Texas South Energy, Inc. (Form: 8-K, Received: 01/10/2017 10:32:31)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported: January 4, 2017

Texas South Energy, Inc.

(Exact name of registrant as specified in its charter)

Nevada	333-171064	99-0362471
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

4550 Post Oak Place Dr., Suite 300

Houston, TX 77027

(Address of principal executive offices and Zip Code)

Registrant's telephone number, including area code: (713) 820-6300

3 Riverway, Suite 1800

Houston, TX 77056

(Former name or former address, if changed since last report)

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

	☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR240.14d-2(b))

	☐	Soliciting material pursuant to Rule 14a-12 under Exchange Act (17 CFR240.14a-12)

	☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR240.14d-2(b))

	☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR240.13e-4(c))

Item 1.01 - Entry into a Material Definitive Agreement

On January 4, 2017 (“Closing”), Texas South Energy, Inc. (the “Company” and “Texas South”) entered into an asset purchase agreement (“Asset Purchase Agreement”) with Sydson Energy, Inc. (“Sydson Energy”) and Sydson Resources, L.P. (“Sydson Resources” and collectively with Sydson Energy, “Sydson”), where Sydson agreed to sell, transfer and assign to the Company certain onshore oil and gas assets and interests, certain tangible assets, and certain employees and a consultant of Sydson have agree to become employees and a consultant of the Company. Texas South owns interests in seven offshore prospects in the Gulf of Mexico (“GOM”) in conjunction with GulfSlope Energy, Inc. in water depths of between 300’ and 1,000’. GulfSlope has conducted extensive seismic work on the prospects focusing on the high potential subsalt play at depths of 15,000’ to 25,000’ prior to acquiring them in the Federal Lease Sale. The Company owns a 20% working interest (“WI”) in five of the prospects and up to 70% WI in two of the prospects that have shallow oil potential above 5,000’. Sydson is a private oil and gas company with land operations in Texas and Louisiana that has been in business since 1982. The oil and gas assets include the following:

	•	In the Bayou Bouillon Field, St. Martin and Iberville Parishes, Louisiana, Texas South has acquired a 37.5% WI in the Sugarberry South Project comprising 420 acres with a net revenue interest of 70%. The property has two existing wells which have tested at over 400 BOPD combined from two (2) productive zones above 2,100’ with an additional shallower zone behind pipe containing approximately 30’ of oil pay and almost 60’ of gas pay. Texas South expects to install production facilities and drill additional development wells in this fault block and to drill up to three exploratory wells in adjacent fault blocks targeted in the same zones. Through the Sydson transaction, the Company also is now a party to letters of intent to acquire up to a 45% WI in an additional 1,000+ acres in the Bayou Bouillon area based on a proprietary 55 square mile 3-D seismic survey that demonstrates updip potential in existing reservoirs at about 10,000’. The downdip wells in these same reservoirs have produced over 20 MMBO and 21 BCFG from 59 completions. Texas South’s partner in the Bayou Bouillon project, and the owner of a 50% WI in the Bayou Bouillon acreage, is Thyssen Petroleum, USA, a privately held independent oil and gas exploration and production company based in Houston and Monaco.

	•	In Texas, Texas South has acquired a 50% WI in the undrilled acreage above 4,500’ in the West Tuleta Field, Bee County, Texas comprised of approximately 1,800 gross acres and 900 net acres with a net revenue interest of approximately75%. The primary drilling objectives are the Vicksburg and Hockley sands which are structurally high on this acreage to historic downdip production from these sands totaling over 500,000 BO.

	•	In the adjacent Ray Field, also in Bee County, Texas, the Company has acquired a 50% WI in the undrilled, acreage on the Walton, Campbell, and Ray leases comprising approximately 75 gross acres with a net revenue interest of approximately 75%. The primary drilling objectives on this acreage are also the Vicksburg and Hockley sands updip to prior production, also above 3,700’.

	•	In other areas of Southeast Texas, the Company has acquired an interest in a proprietary 85 square mile 3-D seismic survey targeting Lower Wilcox Sands at approximately 10,000’. There are eight currently defined and mapped prospects in which the Company intends to acquire leases that are apparent on the seismic data and match the geologic setting of three existing Lower Wilcox fields within the boundaries of the survey.

	•	Northwest of the survey, the Company intends to acquire leases covering approximately 1,000 acres for horizontal projects above 6,000’ in the Austin Chalk and Buda Lime formation. These projects are adjacent to substantial prior production and contain both conventional and unconventional oil targets.

In connection with the asset acquisition, certain officers and employees of Sydson have become officers, a consultant and employees of the Company, including Michael J. Mayell who became Chief Executive Officer of the Company, James L. Gunderson who became Manager of Land of the Company, Robert L. Goldstein, who will serve as a geological consultant to the Company, and Lecia Alexander, who became Controller of the Company. Certain other non-executive employees and consultants of Sydson became at-will employees of the Company. John B Connally III joined the board of Texas South as chairman.

Mr. Mayell has over 45 years of experience in the oil and gas business. He began his career with Shell Oil Company in New Orleans, La. in the drilling and production engineering groups responsible for drilling and producing fields both onshore and offshore South Louisiana. Mr. Mayell founded Sydson in 1982 and this entity has been in operation since that time. In 1985, Mr. Mayell co-founded the Meridian Resource Corporation (NYSE) and served as the president and chief operating officer of Meridian for over 20 years. Mr. Mayell received his Bachelor of Science degree in mechanical engineering from Clarkston University.

Mr. Connally presently serves as chairman of the Texas Lt. Governor’s Energy Advisory Board. Mr. Connally has significant oil and gas experience, both as a practicing lawyer and as an executive. Mr. Connally was a founding shareholder of Texas South and GulfSlope Energy, Inc., and a founding director of Nuevo Energy, Inc, Endeavor International Corp, and Pure Energy Group (where he also served as chief executive officer) and Pure Gas Partners. Mr. Connally was a law partner with Baker Botts, and received both his Bachelor of Arts and JD from the University of Texas.

Mr. Gunderson has held land positions in Chevron, Murphy, Cities, Ladd and Meridian. Mr. Gunderson has been with Sydson since 2009. Mr. Gunderson received a BBA degree in petroleum land management from the University of Oklahoma.

Mr. Goldstein has served as a consultant to Sydson for over 10 years and has over 40 years of experience in Gulf Coast geology interpretation. Mr. Goldstein has served as a geologist with Amerada Hess, Houston Oil and Minerals and Meridian. Mr. Goldstein received his Bachelor of Arts – Geology degree from Rutgers University and received his Master’s degree in Geology from Florida State University.

Mrs. Alexander began her career in accounting with Arthur Anderson before moving into corporate accounting in 1985. She later opened her consulting practice focusing on the healthcare and oil and gas industries and has been Sydson’s lead accountant since 2010. Mrs. Alexander received her Bachelor in Accountancy degree from the University of Mississippi in 1980.

In connection with the asset acquisition, the Company acquired a variety of proprietary seismic data, computer equipment, furniture and fixtures and other office furniture and equipment. The office of the Company has been moved to 4550 Post Oak Place Dr., Suite 300, Houston, TX 77027.

The consideration payable by the Company to Sydson and affiliates is (i) at Closing, an aggregate of 100 million shares of Company common stock to Michael J. Mayell, (ii) (A) $250,000 through a promissory note due March 5, 2017 and (B) $1,250,000 through the payment by the Company of Sydson’s obligations attributable to retained working interests in the oil and gas prospects conveyed to the Company, to be paid by the Company at the time it pays its associated costs with respect to its ownership interests in such oil and gas prospects, (iii) carried interests to casing point for its working interests on the first well in each of the West Tuleta prospect, Ray Field prospect, one prospect under negotiation, and up to three wells in the Bayou Bouillon prospect to be paid by the Company at the time it pays its associated costs with respect to its ownership interests in such oil and gas prospects, and (iv) a payment of $500,000 for the seismic data at one prospect under negotiation after completion of the first well in such prospect.

In connection with the Closing of the Asset Purchase Agreement, the Company entered into an employment agreement with Mr. Mayell. The term of his employment agreement began on January 4, 2017 and terminates on December 31, 2019. Upon December 31 of each calendar year, commencing on December 31, 2017, the term shall be extended for one additional year, provided that neither the Company nor Employee notify the other on or prior to 90 days before the applicable December 31 ^st date that either party does not intend to extend this Agreement. The Company shall pay to Mr. Mayell a base salary of $420,000 per annum and Mr. Mayell shall be entitled to standard and customary benefits. Mr. Mayell has agreed to standard non-disclosure and non-competition provisions. Upon termination of Mr. Mayell by the Company other than for cause, Mr. Mayell is entitled to receive three years of his then compensation as severance.

Subsequent to the Closing, James M. Askew resigned as an executive officer and director of Texas South and entered into a consulting agreement with the Company that began on January 5, 2017 and terminates on December 31, 2019, and such term shall be extended for an additional one-year period upon December 31 of each calendar year, commencing on December 31, 2017, provided that neither the Company nor Consultant notify the other on or prior to 90 days before the applicable December 31 ^st that either party does not intend to extend this Agreement. The Company shall pay to Mr. Askew $35,000 net per month and issued Mr. Askew 27 million shares of Company common stock. Upon termination of Mr. Askew by the Company other than for cause, Mr. Askew is entitled to receive three years of his then consulting compensation as severance.

Subsequent to the Closing, the Company also entered into an employment agreement with John B. Connally III to serve as chairman of the board that began on January 5, 2017 and terminates on December 31, 2019. Upon December 31 of each calendar year, commencing on December 31, 2017, the term shall be extended for one additional year, provided that neither the Company nor Employee notify the other on or prior to 90 days before the applicable December 31 ^st date that either party does not intend to extend this Agreement. The Company shall pay to Mr. Connally a base salary of $420,000 per annum, issued him 65.1 million shares, and Mr. Connally shall be entitled to standard and customary benefits. Mr. Connally has agreed to standard non-disclosure provisions. Upon termination of Mr. Connally by the Company other than for cause, Mr. Connally is entitled to receive three years of his then compensation as severance.

Item 2.01 Completion of Acquisition or Disposition of Assets

The completion of the acquisition of certain assets is incorporated by reference from Item 1.01 above.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

The incurrence of certain liabilities and obligations in connection with asset acquisitions is incorporated by reference from Item 1.01 above.

Item 3.02 Unregistered Sales of Equity Securities

Between December 6, 2016 and December 8, 2016, Texas South issued an aggregate of 10,000,000 shares of its common stock at a purchase price of $0.02 per share receiving gross proceeds of $200,000, which proceeds were used for general corporate purposes.

On December 13, 2016, the Company issued 500,000 shares of common stock at a purchase price of $0.02 per share receiving gross proceeds of $10,000, which proceeds were used for general corporate purposes.

On December 29, 2016, the Company issued 1,000,000 shares of common stock at a purchase price of $0.02 per share receiving gross proceeds of $20,000, which proceeds were used for general corporate purposes.

On January 3, 2016, the Company issued an aggregate of 14,725,000 shares of common stock for services rendered valued at $0.005 per share.

On January 4, 2016, the Company issued 100,000,000 shares of common stock pursuant to the Asset Purchase Agreement to Mr. Mayell, which shares were valued at $0.005 per share.

On January 5, 2016, the Company issued an aggregate of 92.1 million shares of common stock pursuant to an executive officer and consultant, which shares were valued at $0.005 per share.

The issuance of the shares described above was made without registration under the Securities Act of 1933, as amended (the “Act”), in reliance on the exemptions provided by Section 4(a)(2) of the Act, Regulation D under the Act and in reliance on similar exemptions. No advertising or general solicitation was made in connection with the sale and issuance of the Company’s common stock.

Item 5.01 Changes in Control of Registrant

At the Closing of the Asset Purchase Agreement, Messrs. Mayell and Connally were elected directors with Mr. Connally serving as the chairman and Mr. Mayell was appointed chief executive officer and president of the Company. On January 5, 2017, James Askew resigned as an executive officer and director of the Company.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

The appointment of certain officers, election of certain directors, and resignation of an officer and director are incorporated by reference from Items 1.01 and 5.01 above.

Item 9.01 Financial Statements and Exhibits

The following exhibits are to be filed as part of this Form 8-K:

EXHIBIT NO.		IDENTIFICATION OF EXHIBIT
10.1		Asset Purchase Agreement by and among Texas South Energy, Inc., Sydson Resources, L.P., and Sydson Energy, Inc., dated January 4, 2017
10.2		Employment Agreement by and between the Company and Michael J. Mayell dated January 4, 2017
10.3		Consulting Agreement by and between the Company and James M. Askew dated January 5, 2017
10.4		Employment Agreement by and between the Company and John B. Connally, III dated January 5, 2017
99.1		Press Release dated January 10, 2017

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: January 10, 2017	TEXAS SOUTH ENERGY, INC.

	By:	/s/Michael J. Mayell
		Michael J. Mayell
		Chief Executive Officer

Texas South Energy, Inc. 8-K

Exhibit 10.1

ASSET PURCHASE AGREEMENT

by and among

TEXAS SOUTH ENERGY, INC.,

SYDSON RESOURCES, L.P.,

and

SYDSON ENERGY, INC.

Dated as of January 4, 2017

TABLE OF CONTENTS

Page

	Recitals		1
	Agreement		1
I.	Purchase and Sale of Assets		1
	1.1	Acquired Assets	1
	1.2	Assumed Liabilities	1
	1.3	Excluded Liabilities2	2
	1.4	Delivery of Files	3
II.	Purchase Price		3
	2.1	Purchase Price	3
	2.2	The Closing	3
	2.3	Deliveries at the Closing	3
III.	Representations and Warranties of Seller		4
	3.1	Organization and Capitalization	4
	3.2	Authorization	4
	3.3	No Adverse Consequences	5
	3.4	Consents	5
	3.5	Approval by Shareholders and Partners	5
	3.6	Title to and Condition of Acquired Assets	5
	3.7	Reserved	5
	3.8	Reserved	5
	3.9	Contracts and Commitments	5
	3.10	Labor Matters	7
	3.11	Litigation	7
	3.12	Taxes	7
	3.13	Solvency	7
	3.14	Environmental Matters	7
	3.15	Compliance with Laws	8
	3.16	No Bankruptcy, Etc.	8
	3.17	Intellectual Property	8
	3.18	Fraudulent Transfer	9
	3.19	Other Transactions	9
	3.20	Disclosure of Material Facts	9
	3.21	Acknowledgments by Sydson Resources and Sydson Energy	9

TABLE OF CONTENTS (cont’d)

Page

IV.	Representations and Warranties of Buyer		12
	4.1	Organization	12
	4.2	Authorization	12
	4.3	No Adverse Consequences	12
	4.4	No Conflicts	12
	4.5	Filings, Consents and Approvals	13
	4.6	Issuance of the Securities	13
	4.7	SEC Reports, Financial Statements	13
	4.8	Litigation	13
	4.9	Absence of Certain Changes	13
	4.10	Compliance with Laws	14
V.	Closing		14
	5.1	Seller’s Deliverables	14
	5.2	Buyer’s Deliverables	15
	5.3	Closing into Escrow	15
VI.	Additional Covenants		15
	6.1	Taxes and Liabilities	15
	6.2	Further Assurances	15
	6.3	Transfer of Title	15
	6.4	Obligations with Respect to Employment Contracts and Consulting Agreements Assigned to Buyer	16
	6.5	Financial Statements	16
	6.6	Licenses and Permits	16
	6.7	Payment of Additional Buyer Consideration	16
	6.8	Qualification of Buyer as an Operator	16
VII.	Indemnification, Survival		16
	7.1a	Indemnification by Seller	16
	7.1b	Indemnification by Buyer	16
	7.2	Defense of Third Party Claims	17
	7.3	Indemnification Procedure	17
	7.4	Limits on Indemnification	17
	7.5	Survival	18
VIII.	Miscellaneous Provisions		18
	8.1	Amendment	18
	8.2	Waiver	18
	8.3	Benefit	18
	8.4	Costs and Expenses	18
	8.5	Attorneys’ Fees	18

TABLE OF CONTENTS (cont’d)

Page

8.6	Headings	18
8.7	Governing Law	18
8.8	Notices	19
8.9	Entire Agreement	19
8.10	Severability	19
8.11	Time of the Essence	19
8.12	Independent Counsel	20
8.13	Counterparts	20
Index of Defined Terms		22

Schedules

3.4	Required Consents
3.6	Liens
3.9	Commitments
3.17	Proprietary Assets

Exhibit A	List of Assets and Obligations	A-1
Exhibit B	Assignments of Acquired Assets	B-1
Exhibit C	Executed Required Consents	C-1
Exhibit D	Employment Agreement (Michael Mayell)	D-1

iii

ASSET PURCHASE AGREEMENT

This Asset Purchase Agreement, dated as of January 4, 2017 and effective January 1, 2017, is entered into by and among Texas South Energy, Inc., a Texas corporation (“Buyer”), Sydson Resources, L.P., a Texas limited partnership (“Sydson Resources”), and Sydson Energy, Inc., a Texas corporation (“Sydson Energy” and collectively with Sydson Resources, the “Seller”).

