Document:

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                                                                   EXHIBIT 10.15

                           PURCHASE AND SALE AGREEMENT

                                     BETWEEN

                       KINDER MORGAN PRODUCTION COMPANY LP

                                    AS SELLER

                                       AND

                          LEGACY RESERVES OPERATING LP

                                    AS BUYER

                               DATED JUNE 28, 2006

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                                TABLE OF CONTENTS

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Article I         Assets.........................................................................................1

         Section 1.01          Agreement to Sell and Purchase....................................................1

         Section 1.02          Assets............................................................................1

         Section 1.03          Excluded Assets...................................................................3

Article II        Purchase Price.................................................................................4

         Section 2.01          Purchase Price....................................................................4

         Section 2.02          Deposit...........................................................................5

         Section 2.03          Allocated Values..................................................................5

         Section 2.04          Effective Time....................................................................5

Article III       Title Matters..................................................................................5

         Section 3.01          Examination Period................................................................5

         Section 3.02          Defensible Title and Permitted Encumbrances.......................................6

         Section 3.03          Title Defects.....................................................................8

         Section 3.04          Notice of Title Defects...........................................................9

         Section 3.05          Remedies for Title Defects.......................................................10

         Section 3.06          Special Warranty of Title........................................................11

         Section 3.07          Preferential Rights To Purchase..................................................11

         Section 3.08          Consents to Assignment...........................................................12

         Section 3.09          Remedies for Title Benefits......................................................12

Article IV        Environmental Matters.........................................................................13

         Section 4.01          Environmental Review.............................................................13

         Section 4.02          Environmental Definitions........................................................14

         Section 4.03          Notice of Environmental Defects..................................................15

         Section 4.04          Remedies for Environmental Defects...............................................16

Article V         Representations and Warranties of Seller......................................................16

         Section 5.01          Seller's Existence...............................................................17

         Section 5.02          Legal Power......................................................................17

         Section 5.03          Execution........................................................................17

         Section 5.04          Brokers..........................................................................17

         Section 5.05          Bankruptcy.......................................................................17

         Section 5.06          Suits............................................................................17

         Section 5.07          Royalties........................................................................17

         Section 5.08          Taxes............................................................................18
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         Section 5.09          Contracts........................................................................18

         Section 5.10          Liens............................................................................18

Article VI        Representations and Warranties of Buyer.......................................................18

         Section 6.01          Buyer's Existence................................................................18

         Section 6.02          Legal Power......................................................................18

         Section 6.03          Execution........................................................................18

         Section 6.04          Brokers..........................................................................18

         Section 6.05          Bankruptcy.......................................................................19

         Section 6.06          Suits............................................................................19

         Section 6.07          Qualifications...................................................................19

         Section 6.08          Investment.......................................................................19

         Section 6.09          Funds............................................................................19

Article VII       Seller's Conditions to Close..................................................................19

         Section 7.01          Representations..................................................................19

         Section 7.02          Performance......................................................................19

         Section 7.03          Pending Matters..................................................................19

         Section 7.04          Purchase Price...................................................................20

         Section 7.05          Execution and Delivery of the Closing Documents..................................20

Article VIII      Buyer's Conditions to Close...................................................................20

         Section 8.01          Representations..................................................................20

         Section 8.02          Performance......................................................................20

         Section 8.03          Pending Matters..................................................................20

         Section 8.04          Execution and Delivery of the Closing Documents..................................20

Article IX        Tax Matters...................................................................................20

         Section 9.01          Transfer Taxes...................................................................20

         Section 9.02          Ad Valorem and Similar Taxes.....................................................20

         Section 9.03          Tax Deferred Exchange............................................................20

Article X         The Closing...................................................................................22

         Section 10.01         Time and Place of the Closing....................................................22

         Section 10.02         Adjustments to Purchase Price at the Closing.....................................22

         Section 10.03         Closing Statement................................................................23

         Section 10.04         Actions of Seller at the Closing.................................................23

         Section 10.05         Actions of Buyer at the Closing..................................................23
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Article XI        Termination...................................................................................24

         Section 11.01         Right of Termination.............................................................24

         Section 11.02         Effect of Termination............................................................25

         Section 11.03         Termination Damages..............................................................25

         Section 11.04         Attorneys' Fees, Etc.............................................................25

Article XII       Post Closing Obligations......................................................................26

         Section 12.01         Allocation of Expense and Revenues...............................................26

         Section 12.02         Gas Imbalances...................................................................27

         Section 12.03         Final Accounting Statement.......................................................27

         Section 12.04         Further Cooperation..............................................................28

Article XIII      Operation of the Assets.......................................................................28

         Section 13.01         Operations after Effective Time..................................................28

         Section 13.02         Limitations on the Operational Obligations and Liabilities of Seller.............29

         Section 13.03         Operation of the Assets After the Closing........................................30

         Section 13.04         Casualty Loss....................................................................30

         Section 13.05         Operatorship.....................................................................31

Article XIV       Obligations and Indemnification...............................................................31

         Section 14.01         Retained Obligations.............................................................31

         Section 14.02         Assumed Obligations..............................................................31

         Section 14.03         Buyer's Indemnification..........................................................32

         Section 14.04         Seller's Indemnification.........................................................32

         Section 14.05         Notices and Defense of Indemnified Matters.......................................33

         Section 14.06         Sole Remedy......................................................................33

         Section 14.07         Insurance and Tax Benefits.......................................................33

         Section 14.08         Express Negligence...............................................................33

Article XV        Limitations on Representations and Warranties.................................................34

         Section 15.01         Disclaimers of Representations and Warranties....................................34

         Section 15.02         Independent Investigation........................................................35

         Section 15.03         Survival.........................................................................35

         Section 15.04         Mitigation.......................................................................35

         Section 15.05         Effect of Waiver.................................................................35

         Section 15.06         Waiver of Consumer Rights........................................................35
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Article XVI       Dispute Resolution............................................................................36

         Section 16.01         General..........................................................................36

         Section 16.02         Senior Management................................................................36

         Section 16.03         Dispute by Independent Expert....................................................36

         Section 16.04         Limitation on Arbitration........................................................37

Article XVII      Miscellaneous.................................................................................37

         Section 17.01         Names............................................................................37

         Section 17.02         Expenses.........................................................................37

         Section 17.03         Document Retention...............................................................37

         Section 17.04         Entire Agreement.................................................................38

         Section 17.05         Waiver...........................................................................38

         Section 17.06         Publicity........................................................................38

         Section 17.07         Construction.....................................................................38

         Section 17.08         No Third Party Beneficiaries.....................................................38

         Section 17.09         Assignment.......................................................................38

         Section 17.10         Buyer's Obligation Independent of Financing......................................38

         Section 17.11         Governing Law....................................................................38

         Section 17.12         Notices..........................................................................39

         Section 17.13         Severability.....................................................................39

         Section 17.14         Time of the Essence..............................................................39

         Section 17.15         Counterpart Execution............................................................39
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EXHIBITS AND SCHEDULES

Exhibit A - Subject Interests (Listing of Leases)
Exhibit B - Wells, Leases, Units and Interests
Exhibit C - Allocated Values
Exhibit D - Assignment and Bill of Sale

Schedule 3.07 - Values allocated to Assets subject to Preferential Rights to
Purchase Schedule 3.08 - Consents to Assign
Schedule 12.02 - Gas Imbalances

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                           PURCHASE AND SALE AGREEMENT

         This Purchase and Sale Agreement (this "Agreement") is made and entered
into this 28th day of June, 2006, by and between Kinder Morgan Production
Company LP, a Delaware Limited Partnership (the "Seller"), and Legacy Reserves
Operating LP, a Delaware limited partnership (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 hereof), 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, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
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 and as of the
Effective Time (as defined in Section 2.04), 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
                           attached hereto (the "Leases"), whether or not all
                           lands covered by the Leases are described in Exhibit
                           A, and any overriding royalty interests, fee mineral
                           interests, royalty interests or other 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, surface
                           estates, servitudes, and other estates or similar

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                           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;

                  (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, all wells described on
                           Exhibit B attached hereto, and all 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") subject to Seller's right to retain copies
                           of the same; 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. 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.

                  (h)      all franchises, licenses, permits, approvals,
                           consents, certificates, and other authorizations and
                           rights granted by governmental authorities and all

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                           certificates of convenience or necessity, immunities,
                           privileges, grants and other rights that relate to
                           the Assets or the ownership or operation of any
                           thereof.

         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, trade credits, and general intangibles
                           (as such terms are defined in the Texas Uniform
                           Commercial Code) attributable to the Assets accruing
                           prior to the Effective Time;

                  (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 Effective Time, (ii) income or
                           franchise taxes, or (iii) any taxes attributable to
                           the other Excluded Assets, and such other refunds,
                           and rights thereto, for amounts paid in connection
                           with the Assets and attributable to the period prior
                           to the Effective Time, including refunds of amounts
                           paid under any gas gathering or transportation
                           agreement;

                  (c)      all proceeds, income, revenues or hydrocarbon
                           production (and any security or other deposits made)
                           attributable to (i) the Assets for any period prior
                           to the Effective Time, or (ii) any other Excluded
                           Assets;

                  (d)      all personal computers and associated peripherals and
                           all radio and telephone equipment and 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;

                  (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
                           Effective Time or to any of the other Excluded
                           Assets;

                  (i)      all corporate, partnership, income tax records, and
                           documents subject to legal privilege (other than
                           title);

                                      -3-
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                  (j)      all claims and causes of action of Seller (i) arising
                           from acts, omissions, or events, or damage to or
                           destruction of property, occurring prior to the
                           Effective Time, (ii) arising under or with respect to
                           any of the Contracts that are attributable to periods
                           of time prior to the Effective time (including claims
                           for adjustments or refunds), or (iii) with respect to
                           any of the Excluded Assets;

                  (k)      all rights and interests of Seller (i) under any
                           policy or agreement of insurance or indemnity, (ii)
                           under any bond, or (iii) to any insurance or
                           condemnation proceeds or awards arising, in each
                           case, from acts, omissions, or events, or damage to
                           or destruction of property, occurring prior to the
                           Effective Time;

                  (l)      any amounts due or payable to Seller as adjustments
                           to insurance premiums related to the Assets with
                           respect to any period prior to the Effective Time;

                  (m)      all (i) agreements and correspondence between Seller
                           and Tristone Capital, LP (the "Advisor") relating to
                           the transactions contemplated in this Agreement, (ii)
                           lists of prospective purchasers for such transactions
                           compiled by either Seller or the Advisor, (iii) bids
                           submitted by other prospective purchasers of the
                           Assets, (iv) analyses by Seller or the Advisor of any
                           bids submitted by any prospective purchaser, (v)
                           correspondence between or among Seller or Advisor, or
                           either of their respective representatives, and any
                           prospective purchaser other than Buyer, (vi)
                           correspondence between Seller or Advisor or any of
                           their respective representatives with respect to any
                           of the bids, the prospective purchasers, the
                           engagement or activities of the Advisor, or the
                           transactions contemplated in this Agreement and (vii)
                           the Kinder Morgan 2006 Permian Basin Divestiture --
                           Transaction Process Memorandum dated May 2006,
                           prepared by the Advisor and circulated to prospective
                           purchasers; and

                  (n)      all cash, checks, funds, accounts receivable,
                           accounts payable, promissory notes or general
                           intangibles (as such terms are defined by the Uniform
                           Commercial Code) attributable to Sellers' interests
                           in the Assets with respect to any period prior to the
                           Effective Date.

                                   ARTICLE II
                                 PURCHASE PRICE

         Section 2.01 Purchase Price. The purchase price for the purchase, sale
and conveyance of the Assets to Buyer is Buyer's payment to Seller of the sum of
$20,000,000.00 (the "Purchase Price"), as adjusted in accordance with the
provisions of this Agreement. The Purchase Price, as adjusted in accordance with
the terms of this Agreement, including, without limitation, Section 10.02, 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.

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         Section 2.02 Deposit. Concurrently with the execution of this Agreement
by Buyer and Seller, 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 the account of Kinder Morgan CO2 Company, L.P. on
behalf of Seller, Account No. 4121049415, at Wells Fargo, ABA Routing Number
121000248. The refund of the Deposit as provided for in Section 11.03 and shall
be subject to the terms of this Agreement. Without duplication, if the
transactions contemplated by this Agreement are consummated, the Deposit shall
be retained by Seller and shall be considered as prepayment of a portion of the
Purchase Price, and the amount payable by Buyer at the Closing shall be reduced
by the amount of the Deposit.

         Section 2.03 Allocated Values.

                  (a)      Buyer and Seller agree to allocate the Purchase Price
                           (as adjusted pursuant to this Agreement) 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.

                  (b)      The Allocated Values shall be completed in the manner
                           required by Section 1060 of the Internal Revenue Code
                           of 1986, as amended (the "Code"). Buyer and Seller
                           further agree to comply with all filing, notice and
                           reporting requirements described in Section 1060 of
                           the Code and the Treasury Regulations promulgated
                           thereunder, including the timely preparation and
                           filing of Form 8594 based on the Allocated Values.
                           The Buyer and the Sellers hereby agree that they will
                           report the federal, state, foreign and other tax
                           consequences of the transactions contemplated by this
                           Agreement in a manner consistent with the Allocated
                           Values.

         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 effective as of 7:00 a.m. local time where the Assets are located on
July 1, 2006 (the "Effective Time").

                                   ARTICLE III
                                  TITLE MATTERS

         Section 3.01 Examination Period. Following the execution date of this
Agreement until 9:00 a.m., local time in Houston, Texas on July 28, 2006 (the
"Examination Period"), Seller shall permit Buyer and/or its representatives to
examine, at all reasonable times, 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.

                                      -5-
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         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 (d) of this Section 3.02):

                  (a)      entitles Seller to receive not less than the
                           percentage set forth in Exhibit B as Seller's "Net
                           Revenue Interest" of all Hydrocarbons produced, saved
                           and marketed from each well, lease or unit as set
                           forth in Exhibit B, all without reduction, suspension
                           or termination of such interest throughout the
                           productive life of such well, except as specifically
                           set forth in Exhibit B;

                  (b)      obligates Seller to bear not greater than the
                           percentage set forth in Exhibit B as Seller's
                           "Working Interest" of the costs and expenses relating
                           to the maintenance, development and operation of each
                           well, lease or unit as set forth in Exhibit B, all
                           without increase throughout the productive life of
                           such well, except as specifically set forth in
                           Exhibit B; and

                  (c)      is free and clear of all liens, encumbrances and
                           defects in title.

                  (d)      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 to the extent the
                                    same do not operate to reduce the Net
                                    Revenue Interests of Seller below those set
                                    forth in Exhibit B or increase the Working
                                    Interests of Seller above those set forth in
                                    Exhibit B without a corresponding increase
                                    in the Net Revenue Interests or otherwise
                                    interfere materially with the operation,
                                    value or use of the Assets;

                           (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
                                    expenses incurred which are not yet
                                    delinquent;

                           (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;

                           (iv)     the terms, conditions, restrictions,
                                    exceptions, reservations, limitations and
                                    other matters contained in (including any
                                    liens or

                                      -6-
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                                    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 to the extent the same do not
                                    operate to reduce the Net Revenue Interests
                                    of Seller below those set forth in Exhibit B
                                    or increase the Working Interests of Seller
                                    above those set forth in Exhibit B without a
                                    corresponding increase in the Net Revenue
                                    Interests or otherwise interfere materially
                                    with the operation, value or use of 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 unrecorded, provided
                                    that such matters do not operate to reduce
                                    the Net Revenue Interests of Seller below
                                    those set forth in Exhibit B or increase the
                                    Working Interests of Seller above those set
                                    forth in Exhibit B without a corresponding
                                    increase in the Net Revenue Interests;

                           (viii)   preferential rights to purchase or similar
                                    agreements subject to the Provisions of
                                    Section 3.07;

                           (ix)     required Third Party consents to assignments
                                    or similar agreements subject to the
                                    provisions of Section 3.08;

                           (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;

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                           (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 B or
                                    increase the Working Interests of Seller
                                    above those set forth in Exhibit B 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, or (3)
                                    otherwise interfere materially with the
                                    operation, value or use of the Assets, or
                                    (4) 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.

         Section 3.03 Title Defects.

                  (a)      The term "Title Defect," as used in this Agreement,
                           shall mean: (a) any encumbrance, encroachment,
                           irregularity, 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.

                                      -8-
<PAGE>

                  (b)      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 well,
                                    lease or unit is less than that stated in
                                    Exhibit B or the Working Interest
                                    attributable to any well, lease or unit is
                                    greater than that stated in Exhibit B, then
                                    the Title Defect Value shall take into
                                    account the relative change in the interest
                                    from Exhibit B and the appropriate Allocated
                                    Value attributed to such Asset.

                           (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.

                           (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 3.04 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
                           Examination Period of such alleged Title Defect. To
                           be effective, such

                                      -9-
<PAGE>

                           notice must (i) be in writing, (ii) be received by
                           Seller prior to the expiration of the 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, and (v) include the value of such Title
                           Defect as determined by Buyer. Subject to the special
                           warranty contained in the Assignment, 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.

                  (b)      An individual matter that would otherwise be
                           considered a Title Defect under Section 3.03(a) shall
                           not be considered to be a Title Defect unless the
                           Title Defect Value of such matter is greater than
                           $25,000, as determined by Section 3.03(b) ("Title
                           Defect Threshold"). Buyer shall not be entitled to
                           allege Title Defects until the aggregate of all Title
                           Defects which exceed the Title Defect Threshold
                           exceeds three per cent (3%) of the Purchase Price
                           prior to any adjustments thereto (the "Defect
                           Deductible").

         Section 3.05 Remedies for Title Defects.

                  (a)      Upon the receipt of effective notice of a Title
                           Defect from Buyer (as provided by Section 3.04),
                           Seller may:

                           (i)      attempt to cure such Title Defect at any
                                    time prior to 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 action with respect to the
                                    alleged Title Defect and reduce the Purchase
                                    Price as agreed pursuant to Sections 3.05(b)
                                    and (c) in accordance with Section 10.02(b)
                                    (which shall cause such alleged Title Defect
                                    to become an Assumed Obligation, as that
                                    term is defined in Section 14.02 hereof).

                  (b)      Except as otherwise provided in this Section 3.05,
                           with respect to each Title Defect that is not cured
                           on or before the Closing and for which the Seller has
                           not agreed to exclude the affected Asset from the
                           Closing under Section 3.05(a)(ii), the Purchase Price
                           shall be reduced by an amount equal to the Title
                           Defect Value agreed upon in writing by Buyer and
                           Seller, but only to the extent such amount exceeds
                           the Defect Deductible. In the event that there is
                           more than one affected Asset with a Title Defect, and
                           the aggregate of all Title Defects is greater than
                           the Defect Deductible, the amount by which the
                           aggregate of all Title Defects exceeds the Defect
                           Deductible shall be applied pro-rata to the Allocated

                                      -10-
<PAGE>

                           Value of each affected Asset in determining the
                           amount to adjust the Purchase Price.

                  (c)      If prior to 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, which
                           exceeds the Defect Deductible, shall, subject to this
                           Section, be promptly refunded by Seller to Buyer.

         Section 3.06 Special Warranty of Title. Seller hereby agrees to warrant
and defend title to the Assets unto Buyer and its successors and assigns 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.

         Section 3.07 Preferential Rights To Purchase. Buyer's good faith
allocation of values as set forth in Exhibit C shall be used to prepare an
allocation of the Purchase Price to Assets that are, subject to Seller's
Knowledge (as such term is defined below), subject to preferential rights to
purchase and will be set forth in Schedule 3.07. Seller will use reasonable
efforts to send out the applicable preferential right to purchase notices within
five (5) Business Days after the date this Agreement is executed. Seller shall
provide to Buyer for Buyer's reasonable approval the form of all preferential
right notices. As used herein, the terms "Seller's Knowledge" and "to the
knowledge of Seller" shall construed to mean the actual knowledge of a matter
(without investigation) of an executive officer of Seller or its general
partner, or William G. Foster, Land Manager.

