Document:

NOTE: This form contract is a suggested guide only and use of this form or any
variation thereof shall be at the sole discretion and risk of the user parties.
Users of the form contract or any portion or variation thereof are encouraged to
seek the advice of counsel to ensure that their contract reflects the complete
agreement of the parties and applicable law. The International Association of
Drilling Contractors disclaims any liability whatsoever for loss or damages
which may result from use of the form contract or portions or variations
thereof. Computer generated form, reproduced under license from IADC.

                                                             Revised APRIL, 2003

                INTERNATIONAL ASSOCIATION OF DRILLING CONTRACTORS
                              DRILLING BID PROPOSAL
                                       AND
                        DAYWORK DRILLING CONTRACT - U.S.

Submitted By:
   McLachlan Drilling Co.
   P.O. Box 548, Evart, Michigan 49631

Please submit bid on this drilling contract form for performing the work
outlined below, upon the terms and for the consideration set forth, with the
understanding that if the bid is accepted by____________________________________
this instrument will constitute a Contract between us. Your bid should be mailed
or delivered not later than ________ P.M. on ___________________________, 20__
to the following address:_______________________________________________________
________________________________________________________________________________

            THIS CONTRACT CONTAINS PROVISIONS RELATING TO INDEMNITY,
                 RELEASE OF LIABILITY, AND ALLOCATION OF RISK -
                    SEE PARAGRAPHS 4.9,6.3(c), 10, 12, AND 14

This Contract is made and entered into on the date hereinafter set forth by and
between the parties herein designated as 'Operator' and 'Contractor.'

    OPERATOR:   GMX Resources Inc.
    Address:    9400 North Broadway, Suite 600
                Oklahoma City, Oklahoma 73114

    CONTRACTOR: McLachlan Drilling Co.
    Address:    P.O. Box 548/815 W. 7th Street
                Evart, Michigan 49631

IN CONSIDERATION of the mutual promises, conditions and agreements herein
contained and the specifications and special provisions set forth In Exhibit 'A'
and Exhibit 'B' attached hereto and made a part hereof (the 'Contract'),
Operator engages Contractor as an independent contractor to drill the
hereinafter designated well or wells in search of oil or gas on a Daywork Basis.

For purposes hereof, the term 'Daywork' or 'Daywork Basis' means Contractor
shall furnish equipment, labor, and perform services as herein provided, for a
specified sum per day under the direction, supervision and control of Operator
(inclusive of any employee, agent, consultant or subcontractor engaged by
Operator to direct drilling operations). When operating on a Daywork Basis,
Contractor shall be fully paid at the applicable rates of payment and assumes
only the obligations end liabilities stated herein. Except for such obligations
and liabilities specifically assumed by Contractor, Operator shall be solely
responsible and assumes liability for all consequences of operations by both
parties while on a Daywork Basis, including results and all other risks or
liabilities incurred in or incident to such operations.

1. LOCATION OF WELL:

    Well Name
    and Number: Multi-Well Project
                ----------------------------------------------------------------
    Parish/                                        Field
    County: Harrison and Panola   State: Texas     Name:  North Carthage
            --------------------         -------          ----------------------
    Well location and
    land description: Marshall, Texas
                      ----------------------------------------------------------

    1.1 Additional Well Locations or Areas:_____________________________________
________________________________________________________________________________

Locations described above are for well and Contract identification only and
Contractor assumes no liability whatsoever for a proper survey or location stake
on Operator's lease.

2. COMMENCEMENT DATE:

   Contractor agrees to use reasonable efforts to commence operations for the
   drilling of the well by the     15    day of May, 2005 or Agreeable date by
   both parties
________________________________________________________________________________
________________________________________________________________________________

3. DEPTH:

     3.1 WELL DEPTH: The well(s) shall be drilled to a depth of approximately
10,000 feet, or to the Bossier Shale formation, whichever is deeper, but the
Contractor shall not be required hereunder to drill said well(s) below a maximum
depth of 11,000 feet, unless Contractor and Operator mutually agree to drill to
a greater depth.

4. DAYWORK RATES:

   Contractor shall be paid at the following rates for the work performed
   hereunder.

     4.1 MOBILIZATION: Operator shall pay Contractor a mobilization fee of $ -
See Exhibit "A" for rates - or a mobilization day rate of $ ___________________
per day. This sum shall be due and payable in full at the time the rig is rigged
up or positioned at the well site ready to spud. Mobilization shall include:
MIR, RU: ready to pump water in pits.
________________________________________________________________________________
________________________________________________________________________________

     4.2 DEMOBILIZATION: Operator shall pay Contractor a demobilization fee of
$________________ or a demobilization day rate during tear down of $ 13,500.00
per day, provided however that no demobilization fee shall be payable if the
Contract is terminated due to the total loss or destruction of the rig.
Demobilization shall include: 12 hrs. after pits are cleaned, nipple down
B.O.P's or in the event of plug & abandonment D.P. is laid down.
________________________________________________________________________________
________________________________________________________________________________

     4.3 MOVING RATE: During the time the rig is in transit to or from a drill
site, or between drill sites, commencing on_____________, Operator shall pay
Contractor a sum of $ N/A per twenty-four (24) hour day.

     4.4 OPERATING DAY RATE: For work performed per twenty-four (24) hour day
with 5 Man Crew man crew the operating day rate shall be:

            DEPTH INTERVALS

       FROM              TO          WITHOUT DRILL PIPE      WITH DRILL PIPE
Ready to fill pits   Rig Release   $ 13,500.00   per day  $ 13,500.00   per day
__________________   ___________   $_____________per day  $_____________per day
__________________   ___________   $_____________per day  $_____________per day

Using Operator's drill pipe $ 13,500.00 per day.

The rate will begin when the drilling unit is rigged up at the drilling
location, or positioned over the location during marine work, and ready to
commence operations; and will cease when the rig is ready to be moved off the
location.

  (US. Daywork Contract-Page 1)               Form provided by Forms On-A-Disk
 Copyright (C) 2003 International             (214)340-9429  FormsOnADiSk.com
Association of Drilling Contractors
<PAGE>

                                                             Revised APRIL, 2003

  (US. Daywork Contract-Page 2)               Form provided by Forms On-A-Disk
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Association of Drilling Contractors
<PAGE>

                                                             Revised APRIL, 2003

If under the above column 'With Drill Pipe' no rates are specified, the rate per
twenty-four hour day when drill pipe is in use shall be the applicable rate
specified in the column 'Without Drill Pipe' plus compensation for any drill
pipe actually used at the rates specified below, computed on the basis of the
maximum drill pipe in use at any time during each twenty-four hour day.

                       DRILL PIPE RATE PER 24-HOUR DAY

                                          Directional or
                                         Uncontrollable
      Straight Hole     Size   Grade      Deviated Hole            Size   Grade
$____________per ft.   _____   _____   S________________per ft.   _____   _____
$____________per ft.   _____   _____   S________________per ft.   _____   _____
$____________per ft.   _____   _____   $________________per ft.   _____   _____

Directional or uncontrolled deviated hole will be deemed to exist when deviation
exceeds 24 degrees or when the change of angle exceeds 5/100' degrees per one
hundred feet.

     Drill pipe shall be considered in use not only when in actual use but also
while it is being picked up or laid down. When drill pipe is standing in the
derrick, it shall not be considered in use, provided, however, that if
Contractor furnishes special strings of drill pipe, drill collars, and handling
tools as provided for in Exhibit "A", the same shall be considered in use at all
times when an location or until released by Operator. In no event shall
fractions of an hour be considered in computing the amount of time drill pipe is
in use but such time shall be computed to the nearest hour, with thirty minutes
or more being considered a full hour and less then thirty minutes not to be
counted.

     4.5 REPAIR TIME: In the event it is necessary to shut down Contractor's rig
for repairs, excluding routine rig servicing, Contractor shall be allowed
compensation at the applicable rate for such shut down time up to a maximum of 6
hours for any one rig repair job, but not to exceed 30 hours of such
compensation for any calendar month. Thereafter, Contractor shall be compensated
at a rate of $13,500.00 per twenty-four (24) hour day less repair time. Routine
rig servicing shall include, but not be limited to, cutting and slipping
drilling line, changing pump or swivel expendables, testing BOP equipment,
lubricating rig, and __________________________________________________________.

     4.6 STANDBY TIME RATE: $13.500.00 per twenty-four(24) day. Standby time
shall be defined to include time when the rig is shut down although in readiness
to begin or resume operations but Contractor is waiting on orders of Operator or
on materials, services or other items to be furnished by Operator.

     4.7 DRILLING FLUID RATES: When drilling fluids of a type and characteristic
that increases Contractor's cost of performance hereunder, including, but not
limited to, oil-based mud or potassium chloride, are in use, Operator shall pay
Contractor in addition to the operating rate specified above:

     (a) $700.00 per man per day for Contractor's rig-site personnel. (if extra
         man is required)
     (b) $________per day additional operating rate; and
     (c) Cost of all labor, material and services plus 24 hours operating rate
         to clean rig and related equipment.

     4.8 FORCE MAJEURS RATE: $ 11,500.00 per twenty-four (24) hour day for any
continuous period that normal operations are suspended or cannot be carried on
due to conditions of Force Majeure as defined In Paragraph 17 hereof. It is,
however, understood that subject to Subparagraph 6.3 below, Operator can release
the rig in accordance with Operator's right to direct stoppage of the work,
effective when conditions will permit the rig to be moved from the location.

     4.9 REIMBURSABLE COSTS: Operator shall reimburse Contractor for the costs
of material, equipment, work or services which are to be furnished by Operator
as provided for herein but which for convenience are actually furnished by
Contractor at Operator's request, plus 10 percent for such cost of handling.
WHEN, AT OPERATOR'S REQUEST AND WITH CONTRACTOR'S AGREEMENT, THE CONTRACTOR
FURNISHES OR SUBCONTRACTS FOR CERTAIN ITEMS OR SERVICES WHICH OPERATOR IS
REQUIRED HEREIN TO PROVIDE, FOR PURPOSES OF THE INDEMNITY AND RELEASE PROVISIONS
OF THIS CONTRACT, SAID ITEMS OR SERVICES SHALL BE DEEMED TO BE OPERATOR
FURNISHED ITEMS OR SERVICES. ANY SUBCONTRACTORS SO HIRED SHALL BE DEEMED TO BE
OPERATOR'S CONTRACTOR, AND OPERATOR SHALL NOT BE RELIEVED OF ANY OF ITS
LIABILITIES IN CONNECTION THEREWITH.

     4.10 REVISION IN RATES: The rates and/or payments herein set forth due to
Contractor from Operator shall be revised to reflect the change in costs if the
costs in the aggregate of the Items hereinafter listed shall vary by more than
10 percent from the costs thereof on the date of this Contract or by the same
percent after the dale of any revision pursuant to this Subparagraph:

     (a) Labor costs, Including all benefits, of Contractor'p personnel;
     (b) Contractor's cost of insurance premiums;
     (c) Contractor's cost of fuel, including all taxes and fees; the cost per
         gallon/MCF being $ NA;
     (d) Contractor's cost of catering, when applicable;
     (e) If Operator requires Contractor to increase or decrease the number of
         Contractor's personnel;
     (f) Contractor's cost of spare parts and supplies with the understanding
         that such spare parts and supplies constitute 11.5 percent of  the
         operating rate and that the parties shall use the U.S. Bureau of Labor
         Statistics Oil Field and Gas Field Drilling Machinery Producer Price
         Index (Series ID WPU119102) to determine to what extent a price
         variance has occurred In said spare parts and supplies;
     (g) If there is any change in legislation or regulations in the area in
         which Contractor is working or other unforeseen, unusual event that
         alters Contractor's financial burden.

5.   TIME OF PAYMENT

     Payment is due by Operator to Contractor as follows:

     5.1 Payment for mobilization, drilling and other work performed at
applicable rates, and all other applicable charges shall be due, upon
presentation of invoice therefor, upon completion of mobilization,
demobilization, rig release of at the end of the month in which such work was
performed or other charges are incurred, whichever shall first occur. All
invoices may be mailed to Operator at the address hereinabove shown, unless
Operator does hereby designate that such invoices shall be mailed as follows:
NA.

