Samson Oil & Gas LTD (Form: 10-K, Received: 09/13/2011 17:08:22)

Exhibit 10.1

PURCHASE AND SALE AGREEMENT

AMONG

SAMSON OIL AND GAS USA, INC.

AS SELLER

AND

PRIMA EXPLORATION, INC.,

POWDER MORNING, LLC,

KAB ACQUISITION LLLP-IX,

MORSE ENERGY PARTNERS II LLC,

APPLE CREEK LLC, AND

BLACKLAND PETROLEUM, LLC

AS BUYERS

DATED: MARCH 24, 2011

AND EFFECTIVE JANUARY 1, 2011

TABLE OF CONTENTS

		Page

ARTICLE 1	ASSETS	1

Section 1.01	Agreement to Sell and Purchase	1
Section 1.02	Assets	1
Section 1.03	Excluded Assets	3

ARTICLE 2	PURCHASE PRICE	3

Section 2.01	Purchase Price	3
Section 2.02	Deposit	3
Section 2.03	Allocated Values	4

ARTICLE 3	EFFECTIVE TIME AND OTHER MATTERS	5

Section 3.01	Ownership of Assets	5
Section 3.02	Section 1031 Exchange	5
Section 3.03	Prima’s Representation of Buyers	5

ARTICLE 4	TITLE AND ENVIRONMENTAL MATTERS	5

Section 4.01	Examination Period	5
Section 4.02	Title Defects	6
Section 4.03	Notice of Title Defects	7
Section 4.04	Remedies for Title Defects	8
Section 4.05	Special Warranty of Title	9
Section 4.06	Preferential Rights to Purchase	10
Section 4.07	Consents to Assignment	11
Section 4.08	[Omitted Intentionally]	11
Section 4.09	Environmental Review	11
Section 4.10	Definitions Used in Article 4 and in this Agreement	13
Section 4.11	Notice of Environmental Defects	14
Section 4.12	Remedies for Environmental Defects	14
Section 4.13	Independent Experts	15
Section 4.14	Limitation of Remedies For Title Defects, Representation Defects and Environmental Defects	16
Section 4.15	Breach of Certain Representations and Warranties	17
Section 4.16	DISCLAIMER AND WAIVER	17

ARTICLE 5	REPRESENTATIONS AND WARRANTIES OF SELLER	17

Section 5.01	Existence	17
Section 5.02	Legal Power	18
Section 5.03	Execution	18
Section 5.04	Brokers	18
Section 5.05	Bankruptcy	18
Section 5.06	Suits and Claims	18

TABLE OF CONTENTS

(Continued)

		Page

Section 5.07	AFEs	18
Section 5.08	Contracts	18
Section 5.09	Records	19
Section 5.10	Royalties	19
Section 5.11	Taxes	19
Section 5.12	Gas Imbalances	19
Section 5.13	Compliance with Laws	19
Section 5.14	Personal Property and Equipment	19
Section 5.15	No Alienation	19
Section 5.16	Property Expenses	20
Section 5.17	Tax Partnerships	20
Section 5.18	Preferential Rights to Purchase and Consents	20
Section 5.19	Liens and Encumbrance	20
Section 5.20	Payout Status	20
Section 5.21	Notice of Changes	20
Section 5.22	Representations and Warranties Exclusive	20

ARTICLE 6	REPRESENTATIONS AND WARRANTIES OF EACH BUYER	20

Section 6.01	Existence	20
Section 6.02	Legal Power	21
Section 6.03	Execution	21
Section 6.04	Brokers	21
Section 6.05	Bankruptcy	21
Section 6.06	Suits and Claims	21
Section 6.07	Independent Evaluation	21
Section 6.08	Qualification	22
Section 6.09	Securities Laws	22
Section 6.10	No Investment Company	22
Section 6.11	Funds	22
Section 6.12	Notice of Changes	22
Section 6.13	Representation by Prima	22
Section 6.14	Representations and Warranties Exclusive	22

ARTICLE 7	OPERATION OF THE ASSETS	23

Section 7.01	Operation of the Assets	23
Section 7.02	Public Announcements	23
Section 7.03	Successor Operator	24

ARTICLE 8	CONDITIONS TO OBLIGATIONS OF SELLER	24

Section 8.01	Representations	24

TABLE OF CONTENTS

(Continued)

		Page

Section 8.02	Performance	24
Section 8.03	Pending Matters	24

ARTICLE 9	CONDITIONS TO OBLIGATIONS OF BUYERS	24

Section 9.01	Representations	24
Section 9.02	Performance	24
Section 9.03	Pending Matters	24
Section 9.04	Macquarie Liens	25

ARTICLE 10	THE CLOSING	25

Section 10.01	Time and Place of the Closing	25
Section 10.02	Allocation of Costs and Expenses and Adjustments to Purchase Price at the Closing	25
Section 10.03	Closing Adjustments and Allocations Statement	27
Section 10.04	Post-Closing Allocations and Adjustments to Purchase Price	27
Section 10.05	Transfer Taxes	28
Section 10.06	Ad Valorem and Similar Taxes	28
Section 10.07	Actions of Seller at the Closing	29
Section 10.08	Actions of Prima at the Closing	29
Section 10.09	Recordation; Further Assurances	30

ARTICLE 11	TERMINATION	30

Section 11.01	Right of Termination	30
Section 11.02	Effect of Termination	31
Section 11.03	Attorneys’ Fees, Etc	31

ARTICLE 12	ASSUMPTION AND INDEMNIFICATION	31

Section 12.01	Each Buyer’s Obligations after the Closing	31
Section 12.02	Seller’s Obligations after the Closing	32
Section 12.03	Plugging and Abandonment Obligations	33
Section 12.04	Environmental Obligations	34
Section 12.05	Definition of Claims	34
Section 12.06	Application of Indemnities	35
Section 12.07	Each Buyer’s Indemnity	36
Section 12.08	Seller’s Indemnity	36
Section 12.09	Notices and Defense of Indemnified Claims	36
Section 12.10	Survival	36
Section 12.11	Exclusive Remedy	37
Section 12.12	Prima’s Indemnity	37
Section 12.13	Defenses and Counterclaims	37

iii

TABLE OF CONTENTS

(Continued)

		Page

Section 12.14	Anti-Indemnity Statute, No Insurance; Subrogation	37
Section 12.15	Settlements by Seller	37

ARTICLE 13	DISCLAIMERS; CASUALTY LOSS AND CONDEMNATION	38

Section 13.01	Disclaimers of Representations and Warranties	38
Section 13.02	NORM	39
Section 13.03	Casualty Loss; Condemnation	39

ARTICLE 14	MISCELLANEOUS	40

Section 14.01	Names	40
Section 14.02	Expenses	40
Section 14.03	Document Retention	40
Section 14.04	Entire Agreement	40
Section 14.05	Waiver	40
Section 14.06	Construction	41
Section 14.07	No Third Party Beneficiaries	41
Section 14.08	Assignment	41
Section 14.09	Governing Law	41
Section 14.10	Notices	41
Section 14.11	Severability	43
Section 14.12	Interpretation	43
Section 14.13	Time of the Essence	44
Section 14.14	Counterpart Execution	45

EXHIBITS AND SCHEDULES

Exhibit A		Subject Interests and Surface Agreements
Exhibit B		Wells
Exhibit C		Allocated Values
Exhibit D		Form of Assignment and Bill of Sale
Exhibit E		Investment Representation Letter

Schedule 1.03		Excluded Assets
Schedule 4.06		Rights of Preferential Purchase
Schedule 4.07		Consents to Assignment
Schedule 5.06		Litigation
Schedule 5.07		Authorizations for Expenditures
Schedule 5.08		Material Contracts
Schedule 5.12		Gas Imbalances

TABLE OF DEFINED TERMS

Agreement		1
Allocated Values		4
Apple		1
Assets		1
Assignment		9
Assumed Obligations		31
Blackland		1
Breach		44
Buyer		1
Buyers		1
Buyers’ Environmental Review		11
Casualty		39
Casualty Loss		39
Claims		34
Closing		25
Closing Date		25
Contracts		2
Deposit		3
disposal		14
Documents		40
Effective Time		4
Environmental Defect		13
Environmental Defect Value		14
Environmental Information		12
Environmental Laws		13
Environmental Obligations		34
Equipment		2
Examination Period		5
Exchange		5
Excluded Assets		3
Expiration Date		36
Facilities		2
Final Settlement Date		27
Final Settlement Statement		27
Governmental Authority		13
hazardous substance		14
Hydrocarbons		2
Independent Expert		15
insolvent		18
KAB		1
knowingly		44
knowledge		44
Lands		1
Laws		9
Lease		1
Leases		1
Macquarie Liens		10
Marketable Title		6
material		44
Material Adverse Effect		44
Morse		1
NORM		39
Notice of Disagreement		27
Parties		1
Party		1
Permits		2
Permitted Encumbrances		9
Plugging and Abandonment Obligations		33
Powder		1
Prima		1
Proportionate Share		44
Purchase Price		3
Purchase Price Allocations and Adjustments		27
Records		3
release		14
Representation Defect Value		17
Representation Defects		17
Representatives		35
Retained Obligations		32
Seller		1
Statement		27
Subject Interest		2
Subject Interests		2
Surface Agreements		2
Tax		44
Title Claim Date		6
Title Defect		6
Title Defect Value		7
Wells		2

PURCHASE AND SALE AGREEMENT

This Purchase and Sale Agreement (this “ Agreement ”) is made and entered into this 24 day of March, 2011, by and among SAMSON OIL AND GAS USA, INC., a Colorado corporation (“ Seller ”), PRIMA EXPLORATION, INC., a Colorado corporation (“ Prima ”), POWDER MORNING, LLC, a Colorado limited liability company (“ Powder ”), KAB ACQUISITION LLLP-IX, a Colorado limited liability limited partnership (“ KAB ”), MORSE ENERGY PARTNERS II LLC, a Colorado limited liability company (“ Morse ”), APPLE CREEK LLC, a Colorado limited liability company (“ Apple ”), and BLACKLAND PETROLEUM, LLC, a Colorado limited liability company (“ Blackland ”). Prima, Powder, KAB, Morse, Apple and Blackland are collectively referred to herein as “ Buyers ” and each a “ Buyer .” Buyers and Seller are collectively referred to herein as the “ Parties ,” and are sometimes referred to individually as a “ Party .”

RECITALS:

WHEREAS, Seller desires to sell to Buyers, and Buyers desire to purchase from Seller, the Assets, all upon the terms and conditions hereinafter set forth;

NOW, THEREFORE, in consideration of Ten Dollars ($10.00) cash in hand paid and of the mutual benefits derived and to be derived from this Agreement by each Party, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

ARTICLE 1

ASSETS

Section 1.01 Agreement to Sell and Purchase . Subject to and in accordance with the terms and conditions of this Agreement, each Buyer agrees to purchase its respective Proportionate Share of the Assets from Seller, and Seller agrees to sell to each Buyer such Buyer’s respective Proportionate Share of the Assets.

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 oil, gas and other mineral leases described on Exhibit A (collectively, the “ Leases ” and singularly a “ Lease ”) and any overriding royalty interests, royalty interests, non-working or carried interests, operating rights, and other rights and interests described in Exhibit A , together with the lands covered thereby or pooled or unitized therewith (the “ Lands ”), but excluding any specifically described depths or intervals set forth in Exhibit A , however including in the defined terms Leases and Lands the following: (i) all right, title, and interest of Seller in and to any other mineral interests of any nature (A) located in, on, or under the Lands, or (B) which are attributable to the spacing unit or designated pooled unit for any of the Wells (as hereinafter defined), in each case whether or not described in or omitted from Exhibit A , (ii) all rights with respect to any pooled, communitized, or unitized interest by virtue of any Leases and Lands or the interests described in clause (i) above being a part thereof, and (iii) all production of oil, gas, associated liquids, other hydrocarbons, and other Lease substances under the Leases (collectively “ Hydrocarbons ”) from and after the Effective Time from the Leases and the Lands, and from any such pooled, communitized, or unitized interest and allocated to any such Leases and Lands or the interests described in clause (i) above (the Leases, the Lands, and the rights described in clauses (i) and (ii) above, and the Hydrocarbons described in clause (iii) above, being collectively referred to as the “ Subject Interests ” or, singularly, a “ Subject Interest ”);

(b) all easements, rights-of-way, servitudes, surface leases, surface use agreements, water management or handling agreements, water disposal agreements, agreements pertaining to water wells, and other rights or agreements related to the use of the surface and subsurface, if any (the “ Surface Agreements ”), in each case to the extent used in connection with the operation of the Subject Interests, recorded or unrecorded;

(c) to the extent assignable or transferable, all permits, licenses, franchises, consents, approvals, and other similar rights and privileges, if any (the “ Permits ”), in each case to the extent used in connection with the operation of the Subject Interests;

(d) all equipment, machinery, fixtures, spare parts, inventory, and other personal property (including Seller’s leasehold interests therein subject to any necessary consents to assignment) used in connection with the operation of the Subject Interests or in connection with the production, treatment, compression, gathering, transportation, sale, or disposal of Hydrocarbons and any water, by-products, or waste produced therewith or otherwise attributable thereto produced from or attributable to the Subject Interests (collectively, “ Equipment ”); all wells located on the Leases or the Lands or on lands pooled, communitized, or unitized therewith that affects the Leases or the Lands and whether producing, shut in, or abandoned, and whether for production, produced water injection or disposal, monitoring, or otherwise, and including those wells described in Exhibit B (collectively, the “ Wells ”) together with all of Seller’s interests within the spacing, producing, federal exploratory, enhanced recovery, or governmentally prescribed unit attended to the Wells, wellhead equipment, telemetry and SCADA equipment, pumps, pumping units, flowlines, gathering systems, pipe, tanks, treatment facilities, injection facilities, disposal facilities, water reservoirs and pits, and compression facilities used in connection with the Subject Interests and the other matters described in this definition of Assets (the “ Facilities ”);

(e) to the extent assignable or transferable, (i) all production sales and marketing contracts, farm-out and farm-in agreements, operating agreements, service agreements, unit agreements, gas gathering and transportation agreements, and other contracts, agreements, and arrangements, relating to the Subject Interests and the other matters described in this definition of Assets, and subject to, and in accordance with, any limitations set forth in such agreements, and (ii) equipment leases and rental contracts, service agreements, supply agreements, and other contracts, agreements, and arrangements relating to the Subject Interests and the other matters described in this definition of Assets, (the agreements identified in clauses (i) and (ii) above being, collectively, the “ Contracts ”) provided, however, that the defined term Contracts does not apply to any contract pertaining to oil and gas lease WYW 123020 or the Big Ridge #32-20 well located thereon, insofar and only insofar as the contract pertains to such well or lease; and

(f) all files, records, and data relating to the items described in Sections 1.02(a) through (e) maintained by Seller including, without limitation, the following, if and to the extent that such files exist: all books, records, reports, manuals, files, title documents (including correspondence), records of production and maintenance, revenue, sales, expenses, warranties, lease files, land files, well files, division order files, abstracts, title opinions, assignments, reports, property records, contract files, operations files, copies of tax and accounting records (but excluding Federal and state income tax returns and records) and files, maps, hydrocarbon analysis, well logs, mud logs, field studies together with other files, contracts, and other records and data including all geologic and geophysical data and maps, but excluding from the foregoing those files, records, and data subject to written unaffiliated third party contractual restrictions on disclosure or transfer or covered by the attorney-client privilege or work product doctrine (the “ Records ”). To the extent that any of the Records contain interpretations of Seller, each Buyer agrees to rely on such interpretations at such Buyer’s sole risk and without any duty on the part of Seller regarding such interpretations.

Section 1.03 Excluded Assets . Notwithstanding the foregoing, the Assets shall not include, and there is excepted, reserved, and excluded from the sale, transfer, and assignment contemplated hereby the excluded properties, rights, and interests (collectively, the “ Excluded Assets ”) described on Schedule 1.03 .

ARTICLE 2

PURCHASE PRICE

Section 2.01 Purchase Price . The total consideration for the purchase, sale, and conveyance of the Assets to Buyers and each Buyer’s assumption of such Buyer’s respective Proportionate Share of the Assumed Obligations and all other liabilities provided for in this Agreement, is Prima’s payment to Seller of the sum of Six Million Three Hundred Thousand Dollars ($6,300,000.00) (the “ Purchase Price ”), as adjusted in accordance with the provisions of this Agreement.

Section 2.02 Deposit .

(a) Concurrently with the execution of this Agreement by Seller and Buyers, Prima shall deliver to Seller in immediately available funds a performance guarantee deposit in an amount equal to Six Hundred Thirty Thousand Dollars ($630,000.00) (the “ Deposit ”) in accordance with wire transfer instructions provided by Seller to Prima.

(b) Subject to the proviso set forth in Section 11.01 , if this Agreement is terminated by Seller pursuant to Section 11.01(b) and Seller does not waive the non-satisfaction of any conditions to the Closing set forth in Article 8 , Seller shall retain the Deposit as liquidated damages, which remedy shall be the sole and exclusive remedy available to Seller for any Buyer’s failure to perform such Buyer’s obligations under this Agreement. Seller and each Buyer acknowledge and agree that (i) Seller’s actual damages upon the event of such a termination are difficult to ascertain with any certainty, (ii) the Deposit is a reasonable estimate of such actual damages, and (iii) such liquidated damages do not constitute a penalty.

(c) Subject to the proviso set forth in Section 11.01 , if this Agreement is terminated (i) by Prima pursuant to Section 11.01(c) and Prima does not waive the non-satisfaction of any conditions to the Closing set forth in Article 9 or (ii) by Prima or Seller pursuant to Section 11.01(a) , Section 11.01(d) , Section 11.01(e) , Section 11.01(f) , Section 11.01(g) , Section 11.01(h) or Section 13.03(c) , then Prima shall promptly provide Seller wire transfer instructions and Seller shall return the Deposit to Prima in immediately available funds within three (3) business days after the event giving rise to such return obligation. Seller and Buyers shall thereupon have the rights and obligations set forth elsewhere herein.

(d) If all conditions precedent to the obligations of Seller set forth in Article 8 have been met, then notwithstanding any provision in this Section 2.02 to the contrary, if the Closing does not occur because Seller wrongfully fails to tender performance at the Closing or otherwise Breaches this Agreement in any respect prior to the Closing, and Buyers are ready and otherwise able to close, at Prima’s sole election, either (i) Seller shall return the Deposit to Prima within three (3) business days after its receipt of Prima’s written demand for the return of the Deposit in accordance with this Agreement, in which event Seller shall have no further obligations to Buyers, or (ii) Prima shall have the right to pursue specific performance of this Agreement, provided that Prima must file an action for specific performance within twenty-one (21) days of Seller’s Breach. If Prima elects to pursue specific performance, Prima must pursue specific performance as Buyers’ sole and exclusive remedy in lieu of all other legal and equitable remedies. If such action for specific performance is not filed within twenty-one (21) days of Seller’s Breach or if Prima is unsuccessful for any reason, Buyers shall be deemed to have waived all legal and equitable remedies and Buyers’ sole remedy for Seller’s Breach of this Agreement shall be limited to the prompt return of the Deposit.

Section 2.03 Allocated Values . The Purchase Price is allocated among the Assets on a Well basis as set forth in Exhibit C (the “ Allocated Values ”). In no event shall the aggregate of the Allocated Values for the Leases exceed the unadjusted Purchase Price. The Parties agree that the Allocated Values shall be used to compute any adjustments to the Purchase Price pursuant to the provisions of Article 4 . Any adjustment to the Purchase Price hereunder shall be reflected in the allocation set forth in Exhibit C consistent with Treasury Regulation Section 1.1060-IT(f). For tax purposes, the Parties agree to report the transactions contemplated by this Agreement in a manner consistent with the terms of this Agreement, including the allocations set forth above as of the Closing Date, and that no Party will take any position inconsistent therewith, including in any tax return, refund claim, litigation, arbitration, or otherwise.

ARTICLE 3

EFFECTIVE TIME AND OTHER MATTERS

Section 3.01 Ownership of Assets . 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 Buyers on the Closing Date, but effective for all purposes as of 7:00 a.m. Mountain Time on January 1, 2011 (the “ Effective Time ”).

Section 3.02 Section 1031 Exchange . Each Party agrees to cooperate with any other Party to accommodate such other Party in effecting a like kind exchange (an “ Exchange ”) pursuant to Section 1031 of the United States Internal Revenue Code in connection with the purchase and sale of the Assets, provided that: (a) the Closing shall not be delayed or affected by reason of the Exchange, nor shall the consummation or accomplishment of an Exchange be a condition precedent or condition subsequent to the exchanging Party’s obligations under this Agreement and the exchanging Party’s failure or inability to consummate an exchange for any reason or for no reason at all shall not be deemed to excuse or release the exchanging Party from its obligations under this Agreement, (b) the exchanging Party shall effect its Exchange through an assignment of this Agreement, or its rights under this Agreement, to a qualified intermediary (as defined in Treasury Regulation section 1.1031(k)-1(g)(4)) or an exchange accommodation titleholder (as defined in Rev. Proc. 2000-37), as applicable, but any such assignment shall not release the exchanging Party from any of its liabilities or obligations to the non-exchanging Parties under this Agreement or expand any liabilities or obligations of the non-exchanging Parties under this Agreement, (c) the non-exchanging Parties shall not be required to take an assignment of the purchase agreement for the relinquished or replacement property or be required to acquire or hold title to any real property for purposes of consummating an Exchange desired by the exchanging Party; and (d) the exchanging Party shall pay any additional costs that would not otherwise have been incurred by the non-exchanging Parties had the exchanging Party not consummated the transaction through an Exchange and the exchanging Party shall indemnify the non-exchanging Parties against any such additional costs or liabilities. No non-exchanging Party shall by this Agreement or acquiescence to an Exchange desired by an exchanging Party have its rights under this Agreement affected or diminished in any manner or be responsible for compliance with or be deemed to have warranted to the exchanging Party that its Exchange in fact complies with Section 1031 of the United States Internal Revenue Code.

Section 3.03 Prima’s Representation of Buyers . Powder, KAB, Morse, Apple and Blackland acknowledge that Prima is acting as their representative in connection with this Agreement. Prima’s representation of the other Buyers includes, but is not limited to, the geologic, engineering and economic evaluation of the Assets, the negotiation and drafting of this Agreement and documents to be delivered at the Closing, the conduct of all due diligence for Buyers (including title review and Buyers’ Environmental Review), the identification, resolution or waiver (as the case may be) of all Title Defects, Environmental Defects, and Representation Defects, and to make such elections as it sees fit, in accordance with the terms hereof. Powder, KAB, Morse, Apple and Blackland covenant and agree that they shall be bound by all actions taken by Prima on each of their behalf under or in connection with this Agreement.

ARTICLE 4

TITLE AND ENVIRONMENTAL MATTERS

Section 4.01 Examination Period . Until 5:00 p.m. Mountain Time on March 24, 2011 (the “ Examination Period ”), Seller shall permit Prima and/or Prima’s representatives to examine during normal business days and hours at a location designated by Seller, all abstracts of title, title opinions, title files, ownership maps, lease, Well, and division order files, assignments, operating, and accounting records and all Leases, Surface Agreements, Permits, Contracts, and other agreements, data, analyses, and information pertaining to the Assets insofar as the same may now be in existence and in the possession of Seller (or agent or Representative of Seller), subject to such restrictions upon disclosure as may exist under confidentiality or other agreements binding upon Seller and relating to the data. If there are any documents that Seller cannot provide Prima due to a confidentiality requirement, Seller shall describe to Prima the withheld document and cooperate with Prima to obtain access thereto from the third party if Prima so requests.

Section 4.02 Title Defects . The term “ Title Defect ” means (a) any encumbrance on, encroachment on, irregularity in, defect in, or objection to Seller’s ownership of the Assets (excluding Permitted Encumbrances) that causes Seller not to have Marketable Title to a Lease, including any Well, all as described in Exhibit C ; (b) any default by Seller under a Lease, farm-out agreement, or Contract or other agreement that would (i) have a Material Adverse Effect 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 all or a portion of Seller’s interest therein; (c) surface use restrictions in any Lease or Surface Agreement or other rights held by third parties that would be unacceptable to a reasonably prudent operator and that would prevent Buyers’ ability to conduct oil and gas operations in a manner reasonably consistent with Seller’s historic operating procedures; (d) other agreements requiring the payment of costs on a disproportionate basis with respect to the Working Interests; (e) gas sales contracts or calls on production or options to purchase production or similar obligation with respect to the Assets that are not listed on Schedule 5.08 that has a Material Adverse Effect on the Assets; and (f) any consent to assign pertaining to a Lease or Contract not obtained before the Closing Date. The term “ Marketable Title ” means such ownership by Seller in the Assets that, subject to and except for the Permitted Encumbrances, is free of restrictions that would prevent the development of Hydrocarbons from the Subject Interests consistent with current practices and:

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

(b) obligates Seller to bear not greater than the percentage set forth in Exhibit C as Seller’s Working Interest of the costs and expenses relating to the maintenance, development, and operation of such Well, without increase throughout the productive life of such Well, except as specifically set forth in such Exhibit;

(d) entitles Buyers to use, without subjecting Buyers to a Claim of trespass, all roads, power lines, pits, reservoirs, and pipelines (water and hydrocarbon) necessary for the operation of the Assets as they are currently being used by Seller.

Section 4.03 Notice of Title Defects . Prima shall provide Seller notice of all Title Defects no later than 5:00 p.m. Mountain Time on March 24, 2011 (the “ Title Claim Date ”). To be effective, such notice must (a) be in writing, (b) be received by Seller on or prior to the Title Claim Date, (c) describe the Title Defect in reasonable detail (including any alleged variance in the Net Revenue Interest or Working Interest), (d) identify the specific Asset or Assets affected by such Title Defect, (e) include the Title Defect Value, as reasonably determined by Prima in good faith, and (f) comply with the limitations and Title Defect Value qualifications set forth in Section 4.14 . Subject to Section 12.10 , any matters identified by Prima during the Examination Period that constitute Title Defects, but of which Seller has not been specifically notified by Prima in accordance with the foregoing, shall be deemed to have been waived by each of the Buyers for all purposes and shall constitute Permitted Encumbrances and Assumed Obligations. Upon receipt of notices of Title Defects, Seller and Prima shall meet and determine upon which of the Title Defects, Title Defect Values, and methods of cure Seller and Prima have reached agreement. Upon its receipt of such notice from Prima, Seller shall have the option, but not the obligation, for a period ending thirty (30) days after the Closing to cure such Title Defect. If Seller should not elect to cure a Title Defect, and no aspect of such defect is reasonably in dispute, the Purchase Price shall be adjusted for such defect by the amount of the Title Defect Value.

(a) The value attributable to each Title Defect (the “ Title Defect Value ”) that is asserted by Prima 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 is less than that stated in Exhibit C , then the Title Defect Value shall be the absolute value of the number determined by the following formula:

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

A =

Allocated Value for the affected Asset

B =

Correct Net Revenue Interest for the affected Asset

C =

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

(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 Buyers 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 Seller and Prima;

(iv) If a Title Defect is not in effect or does not adversely affect an Asset throughout the entire post Effective Time 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 or in connection with the Breach of any representation and warranty hereunder;

(vi) Notwithstanding anything herein to the contrary, in no event shall a Title Defect Value exceed the Allocated Value of the Well affected thereby;

(vii) If the Title Defect Value of an Asset is equal to the Allocated Value of such Asset, the affected Asset shall remain in the purchase and sale contemplated by this Agreement, but the Purchase Price shall be adjusted accordingly;

(viii) Notwithstanding the provisions of this Section 4.03 to the contrary, the Title Defect Value of any Title Defect comprising a required consent not obtained (other than consents customarily obtained after the Closing) shall be determined pursuant to Section 4.07 ; and

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

(b) The term Title Defect shall not include those matters deemed not to impair marketability in accordance with any applicable title standards for the State of Wyoming.

Section 4.04 Remedies for Title Defects .

(a) For any Title Defect noticed pursuant to Section 4.03 that has not been cured at or prior to the Closing, the Purchase Price shall, subject to the provisions of Section 4.14 , be decreased at the Closing by either (i) the amount Seller and Prima, acting reasonably and in good faith, agree in lieu of a cure of the asserted Title Defect, or (ii) with respect to any Title Defect for which Seller and Prima have not yet agreed as to the validity of the Title Defect, the Title Defect Value, or the manner of cure, then subject to Section 4.14(c) below, by the amount of the Title Defect Value asserted by Prima for such uncured or unadjusted Title Defect.

(b) Notwithstanding anything to the contrary in this Section 4.04 , if any Title Defect is in the nature of a consent to assignment that is not obtained or other restriction on assignment, the provisions of Section 4.07 shall apply.