Seller shall use its reasonable efforts to comply with all preferential right to
purchase provisions relative to any Asset prior to the Closing. If, prior to
Closing, a holder of a preferential purchase right notifies Seller that it
intends to exercise it rights with respect to an Asset to which its preferential
purchase right applies (as determined in accordance with the agreement in which
the preferential purchase right arises), the Asset covered by said preferential
purchase right shall be excluded from the Assets to be conveyed to Buyer, and
the Purchase Price shall be reduced by the Allocated Value of said Asset. Buyer
acknowledges and agrees that Seller shall attempt to determine (in its good
faith judgment) the extent of the preferential purchase rights encumbering the
Assets, and said determination shall be used by Seller to provide the
preferential purchase right notifications. If the holder of the preferential
purchase right fails to consummate the purchase of the Asset subject to the
preferential purchase right or fails to respond to the notice by Closing, Seller
and Buyer shall proceed with Closing and the sale of the Asset to Buyer, it
being expressly understood and agreed hereby that in such case, Buyer shall
purchase such Asset(s) subject to the effects of such preferential purchase
right, and such preferential purchase right and

                                      -11-
<PAGE>

any and all liability arising therefrom shall be deemed to be an Assumed
Obligation (as such term is defined in Section 14.02 hereof).

         Section 3.08 Consents to Assignment. Seller shall use reasonable
efforts to obtain all necessary consents from Third Parties to assign the Assets
prior to Closing (other than governmental approvals that are customarily
obtained after Closing), subject to Seller's Knowledge of the existence of such
consents to assign. 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, would give rise to a claim for
damages or could cause a termination of the Lease or other Asset to be assigned,
Buyer may either waive the defect and proceed with Closing or exclude the Asset
as to that portion of the Assets affected thereby. If Buyer excludes an affected
Asset the Purchase Price shall be reduced by the Allocated Value of the affected
Asset. In all other cases, such unobtained consents shall not constitute Title
Defects. If Buyer elects to waive the defect and proceed with Closing under the
provisions of this Section 3.08, Buyer shall purchase such Asset(s) subject to
the effects of such consent to assign, and such consent to assign and any and
all liability arising therefrom shall be deemed to be an Assumed Obligation.

         Section 3.09 Remedies for Title Benefits.

                  (a)      If either Party discovers any Title Benefit during
                           the Examination Period affecting the Assets, it shall
                           promptly notify the other Party in writing thereof on
                           or before the expiration of the 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 B (including, without
                           limitation, a Net Revenue Interest that is greater
                           than that set forth in Exhibit B) or Seller's Working
                           Interest in any Subject Interest that is less than
                           the Working Interest set forth in Exhibit B (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.

                  (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 on or before 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, upon determination of the
                           amount of such adjustment, any unpaid portion thereof
                           shall be paid by Buyer to Seller.

                                      -12-
<PAGE>

                                   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 prior
                           to the expiration of the Examination Period ("Buyer's
                           Environmental Review"). The cost and expense of
                           Buyer's Environmental Review, if any, shall be borne
                           solely by Buyer. The scope of work comprising Buyer's
                           Environmental Review shall be limited to that
                           mutually agreed by Buyer and Seller prior to
                           commencement thereof and shall not include any
                           intrusive test, Phase II type examination or other
                           similar procedure without the prior consent of
                           Seller. 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, 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 (INCLUDING THOSE RESULTING FROM SELLER'S
                           SOLE, JOINT, COMPARATIVE OR CONCURRENT NEGLIGENCE OR
                           STRICT LIABILITY, BUT EXCLUDING THOSE CAUSED BY
                           SELLER'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT)
                           arising out of or relating to Buyer's Environmental
                           Review.

                  (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. If Buyer, Buyer's
                           Environmental Consultant, or any Third Party to whom

                                      -13-
<PAGE>

                           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.

         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.

                  (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 health or the environment as may be interpreted by
                           applicable court decisions or administrative orders,
                           including, without limitation, the Clean Air Act, as
                           amended, the Comprehensive Environmental Response,
                           Compensation and Liability Act, as amended
                           ("CERCLA"), the Federal Water Pollution Control Act,
                           as amended, the Occupational Safety and Health Act,
                           as amended, the Resources Conservation and Recovery
                           Act, as amended, the Safe Drinking Water Act, as
                           amended, the Toxic Substances Control Act, as
                           amended, the Superfund Amendment and Reauthorization
                           Act of 1986, as amended, the Hazardous Materials
                           Transportation Act, as amended, and comparable state
                           and local laws.

                  (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

                                      -14-
<PAGE>

                           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.

         Section 4.03 Notice of Environmental Defects.

                  (a)      If Buyer discovers any Environmental Defect affecting
                           the Assets, Buyer shall notify Seller prior to the
                           expiration of the 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 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 citation of the
                           provisions of Environmental Laws alleged to be
                           violated and the related facts that substantiate such
                           violation; (iv) identify the specific Assets affected
                           by such Environmental Defect, including, without
                           limitation, a site plan showing the location of all
                           sampling events, boring logs and other field notes
                           describing the sampling methods utilized and the
                           field conditions observed, chain-of-custody
                           documentation and laboratory reports; (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(a)(iv) as the remedy therefor.

                  (b)      An individual matter that would otherwise be
                           considered an Environmental Defect under Section
                           4.02(a) shall not be considered to be an
                           Environmental Defect unless the value of such matter
                           is greater than $25,000, as determined by Section
                           4.02(d) (the "Environmental Defect Threshold"). Buyer
                           shall not be entitled to allege Environmental Defects
                           until the aggregate of all Environmental Defects
                           which exceed the Environmental Defect Threshold
                           exceeds three per cent (3%) of the Purchase Price
                           prior to any adjustments thereto (the "Environmental
                           Defect Deductible").

                  (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).

                                      -15-
<PAGE>

         Section 4.04 Remedies for Environmental Defects.

                  (a)      Upon the receipt of effective notice of an
                           Environmental Defect from Buyer (as provided by
                           Section 4.03), Seller may:

                           (i)      attempt to cure such Environmental Defect at
                                    any time prior to Closing;

                           (ii)     exclude the affected Asset from the sale and
                                    reduce the Purchase Price by the Allocated
                                    Value of such affected Asset;

                           (iii)    subject to the approval of Buyer (such
                                    approval not to be unreasonably withheld),
                                    not take any action with respect to the
                                    alleged Environmental Defect and indemnify
                                    Buyer pursuant to Section 14.05 against all
                                    losses and costs which Buyer may incur in
                                    connection with the same (which shall cause
                                    such alleged Environmental Defect to become
                                    a Retained Obligation, as that term is
                                    defined in Section 14.01 hereof); or

                           (iv)     not take any action with respect to the
                                    alleged Environmental Defect and reduce the
                                    Purchase Price in accordance with Section
                                    10.02(b) (which shall cause such alleged
                                    Environmental Defect to become an Assumed
                                    Obligation as that term is defined in
                                    Section 14.02 hereof).

                  (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 three (3)
                           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 the
                           Environmental Defect Value attributable thereto is
                           not determined by the Closing, the Purchase Price
                           paid at Closing shall not be reduced by virtue of
                           such disputed Environmental Defect or the
                           Environmental Defect Value, and, upon the final
                           resolution of such dispute, the Environmental Defect
                           Value, if any, found to be attributable to such
                           Environmental Defect, which exceeds the Environmental
                           Defect Deductible shall, subject to this Section, be
                           promptly refunded by Seller to Buyer. Notwithstanding
                           the foregoing, the Seller 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.

                                    ARTICLE V
                    REPRESENTATIONS AND WARRANTIES OF SELLER

         Seller represents and warrants to Buyer that:

                                      -16-
<PAGE>

         Section 5.01 Seller's Existence. Seller is a limited partnership, duly
organized and validly existing under the laws of the State of Delaware and is
qualified to conduct business in the States of Texas and New Mexico. 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.

         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 governing documents;

                  (b)      except for any preferential purchase rights and
                           consents to assignment, 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 except as (x) the enforceability hereof
may be limited by bankruptcy, insolvency, moratorium or other similar laws
affecting the enforcement of creditors' rights generally, and (y) the
availability of equitable remedies may be limited by equitable principles of
general applicability.

         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 and 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. Seller has not received notice of any 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 is pending or, to Seller's Knowledge, threatened against 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.

         Section 5.07 Royalties. During the period of time from March 1, 2006 at
7 o'clock a.m. local time at the locations of the Assets until the Effective
Time (the "Seller Ownership Period"), 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 properly held in suspense.

                                      -17-
<PAGE>

         Section 5.08 Taxes. During the Seller Ownership Period, 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.

         Section 5.09 Contracts. All material Contracts are in full force and
effect, and 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 No Violation of Laws. To Seller's Knowledge, and during
the Seller Ownership Period, neither Seller nor Journey Operating (defined
below) has violated in any material respect any applicable law, rule,
regulation, ordinance, writ, decree or judgment of any Government Authority
(excluding Environmental Laws which are handled exclusively under Article IV of
this Agreement) with respect to the ownership or operation of the Assets which
could materially affect Seller's ability to consummate the transactions
contemplated herein or materially affect the ownership, value or operation of
any of the Assets.

         Section 5.12 No Prepayments. To Seller's Knowledge, there have been no
advanced, take or pay or other prepayments with respect to the Assets that would
obligate Seller or Buyer to deliver Hydrocarbon production from the Assets after
the Effective Time without receiving full payment therefor.

         Section 5.13 Production Sale Contracts. To Seller's Knowledge, there
are no production sales contracts pertaining to the Assets that cannot be
cancelled at any time upon 90 days (or less) prior notice.

         Section 5.14 Calls on Production. To Seller's Knowledge, none of the
Assets are subject to any calls on production.

                                   ARTICLE VI
                     REPRESENTATIONS AND WARRANTIES OF BUYER

         Buyer represents and warrants to Seller that:

         Section 6.01 Buyer's Existence. Buyer is a limited partnership, duly
organized and validly existing under the laws of the State of Delaware and is
qualified to conduct business in the State of Texas. 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 Texas.

         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 agreement of limited
                           partnership or other governing documents;

                                      -18-
<PAGE>

                  (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 partnership action on the part of Buyer. This
Agreement constitutes the legal, valid and binding obligation of Buyer
enforceable in accordance with its terms except as (x) the enforceability hereof
may be limited by bankruptcy, insolvency, moratorium or other similar laws
affecting the enforcement of creditors' rights generally, and (y) the
availability of equitable remedies may be limited by equitable principles of
general applicability.

         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).

         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 to have available by the Closing
Date sufficient funds to enable Buyer to pay in full the Purchase Price as
herein provided and otherwise to perform its obligations under this Agreement.

                                      -19-
<PAGE>

                                   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:

         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 (except to the extent such
representations are qualified by materiality in which case such representations
shall be true and correct in all respects).

         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
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.

                                  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 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 (except to the extent
such representations are qualified by materiality in which case such
representations shall be true and correct in all respects).

         Section 8.02 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 8.03 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.

                                      -20-
<PAGE>

         Section 8.04 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.

                                   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.

         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
Effective Time. Seller shall retain responsibility for such taxes attributable
to the period of time prior to the Effective Time and Buyer shall assume
responsibility for the period of time from and after the Effective Time.

         Section 9.03 Tax Deferred Exchange. Either or both Buyer and/or Seller
may, at or before the Closing, elect to affect a tax-deferred exchange of the
Assets for other qualifying properties (hereinafter collectively called the
"Exchange Property") in accordance with the following:

                  (a)      In the event Seller makes such an election prior to
                           the Closing, Seller may elect, by notice to Buyer
                           delivered on or before the Closing Date, to have the
                           Purchase Price paid to a qualified intermediary until
                           Seller has designated the Exchange Property. The
                           Exchange Property shall be designated by Seller and
                           acquired by the qualified intermediary within the
                           time periods prescribed in Section 1031(a)(3) of the
                           Internal Revenue Code, and shall thereupon be
                           conveyed to Seller. In the event Seller fails to
                           designate and the qualified intermediary fails to
                           acquire the Exchange Property within such time
                           periods, the agency or trust shall terminate and the
                           proceeds then held by the qualified intermediary
                           shall be paid immediately to Seller.

                  (b)      In the event Buyer makes such an election prior to
                           the Closing, Buyer may elect, by notice to Seller
                           delivered on or before the Closing Date, to have the
                           Assets conveyed to a qualified intermediary or an
                           exchange accommodation titleholder (as that term is
                           defined in Rev. Proc. 2000-37 issued effective
                           September 15, 2000).

                  (c)      The rights and responsibilities of Seller, Buyer and
                           the qualified intermediary or exchange accommodation
                           titleholder shall be documented with such agreements
                           containing such terms and provisions as shall be
                           determined by Seller and Buyer, each in their sole
                           discretion, to be necessary to accomplish a tax
                           deferred exchange under Section 1031 of the Internal
                           Revenue Code, subject, however, to the limitations on
                           costs

                                      -21-
<PAGE>

                           and liabilities of Buyer and Seller set forth below.
                           If Seller makes a tax deferred exchange election,
                           Buyer shall not be obligated to pay any additional
                           costs or incur any additional obligations in the
                           acquisition of the Assets. If Buyer makes a tax
                           deferred exchange election, Seller shall not be
                           obligated to pay any additional costs or incur any
                           additional obligations in the consummation of the
                           transactions contemplated in this Agreement and Buyer
                           shall not be relieved of any obligation hereunder.
                           Any such tax deferred exchange election by either
                           Party shall not affect the duties, rights or
                           obligations of the Parties except as expressly set
                           forth in this Section 9.03.

         Should either Seller or Buyer make such an election and should the tax
         deferred exchange fail or be disallowed by the Internal Revenue Service
         for any reason, the non-electing party's sole responsibility and
         liability to the electing party shall be to take such actions as are
         required by subsections (a), (b) or (c) above and such non-electing
         party shall have no other responsibility or liability whatsoever to the
         electing party; and the electing party shall release, indemnify, defend
         and hold harmless the non-electing party from any responsibility or
         liability related to such election except for such actions as may be
         required by subsections (a), (b) or (c) above.

                                    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, the transactions contemplated by this Agreement (the "Closing") shall
take place at the offices of Bracewell & Giuliani LLP whose address is Pennzoil
Place, 711 Louisiana Street, Suite 2300, Houston, Texas 77002 on July 31, 2006,
(the "Closing Date").

         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 by Buyer and
                                    Seller;

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

                           (iv)     an amount equal to the costs and expenses
                                    that are (i) attributable to the Assets for
                                    the period of time from the Effective Time
                                    to the Closing Date (the "Closing Period"),
                                    whether paid before or after the Effective
                                    Time, and (ii) paid by the Seller,
                                    including, without

                                      -22-
<PAGE>

                    limitation, bond and insurance premiums paid by or on behalf
                    of Seller attributable to coverage during the Closing
                    Period;

               (v)  an amount equal to the interest of Seller in the quantity of
                    merchantable Hydrocarbon substances produced from the Assets
                    in storage above the outlet connection and/or upstream of
                    the applicable sales meter at the Effective Time multiplied
                    by the contract price therefor at the Effective Time; and

               (vi) an amount equal to $500 per operated producing well per
                    month (prorated for any partial month or months) from the
                    Effective Time to the Closing Date in lieu of any indirect
                    overhead charges.

          (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) any revenue attributable to post-Effective Time production
                    and received by Seller;

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

               (iv) any other amount provided for in this Agreement or agreed
                    upon by Buyer and Seller.

          (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:

          (a)  execute, acknowledge and deliver to Buyer the Assignment in the
               form of Exhibit D attached hereto in a sufficient number of
               counterparts for filing in each county where the Assets are
               located (the "Assignment");

                                      -23-
<PAGE>

          (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
               Effective Time 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;

          (f)  execute and deliver to Buyer assignments of all state and federal
               Leases on the prescribed forms; and

          (g)  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;

                                      -24-
<PAGE>

          (c)  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
               August 31, 2006;

          (e)  by either Party if any Governmental Authority shall have issued
               an order, judgment or decree or taken any other action
               challenging, delaying, 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
               ten percent (10%) percent of the Purchase Price;

          (g)  by Buyer in accordance with Section 13.04(c); 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 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 material
               representation herein by Buyer, then in such event and as
               Seller's sole remedy, Seller shall have the right to terminate
               this Agreement, in which case Seller shall retain the Deposit as
               liquidated damages on account of Buyer's failure to perform its
               obligations under this Agreement or Buyer's breach of any
               material representation under this Agreement, which remedy shall
               be the sole and exclusive remedy

                                      -25-
<PAGE>

               available to Seller for Buyer's failure to perform or breach.
               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.

          (b)  If this Agreement is terminated by the mutual written agreement
               of Buyer and Seller, or if the Closing does not occur on or
               before the Closing Date for any reason other than as set forth in
               Section 11.01(b), then Seller shall return the Deposit 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.

          (c)  If all conditions to the obligations of Seller set forth in
               Article VII have been met and the transactions contemplated by
               this Agreement are not consummated on or before the Closing Date
               because of the failure of Seller to perform any of its material
               obligations hereunder or the breach of any material
               representation herein by Seller and Seller fails to cure same
               within ten (10) Business Days after receipt of written notice of
               such breach from Buyer, then Buyer shall have the right to pursue
               specific performance.

     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) Buyer will receive
               all proceeds from sales of Hydrocarbons that are produced and
               saved from and after the Effective Time and any other revenues
               arising out of the ownership or operation of the Assets from and
               after the Effective Time, 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 Effective Time, including, without limitation,
               all drilling costs, all capital expenditures, all overhead
               charges under

                                      -26-
<PAGE>

               applicable operating or other agreements (regardless of whether
               Seller or an affiliate of Seller serves as operator prior to the
               Closing), and (ii) Seller will receive all proceeds from sales of
               Hydrocarbons that are produced and saved prior to the Effective
               Time and any other revenues arising out of the ownership or
               operation of the Assets prior to the Effective Time, 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 prior to the Effective Time.

          (b)  In addition to the foregoing, and without duplication of any
               Purchase Price Adjustments, the Seller will be paid (i) the
               amount as of the Effective Time 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 after the Effective Time, and (ii) the
               value of all merchantable Hydrocarbons produced prior to the
               Effective Time but in storage above the inlet connection or
               upstream of the applicable sales meter on the Closing Date.

          (c)  In addition to the foregoing, and without duplication of any
               Purchase Price Adjustments, 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 Effective Time, which amounts shall, to the extent
               not actually assessed, be computed based on the 2006 tax
               statements received by Seller, or to the extent not received,
               then 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 Effective Time), 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.

          (d)  To the extent that the same are not known as of the Closing Date
               or settled as Purchase Price Adjustments pursuant to Section
               10.02, all amounts due under this Section 12.01 will be settled
               in accordance with the Final Statement under Section 12.03.

     Section 12.02 Gas Imbalances. Buyer and Seller agree that the net gas
imbalance attributable to the Assets as of the Effective Time is believed to be
that which is set forth on Schedule 12.02 (the "Agreed Imbalance"),
notwithstanding that the actual imbalance may be less or greater. Buyer and
Seller shall verify the actual net gas imbalance in the post-closing accounting
and any imbalance shall be accounted for between the parties at the price of
$6.00 per Mcf but only as to those volumes which exceed or are less than the
Agreed Imbalance. Such settlement shall be final and neither party thereafter
shall make claim upon the other concerning the gas imbalances of the Assets.
BUYER ASSUMES ALL RIGHTS AND LIABILITIES RELATING TO GAS IMBALANCES DISCOVERED
AFTER THE POST-CLOSING SETTLEMENT INCLUDING ANY REVENUE ADJUSTMENT CAUSED BY
SUCH

                                      -27-
<PAGE>

SUBSEQUENTLY DISCOVERED IMBALANCE AND AGREES TO DEFEND AND INDEMNIFY SELLER FROM
AND AGAINST ANY CLAIM, BY ANYONE, ARISING OUT OF SUCH GAS IMBALANCES REGARDLESS
OF SELLER'S NEGLIGENCE OR FAULT (INCLUDING STRICT LIABILITY).

     Section 12.03 Final Accounting Statement.

          (a)  On or before ninety (90) 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"). 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.

          (b)  Within five (5) Business Days after the Final Settlement Date,
               Seller shall pay to Buyer or Buyer shall pay to Seller, as
               applicable, 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 12.04 Further Cooperation. Seller shall make the Records available
to be picked up by Buyer at the offices of Seller during normal business hours
within five (5) 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

                                      -28-
<PAGE>

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 Effective Time. Pursuant to that certain
Transition Services Agreement dated April 1, 2006 by and between Seller and
Journey Operating L.L.C. ("Journey Operating") (the "Journey Transition Services
Agreement"), Journey Operating is operating certain of the Assets on which
Seller is the operator of record and shall continue to do so until such time as
the Journey Transition Services Agreement terminates pursuant to the terms
thereof.

