Document:

EX-10.13

GUARANTY

THIS GUARANTY (this “Guaranty”) is made as of the 28th day of September, 2006, by ESCONDE
ENERGY LLC, a Texas limited liability company (“Guarantor”), in favor of BASELINE CAPITAL, INC., a
Texas corporation (“Lender”);

WITNESSETH:

WHEREAS, pursuant to that certain Loan Agreement dated of even date herewith among Esconde
Resources LP, as Borrower (the “Borrower”), Esconde Energy LLC, as Guarantor, and BaseLine Capital,
Inc., as Lender (as the same may be amended, restated, supplemented or otherwise modified from time
to time, the “Loan Agreement”), the Lender has agreed to make loans to Borrower upon the terms and
subject to the conditions set forth therein, to be evidenced by the Notes issued by the Borrower
thereunder.

WHEREAS, it is a condition precedent to Lender executing the Loan Agreement that Guarantor
execute and deliver this Guaranty whereby Guarantor shall guarantee the payment when due, subject
to Section 9 hereof, of all Guaranteed Obligations as defined below.

WHEREAS, Guarantor is the general partner of Borrower.

WHEREAS, in consideration of the financial and other support that Borrower has provided, and
such financial and other support as Borrower may in the future provide, to Guarantor, and in order
to induce Lender to enter into the Loan Agreement, and because Guarantor has determined that
executing this Guaranty is in its interest and to its financial benefit, Guarantor is willing to
guarantee the obligations of Borrower under the Loan Agreement, the Notes and the other Loan
Documents.

NOW, THEREFORE, in consideration of the premises and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

SECTION l.1. Selected Terms Used Herein.

“Guaranteed Obligations” is defined to mean (i) all indebtedness, obligations and liabilities
of Borrower to Lender arising out of or pursuant to the provisions of the Loan Agreement, the Notes
and the other Loan Documents, (ii) all indebtedness, obligations and liabilities of Borrower to
Lender of any kind or character now existing or hereafter arising, whether direct, indirect,
related, unrelated, fixed, contingent, liquidated, unliquidated, joint, several or joint and
several, and regardless of whether such indebtedness, obligations and liabilities may, prior to
their acquisition by Lender, be or have been payable to or in favor of a third party and
subsequently acquired by Lender (it being contemplated that Lender may make such acquisitions from
third parties), including without limitation all indebtedness, obligations and liabilities of
Borrower to Lender now existing or hereafter arising by note, draft, acceptance, guaranty,
endorsement, letter of credit, assignment, purchase, overdraft, discount, indemnity agreement or
otherwise, (iii) all accrued but unpaid interest on any of the indebtedness described in (i) and
(ii) above, (iv) all obligations of Borrower to Lender under any documents evidencing, securing,
governing and/or pertaining to all or any part of the indebtedness described in (i), (ii) or (iii)
above, (v) all costs and expenses incurred by Lender in connection with the collection and
administration of all or any part of the indebtedness and obligations described in (i), (ii), (iii)
or (iv) above or the protection or preservation of, or realization upon, the collateral securing
all or any part of such indebtedness and obligations, including without limitation all reasonable
attorneys’ fees, and (vi) all renewals, extensions, modifications and rearrangements of the
indebtedness and obligations described in (i), (ii), (iii), (iv) and (v) above.

SECTION 1.2. Terms in Loan Agreement. Other capitalized terms used herein but not
defined herein shall have the meaning set forth in the Loan Agreement.

SECTION 2.1. Representations and Warranties. Guarantor represents and warrants
that:

(a) Guarantor is a limited liability company duly and properly organized, validly
existing and in good standing under the laws of its jurisdiction of organization and has all
requisite authority to conduct its business in each jurisdiction in which its business is
conducted.

(b) Guarantor has the power and authority and legal right to execute and deliver this
Guaranty and to perform its obligations hereunder. The execution and delivery by Guarantor
of this Guaranty and the performance of its obligations hereunder have been duly authorized,
and this Guaranty constitutes a legal, valid and binding obligation of Guarantor enforceable
against it in accordance with its terms, except as enforceability may be limited by general
principles of equity and bankruptcy, insolvency or similar laws affecting the enforcement of
creditors’ rights generally.

(c) Neither the execution and delivery by Guarantor of this Guaranty, nor the
consummation of the transactions herein contemplated, nor compliance with the provisions
hereof will violate (i) any law, rule, regulation, order, writ, judgment, injunction, decree
or award binding on it, or (ii) the provisions of any indenture, instrument or agreement to
which it is a party or is subject, or by which it, or its property, is bound, or conflict
with or constitute a default thereunder, or result in, or require, the creation or
imposition of any Lien in, of or on the property of Guarantor pursuant to the terms of any
such indenture, instrument or agreement. No order, consent, adjudication, approval,
license, authorization, or validation of, or filing, recording or registration with, or
exemption by, or other action in respect of any governmental or public body or authority, or
any subdivision thereof, which has not been obtained by it, is required to be obtained by it
in connection with the execution and delivery of this Guaranty or the performance by it of
its obligations hereunder or the legality, validity, binding effect or enforceability of
this Guaranty.

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SECTION 2.2. Covenants.

(a) Guarantor covenants that, so long as any of the Guaranteed Obligations shall remain
unpaid, that it will, and, if necessary, will enable Borrower to, fully comply with those
covenants and agreements set forth in the Loan Agreement.

(b) Neither the execution and delivery by Guarantor of this Guaranty, nor the
consummation of the transactions herein contemplated, nor compliance with the provisions
hereof will violate (i) any law, rule, regulation, order, writ, judgment, injunction, decree
or award binding on it, or (ii) the provisions of any indenture, instrument or agreement to
which it is a party or is subject, or by which it, or its property, is bound, or conflict
with or constitute a default thereunder, or result in, or require, the creation or
imposition of any Lien in, of or on the property of Guarantor pursuant to the terms of any
such indenture, instrument or agreement. No order, consent, adjudication, approval,
license, authorization, or validation of, or filing, recording or registration with, or
exemption by, or other action in respect of any governmental or public body or authority, or
any subdivision thereof, which has not been obtained by it, is required to be obtained by it
in connection with the execution and delivery of this Guaranty or the performance by it of
its obligations hereunder or the legality, validity, binding effect or enforceability of
this Guaranty.

