Document:

<PAGE>
                                                                    EXHIBIT 10.3

                           PURCHASE AND SALE AGREEMENT

                                     BETWEEN

                        WILLIAMS PRODUCTION RMT COMPANY,

                                   AS SELLER,

                                       AND

                            BILL BARRETT CORPORATION,

                                    AS BUYER

                      NATRONA AND FREMONT COUNTIES, WYOMING

                              Dated March 27, 2002

                             Effective March 1, 2002

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                Page
                                                                                                                ----
<S>                                                                                                             <C>
ARTICLE 1       PURCHASE AND SALE.........................................................................        1
        1.1     Purchase and Sale.........................................................................        1
        1.2     Assets....................................................................................        1
        1.3     Excluded Properties.......................................................................        3
        1.4     Seller's Reserved Interest................................................................        3
        1.5     Effective Time............................................................................        3
ARTICLE 2       PURCHASE PRICE............................................................................        3
        2.1     Purchase Price............................................................................        3
        2.2     Adjustments to Purchase Price.............................................................        3
        2.3     Allocated Values..........................................................................        5
ARTICLE 3       DUE DILIGENCE INSPECTION..................................................................        5
        3.1     Due Diligence.............................................................................        5
        3.2     Records...................................................................................        5
        3.3     No Representation or Warranty.............................................................        5
        3.4     Access to Properties......................................................................        6
ARTICLE 4       TITLE MATTERS.............................................................................        6
        4.1     Defensible Title..........................................................................        6
        4.2     Permitted Encumbrances....................................................................        6
        4.3     Title Defect..............................................................................        7
        4.4     Notice of Title Defects...................................................................        7
        4.5     Defect Adjustments and Thresholds.........................................................        7
        4.6     Title Dispute Resolution..................................................................        8
        4.7     Depletion and Depreciation of Personal Property...........................................        8
        4.8     Consents..................................................................................        8
        4.9     Preferential Purchase Rights..............................................................        9
        4.10    Casualty Loss.............................................................................        9
ARTICLE 5       ENVIRONMENTAL MATTERS.....................................................................       10
        5.1     Definitions...............................................................................       10
        5.2     Spills and NORM...........................................................................       10
        5.3     Environmental Assessment..................................................................       10
        5.4     Adjustments for Environmental Defects.....................................................       11
</TABLE>

<PAGE>

                                TABLE OF CONTENTS
                                  (Continued)
<TABLE>
<CAPTION>
                                                                                                                Page
                                                                                                                ----
<S>                                                                                                             <C>
        5.5     Environmental Dispute Resolution..........................................................       12
        5.6     "As Is, Where Is" Purchase................................................................       12
        5.7     Disposal of Materials, Substances and Wastes..............................................       12
        5.8     Buyer's Indemnity.........................................................................       12
ARTICLE 6       SELLER'S REPRESENTATIONS AND WARRANTIES...................................................       13
        6.1     Existence.................................................................................       13
        6.2     Power and Authority.......................................................................       13
        6.3     Authorization.............................................................................       13
        6.4     Execution and Delivery....................................................................       13
        6.5     Liabilities for Brokers' Fees.............................................................       14
        6.6     Litigation................................................................................       14
        6.7     Liens.....................................................................................       14
        6.8     No Bankruptcy.............................................................................       14
        6.9     Taxes.....................................................................................       14
        6.10    Agreements................................................................................       14
        6.11    Wells.....................................................................................       14
        6.12    Leases....................................................................................       14
ARTICLE 7       BUYER'S REPRESENTATIONS AND WARRANTIES....................................................       14
        7.1     Existence.................................................................................       14
        7.2     Power and Authority.......................................................................       15
        7.3     Authorization.............................................................................       15
        7.4     Execution and Delivery....................................................................       15
        7.5     Liabilities for Brokers' Fees.............................................................       15
        7.6     Litigation................................................................................       15
        7.7     Independent Evaluation....................................................................       15
        7.8     Qualification.............................................................................       15
ARTICLE 8       COVENANTS AND AGREEMENTS..................................................................       15
        8.1     Covenants and Agreements..................................................................       15
ARTICLE 9       CONDITIONS TO CLOSING.....................................................................       17
        9.1     Seller's Conditions.......................................................................       17
        9.2     Buyer's Conditions........................................................................       18
</TABLE>

                                      -ii-
<PAGE>

                                TABLE OF CONTENTS
                                  (Continued)
<TABLE>
<CAPTION>
                                                                                                                Page
                                                                                                                ----
<S>                                                                                                             <C>
ARTICLE 10      RIGHT OF TERMINATION AND ABANDONMENT......................................................       18
        10.1    Termination...............................................................................       18
        10.2    Liabilities Upon Termination..............................................................       18
ARTICLE 11      CLOSING...................................................................................       19
        11.1    Date of Closing...........................................................................       19
        11.2    Closing Obligations.......................................................................       19
ARTICLE 12      POST-CLOSING OBLIGATIONS..................................................................       20
        12.1    Post-Closing Adjustments..................................................................       20
        12.2    Dispute Resolution........................................................................       20
        12.3    Records...................................................................................       20
        12.4    Transfer Taxes and Recording Fees.........................................................       21
        12.5    Rental and Royalty Administration.........................................................       21
        12.6    Lease Maintenance Costs for Jointly Owned Leases..........................................       21
        12.7    Further Assurances........................................................................       21
        12.8    Seller's Right of First Refusal to Market Gas.............................................       22
ARTICLE 13      TAXES.....................................................................................       22
        13.1    Apportionment of Ad Valorem and Property Taxes............................................       22
        13.2    Transfer Taxes............................................................................       22
        13.3    Other Taxes...............................................................................       22
        13.4    Tax Reports and Returns...................................................................       22
ARTICLE 14      ASSUMPTION AND RETENTION OF OBLIGATIONS; INDEMNIFICATION..................................       23
        14.1    Buyer's Assumption of Liabilities and Obligations.........................................       23
        14.2    Seller's Retention of Liabilities and Obligations.........................................       23
        14.3    Buyer's Plugging and Abandonment Obligations..............................................       23
        14.4    Indemnification...........................................................................       24
        14.5    Procedure.................................................................................       24
        14.6    No Insurance; Subrogation.................................................................       25
        14.7    Reservation as to Non-Parties.............................................................       26
ARTICLE 15      MISCELLANEOUS.............................................................................       26
        15.1    Exhibits..................................................................................       26
</TABLE>

                                     -iii-
<PAGE>

                                TABLE OF CONTENTS
                                  (Continued)
<TABLE>
<CAPTION>
                                                                                                                Page
                                                                                                                ----
<S>                                                                                                             <C>
        15.2    Expenses..................................................................................       26
        15.3    Notices...................................................................................       26
        15.4    Amendments................................................................................       27
        15.5    Assignment................................................................................       27
        15.6    Confidentiality...........................................................................       27
        15.7    Press Releases............................................................................       27
        15.8    Headings..................................................................................       27
        15.9    Counterparts..............................................................................       27
        15.10   References................................................................................       27
        15.11   Governing Law.............................................................................       27
        15.12   Binding Effect............................................................................       28
        15.13   Survival..................................................................................       28
        15.14   No Third-Party Beneficiaries..............................................................       28
        15.15   Limitation on Damages.....................................................................       28
        15.16   Severability..............................................................................       28
</TABLE>

                                      -iv-
<PAGE>

                                    EXHIBITS

<TABLE>
<CAPTION>
                                                                                        Section
Exhibit                         Description                                          Where Defined
-------                         -----------                                          -------------
<S>              <C>                                                                 <C>
  A-1            Leases, Fee Interests and Lands                                         1.2.a.
  A-2            Wells and Facilities                                                1.2.b., 1.2.e.
  A-3            Rights-of-Way and Surface Leases                                        1.2.e.
  A-4            Seismic Option Contracts                                                1.2.f.
  A-5            Geophysical Data                                                        1.2.g.
  A-6            Third Party Gathering Contracts                                         1.2.i.
   B             Allocated Values                                                         2.3.
   C             Material Agreements                                                 1.2.d., 6.10.
   D             Form of Assignment, Bill of Sale and Conveyance                        11.2.a.
   E             Form of Assignment and Assumption Agreement                            11.2.a.
   F             Form of Seismic License Agreement                                       1.2.g.
   G             Seller's Officer's Certificate                                         11.2.e.
   H             Buyer's Officer's Certificate                                          11.2.f.
</TABLE>

                                      -v-
<PAGE>

                           PURCHASE AND SALE AGREEMENT

      This PURCHASE AND SALE AGREEMENT ("AGREEMENT"), dated March 27, 2002, is
by and between Williams Production RMT Company, a Delaware corporation, whose
address is 1515 Arapahoe Street, Tower 3, Suite 1000, Denver, Colorado 80202
("SELLER") and Bill Barrett Corporation, a Maryland corporation, whose address
is 1099 18th Street, Suite 2300, Denver, Colorado 80202 ("BUYER").

                                    RECITALS

      A.    Seller owns and desires to sell certain real and personal property
interests located in Natrona and Fremont Counties, Wyoming, as more fully
described in Section 1.2 below (the "ASSETS").

      B.    Buyer desires to purchase the Assets upon the terms and conditions
set forth in this Agreement.

                                    AGREEMENT

      In consideration of the mutual promises contained herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Seller and Buyer agree as follows:

                                    ARTICLE 1
                                PURCHASE AND SALE

      1.1   PURCHASE AND SALE. Seller agrees to sell and convey to Buyer, and
Buyer agrees to purchase and receive from Seller, all of Seller's right, title
and interest in the Assets, pursuant to the terms and conditions of this
Agreement.

      1.2   ASSETS. The "ASSETS" are all of Seller's right, title, and interest
in and to the following real and personal property interests located in Natrona
and Fremont Counties, Wyoming:

            a.    The oil and gas leases (including working interests, royalty
interests, overriding royalty interests, net profits interests and all other
leasehold interests whether described or not) described on EXHIBIT A-1 (the
"LEASES"), and the fee mineral interests described on EXHIBIT A-1 (the "FEE
INTERESTS"), insofar and only insofar as the Leases and Fee Interests cover the
lands described on EXHIBIT A-1 (the "LANDS"); the Lands described on EXHIBIT
A-1, whether or not Seller's interest in the Lands is correctly or sufficiently
described in EXHIBIT A-1; the oil, gas and all other hydrocarbons (including,
but not limited to, coalbed methane) and products ("HYDROCARBONS"), in, on or
under or that may be produced from the Lands.

            b.    The oil and gas wells located on the Leases, Fee Interests and
Lands, or lands pooled or unitized therewith, including without limitation, the
oil and gas wells specifically described on EXHIBIT A-2, whether producing or
non-producing, all injection and disposal wells
<PAGE>

on the Leases, Fee Interests and Lands (the "WELLS"), and all personal property
and equipment associated with the Wells as of the Effective Time.

            c.    The rights, to the extent transferable, in and to all existing
and effective unitization, pooling and communitization agreements, declarations
and orders, and the properties covered and the units created thereby, to the
extent that they relate to or affect any of the interests described in Sections
1.2.a. and 1.2.b. or the post-Effective Time production of Hydrocarbons from the
Leases, Fee Interests and Lands.

            d.    The rights, to the extent transferable, in and to Hydrocarbon
sales, purchase, gathering and processing contracts, operating agreements,
balancing agreements, joint venture agreements, partnership agreements, farmout
agreements and other contracts, agreements and instruments relating to the
interests described in Sections 1.2.a., 1.2.b. and 1.2.c., including without
limitation the Material Agreements described on EXHIBIT C, only insofar as they
relate to the Leases, Fee Interests and Lands, excluding any insurance contracts
and all firm transportation contracts.

            e.    All of the personal property, fixtures, improvements, permits,
licenses, approvals, servitudes, rights-of-way, easements, surface leases
(including without limitation the rights-of-way, easements and surface leases
described on EXHIBIT A-3), and other surface rights, tanks, boilers, buildings,
improvements, injection facilities, saltwater disposal facilities, compression
facilities, gathering systems, other appurtenances and facilities (including
without limitation the facilities described on EXHIBIT A-2) located on or used
as of the Closing Date in connection with or otherwise related to the
exploration for or production, gathering, treatment, processing, storing, sale
or disposal of Hydrocarbons or water produced from the properties and interests
described in Sections 1.2.a through 1.2.d.

            f.    The seismic option contracts described on EXHIBIT A-4 (the
"OPTION CONTRACTS"), insofar and only insofar as the Option Contracts cover the
lands described on EXHIBIT A-4 (the "OPTION LANDS").

            g.    Licenses, substantially in the form of EXHIBIT F, of the
geophysical and seismic data described on EXHIBIT A-5 (the "GEOPHYSICAL DATA");
and copies, to the extent contractually transferable, obtained at Buyer's sole
expense (including licensing fees for software), of all interpretative geologic
and geophysical data which relates to the Lands, including an electronic copy of
Seller's engineering and geologic database.

            h.    The files, records, data and information relating to the items
described in Sections 1.2.a. through 1.2.g. maintained by Seller (the
"RECORDS"), including without limitation, accounting files, lease files, land
files, well files, gas, oil and other hydrocarbon sales contract files, gas
gathering and processing files, division order files, abstracts, and title
opinions; and, to the extent reasonable available to Seller and contractually
and electronically transferable to Buyer, vendor histories by well for the year
2001 for those Assets operated by Seller.

            i.    The gas gathering and processing contracts (the "THIRD PARTY
GATHERING CONTRACTS") pursuant to which Williams gathers and processes the gas
of third parties produced

                                      -2-
<PAGE>

in the fields in which the Assets described in Sections 1.2.a. and 1.2.b. are
located, including without limitation the Third Party Gathering Contracts
described on EXHIBIT A-6.

      1.3   EXCLUDED PROPERTIES. All rights of Seller to earn an interest in the
Option Lands by drilling or other operations conducted on lands which are not
described on Exhibit A-1 and which are retained by Seller (the "RETAINED LANDS")
pursuant to the Option Contracts are excepted and excluded from this Agreement.

      1.4   SELLER'S RESERVED INTEREST. Seller shall reserve an overriding
royalty in oil, gas and other hydrocarbons, produced, saved and marketed from
the Leases and Lands located in the Boone Dome North, Buffalo Jump, Cooper
Reservoir, Coyote Creek, East Madden Area, Lance Gardens, Magna, Red Creek, Sand
Draw (Boone Dome S), Sioux Creek, Stone Cabin (Wind River Basin), Wallace Creek
CBM Prospects identified on EXHIBIT A-1, in an amount equal to the difference,
if any, between 18.75% and the amount of the total royalty and overriding
royalty burden on the Leases and Lands existing of record as of the Effective
Time, subject to proportionate reduction to the mineral interest covered by the
Leases and Seller's working interest in the Leases. Seller's overriding royalty
shall be reserved at the wellhead without deduction for post-production costs of
any kind, except taxes and transportation. There shall be no deduction for
post-production costs of separating, heater treating, dehydration, treating,
compression and gathering of Hydrocarbons.

      1.5   EFFECTIVE TIME. The purchase and sale of the Assets shall be
effective as of March 1, 2002 at 7:00 a.m., Mountain Time (the "EFFECTIVE
TIME").

                                   ARTICLE 2
                                 PURCHASE PRICE

      2.1   PURCHASE PRICE. The purchase price for the Assets shall be
$73,000,000.00 (the "PURCHASE PRICE"). At Closing, Buyer shall pay Seller the
Purchase Price as adjusted pursuant to Section 2.2 below by wire transfer of
immediately available funds.

      2.2   ADJUSTMENTS TO PURCHASE PRICE. The Purchase Price shall be adjusted
according to this Section without duplication. For all adjustments known as of
Closing, the Purchase Price shall be adjusted at Closing pursuant to a
"PRELIMINARY SETTLEMENT STATEMENT" approved by Seller and Buyer on or before
Closing. A draft of the Preliminary Settlement Statement will be prepared by
Seller. The Preliminary Settlement Statement shall set forth the Purchase Price
as adjusted as provided in this section using the best information available at
the Closing Date which amount shall be paid at Closing and is referred to as the
"CLOSING AMOUNT." The Closing Amount shall be paid at Closing by wire transfer
of immediately available funds. After Closing, final adjustments to the Purchase
Price shall be made pursuant to the Final Settlement Statement to be delivered
pursuant to Section 12.1.

         For the purposes of this Agreement, the term "PROPERTY EXPENSES" shall
mean all capital expenses, joint interest billings, lease operating expenses,
lease rental and maintenance costs, royalties, overriding royalties, Taxes (as
defined and apportioned as of the Effective Time pursuant to Article 13),
drilling expenses, workover expenses, geological, geophysical and any other
exploration or development expenditures chargeable under applicable operating

                                      -3-
<PAGE>

agreements or other agreements consistent with the standards established by the
Council of Petroleum Accountant Societies of North America that are attributable
to the maintenance and operation of the Assets during the period in question.

            a.    Upward Adjustments. The Purchase Price shall be adjusted
upward by the following:

                  (i)   The amount of all Property Expenses attributable to the
      Assets after the Effective Time and paid by Seller;

                  (ii)  The proceeds of production attributable to the Assets
      occurring before the Effective Time and received by Buyer, net of
      royalties and taxes measured by production, plus an amount equal to
      production from the Assets that occurred before the Effective Time but,
      because such production is in pipelines or in processing, had not been
      sold as of the Effective Time, times the price for which production from
      the Assets was sold immediately prior to the Effective Time; and

                  (iii) To the extent that there are any pipeline imbalances, if
      the net of such imbalances is an overdelivery imbalance (that is, at the
      Effective Time, Seller has delivered more gas to the pipeline than the
      pipeline has redelivered for Seller), the Purchase Price shall be adjusted
      upward by the first-of-the month price of spot gas delivered to pipelines
      for Colorado Interstate Gas Company (Rocky Mountains) as reported in
      Inside F.E.R.C.'s Gas Market Report for the month in which the Effective
      Time occurs times the net overdelivery imbalance in MMbtus. In the event
      such publication shall cease to be published, the parties shall select a
      comparable publication.

                  (iv)  An amount equal to the value, based upon the average
      price received for the month of March, 2002, of Seller's share of any
      condensate in the tanks produced from or credited to the Leases, Fee
      Interests and Lands prior to the Effective Time based upon the quantities
      in condensate tanks as measured by and reflected in Seller's records.

                  (v)   Post-Effective Time Lease rentals and shut-in payments
      made by Seller pursuant to Section 12.5.

            b.    Downward Adjustments. The Purchase Price shall be adjusted
downward by the following:

                  (i)   An amount equal to the sum of all Title Defect
      Adjustments (as defined in Section 4.5.c.) if the Title Threshold Amount
      as calculated pursuant to Section 4.5.d. has been exceeded;

                  (ii)  An amount equal to the sum of all Environmental Defect
      Adjustments (as defined in Section 5.4.b(i)) if the Environmental
      Threshold Amount as calculated pursuant to Section 5.4.b(ii) has been
      exceeded; and

                                      -4-
<PAGE>

                  (iii) The proceeds of production attributable to the Assets
      occurring on or after the Effective Time and received by Seller, net of
      royalties and taxes measured by production.

                  (iv)  To the extent that there are any pipeline imbalances, if
      the net of such imbalances is an underdelivery imbalance (that is, at the
      Effective Time, Seller has delivered less gas to the pipeline than the
      pipeline has redelivered for Seller), the Purchase Price shall be adjusted
      downward by the first-of-the-month price of spot gas delivered to
      pipelines for Colorado Interstate Gas Company (Rocky Mountains) as
      reported in Inside F.E.R.C.'s Gas Market Report for the month in which the
      Effective Time occurs times the net underdelivery imbalance in MMbtus. In
      the event such publication shall cease to be published, the parties shall
      select a comparable publication.

                  (v)   The amount of all Pre-Effective Time Property Expenses
      attributable to the Assets and paid by Buyer, subject to Article 13 and
      Section 14.2.

            c.    Well Imbalance Adjustments. Seller and Buyer agree that the
Purchase Price will be adjusted downward or upward, as appropriate, by an amount
equal to the well imbalances existing as of the Effective Time multiplied by the
average value on an MMbtu basis at the wellhead for sales of production during
the month in which the Effective Time occurs.

      2.3   ALLOCATED VALUES. Seller and Buyer agree to allocate the Purchase
Price among the Assets as set forth on EXHIBIT B.

                                   ARTICLE 3
                            DUE DILIGENCE INSPECTION

      3.1   DUE DILIGENCE. Subject to Subsection 3.3, Seller shall make the
Records and the Assets available to Buyer and its representatives for inspection
and review to permit Buyer to perform its due diligence review ("DUE DILIGENCE
REVIEW") as hereinafter provided. Buyer shall be entitled to conduct its Due
Diligence Review until 5:00 p.m., Mountain Time, on March 27, 2002 (the "DUE
DILIGENCE PERIOD").

      3.2   RECORDS. The Records will be made available to Buyer at the offices
of Seller during Seller's normal business hours or as otherwise reasonably
requested by Buyer to complete its Due Diligence Review. Subject to the consent
and cooperation of third parties, Seller will assist Buyer in Buyer's efforts to
obtain, at Buyer's expense, such additional information from such parties as
Buyer may reasonably desire. Buyer may inspect the Records and other Assets and
such additional information only to the extent that it may do so without
violating any obligation of confidence or contractual commitment of Seller to a
third party. Seller shall use reasonable efforts to obtain the necessary
consents to allow Buyer's examination of any confidential information that is
material to this transaction.

      3.3   NO REPRESENTATION OR WARRANTY. Except for the representations and
warranties contained in this Agreement, Seller makes no warranty or
representation of any kind as to the Records or any information contained
therein. Buyer agrees that any conclusions drawn from the Records shall be the
result of its own independent review and judgment.

                                      -5-
<PAGE>

      3.4   ACCESS TO PROPERTIES. Seller hereby consents to Buyer conducting,
prior to 5:00 p.m., Mountain Time, on March 27, 2002 and upon advance notice to
Seller, at Buyer's sole risk and expense, on-site inspections and an
environmental assessment of the Assets; provided that Buyer shall not conduct
any sampling activities without prior notice and consent of Seller, which
consent shall not be unreasonably withheld. In connection with any such on-site
inspections or environmental assessment, Buyer agrees not to interfere with the
normal operation of the Assets and agrees to comply with all requirements and
safety policies of the operator. If Buyer or its agents prepares an
environmental assessment of any property, Buyer will furnish copies thereof to
Seller. The parties shall execute a "common undertaking" letter regarding the
confidentiality of environmental assessments where appropriate. In connection
with the granting of such access, Buyer represents that it is adequately insured
and, except to the extent caused by Seller's gross negligence or willful
misconduct, waives, releases and agrees to indemnify Seller and Seller's
representatives against all claims for injury to, or death of, persons or for
damage to property arising in any way from the access afforded to Buyer
hereunder or the activities of Buyer. This waiver, release and indemnity by
Buyer shall survive termination of this Agreement.

                                   ARTICLE 4
                                  TITLE MATTERS

      4.1   DEFENSIBLE TITLE. The term "DEFENSIBLE TITLE" means such title of
Seller in and to the Assets that, subject to and except for the Permitted
Encumbrances: (i) entitles Seller to receive not less than the net revenue
interest described on EXHIBIT B ("NRI"); (ii) obligates Seller to bear costs and
expenses relating to the Assets in an amount not greater than the working
interest described on EXHIBIT B ("WI"); and (iii) is free and clear of material
liens, taxes, encumbrances, mortgages, claims and production payments and any
defects that would create a material impairment of use and enjoyment of or loss
of interest in the affected Asset.

