Document:

February 7, 2012

 

Armada Oil Inc.

30872 Hunt Club Drive

San Juan Capistrano, CA 92675

 

		Attn:	David Moss

 

		RE:	Purchase and Option Agreement

Bear Creek Prospect & Overland Trail
Prospect

Carbon County, Wyoming

 

Dear Mr. Moss:

 

This letter will evidence the agreement between TR Energy Inc.,
hereinafter referred to as “TR”, whose mailing address is P. O. Box 479, Tyler, Texas 75710-0479, and Armada Oil Inc.,
hereinafter referred to as “ARMADA” , whose mailing address is 30872 Hunt Club Drive, San Juan Capistrano, CA 92675,
relative to the acquisition by ARMADA of an interest in the oil and gas leasehold estates covering certain lands in Carbon County,
Wyoming, as more fully described in Exhibit “A”, only insofar as that portion of the leases and lands which are located
within the two sections as described in Exhibit “A” (said lands and the leases thereon being hereinafter sometimes
referred to as “Unit Acreage”), and the option to acquire additional acreage as shown by plat attached as Exhibit “B”.

 

The terms, covenants, and conditions of this Agreement are as
follows:

 

1.Acquisition of Leasehold Estate

 

On or before March 1, 2012, ARMADA shall deliver the sum of
$900,000 to TR as consideration for the Unit acreage. This amount will also cover the cost to acquire any additional acreage in
the Unit Acreage, title work, and title opinions.  On or before July 1, 2012, ARMADA shall have
the option to deliver an additional sum of $736,000 to TR for a 3rd drillsite tract containing up to 320 acres at a
location to be mutually agreed upon at a later date. 

 

P. O. Box 479, Tyler, Texas 75710-0479

903-595-4139 OFFICE

903-595-0344 FAX

 

    	 

    	 	

    
 

2.Test Well

 

On or before August 1, 2012, ARMADA shall commence, or cause
to be commenced, the drilling of the first test well for oil or gas at a legal location of its choice in either section described
below as the Unit Acreage (such well being hereinafter called the “Test Well”), and shall thereafter drill said well
without unnecessary delay and in a workmanlike manner to depth of 9,500 ft. or a depth sufficient to test the Casper formation,
whichever is the lesser, hereinafter called the “Contract Depth.” On or before 120 days from drilling the first well
under this agreement (being 120 days from the actual spud date), ARMADA shall commence, or cause to be commenced, the drilling
of the second test well for oil or gas at a legal location of its choice on the other section described below as the Unit Acreage
(such well being hereinafter called the “Test Well”), and shall thereafter drill said well without unnecessary delay
and in a workmanlike manner to depth of 9,500 ft. or a depth sufficient to test the Casper formation, whichever is the lesser,
hereinafter called the “Contract Depth.” Should there be any delays in fulfilling the drilling obligations as set forth
due to reasons beyond the control of Armada (such as permitting, weather, environmental, etc.) TR agrees to extend the due dates
for drilling the two wells described above and the option date as described in Paragraph #1 above in a mutual agreement with Armada.

 

3.Substitute Well(s)

 

If, in the drilling of either of the Test Wells mechanical difficulties
arise or impenetrable substances are encountered which render further drilling impossible or impracticable, or in the event said
Test Well reaches Contract Depth and is a dry hole, ARMADA shall promptly plug, but shall have the option to commence a substitute
well therefore at a location of ARMADA’s choice on the designated Unit within 90 days from the date of such plugging and
abandonment. Any substitute well so commence shall drilled to the same depth and in the same manner as is required for the Test
Well provided for hereinabove, and the drilling and completion thereof shall have the same effect hereunder as would drilling and
completing the Test Well. ARMADA shall have the right to drill as many substitute wells as needed to meet the requirements of a
Test Well, provided that each such substitute well conforms to the requirement of this section.

 

4.Drilling and Cost of Test Well and Any Substitute
Well

 

The entire cost, risk, and expense of drilling, testing, completing,
or plugging if the Test Well is not productive, shall be borne exclusively by ARMADA.

 

P. O. Box 479, Tyler, Texas 75710-0479

903-595-4139 OFFICE

903-595-0344 FAX

 

    	 

    	 	

    
 

Any well drilled under terms of this agreement shall be drilled
and completed or plugged and abandoned in full compliance with all valid rules, regulations, and laws of state, local or federal
authorities and in accordance with approved drilling practices. ARMADA agrees to fill pits and restore the property as nearly as
practicable to the same condition that existed prior to commencement of drilling operations. ARMADA agrees to save and hold harmless
TR from any and all claims, liens, loss, cost, and expense arising out of or as a result of ARMADA’s operations conducted
under terms of this Agreement, including attorney fees, if any.

 

ARMADA shall test formations covered by this agreement which,
in ARMADA’s sole judgment, appear productive of oil and/or gas at their discretion. TR, or its affiliates, shall at all times
have full and complete access to the derrick floor and immediate access to all information obtained in the drilling and testing
of said well.

