Document:

Assignment of Production Payment

 EXHIBIT 10.5 
  
 ASSIGNMENT OF PRODUCTION PAYMENT INTEREST 
  

			
	STATE OF TEXAS	  	§
	 	  	§
	COUNTY OF TITUS	  	§

  
 NOW THEREFORE AND IN
CONSIDERATION of the sum of Ten and no/Dollars ($10.00) and other good and valuable considerations the receipt and sufficiency of which are hereby acknowledged, Energytec, Inc. (Assignor) whose address is Suite 550, 14785 Preston Road, Dallas, Texas
75254 does hereby assign, transfer and convey to Lexus Energy Group, Inc. as Joint Venture Manager of the Trix Liz Joint Venture and the Hoffman Bankhead Joint Venture, whose addresses are Suite 848, 14131 Midway Road, Addison, Texas 75001, a 7 1/2% (seven and one-half percent) of gross production, Production Payment Interest in and to all oil, gas and other
hydrocarbons, and all other minerals produced, saved, and sold, if, as, and when produced, saved and sold but not otherwise, from the lands set out, in and covered by the Oil and Gas Leases described on Exhibit “A”. 
  
 THE EFFECTIVE DATE of this Production Payment shall be March 1, 2002, and
shall remain in effect until the sum of $1,000,000.00 (one million dollars) has been paid. Payment shall be made on or about the 20th (twentieth) of the month following receipts from sale of oil, gas and other hydrocarbons. 
  
 SAID PRODUCTION PAYMENT INTEREST shall bear its proportionate share of county, school, hospital and other ad valorem taxes, state gross production tax,
and state conservation tax. 
  
 IN THE EVENT Assignor’s total
interest in the Oil, Gas, other hydrocarbons, and all other minerals in the lands set out in and covered by the hereto attached Exhibit “A”, is less than the entire leasehold estate, then the fractional interest hereinabove assigned as an
Production Payment Interest shall be reduced proportionately so as to accord with the total fractional interest in the Oil, Gas, other hydrocarbons, and all other minerals actually owned by the Assignor. 

 INWITNESS WHEREOF, this instrument is executed this 20th day of March, 2002 and effective March 1, 2002. 
  

	
	Energytec, Inc.
	
	 /s/ Frank W. Cole

	By: Frank W. Cole, President

  
 Acknowledgment

  
 State of Texas 
  
 County of Dallas 
  
 BEFORE ME, the undersigned authority, on this day personally appeared Frank W. Cole known to me to be the person whose name is subscribed to the foregoing
instrument, as Frank W. Cole of Energytec, Inc., a Nevada Corporation, who acknowledged before me on this day that, being informed of the contents of the conveyance that he executed the same voluntarily for the purposes and consideration therein
expressed, for and as the act and deed of said Corporation. 
  
 GIVEN UNDER MY HAND AND SEAL OF OFFICE, on this              day of March, 2002. 
  

			
	[Notary Seal]	 	 /s/ Brooks M. Freeman

	 	 	Notary Public, State of Texas

  

 2 

 Page 1 of 6 
  
 EXHIBIT “A” 
  
 To that certain Production Payment Interest from Energytec, Inc. to Lexus Energy Group, Inc. for the Trix Liz Joint Venture and the Hoffman Bankhead Joint Venture.

  
 It is the intent to convey all interest in tracts herein described whether or
not all the leases are individually described herein. 
  
 Following is a
description of the oil, gas, and mineral leases covering 1,462 acres of land, more or less, situated in Trix-Liz Field Area, Titus County, Texas: 
  

	 	1.	Lease dated October 29, 1997, from Gladys A. Grimsley, et vir, et al to MODOC Energy Co., 160 acres more or less being all of the William Porter Survey, A-448, recorded in Volume
1064, at Page 056, Deed Records, Titus County, Texas. 

  

 3 

 Page 2 of 6 
  
 EXHIBIT “A” 
  

					
	Lease No:	  	PN 414186 - Bankhead; PN 566252 - Hoffman-Bankhead-Trix-Liz
	 	  	Unit; and PN 898360 - Woodbine “C” Zone Unit
	 	  	963809
	Lessor:	  	W.T. Bankhead, et al
	Lessee:	  	W.W. Beall
	Recording Data:	  	Date:	  	12/02/54
	 	  	Book:	  	215
	 	  	Page:	  	151
		
	Description of Property:	  	160 acres more or less being all of the Wm. R. Porter Survey, Abstract No. 448 limited from the surface down to a depth of 5000 feet.
		
