Document:

Unassociated Document

    Exhibit
      10.3

    Equity
      Transfer Agreement 

     

    of
      

     

    Qingdao
      Sinogas Yuhan Chemical Equipment Co., Ltd. 

     

    
      	Assignor:	
              Qingdao
                Kangtai Machinery Equipment Manufacture Co., Ltd. (hereinafter referred
                to
                as Party A)

            

    

    
      	Assignor:	
              Shi
                Guili (hereinafter referred to as Party B)

            

    

    
      	Assignee:	
              Qingdao
                Sinogas General Machinery Limited Corporation (hereinafter referred
                to as
                Party C)

            

    

    
      	Assignee:	
              Sinoenergy
                Holding Limited (hereinafter referred to as Party
                D)

            

    

    

    In
      view
      of these facts:

    
      	
              1.

            	
              Qingdao
                Sinogas Yuhan Chemical Equipment Co., Ltd. (hereinafter referred
                to as
                Yuhan) is a domestic-funded
                company founded by party A, party B and Party C. Party A holds 20%
                of the
                share of Yuhan, Party B holds 25% of the share Yuhan, and Party C
                holds
                55% of the share Yuhan.

            

    

    

    
      	
              2.

            	
              Party
                A and Party B intend to transfer the share they hold to Party C and
                Party
                D. And Party C and Party D intend to accept the share of Yuhan held
                by
                Party A and Party B.

            

    

    

    After
      negotiation, the four parties
      have
      agreed to enter into this agreement, which they will follow
      altogether.

    
      	
              1.

            	
              Party
                A agrees to transfer the 20% share of Yuhan
                in according to the provisions of the agreement to Party C. Party
                C agrees
                to accept the share in according to the provisions of the agreement.
                The
                share transferring payment is $1,125,000 US dollars (9 million RMB).
                Party
                B
                agrees to transfer the 25% share of Yuhan
                in according to the provisions of the agreement to Party D. Party
                D agrees
                to accept the share in according to the provisions of the agreement.
                The
                share transferring payment is $375,000 US dollars (3 million RMB).
                Party
                A, Party B and Party C confirm to give up the right of pre-emption.

            

    

    

    
      	
              2.

            	
              Share
                transfer is conducted by phases:

            

    

    
      	
              1)

            	
              The
                first phase:

            

    

    Party
      C
      should pay the share transferring fee of $375,000 US dollars to Party B by
      the
      end of July, 2006. After Party C pays the share transferring fee, the four
      parties (Party A, Party B, Party C and Party D) will go through the relative
      examination, approval and registration procedure regarding share transferring
      and Yuhan will change from a domestic-funded
      company into a Sino-Foreign
      Joint Equity Venture.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    The
      four
      parties (Party A, Party B, Party C and Party D) agree to transfer the daily
      management of Yuhan to Party C gradually. In case of Party D fails to pay the
      share transferring fee to Party B by the due date due to objective causes,
      the
      transferring deadline of the daily management of Yuhan should be put off in
      turn.

    

    
      	
              2)

            	
              Party
                C pays the share transferring fee of $500,000 US dollars (4 million
                RMB)
                to Party A by the end of September, 2006. Party A transfers 10% of
                the
                share of Yuhan to Party C as consideration. After Party C pays all
                of the
                transferring fees, the four parties (Party A, Party B, Party C and
                Party
                D) will go through the relative examination, approval and registration
                procedure regarding share
                transferring.

            

    

    

    
      	
              3)

            	
              Party
                C pays the share transferring fee of $625,000 US dollars (5 million
                RMB)
                to Party A by the end of September, 2008. Party A transfers the remaining
                10% of the share of Yuhan to Party C as consideration. After Party
                C pays
                all of the transferring fees, the four parties (Party A, Party B,
                Party C
                and Party D) will go through the relative examination, approval and
                registration procedure regarding share
                transferring.

            

    

    

    
      	
              4)

            	
              Considering
                that the transferring is conducted in phases, each party agrees to
                sign
                share transferring agreement in each stage to reflect new share structure,
                in order to go through the relative examination, government approval
                and
                registration procedure regarding share transferring. The share
                transferring agreements in each phase are components of this
                agreement.

            

    

    

    Each
      party agrees that Party A and Yuhan enter into a strategic partnership.
      Party A will give his hearty
      supports to Yuhan in market, performance and listing. Party A and Party B agree
      that Party C and Party D have priority to consider purchasing all the land,
      factories and equipments of Party A in ChenYang Economic Development Zone before
      Party A sells to others. The purchase price should be less than $5 million
      US
      dollars (40 million RMB).

    

    
      	
              5)

            	
              As
                regarding to the undistributed
                profit of Yuhan between the July, 2005 to May 31th, 2006, and the
                current
                funds Party A has invested in Yuhan, after deducting the historical
                arrear, the remaining part will be paid to Party A by the end of
                December,2006 in two times, each
                50%.

            

    

    

    
      	
              6)

            	
              Party
                A and Party B promised that after finishing the share transferring
                of
                first phase, Party A and Party B and their relative shareholders
                promise
                that the business orders they receive will not conflict with Party
                C. If
                the orders receive by Party A conflict with that of Party C, Party
                A
                agrees that the contract be signed by Party C and be manufactured
                by Party
                A, and after calculating the costs, Party C will pay all the profits
                to
                Party A in the form of rent fees.

            

    

    

    
      	
              7)

            	
              Party
                A promises that all the managing, operating and technical staff of
                Yuhan
                (not including quitting job due to personal reasons, but party A
                should
                not recruit the corresponding new employees )except Shi Guiqiang,
                Li
                Zuoxian should stay in their posts, to ensure the normal operation
                and
                continual normal management.

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
              8)

            	
              Party
                A, party c, Party D agrees to employ Shi Guili as the president of
                Yuhan
                for two years from the day when the fist transferring phase ended,
                with a
                salary of not less $62,500 US dollars (500,000 RMB) per year (at
                the same
                time, party A will not insist on the dividends from the day the agreement
                is signed to the end of the third share transferring
                period).

            

    

    

    
      	
              9)

            	
              As
                to the obligatory right and debts now existing in Yuhan, part A,
                and Party
                B should clear them actively. As to the part that involving both
                Part A
                and Part C, both parties should commit their best efforts and should
                the
                responsibility to keep the interest of the
                company.

            

    

    

    
      	
              10)

            	
              Party
                A promises that he will not use any capital of company to pay the
                cost for
                share transferring of each phases in order to ensure the healthy
                operation
                and continual development of the
                company.

            

    

    

    
      	
              11)

            	
              Disputes
                arising in reading to implementing the agreement and the share
                transferring agreements of various phases should be solved by negotiation.
                If the negotiation fails, any party can put it to the local
                court.

            

    

    

    
      	
              12)

            	
              Unaccomplished
                matter
                regarding this agreement, parties will negotiate at each stage and
                sign
                supplementary agreements to predetermine
                them.

            

    

    

    
      	
              13)

            	
              The
                agreement will come
                into effect from the day it is signed, in quadruplicate, and each
                party
                holds one of them.

            

    

    

    

    

    Signed
      by:

    

    Qingdao
      Kangtai Machinery Equipment Manufacture Co., Ltd. 

    

    Shi
      Guili

     

    Qingdao
      Sinogas General Machinery Limited Corporation

    

    Sinoenergy
      Holding LimitedPURCHASE
      AND SALE AGREEMENT 

    

    BETWEEN

    

    

    WYOMING
      MINERAL EXPLORATION, LLC

    

    

    

    

    AS
      SELLER

    

    

    

    

    AND

    

    

    

    

    RANCHER
      ENERGY CORP.

    

    

    

    

    AS
      BUYER

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    

    

    

    TABLE
      OF CONTENTS

    
      	
              Article
                I            
                Assets

            	
              5

            
	 	 
	
              Section
                1.01

            	
              Agreement
                to Sell and Purchase

            	
              5

            
	
              Section
                1.02

            	
              Assets

            	
              5

            
	
              Section
                1.03

            	
              Excluded
                Assets

            	
              6

            
	 	 	 
	
              Article
                II          
                Purchase
                Price

            	
              7

            
	 	 
	
              Section
                2.01

            	
              Purchase
                Price

            	
              7

            
	
              Section
                2.02

            	
              Deposit

            	
              7

            
	
              Section
                2.03

            	
              Allocated
                Values

            	
              7

            
	
              Section
                2.04

            	
              Effective
                Time

            	
              7

            
	 	 	 
	
              Article
                III          Title
                Matters

            	
              8

            
	 	 
	
              Section
                3.01

            	
              Title
                Examination Period

            	
              8

            
	
              Section
                3.02

            	
              Defensible
                Title and Permitted Encumbrances

            	
              8

            
	
              Section
                3.03

            	
              Title
                Defect

            	
              10

            
	
              Section
                3.04

            	
              Notice
                of Title Defects.

            	
              11

            
	
              Section
                3.05

            	
              Remedies
                for Title Defects.

            	
              13

            
	
              Section
                3.06

            	
              Special
                Warranty of Title

            	
              13

            
	
              Section
                3.07

            	
              Consents
                to Assignment

            	
              14

            
	
              Section
                3.08

            	
              Remedies
                for Title Benefits.

            	
              14

            
	 	 	 
	
              Article
                IV          Environmental
                Matters

            	
              15

            
	 	 
	
              Section
                4.01

            	
              Environmental
                Review.

            	
              15

            
	
              Section
                4.02

            	
              Environmental
                Definitions.

            	
              16

            
	
              Section
                4.03

            	
              Notice
                of Environmental Defects.

            	
              17

            
	
              Section
                4.04

            	
              Remedies
                for Environmental Defects.

            	
              17

            
	 	 	 
	
              Article
                V           Representations
                and Warranties of Seller

            	
              18

            
	 	 
	
              Section
                5.01

            	
              Seller’s
                Existence

            	
              18

            
	
              Section
                5.02

            	
              Legal
                Power

            	
              19

            
	
              Section
                5.03

            	
              Execution

            	
              19

            
	
              Section
                5.04

            	
              Brokers

            	
              19

            
	
              Section
                5.05

            	
              Bankruptcy

            	
              19

            
	
              Section
                5.06

            	
              Suits

            	
              19

            
	
              Section
                5.07

            	
              Royalties

            	
              19

            
	
              Section
                5.08

            	
              Taxes

            	
              19

            
	
              Section
                5.09

            	
              Contracts

            	
              20

            
	
              Section
                5.10

            	
              Liens

            	
              20

            
	
              Section
                5.11

            	
              Information

            	
              20

            

    

     

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        

      

    

     

    
      	 	 	 
	
              Article
                VI          Representations
                and Warranties of Buyer

            	
              20

            
	 	 
	
              Section
                6.01

            	
              Buyer’s
                Existence

            	
              20

            
	
              Section
                6.02

            	
              Legal
                Power

            	
              20

            
	
              Section
                6.03

            	
              Execution

            	
              20

            
	
              Section
                6.04

            	
              Brokers

            	
              20

            
	
              Section
                6.05

            	
              Bankruptcy

            	
              21

            
	
              Section
                6.06

            	
              Suits

            	
              21

            
	
              Section
                6.07

            	
              Qualifications

            	
              21

            
	
              Section
                6.08

            	
              Investment

            	
              21

            
	
              Section
                6.09

            	
              Funds

            	
              21

            
	
              Section
                6.10

            	
              Information

            	
              22

            
	 	 	 
	
              Article
                VII         Seller’s
                Conditions to Close

            	
              21

            
	 	 
	
              Section
                7.01

            	
              Representations

            	
              22

            
	
              Section
                7.02

            	
              Performance

            	
              22

            
	
              Section
                7.03

            	
              Pending
                Matters

            	
              22

            
	
              Section
                7.04

            	
              Purchase
                Price

            	
              22

            
	
              Section
                7.05

            	
              Execution
                and Delivery of the Closing Documents

            	
              22

            
	
              Section
                7.06

            	
              Consents
                and Preferential Rights to Purchase

            	
              22

            
	 	 	 
	
              Article
                VIII        Buyer’s
                Conditions to Close

            	
              22

            
	 	 
	
              Section
                8.01

            	
              Availability
                & Cost of Injected Water

            	
              22

            
	
              Section
                8.02

            	
              Hydrocarbon
                Leases

            	
              23

            
	
              Section
                8.03

            	
              Representations

            	
              22

            
	
              Section
                8.04

            	
              Performance

            	
              23

            
	
              Section
                8.05

            	
              Pending
                Matters

            	
              23

            
	
              Section
                8.06

            	
              Execution
                and Delivery of the Closing Documents

            	
              23

            
	
              Section
                8.07

            	
              Consents
                and Preferential Rights to Purchase

            	
              23

            
	 	 	 
	
              Article
                IX          Tax
                Matters

            	
              23

            
	 	 
	
              Section
                9.01

            	
              Transfer
                Taxes

            	
              23

            
	
              Section
                9.02

            	
              Ad
                Valorem and Similar Taxes

            	
              23

            
	
               

            	 	 
	
              Article
                X           The
                Closing

            	
              23

            
	 	 
	
              Section
                10.01

            	
              Time
                and Place of the Closing

            	
              23

            
	
              Section
                10.02

            	
              Adjustments
                to Purchase Price at the Closing.

            	
              24

            
	
              Section
                10.03

            	
              Closing
                Statement

            	
              24

            
	
              Section
                10.04

            	
              Actions
                of Seller at the Closing.

            	
              24

            
	
              Section
                10.05

            	
              Actions
                of Buyer at the Closing.

            	
              25

            
	
               

            	 	 
	
              Article
                XI          Termination

            	
              25

            
	 	 
	
              Section
                11.01

            	
              Right
                of Termination

            	
              25

            
	
              Section
                11.02

            	
              Effect
                of Termination

            	
              26

            
	
              Section
                11.03

            	
              Termination
                Damages.

            	
              26

            
	
              Section
                11.04

            	
              Attorneys’
                Fees, Etc

            	
              27

            

    

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	 	 
	
              Article
                XII         Post
                Closing Obligations

            	
              27

            
	 	 
	
              Section
                12.01

            	
              Allocation
                of Expense and Revenues.

            	
              27

            
	
              Section
                12.02

            	
              Final
                Accounting Statement.

            	
              28

            
	
              Section
                12.03

            	
              Further
                Cooperation

            	
              29

            
	
               

            	 	 
	
              Article
                XIII        Operation
                of the Assets

            	
              29

            
	 	 
	
              Section
                13.01

            	
              Operations
                after Execution Date

            	
              29

            
	
              Section
                13.02

            	
              Limitations
                on the Operational Obligations and Liabilities of Seller

            	
              32

            
	
              Section
                13.03

            	
              Operation
                of the Assets After the Closing

            	
              32

            
	
              Section
                13.04

            	
              Risk
                of Loss; Casualty Loss.

            	
              33

            
	
              Section
                13.05

            	
              Operatorship

            	
              34

            
	
              Section
                13.06

            	
              Transition
                Period

            	
              34

            
	 	 	 
	
              Article
                XIV       Obligations
                and Indemnification

            	
              35

            
	 	 
	
              Section
                14.01

            	
              Retained
                Obligations

            	
              35

            
	
              Section
                14.02

            	
              Assumed
                Obligations

            	
              35

            
	
              Section
                14.03

            	
              Buyer’s
                Indemnification

            	
              35

            
	
              Section
                14.04

            	
              Seller’s
                Indemnification - Third Party Non-Environmental Claims

            	
              36

            
	
              Section
                14.05

            	
              Seller’s
                Indemnification - Third Party Environmental Claims

            	
              36

            
	
              Section
                14.06

            	
              Notices
                and Defense of Indemnified Matters

            	
              36

            
	
               

            	 	 
	
              Article
                XV        Limitations
                on Representations and Warranties

            	
              37

            
	 	 
	
              Section
                15.01

            	
              Disclaimers
                of Representations and Warranties

            	
              37

            
	
              Section
                15.02

            	
              Independent
                Investigation

            	
              38

            
	
              Section
                15.03

            	
              Survival

            	
              38

            
	
               

            	 	 
	
              Article
                XVI      Dispute
                Resolution

            	
              38

            
	 	 
	
              Section
                16.01

            	
              General

            	
              38

            
	
              Section
                16.02

            	
              Senior
                Management

            	
              39

            
	
              Section
                16.03

            	
              Dispute
                by Independent Expert.

