Document:

ISDA®

International Swaps and Derivatives Association,
Inc.

 

SCHEDULE

to the

2002 Master Agreement

 

dated as of December 27, 2012

 

between

 

	
        Macquarie Bank Limited

        (AFS Licence: 237502)
	 	and	 	
        American Eagle Energy Corporation (“AEEC”)

        and

        AMZG, Inc. (“AMZG”)

 

	(“Party A”)	(individually and collectively, and
	 	jointly and severally, “Party B”)

 

	
        established as a company

         

        with limited liability
        with

         

        Australian Business Number 46 008 583
        542

         

        under the laws of Australia

         

        acting through its
        branches in Sydney and London
	 	
        each established as a corporation 

         

        under the laws of the state of Nevada

 

Part 1.    Termination Provisions.

 

		(a)	“Specified Entity” means
in relation to Party A for the purpose of:―

 

	Section 5(a)(v),	Nil
	Section 5(a)(vi),	Nil
	Section 5(a)(vii),	Nil
	Section 5(b)(v),	Nil
	and in relation to Party B for the purpose of:―	 
	Section 5(a)(v),	Affiliates
	Section 5(a)(vi),	Affiliates
	Section 5(a)(vii),	Affiliates
	Section 5(b)(v),	Affiliates

 

		(b)	“Specified Transaction” will have the meaning specified in Section 14 of this Agreement.

 

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		(c)	The “Cross-Default” provisions of Section 5(a)(vi) will apply to Party
A and Party B as amended such that the phrase “or becoming capable at such time of being
declared” is deleted from the seventh line of Section 5(a)(vi).

 

“Specified Indebtedness”
has the meaning specified in Section 14, except that for Party A it excludes an obligation for borrowed money where the creditor’s
recourse on the obligation is limited to assets for which the money was borrowed.

 

“Derivative Transaction”
means any obligation (whether present or future, contingent or otherwise, as principal or surety or otherwise) in respect of any
transaction in the nature of a transaction as described in (a)(i) and (ii), (b) and (c) of the definition of Specified Transaction.

 

For the purposes of Section 5(a)(vi)(1),
any reference to the principal amount of Specified Indebtedness becoming, or becoming capable of being declared, due and payable
shall, in the case of a Derivative Transaction, refer to the amount that becomes, or would become, due and payable as a result
of the termination of such Derivative Transaction.

 

“Threshold Amount”
means:

 

(i)            with respect to Party
A, an amount in USD equivalent to 3% of the Shareholders’ Equity of Macquarie Group Limited (ABN 94 122 169 279). For the
purposes of the definition of Threshold Amount, “Shareholders’ Equity” means, at any time, the amount of paid-in
capital in respect of all issued and fully-paid shares of capital of the relevant entity, plus the contributed surplus, plus the
cumulative translation adjustment (if any), plus the retained earnings, all of the foregoing as calculated in accordance with generally
accepted accounting principles in the country in which the entity is organized, consistently applied; and

 

(ii)           with respect to Party
B, USD100,000.00.

 

		(d)	The “Credit Event Upon Merger” provisions of Section 5(b)(v) will apply
to Party B.

 

		(e)	The “Automatic Early Termination” provision of Section 6(a) will not
apply to Party A and will not apply to Party B.

 

		(f)	“Termination Currency” means United States Dollars.

 

		(g)	The following Additional Termination Events will apply to Party B if at any time:

 

		(i)	the ratio of:

 

		(x)	the sum of (I) the PV10 Value of PDP Projected Production and (II) Most Current Cash Position (as
defined in Part 3) less (III) Most Current Past Due Payables (as defined in Part 3); to

 

		(y)	Close-out Amount, calculated as if such day were an Early Termination Date,

 

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is less than 1.3, as determined
by Party A on the basis of the most recent Reserve Report, provided (x) and (y) will be determined based upon the same prices for
Hydrocarbons;

 

		(ii)	Party B fails to comply with any covenant under Part 6 of this Agreement and failure is not remedied
within ten (10) Local Business Days following the earlier of: (i) Party B’s actual notice of such failure or (ii) Party A
providing written notice to Party B of such failure;

 

		(iii)	A Change of Control results with regard to Party B;

 

		(iv)	Party B fails to enter into a Deposit Account Control Agreement, a Three Party Lockbox Agreement
and a Lockbox Management Agreement within thirty (30) days following the execution of this Agreement;

 

		(v)	Party B fails to enter into an amendment to the Mortgage adding the property interests acquired
by Party B pursuant to the SM Energy Acquisition and/or the NextEra Acquisition within 30 days following the closing of each of
the SM Energy Acquisition and/or the NextEra Acquisition, as applicable;

 

		(vi)	A judgement for more than $100,000 is entered against Party B and not appealed or bonded or fully
stayed, vacated, paid or discharged within 30 days of its entry unless the judgment relates to a claim that is fully covered by
insurance and for which the insurance company has unconditionally accepted liability;

 

		(vii)	A Material Adverse Effect results with regards to Party B;

 

		(viii)	Party B fails to comply with any covenant set out in any Credit Support Document and such failure
is not remedied within ten (10) Local Business Days following the earlier of: (i) Party B’s actual notice of such failure
or (ii) Party A providing written notice to Party B of such failure; or

 

		(ix)	Any representation or warranty by Party B hereunder or under any Credit Support Document proves
to be false or misleading in any material respect.

 

For the purpose
of each of the foregoing Termination Events, the Affected Party will be Party B, and the following definitions will apply:

 

“Deposit
Account Control Agreement” means a Deposit Account Control Agreement by and among the parties hereto and Bank of the
West, in form and substance reasonably acceptable to the parties thereto.

 

“Lockbox
Management Agreement” means a lockbox management agreement by and between the parties hereto, in form and substance reasonably
acceptable to the parties hereto.

 

“NextEra
Acquisition” means the acquisition by Party B of certain working interests as more particularly described in Appendix
XVII hereto.

 

“Production”
means the net Hydrocarbons (defined in Part 6 of this Agreement) produced and saved from the Property (defined in Part 6 of this
Agreement).

 

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“PDP
Projected Production” means projected Production as referenced in the most recent Reserve Report (defined in Part 6 of
this Agreement) except for pricing, for which strip pricing determined by Party A based on average NYMEX settlement pricing shall
be used.

 

“PV10
Value” means the net present value expected to accrue from the PDP Projected Production, calculated using a discount
rate of ten percent (10.00%) per annum and estimates of reserves, prices, production rates, taxes and costs in the most recently
delivered Reserve Report.

 

“Three
Party Lockbox Agreement” means a three party lockbox agreement amendment to Cash Management Terms and Conditions
by and between the parties hereto and Bank of the West, in form and substance reasonably acceptable to the parties thereto.

 

“SM Energy Acquisition”
means the acquisition by Party B of certain working interest as more particularly described in Appendix XVIII hereto.

 

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Part 2.    Tax Representations.

 

		(a)	Payer Representations.  For the purpose of Section 3(e) of this Agreement,
Party A and Party B each make the following representation:―

 

			It is not required by any applicable Law, as modified by the practice of any relevant governmental
revenue authority, of any Relevant Jurisdiction to make any deduction or withholding for or on account of any Tax from any payment
(other than interest under Section 9(h) of this Agreement) to be made by it to the other party under this Agreement. In making
this representation, it may rely on (i) the accuracy of any representations made by the other party pursuant to Section 3(f) of
this Agreement, (ii) the satisfaction of the agreement contained in Section 4(a)(i) or 4(a)(iii) of this Agreement and the accuracy
and effectiveness of any document provided by the other party pursuant to Section 4(a)(i) or 4(a)(iii) of this Agreement,
and (iii) the satisfaction of the agreement of the other party contained in Section 4(d) of this Agreement, except that it will
not be a breach of this representation where reliance is placed on clause (ii) above and the other party does not deliver a form
or document under Section 4(a)(iii) by reason of material prejudice to its legal or commercial position.

 

		(b)	Payee Representations.  For the purpose of Section 3(f) of this Agreement,
each of Party A and Party B make the representations specified below, as applicable:―

 

		(1)	Jurisdiction of residence for tax purposes.

 

The following representations will
apply to all Transactions:

 

		(i)	Party A represents that it is resident for tax purposes in Australia.

 

		(ii)	Party B represents that it is resident for tax purposes in the United States of America.

 

		(2)	Both parties transacting in same jurisdiction.

 

The following
representation will apply to Transactions in respect of which Party A Specified Jurisdiction is the same as Party B Specified Jurisdiction:

 

		(i)	Party A Payee Representation

 

Each payment
received or to be received by it in connection with the Transaction will be effectively connected with its conduct of a trade or
business in Party B Specified Jurisdiction carried on through a permanent establishment in Party B Specified Jurisdiction.

 

		(ii)	Party B Payee Representation

 

Each payment
received or to be received by it in connection with the Transaction will be effectively connected with its conduct of a trade or
business in Party A Specified Jurisdiction carried on through a permanent establishment in Party A Specified Jurisdiction.

 

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		(3)	Parties transacting out of different jurisdictions with no double tax agreement.

 

The following
representation will apply to any payments made in relation to Transactions in respect of which representation (2) does not apply
and there is no Specified Treaty under which the payee of such payment is eligible for benefits:

 

		(i)	Party A Payee Representations

 

Party A represents that it
does not derive the payments under the Transaction in part or in whole in carrying on business at or through a permanent establishment
of itself in Party B Specified Jurisdiction.

 

		(ii)	Party B Payee Representations

 

Party B
represents that it does not derive the payments under the Transaction in part or in whole in carrying on business at or through
a permanent establishment of itself in Party A Specified Jurisdiction. 

 

		(4)	Parties transacting out of different jurisdictions with a double tax agreement.

 

The following
representation will apply to any payments made in relation to Transactions in respect of which neither representation (2) nor representation
(3) applies:

 

		(i)	Party A Payee Representations

 

It is fully eligible for the
benefits of the “Business Profits” or “Industrial and Commercial Profits” provision (or equivalent provision
whether or not actually so named), as the case may be, the “Interest” provision or the “Other Income” provision
(if any) of the Specified Treaty with respect to any payment described in such provisions and received or to be received by it
in connection with the Transaction and no such payment is attributable to a trade or business carried on by it through a permanent
establishment in Party B Specified Jurisdiction.

 

		(ii)	Party B Payee Representations

 

It is fully
eligible for the benefits of the “Business Profits” or “Industrial and Commercial Profits” provision (or
equivalent provision whether or not actually so named), as the case may be, the “Interest” provision or the “Other
Income” provision (if any) of the Specified Treaty with respect to any payment described in such provisions and received
or to be received by it in connection with the Transaction and no such payment is attributable to a trade or business carried on
by it through a permanent establishment in Party A Specified Jurisdiction.

 

		(5)	Other payments under the Agreement

 

Solely for the purposes of the
representations made under Section 3(f) of the Agreement, any payments made under the Agreement but not as part of a Transaction,
including any payments made in accordance with Section 6(e), shall be deemed to be payments in relation to a Transaction.

 

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		(6)	Definitions

 

		(i)	“Party A Specified Jurisdiction” means :

 

		(a)	the country in which is located the office identified in the applicable Confirmation as the office
through which Party A is acting for the purpose of the Transaction; and

 

		(b)	if no office is expressly identified in the applicable Confirmation, the country in which is located
the office from which the applicable Confirmation originated.

 

		(ii)	For the purpose of the representations made by Party A, “Specified Treaty” means
the income tax convention applicable between Party B Specified Jurisdiction and the country of residence of Party A.

 

		(iii)	“Party B Specified Jurisdiction” means:

 

		(a)	the country in which is located the office identified in the applicable Confirmation as the office
through which Party B is acting for the purpose of the Transaction; and

 

		(b)	if no office is expressly identified in the applicable Confirmation, the country in which is located
the office from which the applicable Confirmation originated.

 

		(iv)	For the purpose of the representations made by Party B, “Specified Treaty” means
the income tax convention applicable between Party A Specified Jurisdiction and the country of residence of Party B.

 

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Part 3.    Agreement to Deliver Documents.

 

For the purpose of Sections 4(a)(i) and 4(a)(ii) of this Agreement,
each party agrees to deliver the following documents, as applicable:―

 

		(a)	Tax forms, documents or certificates to be delivered
are :―

 

	Party required to

 deliver document	 	
        Form/Document/

        Certificate
	 	
        Date by which

        to be delivered

	 	 	 	 	 
	
        Party A and

        Party B
	 	Any form or document requested by the other party under Section 4(a)(iii).	 	As soon as possible after request

 

		(b)	Other documents to be delivered are :―

 

	Party required to

 deliver document	 	
        Form/Document/

        Certificate
	 	
        Date by which

        to be delivered
	 	Covered by Section 3(d) Representation
	 	 	 	 	 	 	 
	
        Party A and

        Party B
	 	
        A list of authorised signatories for the
        party (and, as applicable, any Credit Support Provider of such party) and evidence of the authority of the authorised signatories
        of such party to execute this Agreement (and, as applicable, any Credit Support Document).

         
	 	At the execution of this Agreement	 	Yes
	
        Party A and

        Party B

         
	 	Any Credit Support Document(s) specified in Part 4 of this Schedule.	 	At the execution of this Agreement.	 	Yes
	Party A 	 	
        A copy of Party A’s audited consolidated
        financial statements prepared in accordance with accounting principles that are generally accepted in Party A’s country of
        organisation and certified by independent certified public accountants for each financial year.

         
	 	Upon request, if such financial statements are not available from public sources or at www.macquarie.com.au	 	No
	Party B	 	
        A copy of Party B’s annual audited
        consolidated and consolidating financial statements prepared in accordance with accounting principles that are generally accepted
        in such party’s country of organisation and certified by independent certified public accountants for each financial year.

        
	 	Within 120 days from party’s financial year end, commencing with the fiscal year ending December 31, 2012.	 	No

 

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	Party A	 	
        A copy of Party A’s semi-annual unaudited
        consolidated financial statements prepared in accordance with accounting principles that are generally accepted in such party’s
        country of organisation.

         
	 	If publicly available, within 60 days from party’s financial half-year end. If Party A’s semi-annual financial statements are available on Party A’s website, then such website publication shall be deemed delivery to Party B under this Agreement.	 	No
	 	 	 	 	 	 	 
	Party B	 	
        A copy of Party B’s quarterly unaudited
        consolidated and consolidating financial statements prepared in accordance with accounting principles that are generally accepted
        in such party’s country of organisation.

         
	 	Within 75 days from Party B’s financial quarter end.	 	No
	Party B	 	
        Final lease operating statement relating
        to, the Property including Hydrocarbon production, revenue and operating expenses.

         
	 	Within 45 days from Party B’s each calendar month end.	 	Yes
	Party B	 	Reserve Report as defined in Part 6(n) of this Agreement.	 	In accordance with Part 6(n) of this Agreement.	 	Yes
	 	 	 	 	 	 	 
	Party B	 	Certificates of insurance and copies of insurance policies.	 	In accordance with Part 6(b) of this Agreement.	 	Yes
	 	 	 	 	 	 	 
	
        Party A and

        Party B
	 	Copies of the party’s standard settlement instructions.	 	
        At the execution of this Agreement and
        at any time there is a change to those standard settlement instructions.

         
	 	Yes
	
        Party A and

        Party B
	 	
        A list of authorised signatories for the
        Party and evidence of the authority of the authorised signatories of the party to execute Confirmations on behalf of the party.

         
	 	Upon execution of this Agreement and at any time there is a change to the list of those authorised to sign Confirmations. 	 	Yes

 

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	Party B	 	Contact details for settlement purposes, including telephone, facsimile (and email details if relevant), addresses and names of the relevant contacts. 	 	At the execution of this Agreement and at any time there is a change to those contacts details. 	 	Yes
	 	 	 	 	 	 	 
	Party B	 	Satisfactory legal opinions, including (i) the enforceability opinions in relation to this Agreement and the Credit Support Documents, (ii) the due authorization, formation and existence of Party B and (iii) the proper form and content of the Credit Support Documents to be filed in North Dakota, each in form and substance satisfactory to Party A in its sole and absolute discretion.	 	Prior to entering into the first Transaction after the date of this Agreement.	 	Yes
	 	 	 	 	 	 	 
	Party B	 	Satisfactory searches of the UCC filing records or similar public (including applicable county) records to evidence and confirm the first priority ranking rights and remedies of Party A in and to the Collateral granted by Party B pursuant to the Credit Support Documents.	 	Prior to entering into the first Transaction after the date of this Agreement.	 	Yes
	 	 	 	 	 	 	 
	Party B	 	Certificates certified by the secretary of Party B as to the truth, completeness and accuracy of (i) the resolutions authorizing the transactions hereunder by Party B, (ii) Party B’s governing documents and (iii) the existence and good standing of Party B in the applicable states.	 	At the execution of this Agreement, or as otherwise agreed by Party A.	 	Yes
	 	 	 	 	 	 	 
	Party B	 	Extract from Party B’s management accounts evidencing its cash position at close of business on the date of such extract (“Most Current Cash Position”) and its past due payables at close of business on the date of such extract (“Most Current Past Due Payables”).	 	Within 3 Local Business Days of request by Party A.	 	Yes

 

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Part 4.    Miscellaneous.

 

		(a)	Addresses for Notices.  For
the purpose of Section 12(a) of this Agreement:―

 

Address for notices or communications
to Party A:―

 

	Address:	 	Macquarie Bank Limited
	 	 	No. 1 Martin Place
	 	 	Sydney NSW 2000 
	 	 	Australia
	 	 	 
	Attention:	 	Executive Director, Legal Risk Management Division, 
	 	 	Fixed Income, Currencies and Commodities Group
	 	 	 
	Facsimile No.:	 	+(612) 8232 4540   Telephone No.:        +(612) 8232 3333
	E-mail:	 	for Section 5 and 6 Notices only:  ‘ficc.notices@macquarie.com’
	 	 	 
	With a copy to:	 	 
	 	 	 
	Address:	 	Macquarie Bank Limited 
	 	 	Level 23, Citypoint, 
	 	 	1 Ropemaker Street
	 	 	London EC2Y 9HD 
	 	 	England
	 	 	 
	Attention:	 	Legal Risk Management, Fixed Income, Currencies and Commodities Group
	Facsimile No.:	 	+(44) 20 3037 4301 Telephone No.:    +(44) 20 7065 2000
	 	 	 
	Address for notices or communications to Party B:―
	 	 	 
	Address:	 	American Eagle Energy Corporation
	 	 	2549 W. Main Street, Suite 202
	 	 	Littleton, Colorado  80120
	 	 	 
	Attention:	 	Brad Colby
	 	 	 
	Facsimile No.:	 	+1 303-798-5767   Telephone No.: +1 303 798 5235
	Email:	 	bradcolby@amzgroup.com 
	 	 	 
	With a copy to:	 	 
	 	 	 
	Address:	 	Roberts & Olivia, LLC
	 	 	2060 Broadway, Suite 250
	 	 	Boulder, CO 80302 
	 	 	 
	Attention:	 	William R. Roberts
	 	 	 
	Facsimile No.:	 	+1 720-210-5447   Telephone No.: +1 720-210-5447 x71 
	Email:	 	wrroberts@wrrlaw.com

 

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		(b)	Process Agent.  For
the purpose of Section 13(c) of this Agreement:―

 

Party A appoints as its Process
Agent:

 

Macquarie Bank Limited Representative Office

125 West 55th Street, 22nd Floor,

New York NY 10019

Attn: Legal Risk Management, Fixed Income, Currencies
and Commodities

Telephone: (+1 212) 231 1000

Facsimile: (+1 212) 231 2177

 

In the event of service of process
in any Proceedings by Party B, Party B must also send copies of all documents initiating that process immediately to Party A in
Australia at the address given in Part 4(a) above.

 

Party B appoints as its Process
Agent: Not Applicable

 

		(c)	Offices.  The provisions
of Section 10(a) will apply to this Agreement.

 

		(d)	Multibranch Party.  For
the purpose of Section 10(b) of this Agreement:―

 

Party A is a Multibranch Party
and may enter into a Transaction through any of the following Offices:― London or Sydney

Party B is not a Multibranch
Party.

 

		(e)	Calculation Agent.  The Calculation Agent is Party A, unless otherwise
specified in a Confirmation in relation to the relevant Transaction.

 

			For the avoidance of doubt, if a party hereto is designated as the Calculation Agent, Section 5(a)(ii)
shall not include any failure by that party to comply with its obligations as Calculation Agent.

 

		(f)	Credit Support Document.  Details of any Credit Support Document:―

 

In relation to Party A: None.

 

In
relation to Party B: (i) (North Dakota) Mortgage, Security Agreement, Fixture Filing,
Financing Statement and Assignment of Production and Revenue (“Mortgage”),
(ii) Security Agreement, (iii) Financing Statements, (iv) Deposit Account Control Agreement, (v) Three Party Lockbox Agreement
(together with a Lockbox Management Agreement between Party A and Party B), (vi) Letter in Lieu, and (vii) Notice of Assignment
of Proceeds.

 

		(g)	Credit Support Provider.

 

Credit Support Provider means
in relation to Party A, none.

 

Credit Support Provider means
in relation to Party B, none.

 

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		(h)	Governing Law.  This Agreement will be governed by and construed
in accordance with the Laws of the State of New York (without reference to choice of law doctrine).

 

			Waiver of Jury Trial. Each party waives, to the fullest extent permitted by applicable
Law, any right it may have to a trial by jury in respect of any suit, action or proceeding relating to this Agreement or any Transaction.
Each party:

 

		(i)	certifies that no representative, agent or attorney of the other party has represented, expressly
or otherwise, that such other party would not seek to enforce the foregoing waiver in the event of any such suit, action or proceeding;
and

 

		(ii)	acknowledges that it and the other party have entered into this Agreement, in reliance on, among
other things, the mutual waivers and certifications of this provision.

 

		(i)	Netting of Payments.  ”Multiple Transaction Payment Netting”
will apply for the purpose of Section 2(c) of this Agreement to any Transactions of the same product type (in each case starting
from the date of this Agreement).

 

		(j)	“Affiliate”
                                                                            will have the meaning specified in Section 14
                                                                            of this Agreement.

 

		(k)	Absence of Litigation. For the
purpose of Section 3(c):―

 

“Specified Entity”
means in relation to Party A, not applicable.

 

“Specified Entity”
means in relation to Party B, not applicable.

 

		(l)	No Agency.  The provisions of Section 3(g) will apply to this Agreement.

 

		(m)	Additional Representations will apply. For the purpose of Section 3 of this Agreement,
each of the following will constitute an Additional Representation:―

 

		(i)	Relationship Between Parties.   Each party will be deemed to represent
to the other party on the date on which it enters into a Transaction that (absent a written agreement between the parties that
expressly imposes affirmative obligations to the contrary for that Transaction):―

 

		(A)	Non-Reliance.  It is acting for its own account, and it has made its own
independent decisions to enter into that Transaction and as to whether that Transaction is appropriate or proper for it based upon
its own judgment and upon advice from such advisers as it has deemed necessary. It is not relying on any communication (written
or oral) of the other party as investment advice or as a recommendation to enter into that Transaction, it being understood that
information and explanations related to the terms and conditions of a Transaction will not be considered investment advice or a
recommendation to enter into that Transaction. No communication (written or oral) received from the other party will be deemed
to be an assurance or guarantee as to the expected results of that Transaction.

 

		(B)	Assessment and Understanding.  It is capable of assessing the merits of
and understanding (on its own behalf or through independent professional advice), and understands and accepts, the terms, conditions
and risks of that Transaction. It is also capable of assuming, and assumes, the risks of that Transaction.

 

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		(C)	Status of Parties.  The other party is not acting as a fiduciary for or an adviser
to it in respect of that Transaction.

 

		(ii)	Party B represents to Party A (with such representations deemed to be repeated by Party B on each
date on which a Transaction is entered into) that:

 

		(A)	Licenses, Permits, Authorizations. Party B has fulfilled all requirements for obtaining
and has obtained and maintained all licenses, permits, operating authorities and other authorizations necessary for the conduct
of the business of Party B or for Party B or any Operators to operate or maintain the Property which the failure to obtain and
maintain could result in the breach of representations regarding Defensible Title, and Party B or any such Operator is fully qualified
to own and hold such Property and to exercise in all material respects the rights under all leases, contracts or other documents
governing the operation or maintenance of the Property. The continuation, validity and effectiveness of each such license, permit
and other authorization are not and will in no way be adversely affected by the Transactions contemplated by this Agreement. Except
as set forth on Appendix I attached hereto, as of the date hereof, Party B is not in material breach of, or in default under
the terms of, and has not engaged in any activity which would cause revocation or suspension of, any of its licenses, permits or
authorizations necessary for the conduct of the business of Party B or for Party B or any Operators to operate or maintain the
Property.