	Lease No:	  	PN 566252 - Hoffman-Bankhead-Trix Liz Unit and
	 	  	PN 898360 - Woodbine “C” Zone Unit
	 	  	963808
	Lessor:	  	A.C. Hoffman, et al
	Lessee:	  	American Liberty Oil Company
	Recording Data:	  	Date:	  	12/03/54
	 	  	Book:	  	214
	 	  	Page:	  	140
		
	Description of Property:	  	160 acres more or less being all of the John Prather Survey, Abstract No. 454 limited from the surface down to a depth of 5000 feet.
		
	Lease No:	  	PN 898360 - Woodbine “C” Zone Unit and PN 840821 - Hoffman et al
	 	  	963806
	Lessor:	  	A.C. Hoffman, Jr. et al
	Lessor:	  	R.E. Moore
	Recording Data:	  	Date:	  	01/05/56
	 	  	Book:	  	222
	 	  	Page:	  	149
		
	Description of Property:	  	640 acres more or less being all of the B.B.B. & C.R.R. Survey 207, Abstract 74 limited from the surface down to a depth of 5000’.

  

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 Page 3 of 6 
  

					
	Lease No:	  	PN 917180 - Hoffman-Bankhead SWDS
	 	  	RW3392
	Grantor:	  	John D. Byram and Joy Scott
	Grantee:	  	Sun Oil Company (Delaware)
	Recording Data:	  	Date:	  	3/4/75
	 	  	Book:	  	395
	 	  	Page:	  	295
		
	Description of Property:	  	Right of way covering one acre more or less being described as follows:
			
	 	  	 	  	Start at the Southwest comer of 3. Prather Survey, Abstract 454, which is also the Southwest comer of A.C. Hoffman called 160 acre tract, same being the Northwest comer of William R. Porter
Abstract 448 Survey, all in the East line of A. Belcher Abstract 646 Survey; THENCE East 1152 feet and North 1389 feet to the point of beginning, the Southwest comer of the herein described one acre; THENCE N 208.7’ the northwest comer hereof;
THENCE E 208.7’ the northeast comer hereof; THENCE S 208.7’ the southeast comer hereof; THENCE W 208.7’ to the point of beginning containing one acre, all out of the J. Prather Survey, Abstract 454.
		
	Lease No:	  	RW 901257
	Lessor:	  	 	  	 
	Lessee:	  	Sun DX Oil Company
	Recording Data:	  	Date:	  	3/26/63
	 	  	Book:	  	 
	 	  	Page:	  	 
		
	Description of Property:	  	Right of way covering from SE comer of John Prather Survey along the easterly boundary of Survey along the easterly boundary of Survey a portion of land 30 feet wide and 777 feet long,
(approximately 48 rods long).
		
	Lease No.:	  	PN - 898360 - Woodbine “C” Zone Unit
	 	  	963807
	Lessor:	  	J.T. Williams, III et al
	Lessee:	  	W.W. Beall
	Recording Data:	  	Date:	  	12/22/58
	 	  	Book:	  	244
	 	  	Page:	  	68
		
	Description of Property:	  	160 acres more or less being the W/2 of the E.C. Beasley Survey, Abstract No. 52 limited from the surface down to a depth of 5000’.

  

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 Page 4 of 6 
  

					
	Lease No:	  	PN - 898360 - Woodbine “C” Zone Unit
	 	  	963807-001
	Lessor:	  	Imogene Stuart Butler et al
	Lessee:	  	F.D. Prince
	Recording Data:	  	Date:	  	03/02/56
	 	  	Book:	  	224
	 	  	Page:	  	13
		
	Description of Property:	  	Same as next above.
		
	Lease No:	  	PN - 898360 - Woodbine “C” Zone Unit
	 	  	963807-004
	Lessor:	  	Bessie Welch, et vir
	Lessee:	  	L.A. Pinkston and Fred Prince
	 	  	Date:	  	02/24/56
	 	  	Book:	  	223
	 	  	Page:	  	519
		
	Description of Property:	  	Same as next above.
		
