Document:

American Seafoods Group LLC 2006 Dividend Return Incentive Plan

 Exhibit 10.2 
 American Seafoods Group LLC 
 2006 Dividend Return Incentive Plan 
 ARTICLE I 
 Purpose 
 The purpose of the American Seafoods Group LLC Dividend Return Incentive Plan (the “Plan”) is to enable American Seafoods Group LLC (the
“Company”) to compensate employee option holders for certain distributions that occur prior to the exercise of their options under a program separate and distinct from their options and in compliance with Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”). The Plan will become effective upon approval thereof by the Board of Directors of ASC Management, Inc. (the “Board”), the Company’s ultimate parent (the
“Effective Date”). 
 ARTICLE II 
 Administration 
 The Plan shall be administered by the Board or a committee thereof authorized by the
Board consisting of at least two members (the “Administrator”). The Administrator may prescribe, amend and rescind rules and regulations relating to the administration of the Plan, provide for conditions and assurances it deems
necessary or advisable to protect the interests of the Company and make all other determinations necessary or advisable for the administration and interpretation of the Plan. Any authority exercised by the Administrator under the Plan shall be
exercised by the Administrator in its sole discretion. Determinations, interpretations or other actions made or taken by the Administrator under the Plan shall be final, binding and conclusive for all purposes and upon all persons. 
 ARTICLE III 
 Eligibility and Participation

 Unless otherwise determined by the Administrator, each Company employee (each, a “Participant”) who (i) holds
options (“Options”) to purchase American Seafoods Limited Partnership units (“Partnership Units”) under the Year 2000 ASLP Unit Option Plan (the “Option Plan”) and (ii) is employed by the
Company on the Effective Date or, if later, the date such options are granted, shall be granted Plan Participation Units (“PPUs”) under the Plan. 

 ARTICLE IV 
 Terms of Awards. 
 Section 4.01. Grant of Awards. The “Grant Date” for each PPU
shall be the later of (i) the date the corresponding Option is granted or (ii) the Effective Date of the Plan. 
 Section 4.02. Types of Awards. There shall be three types of PPUs under the Plan: 
 (a) Series A PPUs. Series A PPUs
shall be granted to Participants holding Series A Options under the Option Plan. One Series A PPU shall be granted for each Partnership Unit underlying each Series A Option granted under the Option Plan; 
 (b) Series A-1 PPUs. Series A-1 PPUs shall be granted to Participants holding Series A-1 Options under the Option Plan. One Series A-1 PPU shall
be granted for each Partnership Unit underlying each Series A-1 Option granted under the Option Plan; and 
 (c) Series E PPUs. Series
E PPUs shall be granted to Participants holding Series E Options under the Option Plan. One Series E PPU shall be granted for each Partnership Unit underlying each Series E Option granted under the Option Plan. 
 Section 4.03. Vesting and Payment of Awards. Subject to the continuous employment of the Participant with the Company from the applicable Grant
Date through the applicable Payout Date, each PPU granted to a Participant as of the Effective Date shall become vested and payable as follows: 
  

			
	 Type of Award
	  	Payout Date
	 Series A PPU
	  	April 1, 2009
	 Series A-1 PPU
	  	April 1, 2011
	 Series E PPU
	  	April 1, 2009

 With respect to any PPUs granted after the Effective Date, the Administrator shall specify the applicable Payout
Date or Dates at or prior to the date the corresponding Option is granted. Each vested PPU shall be payable to the Participant in cash on the corresponding Payout Date. 
 Section 4.04. Calculation of Payout Amount. Each Participant holding PPUs on the Payout Date applicable to such PPUs shall be entitled to receive an amount, payable in cash, equal to the Payout Amount. The
Payout Amount shall be calculated according to the following formula (the “Formula”): If a Participant holds Awards of PPUs and Options in more than one Series, the Formula shall be applied separately to each Series. 
  

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 The Payout Amount with respect to each group of PPUs granted with respect to a particular Option (the
“Related Option”) shall equal the remainder of A minus B, where A and B are: 
  

	 	A	the product of: 

  

	 	(i)	the excess, if any, of 

  

	 	(1)	the number of such PPUs held by the Participant on the Payout Date over 

  

	 	(2)	the aggregate number of Units subject to the Related Options on the Grant Date as to which the Related Options shall not have become exercisable as of the Payout Date; times

  

	 	(ii)	the aggregate per unit cash distributions in excess of distributions made for the purposes of paying taxes on the income of the Company (“Tax Distributions”) made
with respect to Partnership Units of the same class since the Grant Date and 

  

	 	B	is the aggregate cash distributions other than Tax Distributions received by the Participant since the Grant Date with respect to Partnership Units that the Participant acquired
through the exercise of the Related Options. 

 ARTICLE V 
 Termination of Employment 
 If a Participant’s employment with the Company
terminates for any reason other than the Participant’s death or long-term disability, as defined for purposes of any disability benefits plan maintained by the Company in which the Participant participates or by the Company other than Without
Cause (as defined below) prior to the applicable Payout Date, each PPU held by such Participant shall be cancelled and forfeited. If a Participant’s employment is terminated by the Company Without Cause, then, notwithstanding Section 4.03
and 4.04 hereof, (i) the Participant’s PPUs shall become vested as of the date of such termination of employment, (ii) such termination date shall be treated as the Payout Date with respect to all of the PPUs held by such Participant
and (iii) the Payout Amount shall be calculated as provided in Section 4.04, but treating the date of termination as the Payout Date. The Payout Amount payable to the Participant in accordance with the immediately preceding sentence shall
be paid to the Participant within 10 business days after the Participants’ termination from employment. “Without Cause” shall mean a termination of the Participant’s employment by the Company for any reason other than:

  

	 	(i)	the Participant’s continued failure to substantially perform his or her duties hereunder (other than as a result of incapacity due to physical or mental illness),

  

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	 	(ii)	the Participant’s dishonesty with respect to any material matter arising in the performance of his or her duties, 

  

	 	(iii)	the Participant’s conviction of, or plea of guilty or nolo contendere to a felony under the laws of the United States or any state thereof or to a misdemeanor involving moral
turpitude, 

  

	 	(iv)	the Participant’s willful or repeated malfeasance or misconduct in connection with his or her duties, or 

  

	 	(v)	any act of omission by the Participant that is materially injurious to the business reputation of the Company or any of its affiliates. 

 Notwithstanding the foregoing, if the Participant is party to an employment agreement with the Company, the meaning of the term “Without Cause” shall be
terminated in accordance with the terms of such employment agreement (i.e., without cause will mean any termination of the Participant’s employment under such employment agreement that is not for cause). 
 ARTICLE VI 
 Change in Control

 In the event of a Change in Control of the Company that causes the full acceleration of a Participant’s Options held under the
Option Plan, the Participant’s Awards will be paid promptly following such Change in Control, but in all events not later than the first day of the third month commencing following the end of the taxable year in which the Change in Control
occurs. “Change in Control” shall have the meaning ascribed to it in the Option Plan. 
 ARTICLE VII 
 Amendment and Termination 
 The Board
may terminate or suspend the Plan at any time, and may amend or modify the Plan from time to time. Unless otherwise provided in an Award Agreement, no amendment, modification, termination or suspension of the Plan shall in any manner adversely
affect any Award theretofore granted under the Plan without the consent of the Participant holding such Award or the consent of those Participants holding a majority of the then outstanding PPUs. 
  

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 ARTICLE VIII 
 Miscellaneous 
 Section 8.01. Unfunded Plan. The Company shall not be obligated to fund its
liabilities under the Plan and no Participant shall have any claim against the Company or its assets in connection with the Plan other than as an unsecured general creditor. 
 Section 8.02. No Equity Ownership. The granting of PPUs to a Participant shall not be deemed to create any interest in any equity of the Company
and no Participant (or beneficiary) shall have any rights of a unitholder with respect to PPUs credited hereunder. 
 Section 8.03. No Right
to Employment. The Plan shall not confer on any Participant the right to continued employment by the Company or affect in any manner the right of the Company to terminate the employment of any Participant at any time without liability hereunder.

 Section 8.04. Governing Law. The Plan shall be construed in accordance with and governed by the laws of the State of Washington
(without regard to principles of conflicts of law). 
 Section 8.05. Tax Withholding. The Company shall have the right to withhold any
applicable federal, state and local income and employment taxes and any other amounts that the Company is required at law to deduct and withhold from any amount payable to a Participant under this Plan. 
 Section 8.06. Headings. The descriptive headings of the various sections of the Plan are for convenience only and shall not affect the meaning or
construction of the provisions hereof. 
 Section 8.07. 409A Compliance. The Plan is intended to comply with Section 409A of the
Code. No action taken by the Company shall be construed in a manner that would result in the imposition of an additional tax on a Participant under Section 409A of the Code. Notwithstanding any provision of the Plan to the contrary, the Company
reserves the right to make any amendments to the Plan if, in the sole discretion of the Company, such amendments become necessary or advisable to avoid the imposition of any additional tax under Section 409A of the Code. 
 Section 8.08. Severability. Should any part of this Plan for any reason be declared invalid, such decision shall not affect the validity of any
remaining portion, which remaining portion shall remain in full force and effect as if this Plan had not contained the invalid portion thereof eliminated, and it is hereby declared the intention of the Company that it would have approved and
accepted the remaining portion of this Plan 

  

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without including therein any such part, parts or portion which may, for any reason, be hereafter declared invalid. 
 Adopted by the Board of Directors on October 6,, 2006 
 Approved by Holders of 2/3 of outstanding Securities on October 11, 2006. 
  

 6EXECUTION COUNTERPART

                           SECOND AMENDED AND RESTATED

                        ASSET PURCHASE AND SALE AGREEMENT

                                     BETWEEN

                             VOYAGER PARTNERS, LTD.
                                   as Seller,

                                       and

                                DUNE ENERGY, INC.
                                    as Buyer

                                 OCTOBER 6, 2006

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                                Table Of Contents

                                                                            Page
                                                                            ----

ARTICLE I. DEFINITIONS AND INTERPRETATION......................................2
      1.1    Defined Terms.....................................................2
      1.2    References........................................................2
      1.3    Articles and Sections.............................................2
      1.4    Number and Gender.................................................2

ARTICLE II. PURCHASE AND SALE..................................................2
      2.1    Purchase and Sale.................................................2
      2.2    Closing by Asset Tranche..........................................5
      2.3    Excluded Assets...................................................6
      2.4    Consideration.....................................................8
      2.5    Assumption of Obligations........................................12
      2.6    Retained Liabilities.............................................13
      2.7    Possession; Risk of Loss.........................................15
      2.8    Allocation of Adjusted Consideration.............................15

ARTICLE III. REPRESENTATIONS AND WARRANTIES...................................15
      3.1    Representations and Warranties of Seller.........................15
      3.2    Representations and Warranties of Buyer..........................20
      3.3    Disclaimers......................................................21

ARTICLE IV. ACCESS; DUE DILIGENCE.............................................22
      4.1    Access to Records; Title Due Diligence and Curative..............22
      4.2    Operational and Environmental Assessment.........................22
      4.3    Environmental Conditions.........................................22
      4.4    Matters Relating to Title........................................24

ARTICLE V. OTHER MATTERS PRIOR TO CLOSING.....................................25
      5.1    Operations.......................................................25
      5.2    Casualty Event...................................................26
      5.3    Publicity........................................................27
      5.4    Compliance with Conditions.......................................27
      5.5    Maintenance of Existence.........................................28
      5.6    Mutual Assurances................................................28
      5.7    Notification of Certain Matters..................................28
      5.8    Designation as Operator..........................................28
      5.9    Financial Matters................................................29

ARTICLE VI. CONDITIONS; TERMINATION; REMEDIES.................................30
      6.1    Conditions Precedent to Seller's Obligation to Close.............30
      6.2    Conditions Precedent to Buyer's Obligation to Close..............31
      6.3    Termination......................................................32

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ARTICLE VII. CLOSING..........................................................34
      7.1    Closing..........................................................34
      7.2    Preliminary Settlement Statement.................................34
      7.3    Actions at Closing...............................................34
      7.4    Records..........................................................35

ARTICLE VIII. POST CLOSING MATTERS............................................36
      8.1    Settlement Statement.............................................36
      8.2    Further Cooperation..............................................36
      8.3    Undisbursed Revenues.............................................36
      8.4    Retained Interests Options.......................................37

ARTICLE IX. SURVIVAL; INDEMNIFICATION.........................................39
      9.1    Survival.........................................................39
      9.2    Indemnity as Sole Remedy.........................................40
      9.3    Indemnities of Buyer.............................................40
      9.4    Indemnities of Seller............................................40
      9.5    Limitations on Indemnities.......................................41
      9.6    Assertion of Claims; Notices; Defense; Settlement................41
      9.7    Limitation on Damages............................................42

ARTICLE X. MISCELLANEOUS......................................................42
      10.1   Exhibits.........................................................42
      10.2   Expenses.........................................................42
      10.3   Proration of Taxes...............................................43
      10.4   Assignment.......................................................43
      10.5   Notices..........................................................43
      10.6   ENTIRE AGREEMENT; CONFLICTS......................................44
      10.7   Amendment........................................................44
      10.8   Waiver; Rights Cumulative........................................45
      10.9   GOVERNING LAW; CONSENT TO JURISDICTION...........................45
      10.10  Severability.....................................................45
      10.11  Arbitration......................................................45
      10.12  Restated Purchase Agreements.....................................46
      10.13  Recording Memorandum.............................................46
      10.14  Counterparts.....................................................46

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SCHEDULES
Schedule 1.1      -    Defined Terms
Schedule 2.2(b)   -    Closed Assets Sold Pursuant to First Restated Purchase
                       Agreement - Tranche 1 Assets
Schedule 2.2(c)   -    Closed Assets Sold Pursuant to First Restated Purchase
                       Agreement - Tranche 2 Assets
Schedule 2.2(d)   -    Remaining Assets Sold at October 6, 2006
                       Closing - Tranche 3 Assets and Tranche 2 Assets
Schedule 2.2(e)   -    Remaining Assets Sold at January 19, 2007
                       Closing - Tranche 2 Assets and Tranche 3 Assets
Schedule 3.1(e)   -    Preferential Purchase Rights; Required Third Person
                       Consents to Assignment
Schedule 3.1(n)   -    Commitments for Expenditures
Schedule 8.5(a)   -    Additional Consideration - Hillview
Schedule 8.5(b)   -    Additional Consideration - Tranche 3 Assets
                       (Non-Hillview)

EXHIBITS
Exhibit A         -    Leases
Exhibit B         -    Wells; Working Interests and Net Revenue Interests;
                       Allocated Values
Exhibit C         -    Real Property Interests
Exhibit D         -    Contracts
Exhibit E         -    Permits; Transferable Permits
Exhibit F         -    Form of Assignment, Bill of Sale, and Conveyance
Exhibit G         -    Form of Restated AMI Agreement
Exhibit H         -    Form of Surface Use Agreement
Exhibit I         -    Form of Retained Interests Option Conveyance

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<PAGE>

                           SECOND AMENDED AND RESTATED
                        ASSET PURCHASE AND SALE AGREEMENT

            THIS SECOND AMENDED AND RESTATED ASSET PURCHASE AND SALE AGREEMENT
("Agreement") is executed as of this 6th day of October, 2006, by VOYAGER
PARTNERS, LTD., a Texas limited partnership ("Seller"), and DUNE ENERGY, INC., a
Delaware corporation ("Buyer").

                                    RECITALS

            WHEREAS, Seller is the owner of certain oil and gas properties and
assets located in the State of Texas described more particularly herein;

            WHEREAS, Seller and Buyer are parties to an Asset Purchase and Sale
Agreement dated as of June 13, 2005, as amended (as so amended, the "Original
Amended Purchase Agreement"), which Original Amended Purchase Agreement was
restated and amended by an Amended and Restated Asset Purchase and Sale
Agreement dated as of November 4, 2005, as amended by First Amendment to Amended
and Restated Asset Purchase and Sale Agreement dated as of December 16, 2005,
Second Amendment to Amended and Restated Asset Purchase and Sale Agreement dated
as of February 22, 2006, Third Amendment to Amended and Restated Asset Purchase
and Sale Agreement dated as of April 13, 2006, and Fourth Amendment to Amended
and Restated Asset Purchase and Sale Agreement dated as of May 31, 2006 (as so
amended, the "First Restated Purchase Agreement"), pursuant to which Seller
agreed to sell and convey, and Buyer agreed to purchase and pay for, the
"Assets" (as defined therein);

            WHEREAS, since the execution of the First Restated Purchase
Agreement, three (3) "Closings" (as defined in the First Restated Purchase
Agreement) have occurred, pursuant to which Seller and Buyer consummated the
sale and purchase of several of the Assets, subject to and in accordance with
the terms of the First Restated Purchase Agreement; and

            WHEREAS, Seller and Buyer now desire to amend and restate the First
Restated Purchase Agreement to amend such agreement in several respects and to
set forth the terms and conditions under which Seller and Buyer intend to
consummate the sale and purchase of the remaining Assets as to which no Closing
under the First Restated Purchase Agreement has occurred as of the date of
execution hereof.

            NOW, THEREFORE, for and in consideration of the mutual promises
contained herein, the benefits to be derived by each Party hereunder, and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Seller and Buyer agree as follows:

                                        1
<PAGE>

                                    ARTICLE I
                         DEFINITIONS AND INTERPRETATION

      1.1 Defined Terms. In addition to the terms defined in the introductory
paragraph and the Recitals of this Agreement, for purposes hereof, the
capitalized expressions and terms set forth in Schedule 1.1 shall have the
meanings set forth therein, unless expressly indicated otherwise. Other terms
may be defined elsewhere in this Agreement and shall, for purposes hereof, have
the meanings so specified, unless expressly indicated otherwise.

      1.2 References. The words "hereby," "herein," "hereinabove,"
"hereinafter," "hereinbelow," "hereof," "hereto," "hereunder," and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular article, section, or provision of this
Agreement. References in this Agreement to articles, sections, exhibits, or
schedules are to such articles, sections, exhibits, or schedules of this
Agreement unless otherwise specified.

      1.3 Articles and Sections. This Agreement, for convenience only, has been
divided into articles and sections. The rights and other legal relations of the
parties hereto shall be determined from this Agreement as an entirety and
without regard to the aforesaid division into articles and sections and without
regard to headings prefixed to such articles and sections.

      1.4 Number and Gender. Whenever the context requires, reference herein
made to a single number shall be understood to include the plural; and likewise,
the plural shall be understood to include the singular. Words denoting sex shall
be construed to include the masculine, feminine, and neuter, when such
construction is appropriate; and specific enumeration shall not exclude the
general but shall be construed as cumulative. Definitions of terms defined in
the singular or plural shall be equally applicable to the plural or singular, as
applicable, unless otherwise indicated.