SECTION 3. The Guaranty. Subject to Section 9 hereof, Guarantor hereby absolutely
and unconditionally guarantees, as primary obligor and not as surety, the full and punctual payment
(whether at stated maturity, upon acceleration or early termination or otherwise, and at all times
thereafter) and performance of the Guaranteed Obligations, including without limitation any such
Guaranteed Obligations incurred or accrued during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, whether or not allowed or allowable in such proceeding.
Upon failure by Borrower to pay punctually any such amount, Guarantor agrees that it shall
forthwith on demand pay to Lender the amount not so paid at the place and in the manner specified
in the Loan Agreement, the Notes or the relevant Loan Document, as the case may be. This Guaranty
is a guaranty of payment and not of collection. Guarantor waives any right to require Lender to
sue Borrower, any other guarantor, or any other obligor obligated for all or any part of the
Guaranteed Obligations, or otherwise to enforce its payment against any Collateral securing all or
any part of the Guaranteed Obligations. This Guaranty is continuing and, except as provided in
Section 9 hereof, unlimited as to the amount, and is cumulative to and does not supersede any other
guaranties.

SECTION 4. Guaranty Unconditional. Subject to Section 9 hereof, the obligations of
Guarantor hereunder shall be unconditional and absolute and, without limiting the generality of the
foregoing, shall not be released, discharged or otherwise affected by:

(a) any extension, renewal, settlement, compromise, waiver or release in respect of any
of the Guaranteed Obligations, by operation of law or otherwise, or any obligation of any
other guarantor of any of the Guaranteed Obligations, or any default, failure or delay,
willful or otherwise, in the payment or performance of the Guaranteed Obligations;

(b) any modification or amendment of or supplement to the Loan Agreement, the Notes or
any other Loan Document;

(c) any release, nonperfection or invalidity of any direct or indirect security for any
obligation of Borrower under the Loan Agreement, the Notes, any other Loan Document, or any
obligations of any other guarantor of any of the Guaranteed Obligations, or any action or
failure to act by Lender with respect to any Collateral securing all or any part of the
Guaranteed Obligations;

(d) any change in the existence, structure, name or ownership of Borrower or any other
guarantor of any of the Guaranteed Obligations, or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting Borrower, or any other guarantor of the
Guaranteed Obligations, or its assets or any resulting release or discharge of any
obligation of Borrower, or any other guarantor of any of the Guaranteed Obligations;

(e) the existence of any claim, setoff or other rights which Guarantor may have at any
time against Borrower, any other guarantor of any of the Guaranteed Obligations, any Lender
or any other party, whether in connection herewith or any unrelated transactions;

(f) any invalidity or unenforceability relating to or against Borrower, or any other
guarantor of any of the Guaranteed Obligations, for any reason related to the Loan
Agreement, any other Loan Document, or any provision of applicable law or regulation
purporting to prohibit the payment by Borrower, or any other guarantor of the Guaranteed
Obligations, of the principal of or interest on the Notes or any other amount payable by
Borrower under the Loan Agreement, the Notes, or any other Loan Document; or

(g) any other act or omission to act or delay of any kind by Borrower, any other
guarantor of the Guaranteed Obligations, Lender or any other party or any other circumstance
whatsoever which might, but for the provisions of this paragraph, constitute a legal or
equitable discharge of Guarantor’s obligations hereunder.

SECTION 5. Discharge Only Upon Payment In Full: Reinstatement In Certain
Circumstances. Guarantor’s obligations hereunder shall remain in full force and effect until
all Guaranteed Obligations shall have been indefeasibly paid in full and any obligation of Lender
to make Advances under the Loan Agreement shall have terminated or expired. If at any time any
payment of the principal of or interest on the Notes or any other amount payable by Borrower,
Guarantor or any other party under the Loan Agreement or any other Loan Document is rescinded or
must be otherwise restored or returned upon the insolvency, bankruptcy or reorganization of
Borrower, Guarantor or otherwise, Guarantor’s obligations hereunder with respect to such payment
shall be reinstated as though such payment had been due but not made at such time.

SECTION 6. Waivers. Guarantor irrevocably waives acceptance hereof, presentment,
demand, protest, notice of acceleration of or the intent to accelerate the Guaranteed Obligations
and, to the fullest extent permitted by law, any notice not provided for herein, as well as any
requirement that at any time any action be taken by any person or entity against Borrower,
Guarantor, any other guarantor of any of the Guaranteed Obligations, any other person or entity, or
any property. Guarantor also irrevocably waives the provisions of Section 17.001 of the Texas
Civil Practice and Remedies Code, of Rule 31 of the Texas Rules of Civil Procedure and of Chapter
34 of the Texas Business and Commerce Code, as any of the same may be amended.

SECTION 7. Subrogation. Guarantor hereby agrees not to assert any right, claim or
cause of action, including, without limitation, a claim for subrogation, reimbursement,
indemnification or otherwise, against Borrower arising out of or by reason of this Guaranty or the
obligations hereunder, including, without limitation, the payment or securing or purchasing of any
of the Guaranteed Obligations by Guarantor unless and until the Guaranteed Obligations are
indefeasibly paid in full and any commitment to lend under the Loan Agreement and any other Loan
Documents is terminated.

SECTION 8. Stay of Acceleration. If acceleration of the time for payment of any of
the Guaranteed Obligations is stayed upon the insolvency, bankruptcy or reorganization of Borrower,
all such amounts otherwise subject to acceleration under the terms of the Loan Agreement, the Notes
or any other Loan Document shall nonetheless be payable by Guarantor hereunder forthwith on demand
by Lender.

SECTION 9. Limitation on Obligations.