(c) If at the expiration of thirty (30) days after the Closing, Seller and Prima have not agreed upon the validity of any asserted Title Defect, the appropriate cure of the same, or the Title Defect Value attributable thereto, either Seller or Prima shall have the right to elect to have any such dispute determined by an Independent Expert pursuant to Section 4.13 .

(d) Once a Title Defect is cured within the time specified in Section 4.03 , by Seller at its sole cost and expense to Prima’s reasonable satisfaction, or the existence or value of the Title Defect is determined with finality either by agreement between Seller and Prima or in accordance with Section 4.13 , Prima shall promptly pay to Seller (i) in the case of a Title Defect which is cured, the amount the Purchase Price was decreased at the Closing as a result of this previously uncured Title Defect or (ii) in the case of an Asset affected by an unresolved Title Defect and for which the validity of the Title Defect or the Title Defect Value is determined with finality whether by agreement or in accordance with Section 4.13, the difference, if any, between the amount the Purchase Price was decreased at the Closing as a consequence of such asserted and unresolved Title Defect and the amount determined with finality.

Section 4.05 Special Warranty of Title . The documents to be executed and delivered by Seller to Buyers, transferring title to the Assets as required hereby, including the Assignment and Bill of Sale the form of which is attached hereto as Exhibit D (the “ Assignment ”), shall provide for a special warranty of title, by, through, or under Seller, subject to the Permitted Encumbrances and the terms of this Agreement. The term “ Permitted Encumbrances ” shall mean any of the following matters to the extent the same are valid and subsisting and affect the Assets as of the Effective Time:

(a) the terms, conditions, restrictions, exceptions, reservations, limitations, and other matters contained in (including any liens or security interests created by law or reserved in oil and gas leases for royalty, bonus, or rental, or created to secure compliance with the terms of) Contracts, Surface Agreements, Leases, and any other agreements, instruments, documents, and other matters described or referred to in any Exhibit or Schedule hereto; provided, that, such matters do not operate to (i) reduce the Net Revenue Interest of Seller in any Well, as reflected in Exhibit C , or (ii) increase the proportionate share of costs and expenses of leasehold operations attributable to or to be borne by the Working Interest of Seller with respect to any Well as reflected in Exhibit C , unless there is a proportionate increase in Seller’s applicable Net Revenue Interest;

(b) any obligations or duties affecting the Assets to any Governmental Authority with respect to any franchise, grant, license, or permit, and all applicable federal, state, and local laws, rules, regulations, guidances, ordinances, decrees, and orders of any Governmental Authority (“ Laws ”);

(c) all 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, that do not (i) reduce the Net Revenue Interest of Seller in any Well as reflected in Exhibit C , or (ii) increase the proportionate share of costs and expenses of leasehold operations attributable to or to be borne by the Working Interest of Seller with respect to any Well as reflected in Exhibit C , unless there is a proportionate increase in Seller’s applicable Net Revenue Interest;

(d) preferential rights to purchase or similar agreements (i) with respect to which (A) waivers or consents are obtained from the appropriate parties for the transaction contemplated hereby, or (B) required notices have been given for the transaction contemplated hereby to the holders of such rights and the appropriate period for asserting such rights has expired without an exercise of such rights, or (ii) not exercised prior to the Closing, subject to Section 4.06 ;

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

(f) all rights to consent by, required notices to, filings with, or other actions by, Governmental Authorities in connection with the sale, transfer, or conveyance of the Assets that are customarily obtained after such sale or conveyance;

(g) rights reserved to or vested in any Governmental Authority to control or regulate any of the Wells or units included in the Assets and the applicable laws, rules, and regulations of such Governmental Authorities;

(h) conventional rights of reassignment contained in any Lease, or assignments thereof, providing for reassignment upon a decision to surrender or abandon any Lease;

(i) statutory liens for Taxes or assessments not yet due and delinquent;

(j) easements, rights-of-way, servitudes, permits, surface leases, and other rights with respect to surface operations, on, over or in respect of any of the Assets of which Prima has knowledge;

(k) materialmen’s, mechanics’, operators’ or other similar liens arising in the ordinary course of business (i) if such liens and charges have not been filed pursuant to law and the time for filing such liens and charges has expired, or (ii) if filed, such liens and charges have not yet become due and payable or payment is being withheld as provided by law;

(l) such Title Defects as Prima has waived; and

(m) all deeds of trust and other security interests burdening the Assets granted by Seller in connection with its credit facility with Macquarie Bank Limited (the “ Macquarie Liens ”), it being understood and agreed that the release of the Macquarie Liens is a condition to the Closing as provided in Section 9.04 .

Section 4.06 Preferential Rights to Purchase .

(a) Seller shall use diligent efforts, but without any obligation to incur anything but reasonable costs and expenses in connection therewith, to comply with all preferential rights to purchase provisions relative to any Asset prior to the Closing, all of which are identified on Schedule 4.06 .

(b) Prior to the Closing, Seller shall promptly notify Prima if any of such preferential purchase rights are exercised or if the requisite period has elapsed without such rights having been exercised.

(c) If a third party who has been offered an interest in any Asset pursuant to a preferential right to purchase elects prior to the Closing to purchase all or part of such Assets, and the closing of such transaction does occur on or before the Closing Date, then the interest or part thereof so affected will be excluded from the Assets and the Purchase Price shall be reduced by the Allocated Value of such Assets without the requirement for Prima to give notice. If any such third party has elected to purchase all or a part of an interest in any Asset subject to a preferential right to purchase but has failed to close the transaction by the Closing Date, or if the election period has not run and no election has been made, then the affected portion of the Assets shall be excluded from the Assets and the Purchase Price shall be reduced by the Allocated Value of such affected Assets. If the election period passes without the exercise of such preferential right to purchase or if any election previously exercised is rescinded in writing by the party previously electing to purchase this affected Asset, all such Assets will be conveyed to Buyers and Prima shall pay the portion of the Purchase Price therefor.

Section 4.07 Consents to Assignment . The Assets subject to a consent to assign are listed on Schedule 4.07 . If any Asset is subject to a Title Defect as a result of a consent to assignment not having been obtained or, of the existence of other restrictions on assignment or conveyance, the following provisions shall apply:

(a) The Asset affected thereby shall be retained by Seller and the Purchase Price shall be reduced by the Allocated Value of such Asset without the requirement for Prima to give notice.

(b) Seller, with Prima’s assistance, shall use diligent efforts to obtain such consent as promptly as possible after the Closing. If such consent is obtained by the Final Settlement Date, Seller shall convey the affected Asset to Buyers effective as of the Effective Time, and Prima shall pay Seller the Allocated Value, as adjusted in accordance with the terms of this Agreement.

Section 4.08 [Omitted Intentionally].

Section 4.09 Environmental Review . Prima may conduct an environmental assessment of the Assets prior to the expiration of the Title Claim Date, subject to the following:

(a) Prima shall have the right to conduct on-site inspections, including but not limited to, Phase I (as that term is defined by the American Society for Testing and Materials) environmental assessments of the Assets, including, but not limited to, sampling and analysis of soil, air, surface water, groundwater and waste materials, prior to the expiration of the Examination Period (“ Buyers’ Environmental Review ”) and Seller shall provide to Prima a copy of any environmental review Seller has in its possession subject to the same terms of confidentiality subsequently set forth herein;

(i) Each Buyer shall bear its respective Proportionate Share of all of the cost and expense of Buyers’ Environmental Review;

(ii) All inspections must be coordinated through a designated representative of Seller who may accompany Prima during the course of Prima’s inspection of the Assets;

(iii) Prima shall give Seller notice not more than seven (7) days and not less than forty-eight (48) hours before any visits by Prima and/or Prima’s consultant to the Assets, and Prima shall seek and obtain Seller’s prior consent (which shall not be unreasonably withheld) before either it or its consultant enters the Assets;

(iv) Prima shall provide Seller a copy of any Phase I reports affecting the Assets promptly after Prima’s receipt of the same;

(v) Prima and/or Prima’s consultant shall perform all such work in a safe and workmanlike manner, shall not unreasonably interfere with Seller’s operations, and shall comply with all Laws of applicable Governmental Authorities;

(vi) Seller shall use commercially reasonable efforts to obtain any third party consents that are required in order to perform any work comprising Buyers’ Environmental Review; and

(vii) Each Buyer, with respect to each Buyer’s Proportionate Share, hereby agrees to release and defend, indemnify, and hold harmless Seller and Seller’s Representatives from and against all Claims made by (or attributable to the acts or omissions of) Prima or Prima’s Representatives (INCLUDING THOSE RESULTING FROM THE SOLE, JOINT, OR CONCURRENT NEGLIGENCE (BUT NOT GROSS NEGLIGENCE OR WILLFUL MISCONDUCT), STRICT LIABILITY OR OTHER LEGAL FAULT OF SELLER OR ANY OF SELLER’S REPRESENTATIVES) arising out of or relating to Buyers’ Environmental Review. The release and indemnity provisions of this Section 4.09 shall survive termination or the Closing of this Agreement notwithstanding anything to the contrary provided for in this Agreement.

(b) Unless otherwise required by applicable Laws, each Buyer shall treat any matters revealed by Buyers’ Environmental Review and any environmental review provided by Seller to Prima, including any analyses, compilations, studies, documents, reports, or data prepared or generated from such review, but excluding any public information (the “ Environmental Information ”), as confidential, and, except as provided below, Buyers shall not disclose any Environmental Information to any Governmental Authority, or, prior to the Closing to any other third party without the prior written consent of Seller. Buyers may use the Environmental Information prior to the Closing only in connection with the transactions contemplated by this Agreement. The Environmental Information shall be disclosed by Buyers to only those persons who need to know the Environmental Information for purposes of evaluating the transaction contemplated by this Agreement, and who agree to be bound by the terms of this Section 4.09 . If any Buyer or any third party to whom such Buyer has provided any Environmental Information is requested, compelled, or required to disclose any of the Environmental Information prior to the Closing, such Buyer shall provide Seller with prompt notice sufficiently prior to any such disclosure so as to allow Seller to file for any protective order, or seek any other remedy, as it deems appropriate under the circumstances. If this Agreement is terminated prior to the Closing, upon Seller’s request, Prima shall deliver the Environmental Information, and all copies thereof and works based thereon, to Seller, which Environmental Information shall become the sole property of Seller. Upon request, Prima shall provide copies of the Environmental Information to Seller without charge. The terms and provisions of this Section 4.09(b) shall survive any termination of this Agreement, notwithstanding anything to the contrary.

Section 4.10 Definitions Used in Article 4 and in this Agreement .

(a) Environmental Defects . The term “ Environmental Defect ” shall mean, with respect to any given Asset (including, without limitation, air, land, soil, surface and subsurface strata, surface water, groundwater, or sediments), a violation of or a condition that can reasonably be expected to give rise to a violation of any Environmental Law in effect before the Closing Date in the jurisdiction in which such Asset is located.

(b) Governmental Authority . The term “ Governmental Authority ” shall mean the United States and any state, county, city, and political subdivisions that exercises jurisdiction over the Assets, and any agency, court, department, board, bureau, commission, or other division or instrumentality thereof.

(c) Environmental Laws . The term “ Environmental Laws ” shall mean any and all laws, statutes, ordinances, rules, regulations, or orders of any Governmental Authority pertaining to health and natural resources (but excluding laws, orders, rules, and regulations that pertain to the prevention of waste or the protection of correlative rights) and the protection of wildlife or the environment including, without limitation, the Clean Air Act, as amended, the Clean Water Act, as amended, the Comprehensive Environmental, Response, Compensation, and Liability Act of 1980, as amended, the Federal Water Pollution Control Act, as amended, the Resource Conservation and Recovery Act of 1976, as amended, the Safe Drinking Water Act, as amended, the Toxic Substances Control Act, as amended, the Hazardous & Solid Waste Amendments Act of 1984, as amended, the Superfund Amendments and Reauthorization Act of 1986, as amended, the Hazardous Materials Transportation Act, as amended, the Oil Pollution Act of 1990, any state laws implementing the foregoing federal laws, or equivalent or analogous state or local laws, statutes or ordinances, any regulation promulgated thereunder, including, but not limited to, those pertaining to the handling of oil and gas exploration and production wastes or the use, maintenance, and closure of pits and impoundments, and all other environmental conservation or protection laws in effect as of the Closing Date that are applicable to the Assets. For purposes of this Agreement, the terms “ hazardous substance ,” “ release ,” and “ disposal ” have the meanings specified in the applicable Environmental Laws as in effect as of the Closing Date.

(d) Environmental Defect Value . For purposes of this Agreement, the term “ Environmental Defect Value ” shall mean, with respect to any Environmental Defect, the estimated costs and expenses net to Seller’s interest in the affected portion of the Assets to correct and/or remediate such Environmental Defect consistent with applicable Environmental Laws.

Section 4.11 Notice of Environmental Defects . Prima shall provide Seller notice of all Environmental Defects no later than the Title Claim Date. To be effective, such notice must (a) be in writing, (b) be received by Seller prior to the expiration of the Examination Period, (c) describe the Environmental Defect in reasonable detail, including the written conclusion of Prima that an Environmental Defect exists, which conclusion shall be reasonably substantiated by the factual data gathered in Buyers’ Environmental Review, (d) identify the specific Assets affected by such Environmental Defect, (e) set forth the procedures recommended to correct the Environmental Defect, (f) set forth Prima’s reasonable good faith estimate of the Environmental Defect Value, including the basis for such estimate, and (g) comply with the Environmental Defect Value provisions of Section 4.14 . Any matters that may constitute Environmental Defects, but of which Seller has not been specifically notified by Prima 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 Buyers for all purposes and constitute an Assumed Obligation. Upon receipt of notices of Environmental Defects, Seller and Prima shall meet and determine upon which of the Environmental Defects, Environmental Defect Values, and methods of correction Seller and Prima have reached agreement. Upon the receipt of such effective notice from Prima, Seller shall have the option, but not the obligation, to attempt to correct to Prima’s reasonable satisfaction such Environmental Defect during a period expiring ninety (90) days after the Closing.

Section 4.12 Remedies for Environmental Defects .

(a) If, as of the Closing Date, the Assets are affected by an uncured or otherwise unresolved Environmental Defect noticed pursuant to the provisions of Section 4.11 , the affected portion of the Assets shall not be sold, transferred, or conveyed to Buyers at the Closing, and the Purchase Price shall, subject to the terms of Section 4.14 , be decreased by the Allocated Value of the portion of the Assets so affected. Thereafter, Seller and Prima shall act reasonably and in good faith either (i) to agree (y) as to the manner of cure for such Environmental Defect or (z) the value of such Environmental Defect and adjust the Final Settlement Statement in the amount thereof net of any Purchase Price adjustment made at the Closing, in which event the affected portion of the Assets shall be conveyed to Buyers; provided that if option (y) is agreed to, no assignment of the affected portion of the Assets shall be made as between Seller and Buyers until such agreed cure is accomplished to Prima’s reasonable satisfaction whereupon the Allocated Value previously deducted from the Purchase Price shall be paid to Seller, or (ii) with respect to any Environmental Defect as to which Seller and Prima are unable to agree within thirty (30) days of the Closing as to the validity of the Environmental Defect, the Environmental Defect Value, or the manner of correction, submit such matter to be determined by an Independent Expert pursuant to Section 4.13 .

(b) With respect to any Asset which is not sold, transferred, or conveyed to Buyers at the Closing pursuant to the terms of Section 4.12(a) , after the Closing and at such time as any Environmental Defect Value or the manner of correction for an Environmental Defect is determined and, in either event, the amount thereof is determined to be less than the Allocated Value for the affected portion of the Assets, Seller shall have the right (i) in the case of an Environmental Defect Value determination, to have the Purchase Price reduced by only the Environmental Defect Value as so determined or (ii) in the case of the cure determination, to elect to cure the Environmental Defect to Prima’s reasonable satisfaction. The consequence of (i) shall be that Prima will pay to Seller an amount equal to the Allocated Value for the affected Assets minus the Environmental Defect Value and the affected portion of the Assets previously retained by Seller shall be conveyed to Buyers. The consequence of (ii) shall be that upon achieving Prima’s written acknowledgement that the Environmental Defect has been cured to Prima’s reasonable satisfaction, the Allocated Value for such previously retained Asset shall be paid to Seller and the affected portion of the Assets shall be conveyed to Buyers. If no Environmental Defect is determined to exist, Prima shall pay the Allocated Value attributable to the affected portion of the Assets to Seller, and Seller shall convey the previously retained portion of the Assets to Buyers. If the Environmental Defect Value or the cost to cure an Environmental Defect is determined to be greater than the Allocated Value of the affected portion of the Assets, Seller shall retain the affected portion of the Assets, and the Purchase Price shall be reduced by the Allocated Value attributable to such portion of the Assets.

Section 4.13 Independent Experts .

(a) Any disputes regarding Title Defects, Representation Defects, Environmental Defects, Title Defect Value, Representation Defect Value, Environmental Defect Value, appropriate cure of any Title Defect or Representation Defect or correction of any Environmental Defects, and the calculation of the Statement or the Final Settlement Statement, or revisions thereto, may, subject to the provisions of Section 4.04 , Section 4.12 , Section 4.14 , and Section 4.15 , be submitted by a Seller or Prima, with written notice to the other Party, to an independent expert (the “ Independent Expert ”), who shall serve as the sole and exclusive arbitrator of any such dispute. The Independent Expert shall be selected by the Seller and Prima (acting reasonably and in good faith) within fifteen (15) days following the effective date of said notice. The Independent Expert shall be a person who is independent, impartial, and knowledgeable in the subject matter and substantive laws involved. For example, but not by way of limitation, in the case of a dispute concerning an alleged Environmental Defect, Environmental Defect Value, or cure of the same, the Independent Expert shall have expertise in both the applicable Environmental Laws and environmental science relating to the oil and gas industry.

(b) If Seller and Prima fail to select an Independent Expert within the 15-day period referred to in Section 4.13(a) above, within three (3) days thereafter, Seller and Prima shall each choose an Independent Expert meeting the qualifications set forth above, and such two (2) experts shall promptly choose a third Independent Expert (meeting the qualifications provided for herein) who alone shall resolve the disputes between the Parties. Each Party shall bear its own costs and expenses incurred in connection with any such proceeding, and, with respect to Buyers, each Buyer will bear its respective Proportionate Share of one-half (1/2) of the costs and expenses of the Independent Expert and, with respect to Seller, Seller will bear one-half (1/2) of the costs and expenses of the Independent Expert.

(c) 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 for non-administered arbitration set forth in the commercial arbitration rules of the American Arbitration Association. The Independent Expert shall be instructed by Seller and Prima to resolve such dispute as soon as reasonably practicable in light of the circumstances using the terms and provisions of this Agreement with respect to title and environmental matters. The decision and award of the Independent Expert shall be binding upon the Parties and final and nonappealable to the maximum extent permitted by Laws or Environmental Laws, as applicable, and judgment thereon may be entered in a court of competent jurisdiction and enforced by any Party as a final judgment of such court.

(d) All proceedings under this Section 4.13 shall be conducted at a mutually agreed location in Denver, Colorado.

Section 4.14 Limitation of Remedies For Title Defects, Representation Defects and Environmental Defects . Notwithstanding anything to the contrary contained in this Agreement,

(a) if the Title Defect Value for a given Title Defect, the Representation Defect Value for a given Representation Defect or the Environmental Defect Value for a given Environmental Defect, in each case as determined pursuant to this Article 4 , does not exceed Twenty-Five Thousand Dollars ($25,000.00), such Title Defect, Representation Defect, or Environmental Defect shall not qualify for either a Purchase Price adjustment, cure, or correction of such defect;

(b) if the aggregate value of all Title Defects, all Environmental Defects and all Representation Defects does not exceed One Hundred Eighty-Nine Thousand Dollars ($189,000.00) (prior to any adjustments thereto), then no adjustment of the Purchase Price shall be made therefor; and

(c) in the event the aggregate value of all Title Defects, all Environmental Defects and all Representation Defects exceeds One Hundred Eighty-Nine Thousand Dollars ($189,000.00) (prior to any adjustments thereto), then the Purchase Price shall be adjusted by the aggregate value of all Title Defects, all Environmental Defects and all Representation Defects, it being understood that this amount is a threshold and not a deductible.

All Title Defects, Representation Defects, and Environmental Defects asserted by Prima pursuant to this Article 4 after being resolved in accordance with this Article 4 shall thereafter constitute Permitted Encumbrances and Assumed Obligations, whether or not an adjustment to the Purchase Price is made with respect thereto in accordance with this Article 4 .

Section 4.15 Breach of Certain Representations and Warranties . Subject to the limitations of Section 4.14 , Breaches of Seller’s representations and warranties contained in Sections 5.07 through 5.21 , discovered prior to the Title Claim Date shall be treated in accordance with this Section 4.15 for purposes of making adjustments to the Purchase Price, and such Breaches shall be referred to herein as “ Representation Defects .” Prior to the Title Claim Date, Prima shall provide Seller notice of each Representation Defect. To be effective, such notice must (a) be in writing, (b) be received on or prior to the Title Claim Date, (c) describe the Breach in reasonable detail, and (d) the value of the Breach, as reasonably determined by Prima in good faith (the “ Representation Defect Value ”). Upon receipt of notice of any Representation Defect, Seller and Prima shall meet and determine upon which Representation Defect and the Representation Defect Value and methods of cure Seller and Prima have reached agreement. If Seller should not elect to cure a Representation Defect, and no aspect of such is reasonably in dispute, the Purchase Price shall be adjusted for such by the Representation Defect Value. If Seller and Prima are unable to reach an agreement as to the existence of a Representation Defect, any Representation Defect Value, and/or method of cure, the dispute shall be resolved in accordance with Section 4.13 . No matter that constitutes a Title Defect may also be asserted as a Representation Defect.

Section 4.16 DISCLAIMER AND WAIVER . EXCEPT AS SET FORTH IN THIS AGREEMENT, SELLER DOES NOT MAKE ANY, AND EXPRESSLY DISCLAIMS ALL REPRESENTATIONS OR WARRANTIES, AND EACH BUYER EXPRESSLY DISCLAIMS ANY SUCH REPRESENTATION OR WARRANTIES, AS TO THE ACCURACY OR COMPLETENESS OF ANY FILE AND/OR OTHER INFORMATION, INCLUDING, PRINTOUTS, EXTRAPOLATIONS, PROJECTIONS, DOCUMENTATION, MAPS, GRAPHS, CHARTS, OR TABLES WHICH REFLECT, DEPICT, PRESENT, PORTRAY, OR WHICH ARE BASED UPON OR DERIVED FROM ANY SUCH INFORMATION AND/OR FILES, INCLUDING MATTERS OF GEOLOGICAL, GEOPHYSICAL, ENGINEERING, OR OTHER SCIENTIFIC INFORMATION THAT MAY BE PROVIDED TO SUCH BUYER BY SELLER OR BY OTHERS ON BEHALF OF SELLER. EACH BUYER EXPRESSLY AGREES THAT ANY CONCLUSIONS DRAWN FROM REVIEW OF SUCH INFORMATION AND/OR FILES SHALL BE THE RESULT OF ITS OWN INDEPENDENT REVIEW AND JUDGMENT.

ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF SELLER

Seller represents and warrants to each Buyer that:

Section 5.01 Existence . Seller is a corporation duly organized, validly existing, and in good standing under the laws of the State of Colorado. Seller has full legal power, right, and is authorized to do business, and in good standing, in the State of Wyoming.

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, or be in conflict with:

(a) any provision of Seller’s articles of incorporation, bylaws, and other governing documents;

(b) any material agreement or instrument to which Seller is a party or by which Seller or the Assets are bound, except for consents to assignment customarily obtained after the Closing; 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 corporate action on the part of Seller as required under its formation documents. This Agreement constitutes the legal, valid, and binding obligation of Seller enforceable in accordance with its terms, except as the same may be limited by bankruptcy, insolvency, or other laws relating to or affecting the rights of creditors generally, and by general equitable principles.

Section 5.04 Brokers . 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 any 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. Seller is not “ insolvent ” as such term is defined under the Federal Bankruptcy Code or any fraudulent transfer or fraudulent conveyance statute applicable to the transactions contemplated by this Agreement.

Section 5.06 Suits and Claims . Except as set forth in Schedule 5.06 , there is no litigation or Claims that have been filed by any person or entity or by any administrative agency or Governmental Authority in any legal, administrative, or arbitration proceeding or, to Seller’s knowledge, threatened against Seller or the Assets that would impede Seller’s ability to consummate the transactions contemplated herein or would have a material and adverse effect as to the Assets.

Section 5.07 AFEs . Except as set forth on Schedule 5.07 , there are no outstanding authorizations for expenditures or other capital commitments which are binding on the Assets and which individually would require the owner of the Assets after the Effective Time to expend monies in excess of Twenty-Five Thousand Dollars ($25,000.00).

Section 5.08 Contracts . To Seller’s knowledge, Schedule 5.08 is a complete list of all material Contracts, including, without limitation, production contracts, and there are no other like agreements to which Buyers will become subject to with respect to the Assets upon the Closing. Seller is not in Breach of any of the Contracts and to Seller’s knowledge, the Contracts are in full force and effect in accordance with their terms, and, to the knowledge of Seller, no other party to any of the Contracts is in Breach thereof. Notwithstanding the foregoing, as to those Contracts identified on Schedule 5.08 as “(No copy available),” Seller makes no representation and warranty whatsoever except (a) there are references to such Contracts in other instruments or documents and (b) it has been unable to locate such Contracts despite its diligent efforts to do so.

Section 5.09 Records . The Records furnished to or made available for Prima’s inspection by Seller have been kept in the ordinary course of Seller’s business during the period of Seller’s ownership of the Assets, and Seller has not intentionally omitted any material documents from the Records. All environmental investigations, studies, or audits with respect to any of the Leases, owned or commissioned by Seller, or in the possession of Seller or an affiliate of Seller, are available for Prima’s inspection.

Section 5.10 Royalties . To Seller’s knowledge, all royalties required to be paid with respect to the Subject Interests during the period of Seller’s ownership of the Assets have been timely and fully paid by the operators.

Section 5.11 Taxes . To Seller’s knowledge, during the period of Seller’s ownership of the Assets all Tax returns required to be filed with respect to the Subject Interests have been timely filed by the operators of the Assets with the appropriate Governmental Authorities in all jurisdictions in which such Tax returns are required to be filed, and all Taxes due with respect to such Tax returns have been timely and fully paid during the period of Seller’s ownership of the Assets by the operators of the Assets.

Section 5.12 Gas Imbalances . To Seller’s knowledge, there are no outstanding gas imbalances with respect to the Subject Interests, except those disclosed on Schedule 5.12 .

Section 5.13 Compliance with Laws . To Seller’s knowledge, with respect to Seller’s ownership of the Assets, Seller is in compliance in all material respects with all Laws and Environmental Laws that are applicable to the Assets.

Section 5.14 Personal Property and Equipment . Seller is the owner of the Equipment free and clear of all liens and encumbrances other than those to be released at the Closing. Other than in connection with normal and customary prudent operations, Seller has not removed any personal property, equipment, or fixtures from the Wells, unless it has been replaced with personal property, equipment, or fixtures of similar grade and utility. Unless removed, repaired or replaced (a) with personal property, equipment, and fixtures of similar grade and utility or (b) in connection with normal and customary prudent operations, the personal property, equipment, and fixtures currently attendant to the Wells was the equipment historically used by Seller on the Wells to produce the Hydrocarbons prior to the execution of this Agreement.

Section 5.15 No Alienation . Within one hundred twenty (120) days of the date hereof, Seller has not voluntarily or involuntarily sold, assigned, conveyed, or transferred or contracted to sell, assign, convey, or transfer any right or title to, or interest in, the Assets other than (i) production sold in the ordinary course of Seller’s business and (ii) Equipment which was worthless, obsolete, or replaced by Equipment of equal suitability and value.

Section 5.16 Property Expenses . In the ordinary course of business, Seller has paid all property expenses attributable to the period of time prior to the Effective Time as such property expenses become due, and such property expenses are being paid in a timely manner before the same become delinquent, except such property expenses as are disputed in good faith by Seller in a timely manner and for which Seller shall retain responsibility.

Section 5.17 Tax Partnerships . The Assets are not subject to any tax partnership agreement requiring a partnership income tax return to be filed under Subchapter K of Chapter 1 of Subtitle A of the United States Internal Revenue Code.

Section 5.18 Preferential Rights to Purchase and Consents . Schedule 4.06 accurately lists all preferential rights to purchase affecting the Assets, and Schedule 4.07 accurately lists all Assets subject to a consent to assignment.

Section 5.19 Liens and Encumbrance . Other than Permitted Encumbrances, at the Closing the Assets shall be conveyed to Buyers free and clear of liens, mortgages and other encumbrances.

