Document:

Exhibit 10.29

 

January 9, 2007

 

PRIVATE
AND CONFIDENTIAL

 

Mr. Dawson Steven
Lin

 

Dear Steve:

 

This Letter of
Understanding will confirm our mutual agreement relative to the terms and
conditions applicable to the extension of your international assignment.

 

The terms and conditions
of your employment are set forth in this Letter and in the following Capmark
Finance, Inc. (“CFI”), Guide to International Service Personnel Policies (“CFI.
ISP Policy”).

 

This policy may be
changed from time to time as legal requirements may dictate, new practices may
require, or for other reasons at the discretion of the Company. Additionally,
the terms of this assignment are contingent upon you successfully retaining the
required work permits or visas. If questions should arise concerning any
provision of this letter or any subsequent revisions of policies applicable to
employees on international assignment, you should contact me directly.

 

General

 

Place of Employment:
Tokyo, Japan 

Position Title: CEO Asia Operations 

Salary: $500,000 U.S. dollars/annum 

Bonus: Capmark Discretionary Plan 

Anticipated Assignment Effective Date: December 1, 2006 

Anticipated Length of Assignment: 3 years 

Point of Origin: US

 

 

Compensation
and Foreign Assignment-Related Benefits

 

With the extension of
your international assignment, your compensation will be as estimated in the
attached International Assignment Compensation Summary. Salary administration
will be handled in accordance with CFI practices, and adjustments made
according to salary guidelines established within CFI.

 

Your compensation will be
administered through the CFI’s US payroll, with appropriate deposits to your
bank account(s). Your Domestic and Foreign Pay and Overseas Allowances have
been established and included in the attached Compensation Summary.

 

Some of the specific
provisions that will apply to your international assignment are described
below:

 

1.                          You will
be eligible to continue to participate in the various CFI benefit plans which
will be determined in accordance with the provisions of such plans. In
particular your health and dental insurance will be provided through Cigna
International. To the extent such plans will permit, your base salary
(exclusive of allowances) shall be the basis for the calculation of coverage and
retirement benefits. Assignment-related allowances will not be included in the
calculation of coverage and retirement benefits.

 

2.                          Home
leave is time off with pay plus round trip business class airfare and use of a
rental car. Expatriates are entitled to one home leave trip every twelve
months, in accordance with the CFI ISP Policy.

 

3.                          You will
accrue 23 days of Paid Time Off (PTO) annually. As of your 5th year
anniversary on 11/1/07 your PTO accrual win increase to 26 days.

 

6.                          Time off
during home leave will be charged as Paid Time Off (PTO).

 

7.                          The
Company will continue to pay your housing rent expenses directly for the
duration of your assignment in Tokyo, Japan. Utility expenses (gas, electricity
and water) are reimbursable expenses. If needed the Company will pay security
and lease deposits required by the lease agreement. You will be expected to pay
a housing obligation representing an assumed cost of home country housing,
(USA) for your salary level, based on results from surveys from CFI.

 

9.                          The CFI
ISP Policy will be used as the guideline for other matters such as allowances,
goods and services differential, etc., not specified in this letter of
understanding.

 

 

Tax Equalization

 

We would also like to
call your attention to CFI’s Tax Equalization Guidelines. During expatriation,
in order to equalize your tax bill with that of your domestic counterpart at
the same level of income, a hypothetical income tax will be deducted from your
total salary. Even if there is no foreign tax obligation, CFI will still retain
these hypothetical tax deductions. Should you voluntarily resign or be
terminated for cause, you will be covered under the tax-equalization policy
until your separation date.

 

Other Matters

 

CFI will not guarantee
the term of any foreign assignment. Normally, a regular-term foreign assignment
is expected to be for a period varying from two to five years. The actual time
will vary and may be impacted by personal emergencies, Company business
circumstances or performance.

 

At the completion of your
assignment, you may be considered for an extension of the current assignment,
reassignment to another international location, or repatriation to your home
country. Extension of your present assignment is subject to mutual agreement by
you and management in your home and host country.

 

The terms and conditions
of your employment and termination of employment (voluntary or involuntary)
will be governed by the laws of Japan and policies of CFI.

 

This Letter of
Understanding does not create a contract of employment between you and the
Company for any specified period. Your employment with CFI is an “Employment at
Will”, which means that either you or the Company may terminate your employment
at any time, with or without cause, upon notice to the other.

 

The terms of this
assignment are confidential and may not be disclosed without specific
authorization. We request that you acknowledge receipt of this Letter and your
agreement with its terms by signing and returning one copy to Human Resources.