            	
              39

            
	
              Section
                16.04

            	
              Limitation
                on Arbitration

            	
              40

            
	
               

            	 	 
	
              Article
                XVII     Miscellaneous

            	
              40

            
	 	 
	
              Section
                17.01

            	
              Names

            	
              40

            
	
              Section
                17.02

            	
              Expenses

            	
              40

            
	
              Section
                17.03

            	
              Document
                Retention

            	
              40

            
	
              Section
                17.04

            	
              Entire
                Agreement

            	
              40

            
	
              Section
                17.05

            	
              Waiver

            	
              40

            
	
              Section
                17.06

            	
              Publicity

            	
              41

            
	
              Section
                17.07

            	
              Construction

            	
              41

            
	
              Section
                17.08

            	
              No
                Third Party Beneficiaries

            	
              41

            
	
              Section
                17.09

            	
              Assignment

            	
              41

            
	
              Section
                17.10

            	
              Governing
                Law

            	
              41

            
	
              Section
                17.11

            	
              Notices

            	
              41

            
	
              Section
                17.12

            	
              Severability

            	
              42

            
	
              Section
                17.13

            	
              Time
                of the Essence

            	
              42

            
	
              Section
                17.14

            	
              Counterpart
                Execution

            	
              42

            

    

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    
 

    EXHIBITS
      AND SCHEDULES

    

    Exhibit
      A
      - Subject Interests (Listing of Leases)

    Exhibit
      B
      - Wells and Interests

    Exhibit
      C
      - Allocated Values 

    Exhibit
      D
      - Assignment and Bill of Sale

    

    Schedule
      1.03 - Non-Transferable Geological and Geophysical Data

    Schedule
      3.07 - Values Allocated to Assets

    Schedule
      5.02(b) - Preferential Purchase Rights & Consents

    Schedule
      5.06 - Pending or Threatened Litigation

    Schedule
      13.04(c) - Insurance Policies

    

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    PURCHASE
      AND SALE AGREEMENT 

    

    This
      Purchase and Sale Agreement (this “Agreement”)
      is
      made and entered into this 10th
      day of
      August 2006, by and between Wyoming Mineral Exploration, LLC, a Wyoming limited
      liability company (the “Seller”),
      and
      Rancher Energy Corp., a Nevada corporation (the “Buyer”).
      Buyer
      and Seller are collectively referred to herein as the “Parties”,
      and
      are sometimes referred to individually as a “Party.”

    

    W
      I T N E S S E T H:

    

    WHEREAS,
      Seller is willing to sell to Buyer, and Buyer is willing to purchase from
      Seller, the Assets (as defined in Section 1.02), all upon the terms and
      conditions hereinafter set forth;

    

    NOW,
      THEREFORE, in consideration of the mutual benefits derived and to be derived
      from this Agreement by each Party, Seller and Buyer hereby agree as
      follows:

    

    Article
      I

    Assets

     

    Section
      1.01 Agreement
      to Sell and Purchase.
      Subject
      to and in accordance with the terms and conditions of this Agreement, Buyer
      agrees to purchase the Assets from Seller, and Seller agrees to sell the Assets
      to Buyer.

     

    Section
      1.02 Assets.
      Subject
      to Section 1.03, the term “Assets” shall mean all of Seller’s right, title and
      interest in and to:

    

    
      	 	
              (a)

            	
              the
                leasehold estates in and to the oil, gas and mineral leases described
                or
                referred to in Exhibit A (the “Leases”)
                and any overriding royalty interests in and to the lands covered
                by the
                Leases, assignments and other documents of title described or referred
                to
                in Exhibit A, all as more specifically described in Exhibit A
                (collectively, the “Subject
                Interests,”
                or singularly, a “Subject
                Interest”);

            

    

    

    
      	 	
              (b)

            	
              all
                rights incident to the Subject Interests, including, without limitation,
                (i) all rights with respect to the use and occupation of the surface
                of
                and the subsurface depths under the Subject Interests; (ii) all rights
                with respect to any pooled, communitized or unitized acreage by virtue
                of
                any Subject Interest being a part thereof, including all Hydrocarbon
                (as
                defined in Subsection (d) of this Section 1.02) production after
                the
                Effective Time (as defined in Section 2.04) attributable to the Subject
                Interests or any such pool or unit allocated to any such Subject
                Interest;

            

    

    

    
      	 	
              (c)

            	
              to
                the extent assignable or transferable, all easements, rights-of-way,
                surface leases, servitudes, permits, licenses, franchises and other
                estates or similar rights and privileges directly related to or used
                solely in connection with the Subject Interests (the “Easements”),
                including, without limitation, the Easements described or referred
                to in
                Exhibit A;

            

    

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    
 

    
      	 	
              (d)

            	
              to
                the extent assignable or transferable, all personal property, equipment,
                fixtures, inventory and improvements located on or used in connection
                with
                the Subject Interests and the Easements or with the production, treatment,
                sale, or disposal of oil, gas or other hydrocarbons (collectively,
                “Hydrocarbons”),
                byproducts or waste produced therefrom or attributable thereto, including,
                without limitation, all wells located on the lands covered by the
                Subject
                Interests or on lands with which the Subject Interests may have been
                pooled, communitized or unitized (whether producing, shut in or abandoned,
                and whether for production, injection or disposal), including, without
                limitation, the wells described in Exhibit B, wellhead equipment,
                pumps, pumping units, flowlines, gathering systems, piping, tanks,
                buildings, treatment facilities, injection facilities, disposal
                facilities, compression facilities, and other materials, supplies,
                equipment, facilities and machinery (collectively, “Personal Property”);
                

            

    

    

    
      	 	
              (e)

            	
              to
                the extent assignable or transferable, all contracts, agreements
                and other
                arrangements that directly relate to the Subject Interests, the Leases
                or
                the Easements, including, without limitation, production sales contracts,
                farmout agreements, operating agreements, service agreements and
                similar
                arrangements (collectively,
                the“Contracts”);
                

            

    

    

    
      	 	
              (f)

            	
              to
                the extent assignable or transferable, all books, records, files,
                muniments of title, reports and similar documents and materials,
                including, without limitation, lease records, well records, and division
                order records, well files, title records (including abstracts of
                title,
                title opinions and memoranda, and title curative documents related
                to the
                Assets), contracts and contract files, correspondence, that relate
                to the
                foregoing interests in the possession of, and maintained by, Seller
                (collectively, the “Records”);
                and

            

    

    

    
      	 	
              (g)

            	
              all
                geological and geophysical data relating to the Subject Interests,
                other
                than such data that is interpretive in nature or which cannot be
                transferred without the consent of or payment to any Third Party
                as
                disclosed on Exhibit A. For purposes of this Agreement, “Third
                Party”
                means any person or entity, governmental or otherwise, other than
                Seller
                or Buyer, and their respective affiliates; the term includes, but
                is not
                limited to, working interest owners, royalty owners, lease operators,
                landowners, service contractors and governmental
                agencies.

            

    

     

    Section
      1.03 Excluded
      Assets.
      Notwithstanding the foregoing, the Assets shall not include, and there is
      excepted, reserved and excluded from the sale contemplated hereby (collectively,
      the “Excluded Assets”): (a) all credits and refunds and all accounts,
      instruments and general intangibles (as such terms are defined in the Wyoming
      Uniform Commercial Code) attributable to the Assets with respect to any period
      of time prior to the Closing Date; (b) all claims of Seller for refunds of
      or
      loss carry forwards with respect to (i) ad valorem, severance, production or
      any
      other taxes attributable to any period prior to the Closing Date, (ii) income
      or
      franchise taxes, or (iii) any taxes attributable to the other Excluded Assets,
      and such other 

     

    
      
        
        

      

      
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    refunds,
      and rights thereto, for amounts paid in connection with the Assets and
      attributable to the period prior to the Closing Date, including refunds of
      amounts paid under any gas gathering or transportation agreement; (c) all
      proceeds, income or revenues (and any security or other deposits made)
      attributable to (i) the Assets for any period prior to the Closing Date, or
      (ii)
      any other Excluded Assets; (d) all of Seller’s proprietary computer software,
      technology, patents, trade secrets, copyrights, names, trademarks, logos and
      other intellectual property; (e) all of Seller’s rights and interests in
      geological and geophysical data that is interpretive in nature or which cannot
      be transferred without the consent of or payment to any Third Party as disclosed
      on Exhibit A; (f) all documents and instruments of Seller that may be protected
      by an attorney-client privilege; (g) data and other information that cannot
      be
      disclosed or assigned to Buyer as a result of confidentiality or similar
      arrangements under agreements with persons unaffiliated with Seller; (h) all
      audit rights arising under any of the Contracts or otherwise with respect to
      any
      period prior to the Closing Date or to any of the other Excluded Assets; (i)
      all
      corporate, partnership, income tax records of Seller; (j) in addition to the
      foregoing, those items, such as vehicles and
      certain equipment, supplies and office equipment, or any other items
      described on Schedule 1.03.

    

    Article
      II

    Purchase
      Price

     

    Section
      2.01 Purchase
      Price.
      The
      total consideration for the purchase, sale and conveyance of the Assets to
      Buyer
      is Buyer’s payment to Seller of the sum of $25,000,000 (the “Purchase Price”),
      as adjusted in accordance with the provisions of this Agreement. The
      adjusted
      Purchase
      Price shall be paid to Seller (or its designee) at Closing (as defined in
      Section 10.01) by means of a completed federal funds transfer to an account
      designated in writing by Seller.

     

    Section
      2.02 Deposit.
      On or
      before August 16, 2006, Buyer shall deliver to Seller a performance guarantee
      deposit in the amount of ten percent
      (10%) of
      the Purchase Price (the “Deposit”). The Deposit shall be paid by Buyer to Seller
      by means of a completed federal funds transfer to an interest bearing account
      of
      Seller, Account No. 836 898 478, at First Interstate Bank, Casper, ABA
      Routing Number 092 901 683. The Deposit shall bear interest from
      the
      date the Deposit is received by Seller’s Bank until the Closing Date (as defined
      in Section 10.01), or such other date as otherwise provided in this Agreement.
      

     

    Section
      2.03 Allocated
      Values.
      The
      Purchase Price is allocated among the Assets as set forth in Exhibit C attached
      hereto (the “Allocated Values”). Seller and Buyer agree that the Allocated
      Values shall be used to compute any adjustments to the Purchase Price pursuant
      to the provisions of Article III and Article IV. 

     

    Section
      2.04 Effective
      Time.
      If the
      transactions contemplated hereby are consummated in accordance with the terms
      and provisions hereof, the ownership of the Assets shall be transferred from
      Seller to Buyer on the Closing Date, and shall be deemed effective as of 7:00
      a.m. local time where the Assets are located on November 30, 2006 (the
“Effective Time”).

    

    
      
        
        

      

      
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    Article
      III

    Title
      Matters

     

    Section
      3.01 Title
      Examination Period.
      Following the date this Agreement is
      executed and delivered by Seller and Buyer (the “Execution Date”) until October
      30, 2006 at 5:00 p.m Mountain Time (the “Title Examination Period”), Seller
      shall permit Buyer and/or its representatives to examine, at all reasonable
      times and upon reasonable notice, in Seller’s offices, all abstracts of title,
      title opinions, title files, ownership maps, lease files, contract files,
      assignments, division orders, operating and accounting records and agreements
      pertaining to the Assets insofar as same may now be in existence and in the
      possession of Seller, subject to such restrictions on disclosure as may exist
      under confidentiality agreements or other agreements binding on Seller or such
      data. “Business Days” means all calendar days excluding Saturdays, Sundays and
      U.S. legal holidays.

     

    Section
      3.02 Defensible
      Title and Permitted Encumbrances.
      For
      purposes of this Agreement, the term “Defensible Title” means, with respect to a
      given Asset, such ownership by Seller in such Asset that, subject to and except
      for the Permitted Encumbrances (as defined in Subsection (c) of this Section
      3.02):

    

    
      	 	
              (a)

            	
              entitles
                Seller to receive not less than the percentage set forth in Exhibit
                A as
                Seller’s “Net
                Revenue Interest”
                of all Hydrocarbons produced, saved and marketed from each leasehold
                property as set forth in Exhibit A; and

            

    

    

    
      	 	
              (b)

            	
              is
                free and clear of all liens and encumbrances in
                title.

            

    

    

    
      	 	
              (c)

            	
              The
                term “Permitted Encumbrances” shall mean any of the following matters to
                the extent the same are valid and subsisting and affect the
                Assets:

            

    

    

    
      	 	
              (i)

            	
              the
                Leases, and Contracts;

            

    

    

    
      	 	
              (ii)

            	
              any
                (A) undetermined or inchoate liens or charges constituting or securing
                the
                payment of expenses that were incurred incidental to the maintenance,
                development, production or operation of the Assets or for the purpose
                of
                developing, producing or processing Hydrocarbons therefrom or therein,
                and
                (B) materialman’s, mechanics’, repairman’s, employees’, contractors’,
                operators’ liens or other similar liens or charges for liquidated amounts
                arising in the ordinary course of business (1) that Seller has agreed
                to
                assume or pay pursuant to the terms hereof, or (2) for which Seller
                is
                responsible for paying or releasing at the
                Closing;

            

    

    

    
      	 	
              (iii)

            	
              any
                liens for taxes and assessments not yet delinquent or, if delinquent,
                that
                are being contested in good faith in the ordinary course of business
                and
                for which any Seller has agreed to pay pursuant to the terms hereof
                or
                which have been prorated pursuant to the terms
                hereof;

            

    

     

    
      
        
        

      

      
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              (iv)

            	
              the
                terms, conditions, restrictions, exceptions, reservations, limitations
                and
                other matters contained in (including any liens or security interests
                created by law or reserved in oil and gas leases for royalty, bonus
                or
                rental, or created to secure compliance with the terms of) the agreements,
                instruments and documents that create or reserve to Seller its interest
                in
                the Assets;

            

    

    

    
      	 	
              (v)

            	
              any
                obligations or duties affecting the Assets to any municipality or
                public
                authority with respect to any franchise, grant, license or permit
                and all
                applicable laws, rules, regulations and orders of any Governmental
                Authority (as defined in Section
                4.02(b));

            

    

    

    
      	 	
              (vi)

            	
              any
                (A) easements, rights-of-way, servitudes, permits, surface leases
                and
                other rights in respect of surface operations, pipelines, grazing,
                hunting, lodging, canals, ditches, reservoirs or the like, and (B)
                easements for streets, alleys, highways, pipelines, telephone lines,
                power
                lines, railways and other similar rights-of-way on, over or in respect
                of
                property owned or leased by Seller or over which Seller owns
                rights-of-way, easements, permits or licenses, to the extent that
                same do
                not materially interfere with the oil and gas operations to be conducted
                on the Assets;

            

    

    

    
      	 	
              (vii)

            	
              all
                lessors’ royalties, overriding royalties, net profits interests, carried
                interests, production payments, reversionary interests and other
                burdens
                on or deductions from the proceeds of production created or in existence
                as of the Effective Time, whether recorded or filed, provided that
                such
                matters do not operate to reduce the Net Revenue Interests of Seller
                below
                those set forth in Exhibit A, decrease the Working Interests of Seller
                below those set forth in Exhibit A, or increase the Working Interests
                of
                Seller above those set forth in Exhibit A without a corresponding
                increase
                in the Net Revenue Interests; 

            

    

    

    
      	 	
              (viii)