                                   ARTICLE II.
                                PURCHASE AND SALE

      2.1 Purchase and Sale. Subject to the terms hereof, at the Closings
specified in Sections 2.2(d) and 2.2(e), Seller agrees to sell and convey to
Buyer, and Buyer agrees to purchase from Seller and pay for, the following
properties and assets (collectively, the "Remaining Assets"):

            (a) an undivided ninety-five percent (95%) of the undivided Working
Interests, associated Net Revenue Interests, and other interests set forth on
Exhibit B, together with an undivided ninety-five percent (95%) of any and all
other rights, titles, and interests of Seller (including in each case, without
limitation, fee mineral interests, leasehold interests, royalty interests,
overriding royalty interests, production payments, net profits interests,
carried interests, reversionary interests, possibilities of reverter, and
conversion rights and options), in, to, under, or derived from (i) the oil and
gas leases described more particularly on Exhibit A and the leasehold estates
created thereby, as to all lands and depths covered thereby or the applicable
part or portion thereof if specifically limited in depth and/or areal extent in

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<PAGE>

Exhibit A (collectively, the "Leases"), (ii) the lands covered by the Leases or
otherwise described on Exhibit A, (iii) all units created by the pooling,
unitization, and communitization agreements in effect with respect to the Leases
and the lands covered thereby or otherwise described on Exhibit A, and (iv) the
oil and gas leases and lands included in any units with which the Leases or the
lands covered thereby or otherwise described on Exhibit A may have been pooled,
unitized, or communitized, and all other rights, interests, privileges,
benefits, and powers of any kind or character conferred upon Seller as the owner
of any of such interests;

            (b) an undivided ninety-five percent (95%) of the undivided Working
Interests and the associated Net Revenue Interests set forth in Exhibit B,
together with an undivided ninety-five percent (95%) of any and all other
rights, titles, and interests of Seller, in and to the wells for the production
of Hydrocarbons that are located on the Leases or on other leases or lands with
which the Leases or the lands covered thereby or otherwise described on Exhibit
A may have been pooled, unitized, or communitized, also described more
particularly on Exhibit B (collectively, the "Wells");

            (c) an undivided ninety-five percent (95%) of Seller's rights,
titles, and interests in and to all crude oil, natural gas, condensate,
distillate, natural gasoline, natural gas liquids, plant products, refined
petroleum products, other liquid or gaseous hydrocarbons (including, without
limitation, coalbed methane), sulphur, other gases (including, without
limitation, hydrogen and carbon dioxide), and every other mineral or substance,
or any of them, the right to explore for which, or an interest in which, is
granted pursuant to the Leases or the other interests described herein
("Hydrocarbons") (i) produced from or allocable to the interests of Seller
described in clauses (a) and (b) of this Section 2.1 and existing in pipelines,
storage tanks, or other processing or storage facilities upstream of the
delivery points to the relevant purchasers as of the Effective Time, and (ii)
produced from or allocable to such interests of Seller from and after the
Effective Time;

            (d) an undivided ninety-five percent (95%) of Seller's rights,
titles, and interests in and to all fee surface interests in land, surface
leases, easements, rights-of-way, servitudes, licenses, franchises, road,
railroad, and other surface use permits or agreements, and similar rights and
interests (if any) located on the lands covered by the Leases or otherwise
described on Exhibit A or on any units with which the Leases or the lands
covered thereby or otherwise described on Exhibit A may have been pooled,
unitized, or communitized, or that otherwise relate to the interests of Seller
described in clauses (a), (b), and (e) of this Section 2.1 (including, without
limitation, the surface well pad sites located on the Tranche 3 Assets described
in Section 2.2(d) (other than the "Hillview") from and after the Possession Time
for the Final Closing, it being understood that, prior to the Final Closing,
such surface well pad sites will constitute Excluded Assets), and either
described more particularly on Exhibit C or acquired by Seller between the date
of execution hereof and the Final Closing Date (collectively, the "Real Property
Interests");

            (e) an undivided ninety-five percent (95%) of Seller's rights,
titles, and interests in and to all equipment, machinery, fixtures, inventory,
improvements, and other personal, mixed, or movable property, located on the
lands covered by the Leases or otherwise described on Exhibit A or with which
the Leases or the lands covered thereby or otherwise described on Exhibit A have
been pooled, unitized, or communitized, to the extent used in connection with or

                                        3
<PAGE>

attributable to the interests of Seller described in clauses (a) and (b) of this
Section 2.1 (except for any such personal property leased from third Persons),
including, without limitation: water wells; saltwater disposal wells and
facilities; injection wells and facilities; well equipment; casing; rods; tanks
and tank batteries; boilers; tubing; pumps; pumping units and engines;
platforms; Christmas trees; production facilities; dehydration units and
facilities; heater-treaters; processing, fractionation, treatment, and
separation plants and facilities; testing and sampling equipment; sulfur
recovery units and facilities; valves; gauges; meters; generators; motors; gun
barrels; flow lines; water lines; gas lines; gathering lines, laterals and trunk
lines, and other pipe lines; gas systems (for gathering, treatment, and
compression); chemicals; solutions; water systems (for treatment, disposal, and
injection); power plants; poles; lines; transformers; starters and controllers;
and any and all additions or accessions to, substitutions for, and replacements
of any of the foregoing, together with all attachments, components, parts,
equipment, and accessories installed thereon or affixed thereto (collectively,
the "Personal Property");

            (f) all fees, rentals, proceeds, payments, revenues, and other
rights and economic benefits of every kind and character accruing or payable to
the owner of the items listed in this Section 2.1 that are attributable to the
period from and after the Effective Time;

            (g) an undivided ninety-five percent (95%) of Seller's rights,
titles, and interests in, to, and under all Contracts, the transfer of which is
not prohibited or restricted by a preferential right to purchase, required
consent to assignment, right of first refusal, right of first offer, or similar
provision or as to which the required waivers or consents have been obtained, or
the appropriate time period for asserting such rights has expired, in either
case as of the applicable Closing Date (collectively, the "Transferred
Contracts");

            (h) all Permits related to the items listed in this Section 2.1 that
are transferable by Seller to Buyer, including any such Permits described on
Exhibit E;

            (i) all intangible rights, inchoate rights, transferable rights
under warranties made by prior owners, manufacturers, vendors, and third
Persons, and rights accruing under applicable statutes of limitation or
prescription, insofar only as the foregoing rights and interests relate or are
attributable to the items listed in this Section 2.1, and do not constitute
Excluded Assets, but including, without limitation, an undivided ninety-five
percent (95%) interest in and to all underproduction accounts or credits of
Seller or Seller's Predecessors pertaining to Imbalances in existence as of the
Effective Time (collectively, "Intangible Rights");

            (j) all files, records (including, without limitation, land and
title records, plats, surveys, abstracts of title, title insurance policies,
title opinions, and title curative, lease, contract, division order, marketing,
correspondence, operations, environmental, insurance, production, accounting,
Property-Related Tax, regulatory, and facility and well records and files), and
other information that relate in any way to any of the items listed in this
Section 2.1, are in the possession of Seller or Seller's Predecessors, and the

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<PAGE>

disclosure and transfer of which is not prohibited by confidentiality or other
contractual arrangements in existence on the applicable Closing Date
(collectively, the "Records"); and

            (k) all maps, logs, geological, geophysical, reserve engineering,
and other scientific and technical information, reports, and data (including,
without limitation, conventional and 3-D seismic data) that relate exclusively
to the items listed in this Section 2.1, are owned by Seller or Seller's
Predecessors, do not constitute Excluded Assets, and the disclosure and transfer
of which is not prohibited by confidentiality or other contractual arrangements
in existence on the Closing Date (collectively, the "Transferable Data").

      2.2 Closing by Asset Tranche. For purposes of this Agreement, the Assets
described in the First Restated Purchase Agreement have been divided into three
(3) numbered tranches. The Assets allocated to the first tranche (the "Tranche 1
Assets") are set forth on Schedule 2.2(b). The Assets allocated to the second
tranche (the "Tranche 2 Assets") are so designated as they are set forth on
Schedule 2.2(c), Schedule 2.2(d), and Schedule 2.2(e). Assets as to which the
sale by Seller and purchase by Buyer thereof occurred prior to the date of
execution of this Agreement shall be referred to herein as "Closed Assets". The
Assets allocated to the third tranche (the "Tranche 3 Assets") are so designated
as they are set forth on Schedule 2.2(d) and Schedule 2.2(e). The Assets and
Springside Properties have been, or will be, conveyed to Buyer in multiple
Closings as follows:

            (a) The Springside Properties are subject to the terms of the
Voyager-Hess Purchase Agreement. Pursuant to the Assignment of Asset Purchase
Agreement dated as of October 28, 2005 (the "Hess PSA Assignment"), Seller
transferred and assigned to Buyer all of Seller's rights, titles, and interests
in, to, and under the Voyager-Hess Purchase Agreement. The Springside Properties
do not constitute either Closed Assets or Remaining Assets for purposes of this
Agreement.

            (b) The Closing for the Tranche 1 Assets occurred on December 16,
2005, subject to and in accordance with the terms of the First Restated Purchase
Agreement, as the same had been amended and was in effect on such date. The
Tranche 1 Assets constitute "Closed Assets" for purposes of this Agreement.

            (c) The first two (2) Closings with respect to the Tranche 2 Assets
described on Schedule 2.2(c) occurred on, respectively, May 31, 2006, and July
31, 2006, subject to and in accordance with the terms of the First Restated
Purchase Agreement, as the same had been amended and was in effect on such date.
Such Tranche 2 Assets constitute "Closed Assets" for purposes of this Agreement.

            (d) Certain of the Tranche 2 Assets and Tranche 3 Assets are being
sold to Buyer at a Closing held contemporaneously with the execution of this
Agreement, and such Assets are listed on Schedule 2.2(d). Such Tranche 2 Assets
and Tranche 3 Assets constitute "Remaining Assets" for purposes of this
Agreement. These Remaining Assets are sold for the Base Consideration (subject
to adjustment as provided in Section 2.4) set forth on Schedule 2.2(d).

                                        5
<PAGE>

            (e) The Closing for the remainder of the Tranche 2 Assets and the
remainder of the Tranche 3 Assets, all as described on Schedule 2.2(e), is
scheduled for a Closing Date of January 19, 2007 (the "Final Closing"). Such
Tranche 2 Assets and Tranche 3 Assets constitute "Remaining Assets" for purposes
of this Agreement These Remaining Assets will be sold for the Base Consideration
(subject to adjustment as provided in Section 2.4) set forth on Schedule 2.2(e),
subject to the satisfaction of the conditions relating to such Closing set forth
in Section 6.1 and Section 6.2. Notwithstanding the preceding provisions of this
Section 2.2(e), Buyer may, at its option and for any reason, extend the Closing
Date for the Final Closing until February 19, 2007, upon Buyer's delivery to
Seller of written notice of Buyer's intent to extend no later than December 20,
2006. If Buyer thus elects to extend the Closing Date for the Final Closing,
then as consideration for such extension, Buyer shall pay to Seller, by bank
wire transfer of immediately available U.S. funds, the sum of $500,000.00,
unless, as of December 20, 2006, Seller is in breach in any material respect
under the terms of this Agreement, in which case no payment under this Section
2.2(e) shall be due from Buyer to Seller.

            (f) Except as otherwise agreed to by the Parties, the conveyance of
each Remaining Asset shall be effective as of the Effective Time, except for the
assumption by Buyer of certain Liabilities associated with such Remaining Asset
that are provided, in Section 2.5, to be assumed as of the Possession Time
applicable to such Remaining Asset. All references in this Agreement to the
Closing Date or Possession Time with reference to a Remaining Asset shall be to
the Closing Date or Possession Time applicable to such Remaining Asset under the
terms hereof.

      2.3 Excluded Assets. Seller excepts, reserves, and retains to itself the
following properties and assets (collectively, the "Excluded Assets"):

            (a) (i) an undivided five percent (5%) of the undivided Working
Interests, associated Net Revenue Interests, and other interests set forth in
Exhibit B, together with an undivided five percent (5%) of any and all other
rights, titles, and interest of Seller, in, to, under, or derived from (A) the
Leases conveyed by Seller to Buyer pursuant hereto, (B) the lands covered by
such Leases or otherwise described on Exhibit A, (C) all units created by the
pooling, unitization, and communitization agreements in effect with respect to
such Leases and the lands covered thereby or otherwise described on Exhibit A,
and (D) the oil and gas leases and lands included in any units with which such
Leases or the lands covered thereby or otherwise described on Exhibit A may have
been pooled, unitized, or communitized, and all other rights, interests
privileges, benefits, and powers of any kind or character conferred upon Seller
as the owner of such interests; (ii) an undivided five percent (5%) of the
undivided Working Interests and the associated Net Revenue Interests set forth
in Exhibit B, together with an undivided five percent (5%) of any and all other
rights, titles, and interests of Seller, in and to the Wells conveyed by Seller
to Buyer pursuant hereto; (iii) an undivided five percent (5%) of Seller's
rights, titles, and interests in and to all Hydrocarbons produced from or
allocable to the interests of Seller described in clauses(i) and (ii) of this
Section 2.3(a); (iv) an undivided five percent (5%) of Seller's rights, titles,

                                       6
<PAGE>

and interests in and to (A) the Real Property Interests, (B) the Personal
Property, and (C) the Transferred Contracts, in each case transferred by Seller
to Buyer pursuant hereto; (v) all fees, rentals, proceeds, payments, revenues,
and other rights and economic benefits of every kind and character accruing or
payable to the owner of the items listed in this Section 2.3(a); and (vi) all
intangible rights, inchoate rights, transferable rights under warranties made by
prior owners, manufacturers, vendors, and third Persons, and rights accruing
under applicable statutes of limitation or prescription, insofar only as the
foregoing rights and interests relate or are attributable to the items listed in
this Section 2.3(a), including, without limitation, an undivided five percent
(5%) interest in and to all underproduction accounts or credits of Seller or
Seller's Predecessors pertaining to Imbalances in existence as of the Effective
Time (collectively, the "Remaining Retained Interests");

            (b) all corporate, financial, legal, and tax records of Seller;

            (c) all deposits, cash, checks in process of collection, cash
equivalents, and funds attributable to Seller's interests in the Remaining
Assets for the period prior to the Effective Time;

            (d) all Hydrocarbons produced from or allocable to the Remaining
Assets prior to the Effective Time, except for those Hydrocarbons described in
Section 2.1(c)(i);

            (e) all documents and records of Seller and Seller's Predecessors
subject to the attorney/client privilege, confidentiality agreements, claims of
privilege, or other restrictions on access;

            (f) all rights, interests, and Claims that Seller or Seller's
Predecessors may have under any policy of insurance or indemnity, surety bond,
or any insurance or condemnation proceeds or recoveries from third Persons
relating to property damage or casualty loss affecting the Leases, Wells,
Hydrocarbons, Real Property Interests, or Personal Property occurring prior to
the applicable Possession Time;

            (g) all Claims, whether in contract, in tort, or arising by
operation of Law, and whether asserted or unasserted as of the applicable
Possession Time, that Seller or Seller's Predecessors may have against any
Person arising out of acts, omissions, or events, or injury to or death of
Persons or loss or destruction of or damage to property, relating in any way to,
the Leases, Wells, Hydrocarbons, Real Property Interests, Personal Property,
Contracts, Permits, Intangible Rights, or Transferable Data that occurred prior
to such Possession Time; provided, however, that no such Claim may be settled,
compromised, or otherwise resolved in a manner that results in an obligation
borne by Buyer or the Assets from and after the applicable Possession Time
without the prior written consent of Buyer;

            (h) all exchange traded futures contracts and over-the-counter
derivative contracts of Seller and Seller's Predecessors as to which Seller or
any Seller's Predecessor has an open position as of the Effective Time;

            (i) any and all rights to use Seller's name, marks, trade dress or
insignia, or to use the name of any Affiliate of Seller (including, without
limitation, Seller's Predecessors), and all of Seller's intellectual property,
including, without limitation, proprietary or licensed computer software;
patents; trade secrets; copyrights; geological and geophysical information and

                                       7
<PAGE>

data (including, without limitation, conventional and 3-D seismic data) licensed
from third Persons, and Seller's proprietary interpretations thereof; economic
analyses; and pricing forecasts;

            (j) all amounts due or payable to Seller or Seller's Predecessors as
adjustments to insurance premiums related to the Remaining Assets for periods
prior to the Effective Time;

            (k) all Claims of Seller or Seller's Predecessors for refunds of or
any loss carry-forwards with respect to any taxes relating to the Leases, Wells,
Hydrocarbons, Real Property Interests, Personal Property, Contracts, Permits,
Intangible Rights, or Transferable Data for periods prior to the Effective Time;

            (l) all audit rights and all amounts due or payable to Seller or
Seller's Predecessors as refunds, adjustments, or settlements of disputes
arising under the Leases, the Real Property Interests, the Permits, or the
Contracts for periods prior to the Effective Time;

            (m) all trade credits and the proceeds of all accounts receivable,
notes receivable, instruments, general intangibles, and other receivables due or
payable to Seller or Seller's Predecessors relating to the Leases, Wells,
Hydrocarbons, Real Property Interests, Personal Property, Contracts, Permits,
Intangible Rights, or Transferable Data that accrued prior to the Effective
Time;

            (n) except as otherwise provided herein, all fees, rentals,
proceeds, payments, revenues, rights, and economic benefits of every kind and
character (and all security or other deposits made) payable to the owner of the
Remaining Assets and that are attributable to the period prior to the Effective
Time;

            (o) all rights, titles, and interests of Seller or any Affiliate of
Seller in and to the Gathering System Partnerships; and

            (p) until the Final Closing, all of Seller's rights, titles, and
interests in and to the surface well pad sites located on the Tranche 3 Assets
described on Schedule 2.2(d) (other than the "Hillview"); provided, however,
that such surface well pad sites shall be included in the Real Property
Interests conveyed to Buyer at the Final Closing; and

            (q) all interests, rights, property, and assets of Seller not
located on or used in connection with the Remaining Assets or otherwise
specifically included in the definition of the Remaining Assets.

      2.4 Consideration.

            (a) The total base consideration to be paid by Buyer to Seller if
all of the Remaining Assets are conveyed by Seller to Buyer hereunder shall be
THIRTY-THREE MILLION, EIGHTY THOUSAND, SIX HUNDRED SIXTY-SIX AND NO/100 DOLLARS
($33,080,666.00) (the "Base Consideration"). If, for any reason, one (1) or more
Remaining Assets is not conveyed by Seller to Buyer under the terms of this
Agreement, the Base Consideration shall be reduced by the sum of the Allocated

                                       8
<PAGE>

Values of the affected Remaining Assets. The portion of the Base Consideration
payable hereunder at each Closing shall equal the sum of the Allocated Values of
all of the Remaining Assets being sold at such Closing. The relevant portion of
the Base Consideration, subject to the adjustments made as provided in Sections
2.4(b) and 2.4(c), shall be payable in currency of the United States at each
Closing in accordance with Article VII.

            (b) For each Closing, the portion of the Base Consideration payable
at such Closing shall be adjusted upward by the following:

                  (i)   the amount of the value of all merchantable Hydrocarbons
                        produced from or allocable to the Remaining Assets
                        conveyed by Seller to Buyer at such Closing existing in
                        pipelines, storage tanks, or other processing or storage
                        facilities (including, without limitation, unsold
                        inventories of plant products owned by Seller, if any)
                        upstream of the delivery points to the relevant
                        purchasers as of the Effective Time, the value to be
                        based on the contract price applicable to such
                        Hydrocarbons in effect as of the Effective Time (or the
                        market value, if there is no contract price, in effect
                        as of the Effective Time), less amounts payable as
                        royalties, overriding royalties, and other burdens upon
                        such Hydrocarbons and Property-Related Taxes deducted by
                        the purchaser of such Hydrocarbons;

                  (ii)  the amount of all direct capital, operating, and other
                        expenditures and costs and all prepaid costs and
                        expenses attributable to the Remaining Assets conveyed
                        by Seller to Buyer at such Closing (exclusive of
                        Property-Related Taxes) incurred and actually paid by or
                        on behalf of Seller in the ordinary course of owning and
                        operating such Remaining Assets that are attributable to
                        the period from the Effective Time through the
                        applicable Possession Time, including, without
                        limitation, (A) royalties, overriding royalties, and
                        other similar burdens on production, (B) rentals,
                        shut-in well payments, and other lease maintenance
                        payments made under the terms of the Leases, (C) except
                        as otherwise provided below in clause (D)(1) of this
                        paragraph, the direct overhead and other charges and
                        expenses billed to Seller by the operator or operators
                        (including, without limitation, Seller or its
                        Affiliates) of such Remaining Assets under applicable
                        operating agreements, including, without limitation,
                        unreimbursed expenses paid by Seller on behalf of third
                        Persons to which Seller is entitled to reimbursement
                        under such operating agreements, and (D) premiums paid
                        by Seller with respect to any policy of insurance or

                                       9
<PAGE>

                        indemnity or any surety bond directly related to such
                        Remaining Assets and allocable to the period from the
                        Effective Time through the applicable Possession Time,
                        but exclusive of (1) direct overhead and other charges
                        billed by Seller or its Affiliate, as operator of a
                        Remaining Asset, to Seller, to the extent that such
                        charges exceed the like charges invoiced by Seller or
                        its Affiliate to other co-owners of interests in the
                        relevant Remaining Asset, (2) expenses incurred by
                        Seller in connection with the remediation of
                        Environmental Conditions pursuant to Section 4.3, the
                        cure of Defects pursuant to Section 4.4 (including,
                        without limitation, lease acquisition costs), or the
                        repair of a Casualty Event or replacement of a damaged
                        or taken Asset pursuant to Section 5.2, (3) the general,
                        administrative, and office overhead expenses of Seller
                        and its Affiliates, and (4) all costs and expenses
                        incurred, or to be incurred after the date hereof, by
                        Seller in connection with the completion (including,
                        without limitation, the performance of fracturing
                        operations) and equipping for production of the Guyer #1
                        Well (such well constituting a Closed Asset for purposes
                        hereof);

                  (iii) any increase required as the result of the proration of
                        Property-Related Taxes under Section 10.3;

                  (iv)  ninety-five percent (95%) of the amount of the value of
                        any Imbalance pertaining to the Remaining Assets
                        conveyed by Seller to Buyer at such Closing as to which
                        Seller is in an "under" position as of the Effective
                        Time, such value to be based, in each case, on the
                        contract price applicable to the relevant category of
                        Hydrocarbons (or the market value thereof, if there is
                        no contract price) determined as of the applicable
                        Effective Time;

                  (v)   any increase required pursuant to the terms of Section
                        8.5; and

                  (vi)  any other amount provided for elsewhere in this
                        Agreement or otherwise agreed upon by Seller and Buyer
                        as being an increase to the Base Consideration.

            (c) For each Closing, the portion of the Base Consideration payable
at such Closing shall be adjusted downward by:

                  (i)   permitted reductions (if any) provided for in Section
                        4.4(d);

                  (ii)  the proceeds received by Seller from the sale of
                        Hydrocarbons produced from or allocable to the Remaining
                        Assets conveyed by Seller to Buyer at such Closing
                        during the period from the Effective Time through the
                        applicable Closing Date, less amounts payable as
                        royalties, overriding royalties, and other burdens upon
                        such Hydrocarbons and Property-Related Taxes deducted by
                        the purchaser of such Hydrocarbons;

                                       10
<PAGE>

                  (iii) all other fees, rentals, proceeds from any permitted
                        sale, salvage, or other disposition, and other revenues
                        pertaining to the Remaining Assets conveyed by Seller to
                        Buyer at such Closing that are attributable to, and were
                        received by Seller during, the period from the Effective
                        Time through the applicable Closing Date (excluding
                        overhead reimbursements to Seller under applicable
                        operating agreements under which Seller is the
                        operator);

                  (iv)  ninety-five percent (95%) of the amount of the value of
                        any Imbalance pertaining to the Remaining Assets
                        conveyed by Seller to Buyer at such Closing as to which
                        Seller is in an "over" position as of the Effective
                        Time, as well as the amount of the value of any
                        Hydrocarbons produced from or allocable to such
                        Remaining Assets that third Persons may otherwise be
                        entitled to receive out of the interests therein being
                        transferred after the Effective Time without making full
                        payment therefor at or after the time of delivery as the
                        result of a "take-or-pay", prepayment, forward sale,
                        production payment, deferred production, or similar
                        arrangement in existence as of the Effective Time, such
                        value to be based, in each case, on the contract price
                        applicable to the relevant category of Hydrocarbons (or
                        the market value, if there is no contract price)
                        determined as of the Effective Time;

                  (v)   any reduction required as the result of the proration of
                        Property-Related Taxes under Section 10.3;

                  (vi)  an amount equal to all "Advances" (as defined in the
                        First Restated Purchase Agreement), not to exceed, in
                        the aggregate $2,500,000.00, paid by Buyer to Seller as
                        provided in Section 5.3(a) of the First Restated
                        Purchase Agreement with respect to certain of the
                        Remaining Assets described on Schedule 2.2 (d); and

                  (vii) any other amount provided for elsewhere in this
                        Agreement or otherwise agreed upon by Seller and Buyer
                        as being a reduction in the Base Consideration.