      4.2   Permitted Encumbrances. The term "Permitted Encumbrances" shall
mean:

            a.    Lessors' royalties, overriding royalties net profits
interests, production payments, reversionary interests and similar burdens if
the net cumulative effect of such burdens does not operate to reduce the NRIs
below those set forth on EXHIBIT B;

            b.    Any required third-party consents to assignment of Leases and
contracts, and preferential purchase rights which are handled exclusively under
Sections 4.8 and 4.9 below;

            c.    Liens for taxes or assessments not yet due or not yet
delinquent or, if delinquent, that are being contested in good faith in the
normal course of business;

            d.    All rights to consent by, required notices to, filings with,
or other actions by federal, state, local governmental entities or tribal
entities in connection with the sale or conveyance of the Assets if the same are
customarily obtained subsequent to such sale or conveyance;

            e.    Rights of reassignment, to the extent any exist as of the date
of this Agreement, upon the surrender or expiration of any lease;

                                      -6-
<PAGE>

            f.    Easements, rights-of-way, servitudes, permits, surface leases
and other rights with respect to surface operations, on, over or in respect of
any of the properties or any restriction on access thereto and that do not
materially interfere with the operation of the affected property;

            g.    Materialmen's, mechanics', repairmen's, employees',
contractors', operators' or other similar liens or charges arising in the
ordinary course of business incidental to construction, maintenance or operation
of the Assets, (i) if they have not been filed pursuant to law and the time for
filing them has expired, (ii) if filed, they have not yet become due and payable
or payment is being withheld as provided by law, or (iii) if their validity is
being contested in good faith by appropriate action;

            h.    Rights reserved to or vested in any municipality or
governmental, statutory or public authority to control or regulate any of the
Assets in any manner; and all applicable laws, rules, regulations and orders of
general applicability in the area; and

            i.    Liens arising under operating agreements, unitization and
pooling agreements and production sales contracts securing amounts not yet due
or, if due, being contested in good faith in the ordinary course of business.

      4.3   TITLE DEFECT. The term "TITLE DEFECT" means any encumbrance,
encroachment, irregularity, defect in or objection to real property title,
excluding Permitted Encumbrances, that alone or in combination with other
defects:

            a.    Renders title to any portion of the Assets less than
Defensible Title;

            b.    Reduces, impairs or prevents Buyer from receiving payment from
the purchasers of production from any portion of the Assets;

            c.    Restricts or extinguishes Buyer's right to use any portion of
the Assets as owner, lessee, licensee or permittee, as applicable.

      4.4   NOTICE OF TITLE DEFECTS. Buyer shall deliver to Seller a written
"NOTICE OF TITLE DEFECTS" on or before March 27, 2002, 5:00 p.m., Mountain Time.
The Notice of Title Defects shall (i) describe the Title Defect, (ii) describe
the basis of the Title Defect and (iii) describe Buyer's good faith estimate of
the reduction in the Assets' Allocated Value caused by the Title Defect ("DEFECT
VALUE") and associated calculations and documentation. Buyer will be deemed to
have conclusively waived any Title Defect about which it fails to notify Seller
in writing prior to March 27, 2002 at 5:00 p.m., Mountain Time.

      4.5   DEFECT ADJUSTMENTS AND THRESHOLDS. The parties shall proceed as
follows:

            a.    Seller shall have the option of attempting to cure such Title
Defects to the reasonable satisfaction of Buyer on or before thirty (30) days
after the Closing Date (the "CURE PERIOD"), which option shall be communicated
to Buyer no later than 5:00 p.m., Mountain Time, on March 28, 2002. If Seller is
unable to cure such Title Defects during the Cure Period, any necessary Purchase
Price Adjustments shall be made in the Final Settlement Statement.

                                      -7-
<PAGE>

            b.    Seller may contest the Defect Value by so notifying Buyer. If
Buyer and Seller are unable to agree on the Defect Value (agreement shall result
in the "ACTUAL DEFECT VALUE") within fifteen (15) days of Seller's notice
contesting the Defect Value, then Seller or Buyer may submit such Defect Value
dispute to a mutually agreeable, duly licensed, petroleum engineering,
geological, accounting or law firm, in accordance with the expertise required to
determine the Actual Defect Value, which firm shall determine the Actual Defect
Value and such determination shall be final and binding upon Seller and Buyer.
The fees charged by said firm for making a determination under this Section
4.5.b. shall be paid one-half by Buyer and one-half by Seller.

            c.    If Seller does not elect to cure or is unable to cure such
Title Defects to the reasonable satisfaction of Buyer on or before thirty (30)
days after the Closing Date or such later date as is mutually agreed to by the
parties, either Seller or Buyer shall have the option to exclude such Asset from
this Agreement (the "EXCLUDED ASSET"). If Seller or Buyer elects to exclude such
Asset, the Purchase Price shall be adjusted downward by an amount equal to the
Allocated Value of the Excluded Asset. If neither Seller nor Buyer elect to
exclude such Asset from this Agreement, Buyer shall accept assignment of the
Asset affected by such Title Defect, and the Purchase Price shall be adjusted
downward by the Actual Defect Value ("TITLE DEFECT ADJUSTMENT").

            d.    There shall be no reduction to the Purchase Price under
Section 4.5.c unless Seller's share of a proposed reduction as to any single
incident exceeds $20,000.00. In addition, if Seller's share of the proposed
reduction under Section 4.5.c as to any single incident exceeds $20,000.00,
there shall be no reduction to the Purchase Price until such time as the total
of these excess amounts (over $20,000.00) exceeds $500,000.00. (the "TITLE
THRESHOLD AMOUNT") but, in such event, the Purchase Price reduction shall
exclude the Title Threshold Amount. For the purposes of application of the
foregoing thresholds, "single incident" shall be applicable on a well-by-well or
property-by-property basis.

      4.6   TITLE DISPUTE RESOLUTION. Seller and Buyer agree to resolve disputes
concerning the following matters pursuant to this Section: (i) the existence and
scope of a Title Defect and (ii) the adequacy of Seller's Title Defect curative
materials. The parties agree to attempt to initially resolve all disputes
through good faith negotiations. If the parties cannot resolve disputes
regarding items (i) or (ii) on or before 45 days after Closing, the disputed
matters will be finally determined by binding arbitration pursuant to Section
14.5.d.

      4.7   DEPLETION AND DEPRECIATION OF PERSONAL PROPERTY. Buyer shall assume
all risk of loss with respect to, and any change in the condition of, the Assets
from the Effective Time until Closing for production of oil, gas and/or other
hydrocarbons through depletion (including the watering-out of any well,
collapsed casing or sand infiltration of any well) and the depreciation of
personal property due to ordinary wear and tear.

      4.8   CONSENTS. Seller shall use reasonable efforts to obtain all required
consents. If Buyer discovers other affected properties during the course of
Buyer's due diligence activities, Buyer shall notify Seller immediately and
Seller shall use its commercially reasonable efforts to obtain such consents
prior to Closing. Except for consents and approvals which are customarily
obtained post-Closing and those consents which would not invalidate the
conveyance of the

                                      -8-
<PAGE>

Assets, if a necessary consent to assign any Asset has not been obtained as of
the Closing, then (i) the portion of the Assets for which such consent has not
been obtained shall be included with the Assets at the Closing, and the Purchase
Price for that portion of the Assets shall be included in the Preliminary
Settlement Statement, (ii) Seller shall employ reasonable efforts to obtain such
consent as promptly as possible following Closing, and (iii) if such consent has
not been obtained as of the Final Settlement Date, the Allocated Value of that
portion of the Assets shall be a downward adjustment to the Purchase Price on
the Final Settlement Statement and Buyer shall reassign such Asset to Seller,
effective as of the Effective Time. Buyer shall reasonably cooperate with Seller
in obtaining any required consent including providing assurances of reasonable
financial conditions.

      4.9   PREFERENTIAL PURCHASE RIGHTS. Seller does not believe that any
preferential purchase rights are applicable to the transaction contemplated by
this Agreement. Nonetheless, if Seller becomes aware of any facts to the
contrary, then Seller shall send notice of this Agreement prior to Closing to
all persons holding such rights offering to sell to each such person that
portion of the Assets for which such a preferential right is held for an amount
equal to the Allocated Values of such Assets and subject to all other terms and
conditions of this Agreement. If, prior to Closing, any of such persons
asserting a preferential purchase right notifies Seller that it intends to
consummate the purchase of that portion of the Assets to which it holds a
preferential purchase right pursuant to the terms and conditions of such notice
and this Agreement, then such Assets shall be excluded from the Assets
identified in this Agreement and the Purchase Price shall be reduced by the
Allocated Values of such Assets; provided, however, that if the holder of such
preferential right fails to consummate the purchase of such Assets prior to the
Closing Date, then Seller shall promptly so notify Buyer, and Seller shall sell
to Buyer, and Buyer shall purchase from Seller, the Assets to which the
preferential purchase right was asserted for the Allocated Values of such
Assets. All Assets for which a preferential purchase right has not been asserted
prior to Closing, or with respect to which closing does not occur on or before
the Closing Date following the assertion of a preferential purchase right, shall
be sold to Buyer at Closing pursuant to the provisions of this Agreement. If one
or more of the holders of any preferential purchase rights notifies Seller
subsequent to Closing that it intends to assert its preferential purchase right,
Seller shall give notice thereof to Buyer, whereupon Buyer shall perform all
valid preferential purchase right obligations of Seller to such holders and
Buyer shall be entitled to receive (and Seller hereby assigns to Buyer all of
Seller's rights to) all proceeds received from such holders in connection with
such preferential purchase rights.

      4.10  CASUALTY LOSS. Prior to Closing, if a portion of the Assets is
destroyed by fire or other casualty or if a portion of the Assets is taken or
threatened to be taken in condemnation or under the right of eminent domain
("CASUALTY LOSS"), Buyer shall not be obligated to purchase such Asset. If Buyer
declines to purchase such Asset, the Purchase Price shall be adjusted as agreed
to by Buyer and Seller. If Buyer elects to purchase such Asset, the Purchase
Price shall be reduced by the estimated cost to repair such Asset (with
equipment of similar utility) as agreed to by Buyer and Seller (the reduction
being the "NET CASUALTY LOSS"). The Net Casualty Loss shall not, however, exceed
the Allocated Value of such Asset. Seller, at its sole option, may elect to cure
such Casualty Loss. If Seller elects to cure such Casualty Loss, Seller may
replace any personal property that is the subject of a Casualty Loss with
equipment of similar grade and utility, or replace any real property with real
property of similar nature and kind if

                                      -9-

<PAGE>

such property is acceptable to Buyer in its sole discretion. If Seller elects to
cure the Casualty Loss to the satisfaction of Buyer, there shall be no
adjustment to the Purchase Price.

                                   ARTICLE 5
                              ENVIRONMENTAL MATTERS

      5.1   DEFINITIONS. For the purposes of the Agreement, the following terms
shall have the following meanings:

      "ENVIRONMENTAL DEFECT" means a condition in, on or under the Assets
(including, without limitation, air, land, soil, surface and subsurface strata,
surface water, ground water, or sediments) that causes any portion of the Assets
to be in material violation of an Environmental Law or a condition that can
reasonably be expected to give rise to costs or liability under applicable
Environmental Laws. NORM (defined in Section 5.2) contaminated pipe, tubing and
wellheads shall not be an Environmental Defect.

      "ENVIRONMENTAL LAW" means any statute, rule, regulation, code or order,
issued by any federal, state, or local governmental entity in effect on or
before the Effective Time (collectively, "LAWS") relating to the protection of
the environment or the release or disposal of waste materials.

      "REMEDIATION" means actions taken to correct an Environmental Defect and
"REMEDIATION COSTS" means the actual, or good faith estimates of the costs to
conduct such remediation.

      5.2   SPILLS AND NORM. Buyer acknowledges that in the past there may have
been spills of wastes, crude oil, produced water, or other materials (including,
without limitation, any toxic, hazardous or extremely hazardous substances) onto
the Lands. In addition, some production equipment may contain asbestos and/or
Naturally Occurring Radioactive Material (hereinafter referred to as "NORM"). In
this regard Buyer expressly understands that NORM may affix or attach itself to
the inside of wells, materials and equipment as scale or in other forms, that
said wells, materials and equipment located on the Lands or included in the
Assets described herein may contain NORM and that NORM-containing material may
have been buried or otherwise disposed of on the Lands. Buyer also expressly
understands that special procedures may be required for the remediation,
removal, transportation and disposal of asbestos or NORM from the Assets and
Lands where such material may be found and that Buyer assumes all liability for
or in connection with the assessment, containment, removal, remediation,
transportation and disposal of any such materials, in accordance with all past,
present or future applicable laws, rules, regulations and other requirements of
any governmental or judicial entities having jurisdiction and also with the
terms and conditions of all applicable leases and other contracts.

      5.3   ENVIRONMENTAL ASSESSMENT. Prior to Closing, Buyer may conduct an
on-site inspection, environmental assessment and compliance audit of the Assets
(an "ENVIRONMENTAL ASSESSMENT") at Buyer's cost and expense. Seller shall
provide Buyer with access to the Assets and to all information in Seller's
possession or control pertaining to the environmental condition of the Assets,
including, but not limited to, status or any environmental reports, permits,
records

                                      -10-

<PAGE>

and assessments in Seller's possession or control, and shall make available to
Buyer all past or present personnel who would reasonably be expected to have
knowledge or information regarding the environmental status or condition of the
Assets. Buyer shall provide Seller prior written notice of any environmental
inspections and tests, including sampling activities, and Buyer shall give
Seller the opportunity to participate in all such inspections and tests. Buyer
shall provide Seller, at no cost to Seller, all reports of environmental
inspections and tests, provided that all such reports shall be deemed to be
confidential between the parties and subject to the confidentiality provisions
of Section 8.1.h of this Agreement. Buyer agrees to release, indemnify, defend,
and hold harmless Seller against all Losses (as defined in Section 14.4) arising
from or related to the activities of Buyer, its employees, agents, contractors
and other representatives in connection with Buyer's Environmental Assessment
regardless of the negligence or strict liability of Seller.

      5.4   ADJUSTMENTS FOR ENVIRONMENTAL DEFECTS.

            a.    Notice of Environmental Defects. Buyer shall provide Seller
with written notice of any Environmental Defect which Buyer's Environmental
Assessment reveals and will provide evidence thereof. Such notice and evidence
shall be given on or before March 27, 2002, 5:00 p.m., Mountain Time.

            b.    Defect Adjustments. The parties shall proceed as follows:

                  (i)   Upon receipt of a notice of Environmental Defect, Seller
      may, at its sole election on or before thirty (30) days after the Closing
      Date, either: (x) agree with Buyer on an adjustment to the Purchase Price,
      which adjustment shall reflect the cost to remediate such Environmental
      Defect ("ENVIRONMENTAL DEFECT ADJUSTMENT"); or (y) in the event of the
      failure of the parties to come to agreement under (x), remove the affected
      Asset(s) from the Assets being conveyed and adjust the Purchase Price
      accordingly. In no event will Seller have any obligation to remediate any
      Environmental Defect unless Seller expressly agrees in writing to do so.

                  (ii)  There shall be no reduction to the Purchase Price under
      Section 5.4.b(i) unless Seller's share of a proposed reduction as to any
      single incident exceeds $50,000.00. In addition, if Seller's share of the
      proposed reduction under Section 5.4.b(i) as to any single incident
      exceeds $50,000.00, there shall be no reduction to the Purchase Price
      until such time as the total of these excess amounts (over $50,000.00)
      exceeds $1,000,000.00 (the "ENVIRONMENTAL THRESHOLD AMOUNT") but, in such
      event, the Purchase Price reduction shall exclude the Environmental
      Threshold Amount. For the purposes of application of the foregoing
      thresholds, "single incident" shall be applicable on a well-by-well or
      property-by-property basis.

                  (iii) If Seller and Buyer agree to an adjustment of the
      Purchase Price, said adjustment shall be made only for the net present
      value, calculated using a ten percent discount rate (PV 10), of the most
      cost effective means to achieve the remediation required by applicable
      federal, state or local law or other governmental or judicial directive
      and not for any other cost.

                                      -11-

<PAGE>

      5.5   ENVIRONMENTAL DISPUTE RESOLUTION. The parties agree to resolve
disputes concerning the following matters pursuant to this Section: (i) the
existence and scope of an Environmental Defect, (ii) Buyer's estimate of costs
of Remediation of an Environmental Defect and (iii) the effectiveness of
Seller's Remediation. The parties agree to attempt to initially resolve all
disputes through good faith negotiations. If the parties cannot resolve disputes
regarding items (i), (ii) or (iii) on or 45 days after the Closing Date, the
disputed matters will be finally determined by binding arbitration pursuant to
Section 14.5.d.

      5.6   "AS IS, WHERE IS" PURCHASE. Buyer shall acquire the Assets
(including Assets for which a notice was given under Section 5.4 above) in an
"AS IS, WHERE IS" condition and shall assume all risks that the Assets may
contain waste materials (whether toxic, hazardous, extremely hazardous or
otherwise) or other adverse physical conditions, including, but not limited to,
the presence of unknown abandoned oil and gas wells, water wells, sumps, pits,
pipelines or other waste or spill sites which may not have been revealed by
Buyer's investigation. On and after the Effective Time, all responsibility and
liability related to all such conditions, whether known or unknown, fixed or
contingent, will be transferred from Seller to Buyer.

      5.7   DISPOSAL OF MATERIALS, SUBSTANCES AND WASTES. Buyer shall properly
handle, remove, transport and dispose of any material, substance or waste
(whether toxic, hazardous, extremely hazardous or otherwise) from the Assets or
Lands (including, but not limited to, produced water, drilling fluids and other
associated wastes), whether present before or after the Effective Time, in
accordance with applicable local, state and federal laws and regulations. Buyer
shall keep records of the types, amounts and location of materials, substances
and wastes, which are transported, handled, discharged, released or disposed
onsite and offsite. When and if any Lease is terminated, Buyer shall take
whatever additional testing, assessment, closure, reporting or remedial action
with respect to the Assets or Lands as is necessary to meet any local, state or
federal requirements directed at protecting human health or the environment in
effect at that time.

      5.8   BUYER'S INDEMNITY.

            a.    Buyer shall indemnify, hold harmless, release and defend
Seller from and against all damages, losses, claims, demands, causes of action,
judgments and other costs (including but not limited to any civil fines,
penalties, costs of assessment, clean-up, removal and remediation of pollution
or contamination, and expenses for the modification, repair or replacement of
facilities on the Lands) brought by any and all persons and any agency or other
body of federal, state or local government, on account of any personal injury,
illness or death, any damage to, destruction or loss of property, and any
contamination or pollution of natural resources (including soil, air, surface
water or groundwater) to the extent any of the foregoing directly or indirectly
is caused by or otherwise involves any environmental condition of the Assets or
Lands, whether created or existing before, on or after the Effective Time,
including, but not limited to, the presence, disposal or release of any material
(whether hazardous, extremely hazardous, toxic or otherwise) of any kind in, on
or under the Assets or the Lands.

            b.    Buyer's indemnification obligations shall extend to and
include, but not be limited to (i) the negligence or other fault of Seller,
Buyer and third parties, whether such

                                      -12-

<PAGE>
negligence is active or passive, gross, joint, sole or concurrent, (ii)
Seller's or Buyer's strict liability, and (iii) Seller's or Buyer's liabilities
or obligations under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended (42 U.S.C. Sections 9601 et seq.), the
Resource Conservation and Recovery Act of 1976 (42 U.S.C. Section 6901 et seq.),
the Clean Water Act (33 U.S.C. Sections 466 et seq.), the Safe Drinking Water
Act (14 U.S.C. Sections 1401-1450), the Hazardous Materials Transportation Act
(49 U.S.C. Sections 1801 et seq.), the Toxic Substances Control Act (15 U.S.C.
Sections 2601-2629), the Clean Air Act (42 U.S.C. Section 7401 et seq.) as
amended, the Clean Air Act Amendments of 1990 and all state and local laws and
any replacement or successor legislation or regulation thereto. This
indemnification shall be in addition to any other indemnity provisions contained
in this Agreement, and it is expressly understood and agreed that any terms of
this article shall control over any conflicting or contradicting terms or
provisions contained in this Agreement.

                                   ARTICLE 6
                     SELLER'S REPRESENTATIONS AND WARRANTIES

      Seller makes the following representations and warranties as of the date
of this Agreement:

      6.1   EXISTENCE. Seller is a corporation duly organized and validly
existing under the laws of the State of Delaware.

      6.2   POWER AND AUTHORITY. Seller has all requisite power and authority to
carry on its business as presently conducted, to enter into this Agreement and
each of the documents contemplated to be executed by Seller at Closing, and to
perform its obligations under this Agreement and under such documents. To the
best of Seller's knowledge, the consummation of the transaction contemplated by
this Agreement and each of the documents contemplated to be executed by Seller
at Closing will not violate, nor be in conflict with, (i) any provision of
Seller's organizational or governing documents, (ii) any agreement or instrument
to which Seller is a party or is bound, or (iii) any judgment, decree, order,
statute, rule or regulation applicable to Seller.

      6.3   AUTHORIZATION. The execution, delivery and performance of this
Agreement and each of the documents contemplated to be executed by Seller at
Closing and the contemplated transaction has been duly and validly authorized by
all requisite corporate and shareholder action on the part of Seller.

      6.4   EXECUTION AND DELIVERY. This Agreement has been duly executed and
delivered on behalf of Seller, and all documents and instruments required
hereunder to be executed and delivered by Seller have been duly executed and
delivered. This Agreement does, and such documents and instruments shall,
constitute legal, valid and binding obligations of Seller enforceable in
accordance with their terms, subject to (i) applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws of general application with
respect to creditors, (ii) general principles of equity and (iii) the power of a
court to deny enforcement of remedies generally based upon public policy.

                                      -13-

<PAGE>

      6.5   LIABILITIES FOR BROKERS' FEES. Seller has incurred no liability,
contingent or otherwise, for brokers' or finders' fees relating to the
transaction contemplated by this Agreement for which Buyer shall have any
responsibility whatsoever.

      6.6   LITIGATION. Seller is not aware of and Seller has not received
written notice of any demand, lawsuit, compliance order, notice of probable
violation or similar governmental action that, if adversely determined, might
(i) result in an impairment or loss of title to the Assets, (ii) materially
impair the value of the Assets or (iii) materially hinder or impede the
operation of the Assets. To the best of Seller's knowledge, there is no action,
suit, proceeding, claim or investigation by any person, entity, administrative
agency or governmental body pending or, to Seller's knowledge, threatened,
against Seller before any governmental authority that impedes or is likely to
impede Seller's ability to consummate the transaction contemplated by this
Agreement and to assume the liabilities to be assumed by Seller under this
Agreement.

      6.7   LIENS. Except for the liens created by or arising under joint
operating agreements covering the Assets or applicable state statutes, the
Assets are free and clear of all liens.

      6.8   NO BANKRUPTCY. There are no bankruptcy proceedings pending, being
contemplated by, or to Seller's knowledge, based upon reasonable inquiry and
investigation, threatened against Seller.

      6.9   TAXES. Based on Seller's knowledge, all taxes and assessments
pertaining to the Assets based on or measured by the ownership of property for
all taxable periods prior to the taxable period in which this Agreement is
executed have been properly paid. All income taxes and obligations relating
thereto that could result in a lien or other claim against any of the Assets
have been properly paid, unless contested in good-faith by appropriate
proceeding.

      6.10  AGREEMENTS. To the best of Seller's knowledge, all of the material
agreements (excluding Leases and pooling or communitization agreements)
pertaining to the Assets are listed on EXHIBIT C.

      6.11  WELLS. To the best of Seller's knowledge, each Well is properly
permitted and operated in substantial compliance with all applicable statutes,
ordinances, rules, regulations and orders, including without limitation
Environmental Laws.

      6.12  LEASES. To the best of Seller's knowledge, the Leases are in full
force and effect in accordance with their respective terms, and there exist no
defaults in the performance of any obligation thereunder.

                                   ARTICLE 7
                     BUYER'S REPRESENTATIONS AND WARRANTIES

      Buyer makes the following representations and warranties as of the date of
this Agreement:

      7.1   EXISTENCE. Buyer is a corporation, duly organized, validly existing
and formed under the laws of the State of Maryland, and Buyer is duly qualified
and in good standing in the State of Colorado.

                                      -14-

<PAGE>

      7.2   POWER AND AUTHORITY. Buyer has all requisite power and authority to
carry on its business as presently conducted, to enter into this Agreement and
each of the documents contemplated to be executed by Buyer at Closing, and to
perform its obligations under this Agreement and under such documents. The
consummation of the transaction contemplated by this Agreement and each of the
documents contemplated to be executed by Buyer at Closing will not violate, nor
be in conflict with, (i) any provision of Buyer's organizational or governing
documents, (ii) any agreement or instrument to which Buyer is a party or is
bound, or (iii) any judgment, decree, order, statute, rule or regulation
applicable to Buyer.

      7.3   AUTHORIZATION. The execution, delivery and performance of this
Agreement and each of the documents contemplated to be executed by Buyer at
Closing and the contemplated transaction has been duly and validly authorized by
all requisite action on the part of Buyer.

