Document:

exv10w1

 

Exhibit 10.1

ATLAS ENERGY RESOURCES, LLC

600,000 COMMON UNITS

REPRESENTING CLASS B LIMITED LIABILITY COMPANY INTERESTS

Common Unit Purchase Agreement

May 5, 2008

Atlas America, Inc.

1845 Walnut Street, 10th Floor

Philadelphia, PA 19103

     Atlas Energy Resources, LLC, a Delaware limited liability company (the “Company”), proposes,
subject to the terms and conditions stated herein, to issue and sell to Atlas America, Inc., a
Delaware corporation (the “Investor”), an aggregate of 600,000 common units (the “Investor Units”)
representing Class B limited liability company interests in the Company (the “Common Units”).

     This is to confirm the agreement between the Company and the Investor concerning the purchase
of the Investor Units from the Company by the Investor.

	 	1.	 	Representations, Warranties and Agreements.
	 
	 	(a)	 	The Company represents and warrants to, and agrees with, the Investor that:

	 	(i)	 	The Company has been duly formed and is validly existing in good standing as
a limited liability company under the Delaware Limited Liability Company Act (the
“Delaware Act”) with full power and authority to enter into and perform its
obligations under this Agreement.
	 
	 	(ii)	 	The Company has all requisite power and authority to issue, sell and deliver
the Investor Units in accordance with and upon the terms and conditions set forth in
this Agreement and the LLC Agreement.
	 
	 	(iii)	 	As of the Closing Date (as defined in Section 3), the Investor Units will be
duly authorized by the Company’s Amended and Restated Operating Agreement, as
amended (the “LLC Agreement”) and, when issued and delivered to the Investor against
payment therefor in accordance with the terms hereof, will be validly issued, fully
paid and non-assessable (except as such non-assessability may be affected by Section
18-607 of the Delaware Act).
	 
	 	(iv)	 	This Agreement has been duly executed and delivered by the Company.

	 	(b)	 	The Investor represents and warrants to, and agrees with, the Company that:

	 	(i)	 	Investor is an “accredited investor,” as such term is defined in Rule
501(a) of Regulation D promulgated under the Securities Act of 1933, as amended (the
“Securities Act”), and the investment by the Investor in the Company is for its own
account and not for the account of others, for investment purposes. The

 

 

	 	 	 	Investor Units are being acquired for its own account, for investment and with no intention
of distributing or reselling such Investor Units or any
portion thereof or interest therein in any transaction which would be a violation
of the securities laws of the United States of America or any state or foreign
country or jurisdiction.

	 	(ii)	 	Investor acknowledges and agrees that it has been provided, to its full
satisfaction, with the opportunity to ask questions concerning the terms and
conditions of an investment in the Company and has knowingly and voluntarily elected
instead to rely solely on its own investigation.
	 
	 	(iii)	 	Investor acknowledges and agrees that the Investor must bear the
economic risk of this investment indefinitely, that the Investor Units purchased by
the Investor hereunder may not be sold or transferred or offered for sale or
transfer by it without registration under the Securities Act and any applicable
state securities or Blue Sky laws or the availability of exemptions therefrom, and
that the Company has no present intention of registering the resale of any of such
Investor Units.
	 
	 	(iv)	 	Investor has such knowledge, sophistication and experience in business
and financial matters so as to be capable of evaluating the merits and risks of the
prospective investment in the Investor Units, and has so evaluated the merits and
risks of such investment. The Investor is able to bear the economic risk of an
investment in the Investor Units and, at the present time and in the foreseeable
future, is able to afford a complete loss of such investment.
	 
	 	(v)	 	Investor understands that the Investor Units are being offered and sold
to the Investor in reliance upon specific exemptions from the registration
requirements of United States federal and state securities laws and that the Company
is relying upon the truth and accuracy of, and Investor’s compliance with, the
representations, warranties, agreements, acknowledgments and understandings, which
are true, correct and complete, of the Investor set forth herein in order to
determine the availability of such exemptions and the eligibility of the Investor to
acquire the Investor Units.
	 
	 	(vi)	 	Investor has a substantive pre-existing relationship with the Company and
was directly contacted by the Company or its agents outside of the Company’s
concurrent public offering of common units (the “Public Offering”). The Investor (i)
was not identified or contacted through the marketing of the Public Offering and
(ii) did not independently contact the Company as a result of the general
solicitation by means of the prospectus for the Public Offering.
	 
	 	(vii)	 	Investor has all requisite power and authority to purchase the Investor
Units, in accordance with and upon the terms and conditions set forth in this
Agreement.
	 
	 	(viii)	 	This Agreement has been duly executed and delivered by the Investor.

     2. Purchase and Sale. Subject to the terms and conditions herein set forth, the
Company agrees to sell to the Investor, and the Investor hereby agrees to purchase from the
Company, at a purchase price of $42.00 per common unit, 600,000 Investor Units.

     3. Delivery and Payment for the Investor Units. Delivery of and payment for the
Investor Units shall be made at 6 p.m., New York City time, on May 5, 2008 (such date and time of

 

 

delivery and payment for the Investor Units being herein called the “Closing Date”). Delivery of
the Investor Units shall be made to the Investor against payment by the Investor of the purchase
price thereof to or upon the order of the Company by wire transfer payable in same-day funds to an
account specified by the Company.

     4. Condition of Investor’s Obligations. The obligations of the Investor hereunder, as
to the Investor Units, shall be subject, in its discretion, to the condition that all
representations and warranties and other statements of the Company herein are, at and as of the
Closing Date, true and correct, the condition that the
Company shall have performed all of its obligations hereunder theretofore to be performed, and
the closing of the purchase and sale of the Company’s Common Units pursuant to the underwriting
agreement, dated the date hereof, among the Company, the underwriters named therein and certain
other parties shall have occurred.

     5. Binding Nature of Agreement. This Agreement shall be binding upon, and inure
solely to the benefit of, the Investor and the Company, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or have any right under
or by virtue of this Agreement.

     6. Sole Agreement. This Agreement supersedes all prior agreements and understandings
(whether written or oral) between the Company and the Investor, with respect to the subject matter
hereof.

     7. Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Pennsylvania.

     8. Execution in Counterpart. This Agreement may be executed by any one or more of the
parties hereto in any number of counterparts, each of which shall be deemed to be an original, but
all such counterparts shall together constitute one and the same instrument.

[SIGNATURES APPEAR ON FOLLOWING PAGE]

 

 

     Upon the acceptance hereof by the Investor, this letter and such acceptance hereof shall
constitute a binding agreement between the Investor and the Company.

	 	 	 	 	 	 	 
	 	 	Very truly yours,	 	 
	 
	 	 	 	 	 	 
	 	 	ATLAS ENERGY RESOURCES, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By: 	 

	 	 
	 

	 	Name:
	 

	 	 
	 

	 	Title	 	 	 

Accepted as of the date hereof:

ATLAS AMERICA, INC.

	 	 	 	 	 
	By: 
	 

	 
	Name:

	 

	 	 
	Titleexhibit10_1.htm

    

    Exhibit
10.1

    

     

    Second
Amended and Restated Credit Agreement

    

    Dated
as of

     

    April
10, 2008

    

    among

    

    St. Mary Land & Exploration
Company,

    as
Borrower,

    

    Wachovia Bank, National
Association,

    as
Administrative Agent,

    

     

    Wells
Fargo Bank, N.A.,

    As
Syndication Agent,

     

    BNP
Paribas,

    Comerica
Bank,

    and

    JPMorgan
Chase Bank, N.A.,

    As
Co-Documentation Agents,

     

    

    and

    

    The
Lenders Party Hereto

     

    with

     

    Wachovia
Capital Markets, LLC

    As
Joint Lead Arranger and

    Sole
Bookrunner

     

    and

    Wells
Fargo Bank, N.A.,

    As
Joint Lead Arranger

     

    $500,000,000
Senior Secured

    Revolving
Credit Facility

     

    

    
      
        
          
             

          

           

        

        
           

          
            

          

        

        
           

        

      

    

    

    TABLE
OF CONTENTS

                                                                                                                                                                                  

    
      	 	 	Page 
	
              RECITALS

            	 
      	
              1

            
	 
      	 
      	 
      
	
              ARTICLE
      I DEFINITIONS AND ACCOUNTING MATTERS

            	
              1

            
	
              Section
      1.01

            	
              Terms
      Defined Above

            	
              1

            
	
              Section
      1.02

            	
              Certain
      Defined Terms

            	
              1

            
	
              Section
      1.03

            	
              Types
      of Loans and Borrowings

            	
              20

            
	
              Section
      1.04

            	
              Terms
      Generally

            	
              20

            
	
              Section
      1.05

            	
              Accounting
      Terms and Determinations; GAAP

            	
              20

            
	 
      	 
      	 
      
	
              ARTICLE
      II THE CREDITS

            	
              21

            
	
              Section
      2.01

            	
              Commitments

            	
              21

            
	
              Section
      2.02

            	
              Loans
      and Borrowings

            	
              21

            
	
              Section
      2.03

            	
              Requests
      for Borrowings

            	
              22

            
	
              Section
      2.04

            	
              Interest
      Elections

            	
              23

            
	
              Section
      2.05

            	
              Funding
      of Borrowings

            	
              24

            
	
              Section
      2.06

            	
              Termination,
      Reduction and Increase of Aggregate Commitment

            	
              25

            
	
              Section
      2.07

            	
              Borrowing
      Base

            	
              27

            
	
              Section
      2.08

            	
              Letters
      of Credit

            	
              29

            
	 
      	 
      	 
      
	
              ARTICLE
      III PAYMENTS OF PRINCIPAL AND INTEREST; PREPAYMENTS;
  FEES

            
	 
      	 
      	
              34

            
	
              Section
      3.01

            	
              Repayment
      of Loans

            	
              34

            
	
              Section
      3.02

            	
              Interest

            	
              34

            
	
              Section
      3.03

            	
              Alternate
      Rate of Interest

            	
              35

            
	
              Section
      3.04

            	
              Prepayments

            	
              35

            
	
              Section
      3.05

            	
              Fees

            	
              37

            
	 
      	 
      	 
      
	
              ARTICLE
      IV PAYMENTS; PRO RATA TREATMENT; SHARING OF SET-OFFS

            	
              38

            
	
              Section
      4.01

            	
              Payments
      Generally; Pro Rata Treatment; Sharing of Set-offs

            	
              38

            
	
              Section
      4.02

            	
              Presumption
      of Payment by the Borrower

            	
              39

            
	
              Section
      4.03

            	
              Certain
      Deductions by the Administrative Agent

            	
              39

            
	
              Section
      4.04

            	
              Disposition
      of Proceeds

            	
              40

            
	 
      	 
      	 
      
	
              ARTICLE
      V INCREASED COSTS; BREAK FUNDING PAYMENTS; TAXES;
    ILLEGALITY

            
	 
      	 
      	
              40

            
	
              Section
      5.01

            	
              Increased
      Costs

            	
              40

            
	
              Section
      5.02

            	
              Break
      Funding Payments

            	
              41

            
	
              Section
      5.03

            	
              Taxes

            	
              42

            
	
              Section
      5.04

            	
              Designation
      of Different Lending Office

            	
              43

            
	
              Section
      5.05

            	
              Illegality

            	
              43

            
	
              Section
      5.06

            	
              Replacement
      of Lenders

            	
              43

            
	 
      	 
      	 
      
	
              ARTICLE
      VI CONDITIONS PRECEDENT

            	
              44

            
	
              Section
      6.01

            	
              Effective
      Date

            	
              44

            
	
              Section
      6.02

            	
              Each
      Credit Event

            	
              45

            
	 
      	 
      	 
      
	
              ARTICLE
      VII REPRESENTATIONS AND WARRANTIES

            	
              46

            
	
              Section
      7.01

            	
              Organization;
      Powers

            	
              46

            
	
              Section
      7.02

            	
              Authority;
      Enforceability

            	
              46

            
	
              Section
      7.03

            	
              Approvals;
      No Conflicts

            	
              47

            
	
              Section
      7.04

            	
              Financial
      Condition; No Material Adverse Change

            	
              47

            
	
              Section
      7.05

            	
              Litigation

            	
              48

            
	
              Section
      7.06

            	
              Environmental
      Matters

            	
              48

            
	
              Section
      7.07

            	
              Compliance
      with the Laws and Agreements; No Defaults

            	
              49

            
	
              Section
      7.08

            	
              Investment
      Company Act

            	
              49

            
	
              Section
      7.09

            	
              Public
      Utility Holding Company Act

            	
              49

            
	
              Section
      7.10

            	
              Taxes

            	
              50

            
	
              Section
      7.11

            	
              ERISA

            	
              50

            
	
              Section
      7.12

            	
              Disclosure;
      No Material Misstatements

            	
              51

            
	
              Section
      7.13

            	
              Insurance

            	
              51

            
	
              Section
      7.14

            	
              Restrictions
      on Liens

            	
              52

            
	
              Section
      7.15

            	
              Subsidiaries

            	
              52

            
	
              Section
      7.16

            	
              Location
      of Business and Offices

            	
              52

            
	
              Section
      7.17

            	
              Properties,
      Titles, Etc

            	
              52

            
	
              Section
      7.18

            	
              Maintenance
      of Properties

            	
              53

            
	
              Section
      7.19

            	
              Gas
      Imbalances, Prepayments

            	
              54

            
	
              Section
      7.20

            	
              Marketing
      of Production

            	
              54

            
	
              Section
      7.21

            	
              Swap
      Agreements

            	
              54

            
	
              Section
      7.22

            	
              Use
      of Loans and Letters of Credit

            	
              54

            
	
              Section
      7.23

            	
              Solvency

            	
              55

            
	
              Section
      7.24

            	
              Material
      Agreements

            	
              55

            
	 
      	 
      	 
      
	
              ARTICLE
      VIII AFFIRMATIVE COVENANTS

            	
              55

            
	
              Section
      8.01

            	
              Financial
      Statements; Ratings Change; Other Information

            	
              55

            
	
              Section
      8.02

            	
              Notices
      of Material Events

            	
              58

            
	
              Section
      8.03

            	
              Existence;
      Conduct of Business

            	
              58

            
	
              Section
      8.04

            	
              Payment
      of Obligations

            	
              58

            
	
              Section
      8.05

            	
              Performance
      of Obligations under Loan Documents

            	
              59

            
	
              Section
      8.06

            	
              Operations
      and Maintenance of Properties

            	
              59

            
	
              Section
      8.07

            	
              Insurance

            	
              60

            
	
              Section
      8.08

            	
              Books
      and Records; Inspection Rights

            	
              60

            
	
              Section
      8.09

            	
              Compliance
      with Laws

            	
              60

            
	
              Section
      8.10

            	
              Environmental
      Matters

            	
              60

            
	
              Section
      8.11

            	
              Further
      Assurances

            	
              61

            
	
              Section
      8.12

            	
              Reserve
      Reports

            	
              62

            
	
              Section
      8.13

            	
              Title
      Information

            	
              63

            
	
              Section
      8.14

            	
              Additional
      Collateral; Additional Guarantors

            	
              64

            
	
              Section
      8.15

            	
              ERISA
      Compliance

            	
              64

            
	
              Section
      8.16

            	
              Performance
      of Material Agreements

            	
              65

            
	 
      	 
      	 
      
	
              ARTICLE
      IX NEGATIVE COVENANTS

            	
              65

            
	
              Section
      9.01

            	
              Financial
      Covenants

            	
              65

            
	
              Section
      9.02

            	
              Debt

            	
              65

            
	
              Section
      9.03

            	
              Liens

            	
              66

            
	
              Section
      9.04

            	
              Dividends,
      Distributions and Redemptions

            	
              67

            
	
              Section
      9.05

            	
              Investments,
      Loans and Advances

            	
              67

            
	
              Section
      9.06

            	
              Designation
      of Material Subsidiaries

            	
              69

            
	
              Section
      9.07

            	
              Nature
      of Business; International Operations

            	
              69

            
	
              Section
      9.08

            	
              Limitation
      on Leases

            	
              69

            
	
              Section
      9.09

            	
              Proceeds
      of Notes

            	
              69

            
	
              Section
      9.10

            	
              ERISA
      Compliance

            	
              69

            
	
              Section
      9.11

            	
              Sale
      or Discount of Receivables

            	
              71

            
	
              Section
      9.12

            	
              Mergers,
      Etc

            	
              71

            
	
              Section
      9.13

            	
              Sale
      of Properties

            	
              71

            
	
              Section
      9.14

            	
              Environmental
      Matters

            	
              72

            
	
              Section
      9.15

            	
              Transactions
      with Affiliates

            	
              72

            
	
              Section
      9.16

            	
              Subsidiaries

            	
              72

            
	
              Section
      9.17

            	
              Negative
      Pledge Agreements; Dividend Restrictions

            	
              72

            
	
              Section
      9.18

            	
              Gas
      Imbalances, Take-or-Pay or Other Prepayments

            	
              72

            
	
              Section
      9.19

            	
              Swap
      Agreements

            	
              73

            
	
              Section
      9.20

            	
              Preservation
      of Material Agreements

            	
              73

            
	
              Section
      9.21

            	
              Release
      of Liens

            	
              73

            
	 
      	 
      	 
      
	
              ARTICLE
      X EVENTS OF DEFAULT; REMEDIES

            	
              74

            
	
              Section
      10.01

            	
              Events
      of Default

            	
              74

            
	
              Section
      10.02

            	
              Remedies

            	
              76

            
	 
      	 
      	 
      
	
              ARTICLE
      XI THE ADMINISTRATIVE AGENT

            	
              77

            
	
              Section
      11.01

            	
              Appointment;
      Powers

            	
              77

            
	
              Section
      11.02

            	
              Duties
      and Obligations of Administrative Agent

            	
              77

            
	
              Section
      11.03

            	
              Action
      by Administrative Agent

            	
              77

            
	
              Section
      11.04

            	
              Reliance
      by Administrative Agent

            	
              78

            
	
              Section
      11.05

            	
              Subagents

            	
              78

            
	
              Section
      11.06

            	
              Resignation
      or Removal of Administrative Agent

            	
              79

            
	
              Section
      11.07

            	
              Administrative
      Agent as Lenders

            	
              79

            
	
              Section
      11.08

            	
              No
      Reliance

            	
              79

            
	
              Section
      11.09

            	
              Authority
      of Administrative Agent to Release Collateral and Liens

            	
              80

            
	
              Section
      11.10

            	
              Syndication
      Agent and Co-Documentation Agents

            	
              80

            
	 
      	 
      	 
      
	
              ARTICLE
      XII MISCELLANEOUS

            	
              80

            
	
              Section
      12.01

            	
              Notices

            	
              80

            
	
              Section
      12.02

            	
              Waivers;
      Amendments

            	
              81

            
	
              Section
      12.03

            	
              Expenses,
      Indemnity; Damage Waiver

            	
              82

            
	
              Section
      12.04

            	
              Successors
      and Assigns

            	
              85

            
	
              Section
      12.05

            	
              Survival;
      Revival; Reinstatement

            	
              88

            
	
              Section
      12.06

            	
              Counterparts;
      Integration; Effectiveness

            	
              88

            
	
              Section
      12.07

            	
              Severability

            	
              89

            
	
              Section
      12.08

            	
              Right
      of Setoff

            	
              89

            
	
              Section
      12.09

            	
              GOVERNING
      LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS

            	
              89

            
	
              Section
      12.10

            	
              Headings

            	
              91

            
	
              Section
      12.11

            	
              Confidentiality

            	
              91

            
	
              Section
      12.12

            	
              Interest
      Rate Limitation

            	
              92

            
	
              Section
      12.13

            	
              EXCULPATION
      PROVISIONS

            	
              92

            
	
              Section
      12.14

            	
              Existing
      Credit Agreement

            	
              93

            
	
              Section
      12.15

            	
              USA
      Patriot Act Notice

            	
              94

            

    

    

    
      	
                  Annex
      I

            	
              List
      of Commitments

            
	
                  Annex
      II

            	
              Existing
      Letters of Credit

            
	 
      	 
      
	
                  Exhibit
      A

            	
              Form
      of Note

            
	
                  Exhibit
      B

            	
              Form
      of Compliance Certificate

            
	
                  Exhibit
      C

            	
              Security
      Instruments

            
	
                  Exhibit
      D

            	
              Form
      of Assignment and Assumption

            
	
                  Exhibit
      E

            	
              Form
      of Commitment Increase Certificate

            
	
                  Exhibit
      F

            	
              Form
      of Additional Lender Certificate

            
	
                  Exhibit
      G

            	
              Reaffirmation
      Agreement

            
	 
      	 
      
	
                  Schedule
      7.05

            	
              Litigation

            
	
                  Schedule
      7.15

            	
              Subsidiaries
      and Partnerships; Non-Material Subsidiaries

            
	
                  Schedule
      7.19

            	
              Gas
      Imbalances

            
	
                  Schedule
      7.20

            	
              Marketing
      Contracts

            
	
                  Schedule
      7.21

            	
              Swap
      Agreements

            
	
                  Schedule
      7.24

            	
              Material
      Agreements

            
	
                  Schedule
      9.05(a)

            	
              Investments

            
	
                  Schedule
      9.05(h)

            	
              Existing
      Investments (Non-Oil and Gas)

            

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    THIS SECOND AMENDED AND RESTATED
CREDIT AGREEMENT dated as of April 10, 2008, is by and
among ST. MARY LAND
& EXPLORATION COMPANY, a corporation duly
formed and existing under the laws of the State of Delaware (the
“Borrower”);
each of the Lenders from time to time party hereto; WACHOVIA BANK, NATIONAL
ASSOCIATION (in its individual
capacity, “Wachovia”), as
administrative agent for the Lenders (in such capacity, together with its
successors in such capacity, the “Administrative
Agent”); WELLS FARGO BANK, N.A., as Syndication Agent; and BNP PARIBAS,
COMERICA BANK, and JPMORGAN CHASE BANK, N.A., as Co-Documentation
Agents.

     

    The parties hereto agree as
follows:

     

    RECITALS

     

    A.           The
Borrower, the Administrative Agent, the lenders from time to time party thereto
and the other agents and parties referred to therein entered into that certain
Credit Agreement dated as of January 27, 2003 (the “Original Credit
Agreement”), which was amended and restated by that certain Amended and
Restated Credit Agreement dated as of April 7, 2005 among the Borrower, the
Administrative Agent, the lenders party thereto and the other agents and parties
referred to therein, as amended by that certain First Amendment to Amended and
Restated Credit Agreement dated as of March 19, 2007 (the “First Amendment”, and
such Amended and Restated Credit Agreement, as amended by the First Amendment,
the “Existing Credit
Agreement”).

     

    B.           The
Borrower, the Administrative Agent, the Lenders (as defined below) and the other
agents and parties hereto desire to amend and restate the Existing Credit
Agreement, such restatement to supplement and replace the Existing Credit
Agreement without affecting the requirements thereof with respect to periods
occurring, or measured by dates, prior to the effective date of such amendment
and restatement.

     

    C.           In
consideration of the mutual covenants and agreements herein contained and of the
loans, extensions of credit and commitments hereinafter referred to, the parties
hereto agree as follows, in doing so amending and restating in its entirety the
Existing Credit Agreement effective as of the Effective Date without affecting
the requirements of the Existing Credit Agreement existing, or measured by dates
or periods, prior to the Effective Date, as more fully set forth
herein.

     

    ARTICLE
I

     

    Definitions
and Accounting Matters

     

    

    Section
1.01 Terms Defined
Above.  As
used in this Second Amended and Restated Credit Agreement, each term defined
above has the meaning indicated above.

     

    Section
1.02 Certain Defined
Terms.  As
used in this Second Amended and Restated Credit Agreement, the following terms
have the meanings specified below:

     

    “ABR”, when used in
reference to any Loan or Borrowing, refers to whether such Loan, or the Loans
comprising such Borrowing, are bearing interest at a rate determined by
reference to the Alternate Base Rate.

     

    “Additional Lender”
has the meaning assigned to such term in Section
2.06(c)(i).

     

     “Additional Lender
Certificate” has the meaning assigned to such term in Section 2.06(c)(ii)F).

     

    “Adjusted LIBO Rate”
means, with respect to any Eurodollar Borrowing for any Interest Period, an
interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%)
equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the
Statutory Reserve Rate.

     

    “Administrative
Questionnaire” means an Administrative Questionnaire in a form supplied
by the Administrative Agent.

     

    “Affected Loans” has
the meaning assigned such term in Section
5.05.

     

    “Affiliate” means,
with respect to a specified Person, another Person that directly, or indirectly
through one or more intermediaries, Controls or is Controlled by or is under
common Control with the Person specified.

     

    “Aggregate Commitment”
at any time means the aggregate amount of the Commitments of all the Lenders, as
reduced, increased or terminated from time to time pursuant to the terms hereof;
provided that the Aggregate
Commitment shall not at any time exceed the Maximum Credit Amount; and provided further that, the initial
Aggregate Commitment hereunder is $500,000,000 for the period from and including
the Effective Date to but excluding the date such amount is reduced, increased
or terminated pursuant to the terms hereof.

     

    “Aggregate Revolving Credit
Exposures” at any time means the aggregate amount of the Revolving Credit
Exposures of all of the Lenders.

     

    “Agreement” means this
Second Amended and Restated Credit Agreement, as the same may from time to time
be amended, modified, supplemented or restated.

     

    “Alternate Base Rate”
means, for any day, a rate per annum equal to the greater of (a) the Prime Rate
in effect on such day or (b) the Federal Funds Effective Rate in effect on such
day plus 1⁄2 of 1%.  Any change in the Alternate Base Rate due to a
change in the Prime Rate or the Federal Funds Effective Rate shall be effective
from and including the effective date of such change in the Prime Rate or the
Federal Funds Effective Rate, respectively.

     

    “Applicable Margin”
means, for any day, with respect to any ABR Loan or Eurodollar Loan, or with
respect to any commitment fees payable hereunder, as the case may be, the rate
per annum set forth in the Borrowing Base Utilization Grid below based upon the
Borrowing Base Utilization Percentage then in effect:

    

    
      	
              Borrowing
      Base Utilization Grid

            
	
              Borrowing
      Base

            	
              <50%

            	
              ≥50%
      <75%

            	
              ≥75%
      <90%

            	
              ≥90%

            
	Utilization
      Percentage	 	 	 	 
	
              Eurodollar
      Loans

            	
               1.00%

            	
               1.25%

            	
               1.50%

            	
               1.75%

            
	
              ABR
      Loans

            	
               0.000%

            	
               0.000%

            	
               0.250%

            	
               0.500%

            
	
              Commitment
      Fee Rate

            	
               0.250%

            	
               0.300%

            	
               0.375%

            	
               0.375%

            

    

    

    Each
change in the Applicable Margin shall apply during the period commencing on the
effective date of such change and ending on the date immediately preceding the
effective date of the next such change, provided, however, that if at any time
the Borrower fails to deliver a Reserve Report pursuant to Section 8.12(a), then until such time as the Reserve
Report is delivered the “Applicable Margin”
means the rate per annum set forth on the grid when the Borrowing Base
Utilization Percentage is at its highest level.

     

    “Applicable
Percentage” means, with respect to any Lender, the percentage of the
Aggregate Commitment represented by such Lender’s Commitment as such percentage
is set forth on Annex I.

     

    “Approved
Counterparty” means (a) any Lender or any Affiliate of a Lender and (b)
any other Person whose long term senior unsecured debt rating is BBB+/Baa1 by
S&P or Moody’s (or their equivalent) or higher.

     

    “Approved Fund” means
(a) a CLO and (b) with respect to any Lender that is a fund which invests in
bank loans and similar extensions of credit, any other fund that invests in bank
loans and similar extensions of credit and is managed by the same investment
advisor as such Lender or by an Affiliate of such investment
advisor.

     

    “Approved Petroleum
Engineers” means (a) Netherland, Sewell & Associates, Inc., (b) Ryder
Scott Company Petroleum Consultants, L.P. and (c) any other independent
petroleum engineers reasonably acceptable to the Administrative
Agent.

     

    “Assignment and
Assumption” means an assignment and assumption entered into by a Lender
and an assignee (with the consent of any party whose consent is required by Section 12.04(b)), and accepted by the Administrative
Agent, in the form of Exhibit D or any other form approved by the Administrative
Agent.

     

    “Availability Period”
means the period from and including the Effective Date to but excluding the
Termination Date.

     

    “Board” means the
Board of Governors of the Federal Reserve System of the United States of America
or any successor Governmental Authority.

     

    “Borrowing” means
Loans of the same Type, made, converted or continued on the same date and, in
the case of Eurodollar Loans, as to which a single Interest Period is in
effect.

     

    “Borrowing Base” means
at any time an amount equal to the amount determined in accordance with Section
2.07, as the same may be adjusted from time to time pursuant to Section 8.13(c),
Section 9.12(a), Section 9.13 or Section
9.21.

     

    “Borrowing Base Utilization
Percentage” means, as of any day, the fraction expressed as a percentage,
the numerator of which is the Aggregate Revolving Credit Exposures of the
Lenders on such day, and the denominator of which is the Borrowing Base in
effect on such day.

     

    “Borrowing Request”
means a request by the Borrower for a Borrowing in accordance with Section 2.03.

     

    “Business Day” means
any day that is not a Saturday, Sunday or other day on which commercial banks in
Charlotte, North Carolina or Houston, Texas are authorized or required by law to
remain closed; and if such day relates to a Borrowing or continuation of, a
payment or prepayment of principal of or interest on, or a conversion of or
into, or the Interest Period for, a Eurodollar Loan or a notice by the Borrower
with respect to any such Borrowing or continuation, payment, prepayment,
conversion or Interest Period, any day which is also a day on which dealings in
dollar deposits are carried out in the London interbank market.

     

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

     

    “Casualty Event” means
any uninsured loss, uninsured casualty or other uninsured damage to, or any
nationalization, taking under power of eminent domain or by condemnation or
similar proceeding of, any Property of the Borrower or any of its Material
Subsidiaries having a fair market value in excess of $5,000,000.

     

    “Change in Control”
means (a) the acquisition of ownership, directly or indirectly, beneficially or
of record, by any Person or group (within the meaning of the Securities Exchange
Act of 1934 and the rules of the SEC thereunder as in effect on the date
hereof), of Equity Interests representing more than 30% of the aggregate
ordinary voting power represented by the issued and outstanding Equity Interests
of the Borrower, (b) occupation of a majority of the seats (other than vacant
seats) on the board of directors of the Borrower by Persons who were neither (i)
nominated by the board of directors of the Borrower nor (ii) appointed by
directors so nominated or (c) the acquisition of direct or indirect Control of
the Borrower by any Person or group.

     

    “Change in Law” means
(a) the adoption of any law, rule or regulation after the date of this
Agreement, (b) any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority after the
date of this Agreement or (c) compliance by any Lender or the Issuing Bank (or,
for purposes of Section 5.01(b)), by any lending
office of such Lender or by such Lender’s or the Issuing Bank’s holding company,
if any) with any request, guideline or directive (whether or not having the
force of law) of any Governmental Authority made or issued after the date of
this Agreement.

     

    “CLO” means any entity
(whether a corporation, partnership, trust or otherwise) that is engaged in
making, purchasing, holding or otherwise investing in bank loans and similar
extensions of credit in the ordinary course of its business and is administered
or managed by a Lender or an Affiliate of such Lender.

     

    “Code” means the
Internal Revenue Code of 1986, as amended from time to time, and any successor
statute.

     

    “Commitment” means,
with respect to each Lender, the commitment of such Lender to make Loans and to
acquire participations in Letters of Credit hereunder, expressed as an amount
representing the maximum aggregate amount of such Lender’s Revolving Credit
Exposure hereunder, as such commitment may be (a) modified from time to time
pursuant to Section 2.06 and (b) modified from time
to time pursuant to assignments by or to such Lender pursuant to Section 12.04(b).  The amount representing
each Lender’s Commitment shall at any time be the lesser of such Lender’s
Applicable Percentage of the Aggregate Commitment.  The amount of each
Lender’s initial Commitment is set forth opposite such Lender’s name on Annex I
under the caption “Commitment.”

     

    “Commitment Fee Rate”
has the meaning set forth in the definition of “Applicable
Margin”.

     

    “Commitment Increase
Certificate” has the meaning assigned to such term in Section 2.06(c)(ii)E).

     

    “Consolidated Net
Income” means with respect to the Borrower and the Consolidated
Subsidiaries, for any period, the aggregate of the net income (or loss) of the
Borrower and the Consolidated Subsidiaries after allowances for taxes for such
period determined on a consolidated basis in accordance with GAAP; provided that
there shall be excluded from such net income (to the extent otherwise included
therein) the following: (a) the net income of any Person in which the Borrower
or any Consolidated Subsidiary has an interest (which interest does not cause
the net income of such other Person to be consolidated with the net income of
the Borrower and the Consolidated Subsidiaries in accordance with GAAP), except
to the extent of the amount of dividends or distributions actually paid in cash
during such period by such other Person to the Borrower or to a Consolidated
Subsidiary, as the case may be; (b) the net income (but not loss) during such
period of any Consolidated Subsidiary to the extent that the declaration or
payment of dividends or similar distributions or transfers or loans by that
Consolidated Subsidiary is not at the time permitted by operation of the terms
of its charter or any agreement, instrument or Governmental Requirement
applicable to such Consolidated Subsidiary or is otherwise restricted or
prohibited, in each case determined in accordance with GAAP; (c) any non-cash
gains or losses during such period; (d) any gains or losses attributable to
writeups or writedowns of assets, including impairments of oil and gas
properties; (e) mark-to-market adjustments related to the utilization of
derivative instruments; and (f) changes in the liability associated with the
future payments of amounts under the Net Profits Interest Bonus
Plan.

     

    “Consolidated
Subsidiaries” means each Subsidiary of the Borrower (whether now existing
or hereafter created or acquired) the financial statements of which shall be (or
should have been) consolidated with the financial statements of the Borrower in
accordance with GAAP.

     

    “Control” means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the ability
to exercise voting power, by contract or otherwise.  “Controlling” and
“Controlled”
have meanings correlative thereto.

     

    “Debt” means, for any
Person, the sum of the following (without duplication): (a) all obligations of
such Person for borrowed money or evidenced by bonds, bankers’ acceptances,
debentures, notes or other similar instruments; (b) all obligations of such
Person (whether contingent or otherwise) in respect of letters of credit, surety
or other bonds and similar instruments; (c) all accounts payable, accrued
expenses, liabilities or other obligations of such Person to pay the deferred
purchase price of Property or services; (d) all obligations under Capital
Leases; (e) all obligations under Synthetic Leases; (f) all Debt (as defined in
the other clauses of this definition) of others secured by a Lien on any
Property of such Person, whether or not such Debt is assumed by such Person; (g)
all Debt (as defined in the other clauses of this definition) of others
guaranteed by such Person or in which such Person otherwise assures a creditor
against loss of the Debt (howsoever such assurance shall be made) to the extent
of the lesser of the amount of such Debt and the maximum stated amount of such
guarantee or assurance against loss; (h) all obligations or undertakings of such
Person to maintain or cause to be maintained the financial position or covenants
of others or to purchase the Debt or Property of others; (i) obligations to
deliver commodities, goods or services, including, without limitation,
Hydrocarbons, in consideration of one or more advance payments, other than gas
balancing arrangements in the ordinary course of business; (j) obligations to
pay for goods or services whether or not such goods or services are actually
received or utilized by such Person; (k) any Debt of a partnership for which
such Person is liable either by agreement, by operation of law or by a
Governmental Requirement but only to the extent of such liability; (l)
Disqualified Capital Stock; and (m) the undischarged balance of any production
payment created by such Person or for the creation of which such Person directly
or indirectly received payment.  The Debt of any Person shall include
all obligations of such Person of the character described above to the extent
such Person remains legally liable in respect thereof notwithstanding that any
such obligation is not included as a liability of such Person under GAAP; provided, however, the
contingent obligations of Borrower or any Subsidiary of Borrower pursuant to any
purchase and sale agreement, stock purchase agreement, merger agreement or
similar agreement shall not constitute “Debt” within this definition so long as
none of same contains an obligation to pay money over time.  It is
hereby understood and agreed that in calculating the amount of Debt in respect
of borrowed money, the effect of Financial Accounting Standards Board Statement
No. 133 shall be disregarded.

     

    “Default” means any
event or condition which constitutes an Event of Default or which upon notice,
lapse of time or both would, unless cured or waived, become an Event of
Default.

     

    “Disqualified Capital
Stock” means any Equity Interest that, by its terms (or by the terms of
any security into which it is convertible or for which it is exchangeable) or
upon the happening of any event, matures or is mandatorily redeemable for any
consideration other than other Equity Interests (which would not constitute
Disqualified Capital Stock), pursuant to a sinking fund obligation or otherwise,
or is convertible or exchangeable for Debt or redeemable for any consideration
other than other Equity Interests (which would not constitute Disqualified
Capital Stock) at the option of the holder thereof, in whole or in part, on or
prior to the date that is one year after the earlier of (a) the Maturity Date
and (b) the date on which there are no Loans, LC Exposure or other obligations
hereunder outstanding and all of the Commitments are terminated.

     

    “dollars” or “$”
refers to lawful money of the United States of America.

     

    “EBITDA” means, for
any period, the sum of Consolidated Net Income for such period plus the
following expenses or charges to the extent deducted from Consolidated Net
Income in such period: interest, taxes, depreciation, depletion, amortization,
noncash impairment charges and other noncash charges, minus all noncash income
added to Consolidated Net Income.  Noncash charges include
mark-to-market adjustments related to the utilization of derivative instruments
and changes in the liability associated with the future payments of amounts
under the Net Profits Interest Bonus Plan.

     

    “Effective Date” means
the date on which the conditions specified in Section
6.01 are satisfied (or waived in accordance with Section 12.02).

     

    “Engineering Reports”
has the meaning assigned such term in Section 2.07(c)(i).

     

    “Environmental Laws”
means any and all Governmental Requirements pertaining in any way to health,
safety, the environment or the preservation or reclamation of natural resources,
in effect in any and all jurisdictions in which the Borrower or any Subsidiary
is conducting or at any time has conducted business, or where any Property of
the Borrower or any Subsidiary is located, including without limitation, the Oil
Pollution Act of 1990 (“OPA”), as amended,
the Clean Air Act, as amended, the Comprehensive Environmental, Response,
Compensation, and Liability Act of 1980 (“CERCLA”), as amended,
the Federal Water Pollution Control Act, as amended, the Occupational Safety and
Health Act of 1970, as amended, the Resource Conservation and Recovery Act of
1976 (“RCRA”),
as amended, the Safe Drinking Water Act, as amended, the Toxic Substances
Control Act, as amended, the Superfund Amendments and Reauthorization Act of
1986, as amended, the Hazardous Materials Transportation Act, as amended, and
other environmental conservation or protection Governmental
Requirements.  The term “oil” shall have the meaning specified in OPA,
the terms “hazardous
substance” and “release” (or “threatened release”)
have the meanings specified in CERCLA, the terms “solid waste” and
“disposal” (or
“disposed”)
have the meanings specified in RCRA and the term “oil and gas waste”
shall have the meaning specified in Section 91.1011 of the Texas Natural
Resources Code (“Section 91.1011”);
provided, however, that (a) in the event any of OPA, CERCLA, RCRA or Section
91.1011 is amended so as to broaden the meaning of any term defined thereby,
such broader meaning shall apply subsequent to the effective date of such
amendment and (b) to the extent the laws of the state or other jurisdiction in
which any Property of the Borrower or any Subsidiary is located establish a
meaning for “oil,” “hazardous substance,”
“release,”
“solid waste,”
“disposal” or
“oil and gas
waste” which is broader than that specified in either OPA, CERCLA, RCRA
or Section 91.1011, such broader meaning shall apply.

     

    “Equity Interests”
means shares of capital stock, partnership interests, joint venture interest or
interests in comparable entities, membership interests in a limited liability
company, beneficial interests in a trust or other equity ownership interests in
a Person, and any warrants, options or other rights entitling the holder thereof
to purchase or acquire any such Equity Interest.

     

    “ERISA” means the
Employee Retirement Income Security Act of 1974, as amended, and any successor
statute.

     

    “ERISA Affiliate”
means each trade or business (whether or not incorporated) which together with
the Borrower or a Subsidiary would be deemed to be a “single employer” within
the meaning of section 4001(b)(1) of ERISA or subsections (b), (c), (m) or (o)
of section 414 of the Code.

     

    “ERISA Event” means
(a) a “Reportable Event” described in section 4043 of ERISA and the regulations
issued thereunder, (b) the withdrawal of the Borrower, a Subsidiary or any ERISA
Affiliate from a Plan during a plan year in which it was a “substantial
employer” as defined in section 4001(a)(2) of ERISA, (c) the filing of a notice
of intent to terminate a Plan or the treatment of a Plan amendment as a
termination under section 4041 of ERISA, (d) the institution of proceedings to
terminate a Plan by the PBGC or (e) any other event or condition which might
constitute grounds under section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan.

     

    “Eurodollar”, when
used in reference to any Loan or Borrowing, refers to whether such Loan, or the
Loans comprising such Borrowing, are bearing interest at a rate determined by
reference to the Adjusted LIBO Rate.

     

    “Event of Default” has
the meaning assigned such term in Section 10.01.

     

    “Excepted Liens”
means:  (a) Liens for Taxes, assessments or other governmental charges
or levies which are not delinquent or which are being contested in good faith by
appropriate action and for which adequate reserves have been maintained in
accordance with GAAP; (b) Liens in connection with workers’ compensation,
unemployment insurance or other social security, old age pension or public
liability obligations which are not delinquent or which are being contested in
good faith by appropriate action and for which adequate reserves have been
maintained in accordance with GAAP; (c) statutory landlord’s liens, operators’,
vendors’, carriers’, warehousemen’s, repairmen’s, mechanics’, suppliers’,
workers’, materialmen’s, construction or other like Liens arising by operation
of law in the ordinary course of business or incident to the exploration,
development, operation and maintenance of Oil and Gas Properties each of which
is in respect of obligations that are not delinquent or which are being
contested in good faith by appropriate action and for which adequate reserves
have been maintained in accordance with GAAP; (d) contractual Liens which arise
in the ordinary course of business under operating agreements, joint venture
agreements, oil and gas partnership agreements, oil and gas leases, farm-out
agreements, division orders, contracts for the sale, transportation or exchange
of oil and natural gas, unitization and pooling declarations and agreements,
area of mutual interest agreements, overriding royalty agreements, marketing
agreements, processing agreements, net profits agreements, development
agreements, gas balancing or deferred production agreements, injection,
repressuring and recycling agreements, salt water or other disposal agreements,
seismic or other geophysical permits or agreements, and other agreements which
are usual and customary in the oil and gas business and are for claims which are
not delinquent or which are being contested in good faith by appropriate action
and for which adequate reserves have been maintained in accordance with GAAP,
provided that any such Lien referred to in this clause does not materially
impair the use of the Property covered by such Lien for the purposes for which
such Property is held by the Borrower or any Subsidiary or materially impair the
value of such Property subject thereto; (e) Liens arising solely by virtue of
any statutory or common law provision relating to banker’s liens, rights of
set-off or similar rights and remedies and burdening only deposit accounts or
other funds maintained with a creditor depository institution, provided that no
such deposit account is a dedicated cash collateral account or is subject to
restrictions against access by the depositor in excess of those set forth by
regulations promulgated by the Board and no such deposit account is intended by
Borrower or any of its Subsidiaries to provide collateral to the depository
institution; (f) easements, restrictions, servitudes, permits, conditions,
covenants, exceptions or reservations in any Property of the Borrower or any
Subsidiary for the purpose of roads, pipelines, transmission lines,
transportation lines, distribution lines for the removal of gas, oil, coal or
other minerals or timber, and other like purposes, or for the joint or common
use of real estate, rights of way, facilities and equipment, which in the
aggregate do not materially impair the use of such Property for the purposes of
which such Property is held by the Borrower or any Subsidiary or materially
impair the value of such Property subject thereto; (g) Liens on cash or
securities pledged to secure performance of tenders, surety and appeal bonds,
government contracts, performance and return of money bonds, bids, trade
contracts, leases, statutory obligations, regulatory obligations and other
obligations of a like nature incurred in the ordinary course of business; (h)
Liens on existing and future cash, U.S. government securities, and letters of
credit securing or supporting Swap Agreements permitted pursuant to Section
9.19; and (i) judgment and attachment Liens not giving rise to an Event of
Default, provided that any appropriate legal proceedings which may have been
duly initiated for the review of such judgment shall not have been finally
terminated or the period within which such proceeding may be initiated shall not
have expired and no action to enforce such Lien has been commenced; provided,
further that Liens described in clauses (a) through (e) shall remain “Excepted
Liens” only for so long as no action to enforce such Lien has been commenced and
no intention to subordinate the first priority Lien granted in favor of the
Administrative Agent and the Lenders is to be hereby implied or expressed by the
permitted existence of such Excepted Liens.

     

    “Excluded Taxes”
means, with respect to the Administrative Agent, any Lender, the Issuing Bank or
any other recipient of any payment to be made by or on account of any obligation
of the Borrower or any Guarantor hereunder or under any other Loan Document, (a)
income or franchise taxes imposed on (or measured by) its net income by the
United States of America or such other jurisdiction under the laws of which such
recipient is organized or in which its principal office is located or, in the
case of any Lender, in which its applicable lending office is located, (b) any
branch profits taxes imposed by the United States of America or any similar tax
imposed by any other jurisdiction in which the Borrower or any Guarantor is
located and (c) in the case of a Foreign Lender, any withholding tax that is
imposed on amounts payable to such Foreign Lender at the time such Foreign
Lender becomes a party to this Agreement (or designates a new lending office) or
is attributable to such Foreign Lender’s failure to comply with Section 5.03(e), except to the extent that such Foreign
Lender (or its assignor, if any) was entitled, at the time of designation of a
new lending office (or assignment), to receive additional amounts with respect
to such withholding tax pursuant to Section 5.03(a)
or Section 5.03(c).

     

    “Federal Funds Effective
Rate” means, for any day, the weighted average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published on the next succeeding Business Day by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day that
is a Business Day, the average (rounded upwards, if necessary, to the next 1/100
of 1%) of the quotations for such day for such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by it.

     

    “Financial Officer”
means the chief financial officer, principal accounting officer, treasurer or
controller of the Borrower.

     

    “Financial Statements”
means the financial statement or statements of the Borrower and its Consolidated
Subsidiaries referred to in Section 7.04(a).

     

    “Foreign Lender” means
any Lender that is organized under the laws of a jurisdiction other than that in
which the Borrower is located.  For purposes of this definition, the
United States of America, each State thereof and the District of Columbia shall
be deemed to constitute a single jurisdiction.

     

    “GAAP” means generally
accepted accounting principles in the United States of America as in effect from
time to time subject to the terms and conditions set forth in Section 1.05.

     

    “Governmental
Authority” means the government of the United States of America, any
other nation or any political subdivision thereof, whether state or local, and
any agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government over the
Borrower, any Material Subsidiary, any of their Properties, any Agent, the
Issuing Bank or any Lender.

     

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

     

    “Guarantors” means the
Material Subsidiaries, and each other Subsidiary that guarantees the
Indebtedness pursuant to Section 8.14(b).

     

    “Guaranty Agreement”
means an agreement executed by the Guarantors in substantially the form of
Exhibit D-2 to the Existing Credit Agreement, as the same may be amended,
modified or supplemented from time to time.