     5.2 Disputed Invoices, and Late Payment: Operator shall pay all invoices
within 20 days after receipt except that if Operator disputes an invoice or any
part thereof, Operator shall, within fifteen days after receipt of the invoice,
notify Contractor of the item disputed, specifying the reason therefor, and
payment of the disputed item may be withheld until settlement of the dispute,
but timely payment shall be made of any undisputed portion. Any sums (including
amounts ultimately paid with respect to a disputed invoice) not paid within the
above specified days shall bear interest at the rate of 0.6% percent or the
maximum legal rate, whichever is less, per month from the due date until paid.
If Operator does not pay undisputed items within the above stated time,
Contractor may suspend operations or terminate this Contract as specified under
Subparagraph 6.3.

6.   TERM:

     6.1 Duration of Contract: This Contract shall remain in full force and
effect until drilling operations are completed on the well or wells specified in
Paragraph 1 above, or for a term of 1 year, commencing on the date specified in
Paragraph 2 above.

     6.2 Extension of Term: Operator may extend the term of this Contract for
______________ well(s) or for a period agreeable to both parties by giving
notice to Contractor at least 60 days prior to completion of the well then being
drilled or by the term of this contract.
________________________________________________________________________________

     6.3 Early Termination:

     (a) By Either Party: Upon giving of written notice, either party may
terminate this Contract when total loss or destruction of the rig, or a major
breakdown with indefinite repair time necessitate stopping operations hereunder.

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                                                             Revised APRIL, 2003

     (b) By Operator. Notwithstanding the provisions of Paragraph 3 with respect
to the depth to be drilled, Operator shall have the right to direct the stoppage
of the work to be performed by Contractor hereunder at any time prior to
reaching the specified depth, and even though Contractor has made no default
hereunder. In such event, Operator shall reimburse Contractor as set forth in
Subparagraph 6.4 hereof.

     (c) By Contractor: Notwithstanding the provisions of Paragraph 3 with
respect to the depth to be drilled, in the event Operator shall become
insolvent, or be adjudicated a bankrupt, or file, by way of petition or answer,
a debtor's petition or other pleading seeking adjustment of Operator's debts,
under any bankruptcy or debtor's relief laws now or hereafter prevailing, or if
any such be filed against Operator, or in case a receiver be appointed of
Operator or Operator's property, or any part thereof, or Operator's affairs be
placed in the hands of a Creditor's Committee, or, following 10 business days
prior written notice to Operator if Operator does not pay Contractor within the
time specified in Subparagraph 5.2 all undisputed items due and owing,
Contractor may, at its option, (1) elect to terminate further performance of any
work under this Contract and Contractor's right to compensation shall be as set
forth in Subparagraph 6.4 hereof, or (2) suspend operations until payment is
made by Operator in which event the standby time rate contained in Subparagraph
4.6 shall apply until payment is made by Operator and operations are resumed. IN
ADDITION TO CONTRACTORS RIGHTS TO SUSPEND OPERATIONS OR TERMINATE PERFORMANCE
UNDER THIS PARAGRAPH, OPERATOR HEREBY EXPRESSLY AGREES TO PROTECT, DEFEND AND
INDEMNIFY CONTRACTOR FROM AND AGAINST ANY CLAIMS, DEMANDS AND CAUSES OF ACTION,
INCLUDING ALL COSTS OF DEFENSE, IN FAVOR OF OPERATOR, OPERATOR'S, CO-VENTURERS,
CO-LESSEES AND JOINT OWNERS, OR ANY OTHER PARTIES ARISING OUT OF ANY DRILLING
COMMITMENTS OR OBLIGATIONS CONTAINED IN ANY LEASE, FARMOUT AGREEMENT OR OTHER
AGREEMENT, WHICH MAY BE AFFECTED BY SUCH SUSPENSION OF OPERATIONS OR TERMINATION
OF PERFORMANCE HEREUNDER.

     6.4 Early Termination Compensation:

     (a) Prior to Commencement: In the event Operator terminates this Contract
prior to commencement of operations hereunder, Operator shall pay Contractor as
liquidated damages and not as a penalty a sum equal to the standby time rate
(Subparagraph 4.8) for a period of 10 days or a lump sum of $135,000.00.

     (b) Prior to Spudding: If such termination occurs after commencement of
operations but prior to the spudding of the well, Operator shall pay to
Contractor the sum of the following: (1) all expenses reasonably and necessarily
incurred and to be incurred by Contractor by reason of the Contract and by
reason of the premature termination of the work, including the expense of
drilling or other crew members and supervision directly assigned to the rig; (2)
ten percent (10%) of the amount of such reimbursable expenses; and (3) a sum
calculated at the standby time rate for all time from the date upon which
Contractor commences any operations hereunder down to such date subsequent to
the date of termination as will afford Contractor reasonable time to dismantle
its rig and equipment provided, however, if this Contract is for a term of more
than one well or for a period of time, Operator shall pay Contractor, in
addition to the above, the Force Majeure Rate, less any unnecessary labor, from
that date subsequent to termination upon which Contractor completes dismantling
its rig and equipment until the end of the term. See Section 7 of Exhibit "A".

     (c) Subsequent to spudding: If such termination occurs after the spudding
of the well, Operator shall pay Contractor (1) the amount for all applicable
rates and all other charges and reimbursements due to Contractor; but in no
event shall such sum, exclusive of reimbursements due, be less than would have
been earned for Actual days at the applicable rate "Without Drill Pipe" and the
actual amount due for drill pipe used in accordance with the above rates; or (2)
at the election of Contractor and in lieu of the foregoing, Operator shall pay
Contractor for all expenses reasonably and necessarily incurred and to be
incurred by reason of this Contract and by reason of such premature termination
plus a lump sum of $50,000.00 provided, however, if this Contract is for a term
of more than one well or for a period of time, Operator shall pay Contractor, in
addition to the above, the Force Majeure Rate less any unnecessary labor from
the date of termination until the end of the term or __________________________.

7. CASING PROGRAM

     Operator shall have the right to designate the points at which casing will
be set and the manner of setting, cementing and testing. Operator may modify the
casing program, however, any such modification which materially increases
Contractor's hazards or costs can only be made by mutual consent of Operator and
Contractor and upon agreement as to the additional compensation to be paid
Contractor as a result thereof.

8. DRILLING METHODS AND PRACTICES:

     8.1 Contractor shall maintain well control equipment in good condition at
all times and shall use all reasonable means to prevent and control fires and
blowouts and to protect the hole.

     8.2 Subject to the terms hereof, and at Operators cost, at all times during
the drilling of the well, Operator shall have the right to control the mud
program, and the drilling fluid must be of a type and have characteristics and
be maintained by Contractor in accordance with the specifications shown in
Exhibit "A".

    8.3 Each party hereto agrees to comply with all laws, rules, and regulations
of any federal, state or local governmental authority which are now or may
become applicable to that party's operations covered by or arising out of the
performance of this Contract. When required by law, the terms of Exhibit "B"
shall apply to this Contract. In the event any provision of this Contract is
inconsistent with or contrary to any applicable federal, state or local law,
rule or regulation, said provision shall be deemed to be modified to the extent
required to comply with said law, rule or regulation, and as so modified said
provision and this Contract shall continue in full force and affect.

     8.4 Contractor shall keep and furnish to Operator an accurate record of the
work performed and formations drilled on the IADC-API Daily Drilling Report Form
or other form acceptable to Operator. A legible copy of said form shall be
furnished by Contractor to Operator.

     8.5 If requested by Operator, Contractor shall furnish Operator with a copy
of delivery tickets covering any material or supplies provided by Operator and
received by Contractor.

9. INGRESS, EGRESS, AND LOCATION:

     Operator hereby assigns to Contractor all necessary rights of ingress and
egress with respect to the tract on which the well is to be located for the
performance by Contractor of all work contemplated by this Contract. Should
Contractor be denied free access to the location for any reason not reasonably
within Contractors control, any time lost by Contractor as a result of such
denial shall be paid for at the standby time rate. Operator agrees at all times
to maintain the road and location in such a condition that will allow free
access and movement to and from the drilling site in an ordinarily equipped
highway type vehicle. If Contractor is required to use bulldozers, tractors,
four-wheel drive vehicles, or any other specialized transportation equipment for
the movement of necessary personnel, machinery, or equipment over access roads
or on the drilling location, Operator shall furnish the same at its expense and
without cost to Contractor. The actual cost of repairs to any transportation
equipment furnished by Contractor or its personnel damaged us a result of
improperly maintained access roads or location will be charged to Operator.
Operator shall reimburse Contractor for all amounts reasonably expended by
Contractor for repairs and/or reinforcement of roads, bridges and related or
similar facilities (public and private) required as a direct result of a rig
move pursuant to performance hereunder. Operator shall be responsible for any
costs associated with leveling the rig because of location settling.

10. SOUND LOCATION:

     Operator shall prepare a sound location adequate in size and capable of
properly supporting the drilling rig, and shall be responsible for a casing and
cementing

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                                                             REVISED APRIL, 2003

program adequate to prevent soil and subsoil wash out. It is recognized that
Operator has superior knowledge of the location end access routes to the
location, and must advise Contractor of any subsurface conditions, or
obstructions (including, but not limited to, mines, caverns, sink holes,
streams, pipelines, power lines and communication lines) which Contractor might
encounter while en route to the location or during operations hereunder. IN THE
EVENT SUBSURFACE CONDITIONS CAUSE A CRATERING OR SHIFTING OF THE LOCATION
SURFACE, OR IF SEABED CONDITIONS PROVE UNSATISFACTORY TO PROPERLY SUPPORT THE
RIG DURING MARINE OPERATIONS HEREUNDER, AND LOSS OR DAMAGE TO THE RIG OR ITS
ASSOCIATED EQUIPMENT RESULTS THEREFROM, OPERATOR SHALL, WITHOUT REGARD TO OTHER
PROVISIONS OF THIS CONTRACT, INCLUDING SUBPARAGRAPH 14.1 HEREOF, REIMBURSE
CONTRACTOR FOR ALL SUCH LOSS OR DAMAGE INCLUDING REMOVAL OF DEBRIS AND PAYMENT
OF FORCE MAJEURE RATE DURING REPAIR AND/OR DEMOBILIZATION IF APPLICABLE.

11. EQUIPMENT CAPACITY

     Operations shall not be attempted under any conditions which exceed the
capacity of the equipment specified to be used hereunder or where canal or water
depths are in excess of N/A feet. Without prejudice to the provisions of
Paragraph 14 hereunder, Contractor shall have the right to make the final
decision as to when an operation or attempted operation would exceed the
capacity of specified equipment. /See section 7 of Exhibit "A"

12. TERMINATION OF LOCATION LIABILITY:

     WHEN CONTRACTOR HAS CONCLUDED OPERATIONS AT THE WELL LOCATION, OPERATOR
SHALL THEREAFTER BE LIABLE FOR DAMAGE TO PROPERTY, PERSONAL INJURY OR DEATH OF
ANY PERSON WHICH OCCURS AS A RESULT OF CONDITIONS OF THE LOCATION AND CONTRACTOR
SHAFT BE RELIEVED OF SUCH LIABILITY; PROVIDED, HOWEVER, IF CONTRACTOR SHALL
SUBSEQUENTLY REENTER UPON THE LOCATION FOR ANY REASON, INCLUDING REMOVAL OF THE
RIG, ANY TERM OF THE CONTRACT RELATING TO SUCH REENTRY ACTIVITY SHALL BECOME
APPLICABLE DURING SUCH PERIOD.