      7.4   EXECUTION AND DELIVERY. This Agreement has been duly executed and
delivered on behalf of Buyer, and at the Closing all documents and instruments
required hereunder to be executed and delivered by Buyer shall have been duly
executed and delivered. This Agreement does, and such documents and instruments
shall, constitute legal, valid and binding obligations of Buyer enforceable in
accordance with their terms, subject to (i) applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws of general application with
respect to creditors, (ii) general principles of equity and (iii) the power of a
court to deny enforcement of remedies generally based upon public policy.

      7.5   LIABILITIES FOR BROKERS' FEES. Buyer has incurred no liability,
contingent or otherwise, for brokers' or finders' fees relating to the
transaction contemplated by this Agreement for which Seller shall have any
responsibility whatsoever.

      7.6   LITIGATION. There is no action, suit, proceeding, claim or
investigation by any person, entity, administrative agency or governmental body
pending or, to Buyer's knowledge, threatened in writing, against Buyer before
any governmental authority that impedes or is likely to impede Buyer's ability
to consummate the transactions contemplated by this Agreement and to assume the
liabilities to be assumed by Buyer under this Agreement.

      7.7   INDEPENDENT EVALUATION. Buyer is an experienced and knowledgeable
investor in the oil and gas business. Buyer has been advised by and has relied
solely upon its own expertise in legal, tax, reservoir engineering and other
professional counsel concerning this transaction, the Assets and the value
thereof.

      7.8   QUALIFICATION. Buyer is now or at closing will be and thereafter
will continue to be qualified to own and operate any federal or State of Wyoming
oil and gas lease that constitutes part of the Assets, including meeting all
bonding requirements. Completing the transaction set out in this Agreement will
not cause Buyer to be disqualified or to exceed any acreage limitation imposed
by law, statute or regulation.

                                   ARTICLE 8
                            COVENANTS AND AGREEMENTS

      8.1   COVENANTS AND AGREEMENTS. As to the period of time from the
execution hereof until Closing, Seller and Buyer agree as follows:

                                      -15-
<PAGE>

            a.    Operation Prior to Closing. Except as otherwise consented to
in writing by Buyer or provided in this Agreement, from the date of execution
hereof to the Closing, Seller shall use Seller's best efforts to ensure that the
Assets are maintained and operated in a good and workmanlike manner. Subject to
the provisions of Section 2.2, Seller shall pay or cause to be paid its
proportionate share of all costs and expenses incurred in connection with such
operations. To the extent Seller receives written AFEs or actual notice of such,
Seller shall notify Buyer of ongoing activities and major capital expenditures
in excess of $10,000.00 per activity net to Seller's interest conducted on the
Assets and shall consult with Buyer regarding all such matters and operations.

            b.    Restriction on Operations. Subject to Section 8.1.a., unless
Seller obtains the prior written consent of Buyer to act otherwise, Seller will
use good-faith efforts within the constraints of the applicable operating
agreements and other applicable agreements not to (i) abandon any part of the
Assets (except in the ordinary course of business or the abandonment of leases
upon the expiration of their respective primary terms or if not capable of
production in paying quantities), (ii) except for capital projects which are
deemed to be approved, approve any operations on the properties anticipated in
any instance to cost the owner of the Assets more than $10,000.00 per activity
net to Seller's interest (excepting emergency operations, operations required
under presently existing contractual obligations, ongoing commitments under
existing AFEs and operations undertaken to avoid a monetary penalty or
forfeiture provision of any applicable agreement or order), (iii) convey or
dispose of any material part of the Assets (other than replacement of equipment
or sale of oil, gas, and other liquid products produced from the Assets in the
regular course of business) or enter into any farmout, farmin or other similar
contract affecting the Assets, (iv) let lapse any insurance now in force with
respect to the Assets, or (v) materially modify or terminate any contract
material to the operation of the Assets.

            c.    Marketing. Unless Seller obtains the prior written consent of
Buyer to act otherwise, Seller will not alter any existing marketing contracts
currently in existence, or enter into any new marketing contracts or agreements
providing for the sale of Hydrocarbons for a term in excess of one (1) month.

            d.    Legal Status. Seller and Buyer shall use all reasonable
efforts to maintain their respective legal statuses from the date hereof until
the Final Settlement Date and to assure that as of the Closing Date they will
not be under any material corporate, legal or contractual restriction that would
prohibit or delay the timely consummation of the transaction contemplated
hereby.

            e.    Notices of Claims. Seller shall promptly notify Buyer and
Buyer shall promptly notify Seller if, between the date hereof and the Closing
Date, Seller or Buyer, as the case may be, receives notice of any claim, suit,
action or other proceeding of the type referred to in Sections 6.6 and 7.6.

            f.    Compliance with Laws. During the period from the date of this
Agreement to the Closing Date, Seller shall attempt in good faith to comply in
all material respects with all applicable statutes, ordinances, rules,
regulations and orders relating to the ownership and operation of the Assets.

                                      -16-
<PAGE>

            g.    Government Reviews and Filings. Before and after the Closing,
Buyer and Seller shall cooperate to provide requested information, make required
filings with, prepare applications to and conduct negotiations with each
governmental agency as required to consummate the transaction contemplated
hereby. Each party shall make any governmental filings occasioned by its
ownership or structure. Buyer shall make all filings after the Closing at its
expense with governmental agencies necessary to transfer title to the Assets or
to comply with laws and shall indemnify and hold harmless Seller from and
against all claims, costs, expenses, liabilities and actions arising out of
Buyer's holding of such title after the Closing and prior to the securing of any
necessary governmental approvals of the transfer.

            h.    Confidentiality. All data and information obtained by Buyer
from Seller in connection with the transactions contemplated by this Agreement,
whether before or after the execution of this Agreement, and data and
information generated by Buyer in connection with this transaction
(collectively, the "INFORMATION") is deemed by the parties to be confidential
and proprietary to Seller. Until completion of the Closing, except as required
by law, Buyer and its officers, agents and representatives will hold in strict
confidence all Information, except any Information which: (i) at the time of
disclosure to Buyer by Seller is in the public domain; (ii) after disclosure to
Buyer by Seller becomes part of the public domain by publication or otherwise,
except by breach of this commitment by Buyer; (iii) Buyer can establish by
competent proof was rightfully in its possession at the time of disclosure to
Buyer by Seller; (iv) Buyer rightfully receives from third parties free of any
obligation of confidence; (v) is disclosed to Buyer's consultants, investors and
lenders who similarly agree to protect the confidentiality of such Information
and agree to use such Information only for their due diligence evaluation of the
Assets; or (vi) is developed independently by Buyer, provided that the person or
persons developing the Information shall not have had access to the Information.

            i.    Return of Information. If the transaction contemplated by this
Agreement does not close on or before March 29, 2002, Buyer shall return to
Seller all copies of the Information in the possession of Buyer obtained or
generated by Buyer pursuant to any provision of this Agreement. The terms of
Sections 8.1.h. and 8.1.i shall survive termination of this Agreement.

                                    ARTICLE 9
                              CONDITIONS TO CLOSING

      9.1   SELLER'S CONDITIONS. The obligations of Seller at the Closing are
subject, at the option of Seller, to the satisfaction at or prior to Closing of
the following conditions precedent:

            a.    Representations, Warranties and Covenants. All representations
and warranties of Buyer contained in Article 7 of this Agreement shall be true
and correct in all material respects on and as of the Closing and Buyer shall
have performed and satisfied all covenants and agreements required by this
Agreement to be performed and satisfied by Buyer at or prior to the Closing in
all material respects;

            b.    Closing Documents. Buyer shall have executed and delivered the
documents which are contemplated to be executed and delivered by it pursuant to
Article 11 hereof prior to or on the Closing Date;

                                      -17-
<PAGE>

            c.    No Action. No order shall have been entered by any court or
governmental agency having jurisdiction over the parties or the subject matter
of this Agreement that restrains or prohibits the purchase and sale contemplated
by this Agreement and which remains in effect at the time of Closing or seeks to
recover damages from Seller resulting therefrom.

      9.2   BUYER'S CONDITIONS. The obligations of Buyer at the Closing are
subject, at the option of Buyer, to the satisfaction on or prior to the Closing
of the following conditions precedent:

            a.    Representations and Warranties. The representations and
warranties of Seller contained in Article 6 of this Agreement shall be true and
correct in all material respects on and as of the Closing Date, and Seller shall
have performed and satisfied all covenants and agreements required by this
Agreement to be performed and satisfied by Buyer at or prior to the Closing in
all material respects;

            b.    Closing Documents. Seller shall have executed and delivered
the documents which are contemplated to be executed and delivered by it pursuant
to Article 11 hereof prior to or on the Closing Date;

            c.    No Action. No order shall have been entered by any court or
governmental agency having jurisdiction over the parties or the subject matter
of this Agreement that restrains or prohibits the purchase and sale contemplated
by this Agreement and which remains in effect at the time of Closing or seeks to
recover damages from Buyer resulting therefrom.

                                   ARTICLE 10
                      RIGHT OF TERMINATION AND ABANDONMENT

      10.1  TERMINATION. This Agreement may be terminated in accordance with the
following provisions:

            a.    by Seller if the conditions set forth in Section 9.1 are not
satisfied, through no fault of Seller, or waived by Seller in writing, as of the
Closing Date; or

            b.    by Buyer if the conditions set forth in Section 9.2 are not
satisfied, through no fault of Buyer, or waived by Buyer in writing, as of the
Closing Date.

            c.    by Seller or Buyer if the aggregate of Title Defect
Adjustments and Environmental Defect Adjustments exceeds 2% of the Purchase
Price.

      10.2  LIABILITIES UPON TERMINATION.

            a.    Buyer's Default. If the transactions contemplated by this
Agreement are not consummated on or before the date specified in Section 11.1 by
reason of Buyer's wrongful failure to tender performance at Closing, and if
Seller is not in material default under the terms of this Agreement and is
ready, willing and able to Close, Buyer shall pay Seller an amount equal to
seven percent (7%) of the Purchase Price as liquidated damages. Seller and Buyer
agree that

                                      -18-
<PAGE>

Seller's damages in the event Buyer fails to close are difficult to measure and
both Seller and Buyer agree that the amount of the liquidated damages provided
herein bears a reasonable relationship to and is a reasonable estimation of such
damages.

            b.    Seller's Default. If the transactions contemplated by this
Agreement are not consummated on or before the date specified in Section 11.1 by
reason of Seller's wrongful failure to tender performance at Closing and if
Buyer is not in material default under this Agreement and is ready, willing and
able to Close, Buyer shall be entitled to specific performance as Buyer's sole
and exclusive remedy.

            c.    Other Termination. If Seller and Buyer agree to terminate this
Agreement, each party shall release the other party from any and all liability
for termination of this Agreement.

                                   ARTICLE 11
                                     CLOSING

      11.1  DATE OF CLOSING. The closing of the transactions contemplated by
this Agreement ("CLOSING" or "CLOSING DATE") shall be held on or before March
29, 2002 at the offices of Davis Graham & Stubbs LLP in Denver, Colorado, at
8:30 a.m. or at such other time and place as the parties may agree in writing.
The actual change of operations from Seller to Buyer shall occur on April 2,
2002, at 7:00 a.m., Mountain Time.

      11.2  CLOSING OBLIGATIONS. At Closing, the following events shall occur,
each being a condition precedent to the others and each being deemed to have
occurred simultaneously with the others:

            a.    Assignment. Seller and Buyer shall execute, acknowledge and
deliver (i) an Assignment, Bill of Sale and Conveyance of the Assets effective
as of the Effective Time (in sufficient counterparts to facilitate filing and
recording) substantially in the form of EXHIBIT D with a special warranty of
title by, through and under Seller but not otherwise; with no warranties,
express or implied, as to the personal property, fixtures or condition of the
Assets which are conveyed "as is, where is"; (ii) such other assignments, bills
of sale, or deeds necessary to transfer the Assets to Buyer, including without
limitation any conveyances on official forms and related documentation necessary
to transfer the Assets to Buyer in accordance with requirements of state and
federal governmental regulations; and (iii) Licenses of the Geophysical Data to
the extent all necessary third party consents for such licenses have been
obtained; and (iv) an Assignment and Assumption Agreement in the form of EXHIBIT
E under which Seller assigns its interest in the Third Party Gathering Contracts
included in the Assets and under which Buyer assumes the obligations thereunder
in accordance with the terms of this Agreement.

            b.    Preliminary Settlement Statement. Seller and Buyer shall
execute and deliver the Preliminary Settlement Statement.

            c.    Purchase Price. Buyer shall deliver to Seller the Closing
Amount by wire transfer of immediately available funds.

                                      -19-
<PAGE>

            d.    Letters in Lieu. Seller and Buyer shall execute and deliver
all necessary letters in lieu of transfer orders directing all purchasers of
production to pay Buyer the proceeds attributable to production from the Assets
from and after the Effective Time.

            e.    Seller's Officer's Certificate. Seller shall execute and
deliver to Buyer an officer's certificate in form and substance similar to
EXHIBIT G, stating that all conditions precedent to Closing have been satisfied.

            f.    Buyer's Officer's Certificate. Buyer shall execute and deliver
to Seller an officer's certificate in form and substance similar to EXHIBIT H,
stating that all conditions precedent to Closing have been satisfied.

                                   ARTICLE 12
                            POST-CLOSING OBLIGATIONS

      12.1  POST-CLOSING ADJUSTMENTS. As soon as practicable after the Closing,
but on or before one hundred twenty (120) days after Closing, Seller, with the
assistance of Buyer's staff and with access to such records as necessary, shall
prepare and deliver to Buyer a final settlement statement (the "FINAL SETTLEMENT
STATEMENT") setting forth each adjustment or payment that was not finally
determined as of the Closing and showing the calculation of such adjustment and
the resulting final purchase price (the "FINAL PURCHASE PRICE"). The Final
Settlement Statement shall set forth all well (on a well-by-well basis) and
pipeline imbalances for which no Purchase Price adjustments were made in the
Preliminary Settlement Statement. As soon as practicable after receipt of
Seller's proposed Final Settlement Statement, but on or before fifteen (15) days
after receipt of Seller's proposed Final Settlement Statement, Buyer shall
deliver to Seller a written report containing any changes that Buyer proposes to
make to the Final Settlement Statement. Buyer's failure to deliver to Seller a
written report detailing changes to the proposed Final Settlement Statement by
that date shall be deemed an acceptance by Buyer of the Final Settlement
Statement as submitted by Seller. The parties shall agree with respect to the
changes proposed by Buyer, if any, no later than fifteen (15) days after receipt
by Seller of Buyer's comments to the proposed Final Settlement Statement. The
date upon which such agreement is reached or upon which the Final Purchase Price
is established for a transaction shall be called the "FINAL SETTLEMENT DATE." If
the Final Purchase Price is more than the Closing Amount, Buyer shall pay Seller
the amount of such difference. If the Final Purchase Price is less than the
Closing Amount, Seller shall pay to Buyer the amount of such difference. Any
such payment by Buyer or Seller shall be by wire transfer in immediately
available funds within five (5) days of the Final Settlement Date.

      12.2  DISPUTE RESOLUTION. If the parties are unable to resolve disputes
concerning the Final Settlement Statement or Final Purchase Price on or before
thirty (30) days after the Final Settlement Statement is received by Buyer, such
disputes shall be resolved in accordance with Section 14.5.d.

      12.3  RECORDS. Seller shall make the Records available for pick up by
Buyer at a mutually agreeable time. Seller may retain copies of the Records. The
Records shall be made available to Seller for review and copying as reasonably
requested at any time after Closing by Seller. Buyer agrees not to destroy or
otherwise dispose of the Records for a period of six (6)

                                      -20-
<PAGE>

years after the Closing without giving Seller reasonable notice and an
opportunity to copy the Records.

      12.4  TRANSFER TAXES AND RECORDING FEES. Buyer shall pay all sales,
transfer, use or similar taxes occasioned by the sale or transfer of the Assets
and all documentary, transfer, filing, licensing, and recording fees required in
connection with the processing, filing, licensing or recording of any
assignments, titles or bills of sale.

      12.5  RENTAL AND ROYALTY ADMINISTRATION. Seller shall continue to receive,
for the account of Buyer, gross revenues attributable to production from the
Assets for the months of March and April, 2002, and shall pay taxes and disburse
such production revenue, including Buyer's share of such production net revenue,
in accordance with Seller's pre-Effective Time business practices. Seller shall
pay all Lease rentals and shut-in payments due and payable in March and April,
2002. The Final Settlement Statement shall include an upward adjustment to the
Purchase Price for Lease rentals and shut-in payments paid by Seller for the
months of March, 2002 and April, 2002, to the extent such payments by Seller are
not reflected in the Preliminary Settlement Statement, and any further
adjustments required by reason of Seller's disbursement of production revenue
and payment of taxes under this Section 12.5. Buyer assumes all risk, liability,
obligation and Losses (as defined in Section 14.4) in connection with, and shall
defend, indemnify, and save and hold harmless Seller, Seller's partners,
employees and agents, from and against all Losses which arise from or in
connection with disbursements and Lease rental and shut-in payments made by
Seller pursuant to this Section 12.5, including Losses caused by the negligence
or fault of Seller.

      12.6  LEASE MAINTENANCE COSTS FOR JOINTLY OWNED LEASES. Post-closing,
Seller shall pay all Lease rentals and other Lease maintenance costs for Leases
which cover both lands retained by Seller and lands conveyed to Buyer. Buyer
shall reimburse Seller within five (5) days after receipt of an invoice from
Seller for Buyer's proportionate share of such Lease rentals and other Lease
maintenance costs. Buyer's proportionate share of Lease rentals and other Lease
maintenance costs shall be in the proportion that the acreage held (without
regard to depth limitations or restrictions) by Buyer under a particular lease
bears to the total acreage covered by the Lease. If, through mistake or
oversight, any rental, shut-in well payment, minimum royalty or royalty payment,
or other payment necessary to maintain all or a portion of any Lease is not paid
or is erroneously paid and as a result a Lease terminates, there shall be no
monetary liability against Seller. Upon coordination with Seller, Buyer shall
have the right, but not the obligation, to pay any Lease rentals or other Lease
maintenance costs and invoice Seller for its pro rata share of the same.

      12.7  FURTHER ASSURANCES. It is Seller's intent to convey all of its oil,
gas and mineral interests in Township 33 North, Ranges 86, 87 West; Township 34
North, Ranges 84, 85, 87, 88, 90 West; Sections 1-4, 9-16, 21-28, 31-36 in
Township 35 North, Range 84 West; Sections 4-9, 15-23, NW/4 and S/2 Section 25,
26 - 36, Township 35 North, Range 85 West; Township 35 North, Ranges 86, 90
West; Sections 1-32, Township 36 North, Range 85 West; Township 36 North, Ranges
86, 87, 93, 94 West; Township 37 North, Ranges 86, 87 West; Township 38 North,
Ranges 87, 88, 89 West; Township 39 North, Ranges 87, 88, 89, 93 West; and
Township 40 North, Range 89 West, EXCLUDING all rights of Seller to earn an
interest in the Option Lands by drilling or other operations conducted on
Retained Lands pursuant to the

                                      -21-
<PAGE>

Option Contracts. From time to time after Closing, Seller and Buyer shall each
execute, acknowledge and deliver to the other such further instruments and take
such other action as may be reasonably requested in order more effectively to
assure to the other the full beneficial use and enjoyment of the Assets and
otherwise to accomplish the purposes of the transactions contemplated by this
Agreement.

      12.8  SELLER'S RIGHT OF FIRST REFUSAL TO MARKET GAS. Seller shall have the
right, at any time and from time to time, for a period of two (2) years from the
Effective Time to match any offer by a third party to market Buyer's production
from the Leases, Fee Interests and Lands. Buyer shall provide Seller full
information in writing relating to the third party offer to market Buyer's
production, and Seller shall have five (5) days to notify Buyer of Seller's
election to market Buyer's production upon the same terms and conditions as the
third party offer.

                                   ARTICLE 13
                                      TAXES

      13.1  APPORTIONMENT OF AD VALOREM AND PROPERTY TAXES. A downward
adjustment to the Purchase Price (the "PROPERTY TAX ADJUSTMENT") shall be made
for Seller's share (2/12ths) of all ad valorem or real property taxes and
personal property taxes, including interest and penalties (the "PROPERTY
TAXES"), for the tax year ("TAX PERIOD") during which the Effective Time occurs.
The owner of record on the assessment date shall file or cause to be filed all
required reports and returns incident to the Property Taxes and shall pay or
cause to be paid to the taxing authorities all Property Taxes for the Tax Period
during which the Effective Time occurs.

      13.2  TRANSFER TAXES. The Purchase Price excludes, and Buyer shall be
liable for, any Transfer Taxes (as defined below) required to be paid in
connection with the sale of the Assets pursuant to this Agreement. "TRANSFER
TAXES" means any sales, use, excise, stock, stamp, document, filing, recording,
registration, authorization and similar taxes, fees and charges.

      13.3  OTHER TAXES. Subject to Section 12.5, with the exception of income
taxes, all other federal, state and local taxes, specifically including
severance taxes (including interest and penalties attributable thereto) on the
ownership or operations of the Assets which are imposed with respect to periods
or portions of periods prior to the Effective Time shall be paid by Seller and
all taxes imposed with respect to periods or portions of periods beginning on or
after the Effective Time shall be paid by Buyer.

      13.4  TAX REPORTS AND RETURNS. For tax periods in which the Effective Time
occurs, Seller agrees to immediately forward to Buyer copies of any tax reports
and returns received by Seller after Closing and provide Buyer with any
information Seller has that is necessary for Buyer to file any required tax
reports and returns related to the Assets. Buyer agrees to file all tax returns
and reports applicable to the Assets that Buyer is required to file after the
Closing and, subject to the provisions of Sections 12.5 and 13.1, to pay all
Taxes payable with respect to the Assets.

                                      -22-
<PAGE>

                                   ARTICLE 14
                           ASSUMPTION AND RETENTION OF
                          OBLIGATIONS; INDEMNIFICATION

      14.1 BUYER'S ASSUMPTION OF LIABILITIES AND OBLIGATIONS. Upon Closing,
Buyer shall assume and pay, perform, fulfill and discharge all claims, costs,
expenses, liabilities and obligations ("OBLIGATIONS") accruing or relating to
the ownership and operation of the Assets after the Effective Time, including
(i) the owning, developing, exploring, operating or maintaining of the Assets or
the producing, transporting and marketing of Hydrocarbons from the Assets,
including, without limitation, the payment of Property Expenses, the obligation
to plug and abandon all wells located on the Lands and reclaim all well sites
located on the Lands regardless of when the obligations arose, the make-up and
balancing obligations for overproduction of gas from the Wells, all liability
for royalty and overriding royalty payments made and Taxes paid with respect to
the Assets, (ii) the Assumed Environmental Liabilities, and (iii) all
Obligations accruing or relating to the ownership or operation of the Assets
before the Effective Time for which Seller is not liable pursuant to the
provisions of Section 14.2 (collectively, the "ASSUMED LIABILITIES").

      14.2 SELLER'S RETENTION OF LIABILITIES AND OBLIGATIONS. Subject to the
provisions of Section 5.8, upon Closing Seller shall retain and pay (i) all
Property Expenses of Seller relating to the ownership and operation of the
Assets and the producing, transporting and marketing of Hydrocarbons from the
Assets prior to the Effective Time, BUT ONLY AS TO CLAIMS ASSERTED BEFORE ONE
(1) YEAR AFTER THE CLOSING DATE; and (ii) all liability for royalty and
overriding royalty payments made and Taxes paid prior to the Effective Time with
respect to the Assets (collectively, the "RETAINED LIABILITIES").

      14.3 BUYER'S PLUGGING AND ABANDONMENT OBLIGATIONS. In addition to the
Assumed Liabilities, upon Closing Buyer assumes full responsibility and
liability for the following plugging and abandonment obligations related to the
Assets ("BUYER'S PLUGGING AND ABANDONMENT OBLIGATIONS"), regardless of whether
they are attributable to the ownership or operation of the Assets before or
after the Effective Time. All operations by Buyer under this section shall be
conducted in a good and workmanlike manner and in compliance with all applicable
laws and regulations.

            a. The necessary and proper plugging, replugging and abandonment of
all wells on the Assets;

            b. The necessary and proper removal, abandonment and disposal of all
structures, pipelines, equipment, abandoned property, trash, refuse and junk
located on or comprising part of the Assets;

            c. The necessary and proper capping and burying of all associated
flow lines located on or comprising part of the Assets;

            d. The necessary and proper restoration of the surface and
subsurface to the condition required by applicable laws, regulations or
contract;

                                      -23-
<PAGE>

            e. All obligations relating to the items described in Section
14.3.a. through 14.3.d. arising from contractual requirements and demands made
by courts, authorized regulatory bodies or parties claiming a vested interest in
the Assets; and

            f. Obtaining and maintaining all bonds, or supplemental or
additional bonds, that may be required contractually or by governmental
authorities.

