Document:

EX-10.31

FOURTH MODIFICATION AND AMENDMENT

OF

TERM NOTE

THIS FOURTH MODIFICATION AND AMENDMENT OF TERM NOTE (this “Modification”) is entered into as
of the 15th  day of May 2009, effective as of May 1, 2009, by and between PERMIAN LEGEND
PETROLEUM, LP, a Texas limited partnership, whose address is 3327 West Wadley Avenue, Suite 3, No.
267 (the “Maker”); and AMERICAN STATE BANK, a Texas banking association, whose address is 620 North
Grant, Odessa, Texas 79764-4797 (the “Bank”).

	A.	 	Maker, as Borrower; Permian Legend, LLC, Lisa P. Hamilton, and Ronnie L. Steinocher, as
Guarantors (collectively, the “Guarantors”); and the Bank, as Lender, have previously entered
into that certain Loan Agreement, dated as of August 1, 2008, as modified and amended by that
certain First Amendment to Loan Agreement, dated as of October 15, 2008, as further amended by
that certain Second Amendment to Loan Agreement, dated January 2, 2009, and as further amended
by that certain Third Amendment to Loan Agreement, dated as of March 17, 2009, effective as of
February 15, 2009 (as so amended, the “Existing Loan Agreement”).

	B.	 	Pursuant to the terms of the Existing Loan Agreement, the Bank advanced to the Maker a term
loan in the original principal amount of up to One Million Six Hundred Forty-Six Thousand
Three Hundred and No/100 Dollars ($1,646,300.00) (the “Loan”). To evidence the Maker’s
obligation under the Loan, the Maker executed in favor of the Bank that certain Term Note,
also dated as of August 1, 2008, as modified and amended by that certain Modification and
Amendment of Term Note, dated as of October 15, 2008, as further amended by that certain
Second Modification and Amendment of Term Note dated January 2, 2009, and as further modified
and amended by that certain Third Modification and Amendment of Term Note, dated as of March
17, 2009, effective as of February 15, 2009 (as so modified, the “Existing Note”). The
current principal balance outstanding under the Existing Note is One Million Four Thousand
Seven Hundred Forty-Six and Sixty-Five/100 Dollars ($1,004,746.65)

	C.	 	Maker, the Guarantors, and the Bank have now entered into that certain Fourth Amendment to
Loan Agreement, dated as of May 15, 2009, but effective as of May 1, 2009 (the “Fourth
Amendment”). Pursuant to the terms of the Fourth Amendment, the parties to that instrument
have agreed to extend the maturity date of the Original Note from May 1, 2009 (the “Existing
Maturity Date”) to July 15, 2009 (the “Extended Maturity Date”), to increase the rate of
interest due under the Existing Note, and to provide that payments of only interest will be
required up until the point of the Extended Maturity Date.

	D.	 	The Maker and the Bank have now agreed to execute this Modification in order to evidence
their existing agreement regarding the amendment of the Existing Note.

NOW, THEREFORE, for and in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree to amend the terms of the Existing Note as follows:

	1.	 	Definitions.

Unless otherwise specifically defined herein, all defined terms used in this Modification
shall have their respective meanings set forth in the Existing Note.

2. Amendments.

	 	A.	 	Paragraph 1 of the Existing Note is hereby amended by deleting it in its
entirety and substituting the following:

1. For value received, PERMIAN LEGEND PETROLEUM LP, a Texas limited partnership (the
“Maker”), promises to pay to the order of AMERICAN STATE BANK, a state banking
association (the “Bank”), at its offices at 620 N. Grant Avenue, Odessa, Texas
79761, in lawful money of the United States of America, the sum of ONE MILLION FOUR
THOUSAND SEVEN HUNDRED AND FORTY-SIX AND SIXTY-FIVE/100 DOLLARS ($1,004,746.65),
together with interest on the principal amount from time to time outstanding
hereunder, from the date of disbursement of such principal until maturity, at a
variable rate of interest per annum (the “Variable Rate") equal to the “American
State Bank Base Rate”, as defined in the Existing Note, plus two percentage points
(2.0%), but in no event to exceed the “Highest Lawful Rate”, as defined in the
Existing Note, with adjustments to the Variable Rate to be made on the same date as
the effective date of any change in the American State Bank Base Rate and
adjustments due to changes in the Highest Lawful Rate to be made on the effective
date of any change in the Highest Lawful Rate.

	 	B.	 	Paragraph 2 of the Existing Note is hereby amended by deleting it in its
entirety and substituting the following:

2. This Note is executed pursuant to the terms of that certain Loan Agreement,
dated as of August 1, 2008, as amended under that certain First Amendment to Loan
Agreement, dated as of October 15, 2008, that certain Second Amendment to Loan
Agreement, dated as of January 2, 2009, that certain Third Amendment to Loan
Agreement, dated as of March 17, 2009, but effective February 15, 2009, and that
certain Fourth Amendment to Loan Agreement, dated as of May 15, 2009, effective as
of May 1, 2009, all by and among the Maker, the Guarantors, and the Bank (as so
amended, the “Loan Agreement”). In the event of a conflict between the terms of
this Note and the terms of the Loan Agreement, the terms of the Loan Agreement shall
be deemed to be controlling. Capitalized terms not otherwise defined herein are
defined in the Loan Agreement.

