>**.

(a) A
 notice or other communication under this Agreement will only be effective if it is in writing
 and received by the Party to which it is addressed. It will be deemed to have been received
 as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) if
 a paper copy is personally delivered, on the date of delivery;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) if
 a paper copy is delivered by a delivery organization that allows users to track deliveries,
 upon receipt as stated in the tracking system;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) if
 a paper copy is mailed by registered or certified mail (return-receipt requested), on the
 third business day following the date posted with postage prepaid;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) if
 a copy is delivered by email, upon the earlier of (1) the date electronic confirmation
 of read receipt is received by the transmitting Party (as evidenced by the transmitting Party's
 electronic mail server or system), (2) when the recipient directly communicates acknowledgment
 of the message's receipt (except that automatic read receipts or auto-replies do not
 qualify as acknowledgments); or (3) on the second business day following the date of
 transmission (as shown on the transmitting Party's electronic mail server or system);
 or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) if
 the intended recipient rejects or otherwise refuses to accept it, or if it cannot be delivered
 because of a change in address (physical or electronic) for which no notice was given, then
 upon that rejection, refusal, or inability to deliver.

(b) For
 a notice under this agreement to be valid, it must be addressed using the information below
 for that Party or any other information stated by that Party in a notice in accordance with
 this Section.

<u>To LH Operating</u>:

[\*\*\*]

<u>To Virtus</u>:

[\*\*\*]

(c) If
 a notice addressed to a Party is received after 5:00 p.m. on a business day at the location
 specified in the address for that Party, or on a day that is not a business day at the location
 specified in the address for that Party, then the notice will be deemed to have been received
 at 9:00 a.m. on the next business day. Each Party's attorney is authorized to
 give any notice on behalf of their client. Either Party may change their address or email
 by providing notice to the other Party consistent with this Section.

Section 7.12 **<u>Covenants Running With the Land</u>**. This Agreement and the terms, conditions and covenants hereof shall be deemed to be covenants running with the lands and equitable servitudes, and a burden upon each Party's interest in the Grayburg-Jackson Property and the Designated Sections covered hereby. Such obligations shall burden each Party's interest, and the interest of any permitted successor or assign of such Party, in and to the Grayburg-Jackson Property covered hereby, for the benefit of the other Party.

Section 7.13 **<u>Conflicts Between Agreements</u>**.

(a) The
 applicable JOA shall, together with and subject to this Agreement, govern all operations
 conducted in the Contract Area (as defined in the JOA) covered by such JOA, as between the
 Parties to this Agreement who are also parties to the JOA.

(b) If
 there is an express conflict or inconsistency between the terms of this Agreement and the
 terms of the applicable JOA, then, as between the Parties to this Agreement, the terms of
 this Agreement shall prevail to the extent of the conflict or inconsistency.

(c) If
 any interest contemplated under this Agreement is or becomes subject to a JOA that includes
 a third-party who is not a Party to this Agreement, then the terms of that third-party JOA
 shall control. However, solely as between the Parties to this Agreement who are parties to
 such third-party JOA, both the third-party JOA and this Agreement shall apply to the greatest
 extent practicable.

(d) If,
 at any time, one or more of the Parties to this Agreement or any of their respective Affiliates
 acquire all of the remaining Working Interest in any Contract Area (as defined in the JOA)
 covered by a JOA with a third-party, then that third-party JOA shall terminate, and the JOA
 attached as <u>Exhibit D</u> to this Agreement shall thereafter govern operations with
 respect to that Working Interest.

Section 7.14 **<u>Specific Performance</u>**. Each Party acknowledges and agrees that a non-breaching Party may be irreparably damaged in the event any of the provisions of this Agreement or any associated agreement delivered hereunder are not performed by a breaching Party in accordance with their specific terms or otherwise are breached, and that it may be inadequate or impossible, or both, to measure in money such damages to such non-breaching Party. Accordingly, each of the Parties agrees that a non-breaching Party shall be entitled to seek specific performance of any of the breaching Party's obligations under this Agreement or any associated Agreement delivered hereunder without posting of any bond.