      14.4 INDEMNIFICATION. "LOSSES" shall mean any actual losses, costs,
expenses (including court costs, reasonable fees and expenses of attorneys,
technical experts and expert witnesses and the costs of investigation),
liabilities, damages, demands, suits, claims, and sanctions of every kind and
character (including civil fines) arising from, related to or reasonably
incident to matters indemnified against; excluding however any special,
consequential, punitive or exemplary damages, diminution of value of an Asset,
loss of profits incurred by a party hereto or Loss incurred as a result of the
indemnified party indemnifying a third party.

            After the Closing, Buyer and Seller shall indemnify each other as
follows:

            a. Seller's Indemnification of Buyer. Seller assumes all risk,
liability, obligation and Losses in connection with, and shall defend,
indemnify, and save and hold harmless Buyer, its officers, directors, employees
and agents, from and against all Losses which arise from or in connection with
(i) the Retained Liabilities, (ii) any material breach of any representation or
warranty made by Seller, (iii) any matter for which Seller has agreed to
indemnify Buyer under this Agreement, and (iv) any material breach by Seller of
this Agreement.

            b. Buyer's Indemnification of Seller. Buyer assumes all risk,
liability, obligation and Losses in connection with, and shall defend,
indemnify, and save and hold harmless Seller, Seller's partners, employees and
agents, from and against all Losses which arise from or in connection with (i)
the Assumed Liabilities, (ii) any material breach of any representation or
warranty made by Buyer, (iii) any matter for which Buyer has agreed to indemnify
Seller under this Agreement, and (iv) any material breach by Buyer of this
Agreement.

      14.5 PROCEDURE. The indemnifications contained in Section 14.4 shall be
implemented as follows:

            a. Coverage. Such indemnity shall extend to all Losses suffered or
incurred by the indemnified party.

            b. Claim Notice. The party seeking indemnification under the terms
of this Agreement ("INDEMNIFIED PARTY") shall submit a written "CLAIM NOTICE" to
the other party ("INDEMNIFYING PARTY") which, to be effective, must state: (i)
the amount of each payment claimed by an Indemnified Party to be owing, (ii) the
basis for such claim, with supporting documentation, and (iii) a list
identifying to the extent reasonably possible each separate item of Loss for
which payment is so claimed. The amount claimed shall be paid by the
Indemnifying Party to the extent required herein within ten (10) days after
receipt of the Claim Notice, or after the amount of such payment has been
finally established, whichever last occurs.

                                      -24-
<PAGE>

            c. Information. Within twenty (20) days after the Indemnified Party
receives notice of a claim or legal action that may result in a Loss for which
indemnification may be sought under this Article 14 ("CLAIM"), the Indemnified
Party shall give written notice of such Claim to the Indemnifying Party. If the
Indemnifying Party or its counsel so requests, the Indemnified Party shall
furnish the Indemnifying Party with copies of all pleadings and other
information with respect to such Claim. At the election of the Indemnifying
Party made within sixty (60) days after receipt of such notice, the Indemnified
Party shall permit the Indemnifying Party to assume control of such Claim (to
the extent only that such Claim, legal action or other matter relates to a Loss
for which the Indemnifying Party is liable), including the determination of all
appropriate actions, the negotiation of settlements on behalf of the Indemnified
Party, and the conduct of litigation through attorneys of the Indemnifying
Party's choice; provided, however, that no such settlement can result in any
liability or cost to the Indemnified Party for which it is entitled to be
indemnified hereunder without its consent not to be unreasonably withheld. If
the Indemnifying Party elects to assume control, (i) any expense incurred by the
Indemnified Party thereafter for investigation or defense of the matter shall be
borne by the Indemnified Party, and (ii) the Indemnified Party shall give all
reasonable information and assistance, other than pecuniary, that the
Indemnifying Party shall deem necessary to the proper defense of such Claim,
legal action, or other matter. In the absence of such an election, the
Indemnified Party will use its best efforts to defend, at the Indemnifying
Party's expense, any claim, legal action or other matter to which such other
party's indemnification under this Article 14 applies until the Indemnifying
Party assumes such defense, and, if the Indemnifying Party fails to assume such
defense within the time period provided above, settle the same in the
Indemnified Party's reasonable discretion at the Indemnifying Party's expense.
If such a Claim requires immediate action, both the Indemnified Party and the
Indemnifying Party will cooperate in good faith to take appropriate action so as
not to jeopardize defense of such Claim or either party's position with respect
to such Claim.

            d. Dispute Resolution. If the existence of a valid Claim or amount
to be paid by an Indemnifying Party is in dispute, the parties agree to submit
determination of the existence of a valid Claim or the amount to be paid
pursuant to the Claim Notice to binding arbitration. The arbitration shall be
before a three person panel of neutral arbitrators, consisting of one person
from each of the following categories: (1) an attorney who has practiced in the
area of oil and gas law for at least ten (10) years; (2) a retired judge at the
Colorado or United States District Court or Appellate Court level; and (3) a
person with at least ten years of oil and gas industry experience as a petroleum
engineer. The American Arbitration Association ("AAA") shall submit a list of
persons meeting the criteria outlined above for each category of arbitrator, and
the parties shall select one person from each category in the manner established
by the AAA. The arbitrators shall conduct a hearing no later than sixty (60)
days after submission of the matter to arbitration, and a written decision shall
be rendered by the arbitrators within thirty (30) days of the hearing. Any
payment due pursuant to the arbitration shall be made within fifteen (15) days
of the arbitrators' decision.

      14.6 NO INSURANCE; SUBROGATION. The indemnifications provided in this
Article 14 shall not be construed as a form of insurance. Buyer and Seller
hereby waive for themselves, their successors or assigns, including, without
limitation, any insurers, any rights to subrogation for Losses for which each of
them is respectively liable or against which each respectively

                                      -25-
<PAGE>

indemnifies the other, and, if required by applicable policies, Buyer and Seller
shall obtain waiver of such subrogation from their respective insurers.

      14.7 RESERVATION AS TO NON-PARTIES. Nothing in this Agreement is intended
to limit or otherwise waive any recourse Buyer or Seller may have against any
non-party for any obligations or liabilities that may be incurred with respect
to the Assets.

                                   ARTICLE 15
                                  MISCELLANEOUS

      15.1 EXHIBITS. The Exhibits referred to in this Agreement are hereby
incorporated in this Agreement by reference and constitute a part of this
Agreement.

      15.2 EXPENSES. Except as otherwise specifically provided, all fees, costs
and expenses incurred by Seller or Buyer in negotiating this Agreement or in
consummating the transactions contemplated by this Agreement shall be paid by
the party incurring same, including, without limitation, legal and accounting
fees, costs and expenses.

      15.3 NOTICES. All notices and communications required or permitted under
this Agreement shall be in writing and addressed as follows:

            If to Seller:   Williams Production RMT Company
                            1515 Arapahoe Street, Tower 3, Suite 1000
                            Denver, Colorado  80202
                            Telephone: (303) 606-4052
                            Facsimile: (303) 629-8281
                            Attention: Joseph P. Barrett
                                       Director, Land

                                          and

                            Williams Production RMT Company
                            1 Williams Center, MD41-3
                            Tulsa, Oklahoma 74172
                            Telephone: (918) 573-0249
                            Facsimile: (918) 573-8024
                            Attention: Exploration and Production Legal Counsel

            If to Buyer:    Bill Barrett Corporation
                            1099 18th Street
                            Suite 2300
                            Denver, Colorado  80202
                            Telephone: (303) 293-9100
                            Facsimile: (303) 291-0420
                            Attention: Hunt Walker
                                       Land Manager

                                      -26-
<PAGE>

Any communication or delivery hereunder shall be deemed to have been duly made
and the receiving party charged with notice (i) if personally delivered, when
received, (ii) if faxed, when received if receipt is confirmed by telephone by
the sender, (iii) if mailed, certified mail, return receipt requested, on the
date set forth on the return receipt or (iv) if sent by overnight courier, one
day after sending. Any party may, by written notice so delivered to the other
party, change the address or individual to which delivery shall thereafter be
made.

      15.4 AMENDMENTS. Except for waivers specifically provided for in this
Agreement, this Agreement may not be amended nor any rights hereunder waived
except by an instrument in writing signed by the party to be charged with such
amendment or waiver and delivered by such party to the party claiming the
benefit of such amendment or waiver.

      15.5 ASSIGNMENT. Prior to Closing, neither party shall assign all or any
portion of its respective rights or delegate all or any portion of its
respective duties hereunder without the prior written consent of the other
party.

      15.6 CONFIDENTIALITY. Seller and Buyer agree the provisions of this
Agreement shall be kept confidential except as disclosure may be required by
applicable law, rules and regulations of governmental agencies or stock
exchanges. Buyer shall inform Seller of all such disclosures by Buyer.

      15.7 PRESS RELEASES. Seller and Buyer agree that prior to making any press
releases or other public announcements concerning this Agreement and the
transactions contemplated hereby, the party desiring to make such public
announcement shall obtain the written consent of the other party not to be
unreasonably withheld. Seller retains the right to edit and/or reject any press
release submitted by Buyer. Nothing herein shall preclude Buyer from making such
disclosures deemed necessary by Buyer's counsel under any federal securities
laws or New York Stock Exchange rule.

      15.8 HEADINGS. The headings of the articles and sections of this Agreement
are for guidance and convenience of reference only and shall not limit or
otherwise affect any of the terms or provisions of this Agreement.

      15.9 COUNTERPARTS. This Agreement may be executed by Seller and Buyer in
any number of counterparts, each of which shall be deemed an original
instrument, but all of which together shall constitute one and the same
instrument. Execution can be evidenced by fax signatures with original signature
pages to follow in due course.

      15.10 REFERENCES. References made in this Agreement, including use of a
pronoun, shall be deemed to include, where applicable, masculine, feminine,
singular or plural, individuals, partnerships or corporations. As used in this
Agreement, "person" shall mean any natural person, corporation, partnership,
court, agency, government, board, commission, trust, estate or other entity or
authority.

      15.11 GOVERNING LAW. This Agreement and the transactions contemplated
hereby shall be construed in accordance with, and governed by, the laws of the
State of Colorado.

                                      -27-
<PAGE>

      15.12 BINDING EFFECT. This Agreement shall be binding upon, and shall
inure to the benefit of, the parties hereto, and their respective successors and
assigns.

      15.13 SURVIVAL. The following shall survive Closing: (i) all post-closing
obligations and indemnities of Seller and Buyer, (ii) Seller's representations
and warranties in Article 6 and, (iii) Buyer's representations and warranties in
Article 7.

      15.14 NO THIRD-PARTY BENEFICIARIES. This Agreement is intended only to
benefit the parties hereto and their respective permitted successors and
assigns.

      15.15 LIMITATION ON DAMAGES. Consistent with Article 14, the parties
hereto expressly waive any and all rights to consequential, special, incidental,
punitive or exemplary damages, or loss of profits resulting from breach of this
Agreement.

      15.16 SEVERABILITY. It is the intent of the parties that the provisions
contained in this Agreement shall be severable. Should any provisions, in whole
or in part, be held invalid as a matter of law, such holding shall not affect
the other portions of this Agreement, and such portions that are not invalid
shall be given effect without the invalid portion.

              [the remainder of this page intentionally left blank]

                                      -28-
<PAGE>

            Executed on the dates set forth in the acknowledgments below.

                                           SELLER:

                                           WILLIAMS PRODUCTION RMT COMPANY

                                           /s/ Joseph N. Jaggers
                                           -------------------------------------
                                           Joseph N. Jaggers
                                           Vice President

                                           BUYER:

                                           BILL BARRETT CORPORATION

                                           /s/ William J. Barrett
                                           -------------------------------------
                                           William J. Barrett
                                           Chief Executive Officer

                                      -29-
<PAGE>

STATE OF COLORADO  )
     CITY AND      ) ss.
COUNTY OF DENVER   )

      The foregoing instrument was acknowledged before me this 27th day of
March, 2002 by Joseph N. Jaggers, as Vice President for Williams Production RMT
Company, a Delaware corporation.

            Witness my hand and official seal.

            My commission expires:  March 17, 2004.

                                           /s/ E. Marks
                                           -------------------------------------
                                           E. Marks, Notary Public
                                           1515 Arapahoe Street
                                           Tower 3, Suite 1000
                                           Denver, Colorado  80202

STATE OF COLORADO  )
     CITY AND      ) ss.
COUNTY OF DENVER   )

      The foregoing instrument was acknowledged before me this 27th day of
March, 2002 by William J. Barrett, as Chief Executive Officer of Bill Barrett
Corporation, a Maryland corporation.

            Witness my hand and official seal.

            My commission expires:  July 2, 2004

                                           /s/ Chrisine Thompson
                                           -------------------------------------
                                           Christine Thompson, Notary Public
                                           1550 Seventeenth Street, Suite 500
                                           Denver, Colorado 80202

                                      -30-<PAGE>

                                                                    EXHIBIT 10.6

                           PURCHASE AND SALE AGREEMENT

                                     BETWEEN

                      INDEPENDENT PRODUCTION COMPANY, INC.

                                SAPPHIRE BAY, LLC

                                JOINTLY AS SELLER

                                       AND

                            BILL BARRETT CORPORATION

                                    AS BUYER

                         DATED EFFECTIVE JANUARY 1, 2003

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                                               <C>
ARTICLE I   PURCHASE AND SALE ...............................................................      1
  1.1    Purchase and Sale ..................................................................      1
  1.2    Assets .............................................................................      1
  1.3    Retained Assets ....................................................................      3
  1.4    Effective Time .....................................................................      3
  1.5    1031 Exchange ......................................................................      3
ARTICLE II  PURCHASE PRICE ..................................................................      4
  2.1    Purchase Price .....................................................................      4
  2.2    Deposit ............................................................................      4
  2.3    Allocation of the Purchase Price ...................................................      4
  2.4    Adjustments to Purchase Price ......................................................      4
  2.5    Annual Contingent Net Profits Payment ..............................................      7
ARTICLE III BUYER'S INSPECTION ..............................................................      7
  3.1    Access to Records ..................................................................      7
  3.2    Access to Properties ...............................................................      7
ARTICLE IV  TITLE MATTERS ...................................................................      7
  4.1    Defensible Title to the Assets .....................................................      8
  4.2    Purchase Price Adjustments for Defective Interests .................................     11
  4.3    Preferential Purchase Rights and Required Consents to Assign .......................     14
ARTICLE V   ENVIRONMENTAL MATTERS ...........................................................     16
  5.1    Definitions ........................................................................     16
  5.2    Environmental Liabilities and Obligations ..........................................     17
  5.3    Environmental Defects less than the Environmental Deductible .......................     18
  5.4    Environmental Defects once the Environmental Threshold is Exceeded .................     18
  5.5    Contested Environmental Defects ....................................................     19
  5.6    Exclusive Remedies .................................................................     19
ARTICLE VI  SELLER'S REPRESENTATIONS AND WARRANTIES .........................................     19
  6.1    Organization and Standing ..........................................................     19
  6.2    Power ..............................................................................     20
  6.3    Authorization and Enforceability ...................................................     20
  6.4    No Liens ...........................................................................     20
  6.5    Liability for Brokers' Fees ........................................................     20
  6.6    No Bankruptcy ......................................................................     20
  6.7    Litigation .........................................................................     20
  6.8    Taxes ..............................................................................     20
  6.9    Wells/Projects in Progress .........................................................     21
  6.10   Material Agreements ................................................................     21
  6.11   Insurance ..........................................................................     21
  6.12   Judgments ..........................................................................     21
  6.13   Casualty Loss ......................................................................     21
  6.14   Accuracy of Information ............................................................     21
  6.15   Compliance with Law ................................................................     21
  6.16   Receipt of Proceeds from the Assets ................................................     22
  6.17   Preferential Rights and Required Consents ..........................................     22
</TABLE>

                                        i

<PAGE>

<TABLE>
<S>                                                                                               <C>
  6.18   Audits .............................................................................     22
ARTICLE VII  BUYER'S REPRESENTATIONS AND WARRANTIES .........................................     22
  7.1    Organization and Standing ..........................................................     22
  7.2    Power ..............................................................................     22
  7.3    Authorization and Enforceability ...................................................     23
  7.4    Liability for Brokers' Fees ........................................................     23
  7.5    Litigation .........................................................................     23
  7.6    Financial Resources ................................................................     23
  7.7    Buyer's Evaluation .................................................................     23
ARTICLE VIII COVENANTS AND AGREEMENTS .......................................................     24
  8.1    Covenants and Agreements of Seller .................................................     24
  8.2    Covenants and Agreements of Buyer ..................................................     26
  8.3    Covenants and Agreements of the Parties ............................................     27
ARTICLE IX   TAX MATTERS ....................................................................     28
  9.1    Apportionment of Tax Liability .....................................................     28
  9.2    Calculation of Tax Liability .......................................................     28
  9.3    Tax Reports and Returns ............................................................     28
  9.4    Sales Taxes ........................................................................     29
  9.5    Tax Forms ..........................................................................     29
ARTICLE X    CONDITIONS PRECEDENT TO CLOSING ................................................     30
  10.1   Seller's Conditions Precedent ......................................................     30
  10.2   Buyer's Conditions .................................................................     30
ARTICLE XI   RIGHT OF TERMINATION AND ABANDONMENT ...........................................     31
  11.1   Termination ........................................................................     31
  11.2   Liabilities Upon Termination .......................................................     31
ARTICLE XII  CLOSING ........................................................................     32
  12.1   Date of Closing ....................................................................     32
  12.2   Place of Closing ...................................................................     32
  12.3   Closing Obligations ................................................................     32
ARTICLE XIII POST-CLOSING OBLIGATIONS .......................................................     33
  13.1   Post-Closing Adjustments ...........................................................     33
  13.2   Records ............................................................................     34
  13.3   Proceeds, Accounts Receivable and Invoices For Property Expenses
         Received After Closing .............................................................     34
  13.4   Limited Warranty of Title ..........................................................     35
  13.5   Insurance and Bonds ................................................................     35
  13.6   Further Assurances .................................................................     35
ARTICLE XIV  INDEMNIFICATION ................................................................     35
  14.1   Buyer's Assumption of Liabilities and Obligations ..................................     35
  14.2   Seller's Retention of Liabilities and Obligations ..................................     36
  14.3   Buyer's Indemnification of Seller ..................................................     36
  14.4   Seller's indemnification of Buyer ..................................................     36
  14.5   Release ............................................................................     36
  14.6   Procedure ..........................................................................     36
  14.7   Limitation on Seller's Indemnity Obligation ........................................     38
</TABLE>

                                       ii

<PAGE>

<TABLE>
<S>                                                                                               <C>
  14.8   No Insurance or Subrogation ........................................................     38
  14.9   Reservation as to Non-Parties ......................................................     38
ARTICLE XV  MISCELLANEOUS ...................................................................     38
  15.1   Schedules and Exhibits .............................................................     39
  15.2   Expenses ...........................................................................     39
  15.3   Notices ............................................................................     39
  15.4   Amendments .........................................................................     40
  15.5   Assignment .........................................................................     40
  15.6   Announcements ......................................................................     40
  15.7   Headings ...........................................................................     40
  15.8   Counterparts/Facsimile Signatures ..................................................     40
  15.9   References .........................................................................     41
  15.10  Governing Law ......................................................................     41
  15.11  Entire Agreement ...................................................................     41
  15.12  Best Knowledge and Reasonable and Good Faith Efforts ...............................     41
  15.13  Binding Effect .....................................................................     41
  15.14  Survival ...........................................................................     41
  15.15  No Third-Party Beneficiaries .......................................................     41
  15.16  Waiver of Compliance with Bulk Transfer Laws .......................................     42
  15.17  Dispute Resolution .................................................................     42
  15.18  Disclaimer of Representations and Warranties .......................................     43
  15.19  No Recording .......................................................................     43
</TABLE>

                                       iii

<PAGE>

                           PURCHASE AND SALE AGREEMENT

                  This Purchase and Sale Agreement (this "Agreement"), dated
February 6, 2003, is by and between Independent Production Company, Inc., a
Colorado corporation ("IPC") and Sapphire Bay LLC, a Delaware limited liability
company ("Sapphire Bay"), 410 Seventeenth Street, Suite 570, Denver, Colorado
80202 (IPC and Sapphire Bay may be referred to collectively as "Seller") and
Bill Barrett Corporation, a Delaware corporation, 1099 18th Street, Suite 2300,
Denver, Colorado 80202 (the "Buyer"). Seller and Buyer may be referred to
individually as a "Party" or collectively as the "Parties." The transaction
contemplated by this Agreement may be referred to as the "Transaction."

                                    RECITALS

         A. Seller owns and desires to sell its working interests in certain oil
and gas properties located in the Powder River Basin of Wyoming, and other oil
and gas properties located elsewhere, all as more particularly described in
Section 1.2 below (collectively, the "Assets").

         B. Buyer has conducted an independent investigation of the nature and
extent of the Assets and is familiar with the development and production of
coalbed methane in the Powder River Basin of Wyoming, and desires to purchase
all of Seller's interest in the Assets pursuant to the terms of this Agreement.

         C. To accomplish the foregoing, the Parties wish to enter into this
Agreement.

                                    AGREEMENT

         In consideration of the mutual promises contained herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Buyer and Seller agree as follows:

                                    ARTICLE I
                                PURCHASE AND SALE

         1.1. Purchase and Sale. Seller agrees to sell and Buyer agrees to
purchase all of Seller's right, title and interest in the Assets under the terms
of this Agreement.

         1.2. The Assets. As used herein, the term "Assets" refers to all of the
Seller's right, title and interest in and to the following:

                  (a) The oil and gas leases described in Exhibit A (the
"Leases"), insofar as said Leases cover the land described in Exhibit A (the
"Land" or "Lands"), together with all the property and rights incident thereto
and the contracts and agreements relating to the Leases and Land, including
without limitation, all operating agreements, exploration agreements, pooling,
communitization and unitization

<PAGE>

agreements, farmout agreements, product purchase and sale contracts,
transportation, processing, treatment or gathering agreements, leases, permits,
rights-of-way, easements, licenses, declarations, orders, contracts, and
instruments in any way relating to the Leases;

                  (b) The oil and gas wells specifically described in Exhibit
A-2 (the "Wells"), together with all injection and disposal wells on the Leases
or Lands or on lands pooled or unitized therewith, and all personal property,
equipment, fixtures, improvements, permits, rights of-way and easements used in
connection with the production, gathering, treatment, processing, storing, sale
or disposal of Hydrocarbons or water produced from the properties and interests
described in subsection (a);

                  (c) The pooling and communitization agreements, declarations
and orders, and all other such agreements relating to the properties and
interests described in subsections (a) and (b) and to the production of
Hydrocarbon, if any, attributable to said properties and interests;

                  (d) All existing and effective sales, purchase, exchange,
gathering, transportation and processing contracts, operating agreements,
balancing agreements, farmout agreements, service agreements, the Field Office
and Yard Lease ("Gillette, Wyoming"), and other contracts, agreements and
instruments, including the Material Agreements described on Exhibit C, insofar
as they relate to the properties and interests described in subsections (a)
through (c);

                  (e) The oil, gas and water gathering, pipeline and
transportation systems (which include, without limitation, the IPC-owned CBM
Gas Pipeline/Gathering Systems described on Exhibit A-3) and all personal
property, equipment, fixtures, improvements, permits, rights-of-way, surface
leases and easements used in connection therewith and all contracts and
agreements relating thereto;

                  (f) The personal property and equipment located in the Field
Office and Yard Inventory listed on Exhibit D; and,

                  (g) The files, records, and data of Seller relating to the
items described in subsections (a), through (f) above (the "Records"), and to
the extent that Seller has the following, the Records shall include, without
limitation, lease records, well records, and division order records; well files;
title records (including abstracts of title, title opinions and memoranda, and
title curative documents related to the Leases and Wells); contracts and
contract files; correspondence; geological, geophysical and seismic records
(subject to applicable third-party licensing restrictions or other restrictions
on disclosure or transfer), current Netherland Sewell Reserve Report prepared as
of January 1, 2003 (the "Reserve Report"); historical production data, revenue,
and operating expense for the three years preceding the Effective Time; maps and
other related information. Seller agrees to provide Buyer with its original
files, and to the extent that Seller has electronic copies of the Records,
Seller agrees to furnish Buyer with such electronic copies; provided that Seller
shall not incur any additional costs reformatting electronic data so that such
data is compatible with Buyer's computer

                                       -2-

<PAGE>

software. The records shall not include any data or information that is subject
to applicable third-party licensing restrictions or other restrictions on
disclosure or transfer.