RECITALS

Seller is in the oil and gas business primarily in the states of Texas and Louisiana (the “Business”).

Seller desires to sell, transfer and assign to Buyer, and Buyer desires to purchase from Seller, certain assets of Seller relating to Seller’s Business, all on the terms and subject to the conditions set forth in this Agreement.

AGREEMENT

In consideration of the mutual promises and covenants contained herein, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, the parties hereto agree as follows:

ARTICLE I
PURCHASE AND SALE OF ASSETS

1.1.

Acquired Assets . Upon the terms and subject to the conditions set forth in this Agreement, at the Closing Seller shall sell, convey, assign, transfer and deliver to Buyer, and Buyer shall purchase and accept from Seller, the assets set forth on Exhibit A (collectively, the “Acquired Assets”), subject to any requirements of notice or consent by any third party thereto (“Required Consents”). All Assignments have been executed to transfer the Acquired Assets to Buyer, as attached in Exhibit B. No other assets are being acquired by Buyer.

1.2.

Assumed Liabilities . The Seller shall not sell or assign to the Buyer, and the Buyer shall not assume any liabilities or obligations of the Seller, except that the Buyer will assume and be liable for, and will pay, perform and discharge as and when due, all liabilities and obligations under the Assigned Assets that, by their express terms, arise in connection with events or conditions that occur, or are to be performed, at any time after the Closing Date; provided , h owever , that the Buyer shall not assume any liabilities or obligations of the Seller arising out of any breach of or default under any Assigned Asset that occurs prior to the Closing Date or as a result of the Closing (collectively, the “ Assumed Liabilities ”).

1.3

Excluded Liabilities . Notwithstanding any disclosures made to the Buyer or its agents in the conduct of their due diligence investigations of the Seller or anything herein to the contrary, the Buyer shall not assume any of the liabilities or obligations of the Seller other than the Assumed Liabilities, and the Buyer shall not be or become liable for any claims, demands, liabilities or obligations of the Seller other than the Assumed Liabilities. Without limiting the foregoing, the Buyer shall not assume or agree to perform, pay or discharge, and the Seller shall remain unconditionally liable for and shall pay and satisfy in due course, all obligations, liabilities and commitments, fixed or contingent, known or unknown, accrued or unaccrued, direct or indirect, choate or inchoate, perfected or unperfected, liquidated or unliquidated, of the Seller other than the Assumed Liabilities (the “ Excluded Liabilities ”), including but not limited to the following:

(a)

any Liabilities of Seller arising or incurred in connection with the negotiation, preparation, investigation and performance of this Agreement and the transactions contemplated hereby and thereby, including, without limitation, fees and expenses of counsel, accountants, consultants, advisers and others;

(b)

any Liability (i) for Taxes of Seller (or any equity holder or Affiliate of any of the foregoing), (ii) for Taxes relating to the Business, the Acquired Assets or the Assumed Liabilities for any pre-Closing Taxes, or (iii) for Taxes that arise out of the consummation of the transactions contemplated hereby or that are the responsibility of the Seller;

(c)

any Liabilities relating to or arising out of the Excluded Assets, as well as with respect to Sydson Resources and Sydson Energy;

(d)

any Liabilities in respect of any pending or threatened Action arising out of, relating to or otherwise in respect of the operation of the Business or the Acquired Assets to the extent such Action relates to such operation on or prior to the Closing Date;

(e)

any Liability based on any claim which arises out of or is based upon any express or implied representation, warranty, agreement or guaranty made by the Seller in connection with any of the services provided by Seller or the Business;

(f)

any Liabilities of Seller arising under or in connection with any benefit plan providing benefits to any present or former employee of Seller pre-Closing;

(g)

any Liabilities of Seller for any present or former employees, officers, directors, retirees, independent contractors or consultants of Seller, including, without limitation, any Liabilities associated with any claims for wages or other benefits, bonuses, accrued vacation, workers’ compensation, severance, retention, termination or other payments pre-Closing;

(h)

any pre-Closing trade accounts payable of Seller;

(i)

any Liabilities of Seller or the Business relating or arising from unfulfilled commitments, purchase orders, customer orders or work orders entered into, issued by or otherwise pertaining to Seller or the Business at any time prior to the Closing (other than leases that have been negotiated but not executed and relate to the Acquired Assets);

(j)

any Liabilities to indemnify, reimburse or advance amounts to any present or former officer, director, employee or agent of Seller (including with respect to any breach of fiduciary obligations by same);

(k)

any Liabilities not arising under the Purchased Assets (i) which are not validly and effectively assigned to (and expressly assumed by) Buyer pursuant to this Agreement, (ii) which do not conform to the representations and warranties with respect thereto contained in this Agreement, or (iii) to the extent such Liabilities arise out of or relate to a breach by the Seller of a Contract or other of its obligations prior to the Closing;

(l)

any Liabilities associated with debt, loans or credit facilities of the Seller and/or the Business owed or owing to any Person as to any period pre-Closing; and

(m)

any Liabilities arising out of, in respect of or in connection with the failure by any of the Seller or any of its Affiliates to comply with any Law or Governmental Order.

1.4

Delivery of Files . Upon request, Seller shall deliver to Buyer a copy of any and/or all paper and electronic files for the Acquired Assets.

ARTICLE II
PURCHASE PRICE

2.1.

Purchase Price . The Buyer agrees to pay to Seller (i) at Closing, an aggregate of 100 million shares of Buyer common stock to be issued to Michael J. Mayell (“Securities”), (ii) (A) $250,000 evidenced by a promissory note due 60 days from Closing and (B) $1,250,000 through the payment of Seller’s obligations attributable to Seller’s retained working interests in oil and gas prospects conveyed to Buyer hereunder to be paid by Buyer at the time Buyer pays its associated costs with respect to its acquired working interests in such oil and gas prospects, (iii) carried interests to casing point for Seller’s working interests on the first well in each of the West Tuleta prospect, Ray Field prospect, Wilinda prospect, and in each unit in Bayou Bouillon to be paid by Buyer at the time it pays its associated costs with respect to its ownership interests in such oil and gas prospects, and (iv) a payment of $500,000 for the seismic data at the Magen’s Bay project after completion of the first Magen’s Bay well. The valuation of the Buyer shares of common stock is $0.005 per share.

2.2

The Closing . The closing of the transactions contemplated by this Agreement (the “Closing” or “Closing Date”) shall take place on January 4, 2017 at the offices of Buyer commencing at 9:00 a.m., or at another place and/or time mutually agreed upon by the parties, effective as of January 1, 2017.

2.3

Deliveries at the Closing . At the Closing, (i) the Seller will deliver to the Buyer the deliverables set forth in Section 5.1 hereof and (ii) the Buyer will deliver to the Seller and other third parties the deliverables set forth in Section 5.2 hereof. It is understood and agreed that all deliverables described in Sections 5.1 and 5.2 have been delivered concurrently.

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER

Seller hereby represents and warrants to Buyer that the statements contained in this Article III are true, correct and complete as of the Closing Date, except as set forth in the Schedules accompanying this Agreement.

3.1.

Organization and Capitalization . Sydson Resources is a limited partnership and Sydson Energy is a corporation, each of which is duly formed and validly existing under the laws of the State of Texas, and each has all requisite power and authority to own and operate the Acquired Assets and to carry on the Business as now being conducted.

3.2.

Authorization . Each Seller has full power and authority pursuant to the limited partnership agreement and articles of incorporation, as applicable, to enter into and perform this Agreement and the other transactions contemplated hereby to which it is a party and to consummate the transactions contemplated hereby and thereby. Seller is duly qualified or licensed to conduct business and is in good standing in every jurisdiction in which the nature of its business or the locations of its properties require such qualification or licensing, except for such jurisdictions where the failure to so qualify or be licensed would not have any Material Adverse Effect on Seller’s ability to perform fully its obligations under this Agreement or the other transactions contemplated hereby. This Agreement is duly and validly executed and delivered by Seller and constitutes the legal, valid and binding obligations of Seller, enforceable against Seller in accordance with its terms, except as enforceability may be limited or affected by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and by general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at Law).

3.3.

No Adverse Consequences . Neither the execution and delivery of this Agreement by Seller nor the consummation of the transactions contemplated by this Agreement will:

(a)

result in the creation or imposition of any Lien on any of the Acquired Assets;

(b)

violate or conflict with any provision of Sellers’ partnership agreement or certificate of formation;

(c)

to the Knowledge of the Seller, violate any judgment, order, injunction, decree, rule, regulation or ruling of any Governmental or Regulatory Authority or any other Law applicable to Seller;

(d)

adversely affect the ability of Seller to consummate the transactions contemplated hereby or to perform its obligations hereunder; or

(e)

either alone or with the giving of notice or the passage of time or both, conflict with, constitute grounds for termination or acceleration of, result in the breach of the terms, conditions or provisions of, result in the loss of any benefit to Seller under or constitute a default under any material agreement (including those set forth in Schedule 3.9 ), instrument, license or permit to which either Seller is a party or by which it is bound, except for such termination, acceleration, breach, loss or default that would not have a Material Adverse Effect.

3.4.

Consents . Except for the Required Consents identified on Schedule 3.4 (the copies of executed consents are attached as Exhibit C), there are no consents, authorizations or other orders of, or filing with, any Governmental or Regulatory Authority or acknowledgment by any third Person required for the valid execution, delivery and performance of this Agreement by Seller, assignment of all rights in the Acquired Assets, or consummation of the transactions contemplated hereby, except where the failure to obtain such consent, authorization, order or filing would not have a Material Adverse Effect.

3.5.

Approval by Shareholders and Partners . The limited and general partners of Sydson Resources and all of the shareholders of Sydson Energy, being all of the record and beneficial owners of equity of each Seller, have approved this Agreement and the consummation of the transactions contemplated by this Agreement.

3.6.

Title to and Condition of Acquired Assets . Seller has good, marketable and assignable title to and/or interest in the Acquired Assets, free and clear of any and all Liens, other than (i) statutory Liens for current Taxes, assessments or other governmental charges not yet due and payable or the amount or validity of which is being contested in good faith by appropriate proceedings; and (ii) Liens as described on Schedule 3.6 . Other than as described on Schedule 3.6 , at Closing none of the Acquired Assets will be subject to any restrictions with respect to the transferability thereof, Buyer’s title thereto will not be affected in any way by the transactions contemplated hereby, and there will be no Liens on any of the Acquired Assets. With respect to the Acquired Assets set forth in Exhibit A relating to oil and gas prospects and interests, the Seller represents as follows: (i) with respect to the Bayou Bouillon Project (as referenced in Exhibit A), the Seller’s ownership interests consist of opportunity rights arising out of a letter of intent dated November 1, 2016 by and between Seller and Thyssen Petroleum USA, LLC to acquire working interest in certain prospects that Buyer has been negotiating; (ii) with respect to the Ray Field and the West Tuleta Field (both as referenced in Exhibit A), the Seller is assigning to Buyer a 50% working interest in the undrilled acreage under leases owned by Seller as further identified in Exhibit A; (iii) with respect to the Wilinda Project (as referenced in Exhibit A), the Seller’s ownership interests consist of opportunity rights to acquire working interests in certain prospects that Seller has negotiated; and (iv) with respect to Magen’s Bay Project (as referenced in Exhibit A), the Seller’s ownership interests consists of the use and license rights to the 85 square mile Magen’s Bay 3-D seismic survey and opportxz unity rights to acquire working interest in certain prospects that Seller has generated and is now negotiating. With respect to the oil and gas leases that Seller owns with respect to the Ray Field and West Tuleta Field, the leases are enforceable obligations of the lessors, the Seller is in material compliance with such leases, the Seller has not been informed by (or have knowledge of) any lessor or any third party of an adverse claim or a violation of any Environmental Law or non-compliance with any Governmental or Regulatory Authority, and holds a valid leasehold interest free of any Lien. The Seller’s tangible property and assets are in good condition, except for ordinary wear and tear, and are suitable for their intended purposes. Seller believes that the Buyer will be able to enter into appropriate farm-out, participation or other arrangements with respect to the opportunity rights being transferred hereunder with respect to oil and gas prospects set forth in Exhibit A.

3.7

Reserved .

3.8

Reserved .

3.9

Contracts and Commitments . Schedule 3.9 constitutes a list of the following described material contracts and commitments in which Seller is a party, and which relate to the Acquired Assets (“Commitments”);

partnership, joint venture agreement, farm-in or farm-out agreement, joint operating or similar agreement, participation agreement or letter of intent;

ii.

deed of trust or other security agreement;

iii.

guaranty or suretyship, indemnification or contribution agreement or performance bond;

iv.

employment, consulting, independent contractor or compensation agreement or arrangement for any employee, consultant or independent contractor;

debt instrument, loan agreement or other obligation relating to indebtedness for any Assumed Liabilities;

vi.

deed or other document evidencing an interest in or contract to purchase or sell real property;

vii.

agreement with dealers or sales or commission agents;

viii.

lease of real or personal property, including oil and gas lease, whether as lessor, lessee, sublessor or sublessee in excess of $10,000;

ix.

agreement for the acquisition of services, supplies, equipment or other personal property and involving more than $10,000 in the aggregate;

powers of attorney;

xi.

contracts containing noncompetition covenants; or

xii.

all Proprietary Assets (as defined in Section 3.17), Intellectual Property Rights (as defined in Section 3.17), owned Software, and leased Software of the Seller related to the Acquired Assets and the Business.

True, correct and complete copies of the written Commitments described on Schedule 3.9 are available for delivery by Seller to Buyer upon request. There are no existing defaults, events of default or events, occurrences or acts that, with the giving of notice or lapse of time or both, would constitute defaults, and no penalties have been incurred nor are amendments pending, with respect to the Commitments, except as described in Schedule 3.9 . The Commitments are in full force and effect and are valid and enforceable obligations of the parties thereto in accordance with their terms, except as enforceability may be limited or affected by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and by general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at Law), and no defenses, off-sets or counterclaims have been asserted or, to the best of the Knowledge of Seller may be made by any party thereto, nor has Seller waived any rights thereunder, except as described in Schedule 3.9 . All consents to the Commitments that are required in order to transfer the Acquired Assets to Buyer pursuant to this Agreement are identified in Schedule 3.4 and executed copies of such consents are attached in Exhibit C.

(b)

Except as contemplated herein, Seller has not received notice of any plan or intention of any other party to any Commitment to exercise any right to cancel or terminate any Commitment or agreement, and Seller does not know of any fact that will likely cause any such party to exercise such right. Seller does not currently contemplate, nor does Seller have Knowledge that any other person or entity currently contemplates, any material amendment or change to any Commitment. None of the partners, independent contractors, customers or suppliers of Seller has refused, or communicated that it will or may refuse, to purchase or supply goods or services to or from Seller, as the case may be, or has communicated that it will or may substantially reduce the amounts of goods or services that it is willing to purchase from, or sell to, Seller, in each case if such refusal would have a Material Adverse Effect.

3.10.

Labor Matters . Seller is not a party to any employment contract with any employee (other than as set forth in Schedule 3.9 ), or any union, collective bargaining or other labor agreement with any labor organization, union, group or association with respect to any of the employees.

3.11.

Litigation . There is no claim, action, dispute, proceeding or investigation pending or, to the Knowledge of Seller, threatened against Seller which would affect the Assets before any federal or state court, Governmental or Regulatory Authority relating to the Acquired Assets or Business. Seller is not subject to any outstanding order, writ, injunction or decree that materially and adversely affects the Acquired Assets and the Seller has not received written notice of any action, proceeding, suit, investigation or inquiry pending or that would prevent or hinder the consummation of the transactions contemplated hereby.

3.12.

Taxes .

(a)

Seller has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, creditor, independent contractor, or other third party.

(b)

There is no unpaid liability for Taxes upon any of the Acquired Assets nor is any taxing authority in the process of imposing any Liability for Taxes on any of the Acquired Assets (other than for current Taxes not yet due and payable).

3.13

Solvency . The Seller’s fair saleable value of its assets (excluding the Acquired Assets) exceeds the amount that will be required to be paid on or in respect of the Seller’s existing debts and other liabilities as they mature.

3.14.

Environmental Matters .

