Document:

MORTGAGE, ASSIGNMENT OF PRODUCTION, SECURITY
                        AGREEMENT AND FINANCING STATEMENT

                                      FROM

                             SUN RIVER ENERGY, INC.,
                             a Colorado corporation

                                       TO

                               NOVA LEASING, LLC,
                       a Wyoming limited liability company

                        Dated as of ______________, 2006

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"THIS INSTRUMENT CONTAINS AFTER-ACQUIRED PROPERTY PROVISIONS."

"THE MORTGAGED  PROPERTY  INCLUDES OIL AND GAS INTERESTS AND WILL BE FINANCED AT
THE WELLHEADS OF WELLS LOCATED ON THE PROPERTIES DESCRIBED IN EXHIBIT A ATTACHED
HERETO,  AND THIS  FINANCING  STATEMENT  IS TO BE FILED FOR RECORD,  AMONG OTHER
PLACES, IN THE REAL ESTATE RECORDS."

"THIS INSTRUMENT ALSO COVERS PROCEEDS OF THE MORTGAGED PROPERTY."

               WHEN RECORDED AND FILED, RETURN TO:

                                   MORTGAGE, ASSIGNMENT OF PRODUCTION,
                   SECURITY AGREEMENT AND FINANCING STATEMENT

                  THIS MORTGAGE,  ASSIGNMENT OF PRODUCTION,  SECURITY  AGREEMENT
AND FINANCING STATEMENT dated as of ____________, 2006 is from SUN RIVER ENERGY,
INC., a Colorado corporation,  the Mortgagor and Debtor hereunder (herein called
the "Mortgagor") to NOVA LEASING,  LLC, a Wyoming limited liability company, the
Mortgagee  and  Secured  Party  hereunder   (herein   collectively   called  the
"Mortgagee").

<PAGE>

                              W I T N E S S E T H :

                  WHEREAS,  Mortgagee  has entered into a Promissory  Note dated
_______________,  2006 (the  "Note")  with  Mortgagee,  pursuant to the terms of
which  Mortgagor  has agreed to pay Mortgagee the sum of SIX MILLION SIX HUNDRED
THOUSAND AND  00/100ths  DOLLARS  ($6,600,000.00)  together with interest at the
rate of seven and one half Per Cent (7 1/2%) per annum,  in accordance  with the
terms thereof. Principal and interest are due and payable in full on October 15,
2008.  The principal  balance of the Note,  together with interest then accrued,
may be paid at any time prior to maturity subject to the terms of the Note.

                  NOW,  THEREFORE,  in  consideration of the premises and of the
debts  and  agreements  mentioned   hereinabove  and  other  good  and  valuable
consideration, the parties hereby agree as follows:

     1. For purposes of this mortgage, unless the context requires otherwise:

     A. "oil and gas leases" shall include oil, gas and mineral leases and shall
also include subleases and assignments of operating rights.

     B.  "Hydrocarbons"  shall  mean  oil,  gas  and  other  liquid  or  gaseous
Hydrocarbons.

     C.  "Production  Sale  Contracts"  shall mean  contracts now in effect,  or
hereinafter  entered  into by the  Mortgagor,  or  Mortgagor's  predecessors  in
interest,  for the  sale,  purchase,  exchange  or  processing  of  Hydrocarbons
produced from the lands  described in Exhibit A attached  hereto and made a part
hereof.

     D. "lands  described in Exhibit A" shall include any lands which are either
described in Exhibit A or the  description of which is incorporated in Exhibit A
by reference to another  instrument or document,  and shall also include any and
all lands now or  hereafter  unitized  or pooled  with  lands  which are  either
described in Exhibit A or the  description of which is incorporated in Exhibit A
by reference.

     E. "Operating  Equipment"  shall mean all surface or subsurface  machinery,
equipment,  facilities,  supplies or other property of whatsoever kind or nature
(excluding drilling rigs, trucks,  automotive  equipment or other property taken
to the  premises  to drill a well or for other  similar  temporary  uses) now or
hereafter  located on or under any of the lands described in Exhibit A which are
useful for the production, treatment, storage or transportation of Hydrocarbons,
including, but not by way of limitation,  all oil wells, gas wells, water wells,
injection wells,  casing,  tubing,  rods, pumping units ,and engines,  Christmas
trees,  derricks,  separators,  gun barrels, flow lines, tanks, gas systems (for
gathering, treating and compression),  chemicals,  solutions, water systems (for
treating,  disposal and injection),  power plants,  poles, lines,  transformers,
starters and  controllers,  machine  shops,  tools,  storage yards and equipment
stored   therein,   buildings   and  camps,   telegraph,   telephone  and  other
communication  systems,  roads,  loading  racks,  loading  docks,  and  shipping
facilities.

<PAGE>

     F. "Mortgaged  Property"  shall mean the  properties,  rights and interests
hereinafter described and defined as the "Mortgaged Property."

     G.  "Indebtedness" and "Note" shall have the respective  meanings set forth
in Section 1.2 of Article I hereof.

     2. The Mortgagor,  for and in  consideration  of the premises and the debts
hereinafter and hereinabove  mentioned,  has granted, and does by these presents
MORTGAGE,  WARRANT, GRANT, BARGAIN, SELL, TRANSFER,  CONVEY AND GRANT a security
interest  to  Mortgagee,  its  successors  and  assigns,  in  and  to all of the
Mortgagor's right, title and interest,  whether now owned or hereafter acquired,
in all of the  hereinafter  described  properties,  rights  and  interests;  and
insofar as such properties,  rights and interests consist of equipment,  general
intangibles,   accounts,  contract  rights,  inventory,  fixtures,  proceeds  of
collateral or any other personal  property of a kind or character  defined in or
subject to the applicable  provisions of the Uniform Commercial Code,  Mortgagor
hereby grants to Mortgagee, a security interest therein; namely:

     (a) the lands  described  in  Exhibit A, and the oil and gas  leases,  fee,
mineral, overriding royalty and other interests which are specifically described
or capable of derivation from the description in Exhibit A;

     (b)  the  presently  existing  unitization,   communitization  and  pooling
agreements and the properties  covered and units created thereby  (including all
units formed under  orders,  regulations,  rules or other  official  acts of any
federal,  state or other  governmental  agency  having  jurisdiction)  which are
specifically  described in Exhibit A or, though not  described,  which relate to
any of the properties and interests specifically described in Exhibit A;

     (c) the Hydrocarbons which are in, under, upon,  produced or to be produced
from the lands described in Exhibit A;

     (d) the Production Sale Contracts;

     (e) the Operating Equipment;

     (f) all easements, permits, licenses, servitudes and rights of way situated
upon,  used or useful or held for use in connection  with the lands described in
Exhibit A;

     (g) all division orders,  transfer orders, title opinions and other similar
or dissimilar  documents or  instruments  having regard to, useful in connection
with or required  for the sale,  exchange,  disposition  and  transportation  of
Hydrocarbons from the lands described in Exhibit A;