Section 7.15 **<u>Relationship of the Parties</u>**. This Agreement, and the rights and liabilities under this Agreement, are several and not joint or collective, and are not intended to create, and shall not be construed to create, an association for profit, a trust, a joint venture, a mining partnership or other relationship of partnership, or entity of any kind between or among the Parties.

Section 7.16 **<u>Burden and Benefit</u>**. Each Party agrees that: (a) it has voluntarily agreed to define its rights, liabilities, and obligations arising from or related to this Agreement pursuant to this Agreement, (b) it had the opportunity to be, or was, represented by competent counsel in connection with the negotiation, drafting, and execution of this Agreement, and, if it elected to forego representation by counsel, that decision does not and shall not, in any way, affect the enforceability of this Agreement or any of its terms, (c) it has sufficient knowledge and experience in financial and business matters to evaluate the merits and the risks associated with this Agreement, (d) it is not in a significantly disparate bargaining position relative to the other Party, (e) this Agreement embodies the justifiable expectations of sophisticated parties derived from arm's-length negotiations, and (f) no Party has any special or fiduciary relationship with the other that would justify any expectation beyond that of ordinary and independent contracting parties.

Section 7.17 **<u>Waiver of Reliance</u>**. As material consideration and inducement to enter into this Agreement, each Party expressly disclaims and waives reliance on: (a) any written or oral representation, warranty, statement, document, material, or other assertion (or non-assertion) that has been or will be provided by the other Party, except as explicitly stated in this Agreement; (b) any obligation of the other Party to disclose facts not required herein; and (c) any representation, warranty, statement, material, or other assertion (or non-assertion) by any officer, agent, representative, or employee of either Party beyond those explicitly stated in this Agreement.

Section 7.18 **<u>Waiver of Non-Party Liability</u>**. As material consideration and inducement to enter into this Agreement, each Party expressly waives and releases (a) any rights, claims, demands, or causes of action that may otherwise be available in law or in equity, or granted by statute, arising out of or relating to this Agreement, including its negotiation, execution, performance, enforcement, or breach, against any past, present, or future director, officer, employee, stockholder, member, manager, attorney, affiliate, or financing party of any Party hereto (collectively, "***Nonparty Affiliates***"); and (b) any rights, claims, demands, or causes of action that may otherwise be available in law or in equity, or granted by statute, to avoid or disregard the entity form of the other Party under any theory, including, but not limited to equity, agency, control, instrumentality, alter ego, domination, sham, single business enterprise, piercing (or reverse piercing) the corporate veil, unfairness, undercapitalization, or de-emphasis of corporate formalities. Nonparty Affiliates are express third-party beneficiaries under this Agreement.

Section 7.19 **<u>Attorneys' Fees</u>**. In any action, suit, or proceeding arising out of or related to this Agreement (whether in statute, contract, tort, or otherwise), the prevailing Party is entitled, in addition to damages or other relief, to an award of all: (a) reasonable attorneys' fees (which shall include, without limitation, paralegal fees, investigative fees, expert witness fees, administrative costs, disbursements, and all other charges billed by an attorney to the prevailing Party), (b) court costs; and (c) reasonable expenses.

Section 7.20 **<u>Governing Law; Forum; Venue</u>**. This Agreement, including all actions, suits, or proceedings seeking to enforce any provision of, or arising out of, or relating to this Agreement or the negotiation, execution, performance, or validity thereof (whether in statute, contract, tort, or otherwise), shall be governed by and construed in accordance with the internal laws of the State of Texas, without regard to its conflict-of-law principles or any borrowing statute. The exclusive forum for all such actions, suits, or proceedings, shall be the State of Texas. The exclusive venue for all such actions, suits, or proceedings shall be the state district courts located in Fort Worth, Tarrant County, Texas, USA (and any state appellate court therefrom). These are mandatory, not permissive, forum and venue provisions. Each Party further waives and agrees not to assert by way of motion, as a defense, or otherwise, that any such action, suit, or proceeding (a) is brought in an inconvenient forum or venue, (b) should be transferred or removed to any court other than the above-named courts, (c) should be stayed by reason of the pendency of some other proceeding in any court other than the above-named courts, or (d) may not be enforced in or by the above-named courts. A final, nonappealable judgment rendered by the courts specified above may be enforced in any other jurisdiction within or outside the United States by suit on the judgment, a certified or exemplified copy of which will be conclusive evidence of the fact and amount of such judgment. If a Party has or later acquires any immunity from jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its property, each such Party irrevocably (i) waives such immunity in respect of its obligations with respect to this Agreement and (ii) submits to the personal jurisdiction of the court(s) described in this Section.