(a)

To the Knowledge of Seller, Seller is presently and at all times has been in substantial compliance with all Environmental Laws with respect to the Acquired Assets that, singularly or in the aggregate, has not and would not have a Material Adverse Effect.

(b)

To the Knowledge of Seller, there are no Hazardous Materials on, in, under or affecting the Acquired Assets in violation of applicable Environmental Laws which would have a Material Adverse Effect on the Acquired Assets.

(c)

To the Knowledge of Seller, Seller has no Liability and there is no basis for any present or future charge, complaint, action, suit, proceeding, hearing, investigation, claim or demand against Seller giving rise to any Liability under the Environmental Laws with respect to the Acquired Assets.

3.15.

Compliance with Laws . Seller is not and has not been in violation of any Laws applicable to the Acquired Assets (including, without limitation, Laws relating to the civil rights and equal employment opportunities of the employees), other than violations which singularly or in the aggregate do not and will not have a Material Adverse Effect on the Acquired Assets. Seller has not been charged with, or to the Knowledge of Seller, threatened with a charge of, a violation of any Law that would have a Material Adverse Effect on the Acquired Assets. Seller has not received any written notice of a charge, complaint, action, suit, proceeding, hearing, investigation, claim, demand, or notice filed or commenced against Seller alleging any failure to comply with any such Law.

3.16

No Bankruptcy, etc . There has not been filed any petition or application, or any proceedings commenced, by or against, or with respect to any assets (including the Acquired Assets) of the Seller under Title 11 of the United States Code or any other law, domestic or foreign, relating to bankruptcy, reorganization, compromise, arrangement, insolvency, rehabilitation, conservatorship, readjustment of debt or creditors’ rights.

3.17

Intellectual Property .

(a)

The term “Proprietary Assets” means all material licenses currently owned and/or used by the Seller or necessary to exploit and/or operate the Acquired Assets. The Seller owns, or has the right to use under the agreements or upon the terms described in Schedule 3.17 , all of the Proprietary Assets and has taken actions reasonable to protect the Proprietary Assets. Except as set forth in Schedule 3.17 , the Seller does not require any license or other agreement to use any of the Proprietary Assets, except for licenses or agreements that can be obtained in the Ordinary Course of Business without unreasonable effort, delay, cost, or expense. Except as set forth in Schedule 3.17 , the Seller is not bound by or a party to any options, licenses, or agreements of any kind with respect to the Intellectual Property Rights (as defined below) of any other Person and, to the Seller’s Knowledge, there are no undisclosed outstanding options, licenses, or agreements of any kind relating to the Proprietary Assets. With respect to each item of the Seller’s Proprietary Assets that any third party owns and that the Seller uses pursuant to license, sublicense, agreement or permission: (i) the license, as it relates to the Seller is legal, valid, binding, enforceable, and in full force and effect in all material respects, except as enforceability may be limited or affected by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and by general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at Law); (ii) the Seller is not, and to the Seller’s Knowledge, no other party to the license, sublicense, agreement or permission is in material breach or default, and no event has occurred which with notice or lapse of time or both would constitute a material breach or default or permit termination, modification or acceleration thereunder; (iii) the Seller has not, and to the Seller’s Knowledge, no other party to the license, sublicense, agreement or permission has repudiated any material provision thereof; and (iv) the Seller has not granted any sublicense or similar right with respect to the license, sublicense, agreement or permission other than as permitted by such license, sublicense, agreement or permission.

(b)

The Seller has not violated or infringed, and is currently not violating or infringing, and neither the Seller nor, to the Seller’s Knowledge, any managerial employee or consultant of the Seller has received any communications alleging that the Seller (or any of its employees or consultants) has violated or infringed or, by conducting its business as presently proposed, would violate or infringe, any of the patents, trademarks, service marks, trade names, copyrights, mask-works, licenses, trade secrets, processes, data, know-how, or other intellectual property rights related to the Acquired Assets, if any (“Intellectual Property Rights”), of any other Person. To the Seller’s Knowledge, no third party is currently materially interfering with, infringing upon, misappropriating, diluting, constituting the unauthorized use, misuse or misappropriation of or violating any of the Seller’s currently owned or licensed Intellectual Property Rights.

(c)

Reserved .

(d)

The Seller has maintained the confidentiality and trade secret status of all Intellectual Property Rights owned by the Seller relating to the Acquired Assets that are confidential or trade secrets, as applicable. The Seller has entered into appropriate written assignment agreements as appropriate or required with all employees, consultants and independent contractors who have performed services for the Seller since January 1, 2014. All Seller employees have agreed to maintain the confidentiality (other than those which are not confidential) of, and not to use for any purpose other than on behalf of the Seller, all Intellectual Property Rights and other confidential and proprietary assets of the Seller, and all Intellectual Property Rights developed by any employee and used or proposed to be used by the Seller was developed within such employee’s scope of work at the Seller.

3.18

Fraudulent Transfer . Neither this Agreement nor the transactions contemplated by this Agreement shall be considered a fraudulent transfer pursuant to the Texas Uniform Fraudulent Transfer Act.

3.19

Other Transactions . Other than this Agreement and the transactions contemplated hereby, the Seller has not entered into any agreement, letter of intent or understanding to sell or transfer any of the Acquired Assets.

3.20

Disclosure of Material Facts . To Seller’s Knowledge, there is no fact or omission of a fact (other than general economic or industry conditions) that has, or reasonably believes could have, a Material Adverse Effect on the Acquired Assets that has not been set forth in this Agreement (including Schedules).

3.21

Acknowledgments by Sydson Resources and Sydson Energy .

(a)

The Seller recognizes that the purchase of the Securities involves a high degree of risk including, but not limited to, the following: (a) the Buyer has a limited operating history with a history of losses and requires additional funds to conduct its business; (b) an investment in the Buyer is highly speculative, and only investors who can afford the loss of their entire investment should consider investing in the Buyer and the Securities; (c) the Seller may not be able to liquidate its investment; (d) transferability of the Securities is extremely limited and the Buyer will not be registering the resale of the Shares; (e) in the event of a disposition, the Seller could sustain the loss of its entire investment; (f) the Buyer has not paid any dividends since its inception and does not anticipate paying any dividends; and (g) the Buyer may issue additional securities in the future which have rights and preferences that are senior to those of the Securities. Without limiting the generality of the representations set forth in Section 1.5 below, the Seller represents that the Seller has carefully reviewed all of the Buyer’s filings made with the Securities and Exchange Commission (“SEC”) pursuant to the Securities Exchange Act of 1934, as amended (“Exchange Act”) through the date of execution hereof (“SEC Filings”) and has had the opportunity to ask management any questions regarding the SEC Filings.

(b)

Sydson Resources and Sydson Energy each represent that it is an “accredited investor” as such term is defined in Rule 501 of Regulation D (“Regulation D”) promulgated under the Securities Act of 1933, as amended (“Securities Act”), and that the Seller is able to bear the economic risk of an investment in the Securities.

(c)

The Seller hereby acknowledges and represents that (a) the Seller has knowledge and experience in business and financial matters, prior investment experience, or the Seller has employed the services of a “purchaser representative” (as defined in Rule 501 of Regulation D), attorney and/or accountant to read all of the documents furnished or made available by the Buyer to the Seller to evaluate the merits and risks of such an investment on the Seller’s behalf; (b) the Seller recognizes the highly speculative nature of this investment; and (c) the Seller is able to bear the economic risk that the Seller hereby assumes.

(d)

The Seller hereby acknowledges that Seller (a) has carefully reviewed the SEC Filings, (b) has been furnished by the Buyer with all information regarding the Buyer, and any additional information that the Seller has requested or desired to know, and has been afforded the opportunity to ask questions of and receive answers from duly authorized officers or other representatives of the Buyer concerning the Buyer and the terms and conditions of the sale of the Securities; and (c) has received and reviewed the Seller’s draft balance sheet as of October 31, 2016 and income statement for the 12 months ended October 31, 2016 (“October 2016 Financials”).

(e)

In making the decision to invest in the Securities, the Seller has relied solely upon the information provided by the Buyer as well as the SEC Filings. To the extent necessary, the Seller has retained, at its own expense, and relied upon appropriate professional advice regarding the investment, tax and legal merits and consequences of this Agreement and the purchase of the Securities hereunder.

(f)

The Seller represents that (i) the Seller was contacted regarding the sale of the Securities by the Buyer, and (ii) no Securities were offered or sold to it by means of any form of general solicitation or general advertising, and in connection therewith, the Seller did not (A) receive or review any advertisement, article, notice or other communication published in a newspaper or magazine or similar media or broadcast over television or radio, whether closed circuit, or generally available; or (B) attend any seminar meeting or industry investor conference whose attendees were invited by any general solicitation or general advertising.

(g)

The Seller hereby represents that the Seller, either by reason of the Seller’s business or financial experience or the business or financial experience of the Seller’s professional advisors (who are unaffiliated with and not compensated by the Buyer or any affiliate or selling agent of the Buyer, directly or indirectly), has the capacity to protect the Seller’s own interests in connection with the transaction contemplated hereby.

(h)

The Seller hereby acknowledges that the offering of the Securities has not been reviewed by the SEC nor any state regulatory authority since the offering is intended to be exempt from the registration requirements of Section 5 of the Securities Act pursuant to Regulation D promulgated thereunder. The Seller understands that the Securities have not been registered under the Securities Act or under any state securities or “blue sky” laws and agrees not to sell, pledge, assign or otherwise transfer or dispose of the Securities unless they are registered under the Securities Act and under any applicable state securities or “blue sky” laws or unless an exemption from such registration is available.

(i)

The Seller understands that the Securities have not been registered under the Securities Act by reason of a claimed exemption under the provisions of the Securities Act that depends, in part, upon the Seller’s investment intention. In this connection, the Seller hereby represents that the Seller is purchasing the Shares for the Seller’s own account for investment and not with a view toward the resale or distribution to others.

(j)

The Seller understands that the Buyer was a “shell company” as defined in Rule 405 of the Securities Act, and that there is a limited trading market for the Shares and that an active market may not develop for the Shares. The Buyer filed its Form 10 type information pursuant to Rule 144(i)(2) in 2014. The Seller understands and hereby acknowledges that the Buyer is under no obligation to register any of the Shares under the Securities Act or any state securities or “blue sky” laws.

(k)

The Seller understands that the Securities are being offered and sold in reliance on specific exemptions from the registration requirements of federal and state securities laws and that the Buyer and the principals and controlling persons thereof are relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgments, and understandings set forth herein in order to determine the applicability of such exemptions and the undersigned’s suitability to acquire Securities.

(l)

The Seller consents to the placement of a legend on any certificate or other document evidencing the Securities that such securities have not been registered under the Securities Act or any state securities or “blue sky” laws and setting forth or referring to the restrictions on transferability and sale thereof contained in this Agreement. The Seller is aware that the Buyer will make a notation in its appropriate records with respect to the restrictions on the transferability of such securities. The legend to be placed on each certificate shall be in form substantially similar to the following:

“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR ANY STATE SECURITIES OR “BLUE SKY LAWS,” AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED ABSENT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR COMPLIANCE WITH RULE 144 PROMULGATED UNDER SUCH ACT, OR UNLESS THE BUYER HAS RECEIVED AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE BUYER AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.”

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer hereby represents and warrants to Seller, as of the Closing Date, as follows:

4.1.

Organization . Buyer is a corporation duly formed and validly existing under the laws of the State of Nevada, and has all requisite corporate power and corporate authority to own and operate its properties and to carry on its business as now being conducted.

4.2.

Authorization . Buyer has full corporate power and corporate authority to enter into and perform this Agreement and the other documents contemplated herby to which it is a party and to consummate the transactions contemplated hereby and thereby. Buyer is duly qualified or licensed to do business as a foreign corporation and is in good standing in Texas. This Agreement has been, and at the Closing the other transactions contemplated hereby to which Buyer is a party will be, duly and validly executed and delivered by Buyer and constitutes the legal, valid and binding obligations of Buyer, enforceable against Buyer in accordance with its terms, except as enforceability may be limited or affected by applicable bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting creditors’ rights generally and by general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at Law).

4.3.

No Adverse Consequences . Neither the execution and delivery of this Agreement by Buyer, nor the consummation of the transactions contemplated by this Agreement, will:

(a)

violate or conflict with any provision of Buyer’s articles of incorporation or bylaws; or

(b)

violate any judgment, order, injunction, decree, rule, regulation or ruling of any Governmental or Regulatory Authority, or any other Law applicable to Buyer; or

(c)

adversely affect the ability of Buyer to consummate the transactions contemplated hereby or to perform its obligations hereunder; or

(d)

either alone or with the giving of notice or the passage of time or both, conflict with, constitute grounds for termination or acceleration of, result in the breach of the terms, conditions or provisions of, result in the loss of any benefit to Buyer under or constitute a default under any material agreement, instrument, license or permit to which either Buyer is a party or by which it is bound, except for such termination, acceleration, breach, loss or default that would not have a Material Adverse Effect on Buyer’s ability to consummate the transactions contemplated hereby.

4.4

No Conflicts . The execution, delivery and performance of the Agreement by the Buyer and the consummation by the Buyer of the transactions contemplated thereby do not and will not (i) conflict with or violate any provision of the Buyer’s articles of incorporation or bylaws, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a debt or otherwise) or other understanding to which the Buyer is a party or by which any property or asset of the Buyer is bound or affected, or (iii) result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Buyer is subject (including federal and state securities laws), or by which any property or asset of the Buyer is bound or affected.

4.5

Filings, Consents and Approvals . The Buyer is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Buyer of the Agreement , other than (i) filings required by state securities laws, if applicable, or (ii) the filing of a Notice of Sale of Securities on Form D with the SEC under Regulation D of the Securities Act, if applicable.

4.6

Issuance of the Securities . The Securities have been duly authorized and, when issued and paid for in accordance with the Agreement, will be duly and validly issued, fully paid and non-assessable, free and clear of all Liens. Assuming the accuracy of the representations and warranties of the Seller made herein, the issuance by the Buyer of the Securities is exempt from registration under the Securities Act and all applicable state securities laws.

4.7

SEC Reports; Financial Statements . The Buyer has filed all SEC Filings required to be filed by it under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the twenty-four months preceding the date hereof. Since January 1, 2015, the SEC Filings have complied in all material respects with the requirements of the Securities Act and the Exchange Act and the rules and regulations of the SEC promulgated thereunder, and none of the SEC Filings, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The financial statements of the Buyer included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the SEC with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with GAAP applied on a consistent basis during the periods involved, except as may be otherwise specified in such financial statements or the notes thereto, and fairly present in all material respects the financial position of the Buyer as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.

4.8

Litigation . There is no Action which adversely affects or challenges the legality, validity or enforceability of any of the Agreement or the Securities. Neither the Buyer nor any director or officer thereof (in his or her capacity as such with respect to the Buyer), is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. To the knowledge of the Buyer, there is not pending any investigation by the SEC involving the Buyer or any current director or officer of the Buyer (in his capacity as such). The SEC has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Buyer under the Exchange Act or the Securities Act.

4.9

Absence of Certain Changes . Since October 31, 2016, as reflected on the October 2016 Financials, Buyer has not:

(a)

suffered any material adverse effect or otherwise experienced a material adverse change in its financial condition or its business operations;

(b)

mortgaged, pledged or subjected any of its material assets to any Lien;

(c)

suffered any damage or destruction to or loss of any assets (whether or not covered by insurance) that will likely or does materially and adversely affect the financial condition of Buyer;

(d)

acquired or disposed of any of the material assets or incurred any material Liabilities or obligations, except in the Ordinary Course of Business;

(e)

written up or written down the carrying value of any of its assets; or

(f)

entered into any other material commitment or transaction or experienced any other material event resulting in a material adverse effect on the financial condition of Buyer, other than this Agreement.

4.10

Compliance with Laws . Buyer is not and has not been in violation of any Laws applicable to its operations (including, without limitation, Laws relating to the civil rights and equal employment opportunities of the employees), other than violations which singularly or in the aggregate do not and will not have a material adverse effect on Buyer’s financial condition. Buyer has not been charged with a violation of any Law that would have a material adverse effect on Buyer’s financial condition. Buyer has not received any written notice of a charge, complaint, action, suit, proceeding, hearing, investigation, claim, demand, or notice filed or commenced against Buyer alleging any failure to comply with any such Law.

ARTICLE V
CLOSING

5.1.

