Document:

Execution

 

CARRY AGREEMENT

 

This Carry Agreement
(this “Agreement”) dated as of August 12, 2013, but effective as of June 1, 2013 (the “Effective Date”),
is between American Eagle Energy Corporation, a Nevada corporation (“AEEC”), and AMZG, Inc., a Nevada corporation
and successor by name change to American Eagle Energy Inc. (“AMZG” and together with AEEC, “AEE”),
each of whose address is 2549 W. Main Street, Suite 202, Littleton, Colorado 80120, and USG Properties Bakken I, LLC, a Delaware
limited liability company (“USG”), whose address is 601 Travis Street, Suite 1900, Houston, TX 77022. AEE and
USG are sometimes referred to herein as a "Party" or the "Parties." NextEra Energy Gas Producing
LLC, a Delaware limited liability company (“NextEra”) joins in this Agreement for the purposes set forth in
Section 8.1.

 

RECITALS

 

A.AEE and
NextEra, an affiliate of USG, are parties to Carry Agreement dated as of April 19, 2012, as amended by First Amendment to Carry
Agreement dated as of July 15, 2012 (as amended, the “Original Carry Agreement”). AEE and USG are also parties
to A.A.P.L. Form 610 -1989 Model Form Operating Agreement dated May 1, 2011 and A.A.P.L. Form 610 -1989 Model Form Operating Agreements
November 1, 2011 (together, the “Joint Operating Agreements”) respectively covering the Spyglass and West Spyglass
areas in Divide County, North Dakota as such terms are specifically defined in the Joint Operating Agreements.

 

B.Pursuant
to the Area of Mutual Interest provisions of the Joint Operating Agreements AEE and NextEra jointly acquired leasehold and mineral
interests in certain lands located in Divide County, North Dakota, as more fully set forth in Exhibit A (the "Property").

 

C.
Pursuant to Purchase, Sale and Option Agreement of even date herewith among AEEC, Next Era and USG (the “Purchase Agreement”),
except for any properties excluded under the Purchase Agreement, USG
has agreed to (i) sell a portion of its interests in the Assets (as defined in the Purchase Agreement with such portion of the
Assets being defined herein as the “First Property”) to AEEC and (ii) grant to AEEC an option (the “Option”)
to purchase another equal portion of USG’s remaining interest in the Assets (the “Second Property”).

 

D.USG
desires to facilitate the further development of and production from the Property by paying certain amounts of the Costs of Drilling
and Completing (defined below) incurred by AEE associated with the Drilling and Completion of five Carry Wells (defined below),
in exchange for certain assignment of Earned Wellbore Interests (defined below) or payments attributable to the proceeds from such
Earned Wellbore Interests.

 

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

 

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ARTICLE l

DEFINED TERMS

 

1.1As used
herein the terms “AEEC,” “AMZG,” “Agreement,” “Effective Date,”
“Joint Operating Agreements”, “NextEra”, “Party,” “Parties”,
“Property”, “Purchase Agreement” and “USG,” shall have the meaning assigned
thereto above, and the following terms shall have the following meanings:

 

"AEE
Carry Interest" means, subject to the limitations contained in this Agreement, the working interest of AEE in a Carry
Well that is carried by USG in accordance with Section 2.2, which for purposes of this definition of AEE Carry Interest
shall include (i) the working interest owned by AEE as of the date of this Agreement and (ii) if the closing on the First Property
under the Purchase Agreement occurs then the working interest acquired pursuant to the Purchase Agreement in the First Property
as of the first day of the month in which drilling operations begin on the first Carry Well and, (iii) if AEE exercises the Option,
then the working interest acquired by AEE in the Second Property as of the first day of the month in which drilling operations
begin on the first Carry Well.

 

"AEE
Carry Costs" means, with respect to a Carry Well, the sum of (i) all Costs of Drilling and Completing such Carry Well
plus (ii) 50% of the lease operating expenses charged for the period from the date such well was Drilled and Completed until the
date of Payout for such well in each case to the extent such costs and charges are attributable to the AEE Carry Interest and that
are actually paid by USG.

 

"AEE Proceeds of Production" means, with respect to a Carry Well, all of the proceeds
attributable to an Earned Wellbore Interest (including any Earned Wellbore Interest that is part of an executed and recorded Wellbore
Assignment from AEE to USG) from the sale of the Hydrocarbons produced from such Carry Well, after deducting all applicable ad
valorem, severance and excise taxes, lease operating expenses, royalty, overriding royalty, production payment, net profits interest
and other non-cost bearing burdens.

 

"Approved
Drilling Locations" means the undeveloped drilling locations identified in the Drilling Schedule.

 

"Business
Days" means any day other than a Saturday, Sunday or a day on which national banks are allowed by the Federal Reserve
to be closed; and "days," without further qualification, means calendar days.

 

"Carry
Obligation" has the meaning assigned thereto in Section 2.2.

 

"Carry
Well" has the meaning assigned thereto in Section 2.1.

 

"Carry
Well AFE" means, with respect to a Carry Well, an Authorization for Expenditure identifying such well as a Carry Well
and setting forth AEE's best estimate of the total Costs of Drilling and Completing such Carry Well, together with a specific description
of the surface location, a wellbore diagram and a calculation of the Costs of Drilling and Completing such Carry Well.

 

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"Commencement
Date" means, with respect to a Carry Well, 7:00a.m. on the first day on which Hydrocarbons are first sold from such Carry
Well after such Carry Well has been Drilled and Completed.

 

"Costs
of Drilling and Completing" means, with respect to a Carry Well, all costs and expenses arising out of or related to the
Drilling and Completing of such Carry Well.

 

“CPEC”
means Crescent Point Energy Corp.

 

"Drill
and Complete" means with respect to a Carry Well, the conducting of all operations and activities for and related to either
(i) the drilling, completion, equipping, and tying in such well, and any other operations or activities with respect to such Carry
Well prior to achieving commercial production from such Carry Well, together with all services, equipment, materials and supplies,
and labor and overhead associated therewith, including constructing and upgrading access roads, obtaining and preparing the location,
obtaining permits and title opinions, obtaining drilling contractor services and consultants reasonably necessary for the drilling
of such Carry Well, obtaining mud chemicals, pipe and supplies, moving in, rigging up, drilling, logging and testing, setting casing,
perforating, cementing, conducting fracture stimulation and the drilling out of frac plugs, installing the wellhead, well equipment,
pump jack and other pumps, Christmas tree, valves and tubing, and other activities necessary prior to marketing production from
such Carry Well or (ii) the Plugging and Abandoning of such Subject Well; but shall not include the following costs (referred to
herein as "Joint Costs"): (i) any activities related to construction of a gathering system, or (ii) deepening
a Carry Well or recompleting a Carry Well in a different zone, in each case prior to the Commencement Date for such Carry Well,
unless agreed to pursuant to Section 2.l(d). "Drilling and Completing" and other derivatives of the phrase
"Drill and Complete" shall be construed accordingly.

 

"Drilling
Schedule" means the drilling schedule set forth in Exhibit B.

 

"Earned
Wellbore Interest" means for each Carry Well, for a limited term from the Commencement Date for such Carry Well until
the Termination Date for such Carry Well, an undivided 50% of the AEE Carry Interest and the associated right, title and interest
in and to the AEE Proceeds of Production attributable to: (1) the applicable Carry Well and associated wellbore and all Hydrocarbons
and other substances produced therewith, (2) all equipment, and other personal property and fixtures associated with such Carry
Well, and (3) the oil and gas leases described in Exhibit A insofar and only insofar as such leases cover the right to produce
from the wellbore of such Carry Well.

 

"Governmental
Authority" means any federal, state, local, tribal or foreign government, court of competent jurisdiction, administrative
or regulatory body, agency, bureau, commission, governing body of any national securities exchange or other governmental authority
or instrumentality in any domestic or foreign jurisdiction, and any division of any of the foregoing.

 

"Hydrocarbons"
means oil, gas, well gas, casinghead gas, condensate, and all components of any of them (including liquids and products produced
from any of them).

 

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"Law"
means any federal, state, local, tribal, foreign, or other law, statute, legislation, constitution, principle of common law, resolution,
ordinance, code, proclamation, treaty, convention, order, rule, regulation or decree, whether legislative, municipal, administrative,
or judicial in nature, enacted, adopted, passed, promulgated, made, or put into effect by or under the authority of any Governmental
Authority, including those relating to health, safety or the environment.

 

“Ordinary
Course Liens” has the meaning assigned thereto in Section 2.5.

 

"Payout"
means, with respect to any Carry Well, either (i) 7:00 a.m. on the day upon which the AEE Proceeds of Production attributable to
such Carry Well equal the USG Total Payout for such Carry Well; or (ii) 7:00 a.m. on the day upon which AEE has paid the Prepayment
Amount to USG for such Carry Well in accordance with Section 2.6 or Section 2.8.

 

"Person"
means any individual, governmental agency, corporation, limited liability company, partnership, joint venture, trust, estate, unincorporated
organization or other entity or organization of any kind and shall include all Governmental Authorities.

 

"Plug
and Abandon" means all steps necessary or appropriate to plugging and abandonment obligations that are required by law,
contract or reasonably prudent oil field practice, including all surface and subsurface restoration (including any re-vegetation),
the removal and disposal of all facilities and materials, the capping of wells, burying of all flow lines, complying with all applicable
bonding requirements and filing all reports and notices. "Plugged and Abandoned," "Plugging and Abandoning"
and other derivatives of the phrase "Plug and Abandon" shall be construed accordingly.

 

"Prepayment
Amount" means, as of a certain date following the Commencement Date, with respect to a Carry Well, the greater of (i)
the USG Total Payout for such Carry Well minus the AEE Proceeds of Production for such Carry Well, or (ii) zero.

 

"Term"
has the meaning assigned thereto in Section 6.1.

 

"Termination
Date" means, with respect to a Carry Well, the date on which Payout for such well occurs.

 

"Third
Party" means any Person that is (i) not a Party to this Agreement or (ii) not a Person that received an assignment of
this Agreement that was made in accordance with its terms.

 

"USG Total
Payout" means, as of a certain date following the Commencement Date, with respect to a Carry Well, 112% of the AEE Carry
Costs for such Carry Well.

 

"USG Working
Interest" means the working interest of USG in a Carry Well, but excluding, if applicable, any AEE Carry Interest or Earned
Wellbore Interest (and including in such exclusion any working interest in such Carry Well included in an executed and recorded
Wellbore Assignment from AEE to USG pursuant to an Earned Wellbore Interest).

 

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"Wellbore
Assignment" means a term assignment substantially in the form of Exhibit C.

 

 

ARTICLE 2

CARRY AND PAYMENT

 

2.1Drilling
of Carry Wells.

 

(a)Subject
to all the terms and conditions of this Agreement, AEE shall Drill and Complete five oil and gas wells (each a "Carry Well")
in which USG shall participate pursuant to the terms of this Agreement, at the Approved Drilling Locations within the Property.
Each Carry Well shall be drilled to a depth sufficient to test the Middle Bakken formation. USG shall not be required to pay the
Carry Obligation for any Carry Well with respect to any operation to sidetrack or deepen such Carry Well (unless such operation
is to reach the Middle Bakken formation and not the result of any negligence by AEE), or to recomplete such Carry Well in a shallower
zone, unless USG elects, at its sole discretion, to participate in such operation under the Joint Operating Agreement, in which
case, if AEE also elects to participate in such operation, the Subject Obligation shall apply to such operation. AEE shall use
commercially reasonable efforts to drill all five Carry Wells in the order set forth in the Drilling Schedule and within six months
from the Effective Date; provided AEE may drill a Carry Well in a different order from time to time if AEE deems, in its
good faith judgment (and with prior notice to and opportunity to comment by USG), such a variation is necessary or prudent due
to a change in circumstances affecting conduct, timing or costs of drilling operations. If after the first Carry Well has been
Drilled USG desires to alter the Drilling Schedule or Approved Drilling Locations, and if such changes are acceptable to AEE after
good faith consideration and collaboration with USG, then the Parties agree to amend the Drilling Schedule to reflect such changes,
which changes may also impact the timing of Drilling because of permitting and title review processes.

 

(b)If,
after exercising its best commercial efforts, AEE is unable to secure any permits from a Governmental Authority, or any consents
from a Third Party, required for AEE to perform any of its obligations hereunder, with respect to any particular Carry Well (including
any permits required for the drilling or operation of any Carry Wells, and any consents required to transfer the properties, rights
and interests earned by USG hereunder), AEE shall use commercially reasonable efforts to locate an alternate drilling location
(which alternate drilling location shall not already be an Approved Drilling Location and which location is acceptable to USG).
If AEE is not able to locate such an alternate drilling location after collaboration with USG, or USG does not agree with such
alternate drilling location, notwithstanding anything to the contrary in this Agreement, AEE shall not be required to drill, and
USG shall not be required to participate in, or pay any Costs of Drilling and Completing with respect to, such Carry Well and the
Carry Obligation for such Carry Well shall cease to apply.