(a) The provisions of this Guaranty are severable, and in any action or proceeding
involving any state corporate law, or any state, federal or foreign bankruptcy, insolvency,
reorganization or other law affecting the rights of creditors generally, if the obligations
of Guarantor under this Guaranty would otherwise be held or determined to be avoidable,
invalid or unenforceable on account of the amount of Guarantor’s liability under this
Guaranty, then, notwithstanding any other provision of this Guaranty to the contrary, the
amount of such liability shall, without any further action by Guarantor or Lender, be
automatically limited and reduced to the highest amount that is valid and enforceable as
determined in such action or proceeding (such highest amount determined hereunder being
Guarantor’s “Maximum Liability”). This Section 9(a) with respect to the Maximum Liability of
Guarantor is intended solely to preserve the rights of Lender hereunder to the maximum
extent not subject to avoidance under applicable law, and neither Guarantor nor any other
person or entity shall have any right or claim under this Section 9(a) with respect to the
Maximum Liability, except to the extent necessary so that the obligations of Guarantor
hereunder shall not be rendered voidable under applicable law.

(b) Guarantor agrees that the Guaranteed Obligations may at any time and from time to
time exceed the Maximum Liability of Guarantor, without impairing this Guaranty or affecting
the rights and remedies of Lender hereunder.

SECTION 10. Application of Payments. All payments received by Lender hereunder
shall be applied by Lender to payment of the Guaranteed Obligations in the following order unless a
court of competent jurisdiction shall otherwise direct:

(a) FIRST, to payment of all costs and expenses of Lender incurred in connection with
the collection and enforcement of the Guaranteed Obligations or of any security interest
granted to Lender in connection with any Collateral securing the Guaranteed Obligations;

(b) SECOND, to payment of that portion of the Guaranteed Obligations constituting
accrued and unpaid interest and fees;

(c) THIRD, to payment of the principal of the Guaranteed Obligations then due and
unpaid from Borrower to Lender in accordance with the amount of such principal; and

(d) FOURTH, to payment of any Guaranteed Obligations other than those listed above.

SECTION 11. Notices. All notices, requests and other communications to any party
hereunder shall be given or made and be effective as provided in the Loan Agreement.

SECTION 12. No Waivers. No failure or delay by Lender in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise of any other right,
power or privilege. The rights and remedies provided in this Guaranty, the Loan Agreement, the
Notes and other Loan Documents shall be cumulative and not exclusive of any rights or remedies
provided by law.

SECTION 13. No Duty to Advise. Guarantor assumes all responsibility for being and
keeping itself informed of Borrower’s financial condition and assets, and of all other
circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations and the nature,
scope and extent of the risks that Guarantor assumes and incurs under this Guaranty, and agrees
that Lender has no duty to advise Guarantor of information known to it regarding those
circumstances or risks.

SECTION 14. Successors and Assigns. This Guaranty is for the benefit of Lender and
its successors and assigns and in the event of an assignment of any amounts payable under the Loan
Agreement, the Notes or the other Loan Documents, the rights hereunder, to the extent applicable to
the indebtedness so assigned, shall be transferred with such indebtedness. This Guaranty shall be
binding upon Guarantor and its successors and permitted assigns.

SECTION 15. Changes in Writing. Neither this Guaranty nor any provision hereof may
be changed, waived, discharged or terminated orally, but only in writing signed by Guarantor and
Lender.

SECTION 16. Costs of Enforcement. Guarantor agrees to pay all costs and expenses
including, without limitation, all court costs and attorneys’ fees and expenses paid or incurred by
Lender in endeavoring to collect all or any part of the Guaranteed Obligations from, or in
prosecuting any action against, Borrower, Guarantor or any other guarantor of all or any part of
the Guaranteed Obligations.

SECTION 17. Subordination. Guarantor hereby agrees that until the Guaranteed
Obligations are paid in full and any commitment of Lender to lend under the Loan Agreement or any
other Loan Document is terminated, Guarantor will not, without the prior written consent of Lender,
demand, take or receive from Borrower by setoff or any other manner, payment of any indebtedness,
now or at any time or times hereafter owing by Borrower to Guarantor, and all such indebtedness of
Borrower to Guarantor shall be subordinate, junior and inferior to any indebtedness now or
hereafter owing by Borrower to Lender. Guarantor further hereby agrees that any security
interests, liens or encumbrances which Guarantor now has or from time to time may have upon any of
the assets of Borrower shall be made subordinate, junior and inferior and postponed in priority,
operation and effect to any security interest of Lender in such assets.

SECTION 18. GOVERNING LAW; CONSENT TO SERVICE; JURISDICTION; AND WAIVER OF JURY
TRIAL. THIS GUARANTY HAS BEEN PREPARED, IS BEING EXECUTED AND DELIVERED, AND IS INTENDED TO BE
PERFORMED, IN THE STATE OF TEXAS. THE SUBSTANTIVE LAWS OF SUCH STATE AND THE APPLICABLE FEDERAL
LAWS OF THE UNITED STATES OF AMERICA SHALL GOVERN THE VALIDITY, CONSTRUCTION, ENFORCEMENT AND
INTERPRETATION OF THIS GUARANTY, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.

SECTION 19. Taxes, etc. All payments required to be made by Guarantor hereunder
shall be made without setoff or counterclaim and free and clear of and without deduction or
withholding for or on account of, any present or future taxes, levies, imposts, duties or other
charges of whatsoever nature imposed by any government or any political or taxing authority thereof
(but excluding income and franchise taxes), provided, however, that if Guarantor is required by law
to make such deduction or withholding, Guarantor shall forthwith (i) pay to Lender such additional
amount as results in the net amount received by Lender equaling the full amount which would have
been received by Lender had no such deduction or withholding been made, (ii) pay the full amount
deducted to the relevant authority in accordance with applicable law, and (iii) furnish to Lender
certified copies of official receipts evidencing payment of such withholding taxes within 30 days
after such payment is made.