Seller agrees, from and after the date hereof until Closing, except as expressly
contemplated by this Agreement or the Journey Transition Services Agreement, or
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 use commercially reasonable efforts to, or cause Journey
Operating to:

          (a)  Operate, or cause to be operated, the Assets in a good and
               workmanlike manner and in the usual, regular and ordinary manner
               consistent with past practice;

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

          (c)  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 $50,000;

          (d)  not plug or abandon any well located on the Assets without
               Buyer's prior written consent;

          (e)  not transfer, sell, mortgage, pledge or dispose of any material
               portion of the Assets 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
               Assets or for which replacement equipment has been obtained;

          (f)  preserve in full force and effect all oil and gas leases,
               operating agreements, easements, rights-of-way, permits,
               licenses, insurance (to the extent maintained by Seller) and
               agreements that relate to the Assets;

                                      -29-
<PAGE>

          (g)  submit to Buyer for prior written approval, all requests for
               operating or capital expenditures relating to the Assets that
               involve individual commitments of more than $50,000; and

          (h)  obtain Buyer's written approval prior to voting under any
               operating, joint venture, partnership or similar agreement or
               electing to non-consent any operation under an operating
               agreement.

In order to reimburse the Seller for administrative overhead expenses incurred
in order to operate the properties in accordance with this Section from the
Effective Time to the Closing Date, Buyer shall pay the Seller a fee as provided
in Section 10.02(a)(vi).

     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, Seller shall use commercially
               reasonable efforts to cause Journey Operating to operate the
               Assets and use commercially 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. To
               the extent that Seller is not the operator of any of the Assets,
               the obligations of Seller in this Article XIII shall be construed
               to require that Seller use reasonable efforts (without being
               obligated to incur any expense or institute any cause of action)
               to cause the operator of such Assets to take such actions or
               render such performance within the constraints of the applicable
               operating agreements and other applicable agreements.

          (b)  Notwithstanding anything to the contrary in this Article XIII,
               and pursuant to Section 14.03 hereof, 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, BUT EXCLUDING THOSE RESULTING FROM SELLER'S GROSS
               NEGLIGENCE OR WILLFUL MISCONDUCT) provided that such payments
               relate to production months after the Effective Time. In no

                                      -30-
<PAGE>

               event shall Buyer's remedy for any breach by Seller 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. Following the
Closing, Seller shall not be obligated to continue operating any of the Assets,
and Buyer hereby agrees to assume full responsibility for operating (or causing
the operation of) all Assets. 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 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), or 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, 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, at Closing, Seller will resign as operator of any wells within the
Assets that Seller currently operates.

     Section 13.04 Casualty Loss.

          (a)  Buyer shall assume all risk of loss with respect to, and any
               change in the condition of, the Assets from Effective Time until
               the Closing, including with respect to the depletion of
               Hydrocarbons, the watering-out of any well, the collapse of
               casing, sand infiltration of wells, and the depreciation of
               personal property.

          (b)  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 or if 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
               destruction or taking without reduction of the Purchase Price,
               but subject to Section 13.04(c).

          (c)  Notwithstanding Section 13.04(a), in the event of any loss
               described in Section 13.04(b), at the Closing, Seller shall pay
               to Buyer all sums paid to Seller by Third Parties by reason of
               the destruction or taking of such Assets (up to the Allocated
               Value thereof), including any sums paid

                                      -31-
<PAGE>

               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,
               including any policy or agreement of insurance or indemnity,
               arising out of such destruction or taking (up to the Allocated
               Value thereof). Notwithstanding anything to the contrary in this
               Section 13.04, except as provided in Section 13.01 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. Notwithstanding anything to the contrary contained in
               this Section 13.04, should the uncompensated loss exceed fifteen
               (15%) percent of the Purchase Price, Buyer shall have the option
               to terminate this Agreement in which event Seller shall return
               the Deposit and to Buyer within three (3) Business Days after
               such termination.

     Section 13.05 Operatorship. At or before 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. Seller makes no
representation and/or warranty to Seller 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.

                                   ARTICLE XIV
                         OBLIGATIONS AND INDEMNIFICATION

     Section 14.01 Retained Obligations. Provided that the Closing occurs,
Seller shall retain the following, to the extent that Buyer has provided Seller
with written notice claiming indemnification within six (6) months of the
Closing pursuant to the provisions of Section 14.04, and not thereafter,: (a)
all obligations and liabilities for the payment of royalties and rentals under
the Leases relating to the Subject Interests accruing during the Seller
Ownership Period; (b) all obligations of Seller under the Contracts for payment
of trade payables that accrue during the Seller Ownership Period; (c) any
obligation for which Seller expressly elects to indemnify Buyer pursuant to
Section 4.04(a)(iii); (d) all obligations and liabilities for payment of ad
valorem, property, and severance taxes attributable to the Assets arising during
the Seller Ownership Period; (e) all obligations and liabilities of Seller to
Third Parties for personal injury or death to the extent occurring prior to the
Effective Time as a result of the operation of the Assets by Seller, Journey
Operating or their respective affiliates; and (f) all obligations and
liabilities relating to any contamination or condition that is the result of any
offsite disposal by Seller, Journey Operating or their respective affiliates of
any wastes, pollutants, contaminants, hazardous material or other material or
substances on, in or below any properties not included in the Assets prior to
the Effective Time ("Offsite Disposal Claims") (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 and the ownership or operation thereof
(other than the Retained Obligations), whether attributable to periods before or
after the Effective Time, including, without limitation, those

                                      -32-
<PAGE>

arising out of (a) the terms of the Easements, Contracts, Leases, Personal
Property or Subject Interests comprising part of the Assets, (b) Gas Imbalances,
(c) suspense accounts, (d) ad valorem, property, severance and other similar
taxes or assessments based upon or measured by the ownership of the Assets or
the production therefrom, (e) the condition of the Subject Interests, regardless
of whether such condition arose before or after the Effective Time, (f)
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, (g) 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 Effective Time, and
(h) 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.

          (a)  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, REGARDLESS OF WHETHER CAUSED
               OR CONTRIBUTED TO BY THE SOLE, JOINT, COMPARATIVE OR CONCURRENT
               NEGLIGENCE OR STRICT LIABILITY OF ANY OF THE SELLER INDEMNITEES.

          (b)  Without limiting the foregoing, provided that the Closing occurs,
               Buyer shall release, defend, indemnify and hold harmless Seller
               Indemnitees from and against any and all Losses which Seller
               Indemnitees may sustain or incur by reason of or in connection
               with environmental claims (excluding Offsite Disposal Claims
               which constitute Retained Obligations, subject to other
               limitations set forth in this Article XIV) relating to or arising
               from the Assets REGARDLESS OF WHETHER CAUSED OR CONTRIBUTED TO BY
               THE SOLE, JOINT, COMPARATIVE OR CONCURRENT NEGLIGENCE OR STRICT
               LIABILITY OF ANY OF THE SELLER INDEMNITEES. BUYER HEREBY
               EXPRESSLY WAIVES BUYER'S RIGHT TO CONTRIBUTION UNDER CERCLA.

     Section 14.04 Seller's Indemnification. Provided that the Closing occurs,
subject to the limitations set forth in this paragraph and Section 15.03 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

                                      -33-
<PAGE>

Indemnitees") from and against any and all Losses resulting from Seller's breach
of its representations and warranties and the Retained Obligations REGARDLESS OF
WHETHER CAUSED OR CONTRIBUTED TO BY THE SOLE, JOINT, COMPARATIVE OR CONCURRENT
NEGLIGENCE OR STRICT LIABILITY OF ANY OF THE BUYER INDEMNITEES. 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 six (6) months of the Closing,
and (b) Buyer shall bear sole responsibility for the aggregate costs associated
with all Losses relating to Buyer Indemnitees up to a deductible percentage of
three percent (3%) 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 for Losses exceeds the deductible percentage of three percent (3%). In no
event shall Seller be required to indemnify the Buyer Indemnitees (or any single
Buyer Indemnitee) or pay any other amount in connection with or with respect to
the transactions contemplated in this Agreement any amount exceeding in the
aggregate twenty percent (20%) of the Purchase Price (as increased or decreased
under the terms of this Agreement).

     Section 14.05 Notices and Defense of Indemnified Matters. Each Party shall
promptly notify the other Party of any matter of which it becomes aware and for
which it is entitled to indemnification from the other Party under this
Agreement. The indemnifying Party shall be obligated to defend, at the
indemnifying Party's sole expense, any litigation or other administrative or
adversarial proceeding against the indemnified Party relating to any matter for
which the indemnifying Party has agreed to indemnify and hold the indemnified
Party harmless under this Agreement. However, the indemnified Party shall have
the right to participate with the indemnifying Party in the defense of any such
matter at its own expense.

     Section 14.06 Sole Remedy. If the Closing occurs, the sole and exclusive
remedy of each of the Buyer Indemnitees and the Seller Indemnitees with respect
to the Assets, including this purchase and sale, shall be pursuant to the
express provisions of this Agreement. With respect to the Buyer Indemnitees, any
and all (i) claims relating to the representations, warranties, covenants, and
agreements contained in this Agreement, (ii) other claims pursuant to, or in
connection with, this Agreement, or (iii) other claims relating to the Assets
and the purchase and sale thereof shall be subject to the provisions set forth
in Section 14.04. With respect to the Seller Indemnitees, any and all (i) claims
relating to the representations, warranties, covenants, and agreements contained
in this Agreement, (ii) other claims pursuant to, or in connection with, this
Agreement, or (iii) other claims relating to the Assets and the purchase and
sale thereof shall be subject to the provisions set forth in this Article XIV.
If the Closing occurs, Buyer on behalf of each of the Buyer Indemnitees and
Seller on behalf of each of the Seller Indemnitees shall be deemed to have
waived, to the fullest extent permitted under applicable law, any right to
contribution against Seller or any of its affiliates and any and all other
rights, claims, and causes of action it may have against Seller or any of its
affiliates, or Buyer or any of its affiliates, respectively, arising under or on
any federal, state, or local statute, law ordinance, rule or regulation, common
law or otherwise.

     Section 14.07 Insurance and Tax Benefits. The amount for which any of the
Buyer Indemnitees or the Seller Indemnitees are entitled to indemnification or
other compensation under this Agreement or in connection with or with respect to
the transactions contemplated in this Agreement shall be reduced by any
corresponding (i) tax benefit created or generated or (ii)

                                      -34-
<PAGE>

insurance proceeds realized or that could reasonably be expected to be realized
by such party if a claim were properly pursued under the relevant insurance
arrangements.

     Section 14.08 Express Negligence. EXCEPT AS SPECIFICALLY PROVIDED OTHERWISE
IN THIS AGREEMENT, THE INDEMNIFICATION, RELEASE AND ASSUMPTION PROVISIONS
PROVIDED FOR IN THIS AGREEMENT SHALL BE APPLICABLE WHETHER OR NOT THE LOSSES,
COSTS, EXPENSES, AND DAMAGES IN QUESTION AROSE SOLELY OR IN PART FROM (i) THE
EXPRESS, GROSS, ACTIVE, PASSIVE, OR CONCURRENT NEGLIGENCE, OR OTHER FAULT OF ANY
BUYER INDEMNITEE OR SELLER INDEMNITEE OR (II) ANY ACTION THAT SUBJECTS THE BUYER
INDEMNITEE OR SELLER INDEMNITEE TO CLAIMS PREMISED IN WHOLE OR IN PART ON STRICT
LIABILITY. BUYER AND SELLER ACKNOWLEDGE THAT THIS STATEMENT COMPLIES WITH THE
EXPRESS NEGLIGENCE RULE AND IS CONSPICUOUS.

                                   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 and in the
Assignment 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 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

                                      -35-
<PAGE>

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 if Seller complies with its obligations under this
Agreement) 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 and warranties set forth in
Sections 5.07 through 5.14 and the covenants and agreements of Seller and Buyer
to be performed prior to or at the Closing shall terminate upon the Closing and
be of no further force and effect. All other representations, warranties,
covenants and obligations of Buyer under this Agreement shall indefinitely
survive the Closing. The representations, warranties, covenants and obligations
of Seller under Sections 5.01, 5.02, 5.03, 5.04, 5.05, and 5.06 of this
Agreement shall survive the Closing for a period of six months from the Closing.
The provisions of Section 11.04, 13.03, and 13.04(a) and Articles XII, XV, XVI
and XVII shall survive indefinitely. Article 14 shall survive the Closing
indefinitely, provided, however, nothing herein shall extend the six (6) month
period after Closing in which Buyer may send written notice claiming the right
to indemnification either under Sections 14.01 or 14.04 and Buyer expressly
waives all other rights to make any claim against Seller Indemnitees in
accordance with Sections 14.06 and 15.05.

     Section 15.04 Mitigation. Each person and entity entitled to
indemnification hereunder or otherwise to damages in connection with the
transactions contemplated in this Agreement shall take all reasonable steps to
mitigate all losses, costs, expenses and damages after becoming aware of any
event which could reasonably be expected to give rise to any losses, costs,
expenses and damages that are indemnifiable or recoverable hereunder or in
connection herewith.

     Section 15.05 Effect of Waiver. Neither Seller not Buyer shall have any
obligation or liability under this Agreement or in connection with or with
respect to the transactions contemplated in this Agreement for any breach,
misrepresentation, or noncompliance with

                                      -36-
<PAGE>

respect to any representation, warranty, covenant, or obligation if such breach,
misrepresentation or noncompliance shall have been waived by the other party.

     Section 15.06 Waiver of Consumer Rights. BUYER HEREBY WAIVES THE PROVISIONS
OF THE TEXAS DECEPTIVE TRADE PRACTICES ACT (THE "DTPA"), CHAPTER 17, SUBCHAPTER
E, SECTIONS 17.41 THROUGH 17.63, INCLUSIVE (OTHER THAN SECTION 17.555, WHICH IS
NOT WAIVED) OF THE TEXAS BUSINESS AND COMMERCE CODE, A LAW THAT GIVES CONSUMERS
SPECIAL RIGHTS AND PROTECTIONS. AFTER CONSULTATION WITH AN ATTORNEY OF ITS OWN
SELECTION, BUYER VOLUNTARILY CONSENTS TO THIS WAIVER. TO EVIDENCE ITS ABILITY TO
GRANT SUCH WAIVER, BUYER REPRESENTS TO SELLER THAT IT (i) IS IN THIS BUSINESS OF
SEEKING OR ACQUIRING, BY PURCHASE OR LEASE, GOODS OR SERVICES FOR COMMERCIAL OR
BUSINESS USE, (II) HAS ASSETS OF $5 MILLION OR MORE ACCORDING TO ITS MOST RECENT
FINANCIAL STATEMENT PREPARED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES, (III) HAS KNOWLEDGE AND EXPERIENCE IN FINANCIAL AND BUSINESS MATTERS
THAT ENABLE IT TO EVALUATE THE MERITS AND RISKS OF THE TRANSACTION CONTEMPLATED
HEREBY, AND (IV) IS NOT IN A SIGNIFICANTLY DISPARATE BARGAINING POSITION.

                                   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 pursuant to
Section 3.05(c), environmental issues pursuant to Section 4.04(b), or
calculation of the Accounting Statement or revisions thereto pursuant to Section
12.03(a) (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.

     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 the senior officers of its general partner, 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, or calculation of the
               Statement or revisions thereto, to an independent expert
               appointed in accordance with this Section 16.03

                                      -37-
<PAGE>

               (each, an "Independent Expert"), who shall serve as sole
               arbitrator. 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, such Independent Expert for such
               Dispute shall be selected in accordance with the Rules (as
               defined in Subsection (b) of this Section 16.03).

          (b)  Disputes to be resolved by an Independent Expert shall be
               resolved in accordance with mutually agreed procedures and rules
               and failing such agreement, in accordance with the rules and
               procedures of the Texas Arbitration Act and the Rules of the
               American Arbitration Association to the extent such Rules do not
               conflict with such Texas Arbitration Act or the provisions of
               this Agreement The Independent Expert 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 shall be binding upon the Parties as an award
               under the Texas 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.

          (c)  The charges and expenses of the arbitrator shall be shared
               equally by Seller and Buyer.

          (d)  Any arbitration hearing held pursuant to Section 16.03 shall be
               held in Houston, Texas

     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 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. 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.

                                      -38-
<PAGE>

     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.

     Section 17.06 Publicity. Neither Seller nor Buyer will issue any public
announcement or press release concerning this transaction without prior
consultation of the other Party (except as required by law or the applicable
rules or regulations of any Governmental Authority or stock exchange, 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 may be specifically
provided for in the terms of this Agreement, 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. Notwithstanding the
foregoing, Seller may assign its rights and delegate its duties hereunder
without the consent of Buyer to any entity (i) that is controlled

                                      -39-
<PAGE>

by Seller; (ii) that controls Seller, or (iii) that is under common control with
Seller; provided however, that no such assignment of rights or delegation of
duties shall relieve Seller of any of its obligations under this Agreement.
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 Buyer's Obligation Independent of Financing. Notwithstanding
anything to the contrary in this Agreement, the rights and obligations of Buyer
under this Agreement (including, without limitation, Buyer's due diligence
rights under Articles III and IV hereof) are independent of Buyer's ability to
obtain financing.

     Section 17.11 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 Texas, 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 Harris
County, Texas.

     Section 17.12 Notices. Any notice, communication, request, instruction or
other document required or permitted hereunder shall be given in writing and
delivered in person or sent by U.S. Mail postage prepaid, return receipt
requested, overnight courier or facsimile to the addresses of Seller and Buyer
set forth below. Any such notice shall be effective only upon receipt.

           Seller:                 Kinder Morgan Production Company LP
                                   500 Dallas, Suite 1000
                                   Houston, Texas 77002
                                   Attn: President
                                   Facsimile No.: 713-369-9195

           Buyer:                  Legacy Reserves Operating LP
                                   303 West Wall, Suite 1600
                                   Midland, Texas 79701
                                   Attn:  Kyle A. McGraw
                                   Facsimile No.: 432-686-8316

Either Party may, by written notice so delivered to the other Party, change its
address for notice purposes hereunder.

     Section 17.13 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.

                                      -40-
<PAGE>

     Section 17.14 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 17.15 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.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                      -41-
<PAGE>

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

         SELLER:

                                 KINDER MORGAN PRODUCTION COMPANY LP
                                 By:      KM Production Company GP LLC,
                                          Its General Partner

                                 By:
                                    --------------------------------------------
                                          Name:
                                               ---------------------------------
                                          Title:
                                                --------------------------------

         BUYER:

                                 LEGACY RESERVES OPERATING LP
                                 By:      Legacy Reserves Operating GP LLC,
                                          Its General Partner

                                 By:
                                    --------------------------------------------
                                          Name:
                                               ---------------------------------
                                          Title:
                                                --------------------------------

                                      -42-
<PAGE>

                                    EXHIBIT D

                           ASSIGNMENT AND BILL OF SALE

     THIS ASSIGNMENT AND BILL OF SALE (this "Assignment"), effective as of 7:00
a.m. on July 1, 2006 (the "Effective Time"), is made by Kinder Morgan Production
Company LP, a Delaware Limited Partnership (the "Assignor"), whose address is
500 Dallas, Suite 1000, Houston, Texas 77002, to Legacy Reserves Operating LP, a
Delaware Limited Partnership (the "Assignee"), whose address is 303 West Wall,
Suite 1600, Midland, Texas 79701.

                                    ARTICLE I
                              GRANTING AND HABENDUM

     For Ten Dollars ($10.00) and other good and valuable consideration, the
receipt, and sufficiency of which are hereby acknowledged, Assignor does hereby
grant, bargain, sell, transfer, convey, set over, assign and deliver unto
Assignee, its successors and assigns, effective for all purposes as of the
Effective Time and subject to the matters set forth herein, the Assets. The term
"Assets" shall mean all of Assignor's right, title and interest in and to the
following:

          (a)  the leasehold estates in and to the oil, gas and mineral leases
               described or referred to in Exhibit A attached hereto (the
               "Leases"), whether or not all lands covered by the Leases are
               described in Exhibit A, and any overriding royalty interests, fee
               mineral interests, royalty interests or other 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 Article I) production after the
               Effective Time 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, surface estates, servitudes, 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;

          (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,

                                      -1-
<PAGE>

               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, all wells described on Exhibit B
               attached hereto, and all 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, Assignor
               (collectively, the "Records") subject to Assignor's right to
               retain copies of the same; 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. For purposes of this Agreement, "Third
               Party" means any person or entity, governmental or otherwise,
               other than Assignor or Assignee, 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.