Section 7.21 **<u>Consequential & Punitive Damages</u>**. **No Party shall be liable to the other under this Agreement for indirect, special, incidental, punitive, or consequential damages, including, but not limited to, loss of profits, loss of use of assets or loss of product, loss or inability to use property and equipment or business interruption, and losses resulting from failure to meet other contractual commitments or deadlines. This Section shall not apply to either Party's liability arising from or related to third-party indemnification obligations, if any.**

Section 7.22 **<u>Waiver of Jury Trial</u>**. **Each of the Parties hereby irrevocably waives all right to trial by jury in any action or counterclaim (whether based on contract, tort, or otherwise) arising out of or relating to this Agreement or the transactions contemplated hereby.**

Section 7.23 <u>**Defined Terms**.</u>

"***Affiliate***" means, with respect to any Person and presently or in the future, any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such first Person. The term "***control***" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise, and the terms "***controlled***" and "***controlling***" have meanings correlative thereto.

"***Assignment***" or "***Assign***" or similar words of import shall mean (a) any sale, assignment, transfer, conveyance, gift, exchange, distribution, contribution, or other disposition (whether voluntary or involuntary or by operation of Law), in one or more transactions, whether or not such transactions are related, of any interest in this Lease; and (b) any sale, assignment, transfer, conveyance, gift, exchange, or other disposition (whether voluntary or involuntary or by operation of Law) of equity securities of a Party in one or more transactions that, individually or in the aggregate over any consecutive 24-month period, results in a Change of Control of said Party.

"***Change of Control***" means: (a) a sale of all or substantially all of the assets of a Party, (b) the acquisition, directly or indirectly, of more than 50% of the voting power or beneficial ownership of a Party whether in a single transaction or in multiple transactions (related or unrelated) occurring during any consecutive 24-month period, unless the equity holders of a Party immediately prior to such transactions continue to own, directly or indirectly, more than 50% of the equity or voting power of the surviving or acquiring entity, or (c) any merger, consolidation, or reorganization in which a Party is not the surviving entity or that results in the equity holders of a Party immediately prior to such transaction holding less than 50% of the voting power of the surviving entity.

"***Designated Sections***" means the following Sections, all in Township 17 South, Range 31 East, Eddy County, New Mexico: Sections 3, 4, 5, 6, 7, 8, 9, 10, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 26, 27, 28, 29 and 30, as to all depths.

"***Good and Defensible Title***" shall mean, as of the Effective Date and as to each of the Grayburg-Jackson Properties, ownership of leasehold, fee or royalty interests, or other forms of property interests by virtue of which LH Operating can successfully defend against a claim to the contrary made by a third party, such that LH Operating (and upon closing, Virtus) is (i) entitled to receive not less than the net revenue interest in production of oil, gas, and other minerals from the LH Operating Leases described in <u>Exhibit B-2</u> throughout the life of such Lease, (ii) not obligated to pay costs and expenses associated with LH Operating Leases any amount greater than the working interest shown for such Lease in said <u>Exhibit B-2</u>, (iii) such conveyed interest is not adversely affected or interfered in any material respect with the ownership of the Grayburg-Jackson Properties, and/or (iv) such conveyed interest is free and clear of any and all liens, taxes, encumbrances, mortgages, claims and production payments and any defects or irregularities that would impair use or enjoyment of, or result in a loss of interest in, such Leases.

"***Governmental Body***" means any (a) nation, state, county, city, town, village, district, or other jurisdiction of any nature; (b) federal, state, local, municipal, foreign, or other government; (c) governmental or quasi-governmental authority of any nature (including any governmental agency, branch, department, official, or entity and any court or other tribunal); (d) multi-national organization or body; or (e) body or authority exercising, or entitled to exercise, any administrative, arbitration, executive, judicial, legislative, police, regulatory, or taxing authority or power of any nature.