<PAGE>

     (h) without  limiting the foregoing,  all of Mortgagor's  right,  title and
interest,  whether  now  owned or  hereafter  acquired  by  operation  of law or
otherwise  in and to the oil  and  gas  leases,  Hydrocarbons,  Production  Sale
Contracts,  lands  described in Exhibit A,  Operating  Equipment,  and all other
interests in property of every kind or  character,  insofar as they relate to or
cover the lands  described or referred to in Exhibit A, even though such rights,
title and interests be  incorrectly or  insufficiently  described or referred to
therein, or a description thereof be omitted from Exhibit A;

     (i) all proceeds  (including  without  limitation,  insurance  proceeds and
proceeds from sale,  barter or exchange) and additions and  accessions to any or
all of the foregoing,

     together  with any and all  corrections  or  amendments  to, or renewals or
extensions or  ratifications  of, any of the same or of any instrument  relating
thereto and all  contracts,  operating  agreements,  records,  logs,  tenements,
hereditaments  and  appurtenances  now  existing  or in the future  obtained  in
connection with any of the aforesaid, and all other things of value and incident
thereto which Mortgagor might at any time have or be entitled to,

all of the  aforesaid  properties,  rights  and  interests,  together  with  any
additions  thereto  which may be subjected to the lien of this mortgage by means
of  supplements  hereto,  being  hereinafter  called the  "Mortgaged  Property."
Mortgagor may  substitute  collateral  and property in value equal to or greater
than the Mortgaged Property in which case the substituted  property shall become
the  Mortgaged  Property.  Mortgagee  agrees to release the  original  Mortgaged
Property upon satisfactory substitution.

     TO HAVE AND TO HOLD the Mortgaged Property unto the Mortgagee to secure the
payment of the  Indebtedness and to secure the performance of the obligations of
the Mortgagor herein contained.

                                    ARTICLE I

                              INDEBTEDNESS SECURED

                  The Mortgagor in  consideration  of the premises and to induce
the  Mortgagee to make the loans above  described,  hereby  covenants and agrees
with the Mortgagee as follows:

     1.1 Items of Indebtedness  Secured. The following items of indebtedness are
secured hereby:

     (a) The Note;

     (b) Any sums advanced or expenses for costs  incurred  (including,  without
limitation,  all  attorneys'  fees and other legal,  management  and  consulting
expenses) by the Mortgagee (or any receiver appointed  hereunder) which are made
or incurred  pursuant to or permitted by law, the terms  hereof,  plus  interest
thereon at the rate herein  specified or otherwise agreed upon, from the date of
the advances or the incurring of such expenses or costs until reimbursed;

<PAGE>

     (c) Any extensions or renewals of all such  indebtedness  described  above,
whether or not Mortgagor executes any extension agreement or renewal instrument.

     1.2 Indebtedness  and Note Defined.  All of the above items of indebtedness
are hereinafter and hereinbefore collectively referred to as "the Indebtedness."
Any promissory note evidencing any part of the Indebtedness,  including, without
limitation, the Note, is hereinafter referred to as a "Note".

                                   ARTICLE II

                PARTICULAR COVENANTS AND WARRANTIES OF MORTGAGOR

     2.1 Payment of the Indebtedness. The Mortgagor will duly and punctually pay
the  Indebtedness,  including each and every  obligation owing on account of the
Note.

     2.2 Warranties. The Mortgagor warrants that:

     (a) the oil and gas  leases  described  in  Exhibit  A  hereto  are  valid,
subsisting  leases,  superior  and  paramount  to all other  oil and gas  leases
respecting the properties to which they pertain;

     (b) the Mortgagor,  to the extent of the interests  specified in Exhibit A,
has valid and indefeasible title to each property right or interest constituting
the  Mortgaged  Property  and has a good and legal right to grant and convey the
same to the Mortgagee, it being understood that the Mortgagor's interest in each
oil and gas lease shall exceed the  Mortgagor's  net interest in production from
such lease to the extent of the Mortgagor's proportionate share of the burden of
all royalties, overriding royalties and other such payments out of production;

     (c)  the  Mortgaged  Property  is  free  from  all  encumbrances  or  liens
whatsoever, except as permitted by the provisions of Section 2.5(e) hereof;

     (d) the Mortgagor is not obligated,  by virtue of any prepayment  under any
contract  providing for the sale by Mortgagor of  Hydrocarbons  which contains a
"take or pay" clause or under any similar  arrangement,  to deliver Hydrocarbons
at some future time without then or thereafter receiving full payment therefore;
and

     (e) Mortgagor will warrant and forever  defend the Mortgaged  Property unto
the Mortgagee against every person whomsoever  lawfully claiming the same or any
part thereof,  and Mortgagor  will maintain and preserve the lien hereby created
so long as any of Indebtedness remains unpaid.

     2.3 Further  Assurances.  The Mortgagor will execute and deliver such other
and  further  instruments  and will do such  other  and  further  acts as in the
opinion  of the  Mortgagee  may be  necessary  or  desirable  to carry  out more
effectually  the  purposes of this  mortgage,  including,  without  limiting the
generality of the foregoing,

<PAGE>

     (a) prompt  correction  of any defect which may be hereafter  discovered in
the title to the Mortgaged  Property or in the execution and  acknowledgment  of
this mortgage,  the Note, or any other document executed in connection herewith;
and

     (b) prompt  execution and delivery of all division or transfer orders which
in the  opinion of the  Mortgagee  are  needed to  transfer  effectually  to the
Mortgagee the assignment of proceeds of production from the Mortgaged Property.

     2.4  Payment  of Taxes.  So long as the  Indebtedness  or any part  thereof
remains  unpaid,  Mortgagor  shall pay or cause to be paid  promptly  and in all
events prior to delinquency all taxes,  assessments and governmental charges now
or hereafter assessed or imposed upon or with respect to, measured by or charged
against the Mortgaged Property, the development, operation, production, sale and
transmission  of the  Hydrocarbons,  or this  mortgage and the  Indebtedness  or
assessed against or imposed upon Mortgagor because of the Mortgagor's  ownership
of the Mortgaged Property or any part thereof.

     2.5 Operation of the Mortgaged Property. So long as the Indebtedness or any
part thereof remains unpaid, and whether or not the Mortgagor is the operator of
the Mortgaged Property, the Mortgagor shall, at the Mortgagor's own expense:

     (a) Do or cause to be done all  things  necessary  to keep  unimpaired  the
Mortgagor's  rights in the  Mortgaged  Property and not,  except in the ordinary
course of  business,  abandon any well or forfeit,  surrender or release any oil
and gas lease or any rights in the Mortgaged Property;

     (b) Cause the lands  described  in Exhibit A to be  maintained,  developed,
protected  against  drainage,  and  continuously  operated for the production of
Hydrocarbons in a good and workmanlike  manner as would a prudent operator,  and
in  accordance  with  generally   accepted   practices,   applicable   operating
agreements,  and all  applicable  federal,  state  and  local  laws,  rules  and
regulations, excepting those being contested in good faith;

     (c) Cause to be paid, promptly as and when due and payable, all rentals and
royalties  payable  in  respect  of the  Mortgaged  Property,  and all  expenses
incurred  in or arising  from the  operation  or  development  of the  Mortgaged
Property;