 

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(c)Except
as stated in the last sentence of Section 2.1(b) and in Section 2.2(b), USG shall be required to satisfy the Carry Obligation
for each of the five Carry Wells regardless of the success or failure of any of the Carry Wells. For any Carry Well Drilled and
Completed under this Agreement, AEE agrees to use its best efforts to flow such Carry Well to sales as soon as practicable following
completion.

 

2.2Costs
of Carry Wells.

 

(a)USG
agrees to be responsible for and pay 100% of the AEE Carry Interest share of the Costs of Drilling and Completing each Carry Well
Drilled and Completed hereunder together with all lease operating expenses attributable to the Earned Wellbore Interest for each
Carry Well (with respect to each Carry Well, the "Carry Obligation"); provided that (i) any Joint Costs for such
Carry Well, shall be borne by each Party in accordance with its working interest in the applicable Carry Well, in each case notwithstanding
any Earned Wellbore Interest in favor of USG and/or any Wellbore Assignment from AEE to USG pursuant to an Earned Wellbore Interest;
(ii) if any working interest owner other than the Parties does not consent to operations related to any Carry Well, USG
shall pay all costs associated with any and all non-consenting owners’ working interests in any Subject Well and shall retain
all right, title and interest in all such non-consenting owners’ working interests until the payout provided for by either
the applicable Joint Operating Agreements or the relevant Governmental Authority ; and (iii) except as provided in Section 8.2
with respect to any interest of CPEC, the Carry Obligation shall not extend to any Third Parties participating in such Carry Well.
For the avoidance of doubt, USG shall pay its share of costs associated with the USG Working Interest Share in each Carry Well
in accordance with the applicable Joint Operating Agreement.

 

(b)For
each proposed Carry Well, AEE shall provide USG with the notice and accompanying information required under Article VI B of the
applicable JOA for a proposed drilling operation. USG shall have 30 days after receipt of such notice to elect to not treat such
proposed drilling operation as a Carry Well and, if USG so elects, the number of Carry Wells covered by this Agreement shall be
reduced by one or more, as applicable, and neither party shall have any obligation under this Agreement with respect to such well
but the applicable JOA shall continue to apply to such well and proposed drilling operation. If USG does not timely make the election
described above in this Section 2.2(b), then such proposed well under Section 2.1 shall be a Carry Well and subject to the terms
and conditions of this Agreement.

 

2.3Payment of
Costs of Drilling and Completing each Carry Well.

 

(a)AEE
shall provide USG with a Carry Well AFE for each Carry Well at least 20 Business Days prior to the anticipated spud date for such
Carry Well. In connection with any Carry Well AFE, AEE agrees to provide any additional information regarding the Carry Well that
is reasonably requested by USG.

 

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(b)Subject
to Section 2.2, USG shall pay AEE, in its capacity as operator of such Carry Well, the AEE Carried Interest share and the
USG Working Interest share of the Costs of Drilling and Completing each Carry Well within 10 Business Days following receipt of
a (i) Carry Well AFE, or (ii) any undisputed invoice relating to the Costs of Drilling and Completing such Carry Well. The Parties
agree, however, that the Carry Obligation shall not apply in the event, and to the extent, costs exceed 120% of any Carry Well
AFE. At the point when costs exceed 120% of any Carry Well AFE, the Parties agree that all costs shall be borne on a “heads
up” basis with USG and AEE each being responsible for any additional costs incurred in proportion to their respective working
interest on an after Payout basis.

 

(c)In
the event USG fails to pay any Costs of Drilling and Completing pursuant to Section 2.3(b) and such payment is not disputed
by USG in accordance with Section 9.19 (or if such non-payment continues following the date of resolution of any such dispute
against USG, then from such date of resolution), such delinquent amounts shall bear interest until paid at the lesser of 10% per
annum or the maximum rate chargeable by Law. If USG fails to cure any such nonpayment within 20 Business Days of receiving written
notice of default by AEE and such payment is not disputed by USG in accordance with Section 9.19 (or if such non-payment
continues for 20 days following the date of resolution of any such dispute against USG, then after such 20-day time period), AEE
may, at its sole discretion and upon notice of election to USG, elect any one or more of the following:

 

(i)
terminate this Agreement;

 

(ii) withhold
USG's share, if any, of production from any existing Carry Wells and apply proceeds from the sale thereof as an offset against
the total delinquent amount due under this Agreement until such time as 100% of the delinquent amounts has been recouped; or

 

(iii) pursue
any other right or remedy now or hereafter existing at Law or in equity by statute or otherwise, Carry to Section 9.14 and
Section 9.19.

 

2.4Non-Assignment
Repayment. For each Carry Well, until the earlier of the date Payout has occurred or the effective date of a Wellbore Assignment
delivered to USG pursuant to Section 2.5 for such Carry Well, USG shall be entitled to the AEE Proceeds of Production attributable
to the Earned Wellbore Interest with respect to such Carry Well (a "Non-Assignment Repayment"). Payments made
pursuant to this Section 2.4 shall be made at the same times and in the same manner as AEE's payment of royalties relating
to such Carry Well. AEE shall provide written notice of the occurrence of Payout with respect to a Carry Well within ten Business
Days of such Payout. For the avoidance of doubt, USG shall also be entitled to all proceeds of production attributable to the USG
Working Interest in each Carry Well.

 

2.5Wellbore
Assignment Option.

 

(a)For
any Carry Well, at any time following the Commencement Date for such Carry Well until the Termination Date for such Carry Well,
USG shall have the option (the "Assignment Option") at its sole discretion and in lieu of receiving a Non-Assignment
Repayment for a Carry Well, to require AEE to deliver a Wellbore Assignment for such Carry Well. Within ten Business Days after
AEE's receipt of a written election from USG to receive a Wellbore Assignment for such Carry Well, AEE shall execute, acknowledge
and deliver to USG a Wellbore Assignment conveying the Earned Wellbore Interest for such Carry Well, effective as of the first
day of the month following AEE's receipt of such notice until the Termination Date. This obligation shall apply successively to
any incremental increase in the AEE Carry Interest as a result of AEE acquiring the First Property or the Second Property.

 

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(b)Each Wellbore
Assignment shall be made subject to the terms and conditions of any existing operating agreement and any applicable pooling or
communitization agreement with a third party; provided as between AEE and USG, in the event of a conflict between the terms and
conditions of any existing operating agreement, including the applicable Joint Operating Agreement, or any applicable pooling or
communitization agreement, and the terms and conditions of this Agreement (including the terms and conditions with respect to the
payment of costs for the Drilling and Completing of wells), this Agreement shall govern.

 

(c)Upon
the effective date of any Wellbore Assignment by AEE pursuant to Section 2.5(a), AEE shall have no further obligation to
deliver, and USG shall have no further right to receive, any Non-Assignment Repayment from any Carry Well covered by such Wellbore
Assignment, pursuant to Section 2.4 or otherwise, except as USG is entitled to production proceeds pursuant to such Wellbore
Assignment. Other than liens or encumbrances arising by, through or under USG in the ordinary course of business (“Ordinary
Course Liens”), USG agrees to not subject any Carry Well to any lien or encumbrance or any hydrocarbon sales contracts,
production payments or other forward-sales contracts arising nor will USG create or assign to any third party any overriding royalty,
net profits, interest or other non-cost bearing interest covering such Earned Wellbore Interest. USG agrees to cause any Ordinary
Course Liens to be released at or prior to Payout.

 

2.6 Balloon
Payment. If Payout for any Carry Well that has been Completed has not occurred as of the second anniversary of the Commencement
Date for such Carry Well, then within 30 days after such second anniversary, AEE shall pay in cash delivered by wire transfer of
same day funds to USG the Prepayment Amount for such Carry Well. With respect to any Carry Well that is a dry hole, within 30 days
after the second anniversary of drilling rig release for such Carry Well, AEE shall pay in cash delivered by wire transfer of same
day funds to USG the Prepayment Amount for such Carry Well. In the event AEE fails to pay any amounts owed in accordance with this
paragraph, USG shall have the right to withhold any reassignment due to AEE of any Earned Wellbore Interest and further withhold
AEE's share of production attributable thereto and apply proceeds from the sale thereof as an offset against the total delinquent
amount due under this Agreement until such time as 100% of the delinquent amounts has been recouped.

 

2.7USG
Remedies for Non-Payment. In the event AEE fails to pay to USG any Non-Assignment Repayment amount pursuant to Section 2.4
or a Prepayment Amount pursuant to Section 2.6 and such payment is not disputed in accordance with Section 9.19 (or
if such non-payment continues following the date of resolution of any such dispute against AEE, then from such date of resolution),
such delinquent amounts shall bear interest until paid at the lesser of 10% per annum or the maximum rate chargeable by Law. If
AEE fails to cure any such nonpayment within 20 days of receiving written notice of default by USG or in the event AEE fails to
deliver Wellbore Assignment(s) pursuant to Section 2.5 upon written exercise of the Assignment Option, and such payment
or assignment is not disputed by AEE in accordance with Section 9.19 (or if such non-payment or failed assignment continues
for 20 days following the date of resolution of any such dispute against AEE, then after such 20-day time period), USG may, at
its sole discretion and upon notice of election to AEE, elect any one or more of the following:

 

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(a)terminate this
Agreement;

 

(b)pursue
its remedies under the applicable Joint Operating Agreement; or

 

(c)pursue
any other right or remedy now or hereafter existing at Law or in equity by statute or otherwise, subject to Section 9.14
and Section 9.19.

 

2.8USG Remedies
for Failure to Drill. In the event AEE fails to comply with any of its drilling obligations pursuant Section 2.1
with no payment under dispute in accordance with Section 9.19, and AEE fails to commence substantive drilling efforts within
30 days after receiving written notice of default from USG, then the Parties agree that: (i) the Carry Obligation and any other
obligations of USG under this Agreement shall immediately terminate, (ii) AEE shall assign to USG all of AEE’s right, title
and interest in the proposed drilling proration units insofar and only insofar as such interest covers the proposed wellbore for
any undrilled Carry Wells agreed to under Section 2.1, and (iii) USG shall have the immediate right to propose any well(s)
to satisfy the AEE’s outstanding drilling obligations and retain a contract operator to drill and operate such well(s) on
USG’s behalf. These remedies shall be in addition to any other right or remedy now or hereafter existing at Law or in equity
by statute or otherwise, subject to Section 9.14 and Section 9.19.

 

2.9Prepayment
of Prepayment Amount. At any time following the Commencement Date for a Carry Well, AEE shall have the right to prepay the
outstanding Prepayment Amount for any Carry Well, in cash delivered by wire transfer of same day funds to USG, which, for the avoidance
of doubt, shall be deemed to cause "Payout" for such Carry Well, in accordance with the definition of such term.

 

 

ARTICLE 3

REASSIGNMENT UPON
PAYOUT

 

3.1Reassignment.
Subject to Section 2.6, within 10 Business Days after the Termination Date for a Carry Well and AEE has provided written
notice of the same to USG and USG has been furnished with evidence of such Payout, in the event that USG has exercised the Assignment
Option and received a Wellbore Assignment from AEE in accordance with Section 2.5 for such Carry Well, USG shall execute,
acknowledge and deliver to AEE such documents as AEE may reasonably request to evidence the Termination Date for such Carry Well
and the automatic reversion unto AEE of the interest conveyed pursuant to such Wellbore Assignment (including, without limitation,
an assignment conveying to AEE 100% of the right, title and interest in such Carry Well that USG obtained pursuant to any such
Wellbore Assignment covering such Carry Well, but expressly excluding all non-consenting working interests received by USG in any
Carry Well, effective as of the first day of the month following the Termination Date for such Carry Well, and such Wellbore Assignment
shall contain a special warranty of title as set forth Exhibit C).

 

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3.2Amounts
in Excess of Payout. AEE shall be entitled to its respective proceeds of production attributable to its working interest for
a Carry Well following Payout for such Carry Well. In the event that USG shall receive any proceeds from such Carry Well to which
AEE is entitled under this Agreement, then USG shall promptly forward any such proceeds to AEE.

 

ARTICLE 4

AEE'S REPRESENTATIONS AND WARRANTIES

 

Each of
AEEC and AMZG makes the following representations and warranties as of the Effective Date, as of the date of delivery of each Carry
Well AFE and as of the date of delivery of each Wellbore Assignment to USG:

 

4.1Organization
and Standing. Each of AEEC and AEEI represents that it is a corporation duly organized, validly existing and in good standing
under the laws of the State of Nevada and is duly qualified to carry on its business in the State where the Property is located.