 

ARMADA shall:

 

		(a)	Notify TR when the well is permitted;

		(b)	Notify TR when actual drilling is commenced;

		(c)	Notify TR when said well has been drilled to Contract Depth;

		(d)	Provide TR daily drilling reports, copies of all logs, samples, cuttings, etc.

		(e)	Notify TR in advance of logging, so as to permit TR, or its affiliates, to be present during logging;

 

5.Titles

 

TR warrants title to the Unit Acreage by, through and under
TR, and will, upon request, furnish ARMADA with a copy of such title papers and other relevant papers as it has in its files. There
shall be no obligation on the part of TR to furnish any abstracts of title, nor to do any curative work in connection with title
to said acreage. ARMADA shall use TR, or its affiliates, to handle all aspects of Land Management under this agreement.

 

6. Assignment

 

When the first payment is received by TR, it shall execute and
deliver for acceptance by ARMADA with warranty of title, as to acts by, through and under TR only, an assignment of 75% Net Revenue
Interest in and to the leasehold rights in the Unit Acreage. TR has previously conveyed, as an overriding royalty interest, the
difference between 25% and existing lease burdens. TR shall retain no interest.

 

Said Assignment shall be made subject to all royalties, overriding
royalties, production payments, or other burdens against the Unit Acreage as of the date of this agreement. Total burdens shall
not exceed 25% and Net Revenue will be 75%. In the event any lease is already burdened with a 25% royalty interest, TR shall reserve
a 1% overriding royalty interest.

 

P. O. Box 479, Tyler, Texas 75710-0479

903-595-4139 OFFICE

903-595-0344 FAX

 

    	 

    	 	

    
 

In the event the leases described in Exhibit “A”
cover less than the full mineral estate in the lands covered by the leases and/or TR owns less than the full and undivided leasehold
estate in the leases, the overriding royalty interest reserved by TR shall be proportionately reduced.

 

ARMADA shall have the right to assign ownership in the leases
to a third party.

 

Neither this letter nor the assignment contemplated herein is
intended nor shall they or either of them be construed as creating the relationship of partners between us and no act done by either
of us pursuant to the provisions hereof shall be construed to create such a relationship.

 

7. Option to Purchase Additional Acreage

 

On or before March 31, 2013, ARMADA
shall have the exclusive option, but not the obligation, to acquire all the additional leasehold estate that TR has within the
confines of the Area of Mutual Interest (AMI) as shown by plat attached as Exhibit “B”, being approximately 25,000
net acres. ARMADA shall notify TR of its election, shall designate which acreage it wishes to acquire, and shall pay TR the sum
of $1000/net acre. ARMADA will draft and TR shall execute and deliver for acceptance by ARMADA with warranty of title, as to acts
by, through and under TR only, an assignment of 75% Net Revenue Interest in and to the leasehold rights. TR shall reserve, as an
overriding royalty interest, the difference between 25% and existing lease burdens.

 

Said Assignment shall be made subject to all royalties, overriding
royalties, production payments, or other burdens against the unit acreage as of the date of this agreement. Total burdens shall
not exceed 25% and Net Revenue will be 75%. In the event any lease is already burdened with a 25% royalty interest, TR shall reserve
a 1% overriding royalty interest.

 

In the event the leases described in Exhibit “A”
cover less than the full mineral estate in the lands covered by the leases and/or TR owns less than the full and undivided leasehold
estate in the leases, the overriding royalty interest reserved by TR shall be proportionately reduced.

 

8. Seismic Program and Additional Leasing

 

In the event ARMADA elects to perform a seismic program (or
acquire existing seismic data) within the AMI, ARMADA shall be responsible for 100% of the costs of such program or data. ARMADA
will also be responsible for 100% of the costs to acquire new leases, which will include purchases and/or farmins from other companies,
and/or renew expiring leases within the AMI. On any farmin acreage, TR shall receive a 1% overriding royalty interest.

 

P. O. Box 479, Tyler, Texas 75710-0479

903-595-4139 OFFICE

903-595-0344 FAX

 

    	 

    	 	

    
 

9. Additional wells

 

Should ARMADA drill, or cause to be drilled, any additional
wells after the first two (not including substitute wells as described above) within the AMI, TR shall have the option to participate
on a ground floor basis (drilling and completion costs only) for up to 25% working interest on a well by well basis. ARMADA and
TR shall enter into a mutually agreeable Joint Operating Agreement, naming ARMADA as operator. ARMADA shall use TR, or its affiliates,
to handle all aspects of Land Management under this agreement.

 

10. Notices 

 

All notices, reports, samples, logs or other information required
hereunder shall be given, postage, and charges fully prepaid as set forth herein to TR at the following address:

 

TR Energy, Inc.

P. O. Box 479

Tyler, TX 75710-0479

 

		Attn:	Billy Denman, CPL/ESA

Land Manager

 

Where applicable, such as the notices set out in Paragraph
#3 above, e-mail to wrdenman@gmail.com.

