Cobra Oil & Gas CO (Form: 8-K, Received: 07/02/2008 09:57:19)

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of Earliest Event Reported):

June 10, 2008

COBRA OIL & GAS COMPANY

(Exact name of registrant as specified in its charter)

Nevada		000-52782		26-2113613
(State or other jurisdiction of incorporation)		(Commission File Number)		(I.R.S. Employer Identification No.)

Uptown Center 2100 West Loop South, Suite 400 Houston, Texas		77027
(Address of principal executive offices)		(Zip Code)

(832) 476-8941

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

On June 16, 2008 we entered into an Assignment of Farmout Agreement with West Canyon Energy Corp. (aka PetroSouth Energy Corp.). Thereunder, we are the assignee of a 25% interest in and to a Farmout Agreement dated February 1, 2008 by and between Transco Oil & Gas, Inc. as Farmor and West Canyon Energy Corp. respecting the North Semitropic Prospect in Kern County, California. We paid $34,000 for the assignment and are responsible for the payment of our proportionate share of drilling and testing costs on the prospect. On or about June 12, 2008 we paid Transco Oil & Gas Inc. $100,437.50 representing the balance due by us on our share of the prospect acquisition.

As previously announced, on May 22, 2008 we entered into a Memorandum of Intent with Coastal Petroleum Company (Coastal”) which outlines the terms and conditions under which Coastal is willing to enter into a formal agreement with us on certain oil and gas leases owned by Coastal in Valley Creek, Montana. The leases involve approximately 82,800 net acres. Under the leases, Coastal has a 100% working interest with between 75.5% to 80.5% net revenue interests. Pursuant to the Memorandum of Intent, on May 23, 2008 we paid Coastal $180,000 in exchange for a two year option to purchase a 50% interest in the leases for $1,000,000. Prior to exercising the purchase option, we have the right to drill a well at our expense on the leases and earn a 50% working interest in the spacing unit if the well is a producer and we make full payment for the 50% working interest. We have no obligation however, to drill any well on the leases before we exercise our right to purchase the 50% interest in the leases from Coastal. On June 10, 2008 we entered into a formal agreement with Coastal with respect to the foregoing.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

Exhibits filed as part of this Report are as follows:

Exhibit 10.1

Assignment of Farmout Interest dated June 16, 2008 between Registrant and West Canyon Energy Corp. (aka PetroSouth Energy Corp.)

Exhibit 10.2

Formal Agreement, dated June 10, 2008 between Registrant and Coastal Petroleum Company

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.


	COBRA OIL & GAS COMPANY

Date: July 1, 2008	By:	/s/ Massimiliano Pozzoni
		Name: Massimiliano Pozzoni Title: President

EXHIBIT 10.1

ASSIGNMENT

FARMOUT INTEREST

THIS ASSIGNMENT is made and entered into, by and between, West Canyon Energy Corp., also known as PetroSouth Energy Corp. hereinafter collectively referred to as “Assignor”, and Cobra Oil & Gas Company, hereinafter referred to as “Assignee”.

WHEREAS, this Assignment concerns and effects a change in ownership of a 25% interest in and to that certain Farmout Agreement dated February 1, 2008 (FOA copy attached) by and between Transco Oil & Gas, Inc. (TOG) as Farmor and the Assignor (set out above) to this Assignment. Assignor is the owner and holder of a 25% interest in and to the FOA to the “North Semitropic Prospect” (Prospect) more fully described in the FOA and located in Kern County, California. Assignor hereby agrees to transfer Assignor’s 25% interest in the FOA to Assignee along with all rights, benefits and obligations therein stated. Assignee hereby agrees to accept said 25% interest in the FOA herein assigned along with all rights, benefits and obligations therein stated. Assignee acknowledges that the drilling and testing of the Prospect is eminent, and failure to meet cash calls as per the FOA will result in a loss of interest in the FOA and Prospect. Assignee states that it has read and fully understands the FOA and hereby accepts same and agrees to abide by all the terms and conditions therein stated.

WHEREAS, this Assignment is made in accordance with and expressly subject to the terms and provisions of the FOA and shall become immediately affective upon execution by both Assignor and Assignee and approval of TOG as Farmor to the FOA stated above.