            	
              preferential
                rights to purchase or similar agreements with respect to which (A)
                waivers
                or consents are obtained from the appropriate parties for the transaction
                contemplated hereby, or (B) required notices have been given for
                the
                transaction contemplated hereby to the holders of such rights and
                the
                appropriate period for asserting such rights has expired without
                an
                exercise of such rights; 

            

    

    

    
      	 	
              (ix)

            	
              required
                Third Party consents to assignments or similar agreements with respect
                to
                which (A) waivers or consents are obtained from the appropriate parties
                for the transaction contemplated hereby, or (B) required notices
                have been
                given for the transaction contemplated hereby to the holders of such
                rights and the appropriate period for asserting such rights has expired
                without an exercise of such rights;

            

    

     

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

    
 

    
      	 	
              (x)

            	
              all
                rights to consent by, required notices to, filings with, or other
                actions
                by Governmental Authorities in connection with the sale or conveyance
                of
                oil and gas leases or interests therein that are customarily obtained
                subsequent to such sale or
                conveyance;

            

    

    

    
      	 	
              (xi)

            	
              production
                sales contracts; division orders; contracts for sale, purchase, exchange,
                refining or processing of Hydrocarbons; unitization and pooling
                designations, declarations, orders and agreements; operating agreements;
                agreements of development; area of mutual interest agreements; gas
                balancing or deferred production agreements; processing agreements;
                plant
                agreements; pipeline, gathering and transportation agreements; injection,
                repressuring and recycling agreements; carbon dioxide purchase or
                sale
                agreements; salt water or other disposal agreements; seismic or
                geophysical permits or agreements; and any and all other agreements
                that
                have terms that are ordinary and customary to the oil, gas, sulphur
                and
                other mineral exploration, development, processing or extraction
                business
                or in the business of processing of gas and gas condensate production
                for
                the extraction of products therefrom, to the extent the same do not
                reduce
                the Net Revenue Interests of Seller below those set forth in
                Exhibit A, decrease the Working Interests of Seller below those set
                forth in Exhibit A, or increase the Working Interests of Seller above
                those set forth in Exhibit A without a corresponding increase in the
                Net Revenue Interest; 

            

    

    

    
      	 	
              (xii)

            	
              rights
                reserved to or vested in any Governmental Authority to control or
                regulate
                any of the Assets and the applicable laws, rules, and regulations
                of such
                Governmental Authorities; and

            

    

    

    
      	 	
              (xiii)

            	
              all
                defects and irregularities affecting the Assets which individually
                or in
                the aggregate (A) do not operate to (1) reduce the Net Revenue Interest
                of
                Seller, (2) increase the proportionate share of costs and expenses
                of
                leasehold operations attributable to or to be borne by the Working
                Interests of Seller, (3) decrease the Working Interests of Seller
                below
                those set forth in Exhibit A, or (4) otherwise interfere materially
                with
                the operation, value or use of the Assets, or (5) that would not
                be
                considered material when applying general industry standards; or
                (B)
                operate to increase the proportionate share of costs and expenses
                of
                leasehold operations attributable to or to be borne by the Working
                Interest of Seller, so long as there is a proportionate increase
                in
                Seller’s Net Revenue Interest.

            

    

    

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

    

    Section
      3.03 Title
      Defect.
      The term
“Title Defect,” as used in this Agreement, shall mean: (a) any encumbrance,
      encroachment, or defect in or objection to Seller’s ownership of any Asset
      (expressly excluding Permitted Encumbrances) that causes Seller not to have
      Defensible Title to such Asset; or (b) any default by Seller under a lease,
      farmout agreement or other contract or agreement that would (i) have a material
      adverse affect on the operation, value or use of such Asset, (ii) prevent Seller
      from receiving the proceeds of production attributable to Seller’s interest
      therein or (iii) result in cancellation of Seller’s interest
      therein.
      The term
“Title Defect,” as used in this Agreement, shall not include: (a) Defects based
      solely on Buyer’s assertion that Seller’s files lack information, but
      information not within Seller’s files may, as provided herein, be relied upon by
      Buyer to evaluate and constitute the basis for an alleged Title Defect; (b)
      Defects in the early chain of title consisting of the failure to recite marital
      status in a document or omissions of successors of heirship or estate
      proceedings, unless Buyer provides a reasonable basis for the assertion that
      such failure or omission has resulted in a third party’s actual and superior
      claim of title to the affected Asset; (c) Defects arising out of lack of survey;
      (d) Defects arising out of lack of corporate or other entity authorization
      unless Buyer provides a reasonable basis for the assertion that the action
      was
      not authorized and that such lack of authorization results in a third party’s
      actual and superior claim of title to the affected Asset; (e) Defects that
      are
      defensible by possession under applicable statutes of limitations for adverse
      possession or for prescription; (f) title requirements customarily considered
      as
      advisory or which are customarily waived as a matter of prudent business
      judgment.

     

    Section
      3.04 Notice
      of Title Defects. 

    

    
      	 	
              (a)

            	
              If
                Buyer discovers any Title Defect affecting any Asset, Buyer shall
                notify
                Seller as promptly as possible, but no later than the expiration
                of the
                Title Examination Period of such alleged Title Defect. To be effective,
                such notice must (i) be in writing, (ii) be received by Seller prior
                to
                the expiration of the Title Examination Period, (iii) describe the
                Title
                Defect in sufficient, specific detail (including any alleged variance
                in
                the Net Revenue Interest), (iv) identify the specific Asset or Assets
                affected by such Title Defect. Any matters that may otherwise constitute
                Title Defects, but of which Seller has not been specifically notified
                by
                Buyer in accordance with the foregoing, shall be deemed to have been
                waived by Buyer for all purposes and shall constitute Permitted
                Encumbrances and Assumed Obligations hereunder.

            

    

    

    
      	 	
              (b)

            	
              Upon
                the receipt of such effective notice from Buyer, Seller and Buyer
                shall
                attempt to mutually agree on a resolution including, but not limited
                to
                (i) attempt to cure such Title Defect at any time prior to the Closing,
                (ii) exclude the affected Asset from the sale and reduce the Purchase
                Price by the mutually agreed allocated value of such affected Asset,
                or
                (iii) not take any action with respect to the alleged Title Defect
                and
                Seller shall indemnify Buyer pursuant to Section 14.04 against all
                costs
                which Buyer may incur in connection with same. As soon as possible
                after
                providing notice of any Title Defect, Buyer agrees to provide to
                Seller
                copies of all data, title opinions and other documents and information
                in
                Buyer’s possession or control that are not privileged and that bear upon
                or relate to the alleged Title Defect and Buyer’s determination of the
                Title Defect Value, and include the value of such Title Defect as
                reasonably determined by Buyer in good
                faith.

            

    

    

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

    
      	 	
              (c)

            	
              The
                value attributable to each Title Defect (the “Title Defect Value”) that is
                asserted by Buyer in the Title Defect notices shall be determined
                based
                upon the criteria set forth below:

            

    

    

    
      	 	
              (i)

            	
              If
                the Title Defect is a lien upon any Asset, the Title Defect Value
                is the
                amount necessary to be paid to remove the lien from the affected
                Asset.

            

    

    

    
      	 	
              (ii)

            	
              If
                the Title Defect asserted is that the Net Revenue Interest attributable
                to
                any Subject Interest or the Working Interest is less than that stated
                in
                Exhibit A or the Working Interest attributable to any well or unit
                is
                greater than that stated in Exhibit A, then the Title Defect Value
                shall
                be the absolute value of the number determined by the following
                formula:

            

    

    

    Title
      Defect Value = A x (1-[B/C])

    

    A
      =
      Allocated Value for the affected Asset

    

    B
      =
      Correct Net Revenue Interest for the affected Asset

    

    C
      = Net
      Revenue Interest for the affected Asset as set forth on Exhibit A

    

    
      	 	
              (iii)

            	
              If
                the Title Defect represents an obligation, encumbrance, burden or
                charge
                upon the affected Asset (including any increase in Working Interest
                for
                which there is not a proportionate increase in Net Revenue Interest)
                for
                which the economic detriment to Buyer is unliquidated, the amount
                of the
                Title Defect Value shall be determined by taking into account the
                Allocated Value of the affected Asset, the portion of the Asset affected
                by the Title Defect, the legal effect of the Title Defect, the potential
                discounted economic effect of the Title Defect over the life of the
                affected Asset, and the Title Defect Values placed upon the Title
                Defect
                by Buyer and Seller.

            

    

    

    
      	 	
              (iv)

            	
              If
                a Title Defect is not in effect or does not adversely affect an Asset
                throughout the entire productive life of such Asset, such fact shall
                be
                taken into account in determining the Title Defect
                Value.

            

    

    

    
      	 	
              (v)

            	
              The
                Title Defect Value of a Title Defect shall be determined without
                duplication of any costs or losses included in another Title Defect
                Value
                hereunder.

            

    

    

    
      
        
        

      

      
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              (vi)

            	
              Notwithstanding
                anything herein to the contrary, in no event shall a Title Defect
                Value
                exceed the Allocated Value of the wells, units or other Assets affected
                thereby.

            

    

    

    
      	 	
              (vii)

            	
              Such
                other factors as are reasonably necessary to make a proper
                evaluation.

            

    

     

    Section
      3.05 Remedies
      for Title Defects. 

    

    
      	 	
              (a)

            	
              With
                respect to each Title Defect that is not cured on or before the Closing,
                except as otherwise provided in this Section 3.05, the Purchase Price
                shall be reduced by an amount equal to the Title Defect Value agreed
                upon
                in writing by Buyer and Seller.

            

    

    

    
      	 	
              (b)

            	
              If
                any Title Defect is in the nature of an unobtained consent to assignment
                or other restriction on assignability, the provisions of Section
                3.08
                shall apply.

            

    

    

    
      	 	
              (c)

            	
              If
                on or before Closing the Parties have not agreed upon the validity
                of any
                asserted Title Defect or have not agreed on the Title Defect Value
                attributable thereto, either Party shall have the right to elect
                to have
                the validity of such Title Defect and/or such Title Defect Value
                determined by an Independent Expert pursuant to Section 16.03. If
                the
                validity of any asserted Title Defect, or the Title Defect Value
                attributable thereto, is not determined before Closing, the Purchase
                Price
                paid at Closing shall not be reduced by virtue of such disputed Title
                Defect or Title Defect Value, and upon the final resolution of such
                dispute the Title Defect Value, if any, found to be attributable
                to such
                Title Defect shall, subject to this Section, be promptly refunded
                by
                Seller to Buyer. 

            

    

    

    
      	 	
              (d)

            	
              Notwithstanding
                anything to the contrary in this Agreement, (i) if the value of a
                given
                individual Title Defect (or individual Title Benefit (as defined
                in
                Section 3.08(a))) does not exceed $25,000, then no adjustment to
                the
                Purchase Price shall be made for such Title Defect (or Title Benefit),
                (ii) if the aggregate adjustment to the Purchase Price determined
                in
                accordance with this Agreement for Title Defects (exceeding $25,000)
                does
                not exceed two per cent (2%) of the Purchase Price prior to any
                adjustments thereto, then no adjustment of the Purchase Price shall
                be
                made therefor, and (iii) if the aggregate adjustment to the Purchase
                Price
                determined in accordance with this Agreement for Title Defects (exceeding
                $25,000) does exceed two per cent (2%) of the Purchase Price prior
                to any
                adjustments thereto, then the Purchase Price shall only be adjusted
                by the
                amount of such excess.

            

    

     

    
      
        
        

      

      
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    Section
      3.06 Special
      Warranty of Title.
      Seller
      hereby agrees to warrant and defend title to the Assets solely unto Buyer
      against every person whomsoever lawfully claiming or to claim the same or any
      part thereof, by, through or under Seller, but not otherwise; subject, however,
      to the Permitted Encumbrances and the other matters set forth herein. In no
      event shall the foregoing warranty extend to or be enforceable by any party
      other than Buyer, specifically excluding Buyer’s successors and assigns in all
      or part of the Assets.

     

    Section
      3.07 Consents
      to Assignment.
      Seller
      shall use all reasonable efforts to obtain all necessary consents from third
      parties, if any, to assign the Assets prior to Closing (other than governmental
      approvals that are customarily obtained after Closing) and Buyer shall assist
      Seller with such efforts. To the extent such consents are not obtained prior
      to
      Closing and would render the assignment of some or all of the Assets void or
      voidable or give rise to a claim for damages as a result of the failure to
      obtain such consent, then such failure shall constitute a Title Defect as to
      that portion of the Assets affected thereby. In all other cases, such unobtained
      consents shall not constitute Title Defects.

     

    Section
      3.08 Remedies
      for Title Benefits.

    

    
      	 	
              (a)

            	
              If
                either Party discovers any Title Benefit during the Title Examination
                Period affecting the Assets, it shall promptly notify the other Party
                in
                writing thereof on or before the expiration of the Title Examination
                Period. Subject to Section 3.05, Seller shall be entitled to an upward
                adjustment to the Purchase Price pursuant to Section 10.02(a)(i)
                with
                respect to all Title Benefits, in an amount mutually agreed upon
                by the
                Parties. For purposes of this Agreement, the term “Title
                Benefit”
                shall mean Seller’s interest in any Subject Interest that is greater than
                or in addition to that set forth in Exhibit A (including, without
                limitation, a Net Revenue Interest that is greater than that set
                forth in
                Exhibit A) or Seller’s Working Interest in any Subject Interest that is
                less than the Working Interest set forth in Exhibit A (without a
                corresponding decrease in the Net Revenue Interest). Any matters
                that may
                otherwise constitute Title Benefits, but of which Buyer has not been
                specifically notified by Seller in accordance with the foregoing,
                shall be
                deemed to have been waived by Seller for all purposes. The Title
                Benefit
                Value shall be the absolute value of the number determined by the
                following formula:

            

    

    

    Title
      Benefit Value = A x (B/C)

    

    A
      =
      Allocated Value for the affected Asset

    

    B
      =
      Correct Net Revenue Interest for the affected Asset

    

    C
      = Net
      Revenue Interest for the affected Asset as set forth on Exhibit A

    

    
      	 	
              (b)

            	
              If
                with respect to a Title Benefit the Parties are not deemed to have
                agreed
                on the amount of the upward Purchase Price adjustment or have not
                otherwise agreed on such amount prior to the Closing Date, Seller
                or Buyer
                shall have the right to elect to have such Purchase Price adjustment
                determined by an Independent Expert pursuant to Section 16.03. If
                the
                amount of such adjustment is not determined pursuant to this Agreement
                by
                the Closing, the undisputed portion of the Purchase Price with respect
                to
                the Asset affected by such Title Benefit shall be paid by Buyer at
                the
                Closing and, subject to Section 3.05, upon determination of the amount
                of
                such adjustment, any unpaid portion thereof shall be paid by Buyer
                to
                Seller.

            

    

    

    
      
        
        

      

      
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    Article
      IV

    Environmental
      Matters

    Section
      4.01 Environmental
      Review.

    

    
      	 	
              (a)

            	
              Buyer
                shall have the right to conduct or cause a consultant (“Buyer’s
                Environmental Consultant”)
                to conduct an environmental review of the Assets following the Execution
                Date until September 15, 2006 at 5:00 p.m. Mountain Time (the
                “Environmental Examination Period”) (“Buyer’s
                Environmental Review”).
                The cost and expense of Buyer’s Environmental Review, if any, shall be
                borne solely by Buyer. Buyer shall (and shall cause Buyer’s Environmental
                Consultant to): (i) consult with Seller before conducting any work
                comprising Buyer’s Environmental Review, (ii) perform all such work in a
                safe and workmanlike manner and so as to not unreasonably interfere
                with
                Seller’s operations, and (iii) comply with all applicable laws, rules, and
                regulations. Buyer shall be solely responsible for obtaining any
                Third
                Party consents that are required in order to perform any work comprising
                Buyer’s Environmental Review, and Buyer shall consult with Seller prior
                to
                requesting each such Third Party consent. Seller shall have the right
                to
                have a representative or representatives accompany Buyer and Buyer’s
                Environmental Consultant at all times during Buyer’s Environmental Review.
                With respect to any samples taken in connection with Buyer’s Environmental
                Review, upon the request of Seller, Buyer shall take split samples,
                providing one of each such sample, properly labeled and identified,
                to
                Seller. Buyer hereby agrees to release, defend, indemnify and hold
                harmless Seller from and against all claims, losses, damages, costs,
                expenses, causes of action and judgments of any kind or character
                arising
                out of or relating to Buyer’s Environmental Review, but said
                indemnification shall exclude any claims of Seller for loss of market
                value of the Assets.