SECTION 20. Setoff. Without limiting the rights of Lender under applicable law, if
all or any part of the Guaranteed Obligations is then due, whether pursuant to the occurrence of an
Event of Default or otherwise, then Guarantor authorizes Lender to apply any sums standing to the
credit of Guarantor with Lender toward the payment of the Guaranteed Obligations.

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IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be duly executed by its authorized
officer as of the day and year first above written.

GUARANTOR:

ESCONDE ENERGY LLC

	 	 	 
	By: /s/
	 	Paul W. Heard

	 
	 	 

	 	 	Paul W. Heard, Managing Member

	By: /s/
	 	Ronnie L. Steinocher

	 
	 	 

	 	 	Ronnie L. Steinocher, Managing Member

	 	 	By: Pierce-Hamilton Energy Partners LP,

Managing Member

By: Muscoda Hill Energy LLC,

its general partner

	 	 	 
	By: /s/
	 	Lisa P. Hamilton

	 
	 	 

	 	 	Lisa P. Hamilton, President

3EX-10.14

AMERICAN STATE BANK

620 NORTH GRANT AVENUE

ODESSA, TEXAS

79761

September 1, 2009

Esconde Resources LP

3326 West Wadley Avenue,

Suite 3-267

Midland, Texas 79701

Esconde Energy, LLC

3326 West Wadley Avenue,

Suite 3-267

Midland, Texas 79701

	 	 	 	RE: Extension and Renewal of a Term Loan previously advanced by American State Bank
to Esconde Resources LP

Gentlemen:

Esconde Resources, LP (the “Borrower”), Esconde Energy, LLC (the “Guarantor”), and American State
Bank (alternatively, “ASB”, the “Bank”, or the “Lender”) have previously entered into that certain
Loan Agreement, dated as of September 28, 2006; as amended by that certain First Amendment to Loan
Agreement, dated as of September 28, 2007; as further amended by that certain Second Amendment to
Loan Agreement, dated as of November 29, 2007; as further amended by that certain Third Amendment
to Loan Agreement, dated as of November 1, 2008; and as further amended by that certain Fourth
Amendment to Loan Agreement, dated as of March 31, 2009 (as so amended, the “ Existing Loan
Agreement”).

The Existing Loan Agreement provides for a revolving line of credit loan in the amount of One
Hundred Forty-Five Thousand and No/100 Dollars ($145,000.00) (the “Existing Revolver Loan”). The
Existing Revolver Loan is evidenced by a Revolving Line of Credit Note, dated as of September 28,
2006; as amended by that certain Modification and Amendment of Revolving Line of Credit Note, dated
as of September 28, 2007; as further amended by that certain Second Modification and Amendment of
Revolving Line of Credit Note, dated as of November 29, 2007; as further amended by that certain
Third Modification and Amendment of Revolving Line of Credit Note, dated as of November 1,
2008; and as further amended by that certain Fourth Modification and Amendment of
Revolving Line of Credit Note, dated as of March 31, 2009, in the original principal amount of One
Hundred Forty-Five Thousand and No/100 Dollars ($145,000.00), which finally matures on June 15,
2009 (as so modified and amended, the “Existing Revolver Note”). The Existing Loan Agreement also
provides for a term loan in the amount of Five Hundred Thousand and No/100 Dollars ($500,000.00)
(the “Existing Term Loan”). The Existing Term Loan is evidenced by a Term Note, dated as of
September 28, 2006, in the original principal amount of Five Hundred Thousand and No/100 Dollars
($500,000.00), which finally matures on September 28, 2010 (the “Existing Term Note”). The
Existing Revolver Loan and the Existing Term Loan are collectively referred to herein as the
“Existing Loans”. The Existing Revolver Note and the Existing Term Note are collectively referred
to herein as the “Existing Notes”. The Existing Loans are collateralized by Deeds of Trust and
Financing Statements covering oil and gas properties owned by Borrower in Borden, Garza, and Scurry
Counties, in the State of Texas (collectively, the AExisting Deeds of Trust@). In
addition, the Existing Loans are collateralized by an unlimited Guaranty Agreement, dated as of
September 28, 2006 (the AExisting Guaranty Agreement@), executed by Esconde Energy,
LLC, a Texas limited liability company (the AGuarantor@). The Existing Deeds of Trust
and the Existing Guaranty Agreement are collectively referred to herein as the AExisting
Security Instruments@.

At the request of the Borrower and the Guarantor, the Bank has now agreed to consolidate the
outstanding balances under the Existing Loans into one loan in the original principal amount of
Three Hundred Nine Thousand Six Hundred Eighty-One and Eighty-Seven/100 Dollars ($309,681.87) (the
“Loan”). The Loan will be evidenced by a Term Note, of even date herewith, executed by Borrower in
favor of Bank, finally maturing on December 15, 2009 (the “Note”). The Loan will be
collateralized by Borrower’s execution of Deeds of Trust, or amendments thereto, and Financing
Statements covering oil and gas properties owned by Borrower in Borden, Garza, and Scurry Counties,
in the State of Texas (collectively, as so amended, the “Deeds of Trust”). In addition, the Loan
will be collateralized by that certain unlimited Guaranty Agreement, of even date herewith (the
“Guaranty Agreement”), to be executed by the Guarantor (the “Guarantor”). The Deeds of Trust, any
associated financing statements, and the Guaranty Agreement are collectively referred to herein as
the “Security Instruments”. The Loan Agreement, the Note, and the Security Instruments are
referred to herein as the “Loan Documents”. To evidence this extension, the Bank, the Borrower,
and the Guarantor have agreed to this Agreement and the other loan documents executed
simultaneously herewith. The Bank’s agreement to extend the Loan shall be subject to the
satisfaction of the following terms and conditions.

I. TERMS

Agreement

This Agreement, dated as of September 1, 2009, and any extensions, renewals, or modifications
hereof.

Borrower

Esconde Resources LP

Guarantor

Esconde Energy LLC

Bank

American State Bank

Commitment

The outstanding principal balance under the Note as of September 1, 2009. The Borrower and the
Guarantor acknowledge that the Bank has advanced all of the principal available under the Loans and
no further principal will be advanced as the result of the execution of this Agreement.

