Document:

Form of Warrant sold as part of August 2005 private placement

    EXHIBIT
      10.2

     

    

     

    THIS
      SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
      (THE “SECURITIES ACT”). THE SECURITY HAS BEEN ACQUIRED FOR INVESTMENT AND MAY
      NOT BE SOLD, TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF IN THE ABSENCE
      OF A
      CURRENT AND EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT WITH
      RESPECT TO SUCH SECURITY, OR AN OPINION OF THE ISSUER'S COUNSEL TO THE EFFECT
      THAT REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT.

     

    

    COMMON
      STOCK PURCHASE WARRANT

    

    of

     

    Petro
      Resources Corporation

    (a
      Delaware Corporation)

    

    THIS
      CERTIFIES THAT, for value received, __________________________ (the
“Holder”),
      as
      registered owner of this Warrant, is entitled to at any time or from time to
      time before 5:00 p.m., Houston, Texas time, on November 21, 2010 (the
“Expiration
      Time”)
      but
      not thereafter, to subscribe for, purchase and receive up to _____________
      fully
      paid and nonassessable shares of the $.01 par value common stock (the
“Common
      Stock”),
      of
      Petro Resources Corporation, a Delaware corporation (the “Company”).
      The
      exercise price for such number of shares will be $2.00 per share. The number
      of
      shares of Common Stock deliverable hereunder, and the price to be paid for
      a
      share of Common Stock may be adjusted from time to time as hereinafter set
      forth. The shares of Common Stock deliverable hereunder, as adjusted from time
      to time, are hereinafter sometimes referred to as “Warrant
      Stock.”
The
      exercise price of a share of Warrant Stock in effect at any time, and as
      adjusted from time to time, is hereinafter sometimes referred to as the
“Exercise
      Price.”

    

    1. Exercise
      of Warrant.
      This
      Warrant may be exercised in whole or part at any time and from time to time
      after the date hereof and prior to the Expiration Time by presentation and
      surrender of this Warrant and payment by cashier's check of the Exercise Price
      for such shares of Warrant Stock to the Company at the principal office of
      the
      Company. If the subscription rights represented hereby are not exercised at
      or
      before the Expiration Time, this Warrant will become and be void without further
      force or effect, and all rights represented hereby will cease and expire. This
      Warrant may be exercised in accordance with its terms in whole or in part
      (payment of a portion of the Exercise Price will proportionately reduce the
      number of shares to be issued to the Holder). In the event of the exercise
      in
      part only, the Company will cause to be delivered to the Holder a new Warrant
      of
      like tenor to this Warrant in the name of the Holder evidencing the right of
      the
      Holder to purchase the number of shares of the Warrant Stock purchasable
      hereunder as to which this Warrant has not been exercised or
      assigned.

    

    2. Rights
      of the Holder.
      Holder
      will not be entitled to vote or receive dividends or be deemed the holder of
      Common Stock or any other securities of the Company that may at any time be
      issuable on the exercise hereof for any purpose, nor will anything contained
      herein be construed to confer upon the Holder of this Warrant, as such, any
      of
      the rights of a shareholder of the Company or any right to vote for the election
      of directors or upon any matters submitted to shareholders at any meeting
      thereof, or to give or withhold consent to any corporate action (whether upon
      any recapitalization, issue of stock, reclassification of stock, change of
      par
      value or change of stock to no par value, consolidation, merger, conveyance,
      or
      otherwise) or to receive dividends or subscription rights or otherwise until
      this Warrant has been exercised and the Warrant Stock issuable upon the exercise
      hereof has become deliverable as provided herein.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    3. Adjustments
      to Exercise Price and Number of Shares.

    

    (a) Adjustment
      for Reclassifications.
      If at
      any time or from time to time after the issue date the holders of the Common
      Stock of the Company (or any shares of stock or other securities at the time
      receivable upon the exercise of this Warrant) have received, or, on or after
      the
      record date fixed for the determination of eligible stockholders, have become
      entitled to receive, without payment therefore, other or additional stock or
      other securities or property (including cash) by way of stock-split, spinoff,
      reclassification, combination of shares or similar corporate rearrangement
      (exclusive of any stock dividend of its or any subsidiary's capital stock),
      then
      and in each such case the Holder of this Warrant, upon the exercise hereof
      as
      provided in Section 1, will be entitled to receive the amount of stock and
      other
      securities and property which such Holder would hold on the date of such
      exercise if on the issue date he had been the holder of record of the number
      of
      shares of Common Stock of the Company called for on the face of this Warrant
      and
      had thereafter, during the period from the issue date, to and including the
      date
      of such exercise, retained such shares and/or all other or additional stock
      and
      other securities and property receivable by him as aforesaid during such period,
      giving effect to all adjustments called for during such period. In the event
      of
      any such adjustment, the Exercise Price will be adjusted
      proportionately.

     

    (b) Adjustment
      for Reorganization, Consolidation, Merger.
      In the
      event of any reorganization of the Company (or any other corporation the stock
      or other securities of which are at the time receivable on the exercise of
      this
      Warrant) after the issue date, or in case, after such date, the Company (or
      any
      such other corporation) consolidates or merges with another corporation
      (including any merger in which the Company is the survivor) or conveys all
      or
      substantially all of its assets to another corporation, then and in each such
      case the Holder of this Warrant, upon the exercise hereof as provided in Section
      1 at any time after the consummation of such reorganization, consolidation,
      merger or conveyance, will be entitled to receive, in lieu of the stock or
      other
      securities and property receivable upon the exercise of this Warrant prior
      to
      such consummation, the stock or other securities or property to which such
      Holder would be entitled had the Holder exercised this Warrant immediately
      prior
      thereto, all subject to further adjustment as provided herein; in each such
      case, the terms of this Warrant will be applicable to the shares of stock or
      other securities or property receivable upon the exercise of this Warrant after
      such consummation.

     

    4. Transfer
      to Comply with the Securities Act of 1933.

    

    (a) This
      Warrant and the Warrant Stock or any other security issued or issuable upon
      exercise of this Warrant may not be sold, transferred or otherwise disposed
      of
      except to a person who, in the opinion of counsel for the Company, is a person
      to whom this Warrant or such Warrant Stock may legally be transferred without
      registration and without the delivery of a current prospectus under the
      Securities Act with respect thereto and then only against receipt of an
      agreement of such person to comply with the provisions of this Section 4
      with respect to any resale or other disposition of such securities.

     

    (b) The
      Company may cause the following legend to be set forth on each certificate
      representing Warrant Stock or any other security issued or issuable upon
      exercise of this Warrant, unless counsel for the Company is of the opinion
      as to
      any such certificate that such legend is unnecessary:

     

    THE
      SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THE SHARES HAVE BEEN
      ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR OTHERWISE
      DISPOSED OF IN THE ABSENCE OF A CURRENT AND EFFECTIVE REGISTRATION STATEMENT
      UNDER THE SECURITIES ACT WITH RESPECT TO SUCH SHARES, OR AN OPINION OF THE
      ISSUER'S COUNSEL TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED UNDER THE
      SECURITIES ACT.

     

    5. Reservation
      of Common Stock, Etc.
      There
      will be reserved, and the Company will at all times keep reserved, out of the
      authorized and unissued shares of Common Stock, a number of shares sufficient
      to
      provide for the exercise of this Warrant.

    

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly
      authorized officer on this 21st
      day of
      November, 2005.

     

    
       

      
        	 	 	 
	 	PETRO
                RESOURCES
                CORPORATION, 
                a
                  Delaware corporation

              
	 
 	 
 	 
 
	
              	By:  	/s/ Wayne
                P.
                Hall
	 	
                

              
	 	Wayne
                P.
                Hall, Chief Executive Officer

      

       

       

       

      -3-Lease Purchase Agreement dated January 10, 2006 between Registrant and The
      Meridian Resource & Exploration, LLC

     

    EXHIBIT 10.3

     

     

    
      

      

    

    

     

    LEASE
      PURCHASE AGREEMENT

     

    BY
      AND BETWEEN

     

    PETRO
      RESOURCES CORPORATION (IN TEXAS D/B/A PRCT, INC.)

     

    AND

     

    THE
      MERIDIAN RESOURCE & EXPLORATION LLC

     

    DATED
      JANUARY 10, 2006

     

     

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    TABLE
      OF CONTENTS

    

     

    
      	 	 	Page
	 	 	 
	
              ARTICLE
                I

            	
              DEFINED
                TERMS 

            	
              1

            
	
              1.1

            	
              Definitions
                

            	
              1

            
	
              1.2

            	
              References,
                Gender, Number 

            	
              5

            
	
              ARTICLE
                II

            	
              AGREEMENT
                TO CONVEY 

            	
              6

            
	
              ARTICLE
                III

            	
              CONSIDERATION
                AND PAYMENT 

            	
              6

            
	
              3.1

            	
              Consideration
                

            	
              6

            
	
              3.2

            	
              Payment
                

            	
              6

            
	
              ARTICLE
                IV

            	
              REPRESENTATIONS
                AND WARRANTIES 

            	
              6

            
	
              4.1

            	
              Representations
                and Warranties of PRCT 

            	
              6

            
	 	
              (a)

            	
              Organization
                and Qualification 

            	
              6

            
	 	
              (b)

            	
              Non-Foreign
                Status 

            	
              6

            
	 	
              (c)

            	
              No
                Investment Company 

            	
              6

            
	 	
              (d)

            	
              Authority
                

            	
              6

            
	 	
              (e)

            	
              Enforceability
                

            	
              7

            
	 	
              (f)

            	
              No
                Conflict or Violation 

            	
              7

            
	 	
              (g)

            	
              Consents
                

            	
              7

            
	 	
              (h)

            	
              Actions;
                Orders 

            	
              7

            
	 	
              (i)

            	
              Brokerage
                Fees and Commissions 

            	
              8

            
	 	
              (j)

            	
              Compliance
                with Leases; Status of Operations 

            	
              8

            
	 	
              (k)

            	
              Preference
                Rights 

            	
              8

            
	 	
              (1)

            	
              Contracts
                and Leases 

            	
              8

            
	 	
              (m)

            	
              Tax
                Partnerships 

            	
              9

            
	 	
              (n)

            	
              Bankruptcy
                

            	
              9

            
	 	
              (o)

            	
              PRCT's
                Knowledge 

            	
              9

            
	
              4.2

            	
              Representations
                and Warranties of Meridian 

            	
              10

            
	 	
              (a)

            	
              Organization
                and Qualification 

            	
              10

            
	 	
              (b)

            	
              Authority
                

            	
              10

            
	 	
              (c)

            	
              Enforceability
                

            	
              10

            
	 	
              (d)

            	
              No
                Conflict or Violation 

            	
              11

            
	 	
              (e)

            	
              Consents
                

            	
              11

            

    

    
      
         

      

      
        i

        
          

        

      

      
         

      

    

    

    TABLE
      OF CONTENTS

    (continued)

     

    
      	 	 	 	Page
	 	 	 	 
	 	
              (f)

            	
              Actions;
                Orders 

            	
              11

            
	 	
              (g)

            	
              Brokerage
                Fees and Commissions 

            	
              11

            
	 	
              (h)

            	
              Independent
                Evaluation 

            	
              11

            
	 	
              (i)

            	
              Qualification
                

            	
              12

            
	 	
              (j)

            	
              Securities
                Laws 

            	
              12

            
	 	
              (k)

            	
              No
                Holding Company 

            	
              12

            
	 	
              (1)

            	
              Funds
                

            	
              12

            
	 	
              (m)

            	
              Bankruptcy
                

            	
              12

            
	 	
              (n)

            	
              Meridian's
                Knowledge 

            	
              12

            
	
              ARTICLE
                V

            	
              COVENANTS
                OF PRCT AND MERIDIAN 

            	
              13

            
	
              5.1

            	
              Assignments
                

            	
              13

            
	
              5.2

            	
              Data
                and Information 

            	
              13

            
	 	
              (a)

            	
              Lease
                and Land Information 

            	
              13

            
	 	
              (b)

            	
              Geological
                and Geophysical Data 

            	
              13

            
	
              5.3

            	
              Confidentiality
                

            	
              14

            
	
              5.4

            	
              Best
                Efforts 

            	
              14

            
	
              5.5

            	
              Area
                of Mutual Interest 

            	
              14

            
	
              5.6

            	
              Post-Closing
                Title Review 

            	
              15

            
	
              5.7

            	
              Determination
                of Title Defects 

            	
              17

            
	
              5.8

            	
              Title
                Defect Amount 

            	
              18

            
	
              5.9

            	
              Title
                Defect Deductible 

            	
              18

            
	
              ARTICLE
                VI

            	
              CLOSING
                CONDITIONS 

            	
              18

            
	
              6.1

            	
              PRCT's
                Closing Conditions 

            	
              18

            
	 	
              (a)

            	
              Representations,
                Warranties and Covenants 

            	
              18

            
	 	
              (b)

            	
              Officer's
                Certificate 

            	
              18

            
	 	
              (c)

            	
              Assignments
                

            	
              18

            
	 	
              (d)

            	
              Consents
                and Waivers 

            	
              18

            
	 	
              (e)

            	
              No
                Action 

            	
              18

            
	
              6.2

            	
              Meridian's
                Closing Conditions 

            	
              19

            
	 	
              (a)

            	
              Representations,
                Warranties and Covenants 

            	
              19

            

    

    

     

    

    
      
         

      

      
        ii

        
          

        

      

      
         

      

    

    

    TABLE
      OF CONTENTS

    (continued)

     

     

    
      	 	 	 	Page
	 	 	 	 
	 	
              (b)

            	
              Officer's
                Certificate

            	
              19

            
	 	
              (c)

            	
              Assignments
                

            	
              19

            
	
            	
              (d)

            	
              No
                Action 

            	
              19

            
	
            	
              (e)

            	
              Consents
                and Waivers 

            	
              19

            
	 	
              (f)

            	
              Affidavit
                of Non-foreign Status 

            	
              19

            
	
              6.3

            	
              Failure
                to Disclose 

            	
              19

            
	
              ARTICLE
                VII

            	
              CLOSING
                

            	
              20

            
	
              7.1

            	
              Closing
                

            	
              20

            
	
              7.2

            	
              PRCT's
                CIosing Obligations 

            	
              20

            
	
              7.3

            	
              Meridian's
                Closing ObIigations 

            	
              20

            
	
              7.4

            	
              Survival
                

            	
              20

            
	
              ARTICLE
                VIII

            	
              OPERATIONS
                

            	
              21

            
	
              8.1

            	
              Operations
                

            	
              21

            
	
              ARTICLE
                IX

            	
              DAMAGES
                

            	
              21

            
	
              ARTICLE
                X

            	
              ASSUMPTION
                AND INDEMNIFICATION 

            	
              22

            
	
              10.1

            	
              Indemnification
                by PRCT 

            	
              22

            
	
              10.2

            	
              Indemnification
                by Meridian 

            	
              22

            
	
              10.3

            	
              Third
                Party Claims 

            	
              22

            
	
              10.4

            	
              Exclusive
                Remedy 

            	
              23

            
	
              ARTICLE
                XI

            	
              MISCELLANEOUS
                PROVISIONS 

            	
              23

            
	
              11.1

            	
              Relationship
                of the Parties 

            	
              23

            
	
              11.2

            	
              Choice
                of Law 

            	
              23

            
	
              11.3

            	
              Jurisdiction;
                Process 

            	
              24

            
	
              11.4

            	
              Waiver
                of Jury Trial 

            	
              24

            
	
              11.5

            	
              Laws
                

            	
              24

            
	
              11.6

            	
              Entire
                Agreement 

            	
              24

            
	
              11.7

            	
              Time
                of the Essence 

            	
              24

            
	
              11.8

            	
              Successors
                

            	
              24

            
	
              11.9

            	
              Assignment
                

            	
              24

            
	
              11.10

            	
              Notice
                

            	
              25

            

    

    

     

    

    

    
      
         

      

      
        iii

        
          

        

      

      
         

      

    

    TABLE
      OF CONTENTS 

    (continued)

     

    
      	
              11.11
                

            	
              Severability
                

            	
              25

            
	
              11.12
                

            	
              Publicity
                

            	
              25

            
	
              11.13

            	
              No
                Third Party Beneficiaries 

            	
              26

            
	
              11.14
                

            	
              Exhibits
                

            	
              26

            
	
              11.15
                

            	
              Captions
                

            	
              26

            
	
              11.16
                

            	
              Drafting
                of Agreement 

            	
              26

            
	
              11.17
                

            	
              Further
                Assurances 

            	
              26

            
	
              11.18
                

            	
              Costs
                and Expenses 

            	
              26

            
	
              11.19
                

            	
              Counterparts
                

            	
              26 

            

    

    

    EXHIBITS

    

    Exhibit
      A
      - Description of Leases 

    Exhibit
      B-1 - Form of Lease Assignment

    Exhibit
      B-2 - Form of Lease Option Agreement Assignment

     

    SCHEDULES

     

    Schedule
      4.1(f) -- Required Consents and Notifications

     

     

    

    
      
         

      

      
        iv

        
          

        

      

      
         

      

    

     

    LEASE
      PURCHASE AGREEMENT

     

    This
      Lease Purchase Agreement (this "Agreement") dated as of January 10, 2006,
      by and between
      PETRO RESOURCES CORPORATION, a Delaware corporation, doing business in
      the
      State of
      Texas as PRCT, Inc. ("PRCT"), and THE MERIDIAN RESOURCE & EXPLORATION
      LLC, a Delaware limited liability company ("Meridian"). PRCT and Meridian
      are sometimes hereinafter referred to individually as a "Party" and
      collectively as the "Parties".

