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Exhibit 10.6    
    

 
 

AMENDMENT TO
  COMBINATION AGREEMENT    
    

        This Amendment to Combination Agreement (this "Amendment") is entered into as of September 19, 2005, by and
among Stroud Oil Properties, Inc., an Oklahoma corporation ("SOP"), all the shareholders of SOP as listed on the signature page to this
Agreement, Stroud Energy Management, Ltd., a Texas limited partnership ("Management"), all the limited partners of Management as listed on the
signature page to this Agreement, Stroud Energy, Ltd., a Texas limited partnership ("Stroud Ltd."), all the limited partners of
Stroud Ltd. as listed on the signature page to this Agreement, and Stroud Energy, Inc., a Delaware corporation ("Newco"). The shareholders
(and limited partners after the merger described below) of SOP and the limited partners of Management and Stroud Ltd. (other than SOP) are collectively referred to as the
"Owners". 

 
 

RECITALS    
    

        The parties hereto entered into that certain Combination Agreement dated as of August 1, 2005 (the "Original
Agreement"), pursuant to which the Owners agreed to exchange their ownership interests in SOP, Management and Stroud Ltd. for stock in Newco through the series of
transactions contemplated therein. 

        The
parties desire to amend the Original Agreement to specify (i) the number of shares to be issued to each Owner in exchange for the transfers that take place pursuant to the
Original Agreement and (ii) the number of shares to be sold by certain of the Owners in the Private Offering. 

        Now,
therefore, in consideration of the premises and the mutual covenants and agreements contained herein and in the Original Agreement, and intending to be legally bound hereby, the
parties agree as follows: 

        Section 1
Definitions. Capitalized terms used and not otherwise defined in this Amendment shall have the
definitions given them in the Original Agreement. From and after the date hereof, all references to the "Agreement" in the Original Agreement shall mean the Original Agreement as amended by this
Amendment. 

        Section 2
Amendment of Section 1.3. Section 1.3 of the Original Agreement is hereby amended
and restated to read in its entirety as follows: 

        "Section 1.3 Receipt of Stock in Newco. The parties hereto acknowledge that the transactions
described in this Agreement constitute "Capital Transactions" and the proceeds thereof constitute "Capital Proceeds" as defined in Stroud Ltd.'s Partnership Agreement. In exchange for the
transfers described above, Newco will issue the number of shares of Newco common stock to each Owner set forth beside such Owner's name on  Schedule II attached hereto; provided, however, that the
Reserved Class B Interests that were to be issued to members of management under
Management's Partnership Agreement, but have not been specifically allocated, will become reserved shares (the "Unallocated Class B Interest
Shares") retained by Newco for future issuance in accordance with the Stroud Energy, Inc. 2005 Restricted Stock Plan (the "Newco Restricted Stock
Plan") and, independent of the calculation referred to above, shall be fixed in number at 226,608 shares. The Unallocated Class B Interest Shares would otherwise have
been issued to Owners of SOP by virtue of SOP's ownership of Class B Partnership Interests in Management as of the Closing. Shares of Newco common stock issued in exchange for the
Class B Partnership Interests in Management that were granted to management employees in May 2005 and that are subject to forfeiture restrictions as of the Closing shall be issued
pursuant to the Newco Restricted Stock Plan and such shares of Newco common stock shall be subject to the same forfeiture restrictions as 

1

 

were
in effect with respect to such Class B Partnership Interests prior to the Closing. Shares of Newco common stock issued in exchange for Class B Partnership Interests in Management
that were issued to management employees prior to May 2005 shall not be subject to forfeiture and shall be fully vested." 

        Section 3
Addition of Section 1.13. The Original Agreement is hereby amended to add a new
Section 1.13 to read in its entirety as follows: 

        "Section 1.13
Selling Shareholders. As part of the Private Offering, each Owner listed on  Schedule III attached hereto will offer
and sell, first, the number of shares of Newco common stock set forth beside such Owner's name under the
heading "Base Amount Shares," and, second, pursuant to exercise of an
option to cover additional allotments, the number of shares of Newco common stock set forth beside such Owner's name under the heading "Additional Allotment Shares." 