     

    “Highest Lawful Rate”
means, with respect to each Lender, the maximum nonusurious interest rate, if
any, that at any time or from time to time may be contracted for, taken,
reserved, charged or received on the Notes or on other Indebtedness under laws
of the State of Texas which are presently in effect or, to the extent allowed by
law, under such applicable laws which may hereafter be in effect and which allow
a higher maximum nonusurious interest rate than applicable laws allow as of the
date hereof.

     

    “Hydrocarbon
Interests” means all rights, titles, interests and estates now or
hereafter acquired in and to oil and gas leases, oil, gas and mineral leases, or
other liquid or gaseous hydrocarbon leases, mineral fee interests, overriding
royalty and royalty interests, net profit interests and production payment
interests, including any reserved or residual interests of whatever
nature.

     

    “Hydrocarbons” means
oil, gas, casinghead gas, drip gasoline, natural gasoline, condensate,
distillate, liquid hydrocarbons, gaseous hydrocarbons and all products refined
or separated therefrom.

     

    “Indebtedness” means
any and all amounts owing or to be owing by the Borrower or any Guarantor: (a)
to the Administrative Agent, the Issuing Bank or any Lender under any Loan
Document; (b) to any Lender or any Affiliate of a Lender under any present or
future Swap Agreements entered into between the Borrower or any Guarantor and
any Lender or any Affiliate of a Lender, including, without limitation, the Swap
Agreements entered into with a Lender or an Affiliate of a Lender and listed on
attached Schedule 7.21, and (c) all renewals, extensions and/or rearrangements
of any of the above.

     

    “Indemnified Taxes”
means Taxes other than Excluded Taxes.

     

    “Information
Memorandum” means the Confidential Information Memorandum dated February,
2005, relating to the Borrower and the Transactions.

     

    “Initial Reserve
Report” means (a) the report of the Borrower, which includes reserve
estimates as prepared by Ryder Scott Company, L.P. and Netherland, Sewell
Associates, Inc., dated as of December 31, 2007, with respect to the value of
the Oil and Gas Properties of the Borrower and its Material Subsidiaries as of
December 31, 2007, and (b) the report of the Manager of Reservoir Engineering of
the Borrower dated as of December 31, 2007, with respect to the value of the Oil
and Gas Properties of the Borrower and its Material Subsidiaries as of December
31, 2007.  

     

    “Interest Election
Request” means a request by the Borrower to convert or continue a
Borrowing in accordance with Section
2.04.

     

    “Interest Payment
Date” means (a) with respect to any ABR Loan, the last day of each
calendar month and (b) with respect to any Eurodollar Loan, the last day of the
Interest Period applicable to the Borrowing of which such Loan is a part and, in
the case of a Eurodollar Borrowing with an Interest Period of more than three
months’ duration, each day prior to the last day of such Interest Period that
occurs at intervals of three months’ duration after the first day of such
Interest Period.

     

    “Interest Period”
means with respect to any Eurodollar Borrowing, the period commencing on the
date of such Borrowing and ending on the numerically corresponding day in the
calendar month that is one, two, three or six months thereafter, as the Borrower
may elect; provided, that (a) if any Interest Period would end on a day other
than a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless such next succeeding Business Day would fall in
the next calendar month, in which case such Interest Period shall end on the
next preceding Business Day and (b) any Interest Period pertaining to a
Eurodollar Borrowing that commences on the last Business Day of a calendar month
(or on a day for which there is no numerically corresponding day in the last
calendar month of such Interest Period) shall end on the last Business Day of
the last calendar month of such Interest Period.  For purposes hereof,
the date of a Borrowing initially shall be the date on which such Borrowing is
made and thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.

     

    “Interim
Redetermination” has the meaning assigned such term in Section 2.07(b).

     

    “Interim Redetermination
Date” means the date on which a Borrowing Base that has been redetermined
pursuant to an Interim Redetermination becomes effective as provided in Section 2.07(d).

     

    “Investment” means,
for any Person: (a) the acquisition (whether for cash, Property, services or
securities or otherwise) of Equity Interests of any other Person or any
agreement to make any such acquisition (including, without limitation, any
“short sale” or any sale of any securities at a time when such securities are
not owned by the Person entering into such short sale); (b) the making of any
deposit with, or advance, loan or other extension of credit to, any other Person
(including the purchase of Property from another Person subject to an
understanding or agreement, contingent or otherwise, to resell such Property to
such Person, but excluding any such advance, loan or extension of credit having
a term not exceeding ninety (90) days representing the purchase price of
inventory or supplies sold by such Person in the ordinary course of business) or
(c) the entering into of any guarantee (excluding performance guarantees) of, or
other contingent obligation (including the deposit of any Equity Interests to be
sold) with respect to, Debt or other liability of any other Person and (without
duplication) any amount committed to be advanced, lent or extended to such
Person.

     

    “Issuing Bank”
means Wachovia, in its
capacity as the issuer of Letters of Credit hereunder, and its successors in
such capacity as provided in Section
2.08(j).  The Issuing Bank may, in its discretion, arrange for one
or more Letters of Credit to be issued by Affiliates of the Issuing Bank, in
which case the term “Issuing Bank” shall
include any such Affiliate with respect to Letters of Credit issued by such
Affiliate.

     

    “LC Commitment” at any
time means $50,000,000.

     

    “LC Disbursement”
means a payment made by the Issuing Bank pursuant to a Letter of
Credit.

     

    “LC Exposure” means,
at any time, the sum of (a) the aggregate undrawn amount of all outstanding
Letters of Credit at such time plus (b) the aggregate amount of all LC
Disbursements that have not yet been reimbursed by or on behalf of the Borrower
at such time.  The LC Exposure of any Lender at any time shall be its
Applicable Percentage of the total LC Exposure at such time.

     

    “Lenders” means the
Persons listed on Annex I, any Person that shall have become a party hereto
pursuant to an Assignment and Assumption, other than any such Person that ceases
to be a party hereto pursuant to an Assignment and Assumption, and any Person
that shall have become a party hereto pursuant to Section
2.06(c).

     

    “Letter of Credit”
means any letter of credit issued pursuant to this Agreement, and the
outstanding letters of credit issued under the Original Credit Agreement or the
Existing Credit Agreement, more particularly described on attached Annex
II.

     

    “Letter of Credit
Agreements” means all letter of credit applications and other agreements
(including any amendments, modifications or supplements thereto) submitted by
the Borrower, or entered into by the Borrower, with the Issuing Bank relating to
any Letter of Credit.

     

    “LIBO Rate” means,
with respect to any Eurodollar Borrowing for any Interest Period, the rate
appearing on Page 3750 of the Dow Jones Market Service (or on any successor or
substitute page of such Service, or any successor to or substitute for such
Service, providing rate quotations comparable to those currently provided on
such page of such Service, as determined by the Administrative Agent from time
to time for purposes of providing quotations of interest rates applicable to
dollar deposits in the London interbank market) at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such Interest
Period, as the rate for dollar deposits with a maturity comparable to such
Interest Period.  In the event that such rate is not available at such
time for any reason, then the “LIBO Rate” with
respect to such Eurodollar Borrowing for such Interest Period shall be the rate
at which dollar deposits of $5,000,000 and for a maturity comparable to such
Interest Period are offered by the principal London office of the Administrative
Agent in immediately available funds in the London interbank market at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.

     

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

     

    “Loan Documents” means
this Agreement, the Notes, the Letter of Credit Agreements, the Letters of
Credit and the Security Instruments.

     

    “Loans” means the
loans made by the Lenders to the Borrower pursuant to this
Agreement.

     

    “Majority Lenders”
means, at any time while no Loans or LC Exposure is outstanding, Lenders having
at least sixty-six and two-thirds percent (66-2/3%) of the Aggregate
Commitments; and at any time while any Loans or LC Exposure is outstanding,
Lenders holding at least sixty-six and two-thirds percent (66-2/3%) of the
outstanding aggregate principal amount of the Loans or participation interests
in Letters of Credit (without regard to any sale by a Lender of a participation
in any Loan under Section 12.04(c)).

     

    “Material Adverse
Effect” means a material adverse effect on (a) the business, assets,
operations, prospects or condition, financial or otherwise, of the Borrower and
the Subsidiaries taken as a whole, (b) the ability of the Borrower, any
Subsidiary or any Guarantor to perform any of its obligations under any Loan
Document or (c) the rights and remedies of or benefits available to the
Administrative Agent, the Issuing Bank or any Lender under any Loan
Document.

     

    “Material Agreements”
means each agreement (whether one or more) described or referred to on Schedule
7.24.

     

    “Material
Indebtedness” means Debt (other than the Loans and Letters of Credit), or
obligations in respect of one or more Swap Agreements, of any one or more of the
Borrower and its Subsidiaries in an aggregate principal amount exceeding
$15,000,000.  For purposes of determining Material Indebtedness, the
“principal amount” of the obligations of the Borrower or any Subsidiary in
respect of any Swap Agreement at any time shall be the maximum aggregate amount
(giving effect to any netting agreements) that the Borrower or such Subsidiary
would be required to pay if such Swap Agreement were terminated at such
time.

     

    “Material Subsidiary”
means a Subsidiary of Borrower that owns a Substantial Portion of the Property
of Borrower and its Subsidiaries.

     

    “Maturity Date” means
April 7,
2010.

     

    “Maximum Credit
Amount” means at any time an amount equal to the lesser of (a) the then
effective Borrowing Base and (b) $500,000,000.

     

    “Moody’s” means
Moody’s Investors Service, Inc. and any successor thereto that is a nationally
recognized rating agency.

     

    “Mortgaged Property”
means any Property owned by the Borrower or any Material Subsidiary which is
subject to the Liens existing and to exist under the terms of the Security
Instruments.

     

    “Multiemployer Plan”
means a Plan which is a multiemployer plan as defined in section 3(37) or 4001
(a)(3) of ERISA.

     

    “New Borrowing Base
Notice” has the meaning assigned such term in Section 2.07(d).

     

    “Notes” means the
promissory notes of the Borrower described in Section
2.02(d) and being substantially in the form of Exhibit A, together with all
amendments, modifications, replacements, extensions and rearrangements
thereof.

     

    “Oil and Gas
Properties” means (a) Hydrocarbon Interests; (b) the Properties now or
hereafter pooled or unitized with Hydrocarbon Interests; (c) all presently
existing or future unitization, pooling agreements and declarations of pooled
units and the units created thereby (including without limitation all units
created under orders, regulations and rules of any Governmental Authority) which
may affect all or any portion of the Hydrocarbon Interests; (d) all
operating agreements, contracts and other agreements, including production
sharing contracts and agreements, which relate to any of the Hydrocarbon
Interests or the production, sale, purchase, exchange or processing of
Hydrocarbons from or attributable to such Hydrocarbon Interests; (e) all
Hydrocarbons in and under and which may be produced and saved or attributable to
the Hydrocarbon Interests, including all oil in tanks, and all rents, issues,
profits, proceeds, products, revenues and other incomes from or attributable to
the Hydrocarbon Interests; (f) all tenements, hereditaments, appurtenances and
Properties in any manner appertaining, belonging, affixed or incidental to the
Hydrocarbon Interests and (g) all Properties, rights, titles, interests and
estates described or referred to above, including any and all Property, real or
personal, now owned or hereinafter acquired and situated upon, used, held for
use or useful in connection with the operating, working or development of any of
such Hydrocarbon Interests or Property (excluding drilling rigs, automotive
equipment, rental equipment or other personal Property which may be on such
premises for the purpose of drilling a well or for other similar temporary uses)
and including any and all oil wells, gas wells, injection wells or other wells,
buildings, structures, fuel separators, liquid extraction plants, plant
compressors, pumps, pumping units, field gathering systems, tanks and tank
batteries, fixtures, valves, fittings, machinery and parts, engines, boilers,
meters, apparatus, equipment, appliances, tools, implements, cables, wires,
towers, casing, tubing and rods, surface leases, rights-of-way, easements and
servitudes together with all additions, substitutions, replacements, accessions
and attachments to any and all of the foregoing.

     

    “Other Taxes” means
any and all present or future stamp or documentary taxes or any other excise or
Property taxes, charges or similar levies arising from any payment made
hereunder or from the execution, delivery or enforcement of, or otherwise with
respect to, this Agreement and any other Loan Document.

     

    “Participant” has the
meaning set forth in Section
12.04(c)(i).

     

    “PBGC” means the
Pension Benefit Guaranty Corporation, or any successor thereto.

     

    “Permitted Refinancing
Debt” means Debt (for purposes of this definition, “new Debt”) incurred
in exchange for, or proceeds of which are used to refinance, all of any other
Debt (the “Refinanced
Debt”); provided that (a) such new Debt is in an aggregate principal
amount not in excess of the sum of (i) the aggregate principal amount then
outstanding of the Refinanced Debt (or, if the Refinanced Debt is exchanged or
acquired for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration thereof, such lesser amount) and
(ii) an amount necessary to pay any fees and expenses, including premiums,
related to such exchange or refinancing; (b) such new Debt has a stated
maturity no earlier than the stated maturity of the Refinanced Debt and an
average life no shorter than the average life of the Refinanced Debt;
(c) such new Debt does not have a stated interest rate in excess of the
stated interest rate of the Refinanced Debt; (d) such new Debt does not
contain any covenants which are more onerous to the Borrower and its
Subsidiaries than those imposed by the Refinanced Debt and (e) such new
Debt (and any guarantees thereof) is subordinated in right of payment to the
Indebtedness (or, if applicable, the Guaranty Agreement) to at least the same
extent as the Refinanced Debt and is otherwise subordinated on terms
substantially reasonably satisfactory to the Administrative Agent.

     

    “Person” means any
natural person, corporation, limited liability company, trust, joint venture,
association, company, partnership, Governmental Authority or other
entity.

     

    “Plan” means any
employee pension benefit plan, as defined in section 3(2) of ERISA, which (a) is
currently or hereafter sponsored, maintained or contributed to by the Borrower,
a Subsidiary or an ERISA Affiliate or (b) was at any time during the six
calendar years preceding the date hereof, sponsored, maintained or contributed
to by the Borrower or a Subsidiary or an ERISA Affiliate.

     

    “Pledge - Borrower”
means that certain Pledge and Security Agreement from the Borrower in favor of
the Administrative Agent, pledging to the Administrative Agent as security for
the Indebtedness all equity interests held by the Borrower in the Material
Subsidiaries, in substantially the form of Exhibit D-3 to the Existing Credit
Agreement, as the same may be amended, modified or supplemented from time to
time.

     

    “Prime Rate” means the
rate of interest per annum publicly announced from time to time by Wachovia as
its prime rate in effect at its principal office in Charlotte, North Carolina;
each change in the Prime Rate shall be effective from and including the date
such change is publicly announced as being effective.  Such rate is
set by Wachovia as a
general reference rate of interest, taking into account such factors as Wachovia may
deem appropriate; it being understood that many of Wachovia’s
commercial or other loans are priced in relation to such rate, that it is not
necessarily the lowest or best rate actually charged to any customer and that
Wachovia may
make various commercial or other loans at rates of interest having no
relationship to such rate.

     

    “Property” means any
interest in any kind of property or asset, whether real, personal or mixed, or
tangible or intangible, including, without limitation, cash, securities,
accounts and contract rights.

     

    “Proposed Borrowing
Base” has the meaning assigned to such term in Section 2.07(c)(i).

     

    “Proposed Borrowing Base
Notice” has the meaning assigned to such term in Section 2.07(c)(ii).

     

    “Reaffirmation
Agreement” means that certain Reaffirmation Agreement dated as of April
10, 2008, by the Borrower in favor of the Administrative Agent, in substantially
the form of Exhibit G.

     

    “Redemption” means the
repurchase, redemption, prepayment, repayment or defeasance (or the segregation
of funds with respect to any of the foregoing) of the Material Indebtedness;
provided, however, the term Redemption shall not include early termination of a
Swap Agreement due to an ISDA “Termination Event” to the extent the amount due
at termination exceeds $15,000,000.  “Redeem” has the
correlative meaning thereto.

     

    “Redetermination Date”
means, with respect to any Scheduled Redetermination or any Interim
Redetermination, the date that the redetermined Borrowing Base related thereto
becomes effective pursuant to Section
2.07(d).

     

    “Refinanced Debt” has
the meaning assigned such term in the definition of “Permitted Refinancing
Debt”.

     

    “Register” has the
meaning assigned such term in Section
12.04(b)(iv).

     

    “Regulation D” means
Regulation D of the Board, as the same may be amended, supplemented or replaced
from time to time.

     

    “Related Parties”
means, with respect to any specified Person, such Person’s Affiliates and the
respective directors, officers, employees, agents and advisors of such Person
and such Person’s Affiliates.

     

    “Remedial Work” has
the meaning assigned such term in Section
8.10(a).

     

    “Reserve Report” means
a report, in form and substance reasonably satisfactory to the Administrative
Agent, setting forth, as of each December 31st or June 30th (or
such other date in the event of an Interim Redetermination) the oil and gas
reserves attributable to the Oil and Gas Properties of the Borrower and the
Material Subsidiaries, together with a projection of the rate of production and
future net income, taxes, operating expenses and capital expenditures with
respect thereto as of such date, based upon the pricing assumptions consistent
with SEC reporting requirements at the time.

     

    “Responsible Officer”
means, as to any Person, the Chief Executive Officer, the President, any
Financial Officer or any Vice President of such Person.  Unless
otherwise specified, all references to a Responsible Officer herein shall mean a
Responsible Officer of the Borrower.

     

    “Restricted Payment”
means any dividend or other distribution (whether in cash, securities or other
Property) with respect to any Equity Interests in the Borrower, or any payment
(whether in cash, securities or other Property), including any sinking fund or
similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of any such Equity Interests in the
Borrower or any option, warrant or other right to acquire any such Equity
Interests in the Borrower.

     

    “Revolving Credit
Exposure” means, with respect to any Lender at any time, the sum of the
outstanding principal amount of such Lender’s Loans and its LC Exposure at such
time.

     

    “Scheduled
Redetermination” has the meaning assigned such term in Section 2.07(b).

     

    “Scheduled Redetermination
Date” means the date on which a Borrowing Base that has been redetermined
pursuant to a Scheduled Redetermination becomes effective as provided in Section 2.07(d).

     

    “SEC” means the
Securities and Exchange Commission or any successor Governmental
Authority.

     

    “Security Instruments”
means any Guaranty Agreement, the Pledge – Borrower, the Reaffirmation Agreement
and all assignments, mortgages, deeds of trust, amendments and supplements to
mortgages and deeds of trust, and all other agreements, instruments or
certificates described or referred to in Exhibit C, and any and all other
agreements, instruments or certificates now or hereafter executed and delivered
by the Borrower or any other Person (other than Swap Agreements with the Lenders
or any Affiliate of a Lender or participation or similar agreements between any
Lender and any other lender or creditor with respect to any Indebtedness
pursuant to this Agreement) in connection with, or as security for the payment
or performance of the Indebtedness, the Notes, this Agreement, or reimbursement
obligations under the Letters of Credit, as such agreements may be amended,
modified, supplemented or restated from time to time.

     

    “Senior Convertible
Notes” means those certain senior convertible notes issued and sold by
the Borrower in accordance with and pursuant to the terms and provisions of the
Senior Convertible Notes indenture, in the aggregate principal amount of
$287,500,000, due on or about April 1, 2027.  For purposes of this
Agreement, the Senior Convertible Notes shall not be deemed a Swap Agreement
subject to the prohibitions of Section 9.19.

     

    “S&P” means
Standard & Poor’s Ratings Group, a division of The McGraw-Hill Companies,
Inc., and any successor thereto that is a nationally recognized rating
agency.

     

    “Statutory Reserve
Rate” means a fraction (expressed as a decimal), the numerator of which
is the number one and the denominator of which is the number one minus the
aggregate of the maximum reserve percentages (including any marginal, special,
emergency or supplemental reserves) expressed as a decimal established by the
Board to which the Administrative Agent is subject, with respect to the Adjusted
LIBO Rate, for eurocurrency funding (currently referred to as “Eurocurrency
Liabilities” in Regulation D of the Board).  Such reserve percentages
shall include those imposed pursuant to such Regulation D.  Eurodollar
Loans shall be deemed to constitute eurocurrency funding and to be subject to
such reserve requirements without benefit of or credit for proration, exemptions
or offsets that may be available from time to time to any Lender under such
Regulation D or any comparable regulation.  The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.

     

    “Subsidiary” means:
(a) any Person of which at least a majority of the outstanding Equity Interests
having by the terms thereof ordinary voting power to elect a majority of the
board of directors, manager or other governing body of such Person (irrespective
of whether or not at the time Equity Interests of any other class or classes of
such Person shall have or might have voting power by reason of the happening of
any contingency) is at the time directly or indirectly owned or controlled by
the Borrower or one or more of its Subsidiaries and (b) any partnership of which
the Borrower or any of its Subsidiaries is a general partner.  Unless
otherwise indicated herein, each reference to the term “Subsidiary” shall
mean a Subsidiary of the Borrower.

     

    “Substantial Portion”
means, with respect to the Property of the Borrower and its Subsidiaries,
Property which represents more than 10% of the consolidated assets of the
Borrower and its Subsidiaries or property which is responsible for more than 10%
of the consolidated net sales or of the consolidated net income of the Borrower
and its Subsidiaries, in each case, as would be shown in the consolidated
financial statements of the Borrower and its Subsidiaries at the beginning of
the twelve-month period ending with the month in which such determination is
made (or if financial statements have not been delivered hereunder for that
month which begins the twelve-month period, then the financial statements
delivered hereunder for the quarter ending immediately prior to that
month).

     

    “Swap Agreement” means
any agreement with respect to any swap, forward, future or derivative
transaction or option or similar agreement, whether exchange traded,
“over-the-counter” or otherwise, involving, or settled by reference to, one or
more rates, currencies, commodities, equity or debt instruments or securities,
or economic, financial or pricing indices or measures of economic, financial or
pricing risk or value or any similar transaction or any combination of these
transactions; provided that no phantom stock or similar plan providing for
payments only on account of services provided by current or former directors,
officers, employees or consultants of the Borrower or the Subsidiaries shall be
a Swap Agreement.

     

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

     

    “Taxes” means any and
all present or future taxes, levies, imposts, duties, deductions, charges or
withholdings imposed by any Governmental Authority.

     

    “Termination Date”
means the earlier of the Maturity Date and the date of termination of the
Commitments.

     

    “Total Debt” means, at
any date, all Debt of the Borrower and the Consolidated Subsidiaries on a
consolidated basis, exclusive of all accounts payable, accrued expenses,
liabilities or other obligations to pay the deferred purchase price of Property
or services to the extent any of same was included in Debt of the Borrower and
the Consolidated Subsidiaries on a consolidated basis.

     

    “Transactions” means,
with respect to (a) the Borrower, the execution, delivery and performance by the
Borrower of this Agreement, and each other Loan Document to which it is a party,
the borrowing of Loans, the use of the proceeds thereof and the issuance of
Letters of Credit hereunder, and the grant of Liens by the Borrower on Mortgaged
Properties and other Properties pursuant to the Security Instruments and (b)
each Material Subsidiary, the execution, delivery and performance by such
Material Subsidiary of each Loan Document to which it is a party, the
guaranteeing of the Indebtedness and the other obligations under the Guaranty
Agreement by such Material Subsidiary and such Material Subsidiary’s grant of
the security interests and provision of collateral thereunder, and the grant of
Liens by such Material Subsidiary on Mortgaged Properties and other Properties
pursuant to the Security Instruments.

     

    “Type”, when used in
reference to any Loan or Borrowing, refers to whether the rate of interest on
such Loan, or on the Loans comprising such Borrowing, is determined by reference
to the Alternate Base Rate or the Adjusted LIBO Rate.

     

    “Wholly-Owned
Subsidiary” means any Subsidiary of which all of the outstanding Equity
Interests (other than any directors’ qualifying shares mandated by applicable
law), on a fully-diluted basis, are owned by the Borrower or one or more of the
Wholly-Owned Subsidiaries.

     

    Section
1.03 Types of Loans and
Borrowings.  For
purposes of this Agreement, Loans and Borrowings, respectively, may be
classified and referred to by Type (e.g., a “Eurodollar Loan” or a
“Eurodollar
Borrowing”).

     

    Section
1.04 Terms
Generally.  The
definitions of terms herein shall apply equally to the singular and plural forms
of the terms defined.  Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter
forms.  The words “include”, “includes” and “including” shall be
deemed to be followed by the phrase “without limitation”.  The word
“will” shall be construed to have the same meaning and effect as the word
“shall”.  Unless the context requires otherwise (a) any definition of
or reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person’s successors and assigns (subject to the restrictions contained herein),
(c) the words “herein”, “hereof” and “hereunder”, and words of similar import,
shall be construed to refer to this Agreement in its entirety and not to any
particular provision hereof and (d) all references herein to Articles, Sections,
Annexes, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Annexes, Exhibits and Schedules to, this
Agreement.

     

    Section
1.05 Accounting Terms and
Determinations; GAAP.  Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all determinations with respect to accounting matters hereunder
shall be made, and all financial statements and certificates and reports as to
financial matters required to be furnished to the Administrative Agent or the
Lenders hereunder shall be prepared, in accordance with GAAP, applied on a basis
consistent with the Financial Statements except for changes in which Borrower’s
independent certified public accountants concur and which are disclosed to
Administrative Agent on the next date on which financial statements are required
to be delivered to the Lenders pursuant to Section
8.01(a); provided that, unless the Borrower and the Majority Lenders shall
otherwise agree in writing, no such change shall modify or affect the manner in
which compliance with the covenants contained herein is computed such that all
such computations shall be conducted utilizing financial information presented
consistently with prior periods.

                    

    ARTICLE
II

     

    The
Credits

     

    Section
2.01 Commitments.  Subject
to the terms and conditions set forth herein, each Lender agrees to make Loans
to the Borrower during the Availability Period in an aggregate principal amount
that will not result in (a) such Lender’s Revolving Credit Exposure exceeding
such Lender’s Commitment or (b) the Aggregate Revolving Credit Exposures
exceeding the Aggregate Commitments then in effect.  Within the
foregoing limits and subject to the terms and conditions set forth herein, the
Borrower may borrow, repay and reborrow the Loans.

     

    Section
2.02 Loans and
Borrowings.

     

    (a) Borrowings; Several
Obligations.  Each Loan shall be made as part of a Borrowing
consisting of Loans made by the Lenders ratably in accordance with their
respective Commitments.  The failure of any Lender to make any Loan
required to be made by it shall not relieve any other Lender of its obligations
hereunder; provided that the Commitments are several and no Lender shall be
responsible for any other Lender’s failure to make Loans as
required.

     

    (b) Types of
Loans.  Subject to Section 3.03,
each Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as
the Borrower may request in accordance herewith.  Each Lender at its
option may make any Eurodollar Loan by causing any domestic or foreign branch or
Affiliate of such Lender to make such Loan; provided that any exercise of such
option shall not affect the obligation of the Borrower to repay such Loan in
accordance with the terms of this Agreement.

     

    (c) Minimum Amounts; Limitation
on Number of Borrowings.  At the commencement of each Interest
Period for any Eurodollar Borrowing, such Borrowing shall be in an aggregate
amount that is an integral multiple of $1,000,000 and not less than
$3,000,000.  At the time that each ABR Borrowing is made, such
Borrowing shall be in an aggregate amount that is an integral multiple of
$500,000 and not less than $1,000,000; provided that an ABR Borrowing may be in
an aggregate amount that is equal to the entire unused balance of the total
Commitments or that is required to finance the reimbursement of an LC
Disbursement as contemplated by Section
2.08(f).  Borrowings of more than one Type may be outstanding at
the same time; provided that there shall not at any time be more than a total of
six (6)
Eurodollar Borrowings outstanding.  Notwithstanding any other
provision of this Agreement, the Borrower shall not be entitled to request, or
to elect to convert or continue, any Borrowing if the Interest Period requested
with respect thereto would end after the Maturity Date.

     

    (d) Notes.  The
Loans made by each Lender shall be evidenced by a single promissory note of the
Borrower in substantially the form of Exhibit A, dated, in the case of (i) any
Lender party hereto as of the date of this Agreement, as of the date of this
Agreement, (ii) any Lender that becomes a party hereto pursuant to an Assignment
and Assumption, as of the effective date of the assignment and assumption, or
(iii) any Lender that becomes a party hereto in connection with an increase in
the Aggregate Commitment pursuant to Section 2.06(c),
as of the effective date of such increase, payable to the order of such Lender
in a principal amount equal to its Commitment as in effect on such date, and
otherwise duly completed.  In the event that any Lender’s Commitment
increases or decreases for any reason (whether pursuant to Section 2.06, Section
12.04(b) or otherwise), the Borrower shall deliver or cause to be delivered
on the effective date of such increase or decrease, a new Note payable to the
order of such Lender in a principal amount equal to its Commitment after giving
effect to such increase or decrease, and otherwise duly
completed.  The date, amount, Type, interest rate and, if applicable,
Interest Period of each Loan made by each Lender, and all payments made on
account of the principal thereof, shall be recorded by such Lender on its books
for its Note, and, prior to any transfer, may be endorsed by such Lender on a
schedule attached to such Note or any continuation thereof or on any separate
record maintained by such Lender.  Failure to make any such notation
or to attach a schedule shall not affect any Lender’s or the Borrower’s rights
or obligations in respect of such Loans or affect the validity of such transfer
by any Lender of its Note.  

     

    Section
2.03 Requests for
Borrowings.  To
request a Borrowing, the Borrower shall notify the Administrative Agent of such
request by telephone (a) in the case of a Eurodollar Borrowing, not later than
1:00 p.m., Charlotte, North Carolina time, three Business
Days before the date of the proposed Borrowing or (b) in the case of a ABR
Borrowing, not later than 1:00 p.m., Charlotte, North Carolina time, one
Business Day before the date of the proposed Borrowing; provided that any such
notice of an ABR Borrowing to finance the reimbursement of an LC Disbursement as
contemplated by Section 2.08(f) may be given not
later than 11:00 a.m., Charlotte, North Carolina time, on the date of the
proposed Borrowing.  Each such telephonic Borrowing Request shall be
irrevocable and shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Borrowing Request in a form approved by the
Administrative Agent and signed by the Borrower.  Each such telephonic
and written Borrowing Request shall specify the following information in
compliance with Section 2.02:

     

    (i) the
aggregate amount of the requested Borrowing;

     

    (ii) the date
of such Borrowing, which shall be a Business Day in the United
States;

     

    (iii) whether
such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;

     

    (iv) in the
case of a Eurodollar Borrowing, the initial Interest Period to be applicable
thereto, which shall be a period contemplated by the definition of the term
“Interest Period”;

     

    (v) the
amount of the then effective Borrowing Base, the current Aggregate Revolving
Credit Exposures (without regard to the requested Borrowing) and the pro forma Aggregate Revolving
Credit Exposures (giving effect to the requested Borrowing); and

     

    (vi) the
location and number of the Borrower’s account to which funds are to be
disbursed, which shall comply with the requirements of Section 2.05.

     

    If no
election as to the Type of Borrowing is specified, then the requested Borrowing
shall be an ABR Borrowing.  If no Interest Period is specified with
respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed
to have selected an Interest Period of one month’s duration.  Each
Borrowing Request shall constitute a representation that the amount of the
requested Borrowing shall not cause the Aggregate Revolving Credit Exposures to
exceed the Aggregate Commitments then in effect.

     

    Promptly
following receipt of a Borrowing Request in accordance with this Section 2.03, the Administrative Agent shall advise each
Lender of the details thereof and of the amount of such Lender’s Loan to be made
as part of the requested Borrowing.

     

    Section
2.04 Interest
Elections.

     

    (a) Conversion and
Continuance.  Each Borrowing initially shall be of the Type
specified in the applicable Borrowing Request and, in the case of a Eurodollar
Borrowing, shall have an initial Interest Period as specified in such Borrowing
Request.  Thereafter, the Borrower may elect to convert such Borrowing
to a different Type or to continue such Borrowing and, in the case of a
Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in
this Section 2.04.  The Borrower may elect
different options with respect to different portions of the affected Borrowing,
in which case each such portion shall be allocated ratably among the Lenders
holding the Loans comprising such Borrowing, and the Loans comprising each such
portion shall be considered a separate Borrowing.

     

    (b) Interest Election
Requests.  To make an election pursuant to this Section 2.04, the Borrower shall notify the
Administrative Agent of such election by telephone by the time that a Borrowing
Request would be required under Section 2.03 if the
Borrower were requesting a Borrowing of the Type resulting from such election to
be made on the effective date of such election.  Each such telephonic
Interest Election Request shall be irrevocable and shall be confirmed promptly
by hand delivery or telecopy to the Administrative Agent of a written Interest
Election Request in a form approved by the Administrative Agent and signed by
the Borrower.

     

    (c) Information in Interest
Election Requests.  Each telephonic and written Interest
Election Request shall specify the following information in compliance with Section 2.02:

     

    (i) the
Borrowing to which such Interest Election Request applies and, if different
options are being elected with respect to different portions thereof, the
portions thereof to be allocated to each resulting Borrowing (in which case the
information to be specified pursuant to Section
2.04(c)(iii) and (iv) shall be specified for
each resulting Borrowing);

     

    (ii) the
effective date of the election made pursuant to such Interest Election Request,
which shall be a Business Day;

     

    (iii) whether
the resulting Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;
and

     

    (iv) if the
resulting Borrowing is a Eurodollar Borrowing, the Interest Period to be
applicable thereto after giving effect to such election, which shall be a period
contemplated by the definition of the term “Interest Period”.

     

    (d) If any
such Interest Election Request requests a Eurodollar Borrowing but does not
specify an Interest Period, then the Borrower shall be deemed to have selected
an Interest Period of one month’s duration.

     

    (e) Notice to Lenders by the
Administrative Agent.  Promptly following receipt of an
Interest Election Request, the Administrative Agent shall advise each Lender of
the details thereof and of such Lender’s portion of each resulting
Borrowing.

     

    (f) Effect of Failure to Deliver
Timely Interest Election Request and Events of Default on Interest
Election.  If the Borrower fails to deliver a timely Interest
Election Request with respect to a Eurodollar Borrowing prior to the end of the
Interest Period applicable thereto, then, unless such Borrowing is repaid as
provided herein, at the end of such Interest Period such Borrowing shall be
converted to an ABR Borrowing.  Notwithstanding any contrary provision
hereof, if an Event of Default has occurred and is continuing:  (i) no
outstanding Borrowing may be converted to or continued as a Eurodollar Borrowing
and (ii) unless repaid, each Eurodollar Borrowing shall be converted to an ABR
Borrowing at the end of the Interest Period applicable thereto.

     

    Section
2.05 Funding of
Borrowings.

     

    (a) Funding by
Lenders.  Each Lender shall make each Loan to be made by it
hereunder on the proposed date thereof by wire transfer of immediately available
funds by 2:00 p.m. Charlotte, North Carolina time, to the account of the
Administrative Agent most recently designated by it for such purpose by notice
to the Lenders.  The Administrative Agent will make such Loans
available to the Borrower by promptly crediting the amounts so received, in like
funds, to an account of the Borrower maintained with the Administrative Agent in
Charlotte, North Carolina and designated by the Borrower in the applicable
Borrowing Request; provided that ABR Loans made to finance the reimbursement of
an LC Disbursement as provided in Section 2.08(f)
shall be remitted by the Administrative Agent to the Issuing Bank.

     

    (b) Presumption of Funding by
the Lenders.  Unless the Administrative Agent shall have
received written notice from a Lender prior to the proposed date of any
Borrowing that such Lender will not make available to the Administrative Agent
such Lender’s share of such Borrowing, the Administrative Agent may assume that
such Lender has made such share available on such date in accordance with Section 2.05(a) and may, in reliance upon such
assumption, make available to the Borrower a corresponding amount.  In
such event, if a Lender has not in fact made its share of the applicable
Borrowing available to the Administrative Agent, then the applicable Lender and
the Borrower severally agree to pay to the Administrative Agent forthwith on
demand such corresponding amount with interest thereon, for each day from and
including the date such amount is made available to the Borrower to but
excluding the date of payment to the Administrative Agent, at (i) in the case of
such Lender, the greater of the Federal Funds Effective Rate and a rate
determined by the Administrative Agent in accordance with banking industry rules
on interbank compensation or (ii) in the case of the Borrower, the interest rate
applicable to ABR Loans; provided, however, such demands shall be made first
upon the applicable Lender and then upon the Borrower.  If such Lender
pays such amount to the Administrative Agent, then such amount shall constitute
such Lender’s Loan included in such Borrowing.

     

    Section
2.06 Termination, Reduction and
Increase of Aggregate Commitment.

     

    (a) Scheduled Termination of
Commitments.  Unless previously terminated, the Commitments
shall terminate on the Maturity Date.  If at any time the Maximum
Credit Amount or the Borrowing Base is terminated or reduced to zero, then the
Commitments shall terminate on the effective date of such termination or
reduction.

     

    (b) Optional Termination and
Reduction of Aggregate Commitment.

     

    (i) The
Borrower may at any time terminate, or from time to time reduce, the Aggregate
Commitment; provided that A. each reduction of the Aggregate Commitment shall be
in an amount that is an integral multiple of $1,000,000 and not
less than $5,000,000 and B.
the Borrower shall not terminate or reduce the Aggregate Commitment if, after
giving effect to any concurrent prepayment of the Loans in accordance with Section 3.04(c), the Aggregate Revolving Credit
Exposures would exceed the Aggregate Commitments.

     

    (ii) The
Borrower shall notify the Administrative Agent of any election to terminate or
reduce the Aggregate Commitment under Section
2.06(b)(i) at least three Business Days prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof.  Promptly following receipt of any notice, the Administrative
Agent shall advise the Lenders of the contents thereof.  Each notice
delivered by the Borrower pursuant to this Section
2.06(b)(ii) shall be irrevocable.  Any termination or reduction of
the Aggregate Commitment shall be permanent and may not be reinstated except
pursuant to Section 2.06(c).  Each
reduction of the Aggregate Commitment shall be made ratably among the Lenders in
accordance with each Lender’s Applicable Percentage.

     

    (c) Optional Increase in
Aggregate Commitment.

     

    (i) Subject
to the conditions set forth in Section 2.06(c)(ii),
the Borrower may increase the Aggregate Commitment then in effect by increasing
the Commitment of a Lender or by causing a Person acceptable to the
Administrative Agent that at such time is not a Lender to become a Lender (an
“Additional
Lender”).

     

    (ii) Any
increase in the Aggregate Commitment shall be subject to the following
additional conditions:

     

    A. such
increase shall not be less than $10,000,000 unless the Administrative Agent
otherwise consents;

     

    B. no
Default shall have occurred and be continuing at the effective date of such
increase;

     

    C. on the
effective date of such increase, no Eurodollar Borrowings shall be outstanding
(or if any Eurodollar Borrowings are outstanding, then the effective date of
such increase shall be the last day of the Interest Period in respect of such
Eurodollar Borrowings);

     

    D. each
Lender shall have had the option to increase its Commitment by its Applicable
Percentage of the amount of such increase; provided that, no Lender’s
Commitment may be increased without the consent of such Lender;

     

    E. if the
Borrower elects to increase the Aggregate Commitment by increasing the
Commitment of a Lender, the Borrower and such Lender shall execute and deliver
to the Administrative Agent a certificate substantially in the form of Exhibit E
(a “Commitment
Increase
Certificate”), and further, in the event a new Note is required to
reflect the increased Commitment of such Lender, then in that case, the Borrower
shall deliver a new Note (after presentation of same to Borrower by the
Administrative Agent) payable to the order of such Lender in a principal amount
equal to its Commitment after giving effect to such increase, and otherwise duly
completed, together with a processing and recordation fee of $3,500 payable by
the Borrower to the Administrative Agent and the reimbursement by the Borrower
of the reasonable legal fees of counsel to the Administrative Agent;

     

    F. If the
Borrower elects to increase the Aggregate Commitment by causing an Additional
Lender to become a party to this Agreement, then the Borrower and such
Additional Lender shall execute and deliver to the Administrative Agent a
certificate substantially in the form of Exhibit F (an “Additional Lender
Certificate”), together with an Administrative Questionnaire and a
processing and recordation fee of $3,500 payable by such Additional Lender and
the reimbursement by the Borrower of the reasonable legal fees of counsel to the
Administrative Agent, and the Borrower shall deliver a Note (after presentation
of same to Borrower by the Administrative Agent) payable to the order of such
Additional Lender in a principal amount equal to its Commitment, and otherwise
duly completed.

     

    (iii) Subject
to acceptance and recording thereof pursuant to Section
2.06(c)(iv), from and after the effective date specified in the Commitment
Increase Certificate or the Additional Lender Certificate (or if any Eurodollar
Borrowings are outstanding, then the last day of the Interest Period in respect
of such Eurodollar Borrowings):  A. the amount of the Aggregate
Commitment shall be increased as set forth therein, and B. in the case of an
Additional Lender Certificate, any Additional Lender party thereto shall be a
party to this Agreement and the other Loan Documents and have the rights and
obligations of a Lender under this Agreement and the other Loan
Documents.  In addition, the Lender or the Additional Lender, as
applicable, shall purchase a pro rata portion of the Aggregate Revolving Credit
Exposures of each of the other Lenders (and such Lenders hereby agree to sell
and to take all such further action to effectuate such sale) such that each
Lender (including any Additional Lender, if applicable) shall hold its
Applicable Percentage of the Aggregate Revolving Credit Exposures after giving
effect to the increase in the Aggregate Commitment;

     

    (iv) Upon its
receipt of a duly completed Commitment Increase Certificate or an Additional
Lender Certificate, executed by the Borrower and the Lender or the Borrower and
the Additional Lender party thereto, as applicable, the processing and recording
fee referred to in Section 2.06(c)(ii), the
Administrative Questionnaire referred to in Section
2.06(c)(ii), if applicable, and the written consent of the Administrative
Agent to such increase required by Section
2.06(c)(i), the Administrative Agent shall accept such Commitment Increase
Certificate or Additional Lender Certificate and record the information
contained therein in the Register required to be maintained by the
Administrative Agent pursuant to Section
12.04(b)(iv).  No increase in the Aggregate Commitment shall be
effective for purposes of this Agreement unless it has been recorded in the
Register as provided in this Section 2.06(c)(iv);
and

     

    G.           After
giving effect to an increase in the Aggregate Commitment, the Aggregate
Commitment shall not exceed the Maximum Credit Amount.

     

    Section
2.07 Borrowing
Base.

     

    (a) Initial Borrowing
Base.  For the period from and including the Effective Date to
but excluding the first Redetermination Date, the amount of the Borrowing Base
shall be $1,400,000,000.  Notwithstanding
the foregoing, the Borrowing Base shall be subject to further adjustments from
time to time pursuant to this Section 2.07 and Section
8.13(c), Section 9.12(a), Section 9.13 and Section
9.21.

     

    (b) Scheduled and Interim
Redeterminations.  Subject to Section
2.07(d), the Borrowing Base shall be redetermined (a “Scheduled
Redetermination”) no later than April 1 and October 1 of each year,
commencing October 1, 2008.  In addition, the Borrower may, by
notifying the Administrative Agent thereof, and the Administrative Agent may, at
the direction of the Majority Lenders, by notifying the Borrower thereof, one
time during any 12-month period, elect to cause the Borrowing Base to be
redetermined between Scheduled Redeterminations (an “Interim
Redetermination”) in accordance with this Section
2.07.

     

    (c) Scheduled and
Interim  Redetermination Procedure.

     

    (i) Each
Scheduled Redetermination and each Interim Redetermination shall be effectuated
as follows:  Upon receipt by the Administrative Agent of A. the
Reserve Report and the certificate required to be delivered by the Borrower to
the Administrative Agent, in the case of a Scheduled Redetermination, pursuant
to Section 8.12(a) and (c), and, in the case of an Interim Redetermination,
pursuant to Section 8.12(b) and (c), and B. such other reports, data and supplemental
information, including, without limitation, the information provided pursuant to
Section 8.12(c), as may, from time to time, be
reasonably requested by the Majority Lenders (the Reserve Report, such
certificate and such other reports, data and supplemental information being the
“Engineering
Reports”), the Administrative Agent shall evaluate the information
contained in the Engineering Reports and shall, in good faith, propose a new
Borrowing Base (the “Proposed Borrowing
Base”) based upon such information and such other information (including,
without limitation, the status of title information with respect to the Oil and
Gas Properties as described in the Engineering Reports and the existence of any
other Debt) as the Administrative Agent deems appropriate and consistent with
its normal oil and gas lending criteria as it exists at the particular
time.

     

    (ii) The
Administrative Agent shall notify the Borrower and the Lenders of the Proposed
Borrowing Base (the “Proposed Borrowing Base
Notice”):

     

    A. in the
case of a Scheduled Redetermination 1. if the Administrative Agent shall have
received the Engineering Reports required to be delivered by the Borrower
pursuant to Section 8.12(a) and (c) in a timely and complete manner, then on or before
March 15th and
September 15th of such year following
the date of delivery or 2. if the Administrative Agent shall not have received
the Engineering Reports required to be delivered by the Borrower pursuant to Section 8.12(a) and (c) in a
timely and complete manner, then promptly after the Administrative Agent has
received complete Engineering Reports from the Borrower and has had a reasonable
opportunity to determine the Proposed Borrowing Base in accordance with Section 2.07(c)(i); and

     

    B. in the
case of an Interim Redetermination, promptly, and in any event, within fifteen
(15) days after the Administrative Agent has received the required Engineering
Reports.

     

    (iii) Any
Proposed Borrowing Base that would increase the Borrowing Base then in effect
must be approved or deemed to have been approved by all of the Lenders as
provided in this Section 2.07(c)(iii); and any
Proposed Borrowing Base that would decrease or maintain the Borrowing Base then
in effect must be approved or be deemed to have been approved by the Majority
Lenders as provided in this Section
2.07(c)(iii).  Upon receipt of the Proposed Borrowing Base Notice,
each Lender shall have fifteen (15) days to agree with the Proposed Borrowing
Base or disagree with the Proposed Borrowing Base by proposing an alternate
Borrowing Base.  If at the end of such fifteen (15) days, any Lender
has not communicated its approval or disapproval in writing to the
Administrative Agent, such silence shall be deemed to be an approval of the
Proposed Borrowing Base.  If, at the end of such 15-day period, all of
the Lenders, in the case of a Proposed Borrowing Base that would increase the
Borrowing Base then in effect, or the Majority Lenders, in the case of a
Proposed Borrowing Base that would decrease or maintain the Borrowing Base then
in effect, have approved or deemed to have approved, as aforesaid, then the
Proposed Borrowing Base shall become the new Borrowing Base, effective on the
date specified in Section 2.07(d).  If,
however, at the end of such 15-day period, all of the Lenders or the Majority
Lenders, as applicable, have not approved or deemed to have approved, as
aforesaid, then for purposes of this Section 2.07, the Administrative Agent
shall poll the Lenders to ascertain the highest Borrowing Base then acceptable
(aa) to the Majority Lenders, if such amount would decrease the Borrowing Base
then in effect, or (bb) to all of the Lenders, if such amount would increase the
Borrowing Base then in effect, which amount shall become the new Borrowing Base,
effective on the date specified in Section
2.07(d).