            

    

    

    
      	 	
              (b)

            	
              Unless
                otherwise required by applicable law, Buyer shall (and shall cause
                Buyer’s
                Environmental Consultant to) treat confidentially any matters revealed
                by
                Buyer’s Environmental Review and any reports or data generated from such
                review (the “Environmental
                Information”),
                and Buyer shall not (and shall cause Buyer’s Environmental Consultant to
                not) disclose any Environmental Information to any Governmental Authority
                or other Third Party without the prior written consent of Seller.
                Unless
                otherwise required by law, Buyer may use the Environmental Information
                only in connection with the transactions contemplated by this Agreement
                and may not, directly or indirectly use the Environmental Information
                in
                any manner contrary to Seller’s interests. If Buyer, Buyer’s Environmental
                Consultant, or any Third Party to whom Buyer has provided any
                Environmental Information become legally compelled to disclose any
                of the
                Environmental Information, Buyer shall provide Seller with prompt
                notice
                sufficiently prior to any such disclosure so as to allow Seller to
                file
                any protective order, or seek any other remedy, as it deems appropriate
                under the circumstances. If this Agreement is terminated prior to
                the
                Closing, Buyer shall deliver the Environmental Information to Seller,
                which Environmental Information shall become the sole property of
                Seller.
                Buyer shall provide copies of the Environmental Information to Seller
                without charge.

            

    

     

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

    Section
      4.02 Environmental
      Definitions. 

    

    
      	 	
              (a)

            	
              Environmental
                Defects.
                For purposes of this Agreement, the term “Environmental
                Defect”
                shall mean, with respect to any given Asset, an individual environmental
                condition that constitutes a material violation of Environmental
                Laws in
                effect as of the date of this Agreement in the jurisdiction in which
                such
                Asset is located. Environmental Defect shall not be deemed to include
                an
                environmental condition disclosed in writing to Buyer prior to the
                execution of this Agreement.

            

    

    

    
      	 	
              (b)

            	
              Governmental
                Authority.
                For purposes of this Agreement, the term “Governmental
                Authority”
                shall mean, as to any given Asset, the United States and the state,
                county, parish, city and political subdivisions in which such Asset
                is
                located and that exercises jurisdiction over such Asset, and any
                agency,
                department, board or other instrumentality thereof that exercises
                jurisdiction over such Asset.

            

    

    

    
      	 	
              (c)

            	
              Environmental
                Laws.
                For purposes of this Agreement, the term “Environmental
                Laws”
                shall mean all laws, statutes, ordinances, court decisions, rules
                and
                regulations of any Governmental Authority pertaining to the environment
                as
                may be interpreted by applicable court decisions or administrative
                orders.

            

    

    

    
      	 	
              (d)

            	
              Environmental
                Defect Value.
                For purposes of this Agreement, the term “Environmental
                Defect Value”
                shall mean, with respect to any Environmental Defect, the value,
                as of the
                Closing Date, of the estimated costs and expenses to correct such
                Environmental Defect in the most cost-effective manner reasonably
                available, consistent with Environmental Laws, taking into account
                that
                non-permanent remedies (such as mechanisms to contain or stabilize
                hazardous materials, including monitoring site conditions, natural
                attenuation, risk-based corrective action, institutional controls
                or other
                appropriate restrictions on the use of property, caps, dikes,
                encapsulation, leachate collection systems, etc.) may be the most
                cost-effective manner reasonably available.

            

    

     

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

    Section
      4.03 Notice
      of Environmental Defects. 

    

    
      	 	
              (a)

            	
              If
                Buyer discovers any Environmental Defect that materially affects
                the
                Assets, Buyer shall notify Seller prior to the expiration of the
                Environmental Examination Period of such alleged Environmental Defect.
                To
                be effective, such notice must: (i) be in writing; (ii) be received
                by
                Seller prior to the expiration of the Environmental Examination Period;
                (iii) describe the Environmental Defect in sufficient, specific detail,
                including, without limitation, (A) the written conclusion of Buyer’s
                Environmental Consultants that an Environmental Defect exists, which
                conclusion shall be reasonably substantiated by the factual data
                gathered
                in Buyer’s Environmental Review, and (B) a separate specific citation of
                the provisions of Environmental Laws alleged to be violated and the
                related facts that substantiate such violation; (iv) identify the
                specific
                Assets that are materially affected by such Environmental Defect;
                (v)
                identify the procedures recommended to correct the Environmental
                Defect,
                together with any related recommendations from Buyer’s Environmental
                Consultant; and (vi) state Buyer’s estimate of the Environmental Defect
                Value, including the basis for such estimate, for which Buyer would
                agree
                to adjust the Purchase Price in order to accept such Environmental
                Defect
                if Seller elected Section 4.04(b) as the remedy therefor.
                

            

    

    

    
      	 	
              (b)

            	
              Upon
                the receipt of such effective notice from Buyer, Seller and Buyer
                shall
                attempt to mutually agree on a resolution including, but not limited
                to,
                (i) attempt to cure such Environmental Defect at any time prior to
                the
                Closing; (ii) exclude the affected Asset from the sale and reduce
                the
                Purchase Price by the allocated value of such affected Asset; or
                (iii) not
                take any remedial action with respect to the alleged Environmental
                Defect
                and Seller agrees to indemnify Buyer pursuant to Section 14.05 against
                all
                costs which Buyer may incur in connection with
                same.

            

    

    

    
      	 	
              (c)

            	
              Any
                matters that may otherwise constitute Environmental Defects, but
                of which
                Seller has not been specifically notified by Buyer in accordance
                with the
                foregoing, together with any environmental matter that does not constitute
                an Environmental Defect, shall be deemed to have been waived by Buyer
                for
                all purposes and constitute an Assumed Obligation (as defined in
                Section
                14.02).

            

    

    

    Section
      4.04 Remedies
      for Environmental Defects. 

    

    
      	 	
              (a)

            	
              If
                any Environmental Defect described in a notice delivered in accordance
                with Section 4.03 is not cured on or before the Closing, then the
                Purchase
                Price shall be reduced by the Environmental Defect Value of such
                Environmental Defect as agreed by the
                Parties.

            

    

    

    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    

    
      	 	
              (b)

            	
              If
                Buyer and Seller have not agreed as to the validity of any asserted
                Environmental Defect, or if the Parties have not agreed on the
                Environmental Defect Value therefor, then on or before five (5) Business
                Days prior to the Closing Date either Party shall have the right
                to elect
                to have validity of the asserted Environmental Defect, and/or the
                Environmental Defect Value for such Environmental Defect, determined
                by an
                Independent Expert pursuant to Section 16.03. If the validity of
                any such
                asserted Environmental Defect or the amount of any such Environmental
                Defect Value is not determined by the Closing, the Asset affected
                by such
                disputed Environmental Defect shall be excluded from the Closing
                and the
                Purchase Price paid at Closing shall be reduced by the value allocated
                to
                that Asset. Upon resolution of such dispute, the Environmental Defect
                Value, if any, found to be attributable to such Environmental Defect
                shall, subject to this Section 4.04, be paid by Seller to Buyer and
                the
                Asset conveyed to the Buyer, if that is part of the mutually agreed
                settlement. Notwithstanding the foregoing, either party shall have
                unilateral right to exclude an Asset from the sale if the Environmental
                Defect Value exceeds the Allocated Value of the Asset(s) affected
                thereby.

            

    

    

    
      	 	
              (c)

            	
              Notwithstanding
                anything to the contrary in this Agreement, (i) if the Environmental
                Defect Value for a given individual Environmental Defect does not
                exceed
                $25,000, then no adjustment to the Purchase Price shall be made for
                such
                Environmental Defect; (ii) if the aggregate adjustment to the Purchase
                Price determined in accordance with this Agreement for Environmental
                Defects (exceeding $25,000) does not exceed two per cent (2%) of
                the
                Purchase Price prior to any adjustments thereto, then no adjustment
                of the
                Purchase Price shall be made therefore; and (iii) if the aggregate
                adjustment to the Purchase Price determined in accordance with this
                Agreement for Environmental Defects (exceeding $25,000) does exceed
                two
                per cent (2%) of the Purchase Price prior to any adjustments thereto,
                then
                the Purchase Price shall only be adjusted by the amount of such
                excess.

            

    

    

    Article
      V

    Representations
      and Warranties of Seller

    

    Each
      respective Seller represents and warrants to Buyer that:

     

    Section
      5.01 Seller’s
      Existence.
      Wyoming
      Mineral Exploration, LLC is a limited liability company duly organized and
      validly existing under the laws of the State of Wyoming and is qualified to
      conduct business in the State of Wyoming. Seller has full legal power, right
      and
      authority to carry on its business as such is now being conducted and as
      contemplated to be conducted. Seller’s headquarters and principal offices are
      all located in the State of Wyoming.

     

    
      
        
        

      

      
        -18-

        
          

        

      

      
        
        

      

    

    Section
      5.02 Legal
      Power.
      Seller
      has the legal power and right to enter into and perform this Agreement and
      the
      transactions contemplated hereby. The consummation of the transactions
      contemplated by this Agreement will not violate, nor be in conflict
      with:

    

    
      	 	
              (a)

            	
              any
                provision of Seller’s articles of organization, operating agreement or
                other governing documents;

            

    

    

    
      	 	
              (b)

            	
              except
                for any preferential purchase rights and consents to assignment disclosed
                on Schedule 5.02 to this Agreement, any material agreement or instrument
                to which Seller is a party or by which Seller is bound;
                or

            

    

    

    
      	 	
              (c)

            	
              any
                judgment, order, ruling or decree applicable to Seller as a party
                in
                interest or any law, rule or regulation applicable to
                Seller.

            

    

     

    Section
      5.03 Execution.
      The
      execution, delivery and performance of this Agreement and the transactions
      contemplated hereby are duly and validly authorized by all requisite partnership
      action on the part of Seller. This Agreement constitutes the legal, valid and
      binding obligation of Seller enforceable in accordance with its
      terms.

     

    Section
      5.04 Brokers.
      Tristone Capital LP has acted for or on behalf of Seller or any affiliate of
      Seller in connection with this Agreement or the transactions contemplated by
      this Agreement. No broker or finder is entitled to any brokerage or finder’s
      fee, or to any commission, based in any way on agreements, arrangements or
      understandings made by or on behalf of Seller or any affiliate of Seller for
      which Buyer has or will have any liabilities or obligations (contingent or
      otherwise).

     

    Section
      5.05 Bankruptcy.
      There
      are no bankruptcy, reorganization or arrangement proceedings pending, being
      contemplated by or to the knowledge of Seller threatened against
      Seller.

     

    Section
      5.06 Suits.
      There
      is no suit, action, claim, investigation or inquiry by any person or entity
      or
      by any administrative agency or Governmental Authority and no legal,
      administrative or arbitration proceeding pending or, to Seller’s knowledge,
      threatened against Seller or any affiliate of Seller or the Assets that has
      materially affected or will materially affect Seller’s ability to consummate the
      transactions contemplated herein or materially affect the title to or value
      of
      the Assets except as shown on Schedule 5.06.

     

    Section
      5.07 Royalties.
      To
      Seller’s knowledge, all rentals, royalties and other payments due under the
      Subject Interests described in Exhibit A have been paid in all material
      respects, except those amounts in suspense as described in Exhibit
      A.

     

    Section
      5.08 Taxes.
      To
      Seller’s knowledge, all ad valorem, property, production, severance, excise and
      similar taxes and assessments based on or measured by the ownership of the
      Assets or the production of Hydrocarbons or the receipt of proceeds therefrom
      that have become due and payable have been paid in all material
      respects.

     

    
      
        
        

      

      
        -19-

        
          

        

      

      
        
        

      

    

    Section
      5.09 Contracts.
      To
      Seller’s knowledge, (a) all material Contracts are in full force and effect, and
      (b) Seller is not in default with respect to any of its material obligations
      thereunder.

     

    Section
      5.10 Liens.
      Except
      for Permitted Encumbrances, the Assets will be conveyed free and clear of all
      liens, mortgages and encumbrances.

    

    Section
      5.11 Information.
      At no
      cost to Seller (except for costs which are required to be otherwise borne by
      the
      Seller under this Agreement) and upon request of Buyer, Seller will provide
      Buyer reasonable assistance to Buyer in Buyer’s evaluation of production and
      title matters related to the Assets conveyed hereunder. At no cost to Seller
      and
      upon request of Buyer, Seller will reasonably cooperate with Buyer so that
      Buyer
      may gather information concerning the operations of the South Glenrock “B” Unit
      and the East Big Muddy Unit for the period of time Seller has been the operator,
      to the extent and for the purposes of Buyer meeting its SEC requirements.
      Notwithstanding anything to the contrary contained in this Section 5.11, Seller
      shall be under no obligation to provide information or documentation that is
      subject to any legal privilege, such as the attorney-client privilege or
      work-product doctrine. 

    

    Article
      VI

    Representations
      and Warranties of Buyer

    

    Buyer
      represents and warrants to Seller that:

     

    Section
      6.01 Buyer’s
      Existence.
      Rancher
      Energy Corp. is a corporation, duly organized and validly existing under the
      laws of the State of Nevada and is qualified to conduct business in the State
      of
      Wyoming. Buyer has full legal power, right and authority to carry on its
      business as such is now being conducted and as contemplated to be conducted.
      Buyer’s headquarters and principal offices are all located in the State of
      Colorado.

     

    Section
      6.02 Legal
      Power.
      Buyer
      has the legal power and right to enter into and perform this Agreement and
      the
      transactions contemplated hereby. The consummation of the transactions
      contemplated by this Agreement will not violate, nor be in conflict
      with:

    

    
      	 	
              (a)

            	
              any
                provision of Buyer’s charter, bylaws,
                or
                other governing documents;

            

    

    

    
      	 	
              (b)

            	
              any
                material agreement or instrument to which Buyer is a party or by
                which
                Buyer is bound; or

            

    

    

    
      	 	
              (c)

            	
              any
                judgment, order, ruling or decree applicable to Buyer as a party
                in
                interest or any law, rule or regulation applicable to
                Buyer.

            

    

     

    Section
      6.03 Execution.
      The
      execution, delivery and performance of this Agreement and the transactions
      contemplated hereby are duly and validly authorized by all requisite corporate
      action on the part of Buyer. This Agreement constitutes the legal, valid and
      binding obligation of Buyer enforceable in accordance with its
      terms.

     

    Section
      6.04 Brokers.
      No
      broker or finder has acted for or on behalf of Buyer or any affiliate of Buyer
      in connection with this Agreement or the transactions contemplated by this
      Agreement. No broker or finder is entitled to any brokerage or finder’s fee, or
      to any commission, based in any way on agreements, arrangements or
      understandings made by or on behalf of Buyer or any affiliate of Buyer for
      which
      Seller has or will have any liabilities or obligations (contingent or
      otherwise).

     

    
      
        
        

      

      
        -20-

        
          

        

      

      
        
        

      

    

    Section
      6.05 Bankruptcy.
      There
      are no bankruptcy, reorganization or arrangement proceedings pending, being
      contemplated by or to the knowledge of Buyer threatened against Buyer or any
      affiliate of Buyer.