	Lease No:	  	PN - 898360 - Woodbine “C” Zone Unit
	 	  	963807-005
	Lessor:	  	B.B. Tankel
	Lessee:	  	Alford M. Flanagen
	Recording Data:	  	Date:	  	02/20/56
	 	  	Book:	  	246
	 	  	Page:	  	133
		
	Description of Property:	  	Same as next above.

  

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 Page 5 of 6 
  

					
	Lease No:	  	PH 898360 - Woodbine “C” Zone Unit
	 	  	963807-002
	Lessor:	  	Bud Lewis, et ux
	Lessee:	  	John B. Stephens, Jr.
	Recording Data:	  	Date:	  	03/07/56
	 	  	Book:	  	224
	 	  	Page:	  	497
		
	Description of Property:	  	84.5 acres, more or less, being described as follows: BEGINNING at the SW comer of said Beasley Survey, a stake in the EB line of the J. Malsy Survey; THENCE NORTH with said line and EB line
of the W.R. Porter Survey, 5868 feet to a stake, the NW comer of said Beasley Survey and the SW comer of BBB & C Ry Co. Survey No. 207; THENCE EAST with the EB line of said Beasley Survey and EB line of the BBB & C Ry Co. Survey, 985 feet to
a stake in said line; THENCE SOUTH 3526 feet to a stake; THENCE WEST 376 feet to a stake; THENCE SOUTH 340 feet to the SB line of said Beasley Survey; THENCE WEST 609 feet to the place of beginning, containing 84.5 acres of land, more or less, and
being the same land described in a deed from G.R. Fry et us to Bud Lewis et ux, dated November 27, 1948, recorded in Vol. 164, Page 9 of the Titus County Deed Records, reference to which is here made for all purposes, limited from the surface down
to a depth of 5000 feet.
		
	Lease No:	  	PH 898360 - Woodbine “C” Zone Unit
	 	  	963807-003
	Lessor:	  	G.R. Fry, et ux
	Lessee:	  	John B. Stephens
	Recording Data:	  	Date:	  	03/07/56
	 	  	Book:	  	224
	 	  	Page:	  	499
		
	Description of Property:	  	75.5 acres, more or less, being the W/160 acres of land of the E.C. Beasley Survey, Abstract No. 52, less and except the West 84.5 acres of the W1160 acres of the E.C. Beasley Survey,
Abstract No. 52 as described in that certain Amendment to Oil, Gas and Mineral Lease dated July 7, 1959 from Bud Lewis et ux as Lessor to John B. Stephens, Jr. as Lessee, recorded in Volume 250, Page 187 in the Deed Records of Titus County, Texas;
limited from the surface down to a depth of 5000 feet.

  

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 Page 6 of 6 
  

					
	Lease No:	  	PN – 898360 - Woodbine “C” Zone Unit
	 	  	977959
	Lessor:	  	Laura H. Beall, et al
	Lessee:	  	Sun Oil Company
	Recording Data:	  	Date:	  	01/27/69
	 	  	Book:	  	348
	 	  	Page:	  	277
		
	Description of Property:	  	20 acres more or less being a part of Ed. C. Beasley Survey, A-32, Titus County, Texas, beginning at SW comer of said Survey; THENCE N. 2344 Vrs; THENCE E. 713.02 Vrs. to the true point of
beginning; THENCE E. 237.6 Vrs; THENCE 5. 475.20 Vrs.; THENCE W. 237.60 Vrs.; THENCE N. 475.20 Vrs. to the point of beginning, from the subsurface depth of 3600 feet down to 3710 feet.
		
	Lease No:	  	PN - 913148 - TRIX-LIZ OIL FAC
	 	  	SL307766/RW3391
	Lessor:	  	John D. Byram and Joy Scott
	Lessee:	  	Sun Oil Company (Delaware)
	Recording Data:	  	Date:	  	3/4/75
	 	  	Book:	  	395
	 	  	Page:	  	293
		
	Description of Property:	  	Surface Lease Agreement covering the following land, to-wit: Being a 3.2396 acre tract out of the J. Prather Survey, Abstract 454, Titus County, Texas and being more particularly described as
follows:
			
	 	  	 	  	BEGINNING at the southwest comer of said J. Prather Survey, thence N 88° 32’ 18” E - 1431.63 feet to a point in the south line of said survey; THENCE North 343.40 feet to the
beginning point of said 1.2396 acre tract; THENCE North 33° 20’ W 180 feet to a point; THENCE N 56° 40’ E 300 feet to a point; THENCES 33° 20’ E 180 feet to a point; THENCE S 56° 40’ W 300 feet to the point of
beginning and containing 1.2396 acres.