Section 5.20 Payout Status . Set forth on Exhibit B is a complete list of Wells in which Seller’s interest will change upon payout pursuant to a Contract, informal understanding or force pooling order. Seller has furnished Prima with its most current payout calculations relating to such Wells.

Section 5.21 Notice of Changes . Promptly upon its discovery or identification of same, but in any event prior to the Closing, Seller shall provide to Prima written notice of any matter it so identifies that has a material effect on any of Seller’s or any Buyer’s representations or warranties under this Agreement, or rendering any such representation or warranty untrue or inaccurate.

Section 5.22 Representations and Warranties Exclusive . All representations and warranties contained in this Agreement and the documents delivered in connection herewith are exclusive, and are given in lieu of all other representations and warranties, express, implied, or statutory.

ARTICLE 6

REPRESENTATIONS AND WARRANTIES OF EACH BUYER

Each Buyer makes the representations and warranties set forth in this Article 6 . The representations and warranties of Buyers are made severally and not jointly or collectively. No Buyer shall have any liability for any other Buyer’s breach of any such representations or warranties.

Section 6.01 Existence . Buyer (i) is duly organized, validly existing, and in good standing under the laws of the State of Colorado and (ii) has full legal power, right, and authority to carry on its business in the State of Wyoming.

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 does not and will not violate, or be in conflict with:

(a) any provision of Buyer’s formation documents or other governing documents;

(b) any material agreement or instrument to which Buyer is a party or by which Buyer or its assets are 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 organizational 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 the same may be limited by bankruptcy, insolvency or other laws relating to or affecting the rights of creditors generally, and by general equitable principles.

Section 6.04 Brokers . 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 and Claims . There is no Claim 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 is reasonably likely to have a material effect on Buyer’s ability to consummate the transactions contemplated herein.

Section 6.07 Independent Evaluation . Buyer acknowledges that it is an experienced and knowledgeable investor in the oil and gas business, and the business of purchasing, owning, developing, and operating oil and gas properties such as the Assets. In making the decision to enter into this Agreement and to consummate the transactions contemplated hereby, Buyer has relied solely upon the representations, warranties, covenants, and agreements of Seller and each Buyer set forth in this Agreement and Prima’s independent due diligence and investigation of the Assets, and has been advised by and has relied solely on its own expertise and its own legal, tax, operations, environmental, reservoir engineering, and other professional counsel and advisors concerning this transaction, the Assets and the value thereof. In addition, Buyer acknowledges and agrees that Buyer will be or has been advised by and relies solely on its own expertise, and its legal counsel, Prima (in the case of each Buyer other than Prima), and any advisors or experts concerning matters relating to Title Defects, Environmental Defects and Representation Defects.

Section 6.08 Qualification . As of the Closing, Buyer shall be, and thereafter shall continue to be, qualified with all applicable Governmental Authorities to own the Assets, including meeting all bonding requirements, if applicable.

Section 6.09 Securities Laws . Buyer is acquiring the Assets for its own account or that of its affiliates and not with a view to, or for offer of resale in connection with, a distribution thereof, within the meaning of the Securities Act of 1933, 15 U.S.C. § 77a et seq ., and any other rules, regulations, and laws pertaining to the distribution of securities. Buyer has not sought or solicited, nor is Buyer participating with, investors, partners, or other third parties other than Buyers or Buyer’s lenders in order to fund the Purchase Price and to close this transaction, and all funds to be used by Buyer in connection with this transaction are Buyer’s own funds or those borrowed from its lenders.

Section 6.10 No Investment Company . Buyer is not (a) an investment company or a company controlled by an investment company within the meaning of the Investment Company Act of 1940, as amended, or (b) subject in any respect to the provisions of that Act.

Section 6.11 Funds . Buyer has arranged to have available by the Closing Date immediately available funds to enable Buyer to pay in full Buyer’s respective Proportionate Share of the Purchase Price.

Section 6.12 Notice of Changes . Promptly upon its discovery or identification of same, but in any event prior to the Closing, Buyer shall provide to Seller and Buyers written notice of any matter it so identifies that has a material effect on any of Seller’s or any Buyer’s representations or warranties under this Agreement, or rendering any such warranty or representation untrue or inaccurate.

Section 6.13 Representation by Prima . Prima has acted as the representative of Powder, KAB, Morse, Apple and Blackland in the negotiating and drafting of this Agreement and with respect to those matters generally described in Section 3.03 .

Section 6.14 Representations and Warranties Exclusive . All representations and warranties contained in this Agreement and the documents delivered in connection herewith, are exclusive, and are given in lieu of all other representations and warranties, express, implied, or statutory.

ARTICLE 7

OPERATION OF THE ASSETS

Section 7.01 Operation of the Assets .

(a) From and after the date of execution of this Agreement, and subject to the provisions of applicable operating and other agreements, Seller shall (i) during the period prior to the Closing, operate and administer the Assets in a manner consistent with its past practices, (ii) make payment of all costs and expenses attributable to the ownership or operation of the Assets and relating to the period prior to the transfer of ownership to Buyers, and shall carry on its business with respect to the Assets in substantially the same manner as before execution of this Agreement, (iii) not, without Prima’s express written consent, commit to participate in the drilling of any well, or make or enter into any other commitments reasonably anticipated to require future capital expenditures by Buyers in excess of Twenty-Five Thousand Dollars ($25,000.00) net to Seller’s interest for each proposed operation, or terminate, materially amend, or extend any Contracts affecting the Assets, or enter into or commit to enter into any material new contract or agreement relating to the Assets, or settle, compromise, or waive any material right relating to the Assets, (iv) maintain insurance coverage on the Assets in the amounts and of the types presently in force, (v) maintain in full force and effect the Leases, the Surface Agreements, and other Assets, and properly pay all costs and expenses and perform all obligations of the owner of the Assets promptly when due, (vi) maintain all Permits, (vii) not transfer, sell, hypothecate, encumber, or otherwise dispose of any Assets except for sales and dispositions of Hydrocarbons made in the ordinary course of business consistent with Seller’s past practices, (viii) not grant or create any preferential right to purchase, right of first opportunity, or other transfer restriction or requirement with respect to the Assets except in connection with the renewal or extension of Assets after the Effective Time if granting or creating such right or requirement is a condition of such renewal or extension and then with prompt written notice of such action to Prima, (ix) not elect to become a non-consenting party in any operation proposed by any other Person with respect to the Assets unless requested to do so in writing by Prima, (x) maintain the Equipment in at least as good a condition as it is on the date hereof, ordinary wear and tear excepted, (xi) not make any change in any method of accounting or accounting practice or policy with respect to the Assets, and (xii) not agree to extend any statute of limitations with respect to Taxes or any extension of time with respect to a Tax assessment or deficiency for any Taxes, or make any change in any Tax elections with respect to the Assets.

(b) Each Buyer acknowledges that Seller owns undivided interests in some or all of the Assets, and each Buyer agrees that the acts or omissions of the other working interest owners shall not constitute a violation of the provisions of this Article 7 , 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 7 . Seller will, without penalty for the failure to do so except to the extent that the failure to give Prima such notice has a Material Adverse Effect, notify Prima of the occurrence of such event to the extent of Seller’s knowledge.

(c) Promptly upon its discovery or identification of same, but in any event prior to the Closing, Seller shall provide Prima written notice of any matter Seller identifies that has a Material Adverse Effect on or that constitutes a Breach of Seller’s representations or warranties under this Agreement.

Section 7.02 Public Announcements . Prior to the Closing, neither Seller nor Buyers shall make any press release or other public announcement regarding the existence of this Agreement, the contents hereof or the transactions contemplated hereby. Following the Closing, Seller and Prima may issue a press release in form and substance to be agreed upon by Seller and Prima prior to the Closing, which agreement shall not be unreasonably withheld. Notwithstanding the foregoing, Seller may make such disclosures, including issue press releases, it deems necessary under any applicable Laws or stock exchange rule.

Section 7.03 Successor Operator . Seller is currently not operating any of the Assets pursuant to joint operating agreements with third parties. Each Buyer specifically acknowledges and agrees that Seller has made no representation or guarantee that any Buyer will become operator under any joint operating agreement.

ARTICLE 8

CONDITIONS TO OBLIGATIONS OF SELLER

The obligations of Seller to consummate the transactions 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 8.01 Representations . The representations and warranties of each Buyer herein contained shall be true and correct in all material respects on the Closing Date as though made on and as of such date;

Section 8.02 Performance . Each Buyer shall have performed all material obligations, covenants and agreements contained in this Agreement to be performed or complied with by such Buyer at or prior to the Closing and shall have taken the actions set forth in Section 10.08 ; and

Section 8.03 Pending Matters . No suit, action, or other proceeding arising from the actions or omissions of any Buyer shall be pending or threatened that seeks to, or could reasonably result in a judicial order, judgment, or decree that would, restrain, enjoin, or otherwise prohibit the consummation of the transactions contemplated by this Agreement.

ARTICLE 9

CONDITIONS TO OBLIGATIONS OF BUYERS

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

Section 9.01 Representations . The representations and warranties of Seller contained in Section 5.01 through Section 5.06 , inclusive, shall be true and correct in all material respects on the Closing Date as though made on and as of such date, and no action or omission of Seller or event shall have occurred during the period of time commencing upon the expiration of the Title Claim Date and ending on the Closing Date which shall have caused any of the representations and warranties of Seller contained in Section 5.07 through Section 5.21 , inclusive, not to be true and correct in all material respects on the Closing Date as though made on and as of such date;

Section 9.02 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 and shall have taken the actions set forth in Section 10.07 ;

Section 9.03 Pending Matters . No suit, action, or other proceeding arising from the actions or omissions of Seller shall be pending or threatened that seeks to, or could reasonably result in a judicial order, judgment, or decree that would, restrain, enjoin, or otherwise prohibit the consummation of the transactions contemplated by this Agreement; and

Section 9.04 Macquarie Liens . On or before the Closing, Seller shall deliver to Prima a release of the Macquarie Liens in a form suitable for filing of record.

ARTICLE 10

THE CLOSING

Section 10.01 Time and Place of the Closing . If the conditions referred to in Article 8 and Article 9 have been satisfied or waived in writing, the transactions contemplated by this Agreement (the “ Closing ”) shall take place at Seller’s Lakewood, Colorado offices on March 30, 2011 (the “ Closing Date ”).

Section 10.02 Allocation of Costs and Expenses and Adjustments to Purchase Price at the Closing .

(a) At the Closing, the Purchase Price shall be increased (without duplication) by the following amounts:

(i) the amount of all (A) ad valorem, property, severance, production, conservation and other similar Taxes and assessments based upon or measured by the ownership of the Assets, insofar as such Taxes relate to periods of time from and after the Effective Time, to the extent paid by or on behalf of Seller and (B) charges, costs, and expenses of any kind or nature that are attributable to the Assets and the period from and after Effective Time, to the extent paid by or on behalf of Seller;

(ii) all expenses, including operating and capital expenditures, incurred and paid by or on behalf of Seller in connection with ownership, operation, and use of the Assets attributable to the period from and after the Effective Time, and including the costs incurred in connection with the AFEs described on Schedule 5.07 which costs shall be the responsibility of each Buyer, with respect to each Buyer’s Proportionate Share, notwithstanding that such costs may have accrued prior to the Effective Time;

(iii) all royalties, rentals, and other charges attributable to the Assets for the period from and after the Effective Time to the extent paid by or on behalf of Seller;

(iv) expenses incurred under applicable operating agreements including any overhead charges allowable under the applicable operating procedure (COPAS) where Seller is non-operator attributable to the Assets for the period from and after the Effective Time to the extent paid by or on behalf of Seller;

(v) the value of all oil, gas, and natural gas liquids in storage or in the pipelines as of the Effective Time that is credited to the Assets, such value (A) for purposes of the Statement, to be the actual price received for such oil, gas, or natural gas liquids upon the first unaffiliated third party sale thereof, if available, and upon such estimates as are reasonably agreed upon by Seller and Prima, to the extent actual amounts are not known at the Closing, and (B) for purposes of the Final Settlement Statement, to be based upon actual amounts;

(vi) $6,198.00 [$1.90 times 3,262 MCF] to cash out the gas imbalances listed on Schedule 5.12 in Seller’s favor; and

(vii) any other amount provided for in this Agreement or agreed upon in writing by Seller and Prima.

(b) At the Closing, the Purchase Price shall be decreased (without duplication) by the following amounts:

(i) the Deposit;

(ii) an amount equal to the sales price paid to Seller by the first purchaser of the Hydrocarbons produced, saved, and sold from the Subject Interests from the Effective Time (without deductions of any kind or nature, including, but not limited to, royalties and any Taxes based on production), which shall (A) for purposes of the Statement, be based upon actual amounts, if available, and upon such estimates as are reasonably agreed upon by Seller and Prima, to the extent actual amounts are not known at the Closing, and (B) for purposes of the Final Settlement Statement, be based upon actual amounts;

(iii) an amount equal to all cash in or attributable to suspense accounts held by Seller relating to the Assets for which each Buyer, with respect to each Buyer’s Proportionate Share, has assumed responsibility under Section 12.01 ;

(iv) the Allocated Value of any Asset sold prior to the Closing to the holder of a preferential right pursuant to Section 4.06 ;

(v) the Allocated Value of any Asset excluded from the purchase and sale contemplated herein pursuant to the provisions of Article 4;

(vi) all downward Purchase Price Adjustments for Title Defects, Environmental Defects and Representation Defects determined in accordance with Article 4 ;

(vii) all Casualty Losses determined in accordance with Section 13.03(c) ;

(viii) subject to Section 7.01 , proceeds from the sale, salvage, or other disposition of any Equipment or rights in the Assets from and after the Effective Time; and

(ix) any other amount provided for in this Agreement or agreed upon in writing by Seller and Prima.

(c) The allocations of costs and expenses and/or adjustments described in Section 10.02(a) and Section 10.02(b) are referred to herein as the “ Purchase Price Allocations and Adjustments .”

Section 10.03 Closing Adjustments and Allocations Statement . On or before March 18, 2011, Seller shall prepare and deliver to Prima a statement of the estimated Purchase Price Allocations and Adjustments with appropriate support (the “ Statement ”), which Statement shall be based upon the then most currently available data and information in order to make the adjustments as provided in Section 10.02 .

Section 10.04 Post-Closing Allocations and Adjustments to Purchase Price .

(a) On or before ninety (90) days after the Closing Date, Seller shall prepare and deliver to Prima a revised Statement (“ Final Settlement Statement ”) setting forth the actual Purchase Price Allocations and Adjustments. Each of Seller and Prima shall provide the other Party such data and information as may be reasonably requested to permit Seller to prepare the Final Settlement Statement or to permit Prima to perform or cause to be performed an audit of the Final Settlement Statement. The Final Settlement Statement shall become final and binding upon the Parties on the thirtieth (30th) day following receipt thereof by Prima (the “ Final Settlement Date ”) unless Prima gives written notice of Prima’s disagreement (a “ Notice of Disagreement ”) to Seller prior to such date. Any Notice of Disagreement shall specify in reasonable detail the dollar amount and the nature and basis of any disagreement so asserted. If a Notice of Disagreement is received by Seller in a timely manner, then Seller and Prima shall resolve the dispute evidenced by the Notice of Disagreement by mutual agreement, or otherwise in accordance with Section 4.13 .

(b) If the amount of the adjusted Purchase Price as set forth on the Final Settlement Statement exceeds the amount of the estimated Purchase Price paid at the Closing (including the Deposit), then Prima shall pay in immediately available funds to Seller the amount by which the Purchase Price as set forth on the Final Settlement Statement exceeds the amount of the estimated Purchase Price paid at the Closing (including the Deposit) within five (5) business days after the Final Settlement Date. If the amount of the adjusted Purchase Price as set forth on the Final Settlement Statement is less than the amount of the estimated Purchase Price paid at the Closing (including the Deposit), then Seller shall pay in immediately available funds to Prima the amount by which the Purchase Price as set forth on the Final Settlement Statement is less than the amount of the estimated Purchase Price paid at the Closing (including the Deposit) within five (5) business days after the Final Settlement Date.

(c) If Buyers shall receive any revenues attributable to such Hydrocarbons for any reason for which Buyers have received a reduction in the Purchase Price pursuant to this Section 10.04(c) , Prima shall promptly remit same in immediately available funds to Seller. Likewise, if Seller shall for any reason receive any of the proceeds of sale of Hydrocarbons produced and saved from the Subject Interests and attributable to the period from and after the Closing Date or any other revenues attributable to the ownership or operation of the Assets from and after the Effective Time, Seller shall promptly remit same in immediately available funds to Prima.

(d) Except as otherwise provided in this Agreement, any costs and expenses, including Taxes (other than income taxes) relating to the Assets which are not reflected in the Final Settlement Statement shall be treated as follows:

(i) All costs and expenses relating to the Assets for the period of time prior to the Effective Time shall be the sole obligation of Seller and Seller shall promptly pay, or if paid by Buyers, promptly reimburse Prima in immediately available funds for and indemnify, defend, and hold each Buyer harmless from and against the same; and

(ii) All costs and expenses relating to the Assets for which each Buyer is responsible for its respective Proportionate Share (being those incurred from and after the Effective Time) shall be the sole obligation of each Buyer respectively and Prima shall promptly pay, or if paid by Seller, promptly reimburse Seller in immediately available funds for and each Buyer shall indemnify, defend, and hold Seller harmless from and against the same.

(e) Purchase Price adjustments, if any, with respect to Title Defects or Environmental Defects, the cure or correction of which or a dispute with respect to the same remains pending on the Final Settlement Date shall be made on a date mutually agreed by Seller and Prima, acting reasonably.

Section 10.05 Transfer Taxes . Each Buyer assumes its Proportionate Share of responsibility for all sales, use, documentary, recording, stamp, transfer, and other taxes (other than taxes on gross income, net income or gross receipts) and duties, levies, assessments, fees, or other governmental charges incurred by or imposed with respect to the property transfers undertaken pursuant to this Agreement, all of which shall be paid by Prima. The Parties will reasonably cooperate to eliminate or reduce the assessment of sales or use taxes to the extent permitted by applicable Law. If Seller (not Buyers) is required by applicable Law to appeal or protest the assessment of sales or use taxes, Seller shall protest the assessment of those taxes if Prima requests Seller in writing to make such appeal or protest, and, in such event, Prima will reimburse Seller all out-of-pocket expenses authorized by Prima and incurred by Seller in connection with such appeal or protest.

Section 10.06 Ad Valorem and Similar Taxes . All ad valorem, property, production, severance, and similar Taxes attributable to any period prior to the Effective Time will be paid by Seller. Each Buyer shall pay its respective Proportionate Share of all ad valorem, property, production, severance, conservation, and similar Taxes attributable to any period from and after the Effective Time. Notwithstanding anything to the contrary set forth in this Agreement, for all purposes of this Agreement, Taxes based on or measured by production of Hydrocarbons or the value thereof shall be deemed attributable to the period during which such production occurred regardless of the year when such Taxes are assessed. Seller shall provide written evidence to Prima that it has paid all Taxes for periods prior to the Effective Time that are payable after the Effective Time including production Taxes in the State of Wyoming provided such Taxes are based on production occurring prior to the Effective Time.

Section 10.07 Actions of Seller at the Closing . At the Closing, Seller shall:

(a) execute, acknowledge, and deliver to Buyers the Assignment in the form of Exhibit D , effective as of the Effective Time, and such other conveyances, assignments, transfers, bills of sale, and other instruments (in form and substance mutually agreed upon by Seller and Prima) as may be necessary or desirable to convey the Assets to Buyers, including, as appropriate, separate counterpart assignments on officially approved federal and state forms in sufficient counterparts to satisfy applicable statutory and regulatory requirements;

(b) execute, acknowledge, and deliver to Prima such letters in lieu of transfer or division orders as may be reasonably requested by Prima prior to the Closing directing all purchasers of production from the Subject Interests to make payment of each Buyer’s Proportionate Share of the proceeds attributable to such production to each respective Buyer from and after the Closing Date;

(c) deliver to Prima possession of the Assets, including the Records to the extent the Records are in the possession of Seller and are not subject to contractual restrictions on transferability; provided, however, Seller shall have the right at its sole expense to make and retain copies of any of the Records;

(d) execute and deliver to Prima an affidavit attesting to Seller’s non-foreign status;

(e) execute, acknowledge and deliver to Prima recordable releases of the Macquarie Liens; and

(f) execute, acknowledge, and deliver any other agreements, or notices to third parties provided for herein or necessary or desirable to effect the transactions contemplated hereby.

Section 10.08 Actions of Prima at the Closing . At the Closing, Prima (and the other Buyers with respect to the obligations in Sections 10.08(c) and 10.08(d) ) shall:

(a) pay the Purchase Price (as adjusted pursuant to the provisions hereof) less the Deposit in immediately available funds pursuant to wire transfer instructions to be provided by Seller to Prima;

(b) provide any necessary evidence including proof of proper bonding and other qualifications, if any, to be entitled to take and actually take possession of the Assets;

(c) execute, acknowledge, and deliver the Assignment and any other agreements or other instruments (including, but not limited to, ratifications and assignments required by any gas purchaser, gatherer or transporter) provided for herein or necessary or desirable to effect the transactions contemplated hereby; and

(d) execute, acknowledge and deliver to Seller the investment representation letter in the form of Exhibit E .

Section 10.09 Recordation; Further Assurances .

(a) Promptly following the Closing, Prima shall cause the documents identified in Section 10.07(a) to be recorded or filed in the appropriate real property and other applicable records, in the order reasonably agreed upon by Seller and Prima, and Prima shall promptly provide Seller copies of all such recorded or filed instruments.

(b) After the Closing Date, each of the Parties, at the request of any other Party and without additional consideration, shall execute and deliver, or shall cause to be executed and delivered, from time to time such further instruments of conveyance and transfer and shall take such other action as the other Party may reasonably request to convey and deliver the Assets to Buyers and to accomplish the orderly transfer of the Assets to Buyers in the manner contemplated by this Agreement. After the Closing, the Parties will cooperate to have all proceeds received attributable to the Assets to 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 11

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 Seller and Prima;

(b) by Seller on the Closing Date if the conditions set forth in Article 8 have not been satisfied in all material respects by Buyers or waived by Seller in writing by the Closing Date;

(c) by Prima on the Closing Date if the conditions set forth in Article 9 have not been satisfied in all material respects by Seller or waived by Prima in writing by the Closing Date;

(d) by either Seller or Prima if the Closing shall not have occurred by April 15, 2011;

(e) by either Seller or Prima if any Governmental Authority shall have issued a final and non-appealable order, judgment, or decree or taken any other final and non-appealable action challenging, restraining, enjoining, prohibiting, or invalidating the consummation of any of the transactions contemplated herein;

(f) by either Seller or Prima if (i) the aggregate amount of the Title Defect Values with respect to all Title Defects asserted by Prima reasonably and in good faith plus (ii) the aggregate amount of the Environmental Defect Values with respect to all Environmental Defects asserted by Prima reasonably and in good faith plus (iii) the aggregate amount of all Casualty Losses plus (iv) the aggregate amount of all Representation Defect Values asserted by Prima reasonably and in good faith exceeds One Million Two Hundred Sixty Thousand Dollars ($1,260,000.00);

(g) by either Seller or Prima if, between execution of this Agreement and the Closing, an event should occur having a Material Adverse Effect on the ownership, operation, or value of the Assets; or

(h) as otherwise provided herein;

provided, however, that neither Seller nor Prima shall have the right to terminate this Agreement pursuant to clause (b) , (c) , or (d) above if such Party is at such time in Breach of any provision of this Agreement, or if such Party is Prima, any Buyer is in breach of any provision of this Agreement, or such Party instigates a proceeding of the nature described in Section 8.03 or Section 9.03 .

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 , this Agreement shall be null and void and no Party shall have any further rights or obligations under this Agreement; provided, however, each Buyer’s obligation under Section 4.09(a)(vii) shall survive the Closing.

Section 11.03 Attorneys’ Fees, Etc . If any Party to this Agreement resorts to legal proceedings to enforce this Agreement, the prevailing Party or Parties in such proceedings shall be entitled to recover all costs incurred by such Party or Parties, including reasonable attorneys’ fees, in addition to any other relief to which such Party or Parties may be entitled. This Section 11.03 shall not apply to any proceeding under Section 4.13 .

ARTICLE 12

ASSUMPTION AND INDEMNIFICATION

Section 12.01 Each Buyer’s Obligations after the Closing . Subject to Section 12.10 below, upon and after the Closing, except to the extent reflected in an upward Purchase Price Allocations and Adjustments, each Buyer will assume and perform its respective Proportionate Share of all the obligations, liabilities, and duties relating or with respect to the ownership and/or operation of the Assets that are attributable to periods from and after the Effective Time, together with the Plugging and Abandonment Obligations, the Environmental Obligations, and all other obligations assumed by each of the Buyers in such Buyer’s respective Proportionate Share under this Agreement (collectively, the “ Assumed Obligations ”). Without limiting the generality of the foregoing, the Assumed Obligations shall also specifically include:

(a) Responsibility for the performance of all express and implied obligations under the instruments described in Exhibit A , together with all other instruments in the chain of title to such Assets, the Leases, the Contracts, the Surface Agreements, the Permits, and all other orders, contracts, and agreements to which the Assets are subject, including the payment of royalties and overriding royalties, in each case to the extent attributable to the periods from and after the Effective Time;

(b) Responsibility for payment of any amounts held in suspense accounts by Seller as of the Closing Date, and for which the Purchase Price is adjusted pursuant to Section 10.02(b) , without regard to whether such suspense amounts relate to periods before or after the Effective Time. Seller covenants and agrees to provide to Prima with the Records, the owner name, address, and tax identification number (if known by Seller), the reason such amounts are in suspense, the amount of suspense funds for each such owner making up the total of such funds, and all other information with respect thereto required to be provided to the owner or to the state under the laws, rules, and regulations of the affected jurisdiction. To the extent practicable, Seller shall provide such information in the electronic or computer sensible form maintained by Seller. Seller shall remain responsible for the payment of any statutory interest and penalties which may have accrued prior to the Effective Time with respect to such suspense amounts, whether payable to the interest owner or to any state agency in connection with unclaimed property laws, to the extent such interest and penalties are not included in the amount deducted from the Purchase Price pursuant to Section 10.02(b) ;

(c) Responsibility for compliance with all Laws now or hereafter in effect pertaining to the Assets, and the procurement and maintenance of all permits, consents, and authorizations of or required by Governmental Authorities in connection with the Assets, attributable to periods from and after the Effective Time; and

(d) Any Breach of Sections 6.01, 6.02, 6.03 and 6.04 .

Section 12.02 Seller’s Obligations after the Closing . After the Closing, Seller will retain responsibility for (a) the payment of all operating expenses and capital expenditures related to the Assets and attributable to Seller’s ownership and/or its operation of the Assets prior to the Effective Time, (b) severance, ad valorem, production, property, personal property, and similar Taxes measured by the value of the Assets or measured by the production of Hydrocarbons attributable to all periods during which Seller owned the Assets prior to the Effective Time, (c) the payment of all broker’s and finder’s fees in connection with the transactions contemplated by this Agreement, (d) the obligations, liabilities, and duties of Seller relating to or with respect to its ownership and/or operation of the Assets that are attributable to Seller’s period of ownership of the Assets prior to the Effective Time other than the Plugging and Abandonment Obligations and the Environmental Obligations, (e) any liability of Seller for the personal injury or death of an individual or property damage that arises from operations related to the Assets during Seller’s period of ownership prior to the Effective Time, but excluding any liability for the Plugging and Abandonment Obligation, (f) any Breach of the representations set forth in Sections 5.01, 5.02, and 5.03 , and (g) Seller’s proportionate share of any third party Claims with respect to the payment of royalties, overriding royalties, production payments, net profit payments, or other payments required by the Leases or the Contracts that accrued during Seller’s period of ownership of the Leases and Contracts prior to the Effective Time (collectively the “ Retained Obligations ”).

Section 12.03 Plugging and Abandonment Obligations .

