Document:

EXHIBIT 10.24a

May 15, 2007

Rocky Mountain Gas, Inc.

Attn:  Mr. John
Reader

500 4th Avenue, S.W., Suite 2600

Calgary, Alberta T2P2V6

CANADA

Dear John:

Re:          Rocky
Mountain Gas, Inc. (“RMG”) v. PRB Energy, Inc. (“PRB”)

Based on our
discussions, PRB proposes the following to settle and compromise all issues in
dispute between PRB and RMG in the above-referenced arbitration.

1.     Except
as set forth in paragraph 2 below, PRB shall, on June 1, 2007,
prepare and execute mutually acceptable assignments to RMG of all of PRB’s
interests in the Venture Properties as that term was defined in the Farmout and
Development Agreement (“FDA”) between PRB and RMG (the “Venture Properties”)
and shall resign and approve of RMG as the successor operator of those Venture
Properties, including, without limitation, the following:

11 Dannar Pilot Wells

  6 Nonconsent Dannar Pilot Wells

  2 Fulkerson Wells

12 Reno/Dilts Wells.

All of PRB’s interests in all of the remaining acreage in the North
& South Gillette, Castle Rock, Reno, and Dilts areas.

2.     RMG
shall, on or before June 1, 2007, prepare, execute and deliver a mutually
acceptable assignment to PRB of all of RMG’s interest in Section 19,
Township 48 North, Range 71 West (“Section 19”) from the base of
the Wyodak coal formation to all depths. 
RMG agrees to obtain mortgage releases for the interests assigned to PRB
in Section 19.  PRB will retain its
present interest in Section 19 and remain as operator of Section 19 as to
all interests below the base of the Wyodak coal formation.

3.     RMG
shall retain its interests in Section 19 from the surface to the base of
the Wyodak coal formation, and RMG shall remain as operator of those
interests.  RMG agrees to retain any
associated plugging and abandonment liability related to the existing Wyodak
wells.

4.     RMG
agrees to assign to PRB all of RMG’s interests in infrastructure, surface
facilities, surface use agreements, and permits in Section 19.  RMG
agrees to assign to PRB all Wyoming Department of Environmental Quality
permits, water lines, and surface use agreements necessary to access and use
the water discharge points associated with Section 19 and located in the
Northwest 1⁄4, Section 36, Township 48 North, Range 72 West
(Permit No. WYO-043141).

5.     RMG
and PRB agree to enter into a mutually acceptable facilities use agreement for
Section 19 which would provide that RMG shall have a right to use the
infrastructure, surface facilities, permits, roads and water lines in
Section 19 on a market-rate basis as necessary to conduct its operations
in 

Section 19. 
RMG and PRB agree to cooperate in good faith with respect to all aspects
of use of the surface facilities in or associated with Section 19.

6.     RMG
agrees to pay $3.25 million (U.S.) to PRB evidenced by a promissory note
bearing 10% interest providing for wire transfer payment in immediately
available funds as follows:

a.     $500,000
on May 22, 2007

b.     $500,000
on June 21, 2007

c.     payment
of the remaining balance and accrued interest on or before October 31,
2007

d.     The
promissory note shall provide that it may be prepaid by RMG at any time without
any prepayment penalty.

7.     RMG
agrees to secure the promissory note with a first lien mortgage executed by RMG
in favor of PRB on RMG’s share of the Venture Properties under the FDA in
Campbell County, Wyoming and on the interests to be assigned to RMG as
described under paragraph 1 above, subject to the approval of RMG’s
lenders.  RMG agrees to use its
reasonable efforts to obtain the consent of its lenders on or before
June 1, 2007.  Upon obtaining such
lender consent, PRB shall deliver the assignments to RMG and RMG shall deliver
the first lien mortgage to PRB in accordance with paragraph 10 below.  If RMG does not receive such lender consent
for the granting of the first lien mortgage, then RMG and PRB shall address
their respective rights in a separate agreement.  Until the promissory note is fully paid, RMG
covenants that it will not sell, convey, or assign (including without
limitation any lien or farmout arrangement) any of the interests assigned to
RMG without the written consent of PRB.

8.     As
provided in the Stipulation between RMG and PRB dated May 9, 2007, PRB
shall allow RMG to copy the data and information identified by RMG, including
all data and information on the Moyer Pilot Project in Section 19, on or
before June 1, 2007.

9.     This
settlement resolves all claims between RMG and PRB arising prior to the date of
this agreement, except that for the production months of April and May 2007,
RMG and PRB shall each pay their respective portions of the joint interest
billings under the Joint Operating Agreement dated August 1, 2005 within 15
days of receipt thereof, and shall receive their respective share of offsetting
revenues in accordance with such agreement.

10.   On
or before May 31, 2007, PRB and RMG agree to execute and deliver all
documents necessary to implement this settlement including without limitation
the assignments of interests, the first lien mortgage, and a general and mutual
release providing that each party shall bear its own attorney fees and costs
and for dismissal of the pending arbitration proceedings with prejudice.