     

    Section
      6.06 Suits.
      There
      is no suit, action, claim, investigation or inquiry by any person or entity
      or
      by any administrative agency or Governmental Authority and no legal,
      administrative or arbitration proceeding pending or, to Buyer’s knowledge,
      threatened against Buyer or any affiliate of Buyer that has materially affected
      or will materially affect Buyer’s ability to consummate the transactions
      contemplated herein.

     

    Section
      6.07 Qualifications.
      Buyer
      is now, and after the Closing shall continue to be, qualified with all
      applicable Governmental Authorities to own and operate the Assets and has,
      and
      shall maintain, all necessary bonds to own and operate the Assets.

     

    Section
      6.08 Investment.
      Prior
      to entering into this Agreement, Buyer was advised by and has relied solely
      on
      its own legal, tax and other professional counsel concerning this Agreement,
      the
      Assets and the value thereof. Buyer is acquiring the Assets for its own account
      and not for distribution or resale in any manner that would violate any state
      or
      federal securities law, rule, regulation or order. Buyer understands and
      acknowledges that if any of the Assets were held to be securities, they would
      be
      restricted securities and could not be transferred without registration under
      applicable state and federal securities laws or the availability of an exemption
      from such registration.

     

    Section
      6.09 Funds.
      Buyer
      has arranged or will arrange to have available by the dates set forth herein
      sufficient funds to enable Buyer to pay in full the Deposit and Purchase Price
      as herein provided and otherwise to perform its obligations under this
      Agreement.

    

    Section
      6.10 Information.
      At no
      cost to Buyer (except for costs which are required to be otherwise borne by
      the
      Buyer under this Agreement) and upon request of Seller, Buyer will provide
      Seller with copies of all data, title opinions and other documents and
      information in Buyer’s possession or control bearing upon or relating to (a)
      alleged Title Defects, (b) Environmental Defects, and (c) Buyer’s conditions set
      forth in Sections 8.01 and 8.02, provided said information is not subject to any
      legal privilege, such as the attorney-client privilege or work-product doctrine.
      

    

    

    Article
      VII

    Seller’s
      Conditions to Close

    

    The
      obligations of Seller to consummate the transaction provided for herein are
      subject, at the option of Seller, to the fulfillment on or prior to the Closing
      Date of each of the following conditions:

     

    
      
        
        

      

      
        -21-

        
          

        

      

      
        
        

      

    

    Section
      7.01 Representations.
      The
      representations and warranties of Buyer herein contained shall be true and
      correct in all material respects on the Closing Date as though made on and
      as of
      such date.

     

    Section
      7.02 Performance.
      Buyer
      shall have performed all material obligations, covenants and agreements
      contained in this Agreement to be performed or complied with by it at or prior
      to the Closing.

     

    Section
      7.03 Pending
      Matters.
      No
      suit, action or other proceeding shall be pending or threatened that seeks
      to
      restrain, enjoin or otherwise prohibit the consummation of the transactions
      contemplated by this Agreement.

     

    Section
      7.04 Purchase
      Price.
      Buyer
      shall have delivered to Seller the Deposit and the Purchase Price, as the same
      may be adjusted hereunder, in accordance with the provisions of Article
      II.

     

    Section
      7.05 Execution
      and Delivery of the Closing Documents.
      Buyer
      shall have executed, acknowledged and delivered, as appropriate, to Seller
      all
      closing documents described in Section 10.05.

     

    Section
      7.06 Consents
      and Preferential Rights to Purchase.
      Subject
      to Section 3.07 and 3.08, all appropriate consents have been obtained and
      preferential rights to purchase have been either exercised by the preferential
      right holder or the time period for election to purchase has
      elapsed.

    

    Article
      VIII

    Buyer’s
      Conditions to Close

    

    The
      obligations of Buyer to consummate the transaction provided for herein are
      subject, at the option of Buyer, to the fulfillment on or prior to the Closing
      Date of each of the following conditions:

    

    Section
      8.01 Availability
      & Cost of Injected Water.
      Buyer
      shall have been satisfied that it will be able to obtain an adequate,
      predictable, and commercially reasonable supply of water for the Assets.
If
      Buyer
      has not specifically notified Seller of the failure of the condition set forth
      in this Section 8.01 on or before September 30, 2006, the condition set forth
      in
      this Section 8.01 shall
      be
      deemed to have been satisfied and any objections waived by Buyer for all
      purposes. 

    

    Section
      8.02 Hydrocarbon
      Leases.
      Buyer
      shall have been satisfied that the Leases that are to be part of the Assets
      cover at least a substantial part of the most likely hydrocarbon-producing
      horizons of the Assets. If Buyer has not specifically notified Seller of the
      failure of the condition set forth in this Section 8.02 on or before September
      30, 2006, the condition set forth in this Section 8.02 shall
      be
      deemed satisfied and any objections waived by Buyer for all
      purposes.

    

    Section
      8.03
      Representations.
      The
      representations and warranties of Seller herein contained shall be true and
      correct in all material respects on the Closing Date as though made on and
      as of
      such date.

    

    
      
        
        

      

      
        -22-

        
          

        

      

      
        
        

      

    

    Section
      8.04 Performance.
      Seller
      shall have performed all material obligations, covenants and agreements
      contained in this Agreement to be performed or complied with by it at or prior
      to the Closing.

    

    Section
      8.05 Pending
      Matters.
      No
      suit, action or other proceeding shall be pending or threatened that seeks
      to
      restrain, enjoin, or otherwise prohibit the consummation of the transactions
      contemplated by this Agreement.

    

    Section
      8.06 Execution
      and Delivery of the Closing Documents.
      Seller
      shall have executed, acknowledged and delivered, as appropriate, to Buyer all
      closing documents described in Section 10.04.

    

    Section
      8.07 Consents
      and Preferential Rights to Purchase.
      Subject
      to Section 3.07 and 3.08, all appropriate consents have been obtained and
      preferential rights to purchase have been either exercised by the preferential
      right holder or the time period for election to purchase has
      elapsed.

    

    Article
      IX

    Tax
      Matters

     

    Section
      9.01 Transfer
      Taxes.
      All
      sales, use or other taxes (other than taxes on gross income, net income or
      gross
      receipts) and duties, levies, recording fees or other governmental charges
      incurred by or imposed with respect to the property transfers undertaken
      pursuant to this Agreement shall be the responsibility of, and shall be paid
      by,
      Buyer.
      Notwithstanding the foregoing, if the State of Wyoming determines that State
      sales tax is due as a result of the transfer of equipment under this Agreement
      for the reason that said transfer is not part of a “bulk sale” as set forth
      under Wyo. Stat. 39-15-101(a)(vii)(M), then Seller shall bear liability for
      paying the same. 

     

    Section
      9.02 Ad
      Valorem and Similar Taxes.
      Ad
      valorem, property, severance and similar taxes and assessments based upon or
      measured by the value of the assets shall be divided or prorated between Seller
      and Buyer as of the Closing Date.  Seller shall retain responsibility for
      such taxes attributable to the period of time prior to the Closing Date and
      Buyer shall assume responsibility for the period of time from and after the
      Closing Date.  For clarification purposes, the 2006 ad valorem tax
      bill that is based on 2005 revenue proceeds will be for the account of
      Seller.  The 2007 ad valorem tax bill that is based on 2006 revenue
      proceeds will be for the account of the Buyer, prorated to the Effective Date
      between the parties. 

    

    

    Article
      X

    The
      Closing

    Section
      10.01  Time
      and Place of the Closing.
      If the
      conditions referred to in Articles VII and VIII of this Agreement have been
      satisfied or waived in writing or as otherwise provided in this Agreement,
      and
      subject to any extensions pursuant to Sections 3.04, 4.03 or 10.02,
      the
      transactions contemplated by this Agreement (the “Closing”) shall take place at
      the offices of Seller, whose address is set forth in Section 17.11 of this
      Agreement, Casper, Wyoming, or at such place designated by the parties, on
      November 30, 2006 (the “Closing Date”).

     

    
      
        
        

      

      
        -23-

        
          

        

      

      
        
        

      

    

    Section
      10.02  Adjustments
      to Purchase Price at the Closing.

    

    
      	 	
              (a)

            	
              At
                the Closing, the Purchase Price shall be increased by the following
                amounts:

            

    

    

    
      	 	
              (i)

            	
              all
                upward Purchase Price adjustments for Title Benefits determined in
                accordance with Article III;

            

    

    

    
      	 	
              (ii)

            	
              any
                other amount provided for in this Agreement or agreed upon in writing
                by
                Buyer and Seller; and

            

    

    

    
      	 	
              (iii)

            	
              an
                estimate of any and all transfer, sales, gross receipts, compensating
                use
                or similar taxes, or assessments resulting from the
                transaction.

            

    

    

    
      	 	
              (b)

            	
              At
                the Closing, the Purchase Price shall be decreased by the following
                amounts:

            

    

    

    
      	 	
              (i)

            	
              the
                Allocated Value of any Subject Interest sold prior to the Closing
                to the
                holder of a preferential right pursuant to Section
                3.07;

            

    

    

    
      	 	
              (ii)

            	
              all
                downward Purchase Price Adjustment for Title Defects and Environmental
                Defects determined in accordance with Article III and Article IV;
                

            

    

    

    
      	 	
              (iii)

            	
              any
                other amount provided for in this Agreement or agreed upon by Buyer
                and
                Seller; and

            

    

    

    
      	 	
              (iv)

            	
              the
                Deposit and any accrued interest on the
                Deposit.

            

    

    

    
      	 	
              (c)

            	
              The
                adjustments described in Sections 10.02(a) and (b) are hereinafter
                referred to as the “Purchase
                Price Adjustments.”

            

    

     

    Section
      10.03  Closing
      Statement.
      Not
      later than three (3) Business Days prior to the Closing Date, Seller shall
      prepare and deliver to Buyer a statement of the estimated Purchase Price
      Adjustments taking into account the foregoing principles (the “Statement”).
      At
      the Closing, Buyer shall pay the Purchase Price, as adjusted by the estimated
      Purchase Price Adjustments reflected on the Statement.

     

    Section
      10.04  Actions
      of Seller at the Closing.

    

    At
      the
      Closing, Seller shall:

    

    
      
        
        

      

      
        -24-

        
          

        

      

      
        
        

      

    

    
      	 	
              (a)

            	
              execute,
                acknowledge and deliver to Buyer the Assignment (as defined in Exhibit
                D
                of this Agreement) and such other instruments (in form and substance
                mutually agreed upon by Buyer and Seller) as may be reasonably necessary
                to convey the Assets to Buyer;

            

    

    

    
      	 	
              (b)

            	
              execute,
                acknowledge and deliver to Buyer letters in lieu of transfer or division
                orders directing all purchasers of production from the Subject Interests
                to make payment of proceeds attributable to such production to Buyer
                from
                and after the Closing Date as reasonably requested by Buyer prior
                to the
                Closing Date;

            

    

    

    
      	 	
              (c)

            	
              deliver
                to Buyer possession of the Assets;

            

    

    

    
      	 	
              (d)

            	
              execute
                and deliver to Buyer an affidavit attesting to its non-foreign status;
                

            

    

    

    
      	 	
              (e)

            	
              deliver
                to Buyer appropriate change of operator forms on those Assets operated
                by
                Seller; and

            

    

    

    
      	 	
              (f)

            	
              execute,
                acknowledge and deliver any other agreements provided for herein
                or
                necessary or desirable to effectuate the transactions contemplated
                hereby.

            

    

    Section
      10.05  Actions
      of Buyer at the Closing.

    

    At
      the
      Closing, Buyer shall:

    

    
      	 	
              (a)

            	
              deliver
                to Seller the Purchase Price (as adjusted pursuant to the provisions
                hereof and net of the Deposit) by wire transfer to an account designated
                in writing by Seller;

            

    

    

    
      	 	
              (b)

            	
              take
                possession of the Assets; and

            

    

    

    
      	 	
              (c)

            	
              execute,
                acknowledge and deliver the Assignment and any other agreements provided
                for herein or necessary or desirable to effectuate the transactions
                contemplated hereby.

            

    

    

    Article
      XI

    Termination

     

    Section
      11.01  Right
      of Termination.
      This
      Agreement may be terminated at any time at or prior to the Closing:

    

    
      	 	
              (a)

            	
              by
                mutual written consent of the
                Parties;

            

    

    

    
      	 	
              (b)

            	
              by
                Seller on the Closing Date if the conditions set forth in Article
                VII have
                not been satisfied in all material respects by Buyer or waived by
                Seller
                in writing by the Closing Date;

            

    

    

    
      
        
        

      

      
        -25-

        
          

        

      

      
        
        

      

    

    
      	 	
              (c)

            	
              subject
                to the objection deadline stated in Section 8.01 and Section 8.02,
                by
                Buyer on the Closing Date if the conditions set forth in Article
                VIII have
                not been satisfied in all material respects by Seller or waived by
                Buyer
                in writing by the Closing Date;

            

    

    
      	 	
              (d)

            	
              by
                Seller if the Closing shall not have occurred on or before November
                30,
                2006,
                unless the parties have otherwise mutually agreed to extend the Closing
                Date;

            

    

    

    
      	 	
              (e)

            	
              by
                either Party if any Governmental Authority shall have issued an order,
                judgment or decree or taken any other action challenging, restraining,
                enjoining, prohibiting or invalidating the consummation of any of
                the
                transactions contemplated herein;

            

    

    

    
      	 	
              (f)

            	
              by
                either Party if (i) the aggregate amount of the Purchase Price Adjustments
                agreed by the Parties or otherwise finally determined pursuant to
                this
                Agreement with respect to all uncured Title Defects (net of the aggregate
                amount of the Purchase Price Adjustments for all Title Benefits agreed
                by
                the Parties) plus (ii) the aggregate amount of the Environmental
                Defect
                Values agreed by the Parties or otherwise finally determined pursuant
                to
                this Agreement with respect to all Environmental Defects, exceeds
                fifteen
                percent (15%) percent of the Purchase Price;

            

    

    

    
      	 	
              (g)

            	
              by
                Seller if Buyer shall not have paid the Deposit amount on or before
                the
                due date as provided herein; or 

            

    

    

    
      	 	
              (h)

            	
              as
                otherwise provided herein;

            

    

    

    provided,
      however, that no Party shall have the right to terminate this Agreement pursuant
      to clause (b), (c), or (d) above if such Party is at such time in material
      breach of any provision of this Agreement.

     

    Section
      11.02  Effect
      of Termination.
      In the
      event that the Closing does not occur as a result of any Party exercising its
      right to terminate pursuant to Section 11.01, then except as set forth in
      Section 11.03, this Agreement shall be null and void and no Party shall
      have any further rights or obligations under this Agreement, except as stated
      herein, and except that nothing herein shall relieve any Party from any
      liability for any breach hereof or any liability that has accrued prior to
      the
      date of such termination.

     

    Section
      11.03  Termination
      Damages. 

    

    
      	 	
              (a)

            	
              If
                all conditions precedent to the obligations of Buyer set forth in
                Article
                VIII have been met and the transactions contemplated by this Agreement
                are
                not consummated on or before the Closing Date because of the failure
                of
                Buyer to perform any of its material obligations hereunder or the
                breach
                of any representation herein by Buyer, then in such event, Seller
                shall
                have the option to terminate this Agreement, in which case Seller
                shall
                retain (i) the Deposit and any accrued interest, (ii) intellectual
                property, data, reports of Buyer and Buyer’s agents and contractors
                related to the Big Muddy field, except to the extent said reports
                and data
                are not subject to the attorney-client or work-product privileges,
                and
                (iii) improvements, tools, equipment, and fixtures related to the
                Big
                Muddy field, all of (i) through (iii) to be deemed liquidated damages
                on
                account of Buyer’s failure to perform its obligations under this Agreement
                or Buyer’s breach of any representation under this Agreement, which remedy
                shall be the sole and exclusive remedy available to Seller for Buyer’s
                failure to perform or breach. Buyer shall also be responsible for
                paying
                the costs and expenses stated in Section 13.01(b)(ii)-(vii). Buyer
                and
                Seller acknowledge and agree that (i) Seller’s actual damages upon the
                event of such a termination are difficult to ascertain with any certainty,
                (ii) that the Deposit is a reasonable estimate of such actual damages
                and
                (iii) such liquidated damages do not constitute a
                penalty.