          (h)  all franchises, licenses, permits, approvals, consents,
               certificates, and other authorizations and rights granted by
               governmental authorities and all certificates of convenience or
               necessity, immunities, privileges, grants and other rights that
               related to the Assets or the ownership or operation of any
               thereof.

     NOTWITHSTANDING THE FOREGOING, the Assets shall not include, and there is
excepted, reserved and excluded from the assignment contemplated hereby
(collectively, the "Excluded Assets"):

                                      -2-
<PAGE>

          (a)  all credits and refunds and all accounts, instruments, trade
               credits, and general intangibles (as such terms are defined in
               the Texas Uniform Commercial Code) attributable to the Assets
               accruing prior to the Effective Time;

          (b)  all claims of Assignor 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 Effective Time,
               (ii) income or franchise taxes, or (iii) any taxes attributable
               to the other Excluded Assets, and such other refunds, and rights
               thereto, for amounts paid in connection with the Assets and
               attributable to the period prior to the Effective Time, including
               refunds of amounts paid under any gas gathering or transportation
               agreement;

          (c)  all proceeds, income, revenues or hydrocarbon production (and any
               security or other deposits made) attributable to (i) the Assets
               for any period prior to the Effective Time, or (ii) any other
               Excluded Assets;

          (d)  all personal computers and associated peripherals and all radio
               and telephone equipment and all of Assignor's proprietary
               computer software, technology, patents, trade secrets,
               copyrights, names, trademarks, logos and other intellectual
               property;

          (e)  all of Assignor'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;

          (f)  all documents and instruments of Assignor that may be protected
               by an attorney-client privilege;

          (g)  data and other information that cannot be disclosed or assigned
               to Assignee as a result of confidentiality or similar
               arrangements under agreements with persons unaffiliated with
               Assignor;

          (h)  all audit rights arising under any of the Contracts or otherwise
               with respect to any period prior to the Effective Time or to any
               of the other Excluded Assets;

          (i)  all corporate, partnership, income tax records, and documents
               subject to legal privilege (other than title);

          (j)  all claims and causes of action of Assignor (i) arising from
               acts, omissions, or events, or damage to or destruction of
               property, occurring prior to the Effective Time, (ii) arising
               under or with respect to any of the Contracts that are
               attributable to periods of time prior to the Effective time
               (including claims for adjustments or refunds), or (iii) with
               respect to any of the Excluded Assets;

                                      -3-
<PAGE>

          (k)  all rights and interests of Assignor (i) under any policy or
               agreement of insurance or indemnity, (ii) under any bond, or
               (iii) to any insurance or condemnation proceeds or awards
               arising, in each case, from acts, omissions, or events, or damage
               to or destruction of property, occurring prior to the Effective
               Time;

          (l)  any amounts due or payable to Assignor as adjustments to
               insurance premiums related to the Assets with respect to any
               period prior to the Effective Time; and

          (m)  all cash, checks, funds, accounts receivable, accounts payable,
               promissory notes or general intangibles (as such terms are
               defined by the Uniform Commercial Code) attributable to
               Assignor's interests in the Assets with respect to any period
               prior to the Effective Time.

     TO HAVE AND TO HOLD the Assets, together with all and singular the rights,
privileges, contracts and appurtenances, in any way appertaining or belonging
thereto, unto Assignee, its successors and assigns, forever, subject to the
matters set forth herein.

                                   ARTICLE II
                    SPECIAL WARRANTY OF TITLE AND DISCLAIMERS

     Section 2.01 Special Warranty of Title. Assignor hereby agrees to warrant
and defend title to the Assets unto Assignee, its successors and assigns,
against every person whomsoever lawfully claiming or to claim the same or any
part thereof, by, through, or under Assignor, but not otherwise; subject,
however, to the Permitted Encumbrances (as such term is defined in the Purchase
Agreement described below) and the other matters set forth herein. The interests
set forth on Exhibit B are included for warranty purposes only and shall not
limit the interests herein conveyed, it being the intent of Assignor to convey
to Assignee all of its undivided interest in the Assets. Assignor also grants
and transfers to Assignee and its successors and assigns, to the extent so
transferable, the benefit of and the right to enforce all title and other
covenants and warranties, if any, which Assignor may enforce with respect to the
Assets against Assignor's predecessors-in-title to the Assets.

     Section 2.02 Disclaimer. ASSIGNEE ACKNOWLEDGES THAT ASSIGNOR HAS NOT MADE,
AND ASSIGNOR HEREBY EXPRESSLY DISCLAIMS AND NEGATES, AND ASSIGNEE 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 ASSIGNEE
BY OR ON BEHALF OF ASSIGNOR; AND (c) THE ENVIRONMENTAL CONDITION OF THE ASSETS.
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS ASSIGNMENT, ASSIGNOR EXPRESSLY
DISCLAIMS AND NEGATES, AND ASSIGNEE HEREBY WAIVES, AS TO PERSONAL

                                      -4-
<PAGE>

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 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 ASSIGNEE AND ASSIGNOR THAT THE PERSONAL PROPERTY, EQUIPMENT,
INVENTORY, MACHINERY AND FIXTURES INCLUDED IN THE ASSETS SHALL BE CONVEYED TO
ASSIGNEE, AND ASSIGNEE SHALL ACCEPT SAME, AS IS, WHERE IS, WITH ALL FAULTS AND
IN THEIR PRESENT CONDITION AND STATE OF REPAIR AND ASSIGNEE REPRESENTS TO
ASSIGNOR THAT ASSIGNEE HAS MADE OR CAUSED TO BE MADE SUCH INSPECTIONS WITH
RESPECT TO SUCH PERSONAL PROPERTY, EQUIPMENT, INVENTORY, MACHINERY AND FIXTURES
AS ASSIGNEE DEEMS APPROPRIATE. ASSIGNOR AND ASSIGNEE 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.

                                   ARTICLE III
                                  MISCELLANEOUS

     Section 3.01 Construction. The captions in this Assignment are for
convenience only and shall not be considered a part of or affect the
construction or interpretation of any provision of this Assignment. Assignor and
Assignee acknowledge that they have participated jointly in the negotiation and
drafting of this Assignment and as such they agree that if an ambiguity or
question of intent or interpretation arises hereunder, this Assignment shall not
be construed more strictly against one party than another on the grounds of
authorship.

     Section 3.02 No Third Party Beneficiaries. Nothing in this Assignment 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
hereto that this Assignment shall otherwise not be construed as a Third Party
beneficiary contract.

     Section 3.03 Assignment. This Assignment shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and permitted
assigns.

     Section 3.04 Governing Law. This Assignment, other documents delivered
pursuant hereto and the legal relations between the parties hereto shall be
governed and construed in accordance with the laws of the State of Texas,
without giving effect to principles of conflicts of laws that would result in
the application of the laws of another jurisdiction.

                                      -5-
<PAGE>

     Section 3.05 Counterpart Execution. This Assignment 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 Assignment 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
Assignment, but each counterpart shall be considered an original.

     Section 3.06 Recording. To facilitate the recording or filing of this
Assignment, the counterpart to be recorded in a given county may contain only
that portion of the exhibits that describes Assets located in that county. In
addition to filing this Assignment, the parties hereto shall execute and file
with the appropriate authorities, whether federal, state or local, all forms or
instruments required by applicable law to effectuate the conveyance contemplated
hereby. Said instruments shall be deemed to contain all of the exceptions,
reservations, rights, titles and privileges set forth herein as fully as though
the same were set forth in each such instrument. The interests conveyed by such
separate assignments are the same, and not in addition to the Assets conveyed
herein.

     Section 3.07 Purchase and Sale Agreement. This Assignment is subject to all
of the terms and conditions of the Purchase and Sale Agreement dated June 28,
2006 by and between Assignor and Assignee (the "Agreement").

                            [SIGNATURE PAGES FOLLOW]

                                      -6-

<PAGE>

     IN WITNESS WHEREOF, this Assignment is executed by the parties on the date
of their respective acknowledgments below, but shall be effective for all
purposes as of the Effective Time.

         ASSIGNOR:

                               KINDER MORGAN PRODUCTION COMPANY LP
                               By:      KM Production Company GP LLC,
                                        Its General Partner

                               By:
                                  ----------------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------

         ASSIGNEE:

                               LEGACY RESERVES OPERATING LP
                               By:      Legacy Reserves Operating GP LLC,
                                        Its General Partner

                               By:
                                  ----------------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------

STATE OF TEXAS             SS
                           SS
COUNTY OF ______________   SS

This instrument was acknowledged before me on _________, ____, 2006 by
______________, the _____________ of KM Production Company GP LLC, as general
partner of Kinder Morgan Production Company LP, a Delaware limited partnership
on behalf of such limited partnership.

                                      ------------------------------------------
                                      Notary Public in and for
                                      The State of Texas
                                      Name:
                                           -------------------------------------
                                      My Commission Expires:
                                                            -------------

<PAGE>

STATE OF TEXAS             SS
                           SS
COUNTY OF ______________   SS

This instrument was acknowledged before me on _________, ____, 2006 by
______________, the _____________ of Legacy Reserves Operating GP LLC, as
general partner of Legacy Reserves Operating LP, a Delaware limited partnership
on behalf of such limited partnership.

                                      ------------------------------------------
                                      Notary Public in and for
                                      The State of Texas
                                      Name:
                                           -------------------------------------
                                      My Commission Expires:
                                                            --------------------

<PAGE>

                                 SCHEDULE 12.02

                                 GAS IMBALANCES

                                     [NONE]<PAGE>

                                                                   EXHIBIT 10.16
                           PURCHASE AND SALE AGREEMENT

         This Purchase and Sale Agreement (referred to herein as the
"Agreement") is between HENRY HOLDING LP, a Texas limited partnership whose
address is 3525 Andrews Highway, Midland, TX 79703, (collectively referred to
herein as the "Seller") and LEGACY RESERVES OPERATING LP, a Delaware limited
partnership whose address is 303 West Wall Street, Suite 1600, Midland, Texas
79701, (referred to herein as the "Buyer") is made and entered this 13th day of
June 2006, to be effective for all intents and purposes as of the Effective Time
designated herein.

         Seller and Buyer for and in consideration of the mutual promises and
covenants under this Agreement, the benefits to be derived by each party, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, agree as follows:

                                    ARTICLE 1
                                    RECITALS

         Seller desires to sell to Buyer, and Buyer desires to purchase from
Seller, certain oil and gas properties and related assets on the terms and
conditions set forth in this Agreement.

         Seller and Buyer for and in consideration of the mutual promises and
covenants under this Agreement, the benefits to be derived by each party, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, agree as follows:

                                    ARTICLE 2
                                PURCHASE AND SALE

2.1 Purchase and Sale. Seller agrees to sell and convey all of its right, title
and interest in and to the Property or Properties (as defined in Article 2.2)
and Buyer agrees to purchase the Property or Properties (as defined in Article
2.2), subject to the terms and conditions of this Agreement.

2.2 Properties Defined. The undivided interest described as follows and on
Exhibit "A" (hereafter called the "Property or Properties"):

     (a)  Leases, Lands, Wells and Pooling and Unitization Agreements. All of
          Seller's right, title, and interest of whatever nature in all
          leasehold and other interests in; (i) the oil, gas and mineral leases
          described on Exhibit "A" (the "Leases"), insofar and only insofar as
          said Leases include and pertain to and cover the lands and depths as
          specifically described herein on Exhibit "A" (the "Lands"); (ii) the
          oil and gas wells located on the Leases or on Lands pooled or unitized
          therewith (the "Wells"); and (iii) the units, pooled acreage, spacing
          or proration units or other allocation of acreage applicable to the
          Wells established by or in accordance with the applicable state,
          federal or local law;

     (b)  Production. Hydrocarbons produced from or allocable to the Wells, and
          all proceeds of production subsequent to the Effective Time (as
          defined in Article 2.3);

     (c)  Equipment. Personal property, equipment, fixtures, and improvements
          appurtenant to or located on the Leases or the Lands, or used or
          in connection with the ownership or operation of the
          Properties, and

     (d)  Easements, Contracts, Land Files and Records. (i) appurtenances,
          surface leases, easements, permits, licenses, servitudes and
          rights-of-way; (ii) all leases, farmout agreements, unitization
          agreements, pooling agreements, unit declarations, division orders,
          transfer orders, joint interest billings, accounting, production
          payment/payout records, operating contracts and any other agreements
          and instruments, (iii) lease files, land files, well files, lease
          operating statements for the period covering 2003 through April 30,
          2006, title opinions and reports and other records used in connection
          with the ownership of the Properties.

2.3 Effective Time. The transfer of the Properties shall occur at Closing, which
is defined in Article 7.1, effective as of 12:01 a.m., local time, May 1, 2006,
(the "Effective Time") on the Properties as described herein.

                                                       Initials   Seller /s/ MP
                                                                         ------
                                                                  Buyer  /s/ SP
                                                                         ------

                                  Page 1 of 27
<PAGE>

2.4 Allocation of Revenues and Operating Expenses

     Oil in Storage All oil in storage at the Effective Time, including working
inventory, belongs to Seller.

     "Oil in Storage" for purposes of this Agreement, will mean all oil in
storage above the outlet flange in tanks as of the Effective Time and shall not
include oil in the system downstream of the wellhead at the Effective Time, or
oil below the outlet flange in stock tanks or in wash tanks, heater treaters,
flowlines, and pipelines.

     Oil inventories will be valued based on the realized price received by
Seller for oil sales, from the Properties on the Effective Date.

                                    ARTICLE 3
                                 PURCHASE PRICE

3.1  Purchase Price.

     (a)  Amount. The Purchase Price of the Properties shall be a consideration
          equal to fourteen million dollars ($14,000,000.00) cash consideration
          and a minimum of one hundred thirty-eight thousand (138,000) Legacy
          Reserves LP ("Legacy") units. (Subject to adjustment only as
          hereinafter provided). There shall be a "Registration Rights
          Agreement" substantially in the form of that attached hereto as
          Exhibit "C", as amended and discussed by attorneys for Cotton,
          Bledsoe, Tighe and Dawson and Andrews Kurth LLP as it relates to the
          Legacy units.

     (b)  All cash amounts required under this Article 3 to be paid by Buyer to
          Seller shall be made by wire transfer of immediately available funds
          to an account(s) designated by Seller which designation shall be made
          no later than two (2) business days prior to the date said payment is
          due. These amounts are subject to further adjustment after the Closing
          as provided in this Agreement. Seller may delay or refuse to proceed
          with the Closing should Buyer refuse or fail to comply with payment
          provisions as set forth by Seller. This right on the part of Seller is
          in addition to all other rights and remedies Seller may have under
          this Agreement, at law, or in equity.

     (c)  Buyer and Seller hereby agree that Seller, in lieu of the sale of the
          Properties to Buyer for the cash consideration provided herein, shall
          have the right at any time prior to the Closing to assign all or a
          portion of its rights under this Agreement to a qualified
          intermediary, in order to accomplish the transaction in a manner that
          will comply, either in whole or in part with the requirements of a
          like kind exchange pursuant to Section 1031 of the Internal Revenue
          Code of 1986, as amended. In the event Seller does assign its rights
          under this Agreement pursuant to this Article 3.1(c), Seller agrees to
          notify Buyer in writing of such assignment not less than seven (7)
          days before Closing. If Seller assigns its rights under this
          Agreement, Buyer (i) consents to Seller's assignment of its rights in
          this Agreement, and (ii) deposit the Purchase Price with the qualified
          escrow or qualified trust account at the Closing.

     (d)  Buyer has deposited with Seller, and Seller acknowledges receipt of, a
          performance deposit in the amount of eight hundred fifty thousand
          dollars ($850,000.00) (the "Deposit"), which amount shall be held by
          Seller and distributed as follows:

          (i)  if this Agreement is terminated by mutual consent of the parties
               as provided in Article 8.1, the Deposit shall be returned by
               Seller to Buyer, with interest at a rate of three percent (3%)
               per annum;

          (ii) if this Agreement is terminated by either party pursuant to the
               termination right provided in Article 8.1 and at such time all of
               Buyer's conditions to Closing as set forth in Article 7.3 have
               not been satisfied (and such failure is not due to a breach

                                                       Initials   Seller /s/ MP
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               by Buyer of its obligations hereunder), the Deposit shall be
               returned by Seller to Buyer with interest at a rate of three
               percent (3%) per annum;

          (iii) if this Agreement is terminated by either party pursuant to the
               termination right provided in Article 8.1 and at such time all of
               Buyer's conditions to Closing as set forth in Article 7.3 have
               been satisfied, the Deposit and accrued interest, at a rate of
               three percent (3%) per annum, thereon shall be retained by
               Seller, and

          (iv) if Closing occurs, Seller shall apply the Deposit towards the
               Purchase Price. The performance deposit is not an earnest money
               deposit and if retained by Seller, will be treated as liquidated
               damages. The forfeiture of the performance deposit as provided in
               this Agreement will be the sole remedy of Seller, in lieu of any
               other, the rights and remedies Seller may have under law or in
               equity for Buyer's failure to perform as provided in this
               Agreement.

     (e)  At Closing, Buyer shall pay to Seller the total Purchase Price set
          forth in Article 3.1(a) and deliver evidence of ownership of one
          hundred thirty-eight thousand (138,000) Legacy Units, less an amount
          equal to the deposit set forth in Article 3.1(d) and less any
          adjustments as set forth in Article 4.6(b), plus that amount owing to
          Seller under the provisions of Article 6.4.

                                    ARTICLE 4
                              TITLE & ENVIRONMENTAL

4.1 General Access. Immediately upon execution of this Agreement and prior to
Closing, Seller will provide Buyer, at Buyer's sole risk, cost and expense,
access to the files, records, contracts, correspondence, maps, data, reports,
plats, title opinions and title reports and other documents of Seller pertaining
to the Properties for purposes of determining the existence of any Title
Defects.

4.2 Seller's Title. Seller hereby warrants and represents by through and under
Seller, but not otherwise, to Buyer that Seller's title to the Properties as of
the Effective Time is (and as of the Closing will be) free of "Title Defects",
as defined below. The term "Title Defect" as read herein

4.3 Title Defect. The term "Title Defect" as used herein shall mean any
encumbrance, encroachment, irregularity, defect in or objection to Seller's
title to the Properties (except Permitted Encumbrances) that alone or in
combination with other defects renders Seller's title to the Properties less
than Defensible Title, as defined in Article 5.1(d) below, including; (i) liens
securing unpaid indebtedness or taxes; (ii) preferential rights, consents to
assignment and similar provisions of the type commonly encountered in the oil
and gas industry; (iii) matters indicating that Buyer, or Buyer's successor
could not successfully defend against a claim by any person or entity that a
defect exists as to any Property; (iv) differences between the net revenue
interest or the working interest as set out on Exhibit "A", and the net revenue
interest and working interest determined by Buyer pursuant to its review of
title; (v) obligations to deliver production at a future date without payment
for the production; and/or (vi) a default by Seller under some material
provision of a lease, farmout agreement or agreement affecting any Property.

4.4 Permitted Encumbrances. "Permitted Encumbrances" shall mean: (i) minor
defects in title which do not require the payment of money and otherwise do not
have a material adverse effect on the value or operation of the Properties; (ii)
liens for labor, services, materials or supplies furnished to the Properties
which are not delinquent and which will be paid or discharged in the ordinary
course of business; (iii) liens for taxes or assessments not yet due and not
delinquent; (iv) Lessor's royalties, overriding royalties, division orders and
similar burdens if the net cumulative effect of such burdens does not operate to
reduce the net revenue interest in any of the Properties stipulated on Exhibit
"A" attached hereto by more than five tenths of one percent (0.5%); and (v)
production sale contracts, so long as the prices payable under the contracts are
representative of general arms length market prices being paid for similar
production in the area, unitization and pooling declarations and agreements and
any operating agreements, insofar as such contracts and agreements do not
operate to increase the working interest or decrease the net revenue interest of
Buyer from that stipulated on Exhibit "A" attached hereto; (vi) preferential
rights to purchase and required third party consents to assignments and similar
agreements with respect to which, prior to Closing, (A) waivers or consents are
obtained from the appropriate parties, (B) the appropriate time period for
asserting such rights has expired without an exercise of such rights, or (C)
with respect to consent, failure to obtain consent does not affect the validity
of an assignment to Buyer; (vii) all rights to consent

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by, required notices to, filings with, or other actions by Governmental Bodies
in connection with the sale or conveyance of oil and gas leases or interests
therein if the same are customarily obtained subsequent to such sale or
conveyance; (viii) rights reserved to or vested in any municipality or
governmental, statutory, or public authority to control or regulate any of the
Properties in any manner, and all applicable laws, rules and orders of any
governmental authority; (ix) such Title Defects as Buyer shall have waived; and
(x) liens released at Closing.