"***Material Contracts***" means any of the following agreements and contracts binding upon LH Operating or an Affiliate of LH Operating and concerning, arising from, or related to the Grayburg-Jackson Properties: (a) contracts providing for the dedication of leases or any hydrocarbon production therefrom to any purchaser or provider of services, including oil gathering and transportation, gas gathering, processing, transportation or marketing services; (b) gas balancing agreements or other contracts; (c) joint operating agreements, unit operating agreements, unit, pooling or communitization agreements, orders or declarations, exploration agreements, participation agreements, joint venture agreements, area of mutual interest agreements or other similar agreements; (d) any contract between Affiliates of Company; (e) contracts to sell, lease, farmin, farmout, exchange, or otherwise dispose of all or any part of the Grayburg-Jackson Properties; (f) agreements with a primary purpose of providing an indemnity, guaranty or other similar assurance; and (g) contracts that can reasonably be expected to result in aggregate payments to or from, LH Operating or any of its Affiliates in excess of $250,000 during the life of such agreement.

"***Net Acres***" means, as calculated separately with respect to each Lease and insofar and only insofar as such Lease covers the Grayburg-Jackson Properties, (a) the number of gross acres of land covered by such Lease, *multiplied by* (b) the lessor's undivided interest in the oil, gas, and other hydrocarbons in the lands covered by such Lease, *multiplied by* (c) LH Operating's undivided interest in such Lease.

"***Net Revenue Acre***" or "***NRA***" means, as calculated separately with respect to each Lease and insofar and only insofar as such Lease covers the Grayburg-Jackson Properties, (a) the amount that is equal to the Net Revenue Interest for such Lease *multiplied by* (b) the Net Acres for such Lease.

"***Net Revenue Interest***" or "***NRI***" shall mean, as calculated separately with respect to each Lease and insofar and only insofar as such Lease covers the Grayburg-Jackson Properties, the interest (expressed as a percentage or a decimal) in and to all production of oil, gas, or other minerals produced, saved and sold from such Lease after giving effect to all royalties, carried interests, reversionary interests and other burdens on, measured by or payable out of production therefrom.

"***Participation Percentage***" shall mean the following proportions between the Parties and insofar and only insofar as to operations within the San Andres Formation:

---

| | |
|:---|:---|
| **Entity:** | **Percentage:** |
| LH Operating, LLC | 35% |
| Virtus Energy Assets, LLC | 65% |
| &nbsp;&nbsp;&nbsp;**TOTAL** | 100% |

---

"***Person***" means any individual, firm, corporation (including any non-profit corporation), general or limited partnership, limited liability company, joint venture, estate, trust, association, organization, labor union, or other entity or Governmental Body.

"***San Andres Formation***" means the stratigraphic equivalent of 3,314' feet to 4,811' feet measured depth as seen in the spectral gamma ray log, run on June 27, 2010, by Halliburton in the NFE Federal No. 10 well, API 30-01537360 located in Section 8, Township 17S Range 31E, N.M.P.M, Eddy County, New Mexico.

"***Subsequent AMI Participation Percentage***" shall mean the following proportions for all depths, which, for the avoidance of doubt, shall include: (a) the San Andres Formation, (b) those depths above the top of the San Andres Formation, and (c) those depths below the base of the San Andres Formation:

---

| | |
|:---|:---|
| **Entity:** | **Percentage:** |
| LH Operating, LLC | 35% |
| Virtus Energy Assets, LLC | 65% |
| &nbsp;&nbsp;&nbsp;**TOTAL** | 100% |

---

"***Working Interest***" or "***WI***" shall mean, as calculated separately with respect to each Lease and insofar and only insofar as such Lease covers the San Andres Formation, the interest in and to the Lease, insofar as such interest in such Lease is burdened with the obligation to bear and pay costs and expenses of maintenance, development, and operations.

\* \* \* \* \*

This Agreement is executed on the dates of acknowledgment below, but effective for all purposes as of the Effective Date.