            

    

    

    
      
        
        

      

      
        -26-

        
          

        

      

      
        
        

      

    

    
      	 	
              (b)

            	
              If
                this Agreement is terminated under paragraphs (c), (f), or (g) of
                Section
                11.01 or by the mutual written agreement of Buyer and Seller, then
                Seller
                shall return the Deposit with accrued interest to Buyer in immediately
                available funds within three (3) Business Days after the event giving
                rise
                to such payment to Buyer. Buyer and Seller shall thereupon have the
                rights
                and obligations set forth elsewhere herein.

            

    

     

    Section
      11.04  Attorneys’
      Fees, Etc.
      If
      either Party to this Agreement resorts to legal proceedings to enforce this
      Agreement, the prevailing Party in such proceedings shall be entitled to recover
      all costs incurred by such Party, including reasonable attorneys’ fees, in
      addition to any other relief to which such Party may be entitled.
      Notwithstanding anything to the contrary in this Agreement, in no event shall
      either Party be entitled to receive any punitive, indirect or consequential
      damages unless same are a part of a Third Party claim for which a Party is
      seeking indemnification hereunder, REGARDLESS
      OF WHETHER CAUSED OR CONTRIBUTED TO BY THE SOLE, JOINT, COMPARATIVE OR
      CONCURRENT NEGLIGENCE OR STRICT LIABILITY OF THE OTHER
      PARTY.

    

    Article
      XII

    Post
      Closing Obligations

     

    Section
      12.01  Allocation
      of Expense and Revenues.

    

    
      	 	
              (a)

            	
              Provided
                that the Closing occurs, appropriate adjustments shall be made between
                Buyer and Seller so that (i) Seller will receive all proceeds from
                sales
                of Hydrocarbons that are produced and saved from and after the Execution
                Date and any other revenues arising out of the ownership or operation
                of
                the Assets from and after the Execution Date, net of all applicable
                production, severance, and similar taxes, and net of all costs and
                expenses that are incurred in the ownership or operation of the Assets
                from and after the Execution Date, including, without limitation,
                all
                drilling costs, all capital expenditures, all overhead charges under
                applicable operating or other agreements (regardless of whether Seller
                or
                an affiliate of Seller serves as operator prior to the Closing) through
                the Closing Date, and (ii) Buyer will receive all proceeds from sales
                of
                Hydrocarbons that are produced and saved after the Closing
                Date and
                any other revenues arising out of the ownership or operation of the
                Assets
                after the Closing Date, net of all applicable production, severance,
                and
                similar taxes, and net of all costs and expenses that are incurred
                in the
                ownership or operation of the Assets after the Closing
                Date.

            

    

    

    
      
        
        

      

      
        -27-

        
          

        

      

      
        
        

      

    

    
      	 	
              (b)

            	
              In
                addition to the foregoing, the Seller will be paid (i) the amount
                as of
                the Closing Date of all prepaid ad valorem, property or similar taxes
                and
                assessments based upon or measured by ownership of the Assets and
                any
                prepaid costs, including rentals and insurance premiums, insofar
                as such
                prepaid costs relate to periods of time prior to the Closing Date,
                and
                (ii) the value of all merchantable Hydrocarbons produced prior to
                the
                Closing Date but in storage above the inlet connection or upstream
                of the
                applicable sales meter on the Closing Date. Notwithstanding the foregoing,
                to the extent that the ad valorem tax liabilities of the parties
                under
                this Agreement as set forth in Section 9.02 cannot be finally determined
                by the Closing Date, the parties each agree to reconcile the ad valorem
                liability and pay or reimburse (as may be necessary) the other party
                as
                soon as said liability can be
                determined.

            

    

    

    
      	 	
              (c)

            	
              In
                addition to the foregoing, the Buyer will be paid (i) an amount equal
                to
                all unpaid ad valorem, property, production, severance and similar
                taxes
                and assessments based upon or measured by the ownership of the Assets
                that
                are attributable to periods of time prior to the Closing Date, which
                amounts shall, to the extent not actually assessed, be computed based
                on
                such taxes and assessments for the preceding tax year (such amount
                to be
                prorated for the period of Seller’s and Buyer’s ownership before and after
                the Closing Date), and (ii) an amount equal to all cash in, or
                attributable to, suspense accounts relative to the Assets for which
                Buyer
                has assumed responsibility under Section 14.02.
                Notwithstanding
                the foregoing, to the extent that the ad valorem tax liabilities
                of the
                parties under this Agreement as set forth in Section 9.02 cannot
                be
                finally determined by the Closing Date, the parties each agree to
                reconcile the ad valorem liability and pay or reimburse (as may be
                necessary) the other party as soon as said liability can be
                determined.

            

    

    

    
      	 	
              (d)

            	
              All
                amounts due under this Section 12.01 will be settled in accordance
                with
                final Accounting Statement under Section
                12.03.

            

    

     

    Section
      12.02  Final
      Accounting Statement. 

    

    
      	 	
              (a)

            	
              On
                or before sixty (60) days after the Closing Date, Seller shall prepare
                and
                deliver to Buyer a post-closing statement setting forth a detailed
                calculation of all post-Closing adjustments applicable to the period
                for
                time between the Effective Time and Closing (“Accounting Statement”).
                Buyer agrees that, if necessary, the sixty (60) day time period may
                be
                extended for an additional thirty (30) day period. The Accounting
                Statement shall include any adjustment or payment which was not finally
                determined as of the Closing Date and the allocation of revenues
                and
                expenses as determined in accordance with Section 12.01. To the extent
                reasonably required by Seller, Buyer shall assist in the preparation
                of
                the Accounting Statement. Seller shall provide Buyer such data and
                information as Buyer may reasonably request supporting the amounts
                reflected on the Accounting Statement in order to permit Buyer to
                perform
                or cause to be performed an audit. The Accounting Statement shall
                become
                final and binding upon the parties on the thirtieth (30th) day following
                receipt thereof by Buyer (the “Final Settlement Date”) unless Buyer gives
                written notice of its disagreement (a “Notice of Disagreement”) to Seller
                prior to such date. Any Notice of Disagreement shall specify in detail
                the
                dollar amount, nature and basis of any disagreement so asserted.
                If a
                Notice of Disagreement is received by Seller in a timely manner,
                then the
                Parties shall resolve the Dispute (as defined in Section 16.01) evidenced
                by the Notice of Disagreement in accordance with Article
                XVI.

            

    

    

    
      
        
        

      

      
        -28-

        
          

        

      

      
        
        

      

    

    
      	 	
              (b)

            	
              Within
                fifteen (15) Business Days after the Final Settlement Date, Seller
                shall
                pay to Buyer or Buyer shall pay to Seller in immediately available
                funds
                the net amount due. For purposes of this Agreement, the term “Final
                Statement”
                shall mean (i) the revised Statement becoming final pursuant to this
                Section, or (ii) upon resolution of any Dispute regarding a Notice
                of
                Disagreement, the revised Statement reflecting such resolutions,
                which the
                Parties shall issue, or cause the Independent Expert or arbitrators
                to
                issue, as applicable, following such resolution.
                

            

    

     

    Section
      12.03  Further
      Cooperation.
      Seller
      shall make the Records available to be picked up by Buyer at the offices of
      Seller during normal business hours within fifteen (15) Business Days after
      the
      Closing to the extent the Records are in the possession of Seller and are not
      subject to contractual restrictions on transferability. Seller shall
      have the right to retain copies of any of the Records and the rights granted
      under Section 17.03. After
      the
      Closing Date, each Party, at the request of the other and without additional
      consideration, shall execute and deliver, or shall cause to be executed and
      delivered, from time to time such further instruments of conveyance and transfer
      and shall take such other action as the other Party may reasonably request
      to
      convey and deliver the Assets to Buyer and to accomplish the orderly transfer
      of
      the Assets to Buyer in the manner contemplated by this Agreement. After the
      Closing, the Parties will cooperate to have all proceeds received attributable
      to the Assets be paid to the proper Party hereunder and to have all expenditures
      to be made with respect to the Assets be made by the proper Party
      hereunder.

    

    Article
      XIII

    Operation
      of the Assets

     

    Section
      13.01  Operations
      after Execution Date. 

    

    
      
        
        

      

      
        -29-

        
          

        

      

      
        
        

      

    

    (a) Seller
      agrees, from and after the Execution Date until Closing, except as expressly
      contemplated by this Agreement, as expressly consented to in writing by Buyer,
      or in situations wherein emergency action is taken in the face of risk to life,
      property or the environment, to:

    

    (i)
      operate the Properties in the usual, regular and ordinary manner consistent
      with
      past practice, except as stated in Section 13.01(b) or with Buyer’s prior
      written consent;

    

    (ii)
      maintain the books of account and records relating to the Properties in the
      usual, regular and ordinary manner, in accordance with the usual accounting
      practices of each such Person;

    

    (iii)
      not
      enter into a material contract, or materially amend or change the terms of
      any
      such contract that would involve individual commitments of more than $25,000
      without Buyer’s prior written consent;

    

    (iv)
      not
      plug or abandon any well located on the Properties without Buyer’s prior written
      consent;

    

    (v)
      not
      transfer, sell, mortgage, pledge or dispose of any portion of the Properties
      in
      excess of $25,000 other than the sale and/or disposal of hydrocarbons in the
      ordinary course of business and sales of equipment that is no longer necessary
      in the operation of the Properties or for which replacement equipment has been
      obtainedwithout Buyer’s prior written consent; 

    

    (vi)
      preserve in full force and effect all oil and gas leases, operating agreements,
      easements, rights-of-way, permits, licenses and agreements that relate to the
      Properties;

    

    (vii)
      submit to Buyer for prior written approval, all requests for operating or
      capital expenditures relating to the Properties that involve individual
      commitments of more than $25,000;

    

    (viii)
      work in good faith to implement Rancher’s field development program; and

    

    (ix)
      obtain Buyer's written approval prior to voting under any operating, joint
      venture, partnership or similar agreement.

    

    (b) In
      order
      to reimburse the Seller for administrative overhead expenses incurred in order
      to operate the properties in accordance with Section 13.01, and to provide
      for
      the undertaking of improvements and payment of costs and expenses for certain
      capital and operating expenses from the Execution Date to the Closing Date,
      Buyer agrees:

    

    
      
        
        

      

      
        -30-

        
          

        

      

      
        
        

      

    

    (i)
      subject to subparagraph (ii), to permit Seller to continue to extract and sell
      Hydrocarbons from the properties comprising the Leases and Subject Interests
      and
      retain any revenues generated thereby as Seller’s sole property;

    

    (ii) to
      pay
      to, or reimburse within thirty (30) days, Seller such costs as are reasonably
      incurred by Seller from the Execution Date through Closing to develop and
      maintain the lands within the Big Muddy prospect, including but not limited
      to
plugging,
      injection well work, work-overs and re-completions, purchase of equipment for
      H20 flooding, repairing pumping units and lines to increase
      production,
      unitization fees and costs, and the labor, materials and equipment supplied
      by
      Seller’s contractors associated therewith, except as hereinafter provided.
      Revenues directly generated from plugging, injection well work, work-overs
      and
      re-completions, purchase of equipment for H20 flooding, and repairing pumping
      units and lines to increase production will first be applied to pay for costs
      incurred as a result of said enumerated work, and second to pay for Buyer’s
      obligations under this Section. Notwithstanding the foregoing, Buyer shall
      not
      be liable for, and Seller shall pay, field operational expenses that are usual,
      customary and historical, including but not limited to, electrical and propane
      costs, legal and accounting fees, and contract pumping for operation of the
      Big
      Muddy field. Seller shall provide in a timely manner all information reasonably
      requested by Buyer to evaluate the costs incurred by Seller for which
      reimbursement is sought. After execution of this Agreement by Buyer, Seller
      will
      obtain Buyer’s consent prior to incurring any cost reasonably expected to exceed
      $25,000.00, and said consent shall not be unreasonably withheld.; 

    

    (iii)
      prior to the Closing Date, to contract for and commence to undertake a 3-D
      Seismic Survey of the Big Muddy field and corresponding
      interpretation;

    

    (iv)
      prior to the Closing Date, to contract for and commence to undertake an
      engineering study of the Shannon reservoir at the Big Muddy field;

    

    (v)
      subject to the Seller’s consent (which consent shall not be unreasonably
      conditioned, delayed or withheld) and subject to the recommendations of Buyer’s
      engineering firm, prior to the Closing Date, to contract for and commence to
      undertake the Shannon development program at the Big Muddy field, including
      drilling and/or reworking 5 wells and providing necessary infrastructure.
      Revenues directly generated from drilling and/or reworking the Shannon wells
      and
      providing the necessary infrastructure will first be applied to pay for costs
      incurred as a result of said enumerated work, and second to pay for Buyer’s
      obligations under this Section.; 

    

    (vi)
      prior to the Closing Date, to contract for and commence to undertake an
      engineering study of the Wall Creek reservoir at the Big Muddy field, including
      a proposed development program and estimate using a CO2 continuous flood
      program, plus operating costs and capital expenditures;

    

    
      
        
        

      

      
        -31-

        
          

        

      

      
        
        

      

    

    (vii)
      subsequent to receiving engineering, title, and environmental reports, to
      institute efforts to unitize the Shannon, Wall Creek, and Dakota formations
      within the Big Muddy field;

    

    (viii)
      to
      provide in a timely manner all information reasonably requested by Seller to
      evaluate any proposed improvement or task required of Buyer under this Section;
      and

    

    (ix)
      in
      the event Closing does not occur due to no fault of Seller, that Buyer shall
      forfeit all right, title and interest in and to the improvements and Buyer’s
      required undertakings related to the Big Muddy field, and Seller will be
      entitled to ownership and delivery of all documents, data and reports related
      to
      the Big Muddy field, whether generated by Buyer or third-parties on behalf
      of
      Buyer.

     

    Section
      13.02  Limitations
      on the Operational Obligations and Liabilities of Seller

    

    
      	 	
              (a)

            	
              From
                and after the date of execution of this Agreement and until the Closing,
                and subject to the provisions of applicable operating and other
                agreements, and further subject to the provisions of this Article
                XIII,
                Seller shall use its reasonable efforts to operate the Assets and
                use its
                reasonable efforts to cause any other operators to operate and administer
                the Assets in a manner consistent with its past practices, and shall
                carry
                on its business with respect to the Assets in substantially the same
                manner as before execution of this Agreement.

            

    

    

    Buyer
      acknowledges that Seller owns undivided interests in some or all of the Assets,
      and Buyer agrees that the acts or omissions of the other working interest owners
      shall not constitute a violation of the provisions of this Article XIII, nor
      shall any action required by a vote of working interest owners constitute such
      a
      violation so long as Seller has voted its interests in a manner that complies
      with the provisions of this Article XIII. 

    

    
      	 	
              (b)

            	
              Notwithstanding
                anything to the contrary in this Article XIII, Seller shall have
                no
                liability to Buyer for, and Buyer hereby agrees to release, defend,
                indemnify and hold harmless Seller from, the incorrect payment of
                delay
                rentals, royalties, shut-in royalties or similar payments or for
                any
                failure to pay any such payments through mistake or oversight (INCLUDING
                THOSE RESULTING FROM SELLER’S SOLE, JOINT, COMPARATIVE OR CONCURRENT
                NEGLIGENCE OR STRICT LIABILITY)
                provided that such payments relate to production months after the
                Closing
                Date. In no event shall Buyer’s remedy for any Seller’s breach of its
                obligations under this Article XIII exceed the Allocated Value of
                the
                Subject Interest affected by such
                breach.