     

    (iv) If any
Lender refuses to approve a Proposed Borrowing Base pursuant to Section 2.07(c)(iii), the Borrower shall have the right
to cause the Commitment of such dissenting Lender to be replaced pursuant to
Section 5.06.

     

    (d) Effectiveness of a
Redetermined Borrowing Base.  After a redetermined Borrowing
Base is approved or is deemed to have been approved by all of the Lenders or
Majority Lenders, as applicable, pursuant to Section
2.07(c)(iii), the Administrative Agent shall notify the Borrower and the
Lenders of the amount of the redetermined Borrowing Base (the “New Borrowing Base
Notice”), and such amount shall become the new Borrowing Base, effective
and applicable to the Borrower, the Agents, the Issuing Bank and the
Lenders:

     

    A. in the
case of a Scheduled Redetermination, 1. if the Administrative Agent shall have
received the Engineering Reports required to be delivered by the Borrower
pursuant to Section 8.12(a) and (c) in a timely and complete manner, then no later than
April 1 or October 1, as applicable, following such notice, or 2. if the
Administrative Agent shall not have received the Engineering Reports required to
be delivered by the Borrower pursuant to Section
8.12(a) and (c) in a timely and complete manner,
then on the Business Day next succeeding delivery of such notice;
and

     

    B. in the
case of an Interim Redetermination, on the Business Day next succeeding delivery
of such notice.

     

    C. Such
amount shall then become the Borrowing Base until the next Scheduled
Redetermination Date, the next Interim Redetermination Date or the next
adjustment to the Borrowing Base under Section
8.13(c), Section 9.12(a) or Section 9.13, whichever occurs
first.  Notwithstanding the foregoing, no Scheduled Redetermination or
Interim Redetermination shall become effective until the New Borrowing Base
Notice related thereto is received by the Borrower.

     

    Section
2.08 Letters of
Credit.

     

    (a) General.  Subject
to the terms and conditions set forth herein, the Borrower may request the
issuance of Letters of Credit for its own account or for the account of any of
its Material Subsidiaries, in a form reasonably acceptable to the Administrative
Agent and the Issuing Bank, at any time and from time to time during the
Availability Period.  In the event of any inconsistency between the
terms and conditions of this Agreement and the terms and conditions of any form
of letter of credit application or other agreement submitted by the Borrower to,
or entered into by the Borrower with, the Issuing Bank relating to any Letter of
Credit, the terms and conditions of this Agreement shall control.

     

    (b) Notice of Issuance,
Amendment, Renewal, Extension; Certain Conditions.  To request
the issuance of a Letter of Credit (or the amendment, renewal or extension of an
outstanding Letter of Credit), the Borrower shall hand deliver or telecopy (or
transmit by electronic communication, if arrangements for doing so have been
approved by the Issuing Bank) to the Issuing Bank and the Administrative Agent
(not less than three (3) Business Days in advance of the requested date of
issuance, amendment, renewal or extension) a notice:

     

    (i) requesting
the issuance of a Letter of Credit or identifying the Letter of Credit to be
amended, renewed or extended;

     

    (ii) specifying
the date of issuance, amendment, renewal or extension (which shall be a Business
Day);

     

    (iii) specifying
the date on which such Letter of Credit is to expire (which shall comply with Section 2.08(d));

     

    (iv) specifying
the amount of such Letter of Credit;

     

    (v) specifying
the name and address of the beneficiary thereof and such other information as
shall be necessary to prepare, amend, renew or extend such Letter of Credit;
and

     

    (vi) specifying
the amount of the then effective Borrowing Base, the current Aggregate Revolving
Credit Exposures (without regard to the requested Letter of Credit or the
requested amendment, renewal or extension of an outstanding Letter of Credit)
and the pro forma
Aggregate Revolving Credit Exposures (giving effect to the requested Letter of
Credit or the requested amendment, renewal or extension of an outstanding Letter
of Credit).

     

    Each
notice shall constitute a representation that after giving effect to the
requested issuance, amendment, renewal or extension, as applicable, (i) the LC
Exposure shall not exceed the LC Commitment and (ii) the Aggregate Revolving
Credit Exposures shall not exceed the Aggregate Commitments.

     

    (c) If
requested by the Issuing Bank, the Borrower also shall submit a letter of credit
application on the Issuing Bank’s standard form in connection with any request
for a Letter of Credit.

     

    (d) Expiration
Date.  Each Letter of Credit shall expire at or prior to the
close of business on the earlier of (i) the date one year after the date of the
issuance of such Letter of Credit (or, in the case of any renewal or extension
thereof, one year after such renewal or extension) and (ii) the date that is
five Business Days prior to the Maturity Date.

     

    (e) Participations.  By
the issuance of a Letter of Credit (or an amendment to a Letter of Credit
increasing the amount thereof) and without any further action on the part of the
Issuing Bank or the Lenders, the Issuing Bank hereby grants to each Lender, and
each Lender hereby acquires from the Issuing Bank, a participation in such
Letter of Credit equal to such Lender’s Applicable Percentage of the aggregate
amount available to be drawn under such Letter of Credit.  In
consideration and in furtherance of the foregoing, each Lender hereby absolutely
and unconditionally agrees to pay to the Administrative Agent, for the account
of the Issuing Bank, such Lender’s Applicable Percentage of each LC Disbursement
made by the Issuing Bank and not reimbursed by the Borrower on the date due as
provided in Section 2.08(f), or of any reimbursement
payment required to be refunded to the Borrower for any reason.  Each
Lender acknowledges and agrees that its obligation to acquire participations
pursuant to this Section 2.08(e) in respect of
Letters of Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or extension of any
Letter of Credit or the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever.

     

    (f) Reimbursement.  If
the Issuing Bank shall make any LC Disbursement in respect of a Letter of
Credit, the Borrower shall reimburse such LC Disbursement by paying to the
Administrative Agent an amount equal to such LC Disbursement not later than
12:00 noon, Charlotte, North Carolina time, on the date that such LC
Disbursement is made, if the Borrower shall have received notice of such LC
Disbursement prior to 12:00 noon, Charlotte, North
Carolina time, on
such date, or, if such notice has not been received by the Borrower prior to
such time on such date, then not later than 12:00 noon Charlotte, North
Carolina time, on
(i) the Business Day that the Borrower receives such notice, if such notice is
received prior to 12:00 noon, Charlotte, North
Carolina time, on the day of receipt, or (ii) the Business Day immediately
following the day that the Borrower receives such notice, if such notice is not
received prior to such time on the day of receipt; provided that if such LC
Disbursement is not less than $1,000,000, the Borrower may, subject to the
conditions to Borrowing set forth herein, request in accordance with Section 2.03 that such payment be financed with a ABR
Borrowing in an equivalent amount and, to the extent so financed, the Borrower’s
obligation to make such payment shall be discharged and replaced by the
resulting ABR Borrowing.  If the Borrower makes such a request (and if
the Borrower fails to make such a request and has not made the relevant
reimbursement, it shall be deemed to have made such a request), the
Administrative Agent shall notify each Lender of the applicable LC Disbursement,
the payment then due from the Borrower in respect thereof and such Lender’s
Applicable Percentage thereof.  Promptly following receipt of such
notice, each Lender shall pay to the Administrative Agent its Applicable
Percentage of the payment then due from the Borrower, in the same manner as
provided in Section 2.05 with respect to Loans made
by such Lender (and Section 2.05 shall apply, mutatis mutandis, to the
payment obligations of the Lenders), and the Administrative Agent shall promptly
pay to the Issuing Bank the amounts so received by it from the
Lenders.  Promptly following receipt by the Administrative Agent of
any payment from the Borrower pursuant to this Section
2.08(f), the Administrative Agent shall distribute such payment to the
Issuing Bank or, to the extent that Lenders have made payments pursuant to this
Section 2.08(f) to reimburse the Issuing Bank, then
to such Lenders and the Issuing Bank as their interests may appear.

     

    (g) Obligations
Absolute.  The Borrower’s obligation to reimburse LC
Disbursements as provided in Section 2.08(f) shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (i) any lack of validity or enforceability of any
Letter of Credit, any Letter of Credit Agreement or this Agreement, or any term
or provision therein, (ii) any draft or other document presented under a Letter
of Credit proving to be forged, fraudulent or invalid in any respect or any
statement therein being untrue or inaccurate in any respect, (iii) payment by
the Issuing Bank under a Letter of Credit against presentation of a draft or
other document that does not comply with the terms of such Letter of Credit or
any Letter of Credit Agreement, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section 2.08(g), constitute a
legal or equitable discharge of, or provide a right of setoff against, the
Borrower’s obligations hereunder.  Neither the Administrative Agent,
the Lenders nor the Issuing Bank, nor any of their Related Parties shall have
any liability or responsibility by reason of or in connection with the issuance
or transfer of any Letter of Credit or any payment or failure to make any
payment thereunder (irrespective of any of the circumstances referred to in the
preceding sentence), or any error, omission, interruption, loss or delay in
transmission or delivery of any draft, notice or other communication under or
relating to any Letter of Credit (including any document required to make a
drawing thereunder), any error in interpretation of technical terms or any
consequence arising from causes beyond the control of the Issuing Bank; provided
that the foregoing shall not be construed to excuse the Issuing Bank from
liability to the Borrower to the extent of any direct damages (as opposed to
consequential damages, claims in respect of which are hereby waived by the
Borrower to the extent permitted by applicable law) suffered by the Borrower
that are caused by the Issuing Bank’s failure to exercise care when determining
whether drafts and other documents presented under a Letter of Credit comply
with the terms thereof.  The parties hereto expressly agree that, in
the absence of gross negligence or willful misconduct on the part of the Issuing
Bank (as finally determined by a court of competent jurisdiction), the Issuing
Bank shall be deemed to have exercised all requisite care in each such
determination.  In furtherance of the foregoing and without limiting
the generality thereof, the parties agree that, with respect to documents
presented which appear on their face to be in substantial compliance with the
terms of a Letter of Credit, the Issuing Bank may, in its sole discretion,
either accept and make payment upon such documents without responsibility for
further investigation, regardless of any notice or information to the contrary,
or refuse to accept and make payment upon such documents if such documents are
not in strict compliance with the terms of such Letter of Credit.

     

    (h) Disbursement
Procedures.  The Issuing Bank shall, promptly following its
receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit.  The Issuing Bank shall promptly
notify the Administrative Agent and the Borrower by telephone (confirmed by
telecopy) of such demand for payment and whether the Issuing Bank has made or
will make an LC Disbursement thereunder; provided that any failure to give or
delay in giving such notice shall not relieve the Borrower of its obligation to
reimburse the Issuing Bank and the Lenders with respect to any such LC
Disbursement.

     

    (i) Interim
Interest.  If the Issuing Bank shall make any LC Disbursement,
then, until the Borrower shall have reimbursed the Issuing Bank for such LC
Disbursement (either with its own funds or a Borrowing under Section 2.08(f)), the unpaid amount thereof shall bear
interest, for each day from and including the date such LC Disbursement is made
to but excluding the date that the Borrower reimburses such LC Disbursement, at
the rate per annum then applicable to ABR Loans.  Interest accrued
pursuant to this Section 2.08(i) shall be for the
account of the Issuing Bank, except that interest accrued on and after the date
of payment by any Lender pursuant to Section 2.08(f)
to reimburse the Issuing Bank shall be for the account of such Lender to the
extent of such payment.

     

    (j) Replacement of the Issuing
Bank.  The Issuing Bank may be replaced at any time by written
agreement among the Borrower, the Administrative Agent, the replaced Issuing
Bank and the successor Issuing Bank.  The Administrative Agent shall
notify the Lenders of any such replacement of the Issuing Bank.  At
the time any such replacement shall become effective, the Borrower shall pay all
unpaid fees accrued for the account of the replaced Issuing Bank pursuant to Section 3.05(b).  From and after the effective
date of any such replacement, (i) the successor Issuing Bank shall have all the
rights and obligations of the Issuing Bank under this Agreement with respect to
Letters of Credit to be issued thereafter and (ii) references herein to the term
“Issuing Bank” shall be deemed to refer to such successor or to any previous
Issuing Bank, or to such successor and all previous Issuing Banks, as the
context shall require.  After the replacement of the Issuing Bank
hereunder, the replaced Issuing Bank shall remain a party hereto and shall
continue to have all the rights and obligations of the Issuing Bank under this
Agreement with respect to Letters of Credit issued by it prior to such
replacement, but shall not be required to issue additional Letters of
Credit.

     

    (k) Cash
Collateralization.  If (i) any Event of Default shall occur and
be continuing and the Borrower receives notice from the Administrative Agent or
the Majority Lenders demanding the deposit of cash collateral pursuant to this
Section 2.08(k), or (ii) the Borrower is required to
pay to the Administrative Agent the excess attributable to an LC Exposure in
connection with any prepayment pursuant to Section
3.04(c), then the Borrower shall deposit, in an account with the
Administrative Agent, in the name of the Administrative Agent and for the
benefit of the Lenders, an amount in cash equal to, in the case of an Event of
Default, the LC Exposure, and in the case of a payment required by Section 3.04(c), the amount of such excess as provided
in Section 3.04(c), as of such date plus any accrued
and unpaid interest thereon; provided that the obligation to deposit such cash
collateral shall become effective immediately, and such deposit shall become
immediately due and payable, without demand or other notice of any kind, upon
the occurrence of any Event of Default with respect to the Borrower or any
Material Subsidiary described in Section 10.01(h) or
Section 10.01(i).  The Borrower hereby
grants to the Administrative Agent, for the benefit of the Issuing Bank and the
Lenders, an exclusive first priority and continuing perfected security interest
in and Lien on such account and all cash, checks, drafts, certificates and
instruments, if any, from time to time deposited or held in such account, all
deposits or wire transfers made thereto, any and all investments purchased with
funds deposited in such account, all interest, dividends, cash, instruments,
financial assets and other Property from time to time received, receivable or
otherwise payable in respect of, or in exchange for, any or all of the
foregoing, and all proceeds, products, accessions, rents, profits, income and
benefits therefrom, and any substitutions and replacements
therefor.  The Borrower’s obligation to deposit amounts pursuant to
this Section 2.08(k) shall be absolute and
unconditional, without regard to whether any beneficiary of any such Letter of
Credit has attempted to draw down all or a portion of such amount under the
terms of a Letter of Credit, and, to the fullest extent permitted by applicable
law, shall not be subject to any defense or be affected by a right of set-off,
counterclaim or recoupment which the Borrower or any of its Subsidiaries may now
or hereafter have against any such beneficiary, the Issuing Bank, the
Administrative Agent, the Lenders or any other Person for any reason
whatsoever.  Such deposit shall be held as collateral securing the
payment and performance of the Borrower’s and the Guarantor’s obligations under
this Agreement and the other Loan Documents.  The Administrative Agent
shall have exclusive dominion and control, including the exclusive right of
withdrawal, over such account.  Other than any interest earned on the
investment of such deposits, which investments shall be made at the written
request and instruction of the Borrower but at the option and sole discretion of
the Administrative Agent and at the Borrower’s risk and expense, such deposits
shall not bear interest.  Interest or profits, if any, on such
investments shall accumulate in such account.  Moneys in such account
shall be applied by the Administrative Agent to reimburse the Issuing Bank for
LC Disbursements for which it has not been reimbursed and, to the extent not so
applied, shall be held for the satisfaction of the reimbursement obligations of
the Borrower for the LC Exposure at such time or, if the maturity of the Loans
has been accelerated, be applied to satisfy other obligations of the Borrower
and the Guarantors under this Agreement or the other Loan
Documents.  If the Borrower is required to provide an amount of cash
collateral hereunder as a result of the occurrence of an Event of Default, and
the Borrower is not otherwise required to pay to the Administrative Agent the
excess attributable to an LC Exposure in connection with any prepayment pursuant
to Section 3.04(c), then such amount (to the extent
not applied as aforesaid) shall be returned to the Borrower within three
Business Days after all Events of Default have been cured or
waived.

     

    ARTICLE
III

     

    Payments
of Principal and Interest; Prepayments; Fees

     

    Section
3.01 Repayment of
Loans.  The
Borrower hereby unconditionally promises to pay to the Administrative Agent for
the account of each Lender the then unpaid principal amount of each Loan on the
Termination Date.

     

    Section
3.02 Interest.

     

    (a) ABR
Loans.  The Loans comprising each ABR Borrowing shall bear
interest at the Alternate Base Rate plus the Applicable Margin, but in no event
to exceed the Highest Lawful Rate.

     

    (b) Eurodollar
Loans.  The Loans comprising each Eurodollar Borrowing shall
bear interest at the Adjusted LIBO Rate for the Interest Period in effect for
such Borrowing plus the Applicable Margin, but in no event to exceed the Highest
Lawful Rate.

     

    (c) Post-Default
Rate.  Notwithstanding the foregoing, if any principal of or
interest on any Loan or any fee or other amount payable by the Borrower or any
Guarantor hereunder or under any other Loan Document is not paid when due,
whether at stated maturity, upon acceleration or otherwise, such overdue amount
shall bear interest, after as well as before judgment, at a rate per annum equal
to two percent (2%) plus the rate applicable to ABR Loans as provided in Section 3.02(a), but in no event to exceed the Highest
Lawful Rate.

     

    (d) Interest Payment
Dates.  Accrued interest on each Loan shall be payable in
arrears on each Interest Payment Date for such Loan and on the Termination Date;
provided that (i) interest accrued pursuant to Section
3.02(c) shall be payable on demand, (ii) in the event of any repayment or
prepayment of any Loan (other than an optional prepayment of an ABR Loan prior
to the Termination Date), accrued interest on the principal amount repaid or
prepaid shall be payable on the date of such repayment or prepayment, and (iii)
in the event of any conversion of any Eurodollar Loan prior to the end of the
current Interest Period therefor, accrued interest on such Loan shall be payable
on the effective date of such conversion.

     

    (e) Interest Rate
Computations.  All interest hereunder shall be computed on the
basis of a year of 360 days, unless such computation would exceed the Highest
Lawful Rate, in which case interest shall be computed on the basis of a year of
365 days (or 366 days in a leap year), except that interest computed by
reference to the Alternate Base Rate at times when the Alternate Base Rate is
based on the Prime Rate shall be computed on the basis of a year of 365 days (or
366 days in a leap year), and in each case shall be payable for the actual
number of days elapsed (including the first day but excluding the last
day).  The applicable Alternate Base Rate, Adjusted LIBO Rate or LIBO
Rate shall be determined by the Administrative Agent, and such determination
shall be conclusive absent manifest error, and be binding upon the parties
hereto.

     

    Section
3.03 Alternate Rate of
Interest.  If
prior to the commencement of any Interest Period for a Eurodollar
Borrowing:

     

    (a) the
Administrative Agent determines (which determination shall be conclusive absent
manifest error) that adequate and reasonable means do not exist for ascertaining
the Adjusted LIBO Rate or the LIBO Rate for such Interest Period;
or

     

    (b) the
Administrative Agent is advised by the Majority Lenders that the Adjusted LIBO
Rate or LIBO Rate, as applicable, for such Interest Period will not adequately
and fairly reflect the cost to such Lenders of making or maintaining their Loans
included in such Borrowing for such Interest Period;

     

    then the
Administrative Agent shall give notice thereof to the Borrower and the Lenders
by telephone or telecopy as promptly as practicable thereafter and, until the
Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective,
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing.

     

    Section
3.04 Prepayments.

     

    (a) Optional
Prepayments.  The Borrower shall have the right at any time and
from time to time to prepay any Borrowing in whole or in part, subject to prior
notice in accordance with Section
3.04(b).

     

    (b) Notice and Terms of Optional
Prepayment.  The Borrower shall notify the Administrative Agent
by telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case
of prepayment of a Eurodollar Borrowing, not later than 1:00 p.m. Charlotte,
North Carolina time, three Business
Days before the date of prepayment, or (ii) in the case of prepayment of an ABR
Borrowing, not later than 1:00 p.m. Charlotte, North Carolina time, one Business
Day before the date of prepayment.  Each such notice shall be
irrevocable and shall specify the prepayment date and the principal amount of
each Borrowing or portion thereof to be prepaid.  Promptly following
receipt of any such notice relating to a Borrowing, the Administrative Agent
shall advise the Lenders of the contents thereof.  Each partial
prepayment of any Borrowing shall be in an amount that would be permitted in the
case of an advance of a Borrowing of the same Type as provided in Section 2.02.  Each prepayment of a Borrowing
shall be applied ratably to the Loans included in the prepaid
Borrowing.  Prepayments shall be accompanied by accrued interest to
the extent required by Section 3.02.

     

    (c) Mandatory
Prepayments.

     

    (i) If, after
giving effect to any termination or reduction of the Aggregate Commitment
pursuant to Section 2.06(b), the Aggregate Revolving
Credit Exposures exceeds the Aggregate Commitments, then the Borrower shall A.
prepay the Borrowings in an aggregate principal amount equal to such excess, or
add to the Mortgaged Property, Oil and Gas Properties, having value, as
determined by the Administrative Agent and the Majority Lenders, equal to or
greater than such excess, or a combination thereof and B. if any excess remains
after prepaying all of the Borrowings as a result of an LC Exposure, pay to the
Administrative Agent on behalf of the Lenders an amount equal to such excess to
be held as cash collateral as provided in Section
2.08(k).  The Borrower will be obligated to make such prepayment,
provide such collateral and/or deposit of cash collateral within ninety (90)
days following such termination or reduction of the Aggregate Commitment;
provided that all payments required to be made pursuant to this Section
3.04(c)(i) must be made on or prior to the Termination Date.

     

    (ii) Upon any
redetermination of or adjustment to the amount of the Borrowing Base in
accordance with Section 2.07 or Section 8.13(c), if the Aggregate Revolving Credit
Exposures exceeds the redetermined or adjusted Borrowing Base, then the Borrower
shall A. prepay the Borrowings in an aggregate principal amount equal to such
excess, or add to the Mortgaged Property, Oil and Gas Properties, having value,
as determined by the Administrative Agent and the Majority Lenders, equal to or
greater than such excess, or a combination thereof and B. if any excess remains
after prepaying all of the Borrowings as a result of an LC Exposure, pay to the
Administrative Agent on behalf of the Lenders an amount equal to such excess to
be held as cash collateral as provided in Section
2.08(k).  The Borrower shall be obligated to make such prepayment,
provide such collateral and/or deposit of cash collateral within ninety (90)
days following its receipt of the New Borrowing Base Notice in accordance with
Section 2.07(d) or the date the adjustment occurs;
provided that all payments required to be made pursuant to this Section 3.04(c)(ii) must be made on or prior to the
Termination Date.

     

    (iii) Upon any
adjustments to the Borrowing Base pursuant to Section
9.12(a), Section 9.13 or Section 9.21, if the Aggregate Revolving Credit
Exposures exceeds the Borrowing Base as adjusted, then the Borrower shall A.
prepay the Borrowings in an aggregate principal amount equal to such excess, or
add to the Mortgaged Property, Oil and Gas Properties, having value, as
determined by the Administrative Agent and the Majority Lenders, equal to or
greater than such excess, or a combination thereof and B. if any excess remains
after prepaying all of the Borrowings as a result of an LC Exposure, pay to the
Administrative Agent on behalf of the Lenders an amount equal to such excess to
be held as cash collateral as provided in Section
2.08(k).  The Borrower shall be obligated to make such prepayment,
provide such collateral and/or deposit of cash collateral within ninety (90)
days following such adjustment to the Borrowing Base (or, if sooner, on the date
the Borrower receives cash proceeds as a result of a disposition pursuant to
Section 9.13); provided that all payments required to be made pursuant to this
Section 3.04(c)(iii)  must be made on or
prior to the Termination Date.

     

    (iv) Each
prepayment of Borrowings pursuant to this Section
3.04(c) shall be applied, first, ratably to any ABR Borrowings then
outstanding, and, second, to any Eurodollar Borrowings then outstanding, and if
more than one Eurodollar Borrowing is then outstanding, to each such Eurodollar
Borrowing in order of priority beginning with the Eurodollar Borrowing with the
least number of days remaining in the Interest Period applicable thereto and
ending with the Eurodollar Borrowing with the most number of days remaining in
the Interest Period applicable thereto.

     

    (v) Each
prepayment of Borrowings pursuant to this Section
3.04(c) shall be applied ratably to the Loans included in the prepaid
Borrowings.  Prepayments pursuant to this Section 3.04(c) shall be accompanied by accrued interest
to the extent required by Section 3.02.

     

    (d) No Premium or
Penalty.  Prepayments permitted or required under this Section 3.04 shall be without premium or penalty, except
as required under Section 5.02.

     

    Section
3.05 Fees.

     

    (a) Commitment
Fees.  The Borrower agrees to pay to the Administrative Agent
for the account of each Lender a commitment fee, which shall accrue at the
applicable Commitment Fee Rate on the daily unused amount of the Commitment of
such Lender during the period from and including the date of this Agreement to
but excluding the Termination Date.  Accrued commitment fees shall be
payable in arrears on the last day of March, June, September and December of
each year and on the Termination Date, commencing on the first such date to
occur after the date hereof.  All commitment fees shall be computed on
the basis of a year of 360 days, unless such computation would exceed the
Highest Lawful Rate, in which case interest shall be computed on the basis of a
year of 365 days (or 366 days in a leap year), and shall be payable for the
actual number of days elapsed (including the first day but excluding the last
day).

     

    (b) Letter of Credit
Fees.  The Borrower agrees to pay (i) to the Administrative
Agent for the account of each Lender a participation fee with respect to its
participations in Letters of Credit, which shall accrue at the same Applicable
Margin used to determine the interest rate applicable to Eurodollar Loans on the
average daily amount of such Lender’s LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and
including the date of this Agreement to but excluding the later of the date on
which such Lender’s Commitment terminates and the date on which such Lender
ceases to have any LC Exposure, (ii) to the Issuing Bank a fronting fee, which
shall accrue at the rate of 0.125% per annum on the average daily amount of the
LC Exposure (excluding any portion thereof attributable to unreimbursed LC
Disbursements) during the period from and including the date of this Agreement
to but excluding the later of the date of termination of the Commitments and the
date on which there ceases to be any LC Exposure, provided that in no event
shall such fee be less than $300 during any quarter, and (iii) to the Issuing
Bank, for its own account, its standard fees with respect to the issuance,
amendment, renewal or extension of any Letter of Credit or processing of
drawings thereunder.  Participation fees and fronting fees accrued
through and including the last day of March, June, September and December of
each year shall be payable on the third Business Day following such last day,
commencing on the first such date to occur after the date of this Agreement;
provided that all such fees shall be payable on the Termination Date and any
such fees accruing after the Termination Date shall be payable on
demand.  Any other fees payable to the Issuing Bank pursuant to this
Section 3.05(b) shall be payable within 10 days after
demand.  All participation fees and fronting fees shall be computed on
the basis of a year of 360 days, unless such computation would exceed the
Highest Lawful Rate, in which case interest shall be computed on the basis of a
year of 365 days (or 366 days in a leap year), and shall be payable for the
actual number of days elapsed (including the first day but excluding the last
day).

     

    (c) Administrative Agent
Fees.  The Borrower agrees to pay to the Administrative Agent,
for its own account, fees payable in the amounts and at the times separately
agreed upon between the Borrower and the Administrative Agent.

     

    ARTICLE
IV

     

    Payments;
Pro Rata Treatment; Sharing of Set-offs.

     

    Section
4.01 Payments Generally; Pro Rata
Treatment; Sharing of Set-offs.

     

    (a) Payments by the
Borrower.  The Borrower shall make each payment required to be
made by it hereunder (whether of principal, interest, fees or reimbursement of
LC Disbursements, or of amounts payable under Section
5.01, Section 5.02, Section 5.03 or otherwise) prior to 1:00 p.m. Charlotte,
North Carolina time, on the date when
due, in immediately available funds, without defense, deduction, recoupment,
set-off or counterclaim.  Fees, once paid, shall not be refundable
under any circumstances.  Any amounts received after such time on any
date may, in the discretion of the Administrative Agent, be deemed to have been
received on the next succeeding Business Day for purposes of calculating
interest thereon.  All such payments shall be made to the
Administrative Agent at its offices specified in Section
12.01, except payments to be made directly to the Issuing Bank as expressly
provided herein and except that payments pursuant to Section 5.01, Section 5.02,
Section 5.03 and Section
12.03 shall be made directly to the Persons entitled thereto.  The
Administrative Agent shall distribute any such payments received by it for the
account of any other Person to the appropriate recipient promptly following
receipt thereof.  If any payment hereunder shall be due on a day that
is not a Business Day, the date for payment shall be extended to the next
succeeding Business Day, and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such
extension.  All payments hereunder shall be made in
dollars.

     

    (b) Application of Insufficient
Payments.  If at any time insufficient funds are received by
and available to the Administrative Agent to pay fully all amounts of principal,
unreimbursed LC Disbursements, interest and fees then due hereunder, such funds
shall be applied (i) first, towards payment of interest and fees then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of interest and fees then due to such parties, and (ii) second, towards
payment of principal and unreimbursed LC Disbursements then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
principal and unreimbursed LC Disbursements then due to such
parties.

     

    (c) Sharing of Payments by
Lenders.  If any Lender shall, by exercising any right of
set-off or counterclaim or otherwise, obtain payment in respect of any principal
of or interest on any of its Loans or participations in LC Disbursements
resulting in such Lender receiving payment of a greater proportion of the
aggregate amount of its Loans and participations in LC Disbursements and accrued
interest thereon than the proportion received by any other Lender, then the
Lender receiving such greater proportion shall purchase (for cash at face value)
participations in the Loans and participations in LC Disbursements of other
Lenders to the extent necessary so that the benefit of all such payments shall
be shared by the Lenders ratably in accordance with the aggregate amount of
principal of and accrued interest on their respective Loans and participations
in LC Disbursements; provided that (i) if any such participations are purchased
and all or any portion of the payment giving rise thereto is recovered, such
participations shall be rescinded and the purchase price restored to the extent
of such recovery, without interest, and (ii) the provisions of this Section 4.01(c) shall not be construed to apply to any
payment made by the Borrower pursuant to and in accordance with the express
terms of this Agreement or any payment obtained by a Lender as consideration for
the assignment of or sale of a participation in any of its Loans or
participations in LC Disbursements to any assignee or participant, other than to
the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions
of this Section 4.01(c) shall apply).  The
Borrower consents to the foregoing and agrees, to the extent it may effectively
do so under applicable law, that any Lender acquiring a participation pursuant
to the foregoing arrangements may exercise against the Borrower rights of
set-off and counterclaim with respect to such participation as fully as if such
Lender were a direct creditor of the Borrower in the amount of such
participation.

     

    Section
4.02 Presumption of Payment by
the Borrower.  Unless
the Administrative Agent shall have received notice from the Borrower prior to
the date on which any payment is due to the Administrative Agent for the account
of the Lenders or the Issuing Bank that the Borrower will not make such payment,
the Administrative Agent may assume that the Borrower has made such payment on
such date in accordance herewith and may, in reliance upon such assumption,
distribute to the Lenders or the Issuing Bank, as the case may be, the amount
due.  In such event, if the Borrower has not in fact made such
payment, then each of the Lenders or the Issuing Bank, as the case may be,
severally agrees to repay to the Administrative Agent forthwith on demand the
amount so distributed to such Lender or Issuing Bank with interest thereon, for
each day from and including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, at the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank
compensation.

     

    Section
4.03 Certain Deductions by the
Administrative Agent.  If
any Lender shall fail to make any payment required to be made by it pursuant to
Section 2.05(b), Section
2.08(e), Section 2.08(f) or Section 4.02 then the Administrative Agent may, in its
discretion (notwithstanding any contrary provision hereof), apply any amounts
thereafter received by the Administrative Agent for the account of such Lender
to satisfy such Lender’s obligations under such Sections until all such
unsatisfied obligations are fully paid.

     

    Section
4.04 Disposition of
Proceeds.  The
Security Instruments contain an assignment by the Borrower and/or the Material
Subsidiaries unto and in favor of the Administrative Agent for the benefit of
the Lenders of all of the Borrower’s or each Material Subsidiary’s interest in
and to production and all proceeds attributable thereto which may be produced
from or allocated to the Mortgaged Property.  The Security Instruments
further provide in general for the application of such proceeds to the
satisfaction of the Indebtedness and other obligations described therein and
secured thereby.  Notwithstanding the assignment contained in such
Security Instruments, until the occurrence of an Event of Default, a. the
Administrative Agent and the Lenders agree that they will neither notify the
purchaser or purchasers of such production nor take any other action to cause
such proceeds to be remitted to the Administrative Agent or the Lenders, but the
Lenders will instead permit such proceeds to be paid to the Borrower and its
Material Subsidiaries and b. the Lenders hereby authorize the Administrative
Agent to take such actions as may be necessary to cause such proceeds to be paid
to the Borrower and/or such Material Subsidiaries.

     

    ARTICLE
V

     

    Increased
Costs; Break Funding Payments; Taxes; Illegality

     

    Section
5.01 Increased
Costs.

     

    (a) Eurodollar Changes in
Law.  If any Change in Law shall:

     

    (i) impose,
modify or deem applicable any reserve, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit extended by,
any Lender (except  any such reserve requirement reflected in the
Adjusted LIBO Rate); or

     

    (ii) impose on
any Lender or the London interbank market any other condition affecting this
Agreement or Eurodollar Loans made by such Lender;

     

    and the
result of any of the foregoing shall be to increase the cost to such Lender of
making or maintaining any Eurodollar Loan (or of maintaining its obligation to
make any such Loan) or to reduce the amount of any sum received or receivable by
such Lender (whether of principal, interest or otherwise), then the Borrower
will pay to such Lender such additional amount or amounts as will compensate
such Lender for such additional costs incurred or reduction
suffered.

     

    (b) Capital
Requirements.  If any Lender or the Issuing Bank determines
that any Change in Law regarding capital requirements has or would have the
effect of reducing the rate of return on such Lender’s or the Issuing Bank’s
capital or on the capital of such Lender’s or the Issuing Bank’s holding
company, if any, as a consequence of this Agreement or the Loans made by, or
participations in Letters of Credit held by, such Lender, or the Letters of
Credit issued by the Issuing Bank, to a level below that which such Lender or
the Issuing Bank or such Lender’s or the Issuing Bank’s holding company could
have achieved but for such Change in Law (taking into consideration such
Lender’s or the Issuing Bank’s policies and the policies of such Lender’s or the
Issuing Bank’s holding company with respect to capital adequacy), then from time
to time the Borrower will pay to such Lender or the Issuing Bank, as the case
may be, such additional amount or amounts as will compensate such Lender or the
Issuing Bank or such Lender’s or the Issuing Bank’s holding company for any such
reduction suffered.

     

    (c) Certificates.  A
certificate of a Lender or the Issuing Bank setting forth the amount or amounts
necessary to compensate such Lender or the Issuing Bank or its holding company,
as the case may be, as specified in Section 5.01(a)
or (b) shall be delivered to the Borrower and shall
be conclusive absent manifest error.  The Borrower shall pay such
Lender or the Issuing Bank, as the case may be, the amount shown as due on any
such certificate within 10 days after receipt thereof.

     

    (d) Effect of Failure or Delay
in Requesting Compensation.  Failure or delay on the part of
any Lender or the Issuing Bank to demand compensation pursuant to this Section 5.01 shall not constitute a waiver of such
Lender’s or the Issuing Bank’s right to demand such compensation.

     

    Section
5.02 Break Funding
Payments.  In
the event of (a) the payment of any principal of any Eurodollar Loan other than
on the last day of an Interest Period applicable thereto (including as a result
of an Event of Default), (b) the conversion of any Eurodollar Loan into an ABR
Loan other than on the last day of the Interest Period applicable thereto, or
(c) the failure to borrow, convert, continue or prepay any Eurodollar Loan on
the date specified in any notice delivered pursuant hereto, then, in any such
event, the Borrower shall compensate each Lender for the loss, cost and expense
attributable to such event.  In the case of a Eurodollar Loan, such
loss, cost or expense to any Lender shall be deemed to include an amount
determined by such Lender to be the excess, if any, of (i) the amount of
interest which would have accrued on the principal amount of such Loan had such
event not occurred, at the Adjusted LIBO Rate that would have been applicable to
such Loan, for the period from the date of such event to the last day of the
then current Interest Period therefor (or, in the case of a failure to borrow,
convert or continue, for the period that would have been the Interest Period for
such Loan), over (ii) the amount of interest which would accrue on such
principal amount for such period at the interest rate which such Lender would
bid were it to bid, at the commencement of such period, for dollar deposits of a
comparable amount and period from other banks in the eurodollar
market.

     

    A
certificate of any Lender setting forth any amount or amounts that such Lender
is entitled to receive pursuant to this Section 5.02
shall be delivered to the Borrower and shall be conclusive absent manifest
error.  The Borrower shall pay such Lender the amount shown as due on
any such certificate within 10 days after receipt thereof.

     

    Section
5.03 Taxes.

     

    (a) Payments Free of
Taxes.  Any and all payments by or on account of any obligation
of the Borrower or any Material Subsidiary under any Loan Document shall be made
free and clear of and without deduction for any Indemnified Taxes or Other
Taxes; provided that if the Borrower shall be required to deduct any Indemnified
Taxes or Other Taxes from such payments, then (i) the sum payable shall be
increased as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 5.03(a)), the Administrative Agent, Lender or
Issuing Bank (as the case may be) receives an amount equal to the sum it would
have received had no such deductions been made, (ii) the Borrower shall
make such deductions and (iii) the Borrower shall pay the full amount
deducted to the relevant Governmental Authority in accordance with applicable
law.

     

    (b) Payment of Other Taxes by
the Borrower.  The Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.

     

    (c) Indemnification by the
Borrower.  The Borrower shall indemnify the Administrative
Agent, each Lender and the Issuing Bank, within 10 days after written demand
therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by
the Administrative Agent, such Lender or the Issuing Bank, as the case may be,
on or with respect to any payment by or on account of any obligation of the
Borrower hereunder (including Indemnified Taxes or Other Taxes imposed or
asserted on or attributable to amounts payable under this Section 5.03) and any penalties, interest and reasonable
expenses arising therefrom or with respect thereto, whether or not such
Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted
by the relevant Governmental Authority.  A certificate of the
Administrative Agent, a Lender or the Issuing Bank as to the amount of such
payment or liability under this Section 5.03 shall be
delivered to the Borrower and shall be conclusive absent manifest
error.

     

    (d) Evidence of
Payments.  As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority,
the Borrower shall deliver to the Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Administrative Agent.

     

    (e) Foreign
Lenders.  Any Foreign Lender that is entitled to an exemption
from or reduction of withholding tax under the law of the jurisdiction in which
the Borrower is located, or any treaty to which such jurisdiction is a party,
with respect to payments under this Agreement or any other Loan Document shall
deliver to the Borrower (with a copy to the Administrative Agent), at the time
or times prescribed by applicable law, such properly completed and executed
documentation prescribed by applicable law or reasonably requested by the
Borrower as will permit such payments to be made without withholding or at a
reduced rate.

     

    (f) Tax
Refunds.  If the Administrative Agent or a Lender determines,
in its reasonable discretion, that it has received a refund of any Taxes or
Other Taxes as to which it has been indemnified by the Borrower or with respect
to which the Borrower has paid additional amounts pursuant to this Section 5.03, it shall pay over such refund to the
Borrower (but only to the extent of indemnity payments made, or additional
amounts paid, by the Borrower under this Section 5.03
with respect to the Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses of the Administrative Agent or such Lender and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund); provided, that the Borrower, upon the request of
the Administrative Agent or such Lender, agrees to repay the amount paid over to
the Borrower (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Administrative Agent or such Lender in
the event the Administrative Agent or such Lender is required to repay such
refund to such Governmental Authority.  This Section 5.03 shall not be construed to require the
Administrative Agent or any Lender to make available its tax returns (or any
other information relating to its taxes which it deems confidential) to the
Borrower or any other Person.

     

    Section
5.04 Designation of Different
Lending Office.  If
any Lender requests compensation under Section 5.01,
or if the Borrower is required to pay any additional amount to any Lender
or any Governmental Authority for the account of any Lender pursuant to Section 5.03, then such Lender shall use reasonable
efforts to designate a different lending office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if, in the judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable pursuant
to Section 5.01 or Section
5.03, as the case may be, in the future and (ii) would not subject such
Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender.  The Borrower hereby agrees to pay all
reasonable costs and expenses incurred by any Lender in connection with any such
designation or assignment.

     

    Section
5.05 Illegality.  Notwithstanding
any other provision of this Agreement, in the event that it becomes unlawful for
any Lender or its applicable lending office to honor its obligation to make or
maintain Eurodollar Loans either generally or having a particular Interest
Period hereunder, then (a) such Lender shall promptly notify the Borrower and
the Administrative Agent thereof and such Lender’s obligation to make such
Eurodollar Loans shall be suspended (the “Affected Loans”)
until such time as such Lender may again make and maintain such Eurodollar Loans
and (b) all Affected Loans which would otherwise be made by such Lender shall be
made instead as ABR Loans (and, if such Lender so requests by notice to the
Borrower and the Administrative Agent, all Affected Loans of such Lender then
outstanding shall be automatically converted into ABR Loans on the date
specified by such Lender in such notice) and, to the extent that Affected Loans
are so made as (or converted into) ABR Loans, all payments of principal which
would otherwise be applied to such Lender’s Affected Loans shall be applied
instead to its ABR Loans.

     

    Section
5.06 Replacement of
Lenders.  If
any Lender requests compensation under Section 5.01, or if the Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 5.03, or if any
Lender defaults in its obligation to fund Loans hereunder, or if any Lender
refuses to approve a Proposed Borrowing Base pursuant to Section 2.07(c)(iii) and as a result, the Borrower
elects to replace such dissenting Lender pursuant to Section 2.07(c)(iv), then the Borrower may, at its sole
expense and effort, upon notice to such Lender and the Administrative Agent,
require such Lender to assign and delegate, without recourse (in accordance with
and subject to the restrictions contained in Section 12.04(b)), all its
interests, rights and obligations under this Agreement to an assignee that shall
assume such obligations (which assignee may be another Lender, if a Lender
accepts such assignment); provided that (i) the Borrower shall have received the
prior written consent of the Administrative Agent, which consent shall not
unreasonably be withheld, (ii) such Lender shall have received payment of an
amount equal to the outstanding principal of its Loans and participations in LC
Disbursements, accrued interest thereon, accrued fees and all other amounts
payable to it hereunder, from the assignee (to the extent of such outstanding
principal and accrued interest and fees) or the Borrower (in the case of all
other amounts) and (iii) in the case of any such assignment resulting from a
claim for compensation under Section 5.01 or payments required to be made
pursuant to Section 5.03, such assignment will result in a reduction in such
compensation or payments.  A Lender shall not be required to make any
such assignment and delegation if, prior thereto, as a result of a waiver by
such Lender or otherwise, the circumstances entitling the Borrower to require
such assignment and delegation cease to apply.

     

    ARTICLE
VI

     

    Conditions
Precedent

     

    Section
6.01 Effective
Date.  The
obligations of the Lenders to make Loans and of the Issuing Bank to issue
Letters of Credit hereunder shall not become effective until the date on which
each of the following conditions is satisfied (or waived in accordance with Section 12.02):

     

    (a) The
Administrative Agent shall have received all fees and other amounts due and
payable on or prior to the Effective Date, including, without limitation, to the
extent invoiced, reimbursement or payment of all of the Administrative Agent’s
out-of-pocket expenses including, without limitation, the reasonable fees,
charges and disbursements of counsel for the Administrative Agent, required to
be reimbursed or paid by the Borrower hereunder.

     

    (b) The
Administrative Agent shall have received a certificate of the Secretary or an
Assistant Secretary of each of the Borrower and each Guarantor setting forth (i)
resolutions of its board of directors with respect to the authorization of the
Borrower or such Guarantor to execute and deliver the Loan Documents to which it
is a party and to enter into the transactions contemplated in those documents,
(ii) the officers of the Borrower or such Guarantor (y) who are authorized to
sign the Loan Documents to which the Borrower or such Guarantor is a party and
(z) who will, until replaced by another officer or officers duly authorized for
that purpose, act as its representative for the purposes of signing documents
and giving notices and other communications in connection with this Agreement
and the transactions contemplated hereby, (iii) specimen signatures of such
authorized officers, and (iv) no changes to the articles or certificate of
incorporation and bylaws of the Borrower and such Guarantor have occurred since
March 19, 2007.  The Administrative Agent and the Lenders may
conclusively rely on such certificate until the Administrative Agent receives
notice in writing from the Borrower to the contrary.

     

    (c) The
Administrative Agent shall have received certificates of the appropriate State
agencies with respect to the existence, qualification and good standing of the
Borrower and each Guarantor.

     

    (d) The
Administrative Agent shall have received a compliance certificate which shall be
substantially in the form of Exhibit B, duly and properly executed by a
Responsible Officer and dated as of the Effective Date certifying compliance
(including compliance with Section 8.12) with the Existing Credit Agreement as
of such date.

     

    (e) The
Administrative Agent shall have received from each party hereto counterparts (in
such number as may be requested by the Administrative Agent) of this Agreement
signed on behalf of such party.

     

    (f) The
Administrative Agent shall have received from each party thereto duly executed
and completed counterparts (in such number as may be requested by the
Administrative Agent) of the Reaffirmation Agreement.

     

    (g) The
proceeds of the initial Loans shall be used to renew, rearrange, modify and
extend the outstanding amounts under the Existing Credit Agreement and all
“Commitments” (as defined in the Existing Credit Agreement) thereunder shall
have been terminated.

     

    (h) The
Administrative Agent shall have received such other documents as the
Administrative Agent or special counsel to the Administrative Agent may
reasonably request.

     

    The
Administrative Agent shall notify the Borrower and the Lenders of the Effective
Date, and such notice shall be conclusive and
binding.  Notwithstanding the foregoing, the obligations of the
Lenders to make Loans and of the Issuing Bank to issue Letters of Credit
hereunder shall not become effective unless each of the foregoing conditions is
satisfied (or waived pursuant to Section 12.02) at or
prior to 3:00 p.m., Charlotte, North Carolina time, on April 10, 2008 (and, in
the event such conditions are not so satisfied or waived, the Commitments shall
terminate at such time).

     

    Section
6.02 Each Credit
Event.  The
obligation of each Lender to make a Loan on the occasion of any Borrowing
(including the initial funding), and of the Issuing Bank to issue, amend, renew
or extend any Letter of Credit, is subject to the satisfaction of the following
conditions:

     

    (a) At the
time of and immediately after giving effect to such Borrowing or the issuance,
amendment, renewal or extension of such Letter of Credit, as applicable, no
Default shall have occurred and be continuing.

     

    (b) At the
time of and immediately after giving effect to such Borrowing or the issuance,
amendment, renewal or extension of such Letter of Credit, as applicable, no
Material Adverse Effect shall have occurred.

     

    (c) The
representations and warranties of the Borrower and the Guarantors set forth in
this Agreement and in the other Loan Documents shall be true and correct in all
material respects on and as of the date of such Borrowing or the date of
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, except to the extent any such representations and warranties are
expressly limited to an earlier date, in which case, on and as of the date of
such Borrowing or the date of issuance, amendment, renewal or extension of such
Letter of Credit, as applicable, such representations and warranties shall
continue to be true and correct as of such specified earlier date.