     (d)  Cause  the  Operating  Equipment  to be  kept in  good  and  effective
operating  condition,  and all repairs,  renewals,  replacements,  additions and
improvements  thereof or thereto,  and needful to the production of Hydrocarbons
from the lands described in Exhibit A, to be promptly made;

     (e)  Cause  the  Mortgaged  Property  to be kept  free and  clear of liens,
charges and encumbrances of every character, other than (l) the lien hereof, (2)
taxes constituting a lien but not due and payable, (3) defects or irregularities
in title, and liens, charges or encumbrances, which are not such as to interfere
materially with the  development,  operation or value of the Mortgaged  Property
and not such as to affect materially title thereto, (4) those being contested by
the  Mortgagor  in  good  faith  and in such  manner  as not to  jeopardize  the
Mortgagee's rights in and to the Mortgaged Property,  and (5) those consented to
in writing by the Mortgagee; and

<PAGE>

     (f) Carry with standard insurance companies and in amounts  satisfactory to
the Mortgagee the following  public  liability and property damage  insurance in
respect of all activities in which the Mortgagor might incur personal  liability
for the death of or  injury  to an  employee  or third  person,  or damage to or
destruction  of  another's  property;  and (2) to the extent such  insurance  is
carried by others engaged in similar  undertakings  in the same general areas in
which the Mortgaged  Property is located,  insurance in respect of the Operating
Equipment,  against loss or damage by fire,  lightning,  hail,  tornado,  flood,
explosion and other similar risks,  with loss payable  endorsements  in favor of
the Mortgagee,  as its interests may appear and a provision for maximum time for
prior  written  notice to the Mortgagee of  cancellation;  and the Mortgagee may
apply any part or all  proceeds of such  insurance  when it may receive the same
toward part or full satisfaction of the Indebtedness whether or not then due, or
may at its sole option deliver all or part of such proceeds to the Mortgagor for
the repair or  replacement  of such parts of the Mortgaged  Property as may have
been damaged or destroyed.

     2.6  Recording  and  Filing.  The  Mortgagor  will  promptly,  and  at  the
Mortgagor's  sole  expense,  record,  register,  deposit and file this and every
other  instrument in addition or supplemental  hereto in such offices and places
and at such times and as often as may be necessary to create, preserve,  protect
and renew the lien hereof as a first lien on real or personal  property,  as the
case may be, and the rights and remedies of the Mortgagee and otherwise  will do
and observe all things or matters  necessary or expedient to be done or observed
by  reason of any law or  regulation  of any  State or of the  United  States of
America or of any other  competent  authority,  for the  purpose of  effectively
creating, maintaining and preserving the lien hereof on the Mortgaged Property.

     2.7 Sale or Mortgage of the Mortgaged Property. Except for sales of severed
Hydrocarbons in the ordinary course of the Mortgagor's business and the lien and
security  interest  created by this  instrument,  the  Mortgagor  will not sell,
convey,  mortgage,  pledge,  or otherwise  dispose of or encumber the  Mortgaged
Property nor any portion  thereof,  nor any of the Mortgagor's  right,  title or
interest  therein,  without first securing the written consent of the Mortgagee;
and the  Mortgagor  will not enter into any  arrangement  with any gas  pipeline
company or other  consumer of  Hydrocarbons  regarding  the  Mortgaged  Property
whereby said gas pipeline  company or consumer may set off any claim against the
Mortgagor by withholding payment for any Hydrocarbons actually delivered.

     2.8 No Governmental  Approvals.  The Mortgagor warrants that no approval or
consent of any regulatory or administrative  commission or authority,  or of any
other governmental body, is necessary to authorize the execution and delivery of
this instrument or of the Note, or to authorize the observance or performance by
the  Mortgagor of the  covenants  herein or contained in the Note,  or that such
approvals as are required have been obtained or will be obtained promptly.

     2.9 Right of Entry.  The Mortgagor will permit the Mortgagee,  employees of
the  Mortgagee  and such other  persons or entities as the  Mortgagee may in its
discretion  designate,  reasonable  access to the Mortgaged  Property and to the
field offices and other offices,  including the principal place of business,  of
the  Mortgagor  to inspect and examine the  Mortgaged  Property  and to inspect,
review and reproduce, as necessary, any books, records,  accounts,  contracts or
other documents of the Mortgagor.

<PAGE>

                                   ARTICLE III

                            Assignment of Production

     3.1 Assignment of Hydrocarbons. The Mortgagee is entitled to receive all of
the  Hydrocarbons  in and  under  which  may  be  produced  and  saved  from  or
attributable  to the  Mortgaged  Property,  together  with  all of the  proceeds
thereof, effective as of the date of this instrument. The Mortgagor acknowledges
and agrees that said assignment is intended to be an absolute and  unconditional
assignment and not merely a pledge of or creation of a security interest therein
or assignment as  additional  security.  The  Mortgagor  hereby  authorizes  and
directs any owner,  lessor or party to a lease or other  contract  comprising or
affecting the Mortgaged Property and their respective  successors and assigns to
treat and regard the Mortgagee as the party entitled,  in the Mortgagor's  place
and stead, to receive said  Hydrocarbons and proceeds and to exercise all rights
of the Mortgagor with respect thereto; and said parties shall be fully protected
in so treating and  regarding  the Mortgagee and shall be under no obligation to
see to the application by the Mortgagee of any such proceeds received by it. For
its convenience, the Mortgagee may, with respect to any or all such hydrocarbons
or proceeds, permit the Mortgagor to receive such Hydrocarbons or proceeds until
the  occurrence  of and  during the  continuance  of any Event of  Default.  The
exercise  of the  rights  granted  to the  Mortgagee  hereunder  to  permit  the
Mortgagor to receive such  Hydrocarbons  prior to the occurrence and continuance
of an Event of Default  shall not in any way waive the right of the Mortgagee to
demand and receive such Hydrocarbons and proceeds thereafter attributable to the
Mortgaged  Property  and  shall  not  in  any  way  diminish  the  absolute  and
unconditional  right of the  Mortgagee to receive all of said  Hydrocarbons  and
proceeds  and cash  proceeds  not  theretofore  expended or  distributed  by the
Mortgagor.  Notwithstanding the above,  Mortgagee hereby represents to Mortgagor
that it will not make any demand to receive  any such  Hydrocarbons  or proceeds
unless and until an Event of Default has occurred.  The Mortgagor  hereby agrees
that upon (i)  written  notice from the  Mortgagee  or (ii) the  occurrence  and
during the continuance of an Event of Default,  whichever shall first occur, all
cash,  proceeds,  instruments  and other  property of whatever kind or character
received by the Mortgagor on account of the Mortgaged Property, whether received
by the  Mortgagor  in  the  exercise  of  its  collection  rights  hereunder  or
otherwise,  shall be remitted to the  Mortgagee  or deposited to an account with
the Mortgagee in the form received  (properly  assigned or endorsed to the order
of the  Mortgagee  or for  collection  and in  accordance  with the  Mortgagee's
instructions) not later than the first banking business day following the day of
receipt,  to be applied as provided in Section 3.2 hereof and, until so applied,
may be held by the  Mortgagee  in a  separate  account  under the  dominion  and
control of the  Mortgagee on which the  Mortgagor  may not draw.  The  Mortgagor
agrees not to commingle any such property,  following the occurrence of any such
Event of Default, with any of its other funds or property and agrees to hold the
same upon an express trust for the Mortgagee until remitted to the Mortgagee.