        Section 4
Amendments to Schedules. Schedule II to the Original Agreement is
hereby amended and restated to read in its entirety as set forth on Schedule II attached to this Amendment. The Original Agreement is hereby
amended to add a new Schedule III to read in its entirety as set forth on Schedule III
attached to this Amendment. 

        Section 5  Ratification. The Original Agreement is hereby ratified and confirmed and shall remain
and
continue in full force and effect in accordance with the terms and provisions thereof, as amended by this Amendment, and in the event of any conflict between the Original Agreement and this Amendment,
then the terms and conditions of this Amendment shall prevail. 

        Section 6
Counterparts. This Amendment may be executed in multiple counterparts, each, and together all, of
which shall be deemed an original. 

        Section 7  Joinder of Spouses. The spouses of each individual Owner are joining in the execution of
this
Amendment to acknowledgment its existence and its provisions, and to evidence the desire to bind their interests in the ownership interests transferred under the Original Agreement, if any, to the
performance of this Amendment. 

[The
remainder of this page is intentionally left blank.] 

2

   
        IN WITNESS WHEREOF, this Amendment has been duly executed by the parties hereto as of the date first above written. 

	SOP:	 	STROUD OIL PROPERTIES, INC.,

an Oklahoma corporation
	

 	
 	

By:	

/s/  PATRICK J. NOYES      
 Patrick J. Noyes, President
	
MANAGEMENT:	
 	

STROUD ENERGY MANAGEMENT, LTD.,a Texas limited partnership
	

 	
 	

By:	

Stroud Oil Properties, Inc.,

an Oklahoma corporation, its general partner
	

 	
 	

By:	

/s/  PATRICK J. NOYES      
 Patrick J. Noyes, President
	
STROUD LTD.:	
 	

STROUD ENERGY, LTD.,

a Texas limited partnership
	

 	
 	

By:	

Stroud Energy Management, Ltd.,

a Texas limited partnership,

its general partner
	

 	
 	

 	

By:	
 	

Stroud Oil Properties, Inc.,

an Oklahoma corporation,

its general partner
	

 	
 	

 	

By:	
 	

/s/  PATRICK J. NOYES      
 Patrick J. Noyes, President
	
NEWCO:	
 	

STROUD ENERGY, INC.,

a Delaware corporation
	 	 	By:	/s/  PATRICK J. NOYES      
 Patrick J. Noyes, President
	 	 	 	 	 	 

S-1

 

	
OWNERS OF SOP:	
 	

 	

/s/  BRUCE F. BRADEN      
 Bruce F. Braden
	

 	
 	

 	

/s/  CHRISTOPHER A. WRIGHT      
 Christopher A. Wright
	

 	
 	

 	

/s/  ELIZABETH S. WRIGHT      
 Elizabeth S. Wright
	

 	
 	

 	

/s/  ROBERT S. COLMAN      
 Robert S. Colman, Trustee of the Robert S. Colman Trust u/d/t 3/18/85
	

 	
 	

 	

/s/  ROBERT S. COLMAN      
 Robert S. Colman, Trustee,

Edwin W. Colman Children's Trust FBO Robert S. Colman
	

 	
 	

 	

/s/  DANIEL I. KEMPER      
 Daniel I. Kemper, Trustee,

Daniel I. Kemper Living Trust
	

 	
 	

 	

/s/  ROCKWELL A. SCHNABEL      
 Rockwell A. Schnabel
	

 	
 	

 	

/s/  MARNA SCHNABEL      
 Spouse of Rockwell A. Schnabel,

joining for the limited purposes set forth in Section 7
	

 	
 	

 	