NOW, THEREFORE, in consideration of the sum of Ten Dollars ($10.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Assignor does hereby convey, transfer and assign to Assignee all of Assignor’s right, title and interest in and to the said FOA and Prospect described above.

This Assignment shall inure to and be binding upon the respective successors and assigns of the parties hereto.

IN WITNESS WHEREOF, this Assignment is executed the day and year as set out below.

ASSIGNOR:

Dated: 16 June 2008

West Canyon Energy Corp.

(aka PetroSouth Energy Corp.)

ASSIGNEE:

Dated: 16 June 2008

Cobra Oil & Gas Company


By:	/s/ Fred B. Zaziski	By:	/s/ Massimiliano Pozzoni
	Fred B. Zaziski - Chairman 20333 State Hwy. 249 Suite 200 - 113 Houston, TX 77070		Max Pozzoni - President Uptown Center 2100 West Loop South Suite 900 Houston, TX 77027

APPROVED by TOG as Farmor:

Dated: 17 June 2008

Transco Oil & Gas, Inc.


By:	/s/ Larry J. Messmer
	Larry J. Messmer - President 11605 Meridian Market View Unit 124, # 303 Falcon, CO 80831

Farmout Agreement

“North Semitropic Prospect”

This Farmout Agreement (“FOA”), when accepted and agreed to by the undersigned parties, shall set forth the terms, conditions and covenants under which Transco Oil & Gas, Inc. hereinafter referred to as “Farmor” and those entities listed on the signature page, hereinafter referred to collectively as “Farmee” shall pursue the exploration and development of the North Semitropic Prospect Area (prospect). This is a “Drill to Earn” Farmout Agreement and interest will be earned in the entire +/-2.390 acre leasehold by Farmee after drilling the initial test well as set out below. All operations will be conducted in accordance with the mineral lease agreements. In consideration of the mutual terms and covenants provided in this FOA, Farmor and Farmee agree as follows:

Farmor is the owner of certain Oil & Gas Leases covering +/-2,390 net acres located in Kern County, California and more specifically set out in the attached Exhibit “A” and the Lease Schedule. This FOA is a binding agreement and is entered into by the parties concurrently with the industry model form Joint Operating Agreement (JOA), attached as Exhibit “B” and covering the operations to be conducted on the North Semitropic Prospect. Execution of this FOA will serve as constructive execution of the JOA which is attached as Exhibit “B”. The specific intent of Farmor in granting this Farmout Agreement is to cause the drilling of the first test well to +/- 14.000' to exploit the productive potential of two (2) specific target horizons, the fractured Monterey Shale at +/- 10,000 ft. estimated vertical depth and the Freeman Jewett/Vedder Sand at +/- 14,000 ft. estimated vertical depth. The operations for drilling and testing shall be conducted as per the AFE & Drilling Program attached to the JOA as Exhibit “H” and are subject to change by the Operator.

Property subject to this FOA is described on Exhibit “A” attached hereto and hereby made apart of this FOA, as well as the Lease Schedule. Also described on Exhibit “A” is the Area of Mutual Interest (AMI) between Farmor and Farmee. The current Net Leasehold Acreage is +/- 2,390. The net leasehold is subject to updates as additional leases are acquired within the AMI. Subsequent to executing this FOA and payment of the Prospect Acquisition Fee, Farmee shall be responsible for its pro-rata share of delay rentals on the leasehold. The decision to acquire new leases within the AMI shall be by mutual agreement between Farmor and Farmee. The costs to acquire new leases within the AMI shall be shared proportionately among Farmee according to interest held in the Prospect.

Farmor and Farmee agree that Farmor and/or its assignees including Farmor’s originating geologist will collectively retain the specified 6% of 8/8ths Overriding Royalty Interests (ORR!) and 15% Back-In Working Interests (BIWI) as set out in Exhibit “A”. Said ORRI and BIWI shall cover the current Leaseholds, future Leaseholds and all Lands within the AMI as set out in the attached Exhibit “A”. The ORRI shall be free and clear of any and all costs for lease acquisitions, drilling, completions, operating, re works, etc. and shall receive their specific ORRI percentage of gross revenues based on 100% of production sales. Farmor’s 15% WI shall have the option, on a well by well basis, to participate on a follow up well or maintain the 15% BIWI which shall be on a per well basis and after payout of all new lease acquisitions, hard drilling & completion costs and well operating costs.