(a) Each Buyer’s Obligations . Provided the Closing occurs, and to the extent not otherwise addressed by the express provisions of this Agreement, each Buyer assumes its respective Proportionate Share of full responsibility and liability for the following plugging and abandonment obligations related to the Assets (the “ Plugging and Abandonment Obligations ”), regardless of whether they are attributable to the ownership or operation of the Assets before or after the Effective Time:

(i) The necessary and proper plugging, replugging, and abandonment of all Wells on the Assets, whether plugged and abandoned before or after the Effective Time in compliance with applicable Laws and the terms of the Leases;

(ii) The necessary and proper decommissioning, removal, abandonment, and disposal of all structures, pipelines, facilities, equipment, abandoned Assets, junk, and other personal property located on or comprising any part of the Assets in compliance with applicable Laws and the terms of the Leases;

(iii) The necessary and proper capping and burying of all associated flow lines located on or comprising any part of the Assets, to the extent required by applicable Laws, the Leases, the Contracts, or other agreements;

(iv) The necessary and proper restoration of the Assets, both surface and subsurface, in compliance with any applicable Laws, the Leases, the Surface Agreements, the Contracts, or any other applicable agreements;

(v) To the extent not addressed by operation of Article 4 , any necessary clean-up or disposal of any part of the Assets contaminated by NORM, asbestos containing materials, lead based paint, or any other substances or materials considered to be hazardous under Laws, including Environmental Laws, and Laws relating to the protection of natural resources;

(vi) All obligations arising from contractual requirements and demands made by Governmental Authorities or parties claiming a vested interest in any part of the Assets; and

(vii) Obtaining and maintaining all bonds and securities, including supplemental or additional bonds or other securities, that may be required by contract or by Governmental Authorities.

(b) Standard of Operations . If any Buyer is the operator, such Buyer shall conduct all Plugging and Abandonment Obligations and all other operations with respect to the Assets in compliance with all Laws, including Environmental Laws and Laws (now or hereafter in effect) relating to the protection of natural resources.

Section 12.04 Environmental Obligations . Each Buyer assumes its respective Proportionate Share of full responsibility and liability for the following occurrences, events, conditions, and activities on, or related to, or attributable to Seller’s ownership or operation of the Assets (the “ Environmental Obligations ”) regardless of whether arising from Seller’s ownership or operation of, or relating to, the Assets before or after the Effective Time, and regardless of whether resulting from any acts or omissions of Seller or its Representatives (INCLUDING THOSE ARISING FROM THE SOLE, JOINT OR CONCURRENT NEGLIGENCE (BUT NOT GROSS NEGLIGENCE OR WILLFUL MISCONDUCT), STRICT LIABILITY, OR OTHER LEGAL FAULT OF SELLER OR ANY OF SELLER’S REPRESENTATIVES), or the condition, including the environmental condition, of the Assets when acquired:

(a) Environmental pollution or contamination, including pollution or contamination of the soil, groundwater, or air by Hydrocarbons, drilling fluid and other chemicals, brine, produced water, NORM, asbestos containing materials, lead based paint, mercury, or any other substance, and any other violation of Environmental Laws or Laws now or hereafter in effect relating to the protection of natural resources;

(b) Underground injection activities and onsite waste disposal;

(c) Clean-up responses, and the cost of remediation, control, assessment, or compliance with respect to surface and subsurface pollution caused by spills, pits, ponds, lagoons, or storage tanks;

(d) Failure to comply with applicable land use, surface disturbance, licensing, or notification requirements; and

(e) Disposal on the Assets of any hazardous substances, wastes, materials, and products generated by or used in connection with the ownership, development, operation, or abandonment of any part of the Assets.

Section 12.05 Definition of Claims . Except as expressly provided in Section 4.09(a)(vii) , the term “ Claims ” means any and all direct or indirect, demands, claims, notices of violation, notices of probable violation, filings, investigations, administrative proceedings, actions, causes of action, suits, other legal proceedings, judgments, assessments, damages, deficiencies, Taxes, penalties, fines, obligations, responsibilities, liabilities, payments, charges, losses, costs, and expenses (including costs and expenses of operating the Assets) of any kind or character asserted by a third party (whether or not asserted prior to the Closing, and whether known or unknown, fixed or unfixed, conditional or unconditional, based on negligence, strict liability or otherwise, choate or inchoate, liquidated or unliquidated, secured or unsecured, accrued, absolute, contingent, or other legal theory), including penalties and interest on any amount payable as a result of any of the foregoing, any legal or other costs and expenses incurred in connection with investigating or defending any Claim, and all amounts paid in settlement of Claims. Without limiting the generality of the foregoing, the term “ Claims ” specifically includes any and all Claims arising from, attributable to or incurred in connection with any (a) breach of contract, (b) loss or damage to property, injury to or death of persons, and other tortious injury and (c) violations of applicable Laws, including Laws relating to the protection of natural resources, Environmental Laws (each as now or hereafter in effect) and any other legal right or duty actionable at law or equity.

Section 12.06 Application of Indemnities .

(a) All indemnities set forth in this Agreement extend to the officers, directors, partners, managers, members, shareholders, agents, contractors, employees, and affiliates of the indemnified party (“ Representatives ”).

(b) UNLESS THIS AGREEMENT EXPRESSLY PROVIDES TO THE CONTRARY, THE INDEMNITY AND RELEASE, AND WAIVER AND ASSUMPTION PROVISIONS SET FORTH IN THIS AGREEMENT APPLY, REGARDLESS OF WHETHER THE INDEMNIFIED PARTY (OR ITS REPRESENTATIVES) CAUSES, IN WHOLE OR PART, AN INDEMNIFIED CLAIM, INCLUDING INDEMNIFIED CLAIMS ARISING OUT OF OR RESULTING, IN WHOLE OR IN PART, FROM, OUT OF, OR IN CONNECTION WITH THE CONDITION OF THE ASSETS OR THE SOLE, JOINT, OR CONCURRENT NEGLIGENCE (BUT NOT SECURITIES FRAUD CLAIMS THAT REQUIRE SCIENTER OR KNOWLEDGE AS ONE ELEMENT OF THE CAUSE OF ACTION, GROSS NEGLIGENCE, WILLFUL MISCONDUCT, OR FRAUD BY THE INDEMNIFIED PARTY), STRICT LIABILITY, OR OTHER LEGAL FAULT OF THE INDEMNIFIED PARTY OR ANY OF ITS REPRESENTATIVES.

(c) NEITHER SELLER NOR BUYERS SHALL BE ENTITLED TO RECOVER FROM THE OTHER, RESPECTIVELY, AND EACH OF SELLER AND EACH BUYER RELEASES THE OTHER FROM AND WAIVES, ANY LOSSES, COSTS, EXPENSES, OR DAMAGES ARISING UNDER THIS AGREEMENT OR IN CONNECTION WITH OR WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED IN THIS AGREEMENT ANY AMOUNT IN EXCESS OF THE ACTUAL COMPENSATORY DAMAGES SUFFERED BY SUCH PARTY. SELLER AND EACH BUYER WAIVE, AND RELEASE EACH OTHER FROM ANY RIGHT TO RECOVER PUNITIVE, SPECIAL, EXEMPLARY, AND CONSEQUENTIAL DAMAGES ARISING IN CONNECTION WITH OR WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED IN THIS AGREEMENT; PROVIDED, HOWEVER, ANY SUCH DAMAGES RECOVERED BY A THIRD PARTY (OTHER THAN SUBSIDIARIES, AFFILIATES, OR PARENTS OF A PARTY) FOR WHICH EITHER SELLER OR ANY BUYER OWES THE OTHER AN INDEMNITY UNDER THIS AGREEMENT SHALL NOT BE WAIVED. SELLER AND EACH BUYER ACKNOWLEDGE THAT THIS STATEMENT IS CONSPICUOUS.

(d) The indemnities of the indemnifying Party in this Agreement do not cover or include any amounts that the indemnified Party may legally recoup from other third party owners under applicable joint operating agreements or other agreements, and for which the indemnified Party is reimbursed by any third party. The indemnifying Party will pay all costs incurred by the indemnified Party in obtaining reimbursement from third parties. There will be no upward or downward adjustment in the Purchase Price as a result of any matter for which Seller or any Buyer is indemnified under this Agreement.

Section 12.07 Each Buyer’s Indemnity . Each Buyer, with respect to its Proportionate Share, shall release and indemnify, defend and hold Seller and its Representatives harmless from and against any and all Claims caused by, resulting from, or incidental to the Assumed Obligations.

Section 12.08 Seller’s Indemnity . Subject to Section 12.10 , Seller shall release and indemnify, defend and hold each Buyer and its Representatives harmless from and against any and all Claims caused by, resulting from, or incidental to the Retained Obligations.

Section 12.09 Notices and Defense of Indemnified Claims . Each Party shall immediately notify the other Parties of any Claim of which it becomes aware and for which it is entitled to indemnification from another 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 Claim for which the indemnifying Party has agreed to release and indemnify and hold the indemnified Party harmless under this Agreement; provided, however, that the failure to give such notice shall not relieve the indemnifying Party from its obligations unless such failure to give notice actually prejudices the indemnifying Party and so long as the notice is given within the period set forth in Section 12.10 . The indemnified Party shall have the right to participate with the indemnifying Party in the defense of any such Claim at its own expense.

Section 12.10 Survival . Except for the special warranty of title contained in the Assignment, Seller’s representations and warranties set forth in Sections 5.01, 5.02 and 5.03 and Buyers’ representations and warranties set forth in Section 6.01, 6.02, 6.03 and 6.04 , the representations and warranties of the Parties set forth herein shall not survive the Closing, and the consummation of the transactions contemplated hereby, and each of Seller and each Buyer covenants not to sue the other Party based upon any alleged Breach of any such non-surviving representations or warranties. The indemnity of Seller as provided in Section 12.08 as to pre-Effective Time Taxes covered by Section 12.02(b) , broker’s and finder’s fees covered by Section 12.02(c) , liability for personal injury or death of an individual or property damage covered by Section 12.02(e) and Breach of the representations set forth in Sections 5.01, 5.02 and 5.03 covered by Section 12.02(f) shall indefinitely survive the Closing. All other Seller indemnity obligations shall survive only for a period of six (6) months after the Closing; provided, however, no Buyer shall be entitled to make, and hereby waives the right to assert, any claim for indemnity pursuant to the provisions of this Section (except those covered by Section 12.02(b) , Section 12.02(c) , Section 12.02(e) and Section 12.02(f) ) against Seller unless such Buyer seeks indemnification for such claim by a written notice received by Seller on or before the date that is six (6) months after the Closing Date (the “ Expiration Date ”). From and after the Expiration Date, all pre-Effective Time matters that constituted Retained Obligations (except those relating to production Taxes, broker’s and finder’s fees, liability for personal injury or death of an individual or property damage or breach of the representations set forth in Sections 5.01, 5.02 and 5.03 ) not raised in a Claim asserted by any Buyer prior to the Expiration Date shall be deemed each Buyer’s Assumed Obligations, with respect to each Buyer’s Proportionate Share, for all purposes hereunder. Notwithstanding the foregoing, in no event shall the aggregate amount paid by Seller to Buyers pursuant to this Section 12.10 exceed twenty percent (20%) of the unadjusted Purchase Price.

Section 12.11 Exclusive Remedy . The terms and provisions of this Article 12 and those provided in Article 2 , Article 4 , Article 7 , Article 8 , Article 9 , Article 10 , and Article 11 shall be the sole and exclusive remedy of each of the Parties indemnified hereunder with respect to the representations, warranties, covenants, and agreements of the Parties set forth in this Agreement and the other documents executed and delivered hereunder; provided, however, that the terms of this Section 12.11 shall not be applicable to the extent that a Party has committed fraud, securities fraud (where one of the elements of the cause of action is scienter or knowledge), willful misconduct, or gross negligence.

Section 12.12 Prima’s Indemnity . Prima shall release and indemnify, defend and hold Seller harmless from and against any and all Claims asserted by the other Buyers arising from Prima’s failure to properly distribute the Deposit (if it is refunded pursuant to Sections 2.02(c) or 2.02(d) ) or any payment made by Seller pursuant to Sections 10.04(b) .

Section 12.13 Defenses and Counterclaims . A Party that is required to assume any obligation or liability of the other Party pursuant to this Agreement or that is required to release and defend, indemnify or hold the other Party harmless hereunder shall, notwithstanding any other provision hereof to the contrary, be entitled to the use and benefit of all defenses (legal and equitable) and counterclaims of such other Party in defense of third party Claims arising out of any such assumption or indemnification.

Section 12.14 Anti-Indemnity Statute, No Insurance; Subrogation . Seller and each Buyer agree that with respect to any statutory limitations now or hereafter in effect affecting the validity or enforceability of the indemnities provided for in this Agreement, such indemnities shall be deemed amended in order to comply with such limitations. This provision concerning statutory limitations shall not apply to indemnities for all liabilities of the indemnifying Party which are covered by such Party’s insurance. The indemnification provisions provided in this Article 12 shall not be construed as a form of insurance. Seller and each Buyer hereby waive for themselves and their successors and assigns, including their insurers, any rights to subrogation for Claims for which each of them is respectively liable or against which each respectively indemnifies the other, and, if required by applicable policies, Seller and each Buyer shall obtain waiver of such subrogation from their respective insurers.

Section 12.15 Settlements by Seller . Notwithstanding any provision herein to the contrary, Seller reserves the right to settle (before or after any litigation or administrative action is commenced) on terms it deems in its sole discretion to be appropriate any Claims arising from the manner in which the operator of the subject Assets calculated, paid, disclosed or reported royalties, overriding royalties and Taxes prior to the Effective Time. Each Buyer acknowledges and agrees that any such settlement by Seller shall necessarily require Seller to disclose the existence and terms of this Agreement. Buyers shall have no right of approval whatsoever as to any settlement Seller may reach as to any pre-Effective Time matter.

ARTICLE 13

DISCLAIMERS; CASUALTY LOSS AND CONDEMNATION

Section 13.01 Disclaimers of Representations and Warranties . The express representations and warranties of Seller contained in this Agreement are exclusive and are in lieu of all other representations and warranties, whether express, implied, at common law, or statutory. EXCEPT AS PROVIDED IN ANY EXPRESS REPRESENTATION OR WARRANTY OF SELLER AS CONTAINED IN THIS AGREEMENT AND SUBJECT TO THE TERMINATION OF ANY SUCH EXPRESS REPRESENTATION OR WARRANTY OF SELLER IN ACCORDANCE WITH THIS AGREEMENT, EACH BUYER ACKNOWLEDGES THAT SELLER HAS NOT MADE, AND SELLER HEREBY EXPRESSLY DISCLAIMS AND NEGATES, AND EACH 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, OR THE QUALITY, QUANTITY, OR VOLUME OF THE RESERVES OF HYDROCARBONS, IF ANY, ATTRIBUTABLE TO THE ASSETS, (b) THE ACCURACY, COMPLETENESS, OR MATERIALITY OR SIGNIFICANCE OF ANY INFORMATION, DATA, GEOLOGICAL AND GEOPHYSICAL DATA (INCLUDING ANY INTERPRETATIONS OR DERIVATIVES BASED THEREON), OR OTHER MATERIALS (WRITTEN OR ORAL) CONSTITUTING PART OF THE ASSETS, NOW, HERETOFORE OR HEREAFTER FURNISHED TO SUCH BUYER BY OR ON BEHALF OF SELLER, (c) THE CONDITION, INCLUDING, THE ENVIRONMENTAL CONDITION OF THE ASSETS AND (d) THE COMPLIANCE OF SELLER’S PAST PRACTICES WITH THE TERMS AND PROVISIONS OF ANY AGREEMENT IDENTIFIED IN EXHIBIT A , OR ANY SURFACE AGREEMENT, PERMIT, CONTRACT, OR APPLICABLE LAWS, INCLUDING ENVIRONMENTAL LAWS AND LAWS RELATING TO THE PROTECTION OF NATURAL RESOURCES, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ARTICLE 5 . NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, SELLER EXPRESSLY DISCLAIMS AND NEGATES, AND EACH BUYER HEREBY WAIVES, AS TO PERSONAL PROPERTY, EQUIPMENT, INVENTORY, MACHINERY, FIXTURES, BUILDINGS, OFFICES, TRAILERS, ROLLING STOCK, VEHICLES, AND GEOLOGICAL AND GEOPHYSICAL DATA (INCLUDING ANY INTERPRETATIONS OR DERIVATIVES BASED THEREON) 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 IMPLIED OR EXPRESS WARRANTY THAT ANY DATA TRANSFERRED PURSUANT HERETO IS NONINFRINGING, (v) ANY IMPLIED OR EXPRESS WARRANTY OF FREEDOM FROM DEFECTS, WHETHER KNOWN OR UNKNOWN, (vi) ANY AND ALL IMPLIED WARRANTIES EXISTING UNDER APPLICABLE LAWS, AND (vii) EXCEPT AS SPECIFICALLY PROVIDED IN ARTICLE 5 , ANY IMPLIED OR EXPRESS WARRANTY REGARDING ENVIRONMENTAL LAWS, OR LAWS RELATING TO THE PROTECTION OF THE ENVIRONMENT, HEALTH, SAFETY, OR NATURAL RESOURCES OR RELATING TO THE RELEASE OF MATERIALS INTO THE ENVIRONMENT, INCLUDING ASBESTOS CONTAINING MATERIAL, LEAD BASED PAINT, MERCURY, OR ANY OTHER HAZARDOUS SUBSTANCES OR WASTES, IT BEING THE EXPRESS INTENTION OF SELLER AND EACH BUYER THAT THE ASSETS, INCLUDING ALL PERSONAL PROPERTY, EQUIPMENT, FACILITIES, INVENTORY, MACHINERY, FIXTURES, BUILDINGS, OFFICES, TRAILERS, VEHICLES, AND ROLLING STOCK INCLUDED IN THE ASSETS, SHALL BE CONVEYED TO BUYERS, AND EACH BUYER SHALL ACCEPT THE SAME, AS IS, WHERE IS, WITH ALL FAULTS AND IN THEIR PRESENT CONDITION AND STATE OF REPAIR. EACH BUYER REPRESENTS AND WARRANTS TO SELLER THAT SUCH BUYER WILL MAKE, OR CAUSE TO BE MADE SUCH INSPECTIONS WITH RESPECT TO SUCH ASSETS AS SUCH BUYER DEEMS APPROPRIATE. SELLER AND EACH BUYER AGREE THAT, TO THE EXTENT REQUIRED BY APPLICABLE LAWS (INCLUDING ENVIRONMENTAL LAWS AND LAWS RELATING TO THE PROTECTION OF NATURAL RESOURCES, HEALTH, SAFETY, OR THE ENVIRONMENT) TO BE EFFECTIVE, THE DISCLAIMERS OF THE WARRANTIES CONTAINED IN THIS SECTION ARE “CONSPICUOUS” DISCLAIMERS FOR ALL PURPOSES.

Section 13.02 NORM . EACH BUYER ACKNOWLEDGES THAT SUCH BUYER HAS BEEN INFORMED THAT OIL AND GAS PRODUCING FORMATIONS CAN CONTAIN NATURALLY OCCURRING RADIOACTIVE MATERIAL (“ NORM ”). SCALE FORMATION OR SLUDGE DEPOSITS CAN CONCENTRATE LOW LEVELS OF NORM ON EQUIPMENT AND OTHER ASSETS. THE ASSETS SUBJECT TO THIS AGREEMENT MAY HAVE LEVELS OF NORM ABOVE BACKGROUND LEVELS, AND A HEALTH HAZARD MAY EXIST IN CONNECTION WITH THE ASSETS BY REASON THEREOF. THEREFORE, SUCH BUYER MAY NEED TO AND SHALL FOLLOW SAFETY PROCEDURES WHEN HANDLING THE EQUIPMENT AND OTHER ASSETS.

Section 13.03 Casualty Loss; Condemnation .

(a) Except as otherwise provided in this Agreement, each Buyer shall assume such Buyer’s Proportionate Share of all risk of loss with respect to, and any change in the condition of, the Assets from and after the Effective Time, 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) Prior to the Closing, there shall not have been a material adverse change in the Assets taken as a whole caused by an event of casualty (a “ Casualty ”), including but not limited to, volcanic eruptions, acts of God, fire, explosion, earthquake, wind storm, flood, drought, condemnation, the exercise of any right of eminent domain, confiscation, or seizure, but excepting depletion due to normal production and depreciation or failure of equipment or casing.

(c) If, prior to the Closing, a Casualty occurs (or Casualties occur) which results in a reduction in the value of the Assets in excess of twenty percent (20%) of the Purchase Price (“ Casualty Loss ”), Seller or Prima may elect to terminate this Agreement. If this Agreement is not so terminated, then this Agreement shall remain in full force and effect notwithstanding any such Casualty Loss, and, at Prima’s sole option, (i) Seller shall retain such Asset subject to such Casualty and such Asset shall be the subject of an adjustment to the Purchase Price in the same manner set forth in Section 4.03 hereof, or (ii) at the Closing, Seller shall pay to Prima all sums paid to Seller by reason of such Casualty Loss, provided, however, that the Purchase Price shall not be adjusted by reason of such payment, and Seller shall assign, transfer, and set over unto Buyers all of the right, title, and interest of Seller in and to such Asset and any unpaid awards or other payments arising out of such Casualty Loss.

(d) For purpose of determining the value of a Casualty Loss, Seller and Prima shall use the same methodology as applied in determining the value of a Title Defect as set forth in Section 4.03(a) .

ARTICLE 14

MISCELLANEOUS

Section 14.01 Names . As soon as reasonably possible after the Closing, but in no event later than forty-five (45) days after the Closing, Prima 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 Governmental Authorities to place the title or other indicia or responsibility of ownership, including operation of the Assets, in a name other than the name of Seller or any of its affiliates, or any variations thereof.

Section 14.02 Expenses . Each Party shall be solely responsible for all expenses, including due diligence expenses, incurred by it in connection with this transaction, and no Party shall be entitled to any reimbursement for any such expenses from any other Party.

Section 14.03 Document Retention . As used in this Section 14.03 , the term “ Documents ” shall mean all files, documents, books, records, and other data delivered to Prima by Seller pursuant to the provisions of this Agreement (other than those that Seller has retained either the original or a copy of), including financial and tax accounting records; land, title and division order files; contracts; engineering and well files; and books and records related to the operation of the Assets prior to the Closing Date. Prima shall retain and preserve the Documents for a period of no less than seven (7) years following the Closing Date (or for such longer period as may be required by Laws of any Governmental Authority), 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 any of the Documents at its expense. Except to the extent necessary for the collection of monies due Seller by a third party or to perform any indemnity obligation required of Seller by this Agreement, Seller shall not retain any Documents in either written or electronic form, except that which might be retained in the ordinary archiving of Seller’s database.

Section 14.04 Entire Agreement . This Agreement, the documents to be executed and delivered hereunder, and the Exhibits and Schedules attached hereto constitute the entire agreement among 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 each of the Parties and specifically referencing this Agreement.

Section 14.05 Waiver . No waiver of any provision of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (whether or not similar), nor shall such waiver constitute a continuing waiver unless otherwise expressly provided.

Section 14.06 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 and words, terms and titles (including terms defined herein) in the singular form shall be construed to include the plural and vice versa, unless the context otherwise requires.

Section 14.07 No Third Party Beneficiaries . Except as provided in Section 12.06(a) , 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 not be construed as a third party beneficiary contract.

Section 14.08 Assignment . Prior to the Closing, no Party may assign or delegate any of its rights or duties hereunder to any individual or entity other than an affiliate of such Party without the prior written consent of Seller and Prima and any assignment made without such consent shall be void. Except as otherwise provided herein, this Agreement shall be binding upon and inure to the benefit of the Parties and their respective permitted successors, assigns, and legal representatives. Notwithstanding any assignment to an affiliate, Seller and Buyers, as the case may be, shall nevertheless remain liable to the other Party in accordance with the terms of this Agreement.

Section 14.09 Governing Law . This Agreement, the other documents delivered pursuant hereto, and the legal relations between the Parties shall be governed and construed in accordance with the laws of the State of Wyoming.

Section 14.10 Notices . Any notice, communication, request, instruction, or other document required or permitted hereunder (including notices of Title Defects and Environmental Defects) shall be given in writing and delivered in person or sent by U.S. Mail postage prepaid, return receipt requested, overnight delivery service, electronically, or facsimile to the addresses of Seller and Buyers set forth below. Any such notice shall be effective and deemed given only upon receipt.

Seller:

SAMSON OIL AND GAS USA, INC.

1726 Cole Boulevard, Suite 210

Lakewood, Colorado 80401

Attention: Terry Barr, President

Fax No.: (303) 296-1961

Tel. No.: (303) 295-0344

Email: Terry.Barr@SamsonOilandGas.com

Buyers:

PRIMA EXPLORATION, INC.

100 Fillmore Street, Suite 450

Denver, Colorado 80206

Attention: Donald J. Law

Tel. No.: (303) 755-5681

Fax No.: (303) 755-5682

Email: donlaw@primaex.com

POWDER MORNING, LLC

100 Fillmore Street, Suite 450

Denver, Colorado 80206

Attention: Donald J. Law

Tel. No.: (303) 755-5681

Fax No.: (303) 755-5682

Email: donlaw@primaex.com

KAB ACQUISITION LLLP-IX

410 Seventeenth Street, Suite 1151

Denver, Colorado 80202

Attention: Kenneth Breitenbach

Tel. No.: (303) 534-4919

Fax No.: (303) 534-4929

Email: kab@bp-corporation.com

MORSE ENERGY PARTNERS II LLC

410 Seventeenth Street, Suite 1150

Denver, Colorado 80202

Attention: Brent J. Morse

Tel. No.: (303) 592-1011

Fax No.: (303) 592-1013

Email: morenergy@att.net

APPLE CREEK LLC

335 S. York Street

Denver, Colorado 80209

Attention: Jay T. Sperr

Tel. No.: (303) 755-5681, Ext. 108

Fax No.: (303) 755-5682

Email: tsperr@primaex.com

BLACKLAND PETROLEUM, LLC

17190 E. Dorado Place

Centennial, Colorado 80015

Attention: Kendall L. Read

Tel. No.: (303) 755-5681, Ext. 105

Fax No.: (303) 755-5682

Email: kread@primaex.com

Seller may, by written notice delivered to Buyers, and any Buyer may, by written notice delivered to the other Buyers and Seller, change its address for notice purposes hereunder.

Section 14.11 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 Seller and Prima shall negotiate in good faith to modify this Agreement so as to effect their original intent as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the extent possible.

Section 14.12 Interpretation . This Agreement shall be deemed and considered for all purposes to have been collectively prepared by the Parties, and shall not be construed against any one Party (nor shall any inference or presumption be made) on the basis of who drafted this Agreement or any particular provision hereof, who supplied the form of Agreement, or any other event of the negotiation, drafting, or execution of this Agreement. Each Party agrees that this Agreement has been purposefully drawn and correctly reflects its understanding of the transaction that it contemplates. In construing this Agreement, the following principles will apply:

(a) A defined term has its defined meaning throughout this Agreement and each Exhibit and Schedule, which Schedules and Exhibits are incorporated herein by this reference, to this Agreement, regardless of whether it appears before or after the place where it is defined.

(b) If there is any conflict or inconsistency between the provisions of the main body of this Agreement and the provisions of any Exhibit or Schedule hereto, the provisions of this Agreement shall take precedence. If there is any conflict between the provisions of any Assignment or other transaction documents attached to this Agreement as an Exhibit and the provisions of any Assignment and other transaction documents actually executed by the Parties, the provisions of the executed Assignment and other executed transaction documents shall take precedence.

(c) The omission of certain provisions of this Agreement from the Assignment does not constitute a conflict or inconsistency between this Agreement and the Assignment, and will not effect a merger of the omitted provisions. To the fullest extent permitted by Laws, all provisions of this Agreement are hereby deemed incorporated into the Assignment by reference.

(d) Terms “ knowledge ” or “ knowingly ,” whether or not capitalized, as to Seller shall mean the actual knowledge, without duty of inquiry, of Terry Barr and Robyn Lamont. As to Buyers such terms shall mean the actual knowledge, without duty of inquiry, of Donald J. Law and M. Scott Homsher.

(e) The adjective, “ material ,” whether or not capitalized, shall mean a situation, circumstance, consequence, or concept whose relevance to the transactions contemplated by this Agreement as a whole is of significance, and would not be considered a small or insignificant deviation from the terms of this Agreement.

(f) The term “ Material Adverse Effect ” shall mean any defect, condition, change, or effect (other than with respect to which an adjustment to the Purchase Price has been made) that when taken together with all other such defects, conditions, changes, and effects significantly diminishes the value, use, operations, or development of the Assets taken as a whole. Notwithstanding the foregoing, the following shall not be considered in determining whether a Material Adverse Effect has occurred:

(i) Fluctuations in commodity prices;

(ii) Changes in Laws or Environmental Laws; or

(iii) Changes in the oil and gas industry that do not have a disproportionate impact on the ownership and operation of the Assets.

(g) “ Breach ” shall mean any breach of, or any falsity or inaccuracy in, any representation or warranty or any breach of, or failure to perform or comply with, any covenant or obligation, in or of this Agreement or any other contract, agreement, or instrument contemplated by this Agreement or any event which with the passing of time or the giving or notice, of both, would constitute such a breach, inaccuracy, or failure, provided that to constitute a Breach, such breach, inaccuracy, or failure must diminish the value of the subject matter regarding which the Breach is asserted in an amount of at least Twenty-Five Thousand Dollars ($25,000.00).