         1.3. Retained Assets. The Assets shall not include and Seller reserves
and excepts from the sale any interest Seller has in and to overriding royalty
interests burdening the Assets created and filed of record prior to the
Effective Time (collectively, the "Seller ORR"). Buyer acknowledges that Seller
now owns and will continue to own certain other working interests in oil and gas
leases that are not listed on Exhibit B or B-1 or in the Reserve Report, and
that were not described or mentioned in the data room, the Reserve Report, or
any other materials provided to Buyer by Seller (collectively, "Seller's Other
Oil and Gas Interests"). Seller's Other Oil and Gas Interests and the Seller ORR
may be collectively referred to as the "Retained Assets." Seller acknowledges
that Buyer is not selling the Retained Assets, and that the Retained Assets are
not part of the Assets being sold to Buyer in this Transaction. Buyer further
agrees that it will not claim any interest in and to the Retained Assets.

         1.4. Effective Time. The purchase and sale of the Assets shall be
effective as of January 1, 2003, at 12:01 A.M. Mountain Standard Time (the
"Effective Time").

         1.5. 1031 Exchange. Seller reserves the right, at or prior to Closing,
to assign its rights under this Agreement with respect to all or a portion of
the Purchase Price, and that portion of the Assets associated therewith ("1031
Assets"), to a Qualified Intermediary ("QI") (as that term is defined in Section
1.1031(k)-1(g)(4)(v) of the Treasury Regulations) to accomplish this
Transaction, in whole or in part, in a manner that will comply with the
requirements of a like-kind exchange ("Like-Kind Exchange") pursuant to Section
1031 of the Internal Revenue Code of 1986, as amended ("Code"). If Seller so
elects, Seller may assign its rights under this Agreement to the 1031 Assets to
the QI. Buyer hereby (i) consents to Seller's assignment of its rights in this
Agreement with respect to the 1031 Assets, and (ii) if such an assignment is
made, agrees to pay all or a portion of the Purchase Price into the qualified
trust account at Closing as directed in writing by Seller, provided that Seller
shall pay or reimburse Buyer for any and all reasonable administrative or other
costs incurred by Buyer as a result of such consent or agreement. Seller and
Buyer acknowledge and agree that a whole or partial assignment of this Agreement
to a QI shall not release either Party from any of its respective liabilities
and obligations to each other or expand any such respective liabilities or
obligations under this Agreement. Neither Party represents to the other that any
particular tax treatment will be given to either Party as a result of the
Like-Kind Exchange. The Party not participating in the Like-Kind Exchange shall
not be obligated to pay any additional costs or incur any additional obligations
in its sale of the Assets if such costs are the result of the other Party's
Like-Kind Exchange, and the Party participating in the Like-Kind Exchange shall
hold harmless and indemnify the other Party from and against all claims, losses
and liabilities, if any, resulting from such a Like-Kind Exchange.

                                       -3-

<PAGE>

                                   ARTICLE II
                                 PURCHASE PRICE

         2.1. Purchase Price. The purchase price for the Assets shall be
thirty-five million five hundred thousand dollars ($35,500,000.00) (the
"Purchase Price").

         2.2. Deposit. Upon execution of this Agreement, Buyer agrees to pay
Seller an earnest money deposit equal to five percent of the Purchase Price
($1,775,000.00) (the "Deposit") by wire transfer of immediately available funds
into a mutually acceptable escrow account. The Deposit shall be distributed to
Seller and credited to the Purchase Price at Closing, or if this Agreement is
terminated, shall be distributed or retained pursuant to Article XI.

         2.3. Allocation of the Purchase Price. For the purposes of determining
the value of a particular Asset for the purposes of this Agreement, the Purchase
Price allocation among the Assets as set forth for each portion of the Assets
given a "line Item" value on Exhibit B or B-1 shall be applicable, including
without limitation for the purpose of the provisions of this Agreement set forth
in (a) through (f), below. The value allocated to an Asset may be referred to as
the "Allocated Value" for that Asset.

                  (a)      Title Defects (Section 4.2),

                  (b)      Environmental Defects (Section 5.4),

                  (c)      Preferential Rights (Section 4.3(b) and (c)),

                  (d)      Required Consents (Section 4.3(a)),

                  (e)      Remedies (Section 11.2), and

                  (f)      Taxes (Section 9.5).

         2.4. Adjustments to Purchase Price. All adjustments to the Purchase
Price shall be made (i) according to the factors described in this Section, (ii)
in accordance with generally accepted accounting principles as consistently
applied in the oil and gas industry, and (iii) without duplication.

                  (a) Settlement Statements. The Purchase Price shall be
adjusted at Closing pursuant to a "Preliminary Settlement Statement" prepared by
Seller and submitted to Buyer on or before Thursday March 13, 2003 for Buyer's
comment and review, which shall be provided to Seller on or before Monday March
17, 2003. The Preliminary Settlement Statement shall set forth the Closing
Amount and all adjustments to the Purchase Price and associated calculations.
The term "Closing Amount" means the Purchase Price adjusted as provided in this
Section 2.4, using the best information available, less the Deposit. After
Closing, the Purchase Price shall be adjusted pursuant to the Settlement
Statement delivered pursuant to Section 13.1.

                                      -4-

<PAGE>

                  (b) Effective Time Apportionment. Subject to the provisions of
Section 13.3, Seller and Buyer agree that (i) all revenues, costs and expenses,
including Property Expenses (as defined below) will be apportioned between Buyer
and Seller as of the Effective Time, (ii) Seller shall be entitled to any
production revenues or other amounts realized from and accruing to the Assets
attributable to the period of time before the Effective Time, and shall be
liable for the payment of all costs and expenses, including Property Expenses,
attributable to the Assets for the period of time before to the Effective Time
and (iii) Buyer shall be entitled to any production revenues or other amounts
realized from and accruing to the Assets attributable to the period of time
after the Effective Time, and shall be liable for the payment of all costs and
expenses including Property Expenses, attributable to the Assets for the period
of time after the Effective Time.

                  (c) Property Expenses. The term "Property Expenses" shall mean
all capital expenses, joint interest billings, lease operating expenses, lease
rental and maintenance costs, royalties, taxes (as defined and apportioned
pursuant to Article IX), drilling expenses, dewatering expenses, completion
expenses, workover expenses, expenses associated with environmental analysis or
studies, permitting costs, and any other exploration, development or maintenance
expenditures chargeable under applicable operating agreements or other
agreements consistent with the standards established by the Council of Petroleum
Accountant Societies of North America that are attributable to the Assets prior
to the Effective Time or after the Effective Time, as applicable. Property
Expenses shall not include geological and geophysical expenses and general and
administrative expenses in IPC's Denver office attributable to the Assets after
the Effective Time.

                  (d) Upward Adjustments. The Purchase Price shall be adjusted
upward by the following:

                           (1) an amount equal to all proceeds (net of royalty
         and production taxes not otherwise accounted for hereunder) received
         by and retained by Buyer from the sale of Hydrocarbons attributable to
         the period of time before the Effective Time;

                           (2) an amount equal to all expenses attributable to
         the Assets after the Effective Time that were paid by Seller (all to be
         apportioned as of the Effective Time except as otherwise provided),
         including without limitation, Property Expenses, prepaid insurance
         costs, prepaid utility charges, prepaid rentals and royalties,
         including lease rentals, prepaid drilling costs (to be apportioned as
         of the Effective Time based on drilling days) and prepaid Taxes (to be
         apportioned as of the Effective Time pursuant to Article IX);

                           (3) an amount equal to the value of Seller's share of
         all oil in storage tanks at the Effective Time to be calculated as
         follows: The value shall be the product of (i) the volume in each
         storage tank (attributable to Seller's net revenue interest) as of the
         Effective Time as shown by the actual gauging reports multiplied by
         (ii) the Equivalent Daily Price - Wyoming Sweet for December 2002

                                      -5-

<PAGE>

         production, plus $2.00, less applicable Taxes and other adjustments for
         other matters that were made or would have been made by the purchasers
         of such production consistent with past practices; provided, however,
         that the adjustment contemplated by this subsection (3) shall be made
         only to the extent that Seller does not receive and retain the
         proceeds, or portion thereof, attributable to the pre-Effective Time
         oil in the storage tanks; and

                           (4) an amount equal to the sum of all Interest
         Addition Adjustments (as defined in Section 4.3); and;

                           (5) an amount equal to $37,500 per month for Buyer's
         operation of the Assets from the Effective Time until Closing (prorated
         for any partial months).

                  (e) Downward Adjustments. The Purchase Price shall be adjusted
downward by the following:

                           (1) an amount equal to the sum of all Defect
         Adjustments (as defined and in accordance with subsection 4.2(c));

                           (2) the amount of all direct and actual expenses
         attributable to the Assets, including, without limitation, the Property
         Expenses, that remain unpaid by Seller, or that have been paid by
         Buyer, that are attributable to the period prior to the Effective Time;

                           (3) an amount equal to the sum of all Environmental
         Defect Adjustments (as defined in Section 5.4);

                           (4) an amount equal to the sum of all Defect
         Adjustments for Excluded Assets (as defined in subsection 4.2(c)) and
         Exclusion Adjustments (as defined in Sections 4.4), 4.2(c)(2)(ii) and
         5.4; and

                           (5) all proceeds from the production of hydrocarbons
         subsequent to the Effective Time that are received and retained by the
         Seller.

                  (f) Well and Pipeline Imbalance Adjustments. In addition to
the foregoing, the Purchase Price shall be adjusted downward or upward, as
appropriate, by an amount equal to $2.00 (less taxes) per MmBTU (net of royalty)
for the well and pipeline gas imbalances existing as of the Effective Time. Such
imbalances are estimated to be as stated in Schedule 2.4(f) and will be subject
to adjustment at Closing and final adjustment under Section 13.1 based upon the
best information then available.

         2.5 Annual Contingent Net Profits Payment. In addition to the Purchase
Price, Buyer shall pay to Seller as part of the total consideration for the
Assets, the Annual Contingent Net Profits Payment ("ACNPP") described in
Exhibit I.

                                       -6-

<PAGE>

                                   ARTICLE III
                               BUYER'S INSPECTION

         3.1. Access to Records. Subject to Section 8.3(a), prior to Closing,
Seller will make the Records available to Buyer and its representatives for
inspection and review at the offices of Seller during Seller's normal business
hours for the purpose of permitting Buyer to perform its due diligence review.
Seller shall permit Buyer to inspect the Records only to the extent, in each
case, that Seller may do so without violating any obligation of confidence or
contractual commitment of Seller to a third party. Subject to the consent and
cooperation of operators and other third parties, Seller will assist Buyer in
Buyer's efforts to obtain, at Buyer's expense, such additional information from
such parties as Buyer may reasonably desire, to the extent in each case that
Seller may do so without violating legal constraints or any obligation of
confidence or other contractual commitment of Seller to a third party. Except
for the representations and warranties contained in this Agreement, Seller makes
no warranty or representation of any kind as to the Records or any information
contained therein, and Buyer agrees that any conclusions drawn therefrom shall
be the result of its own independent review and judgment.

         3.2. Access to Properties. Prior to Closing, if Buyer so requests in
writing, Seller will allow Buyer to conduct, at Buyer's sole risk and expense,
on-site inspections of the Assets during reasonable business hours. If Seller is
not the operator of the Assets, Seller will use its reasonable efforts to cause
the operator to grant such access to Buyer. In connection with any such on-site
inspections, Buyer agrees not to interfere with the normal operation of the
Assets and agrees to comply with all requirements of the operator. If Buyer or
its agents prepares an environmental assessment of any Asset, at Buyer's sole
expense, Buyer will furnish copies thereof to Seller. The Parties shall execute
a "common undertaking" letter regarding the confidentiality of environmental
assessments where appropriate. In connection with the grant of access to the
Assets, Buyer represents that it is adequately insured and, except to the extent
caused by Seller's gross negligence or willful misconduct, waives, releases and
agrees to indemnify Seller and its parent, affiliates, directors, officers,
shareholders, employees, agents, partners, members, and representatives against
all claims for injury to, or death of, persons or for damage to property arising
in any way from the access afforded to Buyer hereunder or the activities of
Buyer. This waiver, release and indemnity by Buyer shall survive termination of
this Agreement.

                                   ARTICLE IV
                                  TITLE MATTERS

         4.1. Defensible Title to the Assets.

                  (a) Defensible Title.

                           (1) Assets Listed on Exhibit B. The term "Defensible
         Title" with respect to the portion of the Assets that are given an
         Allocated Value on

                                       -7-

<PAGE>

         Exhibit B means such title that, subject to and except for Permitted
         Encumbrances: (i) entitles Seller to receive not less than the net
         revenue interest for the interest set forth on Exhibit B ("NRI"); (ii)
         obligates Seller to bear costs and expenses relating to the
         maintenance, development, operation and the production of Hydrocarbons
         from the interest set forth on Exhibit B in an amount not greater than
         the corresponding working interest set forth in Exhibit B ("WI"); and
         (iii) is free and clear of encumbrances and liens.

                           (2) Assets Listed on Exhibit B-1. The term
         "Defensible Title" with respect to the portion of the Assets that are
         listed on Exhibit B-1 means such title, that, subject to and except for
         Permitted Encumbrances: (i) entitles Seller to receive the Net Acres as
         set forth on Exhibit B-1 (ii) is free and clear of encumbrances and
         liens; provided, however, with respect to the Assets on Exhibit B-1,
         Seller's title shall be deemed Defensible Title unless Buyer provides
         Seller with written evidence that such title either has failed or is
         likely to fail.

                  (b) Permitted Encumbrances. The term "Permitted Encumbrances"
shall mean:

                           (1) lessors' royalties, overriding royalties, net
         profits interests, production payments, reversionary interests and
         similar burdens if the net cumulative effect of such burdens does not
         operate to reduce the NRI for the formation upon which an allocated
         value has been established as set forth in Exhibit B or B-1;

                           (2) subject to the provisions of Section 4.4, any
         preferential rights to purchase and required third party consents to
         assignments of contracts or property and similar agreements;

                           (3) liens for taxes or assessments not yet due and
         delinquent or, if delinquent, that are being contested in good faith in
         the normal course of business;

                           (4) rights of reassignment upon the surrender or
         expiration of any Lease;

                           (5) easements, rights-of-way, servitudes, permits,
         surface leases and other rights with respect to surface operations, on,
         over or in respect of any of the properties or any restriction on
         access thereto that do not materially interfere with the operation of
         the affected Asset as has been conducted in the past;

                           (6) such Title Defects (as defined in subsection
         4.1(c)) which have been cured or Buyer has waived;

                                       -8-

<PAGE>

                           (7) the terms and conditions of the Material
         Agreements to the extent such terms and conditions do not (i) cause the
         present NRI to be less than or the present WI to be more than as set
         forth in Exhibit B or (ii) cause the net acres to less than as
         represented B-1 for the applicable Asset (other than reversions,
         back-ins, unit revisions and other events expressly contemplated by
         such agreements);

                           (8) materialmen's, mechanics', repairmen's,
         employees', contractors', operators' or other similar liens or charges
         arising in the ordinary course of business incidental to construction,
         maintenance or operation of the Assets (i) if such liens and charges
         have not been filed pursuant to law and the time for filing such liens
         and charges has expired, (ii) if filed, such liens and charges have
         not yet become due and payable or payment is being withheld as provided
         by law, or (iii) if their validity is being contested in good faith by
         appropriate action;

                           (9) rights reserved to or vested in any federal,
         state, local, tribal or foreign governmental body, authority or agency
         to control or regulate any of the Assets in any manner; and all
         applicable laws, rules, regulations and orders of general applicability
         in the area of the Assets;

                           (10) liens arising under operating agreements,
         unitization and pooling agreements and production sales contracts
         securing amounts not yet delinquent or, if delinquent, being contested
         in good faith in the ordinary course of business;

                           (11) except as listed on Exhibit C as a Material
         Agreement, all calls on or preferential rights to purchase production
         at a price (adjusted for quality, transportation and location) no less
         than average area spot prices with respect to gas;

                           (12) the litigation and claims listed on Schedule
         6.7;

                           (13) The Mortgage in favor of U.S. Bank, which will
         be released at Closing;

                           (14) all documents and matters of record as of the
         Effective Time, unless the document or matter has properly been
         identified as a Title Defect in a Title Defect Notice; and

                           (15) As to the Assets on Exhibit B-1, routine title
         curative matters expected to be encountered in a non-producing property
         in the area and that are customarily cured in the normal course of
         development of non-producing properties without material expense and
         not reasonably anticipated to cause a material impairment of Buyer's
         ability to develop the interest in question.

                                       -9-

<PAGE>

                  (c) Title Defect. The term "Title Defect" means any lien,
encumbrance, adverse claim, encroachment, defect in or objection to real
property title, excluding Permitted Encumbrances, that alone or in combination
with other defects renders Seller's title less than Defensible Title.
Notwithstanding the foregoing, the following shall not be considered Title
Defects:

                           (1) defects based solely on (i) lack of information
         in the Seller's files, or (ii) references to a document(s) if such
         document(s) is not in Seller's files;

                           (2) defects in the early chain of title consisting of
         the mere failure to recite marital status in a document or omissions of
         successors of heirship or estate proceedings, unless Buyer provides
         affirmative evidence that such failure or omission has resulted in
         another party's actual and superior claim of title to the relevant
         Asset;

                           (3) defects arising out of lack of survey, unless a
         survey is required by applicable laws or regulations;

                           (4) defects arising out of lack of corporate or other
         entity authorization unless Buyer provides affirmative evidence that
         the action was not authorized and results in another party's actual and
         superior claim of title to the Asset;

                           (5) defects that are defensible by possession under
         applicable statutes of limitation for adverse possession or for
         prescription;

                           (6) defects based on failure to record Leases issued
         by the BLM or any state or federal forms of assignments of record title
         or operating rights in such Leases, in the real property or other
         county records of the county in which such Asset is located;

                           (7) defects based on a gap in Seller's chain of title
         in the BLM records as to federal leases, in the state's records as to
         state leases or in the county records as to fee leases, unless such gap
         is affirmatively shown to exist in such records by an abstract of
         title, title opinion or landman's title chain, which documents shall be
         included in a Title Defect Notice; and

                           (8) defects relating to gas balancing issues.

                  (d) Allocated Value. If an Asset has not been given an
Allocated Value, or if the Asset's Allocated Value is $5,000 or less, Seller
shall be deemed to have Defensible Title to such Asset.

                                      -10-

<PAGE>

         4.2. Purchase Price Adjustments for Defective Interests.

                  (a) Defective interest; Threshold Value. "Defective Interest"
means an Asset (i.e., a line item on Exhibit B or B-1) affected by a Title
Defect that reduces the Allocated Value of the affected Asset by more than
$5,000.00. The amount by which the Allocated Value of a Defective Interest has
been reduced by a Title Defect (the "Defect Value") shall be calculated pursuant
to subsection 4.2(d). For purposes of this Section 4.2(a), "Threshold Value"
shall mean that the total Defect Values for all Defective Interests reduces the
Allocated Value of the affected Asset(s) by more than $100,000 in the aggregate
for all affected Assets. Buyer shall not be entitled to give notice pursuant to
Section 4.2(b) or be entitled to adjustments pursuant to Section 4.2(d) unless
the Threshold Value has been reached or exceeded.

                  (b) Title Defect Notice. Buyer shall give Seller written
"Title Defect Notice" as soon as possible but no later than on or before Monday
March 10, 2003 at 5:00 p.m. Mountain Time. This notice must be in writing and
satisfy the following conditions precedent: the Title Defect Notice must
include (i) a description of each Defective Interest; (ii) the basis for each
Defective Interest, and, if the basis is derived from any document, a copy of
such document (or pertinent part thereof) shall be attached or if the basis is
derived from any gap in Seller's chain of title, the documents preceding and
following the gap shall be attached; (iii) the Allocated Value of the affected
Asset; and (iv) Buyer's good faith estimate of the Defect Value and the
computations upon which Buyer's estimate is based.

                  (c) Defect Adjustments.

                           (i) Subject to subsections 4.2(a) and (b), if an
                  Asset is a Defective Interest, the Purchase Price will (so
                  long as the Threshold Value is exceeded and subject to the
                  limitation in the next succeeding sentence) be reduced under
                  Section 2.4 by the corresponding Defect Value (which reduction
                  is called a "Defect Adjustment") unless, at Seller's election,
                  (i) the basis for treating such property as a Defective
                  Interest has been removed by Seller at its sole cost and
                  expense prior to Closing, (ii) Buyer agrees to waive the
                  relevant Title Defect, (iii) Seller elects on or before
                  Closing to cure such Title Defect no later than 90 days after
                  Closing, (iv) Seller elects on or before Closing to indemnify
                  Buyer against any loss attributable to the relevant Title
                  Defect, or (v) Seller elects on or before Closing to retain
                  the affected property (the "Excluded Asset") as of the
                  Effective Time in which case the Defect Adjustment shall equal
                  the Allocated Value of the Excluded Asset. If Seller elects
                  not to pursue any of its options in the previous sentence, the
                  Purchase Price shall be adjusted in the amount of the
                  aggregate of all Defect Adjustments (other than Defect
                  Adjustments for Excluded Assets), net of Interest Addition
                  Adjustments.

                           (ii) If Seller elects to cure the applicable Title
                  Defect post-Closing, then Buyer shall, pending such
                  post-Closing period, withhold and

                                      -11-

<PAGE>

                  retain from the Purchase Price payable at Closing an amount
                  equal to the Title Defect Value attributable to the affected
                  Asset and Seller shall not assign the affected Asset to Buyer
                  at Closing.

                                    (A) If Seller cures the applicable Title
                           Defect to Buyer's reasonable satisfaction within the
                           90-day time period (or such longer period as may be
                           agreed to by the Parties), Buyer shall pay to Seller
                           the Title Defect Value attributable to the affected
                           Asset and Seller shall assign such Asset to Buyer.

                                    (B) If Seller elects to cure the applicable
                           Title Defect post-Closing, but does not cure the
                           applicable Title Defect to Buyer's reasonable
                           satisfaction within the 90 day time period (or such
                           longer period as may be agreed to by the Parties),
                           Buyer may waive the applicable Title Defect, or if
                           Buyer does not waive the Title Defect, then, at
                           Seller's election, (i) the Purchase Price shall be
                           adjusted for the Title Defect Value of the affected
                           Asset in accordance with the terms of this Agreement
                           or (ii) Seller may elect to treat the affected Asset
                           as an Excluded Asset. If Seller elects to treat the
                           affected Asset as an Excluded Asset, Seller will
                           retain the Excluded Asset and the Allocated Value of
                           the Excluded Asset will be a credit to Buyer in the
                           Settlement Statement. If the Title Defect is not
                           cured and Seller elects to adjust the Purchase Price
                           for the Title Defect and there is a dispute
                           concerning the Defect Value, the adequacy of Seller's
                           title curative material, the Parties agree to submit
                           the dispute to arbitration under Section 15.17.

                  (d) Defect Value. In determining which portion of a Asset is a
Defective Interest, it is the intent of the Parties to include, to the extent
possible, only that portion of the Asset materially and adversely affected by
the defect or basis for such Asset being treated as a Defective Interest. The
Defect Value may not exceed the Allocated Value of the Asset and shall be
determined by the Parties in good faith taking into account all relevant
factors, including without limitation, the following:

                           (1) The Allocated Value of the affected Asset;

                           (2) The potential for or actual reduction in the NRI
         of the Defective Interest, or the potential for or actual increase in
         the WI to the extent such increase is not accompanied by a
         corresponding increase in NRI;

                           (3) The present value of the future income expected
         to be produced therefrom, as set forth in Exhibit B and Exhibit B-1;

                           (4) If the Title Defect represents only a possibility
         of title failure, the probability that such failure will occur;

                           (5) The legal effect of the Title Defect;

                                      -12-

<PAGE>

                           (6) If the Title Defect is a lien or encumbrance on
         the property, the cost of removing such lien or encumbrance; and

                           (7) Whether Seller has received proceeds of
         production from the Defective Interest, consistent with the NRI set
         forth on Exhibit B or B-1, for the last two years without interruption
         or challenge based on the Title Defect.