Rate

Interest under the Note shall accrue at an annual rate equal to the American State Bank Base Rate,
plus two percentage point (2.0%), but in no event to be less than six percent (6.0%), and in no
event to exceed the “Highest Lawful Rate” as defined in the Note. For purposes of this Agreement,
the “American State Bank Base Rate” shall mean the rate announced by Bank as its base lending rate
as of the beginning of each Business Day, as hereinafter defined, (and for holidays or weekends,
the American State Bank Base Rate shall be the American State Bank Base Rate as of the close of
business on the most recent Business Day immediately preceding such weekend or holiday) before all
sums payable hereunder have been paid in full. Without notice to the Borrower or any other person,
the American State Bank Base Rate may change from time to time pursuant to the preceding sentence.
The American State Bank Base Rate is a reference rate and does not necessarily represent the lowest
or best rate actually charged to any customer. The Bank may make commercial loans or other loans
at rates of interest at, above, or below the American State Bank Base Rate. “Business Day” shall
mean any day other than a Saturday, Sunday or legal holiday for commercial banks under the laws of
the State of Texas.

Security

The Loan shall be secured by the Security Instruments.

Structure

Pursuant to the terms of the Deeds of Trust, the Bank has redirected the payment of all proceeds of
oil and gas production to the Bank. Out of such proceeds, the Bank shall first pay interest under
the Note. After accrued interest has been paid under the Note, the Bank shall make such principal
payments as it deems necessary under the Note, as well as pay any and all expenses associated with
the Loan, including any and all legal fees incurred. The maturity date of the Note is December 15,
2009.

Purpose

Funds from the Loan will be used to consolidate, extend, and renew the outstanding balances due
under the Existing Loans, as well as to provide a short-term extension of the maturity date in
order to allow Borrower to refinance the debt outstanding under the Note with another financial
institution on or before the maturity date of the Note. No proceeds from the Loan shall be used
for the purpose of purchasing or carrying margin stock in violation of Regulations G, U, or X of
the Board of Governors of the Federal Reserve System.

Maturity Date

As stated, the maturity date of the Loan is December 15, 2009.

II. REPRESENTATIONS AND WARRANTIES

A. Good Standing and Identity. Borrower is a limited partnership, duly organized and
in good standing under the laws of the State of Texas. The legal name of Borrower and its address
are those reflected in the address of this Agreement. The Guarantor is a limited liability
company, duly organized and in good standing under the laws of the State of Texas, and whose legal
name is reflected in the address of this Agreement. The Borrower and the Guarantor have the power
to own their property and to carry on their business in each jurisdiction in which they operate.

B. Authority and Compliance. The Borrower has full power and authority to enter into
this Agreement, to make the borrowing hereunder, to execute and deliver the Notes, and to incur the
obligations provided for herein. No consent or approval of any public authority is required as a
condition to the validity of this Agreement, the Notes, and the Security Instruments, and Borrower
is in compliance with all laws and regulatory requirements to which it is subject.

C. Litigation. With the exception of those matters described on Schedule II (C)
attached hereto, there are no proceedings pending or, to the knowledge of Borrower, threatened
before any court or administrative agency that will or may have a material adverse effect on the
financial condition or operations of Borrower, except as disclosed to the Bank in writing prior to
the date of this Agreement.

D. Ownership of Assets. As of the date of this Agreement, Borrower has good title to
those interests covered by the Security Instruments and any other collateral pledged and the other
collateral is owned free and clear of liens. Borrower will at all times maintain its tangible
property, real and personal, in good order and repair, taking into consideration reasonable wear
and tear.

E. Taxes. All income taxes and other taxes due and payable through the date of this
Agreement have been paid prior to becoming delinquent.

F. Financial Statements. The books and records of the Borrower properly reflect the
financial condition of the Borrower in all material respects, and there has been no material change
in Borrower’s financial condition as represented in its most recent financial statements.

G. Hazardous Wastes and Substances. To the best knowledge of the Borrower and the
Guarantor, the Borrower, the Guarantor, and their properties are in compliance with applicable
state and federal environmental laws and regulations and the Borrower and the Guarantor are not
aware of and have not received any notice of any violation of any applicable state or federal
environmental law or regulation and there has not heretofore been filed any complaint, nor
commenced any administrative procedure, against the Borrower and the Guarantor, or any of their
predecessors, alleging a violation of any environmental law or regulation. Currently and from time
to time, the Borrower and the Guarantor, in the course of their regular business (oil and gas
exploration and production), may use or generate on a portion of their properties materials which
are Hazardous Materials, as hereinafter defined. The Borrower and the Guarantor have and will make
a good faith attempt to comply with all applicable statutes and regulations in the use, generation
and disposal of such materials. To the best of their knowledge, the Borrower and Guarantor have
not otherwise installed, used, generated, stored or disposed of any hazardous waste, toxic
substance, asbestos or related material on their properties. For the purposes of this Agreement,
the term “Hazardous Materials” shall be defined to include the substances set forth in the previous
sentence, as well as substances defined as “hazardous substances” or “toxic substances” in the
Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended, 42 U.S.C.
§9061, et seq., Hazardous Materials Transportation Act, 49 U.S.C. §1802, et seq.,
and the Resource Conservation and Recovery Act, 42 U.S.C. §6901, et seq., or as “hazardous
substances,” “hazardous waste” or “pollutant or contaminant” in any other applicable federal, state
or local environmental law or regulation. No underground storage tanks or facilities exist upon
any property owned by Borrower or the Guarantor, and to the knowledge of Borrower and the
Guarantor, none of such property has ever been used for the treatment, storage, recycling, or
disposal of any Hazardous Materials.

III. CONDITIONS PRECEDENT

The provisions of this Agreement will serve as the proposed terms of the borrowing
arrangements. Prior to any funds being made available, Borrower will execute and deliver to the
Bank, in form and substance satisfactory to the Bank, this Agreement, the Note, and the Security
Instruments (collectively, the “Loan Documents”).