 

		(B)	Basic Documents. Party B’s Basic Documents as of the date hereof are set forth
on Appendix II attached hereto. With respect to the Basic Documents:

 

		(a)	all are in full force and effect in accordance with their terms and constitute valid and binding
obligations, except as limited by applicable bankruptcy or other debtor relief laws and by general equitable principles;

 

		(b)	to Party B’s knowledge, no other party to any Basic Document (or any successor in interest
to that party) is in breach or default with respect to any of its obligations under the Basic Documents;

 

		(c)	no party to any Basic Document has given Party B or has threatened to give Party B notice of any
action to terminate, cancel, rescind or procure a judicial reformation of any Basic Document or any of their provisions; and

 

		(d)	the execution and delivery of this Agreement and the consummation of the Transactions contemplated
by this Agreement will not result in a breach of, a default under, or other violation of the provisions of any Basic Document.

 

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		(C)	Farmout Agreements and Subject Contracts, Etc. With respect to the oil, gas and/or
mineral leases comprising the Properties, and except as expressly set out on Appendix II attached hereto:

 

		(a)	there are no outstanding farmout agreements, obligations to drill additional wells or agreements
to engage in other development operations, except for obligations arising under offset well provisions or obligations arising under
provisions of any Operating Agreement which allow the parties to elect whether or not they will participate in development activities
other than as specified in those leases, contracts and other agreements;

 

		(b)	there are no limitations as to the depths covered or substances to which such interests purport
to apply other than as specified in those leases, contracts and other agreements; and

 

		(c)	there are no royalty provisions (other than those allowing a lessor the right to take in kind)
requiring the payment of royalties on any basis other than as specified in those leases, contracts and other agreements.

		(D)	Operating Agreements. With respect to the operating agreements (“Operating
Agreements”) relating to Party B’s Working Interest and Net Revenue Interest in the Property,

 

		(a)	Appendix II lists all Operating Agreements to which the Property is subject and the Operators
for such Property, which Operators are hereby Approved by Party A;

 

		(b)	there are no outstanding payments which are past due or which Party B or, to the best of Party
B’s knowledge, any predecessor of Party B has committed to make which have not been or are not being paid within the terms
required; and

 

		(c)	there are no operations under any of the Operating Agreements with respect to which Party B has
become a non-consenting party nor are there any non-consenting penalties binding or that will become binding upon Party B that
are not reflected in the Net Revenue Interest or Working Interest as set out on Appendix III.

		(E)	Debt Instruments. Appendix IV attached hereto sets forth a complete and correct
list of all documents, instruments and agreements that as of the date hereof require or could in the future require payments by
Party B or its Subsidiaries that relate to payments that are not usual, customary and recurring in the oil and gas, exploration
and production industry.

 

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		(F)	Hedging Agreements. Other than this Agreement, Appendix V attached hereto
sets forth, as of the date hereof, a true and complete list of all hedging agreements of Party B, the material terms thereof (including
the type, term, effective date, termination date and notional amounts or volumes), the net mark to market value thereof, all credit
support agreements relating thereto (including any margin required or supplied) and the counterparty to each such agreement.

 

		(G)	Marketing of Production. Except as set forth on Appendix VI attached hereto,
no purchase or sale agreements exist as of the date hereof which are not cancellable on sixty (60) days notice or less without
penalty or detriment for the sale of production from Party B’s Hydrocarbons attributable to the Property (including, without
limitation, calls on or other rights to purchase, production, whether or not the same are currently being exercised) that (a) pertain
to the sale of production at a fixed price and (b) have a maturity or expiry date of longer than six (6) months from the date hereof.
Each Purchaser as at the date of this Agreement is identified on Appendix XIII attached hereto together with such Purchaser’s
contact information.

 

		(H)	Preferential Rights and Consents. There are no outstanding preferential rights or
consents to assign affecting the Property that have not been satisfied in full by Party B.

 

		(I)	Name; Executive Offices. The name of Party B, as listed in its Charter Documents
on file in the public records of its jurisdiction of organization, is American Eagle Energy Corporation and AMZG, Inc., respectively.
Party B’s principal place of business and chief executive offices are located at the address specified in Part 4(a).

 

		(J)	Capitalization; Ownership; Subsidiaries. AEEC owns one hundred percent
(100%) of all outstanding Equity Interests of AMZG, Inc. There are no other classes, types or designations of Equity Interests
in AMZG, and no Person holds any right that could result in the transfer or issuance of any Equity Interest in AMZG. Except as
listed on Appendix VII, Party B has no Subsidiaries.

 

		(K)	Solvency. Party B is Solvent and will be Solvent after
giving effect to the transactions contemplated by this Agreement.

 

		(L)	Omissions and Misstatements. Party B has disclosed
in writing to Party A all agreements, and all other matters known to Party B, that could, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect. All financial and other information furnished in writing by or on behalf of Party
B to Party A in connection with the negotiation or performance of this Agreement or any other Credit Support Document, when taken
as a whole, do not contain any material misstatement of fact or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading; but, with respect to financial projections,
Party B represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the
time. There is no fact peculiar to Party B which could reasonably be expected to have a Material Adverse Effect or in the future
is reasonably likely to have a Material Adverse Effect and which has not been set forth in this Agreement or the Credit Support
Documents. There are no statements or conclusions in any Reserve Report which are based upon or include misleading information
or fail to take into account material information regarding the matters reported therein.

 

    	44

    	 

    

 

		(M)	Commissions; Expenses. Except for the commission that
will be due to C.K.Cooper & Company, no broker’s or finder’s fees or commissions have been paid or will be payable
by Party B to any Person in connection with the transactions contemplated by this Agreement, except as payable to Party A or its
Affiliates.

 

		(N)	Tax Returns; Taxes. Party B has timely filed (after giving effect to any applicable
extensions) all U.S. federal income tax and all other material tax returns (foreign, state and local) required to be filed and
has paid all taxes (including interest and penalties) due and payable and required to be paid by them, except for amounts contested
in good faith by Party B through appropriate proceedings timely filed and against which Party B maintains adequate reserves in
accordance with GAAP. No assessments have been made by any Governmental Authority against Party B or any of the Collateral that
have not been paid (except for assessments protested in good faith by Party B through appropriate proceedings timely filed and
against which Party B maintains adequate reserves in accordance with GAAP) nor has any penalty or deficiency been assessed by any
Governmental Authority. As of the effective date of this Agreement, no Governmental Authority has notified Party B that any U.S.
federal income tax or other tax return is under examination, nor is the result of any prior examination being contested by Party
B. Except with respect to taxes being contested in good faith by Party B through appropriate proceedings timely filed and against
which Party B maintains adequate reserves in accordance with GAAP, no material tax Liens have been filed against Party B or any
of the Collateral.

 

		(O)	Litigation; Governmental Proceedings. Except as set forth on Appendix VIII,
no claim, action, suit or other proceeding (collectively, an “Action”) by any Governmental Authority or any
other Person is pending or, to Party B’s knowledge, threatened against Party B or that relates to any of the Collateral.
With respect to the Actions set forth on Appendix VIII, Party B has not accepted liability in connection with any Action
except in the specific instances described on Appendix VIII, none of which could reasonably be expected to have a Material
Adverse Effect.

 

		(P)	Debt. Upon consummation of the transactions contemplated by this Agreement, Party
B will have no Debt outstanding for borrowed money owing to any third party, other than the obligations under this Agreement and
Debt permitted under Part 6(i).

 

    	45

    	 

    

 

		(Q)	USA PATRIOT Act Representation. Party B is not a country, individual or entity named
on the Specifically Designated National and Blocked Persons list issued by the Office of Foreign Asset Control of the Department
of the Treasury of the United States of America.

 

		(R)	Contingent Liabilities. Except for (a) obligations arising under bonds required by
Law and identified on Appendix IX, (b) indemnity and other customary obligations of a customary nature assumed or incurred
(excluding Debt for borrowed money) in favor of any Person from whom Party B acquired any of the Collateral, and (c) Debt permitted
by Part 6(i), Party B has not assumed, guaranteed, endorsed or otherwise become directly, indirectly or contingently liable for
any liability of any other Person.

 

		(S)	Investment Company. Party B is not an “investment company” within the
meaning of the Investment Company Act of 2005, as amended.

 

		(T)	No Pending Sale or Financing. Except as described on Appendices XVII and XVIII, no
agreement, whether written or oral, exists between Party B and any other Person regarding the purchase, sale or financing of any
of the Collateral.

 

		(U)	Employee Plans. Except as set forth on Appendix X, Party B has no Employee
Plans.

 

		(V)	No Material Adverse Effect. Since the later of (i) January 1, 2012 and (ii) date
of the most recent audited financial statements delivered to Party A, no Material Adverse Effect has occurred.

 

		(W)	Deposit Accounts. Except as set forth on Appendix XI, Party B does not maintain
any deposit accounts (as defined in the UCC).

 

		(X)	Labor Matters. Party B is not in violation of any Law relating to labor matters and
all payments due and payable by Party B for employee health and welfare insurance have been paid or accrued as a liability on its
books.

 

		(Y)	No Default. No default exists or is reasonably likely to result from Party B’s
entry into or performance under any Credit Support Document or under this Agreement. No event or circumstance exists which, with
the expiry of a grace period, the giving of notice or the making of any determination by any other Person would constitute a default
under any other agreement, whether written or oral, by which Party B is bound or to which any of the Collateral is subject.

 

		(Z)	Priority. Subject to Permitted Liens, the Security Documents have or will have first
ranking priority and none is subject to any prior ranking or pari passu ranking Lien.

 

    	46

    	 

    

 

		(AA)	Use of Proceeds. The prepayment proceeds advanced by Party A to Party B under this
Agreement will be used by Party B only for the purposes described in Part 6(t).

 

		(n)	Recording of Conversations. Each party:

 

		(i)	acknowledges that telephone conversations between the trading, marketing and other relevant personnel
of the parties in connection with this Agreement or any potential Transaction will be recorded;

 

		(ii)	consents to the recording of telephone conversations between the trading, marketing and other relevant
personnel of the parties in connection with this Agreement or any potential Transaction;

 

		(iii)	has obtained any necessary consent of, and has given any necessary notice of such recording to,
its relevant personnel;

 

		(iv)	agrees, to the extent permitted by applicable Law, that recordings may be submitted in evidence
in any Proceedings and that such party will not object to the admissibility of the recording on the basis that the same was not
originated or maintained in documentary form; and

 

		(v)	agrees, to the extent permitted by applicable Law, this section constitutes effective notice of
and consent to such recording.

 

    	47

    	 

    

 

Part 5.    Other Provisions.

 

		(a)	Definitions. Unless otherwise specified in a Confirmation, this Agreement and each
Transaction between the parties are subject to the latest set of any published ISDA Definitions in existence from time to time
which are specifically relevant to the Transaction (the “Definitions”) each as published by either the International
Swaps & Derivatives Association, Inc., or the International Swap Dealers Association, Inc., as the case may be. Any amendment
to such Definitions subsequent to their initial publication, or any new Definitions published, will only be effective as to Transactions
entered into on or after the date of amendment or publication.

 

		(b)	Inconsistency. At the end of Section 1(b), the following sentence is inserted:

 

“In the event of any
inconsistency between the Definitions and this Master Agreement (including the Schedule), the Master Agreement will prevail.”

 

		(c)	Amendment of Section 2. A new Section
2(a)(iv) is inserted as follows:

 

		“(iv)	The
                                                                                         condition precedent in Section 2(a)(iii)(1)
                                                                                         does not apply to a payment or delivery
                                                                                         due to be made to a party if it has satisfied
                                                                                         in full all its payment and delivery
                                                                                         obligations under Section 2(a)(i) and
                                                                                         Section 9(h) of this Agreement and has
                                                                                         no future payment or delivery obligations,
                                                                                         whether absolute or contingent, under
                                                                                         Section 2(a)(i) or Section 9(h).”

 

		(d)	Change of Accounts. For the purposes of Section 2(b) of this Agreement both parties
agree that such new account so designated shall be in the same tax jurisdiction as the original account.”

 

		(e)	Tax Events. Section 5(b)(iii) is amended by deleting the words “, or
there is a substantial likelihood that it will,” where they appear in that clause.

 

		(f)	Procedures for Confirming Transactions. Section 9(e) of this Agreement is amended
by the addition of the following terms:

 

		“(iii)	With respect to each Transaction entered
into pursuant to this Agreement and for the purposes of Section 9(e)(ii), Party A shall, on or promptly after the relevant Trade
Date, send Party B a Confirmation confirming that Transaction and Party B shall promptly then confirm the accuracy of or request
the correction of such Confirmation. In the absence of manifest error, where Party B fails to confirm the accuracy of or request
the correction of a Confirmation within three Local Business Days after it was sent, the terms of a Confirmation will be binding
on and conclusive against Party B.

 

			Delivery of a Confirmation is effected whether a party uses facsimile, email or an electronic
messaging system, and irrespective of the form of delivery used by the other party to confirm the terms of the relevant Transaction.
The requirement of this Agreement that the parties exchange Confirmations shall for all purposes be satisfied by following the
procedure set out in this paragraph.

 

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			Where a Transaction is confirmed by means of a facsimile, email or an electronic messaging system,
such message will constitute a Confirmation even where not so specified in that Confirmation.”

 

		(i)	Notices. Section 12 of the Agreement is amended by deleting the following words where
they appear on lines 2 and 3 of Section 12(a):

 

			“(except that a notice or other communication under Section 5 or 6 may not be given by
electronic messaging system or email).”

 

and replacing
it with:

 

“(except that a notice
or other communication under Section 5 or 6 may not be given by electronic messaging system).”

 

		(j)	Close-out Amount. At the end of the definition of Close-out Amount in Section 14,
the following sentence is inserted:

 

			“A Close-out Amount is not required to be the market value of the Terminated Transaction
or group of Terminated Transactions and, subject to Section 6(e)(ii)(3), the Determining Party is not obliged to use the mid-market
quotations or mid-market valuations in determining a Close-out Amount.”

 

		(k)	2002 Master Agreement Protocol. The parties agree that, with effect from the date
of this Agreement, the terms of each Annex to the 2002 Master Agreement Protocol published by the International Swaps and Derivatives
Association Inc., (the “Protocol”) shall apply to this Agreement as if the parties had adhered to the Protocol without
amendment.

 

		(l)	Miscellaneous. With effect from and including the date of this Agreement the parties
agree that every transaction between them is a Transaction governed by this Agreement (whether or not the parties refer to this
Agreement when entering into or confirming the transaction) unless the terms of this Agreement have been expressly excluded or
any confirmation of such transaction is expressed to be governed by another agreement. Furthermore, AEEC and AMZG acknowledge
that their obligations under this Agreement and any Transaction are joint and several.

 

For the purpose of this clause
‘transaction’ means a transaction between the parties, whether entered into before, on or after the commencement of
this Agreement, of the nature of a Specified Transaction.

 

		(m)	Payment of
Premium     Unless otherwise agreed in writing by the parties, with respect to any premium related to a Transaction that is
an option, if any such premium is not paid on the date such premium is due to be paid under the terms of the Transaction, the
seller of such Transaction may elect:

 

		(i)	to accept a late payment of such premium;

 

		(ii)	to give written notice of such non-payment and, if such payment shall not be received within one
Local Business Day of such notice, treat the related Transaction as void; or

 

    	49

    	 

    

 

		(iii)	to give written notice of such non-payment and, if such payment shall not be received within one
Local Business Day of such notice, treat such non-payment as an Event of Default under Section 5(a)(i) of this Agreement.

 

If the seller of such option
Transaction elects to act under either (i) or (ii) above, the buyer of such Transaction shall pay all out-of-pocket costs and actual
damages incurred in connection with such unpaid or late premium or void Transaction, including, without limitation, interest on
such premium in the same currency as such premium at the then prevailing market rate and any other costs or expenses incurred by
the seller of the Transaction in covering its obligations (including, without limitation, a delta hedge) with respect to such Transaction.

 

		(n)	ISDA August 2012 DF SupplementThe parties
agree that the ISDA August 2012 DF Supplement Schedules 1, 2 and 3 (“August 2012 DF Supplement”) as published
by the International Swaps and Derivatives Association, Inc. (“ISDA”), are incorporated into this Agreement,
and shall apply to and form part of this Agreement, effective as of the later of the date of this Agreement and the date of registration
by Party A as a swap dealer with the U.S. Commodity Futures Trading Commission (“CFTC”) (such later date the
“Implementation Date”).

 

		(o)	Complaints

Any complaints with respect to
Party A may be directed as follows:

	Name/Department:	Complaints Officer
	Address:	Macquarie Bank Limited, GPO Box 4294, SYDNEY NSW 1164, Australia
	Email:	swapcomplaints@macquarie.com  
	Phone:	         +61 2 8232 3333

 

		(p)	Swap disclosures

Party A hereby provides Party
B with the disclosures contained in the General Disclosure Statement and annexes thereto (together, the “ISDA DF Disclosure”)
at www.macquarie.com/mgl/com/swap-disclosures, and Party B agrees to such disclosures. The ISDA DF Disclosure will apply to all
standard Transactions (as defined in the ISDA DF Disclosure) between the parties. Where the ISDA DF Disclosure is not sufficient
to address all material risks and characteristics related to Transactions between the parties, Party A may provide Party B with
alternative (or supplementary) disclosures suitable for such Transactions.

 

		(q)	Required Notifications and Disclosures

Party B agrees (i) that the following
e-mail address may be used for the delivery by Party A of notifications and any informational disclosures given pursuant to CFTC
Regulations, and (ii) for the purposes of Schedule 2, Part 1, Section 2.3 of the August DF Protocol, the “Notices Procedures”
applicable to Party B includes written notice by e-mail delivered to the following address:

Email: bradcolby@amzgcorp.com

 

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		(r)	Questionnaires

Party B agrees to provide to
Party A, upon or prior to execution of this Agreement, a completed questionnaire in the form of (i) the ISDA August 2012 DF Protocol
Questionnaire, including any Addenda thereto, published by ISDA (“ISDA Questionnaire”), or (ii) the “Macquarie
Bank Limited/Macquarie Energy LLC Onboarding Questionnaire for Swap Counterparties” provided by Party A to Party B (“Macquarie
Questionnaire”). Party B agrees that all information and representations provided by it in either the ISDA Questionnaire
or the Macquarie Questionnaire will constitute DF Supplement Information for the purposes of the August 2012 DF Supplement. In
the event of any conflict between the August 2012 DF Supplement Schedules incorporated in Part 5(m) above and the DF Schedules
referred to in any ISDA Questionnaire, Part 5(m) shall govern.

 

    	51

    	 

    

 

Part 6.    Additional Covenants

 

Party B covenants and
agrees that, so long as there are any Transactions (or any amounts due from Party B to Party A are) outstanding under this Agreement,
Party B will comply with the following covenants:

 

		(a)	Affiliate Transactions.     Party B shall
not enter into any transaction with any Affiliates without the Approval of Party A unless such Affiliate has executed a subordination
agreement with Party A and in a form and substance satisfactory to Party A, in which case, Party B must give no less than ten (10)
days written notice to Party A in advance of such transaction, and, if Approved by Party A, Party B shall conduct those transactions
on an arm’s length basis.

 

		(b)	Insurance. Party B
shall:

 

		(i)	continuously keep all Personal Property together with all improvements on real property insured
for replacement value of like kind and quality with insurance companies licensed or approved to do business in the jurisdictions
in which the Property are located with a Best’s Rating of A or better, or as otherwise reasonably satisfactory to Party A,
against loss or damage by fire or other risk usually insured against by other prudent owners in similar businesses similarly situated
under extended coverage endorsement and against theft, burglary, and pilferage together with other insurance covering any other
hazards as Party A may from time to time reasonably request;

 

		(ii)	deliver certificates of insurance and copies of insurance policies as required under Part 6(b)(i)
above. All such insurance shall contain endorsements in form satisfactory to Party A showing Party A as a loss payee and additional
insured as its interest may appear. Subject to Part 6(b)(i) above, all casualty and property damage insurance proceeds received
by Party A will be retained (or, if Party B receives any such insurance proceeds, it shall promptly deposit such insurance proceeds
into an account nominated by Party A to be retained) by Party A at its option, for application to the payment of such portion of
any amounts owed to Party A pursuant to this Agreement as Party A may determine in its reasonable discretion or shall be applied
to repair, restore or replace any such insurable loss or damage, provided that the proceeds of the insurance shall be deposited
by Party B into an account nominated by Party A and, so long as no Event of Default, Termination Event or Additional Termination
Event shall have occurred and be continuing, at the request of Party B, such proceeds shall be disbursed to Party B upon such terms
and conditions as Party A may deem appropriate for its protection to pay the cost of repairing, replacing or restoring Collateral
or purchasing replacement Collateral;

 

		(iii)	promptly, upon Party B becoming aware thereof, notify Party A of the occurrence or existence of
an event resulting in a material claim in excess of $100,000 under any insurance and the estimated amount thereof. In furtherance,
but not in limitation of the requirements of the preceding sentence, Party B shall continuously keep and maintain in full force
and effect during the term of this Agreement, at Party B’s sole cost and expense, original insurance policies for which the
payment of premiums are current containing waivers of subrogation by the respective insurers and non contributory standard mortgagee
clauses or their equivalent or a satisfactory mortgagee loss payable endorsement in favor of Party A providing the types of insurance
covering each of the Property and the interest and liabilities incident to the ownership, possession and operation thereof as specified
on Appendix XII, in each case to the extent such insurance is available on commercially reasonable terms;

 

    	52

    	 

    

 

		(iv)	deliver to Party A all certificates of insurance (and if requested by Party A, copies of all insurance
policies and endorsements) which are required to be obtained and maintained by Party B. Such certificates shall show that (i) such
insurance is in full force and effect in accordance with the provisions of this Agreement, (ii) such insurance is non cancelable
without at least fifteen (15) days prior written notice to the Party A sent by United States registered or certified mail, return
receipt requested, and (iii) written notice shall be sent to the Party A in the same manner at least fifteen (15) days prior to
any non renewal of such policies;

 

		(v)	obtain at least fifteen (15) days prior to the expiration date of each policy maintained pursuant
to this Part 6(b)(v) hereof, a renewal or replacement thereof and deliver to Party A a certificate of such renewal or replacement
policy; and

 

		(vi)	notwithstanding the foregoing, Party B shall at all times employ industry standard practices for
insurance coverages to include, but not limited to, drilling, workovers, flowline repairs, rig work and facilities work. Party
B will exercise commercially reasonable efforts to ensure that third-party operators also carry such insurance coverages. To the
extent Party B’s existing coverage is not in compliance or falls below those standard for the industry for the type and location
of the Property and Personal Property, as reasonably determined by Party A, Party B shall promptly act to increase, if necessary,
insurance coverages and coverage amounts to come into compliance with such industry standards, in each case to the extent such
insurance is available to Party B on commercially reasonable terms.

 

		(c)	Hedging Hydrocarbon Production.  (i) Party
B shall enter into one or more Confirmations at the request of Party A from time to time including, without limitation, in connection
with Party B’s (A) lease operating expenses and (B) taxes and other assessments; (ii) Party B will not enter into any Hedging
Agreements or transactions thereunder (with any party including Party A) unless Approved by Party A, which Approval may be conditioned
upon the hedged production, when taken in aggregate, does not exceed eighty percent (80%) of the PDP Projected Production produced
in the following five (5) years. Additionally, Party B will not purchase, assume, or hold a speculative position in any commodities
market or futures market or enter into any Hedging Agreement or similar hedge arrangements for speculative purposes; or other than
the Hedging Agreements required to be entered into and maintained pursuant to Part (c)(i), be party to or otherwise enter into
any Hedging Agreement which (A) is entered into for reasons other than as a part of its normal business operations as a risk management
strategy and/or hedge against changes resulting from changes in Hydrocarbon commodity prices, or (B) contains provisions requiring
or providing for (w) margin calls, (x) credit support of any kind (including letters of credit), (y) security interests or liens
on any of Party B’s Property or recourse to Party B or to the Property or other Collateral or (z) adequate assurance.