    

    WHEREAS,
      PRCT owns the Leases (as defined below) and the "Lease Option" under
      the
      Lease
      Option Agreement (as defined below); and

    

    WHEREAS,
      PRCT desires to convey to Meridian, and Meridian desires to acquire from PRCT,
      an undivided seventy-five percent (75%) of PRCT's entire interests in and to
      such Leases and Lease Option on the terms and conditions set forth herein;
      and

    

    WHEREAS,
      Meridian desires to participate with PRCT in the drilling of certain wells
      on
      the Subject Lands (as defined below) on the terms and conditions set forth
      herein;

    

    NOW,
      THEREFORE, in consideration of the mutual covenants and agreements made herein,
      the Parties, intending to be legally bound, hereby agree as
      follows:

    

    ARTICLE
      I

    DEFINED
      TERMS

    

    1.1
      Definitions.
      The
      defined terms used in this Agreement, shall, unless the context otherwise
      requires, have the meanings specified in this Article I, with each such
      definition being equally applicable both to the singular and the plural forms
      of
      the terms so defined.

    

    (a) "Actions"
      means any action, claim, suit, arbitration, inquiry, proceeding, investigation
      or audit by or before any court or any Governmental Authority.

    

    (b) "Affiliate"
      means, when used with respect to any party, any other Person (a) which directly
      or indirectly through one or more intermediaries controls, or is controlled
      by,
      or is under common control with, such party, or (b) which beneficially owns
      or
      holds more than 50% of any class of voting stock (or in the case of a Person
      which is not a corporation, more than 50% of any class of equity interest)
      of
      such party, or
      (c)
      more than 50% of any class of whose voting stock (or in the case of a Person
      which
      is not a
      corporation, more than 50% of any class of whose equity interest) is
      beneficially owned or held by such party and its Affiliates. The term "control"
      (including the terms "controlled by" and "under common control with") means
      the
      possession, directly or indirectly,
      of the power to direct of cause the direction of the management or policies
      of
      a
      Person,
      whether through the ownership of voting stock or any equity interest, by
      contract or otherwise.

    

    (c) "AMI"
      shall be as defined in Section 5.5.

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

     

    (d) "AMI
      Leases" shall mean any oil and gas leasehold interest covering lands located
      within the AMI with respect to which a Party elected to acquire its
      proportionate interest pursuant to the provisions of Section 5.5. If a
      determination of whether a leasehold interest constitutes an AMI Lease must
      be
      made at a point in time when the time period under Section 5.5 for a Party
      to
      elect to acquire its interest is still extant and the Party timely elects to
      acquire its interest, then such leasehold interest shall constitute an AMI
      Lease
      as of the time of such determination.

    

    (e) "Applicable
      Operating Agreement" means the Initial Operating Agreement or such other
      operating agreement as may, by mutual agreement, be entered into by the Parties
      after the Closing that governs and controls operations on all or part of the
      AMI, as applicable.

    

    (f) "Assignments"
      shall be as defined in Section 5.1.

    

    (g) "Assumed
      Liabilities" means any Covered Liabilities arising out of or attributable to
      the
      ownership, use, maintenance or operation of the Subject Interests subsequent
      to
      Closing.

    

    (h) "Business
      Day" means any day which is not a Saturday, Sunday or legal holiday recognized
      by the United States of America.

    

    (i) "Closing"
      means the consummation of the transactions contemplated by Article
      VII.

    

    (j) "Closing
      Date" means January 10, 2006.

    

    (k)
      "Covered Liabilities" means any and all debts, losses, liabilities, duties,
      claims, damages, obligations, payments (including those arising out of any
      demand, assessment, settlement, judgment or compromise relating to any actual
      or
      threatened Action), taxes, costs and expenses (including any attorneys' fees
      and
      any and all expenses whatsoever incurred in investigating, preparing or
      defending any Action), whether or not the same are, as of the date hereof,
      matured or unmatured, absolute or contingent, accrued or unaccrued, liquidated
      or unliquidated, known or unknown, including any of the foregoing arising under,
      out of or in connection with any Action, any order or consent decree of any
      Governmental Authority, any award of any arbitrator, or any Law, contract,
      commitment or undertaking.

     

    (l) "Defensible
      Title" shall be as defined in Section 5.7.

    

    (m) "Excluded
      Liabilities" means any Covered Liabilities arising out of or attributable to
      the
      ownership, use, maintenance or operation of the Subject Interests and relating
      specifically to acts or omissions during the period from the date of the
      relevant Lease to the date of Closing.

     

    (n) "Exploration
      Agreement" means that certain Exploration Agreement by and between PRCT and
      Meridian, executed on the date of execution of this Agreement.

     

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

     

              
      (o) "Governmental
      Authority" means (i) the United States of America, (ii) any state, county,
      municipality or other governmental subdivision within the United States of
      America, and (iii) any court or any governmental department, commission, board,
      bureau, agency or other instrumentality of the United States of America or
      of
      any state, county, municipality or other governmental subdivision with the
      United States of America.

     

    (p) "Hydrocarbons"
      means (i) crude oil, natural gas and other liquid or gaseous hydrocarbons and
      (ii) all minerals and substances produced with or extracted, separated,
      processed or produced from crude oil, natural gas or other liquid or gaseous
      hydrocarbons.

     

    (q) "Indemnified
      Party" shall be as defined in Section 10.3.

     

    (r) "Initial
      Operating Agreement" means a Joint Operating Agreement by and between Meridian,
      as operator, and PRCT, as non-operator, executed on the date of execution of
      this Agreement.

     

    (s) "Law"
      means all applicable statutes, laws, ordinances, regulations, rules, rulings,
      orders, decrees or other official acts of any Governmental
      Authority.

     

    (t)
"Leases"
      means the oil and gas leases described in Exhibit
      A.

     

               
      (u) "Lease
      Option Agreement" means that certain Lease Option Agreement dated effective
      September 14, 2005, by and between Black Stone Acquisitions Partners I, L.P.,
      and Sugarberry Oil & Gas Corporation, as Optionors, and PRCT, as
      Optionee.

     

               
      (v) "Lien"
      means any lien, mortgage, charge, penalty, restriction, security, interest,
      collateral assignment, pledge, sale or purchase contract, option, call or
      dedication, right of first refusal or other preferential purchase right,
      reservation, condition, sublease, license, area of mutual interest agreement,
      operating agreement, processing contract, farmout or development agreement,
      drilling or service contract, easement or right-of-way, pooling or unitization
      order or agreement, or other encumbrance or similar agreement.

     

    (w) "Meridian
      Indemnified Parties" shall be as defined in Section 10.1.

     

    (x) "Net
      Revenue Interest" means, with respect to any Lease, an interest (expressed
      as a
      percentage or decimal fraction) in and to all Hydrocarbons produced and saved
      from or attributable to the Subject Lands covered by such Lease, after giving
      effect to all royalties, overriding royalties and other burdens upon, measured
      by, or payable out of production therefrom.

     

    (y) "Party"
      shall be as defined in the preamble of this Agreement.

     

    (z) "Permits"
      means all permits, licenses, consents, approvals and filings which the lessee
      under the Leases is required to obtain, have or make pursuant to
      any

     

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    Law
      or
      with or from any Governmental Authority to permit or allow such lessee to
      conduct any exploration, development, production, processing, abandonment or
      other operations or activities with respect to the Leases or the Subject
      Lands.

    

    (aa) "Permitted
      Encumbrances" means (A) the terms, conditions, restrictions, exceptions,
      reservations, limitations and other matters contained in the agreements,
      instruments and other documents which create PRCT's Interest (including the
      Leases and the Lease Option Agreement), provided that the same (i) do not reduce
      the Net Revenue Interest below that set forth in Exhibit
      A
      or (ii)
      do not increase the Working Interest above that set forth in Exhibit
      A
      without
      a proportionate increase in the Net Revenue Interest for the applicable Lease;
      (B) statutory and conventional liens securing payments to operators, mechanics
      and materialmen or others, payments of taxes or other claims or payment
      obligations that are, in each case, not yet delinquent or, if delinquent, are
      being contested in good faith in the normal course of business; (C) any
      obligations or duties to any municipality or public authority with respect
      to
      any franchise, grant, certificate, license or permit; (D) any easements,
      rights-of-way, servitudes, permits and other rights in respect of surface
      operations, pipelines or the like, and easements for pipelines, power lines
      and
      other similar rights-of-way, and encroachments, on, over or in respect of any
      of
      the Leases that do not, individually or in the aggregate, unreasonably or
      materially interfere with the operation of the Leases for exploration and
      production of Hydrocarbons or related operations; (E) all royalties, overriding
      royalties, net profits interests, production payments, carried interests,
      reversionary interests, calls on production and other burdens on or deductions
      from the proceeds of production that do not operate to (i) reduce the Net
      Revenue Interest below that set forth in Exhibit
      A
      or (ii)
      increase the Working Interest above that set forth in Exhibit
      A
      without
      a proportionate increase in the Net Revenue Interest for the applicable Lease;
      and (F) conventional rights of reassignment prior to abandonment. For the
      avoidance of doubt, the terms and provisions of the Leases and the Lease Option
      Agreement shall constitute Permitted Encumbrances.

    

    (bb) "Person"
      means any individual, firm, corporation, partnership, joint venture, trust,
      unincorporated organization, Governmental Authority, or other entity or
      organization.

     

    (cc) "Post-Closing
      Defect Notice Date" shall be as defined in Section 5.6.

     

    (dd) "PRCT
      Indemnified Parties" shall be as defined in Section 10.2.

    

    (ee) "PRCT's
      Interest" means, when used with respect to any Lease or the Lease Option
      Agreement, all of PRCT's right, title and interest therein.

     

    (ff) "PRCT's
      Retained Interest" means PRCT's Interest save, less and except the Subject
      Interests.

     

    (gg) "Preference
      Right" means any right or agreement that enables or may enable any Person to
      purchase or acquire any Subject Interest or any interest therein or portion
      thereof as a result of or in connection with (i) the sale, assignment,
      encumbrance or other transfer of any Subject Interest or any interest therein
      or
      portion thereof or (ii)

     

     

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    the
      execution or delivery of this Agreement or any Assignment or the consummation
      or
      performance of the terms and conditions contemplated by this Agreement or any
      Assignment.

     

            (hh) "Purchase
      Price" shall be as defined in Section 3.1.

     

       
    (ii) "Related
      Agreements" shall mean the Assignments, the Initial Operating Agreement and
      the
      Exploration Agreement.

     

           
      (jj) "Subject
      Interests" means an undivided seventy-five percent (75%) interest in and to
      PRCT's Interest in the Leases and the Lease Option Agreement.

     

           
      (kk) "Subject
      Lands" means (i) the lands covered by the Leases and (ii) all lands now or
      hereafter pooled or unitized with the lands described in clause (i) above or
      with portions thereof.

     

           
      (ll) "Third
      Party Liabilities" means any Covered Liabilities to the extent the same arise
      out of or result from any claim, demand or cause of action (or threatened cause
      of action) which is at any time made, asserted or threatened against a Meridian
      Indemnified Party by a Person which is not a Meridian Indemnified Party or
      an
      Affiliate of a Meridian Indemnified Party.

     

    (mm) "Title
      Defect" shall be as defined in Section 5.7.

     

    (nn) "Title
      Defect Amount" shall be as defined in Section 5.8.

     

    (oo) "Working
      Interest" means, with respect to any Lease, an interest (expressed as a
      percentage or decimal fraction) in and to such Lease and all rights and
      obligations of every kind and character appurtenant thereto, or arising
      therefrom, without regard to any royalties, overriding royalties or other
      encumbrances or charges against production
      therefrom, insofar as such interest is burdened with the obligations to bear
      and pay
      costs
      and expenses attributable to the maintenance, development and operation of
      the
      leasehold interest in Hydrocarbons in and under the Subject Lands covered by
      such Lease.

    

    1.2 References,
      Gender, Number.
      All
      references in this Agreement to an "Article," "Section," or "subsection" shall
      be to an Article, Section or subsection of this Agreement, unless the context
      requires otherwise. Unless the context otherwise requires, the words "this
      Agreement," "hereof," "hereunder," "herein," "hereby," or words of similar
      import shall refer to this Agreement as a whole and not to a particular Article,
      Section, subsection, clause or other subdivision hereof. Whenever the context
      requires, the words used herein shall include the masculine, feminine and neuter
      gender, and the singular and the plural. The word "including" means "including
      without limitation".

     

    

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    ARTICLE
      II

    AGREEMENT
      TO CONVEY

     

    Subject
      to the terms and conditions of this Agreement, PRCT agrees to assign and
      convey
      to
      Meridian, and Meridian agrees to acquire from PRCT, the Subject
      Interests.

    

    ARTICLE
      III

    CONSIDERATION
      AND PAYMENT

     

    3.1 Consideration.
      The
      consideration for the assignment and conveyance of the Subject Interests is
      Three Million Nine Hundred Fifty-Three Thousand Seven Hundred Eighty-Five and
      No/100 Dollars ($3,953,785.00) (the "Purchase Price").

    

    3.2 Payment.
      The
      Purchase Price provided for in Section 3.1 shall be paid by Meridian to PRCT
      at
      Closing by wire transfer of immediately available funds to Whitney National
      Bank, River Oaks Branch, Houston, Texas ABA 113000968 FAO: Petro Resources
      Corporation Account Number 7502-75588.

    

    ARTICLE
      IV

    REPRESENTATIONS
      AND WARRANTIES

     

    4.1
      Representations
      and Warranties of PRCT.
      PRCT
      represents and warrants to Meridian as of the date hereof as
      follows:

     

    (a) Organization
      and Qualification.
      PRCT is
      a corporation duly organized, validly existing and in good standing under the
      laws of the State of Delaware and in the State of Texas, doing business as
      PRCT,
      Inc., and has the requisite corporate power to carry on its business as it
      is
      now being conducted. PRCT is duly qualified or licensed to do business, and
      is
      in good standing, in each jurisdiction in which the character of the property
      or
      assets owned, leased or operated by it, or the nature of the business conducted
      by it, makes such qualification or licensing necessary and the failure so to
      qualify or be licensed would have a material adverse effect on the transactions
      or performance contemplated under this Agreement.