 

 

	
  Sincerely yours,

  
	
  

  /s/ Paul Luhmann

  	
   

  	
   

  
	
  Paul Luhmann 

  Assistant Vice President

  Human Resources

  

 

 

Attachment

 

 

DISTRIBUTION:

Linda Pickles, Executive
Vice President, HR

	
  Acknowledge and Concur:

  	
  /s/ Dawson Steven Lin

  	
   

  	
  Date:

  	
  4/23/2007

  	
   

  
	
   

  	
  Dawson Steven Lin

  	
   

  	
   

  	
   

  	
   

  

 

Return one copy
to:         Paul Luhmann

 

 

INTERNATIONAL ASSIGNMENT COMPENSATION/OBLIGATION

SUMMARY

 

Mr. Dawson Steven Lin

 

	
  BASE SALARY

  	
   

  	
   

  
	
  -Effective 12/1/06

  	
   

  	
  $500,000 USD annually

  
	
   

  	
   

  	
   

  
	
  BONUS PLAN

  	
   

  	
  Capmark Discretionary Plan

  
	
   

  	
   

  	
   

  
	
  APPLICABLE FOREIGN ASSIGNMENT

  	
   

  	
  Monthly LCA Allowance:

  
	
  ALLOWANCES

  	
   

  	
  $2,989.89 USD

  
	
   

  	
   

  	
  (LCA indices fluctuate monthly primarily due to
  changes in exchanges rates (other factors may also influence this index).

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  OTHER BENEFITS

  	
   

  	
  •  Tax Preparation and Equalization

  
	
   

  	
   

  	
  •  Home Leave every 12 Months

  
	
   

  	
   

  	
  •  Provided Dependent Education

  
	
   

  	
   

  	
  •  Membership/monthly dues to American Club.

  
	
   

  	
   

  	
   

  
	
  MONTHLY HOUSING OBLIGATION

  	
   

  	
  $2,096.38.00 USD per monthExhibit 10.2

                         AGREEMENT OF PURCHASE AND SALE
                   OF STAR OF TEXAS ENERGY SERVICES, INC. AND
                      STAR OF TEXAS MINERALS RESOURCES LLC

This Agreement for the Purchase and Sale of the assets as described in Exhibit
"A" of STAR OF TEXAS ENERGY SERVICES, INC., STAR OF TEXAS MINERALS RESOURCES
LLC, HYDRO-FX, INC and BARNETT HOLDING, LLC all of P.O. Box 4038, Lago Vista,
Texas, 78645, , (hereinafter collectively referred to as "Seller") and EXTERRA
ENERGY INC., of Suite 1415 - 115 West 7th Street, Fort Worth, Texas, 76102, a
duly incorporated company in the state of Nevada (hereinafter referred to as
"Buyer") is made as of September 19th, 2007 (hereinafter called the "Effective
Date").

     1. Purchase and Sale. Seller agrees to sell, assign and convey and Buyer
agrees to purchase one hundred (100.00%) percent of Assets (including the future
right to use the name "Star of Texas Energy Services" and "Star of Texas Mineral
Resources") of the Seller as fully described and detailed in Exhibit "A" to this
agreement, which is attached hereto and made a part hereof for all pertinent
purposes, the same as if set forth at length herein, subject to all
reservations, exclusions, limitations and other matters affecting Seller's
mineral and royalty interests in and to the lands and leases described in
Exhibit "A" herein and further subject to the reservations and exclusions set
forth Section 5, below. The "Assets" hereunder shall consist of those working
interests, leases, mineral interests, royalty interests non-participating
royalty interests described in Exhibit "A", attached hereto including but not
limited to all oil, gas and other mineral interests and royalties therefrom, all
interest in oil and gas wells located thereon and therein, all equipment on such
oil and gas wells and all revenues and proceeds attributable to the mineral
interests, royalty interests and non-participating royalty interests from and
after the Effective Date (as defined below)

     2.1 Price. The purchase price for the Assets (hereinafter referred to as
the ("Purchase Price") shall be the sum of $6,000,000.00 U. S. funds, at
closing. The form of the payment shall be in the "common shares" of the Buyer at
a deemed price of $0.75 per share for a total of 8,000,000 shares.

     2.2 Restricted Shares. Seller is acquiring the Shares of Buyer for its own
account and not with a view to their distribution within the meaning of Section
2(11) of the Securities Act. Such Shares are restricted stock and have been
acquired for investment and have not been registered under the securities act of
1933, as amended. Without such registration, such Shares may not be sold,
pledged, hypothecated or otherwise transferred at any time whatsoever, except
upon delivery to the Buyer of an opinion of counsel satisfactory to the Buyer
that registration is not required for such transfer or the submission to the
Buyer of such other evidence as may be satisfactory to the Buyer to the effect
that any such transfer shall not be in violation of the securities act of 1933,
as amended, or applicable state securities laws or any rule or regulation
promulgated thereunder.

                                        1
<PAGE>

     3. Closing.

     3.1. Date. The Closing shall be on or before September 29th , 2007 in Fort
Worth, Texas (or such other location within the United States as mutually
designated by the Buyer and Seller) or before said date as mutually agreed to by
the Seller and the Buyer

     3.2. Apportionment of Costs. Each party hereto shall bear its own costs and
expenses associated with the transactions contemplated hereby, including
attorneys' and agents' fees. Buyer shall bear all costs related to geophysical
evaluation and all other matters of its due diligence, including, but not
limited to its landman fees, attorneys' fees, appraisal fees, as well as
lenders' fees.

     3.3. Prorations. Ad valorem property taxes shall be pro-rated to the date
of Closing. Seller shall pay all unpaid ad valorem property taxes which are due
on the closing date.

     3.4. Effective Date. The effective time of this purchase shall be at 7:00
o'clock a.m. on the 30th day of September, 2007. Seller shall be entitled to all
production, royalties in the pipe accruing to Seller's account through that
date.