  

 8Assignment, Bill of Sale

 EXHIBIT 10.6 
  
 ASSIGNMENT, BILL OF SALE AND CONVEYANCE 
  

					
	STATE OF TEXAS	  	)(	  	 
	 	  	 	  	KNOW ALL MEN BY THESE PRESENTS:
	COUNTY OF TITUS	  	)(	  	 

  
 That, for TEN DOLLARS ($10.00) and
other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned, Energytec, Inc., a Nevada corporation, hereinafter referred to as “Assignor,” whose address is 14785 Preston Road, Suite 550,
Dallas, Texas 75254, hereby BARGAINS, SELLS, TRANSFERS, ASSIGNS and CONVEYS unto Richard R. and Thyra K. Zeits, husband and wife, hereinafter referred to as “Assigned,” whose address is 1320 Treebrook Court, Roswell, Georgia 30075, and to
its successors and assigns, an interest in and to the leasehold estates or working interest created by those certain Oil and Gas described in Exhibit “A.” The exact interest conveyed is specified in Exhibit “A.” 
  
 For the same consideration, Assignor does hereby BARGAIN, SELL, TRANSFER, ASSIGN and CONVEY
unto Assignee all equipment, personal property, fixtures and improvements located on, used in connection with or appurtenant to the leases described in Exhibit “A,” including without limitation, the wells identified in Exhibit
“A” in connection with each such lease, and all the surface, wellhead and downhole equipment, tanks, pumps, tubing, casing, flowline, separator, treating facilities, and all other equipment pertaining to said leases and lands. The
equipment, personal property, and fixtures are transferred to Assignee “AS IS,” “WITH ALL FAULTS” AND IN THEIR PRESENT STATE OF CONDITION AND REPAIR AND ASSIGNOR EXPRESSLY NEGATES ANY IMPLIED WARRANTY OF MERCHANTABILITY OR
WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, with respect to said interests in equipment, personal property and fixtures. 
  
 Assignor intends hereby to transfer and convey to Assignee, all of Assignor’s right, title and interest in and to the lands affected by the leases, including mineral
and royalty interests, overriding royalty, net profits interests, production payments and any other economic interest owned by Assignor in the production of hydrocarbons and minerals therefrom; and interests in and to the pooling and unitization
agreements, product purchase and sales contracts, leases, permits, rights-of way, easements, licenses, farmouts, options, and other beneficial contracts or instruments. 
  
 This assignment is subject to the terms and conditions of the original leases, all intermediate assignments affecting the leases and to
depth limitations, if any, with respect to the leases. As part of the consideration for this Assignment, Assignee assumes its proportionate part of all responsibility for plugging the wells identified in Exhibit “A” in accordance with all
the rules and regulations of the Railroad Commission of Texas. 
  
 TO HAVE AND TO
HOLD the leasehold interests described in Exhibit “A” and the related properties and assets above described, unto Assignee, its successors and assigns, forever, without warranty either express or implied. 

 Page Two 
 Assignment 
  
 This instrument is executed this
     day of             , 2002, but to be effective as of March 1, 2002, at 7:00 a.m. 
  

			
	 /s/ Richard R. Zeits

	Richard R. Zeits
	“ASSIGNEE”
	
	 /s/ Richard R. Zeits

	Richard R. Zeits,
	Attorney-in-Fact for
	Thyra K. Zeits
	“ASSIGNEE”
	
	Energytec, Inc.
		
	By	 	  

	Frank W. Cole, President
	“ASSIGNOR”

  
 STATE OF TEXAS 
  
 COUNTY OF 
  
 This instrument was acknowledged before me on this the      day of
            , 2002, by Richard R. Zeits and Richard R. Zeits, Attorney-in-Fact for Thyra K. Zeits. 
  

	
	  

	 Notary Public, State of Texas

  
 STATE OF TEXAS 
  
 COUNTY OF 
  
 This instrument was acknowledged before me on the      day of
            , 2002, by Frank W Cole, President of Energytec, Inc., a Nevada Corporation, on behalf of said corporation. 
  