     3.2  Application  of  Proceeds.  All  payments of proceeds  received by the
Mortgagee  pursuant  to Section 3.1 of this  mortgage  shall be placed in a cash
collateral  account at Mortgagee and on the first  business day of each calendar
month applied as follows:

     First: To the payment and  satisfaction of the interest accrued on the Note
as of the date of such application.

<PAGE>

     Second:  To the payment and satisfaction of all costs and expenses incurred
in  connection  with  the  collection  of such  proceeds,  and the  payment  and
reimbursement of all items of the Indebtedness not evidenced by any Note.

     Third: To the amounts of principal due and owing on the Note as of the date
of such application.

     Fourth: The balance,  if any, shall either be applied on the then unmatured
principal  amounts of the Note,  such  application to be on such of the Note and
installments  thereof  as the  Mortgagee  may  select,  or, at the option of the
Mortgagee, released to the Mortgagor.

     3.3 No Liability of the  Mortgagee in  Collecting.  The Mortgagee is hereby
absolved from all liability for failure to enforce collection of any proceeds so
assigned and from all other responsibility in connection  therewith,  except the
responsibility to account to the Mortgagor for funds actually received.

     3.4 Assignment Not a Restriction of the Mortgagee's Rights.  Nothing herein
contained  shall detract from or limit the absolute  obligation of the Mortgagor
to make payment of the Indebtedness  regardless of whether the proceeds assigned
by this  Article  are  sufficient  to pay the same,  and the  rights  under this
Article shall be in addition to all other security now or hereafter  existing to
secure the payment of the Indebtedness.

     3.5 Status of  Assignment.  Notwithstanding  the other  provisions  of this
Article, the Mortgagee or any receiver appointed in judicial proceedings for the
enforcement  of this  instrument  shall  have the  right to  receive  all of the
Hydrocarbons  herein assigned and the proceeds therefrom after the Note has been
declared due and payable in accordance with the provisions of Section 4.1 hereof
and to apply all of said  proceeds as  provided in Section 3.2 hereof.  Upon any
sale of the Mortgaged Property or any part thereof pursuant to Article V of this
mortgage,  the Hydrocarbons  thereafter  produced from the property so sold, and
the  proceeds  therefrom,  shall be  included in such sale and shall pass to the
purchaser free and clear of the assignment contained in this Article.

     3.6 Indemnity.  The Mortgagor agrees to indemnify the Mortgagee against all
claims, actions, liabilities, judgments, costs, attorneys' fees or other charges
of  whatsoever  kind or nature  (all  hereinafter  in this  Section  3.6  called
"claims")  made  against or incurred by it as a  consequence  of the  assertion,
either before or after the payment in full of the Indebtedness, that it received
Hydrocarbons  herein assigned or the proceeds  thereof claimed by third persons,
and the  Mortgagee  shall  have the right to  defend  against  any such  claims,
employing attorneys therefore,  and unless furnished with reasonable  indemnity,
shall  have the right to pay or  compromise  and  adjust  all such  claims.  The
Mortgagor  will  indemnify  and pay to the Mortgagee any and all such amounts as
may be paid in respect  thereof or as may be successfully  adjudged  against the
Mortgagee.  The  obligations of the Mortgagor as  hereinabove  set forth in this
Section 3.6 shall survive the release of this mortgage.

<PAGE>

                                   ARTICLE IV

                                Events of Default

     4.1 Events of Default  Hereunder.  In case any one or more of the following
events shall occur ("Events of Default") and shall not have been remedied:

     (a) default in the payment of principal  or of interest on any Note,  or in
the payment of any other Indebtedness secured hereby, when due;

     (b) any  indebtedness of the Mortgagor shall become or shall be declared to
be due and payable prior to its  expressed  maturity by reason of any default by
the Mortgagor in the performance or observance of any obligation or by reason of
the  existence  of any  condition  constituting  a default  in  respect  of such
indebtedness;

     (c) a judgment  for the payment of money  rendered  against  the  Mortgagor
shall remain  unsatisfied and in effect for a period of thirty (30)  consecutive
days without a stay of execution;

     (d) the Mortgagor shall (l) become insolvent, (2) generally fail to pay, or
admit in writing its  inability  to pay,  debts as they  become due,  (3) make a
general  assignment for the benefit of creditors,  (4) apply for, consent to, or
acquiesce in the appointment of, a trustee,  receiver or other custodian for the
Mortgagor  or  any   property   thereof,   or  (5)   commence  any   bankruptcy,
reorganization,  debt  arrangement,  or  other  case  or  proceeding  under  any
bankruptcy  or  insolvency  law (or consent to or  acquiesce in any such case or
proceeding commenced against it);

     (e) a trustee,  receiver  or other  custodian  shall be  appointed  for the
Mortgagor  and  shall  not  be  discharged  within  thirty  (30)  days,  or  any
bankruptcy,  reorganization,  debt arrangement or other case or proceeding under
any  bankruptcy or insolvency  law shall be commenced  against the Mortgagor and
(if not consented to or acquiesced in by the Mortgagor)  shall remain for thirty
(30) days undismissed;

     (f)  any  of the  Mortgaged  Property  shall  be  seized  or  taken  by any
governmental or similar  authority,  on any order of attachment,  garnishment or
any other writ shall be issued,  or any other lawful  creditor's remedy shall be
exercised or attempted to be exercised, with respect thereto;

     (g) the  Mortgagor  shall fail to  maintain  the lien and  priority of this
instrument as against any other person or entity;

     (h)  the  Mortgaged  Property  shall  be the  subject  of  any  foreclosure
proceeding  (whether  judicial or by power of advertisement  and sale) by anyone
other than Mortgagee;

<PAGE>

     (i) any  warranty  or  representation  made by the  Mortgagor  herein or in
connection herewith shall prove to be untrue in any material respect;

     (j) The  Mortgagor  shall  fail  to  perform  and  observe  faithfully  and
punctually its covenants and obligations hereunder; or

     (k) the title of the Mortgagor to the Mortgaged Property or any substantial
part thereof shall become the subject matter of litigation which would or might,
in the  Mortgagee's  opinion,  upon final  determination  result in  substantial
impairment or loss of the security provided by this instrument.

then and in such event the  Mortgagee,  at its  option,  may  declare the entire
unpaid  principal  of and  the  interest  accrued  on the  Note  and  all  other
Indebtedness secured hereby to be forthwith due and payable,  without any notice
or demand of any kind, both of which are hereby expressly waived.