Transco Oil & Gas, Inc. or its appointee shall be the initial Operator and win deliver to the drilling partners (Farmee) a 77.00% Net Revenue Interest (NRI) on the drill site acreage. Farmee collectively will earn 100% Working Interest in the first test well Before Pay Out (BPO), to become an 85% Working Interest After Pay Out (APO) on a per well basis. Farmees collectively, shall be responsible for 100% of the Prospect acquisition, estimated drilling, testing and completion cost for the first test well, T.D. +/- 14,000 ft. (Monterey & FJ/Vedder test).

Originating Geologist Fee: A fee of $10,000 on follow up wells shall be paid to Tom Fassio which includes updating all geology/geophysical interpretations based on new data acquired from previous wells. This fee will also cover well site geology/geophysics consulting during drilling and completion operations.

Estimated costs for the first test well.

Prospect Acquisition:	$ 537,750	+/- $225 / acre for GG&L + OH
Drilling 14,000':	1,500,000*	Variable Costs, as per current AFE.
Completion:	900,000*	Completion in FJ/Vedder.
	$ 2,937,750	*See attached AFEs, subject to change.

Should the +/- 14,000' test of the FJ/Vedder result in a dry hole, the well will be plugged back and based on favorable log evaluations, a completion made in the fractured Monterey Shale at +1- 10,000'. As per current AFE, the call for completion in the Monterey Shale will be about $1,100,000 including a +/- 1,000' horizontal leg.

Additional Test Wells: An election (drilling commitment) by Farmee for a test well to evaluate the deep Eocene structure (+/-16,500') must be made within 12 months and spud no longer than 18 months from date of spudding the first test well as called for herein. Failure by Farmee to elect and spud will result in deep rights reverting to Farmor and Farmee retaining all rights to 100 ft. below deepest vertical drill depth.

The designated Operator will., as soon as practical after full execution of Agreements covering 100% of the working interest and payment in full of the Prospect Acquisition Fee, initiate the permitting process and contract for a drilling rig for a mutually agreeable move in date. The first test well shall be drilled to +/14,000'.

10.

The Prospect Acquisition fee listed above is due and payable to Farmor upon signing of this FDA. Farmee shall retain that percentage of the Prospect in relation to the percentage of the Prospect Acquisition Fee paid by Farmee to Farmor. All subsequent «Cash Calls” by the Operator for the above listed Drilling & Completion funds as per the latest AFE shall be made following full execution of this FDA. All Cash Calls for Drilling & Completion funds and/or any cost overruns are due within 10 days after Operator issues a Cash Call. Failure to meet a Cash Call for funds as called for herein shall result in Farmee forfeiting all working interest ownership and previously paid in funds to Farmor.

11.

Farmee acknowledges it has reviewed the attached IDA (Exhibit «B''), all leasehold and technical data to Farmee's satisfaction. Farmee agrees to and acknowledges that upon execution of this FOA and thereafter, all or any portion of this Prospect is subject to prior sale until such time as Farmee has paid the Farmee entire pro-rata share (see signature page) of the Prospect Acquisition Fee due to Farmor. Farmee further acknowledges that Farmor has granted an option on at least 25% of the Prospect to another company until March 31, 2008. In the event of a prior sale any refund of previously paid funds due Farmee shall be paid to Farmee promptly by Farmor.

12.

Confidentiality & Representation: Farmee may utilize the displays and exhibits that Farmor has delivered to Farmee for the purpose of evaluating the Prospect and facilitating the drilling of the first test well. However, Farmee agrees not to use Farmor’s name in verbal discussions or on any copies that Farmee intends to show to any 3rd parties. Farmee agrees that all data relating to the Prospect is highly proprietary in nature and no copies of said data will be given to 3rd parties without Farmor's written approval. Farmee agrees that no interests of any nature in the Prospect will be pledged, conveyed or placed of record without Farmor's written approval. This FOA, all Prospect data and dealings between Farmee and Farmor are to be held strictly confidential and not to be disclosed to any 3rd party without written approval from both parties to this FOA. Excepting that this FOA may be disclosed to the company that is currently holding an option on the Prospect which is referred to in paragraph II above.

13.