 

4.2Power.
AEE has all requisite power and authority to carry on its business as presently conducted. The execution and delivery of this Agreement
does not, and the fulfillment of and compliance with the terms and conditions hereof will not violate, or be in conflict with,
any provision of such entity's governing documents, or any provision of any agreement or instrument to which such entity is a party
or by which it is bound, or any judgment, decree, order, statute, rule or regulation applicable to such entity.

 

4.3Authorization
and Enforceability. This Agreement constitutes AEE'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 of whether such enforceability is considered in a proceeding
in equity or at Law.

 

4.4Liability
for Brokers' Fees. AEE has not directly or indirectly incurred any liability, contingent or otherwise, for brokers' or finders'
fees relating to the transactions contemplated by this Agreement for which USG shall have any responsibility whatsoever.

 

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4.5No
Bankruptcy. There are no bankruptcy proceedings pending, being contemplated by or, threatened against AEE.

 

4.6Qualified
to Hold and Operate Carry Wells. AEE is qualified under all applicable Laws to own the Carry Wells, and AEE is qualified under
all applicable Laws to operate the Carry Wells.

 

4.7Litigation.
There is no suit, action, investigation, arbitration proceeding, or legal, administrative or other proceeding pending before any
Governmental Authority or arbitrator against AEE or otherwise affecting the Carry Wells that might (a) result in impairment or
loss of AEE's title to any part of the Carry Wells, (b) hinder or impede AEE's ownership or operation of the Carry Wells, or (c)
hinder or impede the ability of AEE to consummate the transactions contemplated hereby; nor, to AEE's knowledge, is any such proceeding
threatened. Seller is not in default under any material order, writ,
injunction, or decree of any Governmental Authority. 

 

4.8Compliance
with Law. AEE has not received a written notice of any violation of any Law, or any judgment, decree or order of any court,
applicable to the Carry Wells, which remains uncured.

 

4.9Title.
Except as listed on Schedule 4.9 (a) the Carry Wells are not subject to or burdened by any lien, security interest, mortgage, deed
of trust or other encumbrance arising by, through or under AEE, and (b) AEE has not created or assigned to any third party any
overriding royalty, production payment, net profits, interest or other non-cost bearing interest that would affect the Carry Wells.

 

4.10Environmental.
All material permits or other governmental authorizations required under any environmental Law in connection with the ownership
or operation of the portion of the Property owned by AEE have been obtained and are in full force and effect, and, to AEE's knowledge,
the portion of the Property owned by AEE is currently in material compliance therewith. AEE does not have any knowledge of any
release, disposal, event, condition, circumstance, activity, practice or incident concerning any land, facility, asset or property
included in the portion of the Property owned by AEE or the lands covered thereby that would reasonably be expected to interfere
with or prevent the ability of the portion of the Property owned by AEE to be owned and operated in compliance with all applicable
environmental Laws.

 

4.11Foreign
Person. Neither AEEC nor AMZG is a "foreign person" within the meaning of Section 1445 of the Internal Revenue Code
of 1986, as amended.

 

4.12Hydrocarbon
Sales. The Property and the Carry Wells are not subject to any hydrocarbon sales contracts, production payments or other forward-sales
contracts that are not listed on Schedule 4.12 attached hereto or that have not been disclosed to USG in writing pursuant
to Section 9.3.

 

    	12

    	 

    

 

ARTICLE 5

USG'S REPRESENTATIONS
AND WARRANTIES

 

USG makes
the following representations and warranties as of the Effective Date, as of the date of each payment of Costs of Drilling and
Completing and as of the date of delivery of each Wellbore Assignment to AEE:

 

5.1Organization
and Standing. USG is a 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 the State where the Property is located.

 

5.2Power.
USG has all requisite power and authority to carry on its business as presently conducted. The execution and delivery of this Agreement
does not, and the fulfillment of and compliance with the terms and conditions hereof will not violate, or be in conflict with,
any material provision of USG's governing documents, or any material provision of any agreement or instrument to which USG is a
party or by which it is bound, or any judgment, decree, order, statute, rule or regulation applicable to USG.

 

5.3Authorization
and Enforceability. This Agreement constitutes USG'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.

 

5.4Liability
for Brokers' Fees. USG has not directly or indirectly incurred any liability, contingent or otherwise, for brokers' or finders'
fees relating to the transactions contemplated by this Agreement for which AEE shall have any responsibility whatsoever.

 

5.5USG's Evaluation.
USG is not acquiring the Earned Wellbore Interests for sale in connection with any distribution thereof or any other security related
thereto within the meaning of Securities Act of 1933, as amended. USG is an experienced and knowledgeable investor in the oil and
gas business. USG has been advised by and has relied solely upon its own expertise in legal, tax and other professional counsel
concerning the transaction contemplated by this Agreement, the Property and the value thereof. USG (a) is familiar with investments
of the nature of the Earned Wellbore Interests, (b) understands that this investment involves substantial risks, (c) has adequately
investigated the Earned Wellbore Interests, (d) has substantial knowledge and experience in financial and business matters such
that it is capable of evaluating, and has evaluated, the merits and risks inherent in an investment in the Earned Wellbore Interests,
and (e) is able to bear the economic risks of such investment. USG has had the opportunity to visit with AEE and meet with its
officers and other representatives to discuss the Property, has received all materials, documents and other information that USG
deems necessary or advisable to evaluate an investment in the Earned Wellbore Interests, and has made its own independent examination,
investigation, analysis and evaluation of an investment in the Earned Wellbore Interests, including its own estimate of the value
of the Earned Wellbore Interests. USG has undertaken such due diligence as USG deems adequate.

 

    	13

    	 

    

 

5.6Qualified
to Hold the Property. USG is eligible under all applicable Laws to own the Property.

 

5.7Foreign Person.
USG is not a "foreign person" within the meaning of Section 1445 of the Internal Revenue Code of 1986, as amended.

 

ARTICLE 6

TERM

 

6.1Term.
The "Term" of this Agreement shall begin on the Effective Date and, unless earlier terminated by mutual written
consent of the Parties or by AEE pursuant to Section 2.3(c)(i) or USG pursuant to Section 2.7 or Section 2.8,
shall continue until such time as Payout has occurred for all Carry Wells (less any Carry Well that USG has no Carry Obligation
pursuant to 2.1(b)). Subject to Section 2.6, the obligations of USG to make any payment and any re-assignment of the Earned
Wellbore Interest to AEE pursuant to Section 3.1 and the provisions of Article 9 (excluding Section 9.11 which shall be limited
as set forth therein) shall survive the termination of this Agreement.

 

ARTICLE 7

JOINT OPERATING AGREEMENT

 

7.1Proposal
of Operations. Notwithstanding anything to the contrary in the Joint Operating Agreement, USG shall not propose any operation
on the Property for the drilling of any well under either Joint Operating Agreement until at least 60 days after the time that
all five Carry Wells have been Drilled and Completed.

 

ARTICLE 8

TERMINATION
OF ORIGINAL CARRY AGREEMENT; CPEC

 

8.1Termination.
USG, AEE and NextEra each agree that in consideration of the amounts paid by AEE under the Original Carry Agreement and the amounts
to be paid at the Closing under the Purchase Agreement with respect to the First Property AEE will have satisfied an undivided
50% of its obligations under the Original Carry Agreement and that if AEE exercises the Option and purchases the Second Property
that AEE’s obligations under the Original Carry Agreement will have been completely satisfied.

 

8.2CPEC
Interests. In the event CPEC elects to not participate in any of the Carry Wells, USG shall assume both AEE’s and USG’s
rights and perform AEE’s and USG’s obligations under the applicable Joint Operating Agreement with respect to such
non-consenting interest. In the event CPEC does elect to participate in a Carry Well, then AEE shall assign to USG a Wellbore Assignment
covering an amount of AEE’s working interest in such well equal to CPEC’s interest in such well and USG shall pay to
AEE as the purchase price for such interest an amount equal to the product of the working interest in such well so assigned multiplied
by the per percentage point working interest purchase price allocated to the applicable leases and lands under the terms of the
Purchase Agreement. Such assignment shall be effective as of the Effective Time (as defined in the Purchase Agreement) and shall
be free and clear of all liens, claims and other encumbrances arising by, through or under AEE since the Effective Time. For purposes
of illustration only, attached hereto as Schedule 8.2 are estimated before and after payout interests for AEE and USG under the
three cases of the AEE Carry Interest increasing as set forth above in the definition of AEE Carry Interest and in each such case
with the assumption that CPEC has elected not to participate in any Carry Well. The numbers shown on Schedule 8.2 are estimates
only and may change based on numerous factors, including, without limitation, CPEC’s actual elections, third party statutory
and contractual elections and definitive title work.

 

    	14

    	 

    

 

ARTICLE 9

MISCELLANEOUS

 

9.1Exhibits.
The Exhibits to this Agreement are hereby incorporated in this Agreement by reference and constitute a part of this Agreement.

 

9.2Expenses.
Except as otherwise specifically provided, all fees, costs and expenses incurred by USG or AEE in negotiating this Agreement or
in consummating the transactions contemplated by this Agreement shall be paid by the Party incurring such fees, costs or expenses,
including engineering, land, title, legal and accounting fees, costs and expenses.

 

9.3 Notices.
All notices and other communications under this Agreement shall be in writing and delivered (a) personally, (b) by registered or
certified mail with postage prepaid, and return receipt requested, (c) by nationally recognized commercial overnight courier service
with charges prepaid, or (d) by facsimile transmission, directed to the intended recipient as follows:

 

If to AEE:

 

c/o American
Eagle Energy Corporation

2549 W.
Main Street, Suite 202

Littleton,
Colorado 80120

Attn: Brad
Colby

Telephone:
(303) 798-5235

Facsimile:
(303) 798-5767

 

If to
USG:

 

USG
Properties Bakken I, LLC

601
Travis Street, Suite 1900

Houston,
Texas 77022

Attention:
Michael Jessop

Telephone:
(713) 374-1534

Facsimile:
(713) 751-0375

Email:
michael.jessop@nee.com

 

A notice or other communication
shall be deemed delivered on the earlier to occur of (i) its actual receipt, (ii) the fifth Business Day following its
deposit in registered or certified mail, with postage prepaid and return receipt requested, (iii) the first Business Day
following its deposit with a nationally recognized commercial overnight courier service, with charges prepaid, or (iv) the
date it is sent by confirmed facsimile transmission (if sent before 5:00 p.m. local time of the receiving party on a Business
Day) or the next Business Day (if sent after 5:00 p.m. of such local time or sent on a day that is not a Business Day). Any
Party may change the address to which notices and other communications hereunder can be delivered by giving the other Party
notice in the manner herein set forth.

 

    	15

    	 

    

 

9.4Amendments.
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.

 

9.5Headings.
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 m· provisions of this Agreement.

 

9.6Counterparts: Fax Signatures. The Parties
may execute this Agreement in any number of counterparts, each of which shall be deemed an original instrument, but all of which
together shall constitute one instrument. This Agreement shall become operative when each Party has executed and delivered at
least one counterpart. This Agreement may be delivered by facsimile or electronic (pdf) transmission, and a facsimile, electronic,
or similar transmission evidencing execution shall be effective as a valid and binding agreement between the Parties for all purposes.

 

9.7Governing
Law; Venue; Wavier of Jury Trial. This Agreement and the transactions contemplated hereby shall be construed in accordance
with, and governed by, the laws of the State of North Dakota, without regard to its conflicts of laws rules. The Parties hereby
consent to personal jurisdiction in the State of Colorado for any action arising out of this Agreement or the transactions contemplated
hereby. Subject to Section 9.19, all actions or proceedings with respect to, arising directly or indirectly in connection with,
out of, related to, or from this Agreement or the transactions contemplated hereby shall be exclusively litigated in the Federal
courts for the District of Colorado located in the City and County of Denver, Colorado; provided that, to the extent that such
courts refuse to exercise jurisdiction hereunder, the Parties agree that jurisdiction shall be proper in any court in which jurisdiction
may be obtained. EACH OF THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT AND ANY AGREEMENT
CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR
WRITTEN) OR ACTIONS OF ANY PARTY; THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES ENTERING INTO THIS AGREEMENT.

 

9.8Entire Agreement.
This Agreement constitutes 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.

 

    	16

    	 

    

 

9.9Relationship
of the Parties. This Agreement is not intended to create, and shall not be construed to create, an association for profit,
a trust, a joint venture, a mining partnership or other relationship of partnership, or entity of any kind between the Parties
that would render either Party liable for the actions of the other Party. Neither Party shall have any right, power or authority
to act, or create any duty or obligation, express or implied, on behalf of any other Party, or to hold itself out as a representative
or agent of the other Party. For every purpose the Parties understand and agree that the liabilities of the Parties shall be several,
not joint or collective, and that each Party shall be solely responsible for its own obligations.