 

    	53

    	 

    

 

		(d)	Purchasers of Hydrocarbons.  Party B shall:

 

		(i)	in the event that any Purchaser of Hydrocarbons has its senior-most unsecured debt assigned a rating
of less than investment grade by either of Standard & Poor’s Ratings Group or Moody’s Investors Services, Inc.,
upon the request of Party A, Party B will (I) use all reasonable efforts to cause the Purchaser to provide cash deposits or one
or more letters of credit, in form and substance and from a bank satisfactory to Party A in connection with its purchase of Hydrocarbons
from the Property, (II) to the extent allowed under applicable contracts, sell Hydrocarbons only to Purchasers who are creditworthy
in Party A’s reasonable judgment or who prepay, or (III) exercise its right to take the Hydrocarbons in kind and sell to
Purchasers of Hydrocarbons who are creditworthy in Party A’s reasonable judgment; to the extent Party B is legally entitled
to take such action;

 

		(ii)	after the date of this Agreement, give Party A thirty (30) days prior written notice if a Person
other than the Purchasers identified in Appendix XIII to this Agreement which have been issued a Notice of Assignment of
Proceeds that are executed on the date of this Agreement will become a Purchaser of Hydrocarbons. The notice will contain the Person’s
name and address (including contact person).
	 	 	 

		(e)	Dividends and Distributions. Without the Approval of Party A, Party B will not:

 

		(a)	declare or pay any cash dividends or distributions;

 

		(b)	declare or make any non-cash distribution;
	 	 	 

			

		(c)	(other than issuances in one or more transactions of stock by AEEC to the extent such issuance
does not result in a Change of Control) issue additional Equity Interests of any class to any Person unless such Equity Interests
are subordinated to Party A and documented to the satisfaction of Party A; or

 

		(d)	take any other action that has substantially the same effect as any of the actions prohibited under
items (a)–(c) above.

 

		(f)	Ownership and Business Operations. Party B will not contract for operation of the
Property except with an Operator Approved by Party A who has executed a Subordination Agreement acceptable to Party A.

 

		(g)	Liens and Encumbrances. Except for Permitted Liens, Party B will not:

 

		(i)	suffer to exist any Lien or consent to the filing of any financing statement on any of its Property;
or

 

		(ii)	dedicate, sell, encumber or dispose of, or suffer to exist any agreement for the sale, disposition
or encumbrance of the Property or of any Hydrocarbon production attributable to the Property except the sale of Hydrocarbons in
the ordinary course of business.

 

		(h)	Subsidiaries and Divestitures. Party B will not create
any direct or indirect Subsidiary or divest any of the Collateral by (i) transferring them to any future Subsidiary or (ii) by
entering into a partnership, joint venture, or similar arrangement without the Approval of
Party A. Party B shall not enter into any management contract permitting a third party to exercise management rights with respect
to Party B’s business, without the Approval of Party A.

 

    	54

    	 

    

 

		(i)	Debt. Party B will not create, incur, assume or suffer to exist any Debt, except:

 

		(i)	Debt pursuant to this Agreement or any Credit Support Document;

 

		(ii)	Capital Leases which are identified in Appendix XIV to this Agreement (including such updates
to Appendix XIV to this Agreement that are prepared by Party B from time to time);

 

		(iii)	accounts payable and accrued expenses, liabilities or other obligations to pay the deferred purchase
price of property or services, from time to time incurred in the ordinary course of business;

 

		(iv)	letters of credit, surety or other bonds incurred in the ordinary course of business, and if any
such letter of credit, surety or other bond is for an amount in excess of $250,000, Approved by Party A; provided, however, that
any of the foregoing shall be permitted if required by a competent regulator having jurisdiction over Party B or the Property;

 

		(v)	endorsements of negotiable instruments for collection in the ordinary course of business;

 

		(vi)	other Debt to third parties not to exceed $250,000 in the aggregate;

 

		(vii)	amounts owed to NextEra Energy Gas Producing, LLC pursuant to Carry Agreement dated April 16, 2012,
as amended; and

 

		(viii)	other Debt incurred with the Approval of Party A, and fully subordinated (pursuant to a Subordination
Agreement in a form and substance satisfactory to Party A) to all amounts owing or to be owing by Party B to Party A pursuant to
this Agreement.

 

		(j)	Taxes. Party B will pay, or will cause Operator to pay, all taxes and assessments
of every kind and character charged, levied or assessed against the Property, or any part thereof, and all franchise taxes, production,
severance or other similar taxes or charges, before any such taxes and assessments shall become delinquent; but Party B shall have
the right to contest any such tax in good faith, and while any such contest is pending shall not be in default hereunder.

 

		(k)	Books and Records; Visit Property. Party B will keep accurate books and records in
accordance with GAAP in which full, true and correct entries shall be promptly made with respect to operations on the Property,
and all such books and records shall during reasonable business hours upon three (3) Local Business Days prior written notice be
subject to inspection by Party A and its duly accredited representatives, but not as to unreasonably interfere with the business
of Party B. In addition, Party A and its duly accredited representatives shall have the right to visit the Property during reasonable
business hours upon three (3) Local Business Days prior written notice, but not as to unreasonably interfere with the business
of Party B; provided further, however, that Party A executes a form of release and indemnity satisfactory to Party
B with respect to Party A’s visit to the Property.

 

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		(l)	Guaranties. Other than Debt permitted by Part 6(i),
Party B will not assume, guaranty or endorse or otherwise become directly or contingently liable for any Debt of any other Person,
except for the indemnification obligations contained in this Agreement and the Credit Support Documents and
agreements entered into in the ordinary course of business with indemnifications common in the industry that are directly related
to the Property. For purposes of this Part 6(l), the term “guaranty” includes any agreement, whether contingent or
otherwise, to purchase, repurchase or otherwise acquire any obligation or liability of any other Person, or to purchase, sell or
lease, as lessee or lessor, property or services, in any case primarily for the purpose of enabling another Person to make payment
of any Debt, or to make any payment (whether as a capital contribution, purchase of an equity interest or otherwise) to assure
a minimum equity, asset base, working capital or other balance sheet or financial condition, in connection with a Debt of another
Person, or to supply funds to or in any manner invest in another Person in connection with that Person’s Debt.

 

		(m)	Environmental Matters.

 

		(i)	Party B shall, at its expense: (i) comply, and shall cause its Property and operations to comply,
with all applicable Environmental Laws, the breach of which could be reasonably expected to have a Material Adverse Effect; (ii)
not dispose of or otherwise release, any Crude Oil, Crude Oil and Natural Gas waste, Hazardous Material, or solid waste on, under,
about or from any of Party B’s Property or any other property to the extent caused by Party B’s operations except in
compliance with applicable Environmental Laws, the disposal or release of which could reasonably be expected to have a Material
Adverse Effect; (iii) timely obtain or file all notices, permits, licenses, exemptions, approvals, registrations or other authorizations,
if any, required under applicable Environmental Laws to be obtained or filed in connection with the operation or use of Party B’s
Property, which failure to obtain or file could reasonably be expected to have a Material Adverse Effect; (iv) promptly commence
and diligently prosecute to completion any assessment, evaluation, investigation, monitoring, containment, cleanup, removal, repair,
restoration, remediation or other remedial obligations (collectively, the “Remedial Work”) in the event any Remedial
Work is required under applicable Environmental Laws because of or in connection with the actual or suspected past, present or
future disposal or other release of any Crude Oil, Crude Oil and Natural Gas waste, hazardous substance or solid waste on, under,
about or from any of Party B’s Property, which failure to commence and diligently prosecute to completion could reasonably
be expected to have a Material Adverse Effect; and (v) establish and implement such procedures as may be necessary to continuously
determine and assure that Party B’s obligations under this subsection (m)(i) are timely and fully satisfied, which failure
to establish and implement could reasonably be expected to have a Material Adverse Effect.

 

		(ii)	Party B will promptly, but in no event later three (3) days of the occurrence of a triggering event,
notify Party A in writing of any threatened action, investigation or inquiry by any Governmental Authority or any threatened demand
or lawsuit by any landowner or other third party against Party B or the Property of which Party B has knowledge in connection with
any Environmental Laws (excluding routine testing and corrective action) if Party B reasonably anticipate that such action will
result in liability (whether individually or in the aggregate) in excess of $100,000, not fully covered by insurance, subject to
normal deductibles.

 

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		(iii)	Party B will provide environmental audits and tests in accordance with American Society of Testing
Materials standards upon reasonable request by Party A and no more than once per year in the absence of any Event of Default, Termination
Event or Additional Termination Event (or as otherwise required to be obtained by Party A by any Governmental Authority), or in
connection with any material future acquisitions of any other Property.

 

		(n)	Reserve Reports.

 

		(i)	Beginning on January 1, 2013 and continuing annually (each report is dated effective as of January
1 throughout the term of this Agreement, Party B shall, at its sole expense, cause an engineering reserve report relating to the
Property to be prepared by the Engineers and delivered to Party A (in each case, the “Reserve Report”). The Reserve
Reports will set forth, without limitation, the projected recoverable reserves attributable to the Working Interests and Net Revenue
Interests of Party B. Party B shall deliver each Reserve Report to Party A within sixty (60) days of its effective date.

 

		(ii)	Preparation of Reports. Party B shall cause each Reserve
Report to be prepared in a manner acceptable to Party A in all respects and similar to those
generally prepared and delivered to financial institutions. For the avoidance of all doubt, each such acceptable Reserve Report
will be prepared in accordance with at least the following assumptions:

 

		(A)	reserves shall be adjusted for cumulative production since the effective date of the prior Reserve
Report;

 

	                (B)	(I)	 for all Natural Gas to be sold by Party B, the
purchase price for each calendar year will be strip pricing determined by Party A based on average NYMEX settlement pricing for
Natural Gas (as adjusted for appropriate quality, transportation and location differentials approved by Party A); and

 

		(II)	for Crude Oil to be sold by Party B, the purchase price for each calendar year shall be strip pricing
determined by Party A based on average NYMEX settlement pricing for Crude Oil (as adjusted for appropriate quality, transportation
and location differentials reasonably approved by Party A).

 

		(C)	reserves will be adjusted to reflect revisions to volume estimates of reserves since the effective
date of the last Reserve Report;

 

		(D)	projected operating expenses and capital expenditures will be adjusted to reflect (a) actual expense
levels incurred since the effective date of the last Reserve Report and (b) projected increases or decreases in anticipated operating
expenses and capital expenditure levels; and

 

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		(E)	each Reserve Report will separately report on PDP Reserves, PDNP Reserves and PUD Reserves and
will utilize any other assumptions that Party A may reasonably request from time to time.

 

		(iii)	Preparation of Additional Reserve Reports. Party A or Party B, at the sole option
of either of them so long as there are any Transactions outstanding under this Agreement, may cause additional Reserve Reports
meeting the requirements of the preceding paragraph to be prepared by any of the Engineers to be delivered to the other party.
Except for the Reserve Report each year required in this Part 6(n) which will be paid for by Party B, the costs and expenses of
any additional reports will be borne by the party requesting the report. Notwithstanding the foregoing, if an Event of Default,
Termination Event or Additional Termination Event has occurred and is continuing, then Party A may request an additional Reserve
Report to be prepared at the sole expense of Party B.

 

		(o)	Certificates

			AMZG will deliver to Party A a certified copy of a Certificate of Good Standing issued by the Secretary
of State of North Dakota with regard to AMZG no later than January 15, 2013.

 

		(p)	Notices of Default and Other Significant Events

Party B will provide written notice
to Party A promptly (but, in any event, within three (3) Local Business Days) after Party B becomes aware that a default has occurred
or that any event has occurred or that any circumstance exists that could reasonably be expected have a Material Adverse Effect,
including:

 

	(i)		any dispute that arises between Party B and any Governmental Authority;

 

	(ii)		the making of a demand or the commencement of any proceeding against
Party B or related to the Properties with an amount in controversy in excess of $100,000;

 

	(iii)		a proposal by any Governmental Authority to acquire any of the Collateral
by condemnation or eminent domain;

 

	(iv)		any change in (i) Party B’s company name (including the creation
or change of any trade name); (ii) the location of Party B’s principal office; (iii) Party B’s company structure or
the jurisdiction in which Party B is organized; (iv) Party B’s organizational identification number; or (v) Party B’s
federal taxpayer identification number;

 

	(v)		the revocation, suspension, forfeiture, expiration or material modification
of any permit;

 

	(vi)		any loss of or damage to any material portion of the Collateral;

 

	(vii)		the failure or refusal to make any payment when due in respect of
any Debt; and

 

	(viii)		the occurrence of any event or circumstance that could, if it continues,
constitute a default by any Person under any of the Basic Documents.

 

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		(q)	Charter Documents. Party
B shall deliver to Party A true and complete copies of all amendments to any of its charter documents; but this Part 6(q) does
not constitute Party A’s Approval of any such amendment.

 

		(r)	Compliance with Law. Party B will: Comply
(and use commercially reasonable efforts to Cause the Operators to comply), in all material respects, with all Laws, including,
without limitation, Laws regarding the collection, payment and deposit of employees’ income, unemployment and Social Security
taxes.

 

	i.		Make (and Cause the Operators to make), properly and timely, all royalty or overriding royalty
payments and payments to all other interest owners in the Properties.

 

	ii.		Comply (and Cause the Operators to comply), in all material respects, with all Laws affecting the
ownership and operation of any of the Properties, including, all Environmental Laws.

 

	iii.		Operate (and Cause the Operators to operate) all Properties (whether or not such Property constitutes
a “facility” under CERCLA) so that no cleanup or other obligation is imposed under CERCLA or any other Law (including
other Hazardous Substance Laws) intended to protect the environment or relating to the generation, transportation or disposal of
hazardous waste which could allow any Person to assert a Lien to secure that obligation on the Collateral, but excluding Liens
being protested in good faith by Party B through appropriate proceedings timely filed and against which Party B maintains adequate
reserves in accordance with Australian Accounting Standards.

 

		(s)	Solvency. Party B will conduct its business
in a manner as is necessary to remain Solvent.

 

		(t)	Use of Proceeds. Party B will use the prepayment
proceeds advanced hereunder from Party A to Party B only for: (i) development of the Property to increase production or Hydrocarbons,
(ii) acquisition of new oil and gas properties, which if they are additional interests in the Property, shall be included as part
of the Property, and (iii) general corporate purposes that are usual and customary in the oil and gas exploration and production
business.

 

		(u)	Evidence of Title. Party B will:

 

	(i)		Deliver to Party A, on or before the date of this Agreement for the
Property set forth on Exhibit A-1 to the Mortgage, title opinions or other evidence of title (including, without limitation, “run
sheets” and a title memo, in each case, certified by a landman Approved by Party A) acceptable to Party A covering no less
than 90% of the PV10 value of the Proved Reserves of the Properties and showing Defensible Title to those Properties vested in
Party B subject only to the Permitted Liens.

 

	(ii)		Deliver to Party A, within 90 days after the completion of each new
Well, a division order title opinion or other evidence of title acceptable to Party A covering such new Well and showing Defensible
Title to Party B’s interest in those Properties on which such new Well is located vested in Party B subject only to Permitted
Liens. 

 

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	(iii)		Deliver to Party A, within 20 days after Party A’s request,
title opinions or updated run sheets or other documentation reasonably acceptable to Party A reflecting (i) Defensible Title in
the Party B’s interest in Property that comprises no less than 90% of the PV10 value of the Proved Reserves of the Party
B’s interest in the Properties, (ii) the recordation of Party A’s Lien related to the Mortgage over all Property for
which Party B has not previously delivered a title opinion under 6(u)(i) above, and (iii) the absence of any Lien other than Permitted
Liens.

 

		(v)	Investments. Party B will not make any
Investment except: (i) certificates of deposit or other obligations issued by a bank Approved by Party A; (ii) obligations of
the United States government or any of its agencies; (iii) Investments consisting of the other Hedging Agreements to the extent
consistent with Part 6(c); and (iv) Investments existing on the date hereof as reflected on Appendix XV.

 

		(w)	Modifications to Documents. Party B will
not waive or modify (or agree to waive or modify) the terms of any Operating Agreement, any Hedging Agreement or any Basic Document
except (i) in the ordinary course of business and (ii) only to extent any such waiver or modification does not result in an adverse
effect on Party A or any eights hereunder or any Credit Support Document.

 

		(x)	Nature of Business. Party B will not allow
any change to be made in the character of Party B’s business as an independent Hydrocarbon exploration and production company.
Party B will not acquire or make any other expenditure (whether such expenditure is capital, operating or otherwise) in or related
to, any oil and gas assets not located within the geographical boundaries of the United States or Canada.

 

		(y)	Fees, Costs and Expenses. Party B will
promptly (and, in any event, within 10 days after the presentation of any invoice by Party A) pay (a) all Related Costs, (b) all
transfer, stamp, mortgage, documentary or other similar taxes, assessments or charges levied by any taxing authority in connection
with this Agreement and the Credit Support Documents or the transactions contemplated by them, (c) all reasonable costs and expenses
incurred by or on behalf of Party A (including the reasonable fees, expenses and disbursements of its attorneys and consultants)
in connection with (i) preparing this Agreement and the Credit Support Documents and any modifications to them, (ii) filing, recording
and registering any Credit Support Documents, (iii) administering the transactions and Confirmation and monitoring Party B’s
compliance with the terms of this Agreement and the Credit Support Documents, (v) enforcing Party A’s rights and remedies
under the Credit Support Documents, and (vi) investigating, prosecuting or defending any claim or alleged claim arising under
or in connection with the Credit Support Documents and the transactions contemplated by them.

 

		(z)	Early Repayment. Party B may at any time prepay the payments advanced to Party B
by Party A (the “Early Repayment”), provided that (i) such Early Repayment shall be for the full amount
set forth in the Confirmations under this Agreement (including Party A’s expected internal rate of return or other returns
set forth therein) and (ii) such Early Repayment shall also include the amount of the Balloon Payment set forth in the Confirmations.

 

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		(aa)	Definitions. For the purposes of this Agreement the following definitions will apply:

 

“Approval”
and “Consent” mean, with respect to any consent or approval sought by Party B and given by Party A, the written
instruments executed by Party A that (a) authorize Party B to take the action (prior to taking such action) for which the consent
or approval is sought and (b) set forth the conditions, if any, upon which the consent or approval is given by Party A. “Approve”
and “Approved” have the correlative meaning.

 

“Basic Documents”
means mineral grants and oil, gas and/or mineral leases (or other documents evidencing its ownership in the Property), operating
agreements, Hydrocarbon purchase, sales, exchange, processing, gathering, treatment, compression and transportation agreements;
farm out or farm in agreements; exploration agreements; participation agreements; carry agreements, unitization agreements; joint
venture, limited or general partnership, dry hole, bottom hole, acreage contribution, purchase and acquisition agreements; area
of mutual interest agreements; salt water disposal agreements, servicing contracts; easement and/or pooling agreements; surface
leases, permits, licenses, rights-of-way, servitudes, or other interests appertaining to the Party B’s interest in the Property
and all other executory contracts and agreements relating to Party B’s Interest in the Property.

 

“Capital Leases”
means, in respect of any Person, all leases which shall have been, or should have been, in accordance with GAAP, recorded as capital
leases on the balance sheet of the Person liable (whether contingent or otherwise) for the payment of rent thereunder.

 

“Cause” means,
when any Person is obligated to cause another Person to take or refrain from taking any action, (a) that the obligor in fact causes
its Affiliates to take or refrain from taking the specified action, or (b) that the obligor uses all commercially reasonable efforts
to cause any non-Affiliate to take or refrain from taking the specified action, as applicable.

 

“CERCLA” means
the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended.

 

“Change of Control”
means the occurrence of any event pursuant to which (a) AEEC ceases to own 100% of the outstanding Equity Interests in AMZG; or
(b) AEEC ceases to be a publicly traded company.

 

“Collateral”
means all of Party B’s right title and Interest in and to the Property and all other assets of Party B covered by the Credit
Support Documents.

 

“Crude Oil”
means all crude oil, condensate and other liquid hydrocarbon substances (excluding liquid hydrocarbon substances defined as Natural
Gas).

 

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“Debt” means,
for any Person, the sum of the following (without duplication): (a) all obligations of such Person for borrowed money or evidenced
by bonds, bankers’ acceptances, debentures, notes or other similar instruments; (b) all obligations of such Person (whether
contingent or otherwise) in respect of letters of credit, surety or other bonds and similar instruments; (c) all accounts payable
and all accrued expenses, liabilities or other obligations of such Person to pay the deferred purchase price of property or services;
(d) all obligations under Capital Leases which are required to be recorded as a liability on the balance sheet of such Person in
accordance with GAAP; (e) all obligations under Synthetic Leases; (f) all Debt (as defined in the other clauses of this definition)
of others secured by a Lien on any property of such Person, whether or not such Debt is assumed by such Person to the extent of
the lesser of the amount of such Debt and the fair market value of such property (only if such Debt is non-recourse to such Person
and is secured by a Lien upon such property); (g) all Debt (as defined in the other clauses of this definition) of others guaranteed
by such Person or in which such Person otherwise assures a creditor against loss of the Debt (howsoever such assurance shall be
made) to the extent of the lesser of the amount of such Debt and the maximum stated amount of such guarantee or assurance against
loss; (h) all obligations or undertakings of such Person to maintain or cause to be maintained the financial position or covenants
of others or to purchase the Debt or property of others; (i) obligations to deliver commodities, goods or services, including,
without limitation, Hydrocarbons, in consideration of one or more advance payments, other than Natural Gas balancing arrangements
in the ordinary course of business; (j) obligations to pay for goods or services whether or not such goods or services are actually
received or utilized by such Person; (k) any Debt of a partnership or limited liability company for which such Person is liable
either by agreement, by operation of law or by a governmental requirement but only to the extent of such liability; (l) Disqualified
Capital Stock; and (m) the undischarged balance of any production payment created by such Person or for the creation of which such
Person directly or indirectly received payment. The Debt of any Person shall include all obligations of such Person of the character
described above to the extent such Person remains legally liable in respect thereof notwithstanding that any such obligation is
not included as a liability of such Person under GAAP.

 

“Default Rate”
shall be amended in the Agreement to delete the existing language and replace with “means a rate per annum equal to the lesser
of (a) ten percent (10%) and (b) the highest interest rate permitted under New York law”.

 

“Defensible Title”
means with respect to each Property, title that (a) entitles the Person to receive (free and clear of all royalties, overriding
royalties and net profits interests or other burdens on or measured by production of Hydrocarbons without regard to whether such
interest appears of record) not less than the Net Revenue Interest set forth on Appendix III (or in such other certificate
or writing provided to Party A by Party B representing the interests in the Property, including, without limitation, any Credit
Support Documents) in all Hydrocarbons produced, saved and marketed from the Property for the productive life of the Property,
free and clear of any Lien other than Permitted Liens.

 

“Disqualified Capital
Stock” means any Equity Interest that, by its terms (or by the terms of any security into which it is convertible or
for which it is exchangeable) or upon the happening of any event, matures or is mandatorily redeemable for any consideration other
than other Equity Interests (which would not constitute Disqualified Capital Stock), pursuant to a sinking fund obligation or otherwise,
or is convertible into or exchangeable for Debt or redeemable for any consideration other than other Equity Interests (which would
not constitute Disqualified Capital Stock) at the option of the holder thereof, in whole or in part, on or prior to the date that
is one (1) year after (a) the final scheduled payment date hereunder; and (b) the date on which Party A agrees in writing that
this Agreement is terminated.

 

“Early Repayment”
has the meaning given to such term in Part 6(aa).

 

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“Employee Plan” means
an employee pension benefit plan covered by Title IV of ERISA.

 

“Engineers”
means MHA Petroleum Consultants LLC, or any other an independent petroleum engineering firm selected by Party B and approved by
Party A in writing from time to time.

 

“Environmental Laws”
shall mean any and all Governmental Requirements and Environmental and Safety Regulations pertaining to health or the environment
in effect in any and all jurisdictions in which Party B is conducting or at any time has conducted business, or where any Property
of Party B is located, including without limitation, the OPA, CERCLA, RCRA, the Safe Drinking Water Act, as amended, the Toxic
Substances Control Act, as amended, the Superfund Amendments and Reauthorization Act of 1986, as amended, the Hazardous Materials
Transportation Act, as amended, and other environmental conservation or protection Laws. The term “oil” shall have
the meaning specified in OPA, the terms “hazardous substance” and “release” (or “threatened release”)
have the meanings specified in CERCLA, and the terms “solid waste” and “disposal” (or “disposed”)
have the meanings specified in RCRA; provided, however, that (a) in the event either OPA, CERCLA or RCRA is amended so as to broaden
the meaning of any term defined thereby, such broader meaning shall apply subsequent to the effective date of such amendment and
(b) to the extent the Laws of the state in which any Property of Party B is located establish a meaning for “oil,”
“hazardous substance,” “release,” “solid waste” or “disposal” which is broader
than that specified in either OPA, CERCLA or RCRA, such broader meaning shall apply to those issues covered by the applicable state
Laws.