            (d) The Base Consideration, as adjusted pursuant to Sections 2.4(b)
and 2.4(c), shall be referred to herein as the "Adjusted Consideration". All
adjustments to the Base Consideration provided for in Sections 2.4(b) and 2.4(c)
shall be determined without duplication and on an accrual basis, in accordance
with generally accepted accounting principles consistently applied.

                                       11
<PAGE>

      2.5 Assumption of Obligations. Subject to the terms of this Agreement,
upon each Closing, Buyer assumes and agrees to pay, perform, and discharge the
following duties, obligations, and Liabilities (collectively, the "Assumed
Liabilities") with respect to the Remaining Assets conveyed by Seller to Buyer
at such Closing, effective as of the Effective Time or Possession Time, as set
forth below:

            (a) the performance of the terms, conditions, and covenants of, and
the discharge of the share attributable to the interests of Seller to be
transferred of the duties, obligations, and liabilities (other than obligations
or liabilities for the payment of money) arising under the terms of, the Leases,
the Real Property Interests, the Permits, and the Transferred Contracts conveyed
by Seller to Buyer at such Closing for the period from and after the applicable
Possession Time;

            (b) except for Retained Liabilities, all obligations and Liabilities
of Seller for the payment of money with respect to the Remaining Assets conveyed
by Seller to Buyer at such Closing (including, without limitation, the payment
of ninety-five percent (95%) of Seller's share of all costs and expenses
incurred in connection with the relevant Leases, Wells, Hydrocarbons, Real
Property Interests, Personal Property, Transferred Contracts, and Permits and
the payment of ninety-five percent (95%) of Seller's share of all royalties,
overriding royalties, and other similar burdens on production, as well as all
rentals, shut-in well payments, minimum royalties, and other lease maintenance
payments under the terms of such Leases) for the period from and after the
Effective Time;

            (c) ninety-five percent (95%) all obligations of Seller regarding
the plugging and abandonment of all Wells and Personal Property conveyed by
Seller to Buyer at such Closing and the performance of all related salvage, site
clearance, and surface restoration operations in accordance with applicable Law
and the terms of the relevant Leases and applicable Transferred Contracts;

            (d) ALL ASSUMED ENVIRONMENTAL LIABILITIES;

            (e) EXCEPT FOR RETAINED LIABILITIES, ALL OTHER CLAIMS AND
LIABILITIES FOR INJURY TO OR DEATH OF ANY PERSON, PERSONS, OR OTHER LIVING
THINGS, OR LOSS OR DESTRUCTION OF OR DAMAGE TO PROPERTY AFFECTING OR RELATING TO
THE LEASES, WELLS, HYDROCARBONS, REAL PROPERTY INTERESTS, AND PERSONAL PROPERTY
CONVEYED BY SELLER TO BUYER AT SUCH CLOSING AND ALLOCABLE TO THE INTERESTS
THEREIN BEING TRANSFERRED, REGARDLESS OF WHETHER SUCH CLAIM OR LIABILITY
RESULTS, IN WHOLE OR IN PART, FROM THE NEGLIGENCE OR STRICT LIABILITY OF SELLER
OR ITS AFFILIATES, EMPLOYEES, AGENTS, OR REPRESENTATIVES, TO THE EXTENT THAT
SUCH CLAIM OR LIABILITY, OR THE ACTS, OMISSIONS, EVENTS, OR CONDITIONS GIVING
RISE THERETO, ARISES, OCCURS, OR EXISTS AT OR AFTER THE APPLICABLE POSSESSION
TIME;

                                       12
<PAGE>

            (f) ninety-five percent (95%) of all obligations of Seller owed to
other Persons with respect to Imbalances (if any) pertaining to the Remaining
Assets conveyed by Seller to Buyer at such Closing and in existence at or
arising after the Effective Time;

            (g) all Claims and Liabilities relating to the payment of taxes
(including interest, penalties, and additions to tax) for which Buyer has agreed
to be responsible under the terms hereof;

            (h) all obligations of Seller (if any) relating to the accounting
for and distribution or payment of proceeds from the sale of the Hydrocarbons
produced from or allocable to the Remaining Assets conveyed by Seller to Buyer
at such Closing and the associated Retained Interests, including, without
limitation, the distribution or payment of funds held in suspense as of the
applicable Closing Date and transferred to Buyer pursuant to Section 8.3;

            (i) the responsibility for compliance with applicable Laws relating
to the Assets conveyed by Seller to Buyer at such Closing, and the maintenance
and, when necessary, procurement of Permits required by any Governmental
Authority in connection with such Remaining Assets, in each case for the period
from and after the applicable Possession Time;

            (j) the share attributable to the owner of the Remaining Assets
conveyed by Seller to Buyer at such Closing of all Claims and Liabilities
arising out of, resulting from, or relating in any way to Casualty Events on or
relating to such Remaining Assets that become Assumed Liabilities by operation
of Section 5.2(b); and

            (k) all other duties, obligations, Liabilities, and Claims, whether
in contract, in tort, or arising by operation of Law, accruing or resulting
from, arising out of, or otherwise associated with the Remaining Assets conveyed
by Seller to Buyer at such Closing for the period from and after the applicable
Possession Time.

      2.6 Retained Liabilities. Subject to the terms of this Agreement, as
between Seller and Buyer, Seller hereby expressly retains and agrees to pay,
perform, and discharge the following duties, obligations, and Liabilities with
respect to the Remaining Assets conveyed by Seller to Buyer at each Closing
(collectively, the "Retained Liabilities"):

            (a) the performance of the terms, conditions, and covenants of, and
the discharge of Seller's share of the duties, obligations, and Liabilities
(other than obligations or Liabilities for the payment of money) arising under
the terms of, the Leases, the Real Property Interests, the Transferable Permits,
and the Contracts conveyed by Seller to Buyer at the relevant Closing for the
period prior to the applicable Possession Time;

            (b) except for Assumed Liabilities, all obligations and Liabilities
of Seller or Seller's Predecessors for the payment of money with respect to the
Remaining Assets conveyed by Seller to Buyer at such Closing (including, without
limitation, the payment of such Persons' share of all costs and expenses
incurred in connection with the relevant Leases, Wells, Hydrocarbons, Real

                                       13
<PAGE>

Property Interests, Personal Property, Contracts, and Permits and the payment of
such Persons' shares of all royalties, overriding royalties, and other similar
burdens on production, as well as all rentals, shut-in well payments, minimum
royalties, and other lease maintenance payments under such Leases) for the
period prior to the Effective Time;

            (c) all Claims and Liabilities relating to the payment of taxes
(including interest, penalties, and additions to tax) for which Seller has
agreed to be responsible hereunder;

            (d) except for Assumed Liabilities, all Claims and Liabilities,
whether in contract, in tort, or arising by operation of Law, against or
suffered by Seller or Seller's Predecessors that relate in any way to, the
Remaining Assets conveyed by Seller to Buyer at such Closing (INCLUDING, WITHOUT
LIMITATION, INJURY TO OR DEATH OF ANY PERSON, PERSONS, OR OTHER LIVING THINGS,
OR LOSS OR DESTRUCTION OF OR DAMAGE TO PROPERTY AFFECTING OR RELATING TO SUCH
REMAINING ASSETS, REGARDLESS OF WHETHER SUCH CLAIM OR LIABILITY RESULTS, IN
WHOLE OR IN PART, FROM THE NEGLIGENCE OR STRICT LIABILITY OF BUYER OR ITS
AFFILIATES, EMPLOYEES, AGENTS, OR REPRESENTATIVES), to extent that any such
Claim or Liability, or the acts, omissions, events, or conditions giving rise
thereto, arose, occurred, or existed prior to the applicable Possession Time,
regardless of whether such Claim or Liability has been asserted as of the
applicable Possession Time;

            (e) all Claims (if any) of third Persons, whether as the result of
audits or otherwise, to refunds, adjustments, settlements of disputes, or other
amounts of any kind due under the terms of the Leases, the Real Property
Interests, the Permits, or the Contracts conveyed by Seller to Buyer at such
Closing and attributable to the period prior to the Effective Time;

            (f) all amounts payable by Seller or Seller's Predecessors under the
terms of all exchange traded futures contracts and over-the-counter derivative
contracts to which Seller or any Seller's Predecessor is a party as of the
Effective Time, including, without limitation, all breakage costs (if any)
incurred by Seller or Seller's Predecessors under the terms of any such
agreement as the result of the transactions contemplated in this Agreement;

            (g) all indebtedness (if any) of Seller, whether or not encumbering
all or any portion of the Remaining Assets;

            (h) ALL RETAINED ENVIRONMENTAL LIABILITIES;

            (i) all costs and expenses incurred, or to be incurred, in
connection with the completion (including, without limitation, the performance
of fracturing operations) and equipping for production of the Guyer #1 Well
(such well constituting a "Closed Asset" for purposes hereof);

                                       14
<PAGE>

            (j) all Liabilities for which Seller is responsible with respect to
Environmental Conditions under Section 4.3, Defects under Section 4.4, and
Casualty Events under Section 5.2; and

            (k) except for Assumed Liabilities, all other duties, obligations,
Claims, and Liabilities, whether in contract, in tort, or arising by operation
of Law, accruing or resulting from, arising out of, or otherwise associated with
(i) the Remaining Assets conveyed by Seller to Buyer at such Closing for the
period prior to the applicable Possession Time, and (ii) the Excluded Assets.

      2.7 Possession; Risk of Loss. As of the applicable Possession Time, Seller
shall deliver to Buyer exclusive possession and control of the Remaining Assets
conveyed by Seller to Buyer at each Closing. Seller agrees to cooperate with
Buyer to facilitate the transition of the ownership and (if applicable)
operation of such Remaining Assets to Buyer. As between Seller and Buyer, and
subject to the terms of Sections 2.5 and 2.6, Seller shall assume and bear all
risk of loss associated with the Remaining Assets conveyed by Seller to Buyer at
each Closing prior to the applicable Possession Time, and Buyer shall assume and
bear all risk of loss associated with such Remaining Assets from and after the
applicable Possession Time.

      2.8 Allocation of Adjusted Consideration. Buyer and Seller shall use
commercially reasonable efforts to agree, on or before December 15, 2006, upon
an allocation of the Adjusted Consideration among the Remaining Assets for
financial accounting and tax purposes in accordance with Section 1060 of the
Code. Buyer and Seller shall each file a Form 8594 (Asset Acquisition Statement
Under Section 1060) on a timely basis, reporting the allocation of the Adjusted
Consideration consistent with such allocation. Buyer and Seller shall file, on a
timely basis, any amendments required to such Form 8594 as a result of a
subsequent increase or decrease of the Adjusted Consideration after the Closing
Date for the Final Closing. Buyer and Seller shall not take any position on
their respective income tax returns that is inconsistent with the allocation of
the Adjusted Consideration as so agreed, or as adjusted as the result of any
subsequent increase or decrease in the Adjusted Consideration. If Buyer and
Seller are unable to agree on the allocation of the Adjusted Consideration
provided for in this Section 2.8 by December 15, 2006, either Buyer or Seller
may initiate arbitration of such dispute pursuant to the terms of Section 10.11.

                                  ARTICLE III.
                         REPRESENTATIONS AND WARRANTIES

      3.1 Representations and Warranties of Seller. Seller represents and
warrants to Buyer as follows:

            (a) Seller is a limited partnership duly organized and validly
existing under the Laws of the State of Texas. The general partner of Seller is
Trek Management, LLC, a limited liability company duly organized, validly
existing, and in good standing under the Laws of the State of Texas. Seller has
all requisite power and authority to own and operate its property (including,
without limitation, the Remaining Assets) and to carry on its business as now
conducted.

                                       15
<PAGE>

            (b) Seller has full capacity, power, and authority to enter into and
perform this Agreement and the transactions contemplated herein. The execution,
delivery, and performance by Seller of this Agreement has been duly and validly
authorized and approved by all necessary action on the part of Seller, and this
Agreement and the documents executed in connection herewith are, or upon their
execution and delivery will be, the valid and binding obligations of Seller and
enforceable against Seller in accordance with their 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) The execution, delivery, and performance by Seller 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
documents of Seller, (ii) result in a default or the creation of any Lien or
give rise to any right of termination, cancellation, or acceleration under any
of the terms of any Lease, Contract, Real Property Interest, Permit, note, bond,
mortgage, indenture, license, or other agreement, document, or instrument to
which Seller is a party or by which Seller or any of the Remaining Assets or
Remaining Retained Interests may be bound, or (iii) violate any order, writ,
injunction, judgment, decree, or Law applicable to Seller, the Remaining Assets,
or the Remaining Retained Interests.

            (d) There is no Claim by any Person or Governmental Authority
(including, without limitation, expropriation or forfeiture proceedings), and no
legal, administrative, or arbitration proceeding pending or, to Seller's
Knowledge, threatened against Seller, Seller's Predecessors, the Remaining
Assets, or the Remaining Retained Interests, or to which Seller or any Seller's
Predecessor is a party, that reasonably may be expected to (i) challenge
Seller's title to any of the Remaining Assets or Remaining Retained Interests,
(ii) subject the owner or operator of the Remaining Assets or Remaining Retained
Interests to liability in favor of any Governmental Authority or other Person as
the result of the alleged violation of, or non-compliance with, any
Environmental Law by Seller, Seller's Predecessors, or any other Affiliate of
Seller with respect to the Remaining Assets or Remaining Retained Interests or
require the owner or operator of the Remaining Assets or Remaining Retained
Interests to remediate, remove, or respond to an Environmental Condition, or a
threatened Environmental Condition, on or affecting the Remaining Assets or
Remaining Retained Interests, or (iii) otherwise adversely affect the Remaining
Assets or Remaining Retained Interests in any material respect or the ability of
Seller to consummate the transactions contemplated in this Agreement.

            (e) Except as otherwise reflected in Schedule 3.1(e), none of the
Leases, Real Property Interests, or Contracts is subject to a preferential right
to purchase, third Person consent to assignment requirement, right of first
refusal, right of first offer, or similar right or restriction.

            (f) Except for approvals by Governmental Authorities customarily
obtained after the Closings, no authorization, consent, approval, exemption,
franchise, permit, or license of, or filing with, any Governmental Authority is
required to authorize, or is otherwise required by any Governmental Authority in
connection with, the valid execution and delivery by Seller of this Agreement,
the transfer of the Remaining Assets or Remaining Retained Interests to Buyer,
or the performance by Seller of its other obligations hereunder.

                                       16
<PAGE>

            (g) Each Lease is in full force and effect as to sufficient acreage
to provide forty (40) acres for each Well or Hydrocarbon well location (whether
designated as "PUD" or Prob" on Exhibit B) allocated to such Lease on Exhibit B.
Seller and Seller's Predecessors have, in all material respects, fulfilled all
requirements for filings, certificates, consents, approvals, disclosures, and
similar matters contained in the Leases and applicable Law, and Seller is fully
qualified to own, operate, and transfer the Leases under the terms thereof and
applicable Law. Neither Seller nor any of Seller's Predecessors is in material
breach or material default, and there has occurred no event, fact, or
circumstance that, with the lapse of time or the giving of notice, or both,
would constitute such a material breach or material default by Seller or
Seller's Predecessors, with respect to any terms of any Lease, and, to Seller's
Knowledge, no other Person owning an interest in, or serving as operator of, any
Lease is in material breach or material default with respect to any of its
obligations thereunder. No lessor under any Lease has given or, to Seller's
Knowledge, threatened to give notice of any action to terminate, cancel,
rescind, repudiate, or procure a judicial reformation of any Lease or any
provision thereof. Seller and Seller's Predecessors have correctly made, or
caused to be correctly made, all payments, including, without limitation,
royalties, rentals, shut-in well payments, and other lease maintenance payments,
due in respect of the Leases thereunder.

            (h) Each of the Real Property Interests is in full force and effect.
Seller and Seller's Predecessors have, in all material respects, fulfilled all
requirements for filings, certificates, consents, approvals, disclosures, and
similar matters contained in the Real Property Interests and applicable Law, and
Seller is fully qualified to own, operate, and transfer the Real Property
Interests under the terms thereof and applicable Law. Neither Seller nor any of
Seller's Predecessors is in material breach or material default, and there has
occurred no event, fact, or circumstance that, with the lapse of time or the
giving of notice, or both, would constitute such a material breach or material
default by Seller or Seller's Predecessors, with respect to any of its
obligations under any Real Property Interest, and, to Seller's Knowledge, no
other Person owning an interest in any Real Property Interest or serving as
operator of any Real Property Interest is in material breach or material default
with respect to any of its obligations thereunder. No grantor, lessor, licensor,
or other counterparty under any Real Property Interest has given or, to Seller's
Knowledge, threatened to give notice of any action to terminate, cancel,
rescind, repudiate, or procure a judicial reformation of any Real Property
Interest or any provision thereof. Seller and Seller's Predecessors have
correctly made, or caused to be correctly made, all rental and other payments
due in respect of the Real Property Interests thereunder.

            (i) Seller has furnished to Buyer true and correct copies of all of
the Contracts described on Exhibit D, and there are no contracts, agreements,
instruments, or documents affecting the Remaining Assets or the Remaining
Retained Interests other than the Contracts described on Exhibit D. With respect
to the Contracts: (i) all Contracts are in full force and effect; (ii) neither
Seller nor any of Seller's Predecessors is in material breach or material
default, and there has occurred no event, fact, or circumstance that, with the
lapse of time or the giving of notice, or both, would constitute such a material

                                       17
<PAGE>

breach or material default by Seller or Seller's Predecessors, with respect to
the terms of any Contract; (iii) to Seller's Knowledge, no other party is in
material breach or material default with respect to the terms of any Contract;
and (iv) neither Seller, Seller's Predecessors, nor, to Seller's Knowledge, any
other party to any Contract has given or threatened to give notice of any action
to terminate, cancel, rescind, or procure a judicial reformation of any Contract
or any provision thereof.

            (j) The Permits described on Exhibit E constitute all necessary
Permits affecting or pertaining to the Remaining Assets and the Remaining
Retained Interests. All Transferable Permits are also described on Exhibit E.
Seller, Seller's Predecessors, or, to Seller's Knowledge, each operator of the
Remaining Assets and the Remaining Retained Interests, as applicable, has
complied in all material respects with all Laws and Permits relating to the
Remaining Assets and Remaining Retained Interests, including, without
limitation, Environmental Laws and Laws requiring the provision of surety bonds
or other forms of security or financial assurance with respect to the
performance of operations (including, without limitation, plugging and
abandonment operations) on the Remaining Assets and Remaining Retained
Interests. Seller or, to Seller's Knowledge, each operator of the Remaining
Assets and Remaining Retained Interests, as applicable, has all Permits required
in connection with the ownership and operation of the Remaining Assets and
Remaining Retained Interests (including those required under Environmental
Laws), and has properly made all filings necessary or appropriate to obtain such
Permits. All of such Permits and filings are in full force and effect. Neither
Seller, Seller's Predecessors, nor, to Seller's Knowledge, any other Person has
received notice from any Governmental Authority or other Person that any such
applicable Law, Permit, or filing has been violated or not complied with respect
to the Remaining Assets or Remaining Retained Interests by Seller, Seller's
Predecessors, or any other Person.

            (k) As of the date of this Agreement, the Wells described on Exhibit
B are the only wells currently capable, or expected to be capable, of producing
Hydrocarbons located on the Leases. All of such Wells have been, or will be,
drilled, completed, and operated within the boundaries of the Leases or within
the limits otherwise permitted by contract and by applicable Law and in
compliance with the provisions of the applicable Contracts and all applicable
Laws. The production of Hydrocarbons from such Wells has not been in excess of
the allowable production established for each Well. All Hydrocarbon wells
located on the Leases that have permanently ceased the production of
Hydrocarbons in paying quantities, as well as all plants, pipelines, personal
property, pits, equipment, materials, appurtenances, and facilities located on
or used in connection with the Leases, Wells, and Real Property Interests and
that Seller has, or Seller's Predecessors or Affiliates have, abandoned or
otherwise permanently ceased to use, have been plugged and/or abandoned, and all
related salvage, site clearance, and surface restoration operations have been
completed, in accordance with applicable Laws (including, without limitation,
Environmental Laws), and all costs and expenses incurred in connection therewith
have been paid in full. None of the Wells has been plugged and abandoned.

            (l) There are no calls on production, options to purchase, or
similar rights in effect with respect to any portion of the Hydrocarbons
allocable to the Remaining Assets and the Remaining Retained Interests, and all

                                       18
<PAGE>

Contracts for the sale of Hydrocarbons are terminable without penalty on no more
than thirty (30) days' prior notice. Seller is currently receiving the prices
provided for under such sales Contracts with respect to the Hydrocarbons. All
proceeds from the sale of Hydrocarbons attributable to the interests of Seller
in the Remaining Assets and Remaining Retained Interests have been and are being
disbursed to Seller under appropriate division orders, transfer orders, or
similar documents signed by or otherwise binding on Seller, and no portion of
any such proceeds is being held in suspense, subject to a Claim for refund by
the purchaser, used as an offset or as collateral for other obligations (whether
disputed or undisputed), or otherwise not being paid to Seller as it becomes due
in the ordinary course of business.