Seller’s Deliverables . Seller shall deliver on Closing the following:

(a)

Each Seller shall have delivered a certificate, executed on its behalf by its general partner or chief executive officer, as appropriate, dated as of the Closing Date, certifying the resolutions adopted by the Seller approving the transactions contemplated by this Agreement and the other documents contemplated herein;

(b)

Each Seller shall have physically delivered to Buyer the Acquired Assets as set forth on Exhibit A;

(c)

Each Seller shall have delivered to Buyer satisfactory executed Assignments, as set forth in Exhibit B, executed by each Seller as appropriate;

(d)

Each Seller shall have delivered to Buyer copies of the Required Consents set forth on Schedule 3.4, which executed consents are attached hereto as Exhibit C;

(e)

Michael J. Mayell shall have delivered to Buyer an executed employment agreement in the form attached as Exhibit D; and

(f)

Executed copies of the joint development agreement and joint operating agreement with Thyssen Petroleum USA, LLC (or affiliate hereof).

5.2

Buyer’s Deliverables . Buyer shall deliver on Closing the following:

(a)

Buyer shall have delivered (i) issuance instructions to its transfer agent for the issuance of common stock certificates of Buyer in the name of Michael J. Mayell in the amount of 100 million shares of common stock, and (ii) a promissory note to pay $250,000 to Seller within 60 days of the Closing.

(b) Buyer shall have delivered to Buyer executed Assignments, as set forth in Exhibit B;

(c)

Buyer shall have delivered a certificate, executed on behalf of the Buyer by its Secretary, dated as of the Closing Date, certifying the resolutions adopted by the Buyer approving the transactions contemplated by this Agreement and the other documents contemplated herein;

(d)

Buyer shall deliver to Mr. Mayell an executed employment agreement in the form attached hereto as Exhibit D;

(e)

Buyer shall deliver a board resolution increasing the number of board members to three and appointing Michael J. Mayell and John B. Connally as new directors to fill the increased board positions; and

(f)

Buyer shall wire $325,000 to Thyssen Petroleum USA, LLC (or its affiliate) concurrent with receipt of the deliverables set forth in Section 5.1(f).

5.3

Deliveries at Closing. It is understood and agreed that all deliverables described in Sections 5.1 and 5.2 have been delivered concurrently.

ARTICLE VI
ADDITIONAL COVENANTS

Buyer and Seller covenant and agree that they will act in accordance with the following:

6.1

Taxes and Liabilities . Seller shall be responsible to pay any and all of its Liabilities and Taxes owed by Seller prior to the Closing and as resulting from the transaction contemplated in this Agreement. Buyer shall be responsible to pay any and all of its Liabilities and Taxes owed by Buyer resulting from the transaction contemplated in this Agreement.

6.2

Further Assurances . Each party agrees to perform any further acts and to execute and deliver such further documents which may be reasonably necessary to carry out the terms of this Agreement and the transactions contemplated hereby.

6.3

Transfer of Title . Seller agree to take any and all further action reasonably necessary to transfer title of, or rights or opportunities to, any of the Acquired Assets to Buyer.

6.4

Obligation with respect to Employment Contracts and Consulting Agreements Assigned to Buyer . Buyer agrees for at least six months to honor the employment and consulting arrangements to the employees and consultants identified on Exhibit A.

6.5.

Financial Statements . In the event that Buyer is required to prepare audited financial statements with respect to the Acquired Assets, Seller agrees to cooperate with Buyer in preparing and providing the necessary financial data in order to assist Buyer in preparing such audited and pro-forma financial statements to be filed with the SEC pursuant to Form 8-K.

6.6

Licenses and Permits . The Seller shall transfer to Buyer or assist Buyer in obtaining the necessary licenses, permits, consents, approvals, orders, certificates and authorizations pertaining to or required by the Buyer to operate the Acquired Assets in accordance with applicable Legal Requirements and Commitments.

6.7

Payment of Additional Buyer Consideration . Buyer shall undertake and be diligent in the payment to Seller of the post-Closing consideration as set forth in Section 2.1(ii)(B), (iii), and (iv).

6.8

Qualification of Buyer as an Operator . Seller shall assist Buyer in obtaining the necessary qualification and permits to allow Buyer to serve as “operator” of the Acquired Assets.

ARTICLE VII
INDEMNIFICATION; SURVIVAL

7.1(a)

Indemnification by Seller . On and after the Closing Date, Seller shall indemnify, hold harmless and defend Buyer and its agents for, from and against any and all losses incurred by Buyer arising out of or in connection with:

(i)

Any breach or inaccuracy of any representation or warranty of Seller made in this Agreement or in the Schedules attached hereto or in a certificate delivered by Seller hereunder including but not limited to, claims arising under the Texas Uniform Fraudulent Transfer Act, claims arising with respect to Taxes, claims arising with respect to workman’s compensation or severance payments, and claims relating to the Excluded Liabilities of Seller; or

(ii)

Any failure by Seller to fulfill any of its covenants or other agreements hereunder.

(b)

Indemnification by Buyer . On and after the Closing Date, Buyer shall indemnify, hold harmless and defend Seller and its agents for, from and against any and all losses incurred by Seller arising out of or in connection with:

(i)

Any breach or inaccuracy of any representation or warranty of Buyer made in this Agreement or in the Schedules attached hereto or in a certificate delivered by Buyer hereunder including but not limited to, claims arising with respect to Taxes; or

(ii)

Any failure by Buyer to fulfill any of its covenants or other agreements hereunder.

7.2

Defense of Third-Party Claims . The indemnifying party shall have the right to conduct and control at its own cost, through its own counsel, the defense, compromise or settlement of any third-party claim, action or suit involving the indemnified party or the Acquired Assets as to which indemnification is sought, and the indemnified party shall reasonably cooperate at no cost and furnish any records, information and testimony and attend any conferences, discovery proceedings, hearings, trials and appeals as the indemnifying party may reasonably request. The indemnified party shall be entitled at any time to participate in (but not direct) the defense of any such claim, action or proceeding through its own counsel and at its own expense. The indemnified party shall not compromise or settle any third party claim that is subject to indemnification under this Agreement without the prior written consent of the indemnifying party.

7.3

Indemnification Procedure .

(a)

Procedure. Promptly after receipt by the indemnified party of notice of any action, suit, proceeding, audit, claim or potential claim (any of which is hereinafter individually referred to as a “Circumstance”), which could give rise to a right to indemnification pursuant to Section 7.1 or 7.2, the indemnified party shall give the indemnifying party written notice describing the Circumstance in reasonable detail; provided, that failure of indemnified party to give such notice to the indemnifying party shall not relieve the indemnifying party from any of its indemnification obligations hereunder unless (and then only to the extent) that the failure to give such notice prejudices the indemnifying party or the defense of the Circumstance by the indemnifying party. Indemnifying party shall pay such obligation and assume such Liability in full within twenty (20) days of the date indemnified party provides written notice of the Circumstance, unless indemnifying party disputes such Circumstance or its obligation to indemnify the indemnified party in connection with such Circumstance in writing within twenty (20) days from the date of written notice of such Circumstance provided to indemnifying party. If the indemnifying party timely delivers such a written objection to the indemnified party, the indemnified party and the indemnifying party shall use commercially reasonable efforts to resolve any such objections, but if a final resolution is not obtained within twenty (20) days after the receipt of the written objections, the indemnified party and the indemnifying party shall submit the matter to binding arbitration pursuant to paragraph (b) of this Section, unless they mutually agree to extend their negotiations.

(b)

Arbitration. If any dispute should arise between Buyer and Seller under this Agreement, all claims, disputes, controversies, differences or other matters in question arising out of this Agreement shall be resolved by binding arbitration in Houston, Texas, in accordance with the rules for expedited, documents only proceedings of the American Arbitration Association. This provision to arbitrate shall be enforceable in district court.

7.4

Limits on Indemnification . In no event shall either Buyer’s or Seller’s aggregate Liabilities for all claims for indemnification hereunder exceed $200,000. Notwithstanding anything herein to the contrary, in no event shall either Buyer or Seller have any liability or obligation to indemnify the other hereunder unless and until the aggregate value of all liabilities incurred by the party for which indemnification hereunder is sought exceeds an amount equal to Twenty Thousand Dollars ($20,000), and then only to the extent of such excess. Notwithstanding anything in this Agreement to the contrary, the Liabilities of either Buyer or Seller in connection with any of its indemnification obligations hereunder shall be reduced on a dollar for dollar basis by any insurance proceeds actually received by the indemnified party with respect to such Liabilities. Notwithstanding anything herein to the contrary, in no event shall either Buyer or Seller be obligated to indemnify any Person hereunder for any punitive or consequential damages.

7.5.

Survival . The representations and warranties contained in this Agreement or in any document delivered pursuant to or in connection with the Closing shall survive the Closing for a period of eighteen months thereafter (the “Survival Date”). If notice of any claim subject to indemnification is given on or before the Survival Date, the indemnification right hereunder shall survive until such claim has been finally resolved and all indemnification rights have been satisfied.

ARTICLE VIII
MISCELLANEOUS PROVISIONS

8.1.

Amendment . This Agreement may be amended, modified or supplemented only by written agreement of Seller and Buyer.

8.2.

Waiver . The failure by either party to enforce at any time or for any period of time any provision of this Agreement shall not be construed as a waiver of that provision or the right thereafter to enforce that provision. No waiver by either party of any of the terms or conditions of this Agreement or any of their respective rights under this Agreement shall be effective unless such waiver is in writing and signed by the party charged with the waiver.

8.3.

Benefit . This Agreement shall be binding upon and shall inure solely to the benefit of the parties and their respective successors and assigns.

8.4.

Costs and Expenses . Except as otherwise expressly provided in this Agreement each party shall be solely responsible for all costs and expenses incurred by it in connection with the negotiation, preparation, execution, and performance of this Agreement and the transactions contemplated hereby.

8.5.

Attorneys’ Fees . Except as otherwise expressly provided in this Agreement, if any action or proceeding is commenced by either party to enforce their rights under this Agreement or to collect damages as a result of the breach of any of the provisions of this Agreement, the prevailing party in such action or proceeding, including any bankruptcy, insolvency or appellate proceedings, shall be entitled to recover all reasonable costs and expenses, including, without limitation, reasonable attorneys’ fees and court costs, in addition to any other relief awarded by the court.

8.6.

Headings . The Article and Section headings contained in this Agreement are for convenience only, and shall not control or affect the meaning or construction of this Agreement.

8.7.

Governing Law . This Agreement and all transactions contemplated hereby shall be governed, construed and enforced in accordance with the laws of the State of Texas, without giving effect to the conflict of laws provisions thereof, and any action or proceeding seeking to enforce any provision of this Agreement. The venue shall be Harris County, Texas.

8.8.

Notices . Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via facsimile (provided the sender receives a machine-generated confirmation of successful transmission) at the applicable facsimile number or via email at the email address specified in this Section prior to 5:30 p.m. (Houston time) on a business day, (b) the next business day after the date of transmission, if such notice or communication is delivered via facsimile at the applicable facsimile number or via email at the email address specified in this Section on a day that is not a business day or later than 5:30 p.m. (Houston time) on any business day, (c) the business day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (d) upon actual receipt by the Party to whom such notice is required to be given. Notices shall be addressed to:

(a)

If to Seller, to:

Sydson Resources, L.P.

4550 Post Oak Place Dr., Suite 300

Houston, Texas 77027

Email: mmayell@sydson.com

Sydson Energy, Inc.

4550 Post Oak Place Dr., Suite 300

Houston, Texas 77027

Email: mmayell@sydson.com

(b)

If to Buyer, to:

Texas South Energy, Inc.

3 Riverway, Suite 1800

Houston, Texas 77056

Email: jaskew@asconnenergy.com

8.9.

Entire Agreement : This Agreement and the Schedules, exhibits, index of defined terms, and certificates referred to herein or attached hereto embody the entire agreement and understanding of the parties with respect to the transactions contemplated by this Agreement and supersede all prior agreements and understandings relating to matters provided for herein.

8.10.

Severability . If any provision of this Agreement or application thereof to any person or circumstance shall to any extent be invalid or unenforceable, the remainder of this Agreement (including the application of such provision to persons or circumstances other than those to which it is held invalid or unenforceable) shall not be affected thereby, and each provision of this Agreement shall be valid and enforced to the fullest extent permitted by law.

8.11.

Time of the Essence . Time is of the essence of this Agreement.

8.12.

Independent Counsel . Buyer and Seller each acknowledge that: (a) they have been represented by independent counsel in connection with this Agreement, (b) they have executed this Agreement with the advice of such counsel, and (c) this Agreement is the result of negotiations between the parties hereto and the advice and assistance of their respective counsel.

8.13.

Counterparts . This Agreement may be executed in any number of counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective duly authorized officers as of the date first above written.

BUYER :

TEXAS SOUTH ENERGY, INC.
By:	/s/ James M. Askew
Name:	James M. Askew
Title:	Chief Executive Officer
SELLER:
SYDSON RESOURCES, L.P.
By:	/s/ Michael J. Mayell
Name:	Michael J. Mayell
SYDSON ENERGY, INC.
By:	/s/ Michael J. Mayell
Name:	Michael J. Mayell
Title:	Chief Executive Officer

INDEX OF DEFINED TERMS

As used in this Agreement, the following defined terms have the meanings indicated below:

“ Action ” means any action, cause of action (whether at law or in equity), arbitration, claim or complaint by any Person alleging potential liability, wrongdoing or misdeed of another Person, or any administrative or other similar proceeding, criminal prosecution or investigation by any Governmental Authority alleging potential liability, wrongdoing or misdeed of another Person.

“ Affiliate ” means any Person that directly, or indirectly through one or more intermediaries, controls or is controlled by or is under common control with the Person specified. For purposes of this definition, control of a Person means the power, direct or indirect, to direct or cause the direction of the management and policies of such Person, whether by contract or otherwise.

“ Agreement ” means this Asset Purchase Agreement, the exhibits and Schedules hereto, the Index of Defined Terms and the certificates required to be delivered hereunder.

“ Acquired Assets ” has the meaning ascribed to it in Section 1.1 of this Agreement.

“ Assignments ” shall refer to the agreement attached hereto as Exhibit B that are required in order to transfer the Acquired Assets to Buyer.

“ Business ” has the meaning ascribed to it in Recital “A” of this Agreement.

“ Buyer ” has the meaning ascribed to it in the first paragraph of this Agreement.

“ Circumstance ” has the meaning ascribed to it in Section 7.3 of this Agreement.

“ Closing ” has the meaning ascribed to it in Section 2.3 of this Agreement.

“ Closing Date ” shall mean the close of business on the date of the Closing.

“ Commitments ” has the meaning ascribed to in Section 3.9(a) of this Agreement.

“ Environmental Laws ” means any environmental law, regulation, rule, ordinance, by-law or order or determination of any governmental or judicial authority at the federal, state, or local level, applicable to the Business which is existing as of the date of this Agreement.

“ GAAP ” means generally accepted accounting principles, consistently applied throughout the specified period and in the immediately prior comparable period.

“ Governmental or Regulatory Authority ” means any court, tribunal, arbitrator, authority, agency, commission, official or other instrumentality of the United States, any foreign country, or any domestic or foreign state, county, city or other political subdivision.

“ Hazardous Material ” means any hazardous or toxic substance or waste as defined in applicable Environmental Laws.

“ Knowledge” in connection with any representation or warranty given by the Seller, shall mean the actual knowledge of Michael J. Mayell, and the knowledge that Michael J. Mayell would have, after due inquiry; and “knows” or “is aware” shall have a correlative meaning.

“ Laws ” means all laws, statutes, rules, regulations, ordinances and other pronouncements having the effect of law of the United States, any foreign country, or any domestic or foreign state, county, city, or other political subdivision or of any Governmental or Regulatory Authority.

“ Legal Requirements ” shall mean all statutes, laws, ordinances, codes, rules, regulations or other legal requirement enacted, adopted, promulgated or applied by any Governmental Authority.

“ Liabilities ” or “ Liability ” means any and all of Seller’s debts, losses, liabilities, offsets, claims, damages, fines, commitments, obligations, payments and accounts payable (including, without limitation, those arising out of any award, demand, assessment, settlement, judgment or compromise relating to any Action), and accruals for out-of-pocket costs and expenses (including, without limitation, reasonable attorneys’ fees and expenses incurred in investigating, preparing or defending any Action) of any kind or nature whatsoever, whether absolute, accrued, contingent or other, and whether known or unknown.

“ Lien ” means any mortgage, deed of trust, pledge, hypothecation, assignment, security interest, lien (statutory or otherwise), preference, priority, charge or other encumbrance, adverse claim (whether pending or, to the knowledge of the Person against whom the adverse claim is being asserted, threatened) or restriction of any kind affecting title or resulting in an encumbrance against property, real or personal, tangible or intangible, or a security interest of any kind, including, without limitation, any easement, servitude, encroachment, conditional sale or other title retention agreement, any right of first refusal on real property, and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statute) of any jurisdiction (other than a financing statement which is filed or given solely to protect the interest of a lessor).