/s/  PATRICK J. NOYES      
 Patrick J. Noyes
	

 	
 	

 	

/s/  CINDY NOYES      
 Spouse of Patrick J. Noyes, joining for

the limited purposes set forth in Section 7
	

 	
 	

 	

/s/  EDWARD H. SCHWEITZER      
 Edward H. Schweitzer
	

 	
 	

 	

/s/  CHRIS A. SCHWEITZER      
 Spouse of Edward H. Schweitzer, joining for the limited purposes set forth in Section 7
	
OWNERS OF MANAGEMENT:	
 	

 	

/s/  GREOGY P. SMITH      
 Gregory P. Smith
	 	 	 	 	 	 

S-2

 

	

 	
 	

 	

/s/   LINDA K. SMITH      
 Spouse of Gregory P. Smith, joining for the

limited purposes set forth in Section 7
	

 	
 	

 	

/s/   PATRICK J. NOYES      
 Patrick J. Noyes
	

 	
 	

 	

/s/   CINDY NOYES      
 Spouse of Patrick J. Noyes, joining for

the limited purposes set forth in Section 7
	

 	
 	

 	
NOYES FAMILY PARTNERSHIP,

a Texas partnership
	

 	
 	

 	

By:	
 	

/s/   PATRICK J. NOYES      
 Patrick J. Noyes, Partner
	

 	
 	

 	

/s/   CHRISTOPHER L. HAMMACK      
 Christopher L. Hammack
	

 	
 	

 	

/s/   GREGORY D. FRAZIER      
 Gregory D. Frazier
	

 	
 	

 	

/s/   STEPHEN M. CLARK      
 Stephen M. Clark
	

 	
 	

 	

/s/   CONNIE S. CLARK      
 Spouse of Stephen M. Clark, joining for the

limited purposes set forth in Section 7
	

 	
 	

 	

/s/   G. CHRISTOPHER VEEDER      
 G. Christopher Veeder
	

 	
 	

 	

/s/   PRISCILLA VEEDER      
 Spouse of G. Christopher Veeder, joining

for the limited purposes set forth in Section 7
	
OWNERS OF STROUD LTD.:	
 	

STROUD OIL PROPERTIES, INC.,

an Oklahoma corporation
	

 	
 	

By:	

/s/   PATRICK J. NOYES      
 Patrick J. Noyes, President
	

 	
 	

/s/   BRUCE F. BRADEN      
 Bruce F. Braden
	 	 	 	 	 	 

S-3

 

	

 	
 	

/s/   ROBERT S. COLMAN      
 Robert S. Colman, Trustee of the

Robert S. Colman Trust u/d/t 3/18/85
	

 	
 	

/s/   CHRISTOPHER A. WRIGHT      
 Christopher A. Wright
	

 	
 	

/s/   ELIZABETH S. WRIGHT      
 Elizabeth S. Wright
	

 	
 	

 	
ENCAP ENERGY CAPITAL FUND IV, L.P.
	

 	
 	

 	

By: EnCap Equity Fund IV GP, L.P., General Partner of EnCap Energy Capital Fund IV, L.P.
	 	 	 	By: EnCap Investments L.P., General Partner of EnCap Equity Fund IV GP, L.P.
	 	 	 	By: EnCap Investments GP, L.L.C., General Partner of EnCap Investments L.P.
	

 	
 	

By:	

/s/   DAVID B. MILLER      
 David B. Miller, Senior Managing Director
	

 	
 	
ENCAP IV-B ACQUISITIONS, L.P.
	

 	
 	

 	

By: EnCap IV-B Acquisitions GP, LLC, General Partner of EnCap IV-B Acquisitions, L.P.
	 	 	 	By: EnCap Energy Capital Fund IV-B, L.P., Sole Member of EnCap IV-B Acquisitions GP, LLC
	 	 	 	By: EnCap Equity Fund IV GP, L.P., General Partner of EnCap Energy Capital Fund IV-B, L.P.
	 	 	 	By: EnCap Investments L.P., General Partner of EnCap Equity Fund IV GP, L.P.
	 	 	 	By: EnCap Investments GP, L.L.C., General Partner of EnCap Investments L.P.
	