 

11. Time is of the Essence

 

Time is of the essence hereof, and if the operations specified
are not commenced by the commencement date and in the manner herein provided, or if ARMADA has not timely complied with each and
all of the terms and provisions of this Agreement, TR shall be relieved of any and all obligations to make any contribution of
acreage herein specified or any part thereof, and this Agreement shall terminate.

 

This Agreement may be executed in multiple counterparts, each
of which shall be deemed an original and shall be binding on each party who signs a counterpart, to the same extent as though all
parties signed the same Agreement.

 

If the above and foregoing is acceptable to you, please indicate
your acceptance in the space provided below and return one (1) executed copy to TR.

 

P. O. Box 479, Tyler, Texas 75710-0479

903-595-4139 OFFICE

903-595-0344 FAX

 

    	 

    	 	

    
 

Regards,

 

 

 

W.L. Sudderth

Vice President of TR Energy, Inc.

 

 

 

 

Accepted this 8th day of February 2012.

 

 

 

ARMADA OIL INC.

 

 

 

_______________________________________

By: David J. Moss

Title: President

 

 

Exhibit
“A”

 

 

All leases included in the
lands described below in Carbon County, Wyoming.

 

Bear Creek Prospect –
Section 24, T20N, R80W – 640 acres

 

Overland Trail Prospect –
Section 17, T19N, R78W – 640 acres

 

P. O. Box 479, Tyler, Texas 75710-0479

903-595-4139 OFFICE

903-595-0344 FAXSeptember 25, 2012

 

Armada Oil Inc.

10777 Westheimer Rd., Suite 1100

Houston, TX 77042

 

Attn: David Moss & Jim Cerna

 

		RE:	Amendment and Extension

Purchase and Option Agreement dated February
7, 2012

Bear Creek Prospect & Overland Trail
Prospect

Carbon County, Wyoming

 

Dear Mr. Moss and Mr. Cerna:

 

Whereas in a Letter Agreement dated February 7, 2012, TR Energy,
Inc. (TR), and Armada Oil, Inc. (Armada) did enter into a Purchase and Option Agreement covering certain lands in Carbon County,
Wyoming; and whereas, both TR and Armada agree that certain terms of the original agreement need to be amended;

 

Now, therefore, both TR and Armada agree to the following terms:

 

		1.	Armada acknowledges that it has the option to pay the $736,000 to TR to complete the purchase of the Unit acreage to tighten
up the drill sites based on the seismic. The Unit acreage shall remain as described in the original agreement. Armada shall pay
the $736,000 to TR in three installments, as follows:

 

		(a)	The first installment of $250,000 is due and payable on or before December 1 , 2012

		(b)	The second installment of $243,000 is due and payable on or before February 1, 2013

		(c)	The third and final installment of $243,000 is due and payable on or before May 1, 2013

 

    	1

    	 

    
 

Armada agrees to pay all costs associated
with any activities related to the ongoing operations in Carbon County with regard to the Carbon County Project and the Overland
Trail Project. Those activities include, but are not limited to, leasing, seismic, title, lease extensions and renewals, state
and federal drilling and seismic permits, drilling bond for TR and all third party costs associated with these activities. In
the event the drilling bond for TR funded by Armada is refunded, those funds shall be returned to Armada. TR has sent notice to
Armada that ongoing costs on this project have been funded by TR over the last sixty (60) days and the amount of these costs being
$188,000 is due and payable and Armada agrees to send this amount of overages.

 

		2.	TR agrees to extend the time for Armada to drill the first well under the agreement until sixty (60) days from the date the
field operations of the first seismic program undertaken are concluded provided the weather permits drilling activity.

 

		3.	Upon payment of the $736,000 in paragraph 1, TR agrees to extend the time allowed under Paragraph #7 of the original agreement
whereby Armada can elect to exercise its option to acquire all or part of the remaining acreage in the AMI from March 31, 2013
to September 30, 2014. Armada acknowledges that by TR allowing this extension that there will be lease expirations and that TR
will use its best efforts to renew said leases in the AMI. Armada agrees to fund all of the costs associated with TR’s attempts
to renew these leases.

 

		4.	Armada agrees to allow TR, Silver Eagle, and Rendezvous Resources to have access to, and copies of, all data created under
the seismic program, both during the program and at its conclusion.

 

		5.	In the event of an Armada bankruptcy or default under the terms of this agreement, all leases previously assigned by TR Energy
will be returned via an assignment to TR. All moneys previously paid related to leasing, title, lease extensions, and costs associated
shall be non-refundable to Armada.

 

In the event of a conflict between the Amendment
and Extension and the original Purchase and Option Agreement, the provisions of this Amendment and Extension shall control; however,
terms in the original agreement shall be in effect unless addressed in this amendment and extension.

 

Regards,

 

 

 

W.L. Sudderth

Vice President of TR Energy, Inc.

 

    	2

    	 

    
 

 

Accepted this 25th day of September 2012.

 

 

 

ARMADA OIL INC.

 

 

James J Cerna Jr.

 

CEO

 

    	3

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