13. INSURANCE

     During the life of this Contract, Contractor shall at Contractor's expense
maintain, with an insurance company or companies authorized to do business in
the state where the work is to be performed, insurance coverages of the kind and
in the amount set forth In Exhibit "A", insuring the liabilities specifically
assumed by Contractor in Paragraph 14 of this Contract. Contractor shall procure
from the company or companies writing said insurance a certificate or
certificates that said insurance is in full force and effect and that the same
shall not be canceled or materially changed without ten (10) days prior written
notice to Operator. For liabilities assumed hereunder by Contractor, its
insurance shall be endorsed to provide that the underwriters waive their right
of subrogation against Operator. Operator will, as well, cause its insurer to
waive subrogation against Contractor for liability it assumes and shall
maintain, at Operator's expense, insurance coverage as set forth in Exhibit "A"
of the same kind and in the same amount as is required of Contractor, insuring
the liabilities specifically assumed by Operator in Paragraph 14 of this
Contract. Operator shall procure from the company or companies writing said
insurance a certificate or certificates that said insurance is in full force and
effect and that the same shall not be canceled or materially changed without ten
(10) days prior written notice to Contractor. Operator and Contractor shall
cause their respective underwriters to name the other additionally insured but
only to the extent of the indemnification obligations assumed herein.

14. RESPONSIBILITY FOR LOSS OR DAMAGE, INDEMNITY, RELEASE OF LIABILITY AND
ALLOCATION OF RISK:

     14.1 CONTRACTOR'S SURFACE EQUIPMENT: CONTRACTOR SHALL ASSUME LIABILITY, AT
ALL TIMES FOR DAMAGE TO OR DESTRUCTION OF CONTRACTOR'S SURFACE EQUIPMENT,
REGARDLESS OF WHEN OR HOW SUCH DAMAGE OR DESTRUCTION OCCURS, AND CONTRACTOR
SHALL RELEASE OPERATOR OF ANY LIABILITY FOR ANY SUCH LOSS, EXCEPT LOSS OR DAMAGE
UNDER THE PROVISIONS OF PARAGRAPH 10 OR SUBPARAGRAPH 14.3.

     14.2 CONTRACTOR'S IN-HOLE EQUIPMENT: OPERATOR SHALL ASSUME LIABILITY AT ALL
TIMES FOR DAMAGE TO OR DESTRUCTION OF CONTRACTOR'S IN-HOLE EQUIPMENT, INCLUDING,
BUT NOT LIMITED TO, DRILL PIPE, DRILL COLLARS, AND TOOL JOINTS, AND OPERATOR
SHALL REIMBURSE CONTRACTOR FOR THE VALUE OF ANY SUCH LOSS OR DAMAGE; THE VALUE
TO BE DETERMINED BY AGREEMENT BETWEEN CONTRACTOR AND OPERATOR AS CURRENT REPAIR
COSTS OR 100 PERCENT OF CURRENT NEW REPLACEMENT COST OF SUCH EQUIPMENT DELIVERED
TO THE WELL SITE.

     14.3 CONTRACTOR'S EQUIPMENT - ENVIRONMENTAL LOSS OR DAMAGE: NOTWITHSTANDING
THE PROVISIONS OF SUBPARAGRAPH 14.1 ABOVE, OPERATOR SHALL ASSUME LIABILITY AT
ALL TIMES FOR DAMAGE TO OR DESTRUCTION OF CONTRACTOR'S EQUIPMENT RESULTING FROM
THE PRESENCE OF H2S, CO2 OR OTHER CORROSIVE ELEMENTS THAT ENTER THE DRILLING
FLUIDS FROM SUBSURFACE FORMATIONS OR THE USE OF CORROSIVE, DESTRUCTIVE OR
ABRASIVE ADDITIVES IN THE DRILLING FLUIDS.

     14.4 OPERATOR'S EQUIPMENT: OPERATOR SHALL ASSUME LIABILITY AT ALL TIMES FOR
DAMAGE TO OR DESTRUCTION OF OPERATOR'S OR ITS CO-VENTURERS', CO-LESSEES' OR
JOINT OWNERS' EQUIPMENT INCLUDING, BUT NOT LIMITED TO, CASING, TUBING, WELL HEAD
EQUIPMENT, AND PLATFORM IF APPLICABLE, REGARDLESS OF WHEN OR HOW SUCH DAMAGE OR
DESTRUCTION OCCURS, AND OPERATOR SHALL RELEASE CONTRACTOR OF ANY LIABILITY FOR
ANY SUCH LOSS OR DAMAGE.

     14.5 THE HOLE: IN THE EVENT THE HOLE SHOULD BE LOST OR DAMAGED, OPERATOR
SHALL BE SOLELY RESPONSIBLE FOR SUCH DAMAGE TO OR LOSS OF THE HOLE, INCLUDING
THE CASING THEREIN. OPERATOR SHALL RELEASE CONTRACTOR AND ITS SUPPLIERS,
CONTRACTORS AND SUBCONTRACTORS OF ANY TIER OF ANY LIABILITY FOR DAMAGE TO OR
LOSS OF THE HOLE, AND SHALL PROTECT DEFEND AND INDEMNIFY CONTRACTOR AND ITS
SUPPLIERS, CONTRACTORS AND SUBCONTRACTORS OF ANY TIER FROM AND AGAINST ANY AND
ALL CLAIMS, LIABILITY, AND EXPENSE RELATING TO SUCH DAMAGE TO OR LOSE OF THE
HOLE.

     14.6 UNDERGROUND DAMAGE: OPERATOR SHALL RELEASE CONTRACTOR AND ITS
SUPPLIERS, CONTRACTORS AND SUBCONTRACTORS OF ANY TIER OF ANY LIABILITY FOR, AND
SHALL PROTECT DEFEND AND INDEMNIFY CONTRACTOR AND ITS SUPPLIERS, CONTRACTORS AND
SUBCONTRACTORS OF ANY TIER FROM AND AGAINST ANY AND ALL CLAIMS, LIABILITY, AND
EXPENSE RESULTING FROM OPERATIONS UNDER THIS CONTRACT ON ACCOUNT OF INJURY TO,
DESTRUCTION OF, OR LOSS OR IMPAIRMENT OF ANY PROPERTY RIGHT IN OR TO OIL, GAS,
OR OTHER MINERAL SUBSTANCE OR WATER, IF AT THE TIME OF THE ACT OR OMISSION
CAUSING SUCH INJURY, DESTRUCTION, LOSS, OR IMPAIRMENT, SAID SUBSTANCE HAD NOT
BEEN REDUCED TO PHYSICAL POSSESSION ABOVE THE SURFACE OF THE EARTH, AND FOR ANY
LOSS OR DAMAGE TO ANY FORMATION, STRATA, OR RESERVOIR BENEATH THE SURFACE OF THE
EARTH.

     14.7 INSPECTION OF MATERIALS FURNISHED BY OPERATOR: CONTRACTOR AGREES TO
VISUALLY INSPECT ALL MATERIALS FURNISHED BY OPERATOR BEFORE USING SAME AND TO
NOTIFY OPERATOR OF ANY APPARENT DEFECTS THEREIN. CONTRACTOR SHALL NOT BE LIABLE
FOR ANY LOSS OR DAMAGE RESULTING FROM THE USE OF MATERIALS FURNISHED BY
OPERATOR, AND OPERATOR SHALL RELEASE CONTRACTOR FROM, AND SHALL PROTECT, DEFEND
AND INDEMNIFY CONTRACTOR FROM AND AGAINST, ANY SUCH LIABILITY.

     14.8 CONTRACTOR'S INDEMNIFICATION OF OPERATOR: CONTRACTOR SHALL RELEASE
OPERATOR OF ANY LIABILITY FOR, AND SHALL PROTECT DEFEND AND INDEMNIFY OPERATOR
FROM AND AGAINST ALL CLAIMS, DEMANDS, AND CAUSES OF ACTION OF EVERY KIND AND
CHARACTER, WITHOUT LIMIT AND WITHOUT REGARD TO THE CAUSE OR CAUSES THEREOF OR
THE NEGLIGENCE OF ANY PARTY OR PARTIES, ARISING IN CONNECTION HEREWITH IN FAVOR
OF CONTRACTOR'S EMPLOYEES OR CONTRACTOR'S SUBCONTRACTORS OF ANY TIER (INCLUSIVE
OF ANY AGENT OR CONSULTANT ENGAGED BY CONTRACTOR) OR THEIR EMPLOYEES, OR
CONTRACTOR'S INVITEES, ON ACCOUNT OF BODILY INJURY, DEATH OR DAMAGE TO PROPERTY.
CONTRACTOR'S INDEMNITY UNDER THIS PARAGRAPH SHALL BE WITHOUT REGARD TO AND
WITHOUT ANY RIGHT TO CONTRIBUTION FROM ANY INSURANCE MAINTAINED BY OPERATOR
PURSUANT TO PARAGRAPH 13. IF IT IS JUDICIALLY DETERMINED THAT THE MONETARY
LIMITS OF INSURANCE REQUIRED HEREUNDER OR OF THE INDEMNITIES VOLUNTARILY ASSUMED
UNDER SUBPARAGRAPH 14.8 (WHICH CONTRACTOR AND OPERATOR HEREBY AGREE WILL BE
SUPPORTED EITHER BY AVAILABLE LIABILITY INSURANCE, UNDER WHICH THE INSURER HAS
NO RIGHT OF SUBROGATION AGAINST THE INDEMNITIES, OR VOLUNTARILY SELF-INSURED, IN
PART OR WHOLE) EXCEED THE MAXIMUM LIMITS PERMITTED UNDER APPLICABLE LAW, IT IS
AGREED THAT SAID INSURANCE REQUIREMENTS OR INDEMNITIES SHALL AUTOMATICALLY BE
AMENDED TO CONFORM TO THE MAXIMUM MONETARY LIMITS PERMITTED UNDER SUCH LAW.

     14.9 OPERATOR'S INDEMNIFICATION OF CONTRACTOR: OPERATOR SHALL RELEASE
CONTRACTOR OF ANY LIABILITY FOR, AND SHALL PROTECT, DEFEND AND INDEMNIFY
CONTRACTOR FROM AND AGAINST ALL CLAIMS, DEMANDS, AND CAUSES ACTION OF EVERY
KIND AND CHARACTER, WITHOUT LIMIT AND WITHOUT REGARD TO THE CAUSE OR CAUSES
THEREOF OR THE NEGLIGENCE OF ANY

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                                                             REVISED APRIL, 2003

PARTY OR PARTIES, ARISING IN CONNECTION HEREWITH IN FAVOR OF OPERATOR'S
EMPLOYEES OR OPERATOR'S CONTRACTORS OF ANY TIER (INCLUSIVE OF ANY AGENT
CONSULTANT OR SUBCONTRACTOR ENGAGED BY OPERATOR) OR THEIR EMPLOYEES, OR
OPERATORS INVITEES, OTHER THAN THOSE PARTIES IDENTIFIED IN SUBPARAGRAPH 14.8 ON
ACCOUNT OF BODILY INJURY, DEATH OR DAMAGE TO PROPERTY. OPERATOR'S INDEMNITY
UNDER THIS PARAGRAPH SHALL BE WITHOUT REGARD TO AND WITHOUT ANY RIGHT TO
CONTRIBUTION FROM ANY INSURANCE MAINTAINED BY CONTRACTOR PURSUANT TO PARAGRAPH
13. IF IT IS JUDICIALLY DETERMINED THAT THE MONETARY LIMITS OF INSURANCE
REQUIRED HEREUNDER OR OF THE INDEMNITIES VOLUNTARILY ASSUMED UNDER SUBPARAGRAPH
14.9 (WHICH CONTRACTOR AND OPERATOR HEREBY AGREE WILL BE SUPPORTED EITHER BY
AVAILABLE LIABILITY INSURANCE, UNDER WHICH THE INSURER HAS NO RIGHT OF
SUBROGATION AGAINST THE INDEMNITEES, OR VOLUNTARILY SELF-INSURED, IN PART OR
WHOLE) EXCEED THE MAXIMUM LIMITS PERMITTED UNDER APPLICABLE LAW, IT IS AGREED
THAT SAID INSURANCE REQUIREMENTS OR INDEMNITIES SHALL AUTOMATICALLY BE AMENDED
TO CONFORM TO THE MAXIMUM MONETARY LIMITS PERMITTED UNDER SUCH LAW.