         4.3. Interest Additions. Promptly on discovery at any time prior to
Closing, Buyer or Seller, whichever is the discovering Party, shall in good
faith notify the other of any interest that would be an Asset hereunder, but
that is not listed on Exhibits A, A-2, A-3, B or B-1, including any interest
that entitles Seller to receive more than the NRI set forth in Exhibit B or more
net acres than are listed on Exhibit B-1, or obligates Seller to bear costs and
expenses in an amount less than the WI set forth in Exhibit B and that increases
the Allocated Value of the affected Asset by more than $5,000 (collectively,
"Interest Additions"). Buyer acknowledges and agrees to comply with the
affirmative obligation set forth in the preceding sentence. The Party
discovering the Interest Additions must give the other Party written notice of
Interest Additions as soon as possible, but in no event later than on or before
Monday March 10, 2003 at 5:00 p.m. Mountain Time. This notice must be in writing
and must include (i) a description of each Interest Addition, (ii) the basis for
each Interest Addition, (iii) the Allocated Value of the Asset affected by the
Interest Addition, and (iv) the value of the Interest Addition ("Value of
Interest Addition") and the computations upon which such Party's belief is
based. The Value of the Interest Addition shall be determined by the Parties in
good faith taking into account all relevant factors. The Purchase Price shall be
increased for Interest Additions only to the extent that the aggregate of the
Value of all Interest Additions net of the sum of all Title Defect Values for
all of the Assets exceeds the Title Threshold (with the amount of such
adjustment being the "Interest Addition Adjustment") and the Purchase Price will
be increased in accordance with Section 2.4 by such an amount.

         4.4. Preferential Purchase Rights and Required Consents to Assign.
Seller shall use its best efforts to obtain all "Required Consents" (as defined
below) and to give notices required in connection with preferential purchase
rights prior to Closing. If Buyer discovers other affected Assets during the
course of Buyer's due diligence activities, Buyer shall notify Seller
immediately and Seller shall use its best efforts to obtain such Required
Consents or obtain waivers and to give the notices required in connection with
the preferential rights prior to Closing. The preferential purchase rights and
required consents affecting the Assets are listed on Exhibit H.

                  (a) Required Consents. Except for consents and approvals which
are customarily obtained post-Closing and those consents which would not
invalidate the conveyance of the Assets, if a necessary consent to assign any
Lease has not been obtained as of the Closing that would invalidate the
conveyance of the Asset (a "Required Consent"), then the Parties agree to choose
one of the following options:

                                      -13-

<PAGE>

                           (1) The portion of the Assets for which such Required
         Consent has not been obtained shall not be conveyed at the Closing, the
         Allocated Value for that Asset shall not be paid to Seller, and Seller,
         with Buyer's assistance, shall use its reasonable efforts to obtain
         such Required Consent as promptly as possible following Closing. If
         such Required Consent has been obtained as of the Settlement Date,
         Seller shall convey the affected Asset to Buyer effective as of the
         Effective Time and Buyer shall pay Seller the Allocated Value of the
         affected Asset, less any proceeds from the affected Asset attributable
         to the period of time after the Effective Time received and retained by
         Seller (net of any Property Expenses paid by Seller attributable to
         such period). If such Required Consent has not been obtained as of the
         Settlement Date, the affected Asset shall be deemed to be an Excluded
         Asset and Seller shall retain such Asset and the Purchase Price shall
         be deemed to be reduced by an amount equal to the Allocated Value of
         the particular Asset (with such adjustment being an "Exclusion
         Adjustment"). Buyer shall reasonably cooperate with Seller in obtaining
         any Required Consent including providing assurances of reasonable
         financial conditions, but Buyer shall not be required to expend funds
         or make any other type of financial commitments a condition of
         obtaining such Required Consent.

                           (2) If Buyer agrees to indemnify, defend and hold
         harmless Seller from and against any and all damages, liability,
         financial loss (including loss of the lease, interest or portion of the
         Asset in question) or Losses resulting from the assignment in question,
         Seller will assign at Closing the portion of the Assets for which such
         Required Consent has not been obtained and Buyer shall pay Seller the
         Allocated Value for that Asset. Seller, with Buyer's assistance, agrees
         to use its reasonable efforts to obtain such Required Consent as
         promptly as possible following Closing and Buyer agrees to cooperate
         with Seller in obtaining any Required Consent, but Buyer shall not be
         required to expend funds or make any other type of financial
         commitments a condition of obtaining such Required Consent. If such
         Required Consent has not been obtained as of the Settlement Date, then
         (i) Buyer may elect to re-convey the affected Asset to Seller effective
         as of the Effective Time, and, receive a refund of the Allocated Value
         attributable to such Asset (net of the revenues and Property Expenses
         received and expended by Buyer with respect to such Asset during the
         period of its ownership) and indemnify Seller from and against all
         Losses incurred directly or indirectly by Seller as a result of the
         assignment, or (ii) Buyer may continue to own the affected Assets and
         continue to indemnify Seller from and against all Losses incurred
         directly or indirectly by Seller as a result of the assignment, without
         limitation as to time or amount.

                  (b) Preferential Purchase Rights. Prior to Closing, if any of
such persons asserting a preferential purchase right notifies Seller that it
intends to consummate the purchase of that portion of the Assets to which it
holds a preferential purchase right pursuant to the terms and conditions of such
notice and this Agreement, then such Assets shall be excluded from the Assets
identified in this Agreement and the Purchase Price shall be reduced by the
Allocated Values of such Assets; provided,

                                      -14-

<PAGE>

however, that if the holder of such preferential right fails to consummate the
purchase of such Assets on the Closing Date, then Seller shall promptly so
notify Buyer, and Seller shall sell to Buyer, and Buyer shall purchase from
Seller, the Assets to which the preferential purchase right was asserted in
accordance herewith for the Allocated Values of such Assets. All Assets for
which a preferential purchase right has not been asserted prior to Closing by
the holder of such right, or with respect to which closing does not occur on or
before the Closing Date following the assertion of a preferential purchase
right, shall be sold to Buyer at Closing pursuant to the provisions of this
Agreement.

                  (c) Preferential Purchase Rights After Closing. With respect
to any Assets for which a preferential purchase right is exercised within
eighteen months after the Closing Date, Buyer shall have the option of either:
(i) reassigning the subject Asset to Seller, or (ii) assuming the responsibility
and liability to reach a settlement with the holder of such preferential
purchase right. In the event Buyer notifies Seller that Buyer elects to reassign
to Seller the Asset subject to the preferential purchase right, Seller shall
return the Allocated Value of the affected Assets to Buyer. Thereafter, Buyer
and Seller shall use their best efforts to enter into an arrangement whereby
Seller agrees to convey Buyer an interest in the affected property so that Buyer
will be able to realize the same economic benefit of the affected Assets as
Buyer would have realized it if retained ownership of said Assets, taking into
consideration any investment made by Buyer and further development of the Assets
by Buyer. Upon entering into such agreement, Buyer shall pay Seller the
Allocated Value of the affected Assets, and Buyer shall operate the affected
Assets after such transactions, and indemnify Seller from all liabilities and
obligations associated with such operations.

                  (d) Exclusive Remedies. The rights and remedies granted each
Party in this Section 4.4 are the exclusive rights and remedies against the
other Party related to any preferential purchase rights and Required Consents.

                                    ARTICLE V
                              ENVIRONMENTAL MATTERS

         The provisions of this Article apply only to the environmental matters
associated with the Assets as the result of oil and gas operations on the Land.

         5.1. Definitions. For the purposes of the Agreement, the following
terms shall have the following meanings:

         "Environmental Consultant" means a third party environmental consultant
experienced in conducting Phase I environmental assessments on oil and gas
properties similar to the Assets.

         "Environmental Defect" means a condition in, on or under the Assets
(including, without limitation, air, land, soil, surface and subsurface strata,
surface water and ground water) that causes an Asset to be in violation of an
Environmental Law or that is

                                      -15-

<PAGE>

the basis for a claim by a third party that such condition has caused and/or
will cause damage to such third party, based on common law or any statute, and
the Environmental Defect Value must exceed $5,000 per condition net to Seller's
interest. The fact that the Assets are subject to the Power River Basin ElS, the
Big Porcupine CBM Project Environmental Assessment and other studies required by
governmental agencies, shall not be considered an Environmental Defect.

         "Environmental Defect Notice" means a notice given by Buyer to Seller
alleging an Environmental Defect. This notice must be in writing and satisfy the
following conditions precedent: (i) name the affected Asset, (ii) describe the
Environmental Defect in reasonable detail, (iii) set forth the estimated
Environmental Defect Value substantiated in writing by an Environmental
Consultant, (iv) set forth reasonable factual substantiation for the defect
supporting Buyer's conclusion and (v) it must be received by Seller on before
Monday March 10, 2003 at 5:00 p.m. Mountain Time.

         "Environmental Defect Value" means for a particular Environmental
Defect, the costs to remediate that Environmental Defect plus the "actual Losses
incurred or expected to be incurred" by the owner of the Asset in question as a
result of the Environmental Defect. As used in the preceding sentence, "actual
Losses incurred or expected to be incurred" means Losses (as defined herein)
reasonably anticipated to be incurred as evidenced by written demands, written
actions or penalties imposed or threatened in writing to be imposed or other
reasonable evidence.

         "Environmental Laws" shall mean any federal, tribal, state, local or
foreign law (including common law), statute, rule, regulation, requirement,
ordinance and any writ, decree, bond, authorization, approval, license, permit,
registration, binding criteria, standard, consent decree, settlement agreement,
judgment, order, directive or binding policy issued by or entered into with a
governmental authority pertaining or relating to: (a) pollution or pollution
control; (b) protection of human health from exposure to Pollutants or
protection of the environment; (c) employee safety in the workplace; or (d) the
management, presence, use, generation, processing, extraction, treatment,
recycling, refining, reclamation, labeling, transport, storage, collection,
distribution, disposal or release or threat of release of Pollutants.
"Environmental Laws" shall include, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. Section 9601
at seq., the Solid Waste Disposal Act (as amended by the Resource Conservation
and Recovery Act), 42 U.S.C. Section 6901 et seq., the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1801 et seq., the Toxic Substances Control
Act, 15 U.S.C. Section 2601 et seq., the Federal Water Pollution Control Act, 33
U.S.C. Section 1251 et seq., the Federal Safe Drinking Water Act, 42 U.S.C.
Sections 300f-300, the Federal Air Pollution Control Act, 42 U.S.C. Section
7401 et seq., the Oil Pollution Act, 33 U.S.C. Section 2701 et seq., the
Occupational Safety and Health Act, 29 U.S.C. Section 651 et seq., the
Endangered Species Act and the regulations and orders respectively promulgated
thereunder, each as amended, or any equivalent or analogous state or local
statutes, laws or ordinances, any regulation promulgated thereunder and any
amendments thereto.

                                      -16-

<PAGE>

         "Environmental Threshold" shall mean that the total Environmental
Defect Values for all Environmental Defects reduces the Allocated Value of the
affected Asset(s) by more than $100,000 in the aggregate for all affected
Assets. Buyer shall not be entitled to give notice or to adjustments pursuant to
this Section V unless the Environmental Threshold has been reached or exceeded.

         "Pollutants" shall mean, without limitation, any hazardous substance or
any other substance, material or waste, regardless of its form or nature, the
management, presence, use, generation, processing, extraction, treatment,
recycling, refining, reclamation, labeling, transport, storage, collection,
distribution, disposal or release or threat of release of which is regulated by
Environmental Laws.

         "Remediation" means actions taken to correct an Environmental Defect or
otherwise required to remediate in compliance with applicable law, as
recommended in writing by an Environmental Consultant.

         5.2. Environmental Liabilities and Obligations.

                  (a) Retained Environmental Liabilities. Commencing at Closing,
Seller agrees to retain and pay, perform, fulfill and discharge all claims,
cost, expenses, liabilities and obligations accruing or relating to and release
Buyer (but no other third parties) from all Losses attributable to and relating
to Environmental Defects for which Seller receives (1) a timely Environmental
Defect Notice or (2) a notice from Buyer (containing requirements (i) through
(iv) of an Environmental Defect Notice) at any time within 18 months after
the Closing Date, if such notice satisfies the following conditions precedent
(i) the defect affects proved developed producing Assets (as set forth in the
Reserve Report), (ii) the defect is evidenced by a third party claim (i.e. a
claim made by a party unaffiliated with Buyer), and (iii) the defect is the
result of Seller's ownership or operation of the Assets prior to Closing (with
the matters referred to in (1) and (2) being collectively, "Retained
Environmental Liabilities"). The Environmental Threshold shall apply separately
to Environmental Defects asserted before Closing (set forth in the previous
sentence as item (1)), and Environmental Defects asserted after Closing (set
forth in the previous sentence as item (2)).

                  (b) Assumed Environmental Liabilities. Except for Retained
Environmental Liabilities, commencing at Closing, and subject to the provisions
of Article XIV, Buyer agrees to assume and pay, perform, fulfill and discharge
all claims, cost, expenses, liabilities and obligations accruing or relating to
and release Seller (but no other third parties) from all Losses relating to
environmental conditions in, on or under the Assets attributable to the period
of time after the Effective Time (collectively, "Assumed Environmental
Liabilities").

         5.3. Environmental Defects less than the Environmental Threshold. If
the aggregate Environmental Defect Values of all Environmental Defect Notices
timely delivered to Seller is less than or equals the Environmental Threshold of
$100,000, net to Seller's interest, then the Environmental Defects identified in
such notices will not be Retained Environmental Liabilities; accordingly,
Seller will have no obligation hereunder

                                      -17-

<PAGE>

with respect thereto and Buyer agrees to assume, and release Seller from, the
obligations with respect thereto as part of the Assumed Environmental
Liabilities. The "Environmental Threshold of $100,000, net to Seller's interest"
referenced in the preceding sentence is a threshold and not a deductible.

         5.4. Environmental Defects once the Environmental Threshold is
Exceeded. If the aggregate Environmental Defect Values of all Environmental
Defect Notices timely delivered to Seller exceeds the Environmental Threshold,
then Seller shall be liable for any and all Losses attributable thereto. For
those Environmental Defects not contested by Seller, where the aggregate of
Environmental Defect Values exceeds the Environmental Threshold, Seller shall
elect one of the following options: (i) pay Buyer no later than 10 days
following the delivery of the applicable Environmental Defect Notice(s) (subject
to Section 5.5) Buyer's estimate of the Environmental Defect Value, in which
event Buyer shall release Seller from any further Retained Environmental
Liability relating to the Environmental Defects so satisfied, or (ii) elect to
retain the affected Asset as an Excluded Asset and reduce the Purchase Price by
the affected Asset's Allocated Value. Upon obtaining Buyer's prior written
consent, Seller may elect a third option as follows: (iii) remediate the
condition on the affected Assets comprising the specified Environmental
Defect(s) as promptly as practicable (and retain its obligation to indemnify and
defend Buyer from any Losses relating to such Environmental Defects), such
remediation to be to Buyer's reasonable satisfaction and consistent with
Environmental Laws.

         5.5. Contested Environmental Defects. If Seller contests the existence
of an Environmental Defect or the Environmental Defect Value, Seller shall
notify Buyer in writing on or before Monday March 17, 2003 ("Rejection Notice").
The Rejection Notice shall state with reasonable specificity the basis of the
rejection of the Environmental Defect or the Environmental Defect Value. Within
2 business days of receipt of the Rejection Notice, representatives of Buyer and
Seller knowledgeable in environmental matters shall meet and, either (i)
mutually agree to reject the particular Environmental Defect or (ii) agree on
the validity of such Environmental Defect and the Environmental Defect Value. If
the Parties cannot agree on either options (i) or (ii) in the preceding
sentence, the Environmental Defect and/or the Environmental Defect Value subject
to the Rejection Notice shall be resolved in accordance with the arbitration
procedures set forth in Section 15.7. If Seller fails to timely deliver a
Rejection Notice, Seller shall be deemed to have accepted the validity of the
Environmental Defect and Buyer's estimate of the Environmental Defect Value, and
shall be deemed to have waived its own option to contest the validity of the
Environmental Defect.

         5.6. Exclusive Remedies. The rights and remedies granted each Party in
this Article together with the indemnifications set forth in Article XIV are the
exclusive rights and remedies against the other Party related to any
Environmental Matter or Environmental Defect.

                                   ARTICLE VI
                     SELLER'S REPRESENTATIONS AND WARRANTIES

                                      -18-

<PAGE>

         Seller makes the following representations and warranties to Buyer as
of the date hereof:

         6.1. Organization and Standing.

              (a) IPC is a corporation duly organized, validly existing and
in good standing under the laws of the state of Colorado and is duly qualified
to carry on its business in each state where failure to be so qualified could
materially adversely affect the Assets or consummation of the Transaction.

              (b) Sapphire Bay is a Delaware limited liability company duly
organized, validly existing and in good standing under the laws of the state of
Delaware and is duly qualified to carry on its business in each state where
failure to be so qualified could materially adversely affect the Assets or
consummation of the Transaction.

         6.2. Power. Each of the companies that comprise Seller has all
requisite power and authority to carry on its business as presently conducted
and to enter into this Agreement. The execution and delivery of this Agreement
and the consummation of the Transaction does not, and the fulfillment of and
compliance with the terms and conditions hereof will not, as of Closing,
violate, or be in conflict with, any material provision of the governing
documents, when applicable, or any material provision of any agreement or
instrument to which the Seller is a party or by which it is bound, or, to the
Seller's knowledge, any judgment, decree, order, statute, rule or regulation
applicable to Seller or the Assets.

         6.3. Authorization and Enforceability. The execution, delivery and
performance of this Agreement and the Transaction have been duly and validly
authorized by all requisite action on Seller's part. This Agreement constitutes
Seller's legal, valid and binding obligation, enforceable in accordance with its
terms, subject, however, to the effects of bankruptcy, insolvency,
reorganization, moratorium and other laws for the protection of creditors, as
well as to general principles of equity, regardless whether such enforceability
is considered in a proceeding in equity or at law.

         6.4. No Liens. The Assets will be conveyed to Buyer at the Closing,
free and clear of all liens, encumbrances and adverse claims of any kind, with a
special warranty of title by, through and under Seller, but not otherwise.
Seller agrees to deliver to Buyer at Closing an executed Release of the Mortgage
in favor of U.S. Bank.

         6.5. Liability for Brokers' Fees. Seller has not incurred any
liability, contingent or otherwise, for brokers' or finders' fees relating to
the Transaction for which Buyer shall have any responsibility whatsoever.

         6.6. No Bankruptcy. There are no bankruptcy proceedings pending, being
contemplated by or, to the knowledge of Seller, threatened against Seller.

                                      -19-

<PAGE>

         6.7. Litigation. Except as set forth in Schedule 6.7 ("Existing Claims
and Litigation") there are no actions, suits or proceedings pending or, to the
knowledge of Seller, threatened in writing against Seller or any of the Assets,
in any court or by or before any federal, state, municipal or other governmental
agency that would materially adversely affect Seller or the Assets, or impair
Seller's ability to consummate the Transaction.

         6.8. Taxes. Seller has paid all Taxes (as defined in Section 9.1) with
respect to the Assets operated by Seller prior to such Taxes becoming
delinquent. Seller has paid all bills for Taxes submitted to it by third party
operators of the Assets prior to such bill becoming delinquent.

         6.9. Wells/Projects in Progress. To Seller's knowledge, Schedule 6.9 is
a list and description of all wells or other specified projects in progress and
associated costs or estimates thereof to the extent such costs or estimates
exceed $25,000 per well or project net to Seller's interest (the "Wells/Projects
in Progress").

         6.10. Material Agreements. The agreements and contracts that are
necessary to Seller's operation of the Assets as currently conducted are listed
on Exhibit C (the "Material Agreements"). The Material Agreements are valid and
in full force and effect and no person has given Seller written notice of any
alleged material default thereunder.

         6.11. Insurance. Seller maintains, and through the Closing Date will
maintain, with respect to the Assets, the insurance coverage described on
Schedule 6.11.

         6.12. Judgments. There are no unsatisfied judgments or injunctions
issued by a court of competent jurisdiction or other governmental agency
outstanding against Seller the Assets that materially interfere with the
operation of the Assets or impair Seller's ability to consummate the
Transaction.

         6.13. Casualty Loss. Between the Effective Time and the date of
execution of this Agreement there have been no uninsured casualty losses or
takings in condemnation of the Assets exceeding $25,000.00 in the aggregate.

         6.14. Accuracy of Information. The Records, data room materials and
other materials made available to Buyer by Seller in its offices in Denver,
Colorado with respect to the Assets may be referred to collectively as the
"Information." The Information include files, or copies thereof, that Seller
has used in its normal course of business and other information about the Assets
that Seller has compiled or generated, including without limitation, information
related to historical production and lease operating expenses. Seller makes no
representations or warranties, express or implied, written or oral, as to the
accuracy or completeness of the Information or any other information relating to
the Assets, furnished or to be furnished to Buyer or its representatives by or
on behalf of Seller, including without limitation (i) any estimate with respect
to the value of the Assets or reserves or any projections as to events that
could or could not occur (ii) indices, compilations or summaries of other
documents;

                                      -20-

<PAGE>

(iii) reserve estimates, engineering, geological or other interpretive
information; or (iv) projections, predictions or other estimation of future
events.

         6.15. Compliance with Law. To Seller's knowledge, the Assets are not
currently in material violation of any statute, law, ordinance, regulation, rule
or order of any foreign, federal, state or local government or any other
governmental department or agency, or any judgment, decree or order of any
court, applicable to its business or operations where such violations would, in
the aggregate, have a material adverse effect on the Assets (taken as a whole).

         6.16. Receipt of Proceeds from the Assets. Seller is receiving the
proceeds of production from the Assets in a timely manner without interruption,
delay, or suspense.

         6.17. Preferential Rights and Required Consents. Except as set forth on
Exhibit H, the Assets are not subject to any preferential rights or Required
Consents and the exclusive remedy for breach of the representation set forth in
this sentence is contained in Section 4.4. All contracts with third parties, if
any such contracts exist, which contain licensing restrictions or other
restrictions on disclosure or transfer (including but not limited to seismic
licenses) are listed on Exhibit H.

         6.18. Audits. Except as set forth in Schedule 6.18, the Assets are not
subject to any pending regulatory, revenue or joint interest billing audits.

         6.19. IPC-Owned CBM Gas Pipeline/Gathering Systems. Except for the
Tripp Surface Use Agreements which have previously been provided to Buyer, the
IPC-Owned CBM Gas Pipeline/Gathering Systems are located on the Leases and/or
on lands covered by Surface Use Agreements with the owner of the surface that
give IPC the right to lay the gathering system and transport the hydrocarbons.
Seller shall not be deemed to have breached this representation unless Buyer
provides Seller with written evidence that a third party has made a claim (or
threatened in writing to make a claim) asserting that Seller does not have the
right to transport the hydrocarbons as represented above.

                                   ARTICLE VII
                     BUYER'S REPRESENTATIONS AND WARRANTIES

         Buyer makes the following representations and warranties to Seller, as
of the date hereof:

         7.1. Organization and Standing. Buyer is a corporation organized,
existing and in good standing under the laws of the state of Delaware and on the
Closing Date will be duly qualified to carry on its business in each state where
failure to be so qualified could adversely affect the Assets or consummation of
the Transaction.

         7.2. Power. Buyer has all requisite power and authority to carry on
its business as presently conducted and to enter into this Agreement and to
consummate

                                      -21-
<PAGE>

the Transaction. The execution and delivery of this Agreement and consummation
of the Transaction and the fulfillment of and compliance with the terms and
conditions hereof will not violate, or be in conflict with, any material
provision of its governing documents or any material provision of any agreement
or instrument to which it is a party or by which it is bound, or, to its
knowledge, any judgment, decree, order, statute, rule or regulation applicable
to it.

         7.3. Authorization and Enforceability. The execution, delivery and
performance of this Agreement and the Transaction have been duly and validly
authorized by all requisite action on behalf of Buyer. This Agreement
constitutes Buyer's legal, valid and binding obligation, enforceable in
accordance with its terms, subject, however, to the effects of bankruptcy,
insolvency, reorganization, moratorium and similar laws for the protection of
creditors, as well as to general principles of equity, regardless whether such
enforceability is considered in a proceeding in equity or at law.

         7.4. Liability for Brokers' Fees. Buyer has not incurred any liability,
contingent or otherwise, for brokers' or finders' fees relating to the
Transaction which Seller shall have any responsibility whatsoever.