     

    (d) The
making of such Loan or the issuance, amendment, renewal or extension of such
Letter of Credit, as applicable, would not conflict with, or cause any Lender or
the Issuing Bank to violate or exceed, any applicable Governmental Requirement,
and no Change in Law shall have occurred, and no litigation shall be pending or
threatened, which does or, with respect to any threatened litigation, seeks to,
enjoin, prohibit or restrain, the making or repayment of any Loan, the issuance,
amendment, renewal, extension or repayment of any Letter of Credit or any
participations therein or the consummation of the transactions contemplated by
this Agreement or any other Loan Document.

     

    (e) The
receipt by the Administrative Agent of a Borrowing Request in accordance with Section 2.03 or a request for a Letter of Credit in
accordance with Section 2.08(b), as
applicable.

     

    Each
Borrowing and each issuance, amendment, renewal or extension of any Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in Section 6.02(a) through (e).

     

    ARTICLE
VII

     

    Representations
and Warranties

     

    The
Borrower represents and warrants to the Lenders that:

     

    Section
7.01 Organization;
Powers.  Each
of the Borrower and the Material Subsidiaries is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, has all requisite power and authority, and has all material
governmental licenses, authorizations, consents and approvals necessary, to own
its assets and to carry on its business as now conducted, and is qualified to do
business in, and is in good standing in, every jurisdiction where such
qualification is required, except where failure to have such power, authority,
licenses, authorizations, consents, approvals and qualifications could not
reasonably be expected to have a Material Adverse Effect.

     

    Section
7.02 Authority;
Enforceability.  The
Transactions are within the Borrower’s and each Guarantor’s corporate powers and
have been duly authorized by all necessary corporate and, if required,
stockholder action.  Each Loan Document to which the Borrower and each
Guarantor is a party has been duly executed and delivered by the Borrower and
such Guarantor and constitutes a legal, valid and binding obligation of the
Borrower and such Guarantor, as applicable, enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
or other laws affecting creditors’ rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in equity
or at law.

     

    Section
7.03 Approvals; No
Conflicts.  The
Transactions (a) do not require any consent or approval of, registration or
filing with, or any other action by, any Governmental Authority or any other
third Person, nor is any such consent, approval, registration, filing or other
action necessary for the validity or enforceability of any Loan Document or the
consummation of the transactions contemplated thereby, except such as have been
obtained or made and are in full force and effect other than (i) the recording
and filing of the Security Instruments as required by this Agreement and (ii)
those third party approvals or consents which, if not made or obtained, would
not cause a Default hereunder, could not reasonably be expected to have a
Material Adverse Effect or do not have an adverse effect on the enforceability
of the Loan Documents, (b) will not violate any applicable law or regulation or
the charter, by-laws or other organizational documents of the Borrower or any
Material Subsidiary or any order of any Governmental Authority, (c) will not
violate or result in a default under any indenture, agreement or other
instrument binding upon the Borrower or any Material Subsidiary or its
Properties, or give rise to a right thereunder to require any payment to be made
by the Borrower or such Material Subsidiary and (d) will not result in the
creation or imposition of any Lien on any Property of the Borrower or any
Material Subsidiary (other than the Liens created by the Loan
Documents).

     

    Section
7.04 Financial Condition; No
Material Adverse Change.

     

    (a) The
Borrower has heretofore furnished to the Lenders its consolidated balance sheet
and statements of income, stockholders equity and cash flows as of and for the
fiscal year ended December 31, 2007, reported on by Deloitte & Touche,
independent public accountants.  Such financial statements present
fairly, in all material respects, the financial position and results of
operations and cash flows of the Borrower and its Consolidated Subsidiaries as
of such date and for such period in accordance with GAAP.

     

    (b) Since
December 31, 2007, (i) there has been no material adverse change in the
business, assets, operations, prospects or condition, financial or otherwise, of
the Borrower and its Material Subsidiaries, taken as a whole and (ii) the
business of the Borrower and its Material Subsidiaries has been conducted only
in the ordinary course consistent with past business practices.

     

    (c) Neither
the Borrower nor any Material Subsidiary has on the date hereof (i) any material
Debt (including Disqualified Capital Stock), except as referred to or reflected
or provided for in the Financial Statements, or (ii) any contingent liabilities,
off-balance sheet liabilities or partnerships, liabilities for taxes, unusual
forward or long-term commitments or unrealized or anticipated losses from any
unfavorable commitments, incurred outside the ordinary course of the Borrower’s
or such Material Subsidiary’s business.

     

    Section
7.05 Litigation.

     

    (a) Except as
set forth on Schedule 7.05, there are no material actions, suits,
investigations or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of the Borrower, threatened
against or affecting the Borrower or any Material Subsidiary (i) not fully
covered by insurance (except for normal deductibles) as to which there is a
reasonable possibility of an adverse determination that, if adversely
determined, could reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect, or (ii) that involve any Loan Document or
the Transactions.

     

    (b) Since the
date of this Agreement, there has been no change in the status of the matters
disclosed in Schedule 7.05 that, individually or in the aggregate, has
resulted in, or materially increased the likelihood of, a Material Adverse
Effect.

     

    Section
7.06 Environmental
Matters.  Except
as could not be reasonably expected to have a Material Adverse Effect (or with
respect to (c), (d) and (e) below, where the failure to take such actions could
not be reasonably expected to have a Material Adverse Effect):

     

    (a) neither
any Property of the Borrower or any Material Subsidiary nor the operations
conducted thereon violate any order or requirement of any court or Governmental
Authority or any Environmental Laws.

     

    (b) no
Property of the Borrower or any Material Subsidiary nor the operations currently
conducted thereon or, to the knowledge of the Borrower, by any prior owner or
operator of such Property or operation, are in violation of or subject to any
existing, pending or threatened action, suit, investigation, inquiry or
proceeding by or before any court or Governmental Authority or to any remedial
obligations under Environmental Laws.

     

    (c) all
notices, permits, licenses, exemptions, approvals or similar authorizations, if
any, required to be obtained or filed in connection with the operation or use of
any and all Property of the Borrower and each Material Subsidiary, including,
without limitation, past or present treatment, storage, disposal or release of a
hazardous substance, oil and gas waste or solid waste into the environment, have
been duly obtained or filed, and the Borrower and each Material Subsidiary are
in compliance with the terms and conditions of all such notices, permits,
licenses and similar authorizations.

     

    (d) all
hazardous substances, solid waste and oil and gas waste, if any, generated at
any and all Property of the Borrower or any Material Subsidiary have in the past
been transported, treated and disposed of in accordance with Environmental Laws
and so as not to pose an imminent and substantial endangerment to public health
or welfare or the environment, and, to the knowledge of the Borrower, all such
transport carriers and treatment and disposal facilities have been and are
operating in compliance with Environmental Laws and so as not to pose an
imminent and substantial endangerment to public health or welfare or the
environment, and are not the subject of any existing, pending or threatened
action, investigation or inquiry by any Governmental Authority in connection
with any Environmental Laws.

     

    (e) the
Borrower has taken all steps reasonably necessary to determine and has
determined that no oil, hazardous substances, solid waste or oil and gas waste,
have been disposed of or otherwise released and there has been no threatened
release of any oil, hazardous substances, solid waste or oil and gas waste on or
to any Property of the Borrower or any Material Subsidiary except in compliance
with Environmental Laws and so as not to pose an imminent and substantial
endangerment to public health or welfare or the environment.

     

    (f) to the
extent applicable, all Property of the Borrower and each Material Subsidiary
currently satisfies all design, operation, and equipment requirements imposed by
the OPA, and the Borrower does not have any reason to believe that such
Property, to the extent subject to the OPA, will not be able to maintain
compliance with the OPA requirements during the term of this
Agreement.

     

    (g) neither
the Borrower nor any Material Subsidiary has any known contingent liability or
Remedial Work in connection with any release or threatened release of any oil,
hazardous substance, solid waste or oil and gas waste into the
environment.

     

    Section
7.07 Compliance with the Laws and
Agreements; No Defaults.

     

    (a) Each of
the Borrower and each Material Subsidiary is in compliance with all Governmental
Requirements applicable to it or its Property and all agreements and other
instruments binding upon it or its Property, and possesses all licenses,
permits, franchises, exemptions, approvals and other governmental authorizations
necessary for the ownership of its Property and the conduct of its business,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.

     

    (b) Neither
the Borrower nor any Material Subsidiary is in default nor has any event or
circumstance occurred which, but for the expiration of any applicable grace
period or the giving of notice, or both, would constitute a default or would
require the Borrower or a Material Subsidiary to Redeem or make any offer to do
any of the foregoing under any indenture, note, credit agreement or instrument
pursuant to which any Material Indebtedness is outstanding or by which the
Borrower or any Material Subsidiary or any of their Properties is
bound.

     

    (c) No
Default has occurred and is continuing.

     

    Section
7.08 Investment Company
Act.  Neither
the Borrower nor any Subsidiary is an “investment company” or a company
“controlled” by an “investment company,” within the meaning of, or subject to
regulation under, the Investment Company Act of 1940, as amended.

     

    Section
7.09 Public Utility Holding
Company Act.  Neither
the Borrower nor any Subsidiary is a “holding company,” or a “subsidiary
company” of a “holding company,” or an “affiliate” of a “holding company” or of
a “subsidiary company” of a “holding company,” or a “public utility” within the
meaning of, or subject to regulation under, the Public Utility Holding Company
Act of 1935, as amended.

     

    Section
7.10 Taxes.  Each
of the Borrower and its Subsidiaries has timely filed or caused to be filed all
Tax returns and reports required to have been filed and has paid or caused to be
paid all Taxes required to have been paid by it, except (a) Taxes that are being
contested in good faith by appropriate proceedings and for which the Borrower or
such Subsidiary, as applicable, has set aside on its books adequate reserves in
accordance with GAAP or (b) to the extent that the failure to do so could not
reasonably be expected to result in a Material Adverse Effect.  The
charges, accruals and reserves on the books of the Borrower and its Subsidiaries
in respect of Taxes and other governmental charges are, in the reasonable
opinion of the Borrower, adequate.  No Tax Lien has been filed and, to
the knowledge of the Borrower, no claim is being asserted with respect to any
such Tax or other such governmental charge.

     

    Section
7.11 ERISA.

     

    (a) The
Borrower, the Subsidiaries and each ERISA Affiliate have complied in all
material respects with ERISA and, where applicable, the Code regarding each
Plan.

     

    (b) Each Plan
is, and has been, maintained in substan­tial compliance with ERISA and,
where applicable, the Code.

     

    (c) No act,
omission or transaction has occurred which could result in imposition on the
Borrower, any Subsidiary or any ERISA Affiliate (whether directly or indirectly)
of (i) either a civil penalty assessed pursuant to subsections (c), (i) or (l)
of section 502 of ERISA or a tax imposed pursuant to Chapter 43 of
Subtitle D of the Code or (ii) breach of fiduciary duty liability damages
under section 409 of ERISA.

     

    (d) No Plan
(other than a defined contribu­tion plan) or any trust created under any
such Plan has been terminated since September 2, 1974.  No
liability to the PBGC (other than for the payment of current premiums which are
not past due) by the Borrower, any Subsidiary or any ERISA Affiliate has been or
is expected by the Borrower, any Subsidiary or any ERISA Affiliate to be
incurred with respect to any Plan.  No ERISA Event with respect to any
Plan has occurred.

     

    (e) Full
payment when due has been made of all amounts which the Borrower, the
Subsidiaries or any ERISA Affiliate is required under the terms of each Plan or
applicable law to have paid as contribu­tions to such Plan as of the date
hereof, and no accumulated funding deficiency (as defined in section 302 of
ERISA and section 412 of the Code), whether or not waived, exists with respect
to any Plan.

     

    (f) The
actuarial present value of the benefit liabili­ties under each Plan which is
subject to Title IV of ERISA does not, as of the end of the Borrower’s most
recently ended fiscal year, exceed the current value of the assets (computed on
a plan termination basis in accordance with Title IV of ERISA) of such Plan
allocable to such benefit liabilities.  The term “actuarial present
value of the benefit liabilities” shall have the meaning specified in section
4041 of ERISA.

     

    (g) Neither
the Borrower, the Subsidiaries nor any ERISA Affiliate sponsors, maintains, or
contributes to an employee welfare benefit plan, as defined in section 3(1) of
ERISA, including, without limitation, any such plan maintained to provide
benefits to former employees of such entities, that may not be terminated by the
Borrower, a Subsidiary or any ERISA Affiliate in its sole discretion at any time
without any material liability.

     

    (h) Neither
the Borrower, the Subsidiaries nor any ERISA Affiliate sponsors, maintains or
contributes to, or has at any time in the six-year period preceding the date
hereof sponsored, maintained or contributed to, any Multiemployer
Plan.

     

    (i) Neither
the Borrower, the Subsidiaries nor any ERISA Affiliate is required to provide
security under section 401(a)(29) of the Code due to a Plan amendment that
results in an increase in current liability for the Plan.

     

    Section
7.12 Disclosure; No Material
Misstatements.  The
Borrower has disclosed to the Lenders all agreements, instruments and corporate
or other restrictions to which it or any of its Material Subsidiaries is
subject, and all other matters known to it, that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse
Effect.  Neither the Information Memorandum nor any of the other
reports, financial statements, certificates or other information furnished by or
on behalf of the Borrower or any Material Subsidiary to the Administrative Agent
or any Lender or any of their Affiliates in connection with the negotiation of
this Agreement or any other Loan Document or delivered hereunder or under any
other Loan Document (as modified or supplemented by other information so
furnished) contains any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that, with
respect to projected financial information, the Borrower represents only that
such information was prepared in good faith based upon assumptions believed to
be reasonable at the time.  There is no fact peculiar to the Borrower
or any Material Subsidiary which could reasonably be expected to have a Material
Adverse Effect or in the future is reasonably likely to have a Material Adverse
Effect and which has not been set forth in this Agreement or the Loan Documents
or the other documents, certificates and statements furnished to the
Administrative Agent or the Lenders by or on behalf of the Borrower or any
Material Subsidiary prior to, or on, the date hereof in connection with the
transactions contemplated hereby.  There are no material statements or
conclusions in any Reserve Report which are based upon or include misleading
information or fail to take into account material information regarding the
matters reported therein.

     

    Section
7.13 Insurance.  The
Borrower has, and has caused all its Material Subsidiaries to have, (a) all
insurance policies sufficient for the compliance by each of them with all
material Governmental Requirements and all material agreements and (b) insurance
coverage in at least amounts and against such risk (including, without
limitation, public liability) that are usually insured against by companies
similarly situated and engaged in the same or a similar business for the assets
and operations of the Borrower and its Material Subsidiaries.

     

    Section
7.14 Restriction on
Liens.  Neither
the Borrower nor any of the Material Subsidiaries is a party to any material
agreement or arrangement (other than Capital Leases creating Liens permitted by
Section 9.03(c), but then only on the Property
subject of such Capital Lease), or subject to any order, judgment, writ or
decree, which either restricts or purports to restrict its ability to grant
Liens to the Administrative Agent and the Lenders on or in respect of their
Properties to secure the Indebtedness and the Loan Documents.

     

    Section
7.15 Subsidiaries.  Except
as set forth on Schedule 7.15 or as disclosed in writing to the Administrative
Agent (which shall promptly furnish a copy to the Lenders), which shall be a
supplement to Schedule 7.15, the Borrower has no
Subsidiaries.  Schedule 7.15 identifies each Subsidiary that is a
Material Subsidiary, and each Material Subsidiary on such schedule is a
Wholly-Owned Subsidiary.

     

    Section
7.16 Location of Business and
Offices.  The
Borrower’s jurisdiction of organization is Delaware; the name of the Borrower as
listed in the public records of its jurisdiction of organization is St. Mary
Land & Exploration Company; and the organizational identification number of
the Borrower in its jurisdiction of organization is 44728.  The
Borrower’s principal place of business and chief executive office are located at
the address specified in Section 12.01 (or as set
forth in a notice delivered pursuant to Section
8.01(m) and Section 12.01(c)).  Each
Material Subsidiary’s jurisdiction of organization, name as listed in the public
records of its jurisdiction of organization, organizational identification
number in its jurisdiction of organization, and the location of its principal
place of business and chief executive office is stated on Schedule 7.15 (or as
set forth in a notice delivered pursuant to Section
8.01(m)).

     

    Section
7.17 Properties; Titles,
Etc.  Except
for matters which could not reasonably be expected to have a Material Adverse
Effect:

     

    (a) Each of
the Borrower and the Material Subsidiaries has good and defensible title to the
Oil and Gas Properties evaluated in the most recently delivered Reserve Report
and good title to all its personal Properties, in each case, free and clear of
all Liens except Liens permitted by Section
9.03.  After giving full effect to the Excepted Liens, the
Borrower or the Material Subsidiary specified as the owner owns the net
interests in production attributable to the Hydrocarbon Interests as reflected
in the most recently delivered Reserve Report, and the ownership of such
Properties shall not in any material respect obligate the Borrower or such
Material Subsidiary to bear the costs and expenses relating to the maintenance,
development and operations of each such Property in an amount in excess of the
working interest of each Property set forth in the most recently delivered
Reserve Report that is not offset by a corresponding proportionate increase in
the Borrower’s or such Material Subsidiary’s net revenue interest in such
Property.

     

    (b) All
material leases and agreements necessary for the conduct of the business of the
Borrower and the Material Subsidiaries are valid and subsisting, in full force
and effect, and there exists no default or event or circumstance which with the
giving of notice or the passage of time or both would give rise to a default
under any such lease or leases, which would affect in any material respect the
conduct of the business of the Borrower and the Material Subsidiaries, taken as
a whole.

     

    (c) The
rights and Properties presently owned, leased or licensed by the Borrower and
the Material Subsidiaries including, without limitation, all easements and
rights of way, include all rights and Properties necessary to permit the
Borrower and the Material Subsidiaries to conduct their business in all material
respects in the same manner as its business has been conducted prior to the date
hereof.

     

    (d) All of
the Properties of the Borrower and the Material Subsidiaries which are
reasonably necessary for the operation of their businesses are in good working
condition and are maintained in accordance with prudent business
standards.

     

    (e) The
Borrower and each Material Subsidiary owns, or is licensed to use, all
trademarks, tradenames, copyrights, patents and other intellectual Property
material to its business, and the use thereof by the Borrower and such Material
Subsidiary does not infringe upon the rights of any other Person, except for any
such infringements that, individually or in the aggregate, could not reasonably
be expected to result in a Material Adverse Effect.  The Borrower and
its Material Subsidiaries either own or have valid licenses or other rights to
use all databases, geological data, geophysical data, engineering data, seismic
data, maps, interpretations and other technical information used in their
businesses as presently conducted, subject to the limitations contained in the
agreements governing the use of the same, which limitations are customary for
companies engaged in the business of the exploration and production of
Hydrocarbons, with such exceptions as could not reasonably be expected to have a
Material Adverse Effect.

     

    Section
7.18 Maintenance of
Properties.  Except
for such acts or failures to act as could not be reasonably expected to have a
Material Adverse Effect, the Oil and Gas Properties (and Properties unitized
therewith) have been maintained, operated and developed in a good and
workmanlike manner and in conformity with all Government Requirements and in
conformity with the provisions of all leases, subleases or other contracts
comprising a part of the Hydrocarbon Interests and other contracts and
agreements forming a part of the Oil and Gas Properties.  Specifically
in connection with the foregoing, except for those as could not be reasonably
expected to have a Material Adverse Effect, (i) no Oil and Gas Property is
subject to having allowable production reduced below the full and regular
allowable (including the maximum permissible tolerance) because of any
overproduction (whether or not the same was permissible at the time) and (ii)
none of the wells comprising a part of the Oil and Gas Properties (or Properties
unitized therewith) is deviated from the vertical more than the maximum
permitted by Government Requirements, and such wells are, in fact, bottomed
under and are producing from, and the well bores are wholly within, the Oil and
Gas Properties (or in the case of wells located on Properties unitized
therewith, such unitized Properties).  All pipelines, wells, gas
processing plants, platforms and other material improvements, fixtures and
equipment owned in whole or in part by the Borrower or any of its Material
Subsidiaries that are necessary to conduct normal operations are being
maintained in a state adequate to conduct normal operations, and with respect to
such of the foregoing which are operated by the Borrower or any of its Material
Subsidiaries, in a manner consistent with the Borrower’s or its Material
Subsidiaries’ past practices (other than those the failure of which to maintain
in accordance with this Section 7.18 could not
reasonably be expect to have a Material Adverse Effect).

     

    Section
7.19 Gas Imbalances,
Prepayments.  As
of the date hereof, except as set forth on Schedule 7.19 or on the most recent
certificate delivered pursuant to Section 8.12(c), on
a net basis there are no gas imbalances, take or pay or other prepayments which
would require the Borrower or any of its Material Subsidiaries to deliver
Hydrocarbons produced from the Oil and Gas Properties at some future time
without then or thereafter receiving full payment therefor exceeding three
million mcf of gas (on an mcf equivalent basis) in the aggregate.

     

    Section
7.20 Marketing of
Production.  Except
for contracts listed and in effect on the date hereof on Schedule 7.20, and
thereafter either disclosed in writing to the Administrative Agent or included
in the most recently delivered Reserve Report (with respect to all of which
contracts the Borrower represents that it or its Material Subsidiaries are
receiving a price for all production sold thereunder which is computed
substantially in accordance with the terms of the relevant contract and are not
having deliveries curtailed substantially below the subject Property’s delivery
capacity), no material agreements exist which are not cancelable on 60 days
notice or less without penalty or detriment for the sale of production from the
Borrower’s or its Material Subsidiaries’ Hydrocarbons (including, without
limitation, calls on or other rights to purchase, production, whether or not the
same are currently being exercised) that (a) pertain to the sale of production
at a fixed price and (b) have a maturity or expiry date of longer than six (6)
months from the date hereof.

     

    Section
7.21 Swap
Agreements.  Schedule
7.21, as of the date hereof, and after the date hereof, each report required to
be delivered by the Borrower pursuant to Section 8.01(d), sets forth, a true and
complete list of all Swap Agreements of the Borrower and each Material
Subsidiary, the material terms thereof (including the type, term, effective
date, termination date and notional amounts or volumes), the net mark to market
value thereof, all credit support agreements relating thereto (including any
margin required or supplied) and the counterparty to each such
agreement.

     

    Section
7.22 Use of Loans and Letters of
Credit.  The
proceeds of the Loans and the Letters of Credit shall be used (a) to provide
working capital for exploration, development and production operations, (b) to
finance the acquisition of Oil & Gas Properties, (c) to renew, rearrange,
modify and extend the Debt under the Existing Credit Agreement, and (d) for
general corporate purposes.  The Borrower and its Subsidiaries are not
engaged principally, or as one of its or their important activities, in the
business of extending credit for the purpose, whether immediate, incidental or
ultimate, of buying or carrying margin stock (within the meaning of Regulation U
or X of the Board).  No part of the proceeds of any Loan or Letter of
Credit will be used for any purpose which violates the provisions of Regulations
U or X of the Board.

     

    Section
7.23 Solvency.  After
giving effect to the transactions contemplated hereby, (a) the aggregate assets
(after giving effect to amounts that could reasonably be received by reason of
indemnity, offset, insurance or any similar arrangement), at a fair valuation,
of the Borrower and the Guarantors, taken as a whole, will exceed the aggregate
Debt of the Borrower and the Guarantors on a consolidated basis, as the Debt
becomes absolute and matures, (b) each of the Borrower and the Guarantors will
not have incurred or intended to incur, and will not believe that it will incur,
Debt beyond its ability to pay such Debt (after taking into account the timing
and amounts of cash to be received by each of the Borrower and the Guarantors
and the amounts to be payable on or in respect of its liabilities, and giving
effect to amounts that could reasonably be received by reason of indemnity,
offset, insurance or any similar arrangement) as such Debt becomes absolute and
matures and (c) each of the Borrower and the Guarantors will not have (and will
have no reason to believe that it will have thereafter) unreasonably small
capital for the conduct of its business.

     

    Section
7.24 Material
Agreements.  The
Borrower has delivered or caused to be delivered to the Administrative Agent
true and correct copies of the Material Agreements.  The Material
Agreements have not been modified, terminated, assigned or pledged by Borrower
or any Material Subsidiary, as applicable, are in full force and effect and no
party is in default in the performance of its obligations thereunder in any
material respect.

     

    ARTICLE
VIII

     

    Affirmative
Covenants

     

    Until the
Commitments have expired or been terminated and the principal of and interest on
each Loan and all fees payable hereunder and all other amounts payable under the
Loan Documents shall have been paid in full and all Letters of Credit shall have
expired or terminated and all LC Disbursements shall have been reimbursed, the
Borrower covenants and agrees with the Lenders that:

     

    Section
8.01 Financial Statements;
Ratings Change; Other Information.  The
Borrower will furnish to the Administrative Agent for electronic or other
distribution to each Lender:

     

    (a) Annual Financial
Statements.  Within 90 days after the end of each fiscal year
of the Borrower, its audited consolidated balance sheet and related statements
of operations, stockholders’ equity and cash flows as of the end of and for such
year, setting forth in each case in comparative form the figures for the
previous fiscal year, all reported on by Deloitte & Touche or other
independent public accountants of recognized national standing (without a “going
concern” or like qualification or exception and without any qualification or
exception as to the scope of such audit) to the effect that such consolidated
financial statements present fairly in all material respects the financial
condition and results of operations of the Borrower and its Consolidated
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied.

     

    (b) Quarterly Financial
Statements.  Within 45 days after the end of each of the first
three fiscal quarters of each fiscal year of the Borrower, its consolidated
balance sheet and related statements of operations, stockholders’ equity and
cash flows as of the end of and for such fiscal quarter and the then elapsed
portion of the fiscal year, setting forth in each case in comparative form the
figures for the corresponding period or periods of (or, in the case of the
balance sheet, as of the end of) the previous fiscal year, all certified by one
of its Financial Officers as presenting fairly in all material respects the
financial condition and results of operations of the Borrower and its
Consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments and the
absence of footnotes.

     

    (c) Certificate of Financial
Officer -- Compliance.  Concurrently with any delivery of
financial statements under Section 8.01(a) or Section 8.01(b), a certificate of a Financial Officer in
substantially the form of Exhibit B hereto (i) certifying as to whether a
Default has occurred and, if a Default has occurred, specifying the details
thereof and any action taken or proposed to be taken with respect thereto, (ii)
setting forth reasonably detailed calculations demonstrating compliance with Section 8.13(b) and Section
9.01 and (iii) stating whether any change in GAAP or in the application
thereof has occurred since the date of the audited financial statements referred
to in Section 7.04 and, if any such change has
occurred, specifying the effect of such change on the financial statements
accompanying such certificate.

     

    (d) Listing of Swap
Agreements.  Concurrently with any delivery of financial
statements under Section 8.01(a) and Section 8.01(b), a true and complete list of all Swap
Agreements of the Borrower and each Material Subsidiary as of the last Business
Day of such fiscal quarter or fiscal year, which shall depict the material terms
thereof (including the type, term, effective date, termination date and notional
amounts or volumes), the net mark-to-market value therefor, any new credit
support agreements relating thereto not listed on Schedule 7.20, any margin
required or supplied under any credit support document, and the counterparty to
each such agreement.

     

    (e) Certificate of Insurer --
Insurance Coverage.  Concurrently with any delivery of
financial statements under Section 8.01(a), a
certificate of insurance coverage from each insurer with respect to the
insurance required by Section 8.07, in form and
substance satisfactory to the Administrative Agent, and, if requested by the
Administrative Agent or any Lender, all copies of the applicable
policies.

     

    (f) Other Accounting
Reports.  Promptly upon receipt thereof, a copy of each other
report or letter submitted to the Borrower or any of its Subsidiaries by
independent accountants in connection with any annual, interim or special audit
made by them of the books of the Borrower or any such Subsidiary, and a copy of
any response by the Borrower or any such Subsidiary, or the Board of Directors
of the Borrower or any such Subsidiary, to such letter or report.

     

    (g) SEC and Other Filings;
Reports to Shareholders.  Promptly after the same become
publicly available, copies of all periodic and other reports, proxy statements
and other materials filed by the Borrower or any Subsidiary with the SEC, or
with any national securities exchange, or distributed by the Borrower to its
shareholders generally, as the case may be.

     

    (h) Notices Under Material
Instruments.  Promptly after the furnishing thereof, copies of
any financial statement, report or notice furnished to or by any Person pursuant
to the terms of any preferred stock designation, indenture, loan or credit or
other similar agreement, other than this Agreement and not otherwise required to
be furnished to the Lenders pursuant to any other provision of this Section 8.01.

     

    (i) Lists of
Purchasers.  Promptly following the written request from the
Administrative Agent thereof, a list of all Persons purchasing Hydrocarbons from
the Borrower or any Material Subsidiary.

     

    (j) Notice of Sales of Oil and
Gas Properties.  In the event the Borrower or any Material
Subsidiary intends to sell, transfer, assign or otherwise dispose of any Oil or
Gas Properties or any Equity Interests in any Subsidiary in accordance with Section 9.13 for consideration in excess of $15,000,000,
prior written notice of such disposition, the price thereof and the anticipated
date of closing.

     

    (k) Notice of Casualty
Events.  Prompt written notice, and in any event within three
Business Days, of the occurrence of any Casualty Event or the commencement of
any action or proceeding that could reasonably be expected to result in a
Casualty Event.

     

    (l) Issuance of Permitted
Refinancing Debt.  In the event the Borrower intends to
refinance any Debt with the proceeds of Permitted Refinancing Debt, prior
written notice of such intended offering therefor, the amount thereof and the
anticipated date of closing and will furnish a copy of the preliminary offering
memorandum (if any) and the final offering memorandum (if any).

     

    (m)  Information Regarding
Borrower and Guarantors.  Prompt written notice (and in any
event within thirty (30) days upon becoming aware thereof) of any change
(i) in the Borrower or any Guarantor’s corporate name or in any trade name
used to identify such Person in the conduct of its business or in the ownership
of its Properties, (ii) in the location of the Borrower or any Guarantor’s
chief executive office or principal place of business, (iii) in the
Borrower or any Guarantor’s identity or corporate structure or in the
jurisdiction in which such Person is incorporated or formed, (iv) in the
Borrower or any Guarantor’s jurisdiction of organization or such Person’s
organizational identification number in such jurisdiction of organization, and
(v) in the Borrower or any Guarantor’s federal taxpayer identification
number.

     

    (n) Other Requested
Information.  Promptly following any request therefor, such
other information regarding the operations, business affairs and financial
condition of the Borrower or any Subsidiary (including, without limitation, any
Plan or Multiemployer Plan and any reports or other information required to be
filed under ERISA), or compliance with the terms of this Agreement or any other
Loan Document, as the Administrative Agent or any Lender may reasonably
request.

     

    Section
8.02 Notices of Material
Events.  The
Borrower will furnish to the Administrative Agent and each Lender prompt written
notice of the following:

     

    (a) the
occurrence of any Default;

     

    (b) the
filing or commencement of any action, suit or proceeding by or before any
arbitrator or Governmental Authority against or affecting the Borrower or any
Affiliate thereof that, if adversely determined, could reasonably be expected to
result in a Material Adverse Effect;

     

    (c) the
occurrence of any ERISA Event that, alone or together with any other ERISA
Events that have occurred, could reasonably be expected to result in liability
of the Borrower and its Subsidiaries in an aggregate amount exceeding
$6,000,000; and

     

    (d) any other
development that results in, or could reasonably be expected to result in, a
Material Adverse Effect.

     

    Each
notice delivered under this Section 8.02 shall be
accompanied by a statement of a Responsible Officer setting forth the details of
the event or development requiring such notice and any action taken or proposed
to be taken with respect thereto.

     

    Section
8.03 Existence; Conduct of
Business.  The
Borrower will, and will cause each Material Subsidiary to, do or cause to be
done all things necessary to preserve, renew and keep in full force and effect
its legal existence and the rights, licenses, permits, privileges and franchises
material to the conduct of its business and maintain, if necessary, its
qualification to do business in each other jurisdiction in which its Oil and Gas
Properties is located or the ownership of its Properties requires such
qualification, except where the failure to so qualify could not reasonably be
expected to have a Material Adverse Effect; provided that the foregoing shall
not prohibit any merger, consolidation, liquidation or dissolution permitted
under Section 9.12.

     

    Section
8.04 Payment of
Obligations.  The
Borrower will, and will cause each Material Subsidiary to, pay its obligations,
including Tax liabilities of the Borrower and all of its Subsidiaries before the
same shall become delinquent or in default, except where (a) the validity or
amount thereof is being contested in good faith by appropriate proceedings, (b)
the Borrower or such Material Subsidiary has set aside on its books adequate
reserves with respect thereto in accordance with GAAP and (c) the failure to
make payment pending such contest could not reasonably be expected to result in
a Material Adverse Effect or result in the seizure or levy of any Property of
the Borrower or any Subsidiary.

     

    Section
8.05 Performance of Obligations
under Loan Documents.  The
Borrower will pay the Notes according to the reading, tenor and effect thereof,
and the Borrower will and will cause each Material Subsidiary to do and perform
every act and discharge all of the obligations to be performed and discharged by
them under the Loan Documents, including, without limitation, this Agreement, at
the time or times and in the manner specified.

     

    Section
8.06 Operation and Maintenance of
Properties.  Except
for matters that could not reasonably be expected to result in a Material
Adverse Effect, the Borrower, at its own expense, will, and will cause each
Material Subsidiary to:

     

    (a) operate
its Oil and Gas Properties and other material Properties or cause such Oil and
Gas Properties and other material Properties to be operated in a careful and
efficient manner in accordance with the practices of the industry and in
compliance with all applicable contracts and agreements and in compliance with
all Governmental Requirements, including, without limitation, applicable pro
ration requirements and Environmental Laws, and all applicable laws, rules and
regulations of every other Governmental Authority from time to time constituted
to regulate the development and operation of its Oil and Gas Properties and the
production and sale of Hydrocarbons and other minerals therefrom, except, in
each case, where the failure to comply could not reasonably be expected to have
a Material Adverse Effect.

     

    (b) keep and
maintain all Property material to the conduct of its business in good working
order and condition, ordinary wear and tear excepted, preserve, maintain and
keep in good repair, working order and efficiency (ordinary wear and tear
excepted) all of its material Oil and Gas Properties and other material
Properties, including, without limitation, all equipment, machinery and
facilities.

     

    (c) promptly
pay and discharge, or make reasonable and customary efforts to cause to be paid
and discharged, all delay rentals, royalties, expenses and indebtedness accruing
under the leases or other agreements affecting or pertaining to its Oil and Gas
Properties and will do all other things necessary to keep unimpaired their
rights with respect thereto and prevent any forfeiture thereof or default
thereunder.

     

    (d) promptly
perform or make reasonable and customary efforts to cause to be performed, in
accordance with industry standards, the obligations required by each and all of
the assignments, deeds, leases, sub-leases, contracts and agreements affecting
its interests in its Oil and Gas Properties and other material
Properties.

     

    (e) operate
its Oil and Gas Properties and other material Properties or cause or make
reasonable and customary efforts to cause such Oil and Gas Properties and other
material Properties to be operated in accordance with the practices of the
industry and in material compliance with all applicable contracts and agreements
and in compliance in all material respects with all Governmental
Requirements.

     

    (f) to the
extent the Borrower or a Material Subsidiary is not the operator of any
Property, the Borrower shall use reasonable efforts to cause the operator to
comply with this Section 8.06.

     

    Section
8.07 Insurance.  The
Borrower will, and will cause each Material Subsidiary to, maintain, with
financially sound and reputable insurance companies, insurance in such amounts
and against such risks as are customarily maintained by companies engaged in the
same or similar businesses operating in the same or similar
locations.

     

    Section
8.08 Books and Records;
Inspection Rights.  The
Borrower will, and will cause each Material Subsidiary to, keep proper books of
record and account in which full, true and correct entries are made of all
dealings and transactions in relation to its business and
activities.  The Borrower will, and will cause each Material
Subsidiary to, permit any representatives designated by the Administrative Agent
or any Lender, upon reasonable prior notice, to visit and inspect its
Properties, to examine and make extracts from its books and records, and to
discuss its affairs, finances and condition with its officers and independent
accountants, all at such reasonable times and as often as reasonably
requested.

     

    Section
8.09 Compliance with
Laws.  The
Borrower will, and will cause each Material Subsidiary to, comply with all laws,
rules, regulations and orders of any Governmental Authority applicable to it or
its Property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.

     

    Section
8.10 Environmental
Matters.

     

    (a) The
Borrower shall at its sole expense: (i) comply, and shall cause its Properties
and operations and each Subsidiary and each Subsidiary’s Properties and
operations to comply, with all applicable Environmental Laws, the breach of
which could be reasonably expected to have a Material Adverse Effect; (ii) not
dispose of or otherwise release, and shall cause each Subsidiary not to dispose
of or otherwise release, any oil, oil and gas waste, hazardous substance, or
solid waste on, under, about or from any of the Borrower’s or its Subsidiaries’
Properties or any other Property to the extent caused by the Borrower’s or any
of its Subsidiaries’ operations except in compliance with applicable
Environmental Laws, the disposal or release of which could reasonably be
expected to have a Material Adverse Effect; (iii) timely obtain or file, and
shall cause each Subsidiary to timely obtain or file, all notices, permits,
licenses, exemptions, approvals, registrations or other authorizations, if any,
required under applicable Environmental Laws to be obtained or filed in
connection with the operation or use of the Borrower’s or its Subsidiaries’
Properties, which failure to obtain or file could reasonably be expected to have
a Material Adverse Effect; (iv) promptly commence and diligently prosecute to
completion, and shall cause each Subsidiary to promptly commence and diligently
prosecute to completion, any assessment, evaluation, investigation, monitoring,
containment, cleanup, removal, repair, restoration, remediation or other
remedial obligations (collectively, the “Remedial Work”) in
the event any Remedial Work is required or reasonably necessary under applicable
Environmental Laws because of or in connection with the actual or suspected
past, present or future disposal or other release of any oil, oil and gas waste,
hazardous substance or solid waste on, under, about or from any of the
Borrower’s or its Subsidiaries’ Properties, which failure to commence and
diligently prosecute to completion could reasonably be expected to have a
Material Adverse Effect; and (v) establish and implement, and shall cause
each Subsidiary to establish and implement, such procedures as may be necessary
to continuously determine and assure that the Borrower’s and its Subsidiaries’
obligations under this Section 8.10(a) are timely and fully satisfied, which failure to
establish and implement could reasonably be expected to have a Material Adverse
Effect.

     

    (b) The
Borrower will promptly, but in no event later than five days of the occurrence
of a triggering event, notify the Administrative Agent and the Lenders in
writing of any threatened action, investigation or inquiry by any Governmental
Authority or any threatened demand or lawsuit by any landowner or other third
party against the Borrower or its Subsidiaries or their Properties of which the
Borrower has knowledge in connection with any Environmental Laws (excluding
routine testing and corrective action) if the Borrower reasonably anticipates
that such action will result in liability (whether individually or in the
aggregate) in excess of $5,000,000, not fully covered by insurance, subject to
normal deductibles.

     

    (c) In
connection with any future acquisitions of Oil and Gas Properties or other
Properties, the Borrower will and will cause each Subsidiary to provide
environmental audits and tests in accordance with American Society of Testing
Materials standards upon request by the Administrative Agent and the Lenders,
except in circumstances in which the Borrower or any Subsidiary is acquiring an
additional interest in an Oil and Gas Property or other Property.

     

    Section
8.11 Further
Assurances.

     

    (a) The
Borrower at its expense will, and will cause each Material Subsidiary to,
promptly execute and deliver to the Administrative Agent all such other
documents, agreements and instruments reasonably requested by the Administrative
Agent to comply with, cure any defects or accomplish the conditions precedent,
covenants and agreements of the Borrower or any Material Subsidiary, as the case
may be, in the Loan Documents, including the Notes, or to further evidence and
more fully describe the collateral intended as security for the Indebtedness, or
to correct any omissions in this Agreement or the Security Instruments, or to
state more fully the obligations secured therein, or to perfect, protect or
preserve any Liens created pursuant to this Agreement or any of the Security
Instruments or the priority thereof, or to make any recordings, file any notices
or obtain any consents, all as may be reasonably necessary or appropriate, in
the reasonable discretion of the Administrative Agent, in connection
therewith.

     

    (b) The
Borrower hereby authorizes the Administrative Agent to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Mortgaged Property without the signature of the Borrower or any
Material Subsidiary where permitted by law.  A carbon, photographic or
other reproduction of the Security Instruments or any financing statement
covering the Mortgaged Property or any part thereof shall be sufficient as a
financing statement where permitted by law.  The Administrative Agent
will promptly send the Borrower any financing or continuation statements it
files without the signature of the Borrower or any other Guarantor and the
Administrative Agent will promptly send the Borrower the filing or recordation
information with respect thereto.

     

    Section
8.12 Reserve
Reports.

     

    (a) On or
before February 28th (or
February 29th, as
applicable) and August 31st of each
year, commencing August 31, 2008, the Borrower shall furnish to the
Administrative Agent and the Lenders a Reserve Report.  The Reserve
Report as of December 31 of each year shall have the majority of PV-10 value
prepared or audited by one or more Approved Petroleum Engineers, and the Reserve
Report as of June 30 of each year shall be prepared by or under the supervision
of the Manager of Reservoir Engineering of the Borrower who shall certify such
Reserve Report to be true and accurate and to have been prepared in accordance
with the procedures used in the immediately preceding December 31 Reserve
Report.

     

    (b) In the
event of an Interim Redetermination, the Borrower shall furnish to the
Administrative Agent and the Lenders a Reserve Report prepared by or under the
supervision of the Manager of Reservoir Engineering of the Borrower who shall
certify such Reserve Report to be true and accurate and to have been prepared in
accordance with the procedures used in the immediately preceding December 31
Reserve Report.  For any Interim Redetermination requested by the
Administrative Agent or the Borrower pursuant to Section
2.07(b), the Borrower shall provide such Reserve Report with an “as of” date
as required by the Administrative Agent as soon as possible, but in any event no
later than thirty (30) days following the receipt of such request.

     

    (c) With the
delivery of each Reserve Report, the Borrower shall provide to the
Administrative Agent and the Lenders a certificate from a Responsible Officer
certifying that in all material respects: (i) the information contained in the
Reserve Report and any other information delivered in connection therewith is
true and correct, (ii) the Borrower or its Material Subsidiaries owns good and
defensible title to the Oil and Gas Properties evaluated in such Reserve Report
and such Properties are free of all Liens except for Liens permitted by Section 9.03, (iii) except as set forth on an exhibit to
the certificate, on a net basis there are no gas imbalances, take or pay or
other prepayments in excess of the volume specified in Section 7.19 with respect to its Oil and Gas Properties
evaluated in such Reserve Report which would require the Borrower or any
Material Subsidiary to deliver Hydrocarbons either generally or produced from
such Oil and Gas Properties at some future time without then or thereafter
receiving full payment therefor, (iv) none of their Oil and Gas Properties have
been sold since the date of the last Borrowing Base determination except as set
forth on an exhibit to the certificate, which certificate shall list all of its
Oil and Gas Properties sold and in such detail as reasonably required by the
Administrative Agent, (v) attached to the certificate is a list of all marketing
agreements entered into subsequent to the later of the date hereof or the most
recently delivered Reserve Report which the Borrower could reasonably be
expected to have been obligated to list on Schedule 7.20 had such agreement been
in effect on the date hereof and (vi) attached thereto is a schedule of the Oil
and Gas Properties evaluated by such Reserve Report that are Mortgaged
Properties and demonstrating the percentage of the Borrowing Base that the value
of such Mortgaged Properties represent.

     

    Section
8.13 Title
Information.

     

    (a) On or
before the delivery to the Administrative Agent and the Lenders of each Reserve
Report required by Section 8.12(a), the Borrower will
deliver title information in form and substance acceptable to the Administrative
Agent covering enough of the Oil and Gas Properties evaluated by such Reserve
Report that were not included in the immediately preceding Reserve Report, so
that the Administrative Agent shall have received together with title
information previously delivered to the Administrative Agent, satisfactory title
information on at least 70% of the total value of the Oil and Gas Properties
evaluated by such Reserve Report.

     

    (b) If the
Borrower has provided title information for additional Properties under Section 8.13(a), the Borrower shall, within 60 days of
notice from the Administrative Agent that title defects or exceptions exist with
respect to such additional Properties, either (i) cure any such title defects or
exceptions (including defects or exceptions as to priority) which are not
permitted by Section 9.03 raised by such information,
(ii) substitute acceptable Mortgaged Properties with no title defects or
exceptions except for Excepted Liens (other than Excepted Liens described in
clauses (e), (g) and (h) of such definition) having an equivalent value or (iii)
deliver title information in form and substance acceptable to the Administrative
Agent so that the Administrative Agent shall have received, together with title
information previously delivered to the Administrative Agent, satisfactory title
information on at least 70% of the value of the Oil and Gas Properties evaluated
by such Reserve Report.

     

    (c) If the
Borrower is unable to cure any title defect requested by the Administrative
Agent or the Lenders to be cured within the 60-day period or the Borrower does
not comply with the requirements to provide acceptable title information
covering 70% of the value of the Oil and Gas Properties evaluated in the most
recent Reserve Report, such default shall not be a Default, but instead the
Administrative Agent and/or the Majority Lenders shall have the right to
exercise the following remedy in their sole discretion from time to time, and
any failure to so exercise this remedy at any time shall not be a waiver as to
future exercise of the remedy by the Administrative Agent or the
Lenders.  To the extent that the Administrative Agent or the Majority
Lenders are not satisfied with title to any Mortgaged Property after the 60-day
period has elapsed, such unacceptable Mortgaged Property shall not count towards
the 70% requirement, and the Administrative Agent may send a notice to the
Borrower and the Lenders that the then outstanding Borrowing Base shall be
reduced by an amount as determined by the Majority Lenders to cause the Borrower
to be in compliance with the requirement to provide acceptable title information
on 70% of the value of the Oil and Gas Properties.  This new Borrowing
Base shall become effective immediately after receipt of such
notice.

     

    Section
8.14 Additional Collateral;
Additional Guarantors.

     

    (a) In
connection with each redetermination of the Borrowing Base, the Borrower shall
review the Reserve Report and the list of current Mortgaged Properties (as
described in Section 8.12(c)(vi)) to ascertain
whether the Mortgaged Properties represent at least 70% of the total value of
the Oil and Gas Properties evaluated in the most recently completed Reserve
Report after giving effect to exploration and production activities,
acquisitions, dispositions and production.  In the event that the
Mortgaged Properties do not represent at least 70% of such total value, then the
Borrower shall, and shall cause its Material Subsidiaries to, grant to the
Administrative Agent as security for the Indebtedness a first-priority Lien
interest (subject only to Excepted Liens of the type described in clauses (a) to
(d) and (f) of the definition thereof, but subject to the provisos at the end of
such definition) on additional Oil and Gas Properties not already subject to a
Lien of the Security Instruments such that after giving effect thereto, the
Mortgaged Properties will represent at least 70% of such total
value.  All such Liens will be created and perfected by and in
accordance with the provisions of deeds of trust, security agreements and
financing statements or other Security Instruments, all in form and substance
reasonably satisfactory to the Administrative Agent and in sufficient executed
(and acknowledged where necessary or appropriate) counterparts for recording
purposes.  In order to comply with the foregoing, if any Material
Subsidiary places a Lien on its Oil and Gas Properties and such Material
Subsidiary is not a Guarantor, then it shall become a Guarantor and comply with
Section 8.14(b).