Hold Harmless & Indemnification: Farmee, its individual principal officers, directors and affiliates (Farmee, etal) hereby agree to fully indemnify, defend and hold harmless Farmor from any and all losses, legal actions and liabilities of any nature that arise as a result of Farmee, etal discussions or dealings with any 3rd party with regard to the Prospect. Farmee, etal agrees that the Prospect shall be kept free and clear of any liens, encumbrances and/or legal actions so as to allow Farmor the full enjoyment of the Prospect. In the event the Prospect is clouded as a result of Farmee, etal actions, then Farmee, etal agrees to individually and corporately stand ready to reimburse Farmor for all losses and/or expenses incurred to clear Prospect of any and all clouds.

14.

Prospect Acquisition Fee: It is agreed that Farmee shall pay to Farmor a deposit of $34,000 toward the Prospect Fee set out below. The balance due shall be paid to Farmor immediately once 100% of the Prospect is sold. In the event the Prospect is not fully sold within 90 days from the date below then Farmee may request and receive a full refund of the deposit.

This FOA may be signed in counterparts all constituting a single agreement. Farmee and Farmor have signed this FOA which will act as constructive execution of the accompanying JOA (Exhibit “B”). This FOA when signed will become the governing agreement and will prevail over any conflicts between this FOA and the JOA.

	Farmor: Transco Oil & Gas, Inc.

	By: /s/ Larry J. Messmer
Dated: 1 February 2008	Larry J. Messmer - President 7643 McLaughlin Rd., # 215 Falcon, CO 80831 (719) 520-3208 / (719) 635-6181

Farmee:	WI BPO	WI APO	% of Cost	Prospect Fee
PetroSouth Energy Corp.
	25%	21.25%	25%	$134,437.50
By: /s/ Fred B. Zaziski
Fred B. Zaziski - Chairman	Above percentages and dollars to be adjusted as per exercise of prior sales or options and proportionate to the amount of the total prospect fee paid by Farmee.
Print Name & Title

Address:

20333 State Highway 249, Ste. 200 - 113 Houston, TX 77070 (281) 378-1563 / (281) 271-8600
Phone & Fax

EXHIBIT 10.2

FORMAL AGREEMENT

This formal farm-out agreement (hereinafter referred to as the “Agreement”) is between Coastal Petroleum Company (hereinafter referred to as “Coastal”) and Cobra Oil & Gas Company (hereinafter referred to as “Cobra”). Coastal and Cobra are sometimes collectively referred to as the “Parties”.

This Agreement is referred to in a Memorandum of Intent signed by the Parties on May 22, 2008, and when executed will replace that Memorandum of Intent and govern the rights of the Parties.

In consideration of the premises, mutual covenants and obligations herein contained, the Parties agree as follows:

LEASES

Coastal has identified an area containing a series of shallow and deep prospects, the Starbuck Prospects. Coastal owns leases on 82,801.38 gross mineral acres (82,801.38 net acres) in Valley County, Montana (the “Leases”) that include the Starbucks Prospects. The Leases are 100% working and at least between 75.5 and 80.5% net revenue leases. A copy of the Schedule of Leases is enclosed herewith as Attachment A.

AREA OF MUTUAL INTEREST

An Area of Mutual Interest (AMI) shall exist within four miles of the boundaries of the Leases. Areas of Mutual Interest established under Coastal’s prior third party agreements that are still in effect are excluded from this AMI.

INTENTION OF THE PARTIES

Coastal’s intention is to grant to Cobra a right to purchase a 50% working interest in the Leases for a period of two years from the date of the MOI, for a consideration of $180,000. To exercise the right to purchase, notice must be given of Cobra’s agreement to pay $1,000,000 toward Coastal’s drilling costs and the requirements under section E herein must be fulfilled. Following the exercise of Cobra’s right to purchase, the Parties would each pay 50% of the cost of wells in which they both participate and each be entitled to 50% of the revenues of wells in which they both participate. Cobra’s intention is to acquire the total of the working interests Coastal intends to farmout.

COBRA TO ACQUIRE A RIGHT TO PURCHASE A 50%

WORKING INTEREST IN THE LEASES.