     

    (b) Non-Foreign
      Status.
      PRCT is
      not a "foreign person" within the meaning of the Internal Revenue Code of 1986,
      as amended (the "Code"), Sections 1445 and 7701.

    

    (c) No
      Investment Company.
      PRCT is
      not (a) an investment company or a company controlled by an investment company
      within the meaning of the Investment Company Act of 1940, as amended, or (b)
      subject in any respect to the provisions of that Act.

     

    (d) Authority.
      PRCT has
      all requisite corporate power and authority to execute and deliver this
      Agreement and to perform its obligations under this Agreement. The execution,
      delivery and performance of this Agreement and the transactions contemplated
      hereby have been duly and validly authorized by all requisite corporate action
      on the part of PRCT.

     

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

           
      (e) Enforceability. This
      Agreement constitutes a valid and binding agreement of PRCT enforceable against
      it in accordance with its terms, subject to:

     

           
      (i) applicable
      bankruptcy, insolvency, reorganization, moratorium and other similar laws of
      general application with respect to creditors,

     

    (ii) general
      principles of equity, and

    

    (iii) the
      powers of a court to deny enforcement of remedies generally based upon public
      policy.

     

    (f) No
      Conflict or Violation.
      Neither
      the execution and delivery of this Agreement nor the consummation of the
      transactions and performance of the terms and conditions contemplated hereby
      by
      PRCT will:

    

    (i) conflict
      with or result in any breach of any provision of the certificate of
      incorporation or bylaws (or other similar governing documents) of PRCT;
      or

     

    (ii) be
      rendered void or ineffective by or under the terms, conditions or provisions
      of any agreement, instrument or obligation to which PRCT is a party
      or
      is
      subject or by which any of its properties or assets are bound;

     

    provided
      that, the consents and waivers of third Persons expressly described and set
      forth in Section 4.1(f) are obtained as provided herein.

     

    (g) Consents.
      Except
      for the consents and notifications expressly described and set forth in
Schedule
      4.1(f),
      and subject to obtaining, satisfying or complying with any Permits, no consent,
      approval, authorization or permit of, or filing with or notification to, any
      Person is required for or in connection with the execution and delivery of
      this
      Agreement by PRCT or for or in connection with the consummation of the
      transactions and performance of the obligations of PRCT hereunder.

    

    (h) Actions;
      Orders.

     

    (i) There
      are
      no Actions pending or, to the knowledge of PRCT, threatened against PRCT or
      any
      Affiliate of PRCT which relate to the Leases or the Lease Option Agreement
      or
      the transactions contemplated by this Agreement.

     

    (ii) Except
      for orders of general applicability to oil and gas operators in Texas, and
      except for Permits, there is no judgment or outstanding order, injunction,
      decree or award rendered by any Governmental Authority by which PRCT or any
      Affiliate of PRCT is bound and which relates to the Leases or the Lease Option
      Agreement or the transactions contemplated by this Agreement.

     

    (i) Brokerage
      Fees and Commissions. PRCT has not incurred any obligation or entered
      into any agreement for any investment banking, brokerage or

     

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    

     

    finder's
      fee or commission in respect of the transactions contemplated by this
      Agreement
      for
      which Meridian shall incur any liability.

    

    (j) Compliance
      with Leases; Status of Operations.
      Except
      for Permitted Encumbrances,

    

    (i) the
      Leases and the Lease Option Agreement have not been amended or
      modified;

    

    (ii) to
      the
      actual knowledge of PRCT, there are no violations or breaches
      thereof by PRCT or existing facts or circumstances which upon notice
      or
      the
      passage of time or both will constitute a violation or breach thereof by
      PRCT;

    

    (iii) no
      notice
      of any alleged default or non-compliance by PRCT with respect to the Leases
      or
      the Lease Option Agreement or operations with respect thereto has been received
      by PRCT or any Affiliate of PRCT; and

    

    (iv) PRCT
      is
      not participating in any discussions or negotiations regarding amendment or
      modification of the Leases or the Lease Option Agreement.

    

    Neither
      PRCT nor any of its Affiliates has conducted or caused to be conducted any
      drilling or other operations on the Subject Lands and, to PRCT's knowledge,
      no
      third Person has conducted any such operations on the Subject Lands under the
      terms of any of the Leases.

    

    (k) Preference
      Rights.
      Neither
      PRCT nor any Affiliate of PRCT has entered into any agreement that makes the
      Leases or the Lease Option Agreement subject to any Preference Rights and
      neither PRCT nor any Affiliate of PRCT is bound by any Preference Right
      affecting any of the Leases or the Lease Option Agreement, other than this
      Agreement, the Exploration Agreement and the Initial Operating
      Agreement.

    

    (l) Contracts
      and Leases.
      Set
      forth in Exhibit A is a true and correct description of each contract,
      agreement, or similar arrangement entered into by PRCT or its Affiliates to
      which any of the Leases is subject which:

    

    (i) is
      a
      contract for the sale, purchase, processing or transportation of, or creates
      a
      purchase option, right of first refusal or call on, any Hydrocarbons produced
      from or attributable to the Subject Lands or Leases;

    

    (ii) creates
      any area of mutual interest with respect to the acquisition by PRCT or its
      assigns of any interest in any Hydrocarbons, lands or assets;

     

    (iii) creates
      or evidences any Preference Right affecting any Lease or interest therein,
      whether or not applicable to the transactions contemplated by this Agreement;
      or

    

    (iv) creates
      or evidences a joint operating agreement, unitization agreement, pooling
      agreement, farmout agreement, farmin agreement,

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

     

    participation
      agreement, joint venture agreement, partnership agreement or similar
      agreement.

    

    (m) Tax
      Partnerships.
      The
      Leases are not subject to any tax partnership agreement or provisions requiring
      a partnership income tax return to -be filed under Subchapter K of Chapter
      1 of
      Subtitle A of the Code.

     

    (n) Bankruptcy.
      There
      are no bankruptcy, reorganization or arrangement proceedings pending against,
      being contemplated by, or, to the knowledge of PRCT, threatened against
      PRCT.

     

    (o) PRCT's
      Knowledge.
      PRCT has
      no actual knowledge of any fact which results in any representation or warranty
      of Meridian in Section 4.2 being breached. If after Closing PRCT obtains
      knowledge of any fact which results in any representation or warranty of
      Meridian in Section 4.2 being breached, PRCT will promptly furnish Meridian
      written notice thereof.

    

    All
      representations and warranties of PRCT contained in this Agreement and the
      special warranty of title set forth in the Assignments are exclusive, and are
      given in lieu of all other representations and warranties, express, implied
      or
      statutory.
      THERE
      ARE NO COVENANTS, REPRESENTATIONS OR WARRANTIES THAT EXTEND BEYOND THE FACE
      OF
      THIS AGREEMENT. THE EXPRESS COVENANTS, REPRESENTATIONS AND WARRANTIES OF PRCT
      CONTAINED IN THIS AGREEMENT ARE EXCLUSIVE AND ARE IN LIEU OF, AND PRCT EXPRESSLY
      DISCLAIMS AND NEGATES, AND MERIDIAN HEREBY WAIVES, ALL OTHER COVENANTS,
      REPRESENTATIONS AND WARRANTIES, EXPRESS, IMPLIED, STATUTORY OR
      OTHERWISE.

    

    AS
      EXAMPLES AND FOR THE AVOIDANCE OF DOUBT, BUT WITHOUT LIMITATION OF THE
      FOREGOING, EXCEPT AS EXPRESSLY PROVIDED IN SECTION 4.1 OF THIS AGREEMENT AND
      THE
      SPECIAL WARRANTY OF TITLE TO THE SUBJECT INTERESTS CONTAINED IN THE ASSIGNMENT,
      THE SUBJECT INTERESTS SHALL
      BE
      CONVEYED AND ACCEPTED PURSUANT HERETO WITHOUT ANY OTHER
      COVENANT, REPRESENTATION OR WARRANTY, WHETHER EXPRESS, IMPLIED, STATUTORY OR
      OTHERWISE, WITH RESPECT TO (A) THE QUANTITY, QUALITY, CONDITION, SIZE, WEIGHT,
      SERVICEABILITY, CONFORMITY TO SAMPLES OF MODELS, (B) ANY OTHER ASPECT OR
      CONDITION OF THE SUBJECT INTERESTS, ALL OF WHICH SHALL BE CONVEYED BY PRCT
      TO
      MERIDIAN AS IS, WHERE IS, AND WITH ALL FAULTS AND DEFECTS AND IN THEIR PRESENT
      CONDITION AND STATE OF REPAIR AND WITHOUT ANY COVENANTS, REPRESENTATIONS OR
      WARRANTIES, WHATSOEVER OF MERCHANTABILITY OR OF FITNESS FOR A PARTICULAR
      PURPOSE, (C) THE ACCURACY OR COMPLETENESS OF ANY DATA, REPORTS, RECORDS,
      PROJECTIONS, INFORMATION OR MATERIALS NOW, HERETOFORE OR HEREAFTER FURNISHED
      OR
      MADE AVAILABLE TO MERIDIAN BY, ON BEHALF OF OR AT THE DIRECTION OF PRCT IN
      CONNECTION WITH THIS AGREEMENT INCLUDING THAT RELATIVE TO PRICING ASSUMPTIONS,
      QUALITY, QUANTITY OR VOLUMES OF HYDROCARBON RESERVES (IF ANY) ATTRIBUTABLE
      TO
      THE SUBJECT INTERESTS OR THE ABILITY OR POTENTIAL OF THE SUBJECT

     

    

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    INTERESTS
      OR THE SUBJECT LANDS TO PRODUCE HYDROCARBONS, (D) THE PHYSICAL AND ENVIRONMENTAL
      CONDITION OF THE SUBJECT LANDS, BOTH SURFACE AND SUBSURFACE, INCLUDING BUT
      NOT
      LIMITED TO CONDITIONS SPECIFICALLY RELATED TO THE PRESENCE, RELEASE OR DISPOSAL
      OF HAZARDOUS SUBSTANCES, SOLID WASTES, ASBESTOS AND OTHER MAN MADE FIBERS,
      OR
      NATURALLY OCCURRING RADIOACTIVE MATERIALS, IT BEING AGREED BY MERIDIAN THAT
      ANY
      AND ALL SUCH DATA, RECORDS, REPORTS, PROJECTIONS, INFORMATION AND OTHER
      MATERIALS (WRITTEN OR ORAL) FURNISHED OR OTHERWISE MADE AVAILABLE OR DISCLOSED
      TO MERIDIAN HAVE BEEN AND WILL BE PROVIDED TO MERIDIAN AS A CONVENIENCE AND
      SHALL NOT CREATE OR GIVE RISE TO ANY LIABILITY OF OR AGAINST PRCT AND ANY
      RELIANCE ON OR USE OF THE SAME SHALL BE AT MERIDIAN'S SOLE RISK. TO THE MAXIMUM
      EXTENT PERMITTED BY LAW, (E) TITLE TO OR THE OWNERSHIP OR OPERATION OF THE
      SUBJECT INTERESTS OR ANY
      PART
      THEREOF AND (F) THE ACCURACY OR COMPLETENESS OF ANY REPORT, ASSESSMENT OR OTHER
      MATERIAL PURPORTING TO ASSESS OR ALLOCATE PRODUCTION, RESERVES OR VALUE TO
      ANY
      SUBJECT INTERESTS OR THE SUBJECT LANDS. PRCT AND MERIDIAN ACKNOWLEDGE THAT
      THE
      WAIVERS AND DISCLAIMERS IN THIS SECTION ARE CONSPICUOUS.

    

    4.2 Representations
      and Warranties of Meridian.
      Meridian
      represents and warrants to PRCT
      as
      of the
      date hereof as follows:

    

    (a) Organization
      and Qualification.
      Meridian
      is a corporation duly organized, validly existing and in good standing under
      the
      laws of the State of Delaware, and has the requisite corporate power to carry
      on
      its business as it is now being conducted. Meridian is duly qualified or
      licensed to do business, and is in good standing, in each jurisdiction in which
      the character of the property or assets owned, leased or operated by it, or
      the
      nature of the business conducted by it, makes such qualification or licensing
      necessary and the failure so to qualify or be licensed would have a material
      adverse effect on the transactions or performance contemplated under this
      Agreement.

    

    (b) Authority.
      Meridian
      has all requisite corporate power and authority to execute and deliver this
      Agreement and to perform its obligations under this Agreement. The execution,
      delivery and performance of this Agreement and the transactions contemplated
      hereby have been duly and validly authorized by all requisite corporate action
      on the part of Meridian.

    

    (c) Enforceability.
      This
      Agreement constitutes a valid and binding agreement of Meridian enforceable
      against it in accordance with its terms, subject to:

    

    (i) applicable
      bankruptcy, insolvency, reorganization, moratorium and other similar laws of
      general application with respect to creditors,

     

    (ii) general
      principles of equity, and

     

     

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

     

    (iii) the
      power
      of a court to deny enforcement of remedies generally based upon public
      policy.

    

    (d) No
      Conflict or Violation.
      Neither
      the execution and delivery of this Agreement nor the consummation of the
      transactions and performance of the terms and conditions contemplated hereby
      by
      Meridian will:

    

    (i) conflict
      with or result in any breach of any provision of the certificate of
      incorporation or bylaws (or other similar governing documents) of Meridian;
      or

    

    (ii) by
      rendered void or ineffective by or under the terms, conditions or provisions
      of
      any agreement, instrument or obligation to which Meridian is a party or is
      subject or by which any of its properties or assets are bound.

    

    (e) Consents.
      Subject
      to obtaining, satisfying or complying with any Permits, no consent, approval,
      authorization or permit of, or filing with or notification to, any Person is
      required for or in connection with the execution and delivery of this Agreement
      by Meridian or for or in connection with the consummation of the transactions
      and performance of the obligations of Meridian hereunder.

    

    (f) Actions;
      Orders.

    

    (i) There
      are
      no Actions pending or, to the knowledge of Meridian, threatened against Meridian
      or any Affiliate of Meridian which relate to the transactions contemplated
      by
      this Agreement.

    

    (ii) Except
      for orders of general applicability to oil and gas operators in the State of
      Texas, and except for Permits, there is no judgment or outstanding order,
      injunction, decree or award rendered by any Governmental Authority by which
      Meridian or any Affiliate of Meridian is bound and which relates to the
      transactions contemplated by this Agreement.

    

    (g) Brokerage
      Fees and Commissions.
      Meridian
      has not incurred any obligation or entered into any agreement for any investment
      banking, brokerage or finder's fee or commission in respect of the transactions
      contemplated by this Agreement for which PRCT shall incur any
      liability.

    

    (h) Independent
      Evaluation.
      Meridian
      acknowledges that it is an experienced and knowledgeable investor in the oil
      and
      gas business, and the business of purchasing, owning, developing and operating
      oil and gas properties such as the Subject Interests. Meridian represents and
      acknowledges that it has had access to the Subject Interests, the Leases, the
      Lease Option Agreement and the lands subject thereto, the officers, and
      employees of PRCT, and to the books, records and files of PRCT relating to
      the
      Subject Interests, the Leases, the Lease Option Agreement and the lands subject
      thereto. In making the decision to enter into this Agreement and to consummate
      the transactions contemplated hereby, Meridian (i) has relied solely upon its
      own independent due diligence investigation of the Subject Interests, the
      Leases, the Lease

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

     

    Option
      Agreement and the lands subject thereto and upon the representations,
      warranties,
      covenants and agreements set forth in this Agreement, and (ii) has been (or
      has
      had the opportunity
      to be) advised by and has relied solely on its own expertise and its own
      legal,
      tax,
      operations, reservoir engineering and other professional counsel and advisors
      concerning this transaction, the Subject Interests, the Leases, the Lease Option
      Agreement and the lands subject thereto, and the value thereof. In addition,
      Meridian acknowledges that in connection with any environmental or title review,
      Meridian has been advised by and shall rely solely on its own expertise, its
      own
      legal counsel and any advisors or experts concerning matters relating to title,
      environmental compliance and liabilities
      and upon the representations, warranties, covenants and agreements set forth
      in
      this
      Agreement.