 

9.10Binding
Effect. This Agreement shall be binding upon, and shall inure to the benefit of, the Parties, and their respective successors
and assigns.

 

9.11 Survival.
The representations, warranties, indemnities and covenants contained in this Agreement shall survive indefinitely; provided that
any representation with regards to AEE's title to each Carry Well shall terminate as of the date a Wellbore Assignment is delivered
for such Carry Well and shall be superseded by the title representation set forth in such Wellbore Assignment; provided further,
that the representations and warranties of AEE and USG as set forth in Sections 4.6 through 4.12 and Sections
5.6 and 5.7, respectively, shall terminate one year after the end of the Term.

 

9.12No Third-Party
Beneficiaries. This Agreement is intended only to benefit the

Parties and their respective permitted
successors and assigns.

 

9.13Waiver.
The waiver or failure of any Party to enforce any provision of this Agreement shall not be construed or operate as a waiver of
any further breach of such provision or of any other provision of this Agreement.

 

9.14Limitation
on Damages. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, EACH PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR DIRECT
DAMAGES ONLY, AND IN NO EVENT SHALL A PARTY BE LIABLE TO THE OTHER PARTY, ANY SUCCESSORS IN INTEREST OR ANY BENEFICIARY OR ASSIGNEE
OF THIS AGREEMENT FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT, SPECIAL, OR PUNITIVE DAMAGES ARISING OUT OF THIS AGREEMENT OR ANY
BREACH HEREOF. THIS SECTION 9.14 SHALL APPLY NOTWITHSTANDING THE SOLE, JOINT OR CONCURRENT NEGLIGENCE, FAULT OR RESPONSIBILITY
OF THE PARTY WHOSE LIABILITY IS WAIVED BY THIS PROVISION, OR ANY OTHER EVENT OR CONDITION, WHETHER ANTICIPATED OR UNANTICIPATED,
AND REGARDLESS OF WHETHER PRE-EXISTING PRIOR TO THE DATE OF THIS AGREEMENT.

 

9.15Assignment.
No Party may assign any or all of its rights under this Agreement without the prior written consent of the other Party; provided
USG may assign this Agreement to an affiliate of USG that also receives an assignment of all of USG's interest in the Property
and expressly assumes USG's obligations under this Agreement and the Joint Operating Agreements, without the prior written consent
of AEE.

 

    	17

    	 

    

 

9.16Severability.
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 pot1ions of this Agreement, and such portions
that are not invalid shall be given effect without the invalid portion.

 

9.17Confidentiality.
Neither Party shall make any press release or other public announcement regarding the existence of this Agreement, the contents
hereof or the transactions contemplated hereby without the prior written consent of the other Party; provided, however, that the
foregoing shall not restrict disclosures to the extent (i) necessary for a Party to perform this Agreement, (ii) required (upon
advice of counsel) by applicable securities or other laws or regulations or the applicable rules of any stock exchange having jurisdiction
over the Parties or their respective affiliates or (iii) such Party has given the other Party a reasonable opportunity to review
such disclosure prior to its release and no objection is raised; and provided, further, that, in the case of clauses (i) and (ii),
each Party shall use its reasonable efforts to consult with the other Party regarding the contents of any such release or announcement
prior to making such release or announcement.

 

Notwithstanding anything in this section
to the contrary, the Parties shall keep all information and data relating to this Agreement, and the transactions contemplated
hereby, strictly confidential except for disclosures to authorized agents, bankers and/or representatives of the Parties and any
disclosures required to perform this Agreement; provided, however, that the foregoing shall not restrict disclosures that are required
(upon advice of counsel) by applicable securities or other laws or regulations or the applicable rules of any stock exchange having
jurisdiction over the Parties or their respective affiliates; and provided, further, that prior to making any such disclosures
to such representatives, agents or holders of preferential rights to purchase, the Party disclosing such information shall obtain
an undertaking of confidentiality from each such party.

  

9.18References;
Titles and Construction. All references in this Agreement to Exhibits, Schedules, Sections, and other subdivisions refer to
the Exhibits, Schedules, Sections, and other subdivisions of this Agreement unless expressly provided otherwise. Titles and headings
appearing at the beginning of any subdivision are for convenience only and do not constitute any part of any such subdivision and
shall be disregarded in construing the language contained in this Agreement. The words "this Agreement," "herein,"
"hereby," "hereunder" and words of similar import refer to this Agreement as a whole and not to any particular
subdivision unless expressly so limited. The phrases "this Section" and "this Subsection" and similar phrases
refer only to the Sections or Subsections hereof in which the phrase occurs. The word "or" is not exhaustive, and "including"
(and its various derivatives), means "including without limitation." Pronouns in masculine, feminine and neuter gender
shall be construed to include any other gender. Words in the singular form shall be construed to include the plural and words in
the plural form shall be construed to include the singular, unless the context otherwise requires. In the event an ambiguity or
question of intent or interpretation of this Agreement arises, this Agreement shall be construed as if jointly drafted by the Parties,
and no presumption or burden of proof shall arise favoring or disfavoring a Party as a result of authorship or drafting of any
provision of this Agreement.

 

    	18

    	 

    

 

9.19Dispute
Resolution.

 

(a) Unless otherwise
specified in this Agreement, all disputes arising under this Agreement between the Parties, including any such disputes related
to the interpretation of this Agreement (a "Dispute"), must be resolved in accordance with this Section 9.19,
through the use of binding arbitration administered by a panel of three arbitrators in accordance with the Commercial Arbitration
Rules of the American Arbitration Association (the "AAA"), as supplemented to the extent necessary to determine
any procedural appeal questions by the Federal Arbitration Act (Title 9 of the United States Code).

 

(b) In the
event of a Dispute, the Parties shall use their reasonable efforts to resolve such Dispute through negotiations between (i) senior
executives of the applicable Pm1ies, or (ii) delegated project managers of the applicable Parties with authority to resolve the
applicable Dispute.

 

(c) If, after
30 days following commencement of negotiations by initial notice of a Party of intent to negotiate a Dispute in accordance with
Section 9.19(b), the Parties have been unable to resolve the applicable Dispute through such negotiation in good faith on
behalf of each Party, arbitration of a Dispute may be initiated by a Party (a "Claimant") serving written notice
on the AAA and the other Party ("Respondent") that the Claimant has referred the Dispute to binding arbitration.
Claimant's notice initiating binding arbitration must describe in reasonable detail the nature of the Dispute and the facts and
circumstances relating thereto and identify the arbitrator Claimant has appointed. Respondent shall respond to Claimant within
30 days after receipt of Claimant's notice, identifying the arbitrator Respondent has appointed. All arbitrators must be neutral
parties who have never been officers, directors or employees of the Parties or any of their affiliates, and who have not performed
any work for either of the Parties or its affiliates. Arbitrators must have not less than seven years of experience as a lawyer
in the energy industry with experience in exploration and production issues. The two arbitrators so chosen shall select a third
arbitrator within 30 days after the second arbitrator has been appointed. If either the Respondent fails to name its Party appointed
arbitrator within the time permitted, or if the two arbitrators are unable to agree on a third arbitrator within 30 days from the
date the second arbitrator has been appointed, then the missing arbitrator(s) shall be selected by the AAA from its Large, Complex
Commercial Case Panel or the Center for Public Resources Panel of Distinguished Neutrals, giving due regard to the selection criteria
set forth above. The AAA shall select the missing arbitrator(s) not later than 90 days from initiation of arbitration.

 

(d)The hearing shall
be conducted in Denver, Colorado.

 

(e) The arbitrators
may not grant or award indirect, consequential, punitive or exemplary damages.

 

(f) In any
action under this Agreement, the arbitration and court costs and attorneys' fees of the Parties shall be borne in the manner determined
by the arbitrators.

 

    	19

    	 

    

 

 

 

 

 

 

    	20

    	 

    

 

EXECUTED as of the date first above written.

 

 

AMERICAN
EAGLE ENERGY CORPORTION

 

By: Brad
Colby                                                             

 

Name: President                                                            

 

Title: President                                                              

 

 

 

AMERICAN
EAGLE ENERGY INC.

 

By: Brad
Colby                                                             

 

Name: President                                                           

 

Title: President                                                             

 

 

 

USG PROPERTIES
BAKKEN I, LLC

 

By: /s/
Lawrence A. Wall, Jr.                                     

 

Name: Lawrence
A. Wall, Jr.                                      

 

Title: President                                                             

 

 

 

NEXTERA GAS
PRODUCING, LLC

 

By:_____________________________________

 

Name:__________________________________

 

Title:___________________________________

 

    	21

    	 

    

 

Exhibit A

 

The Property

 

    	22

    	 

    

 

Exhibit B

 

Drilling Schedule

 

    	23

    	 

    

 

Exhibit C

 

WELLBORE ASSIGNMENT

 

 

THIS WELLBORE ASSIGNMENT (this “Assignment”),
effective as of ________________, ____ at 12:01 a.m., local time in Divide County, North Dakota (the “Effective Time”),
is from American Eagle Energy Corporation, a Nevada corporation (“ASSIGNOR”), with an address at 2549 W. Main Street,
Suite 202, Littleton, Colorado 80120 to USG Properties Bakken I, LLC a Delaware limited liability company (“ASSIGNEE”),
with an address at 601 Travis Street, Suite 1900, Houston, Texas 77002.

 

For and in consideration of the sum of ten
dollars ($10.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, ASSIGNOR
does hereby assign to ASSIGNEE, subject to the reversionary interest described below, __% of Assignor’s right, title and
interest in and to the following assets INSOFAR AND ONLY INSOFAR as such assets cover and pertain directly to production of oil,
gas and other minerals from the WELLBORE ONLY OF THE [________________] WELL (the “Well”) with a surface location
in the [_____________________________________] (such right title an interest in such wellbore being referred to as the “Property”)
EXCEPTING AND RESERVING unto Assignor all of Assignor’s right, title and interest in such assets otherwise relating
to or in any other manner pertaining to the lands located in [_____________________]:

 

(a)The oil, gas and mineral leases described in Exhibit
A, insofar as they cover any or all of the lands described in Exhibit A (the “Lands”), together with all rights, privileges
and obligations appurtenant thereto, including rights in any unit in which said leases or Lands are included (collectively the
“Leases”);

 

(b)The Well and all water source, water injection and other
injection and disposal wells and systems located on the Leases or the Lands, and used in connection with the Well, together with
all equipment, facilities, and fixtures used in operating Well, or producing, storing, treating or transporting oil, gas, water,
or other products or byproducts, including pipelines, flow lines, gathering systems, tank batteries, improvements, fixtures, inventory,
movables and immovables (collectively the “Lease Property and Equipment”);

 

(c)To the extent assignable or transferable, all permits,
licenses, easements, rights-of-way, servitudes, surface leases, surface use agreements, and similar rights and interests applicable
to or used in operating the Well (collectively the “Permits and Easements”);

 

(d)To the extent assignable or transferable, all contracts
and contractual rights, obligations and interests, insofar as they relate to the Well (the “Related Contracts”); and

 

(e)To the extent assignable or transferable, all other tangibles,
miscellaneous interests and other assets on or used in connection with the Well (collectively the “Miscellaneous Personal
Property”), including records, files, and other data that relate to the Well and lease, land and well files, production records,
title opinions, contract, regulatory and environmental files, and geological and geophysical information (collectively the “Property
Records”);

 

    	24

    	 

    

 

EXCEPTING AND RESERVING to Assignor a reversionary interest
of 100% of the interests assigned hereby such reversionary interest to be automatically effective as of the Termination Date as
such term is defined in Carry Agreement dated as of July __, 2013 between Assignor and Assignee.

 

ASSIGNOR warrants that it has not granted,
created or reserved any burden, claim or title defect that would cause its Net Revenue Interest in the Well to be less than the
Net Revenue Interest for such Well set forth in Exhibit A or its Working Interest in the Well to be greater than the Working Interest
for such Well set forth in Exhibit A, except for any such excess Working Interest accompanied by a proportionate increase in the
Net Revenue Interest for such Well. ASSIGNOR quitclaims to ASSIGNEE the benefit of all previous warranties in ASSIGNOR’s
chain of title, insofar as they may cover the Property.

 

For purposes of this Assignment, “Working
Interest” shall mean, with respect to the Well the percentage interest in the Well that is burdened with the obligation to
bear and pay costs and expenses of maintenance, development and operations in connection with such Well, without regard to royalties,
overriding royalties, net profits interests or other similar burdens.

 

For purposes of this Assignment, “Net
Revenue Interest” shall mean, with respect to the Well, the interest in and to all hydrocarbons produced, saved, and sold
from or allocated to the Well, after giving effect to all royalties, overriding royalties, production payments, carried interests,
net profits interests, reversionary interests, and other burdens upon, measured by, or payable out of production therefrom.