4.5 Notice of Title Defects and Environmental Defects. Buyer shall give Seller
notice of any Title Defects and Environmental Defects as soon as practicable.
The notice shall:

     (a)  be in writing;

     (b)  describe in sufficient detail the nature of Title Defect and/or
          Environmental Defects and include appropriate evidence to substantiate
          the Title Defect and/or Environmental Defect;

     (c)  describe the steps and actions (in reasonable detail) which are
          necessary in Buyer's opinion for the curing of identified Title
          Defects and recommended options for handling Environmental Defects;

     (d)  be delivered to Seller as soon as possible, but in no event later than
          three (3) business days prior to the Closing.

Buyer shall be deemed to have waived all Title Defects and Environmental Defects
of which Seller has not been given such notice.

4.6 Remedies for Title Defects. Seller shall have two (2) business days after
receipt of Buyer's notification as to a specific Title Defect in which to
provide Buyer written evidence that the subject Title Defect has been either
cured or removed. Should Seller fail or be unable to provide evidence of Title
Defect curative or removal then Buyer may at its option:

     (a)  waive such Title Defect; or

     (b)  (i) terminate this Agreement without further liability hereunder, if
          Buyer has, in good faith, determined that a Title Defect individually
          (or Title Defects in the aggregate) will materially and adversely
          reduce the net value of the Properties affected by an amount equal to
          or greater than six hundred thousand dollars ($600,000.00); or (ii)
          agree with Seller to a mutually agreeable adjustment to the Purchase
          Price, or (iii) take such other action as may be mutually agreed by
          the parties hereto.

     Should Seller be unable to provide evidence of Title Defect curative or
desire to not make adjustment to the Purchase Price and it is determined by
Seller that such Title Defect will materially and adversely reduce the net value
of the Properties affected by an amount equal to or greater than $500,000.00,
Seller may terminate this Agreement.

     If Buyer notifies Seller of a Title Defect, as provided for in Article 4.5,
which Buyer desires to have cured, Seller agrees to cooperate with Buyer prior
to the Closing in endeavoring to cure any such defects (but Seller shall have no
obligation shall not include the obligation to pay money or to undertake any
legal obligation). Buyer agrees to bear the cost of examining the title data
furnished by Sellera as curative hereunder, if any, or obtained by Buyer.

4.7 Environmental Defects. Buyer is aware that the interests and property have
been used for exploration, development, and production of oil and gas and that
there may be petroleum, produced water, wastes, or other materials located on or
under the Property or associated with the interests. Equipment and sites
included in the interests or property may contain asbestos, hazardous
substances, or NORM. Not withstanding anything to the contrary in this Agreement
(including, without limitation, the provisions of Article 5.6 hereof), (a) this
Article 4.7 and Article 5.5 contains all representations and warranties with
regard to any Environmental Laws (as hereinafter defined) and, except as
expressly set forth in this Article 4.7 Article 5.5, SELLER EXPRESSLY DISCLAIMS
ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, REGARDING OR IN ANY WAY
RELATING TO OBLIGATIONS OR LIABILITIES UNDER ANY ENVIRONMENTAL LAWS OR THE
ENVIRONMENTAL

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CONDITION OF THE PROPERTIES, and (b) it makes no representation or warranty of
any kind whatsoever regarding the presence or absence of any naturally occurring
radioactive materials ("NORMs") on or near any of the Properties, and Buyer
shall not be entitled to any adjustment to the Purchase Price or any other
remedy or settlement of any kind whatsoever except as provided for in this
Article 4.7, and it shall have no obligation or liability of any kind whatsoever
to Buyer or any of its successors or assigns, with respect to any NORMs. To the
best of Seller's knowledge, (i) neither the Properties nor the operation thereof
are in violation of any Environmental Laws in any material respect and (ii) it
has not received any notice from any Governmental Authority (as hereinafter
defined) of any violation of any Environmental Laws. For purposes of this
Agreement, the term "Environmental Laws" shall mean, as to any given Property,
all laws, statutes, ordinances, rules and regulations of any Governmental
Authority pertaining to protection of the environment in effect as of the
Effective Time and as interpreted by court decisions or administrative orders as
of the Effective Time in the jurisdiction in which such Property is located. For
purposes of this Article 4.7 the term "Governmental Authority" shall mean, as to
any given Property, the United States and the state, county, parish, city and
political subdivisions in which such Property is located and which exercises
jurisdiction over such Property, and any agency, department, board or other
instrumentality thereof that exercises jurisdiction over such Property.

When elected operator or upon Closing, Buyer will assume all liability for the
assessment, remediation, removal, transportation, and disposal of wastes,
asbestos, hazardous substances, and NORM from the interests and property and
associated activities and will conduct these activities in accordance with all
applicable laws and regulations, including the Environmental Laws.

Buyer will have until twelve (12) days after the Execution Date of this
Agreement or five (5) days before the Closing Date, whichever is earlier, to
notify Seller of any material adverse environmental condition associated with
the Property that Buyer finds unacceptable and that has an estimated cost net to
the Property greater than $250,000.00 and is documented by third party evidence
of said condition for which remediation is required under any Environmental Law.
Upon Seller's receipt of such notification, Seller will have until two (2) days
before the Closing Date in which to either:

     (a)  proceed with Closing and account for said costs for the remediation of
          the condition contained in Buyer's notification as a normal Unit
          operating expense item in the Post Closing Adjustment, or

     (b)  terminate this Agreement.

     Seller may, at Seller's option, delay Closing, if necessary, to remedy the
Environmental Matter.

     Should Seller elect to remedy the condition set forth in Article 4.7 (a)
above, Seller shall remain as operator of the Property and continue remediation
of the condition until the first of the following occur:

     (I)  the appropriate governmental authorities provide written notice to
          Seller or Buyer that no further remediation of the condition is
          required to comply with the applicable Environmental Laws; or

     (II) An independent third party determines that the condition has been
          remediated to the level required by the Environmental Laws or as
          mutually agreed to by Buyer and Seller.

     Upon the occurrence of either (I) or (II) above, Seller will notify Buyer
that remediation of the condition is complete and provide a copy of the
notification provided in (I) above, if applicable. Upon delivery of Seller's
notice, Seller will be released from all liability and have no further
obligations under Article 4.7 and Article 5.5 of this Agreement.

     Buyer, for that period of time for which Buyer is operator of the
Properties, Buyer will store, handle, transport, and dispose of or discharge all
materials, substances, and wastes from the interests and property (including
produced water, drilling fluids, NORM, and other wastes), whether present before
or after the Effective Time, in accordance with applicable local, state, and
federal laws and regulations. Buyer will keep records of the types, amounts, and
location of materials, substances, and wastes that are transported, handled,
discharged, released, or disposed of onsite and offsite.

     Notwithstanding any other provision within this Article 4.7, Buyer shall
have the right to waive all such Environmental Matters and proceed with Closing.

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                                    ARTICLE 5
                         REPRESENTATIONS AND WARRANTIES

5.1 Seller's Representations and Warranties. Seller represents and warrants to
Buyer as follows:

     (a)  Description and Title. Seller represents and warrants that Exhibit "A"
          sets forth a true, complete and legally sufficient description of the
          Properties. It is understood that pursuant to this Agreement, Seller
          warrants title to the Properties as set forth on Exhibit "A" by,
          through and under Seller only, but not otherwise.

     (b)  Organization, Standing and Power. Seller is validly existing and in
          good standing under the laws of the States of Texas and New Mexico and
          has all requisite powers and authority to own, lease, operate, sell
          and convey the Properties and to carry on its business as is now being
          conducted.

     (c)  Authority and Enforceability. The execution and delivery of this
          Agreement, and the consummation of the transactions contemplated
          hereby, have been duly and validly authorized by all necessary action
          on the part of Seller. This Agreement is the valid and binding
          obligation of Seller, enforceable against Seller in accordance with
          its terms. Neither the execution and delivery by Seller of this
          Agreement nor the consummation of the transactions contemplated hereby
          nor the compliance by Seller with any of the provisions hereof will
          conflict with or result in a breach of any provision of Seller's
          organization documents or by-laws. The execution and delivery hereof
          by Seller does not, and the fulfillment and compliance with the terms
          and conditions hereof, and the consummation of the transactions
          contemplated hereby, will not result in the creation or imposition of
          any lien, charge or other encumbrance on the Properties.

     (d)  Seller's Title to Properties. Seller has Defensible Title to the
          Properties. The term "Defensible Title" shall mean in the case of the
          leasehold interests listed on Exhibit "A", such right, title and
          interest (owned beneficially or of record) that, except for Permitted
          Encumbrances:

          (i)   is free from reasonable doubt that a prudent person engaged in
                the business of purchasing and owning, developing and operating
                producing oil and gas properties with knowledge of all of the
                facts and their legal effect would be willing to accept the
                title;

          (ii)  entitles Seller to receive not less than the interest set forth
                in Exhibit "A" as the net revenue interest with respect to all
                of the oil, gas, and hydrocarbon minerals produced, saved and
                marketed from each unit or well, as the case may be, that
                relates to Seller's producing interval in the lands and depths
                included within each property identified in Exhibit "A";

          (iii) obligates Seller to pay costs and expenses relating to the
                operations on and the maintenance and development of each unit
                or well, as the case may be, that relates to Seller's producing
                interval in the lands and depths included within each property,
                in an amount not greater than the working interest set forth in
                Exhibit "A";

          (iv)  is free and clear of any mortgages, pledges, deeds of trust,
                hypothecations and production payments;

          provided, however, that with respect to clauses (ii) and (iii) above
          Seller's title shall nevertheless be deemed to constitute "Defensible
          Title" if (a) the difference between Seller's actual interest and the
          interest set forth in Exhibit "A" for each unit or well included
          within an individual property is proportionately reduced by 0.5% or
          less than the interest set forth in Exhibit "A" (by way of example,
          and without limiting the generality of the foregoing, if the net
          revenue interest shown on Exhibit "A" for each unit or well included
          within a property is 13.11%, Seller shall have Defensible Title to
          such leasehold interest if it is entitled to receive not less than
          13.04445% of all oil and gas produced from such property) or (ii) the
          value of any difference between Seller's actual interest in the
          interest set forth in Exhibit "A" is less than $85,000.00. For
          purposes of this Article

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          5.1(d), "owned beneficially or of record" means Seller's ownership
          interest reflected of record in the office of the county clerk in the
          county where the relevant lands are located, ownership interests
          reflected with respect to federal or state owned lands, in the office
          of the federal or state agency having jurisdiction, subject to and as
          impacted by the terms and provisions of the Permitted Encumbrances.

5.2 Buyer's Representations and Warranties. Buyer represents and warrants to
Seller as follows:

     (a)  Organization, Standing and Power. Buyer is a limited partnership duly
          organized, validly existing and in good standing under the laws of the
          State of Delaware and has all requisite powers and authority to own,
          lease and operate the Properties and to carry on its business as is
          now being conducted in the jurisdictions where the nature of its
          properties or business so requires such qualification.

     (b)  Authority and Enforceability. The execution and delivery of this
          Agreement, and the consummation of the transactions contemplated
          hereby, have been duly and validly authorized by all necessary
          corporate action on the part of Buyer. This Agreement is the valid and
          binding obligation of Buyer, enforceable against Buyer in accordance
          with its terms. Neither the execution and delivery by Buyer of this
          Agreement nor the consummation of the transactions contemplated hereby
          nor the compliance by Buyer with any of the provisions hereof will
          conflict with or result in a breach of any provision of Buyer's
          limited partnership agreement. The execution and delivery hereof by
          Buyer does not, and the fulfillment and compliance with the terms and
          conditions hereof and the consummation of the transactions
          contemplated hereby will not, result in the creation or imposition of
          any lien, charge or other encumbrance on the Properties.

     (c)  Warranty Maintenance. Buyer shall cause all the representations and
          warranties of Buyer contained in this Agreement to be true and correct
          on and as of the Closing Date. To the extent the conditions precedent
          to the obligations of Seller are within the control of Buyer, Buyer
          shall cause such conditions to be satisfied on or prior to the Closing
          Date and, to the extent the conditions precedent to the obligations of
          Seller are not within the control of Buyer, Buyer shall use its best
          efforts to cause such conditions to be satisfied on or prior to the
          Closing Date.

     (d)  Buyer represents that it did not solely rely upon representations or
          materials provided to Buyer by Seller or Seller's marketing agents in
          evaluating the Properties, but rather has relied upon its individual
          evaluations and due diligence.

     (e)  Buyer represents that it has sufficient funds on hand or commitments
          from one or more banking institutions to fund payment of the cash
          consideration of the Purchase Price at the Closing.

5.3 Gas Imbalances. To the best of Seller's knowledge, no gas imbalance exists
with respect to the Properties.

5.4 Leases. To the best of Seller's knowledge, the Leases have been maintained
according to their material terms, in compliance with the agreements to which
the Leases are subject, and are presently in full force and effect. To the best
of Seller's knowledge, there has not occurred any event, fact or circumstance
which with the lapse of time or the giving of notice, or both, would constitute
such a material breach or default on behalf of Seller under the provisions of
the Leases.

5.5 Environmental Matters: Buyer agrees and acknowledges that (i) it has had, or
prior to the Closing will have access to and the opportunity to inspect the
Properties for all purposes, including without limitation, for the purposes of
detecting the presence of hazardous or toxic substances, pollutants or other
contaminants, environmental hazards, naturally occurring radioactive materials
(NORM) and produced water contamination of the surface and/or subsurface, (ii)
it has, or prior to the Closing will have, satisfied itself as to the physical
and environmental condition of the Properties, both surface and subsurface, and
their method of operation and except as set forth herein, agrees to accept an
assignment of the Properties at Closing on an "AS IS, WHERE IS" basis, "WITH ALL
FAULTS", save and except as provided for in Article 4.7, and (iii) in making the
decision to enter into this Agreement and consummate the transactions

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contemplated hereby, Buyer has relied solely on the basis of its own independent
investigation of the Properties and the records related thereto.

     If the Closing occurs, Buyer hereby assumes and shall be responsible for
and agrees to indemnify, defend and hold harmless Seller from and against any
and all claims, liability or losses, (including, without limitation, losses from
damage to property, alleged groundwater contamination, injury to or death of
persons or other living things, natural resource damages, CERCLA response costs,
environmental remediation and restoration costs or fines) or penalties arising
out of or attributable to, in whole or in part by a violation of, failure to
fulfill duties imposed by or incurrence of liability under any common law
relating to human health, safety or the environment or any Environmental Laws
(an "Environmental Matter") occurring at any time before, at or after the
Effective Time WITHOUT REGARD TO THE SOLE, PARTIAL OR CONCURRENT NEGLIGENCE,
STRICT LIABLITY OR OTHER FAULT OF THE SELLER; provided, however, that Seller
shall indemnify, defend and hold harmless the Buyer from and against any and all
losses resulting from any Environmental Matter occurring at any time prior to
the Effective Time to the extent that such losses result from the gross
negligence or willful misconduct of Seller or that have been asserted in a
third-party lawsuit or administrative proceeding or order that is filed, issued
or commenced against Seller or has been documented by Buyer to Seller in writing
on or before the Closing Date.

5.6 Litigation. To the best of Seller's knowledge, there are no actions, suits,
claims, proceedings, agency enforcement actions or investigations pending, or to
the best knowledge of Seller, threatened against or affecting the Properties.
There is no suit, action, claim, investigation or inquiry by any person or
entity or by any administrative agency or governmental body and no legal,
administrative or arbitration proceeding pending, or, to the best knowledge of
Seller threatened against Seller which has affected or could affect Seller's
ability to consummate the transaction contemplated by this Agreement.

                                    ARTICLE 6
                                    COVENANTS

6.1 Covered Area. This Agreement is limited to the Properties and interest
described on Exhibit "A".

6.2 Existing Agreements, Assignments and Conveyances. This Agreement and the
Assignment of Oil and Gas Leases are further subject to the terms and conditions
of all existing agreements, assignments and conveyances.

6.3 New Agreements and Sales. Unless this Agreement is terminated as provided
for herein, Buyer and/or Seller will not, without the prior written consent of
the other: a) enter into any new agreements or commitments with respect to the
Properties which extend beyond the Effective Time; b) drill any new wells,
abandon any existing wells or release or abandon all or any portion of the lands
included within any lease or modify or terminate any contracts and agreements
affecting the Properties and sell or otherwise dispose of any of the Properties
or any part thereof, other than personal property and equipment unless it is
replaced with personal property and equipment of equivalent quality and value.
From the date hereof until the Closing, Seller shall maintain the Properties in
a good and workmanlike manner consistent with past practice.

6.4 Maintenance of Seller's Business. Seller shall carry on the business of
Seller with respect to the Properties in substantially the same manner as Seller
has heretofore and shall not introduce any new method of management, operation
or accounting with respect to the Properties. Henry Petroleum LP shall continue
as operator of the Properties until such time as a successor operator has been
named. Buyer agrees to pay Seller an amount equal to $30,000.00/month for each
month, (partial or whole month), for each succeeding month following the
Effective Time for which Henry Petroleum LP continues to operate the Properties.

6.5 Notification of Breach. Seller shall promptly notify Buyer (i) if any
representation or warranty of Seller contained in this Agreement is discovered
to be or becomes untrue or (ii) if Seller fails to perform or comply with any
covenant or agreement contained in this Agreement or it is reasonably
anticipated that Seller will be unable to perform or comply with any covenant or
agreement contained in this Agreement.

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                                    ARTICLE 7
                                     CLOSING

7.1  Date and Place of Closing The purchase by Buyer and the sale by Seller of
     the Properties as contemplated by this Agreement (the "Closing") shall be
     held on or before June 30, 2006, at the offices of Henry Petroleum LP,
     placeCityMidland, StateTexas. However, Buyer may, at its option and upon
     approval by Seller, accelerate the date of the Closing upon giving Seller
     three (3) business days prior written notice, if, on or before the date of
     such notice, Buyer has also notified Seller of any Title Defects as
     provided for herein. Additionally, the parties may mutually agree in
     writing on a different date and place for the Closing.

     Delay in Closing. In the event that Closing is delayed beyond July 15,
     2006, and such delay is not due to failure to close on the part of Seller,
     then interest at the rate of three percent (3%) per annum shall accrue to
     the Purchase Price until the date of actual Closing or termination of this
     Agreement and shall be payable to Seller by Buyer at the time of Closing or
     termination.

7.2 Conditions of Closing by Seller. The obligation of Seller to close is
subject to the satisfaction of the following conditions:

     (a)  All representations and warranties of Buyer contained in this
          Agreement shall be true, correct, and not misleading in all material
          respects, and Buyer shall have performed and satisfied all agreements
          and covenants in all material respects required by this Agreement to
          be performed and satisfied by Buyer; and

     (b)  No suit or other proceeding shall be pending or threatened before any
          court or governmental agency seeking to restrain, prohibit, or declare
          illegal, or seeking substantial damages in connection with the
          transaction contemplated hereby.

     (c)  Should there be downward adjustments to the Purchase Price in excess
          of $500,000.00, due to asserted Title Defects and Environmental
          Defects, Seller has the option to terminate this Agreement with no
          liability to Buyer other than return of the Deposit and interest at
          the rate of 3% per annum.

7.3 Conditions of Closing by Buyer. The obligation of Buyer to close is subject
to the satisfaction of the following conditions:

     (a)  All representations and warranties of Seller contained in this
          Agreement shall be true, correct, and not misleading in all material
          respects, and Seller shall have performed and satisfied all agreements
          and covenants in all material respects required by this Agreement to
          be performed and satisfied by Seller;

     (b)  No suit or other proceeding shall be pending or threatened before any
          court or governmental agency seeking to restrain, prohibit, or declare
          illegal, or seeking substantial damages in connection with the
          transaction contemplated hereby; and

     (c)  No material adverse change in the condition of or title to the
          Properties shall have occurred subsequent to the Effective Time,
          except depletion through normal production within authorized
          allowables, ordinary changes in rates of production, and depreciation
          of equipment through ordinary wear and tear.