	
	  

	 Notary Public, State of Texas

  

 2 

 Page 1 of 6 
  
 EXHBIT “A” 
  
 To that certain Assignment, Bill of Sale and Conveyance from Energytec, Inc. to Richard R. and Thyra K. Zeits. 
  
 It is the intent to convey a Forty Percent (40%) interest in all tracts herein described
whether or not all the leases are individually described herein. 
  
 This Exhibit
A contains Five (5) pages. 
  
 Following is a description of the Oil, Gas, and
Mineral leases covering 1,462 acres of land, more or less, situated in Trix-Liz Field Area Titus County, Texas: 
  

	1.	Lease dated October 29,1997, from Gladys A. Grimsley, et vir, et al to MODOC Energy Co., 160 acres more or less being all of the William Porter Survey, A-448, Recorded in Volume
1064, at Page 056, Deed Records, Titus County, Texas. 

  

 3 

 Page 2 of 6 
  
 EXHIBIT “A” 
  

					
	Lease No:	  	PN 414186 - Bankhead; PN 566252 - Hoffman-Bankhead-Trix-Liz
	 	  	Unit; and PN 898360 - Woodbine “C” Zone Unit
	 	  	963809
	Lessor:	  	W.T. Bankhead, et al
	Lessee:	  	W.W. Beall
	Recording Data:	  	Date:	  	12/02/54
	 	  	Book:	  	215
	 	  	Page:	  	151
		
	Description of Property:	  	160 acres more or less being all of the Wm. R. Porter
	 	  	 	  	Survey, Abstract No. 448 limited from the surface down to
	 	  	 	  	a depth of 5000 feet.
		
	Lease No:	  	PN 566252 - Hoffman-Bankhead-Trix Liz Unit and
	 	  	PN 898360 - Woodbine “C” Zone Unit
	 	  	963808
	Lessor:	  	A.C. Hoffman, et al
	Lessee:	  	American Liberty Oil Company
	Recording Data:	  	Date:	  	12/03/54
	 	  	Book:	  	214
	 	  	Page:	  	140
		
	Description of Property:	  	160 acres more or less being all of the John Prather Survey,
	 	  	 	  	Abstract No. 454 limited from the surface down to a depth
	 	  	 	  	of 5000 feet.
		
	Lease No:	  	PN 898360 - Woodbine “C” Zone Unit and PN 840821 - Hoffman
	 	  	et al
	 	  	963806
	Lessor:	  	A.C. Hoffman, Jr. et al
	Lessor:	  	R.E. Moore
	Recording Data:	  	Date:	  	01/05/56
	 	  	Book:	  	222
	 	  	Page:	  	149
		
	Description of Property:	  	640 acres more or less being all of the B.B.B. & C.R.R.
	 	  	 	  	Survey 207, Abstract 74 limited from the surface down to a
	 	  	 	  	depth of 5000’.

  

 4 

 Page 3 of 6 
  

					
	Lease No:	  	PN 917180 - Hoffman-Bankhead SWDS
	 	  	RW3392
	Grantor:	  	John D. Byram and Joy Scott
	Grantee:	  	Sun Oil Company (Delaware)
	Recording Data:	  	Date:	  	3/4/75
	 	  	Book:	  	395
	 	  	Page:	  	295
		
	Description of Property:	  	Right of way covering one acre more or less being described as follows:
	 	  	 	  	Start at the Southwest comer of 3. Prather Survey, Abstract 454, which is also the Southwest comer of A.C. Hoffman called 160 acre tract, same being the Northwest comer of William R. Porter
Abstract 448 Survey, all in the East line of A. Belcher Abstract 646 Survey; THENCE East 1152 feet and North 1389 feet to the point of beginning, the Southwest comer of the herein described one acre; THENCE N 208.7’ the northwest comer hereof;
THENCE E 208.7’ the northeast comer hereof; THENCE S 208.7’ the southeast comer hereof; THENCE W 208.7’ to the point of beginning containing one acre, all out of the J. Prather Survey, Abstract 454.
		
	Lease No:	  	RW 901257
	Lessor:	  	 	  	 
	Lessee:	  	Sun DX Oil Company
	Recording Data:	  	Date:	  	3/26/63
	 	  	Book:	  	 
	 	  	Page:	  	 
		
	Description of Property:	  	Right of way covering from SE comer of John Prather Survey along the easterly boundary of Survey along the easterly boundary of Survey a portion of land 30 feet wide and 777 feet long,
(approximately 48 rods long).
		