            

    

     

    Section
      13.03  Operation
      of the Assets After the Closing.
      It is
      expressly understood and agreed that Seller shall not be obligated to continue
      operating any of the Assets following the Closing and Buyer hereby assumes
      full
      responsibility for operating (or causing the operation of) 

     

    
      
        
        

      

      
        -32-

        
          

        

      

      
        
        

      

    

     

    all
      Assets following the Closing. Seller shall make its personnel available to
      Buyer
      prior to the Closing as may be reasonably necessary to assist in the transition
      if Buyer becomes the operator. Without implying any obligation on Seller’s part
      to continue operating any Assets after the Closing, if Seller elects to continue
      to operate any Assets following the Closing at the request of Buyer or any
      Third
      Party working interest owner, due to constraints of applicable joint operating
      agreement(s), failure of a successor operator to take over operations or other
      reasonable cause, such continued operation by Seller shall be for the account
      of
      Buyer, at the sole risk, cost and expense of Buyer. Seller, as a part of the
      Assumed Obligations, is hereby released and indemnified by Buyer from all
      claims, losses, damages, costs, expenses, causes of action and judgments of
      any
      kind or character (INCLUDING
      THOSE RESULTING FROM SELLER’S SOLE, JOINT, COMPARATIVE OR CONCURRENT NEGLIGENCE
      OR STRICT LIABILITY)
      with
      respect to (a) such continued operations by Seller, (b) Buyer’s assumption of
      operations from Seller, and (c) compliance with the terms of any applicable
      joint operating agreement related to the election of a successor operator.
      Buyer
      shall conduct or cause to be conducted all operations on the Assets after
      Closing in a good and workmanlike manner and in compliance with all applicable
      laws, rules, regulations and agreements. Notwithstanding anything to the
      contrary contained herein, within five (5) Business Days after Closing, Seller
      will resign as operator of any wells within the Assets that Seller currently
      operates.

     

    Section
      13.04  Risk
      of Loss; Casualty
      Loss.

    

    
      	 	
              (a)

            	
              Subject
                to the provisions of clauses (b) and (c) of this Section, after the
                Execution Date Buyer shall assume all risk of loss with respect to,
                and
                any change in the condition of, the depreciation of personal property,
                and
                the depletion of Hydrocarbons even if caused by the watering-out
                of any
                well, the collapse of casing, or sand infiltration of
                wells.

            

    

    

    
      	 	
              (b)

            	
              Subject
                to the provisions of clauses (a), (b) and (c) of this Section, Seller
                shall assume all risk of loss with respect to, and any change in
                the
                condition of, casualty to tools, lines, tanks, and equipment prior
                to
                Closing. If after the date of this Agreement and prior to the Closing
                any
                part of the Assets shall be damaged or destroyed by fire or other
                casualty, this Agreement shall remain in full force and effect
                notwithstanding any such damage or destruction, and the Parties shall
                proceed with the transactions contemplated by this Agreement
                notwithstanding such damage or destruction, subject to the following.
                If a
                claim is submitted to Seller’s insurer, and Seller shall retain sole
                discretion whether it submit any claim, then any proceeds from insurance
                shall be applied to the repair or replacement of the damaged or destroyed
                Asset(s) and the Purchase Price shall not be reduced. If no claim
                is
                submitted or if a claim is submitted and coverage is denied, the
                Purchase
                Price shall be reduced by an amount agreed upon in writing by Buyer
                and
                Seller. If on or before Closing the Parties have not agreed upon
                the value
                on a damaged or destroyed Asset for which no claim is submitted or
                for
                which there is no coverage, either Party shall have the right to
                elect to
                have the value determined by an Independent Expert pursuant to Section
                16.03. If the value is not determined before Closing, the Purchase
                Price
                paid at Closing shall not be reduced by virtue of such disputed value,
                and
                upon the final resolution of such dispute the value, if any, shall,
                subject to this Section, be promptly refunded by Seller to Buyer.
                Notwithstanding anything to the contrary in this Agreement, (i) if
                the
                value of an individual Asset damaged or destroyed by fire or other
                casualty does not exceed $25,000, then no adjustment to the Purchase
                Price
                shall be made.

            

    

    

    
      
        
        

      

      
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              (c)

            	
              If
                after the date of this Agreement and prior to the Closing any part
                of the
                Assets shall be taken in condemnation or under the right of eminent
                domain
                or if proceedings for such purposes shall be pending or threatened,
                this
                Agreement shall remain in full force and effect notwithstanding any
                such
                destruction, taking or proceeding, or the threat thereof and the
                Parties
                shall proceed with the transactions contemplated by this Agreement
                notwithstanding such taking without reduction of the Purchase Price,
                but
                subject to the following. In the event of any taking described in
                this
                subsection, at the Closing, Seller shall pay to Buyer all sums paid
                to
                Seller by third parties by reason of the taking of such Assets (up
                to the
                Allocated Value thereof), including any sums paid pursuant to any
                policy
                or agreement of insurance or indemnity, and shall assign, transfer
                and set
                over unto Buyer all of the rights, title and interest of Seller in
                and to
                any claims, causes of action, unpaid proceeds or other payments from
                third
                parties arising out of such taking (up to the Allocated Value
                thereof).

            

    

    

    
      	 	
              (d)

            	
              Other
                than policies that are listed on Schedule 13.04, Seller shall not
                be
                obligated to carry or maintain, and shall have no obligation or liability
                to Buyer for its failure to carry or maintain, any insurance coverage
                with
                respect to any of the Assets. 

            

    

     

    Section
      13.05  Operatorship.
      Within
      fifteen (15) Business Days after Closing, Seller will send out notifications
      of
      its resignation as operator for all wells Seller currently operates and is
      selling to Buyer pursuant to this Agreement. Except as specifically stated
      in
      this Section 13.05, Seller makes no representation and/or warranty to Buyer
      as
      to the transferability or assignability of operatorship of such wells. Buyer
      acknowledges that the rights and obligations associated with such wells are
      governed by applicable agreements and that operatorship will be determined
      by
      the terms of those agreements.
      As of
      the Closing Date, all wells Seller is operating will be assigned or transferred
      to the Buyer at Closing. There are, as of the Execution Date, no wells that
      are
      operated by Seller that cannot be transferred to Buyer at Closing.

     

    Section
      13.06  Transition
      Period.
      The
      parties may enter a Transition Services Agreement containing mutually agreeable
      terms under which, following Closing, Seller would continue the physical
      operations of the Subject Interests.

    

    
      
        
        

      

      
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    Article
      XIV

    Obligations
      and Indemnification

     

    Section
      14.01  Retained
      Obligations.
      Provided that the Closing occurs, for a period of one (1) year from Closing,
      and
      not thereafter, Seller shall retain (a) all obligations and liabilities of
      Seller for the payment or improper payment of royalties, rentals and other
      similar payments under the Leases relating to the Subject Interests accruing
      prior to the Closing Date; (b) subject to Buyer’s obligations set forth in
      Section 13.01(b), all obligations of Seller under the Contracts for (i) overhead
      charges related to periods prior to the Closing Date, (ii) costs and expenses
      incurred Seller prior to the Closing Date for goods and services provided prior
      to the Closing Date, and (iii) other payment obligations of Seller that accrue
      and become due prior to the Closing Date; (c) all liability of Seller to third
      parties for personal injury or death to the extent occurring prior to the
      Closing Date as a result of the Seller’s operation of the Assets; (d) ad
      valorem, property, severance and similar taxes attributable to the period of
      time prior to the Closing Date retained by Seller under Section 9.02; and (e)
      except as disclosed in Schedule 5.06, all litigation existing as of the Closing
      Date, to the extent it relates to Seller’s activities and to the extent it
      relates to the period of time prior to the Closing Date (collectively, the
      “Retained Obligations”). 

     

    Section
      14.02  Assumed
      Obligations.
      Provided that the Closing occurs, Buyer hereby assumes all duties, obligations
      and liabilities of every kind and character with respect to the Assets or the
      ownership or operation thereof (other than the Retained Obligations), whether
      attributable to periods before or after the Closing Date, including, without
      limitation, those arising out of (a) the terms of the Easements, Contracts,
      Leases, Personal Property or Subject Interests comprising part of the Assets,
      (b) suspense accounts, (c) ad valorem, property, severance and other similar
      taxes or assessments based upon or measured by the ownership of the Assets
      or
      the production therefrom, (d) the condition of the Subject Interests, regardless
      of whether such condition arose before or after the Closing Date, (e)
      obligations to properly plug and abandon or re-plug or re-abandon or remove
      wells, flowlines, gathering lines or other facilities, equipment or other
      personal property or fixtures comprising part of the Assets, (f) obligations
      to
      restore the surface of the Subject Interests and obligations to remediate or
      bring the Subject Interests into compliance with applicable Environmental Laws
      (including conducting any remediation activities that may be required on or
      otherwise in connection with activities on the Subject Interests), regardless
      of
      whether such obligations or conditions or events giving rise to such
      obligations, arose, occurred or accrued before or after the Closing Date, and
      (g) any other duty, obligation, event, condition or liability assumed by
      Buyer under the terms of this Agreement (collectively, the “Assumed
      Obligations”). 

     

    Section
      14.03  Buyer’s
      Indemnification.
      Provided that the Closing occurs, Buyer shall release, defend, indemnify and
      hold harmless Seller, its partners, and their respective officers, directors,
      employees, agents, partners, representatives, members, shareholders, affiliates,
      subsidiaries, successors and assigns (collectively, the “Seller Indemnitees”)
      from and against any and all claims, damages, liabilities, losses, causes of
      action, costs and expenses (including, without limitation, those involving
      theories of negligence or strict liability and including court costs and
      attorneys’ fees) (collectively, the “Losses”) as a result of, arising out of, or
      related to the Assumed Obligations. 

     

    
      
        
        

      

      
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    Section
      14.04 Seller’s
      Indemnification - Third Party Non-Environmental Claims.
      Provided that the Closing occurs, Seller shall release, defend, indemnify and
      hold harmless Buyer, its partners, and their respective officers, directors,
      employees, agents, representatives, members, shareholders, affiliates and
      subsidiaries (collectively, the “Buyer Indemnitees”) from and against any and
      all Third Party non-environmental claims relating to Seller’s ownership or
      operation of the Assets prior to the Closing Date as a result of, arising out
      of, or related to the Retained Obligations. Provided, however, notwithstanding
      anything to the contrary contained herein, Seller’s indemnification obligation
      under this Section 14.04 shall only apply if (a) Buyer has provided Seller
      with
      written notice claiming indemnification within thirty (30) days prior to the
      expiration of Seller’s one (1) year indemnification period stated in Section
      14.01, and (b) Buyer shall bear sole responsibility for the aggregate costs
      associated with all Third Party non-environmental claims relating to time
      periods prior to the Closing Date up to a deductible percentage of two percent
      (2%) of the Purchase Price. By the prior sentence, it is the intent that the
      Seller only be obligated to the extent of the excess of the claims above the
      deductible percentage of two percent (2%).

    

    Section
      14.05 Seller’s
      Indemnification - Third Party Environmental Claims.
      Provided that the Closing occurs, Seller shall release, defend, indemnify and
      hold harmless Buyer, its partners, and their respective officers, directors,
      employees, agents, representatives, members, shareholders, affiliates and
      subsidiaries (collectively, the Buyer Indemnitees) from and against any and
      all
      Third Party environmental claims relating to Seller’s ownership or operation of
      the Assets prior to the Closing Date
      as a
      result of, arising out of, or related to the Retained Obligations.
      Provided, however, not withstanding anything to the contrary contained herein,
      Seller’s indemnification obligation under this Section 14.05 shall only apply if
      (i) Buyer has provided Seller with written notice claiming indemnification
      within thirty (30) days prior to the expiration of Seller’s one (1) year
      indemnification period stated in Section 14.01, and (ii) Buyer shall bear sole
      responsibility for the aggregate costs associated with all Third Party
      environmental claims relating to time periods prior to the Closing Date up
      to a
      threshold percentage of two percent (2%) of the Purchase Price. By the prior
      sentence, it is the intent that the Seller only be obligated to the extent
      of
      the excess of the claims above the deductible percentage of two percent
      (2%).

     

    Section
      14.06 Notices
      and Defense of Indemnified Matters.
      

     

    (a)
      Each
      Party shall promptly notify the other Party in writing of any matter of which
      it
      becomes aware and for which it is entitled to indemnification from the other
      Party under this Agreement. Upon receipt by a Seller Indemnitee or a Buyer
      Indemnitee (each, an “Indemnified Person”) of notice of a claim, action or
      proceeding against such Indemnified Person in respect of which indemnity may
      be
      sought here-under, such Indem-nified Person shall promptly notify Seller or
      Buyer, as the case may be, with respect thereto. In addition, an Indemni-fied
      Person shall immediately notify Seller or Buyer, as the case may be, after
      any
      action is commenced (by way of service with a summons or other legal process
      giving information as to the nature and basis of the claim) against such
      Indemnified Person. 

    

    
      
        
        

      

      
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    (b)
      Seller or Buyer, as the case may be, shall be entitled to assume the de-fense
      of
      any litigation or proceeding in respect of which indemni-ty may be sought
      hereunder, including the employ-ment of counsel reason-ably satisfactory to
      the
      other party and the payment of the fees and expenses of such counsel, in which
      event, except as provided below, Seller or Buyer shall not be liable for the
      fees and expenses of any other counsel retained by any Indemnified Person in
      connection with such litigation or proceeding. In any such litiga-tion or
      proceed-ing the defense of which Seller or Buyer shall have so assumed, any
      Indemnified Person shall have the right to partici-pate in such litigation
      or
      proceeding and to retain its own counsel, but the fees and expenses of such
      counsel shall be at the expense of such Indemni-fied Person unless (i) Seller
      or
      Buyer, as the case may be, and such Indemnified Person shall have mutually
      agreed in writing to the retention of such counsel, or (ii) the named parties
      to
      any such litigation or proceeding (including any implead-ed par-ties) include
      Seller or Buyer, as the case may be, and such Indemnified Person and
      representa-tion of both parties by the same counsel would, in the opinion of
      counsel to such Indemni-fied Person, be inappropri-ate due to actual or
      potential differing inter-ests between Seller or Buyer, as the case may be,
      and
      such Indemni-fied Person. 

    

    (c)
      Seller or Buyer, as the case may be, shall not be liable for any settle-ment
      of
      any litigation or proceeding ef-fected without its written consent, but if
      settled with such consent or if there be a final judgment for the claimant
      against the Indemnified Person, Seller or Buyer, as the case may be, agrees
      to
      indem-ni-fy the Indemni-fied Person from and against any loss or liabili-ty
      by
      reason of such settle-ment or judgment. Seller or Buyer, as the case may be,
      will not settle any claim, action or proceeding in respect of which indemnity
      may be sought hereunder, whether or not any Indemnified Person is an actual
      or
      potential party to such claim, action or proceeding, without the Indemnified
      Person’s written consent, which shall not be unreasonably withheld, delayed, or
      conditioned. The provisions contained in this Section 14.06 shall remain
      opera-tive and in full force and effect regardless of the expiration or any
      termination of the Agreement.