     (d)  Seller will make available to Buyer's auditors for up to one year
          after Closing, at reasonable business hours and at the offices of
          Seller, those accounting files, (including but not limited to monthly
          statements of revenues derived from sales of hydrocarbons from the
          Properties and the operating expenses and capital costs related to the
          Properties, monthly COPAS charges and associated expenses, invoices
          and hydrocarbon purchaser statements related to the Properties over
          the period beginning January 1, 2003 through April 30, 2006) necessary
          for Buyer to construct a three (3) year history of property level
          revenues and expenses for the Properties.

     (e)  Henry Petroleum LP ("HPLP"), Henry Heirs, and Buyer will continually
          vote their combined seventy-five and twenty seven one hundredths
          percent (75.27%) voting interest

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<PAGE>
          in the South Justis Unit for Buyer to become the successor operator to
          Henry Petroleum LP for as long as Buyer, Henry Petroleum LP and Henry
          Heirs own an interest in the Properties.

     (f)  Seller has provided Buyer or its legal counsel all material documents
          related to the HPLP-ARCO/BP South Justis Unit transaction.

     (g)  HPLP acquired certain surface acreage as recorded in Volume 1081 at
          page 674 of placeCityLea County, StateNew Mexico records from Atlantic
          Richfield Company ("ARCO") under that certain Assignment, Bill of Sale
          and Surface Deed effective May 1, 2001. HPLP will hold title to the
          surface for the benefit of HPLP and the South Justis Unit working
          interest owners until such time that HPLP conveys its working interest
          and ARCO conveys its net profits interest in the South Justis Unit, or
          such time as the South Justis Unit is terminated. At such time as HPLP
          and ARCO convey their South Justis Unit ownership to a third party,
          HPLP will convey title to the subject surface to the South Justis Unit
          operator for the benefit of the South Justis Unit working interest
          owners. No costs will be charged by HPLP to the working interest
          owners for the use of the subject land.

7.4 Closing Obligations. At the Closing, the following shall occur:

     (a)  Seller shall execute, acknowledge and deliver to Buyer, the original
          Assignment of Oil and Gas Leases and Bill of Sale attached hereto as
          Exhibit "B" (the "Assignment"), conveying title to the Properties to
          Buyer, as well as such certificates or other documents as are required
          to effect the transfer of the Properties, and support the election of
          Buyer as operator of the South Justis Unit as provided for in Article
          7.3(e).

     (b)  Buyer and Seller shall execute, acknowledge and deliver to each other
          the Registration Rights Agreement in the form attached hereto as
          Exhibit "C".

     (c)  Seller will provide Buyer with copies of all lease, land and well
          files pertaining to the Properties in the possession of Seller. All
          books, records and files or copies of such data, in the possession of
          Seller pertaining to the Properties, including, without limitation,
          all well files, correspondence, title opinions and title reports,
          geological, geophysical and engineering information, except for that
          data prohibited by third party confidentiality agreements, shall be
          made available for delivery to Buyer, at Buyer's cost, at Seller's
          offices where currently maintained, within fifteen (15) business days
          after the Closing. Seller shall have the right to retain originals or
          copies of any or all of such books, records and accountingfiles and to
          retain canceled checks and general ledger, purchasing and other
          general accounting records of Seller. Buyer's reliance on same shall
          be at Buyer's sole risk.

     (d)  Seller shall deliver to Buyer exclusive possession of the Exhibit "A"
          interests.

     (e)  Seller and Buyer shall execute, acknowledge and deliver such transfer
          orders or letters in lieu thereof as Buyer may request, directing all
          purchasers of production to make payment of proceeds attributable to
          production from the Properties after the Effective Time to Buyer.

     (f)  Henry Petroleum LP ("HPLP") shall resign as Operator and HPLP and
          Henry Heirs shall vote for Buyer as successor operator.

     (g)  Buyer shall deliver the cash consideration of Article 3.1(e) portion
          of the purchase price to Seller by Wire Transfer on the date of
          Closing less an amount equal to the proceeds received less costs paid
          by Seller attributable to the operation of and production from the
          Properties after the Effective Time and less any adjustments due to
          Title Defects and/or Environmental Matters as applicable as set out in
          Article 4. Additionally Buyer shall shall provide Seller with evidence
          of Seller's ownership of a minimum of one hundred thirty-eight
          thousand (138,000) Legacy Units to Seller.

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                                                                         ------
                                                                  Buyer  /s/ SP
                                                                         ------

                                  Page 10 of 27
<PAGE>
7.5 Post Closing Adjustment and Accounting . Any adjustments pursuant to this
Article will be made at Closing, if possible. Should adjustment amounts be
indeterminable as of Closing, Seller shall prepare a Post Closing settlement
statement containing adjustments, including but not limited to the following,
and will be made within, and only within, ninety (90) days of Closing:

     (a)  Upward Adjustments. The Purchase Price shall be adjusted upward by the
          following:

          (i)   The amount of all direct costs and expenditures chargeable to
                Seller's interest incurred and paid by Seller:

                    (A)  that are attributable to the drilling, completion,
                         recompletion, reworking, operation and maintenance of
                         the Properties on and after the Effective Time;

                    (B)  bonuses, lease rentals and shut-in payments due after
                         (and expressly excluding those due before) the
                         Effective Time;

                    (C)  ad valorem, property and other taxes that are allocated
                         to the Buyer pursuant to Article 7.5(d) herein below;
                         and

                    (D)  amounts relating to obligations arising under the
                         Contracts relating to the Properties with respect to
                         operations or production after the Effective Time;

          (ii)  The value of all Hydrocarbons, which have been produced and are
                merchantable, and are in storage in tanks above the outlet
                flange delivery point and credited to the Properties as of the
                Effective Time, net of all severance taxes, and less an
                appropriate deduction based on industry practice for basic
                sediment, water and other non-merchantable liquids;

          (iii) Any other amount agreed upon by Seller and Buyer, and

          (iv)  Additional Legacy Reserves, LP units will be issued to Seller if
                the 3rd quarter distribution, on an annualized basis, is less
                than $1.74 per unit. If such distribution is less, the amount of
                additional shares will be calculated by comparing the actual 3rd
                quarter 2006 annualized distribution to $1.74 per unit, and
                adjusting the number of units issued upward by taking the ratio
                of $1.74 to the new annualized distribution rate for the 3rd
                quarter, less one, with the result multiplied by the minimum of
                138,000 units. Such additional shares would be issued to Seller
                no later than December 1, 2006.

          (v)   That amount described in Article 6.4.

     (b)  Downward Adjustments. The Purchase Price shall be adjusted downward by
          the following:

          (i)   The amount of all proceeds received by Seller that are
                attributable to the ownership and operation of the Properties on
                or after the Effective Time;

          (ii)  The following amounts:

                    (A)  all direct unrelated costs and expenditures chargeable
                         to Seller's interest that are attributable to the
                         drilling, completion, recompletion, reworking,
                         operation and maintenance of the Properties prior to
                         the Effective Time,

                    (B)  all bonuses, lease rentals and shut-in payments due
                         prior to the Effective Time, and

                    (C)  amounts relating to obligations arising under the
                         Property Contracts, all with respect to operations and
                         production prior to the Effective Time.

          (iii) Those amounts resulting from Title Defects and/or Environmental
                Defects, as provided in Article 4 and

          (iv)  Any other amount agreed upon by Seller and Buyer.

     (c) Seller shall be entitled to all proceeds and shall be responsible for
     all expenses and other liabilities prior to said Effective Time, and that
     Buyer shall be entitled to all proceeds and shall be responsible for all
     expenses and liabilities, including plugging of the wells, after the
     Effective Time.

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                                                                         ------
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                                                                         ------

                                  Page 11 of 27
<PAGE>

     (d) All taxes, real property taxes and similar obligations for the current
     year shall be prorated based upon the prior year's tax rates if tax
     statements for the current year have not been received by Seller within
     ninety (90) days following Closing.

7.6 Buyer will furnish to Seller monthly the necessary records and information
to allow Seller to continue to calculate the Net Profit Overriding Royalty
Interest between HPLP and ARCO.

7.7 The parties have determined that the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 does not apply to this transaction.

                                    ARTICLE 8
                                   TERMINATION

8.1 Termination. This Agreement and the transactions contemplated may be
terminated in the following instances:

     (a)  by Buyer or Seller in accordance with Article 4.6, concerning Remedies
          for Title Defects;

     (b)  by the mutual written agreement of Buyer and Seller;

     (c)  by Buyer if the conditions set forth in Article 5.1 and or Article 7.3
          are not satisfied in all material respects or waived prior to the
          Closing Date, and notwithstanding any other provisions of this
          Agreement to the contrary, by Buyer if the Buyer is not in default
          hereunder and the Closing has not occurred onor before July 15, 2006;

     (d)  by Seller if the conditions set forth in Article 5.2 and/or Article
          7.2 are not satisfied in all material respects or waived prior to the
          Closing Date, and notwithstanding any other provisions of this
          Agreement to the contrary, by the Seller if the Seller is not in
          default hereunder and the Closing has not occurred on or before the of
          July 15, 2006.

8.2 Remedies. If Closing does not occur on the Closing Date, as that may be
extended by Seller and Buyer hereunder, due to Seller's breach of the terms of
this Agreement, then Buyer may seek such legal or equitable remedies to which
Buyer may be entitled including the right to enforce specific performance of
this Agreement. If Closing does not occur due to Buyer's breach of the terms of
this Agreement, Seller may retain the Deposit plus interest at the rate of 3%
per annum as its sole remedy hereunder.

                                    ARTICLE 9
                                   DISCLAIMER

ANY ASSIGNMENT AND BILL OF SALE EXECUTED PURSUANT HERETO SHALL BE EXECUTED
WITHOUT ANY EXPRESS OR IMPLIED WARRANTY OR REPRESENTATION AS TO THE
MERCHANTABILITY OF ANY OF THE WELLS OR EQUIPMENT OR THEIR FITNESS FOR ANY
PURPOSE, AND WITHOUT ANY OTHER EXPRESS OR IMPLIED WARRANTY OR REPRESENTATION
WHATSOEVER EXCEPT AS EXPRESSLY SET FORTH IN SAID ASSIGNMENT AND BILL OF SALE. IT
IS UNDERSTOOD AND AGREED THAT BUYER SHALL HAVE INSPECTED THE PROPERTY AND
PREMISES AND SATISFIED ITSELF AS TO THEIR PHYSICAL AND ENVIRONMENTAL CONDITION,
BOTH SURFACE AND SUBSURFACE, AND THAT BUYER SHALL ACCEPT ALL OF THE SAME IN
THEIR "AS IS, WHERE IS" CONDITION. IN ADDITION NEITHER, SELLER, NOR SELLER'S
REPRESENTATIVE (HENRY PETROLEUM LP), MAKES ANY WARRANTY OR REPRESENTATION,
EXPRESS OR IMPLIED, AS TO THE ACCURACY OR COMPLETENESS OF ANY DATA, INFORMATION
OR MATERIALS HERETOFORE OR HEREAFTER FURNISHED BUYER IN CONNECTION WITH THE
PROPERTIES, OR AS TO THE QUALITY OR QUANTITY OF HYDROCARBON RESERVES (IF ANY)
ATTRIBUTABLE TO THE PROPERTIES OR THE ABILITY OF THE PROPERTIES TO PRODUCE
HYDROCARBONS. ANY AND ALL SUCH DATA, INFORMATION AND OTHER MATERIALS FURNISHED
BY SELLER AND SELLER'S REPRESENTATIVE IS PROVIDED BUYER AS A CONVENIENCE AND ANY
RELIANCE ON OR USE OF THE SAME SHALL BE AT BUYER'S SOLE RISK. BUYER EXPRESSLY
WAIVES THE PROVISIONS OF CHAPTER XVII,

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                                                                         ------
                                                                  Buyer  /s/ SP
                                                                         ------

                                  Page 12 of 27
<PAGE>
SUBCHAPTER E, SECTIONS 17.41 THROUGH 17.63, INCLUSIVE (OTHER THAN SECTION
17.555, WHICH IS NOT WAIVED), VERNON'S TEXAS CODE ANNOTATED BUSINESS AND
COMMERCE CODE (THE "DECEPTIVE TRADE PRACTICES ACT").

                                   ARTICLE 10
                                  MISCELLANEOUS

10.1 Notices. All notices required or permitted under this Agreement shall be in
     writing, and any notice hereunder shall be deemed to have been made if
     delivered by: (i) hand; (ii) overnight delivery service; (iii) telecopy; or
     (iv) when placed in first class certified mail, postage prepaid, with
     return receipt requested to the address as set forth below. Either party
     may, by written notice deliver to the other, change the address to which
     notices shall be delivered.

                           Seller:  Henry Holding LP
                                    ----------------------------
                                    3525 Andrews Highway
                                    ----------------------------
                                    Midland, TX 79703
                                    ----------------------------
                                    Attn: Land Manager
                                    ----------------------------

                            Buyer:  Legacy Reserves Operating LP
                                    ----------------------------
                                    303 West Wall, Suite 1600
                                    ----------------------------

                                    ----------------------------
                                    Midland, Texas 79701
                                    -----------------------------------
                                    Attn:   Mr. Kyle A. Mc Graw
                                    ----------------------------

                     With Copy to:  Lynch, Chappell & Alsup
                                    ----------------------------
                                    300 N. Marienfeld, Suite 700
                                    ----------------------------
                                    Midland, Texas 79701
                                    -----------------------------------
                                    Attn:   Mr. James M. Alsup
                                    ----------------------------

10.2 Reservations and Exceptions. Sale and purchase of the Properties is made
subject to all reservations, exceptions, limitations, contracts and other
burdens or instruments which are of record or of which Buyer has notice,
including any matter included or referenced in the materials made available by
Seller to Buyer.

10.3 Entire Agreement. This instrument states the entire agreement between Buyer
and Seller and supersedes all other agreements, either written or oral, between
Seller and Buyer concerning the sale and purchase of the Properties. This
Agreement may be supplemented, altered, amended, modified or revoked in writing
only, signed by all of the parties. No material representation, warranty,
covenant, agreement, promise, inducement or statement, whether oral or written,
has been made by Seller or Buyer and relied upon by the other that is not set
forth in this Agreement or in the instruments referred to herein, and neither
Seller nor Buyer shall be bound by or liable for any alleged representation,
warranty, covenant, agreement, promise, inducement or statement not so set
forth.

10.4 Survival of Agreements. All agreements, indemnities, representations and
warranties of the parties provided herein shall survive the Closing and delivery
of the closing document to the parties.

10 5 Assignability. This Agreement shall be binding upon and shall inure to the
benefit of the parties and their respective successors and assigns; provided,
however, neither Buyer or Seller may, prior to the Closing, assign its rights or
delegate its duties or obligations under this Agreement without the prior
written consent of the other party.

10.6 Publicity. Seller and Buyer shall consult with each other with regard to
all publicity and other releases at or prior to the Closing concerning this
Agreement and the transaction contemplated hereby and except as required by
applicable law or other applicable rules or regulations of any governmental body
or stock exchange, neither party shall issue any publicity or other release
without the prior written consent of the other party.

10.7 Further Assurance. After Closing each of the parties shall execute,
acknowledge and deliver to the other such further instruments, and take such
other actions as may be reasonably necessary to carry out the provisions of this
Agreement. However, Buyer shall assume all responsibility for notifying the
purchaser

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                                                                         ------

                                  Page 13 of 27
<PAGE>
of oil and gas production from the Properties, and such other designated persons
who may be responsible for disbursing payments for the purchase of such
production, of the change of ownership of the Properties. Buyer shall take all
actions necessary to effectuate the transfer of such payments to Buyer as of the
Effective Time.

10.8 Destruction. For a period of five (5) years after the Closing Date (or for
such longer period as may be required by law or governmental regulation), Buyer
shall not intentionally destroy or give up possession of any original or final
copy of the documents delivered by Seller to Buyer hereunder without first
offering Seller the opportunity (by delivery of written notice to Seller), at
Seller's expense (without any payment to Buyer), to obtain such original or
final copy or a copy thereof.

10.9 Headings. The headings are for guidance only and shall have no significance
in the interpretations of this Agreement.

10.10 Counterpart Execution. This Agreement may be executed by Buyer and Seller
in any number of counterparts, no one of which need be executed by all parties.
Each of such counterparts shall be deemed an original instrument, and all
counterparts shall together constitute but one and the same instrument. This
agreement shall become operative when each party has executed at least one
counterpart.

10.11 Severance. If any provision of this Agreement shall be determined void,
illegal or unenforceable, all of the other provisions of this Agreement shall
remain in full force and effect, and the provision or provisions that are
determined to be void, illegal or unenforceable shall be limited so that they
shall remain in effect to the extent permitted by law.

10.12 Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HERETO SHALL BE GOVERNED, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF TEXAS WITHOUT REFERENCE TO CONFLICT OF LAWS. THE PARTIES
AGREE THAT ANY LITIGATION RELATING DIRECTLY OR INDIRECTLY TO THIS AGREEMENT MUST
BE BROUGHT BEFORE AND DETERMINED BY A COURT OF COMPETENT JURISDICTION WITHIN THE
STATE OF TEXAS.

10.13 Disclosure of Information. Seller agrees (i) to provide Buyer with
Disclosure Information (as defined below for a 36-month period ending no later
than June 30, 2006 and (ii) to reasonably cooperate with and assist Buyer in an
audit of the Properties which audit shall be performed at no cost to Seller. As
used herein, "Disclosure Information" means, as to the Properties, the net
revenues, direct operating expenses (including production and property taxes),
exploratory and development costs and production volume disclosures required
under Statement of Financial Accounting Standards No. 69 and balance sheet and
other income statement data in Seller's possession that Buyer reasonably
believes are required to be included in any report filed by Buyer with the
Securities and Exchange Commission. Buyer shall complete the audit no later than
one year from Closing.

                                   ARTICLE 11
                                INDEMNIFICATIONS

11.1 Buyer's Indemnification. BUYER SHALL DEFEND, INDEMNIFY, AND SAVE AND HOLD
HARMLESS SELLER AGAINST ALL CLAIMS, COSTS, EXPENSES, AND LIABILITIES WITH
RESPECT TO THE PROPERTIES, (BUT NOT INCLUDING THOSE INCURRED BY SELLER WITH
RESPECT TO THE SALE OF THE PROPERTIES TO BUYER OR THE NEGOTIATIONS LEADING TO
SUCH SALE OR THOSE THAT RESULT FROM OR ARE ATTRIBUTABLE TO THE NEGLIGENCE OR
WILLFUL MISCONDUCT OF SELLER, ITS EMPLOYEES OR AGENTS WITH RESPECT TO THE
OPERATION AND MAINTENANCE OF THE PROPERTIES, AND NOT INCLUDING THOSE THAT RESULT
FROM OR ARE ATTRIBUTABLE TO ANY REPRESENTATION OF SELLER CONTAINED IN THIS
AGREEMENT BEING UNTRUE OR A BREACH OF ANY WARRANTY OR COVENANT OF SELLER
CONTAINED IN THIS AGREEMENT).

11.2 ARBITRATION AND MEDIATION. In case of a disagreement between the Parties to
this Agreement as to any right, obligation, term or provision hereof or
involving a total disputed amount or claim(s) equal to or greater than
$25,000.00, the Parties shall make an earnest effort to settle such disagreement
to their mutual satisfaction. If any such dispute regarding this Agreement
cannot be reconciled by the Parties to this Agreement, then any Party may
provide notice to the other specifying with particularity the items of
disagreement and a request that the matter be resolved by mediation. Such

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                                                                         ------

                                  Page 14 of 27
<PAGE>
notice shall include the name of a mediator acceptable to the Party requesting
mediation. If the dispute is not resolved by mediation to the satisfaction of
the Parties, or if the Parties are unable to agree upon a mediator, within
thirty (30) days after receipt of such written notice, then any such dispute
shall be settled by arbitration and the results of such arbitration shall be
binding upon all Parties to this Agreement in all respects as set forth below.