     

    (b) In the
event that any Subsidiary becomes a Material Subsidiary after the Closing Date,
the Borrower shall promptly cause such Subsidiary to guarantee the Indebtedness
pursuant to the Guaranty Agreement.  In connection with any such
guaranty, the Borrower shall, or shall cause such Subsidiary to, A. execute and
deliver a supplement to the Guaranty Agreement executed by such Subsidiary, B.
pledge all of the Equity Interests of such new Subsidiary (including, without
limitation, delivery of original stock certificates evidencing the Equity
Interests of such Subsidiary, together with an appropriate undated stock powers
for each certificate duly executed in blank by the registered owner thereof) and
C. execute and deliver such other additional closing documents, certificates and
legal opinions as shall reasonably be requested by the Administrative
Agent.

     

    Section
8.15 ERISA
Compliance.  The
Borrower will promptly furnish and will cause the Subsidiaries and any ERISA
Affiliate to promptly furnish to the Administrative Agent (i) promptly after the
filing thereof with the United States Secretary of Labor, the Internal Revenue
Service or the PBGC, copies of each annual and other report with respect to each
Plan or any trust created thereunder, (ii) immediately upon becoming aware of
the occurrence of any ERISA Event or of any “prohibited transaction,” as
described in section 406 of ERISA or in section 4975 of the Code, in connection
with any Plan or any trust created thereunder, a written notice signed by the
President or the principal Financial Officer, the Subsidiary or the ERISA
Affiliate, as the case may be, specifying the nature thereof, what action the
Borrower, the Subsidiary or the ERISA Affiliate is taking or proposes to take
with respect thereto, and, when known, any action taken or proposed by the
Internal Revenue Service, the Department of Labor or the PBGC with respect
thereto, and (iii) immediately upon receipt thereof, copies of any notice of the
PBGC’s intention to terminate or to have a trustee appointed to administer any
Plan.  With respect to each Plan (other than a Multiemployer Plan),
the Borrower will, and will cause each Subsidiary and ERISA Affiliate to, (i)
satisfy in full and in a timely manner, without incurring any late payment or
underpayment charge or penalty and without giving rise to any lien, all of the
contribution and funding requirements of section 412 of the Code (determined
without regard to subsections (d), (e), (f) and (k) thereof) and of section 302
of ERISA (determined without regard to sections 303, 304 and 306 of ERISA), and
(ii) pay, or cause to be paid, to the PBGC in a timely manner, without incurring
any late payment or underpayment charge or penalty, all premiums required
pursuant to sections 4006 and 4007 of ERISA.

     

    Section
8.16 Performance of Material
Agreements.  The
Borrower will perform and observe, and cause each Material Subsidiary to perform
and observe, in all material respects each of the provisions of the Material
Agreements to which it is a party on its part to be performed or observed prior
to the termination thereof.

     

    ARTICLE
IX

     

    Negative
Covenants

     

    Until the
Commitments have expired or terminated and the principal of and interest on each
Loan and all fees payable hereunder and all other amounts payable under the Loan
Documents have been paid in full and all Letters of Credit have expired or
terminated and all LC Disbursements shall have been reimbursed, the Borrower
covenants and agrees with the Lenders that:

     

    Section
9.01 Financial
Covenants.

     

    (a) Ratio of Total Debt to
EBITDA.  The Borrower will not, at any time, permit its ratio
of Total Debt as of such time to EBITDA for the four fiscal quarters ending on
the last day of the fiscal quarter immediately preceding the date of
determination for which financial statements are available to be greater than
3.5 to 1.0.

     

    (b) Current
Ratio.  The Borrower will not permit, as of the last day of any
fiscal quarter, its ratio of (i) consolidated current assets (including the
unused amount of the total Commitments) to (ii) consolidated current liabilities
(excluding non-cash obligations under FAS 133 and the current portion of the
Aggregate Commitment) to be less than 1.0 to 1.0.

     

    Section
9.02 Debt.  Neither
the Borrower nor any Material Subsidiary will incur, create, assume or suffer to
exist any Debt, except:

     

    (a) the Notes
or other Indebtedness arising under the Loan Documents or any guaranty of or
suretyship arrangement for the Notes or other Indebtedness arising under the
Loan Documents.

     

    (b) Debt of
the Borrower and its Material Subsidiaries existing on the date hereof that is
reflected in the Financial Statements, and any Permitted Refinancing Debt in
respect thereof.

     

    (c) accounts
payable (for the deferred purchase price of Property or services) from time to
time incurred in the ordinary course of business which are not greater than
sixty (60) days past the date of invoice or delinquent or which are being
contested in good faith by appropriate action and for which adequate reserves
have been maintained in accordance with GAAP.

     

    (d) Debt
under Capital Leases not to exceed $15,000,000.

     

    (e) Debt
associated with bonds or surety obligations required by Governmental
Requirements in connection with the operation of the Oil and Gas
Properties.

     

    (f) intercompany
Debt between the Borrower and any Material Subsidiary or between Material
Subsidiaries to the extent permitted by Section
9.05(g); provided that such Debt is not held, assigned, transferred,
negotiated or pledged to any Person other than the Borrower or one of its
Wholly-Owned Subsidiaries, and, provided further, that any such Debt owed by
either the Borrower or a Guarantor shall be subordinated to the Indebtedness on
terms set forth in the Guaranty Agreement.

     

    (g) endorsements
of negotiable instruments for collection in the ordinary course of
business.

     

    (h) non-recourse
Debt secured by Property other than Oil and Gas Properties evaluated by the
Lenders for purposes of establishing the Borrowing Base not to exceed
$25,000,000 in the aggregate at any one time outstanding.

     

    (i) other
Debt not to exceed $15,000,000 in the aggregate at any one time
outstanding.

     

    (j) Debt of
the Borrower evidenced by the Senior
Convertible Notes, together with any and all refinancings thereof, so long as
all of same are either unsecured or expressly subordinated to this Agreement and
all of same are scheduled to mature after the Maturity Date under this
Agreement.

     

    Section
9.03 Liens.  Neither
the Borrower nor any Material Subsidiary will create, incur, assume or permit to
exist any Lien on any of its Properties (now owned or hereafter acquired),
except:

     

    (a) Liens
securing the payment of any Indebtedness.

     

    (b) Excepted
Liens.

     

    (c) Liens
securing Capital Leases permitted by Section 9.02(d)
but only on the Property under lease.

     

    (d) Liens
securing any Permitted Refinancing Debt provided that any such Permitted
Refinancing Debt is not secured by any additional or different Property not
securing the Refinanced Debt.

     

    (e) Liens on
Property securing non-recourse Debt permitted by Section 9.02(h).

     

    Section
9.04 Dividends, Distributions and
Redemptions.  The
Borrower will not, and will not permit any of its Subsidiaries to, declare or
make, or agree to pay or make, directly or indirectly, any Restricted Payment,
return any capital to its stockholders or make any distribution of its Property
to its Equity Interest holders, except (a) the Borrower may declare and pay
dividends with respect to its Equity Interests payable solely in additional
shares of its common stock (other than Disqualified Capital Stock), (b) so long
as no Event of Default shall have occurred which is continuing, the Borrower may
declare and pay annual cash dividends not to exceed $0.25 per common share on an
annual basis, (c) Subsidiaries may declare and pay dividends ratably with
respect to their Equity Interests, (d) the Borrower may make Restricted Payments
pursuant to and in accordance with restricted stock plans, stock option plans or
other benefit plans for management or employees of the Borrower and its
Subsidiaries and (e) the Borrower may make interest payments and principal
payments on any and all issued and sold Senior Convertible Notes and deliver
cash, stock, or any combination thereof, upon payment, settlement upon
conversion (whether a general or a net share settlement), or redemption of any
and all issued and sold Senior Convertible Notes so long as all such payments,
settlements upon conversions, and redemptions are in accordance with the terms
of the Senior Convertible Notes indenture and so long as no Default shall exist
or be occasioned by such payments, settlements upon conversions, or
redemptions.

     

    Section
9.05 Investments, Loans and
Advances.  Neither
the Borrower nor any Material Subsidiary will make or permit to remain
outstanding any Investments in or to any Person, except that the foregoing
restriction shall not apply to:

     

    (a) Investments
reflected in the Financial Statements or which are disclosed to the Lenders in
Schedule 9.05(a).

     

    (b) accounts
receivable arising in the ordinary course of business.

     

    (c) direct
obligations of the United States or any agency thereof, or obligations
guaranteed by the United States or any agency thereof, in each case maturing
within one year from the date of creation thereof.

     

    (d) commercial
paper maturing within one year from the date of creation thereof rated in the
highest grade by S&P or Moody’s.

     

    (e) deposits
maturing within one year from the date of creation thereof with, including
certificates of deposit issued by, any Lender or any office located in the
United States of any other bank or trust company which is organized under the
laws of the United States or any state thereof, has capital, surplus and
undivided profits aggregating at least $100,000,000 (as of the date of such bank
or trust company’s most recent financial reports) and has a short term deposit
rating of no lower than A2 or P2, as such rating is set forth from time to time,
by S&P or Moody’s, respectively or, in the case of any Foreign Subsidiary, a
bank organized in a jurisdiction in which the Foreign Subsidiary conducts
operations having assets in excess of $500,000,000 (or its equivalent in another
currency).

     

    (f) deposits
in money market funds investing exclusively in Investments described in Section 9.05(c), Section
9.05(d) or Section 9.05(e).

     

    (g) Investments
i. made by the Borrower in or to the Guarantors, and ii. made by a Guarantor in
or to the Borrower or any other Guarantor.

     

    (h) subject
to the limits in Section 9.07, Investments
(including, without limitation, capital contributions) in general or limited
partnerships or other types of entities (each a “venture”) entered
into by the Borrower or a Material Subsidiary with others in the ordinary course
of business; provided that i. any such venture is engaged exclusively in oil and
gas exploration, development, production, processing and related activities,
including transportation, except for existing Investments described or referred
to on Schedule 9.05(h) and Investments permitted by Section 9.05(i), ii. the
interest in such venture is acquired in the ordinary course of business and on
fair and reasonable terms and iii. such venture interests acquired and capital
contributions made (valued as of the date such interest was acquired or the
contribution made) do not exceed, in the aggregate at any time outstanding an
amount equal to $20,000,000.

     

    (i) subject
to the limits in Section 9.07, additional Investments
(including, without limitation, capital contributions) in the ventures described
or referred to on Schedule 9.05(h) and new Investments (including, without
limitation, capital contributions) in ventures entered into by the Borrower or a
Material Subsidiary with others in the ordinary course of business; provided
that i. any such venture is not engaged exclusively in oil and gas exploration,
development, production, processing and related activities, including
transportation, ii. the interest in such venture is acquired in the ordinary
course of business and on fair and reasonable terms and iii. such venture
interests acquired and capital contributions made (valued as of the date such
interest was acquired or the contribution made) do not exceed, in the aggregate
at any time outstanding an amount equal to $20,000,000.

     

    (j) subject
to the limits in Section 9.07, Investments in direct
ownership interests in additional Oil and Gas Properties and gas gathering
systems related thereto or related to farm-out, farm-in, joint operating, joint
venture or area of mutual interest agreements, gathering systems, pipelines or
other similar arrangements which are usual and customary in the oil and gas
exploration and production business located within the geographic boundaries of
the United States of America.

     

    (k) so long
as no Event of Default shall have occurred which is continuing, from and after
the date hereof, the Borrower may make repurchases of its stock; provided,
however, during any time the Borrower’s ratio of Total Debt to consolidated
tangible net worth is greater than 2.50 to 1.00, the aggregate amount paid by
the Borrower in connection with such repurchases shall not exceed
$50,000,000.

     

    Section
9.06 Designation of Material
Subsidiaries.  Unless
designated as a Non-Material Subsidiary on Schedule 7.15 as of the date hereof
or thereafter, assuming compliance with Section 9.16,
any Person that becomes a Subsidiary of the Borrower or any of its Material
Subsidiaries shall be classified as a Material Subsidiary.

     

    Section
9.07 Nature of Business;
International Operations.  Neither
the Borrower nor any Material Subsidiary will allow any material change to be
made in the character of its business as an independent oil and gas exploration
and production company.  From and after the date hereof, the Borrower
and its Subsidiaries will not acquire or make any other expenditure (whether
such expenditure is capital, operating or otherwise) in or related to, any Oil
and Gas Properties not located within the geographical boundaries of the United
States or Canada in excess of $10,000,000 in the aggregate.

     

    Section
9.08 Limitation on
Leases.  Neither
the Borrower nor any Material Subsidiary will create, incur, assume or suffer to
exist any obligation for the payment of rent or hire of Property of any kind
whatsoever (real or personal but excluding Capital Leases and leases of
Hydrocarbon Interests), under leases or lease agreements which would cause the
aggregate amount of all payments made by the Borrower and the Material
Subsidiaries pursuant to all such leases or lease agreements, including, without
limitation, any residual payments at the end of any lease, to exceed $7,500,000
in any period of twelve consecutive calendar months during the life of such
leases.

     

    Section
9.09 Proceeds of
Notes.  The
Borrower will not permit the proceeds of the Notes to be used for any purpose
other than those permitted by Section
7.22.  Neither the Borrower nor any Person acting on behalf of the
Borrower has taken or will take any action which might cause any of the Loan
Documents to violate Regulations U or X or any other regulation of the Board or
to violate Section 7 of the Securities Exchange Act of 1934 or any rule or
regulation thereunder, in each case as now in effect or as the same may
hereinafter be in effect.  If requested by the Administrative Agent,
the Borrower will furnish to the Administrative Agent and each Lender a
statement to the foregoing effect in conformity with the requirements of FR Form
U-1 or such other form referred to in Regulation U or Regulation X of the Board,
as the case may be.

     

    Section
9.10 ERISA
Compliance.  The
Borrower and the Subsidiaries will not at any time:

     

    (a) engage
in, or permit any ERISA Affiliate to engage in, any transaction in connection
with which the Borrower, a Subsidiary or any ERISA Affiliate could be subjected
to either a civil penalty assessed pursuant to subsections (c), (i) or (l) of
section 502 of ERISA or a tax imposed by Chapter 43 of Subtitle D of
the Code.

     

    (b) terminate,
or permit any ERISA Affiliate to terminate, any Plan in a manner, or take any
other action with respect to any Plan, which could result in any liability of
the Borrower, a Subsidiary or any ERISA Affiliate to the PBGC.

     

    (c) fail to
make, or permit any ERISA Affiliate to fail to make, full payment when due of
all amounts which, under the provisions of any Plan, agreement relating thereto
or applicable law, the Borrower, a Subsidiary or any ERISA Affiliate is required
to pay as contributions thereto.

     

    (d) permit to
exist, or allow any ERISA Affiliate to permit to exist, any accumulated funding
deficiency within the meaning of section 302 of ERISA or section 412 of the
Code, whether or not waived, with respect to any Plan.

     

    (e) permit,
or allow any ERISA Affiliate to permit, the actuarial present value of the
benefit liabilities under any Plan maintained by the Borrower, a Subsidiary or
any ERISA Affiliate which is regulated under Title IV of ERISA to exceed
the current value of the assets (computed on a plan termination basis in
accordance with Title IV of ERISA) of such Plan allocable to such benefit
liabilities.  The term “actuarial present value of the benefit
liabilities” shall have the meaning specified in section 4041 of
ERISA.

     

    (f) contribute
to or assume an obligation to contribute to, or permit any ERISA Affiliate to
contribute to or assume an obligation to contribute to, any Multiemployer
Plan.

     

    (g) acquire,
or permit any ERISA Affiliate to acquire, an interest in any Person that causes
such Person to become an ERISA Affiliate with respect to the Borrower or a
Subsidiary or with respect to any ERISA Affiliate of the Borrower or a
Subsidiary if such Person sponsors, maintains or contributes to, or at any time
in the six-year period preceding such acquisition has sponsored, maintained, or
contributed to, 1. any Multiemployer Plan, or 2. any other Plan that is subject
to Title IV of ERISA under which the actuarial present value of the benefit
liabilities under such Plan exceeds the current value of the assets (computed on
a plan termination basis in accordance with Title IV of ERISA) of such Plan
allocable to such benefit liabilities.

     

    (h) incur, or
permit any ERISA Affiliate to incur, a liability to or on account of a Plan
under sections 515, 4062, 4063, 4064, 4201 or 4204 of ERISA.

     

    (i) contribute
to or assume an obligation to contribute to, or permit any ERISA Affiliate to
contribute to or assume an obligation to contribute to, any employee welfare
benefit plan, as defined in section 3(1) of ERISA, including, without
limitation, any such plan maintained to provide benefits to former employees of
such entities, that may not be terminated by such entities in their sole
discretion at any time without any material liability.

     

    (j) amend, or
permit any ERISA Affiliate to amend, a Plan resulting in an increase in current
liability such that the Borrower, a Subsidiary or any ERISA Affiliate is
required to provide security to such Plan under section 401(a)(29) of the
Code.

     

    Section
9.11 Sale or Discount of
Receivables.  Except
for receivables obtained by the Borrower or any Material Subsidiary out of the
ordinary course of business or the settlement of joint interest billing accounts
in the ordinary course of business or discounts granted to settle collection of
accounts receivable or the sale of defaulted accounts arising in the ordinary
course of business in connection with the compromise or collection thereof and
not in connection with any financing transaction, neither the Borrower nor any
Material Subsidiary will discount or sell (with or without recourse) any of its
notes receivable or accounts receivable.

     

    Section
9.12 Mergers,
Etc.  Neither
the Borrower nor any Material Subsidiary will merge into or with or consolidate
with any other Person, or sell, lease or otherwise dispose of (whether in one
transaction or in a series of transactions) all or substantially all of its
Property to any other Person (any such transaction, a “consolidation”);
provided that

     

    (a) the
Borrower or any Material Subsidiary may participate in a consolidation with any
other Person; provided that (i) no Default is continuing, (ii) any such
consolidation would not cause a Default hereunder, (iii) if the Borrower
consolidates with any Person, the Borrower shall be the surviving Person, (iv)
if any Material Subsidiary consolidates with any Person (other than the Borrower
or a Material Subsidiary) and such Material Subsidiary is not the surviving
Person, such surviving Person shall expressly assume in writing (in form and
substance satisfactory to the Administrative Agent) all obligations of such
Material Subsidiary under the Loan Documents and (v) the Borrowing Base will be
redetermined using the procedures for an Interim Redetermination in accordance
with Section 2.07; and

     

    (b) any
Material Subsidiary may participate in a consolidation with the Borrower
(provided that the Borrower shall be the continuing or surviving corporation) or
any other Material Subsidiary and if one of such Material Subsidiaries is a
Wholly-Owned Subsidiary, then the surviving Person shall be a Wholly-Owned
Subsidiary.

     

    Section
9.13 Sale of
Properties.  The
Borrower will not, and will not permit any Material Subsidiary to, sell, assign,
farm-out, convey or otherwise transfer any Property except for (a) the sale of
Hydrocarbons in the ordinary course of business; (b) farmouts of undeveloped
acreage and assignments in connection with such farmouts; (c) the sale or
transfer of equipment that is no longer necessary for the business of the
Borrower or such Material Subsidiary or is replaced by equipment of at least
comparable value and use; (d) the sale, transfer or other disposition of Equity
Interests in non-Material Subsidiaries; (e) sales or other dispositions of Oil
and Gas Properties or any interest therein or Material Subsidiaries owning Oil
and Gas Properties; provided that (i) if such sales or other dispositions of Oil
and Gas Properties or Material Subsidiaries owning Oil and Gas Properties
included in the most recently delivered Reserve Report during any period between
two successive Scheduled Redetermination Dates has a fair market value in excess
of $30,000,000, individually or in the aggregate, the Borrowing Base shall be
reduced, effective immediately upon such sale or disposition, by an amount equal
to the value, if any, assigned such Property in the most recently delivered
Reserve Report and (ii) if any such sale or other disposition is of a Material
Subsidiary owning Oil and Gas Properties, such sale or other disposition shall
include all the Equity Interests of such Material Subsidiary; and (f) sales and
other dispositions of Properties not regulated by Section
9.13(a) to (e) having a fair market value not to exceed $30,000,000 during
any 12-month period.

     

    Section
9.14 Environmental
Matters.  Neither
the Borrower nor any Material Subsidiary will cause or permit any of its
Property to be in violation of, or do anything or permit anything to be done
which will subject any such Property to any Remedial Work under any
Environmental Laws, assuming disclosure to the applicable Governmental Authority
of all relevant facts, conditions and circumstances, if any, pertaining to such
Property where such violations or remedial obligations could reasonably be
expected to have a Material Adverse Effect.

     

    Section
9.15 Transactions with
Affiliates.  Neither
the Borrower nor any Material Subsidiary will enter into any transaction,
including, without limitation, any purchase, sale, lease or exchange of Property
or the rendering of any service, with any Affiliate (other than the Guarantors
and Wholly-Owned Subsidiaries of the Borrower) unless such transactions are
otherwise permitted under this Agreement and are upon fair and reasonable terms
no less favorable to it than it would obtain in a comparable arm’s length
transaction with a Person not an Affiliate.

     

    Section
9.16 Subsidiaries.  The
Borrower shall not, and shall not permit any Material Subsidiary to, create or
acquire any additional Material Subsidiary or redesignate a Subsidiary as a
Material Subsidiary unless the Borrower gives written notice to the
Administrative Agent of such creation or acquisition and complies with Section 8.14(b).  The Borrower shall not, and
shall not permit any Material Subsidiary to, sell, assign or otherwise dispose
of any Equity Interests in any Material Subsidiary except in compliance with Section 9.13(e).

     

    Section
9.17 Negative Pledge Agreements;
Dividend Restrictions.  Neither
the Borrower nor any Material Subsidiary will create, incur, assume or suffer to
exist any contract, agreement or understanding (other than this Agreement, the
Security Instruments or Capital Leases creating Liens permitted by Section 9.03(c)) which in any way prohibits or restricts
the granting, conveying, creation or imposition of any Lien on any of its
Property in favor of the Administrative Agent and the Lenders or restricts any
Material Subsidiary from paying dividends or making distributions to the
Borrower or any Guarantor, or which requires the consent of or notice to other
Persons in connection therewith.

     

    Section
9.18 Gas Imbalances, Take-or-Pay
or Other Prepayments.  The
Borrower will not allow (on a net basis) gas imbalances, take-or-pay or other
prepayments with respect to the Oil and Gas Properties of the Borrower or any
Material Subsidiary that would require the Borrower or such Material Subsidiary
to deliver Hydrocarbons at some future time without then or thereafter receiving
full payment therefor to exceed three million mcf of gas (on an mcfe equivalent
basis) in the aggregate.

     

    Section
9.19 Swap
Agreements.  Neither
the Borrower nor any Material Subsidiary will enter into any Swap Agreements
with any Person other than (a) Swap Agreements in respect of commodities (i)
with an Approved Counterparty and (ii) the notional volumes for which (when
aggregated with other commodity Swap Agreements then in effect) do not exceed,
as of the date such Swap Agreement is executed, 75% of the reasonably
anticipated projected production from proved, developed, producing Oil and Gas
Properties for each month during the period during which such Swap Agreement is
in effect, (b) Swap Agreements effectively converting interest rates from
floating to fixed (i) with an Approved Counterparty and (ii) the notional
amounts of which (when aggregated with other interest rate Swap Agreements then
in effect effectively converting interest rates from floating to fixed) do not
exceed 100% of principal amount of the Borrower’s floating rate Debt in respect
of borrowed money, (c) Swap Agreements effectively converting interest rates
from fixed to floating (i) with an Approved Counterparty and (ii) the notional
amounts of which (when aggregated with other interest rate Swap Agreements then
in effect effectively converting interest rates from fixed to floating) do not
exceed 100% of principal amount of the Borrower's fixed rate Debt in respect of
borrowed money (including, without limitation, the Borrower's Senior Convertible
Notes), and (d) Swap Agreements in respect of currencies (i) with an Approved
Counterparty, (ii) such transactions are to hedge actual or expected
fluctuations in currencies and are not for speculative purposes and (iii) such
transactions do not involve termination or expiry dates longer than six (6)
months after the trade date in respect thereof.  In no event shall any
Swap Agreement contain any requirement, agreement or covenant for the Borrower
or any Material Subsidiary to post collateral or margin to secure their
obligations under such Swap Agreement or to cover market exposures other than
usual and customary requirements to deliver letters of credit or post cash
collateral.

     

    Section
9.20 Preservation of Material
Agreements.  Except
for acts which could not reasonably be expected to have a Material Adverse
Effect or which are taken in the ordinary course of business, neither the
Borrower nor any Material Subsidiary, as the case may be, will agree to any
change, modification or amendment to or waiver of any of the terms or provisions
of any of the Material Agreements.  Neither the Borrower nor any
Material Subsidiary, as the case may be, will take any action or permit any
action to be taken by others which will release any Person from its obligations
or liabilities under any of the Material Agreements.

     

    Section
9.21 Release of
Liens.  The
Borrower shall be entitled to cause Mortgaged Properties having an aggregate
fair market value not to exceed $30,000,000 to be released from the Liens
created by and existing under the Security Instruments without the consent of
the Lenders; provided that (a) no Event of Default shall have occurred which is
continuing, (b) only one such release may be made between Schedule
Redeterminations of the Borrowing Base, (c) following any such release, the
total value of the remaining Mortgaged Property shall be sufficient to support
the Aggregate Commitment in the sole opinion of the Administrative Agent, and
(d) following any such release, the Administrative Agent shall adjust the then
current Borrowing Base to take into account the release of such Mortgaged
Properties and any mandatory prepayment required as a result thereof shall be
made at the time of such release.

     

    ARTICLE
X

     

    Events
of Default; Remedies

     

    Section
10.01 Events of
Default.  One
or more of the following events shall constitute an “Event of
Default”:

     

    (a) the
Borrower shall fail to pay any principal of any Loan or any reimbursement
obligation in respect of any LC Disbursement when and as the same shall become
due and payable, whether at the due date thereof or at a date fixed for
prepayment thereof or otherwise.

     

    (b) the
Borrower shall fail to pay any interest on any Loan or any fee or any other
amount (other than an amount referred to in Section
10.01(a)) payable under any Loan Document, when and as the same shall become
due and payable, and such failure shall continue unremedied for a period of
three Business Days.

     

    (c) any
representation or warranty made or deemed made by or on behalf of the Borrower
or any Material Subsidiary in or in connection with any Loan Document or any
amendment or modification of any Loan Document or waiver under such Loan
Document, or in any report, certificate, financial statement or other document
furnished pursuant to or in connection with any Loan Document or any amendment
or modification thereof or waiver thereunder, shall prove to have been incorrect
in any respect material to the Borrower’s creditworthiness or to the rights or
interests of the Lenders when made or deemed made.

     

    (d) the
Borrower or any Material Subsidiary shall fail to observe or perform any
covenant, condition or agreement contained in Section
8.03 or in ARTICLE IX.

     

    (e) the
Borrower or any Material Subsidiary shall fail to observe or perform any
covenant, condition or agreement contained in this Agreement (other than those
specified in Section 10.01(a), Section 10.01(b) or Section
10.01(d)) or any other Loan Document, and such failure shall continue
unremedied for a period of 30 days after the earlier to occur of A. notice
thereof from the Administrative Agent to the Borrower (which notice will be
given at the request of any Lender) or B. a Responsible Officer of the Borrower
or such Material Subsidiary otherwise becoming aware of such
default.

     

    (f) the
Borrower or any Material Subsidiary shall fail to make any payment (whether of
principal or interest and regardless of amount) in respect of any Material
Indebtedness, when and as the same shall become due and payable (subject to
applicable grace periods), unless such payment is being contested in good faith
and by proper proceedings and against which adequate reserves are being
maintained.

     

    (g) any event
or condition occurs that results in any Material Indebtedness becoming due prior
to its scheduled maturity or that enables or permits (with or without the giving
of notice, the lapse of time or both) the holder or holders of any Material
Indebtedness or any trustee or agent on its or their behalf to cause any
Material Indebtedness to become due, or to require the Redemption thereof or any
offer to Redeem to be made in respect thereof, prior to its scheduled maturity
or require the Borrower or any Material Subsidiary to make an offer in respect
thereof; provided, however, early termination of a Swap Agreement (that is
Material Indebtedness) due solely to an ISDA “Termination Event” is not an Event
of Default hereunder.

     

    (h) an
involuntary proceeding shall be commenced or an involuntary petition shall be
filed seeking (i) liquidation, reorganization or other relief in respect of the
Borrower or any Material Subsidiary or its debts, or of a substantial part of
its assets, under any  Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect or (ii) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Borrower or any Material Subsidiary or for a
substantial part of its assets, and, in any such case, such proceeding or
petition shall continue undismissed for 30 days or an order or decree approving
or ordering any of the foregoing shall be entered.

     

    (i) the
Borrower or any Material Subsidiary shall (i) voluntarily commence any
proceeding or file any petition seeking liquidation, reorganization or other
relief under any Federal, state or foreign bankruptcy, insolvency, receivership
or similar law now or hereafter in effect, (ii) consent to the institution of,
or fail to contest in a timely and appropriate manner, any proceeding or
petition described in Section 10.01(h), (iii) apply
for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Borrower or any Material
Subsidiary or for a substantial part of its assets, (iv) file an answer
admitting the material allegations of a petition filed against it in any such
proceeding, (v) make a general assignment for the benefit of creditors or (vi)
take any action for the purpose of effecting any of the foregoing.

     

    (j) the
Borrower or any Material Subsidiary shall become unable, admit in writing its
inability or fail generally to pay its debts as they become due.

     

    (k) one or
more judgments for the payment of money in an aggregate amount in excess of
$3,000,000
(to the extent not covered by independent third party insurance provided by
insurers of the highest claims paying rating or financial strength as to which
the insurer does not dispute coverage and is not subject to an insolvency
proceeding) shall be rendered against the Borrower, any Material Subsidiary or
any combination thereof and the same shall remain undischarged for a period of
30 consecutive days and for which execution shall not be effectively stayed, or
any action shall be legally taken by a judgment creditor to attach or levy upon
any assets of the Borrower or any Material Subsidiary to enforce any such
judgment.

     

    (l) the Loan
Documents after delivery thereof shall for any reason, except to the extent
permitted by the terms thereof, cease to be in full force and effect and valid,
binding and enforceable in accordance with their terms against the Borrower or a
Guarantor party thereto, or cease to create a valid and perfected Lien of the
priority required thereby on any of the collateral purported to be covered
thereby, except to the extent permitted by the terms of this Agreement, or the
Borrower or any Guarantor or any of their Affiliates shall so state in
writing.

     

    (m)  an
ERISA Event shall have occurred that, in the opinion of the Majority Lenders,
when taken together with all other ERISA Events that have occurred, could
reasonably be expected to result in a Material Adverse Effect.

     

    (n) a Change
in Control shall occur.

     

    (o) the
Borrower shall fail to pay any mandatory prepayment or provide additional
collateral as provided in Section
3.04(c)

     

    Section
10.02 Remedies.

     

    (a) In the
case of an Event of Default other than one described in Section 10.01(h), Section
10.01(i) or Section 10.01(j), at any time
thereafter during the continuance of such Event of Default, the Administrative
Agent may, and at the request of the Majority Lenders, shall, by notice to the
Borrower, take either or both of the following actions, at the same or different
times:  (i) terminate the Commitments, and thereupon the Commitments
shall terminate immediately, and (ii) declare the Notes and the Loans then
outstanding to be due and payable in whole (or in part, in which case any
principal not so declared to be due and payable may thereafter be declared to be
due and payable), and thereupon the principal of the Loans so declared to be due
and payable, together with accrued interest thereon and all fees and other
obligations of the Borrower and the Guarantors accrued hereunder and under the
Notes and the other Loan Documents (including, without limitation, the payment
of cash collateral to secure the LC Exposure as provided in Section 2.08(k)), shall become due and payable
immediately, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower and each Guarantor; and in case
of an Event of Default described in Section 10.01(h),
Section 10.01(i) or  Section 10.01(j), the Commitments shall automatically
terminate and the Notes and the principal of the Loans then outstanding,
together with accrued interest thereon and all fees and the other obligations of
the Borrower and the Guarantors accrued hereunder and under the Notes and the
other Loan Documents (including, without limitation, the payment of cash
collateral to secure the LC Exposure as provided in Section 2.08(k)), shall automatically become due and
payable, without presentment, demand, protest or other notice of any kind, all
of which are hereby waived by the Borrower and each Guarantor.

     

    (b) In the
case of the occurrence of an Event of Default, the Administrative Agent and the
Lenders will have all other rights and remedies available at law and
equity.

     

    (c) All
proceeds realized from the liquidation or other disposition of collateral or
otherwise received after maturity of the Notes, whether by acceleration or
otherwise, shall be applied:  first, to reimbursement of
expenses and indemnities provided for in this Agreement and the Security
Instruments; second, to
accrued interest on the Notes; third, to fees; fourth, pari passu to (i)
Indebtedness owing to a Lender or an Affiliate of a Lender under any Swap
Agreement permitted hereby and (ii) pro rata to principal outstanding on the
Notes; fifth, to any
other Indebtedness; sixth, to serve as cash
collateral to be held by the Administrative Agent to secure the LC Exposure; and
any excess shall be paid to the Borrower or as otherwise required by any
Governmental Requirement.

     

    ARTICLE
XI

     

    The
Administrative Agent

     

    Section
11.01 Appointment;
Powers.  Each
of the Lenders and the Issuing Bank hereby irrevocably appoints the
Administrative Agent as its agent and authorizes the Administrative Agent to
take such actions on its behalf and to exercise such powers as are delegated to
the Administrative Agent by the terms hereof and the other Loan Documents,
together with such actions and powers as are reasonably incidental
thereto.

     

    Section
11.02 Duties and Obligations of
Administrative Agent.  The
Administrative Agent shall not have any duties or obligations except those
expressly set forth in the Loan Documents.  Without limiting the
generality of the foregoing, (a) the Administrative Agent shall not be subject
to any fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing, (b) the Administrative Agent shall not have any duty
to take any discretionary action or exercise any discretionary powers, except as
provided in Section 11.03, and (c) except as
expressly set forth herein, the Administrative Agent shall not have any duty to
disclose, and shall not be liable for the failure to disclose, any information
relating to the Borrower or any of its Subsidiaries that is communicated to or
obtained by the bank serving as Administrative Agent or any of its Affiliates in
any capacity.  The Administrative Agent shall be deemed not to have
knowledge of any Default unless and until written notice thereof is given to the
Administrative Agent by the Borrower or a Lender, and shall not be responsible
for or have any duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with this Agreement or any other Loan
Document, (ii) the contents of any certificate, report or other document
delivered hereunder or under any other Loan Document or in connection herewith
or therewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth herein or in any other Loan
Document, (iv) the validity, enforceability, effectiveness or genuineness of
this Agreement, any other Loan Document or any other agreement, instrument or
document, (v) the satisfaction of any condition set forth in ARTICLE VI or elsewhere herein, other than to confirm
receipt of items expressly required to be delivered to the Administrative Agent,
(vi) the existence, value, perfection or priority of any collateral security or
the financial or other condition of the Borrower and its Subsidiaries or any
other obligor or guarantor, or (vii) any failure by the Borrower or any other
Person (other than itself) to perform any of its obligations hereunder or under
any other Loan Document or the performance or observance of any covenants,
agreements or other terms or conditions set forth herein or
therein.

     

    Section
11.03 Action by Administrative
Agent.  The
Administrative Agent shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated hereby that the Administrative Agent is required to
exercise in writing as directed by the Majority Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 12.02) and in all cases the
Administrative Agent shall be fully justified in failing or refusing to act
hereunder or under any other Loan Documents unless it shall (a) receive written
instructions from the Majority Lenders or the Lenders, as applicable, (or such
other number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 12.02)
specifying the action to be taken and (b) be indemnified to its satisfaction by
the Lenders against any and all liability and expenses which may be incurred by
it by reason of taking or continuing to take any such action.  The
instructions as aforesaid and any action taken or failure to act pursuant
thereto by the Administrative Agent shall be binding on all of the
Lenders.  If a Default has occurred and is continuing, then the
Administrative Agent shall take such action with respect to such Default as
shall be directed by the requisite Lenders in the written instructions (with
indemnities) described in this Section 11.03,
provided that, unless and until the Administrative Agent shall have received
such directions, the Administrative Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default as it shall deem advisable in the best interests of the
Lenders.  In no event, however, shall the Administrative Agent be
required to take any action which exposes the Administrative Agent to personal
liability or which is contrary to this Agreement, the Loan Documents or
applicable law.  The Administrative Agent shall not be liable for any
action taken or not taken by it with the consent or at the request of the
Majority Lenders or the Lenders (or such other number or percentage of the
Lenders as shall be necessary under the circumstances as provided in Section 12.02), and otherwise shall not be liable for
any action taken or not taken by it hereunder or under any other Loan Document
or under any other document or instrument referred to or provided for herein or
therein or in connection herewith or therewith INCLUDING ITS OWN ORDINARY
NEGLIGENCE, except for its own gross negligence or willful
misconduct.

     

    Section
11.04 Reliance by Administrative
Agent.  The
Administrative Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person.  The
Administrative Agent also may rely upon any statement made to it orally or by
telephone and believed by it to be made by the proper Person, and shall not
incur any liability for relying thereon and each of the Borrower, the Lenders
and the Issuing Bank hereby waives the right to dispute the Administrative
Agent’s record of such statement, except in the case of gross negligence or
willful misconduct by the Administrative Agent.  The Administrative
Agent may consult with legal counsel (who may be counsel for the Borrower),
independent accountants and other experts selected by it, and shall not be
liable for any action taken or not taken by it in accordance with the advice of
any such counsel, accountants or experts.  The Administrative Agent
may deem and treat the payee of any Note as the holder thereof for all purposes
hereof unless and until a written notice of the assignment or transfer thereof
permitted hereunder shall have been filed with the Administrative
Agent.

     

    Section
11.05 Subagents.  The
Administrative Agent may perform any and all its duties and exercise its rights
and powers by or through any one or more sub-agents appointed by the
Administrative Agent.  The Administrative Agent and any such sub-agent
may perform any and all its duties and exercise its rights and powers through
their respective Related Parties.  The exculpatory provisions of the
preceding Sections of this ARTICLE XI shall apply to
any such sub-agent and to the Related Parties of the Administrative Agent and
any such sub-agent, and shall apply to their respective activities in connection
with the syndication of the credit facilities provided for herein as well as
activities as Administrative Agent.

     

    Section
11.06 Resignation or Removal of
Administrative Agent.  Subject
to the appointment and acceptance of a successor Administrative Agent as
provided in this Section 11.06, the Administrative
Agent may resign at any time by notifying the Lenders, the Issuing Bank and the
Borrower, and the Administrative Agent may be removed at any time with or
without cause by the Majority Lenders.  Upon any such resignation or
removal, the Majority Lenders shall have the right, in consultation with the
Borrower, to appoint a successor.  If no successor shall have been so
appointed by the Majority Lenders and shall have accepted such appointment
within 30 days after the retiring Administrative Agent gives notice of its
resignation or removal of the retiring Administrative Agent, then the retiring
Administrative Agent may, on behalf of the Lenders and the Issuing Bank, appoint
a successor Administrative Agent which shall be a bank with an office in New
York, New York, or an Affiliate of any such bank.  Upon the acceptance
of its appointment as Administrative Agent hereunder by a successor, such
successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder.  The fees payable by the Borrower to a successor
Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Borrower and such
successor.  After the Administrative Agent’s resignation hereunder,
the provisions of this ARTICLE XI and Section 12.03 shall continue in effect for the benefit
of such retiring Administrative Agent, its sub-agents and their respective
Related Parties in respect of any actions taken or omitted to be taken by any of
them while it was acting as Administrative Agent.

     

    Section
11.07 Administrative Agent
as  Lenders.  Wachovia,
serving as Administrative Agent hereunder shall have the same rights and powers
in its capacity as a Lender as any other Lender and may exercise the same as
though it were not Administrative Agent, and such bank and its Affiliates may
accept deposits from, lend money to and generally engage in any kind of business
with the Borrower or any Subsidiary or other Affiliate thereof as if it were not
Administrative Agent hereunder.

     

    Section
11.08 No
Reliance.  Each
Lender acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and each other Loan Document to which it
is a party.  Each Lender also acknowledges that it will, independently
and without reliance upon the Administrative Agent or any other Lender and based
on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any other Loan Document, any related
agreement or any document furnished hereunder or thereunder.  The
Administrative Agent shall not be required to keep itself informed as to the
performance or observance by the Borrower or any of its Subsidiaries of this
Agreement, the Loan Documents or any other document referred to or provided for
herein or to inspect the Properties or books of the Borrower or its
Subsidiaries.  Except for notices, reports and other documents and
information expressly required to be furnished to the Lenders by the
Administrative Agent hereunder or Arranger shall have any duty or responsibility
to provide any Lender with any credit or other information concerning the
affairs, financial condition or business of the Borrower (or any of its
Affiliates) which may come into the possession of the Administrative Agent or
any of its Affiliates.  In this regard, each Lender acknowledges that
Vinson & Elkins L.L.P. is acting in this transaction as special counsel to
the Administrative Agent only, except to the extent otherwise expressly stated
in any legal opinion or any Loan Document.  Each other party hereto
will consult with its own legal counsel to the extent that it deems necessary in
connection with the Loan Documents and the matters contemplated
therein.

     

    Section
11.09 Authority of Administrative
Agent to Release Collateral and Liens.  Each
Lender and the Issuing Bank hereby authorizes the Administrative Agent to
release any collateral that is permitted to be sold or released pursuant to the
terms of the Loan Documents.  Each Lender and the Issuing Bank hereby
authorizes the Administrative Agent to execute and deliver to the Borrower, at
the Borrower’s sole cost and expense, any and all releases of Liens, termination
statements, assignments or other documents reasonably requested by the Borrower
in connection with any sale or other disposition of Property to the extent such
sale or other disposition is permitted by the terms of Section 9.13 or is otherwise authorized by the terms of
the Loan Documents.

     

    Section
11.10 Syndication Agent and
Co-Documentation Agents.  The
Lenders identified in this Agreement as Syndication Agent and as
Co-Documentation Agents shall not have any right, power, obligation, liability,
responsibility or duty under this Agreement other than those applicable to all
Lenders as such.  Without limiting the foregoing, the Syndication
Agent and the Co-Documentation Agents shall not have or be deemed to have a
fiduciary relationship with any Lender.

     

    ARTICLE
XII

     

    Miscellaneous

     

    Section
12.01 Notices.

     

    (a) Except in
the case of notices and other communications expressly permitted to be given by
telephone (and subject to Section 12.01(b)), all
notices and other communications provided for herein shall be in writing and
shall be delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:

     

    (i)  if
to the Borrower, to it at 1776 Lincoln Street, Suite
700, Denver, Colorado 80203, Attention of Matthew J. Purchase (Telecopy
No. 303/861-0934);

     

    (ii) if to the
Administrative Agent, to it at 1525 W. WT Harris Blvd., Charlotte, North
Carolina 28262, Attention of Syndication Agency Services (Telecopy No.
704/590-3481), with a copy to Wachovia Securities, at 301 South College Street,
15th
Floor NC 5562, Charlotte, North Carolina 28288, Attention of Leanne Phillips
(Telecopy No. 704/383-6647);

     

    (iii) if to the
Issuing Bank, to it at 1525 W. WT Harris Blvd., Charlotte, North Carolina 28262,
Attention of Syndication Agency Services (Telecopy No. 704/590-3481);
and

     

    (iv) if to any
other Lender, to it at its address (or telecopy number) set forth in its
Administrative Questionnaire.

     

    (b) Notices
and other communications to the Lenders hereunder may be delivered or furnished
by electronic communications pursuant to procedures approved by the
Administrative Agent; provided that the foregoing shall not apply to notices
pursuant to ARTICLE II, ARTICLE III, ARTICLE IV and
ARTICLE V unless otherwise agreed by the
Administrative Agent and the applicable Lender.  The Administrative
Agent or the Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may be
limited to particular notices or communications.

     

    (c) Any party
hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto.  All
notices and other communications given to any party hereto in accordance with
the provisions of this Agreement shall be deemed to have been given on the date
of receipt.

     

    Section
12.02 Waivers;
Amendments.

     

    (a) No
failure on the part of the Administrative Agent, the Issuing Bank or any Lender
to exercise and no delay in exercising, and no course of dealing with respect
to, any right, power or privilege, or any abandonment or discontinuance of steps
to enforce such right, power or privilege, under any of the Loan Documents shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege under any of the Loan Documents preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege.  The rights and remedies of the Administrative Agent, the
Issuing Bank and the Lenders hereunder and under the other Loan Documents are
cumulative and are not exclusive of any rights or remedies that they would
otherwise have.  No waiver of any provision of this Agreement or any
other Loan Document or consent to any departure by the Borrower therefrom shall
in any event be effective unless the same shall be permitted by Section 12.02(b), and then such waiver or consent shall
be effective only in the specific instance and for the purpose for which
given.  Without limiting the generality of the foregoing, the making
of a Loan or issuance of a Letter of Credit shall not be construed as a waiver
of any Default, regardless of whether the Administrative Agent, any Lender or
the Issuing Bank may have had notice or knowledge of such Default at the
time.

     

    (b) Neither
this Agreement nor any provision hereof nor any Security Instrument nor any
provision thereof may be waived, amended or modified except pursuant to an
agreement or agreements in writing entered into by the Borrower and the Majority
Lenders or by the Borrower and the Administrative Agent with the consent of the
Majority Lenders; provided that no such agreement shall (i) increase the
Commitment or the Maximum Credit Amount of any Lender without the written
consent of such Lender, (ii) increase the Borrowing Base or modify Section 2.07, without the written consent of all of the
Lenders, (iii) reduce the principal amount of any Loan or LC Disbursement or
reduce the rate of interest thereon, or reduce any fees payable hereunder, or
reduce any other Indebtedness hereunder or under any other Loan Document,
without the written consent of each Lender affected thereby, (iv) postpone the
scheduled date of payment of the principal amount of any Loan or LC
Disbursement, or any interest thereon, or any fees payable hereunder, or any
other Indebtedness hereunder or under any other Loan Document, or reduce the
amount of, waive or excuse any such payment, or postpone or extend the
Termination Date without the written consent of each Lender affected thereby,
(v) change Section 4.01(b) or Section 4.01(c) in a manner that would alter the pro
rata sharing of payments required thereby, without the written consent of each
Lender, (vi) change the definition of the term “Material Subsidiary”, without
the written consent of each Lender, (vii) release any Guarantor (except as set
forth in the Guaranty Agreement), release all or substantially all of the
collateral, or reduce the percentage set forth in Section
8.14 to less than 70%, without the written consent of each Lender, or (viii)
change any of the provisions of this Section
12.02(b) or the definition of “Majority Lenders” or any other provision
hereof specifying the number or percentage of Lenders required to waive, amend
or modify any rights hereunder or under any other Loan Documents or make any
determination or grant any consent hereunder or any other Loan Documents,
without the written consent of each Lender; provided further that no such
agreement shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent or the Issuing Bank hereunder or under any other Loan
Document without the prior written consent of the Administrative Agent or the
Issuing Bank, as the case may be.  Notwithstanding the foregoing, any
supplement to Schedule 7.15 (Subsidiaries) shall be effective simply by
delivering to the Administrative Agent a supplemental schedule clearly marked as
such and, upon receipt, the Administrative Agent will promptly deliver a copy
thereof to the Lenders.