 

Except for the special warranty of title
set forth above, ASSIGNOR CONVEYS THE PROPERTY TO ASSIGNEE WITHOUT AND EXPRESSLY DISCLAIMS ANY EXPRESS, STATUTORY OR IMPLIED WARRANTY
OR REPRESENTATION OF ANY KIND, INCLUDING WARRANTIES RELATING TO (i) THE CONDITION OR MERCHANTABILITY OF THE PROPERTY, (ii) THE
FITNESS OF THE PROPERTY FOR ANY PARTICULAR PURPOSE, OR (iii) CONFORMITY TO MODELS OR SAMPLES OF MATERIALS. ASSIGNEE HAS INSPECTED
(OR HAS BEEN GIVEN THE OPPORTUNITY TO INSPECT), THE PROPERTY AND IS SATISFIED AS TO THE PHYSICAL, OPERATING, REGULATORY COMPLIANCE,
SAFETY AND ENVIRONMENTAL CONDITION (BOTH SURFACE AND SUBSURFACE) OF THE PROPERTY AND EXPRESSLY AND KNOWINGLY ACCEPTS THE PROPERTY
AS IS, WHERE IS, AND WITH ALL FAULTS AND DEFECTS AND IN ITS PRESENT CONDITION AND STATE OF REPAIR. Without limiting the generality
of the foregoing, ASSIGNOR makes no representation or warranty as to (i) the amount, value, quality, quantity, volume or deliverability
of any oil, gas or other minerals or reserves (if any) in, under or attributable to the Property, (ii) the physical, operating,
regulatory compliance, safety or environmental condition of the Property, (iii) the geological or engineering condition of
the Property or any value thereof; (iv) the ability of the Property to generate income or profits; or (v) the cost of owning
or operating the Property.

 

    	25

    	 

    

 

ASSIGNOR AND ASSIGNEE AGREE THAT, TO THE
EXTENT REQUIRED BY APPLICABLE LAW TO BE EFFECTIVE, THE DISCLAIMERS OF CERTAIN REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS
ASSIGNMENT ARE “CONSPICUOUS” DISCLAIMERS FOR THE PURPOSE OF ANY APPLICABLE LAW.

 

To the extent that the Leases cover state
or federal leases, separate assignments on the appropriate state or federal forms required for filing in the applicable state or
federal records are being delivered contemporaneously herewith. Such separate assignments are intended to cover the same interests
that are being conveyed hereby.

 

This Agreement shall be governed, construed
and enforced in accordance with the laws of North Dakota without regard to conflicts of law.

 

This Assignment shall extend to and shall
be binding upon the successors and assigns of ASSIGNOR and ASSIGNEE.

 

THIS ASSIGNMENT is executed by the parties as of the Effective
Time.

 

ASSIGNOR:

 

American Eagle Energy Corporation

 

By: _____________________________

__________________,

__________________

 

 

ASSIGNEE:

 

USG Properties Bakken I, LLC

 

By: _____________________________

__________________,

__________________

 

 

 

	STATE OF ________________	§
	 	§ ss.
	COUNTY OF ______________	§

 

 

This instrument was acknowledged before
me on _____________, 201_, by _____________, as ____________ of ____________________, a ____________________, on behalf of said
_____________ __________________. Witness my hand and official seal.

 

 

_____________________________

NOTARY PUBLIC

 

 

	(SEAL)	My commission expires: _________________, 20___

 

    	26

    	 

    

 

	STATE OF ________________	§
	 	§ ss.
	COUNTY OF ______________	§

 

 

This instrument was acknowledged before
me on _____________, 201_, by _____________, as ____________ of ____________________, a ____________________, on behalf of said
_____________ __________________. Witness my hand and official seal.

 

 

_____________________________

NOTARY PUBLIC

 

 

	(SEAL)	My commission expires: _________________, 20___

 

    	27

    	 

    

 

Schedule 4.9

 

    	28

    	 

    

 

Schedule 4.12

 

    	29

    	 

    

 

Schedule 8.2

 

    	30Execution

 

FARM-OUT AGREEMENT

 

This Farm-Out Agreement
(this “Agreement”) dated as of August 12, 2013, but effective as of June 1, 2013 (the “Effective Date”),
is between American Eagle Energy Corporation, a Nevada corporation (“AEEC”), and AMZG, Inc., a Nevada corporation
and successor by name change to American Eagle Energy Inc. (“AMZG” and together with AEEC, “AEE”),
each of whose address is 2549 W. Main Street, Suite 202, Littleton, Colorado 80120, and USG Properties Bakken I, LLC, a Delaware
limited liability company (“USG”), whose address is 601 Travis Street, Suite 1900, Houston, TX 77022. AEE and
USG are sometimes referred to herein as a "Party" or the "Parties."

 

RECITALS

 

A.AEE and
USG are parties to A.A.P.L. Form 610 -1989 Model Form Operating Agreement dated May 1, 2011 and A.A.P.L. Form 610 -1989 Model Form
Operating Agreement November 1, 2011 (together, the “Joint Operating Agreements”), respectively, covering the
Spyglass and West Spyglass areas in Divide County, North Dakota as such areas are specifically defined in the Joint Operating Agreements.

 

 

B.
Pursuant to Purchase, Sale and Option Agreement of even date herewith among AEEC, Next Era and USG (the “Purchase Agreement”),
except for any properties excluded under the Purchase Agreement, USG
has agreed to (i) sell a portion of its interests in the Assets (as defined in the Purchase Agreement with such portion of the
Assets being defined herein as the “First Property”) to AEEC and (ii) grant to AEEC an option (the “Option”)
to purchase another equal portion of USG’s remaining interest in the Assets (the “Second Property”). 

 

C.USG desires to obtain a farmout
from AEE for six wells to be located on portions of the Properties pursuant to which farmout USG will pay AEE’s share and
USG’s share of the Costs of Drilling and Completing associated with the Subject Wells (defined below) and thereby earn assignments
of a portion of AEE’s interests in such wells, all as provided herein.

 

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

 

ARTICLE l

DEFINED TERMS

 

1.1As used
herein the terms “AEEC,” “AMZG,” “Agreement,” “Effective Date,”
“Joint Operating Agreements”, “Party,” “Parties”, “Property”,
“Purchase Agreement” and “USG,” shall have the meaning assigned thereto above, and the following
terms shall have the following meanings:

 

"AEE
Subject Interest" means the working interest of AEE in a Subject Well as the same may be assigned to USG pursuant to Section
2.4 and which for purposes of this definition of AEE Subject Interest shall include (i) the working interest owned by AEE on
the date of this Agreement and (ii) if the closing on the First Property under the Purchase Agreement occurs then the working interest
to be acquired pursuant to the Purchase Agreement in the First Property as of the first day of the month in which drilling operations
begin on the first Subject Well and, (iii) if AEE exercises the Option, then the working interest in the Second Property as of
the first day of the month in which drilling operations begin on the first Subject Well.

 

    	 

    	 

    

 

"AEE
Subject Costs" means, with respect to a Subject Well, the sum of (i) all Costs of Drilling and Completing such Subject
Well plus (ii) all lease operating expenses charged for the period from the date such well was Drilled and Completed until the
date of Payout for such well in each case to the extent such costs
and charges are attributable to the AEE Subject Interest and that are actually paid by USG.

 

"AEE Proceeds of Production" means, with respect to
a Subject Well, the proceeds attributable to the AEE Subject Interest from the sale of the Hydrocarbons produced from such Subject
Well, after deducting all applicable ad valorem, severance and excise taxes, lease operating expenses, royalty, overriding royalty,
production payment, net profits interest and other non-cost bearing burdens.

 

"Approved
Drilling Locations" means the undeveloped drilling locations identified in the Drilling Schedule, or such alternative
drilling locations as may be mutually agreed by the parties.

 

"Business
Days" means any day other than a Saturday, Sunday or a day on which national banks are allowed by the Federal Reserve
to be closed; and "days," without further qualification, means calendar days.

 

"Commencement
Date" means, with respect to a Subject Well, 7:00a.m. on the first day on which Hydrocarbons are first sold from such
Subject Well after such Subject Well has been Drilled and Completed.

 

“Conversion
Date” means, with respect to a Subject Well, the date on which Payout for such well occurs.

 

"Costs
of Drilling and Completing" means, with respect to a Subject Well, all costs and expenses arising out of or related to
the Drilling and Completing of such Subject Well.

 

"Drill
and Complete" means with respect to a Subject Well, the conducting of all operations and activities for and related to
either (i) the drilling, completion, equipping, and tying in such well, and any other operations or activities with respect to
such Subject Well prior to achieving commercial production from such Subject Well, together with all services, equipment, materials
and supplies, and labor and overhead associated therewith, including constructing and upgrading access roads, obtaining and preparing
the location, obtaining permits and title opinions, obtaining drilling contractor services and consultants reasonably necessary
for the drilling of such Subject Well, obtaining mud chemicals, pipe and supplies, moving in, rigging up, drilling, logging and
testing, setting casing, perforating, cementing, conducting fracture stimulation and the drilling out of frac plugs, installing
the wellhead, well equipment, pump jack and other pumps, Christmas tree, valves and tubing, and other activities necessary prior
to marketing production from such Subject Well or (ii) the Plugging and Abandoning of such Subject Well; but shall not include
the following costs (referred to herein as "Joint Costs"): (i) any activities related to construction of a gathering
system, or (ii) deepening a Subject Well or recompleting a Subject Well in a different zone, in each case prior to the Commencement
Date for such Subject Well, unless agreed to pursuant to the applicable Joint Operating Agreement. "Drilling and Completing"
and other derivatives of the phrase "Drill and Complete" shall be construed accordingly.

 

    	2

    	 

    

 

"Drilling
Schedule" means the drilling schedule set forth in Exhibit B.

 

“Farmin Assignment”
has the meaning assigned thereto in Section 2.5.

 

"Governmental
Authority" means any federal, state, local, tribal or foreign government, court of competent jurisdiction, administrative
or regulatory body, agency, bureau, commission, governing body of any national securities exchange or other governmental authority
or instrumentality in any domestic or foreign jurisdiction, and any division of any of the foregoing.

 

"Hydrocarbons"
means oil, gas, well gas, casinghead gas, condensate, and all components of any of them (including liquids and products produced
from any of them).

 

"Law"
means any federal, state, local, tribal, foreign, or other law, statute, legislation, constitution, principle of common law, resolution,
ordinance, code, proclamation, treaty, convention, order, rule, regulation or decree, whether legislative, municipal, administrative,
or judicial in nature, enacted, adopted, passed, promulgated, made, or put into effect by or under the authority of any Governmental
Authority, including those relating to health, safety or the environment.

 

“Ordinary
Course Liens” has the meaning assigned thereto in Section 2.5.

 

"Payout"
means, with respect to each Subject Well, 7:00 a.m. on the day upon which the AEE Proceeds of Production attributable to such Subject
Well equal 112% of the AEE Subject Costs for such Subject Well.

 

"Person"
means any individual, governmental agency, corporation, limited liability company, partnership, joint venture, trust, estate, unincorporated
organization or other entity or organization of any kind and shall include all Governmental Authorities.

 

"Plug
and Abandon" means all steps necessary or appropriate to plugging and abandonment obligations that are required by law,
contract or reasonably prudent oil field practice, including all surface and subsurface restoration (including any re-vegetation),
the removal and disposal of all facilities and materials, the capping of wells, burying of all flow lines, complying with all applicable
bonding requirements and filing all reports and notices. "Plugged and Abandoned," "Plugging and Abandoning"
and other derivatives of the phrase "Plug and Abandon" shall be construed accordingly.

 

    	3

    	 

    

 

“Reversion
Assignment” has the meaning assigned thereto in Section 2.5.

 

“Reversionary
Interest” means the portion of the AEE Subject Interest that automatically reverts to AEE on the Conversion Date, as
set forth more fully in each Farmin Assignment.

 

"Subject
Obligation" has the meaning assigned thereto in Section 2.2.

 

“Subject
Well” has the meaning assigned thereto in Section 2.1.

 

"Subject
Well AFE" means, with respect to a Subject Well, an Authorization for Expenditure identifying such well as a Subject Well
and setting forth AEE's best estimate of the total Costs of Drilling and Completing such Subject Well, together with a specific
description of the surface location, a wellbore diagram and a calculation of the Costs of Drilling and Completing such Subject
Well.

 

"Term"
has the meaning assigned thereto in Section 6.1.

 

"Third
Party" means any Person that is (i) not a Party to this Agreement or (ii) not a Person that received an assignment of
this Agreement that was made in accordance with its terms.

 

"USG Working
Interest" means the working interest of USG in a Subject Well, but excluding any AEE Subject Interest.