                                    ARTICLE V

                           Enforcement of the Security

     5.1 Power of Sale of Real  Property  Constituting  a Part of the  Mortgaged
Property.  Upon the occurrence of an Event of Default,  the Mortgagee shall have
the right and power to sell (the power of  advertisement  and sale permitted and
provided for by Wyoming Statutes being hereby expressly  granted to Mortgagee by
Mortgagor), to the extent permitted by law, at one or more sales, as an entirety
or in parcels,  as it may elect,  the real property  constituting  a part of the
Mortgaged  Property,  at such place or places and  otherwise  in such manner and
upon such  notice as may be  required  by law,  or, in the  absence  of any such
requirement,  as the Mortgagee may deem  appropriate,  and to make conveyance to
the purchaser or purchasers;  and the Mortgagor shall warrant title to such real
property to such purchaser or purchasers. The Mortgagee may postpone the sale of
all or any portion of such real property by public  announcement at the time and
place of such sale, and from time to time  thereafter may further  postpone such
sale  by  public  announcement  made at time  of  sale  fixed  by the  preceding
postponement.  The right of sale hereunder  shall not be exhausted by one or any
sale,  and the  Mortgagee may make other and  successive  sales until all of the
estate be legally sold.

     5.2 Rights of the Mortgagee With Respect to Personal Property  Constituting
a Part of the Mortgaged  Property.  Upon the  occurrence of an Event of Default,
the Mortgagee will have all rights and remedies granted by law, and particularly
by the Uniform Commercial Code, including, but not limited to, the right to take
possession  of  all  personal  property  constituting  a part  of the  Mortgaged
Property,  and for this  purpose the  Mortgagee  may enter upon any  premises on
which any or all of such  personal  property is situated and take  possession of
and  operate  such  personal  property  (or any  portion  thereof)  or remove it
therefrom.  The  Mortgagee  may require the  Mortgagor to assemble such personal
property  and make it  available  to the  Mortgagee at a time and place which is
reasonably  convenient  to  all  parties.   Unless  such  personal  property  is
perishable or threatens to decline speedily in value or is of a type customarily
sold on a recognized  market,  the Mortgagee will give the Mortgagor  reasonable
notice of the time and place of any public sale or of the time after any private
sale or  other  disposition  of  such  personal  property  is to be  made.  This
requirement of sending  reasonable notice will be met if the notice is mailed by
first-class mail,  postage prepaid,  to the Mortgagor at the address shown below
the  signatures at the end of this  instrument at least ten (10) days before the
time of the sale or disposition.

<PAGE>

     5.3 Rights of the Mortgagee With Respect to Fixtures Constituting a Part of
the  Mortgaged  Property.  Upon  the  occurrence  of an Event  of  Default,  the
Mortgagee may elect to treat the fixtures  constituting  a part of the Mortgaged
Property as either real property  collateral or personal property collateral and
proceed to exercise such rights as apply to such type of collateral.

     5.4  Judicial  Proceedings.  Upon  occurrence  of an Event of Default,  the
Mortgagee, in lieu of or in addition to exercising any power of sale hereinabove
given,  may  proceed  by a suit or  suits  in  equity  or at law,  either  for a
foreclosure  hereunder,  or for the sale of the Mortgaged  Property,  or for the
specific  performance of any covenant or agreement herein contained or in aid of
the execution of any power herein granted,  or for the appointment of a receiver
pending any foreclosure  hereunder or the sale of the Mortgaged Property, or for
the enforcement of any other appropriate legal or equitable remedy.

     5.5 Possession of the Mortgaged Property. It shall not be necessary for the
Mortgagee to have physically  present or  constructively  in their possession at
any sale held by the Mortgagee or by any court,  receiver or public  officer any
or all of the  Mortgaged  Property,  and  the  Mortgagor  shall  deliver  to the
purchaser at such sale on the date of sale the Mortgaged  Property  purchased by
such  purchasers at such sale,  and if it should be impossible or  impracticable
for any of such  purchasers to take actual  delivery of the Mortgaged  Property,
then the title and right of possession to the Mortgaged  Property  shall pass to
the  purchaser  at such  sale as  completely  as if the same  had been  actually
present and delivered.

     5.6 Certain Aspects of a Sale. The Mortgagee shall have the right to become
the  purchaser  at any sale held by the  Mortgagee,  by any court,  receiver  or
public officer, and the Mortgagee shall have the right to credit upon the amount
of the bid made  therefore  the amount  payable out of the net  proceeds of such
sale to it.  Recitals  contained in any conveyance  made to any purchaser at any
sale made hereunder shall  conclusively  establish the truth and accuracy of the
matters  therein  stated,  including,  without  limiting the  generality  of the
foregoing,  nonpayment of the unpaid  principal sum of, and the interest accrued
on,  the Note  after the same have  become due and  payable,  advertisement  and
conduct of such sale in the manner provided herein.

     5.7 Receipt to  Purchaser.  Upon any sale,  whether made under the power of
sale herein  granted and  conferred  or by virtue of judicial  proceedings,  the
receipt  of  the  Mortgagee,  or of  the  officer  making  sale  under  judicial
proceedings, shall be sufficient discharge to the purchaser or purchasers at any
sale for his or their purchase money,  and such purchaser or purchasers,  or his
or their  assigns or  personal  representatives,  shall not,  after  paying such
purchase  money and  receiving  such receipt of the  Mortgagee or of such office
therefore, be obliged to see to the application of such purchase money, or be in
anywise answerable for any loss, misapplication or nonapplication thereof.

     5.8 Effect of Sale.  Any sale or sales of the Mortgaged  Property,  whether
under the power of sale herein  granted and  conferred  or by virtue of judicial
proceedings,  shall  operate  to divest all right,  title,  interest,  claim and
demand whatsoever either at law or in equity, of the Mortgagor of, in and to the
premises and the property sold, and shall be a perpetual bar, both at law and in
equity,  against the  Mortgagor,  the  Mortgagor's  successors  or assigns,  and
against any and all persons claiming or who shall thereafter claim all or any of
the  property  sold from,  through or under the  Mortgagor,  or the  Mortgagor's
successors  or  assigns.  Nevertheless,  the  Mortgagor,  if  requested  by  the
Mortgagee  to do so,  shall join in the  execution  and  delivery  of all proper
conveyances, assignments and transfers of the properties so sold.

<PAGE>

     5.9  Application  of Proceeds.  The  proceeds of any sale of the  Mortgaged
Property,  or any part thereof,  whether under the power of sale herein  granted
and conferred or by virtue of judicial proceedings, shall be applied as follows:

     First:  To the payment of all  expenses  incurred by the  Mortgagee  in the
performance  of its duties  including,  without  limiting the  generality of the
foregoing,  expenses  of any  entry  or  taking  of  possession,  of any sale or
advertisement   thereof,   and  of  conveyances,   and  as  well,  court  costs,
compensation of agents and employees and reasonable attorneys' fees.

     Second:  To the payment of the Note and of the other items of  Indebtedness
with interest to the date of such payment.

     Third: Any surplus  thereafter  remaining shall be paid to the Mortgagor or
the Mortgagor's successors or assigns, as their interests shall appear.