“ Material Adverse Effect ” means an adverse effect, event, violation, inaccuracy or circumstance of Ten Thousand Dollars and 00/100 ($ 10 ,000) or more on any representation, warranty, condition (financial or otherwise), operating results, business, prospects, assets, operations, employee relations or customer or supplier relations of the Seller.

“Ordinary Course of Business” means the ordinary course of business, materially consistent with past custom and practice (including with respect to quantity and frequency).

“ Person ” means any natural person, corporation, general partnership, limited partnership, proprietorship, limited liability company, limited liability partnership, other business organization, trust, union, association, or Governmental or Regulatory Authority.

“ Purchase Price ” has the meaning ascribed to it in Section 2.1 of this Agreement.

“ Required Consents ” means the consents set forth in Schedule 3.4, of which executed copies are set forth in Exhibit C.

“ Schedule ” means the disclosure schedules which are referred to through this Agreement.

“ Seller ” has the meaning ascribed to it in the first paragraph of this Agreement.

“ Software ” shall mean all software, including without limitation data files, source code, object code, application programming interfaces, computerized databases and other software-related specifications and documentation.

“ Survival Date ” has the meaning ascribed to in Section 7.5 of this Agreement.

“ Taxes ” or “ Tax ” means all taxes, charges, fees, levies and other assessments, including, without limitation, income, excise, property, payroll, sales, use, franchise and other taxes, imposed by any federal, state, local or foreign taxing authority, including any interest, penalties or additions.

Texas South Energy, Inc. 8-K

Exhibit 10.2

Employment Agreement
(Michael J. Mayell)

This Employment Agreement (“Agreement”) is entered into effective as of January 4, 2017 (the “Effective Date”), by and between Texas South Energy, Inc., a Nevada corporation (the “Company”), and Michael J. Mayell (“Employee”).

WHEREAS, the Company wishes to employ Employee and Employee wishes to be employed by the Company; and

WHEREAS, the Company and Employee desire to enter into an agreement reflecting the terms of the employment relationship, including the termination thereof;

NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties, and agreements contained herein, and for other valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree as follows:

Employment . The Company hereby employs Employee, and Employee will hereby be employed by the Company, on the terms and conditions set forth in this Agreement.

Term of Employment . Subject to the provisions for earlier termination provided in this Agreement, the term of this Agreement shall begin on January 4, 2017 and shall terminate on December 31, 2019. Upon December 31 of each calendar year, commencing on December 31, 2017, the term shall be extended for one additional year (the initial Term, together with each such year extension shall be referred to as the “Term”), provided that neither the Company nor Employee notify the other on or prior to 90 days before the applicable December 31 ^st date that either party does not intend to extend this Agreement.

Employee’s Duties . During the Term, Employee shall serve as President and Chief Executive Officer with such duties and responsibilities as may from time to time be assigned to him by the board of directors of the Company (the “ Board ”), provided that such duties are consistent with the customary duties of such position. During the Term, Employee shall serve as a member of the Board. Employee agrees to devote his skill and attention to the business and affairs of the Company and to use reasonable best efforts to perform faithfully and efficiently his duties and responsibilities. Employee shall not, either directly or indirectly, enter into any full-time employment with or for any person, firm, association or corporation other than the Company during the Term; provided, however, that Employee shall not be prohibited from (i) engaging in charitable activities, educational mentoring, and community affairs, (ii) serving, with the prior approval of the Company’s Board, on the boards of a reasonable number of business entities, trade associations and charitable organizations, (iii) managing his personal investments and affairs related to another business or companies (either as a principal, partner, shareholder, or member of such business), including operating the business of Sydson Energy, Inc. and Sydson Resources, L.P., or (iv) any other such activity approved by the Board; provided that such activities do not either individually or in the aggregate materially interfere with the performance of his duties hereunder. Employee shall at all times observe and comply with all lawful directions and instructions of the Board.

Compensation . For services rendered by Employee under this Agreement, the Company shall pay to Employee a base salary of $420,000 per annum (“ Base Compensation ”). The Base Compensation is payable in accordance with the Company’s customary payroll practices and subject to customary withholdings, including share withholdings as described in Section 14(b) hereof. The amount of Base Compensation shall be reviewed by the Board on an annual basis as of the close of each 12-month period of this Agreement and may be increased as the Board may deem appropriate. In the event the Board (or, if established, the compensation committee thereof) deems it appropriate to increase Employee’s annual base salary, said increased amount shall thereafter be the “Base Compensation.” Employee’s Base Compensation, as increased from time to time, may not thereafter be decreased unless agreed to by Employee. Nothing contained herein shall prevent the Board from paying additional compensation to Employee in the form of bonuses or otherwise during the Term.

Bonus . The Board in its sole discretion may grant the Employee a bonus (“ Bonus ”) payable in shares of restricted common stock or cash, as determined.

Additional Benefits . In addition to the Base Compensation provided for in Section 5 herein, Employee shall be entitled to the following:

(a)

Expenses . The Company shall, in accordance with any rules and policies that it may establish from time to time for executive officers, reimburse Employee for business expenses reasonably incurred in the performance of his duties. It is understood that Employee is authorized to incur reasonable business expenses for promoting the business of the Company, including reasonable expenditures for travel, lodging, meals and client or business associate entertainment. Request for reimbursement for such expenses must be accompanied by appropriate documentation, and shall be reimbursed in accordance with the Company’s rules and policies as in effect from time to time and as set forth in Section 8(k)(iii) below.

(b)

Vacation . Employee shall be entitled to vacation time, as determined by the Board, of not less than 6 weeks per year. Employee shall not be entitled to compensation for, or to carry forward, any unused vacation time. Vacation time shall mean personal time when Employee is not available to the Company by telephone, email or other communication.

(c)

General Benefits . Employee shall be entitled to health insurance benefits, either pursuant to a plan or shall be reimbursed if Employee maintains his own health insurance.

(d)

Corporate Change . Upon the occurrence of a “Corporate Change” as hereinafter defined, Employee shall be considered as immediately and totally vested in any and all similar equity or equity-based awards previously made to Employee by the Company or its subsidiaries under a “Long Term Incentive Plan” or other grant duly adopted by the Board or the Compensation Committee thereof (such options or similar awards are hereinafter collectively referred to as “ Awards ”); provided, however, with respect to Awards that are deferred compensation subject to Code Section 409A, such accelerated vesting shall not cause an acceleration of a payment or result in a change in form of payment that would violate Code Section 409A. For purposes of this Agreement, a “ Corporate Change “ shall occur if (i) the Company (A) shall not be the surviving entity in any merger, consolidation or other reorganization (or survives only as a subsidiary of an entity other than a previously wholly-owned subsidiary of the Company) or (B) is to be dissolved and liquidated, and as a result of or in connection with such transaction, the persons who were directors of the Company before such transaction shall cease to constitute a majority of the Board, or (ii) any person or entity, including a “group” as contemplated by Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, acquires or gains ownership or control (including, without limitation, power to vote) of 50% or more of the outstanding shares of the Company’s voting stock (based upon voting power), and as a result of or in connection with such transaction, the persons who were directors of the Company before such transaction shall cease to constitute a majority of the Board, or (iii) the Company sells all or substantially all of the assets of the Company to any other person or entity (other than a wholly-owned subsidiary of the Company) in a transaction that requires shareholder approval pursuant to applicable corporate law; or (iv) during a period of two consecutive calendar years, individuals who at the beginning of such period constitute the Board, and any new director(s) whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least a majority of the directors then still in office, who either were directors at the beginning of the two (2) year period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority of the Board; or (v) any other event that a majority of the Board, in its sole discretion, shall determine constitutes a Corporate Change hereunder.

(e)

Country Club and/or Health Club Dues; Car Allowance . The Company shall pay for Employee’s country club and/or health club dues and provide for an appropriate car allowance, as determined by the Board.

Confidential Information and Non-Compete . Employee, during the Term, will have access to and become familiar with confidential information, secrets and proprietary information concerning the business and affairs of the Company, its controlled subsidiaries and other controlled entities, including technical information, resource valuations and reports, business strategies and pricing information, and other confidential and/or proprietary information (collectively, “ Confidential Information ”). Confidential Information shall not include any information that is or becomes generally available to the public other than as a result of Employee’s improper or unauthorized disclosure of such information in violation of this Agreement. As to such Confidential Information, Employee agrees as follows:

(a)

During the Term or at any time following the termination of this Agreement, Employee will not, directly or indirectly, without the prior written consent of the Company (1) disclose or permit the disclosure of any such Confidential Information, or (2) use, reproduce or distribute, or make or permit any use, reproduction or distribution of, directly or indirectly, any such Confidential Information, except for any disclosure, use, reproduction or distribution that is required or appropriate in the course of his employment with the Company, its controlled subsidiaries or other controlled entities.

(b)

If, during the Term or at any time following the termination of this Agreement, Employee is requested or required (by oral question or request for information or documents, in any legal proceeding, interrogatory, subpoena, civil investigative demand, or similar process) to disclose any Confidential Information, Employee agrees to notify the Company immediately in writing of the request or requirement so that the Company may seek an appropriate protection order or waive compliance with the provisions of this Section. If, in the absence of a protective order or the receipt of a waiver under this Agreement, Employee is, on the advice of counsel, compelled to disclose any Confidential Information to any tribunal or else stand liable for contempt, Employee may disclose such Confidential Information to the tribunal; provided, however, that Employee shall use his commercially reasonable best efforts to obtain a court order or other assurance that confidential treatment will be accorded to such Confidential Information.

(c)

Upon termination of employment of Employee, for whatever reason, Employee shall surrender to the Company or destroy any and all documents, manuals, correspondence, reports, records and similar items then or thereafter coming into the possession of Employee which contain any Confidential Information of the Company or its controlled subsidiaries or other controlled entities.

(d)

Employee agrees that, while serving as an executive officer and/or director of the Company (the “Restrictive Period”), he shall not, without the consent of the Company, in the States of Texas and Louisiana and offshore in the Gulf of Mexico (the “Restricted Territories”), engage in the oil and gas business (the “Restricted Business”); further, Employee agrees that during the Restrictive Period he will not participate, directly or indirectly, in the management or operation of or become an investor in (other than with respect to ownership of less than five percent (5%) of the outstanding shares of any class of equity securities listed on a national securities exchange or quoted on the Nasdaq National Market or SmallCap System), any corporation, partnership entity, limited liability company, venture or enterprise of whatever kind, which is engaged in the Restricted Business anywhere in the Restricted Territories. Employee agrees on his behalf and on behalf of his affiliates that none of them will, directly or indirectly, alone or with others, during the Restrictive Period, solicit or assist anyone else in the solicitation of, any employee of the Company to terminate his or her employment with the Company, provided that such restriction shall not apply to any such employee who responds to a general advertisement of employment with an affiliate of Employee. Notwithstanding the above, the Company acknowledges and understands that (i) Sydson Energy, Inc. and Sydson Resources, LP are ongoing businesses owning as much as a 50% working interest in certain prospects owned by the Company, and (ii) Sydson Energy, Inc. and Sydson Resources, LP will continue to conduct their respective business provided that they agree not to directly compete with the Company in any of its projects and to offer the Company a participation of up to 50% in any new projects that Employee, Sydson Energy, Inc. or Sydson Resources, LP may acquire or develop in the Restricted Territory during the Restrictive Period in the event that the Company consents to Employee’s pursuit of such opportunity. Sydson Resources, LP, Sydson Energy, Inc. and Employee reserve the right to participate on a minority, non-operating working interest basis with the Company with respect to minority positions, as the Company may offer in its sole discretion.

(e)

Employee recognizes and acknowledges that the obligations of Employee contained in Section 7 of this Agreement are reasonable and necessary to protect the legitimate business interests of the Company, and that any breach or violation of any of the provisions of such Section is likely to result in irreparable injury to the Company for which the Company would have no adequate remedy at law. Employee agrees that if Employee shall breach or violate Section 7 of this Agreement, the Company shall be entitled, if it so elects, to institute and prosecute proceedings at law or in equity, including, but not limited to, a proceeding seeking injunctive relief, to obtain damages with respect to such breach or violation, to enforce the specific performance of Section 7 this Agreement by Employee, or to enjoin Employee from engaging in any activity in violation of Section 7 of this Agreement. Employee agrees that effective service of process may be made upon Employee under the notice provisions contained in Section 11 of this Agreement.

Termination . This Agreement may be terminated prior to the end of the Term as set forth below:

(a)

Resignation (other than for Good Reason) . Employee may resign, including by reason of retirement, his position at any time by providing written notice of resignation to the Company in accordance with Section 11 hereof. In the event of such resignation, except in the case of resignation for Good Reason (as defined below), this Agreement shall terminate and Employee shall not be entitled to further compensation pursuant to this Agreement other than payment for (i) any unpaid Base Compensation or unpaid Bonus accrued hereunder as of Employee’s employment termination date, and (ii) any unpaid reasonable business expenses incurred prior to Employee’s employment termination date, subject to the Company’s expense reimbursement rules and policies as in effect from time to time (the “ Accrued Amounts ”). Accrued Amounts, if any, shall be paid to Employee in accordance with the Company’s customary payroll practices as in effect from time to time, but in no event later than fifteen (15) days following Employee’s termination of employment.

(b)

Death . If Employee’s employment is terminated due to his death, this Agreement shall terminate and the Company shall have no obligations to Employee or his estate, beneficiaries or legal representatives with respect to this Agreement other than payment of the Accrued Amounts, if any. Accrued Amounts, if any, shall be paid to Employee in accordance with the Company’s customary payroll practices as in effect from time to time but in no event later than 15 days following Employee’s termination of employment on account of death. Notwithstanding the foregoing, in the event of his death, Employee shall be considered as immediately and totally vested in any and all outstanding Awards previously granted to Employee by Company or its subsidiaries; provided, however, with respect to Awards that are deferred compensation subject to Code Section 409A, such accelerated vesting shall not cause an acceleration of a payment or result in a change in form of payment that would violate Code Section 409A.

(c)

Discharge .

(i)

The Company may terminate Employee’s employment in the event of Employee’s Misconduct or Disability (both as defined below) only upon written notice thereof delivered to Employee in accordance with Section 8(f) and Section 11 hereof. In the event that Employee’s employment is terminated during the Term by the Company for any reason other than his Misconduct or Disability (both as defined below), then, except as provided in Section 8(j)(i) below, (A) the Company shall pay in lump sum in cash to Employee, within fifteen (15) days following the expiration of the revocation period for the Release (as defined below), but in no event later than the fifteenth (15th) day of the third month following the year in which the Date of Termination occurs, an amount equal to three years of the then Base Compensation owed to Employee, and (B) for six months following the expiration of the revocation period for the Release, the Company, at its cost, shall provide or arrange to provide Employee (and, as applicable, Employee’s dependents) with accident and group health insurance benefits substantially similar to those which Employee (and Employee’s dependents) were receiving immediately prior to Employee’s termination (if any); provided , however , the benefits otherwise receivable by Employee pursuant to this clause (B) shall be reduced to the extent comparable benefits are actually received by Employee (and/or Employee’s dependents) during such period under any other employer’s plan(s) or program(s), with Employee being obligated to promptly disclose to the Company any such comparable benefits; and provided , further , however , that for the avoidance of doubt, the COBRA continuation period shall run concurrently with the period set forth in this Clause (B). In addition to the aforementioned compensation and benefits, Employee shall be considered as immediately and totally vested in any and all Awards previously granted to Employee by Company or its subsidiaries; provided, however, with respect to Awards that are deferred compensation subject to Code Section 409A, such accelerated vesting shall not cause an acceleration of a payment or result in a change in form of payment that would violate Code Section 409A. With respect to benefits set forth under Clause (B) above, all insurance premiums and/or benefits payments made by the Company with respect to such benefits shall be made so as to be exempt from Section 409A of the Code and, for purposes thereof, and either each such payment shall be treated as a separate payment under Section 409A of the Code, or such payments shall be treated as medical benefits under a separation pay plan, as described under Treasury Regulation Section 1.409A-1(b)(9)(v)(B). To the extent any such payments are not exempt from Section 409A of the Code (i.e., they constitute “nonqualified deferred compensation” subject to Section 409A of the Code), such payments shall be paid by the Company according to a fixed schedule consisting of monthly installment payments. If the Company’s pre-tax payment of the premiums for such benefits would cause the Executive to be taxed on the Company’s actual cost of providing such accident and group health insurance benefits because such benefits are “self-insured,” the Company will instead pay such premiums on an after-tax basis so the premium amounts are included in the Employee’s taxable income. With respect to any such benefits that are taxable and not otherwise excluded from deferred compensation under Code Section 409A, any amount reimbursable and paid in one tax year shall not affect the amount to be reimbursed or paid in another tax year, all reimbursements shall be paid no later than the end of the Executive’s taxable year following the tax year in which such expenses were incurred and the reimbursements under this Section cannot be substituted for any other benefit. The Company’s obligation to make the payments and provide the benefits described in this Section 8(c)(i) is conditioned expressly on Employee’s executing (and not revoking) a general release of any and all claims arising out of or relating to Employee’s employment and termination of employment in a form reasonably satisfactory to the Company and the Employee (the “ Release ”). If Employee fails to execute a Release within forty-five (45) days following the later of (i) the Date of Termination or (ii) the date Employee actually receives an execution copy of such Release (which shall be delivered to Employee no later than five (5) business days following Date of Termination), or if Employee revokes such Release within seven (7) days following execution, Employee shall forfeit all payments and benefits described hereunder.