---

| | |
|:---|:---|
| **VIRTUS ENERGY ASSETS, LLC** | **VIRTUS ENERGY ASSETS, LLC** |
| a Delaware limited liability company | a Delaware limited liability company |
| By: | /s/ Lance L. Taylor |
| Name: | Lance L. Taylor |
| Title: | Chief Executive Officer |

---

STATE OF TEXAS § <br> § <br> COUNTY COLLIN §

This instrument was acknowledged before me on September 8, 2025, by Lance L. Taylor, as Chief Executive Officer, of **VIRTUS ENERGY ASSETS, LLC**, on behalf of said limited liability company.

---

| |
|:---|
| /s/ Diana Lee Brannan |
| Notary Public, State of Texas |

---

 

*[SIGNATURE PAGES CONTINUE]*

 

Signature Page to<br> Joint Development, Leasehold Purchase, and

Area of Mutual Interest Agreement

 

This Agreement is executed on the dates of acknowledgment below, but effective for all purposes as of the Effective Date.

---

| | |
|:---|:---|
| **LH OPERATING, LLC** | **LH OPERATING, LLC** |
| a Texas limited liability company | a Texas limited liability company |
| By: | /s/ Mitchell B. Trotter |
|  | Mitchell B. Trotter, President and CFO |

---

STATE OF TEXAS § <br> § <br> COUNTY HARRIS §

This instrument was acknowledged before me on September 9, 2025, by Mitchell B. Trotter, as President and CFO, of **LH OPERATING, LLC**, a Texas limited liability company on behalf of said limited liability company.

---

| |
|:---|
| /s/ Xuan Vandeberg |
| Notary Public, State of Texas |

---

*[SIGNATURE PAGES END]*

 

Signature Page to<br> Joint Development, Leasehold Purchase, and

Area of Mutual Interest Agreement

## Exhibit 99.1

**Exhibit 99.1**

**EON Resources Inc. Announces**

**$45.5 million of Funding Closed with the Simultaneous**

**Settlement of Seller Obligations and Retirement of Senior Debt**

**HOUSTON, TX / September 10, 2025 / EON Resources Inc. (NYSE American: EONR) ("EON" or the "Company")** is an independent upstream energy company with 20,000 leasehold acres in the Permian Basin. The fields have a total of 750 producing and injection wells producing over 1,000 barrels of oil per day. Today, the Company announced the successful closing of total funding of $45.5 million yesterday, September 9, 2025, through a combination of volumetric funding instrument ("VMA") and a farmout of the Company's San Andres rights across its leasehold to a subsidiary of Virtus Energy Partners, LLC ("Virtus").

$40.5 million of the funding was provided by a private family office that invests directly in upstream energy industry projects.

**The $45.5 million funding components and sources**:

● $20.0 million of the funding was from the private family office in consideration for a 15% perpetual overriding
royalty interest in existing leases and wells in the Grayburg Jackson Field ("GJF").

● $20.5 million of the funding was from the private family office for a 5% perpetual overriding royalty
interest in the San Andres formation in wells to be drilled under the farmout program with Virtus.

● $5.0 million of the funding was from Virtus in consideration for a farmout of the Company's rights
in the San Andres formation in which Virtus will own a 65% operated working interest and EON retains a 35% non-operated working interest.
Virtus and the Company believe as many as 90 horizontal San Andres wells are prospective in the GJF. Based in Frisco Texas, Virtus is
a newly formed exploration and production company with an impressive track record in the Permian Basin and many other US Basins. The primary
business strategy of Virtus is to create value in under-managed conventional reservoirs by applying modern technology and techniques.
Combining Virtus' skillset with the EON assets is intended to unlock great value for all parties.

**Use of the proceeds**:

● Completion of a $20.5 million cash consideration to the seller of the GJF to the Company ("Seller")
returned to EON the 10% overriding royalty interest on the GJF valued at $13.5 million, retirement of the $20 million Seller note ($15
million principal plus accrued interest), and the issuance of 1.5 million shares of EON Class A common stock in exchange for the return
to treasury of the preferred units owed by Seller with a redemption value of $27 million. Additional details are available in the Amended
Seller Agreement press release on the EON website.

● Retired senior debt of approximately $19.3 million. The payoff of the senior debt eliminated a $700,000
per month amortization payment (principal and interest) whereby the Company anticipates a monthly cash flow improvement of $400,000 to
$600,000.