    

    (i) Qualification.
      As of
      Closing Meridian is, and thereafter shall continue to be,
      qualified with all applicable Governmental Authorities to own and operate the
      Leases
      and the
      lands covered thereby, including any bonding requirements of such Governmental
      Authorities.

    

    (j) Securities
      Laws.
      Meridian
      is acquiring the Subject Interests for its own account and not with a view
      to,
      or for offer of resale in connection with, a distribution thereof, within the
      meaning of the Securities Act of 1933, 15 U.S.C.
      §
77a
      et
      seq., and
      any
      other rules, regulations, and Laws pertaining to the distribution of securities.
      Meridian has not sought or solicited, nor is Meridian participating with,
      investors, partners or other third parties in order to fund the Purchase Price
      and to close this transaction, and all funds used by Meridian in connection
      with
      this transaction are Meridian's own funds.

    

    (k) No
      Holding Company.
      Meridian
      is not (a) a "holding company," or a "subsidiary company" of a "holding
      company," or an "affiliate" of a "holding company" or of a "subsidiary company"
      of a "holding company," or a "public utility company" within the meaning of
      the
      Public Utility Holding Company Act of 1935, as amended, or (b) subject in any
      respect to the provisions of that Act, other than Section 9(a)(2)
      thereof,

    

    (l) Funds.
      Meridian
      has immediately available funds to enable Meridian to pay in full the Purchase
      Price as herein provided and otherwise to perform its obligations under this
      Agreement and the Exploration Agreement.

    

          
      (m) Bankruptcy.
      There
      are no bankruptcy, reorganization or arrangement proceedings pending against,
      being contemplated by, or, to the knowledge of Meridian, threatened against
      Meridian.

    

    (n) Meridian's
      Knowledge.
      Meridian
      has no actual knowledge of any fact which results in any representation or
      warranty of PRCT in Section 4.1 being breached. If after Closing Meridian
      obtains knowledge of any fact which results in any representation or warranty
      of
      PRCT in Section 4.1 being breached, Meridian will promptly furnish PRCT written
      notice thereof.

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    ARTICLE
      V

    COVENANTS
      OF PRCT AND MERIDIAN

     

    5.1 Assignments.
      Upon
      the
      terms and subject to the conditions of this Agreement, at the Closing, PRCT
      and
      Meridian shall execute and deliver Assignments of the Subject Interests
      substantially in the forms attached hereto as Exhibits
      B-1 and B-2
      (the
      "Assignments"). The Assignments delivered to Meridian pursuant to this Agreement
      shall include a pro rata share (based on the percentage interest assigned)
      of
      PRCT's interest in and obligations under all agreements affecting such Subject
      Interests which are described in Exhibit
      A
      insofar
      as the same are attributable to the period after the effective date of such
      Assignment.

    

    5.2 Data
      and Information.

     

    (a) Lease
      and Land Information.
      Immediately following the execution of this Agreement, Meridian shall have
      the
      right from time to time, without charge, to examine and copy the Leases and
      the
      Lease Option Agreement and any and all lease and land information, summaries
      and
      plats describing the Leases and the Lease Option Agreement and all title
      opinions and reports and other title information relating thereto in PRCT's
      possession or control that have not been previously delivered to
      Meridian.

     

    (b) Geological
      and Geophysical Data.
      Immediately following the execution of this Agreement, Meridian shall have
      the
      right from time to time, without charge, to review and analyze all of PRCT's
      proprietary geological and geophysical data and information, and evaluations
      and
      interpretations thereof, and all well logs and information, relating to the
      AMI
      or to lands adjacent to any of the AMI insofar as any such data or information
      relating to such adjacent lands also relates to the AMI, to the full extent
      that
      PRCT has the right to make such data and information available to Meridian
      under
      the provisions of any relevant license or agreement through which PRCT acquired
      possession of such data or information and may do so without violating any
      other
      legal constraints or legal obligations. MERIDIAN
      UNDERSTANDS AND AGREES THAT PRCT MAKES NO WARRANTIES OR REPRESENTATIONS, EXPRESS
      OR IMPLIED, AS TO THE ACCURACY, COMPLETENESS, MERCHANTABILITY, FITNESS FOR
      ANY
      PARTICULAR PURPOSE OR CONDITION OF THE INFORMATION MADE AVAILABLE TO MERIDIAN
      PURSUANT TO THIS SUBSECTION OR OF ANY GEOLOGICAL, GEOPHYSICAL, ENGINEERING,
      ECONOMIC OR OTHER INTERPRETIVE DATA OTHERWISE MADE AVAILABLE BY PRCT TO MERIDIAN
      PURSUANT TO THIS AGREEMENT.
      Immediately following the execution of this Agreement, PRCT shall have the
      right
      from time to time, without charge, to review and analyze all of Meridian's
      proprietary geological and geophysical data and information, and evaluations
      and
      interpretations thereof, and all well logs and information, relating to the
      AMI
      or to lands adjacent to any of the AMI insofar as any such data or information
      relating to such adjacent lands also relates to the AMI, to the full extent
      that
      Meridian has the right to make such data and information available to PRCT
      under
      the provisions of any relevant license or agreement through which Meridian
      acquired possession of such data or information and may do so without violating
      any other legal constraints or legal obligations. PRCT
      UNDERSTANDS AND AGREES THAT MERIDIAN MAKES NO WARRANTIES

     

     

    
      
         

      

      
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    OR
      REPRESENTATIONS, EXPRESS OR IMPLIED, AS TO THE ACCURACY, COMPLETENESS,
      MERCHANTABILITY, FITNESS FOR ANY PARTICULAR PURPOSE OR CONDITION OF THE
      INFORMATION MADE AVAILABLE TO PRCT PURSUANT TO THIS SUBSECTION OR OF ANY
      GEOLOGICAL, GEOPHYSICAL, ENGINEERING, ECONOMIC OR OTHER INTERPRETIVE DATA
      OTHERWISE MADE AVAILABLE BY MERIDIAN TO PRCT PURSUANT TO THIS
      AGREEMENT.

    

    5.3 Confidentiality.
      All
      data, information and reports furnished or acquired by either Party under this
      Agreement shall be kept confidential, and each Party agrees to exercise
      reasonable care and precautions to prevent the publication, dissemination or
      disclosure of any such data, information and reports or copies thereof, to
      any
      third Person whomsoever; provided, however, that each Party shall have the
      right
      to make such data, information and reports or copies thereof available to
      Governmental Authorities, prospective purchasers of leasehold or other
      interests in Subject Lands or institutional lenders providing financing to
      such
      Party, to such
      Party's
      consultants for evaluation purposes, to such Party's Affiliates and to such
      Party's successor by merger or reorganization, provided that permitted
      disclosures shall be made in such a way as to prevent further disclosure to
      the
      greatest extent reasonably possible. The foregoing obligations of
      confidentiality and non-publication, non-dissemination and non-disclosure shall
      not apply to (i) information known to the industry or the public at the time
      of
      disclosure or that subsequently becomes known to the industry or the public
      through no fault of the receiving Party, (ii) disclosure that based on the
      advice of counsel to the disclosing Party is required to be disclosed to comply
      with any Law, any rule of any securities exchange on which the disclosing Party
      or any Affiliate of the disclosing Party is listed or the terms of any of the
      Leases or AMI Leases.

    

    5.4 Best
      Efforts.
      Subject
      to the other terms and conditions of this Agreement, PRCT and
      Meridian each agrees to use its best efforts to take, or cause to be taken,
      all
      actions and to do,
      or cause
      to be done, all things necessary, proper or advisable to consummate and make
      effective as promptly as practicable the transactions contemplated by this
      Agreement and to cooperate with the other in connection with the foregoing,
      including using its best efforts (a) to obtain all consents and file all notices
      set forth in Schedule
      4.1(f).
      The
      Parties' respective obligations to use best efforts shall not require or
      obligate any Party (1) to pay any penalty, premium or consideration to obtain
      any waiver, consent, approval or election, (2) to modify its rights or
      obligations under any existing agreement, lease or other contract, or (3) to
      violate any applicable Law.

    

    5.5
      Area
      of Mutual Interest.

    

    (a) General.
      An area
      of mutual interest among the Parties is hereby established consisting of all
      the
      lands situated in Motley and Floyd Counties, Texas (the "AMI"), In the event
      any
      oil and gas leasehold interests, fee interest, mineral interest (including
      royalty, overriding royalty, executive rights and non-participating mineral
      interests) or contractual rights to earn or acquire any such interests are
      acquired by either Party, by purchase, assignment or otherwise, in lands lying
      within the AMI following the date of this Agreement and during the time this
      area of mutual interest provision is in force, the Party acquiring such interest
      shall give written notice of such acquisition to the

     

    

     

    
      
         

      

      
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    other
      Party identifying the interest acquired and specifying the cost of such
      acquisition. The Party receiving such notice shall have the right, by giving
      written notice to the acquiring Party within fifteen (15) days (or forty-eight
      (48) hours if there is a well drilling in the area which will affect the value
      of the interest acquired) after receipt of notice of such acquisition, to
      purchase and acquire an undivided interest in the acquired interest. Each Party
      shall be entitled to acquire an interest in the proportion that such Party's
      interest in the Leases bears to the total interest of the Parties in the Leases,
      being an undivided seventy five percent (75%) for Meridian and an undivided
      twenty five percent for PRCT (25%). The election to participate in the
      acquisition must be accompanied by payment of such participating Party's
      proportionate part of the actual costs of such acquisition, and further the
      agreement of such Party to bear its proportionate part of the obligations in
      connection with such acquisition (including, subject to the provisions of the
      Exploration Agreement, the costs of drilling, if drilling is necessary to earn
      the acreage sought to be acquired). In the event a part of the consideration
      concerning the cost of acquisition requires the drilling of an oil or gas well
      prior to earning an assignment of any oil or gas leasehold or other interests,
      for the purpose of this paragraph it shall be considered that such oil and
      gas
      leasehold or other interests have been acquired and the notice to the
      non-acquiring Party shall be made as soon as the agreement to acquire the same
      has been executed. If such Party receiving such notice timely elects to purchase
      and acquire such undivided interest, the acquiring Party shall transfer such
      undivided interest to such other Party by assignment without warranty of title,
      either express or implied, except as to claims of all persons claiming or to
      claim the same or any part thereof by, through or under the assigning Party.
      Failure by any Party to respond within said fifteen (15) day (or 48-hour) period
      in the manner specified shall constitute an election by such Party not to
      acquire an interest in the acquired interest. In the case of an acquired
      interest in which both Parties participate, such acquired interest shall be
      added to and included within the Contract Area under the Operating Agreement
      and
      all terms and provisions of the Operating Agreement shall be applicable to
      such
      interest and shall govern the exploration, development and operation of such
      interest. This area of mutual interest agreement shall continue in force for
      a
      period of five (5) years after the Closing Date. The provisions of this Section
      5.5(a) shall not apply to an acquisition by one Party of the interest of another
      Party in the Leases or any AMI Leases.

    

    (b) Occidental.
      Mention
      is made that Meridian is presently negotiating with Occidental Petroleum
      Corporation for the purchase of certain oil and gas leasehold interests in
      lands
      situated within the AMI. For the avoidance of doubt, it is expressly understood
      and agreed that any such interests so acquired by Meridian shall be subject
      to
      the provisions of this Section 5.5.

    

    (c) Incorporation
      of AMI in Operating Agreement.
      Each
      Operating Agreement shall include or reference the rights and obligations of
      the
      Parties under Section 5.5 of this Agreement.

    

    5.6 Post-Closing
      Title Review.

    

    (a) After
      Closing, Meridian shall promptly but not later than sixty (60) days following
      the original Closing Date (the "Post-Closing
      Defect Notice Date")
      give
      PRCT

     

    

     

    
      
         

      

      
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    written
      notice of matters discovered by Meridian after Closing which, in Meridian's
      opinion, constitute Title Defects and which Meridian intends to assert as a
      Title Defect with respect to any Lease or portion thereof pursuant to this
      Section 5.6. In such event, PRCT shall have the right to attempt to cure or
      remedy any such Title Defects at PRCT's sole cost and expense, and if Title
      Defects are cured or remedied to Meridian's reasonable satisfaction prior to
      the
      expiration of thirty (30) days after the Post-Closing Defect Notice Date, then
      the Purchase Price shall not be reduced in respect of such cured or remedied
      Title Defects. If, however, any such Title Defects remain uncured or unremedied
      thirty (30) days following the Post-Closing Defect Notice Date, then (subject
      to
      Section 5.9) the Purchase Price shall be reduced by an amount equal to the
      aggregate of all Title Defect Amounts with respect to any such Title Defects
      that then remain uncured or unremedied. To effect such reduction, PRCT shall
      (subject to Section 5.9), within two (2) Business Days following the expiration
      of such thirty (30) day period, reimburse Meridian, by wire transfer of
      immediately available funds, to a bank account designated by Meridian in writing
      to PRCT prior to the expiration of such thirty (30) day period, in an amount
      equal to the aggregate of all Title Defect Amounts with respect to such uncured
      or unremedied Title Defects. In the event any portion of the Purchase Price
      is
      reduced in respect of any Title Defect resulting in a total failure of
      Defensible Title to the Subject Interests related to a particular Lease or
      portion thereof, then promptly following a request therefor by PRCT, and
      provided Meridian shall have received reimbursement from PRCT, as above
      provided, in respect of such Title Defect, Meridian shall execute and deliver
      to
      PRCT a quitclaim, in recordable form, of any and all right, title
      and
      interest of Meridian in and to such Subject Interest, free and clear of any
      burdens
      or
      encumbrances created by Meridian.

    

    (b) In
      the
      event that the Title Defects that are asserted by Meridian pursuant to Section
      5.6(a) that constitute Title Defects that are not cured or remedied by PRCT
      to
      Meridian's reasonable satisfaction prior to the expiration of such thirty (30)
      day period provided for in Section 5.6(a) affect more than ten percent (10%)
      of
      the net mineral acres covered by the Leases, then Meridian shall have the right,
      at its sole option, exercisable by giving written notice to PRCT prior to the
      expiration of fifteen (15) days following such thirty (30) day period, (i)
      to
      re-assign to PRCT the Subject Interests, without warranty of title, either
      express or implied (except for claims of any person or persons lawfully claiming
      or to claim the same or any part thereof by, through or under Meridian) and
      otherwise upon terms and conditions substantially as set forth in the
      Assignments to be delivered by PRCT to Meridian as provided herein, and (ii)
      to
      receive back from PRCT the entire amount of the Purchase Price (or adjusted
      Purchase Price, as the case may be) that was paid by Meridian to PRCT at the
      Closing pursuant to this Agreement.

    

    (c) In
      the
      event that the Title Defects asserted by Meridian pursuant to Section 5.6(a)
      that constitute Title Defects that are not cured or remedied by PRCT to
      Meridian's reasonable satisfaction prior to the expiration of such thirty (30)
      day period provided for in Section 5.6(a) affect more than twenty percent (20%)
      of the net mineral acres covered by the Leases, then PRCT shall have the right,
      at its sole option, exercisable by giving written notice to Meridian prior
      to
      the expiration of fifteen (15) days following such thirty (30) day period,
      (i)
      to require that Meridian re-assign to PRCT the Subject Interests, without
      warranty of title, either express or implied (except for claims of
      any

     

     

    
      
         

      

      
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    person
      or
      persons lawfully claiming or to claim the same or any part thereof by, through
      or under Meridian) and otherwise upon terms and conditions substantially as
      set
      forth in the Assignments to be delivered by PRCT to Meridian as provided herein,
      for a purchase price equal to the entire amount of the Purchase Price (or
      adjusted Purchase Price, as the case may be) that was paid by Meridian to PRCT
      at the Closing pursuant to this Agreement.