 	
 	

By:	

/s/   DAVID B. MILLER      
 David B. Miller, Senior Managing Director

S-4

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Exhibit 10.6

AMENDMENT TO COMBINATION AGREEMENT

RECITALSQuickLinks
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Exhibit 10.7    
    

 
 

AMENDMENT NO. 1
  TO THE
  STROUD ENERGY, INC.
  2005 STOCK INCENTIVE PLAN    
    

        Pursuant to the provisions of Section 14.1 thereof, the Stroud Energy, Inc. 2005 Stock Incentive Plan is hereby amended in the following respects
only: 

        FIRST:    Effective September 23, 2005, Section 2.7 of the Plan is hereby amended by restatement in its entirety
to read as follows: 

        2.7   "Change of Control" means any of the following events: 

        (a)   the
acquisition by any "person" (including a "group" (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), but excluding SEI or an existing
stockholder of SEI who, upon closing of the Private Placement, holds 5% or more of the Common Stock) of "beneficial ownership" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of SEI representing more than 50% of the combined voting power of SEI's then outstanding securities entitled to vote generally in the election of directors; or 

        (b)   the
consummation of a reorganization, merger, consolidation or other form of business transaction or series of business transactions, in each case, with respect to which
persons who were stockholders of SEI immediately prior to such reorganization, merger or consolidation or other transaction do not, immediately thereafter, own more than 50% of the combined voting
power entitled to vote generally in the election of directors of the reorganized, merged or consolidated company's then outstanding voting securities; or 

        (c)   the
sale, lease or disposition (in one or a series of related transactions) by SEI of all or substantially all of SEI's assets (including those of its subsidiaries) to
any person or its Affiliates, other than SEI or its Affiliates; or 

        (d)   the
approval by the Board or the stockholders of SEI of a complete or substantially complete liquidation or dissolution of SEI; or 

        (e)   any
event similar to the foregoing that the Committee determines in its absolute discretion would, if consummated, materially alter the structure or business SEI. 

Notwithstanding
the foregoing, (i) a Change of Control shall not include any acquisition, merger, or reorganization by SEI in which the stockholders of SEI immediately prior to such
acquisition, merger, or reorganization will have substantially the same proportionate ownership of common stock of the surviving corporation immediately thereafter or which would be considered a
Change of Control only due to the acquisition of Common Stock by any employee benefit plan (or related trust) sponsored or maintained by SEI or any parent or subsidiary of SEI, and (ii) a
Change of Control shall not include the transactions contemplated by the Combination Agreement, the Private Placement, or the initial public offering of the Common Stock. 

        SECOND:    Effective September 23, 2005, Article XIII of the Plan is hereby amended by restatement in its entirety
to read as follows: 

 
 

ARTICLE XIII. CHANGE OF CONTROL    
    

        13.1 Accelerated Vesting.    Except as provided otherwise in an Award Agreement at the time an Award is granted,
notwithstanding any provision of this Plan to the contrary, if the stockholders of SEI shall approve a transaction which upon consummation would constitute a Change of Control of SEI, or in the event
of any Change of Control of SEI not subject to stockholder approval, any time periods, conditions or contingencies relating to the exercise or realization of, or lapse of restrictions under, any Award
shall be automatically accelerated or waived (assuming with 

respect
to any Performance Awards, all performance criteria and other conditions are achieved or fulfilled to the maximum extent possible) so that: 

        (a)   if
no exercise of the Award is required, the Award may be realized in full at the time of the occurrence of the Change of Control (the "Change Effective Time"), or 