● Funds raised in excess of the cash payment to the Seller, the retirement of the senior debt and any fees
and closing costs will be used to pay other obligations and fund field activities including workovers within the GJF commencing in the
fourth quarter of 2025.

"This funding is a total transformation and a major clean-up of our balance sheet by eliminating the senior and Seller debt and putting to rest the complex capital structure from the closing of our original acquisition," said Mitchell B. Trotter, CFO of EON. "The removal of these complexities and reduction of the monthly payments allows us to focus on our original goal, the enhancement and exploitation of our asset base to grow the Company."

"This was a total team effort that almost nobody believed we could do," said Dante Caravaggio, President and CEO of EON. "We put together the pieces of the puzzle by raising the money with the sale of overriding royalty interests and farming out our San Andres rights to a proven operator with extensive horizontal San Andres development experience. We are grateful to our investors, as well as to our industry and financial consultants, Virtus, Enstream Capital, EA Energy, Roth Capital Partners, Jack Holmes and Jarrett Hasson; all of whom had a hand in achieving this immense success for our shareholders. These transactions netted approximately $40 million in shareholder value."

"The unsung heroes are the behind the scene lawyers and accountants," continued Mr. Caravaggio. "The legal teams sorted out hundreds of pages across dozens of documents. The legal team for Virtus and their sponsor as well as for the family office were excellent to work with. I want to give a special thanks to the EON legal team of David, Matt and Alex."

● David M. Smith: David is the General Counsel for EON. He is a licensed attorney in Texas with 40+ years
of experience in the legal field of oil and gas exploration and production, manufacturing, purchase and sale agreements, exploration agreements,
land and leaseholds, right of ways, pipelines, surface use, joint operating agreements, joint interest agreements, participation agreements
and operations as well as transactional and litigation experience in oil and gas, real estate, bankruptcy and commercial industries.

● Matthew L. Ogurick: Matt is a partner in Pryor Cashman's Corporate Group, and has been involved
in EON's growth and development from the beginning. Pryor Cashman is a full service award-winning midsize law firm headquartered
in New York City with over 200 attorneys across three offices including Miami and Los Angeles. The firm serves a diverse client base that
spans around the globe.

● Alexander Kuiper: Alex is the Managing Partner of the Kuiper Law Firm, PLLC, a full-service practice with
recognized expertise in energy, real estate, and business law. Alex, a Board-Certified specialist in Oil, Gas & Mineral Law, who provides
strategic guidance to clients navigating complex transactions served as legal counsel in connection with the funding.

**About EON Resources Inc.**

EON is an independent upstream energy company focused on maximizing total returns to its shareholders through the development of onshore oil and natural gas properties in a diversified portfolio of long-life producing oil and natural gas properties and other energy holdings. EON's approach is to build an energy company through acquisition and through selective development of its properties. Class A Common Stock of EON trades on the NYSE American Stock Exchange under the symbol of "**EONR"** and the Company's public warrants trade under the symbol of "**EONR WS"**. For more information on the Company, please visit the EON website.

**About the Grayburg-Jackson Field Property**

Our Grayburg-Jackson Field ("GJF") is primarily a waterflood property located on the Northwest Shelf of the Permian Basin in Eddy County, New Mexico. The GJF comprises of 13,700 contiguous leasehold acres with 342 producing wells, 207 injection wells and 1 water source well for a total of 550 wells. Leasehold rights include the Seven Rivers, Queen, Grayburg and San Andres intervals that range from as shallow as 1,500 feet to 4,000 feet in depth. The December 2024 reserve report from our third-party engineer, Haas and Cobb Petroleum Consultants, LLC, estimates proven reserves of approximately 14.0 million barrels of oil and 2.8 billion cubic feet of natural gas. The mapped original-oil-in-place ("OOIP") is approximately 956 million barrels of oil. Primary production is currently from the Seven Rivers formation. In addition to proven reserves, the Company believes it may access an additional 34 million barrels of oil by adding perforations in the Grayburg and San Andres formations, plus another 40 million barrels from a horizontal drilling program in the San Andres. More information on the property can be located on the Grayburg-Jackson Field page of our website.