(ii)

In the event Employee is terminated because of Misconduct, the Company shall have no obligations pursuant to this Agreement after the Date of Termination other than for payment of the Accrued Amounts, if any. As used herein, “ Misconduct ” means (A) the continued failure by Employee to substantially perform his duties with the Company (other than any such failure resulting from Employee’s incapacity due to physical or mental illness or any such actual or anticipated failure after the issuance of a Notice of Termination by Employee for Good Reason), after a written demand for substantial performance is delivered to Employee by the Board, which demand specifically identifies the manner in which the Board believes that Employee has not substantially performed his duties, and the Employee fails to cure such failure within fifteen (15) days after receipt of such demand, (B) the engaging by Employee in conduct which is demonstrably and materially injurious to the Company, monetarily or otherwise (other than such conduct resulting from Employee’s incapacity due to physical or mental illness or any such actual or anticipated conduct after the issuance of a Notice of Termination by Employee for Good Reason), (C) Employee’s conviction for the commission of a felony or (D) action by Employee toward the Company involving dishonesty. Anything contained in this Agreement to the contrary notwithstanding, the Board shall have the sole power and authority to terminate the employment of Employee on behalf of the Company.

(d)

Disability . If Employee shall have been absent from the full-time performance of Employee’s duties with the Company for ninety (90) consecutive calendar days as a result of Employee’s incapacity due to physical or mental illness, Employee’s employment may be terminated by the Company for “ Disability ” and Employee shall not be entitled to further compensation pursuant to this Agreement, other than for payment of the Accrued Amounts, if any. Notwithstanding the foregoing, in the event that Employee’s employment is terminated by the Company due to Disability, Employee shall be considered as immediately and totally vested in any and all Awards previously granted to Employee by the Company or its subsidiaries; provided, however, with respect to Awards that are deferred compensation subject to Code Section 409A, such accelerated vesting shall not cause an acceleration of a payment or result in a change in form of payment that would violate Code Section 409A.

(e)

Resignation for Good Reason . Employee shall be entitled to terminate his employment for Good Reason as defined herein. If Employee terminates his employment for Good Reason, he shall be entitled to the compensation and benefits provided in Section 8(c)(i) hereof in accordance with the terms therein, including, without limitation, the requirement that Employee execute and not revoke the Release contemplated in Section 8(c)(i). “ Good Reason ” shall mean the occurrence of any of the following circumstances without Employee’s express written consent; provided , that , Employee has provided a Notice of Termination to the Company within fifteen (15) days after the initial occurrence of any such circumstance of Employee’s intention to terminate Employee’s employment for Good Reason, and the Company has failed to cure, to the extent curable, such circumstance within fifteen (15) days of receipt of the Notice of Termination given in respect hereof:

(i)

the material breach of any of the Company’s obligations under this Agreement without Employee’s express written consent; or

(ii)

the failure of the Company to obtain a satisfactory agreement from any successor to assume and agree to perform this Agreement, as contemplated in Section 13 hereof.

In addition, the occurrence of a Corporate Change, shall constitute “Good Reason” hereunder, but only if Employee terminates his employment within ninety (90) days following the effective date of such Corporate Change.

(f)

Notice of Termination . Any purported termination of Employee’s employment by the Company under Sections 8(c)(ii) (Misconduct) or 8(d) (Disability), or by Employee under Section 8(e) (Good Reason), shall be communicated by written Notice of Termination to the other party hereto in accordance with Section 11 hereof. For purposes of this Agreement, a “ Notice of Termination ” shall mean a notice which, if by the Company and is for Misconduct or Disability, shall set forth in reasonable detail the reason for such termination of Employee’s employment, or in the case of resignation by Employee for Good Reason, said notice must specify in reasonable detail the basis for such resignation. A Notice of Termination given by Employee pursuant to Section 8(e) shall be effective even if given after the receipt by Employee of notice from the Board to consider terminating Employee for Misconduct. Any purported termination for which a Notice of Termination is required which is not effected pursuant to this Section 8(f) shall not be effective.

(g)

Date of Termination . “ Date of Termination ” shall mean the date specified in the Notice of Termination, provided that the Date of Termination shall be at least fifteen (15) days following the date the Notice of Termination is given; provided , however , that in the case of Employee’s resignation for Good Reason, Date of Termination shall mean the close of business on the last day on which the Company may cure any circumstance alleged by Employee to give rise to a Good Reason termination. Notwithstanding the foregoing, in the event Employee is terminated for Misconduct, the Company may refuse to allow Employee access to the Company’s offices (other than to allow Employee to collect his personal belongings under the Company’s supervision) prior to the Date of Termination. Notwithstanding anything herein to the contrary, for purposes of this Agreement, “termination of employment” shall mean Employee’s “separation from service” from the Company and its “affiliates” as defined in Code Section 409A and Final Treasury Regulations Section 1.409A-1(h), including the default presumptions thereof. For purposes of this Agreement, “ affiliate ” shall mean (i) any person or entity that directly or indirectly controls, is controlled by or is under common control with the Company and/or (ii) to the extent provided by the Board, any person or entity in which the Company has a significant interest. The term “ control ” (including, with correlative meaning, the terms “controlled by” and “under common control with”), as applied to any person or entity, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such person or entity, whether through the ownership of voting or other securities, by contract or otherwise; provided , however , with respect to any payment or benefit subject to Section 409A of the Code, the term “ affiliate ” shall mean any member of the Company’s control group within the meaning of Final Treasury Regulations Section 1.409A-1(h)(3), as such may be modified or amended from time to time, by applying the “at least 50 percent” provisions thereof.

(h)

Mitigation . Employee shall not be required to mitigate the amount of any payment provided for in this Section 8 by seeking other employment or otherwise, nor (except as set forth in Section 8(c)(i)(B)) shall the amount of any payment provided for in this Agreement be reduced by any compensation earned or benefits received by Employee as a result of employment by another employer, except that any severance amounts payable to Employee pursuant to the Company’s severance plan or policy for employees in general shall reduce the amount otherwise payable pursuant to Sections 8(c)(i) or 8(e).

(i)

Excess Parachute Payments . Notwithstanding anything in this Agreement to the contrary, to the extent that any payment or benefit received or to be received by Employee hereunder in connection with the termination of Employee’s employment would, as determined by tax counsel selected by the Company, constitute an “Excess Parachute Payment” (as defined in Section 280G of the Internal Revenue Code), the Company shall fully “gross-up” such payment so that Employee is in the same “net” after-tax position he would have been if such payment and gross-up payments had not constituted Excess Parachute Payments, and such “gross-up” payment shall be made no later than the end of Employee’s taxable year next following Employee’s taxable year in which he remits the taxes to which such gross-up payment relates. The Company shall reimburse any costs and expenses incurred by Employee, including without limitation, attorneys’ fees due to a tax audit or litigation in connection with any excise tax (including penalties and interest or other excise taxes thereon) under Code Section 4999 or Code Section 280G and any such reimbursement shall be made by the end of the Employee’s tax year following the tax year in which such taxes that are subject to the audit or litigation are remitted to the taxing authority, or where as a result of such audit or litigation no taxes are remitted, by the end of the Employee’s tax year following the tax year in which the audit is completed or there is a final nonappealable settlement or other resolution of the litigation. The Employee’s right to payment or reimbursement pursuant to this Section 8(i) shall not be subject to liquidation or exchange for any other benefit.

(j)

Code Section 409A .

(i)

Notwithstanding any provision of this Section 8 to the contrary, if all or any portion of the benefits provided in this Section 8 is determined to be “nonqualified deferred compensation” subject to Code Section 409A, and the Company determines that Employee is a “specified employee” as defined in Section 409A(a)(2)(B)(i) of the Code and the regulations and other guidance issued thereunder, then such benefits (or portion thereof) shall be accumulated and paid on the first day of the seventh month following Employee’s termination of employment. For purposes of this Agreement, whether Employee is a “specified employee” will be determined in accordance with the written procedures adopted by the Board.

(ii)

This Agreement is intended to comply with the provisions of Section 409A of the Code, and shall be interpreted and construed accordingly. The Company shall have the discretion and authority to amend this Agreement at any time to satisfy any requirements of Code Section 409A or guidance published thereunder; provided, however, any such amendment shall maintain the economic terms of this Agreement for the Employee. However, in no event will the Company have any liability for any failure of the Agreement to satisfy Code Section 409A, and the Company does not guarantee that the Agreement complies with Code Section 409A.

(iii)

The Company shall promptly reimburse Employee for eligible expenses under this Agreement that Employee incurs and properly reports to the Company in accordance with its expense reimbursement rules and policies. Notwithstanding anything herein to the contrary or otherwise, all reimbursements shall be made so as to be exempt from Section 409A of the Code and to the extent not exempt: (A) the amount of expenses eligible for reimbursement or in-kind benefits provided during any calendar year will not affect the amount of expenses eligible for reimbursement or in-kind benefits provided in any other calendar year; (B) the reimbursements for expenses for which Employee is entitled to be reimbursed shall be made on or before the last day of the calendar year following the calendar year in which the applicable expense is incurred; and (C) the right to payment or reimbursement or in-kind benefits hereunder may not be liquidated or exchanged for any other benefit.

Non-exclusivity of Rights . Nothing in this Agreement shall prevent or limit Employee’s continuing or future participation in any benefit, bonus, incentive, or other plan or program provided by the Company or any of its affiliated companies and for which Employee may qualify, nor shall anything herein limit or otherwise adversely affect such rights as Employee may have under any Awards with the Company or any of its affiliated companies.

10.

Assignability . The obligations of Employee hereunder are personal and may not be assigned or delegated by him or transferred in any manner whatsoever, nor are such obligations subject to involuntary alienation, assignment or transfer. The Company shall have the right to assign this Agreement and to delegate all rights, duties and obligations hereunder, either in whole or in part, to any parent, affiliate, successor or subsidiary organization or company of the Company, so long as the obligations of the Company under this Agreement remain the obligations of the Company.

11.

Notice . For the purpose of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given upon satisfaction of both (i) and (ii) set forth below: (i) via email to the email address on the signature page hereof and (ii) via mail when delivered or mailed by United States registered mail, return receipt requested, postage prepaid, addressed to the Company at its principal office address, directed to the attention of the Board with a copy to the Secretary of the Company, and to Employee at Employee’s residence address on the records of the Company or to such other address as either party may have furnished to the other in writing in accordance herewith except that notice of change of address shall be effective only upon receipt.

12.

Validity . The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.

13.

Successors; Binding Agreement .

(a)

The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. Failure of the Company to obtain such agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle Employee to compensation from the Company in the same amount and on the same terms as he would be entitled to hereunder if he terminated his employment for Good Reason, except that for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the Date of Termination. As used herein, the term “Company” shall include any successor to its business and/or assets as aforesaid which executes and delivers the Agreement provided for in this Section 13 or which otherwise becomes bound by all terms and provisions of this Agreement by operation of law.

(b)

This Agreement and all rights of Employee hereunder shall inure to the benefit of and be enforceable by Employee’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If Employee should die while any amounts would be payable to him hereunder if he had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to Employee’s devisee, legatee, or other designee or, if there be no such designee, to Employee’s estate.

14.

Withholding Taxes .

(a)

Tax Withholding . The Company shall have the power and the right to deduct or withhold from any benefits payable under this Agreement an amount sufficient to satisfy federal, state, and local taxes, domestic or foreign, required by law or regulation to be withheld.

(b)

Share Withholding . With respect to tax withholding required upon the upon the lapse of restrictions on any restricted common stock, or upon any other taxable event arising as a result of any stock awards pursuant to this Agreement, Employee may elect, to satisfy the withholding requirement, in whole or in part, by having the Company withhold shares having a fair market value on the date the tax is to be determined equal to the minimum statutory total tax which could be imposed on the transaction. All such elections shall be made in writing, signed by the Employee, and shall be subject to any restrictions or limitations that the Company, in its discretion, deems appropriate. Any fraction of a share required to satisfy such obligation shall be disregarded and the Employee shall instead pay the amount due in cash.

15.

No Restraints . As an inducement to the Company to enter into this Agreement, Employee represents and warrants that he is not a party to any other agreement or obligation for personal services, and that there exist no impediments or restraints, contractual or otherwise, on Employee’s powers right or ability to enter into this Agreement and to perform his duties and obligations hereunder.

16.

Miscellaneous . No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by Employee and such officer as may be specifically authorized by the Board. No waiver by either party hereto at any time of any breach by the other party hereto of, or in compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. This Agreement is an integration of the parties’ agreement; no agreement or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party, except those which are set forth expressly in this Agreement. THE VALIDITY, INTERPRETATION, CONSTRUCTION AND PERFORMANCE OF THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF TEXAS.

17.

Counterparts . This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

18.

Arbitration . Either party may elect that any dispute or controversy arising under or in connection with this Agreement be settled by arbitration in Houston, Texas in accordance with the Employment Rules of the American Arbitration Association then in effect. If the parties cannot mutually agree on an arbitrator, then the arbitration shall be conducted by a three arbitrator panel, with each party selecting one arbitrator and the two arbitrators so selected selecting a third arbitrator. The findings of the arbitrator(s) shall be final and binding, and judgment may be entered thereon in any court having jurisdiction. The findings of the arbitrator(s) shall not be subject to appeal to any court, except as otherwise provided by applicable law. The arbitrator(s) may, in his or her (or their) own discretion, award legal fees and costs to the prevailing party.

[Signature Page Follows]

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth above.

TEXAS SOUTH ENERGY, INC.

By:	/s/ James Askew
Name:	James M. Askew
Office:	Chief Executive Officer
Email address: jaskew@asconnenergy.com
MICHAEL J. MAYELL
/s/ Michael Mayell
Email address: mmayell@sydson.com

Texas South Energy, Inc. 8-K

Exhibit 10.3

CONSULTING AGREEMENT

This consulting agreement (“Agreement”) is entered into effective as of January 5, 2017 (the “Effective Date”), by and between Texas South Energy, Inc., a Nevada corporation (the “Company”), and James M. Askew (“Consultant”).

WHEREAS, the Company wishes to retain the services of Consultant and Consultant wishes to provide services to the Company; and

WHEREAS, the Company and Consultant desire to enter into an agreement reflecting the terms of the services to be rendered, including the termination thereof;

Existing Employment Agreement . The Company hereby terminates the employment agreement by and between the Company and James M. Askew dated September 27, 2013, as amended on March 17, 2014 and on September 30, 2015 (“Employment Agreement”) pursuant to Section 8(c) of the Employment Agreement, Consultant waives the 90 day notice provision, and the Company acknowledges and agrees to pay Consultant the compensation of $35,000 net per month owed him pursuant to the Employment Agreement through September 30, 2018, irrespective of whether or how this Agreement may be subsequently terminated. Commencing on October 1, 2018, the Company and Consultant agree that the terms of Section 4(b) of the Agreement will become effective and will govern the cash compensation to be paid to Consultant through December 31, 2019.

Term of Consulting . Subject to the provisions for earlier termination provided in this Agreement, the term of this Agreement shall commence and is binding and effective, on the Effective Date (with the exception that the compensation to be paid pursuant to Section 4(b) takes effect on October 1, 2018, as Consultant is receiving compensation pursuant to the Employment Agreement through September 30, 2018 as set forth in Section 1 above), shall terminate on December 31, 2019, and upon December 31 of each calendar year, commencing with the calendar year 2017, such termination date of this Agreement shall be extended for an additional one-year period (the initial term through December 31, 2019, together with each such year extension shall be referred to as the “Term”), provided that neither the Company nor Consultant notify the other on or prior to 90 days before the applicable December 31 ^st that either party does not intend to extend this Agreement.

Consultant’s Duties . During the Term, Consultant shall provide significant consulting services on an as-needed basis.

Compensation .