Arbitration may be initiated by written notice from any Party to this Agreement
to the other that the previously noticed dispute has not been resolved by
mediation and is being submitted to arbitration under the terms of this
Agreement. A single arbitrator shall be chosen by the Parties to the dispute by
submitting names of eleven (11) arbitrators experienced in the area of the
dispute from a listing of twenty (20) arbitrators supplied by the American
Arbitration Association. Said selection by both Parties shall take place within
ten (10) days after the Parties have received the listing from the American
Arbitration Association. The lists of the Parties shall be compared and the
first name to appear on both lists shall be the arbitrator of the dispute.
Should either Party fail or refuse to submit a list of eleven arbitrators then
the other Party shall select an arbitrator who shall be the sole arbitrator and
shall resolve the dispute as set out herein. All arbitrators shall be
individuals who have had prior experience in oil and gas exploration and
production and shall function as independent and neutral arbitrators. In the
selection of arbitrators, the Parties shall take into consideration the nature
of the matter submitted for arbitration. (Thus, for example, professional
engineers should be selected to arbitrate issues which are primarily engineering
in nature and accountants who are members of the Council of Petroleum
Accountants Societies should be selected to arbitrate matters which are
primarily accounting in nature.) Arbitrations under this paragraph shall be
conducted under the Texas Arbitration Statute (Vernon's Ann. Tex. Civ. St. Arts.
224 to 238-6) and shall apply Texas law. All matters concerning the conduct of
the arbitrators shall be governed by the provisions of the American Arbitration
Association. No dispute related to this Agreement shall be brought before any
court of law or equity; however, judgment upon the award or decision rendered by
the arbitrators may be entered in any court having jurisdiction.

EXECUTED this 13 day of June, 2006.

SELLER:
HENRY HOLDING LP
HENRY & JOHNSON INVESTMENT LLC, GENERAL PARTNER

By:           /s/ Dennis R. Johnson
              ---------------------------------------
Name:         Dennis R. Johnson
              ---------------------------------------
Title:        President
              ---------------------------------------

BUYER:
LEGACY RESERVES OPERATING LP
LEGACY RESERVES OPERATING GP LLC, GENERAL PARTNER

By:           /s/ Steven H. Pruett
              ---------------------------------------
Name:         Steven H. Pruett
              ---------------------------------------
Title:        President
              ---------------------------------------

STATE OF TEXAS
COUNTY OF MIDLAND

     The foregoing instrument was acknowledged before me this 14th day of
June, 2006, by Dennis R. Johnson, President of Henry & Johnson Investment LLC,
General Partner of Henry Holding LP a Texas Limited Partnership, on behalf of
said limited partnership.

My Commission Expires:

     4-26-2009
--------------------

                                /s/ Romae J. Bell
                                -----------------------------------------------
                                  Notary Public in and for the State of Texas

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                                                                         ------
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                                                                         ------

                                  Page 15 of 27
<PAGE>

STATE OF TEXAS
COUNTY OF MIDLAND

     The foregoing instrument was acknowledged before me this 14th day of
June, 2006, by Steven H. Pruett, President of Legacy Reserves Operating GP
LLC, General Partner of Legacy Reserves Operating LP, a Delaware limited
partnership, on behalf of said partnership.

My Commission Expires:

     4-26-2009
----------------------

                                             /s/ Romae J. Bell
                                   ---------------------------------------------
                                    Notary Public in and for the State of Texas

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                                                                         ------
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                                                                         ------

                                  Page 16 of 27

<PAGE>

                                   EXHIBIT "A"

     ATTACHED TO AND MADE A PART OF THAT CERTAIN PURCHASE AND SALE AGREEMENT
     DATED JUNE 8, 2006 BETWEEN HENRY HOLDING LP, (REFERRED TO AS SELLER) AND
     LEGACY RESERVES OPERATING LP, (REFERRED TO AS BUYER)

                                SOUTH JUSTIS UNIT
                             LEA COUNTY, NEW MEXICO

<TABLE>
<S>                                                <C>                               <C>
I. (BARGO ACQUISITION)                             WORKING INTEREST                   .14674140
SOUTH JUSTIS UNIT:                                 (OIL) NET REVENUE INTEREST         .12730574
(IN ACCORDANCE WITH THE TRACT WORKING              (GAS) NET REVENUE INTEREST         .12730278
INTEREST AND TRACT PARTICIPATION FACTORS
APPLICABLE TO THE FOLLOWING OIL AND GAS LEASES)
</TABLE>

                              OIL AND GAS LEASES:
                                                                     Exhibit "A"
<TABLE>
<CAPTION>
            LESSOR                   DATE                  DESCRIPTION OF LANDS / RIGHTS                      RECORDING
-------------------------------- -------------- ----------------------------------------------------- ---------------------------
<S>                              <C>            <C>                                                   <C>
USA BLM LC-032650-A                7/20/1935    INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:                   n/a
                                                T25S-R37E, Section 24:  SE/4SW/4, 40 acres more or
                                                less Limited to the Justis Blinebry-Tubb-Drinkard
                                                Pool. (Unit Tract 1)
-------------------------------- -------------- ----------------------------------------------------- ---------------------------
USA BLM LC-032650-B                4/24/1936    T25S-R37E, Section 24:  E/2, SE/4NW/4, NE/4SW/4,                 n/a
                                                400 acres more or less Limited to the Justis
                                                Blinebry-Tubb-Drinkard Pool. (Unit Tract 12)
-------------------------------- -------------- ----------------------------------------------------- ---------------------------
USA BLM NMNM-7487                    2/1/88     INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:                   n/a
                                    renewal     T25S-R37E, Section 23:  SW/4NE/4, 40 acres more or
                                                less Limited to the Justis Blinebry-Tubb-Drinkard
                                                Pool.  (Unit Tract 26)
-------------------------------- -------------- ----------------------------------------------------- ---------------------------
USA BLM LC-049439-B                10/3/1938    INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:                   n/a
                                                T26S-R37E, Section 1:  N/2 NE/4, 80 acres more or
                                                less Limited to the Justis Blinebry-Tubb-Drinkard
                                                Pool. (Unit Tract 27)
-------------------------------- -------------- ----------------------------------------------------- ---------------------------
USA BLM NM-0349956                 6/1/1947     INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:                   n/a
                                                T25S-R38E, Section 19:  W/2NW/4, 80 acres more or
                                                less Limited to the Justis Blinebry-Tubb-Drinkard
                                                Pool. (Unit Tract 28 & 28A)
-------------------------------- -------------- ----------------------------------------------------- ---------------------------
State of New Mexico                2/10/1942    INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:                   n/a
Lease B-9521                                    T25S-R38E, Section 30:  W/2NW/4, 80 acres more or
                                                less Limited to the Justis Blinebry-Tubb-Drinkard
                                                Pool.  (Unit Tract 32)
-------------------------------- -------------- ----------------------------------------------------- ---------------------------
Doyle C. Buffington et al          1/20/1953    INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:        VOL 108
                                                T25S-R38E, Section 19:  W/2SW/4, Limited to the       PG 345
                                                Justis Blinebry-Tubb-Drinkard Pool. (Unit Tract 52)
-------------------------------- -------------- ----------------------------------------------------- ---------------------------
A.C. Bray et ux                    2/12/1953    INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:        VOL 108
                                                T25S-R38E, Section 19:  W/2SW/4, Limited to the       PG 341
                                                Justis Blinebry-Tubb-Drinkard Pool. (Unit Tract 52)
-------------------------------- -------------- ----------------------------------------------------- ---------------------------
Kenneth E. Ward et ux              2/17/1953    INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:        VOL 108
                                                T25S-R38E, Section 19:  W/2SW/4, Limited to the       PG 337
                                                Justis Blinebry-Tubb-Drinkard Pool. (Unit Tract 52)
-------------------------------- -------------- ----------------------------------------------------- ---------------------------
Clifford Mooers                    3/18/1953    INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:        VOL 108
                                                T25S-R38E, Section 19:  W/2SW/4, Limited to the       PG 329
                                                Justis Blinebry-Tubb-Drinkard Pool. (Unit Tract 52)
-------------------------------- -------------- ----------------------------------------------------- ---------------------------
Charles B. Read et ux              4/30/1953    INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:        VOL 108
                                                T25S-R38E, Section 19:  W/2SW/4, Limited to the       PG 354
                                                Justis Blinebry-Tubb-Drinkard Pool. (Unit Tract 52)
-------------------------------- -------------- ----------------------------------------------------- ---------------------------
William W. Carlin et ux            3/31/1959    INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:        VOL 174
                                                T25S-R38E, Section 19:  W/2SW/4, Limited to the       PG 362 &
                                                Justis Blinebry-Tubb-Drinkard Pool. (Unit Tract 52)   VOL 175
                                                                                                      PG 301
-------------------------------- -------------- ----------------------------------------------------- ---------------------------
                                                                                                                      Page 2 of 3
</TABLE>

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                                                                         ------
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                                                                         ------

                                  Page 17 of 27
<PAGE>

<TABLE>
<S>                                        <C>                                 <C>
II. (BASS ACQUISITION)
SOUTH JUSTIS UNIT:                          WORKING INTEREST                    .00320101
(IN ACCORDANCE WITH THE                     (OIL) NET REVENUE INTEREST          .0037996
TRACT WORKING INTEREST AND TRACT            (GAS) NET REVENUE INTEREST          .0037996
PARTICIPATION FACTORS APPLICABLE TO THE
FOLLOWING OIL AND GAS LEASES)
</TABLE>

<TABLE>
<S>                             <C>             <C>                                                      <C>
*                               *               T25S-R37E, Section 12:  W/2 and W/2 SE/4                  *
                                                (Unit Tracts 41, 42, 42A, 43, 44, 44A, 45 & 45A)
</TABLE>

*Contractual Rights obtained in: (i) that certain Assignment and Bill of Sale
effective January 1, 2004 from The BASS MANAGEMENT TRUST, a Texas Trust, SID R.
BASS, INC., THRU LINE INC., LEE M. BASS, INC., KEYSTONE, Inc., and CHISHOLM
TRAIL VENTURES, L.P. to LEEDE OPERATING COMPANY, LLC recorded in Book 1278 at
Page 860 and (ii) that certain Assignment and Bill of Sale effective January 1,
2004 from Leede Operating Company, LLC to Henry Holding LP recorded in Book
1285, at page 301 in the Lea County, New Mexico records that was created as a
result of that certain Unit Agreement and Unit Operating Agreement effective
September 1, 1992 between Atlantic Richfield Company, as Operator, and Sid R.
Bass, Inc. et al, as Non-Operators, covering the South Justis Unit Tract Nos.
41, 42, 42A, 43, 44, 44A, 45 & 45A out of the W/2 and W/2 SE/4 Section 12,
T25S-R37E, Lea County, New Mexico.

<TABLE>
<S>                                        <C>                                  <C>
III. (BRADSHAW ACQUISITION)
SOUTH JUSTIS UNIT:                          WORKING INTEREST                    - 0 -
(IN ACCORDANCE WITH THE                     (OIL) NET REVENUE INTEREST          .00006092
TRACT WORKING INTEREST AND TRACT            (GAS) NET REVENUE INTEREST          .00006092
PARTICIPATION FACTORS APPLICABLE
TO THE FOLLOWING OIL AND GAS LEASE)
</TABLE>

<TABLE>
<S>                          <C>    <C>      <C>                                                             <C>
      USA LC-0349956            6/1/1947                    T25S, R38E Section 19: W/2 NW/4                      n/a
                                                                 (Unit Tracts 28, 28A)
</TABLE>

IV. (ESTIMATED TOTAL)
SOUTH JUSTIS UNIT INTEREST:

WORKING INTEREST                                                       .14994241
(OIL) NET REVENUE INTEREST                                             .13116626
(GAS) NET REVENUE INTERST                                              .13116330

V. SOUTH JUSTIS UNIT AGREEMENT DATED SEPTEMBER 1, 1992

VI. SOUTH JUSTIS UNIT OPERATING AGREEMENT DATED SEPTEMBER 1, 1992

                                                                     Exhibit "A"

                                                                     Page 3 of 3

                                                       Initials   Seller /s/ MP
                                                                         ------
                                                                  Buyer  /s/ SP
                                                                         ------

                                  Page 18 of 27
<PAGE>

                               OIL AND GAS LEASES:

                                    WIMBERLY
                         (A/K/A OLSEN -- WIMBERLEY UNIT)
                             LEA COUNTY, NEW MEXICO

J.H. WIMBERLY:    WORKING INTEREST          .2550000
                  NET REVENUE INTEREST      .2029278

                               A.B. COATES FED COM

<TABLE>
<CAPTION>
               LESSOR                        DATE                 DESCRIPTION OF LANDS / RIGHTS                RECORDING
-------------------------------------- ----------------- ------------------------------------------------ ------------------------
<S>                                    <C>               <C>                                              <C>
                                                         INSOFAR AND ONLY INSOFAR AS SAID LEASE
                                                         COVERS:  SE/4NE/4 Section 23, T25S-R37E,  Less
                                                         and Except the Justis Blinebry-Tubb-Drinkard
Sam D. Wimberley et ux                    4/16/1938      Pool. (Unit Tract 50)                            VOL 35-PG 156
-------------------------------------- ----------------- ------------------------------------------------ ------------------------
Eunice Cone Gibson et vir                 12/12/1939     SAME AS ABOVE                                    VOL 41-PG 330
-------------------------------------- ----------------- ------------------------------------------------ ------------------------
Gordon M. Cone et ux                      12/12/1939     SAME AS ABOVE                                    VOL 41-PG 312
-------------------------------------- ----------------- ------------------------------------------------ ------------------------
John E. Toles et ux                       12/12/1939     SAME AS ABOVE                                    VOL 41-PG 326
-------------------------------------- ----------------- ------------------------------------------------ ------------------------
S.E. Cone et ux                           12/12/1939     SAME AS ABOVE                                    VOL 41-PG 328
-------------------------------------- ----------------- ------------------------------------------------ ------------------------
S.M. Gloyd et ux                          12/12/1939     SAME AS ABOVE                                    VOL 41-PG 314
-------------------------------------- ----------------- ------------------------------------------------ ------------------------
O.L. Nislar et ux                         12/12/1939     SAME AS ABOVE                                    VOL 41-PG 335
-------------------------------------- ----------------- ------------------------------------------------ ------------------------
Joe N. Nislar et ux                       12/12/1939     SAME AS ABOVE                                    VOL 41-PG 332
-------------------------------------- ----------------- ------------------------------------------------ ------------------------
                                                         INSOFAR AND ONLY INSOFAR AS SAID LEASE
                                                         COVERS:  SW/4NE/4 Section 23, T25S-R37E, Less
USA LC-033575                              2/7/1938      and Except the Justis Blinebry-Tubb-Drinkard
(NMNM-7487)                               (2/1/1978)     Pool                                                      n/a
-------------------------------------- ----------------- ------------------------------------------------ ------------------------
</TABLE>

A.B. COATES:      WORKING INTEREST          .2500000
                  NET REVENUE INTEREST      .2500000

<TABLE>
<CAPTION>
<S>                                 <C>             <C>                                          <C>
----------------------------------- --------------- -------------------------------------------- ---------------------------------
                                                      E/2, SE/4 NW/4, NE/4 SW/4 SEC 24,
        L C -- 032650 (B)             4/24/1936                 T25S, R37E                                      n/a
----------------------------------- --------------- -------------------------------------------- ---------------------------------
</TABLE>

                               End of Exhibit "A"

                                                       Initials   Seller /s/ MP
                                                                         ------
                                                                  Buyer  /s/ SP
                                                                         ------

                                  Page 19 of 27

<PAGE>

                                   EXHIBIT "B"

     ATTACHED TO AND MADE A PART OF THAT CERTAIN PURCHASE AND SALE AGREEMENT
     DATED JUNE 8, 2006 BETWEEN HENRY HOLDING LP, (REFERRED TO AS SELLER) AND
              LEGACY RESERVES OPERATING LP, (REFERRED TO AS BUYER)

STATE OF NEW MEXICO        )
                           )
COUNTY OF LEA              )

                           ASSIGNMENT AND BILL OF SALE

THIS ASSIGNMENT AND BILL OF SALE ("Assignment"), effective as of 12:01 a.m.,
local time, on May 1, 2006, the ("Effective Time") is made by HENRY HOLDING LP,
whose address is 3525 Andrews Highway, Midland, TX 79703 ( referred to herein as
the "Assignor") LEGACY RESERVES OPERATING, LP, a Delaware limited partnership
whose address is 303 West Wall Street, Suite 1600, Midland, Texas 79702
(referred to herein as the "Assignee"). For good and valuable consideration, the
receipt, adequacy and sufficiency of which is hereby acknowledged by Assignor,
Assignor does hereby grant, bargain, transfer, convey, set over, assign, and
deliver unto Assignee, its successors and assigns, the following (collectively,
the "Assets"):

(a)  ALL OF ASSIGNOR'S RIGHT, TITLE, AND INTEREST OF WHATEVER NATURE IN ALL
     LEASEHOLD AND OTHER INTERESTS IN; (i) THE OIL, GAS AND MINERAL LEASES
     DESCRIBED ON EXHIBIT "A" (THE "LEASES"), INSOFAR AND ONLY INSOFAR AS SAID
     LEASES INCLUDE AND PERTAIN TO AND COVER THE LANDS AND DEPTHS AS
     SPECIFICALLY DESCRIBED HEREIN ON EXHIBIT "A" (THE "LANDS"); (II) THE OIL
     AND GAS WELLS LOCATED ON THE LEASES OR ON LANDS POOLED OR UNITIZED
     THEREWITH (THE "WELLS"); AND (III) THE UNITS, POOLED ACREAGE, SPACING OR
     PRORATION UNITS OR OTHER ALLOCATION OF ACREAGE APPLICABLE TO THE WELLS
     ESTABLISHED BY OR IN ACCORDANCE WITH THE APPLICABLE STATE, FEDERAL OR LOCAL
     LAW;

(b)  all of Assignor's petroleum, hydrocarbons and gases produced from or
     attributable to the Leases, or any unit of which a Lease is a part, after
     the Effective Time;

(c)  all of Assignor's petroleum, hydrocarbons and gases produced from or
     attributable to the Leases, or any unit of which a Lease is a part, which
     at the effective time are owned by Assignor and are in storage;

(d)  all of Assignor's permits, licenses, servitudes, contracts and agreements
     directly related to the Leases, including all operating agreements; oil,
     gas and condensate purchase and sale agreements; processing, treating,
     fractionating, compression and transportation agreements; water rights
     agreements; farmout, farmin, dry hole, bottom hole, acreage contribution,
     salt water disposal agreements; easements, surface use and/or right-of-way
     agreements; unitization or pooling agreements, declarations and orders and
     the properties covered and the units created thereby; and all other
     executory contracts and agreements directly related to the Leases, INSOFAR
     AND ONLY INSOFAR as the same cover and affect the Leases; and

(e)  all of Assignor's producing, shut-in, temporarily abandoned, abandoned,
     plugged, water supply, injection and disposal wells, tank batteries,
     structures, pipe lines, fixtures, equipment, spare parts, tools, pipelines,
     buildings, personal property, appurtenances and improvements now or as of
     the Effective Time, located on or appurtenant to the Leases and used in
     connection with the operation of the Leases, or the gathering, treating,
     compression, transportation and processing of production from the Leases,
     whether or not operating or abandoned.

THERE IS EXCEPTED FROM THIS ASSIGNMENT AND RESERVED UNTO ASSIGNOR THE FOLLOWING,
WHICH ARE SPECIFICALLY EXCLUDED FROM THE ASSETS:

(a)  all of Assignor's trade credits, accounts receivable, notes receivable and
     other receivables attributable to Assignor's interest in the Assets with
     respect to any period of time prior to the Effective Time; all deposits,
     cash, checks in process of collection, cash equivalents and funds
     attributable to Assignor's interest in the Assets with respect to any
     period of time prior to the

                                                       Initials   Seller /s/ MP
                                                                         ------
                                                                  Buyer  /s/ SP
                                                                         ------

                                  Page 20 of 27

<PAGE>

     Effective Time; and all proceeds, benefits, income or revenues accruing
     (and any security or other deposits made) with respect to the Assets prior
     to the Effective Time;

(b)  all of Assignor's claims and causes of action of Assignor arising from
     acts, omissions, events or damage to or destruction of the Assets,
     occurring prior to the Effective Time;

(c)  all of Assignor's amounts due or payable to Assignor as adjustments or
     refunds under any contracts or agreements, including take-or-pay claims and
     all claims arising from open and any future audits affecting the Assets,
     respecting periods prior to the Effective Time;

TO HAVE AND TO HOLD the Asset unto Assignee, its successors and assigns,
forever. This Assignment is made and accepted subject to the following:

1.   This Assignment is made and accepted subject to all royalties, overriding
     royalties, burdens and encumbrances affecting the Assets and WITHOUT ANY
     WARRANTY OF TITLE, EXPRESS OR IMPLIED OTHER THAN LIMITED WARRANTY BY,
     THROUGH AND UNDER ASSIGNOR.