     4. Title and Inspections.

     4.1. File Inspection. Upon reasonable notice to Seller, Buyer may inspect
all of Seller's files related to land titles and leases as such files may be
maintained in the office of Star of Texas Energy Services, Inc. located at 7804
Bronco Lane, Suite 100, Lago Vista, Texas.

     4.2. Quality of Title. Seller shall deliver to Buyer at Closing, such
right, title and interest it has in the "Property" (including undivided
interests in numerous tracts) subject to the Properties being held in escrow for
title and lien curative work.

     4.3. Title Examination. Buyer shall satisfy itself prior to closing, as to
the title Seller has in all tracts described in Exhibit "A". Seller will convey
without warranty of title, all its right, title and interest in and to the
tracts described in Exhibit "A" attached hereto. Seller owns no interest in the
surface estate of any tracts of land described in Exhibit "A" attached hereto
unless noted. Seller makes no warranty or representation as to the gross or net
number of mineral acres owned by it.

     4.4 Title Defect Notices. In the event Buyer discovers defects in Seller's
title, the Buyer shall notify the Seller in writing. Thereafter, Seller shall
have until the closing date to cure any defect in title, at Seller's sole cost
and expense. All title defects not discovered or brought to Seller's attention
prior to September 21st, 2007 at 5:00 o'clock p.m. shall be deemed waived by the
Buyer.

                                        2
<PAGE>

     4.5 Files and Records. Within thirty (30) days after the Closing and at the
Buyer's expense, Seller shall furnish to the Buyer all records relating to its
title as may be in its possession or in the possession of the Seller's counsel.

     4.6 Buyer's Due Diligence. The Buyer shall and does rely on its independent
evaluation of the Property and all its constituent elements, including
hydrocarbon reserve analysis, production history, well data, lease analysis,
quantity of acreage and the like. The Buyer is charged with knowledge obtainable
from county land records as well as state, federal and regulatory agency records
which pertain to the Property or any part thereof, including producing wells.
The Seller does not warrant or represent to the Buyer any of the following: 1)
the accuracy or completeness of files, contracts, any other information relating
to the "Property" (including their constituent tracts); 2) the quantity of
acreage; 3) the quantity of production nor; 4) the quality and/or amount of
reserves, if any; 5) the ability of the "Property" to produce hydrocarbons from
the "Property"; nor 6) any other material matter.

     5. Warranties.

     5.1. Seller's Warranties. Seller represents and warrants to, and agrees
with, the Buyer as follows:

     5.1.1. Organization. The Sellers were all formed under the laws of Texas
and are validly existing and with full power and authority to own its property
and to conduct its business.

     5.1.2. Litigation and Claims. Other than those disclosed, to sellers
knowledge there are no actions, suits, claims, investigations or legal,
governmental, administrative or arbitration proceedings pending or threatened
against the Seller, nor to Seller's knowledge, any basis for any such claims
that have not been disclosed.

     5.1.3. Material Changes. Notwithstanding current prosecutions of lien
claims, since September 1st, 2007, there have been no material adverse changes
in the interest Seller owns in the land and leases set forth on Exhibit "A"
attached hereto and that until the Closing, the Seller's ownership in such lands
and leases shall be conducted in the usual, regular and ordinary manner in all
material respects.

     5.1.4. Authority. Seller has full power and authority to act in this
transaction and has taken all requisite actions, to authorize it to carry on its
business as presently conducted, and has taken or will take all such actions to
authorize it to enter into this Contract and to perform its obligations
hereunder.

     5.1.5. Contracts. To the best of Seller's knowledge, there are no
contracts, agreements or obligations which in any way bind the Seller, relating
to the Property, except outstanding Oil, Gas and Mineral Leases, Participation
Agreements, Joint Operating Agreements, and Farm-out agreements, regarding the
properties described in Exhibit "A" as set forth hereunder.

                                        3
<PAGE>

     5.1.6. Title and Escrow: Certain Properties to be Held in Trust. It has
been disclosed that certain of the properties to be assigned are encumbered by
liens under section 53 and/or section 56 of the Texas Property Code. Those
properties are not subject to assignment until such time as the lien is released
or the lien holder consents in writing. Any assignments made of properties
subject to a lien will be delivered to and held in trust by Robert R. Durbin and
not effective until delivery of the written conveyance document to Buyer. Mr.
Durbin will upon obtaining a release of a lien or written consent from a
lienholder then notify the parties hereto and obtain written instructions for
the delivery of the conveyance document for that property. Upon delivery, the
conveyance document will be effective from the date stated there on.

     5.2. Buyer's Warranties. Buyer represents and warrants that:

     5.2.1. Organization. The Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Nevada, with full
corporate power and authority to own its property and to conduct its business.

     5.2.2. Authority. Buyer's execution, delivery and performance of this
Agreement has been duly authorized by all necessary corporate actions. A
secretarial certificate shall be prepared and submitted at closing, providing
satisfactory evidence of the necessary resolutions of the Buyer to approve the
execution of this Purchase and Sale Agreement as well as all requisite closing
and funding documents.