(a)

Stock . As an inducement to Consultant to enter into this Agreement, the Company will issue Consultant on the Effective Date 27 million shares of Company restricted common stock (“Shares”).

(b)

Consulting Compensation . For services rendered by Consultant under this Agreement commencing on October 1, 2018, the Company shall pay to Consultant consulting compensation of $35,000 net per month (“Consulting Compensation”), it being acknowledged that Consultant is receiving compensation owed pursuant to the Employment Agreement through September 30, 2018 as set forth in Section 1 above. The amount of Consulting Compensation shall be reviewed by the Company on an annual basis as of the close of each 12-month period of this Agreement and may be increased as the Company may deem appropriate. In the event the Company deems it appropriate to increase the compensation, said increased amount shall thereafter be the “Consulting Compensation.” The Consulting Compensation, as increased from time to time, may not thereafter be decreased unless agreed to by Consultant. Nothing contained herein shall prevent the Company from paying additional compensation to Consultant in the form of bonuses or otherwise during the Term.

Bonus . The Company in its sole discretion may grant the Consultant a bonus (“ Bonus ”) payable in shares of restricted common stock or cash, as determined by the Company; and the Company shall be required to pay a Bonus to Consultant in an amount equal to that paid to the chief executive officer as a bonus, pursuant to his employment agreement.

Additional Benefits . In addition to the Consulting Compensation provided for in Section 5 herein, Consultant shall be entitled to the following:

(a)

Expenses . The Company shall reimburse Consultant for business expenses reasonably incurred in the performance of his duties. It is understood that Consultant is authorized to incur reasonable business expenses for promoting the business of the Company, including reasonable expenditures for travel, lodging, meals and client or business associate entertainment. Request for reimbursement for such expenses must be accompanied by appropriate documentation.

(b)

Corporate Change . Upon the occurrence of a “Corporate Change” as hereinafter defined, Consultant shall be considered as immediately and totally vested in any and all similar equity or equity-based awards previously made to Consultant by the Company (such options or similar awards are hereinafter collectively referred to as “ Awards ”); provided, however, with respect to Awards that are deemed deferred compensation subject to Code Section 409A, such accelerated vesting shall not cause an acceleration of a payment or result in a change in form of payment that would violate Code Section 409A. For purposes of this Agreement, a “ Corporate Change “ shall occur if (i) the Company (A) shall not be the surviving entity in any merger, consolidation or other reorganization (or survives only as a subsidiary of an entity other than a previously wholly-owned subsidiary of the Company) or (B) is to be dissolved and liquidated, and as a result of or in connection with such transaction, the persons who were directors of the Company before such transaction shall cease to constitute a majority of the Board, or (ii) any person or entity, including a “group” as contemplated by Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, acquires or gains ownership or control (including, without limitation, power to vote) of 50% or more of the outstanding shares of the Company’s voting stock (based upon voting power), and as a result of or in connection with such transaction, the persons who were directors of the Company before such transaction shall cease to constitute a majority of the Board, or (iii) the Company sells all or substantially all of the assets of the Company to any other person or entity (other than a wholly-owned subsidiary of the Company) in a transaction that requires shareholder approval pursuant to applicable corporate law; or (iv) during a period of two consecutive calendar years, individuals who at the beginning of such period constitute the Board, and any new director(s) whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least a majority of the directors then still in office, who either were directors at the beginning of the two (2) year period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority of the Board; or (v) any other event that a majority of the Board, in its sole discretion, shall determine constitutes a Corporate Change hereunder.

(c)

Country Club and/or Health Club Dues; Car Allowance . The Company shall pay for Consultant’s country club and/or health club dues and an appropriate car allowance, as determined by the Board, but in no event less than such payments to the chief executive officer pursuant to his employment agreement.

(d)

General Benefits . Consultant shall be entitled to health insurance benefits, either pursuant to the Company’s plan or shall be reimbursed if Consultant maintains his own health insurance. Nothing in this Agreement shall prevent or limit Consultant’s participation in any benefit, bonus, incentive, or other plan or program provided by the Company and for which Consultant may qualify, nor shall anything herein limit or otherwise adversely affect such rights as Consultant may have under any Awards with the Company.

Confidential Information . Consultant, during the Term, may have access to and become familiar with confidential information, secrets and proprietary information concerning the business and affairs of the Company, its controlled subsidiaries and other controlled entities, including technical information, resource valuations and reports, business strategies and pricing information, and other confidential and/or proprietary information (collectively, “ Confidential Information ”). Confidential Information shall not include any information that is or becomes generally available to the public other than as a result of Consultant’s improper or unauthorized disclosure of such information in violation of this Agreement. As to such Confidential Information, Consultant agrees during the Term or at any time following the termination of this Agreement, Consultant will not, directly or indirectly, without the prior written consent of the Company (1) disclose or permit the disclosure of any such Confidential Information, or (2) use, reproduce or distribute, or make or permit any use, reproduction or distribution of, directly or indirectly, any such Confidential Information, except for any disclosure, use, reproduction or distribution that is required in the course of his services being provided to the Company.

Termination . This Agreement may be terminated prior to the end of the Term as set forth below:

(a)

By Consultant (other than for Good Reason) . Consultant may cease providing services to the Company at any time by providing written notice to the Company in accordance with Section 11 hereof. In the event of such termination, except in the case of resignation for Good Reason (as defined below), this Agreement shall terminate and Consultant shall not be entitled to further compensation pursuant to this Agreement other than payment for (i) any unpaid compensation pursuant to Section 1 hereof through September 28, 2018 or unpaid Bonuses accrued hereunder as of Consultant’s Termination Date, if such termination is prior to October 1, 2018, (ii) any unpaid Consulting Compensation or unpaid Bonus accrued hereunder as of Consultant’s Termination Date if such Termination Date is subsequent to September 30, 2018, and (iii) any unpaid reasonable business expenses incurred prior to Consultant’s Termination Date, subject to the Company’s expense reimbursement rules and policies as in effect from time to time (the “ Accrued Amounts ”). Accrued Amounts, if any, shall be paid to Consultant in no event later than fifteen (15) days following Consultant’s termination.

(b)

Death . If this Agreement is terminated due to Consultant’s death, this Agreement shall terminate and the Company shall have no obligations to Consultant or his estate, beneficiaries or legal representatives with respect to this Agreement other than payment of the Accrued Amounts, if any. Accrued Amounts, if any, shall be paid to Consultant in no event later than 15 days following Consultant’s termination on account of death. Notwithstanding the foregoing, in the event of his death, Consultant shall be considered as immediately and totally vested in any and all outstanding Awards, if any, previously granted to Consultant by Company; provided, however, with respect to Awards that are deemed deferred compensation subject to Code Section 409A, such accelerated vesting shall not cause an acceleration of a payment or result in a change in form of payment that would violate Code Section 409A.

(c)

Discharge .

(i)

The Company may terminate this Agreement in the event of Consultant’s Misconduct or Disability (both as defined below) only upon written notice thereof delivered to Consultant in accordance with Section 8(f) and Section 11 hereof. In the event that this Agreement is terminated during the Term by the Company for any reason other than his Misconduct or Disability (both as defined below), then (A) the Company shall pay in lump sum in cash to Consultant, within fifteen (15) days following the expiration of the revocation period for the Release (as defined below), but in no event later than the fifteenth (15th) day of the third month following the year in which the Date of Termination occurs, an amount equal to three years of the then Consulting Compensation, and (B) for six months following the expiration of the revocation period for the Release, the Company, at its cost, shall pay Consultant (and, as applicable, Consultant’s dependents) an amount equal to his accident and group health insurance benefits substantially similar to those which Consultant (and Consultant’s dependents) were receiving immediately prior to Consultant’s termination (if any); provided , however , with respect to Awards that are deemed deferred compensation subject to Code Section 409A, such accelerated vesting shall not cause an acceleration of a payment or result in a change in form of payment that would violate Code Section 409A; and provided, further, however, that for the avoidance of doubt, the COBRA continuation period shall run concurrently with the period set forth in this Clause (B). With respect to benefits set forth under Clause (B) above, all insurance premiums and/or benefits payments made by the Company with respect to such benefits shall be made so as to be exempt from Section 409A of the Code and, for purposes thereof, and either each such payment shall be treated as a separate payment under Section 409A of the Code, or such payments shall be treated as medical benefits under a separation pay plan, as described under Treasury Regulation Section 1.409A-1(b)(9)(v)(B). To the extent any such payments are not exempt from Section 409A of the Code (i.e., they constitute “nonqualified deferred compensation” subject to Section 409A of the Code), such payments shall be paid by the Company according to a fixed schedule consisting of monthly installment payments. In addition to the aforementioned compensation, Consultant shall be considered as immediately and totally vested in any and all Awards previously granted to Consultant by Company or its subsidiaries. The Company’s obligation to make the payments described in this Section 8(c)(i) is conditioned expressly on Consultant’s executing (and not revoking) a general release of any and all claims arising out of or relating to this Agreement in a form reasonably satisfactory to the Company and Consultant (the “ Release ”). If Consultant fails to execute a Release within forty-five (45) days following the later of (i) the Date of Termination or (ii) the date Consultant actually receives an execution copy of such Release (which shall be delivered to Consultant no later than five (5) business days following Date of Termination), or if Consultant revokes such Release within seven (7) days following execution, Consultant shall forfeit all payments described hereunder.

(ii)

In the event Consultant is terminated because of Misconduct, the Company shall have no obligations pursuant to this Agreement after the Date of Termination other than for payment of the Accrued Amounts, if any. As used herein, “ Misconduct ” means (A) the engaging by Consultant in conduct which is demonstrably and materially injurious to the Company, monetarily or otherwise (other than such conduct resulting from Consultant’s incapacity due to physical or mental illness or any such actual or anticipated conduct after the issuance of a Notice of Termination by Consultant for Good Reason), (B) Consultant’s conviction for the commission of a felony or (C) action by Consultant toward the Company involving dishonesty.

(d)

Disability . If Consultant shall have been absent from the performance of Consultant’s services with the Company for ninety (90) consecutive calendar days as a result of Consultant’s incapacity due to physical or mental illness, this Agreement may be terminated by the Company for “ Disability ” and Consultant shall not be entitled to further compensation pursuant to this Agreement, other than for payment of the Accrued Amounts, if any. Notwithstanding the foregoing, in the event that the Agreement is terminated by the Company due to Disability, Consultant shall be considered as immediately and totally vested in any and all Awards previously granted to Consultant by the Company; provided, however, with respect to Awards that are deemed deferred compensation subject to Code Section 409A, such accelerated vesting shall not cause an acceleration of a payment or result in a change in form of payment that would violate Code Section 409A.

(e)

Resignation for Good Reason . Consultant shall be entitled to terminate this Agreement for Good Reason as defined herein. If Consultant terminates this Agreement for Good Reason, he shall be entitled to the compensation provided in Section 8(c)(i) hereof in accordance with the terms therein, including, without limitation, the requirement that Consultant execute and not revoke the Release contemplated in Section 8(c)(i). “ Good Reason ” shall mean the occurrence of any of the following circumstances without Consultant’s express written consent; provided , that , Consultant has provided a Notice of Termination to the Company within fifteen (15) days after the initial occurrence of any such circumstance of Consultant’s intention to terminate the Agreement for Good Reason, and the Company has failed to cure, to the extent curable, such circumstance within fifteen (15) days of receipt of the Notice of Termination given in respect hereof:

(i)

the material breach of any of the Company’s obligations under this Agreement without Consultant’s express written consent; or

(ii)

the failure of the Company to obtain a satisfactory agreement from any successor to assume and agree to perform this Agreement, as contemplated in Section 13 hereof.

In addition, the occurrence of a Corporate Change, shall constitute “Good Reason” hereunder, but only if Consultant terminates the Agreement within ninety (90) days following the effective date of such Corporate Change.

(f)

Notice of Termination . Any purported termination of the Agreement by the Company under Sections 8(c)(ii) (Misconduct) or 8(d) (Disability), or by Consultant under Section 8(e) (Good Reason), shall be communicated by written Notice of Termination to the other party hereto in accordance with Section 11 hereof. For purposes of this Agreement, a “ Notice of Termination ” shall mean a notice which, if by the Company and is for Misconduct or Disability, shall set forth in reasonable detail the reason for such termination of this Agreement, or in the case of resignation by Consultant for Good Reason, said notice must specify in reasonable detail the basis for such resignation. A Notice of Termination given by Consultant pursuant to Section 8(e) shall be effective even if given after the receipt by Consultant of notice from the Company considering termination of Consultant for Misconduct. Any purported termination for which a Notice of Termination is required which is not effected pursuant to this Section 8(f) shall not be effective.

(g)

(h)

Excess Parachute Payments . Notwithstanding anything in this Agreement to the contrary, to the extent that any payment or benefit received or to be received by Consultant hereunder in connection with the termination of Consultant would, as determined by tax counsel selected by the Company, constitute an “Excess Parachute Payment” (as defined in Section 280G of the Internal Revenue Code), the Company shall fully “gross-up” such payment so that Consultant is in the same “net” after-tax position he would have been if such payment and gross-up payments had not constituted Excess Parachute Payments, and such “gross-up” payment shall be made no later than the end of Consultant’s taxable year next following Consultant’s taxable year in which he remits the taxes to which such gross-up payment relates. The Company shall reimburse any costs and expenses incurred by Consultant, including without limitation, attorneys’ fees due to a tax audit or litigation in connection with any excise tax (including penalties and interest or other excise taxes thereon) under Code Section 4999 or Code Section 280G and any such reimbursement shall be made by the end of the Consultant’s tax year following the tax year in which such taxes that are subject to the audit or litigation are remitted to the taxing authority, or where as a result of such audit or litigation no taxes are remitted, by the end of the Consultant’s tax year following the tax year in which the audit is completed or there is a final nonappealable settlement or other resolution of the litigation. The Consultant’s right to payment or reimbursement pursuant to this Section 8(i) shall not be subject to liquidation or exchange for any other benefit.

(i)

Code Section 409A .

(i)

Notwithstanding any provision of this Section 8 to the contrary, if all or any portion of the benefits provided in this Section 8 is determined to be “nonqualified deferred compensation” subject to Code Section 409A, and the Company determines that Consultant is a “specified employee” as defined in Section 409A(a)(2)(B)(i) of the Code and the regulations and other guidance issued thereunder, then such benefits (or portion thereof) shall be accumulated and paid on the first day of the seventh month following Consultant’s termination.

(ii)

This Agreement is intended to comply with the provisions of Section 409A of the Code, and shall be interpreted and construed accordingly. The Company shall have the discretion and authority to amend this Agreement at any time to satisfy any requirements of Code Section 409A or guidance published thereunder; provided, however, any such amendment shall maintain the economic terms of this Agreement for the Consultant. However, in no event will the Company have any liability for any failure of the Agreement to satisfy Code Section 409A, and the Company does not guarantee that the Agreement complies with Code Section 409A.

(iii)

The Company shall promptly reimburse Consultant for eligible expenses under this Agreement that Consultant incurs and properly reports to the Company in accordance with its expense reimbursement rules and policies. Notwithstanding anything herein to the contrary or otherwise, all reimbursements shall be made so as to be exempt from Section 409A of the Code and to the extent not exempt: (A) the amount of expenses eligible for reimbursement or in-kind benefits provided during any calendar year will not affect the amount of expenses eligible for reimbursement or in-kind benefits provided in any other calendar year; (B) the reimbursements for expenses for which Consultant is entitled to be reimbursed shall be made on or before the last day of the calendar year following the calendar year in which the applicable expense is incurred; and (C) the right to payment or reimbursement or in-kind benefits hereunder may not be liquidated or exchanged for any other benefit.

Assignability . The obligations of Consultant hereunder are personal and may not be assigned or delegated by him or transferred in any manner whatsoever, nor are such obligations subject to involuntary alienation, assignment or transfer. The Company shall have the right to assign this Agreement and to delegate all rights, duties and obligations hereunder, either in whole or in part, to any parent, affiliate, successor or subsidiary organization or company of the Company, so long as the obligations of the Company under this Agreement remain the obligations of the Company.

10.

No Restraints . As an inducement to the Company to enter into this Agreement, Consultant represents and warrants that he is not a party to any other agreement or obligation for personal services, and that there exist no impediments or restraints, contractual or otherwise, on Consultant’s powers right or ability to enter into this Agreement.

11.

Notice . For the purpose of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given upon satisfaction of both (i) and (ii) set forth below: (i) via email to the email address on the signature page hereof and (ii) via mail when delivered or mailed by United States registered mail, return receipt requested, postage prepaid, addressed to the Company at its principal office address, directed to the attention of the Board with a copy to the Secretary of the Company, and to Consultant at Consultant’s residence address on the records of the Company or to such other address as either party may have furnished to the other in writing in accordance herewith except that notice of change of address shall be effective only upon receipt.