 

“Environmental and Safety
Regulations” means all applicable federal, state or local Laws, ordinances, codes, rules, orders and regulations with
respect to any environmental, pollution, toxic or hazardous waste or health and safety Law, including, without limitation, those
promulgated by the United States Environmental Protection Agency, the Federal Energy Regulatory Commission, the Department of Energy,
the Occupational Safety and Health Administration, the Department of the Interior, or any other Governmental Authority, or any
of their predecessor or successor agencies.

 

“Equipment”
has the meaning assigned to that term in the UCC and includes all surface or subsurface machinery, goods, equipment, fixtures,
inventory, facilities, supplies or other personal or moveable property of whatsoever kind or nature (excluding property rented
by Party B or taken to the premises for temporary uses) now owned or hereafter acquired by Party B which are now or hereafter located
on or under any of the lands attributable to the Property which are used for the production, gathering, treatment, processing,
storage or transportation of Hydrocarbons and whether or not attributable to the Property (together with all accessions, additions
and attachments to any thereof), including, without limitation, all Wells, casing, tubing, tubular goods, rods, pumping units and
engines, Christmas trees, platforms, separators, compressors, gun barrels, flow lines, water injection lines, tanks, gas systems
(for gathering, treating and compression), pipelines (including gathering lines, laterals and trunklines), chemicals, solutions,
water systems (for treating, disposal and injection), power plants, poles, lines, transformers, starters and controllers, machine
shops, tools, storage yards and equipment stored therein, telegraph, telephone and other communication systems, loading docks,
loading racks, shipping facilities, platforms, well equipment, wellhead valves, meters, motors, pumps, tankage, regulators, furniture,
fixtures, automotive equipment, forklifts, storage and handling equipment, together with all additions and accessions thereto,
all replacements and all accessories and parts therefor, all manuals, blueprints, documentation and processes, warranties and records
in connection therewith including, without limitation, any and, to the extent permitted, all rights against suppliers, warrantors,
manufacturers, sellers or others in connection therewith, and together with all substitutes for any of the foregoing.

 

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“Equity Equivalents”
means, with respect to any Person (other than an individual), any rights, warrants, options, convertible securities, exchangeable
securities, indebtedness or other rights, in each case exercisable for or convertible or exchangeable into, directly or indirectly,
Equity Interests of such Person or securities exercisable for or convertible or exchangeable into Equity Interests of such Person,
whether at the time of issuance or upon the passage of time or the occurrence of some future event.

 

“Equity Interests”
means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests
in a trust or other equity ownership interests in a Person (other than an individual), and any Equity Equivalents of such Person.

 

“G&A Expenses”
means the actual general and administrative expenses of Party B, including capitalized general and administrative expenses, calculated
in accordance with GAAP, (excluding all (i) costs associated with closing of Party B’s acquisition of the Properties; (ii)
reasonable legal and professional expenses; and (ii) non-cash charges and performance-based compensation pursuant to a plan approved
by Party A in writing).

 

“GAAP” means
generally accepted accounting principles recognized as such by the Financial Accounting Standards Board (or generally recognized
successor) consistently applied and maintained throughout the period indicated and consistent with applicable Laws, except for
changes mandated by the Financial Accounting Standards Board or any similar accounting authority of comparable standing. If any
change in any accounting principle or practice is required by the Financial Accounting Standards Board (or generally recognized
successor) in order for such principle or practice to continue as a generally accepted principle or practice, all financial reports
or statements required hereunder or in connection herewith may be prepared in connection with such change, but all calculations
and determinations to be made hereunder may be made in accordance with such change only if Party B and Party A agree to do so.
Whenever any accounting term is used herein which is not otherwise defined, it shall be interpreted in accordance with GAAP.

 

“Governmental Authority”
means the government of the United States of America, any other nation or any political subdivision thereof, whether state, local
or tribal, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers, jurisdiction or functions of or pertaining to government over
the Property, Party A, Party B or any of their respective Affiliates.

 

“Governmental Requirements”
means, with respect to any Person, any law, statute, code, ordinance, order, determination, rule, regulation, judgment, decree,
injunction, franchise, permit, certificate, license, authorization or other directive or requirement, whether now or hereinafter
in effect, including, without limitation, Environmental Laws, energy regulations and occupational, safety and health standards
or controls, of any Governmental Authority applicable to such Person.

 

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“Hazardous Materials”
means and include (i) all elements or compounds that are contained in the list of hazardous substances adopted by the United States
Environmental Protection Agency and the list of toxic pollutants designated by the United States Congress or the Environmental
Protection Agency or under any Hazardous Substance Laws (as hereinafter defined), and (ii) any “hazardous waste,” “hazardous
substance,” “toxic substance,” “regulated substance,” “pollutant” or “contaminant”
as defined under any Hazardous Substance Laws.

 

“Hazardous Substance
Laws” means CERCLA, RCRA, the Federal Water Pollution Control Act, as amended, 33 U.S.C. 1251 et seq., the Toxic Substances
Control Act, 15 U.S.C. 2601 et seq., the Hazardous Liquid Pipeline Safety Act of 1979, as amended, 40 U.S.C. 2001 et seq., the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. 136 et seq., the Federal Clean Air Act, 42 U.S.C. 7401 et seq., any
so called federal, state or local “superfund” or “super lien” statute, and any other applicable federal,
state or local law, rule, regulation or ordinance related to the remediation, clean up or reporting of environmental pollution
or contamination or imposing liability (including strict liability) or standards of conduct concerning any Hazardous Materials.

 

“Hydrocarbons”
means all Crude Oil and Natural Gas.

 

“Law” means
any current or future law, statute, code, ordinance, order, determination, rule, regulation, judgment, decree, injunction, franchise,
permit, certificate, license, authorization or other directive or requirement enacted, promulgated, adopted or imposed by any Governmental
Authority.

 

“Lien” means
any interest in property (real or personal) securing an obligation owed to, or a claim by, a Person other than the owner of the
Property, whether such interest is based on the common law, statute or contract, and whether such obligation or claim is fixed
or contingent, and including but not limited to (a) the lien or security interest arising from a mortgage, encumbrance, pledge,
security agreement, financing statements, conditional sale or trust receipt or a lease, consignment or bailment for security purposes,
or (b) production payments and the like payable out of oil and gas properties and the Property. The term “Lien” shall
include easements, servitudes, restrictions, permits, conditions, covenants, exceptions or reservations. For the purposes of this
Agreement, Party B shall be deemed to be the owner (to the extent of its interest therein) of any Property which it has acquired
or holds subject to a conditional sale agreement, or leases under a financing lease or other arrangement pursuant to which title
to the Property has been retained by or vested in some other Person in a transaction intended to create a financing.

 

“Material Adverse Effect”
means any effect or matter:

 

		(a)	which has a materially adverse effect on:

 

		(i)	the business, assets, liabilities, prospects or condition (financial or otherwise) of Party B;
or

 

		(ii)	the ability of Party B to perform any payment obligations under this Agreement or any Credit Support
Documents; or

 

		(b)	which could reasonably be expected to result in any Credit Support Document not providing to Party
A the Liens and/or security interests in the assets expressed to be secured under that Credit Support Document.

 

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“Natural Gas”
means all natural gas, and any natural gas liquids and all products recovered in the processing of natural gas (other than condensate)
including, without limitation, natural gasoline, casinghead gas, iso butane, normal butane, propane and ethane (including such
methane allowable in commercial ethane) produced from or attributable to the Property.

 

“Net Revenue Interest”
means, with respect to any Property, the decimal or percentage share of Hydrocarbons produced and saved from or allocable to such
Property, after deduction of Royalty Interests and other burdens on or paid out of such production; provided that if Party B’s
ownership is in the form of a mineral fee or interest, such decimal or percentage share shall be equal to such mineral fee or interest.

 

“OPA” means
the Oil Pollution Act of 1990, as amended.

 

“Operating Cash Flow”
means, on a cash accounting basis, Party B’s gross cash receipts from sales of Production Volumes and all other cash receipts
from whatever source (including, without limitation, if applicable, cash payments received under this Agreement).

 

“Operator”
means each Person identified in Appendix XVI to this Agreement or any other operator Approved by Party A.

 

“Permitted Liens”
means (i) minor irregularities in title which do not (a) materially interfere with the occupation, use and enjoyment by Party B
of any of the Properties in the normal course of business as presently conducted, or (b) materially impair the value of such Properties;
and (ii) Liens arising in the ordinary course of business or incidental to the ownership of the Properties (including, liens of
landlords, vendors, carriers, warehousemen, taxing authorities, mechanics, laborers and material men arising by applicable Law,
and of Operators arising by contract) for sums not yet due or being contested in good faith by appropriate action promptly initiated
and diligently conducted, if such reserves as may be required by GAAP, consistently applied, have been made; provided that any
such Liens do not materially interfere with the occupation, use and enjoyment by Party B of any of the Property or the proceeds
and Hydrocarbons to be attributable thereto; provided further there is no intent to subordinate Party A’s Liens under the
Credit Support Documents.

 

“Person” means
an individual, corporation, partnership, limited liability company, joint venture, trust or unincorporated organization, joint
stock company or other similar organization, governmental authority or any other legal entity, whether acting in an individual,
fiduciary or other capacity.

 

“Personal Property”
means all personal property of every kind, whether now owned or later acquired, including all goods (including Equipment), documents,
accounts, chattel paper (whether tangible or electronic), money, deposit accounts, letters of credit and letter-of-credit rights
(without regard to whether the letter of credit is evidenced by a writing), documents, securities and all other investment property,
supporting obligations, any other contract rights (including all rights under Basic Documents) or rights to the payment of money,
insurance claims and proceeds, all general intangibles (including all payment intangibles and rights to seismic and other geophysical
data) and all permits, licenses, books and records related to the Property or the business of Party B as it relates to the Property
in any way whatsoever.

 

    	66

    	 

    

 

“Production Volumes”
means, with respect to the Property, the product of Party B’s Net Revenue Interest multiplied by gross Hydrocarbons produced
and saved from the Property.

 

“Property”
shall mean the oil and gas properties described in Appendix III to this Agreement and the interest thereunder and production
of Hydrocarbons attributable or allocable to the Property.

 

“Proved Reserves”
has the meaning given that term in the definitions promulgated by the Society of Petroleum Evaluation Engineers and the World Petroleum
Congress as in effect at the time in question; “Proved Developed Producing Reserves” or “PDP Reserves”
means Proved Reserves which are categorized as both “Developed” and “Producing” in such definitions;
“Proved Developed Non Producing Reserves” or “PDNP Reserves” means Proved Reserves which
are categorized as both “Developed” and “Non Producing” in such definitions; and “Proved
Undeveloped Reserves” or “PUD Reserves” means Proved Reserves which are categorized as “Undeveloped”
in such definitions.

 

“Purchaser”
means all Persons, including each Person identified in Appendix XIII to this Agreement or otherwise Approved pursuant to
Part 6(d), who purchase Hydrocarbons from Party B which is attributable or allocable to the Property.

 

“RCRA” means
the Resource Conservation and Recovery Act of 1976, as amended.

 

“Related Costs”
means the reasonable and documented fees and out-of-pocket expenses of counsel for Party A and consultants for Party A and such
other reasonable and documented out-of-pocket, third-party expenses incurred by Party A in connection with the due diligence, negotiation
and preparation of documents relating to this Agreement and the Credit Support Documents and execution, delivery and filing and/or
recording of the Credit Support Documents together with any amendments, supplements or modifications thereto or administration
or enforcement thereof.

 

“Reserve Report”
has the meaning assigned to that term in Part 6(n) of this Agreement.

 

“Solvent” means,
as to any Person on any date, (a) the fair saleable value of that Person’s assets exceed the total amount of its liabilities
(including income tax liabilities) as they become absolute and matured; and (b) that Person is able to meet its debts as they mature.

 

“Subsidiary”
means, as to any Person, an entity of which fifty percent (50%) or greater of the issued and outstanding securities having ordinary
voting power for the election of directors, members or general partners is owned, directly or indirectly, by such Person and/or
one or more of its subsidiaries.

 

“Synthetic Leases”
means, in respect of any Person, all leases which have been, or should have been, in accordance with GAAP, treated as operating
leases on the financial statements of the Person liable (whether contingently or otherwise) for the payment of rent thereunder
and which were properly treated as indebtedness for borrowed money for purposes of U.S. federal income taxes, if the lessee in
respect thereof is obligated to either purchase for an amount in excess of, or pay upon early termination an amount in excess of,
eighty percent (80%) of the residual value of the property subject to such operating lease upon expiration or early termination
of such lease.

 

    	67

    	 

    

 

“Well” means
any existing or future oil or gas well, salt water disposal well, injection well, water supply well or any other well located on
or related to the Property, and any facility or equipment in addition to or replacement of any well.

 

“Working Interest”
means the property interest which entitles the owner thereof to explore and develop certain land for oil and gas production purposes,
whether under an oil and gas lease or unit, a compulsory pooling order or otherwise.

 

[SIGNATURE PAGE AND APPENDICES
FOLLOW]

 

    	68

    	 

    

 

IN WITNESS WHEREOF the parties have
executed this document on the respective dates specified below with effect from the date specified on the first page of this Agreement.

 

	Macquarie Bank Limited	 	American Eagle Energy Corporation
	 	 	 
	By:	 	 	By: 	 
	 	Name:	 	Name:
	 	Title:	 	Title:

 

	 	 	AMZG, Inc.
	 	 	 	 	 
	By:	 	 	By: 	 
	 	Name:	 	Name:
	 	Title:	 	Title:

 

Signature Page

to

Schedule to the 2002 ISDA Master
Agreement

 

    	 

    	 

    

 

Appendix I

Operating Permits, Licenses and Authorizations

 

None

 

    	 

    	 

    

 

Appendix II

Basic Documents

(Including Farmout Agreements, Subject Contracts,
and Operating Agreements)

 

		1.	Carry Agreement dated April 16, 2012, but effective as of January 1, 2012, by and between American
Eagle Energy Corporation and NextEra Energy Gas Producing, LLC (as amended).

 

		2.	Confidentiality Agreement dated November 20, 2012 by and between SM Energy and American Eagle Energy
Corporation.

 

		3.	Operating Agreement dated October 26, 2006 by and among Rover Resources, Inc. as operator, Eternal
Energy Corp., as non-operator.

 

		4.	Operating Agreement dated November 1, 2010 by and among SM Energy Company, as operator, Crescent
Point Energy U.S. Corp. and Eternal Energy Corp., as non-operators.

 

		5.	Operating Agreement dated May 1, 2011 by and among Eternal Energy Corporation, as operator, NextEra
Energy Gas Producing, LLC and American Eagle Energy, Inc., as non-operators.

 

		6.	Operating Agreement dated January 1, 2011 by and among Continental Resources, Inc., as operator,
Crescent Point Energy U.S. Corporation, Black Stone Minerals Company, Eternal Energy Corporation, Geronimo Holdings Company, Kasmer
& Aafedt Oil, Inc. and Lario Oil & Gas Company, as non-operators.

 

		7.	Operating Agreement dated March 1, 2011 by and among SM Energy Company, as operator, Crescent Point
Energy U.S. Corp, Eternal Energy Corp., Richard Gallegos, Samson Resources Company, Baytex Energy USA Ltd., Murex Petroleum Corporation,
Rich Slagle Minerals Trust, Williston Hunter, Inc., Kent M. Lynch, The Dublin Company and Empire Oil Company, as non-operators.

 

		8.	Operating Agreement dated January 1, 2012 by and among American Eagle Energy Corporation, as operator,
NextEra Energy Gas Producing, LLC, SM Energy Company, American Standard Energy Corporation, Harms-Wold Family Group, LLP, Murex
Petroleum Corporation, Geronimo Holding Corporation, MBI Oil & Gas, LLC, Cody Oil & Gas Corporation, ASEN 2 Corp., Stewart
Geological, Inc., Roy G. & Opal Barton Revocable Trust, and Kasmer & Aafedt Oil, Inc., as non-operators.

 

		9.	Operating Agreement dated March 1, 2012 by and among American Eagle Energy Corporation, as operator,
NextEra Energy Gas Producing, LLC, SM Energy Company, Crescent Point Energy US Operations, Black Stone Minerals Company, LP, Missouri
River Royalty Corporation, BRP, LLC, MBI Oil & Gas, LLC, Murex Petroleum Corporation, ASEN 2 Corp., Stewart Geological, Inc.,
Cody Oil & Gas Corporation, Harms-Wold Family Group, LLP, and Geronimo Holding Corporation, as non-operators.

 

		10.	Operating Agreement dated April 1, 2012 by and among American Eagle Energy Corporation, as operator,
NextEra Energy Gas Producing, LLC, SM Energy Company, Black Stone Minerals Company, LP, Samson Resources Company, Empire Oil Company,
Crescent Point Energy US Corp., Cody Oil & Gas Corporation, Inland Oil & Gas Corporation, Luella M. Boss, Sanish Properties,
LLC, Benjamin Fliginger, Blair Fliginger, Trust for the Hill Foundation Trust, Virginia W. Hill Foundation Minerals Trust, and
Jon Wiltfong, as non-operators.

 

		11.	Operating Agreement dated May 1, 2012 by and among American Eagle Energy Corporation, as operator,
NextEra Energy Gas Producing, LLC, Nodana Petroleum Corporation, Williston Projects, Inc., Crescent Point Energy U.S. Corp., Onnhi,
Inc., Roy G. Barton, Sr. and Opal Barton Revocable Trust, Rosemary A. Scherer, Linda Petroleum, Heringer/Herco Minerals, LLC, and
Murex Petroleum Corporation, as non-operators.

 

    	 

    	 

    

  

		12.	Operating Agreement dated August 1, 2012 by and among American Eagle Energy Corporation, as operator,
NextEra Energy Gas Producing, LLC, Samson Resources Company, Crescent Point Energy U.S. Corp, SM Energy, Michelene G. Toomey, Ursula
G. Lusk, WLCUM Oil & Gas, Ltd., Enchanted Royalty Partners, Sam G. Harrison, Jr., Stockdale Royalty Partners, Heather C. Harrison,
Margo S. Harrison, Marshall C. Harrison, Parker L. Harrison, and Steven Lane Harrison, Jr., as non-operators.

 

		13.	Operating Agreement dated June 1, 2012 by and among American Eagle Energy Corporation, as operator,
NextEra Energy Gas Producing, LLC, Crescent Point Energy U.S. Corp., Samson Resources Company, J. Hiram Moore Ltd., Brennand Energy,
Ltd., MHM Resources LP, AP Assets, LLC, Onnhi, Inc., Hancock Enterprises, Frank C. and LaRaine E. Greider, Barbara Bargsten, Shari
R. Weber Trust, The Roy G. Barton Sr., and Opal Barton Rev. Trust, Edwin M. Avery, John A. Redeker, William H. Watson, and Bobby
L. Jarrett, as non-operators.

 

		14.	Operating Agreement dated January 1, 2011 by and among SM Energy Company, as operator, Samson Resources
Company, Baytex Energy USA LTD, Williston Hunter, Inc., J. Hiram Moore, LTD, Madelon L. Bradshaw, MHM Resources, LP, Pfanenstiel
Company, LLC, Chevron USA, Inc., Come Big or Stay Home, LLC, PANAN Energy, Inc., Prince Petroleum Company, Inc., VML Resources,
Inc., Eternal Energy Corp.

 

		15.	Operating Agreement dated November 1, 2012 by and among American Eagle Energy Corporation, as operator,
NextEra Energy Gas Producing, LLC, Crescent Point Energy U.S. Corp., Empire Oil Company, Kasmer & Aafedt Oil, Inc., Thomas
T. Ritter, Timothy J. Ritter, Steven C. Ritter, Pamela J. Hegge, Sanish Properties, LLC, Tracy B. Witherspoon, Dale Williston Minerals
2010, LP, John J. Kasmer, as non-operators.

 

		16.	Operating Agreement dated November 1, 2012 by and among American Eagle Energy Corporation, as operator,
NextEra Energy Gas Producing, LLC, Crescent Point Energy U.S. Corp., Baytex Energy USA, LTD, J. Hiram Moore, LTD, WLCUM Oil &
Gas, LTD, Ursula G. Lusk, Michelene Toomey, MHM Resources, AP Assets, LLC, Enchanted Royalty Partners, Stockade Royalty Partners,
Sam G. Harrison, Jr., Parker L. Harrison, Margo S. Harrison, Heather C. Harrison, Marshall C. Harrison, Steven Lane Harrison, Jr.,
Roy G. Barton Sr. and Opal Barton Revocable Trust, as non-operators.

 

		17.	Operating Agreement dated December 1, 2012 by and among American Eagle Energy Corporation, as operator,
NextEra Energy Gas Producing, LLC, SM Energy Company, Geronimo Holding Corporation, ASEN 2, Corp., Empire Oil Company, as non-operators.

 

		18.	First Amendment to Carry Agreement dated July 15, 2012 by and between American Eagle Energy Corporation
and NextEra Energy Gas Producing, LLC.