	Lease No.:	  	PN - 898360 - Woodbine “C” Zone Unit
	 	  	963807
	Lessor:	  	J.T. Williams, III et al
	Lessee:	  	W.W. Beall
	Recording Data:	  	Date:	  	12/22/58
	 	  	Book:	  	244
	 	  	Page:	  	68
		
	Description of Property:	  	160 acres more or less being the W/2 of the E.C. Beasley Survey, Abstract No. 52 limited from the surface down to a depth of 5000’.

  

 5 

 Page 4 of 6 
  

					
	Lease No:	  	PN - 898360 - Woodbine “C” Zone Unit
	 	  	963807-001
	Lessor:	  	Imogene Stuart Butler et al
	Lessee:	  	F.D. Prince
	Recording Data:	  	Date:	  	03/02/56
	 	  	Book:	  	224
	 	  	Page:	  	13
		
	Description of Property:	  	Same as next above.
		
	Lease No:	  	PN - 898360- Woodbine “C” Zone Unit
	 	  	963807-004
	Lessor:	  	Bessie Welch, et vir
	Lessee:	  	L.A. Pinkston and Fred Prince
	 	  	Date:	  	02/24/56
	 	  	Book:	  	223
	 	  	Page:	  	519
		
	Description of Property:	  	Same as next above.
		
	Lease No:	  	PN - 898360- Woodbine “C” Zone Unit
	 	  	963807-005
	Lessor:	  	B.B. Tankel
	Lessee:	  	Alford M. Flanagen
	Recording Data:	  	Date:	  	02/20/56
	 	  	Book:	  	246
	 	  	Page:	  	133
		
	Description of Property:	  	Same as next above.

  

 6 

 Page 5 of 6 
  

					
	Lease No:	  	PH 898360 - Woodbine “C” Zone Unit
	 	  	963807-002
	Lessor:	  	Bud Lewis, et ux
	Lessee:	  	John B. Stephens, Jr.
	Recording Data:	  	Date:	  	03/07/56
	 	  	Book:	  	224
	 	  	Page:	  	497
		
	Description of Property:	  	84.5 acres, more or less, being described as follows: BEGINNING at the SW comer of said Beasley Survey, a stake in the EB line of the J. Malsy Survey; THENCE NORTH with said line and EB line
of the W.R. Porter Survey, 5868 feet to a stake, the NW comer of said Beasley Survey and the SW comer of BBB & C Ry Co. Survey No. 207; THENCE EAST with the EB line of said Beasley Survey and EB line of the BBB & C Ry Co. Survey, 985 feet to
a stake in said line; THENCE SOUTH 3526 feet to a stake; THENCE WEST 376 feet to a stake; THENCE SOUTH 340 feet to the SB line of said Beasley Survey; THENCE WEST 609 feet to the place of beginning, containing 84.5 acres of land, more or less, and
being the same land described in a deed from G.R. Fry et us to Bud Lewis et ux, dated November 27, 1948, recorded in Vol. 164, Page 9 of the Titus County Deed Records, reference to which is here made for all purposes, limited from the surface down
to a depth of 5000 feet.
		
	Lease No:	  	PH 898360- Woodbine “C” Zone Unit
	 	  	963807-003
	Lessor:	  	G.R. Fry, et ux
	Lessee:	  	John B. Stephens
	Recording Data:	  	Date:	  	03/07/56
	 	  	Book:	  	224
	 	  	Page:	  	499
		
	Description of Property:	  	75.5 acres, more or less, being the W/160 acres of land of the E.C. Beasley Survey, Abstract No. 52, less and except the West 84.5 acres of the W1160 acres of the E.C. Beasley Survey,
Abstract No. 52 as described in that certain Amendment to Oil, Gas and Mineral Lease dated July 7, 1959 from Bud Lewis et ux as Lessor to John B. Stephens, Jr. as Lessee, recorded in Volume 250, Page 187 in the Deed Records of Titus County, Texas;
limited from the surface down to a depth of 5000 feet.