     5.2.3. Sophistication of the Buyer. Buyer is experienced and knowledgeable
in the oil and gas business and is aware of its risks. The Buyer shall be
afforded the opportunity to examine all relevant records of the Seller prior to
closing. The Buyers acknowledges and agrees that neither the Seller nor any of
its representatives or agents made representations or warranties, express or
implied, written or oral, on behalf of Seller, except as stated in this
Agreement. In entering into this Agreement, the Buyer acknowledges and affirms
it has and will rely exclusively upon its judgment, independent evaluation,
analysis and investigations with respect to the business, economic, legal, tax
and other consequences of the transaction contemplated by this Agreement.

     5.3 Representations and Warranties. The representations and warranties of
the Seller and the Buyer contained in this Agreement shall be true and accurate
as of the Closing Date and shall survive Closing.

     6. The Closing.

     6.1.1 Seller's Obligations at Closing. Seller shall deliver to Buyer an
Assignment bearing the effective date and time as set forth herein. The
Assignment shall apply to the "Property" set forth and described in Exhibit "A",
save and except any property unable to be sold due to perfected liens, which is
attached hereto for all pertinent purposes the same as if set forth at length
herein which shall be assigned pursuant to Section 5.1.6. Such conveyance shall
be subject to any and all existing Oil, Gas and Mineral Leases, Participation

                                        4
<PAGE>

Agreements, Joint Operating Agreements, and Farm-out agreements affecting the
subject Property, as well as any Oil, Gas and Mineral Leases executed by The
Seller during the term of this Purchase and Sale Agreement, as herein provided.
The Seller shall notify all operators of the oil and gas leases which produce
royalty income of the change in ownership. Not withstanding the above, should
any property not be transferred on the closing date due to liens filed on the
property, those properties shall be transferred upon the release of those liens
as provided under section 5.1.6 above. Buyer shall pay all sales and use taxes
and related penalties and interest, if any, due as a result of this transaction.
Seller shall pay all transfer and documentary stamp fees. Buyer shall pay all
filing and recording fees required in connection with the filing and recording
of the Conveyance. Ad valorem taxes levied on the Properties for the Year 2007
shall be prorated to the Effective Date. Ad valorem taxes for the prorated
portion of 2007 prior to the Effective Date shall be paid by Seller to Buyer, at
closing or an adjustment to purchase price for the same shall be made at
closing. Ad valorem taxes for 2006 and all previous years shall be paid by
Seller prior to Closing and Seller shall protect, defend and hold Buyer harmless
from and against the payment of the same. Ad valorem taxes for the prorated
portion of 2007 attributable to Buyer and all subsequent years, shall be paid by
Buyer and Buyer shall protect, defend and hold Seller harmless from and against
the payment of same.

     6.1.2. Opinion of Seller's Counsel. Contemporaneously with execution of
this Agreement, Seller's counsel shall deliver an opinion letter certifying the
Seller has legal authority to execute the Purchase and Sale Agreement as well as
all reasonably necessary closing documents, including the Assignment.

     6.1.3. Seller's Further Assurances. After the closing, the Seller shall
execute and deliver or use reasonable efforts to cause to be executed and
delivered such other instruments of conveyance and transfer as may be reasonably
requested by the Buyer or any operator designated by Buyer.

     6.2.1. Buyer's Obligations at Closing. Buyer shall deliver to Seller the
total purchase price in "Common Shares" as described in Item 2 above. It shall
be the Buyer's obligation to obtain and execute Transfer Division Orders from
all operators of wells from which the Seller receives royalty income.

     6.2.2. Buyer's Board Resolution. Contemporaneously with the execution of
this Agreement, Buyer shall furnish to Seller a copy of its Board Resolution
together with its Secretarial Certificate evidencing Buyer's corporate authority
to enter into this Agreement as well as its authority to purchase the Assets, on
terms as herein set forth.

     6.2.3. Recording of Assignments and Deeds. The Buyer shall be responsible
for recording the Assignments and Deeds in the Official Public Records of Real
Property in counties in which the Properties are located Texas. The Buyer shall
furnish a copy of the recorded Assignments to Seller (at no charge to the
Seller) once the recorded documents are returned from the respective county
clerk's offices.

                                       5
<PAGE>

     6.2.4. Secretarial Certificate. The Buyer shall provide a Secretarial
Certificate to the closing agent which evidences the approval of the Buyer's
Directors and Shareholders, as the case may be, of the terms, conditions and
provisions of this Agreement as well as approving and granting authority to its
corporate officers to execute the requisite and necessary closing documents and
authorizing the funding of the purchase as contemplated herein. The parties
acknowledge that the principal of the Seller is on the Board of Directors and is
a shareholder of the Buyer and that he has recused himself from the deliberation
and approval by the Board of the Buyer. Further, the Buyer expressly waives any
conflict that might arise from this transaction as it related to such
relationship.

     7. Termination/Default. Seller shall not terminate this Agreement during
the pendency of this Agreement unless one of the following occurs: Buyer makes
an assignment for the benefit of creditors; the filing by or against Buyer of a
petition to have Buyer adjudged a bankrupt, or a petition for reorganization or
arrangement under any law relating to bankruptcy; the appointment of a trustee
or receiver to take possession of substantially all of Buyer's assets; or the
attachment, execution or other judicial seizure of substantially all of Buyer's
assets without Buyer's prior written consent; the trading of Buyer's stock being
halted by order of the Securities and Exchange Commission due to alleged trading
irregularities, corruption or other malfeasance by Buyer. The Seller shall have
no further duty with regard to this Agreement in the event Seller terminates
this Agreement due to the occurrence of any one of the preceding events.