    

    (d)
      In
      the event that either Meridian or PRCT timely exercises the option provided
      for
      in Section 5.6(a) or (b) above, such repurchase, assignment and reimbursement
      shall occur at a closing to be held on the fifth (5th)
      Business Day following Meridian's notice to PRCT pursuant to Section 5.6(b)
      or
      PRCT's notice to Meridian pursuant to Section 5.6(c), as the case may be, at
      the
      same place as the Closing unless otherwise mutually agreed by the Parties.
      Upon
      any such closing, this Agreement, the Exploration Agreement and each Applicable
      Operating Agreement shall thereupon terminate and the Parties shall be released
      from any and all liabilities and obligations hereunder or
      thereunder.

    

    5.7
       Determination
      of Title Defects.
      A Lease
      or portion thereof shall be deemed to have a "Title Defect" if any one or
      more of the following statements is untrue with respect to such Lease or portion
      thereof as of the Closing Date:

    

    (a) PRCT
      has
      Defensible Title thereto.

    

    (b) All
      lease
      bonus, royalties, rentals, Pugh clause payments, shut-in gas payments and other
      payments due with respect to such Lease or portion thereof have been properly
      and timely paid.

    

    (c) PRCT
      is
      not in default (and there exists no event or circumstance which with notice
      or
      the passage of time or both could constitute a default by PRCT) under the terms
      of such Lease.

    

    (d) All
      consents to assignment or notices of assignment, if any, which are applicable
      to
      or must be complied with in connection with the sale, assignment or transfer
      contemplated by this Agreement, or any prior sale, assignment or transfer of
      such Lease or portion thereof, have been obtained and complied
      with.

    

    The
      term
      "Defensible
      Title"
      as used
      herein means, respectively as to the Subject Interest or Subject Interests
      related to a particular Lease or portion thereof, record title to such Subject
      Interest that: (i) entitles PRCT to receive and retain, without suspension,
      reduction or termination, not less than the applicable Net Revenue Interest
      or
      Net Revenue Interests specified for such Subject Interest in Exhibit
      A
      through
      plugging, abandonment and salvage of all wells hereafter producing from or
      attributable to such Subject Interest; (ii) obligates PRCT to bear the costs
      and
      expenses attributable to the maintenance, development, and operation of such
      Subject Interest through plugging, abandonment and salvage of all wells
      hereafter producing from or attributable to such Subject Interest in an amount
      not greater than the applicable Working Interest or Working Interests specified
      for such Subject Interest in Exhibit
      A
      unless
      PRCT's Net

     

    

     

    
      
         

      

      
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    Revenue
      Interest therein is proportionately increased; and (iii) except for Permitted
      Encumbrances, is free and clear of all Liens.

    

    5.8
       Title
      Defect Amount.
      The term
      "Title Defect Amount" means, with respect to any portion of a Lease
      affected by a Title Defect, the sum of Two Hundred Twenty-Five and No/100
      Dollars ($225.00) per net mineral acre of Subject Lands affected by such Title
      Defect.

    

    5.9 Title
      Defect Deductible.
      Notwithstanding anything to the contrary contained in this Agreement, (a) the
      Purchase Price shall not be reduced pursuant to Section 5.6 unless Title Defects
      affect more than two percent (2%) of the aggregate net mineral acres covered
      by
      the Leases, and (b) if Title Defects affect more than two percent (2%) of the
      aggregate net mineral acres covered by the Leases, then any Purchase Price
      reduction provided for herein shall limited to the extent to which the net
      mineral acres affected by such Title Defects exceed two percent (2%) of the
      entire net mineral acres covered by the Leases.

    

    ARTICLE
      VI

    CLOSING
      CONDITIONS

    

    6.1 PRCT's
      Closing Conditions.
      The
      obligation of PRCT to consummate the transactions contemplated hereby is
      subject, at the option of PRCT, to the satisfaction on or prior to the Closing
      Date of all of the following conditions:

    

    (a) Representations,
      Warranties and Covenants.
      The (1)
      representations and warranties of Meridian contained in this Agreement shall
      be
      true and correct in all material respects on and as of the Closing Date, and
      (2)
      covenants and agreements of Meridian to be performed on or before the Closing
      Date in accordance with this Agreement shall have been duly performed in all
      material respects.

    

    (b) Officer's
      Certificate.
      PRCT
      shall have received a certificate dated as of the Closing Date, executed by
      a
      duly authorized officer of Meridian, to the effect that to such officer's
      knowledge the conditions set forth in paragraph (a) of this Section 6.1 have
      been satisfied.

    

    (c) Assignments.
      Meridian
      shall have executed and delivered the Assignments and the Initial Operating
      Agreement prior to or on the Closing Date and complied with its other
      obligations at Closing.

    

    (d) Consents
      and Waivers.
      PRCT
      shall have received a written consent (in form and substance reasonably
      satisfactory to Meridian) executed by each of the third parties mentioned in
      Schedule
      4.1(f),
      consenting to the assignment by PRCT to Meridian of the Leases and/or Lease
      Option Agreement as to which the assignment thereof requires such third party's
      consent or approval.

    

    (e) No
      Action.
      On the
      Closing Date, no suit, action or other proceeding (excluding any such matter
      initiated by PRCT or any of its Affiliates) shall be pending or threatened
      before any court or governmental agency or body of competent jurisdiction
      seeking to enjoin or restrain the consummation of this Agreement or recover
      damages from PRCT resulting therefrom.

     

     

    
      
         

      

      
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    6.2 Meridian's
      Closing Conditions.
      The
      obligation of Meridian to consummate the transactions contemplated hereby is
      subject, at the option of Meridian, to the satisfaction on or prior to the
      Closing Date of all of the following conditions:

    

    (a) Representations,
      Warranties and Covenants.
      The (1)
      representations and warranties of PRCT contained in this Agreement shall be
      true
      and correct in all material respects on and as of the Closing Date, and (2)
      covenants and agreements of PRCT to be performed on or before the Closing Date
      in accordance with this Agreement shall have been duly performed in all material
      respects.

    

    (b) Officer's
      Certificate.
      Meridian
      shall have received a certificate dated as of the Closing Date, executed by
      a
      duly authorized officer of PRCT, to the effect that to such officer's knowledge
      the conditions set forth in paragraph (a) of this Section 6.2 have been
      satisfied.

    

    (c) Assignments.
      PRCT
      shall have executed and delivered the Assignments and
      the
      Initial Operating Agreement prior to or on the Closing Date and complied with
      its
      other
      obligations at Closing.

    

    (d) No
      Action.
      On the
      Closing Date, no suit, action or other proceeding (excluding any such matter
      initiated by Meridian or any of its Affiliates) shall be pending or threatened
      before any court or governmental agency or body of competent jurisdiction
      seeking to enjoin or restrain the consummation of this Agreement or recover
      damages from Meridian resulting therefrom.

    

    (e) Consents
      and Waivers.
      PRCT
      shall have received and furnished to Meridian a written consent (in form and
      substance reasonably satisfactory to Meridian) executed by each of the third
      parties mentioned in Schedule
      4.1(f),
      consenting to the assignment by PRCT to Meridian of the Leases and/or Lease
      Option Agreement as to which the assignment thereof requires such third party's
      consent or approval.

    

    (f) Affidavit
      of Non-foreign Status.
      Meridian
      shall have received an Affidavit of Non-foreign Status, substantially in form
      and substance acceptable to Meridian, which has been properly executed by or
      on
      behalf of PRCT.

    

    6.3 Failure
      to Disclose.
      The
      breach by Meridian of its obligation to give notice to PRCT under Section 4,2(n)
      shall not constitute a failure of the conditions to Closing under Section 6.1.
      From and after Closing, PRCT shall not have any obligation or liability under
      this Agreement for any breach of a representation or warranty by PRCT at Closing
      by reason of any fact or facts of which Meridian had actual knowledge prior
      to
      Closing if and to the extent Meridian breached its obligation to give notice
      of
      such fact or facts to PRCT pursuant to Section 4.2(n). Likewise, the breach
      by
      PRCT of its obligation to give notice to Meridian under Section 4.1(o) shall
      not
      constitute a failure of the conditions to Closing under Section 6.2. From and
      after Closing, Meridian shall not have any obligation or liability under this
      Agreement for any breach of a representation or warranty by Meridian at Closing
      by reason of any fact or facts of which PRCT had knowledge prior to Closing
      if
      and to the extent PRCT breached its obligation to give notice of such fact
      or
      facts to Meridian pursuant to Section 6.2.

     

    

     

    
      
         

      

      
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    ARTICLE
      VII

    CLOSING

    

    7.1 Closing.
      The
      Closing shall be held on the Closing Date at 10:00 a.m., Houston time, at the
      offices of Meridian at 1401 Enclave Parkway, Suite 300, Houston, Texas, or
      at
      such other time or place as PRCT and Meridian may otherwise agree in
      writing.

    

    7.2 PRCT's
      Closing Obligations.
      At
      Closing, PRCT shall execute and deliver, or cause to be executed and delivered,
      to Meridian the following:

    

    (a) The
      Assignments (as provided for in Section 5.1), the Exploration Agreement and
      the
      Initial Operating Agreement;

    

    (b) The
      officer's certificate referred to in Section 6.2(b);

    

    (c) The
      Affidavit of Non-foreign Status referred to in Section 6.2(f); and

    

    (d) Such
      other documents as may be reasonably necessary to convey all the Subject
      Interests to Meridian in accordance with the terms and provisions of this
      Agreement.

    

    At
      Closing, PRCT shall further deliver to Meridian evidence, reasonably
      satisfactory to Meridian, of the timely payment by PRCT of all lease bonuses
      and
      other payments required to make the Leases effective.

    

    7.3 Meridian's
      Closing Obligations.
      At
      Closing, Meridian shall execute and deliver, or cause to be executed and
      delivered, to PRCT the following:

    

    (a) The
      Assignments (as provided for in Section 5. 1), the Exploration Agreement and
      the
      Initial Operating Agreement; and

    

    (b) The
      officer's certificate referred to in Section 6.1(b); and shall pay the Purchase
      Price as provided in Section 3.2.

    

    7.4 Survival.
      Except
      as provided in this Section 7.4, no representations, warranties, covenants
      and
      agreements made herein shall survive the Closing. Each representation, warranty,
      covenant and agreement made herein shall terminate and cease to be of further
      force and effect as of the Closing or such later date after Closing as is
      expressly stipulated in this Section 7.4 for the survival thereof. Following
      the
      Closing or such later date stipulated in this Section 7.4 for the survival
      thereof, such representation, warranty, covenant or agreement shall not form
      the
      basis for or give rise to any claim, demand, cause of action, counterclaim,
      defense, damage, indemnity, obligation or liability which is asserted, claimed,
      made or filed following the Closing or such later date stipulated for survival.
      It is expressly agreed that the terms and provisions of:

     

    

     

    
      
         

      

      
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    (a) Article
      IV (other than Sections 4.1(a), 4.1(b), 4.1(c), 4.1(d), 4. I (e), 4,1(i),
      4.1(o), the last two paragraphs of Section 4.1, Sections 4.2(a), 4.2(b), 4.2(c),
      4.2 (g), 4.2(h), 4.2(i) and 4.2(n)) shall survive the Closing for a period
      of
      one (1) year from the Closing Date, and

    

    (b) Sections
      4.1(a), 4. I (b), 4.1(c), 4.1(d), 4.1(e), 4.1(i), 4.1(o), the last two
      paragraphs of Section 4. 1, Sections 4.2(a), 4.2(b), 4.2(c), 4.2(g), 4.2(h),
      4.2(i), 4.2(n), and this Section 7.4, and Articles V, VIII, IX, X and XI shall
      survive the Closing indefinitely or for such shorter period of time as may
      be
      stipulated in such provisions.

    

    In
      addition, the definitions set forth in Article I of this Agreement or in any
      other provision of this Agreement which are used in the representations,
      warranties, covenants and agreements which survive the Closing pursuant to
      this
      Section 7.4 shall survive the Closing to the extent necessary to give operative
      effect to such surviving representations, warranties, covenants and
      agreements.

    

    ARTICLE
      VIII 

    OPERATIONS

     

    8.1 Operations.
      If the
      Closing occurs, the terms of the Applicable Operating Agreement shall govern
      and
      control all operations conducted upon the Subject Lands covered thereby and
      such
      other matters as are expressly provided for in this Agreement. Except as
      provided in Section 11. 10, in the event of any conflict between the terms
      of
      this Agreement and the Applicable Operating Agreement, the terms of this
      Agreement shall prevail.

    

    ARTICLE
      IX

    DAMAGES

    

    NOTWITHSTANDING
      ANYTHING CONTAINED TO THE CONTRARY IN ANY OTHER PROVISION OF THIS AGREEMENT,
      PRCT AND MERIDIAN AGREE THAT THE RECOVERY OF EITHER PARTY HERETO OF ANY DAMAGES
      SUFFERED OR INCURRED BY IT AS A RESULT OF ANY BREACH BY THE OTHER PARTY OF
      ANY
      OF ITS REPRESENTATIONS, WARRANTIES, COVENANTS OR OBLIGATIONS UNDER THIS
      AGREEMENT SHALL BE LIMITED TO THE ACTUAL DAMAGES SUFFERED OR INCURRED BY THE
      NON-BREACHING PARTY (AND THE INDEMNIFIED PARTIES TO WHICH SUCH OBLIGATIONS
      MAY
      EXTEND UNDER THE TERMS HEREOF) AS A RESULT OF THE BREACH BY THE BREACHING PARTY
      OF ITS REPRESENTATIONS, WARRANTIES, COVENANTS OR OBLIGATIONS HEREUNDER AND
      IN NO
      EVENT SHALL THE BREACHING PARTY BE LIABLE TO THE NON-BREACHING PARTY OR ANY
      INDEMNIFIED PARTY FOR ANY INDIRECT, CONSEQUENTIAL, SPECIAL, EXEMPLARY OR
      PUNITIVE DAMAGES (INCLUDING ANY DAMAGES ON ACCOUNT OF LOST PROFITS OR
      OPPORTUNITIES, BUSINESS INTERRUPTION OR LOST OR DELAYED PRODUCTION) SUFFERED
      OR
      INCURRED BY THE NON-BREACHING PARTY OR ANY INDEMNIFIED PARTY AS A RESULT OF
      THE
      BREACH BY THE BREACHING PARTY OF ANY OF ITS REPRESENTATIONS, WARRANTIES,
      COVENANTS OR OBLIGATIONS HEREUNDER.