In order to acquire the right to purchase a 50% interest in the Leases (“the Interest”) for a period of two years, Cobra has paid Coastal the sum of $180,000. During this two year period Cobra is not obligated to drill any well on the property, until and unless it exercises the right to purchase the Interest. However, if Cobra desires to perform geologic analyses or drill a well before it has purchased the Interest, it shall pay the full cost of such analyses or well or wells and be entitled to a 50% working interest in the spacing unit of the well or wells if a successful well is drilled. No portion of the cost paid by Cobra to perform such analyses or drill such wells shall apply to the $1,000,000 required to be paid by Cobra to complete the acquisition of the Interest. If Coastal desires to drill a well before Cobra has given notice of its intent to exercise its right to acquire the Interest and Cobra does not participate in the well, Coastal will pay the full cost of the well and be entitled to 100% of the working interest in the spacing unit of the well.

EXERCISE BY COBRA OF RIGHT TO ACQUIRE A 50%

INTEREST IN THE LEASES

In order for Cobra to complete the acquisition of the 50% interest Coastal is offering, Cobra and Coastal agree that:

At the time of Cobra’s intent to exercise the right to acquire the 50% interest in the Leases, but no later than May 22, 2010, Cobra shall send Coastal a letter exercising the right to acquire and agreeing to pay to Coastal or for Coastal’s benefit, the sum of $1,000,000 toward the cost of drilling wells on the Leases.

When a well is proposed in which Cobra participates, Cobra will pay both its share and Coastal’s share of the cost of such well, until such time as it has paid the $1,000,000 toward Coastal’s share of costs.

When a well is proposed in which Cobra does not participate, Cobra will pay the full cost of such well up to the $1,000,000, or whatever portion of the $1,000,000 remains to be paid by Cobra at that time.

At the time of full payment, Coastal shall assign the 50% undivided working interest in the Leases to Cobra.

RENTALS:

Once Cobra is assigned its 50% interest under the leases, Coastal and Cobra shall each pay their proportionate share of the delay or other rentals on the Leases. Coastal shall be the party which actually submits the rentals to the lessors. Coastal shall give sixty days notice to Cobra of the date when rentals are due and Cobra shall pay its share, whatever that may be at the time, within fifteen days of the date of the notice to Coastal. Coastal shall pay the rentals advanced. In the event that either party elects not to pay its portion of the rentals to any part of the Lease it shall give the other party at least sixty days notice of its intention not to pay rentals and the other party may do so and retain that portion of the Lease as its sole property, less and excluding any producing units where the party’s rights continue and no rentals were due.

FAILURE TO FULFILL REQUIREMENTS:

In the event that Cobra completes the requirements of Paragraph E above, Cobra shall have earned a 50% undivided working interest in the Leases. In the event that Cobra fails to timely meet any of the requirements of Paragraph E. then Cobra shall earn no interest at all in the Leases.

SUBSEQUENT EXPLORATION OF THE LEASES:

After Cobra earns its 50% undivided interest in the Leases, either party may propose a well within the Leases or additional acreage acquired within the area of mutual interest. The other party may opt-in or opt-out of the proposed well, on a well by well basis. If the other party opts-in, the drilling shall proceed with both Parties paying their share of the costs. If the other party opts-out of the proposed well the party opting out shall have no interest in the spacing unit of that well, but the party opting out shall retain its right to participate in any other well drilled as a development well or exploratory well following the well the party has opted out of.

WELL INFORMATION:

Each party shall furnish the other party with daily drilling reports, logs, DST results, results of other tests performed, and production reports on any well it drills under this Agreement.

OPERATING AGREEMENT:

All operations for the joint account of Coastal and Cobra on the Leases shall be in accordance with the terms and provisions of the model Joint Operating Agreement attached hereto and made a part of this Agreement as Exhibit “B”. Coastal shall be designated Operator except where it declines to participate in the drilling of a well or wells by Cobra, in which case, Cobra may elect to act as operator and owner of such well or wells, so long as it meets the following qualifications: Cobra shall be registered to do business in Montana; shall be bonded and provide proof of insurance to Coastal; and shall not commence operations until a notice of change of operator has been filed and accepted by the proper authorities, or in the alternative, a permit has been granted in Cobra’s name

TIME OF THE ESSENCE:

It is understood that time is of the essence of this Agreement, and no provision hereof shall be modified nor waived except in writing.