            (m) Seller has no Claim constituting a Remaining Asset, and is not
subject to any obligation constituting an Assumed Liability, with respect to any
Imbalance that relates to any of the Remaining Assets or Remaining Retained
Interests. Seller is not obligated by virtue of any prepayment made under any
sales Contract or other Contract containing a "take-or-pay" clause, or under any
production payment, forward sale, balancing, deferred production, or similar
arrangement, to deliver Hydrocarbons produced from or allocable to any Remaining
Asset or Remaining Retained Interest at some future time without receiving full
payment therefor at or after the time of delivery.

            (n) Seller and Seller's Predecessors have paid and discharged their
respective proportionate shares of all amounts owed by Seller and Seller's
Predecessors in connection with the Remaining Assets and the Remaining Retained
Interests for which Seller or Seller's Predecessors have received invoices from
(i) the operator(s) thereof, (ii) any Affiliate of Seller providing equipment,
supplies, materials, or services in connection with the Remaining Assets, and
(iii) all other Persons providing such equipment, supplies, materials, or
services directly to Seller, Seller's Predecessors, or any Affiliate of Seller.
There are no outstanding calls or payments due from Seller or Seller's
Predecessors under the terms of the Contracts. Schedule 3.1(n) contains a true
and complete list and description, as of the date of execution of this
Agreement, of all authorities for expenditures, plans of exploration and/or
development, and other commitments as to which Seller or Seller's Predecessors
have become obligated regarding drilling, reworking, or other operations or
other capital expenditures on or relating to the Remaining Assets or the
Remaining Retained Interests for which all of the activities or expenditures
anticipated in such AFEs, plans, or commitments have not been completed prior to
the date of this Agreement. Except as set forth in Schedule 3.1(n), neither the
Leases nor the Contracts contain any express contractual obligation to drill
additional Hydrocarbon wells or engage in other operations on the Remaining
Assets or Remaining Retained Interests as to which Seller or Seller's
Predecessors have become obligated, except for obligations arising under offset
well provisions and obligations arising under Contracts that allow the parties
thereto to elect whether to participate. There are no material operations on the
Leases under any of the Contracts with respect to which Seller, Seller's
Predecessors, or any other Person has become a non-consenting party.

            (o) Except with respect to those Property-Related Taxes prorated
between Seller and Buyer as provided in Section 10.3, during the period of
ownership by Seller and Seller's Predecessors of the Remaining Assets and the
Remaining Retained Interests, all Property-Related Taxes imposed or assessed

                                       19
<PAGE>

with respect to, measured by, charged against, or attributable to the Remaining
Assets and the Remaining Retained Interests, or the ownership thereof, or the
production, processing, gathering, treatment, transportation, and marketing of
Hydrocarbons therefrom or allocable thereto, in each case that became due and
payable prior to the Effective Time have been properly paid.

            (p) Seller has not engaged any financial advisor, broker, or finder,
or incurred any liability, contingent or otherwise, in favor of any such other
Person relating to the transactions contemplated in this Agreement.

            (q) There are no bankruptcy, insolvency, reorganization, or
arrangement proceedings pending, being contemplated by, or to Seller's
Knowledge, threatened against Seller, any Seller's Predecessor, or any other
Affiliate that controls Seller.

            (r) Seller, Seller's Predecessors, or their Affiliates, have paid
all premiums required under, and are otherwise in compliance with, the terms of
all insurance policies or self-insurance programs obtained by Seller or Seller's
Predecessors with respect to the Remaining Assets and the Remaining Retained
Interests, all of which policies or programs, or renewals thereof, have been
during the period of ownership by Seller and Seller's Predecessors of the
Remaining Assets and the Remaining Retained Interests, and are as of the date of
execution of this Agreement, in full force and effect.

      3.2 Representations and Warranties of Buyer. Buyer represents and warrants
to Seller as follows:

            (a) Buyer is a corporation duly organized, validly existing, and in
good standing under the Laws of the State of Delaware. Buyer has all requisite
power and authority to own and operate its property and to carry on its business
as now conducted.

            (b) Buyer has full capacity, power, and authority to enter into and
perform this Agreement and the transactions contemplated herein. The execution,
delivery, and performance by Buyer of this Agreement have been duly and validly
authorized and approved by all necessary action of Buyer. This Agreement and the
documents executed in connection herewith are, or upon their execution and
delivery will be, the valid and binding obligations of Buyer and enforceable
against Buyer in accordance with their 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) The execution, delivery, and performance by Buyer of this
Agreement and the consummation of the transactions contemplated herein will not
(i) conflict with or result in a breach of any provision of the organizational
documents of Buyer, (ii) result in a default or the creation of any Lien or give
rise to any right of termination, cancellation, or acceleration under any of the
terms of any note, bond, mortgage, indenture, license, or other agreement to
which Buyer is a party or by which Buyer or any of its property may be bound, or
(iii) violate any order, writ, injunction, judgment, decree, or Law applicable
to Buyer or its property.

                                       20
<PAGE>

            (d) There is no Claim by any Person or Governmental Authority
(including, without limitation, expropriation or forfeiture proceedings), and no
legal, administrative, or arbitration proceeding pending or, to Buyer's
Knowledge, threatened against Buyer, or to which Buyer is a party, that
reasonably may be expected to have a material adverse effect upon the ability of
Buyer to consummate the transactions contemplated in this Agreement.

            (e) Except for approvals by Governmental Authorities customarily
obtained after the Closing, no authorization, consent, approval, exemption,
franchise, permit, or license of, or filing with, any Governmental Authority or
any other Person is required to authorize, or is otherwise required in
connection with, the valid execution and delivery by Buyer of this Agreement or
the performance by Buyer of its obligations hereunder and thereunder.

            (f) Buyer is responsible for all fees and expenses (if any) of the
Maxim Group or any individual associated therewith that may be due in connection
with the transactions contemplated herein. Buyer has not engaged any other
financial advisor, broker, agent or finder (including, without limitation, the
Maxim Group), or incurred any liability, contingent or otherwise, in favor of
any other such Person relating to the transactions contemplated by this
Agreement.

            (g) There are no bankruptcy, insolvency, reorganization, or
arrangement proceedings pending, being contemplated by, or, to Buyer's
Knowledge, threatened against Buyer or any Affiliate that controls Buyer.

            (h) Buyer is acquiring the Remaining Assets for its own account, for
investment, and not with a view to, or for offer or resale in connection with, a
distribution thereof (including, without limitation, the transfer of fractional
undivided interests therein) within the meaning of the Securities Act of 1933,
as amended, and the rules and regulations promulgated thereunder, or a
distribution thereof in violation of any applicable securities Law. If, in the
future, Buyer sells, transfers, or otherwise disposes of the Remaining Assets,
or any portion thereof, or any fractional undivided interest therein, Buyer will
do so in full compliance with any applicable securities Laws.

      3.3 Disclaimers. To the extent required by applicable Law to be operative,
the disclaimers of certain warranties contained in this Section 3.3 are
"conspicuous disclaimers" for purposes of any applicable Law. EXCEPT AS
OTHERWISE PROVIDED IN THIS AGREEMENT AND THE CONVEYANCE, BUYER AGREES THAT
SELLER IS CONVEYING THE REMAINING ASSETS WITHOUT REPRESENTATION, WARRANTY, OR
INDEMNITY, EITHER EXPRESSED OR IMPLIED AT COMMON LAW, BY STATUTE, OR OTHERWISE
(ALL OF WHICH SELLER HEREBY DISCLAIMS), RELATING TO (i) TITLE, (ii)
MERCHANTABILITY, DESIGN, OR QUALITY, OR (iii) FITNESS FOR ANY PARTICULAR
PURPOSE.

                                       21
<PAGE>

                                   ARTICLE IV.
                              ACCESS; DUE DILIGENCE

      4.1 Access to Records; Title Due Diligence and Curative. From and after
the date of execution hereof through the Closing Date for the Final Closing,
Seller shall make available to Buyer and its representatives, during normal
business hours (and, if reasonably requested, such other times as Buyer may deem
necessary to complete its due diligence within the time period provided herein)
at Seller's offices, all books, records, documents, and information of every
kind and character (including, without limitation, originals or photocopies, as
available, of the Leases, the Real Property Interests, the Contracts, the
Permits, the Records, and the Transferable Data) in the possession of Seller or
Seller's Predecessors relating in any way to the Remaining Assets and the
Remaining Retained Interests. Seller shall also cause its employees, counsel,
accountants, and other consultants to cooperate with and assist Buyer in
connection with such due diligence review. Unless prohibited from doing so by
confidentiality or other contractual arrangements between Seller or Seller's
Predecessors and third Persons, Buyer shall have the right to photocopy such
books, records, documents, and information, or any portion thereof, at Buyer's
expense. If Buyer requests information not in the possession of Seller or
Seller's Predecessors, Seller shall use reasonable efforts to obtain the
requested information, at Buyer's expense, from the applicable operators or
other Persons.

      4.2 Operational and Environmental Assessment. Prior to the execution of
this Agreement, Buyer and its authorized representatives, at the sole cost,
risk, and expense of Buyer or its representatives, as applicable, have conducted
such on-site inspections, inventories, and assessments of the Remaining Assets
and the Remaining Retained Interests (including, without limitation, the
witnessing of well tests, the examination of well logs and other geological and
geophysical data, and the performance of soil and water tests and other tests,
inspections, examinations, investigations, and studies selected by Buyer), and
interviewed such employees or contract personnel of Seller, in each case as
Buyer deems necessary to permit Buyer to prepare reserve engineering and other
reports relating to, and assess the operational and environmental condition of,
the Remaining Assets and the Remaining Retained Interests. From the date of
execution hereof through the Closing Date for the Final Closing, Seller shall
continue to afford, or shall use reasonable commercial efforts to cause the
relevant operators or other Persons to afford, to Buyer and its authorized
representatives, at reasonable times and at the sole cost, risk, and expense of
Buyer or its representatives, as applicable, reasonable access to and entry upon
all of the Leases, Wells, and Real Property Interests for the purposes of any
additional on-site inspections, inventories, and assessments of the Remaining
Assets and the Remaining Retained Interests that Buyer deems necessary, as well
as reasonable access to any employees or contract personnel of Seller that have
been involved in the operation, maintenance, or development of the Remaining
Assets and the Remaining Retained Interests.

      4.3 Environmental Conditions.

            (a) As the result of the inspections, tests, examinations,
investigations, and studies relating to the environmental status of the
Remaining Assets conducted by Buyer prior to the execution hereof as described

                                       22
<PAGE>

in Section 4.2, Buyer has identified no Environmental Conditions requiring
remedial action.

            (b) If Seller or Buyer acquires Knowledge, between the date of
execution of this Agreement and the Closing Date for the Final Closing, of any
new and material Environmental Condition affecting any of the Remaining Assets
identified on Schedule 2.2(e), the Party that discovers the Environmental
Condition shall provide to the other Party written notice of such fact no later
than three (3) Business Days after the discovery of such Environmental
Condition. If such three-Business Day period would expire after the Closing Date
for the Final Closing, such Closing Date shall be deferred, at a minimum, until
the expiration of such three-Business Day period. Seller shall have the first
right and option, but not the obligation, to remedy all such Environmental
Conditions at Seller's sole cost, risk, and expense in accordance with
applicable Environmental Laws. If Seller elects to remedy such an Environmental
Condition, Seller shall provide to Buyer written notice of such fact no later
than three (3) Business Days after its receipt of Buyer's notice. The failure of
Seller to give such notice to Buyer within such three-Business Day period shall
constitute an election by Seller not to remedy the relevant Environmental
Condition. If Seller elects to remedy such an Environmental Condition, Seller
will commence such remediation as soon as reasonably practicable after its
receipt of Buyer's notice and shall promptly and diligently continue such
efforts until such Environmental Condition has been fully remediated in
accordance with applicable Environmental Laws.

            (c) If Seller elects, or is deemed to have elected, not to remedy an
Environmental Condition for which notice is given under Section 4.3(b), or if
Seller is unable to remedy such an Environmental Condition prior to the Closing
Date for the Final Closing, Buyer shall accept the affected Remaining Asset
subject to such unremedied Environmental Condition and proceed to Closing with
respect to such Remaining Asset, in which case such unremedied Environmental
Condition shall become an Assumed Environmental Liability for purposes hereof.
Thereafter, Seller shall (i) file, or cause to be filed, all permissible Claims
under all applicable insurance policies of Seller and its Affiliates with
respect to the relevant Environmental Condition, (ii) assign to Buyer all rights
of Seller to receive the proceeds payable under such insurance policies with
respect to such Claims, and (iii) promptly remit to Buyer all such insurance
proceeds following Seller's receipt thereof. Seller shall also assign to Buyer
any and all Claims against third Persons that Seller may have with respect to
such Environmental Condition. To the extent that the aggregate actual costs and
expenses (including, without limitation, Liabilities to Governmental Authorities
and other Persons) incurred by Buyer to remedy such an Environmental Condition
exceed the total amount of the insurance proceeds payable under the terms of
Seller's insurance policies with respect thereto, Seller shall, within ten (10)
days after its receipt of Buyer's written request therefor, pay to Buyer an
amount, not to exceed the Allocated Value of the affected Remaining Asset(s),
equal to the excess of such actual remediation costs and expenses over such
insurance proceeds. If Buyer subsequently recovers, on a final and
non-appealable basis, damages from any third Person as the result of Claims
assigned by Seller to Buyer relating to such an Environmental Condition, Buyer
shall, within ten (10) days after Buyer's receipt of such final and

                                       23
<PAGE>

non-appealable damage award, pay to Seller an amount equal to the lesser of the
amount paid by Seller to Buyer pursuant to the preceding sentence of this
Section 4.3(c) or the total amount of Buyer's damage award.

      4.4 Matters Relating to Title.

            (a) Prior to the date of execution of this Agreement, Buyer has
conducted such examinations of Seller's title to all of the Remaining Assets
listed on Schedule 2.2(d) as Buyer deems necessary. As the result of such title
examinations, Buyer has approved title to all of such Remaining Assets.

            (b) With respect to the Remaining Assets listed on Schedule 2.2(e),
Buyer shall have the right to conduct such examination of the title thereto as
Buyer deems necessary. To the extent that, as of the date of execution of this
Agreement, Seller has not acquired all of the oil and gas leases required to
cover the full mineral estate in the lands included in any Remaining Asset
listed on Schedule 2.2(e), then no later than November 15, 2006, Seller shall
undertake to acquire such outstanding oil and gas leases and deliver to Buyer
copies thereof, together with a statement setting forth Seller's Working
Interest and Net Revenue Interest therein (which shall be deemed to be
incorporated into Exhibit B without further action by the Parties) and copies of
all title opinions, information, data, and materials obtained by Seller in
connection therewith. Each oil and gas lease thus acquired by Seller shall
become a "Lease" for purposes of this Agreement, which shall become effective as
to each such new Lease as of its date of execution by its lessor. Buyer shall
deliver to Seller written notice of any claimed Defects discovered by Buyer
pursuant to such title examination no later than December 1, 2006. Seller shall
use reasonable commercial efforts to cure all such Defects at Seller's sole
cost, risk, and expense no later than December 15, 2006. Seller will commence
such curative activities as soon as reasonably practicable after its receipt of
Buyer's notice and shall diligently and in good faith pursue such efforts until
all such Defects have been cured in full. Buyer shall cooperate fully and in
good faith with, and provide reasonable assistance to, Seller in this regard, as
Seller may reasonably request from time to time. If, on December 15, 2006, there
remain any Defects pertaining to any Tranche 2 Asset listed on Schedule 2.2(e)
that have not been cured by Seller or waived by Buyer, then unless otherwise
agreed by the Parties, such Tranche 2 Asset shall be excluded from the Final
Closing. If Seller acquires the title curative required in connection with such
a Tranche 2 Asset during the term of the Restated AMI Agreement, such Tranche 2
Asset shall constitute an "Acquired Interest" within the meaning of the Restated
AMI Agreement, notwithstanding that such Tranche 2 Asset may be located outside
the area of mutual interest described therein. If, on December 15, 2006, there
remain any Defects pertaining to the Tranche 3 Assets listed on Schedule 2.2(e)
that have not been cured by Seller or waived by Buyer, then subject to the terms
of Section 6.3, Buyer's sole remedy shall be to terminate this Agreement;
provided, however, that if Buyer fails to terminate this Agreement pursuant to
this Section 4.4(b) on or before December 20, 2006, such failure shall
constitute a waiver by Buyer of all uncured Defects pertaining to the Tranche 3
Assets listed on Schedule 2.2(e). If Seller and Buyer are unable to agree on the
existence or curative status of a Defect asserted by Buyer under this Section
4.4(b), Buyer and Seller shall submit such dispute for resolution by arbitration
in accordance with the terms of Section 10.11.

                                       24
<PAGE>

            (c) Except as provided in Section 4.4(b), Seller shall have no
liability to Buyer if, despite Seller's reasonable commercial efforts pursued
diligently and in good faith, Seller is unable to obtain the curative set forth
for a Defect asserted pursuant to Section 4.4(b).

            (d) If a Remaining Asset identified on Schedule 2.2(e) (including,
without limitation, a Contract) is subject to a preferential right to purchase,
right of first refusal, right of first offer, or similar right that is exercised
prior to the Closing for such Remaining Asset, or a third Person consent to
assignment required to be obtained before the relevant Remaining Asset may be
assigned and that is not obtained prior to the Closing for such Remaining Asset,
Seller shall be deemed to have suffered a complete failure of title with respect
to the affected Remaining Asset, such Remaining Asset shall be excluded from the
Assets conveyed to Buyer at the relevant Closing, the Allocated Value of the
affected Remaining Asset shall be excluded from the Base Consideration paid at
such Closing, and, in the case of such a preferential right to purchase or
similar right, Seller shall be entitled to retain all proceeds paid for the
affected Remaining Asset by the Person exercising such preferential right to
purchase or similar right. If Buyer purchases at a Closing a Remaining Asset
burdened by a preferential right to purchase or similar right that has not been
exercised as of the Closing Date for such Remaining Asset, regardless of whether
the time period for the exercise of such right has expired, the Base
Consideration paid at such Closing shall include the full Allocated Value of the
affected Remaining Asset. If, for any reason, such preferential right to
purchase or similar right is successfully exercised by the holder thereof after
the Closing for the affected Remaining Asset, Buyer shall be entitled to retain
all proceeds paid for the affected Remaining Asset by the holder of the relevant
preferential right to purchase or similar right, and Seller shall pay to Buyer,
in cash, an amount equal to the excess (if any) of the Allocated Value of such
Remaining Asset (adjusted as provided in Sections 2.4(b)(ii) and 2.4(c)(ii) and
net of applicable Property-Related Taxes) over the proceeds received by Buyer
from the holder of such preferential right to purchase.

                                   ARTICLE V.
                         OTHER MATTERS PRIOR TO CLOSING

      5.1 Operations. Through the Possession Time for each Remaining Asset
identified on Schedule 2.2(e), Seller shall, to the extent within its reasonable
control: (a) cause such Remaining Asset to be maintained and operated in a good
and workmanlike manner consistent with past practices and in compliance with
applicable Laws; (b) obtain the prior written consent of Buyer as to all
material decisions relating to such Remaining Asset (other than decisions
required for safety purposes or by other emergencies), including, without
limitation, (i) all contracts or agreements regarding the gathering, processing,
transportation, sale, and marketing of Hydrocarbons with terms of ninety (90)
days or more, (ii) proposed expenditures after the date of this Agreement
related to such Remaining Asset in an amount greater than U.S. $25,000.00, net
to the interest of Seller to be transferred, (iii) all farmout or farmin
proposals or agreements, (iv) all contracts or agreements regarding the
construction, installation, and operation of any gathering or transportation
pipelines intended to serve any of the Wells located on such Remaining Asset,
(v) all operations as to which Seller or any other co-owner of a Lease, Well, or
any Personal Property included in such Remaining Asset proposes not to
participate, (vi) the plugging and abandonment of any Well or Personal Property
included in such Remaining Asset, (vii) the amendment, release, or abandonment
of any Lease, or portion thereof, included in such Remaining Asset, (viii) the
waiver, compromise, or settlement of any right or Claim pertaining to such
Remaining Asset, (ix) all amendments to, or waivers of rights under, or
termination of any Real Property Interest or Contract included in such Remaining
Asset, and (x) the initiation of any proceeding before any Governmental
Authority pertaining to such Remaining Asset; (c) perform all material
obligations of Seller under the relevant Leases, Real Property Interests,
Contracts, and Permits; (d) promptly notify Buyer of (i) any notice or

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<PAGE>

threatened notice of which Seller becomes aware relating to any default, inquiry
into any possible default, or action to alter, terminate, rescind, repudiate, or
procure a judicial reformation of any Lease, Real Property Interest, Contract,
or Permit, or any provision thereof, (ii) any new suit, action, or other
proceedings before any court or Governmental Authority relating to such
Remaining Asset, and (iii) any other event, fact, or circumstance of which
Seller acquires Knowledge that may reasonably be expected to have a material
effect on such Remaining Asset or to impair materially the ability of Seller to
consummate the transactions contemplated herein; (f) make or give all
notifications, filings, consents, or approvals from, to, or with all
Governmental Authorities, and take all other actions reasonably requested by
Buyer that are necessary for, and cooperate with Buyer in obtaining, the
issuance, assignment, or transfer, as the case may be, by each such Governmental
Authority of such Permits as may be necessary for Buyer to own and operate such
Remaining Asset after the Final Closing; (g) maintain in effect insurance with
respect to such Asset providing the same type of coverage, in the same amounts,
and with the same deductibles as the insurance maintained in effect by Seller
with respect to such Remaining Asset on the date of execution hereof; (h) timely
pay and discharge when due all costs and expenses incurred in connection with
such Remaining Asset, except to the extent contested in good faith by Seller
utilizing appropriate actions, and otherwise keep such Remaining Asset free of
Liens that do not constitute Permitted Encumbrances; and (i) not mortgage,
pledge, encumber, dedicate, or sell, or agree to mortgage, pledge, encumber,
dedicate, or sell, any portion of such Remaining Asset except for the
disposition of Hydrocarbons in the ordinary course of Seller's business pursuant
to Contracts in effect on the date hereof.