     

    Section
12.03 Expenses, Indemnity; Damage
Waiver.

     

    (a) The
Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent and its Affiliates, including, without limitation, the
reasonable fees, charges and disbursements of counsel and other outside
consultants for the Administrative Agent, the reasonable travel, photocopy,
mailing, courier, telephone and other similar expenses, and the cost of
environmental audits and surveys and appraisals, in connection with the
syndication of the credit facilities provided for herein, the preparation,
negotiation, execution, delivery and administration (both before and after the
execution hereof and including advice of counsel to the Administrative Agent as
to the rights and duties of the Administrative Agent and the Lenders with
respect thereto) of this Agreement and the other Loan Documents and any
amendments, modifications or waivers of or consents related to the provisions
hereof or thereof (whether or not the transactions contemplated hereby or
thereby shall be consummated), (ii) all costs, expenses, Taxes, assessments and
other charges incurred by the Administrative Agent or any Lender in connection
with any filing, registration, recording or perfection of any security interest
contemplated by this Agreement or any Security Instrument or any other document
referred to therein, (iii) all reasonable out-of-pocket expenses incurred by the
Issuing Bank in connection with the issuance, amendment, renewal or extension of
any Letter of Credit or any demand for payment thereunder, (iv) all
out-of-pocket expenses incurred by the Administrative Agent, the Issuing Bank or
any Lender, including the reasonable fees, charges and disbursements of any
counsel for the Administrative Agent, the Issuing Bank or any Lender, in
connection with the enforcement or protection of its rights in connection with
this Agreement or any other Loan Document, including its rights under this Section 12.03, or in connection with the Loans made or
Letters of Credit issued hereunder, including, without limitation, all such
out-of-pocket expenses incurred during  any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit.

     

    (b) THE
BORROWER SHALL INDEMNIFY THE ADMINISTRATIVE AGENT, THE ISSUING BANK AND EACH
LENDER, AND EACH RELATED PARTY OF ANY OF THE FOREGOING PERSONS (EACH SUCH PERSON
BEING CALLED AN “INDEMNITEE”) AGAINST,
AND HOLD EACH INDEMNITEE HARMLESS FROM, ANY AND ALL LOSSES, CLAIMS, DAMAGES,
LIABILITIES AND RELATED EXPENSES, INCLUDING THE REASONABLE FEES, CHARGES AND
DISBURSEMENTS OF ANY COUNSEL FOR ANY INDEMNITEE, INCURRED BY OR ASSERTED AGAINST
ANY INDEMNITEE DIRECTLY ARISING OUT OF, DIRECTLY IN CONNECTION WITH, OR DIRECTLY
AS A RESULT OF (i) THE EXECUTION OR DELIVERY OF THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT OR ANY AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY OR THEREBY, THE
PERFORMANCE BY THE PARTIES HERETO OR THE PARTIES TO ANY OTHER LOAN DOCUMENT OF
THEIR RESPECTIVE OBLIGATIONS HEREUNDER OR THEREUNDER OR THE CONSUMMATION OF THE
TRANSACTIONS CONTEMPLATED HEREBY OR BY ANY OTHER LOAN DOCUMENT, (ii) THE FAILURE
OF THE BORROWER OR ANY RESTRICTED SUBSIDIARY TO COMPLY WITH THE TERMS OF ANY
LOAN DOCUMENT, INCLUDING THIS AGREEMENT, OR WITH ANY GOVERNMENTAL REQUIREMENT,
(iii) ANY INACCURACY OF ANY REPRESENTATION OR ANY BREACH OF ANY WARRANTY OR
COVENANT OF THE BORROWER OR ANY GUARANTOR SET FORTH IN ANY OF THE LOAN DOCUMENTS
OR ANY INSTRUMENTS, DOCUMENTS OR CERTIFICATIONS DELIVERED IN CONNECTION
THEREWITH, (iv) ANY LOAN OR LETTER OF CREDIT OR THE USE OF THE PROCEEDS
THEREFROM, INCLUDING, WITHOUT LIMITATION, A. ANY REFUSAL BY THE ISSUING BANK TO
HONOR A DEMAND FOR PAYMENT UNDER A LETTER OF CREDIT IF THE DOCUMENTS PRESENTED
IN CONNECTION WITH SUCH DEMAND DO NOT STRICTLY COMPLY WITH THE TERMS OF SUCH
LETTER OF CREDIT, OR B. THE PAYMENT OF A DRAWING UNDER ANY LETTER OF CREDIT
NOTWITHSTANDING THE NON-COMPLIANCE, NON-DELIVERY OR OTHER IMPROPER PRESENTATION
OF THE DOCUMENTS PRESENTED IN CONNECTION THEREWITH, (v) ANY OTHER ASPECT OF THE
LOAN DOCUMENTS, (vi) THE OPERATIONS OF THE BUSINESS OF THE BORROWER AND ITS
SUBSIDIARIES BY THE BORROWER AND ITS SUBSIDIARIES, (vii) ANY ASSERTION THAT THE
LENDERS WERE NOT ENTITLED TO RECEIVE THE PROCEEDS RECEIVED PURSUANT TO THE
SECURITY INSTRUMENTS, (viii) ANY ENVIRONMENTAL LAW APPLICABLE TO THE BORROWER OR
ANY SUBSIDIARY OR ANY OF THEIR PROPERTIES, INCLUDING WITHOUT LIMITATION, THE
PRESENCE, GENERATION, STORAGE, RELEASE, THREATENED RELEASE, USE, TRANSPORT,
DISPOSAL, ARRANGEMENT OF DISPOSAL OR TREATMENT OF OIL, OIL AND GAS WASTES, SOLID
WASTES OR HAZARDOUS SUBSTANCES ON ANY OF THEIR PROPERTIES, (ix) THE BREACH OR
NON-COMPLIANCE BY THE BORROWER OR ANY SUBSIDIARY WITH ANY ENVIRONMENTAL LAW
APPLICABLE TO THE BORROWER OR ANY SUBSIDIARY, (x) THE PAST OWNERSHIP BY THE
BORROWER OR ANY SUBSIDIARY OF ANY OF THEIR PROPERTIES OR PAST ACTIVITY ON ANY OF
THEIR PROPERTIES WHICH, THOUGH LAWFUL AND FULLY PERMISSIBLE AT THE TIME, COULD
RESULT IN PRESENT LIABILITY, (xi) THE PRESENCE, USE, RELEASE, STORAGE,
TREATMENT, DISPOSAL, GENERATION, THREATENED RELEASE, TRANSPORT, ARRANGEMENT FOR
TRANSPORT OR ARRANGEMENT FOR DISPOSAL OF OIL, OIL AND GAS WASTES, SOLID WASTES
OR HAZARDOUS SUBSTANCES ON OR AT ANY OF THE PROPERTIES OWNED OR OPERATED BY THE
BORROWER OR ANY SUBSIDIARY OR ANY ACTUAL OR ALLEGED PRESENCE OR RELEASE OF
HAZARDOUS MATERIALS ON OR FROM ANY PROPERTY OWNED OR OPERATED BY THE BORROWER OR
ANY OF ITS SUBSIDIARIES, (xii) ANY ENVIRONMENTAL LIABILITY RELATED IN ANY WAY TO
THE BORROWER OR ANY OF ITS SUBSIDIARIES, OR (xiii) ANY OTHER ENVIRONMENTAL,
HEALTH OR SAFETY CONDITION IN CONNECTION WITH THE LOAN DOCUMENTS, OR (xiv) ANY
ACTUAL OR PROSPECTIVE CLAIM, LITIGATION, INVESTIGATION OR PROCEEDING RELATING TO
ANY OF THE FOREGOING, WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY AND
REGARDLESS OF WHETHER ANY INDEMNITEE IS A PARTY THERETO, AND SUCH INDEMNITY
SHALL EXTEND TO EACH INDEMNITEE NOTWITHSTANDING THE SOLE OR CONCURRENT
NEGLIGENCE OF EVERY KIND OR CHARACTER WHATSOEVER, WHETHER ACTIVE OR PASSIVE,
WHETHER AN AFFIRMATIVE ACT OR AN OMISSION, INCLUDING WITHOUT LIMITATION, ALL
TYPES OF NEGLIGENT CONDUCT IDENTIFIED IN THE RESTATEMENT (SECOND) OF TORTS OF
ONE OR MORE OF THE INDEMNITEES OR BY REASON OF STRICT LIABILITY IMPOSED WITHOUT
FAULT ON ANY ONE OR MORE OF THE INDEMNITEES; PROVIDED THAT SUCH INDEMNITY SHALL
NOT, AS TO ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH LOSSES, CLAIMS,
DAMAGES, LIABILITIES OR RELATED EXPENSES ARE DETERMINED BY A COURT OF COMPETENT
JURISDICTION BY FINAL AND NONAPPEALABLE JUDGMENT TO HAVE RESULTED FROM THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNITEE.

     

    (c) To the
extent that the Borrower fails to pay any amount required to be paid by it to
the Administrative Agent or the Issuing Bank under Section 12.03(a) or (b),
each Lender severally agrees to pay to the Administrative Agent or the Issuing
Bank, as the case may be, such Lender’s Applicable Percentage (determined as of
the time that the applicable unreimbursed expense or indemnity payment is
sought) of such unpaid amount; provided that the unreimbursed expense or
indemnified loss, claim, damage, liability or related expense, as the case may
be, was incurred by or asserted against the Administrative Agent or the Issuing
Bank in its capacity as such.

     

    (d) To the
extent permitted by applicable law, the Borrower shall not assert, and hereby
waives, any claim against any Indemnitee, on any theory of liability, for
special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) arising out of, in connection with, or as a result of, this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby or thereby, the Transactions, any Loan or Letter of Credit or the use of
the proceeds thereof.

     

    (e) All
amounts due under this Section 12.03 shall be payable
promptly after written demand therefor.

     

    Section
12.04 Successors and
Assigns.

     

    (a) The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted hereby
(including any Affiliate of the Issuing Bank that issues any Letter of Credit),
except that (i) the Borrower may not assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of each Lender
(and any attempted assignment or transfer by the Borrower without such consent
shall be null and void) and (ii) no Lender may assign or otherwise transfer its
rights or obligations hereunder except in accordance with this Section 12.04.  Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby
(including any Affiliate of the Issuing Bank that issues any Letter of Credit),
Participants (to the extent provided in Section
12.04(c)) and, to the extent expressly contemplated hereby, the Related
Parties of each of the Administrative Agent, the Issuing Bank and the Lenders)
any legal or equitable right, remedy or claim under or by reason of this
Agreement.

     

    (b) (i)  Subject
to the conditions set forth in Section 12.04(b)(ii),
any Lender may assign to one or more assignees all or a portion of its rights
and obligations under this Agreement (including all or a portion of its
Commitment and the Loans at the time owing to it) with the prior written consent
(such consent not to be unreasonably withheld) of:

     

    A. the
Borrower, provided that no consent of the Borrower shall be required for an
assignment to a Lender, an Affiliate of a Lender, an Approved Fund (as defined
below) or, if an Event of Default has occurred and is continuing, any other
assignee; and

     

    B. the
Administrative Agent, provided that no consent of the Administrative Agent shall
be required for an assignment to an assignee that is a Lender immediately prior
to giving effect to such assignment.

     

    (ii) Assignments
shall be subject to the following additional conditions:

     

    A. except in
the case of an assignment to a Lender or an Affiliate of a Lender or an
assignment of the entire remaining amount of the assigning Lender’s Commitment,
the amount of the Commitment of the assigning Lender subject to each such
assignment (determined as of the date the Assignment and Assumption with respect
to such assignment is delivered to the Administrative Agent) shall not be less
than $5,000,000 unless each of the Borrower and the Administrative Agent
otherwise consent, provided that no such consent of the Borrower shall be
required if an Event of Default has occurred and is continuing;

     

    B. each
partial assignment shall be made as an assignment of a proportionate part of all
the assigning Lender’s rights and obligations under this Agreement;

     

    C. the
parties to each assignment shall execute and deliver to the Administrative Agent
an Assignment and Assumption, together with a processing and recordation fee of
$3,500;

     

    D. the
assignee, if it shall not be a Lender, shall deliver to the Administrative Agent
an Administrative Questionnaire; and

     

    E. in the
case of an assignment to a CLO, the assigning Lender shall retain the sole right
to approve any amendment, modification or waiver of any provision of this
Agreement, provided that the Assignment and Assumption between such Lender and
such CLO may provide that such Lender will not, without the consent of such CLO,
agree to any amendment, modification or waiver described in the first proviso to
Section 12.02 that affects such CLO.

     

    (iii) Subject
to Section 12.04(b)(iv) and the acceptance and
recording thereof, from and after the effective date specified in each
Assignment and Assumption the assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and Assumption, have
the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption covering all of the assigning
Lender’s rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of Section 5.01, Section 5.02,
Section 5.03 and Section
12.03).  Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section 12.04 shall be treated for purposes of this
Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with Section
12.04(c).

     

    (iv) The
Administrative Agent, acting for this purpose as an agent of the Borrower, shall
maintain at one of its offices a copy of each Assignment and Assumption
delivered to it and a register for the recordation of the names and addresses of
the Lenders, and the Maximum Credit Amount of, and principal amount of the Loans
and LC Disbursements owing to, each Lender pursuant to the terms hereof from
time to time (the “Register”).  The
entries in the Register shall be conclusive, and the Borrower, the
Administrative Agent, the Issuing Bank and the Lenders may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary.  The Register shall be available for inspection by the
Borrower, the Issuing Bank and any Lender, at any reasonable time and from time
to time upon reasonable prior notice.  In connection with any changes
to the Register, if necessary, the Administrative Agent will reflect the
revisions on Annex I and forward a copy of such revised Annex I to the Borrower,
the Issuing Bank and each Lender.

     

    (v) Upon its
receipt of a duly completed Assignment and Assumption executed by an assigning
Lender and an assignee, the assignee’s completed Administrative Questionnaire
(unless the assignee shall already be a Lender hereunder), the processing and
recordation fee referred to in Section 12.04(b) and
any written consent to such assignment required by Section 12.04(b), the Administrative Agent shall accept
such Assignment and Assumption and record the information contained therein in
the Register.  No assignment shall be effective for purposes of this
Agreement unless it has been recorded in the Register as provided in this Section 12.04(b).

     

    (c) (i)           Any
Lender may, without the consent of the Borrower, the Administrative Agent or the
Issuing Bank, sell participations to one or more banks or other entities (a
“Participant”)
in all or a portion of such Lender’s rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it);
provided that (A) such Lender’s obligations under this Agreement shall
remain unchanged, (B) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations and (C) the
Borrower, the Administrative Agent, the Issuing Bank and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender’s rights and obligations under this Agreement.  Any agreement
or instrument pursuant to which a Lender sells such a participation shall
provide that such Lender shall retain the sole right to enforce this Agreement
and to approve any amendment, modification or waiver of any provision of this
Agreement; provided that such agreement or instrument may provide that such
Lender will not, without the consent of the Participant, agree to any amendment,
modification or waiver described in the proviso to Section 12.02 that affects such
Participant.  In addition such agreement must provide that the
Participant be bound by the provisions of Section
12.03.  Subject to Section
12.04(c)(ii), the Borrower agrees that each Participant shall be entitled to
the benefits of Section 5.01, Section 5.02 and Section 5.03
to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to Section
12.04(b).  To the extent permitted by law, each Participant also
shall be entitled to the benefits of Section 12.08 as
though it were a Lender, provided such Participant agrees to be subject to Section 4.01(c) as though it were a Lender.

     

    (ii)           A
Participant shall not be entitled to receive any greater payment under Section 5.01 or Section 5.03
than the applicable Lender would have been entitled to receive with respect to
the participation sold to such Participant, unless the sale of the participation
to such Participant is made with the Borrower’s prior written
consent.  A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section
5.03 unless the Borrower is notified of the participation sold to such
Participant and such Participant agrees, for the benefit of the Borrower, to
comply with Section 5.03(e) as though it were a
Lender.

     

    (d) Any
Lender may at any time pledge or assign a security interest in all or any
portion of its rights under this Agreement to secure obligations of such Lender,
including any pledge or assignment to secure obligations to a Federal Reserve
Bank, and this Section 12.04(d) shall not apply to
any such pledge or assignment of a security interest; provided that no such
pledge or assignment of a security interest shall release a Lender from any of
its obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto.

     

    Section
12.05 Survival; Revival;
Reinstatement.

     

    (a) All
covenants, agreements, representations and warranties made by the Borrower
herein and in the certificates or other instruments delivered in connection with
or pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the other parties hereto and shall survive the
execution and delivery of this Agreement and the making of any Loans and
issuance of any Letters of Credit, regardless of any investigation made by any
such other party or on its behalf and notwithstanding that the Administrative
Agent, the Issuing Bank or any Lender may have had notice or knowledge of any
Default or incorrect representation or warranty at the time any credit is
extended hereunder, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan or any fee or any other amount
payable under this Agreement is outstanding and unpaid or any Letter of Credit
is outstanding and so long as the Commitments have not expired or
terminated.  The provisions of Section
5.01, Section 5.02, Section 5.03 and Section
12.03 and ARTICLE XI shall survive and remain in
full force and effect regardless of the consummation of the transactions
contemplated hereby, the repayment of the Loans, the expiration or termination
of the Letters of Credit and the Commitments or the termination of this
Agreement, any other Loan Document or any provision hereof or
thereof.

     

    (b) To the
extent that any payments on the Indebtedness or proceeds of any collateral are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, debtor in possession, receiver or other
Person under any bankruptcy law, common law or equitable cause, then to such
extent, the Indebtedness so satisfied shall be revived and continue as if such
payment or proceeds had not been received and the Administrative Agent’s and the
Lenders’ Liens, security interests, rights, powers and remedies under this
Agreement and each Loan Document shall continue in full force and
effect.  In such event, each Loan Document shall be automatically
reinstated and the Borrower shall take such action as may be reasonably
requested by the Administrative Agent and the Lenders to effect such
reinstatement.

     

    Section
12.06 Counterparts; Integration;
Effectiveness.

     

    (a) This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract.

     

    (b) This
Agreement, the other Loan Documents and any separate letter agreements with
respect to fees payable to the Administrative Agent constitute the entire
contract among the parties relating to the subject matter hereof and thereof and
supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof and thereof.  This Agreement and
the other Loan Documents represent the final agreement among the parties hereto
and thereto and may not be contradicted by evidence of prior, contemporaneous or
subsequent oral agreements of the parties.  There are no unwritten
oral agreements between the parties.

     

    (c) Except as
provided in Section 6.01, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof which, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns.  Delivery of an executed
counterpart of a signature page of this Agreement by telecopy shall be effective
as delivery of a manually executed counterpart of this Agreement.

     

    Section
12.07 Severability.  Any
provision of this Agreement or any other Loan Document held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof or thereof; and the invalidity of a particular provision in a
particular jurisdiction shall not invalidate such provision in any other
jurisdiction.

     

    Section
12.08 Right of
Setoff.  If
an Event of Default shall have occurred and be continuing, each Lender and each
of its Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other obligations (of whatsoever kind, including, without limitations
obligations under Swap Agreements) at any time owing by such Lender or Affiliate
to or for the credit or the account of the Borrower or any Material Subsidiary
against any of and all the obligations of the Borrower or any Material
Subsidiary owed to such Lender now or hereafter existing under this Agreement or
any other Loan Document, irrespective of whether or not such Lender shall have
made any demand under this Agreement or any other Loan Document and although
such obligations may be unmatured.  The rights of each Lender under
this Section 12.08 are in addition to other rights
and remedies (including other rights of setoff) which such Lender or its
Affiliates may have.

     

    Section
12.09 GOVERNING LAW;
JURISDICTION;
CONSENT TO SERVICE OF PROCESS.

     

    (a) THIS
AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF TEXAS EXCEPT TO THE EXTENT THAT UNITED STATES FEDERAL
LAW PERMITS ANY LENDER TO CONTRACT FOR, CHARGE, RECEIVE, RESERVE OR TAKE
INTEREST AT THE RATE ALLOWED BY THE LAWS OF THE STATE WHERE SUCH LENDER IS
LOCATED.  CHAPTER 346 OF THE TEXAS FINANCE CODE (WHICH REGULATES
CERTAIN REVOLVING CREDIT LOAN ACCOUNTS AND REVOLVING TRI-PARTY ACCOUNTS) SHALL
NOT APPLY TO THIS AGREEMENT OR THE NOTES.

     

    (b) ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THE LOAN DOCUMENTS SHALL BE BROUGHT IN THE
COURTS OF THE STATE OF TEXAS OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN
DISTRICT OF TEXAS, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PARTY
HEREBY ACCEPTS FOR ITSELF AND (TO THE EXTENT PERMITTED BY LAW) IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
COURTS.  EACH PARTY HEREBY IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE
JURISDICTIONS.  THIS SUBMISSION TO JURISDICTION IS NON-EXCLUSIVE AND
DOES NOT PRECLUDE A PARTY FROM OBTAINING JURISDICTION OVER ANOTHER PARTY IN ANY
COURT OTHERWISE HAVING JURISDICTION.

     

    (c) THE
BORROWER HEREBY IRREVOCABLY DESIGNATES, APPOINTS AND EMPOWERS AND HEREBY CONFERS
AN IRREVOCABLE SPECIAL POWER, AMPLE AND SUFFICIENT, TO CT CORPORATION SYSTEM,
WITH OFFICES ON THE DATE HEREOF AT DENVER, COLORADO AS ITS DESIGNEE, APPOINTEE
AND AGENT WITH RESPECT TO ANY SUCH ACTION OR PROCEEDING IN TEXAS TO RECEIVE,
ACCEPT AND ACKNOWLEDGE FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS PROPERTY,
SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS WHICH MAY
BE SERVED IN ANY SUCH PROCEEDING AND AGREES THAT THE FAILURE OF SUCH AGENT TO
GIVE ANY ADVICE OF ANY SUCH SERVICE OF PROCESS TO THE BORROWER SHALL NOT IMPAIR
OR AFFECT THE VALIDITY OF SUCH SERVICE OR OF ANY CLAIM BASED
THEREON.  IF FOR ANY REASON SUCH DESIGNEE, APPOINTEE AND AGENT SHALL
CEASE TO BE AVAILABLE TO ACT AS SUCH, THE BORROWER AGREES TO DESIGNATE A NEW
DESIGNEE, APPOINTEE AND AGENT IN TEXAS REASONABLY SATISFACTORY TO THE
ADMINISTRATIVE AGENT ON THE TERMS AND FOR THE PURPOSES OF THIS
PROVISION.  EACH PARTY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS
OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO
IT AT THE ADDRESS SPECIFIED IN Section 12.01 OR SUCH
OTHER ADDRESS AS IS SPECIFIED PURSUANT TO Section
12.01 (OR ITS ASSIGNMENT AND ASSUMPTION), SUCH SERVICE TO BECOME EFFECTIVE
UPON RECEIPT.  NOTHING HEREIN SHALL AFFECT THE RIGHT OF A PARTY OR ANY
HOLDER OF A NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANOTHER PARTY IN ANY
OTHER JURISDICTION.

     

    (d) EACH
PARTY HEREBY (i) IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN; (ii)
IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT
MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL, EXEMPLARY,
PUNITIVE OR CONSEQUENTIAL DAMAGES, OR DAMAGES OTHER THAN, OR IN ADDITION TO,
ACTUAL DAMAGES; (iii) CERTIFIES THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR
AGENT OF COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
OR IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVERS, AND (iv) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO
ENTER INTO THIS AGREEMENT, THE LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED
HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
CONTAINED IN THIS Section 12.09.

     

    Section
12.10 Headings.  Article
and Section headings and the Table of Contents used herein are for convenience
of reference only, are not part of this Agreement and shall not affect the
construction of, or be taken into consideration in interpreting, this
Agreement.

     

    Section
12.11 Confidentiality. 
Each of the Administrative Agent, the Issuing Bank and the Lenders agrees to
maintain the confidentiality of the Information (as defined below), except that
Information may be disclosed (a) to its and its Affiliates’ directors, officers,
employees and agents, including accountants, legal counsel and other advisors
(it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep
such Information confidential), (b) to the extent requested by any regulatory
authority, (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process, (d) to any other party to this Agreement
or any other Loan Document, (e) in connection with the exercise of any remedies
hereunder or under any other Loan Document or any suit, action or proceeding
relating to this Agreement or any other Loan Document or the enforcement of
rights hereunder or thereunder, (f) subject to an agreement containing
provisions substantially the same as those of this Section 12.11, to (i) any assignee of or Participant in,
or any prospective assignee of or Participant in, any of its rights or
obligations under this Agreement or (ii) any actual or prospective counterparty
(or its advisors) to any Swap Agreement relating to the Borrower and its
obligations, (g) with the consent of the Borrower or (h) to the extent such
Information (i) becomes publicly available other than as a result of a breach of
this Section 12.11 or (ii) becomes available to the
Administrative Agent, the Issuing Bank or any Lender on a nonconfidential basis
from a source other than the Borrower.  For the purposes of this Section 12.11, “Information” means
all information received from the Borrower or any Material Subsidiary relating
to the Borrower or any Material Subsidiary and their businesses, other than any
such information that is available to the Administrative Agent, the Issuing Bank
or any Lender on a nonconfidential basis prior to disclosure by the Borrower or
a Material Subsidiary; provided that, in the case of information received from
the Borrower or any Material Subsidiary after the date hereof, such information
is clearly identified at the time of delivery as confidential.  Any
Person required to maintain the confidentiality of Information as provided in
this Section 12.11 shall be considered to have
complied with its obligation to do so if such Person has exercised the same
degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.

     

    Section
12.12 Interest Rate
Limitation.  It
is the intention of the parties hereto that each Lender shall conform strictly
to usury laws applicable to it.  Accordingly, if the transactions
contemplated hereby would be usurious as to any Lender under laws applicable to
it (including the laws of the United States of America and the State of Texas or
any other jurisdiction whose laws may be mandatorily applicable to such Lender
notwithstanding the other provisions of this Agreement), then, in that event,
notwithstanding anything to the contrary in any of the Loan Documents or any
agreement entered into in connection with or as security for the Notes, it is
agreed as follows:  (i) the aggregate of all consideration which
constitutes interest under law applicable to any Lender that is contracted for,
taken, reserved, charged or received by such Lender under any of the Loan
Documents or agreements or otherwise in connection with the Notes shall under no
circumstances exceed the maximum amount allowed by such applicable law, and any
excess shall be canceled automatically and if theretofore paid shall be credited
by such Lender on the principal amount of the Indebtedness (or, to the extent
that the principal amount of the Indebtedness shall have been or would thereby
be paid in full, refunded by such Lender to the Borrower); and (ii) in the event
that the maturity of the Notes is accelerated by reason of an election of the
holder thereof resulting from any Event of Default under this Agreement or
otherwise, or in the event of any required or permitted prepayment, then such
consideration that constitutes interest under law applicable to any Lender may
never include more than the maximum amount allowed by such applicable law, and
excess interest, if any, provided for in this Agreement or otherwise shall be
canceled automatically by such Lender as of the date of such acceleration or
prepayment and, if theretofore paid, shall be credited by such Lender on the
principal amount of the Indebtedness (or, to the extent that the principal
amount of the Indebtedness shall have been or would thereby be paid in full,
refunded by such Lender to the Borrower).  All sums paid or agreed to
be paid to any Lender for the use, forbearance or detention of sums due
hereunder shall, to the extent permitted by law applicable to such Lender, be
amortized, prorated, allocated and spread throughout the stated term of the
Loans evidenced by the Notes until payment in full so that the rate or amount of
interest on account of any Loans hereunder does not exceed the maximum amount
allowed by such applicable law.  If at any time and from time to time
(i) the amount of interest payable to any Lender on any date shall be computed
at the Highest Lawful Rate applicable to such Lender pursuant to this Section 12.12 and (ii) in respect of any subsequent
interest computation period the amount of interest otherwise payable to such
Lender would be less than the amount of interest payable to such Lender computed
at the Highest Lawful Rate applicable to such Lender, then the amount of
interest payable to such Lender in respect of such subsequent interest
computation period shall continue to be computed at the Highest Lawful Rate
applicable to such Lender until the total amount of interest payable to such
Lender shall equal the total amount of interest which would have been payable to
such Lender if the total amount of interest had been computed without giving
effect to this Section 12.12.  To the
extent that Chapter 303 of the Texas Finance Code is relevant for the purpose of
determining the Highest Lawful Rate applicable to a Lender, such Lender elects
to determine the applicable rate ceiling under such Chapter by the weekly
ceiling from time to time in effect.  Chapter 346 of the Texas Finance
Code does not apply to the Borrower’s obligations hereunder.

     

    Section
12.13 EXCULPATION
PROVISIONS.  EACH
OF THE PARTIES HERETO SPECIFICALLY AGREES THAT IT HAS A DUTY TO READ THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS AND AGREES THAT IT IS CHARGED WITH NOTICE
AND KNOWLEDGE OF THE TERMS OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; THAT
IT HAS IN FACT READ THIS AGREEMENT AND IS FULLY INFORMED AND HAS FULL NOTICE AND
KNOWLEDGE OF THE TERMS, CONDITIONS AND EFFECTS OF THIS AGREEMENT; THAT IT HAS
BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL OF ITS CHOICE THROUGHOUT THE
NEGOTIATIONS PRECEDING ITS EXECUTION OF THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS; AND HAS RECEIVED THE ADVICE OF ITS ATTORNEY IN ENTERING INTO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS; AND THAT IT RECOGNIZES THAT CERTAIN OF
THE TERMS OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS RESULT IN ONE PARTY
ASSUMING THE LIABILITY INHERENT IN SOME ASPECTS OF THE TRANSACTION AND RELIEVING
THE OTHER PARTY OF ITS RESPONSIBILITY FOR SUCH LIABILITY.  EACH PARTY
HERETO AGREES AND COVENANTS THAT IT WILL NOT CONTEST THE VALIDITY OR
ENFORCEABILITY OF ANY EXCULPATORY PROVISION OF THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS ON THE BASIS THAT THE PARTY HAD NO NOTICE OR KNOWLEDGE OF SUCH
PROVISION OR THAT THE PROVISION IS NOT “CONSPICUOUS.”

     

    Section
12.14 Existing Credit
Agreement.  On
the Effective Date, the Existing Credit Agreement shall be amended and restated
in its entirety by this Agreement, and the Existing Credit Agreement shall be
replaced hereby; provided that the Borrower, the Administrative Agent and the
Lenders agree that (i) on the date of the initial funding of Loans hereunder,
the loans and other Debt of the Borrower under the Existing Credit Agreement
shall be renewed, rearranged, modified and extended with the proceeds of the
initial funding and the “Commitments” of the lenders under the Existing Credit
Agreement shall be superseded by this Agreement and terminated (except as
otherwise expressly provided in Section 12.05(a) of the Existing Credit
Agreement with respect to the survival of certain covenants and agreements made
by the Borrower in the Existing Credit Agreement), (ii) the Existing Credit
Agreement shall continue to evidence the representations and warranties made by
the Borrower prior to the Effective Date, (iii) except as expressly stated
herein or amended, the other Loan Documents are ratified and confirmed as
remaining unmodified and in full force and effect with respect to all
Indebtedness, (iv) the Existing Credit Agreement shall continue to evidence and
govern any action or omission performed, required to be performed or approved
pursuant to the Existing Credit Agreement prior to the Effective Date
(including, without limitation, any failure, prior to the Effective Date, to
comply with the covenants contained in the Existing Credit Agreement and any
permitted releases of collateral) and any act, omission or event to occur or
measured by any date or period of time commencing on, or including any date or
period prior to, the Effective Date and (v) the terms and provisions of the
Existing Credit Agreement shall continue in full force and effect to the extent
provided in clause (d) of this Section 12.14.  The amendments and
restatements set forth herein shall not cure any breach thereof or any “Default”
or “Event of Default” under and as defined in the Existing Credit Agreement
existing prior to the Effective Date.  This Agreement is not in any
way intended to constitute a novation of the obligations and liabilities
existing under the Existing Credit Agreement or evidence payment of all or any
portion of such obligations and liabilities.

     

    (b) The terms
and conditions of this Agreement and the Administrative Agent’s, the Lenders’
and the Issuing Banks’ rights and remedies under this Agreement and the other
Loan Documents shall apply to all of the Indebtedness incurred under the
Existing Credit Agreement and the Letters of Credit issued
thereunder.

     

    (c) On and
after the Effective Date, (i) all references to the Existing Credit Agreement
(or to any amendment or any amendment and restatement thereof) in the Loan
Documents (other than this Agreement) shall be deemed to refer to the Existing
Credit Agreement, as amended and restated hereby, (ii) all references to any
section (or subsection) of the Existing Credit Agreement or in any Loan Document
(but not herein) shall be amended to become, mutatis mutandis, references
to the corresponding provisions of this Agreement and (iii) except as the
context otherwise provides, on or after the Effective Date, all references to
this Agreement herein (including for purposes of indemnification and
reimbursement of fees) shall be deemed to be references to the Existing Credit
Agreement, as amended and restated hereby.

     

    (d) This
amendment and restatement is limited as written and is not a consent to any
other amendment, restatement or waiver, whether or not similar and, except as
expressly provided herein or in any other Loan Document, all terms and
conditions of the Loan Documents remain in full force and effect unless
specifically amended hereby or by any other Loan Document.

     

    (e) The
undersigned waive any right to receive any notice of such termination and any
right to receive any notice of prepayment of amounts owed under the Existing
Credit Agreement.  Each Lender that was a party to the Existing Credit
Agreement hereby agrees to return to the Borrower, with reasonable promptness,
any promissory note delivered by the Borrower to such Lender in connection with
the Existing Credit Agreement.

     

    Section
12.15 USA Patriot Act
Notice.  Each
Lender hereby notifies the Borrower that pursuant to the requirements of the USA
Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001))
(the “Act”), it is required to obtain, verify and record information that
identifies the Borrower, which information includes the name and address of the
Borrower and other information that will allow such Lender to identify the
Borrower in accordance with the Act.

     

    

    
      
        
          
             

          

           

        

        
           

          
            

          

        

        
           

        

      

    

    

    The
parties hereto have caused this Agreement to be duly executed as of the day and
year first above written.

     

    
      	
              BORROWER:

            	
              ST
      MARY LAND & EXPLORATION COMPANY

            
	 
      	 
      
	 
      	
              By:         /s/ MATTHEW J.
      PURCHASE

            
	 
      	
              Name:    Matthew
      J. Purchase

            
	 
      	
              Title:      Treasurer
      and Budget & Planning Director

            
	 
      	 
      
	 
      	 
      
	
              AGENTS
      AND LENDERS:

            	
              WACHOVIA
      BANK, NATIONAL ASSOCIATION, Individually and as Administrative
      Agent

            
	 
      	 
      
	 
      	
              By:           /s/ LEANNE
      PHILLIPS

            
	 
      	
              Name:     
      Leanne Phillips

            
	 
      	
              Title:        Director

            
	 
      	 
      
	 
      	 
      
	 
      	
              WELLS
      FARGO BANK, N.A., Individually and as Syndication Agent

            
	 
      	 
      
	 
      	
              By:           /s/ TIM
      GREEN

            
	 
      	
              Name:      Tim
      Green

            
	 
      	
              Title:       Assistant
      Vice President

            
	 
      	 
      
	 
      	 
      
	 
      	
              JPMORGAN
      CHASE BANK,
      N.A., Individually and
      as Co-Documentation Agent

            
	 
      	 
      
	 
      	
              By:           /s/ BRIAN
      ORLANDO

            
	 
      	
              Name:      Brian
      Orlando

            
	 
      	
              Title:        Vice
      President

            
	 
      	 
      
	 
      	 
      
	 
      	
              COMERICA
      BANK, Individually and as

              Co-Documentation
      Agent

            
	 
      	 
      
	 
      	
              By:           /s/ GREGORY D.
      SMITH

            
	 
      	
              Name:     Gregory
      D. Smith

            
	 
      	
              Title:       Vice
      President

            
	 
      	 
      
	 
      	 
      
	 
      	
              BNP
      PARIBAS, Individually and as Co-Documentation Agent

            
	 
      	 
      
	 
      	
              By:           /s/ BETSY
      JOCHER

            
	 
      	
              Name:      Betsy
      Jocher

            
	 
      	
              Title:        Director

            
	 
      	 
      
	 
      	
              By:           /s/ POLLY
      SCHOTT

            
	 
      	
              Name:      Polly
      Schott

            
	 
      	
              Title:        Director

            
	 
      	 
      
	 
      	 
      
	 
      	
              ROYAL
      BANK OF CANADA

            
	 
      	 
      
	 
      	
              By:           /s/ DON J.
      MCKINNERNEY

            
	 
      	
              Name:     
      Don J. McKinnerney

            
	 
      	
              Title:       Authorized
      Signatory

            
	 
      	 
      
	 
      	 
      
	 
      	
              BANK
      OF SCOTLAND PLC

            
	 
      	 
      
	 
      	
              By:           /s/ KAREN
      WEICH

            
	 
      	
              Name:      Karen
      Weich

            
	 
      	
              Title:        Vice
      President

            
	 
      	 
      
	 
      	 
      
	 
      	
              U.S.
      BANK NATIONAL ASSOCIATION

            
	 	 
	 
      	
              By:           /s/ DARIA M.
      MAHONEY

            
	 
      	
              Name:      Daria
      M. Mahoney

            
	 
      	
              Title:        Vice
      President

            
	 
      	 
      
	 
      	 
      
	 
      	
              KEY
      BANK

            
	 
      	 
      
	 
      	
              By:           /s/ THOMAS
      RAJAN

            
	 
      	
              Name:     
      Thomas Rajan

            
	 
      	
              Title:        Managing
      Director

            
	 
      	 
      
	 
      	 
      
	 
      	
              BANK
      OF OKLAHOMA

            
	 
      	 
      
	 
      	
              By:           /s/ MICHAEL M.
      LOGAN

            
	 
      	
              Name:      Michael
      M. Logan

            
	 
      	
              Title:        Senior
      Vice President

            
	 
      	 
      
	 
      	 
      
	 
      	
              CAPITAL
      ONE, NATIONAL ASSOCIATION

            
	 
      	 
      
	 
      	
              By:           /s/ STAN G. WEISER
      JR.

            
	 
      	
              Name:      Stan
      G. Weiser Jr.

            
	 
      	
              Title:        Vice
      President

            
	 
      	 
      
	 
      	 
      
	 
      	 
      

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    ANNEX
I

     

    LIST
OF COMMITMENTS

     

    
      	
              Name
      of Lender

            	
              Applicable
      Percentage

            	
              Commitment

            
	
              Wachovia
      Bank, National Association

            	
              11.05%

            	
              $55,250,000

            
	
              Wells
      Fargo Bank, N.A.

            	
              11.05%

            	
              $55,250,000

            
	
              BNP
      Paribas

            	
              10.80%

            	
              $54,000,000

            
	
              Comerica
      Bank

            	
              10.80%

            	
              $54,000,000

            
	
              JPMorgan
      Chase Bank, N.A.

            	
              10.80%

            	
              $54,000,000

            
	
              U.S.
      Bank National Association

            	
              10.00%

            	
              $50,000,000

            
	
              Bank
      of Scotland

            	
              8.75%

            	
              $43,750,000

            
	
              Royal
      Bank of Canada

            	
              8.75%

            	
              $43,750,000

            
	
              Key
      Bank

            	
              8.00%

            	
              $40,000,000

            
	
              Bank
      of Oklahoma

            	
              5.00%

            	
              $25,000,000

            
	
              Capital
      One, National Association

            	
              5.00%

            	
              $25,000,000

            
	
              TOTAL

            	
              100.00%

            	
              $500,000,000

            

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    ANNEX
II

     

    EXISTING
LETTERS OF CREDIT

     

    None.

     

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    EXHIBIT
A

     

    [FORM
OF] NOTE

     

    [$___________]                                                                            [__________],
200[__]

     

    FOR VALUE
RECEIVED, St. Mary
Land & Exploration Company, a Delaware corporation (the “Borrower”) hereby
promises to pay to the order of [______________________________]
(the “Lender”),
at the principal office of Wachovia Bank, National Association (the “Administrative
Agent”), at [______________________________],
the principal sum of [______________________________]
Dollars ($[_________]) (or such lesser
amount as shall equal the aggregate unpaid principal amount of the Loans made by
the Lender to the Borrower under the Credit Agreement, as hereinafter defined),
in lawful money of the United States of America and in immediately available
funds, on the dates and in the principal amounts provided in the Credit
Agreement, and to pay interest on the unpaid principal amount of each such Loan,
at such office, in like money and funds, for the period commencing on the date
of such Loan until such Loan shall be paid in full, at the rates per annum and
on the dates provided in the Credit Agreement.

     

    The date,
amount, Type, interest rate, Interest Period and maturity of each Loan made by
the Lender to the Borrower, and each payment made on account of the principal
thereof, shall be recorded by the Lender on its books and, prior to any transfer
of this Note, may be endorsed by the Lender on the schedules attached hereto or
any continuation thereof or on any separate record maintained by the
Lender.  Failure to make any such notation or to attach a schedule
shall not affect any Lender’s or the Borrower’s rights or obligations in respect
of such Loans or affect the validity of such transfer by any Lender of this
Note.

     

    This Note
is one of the Notes referred to in the Second Amended and Restated Credit
Agreement dated as of April 10, 2008 among the Borrower, the Administrative
Agent, and the other agents and lenders signatory thereto (including the
Lender), and evidences Loans made by the Lender thereunder (such Credit
Agreement as the same may be amended, supplemented or restated from time to
time, the “Credit
Agreement”).  Capitalized terms used in this Note have the
respective meanings assigned to them in the Credit Agreement.

     

    This Note
is issued pursuant to the Credit Agreement and is entitled to the benefits
provided for in the Credit Agreement and the other Loan
Documents.  The Credit Agreement provides for the acceleration of the
maturity of this Note upon the occurrence of certain events, for prepayments of
Loans upon the terms and conditions specified therein and other provisions
relevant to this Note.

     

    THIS NOTE
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
TEXAS.

     

    
      	
              ST.
      MARY LAND & EXPLORATION COMPANY

            
	 
      
	
              By:            

            
	
              Name:                                                         

            
	
              Title:                                                         

            

    

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    EXHIBIT
B

     

    [FORM
OF]

     

    COMPLIANCE
CERTIFICATE

     

    The
undersigned hereby certifies that he/she is the [________________________]of
St. Mary Land &
Exploration Company, a Delaware corporation (the “Borrower”), and that
as such he/she is authorized to execute this certificate in the foregoing
capacity and on behalf of the Borrower.  With reference to the Second
Amended and Restated Credit Agreement dated as of April 10, 2008 (together with
all amendments, supplements or restatements thereto being the “Agreement”) among the
Borrower, Wachovia
Bank, National Association, as Administrative Agent, and the other agents
and lenders (the “Lenders”) which are
or become a party thereto, and such Lenders, the undersigned represents and
warrants as follows (each capitalized term used herein having the same meaning
given to it in the Agreement unless otherwise specified):

     

    (a)           The
representations and warranties of the Borrower contained in Article VII of the
Agreement and in the Loan Documents and otherwise made in writing by or on
behalf of the Borrower pursuant to the Agreement and the Loan Documents were
true and correct when made, and are repeated at and as of the time of delivery
hereof and are true and correct in all material respects at and as of the time
of delivery hereof, except to the extent such representations and warranties are
expressly limited to an earlier date or the Majority Lenders have expressly
consented in writing to the contrary.

     

    (b)           The
Borrower has performed and complied in all material respects with all agreements
and conditions contained in the Agreement and in the Loan Documents required to
be performed or complied with by it prior to or at the time of delivery hereof
or specify default and describe.

     

    (c)           Since
[_________ __], 200[_], no change has occurred, either in any case or in the
aggregate, in the condition, financial or otherwise, of the Borrower or any
Material Subsidiary which could reasonably be expected to have a Material
Adverse Effect [or specify event].

     

    (d)           There
exists no Default or Event of Default [or specify Default and
describe].

     

    (e)           Attached
hereto are the detailed computations necessary to determine whether the Borrower
is in compliance with Section 9.01 and Section 8.14 as of the end of the [fiscal
quarter][fiscal year] ending [          ].

     

    EXECUTED
AND DELIVERED this [          ]
day of [          ].

    

    
      	
              ST.
      MARY LAND & EXPLORATION COMPANY

            
	 
      
	
              By:            

            
	
              Name:                                                         

            
	
              Title:                                                         

            

    

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    EXHIBIT
C

     

    SECURITY
INSTRUMENTS

     

    1. Amended
and Restated Pledge and Security Agreement dated as of April 7, 2005, executed
by the Borrower in favor of the Administrative Agent, covering the stock of the
Material Subsidiaries.

     

    2. Financing
Statements and continuations thereof in respect of item 1, by the
Borrower.

     

    3. Stock
Powers delivered in respect of item 1.

     

    4. Supplement
and Amendment to Deed of Trust, Mortgage, Line of Credit Mortgage, Assignment,
Security Agreement, Fixture Filing and Financing Statement dated as of April 7,
2005, from the Borrower and the Guarantors, adding additional
properties.

     

    5. Deed of
Trust, Mortgage, Line of Credit Mortgage, Assignment, Security Agreement,
Fixture Filing and Financing Statement dated as of April 7, 2005, from the
Borrower and the Guarantors, adding additional properties.

     

    6. Reaffirmation
Agreement dated as of April 10, 2008, by the Borrower in favor of the
Administrative Agent.

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    EXHIBIT
D

     

    FORM
OF ASSIGNMENT AND ASSUMPTION

     

    Reference is made to the Amended and
Restated Credit Agreement dated as of April 10, 2008 (as the same
may from time to time be amended, modified, supplemented or restated, the “Credit Agreement”),
among St. Mary Land
& Exploration Company, the Lenders named therein and Wachovia Bank, National
Association, as Administrative Agent for the Lenders.  Terms
defined in the Credit Agreement are used herein with the same
meanings.

     

    The Assignor named on the reverse
hereof hereby sells and assigns, without recourse, to the Assignee named on the
reverse hereof, and the Assignee hereby purchases and assumes, without recourse,
from the Assignor, effective as of the Assignment Date set forth on the reverse
hereof, the interests set forth on the reverse hereof (the “Assigned Interest”)
in the Assignor’s rights and obligations under the Credit Agreement, including,
without limitation, the interests set forth on the reverse hereof in the
Commitment of the Assignor on the Assignment Date and Loans owing to the
Assignor which are outstanding on the Assignment Date, together with the
participations in Letters of Credit and LC Disbursements held by the Assignor on
the Assignment Date, but excluding accrued interest and fees to and excluding
the Assignment Date.  The Assignee hereby acknowledges receipt of a
copy of the Credit Agreement.  From and after the Assignment Date (i)
the Assignee shall be a party to and be bound by the provisions of the Credit
Agreement and, to the extent of the Assigned Interest, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall, to the extent of
the Assigned Interest, relinquish its rights and be released from its
obligations under the Credit Agreement.