 

		19.	Midstream Proposal for Spyglass AMI production dated October 29, 2012, by and between USG Midstream
Bakken 1, LLC and American Eagle Energy Corporation

 

		20.	Gas Gathering, Processing and Purchase Agreement, pending execution, by and between USG Midstream
Bakken 1, LLC and American Eagle Energy Corporation

 

		21.	Gas Purchase Agreement, dated May 1, 2012, by and between Oneok Rockies Midstream, L.L.C. and SM
Energy Company

 

		22.	Lease Crude Oil Purchase Agreement, dated August 10, 2012, by and between Power Energy Partners,
LP and American Eagle Energy Corporation

 

		23.	Lease Crude Oil Purchase Agreement, dated November 23, 2012, by and between Power Energy Partners,
LP and American Eagle Energy Corporation (Not yet executed)

 

    	 

    	 

    

 

		24.	Crude Oil Purchase Agreement, dated November 28, 2012, by and between Power Freepoint Commodities,
LLC and American Eagle Energy Corporation

 

		25.	See Appendix III for a listing of oil and gas leases.

 

    	 

    	 

    

 

Appendix III

Property Description and Net Revenue
Interests

 

	Operated	 	 	 	 	 	BPO	 	 	APO	 
	Well Name	 	Location	 	Status	 	WI	 	 	NRI	 	 	WI	 	 	NRI	 
	Christianson 15-12-163-101	 	T163N, R101W - Sections 1 & 12	 	120% over AFE	 	 	17.81	%	 	 	14.12	%	 	 	35.62	%	 	 	28.24	%
	Cody 15-11-163-101	 	T163N, R101W - Sections 2 & 11	 	120% over AFE	 	 	18.45	%	 	 	14.26	%	 	 	35.74	%	 	 	27.79	%
	Coplan 1-3-163-101	 	T163N, R101W - Sections 3 & 10	 	NEE Carry	 	 	0.00	%	 	 	5.39	%	 	 	13.57	%	 	 	10.78	%
	Anton 3-4-163-101	 	T163N, R101W - Sections 4 & 9	 	NEE Carry	 	 	0.00	%	 	 	18.35	%	 	 	45.74	%	 	 	36.70	%
	Elizabeth 3-4N-163-101	 	T164N, R101W - Sections 28 & 33	 	120% over AFE + Non-Consent	 	 	22.68	%	 	 	17.88	%	 	 	41.84	%	 	 	33.29	%
	Silas 3-2N-163-101	 	T164N, R101W - Sections 26 & 35	 	NEE Carry + Non-Consent	 	 	6.65	%	 	 	20.01	%	 	 	35.92	%	 	 	28.86	%
	Megan 14-12-163-101	 	T163N, R101W - Sections 1 & 12	 	NEE Carry + Non-Consent	 	 	0.07	%	 	 	14.17	%	 	 	35.62	%	 	 	28.24	%
	Haagenson 3-2S-163-101	 	T163N, R101W - Sections 2 & 11	 	No Carry	 	 	35.81	%	 	 	27.85	%	 	 	35.74	%	 	 	27.79	%
	Christianson Brothers 15-33N-164-101	 	T164N, R101W - Sections 28 & 33	 	NEE Carry + Non-Consent	 	 	1.77	%	 	 	17.88	%	 	 	41.84	%	 	 	33.29	%
	Muzzy 15-33S-164-101	 	T163N, R101W - Sections 4 & 9	 	NEE Carry	 	 	0.00	%	 	 	18.35	%	 	 	45.74	%	 	 	36.70	%
	Violet 3-3-163-101	 	T163N, R101W - Sections 3 & 10	 	Not subject to Carry	 	 	19.79	%	 	 	15.94	%	 	 	19.79	%	 	 	15.94	%
	Terri Lynn 3-3-163-101	 	T164N, R101W - Sections 27 & 34	 	Not subject to Carry	 	 	33.83	%	 	 	27.53	%	 	 	26.38	%	 	 	21.32	%
	Stanley 8-1E-163-102	 	T163N, R101W - Sections 5 & 6	 	NEE Carry	 	 	0.00	%	 	 	14.39	%	 	 	36.25	%	 	 	28.78	%
	Mona Johnson 1-3N	 	T164N, R101W - Sections 27 & 34	 	Not subject to Carry	 	 	33.83	%	 	 	27.53	%	 	 	26.38	%	 	 	21.32	%
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Non-Operated - PDP	 	 	 	 	 	WI	 	 	NRI	 	 	 	 	 	 	 	 	 
	Adams 2-18H	 	T163N-R100W - Sections 6 & 7	 	 	 	 	18.52	%	 	 	14.81	%	 	 	 	 	 	 	 	 
	Adams 4-18H	 	T163N-R100W - Sections 6 & 7	 	 	 	 	18.52	%	 	 	14.81	%	 	 	 	 	 	 	 	 
	August 4-26H	 	T163N-R101W - Sections 14 & 23	 	 	 	 	6.53	%	 	 	5.19	%	 	 	 	 	 	 	 	 
	Bagley 4-30H	 	T163N-R100W - Sections 18 & 19	 	 	 	 	3.87	%	 	 	3.05	%	 	 	 	 	 	 	 	 
	Baja 1522-04TFH	 	T163N-R99W - Sections 15 & 22	 	 	 	 	0.63	%	 	 	0.50	%	 	 	 	 	 	 	 	 
	Blazer 2-11-163-98H	 	T163N-R98W - Sections 2 & 11	 	 	 	 	0.94	%	 	 	0.75	%	 	 	 	 	 	 	 	 

 

 

    	 

    	 

    

 

	Non-Operated
    - PDP	 	 	 	 	 	WI	 	 	NRI	 	 	 	 	 	 	 	 	 
	Border
    Farms 3130-1H	 	T163N-R99W - Sections
    6 & 7, T164N-R99W - Sections 30 & 31	 	 	 	 	8.77	%	 	 	7.01	%	 	 	 	 	 	 	 	 
	Border Farms
    3130-2TFH	 	T163N-R99W - Sections 6 &
    7, T164N-R99W - Sections 30 & 31	 	 	 	 	8.77	%	 	 	7.01	%	 	 	 	 	 	 	 	 
	Border Farms
    3130-3	 	T163N-R99W - Sections 6 &
    7, T164N-R99W - Sections 30 & 31	 	 	 	 	8.77	%	 	 	7.01	%	 	 	 	 	 	 	 	 
	Border Farms
    3130-5	 	T163N-R99W - Sections 6 &
    7, T164N-R99W - Sections 30 & 31	 	 	 	 	8.77	%	 	 	7.01	%	 	 	 	 	 	 	 	 
	Border Farms
    3130-6TFH	 	T163N-R99W - Sections 6 &
    7, T164N-R99W - Sections 30 & 31	 	 	 	 	8.77	%	 	 	7.01	%	 	 	 	 	 	 	 	 
	Camino 5-8-163-98H	 	T163N-R98W - Sections 5 &
    8	 	 	 	 	1.25	%	 	 	1.00	%	 	 	 	 	 	 	 	 
	Denali 31-21	 	T163N-R98W - Sections 13 &
    24	 	 	 	 	0.03	%	 	 	0.02	%	 	 	 	 	 	 	 	 
	Gerhardson 1-10H	 	T160N-R97W - Sections 3 &
    10	 	 	 	 	2.37	%	 	 	1.90	%	 	 	 	 	 	 	 	 
	Gulbranson 1-1H	 	T163N-R100W - Sections 1 &
    12	 	 	 	 	11.37	%	 	 	9.02	%	 	 	 	 	 	 	 	 
	Gulbranson 2-1H	 	T163N-R100W - Sections 1 &
    12	 	 	 	 	11.37	%	 	 	9.02	%	 	 	 	 	 	 	 	 
	Jurasin 32-29-163N-100W	 	T163N-R100W - Sections 29 &
    32	 	 	 	 	0.61	%	 	 	0.48	%	 	 	 	 	 	 	 	 
	Lancaster 2-11H	 	T162N-R102W - Sections 2 &
    11	 	 	 	 	6.21	%	 	 	4.97	%	 	 	 	 	 	 	 	 
	Legaard 4-25H	 	T163N-R101W - Sections 13 &
    24	 	 	 	 	4.09	%	 	 	3.27	%	 	 	 	 	 	 	 	 
	Montclair 0112-2TFH	 	T163N-R99W - Sections 1 &
    12, T164N-R99W - Sections 25 & 36	 	 	 	 	1.09	%	 	 	0.87	%	 	 	 	 	 	 	 	 
	Karen Bailard
    3625-1TFH	 	T163N-R99W - Sections 1 &
    12, T164N-R99W - Sections 25 & 36	 	 	 	 	1.09	%	 	 	0.87	%	 	 	 	 	 	 	 	 
	Montclair 1-12-163-99H	 	T163N-R99W - Sections 1 &
    12	 	 	 	 	1.57	%	 	 	1.26	%	 	 	 	 	 	 	 	 
	Mustang 7-6-163-98H	 	T163N-R98W - Sections 6 &
    7	 	 	 	 	0.31	%	 	 	0.25	%	 	 	 	 	 	 	 	 
	Nielsen 1-12H	 	T160N-R97W - Sections 1 &
    12	 	 	 	 	0.44	%	 	 	0.35	%	 	 	 	 	 	 	 	 

 

    	 

    	 

    

  

	Non-Operated
    - PDP	 	 	 	 	 	WI	 	 	NRI	 	 	 	 	 	 	 	 	 
	Nomad 0607-1H (PUD)	 	T163N-R99W - Sections 6 & 7, T164N-R99W
    - Sections 30 & 31	 	 	 	 	8.77	%	 	 	7.01	%	 	 	 	 	 	 	 	 
	Nomad 0607-2TFH (PUD)	 	T163N-R99W - Sections 6 & 7, T164N-R99W - Sections 30
    & 31	 	 	 	 	8.77	%	 	 	7.01	%	 	 	 	 	 	 	 	 
	Nomad 0607-3TFH (PUD)	 	T163N-R99W - Sections 6 & 7, T164N-R99W - Sections 30
    & 31	 	 	 	 	8.77	%	 	 	7.01	%	 	 	 	 	 	 	 	 
	Nomad 0607-5H	 	T163N-R99W - Sections 6 & 7, T164N-R99W - Sections 30
    & 31	 	 	 	 	8.77	%	 	 	7.01	%	 	 	 	 	 	 	 	 
	Nomad 0607-6TFH	 	T163N-R99W - Sections 6 & 7, T164N-R99W - Sections 30
    & 31	 	 	 	 	8.77	%	 	 	7.01	%	 	 	 	 	 	 	 	 
	Nomad 6-7 163-99H	 	T163N-R99W - Sections 6 & 7, T164N-R99W - Sections 30
    & 31	 	 	 	 	14.41	%	 	 	11.53	%	 	 	 	 	 	 	 	 
	Olson 15-22-162-100H 1CN	 	T162N-R100W - Sections 15 & 22	 	 	 	 	0.78	%	 	 	0.63	%	 	 	 	 	 	 	 	 
	Prochnick 15-35HSA	 	T163N-100W - Sections 2 & 11	 	 	 	 	0.35	%	 	 	0.28	%	 	 	 	 	 	 	 	 
	Prochnick 15-35HSB	 	T163N-100W - Sections 2 & 11	 	 	 	 	0.35	%	 	 	0.28	%	 	 	 	 	 	 	 	 
	Reide 4-14H	 	T163N-R100W - Sections 2 & 11	 	 	 	 	0.34	%	 	 	0.27	%	 	 	 	 	 	 	 	 
	Ridgeway 25-36-163N-101W	 	T163N, R101W - Sections 25 & 36	 	 	 	 	1.88	%	 	 	1.50	%	 	 	 	 	 	 	 	 
	Thomte 0508-03TFH (PUD)	 	T163N-R99W - Sections 5 & 8, T164N-R99W - Sections 29
    & 32	 	 	 	 	1.97	%	 	 	1.58	%	 	 	 	 	 	 	 	 
	Thomte 8-5-163-99H	 	T163N-R99W - Sections 5 & 8	 	 	 	 	3.18	%	 	 	2.50	%	 	 	 	 	 	 	 	 
	Titan 36-25-164-99H	 	T163N-R99W - Sections 6 & 7, T164N-R99W - Sections 30
    & 31	 	 	 	 	0.18	%	 	 	0.15	%	 	 	 	 	 	 	 	 
	Torgeson 1-15H	 	T163N-R100W - Sections 3 & 10	 	 	 	 	4.38	%	 	 	3.48	%	 	 	 	 	 	 	 	 
	Torgeson 4-15 (PUD)	 	T163N-R100W - Sections 3 & 10	 	 	 	 	4.38	%	 	 	3.48	%	 	 	 	 	 	 	 	 
	Wolter 1-28H	 	T163N-R100W - Sections 16 & 21	 	 	 	 	1.30	%	 	 	1.04	%	 	 	 	 	 	 	 	 

  

    	 

    	 

    

 

	Non-Operated
    - PDP	 	 	 	 	 	WI	 	 	NRI	 	 	 	 	 	 	 	 	 
	Wolter 13-9H	 	T163N-R100W - Sections
    4 & 9	 	 	 	 	5.90	%	 	 	4.64	%	 	 	 	 	 	 	 	 
	Wolter 15-8H	 	T163N-R100W - Sections 5 & 8	 	 	 	 	1.54	%	 	 	1.21	%	 	 	 	 	 	 	 	 
	Yukon 12-1	 	T163N-R98W - Sections 1 & 12	 	 	 	 	1.25	%	 	 	1.00	%	 	 	 	 	 	 	 	 

 

[See following pages for lease schedule]

 

    	 

    	 

    

 

Appendix IV

Debt Instruments

 

		1.	Carry Agreement dated April 16, 2012, but effective as of January 1, 2012, by and between American
Eagle Energy Corporation and NextEra Energy Gas Producing, LLC (as amended).

 

    	 

    	 

    

 

Appendix V

Hedging Agreements

 

None

 

    	 

    	 

    

 

Appendix VI

Marketing of Production

 

		1.	Lease Crude Oil Purchase Agreement, dated November 23, 2012, by and between Power Energy Partners,
LP and American Eagle Energy Corporation, not cancellable within 60 days. (not yet executed)

 

    	 

    	 

    

 

Appendix VII

Subsidiaries

 

		1.	AMZG, Inc. (wholly-owned by American Eagle Energy Corporation)

 

		2.	EERG Energy ULC (wholly-owned by American Eagle Energy Corporation)

 

		3.	AEE Canada Inc. (wholly-owned by AMZG, Inc.)

 

The consolidate corporate structure is as follows:

 

 

    	 

    	 

    

 

Appendix VIII

Litigation and Governmental Proceedings

 

		·	The Company received a series of comment letters from the Securities Exchange Commission regarding certain disclosures related
to the Form 10-K that was filed on April 14, 2012. The Company has formally responded to all comment letters and is awaiting further
comment or final resolution of the matter.

 

		·	The Company’s management is unaware of any threatened or pending claims, litigation, proceedings, arbitration, investigations
or other inquiries.

 

    	 

    	 

    

 

Appendix IX

Contingent Liabilities

 

		1.	North Dakota Surety Bonds - $100,000

 

		2.	Bureau of Indian Affairs (Montana) Surety Bond - $1,500

 

    	 

    	 

    

 

Appendix X

Employee Plans

 

		·	Non-Qualified Stock Option Plan

 

    	 

    	 

    

 

Appendix XI

Deposit Accounts

 

American Eagle Energy Corporation: 

		·	Key Bank Payables Account - 765070012958

		·	Key Bank Revenue Account - 765071003428

		·	Key Bank Money Market Account - 765070014095

		·	Wells Fargo Advisors Investment Account – 1592-9837

 

AMZG, Inc.:

		·	Key Bank Checking Account – 765071002552

 

EERG Energy ULC:

		·	Key Bank Checking Account - 765071001042

		·	Royal Bank of Canada Checking Account – 09591 103-921-3

 

    	 

    	 

    

 

Appendix XII

Insurance

 

		·	Directors, Officers and Organization Liability – Travelers Insurance

 

		·	Commercial General Liability & Umbrella – Chubb Insurance Company

 

		·	Operator’s Extra (Well Control) – Lloyd’s of London

 

		·	Workers’ Compensation – Pinnacol Assurance

 

		·	Group Medical – UnitedHealthcare

 

		·	Group Dental – Delta Dental

 

		·	Group Vision – Vision Service Provider (VSP)

  

    	 

    	 

    

 

Appendix XIII

Purchaser

 

		1.	Freepoint Commodities, LLC

Crude Oil Purchase Agreement

-November 28, 2012

-terminates December 31, 2012

		-Contact:	Jeremy Weil

Crude Oil Trader, Vice President

58 Commerce Road

Stamford, CT 06902

Telephone: 203-542-6262

 

		2.	Power Energy Partners, LP

-August 10, 2012

-Covers the Christianson, Cody and Coplan wells

		-Contact:	William Jegen

CEO

778 Frontage Road Suite 122

Northfield, IL 60093

Telephone: 847-730-3844

 

		3.	Power Energy Partners, LP

-November 23, 2012 (not yet executed)

-effective February 1, 2013

		-Contact:	William Jegen

CEO

778 Frontage Road Suite 122

Northfield, IL 60093

Telephone: 847-730-3844

 

		4.	USG Midstream Bakken 1, LLC

-Pending execution

		-Contact:	Attn: Contract Administration

601 Travis, Suite 1900

Houston, Texas 77002

Telephone: 713-374-1582

 

		5.	Oneok Rockies Midstream, L.L.C.

-May 1, 2012

-only covers lands acquired from SM Energy

		-Contact:	Contract Administration 17-5

P.O. Box 871

Tulsa, OK 74102-0871

Telephone: 918-732-1354

Fax: 918-588-7533

 

    	 

    	 

    

  

Appendix XIV

Capital Leases

 

None

 

    	 

    	 

    

  

Appendix XV

Investments

 

		·	25,107 shares of Crescent Point Energy Corp. common stock

 

		·	2,000,000 shares of Passport Energy Ltd. common stock

  

    	 

    	 

    

  

Appendix XVI

Operators

  

		1.	SM Energy Company

550 North 31st Street, Suite 500

Billings, MT 59101

 

		2.	Samson Resources Company

370 17th Street, Suite 3000

Denver, CO 80222

 

		3.	Crescent Point Energy U.S. Corp.

555 17th Street, Suite 750

Denver, CO 80202

 

		4.	Continental Resources, Inc.

302 N. Independence Ave.

Enid, OK 73702

 

		5.	Baytex Energy USA Ltd.

600 Seventeenth Street, Suite 1600S

Denver, CO 80202

 

    	 

    	 

    

 

Appendix XVII

NextEra Acquisition

 

	Well Name	 	Location	 	Working Interest	 	 	Net Revenue Interest	 
	Nomad 6-7 163-99H	 	T163N-R99W - Sections 6 & 7	 	 	14.41	%	 	 	11.53	%
	Border Farms 3130-1H	 	T163N-R99W - Sections 6 & 7, T164N-R99W - Sections 30 & 31	 	 	8.77	%	 	 	7.01	%
	Border Farms 3130-2TFH	 	T163N-R99W - Sections 6 & 7, T164N-R99W - Sections 30 & 31	 	 	8.77	%	 	 	7.01	%
	Border Farms 3130-6TFH	 	T163N-R99W - Sections 6 & 7, T164N-R99W - Sections 30 & 31	 	 	8.77	%	 	 	7.01	%
	Nomad 0607-1TFH	 	T163N-R99W - Sections 6 & 7, T164N-R99W - Sections 30 & 31	 	 	8.77	%	 	 	7.01	%
	Nomad 0607-05H	 	T163N-R99W - Sections 6 & 7, T164N-R99W - Sections 30 & 31	 	 	8.77	%	 	 	7.01	%
	Nomad 0607-6TFH	 	T163N-R99W - Sections 6 & 7, T164N-R99W - Sections 30 & 31	 	 	8.77	%	 	 	7.01	%
	Thomte 8-5-163-99H	 	T163N-R99W - Sections 5 & 8	 	 	3.18	%	 	 	2.50	%
	Thomte 0508-2TFH	 	T163N-R99W - Sections 5 & 8, T164N-R99W - Sections 29 & 32	 	 	1.97	%	 	 	1.58	%
	Thomte 0508-03TFH	 	T163N-R99W - Sections 5 & 8, T164N-R99W - Sections 29 & 32	 	 	1.97	%	 	 	1.58	%
	Bakke 3229-2TFH	 	T163N-R99W - Sections 5 & 8, T164N-R99W - Sections 29 & 32	 	 	1.97	%	 	 	1.58	%
	Bakke 3229-3TFH	 	T163N-R99W - Sections 5 & 8, T164N-R99W - Sections 29 & 32	 	 	1.97	%	 	 	1.58	%

 

    	 

    	 

    

 

	Lease	 	Lessor	 	Lessee	 	Lease
    Date	 	Recording
    Data	 	Legal
    Description
	LSE-00594	 	KATHY K. SCOTT SPOON, JOHN THUMMA, AND CHARLENE JUDGE,
    CO-TRUSTEES OF THE HENRY RUSSELL FAMILY MINERAL TRUST, U/T/D MARCH 10, 2010	 	DIAMOND RESOURCES CO.	 	1/6/2011	 	Document #: 255585

    

    Book:305M Page: 142	 	INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:

    Township 163 North, Range 99 West

    Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4,
    NE4
	LSE-00634	 	DOROTHY M. TORGESON, A WIDOW 	 	DIAMOND RESOURCES CO.	 	1/6/2011	 	Document # 254924

    

    Book: 302M

     Page: 578	 	INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:

    Township 163 North, Range 99 West

    Section 6: LOTS 6 (37.32), 7 (37.48), E2SW4
	LSE-00635	 	RANDAL TORGESON AND ELIZABETH ELSBERND, TRUSTEES OF
    THE HOWARD TORGESON FAMILY TRUST	 	DIAMOND RESOURCES CO.	 	1/6/2011	 	Document # 254930

    

    Book: 302M

     Page: 592	 	INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:

    Township 163 North, Range 99 West

    Section 6: LOTS 6 (37.32), 7 (37.48), E2SW4
	LSE-00838	 	ROSE HANSEN, TRUSTEE OF THE ROBERT H. HANSEN TRUST
    DATED 10-18-1989	 	DIAMOND RESOURCES CO.	 	6/14/2011	 	Document # 25883

    

    Book: 316M

     Page: 158	 	INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:

    Township 163 North, Range 99 West

    Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4,
    NE4
	LSE-00841	 	JILL LUKE, A MARRIED WOMAN	 	DIAMOND RESOURCES CO.	 	6/27/2011	 	Document # 259060

    

    Book: 316M

     Page: 579	 	INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:

    Township 163 North, Range 99 West

    Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4,
    NE4
	LSE-00842	 	KERIN KNIGHT, A SINGLE WOMAN	 	DIAMOND RESOURCES CO.	 	6/8/2011	 	Document # 258741

    

    Book: 315M

     Page: 568	 	INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:

    Township 163 North, Range 99 West

    Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4,
    NE4
	LSE-00843	 	BEN LEROY CLARK, A MARRIED MAN	 	DIAMOND RESOURCES CO.	 	6/15/2011	 	Document # 258886

    

    Book: 316M

     Page: 164	 	INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:

    Township 163 North, Range 99 West

    Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4,
    NE4

 

    	 

    	 

    

 

	LSE-00844	 	STEVEN HORSWELL, A MARRIED MAN	 	DIAMOND RESOURCES CO.	 	6/10/2011	 	Document # 258887

    

    Book: 316M

     Page: 166	 	INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:

    Township 163 North, Range 99 West

    Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4
	LSE-00845	 	LINDA SUE O'DONNELL, A MARRIED WOMAN	 	DIAMOND RESOURCES CO.	 	6/15/2011	 	Document # 258889

    

    Book: 316M

     Page: 170	 	INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:

    Township 163 North, Range 99 West

    Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4
	LSE-00846	 	SHARON K. PISESKI, A MARRIED WOMAN	 	DIAMOND RESOURCES CO.	 	6/10/2011	 	Document # 258888

    

    Book: 316M

     Page: 168	 	INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:

    Township 163 North, Range 99 West

    Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4
	LSE-00849	 	SHARON DEATON, A MARRIED WOMAN	 	DIAMOND RESOURCES CO.	 	6/15/2011	 	Document # 258891

    

    Book: 316M

     Page: 174	 	INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:

    Township 163 North, Range 99 West

    Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4
	LSE-00850	 	KATHRYN M. GAMBLE, A WIDOW	 	DIAMOND RESOURCES CO.	 	5/31/2011	 	Document # 259055

    

    Book: 316M

     Page: 569	 	INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:

    Township 163 North, Range 99 West

    Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4
	LSE-00851	 	ANTON C. HARRIS, JR., A MARRIED MAN	 	DIAMOND RESOURCES CO.	 	6/1/2011	 	Document # 258571

    Book: 315M

     Page: 127	 	INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:

    Township 163 North, Range 99 West

    Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4
	LSE-00852	 	AMANDA HEGSTROM, A SINGLE WOMAN	 	DIAMOND RESOURCES CO.	 	6/9/2011	 	Document # 259057

    

    Book: 316M

     Page: 573	 	INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:

    Township 163 North, Range 99 West

    Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4

 

    	 

    	 

    

 

	LSE-00853	 	JENNIFER HEGSTROM PRIVIA, A MARRIED WOMAN	 	DIAMOND RESOURCES CO.	 	6/9/2011	 	Document # 259059

    

    Book: 316M

     Page: 577	 	INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:

    Township 163 North, Range 99 West

    Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4
	LSE-00854	 	ERICA HEGSTROM, A SINGLE WOMAN	 	DIAMOND RESOURCES CO.	 	6/9/2011	 	Document # 258890

    

    Book: 316M

     Page: 172	 	INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:

    Township 163 North, Range 99 West

    Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4
	LSE-00856	 	JASON L. PALMER, A MARRIED MAN	 	DIAMOND RESOURCES CO.	 	7/1/2011	 	Document # 259173

    

    Book: 317M

     Page: 45	 	INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:

    Township 163 North, Range 99 West

    Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4
	LSE-00857	 	CHAD D. PALMER, A SINGLE MAN	 	DIAMOND RESOURCES CO.	 	7/1/2011	 	Document # 259058

    

    Book: 316M

     Page: 575	 	INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:

    Township 163 North, Range 99 West

    Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4
	LSE-00858	 	RONDA S. PETERS A SINGLE WOMAN	 	DIAMOND RESOURCES CO.	 	6/29/2011	 	Document # 259174

    

    Book: 317M

     Page: 47	 	INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:

    Township 163 North, Range 99 West

    Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4
	LSE-00859	 	EDWARD JAMES HEGSTROM, A SINGLE MAN	 	DIAMOND RESOURCES CO.	 	6/9/2011	 	Document # 258575

    

    Book: 315M

     Page: 135	 	INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:

    Township 163 North, Range 99 West

    Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4
	LSE-00860	 	JOHN RUSSELL HEGSTROM, A MARRIED MAN	 	DIAMOND RESOURCES CO.	 	6/9/2011	 	Document # 258740

    

    Book: 315M

     Page: 566	 	INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:

    Township 163 North, Range 99 West

    Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4
	LSE-00861	 	MICHAEL WAYNE HEGSTROM, A MARRIED MAN	 	DIAMOND RESOURCES CO.	 	6/9/2011	 	Document # 258574

    

    Book: 315M

     Page: 133	 	INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:

    Township 163 North, Range 99 West

    Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4

 

    	 

    	 

    

 

	LSE-00862	 	ANN LOUISE HEGSTROM,  A
    SINGLE WOMAN	 	DIAMOND RESOURCES CO.	 	6/9/2011	 	Document #
    258743

    

    Book: 315M

     Page: 572	 	INSOFAR AND ONLY INSOFAR
    AS SAID LEASE COVERS:

    Township 163 North, Range 99 West

    Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4,
    NE4
	LSE-00863	 	MARTIN G. MORANVILLE, A MARRIED MAN	 	DIAMOND RESOURCES CO.	 	6/8/2011	 	Document # 258885