      5.2 Casualty Event.

            (a) Seller shall give Buyer prompt written notice of any Casualty
Event that occurs with respect to any Remaining Asset identified on Schedule
2.2(e) between the date of execution hereof and the Closing Date for the Final
Closing, together with a description of the applicable insurance coverage and an
estimate of Seller's exposure with respect to such Casualty Event. Seller shall
have the first right and option to repair or, in the case of Personal Property,
replace with items of equivalent quality and value, any such Remaining Asset
damaged or taken by the relevant Casualty Event at Seller's sole cost and
expense. If Seller elects to repair or replace such damaged or taken Remaining
Asset, Seller shall provide to Buyer written notice of such fact no later than
three (3) Business Days after the occurrence of the relevant Casualty Event. The
failure of Seller to give such a notice to Buyer within such three-Business Day
period shall constitute an election by Seller not to repair the damage caused by
such Casualty Event or replace the damaged or taken Remaining Asset. If Seller
elects to repair the damage caused by the relevant Casualty Event or replace the
Remaining Asset damaged or taken, Seller shall commence such repair or

                                       26
<PAGE>

replacement as soon as reasonably practicable after the occurrence of such
Casualty Event, promptly and diligently continue such efforts until such damaged
or taken Remaining Asset has been fully repaired or replaced with an item of
comparable quality and value, and pay all costs and expenses incurred in
connection therewith.

            (b) If Seller elects, or is deemed to have elected, not to repair or
replace the damaged or taken Remaining Asset, or if Seller is unable to repair
or replace the damaged or taken Remaining Asset prior to the Closing Date for
the Final Closing, Buyer shall accept the affected Remaining Asset subject to
such unremedied Casualty Event and proceed to Closing with respect to such
Remaining Asset, in which case such unremedied Casualty Event shall become an
Assumed Liability for purposes hereof. Thereafter, Seller shall (i) file, or
cause to be filed, all permissible Claims under all applicable insurance
policies of Seller and its Affiliates with respect to the relevant Casualty
Event, (ii) assign to Buyer all rights of Seller to receive the proceeds payable
under such insurance policies with respect to such Claims, and (iii) promptly
remit to Buyer all such insurance proceeds following Seller's receipt thereof.
Seller shall also assign to Buyer any and all Claims against third Persons that
Seller may have with respect to such Casualty Event. To the extent that the
aggregate actual costs and expenses incurred by Buyer to repair the damaged or
taken Remaining Asset or to replace same with an item of comparable quality and
value exceed the total amount of the insurance proceeds payable under the terms
of Seller's insurance policies with respect thereto, Seller shall, within ten
(10) days after its receipt of Buyer's written request therefor, pay to Buyer an
amount, not to exceed the Allocated Value of the affected Remaining Asset(s),
equal to the excess of such actual repair or replacement costs and expenses over
such insurance proceeds. If Buyer subsequently recovers, on a final and
non-appealable basis, damages from any third Person as the result of Claims
assigned by Seller to Buyer relating to such a Casualty Event, Buyer shall,
within ten (10) days after Buyer's receipt of such final and non-appealable
damage award, pay to Seller an amount equal to the lesser of the amount paid by
Seller to Buyer pursuant to the preceding sentence of this Section 5.2(b) or the
total amount of Buyer's damage award.

      5.3 Publicity. Seller and Buyer shall consult with each other with regard
to all press releases or other public or private announcements issued or made at
or after the date of execution hereof concerning this Agreement or the
transactions contemplated herein, and, except as may be required by applicable
Laws or the applicable rules and regulations of any stock exchange, neither
Buyer nor Seller shall issue any such press release or other publicity without
the prior written consent of the other party, which shall not be unreasonably
withheld.

      5.4 Compliance with Conditions. Promptly following the execution of this
Agreement, Seller shall send to the holder of each preferential right to
purchase, right of first refusal, right of first offer, or similar right
burdening a Remaining Asset and each Person whose consent to an assignment of a
Remaining Asset is required prior to the Closing for such Remaining Asset such
written notice concerning the transactions contemplated in this Agreement as is
required under the terms of the document or instrument creating such right or
requiring such consent, requesting, as applicable, the waiver of the relevant
right or the granting of the required consent. In addition, each Party will
proceed diligently to cause all of the conditions to the other Party's
obligations to close to be satisfied. If the conditions to a Party's obligations

                                       27
<PAGE>

to close with respect to a Remaining Asset have been satisfied, or expressly
waived by the other Party, in a timely manner as provided herein, and such first
Party refuses to close, the Party refusing to close, at the option of the other
Party, shall be deemed to have breached this Agreement.

      5.5 Maintenance of Existence. Until the Final Closing, Buyer and Seller
shall each maintain its respective existence and its rights and franchises and
procure the extension or renewal of any right, franchise, or privilege expiring
as the result of the lapse of time.

      5.6 Mutual Assurances. Subject to the terms of this Agreement, each Party
will use reasonable commercial efforts to take, or to cause to be taken, all
actions and to do, or cause to be done, all things necessary, proper, or
advisable under applicable Laws to consummate and make effective the
transactions contemplated by this Agreement, including (a) cooperation in
determining whether any action, approval, or waiver by or in respect of, or
filing with, any Governmental Authority is required in connection with the
consummation of the transactions contemplated by this Agreement; (b) cooperation
in seeking and obtaining any such actions, approvals, waivers, or filings; and
(c) the execution of any additional instruments necessary to consummate the
transactions contemplated hereby.

      5.7 Notification of Certain Matters. Each Party shall give prompt notice
to the other Party of (a) the occurrence or nonoccurrence of any event that
would be likely to cause any representation or warranty of such Party contained
in this Agreement to be untrue or inaccurate in any material respect at or prior
to any Closing Date and (b) any material failure of such Party to comply with or
satisfy any covenant, condition, or agreement to be complied with or satisfied
by it hereunder; provided, however, that the delivery of any notice pursuant to
this Section 5.9 shall not limit or otherwise affect the remedies available
hereunder to the Party receiving such notice.

      5.8 Designation as Operator. On each Closing Date, except as otherwise
agreed by the Parties, Seller shall resign, and shall cause its Affiliate to
resign, as operator of all Remaining Assets conveyed by Seller to Buyer on such
Closing Date and the corresponding Remaining Retained Interests as to which
Seller, any Seller's Predecessor, or Seller's Affiliate has served as operator
prior to such Closing. Seller does not warrant or guarantee that, after any
Closing, Buyer will become the operator of any Remaining Asset or Remaining
Retained Interest operated by Seller, Seller's Predecessors, or Seller's
Affiliate prior to the relevant Closing as to which there are co-owners of the
relevant Lease(s). With respect to each such Remaining Asset or Remaining
Retained Interest, Seller shall, and shall cause Seller's Predecessors and its
Affiliate to, support Buyer in Buyer's efforts to be named replacement operator
of such Remaining Asset or Remaining Retained Interest under the terms of the
applicable Contracts effective as of the applicable Possession Time (or as soon
thereafter as is reasonably practicable) and will use, and will cause Seller's
Predecessors and its Affiliate to use, reasonable commercial efforts to obtain
the votes of the other co-owners in the relevant Lease(s) in favor of such
election. Except as otherwise agreed by the Parties, with respect to each
Remaining Asset or Remaining Retained Interest owned in its entirety by Seller,
within five (5) Business Days after the Closing for such Remaining Asset, and
with respect to each Remaining Asset or Remaining Retained Interest as to which
there are co-owners of the relevant Lease(s), within five (5) Business Days
after Buyer is named replacement operator under the terms of the applicable

                                       28
<PAGE>

Contracts, Seller, Seller's Predecessors, Seller's Affiliate, and Buyer shall
make all necessary filings and take all other actions necessary to cause the
resignation of Seller, any Seller's Predecessor, or Seller's Affiliate, as
applicable, as operator and Buyer's designation as the replacement operator of
such Remaining Asset or Remaining Retained Interest to be recognized and, if
required, approved by all relevant Governmental Authorities. In each case,
Seller shall use, and will cause Seller's Predecessors and its Affiliate to use,
reasonable commercial efforts to assist Buyer in assuming the timely operation
and management of such Remaining Asset or Remaining Retained Interest.

      5.9 Financial Matters. To permit Buyer to perform the required audit of
the revenues and direct operating expenses attributable to the Remaining Assets
pursuant to SEC regulations, and notwithstanding the terms of Section 4.1,
Seller, after each Closing, shall afford to Buyer and Buyer's counsel, internal
and independent auditors, and other authorized representatives, from and after
the date of execution hereof, reasonable access (no later than two (2) Business
Days after Buyer's request therefor) to Seller's financial accounting books and
records relating to the Remaining Assets conveyed by Seller to Buyer at such
Closing (including, without limitation, (a) joint interest billings for Working
Interests by Lease and/or Well, (b) vendor invoices, (c) lease operating expense
statements, (d) revenue database and records for distributions to Net Revenue
Interest owners, (e) check stubs, cancelled checks, and other evidence of
payments made, (f) vendor and joint interest owner correspondence, (g)
authorities for expenditures for drilling, completion, workover, and other
capital projects and reconciliations thereof against actual costs incurred, (h)
filings, returns, and other materials relating to Property-Related Taxes, and
(i) the Leases and the Contracts) for the calendar years ending December 31,
2003, December 31, 2004, December 31, 2005, and the period beginning January 1,
2006, through the relevant Closing Date. Such access shall include the right of
Buyer to photocopy, at Buyer's expense, such financial accounting books and
records and reasonable access during normal business hours to the independent
auditors and consulting petroleum engineers of Seller and Seller's Predecessors,
at Buyer's expense and on terms specified by such auditors and engineers, and
the internal accounting, financial, engineering, and other personnel of Seller
and Seller's Predecessors who are knowledgeable about the Remaining Assets, as
well as permission to contact vendors and joint interest owners. Buyer shall
cooperate with Seller to minimize the disruption of Seller's business and office
operations as the result of Buyer's activities under this Section 5.9. Upon
Buyer's request, Seller shall provide a signed representative letter to Buyer's
independent auditors confirming, to the Knowledge of Seller and Seller's
Predecessors, the accuracy of the financial and other data provided for such
audit.

      5.10 Surface Use Agreement. Concurrently with the execution of this
Agreement, Seller has executed and delivered to Buyer the Surface Use Agreement,
pursuant to which Seller permits Buyer to use the surface well pad sites
described as Excluded Assets in Section 2.3(p) during the period from the date
of execution of this Agreement through the Closing Date for the Final Closing.

      5.11 Well Obligation. On or before December 1, 2006, Buyer agrees to
commence, or to cause to be commenced, for the account of itself and Seller, the
actual drilling (meaning, with a drill bit turning in the ground) of a well in
search of oil or gas at a legal location of Buyer's choice on the lands covered
by the Tranche 3 Asset identified on Schedule 2.2(d) as "Hillview," and shall

                                       29
<PAGE>

cause such drilling operations to be prosecuted with diligence until such well
shall have been drilled to a depth sufficient to test the Barnett Shale
formation as encountered in Denton County, Texas, or such other depth as Seller
and Buyer may agree. All operations in or with respect to such well shall be
conducted, and all costs and expenses incurred in connection with such well
shall be borne and paid, by Buyer and Seller in accordance with the terms of the
joint operating agreement executed by Seller and Buyer with respect to Hillview
as provided in Section 7.3(c). Amounts paid by Buyer in connection with such
well shall not be applied to reduce the Base Consideration. Buyer shall have no
obligation or Liability to Seller hereunder if Buyer fails to commence, or cause
to be commenced, the actual drilling of such well on or before December 1, 2006,
if such failure is the result of (a) force majeure (as defined in the applicable
joint operating agreement), (b) Buyer's inability to obtain, prior to such date,
necessary permits or governmental approvals, or (c) Buyer's inability, through
the use of reasonable commercial efforts and on commercially reasonable terms,
to obtain a drilling rig of sufficient capacity and capability to drill such
well. Otherwise, if Buyer fails to commence, or to cause to be commenced, the
actual drilling of such well in a timely manner as provided in this Section
5.11, then subject to the terms of Section 6.3, Seller's sole remedy shall be to
terminate this Agreement.

                                   ARTICLE VI.
                        CONDITIONS; TERMINATION; REMEDIES

      6.1 Conditions Precedent to Seller's Obligation to Close. All obligations
of Seller under this Agreement are subject, at Seller's option, to the
fulfillment, on or prior to the Closing Date for each Remaining Asset, of each
of the following conditions:

            (a) each and every representation and warranty of Buyer under this
Agreement shall be true and accurate in all material respects as of the date
when made and shall be deemed to be made again at and as of the relevant Closing
Date and shall then be true and accurate in all material respects; provided,
however, that for purposes of this Section 6.1(a), all qualifications relating
to materiality contained in such representations and warranties shall be
disregarded;

            (b) Buyer shall have performed and complied in all material respects
with each and every covenant, agreement, and condition required by this
Agreement to be performed or complied with, executed and delivered all documents
required to be executed and delivered, and otherwise taken all actions required
to be taken, in each case by Buyer on or prior to the relevant Closing Date;

            (c) no suit, action, or other proceeding shall be pending or
threatened before any court or arbitration tribunal or any Governmental
Authority seeking to enjoin, restrain, prohibit, or declare illegal, or seeking
substantial damages in connection with, the transactions contemplated in this
Agreement to be consummated at the relevant Closing;

            (d) Buyer shall have received all consents, authorizations, waivers,
and approvals required to be obtained prior to the relevant Closing by any court

                                       30
<PAGE>

or Governmental Authority under any applicable Law concerning the transactions
contemplated herein to be consummated at such Closing;

            (e) Buyer shall have delivered to Seller a certificate, dated and
effective as of the relevant Closing Date, executed by the president or an
authorized vice president of Buyer, certifying to Seller that on such Closing
Date, the representations and warranties of Buyer contained in this Agreement
are true and correct in all material respects (and in all respects, in the case
of representations and warranties qualified by materiality) and all covenants of
Buyer contained herein have been performed in all material respects; and

            (f) at the Final Closing only, Buyer shall have delivered to Seller
opinions, dated the relevant Closing Date, of Eaton & Van Winkle, LLP, and
Jackson Walker L.L.P., counsel for Buyer, that address the matters set forth in
the representations and warranties of Buyer appearing in Sections 3.2(a),
3.2(b), and 3.2(c)(i), and that is otherwise in form and substance satisfactory
to Seller.

      6.2 Conditions Precedent to Buyer's Obligation to Close. All obligations
of Buyer under this Agreement are subject, at Buyer's option, to the
fulfillment, on or prior to the Closing Date for each Remaining Asset, of each
of the following conditions:

            (a) each and every representation and warranty of Seller under this
Agreement shall be true and accurate in all material respects as of the date
when made and shall be deemed to be made again at and as of the relevant Closing
Date and shall then be true and accurate in all material respects; provided,
however, that for purposes of this Section 6.2(a), all qualifications relating
to materiality contained in such representations and warranties shall be
disregarded;

            (b) Seller shall have performed and complied in all material
respects with each and every covenant, agreement, and condition required by this
Agreement to be performed or complied with, executed and delivered all documents
required to be executed and delivered, and otherwise taken all actions required
to be taken, in each case by Seller on or prior to the relevant Closing Date;

            (c) no suit, action, or other proceeding shall be pending or
threatened before any court or arbitration tribunal or any Governmental
Authority seeking to restrain, prohibit, or declare illegal, or seeking
substantial damages in connection with, the transactions contemplated in this
Agreement to be consummated at the relevant Closing;

            (d) Seller shall have received all consents, authorizations,
waivers, and approvals required to be obtained prior to the relevant Closing by
any court or Governmental Authority under any applicable Law concerning the
transactions contemplated herein (including, without limitation, all consents
and authorizations, if any, from Governmental Authorities required to be
obtained prior to the relevant Closing with respect to the Transferable Permits
to be transferred at such Closing);

                                       31
<PAGE>

            (e) Seller shall have delivered to Buyer a certificate, dated and
effective as of the relevant Closing Date, executed by the president or an
authorized vice president of Seller, certifying to Buyer that, on such Closing
Date, the representations and warranties of Seller contained in this Agreement
are true and correct in all material respects (and in all respects, in the case
of representations and warranties qualified by materiality) and that all
covenants of Seller contained herein have been performed in all material
respects;

            (f) at the Final Closing only, Seller shall have delivered to Buyer
an opinion, dated the relevant Closing Date, of Haynes and Boone, LLP, counsel
for Seller, that addresses the matters set forth in the representations and
warranties of Seller appearing in Sections 3.1(a), 3.1(b), and 3.1(c)(i), and
that is otherwise in form and substance satisfactory to Buyer;

            (g) Buyer shall have obtained financing on terms reasonably
acceptable to Buyer in an amount sufficient to permit Buyer to consummate the
transactions contemplated herein;

            (h) with regard to all of the Tranche 3 Assets listed on Schedule
2.2(e), Seller shall have satisfied or cured in full all Defects asserted by
Buyer in a timely manner in accordance with Section 4.4(b); and

            (i) with respect to all of the Remaining Assets listed on Schedule
2.2(e), there shall exist no adverse Claim to title, lien, or other Defect
pertaining to such Remaining Assets that remains uncured or otherwise unresolved
as of the Closing Date for the Final Closing and that was asserted by a third
Person or otherwise came into existence after the date on which Buyer is
required to have asserted Defects with respect to such Remaining Assets under
Section 4.4(b).

      6.3 Termination.

            (a) This Agreement may be terminated, and the transactions
contemplated herein may be abandoned at any time prior to the Final Closing:

                  (i)   by Seller, at Seller's option, if the Final Closing does
                        not occur because (A) all of the conditions applicable
                        to Buyer set forth above in Section 6.1 were not
                        satisfied as provided therein or waived by Seller on or
                        before the Closing Date for the Final Closing, and (B)
                        Seller has satisfied all of the conditions applicable to
                        Seller set forth above in Section 6.2 on or before such
                        Closing Date;

                  (ii)  by Buyer, at Buyer's option, if the Final Closing does
                        not occur because (A) all of the conditions applicable
                        to Seller set forth above in Section 6.2 were not
                        satisfied as provided therein or waived by Buyer on or
                        before the Closing Date for the Final Closing, and (B)

                                       32
<PAGE>

                        Buyer has satisfied all of the conditions applicable to
                        Buyer set forth above in Section 6.1 on or before such
                        Closing Date;

                  (iii) by Buyer pursuant to Section 4.4(b); or

                  (iv)  by Seller pursuant to Section 5.11.

Notwithstanding any such termination of this Agreement, the terms of this
Section 6.3 and Sections 6.4, 8.4, 9.7, 10.2 and 10.11 shall survive such
termination and remain in full force and effect in accordance with their terms.

            (b) If this Agreement is terminated by Seller pursuant to Section
6.3(a)(i) or Section 5.11, or by Buyer pursuant to Section 4.4(b), Seller shall
have the option, exercisable by written notice given to Buyer within five (5)
Business Days after the termination of this Agreement, to cause Buyer to convey
to Seller, by form of Assignment, Bill of Sale, and Conveyance substantially in
the form of Exhibit F, all of the rights, titles, and interests in the Tranche 3
Asset described on Schedule 2.2(d) as the "Hillview" conveyed by Seller to Buyer
at the Closing occurring concurrently with the execution of this Agreement. The
failure of Seller to provide Buyer with notice of its exercise of such option
within such five-Business Day period will constitute an election by Seller not
to exercise such option. If Seller exercises such option in a timely manner as
provided in this Section 6.3(b): (i) Buyer shall execute and deliver to Seller
such conveyance within thirty (30) days after Buyer receives Seller's notice of
exercise; and (ii) if Buyer has drilled a well on the Hillview pursuant to
Section 5.11, then no later than thirty (30) days after Buyer's receipt of
Seller's notice of exercise, Seller shall pay to Buyer, by bank wire transfer of
immediately available U.S. funds, an amount equal to all costs and expenses paid
by Buyer in connection with the drilling, testing, and completion and equipping
for production or plugging and abandonment of such well pursuant to Section
5.11. Immediately following Buyer's receipt of Seller's notice of exercise,
Buyer shall relinquish operations on, and execute and deliver to Seller or its
designated operator Texas Railroad Commission Form P-4 for, the Hillview.

            (c) If this Agreement is terminated by either Seller or Buyer
pursuant to this Section 6.3, Buyer shall execute and deliver to Seller a
Surface Use Agreement, substantially in the form of Exhibit H, pursuant to which
Buyer grants to Seller, subject to and in accordance with the terms of such
Surface Use Agreement, the perpetual right to use the surface well pad sites
located on the Closed Assets listed in Schedule 2.2(c) as the Guyer #1 and Guyer
#2 in connection with drilling operations on the Tranche 2 Assets listed on
Schedule 2.2(e) as the New Guyer #3, #4, #5, and #6, as to which the Final
Closing failed to occur.

      6.4 Remedies. If this Agreement is terminated by Seller pursuant to
Section 6.3(a)(i) as the result of Buyer's failure, for any reason, to satisfy
the condition in Section 6.2(g) with respect to the Final Closing, or pursuant
to Section 6.3(a)(iv), Buyer shall have no further liability to Seller as the
result thereof. If this Agreement is terminated by Buyer pursuant to Section
6.3(a)(iii), Seller shall have no further liability to Buyer as the result
thereof. If this Agreement is terminated pursuant to either Section 6.3(a)(i) or

                                       33
<PAGE>

6.3(a)(ii) as the result of the existence of a suit, action, or other proceeding
of the type described in Sections 6.1(c) and 6.2(c), regardless of whether such
suit affects Seller or Buyer, neither Party shall have any liability to the
other as the result thereof, in the absence of a breach of or default under this
Agreement by the affected Party. Otherwise, if this Agreement is terminated
pursuant to either Section 6.3(a)(i) or 6.3(a)(ii), the Party terminating this
Agreement shall be entitled to no remedy other than the remedy of specific
performance. If a Party resorts to legal proceedings to enforce this Agreement
or any part thereof, the prevailing Party in such proceedings shall be entitled
to recover all costs incurred by such Party, including reasonable attorneys'
fees, in addition to any other relief to which such Party may be entitled.