11.   The
parties may enforce this agreement by specific performance or an action for
damages in a federal or state court in Wyoming.

If RMG agrees to
the proposed settlement terms, please execute this agreement in the space
provided below and return it to me.

	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
  PRB Energy, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert W.
  Wright

  	
   

  
	
   

  	
   

  	
  Robert Wright

  	
   

  
	
   

  	
   

  	
  Chief Executive
  Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  ACCEPTED
  AND AGREED MAY 15, 2007:

  	
   

  
	
   

  	
   

  
	
  Rocky Mountain
  Gas, Inc.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ John F.
  Reader

  	
   

  	
   

  
	
   

  	
  John F. Reader

  	
   

  
	
   

  	
  Senior Vice
  PresidentEXHIBIT 10.24b

May 16, 2007

Rocky
Mountain Gas, Inc.

Attn:
Mr. John Reader
 500 4th Avenue, S.W., Suite 2600 

Calgary, Alberta T2P2V6 
 CANADA

Re: Rocky
Mountain Gas, Inc. (“RMG”) v. PRB Energy, Inc. (“PRB”) 

Dear
John:

In furtherance of the terms and conditions contained in
the May 15, 2007 letter agreement between RMG and PRB settling and compromising
all issues in dispute between the parties in the above-referenced arbitration
(the “Letter Agreement”), the parties agree as follows:

If RMG is not able to obtain the consent of its lenders by June
1, 2007, as contemplated in the Letter Agreement, PRB will immediately
thereafter deliver the fully executed assignments identified in Paragraph 1 of
the Letter Agreement to an independent third party escrow agent pursuant to a
mutually agreeable escrow agreement to be agreed upon by the parties no later
than May 31, 2007. The escrow agent will be instructed by the parties to hold the
assignments in escrow until notification of the earlier of (i) payment in full
of the promissory note, at which time the escrow agent will immediately deliver
the assignments to RMG, or (ii) RMG’s failure to cure a noticed default within
the time specified therein, in which case the escrow agent will be notified by
PRB of its election of remedies as set forth below. Subject to the terms of the escrow
agreement, it is the parties’ intent that the escrow agent have the authority to receive all
papers necessary to deliver the assignments to RMG and that such an
understanding creates a valid escrow effecting a completed transfer between PRB and RMG
of the assignments.

In the event of a default under the promissory note, PRB shall
give written notice of such default to RMG, and RMG shall have three business days to
cure such default. In the event such default is not cured within the time specified,
PRB may, in its sole discretion, without repayment of any amounts paid by RMG
under the promissory note, and without reassigning interests assigned to PRB
under the Letter Agreement, give notice to the escrow agent and to RMG of its
election to either (i) instruct the escrow agent of its election to have the
assignments immediately returned to PRB and upon receipt thereof PRB will
immediately deliver the promissory note to RMG, in which case RMG shall immediately
resign and approve of PRB as operator of such interests, and shall have no
right to revenues attributed to the interests described in the assignments for
periods after delivery by the escrow agent of the assignments to PRB, or (ii)
sue on the balance due on the promissory note, in which case RMG shall remain
as operator of such interests and PRB 

shall
instruct the escrow agent to immediately deliver the assignments to RMG.   This election of remedies, which shall be
made no later than fifteen days after any failure to cure a noticed
default, shall be binding once made.

During the period from June 1, 2007 until the assignments
are delivered by the escrow agent to either RMG or PRB pursuant to the terms
set forth above (the “Interim Period”), RMG shall operate the properties
identified in the assignments to it identified in the Letter Agreement (the “Assigned
Properties”) according to the Joint Operating Agreement dated August 1, 2005 (“JOA”),
except that with respect to the Assigned Properties: (i) RMG shall timely pay
all of PRB’s share of capital costs and expenses under the JOA incurred during
the Interim Period; (ii) PRB shall have no liability for capital costs and
expenses under the JOA incurred during the Interim Period; (iii) RMG shall indemnify
PRB for any costs, expenses, or losses under the JOA incurred during the
Interim Period; and (iv) RMG shall be entitled to PRB’s share of revenue earned
under the
JOA during the Interim Period.

If RMG agrees to the proposed terms set forth
herein, please execute this agreement in the space provided below and return it to me.

	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
  PRB Energy, Inc.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert W.
  Wright

  	
   

  
	
   

  	
   

  	
       Robert Wright

  
	
   

  	
   

  	
       Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
  ACCEPTED AND AGREED

  	
   

  
	
   

  	
   

  
	
  May 15, 2007 Rocky Mountain

  	
   

  
	
   

  	
   

  
	
  Gas, Inc.

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ John F.
  Reader

  	
   

  	
   

  
	
               John
  F. Reader

  	
   

  
	
               Senior Vice President

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