         7.5. Litigation. There is no action, suit, proceeding, claim or
investigation by any person, entity, administrative agency or governmental body
pending or, to Buyer's knowledge, threatened against it before any governmental
authority that impedes or is likely to impede its ability to consummate the
Transaction and to assume the liabilities to be assumed by it under this
Agreement.

         7.6. Financial Resources. Buyer has the financial resources available
to close the Transaction without financing that is subject to any material
contingency.

         7.7. Buyer's Evaluation.

                  (a) Information. Buyer is experienced and knowledgeable in the
oil and gas business and is aware of its risks. Buyer acknowledges that Seller
is making available to it the Information and the opportunity to examine, to the
extent it deems necessary in its sole discretion, all personal property and
equipment associated with the Assets. Except for the representations or
warranties of Seller contained in this Agreement, Buyer acknowledges and agrees
that Seller has not made any representations or warranties, express or implied,
written or oral, as to the accuracy or completeness of the Information or any
other information relating to the Assets furnished or to be furnished to Buyer
or its representatives by or on behalf of Seller, including without limitation
any estimate with respect to the value of the Assets, estimates of reserves,
estimates or any projections as to events that could or could not occur, future
operating expenses, future workover expenses and future cash flow.

                  (b) Independent Investigation. Buyer is experienced and
knowledgeable in the oil and gas business and is aware of its risks. Buyer is
familiar with the development and production of coalbed methane in the Powder
River Basin of

                                      -22-

<PAGE>

Wyoming, including the issues associated with dewatering, produced waters and
transport of the Hydrocarbons to market. Buyer has been afforded the opportunity
to examine the Information. Buyer acknowledges and agrees that Seller has made
no representations or warranties, express or implied, written or oral, as to the
accuracy or completeness of the Information or any other information relating to
the Assets furnished or to be furnished to Buyer or its representatives by or on
behalf of Seller. In entering into this Agreement, Buyer acknowledges and
affirms that it has relied and will rely solely on the terms of this Agreement
and upon its independent analysis, evaluation and investigation of, and judgment
with respect to, the business, economic, legal, tax or other consequences of
this Transaction including its own estimate and appraisal of the extent and
value of the petroleum, natural gas and other reserves of the Assets and the
development potential in the Powder River Basin. Buyer's representatives have
visited the offices of Seller and have been given opportunities to examine the
books and records Seller has made available relating to the Assets. Except as
expressly provided in this Agreement, Seller shall not have any liability to
Buyer or its affiliates, agents, representatives or employees resulting from any
use, authorized or unauthorized, of the Information or other information
relating to the Assets provided by or on behalf of Seller.

                                  ARTICLE VIII
                            COVENANTS AND AGREEMENTS

         8.1. Covenants and Agreements of Seller. Seller covenants and agrees
with Buyer as follows:

                  (a) Operations Prior to Closing.

                           (1) Operations. Except as otherwise consented to in
         writing by Buyer or provided in this Agreement, from the date of
         execution hereof to the Closing, Seller will operate the Assets
         operated by Seller in a good and workmanlike manner consistent with
         past practices. Subject to the provisions of Section 2.4 and
         subsections 8.1(a)(2) through (3), from the date of execution of this
         Agreement to the Closing Date, Seller shall pay or cause to be paid its
         proportionate shares of all Property Expenses incurred in connection
         with such operations and Seller will notify Buyer of ongoing activities
         and major capital expenditures in excess of $25,000 per activity net to
         Seller's interests conducted on the Assets and shall consult with Buyer
         regarding all such matters and operations involving such expenditures.

                           (2) Restrictions. Subject to subsection 8.1(a)(1),
         unless Seller obtains the prior written consent of Buyer to act
         otherwise, during the period from the date of execution of this
         Agreement to the Closing Date, Seller will use good faith efforts
         within the constraints of the applicable operating agreements and other
         applicable agreements to not permit Seller:

                                    (i) to sell, transfer or abandon any part of
                  the Assets (except in the ordinary course of business or the
                  abandonment of leases

                                      -23-

<PAGE>

                  upon the expiration of their respective primary terms or if
                  not capable of production in paying quantities);

                                    (ii) except for operations in connection
                  with the Wells/Projects in Progress which are deemed to be
                  approved, to approve any operations on the properties
                  anticipated in any instance to cost the owner of the Assets
                  more than $25,000 per activity net to Seller's interest
                  (except for emergency operations, operations required under
                  presently existing contractual obligations, ongoing
                  commitments under existing AFE's and operations undertaken to
                  avoid a monetary penalty or forfeiture provision of any
                  applicable agreement or order);

                                    (iii) to enter into any new marketing
                  contracts or agreements providing for the sale or disposition
                  of Hydrocarbons for a term in excess of 90 days; or

                                    (iv) to convey or dispose of any material
                  part of the Assets (other than replacement of equipment or
                  sale of Hydrocarbons produced from the Assets in the regular
                  course of business) or enter into any farmout, except to
                  maintain a lease or fulfill a drilling commitment, or enter
                  into any farmin or other similar contract affecting the Assets
                  if the net expense to Seller's interest will be in excess of
                  $25,000.

         Notwithstanding any provision to the contrary, nothing in this
         subsection 8.1(a) shall require Seller to revise, dishonor or delay
         performance of any obligation under agreements in existence prior to
         the date hereof.

                           (3) Consents. For the purposes of obtaining the
         written consents required in this subsection 8.1(a), this subsection
         8.1(a)(3) shall control over Section 15.3, and Buyer designates the
         following contact person:

                  Bill Barrett Corporation
                  1099 18th Street, Suite 2300
                  Denver, CO 80202
                  Attn: Dominic Bazile
                  Telephone: (303) 293-9100 Fax: (303) 291-0420

                  Such consents may be obtained in writing by overnight courier
or given by telecopy or facsimile transmission.

                  (b) Status. Seller shall maintain the corporate status of
Seller from the date hereof until Closing and to assure that as of the Closing
Date, Seller will not be under any material legal or contractual restriction
that would prohibit or delay the timely consummation of the Transaction.

                  (c) Notices of Claims. Seller shall promptly notify Buyer, if,
between the date of execution of this Agreement and the Closing Date, Seller
receives written

                                      -24-

<PAGE>

notice of any claim, suit, action or other proceeding of the type referred to in
Section 6.7 or written notice of any material default under any of the Material
Agreements.

                  (d) Compliance with Laws. During the period from the date of
execution of this Agreement to the Closing Date, Seller shall use good faith
efforts to comply in all material respects with all applicable statutes,
ordinances, rules, regulations and orders relating to the Assets.

                  (e) Books and Records. During the period from the date of
execution of this Agreement to the Closing Date, Seller will maintain the books
and records related to the Assets in a manner consistent with past practices.

                  (f) Consents of Other; Conditions. Prior to the Closing,
Seller shall use its reasonable efforts (a) to cause Seller to obtain all
authorizations, consents and permits, if any, required of Seller to permit them
to consummate the Transaction and (b) to cause all conditions for Closing set
forth in Section 10.1 to be met.

                  (g) Tripp Surface Use Agreement. On or before Closing, Seller
agrees to record the Tripp Surface Use Agreement in the real property records of
Campbell County Wyoming.

         8.2. Covenants and Agreements of Buyer. Buyer covenants and agrees with
Seller that:

                  (a) Corporate Status. Buyer shall maintain its corporate
status from the date hereof until the post-Closing adjustment, and use all
reasonable efforts to assure that as of the Closing Date it will not be under
any material corporate, legal or contractual restriction that would prohibit or
delay the timely consummation of the Transaction.

                  (b) Consents of Others; Condition. Prior to Closing, Buyer
shall use its reasonable efforts (a) to obtain all authorizations, consents and
permits, if any, required of Buyer to permit it to consummate the Transaction
and (b) to cause all conditions for Closing set forth in Section 10.2 to be met.

                  (c) Replacement Bonds and Instruments. At Closing, Buyer shall
provide replacement instruments for each bond or similar contingent obligation
given by Seller securing its obligations relating to the Assets (collectively,
the "Instruments"). As soon as practical after Closing, Buyer (with reasonable
assistance of Seller as requested by Buyer) shall use its best efforts to obtain
the release of the Assets and/or Seller from the Instruments.

                  (d) Employment Offers. Buyer (or Buyer's independent
contractor, Trinity Petroleum Management) will offer full-time employment to at
least 70 percent (70%) of the employees of Seller as of January 1, 2003, not
including Mr. Bill Cagle. Such offer will be made at the employees' current
salaries. Upon acceptance of an offer, each former employee of Seller will
become an employee of Buyer, subject to all

                                      -25-

<PAGE>

terms and conditions of employment normally applicable to Buyer's employees.
Provided, however, that Buyer will not terminate any former employees of Seller,
except for cause, prior to the expiration of nine (9) months from commencement
of employment. For each employee of Seller to whom Buyer does not offer
employment or for each employee that rejects Buyer's employment offer, with the
exception of Mr. Bill Cagle, Buyer will reimburse Seller for a severance payment
to be made to each such employee, if such employee was an employee on January 1,
2003, in the amount of fifty percent (50%) of such employee's base annual
salary, as of January 1, 2003, excluding any bonuses; provided however, that,
for each employee to whom Buyer does not offer employment or that rejects
Buyer's employment offer, Buyer shall be liable to reimburse Seller for
severance payments to all of the Gillette IPC employees and to reimburse Seller
for severance payments to eight of the originally listed Denver IPC Employees
and one out of the two of the "additional" Denver IPC Employees."

         8.3. Covenants and Agreements of the Parties.

                  (a) Confidentiality. In connection with reviewing Data Room
materials and other information during the bid process, Buyer executed a
"Confidentiality Agreement." Nothing herein shall be deemed to terminate the
Confidentiality Agreement and Buyer and Seller agrees that the Confidentiality
Agreement shall continue in full force and effect with the following
modifications: (i) if Closing occurs, Buyer's obligations under the
Confidentiality Agreement thereafter terminate; (ii) if Closing does not occur,
the Confidentiality Agreement shall remain in effect until November 1, 2004;
(iii) the term "Disclosing Party" as used in the Confidentiality Agreement shall
include Seller and is representatives; (iv) the term "Confidential Information"
as used in the Confidentiality Agreement shall also include the Information and
any other documents and information made available to Buyer in the Data Room or
under the terms of this Agreement and (v) all rights, powers and remedies
provided for therein and herein are cumulative, and not exclusive, of any and
all rights, powers and remedies existing at law or in equity, and Seller shall,
in addition to the rights, powers and remedies herein conferred and conferred in
the Confidentiality Agreement, be entitled to avail itself of all such other
rights, powers and remedies as may now or hereafter exist.

                  (b) Communication Between The Parties. If Buyer has reason to
believe that Seller has breached a representation or warranty under this
Agreement, Buyer shall inform Seller of such potential breach as soon as
possible, but in any event, at or prior to Closing.

                  (c) Cure Period for Breach. If a Party believes the other
Party has breached the terms of this Agreement, the Party who believes the
breach has occurred shall give written notice to the breaching Party of the
nature of the breach and give that Party 48 hours to cure. Notwithstanding the
foregoing, this subsection 8.3(c) shall not apply to breach of the Parties'
obligations at Closing and shall not operate to delay Closing.

                                      -26-

<PAGE>

                                   ARTICLE IX
                                  TAX MATTERS

         9.1. Apportionment of Tax Liability. "Taxes" shall mean all ad valorem,
severance, property, production, excise, net proceeds, and all other taxes and
similar obligations assessed against the Assets or based upon or measured by the
ownership of the Assets or the production of Hydrocarbons or the receipt of
proceeds therefrom, other than income taxes. With respect to the Assets, all
Taxes based on or attributable to the ownership of, or based on production of
hydrocarbons shall be deemed attributable to the period during which such
production occurred, and not attributable to the period during which such Taxes
are assessed. The apportionment of Taxes between the Parties shall take place in
the Preliminary Settlement Statements and Settlement Statement, using estimates
of such Taxes if actual numbers are not available. Subject to the provisions of
Section 13.3, Taxes are considered part of the Property Expenses.

         9.2. Calculation of Tax Liability. Consistent with Section 9.1, and
based on the best current information available as of Closing, the proration of
Taxes shall be made between the Parties as an adjustment to the Purchase Price
pursuant to Sections 2.4 and 13.1 and thereafter pursuant to the provisions of
Section 13.3.

         9.3. Tax Reports and Returns.

                  (a) Consistent with Section 9.1, the Parties shall promptly
forward to each other any such tax reports and returns received after Closing
and provide each other with appropriate information on a timely basis which is
necessary to file any required tax reports and returns related to the Assets.
Buyer agrees to file all tax returns and reports applicable to the Assets that
are required to be filed after the Closing, and remit all required Taxes payable
with respect to the Assets subject to the provisions of Sections 9.1 and 13.3.
Accordingly, the Parties agrees as follows:

                           (1) Tax Year 2002 - Production Year 2001. Seller
         agrees to retain the responsibility to remit the ad valorem taxes and
         other Taxes due with respect to the Assets for tax year 2002 (i.e., the
         period based on production which occurred during 2001).

                           (2) Tax Year 2003 - Production Year 2002. Buyer
         agrees to assume the responsibility to remit the ad valorem taxes and
         other Taxes due with respect to the Assets for tax year 2003 (i.e., for
         ad valorem taxes, the period based on production which occurred during
         2002). With respect to ad valorem Taxes payable for the tax year 2003
         (based on 2002 production), any Taxes withheld by Seller, which are
         attributable to the production revenues of Seller or any third party
         shall be transferred and assigned to Buyer at Closing (together with
         appropriate documentation) and said transfer shall be reflected in the
         Preliminary Settlement Statement and Settlement Statement. Buyer shall
         assume responsibility for remitting such Taxes to the State of Wyoming
         Department of Revenue, and Buyer agrees to indemnify, hold harmless and

                                      -27-

<PAGE>

         defend Seller, without limitation as to time or amount, from and
         against all Losses incurred by Seller if and to the extent that Buyer
         breaches the provisions of this Section.

                           (3) Tax Year 2004 - Production Year 2003 and Beyond.
         Consistent with the previous subsection (2), Buyer agrees to assume the
         responsibility to remit the ad valorem taxes and other Taxes due with
         respect to the Assets for tax year 2003 and thereafter, Buyer agrees to
         assume the responsibility to remit the ad valorem taxes and other Taxes
         due with respect to the Assets commencing with tax year 2004 (i.e., the
         period based on production which occurred during 2003), and all
         subsequent years.

         9.4. Sales Taxes. Buyer shall be liable for and shall indemnify Seller
for, any sales and use taxes, conveyance, transfer and recording fees and real
estate transfer stamps or taxes that may be imposed on any transfer of the
Assets pursuant to this Agreement. If required by applicable law, Seller shall
calculate and remit any sales or similar taxes that are required to be paid as a
result of the transfer of the Assets to Buyer and Buyer shall promptly reimburse
Seller therefor. If Seller receives notice that any sales and/or use taxes are
due, Seller shall promptly forward such notice to Buyer for handling.

         9.5. Tax Forms.

                  (a) The Parties shall file all tax forms and reports
consistent with the Exhibit B and B-1 Allocated Values. Buyer and Seller shall
cooperate, in the manner set forth in this Section 9.5, to comply with all
substantive and procedural requirements of Sections 755 and 1060 of the Code and
Regulations thereunder, including without limitation, the filing by Buyer and
Seller of IRS Form 8594 with their federal income tax returns for the taxable
year in which the Closing occurs. Buyer and Seller agree that each will not take
for income tax purposes, or permit any affiliate to take, any position
inconsistent with the allocation of the Purchase Price.

                  (b) On or before Tuesday, May 20, 2003, Buyer will provide to
Seller copies of Internal Revenue Service Form 8594 and all other related
documents the Code and applicable United States Treasury regulations require
(the "Asset Acquisition Statement") with Buyer's proposed allocation of the
Purchase Price (together with any Assumed Obligations), such allocation to be
made in accordance with the Code and applicable Regulations thereunder. Within
30 days after the receipt of such Asset Acquisition Statement, Seller will
propose to Buyer any changes to such Asset Acquisition Statement. If Seller
proposes no such changes in writing to Buyer within that 30-day period, Seller
will have agreed to, and accepted, the Asset Acquisition Statement. Buyer and
Seller will try to resolve any differences with respect to the Asset Acquisition
Statement within 30 days after Buyer's receipt of written notice of objection
from Seller.

                                      -28-

<PAGE>

                  (c) If Seller withholds its consent to the allocation shown in
the Asset Acquisition Statement, and Buyer and Seller have acted in good faith
to resolve any differences with respect to items on the Asset Acquisition
Statement and are unable to resolve any differences, then KPMG (the "Accounting
Firm") will conclusively resolve all remaining disputed matters. The Accounting
Firm shall be instructed to resolve such disputes within 30 days after its
receipt of the information necessary to make such a determination. No later than
30 days after its receipt of the information necessary to make such a
determination, the Accounting Firm shall determine (based solely on
presentations by Seller and Buyer and not by independent review) only those
matters in dispute and will issue a written report about the disputed matters
and the resulting allocation of Purchase Price (together with any Assumed
Liabilities). The report shall be conclusive and binding upon the Buyer and
Seller. Subject to the requirements of any applicable tax law or election, Buyer
and Seller shall file all tax returns and reports consistently with the
allocation provided in the Asset Acquisition Statement or, if applicable, the
determination of the Accounting Firm. Seller and Buyer shall share equally the
fees charged by and expenses of the Accounting Firm. Any adjustment to the
Purchase Price (together with Assumed Liabilities) shall be allocated in
accordance with the Code and applicable Regulations thereunder.

                                    ARTICLE X
                         CONDITIONS PRECEDENT TO CLOSING

         10.1. Seller's Conditions Precedent. The obligations of Seller at the
Closing are subject, at the option of Seller, to the satisfaction or waiver at
or prior to the Closing of the following conditions precedent:

                  (a) All representations and warranties of Buyer contained in
this Agreement are true in all material respects (considering the Transaction as
a whole) at and as of the Closing in accordance with their terms as if such
representations and warranties were remade at and as of the Closing, and Buyer
has performed and satisfied all covenants and agreements required by this
Agreement to be performed and satisfied by Buyer at or prior to the Closing in
all material respects and Buyer shall deliver a certificate to Buyer confirming
the foregoing in the form attached as Exhibit E; and

                  (b) No order has been entered by any court or governmental
agency having jurisdiction over the Parties or the subject matter of this
Agreement that restrains or prohibits the Transaction and that remains in effect
at the time of Closing.

                  (c) The aggregate sum of Title Defect adjustments and
adjustments for Adverse Environmental Conditions shall not exceed 10% of the
Purchase Price.

         10.2. Buyer's Conditions. The obligations of Buyer at the Closing are
subject, at the option of Buyer, to the satisfaction or waiver at or prior to
the Closing of the following conditions precedent:

                                      -29-

<PAGE>

                  (a) All representations and warranties of Seller contained in
this Agreement are true in all material respects (considering the Transaction as
a whole) at and as of the Closing in accordance with their terms as if such
representations were remade at and as of the Closing, and Seller has performed
and satisfied all covenants and agreements required by this Agreement to be
performed and satisfied by Seller at or prior to the Closing in all material
respects and Seller shall deliver a certificate to Buyer confirming the
foregoing in the form attached as Exhibit F; and

                  (b) No order has been entered by any court or governmental
agency having jurisdiction over the Parties or the subject matter of this
Agreement that restrains or prohibits the Transaction and that remains in effect
at the time of Closing.

                  (c) The aggregate sum of Title Defect adjustments and
adjustments for Adverse Environmental Conditions shall not exceed 10% of the
Purchase Price.

                                   ARTICLE XI
                      RIGHT OF TERMINATION AND ABANDONMENT

         11.1. Termination. This Agreement may be terminated in accordance with
the following provisions:

                  (a) by Seller if Seller's conditions set forth in Section 10.1
are not satisfied through no fault of Seller, or are not waived by Seller, as of
the Closing Date;

                  (b) by Buyer if Buyer's conditions set forth in Section 10.2
are not satisfied through no fault of Buyer, or are not waived by Buyer, as of
the Closing Date;

                  (c) by Seller if, through no fault of Seller, the Closing does
not occur on or before the Closing Date;

                  (d) by Buyer if, through no fault of Buyer, the Closing does
not occur on or before the Closing Date; or

                  (e) by Buyer or Seller if the aggregate of Defect Adjustments
(including those amounts that are considered Defect Adjustments solely for
purposes of determining the Closing Amount) and Exclusion Adjustments exceeds
10% of the Purchase Price.

         11.2. Liabilities Upon Termination.

                  (a) Buyer's Breach. If Closing does not occur because Buyer
wrongfully fails to tender performance at Closing or otherwise breaches this
Agreement prior to Closing, Seller shall retain the Deposit, plus all accrued
interest, and Seller shall retain any legal or equitable remedies for Buyer's
breach of this Agreement, including but not limited to specific performance;
provided, however, that Buyer shall not have any liability to Seller for
consequential, special, punitive or exemplary damages arising out of or related
to Buyer's breach of any provision of this Agreement. Buyer's failure to

                                      -30-

<PAGE>

close shall not be considered wrongful if (i) Buyer's conditions under Section
10.2 are not satisfied through no fault of Buyer and are not waived, or (ii)
Buyer has terminated this Agreement as of right under Section 11.1.

                  (b) Seller's Breach. If Closing does not occur because Seller
wrongfully fails to tender performance at Closing or otherwise breach this
Agreement prior to Closing, Seller will return the Deposit, plus all accrued
interest, immediately after the Closing Date and Buyer shall retain any legal or
equitable remedies for Seller's breach of this Agreement, including but not
limited to specific performance; provided, however, that Seller shall not have
any liability to Buyer for consequential, special, punitive or exemplary damages
arising out of or related to Seller's breach of any provision of this Agreement.
Seller's failure to close shall not be considered wrongful if (i) Seller's
conditions under Section 10.1 are not satisfied through no fault of Seller and
are not waived; or (ii) Seller has terminated this Agreement as of right under
Section 11.1.

                  (c) Termination Pursuant to Section 11.1. If Buyer or Seller
terminates this Agreement pursuant to Section 11.1 in the absence of a breach by
the other Party, Seller shall distribute the funds in the Deposit, plus all
accrued interest, to Buyer and neither Buyer nor Seller shall have any liability
to the other Party for termination of this Agreement. If Buyer or Seller
terminates this Agreement and asserts that a breach of this Agreement has
occurred, the notice of termination shall include a statement describing the
nature of the alleged breach.

                                   ARTICLE XII
                                     CLOSING

         12.1. Date of Closing. The consummation of the Transaction (the
"Closing") shall be held on a mutually acceptable date on or before Thursday
March 20, 2003 (the "Closing Date").

         12.2. Place of Closing. The Closing shall be held at the offices of
Hale, Hackstaff, Tymkovich, LLP in Denver, Colorado at 10:00 a.m. or at such
other time and place as Buyer and Seller may agree in writing.

         12.3. Closing Obligations. At Closing, the following events shall
occur, each being a condition precedent to the others and each being deemed to
have occurred simultaneously with the others:

                  (a) Seller shall execute, acknowledge and deliver to Buyer, an
Assignment, Bill of Sale and Conveyance in the form attached as Exhibit G,
conveying the Assets to Buyer as of the Effective Time, with (i) a special
warranty of the real property title by, through and under Seller but not
otherwise (as described in Section 13.4), and (ii) with all personal property
and fixtures conveyed "AS IS, WHERE IS," with no warranties whatsoever, express,
implied or statutory;

                                      -31-

<PAGE>

                  (b) Seller and Buyer shall execute and deliver the Preliminary
Settlement Statement;

                  (c) Buyer shall deliver to Seller the Closing Amount by wire
transfer of immediately available funds to an account or the accounts designated
by Seller;

                  (d) Buyer shall deliver to Seller Buyer's Officers Certificate
and Seller shall deliver to Buyer Seller's Officers Certificate.

                  (e) Seller shall deliver to Buyer a Release of Mortgage, in
recordable form, of the Mortgage in favor of U.S. Bank;

                  (f) Buyer shall deliver to Seller evidence that it has
complied with the provisions of Section 8.2(c) by providing evidence of the
bonds and other similar obligations replacing the Instruments;

                  (g) Seller shall transfer to Buyer all funds and detail
information, if any, held by Seller in suspense owing to third parties on
account of production from the Properties and in such event Buyer shall assume
responsibility for the payment thereof to third, parties entitled to the same;
and

                  (h) Seller and Buyer shall take such other actions and deliver
such other documents as are contemplated by this Agreement.