                                  ARTICLE VII.
                                     CLOSING

      7.1 Closing. Each Closing shall be held at the offices of Jackson Walker
L.L.P., at 1401 McKinney, Suite 1900, Houston, Texas 77010, at 10:00 A.M.,
Central Time, or at such other place and time as the Parties may designate in
writing, on the relevant Closing Date.

      7.2 Preliminary Settlement Statement. Concurrently with the execution
hereof, Seller and Buyer have executed a preliminary settlement statement for
the sale of the Remaining Assets listed on Schedule 2.2(d), and no later than
three (3) Business Days prior to the Final Closing Date, Seller shall prepare
and submit to Buyer a preliminary settlement statement for the sale of the
Remaining Assets listed on Schedule 2.2(e) (in each case, a "Preliminary
Settlement Statement"), which sets forth Seller's estimate of the Adjusted
Consideration payable at the relevant Closing, reflecting the applicable Base
Consideration and each adjustment thereto made in accordance herewith, the
proration of any other amounts required herein, and in each case the method of
calculating the same, as of the date of preparation of such Preliminary
Settlement Statement and the designation of the account for Seller for wire
transfer purposes. If, for any reason, Buyer disputes any information contained
in the Preliminary Settlement Statement for the Final Closing, and Buyer and
Seller are unable to resolve such dispute prior to the Closing Date for the
Final Closing, the Parties shall submit the dispute to arbitration pursuant to
Section 10.11, and the Final Closing shall be deferred until three (3) Business
Days after the issuance of the decision of the arbitrators as to such dispute.

      7.3 Actions at Closing. At each Closing, Seller and Buyer shall take the
following actions:

            (a) Seller and Buyer shall each execute and deliver (i) the
Conveyance covering the Remaining Assets to be conveyed at such Closing, in
sufficient counterparts to facilitate recording in all relevant jurisdictions,
(ii) the Surface Use Agreement (at the Closing concurrent with the execution of
this Agreement), and (iii) the applicable Preliminary Settlement Statement.

            (b) at the Closing concurrent with the execution of this Agreement,
Seller, Seller's Predecessors, and Buyer each shall execute and deliver (i) such
documents as are necessary to terminate the Area of Mutual Interest Agreement
dated as of December 16, 2006, among Seller, Seller's Predecessors, and Buyer,

                                       34
<PAGE>

and the area of mutual interest created pursuant thereto, and (ii) the Restated
AMI Agreement.

            (c) If applicable, Seller, Buyer, and Buyer's Affiliate each shall
execute and deliver the joint operating agreement(s) referred to in Section
8.4(f) covering the Remaining Assets conveyed at such Closing.

            (d) Buyer shall deliver to Seller the estimated Adjusted
Consideration reflected in the applicable Preliminary Settlement Statement by
bank wire transfer of immediately available U.S. funds to the account(s) for
Seller designated in such Preliminary Settlement Statement.

            (e) Seller shall deliver to Buyer (i) releases of all Liens (if any)
encumbering the Remaining Assets conveyed at such Closing that do not constitute
Permitted Encumbrances, (ii) transfer orders or letters in lieu thereof, on
forms provided by Buyer, directing all purchasers of production to make payment
to Buyer of proceeds attributable to Hydrocarbons produced from such Remaining
Assets after the Effective Time, (iii) all consents, waivers, and other similar
matters pertaining to such Remaining Assets obtained by Seller prior to the
relevant Closing, (iv) counterparts of Railroad Commission of Texas Form P-4 for
each Well conveyed at such Closing as to which a change of operator will occur
at the Possession Time, and (v) all undisbursed revenues relating to the
Remaining Assets conveyed at such Closing that Seller is required to deliver to
Buyer under Section 8.3.

            (f) Seller shall deliver to Buyer the certificate provided for in
Section 6.2(e) and, at the Final Closing, the opinion of counsel provided for in
Section 6.2(f).

            (g) Buyer shall deliver to Seller the certificate provided for in
Section 6.1(e) and, at the Final Closing, the opinions of counsel provided for
in Section 6.1(f).

            (h) Seller shall deliver to Buyer a statement that satisfies the
requirements of Treas. Reg. ss.1.1445-2(b)(2), certifying that Seller is not a
"foreign" Person for federal income tax purposes.

            (i) Seller and Buyer shall execute such other documents and take
such other actions as are provided for elsewhere in this Agreement or as may be
necessary to consummate the transactions contemplated herein to be consummated
at such Closing.

      7.4 Records. At any time after each Closing, pursuant to Buyer's
reasonable instructions, Seller shall deliver to Buyer the Records relating to
the Remaining Assets conveyed at the relevant Closing. Buyer shall be entitled
to all original Records affecting all of such Remaining Assets. Prior to the
delivery thereof to Buyer, Seller may make and retain, at its expense, copies of
the Records for Seller's use in connection with the Retained Interests or
otherwise. Buyer agrees to maintain all original Records until the fifth (5th)
anniversary of the relevant Closing Date (or such longer period of time as
Seller may request for those Records relevant for tax audit purposes), or, if
any of such Records pertain to a Claim pending at such fifth anniversary date,

                                       35
<PAGE>

until such Claim is finally resolved and the time for all appeals has been
exhausted. Buyer will provide to Seller reasonable access to the Records for
purposes of obtaining information for the preparation of tax returns, financial
statements, and other legitimate business purposes of Seller.

                                  ARTICLE VIII.
                              POST CLOSING MATTERS

      8.1 Settlement Statement. On or before one hundred fifty (150) days after
each Closing Date, Buyer will prepare a final accounting statement, subject to
verification by Seller, which sets forth the final calculation and amount of the
Adjusted Consideration paid at the relevant Closing (including all adjustments
thereto) determined in accordance with Sections 2.4(b) and 2.4(c), the
calculations used to determine such amounts, and the actual proration of all
other amounts required by this Agreement (the "Final Settlement Statement"). No
later than fifteen (15) days after Seller's receipt of such a Final Settlement
Statement from Buyer (but no earlier than one hundred fifty (150) days after the
relevant Closing Date), Seller shall deliver to Buyer written notice setting
forth any changes to such Final Settlement Statement proposed by Seller. On or
before fifteen (15) days after Buyer's receipt of Seller's proposed changes to
such Final Settlement Statement, Buyer and Seller shall agree on such Final
Settlement Statement and, as the case may be, shall pay to the other such sums
as may be found to be due in the final accounting. All amounts paid pursuant to
this Section 8.1 shall be delivered by wire transfer of immediately available
U.S. funds to the account specified in writing by the relevant Party. If Buyer
and Seller are unable to agree on such Final Settlement Statement on or before
fifteen (15) days after Buyer's receipt of Seller's proposed changes thereto,
then Buyer and Seller shall submit all unresolved claims and amounts for
arbitration in accordance with the terms of Section 10.11.

      8.2 Further Cooperation. After each Closing Date, Buyer and Seller shall
execute and deliver, or shall cause to be executed and delivered from time to
time, such further instruments of conveyance and transfer, and shall take such
other actions as either Party may reasonably request, to convey and deliver to
Buyer the Remaining Assets conveyed at the relevant Closing, to perfect Buyer's
title thereto, and to accomplish the orderly transfer of such Remaining Assets
to Buyer in the manner contemplated by this Agreement. If, after any Closing
Date, either Party receives monies belonging to the other, such amounts shall be
promptly disbursed to the Party entitled to receive them. If an invoice or other
evidence of an obligation is received by a Party, which is either an obligation
assumed by the other Party or partially an obligation of both Seller and Buyer,
the Parties shall consult with each other, and an adjustment for such amount
will be made either on the relevant Final Settlement Statement, or, if the
evidence of the obligation is not received until after the completion of the
applicable final accounting pursuant to Section 8.1, in cash as the Parties may
agree. If Seller and Buyer are unable to agree on the disposition of such an
obligation, Seller and Buyer shall submit the matter to binding arbitration in
accordance with the terms of Section 10.11.

      8.3 Undisbursed Revenues. No later than each Closing Date, Seller shall
disburse, or cause its Affiliate to disburse, to Buyer all monies (if any)
relating to the Remaining Assets to be conveyed at the relevant Closing and the
associated Remaining Retained Interests that Seller or its Affiliate is
obligated to pay or disburse to other Persons (including amounts held in

                                       36
<PAGE>

suspense by Seller or its Affiliate) and that, as of such Closing Date, have not
been thus paid or disbursed. Buyer shall take and apply such funds in a manner
consistent with prudent oil and gas business practices to satisfy the Claims of
third Persons with respect to such monies. Seller shall cooperate with Buyer
following each Closing to assure the proper disbursement of any such funds.

      8.4 Retained Interests Options.

            (a) During the calendar year 2008 (the "Retained Interests Option
Period"), Seller shall have the right and option, at its sole election, to cause
Buyer to purchase from Seller, and Buyer shall have the right and option, at its
sole election, to cause Seller to sell to Buyer, the "Retained Interests"
reserved by Seller with respect to the Closed Assets under the terms of the
First Restated Purchase Agreement, as well as the Remaining Retained Interests
(collectively, the "Aggregate Retained Interests"), in all cases on the terms
set forth in this Section 8.4 (collectively, the "Retained Interests Options").
Such a sale or purchase, as applicable, shall be effective as of 7:00 a.m.,
Central Time, on January 1, 2008 (the "Retained Interests Option Effective
Time").

            (b) Either Party shall be entitled to exercise its respective
Retained Interests Option by delivering written notice of such exercise to the
other Party prior to the expiration of the Retained Interests Option Period. The
failure of a Party to provide to the other Party such written notice prior to
the expiration of the Retained Interests Option Period shall constitute an
election by the first Party not to exercise its Retained Interests Option. If a
Party exercises its Retained Interests Option in a timely manner as provided
herein, the conveyance of the Aggregate Retained Interests shall be accomplished
by the execution and delivery by Seller and Buyer of an Asset Purchase and Sale
Agreement in form and substance consistent with the terms of Section 8.4(d) (the
"Retained Interests Option Purchase Agreement") and an Assignment, Bill of Sale,
and Conveyance substantially in the form of Exhibit I (the "Retained Interests
Option Conveyance"), in sufficient numbers of counterparts to facilitate
recording in all relevant jurisdictions. In addition, Seller shall deliver to
Buyer each of the items referred to in clauses (i), (ii), and (iii) of Section
7.3(e) and the certificate referred to in Section 7.3(f), and Buyer shall
deliver to Seller the certificate referred to in Section 7.3(g), covering or
relating to, in each case, the Aggregate Retained Interests. For purposes
hereof, the date of execution of the Retained Interests Option Conveyance will
be referred to as the "Retained Interests Option Conveyance Date."

            (c) The base purchase price to be paid by Buyer to Seller upon the
exercise of either Retained Interests Option (the "Base Retained Interests
Option Consideration") shall be an amount equal to the product obtained by
multiplying (i) five percent (5%) by (ii) $1.35, by (iii) the total net gas
reserves characterized as "Proved" as of December 31 of the year preceding the
Retained Interests Option Effective Time, in thousand cubic feet, that are
allocable to the aggregate of the Closed Assets, the Remaining Assets, and the
Aggregate Retained Interests, as set forth in a reserve and economic evaluation
report to be prepared at Buyer's sole cost and expense by an independent
petroleum engineering firm selected by Buyer to support Buyer's audited
financial statements and SEC filings, such report to conform with the
Hydrocarbon reserve reporting requirements of the SEC under applicable
securities Laws. The Base Retained Interests Option Consideration shall be

                                       37
<PAGE>

subject to adjustment pursuant to Sections 2.4(b)(i), 2.4(b)(ii), 2.4(b)(iii),
2.4(b)(iv), and 2.4(b)(v), and Sections 2.4(c)(i) (with respect only to Defects
pertaining to the Aggregate Retained Interests), 2.4(c)(ii), 2.4(c)(iii),
2.4(c)(iv), 2.4(c)(v), and 2.4(c)(vii), modified to refer, in each case, to the
Aggregate Retained Interests, the Retained Interests Option Effective Time, and
the Retained Interests Option Conveyance Date in lieu of, respectively, the
Remaining Assets, the Effective Time, and the Possession Time. The Base Retained
Interests Option Consideration, as so adjusted, shall be referred to as the
"Adjusted Retained Interests Option Consideration".

            (d) The Retained Interests Option Purchase Agreement shall be
substantially in the form of this Agreement, modified to take into account the
difference in the interests being transferred, the Retained Interests Option
Effective Time and the Retained Interests Option Conveyance Date, and other
changed circumstances associated with the transfer of the Aggregate Retained
Interests. Notwithstanding the foregoing, the Retained Interests Option Purchase
Agreement shall provide for: (i) the payment of the Adjusted Retained Interests
Option Consideration in currency of the United States on the Retained Interests
Option Conveyance Date by bank wire transfer of immediately available funds to
the account designated by Seller to Buyer in writing; (ii) the determination of
the amount of the Adjusted Option Consideration in accordance with a procedure
substantially identical to that contained in Sections 7.2 and 8.1; (iii) the
assumption by Buyer of duties, obligations, and Liabilities with respect to the
Aggregate Retained Interests substantially identical to the Assumed Liabilities
as set forth in Section 2.5; (iv) the retention by Seller of duties,
obligations, and Liabilities with respect to the Aggregate Retained Interests
substantially identical to the Retained Liabilities as set forth in Section 2.6;
provided that the conveyance to Buyer of the Aggregate Retained Interests shall
not increase or otherwise affect the monetary thresholds contained in the
definition of "Retained Environmental Liabilities"; (v) the allocation by Seller
and Buyer of the Adjusted Retained Interests Option Consideration among the
Aggregate Retained Interests for financial accounting and tax purposes in
accordance with terms substantially identical to Section 2.8; (vi) the making of
the representations and warranties set forth in Section 3.1, insofar as such
representations and warranties relate or pertain to Seller, Seller's
Predecessors, and the Aggregate Retained Interests, and the representations and
warranties set forth in Section 3.2, in each case as of the Retained Interests
Option Conveyance Date; (vii) indemnities substantially identical to those
contained in Article IX, modified to address the transfer of the Aggregate
Retained Interests and the representations and warranties made in connection
therewith; provided that the time limitations applicable to the assertion of
Claims for indemnification in connection therewith shall begin to run on the
Retained Interests Option Conveyance Date in lieu of the Closing Date; and
(viii) the allocation of Transfer Taxes associated with the transfer of the
Aggregate Retained Interests and the proration of Property-Related Taxes
assessed with respect thereto in a manner substantially identical to that set
forth in Section 10.3.

            (e) During the period from each Closing Date through the earlier of
(i) the Retained Interests Option Conveyance Date or (ii) the expiration of the
Retained Interests Option Period, Seller agrees to perform and comply with the
covenants contained in Section 5.1 with respect to the Aggregate Retained
Interests.

                                       38
<PAGE>

            (f) To the extent that, on any Closing Date, any of the Remaining
Assets conveyed by Seller to Buyer on such Closing Date and the associated
Remaining Retained Interests are not subject a joint operating agreement,
Seller, Buyer, and Buyer's Affiliate (or Seller's Affiliate, if agreed to by the
Parties) shall execute and deliver at the relevant Closing one (1) or more joint
operating agreements in form and substance reasonably satisfactory to Seller and
Buyer that shall remain in effect with respect to such Remaining Assets and
Remaining Retained Interests unless and until Seller or Buyer exercises the
Retained Interests Option, in which event such joint operating agreement(s)
shall terminate and be of no further force or effect as to the Remaining Assets
and Remaining Retained Interests subject to such option.

      8.5 Additional Consideration for Tranche 3 Assets. Seller and Buyer
acknowledge that, under the terms of the Leases comprising the Tranche 3 Assets,
the lessors have the right and option, at the times and in the manner provided
therein, to acquire interests in the leasehold estate created by such Leases. In
this regard:

            (a) With respect to the Tranche 3 Asset identified on Schedule
2.2(d) as "Hillview", if the lessors under the relevant Leases elect not to
acquire the referenced interest in the leasehold estates created by such Leases
upon the drilling of the first well from one of the four (4) surface well pad
sites constructed on such Leases, Buyer shall pay to Seller the amount set forth
for such surface well pad site on Schedule 8.5(a).

            (b) Seller and Buyer acknowledge that the current surface well pad
sites serving the Tranche 3 Assets other than Hillview are located on the
Tranche 3 Assets (other than Hillview) listed on Schedule 2.2(d). To the extent
that additional surface well pad sites are constructed on the Tranche 3 Assets
(other than Hillview), if the lessors under the relevant Leases elect not to
acquire the referenced interest in the leasehold estates created by such Leases
upon the drilling of the first well from such a surface well pad site, Buyer
shall pay to Seller the amount determined in accordance with Schedule 8.5(b).

            (c) If the lessors under the Leases comprising the Tranche 3 Assets
elect to acquire the referenced interest in the leasehold estates created by
such Leases in connection with the first well drilled from such a surface well
pad site, no payments shall be due from Buyer to Seller under this Section 8.5
in connection with such surface well pad site.

            (d) All amounts payable by Buyer to Seller pursuant to this Section
8.5 shall be by bank wire transfer of immediately available U.S. funds no later
than thirty (30) days after Buyer receives notice that such a payment has become
due under Section 8.5(a) or Section 8.5(b).

                                   ARTICLE IX.
                            SURVIVAL; INDEMNIFICATION

      9.1 Survival. All representations, warranties, covenants, agreements, and
indemnities of Buyer and Seller under this Agreement shall survive each Closing
and the delivery of each Conveyance, shall not be merged with or into any
Conveyance, and shall remain in force and effect as provided in this Section

                                       39
<PAGE>

9.1, as applicable, regardless of any investigation at any time made by or on
behalf of Buyer or Seller, or of any information that Buyer or Seller may have
with respect thereto. Such survival does not obligate any Party to make any
further representation or warranty after the final Closing Date established
pursuant to Section 2.2, or to cause any representation or warranty made
hereunder to remain true and correct after such final Closing Date.

      9.2 Indemnity as Sole Remedy. Except to the extent otherwise provided in
Section 6.4, the indemnity provided by each Party to the other under this
Article IX shall constitute the sole and exclusive remedy for such Party and its
Indemnity Group after each Closing with respect to (a) the inaccuracy or breach
of any representation or warranty made by the other Party hereunder in
connection with the relevant Closing and (b) a breach or default in the
performance by such other Party of any covenant or agreement of such other Party
contained in this Agreement and made in connection with such Closing. Except as
otherwise provided in Section 6.4 and this Article IX, each Party hereby waives
any Claim arising under common law, any statute, or otherwise against the other
Party arising from or out of the inaccuracy or breach of any representation or
warranty made by the other Party hereunder or the breach or default in the
performance by such other Party of any covenant or agreement of such other Party
contained in this Agreement.

      9.3 Indemnities of Buyer. Regardless of any investigation made at any time
by or on behalf of any Party or any information any Party may have, and
regardless of the presence or absence of insurance, Buyer shall indemnify and
hold harmless Seller and its Indemnity Group from and against any and all Claims
and Liabilities caused by, arising out of, resulting from, or relating in any
way to, and to pay to Seller or its Indemnity Group any sum that Seller or its
Indemnity Group pays, or becomes obligated to pay, on account of: (a) any breach
or default in the performance by Buyer of any covenant or agreement of Buyer
contained in this Agreement or any document executed in connection herewith; (b)
any breach of a warranty or an inaccurate or erroneous representation made by
Buyer in this Agreement (provided, however, that for purposes of this Section
9.3, all qualifications relating to materiality contained in such
representations and warranties shall be disregarded); and (c) all Assumed
Liabilities.

      9.4 Indemnities of Seller. Regardless of any investigation made at any
time by or on behalf of any Party or any information any Party may have, and
regardless of the presence or absence of insurance, Seller shall indemnify and
hold harmless Buyer and its Indemnity Group from and against any and all Claims
and Liabilities caused by, arising out of, resulting from, or relating in any
way to, and to pay Buyer or its Indemnity Group any sum that Buyer or its
Indemnity Group pays or becomes obligated to pay, on account of: (a) any breach
or default in the performance by any Seller of any covenant or agreement of
Seller contained in this Agreement or any document executed in connection
herewith; (b) any breach of a warranty or an inaccurate or erroneous
representation made by any Seller in this Agreement (provided, however, that for
purposes of this Section 9.4, all qualifications relating to materiality
contained in such representations and warranties shall be disregarded); and (c)
all Retained Liabilities.

                                       40
<PAGE>

      9.5 Limitations on Indemnities.

            (a) Except as provided hereinafter, after the Closing Date, neither
Buyer nor Seller shall be entitled to seek indemnification from the other Party
with respect to the inaccuracy or breach of any representation or warranty made
by such Party hereunder unless the Party seeking indemnification gives written
notice of the alleged breach or inaccuracy to the Party against whom enforcement
is sought no later than the expiration of twelve (12) months after the Closing
Date. In addition, if there occurs a breach or inaccuracy in Section 3.1(d)(iii)
or Section 3.1(e), insofar only as such representation and warranty relates to
environmental matters, such breach or inaccuracy shall constitute an
Environmental Condition, and Seller's indemnity obligation with respect thereto
shall be limited as provided in the definition of Retained Environmental
Liabilities in Schedule 1.1.