**About the South Justis Field Property**

The South Justis Field ("SJF") is a carbonate reservoir similar to the rest of the Permian, and is located in Lea County, New Mexico approximately 100 miles from the GJF. The SJF is comprised of 5,360 contiguous acres containing 208 total producing and injection wells with well spacing of 50 acres. The producing formations include the Glorietta, Blinebry, Tubb, Drinkard and Fusselman intervals that range from 5,000 feet to 7,000 feet in depth. The original-oil-in-place ("OOIP") is approximately 207 million barrels of oil. More information on the property can be located on the South Justis Field page of our website.

**Forward-Looking Statements**

This press release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties that could cause actual results to differ materially from what is expected. Words such as "expects," "believes," "anticipates," "intends," "estimates," "seeks," "may," "might," "plan," "possible," "should" and variations and similar words and expressions are intended to identify such forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Such forward-looking statements relate to future events or future results, based on currently available information and reflect the Company's management's current beliefs. A number of factors could cause actual events or results to differ materially from the events and results discussed in the forward-looking statements. Important factors - including the availability of funds, the results of financing efforts and the risks relating to our business - that could cause actual results to differ materially from the Company's expectations are disclosed in the Company's documents filed from time to time on EDGAR (see www.edgar-online.com) and with the Securities and Exchange Commission (see www.sec.gov). Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

**Investor Relations**

Michael J. Porter, President

PORTER, LEVAY & ROSE, INC.

mike@plrinvest.com

## Exhibit 99.2

**Exhibit 99.2**

**EON Resources Inc. Announces**

**Farmout of San Andres Rights to Virtus Energy Partners, LLC**

**$300+ million San Andres Horizontal Drilling Program**

**Up to 90 Wells with a Reserve Value Estimated at $95+ million in Net PV-10**

**HOUSTON, TX / September 11, 2025 / EON Resources Inc. (NYSE American: EONR) ("EON" or the "Company")** is an independent upstream energy company with 20,000 leasehold acres in the Permian Basin. The fields have a total of 750 producing and injection wells producing over 1,000 barrels of oil per day. Today, the Company announced the entering into a Farmout Agreement (the "Farmout") with a subsidiary of Virtus Energy Partners, LLC ("Virtus") on September 9, 2025.

Under the Farmout, Virtus acquired the right to develop the Company's San Andres formation within the Grayburg Jackson Field ("GJF") where it believes as many as 90 horizontal drilling locations are prospective. Virtus will be the designated operator and lead the development efforts.

The Frisco, Texas based Virtus team has a recent and relevant history as the preeminent horizontal San Andres developer in the Permian Basin. Organically and through acquisitions, Virtus created immense value in the state line area of Texas and New Mexico; growing from zero to more than thirty thousand gross operated barrels of oil equivalent per day from more than two hundred horizontal San Andres wells. Virtus' management team gained their expertise developing conventional and unconventional reservoirs with modern technology in most of the notable United States basins before settling on their strategy of redeveloping conventional oilfields in the Permian Basin of Texas and New Mexico.

The closing of the drilling program farmout was simultaneous with the closing of the funding for the settlement of seller obligations and the retirement of senior debt. For additional information regarding the funding, the related press release is available on the EON press releases page of our website.

**Highlights of the program and farmout agreement**:

● Virtus paid EON $5.0 million for the acquisition of 65% working interest in the leasehold rights in the
San Andres formation. The Company retains a 35% non-operated working interest in the San Andres and 100% operated working interest in
the remaining productive formations.

● As many as 90 horizontal wells are expected to be drilled at a cost between $3.5 million and $4.0 million
per well. Cumulative capital investment by Virtus and EON is expected to exceed $300 million over the life of the project.

● The annual drilling program is expected to range from 10 to 20 new horizontal wells per year with initial
production rates of 300 to 500 barrels of oil per day ("BOPD").

● Over the life of the drilling program, gross oil production is expected to exceed 20,000 BOPD with 35%,
or 7,000 BOPD, net to the Company's working interest.

● The first three wells are anticipated to be completed by mid-year 2026.The costs associated with the first
three wells are solely Virtus' responsibility.

● The Economic Summary Projection of the anticipated development plan (the "Projection") prepared
by Virtus estimates more than ninety-five million dollars of reserve value based on net present value discounted at ten percent ("NPV-10")
net to EON's retained ownership interest. The Projection estimates the reserves attributable to EON's interest may exceed
ten million barrels of oil and six billion cubic feet of natural gas.