     8. Confidentiality. The Seller and the Buyer shall hold the terms and
conditions of this Agreement as strictly confidential. The Seller shall not
disclose any information regarding this Agreement except on a need-to-know basis
to the Seller's shareholders and to the Seller's certified public accountants
and legal counsel. The Buyer shall not disclose any information regarding this
Agreement except as is necessary to comply with applicable United States of
America securities laws, including the Securities Exchange Act of 1934. Either
party may provide its consent, in writing, to the further disclosure of any of
the terms or provisions set forth herein.

     9. Indemnities.

     9.1 Seller's Indemnity: Seller hereby holds Buyer harmless and does hereby
indemnify Buyer from and against any and all claims under this agreement and for
commissions, finder's fees or other compensation, which may be due any broker,
agent or finder not set forth herein. Such indemnification includes attorney's
fees, court costs and all associated costs of litigation.

     9.2 Buyer's Indemnity: Buyer hereby holds Seller harmless and does hereby
indemnify Seller from and against any and all claims under this agreement and
for commissions, finder's fees or other compensation, which may be due any
broker, agent or finder not set forth herein. Such indemnification includes
attorney's fees, court costs and all associated costs of litigation.

                                       6
<PAGE>

     10. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of Seller and Buyer, and their respective heirs, personal
representatives, successors and assigns.

     11. Entire Agreement. This Agreement contains the entire agreement between
Buyer and Seller and supersedes all prior agreements, if any. No additions or
modifications of any term or provision shall be effective unless set forth in
writing, signed by both Buyer and Seller.

     12. Time of Essence. Time is of the essence of each and every term,
condition, obligation and provision hereof.

     13. Attorney Fees. In the event of any actions, suit or other proceedings
to enforce this Agreement, the prevailing party shall be entitled to recover
from the other party all of the prevailing party's costs and expenses of suit,
including but not limited to reasonable attorney's fees incurred.

     14. Notices. All notices, statements, demands, requests, consents,
approvals, authorizations, offers, agreements, appointments or designations
required under this Agreement or by law by either party to the other shall be in
writing and shall be deemed sufficiently given and served upon the other party
if personally served or sent by registered or certified mail, postage prepaid to
the following addresses:

         To Seller:        STAR OF TEXAS ENERGY SERVICES, INC.
                           P.O.Box 4675
                           Lago Vista, TX 78645
                           (512) 267-6005
                           (512) 267-4459 facsimile
                           rl@staroftexasenergy.com

                           And

                           STAR OF TEXAS MINERALS RESOURCES LLC
                           P.O. Box 4675
                           Lago Vista, TX 78645
                           (512) 267-6005
                           (512) 267-4459 facsimile
                           rl@staroftexasenergy.com

         With copy to:     Robert R. Durbin
                           Law Offices of Robert R. Durbin
                           P.O. Box 4675
                           Lago Vista, TX 78645
                           (512) 422-2493
                           (512) 267-0223 facsimile
                           durbinlaw@earthlink.net

                                       7
<PAGE>

         To Buyer:         EXTERRA ENERGY INC.
                           c/o Mr. Gordon McDougall, CEO
                           115 West 7th Street, Suite #1415
                           Forth Worth, Texas 76012

         With copy to:     Mark Robertson
                           ROBERTSON & WILLIAMS
                           3033 N.W. 63rd Street, Suite 200
                           Oklahoma City, Okahoma 733116-3607
                           Telephone: (405) 848-1944
                           Fax: (405) 843-6707
                           Mark@robertsonwilliams.com

The parties may designate any other address(es) for the service of notice by
furnishing same in accordance with this paragraph.

     15. Invalid Provisions. If any one or more of the provisions of this
Agreement shall for any reason be held to be invalid, unenforceable or illegal
in any respect, such invalidity, illegality or unenforceability shall not affect
any other provision of this Agreement, and this Agreement shall be construed as
if such invalid, illegal or unenforceable provision had never been set forth.

     16. Further Assurances. Each party agrees to execute such other and further
instructions as may be necessary or proper in order to consummate the
transaction contemplated by this Agreement.

     17. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas.

     18. Venue. The venue of any action brought by either party in regard to
this Agreement or arising out of the terms and conditions set forth herein shall
be exclusively held in either Tarrant County, Texas for state court actions. In
the event federal court actions are initiated, venue shall lie in the federal
district court for the Northern District of Texas.

     19. Acceptance. If this Agreement is not executed by Buyer and Seller, in
multiple originals, on or before 6:00 p.m. CDT, effective on September 29th,
2007, this Agreement shall be null and void and neither party shall have any
further obligations hereunder.

                                       8
<PAGE>

     20. Effectiveness. This Agreement shall become effective when executed by
Seller and Buyer and original executed copies of this Agreement are exchanged by
the parties.