  

 7 

 Page 6 of 6 
  

					
	Lease No:	  	PN – 898360 - Woodbine “C” Zone Unit
	 	  	977959
	Lessor:	  	Laura H. Beall, et al
	Lessee:	  	Sun Oil Company
	Recording Data:	  	Date:	  	01/27/69
	 	  	Book:	  	348
	 	  	Page:	  	277
		
	Description of Property:	  	20 acres more or less being a part of Ed. C. Beasley Survey, A-32, Titus County, Texas, beginning at SW comer of said Survey; THENCE N. 2344 Vrs; THENCE E. 713.02 Vrs. to the true point of
beginning; THENCE E. 237.6 Vrs; THENCE 5. 475.20 Vrs.; THENCE W. 237.60 Vrs.; THENCE N. 475.20 Vrs. to the point of beginning, from the subsurface depth of 3600 feet down to 3710 feet.
		
	Lease No:	  	PN -913148 - TRIX-LIZ OIL FAC
	 	  	SL307766/RW3391
	Lessor:	  	John D. Byram and Joy Scott
	Lessee:	  	Sun Oil Company (Delaware)
	Recording Data:	  	Date:	  	3/4/75
	 	  	Book:	  	395
	 	  	Page:	  	293
		
	Description of Property:	  	Surface Lease Agreement covering the following land, to-wit: Being a 3.2396 acre tract out of the J. Prather Survey, Abstract 454, Titus County, Texas and being more particularly described as
follows:
			
	 	  	 	  	BEGINNING at the southwest comer of said J. Prather Survey, thence N 88° 32’ 18” E - 1431.63 feet to a point in the south line of said survey; THENCE North 343.40 feet to the
beginning point of said 1.2396 acre tract; THENCE North 33° 20’ W 180 feet to a point; THENCE N 56° 40’ E 300 feet to a point; THENCES 33° 20’ E 180 feet to a point; THENCE S 56° 40’ W 300 feet to the point of
beginning and containing 1.2396 acres.

  

 8 

 Energytec, Inc. 
 14785 Preston Road, Suite 550, Dallas, TX 75254 (972) 789-5136 Fax (972) 789-5138 
  
 March 11, 2002 
  
 Richard R. and Thyra K. Zeits 
 1320 Treebrook Court 
 Roswel1, Georgia 30075 
  

			
	 Re:
	 	 Hoffman-Bankhead Lease

	 	 	 Titus County, Texas

  
 Dear Mr. And Mrs. Zeits:

  
 This letter will review our agreement relating to operations
of the above group of properties. An Operating Agreement has been signed, and there are other aspects of development of the properties, which are more fully defined herein. 
  
 The Evaluation Report entitled: 
  
 Oil Well Restoration Project 
 Hoffman- Bankhead
Leases 
 Triz-Liz Field 
 Titus
County, Texas 
 By 
 Frank W Cole
Engineering 
 Dated: January 2002 
  
 is attached by reference. 
  
 Energytec agrees, at its sole cost, to attempt to place back on production, those nine wells shown in the Appendix of the referenced Report in that
section entitled “Meeting with Calvin Bass, dated 12-18-01.” Energytec does not guarantee any specific producing rates from these wells, although the Report does show projected producing rates. This part of the Restoration Project is
referred to in the Evaluation Report as Phase I. 
  
 The Zeits
agree to purchase a 40% working interest in the Properties, which will pay their costs through Phase I, for a total price of Ninety Six Thousand Dollars ($96,000). 
  
 Following completion of Phase I, work will proceed on Phases II and III, as shown in the Report. It is agreed that the
projected work and costs of Phases II and III are estimates, prepared before Energytec and Cole Engineering had access to the properties. The restoration of the remainder of the wells may be changed from time to time as more information is
developed. 
  

 9 

 The Zeits agree to pay their proportionate parts of work on all wells following completion of Phase I.
The Operating Report more fully describes the procedures to be followed in the event the Zeits do not agree on the restoration procedures. 
  
 Agreed to the foregoing: 
  

							
	 /s/ Richard R. Zeits

	 	 /s/ Richard R. Zeits

	 Date: 3/15/02
	 	 Attorney in Fort

	 	 	 	 	 For Thyra K.Zeits

			
	 	 	 	 	 Date: 3/15/02

		
	 Energytec, Inc.
	 	 Frank W. Cole Engineering

				
	 By:
	 	 /s/ Frank W. Cole

	 	 By:
	 	 /s/ Frank W. Cole

	 President
	 	 Owner

		
	 Date: 3/15/02
	 	 Date 3/15/02

  

 10

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