IV. COVENANTS

Unless the Bank shall otherwise consent in writing, and so long as any debt remains
outstanding or the commitment still available, the Borrower and the Guarantor shall comply with the
following:

A. Borrower’s Affirmative Covenants.

	 	1.	 	Within sixty (60) days of each fiscal quarter-end, with the
next fiscal quarter ending as of September 30, 2009, the Borrower will provide
to Bank company-prepared financial statements, in form and substance
satisfactory to Bank, reflecting its financial performance, for the previous
fiscal quarter.

	 	2.	 	Within one hundred twenty (120) days of transmitting any tax
return to any governmental authority, the Borrower and the Guarantor shall
submit to the Bank copies of such returns.

	 	3.	 	The Borrower and Guarantor will provide to the Bank such oil
and gas information as the Bank may reasonably request from time to time.

	 	4.	 	The Borrower and Guarantor will comply with all laws,
regulations, and governmental requirements applicable to any of their
properties, business operations, and transactions.

	 	5.	 	The Borrower and Guarantor will promptly pay any reasonable
costs incurred by the Bank in connection with the preparation or enforcement of
this Agreement, the Notes, the Security Instruments, and any other
documentation executed concurrently herewith.

	 	6.	 	The Borrower will remain in substantial compliance with any and
all environmental laws and regulations, and will not place or permit to be
placed any Hazardous Materials on any of its properties in violation of
applicable state and federal environmental laws. In the event that the
Borrower should discover any Hazardous Materials on any of its properties that
could result in a breach of the foregoing covenant, the Borrower shall notify
the Bank within three (3) days after such discovery. The Borrower shall
dispose of all material amounts of Hazardous Materials that is generated only
at facilities or with carriers that maintain valid governmental permits under
the Resource Conservation and Recovery Act, 42 U.S.C. §6901. In the event of
any notice or filing of any procedure against the Borrower alleging a violation
of any environmental law or regulation, the Borrower shall give notice to the
Bank within five (5) days after receiving notice of such notice or filing.

	 	7.	 	The Borrower will provide such other information as the Bank
may reasonably request from time to time in its sole discretion.

B. Negative Covenants.

1. Neither the Borrower nor the Guarantor shall make any change in its present
accounting method or change its present fiscal year.

2. The Borrower and Guarantor will not make any substantial change in the nature of
their business as now conducted.

3. The Borrower and Guarantor will not sell, contract to sell, convey, assign,
transfer, mortgage, pledge, hypothecate, encumber, or in any way alienate their
interest in any of the properties covered by the Deeds of Trust, without the consent
of the Bank.

V. EVENTS OF DEFAULT

The occurrence and continuing existence for ten (10) days following notification by ASB to the
Borrower of any one of the following shall constitute an Event of Default under this Agreement and
the Notes:

A. Borrower or Guarantor fails to pay when due any principal, interest, or other amount
payable under this Agreement, or any promissory notes executed or guaranteed by the Borrower or
Guarantor in favor of the Bank;

B. Any representation or warranty made by the Borrower or Guarantor hereunder or in any
related collateral security or other documents entered into with the Bank proves to be at any time
false or incorrect in any significant respect;

C. The Borrower or Guarantor fails to observe or perform any covenant, obligation, agreement,
or other provision contained herein or in any other contract or instrument executed in connection
herewith;

D. Any default or defined Event of Default shall occur under any security agreement, deed of
trust, promissory note, loan agreement or other contract or instrument executed by the Borrower or
Guarantor pursuant to, or as required by, this Agreement;

E. Any final judgment or judgments for the payment of money is rendered against Borrower or
Guarantor and is not be satisfied or discharged at least thirty (30) days prior to the date on
which any of his assets could be lawfully sold to satisfy such judgment or judgments, unless
Borrower brings litigation to stay same; or

F. Borrower or Guarantor or any of their affiliated companies: (a) becomes insolvent, or
suffers or consents to, or applies for the appointment of a receiver, trustee, custodian or
liquidator for itself or any of its property, or generally fails to pay its debts as they become
due, or makes a general assignment for the benefit of creditors; or (b) files a voluntary petition
in bankruptcy, or seeking reorganization, in order to effect a plan or other arrangement with
creditors or any other relief under the Bankruptcy Reform Act, Title 11 of the United States Code,
as recodified from time to time (“Bankruptcy Code”), or as now or hereafter in effect, or any
involuntary petition or proceeding pursuant to said Bankruptcy Code or any other applicable state
or federal law relating to bankruptcy or reorganization or other relief for debtors is filed or
commenced against Borrower; or c) files any answer admitting the jurisdiction of the court and the
material allegations of any such involuntary petition; or (d) is adjudicated as bankrupt, under
said Bankruptcy Code or any other state or federal law relating to bankruptcy, reorganization, or
other relief for debtors.

VI. REMEDIES

If any Event of Default shall occur, any term hereof or of the Notes to the contrary
notwithstanding, the entire outstanding principal balance then due under the Notes, shall at the
Bank’s option become immediately due and payable. In addition, the obligation, if any, of the Bank
to permit further borrowings hereunder shall immediately cease and terminate and the Bank shall
have all rights, powers, and remedies available under this Agreement, the Notes, or other contracts
or instruments executed in connection herewith, or accorded by law, including without limitation
the right to resort to any or all of the collateral and to exercise any or all of its rights,
powers, or remedies at any time and from time to time after the occurrence of an Event of Default.

ONCE AN EVENT OF DEFAULT HAS OCCURRED, ASB MAY PURSUE THE REMEDIES PROVIDED FOR IN THIS
AGREEMENT, THE NOTES, AND THE SECURITY INSTRUMENTS WITHOUT PRESENTMENT, DEMAND, PROTEST, NOTICE OF
ACCELERATION, NOTICE OF INTENT TO ACCELERATE, NOTICE OF PROTEST OR NOTICE OF DISHONOR, OR ANY OTHER
NOTICE OF ANY KIND, ALL OF WHICH ARE EXPRESSLY WAIVED BY BORROWER AND GUARANTOR.