(h) “ Tax ” means all taxes and any other assessments, duties, fees, levies, or other charges imposed by a Governmental Authority based on or measured by the value of the Assets, the production of Hydrocarbons, the receipt of proceeds with respect to such Assets or Hydrocarbons, or otherwise related in any manner or attributable to the Assets or the production of Hydrocarbons including any production tax, windfall profits tax, severance tax, personal property tax, real property tax, or ad valorem tax, together with any interest, fine, or penalty thereon, or addition thereto.

(i) “ Proportionate Share ” means, with regard to Prima, twelve percent (12%), with respect to Powder, sixty-five percent (65%), with respect to KAB, ten percent (10%), with respect to Morse, ten percent (10%), with respect to Apple, two percent (2%), and with respect to Blackland one percent (1%).

Section 14.13 Time of the Essence . Time shall be of the essence with respect to all time periods and notice periods set forth in this Agreement.

Section 14.14 Counterpart Execution . This Agreement may be executed in any number of counterparts, and each counterpart hereof shall be effective as to each Party that executes the same whether or not all of such Parties execute the same counterpart. If counterparts of this Agreement are executed, the signature pages from various counterparts may be combined into one composite instrument for all purposes. All counterparts together shall constitute only one Agreement, but each counterpart shall be considered an original. In the event that this Agreement is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format date file, such signature shall create a valid and binding obligation of the Party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.

[ Signature page follows. ]

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

SELLER:

SAMSON OIL AND GAS USA, INC.

By:	/s/ Robyn Lamont
	Robyn Lamont
	Chief Financial Officer

BUYERS:

PRIMA EXPLORATION, INC.

By:	/s/ Donald J. Law
	Donald J. Law
	President

POWDER MORNING, LLC

By:	/s/ Donald J. Law
	Donald J. Law
	Manager

KAB ACQUISITION LLLP-IX

	Breitenbach Petroleum Corporation,
	its General Partner

	By:	/s/ Kenneth Breitenbach
		Kenneth Breitenbach
		President

	MORSE ENERGY PARTNERS II LLC

	By:	/s/ Brent J. Morse
		Brent J. Morse
		Manager

	APPLE CREEK LLC

	By:	/s/ Jay T. Sperr
		Jay T. Sperr
		Manager

	BLACKLAND PETROLEUM, LLC

	By:	/s/ Kendall L. Read
		Kendall L. Read
		Manager

Exhibit 10.2

LEASE ACQUISITION

AND

PARTICIPATION AGREEMENT

BETWEEN

FORT PECK ENERGY COMPANY, LLC

AND

SAMSON OIL AND GAS USA MONTANA, INC.

DATED AS OF JUNE 22, 2011

TABLE OF CONTENTS

Article I. AGREEMENT FOR PURCHASE AND SALE	2
Section 1.1 Agreement for Purchase and Sale	2
Section 1.2 Access to Records	3
Section 1.3 On-Site Inspection	3
Section 1.4 Confidentiality	4
Section 1.5 Disclaimer	5
Section 1.6 Purchase Price for Initial Leases	5
Section 1.7 Conditions Precedent to Closing	5
Section 1.8 Closing	6
Section 1.9 Termination	7
Section 1.10 Liabilities Upon Termination	7
Section 1.11 In-Process Leases	8
Section 1.12 Option to Exclude River Acreage	8
Section 1.13 Option to Purchase Additional Acreage	8
Section 1.14 Sales by Buyer of Block A Purchased Acreage	10
Section 1.15 Tag-Along Right	10
Article II. TITLE MATTERS	11
Section 2.1 Certain Definitions	11
Section 2.2 Title Defect	12
Section 2.3 Consents	13
Section 2.4 Special Warranty of Title; Subrogation of Warranties	14
Section 2.5 Title Benefit	14
Article III. DRILLING COMMITMENT	14
Section 3.1 Initial Test Wells	14
Section 3.2 Force Majeure	17
Section 3.3 Additional Drilling	17
Article IV. SELLER’S PARTICIPATION OPTION	18
Section 4.1 Seller’s Participation Option	18
Article V. AREA OF MUTUAL INTEREST	19
Section 5.1 Area of Mutual Interest	19
Section 5.2 Marketing AMI Leases to Third Parties	21
Section 5.3 Seller’s AMI Option	21
Section 5.4 Mattelin Property	21
Article VI. OPERATORSHIP	22
Section 6.1 Joint Operating Agreement	22
Article VII. SELLER’S REPRESENTATIONS AND WARRANTIES	22
Section 7.1 Seller’s Representations and Warranties	22
Article VIII. BUYER’S REPRESENTATIONS AND WARRANTIES	24
Section 8.1 Buyer’s Representations And Warranties	24
Article IX. POST-CLOSING OBLIGATIONS	25
Section 9.1 Post-Closing Obligations	25
Article X. DISCLAIMERS	25
Section 10.1 Disclaimer; Title; Condition and Fitness of the Properties	25
Section 10.2 Information About the Properties	26

Article XI. MISCELLANEOUS	26
Section 11.1 Exhibits and Schedules	26
Section 11.2 Expenses	26
Section 11.3 Notices	26
Section 11.4 Amendments	28
Section 11.5 Headings	28
Section 11.6 Counterparts/Fax Signatures	28
Section 11.7 References	28
Section 11.8 Governing Law; Wavier of Jury Trial	28
Section 11.9 Arbitration	28
Section 11.10 Entire Agreement	29
Section 11.11 Binding Effect	29
Section 11.12 No Third-Party Beneficiaries	29
Section 11.13 Survival	29
Section 11.14 Waiver	29
Section 11.15 Limitation on Damages	30
Section 11.16 Severability	30
Section 11.17 Announcements	30
Section 11.18 Transfer Taxes and Recording Fees	30
Section 11.19 Relationship of the Parties	30
Section 11.20 Further Assurances	30

EXHIBITS AND SCHEDULES :

Exhibit A	Plat of Block A
Exhibit B	Initial Acreage
Exhibit C	Initial Leases (WI and Net Acres)
Exhibit D	Form of Assignment
Exhibit E	AMI
Exhibit F	JOA
Exhibit G	Technical Requirements
Exhibit H	In-Process Leases
Exhibit I	Mattelin Leases

INDEX OF DEFINITIONS

Acreage Deficiency	13
Acreage Participation Option	18
Actual Acres	13
Affected Party	17
Agreement	1
AMI	19
AMI Assignment	20
AMI Leases	19
AMI Purchase Price	20
AMI Term	19
Area of Mutual Interest	19
Assignment	6
BIA	7
Block A	1
Block A Purchased Acreage	9
Buyer	1
Buyer’s Drilling Costs	17
Claims	4
Closing	6
Closing Date	6
Closing Statement	5
Cure Period	13
Defensible Title	11
Divestiture	9
Divestiture Agreement	10
Divestiture Lands	10
Divestiture Offer	10
Drilling and Completion	17
Due Diligence Materials	4
Effective Date	1
Environmental Assessment	3
Environmental Defect	3
Environmental Defect Notice	3
First Test Well	14
Force Majeure	17
Fort Peck AMI Agreement	12
Hull Lease	16
Initial Acreage	2
Initial Leases	2
In-Process Leases	7
Intended Acres	13
Intended Initial Net Acres	2
Joint Operating Agreement	22
Lease Burdens	2
Mattelin Lease	21
Net Acre Deficit	8
Net Acre Surplus	8
Net Acres	2
Net Revenue Interest	11
Non-Acquiring Party	20
Objective Depth	14
Option	8
Option Acres	9
Option Allowance	8
Option Closing Date	9
Option Closing Statement	9
Option Exercise Notice	9
Option Lease	9
Option Price	9
Option Termination Date	9
Optional Acreage	9
Opt-Out Lands	19
Participating Interest	20
Parties	1
Party	1
Permitted Encumbrances	11
Production Notice	17
Property Records	3
Prospective Purchaser	10
Purchase Price	5
Remaining Acreage	8
Remaining Block A Purchased Acreage	18
Replaced Lease(s)	8
Restricted Period	10
Second Test Well	15
Seller	1
Stabilized Production	17
Stimulation Well	21
Substitute Well	15
Substitution Lease	8
Substitution Notice	8
Substitution Period	8
Tag-Along Right	10
Target Lands	19
Target Lease Terms	19
Target Meeting	19

iii

Test Well	14
Test Well Option Price	18
Test Wells	14
Title Benefit	14
Title Defect	12
Title Defect Notice	12
Title Examination Period	12
Undivided Divestiture Interest	10
Well Costs	18
Well Information	18

EXECUTION VERSION

LEASE ACQUISITION AND PARTICIPATION AGREEMENT

This Lease Acquisition and Participation Agreement (“ Agreement ”), dated this 22nd day of June, 2011 (the “ Effective Date ”), is by and between Fort Peck Energy Company, LLC, a Delaware limited liability company (“ Seller ”), and SAMSON OIL AND GAS USA MONTANA, INC., a Colorado corporation (“ Buyer ”). Each of Seller and Buyer is sometimes referred to herein as a “ Party ” and they are sometimes collectively referred to herein as the “ Parties .”

WITNESSETH

WHEREAS, Seller is the owner of certain oil and gas leases covering lands in Daniels, Roosevelt, Sheridan, and Valley Counties, Montana; and

WHEREAS, Seller desires to sell to Buyer, and Buyer desires to purchase from Seller, oil and gas leases covering not less than 20,000 Net Acres (as defined herein) out of the area known as the “Fort Peck East Exploration Area — Block A”, which area is shown on Exhibit A attached hereto (“ Block A ”), together with the option to acquire oil and gas leases covering up to an additional 20,000 Net Acres out of Seller’s remaining acreage, all as more fully described herein; and

WHEREAS, Seller desires to retain the option, but not the obligation, to participate for a 33.3% interest in either or both of the initial two wells drilled by Buyer on the acquired leases, together with the option to purchase an undivided 33.3% interest in any remaining acreage acquired by Buyer from Seller that was not included in the spacing units for such initial two wells; and

WHEREAS, Seller and Buyer desire to establish an area of mutual interest and to provide for the potential acquisition of additional leases within such area of mutual interest under terms mutually agreeable to Seller and Buyer.

NOW, THEREFORE, for and in consideration of the mutual covenants herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

ARTICLE I.

AGREEMENT FOR PURCHASE AND SALE

Section 1.1 Agreement for Purchase and Sale .

(a) Subject to the terms and conditions of this Agreement and the reservations and exceptions set forth herein, Buyer agrees to purchase from Seller, and Seller agrees to sell, assign and deliver to Buyer, all of Seller’s right, title and interest in and to oil and gas leases (the “ Initial Leases ”) covering the lands within Block A described in Exhibit B attached hereto (such lands being collectively referred to herein as the “ Initial Acreage ”). The approximate number of Net Acres covered by the Initial Leases, in the aggregate, before giving effect to any substitutions or exclusions as provided herein, is 20,028.406 Net Acres (the “ Intended Initial Net Acres ”).

(b) Seller shall use reasonable efforts to deliver Defensible Title (as defined herein) to 100% of the Initial Leases. To the extent, Seller is able to deliver Defensible Title (as defined herein) to Initial Leases covering at least 90%, but less than 100%, of the Intended Initial Net Acres, then: (i) Seller may assign to Buyer all of its right, title and interest in other oil and gas leases covering an approximately equivalent number of Net Acres in adjoining (to the extent possible) lands in Block A in substitution for the Net Acres in the Initial Leases as to which Seller is unable to deliver Defensible Title, or (ii) Buyer, in its sole discretion, may elect to waive any title defect(s). To the extent Seller is unable to deliver Defensible Title to Initial Leases covering at least 90% of the Intended Initial Net Acres, then either Party may terminate this Agreement upon written notice to the other Party delivered prior to Closing, and upon such termination neither Party shall have any further obligation or liability to the other Party hereunder.

(c) Notwithstanding any other provision hereof, Seller shall reserve from the assignment(s) of the Initial Leases and, if applicable, the Mattelin Leases, an overriding royalty interest in the Initial Leases and the Mattelin Leases equal to the positive difference, if any, between 20% and lease burdens existing as of the effective date of such assignment, including, without limitation, lessors’ royalties, overriding royalties, and similar burdens on or measured by production from the Initial Leases (“ Lease Burdens ”).

(d) If prior to Closing either Party notifies the other Party of any Initial Lease as to which Seller’s Net Revenue Interest is less than 80% (or such lower Net Revenue Interest with respect to such Lease as may be specified in Exhibit C ), proportionately reduced in the event Seller’s working interest in such Lease is less than 100% or the subject lease covers less than 100% of the mineral estate in the lands covered thereby, then, unless such defect is waived by Buyer or cured prior to Closing, the affected lease shall be excluded from the Initial Leases delivered at Closing and, at Seller’s election, either (i) the Purchase Price payable by Buyer at Closing shall be reduced by the price allocable to such excluded lease, or (ii) Seller shall assign to Buyer all of its right, title and interest in other oil and gas leases covering an approximately equivalent number of Net Acres in adjoining (to the extent possible) lands in Block A in substitution for the Net Acres in the affected leases. Except with respect to breaches of Seller’s special warranty of title, the provisions of this Section 1.1 shall be Buyer’s sole and exclusive remedies for Title Defects of which Buyer has actual knowledge prior to Closing. For purposes of the foregoing sentence, Buyer’s actual knowledge shall mean the actual knowledge of an executive officer of Buyer or of Conrad Woodland or Tracy Butzen.

(e) For purposes of this Agreement, “ Net Acres ” shall mean with respect to a lease (i) the undivided interest of Seller in the leasehold estate created by the applicable lease multiplied by (ii) the number of acres covered by the lease multiplied by (iii) the lessor’s percentage interest in the oil and gas mineral estate in the land covered by the lease.

Section 1.2 Access to Records .

(a) As used herein, “ Property Records ” means all of Seller’s lease files, abstracts, title opinions, title memoranda and contract files, insofar as they are directly related to the Initial Leases, including all leases, surface agreements and related contracts thereto; provided, however , that the Property Records shall not include Seller’s internal memoranda, notes, and correspondence.

(b) Seller shall make the Property Records available to Buyer at the offices of Seller during Seller’s normal business hours. Subject to the consent and cooperation of third parties, Seller will assist Buyer in Buyer’s efforts to obtain, at Buyer’s expense, such additional information from such third parties as Buyer may reasonably request. Buyer may inspect the Property Records and such additional information only to the extent that it may do so without violating any obligation of confidence or contractual commitment of Seller to a third party. Seller shall use commercially reasonable efforts, but at no cost or expense to Seller, to obtain the necessary consents to allow Buyer’s examination of any confidential information that is material to the transaction contemplated by this Agreement.

Section 1.3 On-Site Inspection .

(a) Seller hereby consents to Buyer conducting, prior to Closing and upon advance notice to Seller, at Buyer’s sole risk and expense, on-site inspections and an ASTM Phase One Environmental Assessment (the “ Environmental Assessment ”) of the Initial Acreage. In connection with the Environmental Assessment, Buyer agrees not to interfere with the normal operations on the Initial Acreage and agrees to comply with all requirements and safety policies of the operator. Seller shall be provided at least forty-eight (48) hours’ prior notice of any such inspection, and Seller’s representative(s) shall have the right to witness all such inspections. Buyer may not, without the prior written consent of Seller, conduct any borings or other invasive tests or examinations with respect to the Initial Acreage. The cost and expense of the Environmental Assessment shall be borne solely by Buyer. With respect to any samples taken in connection with the Environmental Assessment, Buyer shall take split samples, providing one of each such sample, properly labeled and identified, to Seller.

(b) If the Environmental Assessment identifies any condition or conditions on or of the Initial Leases which, in the aggregate, cause them to be not in compliance in any material respect with any applicable federal, state or local environmental laws (an “ Environmental Defect ”), Buyer shall notify Seller prior to the Closing of such alleged Environmental Defect. To be effective, such notice (the “ Environmental Defect Notice ”) must (i) be in writing, (ii) be received by Seller prior to Closing, (iii) describe the Environmental Defect in reasonable detail, including identification of the Initial Lease(s) affected thereby and the environmental laws allegedly violated; (iii) include Buyer’s proposed curative for such Environmental Defect; and (iv) include a copy of the Environmental Assessment or other report identifying the Environmental Defect prepared by a reputable environmental consultant with experience conducting environmental assessments covering oil and gas leases located in the State of Montana. Any matters that may otherwise constitute Environmental 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. Upon the receipt of an effective Environmental Defect Notice from Buyer, Seller shall have the option, but not the obligation, to attempt to cure such Environmental Defect at any time prior to the Closing, in which event Seller may, upon written notice to Buyer, extend the Closing by up to thirty (30) days, during which period Seller shall endeavor to cure such Environmental Defect(s). Alternatively, if Buyer and Seller so agree in writing, Seller may elect to cure the Environmental Defect post-Closing, at Seller’s expense, in which event the Closing shall not be extended and Seller shall, at Seller’s expense, use commercially reasonable best efforts post-Closing to cure the Environmental Defect in a timely manner. If Seller elects to attempt to cure an Environmental Defect, Seller may implement the lowest cost reasonable effective remedy for such Environmental Defect which is consistent with applicable environmental laws, taking into account that non-permanent remedies may be the most cost effective curative reasonably available. Unless (i) Seller cures such Environmental Defects prior to Closing (as Closing may be extended as provided above); (ii) Seller and Buyer agree in writing that such Environmental Defects may be cured post-Closing, as provided above; or (iii) Buyer waives such Environmental Defect(s), then the lease(s) affected thereby shall be excluded from this Agreement and the Purchase Price shall be reduced by an amount equal to the price payable for such lease pursuant to Section 1.6(a); provided, however , that either Party may, upon written notice to the other, terminate this Agreement if, after giving effect to such exclusions, the remaining Initial Leases cover less than 85% of the Intended Initial Net Acres.

(c) Buyer hereby RELEASES and INDEMNIFIES and SHALL DEFEND AND HOLD HARMLESS Seller and its respective members, managers, employees, agents, representatives, contractors, successors, and assigns) (the “ Indemnified Parties ”) from and against any and all claims, demands, actions, causes of action, suits, and other legal proceedings, judgments, assessments, damages, penalties, fines, costs, and expenses (including reasonable attorneys’ fees) (collectively, “ Claims ”) arising from Buyer’s inspection of the Initial Acreage, including, without limitation, Claims for personal injuries to or death of any person or damage to the property of any person, except for injuries, death or damage to property caused by the gross negligence or willful misconduct of the Indemnified Parties. THE FOREGOING INDEMNITY INCLUDES, AND THE PARTIES INTEND IT TO INCLUDE, AN INDEMNIFICATION OF THE INDEMNIFIED PARTIES FROM AND AGAINST CLAIMS ARISING OUT OF OR RESULTING, IN WHOLE OR PART, FROM THE CONDITION OF THE INITIAL ACREAGE OR THE SOLE, JOINT, COMPARATIVE, OR CONCURRENT NEGLIGENCE (BUT NOT GROSS NEGLIGENCE OR WILLFUL MISCONDUCT) OR STRICT LIABILITY OF, ANY OF THE INDEMNIFIED PARTIES.

Section 1.4 Confidentiality . Buyer shall keep any data or information acquired by Buyer in the course of its due diligence examination (including, without limitation, information acquired pursuant to its review of the Property Records and its conduct of the Environmental Assessment) and any reports or results generated from such due diligence examination (the “ Due Diligence Materials ”) strictly confidential and shall not disclose any of such data, information or results to any governmental authority or other third party unless required by law or regulation and then only after written notice to Seller of the determination of the need for disclosure. If Buyer becomes legally compelled to disclose any of the Due Diligence Materials, Buyer shall use all commercially reasonable efforts to provide Seller with notice sufficiently prior to any such disclosure so as to allow Seller, at Seller’s expense, to file any protective order, or seek any other remedy, as it deems appropriate under the circumstances. Buyer shall use the Due Diligence Materials only in connection with the transactions contemplated by this Agreement. If this Agreement is terminated prior to the Closing, Buyer shall, upon Seller’s request, deliver the Due Diligence Materials to Seller, which Due Diligence Materials shall become the sole property of Seller.

Section 1.5 Disclaimer . Except for the representations and warranties contained in this Agreement, Seller makes no warranty or representation of any kind as to the Property Records or any information contained therein. Buyer agrees that any conclusions drawn from the Property Records shall be the result of its own independent review and judgment.

Section 1.6 Purchase Price for Initial Leases .

(a) Purchase Price . The purchase price payable by Buyer to Seller for the Initial Leases (the “ Purchase Price ”) shall be an amount equal to the sum of the following: (a) with respect to those Initial Leases acquired by Seller prior to the Effective Date, the purchase price shall be $175 per Net Acre, multiplied by the number of Net Acres covered by such Initial Leases, as set forth in Exhibit C ; and (b) with respect to those Initial Leases acquired by Seller between the Effective Date and the Closing Date, the purchase price shall be (i) $175 per Net Acre multiplied by the number of Net Acres covered by such Initial Leases, or (ii) if greater, the lease bonus, first year rental payment and other acquisition costs actually paid by Seller for such Initial Leases plus any additional actual costs paid by the Seller to acquire the Initial Leases for each Net Acre, provided that Seller shall have obtained Buyer’s approval of the costs described in this clause (ii) above. The Purchase Price shall be paid at Closing, as defined herein, by wire transfer of immediately available funds. The Purchase Price shall reimburse Seller for lease bonus and the first year rental payments paid by Seller for the Initial Leases. Buyer shall assume, and bear responsibility for payment of, all other obligations under such Initial Leases.

(b) Closing Statement . At least three (3) business days prior to Closing, Seller shall deliver to Buyer a closing statement (“ Closing Statement ”) setting out the calculation of the Purchase Price, including, with respect to each Initial Lease, the number of Net Acres covered thereby and the purchase price payable therefor.

Section 1.7 Conditions Precedent to Closing .

(a) Seller’s Conditions . The obligations of Seller at Closing are subject, at the option of Seller, to the satisfaction or waiver at or prior to Closing of the following conditions precedent:

(i) All representations and warranties of Buyer contained in Article VIII shall be true and correct in all material respects on and as of the Closing Date, and Buyer shall have performed and satisfied all covenants and agreements required by this Agreement to be performed and satisfied by Buyer at or prior to the Closing in all material respects;

(ii) Buyer stands ready, willing and able to Close with Seller;

(iii) No order has been entered by any court or governmental agency having jurisdiction over the Parties or the subject matter of this Agreement that restrains or prohibits the transactions contemplated by this Agreement that remains in effect on the Closing Date; and

(iv) Seller has not given notice of termination pursuant to Sections 1.1(b) or 1.3(b).

(b) Buyer’s Conditions . The obligations of Buyer at the Closing are subject, at the option of Buyer, to the satisfaction or waiver at or prior to Closing of the following conditions precedent:

(i) All representations and warranties of Seller contained in Article VII shall be true and correct in all material respects on and as of the Closing Date, and Seller shall have performed and satisfied all covenants and agreements required by this Agreement to be performed and satisfied by Seller at or prior to the Closing in all material respects;

(ii) Seller stands ready, willing and able to Close with Buyer;

(iii) No order has been entered by any court or governmental agency having jurisdiction over the Parties or the subject matter of this Agreement that restrains or prohibits the purchase and sale contemplated by this Agreement and that remains in effect at the time of Closing; and

(iv) Seller has not given notice of termination pursuant to Sections 1.1(b) or 1.3(b).

Section 1.8 Closing .

(a) Closing Date . Unless extended pursuant to Section 1.3(b), Closing of the purchase and sale of the Initial Leases (the “ Closing ”) shall occur at a mutually agreeable time and place within thirty (30) days following the Effective Date. The date on which Closing occurs is referred to herein as the “ Closing Date .”

(b) Closing Deliveries . At Closing, the following shall occur:

(i) Buyer shall deliver to Seller, by wire transfer of immediately available funds, the Purchase Price for the Initial Leases;

(ii) Buyer and Seller shall execute and acknowledge, and Seller shall deliver to Buyer, an Assignment and Bill of Sale, substantially in the form of Exhibit D attached hereto (the “ Assignment ”) in sufficient counterparts to facilitate recording;

(iii) Buyer and Seller shall execute such governmental assignment forms as may be necessary to effect the assignment of the Initial Leases to Buyer; and

(iv) Seller shall execute and deliver to Buyer a certificate of Seller’s non-foreign status and certifying that Seller is not subject to withholding under Section 1445 of the Internal Revenue Code, as amended.

Section 1.9 Termination . This Agreement may be terminated prior to Closing, upon written notice to the other Party, in accordance with the following provisions:

(a) By mutual consent of Buyer and Seller;

(b) By Buyer or Seller, as the case may be, pursuant to Sections 1.1(b) or 1.3(b);

(c) By Seller, if Seller’s conditions set forth in Section 1.7(a) are not satisfied through no fault of Seller, or are not waived by Seller, as of the Closing Date;

(d) By Buyer, if Buyer’s conditions set forth in Section 1.7(b) are not satisfied through no fault of Buyer, or are not waived by Buyer, as of the Closing Date; or

(e) By Seller, if Closing has not occurred within thirty (30) days following the Effective Date, as the Closing date may be extended pursuant to Section 1.3(b), through no fault of Seller, provided, Seller is not in material default under this Agreement and is ready, willing and able to Close.

Section 1.10 Liabilities Upon Termination .

(a) Buyer’s Default . Subject to Section 1.10(c), if Closing does not occur because (i) Buyer wrongfully fails to tender performance at Closing or otherwise materially breaches this Agreement prior to Closing, or (ii) Seller terminates this Agreement as of right pursuant to Section 1.9(e), and if Seller is not in material default under this Agreement and is ready, willing and able to Close, Seller shall be entitled to an amount equal to $175 multiplied by the number of Net Acres covered by the Initial Leases. Buyer’s failure to Close shall not be considered wrongful if Buyer’s conditions under Section 1.7(b) are not satisfied through no fault of Buyer and are not waived by Buyer.

(b) Seller’s Default . Subject to Section 1.10(c), if Closing does not occur because Seller wrongfully fails to tender performance at Closing or otherwise materially breaches this Agreement prior to Closing, and if Buyer is not in material default under this Agreement and is ready, willing and able to Close, Buyer shall retain all of its legal and equitable remedies for Seller’s breach of this Agreement including, without limitation, specific performance. Seller’s failure to close shall not be considered wrongful if Seller’s conditions under Section 1.7(a) are not satisfied through no fault of Seller and are not waived by Seller.

(c) Other Termination . If this Agreement is terminated pursuant to Sections 1.9(a) or 1.9(b), each Party shall release the other Party from any and all liability for termination of this Agreement.

Section 1.11 In-Process Leases . Certain oil and gas leases covering lands in Block A, as described in Exhibit H (the “ In-Process Leases ”), have been signed by Seller and delivered to the Bureau of Indian Affairs (“ BIA ”) for execution and issuance, but as of the Effective Date, have not been issued to Seller. The Parties agree that Exhibit H may be supplemented from time to time by Seller up until two (2) business days prior to Closing. During the period between the Effective Date and the commencement of drilling of the First Test Well (the “ Substitution Period ”), Seller shall notify Buyer from time to time in writing as In-Process Leases are issued to Seller by the BIA, such notices to be provided by Seller within five (5) business days after Seller’s receipt of the issued Lease. Buyer may, from time to time, deliver to Seller during the Substitution Period a written notice (“ Substitution Notice ”) to elect the substitution of one or more of the In-Process Leases (a “ Substitution Lease ”) for Initial Leases covering approximately the same number of Net Acres (the “ Replaced Lease(s) ”). In the event a Substitution Notice is delivered to Seller prior to Closing, (a) the Substitution Lease(s) described therein shall be deemed for all purposes to be Initial Lease(s), and shall be included in the assignment of the Initial Leases delivered at Closing, and (b) the Replaced Lease(s) shall be deemed to be included in the Remaining Acreage, as defined herein. In the event a Substitution Notice is delivered during the period between Closing and the conclusion of the Substitution Period, then within ten (10) business days following Seller’s receipt of a timely delivered Substitution Notice, (x) Buyer shall reassign the Replaced Lease(s) to Seller, free and clear of all liens, claims and encumbrances arising by, through or under Buyer, and such Replaced Lease(s) shall thereafter be deemed to be included in the Remaining Acreage; and (y) Seller shall assign the Substitution Lease(s) to Buyer, by an Assignment substantially in the form of Exhibit D , subject to Seller’s retained overriding royalty interest, if applicable, as provided in Section 1.1(c), and the Substitution Lease(s) shall thereafter be deemed to be included in the Initial Leases. If at the conclusion of the Substitution Period, (i) the number of Net Acres covered by the Substitution Leases exceeds the number of Net Acres covered by the Replaced Leases (a “ Net Acre Surplus ”), then within ten (10) days after the end of the Substitution Period, Buyer shall pay Seller an amount equal to the Net Acre Surplus multiplied by $175, or (ii) the number of Net Acres covered by the Substitution Leases is less than the number of Net Acres covered by the Replaced Leases (the “ Net Acre Deficit ”), then within ten (10) days after the end of the Substitution Period, Seller shall pay Buyer an amount equal to the Net Acre Deficit multiplied by $175.