     

    This Assignment and Assumption is being
delivered to the Administrative Agent together with (i) if the Assignee is a
Foreign Lender, any documentation required to be delivered by the Assignee
pursuant to Section 5.03(e) of the Credit Agreement,
duly completed and executed by the Assignee, and (ii) if the Assignee is not
already a Lender under the Credit Agreement, an Administrative Questionnaire in
the form supplied by the Administrative Agent, duly completed by the
Assignee.  The Assignor shall pay the fee payable to the
Administrative Agent pursuant to Section 12.04(b) of
the Credit Agreement.

     

    This Assignment and Assumption shall be
governed by and construed in accordance with the laws of the State of
Texas.

     

    Date of
Assignment:

     

    Legal
Name of Assignor:

     

    Legal
Name of Assignee:

     

    Assignee’s
Address for Notices:

     

    Effective
Date of Assignment

     

    (“Assignment
Date”):

     

    
      	
              Facility

            	
              Principal
      Amount Assigned

            	
              Percentage
      Assigned of Facility/Commitment (set forth, to at least 8 decimals, as a
      percentage of the Facility and the aggregate Commitments of all Lenders
      thereunder)

            
	
              Commitment
      Assigned:

            	
              $

            	
                          %

            
	
              Loans:

            	 
      	 
      
	 
      	 
      	 
      

    

    

     

    The terms
set forth above and on the reverse side hereof are hereby agreed
to:

     

    
      	
              [Name of
      Assignor], as Assignor

            
	 
      
	
              By:______________________________

            
	
              Name:

            
	
              Title:

            
	 
      
	 
      
	
              [Name of
      Assignee], as Assignee

            
	 
      
	
              By:
      ______________________________

            
	
              Name:

            
	
              Title:

            

    

    

     

    

    The
undersigned hereby consent to the within assignment:1

    

    
      	
              St.
      Mary Land & Exploration Company

            	
              Wachovia
      Bank, National Association, as Administrative Agent

            
	 
      	 
      
	
              By:
      ______________________

            	
              By:
      __________________________

            
	
              Name:

            	
              Name:

            
	
              Title:

            	
              Title:

            

    

    

     

    
      

    

      
      1 Consents to be included to the extent
required by Section 9.04(b) of the Credit Agreement.

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    EXHIBIT
E

     

    FORM
OF COMMITMENT INCREASE CERTIFICATE

     

    

    

    [          ],
200[    ]

    

    

    To:           Wachovia
Bank, National Association,

    as Administrative Agent

    

    The
Borrower, the Administrative Agent and the other Agents and certain Lenders have
heretofore entered into a Second Amended and Restated Credit Agreement, dated as
of April 10, 2008, as amended from time to time (the “Credit
Agreement”).  Capitalized terms not otherwise defined herein
shall have the meaning given to such terms in the Credit Agreement.

    

    This
Commitment Increase Certificate is being delivered pursuant to Section 2.06(c) of the Credit Agreement.

    

    Please be
advised that the undersigned has agreed to increase its Commitment under the
Credit Agreement effective [          ],
200[    ]
from $[          ]
to $[          ]
and (b) that it shall continue to be a party in all respect to the Credit
Agreement and the other Loan Documents.

    

    The
[Borrower/Lender] shall pay the fee payable to the Administrative Agent pursuant
to Section 2.06(c)(ii) of the Credit
Agreement.

    

                       Very
truly yours,

    

                      
[                                                      ]

    

    

    
      	
              By:
      ______________________________

            
	
              Name:

            
	
              Title:

            

    

    

    

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    
      	
              Accepted
      and Agreed:

            
	 
      
	
              Wachovia
      Bank, National Association, as Administrative Agent

            
	 
      
	
              By:                                                                

            
	
              Name:                                                                

            
	
              Title:

            
	 
      
	 
      
	
              Accepted
      and Agreed:

            
	 
      
	
              St.
      Mary Land & Exploration Company

            
	 
      
	
              By:                                                                

            
	
              Name:                                                                

            
	
              Title:

            

    

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    EXHIBIT
F

     

    FORM
OF ADDITIONAL LENDER CERTIFICATE

     

    

    

    [          ],
200[    ]

    

    

    To:           Wachovia
Bank, National Association

    as Administrative Agent

    

    The
Borrower, the Administrative Agent and the other Agents and certain Lenders have
heretofore entered into a Second Amended and Restated Credit Agreement, dated as
of April 10, 2008, as amended from time to time (the “Credit
Agreement”).  Capitalized terms not otherwise defined herein
shall have the meaning given to such terms in the Credit Agreement.

    

    This
Additional Lender Certificate is being delivered pursuant to Section 2.06(c) of the Credit Agreement.

    

    Please be
advised that the undersigned has agreed (a) to become a Lender under the Credit
Agreement effective [          ],
200[    ]
with a Commitment of $[          ]
and (b) that it shall be a party in all respect to the Credit Agreement and the
other Loan Documents.

    

    This
Additional Lender Certificate is being delivered to the Administrative Agent
together with (i) if the Additional Lender is a Foreign Lender, any
documentation required to be delivered by such Additional Lender pursuant to Section 5.03(e) of the Credit Agreement, duly completed
and executed by the Additional Lender, and (ii) an Administrative Questionnaire
in the form supplied by the Administrative Agent, duly completed by the
Additional Lender.  The [Borrower/Additional Lender] shall pay the fee
payable to the Administrative Agent pursuant to Section
2.06(c)(ii) of the Credit Agreement.

    

                       Very
truly yours,

    

                      [                                                      ]

    

    

    
      	
              By:
      ______________________________

            
	
              Name:

            
	
              Title:

            

    

    

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    
      	
              Accepted
      and Agreed:

            
	 
      
	
              Wachovia
      Bank, National Association, as Administrative Agent

            
	 
      
	
              By:                                                                

            
	
              Name:                                                                

            
	
              Title:

            
	 
      
	 
      
	
              Accepted
      and Agreed:

            
	 
      
	
              St.
      Mary Land & Exploration Company

            
	 
      
	
              By:                                                                

            
	
              Name:                                                                

            
	
              Title:

            

    

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    EXHIBIT
G

     

    REAFFIRMATION
AGREEMENT

     

    

     

    1. This
Reaffirmation Agreement (this “Reaffirmation”) dated
as of April 10, 2008, is made (a) in connection with, and as a condition to,
that certain Second Amended and Restated Credit Agreement dated of even date
herewith (as may be amended, restated or otherwise modified from time to time,
the “Credit
Agreement”) among ST. MARY LAND &
EXPLORATION COMPANY, a Delaware corporation (the
“Borrower”);
each of the Lenders from time to time party thereto; WACHOVIA BANK, NATIONAL
ASSOCIATION (in its individual
capacity, “Wachovia”), as
administrative agent for the Lenders (in such capacity, together with its
successors in such capacity, the “Administrative
Agent”); and the other parties and agents signatory thereto and (b) for
the benefit of the respective secured parties and beneficiaries described in the
Security Instruments (as defined below).  Capitalized terms used
herein but not defined herein shall have the meanings ascribed to them in the
Credit Agreement.

     

    2. The
Borrower has executed certain Loan Documents to secure the Indebtedness,
including, without limitation, that certain Amended and Restated Pledge and
Security Agreement dated as of April 7, 2005, by the Borrower in favor of the
Administrative Agent (as the same may be amended, supplemented, restated or
otherwise modified from time to time, the “Pledge Agreement”),
that certain Deed of Trust, Mortgage, Line of Credit Mortgage, Assignment,
Security Agreement, Fixture Filing and Financing Statement dated as of April 7,
2005, from the Borrower to Jay Chernosky, as Trustee (“Trustee”), and to the
Administrative Agent (the “Deed of Trust”) and
that certain Supplement and Amendment to Deed of Trust, Mortgage, Line of Credit
Mortgage, Assignment, Security Agreement, Fixture Filing and Financing Statement
dated as of April 7, 2005, by the Borrower to the Trustee, for the benefit of
the Administrative Agent (the “Deed of Trust
Supplement”).

     

    3. The
Borrower (a) has reviewed the Credit Agreement, (b) agrees that according to its
terms its obligations (and the security interests granted by it) under the
Pledge Agreement, Deed of Trust, Deed of Trust Supplement and each such other
Loan Document to which the Borrower is a party (collectively, the “Security
Instruments”) will continue in full force and effect to secure the
Indebtedness, and, as the same may be amended, supplemented, or otherwise
modified, and such other amounts in accordance with the terms of the Security
Instruments, (c) acknowledges, represents, warrants and agrees that the liens
and security interests created by it pursuant to the Pledge Agreement, Deed of
Trust, Deed of Trust Supplement and each other Security Instrument are valid and
subsisting and create a first priority perfected security interest to secure the
Indebtedness, (d) ratifies and affirms its obligations under, and acknowledges,
renews and extends its continued liability under, the Pledge Agreement, Deed of
Trust, Deed of Trust Supplement and each other Security Instrument to which it
is a party and agrees that the Pledge Agreement, Deed of Trust, Deed of Trust
Supplement and each other Security Instrument to which it is a party remain in
full force and effect, and (e) represents and warrants to the Lenders that as of
the date hereof:  (i) all of the representations and warranties
contained in the Pledge Agreement, Deed of Trust, Deed of Trust Supplement and
each other Security Instrument to which it is a party are true and correct,
except (x) to the extent any such representations and warranties are expressly
limited to an earlier date, in which case, such representations and warranties
shall continue to be true and correct as of such specified earlier date and (y)
except for any changes in the facts or circumstances represented thereby not
prohibited by the Pledge Agreement, Deed of Trust, Deed of Trust Supplement,
each other Security Instrument or the Existing Credit Agreement, (ii) no Default
has occurred and is continuing (iii) since the Effective Date, there has been no
event, development or circumstance that has had or could reasonably be expected
to have a Material Adverse Effect.

     

    4. Each of
the Pledge Agreement, Deed of Trust, Deed of Trust Supplement and each other
Security Instrument remains in full force and effect as executed by the parties
hereto, and nothing herein shall act as a waiver of any of the Administrative
Agent’s or other Secured Parties’ rights under the Pledge Agreement, Deed of
Trust, Deed of Trust Supplement or any other Security Instrument.

     

    5. This
Reaffirmation is a Loan Document for the purposes of the provisions of the other
Loan Documents.

     

    6. This
Reaffirmation is a Security Instrument for the purposes of the provisions of the
other Security Instruments

     

    7. This
Reaffirmation shall be governed by and construed and enforced in accordance with
the laws of the State of Texas.

     

    8. This
Reaffirmation may be signed in any number of counterparts, each of which shall
be an original.  Delivery of an executed signature page to this
Reaffirmation by facsimile transmission shall be as effective as delivery of a
manually signed counterpart of this Reaffirmation.

     

    9. THIS
REAFFIRMATION AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG
THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.

     

    10. THERE
ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

     

    

    [The rest
of this page has been left blank intentionally]

     

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    The Borrower has caused this
Reaffirmation to be duly executed as of the date first above
written.

     

    BORROWER

    

    
      	
              ST
      MARY LAND & EXPLORATION COMPANY

            
	 
      
	 
      
	 
      
	
              By:       _____________________________    

            
	
              Name:  Matthew
      J. Purchase

            
	
              Title:    Treasurer
      and Budget & Planning Director

            

    

    

    

    
      	
              Accepted
      by:

            
	 
      
	 
      
	
                      WACHOVIA BANK,
      NATIONAL ASSOCIATION, as Administrative Agent

            
	 
      
	 
      
	 
      
	
                      By:       _____________________________                                                                    

            
	
                      Name:  Leanne
      Phillips

            
	
                      Title:   
      Director

            

    

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    SCHEDULE
7.05

    LITIGATION

    

     

    NONE

     

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    SCHEDULE
7.15

     

    SUBSIDIARIES
AND PARTNERSHIPS; NON-MATERIAL SUBSIDIARIES

     

    

    
      	
               

              Material
      Subsidiaries

            	
              Jurisdiction
      of Organization

            	
              Organizational
      Identification Number

            	
              Principal
      Place of Business

              and
      Chief Executive Office

            	
              Owner

            	
              Percentage
      Owned

            
	
              None.

            	 
      	 
      	 
      	 
      	 
      
	
              Non-Material
      Subsidiaries

            	 
      	 
      	 
      	 
      	 
      
	
              Belring
      Company, Ltd.

            	
              Texas

            	 
      	 
      	
              Belring
      GP LLC

              Borrower

            	
              1%

              99%

            
	
              Belring
      GP LLC

            	
              Delaware

            	 
      	 
      	
              Borrower

            	
              100%

            
	
              Box
      Church Gas Gathering LLC

            	
              Colorado

            	 
      	 
      	
              Borrower

            	
              58.6754%

            
	
              Energy
      Leasing, Inc.

            	
              Oklahoma

            	 
      	 
      	
              Borrower

            	
              100%

            
	
              Four
      Winds Marketing LLC

            	
              Colorado

            	 
      	 
      	
              Borrower

            	
              100%

            
	
              Hilltop
      Investments

            	
              Colorado

            	 
      	 
      	
              Borrower

            	
              50%

            
	
              SMT
      Texas LLC

            	
              Colorado

            	 
      	 
      	
              Borrower

            	
              100%

            
	
              St.
      Mary Land & Exploration Acquisition, LLC

            	
              Delaware

            	 
      	 
      	
              Borrower

            	
              100%

            
	
              St.
      Mary Energy Louisiana LLC

            	
              Delaware

            	 
      	 
      	
              Borrower

            	
              100%

            
	
              St.
      Mary Land East Texas L.P.

            	
              Texas

            	 
      	 
      	
              SMT
      Texas LLC

              Borrower

            	
              99%

              1%

            
	
              Sycamore
      Gas System

            	
              Oklahoma

            	 
      	 
      	
              Borrower

            	
              3.11%

            
	
              Trinity
      River Services LLC

            	
              Texas

            	 
      	 
      	
              Borrower

            	
              25%

            

    

    

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    SCHEDULE
7.19

    GAS
IMBALANCES

     

     

    NONE

     

    

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    SCHEDULE
7.20

    MARKETING
CONTRACTS

     

    NONE

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    SCHEDULE
7.21

    SWAP
AGREEMENTS

    

     

    
      	
              St.
      Mary Land & Exploration Company

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              Hedges
      "In-Place"

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              As
      of April 9, 2008

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              Hedge

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              Remaining

            	 	 
      	 
      	 
      	 
      
	
              Relationship

            	 
      	
              Contract

            	 
      	 
      	 
      	 
      	
              Contract

            	
              Contract

            	
              Monthly

            	
              Yearly

            	 	
              %
      of

            	
              Fixed

            	 
      	
              MtM
      Value

            
	
              ID

            	
              CounterParty

            	
              Date

            	
              Contract #

            	
              Price Index

            	
              Purpose

            	
              Area

            	
              Start

            	
              End

            	
              Volumes

            	
              Volumes

            	 	
              Hedges

            	
              Price

            	 
      	
              at 4/9/08

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              GAS
      SWAPS

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              BNP
      Paribas

            	
              06/02/06

            	
              108979

            	
              IF
      HSC

            	
              Arrowhead/Stk
      buyback

            	
              Arklatex

            	
              01/01/08

            	
              05/31/08

            	
              35,000

            	
              70,000

            	 	 
      	
              $7.45

            	 
      	
              (146,433)

            
	 
      	
              BNP
      Paribas

            	
              02/29/08

            	
              172761

            	
              IF
      CIG

            	
              Stk
      buyback

            	
              Rockies

            	
              04/01/08

            	
              12/31/08

            	
              50,000

            	
              1,000,000

            	 	 
      	
              $8.04

            	 
      	
              1,571

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              85,000

            	
              1,070,000

            	 	
              7.08%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              Comerica

            	
              07/30/07

            	
              ESWP253

            	
              IF
      HSC

            	
              Rockford
      acq.

            	
              Gulf
      Coast

            	
              04/01/08

            	
              12/31/08

            	
              100,000

            	
              800,000

            	 	 
      	
              $8.18

            	 
      	
              (1,267,071)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              100,000

            	
              800,000

            	 	
              5.29%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              J
      Aron & Co

            	
              07/30/07

            	
              737564622

            	
              IF
      HSC

            	
              Rockford
      acq.

            	
              Gulf
      Coast

            	
              10/01/08

            	
              12/31/08

            	
              110,000

            	
              330,000

            	 	 
      	
              $8.57

            	 
      	
              (419,384)

            
	
              ###-##-####

            	
              J
      Aron & Co

            	
              05/19/06

            	
              886126894

            	
              IF
      PEPL

            	
              Stk
      buyback

            	
              MidCon

            	
              01/01/08

            	
              12/31/08

            	
              140,000

            	
              1,120,000

            	 	 
      	
              $7.91

            	 
      	
              (844,418)

            
	
              ###-##-####

            	
              J
      Aron & Co

            	
              06/15/06

            	
              886819898

            	
              IF
      CIG

            	
              Stk
      buyback

            	
              Rockies

            	
              01/01/08

            	
              12/31/08

            	
              110,000

            	
              880,000

            	 	 
      	
              $6.98

            	 
      	
              (926,175)

            
	
              ###-##-####

            	
              J
      Aron & Co

            	
              12/22/06

            	
              892369629

            	
              IF
      NGPL

            	
              Atoka
      Drilling

            	
              MidCon

            	
              01/01/08

            	
              12/31/08

            	
              62,500

            	
              500,000

            	 	 
      	
              $6.73

            	 
      	
              (983,107)

            
	 
      	
              J
      Aron & Co

            	
              03/03/08

            	
              904120535

            	
              IF
      HSC

            	
              Sendero

            	
              ArkLaTex

            	
              04/01/08

            	
              12/31/08

            	
              35,000

            	
              280,000

            	 	 
      	
              $9.44

            	 
      	
              (95,238)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              259,167

            	
              3,110,000

            	 	
              20.58%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              JPMorgan

            	
              05/19/06

            	
              2594706

            	
              IF
      PEPL

            	
              Stk
      buyback

            	
              MidCon

            	
              01/01/08

            	
              12/31/08

            	
              180,000

            	
              1,440,000

            	 	 
      	
              $8.17

            	 
      	
              (708,515)

            
	
              ###-##-####

            	
              JPMorgan

            	
              06/20/06

            	
              2715473

            	
              IF
      CIG

            	
              Stk
      buyback

            	
              Rockies

            	
              01/01/08

            	
              12/31/08

            	
              150,000

            	
              1,200,000

            	 	 
      	
              $6.80

            	 
      	
              (1,474,887)

            
	
              ###-##-####

            	
              JPMorgan

            	
              11/01/06

            	
              4430129

            	
              IF
      El Paso Permian

            	
              Sweetie
      Peck Acq

            	
              Permian

            	
              01/01/08

            	
              12/31/08

            	
              95,000

            	
              760,000

            	 	 
      	
              $7.07

            	 
      	
              (1,489,032)

            
	
              ###-##-####

            	
              JPMorgan

            	
              01/09/07

            	
              4962486

            	
              IF
      ANR OK

            	
              Atoka

            	
              MidCon

            	
              01/01/08

            	
              12/31/08

            	
              62,500

            	
              500,000

            	 	 
      	
              $6.88

            	 
      	
              (897,976)

            
	
              ###-##-####

            	
              JPMorgan

            	
              02/07/07

            	
              5419954

            	
              IF
      HSC

            	
              BlackBrush
      Acq

            	
              Gulf

            	
              01/01/08

            	
              12/31/08

            	
              80,000

            	
              640,000

            	 	 
      	
              $7.57

            	 
      	
              (1,398,953)

            
	
              ###-##-####

            	
              JPMorgan

            	
              07/30/07

            	
              9673554

            	
              IF
      HSC

            	
              Rockford
      acq.

            	
              Gulf
      Coast

            	
              01/01/08

            	
              12/31/08

            	
              160,000

            	
              1,280,000

            	 	 
      	
              $8.20

            	 
      	
              (1,993,264)

            
	 
      	
              JPMorgan

            	
              02/26/08

            	
              13531195

            	
              IF
      ANR OK

            	
              Stk
      buyback

            	
              MidCon

            	
              04/01/08

            	
              12/31/08

            	
              150,000

            	
              1,200,000

            	 	 
      	
              $8.42

            	 
      	
              (333,967)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              585,000

            	
              7,020,000

            	 	
              46.46%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              Key
      Bank

            	
              07/30/07

            	
              183268

            	
              IF
      HSC

            	
              Rockford
      acq.

            	
              Gulf
      Coast

            	
              01/01/08

            	
              12/31/08

            	
              37,143

            	
              260,000

            	 	 
      	
              $8.12

            	 
      	
              (435,972)

            
	
              ###-##-####

            	
              Key
      Bank

            	
              08/10/07

            	
              184037

            	
              IF
      PEPL

            	
              Stk
      Repurchase

            	
              MidCon

            	
              01/01/08

            	
              12/31/08

            	
              167,500

            	
              1,340,000

            	 	 
      	
              $7.11

            	 
      	
              (2,081,580)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              533,333

            	
              1,600,000

            	 	
              10.59%

            	 
      	 
      	 
      
	 
      	
              Wells
      Fargo

            	
              02/20/08

            	
              314016

            	
              IF
      HSC

            	
              Stk
      buyback

            	
              MidCon

            	
              04/01/08

            	
              12/31/08

            	
              98,750

            	
              790,000

            	 	 
      	
              $9.11

            	 
      	
              (571,624)

            
	 
      	
              Wells
      Fargo

            	
              03/17/08

            	
              323740

            	
              NYMEX
      HH

            	
              Stk
      buyback

            	
              Gulf
      Coast

            	
              04/01/08

            	
              12/31/08

            	
              90,000

            	
              720,000

            	 	 
      	
              $9.46

            	 
      	
              (402,342)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              632,083

            	
              1,510,000

            	 	
              9.99%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	 
      	
              Total
      GAS SWAPS - 2008

            	 
      	 
      	 
      	 
      	 
      	 
      	
              1,259,167

            	
              15,110,000

            	 	
              100.00%

            	
              $6.40

            	 
      	
              (16,468,367)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	 
      	
              BNP
      Paribas

            	
              02/29/08

            	
              172761

            	
              IF
      CIG

            	
              Stk
      buyback

            	
              Rockies

            	
              01/01/09

            	
              12/31/09

            	
              50,000

            	
              600,000

            	 	 
      	
              $7.53

            	 
      	
              149,476

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              50,000

            	
              600,000

            	 	
              3.01%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              Comerica

            	
              07/30/07

            	
              ESWP253

            	
              IF
      HSC

            	
              Rockford
      acq.

            	
              Gulf
      Coast

            	
              01/01/09

            	
              12/31/09

            	
              100,000

            	
              1,200,000

            	 	 
      	
              $8.44

            	 
      	
              (948,666)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              100,000

            	
              1,200,000

            	 	
              6.02%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              J
      Aron & Co

            	
              07/30/07

            	
              737564622

            	
              IF
      HSC

            	
              Rockford
      acq.

            	
              Gulf
      Coast

            	
              01/01/09

            	
              12/31/09

            	
              110,000

            	
              1,320,000

            	 	 
      	
              $8.49

            	 
      	
              (980,683)

            
	
              ###-##-####

            	
              J
      Aron & Co

            	
              05/19/06

            	
              886126894

            	
              IF
      PEPL

            	
              Stk
      buyback

            	
              MidCon

            	
              01/01/09

            	
              06/30/09

            	
              140,000

            	
              840,000

            	 	 
      	
              $8.33

            	 
      	
              (247,071)

            
	
              ###-##-####

            	
              J
      Aron & Co

            	
              06/15/06

            	
              886819898

            	
              IF
      CIG

            	
              Stk
      buyback

            	
              Rockies

            	
              01/01/09

            	
              06/30/09

            	
              110,000

            	
              660,000

            	 	 
      	
              $7.51

            	 
      	
              (100,040)

            
	
              ###-##-####

            	
              J
      Aron & Co

            	
              12/22/06

            	
              892369629

            	
              IF
      NGPL

            	
              Atoka
      Drilling

            	
              MidCon

            	
              01/01/09

            	
              12/31/09

            	
              36,667

            	
              440,000

            	 	 
      	
              $7.11

            	 
      	
              (593,375)

            
	 
      	
              J
      Aron & Co

            	
              03/03/08

            	
              904120535

            	
              IF
      HSC

            	
              Sendero

            	
              ArkLaTex

            	
              04/01/08

            	
              12/31/08

            	
              50,833

            	
              610,000

            	 	 
      	
              $9.02

            	 
      	
              (110,668)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              322,500

            	
              3,870,000

            	 	
              19.42%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              JPMorgan

            	
              05/19/06

            	
              2594706

            	
              IF
      PEPL

            	
              Stk
      buyback

            	
              MidCon

            	
              01/01/09

            	
              06/30/09

            	
              180,000

            	
              1,080,000

            	 	 
      	
              $8.37

            	 
      	
              (280,122)

            
	
              ###-##-####

            	
              JPMorgan

            	
              06/20/06

            	
              2715473

            	
              IF
      CIG

            	
              Stk
      buyback

            	
              Rockies

            	
              01/01/09

            	
              07/31/09

            	
              150,000

            	
              1,050,000

            	 	 
      	
              $7.96

            	 
      	
              497,013

            
	
              ###-##-####

            	
              JPMorgan

            	
              11/01/06

            	
              4430129

            	
              IF
      El Paso Permian

            	
              Sweetie
      Peck Acq

            	
              Permian

            	
              01/01/09

            	
              12/31/09

            	
              100,000

            	
              1,200,000

            	 	 
      	
              $7.11

            	 
      	
              (1,706,833)

            
	
              ###-##-####

            	
              JPMorgan

            	
              01/09/07

            	
              4962486

            	
              IF
      ANR OK

            	
              Atoka

            	
              MidCon

            	
              01/01/09

            	
              12/31/09

            	
              36,667

            	
              440,000

            	 	 
      	
              $7.37

            	 
      	
              (485,743)

            
	
              ###-##-####

            	
              JPMorgan

            	
              02/07/07

            	
              5419954

            	
              IF
      HSC

            	
              BlackBrush
      Acq

            	
              Gulf

            	
              01/01/09

            	
              02/28/09

            	
              80,000

            	
              160,000

            	 	 
      	
              $8.42

            	 
      	
              (301,737)

            
	
              ###-##-####

            	
              JPMorgan

            	
              07/30/07

            	
              9673554

            	
              IF
      HSC

            	
              Rockford
      acq.

            	
              Gulf
      Coast

            	
              01/01/09

            	
              12/31/09

            	
              160,000

            	
              1,920,000

            	 	 
      	
              $8.51

            	 
      	
              (1,387,619)

            
	 
      	
              JPMorgan

            	
              02/26/08

            	
              13531195

            	
              IF
      ANR OK

            	
              Stk
      buyback

            	
              MidCon

            	
              01/01/09

            	
              06/30/09

            	
              150,000

            	
              900,000

            	 	 
      	
              $8.43

            	 
      	
              (358,286)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              562,500

            	
              6,750,000

            	 	
              33.87%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              Key
      Bank

            	
              07/30/07

            	
              183268

            	
              IF
      HSC

            	
              Rockford
      acq.

            	
              Gulf
      Coast

            	
              01/01/08

            	
              07/31/08

            	
              62,857

            	
              440,000

            	 	 
      	
              $8.37

            	 
      	
              (392,340)

            
	
              ###-##-####

            	
              Key
      Bank

            	
              08/10/07

            	
              184037

            	
              IF
      PEPL

            	
              Stk
      Repurchase

            	
              MidCon

            	
              01/01/08

            	
              08/31/08

            	
              180,000

            	
              1,440,000

            	 	 
      	
              $7.68

            	 
      	
              (1,115,158)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              235,000

            	
              1,880,000

            	 	
              9.43%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              Wachovia

            	
              03/07/07

            	
              N151732

            	
              IF
      HSC

            	
              BlackBrush
      Acq

            	
              Gulf

            	
              03/01/09

            	
              12/31/09

            	
              78,000

            	
              780,000

            	 	 
      	
              $7.58

            	 
      	
              (1,096,145)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              78,000

            	
              780,000

            	 	
              3.91%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              Wells
      Fargo

            	
              07/31/07

            	
              207849

            	
              IF
      HSC

            	
              Rockford
      acq.

            	
              Gulf
      Coast

            	
              08/01/09

            	
              12/31/09

            	
              100,000

            	
              500,000

            	 	 
      	
              $8.35

            	 
      	
              (317,632)

            
	 
      	
              Wells
      Fargo

            	
              02/20/08

            	
              314016

            	
              IF
      HSC

            	
              Stk
      buyback

            	
              MidCon

            	
              01/01/09

            	
              12/31/09

            	
              255,833

            	
              3,070,000

            	 	 
      	
              $8.65

            	 
      	
              (1,754,191)

            
	 
      	
              Wells
      Fargo

            	
              03/17/08

            	
              323740

            	
              NYMEX
      HH

            	
              Stk
      buyback

            	
              Gulf
      Coast

            	
              01/01/09

            	
              12/31/09

            	
              106,667

            	
              1,280,000

            	 	 
      	
              $9.03

            	 
      	
              (610,294)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              970,000

            	
              4,850,000

            	 	
              24.34%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	 
      	
              Total
      GAS SWAPS - 2009

            	 
      	 
      	 
      	 
      	 
      	 
      	
              1,660,833

            	
              19,930,000

            	 	
              100.00%

            	
              $7.41

            	 
      	
              (12,140,114)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              Comerica

            	
              07/30/07

            	
              ESWP253

            	
              IF
      HSC

            	
              Rockford
      acq.

            	
              Gulf
      Coast

            	
              01/01/10

            	
              08/31/10

            	
              100,000

            	
              800,000

            	 	 
      	
              $8.16

            	 
      	
              (450,610)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              66,667

            	
              800,000

            	 	
              9.56%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              J
      Aron & Co

            	
              07/30/07

            	
              737564622

            	
              IF
      HSC

            	
              Rockford
      acq.

            	
              Gulf
      Coast

            	
              01/01/10

            	
              04/30/10

            	
              110,000

            	
              440,000

            	 	 
      	
              $8.67

            	 
      	
              (209,556)

            
	
              ###-##-####

            	
              J
      Aron & Co

            	
              12/22/06

            	
              892369629

            	
              IF
      NGPL

            	
              Atoka
      Drilling

            	
              MidCon

            	
              01/01/10

            	
              02/28/10

            	
              30,000

            	
              60,000

            	 	 
      	
              $7.60

            	 
      	
              (78,128)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              125,000

            	
              500,000

            	 	
              5.97%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              JPMorgan

            	
              11/01/06

            	
              4430129

            	
              IF
      El Paso Permian

            	
              Sweetie
      Peck Acq

            	
              Permian

            	
              01/01/10

            	
              12/31/10

            	
              90,833

            	
              1,090,000

            	 	 
      	
              $6.79

            	 
      	
              (1,380,739)

            
	
              ###-##-####

            	
              JPMorgan

            	
              01/09/07

            	
              4962486

            	
              IF
      ANR OK

            	
              Atoka

            	
              MidCon

            	
              01/01/10

            	
              02/28/10

            	
              30,000

            	
              60,000

            	 	 
      	
              $7.98

            	 
      	
              (57,260)

            
	
              ###-##-####

            	
              JPMorgan

            	
              07/30/07

            	
              9673554

            	
              IF
      HSC

            	
              Rockford
      acq.

            	
              Gulf
      Coast

            	
              01/01/10

            	
              08/31/10

            	
              160,000

            	
              1,280,000

            	 	 
      	
              $8.23

            	 
      	
              (633,274)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              120,833

            	
              2,430,000

            	 	
              29.03%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              Wachovia

            	
              03/07/07

            	
              N151732

            	
              IF
      HSC

            	
              BlackBrush
      Acq

            	
              Gulf

            	
              01/01/10

            	
              02/28/10

            	
              70,000

            	
              140,000

            	 	 
      	
              $8.37

            	 
      	
              (154,364)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              70,000

            	
              140,000

            	 	
              1.67%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              Wells
      Fargo

            	
              07/31/07

            	
              207849

            	
              IF
      HSC

            	
              Rockford
      acq.

            	
              Gulf
      Coast

            	
              01/01/10

            	
              08/31/10

            	
              100,000

            	
              800,000

            	 	 
      	
              $8.12

            	 
      	
              (480,879)

            
	 
      	
              Wells
      Fargo

            	
              02/20/08

            	
              314016

            	
              IF
      HSC

            	
              Stk
      buyback

            	
              MidCon

            	
              01/01/10

            	
              12/31/10

            	
              188,333

            	
              2,260,000

            	 	 
      	
              $8.42

            	 
      	
              (669,626)

            
	 
      	
              Wells
      Fargo

            	
              03/17/08

            	
              323740

            	
              NYMEX
      HH

            	
              Stk
      buyback

            	
              Gulf
      Coast

            	
              01/01/10

            	
              12/31/10

            	
              120,000

            	
              1,440,000

            	 	 
      	
              $8.66

            	 
      	
              (411,866)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              562,500

            	
              4,500,000

            	 	
              53.76%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	 
      	
              Total
      GAS SWAPS - 2010

            	 
      	 
      	 
      	 
      	 
      	 
      	
              697,500

            	
              8,370,000

            	 	
              100.00%

            	
              $6.68

            	 
      	
              (4,526,302)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              JPMorgan

            	
              11/01/06

            	
              4430129

            	
              IF
      El Paso Permian

            	
              Sweetie
      Peck Acq

            	
              Permian

            	
              01/01/11

            	
              10/31/11

            	
              88,000

            	
              880,000

            	 	 
      	
              $6.34

            	 
      	
              (1,331,711)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              88,000

            	
              880,000

            	 	
              100.00%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	 
      	
              Wells
      Fargo

            	
              02/20/08

            	
              314016

            	
              IF
      HSC

            	
              Stk
      buyback

            	
              MidCon

            	
              01/01/10

            	
              12/31/10

            	
              160,000

            	
              320,000

            	 	 
      	
              $8.89

            	 
      	
              (77,573)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              160,000

            	
              320,000

            	 	
              36.36%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	 
      	
              Total
      GAS SWAPS - 2011

            	 
      	 
      	 
      	 
      	 
      	 
      	
              88,000

            	
              880,000

            	 	
              136.36%

            	
              $9.57

            	 
      	
              (1,409,284)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              GAS
      COLLARS

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              BNP
      Paribas

            	
              10/11/05

            	
              93593
      (FLOOR)

            	
              PEPL

            	
              Bulk

            	
              MidCon

            	
              01/01/08

            	
              12/31/08

            	
              153,125

            	
              1,225,000

            	 	 
      	
              $6.290

            	 
      	
              131,845

            
	
              ###-##-####

            	
              BNP
      Paribas

            	
              10/11/05

            	
              93593
      (CAP)

            	
              PEPL

            	
              Bulk

            	
              MidCon

            	
              01/01/08

            	
              12/31/08

            	
              (153,125)

            	
              (1,225,000)

            	 	 
      	
              $9.290

            	 
      	
              (817,305)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              153,125

            	
              1,225,000

            	 	
              16.79%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              Comerica

            	
              10/11/05

            	
              ECAP0219
      (FLOOR)

            	
              HSC

            	
              Bulk

            	
              Arklatex

            	
              01/01/08

            	
              12/31/08

            	
              80,000

            	
              640,000

            	 	 
      	
              $6.570

            	 
      	
              46,665

            
	
              ###-##-####

            	
              Comerica

            	
              10/11/05

            	
              ECAP0219
      (CAP)

            	
              HSC

            	
              Bulk

            	
              Arklatex

            	
              01/01/08

            	
              12/31/08

            	
              (80,000)

            	
              (640,000)

            	 	 
      	
              $9.700

            	 
      	
              (648,793)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              80,000

            	
              640,000

            	 	
              8.77%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              JP
      Morgan

            	
              10/10/05

            	
              1568645
      (FLOOR)

            	
              CIG

            	
              Bulk

            	
              Rockies

            	
              01/01/08

            	
              12/31/08

            	
              240,000

            	
              1,920,000

            	 	 
      	
              $5.60

            	 
      	
              160,336

            
	
              ###-##-####

            	
              JP
      Morgan

            	
              10/10/05

            	
              1568645
      (CAP)

            	
              CIG

            	
              Bulk

            	
              Rockies

            	
              01/01/08

            	
              12/31/08

            	
              (240,000)

            	
              (1,920,000)

            	 	 
      	
              $8.72

            	 
      	
              (1,116,102)

            
	
              ###-##-####

            	
              JP
      Morgan

            	
              10/12/05

            	
              1588809
      (FLOOR)

            	
              PEPL

            	
              Bulk

            	
              MidCon

            	
              01/01/08

            	
              12/31/08

            	
              153,125

            	
              1,225,000

            	 	 
      	
              $6.28

            	 
      	
              130,468

            
	
              ###-##-####

            	
              JP
      Morgan

            	
              10/12/05

            	
              1588809
      (CAP)

            	
              PEPL

            	
              Bulk

            	
              MidCon

            	
              01/01/08

            	
              12/31/08

            	
              (153,125)

            	
              (1,225,000)

            	 	 
      	
              $9.42

            	 
      	
              (773,974)

            
	
              ###-##-####

            	
              JP
      Morgan

            	
              10/12/05

            	
              1589333
      (FLOOR)

            	
              NYMEX
      HH

            	
              Bulk

            	
              Gulf
      Coast

            	
              01/01/08

            	
              12/31/08

            	
              40,000

            	
              320,000

            	 	 
      	
              $7.00

            	 
      	
              22,916

            
	
              ###-##-####

            	
              JP
      Morgan

            	
              10/12/05

            	
              1589333
      (CAP)

            	
              NYMEX
      HH

            	
              Bulk

            	
              Gulf
      Coast

            	
              01/01/08

            	
              12/31/08

            	
              (40,000)

            	
              (320,000)

            	 	 
      	
              $10.57

            	 
      	
              (300,982)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              433,125

            	
              3,465,000

            	 	
              47.50%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              Wachovia

            	
              10/13/05

            	
              1258098
      (FLOOR)

            	
              PEPL

            	
              Bulk

            	
              MidCon

            	
              01/01/08

            	
              12/31/08

            	
              92,500

            	
              740,000

            	 	 
      	
              $6.280

            	 
      	
              78,950

            
	
              ###-##-####

            	
              Wachovia

            	
              10/13/05

            	
              1258098
      (CAP)

            	
              PEPL

            	
              Bulk

            	
              MidCon

            	
              01/01/08

            	
              12/31/08

            	
              (92,500)

            	
              (740,000)

            	 	 
      	
              $9.520

            	 
      	
              (448,335)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              92,500

            	
              740,000

            	 	
              10.14%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              Wells
      Fargo

            	
              10/12/05

            	
              COP2505
      (FLOOR)

            	
              PEPL

            	
              Bulk

            	
              MidCon

            	
              01/01/08

            	
              12/31/08

            	
              153,125

            	
              1,225,000

            	 	 
      	
              $6.280

            	 
      	
              130,468

            
	
              ###-##-####

            	
              Wells
      Fargo

            	
              10/12/05

            	
              COP2505
      (CAP)

            	
              PEPL

            	
              Bulk

            	
              MidCon

            	
              01/01/08

            	
              12/31/08

            	
              (153,125)

            	
              (1,225,000)

            	 	 
      	
              $9.480

            	 
      	
              (754,769)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              153,125

            	
              1,225,000

            	 	
              16.79%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	 
      	
              Total
      GAS COLLARS - 2008

            	 
      	 
      	 
      	 
      	 
      	 
      	
              607,917

            	
              7,295,000

            	 	
              100.00%

            	 
      	 
      	
              (4,158,612)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              BNP
      Paribas

            	
              10/12/05

            	
              93594
      (FLOOR)

            	
              PEPL

            	
              Bulk

            	
              MidCon

            	
              01/01/09

            	
              12/31/09

            	
              152,083

            	
              1,825,000

            	 	 
      	
              $5.30

            	 
      	
              257,448

            
	
              ###-##-####

            	
              BNP
      Paribas

            	
              10/12/05

            	
              93594
      (CAP)

            	
              PEPL

            	
              Bulk

            	
              MidCon

            	
              01/01/09

            	
              12/31/09

            	
              (152,083)

            	
              (1,825,000)

            	 	 
      	
              $9.20

            	 
      	
              (1,873,488)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              152,083

            	
              1,825,000

            	 	
              20.03%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              Comerica

            	
              10/13/05

            	
              ECAP0220
      (FLOOR)

            	
              PEPL

            	
              Bulk

            	
              MidCon

            	
              01/01/09

            	
              12/31/09

            	
              155,000

            	
              1,860,000

            	 	 
      	
              $5.300

            	 
      	
              262,004

            
	
              ###-##-####

            	
              Comerica

            	
              10/13/05

            	
              ECAP0220
      (CAP)

            	
              PEPL

            	
              Bulk

            	
              MidCon

            	
              01/01/09

            	
              12/31/09

            	
              (155,000)

            	
              (1,860,000)

            	 	 
      	
              $9.390

            	 
      	
              (1,817,150)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              155,000

            	
              1,860,000

            	 	
              20.42%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              JP
      Morgan

            	
              10/10/05

            	
              1568646
      (FLOOR)

            	
              CIG

            	
              Bulk

            	
              Rockies

            	
              01/01/09

            	
              12/31/09

            	
              200,000

            	
              2,400,000

            	 	 
      	
              $4.75

            	 
      	
              401,111

            
	
              ###-##-####

            	
              JP
      Morgan

            	
              10/10/05

            	
              1568646
      (CAP)

            	
              CIG

            	
              Bulk

            	
              Rockies

            	
              01/01/09

            	
              12/31/09

            	
              (200,000)

            	
              (2,400,000)

            	 	 
      	
              $8.82

            	 
      	
              (1,763,327)

            
	
              ###-##-####

            	
              JP
      Morgan

            	
              10/12/05

            	
              1589334
      (FLOOR)

            	
              NYMEX
      HH

            	
              Bulk

            	
              Gulf
      Coast

            	
              01/01/09

            	
              12/31/09

            	
              30,000

            	
              360,000

            	 	 
      	
              $6.00

            	 
      	
              51,704

            
	
              ###-##-####

            	
              JP
      Morgan

            	
              10/12/05

            	
              1589334
      (CAP)

            	
              NYMEX
      HH

            	
              Bulk

            	
              Gulf
      Coast

            	
              01/01/09

            	
              12/31/09

            	
              (30,000)

            	
              (360,000)

            	 	 
      	
              $10.35

            	 
      	
              (454,051)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              230,000

            	
              2,760,000

            	 	
              30.30%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              Wachovia

            	
              10/11/05

            	
              1258100
      (FLOOR)

            	
              PEPL

            	
              Bulk

            	
              MidCon

            	
              01/01/09

            	
              12/31/09

            	
              152,083

            	
              1,825,000

            	 	 
      	
              $5.300

            	 
      	
              257,448

            
	
              ###-##-####

            	
              Wachovia

            	
              10/11/05

            	
              1258100
      (CAP)

            	
              PEPL

            	
              Bulk

            	
              MidCon

            	
              01/01/09

            	
              12/31/09

            	
              (152,083)

            	
              (1,825,000)

            	 	 
      	
              $9.170

            	 
      	
              (1,889,184)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              152,083

            	
              1,825,000

            	 	
              20.03%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              Wells
      Fargo

            	
              10/12/05

            	
              COP2506
      (FLOOR)

            	
              HSC

            	
              Bulk

            	
              Arklatex

            	
              01/01/09

            	
              12/31/09

            	
              70,000

            	
              840,000

            	 	 
      	
              $5.570

            	 
      	
              100,052

            
	
              ###-##-####

            	
              Wells
      Fargo

            	
              10/12/05

            	
              COP2506
      (CAP)

            	
              HSC

            	
              Bulk

            	
              Arklatex

            	
              01/01/09

            	
              12/31/09

            	
              (70,000)

            	
              (840,000)

            	 	 
      	
              $9.490

            	 
      	
              (1,109,372)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              70,000

            	
              840,000

            	 	
              9.22%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	 
      	
              Total
      GAS COLLARS - 2009

            	 
      	 
      	 
      	 
      	 
      	 
      	
              759,167

            	
              9,110,000

            	 	
              100.00%

            	 
      	 
      	
              (7,576,805)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              Comerica

            	
              10/12/05

            	
              ECAP0222
      (FLOOR)

            	
              PEPL

            	
              Bulk

            	
              MidCon

            	
              01/01/10

            	
              12/31/10

            	
              100,000

            	
              1,200,000

            	 	 
      	
              $5.31

            	 
      	
              246,119

            
	
              ###-##-####

            	
              Comerica

            	
              10/12/05

            	
              ECAP0222
      (CAP)

            	
              PEPL

            	
              Bulk

            	
              MidCon

            	
              01/01/10

            	
              12/31/10

            	
              (100,000)

            	
              (1,200,000)

            	 	 
      	
              $7.60

            	 
      	
              (1,620,882)

            
	
              ###-##-####

            	
              Comerica

            	
              10/12/05

            	
              ECAP0221
      (FLOOR)

            	
              NYMEX
      HH

            	
              Bulk

            	
              Gulf
      Coast

            	
              01/01/10

            	
              12/31/10

            	
              20,000

            	
              240,000

            	 	 
      	
              $6.00

            	 
      	
              52,014

            
	
              ###-##-####

            	
              Comerica

            	
              10/12/05

            	
              ECAP0221
      (CAP)

            	
              NYMEX
      HH

            	
              Bulk

            	
              Gulf
      Coast

            	
              01/01/10

            	
              12/31/10

            	
              (20,000)

            	
              (240,000)

            	 	 
      	
              $8.38

            	 
      	
              (398,940)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              120,000

            	
              1,440,000

            	 	
              18.40%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              JP
      Morgan

            	
              10/10/05

            	
              1568647
      (FLOOR)

            	
              CIG

            	
              Bulk

            	
              Rockies

            	
              01/01/10

            	
              12/31/10

            	
              170,000

            	
              2,040,000

            	 	 
      	
              $4.85

            	 
      	
              586,231

            
	
              ###-##-####

            	
              JP
      Morgan

            	
              10/10/05

            	
              1568647
      (CAP)

            	
              CIG

            	
              Bulk

            	
              Rockies

            	
              01/01/10

            	
              12/31/10

            	
              (170,000)

            	
              (2,040,000)

            	 	 
      	
              $7.08

            	 
      	
              (1,881,744)

            
	
              ###-##-####

            	
              JP
      Morgan

            	
              10/13/05

            	
              1591124
      (FLOOR)

            	
              PEPL

            	
              Bulk

            	
              MidCon

            	
              01/01/10

            	
              12/31/10

            	
              160,000

            	
              1,920,000

            	 	 
      	
              $5.31

            	 
      	
              393,791

            
	
              ###-##-####

            	
              JP
      Morgan

            	
              10/13/05

            	
              1591124
      (CAP)

            	
              PEPL

            	
              Bulk

            	
              MidCon

            	
              01/01/10

            	
              12/31/10

            	
              (160,000)

            	
              (1,920,000)

            	 	 
      	
              $7.69

            	 
      	
              (2,524,417)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              330,000

            	
              3,960,000

            	 	
              50.61%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              Wachovia

            	
              10/12/05

            	
              1266587
      (FLOOR)

            	
              HSC

            	
              Bulk

            	
              Arklatex

            	
              01/01/10

            	
              12/31/10

            	
              50,000

            	
              600,000

            	 	 
      	
              $5.570

            	 
      	
              104,385

            
	
              ###-##-####

            	
              Wachovia

            	
              10/12/05

            	
              1266587
      (CAP)

            	
              HSC

            	
              Bulk

            	
              Arklatex

            	
              01/01/10

            	
              12/31/10

            	
              (50,000)

            	
              (600,000)

            	 	 
      	
              $7.880

            	 
      	
              (1,009,148)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              50,000

            	
              600,000

            	 	
              7.67%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              Wells
      Fargo

            	
              10/11/05

            	
              COP2507
      (FLOOR)

            	
              PEPL

            	
              Bulk

            	
              MidCon

            	
              01/01/10

            	
              12/31/10

            	
              152,083

            	
              1,825,000

            	 	 
      	
              $5.300

            	 
      	
              371,105

            
	
              ###-##-####

            	
              Wells
      Fargo

            	
              10/11/05

            	
              COP2507
      (CAP)

            	
              PEPL

            	
              Bulk

            	
              MidCon

            	
              01/01/10

            	
              12/31/10

            	
              (152,083)

            	
              (1,825,000)

            	 	 
      	
              $7.540

            	 
      	
              (2,504,579)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              152,083

            	
              1,825,000

            	 	
              23.32%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	 
      	
              Total
      GAS COLLARS - 2010

            	 
      	 
      	 
      	 
      	 
      	 
      	
              652,083

            	
              7,825,000

            	 	
              100.00%

            	 
      	 
      	
              (8,186,065)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              BNP

            	
              10/10/05

            	
              93595
      (FLOOR)

            	
              CIG

            	
              Bulk

            	
              Rockies

            	
              01/01/11

            	
              12/31/11

            	
              150,000

            	
              1,800,000

            	 	 
      	
              $5.00

            	 
      	
              459,650

            
	
              ###-##-####

            	
              BNP

            	
              10/10/05

            	
              93595
      (CAP)

            	
              CIG

            	
              Bulk

            	
              Rockies

            	
              01/01/11

            	
              12/31/11

            	
              (150,000)

            	
              (1,800,000)

            	 	 
      	
              $6.32

            	 
      	
              (2,478,997)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              150,000

            	
              1,800,000

            	 	
              27.17%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              Comerica

            	
              10/12/05

            	
              ECAP0223
      (FLOOR)

            	
              NYMEX
      HH

            	
              Bulk

            	
              Gulf
      Coast

            	
              01/01/11

            	
              12/31/11

            	
              10,000

            	
              120,000

            	 	 
      	
              $6.00

            	 
      	
              30,068

            
	
              ###-##-####

            	
              Comerica

            	
              10/12/05

            	
              ECAP0223
      (CAP)

            	
              NYMEX
      HH

            	
              Bulk

            	
              Gulf
      Coast

            	
              01/01/11

            	
              12/31/11

            	
              (10,000)

            	
              (120,000)

            	 	 
      	
              $7.25

            	 
      	
              (246,833)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              10,000

            	
              120,000

            	 	
              1.81%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              JP
      Morgan

            	
              10/13/05

            	
              1591128
      (FLOOR)

            	
              PEPL

            	
              Bulk

            	
              MidCon

            	
              01/01/11

            	
              12/31/11

            	
              200,000

            	
              2,400,000

            	 	 
      	
              $5.31

            	 
      	
              95,168

            
	
              ###-##-####

            	
              JP
      Morgan

            	
              10/13/05

            	
              1591128
      (CAP)

            	
              PEPL

            	
              Bulk

            	
              MidCon

            	
              01/01/11

            	
              12/31/11

            	
              (200,000)

            	
              (2,400,000)

            	 	 
      	
              $6.58

            	 
      	
              (1,016,909)

            
	
              ###-##-####

            	
              JP
      Morgan

            	
              10/12/05

            	
              1589331
      (FLOOR)

            	
              HSC

            	
              Bulk

            	
              Arklatex

            	
              01/01/11

            	
              12/31/11

            	
              40,000

            	
              480,000

            	 	 
      	
              $5.57

            	 
      	
              497,849

            
	
              ###-##-####

            	
              JP
      Morgan

            	
              10/12/05

            	
              1589331
      (CAP)

            	
              HSC

            	
              Bulk

            	
              Arklatex

            	
              01/01/11

            	
              12/31/11

            	
              (40,000)

            	
              (480,000)

            	 	 
      	
              $6.77

            	 
      	
              (4,411,072)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              240,000

            	
              2,880,000

            	 	
              43.47%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              Wachovia

            	
              10/11/05

            	
              1258101
      (FLOOR)

            	
              PEPL

            	
              Bulk

            	
              MidCon

            	
              01/01/11

            	
              12/31/11

            	
              152,083

            	
              1,825,000

            	 	 
      	
              $5.30

            	 
      	
              375,252

            
	
              ###-##-####

            	
              Wachovia

            	
              10/112005

            	
              1258101
      (CAP)

            	
              PEPL

            	
              Bulk

            	
              MidCon

            	
              01/01/11

            	
              12/31/11

            	
              (152,083)

            	
              (1,825,000)

            	 	 
      	
              $6.42

            	 
      	
              (3,509,543)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              152,083

            	
              1,825,000

            	 	
              27.55%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	 
      	
              Total
      GAS COLLARS - 2011

            	 
      	 
      	 
      	 
      	 
      	 
      	
              552,083

            	
              6,625,000

            	 	
              100.00%

            	 
      	 
      	
              (10,205,367)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	 
      	
              Oil
      SWAPS

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              BNP
      Paribas

            	
              10/12/06

            	
              118518

            	
              NYMEX

            	
              Henry
      Drilling

            	
              Permian

            	
              01/01/08

            	
              12/31/08

            	
              1,929

            	
              17,364

            	 	 
      	
              $66.880

            	 
      	
              (689,769)

            
	
              ###-##-####

            	
              BNP
      Paribas

            	
              10/26/06

            	
              119702

            	
              NYMEX

            	
              Sweetie
      Peck Acq

            	
              Permian

            	
              01/01/08

            	
              12/31/08

            	
              19,293

            	
              173,636

            	 	 
      	
              $67.30

            	 
      	
              (6,833,786)

            
	
              ###-##-####

            	
              BNP
      Paribas

            	
              12/21/06

            	
              124753

            	
              NYMEX

            	
              Half
      East Drilling

            	
              Permian

            	
              01/01/08

            	
              12/31/08

            	
              2,338

            	
              21,045

            	 	 
      	
              $68.42

            	 
      	
              (817,901)

            
	
              ###-##-####

            	
              BNP
      Paribas

            	
              10/27/06

            	
              119812

            	
              NYMEX

            	
              Sweetie
      Peck Acq

            	
              Permian

            	
              06/01/08

            	
              12/31/08

            	
                        10,000

            	
                            70,000

            	 	 
      	
              $68.56

            	 
      	
              (2,528,784)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              23,504

            	
              282,045

            	 	
              20.94%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              Comerica

            	
              8/3/2006

            	
              ESWP237

            	
              NYMEX

            	
              EXL
      Acq.