2.   The Assets herein assigned are subject to all the terms and provisions of
     the Leases which are of public record as to their proportionate share of
     all overriding royalty interests, lessor's royalties, net profit interests,
     carried interests, reversionary interests and other interests, encumbrances
     and burdens on the production therefrom; to all covenants, conditions,
     obligations, and conditions in instruments and assignments in the chain of
     title of the Leases; and to all other encumbrances affecting the Assets in
     existence on the date this Assignment is executed. Assignee hereby assumes
     and agrees to pay, perform and discharge its proportionate share of all
     obligations under the Leases and the agreements relating to the Leases
     herein assigned. The references herein to obligations and encumbrances
     shall not be deemed to ratify or create any rights in third parties.

3.   Assignee accepts the Assets in their present condition "AS IS, WHERE IS and
     WITH ALL FAULTS". Without limiting the generality of the foregoing,
     Assignor makes no representation or warranty as to (i) the amount, value,
     quality, quantity, volume or deliverability of any oil, gas or other
     minerals or reserves in, under or attributable to the Assets; (ii) the
     physical, operating, regulatory compliance, safety or environmental
     condition of the Assets; (iii) any geological, engineering or other
     interpretations of economic valuation; (iv) the status of any payout
     accounts; or (v) predictions as to when any event will or will not occur or
     is likely to occur. The items of personal property, equipment,
     improvements, fixtures and appurtenances conveyed as part of the Assets are
     sold "AS IS, WHERE IS," and Assignor MAKES NO, AND DISCLAIMS ANY,
     REPRESENTATION OR WARRANTY, WHETHER EXPRESS OR IMPLIED, AND WHETHER BY
     COMMON LAW, STATUTE OR OTHERWISE, AS TO (i) MERCHANTABILITY, (II) FITNESS
     FOR ANY PARTICULAR PURPOSE, (III) CONFORMITY TO MODELS OR SAMPLES OF
     MATERIALS, AND (IV) CONDITION. ASSIGNEE ACKNOWLEDGES THAT IT HAS BEEN
     INFORMED THAT OIL AND GAS PRODUCING FORMATIONS CAN CONTAIN NATURALLY
     OCCURRING RADIOACTIVE MATERIAL ("NORM"). SOME OR ALL OF THE EQUIPMENT,
     MATERIAL, APPURTENANCES, IMPROVEMENTS AND FIXTURES SUBJECT TO THIS
     ASSIGNMENT MAY HAVE LEVELS OF NORM ABOVE BACKGROUND LEVELS. A HEALTH HAZARD
     MAY EXIST IN CONNECTION WITH THIS EQUIPMENT. THEREFORE, ASSIGNEE MAY NEED
     TO FOLLOW SAFETY PROCEDURES WHEN HANDLING THIS EQUIPMENT. Assignee hereby
     assumes its proportionate share, based upon its percentage ownership in the
     Leases acquired herein, of any and all liabilities, obligations, costs and
     expenses, including environmental damages and remediation, attributable to
     or arising out of the ownership or operation of the Leases by Assignee or
     Assignor, whether or not caused in whole or in part by the sole or
     concurrent negligence or strict liability of Assignor (other than gross
     negligence or willful misconduct)or Assignee or condition of the Leases.

4.   It is specifically provided that if the assignment or attempted assignment
     of any of the Leases which are of record without the consent of the lessor,
     or any party from whom consent to assign is necessary, would constitute a
     breach or result in a forfeiture thereof, this Agreement shall become
     effective with respect thereto only upon receipt of such consent. This
     Assignment is made subject to the terms and provisions of Purchase and Sale
     Agreement between Assignor and Assignee dated June 13, 2006, and in the
     event of conflict the terms and conditions of the Purchase and Sale
     Agreement shall control. The covenants, indemnities and

                                                       Initials   Seller /s/ MP
                                                                         ------
                                                                  Buyer  /s/ SP
                                                                         ------

                                  Page 21 of 27
<PAGE>

     other terms and provisions of the Purchase and Sale Agreement are
     incorporated into this Agreement.

5.   Assignee shall comply with all current and subsequently amended applicable
     laws, ordinances, rules, and regulations applicable to the Asset and
     Assignee's ownership or operation thereof, and shall promptly obtain and
     maintain all permits required by governmental authorities in connection
     with the Assets.

6.   This Assignment and all of the terms, provisions, covenants, indemnities,
     obligations and conditions herein contained shall be binding upon and inure
     to the benefit of and be enforceable by the Assignor, Assignee and their
     respective successors, legal representatives, heirs and assigns; PROVIDED,
     HOWEVER, no assignment, transfer, conveyance or encumbrance of the Assets
     shall be made unless the same is expressly subject to this Assignment, and
     unless the assignee or transferee assumes all or the applicable part of the
     obligations hereunder. All the terms, provisions, covenants, indemnities,
     obligations and conditions provided in this Assignment shall be deemed to
     be covenants running with the land and Leases, and any transfer or other
     disposition of the Leases shall be made subject to all such terms,
     provisions, covenants, indemnities, obligations and conditions herein
     contained.

7.   This Assignment may be executed by Assignor and Assignee in any number of
     counterparts, each of which shall be deemed an original instrument, but all
     of which together shall constitute one and the same Assignment.

ASSIGNOR:

HENRY HOLDING LP
HENRY & JOHNSON INVESTMENT LLC, GENERAL PARTNER
By:
              ------------------------------
Name:         Dennis R. Johnson
              ------------------------------
Title:        President
              ------------------------------

ASSIGNEE:

By:
              ------------------------------
Name:
              ------------------------------
Title:
              ------------------------------

STATE OF TEXAS
COUNTY OF MIDLAND

     The foregoing instrument was acknowledged before me this _____ day of
__________________________, 2006, by Dennis R. Johnson, President of Henry &
Johnson Investment LLC, General Partner of Henry Holding LP, a Texas Limited
Partnership, on behalf of said limited partnership.

                                     -------------------------------------------
                                     Notary Public in and for the State of Texas

My Commision Expires:

---------------------

                                                       Initials   Seller /s/ MP
                                                                         ------
                                                                  Buyer  /s/ SP
                                                                         ------

                                  Page 22 of 27
<PAGE>

STATE OF ____________
COUNTY OF ____________

     The foregoing instrument was acknowledged before me this _____ day of
__________________________, 20___, by ______________________.

                                     -------------------------------------------
                                     Notary Public in and for the State of Texas

My Commision Expires:

---------------------

                                                       Initials   Seller /s/ MP
                                                                         ------
                                                                  Buyer  /s/ SP
                                                                         ------

                                  Page 23 of 27
<PAGE>

                                   EXHIBIT "A"

     ATTACHED TO AND MADE A PART OF THAT CERTAIN ASSIGNMENT AND BILL OF SALE
   DATED _____________, 2006, BY AND BETWEEN HENRY HOLDING LP, REFERRED TO AS
                 ("SELLER") AND _____________________ ("BUYER")

                                SOUTH JUSTIS UNIT
                             LEA COUNTY, NEW MEXICO

<TABLE>
<S>                                                <C>                                      <C>
I. (BARGO ACQUISITION)
SOUTH JUSTIS UNIT:                                  WORKING INTEREST                         .14674140
(IN ACCORDANCE WITH THE                             (OIL) NET REVENUE INTEREST               .12730574
TRACT WORKING INTEREST AND TRACT                    (GAS) NET REVENUE INTEREST               .12730278
PARTICIPATION FACTORS APPLICABLE TO THE
FOLLOWING OIL AND GAS LEASES)
</TABLE>

                               OIL AND GAS LEASES:

<TABLE>
<CAPTION>
                LESSOR                        DATE                       DESCRIPTION OF LANDS / RIGHTS                   RECORDING
---------------------------------------- --------------- -------------------------------------------------------------- ------------
<S>                                      <C>             <C>                                                            <C>
                                                         INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS: T25S-R37E,
                                                         Section 24:  SE/4SW/4, 40 acres more or less Limited to the
USA BLM LC-032650-A                      7/20/1935       Justis Blinebry-Tubb-Drinkard Pool. (Unit Tract 1)             n/a
---------------------------------------- --------------- -------------------------------------------------------------- ------------
                                                         T25S-R37E, Section 24:  E/2, SE/4NW/4, NE/4SW/4, 400 acres
                                                         more or less Limited to the Justis Blinebry-Tubb-Drinkard
USA BLM LC-032650-B                      4/24/1936       Pool. (Unit Tract 12)                                          n/a
---------------------------------------- --------------- -------------------------------------------------------------- ------------
                                                         INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS: T25S-R37E,
                                         2/1/88          Section 23:  SW/4NE/4, 40 acres more or less Limited to the
USA BLM NMNM-7487                        renewal         Justis Blinebry-Tubb-Drinkard Pool.  (Unit Tract 26)           n/a
---------------------------------------- --------------- -------------------------------------------------------------- ------------
                                                         INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:  T26S-R37E,
                                                         Section 1:  N/2 NE/4, 80 acres more or less Limited to the
USA BLM LC-049439-B                      10/3/1938       Justis Blinebry-Tubb-Drinkard Pool.  (Unit Tract 27)           n/a
---------------------------------------- --------------- -------------------------------------------------------------- ------------
                                                         INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:  T25S-R38E,
                                                         Section 19:  W/2NW/4, 80 acres more or less Limited to the
USA BLM NM-0349956                       6/1/1947        Justis Blinebry-Tubb-Drinkard Pool.  (Unit Tract 28 & 28A)     n/a
---------------------------------------- --------------- -------------------------------------------------------------- ------------
                                                         INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS: T25S-R38E,
                                                         Section 30:  W/2NW/4, 80 acres more or less Limited to the
State of New Mexico Lease B-9521         2/10/1942       Justis Blinebry-Tubb-Drinkard Pool.  (Unit Tract 32)           n/a
---------------------------------------- --------------- -------------------------------------------------------------- ------------
                                                         INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:  T25S-R38E,
                                                         Section 19:  W/2SW/4, Limited to the Justis                    VOL 108
Doyle C. Buffington et al                1/20/1953       Blinebry-Tubb-Drinkard Pool. (Unit Tract 52)                   PG 345
---------------------------------------- --------------- -------------------------------------------------------------- ------------
                                                         INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:  T25S-R38E,
                                                         Section 19:  W/2SW/4, Limited to the Justis                    VOL 108
A.C. Bray et ux                          2/12/1953       Blinebry-Tubb-Drinkard Pool. (Unit Tract 52)                   PG 341
---------------------------------------- --------------- -------------------------------------------------------------- ------------
                                                         INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:  T25S-R38E,
                                                         Section 19:  W/2SW/4, Limited to the Justis                    VOL 108
Kenneth E. Ward et ux                    2/17/1953       Blinebry-Tubb-Drinkard Pool. (Unit Tract 52)                   PG 337
---------------------------------------- --------------- -------------------------------------------------------------- ------------
                                                         INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:  T25S-R38E,
                                                         Section 19:  W/2SW/4, Limited to the Justis                    VOL 108
Clifford Mooers                          3/18/1953       Blinebry-Tubb-Drinkard Pool. (Unit Tract 52)                   PG 329
---------------------------------------- --------------- -------------------------------------------------------------- ------------
                                                         INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:  T25S-R38E,
                                                         Section 19:  W/2SW/4, Limited to the Justis                    VOL 108
Charles B. Read et ux                    4/30/1953       Blinebry-Tubb-Drinkard Pool. (Unit Tract 52)                   PG 354
---------------------------------------- --------------- -------------------------------------------------------------- ------------
                                                                                                                        VOL 174
                                                         INSOFAR AND ONLY INSOFAR AS SAID LEASE COVERS:  T25S-R38E,     PG 362 &
                                                         Section 19:  W/2SW/4, Limited to the Justis                    VOL 175
William W. Carlin et ux                  3/31/1959       Blinebry-Tubb-Drinkard Pool. (Unit Tract 52)                   PG 301
---------------------------------------- --------------- -------------------------------------------------------------- ------------
</TABLE>

                                                       Initials   Seller /s/ MP
                                                                         ------
                                                                  Buyer  /s/ SP
                                                                         ------

                                  Page 24 of 27

<PAGE>

                                                                     Exhibit "A"
                                                                     Page 2 of 3

<TABLE>
<S>                                             <C>                                <C>
II. (BASS ACQUISITION)
SOUTH JUSTIS UNIT:                              WORKING INTEREST                    .00320101
(IN ACCORDANCE WITH THE  E                      (OIL) NET REVENUE INTEREST          .0037996
TRACT WORKING INTEREST AND TRACT                (GAS) NET REVENUE INTEREST          .0037996
PARTICIPATION FACTORS APPLICABLE TO THE
FOLLOWING OIL AND GAS LEASES)
</TABLE>

<TABLE>
<CAPTION>
------------------------------ --------------- --------------------------------------------------------------- ------------------
<S>                            <C>             <C>                                                             <C>

                                                           T25-R37E, Section 12: W/2 and W/2 SE/4
              *                      *                (Unit Tracts 41, 42, 42A, 43, 44, 44A, 45 & 45A)                n/a
------------------------------ --------------- --------------------------------------------------------------- ------------------
</TABLE>

*Contractual Rights obtained in: (i) that certain Assignment and Bill of Sale
effective January 1, 2004 from The BASS MANAGEMENT TRUST, a Texas Trust, SID R.
BASS, INC., THRU LINE INC., LEE M. BASS, INC., KEYSTONE, Inc., and CHISHOLM
TRAIL VENTURES, L.P. to LEEDE OPERATING COMPANY, LLC recorded in Book 1278 at
Page 860 and (ii) that certain Assignment and Bill of Sale effective January 1,
2004 from Leede Operating Company, LLC to Henry Holding LP recorded in Book
1285, at page 301 in the Lea County, New Mexico records that was created as a
result of that certain Unit Agreement and Unit Operating Agreement effective
September 1, 1992 between Atlantic Richfield Company, as Operator, and Sid R.
Bass, Inc. et al, as Non-Operators, covering the South Justis Unit Tract Nos.
41, 42, 42A, 43, 44, 44A, 45 & 45A out of the W/2 and W/2 SE/4 Section 12,
T25S-R37E, Lea County, New Mexico.

<TABLE>
<S>                                                  <C>                                <C>
III. (BRADSHAW ACQUISITION)
SOUTH JUSTIS UNIT:                                   WORKING INTEREST                   - 0 -
(IN ACCORDANCE WITH THE                              (OIL) NET REVENUE INTEREST         .00006092
TRACT WORKING INTEREST AND TRACT                     (GAS) NET REVENUE INTEREST         .00006092
PARTICIPATION FACTORS APPLICABLE TO
THE FOLLOWING OIL AND GAS LEASE)
</TABLE>

<TABLE>
<S>                            <C>             <C>                                                             <C>
------------------------------ --------------- --------------------------------------------------------------- ----------------
                                                              T25S, R38E Section 19: W/2 NW/4
       USA LC-0349956             6/1/1947                         (Unit Tracts 28, 28A)                             n/a
------------------------------ --------------- --------------------------------------------------------------- ----------------
</TABLE>

IV. (ESTIMATED TOTAL)
SOUTH JUSTIS UNIT INTEREST:
WORKING INTEREST                                                       .14994241
(OIL) NET REVENUE INTEREST                                             .13116626
(GAS) NET REVENUE INTERST                                              .13116330

                                                       Initials   Seller /s/ MP
                                                                         ------
                                                                  Buyer  /s/ SP
                                                                         ------

                                  Page 25 of 27
<PAGE>

                                                                     Exhibit "A"
                                                                     Page 3 of 3

                               OIL AND GAS LEASES:

                                    WIMBERLY
                         (A/K/A OLSEN -- WIMBERLEY UNIT)
                             LEA COUNTY, NEW MEXICO

J.H. WIMBERLY:    WORKING INTEREST          .2550000
                  NET REVENUE INTEREST      .2029278

<TABLE>
<CAPTION>
               LESSOR                        DATE                 DESCRIPTION OF LANDS / RIGHTS                RECORDING
-------------------------------------- ----------------- ------------------------------------------------ ------------------------
<S>                                    <C>               <C>                                              <C>
                                                         INSOFAR AND ONLY INSOFAR AS SAID LEASE
                                                         COVERS:  SE/4NE/4 Section 23, T25S-R37E,  Less
                                                         and Except the Justis Blinebry-Tubb-Drinkard
Sam D. Wimberley et ux                    4/16/1938      Pool. (Unit Tract 50)                            VOL 35-PG 156
-------------------------------------- ----------------- ------------------------------------------------ ------------------------
Eunice Cone Gibson et vir                 12/12/1939     SAME AS ABOVE                                    VOL 41-PG 330
-------------------------------------- ----------------- ------------------------------------------------ ------------------------
Gordon M. Cone et ux                      12/12/1939     SAME AS ABOVE                                    VOL 41-PG 312
-------------------------------------- ----------------- ------------------------------------------------ ------------------------
John E. Toles et ux                       12/12/1939     SAME AS ABOVE                                    VOL 41-PG 326
-------------------------------------- ----------------- ------------------------------------------------ ------------------------
S.E. Cone et ux                           12/12/1939     SAME AS ABOVE                                    VOL 41-PG 328
-------------------------------------- ----------------- ------------------------------------------------ ------------------------
S.M. Gloyd et ux                          12/12/1939     SAME AS ABOVE                                    VOL 41-PG 314
-------------------------------------- ----------------- ------------------------------------------------ ------------------------
O.L. Nislar et ux                         12/12/1939     SAME AS ABOVE                                    VOL 41-PG 335
-------------------------------------- ----------------- ------------------------------------------------ ------------------------
Joe N. Nislar et ux                       12/12/1939     SAME AS ABOVE                                    VOL 41-PG 332
-------------------------------------- ----------------- ------------------------------------------------ ------------------------
                                                         INSOFAR AND ONLY INSOFAR AS SAID LEASE
                                                         COVERS:  SW/4NE/4 Section 23, T25S-R37E, Less
USA LC-033575                              2/7/1938      and Except the Justis Blinebry-Tubb-Drinkard
(NMNM-7487)                               (2/1/1978)     Pool                                                     n/a
-------------------------------------- ----------------- ------------------------------------------------ ------------------------
</TABLE>

                               A.B. COATES FED COM

A.B. COATES:               WORKING INTEREST          .2500
                           NET REVENUE INTEREST      .2500

<TABLE>
<CAPTION>
<S>                                 <C>             <C>                                          <C>
----------------------------------- --------------- -------------------------------------------- ---------------------------------
                                                      E/2, SE/4 NW/4, NE/4 SW/4 SEC 24, T25S,
        L C -- 032650 (B)             4/24/1936                        R37E                                    n/a
----------------------------------- --------------- -------------------------------------------- ---------------------------------
</TABLE>

                               End of Exhibit "A"

                                                       Initials   Seller /s/ MP
                                                                         ------
                                                                  Buyer  /s/ SP
                                                                         ------

                                  Page 26 of 27
<PAGE>

                                   EXHIBIT "C"

          ATTACHED TO AND MADE A PART OF THAT CERTAIN PURCHASE AND SALE
         AGREEMENT DATED JUNE 8, 2006, BY AND BETWEEN HENRY HOLDING LP,
      REFERRED TO AS ("SELLER") AND LEGACY RESERVES OPERATING LP ("BUYER")
                                SOUTH JUSTIS UNIT
                             LEA COUNTY, NEW MEXICO

                          REGISTRATION RIGHTS AGREEMENT

                 (To be furnished by Buyer for review by Seller)

                                                       Initials   Seller /s/ MP
                                                                         ------
                                                                  Buyer  /s/ SP
                                                                         ------

                                  Page 27 of 27

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