AREA OF MUTUAL INTEREST ACQUISITIONS:

The Area of Mutual Interest exists within four miles of the boundaries of the Leases. Each party shall offer to the other party the right to participate for its then current share of the interest in the Leases in the acquisition of any lease or other interest that party may have the option to acquire, at the same percentage of the cost of acquisition. In the event that the other party declines to participate, then that lease or other interest shall become outside this AMI and the other party shall have no interest under the AMI rights as to that lease or interest acquired. Areas and AMIs established by or included in Coastal’s existing third party agreements are excluded from this AMI. A party may propose geological investigations of whatever character within the AMI, and that party shall offer to the other party the right to participate in the costs and results of the proposed geological investigation. In the event that the other party declines to participate, then that party shall have no right to the information and data from the geological investigation. However, declining to participate in the geological investigation shall not affect that party’s right to participate in any well proposed by the party.

FORCE MAJEURE:

In the event any party hereof is prevented from complying with any of the obligations imposed upon it hereunder, or from exercising any of the rights granted to it hereunder, as a result of an act of God, or any other cause, whether similar or dissimilar, reasonably proved beyond the control of such party, the time within which said party may perform such obligations or exercise such rights shall be extended for a period equal to the time during which said party was prevented from the performance of such obligations, or the exercise of such rights. The party having the difficulty shall take all reasonable steps to remedy such condition as rapidly as possible.

NOTICES:

All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient, and if not so confirmed, then on the next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the respective Parties at their address as set forth below or to such e-mail address, facsimile number or address as subsequently modified by written notice given in accordance with this Section.

Coastal Petroleum Company

Post Office Box 609

Apalachicola, Florida 32329

Telephone Number: 850-653-2732

Fax Number: 850-653-2732

Cobra Oil & Gas Company

Uptown Center

2100 West Loop South, Suite 900

Houston, Texas 77027

Telephone Number:

Fax Number:

LEGAL ACTIONS:

If any action at law or in equity (including arbitration) is necessary to enforce or interpret the terms of any of this Agreement, the prevailing party shall be entitled to reasonable attorney’s fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled.

AMENDMENTS:

Any term of this Agreement may be amended, terminated or waived only with the written consent of each of the Parties hereto.

SEVERABILITY:

The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.

DELAY NO WAIVER OF REMEDIES:

No delay or omission to exercise any right, power or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power or remedy of such non-breaching or non-defaulting party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded to any party, shall be cumulative and not alternative.

ENTIRE AGREEMENT:

This Agreement (including the Exhibits hereto), constitute the full and entire understanding and agreement between the Parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between the Parties are expressly canceled.

ARBITRATION:

The Parties agree that any unresolved controversy or claim arising out of or relating to this Agreement, except as: (i) otherwise provided in this Agreement, or (ii) any such controversies or claims arising out of either party’s intellectual property rights for which a provisional remedy or equitable relief is sought, shall be submitted to arbitration by one arbitrator mutually agreed upon by the Parties, and if no agreement can be reached within thirty (30) days after names of potential arbitrators have been proposed by the American Arbitration Association (the “ AAA ”), then by one arbitrator having reasonable experience in oil and gas transactions of the type provided for in this Agreement and who is chosen by the AAA. The arbitration shall take place in Tallahassee, Florida, in accordance with the AAA rules then in effect, and judgment upon any award rendered in such arbitration will be binding and may be entered in any court having jurisdiction thereof. There shall be limited discovery prior to the arbitration hearing as follows: (a) exchange of witness lists and copies of documentary evidence and documents relating to or arising out of the issues to be arbitrated; (b) depositions of all party witnesses; and (c) such other depositions as may be allowed by the arbitrators upon a showing of good cause. Depositions shall be conducted in accordance with the Florida Code of Civil Procedure, the arbitrator shall be required to provide in writing to the Parties the basis for the award or order of such arbitrator, and a court reporter shall record all hearings, with such record constituting the official transcript of such proceedings. The prevailing party shall be entitled to reasonable attorney’s fees, costs, and necessary disbursements in addition to any other relief to which such party may be entitled. Each of the Parties to this Agreement consents to personal jurisdiction for any equitable action sought in the U.S. District Court for the Northern District of Florida or any court of the State of Florida having subject matter jurisdiction.

DATE:

The date of this Agreement is June 10, 2008.

Coastal Petroleum Company		Cobra Oil & Gas Company

By:	/s/ Phillip W. Ware	By:	/s/ Max Pozzoni
	Phillip W. Ware, President		Max Pozzoni, President