     5.10  Liability for  Deficiency.  The Mortgagor  will remain liable for any
deficiency owing to the Mortgagee after  application of the proceeds of any sale
of the Mortgaged Property as set forth in Section 5.9 of this mortgage.

     5.11 The Mortgagor's Waiver of Appraisement,  Marshaling, and Other Rights.
The  Mortgagor  agrees,  to the full extent that the  Mortgagor  may lawfully so
agree,  that the  Mortgagor  will not at any time insist upon or plead or in any
manner  whatever  claim  the  benefit  of  any  appraisement,  valuation,  stay,
extension or  redemption  law now or hereafter in force,  in order to prevent or
hinder the enforcement or foreclosure of this instrument or the absolute sale of
the Mortgaged  Property or the  possession  thereof by any purchaser at any sale
made pursuant to any provision hereof, or pursuant to the decree of any court of
competent  jurisdiction;  but the  Mortgagor,  for the Mortgagor and all who may
claim through or under the Mortgagor,  so far as the Mortgagor or those claiming
through or under the Mortgagor now or hereafter  lawfully may, hereby waives the
benefit of all such laws. The Mortgagor, for the Mortgagor and all who may claim
through or under the  Mortgagor,  waives,  to the extent that the  Mortgagor may
lawfully do so, any and all right to have the Mortgaged  Property marshaled upon
any foreclosure of the lien hereof, or sold in inverse order of alienation,  and
agrees that the  Mortgagee or any court having  jurisdiction  to foreclose  such
lien may sell the Mortgaged Property as an entirety or in separate parts. If any
law in this  paragraph  referred to and now in force,  of which the Mortgagor or
the  Mortgagor's  successor  or  successors  might take  advantage  despite  the
provisions hereof, shall hereafter be repealed or cease to be in force, such law
shall not  thereafter  be deemed to constitute  any part of the contract  herein
contained or to preclude the operation or  application of the provisions of this
paragraph.

     5.12 Costs and Expenses.  All costs and expenses (including attorneys' fees
and other legal,  management and consulting  expenses) incurred by the Mortgagee
in  protecting  and enforcing its rights  hereunder,  shall  constitute a demand
obligation owing by the Mortgagor to the party incurring such costs and expenses
and shall draw  interest at an annual rate equal to the highest rate of interest
from time to time accruing  under the Note plus one percent (1%) until paid, all
of which shall constitute a portion of the Indebtedness.

<PAGE>

     5.13  Operation  of the  Mortgaged  Property  by the  Mortgagee.  Upon  the
occurrence  of an Event of Default and in addition  to all other  rights  herein
conferred on the Mortgagee,  the Mortgagee  shall have the right and power,  but
shall  not be  obligated,  to  enter  upon  and  take  possession  of any of the
Mortgaged Property, and to exclude the Mortgagor,  and the Mortgagor's agents or
servants, wholly therefrom, and to hold, use, administer, manage and operate the
same to the extent that the  Mortgagor  shall be at the time entitled and in its
place and stead. The Mortgagee, or any person, firm or corporation designated by
the  Mortgagee,  may operate the same without any  liability to the Mortgagor in
connection with such operations, except to use ordinary care in the operation of
such  properties,  and  the  Mortgagee,  or  any  person,  firm  or  corporation
designated  by the  Mortgagee,  shall  have the right to  collect,  receive  and
receipt for all  Hydrocarbons  produced and sold from said  properties,  to make
repairs, purchase machinery and equipment,  conduct work-over operations,  drill
additional  wells  and to  exercise  every  power,  right and  privilege  of the
Mortgagor  with respect to the Mortgaged  Property.  When and if the expenses of
such  operation  and  development  (including  costs of  unsuccessful  work-over
operations or additional  wells) have been paid and the Indebtedness  paid, said
properties  shall, if there has been no sale or foreclosure,  be returned to the
Mortgagor.

                                   ARTICLE VI

                            Miscellaneous Provisions

     6.1 Right to Perform the Mortgagor's  Obligations.  Each and every covenant
herein contained shall be performed and kept by the Mortgagor at the Mortgagor's
sole  expense.  If the  Mortgagor  shall  fail to  perform  or  keep  any of the
covenants  of  whatsoever  kind or  nature  contained  in this  instrument,  the
Mortgagee, or any receiver appointed hereunder,  may, but shall not be obligated
to,  perform  or keep,  or  caused  to be  performed  or  kept,  the same in the
Mortgagor's  behalf,  and the Mortgagor hereby agrees to reimburse the Mortgagee
or such  receiver  (as the case may be) on demand for all  expenses  incurred in
connection  therewith  plus  interest  thereon  at an annual  rate  equal to the
highest  rate of  interest  from time to time  accruing  under the Note plus one
percent (1%) until paid. The undertaking of such performance by the Mortgagee or
such receiver (as the case may be) as aforesaid shall not obligate the Mortgagee
or such receiver (as the case may be) to continue such  performance or to engage
in such  performance or  performance  of any other act in the future,  shall not
relieve the  Mortgagor  from the  observance or  performance  of any covenant or
agreement  contained  in this  instrument  or  constitute  a waiver  of  default
hereunder  and shall not affect the right of the  Mortgagee  to  accelerate  the
payment of the  Indebtedness or to resort to any other of its rights or remedies
hereunder or under applicable law.

     6.2 Defense of Claims. The Mortgagor will notify the Mortgagee, in writing,
promptly of the commencement of any legal proceedings  affecting the lien hereof
or the  Mortgaged  Property,  or any part  thereof,  and will take such  action,
employing attorneys agreeable to the Mortgagee,  as may be necessary to preserve
the  Mortgagor's and the Mortgagee's  rights  affected  thereby;  and should the
Mortgagor fail or refuse to take any such action, the Mortgagee may, upon giving
prior written notice thereof to the Mortgagor, take such action in behalf and in
the  name  of the  Mortgagor  and  at the  Mortgagor's  expense.  Moreover,  the
Mortgagee may take such independent action in connection  therewith as it may in
its discretion deem proper, the Mortgagor hereby agreeing that all sums advanced
or all expenses  incurred in such actions plus  interest at an annual rate equal
to the highest rate of interest from time to time  accruing  under the Note plus
one percent  (1%),  will,  on demand,  be  reimbursed  to the  Mortgagee  or any
receiver appointed hereunder.

<PAGE>

     6.3 The Mortgaged  Property to Revert.  If the Indebtedness  shall be fully
paid and the covenants herein contained shall be well and truly performed,  then
all of the  Mortgaged  Property  shall  revert to the  Mortgagor  and the entire
estate,  right,  title and interest of the Mortgagee shall thereupon  cease; and
the  Mortgagee in such case shall,  upon the request of the Mortgagor and at the
Mortgagor's  cost and  expense,  deliver  to the  Mortgagor  proper  instruments
acknowledging satisfaction of this instrument.