Should Borrower or Guarantor be in default of, or fail to comply with any covenant contained
in this Loan Agreement, and if Borrower or Guarantor shall fail to cure such default or fail to
comply with such covenant, within ten (10) days after the receipt of written notice of such default
or failure to comply, then, Bank may at Bank’s option, increase the interest rate provided for in
the Notes to reflect the increased monitoring by Bank and increased risk to Bank as a result of
Borrower’s or Guarantor’s non-compliance. Bank may increase the interest rate an additional one
percent for failure to comply with reporting requirements regarding financial statement and other
information as required by this Agreement, and an additional one percent for Borrower’s or
Guarantor’s non-compliance with performance standards detailed in the financial covenants contained
in this Agreement. Nothing in this paragraph shall require or obligate Bank to exercise this
option to increase the interest rate on the Note in lieu of any other remedy available to Bank,
including that of acceleration of the Note. If the interest rate on the Note is increased as
provided for in this paragraph, and thereafter Borrower or Guarantor achieves compliance with all
of its reporting requirements and covenants contained in this Agreement, then Bank, upon Borrower’s
or Guarantor’s written request, will reinstate the interest rate provided for in the Note.

All rights, powers, and remedies of the Bank in connection with this Agreement, the promissory
notes or any other contract or instrument on which the Borrower or Guarantor may at any time be
obligated to the Bank (or any holder thereof) are cumulative and not exclusive and will be in
addition to any other rights, powers, or remedies provided by law or equity, including without
limitation the right to set off any liability owing by the Bank to the Borrower or Guarantor
(including sums deposited in any deposit account of Borrower or Guarantor with the Bank, excluding
those deposit accounts held by Borrower or Guarantor as agent for any third party) against any
liability of the Borrower or Guarantor to the Bank.

VII. WAIVER

No delay, failure, or discontinuance by the Bank, or any holder of the promissory notes, in
exercising any right, power, or remedy under this Agreement, the Note or any other contract or
instrument on which the Borrower or Guarantor may at any time be obligated to the Bank (or any
holder thereof) shall affect or operate as waiver of such right, power or remedy. Any waiver,
permit, consent, or approval of any kind by the Bank (or any holder of the promissory notes), or of
any provisions or conditions of, or any breach or default under this Agreement, the Note, or any
other contract or instrument on which the Borrower or Guarantor may at any time be obligated, must
be in writing and shall be effective only to the extent set forth in such writing.

VIII. NOTICES

All notices, requests, and demands given to or made upon the respective parties must be in
writing and shall be deemed to have been given or made: (a) at the time of personal delivery
thereof, (b) or two days after any of the same are deposited in the U.S. Mail, first class and
postage prepaid, addressed as follows:

	 	 	 
	Borrower:
	 	Esconde Resources LP

3327 West Wadley Avenue,

Suite 3-267

Midland, Texas 79701

	Guarantor:
	 	Esconde Energy LLC

3327 West Wadley Avenue,

Suite 3-267

Midland, Texas 79701

	ASB:
	 	American State Bank

Attention: Mike Marshall

620 North Grant Avenue

Odessa, Texas 79761

or other such address as any party may designate by written notice to all other parties.

IX. SUCCESSORS AND ASSIGNS

This Agreement shall be binding on and inure to the benefit of the heirs, executors,
administrators, legal representatives, successors, and assigns of the parties, provided, however,
that this Agreement may not be assigned by the Borrower without the prior written consent of the
Bank. The Bank reserves the right to sell, assign, transfer, negotiate, or grant participation in
all or any part of, or any interest in, the Bank’s rights and benefits under this Agreement, the
Note or any contracts or instruments relating thereto. In connection therewith, the Bank may
disclose all documents and information which the Bank now has or may hereafter acquire relating to
the loan or the promissory notes, the Borrower, his business, or any collateral required hereunder.

X. SEVERABILITY OF PROVISIONS

If any of the provisions of this Agreement shall be prohibited by or invalid under applicable
law, such provision shall be ineffective only to the extent of such prohibition or invalidity
without invalidating the remainder of such provision or any remaining provisions of this Agreement.

	XI.	 	VENUE AND JURISDICTION

Any suit, action or proceeding against the Borrower arising out of or relating to this
Agreement or any judgment entered by any court in respect thereof, may be brought or enforced in
the courts of the State of Texas, County of Ector, or in the United States District Court for the
Western District of Texas, as ASB in its sole discretion may elect, and Borrower hereby submit to
the nonexclusive jurisdiction of such courts for the purpose of any such suit, action or
proceeding. The Borrower hereby irrevocably consent to service of process in any suit, action or
proceeding in any of said courts by the mailing thereof by the Bank by registered or certified
mail, postage prepaid, to the Borrower, at the addresses set forth herein.

THE BORROWER AND GUARANTOR HEREBY IRREVOCABLY WAIVE ANY OBJECTIONS THAT THEY MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS AGREEMENT BROUGHT IN ANY OF SAID COURTS AND HEREBY FURTHER IRREVOCABLY WAIVE ANY CLAIM THAT
ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.

FURTHER, THE BORROWER AND GUARANTOR HEREBY IRREVOCABLY WAIVE ANY RIGHT GRANTED BY STATUTE,
RULE OR COURT OR OTHERWISE TO HAVE SUCH SUIT, ACTION, PROCEEDING, OR ISSUE TRIED BY A JURY. THE
BORROWER AND GUARANTOR HAVE WAIVED THE RIGHT TO TRIAL BY JURY KNOWINGLY AND VOLUNTARILY, AND SUCH
WAIVER SHALL BE INTERPRETED TO ENCOMPASS INDIVIDUALLY AND COLLECTIVELY EACH INSTANCE AND EACH
INSTANCE AS TO WHICH THE RIGHT TO TRIAL BY JURY MIGHT OTHERWISE ACCRUE. THE BORROWER AND GUARANTOR
HEREBY AGREE THAT THE BANK MAY INCLUDE A COPY OF THIS PARAGRAPH IN ANY PLEADING OR OTHER
DOCUMENTATION IN ORDER TO EVIDENCE THE WAIVER PROVIDED HEREUNDER.