     14.10 LIABILITY FOR WILD WELL: OPERATOR SHALL BE LIABLE FOR THE COST OF
REGAINING CONTROL OF ANY WILD WELL, AS WELL AS FOR COST OF REMOVAL OF ANY DEBRIS
AND COST OF PROPERTY REMEDIATION AND RESTORATION, AND OPERATOR SHALL RELEASE,
PROTECT, DEFEND AND INDEMNIFY CONTRACTOR AND ITS SUPPLIERS, CONTRACTORS AND
SUBCONTRACTORS OF ANY TIER FROM AND AGAINST ANY LIABILITY FOR SUCH COST.

     14.11 POLLUTION OR CONTAMINATION: NOTWITHSTANDING ANYTHING TO THE CONTRARY
CONTAINED HEREIN, EXCEPT THE PROVISIONS OF PARAGRAPHS 10 AND 12, IT IS
UNDERSTOOD AND AGREED BY AND BETWEEN CONTRACTOR AND OPERATOR THAT THE
RESPONSIBILITY FOR POLLUTION OR CONTAMINATION SHALL BE AS FOLLOWS:

     (A) CONTRACTOR SHALL ASSUME ALL RESPONSIBILITY FOR, INCLUDING CONTROL AND
REMOVAL OF, AND SHALL PROTECT DEFEND AND INDEMNIFY OPERATOR FROM AND AGAINST ALL
CLAIMS, DEMANDS AND CAUSES OF ACTION OF EVERY KIND AND CHARACTER ARISING FROM
POLLUTION OR CONTAMINATION, WHICH ORIGINATES ABOVE THE SURFACE OF THE LAND OR
WATER FROM SPILLS OF FUELS, LUBRICANTS, MOTOR OILS, PIPE DOPE, PAINTS, SOLVENTS,
BALLAST, BILGE AND GARBAGE, EXCEPT UNAVOIDABLE POLLUTION FROM RESERVE PITS,
WHOLLY IN CONTRACTOR'S POSSESSION AND CONTROL AND DIRECTLY ASSOCIATED WITH
CONTRACTOR'S EQUIPMENT AND FACILITIES.

     (B) OPERATOR SHALL ASSUME ALL RESPONSIBILITY FOR, INCLUDING CONTROL AND
REMOVAL OF, AND SHALL PROTECT, DEFEND AND INDEMNIFY CONTRACTOR AND ITS
SUPPLIERS, CONTRACTORS AND SUBCONTRACTORS OR ANY TIER FROM AND AGAINST ALL
CLAIMS, DEMANDS, AND CAUSES OF ACTION OF EVERY KIND AND CHARACTER ARISING
DIRECTLY OR INDIRECTLY FROM ALL OTHER POLLUTION OR CONTAMINATION WHICH MAY OCCUR
DURING THE CONDUCT OF OPERATION HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THAT
WHICH MAY RESULT FROM FIRE, BLOWOUT, CRATERING, SEEPAGE OR ANY OTHER
UNCONTROLLED FLOW OF OIL, GAS, WATER OR OTHER SUBSTANCE, AS WELL AS THE USE OR
DISPOSITION OF ALL DRILLING FLUIDS, INCLUDING, BUT NOT LIMITED TO, OIL EMULSION,
OIL BASE OR CHEMICALLY TREATED DRILLING FLUIDS, CONTAMINATED CUTTINGS OR
CAVINGS, LOST CIRCULATION AND FISH RECOVERY MATERIALS AND FLUIDS. OPERATOR SHALL
RELEASE CONTRACTOR AND ITS SUPPLIERS, CONTRACTORS AND SUBCONTRACTORS OF ANY TIER
OF ANY LIABILITY FOR THE FOREGOING.

     (C) IN THE EVENT A THIRD PARTY COMMITS AN ACT OR OMISSION WHICH RESULTS IN
POLLUTION OR CONTAMINATION FOR WHICH EITHER CONTRACTOR OR OPERATOR, FOR WHOM
SUCH PARTY IS PERFORMING WORK, IS HELD TO BE LEGALLY LIABLE, THE RESPONSIBILITY
THEREFOR SHALL BE CONSIDERED, AS BETWEEN CONTRACTOR AND OPERATOR, TO BE THE SAME
AS IF THE PARTY FOR WHOM THE WORK WAS PERFORMED HAD PERFORMED THE SAME AND ALL
OF THE OBLIGATIONS RESPECTING PROTECTION, DEFENSE, INDEMNITY AND LIMITATION OF
RESPONSIBILITY AND LIABILITY, ASSET FORM IN (A) END (B) ABOVE, SHALL BE
SPECIFICALLY APPLIED.

     14.12 CONSEQUENTIAL DAMAGES: SUBJECT TO AND WITHOUT AFFECTING THE
PROVISIONS OF THIS CONTRACT REGARDING THE PAYMENT RIGHTS AND OBLIGATIONS OF THE
PARTIES OR THE RISK OF LOSS, RELEASE AND INDEMNITY RIGHTS AND OBLIGATIONS OF THE
PARTIES, EACH PARTY SHALL AT ALL TIMES BE RESPONSIBLE FOR AND HOLD HARMLESS AND
INDEMNIFY THE OTHER PARTY FROM AND AGAINST ITS OWN SPECIAL, INDIRECT OR
CONSEQUENTIAL DAMAGES, AND THE PARTIES AGREE THAT SPECIAL, INDIRECT OR
CONSEQUENTIAL DAMAGES SHALL BE DEEMED TO INCLUDE, WITHOUT LIMITATION, THE
FOLLOWING: LOSS OF PROFIT OR REVENUE; COSTS AND EXPENSES RESULTING FROM BUSINESS
INTERRUPTIONS; LOSS OF OR DELAY IN PRODUCTION; LOSS OF OR DAMAGE TO THE
LEASEHOLD; LOSS OF OR DELAY IN DRILLING OPERATING RIGHTS; COST OF OR LOSS OF USE
OF PROPERTY, EQUIPMENT, MATERIALS AND SERVICES, INCLUDING WITHOUT LIMITATION
THOSE PROVIDED BY CONTRACTORS OR SUBCONTRACTORS OF EVERY TIER OR BY THIRD
PARTIES. OPERATOR SHALL AT ALL TIMES BE RESPONSIBLE FOR AND HOLD HARMLESS AND
INDEMNIFY CONTRACTOR AND ITS SUPPLIERS, CONTRACTORS AND SUBCONTRACTORS OF ANY
TIER FROM AND AGAINST ALL CLAIMS, DEMANDS AND CAUSES OF ACTION OF EVERY KIND AND
CHARACTER IN CONNECTION WITH SUCH SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES
SUFFERED BY OPERATOR'S CO-OWNERS, CO-VENTURERS, CO-LESSEES, FARMERS, FARMEES,
PARTNERS AND JOINT OWNERS.

     14.13 INDEMNITY OBLIGATION: EXCEPT AS OTHERWISE EXPRESSLY LIMITED IN THIS
CONTRACT, IT IS THE INTENT OF PARTIES HERETO THAT AN RELEASES, INDEMNITY
OBLIGATIONS AND/OR LIABILITIES ASSUMED BY SUCH PARTIES UNDER TERMS OF THIS
CONTRACT, INCLUDING, WITHOUT LIMITATION, SUBPARAGRAPHS 4.9 AND 6.3(C),
PARAGRAPHS 10 AND 12, AND SUBPARAGRAPHS 14.1 THROUGH 14.12 HEREOF, BE WITHOUT
LIMIT AND WITHOUT REGARD TO THE CAUSE OR CAUSES THEREOF, INCLUDING, BUT NOT
LIMITED TO, PRE-EXISTING CONDITIONS, DEFECT OR RUIN OF PREMISES OR EQUIPMENT,
STRICT LIABILITY, REGULATORY OR STATUTORY LIABILITY, PRODUCTS LIABILITY, BREACH
OF REPRESENTATION OR WARRANTY (EXPRESS OR IMPLIED), BREACH OF DUTY (WHETHER
STATUTORY, CONTRACTUAL OR OTHERWISE) ANY THEORY OF TORT, BREACH OF CONTRACT,
FAULT, THE NEGLIGENCE OF ANY DEGREE OR CHARACTER (REGARDLESS OF WHETHER
NEGLIGENCE IS SOLE, JOINT OR CONCURRENT; ACTIVE, PASSIVE OR GROSS) OF ANY PARTY
OR PARTIES, INCLUDING THE PARTY SEEKING THE BENEFIT OF THE RELEASE, INDEMNITY OR
ASSUMPTION OF LIABILITY, OR ANY OTHER THEORY OF LEGAL LIABILITY, THE
INDEMNITIES, AND RELEASES AND ASSUMPTIONS OF LIABILITY EXTENDED BY THE PARTIES
HERETO UNDER THE PROVISIONS OF SUBPARAGRAPHS 4.9 AND 6.3 AND PARAGRAPHS 10,12
AND 14 SHALL INURE TO THE BENEFIT OF SUCH PARTIES, THEIR CO-VENTURERS,
CO-LESSEES, JOINT OWNERS, THEIR PARENT, HOLDING AND AFFILIATED COMPANIES AND THE
OFFICERS, DIRECTORS, STOCKHOLDERS, PARTNERS, MANAGERS, REPRESENTATIVES,
EMPLOYEES, CONSULTANTS, AGENTS, SERVANTS AND INSURERS OF EACH. EXCEPT AS
OTHERWISE PROVIDED HEREIN, SUCH INDEMNIFICATION AND ASSUMPTIONS OF LIABILITY
SHALL NOT BE DEEMED TO CREATE ANY RIGHTS TO INDEMNIFICATION IN ANY PERSON OR
ENTITY NOT A PARTY TO THIS CONTRACT, EITHER AS A THIRD PARTY BENEFICIARY OR BY
REASON OF ANY AGREEMENT OF INDEMNITY BETWEEN ONE OF THE PARTIES HERETO AND
ANOTHER PERSON OR ENTITY NOT A PARTY TO THIS CONTRACT.

15. AUDIT

     If any payment provided for hereunder is made on the basis of Contractor's
costs, Operator shall have the right to audit Contractor's books and records
relating to such costs. Contractor agrees to maintain such books and records for
a period of two (2) years from the date such costs were incurred and to make
such books and records readily available to Operator at any reasonable time or
times within the period.

16. NO WAIVER EXCEPT IN WRITING

     It is fully understood and agreed that none of the requirements of this
Contract shall be considered as waived by either party unless the same is done
in writing, and then only by the persons executing this Contract, or other duly
authorized agent or representative of the party.

17. FORCE MAJEURE

     Except as provided in this Paragraph 17 and without prejudice to the risk
of loss, release and indemnity obligations under this Contract, each party to
this Contract shall be excused from complying with the terms of this Contract,
except for the payment of monies when due, if and for so long as such
compliance is hindered or prevented by a Force Majeure Event. As used in this
contract, "Force Majeure Event" includes: acts of God, action of the elements,
wars (declared or undeclared), insurrection, revolution, rebellions or civil
strife, piracy, civil war or hostile action, terrorist acts, riots, strikes,
differences with workmen, acts of public enemies, federal or state laws, rules,
regulations dispositions or orders of any governmental authorities having
jurisdiction in the premises or of any other group, organization or informal
association (whether or not formally recognized as a government), inability to
procure material, equipment, fuel or necessary labor in the open market, acute
and unusual labor or material, equipment or fuel shortages, or any other causes
(except financial) beyond the control of either party. Neither Operator nor
Contractor shall be required against its will to adjust any labor or similar
disputes except in accordance with applicable law. In the event that either
party hereto is rendered unable, wholly or in part, by any of these causes to
carry out its obligation under this Contract, it is agreed that such party shall
give notice and defaults of Force Majeure in writing to the other party as

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                                                             REVISED APRIL, 2003

promptly as possible after its occurrence. In such cases, the obligations of the
party giving the notice shall be suspended during the continuance of any
inability so caused except that Operator shall be obligated to pay to Contractor
the Force Majeure Rate provided for in Subparagraph 4.8 above.