     21. No Partnership Created. It is not the purpose or intention of this
Agreement to create (nor shall it be construed as creating) a joint venture,
partnership or any kind or type of association and the parties hereto are not
authorized to act as agent or principal for each other with respect to any
matter related hereto.

     22. Counterparts. This Agreement may be executed in multiple counterparts,
and each counterpart shall be considered as if it were an original. The parties
agree that execution of this Agreement by a party and the delivery of such
party's signature by facsimile transmission to the other party shall be fully
effective as the original signature of such party, and the other party may fully
rely on the received facsimile signature of the signing party to the fullest
extent as if it were the original copy thereof. Each signing party covenants and
agrees to promptly deliver to the other party an original counterpart copy of
such signing party's signature following transmission thereof by facsimile.

            [the remainder of this page is left blank intentionally]

                                        9
<PAGE>

     Dated as of September 29th, 2007.

SELLER:

STAR OF TEXAS ENERGY SERVICES, INC.
HYDRO-FX, INC. AND BARNETT HOLDING, LLC
And

STAR OF TEXAS MINERALS RESOURCES LLC

By: /s/ Ray Ledesma
    -------------------
    Ray Ledesma
    President & CEO
    Managing Member

BUYER:

EXTERRA ENERGY INC.

By: /s/ Gordon McDougall
    ------------------------
    Gordon McDougall
    CEO

                                       10
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>

                                                       Exhibit "A"