     6.4 Renewals, Amendments and Other Security. Renewals and extensions of the
Indebtedness  may be given at any time and  amendments may be made to agreements
relating to any part of such  Indebtedness  or the Mortgaged  Property,  and the
Mortgagee may take or may now hold other security for the  Indebtedness  without
notice to or consent of the  Mortgagor.  The  Mortgagee may resort first to such
other security or any part thereof, or from time to time to either or both, even
to the partial or complete abandonment of either security, and such action shall
not be a waiver of any rights conferred by this instrument, which shall continue
as a first lien upon the  Mortgaged  Property not expressly  released  until the
Note and all other Indebtedness secured hereby is fully paid.

     6.5  Construction of Instrument as an Assignment.  This instrument shall be
deemed to be and may be  enforced  from time to time as an  assignment,  chattel
mortgage,  contract,  financing  statement,  real estate  mortgage,  or security
agreement, and from time to time as any one or more thereof.

     6.6 Limitation on Interest.  No provision of this instrument or of the Note
shall require the payment or permit the  collection of interest in excess of the
maximum permitted by law or which is otherwise contrary to law. If any excess of
interest  in such  respect is herein or in the Note  provided  for,  or shall be
adjudicated to be so provided for herein or in the Note, the Mortgagor shall not
be obligated to pay such excess.

     6.7 Unenforceable or Inapplicable Provisions. If any provision hereof or of
the Note is invalid or unenforceable in any  jurisdiction,  the other provisions
hereof  or  of  the  Note  shall  remain  in  full  force  and  effect  in  such
jurisdiction,  and the remaining  provisions hereof shall be liberally construed
in favor of the Mortgagee in order to effectuate the provisions  hereof, and the
invalidity  of any  provision  hereof in any  jurisdiction  shall not affect the
validity or enforceability of any such provision in any other jurisdiction.  Any
reference  herein  contained  to a statute or law of a state in which no part of
the Mortgaged Property is situated shall be deemed inapplicable to, and not used
in, the interpretation hereof.

     6.8 Rights Cumulative.  Each and every right, power and remedy herein given
to the  Mortgagee  shall be  cumulative  and not  exclusive;  and each and every
right, power and remedy whether  specifically herein given or otherwise existing
may be  exercised  from  time to time and so often  and in such  order as may be
deemed  expedient by the  Mortgagee,  and the exercise,  or the beginning of the
exercise, of any such right, power or remedy shall not be deemed a waiver of the
right to exercise,  at the same time or  thereafter,  any other right,  power or
remedy.  No delay or omission  by the  Mortgagee  in the  exercise of any right,
power or remedy  shall  impair any such  right,  power or remedy or operate as a
waiver  thereof  or of any  other  right,  power or  remedy  then or  thereafter
existing.

<PAGE>

     6.9  Indemnification.  The Mortgagor shall indemnify the Mortgagee and hold
it harmless against, and the Mortgagee shall not be liable for any loss, cost or
damage, including, without limitation,  attorneys' fees, resulting from exercise
by the Mortgagee of any right, remedy,  power, or privilege conferred upon it by
this instrument or any other instrument  pertaining  hereto, or from the attempt
or failure  of the  Mortgagee  to  exercise  any such  right,  remedy,  power or
privilege;  and  notwithstanding  any  provision  hereof  to the  contrary,  the
foregoing  indemnity shall in all respects continue and remain in full force and
effect  even  though  all  Indebtedness  may be fully  paid and the lien of this
instrument released.

     6.10 Partial  Release.  No release from the lien of this  instrument of any
part of the Mortgaged  Property by the Mortgagee shall in anywise alter, vary or
diminish  the force,  effect or lien of this  instrument  against the balance or
remainder of the Mortgaged Property.

     6.11 Waiver by the Mortgagee.  Any and all covenants in this instrument may
from time to time by instrument in writing  signed by the Mortgagee be waived to
such extent and in such manner as the Mortgagee  may desire,  but no such waiver
shall ever affect or impair either the  Mortgagee's  rights or liens  hereunder,
except to the extent specifically stated in such written instrument.

     6.12 Successors and Assigns. This instrument is binding upon the Mortgagor,
the Mortgagor's successors and permitted assigns, and shall inure to the benefit
of the Mortgagee,  its successors and assigns,  and the provisions  hereof shall
likewise be covenants running with the land.

     6.13 Article and Section Headings. The article and section headings in this
instrument are inserted for convenience of reference and shall not be considered
a part of this instrument or used in its interpretation.

     6.14 Recording References in Exhibit A. Unless otherwise indicated, the oil
and gas  leases,  licenses  or  other  instruments  of title  described  in each
numbered  paragraph in Exhibit A hereto cover all  Hydrocarbons in and under the
land described in the same paragraph.  The Mortgagor's  share of development and
operating costs with respect to each of the indicated wells described in Exhibit
"A"  hereto  is the  "Working  Interest"  specified  for each  such well and the
Mortgagor's share of participation in gross production of interests described in
Exhibit "A" hereto is the "Net Revenue  Interest"  specified  for each such well
described in Exhibit "A" hereto.

     6.15 Special Filing as Financing Statement. This mortgage shall likewise be
a security agreement and a Financing Statement. This mortgage shall be filed for
record,  among other places,  in the real estate records of each county in which
the oil and gas leases described in Exhibit A hereto,  or any part thereof,  are
situated,  and,  when filed in such  counties  shall be effective as a financing
statement  covering  fixtures  located on oil and gas  properties  (and accounts
arising therefrom) which are to be financed at the wellhead of the wells located
on the  real  estate  described  in  Exhibit  A  hereto  (and  accounts  arising
therefrom).

     6.16 Notices. All notices,  statements,  or other instruments authorized or
required to be given  hereunder  shall be directed to the respective  parties at
the following addresses:

<PAGE>

         As to Mortgagor:           Sun River Energy, Inc.

                                    ______________________________

                                    ______________________________

                                    ______________________________

                                    Fax No:_______________________

         As to Mortgagee:           Nova lEASING llc
                                    P.O Box 3412
                                    Casper, WY 82602

                                    ______________________________

                                    Fax No:_______________________

and all such  notices,  statements or  instruments  shall be deemed to have been
given when  delivered,  or if sent by mail, on the third  business day after the
same have been  deposited in the mails,  so  addressed,  with  postage  prepaid,
registered and with return receipt  requested;  or if sent by telex or telegram,
four (4) hours after the same have been  deposited  with an  operating  telex or
telegraph  operator  for  immediate  transmission;  or if delivered by any other
means,  on the date  actually  received  by the  party to whom  such  notice  is
directed.

     6.17 Survival of Representations  and Warranties.  All  representations and
warranties  of the  Mortgagor  contained in this  instrument  shall  survive the
execution and delivery of this instrument,  the making of the loans and advances
hereunder,  and the  execution  and  delivery of the  evidence of such loans and
advances and the security therefore.

     6.18  Choice of Law.  This  mortgage  shall be  construed  and  enforced in
accordance with and governed by the laws of the State of Wyoming.

<PAGE>

                                                     MORTAGOR AND DEBTOR:

                                                     SUN RIVER ENERGY, INC.,
                                                     a Colorado corporation

                                                     By:    ___________________

                                                     Title: ___________________

STATE OF______________     )
                           )   SS
COUNTY OF  ___________     )

         The   foregoing    instrument   was    acknowledged    before   me   by
_________________,  ______________________ of ___________________________,  this
day of , 2006.