     

    

     

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

    ARTICLE
      X

    ASSUMPTION
      AND INDEMNIFICATION

     

    10.1 Indemnification
      by PRCT. FROM AND AFTER THE CLOSING DATE, PRCT SHALL INDEMNIFY AND HOLD HARMLESS
      MERIDIAN AND ITS AFFILIATES, EACH OF THEIR DIRECTORS, OFFICERS, EMPLOYEES AND
      AGENTS, AND EACH OF THE HEIRS, EXECUTORS, SUCCESSORS AND ASSIGNS OF THE
      FOREGOING (COLLECTIVELY THE "MERIDIAN INDEMNIFIED PARTIES") FROM AND AGAINST
      ANY
      AND ALL (I) EXCLUDED LIABILITIES INCURRED BY OR ASSERTED AGAINST ANY OF THE
      MERIDIAN INDEMNIFIED PARTIES , INCLUDING ANY EXCLUDED LIABILITY BASED ON
      NEGLIGENCE, GROSS NEGLIGENCE OR STRICT LIABILITY OF THE MERIDIAN INDEMNIFIED
      PARTY OR ANY OTHER THEORY OF LIABILITY, WHETHER IN LAW (WHETHER COMMON OR
      STATUTORY) OR EQUITY; PROVIDED, HOWEVER, THAT THIS INDEMNITY SHALL NOT COVER
      ANY
      OBLIGATIONS OF ANY OF THE MERIDIAN
      INDEMNIFIED PARTIES WHICH FROM TIME TO TIME EXIST UNDER
      OR PURSUANT TO ANY OF THE RELATED AGREEMENTS AND (II) ANY COVERED LIABILITY
      RESULTING FROM ANY MISREPRESENTATION, BREACH OF WARRANTY OR NONFULFILLMENT
      OF
      ANY COVENANT OR AGREEMENT ON THE PART OF MERIDIAN
      HEREUNDER.

    

    10.2 Indemnification
      by Meridian. FROM AND AFTER THE CLOSING DATE, MERIDIAN SHALL INDEMNIFY AND
      HOLD
      HARMLESS PRCT AND ITS AFFILIATES, EACH OF THEIR DIRECTORS, OFFICERS, EMPLOYEES
      AND AGENTS, AND EACH OF THE HEIRS, EXECUTORS, SUCCESSORS AND ASSIGNS OF THE
      FOREGOING (COLLECTIVELY THE "PRCT INDEMNIFIED PARTIES") FROM AND AGAINST ANY
      AND
      ALL (I) ASSUMED LIABILITIES INCURRED BY OR ASSERTED AGAINST ANY OF THE PRCT
      INDEMNIFIED PARTIES, INCLUDING ANY ASSUMED LIABILITY BASED ON NEGLIGENCE, GROSS
      NEGLIGENCE OR STRICT LIABILITY OF THE PRCT INDEMNIFIED PARTY OR ANY OTHER THEORY
      OF LIABILITY,. WHETHER IN LAW (WHETHER COMMON OR STATUTORY) OR EQUITY; PROVIDED,
      HOWEVER, THAT THIS INDEMNITY SHALL NOT COVER ANY OBLIGATIONS OF ANY OF THE
      PRCT
      INDEMNIFIED PARTIES WHICH FROM TIME TO TIME EXIST UNDER OR PURSUANT TO ANY
      OF
      THE RELATED AGREEMENTS AND (II) ANY COVERED LIABILITY RESULTING FROM ANY
      MISREPRESENTATION, BREACH OF WARRANTY OR NONFULFILLMENT OF ANY COVENANT OR
      AGREEMENT ON THE PART OF PRCT HEREUNDER.

    

    10.3 Third
      Party Claims. If a claim by a third party is made against Meridian Indemnified
      Party or a PRCT Indemnified Party (an "Indemnified
      Party"),
      and
      if such party intends
      to seek indemnity with respect thereto under this Article X such Indemnified
      Party shall promptly
      notify Meridian or PRCT, as the case may be (the "Indemnitor")
      of
      such claims. The Indemnitor
      shall have thirty (30)
      days
      after receipt of such notice to undertake, conduct
      and control,
      through counsel of its own choosing and at its own expense, the settlement
      or
      defense thereof,
      and the Indemnified Party shall cooperate with it in connection
      therewith;
      provided that the
      Indemnitor shall permit the Indemnified Party to participate in such settlement
      or defense

     

    

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

     

    through
      counsel chosen by such Indemnified Party, however, the fees and expenses of
      such
      counsel shall be borne by such Indemnified Party. So long as the Indemnitor,
      at
      the Indemnitor's cost and expense,

    

    (i) has
      undertaken the defense of, and assumed full responsibility for all Covered
      Liabilities with respect to, such claim,

    

    (ii) is
      reasonably contesting such claim in good faith, by appropriate proceedings,
      and

    

    (iii) has
      taken
      such action (including the posting of a bond, deposit or other security) as
      may
      be necessary to prevent any action to foreclose a lien against or attachment
      of
      the property of the Indemnified Party for payment of such claim,

    

    the
      Indemnified Party shall not pay or settle any such claim. Notwithstanding
      compliance by the Indemnitor with the preceding sentence, the Indemnified Party
      shall have the right to pay or settle any such claim, provided that in such
      event it shall waive any right to indemnity therefor by the Indemnitor for
      such
      claim. If, within thirty (30) days after the receipt of the Indemnified Party's
      notice of a claim of indemnity hereunder, the Indemnitor does not notify the
      Indemnified Party that it elects, at the Indemnitor's cost and expense, to
      undertake the defense thereof and assume full responsibility for all Covered
      Liabilities with respect thereto, or gives such notice and thereafter fails
      to
      contest such claim in good faith or to prevent action to foreclose a lien
      against or attachment of the Indemnified Party's property as contemplated above,
      the Indemnified Party shall have the right to contest, settle or compromise
      the
      claim and, to the extent the actions taken by the Indemnified Party in
      contesting, settling or compromising the claim are reasonable and in good faith,
      the Indemnified Party shall not thereby waive any right to indemnity therefor
      pursuant to this Agreement.

     

    10.4 Exclusive
      Remedy.
      After
      Closing, the indemnity provisions of this Article X shall be the sole and
      exclusive remedy of each 'Party for and on account of any breach by the other
      Party of any of such other Party's representations and warranties under this
      Agreement.

    

    ARTICLE
      XI

    MISCELLANEOUS
      PROVISIONS

     

    11.1 Relationship
      of the Parties.
      It is
      not the purpose or intention of the Parties to create, and this Agreement shall
      never be construed as creating, a joint venture, mining partnership or other
      relationship whereby any Party shall be held liable for the acts, either of
      omission or commission, of any other Party hereto.

    

    11.2 Choice
      of Law. THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE
      GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS
      WITHOUT GIVING EFFECT TO PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW RULES
      THAT WOULD DIRECT THE APPLICATION OF THE LAWS OF ANOTHER
      JURISDICTION.

     

    

     

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

    11.3 Jurisdiction;
      Process. EACH PARTY CONSENTS TO PERSONAL JURISDICTION
      IN ANY LEGAL ACTION, SUIT OR PROCEEDING WITH RESPECT TO
      THIS AGREEMENT IN ANY COURT, FEDERAL OR STATE, WITHIN HARRIS COUNTY, TEXAS,
      HAVING SUBJECT MATTER JURISDICTION AND, WITH RESPECT
      TO ANY SUCH CLAIM, EACH PARTY IRREVOCABLY WAIVES, TO THE FULLEST
      EXTENT PERMITTED BY LAW, ANY CLAIM, OR ANY OBJECTION, THAT SUCH PARTY MAY NOW
      OR
      HEREAFTER HAVE, THAT VENUE OR JURISDICTION
      IS NOT PROPER WITH RESPECT TO ANY SUCH LEGAL ACTION, SUIT OR PROCEEDING BROUGHT
      IN SUCH COURT IN HARRIS COUNTY, TEXAS, INCLUDING
      ANY CLAIM THAT SUCH LEGAL ACTION, SUIT OR PROCEEDING BROUGHT IN SUCH COURT
      HAS
      BEEN BROUGHT IN AN INCONVENIENT FORUM AND ANY CLAIM THAT SUCH PARTY IS NOT
      SUBJECT TO PERSONAL JURISDICTION OR SERVICE OF PROCESS IN SUCH HARRIS COUNTY,
      TEXAS FORUM.

    

    11.4 Waiver
      of Jury Trial. EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
      EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
      PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
      CONTEMPLATED HEREBY.

    

    11.5 Laws.
      This
      Agreement is made subject to all valid applicable federal, state and local
      laws,
      rules, orders, and regulations of any duly constituted federal, state or local
      regulatory body or authority having jurisdiction thereof, and all operations
      hereunder shall be conducted in conformity therewith.

    

    11.6 Entire
      Agreement.
      This
      Agreement, together with the Related Agreements and the other instruments
      referenced herein and the exhibits and attachments hereto, embodies the entire
      agreement between the Parties with regard to the Subject Lands and the Leases
      and the Lease Option Agreement, and supersedes all other agreements,
      arrangements, understandings, negotiations and discussions, whether oral or
      written, of the Parties relating to the subject matter hereof, and may be
      supplemented, altered, amended, modified, waived or terminated by writing only,
      signed by the Parties.

    

    11.7 Time
      of the Essence.
      Time is
      of the essence with respect to matters covered by this Agreement in all
      respects.

    

    11.8 Successors.
      Subject
      to the restrictions on assignment herein contained, the terms and provisions
      of
      this Agreement shall inure to the benefit of and shall be binding upon the
      Parties hereto and their respective legal representatives, successors and
      assigns.

    

    11.9 Assignment.
      Neither
      Party shall assign this Agreement, in whole or in part, save to an Affiliate
      of
      such Party, without the prior written consent of the other Party, and any
      purported assignment in violation hereof shall be null and void. In the event
      such other Party consents to a proposed assignment or in the case of an
      assignment to an Affiliate, such assignee must agree to be expressly bound
      hereby and the assigning Party shall remain liable for its obligations
      hereunder. Nothing herein shall require the consent of, or restrict the right
      of
      a Party

     

    

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

     

    to
      assign
      all or part of its interest in the Leases after the Closing except as limited
      in
      the Exploration Agreement or Applicable Operating Agreement.

    

    11.10 Notice.
      The
      parties agree that any notices, communications or documents that either of
      them
      desire or that may be required to be delivered to any other shall be sent via
      telecopy, delivered in person, delivered by recognized courier service (such
      as
      Federal Express) or sent certified mail, postage prepaid, return receipt
      requested, received during normal business hours for the receiving Party and
      addressed to the Parties at the following respective addresses stated for
      each:

    

    
      	 	
              PRCT:

            	
              Petro
                Resources Corporation 

              5100
                Westheimer, Suite 200

              Houston,
                Texas 77056

              Attn:
                Mr. Wayne P. Hall 

              Telephone:
                (713) 961-9282 

              Telecopy:
                (713) 961-9283

            
	 	 
	 	 
	 	 
	 	 	 
	 	
              Meridian:

            	
              The
                Meridian Resource

              &
                Exploration LLC

              1401
                Enclave Parkway, Suite 300 

              Houston,
                Texas 77077

              Attn:
                Mr. Joseph A. Reeves, Jr. 

              Telephone:
                (281) 592-7000 

              Telecopy:
                (281) 597-8880

            
	 	 
	 	 
	 	 

    

     

    Notices
      or other communications shall be effective upon receipt by the Party to be
      notified, except that, for purposes hereof, if telecopy or personal delivery
      is
      not possible, refusal by any Party to accept correspondence sent by certified
      mail or two unsuccessful attempts by the U.S. Postal Service to serve any
      communication sent by certified mail shall be deemed receipt of such
      correspondence. Any Party may change its address for notices by written notice
      to the other. The notice provisions hereof shall not supersede the notice
      provisions of any applicable Operating Agreement for the matters covered
      thereby.

    

    11.11 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 and legal substance of the transaction contemplated
      hereby is not affected in any adverse manner to any Party.

    

    11.12 Publicity.
      PRCT and
      Meridian shall not, and shall cause their respective Affiliates
      not to, issue or make any publicity statements, news releases or other public
      statements
      concerning this Agreement or the operations contemplated by this Agreement,
      without the prior written consent of the other Party with respect to the form
      and substance thereof, except that either Party may make any such news release
      or other public statement where the releasing party is advised by its legal
      counsel that such news release or other public statement is required by
      applicable laws or regulations of any governmental body or the rules of any
      stock exchange on

     

    

     

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

     

    which
      such Party or any Affiliate of such Party is listed, but in such event the
      Parties shall use their reasonable good faith efforts to agree as to the form
      and substance of such news release or other public statement.

    

    11.13 No
      Third Party Beneficiaries.
      Except
      as specified in Article X, which is also intended to benefit and to be
      enforceable by any of the Indemnified Parties, nothing in this Agreement shall
      entitle any party other than the Parties to this Agreement to any claim, cause
      of action, remedy or right of any kind.

    

    11.14 Exhibits.
      All
      exhibits referred to in this Agreement are incorporated into and made a part
      of
      this Agreement.

    

    11.15
       Captions.
      All
      titles or headings to Articles, Sections, subsections, or other divisions of
      this Agreement or the exhibits hereto are only for the convenience of the
      Parties and shall not be construed to have any effect or meaning with respect
      to
      the other content of such Articles, Sections, subsections, or other divisions,
      such other content being controlling as to the agreement between the
      Parties.

    

    11.16
       Drafting
      of Agreement.
      PRCT and
      Meridian each declare that they have contributed to the drafting of this
      Agreement or have had it reviewed by their counsel before signing it. It is
      expressly agreed that this Agreement shall not be construed against any Party
      on
      the basis of who drafted this Agreement or who supplied the form of Agreement.
      Each Party agrees that it has been purposefully drawn and correctly reflects
      their understanding of the transaction that it contemplates.

    

    11.17
       Further
      Assurances.
      From
      time to time (whether before, at or after the Closing Date), and without further
      consideration, the Parties, as appropriate, shall, and shall cause their
      appropriate Affiliates to, execute and deliver or cause to be delivered such
      further instruments of conveyance, assignment and transfer, or any other
      documents and take such other action as may be necessary, advisable or
      appropriate to more effectively or completely accomplish the transactions
      contemplated by this Agreement, including such memorandums of rights or
      interests
      and
      other documents in recordable form as any Party may reasonably deem necessary
      to
      protect or give notice of its rights and interests hereunder or with respect
      to
      the teases.

    

    11.18
       Costs
      and Expenses.
      Each
      Party shall bear its own costs and expenses in connection with the negotiation,
      preparation and execution of this Agreement.

    

    11.19
       Counterparts.
      Upon its
      execution by both Parties, this Agreement shall become effective as of the
      date
      hereof and shall be binding upon the Parties, their respective legal
      representatives, successors and assigns. This Agreement may be executed by
      signing the original or a counterpart thereof, or, if this Agreement is executed
      in counterparts, all counterparts taken together shall have the same effect
      as
      if both the Parties had signed the same instrument.

    

    IN
      WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed
      as
      of the date shown above, in multiple originals, to be effective as of the date
      hereof.

     

    

    
      
         

      

      
        26

        
          

        

      

      
         

      

    

     

    	 	 	 
	 	
            PETRO
              RESOURCES CORPORATION D/B/A in

            Texas as PRCT, Inc.

          
	 
 	 
 	 
 
	 	By:  	/s/ Wayne
            P. Hall
	 	
            

          
	 	
            Wayne
              P. Hall, President of Petro Resources

            Corporation

          

     

    
      	 	 	 
	 	
              THE
                MERIDIAN RESOURCE & EXPORATION 

              LLC

            
	 
 	 
 	 
 
	 	By:  	/s/ Joseph
              A.
              Reeves, Jr.
	 	
              

            
	 	
              Joseph
                A. Reeves, Jr.

              Chief Executive
                Officer

            

     

    

    

    
      
         

      

      
        27

        
          

        

      

      
         

      

    

    Exhibit
      A

    to

    Lease
      Purchase Agreement

    

    Leases
      and Contracts

     

    Item
      1:

     

    
      	
              Contract:

               

            	
              Oil
                and Gas Lease

               

            
	
              Lessor:

            	
              Francis
                Ranch with full executive rights and on behalf of Black

              Stone
                Acquisitions Partners 1, L. P.

               

            
	
              Lessee:

               

            	
              Petro
                Resources Corporation dba PRCT, Inc.