            	
              Permian

            	
              01/01/08

            	
              12/31/08

            	
              1,929

            	
              17,364

            	 	 
      	
              $76.34

            	 
      	
              (522,293)

            
	
              ###-##-####

            	
              Comerica

            	
              11/6/2006

            	
              ESWP247

            	
              NYMEX

            	
              Swetie
      Peck Acq

            	
              Permian

            	
              01/01/08

            	
              12/31/08

            	
              17,364

            	
              156,273

            	 	 
      	
              $67.99

            	 
      	
              (6,044,205)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              14,470

            	
              173,637

            	 	
              12.89%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              J
      Aron & Co

            	
              09/25/06

            	
              889669056

            	
              NYMEX

            	
              Henry
      Drilling

            	
              Permian

            	
              01/01/08

            	
              12/31/08

            	
              1,929

            	
              17,364

            	 	 
      	
              $66.39

            	 
      	
              (699,813)

            
	
              ###-##-####

            	
              J
      Aron & Co

            	
              09/21/07

            	
              900789521

            	
              WCS

            	
              General
      Rockies

            	
              Williston

            	
              01/01/08

            	
              10/31/08

            	
              15,000

            	
              90,000

            	 	 
      	
              $53.36

            	 
      	
              (4,720,345)

            
	
              ###-##-####

            	
              J
      Aron & Co

            	
              6/15/2005

            	
              WNP2HG

            	
              NYMEX

            	
              Wold

            	
              Williston

            	
              01/01/08

            	
              07/31/08

            	
                           4,602

            	
                            18,409

            	 	 
      	
              $56.55

            	 
      	
              (1,005,159)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              10,481

            	
              125,773

            	 	
              9.34%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              JPMorgan

            	
              10/27/2006

            	
              4389629

            	
              NYMEX

            	
              Sweetie
      Peck Acq

            	
              Permian

            	
              01/01/08

            	
              12/31/08

            	
                        12,540

            	
                          112,864

            	 	 
      	
              $68.62

            	 
      	
              (4,292,669)

            
	
              ###-##-####

            	
              JPMorgan

            	
              5/21/2007

            	
              7085414

            	
              NYMEX

            	
              General

            	
              Permian

            	
              01/01/08

            	
              12/31/08

            	
                        19,293

            	
                          173,636

            	 	 
      	
              $71.54

            	 
      	
              (6,085,263)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              23,875

            	
              286,500

            	 	
              21.28%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              Key
      Bank

            	
              10/27/2006

            	
              168437

            	
              NYMEX

            	
              Sweetie
      Peck Acq

            	
              Permian

            	
              01/01/08

            	
              12/31/08

            	
                        22,187

            	
                          199,682

            	 	 
      	
              $68.34

            	 
      	
              (7,650,949)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              16,640

            	
              199,682

            	 	
              14.83%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              Wachovia

            	
              10/27/2006

            	
              1618348

            	
              NYMEX

            	
              Sweetie
      Peck Acq

            	
              Permian

            	
              02/01/08

            	
              12/31/08

            	
                        11,727

            	
                          105,545

            	 	 
      	
              $68.36

            	 
      	
              (4,049,360)

            
	
              ###-##-####

            	
              Wachovia

            	
              6/21/2007

            	
              N220968

            	
              NYMEX

            	
              Halff
      East Drilling

            	
              Permian

            	
              01/01/08

            	
              12/31/08

            	
                           4,677

            	
                            42,091

            	 	 
      	
              $72.00

            	 
      	
              (1,477,464)

            
	
              ###-##-####

            	
              Wachovia

            	
              07/13/07

            	
              N229520

            	
              NYMEX
      WTI

            	
              General

            	
              Permian

            	
              04/01/08

            	
              08/31/08

            	
              18,727

            	
              93,636

            	 	 
      	
              $73.53

            	 
      	
              (3,306,326)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              20,106

            	
              241,272

            	 	
              17.92%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              Wells
      Fargo

            	
              10/27/06

            	
              137532

            	
              NYMEX

            	
              Sweetie
      peck Acq

            	
              Permian

            	
              01/01/08

            	
              12/31/08

            	
              4,192

            	
              37,727

            	 	 
      	
              $68.43

            	 
      	
              (1,327,392)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              3,144

            	
              37,727

            	 	
              2.80%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	 
      	
              Total
      OIL SWAPS - 2008

            	 
      	 
      	 
      	 
      	 
      	 
      	
              112,220

            	
              1,346,636

            	 	
              100.00%

            	
              $67.99

            	 
      	
              (52,051,478)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              BNP
      Paribas

            	
              10/12/06

            	
              118518

            	
              NYMEX

            	
              Henry
      Drilling

            	
              Permian

            	
              01/01/09

            	
              09/30/09

            	
              1,222

            	
              11,000

            	 	 
      	
              $66.570

            	 
      	
              (378,263)

            
	
              ###-##-####

            	
              BNP
      Paribas

            	
              10/26/06

            	
              119702

            	
              NYMEX

            	
              Sweetie
      Peck Acq

            	
              Permian

            	
              01/01/09

            	
              12/31/09

            	
              20,000

            	
              240,000

            	 	 
      	
              $67.44

            	 
      	
              (7,871,889)

            
	
              ###-##-####

            	
              BNP
      Paribas

            	
              12/21/06

            	
              124753

            	
              NYMEX

            	
              Half
      East Drilling

            	
              Permian

            	
              01/01/09

            	
              12/31/09

            	
              2,000

            	
              24,000

            	 	 
      	
              $68.13

            	 
      	
              (771,196)

            
	
              ###-##-####

            	
              BNP
      Paribas

            	
              10/27/06

            	
              119812

            	
              NYMEX

            	
              Sweetie
      Peck Acq

            	
              Permian

            	
              01/01/09

            	
              12/31/09

            	
                        10,000

            	
                          120,000

            	 	 
      	
              $67.71

            	 
      	
              (3,905,076)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              33,222

            	
              395,000

            	 	
              28.98%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              Comerica

            	
              8/3/2006

            	
              ESWP237

            	
              NYMEX

            	
              EXL
      Acq.

            	
              Permian

            	
              01/01/09

            	
              09/30/09

            	
              2,000

            	
              18,000

            	 	 
      	
              $74.76

            	 
      	
              (471,461)

            
	
              ###-##-####

            	
              Comerica

            	
              11/6/2006

            	
              ESWP247

            	
              NYMEX

            	
              Swetie
      Peck Acq

            	
              Permian

            	
              01/01/09

            	
              12/31/09

            	
              18,000

            	
              216,000

            	 	 
      	
              $67.37

            	 
      	
              (7,100,813)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              20,000

            	
              234,000

            	 	
              17.17%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              J
      Aron & Co

            	
              09/25/06

            	
              889669056

            	
              NYMEX

            	
              Henry
      Drilling

            	
              Permian

            	
              01/01/09

            	
              09/30/09

            	
              2,000

            	
              18,000

            	 	 
      	
              $65.24

            	 
      	
              (637,852)

            
	
              ###-##-####

            	
              J
      Aron & Co

            	
              10/27/06

            	
              890618018

            	
              NYMEX

            	
              Sweetie
      Peck Acq

            	
              Permian

            	
              01/01/09

            	
              12/31/09

            	
              23,000

            	
              276,000

            	 	 
      	
              $67.65

            	 
      	
              (8,998,238)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              25,000

            	
              294,000

            	 	
              21.57%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              JPMorgan

            	
              10/27/2006

            	
              4389629

            	
              NYMEX

            	
              Sweetie
      Peck Acq

            	
              Permian

            	
              01/01/09

            	
              12/31/09

            	
                           8,000

            	
                            96,000

            	 	 
      	
              $67.91

            	 
      	
              (3,105,792)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              8,000

            	
              96,000

            	 	
              7.04%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              Key
      Bank

            	
              10/27/2006

            	
              168462

            	
              NYMEX

            	
              Sweetie
      Peck Acq

            	
              Permian

            	
              01/01/09

            	
              12/31/09

            	
                        10,000

            	
                          120,000

            	 	 
      	
              $67.60

            	 
      	
              (3,917,212)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              10,000

            	
              120,000

            	 	
              8.80%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              Wachovia

            	
              10/27/2006

            	
              1618348

            	
              NYMEX

            	
              Sweetie
      Peck Acq

            	
              Permian

            	
              01/01/09

            	
              12/31/09

            	
                        14,333

            	
                          172,000

            	 	 
      	
              $67.65

            	 
      	
              (5,645,959)

            
	
              ###-##-####

            	
              Wachovia

            	
              6/21/2007

            	
              N220968

            	
              NYMEX

            	
              Halff
      East Drilling

            	
              Permian

            	
              01/01/09

            	
              07/31/09

            	
                           4,000

            	
                            28,000

            	 	 
      	
              $72.09

            	 
      	
              (815,907)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              18,333

            	
              200,000

            	 	
              14.67%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              Wells
      Fargo

            	
              10/27/06

            	
              137532

            	
              NYMEX

            	
              Sweetie
      peck Acq

            	
              Permian

            	
              01/01/09

            	
              12/31/09

            	
              2,000

            	
              24,000

            	 	 
      	
              $67.77

            	 
      	
              (779,552)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              2,000

            	
              24,000

            	 	
              1.76%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	 
      	
              Total
      OIL SWAPS - 2009

            	 
      	 
      	 
      	 
      	 
      	 
      	
              113,583

            	
              1,363,000

            	 	
              100.00%

            	
              $67.74

            	 
      	
              (44,399,210)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              BNP
      Paribas

            	
              10/26/06

            	
              119702

            	
              NYMEX

            	
              Sweetie
      Peck Acq

            	
              Permian

            	
              01/01/10

            	
              12/31/10

            	
              20,000

            	
              240,000

            	 	 
      	
              $66.57

            	 
      	
              (7,295,417)

            
	
              ###-##-####

            	
              BNP
      Paribas

            	
              12/21/06

            	
              124753

            	
              NYMEX

            	
              Half
      East Drilling

            	
              Permian

            	
              01/01/10

            	
              12/31/10

            	
              2,000

            	
              24,000

            	 	 
      	
              $67.54

            	 
      	
              (707,677)

            
	
              ###-##-####

            	
              BNP
      Paribas

            	
              10/27/06

            	
              119812

            	
              NYMEX

            	
              Sweetie
      Peck Acq

            	
              Permian

            	
              01/01/10

            	
              12/31/10

            	
                        10,000

            	
                          120,000

            	 	 
      	
              $66.85

            	 
      	
              (3,615,950)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              32,000

            	
              384,000

            	 	
              30.99%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              Comerica

            	
              11/6/2006

            	
              ESWP247

            	
              NYMEX

            	
              Swetie
      Peck Acq

            	
              Permian

            	
              01/01/10

            	
              12/31/10

            	
              18,000

            	
              216,000

            	 	 
      	
              $66.24

            	 
      	
              (6,631,831)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              18,000

            	
              216,000

            	 	
              17.43%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              J
      Aron & Co

            	
              10/27/06

            	
              890618018

            	
              NYMEX

            	
              Sweetie
      Peck Acq

            	
              Permian

            	
              01/01/10

            	
              12/31/10

            	
              23,000

            	
              276,000

            	 	 
      	
              $66.42

            	 
      	
              (8,427,857)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              23,000

            	
              276,000

            	 	
              22.28%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              JPMorgan

            	
              10/27/2006

            	
              4389629

            	
              NYMEX

            	
              Sweetie
      Peck Acq

            	
              Permian

            	
              01/01/10

            	
              12/31/10

            	
                           5,000

            	
                            60,000

            	 	 
      	
              $66.60

            	 
      	
              (1,823,671)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              5,000

            	
              60,000

            	 	
              4.84%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              Key
      Bank

            	
              10/27/2006

            	
              168462

            	
              NYMEX

            	
              Sweetie
      Peck Acq

            	
              Permian

            	
              01/01/10

            	
              12/31/10

            	
                        10,000

            	
                          120,000

            	 	 
      	
              $66.35

            	 
      	
              (3,672,072)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              10,000

            	
              120,000

            	 	
              9.69%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              Wachovia

            	
              10/27/2006

            	
              1618348

            	
              NYMEX

            	
              Sweetie
      Peck Acq

            	
              Permian

            	
              01/01/10

            	
              12/31/10

            	
                        14,250

            	
                          171,000

            	 	 
      	
              $66.33

            	 
      	
              (5,239,068)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              14,250

            	
              171,000

            	 	
              13.80%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              Wells
      Fargo

            	
              10/27/06

            	
              137532

            	
              NYMEX

            	
              Sweetie
      peck Acq

            	
              Permian

            	
              01/01/10

            	
              12/31/10

            	
              1,000

            	
              12,000

            	 	 
      	
              $66.56

            	 
      	
              (364,856)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              1,000

            	
              12,000

            	 	
              0.97%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	 
      	
              Total
      OIL SWAPS - 2010

            	 
      	 
      	 
      	 
      	 
      	 
      	
              103,250

            	
              1,239,000

            	 	
              100.00%

            	
              $66.47

            	 
      	
              (37,778,399)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              BNP
      Paribas

            	
              10/26/06

            	
              119702

            	
              NYMEX

            	
              Sweetie
      Peck Acq

            	
              Permian

            	
              01/01/11

            	
              11/30/11

            	
              20,000

            	
              220,000

            	 	 
      	
              $65.47

            	 
      	
              (6,466,600)

            
	
              ###-##-####

            	
              BNP
      Paribas

            	
              12/21/06

            	
              124753

            	
              NYMEX

            	
              Half
      East Drilling

            	
              Permian

            	
              01/01/11

            	
              01/31/11

            	
              2,000

            	
              2,000

            	 	 
      	
              $67.21

            	 
      	
              (57,194)

            
	
              ###-##-####

            	
              BNP
      Paribas

            	
              10/27/06

            	
              119812

            	
              NYMEX

            	
              Sweetie
      Peck Acq

            	
              Permian

            	
              01/01/11

            	
              11/30/11

            	
              10,000

            	
                          110,000

            	 	 
      	
              $65.98

            	 
      	
              (3,181,942)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              32,000

            	
              332,000

            	 	
              32.17%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              Comerica

            	
              11/6/2006

            	
              ESWP247

            	
              NYMEX

            	
              Swetie
      Peck Acq

            	
              Permian

            	
              01/01/11

            	
              11/30/11

            	
              18,000

            	
              198,000

            	 	 
      	
              $65.02

            	 
      	
              (5,899,981)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              18,000

            	
              198,000

            	 	
              19.19%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              J
      Aron & Co

            	
              10/27/06

            	
              890618018

            	
              NYMEX

            	
              Sweetie
      Peck Acq

            	
              Permian

            	
              01/01/11

            	
              11/30/11

            	
              23,000

            	
              253,000

            	 	 
      	
              $65.29

            	 
      	
              (7,478,422)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              23,000

            	
              253,000

            	 	
              24.52%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              JPMorgan

            	
              10/27/2006

            	
              4389629

            	
              NYMEX

            	
              Sweetie
      Peck Acq

            	
              Permian

            	
              01/01/11

            	
              11/30/11

            	
              4,000

            	
                            44,000

            	 	 
      	
              $65.33

            	 
      	
              (1,298,687)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              4,000

            	
              44,000

            	 	
              4.26%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              Key
      Bank

            	
              10/27/2006

            	
              168462

            	
              NYMEX

            	
              Sweetie
      Peck Acq

            	
              Permian

            	
              01/01/11

            	
              11/30/11

            	
              10,000

            	
                          110,000

            	 	 
      	
              $65.20

            	 
      	
              (3,259,401)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              10,000

            	
              110,000

            	 	
              10.66%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              Wachovia

            	
              10/27/2006

            	
              1618348

            	
              NYMEX

            	
              Sweetie
      Peck Acq

            	
              Permian

            	
              01/01/11

            	
              10/30/11

            	
                           8,400

            	
                            84,000

            	 	 
      	
              $65.42

            	 
      	
              (2,502,752)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              8,400

            	
              84,000

            	 	
              8.14%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              Wells
      Fargo

            	
              10/27/06

            	
              137532

            	
              NYMEX

            	
              Sweetie
      peck Acq

            	
              Permian

            	
              01/01/11

            	
              11/30/11

            	
              1,000

            	
              11,000

            	 	 
      	
              $65.33

            	 
      	
              (324,734)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              1,000

            	
              11,000

            	 	
              1.07%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	 
      	
              Total
      OIL SWAPS - 2011

            	 
      	 
      	 
      	 
      	 
      	 
      	
              86,000

            	
              1,032,000

            	 	
              100.00%

            	
              $65.36

            	 
      	
              (30,469,713)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	 
      	
              Oil
      COLLARS

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              BNP
      Paribas

            	
              10/12/05

            	
              93576
      (FLOOR)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/08

            	
              12/31/08

            	
              14,747

            	
              132,727

            	 	 
      	
              $50.00

            	 
      	
              418

            
	
              ###-##-####

            	
              BNP
      Paribas

            	
              10/12/05

            	
              93576
      (CAP)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/08

            	
              12/31/08

            	
              (15,250)

            	
              (132,727)

            	 	 
      	
              $72.15

            	 
      	
              (4,599,796)

            
	
              ###-##-####

            	
              BNP
      Paribas

            	
              10/13/05

            	
              93577
      (FLOOR)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/08

            	
              12/31/08

            	
              16,399

            	
              147,591

            	 	 
      	
              $50.00

            	 
      	
              463

            
	
              ###-##-####

            	
              BNP
      Paribas

            	
              10/13/05

            	
              93577
      (CAP)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/08

            	
              12/31/08

            	
              (16,399)

            	
              (147,591)

            	 	 
      	
              $70.45

            	 
      	
              (5,367,842)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              31,146

            	
              280,318

            	 	
              23.18%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              Comerica

            	
              10/11/05

            	
              ECAP0207
      (FLOOR)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/08

            	
              12/31/08

            	
              14,747

            	
              132,727

            	 	 
      	
              $50.00

            	 
      	
              418

            
	
              ###-##-####

            	
              Comerica

            	
              10/11/05

            	
              ECAP0207
      (CAP)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/08

            	
              12/31/08

            	
              (14,747)

            	
              (132,727)

            	 	 
      	
              $70.50

            	 
      	
              (4,816,979)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              14,747

            	
              132,727

            	 	
              10.97%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              JP
      Morgan

            	
              10/10/05

            	
              1568305/07
      (FLOOR)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/08

            	
              12/31/08

            	
              29,495

            	
              265,455

            	 	 
      	
              $50.00

            	 
      	
              835

            
	
              ###-##-####

            	
              JP
      Morgan

            	
              10/10/05

            	
              1568305/07
      (CAP)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/08

            	
              12/31/08

            	
              (29,495)

            	
              (265,455)

            	 	 
      	
              $66.75

            	 
      	
              (10,629,450)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              29,495

            	
              265,455

            	 	
              21.95%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	 
      	
              Key
      Bank

            	
              04/03/08

            	
              210600
      (FLOOR)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/08

            	
              12/31/08

            	
              34,750

            	
              278,000

            	 	 
      	
              $92.50

            	 
      	
              0

            
	 
      	
              Key
      Bank

            	
              04/03/08

            	
              210600
      (CAP)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/08

            	
              12/31/08

            	
              (34,750)

            	
              (278,000)

            	 	 
      	
              $114.50

            	 
      	
              0

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              34,750

            	
              278,000

            	 	
              22.99%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              RBC

            	
              10/12/05

            	
              26590
      (FLOOR)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/08

            	
              12/31/08

            	
              14,747

            	
              132,727

            	 	 
      	
              $50.00

            	 
      	
              418

            
	
              ###-##-####

            	
              RBC

            	
              10/12/05

            	
              26590
      (CAP)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/08

            	
              12/31/08

            	
              (14,747)

            	
              (132,727)

            	 	 
      	
              $72.20

            	 
      	
              (4,593,236)

            
	
              ###-##-####

            	
              RBC

            	
              10/11/05

            	
              26592
      (FLOOR)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/08

            	
              12/31/08

            	
              14,747

            	
              132,727

            	 	 
      	
              $50.00

            	 
      	
              418

            
	
              ###-##-####

            	
              RBC

            	
              10/11/05

            	
              26592
      (CAP)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/08

            	
              12/31/08

            	
              (14,747)

            	
              (132,727)

            	 	 
      	
              $70.90

            	 
      	
              (4,764,220)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              29,495

            	
              265,454

            	 	
              21.95%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              Wachovia

            	
              10/10/05

            	
              1258088
      (FLOOR)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/08

            	
              12/31/08

            	
              14,747

            	
              132,727

            	 	 
      	
              $50.00

            	 
      	
              418

            
	
              ###-##-####

            	
              Wachovia

            	
              10/10/05

            	
              1258088
      (CAP)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/08

            	
              12/31/08

            	
              (14,747)

            	
              (132,727)

            	 	 
      	
              $67.80

            	 
      	
              (5,174,815)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              14,747

            	
              132,727

            	 	
              10.97%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              Wells
      Fargo

            	
              10/11/05

            	
              COP2496
      (FLOOR)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/08

            	
              12/31/08

            	
              14,747

            	
              132,727

            	 	 
      	
              $50.00

            	 
      	
              418

            
	
              ###-##-####

            	
              Wells
      Fargo

            	
              10/11/05

            	
              COP2496
      (CAP)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/08

            	
              12/31/08

            	
              (14,747)

            	
              (132,727)

            	 	 
      	
              $70.85

            	 
      	
              (4,770,816)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              14,747

            	
              132,727

            	 	
              10.97%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	 
      	
              Total
      OIL Collars - 2008

            	 
      	 
      	 
      	 
      	 
      	 
      	
              100,784

            	
              1,209,408

            	 	
              100.00%

            	 
      	 
      	
              (44,713,348)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              BNP
      Paribas

            	
              10/12/05

            	
              93578
      (FLOOR)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/09

            	
              12/31/09

            	
              15,208

            	
              182,500

            	 	 
      	
              $50.00

            	 
      	
              32,243

            
	
              ###-##-####

            	
              BNP
      Paribas

            	
              10/12/05

            	
              93578
      (CAP)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/09

            	
              12/31/09

            	
              (15,208)

            	
              (182,500)

            	 	 
      	
              $69.15

            	 
      	
              (5,965,525)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              15,208

            	
              182,500

            	 	
              11.96%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              Comerica

            	
              10/11/05

            	
              ECAP0208
      (FLOOR)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/09

            	
              12/31/09

            	
              15,208

            	
              182,500

            	 	 
      	
              $50.00

            	 
      	
              32,243

            
	
              ###-##-####

            	
              Comerica

            	
              10/11/05

            	
              ECAP0208
      (CAP)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/09

            	
              12/31/09

            	
              (15,208)

            	
              (182,500)

            	 	 
      	
              $67.65

            	 
      	
              (6,196,721)

            
	
              ###-##-####

            	
              Comerica

            	
              10/13/05

            	
              ECAP0209
      (FLOOR)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/09

            	
              12/31/09

            	
              5,500

            	
              66,000

            	 	 
      	
              $50.00

            	 
      	
              11,607

            
	
              ###-##-####

            	
              Comerica

            	
              10/13/05

            	
              ECAP0209
      (CAP)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/09

            	
              12/31/09

            	
              (5,500)

            	
              (66,000)

            	 	 
      	
              $67.350

            	 
      	
              (2,258,248)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              20,708

            	
              248,500

            	 	
              16.28%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              JP
      Morgan

            	
              10/10/05

            	
              1567755/56
      (FLOOR)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/09

            	
              12/31/09

            	
              45,625

            	
              547,500

            	 	 
      	
              $50.00

            	 
      	
              96,726

            
	
              ###-##-####

            	
              JP
      Morgan

            	
              10/10/05

            	
              1567755/56
      (CAP)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/09

            	
              12/31/09

            	
              (45,625)

            	
              (547,500)

            	 	 
      	
              $65.75

            	 
      	
              (19,481,672)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              45,625

            	
              547,500

            	 	
              35.88%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              RBC

            	
              10/12/05

            	
              26597
      (FLOOR)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/09

            	
              12/31/09

            	
              15,208

            	
              182,500

            	 	 
      	
              $50.00

            	 
      	
              32,243

            
	
              ###-##-####

            	
              RBC

            	
              10/12/05

            	
              26597
      (CAP)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/09

            	
              12/31/09

            	
              (15,208)

            	
              (182,500)

            	 	 
      	
              $69.10

            	 
      	
              (5,973,182)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              15,208

            	
              182,500

            	 	
              11.96%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              Wachovia

            	
              10/11/05

            	
              1258089
      (FLOOR)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/09

            	
              12/31/09

            	
              15,208

            	
              182,500

            	 	 
      	
              $50.00

            	 
      	
              32,243

            
	
              ###-##-####

            	
              Wachovia

            	
              10/11/05

            	
              1258089
      (CAP)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/09

            	
              12/31/09

            	
              (15,208)

            	
              (182,500)

            	 	 
      	
              $68.00

            	 
      	
              (6,142,501)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              15,208

            	
              182,500

            	 	
              11.96%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              Wells
      Fargo

            	
              10/11/05

            	
              COP2497
      (FLOOR)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/09

            	
              12/31/09

            	
              15,208

            	
              182,500

            	 	 
      	
              $50.00

            	 
      	
              32,243

            
	
              ###-##-####

            	
              Wells
      Fargo

            	
              10/11/05

            	
              COP2497
      (CAP)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/09

            	
              12/31/09

            	
              (15,208)

            	
              (182,500)

            	 	 
      	
              $67.35

            	 
      	
              (6,243,325)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              15,208

            	
              182,500

            	 	
              11.96%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	 
      	
              Total
      OIL Collars - 2009

            	 
      	 
      	 
      	 
      	 
      	 
      	
              127,167

            	
              1,526,000

            	 	
              100.00%

            	 
      	 
      	
              (51,991,626)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              BNP
      Paribas

            	
              10/12/05

            	
              93579
      (FLOOR)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/10

            	
              12/31/10

            	
              15,208

            	
              182,500

            	 	 
      	
              $50.00

            	 
      	
              114,949

            
	
              ###-##-####

            	
              BNP
      Paribas

            	
              10/12/05

            	
              93579
      (CAP)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/10

            	
              12/31/10

            	
              (15,208)

            	
              (182,500)

            	 	 
      	
              $67.00

            	 
      	
              (5,961,543)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              15,208

            	
              182,500

            	 	
              13.35%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              Comerica

            	
              10/11/05

            	
              ECAP0210
      (FLOOR)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/10

            	
              12/31/10

            	
              15,208

            	
              182,500

            	 	 
      	
              $50.00

            	 
      	
              114,949

            
	
              ###-##-####

            	
              Comerica

            	
              10/11/05

            	
              ECAP0210
      (CAP)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/10

            	
              12/31/10

            	
              (15,208)

            	
              (182,500)

            	 	 
      	
              $65.50

            	 
      	
              (6,170,651)

            
	
              ###-##-####

            	
              Comerica

            	
              10/13/05

            	
              ECAP0211
      (FLOOR)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/10

            	
              12/31/10

            	
              7,500

            	
              90,000

            	 	 
      	
              $50.00

            	 
      	
              56,593

            
	
              ###-##-####

            	
              Comerica

            	
              10/13/05

            	
              ECAP0211
      (CAP)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/10

            	
              12/31/10

            	
              (7,500)

            	
              (90,000)

            	 	 
      	
              $65.15

            	 
      	
              (3,067,673)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              22,708

            	
              272,500

            	 	
              19.93%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              JP
      Morgan

            	
              10/10/05

            	
              1568315/16
      (FLOOR)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/10

            	
              12/31/10

            	
              30,417

            	
              365,000

            	 	 
      	
              $50.00

            	 
      	
              229,899

            
	
              ###-##-####

            	
              JP
      Morgan

            	
              10/10/05

            	
              1568315/16
      (CAP)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/10

            	
              12/31/10

            	
              (30,417)

            	
              (365,000)

            	 	 
      	
              $62.95

            	 
      	
              (13,067,025)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              30,417

            	
              365,000

            	 	
              26.69%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              RBC

            	
              10/11/05

            	
              26595
      (FLOOR)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/10

            	
              12/31/10

            	
              15,208

            	
              182,500

            	 	 
      	
              $50.00

            	 
      	
              114,949

            
	
              ###-##-####

            	
              RBC

            	
              10/11/05

            	
              26595
      (CAP)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/10

            	
              12/31/10

            	
              (15,208)

            	
              (182,500)

            	 	 
      	
              $65.70

            	 
      	
              (6,142,579)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              15,208

            	
              182,500

            	 	
              13.35%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              Wachovia

            	
              10/10/05

            	
              1258090
      (FLOOR)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/10

            	
              12/31/10

            	
              15,208

            	
              182,500

            	 	 
      	
              $50.00

            	 
      	
              114,949

            
	
              ###-##-####

            	
              Wachovia

            	
              10/10/05

            	
              1258090
      (CAP)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/10

            	
              12/31/10

            	
              (15,208)

            	
              (182,500)

            	 	 
      	
              $64.00

            	 
      	
              (6,383,027)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              15,208

            	
              182,500

            	 	
              13.35%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              Wells
      Fargo

            	
              10/11/05

            	
              COP2498
      (FLOOR)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/10

            	
              12/31/10

            	
              15,208

            	
              182,500

            	 	 
      	
              $50.00

            	 
      	
              114,949

            
	
              ###-##-####

            	
              Wells
      Fargo

            	
              10/11/05

            	
              COP2498
      (CAP)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/10

            	
              12/31/10

            	
              (15,208)

            	
              (182,500)

            	 	 
      	
              $66.15

            	 
      	
              (6,079,630)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              15,208

            	
              182,500

            	 	
              13.35%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	 
      	
              Total
      OIL Collars - 2010

            	 
      	 
      	 
      	 
      	 
      	 
      	
              113,958

            	
              1,367,500

            	 	
              100.00%

            	 
      	 
      	
              (46,010,891)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              BNP
      Paribas

            	
              10/13/05

            	
              93580
      (FLOOR)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/11

            	
              12/31/11

            	
              11,750

            	
              141,000

            	 	 
      	
              $50.00

            	 
      	
              195,493

            
	
              ###-##-####

            	
              BNP
      Paribas

            	
              10/13/05

            	
              93580
      (CAP)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/11

            	
              12/31/11

            	
              (11,750)

            	
              (141,000)

            	 	 
      	
              $64.25

            	 
      	
              (4,779,204)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              11,750

            	
              141,000

            	 	
              11.41%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              Comerica

            	
              10/11/05

            	
              ECAP0212
      (FLOOR)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/11

            	
              12/31/11

            	
              15,208

            	
              182,500

            	 	 
      	
              $50.00

            	 
      	
              253,509

            
	
              ###-##-####

            	
              Comerica

            	
              10/11/05

            	
              ECAP0212
      (CAP)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/11

            	
              12/31/11

            	
              (15,208)

            	
              (182,500)

            	 	 
      	
              $64.60

            	 
      	
              (6,140,349)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              15,208

            	
              182,500

            	 	
              14.77%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              JP
      Morgan

            	
              10/10/05

            	
              1568321/29
      (FLOOR)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/11

            	
              12/31/11

            	
              30,417

            	
              365,000

            	 	 
      	
              $50.00

            	 
      	
              507,016

            
	
              ###-##-####

            	
              JP
      Morgan

            	
              10/10/05

            	
              1568321/29
      (CAP)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/11

            	
              12/31/11

            	
              (30,417)

            	
              (365,000)

            	 	 
      	
              $62.05

            	 
      	
              (12,949,399)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              30,417

            	
              365,000

            	 	
              29.53%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              RBC

            	
              10/11/05

            	
              26594
      (FLOOR)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/11

            	
              12/31/11

            	
              15,208

            	
              182,500

            	 	 
      	
              $50.00

            	 
      	
              253,509

            
	
              ###-##-####

            	
              RBC

            	
              10/11/05

            	
              26594
      (CAP)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/11

            	
              12/31/11

            	
              (15,208)

            	
              (182,500)

            	 	 
      	
              $64.75

            	 
      	
              (6,120,924)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              15,208

            	
              182,500

            	 	
              14.77%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              Wachovia

            	
              10/10/05

            	
              1258091
      (FLOOR)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/11

            	
              12/31/11

            	
              15,208

            	
              182,500

            	 	 
      	
              $50.00

            	 
      	
              253,509

            
	
              ###-##-####

            	
              Wachovia

            	
              10/10/05

            	
              1258091
      (CAP)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/11

            	
              12/31/11

            	
              (15,208)

            	
              (182,500)

            	 	 
      	
              $63.10

            	 
      	
              (6,336,079)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              15,208

            	
              182,500

            	 	
              14.77%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              Wells
      Fargo

            	
              10/11/05

            	
              COP2499
      (FLOOR)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/11

            	
              12/31/11

            	
              15,208

            	
              182,500

            	 	 
      	
              $50.00

            	 
      	
              253,509

            
	
              ###-##-####

            	
              Wells
      Fargo

            	
              10/11/05

            	
              COP2499
      (CAP)

            	
              NYMEX

            	
              Bulk

            	
              Williston

            	
              01/01/11

            	
              12/31/11

            	
              (15,208)

            	
              (182,500)

            	 	 
      	
              $65.25

            	 
      	
              (6,056,382)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              15,208

            	
              182,500

            	 	
              14.77%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	 
      	
              Total
      OIL Collars - 2011

            	 
      	 
      	 
      	 
      	 
      	 
      	
              103,000

            	
              1,236,000

            	 	
              100.00%

            	 
      	 
      	
              (40,665,792)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	 
      	
              Natural
      Gas Liquid Swaps

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	 
      	
              J
      Aron & Co

            	
              07/31/07

            	
              737594627

            	
              OPIS

            	
              Rockford
      Acq

            	
              Gulf
      Coast

            	
              01/01/08

            	
              08/31/08

            	
              1,084,373

            	
              5,421,867

            	 	 
      	
              $1.02

            	 
      	
              (1,994,445)

            
	
              ###-##-####

            	
              J
      Aron & Co

            	
              11/08/06

            	
              891043169

            	
              OPIS

            	
              Sweetie
      Peck Acq

            	
              Permian

            	
              11/01/08

            	
              12/31/08

            	
              1,218,000

            	
              2,436,000

            	 	 
      	
              $0.86

            	 
      	
              (1,596,448)

            
	
              ###-##-####

            	
              J
      Aron & Co

            	
              02/07/07

            	
              894008579

            	
              OPIS

            	
              BlackBrush
      Acq

            	
              Permian

            	
              03/01/08

            	
              12/31/08

            	
              278,084

            	
              2,502,759

            	 	 
      	
              $0.89

            	 
      	
              (1,613,946)

            
	 
      	
              J
      Aron & Co

            	
              09/17/07

            	
              900695221

            	
              OPIS

            	
              Rockford
      Acq

            	
              Gulf
      Coast

            	
              09/01/08

            	
              12/31/08

            	
              1,508,500

            	
              6,034,000

            	 	 
      	
              $0.97

            	 
      	
              (2,369,745)

            
	 
      	
              J
      Aron & Co

            	
              02/21/08

            	
              903761692

            	
              OPIS

            	
              Senderro
      Acq

            	
              ArkLaTex

            	
              04/01/08

            	
              12/31/08

            	
              13,746

            	
              123,718

            	 	 
      	
              $1.21

            	 
      	
              (14,629)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              1,496,084

            	
              16,518,344

            	 	
              69.37%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              Morgan
      Stanley

            	
              10/31/06

            	
              5735706

            	
              OPIS

            	
              Sweetie
      Peck Acq

            	
              Permian

            	
              01/01/08

            	
              10/31/08

            	
              1,042,091

            	
              7,294,636

            	 	 
      	
              $0.87

            	 
      	
              (4,826,191)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              1,042,091

            	
              7,294,636

            	 	
              30.63%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	 
      	
              NGL
      Swaps - 2008

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              1,984,415

            	
              23,812,980

            	 	
              100.00%

            	 
      	 
      	
              (12,415,404)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	
              ###-##-####

            	
              J
      Aron & Co

            	
              11/08/06

            	
              891043169

            	
              OPIS

            	
              Sweetie
      Peck Acq

            	
              Permian

            	
              01/01/09

            	
              10/31/09

            	
              1,171,800

            	
              11,718,000

            	 	 
      	
              $0.86

            	 
      	
              (6,493,368)

            
	
              ###-##-####

            	
              J
      Aron & Co

            	
              02/07/07

            	
              894008579

            	
              OPIS

            	
              BlackBrush
      Acq

            	
              Permian

            	
              01/01/09

            	
              02/28/09

            	
              277,250

            	
              554,500

            	 	 
      	
              $0.89

            	 
      	
              (333,268)

            
	 
      	
              J
      Aron & Co

            	
              09/17/07

            	
              900695221

            	
              OPIS

            	
              Rockford
      Acq

            	
              Gulf
      Coast

            	
              01/01/09

            	
              08/31/09

            	
              1,758,625

            	
              14,069,003

            	 	 
      	
              $0.97

            	 
      	
              (4,336,123)

            
	 
      	
              J
      Aron & Co

            	
              02/21/08

            	
              903761692

            	
              OPIS

            	
              Sendero
      Acq

            	
              ArkLaTex

            	
              01/01/09

            	
              02/29/09

            	
              36,064

            	
              72,128

            	 	 
      	
              $1.21

            	 
      	
              (6,976)

            
	 
      	
              J
      Aron & Co

            	
              02/21/08

            	
              903761699

            	
              OPIS

            	
              Sendero
      Acq

            	
              ArkLaTex

            	
              03/01/09

            	
              12/31/09

            	
              38,906

            	
              389,058

            	 	 
      	
              $1.13

            	 
      	
              (34,518)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              2,680,269

            	
              26,802,689

            	 	
              100.00%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	 
      	
              NGL
      Swaps - 2009

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              2,233,557

            	
              26,802,689

            	 	
              100.00%

            	 
      	 
      	
              (11,204,253)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	 
      	
              J
      Aron & Co

            	
              02/21/08

            	
              903761394

            	
              OPIS

            	
              Sendero
      Acq

            	
              ArkLaTex

            	
              03/01/10

            	
              12/31/10

            	
              27,400

            	
              274,000

            	 	 
      	
              $1.080

            	 
      	
              (32,774)

            
	 
      	
              J
      Aron & Co

            	
              02/21/08

            	
              903761699

            	
              OPIS

            	
              Sendero
      Acq

            	
              ArkLaTex

            	
              01/01/10

            	
              02/28/10

            	
              31,443

            	
              62,885

            	 	 
      	
              $1.13

            	 
      	
              (3,574)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              33,689

            	
              336,885

            	 	
              100.00%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	 
      	
              NGL
      Swaps - 2010

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              28,074

            	
              336,885

            	 	
              100.00%

            	 
      	 
      	
              (36,348)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	 
      	
              J
      Aron & Co

            	
              02/21/08

            	
              903761394

            	
              OPIS

            	
              Sendero
      Acq

            	
              ArkLaTex

            	
              01/01/11

            	
              02/28/11

            	
              23,703

            	
              47,405

            	 	 
      	
              $1.080

            	 
      	
              (8,404)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              4,741

            	
              47,405

            	 	
              100.00%

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	 
      	
              NGL
      Swaps - 2011

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              3,950

            	
              47,405

            	 	
              100.00%

            	 
      	 
      	
              (8,404)

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 	 
      	 
      	 
      	
               $        (436,415,782.00)

            

    

    

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    SCHEDULE
7.24

    MATERIAL
AGREEMENTS

     

    
      	
              1.  

            	
              Senior
      Convertible Notes indenture, in the aggregate principal amount of
      $287,500,000, due on or about April 1,
2027.

            

    

     

    
      	
              2.  

            	
              And
      the agreements set forth on the exhibit list to the Company’s Annual
      Report on Form 10-K for the year ended December 31, 2007, as material
      contracts included as exhibits 10.1 through
  10.34.

            

    

     

    

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    SCHEDULE
9.05(a)

    INVESTMENTS

     

    

     

    NONE

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    SCHEDULE
9.05(h)

    EXISTING
INVESTMENTS (NON-OIL AND GAS)

     

    
      	
              1.  

            	
              50%
      general partnership interest in Hilltop Investments holding approximately
      41 acres of undeveloped land in Jefferson County at C-470 and
      Quincy.

            

    

     

    
      	
              2.  

            	
              Residual
      net profits interest in land located in Grand Junction, Colorado if
      reclaimed by gravel operator and sold as lots in Mid-America Business
      Park, a rail served industrial
park.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00141-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00141-of-00352.parquet"}]]