            (b) After the Closing Date, neither Buyer nor Seller shall be
entitled to seek indemnification from the other Party with respect to a breach
or default in the performance by such Party of any covenant or agreement of that
Party contained in this Agreement (including, without limitation, the provisions
of Section 10.3, relating to taxes) unless the Party seeking indemnification
gives written notice of the alleged breach or default to the Party from whom
indemnification is sought on or before the one hundred eightieth (180th) day
after the expiration of the statute of limitations applicable to the relevant
breach or default.

            (c) After the Closing Date, except as otherwise provided in the
definition of Retained Environmental Liabilities in Schedule 1.1, no Claim
subject to indemnification under Section 9.3(c), Section 9.4(c), or Section
9.4(d) may be indemnified under this Agreement unless the Party requesting
indemnification gives notice to the Party from whom indemnification is sought of
the Claim for which indemnification is sought on or before the one hundred
eightieth (180th) day after the expiration of the statute of limitations
applicable to such Claim.

      9.6 Assertion of Claims; Notices; Defense; Settlement.

            (a) Upon the discovery by a Party entitled to indemnification under
any provision of this Agreement (the "Indemnified Party") of facts believed to
entitle such Party to indemnification hereunder, including the receipt by any
such Party of notice of a Claim from any third Person, the Indemnified Party
shall give prompt written notice of any such Claim to the Party obligated to
provide the requested indemnification (the "Indemnifying Party"). Each such
notice shall set forth the facts known to the Indemnified Party pertaining to
the relevant Claim and shall specify the manner in which the Indemnified Party
proposes to respond to such Claim.

            (b) Within ten (10) days after the receipt by the Indemnifying Party
of such notice, the Indemnifying Party shall state in writing to the Indemnified
Party: (i) whether the Indemnified Party may proceed to respond to the Claim in
the manner set forth in its notice, or (ii) whether the Indemnifying Party shall
assume responsibility for and conduct the negotiation, defense, or settlement of
the Claim, and if so, the specific manner in which the Indemnifying Party
proposes to proceed. If the Indemnifying Party assumes control of the Claim, the
Indemnified Party shall at all times have the right to participate in the

                                       41
<PAGE>

defense thereof and to be represented, at its sole expense, by counsel selected
by it. No such Claim shall be compromised or settled by either the Indemnifying
Party or the Indemnified Party, as applicable, in any manner that admits
liability on the part of the other Party or that might otherwise adversely
affect the interest of such other Party without the prior written consent of
such other Party, which consent will not be unreasonably withheld or delayed. As
a condition precedent to indemnification under this Agreement, the Indemnified
Party shall assign to the Indemnifying Party, and the Indemnifying Party shall
become subrogated to, all rights and Claims, up to the amount of
indemnification, of the Indemnified Party against third Persons arising out of
or pertaining to the matters for which the Indemnifying Party shall provide
indemnification. The amount of the Indemnified Party's Claim for indemnification
shall be reduced by the amount of any insurance reimbursement paid to the
Indemnified Party pertaining to the Claim.

      9.7 Limitation on Damages. For the breach or non-performance by any Party
of any representation, warranty, covenant, or agreement contained in this
Agreement, the liability of the obligor shall be limited to direct actual
damages only, except to the extent that the obligee is entitled to specific
performance or injunctive relief. AS BETWEEN THE PARTIES, NOTWITHSTANDING
ANYTHING TO THE CONTRARY IN THIS AGREEMENT, NEITHER SELLER NOR BUYER SHALL BE
LIABLE TO THE OTHER PARTY AS THE RESULT OF A BREACH OR A VIOLATION OF ANY
REPRESENTATION, WARRANTY, COVENANT, AGREEMENT, OR CONDITION CONTAINED IN THIS
AGREEMENT FOR SPECIAL, CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY, OR
INDIRECT DAMAGES, LOST PROFITS, OR OTHER BUSINESS INTERRUPTION DAMAGES, IN TORT,
IN CONTRACT, UNDER ANY INDEMNITY PROVISION, ARISING BY OPERATION OF LAW
(INCLUDING, WITHOUT LIMITATION, STRICT LIABILITY), OR OTHERWISE. WITH RESPECT TO
CLAIMS BY THIRD PERSONS, A PARTY MAY RECOVER FROM THE OTHER PARTY ALL COSTS,
EXPENSES, OR DAMAGES (INCLUDING, WITHOUT LIMITATION, SPECIAL, CONSEQUENTIAL,
INCIDENTAL, PUNITIVE, EXEMPLARY, OR INDIRECT DAMAGES), LOST PROFITS, AND OTHER
BUSINESS INTERRUPTION DAMAGES IN ADDITION TO ACTUAL DIRECT DAMAGES PAID OR OWED
TO ANY SUCH THIRD PERSON IN SETTLEMENT OR SATISFACTION OF CLAIMS AS TO WHICH THE
RELEVANT PARTY IS ENTITLED TO INDEMNIFICATION HEREUNDER.

                                   ARTICLE X.
                                  MISCELLANEOUS

      10.1 Exhibits. All exhibits and schedules referred to in this Agreement
are hereby incorporated into this Agreement by reference and constitute a part
of this Agreement for all purposes. Each Party and its counsel has received a
complete set of exhibits and schedules prior to and as of the date of execution
of this Agreement.

      10.2 Expenses. Except as otherwise specifically provided herein, all fees,
costs, and expenses incurred by Buyer and Seller in negotiating this Agreement
and in consummating the transactions contemplated by this Agreement shall be

                                       42
<PAGE>

paid by the Party incurring the same, including, without limitation, legal and
accounting fees, costs, and expenses. All required documentary, filing, and
recording fees and expenses in connection with the filing and recording of the
Conveyances and other instruments required to convey title to the Assets to
Buyer shall be borne by Buyer.

      10.3 Proration of Taxes. Each Party shall assume responsibility for, and
shall bear and pay, all federal income taxes, state income taxes, franchise
taxes, and other similar taxes (including any applicable interest or penalties)
incurred by or imposed upon such Party with respect to the transactions
described in this Agreement. Seller shall assume responsibility for, and shall
bear and pay, all Transfer Taxes incurred or imposed with respect to the
transfer of the Assets. Seller shall assume responsibility for, and shall bear
and pay, all Property-Related Taxes (including any applicable penalties and
interest) based upon or measured by the ownership of the Remaining Assets or the
receipt of proceeds therefrom, but exclusive of income taxes, and assessed
against the Remaining Assets by any taxing authority for the period prior to the
Effective Time. Buyer shall be responsible for, and shall bear and pay, all such
Property-Related Taxes assessed against the Remaining Assets by any taxing
authority for any period that begins on or after the Effective Time. For
purposes of this Agreement, the foregoing prorations of Property-Related Taxes
shall be accomplished as an adjustment to the Base Consideration and, in the
case of ad valorem and other property taxes, shall be based upon the ad valorem
and other property taxes actually assessed against the Remaining Assets for
2006, or, in the absence of such assessments, the ad valorem and other property
taxes actually assessed against the Remaining Assets for 2005. In the event of a
conflict between the terms of this Section 10.3 and any other provision of this
Agreement, the terms of this Section 10.3 shall govern and control.

      10.4 Assignment. Neither Seller nor Buyer shall assign this Agreement,
except to an Affiliate of the assigning Party by assignment, transfer of equity,
merger, reorganization, or consolidation, without the prior written consent of
the non-assigning Party, which shall not be unreasonably withheld or delayed.
Any such assignment of rights shall provide for the assumption by the transferee
of the obligations of the assigning Party under this Agreement. No assignment of
any rights hereunder shall relieve the assigning Party of any obligations or
responsibilities hereunder. Upon the assumption by such a transferee of the
obligations of the assigning Party under this Agreement, such transferee shall
become primarily liable for all such obligations assumed. Notwithstanding any
such assumption, however, if such a transferee fails to perform any of the
obligations thus assumed, the assigning Party shall remain liable for the
performance thereof. Subject to the foregoing, this Agreement shall be binding
upon and inure to the benefit of the Parties and their respective successors and
assigns.

      10.5 Notices. All notices and communications required or permitted to be
given hereunder shall be in writing and shall be delivered personally, or sent
by bonded overnight courier, or by telex or facsimile transmission (provided any
such telegram, telex, or facsimile transmission is confirmed either orally or by
written confirmation), addressed to the appropriate Party at the address for
such Party shown below or at such other address as such Party shall have
theretofore designated by written notice delivered to the Party giving such
notice:

                                       43
<PAGE>

If to Buyer:                                      If to Seller:
------------                                      -------------
Dune Energy, Inc.                                 Voyager Partners, Ltd.
3050 Post Oak Boulevard                           The Mondrian
Suite 695                                         3300 Blackburn St., Suite 2104
Houston, Texas 77056                              Dallas, Texas 75204
Attention: Dr. Amiel David                        Attention: Michael Ronca
Telephone No.: (713) 888-0895                     Telephone No.: (214) 559-2990
Facsimile No.: (713) 888-0899                     Facsimile No.: (214) 559-2990

Any notice given in accordance herewith shall be deemed to have been given on
the Business Day when delivered to the addressee in person or by telex,
facsimile, or bonded overnight courier; provided, however, that if any such
notice is received after normal business hours, the notice will be deemed to
have been given on the next succeeding Business Day. Any Party may change the
address, telephone number, and facsimile number to which such communications to
such Party are to be addressed by giving written notice to the other Party in
the manner provided in this Section 10.5.

      10.6 ENTIRE AGREEMENT; CONFLICTS. THIS AGREEMENT, THE EXHIBITS HERETO, THE
CONVEYANCES, THE RESTATED AMI AGREEMENT, THE TRANSITIONAL MATTERS AGREEMENT, AND
ANY OTHER DOCUMENTS EXECUTED BY THE PARTIES CONTEMPORANEOUSLY HEREWITH OR AT ANY
CLOSING CONSTITUTE THE ENTIRE AGREEMENT AMONG THE PARTIES PERTAINING TO THE
SUBJECT MATTER HEREOF AND SUPERSEDE ALL PRIOR AGREEMENTS, UNDERSTANDINGS,
NEGOTIATIONS, AND DISCUSSIONS, WHETHER ORAL OR WRITTEN, OF THE PARTIES
PERTAINING TO THE SUBJECT MATTER HEREOF. THERE ARE NO WARRANTIES,
REPRESENTATIONS, OR OTHER AGREEMENTS BETWEEN THE PARTIES RELATING TO THE SUBJECT
MATTER THEREOF EXCEPT AS SPECIFICALLY SET FORTH HEREIN OR IN THE CONVEYANCES,
THE RESTATED AMI AGREEMENT, THE TRANSITIONAL MATTERS AGREEMENT, ANY SUCH
CONTEMPORANEOUS AGREEMENTS, OR ANY SUCH CLOSING DOCUMENTS, AND NEITHER BUYER NOR
SELLER SHALL BE BOUND BY OR LIABLE FOR ANY ALLEGED REPRESENTATION, PROMISE,
INDUCEMENT, OR STATEMENT OF INTENTION NOT SO SET FORTH. IN THE EVENT OF A
CONFLICT BETWEEN THE TERMS OF THIS AGREEMENT AND THE TERMS OF THE CONVEYANCES,
THE RESTATED AMI AGREEMENT, OR THE TRANSITIONAL MATTERS AGREEMENT, THE TERMS OF
THIS AGREEMENT SHALL GOVERN AND CONTROL; PROVIDED, HOWEVER, THAT THE INCLUSION
IN THE CONVEYANCES, THE RESTATED AMI AGREEMENT, AND THE TRANSITIONAL MATTERS
AGREEMENT OF TERMS NOT ADDRESSED IN THIS AGREEMENT SHALL NOT BE DEEMED A
CONFLICT, AND ALL SUCH ADDITIONAL TERMS SHALL BE GIVEN FULL FORCE AND EFFECT,
SUBJECT TO THE TERMS OF THIS SECTION 10.6.

      10.7 Amendment. This Agreement may be amended only by an instrument in
writing executed by the Parties.

                                       44
<PAGE>

      10.8 Waiver; Rights Cumulative. Any of the terms, covenants,
representations, warranties, or conditions hereof may be waived only by a
written instrument executed by or on behalf of the Party waiving compliance. No
course of dealing on the part of Buyer or Seller, or their respective officers,
employees, agents, or representatives, or any failure by Buyer or Seller to
exercise any of its rights under this Agreement, shall operate as a waiver
thereof or affect in any way the right of such Party at a later time to enforce
the performance of such provision. No waiver by any Party of any condition, or
any breach of any term, covenant, representation, or warranty contained in this
Agreement, in any one or more instances, shall be deemed to be or construed as a
further or continuing waiver of any such condition or breach or a waiver of any
other condition or of any breach of any other term, covenant, representation, or
warranty. The rights of Buyer and Seller under this Agreement shall be
cumulative, and the exercise or partial exercise of any such right shall not
preclude the exercise of any other right.

      10.9 GOVERNING LAW; CONSENT TO JURISDICTION. THIS AGREEMENT AND THE LEGAL
RELATIONS AMONG THE PARTIES SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF TEXAS, EXCLUDING ANY CONFLICTS OF LAW RULE OR PRINCIPLE
THAT MIGHT REFER CONSTRUCTION OF SUCH PROVISIONS TO THE LAWS OF ANOTHER
JURISDICTION. ALL OF THE PARTIES CONSENT TO THE EXERCISE OF JURISDICTION IN
PERSONAM BY THE COURTS OF THE STATE OF TEXAS FOR ANY ACTION ARISING OUT OF THIS
AGREEMENT. ALL ACTIONS OR PROCEEDINGS WITH RESPECT TO, ARISING DIRECTLY OR
INDIRECTLY IN CONNECTION WITH, OUT OF, RELATED TO, OR FROM THIS AGREEMENT SHALL
BE LITIGATED IN COURTS HAVING SITUS IN HOUSTON, HARRIS COUNTY, TEXAS.

      10.10 Severability. If any term or other provision of this Agreement is
invalid, illegal, or incapable of being enforced by any rule of Law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any adverse manner to
any Party. Upon such determination that any term or other provision is invalid,
illegal, or incapable of being enforced, the Parties shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the
Parties as closely as possible in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.

      10.11 Arbitration.

            (a) Any disagreement, difference, or dispute among the Parties
provided in this Agreement to be resolved by arbitration shall be resolved
pursuant to arbitration according to the procedures set forth in this Section
10.11. Either Party may commence an arbitration proceeding hereunder by giving
written notice to the other Party. No later than five (5) Business Days after
the delivery of the notice commencing the arbitration proceeding, Seller and
Buyer shall each select an arbitrator. Promptly following their selection, the
arbitrators selected by Seller and Buyer jointly shall select a third
arbitrator. All arbitrators selected under this Agreement shall have at least

                                       45
<PAGE>

eight (8) years of professional experience in the oil, gas, or accounting
industries, as applicable, and shall not previously have been employed by either
Party and shall not have a direct or indirect interest in either Party or the
subject matter of the arbitration. The arbitration hearing shall commence as
soon as is practical, but in no event later than thirty (30) days after the
selection of the third arbitrator. If any arbitrator selected under this Section
10.11(a) should die, resign, or otherwise be unable to perform his duties
hereunder, a successor arbitrator shall be selected pursuant to the procedures
set forth in this Section 10.11(a).

            (b) The arbitrators shall settle all disputes in accordance with the
Federal Arbitration Act and the Commercial Arbitration Rules of the American
Arbitration Association, to the extent that such Rules do not conflict with the
terms of such Act or the terms of this Agreement. Any arbitration hearing shall
be held in Houston, Harris County, Texas. The decision of the arbitrators shall
be final and binding on the Parties and, if necessary, may be enforced in any
court of competent jurisdiction. The Law governing all such disputes shall be
the Laws of the State of Texas, including, without limitation, the Uniform
Commercial Code as in effect in the State of Texas, as the same may be amended
from time to time, but without regard to conflicts of laws principles. The fees
and expenses of the arbitrators shall be shared one-half by Seller and one-half
by Buyer. Any payment to be made as the result of any dispute resolved by
arbitration hereunder shall be accomplished pursuant to the Final Settlement
Statement, with the final payments due thereunder being deferred until the
arbitrators have rendered their decisions on all matters to be resolved by
arbitration hereunder.

      10.12 Restated Purchase Agreements. This Agreement amends and supersedes
the First Restated Purchase Agreement with respect to the Remaining Assets and
the terms relating to the Retained Interests Options, effective as of the date
of execution hereof. As a result, all rights, interests, obligations, Claims,
and Liabilities of either Party against the other related to the transactions
contemplated herein that arise out of facts and circumstances (a) that relate in
any way to the Closed Assets (other than the Retained Interests Options as they
pertain thereto), regardless of when such facts or circumstances occur or arise,
shall continue to be governed by the First Restated Purchase Agreement, and (b)
that relate in any way to the Remaining Assets and the Retained Interests
Options, regardless of when such facts and circumstances occur or arise, shall
be governed by this Agreement.

      10.13 Recording Memorandum. To place third Persons on notice of the
existence of the rights of the Parties hereunder with respect to the Remaining
Assets, Seller and Buyer shall execute and file for record in the counties where
the Remaining Assets are located a memorandum of this Agreement in form and
substance reasonably acceptable to Seller and Buyer.

      10.14 Counterparts. This Agreement may be executed in any number of
counterparts, and each such counterpart hereof shall be deemed to be an original
instrument, but all of such counterparts shall constitute for all purposes one
agreement. This Agreement may be executed by the Parties in different locations
and shall become binding upon both Parties upon the exchange by the Parties of
executed signature pages by facsimile; provided, however, that no later than

                                       46
<PAGE>

five (5) Business Days after such execution hereof by facsimile, the Parties
shall have executed and delivered each to the other a fully executed original
counterpart of this Agreement.

                                       47
<PAGE>

            IN WITNESS WHEREOF, Seller and Buyer have executed this Agreement on
the date first above written.

                                                     SELLER:

                                                     VOYAGER PARTNERS, LTD.

                                                     By: Trek Management, LLC,
                                                         its General Partner

                                                         By: /s/ Michael Ronca
                                                             -------------------
                                                             Michael Ronca
                                                             Manager

<PAGE>

SIGNATURE PAGE FOR DUNE ENERGY, INC., TO SECOND AMENDED AND RESTATED ASSET
PURCHASE AND SALE AGREEMENT DATED AS OF OCTOBER 6, 2006, BETWEEN VOYAGER
PARTNERS, LTD., AS SELLER, AND DUNE ENERGY, INC., AS BUYER

                                                     BUYER:

                                                     DUNE ENERGY, INC.

                                                     By: /s/ Amiel David
                                                         -----------------------
                                                         Dr. Amiel David
                                                         President

<PAGE>

                                  SCHEDULE 1.1

                                  DEFINED TERMS

      The following terms and expressions shall have the meanings set forth in
the indicated provisions of this Agreement: "Adjusted Consideration", Section
2.4(d); "Adjusted Retained Interests Option Consideration," Section 8.4(c);
"Aggregate Retained Interests", Section 8.4(a); "Assets", Preambles; "Assumed
Liabilities", Section 2.5; "Base Consideration", Section 2.4(a); "Base Retained
Interests Option Consideration," Section 8.4(c); Excluded Assets", Section 2.3;
"Final Closing", Section 2.2(e); "Final Settlement Statement", Section 8.1;
"First Restated Purchase Agreement", Preambles; "Hess PSA Assignment", Section
2.2(a); "Hydrocarbons", Section 2.1(c); "Indemnified Party" and "Indemnifying
Party", Section 9.6(a); "Intangible Rights", Section 2.1(i); "Leases", Section
2.1(a); "Original Amended Purchase Agreement", Preambles; "Personal Property",
Section 2.1(e); "Preliminary Settlement Statement", Section 7.2; "Real Property
Interests", Section 2.1(d); "Records", Section 2.1(j); "Remaining Assets",
Section 2.1; "Remaining Retained Interests", Section 2.3(a); "Retained Interests
Options", "Retained Interests Option Effective Time", and "Retained Interests
Option Period", Section 8.4(a); "Retained Interests Option Conveyance",
"Retained Interests Option Conveyance Date", and "Retained Interests Option
Purchase Agreement", Section 8.4(b); "Retained Liabilities", Section 2.4;
"Tranche 1 Assets," "Tranche 2 Assets," and "Tranche 3 Assets," Section 2.2;
"Transferred Contracts", Section 2.1(g); and "Wells", Section 2.1(b).

      In addition, the following terms and expressions shall have the meanings
set forth hereinafter:

      "Affiliate" means, with respect to a Party, any Person that directly or
indirectly controls, is controlled by, or is under common control with, the
relevant Party. For purposes of this definition, 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 ownership
of voting securities, contract, voting trust, membership in management or in the
group appointing or electing management, or otherwise through formal or informal
arrangements or business relationships.

      "Allocated Value" means, with respect to each Lease, Well, Real Property
Interest, item of Personal Property, and other Remaining Asset to which value is
allocated herein, the amount set forth on Exhibit B under the column styled
"Allocated Value" for such Lease, Well, Real Property Interest, item of Personal
Property, or other Remaining Asset. For purpose of this Agreement, Seller and
Buyer agree and stipulate that the Allocated Values set forth in Exhibit B have
been established solely for use in calculating adjustments to the Base
Consideration as provided herein, and not for purposes of federal or state
income taxation, such Allocated Values being solely for the convenience of the
Parties.