Section 1.12 Option to Exclude River Acreage . Notwithstanding any other provision hereof, Seller shall have the option, upon written notice delivered to Buyer at any time prior to the first anniversary of the Closing Date to exclude from this Agreement up to 1000 acres of Block A Acreage located within designated spacing units along the riparian boundaries of the Missouri River or the Big Muddy River. In the event Seller so excludes such acreage it shall substitute an approximately equal number of Net Acres in Block A, in the same manner as provided in Section 1.11 above with regard to Substitution Leases.

Section 1.13 Option to Purchase Additional Acreage .

(a) Subject to the same terms of this Agreement with respect to the purchase of the Initial Leases and except as otherwise indicated herein, in addition to the Initial Leases, Seller hereby grants to Buyer the option (the “ Option ”), but not the obligation, to purchase all of Seller’s leasehold interest in the remaining acreage in Block A (“ Remaining Acreage ”), which shall not exceed an additional 20,000 Net Acres within Block A, plus an allowance of up to 320 Net Acres, in the aggregate, if necessary to include all the Net Acres in any particular section (the “ Option Allowance ”). Notwithstanding the foregoing, if Seller’s Remaining Acreage in Block A prior to Buyer’s exercise of the Option exceeds 20,000 Net Acres, Seller shall designate the 20,000 Net Acres and the Option Allowance subject to the Option and shall notify Buyer of such designation within five (5) business days after Seller’s receipt of Buyer’s Option Exercise Notice, as herein defined. In the event Buyer exercises the Option, the lands as to which Buyer exercises the Option shall be referred to herein as the “ Optional Acreage ” (the Initial Acreage, the Mattelin Leases (if acquired, as provided in Section 5.4) and the Optional Acreage being collectively referred to herein as the “ Block A Purchased Acreage ”).

(b) The purchase price for the Optional Acreage (the “ Option Price ”) shall be (a) with respect to those leases covering Optional Acreage (“ Option Leases ”) acquired by Seller prior to the Effective Date, the purchase price shall be $225 per Net Acre, multiplied by the number of Net Acres comprising the Optional Acreage (the “ Option Acres ”); and (b) with respect to those Option Leases acquired by Seller between the Effective Date and the Closing Date, the purchase price shall be (i) $225 per Net Acre multiplied by the number of Net Acres covered by such Option Leases, or (ii) if greater, the lease bonus, first year rental payment and other acquisition costs actually paid by Seller for such Option Leases plus any additional actual costs paid by the Seller to acquire the Option Leases, provided that Seller shall have obtained Buyer’s approval of the costs described in this clause (ii) above.

(c) The Option may be exercised by Buyer upon written notice (the “ Option Exercise Notice ”) delivered to Seller within ten (10) business days following the date which is 120 days after (i) the date on which initial perforation or fracture stimulation, as applicable, of the Second Test Well is completed or, (ii) if such Well is not completed as a producing well, the date on which drilling operations for such well have ceased and the rig is ready to be moved off the location (the “ Option Termination Date ”). If the Option is not timely exercised, it shall automatically expire on the Option Termination Date.

(d) If the Option is timely exercised, then within ten (10) business days following the exercise of the Option, Seller shall deliver to Buyer a closing statement (“ Option Closing Statement ”) setting out (i) with respect to each lease included in the Optional Acreage (each, an “ Option Lease ”), the number of Option Acres covered thereby, and (ii) the calculation of the Option Price to be paid by Buyer for the Optional Acreage. Within ten (10) business days after receipt of the Option Closing Statement, (i) Buyer shall pay the Option Price to Seller by wire transfer of immediately available funds; and (ii) Seller shall execute, acknowledge and deliver to Buyer an Assignment of Seller’s interest in the Optional Acreage, such Assignment to be substantially in the form of Exhibit D attached hereto. The date on which closing of the purchase pursuant to the Option occurs is referred to herein as the “ Option Closing Date .”

(e) Notwithstanding any other provision hereof, Seller shall reserve from the assignment(s) of the Option Leases an overriding royalty interest in such Option Leases equal to the positive difference, if any, between 20% and Lease Burdens.

Section 1.14 Sales by Buyer of Block A Purchased Acreage . Buyer shall not sell, assign, transfer, exchange or otherwise transfer or dispose of all or any portion of Buyer’s right, title or interest in and to the Block A Purchased Acreage (including, without limitation, any indirect transfer by merger of Buyer with or into a third party, or sale of all or substantially all of the issued and outstanding shares of Buyer to a third party) (a “ Divestiture ”) at any time prior to Seller’s receipt of a Production Notice with respect to the Second Test Well, as defined herein, or if the Second Test Well is not completed as a producing well, the date on which drilling operations for such well have ceased and the rig is ready to be moved off the location (the “ Restricted Period ”), without Seller’s prior written consent. If during the Restricted Period Buyer enters into an agreement with respect to a Divestiture (a “ Divestiture Agreement ”) for which the prior written consent of Seller is obtained, then upon consummation of such Divestiture, Buyer shall pay to Seller an amount equal to 33.3% of the positive difference, if any, between (i) the purchase price and other consideration received by Buyer in consideration for the sale of the Buyer’s interest in the Block A Purchased Acreage so transferred in the permitted Divestiture; and (ii) the Purchase Price, or Option Price, as applicable, paid by Buyer to Seller for such divested acreage; provided that such Divestiture shall be subject to, and Seller shall at all times retain, its rights to exercise the participation options provided in Article IV herein and any and all right, title and interest acquired by Seller through exercise of such options and any such interests of the Seller owned or exercisable by Seller shall not be included in any sale by Buyer pursuant to this Section 1.14 unless otherwise previously approved and agreed to in writing by Seller. If during the Restricted Period Buyer enters into a Divesture Agreement without the prior written consent of Seller, Buyer shall immediately remit to Seller 100% of the proceeds and other consideration received by Buyer from such Divestiture.

Section 1.15 Tag-Along Right . In the event an unrelated third party purchaser (the “ Prospective Purchaser ”) makes an offer (the “ Divestiture Offer ”) to Buyer to acquire all or any portion of Buyer’s right, title or interest in and to all or any portion of the Block A Purchased Acreage (the portion of the Block A Purchased Acreage subject to the Divestiture Offer being referred to herein as the “ Divestiture Lands ”) during or after the Restricted Period, Buyer shall immediately deliver to Seller a notice setting forth the terms and conditions of the Divestiture Offer, including a true and complete copy of any offer letters, proposals, agreements, schedules, exhibits or other materials relating thereto. Upon receipt of the notice of the Divestiture Offer from Buyer, Seller shall have ten (10) business days to elect, upon written notice to Buyer, to participate in the Divestiture Offer and to sell to the Prospective Purchaser all or a portion of the Divestiture Lands then owned by Seller under the same terms and conditions (the “ Tag-Along Right ”). In the event Seller elects to exercise the Tag-Along Right, the Prospective Purchaser shall be required to purchase all of Seller’s interest in the Divestiture Lands under the same terms and conditions as it offered to purchase Buyer’s interest therein; provided, however , that if the Prospective Purchaser proposed to purchase only an undivided portion of Buyer’s interest in the Divestiture Lands (the “ Undivided Divestiture Interest ”) and such Prospective Purchaser is unwilling to purchase a greater undivided interest in the Divestiture Lands, then the Prospective Purchaser shall purchase (i) from Buyer 66.7% of the Undivided Divestiture Interest; and (ii) from Seller, 33.3% of the Undivided Divestiture Interest. Notwithstanding any other provision hereof, this Section 1.13 shall not apply to a transfer, exchange or disposition arising from any indirect transfer (x) by merger of Buyer with or into an affiliate of Buyer or sale or other transfer of all or substantially all of the issued and outstanding shares of Buyer to an affiliate of Buyer; or (y) by merger of Buyer with or into third party or sale or other transfer of all or substantially all of the issued and outstanding shares of Buyer to a third party, provided that the Block A Purchased Acreage does not, at the time of such transfer, comprise substantially all of the assets of Buyer. For purposes of the foregoing sentence the Block A Purchased Acreage shall be deemed to comprise substantially all of the assets of Buyer if the reasonably determined value thereof comprises 90% or more of the aggregate value of all of Buyer’s assets.

ARTICLE II.

TITLE MATTERS

Section 2.1 Certain Definitions . As used in this Agreement, each of the following terms has the meaning provided below:

(a) “ Defensible Title ” means, with respect to the Block A Purchased Acreage, such beneficial, legal and record title ownership of the units, leases and lands related thereto that, subject to and except for Permitted Encumbrances as defined in Section 2.1(b):

(i) entitles Seller to a share of the hydrocarbons produced, saved and marketed from each lease included in the Block A Purchased Acreage (subject to any depth limitations specified in the subject lease) and throughout the duration of the productive life of such lease, after satisfaction of all royalties, overriding royalties, nonparticipating royalties, net profits interests or other similar burdens on or measured by production of hydrocarbons (a “ Net Revenue Interest ”), of not less than the Net Revenue Interest share shown in Exhibit C with respect to such lease except as otherwise specifically set forth in such Exhibit;

(ii) entitles Seller to the number of Net Acres covered by a lease as set forth in the Closing Statement, or the Option Closing Statement, as applicable for that lease; and

(iii) is free and clear of all liens and encumbrances.

In addition, title to any lease comprising the Initial Acreage or Optional Acreage shall not be considered to be Defensible Title unless (y) an Environmental Assessment applicable to the lease has been issued by the Bureau of Indian Affairs in compliance with the National Environmental Policy Act, to the extent applicable; and (z) if the lease covers allottee lands, the consent from the requisite percentage of the mineral interest owned by allottees in lands covered by the lease has been obtained, pursuant to Pub. L. 106-462 (114 Stat. 1992).

(b) “ Permitted Encumbrances ” means the following:

(i) lessors’ royalties, overriding royalties, net profits interests, production payments, reversionary interests and similar burdens if the net cumulative effect of such burdens does not operate to reduce the Seller’s Net Revenue Interest, on a lease-by-lease basis, below 80% (or such lower Net Revenue Interest with respect to a Lease as may be specified in Exhibit C ), proportionately reduced in the event Seller’s working interest in the subject lease is less than 100% or the subject lease covers less than 100% of the mineral estate in the lands covered thereby;

(ii) all rights to consent by, required notices to, filings with, or other actions by federal, state or local governmental bodies, in connection with the conveyance of the applicable lease if the same are customarily sought after Closing;

(iii) rights of reassignment contained in any agreement providing for reassignment upon the surrender or expiration of any option or lease;

(iv) easements, rights of way, servitudes, permits, surface leases and other rights with respect to surface operations, on, over or in respect of any of the Initial Leases or the Option Leases or any restriction on access thereto that do not materially interfere with the operation of the affected lease;

(v) liens created under deeds of trust, mortgages and similar instruments by the lessor under a lease covering the lessor’s surface and mineral interests in the land covered thereby which would customarily be accepted in taking oil and gas leases or purchasing undeveloped oil and gas leases and for which the lessee would customarily seek a subordination of such lien to the oil and gas leasehold estate prior to conducting drilling activities on the lease;

(vi) liens for taxes or assessments not yet due and delinquent or, if delinquent, that are being contested in good faith in the normal course of business;

(vii) such Title Defects as Buyer has waived;

(viii) minor defects and irregularities in title or other restrictions that are of the nature customarily accepted by prudent purchasers of oil and gas properties and do not materially affect the value of any lease encumbered thereby or materially impair the ability of the lessee to use any such property in its operations; provided the effect thereof does not operate to reduce the Net Revenue Interest in such lease below 80% (or such lower Net Revenue Interest with respect to a lease as may be specified in Exhibit C ), proportionately reduced in the event Seller’s working interest in the subject lease is less than 100% or the subject lease covers less than 100% of the mineral estate in the lands covered thereby; and

(ix) Area of Mutual Interest Agreement, dated as of March 12, 2009, by and between Fort Peck Energy Company and the Assiniboine and Sioux Tribes of the Fort Peck Indian Reservation (the “ Fort Peck AMI Agreement ”), and the terms and provisions of the Initial Leases.

(c) “ Title Defect ” means any lien, encumbrance, adverse claim, default, expiration, failure, defect in or objection to real property title, other than Permitted Encumbrances, that alone or in combination with other defects renders Seller’s title to be less than Defensible Title.

Section 2.2 Title Defect .

(a) For a period of twelve (12) months following the Effective Date (the “ Title Examination Period ”), Buyer shall have the right to notify Seller in writing of any Title Defects identified by Buyer that cause Seller to have less than Defensible Title to the Block A Purchased Acreage. To be effective, such notice (the “ Title Defect Notice ”) must (i) be in writing, (ii) be received by Seller prior to the expiration of the Title Examination Period, (iii) describe the Title Defect in reasonable detail (including any alleged deficiency in the Net Revenue Interest or any alleged Acreage Deficiency), (iv) identify the specific leases affected by such Title Defect, (v) include the value of such Title Defect as determined by Buyer in good faith; provided that such value shall in no event exceed the amount paid by Buyer therefor; and (vi) include a copy of a drill site title opinion rendered by an attorney licensed in the state of Montana (such opinion to be prepared at Buyer’s cost and expense) identifying the Title Defect. Any matters that may otherwise constitute Title Defects, but of which Seller has not been specifically notified by Buyer in accordance with the foregoing, shall be deemed to have been waived by Buyer for all purposes.

(b) Upon the receipt of an effective Title Defect Notice from Buyer, Seller shall have the option, but not the obligation, to attempt to cure such Title Defect(s). The cost of such cure or attempted cure of such Title Defect shall be borne by Seller.

(i) With respect to each Title Defect that consists of an Acreage Deficiency, as defined below, that is not cured within 180 days following receipt of the Title Defect Notice (the “ Cure Period ”), Seller shall, at Seller’s election, either (i) refund to Seller an amount equal to the price per net acre paid by Seller with respect to the affected lease, multiplied by a fraction, the numerator of which is the difference between the number of Net Acres to have been assigned by Seller to Buyer pursuant hereto and for which Buyer paid (“ Intended Acres ”) and the actual Net Acres so assigned (“ Actual Acres ”) (such difference being referred to herein as the “ Acreage Deficiency ”), and the denominator of which is the Intended Acres; or (ii) assign to Buyer additional Block A leases, or portions thereof, for which Seller has Defensible Title and reasonably acceptable to Buyer, covering Net Acres at least equal to the Acreage Deficiency.

(ii) With respect to each Title Defect that is not cured prior to expiration of the Cure Period that consists of the Net Revenue Interest assigned to Buyer in the affected lease being less than 80% (or such lower Net Revenue Interest with respect to a lease as may be specified in Exhibit C ), proportionately reduced to the extent that Seller assigned less than the entire working interest in the affected lease or the affected lease covers less than the entire mineral estate, (x) Buyer may, at Buyer’s election, waive the Title Defect, in which case Buyer shall accept the lease without adjustment or refund of the Purchase Price paid therefor; (y) Buyer may, at Buyer’s election, reject the affected lease, in which case Buyer shall reassign the affected lease to Seller, free and clear of all liens, claims and encumbrances arising by, through or under Buyer, and Seller shall refund to Buyer an amount equal to the Purchase Price paid by Buyer for such lease; or (z) Seller may remove the affected lease from the Initial Leases to be delivered at Closing and instead assign to Buyer replacement Block A leases, or portions thereof, for which Seller has Defensible Title and reasonably acceptable to Buyer, covering Net Acres at least equal to the Net Acres covered by the affected lease and having a Net Revenue Interest of at least 80% (or such lower Net Revenue Interest with respect to the affected lease as may be specified in Exhibit C ).

Section 2.3 Consents . Sellers shall use commercially reasonable efforts to obtain all required consents to assignment of the Initial Leases and, if applicable, the Option Leases. Except for consents and approvals which are customarily obtained post-Closing (including without limitation federal, state or other governmental approvals), if a consent to assign any lease has not been obtained as of the Closing Date, with respect to the Initial Leases, or the Option Closing Date, with respect to the Option Leases, as applicable, then at Buyer’s election, the affected lease(s) shall be (a) conveyed to Buyer and the respective consents obtained by Buyer post-Closing and Buyer shall assume the risk of not obtaining such consents (provided that after Closing Seller shall continue to cooperate with Buyer to obtain such consent(s), or (b) held by Seller on behalf of Buyer until such consent(s) have been obtained; provided, however , that if such consents are not obtained within 120 days after the Closing Date or, with respect to the Optional Acreage, within 120 days after the Option Closing Date, then Seller may retain the affected leases and refund Buyer the purchase price paid therefor.

Section 2.4 Special Warranty of Title; Subrogation of Warranties . The assignments delivered by Seller to Buyer pursuant hereto shall provide that, subject to Permitted Encumbrances, Seller shall warrant Defensible Title to the leases free and clear of liens, claims and encumbrances arising by, through or under Seller, but not otherwise. Sellers shall grant to Buyer, its successors and assigns, full power and right of substitution and subrogation in and to all covenants, indemnities and warranties (including warranties of title) given or made by preceding owners, vendors, or others with respect to the subject leases. Buyer acknowledges and agrees that, except with respect to breaches of Seller’s special warranty of title, Buyer’s sole remedy for any defect of title, including any Title Defect, with respect to any of the leases assigned to it shall be as set forth in Section 2.2.

Section 2.5 Title Benefit . If during the Title Examination Period Seller determines that the Actual Acres covered by a lease exceed the Intended Acres (a “ Title Benefit ”) with respect to a lease assigned by Seller to Buyer, Seller shall notify Buyer in writing prior to the expiration of the Title Examination Period. Within thirty (30) days following notification of the Title Benefit, Buyer shall pay Seller an amount equal to the amount by which Actual Acres exceed Intended Acres, multiplied by the purchase price per acre paid by Buyer for the affected lease.

ARTICLE III.

DRILLING COMMITMENT

Section 3.1 Initial Test Wells .

(a) Subject to Force Majeure, as defined herein, Buyer commits to (i) drill two (2) initial test wells (each, a “ Test Well ” and, collectively, the “ Test Wells ”) on the Initial Acreage or the Mattelin Leases, each Test Well (or a Substitute Well therefor) to be drilled to a depth sufficient to test the Middle Bakken and Three Forks formations (“ Objective Depth ”) and (ii) to run three (3) thirty foot (30’) core barrels for each Test Well from the top of the Middle Bakken through the top 18 meters, approximately, of the Three Forks formation. Seller shall have the right to review any recovered core, but such recovered core shall be jointly owned by Buyer and Seller and Buyer shall retain possession of such recovered core, as Operator of the Test Wells. Buyer shall use commercially reasonable best efforts to drill each of the two (2) initial Test Wells a minimum lateral length of at least 4,500 feet and comply with the technical requirements set forth on Exhibit G attached hereto. In the event Buyer completes either or both of the Test Wells, Buyer shall perform multi-stage fracture stimulation of such completed Test Well(s); provided, however , that Buyer shall not be required to conduct such fracture stimulation if a reasonable, prudent operator would not conduct such operation for fear of placing the hole, life or property in jeopardy.

(b) Subject to Force Majeure, drilling of the first Test Well on the Initial Acreage or the Mattelin Leases (the “ First Test Well ”) shall be commenced before the later to occur of (i) October 1, 2011 or (ii) three (3) months following receipt of a drilling permit for such well; provided that Buyer shall use commercially reasonable efforts to cooperate with Seller in obtaining a drilling permit for the First Test Well as soon as possible after the Effective Date.

(c) Subject to Force Majeure, drilling of the second well on the Initial Acreage or the Mattelin Leases (the “ Second Test Well ”) shall be commenced before the later to occur of (i) December 31, 2011 or (ii) three (3) months following receipt of a drilling permit for such well; provided that Buyer shall use commercially reasonable efforts to cooperate with Seller to obtain a drilling permit for the Second Test Well as soon as possible after the completion of drilling of the First Test Well.

(d) At least 75% of the surface acres included in any unit in which the First Test Well or the Second Test Well is drilled shall be comprised of Block A Purchased Acreage.

(e) In the event Buyer fails to timely commence either the First Test Well or the Second Test Well within the respective time periods provided above, or thereafter fails to drill either Test Well (or a Substitute Well therefor) to the Objective Depth, such failure shall be deemed a material breach of this Agreement and, in the event of such breach, Seller may, upon written notice to Buyer, terminate this Agreement and, upon such termination:

(i) If this Agreement is terminated due to Buyer’s failure to timely commence the First Test Well or failure to drill the First Test Well (or a Substitute Well therefor) to the Objective Depth, then Buyer shall immediately relinquish and reassign to Seller all right, title and interest in and to the Initial Leases and the Mattelin Leases, free and clear of all liens, claims or encumbrances arising by, through or under Buyer, provided however , that Buyer shall retain all interest in the Hull Lease, as defined herein.

(ii) If Buyer timely drills the First Test Well (or a Substitute Well therefor) to the Objective Depth but this Agreement is terminated due to Buyer’s failure to timely commence the Second Test Well or failure to drill the Second Test Well (or a Substitute Well therefor) to the Objective Depth, then Buyer shall immediately relinquish and reassign to Seller all right, title and interest in and to the Initial Leases and the Mattelin Leases, free and clear of all liens, claims or encumbrances arising by, through or under Buyer, provided, however , that Buyer shall retain (y) its interest in the First Test Well and the Initial Leases and the Mattelin Leases insofar and only insofar as they are included in the spacing unit for the First Test Well, and (z) all interest in the Hull Lease, as defined herein, subject to Seller’s overriding royalty interest and participation rights therein pursuant to Section 3.1(h), if applicable.

(iii) If, prior to reaching the Objective Depth, a Test Well encounters mechanical difficulties, heaving shale, rock salt, excessive saltwater flow, practicably impenetrable formations or other conditions in the hole that would cause a reasonably prudent operator under the same or similar circumstances to discontinue drilling and to abandon such Test Well, Buyer shall have the right, within one hundred twenty (120) days after the rig was released from the last operation on such Test Well, to commence drilling of a substitute well therefor (“ Substitute Well ”) at a location selected by Buyer on the Initial Leases. If a Substitute Well is timely commenced and drilled to the Objective Depth, then such Substitute Well shall in all respects be considered as if it were the Test Well for which it is substituted.

(f) In the event drilling permits for the First Test Well are not obtained, whether due to Force Majeure or otherwise, within twelve (12) months after the Closing Date, then Seller may, upon written notice to Buyer terminate this Agreement, provided that the failure to obtain such permit is not as a result of a material breach of this Agreement by Seller. In the event drilling permits for the First Test Well are not obtained, whether due to Force Majeure or otherwise, within 24 months after the Closing Date, then Buyer may, upon written notice to Seller terminate this Agreement, provided that the failure to obtain such permit is not as a result of a material breach of this Agreement by Buyer. Within fifteen (15) days after either such termination, (i) Buyer shall reassign to Seller all right, title and interest in and to the Initial Leases and the Mattelin Leases, free and clear of all liens, claims or encumbrances arising by, through or under Buyer, provided however , that Buyer shall retain all interest in the Hull Lease, as defined herein, and (ii) if the failure to obtain such drilling permits is the result of Force Majeure or Seller’s material breach of this Agreement, Seller shall refund the Purchase Price to Buyer, by wire transfer of immediately available funds.

(g) In the event drilling permits for the Second Test Well are not obtained, whether due to Force Majeure or otherwise, within six (6) months after the date on which the drilling permit for the First Test Well is obtained, then Seller may, upon written notice to Buyer, terminate this Agreement, provided that the failure to obtain such permit is not as a result of a material breach of this Agreement by Seller. Within fifteen (15) days after such termination, (i) Buyer shall reassign to Seller all right, title and interest in and to the Initial Leases and the Mattelin Leases, free and clear of all liens, claims or encumbrances arising by, through or under Buyer; provided, however , that Buyer shall retain its interest in the First Test Well and the Initial Leases and the Mattelin Leases insofar and only insofar as they are included in the spacing unit for the First Test Well; and (ii) if the failure to obtain such drilling permits is the result of Force Majeure or Seller’s material breach of this Agreement, Seller shall refund the Purchase Price to Buyer, by wire transfer of immediately available funds; provided, however , that Seller shall retain (y) that portion of the Purchase Price attributable to the Initial Leases and the Mattelin Leases insofar and only insofar as they are included in the spacing unit for the First Test Well, and (z) all interest in the Hull Lease, as defined herein, subject to Seller’s overriding royalty interest and participation rights therein pursuant to Section 3.1(h), if applicable.

(h) Notwithstanding any other provision hereof, the Parties agree that for the purposes of this Section 3.1, either or both of the Test Wells may be drilled on acreage comprised in whole, or in part, of that certain oil and gas lease owned by Buyer, dated July 10, 2006, recorded at Reception No. 371647 of the records of Roosevelt County, Montana, by and between Elizabeth M. Hull, as lessor, and East Fort Peck Exploration, as lessee, insofar as it covers approximately 960 acres in Section 3, Township 28 North, Range 54 East, and Section 35, Township 29 North, Range 54 East, Roosevelt County, Montana (the “ Hull Lease ”), and such Hull Lease shall be deemed to be included in the Initial Acreage for the purposes of this Section 3.1. In the event that either or both of the Test Wells is drilled on lands comprised in whole or in part of the Hull Lease, then (i) Seller’s Test Well participation option pursuant to Section 4.1(a) and its Acreage Participation Option pursuant to Section 4.1(b) shall extend to and apply to the Hull Lease; (ii) in the event Buyer exercises any such participation option, the Tag-Along .Right pursuant to Section 1.15 shall apply to the Hull Lease, and (iii) Buyer shall assign to Seller an overriding royalty interest in and to the Hull Lease equal to the positive difference, if any, between 20% and Lease Burdens thereon existing as of the Effective Date, in each case as though the Hull Lease were an Initial Lease. For the avoidance of doubt, the Hull Lease shall not be deemed to be an Initial Lease, but shall be treated in the same manner as an Initial Lease to the extent expressly so provided in this Section 3.1(h).

Section 3.2 Force Majeure .

(a) If either Party (an “ Affected Party ”) is rendered unable, in whole or in part, by Force Majeure to carry out its obligations under this Agreement, other than the obligation to make money payments, the Affected Party shall give the other Party prompt written notice of the force majeure with reasonably full particulars concerning it; thereupon, the obligations of the Affected Party, insofar as they are affected by the Force Majeure, shall be suspended during, but no longer than, the continuance of the Force Majeure. The Affected Party shall use best efforts to remove the Force Majeure situation as quickly as possible. The requirement that any Force Majeure shall be remedied as quickly as possible shall not require the settlement of strikes, lockouts, or other labor difficulty by the Affected Party, and the manner in which such difficulties are handled shall be entirely within the discretion of the Affected Party concerned.

(b) Notwithstanding the foregoing, in the event drilling permits for the Test Wells are not timely obtained due to Force Majeure, this Agreement may nevertheless be terminated in accordance with Section 3.1(f) or Section 3.1(g), as applicable, provided that the remedies for termination upon the occurrence of an event of Force Majeure, as set out in Section 3.1(f) or Section 3.1(g), as applicable, shall apply.

(c) As used herein, the term “ Force Majeure ” shall mean an act of God, strike, lockout, or other industrial disturbance, act of public enemy, war, blockade, public riot, lightning, fire, storm, flood, explosion, governmental action, governmental delay or inaction, including but not limited to delay in obtaining necessary permits, approvals or orders from the Bureau of Land Management, the Montana Board of Oil and Gas Conservation, or any other federal, tribal, state or local governmental agency or body, or any regulatory delay caused by such governmental agencies or bodies, in each case only to the extent such delay or inaction is not due to any act or omission of the Affected Party, and any other cause, whether of the kind specifically enumerated above or otherwise, in each case which is not reasonably within the control of the Affected Party.

Section 3.3 Additional Drilling . The Parties may drill additional wells pursuant to Section 6.1 hereof.

ARTICLE IV.

SELLER’S PARTICIPATION OPTION

Section 4.1 Seller’s Participation Option .