18. GOVERNING LAW:

     This Contract shall be construed, governed, interpreted, enforced and
litigated, and the relations between the parties determined in accordance with
the laws of Texas.

19. INFORMATION CONFIDENTIAL:

     Upon written request by Operator, information obtained by Contractor in the
conduct of drilling operations on this well, including, but not limited to,
depth, formations penetrated, the results of coring, testing end surveying,
shall be considered confidential and shall not be divulged by Contractor or its
employees, to any person, firm, or corporation other then Operator's designated
representatives.

20. SUBCONTRACTS:

     Either party may employ other contractors to perform any of the operations
or services to be provided or performed by it according to Exhibit "A".

21. ATTORNEY'S FEES

     If this Contract is placed in the hands of an attorney for collection of
any sums due hereunder, or suit is brought on same, or sums due hereunder are
collected through bankruptcy or arbitration proceedings, then the prevailing
party shall be entitled to recover reasonable attorneys fees and costs.

22. CLAIMS AND LIENS:

     Contractor agrees to pay all valid claims for labor, material, services,
and supplies to be furnished by Contractor hereunder, and agrees to allow no
lien by such third parties to be fixed upon the lease, the well, or other
property of the Operator or the land upon which said well is located.

23. ASSIGNMENT:

     Neither party may assign this Contract without the prior written consent of
the other, and prompt notice or any such intent to assign shall be given to the
other party. In the event of such assignment, the assigning party shall remain
liable to the other party as a guarantor of the performance by the assignee of
the terms of this Contract. If any assignment is made that materially alters
Contractor's financial burden, Contractor's compensation shall be adjusted to
give effect to any increase or decrease in Contractor's operating costs.

24. NOTICES AND PLACE OF PAYMENT:

     Notices, reports, and other communications required or permitted by this
Contract to be given or sent by one party to the other shall be delivered by
hand, mailed, digitally transmitted or telecopied to the address hereinabove
shown. All sums payable hereunder to Contractor shall be payable at its address
hereinabove shown unless otherwise specified herein.

25. CONTINUING OBLIGATIONS:

     Notwithstanding the termination of this Contract, the parties shall
continue to be bound by the provisions of this Contract that reasonably require
some action or forbearance after such termination.

26. ENTIRE AGREEMENT:

     This Contract constitutes the full understanding of the parties, and a
complete and exclusive statement of the terms of their agreement, and shall
exclusively control and govern all work performed hereunder. All
representations, offers, and undertakings of the parties made prior to the
effective date hereof, whether oral or in writing, are merged herein, and no
other contracts, agreements or work orders, executed prior to the execution of
this Contract, shall in any way modify, amend, alter or change any of the terms
or conditions set out herein.

27. SPECIAL PROVISIONS:

28. ACCEPTANCE OF CONTRACT:

     THE FOREGOING CONTRACT, INCLUDING THE PROVISIONS RELATING TO INDEMNITY,
RELEASE OF LIABILITY AND ALLOCATION OF RISK OF SUBPARAGRAPHS 4.9 AND 6.3(C),
PARAGRAPHS 10 AND 12, AND SUBPARAGRAPHS 14.1 THROUGH 14.12, IS ACKNOWLEDGED,
AGREED TO AND ACCEPTED BY OPERATOR THIS 21st DAY OF APRIL, 2005

                          OPERATOR: GMX RESOURCES INC.
                              By: KEN L. KENWORTHY
                           Title: E.V.P., SEC., TREAS.

     THE FOREGOING CONTRACT, INCLUDING THE PROVISIONS RELATING TO INDEMNITY,
RELEASE OF LIABILITY AND ALLOCATION OF RISK OF SUBPARAGRAPHS 4.9, 6.3(C),
PARAGRAPHS 10 AND 12, AND SUBPARAGRAPHS 14.1 THROUGH 14.12, IS ACKNOWLEDGED,
AGREED TO AND ACCEPTED BY CONTRACTOR THIS 21ST DAY OF MARCH, 2005, WHICH IS THE
EFFECTIVE DATE OF THIS CONTRACT SUBJECT TO RIG AVAILABILITY, AND SUBJECT TO ALL
OF ITS TERMS AND PROVISIONS, WITH THE UNDERSTANDING THAT IT WILL NOT BE BINDING
UPON OPERATOR UNTIL OPERATOR HAS NOTED ITS ACCEPTANCE, AND WITH THE FURTHER
UNDERSTANDING THAT UNLESS SAID CONTRACT IS THUS EXECUTED BY OPERATOR WITHIN 15
DAYS OF THE ABOVE DATE CONTRACTOR SHALL BE IN NO MANNER BOUND BY ITS SIGNATURE
THERETO.

                           CONTRACTOR: MCLACHLAN DRILLING CO.
                                   BY: JAMES E. MCLACHLAN
                                TITLE: JAMES E. MCLACHLAN, PRESIDENT

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                                                             REVISED APRIL, 2003

                                   EXHIBIT "A"

To Daywork Contract dated March 21, 2005

Operator GMX Resources Inc.          Contractor McLachlan Drilling Co.
Well Name and Number Multi-well in North Carthage

                      SPECIFICATIONS AND SPECIAL PROVISIONS

1. CASING PROGRAM (see Paragraph 7)

<TABLE><CAPTION>
             Hole       Casing        Weight      Grade   Approximate      Wait on
             Size        Size                             Setting Depth   Cement Time
<S>         <C>         <C>        <C>             <C>    <C>              <C>
Conductor   Driven in.  13 3/8 in.    68 lbs/ft.                 40 ft.     N/A hrs
Surface     12 1/4 in.   9 5/8 in.    47 lbs/ft.   J-55   1900 (+/-)ft.      12 hrs
Protection   8 3/4 in.    7    in.    29 lbs/ft.   J-55   5700(+/-) ft.      12 hrs
                   in.         in.       lbs/ft.                    ft.         hrs
Production   7 7/8 in.   5 1/2 in.  15.5 lbs/ft.   J-55      10,000 ft.     N/A hrs
Liner              in.         in.       lbs/ft.                    ft.         hrs
                   in.         in.       lbs/ft.                    ft.         hrs
</TABLE>

2. MUD CONTROL PROGRAM (See Subparagraph 8.2)

      Depth Interval
           (ft)
                                           Weight   Viscosity     Water Loss
     From      To          Type Mud      (lbs./gal.)  (Secs)         (cc)

       0    TD Surface     Fresh Water     8.6-9.0     36
      TD       TD           Chemical      9.2-12.4    36-45      As required

Other mud specifications: If mud weight is raised above 12.4#/gal. all pump
expendables will be the responsibility of operator. As per Rick's and my
conversation, if we stay on mud between 10.6-12.4 for an extended period of
time, the expendables will be readdreseed.

3. INSURANCE (See Paragraph 13)

     3.1 Adequate Workers' Compensation Insurance complying with State Laws
applicable or Employers' Liability Insurance with limits of $ 1,000,000.00
covering all of Contractor's employees working under this Contract.

     3.2 Commercial (or Comprehensive) General Liability insurance, including
contractual obligations as respects this Contract and proper coverage for all
other obligations assumed in this Contract. The limit shall be $1,000,000.00
combined single limit per occurrence for Bodily Injury and Property Damage.

     3.3 Automobile Public Liability insurance with limits of $1,000,000.00 for
the death or injury of each person and $1,000,000.00, for each accident; and
Automobile Public Liability Property Damage Insurance with limits of
$1,000,000.00 for each accident.

     3.4 In the event operations are over water, Contractor shall carry in
addition to the Statutory Workers' Compensation Insurance, endorsements covering
liability under the Longshoremen's & Harbor Workers' Compensation Act and
Maritime Liability including maintenance and cure with limits of $____________
for each death or injury to one person and $ ___________ for any one accident.

     3.5 Other insurance:_______________________________________________________

4. EQUIPMENT, MATERIALS AND SERVICES TO BE FURNISHED BY CONTRACTOR:

The machinery, equipment, tools, materials, supplies, instruments, services and
labor hereinafter listed, including any transportation required for such items,
shall be provided at the well location at the expense of Contractor unless
otherwise noted by this Contract.

     4.1 Drilling Rig See Exhibit "C"

    Complete drilling rig, designated by Contractor as its Rig No. 5, the major
items of equipment being:

Drawworks: Make and Model ______________________________________________________
Engines: Make, Model, and H.P. _________________________________________________
     No. on Rig ________________________________________________________________
Pumps: No. 1 Make, Size, end Power _____________________________________________
     No. 2 Make, Size, and Power _______________________________________________
Mud Mixing Pump: Make, Size, and Power _________________________________________
Boilers: Number, Make, H.P. and W.P. ___________________________________________
Derrick or Mast: Make, Size, and Capacity ______________________________________
Substructure: Size and Capacity ________________________________________________
Rotary Drive: Type _____________________________________________________________
Drill Pipe: Size _________ in. _________ ft.: Size: _________ in. _________  ft.
Drill Collers: Number and Size _________________________________________________

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                                                             REVISED APRIL, 2003

Blowout Preventers:_____________________________________________________________

    Size               Series or Test Pr.      Make & Model            Number
__________________   _____________________   _________________   _______________
__________________   _____________________   _________________   _______________
__________________   _____________________   _________________   _______________
__________________   _____________________   _________________   _______________
__________________   _____________________   _________________   _______________
__________________   _____________________   _________________   _______________
B.O.P. Closing Unit: _____________________   _________________   _______________
B.O.P. Accumulator:  _____________________   _________________   _______________

   4.2 Derrick timbers.
   4.3 Normal strings of drill pipe and drill collars specified above.
   4.4 Conventional drift indicator.
   4.5 Circulating mud pits.
   4.6 Necessary pipe racks and rigging up materiel.
   4.7 Normal storage for mud and chemicals.
   4.8 Shale Shaker.
   4.9 Contractor shall furnish 1 set of surface screens per well and one set of
       down hole 220 mesh screens.
   4.10_________________________________________________________________________
   4.11_________________________________________________________________________
   4.12_________________________________________________________________________
   4.13_________________________________________________________________________
   4.14_________________________________________________________________________
   4.15_________________________________________________________________________
   4.16_________________________________________________________________________
   4.17_________________________________________________________________________

5. EQUIPMENT, MATERIALS AND SERVICES TO BE FURNISHED BY OPERATOR:

The machinery, equipment, tools, materials, supplies, instruments, services and
labor hereinafter listed, including any transportation required for such items,
shall be provided at the well location at the expense of Operator unless
otherwise noted by this Contract.