    

    Book: 316M

     Page: 162	 	INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:

    Township 163 North, Range 99 West

    Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4,
    NE4
	LSE-00864	 	LYNN ANDERSON, A MARRIED WOMAN	 	DIAMOND RESOURCES CO.	 	6/15/2011	 	Document # 259054

    

    Book: 316M

     Page: 567	 	INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:

    Township 163 North, Range 99 West

    Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4,
    NE4
	LSE-00865	 	JULIE ELLEN HEGSTROM BEYERINK, A MARRIED WOMAN	 	DIAMOND RESOURCES CO.	 	6/9/2011	 	Document # 258882

    

    Book: 316M

     Page: 156	 	INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:

    Township 163 North, Range 99 West

    Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4,
    NE4
	LSE-00866	 	RUSSELL W. STARRY, TRUSTEE OF THE RUSSELL AND LEAH
    STARRY LIVING TRUST 1992	 	DIAMOND RESOURCES CO.	 	7/1/2011	 	Document # 259053

    

    Book: 316M

     Page: 563	 	INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:

    Township 163 North, Range 99 West

    Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4,
    NE4
	LSE-00867	 	KRAIG BROWER, A MARRIED MAN	 	DIAMOND RESOURCES CO.	 	6/8/2011	 	Document # 258572

    

    Book: 315M

     Page: 129	 	INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:

    Township 163 North, Range 99 West

    Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4,
    NE4

 

    	 

    	 

    

 

	LSE-00868	 	RICHARD D. CHAPMAN, A MARRIED MAN	 	DIAMOND RESOURCES CO.	 	6/10/2011	 	Document # 25884

    

    Book: 316M

     Page: 160	 	INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:

    Township 163 North, Range 99 West

    Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4
	LSE-00885	 	MARILYN LEISSLER, A MARRIED WOMAN	 	DIAMOND RESOURCES CO.	 	6/10/2011	 	Document # 258742

    

    Book: 315M

     Page: 570	 	INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:

    Township 163 North, Range 99 West

    Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4
	LSE-00890	 	MARILYN J HAMMAN, A MARRIED WOMAN	 	DIAMOND RESOURCES CO.	 	6/10/2011	 	Document # 259172

    

    Book: 317M

     Page: 43	 	INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:

    Township 163 North, Range 99 West

    Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4
	LSE-00891	 	KEITH RIDNOUR, A MARRIED MAN	 	DIAMOND RESOURCES CO.	 	6/3/2011	 	Document # 259769

    

    Book: 319M Page: 34	 	INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:

    Township 163 North, Range 99 West

    Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4
	LSE-00896	 	GLORIA SELVOG, A/K/A GLORIA J. SELVOG, A MARRIED WOMAN	 	DIAMOND RESOURCES CO.	 	7/18/2011	 	Document # 259349

    

    Book: 317M

     Page: 430	 	INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:

    Township 163 North, Range 99 West

    Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4
	LSE-00899	 	TRICIA L. PARKER SCANTLIN, A MARRIED WOMAN	 	DIAMOND RESOURCES CO.	 	6/9/2011	 	Document # 258573

    

    Book: 315M

     Page: 131	 	INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:

    Township 163 North, Range 99 West

    Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4
	LSE-00911	 	CLELL MCGUIGAN, A WIDOWER	 	DIAMOND RESOURCES CO.	 	7/18/2011	 	Document # 259575

    

    Book: 318M

     Page: 250	 	INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:

    Township 163 North, Range 99 West

    Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4
	LSE-00918	 	GARY L. MORANVILLE, A MARRIED MAN	 	DIAMOND RESOURCES CO.	 	6/13/2011	 	Document # 259576

    

    Book: 318M

     Page: 252	 	INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:

    Township 163 North, Range 99 West

    Section 7:  LOTS 1 (37.61), 2 (37.71), E2NW4, NE4

  

    	 

    	 

    

 

	LSE-00405	 	KEITH BRAATEN, A MARRIED MAN	 	DIAMOND RESOURCES CO.	 	10/1/2010	 	Document: 

    253132

    Book: 297M

     Page: 83	 	Township 163 North, Range
    99 West

    Section 8: SW4
	LSE-00406	 	KIM BRAATEN, A SINGLE MAN	 	DIAMOND RESOURCES CO.	 	10/8/2010	 	Document: 

    253319

    Book: 297M

     Page: 506	 	Township 163 North, Range 99 West

    Section 8: SW4
	LSE-00439	 	DONOVAN DISETH, A MARRIED MAN	 	DIAMOND RESOURCES, CO.	 	10/4/2010	 	Document: 253134 

    

    Book: 297M

     Page: 87	 	Township 163 North, Range 99 West

    Section 8: SW4
	LSE-00440	 	DOYLE DISETH, A SINGLE MAN	 	DIAMOND RESOURCES, CO.	 	10/4/2010	 	Document: 253137

    Book: 297M Page: 93	 	Township 163 North, Range 99 West

    Section 8: SW4
	LSE-00441	 	SCOTT DISETH, A MARRIED MAN	 	DIAMOND RESOURCES, CO.	 	10/4/2010	 	Document: 253138 

    

    Book: 297M Page: 95	 	Township 163 North, Range 99 West

    Section 8: SW4
	LSE-00442	 	SHANE DISETH, A MARRIED MAN	 	DIAMOND RESOURCES, CO.	 	10/4/2010	 	Document: 254073

    

    Book: 299M

     Page: 653	 	Township 163 North, Range 99 West

    Section 8: SW4
	LSE-00463	 	DALE GJERTSEN, A MARRIED MAN	 	DIAMOND RESOURCES CO.	 	10/1/2010	 	Document: 253133

    Book: 297M

     Page: 85	 	Township 163 North, Range 99 West

    Section 8: SW4
	LSE-00464	 	DENNIS GJERTSEN, A MARRIED MAN	 	DIAMOND RESOURCES CO.	 	10/1/2010	 	Document: 253126

    Book: 297M

     Page: 71	 	Township 163 North, Range 99 West

    Section 8: SW4

 

    	 

    	 

    

 

	LSE-00465	 	HOWARD GJERTSEN, A MARRIED MAN	 	DIAMOND RESOURCES CO.	 	10/1/2010	 	Document: 253124

    Book: 297M

     Page: 66	 	Township 163 North, Range
    99 West

    Section 8: SW4
	LSE-00466	 	LORRETTA GJESDAL, A MARRIED WOMAN	 	DIAMOND RESOURCES CO.	 	10/1/2010	 	Document: 253139 

    

    Book: 297M

     Page: 97	 	Township 163 North, Range 99 West

    Section 8: SW4
	LSE-00535	 	JANE MELLAND, A MARRIED WOMAN	 	DIAMOND RESOURCES CO.	 	10/1/2010	 	Document: 253135 

    

    Book: 297M Page: 89	 	Township 163 North, Range 99 West

    Section 8: SW4
	LSE-00552	 	BRAD NESS, A MARRIED MAN	 	DIAMOND RESOURCES CO.	 	10/4/2010	 	Document: 253141 

    

    Book: 297M Page: 101	 	Township 163 North, Range 99 West

    Section 8: SW4
	LSE-00553	 	BRENT NESS,  A MARRIED MAN	 	DIAMOND RESOURCES CO.	 	10/4/2010	 	Document: 253130 

    

    Book: 297M Page: 79	 	Township 163 North, Range 99 West

    Section 8: SW4
	LSE-00554	 	JACQUELINE NESS,  A SINGLE WOMAN	 	DIAMOND RESOURCES CO.	 	10/4/2010	 	Document: 253137

    Book: 297M

     Page: 502	 	Township 163 North, Range 99 West

    Section 8: SW4
	LSE-00555	 	KENT NESS, A MARRIED MAN	 	DIAMOND RESOURCES CO.	 	10/4/2010	 	Document: 253131

    Book: 297M

     Page: 81	 	Township 163 North, Range 99 West

    Section 8: SW4
	LSE-00598	 	CORRINE SANDERSON, A WIDOW	 	DIAMOND RESOURCES CO.	 	10/1/2010	 	Document: 253324

    Book: 297M

     Page: 516	 	Township 163 North, Range 99 West

    Section 8: SW4

 

    	 

    	 

    

 

	LSE-00599	 	JOHN SANDERSON, A MARRIED MAN	 	DIAMOND RESOURCES CO.	 	10/1/2010	 	Document: 253136

    

    Book: 297M

     Page: 91	 	Township 163 North, Range 99 West

    Section 8: SW4
	LSE-00600	 	LLOYD SANDERSON, A MARRIED MAN	 	DIAMOND RESOURCES CO.	 	10/1/2010	 	Document: 253316 

    

    Book: 297M

     Page: 500	 	Township 163 North, Range 99 West

    Section 8: SW4
	LSE-00601	 	RONALD SANDERSON, A MARRIED MAN	 	DIAMOND RESOURCES CO.	 	10/1/2010	 	Document: 253125

    Book: 297M

     Page: 69	 	Township 163 North, Range 99 West

    Section 8: SW4
	LSE-00606	 	JILL SCHLECHT FKA JILL NESS, A MARRIED WOMAN	 	DIAMOND RESOURCES CO.	 	10/4/2010	 	Document: 253318 

    

    Book: 297M Page: 504	 	Township 163 North, Range 99 West

    Section 8: SW4
	LSE-00608	 	BEVERLY SILVA, A MARRIED WOMAN	 	DIAMOND RESOURCES CO.	 	10/1/2010	 	Document: 253128

    Book: 297M

     Page: 75	 	Township 163 North, Range 99 West

    Section 8: SW4
	LSE-00609	 	ARCHIE SMITH, A WIDOWER	 	DIAMOND RESOURCES CO.	 	10/1/2010	 	Document: 253129 

    

    Book: 297M Page: 77	 	Township 163 North, Range 99 West

    Section 8: SW4
	LSE-00616	 	GREG STRAND, A SINGLE MAN	 	DIAMOND RESOURCES CO.	 	10/1/2010	 	Document: 253142

    Book: 297M

     Page: 103	 	Township 163 North, Range 99 West

    Section 8: SW4
	LSE-00636	 	KIETH A TORGESON & KATHY L RADENIC	 	DIAMOND RESOURCES CO.	 	10/1/2010	 	Document: 254284

    

    Book: 300M

     Page: 423	 	Township 163 North, Range 99 West

    Section 5: SW4

 

    	 

    	 

    

 

	LSE-00639	 	KENNETH VALLIER, A SINGLE MAN	 	DIAMOND RESOURCES CO.	 	10/1/2010	 	Document: 253322

    

    Book: 297M

     Page: 512	 	Township 163 North, Range
    99 West

    Section 8: SW4
	LSE-00640	 	DAWN VALLIER-BEAN, A MARRIED WOMAN	 	DIAMOND RESOURCES CO.	 	10/1/2010	 	Document: 253127

    

    Book: 297M

     Page: 73	 	Township 163 North, Range 99 West

    Section 8: SW4
	LSE-00659	 	LAUREL WINTER, A MARRIED WOMAN	 	DIAMOND RESOURCES CO.	 	10/1/2010	 	Document: 2531470

    

    Book: 297M Page: 99	 	Township 163 North, Range 99 West

    Section 8: SW4

  

    	 

    	 

    

Appendix XVIII

SM Energy Acquisition Well Schedule

 

	Well 

    No.	 	Lease Name	 	Description	 	County/State	 	GWI	 	 	NWI	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	32553	 	Christianson 15-12-163-101	 	Sections 1 & 12 - T163N-R101W	 	Divide, North Dakota	 	 	19.598907	%	 	 	16.316138	%	 	 
	33138	 	Cody 15-11-163-101	 	Sections 2 & 11 - T163N-R101W	 	Divide, North Dakota	 	 	17.795680	%	 	 	14.829740	%	 	 
	33447	 	Coplan 1-3-163-101	 	Sections 3 & 10 - T163N-R101W	 	Divide, North Dakota	 	 	34.131811	%	 	 	28.221292	%	 	 
	33798	 	Megan 14-12-163-101	 	Sections 1 & 12 - T163N-R101W	 	Divide, North Dakota	 	 	19.598907	%	 	 	16.316138	%	 	 
	34067	 	Haagenson 3-2-163-101	 	Sections 2 & 11 - T163N-R101W	 	Divide, North Dakota	 	 	17.795680	%	 	 	14.829740	%	 	 
	34269	 	Violet 3-3-163-101	 	Sections 3 & 10 - T163N-R101W	 	Divide, North Dakota	 	 	34.131811	%	 	 	28.221292	%	 	 
	34022	 	Silas 3-2N-163-101	 	Sections 26 & 35-T164-R101W	 	Divide, North Dakota	 	 	0.000000	%	 	 	0.000000	%	 	BPO
	34022	 	Silas 3-2N-163-101	 	Sections 26 & 35-T164-R101W	 	Divide, North Dakota	 	 	4.969961	%	 	 	4.141634	%	 	APO

 

    	 

    	 

    

 

 

Appendix XVIII

SM Energy Acquisition Lease Schedule

 

	LEASE	 	 	 	 	 	 	 	BOOK	 	 	 	 
	#	 	 	 	 	 	 	 	PAGE	 	 	 	 
	TRACT

#	 	LESSOR	 	LESSEE	 	DATED	 	
        DOC.

        NO.
	 	DESCRIPTION	 	
        COUNTY,

        STATE

	 	 	 	 	 	 	 	 	 	 	 	 	 
	496966A	 	ROBERT C. HAAGENSON AND SANDRA K. HAAGENSON, TRUSTEES OF THE HAAGENSON	 	ST. MARY LAND & EXPLORATION COMPANY	 	2/25/2010	 	281M	 	Insofar and only insofar as said lease covers	 	Divide, ND
	57868	 	FAMILY MINERAL TRUST, CREATED BY AGREEMENT DATED DECEMBER 24, 2002	 	 	 	 	 	264	 	and affects the following:	 	 
	 	 	 	 	 	 	 	 	248493	 	T163N R101W	 	 
	 	 	 	 	 	 	 	 	 	 	SEC 1: LOTS 3-4, S/2NW/4	 	 
	 	 	 	 	 	 	 	 	 	 	T164N R101W	 	 
	 	 	 	 	 	 	 	 	 	 	SEC 35: SE/4	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	496966B	 	VERONA POWERS, AKA VERONA G. POWERS, FKA VERONA G. BAKER, A SINGLE	 	ST. MARY LAND & EXPLORATION COMPANY	 	3/1/2010	 	282M	 	Insofar and only insofar as said lease covers	 	Divide, ND
	57868	 	WOMAN	 	 	 	 	 	300	 	and affects the following:	 	 
	 	 	 	 	 	 	 	 	248800	 	T163N R101W	 	 
	 	 	 	 	 	 	 	 	 	 	SEC 1: LOTS 3-4, S/2NW/4	 	 
	 	 	 	 	 	 	 	 	 	 	T164N R101W	 	 
	 	 	 	 	 	 	 	 	 	 	SEC 35: SE/4	 	 
	496966C	 	MARJORIE A. LETSCH, A MARRIED WOMAN DEALING IN HER SOLE AND SEPARATE	 	ST. MARY LAND & EXPLORATION COMPANY	 	3/5/2010	 	282M	 	Insofar and only insofar as said lease covers	 	Divide, ND
	57868	 	PROPERTY	 	 	 	 	 	636	 	and affects the following:	 	 
	 	 	 	 	 	 	 	 	248936	 	T163N R101W	 	 
	 	 	 	 	 	 	 	 	 	 	SEC 1: LOTS 3-4, S/2NW/4	 	 
	 	 	 	 	 	 	 	 	 	 	T164N R101W	 	 
	 	 	 	 	 	 	 	 	 	 	SEC 35: SE/4	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 

 

    	 

    	 

    

 

	497021A	 	JOHN M. CASHMAN, A MARRIED MAN DEALING IN HIS SOLE AND SEPARATE	 	ST. MARY LAND & EXPLORATION COMPANY	 	3/31/2010	 	284M	 	Insofar and only insofar as said lease covers	 	Divide, ND
	57968	 	PROPERTY	 	 	 	 	 	194	 	and affects the following:	 	 
	 	 	 	 	 	 	 	 	249358	 	T163N R101W	 	 
	 	 	 	 	 	 	 	 	 	 	SEC 10: S/2	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	497021B	 	MARY C. AUSTIN, A MARRIED WOMAN DEALING IN HER SOLE AND SEPARATE	 	 ST. MARY LAND & EXPLORATION COMPANY	 	3/31/2010	 	284M	 	Insofar and only insofar as said lease covers	 	Divide, ND
	57968	 	PROPERTY	 	 	 	 	 	174	 	and affects the following:	 	 
	 	 	 	 	 	 	 	 	249352	 	T163N R101W	 	 
	 	 	 	 	 	 	 	 	 	 	SEC 10: S/2	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	497021C	 	KATHLEEN A. CYPHER, A MARRIED WOMAN DEALING IN HER SOLE AND SEPARATE	 	ST. MARY LAND & EXPLORATION COMPANY	 	3/31/2010	 	284M	 	Insofar and only insofar as said lease covers	 	Divide, ND
	57968	 	PROPERTY	 	 	 	 	 	170	 	and affects the following:	 	 
	 	 	 	 	 	 	 	 	249351	 	T163N R101W	 	 
	 	 	 	 	 	 	 	 	 	 	SEC 10: S/2	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	497070A	 	DELORES C. TUBBS, AKA DELORES CLARA SEYFERT TUBBS, A WIDOW	 	ST. MARY LAND & EXPLORATION COMPANY	 	5/10/2010	 	288M	 	Insofar and only insofar as said lease covers	 	Divide, ND
	58305	 	 	 	 	 	 	 	182	 	and affects the following:	 	 
	 	 	 	 	 	 	 	 	250439	 	T163N R101W	 	 
	 	 	 	 	 	 	 	 	 	 	SEC 11: NW/4	 	 

 

    	 

    	 

    

 

	497070B	 	MIDGE SEYFERT, AKA EMANUEL F. SEYFERT, AKA EMANUEL FREDERICK SEYFERT	 	ST. MARY LAND & EXPLORATION COMPANY	 	5/10/2010	 	288M	 	Insofar and only insofar as said lease covers	 	Divide, ND
	58305	 	AND SANDRA SEYFERT, HUSBAND AND WIFE	 	 	 	 	 	678	 	and affects the following:	 	 
	 	 	 	 	 	 	 	 	250670	 	T163N R101W	 	 
	 	 	 	 	 	 	 	 	 	 	SEC 11: NW/4	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	497070C	 	DONALD A. SEYFERT, AKA DONALD ALFRED SEYFERT AND THELMA SEYFERT,	 	ST. MARY LAND & EXPLORATION COMPANY	 	5/10/2010	 	288M	 	Insofar and only insofar as said lease covers	 	Divide, ND
	58305	 	HUSBAND AND WIFE	 	 	 	 	 	173	 	and affects the following:	 	 
	 	 	 	 	 	 	 	 	250436	 	T163N R101W	 	 
	 	 	 	 	 	 	 	 	 	 	SEC 11: NW/4	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	497076A	 	JOHN FREDERICK SEYFERT, A MARRIED MAN DEALING IN HIS SOLE AND SEPARATE	 	ST. MARY LAND & EXPLORATION COMPANY	 	4/26/2010	 	287M	 	Insofar and only insofar as said lease covers	 	Divide, ND
	58308	 	PROPERTY	 	 	 	 	 	102	 	and affects the following:	 	 
	 	 	 	 	 	 	 	 	250139	 	T163N R101W	 	 
	 	 	 	 	 	 	 	 	 	 	SEC 11: NE/4	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	497076B	 	LETA MARLENE FISHER, A SINGLE WOMAN	 	ST. MARY LAND & EXPLORATION COMPANY	 	4/26/2010	 	290M	 	Insofar and only insofar as said lease covers	 	Divide, ND
	58308	 	 	 	 	 	 	 	659	 	and affects the following:	 	 
	 	 	 	 	 	 	 	 	251273	 	T163N R101W	 	 
	 	 	 	 	 	 	 	 	 	 	SEC 11: NE/4	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	497076C	 	BARBARA PETERSON AND JAMES K. PETERSON, WIFE AND HUSBAND	 	SM ENERGY COMPANY	 	6/2/2010	 	290M	 	Insofar and only insofar as said lease covers	 	Divide, ND
	58308	 	 	 	 	 	 	 	210	 	and affects the following:	 	 
	 	 	 	 	 	 	 	 	251055	 	T163N R101W	 	 
	 	 	 	 	 	 	 	 	 	 	SEC 11: NE/4	 	 

 

    	 

    	 

    

 

	497076D	 	DEWEY WRIGHT, A SINGLE MAN	 	ST. MARY LAND & EXPLORATION COMPANY	 	4/26/2010	 	294M	 	Insofar and only insofar as said lease covers	 	Divide, ND
	58308	 	 	 	 	 	 	 	344	 	and affects the following:	 	 
	 	 	 	 	 	 	 	 	252311	 	T163N R101W	 	 
	 	 	 	 	 	 	 	 	 	 	SEC 11: NE/4	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	497891A	 	KASMER & AAFEDT OIL INC.	 	SM ENERGY COMPANY	 	7/28/2011	 	318M	 	Insofar and only insofar as said lease covers	 	Divide, ND
	61771	 	 	 	 	 	 	 	632	 	and affects the following:	 	 
	 	 	 	 	 	 	 	 	259720	 	T163N R101W	 	 
	 	 	 	 	 	 	 	 	 	 	SEC 3: S/2	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	495078C	 	FRED SEYFERT AND CHERYL SEYFERT, HUSBAND AND WIFE	 	ST. MARY LAND & EXPLORATION COMPANY	 	4/9/2010	 	286M	 	Insofar and only insofar as said lease covers	 	Divide, ND
	52207	 	 	 	 	 	 	 	 	 	and affects the following:	 	 
	 	 	 	 	 	 	 	 	249866	 	T163N R 101W	 	 
	 	 	 	 	 	 	 	 	 	 	SEC 12: N/2NW/4, SW/4NW/4	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	495078D	 	DENNIS SEYFERT AND BEVERLY SEYFERT, HUSBAND AND WIFE	 	ST. MARY LAND & EXPLORATION COMPANY	 	4/12/2010	 	287M	 	Insofar and only insofar as said lease covers	 	Divide, ND
	52207	 	 	 	 	 	 	 	91	 	and affects the following:	 	 
	 	 	 	 	 	 	 	 	250136	 	T163N R 101W	 	 
	 	 	 	 	 	 	 	 	 	 	SEC 12: N/2NW/4, SW/4NW/4	 	 

 

    	 

    	 

    

 

	495078E	 	PAMELA HULME, A MARRIED WOMAN DEALING IN HER SOLE AND SEPARATE	 	ST. MARY LAND & EXPLORATION COMPANY	 	4/12/2010	 	287M	 	Insofar and only insofar as said lease covers	 	Divide, ND
	52207	 	PROPERTY	 	 	 	 	 	343	 	and affects the following:	 	 
	 	 	 	 	 	 	 	 	250241	 	T163N R101W	 	 
	 	 	 	 	 	 	 	 	 	 	SEC 12: N/2NW/4, SW/4NW/4	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	495078F	 	ELAINE LACASSE, EXECUTOR OF THE ESTATE OF GLADYS IRENE SEYFERT, AKA	 	ST. MARY LAND & EXPLORATION COMPANY	 	4/12/2010	 	294M	 	Insofar and only insofar as said lease covers	 	Divide, ND
	52207	 	GLADYS SEYFERT, DECEASED	 	 	 	 	 	336	 	and affects the following:	 	 
	 	 	 	 	 	 	 	 	252309	 	T163N R101W	 	 
	 	 	 	 	 	 	 	 	 	 	SEC 12: N/2NW/4, SW/4NW/4	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	495080H	 	PATSY BROWN, A WIDOW	 	ST. MARY LAND & EXPLORATION COMPANY	 	3/31/2010	 	285M	 	Insofar and only insofar as said lease covers	 	Divide, ND
	60591	 	 	 	 	 	 	 	534	 	and affects the following:	 	 
	 	 	 	 	 	 	 	 	249719	 	T163N R101W	 	 
	 	 	 	 	 	 	 	 	 	 	SEC 12: NW/4NE/4, S/2NE/4, SE/4NW/4	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	495080I	 	MARTIN L. BROWN, A MARRIED MAN DEALING IN HIS SOLE AND SEPARATE	 	ST. MARY LAND & EXPLORATION COMPANY	 	4/1/2010	 	284M	 	Insofar and only insofar as said lease covers	 	Divide, ND
	60591	 	PROPERTY	 	 	 	 	 	642	 	and affects the following:	 	 
	 	 	 	 	 	 	 	 	249532	 	T163N R101W	 	 
	 	 	 	 	 	 	 	 	 	 	SEC 12: NW/4NE/4, S/2NE/4, SE/4NW/4	 	 