                  Witness my hand and official seal.

                                                    ___________________________
                                                    Notary Public

My Commission Expires:

___________________________PROMISSORY NOTE

$6,600,000.00                                           ____________, Colorado

                                                        _______________, 2006

                  FOR  VALUE  RECEIVED,  SUN  RIVER  ENERGY,  INC.,  a  Colorado
corporation  ("Maker"),  promises  to pay to the order of NOVA  LEASING,  LLC, a
Wyoming limited liability  company,  at P.O. Box 3412,  Casper, WY 82602 (or, at
the option of the legal holder of this Note,  at such other place as said holder
shall designate in writing),  in coin or currency which, at the time or times of
payment,  is legal tender for public or private debts in the United States,  the
principal  sum of  SIX  MILLION  SIX  HUNDRED  THOUSAND  AND  00/100ths  DOLLARS
($6,600,000.00), with interest thereon from the date hereof at the rate of seven
and one half  percent (7 1/2%) per annum.  All  principal  and accrued  interest
shall become due and payable on October 15, 2008.

                  Maker shall pay this note in installments as follows:  (i) the
first installment shall be the principal sum of One Million One Hundred Thousand
and  no/100ths  Dollars  ($1,100,000.00)  and accrued  interest due on or before
March 15, 2007;  (ii) the second  installment  shall be the principal sum of Two
Million Eight Hundred Thousand and no/100ths Dollars ($2,800,000.00) and accrued
interest due on or before October 15, 2007; and (iii) third installment shall be
the principal sum of Two Million  Seven Hundred  Thousand and no/100ths  Dollars
($2,700,000.00)  and accrued  interest due on or before  October 15,  2008.  The
balance  of  principal  and  interest  shall  be due  and  payable  on the  date
hereinabove set forth. Maker may prepay any amount due hereunder upon payment of
a Thirty Percent (30%) prepayment penalty on the sum(s) prepaid.

                  The payment of this Note and all interest herein is secured in
part by a Mortgage,  Assignment of Production,  Security Agreement and Financing
Statement ("Mortgage"), said Mortgage being of even date herewith and being duly
recorded in the Counties of Converse and  Natrona,  Wyoming.  This Note is to be
construed according to the laws of the State of Wyoming.

                  If there  shall be any default in the making of any payment as
herein provided, or any part thereof, or in the performance of any of the terms,
agreements, covenants, or conditions contained in said Mortgage, then the entire
principal  amount hereof,  together with all accrued interest and any additional
sums to be paid under the  Mortgage  or advanced  by the holder  hereof,  at the
election  of the holder  hereof,  shall at once become due and payable and shall
bear  interest at the rate of fifteen  percent  (15%) per annum.  The failure to
exercise this election upon a default shall not constitute a waiver of the right
to exercise this option in the event of any subsequent or continuing default.

<PAGE>

                  The  provisions  of this  Note and of all  agreements  between
Maker  and  the  holder  hereof  are  hereby  expressly  limited  so  that in no
contingency  or event  whatsoever  shall the amount paid or agreed to be paid to
the  holder for the use,  forbearance,  or  detention  of the money to be loaned
under this Note or secured by the Mortgage exceed the maximum amount permissible
under  applicable  law. If from any  circumstance  whatsoever the performance or
fulfillment of any provision hereof or of any other agreement  between Maker and
the  holder  hereof  shall,  at the  time  performance  or  fulfillment  of such
provision shall be due, involve transcending the limit or validity prescribed by
law,  then,  ipso facto,  the  obligation to be performed or fulfilled  shall be
reduced to the limit of such validity,  and if from any circumstance  whatsoever
the holder  hereof  should ever receive as interest an amount which would exceed
the highest lawful rate,  the amount which would be excessive  interest shall be
applied to the reduction of the principal  balance owing  hereunder  (or, at the
holder's option, be paid over to Maker) and not to the payment of interest.

                  In the event that any  payment  shall not be  received  on the
installment  payment  date,  the Maker shall pay an amount equal to four percent
(4%) of the amount of such past due installment as a late charge for the loss of
the use of the funds and for the expense of handling the delinquent payment.

                  The rights or  remedies of the holder as provided in this Note
and the Mortgage,  shall be cumulative and concurrent and may be pursued singly,
successively,  or  together  against  Maker,  the  property  described  in  said
Mortgage,  any guarantor hereof, and any other funds, property, or security held
by the holder for the payment hereof or otherwise at the sole  discretion of the
holder.  The failure to exercise  any such right or remedy  shall in no event be
construed  as a waiver or release of said rights or remedies or of the rights to
exercise them at any later time.

                  The   Maker   and   all   endorsers,   guarantors,   sureties,
accommodation  parties hereof,  and all other persons liable or to become liable
for all or any part of this indebtedness, jointly and severally waive diligence,
presentment,  protest,  and demand,  and also notice of protest,  of demand,  of
nonpayment,  of dishonor,  and of maturity;  and they also jointly and severally
hereby  consent to any and all renewals,  extensions,  or  modifications  of the
terms  hereof,  including  time for  payment,  and  further  agree that any such
renewal,  extension,  or  modification  of the terms  hereof or the  release  or
substitution  of any security for the  indebtedness  evidenced  hereby shall not
affect the  liability of any of said parties for the  indebtedness  evidenced by
this Note. Any such renewals,  extensions,  or modifications may be made without
notice to any of said parties.

<PAGE>

     The Maker, and all endorsers,  guarantors,  sureties, accommodation parties
hereof,  and all other  persons  liable or to become  liable on this note  agree
jointly  and  severally  to pay all costs of  collection,  including  reasonable
attorney's  fees in the amount as a minimum  equal to ten  percent  (10%) of the
indebtedness  remaining  unpaid  and all  costs  of  suit,  in case  the  unpaid
principal  sum of this Note or any payment of interest or principal and interest
thereon  or premium is not paid when due,  or in case it  becomes  necessary  to
protect  the  security  for  the  indebtedness  evidenced  hereby,  or  for  the
foreclosure  by the holder of the  Mortgage or in the event the holder is made a
party to any litigation  because of the existence of the indebtedness  evidenced
by this Note, or because of the existence of the Mortgage or otherwise,  whether
suit be brought or not, and whether through courts of original jurisdiction,  as
well as in courts of appellate  jurisdiction,  or through a bankruptcy  court or
other legal proceedings.

     This Note may not be amended, modified, or changed, nor shall any waiver of
any provision  hereby be effective,  except only by an instrument in writing and
signed by the party against whom enforcement of any waiver,  amendment,  change,
modification, or discharge is sought.

     Whenever  used herein,  the words  "Maker" and "holder"  shall be deemed to
include  their  respective  heirs,  personal  representatives,  successors,  and
assigns.

     IN WITNESS  WHEREOF,  Maker has caused  this Note to be  executed as of the
date first hereinabove written.

                      SUN RIVER ENERGY, INC., a Colorado corporation

                      By: _________________________________

                      Title:_______________________________

                      By: _________________________________

                                      MAKER

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