   5.1 Furnish and maintain adequate roadway and/or canal to location,
       right-of-way, including rights-of-way for fuel and water lines, river
       crossings, highway crossings, gates end cattle guards.
   5.2 Stake location, clear and grade location, and provide turnaround,
       including surfacing when necessary.
   5.3 Test tanks with pipe and fittings.
   5.4 Mud storage tanks with pipe and fittings.
   5.5 Separator with pipe and fittings.
   5.6 Labor and materials to connect and disconnect mud tank, test tank, and
       mud gas separator.
   5.7 Labor to disconnect and clean test tanks and mud gas separator.
   5.8 Drilling mud, chemicals, lost circulation materials and other additives.
   5.9 Pipe and connections for oil circulating lines.
   5.10 Labor to lay, bury and recover oil circulating lines.
   5.11 Drilling bits, reamers, reamer cutters, stabilizers and special tools.
   5.12 Contract fishing tool services and tool rental.
   5.13 Wire line core bits or heads, core barrels and wire line core catchers
        if required.
   5.14 Conventional core bits, core catchers and core barrels.
   5.15 Diamond core barrel with head.
   5.16 Cement and cementing service.
   5.17 Electrical wireline logging services.
   5.18 Directional, caliper, or other special services.
   5.19 Gun or jet perforating services.
   5.20 Explosives and shooting devices.
   5.21 Formation testing, hydraulic fracturing, acidizing and other related
        services.
   5.22 Equipment for drill stem testing.
   5.23 Mud logging services.
   5.24 Sidewall coring service.
   5.25 Welding service for welding bottom joints of casing, guide shoe, float
        shoe, float collar and in connection with installing of well head
        equipment if required.
   5.26 Casing, tubing, liners, screen, float collars, guide and float shoes and
        associated equipment.
   5.27 Casing stretchers and centralizers.
   5.28 Well head connections and all equipment to be installed in or on well
        or on the premises for use in connection with testing, completion and
        operation of well.
   5.29 Special or added storage for mud end chemicals.
   5.30 Casinghead, API series, to conform to that shown for the blowout
        preventers specified in Subparagraph 4.1 above.
   5.31 Blowout preventer testing packoff and testing services.
   5.32 Replacement of BOP rubbers, elements and seals, if required, after
        initial test
   5.33 Casing Thread Protectors and Casing Lubricants.
   5.34 H2S training and equipment as necessary or as required by law.
   5.35 Site septic systems.
   5.36 Storage for mud and chemicals __________________________________________
   5.37 ________________________________________________________________________
   5.38 ________________________________________________________________________
   5.39 ________________________________________________________________________
   5.40 ________________________________________________________________________
   5.41 ________________________________________________________________________
   5.42 ________________________________________________________________________
   5.43 ________________________________________________________________________
   5.44 ________________________________________________________________________
   5.45 ________________________________________________________________________
   5.46 ________________________________________________________________________
   5.47 ________________________________________________________________________
   5.48 ________________________________________________________________________
   5.49 ________________________________________________________________________
   5.50 ________________________________________________________________________

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                                                             REVISED APRIL, 2003

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                                                             REVISED APRIL, 2003

6. EQUIPMENT, MATERIALS AND SERVICES TO BE FURNISHED BY DESIGNATED PARTY:

   The machinery, equipment, tools, materials, supplies, instruments, services,
and labor listed ae the following numbered items, including any transportation
required for such items unless otherwise specified, shall be provided at the
well location and at the expense of the party hereto as designated by an X mark
in the appropriate column.
                                                           To Be Provided By and
                                                              At The Expense Of
                          Item                       Operator    Contractor
   6.1  Cellar and Runways..........................    X
   6.2  Ditches and sumps ..........................    X
   6.3  Fuel (located at          ).................    X
   6.4  Fuel Lines (length        ) ................                  X
   6.5  Water at source, including required permits     X
   6.6  Water well, including required permits......    X
   6.7  Water lines, including required permits.....    X
   6.8  Water storage tanks 360 BBL capacity EACH...                  X
   6.9  Potable water ..............................    X
   6.10 Labor to operate water well or water pump...                  X
   6.11 Maintenance of water well, if required .....    X
   6.12 Water Pump..................................    X
   6.13 Fuel for water pump.........................    X
   6.14 Mats for engines and boilers, or motors and
        mud pumps...................................    X
   6.15 Transportation of Contractor's property:
        Move in.....................................    X
        Move out....................................    X
   6.16 Materials for "boxing in" rig and derrick...    N/A
   6.17 Special strings of drill pipe and drill
        collars as follows: IF REQUIRED.............    X
   6.18 Kelly joints, subs, elevators, tongs, slips
        and BOP rams for use with special drill pipe    X
   6.19 Drill pipe protectors for Kelly joint and
        each joint of drill pipe running inside of
        Surface Casing as required, for use with
        normal strings of drill pipe................    X
   6.20 Drill pipe protectors for Kelly joint and
        drill pipe running inside of Protection
        Casing......................................    X
   6.21 Rate of penetration recording device........                  X
   6.22 Extra labor for running and cementing
        casing (Casing crews).......................    X
   6.23 Casing tools ...............................    X
   6.24 Power casing tongs..........................    X
   6.25 Laydown and pickup machine IF REQUIRED BY
        OPERATOR....................................    X
   6.26 Tubing tools................................    N/A
   6.27 Power tubing tong...........................    N/A
   6.28 Crew Boats, Number________..................    N/A
   6.29 Service Barge...............................    N/A
   6.30 Service Tug Boat............................    N/A
   6.31 Rat Hole....................................    X
   6.32 Mouse Hole..................................    X
   6.33 Reserve Pits................................    X
   6.34 Upper Kelly Cock............................                  X
   6.35 Lower Kelly Valve...........................                  X
   6.36 Drill Pipe Safety Valve.....................                  X
   6.37 Inside Blowout Preventer....................    N/A
   6.38 Drilling hole for or driving for conductor
        pipe........................................    X
   6.39 Charges, cost of bonds for public roads.....    X
   6.40 Portable Toilet.............................    X
   6.41 Trash Receptacle............................    X
   6.42 Linear Motion Shale Shaker .................                  X
   6.43 Shale Shaker Screens ONE SET EACH...........                  X
   6.44 Mud Cleaner............,,,..................    N/A
   6.45 Mud/Gas Separator......::...................    X
   6.46 Desander....................................                  X
   6.47 Desilter....................................    N/A
   6.48 Degasser....................................    X
   6.49 Centrifuge..................................    N/A
   6.50 Rotating Head IF REQUIRED...................    X
   6.51 Rotating Head Rubbers.......................    X
   6.52 Hydraulic Adjustable Choke IF REQUIRED......    X
   6.53 Pit Volume Totalizer IF REQUIRED........:...    X
   6.54 Communication, type ........................    N/A
   6.55 Forklift capacity 10 TON....................    X
   6.56 Corrosion Inhibitor for protecting drill
        string......................................    X
   6.57 DOZER ASSIST FOR CONTRACTOR AND 3rd PARTY
        SERVICE.....................................    X
   6.58 GUY LINE ANCHORS                                X
   6.59
   6.60

(U.S. Daywork Contract - 'EXHIBIT A' Page 4)    Form provided by Forms On-A-Disk
  Copyright 2003 International Association     (214) 340-9429 - FormsOnADisk.com
          of Drilling Contractors
<PAGE>

                                                             REVISED APRIL, 2003

7. OTHER PROVISIONS:

1.   Operator shall be responsible for the inspection and cost of shipping any
     bad ends including trucking to and from location.

2.   Operator shall assume the responsibility for the assist required for the
     movement of Contractor's and 3rd party services' equipment in and out of
     the location. Mobilization/Demobilization from Evart, Michigan to first
     well location and back to Evart, Michigan to be mutually agreed and paid by
     Operator.

     Mobilization Rates:

     0-10 Miles      40,000.00
     10-50 Miles     50,000.00
     50 and above    Will Bid

3.   Contractor shall provide the crew required by Section 4.4, which shall
     consist of two (2) crews per day, each of which shall have included the
     following personnel, who will be capable and competent:

     1 derrick hand
     1 driller
     1 tool pusher
     3 floor hands

     Contractor shall establish appropriate policies to assure that the crews
     are dependable and that there are qualified Replacement personnel available
     in the event of unexpected absences.

4.   In the event of termination pursuant to Section 6/4(c)), the amounts
     payable thereunder shall be excused if termination has occurred by reason
     of Contractor's failure to perform its obligations as provided in this
     agreement and, if any payments are due thereunder, they shall be payable
     monthly as invoiced by Contractor for the remainder of the term less any
     amounts earned by Contractor during such month by Contractor for providing
     services using the same rig for other operators on arms-length terms.
     Contractor will use commercially reasonable efforts to find other operators
     to use the rig during such period.

5.   Notwithstanding any provision of Section 11 to the contrary, the Contractor
     will not have any discretion with respect to operations that are within 80%
     of the capacity of the equipment as specified by the manufacturer.

6.   Contractor shall maintain the equipment to be used under this agreement in
     good working order and in accordance with any manufacturer's recommended
     maintenance procedures.

7.   Contractor agrees that the equipment to be used under this agreement will
     at all times be capable of performing in accordance with the manufacturer's
     specifications (subject to routine repair and maintenance requirements) and
     that Contractor's equipment and performance will be competitive with other
     reputable drilling contractors in the area.

8.   Contractor shall initially operate with the two duplex pumps listed in the
     rig inventory, plus a third duplex pump to be provided by Contractor at its
     expense as a backup until such time as the necessity of the triplex pumps
     is determined. If Operator determines that triplex pumps are necessary,
     Operator shall acquire at its expense two (2) 750 horsepower triplex pumps
     mutually acceptable to Contractor and Operator and lease such pumps to
     Contractor on a finance lease providing for 12 equal monthly lease payments
     to Operator In the aggregate amount equal to the purchase price of such
     pumps. At the expiration of the lease, Contractor will have the right to
     acquire the pumps for $10.00 each. Operator may deduct the monthly lease
     amount due from Contractor form any amounts otherwise due to Contractor
     under this agreement. Lease to contain appropriate provisions requiring
     Contractor to carry insurance and bear all costs of maintenance, repair and
     taxes.

     (U.S. Daywork Contract -                   Form provided by Forms On-A-Disk
       "Exhibit A" - Page 5)                   (214) 340-9429 - FormsOnADisk.com
   Copyright 2003 International
Association of Drilling Contractors

<PAGE>
                                                             REVISED APRIL, 2003

                                   EXHIBIT "B"
                             (See Subparagraph 8.3)

The following clauses, when required by law, are incorporated in the Contract by
reference as if fully set out:

(1)  The Equal Opportunity Clause prescribed in 41 CFR 60-1.4.

(2)  The Affirmative Action Clause prescribed in 41 CFR 60-250.4 regarding
     veterans and veterans of the Vietnam era.

(3)  The Affirmation Action Clause for handicapped workers prescribed in 41 CFR
       60-741.4.

(4)  The Certification of Compliance with Environmental laws prescribed in
     40 CFR 15.20.

     (U.S. Daywork Contract -                   Form provided by Forms On-A-Disk
       "Exhibit B" - Page 1)                   (214) 340-9429 - FormsOnADisk.com
   Copyright 2003 International
Association of Drilling Contractors

<PAGE>

MCLACHLAN
DRILLING COMPANY

                        EXHIBIT "C" AS PER GMX CONTRACT
                              RIG #5 SPECIFICATIONS

                                                              Ph. (231) 734-2158
                                                              Fax (231) 734-2199

 JAMES E. MCLACHLAN                                               P.O. Box 548
      PRESIDENT                                                 Evart, Michigan
                                                                    Zip 49631

                            IDECO BIR 800 RAMBLER RIG
                           1000 HP, SERIAL NO. AL 1036
                        ON 6 AXLE SELF-PROPELLED CARRIER
DRAWWORKS
Ideco H-1000 single drum with circul. brake flanges, Parmac double 22"
Hydro-matic brake, Crown-o-matic, spinning cathead, hydraulic catworks,
Gearmatic hydraulic tugger winches - Powered by: 2 ea Cummins NTA Diesel engines
w/Allison 5860 five-speed transmissions - 1050 HP

MAST
Ideco KN117-358 AH-117ft, 358,000 lb on 10 lines, 4" standpipe, 3 1/2 x 55'
kelly hose

TRAVELING
Gardner Denver TWW-30 block assemble with 300 ton hydrahook. Unitized
block-hook w/5-42" sheaves 1-18" line, 96" X 2-3/4" weldness bails

TWO SUBSTRUCTURES AVAILABLE

    *(A)  Custom 300 ton integrally loaded w/ l4' x 24' floor space, 13' KB
          measurement w/ 10' 6" clear height under rotary beams -48' long cat
          walk w/V-Door

     (B)  Custom 400 ton cantilever substructure with 14' x 19' 11" floor space
          - 18' 11" KB measurement and 16' clear height under the rotary beams -
          48' long cat walk w/V-Door. Substructure is fitted and pinned to a 5'
          7" high x 80' long pony sub w/ ramp

ROTATING
Ideco SR 20.5 rotary table- 20 1/2 in opening w/split master bushing
Ideco TL 200 ton swivel
Foster Model 77 kelly spinner
4 1/2 x 39' square kelly
Varco 4 roller drive bushing

PUMPS
1-Ideco MM550 7 1/4 x 15 forged steel fluid end w/ quick change valve caps &
bolted liner caps - Demco 2" shear release- Powered by 2 Detroit 8V71-600 HP.
1-Ideco MM550 7 1/4 x 15 forged steel fluid end w/ quick change valve caps &
cylinder head caps, Hydril K20 pulstion dampners - Demco 2" shear release -
Powered by 1 ea. Detroit 12V71 diesels - 550 HP