      "Assumed Environmental Liabilities" means, collectively, ALL CLAIMS AND
LIABILITIES (INCLUDING, WITHOUT LIMITATION, ANY CLAIMS AND LIABILITIES RELATING
TO ENVIRONMENTAL CONDITIONS THAT BECOME "ASSUMED ENVIRONMENTAL LIABILITIES" BY
OPERATION OF SECTION 4.3(c), BUT EXCLUDING THE RETAINED ENVIRONMENTAL
LIABILITIES) ARISING OUT OF, RESULTING FROM, OR RELATING IN ANY WAY TO THE
EXISTENCE OF AN ENVIRONMENTAL CONDITION ON OR RELATING TO ONE OR MORE REMAINING
ASSETS CONVEYED BY SELLER TO BUYER PURSUANT HERETO (INCLUDING, WITHOUT
LIMITATION, CLAIMS AND LIABILITIES FOR INJURY TO OR DEATH OF ANY PERSON,

                            Schedule 2.2(e) - Page 1
<PAGE>

PERSONS, OR OTHER LIVING THINGS, OR LOSS OR DESTRUCTION OF OR DAMAGE TO PROPERTY
OCCURRING AS THE RESULT THEREOF), REGARDLESS OF WHETHER SUCH ENVIRONMENTAL
CONDITION IS KNOWN, ANTICIPATED, OR SUSPECTED AS OF THE POSSESSION TIME FOR THE
RELEVANT REMAINING ASSET, OR RESULTS, IN WHOLE OR IN PART, FROM THE NEGLIGENCE
OR STRICT LIABILITY OF SELLER OR ITS AFFILIATES, EMPLOYEES, AGENTS, OR
REPRESENTATIVES, AND REGARDLESS OF WHETHER SUCH ENVIRONMENTAL CONDITION, OR THE
ACTS, OMISSIONS, EVENTS, OR CONDITIONS GIVING RISE THERETO AROSE, OCCURRED, OR
EXISTED BEFORE, AT, OR AFTER THE POSSESSION TIME FOR THE RELEVANT REMAINING
ASSET.

      "Business Day" means any day other than a Saturday, Sunday, or other day
on which commercial banks in Houston, Texas, are required or authorized by Law
to be closed.

      "Casualty Event" means (a) any fire, explosion, accident, earthquake, act
of the public enemy, act of God, or other similar event or occurrence that
results in damage to or the destruction of any Remaining Asset, and (b) any
taking of any Remaining Asset by condemnation or under the right of eminent
domain.

      "Central Time" means Central Standard Time or Central Daylight Savings
Time, as in effect in Houston, Texas, on the date in question.

      "Claims", for purposes of this Agreement, means any and all claims,
demands, Liens, notices of non-compliance or violation, notices of liability or
potential liability, investigations, actions (whether judicial, administrative,
or arbitrational), causes of action, suits, and controversies.

      "Closing" means, for each Remaining Asset conveyed by Seller to Buyer
pursuant hereto, the consummation of the transactions contemplated in this
Agreement, with respect to such Asset.

      "Closing Date" means, for each Remaining Asset conveyed by Seller to Buyer
pursuant thereto, the date on which the Closing occurs with respect to such
Asset, determined in accordance with Section 2.2.

      "Code" means the United States Internal Revenue Code of 1986, as amended.

      "Contracts" means all seismic or other exploration agreements; farm-in,
farm-out, and participation agreements; dry hole, acreage contribution, and
bottom hole agreements; partnership, joint venture, and similar agreements;
Hydrocarbon purchase, sale, exchange, gathering, storage, transportation, and
marketing agreements; acquisition agreements; operating agreements; area of
interest agreements; balancing agreements; pooling, communization, and
unitization agreements; processing, fractionation, condensate removal and
handling, dehydration, treatment, and separation agreements; saltwater, water,
and waste injection and disposal agreements; options; service agreements;
communications, facilities, and equipment leases and licenses, to the extent
transferable; and other contracts, agreements, and rights owned by Seller, in
whole or in part, or to which any Seller is a party, to the extent that they are

                            Schedule 2.2(e) - Page 2
<PAGE>

(i) appurtenant to or affect the properties and rights comprising the Remaining
Assets, or (ii) used or held for use in connection with the use, ownership, or
operation thereof, all as described more particularly on Exhibit D.

      "Conveyance" means the Assignment, Bill of Sale, and Conveyance
substantially in the form attached hereto as Exhibit F.

      "Defect" means any Lien, charge, contract, agreement, obligation, or
defect of title, other than a Permitted Encumbrance, that causes, or could
reasonably be expected to cause: (a) a loss of title, in whole or in part, by
Seller with respect to a Remaining Asset; (b) the title to a Remaining Asset not
to be good, valid, and indefeasible; (c) a Remaining Asset to be subject to a
Lien other than a Permitted Encumbrance; (d) in the case of a Lease or Well, and
without limiting clauses (a), (b), and (c) of this definition, (i) Seller to
receive a percentage of all Hydrocarbons produced, saved, and marketed from or
allocable to such Lease or Well that is less than the Net Revenue Interest set
forth in Exhibit B for such Lease or Well, without reduction, suspension, or
termination for the productive life of such Lease or Well, or (ii) Seller to be
obligated to bear a percentage of the costs and expenses of operations on and
the maintenance and development of such Lease or Well that is greater than the
Working Interest set forth for such Lease or Well on Exhibit B without increase
for the productive life of such Lease or Well, unless such greater Working
Interest yields a correspondingly greater Net Revenue Interest; or (e) Seller's
interests in any Remaining Asset otherwise to be extinguished or the operation,
use, possession, ownership, or value of Seller's interest in any Remaining Asset
to be materially affected or interfered with, except for Permitted Encumbrances.
The term "Defect" shall include (x) a preferential right to purchase, right of
first refusal, right of first offer, or similar right affecting any Remaining
Asset (including, without limitation, any Contract) that is exercised prior to
the applicable Closing, (y) a third Person consent to assignment required before
a Remaining Asset may be assigned and that is not obtained prior to the
applicable Closing, and (z) the failure of the Leases included in a "Prospect"
identified on Exhibit B to cover, in the aggregate, sufficient acreage to
provide a legal location, under applicable rules and regulations of the Railroad
Commission of Texas, for each Well or Hydrocarbon well location allocated to
such "Prospect" on Exhibit B.

      "Effective Time" means 7:00 a.m., Central Time, on May 1, 2005.

      "Environmental Contaminants" means "hazardous substances" and "pollutants
or contaminants", as those terms are defined in Section 101 of the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA"), petroleum,
including any fraction thereof," and "natural gas, natural liquids, liquefied
natural gas, or synthetic gas usable for fuel" as those terms are used in
Section 101 of CERCLA, any "solid or hazardous waste" as those terms are defined
or used in the Resource Conservation and Recovery Act, and any wastes regulated
by applicable rules of the Railroad Commission of Texas. The term also includes
naturally occurring radioactive material ("NORM") concentrated, disposed of,
released or present on, resulting from, or in association with Hydrocarbon
activities.

      "Environmental Condition" means: (a) any event or condition (including,
without limitation, any Release) with respect to air, land, soil, surface,
subsurface strata, surface water, ground water, or sediment that causes the
Remaining Assets to become subject to (or their owner or operator to have
Liability or be potentially liable for) any removal, remediation, or response
action under, or not be in compliance with, any Environmental Law or any Permit
pursuant to any Environmental Law; (b) the existence of any written or oral
Claim pending or threatened that reasonably may be expected to subject the

                            Schedule 2.2(e) - Page 3
<PAGE>

Remaining Assets or the owner or the operator of the Remaining Assets to
liability in favor of any Governmental Authority as the result of the alleged
violation by such owner or operator or any other Person of any Environmental Law
as it pertains to the Remaining Assets or the existence of any event or
condition on the Remaining Assets described in this definition; (c) the failure
of the Remaining Assets to be in compliance, or the owner or operator of the
Remaining Assets to comply, in each case in all material respects with all
applicable Environmental Laws with respect to the Remaining Assets; (d) the
failure of the owner or operator of the Remaining Assets to obtain or maintain
in full force and effect any Permit required under applicable Environmental Laws
with respect to the Remaining Assets; or (e) any event or condition described in
the preceding clauses (a), (b), (c), and (d) that results, or could reasonably
be expected to result, in Liability to any Governmental Authority for any
removal, remediation, or response action, or any other Person for injury to or
death of any Person, Persons, or other living thing, or damage, loss, or
destruction of property located on the Remaining Assets. An event or
circumstance that results in the inaccuracy or breach of the representations and
warranties contained in Section 3.1(d)(iii) or Section 3.1(j) (insofar only as
such representation and warranty relates to environmental matters) shall
constitute an Environmental Condition. The term "Environmental Condition"
includes, without limitation, any release, disposal, spilling, leaking, pouring,
emission, emptying, discharge, injection, escape, transmission, leaching, or
dumping (collectively, a "Release"), or any threatened Release, of any
Environmental Contaminants from, or related in any way to the use, ownership, or
operation of, the Remaining Assets that has not been remedied in accordance with
all applicable Environmental Laws.

      "Environmental Laws" means all applicable Laws (including, without
limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act, the Resource Conservation and Recovery Act, and the Oil Pollution
Act of 1990, the Texas Solid Waste Disposal Act, and applicable rules of the
Texas Railroad Commission relating to the management or disposal of oilfield
waste, in each case as amended from time to time) relating to the protection of
the public health, welfare, and environment, worker protection, emergency
planning, and/or a community's right to know, including, without limitation,
those Laws relating to the storage, handling, and use of chemicals and other
hazardous materials, those relating to the Release, generation, processing,
treatment, storage, transportation, disposal, or other management of waste
materials of any kind, those relating to the protection of environmentally
sensitive areas, and employee health and safety.

      "Gathering System Partnerships" means, collectively, ADVANCE Denton West
Gathering, L.P., ADVANCE Denton South Gathering, L.P., and ADVANCE Denton
Southeast Gathering, L.P., all of which are Texas limited partnerships.

      "Governmental Authority" means any governmental or quasi-governmental
federal, state, provincial, county, city, or other political subdivision of the
United States, any foreign country, or any department, bureau, agency,
commission, court, or other statutory or regulatory body or instrumentality
thereof.

      "Hess" means Gerald Hess, d/b/a Jerry Hess Operating Company.

      "Imbalance" means any imbalance between (a) the quantity of Hydrocarbons
produced from any Well and allocated to a Person from time to time and the share
of such production to which such Person is actually entitled by virtue of its

                            Schedule 2.2(e) - Page 4
<PAGE>

ownership interest in such Well, (b) the quantity of Hydrocarbons produced from
or allocable to any Well delivered, and the quantity of such Hydrocarbons
received, in each case for gathering, transportation, or storage for the account
of a Person, (c) the quantity of Hydrocarbons produced from or allocable to any
Well delivered for processing or refining, and the quantity of products or
residue Hydrocarbons redelivered, in each case for the account of a Person, and
(d) other similar types of Hydrocarbon-related imbalances attributable to the
Wells.

      "Indemnity Group" means, for either Party, the Affiliates, officers,
directors, managers, members, partners, employees, agents, and representatives
of the relevant Party.

      "Knowledge", means (a) with respect to either Party, knowledge of those
matters of which the relevant Party is charged with constructive notice under
applicable Law, (b) with respect to Buyer, the actual knowledge of the current
directors and officers of Buyer, and (c) with respect to Seller, the actual
knowledge of the current directors and officers of Seller and Seller's
Predecessors.

      "Laws" means all constitutions, laws, statutes, ordinances, rules,
regulations, orders, and decrees of the United States, any foreign country, and
any local, state, provincial, or federal political subdivision or agency
thereof, as well as all judgments, decrees, orders, and decisions of courts
having the effect of law in each such jurisdiction, including, without
limitation, all Environmental Laws.

      "Liabilities" means, for purposes of this Agreement, any and all losses,
judgments, damages, liabilities, injuries, costs, expenses, interest, penalties,
taxes, fines, obligations, and deficiencies. As used herein, the term
"Liabilities" includes, without limitation, reasonable attorneys' fees and other
costs and expenses of any Party receiving indemnification hereunder incident to
the investigation and defense of any Claim that results in litigation, or the
settlement of any Claim, or the enforcement by any Party receiving
indemnification hereunder of the provisions of Article IX, as applicable.

      "Lien" means any mortgage, deed of trust, pledge, security interest,
encumbrance, lien, or charge of any kind (including any agreement to grant any
of the foregoing), any conditional sale or title retention agreement, any lease
in the nature thereof, or the filing of or agreement to give any financing
statement under the Uniform Commercial Code of any jurisdiction.

      "Material Adverse Change" means an event, occurrence, development, or
condition that is materially adverse to the Remaining Assets taken as a whole,
excluding (a) any general, regional, industry-wide, economic, or political
event, occurrence, development, or condition (including, without limitation, the
price of Hydrocarbons), whether domestic or international, and (b) any change in
the condition of any Remaining Asset during the period from the date of this
Agreement through the applicable Possession Time resulting from normal depletion
of Hydrocarbon reserves or the depreciation of the Personal Property through
ordinary wear and tear.

      "Net Revenue Interest" means, with respect to each Lease and Well, the
interest in and to all Hydrocarbons produced and saved from or attributable to
the Lease(s) on which such Well is located, after giving effect to all valid
royalties, overriding royalties, production payments, net profits interests,
carried interests, reversionary interests, and other similar interests

                            Schedule 2.2(e) - Page 5
<PAGE>

constituting burdens upon, measured by, or payable out of Hydrocarbons produced
and saved from or attributable to such Lease(s) and Wells.

      "Parties" means, collectively, Seller and Buyer.

      "Permits" means the permits, licenses, authorizations, certificates,
registrations, or other approvals (other than permits and licenses constituting
Real Property Interests) granted by any Governmental Authority that pertain or
relate in any way to the Remaining Assets, described more particularly on
Exhibit E.

      "Permitted Encumbrances" means:

            (a) preferential rights to purchase any Remaining Asset (including,
without limitation, any Contract), required non-governmental, third Person
consents to assignment, and similar agreements with respect to which, prior to
the Closing for such Remaining Asset, (i) waivers or consents are obtained from
the appropriate Persons, or (ii) the appropriate time period for asserting such
rights has expired without an exercise of such right;

            (b) required non-governmental, third Person consents to assignment
if such consent is of a type customarily obtained subsequent to a sale or
conveyance, and the failure to obtain such consent would not have a material
adverse effect on the use or value of the Remaining Assets;

            (c) Liens for taxes or assessments not yet delinquent or, if
delinquent, those taxes or assessments that are being contested in good faith by
proceedings diligently conducted in the normal course of business;

            (d) all rights to consent by, required notices to, filings with, or
other actions by Governmental Authorities in connection with the sale or
conveyance of the Remaining Assets if the same are customarily obtained, given,
or made subsequent to such sale or conveyance;

            (e) the Leases, the Contracts, the Permits, and the Real Property
Interests;

            (f) all easements, rights-of-way, servitudes, permits, licenses,
surface leases, and other rights to use the surface (in addition to the Real
Property Interests) affecting or pertaining to the Remaining Assets, but that
are not included in the Remaining Assets and do not interfere materially with
the ownership, operation, value, or use of the Remaining Assets;

            (g) lessor's royalties, overriding royalties, division orders,
production payments, net profits interests, carried interests, rights to
recoupment, unitization, pooling, proration, and spacing designations, orders,
and agreements, reversionary interests, and similar burdens, if the net
cumulative effect thereof does not operate to cause Seller to receive less than
the Net Revenue Interest set forth on Exhibit B of all Hydrocarbons produced,
saved, and marketed from any Lease or Well or bear and pay more than the Working
Interest shown on Exhibit B of all costs and expenses of operations in respect
of such Lease or Well without a proportionate increase in the associated Net
Revenue Interest;

                            Schedule 2.2(e) - Page 6
<PAGE>

            (h) any operator's or other inchoate or undetermined Lien or charge,
whether statutory or contractual, constituting or securing the payment of
expenses which were or will be incurred in the ordinary course of business and
incidental to the maintenance, development, production, or operation of any
Remaining Asset, to the extent the same secure amounts not yet due and payable
or that are being contested in good faith by proceedings diligently conducted in
the normal course of business;

            (i) any Lien created under the terms of any Lease, Real Property
Interest, or Contract to secure the performance of the lessee's obligations
thereunder;

            (j) conventional rights of reassignment;

            (k) the rights reserved to, vested in, or imposed by any
Governmental Authority to control, regulate, or monitor the Remaining Assets in
any manner, and all applicable Laws;

            (l) Defects and Environmental Conditions waived in writing by Buyer;

            (m) any matters set forth in the Schedules to this Agreement; and

            (n) all other Liens, charges, encumbrances, contracts, agreements,
instruments, obligations, and irregularities affecting any Remaining Asset that
in the aggregate are not such as to (i) interfere materially with the ownership,
operation, value, or use of such Remaining Asset for the purposes for which it
is held; (ii) prevent Seller from receiving any proceeds from the sale of any
Hydrocarbons; or (iii) cause Seller (A) to receive less than the Net Revenue
Interest set forth on Exhibit B of all Hydrocarbons produced, saved, and
marketed from any Lease or Well, or (B) bear and pay more than the Working
Interest shown on Exhibit B of all costs and expenses of operations in respect
of such Lease or Well without a proportionate increase in the associated Net
Revenue Interest.

      "Person" means any individual, corporation, limited liability company,
partnership, trust, unincorporated organization, Governmental Authority, or any
other form of entity.

      "Possession Time" means, with respect to each Remaining Asset conveyed by
Seller to Buyer pursuant hereto, the time on the Closing Date for such Remaining
Asset when all of the actions required under Section 7.3 to be taken by Seller
and Buyer at the Closing for such Remaining Asset have been taken.

      "Property-Related Taxes" means any and all ad valorem, property,
severance, generation, conversion, Btu or gas, transportation, utility, gross
receipts, privilege, consumption, excise, lease, transaction, and other taxes,
franchise fees, governmental charges or fees, licenses, fees, permits, and
assessments, or increases therein, and any interest or penalties thereon, other
than Transfer Taxes and taxes based on or measured by net income or net worth.

      "Restated AMI Agreement" means the Restated and Amended Area of Mutual
Interest Agreement substantially in the form attached hereto as Exhibit G.

      "Retained Environmental Liabilities" means ALL LIABILITIES ARISING OUT OF,
RESULTING FROM, OR RELATING IN ANY WAY TO THE EXISTENCE OF AN ENVIRONMENTAL
CONDITION ON OR RELATING TO ONE OR MORE REMAINING ASSETS CONVEYED BY SELLER TO

                            Schedule 2.2(e) - Page 7
<PAGE>

BUYER PURSUANT HERETO (INCLUDING, WITHOUT LIMITATION, LIABILITY FOR INJURY TO OR
DEATH OF ANY PERSON, PERSONS, OR OTHER LIVING THINGS, OR LOSS OR DESTRUCTION OF
OR DAMAGE TO PROPERTY OCCURRING AS THE RESULT THEREOF), REGARDLESS OF WHETHER
SUCH ENVIRONMENTAL CONDITION IS KNOWN, ANTICIPATED, OR SUSPECTED AS OF THE
POSSESSION TIME FOR THE RELEVANT REMAINING ASSET, TO THE EXTENT ONLY THAT: (a)
SUCH ENVIRONMENTAL CONDITION, OR THE ACTS, OMISSIONS, EVENTS, OR CONDITIONS
GIVING RISE THERETO, AROSE, EXISTED, OR OCCURRED, IN WHOLE OR IN PART, PRIOR TO
SUCH POSSESSION TIME; (b) SELLER RECEIVES NOTICE OF SUCH ENVIRONMENTAL CONDITION
FROM BUYER OR OTHERWISE WITHIN TWELVE (12) MONTHS AFTER SUCH POSSESSION TIME;
AND (c) THE SHARE ALLOCABLE TO THE OWNER OF THE REMAINING ASSETS OF THE ACTUAL
COST TO REMEDY SUCH ENVIRONMENTAL CONDITION OR CONDITIONS (INCLUDING WITHOUT
LIMITATION, LIABILITIES OWED TO ANY GOVERNMENTAL AUTHORITY OR OTHER PERSON)
EXCEEDS, INDIVIDUALLY FOR ANY ENVIRONMENTAL CONDITION OR IN THE AGGREGATE FOR
ALL ENVIRONMENTAL CONDITIONS, $500,000.00, AND DOES NOT EXCEED, INDIVIDUALLY FOR
ANY SUCH ENVIRONMENTAL CONDITION OR IN THE AGGREGATE FOR ALL SUCH ENVIRONMENTAL
CONDITIONS, $1,000,000.00. THE RESPONSIBILITY FOR SUCH COSTS UP TO $500,000.00
AND IN EXCESS OF $1,000,000.00 SHALL CONSTITUTE AN ASSUMED LIABILITY FOR
PURPOSES HEREOF.

      "SEC" means the Securities Exchange Commission or any successor
Governmental Authority.

      "Seller's Predecessors" means, collectively, the Affiliates of Seller from
whom Seller acquired record and beneficial title to the Remaining Assets.

      "Springside Properties" means the oil and gas leases, wells, and
properties, or interests therein, to be conveyed by Hess to the party/Buyer
under the terms of the Voyager-Hess Purchase Agreement.

      "Surface Use Agreement" means the Surface Use Agreement substantially in
the form attached hereto as Exhibit H.

      "Transfer Taxes" means any sales, use, stock, stamp, document, filing,
recording, registration, and similar tax or charge, including, without
limitation, any interest or penalties thereon.

      "Transitional Matters Agreement" means the Transitional Matters Agreement
dated as of December 16, 2005, between Dune Operating Company and Dark Horse
Operating Co., L.L.C.

      "Voyager-Hess Purchase Agreement" means the Asset Purchase Agreement dated
as of August 23, 2005, among Gerald Hess, d/b/a/ Jerry Hess Operating Company,
as Seller, and Voyager Partners, Ltd., as Buyer, relating to the Springside
Properties.

                            Schedule 2.2(e) - Page 8
<PAGE>

      "Working Interest" means, with respect to each Lease or Well, the interest
of Seller that is burdened with the obligation to bear and pay costs of
operations on or in respect of such Lease or Well.

                            Schedule 2.2(e) - Page 9

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