 

"Wellbore
Assignment" means an assignment substantially in the form of Exhibit C.

 

"
Wellbore Interest" means, for each Subject Well, a specified percentage of AEE's right, title and interest in and
to: (i) the applicable Subject Well and associated wellbore and all Hydrocarbons and other substances produced therewith, (ii)
all equipment, contracts and other personal property and fixtures associated with such Subject Well and (iii) the oil and gas leases
described in Exhibit A insofar and only insofar as such leases cover the right to produce from the wellbore of such Subject
Well from the Commencement Date for such Subject Well.

 

 

ARTICLE 2

COSTS AND PAYMENT

 

2.1Drilling
of Subject Wells.

 

(a)
Subject to all the terms and conditions of this Agreement, AEE shall Drill and Complete six oil and gas wells (each a "Subject
Well") in which USG shall participate pursuant to the terms of this Agreement, at the Approved Drilling Locations within
the Property. Each Subject Well shall be drilled to a depth sufficient to test either the Middle Bakken formation or the Three
Forks formation, as specified on the Drilling Schedule. AEE shall use commercially reasonable efforts to drill all six Subject
Wells in the order set forth in the Drilling Schedule and within 6 months from the Effective Date; provided AEE may drill
a Subject Well in a different order from time to time if AEE deems, in its good faith judgment (and with prior notice to and opportunity
to comment by USG), such a variation is necessary or prudent due to a change in circumstances affecting conduct, timing or costs
of drilling operations. If after the first Subject Well has been Drilled USG desires to alter the Drilling Schedule or Approved
Drilling Locations, and if such changes are acceptable to AEE after good faith consideration and collaboration with USG, then the
Parties agree to amend the Drilling Schedule to reflect such changes, which changes may also impact the timing of Drilling because
of permitting and title review processes

 

    	4

    	 

    

 

(b)If,
after exercising its reasonable commercial efforts, AEE is unable to secure any permits from a Governmental Authority, or any consents
from a Third Party, required for AEE to perform any of its obligations hereunder, with respect to any particular Subject Well (including
any permits required for the drilling or operation of any Subject Wells, and any consents required to transfer the properties,
rights and interests earned by USG hereunder), AEE shall use commercially reasonable efforts to locate an alternate drilling location
(which alternate drilling location shall not already be an Approved Drilling Location and which location is acceptable to USG).
If AEE is not able to locate such an alternate drilling location after collaboration with USG, or USG does not agree with such
alternate drilling location, notwithstanding anything to the contrary in this Agreement, AEE shall not be required to drill, and
USG shall not be required to participate in, or pay any Costs of Drilling and Completing with respect to, such Subject Well and
the Subject Obligation for such Subject Well shall cease to apply.

 

(c)Except
as stated in the last sentence of Section 2.1(b) and in Section 2.2(b), USG shall be required to satisfy the Subject Obligation
for each of the six Subject Wells regardless of the success or failure of any of the Subject Wells. For any Subject Well Drilled
and Completed under this Agreement, AEE agrees to use its reasonable commercial efforts to flow such Subject Well to sales as soon
as practicable following completion.

 

2.2Costs
of Subject Wells.

 

(a)USG
agrees to be responsible for and pay 100% of the AEE Subject Interest share of the Costs of Drilling and Completing each Subject
Well Drilled and Completed hereunder together with all lease operating and other expenses attributable to the 100% Wellbore Interest
for each Subject Well through Payout for such well (with respect to each Subject Well, the "Subject Obligation");
provided that the Subject Obligation shall not extend to any Third Parties participating in such Subject Well. For the avoidance
of doubt, USG shall pay its share of costs associated with the USG Working Interest Share in each Subject Well in accordance with
the applicable Joint Operating Agreement. Further, USG shall pay all costs associated with any and all non-consenting owners’
working interests in any Subject Well and shall retain all right, title and interest in all such non-consenting owners’ working
interests until the payout provided for by either the applicable Joint Operating Agreements or the relevant Governmental Authority.
For purposes of illustration only, attached hereto as Schedule 2.2 are estimated before and after payout interests for AEE and
USG under the three cases of the AEE Subject Interest increasing as set forth above in the definition of AEE Subject Interest and
in each such case with the assumption that Crescent Point Energy Corp. has elected not to participate in any Subject Well. The
numbers shown on Schedule 2.2 are estimates only and may change based on numerous factors, including, without limitation, third
party statutory and contractual elections and definitive title work.

 

    	5

    	 

    

 

(b)For each
proposed Subject Well, AEE shall provide USG with the notice and accompanying information required under Article VI B of the applicable
JOA for a proposed drilling operation. USG shall have 30 days after receipt of such notice to elect to not treat such proposed
drilling operation as a Subject Well and, if USG so elects, the number of Subject Wells covered by this Agreement shall be reduced
by one or more, as applicable, and neither party shall have any obligation under this Agreement with respect to such well but the
applicable JOA shall continue to apply to such well and proposed drilling operation. If USG does not timely make the election described
above in this Section 2.2(b), then such proposed well under Section 2.1 shall be a Subject Well and subject to the terms and conditions
of this Agreement.

 

2.3Payment of
Costs of Drilling and Completing each Subject Well.

 

(a)AEE
shall provide USG with a Subject Well AFE for each Subject Well at least 20 Business Days prior to the anticipated spud date for
such Subject Well. In connection with any Subject Well AFE, AEE agrees to provide any additional information regarding the Subject
Well that is reasonably requested by USG.

 

(b)Subject
to Section 2.2, USG shall pay AEE, in its capacity as operator of such Subject Well, the AEE Subject Interest share and
the USG Working Interest share of the Costs of Drilling and Completing each Subject Well within 10 Business Days following receipt
of a (i) Subject Well AFE, or (ii) any undisputed invoice relating to the Costs of Drilling and Completing such Subject Well. The
Parties agree, however, that the Subject Obligation shall not apply in the event, and to the extent, costs exceed 120% of any Subject
Well AFE. At the point when costs exceed 120% of any Subject Well AFE, the Parties agree that all costs shall be borne on a “heads
up” basis with USG and AEE each being responsible for any additional costs incurred in proportion to their respective working
interest on an after Payout basis.

 

(c)In
the event USG fails to pay any Costs of Drilling and Completing pursuant to Section 2.3(b) and such payment is not disputed
by USG in accordance with Section 9.19 (or if such non-payment continues following the date of resolution of any such dispute
against USG, then from such date of resolution), such delinquent amounts shall bear interest until paid at the lesser of 10% per
annum or the maximum rate chargeable by Law. If USG fails to cure any such nonpayment within 20 Business Days of receiving written
notice of default by AEE and such payment is not disputed by USG in accordance with Section 9.19 (or if such non-payment
continues for 20 Business Days following the date of resolution of any such dispute against USG, then after such 20-day time period),
AEE may, at its sole discretion and upon notice of election to USG, elect any one or more of the following:

 

    	6

    	 

    

 

(i)
terminate this Agreement;

 

(ii) withhold
USG's share, if any, of production from any existing Subject Wells and apply proceeds from the sale thereof as an offset against
the total delinquent amount due under this Agreement until such time as 100% of the delinquent amounts has been recouped; or

 

(iii) pursue any
other right or remedy now or hereafter existing at Law or in equity by statute or otherwise, subject to Section 9.14 and
Section 9.19.

 

2.4USG
Remedies for Failure to Drill. In the event AEE fails to comply with any of its drilling obligations pursuant Section 2.1
with no payment under dispute in accordance with Section 9.19, and AEE fails to commence substantive drilling efforts within
30 days written notice of default by USG, then the Parties agree that: (i) the Subject Obligation and any other obligations of
USG under this Agreement shall immediately terminate, (ii) AEE shall assign to USG all of its right, title and interest in the
proposed drilling proration units insofar and only insofar as such interest covers the proposed wellbore for any undrilled Subject
Wells agreed to under Section 2.1, and (iii) USG shall have the immediate right to propose any well(s) to satisfy the AEE’s
outstanding drilling obligations and retain a contract operator to drill and operate such well(s) on USG’s behalf. These
remedies shall be in addition to any other right or remedy now or hereafter existing at Law or in equity by statute or otherwise,
subject to Section 9.14 and Section 9.19.

 

2.5Wellbore
Assignments for Subject Wells. Within 10 Business Days after the Commencement Date of each Subject Well, AEE shall deliver
to USG a Wellbore Assignment (the “Farmin Assignment”) for such well assigning 100% of AEE’s Subject Interest
in such well effective from the first day of the month preceding the commencement of drilling operations for such Subject Well
until the Conversion Date and, following the Conversion Date, 70% of AEE’s Subject Interest in such well. If requested by
USG, if AEE acquires a greater AEE Subject Interest in a Subject Well pursuant to a purchase of the First Property or the Second
Property AEE shall deliver to USG a confirmatory assignment covering such additional wellbore interest. Within 10 Business Days
after the Conversion Date for a Subject Well and AEE has provided written notice of such Conversion Date with supporting data to
USG, USG shall execute, acknowledge and deliver to AEE such documents as AEE may reasonably request to evidence such conversion
event and the reversion to AEE of the Reversionary Interest, including, without limitation, a conveyance (the “Reversion
Assignment”) conveying to AEE 30% of the right, title and interest received by USG in the
Farmin Assignment or assignments which shall expressly exclude all non-consenting working interests received by USG in any Subject
Well, effective as of the first day of the month following the Conversion Date for such Subject Well, and such Wellbore
Assignment shall contain a special warranty of title as set forth Exhibit C. For the avoidance of doubt, USG shall not be
entitled to an assignment of a Wellbore Interest with respect to any Subject Well that is not completed as a well capable of producing
oil or gas and the intent to Plug and Abandon has been filed or will be filed within thirty (30) days with the relevant Governmental
Authority following cessation of drilling operations. Other than liens or encumbrances arising by, through or under USG in the
ordinary course of business (“Ordinary Course Liens”), USG agrees to not subject any Subject Well to any lien
or encumbrance or any hydrocarbon sales contracts, production payments or other forward-sales contracts nor will USG create or
assign to any third party any overriding royalty, net profits, interest or other non-cost bearing interest that will burden the
Reversionary Interest. USG agrees to cause any Ordinary Course Liens to be released at or prior to Payout.

 

    	7

    	 

    

 

ARTICLE 3

REASSIGNMENT UPON
PAYOUT

 

 

3.1Amounts
in Excess of Payout. AEE shall be entitled to its respective proceeds of production attributable to the Reversionary Interest
for a Subject Well following the Conversion Date for such Subject Well. In the event that USG shall receive any proceeds from such
Subject Well to which AEE is entitled under this Agreement, then USG shall promptly forward any such proceeds to AEE.

 

ARTICLE 4

AEE'S REPRESENTATIONS AND WARRANTIES

 

Each of
AEEC and AMZG makes the following representations and warranties as of the Effective Date, as of the date of delivery of each Subject
Well AFE and as of the date of delivery of each Wellbore Assignment to USG:

 

4.1Organization
and Standing. Each of AEEC and AMZG represents that it is a corporation duly organized, validly existing and in good standing
under the laws of the State of Nevada and is duly qualified to carry on its business in the State where the Property is located.

 

4.2Power.
AEE has all requisite power and authority to carry on its business as presently conducted. The execution and delivery of this Agreement
does not, and the fulfillment of and compliance with the terms and conditions hereof will not violate, or be in conflict with,
any provision of such entity's governing documents, or any provision of any agreement or instrument to which such entity is a party
or by which it is bound, or any judgment, decree, order, statute, rule or regulation applicable to such entity.

 

4.3Authorization
and Enforceability. This Agreement constitutes AEE'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 of whether such enforceability is considered in a proceeding
in equity or at Law.

 

4.4Liability
for Brokers' Fees. AEE has not directly or indirectly incurred any liability, contingent or otherwise, for brokers' or finders'
fees relating to the transactions contemplated by this Agreement for which USG shall have any responsibility whatsoever.

 

4.5No
Bankruptcy. There are no bankruptcy proceedings pending, being contemplated by or, threatened against AEE.

 

    	8

    	 

    

 

4.6Qualified
to Hold and Operate Subject Wells. AEE is qualified under all applicable Laws to own the Subject Wells, and AEE is qualified
under all applicable Laws to operate the Subject Wells.

 

4.7Litigation.
There is no suit, action, investigation, arbitration proceeding, or legal, administrative or other proceeding pending before any
Governmental Authority or arbitrator against AEE or otherwise affecting the Subject Wells that might (a) result in impairment or
loss of AEE's title to any part of the Subject Wells, (b) hinder or impede AEE's ownership or operation of the Subject Wells, or
(c) hinder or impede the ability of AEE to consummate the transactions contemplated hereby; nor, to AEE's knowledge, is any such
proceeding threatened. AEE is not in default under any material order, writ, injunction, or decree of any Governmental Authority.