               

            
	
              Effective
                Date:

               

            	
              November
                28, 2005

               

            
	
              Term:

               

            	
              Four
                (4) years

               

            
	
              Acreage:

               

            	
              Approximately
                13,761.6 located in Motley County, Texas

               

            
	
              Working
                Interest:

               

            	
              100.00%

               

            
	
              Revenue
                Interest:

            	
              80%
                or 79%, depending on applicable royalty as provided for in Paragraph
                

              4(e)
                of said Lease

               

            
	
              Recording
                Info:

            	
              Not
                Recorded

            

    

     

    Item
      2:

     

    
      	
              Contract:

               

            	
              Oil
                and Gas Lease

               

            
	
              Lessor:

               

            	
              Francis
                & Francis Investments

               

            
	
              Lessee:

               

            	
              Petro
                Resources Corporation dba PRCT, Inc.

               

            
	
              Effective
                Date:

               

            	
              November
                28, 2005

               

            
	
              Term:

               

            	
              Three
                (3) years

               

            
	
              Acreage:

               

            	
              Approximately
                750.0 acres located in Motley County, Texas

               

            
	
              Working
                Interest:

               

            	
              100.00%

               

            
	
              Revenue
                Interest:

               

            	
              80.00%

               

            
	
               

              Recording
                Info:

            	
               

              Not
                Recorded

            

    

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

     

    Item
      3:

     

    
      	
              Contract:

               

            	
              Oil,
                Gas and Liquid Hydrocarbon Lease

               

            
	
              Lessors:

            	
              Black
                Stone Acquisitions Partners I, L.P. and Sugarberry Oil & Gas
                Corporation

            
	
            	
               

            
	
              Lessee;

               

            	
              Petro
                Resources Corporation dba PRCT, Inc.

               

            
	
              Effective
                Date:

               

            	
              January
                3, 2006

               

            
	
              Acreage:

            	
              Block
                I and Block II containing approximately 10,201.40 gross

              acres
                located in Floyd and Motley Counties, Texas

            
	
              Working
                Interest:

               

            	
              50.00%

               

            
	
              Revenue
                Interest:

               

            	
              40.00%

               

            
	
              Recording
                Info:

            	
              Not
                Recorded

            

    

     

    Item
      4:

    

    
      	
              Contract:

            	
              Oil,
                Gas and Liquid Hydrocarbon Lease

            
	 	 
	
              Lessors:

            	
              Black
                Stone Acquisitions Partners I, L.P. and Sugarberry Oil &
                Gas Corporation

            
	 	 
	
              Lessee:

            	
              Petro
                Resources Corporation dba PRCT, Inc.

            
	 	 
	
              Effective
                Date:

            	
              January
                3, 2006

            
	 	 
	
              Acreage:

            	
              Block
                III and Block IV containing approximately 8,326.65 gross

              acres
                located in Floyd and Motley Counties, Texas

            
	
               

              Working
                Interest:

            	
               

              50.00%

            
	 	 
	
              Revenue
                Interest:

            	
              40.00%

            
	 	 
	
              Recording
                Info:

            	
              Not
                Recorded

            

    

    

     

    

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    Schedule
      4.1(f)

    to

    Lease
      Purchase Agreement

    

    (Required
      Consents and Notifications)

    

    
      	 	
              1.

            	
              Prior
                written consent of Black Stone Acquisitions Partners I, L.P. and
                Sugarberry Oil &
                Gas Corporation, as Optionors, under the Lease Option
                Agreement.

            

    

    

    
      	 	
              2.

            	
              Notification
                as required by Oil and Gas Lease dated effective November 28, 2005,
                by
                and
                between Francis Ranch (on behalf of Black Stone Acquisitions Partners
                1,
                L.P.), as Lessor, and PRCT, as
                Lessee.

            

    

    

    
      	 	
              3.

            	
              Notification
                as required by Oil and Gas Lease dated effective November 23, 2005,
                by
                and
                between Francis & Francis Investments, as Lessor, and PRCT, as
                Lessee.

            

    

    

    
      	 	
              4.

            	
              Prior
                written consent of Black Stone Acquisitions Partners 1, L.P. and
                Sugarberry Oil &
                Gas Corporation, as Lessors, under Oil, Gas and Liquid Hydrocarbon
                Lease
                dated effective January 3, 2006 by and between said Lessors and PRCT,
                as
                Lessee, covering approximately 10,201.40 gross acres located in Floyd
                and
                Motley Counties, Texas.

            

    

    

    
      	 	
              5.

            	
              Prior
                written consent of Black Stone Acquisitions Partners I, L.P. and
                Sugarberry Oil &
                Gas Corporation, as Lessors, under Oil, Gas and Liquid Hydrocarbon
                Lease
                dated effective January 3, 2006 by and between said Lessors and PRCT,
                as
                Lessee, covering approximately 8,326.65 gross acres located in Floyd
                and
                Motley Counties, Texas.

            

    

    

    

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    EXHIBIT
      "B-1"

    

    Attached
      to and made a part of that certain Lease Purchase Agreement by and between
      Petro
      Resources Corporation (in Texas d/b/a PRCT, Inc.) and The Meridian Resource
      & Exploration LLC

    

    ASSIGNMENT
      OF INTERESTS IN OIL AND GAS LEASES

     

    THIS
      ASSIGNMENT OF INTERESTS IN OIL AND GAS LEASES (this "Assignment") executed
      by
      PETRO RESOURCES CORPORATION, a Delaware corporation, doing business in the
      State
      of Texas as PRCT, Inc. (herein called "Assignor"),
      to
      THE MERIDIAN RESOURCE & EXPLORATION LLC, a Delaware limited liability
      company (herein called "Assignee"),
      dated
      effective at 7:00 a.m., Central Standard Time, on January __, 2006 (said hour
      and day being hereinafter called the "Effective
      Time").

    

    ARTICLE
      I

    Assignment
      of Interests in Leases

    

    Assignor,
      for and in consideration of the sum of Ten and No/100 Dollars ($10.00) and
      other
      good and valuable consideration in hand paid by Assignee, the receipt and
      sufficiency of which
      consideration are hereby acknowledged and confessed by Assignor, does hereby
      GRANT,
      BARGAIN,
      SELL, CONVEY, ASSIGN, TRANSFER, SET OVER and DELIVER unto Assignee, effective
      as
      of the Effective Time, an undivided seventy-five percent (75%) interest in
      and
      to Assignor's Interest (hereinafter defined) in and to all of the oil and gas
      leases described in Exhibit
      A
      attached
      hereto and made a part hereof for all purposes (the "Leases")
      (said
      undivided
      seventy-five percent (75%) interest in and to Assignor's Interest in and to
      the
      Leases being herein referred to as the "Subject
      Interests").

    

    TO
      HAVE
      AND TO HOLD the Subject Interests unto Assignee, its successors and
      assigns,
      forever, subject, however, to the matters set forth herein.

    

    ARTICLE
      II

    Certain
      Definitions

    

    The
      following terms, when used in this Assignment, shall have the meanings indicated
      below
      (such meanings to be fully applicable to both the singular and plural forms
      of
      the terms
      defined):

    

    "Assignor's
      Interest"
      means,
      when used with respect to any Lease, all of Assignor's right, title and interest
      therein.

     

    

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    "Defensible
      Title"
      means ,
      respectively, as to Subject Interests related to a particular Lease or portion
      thereof, record title to such Lease or portion thereof and Subject Interests
      related to such Lease or portion thereof, that: (i) entitles Assignor to receive
      and retain, without suspension, reduction or termination, not less than the
      applicable Net Revenue Interest or Net Revenue Interests specified for such
      Lease or portion thereof in Exhibit
      A
      hereto
      through plugging, abandonment and salvage of all wells hereafter producing
      from
      or attributable to such Subject Interests; (ii) obligates Assignor to bear
      the
      costs and expenses attributable to the maintenance, development and operation
      of
      such Lease or portion thereof through plugging, abandonment and salvage of
      all
      wells hereafter producing from or attributable to such Subject Interests in
      an
      amount not greater than the applicable Working Interest or Working Interests
      specified for such Lease or portion thereof in Exhibit
      A
      hereto
      unless Assignor's Net Revenue Interest
      therein is proportionately increased; and (iii) except for Permitted
      Encumbrances, is free
      and
      clear of Liens.

    

    "Hydrocarbons"
      means
      (i) crude oil, natural gas and other liquid or gaseous hydrocarbons and
      (ii)
      all minerals and substances produced with or extracted, separated, processed
      or
      produced
      from
      crude oil, natural gas or other liquid or gaseous hydrocarbons.

    

    "Lease
      Option Agreement"
      means
      that certain Lease Option Agreement dated effective September
      14, 2005, by and between Black Stone Acquisitions Partners I, L.P., and
      Sugarberry
      Oil
& Gas Corporation, as Optionors, and Assignor, as Optionee.

    

    "Lien"
      means
      any lien, mortgage, charge, penalty, restriction, security, interest, collateral
      assignment, pledge, sale or purchase contract, option, call or dedication,
      right
      of first refusal or other preferential purchase right, reservation, condition,
      sublease, license, area of mutual interest agreement, operating agreement,
      processing contract, farmout or development agreement, drilling or service
      contract, easement or right-of-way, pooling or unitization order or agreement,
      or other encumbrance or similar agreement.

    

    "Net
      Revenue Interest"
      means,
      with respect to any Lease, an interest (expressed as a percentage or decimal
      fraction) in and to all Hydrocarbons produced and saved from or attributable
      to the lands covered by such Lease, after giving effect to all royalties,
      overriding
      royalties and other burdens upon, measured by, or payable out of production
      therefrom.

    

    "Permitted
      Encumbrances"
      means
      (a) the terms, conditions, restrictions, exceptions, reservations, limitations
      and other matters contained in the Leases and the Lease Option Agreement; (b)
      statutory and conventional liens securing payments to operators, mechanics
      and
materialmen
      or others, payments of taxes or other claims or payment obligations that are,
      in
      each
      case,
      not yet delinquent or, if delinquent, are being contested in good faith in
      the
      normal course of business; (c) any obligations or duties to any municipality
      or
      public authority with respect to any franchise, grant, certificate, license
      or
      permit; (d) any easements, rights-of-way, servitudes, permits and other rights
      in respect of surface operations, pipelines or the like, and easements for
      pipelines, power lines and other similar rights-of-way, and encroachments,
      on,
      over or in respect of any of the Leases that do not, individually or in the
      aggregate, unreasonably or materially interfere with the operation of the Leases
      for exploration and production of Hydrocarbons or related operations; (e) all
      royalties, overriding royalties, net profits interests, production

     

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    payments,
      carried interests, reversionary interests, calls on production and other burdens
      on or deductions from the proceeds of production that do not operate to (i)
      reduce the Net Revenue Interest below that set forth in Exhibit
      A
      hereto
      or (ii) increase the Working Interest above that set
      forth
      in Exhibit
      A
      hereto
      without a proportionate increase in the Net Revenue Interest for the
      applicable Lease; and (f) conventional rights of reassignment prior to
      abandonment. For the avoidance of doubt, the terms and provisions of the Leases
      and the Lease Option Agreement shall constitute Permitted
      Encumbrances.

    

    "Working
      Interest"
      means,
      with respect to any Lease, an interest (expressed as a percentage or decimal
      fraction) in and to such Lease and all rights and obligations of every kind
      and
      character appurtenant thereto, or arising therefrom, without regard to any
      royalties, overriding royalties or other encumbrances or charges against
      production therefrom, insofar as such interest is burdened with the obligations
      to bear and pay costs and expenses attributable to the maintenance, development
      and operation of the leasehold interest in Hydrocarbons in and under the lands
      covered by such Lease.

    

    ARTICLE
      III

    

    Limitation
      of Warranties; Permitted Encumbrances 

     

    Section
      3.1       Limitation
      of Warranties.

    

    (a) Assignor
      does hereby bind itself, its successors and assigns, to warrant and forever
      defend all and singular Defensible Title to the Subject Interests, unto
      Assignee, its successors and assigns, against every person whomsoever lawfully
      claiming or to claim the same or any part thereof, by, through or under
      Assignor, but not otherwise; subject, however, to the Permitted
      Encumbrances

    

    (b) EXCEPT
      AS
      EXPRESSLY PROVIDED IN SECTION 4.1 OF THAT CERTAIN LEASE PURCHASE AGREEMENT
      DATED
      JANUARY __,
      2006, BY
      AND BETWEEN ASSIGNOR AND ASSIGNEE, AND THE SPECIAL WARRANTY OF TITLE TO THE
      SUBJECT INTERESTS CONTAINED IN THIS ASSIGNMENT, THE SUBJECT INTERESTS ARE
      CONVEYED AND ACCEPTED PURSUANT HERETO WITHOUT ANY OTHER COVENANT, REPRESENTATION
      OR WARRANTY, WHETHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, WITH RESPECT
      TO
      (A) THE QUANTITY, QUALITY, CONDITION, SIZE, WEIGHT, SERVICEABILITY, CONFORMITY
      TO SAMPLES OF MODELS, (B) ANY OTHER ASPECT OR CONDITION OF THE SUBJECT
      INTERESTS, ALL OF WHICH ARE CONVEYED BY ASSIGNOR TO ASSIGNEE AS IS, WHERE IS,
      AND WITH ALL FAULTS AND DEFECTS AND IN THEIR PRESENT CONDITION AND STATE OF
      REPAIR AND WITHOUT ANY COVENANTS, REPRESENTATIONS OR WARRANTIES, WHATSOEVER
      OF
      MERCHANTABILITY OR OF FITNESS FOR A PARTICULAR PURPOSE, (C) THE ACCURACY OR
      COMPLETENESS OF ANY DATA, REPORTS, RECORDS, PROJECTIONS, INFORMATION OR
      MATERIALS NOW, HERETOFORE OR HEREAFTER FURNISHED OR MADE AVAILABLE TO ASSIGNEE
      BY, ON BEHALF OF OR AT THE DIRECTION OF ASSIGNOR IN CONNECTION WITH THIS
      ASSIGNMENT INCLUDING, WITHOUT LIMITATION, THAT RELATIVE TO

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    

     

    PRICING
      ASSUMPTIONS, QUALITY, QUANTITY OR VOLUMES OF HYDROCARBON RESERVES
      (IF ANY) ATTRIBUTABLE TO THE SUBJECT INTERESTS OR THE ABILITY
      OR
      POTENTIAL OF THE SUBJECT INTERESTS OR THE LANDS COVERED BY THE LEASES TO PRODUCE
      HYDROCARBONS, (D) THE PHYSICAL AND ENVIRONMENTAL CONDITION OF SAID LANDS, BOTH
      SURFACE AND SUBSURFACE, INCLUDING BUT NOT LIMITED TO CONDITIONS SPECIFICALLY
      RELATED TO THE PRESENCE, RELEASE OR DISPOSAL OF HAZARDOUS SUBSTANCES, SOLID
      WASTES, ASBESTOS AND OTHER MAN MADE FIBERS, OR NATURALLY OCCURRING RADIOACTIVE
      MATERIALS, IT BEING AGREED BY ASSIGNEE THAT ANY AND ALL SUCH DATA, RECORDS,
      REPORTS, PROJECTIONS, INFORMATION AND OTHER MATERIALS (WRITTEN OR ORAL)
      FURNISHED OR OTHERWISE MADE AVAILABLE OR DISCLOSED TO ASSIGNEE HAVE BEEN AND
      WILL BE PROVIDED TO ASSIGNEE AS A CONVENIENCE AND SHALL NOT CREATE OR GIVE
      RISE
      TO ANY LIABILITY OF OR AGAINST ASSIGNOR AND ANY RELIANCE ON OR USE OF THE SAME
      SHALL BE AT ASSIGNEE'S SOLE RISK. TO THE MAXIMUM EXTENT PERMITTED BY LAW, (E)
      TITLE TO OR THE OWNERSHIP OR OPERATION OF THE SUBJECT INTERESTS OR ANY PART
      THEREOF AND (F) THE ACCURACY OR COMPLETENESS OF ANY REPORT, ASSESSMENT OR OTHER
      MATERIAL PURPORTING TO ASSESS OR ALLOCATE PRODUCTION, RESERVES OR VALUE TO
      ANY
      SUBJECT INTERESTS OR THE LANDS SUBJECT TO THE LEASES.