* = SUB BEING USED FOR THIS CONTRACT

<PAGE>

MCLACHLAN DRILLING COMPANY
RIG #5 SPECIFICATIONS
PAGE TWO

MUD SYSTEM
2 ea 225 bbl steel pits w/7 compartments, bypass troughing, top mounted walkways
Harrisburg 10" two cone desander w/ 50 HP electric motor, 5 x 6 centrifugal pump
w/ internal piping to charge either system Derrick flow line cleaner shale
shaker

WELL CONTROL EQUIPMENT
Cameron 11" 5000 lb Type D Annular
Schaffer 11" 5000 lb Type "LWS" double ram w/4 1/2, 5 1/2 & blind rams
Koomey Type 80 3000# 80 gal accumulator w/5 stations & remote, one 15 HP
electric tiplex & 2 air charge pumps w/ Nitrogen backup system

DRILL STRING
4 EA 8 x 2 1/4 drill collars
20 ea 6 1/2 x 2 1/4 drill collars
8,000' 4 1/2 XH Grade "E" 16.60 lb range 2 DP

GENERATOR ACCUMULATOR TRAILER
2 ea 130 KW gen sets powered by NT855 Cummins engine & power panel

DOG HOUSE, FUEL TRAILER
8' x 22' elevating dog house w/tool room & knowledge box equipped w/ Martin
Decker 3-pen recorder & Bear Automatic Driller 8,000 gal fuel tank with lubster

AUXILIARY EQUIPMENT
Wooley Type "B" rotary tongs 3 1/2 x 13 3/8 heads, 2 ea 360 BBL water tanks w/
triplex high pressure wash down pump & rig circulating system

03/05EXHIBIT 4.9

NEITHER THIS WARRANT NOR THE SHARES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR ANY OTHER APPLICABLE SECURITIES LAWS IN RELIANCE UPON AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH OTHER SECURITIES LAWS.
NEITHER THIS WARRANT NOR THE SHARES ISSUABLE UPON EXERCISE HEREOF MAY BE SOLD,
PLEDGED, TRASFERRED, ENCUMBERED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR IN A TRANSACTION
THAT IS EXEMPT FROM REGISTRATION UNDER THE PROVISIONS OF THE SECURITIES ACT.

                             STOCK PURCHASE WARRANT

                                   To Purchase

                        3,750,000 Shares of Common Stock
                                       of
                              Savoy Resources Corp.

     THIS CERTIFIES that, for value received, KLM Consulting (the "Holder") is
entitled, upon the terms and subject to the conditions hereinafter set forth, at
any time prior to the close of business on August 15, 2006 (the "Termination
Date"), but not thereafter, to subscribe for and purchase from Savoy Resources
Corp. (the "Company"), a corporation organized under the laws of the State of
Colorado, up to Three Million Seven Hundred Fifty Thousand (3,750,000) shares
(the "Warrant Shares"), of the common stock, $0.001 par value, of the Company
(the "Common Stock"). The purchase price of one share of Common Stock (the
"Exercise Price") under this Warrant shall be $0.20. The Exercise Price and the
number of shares for which the Warrant is exercisable shall be subject to
adjustment as provided herein. Capitalized terms used and not otherwise defined
herein shall have the meanings set forth for such terms in the Subscription
Agreement dated as of August 16, 2004, between the Company and the Holder. In
the event of any conflict between the terms of this Warrant and the Subcription
Agreement, the Subscription Agreement shall control.

1. Title to Warrant. Prior to and subject to compliance with applicable laws,
this Warrant and all rights hereunder are transferable, in whole or in part, at
the office or agency of the Company by the Holder hereof in person or by duly
authorized attorney, upon surrender of this Warrant together with the Assignment
Form annexed hereto properly endorsed.

<PAGE>

2. Authorization of Shares. The Company covenants that all shares of Common
Stock that may be issued upon the exercise of rights represented by this Warrant
will, upon exercise of the rights represented by this Warrant, be duly
authorized, validly issued, fully-paid and nonassessable and free from all
taxes, liens and charges in respect of the issue thereof (other than taxes in
respect of any transfer occurring contemporaneously with such issue).

3. Exercise of Warrant.

     Except as provided in Section 3(b) of Section 4 herein, exercise of the
purchase rights represented by this Warrant may be made at any time or times on
or before the close of business on the Termination Date by the surrender of this
Warrant and the Notice of Exercise form annexed hereto duly executed, at the
office of the Company (or such other office or agency of the Company as it may
designate by notice in writing to the registered Holder hereof at the address of
such Holder appearing on the books of the Company), and upon payment of the
Exercise Price of the Warrant Shares thereby purchased by wire transfer or
cashier's check drawn on a United States bank. The Holder of this Warrant shall
be entitled to receive a certificate for the number of shares of the Common
Stock so purchased. This Warrant may also be exercised in whole or in part by
means of a "cashless exercise" by means of tendering this Warrant to the Company
to receive the number of shares of Common Stock equal in total Market Value (as
hereinafter defined) to the difference between the total Market Value of the
shares of Common Stock issuable upon such exercise of this Warrant and the total
cash Exercise Price of that part of the Warrant being exercised. "Market Value"
for this purpose shall be the price for the last trade of the Common Stock as
reported by Bloomberg L.P. on the Trading Day of such cashless exercise.
Certificates for shares purchased hereunder shall be delivered to the Holder
hereof within three (3) Trading Days after the date on which this Warrant shall
have been exercised as aforesaid. This Warrant shall be deemed to have been
exercised and such certificate or certificates shall be deemed to have been
issued, and Holder or any other person so designated to be named therein shall
be deemed to have become a holder of record of such shares for all purposes, as
of the date the Warrant has been exercised by payment to the Company of the
Exercise Price and all taxes required to be paid by Holder, if any, pursuant to
Section 5 prior to the issuance of such shares, have been paid. If this Warrant
shall have been exercised in part, the Company shall, at the time of delivery of
the certificate or certificates representing Warrant Shares, deliver to Holder a
new Warrant evidencing the rights of Holder to purchase the unpurchased shares
of Common Stock called for by this Warrant; which new Warrant shall in all other
respect be identical with this Warrant.

     The Holder is granted all of the rights to registration with the Securities
and Exchange Commission and qualification in the states of the Warrants Shares
set forth in the Subscription Agreement.

4. No Fractional Shares or Scrip. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of the Warrant. As to any
fraction of a share that Holder would otherwise be entitled to purchase upon
such exercise, the Company shall pay a cash adjustment in respect of such
fraction of the Exercise Price based upon the Market Value on the date of
exercise.

                                       2
<PAGE>
     5. Charges, Taxes and Expenses. Issuance of certificates for shares of
Common Stock upon the exercise of this Warrant shall be made without charge to
the Holder hereof for any issue or transfer tax or other incidental expense in
respect of the issuance of such certificate, all of which taxes and expenses
shall be paid by the Company, and such certificates shall be issued in the name
of the Holder of this Warrant or in such name or names as may be directed by the
Holder of this Warrant; provided, however, that in the event certificates for
shares of Common Stock are to be issued in a name other than the name of the
Holder of this Warrant, this Warrant when surrendered for exercise shall be
accompanied by the Assignment Form attached hereto duly executed by the Holder
hereof; and the Company may require, as a condition thereto, the payment of a
sum sufficient to reimburse it for any transfer tax incidental thereto.

     6. Closing of books. The Company will not close its shareholder books or
records in any manner that prevents the timely exercise of this Warrant.

     7. Transfer, Division and Combination. Subject to compliance with any
applicable securities laws, transfer of this Warrant and all rights hereunder,
in whole or in part, shall be registered on the books of the Company to be
maintained for such purpose, upon surrender of this Warrant at the principal
office of the Company, together with a written assignment of this Warrant
substantially in the form attached hereto duly executed by Holder or its agent
or attorney, and payment of funds sufficient to pay any transfer taxes payable
upon the making of such transfer. Upon such surrender and, if required, such
payment, the Company shall execute and deliver a new Warrant or Warrants in the
name of the assignee or assignees and in the denomination or denominations
specified in such instrument of assignment, and shall issue to the assignor a
new Warrant evidencing the portion of this Warrant not so assigned, and this
Warrant shall promptly be cancelled. A Warrant, if properly assigned, may be
exercised by a new Holder for the purchase of shares of Common Stock without
having a new Warrant issued.

     (a) This Warrant may be divided or combined with other Warrants upon
presentation hereof at the aforesaid office of the Company, together with a
written notice specifying the names and denominations in which new Warrants are
to be issued, signed by Holder or its agent or attorney. Subject to compliance
with Section 7(a), as to any transfer that may be involved in such division or
combination, the Company shall execute and deliver a new Warrant or Warrants in
exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice.

          (i) The Company shall prepare, issue and deliver at its own expense
     (other than transfer taxes) the new Warrant or Warrants under this Section
     7.

                                       3
<PAGE>
          (ii) The Company agrees to maintain, at its aforesaid office, books
     for the registration and the registration of transfer of the Warrants.

     8. No Rights as Shareholders until Exercise. This Warrant does not entitle
the Holder hereof to any voting rights or other rights as a shareholder of the
Company prior to the exercise hereof. Upon the surrender of this Warrant and the
payment of the aggregate Exercise Price, the Warrant Shares so purchased shall
be and be deemed to be issued to such Holder as the record owner of such shares
as of the close of business on the later of the date of such surrender or
payment.

     9. Loss, Theft, Destruction or Mutilation or Warrant. The Company covenants
that upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of this Warrant certificate or any
stock certificate relating to the Warrant Shares, and in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it (which shall
not include the posting of any bond), and upon surrender and cancellation of
such Warrant or stock certificate, if mutilated, the Company will make and
deliver a new Warrant or stock certificate of like tenor and dated as of such
cancellation, in lieu of such Warrant or stock certificate.

     10. Saturdays, Sundays, Holidays, etc. If the last or appointed day for the
taking of any action or the expiration of any right required or granted herein
shall be a Saturday, Sunday or a legal holiday, then such action may be taken or
such right may be exercised on the next succeeding day not a Saturday, Sunday or
legal holiday.

     11. Adjustments of Exercise Price and Number of Warrant Shares.

     (a) Stock Splits, etc. The number and kind of securities purchasable upon
the exercise of this Warrant and the Exercise Price shall be subject to
adjustment from time to time upon the happening of any of the following. In case
the Company shall (i) pay a dividend in shares of Common Stock or make a
distribution in shares of Common Stock to holders of its outstanding Common
Stock, (ii) subdivide its outstanding shares of Common Stock into a greater
number of shares of Common Stock, (iii) combine its outstanding shares of Common
Stock into a smaller number of shares of Common Stock or (iv) issue any shares
of its capital stock in a reclassification of the Common Stock, then the number
of Warrant Shares purchasable upon exercise of this Warrant immediately prior
thereto shall be adjusted so that the Holder of this Warrant shall be entitled
to receive the kind and number of Warrant Shares or other securities of the
Company which she would have owned or have been entitled to receive had such
Warrant been exercised in advance thereof. Upon each such adjustment of the kind
and number of Warrant Shares or other securities of the Company which are
purchasable hereunder, the Holder of this Warrant shall thereafter be entitled
to purchase the number of Warrant Shares or other securities resulting from such
adjustment at an Exercise Price per Warrant Share or other security obtained by
multiplying the Exercise Price in effect immediately prior to such adjustment by
the number of Warrant Shares purchasable pursuant hereto immediately prior to
such adjustment and dividing by the number of Warrant Shares or other securities
of the Company resulting from such adjustment. An adjustment made pursuant to
this paragraph shall become effective immediately after the effective date of
such event retroactive to the record date, if any, for such event.