 

4.8Compliance
with Law. AEE has not received a written notice of any violation of any Law, or any judgment, decree or order of any court,
applicable to the Subject Wells, which remains uncured.

 

4.9Title.
Except as listed on Schedule 4.9 (a) the Subject Wells are not subject to or burdened by any lien, security interest, mortgage,
deed of trust or other encumbrance arising by, through or under AEE, and (b) AEE has not created or assigned to any third party
any overriding royalty, production payment, net profits, interest or other non-cost bearing interest that would affect the Subject
Wells.

 

4.10Environmental.
All material permits or other governmental authorizations required under any environmental Law in connection with the ownership
or operation of the portion of the Property owned by AEE have been obtained and are in full force and effect, and, to AEE's knowledge,
the portion of the Property owned by AEE is currently in material compliance therewith. AEE does not have any knowledge of any
release, disposal, event, condition, circumstance, activity, practice or incident concerning any land, facility, asset or property
included in the portion of the Property owned by AEE or the lands covered thereby that would reasonably be expected to interfere
with or prevent the ability of the portion of the Property owned by AEE to be owned and operated in compliance with all applicable
environmental Laws.

 

4.11Foreign
Person. Neither AEEC nor AMZG is a "foreign person" within the meaning of Section 1445 of the Internal Revenue Code
of 1986, as amended.

 

4.12Hydrocarbon
Sales. The Property and the Subject Wells are not subject to any hydrocarbon sales contracts, production payments or other
forward-sales contracts that are not listed on Schedule 4.12 attached hereto or that have not been disclosed to USG in writing
pursuant to Section 9.3.

 

    	9

    	 

    

 

ARTICLE 5

USG'S REPRESENTATIONS
AND WARRANTIES

USG makes
the following representations and warranties as of the Effective Date, as of the date of each payment of Costs of Drilling and
Completing and as of the date of delivery of each partial Wellbore Assignment to AEE:

 

5.1Organization
and Standing. USG is a 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 the State where the Property is located.

 

5.2Power.
USG has all requisite power and authority to carry on its business as presently conducted. The execution and delivery of this Agreement
does not, and the fulfillment of and compliance with the terms and conditions hereof will not violate, or be in conflict with,
any material provision of USG's governing documents, or any material provision of any agreement or instrument to which USG is a
party or by which it is bound, or any judgment, decree, order, statute, rule or regulation applicable to USG.

 

5.3Authorization
and Enforceability. This Agreement constitutes USG'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.

 

5.4Liability
for Brokers' Fees. USG has not directly or indirectly incurred any liability, contingent or otherwise, for brokers' or finders'
fees relating to the transactions contemplated by this Agreement for which AEE shall have any responsibility whatsoever.

 

5.5USG's Evaluation.
USG is not acquiring the Wellbore Interests for sale in connection with any distribution thereof or any other security related
thereto within the meaning of Securities Act of 1933, as amended. USG is an experienced and knowledgeable investor in the oil and
gas business. USG has been advised by and has relied solely upon its own expertise in legal, tax and other professional counsel
concerning the transaction contemplated by this Agreement, the Property and the value thereof. USG (a) is familiar with investments
of the nature of the Wellbore Interests, (b) understands that this investment involves substantial risks, (c) has adequately investigated
the Wellbore Interests, (d) has substantial knowledge and experience in financial and business matters such that it is capable
of evaluating, and has evaluated, the merits and risks inherent in an investment in the Wellbore Interests, and (e) is able to
bear the economic risks of such investment. USG has had the opportunity to visit with AEE and meet with its officers and other
representatives to discuss the Property, has received all materials, documents and other information that USG deems necessary or
advisable to evaluate an investment in the Wellbore Interests, and has made its own independent examination, investigation, analysis
and evaluation of an investment in the Wellbore Interests, including its own estimate of the value of the Wellbore Interests. USG
has undertaken such due diligence as USG deems adequate.

 

5.6Qualified
to Hold the Property. USG is eligible under all applicable Laws to own the Property.

 

    	10

    	 

    

 

5.7Foreign Person.
USG is not a "foreign person" within the meaning of Section 1445 of the Internal Revenue Code of 1986, as amended.

 

ARTICLE 6

TERM

 

6.1Term.
The "Term" of this Agreement shall begin on the Effective Date and, unless earlier terminated by mutual written
consent of the Parties or by AEE pursuant to Section 2.3(c)(i) or USG pursuant to Section 2.4, shall continue until
such time as Payout has occurred for all Subject Wells (other than Subject Wells that USG is not required to participate in the
costs of Drilling and Completing pursuant to Section 2.1(b)). The obligations of USG to make any payment and any Reversion
Assignment and the provisions of Article 9 (excluding Section 9.1l, which shall be limited as set forth therein) shall survive
the termination of this Agreement.

 

ARTICLE 7

JOINT OPERATING AGREEMENT

 

7.1Proposal
of Operations. Notwithstanding anything to the contrary in the Joint Operating Agreement, USG shall not propose any operation
on the Property for the drilling of any well other than the six Subject Wells under either Joint Operating Agreement until at least
60 days after the time that all six Subject Wells have been Drilled and Completed.

 

ARTICLE 8

[INTENTIONALLY
OMITTED]

 

ARTICLE 9

MISCELLANEOUS

 

9.1Exhibits.
The Exhibits to this Agreement are hereby incorporated in this Agreement by reference and constitute a part of this Agreement.

 

9.2Expenses.
Except as otherwise specifically provided, all fees, costs and expenses incurred by USG or AEE in negotiating this Agreement or
in consummating the transactions contemplated by this Agreement shall be paid by the Party incurring such fees, costs or expenses,
including engineering, land, title, legal and accounting fees, costs and expenses.

 

9.3 Notices.
All notices and other communications under this Agreement shall be in writing and delivered (a) personally, (b) by registered or
certified mail with postage prepaid, and return receipt requested, (c) by nationally recognized commercial overnight courier service
with charges prepaid, or (d) by facsimile transmission, directed to the intended recipient as follows:

 

If to AEE:

 

c/o American
Eagle Energy Corporation

2549 W.
Main Street, Suite 202

Littleton,
Colorado 80120

Attn: Brad
Colby

Telephone:
(303) 798-5235

Facsimile:
(303) 798-5767

 

    	11

    	 

    

 

If to USG:

USG
Properties Bakken I, LLC

601
Travis Street, Suite 1900

Houston,
Texas 77022

Attention:
Michael Jessop

Telephone:
(713) 374-1534

Facsimile:
(713) 751-0375

Email:
michael.jessop@nee.com

 

A notice or other communication
shall be deemed delivered on the earlier to occur of (i) its actual receipt, (ii) the fifth Business Day following its
deposit in registered or certified mail, with postage prepaid and return receipt requested, (iii) the first Business Day
following its deposit with a nationally recognized commercial overnight courier service, with charges prepaid, or (iv) the
date it is sent by confirmed facsimile transmission (if sent before 5:00 p.m. local time of the receiving party on a Business
Day) or the next Business Day (if sent after 5:00 p.m. of such local time or sent on a day that is not a Business Day). Any
Party may change the address to which notices and other communications hereunder can be delivered by giving the other Party
notice in the manner herein set forth.

 

9.4Amendments.
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.

 

9.5Headings.
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 m· provisions of this Agreement.

 

9.6Counterparts:
Fax Signatures. The Parties may execute this Agreement in any number of counterparts, each of which shall be deemed an original
instrument, but all of which together shall constitute one instrument. This Agreement shall become operative when each Party has
executed and delivered at least one counterpart. This Agreement may be delivered by facsimile or electronic (pdf) transmission,
and a facsimile, electronic, or similar transmission evidencing execution shall be effective as a valid and binding agreement between
the Parties for all purposes.

 

9.7Governing
Law; Venue; Wavier of Jury Trial. This Agreement and the transactions contemplated hereby shall be construed in accordance
with, and governed by, the laws of the State of North Dakota, without regard to its conflicts of laws rules. The Parties hereby
consent to personal jurisdiction in the State of Colorado for any action arising out of this Agreement or the transactions contemplated
hereby. Subject to Section 9.19, all actions or proceedings with respect to, arising directly or indirectly in connection with,
out of, related to, or from this Agreement or the transactions contemplated hereby shall be exclusively litigated in the Federal
courts for the District of Colorado located in the City and County of Denver, Colorado; provided that, to the extent that such
courts refuse to exercise jurisdiction hereunder, the Parties agree that jurisdiction shall be proper in any court in which jurisdiction
may be obtained. EACH OF THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT AND ANY AGREEMENT
CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR
WRITTEN) OR ACTIONS OF ANY PARTY; THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES ENTERING INTO THIS AGREEMENT.

 

    	12

    	 

    

 

9.8Entire Agreement.
This Agreement constitutes 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.

 

9.9Relationship
of the Parties. This Agreement is not intended to create, and shall not be construed to create, an association for profit,
a trust, a joint venture, a mining partnership or other relationship of partnership, or entity of any kind between the Parties
that would render either Party liable for the actions of the other Party. Neither Party shall have any right, power or authority
to act, or create any duty or obligation, express or implied, on behalf of any other Party, or to hold itself out as a representative
or agent of the other Party. For every purpose the Parties understand and agree that the liabilities of the Parties shall be several,
not joint or collective, and that each Party shall be solely responsible for its own obligations.

 

9.10Binding
Effect. This Agreement shall be binding upon, and shall inure to the benefit of, the Parties, and their respective successors
and assigns.

 

9.11 Survival.
The representations, warranties, indemnities and covenants contained in this Agreement shall survive indefinitely; provided that
any representation with regards to AEE's title to each Subject Well shall terminate as of the date a Wellbore Assignment is delivered
for such Subject Well and shall be superseded by the title representation set forth in such Wellbore Assignment; provided further,
that the representations and warranties of AEE and USG as set forth in Sections 4.6 through 4.12 and Sections
5.6 and 5.7, respectively, shall terminate one year after the end of the Term.

 

9.12No Third-Party
Beneficiaries. This Agreement is intended only to benefit the

Parties and their respective permitted
successors and assigns.

 

9.13Waiver.
The waiver or failure of any Party to enforce any provision of this Agreement shall not be construed or operate as a waiver of
any further breach of such provision or of any other provision of this Agreement.

 

    	13

    	 

    

 

9.14Limitation
on Damages. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, EACH PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR DIRECT
DAMAGES ONLY, AND IN NO EVENT SHALL A PARTY BE LIABLE TO THE OTHER PARTY, ANY SUCCESSORS IN INTEREST OR ANY BENEFICIARY OR ASSIGNEE
OF THIS AGREEMENT FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT, SPECIAL, OR PUNITIVE DAMAGES ARISING OUT OF THIS AGREEMENT OR ANY
BREACH HEREOF. THIS SECTION 9.14 SHALL APPLY NOTWITHSTANDING THE SOLE, JOINT OR CONCURRENT NEGLIGENCE, FAULT OR RESPONSIBILITY
OF THE PARTY WHOSE LIABILITY IS WAIVED BY THIS PROVISION, OR ANY OTHER EVENT OR CONDITION, WHETHER ANTICIPATED OR UNANTICIPATED,
AND REGARDLESS OF WHETHER PRE-EXISTING PRIOR TO THE DATE OF THIS AGREEMENT.

 

9.15Assignment.
No Party may assign any or all of its rights under this Agreement without the prior written consent of the other Party; provided
USG may assign this Agreement to an affiliate of USG that also receives an assignment of all of USG's interest in the Property
and expressly assumes USG's obligations under this Agreement and the Joint Operating Agreements, without the prior written consent
of AEE.

 

9.16Severability.
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 pot1ions of this Agreement, and such portions
that are not invalid shall be given effect without the invalid portion.

 

9.17Confidentiality.
Neither Party shall make any press release or other public announcement regarding the existence of this Agreement, the contents
hereof or the transactions contemplated hereby without the prior written consent of the other Party; provided, however, that the
foregoing shall not restrict disclosures to the extent (i) necessary for a Party to perform this Agreement, (ii) required (upon
advice of counsel) by applicable securities or other laws or regulations or the applicable rules of any stock exchange having jurisdiction
over the Parties or their respective affiliates or (iii) such Party has given the other Party a reasonable opportunity to review
such disclosure prior to its release and no objection is raised; and provided, further, that, in the case of clauses (i) and (ii),
each Party shall use its reasonable efforts to consult with the other Party regarding the contents of any such release or announcement
prior to making such release or announcement.