A) LIST OF ASSETS - STAR OF TEXAS ENERGY SERVICES, INC.                              Gross
Property                                 Zone         Operator        Status         Acres      County     WI%            NRI%
--------                                 ----         --------        ------         -----      ------     ---            ----
Garrett #1                            Bend Cong.     Star of TX      Producing                   Wise            100%            70%
272 acres (Shallow rights)
Wright-Star Unit 1, Well #1         Barnett Shale    Star of TX      Producing             100   Wise     10.7851748%     7.9810303%
     100 acres out of a 200
      acre Unit
Wright-Star Unit 1, Well #2         Barnett Shale    Star of TX      Producing             100   Wise     16.3849923%    12.1248943%
     100 acres out of a 200
      acre Unit
Oates-Star #3H                      Barnett Shale    Star of TX      Producing           127.5   Wise     10.5772964%     7.5098804%
     127.5 acres out of a 207.5
      ac lease
Davis #1H                           Barnett Shale    Star of TX      Producing              80  Denton     6.8697529%     5.1523147%
Shepherd-Star #1H                   Barnett Shale    Star of TX      Producing             145   Wise     13.5772963%     9.9114162%
Brammer #1                          Barnett Shale    Star of TX      To be PxA                   Wise     15.0713179%
Valley View #2                      Barnett Shale    Star of TX      To be PxA                  Denton       40.9556%
Hodges #1H                          Barnett Shale    Star of TX      Producing           97.49   Wise        18.1999%    13.3259664%
Naugle #1H                          Barnett Shale    Star of TX       Shut-in            75.67   Wise     13.5529843%    10.0292084%
Lucky Lady #1H                      Barnett Shale    Star of TX      Producing             118   Wise      5.3926779%     3.9905816%
Aaron-Star #1H                      Barnett Shale    Star of TX      Producing             100   Wise       4.380728%     2.8670318%
Bullard #1H                         Barnett Shale    Star of TX      Producing            66.7   Wise     10.4691528%      7.747173%
RSK-Star #5                         Barnett Shale    Star of TX      Producing              20   Wise     5.97205593%     4.2401621%
     20 acres out of a 267 acre
      lease
RSK-Star #6                         Barnett Shale    Star of TX    Ready to frac            20   Wise     16.8029412%    12.4341765%
     20 acres of a 267 acre
      lease
RSK-Star Vaughn Unit, Well #7       Barnett Shale    Star of TX      Producing          28.679   Wise      6.6000003%     4.8840002%
Jennings #1H                        Barnett Shale    Star of TX      To be PxA                   Wise      28.767059%
Malcolm-Star #1H                    Barnett Shale    Star of TX      Producing             212   Wise      45.060366%    33.6731609%
Durant #1H                          Barnett Shale    Star of TX      Producing             110   Hood          9.889%       7.51564%
Robertson Unit #1                   Barnett Shale    Star of TX      Producing             212   Hood         6.3302%     4.9626936%
Garrett-Star #1H                    Barnett Shale    Star of TX    Ready to frac           272   Wise     30.8163723%    23.4204429%
Pritchard Unit Well #1              Barnett Shale    Star of TX    Ready to frac         100.5  Parker         19.43%       14.3782%
Mooney #1H                          Barnett Shale    Star of TX    Ready to frac         53.57  Parker         16.96%       12.5504%
Boecker-Star #1H                    Barnett Shale    Star of TX    Ready to frac         149.5  Parker        74.304%      54.98496%
Cooper B #1H                        Barnett Shale    Star of TX    Ready to frac          57.8  Parker         71.60%        52.984%
Wilson A #1H                        Barnett Shale    Star of TX    Ready to frac           160   Jack             55%         41.25%
McPherson B #1H                     Barnett Shale    Star of TX    Ready to frac         115.3   Hill             75%         56.25%
Wilson B #1H                        Barnett Shale    Star of TX    Surf csg set            351   Jack             65%         48.75%
Wolfenburger #1H                    Barnett Shale    Star of TX     Wait on rig            163  Parker            65%         48.75%
Crowley Lease                       Barnett Shale    Star of TX      Drillsite              20  Denton           100%         74.47%
     20 acres out of a 100 acre
      lease
3978.96 ac Odom leases & Long
 Creek Lease:                                                                          3978.96  Parker
Carried 2.625% WI for drilling                                                                  & Hood
 & completion of all wells
  Odom Leases - Stevens &
   Slocum Ranch 2573.33 ac
  Long Creek Land Holdings Lease
  - Martin Ranch 1405.63 ac
   Current wells:
   1) Odom Martin #1H               Barnett Shale     SM (CRZO)      Producing                                 2.625%         1.995%
   2) Odom Martin #2H               Barnett Shale     SM (CRZO)      Producing                                 2.625%         1.995%
   3) Odom Slocum #1H               Barnett Shale     SM (CRZO)      Producing                                 2.625%         1.995%
   4) Odom Stevens #1H              Barnett Shale     SM (CRZO)      Producing                                 2.625%         1.995%
   5) Odom Stevens #2H              Barnett Shale     SM (CRZO)      Producing                                 2.625%         1.995%
   6) Stevens Martin #1H            Barnett Shale     SM (CRZO)      Producing                                 2.625%         1.995%
   7) Martin Hyponex 1H Unit
      (132.18 ac add'l)             Barnett Shale     SM (CRZO)      Producing          132.18  Parker        1.3125%        0.9975%
Robinson #1                         Barnett Shale       CRZO         Producing           179.2   Hood          2.625%         1.995%
Walker Waggoner #3                  Barnett Shale       CRZO         Producing             152   Wise         1.6875%     1.2909375%
Acrey #1                            Barnett Shale        WW          Producing          67.921  Tarrant         0.80%       0.59576%
City of Aurora #1                   Barnett Shale        WW          Producing          41.202   Wise            0.1%     0.0801626%
Belew-Star #1                       Barnett Shale        WW          Producing              40   Wise            0.1%         0.071%
40 acres out of an 80 ac lease
Belew-Star #2                       Barnett Shale        WW          Producing              40   Wise            0.1%         0.071%
40 acres out of an 80 ac lease
Bradford #1                         Barnett Shale        WW          Producing              40  Denton           0.1%         0.075%
Brewer #1                           Barnett Shale        WW          Producing          41.324  Tarrant          0.1%         0.075%
Buchanan #1                         Barnett Shale        WW          Producing           40.14  Denton           0.7%       0.52675%
40.14 acres out of a 255.44 ac
 lease
Buchanan #2                         Barnett Shale        WW          Producing           40.36  Denton           0.7%       0.52675%
40.36 acres out of a 255.44 ac
 lease
Buchanan #3                         Barnett Shale        WW          Producing            40.5  Denton           0.8%         0.602%
40.5 acres out of a 255.44 ac
 lease
Buchanan #4                         Barnett Shale        WW          Producing            43.4  Denton         0.225%     0.1693125%
43.4 acres out of a 255.44 ac
 lease
Buchanan #5                         Barnett Shale        WW          Producing            48.2  Denton         0.225%     0.1693125%
48.2 acres out of a 255.44 ac
 lease
Buchanan #6                         Barnett Shale        WW          Producing            40.1  Denton         0.225%     0.1693125%
40.1 acres out of a 255.44 ac
 lease
Cates-Star #1                       Barnett Shale        WW          Producing              40   Wise            0.1%         0.071%
40 acres out of a 69.95 ac lease
Cates-Star #2                       Barnett Shale        WW          Producing           29.95   Wise            0.1%         0.071%
29.95 acres out of a 69.95 ac
 lease
Crowley #1                          Barnett Shale        WW          Producing              40  Denton           0.8%       0.59576%
40 acres out of a 100 ac lease
Crowley #2                          Barnett Shale        WW          Producing              40  Tarrant          0.1%       0.07447%
40 acres out of a 100 ac lease
Fleischaker #1                      Barnett Shale        WW          Producing              40  Denton           0.1%         0.075%
Gebert #1                           Barnett Shale        WW          Producing              40  Denton           0.8%      0.585764%
40 acres out of a 155.7 ac lease
Gebert #2                           Barnett Shale        WW          Producing              40  Denton           0.8%      0.585764%
40 acres out of a 155.7 ac lease
Gebert #3                           Barnett Shale        WW          Producing              40  Denton           0.8%      0.585764%
40 acres out of a 155.7 ac lease
Gebert #4                           Barnett Shale        WW          Producing            35.7  Denton           0.8%      0.585764%
35.7 acres out of a 155.7 ac
 lease
Kendall-Stephens #1                 Barnett Shale        WW          Producing           42.11  Denton           0.1%        0.0745%
42.11 acres out of a 146.23 ac
 lease
Kendall-Stephens #3                 Barnett Shale        WW          Producing           40.02  Tarrant        0.725%      0.540125%
40.02 acres out of a 146.23 ac
 lease
Kendall-Stephens #4                 Barnett Shale        WW          Producing          24.083  Tarrant          0.1%        0.0745%
24.083 acres out of a 146.23 ac
 lease
Nelson-Hyde #1                      Barnett Shale        WW          Producing              40  Denton         0.725%       0.54375%
40 acres out of a 60 ac lease
Nelson-Hyde #2                      Barnett Shale        WW          Producing              20  Denton         0.725%       0.54375%
20 acres out of a 60 ac lease
Oates-Star #1                       Barnett Shale        WW          Producing              40   Wise            0.1%         0.071%
40 acres out of a 207.5 ac lease
Oates-Star #2                       Barnett Shale        WW          Producing              40   Wise            0.1%         0.074%
40 acres out of a 207.5 ac lease
RSK-Star #1                         Barnett Shale        WW          Producing              40   Wise           0.75%        0.5325%
40 acres out of a 267 ac lease
RSK-Star #2                         Barnett Shale        WW          Producing              40   Wise           0.75%        0.5325%
40 acres out of a 267 ac lease
RSK-Star #3                         Barnett Shale        WW          Producing              40   Wise            0.1%         0.071%
40 acres out of a 267 ac lease
RSK-Star #4                         Barnett Shale        WW          Producing              40   Wise            0.1%         0.071%
40 acres out of a 267 ac lease
Sotel #1                            Barnett Shale        WW          Producing          44.541  Tarrant          0.1%     0.0743031%
Wiggins #1                          Barnett Shale        WW          Producing           40.12  Tarrant         0.73%       0.53513%
40.12 acres out of a 77.921 ac
 lease
Wiggins #2                          Barnett Shale        WW          Producing          37.801  Tarrant          0.1%        0.07447
37.801 acres out of a 77.921 ac
 lease
Yorlum #1                           Barnett Shale        WW          Producing            41.9  Denton          0.73%        0.5402%
Yorlum #2                           Barnett Shale        WW          Producing          45.199  Denton           0.1%         0.074%
Summers #1                          Barnett Shale        TM          Producing          88.445  Tarrant          1.0%          0.75%
Baker #1                            Barnett Shale        TM          Producing          125.06  Denton           1.0%          0.75%
Strain 1H                           Barnett Shale        AE          Producing          131.23  Parker           0.5%         0.375%
Crawford Edwards 1H                 Barnett Shale        AE          Producing          220.17  Parker           0.5%         0.375%
Floyd 1H                            Barnett Shale        AE          Producing           226.0  Parker           0.5%         0.375%
Dalton Miller #1H                   Barnett Shale        AE          Producing           226.0  Parker           0.5%         0.375%
Salmon & Zimmerer leases            Barnett Shale        AE          Drillsite             133  Denton           1.0%          0.74%
     Carried WI during drilling
      & completion
JMK #1                               U. Vicksburg        MP          Producing                   Starr                       1% ORRI
Panther -Sunoco Barnett Shale
 Pipeline - 1.625 Units                               Panther        Tested                     Bosque         1.625%
Vehicles:
     Hummer H2 2006 -
      VIN 5GRGN23U06H100764
     Ford F-150 2001 -
      VIN 1FTRW08L71KE66129
Office furniture - Lago Vista &
 Woodlands Offices