(a) Test Well Participation Option . Within thirty (30) days after each Test Well has been drilled, stimulated and completed, placed on production and achieved Stabilized Production, as herein defined (“ Drilling and Completion ”), Buyer shall provide Seller written notice of such Drilling and Completion (each, a “ Production Notice ”). As used herein, “ Stabilized Production ” shall mean that point in time at which hydrocarbons are produced in paying quantities from the Test Well during at least 20 days of each calendar month for a period of 3 calendar months. Each Production Notice shall include a statement of the costs incurred by Buyer to drill, complete and stimulate the subject Test Well, equip the Test Well for production and transport the production to the point of sale (“ Buyer’s Drilling Costs ”). Upon delivery of each Production Notice and a subsequent written notice provided within ninety (90) days thereafter (the “ 90 Day Notice ”), Buyer shall also provide detailed history for such Test Well, including (i) daily drilling and completion reports, (ii) offset activity information, to the extent reasonably available to Buyer, (iii) well activity following Drilling and Completion, (iv) daily production reports (including reports on all fluid), and (v) any and all other material information or information reasonably requested by Seller and available to Buyer that permit Seller to make an informed decision to participate in the Test Well (the “ Well Information ”). Within fourteen (14) days following receipt of the 90 Day Notice, Seller shall have the option, but not the obligation, to acquire from Buyer an undivided 33.3% interest in the Test Well covered by such Production Notice, such option to be exercised by Seller upon written notice to Buyer delivered within such fourteen (14) day period. Seller may make its elections with respect to each Test Well separately. In the event Seller exercises such option, Seller shall, within fourteen (14) days, pay to Buyer an amount (the “ Test Well Option Price ”) equal to 33.3% of Buyer’s Drilling Costs and the lease acquisition costs paid by Buyer for the leases included in the spacing unit for such Test Well (collectively, “ Well Costs ”), and Buyer shall execute, acknowledge and deliver to Seller an assignment of an undivided 33.3% interest in (i) the subject Test Well, (ii) any related equipment and (iii) the leases included in the spacing unit for such Test Well, such assignment to be free and clear of all liens, claims or encumbrances arising by, through or under Buyer and to be effective as of the date of first sales of production from such Test Well. The Test Well Option Price payable by Seller shall be adjusted downward by an amount equal to the proceeds received by Buyer from sales of hydrocarbons attributable to Seller’s 33.3% interest in such Test Well, from the date of first sales from such Test Well.

(b) Acreage Participation Option . In addition to the option provided in subparagraph (a) above, Seller shall have the option (the “ Acreage Participation Option ”) to acquire an undivided 33.3% working interest in that portion of the Block A Purchased Acreage that has not been included in the spacing units for the First Test Well and the Second Test Well (the “ Remaining Block A Purchased Acreage ”), which Acreage Participation Option may be exercised (i) as to the Initial Acreage, at any time on or before fourteen (14) days following Seller’s receipt of the 90 Day Notice for the Second Test Well and the Well Information for the Second Test Well reasonably requested by Seller, and (ii) as to the Optional Acreage, at any time on or before 90 days after Buyer’s exercise of its Option pursuant to Section 1.13. In the event Seller exercises such option, (x) Seller shall, within fourteen (14) days after Seller’s exercise of the option, pay to Buyer an amount equal to 33.3% of the Purchase Price or Option Price, as applicable, paid by Buyer pursuant hereto for the leases included in the Remaining Block A Purchased Acreage, and (y) Buyer shall execute, acknowledge and deliver to Seller an assignment of an undivided 33.3% interest in such leases, such assignment to be free and clear of liens, claims and encumbrances arising by, through or under Buyer.

ARTICLE V.

AREA OF MUTUAL INTEREST

Section 5.1 Area of Mutual Interest .

(a) The Parties hereby create an area of mutual interest (“ Area of Mutual Interest ” or “ AMI ”) covering all lands located within the boundaries of the area depicted on the map attached as Exhibit E hereto. The term of the AMI (the “ AMI Term ”) shall commence on the Effective Date and shall end on the second anniversary of the Closing Date.

(b) Promptly after the Effective Date, Buyer and Seller shall, upon mutual written agreement, designate up to 50,000 Net Acres within the AMI (the “ Target Lands ”) over which they may mutually endeavor to acquire leases. The designated Target Lands may be modified or supplemented from time to time upon mutual written agreement of the Parties. During the AMI Term, Buyer and Seller shall meet at least monthly by teleconference or in person at Seller’s office in Poplar, Montana or another mutually acceptable location (the “ Target Meeting ”) Seller shall prepare and circulate an agenda for each Target Meeting (which agenda shall include discussion items requested by Buyer) at least three (3) business days prior to the meeting. Seller shall be the chair of each Target Meeting and shall keep written minutes thereof, copies of which shall be furnished to Buyer, detailing the actions taken and decisions made at the Target Meeting. At the Target Meetings, Buyer and Seller shall discuss the acquisition of leases covering the Target Lands, the status of leasing activities within the Target Lands, including the description of leases acquired and outstanding lease offers, and, if known to the Seller, identification of changes in availability of acreage or of ownership of leases or acreage within the Target Lands. When determining whether to acquire additional Target Lands, Buyer and Seller shall mutually establish during the Target Meeting: (i) leasing priorities for such Target Lands, (ii) a proposed timeline for leasing such Target Lands, (iii) the maximum bonus price to be paid for such Target Lands, and (iv) the minimum acceptable lease terms and any other terms regarding leasing of such Target Lands, as mutually agreed upon by the Seller and Buyer (collectively, the “ Target Lease Terms ”). Thereafter, the Target Lease Terms may be modified at any time upon mutual agreement of the Parties.

(c) Either Party may acquire leases covering the Target Lands. Leases covering lands within the AMI and acquired by either Party during the AMI Term are referred to herein as the “ AMI Leases ”.

(d) At any time following the Parties’ agreement on Target Lease Terms for particular Target Lands, but in any event prior to the acquisition by either Party of an AMI Lease covering such Target Lands, Seller may notify Buyer that it will not participate in acquiring leasehold interests in such Target Lands (the “ Opt-Out Lands ”). In such event, if Buyer still wishes to acquire the Opt-Out Lands, Seller may continue to assist in the acquisition of leases covering the Opt-Out Lands on behalf of Buyer, but it shall have no obligation to acquire or retain for itself any working interest in the Opt-Out Lands. If during the AMI Term Seller acquires leases covering the Opt-Out Lands conforming to the Target Lease Terms, Seller shall sell to Buyer, and Buyer shall purchase from Seller, all of Seller’s interest therein for the AMI Purchase Price. If during the AMI Term Buyer acquires leases covering the Opt-Out Lands, Seller shall have no right or obligation to purchase any interest therein from Buyer, and Buyer shall retain all of its interest therein, subject to Seller’s overriding royalty interest pursuant to Section 5.1(h) herein.

(e) Except as otherwise provided herein, the Party acquiring an AMI Lease during the AMI Term (the “ Acquiring Party ”) agrees to sell, and the other Party (the “ Non-Acquiring Party ”) agrees to purchase its respective Participating Interest, as defined herein, in, the AMI Lease for a purchase price (the “ AMI Purchase Price ”) equal to the sum of (i) the Non-Acquiring Party’s respective Participating Interest share of the lease bonus and first year rental paid by the Acquiring Party for the AMI Lease, together with any other amounts paid by the Acquiring Party to acquire the AMI Lease, plus in the case where Seller is the Acquiring Party, (ii) $50 per net acre; provided, however , that unless the Non-Acquiring Party’s prior approval is obtained, the Non-Acquiring Party shall have no obligation to purchase from the Acquiring Party any AMI Leases (x) in which the Net Revenue Interest in the subject lease is less than 80% (subject to proportionate reduction in the event that the acquired working interest in the lease is less than 100% or the lease covers less than the entire mineral estate in the lands covered thereby) or (y) which is acquired for a higher bonus or on other terms materially less favorable than those agreed to by the Parties as set forth in Section 5.1(b). The Acquiring Party shall pay the lease bonus and first year rental for the leases comprising the AMI Leases acquired by it, subject to the Non-Acquiring Party’s obligation to reimburse the Acquiring Party for the Non-Acquiring Party’s Participating Interest share thereof, as provided above, and the Non-Acquiring Party shall assume, and bear responsibility for payment of its Participating Interest share of all other obligations under the leases comprising the AMI Leases.

(f) As used herein, the term “ Participating Interest ” shall mean with respect to Buyer, 66.7%, and with respect to Seller, 33.3%; provided, however , that as to the Opt-Out Lands, Participating Interest shall mean, with respect to Buyer, 100%, and with respect to Seller, 0%.

(g) The Acquiring Party shall notify the Non-Acquiring Party of its acquisition of AMI Leases (including acquisitions of leases covering Opt-Out Lands) at least quarterly during the AMI Term, and within thirty (30) days after Non-Acquiring Party’s receipt of an acquisition notice from the Acquiring Party specifying the interests acquired and the amounts paid by the Acquiring Party therefor, the Non-Acquiring Party shall pay to the Acquiring Party the AMI Purchase Price therefor, pursuant to Section 5.1(e), and the Acquiring Party shall execute, acknowledge and deliver to the Non-Acquiring Party assignments (each an “ AMI Assignment ”) of the Non-Acquiring Party’s Participating Interest in the AMI Leases.

(h) Notwithstanding any other provision hereof, Seller shall reserve or be assigned, as applicable, an overriding royalty interest in each of the AMI Leases (including any leases covering Opt-Out Lands), equal to the positive difference, if any, between 20% and lease burdens existing as of the effective date of such assignment, including, without limitation, lessors’ royalties, overriding royalties, and similar burdens on or measured by production from the AMI Leases. Such overriding royalty interest shall apply to each AMI Lease, regardless of whether such AMI Lease was initially acquired by Buyer or Seller and notwithstanding Seller’s election not to participate in the acquisition of leases covering the Opt-Out Lands.

(i) If Buyer identifies any Title Defects with respect to AMI Lease(s) covered by an AMI Assignment within the earlier to occur of twenty-four (24) months following the effective date of such assignment or the commencement of the drilling of a well on a spacing unit which includes lands covered thereby, Buyer shall provide Seller a Title Defect Notice in accordance with the provisions of Section 2.2(a), and for a period of 180 days following receipt of such Notice, Seller shall have the right, but not the obligation, to attempt to cure the Title Defect. The cost of such title curative shall be borne by Buyer in proportion to its Participating Share with respect to the affected AMI Lease. In the event Seller is unable to cure the Title Defect, all further losses, costs and liabilities arising from or relating to the Title Defect shall be borne by Buyer in proportion to its Participating Share with respect to the affected AMI Lease.

Section 5.2 Marketing AMI Leases to Third Parties . Buyer shall have the option, but not the obligation, to drill an appraisal well (the “ Stimulation Well ”) on the acreage within the AMI assigned to it by Seller. In the event the drilling of a Stimulation Well is not commenced within twenty-four (24) months after the Effective Date, then Buyer and Seller agree to reasonably cooperate with one another to locate a third party to participate in the development of the AMI Leases, with the mutual goal of maximizing the economic returns within the AMI for both Buyer and Seller. Seller shall lead the effort to locate a third party participant, but Seller shall have no liability to Buyer in the event it is unable to locate such a third party participant.

Section 5.3 Seller’s AMI Option . For the initial Stimulation Well drilled in the AMI Leases, Seller shall assign to Buyer Seller’s retained 33.3% interest in the leases included in the drill site spacing unit designated by the applicable governmental agency for such well, and if no such spacing unit designation exists, then Seller shall assign its retained 33.3% interest in the 640 acres upon which the drill site is located. Within thirty (30) days after the Drilling and Completion of the initial Stimulation Well, Buyer shall provide Seller a Production Notice and a 90 Day Notice, each such notice to be accompanied by a statement of Buyer’s Drilling Costs for such well and the Well Information. Within fourteen (14) days following the receipt of the 90 Day Notice, Seller shall have the option, but not the obligation, to acquire from Buyer an undivided 33.3% interest in the initial Stimulation Well, such option to be exercised by Seller upon written notice to Buyer delivered within such fourteen (14) day period. In the event Seller exercises such option, Seller shall, within fourteen (14) days pay to Buyer an amount equal to 33.3% of Buyer’s Well Costs, and Buyer shall execute, acknowledge and deliver to Seller an assignment of an undivided 33.3% interest in (i) the initial Stimulation Well, (ii) any related equipment and (iii) the leases included in the spacing unit for the initial Stimulation Well, such assignment to be free and clear of all liens, claims or encumbrances arising by, through or under Buyer and to be effective as of the date of first sales of production from the initial Stimulation Well.

Section 5.4 Mattelin Property . The Parties acknowledge that Seller is currently in discussions with the Mattelin Mineral Trust, as mineral owner, to acquire oil and gas leases covering approximately 2,527 Net Acres, as more particularly described in Exhibit I (the “ Mattelin Leases ”). Subject to the provisions of this Section 5.4, Seller agrees to use good faith commercial efforts to acquire the Mattelin Leases on or before Closing. Seller shall obtain Buyer’s prior written approval of the final terms of any Mattelin Lease, whereupon Seller shall acquire such Mattelin Lease, and notwithstanding any other provision hereof, Seller shall bear up to $100 per Net Acre of acquisition costs for such Mattelin Lease, and Buyer shall bear any acquisition costs therefor over $100 per Net Acre. Seller shall notify Buyer upon consummation of such acquisition and within five (5) business days after receipt of such notice, Buyer shall pay to Seller its share of the acquisition costs for such Mattelin Lease and Seller shall deliver to Buyer an assignment of an undivided 66.7% interest in the Mattelin Lease, subject to Seller’s retained overriding royalty interest provided in Section 5.1(h).

ARTICLE VI.

OPERATORSHIP

Section 6.1 Joint Operating Agreement . To the extent not subject to an existing joint operating agreement, the Parties’ interests in the Block A Purchased Acreage and in the AMI shall be subject to a joint operating agreement substantially in the form of Exhibit F attached hereto (the “ Joint Operating Agreement ”). Buyer shall be designated the Operator under the Joint Operating Agreement. Notwithstanding the foregoing, Buyer shall subcontract with Seller on mutually acceptable, customary commercial terms, to provide services in connection with obtaining necessary regulatory permits in connection with the drilling of wells hereunder, including, without limitation, the First Test Well and the Second Test Well. After the completion of drilling of the Second Test Well, either Party shall have the right, but not the obligation, to propose the drilling of additional wells within the Block A Purchased Acreage and the AMI Leases. Each well proposal shall be in writing, and shall include the depth and location of the proposed well, a description (including acreage boundaries) of the structural feature (seismically defined, where available) targeted by the proposed well, an AFE setting out a reasonable estimate of the anticipated costs of the proposed well, and an executable joint operating agreement (an “ Additional Joint Operating Agreement ”), substantially in the form of Exhibit F , which shall provide for a Contract Area covering the spacing unit for the proposed well. All of the Parties, whether or not they intend to participate in the proposed well, shall execute the Additional Joint Operating Agreement, and all further operations for the proposed well shall thereafter be controlled by the terms of such Additional Joint Operating Agreement. Buyer shall be designated the operator under any Additional Joint Operating Agreement. In the event of a conflict between the terms of this Agreement and any joint operating agreement under this Section 6.1, this Agreement will control.

ARTICLE VII.

SELLER’S REPRESENTATIONS AND WARRANTIES

Section 7.1 Seller’s Representations and Warranties . Seller makes the following representations and warranties:

(a) Organization and Standing . Seller is a limited liability company duly organized, validly existing and in good standing under the laws of Delaware and is duly qualified to carry on its business in the State(s) where lands covered by Block A and the AMI are located.

(b) Power . Seller has all requisite power and authority to carry on its business as presently conducted. The execution and delivery of this Agreement does not, and the fulfillment of and compliance with the terms and conditions hereof will not, as of the Closing Date, violate, or be in conflict with, any material provision of Seller’s governing documents, or any material provision of any agreement or instrument to which Seller is a party or by which it is bound, or any judgment, decree, order, statute, rule or regulation applicable to Seller.

(c) Authorization and Enforceability . This Agreement constitutes Seller’s legal, valid and binding obligation, enforceable in accordance with its terms, subject, however, to the effects of bankruptcy, insolvency, reorganization, moratorium and other laws for the protection of creditors, as well as to general principles of equity, regardless whether such enforceability is considered in a proceeding in equity or at law.

(d) Liability for Brokers’ Fees . Seller has not incurred any liability, contingent or otherwise, for brokers’ or finders’ fees relating to the transactions contemplated by this Agreement for which Buyer shall have any responsibility whatsoever.

(e) Lawsuits and Claims . Except as disclosed in Schedule 7.1(e), there is no written demand or lawsuit, nor any compliance order, notice of probable violation or similar governmental action, pending or threatened before any court or governmental agency that (i) would result in a material impairment or loss of title to any part of the Initial Leases or impairment of the value thereof, (ii) seeks the imposition of substantial damages with respect to the Initial Acreage, or (iii) would materially hinder or impede the operation of the Initial Acreage.

(f) Compliance with Laws . Seller is not in violation of, and Seller has received no notice that Seller is alleged to be in violation of, any law, rule, regulation, order, permit, certificate, writ, judgment, stipulation, injunction, decree, determination, award, or decision of any court, government, or governmental agency or instrumentality, or arbitrator binding upon Seller which violation or alleged violation is reasonably likely to have an adverse effect on: (1) the Initial Acreage or its value; or (2) the ability of Seller to perform under this Agreement.

(g) Taxes . Seller has paid in full all taxes, assessments, and other charges assessed or imposed on Seller with respect to the Initial Leases by any local, state, tribal, or federal taxing authority, other than income or sales taxes, except those that are not yet past due and payable.

(h) Allegations of Breach or Default . Seller is not in breach or default in any material respect, and Seller has received no notice that it is alleged to be in breach or default in any material respect, under the terms of any leases or related contracts comprising a part of or affecting the Initial Acreage, which breach or default has not been cured by Closing, and the Initial Leases are in full force and effect and Seller has made all payments (including any applicable bonus, delay rentals, or similar payments) due thereunder or required to be made by Seller to maintain the Initial Leases in effect.

(i) Non-Producing . The Initial Leases are non-producing and Seller has not engaged in any oil or gas production or development activities on any of the Initial Leases.

(j) No Production Dedications . No Hydrocarbons to be produced from the Initial Acreage are subject to any hydrocarbon sales, purchase or exchange contracts and no third party has any call upon, option to purchase, take-or-pay obligations, dedication rights or similar rights with respect to the Hydrocarbons to be produced from the Initial Acreage.

(k) Consents and Preferential Purchase Rights . Except for the Fort Peck AMI Agreement, none of the Initial Acreage, including any lease thereon, or any portion thereof, is subject to any area of mutual interest requirements, preferential rights to purchase or restrictions on assignment or required third-party consents to assignment, which may be applicable to the transactions contemplated by this Agreement.

ARTICLE VIII.

BUYER’S REPRESENTATIONS AND WARRANTIES

Section 8.1 Buyer’s Representations And Warranties . Buyer makes the following representations and warranties:

(a) Organization and Standing . Buyer is a corporation duly organized, validly existing and in good standing under the laws of Colorado and is duly qualified to carry on its business in the State(s) where lands covered by Block A and the AMI are located.

(b) Power . Buyer has all requisite power and authority to carry on its business as presently conducted. The execution and delivery of this Agreement does not, and the fulfillment of and compliance with the terms and conditions hereof will not, as of the Closing Date, violate, or be in conflict with, any material provision of Buyer’s governing documents, or any material provision of any agreement or instrument to which Buyer is a party or by which it is bound, or any judgment, decree, order, statute, rule or regulation applicable to Buyer.

(c) Authorization and Enforceability . This Agreement constitutes Buyer’s legal, valid and binding obligation, enforceable in accordance with its terms, subject, however, to the effects of bankruptcy, insolvency, reorganization, moratorium and other laws for the protection of creditors, as well as to general principles of equity, regardless whether such enforceability is considered in a proceeding in equity or at law.

(d) Liability for Brokers’ Fees . Buyer has not incurred any liability, contingent or otherwise, for brokers’ or finders’ fees relating to the transactions contemplated by this Agreement for which Seller shall have any responsibility whatsoever.

(e) Buyer’s Evaluation . Buyer is an experienced and knowledgeable investor in the oil and gas business. Buyer has been advised by and has relied solely upon its own expertise in legal, tax and other professional counsel concerning the transaction contemplated by this Agreement, the Initial Acreage and the Optional Acreage and the value thereof.

(f) Qualified to Hold Leases . Buyer is eligible under all applicable laws and regulations to own leases covering the Initial Acreage and the Optional Acreage.

ARTICLE IX.

POST-CLOSING OBLIGATIONS

Section 9.1 Post-Closing Obligations . Seller and Buyer shall have the following post-Closing obligations:

(a) Property Records . Within sixty (60) days after Closing, Seller shall deliver to Buyer the originals of the Property Records at a location designated by Buyer. Any transportation, postage or delivery costs from Seller’s offices shall be at Buyer’s sole cost, risk and expense.

(b) Further Assurances . Seller and Buyer agree to execute and deliver from time to time such further instruments and do such other acts as may be reasonably requested and necessary to effectuate the purposes of this Agreement.

ARTICLE X.

DISCLAIMERS

Section 10.1 Disclaimer; Title; Condition and Fitness of the Properties . EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN THE ASSIGNMENT DELIVERED PURSUANT HERETO, SELLER WILL CONVEY TO BUYER THE INITIAL ACREAGE AND, IF APPLICABLE, THE OPTIONAL ACREAGE, WITHOUT ANY EXPRESS, STATUTORY, OR IMPLIED WARRANTY OR REPRESENTATION OF ANY KIND, INCLUDING WITHOUT LIMITATION WARRANTIES RELATING TO (i) TITLE, (ii) THE CONDITION OF THE PROPERTY, (iii) ANY IMPLIED OR EXPRESS WARRANTY OF MERCHANTABILITY OF THE PROPERTY, (iv) ANY IMPLIED OR EXPRESS WARRANTY OF THE FITNESS OF THE PROPERTY FOR A PARTICULAR PURPOSE, (v) ANY IMPLIED OR EXPRESS WARRANTY OF CONFORMITY TO MODELS OR SAMPLES OF MATERIALS, (vi) ANY RIGHTS OF BUYER UNDER APPROPRIATE STATUTES TO CLAIM DIMINUTION OF CONSIDERATION OR RETURN OF THE ADJUSTED PURCHASE PRICE, (vii) ANY IMPLIED OR EXPRESS WARRANTY OF FREEDOM FROM VICES OR DEFECTS, WHETHER KNOWN OR UNKNOWN, (viii) ANY IMPLIED WARRANTY OF FREEDOM FROM PATENT OR TRADEMARK INFRINGEMENT, (ix) ANY AND ALL IMPLIED WARRANTIES EXISTING UNDER APPLICABLE LAW NOW OR HEREAFTER IN EFFECT, (x) ANY IMPLIED OR EXPRESS WARRANTY REGARDING ANY ENVIRONMENTAL LAWS, THE RELEASE OF MATERIALS INTO THE ENVIRONMENT, OR PROTECTION OF THE ENVIRONMENT OR HEALTH, AND (xi) ANY RIGHTS OF BUYER UNDER STATUTES TO CLAIM DIMINUTION OF VALUE. EXCEPT AS SET FORTH IN THIS AGREEMENT OR IN THE ASSIGNMENT, BUYER WILL ACCEPT THE PROPERTY “AS IS,” “WHERE IS,” AND “WITH ALL FAULTS” AND IN ITS PRESENT CONDITION AND STATE OF REPAIR. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, SELLER MAKES NO REPRESENTATION OR WARRANTY AS TO (a) THE AMOUNT, VALUE, QUALITY, QUANTITY, VOLUME, OR DELIVERABILITY OF ANY OIL, GAS, OR OTHER MINERALS OR RESERVES (IF ANY) IN, UNDER, OR ATTRIBUTABLE TO THE PROPERTY, (b) THE PHYSICAL, OPERATING, REGULATORY COMPLIANCE, SAFETY, OR ENVIRONMENTAL CONDITION OF THE PROPERTY, OR (c) THE GEOLOGICAL OR ENGINEERING CONDITION OF THE PROPERTY OR ANY VALUE THEREOF.

Section 10.2 Information About the Properties . Except as expressly set forth in this Agreement, each Party disclaims all liability and responsibility for any representation, warranty, statement, or communication (oral or written) to any other Party (including any information contained in any opinion, information, or advice that may have been provided to any such Party by any employee, officer, director, agent, consultant, engineer, or engineering firm, trustee, representative, partner, member, beneficiary, stockholder, or contractor of such disclaiming Party or its affiliates) wherever and however made, including those made in any data room and any supplements or amendments thereto or during any negotiations with respect to this Agreement. EXCEPT AS SET FORTH IN THIS AGREEMENT OR IN THE ASSIGNMENT, SELLER MAKES NO WARRANTY OR REPRESENTATION, EXPRESS, STATUTORY, OR IMPLIED, AS TO (i) THE ACCURACY, COMPLETENESS, OR MATERIALITY OF ANY DATA, INFORMATION, OR RECORDS FURNISHED TO BUYER IN CONNECTION WITH THE PROPERTY, (ii) THE PRESENCE, QUALITY, AND QUANTITY OF HYDROCARBON RESERVES (IF ANY) ATTRIBUTABLE TO THE PROPERTY, (iii) THE ABILITY OF THE PROPERTY TO PRODUCE HYDROCARBONS, (iv) THE PRESENT OR FUTURE VALUE OF THE ANTICIPATED INCOME, COSTS, OR PROFITS, IF ANY, TO BE DERIVED FROM THE PROPERTY, OR (v) THE ENVIRONMENTAL CONDITION OF THE PROPERTY.

ARTICLE XI.

MISCELLANEOUS

Section 11.1 Exhibits and Schedules . The Exhibits and Schedules to this Agreement are hereby incorporated in this Agreement by reference and constitute a part of this Agreement.

Section 11.2 Expenses . Except as otherwise specifically provided, all fees, costs and expenses incurred by Buyer or Sellers in negotiating this Agreement or in consummating the transactions contemplated by this Agreement shall be paid by the Party incurring the same, including, without limitation, engineering, land, title, legal and accounting fees, costs and expenses. Without limiting the generality of the foregoing, to the extent that prior to the Effective Date Buyer has incurred costs and expenses in connection with preliminary well site work, well assessment, well locations, and scouting, such costs and expenses shall be borne solely by Buyer; provided, that , in the event Seller elects to exercise its participation option pursuant to Section 4.1, Seller shall bear its share of any such costs which are acquisition costs.

Section 11.3 Notices . All notices and communications required or permitted under this Agreement shall be in writing and addressed as set forth below. Any communication or delivery hereunder shall be deemed to have been duly made and the receiving Party charged with notice (i) if personally delivered, when received, (ii) if sent by facsimile transmission, when received, (iii) if mailed, five business days after mailing, certified mail, return receipt requested, or (iv) if sent by overnight courier, one day after sending. All notices shall be addressed as follows:

If to Seller :

Fort Peck Energy Company, LLC

317 C East Street

Poplar, MT 59255

Attn: Mr. Lynn Becker

Telephone: (406) 768-3093

Fax: (406) 768-3504

Email: Becker@NARPLLC.com

With copies to :

Andrews Kurth LLP

600 Travis, Suite 4200

Houston, TX 77002

Attention: Cheryl S. Phillips

Telephone: (713) 220-4200

Fax: (713) 220-4285

Email: cphillips@andrewskurth.com

If to Buyer :

Samson Oil and Gas USA Montana, Inc.

1331 17 th Street, Suite 710

Denver, CO 80202

Attn: Terry Barr

Telephone: (303) 296-3994

Fax: (303) 295-1961

Email: terry.barr@samsonoilandgas.com

With copies to :

Davis Graham & Stubbs LLP

1550 17th Street, Suite 500

Denver, CO 80202

Attn: Greg Danielson

Telephone: (303) 892-7438

Fax: (303-893-1379

Email: greg.danielson@dgslaw.com

Any Party may, by written notice so delivered to the other Parties, change the address or individual to which delivery shall thereafter be made.

Section 11.4 Amendments . Except for waivers specifically provided for in this Agreement, this Agreement may not be amended nor any rights hereunder waived except by an instrument in writing signed by the Party to be charged with such amendment or waiver and delivered by such Party to the Party claiming the benefit of such amendment or waiver.

Section 11.5 Headings . The headings of the Articles and Sections of this Agreement are for guidance and convenience of reference only and shall not limit or otherwise affect any of the terms or provisions of this Agreement.

Section 11.6 Counterparts/Fax Signatures . This Agreement may be executed by Buyer and Sellers in any number of counterparts, each of which shall be deemed an original instrument, but all of which together shall constitute but one and the same instrument. Signatures exchanged by fax or .pdf signatures shall be considered binding.

Section 11.7 References . References made in this Agreement, including use of a pronoun, shall be deemed to include where applicable, masculine, feminine, singular or plural, individuals or entities. As used in this Agreement, “person” shall mean any natural person, corporation, partnership, trust, limited liability company, court, agency, government, board, commission, estate or other entity or authority.