	 	C.	 	Paragraph 7 of the Original Note is hereby amended by deleting it in its
entirety and substituting the following:

7. From the date of this Modification, until the Extended Maturity Date,
payments of interest only, calculated at the lesser rate of the Variable Rate and
the Highest Lawful Rate, shall be due on or before the first day of each month, with
the next of such payments to be due and payable on or before June 1, 2009, the next
of such payments to be due on or before July 1, 2009, and all of the outstanding
principal, accrued, but unpaid interest, and any outstanding costs, fees, or
expenses due pursuant to the terms of the Loan Agreement, to be paid as of the
Extended Maturity Date of July 15, 2009.

3. Effectiveness:

	 	A.	 	Except to the extent specifically amended and supplemented hereby, all of the
terms, conditions and provisions of the Existing Note shall remain unmodified, and the
Existing Note, as amended and supplemented by this Modification is confirmed as being
in full force and effect.

	 	B.	 	All references to the Original Note herein or in any other document or
instrument between Maker and Bank shall hereinafter be construed to be references to
the Original Note, as modified by this Modification (as so modified, the “Note”).

4. Counterparts:

This Modification may be executed in any number of counterparts, each of which when executed
and delivered shall be deemed an original, but all of which constitute one instrument. In
making proof of this Modification, it shall not be necessary to produce or account for more
than one counterpart thereof signed by each of the parties hereto.

5. Notice of Final Agreement:

THIS FOURTH MODIFICATION AND AMENDMENT OF TERM NOTE, THE FOURTH AMENDMENT, AND THOSE
INSTRUMENTS EXECUTED CONTEMPORANEOUSLY HEREWITH REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES 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.

IN WITNESS WHEREOF, the parties hereto have executed this Modification as of the date and year
first above written.

MAKER:

PERMIAN LEGEND PETROLEUM LP,

A Texas Limited Partnership

	 	 	 
	By:	 	Permian Legend, LLC
	 	 	General Partner
	By:
	 	      /s/ Lisa P. Hamilton—

	 	 	 

	 	 	Lisa P. Hamilton

Manager

By:       /s/ Ronnie L. Steinocher—

Ronnie L. Steinocher

Manager

BANK:

AMERICAN STATE BANK

By:       /s/ Mike Marshall—

Mike Marshall

Executive Vice President

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FIFTH MODIFICATION AND AMENDMENT

OF

TERM NOTE

THIS FIFTH MODIFICATION AND AMENDMENT OF TERM NOTE (this “Modification”) is entered into as of
the 15th day of October 2009, effective as of July 15, 2009, by and between PERMIAN
LEGEND PETROLEUM, LP, a Texas limited partnership, whose address is 3327 West Wadley Avenue, Suite
3, No. 267 (the “Maker”); and AMERICAN STATE BANK, a Texas banking association, whose address is
620 North Grant, Odessa, Texas 79764-4797 (the “Bank”).

	A.	 	Maker, as Borrower; Permian Legend, LLC, Lisa P. Hamilton, and Ronnie L. Steinocher, as
Guarantors (collectively, the “Guarantors”); and the Bank, as Lender, have previously entered
into that certain Loan Agreement, dated as of August 1, 2008; as modified and amended by that
certain First Amendment to Loan Agreement, dated as of October 15, 2008; as further amended by
that certain Second Amendment to Loan Agreement, dated January 2, 2009; as further amended by
that certain Third Amendment to Loan Agreement, dated as of March 17, 2009, effective as of
February 15, 2009; and as further modified and amended under that certain Fourth Amendment to
Loan Agreement, dated as of May 15, 2009, to be effective for all purposes as of May 1, 2009
(as so amended, the “Existing Loan Agreement”).

	B.	 	Pursuant to the terms of the Existing Loan Agreement, the Bank advanced to the Maker a term
loan in the original principal amount of up to One Million Six Hundred Seventy-Five Thousand
and No/100 Dollars ($1,675,000.00) (the “Existing Loan”). To evidence the Maker’s obligation
under the Existing Loan, the Maker executed in favor of the Bank that certain Term Note, also
dated as of August 1, 2008; as modified and amended by that certain Modification and Amendment
of Term Note, dated as of October 15, 2008; as further amended by that certain Second
Modification and Amendment of Term Note dated January 2, 2009; as further modified and amended
by that certain Third Modification and Amendment of Term Note, dated as of March 17, 2009;
effective as of February 15, 2009; and as further modified and amended by that certain Fourth
Modification and Amendment of Term Note, dated as of May 15, 2009, effective as of May 1, 2009
(as so modified, the “Existing Note”). The current principal balance outstanding under the
Existing Note is One Million Four Thousand Seven Hundred Forty-Six and Sixty-Five/100 Dollars
($1,004,746.65).