<PAGE>

B) LIST OF ASSETS - STAR OF
    TEXAS MINERAL RESOURCES, LLC
Property                                 Zone         Operator        Status         Acres      County     WI%            NRI%
--------                                 ----         --------        ------         -----      ------     ---            ----
   14 Mineral Leases                Barnett Shale    Star of TX      Undrilled        7229.202  Bosque &   11.917957%     9.2960064%
                                                                                                Hamilton
   Young, Miles, etal Lease         Barnett Shale    Star of TX      Undrilled          107.41   Wise       23.35910%     18.220098%
   M. Waller Lease                  Barnett Shale    Star of TX      Undrilled           48.08  Parker      23.35910%     18.220098%
Mooney #1H - Overriding Royalty     Barnett Shale    Star of TX    Ready to frac         53.57  Parker                      0.46718%
Pritchard #1H - Overriding
 Royalty                            Barnett Shale    Star of TX    Ready to frac         100.5  Parker                         0.64%
Boecker-Star #1H - Overriding
 Royalty                            Barnett Shale       CRZO       Ready to frac         149.5  Parker                      0.23359%
4H Ranch #1H - API# 42-251-30633    Barnett Shale       CRZO         Producing          181.17  Johnson          1.5%       1.10988%
Haller Unit #1H -
 API# 42-217-30419                  Barnett Shale       CRZO         Producing          290.56   Hill              NA       2.50212%

<PAGE>

C) LIST OF ASSETS - BARNETT
                    HOLDING, LLC
Property                                              Operator        Status         Acres      County     WI%            NRI%
--------                                              --------        ------         -----      ------     ---            ----
Panther -Sunoco Barnett Shale
 Pipeline - 3.375 Units                                Panther        Tested           NA       Bosque         3.375%

<PAGE>

D) LIST OF ASSETS - HYDRO-FX, INC.
Property                                              Operator        Status         Acres      County     WI%            NRI%
--------                                              --------        ------         -----      ------     ---            ----
Hydro-FX #1 Commercial Disposal                       Hydro-FX       Deepening            41.7   Wise          5.570%
 Well (includes surface estate)

</TABLE>

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