Section 11.8 Governing Law; Wavier of Jury Trial . This Agreement and the transactions contemplated hereby shall be construed in accordance with, and governed by, the laws of the State of Texas, without regard to its conflicts of laws rules; provided, however, the laws of the State where the subject leases are located shall control the Assignment with respect to conveyance matters and other real property matters necessarily subject to the laws of the State where the subject leases are located. EACH OF THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT AND ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES ENTERING INTO THIS AGREEMENT.

Section 11.9 Arbitration . Except as otherwise indicated herein, any claim, controversy or dispute arising out of, relating to, or in connection with the Agreement or the agreements and transactions contemplated hereby, by Buyer or Seller, including the interpretation, validity, termination or breach thereof, shall be resolved solely through binding arbitration in accordance with the dispute resolution procedures set forth in this Section 11.9. The Parties covenant that they shall not resort to court remedies except as provided for in this Section 11.9, or for preliminary relief in aid of arbitration. Except as otherwise provided in this Agreement, the following provisions shall apply to any arbitrations conducted pursuant to this Agreement:

(a) Within ten (10) days after written demand by either party for arbitration, each party shall appoint one arbitrator. The two arbitrators so appointed shall then appoint a third arbitrator. If either party shall fail to appoint an arbitrator within the time stated, or if the two arbitrators so appointed fail within ten (10) days after the appointment of the second of them to agree on a third arbitrator, the arbitrator or arbitrators necessary to complete a panel of three (3) arbitrators shall be appointed pursuant to the commercial arbitration rules specified by the AAA. All arbitrators must be neutral disinterested parties who have never been officers, directors or employees or attorneys of the parties or any of their Affiliates, must have not less than ten (10) years experience in the oil and gas industry, and must have a formal financial/accounting, petroleum engineering, land or legal education.

(b) The arbitration proceeding shall be governed by Texas law and shall be conducted in accordance with the Commercial Arbitration Rules of the AAA with discovery to be conducted in accordance with the Federal Rules of Civil Procedure, and with any disputes over the scope of discovery to be determined by the arbitrators.

(c) The arbitration proceeding shall be held in Denver, Colorado and a hearing shall be held no later than sixty (60) days after submission of the matter to arbitration, and a written decision shall be rendered by the arbitrators within thirty (30) days of the hearing.

(d) At the hearing, the parties shall present such evidence and witnesses as they may choose, with or without counsel. Adherence to formal rules of evidence shall not be required but the arbitration panel shall consider any evidence and testimony that it determines to be relevant, in accordance with procedures that it determines to be appropriate.

(e) Any award entered in the arbitration shall be made by a written opinion stating the reasons and basis for the award made and may include an award of reasonable costs and attorney’s fees if the arbitrator panel so determines.

(f) The costs incurred in employing the arbitrators, including the arbitrators’ retention of any independent qualified experts, shall be borne 50% by the Seller and 50% by Buyer.

(g) The arbitrator’s award may be filed in any court of competent jurisdiction and may be enforced by any party as a final judgment of such court.

Section 11.10 Entire Agreement . This Agreement constitutes the entire understanding among the Parties with respect to the subject matter hereof, superseding all negotiations, prior discussions and prior agreements and understandings relating to such subject matter.

Section 11.11 Binding Effect . This Agreement shall be binding upon, and shall inure to the benefit of, the Parties hereto, and their respective successors and assigns.

Section 11.12 No Third-Party Beneficiaries . This Agreement is intended only to benefit the Parties hereto and their respective permitted successors and assigns.

Section 11.13 Survival . All representations and warranties in this Agreement shall survive for a period of one (1) year following the Closing Date.

Section 11.14 Waiver . The waiver or failure of any Party to enforce any provision of this Agreement shall not be construed or operate as a waiver of any further breach of such provision or of any other provision of this Agreement.

Section 11.15 Limitation on Damages . The Parties hereto expressly waive any and all rights to consequential, special, incidental, punitive or exemplary damages, or loss of profits resulting from any breach of this Agreement.

Section 11.16 Severability . It is the intent of the Parties that the provisions contained in this Agreement shall be severable. Should any provisions, in whole or in part, be held invalid as a matter of law, such holding shall not affect the other portions of this Agreement, and such portions that are not invalid shall be given effect without the invalid portion.

Section 11.17 Announcements . Except as and to the extent required by law, neither Buyer nor Seller will make any press release or announcement with respect to this Agreement or the transactions contemplated hereby without the prior consent of the other Party, such consent not to be unreasonably withheld or delayed; provided, however , if a Party is required to make such a public announcement or statement by law or under the rules and regulations of the New York Stock Exchange (or other public stock exchange of similar reputation and standing) on which the shares of such Party or any of its Affiliates are listed, then the same may be made without the approval of the other Party. The opinion of counsel of the Party making such announcement or statement shall be conclusive evidence of such requirement by law or rules or regulations.

Section 11.18 Transfer Taxes and Recording Fees . Buyer shall pay all sales, transfer, use or similar taxes , if any, occasioned by the sale or transfer of the Initial Acreage and the Optional Acreage and all documentary, transfer, filing, licensing, and recording fees required in connection with the processing, filing, licensing or recording of any assignments, titles or bills of sale.

Section 11.19 Relationship of the Parties . This Agreement shall not be deemed or construed to create an agency relationship between the Parties. This Agreement is not intended to create, and shall not be construed to create, a mining, joint venture, tax or other partnership or association or to render the Parties liable as partners. However, if for federal income tax purposes, this Agreement and the operations conducted by the parties pursuant hereto are regarded as having created a partnership, each party thereby affected elects to be excluded from the application of all of the provisions of Subchapter “K”, Chapter 1, Subtitle “A,” of the Internal Revenue Code of 1986, as amended (hereinafter referred to as the “Code”), as permitted and authorized by Section 761 of the Code and the regulations promulgated thereunder. Should there be any requirement that each Party thereby affected give further evidence of this election, each such party shall execute such documents and furnish such other evidence as may be required by the Internal Revenue Service or as may be necessary to evidence this election. No Party shall give any notice or take any other action inconsistent with the election made hereby.

Section 11.20 Further Assurances . From time to time after Closing, Seller and Buyer shall each execute, acknowledge and deliver to the other such further instruments and take such other action as may be reasonably requested in order to accomplish more effectively the purposes of the transactions contemplated by this Agreement.

[Signature Page Follows]

IN WITNESS WHEREOF the Parties have executed this Agreement effective as of the Effective Time.

SELLER :

FORT PECK ENERGY COMPANY, LLC, a Delaware limited liability company

By:	Native American Resource Partners, LLC, as Manager

By:	/s/ John P. Jurrius
Name: John P. Jurrius
Title: President and Chief Executive Officer

BUYER :

SAMSON OIL AND GAS USA MONTANA, INC., a Colorado corporation

By:	/s/ Terence Barr
Name: Terence Barr
Title: President and Chief Executive Officer

Australia	N/A
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

Level 36, Exchange Plaza, 2 The Esplanade Perth, Western Australia 6000
(Address of principal executive offices)	(Zip Code)

American Depositary Shares* Ordinary Shares**	NYSE Amex
Title of Each Class	Name of Exchange on Which Registered

FORWARD-LOOKING STATEMENTS		1

GLOSSARY OF TECHNICAL TERMS		2

PART I		5

Item 1 and 2.	Business and Properties	5

Item 1A.	Risk Factors	19

Item 1B.	Unresolved Staff Comments	32

Item 3.	Legal Proceedings	32

Item 4.	Reserved	32

PART II		33

Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	33

Item 6.	Selected Financial Data	43

Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	44

Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	60

Item 8.	Financial Statements and Supplementary Data	61

Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	61

Item 9A.	Controls and Procedures	62

Item 9B.	Other Information	62

PART III		62

Item 10.	Directors, Executive Officers and Corporate Governance	62

Item 11.	Executive Compensation	63

Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	63

Item 13.	Certain Relationships and Related Transactions, and Director Independence	63

Item 14.	Principal Accounting Fees and Services	63

PART IV		63

Item 15.	Exhibits and Financial Statement Schedules	63

SIGNATURES		65

	2011									2010
	Oil MBbls			Gas Mcf			Total MBOE			Oil MBbls			Gas Mcf			Total MBOE
Beginning of year		451			10,119			2,138			251			9,447			1,826
Revisions of previous quantity estimates		156			431			228			(33	)		(92	)		(48	)
Extensions, discoveries and improved recovery		-			-						264			1,433			503
Sale of reserves in place		(48	)		(8,816	)		(1,517	)		–			–			–
Production		(64	)		(423	)		(135	)		(31	)		(669	)		(143	)
End of year		495			1,311			714			451			10,119			2,138

Proved developed producing reserves		455			1,274			667			275			5,450			1,183
Proved undeveloped reserves		40			37			47			176			4,669			955
Total proved reserves		495			1,311			714			451			10,119			2,138

	2011 North Stockyard
Oil volume – Bbls		47,693
Revenue – $		4,050,067
Average Price per barrel – $		84.93
Gas volume – Mcf		2,864
Revenue – $		19,458
Average price per Mcf – $		6.79
Per unit production and lease operation costs per BOE – $*		15.41

	2010
	Jonah		Lookout Wash
Oil volume – Bbls		1,063		825
Revenue – $		66,981		50,144
Average Price per barrel – $	$	63.01	$	60.78

Gas volume – Mcf		187,407		285,329
Revenue – $		735,793		1,084,431
Average price per Mcf – $	$	3.93	$	3.80
Per unit production and lease operation costs per Mcfe – $*	$	1.24	$	1.65

	2009
	Jonah		Lookout Wash
Oil volume – Bbls		1,579		507
Revenue – $		83,547		22,625
Average Price per barrel – $	$	52.91	$	44.62

Gas volume – Mcf		185,560		345,340
Revenue – $		775,003		1,345,920
Average price per Mcf– $	$	4.17	$	3.89
Per unit production and lease operation costs per Mcfe – $*	$	1.64	$	1.63

	Year Ended June 30
	2011		2010		2009
Net productive exploratory wells drilled	Nil		Nil		Nil
Net dry exploratory wells drilled	Nil			1		0.125
Net productive development wells drilled		1		0.23		0.17
Net dry development wells drilled	Nil		Nil		Nil

Gross productive oil wells			57
Net productive oil wells			7
Gross productive gas wells			33
Net productive gas wells			9
Wells with multiple completions			0
Gross Developed Acres			11,995
Net Developed Acres			3,864
Gross Undeveloped Acres			75,803
Net Undeveloped Acres			49,133

Name	Age	Position
Terence Barr	62	Chief Executive Officer
Robyn Lamont	33	Chief Financial Officer
David Ninke	40	Vice President – Exploration
Daniel Gralla	50	Vice President – Engineering
Denis Rakich	57	Secretary

	NYSE Amex American Depositary Share (ADS) Price (in USD)
	Fiscal 2011				Fiscal 2010
	High		Low		High		Low
First Quarter (July 1 – September 30)	$	1.45	$	0.79	$	0.85	$	0.36
Second Quarter (October 1 – December 31)	$	1.33	$	1.10	$	0.48	$	0.19
Third Quarter (January 1 – March 31)	$	4.53	$	1.44	$	0.57	$	0.23
Fourth Quarter (April 1 – June 30)	$	3.99	$	2.46	$	0.90	$	0.48

	ASX Ordinary Share Price (in AUD)
	Fiscal 2011				Fiscal 2010
	High		Low		High		Low
First Quarter (July 1 – September 30)	$	0.08	$	0.05	$	0.04	$	0.02
Second Quarter (October 1 – December 31)	$	0.07	$	0.06	$	0.02	$	0.01
Third Quarter (January 1 – March 31)	$	0.22	$	0.07	$	0.03	$	0.01
Fourth Quarter (April 1 – June 30)	$	0.20	$	0.12	$	0.04	$	0.03

	Jan 7, 2008		June 30, 2008		June 30, 2009		June 30, 2010		June 30, 2011
Samson Oil & Gas Limited (SSN)	$	100.00	$	114.49	$	13.04	$	26.09	$	85.80
NYSE Amex Composite Index (XAX)	$	100.00	$	93.70	$	66.41	$	75.38	$	98.40
NYSE Amex Oil Index (XOI)	$	100.00	$	101.01	$	60.45	$	58.13	$	85.81

Net earnings per common share from continuing operations:
Basic – cents per share	3.06	(0.56	)	(5.88	)
Diluted – cents per share	2.61	(0.56	)	(5.88	)

Net earnings per common share from discontinued operations:
Basic – cents per share	0.16	(1.91	)	1.20
Diluted – cents per share	0.14	(1.91	)	1.20

Weighted average common shares outstanding:
Basic	1,680,247,878	978,983,187		217,248,877
Diluted	1,968,053,691	978,983,187		217,248,877

Cash flow data:
Cash flow (used in) operations	$	(10,509,390	)	$	(1,210,080	)	$	(46,673	)
Cash flow provided by /(used in) investing activities		69,438,106			(5,834,554	)		(1,082,641	)
Cash flow provided by/(used in) financing activities	$	(7,661,155	)	$	11,271,787		$	(2,330	)

Other financial data:
Capital expenditure – oil and gas properties	$	(4,793,225	)	$	(3,581,518	)	$	(274,946	)
Capitalized exploration expenditure	$	(3,347,738	)		-			-

Balance sheet data:
Cash and cash equivalents	$	58,448,477		$	5,885,735		$	1,522,632
Property, plant and equipment, net of depletion and impairment		14,214,774			20,330,897			38,991,421
Total assets		81,597,832			32,895,960			41,266,248
Borrowings		(29,769	)		(11,283,999	)		(16,846,207	)
Total shareholders’ equity	$	77,926,665		$	18,990,905		$	23,459,943

	Year Ended June 30
	2011			2010			2009
Future cash inflows	$	46,250		$	67,996		$	67,630
Future production costs		(16,046	)		(23,288	)		(20,290	)
Future development costs		(917	)		(11,910	)		(5,416	)
Future income taxes		(4,357	)		–			(143	)
Future net cash flows		24,930			32,798			41,781
10% discount		(10,207	)		(17,675	)		(24,054	)
Standardized measure of discounted future net cash flows relating to proved reserves	$	14,723		$	15,123		$	17,727

	Year ended June 30,
	2011		2010		2009
Production Volume:
Oil (Bbls)		64,405		30,719		24,608
Natural gas (Mcf)		423,077		668,848		684,160
BOE		134,918		142,194		138,635
Oil Price per Bbl Produced (in dollars):
Realized price	$	79.43	$	67.50	$	62.82
Realized commodity derivative gain (loss)		–		–		–
Net realized price	$	79.43	$	67.50	$	62.82
Natural Gas Price per Mcf Produced (in dollars):
Realized price	$	3.86	$	4.09	$	4.17
Realized commodity derivative gain (loss)		0.35		0.05		1.73
Net realized price	$	4.21	$	4.14	$	5.90

	Year ended						Variance			% Change
Item	June 30, 2011 US$			June 30, 2010 US$			US$			%
Continuing Operations
Oil and gas revenues	$	5,968,776		$	2,891,937		$	3,076,839			106
Interest income		368,251			24,318			343,933			1,414
Gain sale of exploration acreage		73,199,687			-			73,199,687			100
Other income		2,245			58,929			(56,684	)		96
Lease operating expense		(1,678,510	)		(908,283	)		(770,227	)		85
Depletion, depreciation and amortization		(1,832,558	)		(1,160,385	)		(672,173	)		58
Impairment of oil and gas properties		-			(71,151	)		71,151			(100	)
Exploration and evaluation expenditure		(404,031	)		(1,569,455	)		1,165,424			(74	)
General and administrative cost		(8,561,734	)		(3,300,233	)		5,261,501			159
Interest expense, net of capitalised costs		(930,747	)		(1,450,134	)		519,387			(36	)
Income tax (expense)/benefit		(14,695,544	)		-			(14,695,544	)		100
Loss from discontinued operations		2,712,387			(18,679,899	)		21,392,286			115
Net income	$	54,148,222		$	(24,164,356	)	$	78,312,578			324

	Fiscal Year Ended						Variance			% Change
Item	June 30, 2010 US$			June 30, 2009 US$			US$			%
Continuing Operations
Oil and gas revenues	$	2,891,937		$	2,084,764		$	807,173			39
Gain on cancellation of portion of embedded derivative/options		–			1,248,072			(1,248,072	)		(100	)
Gain on movement in fair value of embedded derivative		–			1,536,983			(1,536,983	)		(100	)
Lease operating expense		(908,283	)		(906,631	)		(1,652	)		-
Depletion, depreciation and amortization		(1,160,385	)		(1,023,828	)		(136,557	)		13
Impairment of oil and natural gas properties		(71,151	)		(483,167	)		(412,016	)		85
Exploration and evaluation expenditure		(1,569,545	)		(4,861,545	)		(3,292,090	)		68
General and administrative		(3,300,233	)		(4,811,922	)		(1,511,689	)		31
Interest expense, net of capitalized costs		(1,423,938	)		(5,574,131	)		(4,150,193	)		74

Net (loss)/ income from discontinued operations		(18,679,899	)		2,598,514			(21,278,413	)		819
Net income/(loss)	$	(24,164,356	)	$	(10,177,689	)	$	(13,986,667	)		137

	Impairment Expense
Field	June 30, 2010		June 30, 2009
Pierce Unit, Wyoming	$	-	$	42,184
Hilight, Wyoming		-		313,951
Bird Canyon, Wyoming		-		121,591
CBM Unit, Wyoming		38,163		-
Big Hand, Wyoming		9,816		-
Other		23,172		5,441
Total	$	71,151	$	483,167

Contractual obligations	Total		2012		2013		2014		2015		2016		Thereafter
Asset retirement obligations(1)	$	236,024	$	-	$	76,446	$	-	$	-	$	-	$	159,578
Operating leases(2)		676,048		159,091		143,572		118,721		121,029		123,339		10,296
Capital lease obligations (3)		29,769		14,884		14,885		-		-		-		-
Total	$	941,841	$	173,975	$	234,903	$	118,721	$	121,029	$	123,339	$	169,874

Date	Call/Put	Volume – Barrels	Price – $ per Barrel
July 2011 – Dec 2011	Put	4,733		60.00
July 2011 – Dec 2011	Call	4,733		102.90

	$ value of impact on net profit	% value of impact on net loss
Increase of 10% in oil and gas prices	Increase by $672,034	Increase by 1.24%
Decrease of 10% in oil and gas prices	Decrease by $672,034	Decrease by 1.24%

	$ value of impact on net loss	% value of impact on net loss
Increase of 10% in oil and gas prices	Decrease by $464,643	Decrease by 4.5%
Decrease of 10% in oil and gas prices	Increase by $464,643	Increase by 4.5%

Number	Description

3	Constitution of Samson Oil & Gas Limited (incorporated by reference to Exhibit 1 to the Registration Statement on Form 20-F of Samson Oil & Gas Limited filed on July 6, 2007, as amended by Form 20-F/A).

4	Deposit Agreement between Samson Oil & Gas Limited and The Bank of New York (incorporated by reference to Exhibit 1 to the Registration Statement on Form F-6 of Samson Oil & Gas Limited filed on July 6, 2007).

10.1	Purchase and Sale Agreement between Samson Oil & Gas USA Inc. and Prima Exploration, Inc., Powder Morning, LLC, KAB Acquisition LLLP-IX, Morse Energy Partners II LLC, Apple Creek LLC, and Blackland Petroleum, LLC, dated March 24, 2011.

10.2	Lease Acquisition and Participation Agreement between Samson Oil and Gas USA Montana, Inc. and Fort Peck Energy Company, LLC, dated as of June 22, 2011.

10.3	Purchase and Sale Agreement between Samson Oil & Gas USA Inc. and Chesapeake Exploration, L.L.C. dated June 23, 2010 and Amendments dated July 26, 2010 and September 1, 2010 (incorporated by reference to Exhibit 4.3 to the Annual Report on Form 20-F of Samson Oil & Gas Limited filed on December 17, 2010).

10.4	Employment Agreement between Samson Oil and Gas USA, Inc. and Terence Barr, dated as of January 1, 2011.


10.5	Employment Agreement between Samson Oil and Gas USA, Inc. and Robyn Lamont, dated as of January 1, 2011.

10.6	Employment Agreement between Samson Oil and Gas USA, Inc. and David Ninke, dated as of January 1, 2011.

10.7	Employment Agreement between Samson Oil and Gas USA, Inc. and Daniel Gralla, dated as of January 1, 2011.

10.8	Samson Oil & Gas Limited Stock Option Plan (incorporated by reference to Exhibit 4.1 to the Registration Statement on Form S-8 of Samson Oil & Gas Limited filed on April 21, 2011).

21	List of Subsidiaries.

23.1	Consent of PricewaterhouseCoopers LLP.

23.2	Consent of Ryder Scott Company, L.P.

23.3	Consent of Robert Gardner.

31.1	Certification of the Principal Executive Officer pursuant to Rule 13a–14(a) and Rule 15d–14(a) of the Securities Exchange Act of 1934, as amended.

31.2	Certification of the Principal Financial Officer pursuant to Rule 13a–14(a) and Rule 15d–14(a) of the Securities Exchange Act of 1934, as amended.

32	Certifications of the Principal Executive Officer and Principal Financial Officer pursuant to 18 USC 1350, as adopted, pursuant to Section 906 of the Sarbanes–Oxley Act of 2002.

99	Report of Ryder Scott Regarding the Registrant’s Reserves as of June 30, 2011.

	Samson Oil and Gas Limited

	By:		/s/ Terence Barr
	Name:		Terence Barr
	Title:		Managing Director, President and Chief Executive Officer
	Date:		September 13, 2011

Signature	Title	Date

/s/ Terence Barr	Managing Director, President and Chief Executive Officer (Principal Executive Officer)	September 13, 2011
Terence Barr


/s/ Robyn Lamont	Chief Financial Officer (Principal Financial Officer)	September 13, 2011
Robyn Lamont	Chief Financial Officer (Principal Financial Officer)

/s/ Victor Rudenno	Director	September 13, 2011
Victor Rudenno

/s/ Keith Skipper	Director	September 13, 2011
Keith Skipper

/s/ DeAnn Craig	Director	September 13, 2011
DeAnn Craig

Report of Independent Registered Public Accounting Firm	67

Consolidated Balance Sheets as of June 30, 2011 and 2010	68

Consolidated Statements of Operations for the Fiscal Years Ended June 30, 2011, 2010 and 2009	69

Consolidated Statements of Changes in Stockholders’ Equity for the Fiscal Years Ended June 30, 2011, 2010 and 2009	70

Consolidated Statements of Cash Flows for the Fiscal Years Ended 2011, 2010 and 2009	71

Notes to Consolidated Financial Statements	72

	June 30
	2011			2010
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	58,448,477		$	5,885,735
Accounts receivable, net of allowance for doubtful accounts of $nil and $nil respectively		1,696,696			861,909
Prepayments		592,805			1,454,271
Pipe inventory – held by third party		489,526			–
Income tax receivable		2,578,870			–
Other receivables		–			4,070,746
Other current assets		–			40,165
Derivative instruments		22,268			46,824
Total current assets		63,828,642			12,359,650
PROPERTY, PLANT AND EQUIPMENT, AT COST
Oil and gas properties, successful efforts method of accounting, less accumulated depreciation, depletion and impairment		13,862,510			20,180,858
Other property and equipment, net of accumulated depreciation and amortization of $192,138 and $364,248 at June 30, 2011 and June 2010, respectively		352,264			150,039
Net property, plant and equipment		14,214,774			20,330,897
OTHER ASSETS
Capitalized exploration expense		3,347,738			–
Restricted cash		172,504			178,291
Other		34,174			27,122
TOTAL ASSETS	$	81,597,832		$	32,895,960
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	2,854,483		$	1,041,361
Accrued liabilities		389,000			1,169,916
Provision for annual leave		161,891			107,885
Current portion of long-term debt		–			11,283,999
Total current liabilities		3,405,374			13,603,161
Capitalized lease		29,769			–
Asset retirement obligations		236,024			301,894
Total liabilities		3,671,167			13,905,055
STOCKHOLDERS’ EQUITY – nil par value
Common stock, 1,732,043,789 (equivalent to 86,602,189 ADRs) and 1,654,959,087 (equivalent to 82,747,954 ADRs) shares issued and outstanding at June 30, 2011 and 2010, respectively)		81,668,085			78,133,694
Other comprehensive income		3,089,795			1,836,648
Retained earnings (accumulated deficit)		(6,831,215	)		(60,979,437	)
Total stockholders’ equity		77,926,665			18,990,905
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	81,597,832		$	32,895,960

	Issued Capital			Retained Earnings/(Accumulated Deficit)			Other Comprehensive Income			Total Equity
Balance at July 1, 2008	$	57,877,084		$	(26,637,392	)	$	596,344		$	31,836,036
Net Income (loss)		–			(10,177,689	)		–			(10,177,689	)
Foreign currency translation		–			–			1,293,037			1,293,037
Total comprehensive income/(expense) for the period		–			(10,177,689	)		1,293,037			(8,884,652	)
Stock based compensation		33,962			–			-			33,962
Issue of share capital		476,927			–			–			476,927
Share issue costs		(2,330	)		–			–			(2,330	)
Balance at June 30, 2009		58,385,643			(36,815,081	)		1,889,381			23,459,943
Net Income (loss)		–			(24,164,356	)		–			(24,164,356	)
Foreign currency translation		–			–			(52,733	)		(52,733	)
Total comprehensive income/(expense) for the period		–			(24,164,356	)		(52,733	)		(24,217,089	)
Stock based compensation		120,545			–			-			120,545
Issue of share capital		21,227,372			–			-			21,227,372
Share issue costs		(1,599,866	)		–			-			(1,599,866	)
Balance at June 30, 2010		78,133,694			(60,979,437	)		1,836,648			18,990,905
Net Income (loss)		–			54,148,222			-			54,148,222
Foreign currency translation		–			–			1,253,147			1,253,147
Total comprehensive income/(expense) for the period		–			54,148,222			1,253,147			55,401,369
Stock based compensation		2,473,477			–			-			2,473,477
Issue of share capital		1,098,028			–			–			1,098,028
Share issue costs		(37,114	)		–			–			(37,114	)
Balance at June 30, 2011	$	81,668,085		$	(6,831,215	)	$	3,089,795		$	77,926,665

	Consolidated Entity
	2011			2010			2009
Cash flows from operating activities
Receipts from customers	$	6,281,825		$	5,022,548		$	6,011,941
Cash received from commodity derivative financial instruments		152,171			34,435			1,197,487
Payments to suppliers & employees		(7,073,109	)		(4,978,917	)		(5,638,668	)
Interest received		368,251			24,234			10,183
Interest paid		(878,528	)		(1,312,380	)		(1,627,616	)
Income taxes paid		(9,360,000	)		-			-
Net cash flows used in operating activities	$	(10,509,390	)	$	(1,210,080	)	$	(46,673	)
Cash flows from investing activities
Proceeds from sale of listed shares		49,040			65,156			–
Proceeds from sale of exploration acreage		73,199,687			–			–
Proceeds from sale of oil and gas properties		6,262,374			–			–
Payments for plant & equipment		(1,528,606	)		(748,736	)		(590,746	)
Payments for exploration and evaluation		(3,751,769	)		(1,569,456	)		(216,949	)
Payments for oil and gas properties		(4,792,620	)		(3,581,518	)		(274,946	)
Net cash flows provided by /(used in) investing activities	$	69,438,106		$	(5,834,554	)	$	(1,082,641	)
Cash flows from financing activities
Proceeds from issue of share capital		3,969,374			18,326,542			–
Repayment of borrowings		(11,386,247	)		(5,673,753	)		–
Payments for costs associated with capital raising		(244,282	)		(1,381,002	)		(2,330	)
Net cash flows (used in)/ provided by financing activities	$	(7,661,155	)	$	11,271,787		$	(2,330	)
Net increase/(decrease) in cash and cash equivalents		51,267,561			4,227,153			(1,131,644	)
Cash and cash equivalents at the beginning of the financial year		5,885,735			1,522,632			2,680,734
Effects of exchange rate changes on cash and cash equivalents		1,295,181			135,950			(26,458	)
Cash and cash equivalents at end of year	$	58,448,477		$	5,885,735		$	1,522,632

	2011		2010
Payables – from capital raising	$	–	$	1,169,916
Bonus accrual		389,000		–

	2011			2010
Proved properties	$	22,872,355		$	42,845,931
Lease and well equipment		3,745,698			3,880,363
Unproved properties		–			10,469,072
Less accumulated depreciation, depletion and impairment		(12,755,543	)		(37,014,508	)
	$	13,862,510		$	20,180,858

	2011			2010

Furniture, fittings and equipment	$	544,402		$	514,288
Less accumulated depreciation		(192,138	)		(364,249	)
	$	352,264		$	150,039