    

    (c) To
      the
      extent transferable, Assignee shall be and is hereby subrogated to all covenants
      and warranties of title by parties heretofore given or made to Assignor or
      its
      predecessors in title in respect of any of the Subject Interests.

    

    (d) Notwithstanding
      anything contained herein to the contrary, it is expressly understood
      and agreed that nothing contained herein is intended or shall operate to limit,
      impair
      or
      release any of the respective rights or obligations of Assignee or Assignor
      under the Lease Purchase Agreement mentioned in paragraph (b) of this Article
      III.

    

    Section
      3.2 Permitted
      Encumbrances. The
      Subject Interests are assigned and conveyed by Assignor and accepted by Assignee
      expressly subject to the Permitted Encumbrances
      and the terms and provisions of that certain Operating Agreement dated of
      even
      date
      herewith, between Assignor, as operator, and Assignee, as
      non-operator,

    

    By
      Assignee's acceptance of this Assignment, Assignee assumes and agrees to bear
      Assignee's proportionate share (i.e., seventy-five percent (75%)) of all burdens
      and obligations under the Leases that are attributable to Assignor's Interest
      and that arise or accrue after (but not before) the Effective Time.

    

    ARTICLE
      IV

     

     Miscellaneous

    

    Section
      4.1 Further
      Assurances. Assignor
      covenants and agrees to execute and deliver to Assignee all such other and
      additional instruments and other documents and will do all

     

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

     

    such
      other acts and things as may be necessary to more fully assure to Assignee
      or
      its successors
      or
      assigns all of the respective properties, rights and interests herein and hereby
      granted or intended
      so to be, including, without limitation, executing separate assignments of
      individual oil
      and gas
      leases which are included in the Subject Interests and which are necessary
      to
      facilitate the recognition of Assignee's ownership of the Subject Interests
      by
      all applicable third parties.

    

    Section
      4.2 Successors
      and Assigns.
      All of
      the provisions hereof shall inure to the benefit of and be binding upon Assignor
      and Assignee and their respective successors and assigns. All references herein
      to either Assignor or Assignee shall include their respective successors and
      assigns.

     

    Section
      4.3 Counterparts.
      This
      Assignment is being executed in several original
      counterparts, each of which shall be deemed to be an original instrument, but
      all of which counterparts shall constitute but one and the same
      assignment.

     

    IN
      WITNESS WHEREOF, Assignor and Assignee have caused this Assignment to
      be
      executed
      on the dates of their respective acknowledgments set forth below, to be
      effective, however, as of the Effective Time.

     

    
      	 	 	 
	 	ASSIGNOR:
	 	 
	 	
              PETRO RESOURCES CORPORATION

              (IN TEXAS D/B/A PRCT, INC.)

            
	 	 
	     	By                           
	 	Name:                        
	 	Title:                         
	 	 
	 	 
	 	ASSIGNEE:
	 	 
	 	
              THE MERIDIAN RESOURCE &

              EXPLORATION LLC

            
	 	 
	 	By                         
	 	Name:                        
	 	Title:                        

    

     

     

    

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

     

    

      
        	
                 

                STATE
                  OF TEXAS

              	
                 

                §

              
	
              	
                §

              
	
                COUNTY
                  OF

              	
                §

              

      

    

    This
      instrument was acknowledged before me on ___________, 2006, by ____________,
      ______________ of Petro Resources Corporation, a Delaware corporation, doing
      business in the State of Texas as PRCT, Inc., on behalf of said
      corporation.

    

     

    

      
        	 	 	 
	 	 

                

              	 
	 	
                Notary
                  Public, State of Texas 

              
	 	
                Printed
                  Name:                         

              
	 	
                My
                  Commission expires:                

              

      

    

     

    

    

      
        	
                 

                STATE
                  OF TEXAS

              	
                 

                §

              
	
              	
                §

              
	
                COUNTY
                  OF

              	
                §

              

      

    This
      instrument was acknowledged before me on _____________, 2006, by __________,
      ________________of The Meridian Resource & Exploration LLC, a

    Delaware
      limited liability company, on behalf of said company.

    

    

    
      

        
          	 	 	 
	 	 

                  

                	 
	 	
                  Notary
                    Public, State of Texas 

                
	 	
                  Printed
                    Name:                         

                
	 	
                  My
                    Commission expires:                

                

        

      

       

      
 

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

    

     

    

     

    Exhibit
      A

     

    to

     

    Assignment
      of Interests in Oil and Gas Leases

     

    

     

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

     

    EXHIBIT
      "B-2"

    

    Attached
      to and made a part of that certain Lease Purchase Agreement by and between
      Petro
      Resources Corporation (in Texas d/b/a PRCT, Inc.) and The Meridian Resource
      & Exploration LLC.

    

    ASSIGNMENT
      OF INTEREST IN LEASE OPTION AGREEMENT

    

    

    THIS
      ASSIGNMENT OF INTEREST IN LEASE OPTION AGREEMENT (this "Assignment")
      executed by PETRO RESOURCES CORPORATION, a Delaware corporation, doing business
      in the State of Texas as PRCT, Inc. (herein called "Ass~nor"), to THE MERIDIAN
      RESOURCE & EXPLORATION LLC, a Delaware limited liability company (herein
      called "Assignee"), dated effective at 7:00 a.m., Central Standard Time,
      on __________, 2006 (said hour and day being hereinafter called the
      "Effective Time").

    

    ARTICLE
      I

     

    Assignment
      of Interest in Lease Option Agreement

    

    Assignor,
      for and in consideration of the sum of Ten and No/100 Dollars ($10.00) and
      other
      good and valuable consideration in hand paid by Assignee, the receipt and
      sufficiency of which consideration are hereby acknowledged and confessed by
      Assignor, does hereby GRANT, BARGAIN, SELL, CONVEY, ASSIGN and TRANSFER unto
      Assignee, effective as of the Effective Time, an undivided seventy-five percent
      (75%) interest in and to Assignor's Interest (hereinafter defined) in and to
      the
      Lease Option Agreement (hereinafter defined) (said undivided seventy-five
      percent (75%) interest in and to Assignor's Interest in and to the Lease Option
      Agreement being herein referred to as the "Subject
      Interest").

    

    TO
      HAVE
      AND TO HOLD the Subject Interest unto Assignee, its successors and
      assigns,
      forever, subject, however, to the matters set forth herein.

    

    ARTICLE
      II

     

    Certain
      Definitions

    

    The
      following terms, when used in this Assignment, shall have the meanings indicated
      below (such meanings to be fully applicable to both the singular and plural
      forms of the terms defined):

    

    "Assignor's
      Interest"
      means
      all of the rights, titles and interests of the "Optionee" existing under and
      by
      virtue of the Lease Option Agreement.

     

    

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    "Lease
      Option Agreement"
      means
      that certain Lease Option Agreement dated effective September
      14, 2005, by and between Black Stone Acquisitions Partners 1, L.P., and
      Sugarberry
      Oil
& Gas Corporation, as Optionors, and Assignor, as Optionee.

    

    ARTICLE
      III

    

    Limitation
      of Warranties; Permitted Encumbrances 

     

    Section
      3.1 Limitation
      of Warranties.

    

    (a) Assignor
      does hereby bind itself, its successors and assigns, to warrant and forever
      defend all and singular the Subject Interest, unto Assignee, its successors
      and
      assigns, against
      every person whomsoever lawfully claiming or to claim the same or any part
      thereof, by,
      through
      or under Assignor, but not otherwise; subject, however, to the matters set
      forth
      herein.

    

    (b) EXCEPT
      AS
      EXPRESSLY PROVIDED IN SECTION 4.1 OF THAT CERTAIN LEASE PURCHASE AGREEMENT
      DATED
      _____________, 2006, BY AND BETWEEN ASSIGNOR AND ASSIGNEE, AND THE SPECIAL
      WARRANTY OF TITLE TO THE SUBJECT INTEREST CONTAINED IN THIS ASSIGNMENT, THE
      SUBJECT INTEREST IS CONVEYED AND ACCEPTED PURSUANT HERETO WITHOUT ANY OTHER
      COVENANT, REPRESENTATION OR WARRANTY, WHETHER EXPRESS, IMPLIED, STATUTORY OR
      OTHERWISE, WITH RESPECT TO (A) THE QUANTITY, QUALITY, CONDITION, SIZE, WEIGHT,
      SERVICEABILITY, CONFORMITY TO SAMPLES OF MODELS, (B) ANY OTHER ASPECT OR
      CONDITION OF THE SUBJECT INTEREST, ALL OF WHICH IS CONVEYED BY ASSIGNOR TO
      ASSIGNEE AS IS, WHERE IS, AND WITH ALL FAULTS AND DEFECTS AND IN ITS PRESENT
      CONDITION AND STATE OF REPAIR AND WITHOUT ANY COVENANTS, REPRESENTATIONS OR
      WARRANTIES, WHATSOEVER OF MERCHANTABILITY OR OF FITNESS FOR A PARTICULAR
      PURPOSE, (C) THE ACCURACY OR COMPLETENESS OF ANY DATA, REPORTS, RECORDS,
      PROJECTIONS, INFORMATION OR MATERIALS NOW, HERETOFORE OR HEREAFTER FURNISHED
      OR
      MADE AVAILABLE TO ASSIGNEE BY, ON BEHALF OF OR AT THE DIRECTION OF ASSIGNOR
      IN
      CONNECTION WITH THIS ASSIGNMENT INCLUDING, WITHOUT LIMITATION, THAT RELATIVE
      TO
      PRICING ASSUMPTIONS, QUALITY, QUANTITY OR VOLUMES OF HYDROCARBON RESERVES (IF
      ANY) ATTRIBUTABLE TO THE SUBJECT INTEREST OR THE ABILITY OR POTENTIAL OF THE
      SUBJECT INTEREST OR THE LANDS COVERED BY THE LEASE OPTION AGREEMENT TO PRODUCE
      HYDROCARBONS, (D) THE PHYSICAL AND ENVIRONMENTAL CONDITION OF SAID LANDS, BOTH
      SURFACE AND SUBSURFACE, INCLUDING BUT NOT LIMITED TO CONDITIONS SPECIFICALLY
      RELATED TO THE PRESENCE, RELEASE OR DISPOSAL OF HAZARDOUS SUBSTANCES, SOLID
      WASTES, ASBESTOS AND OTHER MAN MADE FIBERS, OR NATURALLY OCCURRING RADIOACTIVE
      MATERIALS, IT BEING AGREED BY ASSIGNEE THAT ANY AND ALL SUCH DATA, RECORDS,
      REPORTS, PROJECTIONS, INFORMATION AND OTHER MATERIALS (WRITTEN OR ORAL)
      FURNISHED OR OTHERWISE MADE AVAILABLE OR DISCLOSED TO ASSIGNEE HAVE BEEN AND
      WILL BE PROVIDED TO ASSIGNEE AS A CONVENIENCE AND SHALL NOT CREATE

    

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    OR
      GIVE
      RISE TO ANY LIABILITY OF OR AGAINST ASSIGNOR AND ANY RELIANCE ON OR USE OF
      THE
      SAME SHALL BE AT ASSIGNEE'S SOLE RISK. TO THE MAXIMUM EXTENT PERMITTED BY LAW,
      (E) TITLE TO OR THE OWNERSHIP OR OPERATION OF THE SUBJECT INTEREST OR ANY PART
      THEREOF AND (F) THE ACCURACY OR COMPLETENESS OF ANY REPORT, ASSESSMENT OR OTHER
      MATERIAL PURPORTING TO ASSESS OR ALLOCATE PRODUCTION, RESERVES OR VALUE TO
      ANY
      SUBJECT INTEREST OR THE LANDS SUBJECT TO THE LEASE OPTION
      AGREEMENT.

    

    (c) To
      the
      extent transferable, Assignee shall be and is hereby subrogated to
      all
      covenants and warranties of title by parties heretofore given or made to
      Assignor or its predecessors in title in respect of the Subject
      Interest.

    

    Section
      3.2 Permitted
      Encumbrances.
      The
      Subject Interest is assigned and conveyed by Assignor and accepted by Assignee
      expressly subject to the terms and provisions of the Lease Option
      Agreement.

    

    By
      Assignee's acceptance of this Assignment, Assignee assumes and agrees to bear
      Assignee's proportionate share (i.e., seventy-five percent (75%)) of all burdens
      and obligations under the Lease Option Agreement that are attributable to
      Assignor's Interest and that arise or accrue after (but not before) the
      Effective Time.

    

    ARTICLE
      IV

     

     Miscellaneous

    

    Section
      4.1 Further
      Assurances.
      Assignor
      covenants and agrees to execute and deliver to Assignee all such other and
      additional instruments and other documents and will do all such other acts
      and
      things as may be necessary to more fully assure to Assignee or its successors
      or
      assigns all of the respective properties, rights and interests herein and hereby
      granted or intended so to be, including, without limitation, executing separate
      assignments of individual oil and gas leases which (upon exercise of the
      "Option" described in the Lease Option Agreement) shall be included in the
      Subject Interest and which are necessary to facilitate the recognition of
      Assignee's ownership of the Subject Interest by all applicable third
      parties.

    

    Section
      4.2 Successors
      and
      Assigns.
      All of
      the provisions hereof shall inure to the
      benefit
      of and be binding upon Assignor and Assignee and their respective successors
      and
      assigns. All references herein to either Assignor or Assignee shall include
      their respective successors and assigns.

    

    Section
      4.3 Counterparts.
      This
      Assignment is being executed in several original
      counterparts, each of which shall be deemed to be an original instrument, but
      all of which counterparts shall constitute but one and the same
      assignment.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    

     

    IN
      WITNESS WHEREOF, Assignor and Assignee have caused this Assignment to be
      executed on the dates of their respective acknowledgments set forth below,
      to be
      effective, however, as of the Effective Time.

     

                        ASSIGNOR:

     

    PETRO
      RESOURCES CORPORATION
      (IN
      TEXAS DB/A PRCT, INC)

    

                        By                         

                        Name:                         

                        Title:                         

     

     

     

                        ASSIGNEE:

    THE
      MERIDIAN RESOURCE &
      EXPLORATION LLC

    

                        By                         

                        Name:                         

                        Title:                         

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    
      

        
          	
                   

                  STATE
                    OF TEXAS

                	
                   

                  §

                
	
                	
                  §

                
	
                  COUNTY
                    OF

                	
                  §

                

        

      

      This
        instrument was acknowledged before me on ___________, 2006, by ____________,
        ______________ of Petro Resources Corporation, a Delaware corporation, doing
        business in the State of Texas as PRCT, Inc., on behalf of said
        corporation.

      

       

      

        
          	 	 	 
	 	 

                  

                	 
	 	
                  Notary
                    Public, State of Texas 

                	 
	 	
                  Printed
                    Name:                         

                
	 	
                  My
                    Commission expires:                

                

        

      

       

      

      

        
          	
                   

                  STATE
                    OF TEXAS

                	
                   

                  §

                
	
                	
                  §

                
	
                  COUNTY
                    OF

                	
                  §

                

        

      This
        instrument was acknowledged before me on _____________, 2006, by __________,
        ________________of The Meridian Resource & Exploration LLC, a

      Delaware
        limited liability company, on behalf of said company.

      

      

      
        

          
            	 	 	 
	 	 

                    

                  	 
	 	
                    Notary
                      Public, State of Texas 

                  	 
	 	
                    Printed
                      Name:                         

                  
	 	
                    My
                      Commission expires:                

                  

          

        

         

         

        5

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