	C.	 	Maker, the Guarantors, and the Bank have now entered into that certain Fifth Amendment to
Loan Agreement, dated as of October 15, 2009, but effective as of July 15, 2009 (the “Fifth
Amendment”). Pursuant to the terms of the Fifth Amendment, the parties to that instrument
have agreed to extend the maturity date of the Existing Note from July 15, 2009 (the “Existing
Maturity Date”) to December 15, 2009 (the “Extended Maturity Date”) and to increase the rate
of interest due under the Existing Note.

	D.	 	The Maker and the Bank have now agreed to execute this Modification in order to evidence
their existing agreement regarding the amendments of the Existing Note.

NOW, THEREFORE, for and in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree to amend the terms of the Existing Note as follows:

	1.	 	Definitions.

Unless otherwise specifically defined herein, all defined terms used in this Modification
shall have their respective meanings set forth in the Existing Note.

2. Amendments.

	 	A.	 	Paragraph 1 of the Existing Note is hereby amended by deleting it in its
entirety and substituting the following:

1. For value received, PERMIAN LEGEND PETROLEUM LP, a Texas limited partnership (the
“Maker”), promises to pay to the order of AMERICAN STATE BANK, a state banking
association (the “Bank”), at its offices at 620 N. Grant Avenue, Odessa, Texas
79761, in lawful money of the United States of America, the sum of ONE MILLION FOUR
THOUSAND SEVEN HUNDRED AND FORTY-SIX AND SIXTY-FIVE/100 DOLLARS ($1,004,746.65),
together with interest on the principal amount from time to time outstanding
hereunder, from the date of disbursement of such principal until maturity, at a
variable rate of interest per annum (the “Variable Rate") equal to the “American
State Bank Base Rate”, as defined in the Existing Note, plus two and one-half
percentage points (2.5%), but in no event to be less than six and one-half
percentage points (6.5%), and in no event to exceed the “Highest Lawful Rate”, as
defined in the Existing Note, with adjustments to the Variable Rate to be made on
the same date as the effective date of any change in the American State Bank Base
Rate and adjustments due to changes in the Highest Lawful Rate to be made on the
effective date of any change in the Highest Lawful Rate.

	 	B.	 	Paragraph 2 of the Existing Note is hereby amended by deleting it in its
entirety and substituting the following:

2. This Note is executed pursuant to the terms of that certain Loan Agreement,
dated as of August 1, 2008; as amended under that certain First Amendment to Loan
Agreement, dated as of October 15, 2008; as further modified and amended under that
certain Second Amendment to Loan Agreement, dated as of January 2, 2009; as further
modified and amended under that certain Third Amendment to Loan Agreement, dated as
of March 17, 2009; but effective February 15, 2009; as further modified and amended
under that certain Fourth Amendment to Loan Agreement, dated as of May 15, 2009,
effective as of May 1, 2009; and as further modified and amended under that certain
Fifth Amendment to Loan Agreement, dated as of October 15, 2009, effective as of
July 15, 2009, all by and among the Maker, the Guarantors, and the Bank (as so
amended, the “Loan Agreement”). In the event of a conflict between the terms of
this Note and the terms of the Loan Agreement, the terms of the Loan Agreement shall
be deemed to be controlling. Capitalized terms not otherwise defined herein are
defined in the Loan Agreement.

	 	C.	 	Paragraph 7 of the Existing Note is hereby amended by deleting it in its
entirety and substituting the following:

7. Interest, computed on the unpaid principal balance of this Note shall be due
and payable as it accrues monthly, commencing on November 15, 2009, and thereafter
on the fifteenth day of each and every succeeding month during the term hereof,
until maturity, December 15, 2009, when the entire amount of this Note, principal
and accrued, unpaid interest, shall be due and payable.

3. Effectiveness:

	 	A.	 	Except to the extent specifically amended and supplemented hereby, all of the
terms, conditions and provisions of the Existing Note shall remain unmodified, and the
Existing Note, as amended and supplemented by this Modification is confirmed as being
in full force and effect.

	 	B.	 	All references to the Existing Note herein or in any other document or
instrument between Maker and Bank shall hereinafter be construed to be references to
the Existing Note, as modified by this Modification (as so modified, the “Note”).

4. Counterparts:

This Modification may be executed in any number of counterparts, each of which when executed
and delivered shall be deemed an original, but all of which constitute one instrument. In
making proof of this Modification, it shall not be necessary to produce or account for more
than one counterpart thereof signed by each of the parties hereto.

5. Notice of Final Agreement:

THIS FIFTH MODIFICATION AND AMENDMENT OF TERM NOTE, THE FIFTH AMENDMENT, AND THOSE
INSTRUMENTS EXECUTED CONTEMPORANEOUSLY HEREWITH REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES 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.

IN WITNESS WHEREOF, the parties hereto have executed this Modification as of the date and year
first above written.

MAKER:

PERMIAN LEGEND PETROLEUM LP,

A Texas Limited Partnership

	 
	By:Permian Legend, LLC

General Partner

	By:       /s/ Lisa P. Hamilton—

	 

	Lisa P. Hamilton

Manager

	By:       /s/ Ronnie L. Steinocher—

	 

	Ronnie L. Steinocher

Manager

	BANK:

	 

AMERICAN STATE BANK

By:       /s/ Mike Marshall—

Mike Marshall

Executive Vice President

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