    

    Article
      XV

    Limitations
      on Representations and Warranties

     

    Section
      15.01  Disclaimers
      of Representations and Warranties.
      The
      express representations and warranties of Seller contained in this Agreement
      are
      exclusive and are in lieu of all other representations and warranties, express,
      implied or statutory. EXCEPT
      FOR THE EXPRESS REPRESENTATIONS OF SELLER IN THIS AGREEMENT,
BUYER
      ACKNOWLEDGES THAT SELLER HAS NOT MADE, AND SELLER HEREBY EXPRESSLY DISCLAIMS
      AND
      NEGATES, AND BUYER HEREBY EXPRESSLY WAIVES, ANY REPRESENTATION OR WARRANTY,
      EXPRESS, IMPLIED, AT COMMON LAW, BY STATUTE OR OTHERWISE RELATING TO (a)
      PRODUCTION RATES, RECOMPLETION OPPORTUNITIES, DECLINE RATES, GAS BALANCING
      INFORMATION OR THE QUALITY, QUANTITY OR VOLUME OF THE RESERVES OF HYDROCARBONS,
      IF ANY, ATTRIBUTABLE TO THE ASSETS, (b) THE ACCURACY, COMPLETENESS OR
      MATERIALITY OF ANY INFORMATION, DATA OR OTHER MATERIALS (WRITTEN OR ORAL) NOW,
      HERETOFORE OR HEREAFTER FURNISHED TO BUYER BY OR ON BEHALF OF SELLER, AND (c)
      THE ENVIRONMENTAL CONDITION OF THE ASSETS. EXCEPT
      FOR THE EXPRESS REPRESENTATIONS OF SELLER IN THIS AGREEMENT,
SELLER
      EXPRESSLY DISCLAIMS AND NEGATES, AND BUYER HEREBY WAIVES, AS TO PERSONAL
      PROPERTY, EQUIPMENT, INVENTORY, MACHINERY AND FIXTURES CONSTITUTING A PART
      OF
      THE ASSETS (i) ANY IMPLIED OR EXPRESS WARRANTY OF MERCHANTABILITY, (ii) ANY
      IMPLIED OR EXPRESS 

     

    
      
        
        

      

      
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    WARRANTY
      OF FITNESS FOR A PARTICULAR PURPOSE, (iii) ANY IMPLIED OR EXPRESS WARRANTY
      OF
      CONFORMITY TO MODELS OR SAMPLES OF MATERIALS, (iv) ANY RIGHTS OF PURCHASERS
      UNDER APPROPRIATE STATUTES TO CLAIM DIMINUTION OF CONSIDERATION OR RETURN OF
      THE
      PURCHASE PRICE, (v) ANY IMPLIED OR EXPRESS WARRANTY OF FREEDOM FROM DEFECTS,
      WHETHER KNOWN OR UNKNOWN, (vi) ANY AND ALL IMPLIED WARRANTIES EXISTING UNDER
      APPLICABLE LAW, AND (vii) ANY IMPLIED OR EXPRESS WARRANTY REGARDING
      ENVIRONMENTAL LAWS, THE RELEASE OF MATERIALS INTO THE ENVIRONMENT, OR PROTECTION
      OF THE ENVIRONMENT OR HEALTH, IT BEING THE EXPRESS INTENTION OF BUYER AND SELLER
      THAT THE PERSONAL PROPERTY, EQUIPMENT, INVENTORY, MACHINERY AND FIXTURES
      INCLUDED IN THE ASSETS SHALL BE CONVEYED TO BUYER, AND BUYER SHALL ACCEPT SAME,
      AS IS, WHERE IS, WITH ALL FAULTS AND IN THEIR PRESENT CONDITION AND STATE OF
      REPAIR AND BUYER REPRESENTS TO SELLER THAT BUYER WILL MAKE OR CAUSE TO BE MADE
      SUCH INSPECTIONS WITH RESPECT TO SUCH PERSONAL PROPERTY, EQUIPMENT, INVENTORY,
      MACHINERY AND FIXTURES AS BUYER DEEMS APPROPRIATE. SELLER AND BUYER AGREE THAT,
      TO THE EXTENT REQUIRED BY APPLICABLE LAW TO BE EFFECTIVE, THE DISCLAIMERS OF
      CERTAIN WARRANTIES CONTAINED IN THIS SECTION ARE “CONSPICUOUS” DISCLAIMERS FOR
      THE PURPOSES OF ANY APPLICABLE LAW, RULE OR ORDER.

     

    Section
      15.02  Independent
      Investigation.
      Buyer
      represents and acknowledges that it is knowledgeable of the oil and gas business
      and of the usual and customary practices of producers such as Seller and that
      it
      has had (or will have prior to the Closing) access to the Assets, the officers
      and employees of Seller, and the books, records and files of Seller relating
      to
      the Assets, and in making the decision to enter into this Agreement and
      consummate the transactions contemplated hereby, Buyer has relied solely on
      the
      basis of its own independent due diligence investigation of the Assets and
      upon
      the representations and warranties made in Article V, and not on any other
      representations or warranties of Seller or any other person or
      entity.

     

    Section
      15.03  Survival.
      The
      representations, warranties, covenants and obligations of Buyer under this
      Agreement, except for the indemnification obligations set forth in Article
      XIV,
      shall indefinitely survive the Closing for a period of six (6) months from
      the
      Closing. The representations, warranties, covenants and obligations of Seller
      under this Agreement, except for the indemnification obligations set forth
      in
      Article XIV, shall survive the Closing for a period of six (6) months from
      the
      Closing.

    

    Article
      XVI

    Dispute
      Resolution

     

    Section
      16.01  General.
      Any and
      all claims, Disputes, controversies or other matters in question arising out
      of
      or relating to title issues, environmental issues, or calculation of the
      Statement or revisions thereto (all of which are referred to herein as
“Disputes” which term shall not include any other disputes claims, disputes,
      controversies or other matters in question arising under this Agreement) shall
      be resolved in the manner prescribed by this Article XVI. 

     

    
      
        
        

      

      
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    Section
      16.02  Senior
      Management.
      If a
      Dispute occurs that the senior representatives of the Parties responsible for
      the transaction contemplated by this Agreement have been unable to settle or
      agree upon within a period of fifteen (15) days after such Dispute arose, Seller
      shall nominate and commit one of its senior officers, and Buyer shall nominate
      and commit one of its senior officers, to meet at a mutually agreed time and
      place not later than thirty (30) days after the Dispute has arisen to attempt
      to
      resolve same. If such senior management have been unable to resolve such Dispute
      within a period of fifteen (15) days after such meeting, or if such meeting
      has
      not occurred within forty-five (45) days following such Dispute arising, then
      either Party shall have the right, by written notice to the other, to resolve
      the Dispute through the relevant Independent Expert pursuant
      to Section 16.03.

     

    Section
      16.03 Dispute
      by Independent Expert.

    

    
      	 	
              (a)

            	
              Each
                Party shall have the right to submit Disputes regarding title issues,
                environmental issues, damaged Assets under Section 13.04(b), or
                calculation of the Statement or revisions thereto, to an independent
                expert appointed in accordance with this Section 16.03 (each, an
                “Independent
                Expert”),
                who shall serve as the sole arbitrator, subject to the following.
                The
                Independent Expert shall be appointed by mutual agreement of the
                Parties
                from among candidates with experience and expertise in the area that
                is
                the subject of such Dispute, and failing such agreement, Buyer and
                Seller
                shall each appoint an Independent Expert with experience and expertise
                in
                the area that is the subject of such Dispute and the two Independent
                Experts will select a third Independent Expert. Disputes to be resolved
                by
                Independent Expert(s) shall be resolved in accordance with mutually
                agreed
                procedures and rules and failing such agreement, in accordance with
                the
                rules and procedures of the Wyoming Arbitration Act and the Rules
                of the
                American Arbitration Association to the extent such Rules do not
                conflict
                with such Wyoming Arbitration Act or the provisions of this Agreement
                The
                Independent Expert(s) shall be instructed by the Parties to resolve
                such
                Dispute as soon as reasonably practicable in light of the circumstances.
                The decision and award of the Independent Expert(s) shall be binding
                upon
                the Parties as an award under the Federal Arbitration Act and final
                and
                nonappealable to the maximum extent permitted by law, and judgment
                thereon
                may be entered in a court of competent jurisdiction and enforced
                by any
                Party as a final judgment of such
                court.

            

    

    

    
      	 	
              (b)

            	
              The
                charges and expenses of the Independent Expert(s) shall be shared
                equally
                by Seller and Buyer. 

            

    

    

    
      	 	
              (c)

            	
              Any
                arbitration hearing held pursuant to Section 16.03 shall be held
                in
                Casper, Wyoming.

            

    

    

    
      
        
        

      

      
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    Section
      16.04 Limitation
      on Arbitration.
      ALL
      OTHER DISAGREEMENTS, DIFFERENCES, OR DISPUTES ARISING BETWEEN SELLER AND BUYER
      UNDER THE TERMS OF THIS AGREEMENT (AND NOT COVERED BY SECTION 16.03) SHALL
      NOT
      BE SUBJECT TO ARBITRATION AND SHALL BE DETERMINED BY A WYOMING COURT OF
      COMPETENT JURISDICTION, UNLESS THE PARTIES OTHERWISE MUTUALLY AGREE.

    

    Article
      XVII

    Miscellaneous

    Section
      17.01  Names.
      As soon
      as reasonably possible after the Closing, but in no event later than 45 days
      after the Closing, Buyer shall remove the names of Seller and its affiliates,
      and all variations thereof, from all of the Assets and make the requisite
      filings with, and provide the requisite notices to, the appropriate federal,
      state or local agencies to place the title or other indicia of ownership,
      including operation of the Assets, in a name other than the name of the Seller
      or any of its affiliates, or any variations thereof.

     

    Section
      17.02  Expenses.
      Except
      as specifically provided in this Agreement, each Party shall be solely
      responsible for all expenses, including due diligence expenses, incurred by
      it
      in connection with this transaction, and neither Party shall be entitled to
      any
      reimbursement for such expenses from the other Party.

     

    Section
      17.03  Document
      Retention.
      As used
      in this Section 17.03, the term “Documents” shall mean all files, documents,
      books, records and other data delivered to Buyer by Seller pursuant to the
      provisions of this Agreement (other than those that Seller has retained either
      the original or a copy of), including, but not limited to: financial and tax
      accounting records; land, title and division of interest files; contracts;
      engineering and well files; and books and records related to the operation
      of
      the Assets prior to the Closing Date. Buyer shall retain and preserve the
      Documents for a period of no less than four (4) years following the Closing
      Date
      (or for such longer period as may be required by law or governmental
      regulation), and shall allow Seller or its representatives to inspect the
      Documents at reasonable times and upon reasonable notice during regular business
      hours during such time period. Seller shall have the right during such period
      to
      make copies of the Documents at its expense.

     

    Section
      17.04  Entire
      Agreement.
      This
      Agreement, the documents to be executed hereunder, and the exhibits attached
      hereto constitute the entire agreement between the Parties pertaining to the
      subject matter hereof and supersede all prior agreements, understandings,
      negotiations and discussions, whether oral or written, of the Parties pertaining
      to the subject matter hereof. No supplement, amendment, alteration, modification
      or waiver of this Agreement shall be binding unless executed in writing by
      the
      Parties and specifically referencing this Agreement.

     

    Section
      17.05  Waiver.
      No
      waiver of any of the provisions of this Agreement shall be deemed or shall
      constitute a waiver of any other provisions hereof (whether or not similar),
      nor
      shall such waiver constitute a continuing waiver unless otherwise expressly
      provided.

     

    
      
        
        

      

      
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    Section
      17.06  Publicity.
      Prior
      to Closing, neither Seller nor Buyer will issue any public announcement or
      press
      release concerning this transaction without the written consent of the other
      Party (except as required by law and in such case with prior written agreement
      between the Parties on the wording of the announcement or press
      release).

     

    Section
      17.07  Construction.
      The
      captions in this Agreement are for convenience only and shall not be considered
      a part of or affect the construction or interpretation of any provision of
      this
      Agreement. The Parties acknowledge that they have participated jointly in the
      negotiation and drafting of this Agreement and as such the Parties agree that
      if
      an ambiguity or question of intent or interpretation arises hereunder, this
      Agreement shall not be construed more strictly against one Party than another
      on
      the grounds of authorship. 

     

    Section
      17.08  No
      Third Party Beneficiaries.
      Except
      as provided in Sections 14.04
      and
      14.05, nothing in this Agreement shall provide any benefit to any Third Party
      or
      entitle any
      Third
      Party to any claim, cause of action, remedy or right of any kind, it being
      the
      intent of the Parties that this Agreement shall otherwise not be construed
      as a
      Third Party beneficiary contract.

     

    Section
      17.09  Assignment.
      Neither
      Party may assign or delegate any of its rights or duties hereunder without
      the
      prior written consent of the other Party and any assignment made without such
      consent shall be void. Except as otherwise provided herein, this Agreement
      shall
      be binding upon and inure to the benefit of the Parties hereto and their
      respective permitted successors, assigns and legal representatives.

     

    Section
      17.10  Governing
      Law.
      This
      Agreement, other documents delivered pursuant hereto and the legal relations
      between the Parties shall be governed and construed in accordance with the
      laws
      of the State of Wyoming, without giving effect to principles of conflicts of
      laws that would result in the application of the laws of another jurisdiction.
      The Parties agree to venue in Converse County, Wyoming.

     

    Section
      17.11 Notices.

    

    (a)
      Method.
      All
      notices and other communications provided for or permitted under this Agreement
      shall be made in writing by (i) hand-delivery, (ii) first class mail, (iii)
      telecopier, or (iv) air courier guaranteeing rapid delivery (FedEx, DHL, TNT,
      etc.) to the addresses of Seller and Buyer set forth below. 

    

    
      	
              Seller:

            	
              Wyoming
                Mineral Exploration, LLC

              139
                W. Second Street, Suite 3E        
                

              Casper,
                WY
                82601                              
                

              Fax:
                307-577-8799                                
                

            

    

     

    
      
        
        

      

      
        -41-

        
          

        

      

      
        
        

      

    

     

    
      	
              Buyer:

            	
              Rancher
                Energy Corp.        
                

              1050-17th
                Street, Suite 1700

              Denver,
                Colorado 80265      

              Fax:
                720-904-5698                
                

            

    

    

    

    (b)
      Effectiveness.
      All
      such notices and communications shall be deemed to have been duly given (i)
      at
      the time delivered by hand, if personally delivered, (ii) five (5) Business
      Days
      after being deposited in the mail, postage prepaid, if mailed, (iii) when
      receipt acknowledged, if telecopied, and (iv) when receipt acknowledged, if
      sent
      by air courier guaranteeing rapid delivery (FedEx, DHL, TNT, etc.). Either
      Party
      may, by written notice so delivered to the other Party, change its address
      for
      notice purposes hereunder.

     

    Section
      17.12 Severability.
      If any
      term or other provision of this Agreement is invalid, illegal or incapable
      of
      being enforced by any rule of law or public policy, all other conditions and
      provisions of this Agreement shall nevertheless remain in full force and effect
      and the Parties shall negotiate in good faith to modify this Agreement so as
      to
      effect their original intent as closely as possible in an acceptable manner
      to
      the end that the transactions contemplated hereby are fulfilled to the extent
      possible.

     

    Section
      17.13 Time
      of the Essence.
      Time
      shall be of the essence with respect to all time periods and notice periods
      set
      forth in this Agreement.

     

    Section
      17.14 Counterpart
      Execution.
      This
      Agreement may be executed in any number of counterparts, and each counterpart
      hereof shall be effective as to each party that executes the same whether or
      not
      all of such parties execute the same counterpart. If counterparts of this
      Agreement are executed, the signature pages from various counterparts may be
      combined into one composite instrument for all purposes. All counterparts
      together shall constitute only one Agreement, but each counterpart shall be
      considered an original.

    

    IN
      WITNESS WHEREOF, Seller and Buyer have executed and delivered this Agreement
      as
      of the date first set forth above.

     

    
      	
              SELLER:

               

              WYOMING
                MINERAL EXPLORATION, LLC

               

              By:________________________________

              Name:______________________________ 

              Title:_______________________________

            
	 
	 
	
              BUYER:

               

              RANCHER
                ENERGY CORP.

               

              By:
                /s/ John
                Works                                              
                

              Name:
                John
                Works                                              
                

              Title:
                President and
                CEO                                     
                

            

    

    

    
      
        
        

      

      
        -42-

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