 

    	 

    	 

    

 

	495080J	 	KATHLEEN C. HOLT, FKA KATHLEEN C. LIETZKE, A MARRIED WOMAN DEALING IN	 	ST. MARY LAND & EXPLORATION COMPANY	 	4/1/2010	 	286M	 	Insofar and only insofar as said lease covers	 	Divide, ND
	6591	 	HER SOLE AND SEPARATE PROPERTY	 	 	 	 	 	 	 	and affects the following:	 	 
	 	 	 	 	 	 	 	 	249869	 	T163N R101W	 	 
	 	 	 	 	 	 	 	 	 	 	SEC 12: NW/4NE/4, S/2NE/4, SE/4NW/4	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	495080K	 	HELEN B. RYDER AND CHARLES RYDER, WIFE AND HUSBAND	 	ST. MARY LAND & EXPLORATION COMPANY	 	3/31/2010	 	285M	 	Insofar and only insofar as said lease covers	 	Divide, ND
	60591	 	 	 	 	 	 	 	431	 	and affects the following:	 	 
	 	 	 	 	 	 	 	 	249680	 	T163N R101W	 	 
	 	 	 	 	 	 	 	 	 	 	SEC 12: NW/4NE/4, S/2NE/4, SE/4NW/4	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	495080L	 	STEPHEN P. BROWN, A MARRIED MAN DEALING IN HIS SOLE AND SEPARATE	 	ST. MARY LAND & EXPLORATION COMPANY	 	4/1/2010	 	285M	 	Insofar and only insofar as said lease covers	 	Divide, ND
	60591	 	PROPERTY	 	 	 	 	 	412	 	and affects the following:	 	 
	 	 	 	 	 	 	 	 	249675	 	T163N R101W	 	 
	 	 	 	 	 	 	 	 	 	 	SEC 12: NW/4NE/4, S/2NE/4, SE/4NW/4	 	 

 

    	 

    	 

    

 

	495080M	 	ERIN A. SARDINAS, A MARRIED WOMAN DEALING IN HER SOLE AND SEPARATE	 	ST. MARY LAND & EXPLORATION COMPANY	 	4/1/2010	 	285M	 	Insofar and only insofar as said lease covers	 	Divide, ND
	60591	 	PROPERTY	 	 	 	 	 	612	 	and affects the following:	 	 
	 	 	 	 	 	 	 	 	249752	 	T163N R101W	 	 
	 	 	 	 	 	 	 	 	 	 	SEC 12: NW/4NE/4, S/2NE/4, SE/4NW/4	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	495091B	 	ARCHIE R. KRESS, AKA ARCHIE KRESS AND ELAINE M. KRESS, HUSBAND AND	 	ST. MARY LAND & EXPLORATION COMPANY	 	3/26/2010	 	284M	 	Insofar and only insofar as said lease covers	 	Divide, ND
	52309	 	WIFE	 	 	 	 	 	159	 	and affects the following:	 	 
	52205	 	 	 	 	 	 	 	249348	 	T163N R101W	 	 
	 	 	 	 	 	 	 	 	 	 	SEC 11: SW/4	 	 
	 	 	 	 	 	 	 	 	 	 	SEC 12: SW/4	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	495091C	 	RUSSELL E. KRESS AND DONNA M. KRESS, HUSBAND AND WIFE	 	ST. MARY LAND & EXPLORATION COMPANY	 	3/26/2010	 	284M	 	Insofar and only insofar as said lease covers	 	Divide, ND
	52309	 	 	 	 	 	 	 	166	 	and affects the following:	 	 
	52205	 	 	 	 	 	 	 	249350	 	T163N R101W	 	 
	 	 	 	 	 	 	 	 	 	 	SEC 11: SW/4	 	 
	 	 	 	 	 	 	 	 	 	 	SEC 12: SW/4	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	495091F	 	BEULAH E. MAHANY, A WIDOW	 	ST. MARY LAND & EXPLORATION COMPANY	 	4/8/2010	 	284M	 	Insofar and only insofar as said lease covers	 	Divide, ND
	52205	 	 	 	 	 	 	 	609	 	and affects the following:	 	 
	 	 	 	 	 	 	 	 	249509	 	T163N R101W	 	 
	 	 	 	 	 	 	 	 	 	 	SEC 12: SW/4	 	 

 

    	 

    	 

    

 

	495091G	 	DONALD E. BUSCH, A SINGLE MAN	 	ST. MARY LAND & EXPLORATION COMPANY	 	4/8/2010	 	287M	 	Insofar and only insofar as said lease covers	 	Divide, ND
	52205	 	 	 	 	 	 	 	88	 	and affects the following:	 	 
	 	 	 	 	 	 	 	 	250135	 	T163N R101W	 	 
	 	 	 	 	 	 	 	 	 	 	SEC 12: SW/4	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	495116C	 	FRED SEYFERT AND CHERYL SEYFERT, HUSBAND AND WIFE	 	ST. MARY LAND & EXPLORATION COMPANY	 	4/9/2010	 	286M	 	Insofar and only insofar as said lease covers	 	Divide, ND
	52380	 	 	 	 	 	 	 	162	 	and affects the following:	 	 
	 	 	 	 	 	 	 	 	249867	 	T163N R101W	 	 
	 	 	 	 	 	 	 	 	 	 	SEC 11: SE/4	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	495116D	 	DENNIS SEYFERT AND BEVERLY SEYFERT, HUSBAND AND WIFE	 	ST. MARY LAND & EXPLORATION COMPANY	 	4/12/2010	 	287M	 	Insofar and only insofar as said lease covers	 	Divide, ND
	52380	 	 	 	 	 	 	 	95	 	and affects the following:	 	 
	 	 	 	 	 	 	 	 	250137	 	T163N R101W	 	 
	 	 	 	 	 	 	 	 	 	 	SEC 11: SE/4	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	495116E	 	PAMELA HULME, A MARRIED WOMAN DEALING IN HER SOLE AND SEPARATE	 	ST. MARY LAND & EXPLORATION COMPANY	 	4/12/2010	 	287M	 	Insofar and only insofar as said lease covers	 	Divide, ND
	52380	 	PROPERTY	 	 	 	 	 	339	 	and affects the following:	 	 
	 	 	 	 	 	 	 	 	250240	 	T163N R101W	 	 
	 	 	 	 	 	 	 	 	 	 	SEC 11: SE/4	 	 

 

    	 

    	 

    

 

	495116F	 	ELAINE LACASSE, EXECUTOR OF THE ESTATE OF GLADYS IRENE SEYFERT, AKA	 	ST. MARY LAND & EXPLORATION COMPANY	 	4/12/2010	 	294M	 	Insofar and only insofar as said lease covers	 	Divide, ND
	52380	 	GLADYS SEYFERT, DECEASED	 	 	 	 	 	340	 	and affects the following:	 	 
	 	 	 	 	 	 	 	 	252310	 	T163N R101W	 	 
	 	 	 	 	 	 	 	 	 	 	SEC 11: SE/4	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	495116G	 	SANDRA JEAN MEYER, TRUSTEE OF THE ARVIE TERNQUIST FAMILY MINERAL TRUST	 	SM ENERGY COMPANY	 	9/2/2010	 	296M	 	Insofar and only insofar as said lease covers	 	Divide, ND
	52380	 	DATED THE 11TH DAY OF JULY, 2007	 	 	 	 	 	692	 	and affects the following:	 	 
	 	 	 	 	 	 	 	 	253093	 	T163N R101W	 	 
	 	 	 	 	 	 	 	 	 	 	SEC 11: SE/4	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	495116H	 	EVELYN TERNQUIST, TRUSTEE OF THE CLAYTON TERNQUIST FAMILY MINERAL	 	SM ENERGY COMPANY	 	9/2/2010	 	299M	 	Insofar and only insofar as said lease covers	 	Divide, ND
	52380	 	TRUST DATED 12/6/07	 	 	 	 	 	268	 	and affects the following:	 	 
	 	 	 	 	 	 	 	 	253882	 	T163N R101W	 	 
	 	 	 	 	 	 	 	 	 	 	SEC 11: SE/4	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	498363A	 	LINDA ST. AORO, A MARRIED WOMAN DEALING IN HER SOLE AND SEPARATE	 	SM ENERGY COMPANY	 	8/4/2011	 	319M	 	Insofar and only insofar as said lease covers	 	Divide, ND
	62118	 	PROPERTY	 	 	 	 	 	684	 	and affects the following:	 	 
	 	 	 	 	 	 	 	 	260093	 	T163N R101W	 	 
	 	 	 	 	 	 	 	 	 	 	SEC 12: SE/4	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	498363B	 	BLANCHE B. LESTER, A MARRIED WOMAN DEALING IN HER SOLE AND SEPARATE	 	SM ENERGY COMPANY	 	8/4/2011	 	321M	 	Insofar and only insofar as said lease covers	 	Divide, ND
	62118	 	PROPERTY	 	 	 	 	 	441	 	and affects the following:	 	 
	 	 	 	 	 	 	 	 	260646	 	T163N R101W	 	 
	 	 	 	 	 	 	 	 	 	 	SEC 12: SE/4	 	 

 

    	 

    	 

    

 

	498363C	 	RONALD BROCKAMP, A MARRIED MAN DEALING IN HIS SOLE AND SEPARATE	 	SM ENERGY COMPANY	 	8/4/2011	 	322M	 	Insofar and only insofar as said lease covers	 	Divide, ND
	62118	 	PROPERTY	 	 	 	 	 	172	 	and affects the following:	 	 
	 	 	 	 	 	 	 	 	260856	 	T163N R101W	 	 
	 	 	 	 	 	 	 	 	 	 	SEC 12: SE/4	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	498363D	 	BRIAN BROCKAMP, A SINGLE MAN	 	SM ENERGY COMPANY	 	8/4/2011	 	318M	 	Insofar and only insofar as said lease covers	 	Divide, ND
	62118	 	 	 	 	 	 	 	610	 	and affects the following:	 	 
	 	 	 	 	 	 	 	 	259710	 	T163N R101W	 	 
	 	 	 	 	 	 	 	 	 	 	SEC 12: SE/4	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	497574A	 	WILLIAM J. WITHERSPOON III, A SINGLE MAN	 	SM ENERGY COMPANY	 	3/31/2011	 	310M	 	Insofar and only insofar as said lease covers	 	Divide, ND
	60628	 	 	 	 	 	 	 	70	 	and affects the following:	 	 
	 	 	 	 	 	 	 	 	257040	 	T163N R101W	 	 
	 	 	 	 	 	 	 	 	 	 	SEC 10: N/2	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	497574B	 	KASMER & AAFEDT OIL INC.	 	SM ENERGY COMPANY	 	7/28/2011	 	318M	 	Insofar and only insofar as said lease covers	 	Divide, ND
	60628	 	 	 	 	 	 	 	629	 	and affects the following:	 	 
	 	 	 	 	 	 	 	 	259719	 	T163N R101W	 	 
	 	 	 	 	 	 	 	 	 	 	SEC 10: N/2	 	 

 

    	 

    	 

    

 

	497813A	 	RED CROWN ROYALTIES LLC	 	SM ENERGY COMPANY	 	8/1/2011	 	318M	 	Insofar and only insofar as said lease covers	 	Divide, ND
	61608	 	 	 	 	 	 	 	647	 	and affects the following:	 	 
	 	 	 	 	 	 	 	 	259735	 	T163N R101W	 	 
	 	 	 	 	 	 	 	 	 	 	SEC 3: Lots 1-4, S/2N/2SECURITY AGREEMENT

 

This SECURITY AGREEMENT
(as amended, restated, supplemented or otherwise modified from time to time, the “Agreement”) is made and entered
into as of December 27, 2012, (the “Effective Date”), by American Eagle Energy Corporation, a Nevada corporation
(“AEEC”), with its principal office in Littleton, Colorado, and the address for purposes hereof being 2549 West
Main Street, Suite 202, Littleton, Colorado 80120, and AMZG, INC., a Nevada corporation with its principal office in Littleton,
Colorado, and the address for purposes hereof being 2549 West Main Street, Suite 202, Littleton, Colorado 80120 (“AMZG”;
together with AEEC, collectively the “Debtors”, and each individually “Debtor”), in favor
of MACQUARIE BANK LIMITED, a bank incorporated under the laws of Australia (“Secured Party”). The address for
Secured Party for purposes hereof is Level 1, 1 Martin Place, Energy Markets Division, Sydney, New South Wales, 2000 Australia,
Attention: Legal Risk Management.

 

RECITALS

 

A.           Debtors
and Secured Party have entered into that certain ISDA Master Agreement dated as of December 27, 2012, together with all schedules,
annexes and confirmations in respect thereof (together, as amended, restated, supplemented or otherwise modified from time to time,
the “ISDA”).

 

B.           Debtors
executed and delivered to Secured Party that certain Mortgage, Security Agreement, Fixture Filing, Financing Statement and Assignment
of Production and Revenue (as amended, restated, supplemented or otherwise modified from time to time, collectively, the “Mortgage”),
of even date hereof granting liens, security interests and other rights in favor of Secured Party in certain of Debtor’s
properties.

 

C.           Debtors
executed certain other Credit Support Documents (as defined in the ISDA) of even date hereof in favor of Secured Party, including,
without limitation, the Three Party Lockbox Agreement Amendment to Cash Management Terms and Conditions and Lockbox Management
Agreement (collectively, the “Lockbox Documents”), Deposit Account Control Agreement, Notices of Assignment
of Proceeds and Letters in Lieu.

 

D.           To
further secure the obligations under the ISDA Documents, Debtors have agreed to assign and grant to Secured Party, and is assigning
and granting, a security interest in and lien upon all right, title and interest of Debtors in and to the property hereinafter
described.

 

E.           Secured
Party has conditioned its obligation to enter into and extend credit under the ISDA upon, among other things, the execution and
delivery of this Agreement by Debtors, and Debtors have agreed to enter into this Agreement.

 

    	 

    	 

    

 

AGREEMENTS

 

NOW, THEREFORE, (i)
in order to comply with the terms and conditions of the ISDA and the other ISDA Documents, (ii) for and in consideration of the
premises and the agreements herein contained, and (iii) for other good and valuable consideration, the receipt and sufficiency
of all of which being hereby acknowledged, Debtors hereby agree with Secured Party as follows:

 

ARTICLE
I

DEFINITIONS

 

1.1          Terms
Defined Above. As used in this Agreement, each of the terms defined in the preamble
hereto and the above recital paragraphs shall have the meaning assigned to such term above.

 

1.2          Definitions
Contained in the ISDA or the Code. Each capitalized term used in this Agreement and
not defined in this Agreement shall have the meaning assigned such term in the ISDA, and if not therein defined, such capitalized
term shall have the meaning assigned such term in the Code.

 

1.3          Certain
Definitions. As used in this Agreement, each of the following terms shall have the
meaning set forth for such term below, unless the context otherwise requires:

 

“Assets”
means any interest in any kind of property or assets (whether real, personal, or mixed, tangible or intangible) of any Person.

 

“Code”
means the Uniform Commercial Code as presently in effect in the State of Texas, and as amended from time to time; provided that
if by mandatory provisions of law the perfection or the effect of perfection or non-perfection of the security interests granted
pursuant to Article II, as well as all other security interests created or assigned as additional security for the Secured Indebtedness
pursuant to the provisions of this Agreement in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction
other than the State of Texas, “Code” means the Uniform Commercial Code as in effect in such other jurisdiction for
purposes of the provisions hereof relating to such perfection or effect of perfection or non-perfection. Except as otherwise defined
or indicated by the context herein, all terms which are defined in the Code shall have their respective meanings as used in Articles
8 and 9 of the Code.

 

“Collateral”
means all Assets, including, without limitation, cash or other proceeds, in which Secured Party shall have a security interest
pursuant to Article II of this Agreement.

 

“Event
of Default” means (i)(A) the occurrence of any payment default by any Debtor hereunder or
(B) any other default by any Debtor hereunder which is not cured within ten (10) business days following any Debtor’s default
or the occurrence of (ii)(X) an Event of Default, (Y) a Termination Event or (Z) an Additional Termination Event, each as defined
in the ISDA.

 

    	2

    	 

    

 

“Hydrocarbons”
shall have the meaning set forth in the ISDA.

 

“ISDA
Documents” means this Agreement, the ISDA, the Mortgage, and the other Credit Support Documents, including, without limitation,
the Lockbox Documents, Deposit Account Control Agreement, Notices of Assignment of Proceeds and Letters in Lieu (each of the foregoing
as amended, supplemented, restated, extended or replaced from time to time), and all other documents, instruments, agreements,
financing statements, certificates and consents executed and delivered in connection with the foregoing, and all amendments, supplements,
restatements, and modifications of, or substitutions for, any of the foregoing.

 

“Related
Rights” means all chattel papers, documents and instruments relating to Accounts or General Intangibles and all rights
now or hereafter existing in and to all security agreements, leases, and other contracts securing or otherwise relating to any
Accounts or General Intangibles or any such chattel papers, documents or instruments.

 

“Secured
Indebtedness” means (i) all payments owing by any Debtor to Secured Party in respect of the ISDA, and (ii) all other
present and future liabilities and obligations of any Debtor to Secured Party arising under the ISDA and the other ISDA Documents,
including (A) reasonable attorneys’ fees and expenses, and (B) any obligations in respect of interest, fees, or expenses
that accrue after the filing of any proceeding under applicable bankruptcy or other debtor relief laws, regardless of whether allowed
or allowable in whole or in part as a claim in such proceeding.

 

ARTICLE
II

SECURITY INTEREST

 

To secure the Secured
Indebtedness, Debtors hereby grant to Secured Party a continuing security interest in, a general lien upon, and a right of set-off
against all of Debtors’ right, title and interest in the following described Assets, but, only to the extent any of the following
described Assets relate, or are attributable, directly or indirectly, to the Debtors’ oil and gas properties described on
Exhibit A attached here to and incorporated herein for all purposes:

 

(a)          all
now existing and hereafter arising or acquired Accounts, Goods, General Intangibles, Payment Intangibles, Deposit Accounts that
are subject to the Lockbox Documents and a Deposit Account Control Agreement, among Debtors, Secured Party and the applicable depository
bank), Chattel Paper (including, without limitation, Electronic Chattel Paper and Tangible Chattel Paper), Documents, Records,
Instruments, advances of credit, money, As-extracted collateral (including As-extracted collateral from any Debtor’s ownership
from its oil and gas properties described on Exhibit A attached hereto), Equipment, Inventory, Fixtures and Supporting Obligations,
together with all products of and Accessions to any of the foregoing and all Proceeds of any of the foregoing (including without
limitation all insurance policies and proceeds thereof);

 

    	3

    	 

    

 

(b)          to
the extent, if any, not included in clause (a) above, any Debtor’s now existing or hereafter arising or acquired contracts,
agreements, arrangements or understandings (i) for the sale, supply, provision or disposition of any Hydrocarbons or other minerals
by any Debtor or any one or more of its agents, representatives, successors or assigns to any purchaser or acquirer thereof, and
all products, replacements and proceeds thereof (including, without limitation, all sales contracts for Hydrocarbons) and (ii)
relating to the mining, drilling or recovery of any mineral or Hydrocarbon reserves for the benefit of or on behalf of any Debtor
or any one or more of its agents, representatives, successors or permitted assigns (including, without limitation, all contract
mining, drilling or recovery agreements and arrangements), and all products and Proceeds thereof and payments thereunder, together
with all products and Proceeds (including, without limitation, all insurance policies and proceeds) of and any Accessions to any
of the foregoing;

 

(c)          to
the extent not included in clause (a) above, all Hydrocarbons and other minerals severed or extracted from the ground (specifically
including all “As-extracted collateral” of any Debtor and all severed or extracted Hydrocarbons and other minerals
severed or extracted from the ground purchased from other parties), and all Accounts, General Intangibles and products and Proceeds
thereof or related thereto, regardless of whether any such Hydrocarbons or other minerals are in raw form or processed for sale
to the extent that such Debtor had an interest in the Hydrocarbons or other minerals before extraction or severance;

 

(d)          to
the extent not included above, each and every other item of personal property and fixtures, including, without limitation, all
licenses, contracts and agreements, (including, without limitation, commodity hedge agreements and interest rate hedge agreements),
and all collateral for the payment or performance of any contract or agreement, together with all products and Proceeds (including
all insurance policies and proceeds) and any Accessions to any of the foregoing;

 

(e)          all
now existing and hereafter arising or acquired business records and information (including, without limitation, seismic, geological
and geophysical data and interpretations), including further, without limitation, computer tapes and other storage media containing
the same and computer programs and software (including, without limitation, source code, object code and related manuals and documentation
and all licenses to use such software) for accessing and manipulating such information; and

 

(f)          any
additional property of any Debtor from time to time delivered to or deposited with Secured Party or its agent as security for the
Secured Indebtedness or otherwise pursuant to the terms of this Agreement or the other ISDA Documents.

 

    	4

    	 

    

 

ARTICLE
III

REPRESENTATIONS AND WARRANTIES

 

In order to induce
Secured Party to enter into this Agreement, Debtors represent and warrant to Secured Party (which representations and warranties
will survive the creation of the Secured Indebtedness and the entry into the ISDA) that:

 

3.1          Ownership
and Liens. Except for the security interest of Secured Party granted in this Agreement
or in any of the other ISDA Documents and any Permitted Lien (as defined in the Mortgage and in the ISDA), Debtors own Defensible
Title to the Collateral free and clear of any other Liens and adverse claims. Debtors have full right, power and authority to grant
to Secured Party the security interests, liens and other rights in the Collateral in the manner provided herein, free and clear
of any other Liens and adverse claims other than Permitted Liens. No other Lien or adverse claim has been created by any Debtor
or is known by any Debtor to exist with respect to any Collateral; and to the knowledge of Debtors, no financing statement or other
security instrument is on file in any jurisdiction covering such Collateral (including with regard to Permitted Liens), other than
those in favor of Secured Party.

 

3.2          Status
of Accounts. Each Account of each Debtor now existing represents, and each Account
of each Debtor hereafter arising will represent, the valid and legally enforceable indebtedness of a bona fide account debtor arising
from the sale or lease or rendition by each Debtor of goods and/or services and is not and will not be subject to contra accounts,
set-offs, defenses or counterclaims by or available to account debtors obligated on the Accounts of each Debtor except as disclosed
to Secured Party in writing. Such goods will have been delivered to, or be in the process of being delivered to, and such services
will have been rendered by each Debtor to the account debtor and accepted by the account debtor. The amount shown as to each Account
of each Debtor on each Debtor’s books will be the true and undisputed amount owing and unpaid thereon, subject to any discounts,
allowances, rebates, credits and adjustments to which the account debtor has a right and which are in the ordinary course of business
and properly accounted for in each Debtor’s financial statements that have been delivered or are hereafter delivered to Secured
Party. 

 

3.3          Status
of Related Rights. All Related Rights of Debtor are, and those hereafter arising will
be, valid and genuine. Any chattel paper included in the Related Rights has, and those hereafter arising will have, only one duplicate
original counterpart which constitutes chattel paper or collateral within the meaning of the Code or the law of any applicable
jurisdiction.

 

3.4          Location.
Each Debtor’s chief executive office and chief place of business is located at the address set forth in the preamble of this
Agreement. The office where each Debtor keeps its records concerning the Accounts of Debtor and the General Intangibles of Debtor
and the original of all the Related Rights of Debtor are located at the same address as such Debtor’s address set forth in
the preamble of this Agreement. The jurisdiction of organization for each Debtor is the State of Nevada.

 

    	5

    	 

    

 

3.5          Secured
Party’s Security Interest. This Agreement creates a valid and binding
security interest in the Collateral securing the Secured Indebtedness. All filings (which filings are described in Section
4.7 of this Agreement) and other actions necessary or desirable to perfect or
protect such security interest have been duly or will be immediately taken by Debtors. No further or subsequent filing,
recording, registration or other public notice of such security interest is necessary in any office or jurisdiction in order
to perfect such security interest or to continue, preserve or protect such security interest except for continuation
statements or for filings upon the occurrence of any of the events stated in Section 4.7
of this Agreement. To the extent such security interest can be perfected under the Code, such perfected security interest in
the Collateral constitutes a first-priority (except as to Permitted Liens) security interest under the Code.