"As we scouted the Permian Basin for our next project, Virtus was pleased to find the Grayburg Jackson Field," said Lance Taylor, Chief Executive Officer of Virtus. "The subsurface characteristics are very similar to, and in many ways, better than, our incredibly successful horizontal San Andres efforts along the Texas and New Mexico state line. We have great expectations for this new venture and are thrilled to be partnering with EON's team and our new sponsor."

"We are very pleased to team with Virtus whose team has a proven track record. We have always been confident in the potential of the application of horizontal drilling technology to San Andres formation across our leasehold, but wanted to partner with a proven technical team. It will be a pleasure to work with the Virtus staff, who are very experienced and professional," said Dante Caravaggio, President and CEO of EON. "An additional benefit to EON and our shareholders is the net proceeds from the first 3 wells are expected to cover about half of the drilling capital needs for the next wave of horizontal drilling. We expect that once 10 horizontal wells are drilled and producing that the future drilling capex becomes self-sustaining."

**About EON Resources Inc.**

EON is an independent upstream energy company focused on maximizing total returns to its shareholders through the development of onshore oil and natural gas properties in a diversified portfolio of long-life producing oil and natural gas properties and other energy holdings. EON's approach is to build an energy company through acquisition and through selective development of its properties. Class A Common Stock of EON trades on the NYSE American Stock Exchange under the symbol of "**EONR"** and the Company's public warrants trade under the symbol of "**EONR WS"**. For more information on the Company, please visit the EON website.

**About the Grayburg-Jackson Field Property**

Our Grayburg-Jackson Field ("GJF") is primarily a waterflood property located on the Northwest Shelf of the Permian Basin in Eddy County, New Mexico. The GJF comprises of 13,700 contiguous leasehold acres with 342 producing wells, 207 injection wells and 1 water source well for a total of 550 wells. Leasehold rights include the Seven Rivers, Queen, Grayburg and San Andres intervals that range from as shallow as 1,500 feet to 4,000 feet in depth. The December 2024 reserve report from our third-party engineer, Haas and Cobb Petroleum Consultants, LLC, estimates proven reserves of approximately 14.0 million barrels of oil and 2.8 billion cubic feet of natural gas. The mapped original-oil-in-place ("OOIP") is approximately 956 million barrels of oil. Primary production is currently from the Seven Rivers formation. In addition to proven reserves, the Company believes it may access an additional 34 million barrels of oil by adding perforations in the Grayburg and San Andres formations, plus another 40 million barrels from a horizontal drilling program in the San Andres. More information on the property can be located on the Grayburg-Jackson Field page of our website.

**About the South Justis Field Property**

The South Justis Field ("SJF") is a carbonate reservoir similar to the rest of the Permian, and is located in Lea County, New Mexico approximately 100 miles from the GJF. The SJF is comprised of 5,360 contiguous acres containing 208 total producing and injection wells with well spacing of 50 acres. The producing formations include the Glorietta, Blinebry, Tubb, Drinkard and Fusselman intervals that range from 5,000 feet to 7,000 feet in depth. The original-oil-in-place ("OOIP") is approximately 207 million barrels of oil. More information on the property can be located on the South Justis Field page of our website.

**Forward-Looking Statements**

This press release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties that could cause actual results to differ materially from what is expected. Words such as "expects," "believes," "anticipates," "intends," "estimates," "seeks," "may," "might," "plan," "possible," "should" and variations and similar words and expressions are intended to identify such forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Such forward-looking statements relate to future events or future results, based on currently available information and reflect the Company's management's current beliefs. A number of factors could cause actual events or results to differ materially from the events and results discussed in the forward-looking statements. Important factors - including the availability of funds, the results of financing efforts and the risks relating to our business - that could cause actual results to differ materially from the Company's expectations are disclosed in the Company's documents filed from time to time on EDGAR (see www.edgar-online.com) and with the Securities and Exchange Commission (see www.sec.gov). Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

**Investor Relations**

Michael J. Porter, President

PORTER, LEVAY & ROSE, INC.

mike@plrinvest.com