                                  ARTICLE XIII
                            POST-CLOSING OBLIGATIONS

         13.1. Post-Closing Adjustments. As soon as practicable after the
Closing, but on or before Tuesday June 17, 2003, Seller, with assistance from
Buyer's staff, will prepare and deliver to Buyer, in accordance with customary
industry accounting practices and the terms of this Agreement, (i) the
settlement statement (the "Settlement Statement") setting forth each adjustment
or payment that was not finally determined as of the Closing and showing the
calculation of such adjustment and the resulting final purchase price (the
"Final Purchase Price"), if applicable. As soon as practicable after receipt of
the Settlement Statement, but in no event later than on or before 20 days after
receipt of Seller's proposed Settlement Statement, Buyer shall deliver to Seller
a written report containing any changes that Buyer proposes to make to the
Settlement Statement. Buyer's failure to deliver to Seller a written report
detailing proposed changes to the Settlement Statement by that date shall be
deemed an acceptance by Buyer of the Settlement Statement as submitted by
Seller. The Parties shall agree with respect to the changes proposed by Buyer,
if any, no later than 30 days after receipt of Seller's proposed Settlement
Statement. The date upon which such agreement is reached or upon which the Final
Purchase Price is established shall be herein called the "Settlement Date." If
the Final Purchase Price is more than the Closing Amount, Buyer shall pay Seller
the amount of such difference. If the Final Purchase Price is less than the
Closing Amount, Seller shall pay to Buyer the amount of such difference. In
either

                                      -32-

<PAGE>

event, payment shall be made by wire transfer in immediately available funds.
Payment by Buyer or Seller, as the case may be, shall be within five days of the
Settlement Date.

         13.2. Records. Seller may retain copies of the Records and Seller shall
have the right to review and copy the Records during standard business hours
upon reasonable notice for so long as Buyer retains the Records. Buyer agrees
that the Records will be maintained in compliance with all applicable laws
governing document retention. Buyer will not destroy or otherwise dispose of
Records for a period of six years after Closing, unless Buyer first gives Seller
reasonable notice and an opportunity to copy the Records to be destroyed.

         13.3. Proceeds, Accounts Receivable and Invoices For Property Expenses
Received After Closing. After the Settlement Date, those proceeds or accounts
receivable attributable to the Assets received by a Party, or invoices for
Property Expenses, or invoices paid by one Party for or on behalf of the other
Party which were not already included as a Purchase Price adjustment at Closing,
shall be handled as follows:

                  (a) Proceeds/Accounts Receivable. Proceeds from the sales of
Hydrocarbons produced prior to the Effective Time and/or accounts receivable
attributable to the period of time before the Effective Time, received by Buyer
shall be immediately remitted or forwarded to Seller. Proceeds from the sales of
Hydrocarbons produced after the Effective Time and/or accounts receivable
attributable to the period of time after the Effective Time, received by Seller,
if any, shall be immediately forwarded to Buyer. Buyer agrees to use all
reasonable business efforts to attempt to collect all accounts receivable
attributable to the period of time prior to the Effective Time in its normal
course of business.

                  (b) Property Expenses. Invoices for Property Expenses received
by Buyer which relate to operations on the Assets prior to the Effective Time
shall be forwarded to Seller by Buyer, or if already paid by Buyer, invoiced by
Buyer to Seller. Invoices for Property Expenses received by Seller which relate
to operations on the Assets after the Effective Time shall be immediately
forwarded to Buyer by Seller, or if already paid by Seller, invoiced by Seller
to Buyer.

                  (c) Duration. The provisions of this Section shall apply until
December 31, 2003, after which time, except for the liability for royalty and
overriding royalty payments and Taxes made or payable with respect to the Assets
and attributable to the period of time prior to the Effective Time ("Retained
Royalties and Taxes"), Buyer shall assume, pay, perform, fulfill and discharge
responsibility for the payment of all Property Expenses attributable to the
period of time before and after the Effective Time, and such retention shall
become part of the Assumed Liabilities.

         13.4. Limited Warranty of Title. Seller agrees to convey the Assets to
Buyer with a special warranty of title against all persons claiming by, through
or under Seller, but not otherwise. This special warranty of title shall expire
one year after the Effective Time; provided, however, that Seller shall have no
liability to Buyer under this special

                                      -33-

<PAGE>

warranty for (i) any matter disclosed in or ascertainable from the Material
Agreements or (ii) any matter for which a Defect Adjustment has been made and/or
(iii) any amount in excess of the Allocated Value for a particular Asset,
reduced by the value of production from the affected Asset after the Effective
Time, net of lease operating expenses attributable to the Asset for the same
period. Seller's indemnification obligations hereunder are subject to the
procedures set forth below in Article XIV.

         13.5. Insurance and Bonds. Seller currently carries certain liability
policies covering the Assets. At and after Closing, Buyer agrees to have the
appropriate insurance policies and performance bonds in place.

         13.6. Further Assurances. From time to time after Closing, Seller and
Buyer shall each execute, acknowledge and deliver to the other such further
instruments and take such other action as may be reasonably requested in order
to accomplish more effectively the purposes of the Transaction.

                                   ARTICLE XIV
                                 INDEMNIFICATION

         This Article XIV addresses assumption and retention of liabilities and
obligations by Buyer and Seller related to the Assets and indemnification for
such liabilities and obligations. For the purposes of this Agreement, "Losses"
shall mean any actual loss, cost, expense, liability, damage, demands, suits,
sanctions of every kind and character including reasonable fees and expenses of
attorneys, technical experts and expert witnesses reasonably incident to matters
indemnified against; excluding, however, any loss incurred as a result of the
indemnified Party indemnifying a third party and further excluding any special,
consequential, punitive or exemplary damages except to the extent recovered
against the Indemnified Party by a third-party claimant other than Seller, or
any agent, officer, employee, successor, assign, affiliate or party related, by
ownership or control, to the Indemnified Party.

         14.1. Buyer's Assumption of Liabilities and Obligations. Upon Closing
and except for Retained Liabilities and subject to the provisions of Section
13.3, Buyer shall assume and pay, perform, fulfill and discharge all claims,
costs, expenses, liabilities and obligations accruing or relating to the owning,
developing, exploring, operating or maintaining of the Assets or the producing,
transporting and marketing of Hydrocarbons from the Assets for the periods
before and after the Effective Time, including, without limitation, (i) the
Material Contracts, (ii) claims asserted by Seller's former employees that are
hired by Buyer, but only to the extent such Losses arise from acts of Buyer
after the effective date of such former employees employment by Buyer ("Buyer
Employee Matters") and (iii) the Assumed Environmental Liabilities, and the
obligation to plug and abandon all wells located on the Lands and reclaim all
well sites located on the Lands (collectively, the "Assumed Liabilities").

         14.2. Seller's Retention of Liabilities and Obligations. Upon Closing
and subject to the provisions of Section 13.3, and subject to the limitations
set forth in Section 14.7,

                                      -34-

<PAGE>

Seller retains all claims, costs, expenses, liabilities and obligations accruing
or relating to (i) any breach by Seller of the special warranty of title
contained in Section 13.4, (ii) claims asserted by Seller's former employees
that are hired by Buyer, to the extent such Losses arise from acts of Seller or
other events occurring prior to the effective date of such former employees'
employment by Buyer ("Seller Employee Matters"), (iii) the litigation and claims
identified in Schedule 6.7 as Retained Litigation ("Retained Litigation"), (iv)
Retained Environmental Liabilities and (v) Retained Royalties and Taxes
(collectively, the "Retained Liabilities").

         14.3. Buyer's Indemnification of Seller. Buyer assumes all risk,
liability, obligation and Losses in connection with, and shall defend,
indemnify, and save and hold harmless Seller, its parent and affiliates
respective officers, directors, members, employees and agents, from and against
all Losses which arise from or in connection with (i) the Assumed Liabilities,
(ii) any matter for which Buyer has agreed to indemnify Seller under this
Agreement and (iii) any breach by Buyer of this Agreement.

         14.4. Seller's Indemnification of Buyer. Seller assumes all risk,
liability, obligation and Losses in connection with, and shall defend,
indemnify, and save and hold harmless Buyer, its officers, directors, employees
and agents, from and against all Losses which arise from or in connection with
(i) the Retained Liabilities, (ii) any other matter for which Seller has agreed
to indemnify Buyer under this Agreement and (iii) any breach by Seller of this
Agreement. This indemnification shall not apply to the extent that the liability
for which such indemnification is sought is increased by acts or omissions of
any party other than Seller after the Effective Time.

         14.5. Release. Buyer shall be deemed to have released Seller and its
parent, affiliates, predecessors, successors and assigns at the Closing from any
Losses for which Buyer has agreed to indemnify Seller hereunder, and Seller
shall be deemed to have released Buyer at the Closing from any Losses for which
Seller has agreed to indemnify Buyer hereunder.

         14.6. Procedure. The indemnifications contained in Article XIV shall
be implemented as follows:

                  (a) Coverage. Subject to the limits set forth in this Article
XIV, such indemnity shall extend to all Losses suffered or incurred by the
indemnified party other than (i) insured or otherwise compensated Losses,
including insured workman's compensation, unemployment and other
government-maintained insurance or compensation programs, and (ii) Losses
arising from liabilities or obligation for which the Parties have adjusted the
Purchase Price.

                  (b) Claim Notice. The Party seeking indemnification under the
terms of this Agreement ("Indemnified Party") shall submit a written "Claim
Notice" to the other Party ("Indemnifying Party") which, to be effective, must
state: (i) the amount of each payment claimed by an Indemnified Party to be
owing, to the extent then quantifiable, (ii) the basis for such claim, with
supporting documentation (iii) a list identifying to the

                                      -35-

<PAGE>

extent reasonably possible each separate item of Loss for which payment is so
claimed. The amount claimed shall be paid by such Indemnifying Party as and to,
and only to, the extent required herein within 30 days after receipt of the
Claim Notice or after the amount of such payment has been finally established,
whichever last occurs.

                  (c) Information. Within 60 days after notification to an
Indemnified Party of a claim or legal action or other matter that may result in
a Loss for which indemnification may be sought under this Article XIV (the
"Claim"), but in time sufficient for the Indemnifying Party to contest any
action, claim, proceeding or other matter that has become the subject of
proceedings before any court or tribunal, the Indemnified Party shall give
written notice of the Claim to the Indemnifying Party. Thereafter, at the
request of the Indemnifying Party, the Indemnified Party shall furnish the
Indemnifying Party (or its counsel) with copies of all pleadings and other
information with respect to the Claim. At the election of the Indemnifying Party
made within 60 days after receipt of such notice, the Indemnified Party shall
permit the Indemnifying Party to assume control of the Claim (to the extent only
that such Claim relates to a Loss for which the Indemnifying Party is liable),
including the determination of all appropriate actions, the negotiation of
settlements on behalf of the Indemnified Party, and the conduct of litigation
through attorneys of the Indemnifying Party's choice. If the Indemnifying Party
elects to settle the Claim, the settlement, without the Indemnified Party's
prior written consent, can not result in any liability or cost to the
Indemnified Party for which it is not entitled to be indemnified hereunder, or
subject the Indemnified Party to any declaratory, injunctive or other equitable
relief or to regulatory sanctions or restrictions. If the Indemnifying Party
elects to assume control: (i) any expense incurred by the Indemnified Party
thereafter for investigation or defense of the Claim shall be borne by the
Indemnified Party, and (ii) the Indemnified Party shall give all reasonable
information and assistance, other than pecuniary, that the Indemnifying Party
shall deem necessary to the proper defense of such Claim. In the absence of such
an election, the Indemnified Party will use reasonable efforts to defend, at the
Indemnifying Party's expense, the Claim to which the Indemnifying Party's
indemnification under this Article XIV applies until the Indemnifying Party
assumes such defense. If the Indemnifying Party fails to assume such defense
within the time period provided above, the Indemnified Party may settle the
Claim in the Indemnified Party's reasonable discretion at the Indemnifying
Party's expense.

                  (d) Dispute. If the existence of a valid Claim or amount to be
paid by an Indemnifying Party is in dispute, the Parties agree to submit
determination of the existence of a valid Claim or the amount to be paid
pursuant to the Claim Notice to binding arbitration in Denver, Colorado such
arbitration to be conducted as set forth in Section 15.17.

         14.7. Limitation on Seller's Indemnity Obligation.

                  (a) Receipt of Claim Notices. Seller's indemnity obligation
under this Article XIV shall only extend to Losses for which valid Claim Notices
are received by Seller on or before 12 months after Closing; provided, however,
that the 12-month limit will not apply to Retained Royalties and Taxes, the
Retained Litigation, Retained

                                      -36-

<PAGE>

Environmental Liabilities, and Seller Employee Matters. Seller shall have no
obligation to indemnify Buyer under this Agreement for Claims not properly and
timely raised as set forth herein and Buyer hereby releases Seller from and
indemnifies Seller against all liability with respect to such Losses for such
Claims not properly and timely raised. If a valid Claim Notice is timely given,
the indemnification obligations hereunder shall remain in effect for the period
of time required to cover the potential Loss under such Claim or for the full
period during which the Claim is pending or until it is otherwise resolved.

                  (b) Remedies. The remedies set forth in Articles IV, V, XI and
XIV of this Agreement shall be the exclusive remedies for the specific matters
addressed in those respective Sections and Articles and the indemnification
obligations set forth in Article IV, V and this Article XIV shall, after the
Closing, be the sole and exclusive remedies of Seller and Buyer with respect to
the specific matters addressed in such indemnities.

         14.8. No Insurance or Subrogation. The indemnifications provided in
this Article XIV shall not be construed as a form of insurance. Seller and Buyer
hereby waive for themselves, their successors or assigns, including, without
limitation, any insurers, any rights to subrogation for Losses for which each of
them is respectively liable or against which each respectively indemnifies the
other, and, if required by applicable policies, Seller and Buyer shall obtain
waiver of such subrogation from their respective insurers.

         14.9. Reservation as to Non-Parties. Nothing herein is intended to
limit or otherwise waive any recourse Buyer or Seller may have against any
non-party for any obligations or liabilities which may be incurred with respect
to the Assets.

                                   ARTICLE XV
                                  MISCELLANEOUS

         15.1. Schedules and Exhibits. The Schedules and Exhibits referred to in
this Agreement are hereby incorporated in this Agreement by reference and
constitute a part of this Agreement.

         15.2. Expenses. Except as otherwise specifically provided, all fees,
costs and expenses incurred by Buyer or Seller in negotiating this Agreement or
in consummating the Transaction shall be paid by the Party incurring the same,
including, without limitation, engineering, land, title, legal, and accounting
fees, costs and expenses.

         15.3. Notices. Except as provided in subsection 8.1(a)(3), all notices
and communications required or permitted under this Agreement ("Notices") shall
be in writing, addressed as set forth below, and be given in the following
manner: (i) personal delivery, (ii) telecopy or facsimile transmission, (iii)
mailed, certified mail, return receipt requested, or (iv) overnight courier. Any
communication or delivery hereunder shall be deemed to have been duly made and
the receiving Party charged with notice when the receiving Party actually
receives the Notice. All Notices shall be addressed as follows:

                                      -37-

<PAGE>

         If to Seller:

                  Independent Production Company, Inc.
                  Sapphire Bay LLC
                  410 17th Street, Suite 570
                  Denver, Colorado 80202
                  Telephone: (303) 595 8829
                  Fax: (303) 595 3653
                  Attention: Bill Cagle

         With a copy to:

                  Hale, Hackstaff Tymkovich, LLP
                  1430 Wynkoop, Suite 300
                  Denver, Colorado 80202
                  Attention: Kurt M. Petersen
                  Telephone: (720) 904 6026
                  Fax: (720) 904 6006

         If to Buyer:

                  Bill Barrett Corporation
                  1099 18th Street, Suite 2300
                  Denver, CO 80203
                  Attn: J. Frank Keller
                  Telephone: (303) 293-9100
                  Fax: (303) 291-0420

         With a copy to:

                  Patton Boggs LLP
                  1660 Lincoln Street, Suite 1900
                  Denver, CO 80264
                  Attention: David E. Brody
                  Telephone: (303) 830-1776
                  Fax: (303) 894-9239

Any Party may, by a Notice so delivered to the other Party, change the address
or individual to which delivery shall thereafter be made.

         15.4. Amendments. Except for waivers specifically provided for in this
Agreement, this Agreement may not be amended nor any rights hereunder waived
except by an instrument in writing signed by the Party to be charged with such
amendment or waiver and delivered by such Party to the Party claiming the
benefit of such amendment or waiver.

                                      -38-

<PAGE>

         15.5. Assignment. Buyer shall not assign all or any portion of its
respective rights or delegate all or any portion of its respective duties
hereunder unless it continues to remain liable for the performance of its
obligations hereunder; provided that, Buyer may not assign the benefits of
Seller's indemnities given pursuant to this Agreement and any permitted
assignment shall not include such benefits. No such assignment or obligation
shall increase the burden on Seller or impose any duty on Seller to communicate
with or report to any transferee, and Seller may continue to look to Buyer for
all purposes under this Agreement.

         15.6. Announcements. Seller and Buyer shall consult with each other
with regard to all press releases and other announcements issued after the date
of execution of this Agreement and prior to the Closing Date concerning this
Agreement or the Transaction. Except as may be required by applicable laws or
the applicable rules and regulations of any governmental agency or stock
exchange, neither Buyer nor Seller shall issue any such press release or other
publicity without the prior written consent of the other Party, which consent
shall not be unreasonably withheld. Notwithstanding the foregoing, any press
release shall not contain the name of Seller without Seller's consent.

         15.7. Headings. The headings of the Articles and Sections of this
Agreement are for guidance and convenience of reference only and shall not limit
or otherwise affect any of the terms or provisions of this Agreement.

         15.8. Counterparts/Facsimile Signatures. This Agreement may be executed
by Buyer and Seller in any number of counterparts, each of which shall be deemed
an original instrument, but all of which together shall constitute but one and
the same instrument. Facsimile signatures are considered binding.

         15.9. References. References made in this Agreement, including use of a
pronoun, shall be deemed to include where applicable, masculine, feminine,
singular or plural, individuals or entities. As used in this Agreement, "person"
shall mean any natural person, corporation, partnership, trust, limited
liability company, court, agency, government, board, commission, estate or other
entity or authority.

         15.10. Governing Law. This Agreement and the Transaction and any
arbitration or dispute resolution conducted pursuant hereto shall be construed
in accordance with, and governed by, the laws of the State of Colorado.

         15.11. Entire Agreement. This Agreement and the Confidentiality
Agreement constitute the entire understanding among the Parties, their
respective partners, members, trustees, shareholders, officers, directors and
employees with respect to the subject matter hereof, superseding all
negotiations, prior discussions and prior agreements and understandings relating
to such subject matter.

                                      -39-

<PAGE>

         15.12. Best Knowledge and Reasonable and Good Faith Efforts. The
knowledge or best knowledge of a Party, or similar phrases, shall mean for
purposes of this Agreement, the actual, conscious knowledge of the Party at the
time the assertion regarding knowledge is made. If the Party is a corporation or
other entity other than a natural person, such actual, conscious knowledge must
be on the part of the person having supervising management authority over the
matters to which such knowledge pertains. Any Claim based on the existence of a
Party's knowledge must establish the existence of such knowledge by clear and
convincing documentary evidence. Reasonable or good faith efforts as used in
this Agreement does not include the obligation to pay consideration.

         15.13. Binding Effect. This Agreement shall be binding upon, and shall
inure to the benefit of, the Parties and their respective successors and
assigns.

         15.14. Survival. The representations and warranties contained in this
Agreement shall not survive the Closing except to the extent necessary to give
post-closing effect to the indemnities set forth in this Agreement.

         15.15. No Third-Party Beneficiaries. This Agreement is intended to
benefit only the Parties and their respective permitted successors and assigns.

         15.16. Waiver of Compliance with Bulk Transfer Laws. Buyer waives
compliance with any applicable bulk transfer laws relating to the Transaction.

         15.17. Dispute Resolution.

                  (a) Disputes Arising Prior to Closing. With respect to any
dispute that arises prior to Closing, either Party may deliver a notice by
facsimile or hand delivery to the other Party describing the dispute and the
nature of the disagreement. If such notice is delivered, then the Chief
Operating Officer of Buyer and the President and/or Vice President of Seller
agree to meet regularly as necessary but at least once each day following
receipt of such notice and use reasonable efforts to reach an agreement on the
disputed items or amounts. If within 10 days following receipt of such notice
the Parties have not reached an agreement, either Party may submit the matter to
Arbitration in accordance with Section 15.17(b).

                  (b) Disputes Arising at or After Closing. The Parties agrees
to resolve all "Disputes" concerning this Agreement that arise after the Closing
pursuant to the provisions of this Section, such disputes to include without
limitation (i) the existence and scope of a Title Defect or Interest Addition,
(ii) the Title Defect Value of that portion of the Asset affected by a Title
Defect, (iii) the Value of an Interest Addition, (iv) the adequacy of Seller's
Title Defect curative materials submitted pursuant to Section 4.2, (v) the
Imbalance Volumes, or (vi) disputes concerning a Claim or amount to be paid by
an Indemnifying Party. The Parties agree to submit all Disputes to binding
arbitration in Denver, Colorado such arbitration to be conducted as follows: The
arbitration proceeding shall be governed by Colorado law and shall be conducted
in

                                      -40-

<PAGE>

accordance with the Commercial Arbitration Rules of the American Arbitration
Association ("AAA"), with discovery to be conducted in accordance with the
Federal Rules of Civil Procedure, and with any disputes over the scope of
discovery to be determined by the arbitrators. The arbitration shall be before a
three-person panel of neutral arbitrators, consisting of one person picked by
each side, and the two arbitrators so selected picking the third (with the panel
so picked being the "Arbitrators"). The Arbitrators shall conduct a hearing no
later than 90 days after submission of the matter to arbitration, and a written
decision shall be rendered by the Arbitrators within 30 days of the hearing. At
the hearing, the Parties shall present such evidence and witnesses as they may
choose, with or without counsel. Adherence to formal rules of evidence shall not
be required but the arbitration panel shall consider any evidence and testimony
that it determines to be relevant, in accordance with procedures that it
determines to be appropriate. Any award entered in the arbitration shall be made
by a written opinion stating the reasons and basis for the award made and the
prevailing party shall be awarded all or a portion of its costs and fees,
including attorney's fees, incurred in connection with the arbitration, such
apportionment to be made by the Arbitrators. Any payment due pursuant to the
arbitration shall be made within 15 days of the Arbitrators' decision. The final
decision may be filed in a court of competent jurisdiction and may be enforced
by any Party as a final judgment of such court. Except as provided above, each
party shall bear its own costs and expenses of the arbitration; provided,
however, the costs of employing the Arbitrators shall be borne 50% by the Seller
and 50% by the Buyer.

         15.18. Disclaimer of Representations and Warranties. Except as
expressly set forth in this Agreement, the Parties each disclaim all liability
and responsibility for any other representation, warranty, statements or
communications (orally or in writing) to the other Party (including, but not
limited to, any information contained in any opinion, information or advice that
may have been provided to any such Party by any partner, officer, member,
trustee, beneficiary, stockholder, director, employee, agent, consultant,
member, representative or contractor of such disclaiming Party or its affiliates
or any engineer or engineering firm, or other agent, consultant or
representative) wherever and however made, including, but not limited to, those
made in any data room and any supplements or amendments thereto or during any
negotiations. Without limiting the generality of the foregoing, none of the
Parties makes any representation or warranty as to (a) the amount, value,
quality or deliverability of petroleum, natural gas or other reserves
attributable to the Assets, (b) any geological, engineering or other
interpretations of economic valuation, or (c) predictions as to when any event
will or will not occur or whether the event is likely to occur.

         15.19. No Recording. Seller and Buyer agree not to record all or any
portion of this Agreement in any county or other public records.

                                      -41-

<PAGE>

         Executed on the dates set forth in the acknowledgments below but
effective as of the Effective Time.

                                    BUYER:

                                    Bill Barrett Corporation

                                    By: /s/ J. Frank Keller
                                        ----------------------------------------
                                        J. Frank Keller, Chief Operating Officer

                                    SELLER:

                                    Independent Production Company, Inc.

                                    By: /s/ Bill Cagle
                                        ----------------------------------------
                                        Bill Cagle, President

                                    Sapphire Bay, LLC
                                    By its Managing Member,
                                    Independent Production Company, Inc.

                                    By: /s/ Bill Cagle
                                        ----------------------------------------
                                        Bill Cagle, President

                                      -42-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00072-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00072-of-00352.parquet"}]]