 

Notwithstanding anything in this section
to the contrary, the Parties shall keep all information and data relating to this Agreement, and the transactions contemplated
hereby, strictly confidential except for disclosures to authorized agents, bankers and/or representatives of the Parties and any
disclosures required to perform this Agreement; provided, however, that the foregoing shall not restrict disclosures that are required
(upon advice of counsel) by applicable securities or other laws or regulations or the applicable rules of any stock exchange having
jurisdiction over the Parties or their respective affiliates; and provided, further, that prior to making any such disclosures
to such representatives, agents or holders of preferential rights to purchase, the Party disclosing such information shall obtain
an undertaking of confidentiality from each such party.

 

    	14

    	 

    

 

 

9.18References;
Titles and Construction. All references in this Agreement to Exhibits, Schedules, Sections, and other subdivisions refer to
the Exhibits, Schedules, Sections, and other subdivisions of this Agreement unless expressly provided otherwise. Titles and headings
appearing at the beginning of any subdivision are for convenience only and do not constitute any part of any such subdivision and
shall be disregarded in construing the language contained in this Agreement. The words "this Agreement," "herein,"
"hereby," "hereunder" and words of similar import refer to this Agreement as a whole and not to any particular
subdivision unless expressly so limited. The phrases "this Section" and "this Subsection" and similar phrases
refer only to the Sections or Subsections hereof in which the phrase occurs. The word "or" is not exhaustive, and "including"
(and its various derivatives), means "including without limitation." Pronouns in masculine, feminine and neuter gender
shall be construed to include any other gender. Words in the singular form shall be construed to include the plural and words in
the plural form shall be construed to include the singular, unless the context otherwise requires. In the event an ambiguity or
question of intent or interpretation of this Agreement arises, this Agreement shall be construed as if jointly drafted by the Parties,
and no presumption or burden of proof shall arise favoring or disfavoring a Party as a result of authorship or drafting of any
provision of this Agreement.

 

9.19Dispute
Resolution.

 

(a) Unless otherwise
specified in this Agreement, all disputes arising under this Agreement between the Parties, including any such disputes related
to the interpretation of this Agreement (a "Dispute"), must be resolved in accordance with this Section 9.19,
through the use of binding arbitration administered by a panel of three arbitrators in accordance with the Commercial Arbitration
Rules of the American Arbitration Association (the "AAA"), as supplemented to the extent necessary to determine
any procedural appeal questions by the Federal Arbitration Act (Title 9 of the United States Code).

 

(b) In the
event of a Dispute, the Parties shall use their reasonable efforts to resolve such Dispute through negotiations between (i) senior
executives of the applicable Pm1ies, or (ii) delegated project managers of the applicable Parties with authority to resolve the
applicable Dispute.

 

(c) If, after
30 days following commencement of negotiations by initial notice of a Party of intent to negotiate a Dispute in accordance with
Section 9.19(b), the Parties have been unable to resolve the applicable Dispute through such negotiation in good faith on
behalf of each Party, arbitration of a Dispute may be initiated by a Party (a "Claimant") serving written notice
on the AAA and the other Party ("Respondent") that the Claimant has referred the Dispute to binding arbitration.
Claimant's notice initiating binding arbitration must describe in reasonable detail the nature of the Dispute and the facts and
circumstances relating thereto and identify the arbitrator Claimant has appointed. Respondent shall respond to Claimant within
30 days after receipt of Claimant's notice, identifying the arbitrator Respondent has appointed. All arbitrators must be neutral
parties who have never been officers, directors or employees of the Parties or any of their affiliates, and who have not performed
any work for either of the Parties or its affiliates. Arbitrators must have not less than seven years of experience as a lawyer
in the energy industry with experience in exploration and production issues. The two arbitrators so chosen shall select a third
arbitrator within 30 days after the second arbitrator has been appointed. If either the Respondent fails to name its Party appointed
arbitrator within the time permitted, or if the two arbitrators are unable to agree on a third arbitrator within 30 days from the
date the second arbitrator has been appointed, then the missing arbitrator(s) shall be selected by the AAA from its Large, Complex
Commercial Case Panel or the Center for Public Resources Panel of Distinguished Neutrals, giving due regard to the selection criteria
set forth above. The AAA shall select the missing arbitrator(s) not later than 90 days from initiation of arbitration.

 

    	15

    	 

    

 

(d)The hearing shall
be conducted in Denver, Colorado.

 

(e) The arbitrators
may not grant or award indirect, consequential, punitive or exemplary damages.

 

(f) In any
action under this Agreement, the arbitration and court costs and attorneys' fees of the Parties shall be borne in the manner determined
by the arbitrators.

 

 

[SIGNATURES ON NEXT PAGE]

 

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AMERICAN EAGLE ENERGY CORPORTION

 

By: /s/
Brad Colby                                                       

 

Name: Brad
Colby                                                        

 

Title: President                                                             

 

 

 

AMERICAN EAGLE ENERGY INC.

 

By: /s/
Brad Colby                                                       

 

Name: Brad
Colby                                                        

 

Title: President                                                              

 

 

 

USG PROPERTIES BAKKEN I, LLC

 

By: /s/
Lawrence A. Wall, Jr.                                    

 

Name: Lawrence
A. Wall, Jr.                                     

 

Title: President                                                            

 

    	17

    	 

    

 

Exhibit A

 

The Property

 

    	18

    	 

    

 

Exhibit B

 

Drilling Schedule

 

    	19

    	 

    

 

Exhibit C

 

Wellbore Assignment

 

WELLBORE ASSIGNMENT

 

 

THIS WELLBORE ASSIGNMENT (this “Assignment”),
effective as of ________________, ____ at 12:01 a.m., local time in Divide County, North Dakota (the “Effective Time”),
is from American Eagle Energy Corporation, a Nevada corporation (“ASSIGNOR”), with an address at 2549 W. Main Street,
Suite 202, Littleton, Colorado 80120 to USG Properties Bakken I, LLC a Delaware limited liability company (“ASSIGNEE”),
with an address at 601 Travis Street, Suite 1900, Houston, Texas 77002.

 

For and in consideration of the sum of ten
dollars ($10.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, ASSIGNOR
does hereby assign to ASSIGNEE, subject to the reservation described below, 100% of Assignor’s right, title and interest
in and to the following assets INSOFAR AND ONLY INSOFAR as such assets cover and pertain directly to production of oil, gas and
other minerals from the WELLBORE ONLY OF THE [________________] WELL (the “Well”) with a surface location in the
[_____________________________________] (such right title an interest in such wellbore being referred to as the “Property”)
EXCEPTING AND RESERVING unto Assignor all of Assignor’s right, title and interest in such assets otherwise relating
to or in any other manner pertaining to the lands located in [_____________________]:

 

(a)The oil, gas and mineral leases described in Exhibit
A, insofar as they cover any or all of the lands described in Exhibit A (the “Lands”), together with all rights, privileges
and obligations appurtenant thereto, including rights in any unit in which said leases or Lands are included (collectively the
“Leases”);

 

(b)The Well and all water source, water injection and other
injection and disposal wells and systems located on the Leases or the Lands, and used in connection with the Well, together with
all equipment, facilities, and fixtures used in operating Well, or producing, storing, treating or transporting oil, gas, water,
or other products or byproducts, including pipelines, flow lines, gathering systems, tank batteries, improvements, fixtures, inventory,
movables and immovables (collectively the “Lease Property and Equipment”);

 

(c)To the extent assignable or transferable, all permits,
licenses, easements, rights-of-way, servitudes, surface leases, surface use agreements, and similar rights and interests applicable
to or used in operating the Well (collectively the “Permits and Easements”);

 

(d)To the extent assignable or transferable, all contracts
and contractual rights, obligations and interests, insofar as they relate to the Well (the “Related Contracts”); and

 

(e)To the extent assignable or transferable, all other tangibles,
miscellaneous interests and other assets on or used in connection with the Well (collectively the “Miscellaneous Personal
Property”), including records, files, and other data that relate to the Well and lease, land and well files, production records,
title opinions, contract, regulatory and environmental files, and geological and geophysical information (collectively the “Property
Records”);

 

    	20

    	 

    

 

EXCEPTING AND RESERVING unto Assignee a
reversionary interest of 30% of the interest assigned hereby, which reversionary interest shall automatically become effective
on the Conversion Date as such term is defined in Farmout Agreement dated ____, 2013 between Assignor and Assignee.

 

ASSIGNOR warrants that it has not granted,
created or reserved any burden, claim or title defect that would cause its Net Revenue Interest in the Well to be less than the
Net Revenue Interest for such Well set forth in Exhibit A or its Working Interest in the Well to be greater than the Working Interest
for such Well set forth in Exhibit A, except for any such excess Working Interest accompanied by a proportionate increase in the
Net Revenue Interest for such Well. ASSIGNOR quitclaims to ASSIGNEE the benefit of all previous warranties in ASSIGNOR’s
chain of title, insofar as they may cover the Property.

 

For purposes of this Assignment, “Working
Interest” shall mean, with respect to the Well the percentage interest in the Well that is burdened with the obligation to
bear and pay costs and expenses of maintenance, development and operations in connection with such Well, without regard to royalties,
overriding royalties, net profits interests or other similar burdens.

 

For purposes of this Assignment, “Net
Revenue Interest” shall mean, with respect to the Well, the interest in and to all hydrocarbons produced, saved, and sold
from or allocated to the Well, after giving effect to all royalties, overriding royalties, production payments, carried interests,
net profits interests, reversionary interests, and other burdens upon, measured by, or payable out of production therefrom.

 

Except for the special warranty of title
set forth above, ASSIGNOR CONVEYS THE PROPERTY TO ASSIGNEE WITHOUT AND EXPRESSLY DISCLAIMS ANY EXPRESS, STATUTORY OR IMPLIED WARRANTY
OR REPRESENTATION OF ANY KIND, INCLUDING WARRANTIES RELATING TO (i) THE CONDITION OR MERCHANTABILITY OF THE PROPERTY, (ii) THE
FITNESS OF THE PROPERTY FOR ANY PARTICULAR PURPOSE, OR (iii) CONFORMITY TO MODELS OR SAMPLES OF MATERIALS. ASSIGNEE HAS INSPECTED
(OR HAS BEEN GIVEN THE OPPORTUNITY TO INSPECT), THE PROPERTY AND IS SATISFIED AS TO THE PHYSICAL, OPERATING, REGULATORY COMPLIANCE,
SAFETY AND ENVIRONMENTAL CONDITION (BOTH SURFACE AND SUBSURFACE) OF THE PROPERTY AND EXPRESSLY AND KNOWINGLY ACCEPTS THE PROPERTY
AS IS, WHERE IS, AND WITH ALL FAULTS AND DEFECTS AND IN ITS PRESENT CONDITION AND STATE OF REPAIR. Without limiting the generality
of the foregoing, ASSIGNOR makes no representation or warranty as to (i) the amount, value, quality, quantity, volume or deliverability
of any oil, gas or other minerals or reserves (if any) in, under or attributable to the Property, (ii) the physical, operating,
regulatory compliance, safety or environmental condition of the Property, (iii) the geological or engineering condition of
the Property or any value thereof; (iv) the ability of the Property to generate income or profits; or (v) the cost of owning
or operating the Property.

 

    	21

    	 

    

 

ASSIGNOR AND ASSIGNEE AGREE THAT, TO THE
EXTENT REQUIRED BY APPLICABLE LAW TO BE EFFECTIVE, THE DISCLAIMERS OF CERTAIN REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS
ASSIGNMENT ARE “CONSPICUOUS” DISCLAIMERS FOR THE PURPOSE OF ANY APPLICABLE LAW.

 

To the extent that the Leases cover state
or federal leases, separate assignments on the appropriate state or federal forms required for filing in the applicable state or
federal records are being delivered contemporaneously herewith. Such separate assignments are intended to cover the same interests
that are being conveyed hereby.

 

This Agreement shall be governed, construed
and enforced in accordance with the laws of North Dakota without regard to conflicts of law.

 

This Assignment shall extend to and shall
be binding upon the successors and assigns of ASSIGNOR and ASSIGNEE.

 

THIS ASSIGNMENT is executed by the parties as of the Effective
Time.

 

ASSIGNOR:

 

American Eagle Energy Corporation

 

By: _____________________________

__________________,

__________________

 

 

ASSIGNEE:

 

USG Properties Bakken I, LLC

 

By: _____________________________

__________________,

__________________

 

 

	STATE OF ________________	§
	 	§ ss.
	COUNTY OF ______________	§

 

 

This instrument was acknowledged before
me on _____________, 201_, by _____________, as ____________ of ____________________, a ____________________, on behalf of said
_____________ __________________. Witness my hand and official seal.

 

 

_____________________________

NOTARY PUBLIC

 

 

	(SEAL)	My commission expires: _________________, 20___

 

    	22

    	 

    

 

Schedule 2.2

 

    	23

    	 

    

 

Schedule 4.9

 

    	24

    	 

    

 

Schedule 4.12

 

    	25

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