        (b)   if
exercise of the Award is required, the Award may be exercised in full at the Change Effective Time; 

provided,
however, that with respect to an Award that consists of deferred compensation under Section 409A of the Code, in the event of a Change of Control that does not satisfy the
requirements for a change in the ownership or effective control of SEI or a change in the ownership of a substantial portion of the assets of SEI within the meaning of Section 409A of the Code
and Treasury guidance and regulations related to Section 409A of the Code, including but not limited to Notice 2005-1 and such other Treasury guidance or regulations issued after
the Effective Date, then delivery of payment with respect to such Award as provided herein shall be delayed until payment may be made to the Participant without negative tax consequences to the
Participant under Section 409A of the Code. 

        13.2 Assumption of Awards.    In addition to accelerated vesting as provided in Section 13.1, upon a Change
of Control where SEI is not the surviving corporation (or survives only as a subsidiary of another corporation), unless the Committee determines otherwise, all outstanding Options that are not
exercised before the Change of Control will be assumed by or replaced with comparable options or rights in the surviving corporation (or a parent of the surviving corporation) in accordance with
Section 424(a) of the Code and the regulations thereunder, and other outstanding Awards will be converted into similar awards of the surviving corporation (or a parent of the surviving
corporation). 

        13.3 Cancellation of Awards.    Notwithstanding the foregoing, if the stockholders of SEI shall approve a
transaction which upon consummation would constitute a Change of Control of SEI, or in the event of any Change of Control of SEI not subject to stockholder approval, then the Committee, in its
discretion, may, no later than the effective time of such Change of Control, require each Participant holding an Award to surrender such Award in exchange for (i) with respect to each share of
Common Stock subject to an Option or SAR (whether or not vested), payment by the Company (or a successor), in cash, of an amount equivalent to the excess of the value of the consideration received for
each share of Common Stock by holders of Common Stock in connection with such Change of Control (the "Change of Control Consideration") over the exercise price or grant price per share;
(ii) with respect to each share of Common Stock subject to an Award of Restricted Stock Units or Other Incentive Awards, and related Cash Dividend Rights and Dividend Unit Rights (if
applicable), payment by the Company (or a successor), in cash, of an amount equivalent to the value of any such Cash Dividend Rights and Dividend Unit Rights plus the value of the Change of Control
Consideration for each share covered by the Award, assuming all restrictions or limitations (including risks of forfeiture) have lapsed; and (iii) with respect to a Performance Award, payment
by the Company (or a successor), in cash, of an amount equivalent to the value of such Award, as determined by the Committee, taking into account, to the extent applicable, the Change of Control
Consideration, and assuming all performance criteria and other conditions to payment of such Awards are achieved or fulfilled to the maximum extent possible. Payments made upon a Change of Control
pursuant to this Section shall be made no later than the date on which the Change of Control occurs; provided, however, that with respect to an Award that consists of deferred compensation under
Section 409A of the Code, in the event of a Change of Control that does not satisfy the requirements for a change in the ownership or effective control of SEI or a change in the ownership of a
substantial portion of the assets of SEI within the meaning of Section 409A of the Code and Treasury guidance and regulations related to Section 409A of the Code, including but not
limited to Notice 2005-1 and such other Treasury guidance or regulations issued after the Effective Date, then delivery of payment with respect to 

such
Award as provided herein shall be delayed until payment may be made to the Participant without negative tax consequences to the Participant under Section 409A of the Code. 

        IN
WITNESS WHEREOF, this Amendment has been executed on this 7th day of March 2006, but effective as of September 23, 2005. 

	 	 	STROUD ENERGY, INC.
	

 	
 	

By:	

/s/  PATRICK J. NOYES      
 Patrick J. Noyes

Chairman of the Board, President and

Chief Executive Officer

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Exhibit 10.7

AMENDMENT NO. 1 TO THE STROUD ENERGY, INC. 2005 STOCK INCENTIVE PLAN

ARTICLE XIII. CHANGE OF CONTROL

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