 

ARTICLE
IV

COVENANTS AND AGREEMENTS

 

Debtors will at all
times comply with the covenants contained in this Article IV, from the date hereof and for so long as the ISDA is in effect
(other than the indemnity obligations and other continuing obligations under the ISDA Documents that survive termination thereof).

 

4.1          Title.
Debtors agree to protect the Defensible Title to the Collateral. 

 

4.2          Possession
of Collateral. Secured Party shall be deemed to have possession of any of the Collateral
in transit to it or set apart for it or its agent. Otherwise the Collateral shall remain in the possession or control of Debtors
at all times at the risk of loss of Debtors.

 

4.3          Inspection
of Collateral. Secured Party may from to time (but it shall not be obligated to) inspect
each Debtor’s records concerning the Collateral; provided that such inspection shall during reasonable business hours upon
three (3) business days prior written notice by Secured Party and its duly accredited representatives, but not as to unreasonably
interfere with the business of such Debtors.

 

4.4          Further
Assurances. Debtors will (i) from time to time sign, execute, deliver and file, at
the reasonable request of Secured Party, such financing statements, security agreements or other documents as are necessary to
confirm, perfect, preserve and protect the security interests intended to be granted hereby; (ii) procure any instruments or documents
as may be reasonably requested by Secured Party as are necessary to confirm, perfect, preserve and protect the security interests
intended to be granted hereby; and (iii) take all action that may be necessary or desirable, at the reasonable request of Secured
Party, to confirm, perfect, preserve and protect the security interests intended to be granted hereby. In addition, Debtors hereby
authorize Secured Party to file such financing statements without the signature of any Debtor either in Secured Party’s name
or in the name of any Debtor and as agent and attorney-in-fact for any Debtor. Debtors shall do all additional and further acts
or things, give assurances and execute documents or instruments as Secured Party reasonably requires to vest more completely in
and assure to Secured Party its rights under this Agreement.

 

    	6

    	 

    

 

4.5          Filing
Reproductions. At the option of Secured Party, a carbon, photographic or other reproduction
of this Agreement shall be sufficient as a financing statement and may be filed as a financing statement.

 

4.6          Expenses.
Each Debtor agrees to pay to Secured Party, all advances, charges, out-of-pocket costs and expenses (including, without limitation,
reasonable attorneys’ fees and expenses) incurred by Secured Party in connection with the transaction which gives rise to
this Agreement, in connection with confirming, perfecting and preserving the security interest and other rights created under
this Agreement, in connection with protecting Secured Party against any claims or interests of any Person against the Collateral,
and in exercising any right, power or remedy conferred by this Agreement or by law or in equity (including, without limitation,
reasonable attorneys’ fees and legal expenses incurred by Secured Party in the collection of instruments deposited with
or purchased by Secured Party and amounts incurred in connection with the operation, maintenance or foreclosure of any or all
of the Collateral). The amount of all such advances, charges, costs and expenses shall be due and payable by Debtors to Secured
Party upon demand together with interest thereon as provided in the ISDA.

 

4.7          Financing
Statement Filings; Notifications. Debtors recognize that one or more financing statements
pertaining to the Collateral will be filed in one or more filing offices. Debtors will promptly notify Secured Party of any condition
or event that may change the proper location for the filing of any financing statements or other public notice or recordings for
the purpose of perfecting a security interest in the Collateral. Without limiting the generality of the foregoing, Debtors will
(a) promptly notify Secured Party of any change (i) in the location of the office where any Debtor keeps its records concerning
its Accounts or (ii) in the “location” of any Debtor within the meaning set forth in the Code or the jurisdiction
in which any Debtor is incorporated, organized or formed; (b) prior to any of the Collateral becoming so related to any particular
real estate so as to become a fixture on such real estate, notify Secured Party of the description of such real estate and the
name of the record owner thereof, to the extent such real estate is not already encumbered in favor or for the benefit of Secured
Party; and (c) promptly notify Secured Party of any change in any Debtor’s name, identity or structure. In any notice
furnished pursuant to this Section 4.7, such Debtor will expressly state
that the notice is required by this Agreement and contains facts that will or may require additional filings of financing statements
or other notices for the purpose of continuing perfection of Secured Party’s security interest in the Collateral. Further,
Debtors authorize Secured Party to file (but it shall not be obligated to file), at the expense of Debtors, any and all financing
statements, pursuant to Article 9 of the Code, as Secured Party deems necessary in its sole discretion in conjunction with this
Agreement.

 

    	7

    	 

    

 

ARTICLE
V

RIGHTS, REMEDIES AND WARRANTIES

 

5.1          With
Respect to Collateral. If an Event of Default has occurred and is continuing, Secured
Party is hereby fully authorized and empowered (without the necessity of any further consent or authorization from, or notice to,
any Debtor) and the Secured Party is expressly granted the power and right, and Debtors hereby constitute, appoint and make Secured
Party, as its true and lawful attorney-in-fact and agent in its name, place and stead, with full power of substitution, in Secured
Party’s name or any Debtor’s name or otherwise, for the sole use and benefit of Secured Party, but at Debtors’
cost and expense, to exercise all or any of the following rights and powers at any time with respect to all or any of the Collateral:

 

(a)          to
notify account debtor or the obligors on the Accounts, the General Intangibles and the Related Rights to make and deliver payment
to Secured Party;

 

(b)          to
demand, sue for, collect, receive and give acquittance for any and all funds due or to become due under such Accounts, General
Intangibles and Related Rights and otherwise deal with proceeds;

 

(c)          to
receive, take, endorse, assign and deliver any and all checks, notes, drafts, Documents and other negotiable and non-negotiable
Instruments and Chattel Paper taken or received by Secured Party in connection therewith;

 

(d)          to
settle, compromise, compound, prosecute or defend any action or proceeding with respect thereto;

 

(e)          to
sell, transfer, assign or otherwise deal in or with the same or the Proceeds or avails thereof or the relative goods, as fully
and effectively as if Secured Party were the absolute owner thereof; and

 

(f)          to
extend the time of payment of any or all thereof and to grant waivers and make any allowance or other adjustment with reference
thereto;

 

provided, however that Secured Party
shall be under no obligation or duty to exercise any of the powers hereby conferred upon it and shall be without liability for
any act or failure to act in connection with the collection of, or the preservation of any rights under, any Collateral.

 

5.2          Default
Remedies. Upon the occurrence and during the continuance of any Event of Default,
Secured Party may then, or at any time thereafter and from time to time, apply, set-off, collect, sell in one or more sales, lease,
or otherwise dispose of, any or all of the Collateral, in its then condition or following any commercially reasonable preparation
or processing, in such order as Secured Party may elect, and any such sale may be made either at public or private sale at its
place of business or elsewhere, or at any brokers’ board or securities exchange, either for cash or upon credit or for future
delivery, at such price as Secured Party may deem fair, and Secured Party may be the purchaser of any or all Collateral so sold
and may hold the same thereafter in its own right free from any claim of Debtors or right of redemption. No such purchase or holding
by Secured Party shall be deemed retention by Secured Party in satisfaction of the Secured Indebtedness. All demands, notices and
advertisements, and the presentment of Assets at sale are hereby waived. If, notwithstanding the foregoing provisions, any applicable
provision of the Code or other law requires Secured Party to give reasonable notice of any such sale or disposition or other action,
Debtors hereby agree that twenty calendar days’ prior written notice shall constitute commercially reasonable notice. Secured
Party may require Debtors to assemble the Collateral and make it available to Secured Party at a place designated by Secured Party
which is reasonably convenient to Secured Party. Any sale hereunder may be conducted by an auctioneer or any officer or agent of
Secured Party.

 

    	8

    	 

    

 

5.3          Right
of Set-Off. Upon the occurrence and during the continuance of any Event of Default,
Secured Party is hereby authorized to then, or at any time thereafter and from time to time, without notice to Debtors (any such
notice being expressly waived by Debtors), apply and set-off (i) any and all deposits (general or special, time or demand, provisional
or final) of Debtors at any time held by Secured Party; (ii) any and all other claims of Debtors against Secured Party, now or
hereafter existing, (iii) any and all other indebtedness at any time owing by Secured Party to or for the account of Debtors;
(iv) any and all money, Instruments, securities, Documents, Chattel Paper, credits, claims, demands and other Assets, rights or
interests of Debtors which at any time shall come into the possession or custody or under the control of Secured Party, for any
purpose; and (v) the Proceeds of any of the foregoing Assets against the Secured Indebtedness as if the same were included in
the Collateral, and Debtors hereby grant to Secured Party a security interest in, a general lien upon, and a right of set-off
against the foregoing described Assets as security for the Secured Indebtedness. Secured Party shall have the right to so set-off
and apply such Assets against the Secured Indebtedness regardless of whether or not Secured Party shall have made any demand for
payment of any of the Secured Indebtedness or shall have given any other notice. Secured Party agrees to promptly notify Debtors
after any such set-off and application; provided that the failure of Secured
Party to give any such notice shall not affect the validity of such set-off and application. The rights of Secured Party under
this Section 5.3 are in addition to Secured Party’s other rights
and remedies (including, without limitation, other rights of set-off).

 

5.4          Proceeds.
After the occurrence and during the continuance of any Event of Default, the Proceeds of any sale or other disposition of the
Collateral and all sums received or collected by Secured Party from or on account of the Collateral shall be applied by Secured
Party as follows:

 

FIRST: to
the payment of all necessary costs and expenses incident to the execution and enforcement of this Agreement;

 

SECOND: to
any and all Secured Indebtedness until paid in full, application to be made in such order and in such manner as the holder of said
Secured Indebtedness may, in its discretion, elect; and

 

THIRD: the
balance, if any, to Debtors or their successors or assigns.

 

    	9

    	 

    

 

5.5          Secured
Party’s Duties. The powers conferred upon Secured Party by this Agreement are
solely to protect its interest in the Collateral and shall not impose any duty upon Secured Party to exercise any such powers.
Secured Party shall be under no duty whatsoever to make or give any presentment, demand for performance, notice of nonperformance,
protest, notice of protest, notice of dishonor or other notice or demand in connection with any Collateral or the Secured Indebtedness,
or to take any steps necessary to preserve any rights against prior parties. Secured Party shall not be liable for failure to collect
or realize upon any or all of the Secured Indebtedness or Collateral, or for any delay in so doing, nor shall Secured Party be
under any duty to take any action whatsoever with regard thereto. Secured Party shall use reasonable care in the custody and preservation
of any Collateral in its possession, but need not take any steps to keep the Collateral identifiable. Secured Party shall have
no duty to comply with any recording, filing or other legal requirements necessary to establish or maintain the validity, priority
or enforceability of, or Secured Party’s rights in or to, any of the Collateral.

 

5.6          Secured
Party’s Actions. To the extent permitted by applicable law, each Debtor waives
any right to require Secured Party to proceed against any Person, exhaust any Collateral or pursue any other remedy in Secured
Party’s power, and each Debtor waives any and all notice of acceptance of this Agreement or of creation, modification, rearrangement,
renewal or extension for any period of any of the Secured Indebtedness from time to time. All dealings between Debtors and Secured
Party, whether or not resulting in the creation of the Secured Indebtedness, shall conclusively be presumed to have been had or
consummated in reliance upon this Agreement. Upon the occurrence and during the continuance of an Event of Default, Debtors authorize
Secured Party, without notice or demand and without any reservation of rights against Debtors and without affecting Debtors’
liability hereunder or on the Secured Indebtedness, from time to time to (a) take and hold any other Assets as collateral, other
than the Collateral, as security for any or all of the Secured Indebtedness and exchange, enforce, waive and release any or all
of the Collateral or such other Assets; and (b) apply the Collateral or such other Assets and direct the order or manner of sale
thereof as Secured Party in its discretion may determine.

 

5.7          Transfer
of Secured Indebtedness and Collateral. Any of the Secured Indebtedness may be transferred,
in whole or in part, in accordance with the provisions of the ISDA Documents, and, upon any such transfer, Secured Party may transfer
any or all of the Collateral and shall be fully discharged thereafter from all liability with respect to the Collateral so transferred,
and the transferee shall be vested with all rights, powers and remedies of Secured Party hereunder with respect to Collateral so
transferred; but with respect to any Collateral not so transferred Secured Party shall retain all rights, powers and remedies hereby
given. Secured Party may at any time deliver any or all of the Collateral to Debtors whose receipt shall be a complete and full
acquittance for the Collateral so delivered, and Secured Party shall thereafter be discharged from any liability therefor.

 

5.8          Cumulative
Security. The execution and delivery of this Agreement in no manner shall impair or
affect any other security (by endorsement or otherwise) for the Secured Indebtedness. No security taken hereafter as security for
the Secured Indebtedness shall impair in any manner or affect this Agreement. All such now existing security and hereafter arising
or acquired additional security is to be considered as cumulative security.

 

5.9          Continuing
Agreement. This is a continuing Agreement and the grant of the security interests,
liens and other rights hereunder shall remain in full force and effect and all the rights, powers and remedies of Secured Party
hereunder shall continue to exist until the Secured Indebtedness is paid in full as the same become due and payable and the ISDA
has been fully satisfied and discharged in accordance with its terms (other than the indemnity obligations and other continuing
obligations under the ISDA that survive).

 

    	10

    	 

    

 

5.10        Cumulative
Rights. The rights, powers and remedies of Secured Party hereunder shall be in addition
to all rights, powers and remedies given by statute or rule of law and are cumulative. The exercise of any one or more of the rights,
powers and remedies provided herein shall not be construed as a waiver of any other rights, powers and remedies of Secured Party.
Furthermore, regardless of whether or not the Code is in effect in the jurisdiction where such rights, powers and remedies are
asserted, Secured Party shall have the rights, powers and remedies of a secured party under the Code. Secured Party may exercise
its lien or right of set-off with respect to the Secured Indebtedness in the same manner as if the Secured Indebtedness was unsecured.

 

5.11        Non-Judicial
Remedies. Secured Party may (but shall not be obligated to) enforce its rights hereunder
without prior judicial process or judicial hearing, and each Debtor expressly waives, renounces and knowingly relinquishes any
and all legal rights which might otherwise require Secured Party to enforce its rights by judicial process. In so providing for
non-judicial remedies, each Debtor recognizes and concedes that such remedies are consistent with the usage of the trade, are responsive
to commercial necessity and are the result of bargain at arm’s length. Nothing herein is intended to prevent Secured Party
from resorting to judicial process at its option.

 

ARTICLE
VI

MISCELLANEOUS

 

6.1          Exercise
of Rights; Waivers; Amendments. Time shall be of the essence for the performance by
Debtors of any act under this Agreement or in connection with the Secured Indebtedness, but Secured Party’s acceptance of
partial or delinquent payments nor any forbearance, failure or delay by Secured Party in exercising any right, power or remedy
shall not be deemed a waiver of any obligation of Debtors or of any right, power or remedy of Secured Party or preclude any other
or further exercise thereof; and no single or partial exercise of any right, power or remedy shall preclude any other or further
exercise thereof. Secured Party may remedy any default hereunder or in connection with the Secured Indebtedness without waiving
the default so remedied, or waive any default hereunder or in connection with the Secured Indebtedness without waiving any other
default including, without limitation, other occurrences of the same default, nor shall such action by Secured Party waive any
prior or subsequent default. Each Debtor hereby agrees that if Secured Party agrees to a waiver of any provision hereunder, or
an exchange of or release of the Collateral, or the addition to or release of any obligor or other person or entity, any such action
shall not constitute a waiver of any of Secured Party’s other rights or of each Debtor’s obligations hereunder. This
Agreement may be amended only by an instrument in writing executed by Debtors and Secured Party.

 

6.2          Liability
for Deficiency. Neither the acceptance of this Agreement by Secured Party nor any
action taken pursuant hereto shall be construed as relieving any party liable for the Secured Indebtedness or from any other liability
or deficiency thereon. The execution and delivery of this Agreement shall not in any manner affect any other security for the Secured
Indebtedness, nor shall any security taken hereafter as security for the Secured Indebtedness impair or affect this Agreement.

 

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6.3          Governing
Law. THIS AGREEMENT AND THE SECURITY INTEREST AND LIEN GRANTED BY AND UNDER THIS
AGREEMENT WILL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS (EXCEPT TO THE EXTENT THAT THE LAWS
OF ANY OTHER JURISDICTION GOVERN THE PERFECTION AND PRIORITY OF THE SECURITY INTERESTS GRANTED HEREBY) WITHOUT REGARD TO ITS CONFLICTS
OF LAWS PRINCIPLES.

 

6.4          Severability.
If any provision of this Agreement or of any ISDA Document is invalid, illegal or unenforceable in any jurisdiction, the other
provisions hereof or of any other ISDA Documents shall remain in full force and effect in such jurisdiction, and the remaining
provisions hereof shall be liberally construed in favor of the Secured Party in order to effectuate the provisions hereof, and
the invalidity of any provision hereof in any jurisdiction shall not affect the validity, legality or enforceability of any such
provision in any other jurisdiction.

 

6.5          Subrogation.
The Secured Indebtedness shall conclusively be presumed to have been entered into in reliance upon this Agreement. All dealings
between Debtors and Secured Party, whether or not resulting in the creation of the Secured Indebtedness, shall be conclusively
presumed to have been had or consummated in reliance upon this Agreement. Until all of the Secured Indebtedness shall have been
paid in full and the ISDA terminated, Debtors shall have no right to subrogation, and Debtor shall have no right to enforce any
remedy or participate in any Collateral or security whatsoever now or hereafter held by Secured Party.

 

6.6          Successors
and Assigns. All representations and warranties of each Debtor herein, and the covenants
and agreements herein contained by or on behalf of each Debtor, (a) shall bind each Debtor and each Debtor’s legal representatives,
successors, permitted assigns and all persons who become bound as debtor to this Agreement and (b) shall inure to the benefit of
Secured Party, its successors and assigns. Debtors shall not assign or transfer any of its rights or delegate any of its duties
or obligations under this Agreement without the prior written consent of Secured Party.

 

6.7          Continuing
Security Agreement.

 

(a)  This
Agreement shall constitute a continuing security agreement, and all representations and warranties, covenants and agreements shall,
as applicable, apply to all future as well as existing transactions contemplated by the ISDA and the other ISDA Documents. Provisions
of this Agreement, unless by their terms exclusive, shall be in addition to other agreements between the parties.

 

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(b)  Except
as may be applicable pursuant to Section 9.620 of the Code, no action taken or omission to act by Secured Party hereunder, including,
without limitation, any action taken or inaction pursuant to Article V, shall be deemed to be in full satisfaction of the Secured
Indebtedness, and the Secured Indebtedness shall remain in full force and effect, until Secured Party shall have applied payments
(including, without limitation, collections from Collateral) towards the Secured Indebtedness in the full amount then outstanding
or until such subsequent time as is hereinafter provided in this Section 6.7. To the extent that any payments on the Secured
Indebtedness or proceeds of the Collateral are subsequently invalidated, declared to be fraudulent or preferential, set aside or
required to be repaid to a trustee, debtor in possession, receiver or other party under any debtor relief law, common law or in
equity, then to such extent, the Secured Indebtedness so satisfied shall be revived and continue as if such payment or proceeds
had not been received by Secured Party, and Secured Party’s security interests, rights, powers and remedies hereunder shall
continue in full force and effect.

 

(c)  In
the event that the Secured Indebtedness is structured such that there are times when no indebtedness is owing thereunder, this
Agreement shall remain valid and in full force and effect as to all subsequent indebtedness included in the Secured Indebtedness.

 

6.8          Survival
of Agreements. All covenants and agreements of each Debtor herein not fully performed
before the Effective Date, shall survive such date.

 

6.9          Termination.
This Agreement, including the grant of a security interests, liens and other rights hereunder and all of Secured Party’s
rights, powers and remedies in connection therewith, will remain in full force and effect regardless of whether the liability of
any other obligor may have ceased, or irrespective of the validity or enforceability of any other instrument executed in connection
with the Secured Indebtedness, and notwithstanding the reorganization, incapacity or bankruptcy of any obligor, or the reorganization,
or bankruptcy of any Debtor, or any other event or proceeding affecting any Debtor or any other obligor, but this Agreement shall
terminate and be of no further force and effect upon the earlier of (A) the date Secured Party has (i) retransferred and delivered
all Collateral in its possession to Debtors and (ii) executed a written release or termination statement of the liens and security
interests against any remaining Collateral and all rights conveyed hereby, and (B) the date when all Secured Indebtedness has been
indefeasibly paid in full and the ISDA has terminated (other than the indemnity obligations and other continuing obligations under
the ISDA Documents that survive).

 

6.10        Titles
of Articles, Sections and Subsections. All titles or headings to articles, sections,
subsections or other divisions of this Agreement 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 hereto.

 

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6.11        Counterparts;
Effectiveness. This Agreement may be executed by one or more of the parties hereto
in any number of separate counterparts, and all of such counterparts taken together shall be deemed an original and constitute
one and the same instrument and shall be enforceable as of the Effective Date hereof upon the execution of one or more counterparts
by each of the parties hereto. In this regard, each of the parties hereto acknowledges that a counterpart of this Agreement containing
a set of counterpart execution pages reflecting the execution of each party hereto shall be sufficient to reflect the execution
of this Agreement by each party hereto and shall constitute one instrument. Any signature delivered by a party by facsimile or
other form of electronic transmission shall be deemed an original signature hereto; provided that such party shall promptly deliver
an original signature to the other party to replace such signature delivered by electronic transmission. 

 

6.12        Notices.
Any record, notice, demand or document under this Agreement or in connection with this Agreement shall be in writing and shall
or may, as the case may be, be given in the same manner as notice is given in the ISDA.

 

6.13        Drafting
of Agreement. Each party declares that it has contributed to the drafting of this
Agreement or has had the opportunity to have it reviewed by its counsel before signing it and agrees that it has been purposefully
drawn and correctly reflects its understanding of the transaction that it contemplates.

 

6.14        Benefits
of the ISDA. In connection with its execution and acting hereunder, Secured Party
is entitled to all rights, privileges, protections, immunities, benefits and indemnities provided to it under the ISDA.

 

6.15        WAIVER
OF JURY TRIAL AND DAMAGES. (a) As permitted
by applicable law, each party waives their respective rights to a trial before a jury in connection with any claim, dispute, or
controversy arising between the parties hereto with respect to this Agreement, and all such claims, Disputes or controversies
shall be resolved by a judge sitting without a jury. 

 

(b)         EACH
DEBTOR EXPRESSLY AND IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER
IN ANY SUCH ACTION AGAINST SECURED PARTY UNDER THIS AGREEMENT, ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR DAMAGES
OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES.

 

6.16        ENTIRE
AGREEMENT. THIS AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES WITH
RESPECT TO THE MATTERS ADDRESSED HEREIN AND WILL NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

6.17        Conflict.
If any term hereof conflicts with any provision of the Mortgage, the terms of the Mortgage shall control. In the event of a conflict
between the terms of the Mortgage and the ISDA, the terms of the ISDA shall control. Notwithstanding the foregoing, to the extent
any item of Collateral hereunder also constitutes Mortgaged Property (as defined in the Mortgage) and the provisions in this Agreement
describing the Collateral and granting a security interest in the Collateral conflict with such provisions set forth in the Mortgage
regarding Mortgaged Property constituting personal property, the provisions of this Agreement shall control.

 

[Signatures are on the following pages]

 

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IN WITNESS WHEREOF,
this Agreement has been executed by Debtors and Secured Party on and effective as of the Effective Date.

 

	 	DEBTORS:
	 	 
	 	AMERICAN EAGLE ENERGY CORPORATION,
	 	a Nevada corporation
	 	 
	 	By:	 
	 	 	Brad Colby
	 	 	President
	 	 
	 	AMZG, INC.,
	 	a Nevada corporation
	 	 
	 	By: 	 
	 	 	Brad Colby
	 	 	President

 

Signature Page to Security Agreement

  

    	 

    	 

    

 

	 	SECURED PARTY:
	 	 
	 	MACQUARIE BANK LIMITED,
	 	a bank incorporated under the laws of Australia
	 	 
	 	By: 	 
	 	Name:	 
	 	Title:	 
	 	 
	 	By: 	 
	 	Name:	 
	 	Title:	 
	 	 
	 	Macquarie POA Ref: #938 dated 22 November 2012 expiry 30 November 2014, signed in Sydney

 

Signature Page to Security Agreement

  

    	 

    	 

    

 

EXHIBIT
A

 

OIL AND
GAS PROPERTIES OF DEBTORS

 

DIVIDE COUNTY,
NORTH DAKOTA

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