                                       4
<PAGE>
     (b) Reorganization, Reclassification, Merger, Consolidation or Disposition
of Assets. In case the Company shall reorganize its capital, reclassify its
capital stock, consolidate or merge with or into another corporation (where the
Company is not the surviving corporation or where there is a change in or
distribution with respect to the Common Stock of the Company), or sell, transfer
or otherwise dispose of all or substantially all is property, assets or business
to another corporation and, pursuant to the terms of such reorganization,
reclassification, merger, consolidation or disposition of assets, shares of
common stock or the successor or acquiring corporation, or any cash, shares of
stock or other securities or property of any nature whatsoever (including
warrants or other subscription or purchase rights) in addition to or in lieu of
common stock of the successor or acquiring corporation ("Other Property"), are
to be received by or distributed to the holders of Common Stock of the Company,
then Holder shall have the right thereafter to receive, upon exercise of this
Warrant, the number of shares of common stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation, and Other
Property receivable upon or as a result of such reorganization,
reclassification, merger, consolidation or disposition of assets by a holder of
the number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such event. In case of any such reorganization,
reclassification, merger, consolidation or disposition of assets, the successor
or acquiring corporation (if other than the Company) shall expressly assume the
due and punctual observance and performance of each and every covenant and
condition of this Warrant to be performed and observed by the Company and all
the obligations and liabilities hereunder, subject to such modifications as may
be deemed appropriate (as determined in good faith by resolution of the Board of
Directors of the Company) in order to provide for adjustments of shares of
Common Stock for which this Warrant is exercisable which shall be as nearly
equivalent as practicable to the adjustments provided for in this Section 11.
For purposes of this Section 11, "common stock of the successor or acquiring
corporation" shall include stock of such corporation of any class which is not
preferred as to dividends or assets over any other class of stock of such
corporation and which is not subject to redemption and shall also include any
evidences of indebtedness, shares of stock or other securities which are
convertible into or exchangeable for any such stock, either immediately or upon
the arrival of a specified date or the happening of a specified event and any
warrants or other rights to subscribe for or purchase any such stock. The
foregoing provisions of this Section 11 shall similarly apply to successive
reorganizations, reclassifications, mergers, consolidations or dispositions of
assets.

     12. Voluntary Adjustment by the Company. The Company may at any time during
the term of this Warrant, reduce the then current Exercise Price to any amount
and for any period of time deemed appropriate by the Board of Directors of the
Company.

     13. Notice of Adjustment. Whenever the number of Warrant Shares or number
or kind of securities or other property purchasable upon the exercise of this
Warrant or the Exercise Price is adjusted, as herein provided, the Company shall
promptly mail by registered or certified mail, return receipt requested, to the
Holder of this Warrant notice of such adjustment or adjustments setting forth
the number of Warrant Shares (and other securities or property) purchasable upon
the exercise of this Warrant and the Exercise Price of such Warrant Shares (and
other securities or property) after such adjustment, setting forth a brief
statement of the facts requiring such adjustment and setting forth the
computation by which such adjustment was made. Such notice, in the absence of
manifest error, shall be conclusive evidence of the correctness of such
adjustment.

                                       5
<PAGE>
     14. Notice of Corporate Action. If any time:

     (a) the Company shall take a record of the holders of its Common Stock for
the purpose of entitling them to receive a dividend or other distribution, or
any right to subscribe for or purchase any evidences of its indebtedness, any
shares of stock of any class of any other securities or property, or to receive
any other right, or

     (b) there shall be any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or any
consolidation or merger of the Company with, or any sale, transfer or other
disposition of all or substantially all the property, assets or business of the
Company to, another corporation or,

     (c) there shall be a voluntary or involuntary dissolution, liquidation or
winding up of the Company; then, in any one or more of such cases, the Company
shall give to Holder (i) at least 30 days' prior written notice of the date on
which a record date shall be selected for such dividend, distribution or right
or for determining rights to vote in respect of any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
liquidation or winding up, and (ii) in the case of any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up, at least 30 days' prior written notice
of the date when the same shall take place. Such notice in accordance with the
foregoing clause also shall specify (i) the date on which any such record is to
be taken for the purpose of such dividend, distribution or right, the date on
which the holders of Common Stock shall be entitled to any such dividend,
distribution or right, and the amount and character thereof, and (ii) the date
on which any such reorganization, reclassification, merger, consolidation, sale,
transfer, disposition, dissolution, liquidation or winding up is to take place
and the time, if any such time is to be fixed, as of which the holders of Common
Stock shall be entitled to exchange their shares of Common Stock for securities
or other property deliverable upon such disposition, dissolution, liquidation or
winding up. Each such written notice shall be sufficiently given if the
addressed to Holder at the last address of Holder appearing on the books of the
Company and delivered in accordance with Section 16(d).

                                       6
<PAGE>
     15. Authorized Shares.

     (a) Then Company covenants that during the period the Warrant is
outstanding, it will reserve from its authorized and unissued Common Stock a
sufficient number of shares to provide for the issuance of the Warrant Shares
upon the exercise of any purchase rights under this Warrant. The Company further
covenants that its issuance of this Warrant shall constitute full authority to
its officers who are charged with the duty of executing stock certificates to
execute and issue the necessary certificates for the Warrant Shares upon the
exercise of the purchase rights under this Warrant. The Company will take all
such reasonable action as may be necessary to assure that such Warrant Shares
may be issued as provided herein without violation of any applicable law or
regulation, or of any requirements of the Principal Market upon which the Common
Stock may be listed.

     (b) The Company shall not by any action, including, without limitation,
amending its certificate of incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of this Warrant, but will at all times in
good faith assist in the carrying out of all such terms and in the taking of all
such actions as may be necessary or appropriate to protect the rights of Holder
against impairment. Without limiting the generality of the foregoing, the
Company will (i) not increase the par value of any shares of Common Stock
receivable upon the exercise of this Warrant above the amount payable therefore
upon such exercise immediately prior to such increase in par value, (ii) take
all such action as may be necessary or appropriate in order that the Company may
validly and legally issue fully paid and nonassessable shares of Common Stock
upon the exercise of this Warrant, and (iii) use its best efforts to obtain all
such authorizations, exemptions or consents from any public regulatory body
having jurisdiction thereof as may be necessary to enable the Company to perform
its obligations under this Warrant.

     (c) Upon request of Holder, the Company will at any time during the period
this Warrant is outstanding acknowledge in writing, in form reasonably
satisfactory to Holder, the continuing validity of this Warrant and the
obligations of the Company hereunder.

     (d) Before taking any action pursuant to Section 11 or 12 that would cause
an adjustment reducing the current Exercise Price below the then par value, if
any, of the shares of Common Stock issuable upon exercise of the Warrants, the
Company shall take any corporate action that may be necessary in order that the
Company may validly and legally issue fully-paid and nonassessable shares of the
Common Stock at such adjusted Exercise Price.

     (e) Before taking any action that would result in an adjustment in the
Exercise Price, the Company shall obtain all such authorizations or exemptions
thereof, or consents thereto, as may be necessary from any public regulatory
body or bodies having jurisdiction thereof.

                                       7
<PAGE>
     16. Miscellaneous.

     (a) Jurisdiction. This Warrant shall be binding upon any successors or
assigns of the Company. This Warrant shall constitute a contract under the laws
of New York without regard to its conflict of law principles or rules, and be
subject to arbitration pursuant to the terms set forth in the Securities
Purchase Agreement.

     (b) Restrictions. The Holder hereof acknowledges that the Warrant Shares
acquired upon the exercise of this Warrant, if not registered, will have
restrictions upon resale imposed by the state and Federal securities laws.

     (c) Nonwaiver and Expenses. No course of dealing in any delay or failure to
exercise any right hereunder on the part of Holder shall operate as a waiver of
such right or otherwise prejudice Holder's rights, powers or remedies;
notwithstanding which all rights hereunder terminate on the Termination Date. If
the Company fails to comply with any provision of this Warrant, the Company
shall pay to Holder such amounts as shall be sufficient to cover any costs and
expenses including, but not limited to, reasonable attorneys' fees, including
those of appellate proceedings, incurred by Holder in collecting any amounts due
pursuant hereto or in otherwise enforcing any of its rights, powers or remedies
hereunder.

     (d) Notices. Any notice, request or other document required or permitted to
be given or delivered to the Holder hereof by the Company shall be delivered in
accordance with the notice of provisions of the Securities Purchase Agreement.

     (e) Limitation of Liability. No provision hereof, in the absence of
affirmative action by Holder to purchase shares of Common Stock, and no
enumeration herein of the rights or privileges of Holder hereof, shall give rise
to any liability of Holder for the purchase price of any Common Stock or as a
stockholder of the Company, whether such liability is asserted by the Company or
by creditors of the Company.

     (f) Remedies. Holder, in addition to being entitled to exercise all rights
granted by law, including recovery of damages, will be entitled to specific
performance of its rights under this Warrant. The Company agrees that monetary
damages would not be adequate compensation for any loss incurred by reason of a
breach by it of the provisions of this Warrant and hereby agrees to waive the
defense in any action for specific performance that a remedy at law would be
adequate.

     (g) Successors and Assigns. Subject to applicable securities laws, this
Warrant and the rights and obligations evidenced hereby shall inure to the
benefit of and be binding upon the successors of the Company and the successors
and permitted assigns of Holder. The provisions of this Warrant are intended to
be for the benefit of all Holders from time to time of this Warrant and shall be
enforceable by any such Holder or holder of Warrant Shares.

                                       8
<PAGE>
     (h) Indemnification. The Company agrees to indemnify and hold harmless
Holder from and against any liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, claims, costs, attorneys' fees, expenses
and disbursements of any kind that may be imposed upon, incurred by or asserted
against Holder in any manner relating to or arising out of any failure by the
Company to perform or observe in any material respect any of its covenants,
agreements, undertakings or obligations set forth in this Warrant; provided,
however, that the Company will not be liable hereunder to the extent that any
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, attorneys' fees, expenses or disbursements are found in a final
non-appealable judgment by a court to have resulted from Holder's negligence,
bad faith or willful misconduct in its capacity as a stockholder or warrant
holder of the Company.

     (i) Amendment. This Warrant may be modified or amended or the provisions
hereof waived with the written consent of the Company and the Holder.

     (j) Severability. Wherever possible, each provision of this Warrant shall
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Warrant shall be prohibited by or invalid under
applicable law, such provision shall be infective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provisions
or the remaining provisions of this Warrant.

     (k) Headings. The headings used in this Warrant are for the convenience of
reference only and shall not, for any purpose, be deemed a part of this Warrant.

     IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by
its officer thereunto duly authorized.

Dated:   August 16, 2004

                            SAVOY RESOURCES CORP.

                            By: /s/ R T Slavik
                                ----------------------------------------
                                Robert Slavik, President, CEO and Director

                                       9
<PAGE>

                               NOTICE OF EXERCISE

To:      Savoy Resources Corp.

         1. The undersigned hereby elects to purchase __________ shares of
common stock, $0.001 per share (the "Common Stock"), of Savoy Resources Corp.
pursuant to the terms of the attached Warrant, and he tenders herewith payment
of the exercise price in full OR he tenders the Warrant for cashless exercise,
together with all applicable transfer taxes, if any.

         2. Calculation of cashless exercise value, if applicable:

_____________________________________________________________________________

_____________________________________________________________________________

         3. Please issue a certificate or certificates representing said shares
of Common Stock in the name of the undersigned or in such other name as is
specified below:

                            ____________________________________
                                         (Name)

                            ____________________________________
                                        (Address)

                            ____________________________________
                                        (Address)

Dated:                                        __________________________________
                                                           Signature

                                       10
<PAGE>

                                 ASSIGNMENT FORM

                    (To assign the foregoing Warrant, execute
                   this form and supply required information.
                  Do no use this form to exercise the Warrant.)

     FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby
are hereby assigned to:

_________________________________________________________, whose address is

___________________________________________________________________________.

                                                   Dated: ____________, ________

                                Holder's Signature: ____________________________

                                Holder's Address: ______________________________

                                                  ______________________________

Signature Guaranteed:

________________________________________________________________________________

NOTE: This signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alternation or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.

                                       11
<PAGE>

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