XII. MISCELLANEOUS

A. Texas Law Applicable. This Agreement, the Notes, the Security Instruments, and any
contracts or instruments relating thereto, shall be governed by and construed in accordance with
the laws of the State of Texas, except to the extent that the Bank has greater rights or remedies
under federal law or the law of any jurisdiction in which the collateral properties are located, in
which case such choice of Texas law shall not be deemed to deprive the Bank of such rights and
remedies under federal law or the law of any jurisdiction in which the collateral properties are
located, in which case such choice of Texas law shall not be deemed to deprive the Bank of such
rights and remedies as may be available under such law.

B. Discretionary Reviews. American State Bank reserves the right to periodically
conduct a review of the Borrower’s ability to perform under the terms of the promissory Notes and
to limit or restrict future advances under the promissory Notes.

C. Order of Application. Except as otherwise provided in the Loan Documents, all
payments and prepayments on this Note, including proceeds from the exercise of any Rights of the
Bank under the Loan Documents, shall be applied to this Note in the following order: (i) first, to
the accrued interest on this Note being paid or prepaid; (ii) to the principal of this Note being
paid or prepaid, with the amounts so prepaid to be applied upon installments of most remote
maturity; (iii) to any remaining obligation of Borrower under the Loan Agreement, and (iv) last, to
reasonable expenses for which the Bank shall not have been reimbursed under the Loan Documents and
then to all amounts to which the Bank is entitled to indemnification under the Loan Documents.

D. Acknowledgment of Rights; Release of Claims. Borrower and Guarantor hereby
acknowledge that as of the execution date of this Agreement: (a) they have no defenses, claims, or
set-offs to the enforcement by Lender of the liabilities, obligations, and agreements of Borrower
and Guarantor under this Agreement or other Loan Documents; and (b) to their knowledge, Lender has
fully performed all undertakings and obligations owed to it. In consideration of Lender’s
agreement to enter into this Agreement, Borrower and Guarantor hereby irrevocably release and
forever discharge Lender and its Affiliates, and each such entity’s respective directors, officers,
employees, agents, attorneys, and representatives (each, a “Released Person”) of and from all
damages, losses, claims, demands, liabilities, obligations, actions, or causes of action whatsoever
which Borrower may have had as of the execution date of this Agreement against any Released Person
for or because of any matter or thing done, omitted, or suffered to be done or omitted by any of
the Released Persons prior to the execution of this Agreement of which either the Borrower or
Guarantor is aware and on account of or in any way concerning, arising out of, or founded upon this
Agreement or any other Loan Document; provided, however, nothing in this Section 12 shall be
construed as a waiver of any claims against any Released Person that may arise from any action or
omission occurring after the execution of this Agreement by Borrower and Guarantor. This Section 12
shall survive the termination of this Agreement and payment in full of the Obligations thereunder.

E. Notice of Final Agreement. THIS AGREEMENT, THE NOTE, ANY CONTRACTS OR INSTRUMENTS
RELATING THERETO, REPRESENT THE ENTIRE AGREEMENT BETWEEN THE PARTIES, AND IT IS EXPRESSLY
UNDERSTOOD THAT ALL PRIOR CONVERSATIONS OR MEMORANDA BETWEEN THE PARTIES REGARDING THE TERMS OF
THIS AGREEMENT SHALL BE SUPERSEDED BY THIS AGREEMENT. ANY AMENDMENT, APPROVAL, OR WAIVER BY ASB OF
THE TERMS OF THIS AGREEMENT, THE NOTE AND ANY CONTRACTS OR INSTRUMENTS RELATING THERETO, MUST BE IN
WRITING OR CONFIRMED WRITING, AND SHALL BE EFFECTIVE ONLY TO THE EXTENT SPECIFICALLY SET FORTH IN
SUCH WRITING. THIS AGREEMENT, IN CONJUNCTION WITH THE NOTES AND ANY CONTRACTS OR INSTRUMENTS
RELATING THERETO, SHALL SERVE TO EVIDENCE THE TERMS OF THE ENTIRE AGREEMENT BETWEEN THE PARTIES.

{The remainder of this page is intentionally blank; signature page follows.}

Please acknowledge your acceptance of and agreement to the terms of this Agreement by
dating and executing where indicated.

Very truly yours,

AMERICAN STATE BANK

By:       /s/      Mike Marshall       

Mike Marshall

President

AGREED TO AND ACCEPTED THIS

1st DAY OF SEPTEMBER 2009

BORROWER:

ESCONDE RESOURCES LP, a Texas limited partnership

BY: ESCONDE ENERGY LLC, its general partner

By: Pierce-Hamilton Energy Partners LP, its managing member

By: Muscoda Hill Energy LLC, its general partner

By:       /s/ Lisa P. Hamilton—

Lisa P. Hamilton, President

By:       /s/ Paul W. Heard      

Paul W. Heard

Managing Member

By:       /s/ Ronnie L. Steinocher—

Ronnie L. Steinocher

Managing Member

GUARANTOR:

	 	 	ESCONDE ENERGY LLC, a Texas Limited Liability Company

By: Pierce-Hamilton Energy Partners LP, its managing member

	 	 	By: Muscoda Hill Energy LLC, its general partner

By:      /s/ Lisa P. Hamilton

Lisa P. Hamilton, President

	 	 	 
	By:
	 	/s/ Paul W. Heard

	 	 	 

	 	 	Paul W. Heard

Managing Member

	 	 	 
	 	 

By:_/s/ Ronnie L. Steinocher____________      }

                    Ronnie L. Steinocher
                    Managing Member        MAKER
By:_/s/ Ronnie L. Steinocher____________

	 	 	Ronnie L. Steinocher
	 	 	Managing Member MAKER

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