12.

13.

Successors; Binding Agreement .

(a)

The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. Failure of the Company to obtain such agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle Consultant to compensation from the Company in the same amount and on the same terms as he would be entitled to hereunder if he terminated this Agreement for Good Reason, except that for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the date of termination. As used herein, the term “Company” shall include any successor to its business and/or assets as aforesaid which executes and delivers the Agreement provided for in this Section 13 or which otherwise becomes bound by all terms and provisions of this Agreement by operation of law.

(b)

This Agreement and all rights of Consultant hereunder shall inure to the benefit of and be enforceable by Consultant’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If Consultant should die while any amounts would be payable to him hereunder if he had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to Consultant’s devisee, legatee, or other designee or, if there be no such designee, to Consultant’s estate.

14.

Indemnification . The indemnification agreement entered into by and between the Company and Consultant on March 17, 2014 is hereby ratified by the Company and the Company acknowledges that this indemnification agreement is a binding and valid obligation of the Company in favor of Consultant and in full force and effect.

15.

Miscellaneous . No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by Consultant and Company. No waiver by either party hereto at any time of any breach by the other party hereto of, or in compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. This Agreement is an integration of the parties’ agreement; no agreement or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party, except those which are set forth expressly in this Agreement. THE VALIDITY, INTERPRETATION, CONSTRUCTION AND PERFORMANCE OF THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF TEXAS.

16.

Counterparts . This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

17.

18.

Share Withholding . With respect to tax withholding required upon the lapse of restrictions on any restricted common stock, or upon any other taxable event arising as a result of any stock awards pursuant to this Agreement, Consultant may elect, to satisfy the withholding requirement, in whole or in part, by having the Company withhold shares having a fair market value on the date the tax is to be determined equal to the minimum statutory total tax which could be imposed on the transaction. All such elections shall be made in writing, signed by the Consultant, and shall be subject to any restrictions or limitations that the Company, in its discretion, deems appropriate. Any fraction of a share required to satisfy such obligation shall be disregarded and the Consultant shall instead pay the amount due in cash.

[Signature Page Follows]

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth above.

TEXAS SOUTH ENERGY, INC.

By:	/s/ Michael J. Mayell
Name:	Michael J. Mayell
Office:	Chief Executive Officer
Email address: mmayell@texasouth.com
JAMES M. ASKEW
/s/ James Askew
Email address: jaskew@asconnenergy.com

Texas South Energy, Inc. 8-K

Exhibit 10.4

EMPLOYMENT AGREEMENT

This Employment Agreement (“Agreement”) is entered into effective as of January 5, 2017 (the “Effective Date”), by and between Texas South Energy, Inc., a Nevada corporation (the “Company”), and John B. Connally, III (“Employee”).

WHEREAS, the Company wishes to employ Employee and Employee wishes to be employed by the Company; and

WHEREAS, the Company and Employee desire to enter into an agreement reflecting the terms of the employment relationship, including the termination thereof;

Employment . The Company hereby employs Employee, and Employee will hereby be employed by the Company, on the terms and conditions set forth in this Agreement.

Term of Employment . Subject to the provisions for earlier termination provided in this Agreement, the term of this Agreement shall begin on January 5, 2017 and shall terminate on December 31, 2019. Upon December 31 of each calendar year, commencing on December 31, 2017, the term shall be extended for one additional year (the initial Term, together with each such year extension shall be referred to as the “Term”), provided that neither the Company nor Employee notify the other on or prior to 90 days before the applicable December 31 ^st date that either party does not intend to extend this Agreement.

Employee’s Duties . During the Term, Employee shall serve as Chairman of the Board with such duties and responsibilities as may from time to time be assigned to him by the board of directors of the Company (the “ Board ”), provided that such duties are consistent with the customary duties of such position. During the Term, Employee shall serve as a member of the Board. Employee agrees to devote his skill and attention to the business and affairs of the Company and to use reasonable best efforts to perform faithfully and efficiently his duties and responsibilities. Employee shall not, either directly or indirectly, enter into any full-time employment with or for any person, firm, association or corporation other than the Company during the Term; provided, however, that Employee shall not be prohibited from (i) engaging in charitable activities, educational mentoring, and community affairs, (ii) serving, with the prior approval of the Company’s Board, on the boards of a reasonable number of business entities, trade associations and charitable organizations, (iii) managing his personal investments and affairs related to another business or companies (either as a principal, partner, shareholder, or member of such business), or (iv) any other such activity approved by the Board; provided that such activities do not either individually or in the aggregate materially interfere with the performance of his duties hereunder. Employee shall at all times observe and comply with all lawful directions and instructions of the Board.

Compensation .

(a)

Stock . As an inducement to Employee to enter into this Agreement, the Company will issue Employee 65,100,000 shares of Company restricted common stock (“Shares”).

(b)

Base Compensation . For services rendered by Employee under this Agreement, the Company shall pay to Employee a base salary of $420,000 per annum (“ Base Compensation ”). The Base Compensation is payable in accordance with the Company’s customary payroll practices and subject to customary withholdings, including share withholdings as described in Section 14(b) hereof. The amount of Base Compensation shall be reviewed by the Board on an annual basis as of the close of each 12-month period of this Agreement and may be increased as the Board may deem appropriate. In the event the Board (or, if established, the compensation committee thereof) deems it appropriate to increase Employee’s annual base salary, said increased amount shall thereafter be the “Base Compensation.” Employee’s Base Compensation, as increased from time to time, may not thereafter be decreased unless agreed to by Employee. Nothing contained herein shall prevent the Board from paying additional compensation to Employee in the form of bonuses or otherwise during the Term.

Bonus . The Board in its sole discretion may grant the Employee a bonus (“ Bonus ”) payable in shares of restricted common stock or cash, as determined.

Additional Benefits . In addition to the Base Compensation provided for in Section 5 herein, Employee shall be entitled to the following:

(a)

(b)

(c)

General Benefits . Employee shall be entitled to health insurance benefits, either pursuant to a plan or shall be reimbursed if Employee maintains his own health insurance.

(d)

(e)

Confidential Information . Employee, during the Term, will have access to and become familiar with confidential information, secrets and proprietary information concerning the business and affairs of the Company, its controlled subsidiaries and other controlled entities, including technical information, resource valuations and reports, business strategies and pricing information, and other confidential and/or proprietary information (collectively, “ Confidential Information ”). Confidential Information shall not include any information that is or becomes generally available to the public other than as a result of Employee’s improper or unauthorized disclosure of such information in violation of this Agreement. As to such Confidential Information, Employee agrees as follows:

(a)

(b)

(c)

(d)

Termination . This Agreement may be terminated prior to the end of the Term as set forth below:

(a)

(b)

(c)

Discharge .

(i)

The Company may terminate Employee’s employment in the event of Employee’s Misconduct or Disability (both as defined below) only upon written notice thereof delivered to Employee in accordance with Section 8(f) and Section 11 hereof. In the event that Employee’s employment is terminated during the Term by the Company for any reason other than his Misconduct or Disability (both as defined below), then, except as provided in Section 8(j)(i) below, (A) the Company shall pay in lump sum in cash to Employee, within fifteen (15) days following the expiration of the revocation period for the Release (as defined below), but in no event later than the fifteenth (15th) day of the third month following the year in which the Date of Termination occurs, an amount equal to three years of the then Employee Base Compensation owed to Employee, and (B) for six months following the expiration of the revocation period for the Release, the Company, at its cost, shall provide or arrange to provide Employee (and, as applicable, Employee’s dependents) with accident and group health insurance benefits substantially similar to those which Employee (and Employee’s dependents) were receiving immediately prior to Employee’s termination (if any); provided , however , the benefits otherwise receivable by Employee pursuant to this clause (B) shall be reduced to the extent comparable benefits are actually received by Employee (and/or Employee’s dependents) during such period under any other employer’s plan(s) or program(s), with Employee being obligated to promptly disclose to the Company any such comparable benefits; and provided , further , however , that for the avoidance of doubt, the COBRA continuation period shall run concurrently with the period set forth in this Clause (B). In addition to the aforementioned compensation and benefits, Employee shall be considered as immediately and totally vested in any and all Awards previously granted to Employee by Company or its subsidiaries; provided, however, with respect to Awards that are deferred compensation subject to Code Section 409A, such accelerated vesting shall not cause an acceleration of a payment or result in a change in form of payment that would violate Code Section 409A. With respect to benefits set forth under Clause (B) above, all insurance premiums and/or benefits payments made by the Company with respect to such benefits shall be made so as to be exempt from Section 409A of the Code and, for purposes thereof, and either each such payment shall be treated as a separate payment under Section 409A of the Code, or such payments shall be treated as medical benefits under a separation pay plan, as described under Treasury Regulation Section 1.409A-1(b)(9)(v)(B). To the extent any such payments are not exempt from Section 409A of the Code (i.e., they constitute “nonqualified deferred compensation” subject to Section 409A of the Code), such payments shall be paid by the Company according to a fixed schedule consisting of monthly installment payments. If the Company’s pre-tax payment of the premiums for such benefits would cause the Executive to be taxed on the Company’s actual cost of providing such accident and group health insurance benefits because such benefits are “self-insured,” the Company will instead pay such premiums on an after-tax basis so the premium amounts are included in the Employee’s taxable income. With respect to any such benefits that are taxable and not otherwise excluded from deferred compensation under Code Section 409A, any amount reimbursable and paid in one tax year shall not affect the amount to be reimbursed or paid in another tax year, all reimbursements shall be paid no later than the end of the Executive’s taxable year following the tax year in which such expenses were incurred and the reimbursements under this Section cannot be substituted for any other benefit. The Company’s obligation to make the payments and provide the benefits described in this Section 8(c)(i) is conditioned expressly on Employee’s executing (and not revoking) a general release of any and all claims arising out of or relating to Employee’s employment and termination of employment in a form reasonably satisfactory to the Company and the Employee (the “ Release ”). If Employee fails to execute a Release within forty-five (45) days following the later of (i) the Date of Termination or (ii) the date Employee actually receives an execution copy of such Release (which shall be delivered to Employee no later than five (5) business days following Date of Termination), or if Employee revokes such Release within seven (7) days following execution, Employee shall forfeit all payments and benefits described hereunder.

(ii)

(d)

(e)

(i)

the material breach of any of the Company’s obligations under this Agreement without Employee’s express written consent; or

(ii)

the failure of the Company to obtain a satisfactory agreement from any successor to assume and agree to perform this Agreement, as contemplated in Section 13 hereof.

(f)

(g)

(h)

(i)

(a)

Code Section 409A .

(i)

(ii)

(iii)

10.

11.

12.

13.

Successors; Binding Agreement .

(a)

(b)

14.

Withholding Taxes .

(a)

(b)

15.

16.

17.

Counterparts . This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

18.

[Signature Page Follows]

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth above.

TEXAS SOUTH ENERGY, INC.
By:	/s/ Michael J. Mayell
Name:	Michael J. Mayell
Office:	Chief Executive Officer
Email address: mmayell@texasouth.com
JOHN B. CONNALLY, III
/s/ John Connally
Email address: jbc251w@aol.com

Texas South Energy, Inc. 8-K

Exhibit 99.1

TEXAS SOUTH ENERGY, INC. ANNOUNCES ACQUISITION OF
ASSETS AND ADDITION OF EXPERIENCED MANAGEMENT TEAM

HOUSTON, TX–(Marketwire – January 10, 2017) – Texas South Energy, Inc. (OTCPK: TXSO) today announced that on January 4, 2017, it entered into an asset purchase agreement with privately held Sydson Energy, Inc. and Sydson Resources, L.P. (collectively, “Sydson”), both of Houston, Texas, to acquire certain onshore oil and gas assets and interests, certain tangible assets, and personnel. Texas South owns interests in seven offshore prospects in the Gulf of Mexico (“GOM”) in conjunction with GulfSlope Energy, Inc. (OTCPK: GSPE) in water depths between 300’ and 1,000’. GulfSlope has conducted extensive seismic reprocessing and interpretative work on the prospects focusing on the high potential subsalt play at depths of 15,000’ to 25,000’ prior to acquiring them in federal offshore lease sales. Texas South owns a 20% working interest (“WI”) in five of the prospects and up to an approximate 70% WI in two of the prospects that have shallow oil potential above 5,000’. Subsequent to the closing, Sydson owner Michael J. Mayell has been named President and Chief Executive Officer of Texas South and has joined its board of directors. Texas South co-founder, James M. Askew, has resigned as its president, chief executive officer and director and Texas South co-founder, John B. Connally, III has been named chairman of the board.

Mr. Mayell has over 45 years of experience in the oil and gas business. He began his career in New Orleans with Shell Oil and over time was assigned to roles in both the drilling engineering and production engineering groups with responsibility for fields both onshore South Louisiana and offshore in the GOM. In 1982, Mr. Mayell founded Sydson Energy which also built a portfolio of assets in South Louisiana, South Texas, and offshore in the GOM. Mr. Mayell later co-founded NYSE listed The Meridian Resource Corporation in 1985 and served as president and chief operating officer of Meridian for over 20 years. Meridian also focused on drilling and producing activities in south Louisiana and the GOM during that time and acquired all of Shell Oil Company’s Louisiana production in 1998 in exchange for shares of Meridian’s stock.

Through Sydson, Texas South has acquired rights to drilled and tested prospects with expected near term production and multiple oil and gas exploration and development opportunities located onshore Texas and Louisiana as well as future Sydson opportunities.

In the Bayou Bouillon Field, St. Martin and Iberville Parishes, Louisiana, Texas South has acquired a 37.5% Working Interest (“WI”) in the Sugarberry South Project comprising 420 acres with a net revenue interest of 70%. The property has two existing wells which have tested at over 400 BOPD combined from two (2) productive zones above 2,100’ with an additional shallower zone behind pipe containing approximately 30’ of oil pay and almost 60’ of gas pay. Texas South expects to install production facilities and drill additional development wells in this fault block together with up to three exploratory wells in adjacent fault blocks targeted in the same zones. Through the Sydson transaction, Texas South also is now a party to letters of intent to acquire up to a 45% WI in an additional 1,000+ acres in the Bayou Bouillon area based on a proprietary 55 square mile 3-D seismic survey that demonstrates updip potential in existing reservoirs at about 10,000’. The downdip wells in these same reservoirs have produced over 20 MMBO and 21 BCFG from 59 completions. Texas South’s partner in the Bayou Bouillon project, and the owner of a 50% WI in the Bayou Bouillon acreage, is Thyssen Petroleum, USA, a privately held independent oil and gas exploration and production company based in Houston and Monaco.

In Texas, Texas South has acquired a 50% WI in the undrilled acreage above 4,500’ in the West Tuleta Field, Bee County, Texas comprised of approximately 1,800 gross acres and 900 net acres with a net revenue interest of approximately 75%. The primary drilling objectives are the Vicksburg and Hockley sands which are structurally high on this acreage to historic downdip production from these sands totaling over 500,000 BO.

In the adjacent Ray Field, also in Bee County, Texas, Texas South has acquired a 50% WI in the undrilled, acreage on the Walton, Campbell, and Ray leases comprising approximately 75 gross acres with a net revenue interest of approximately 75%. The primary drilling objectives on this acreage are also the Vicksburg and Hockley sands updip to prior production, also above 3,700’.

Regarding the acquisition, Texas South co-founders Messrs. Askew and Connally issued the following joint statement, “We believe our GOM portfolio of large-scale, potentially high impact prospects with GulfSlope provides a very attractive platform from which to build a significant oil and gas exploration company. For more than two years as the energy industry has faced historically challenging times, we have focused on enhancing our platform through the acquisition of complementary assets, as well as developing an experienced and successful operational management team. During that time we have also supplemented our core drill-ready subsalt GOM portfolio with large working interest positions in two drill-ready GOM supra salt prospects, Canoe and Selectron Shallow, and have analyzed numerous other available opportunities. In completing the Sydson acquisition, we have been able to accomplish our goal and to transform Texas South. Mr. Mayell and his team bring a complementary mix of near term potential production, as well as exploration and development opportunities which should further enhance our value potential in the strengthening energy sector. We are excited to work with Mr. Mayell and his team to exploit the Sydson-acquired opportunities and to add these opportunities to our existing significant offshore prospects which we plan to begin drilling in 2017.”

Mr. Mayell commented, “We have been aware of and highly impressed by the current portfolio of subsalt GOM prospects that Messrs. Askew and Connally and their financial partners acquired for Texas South. After Texas South added significant working interest positions in the shallow offshore prospects – Canoe and Selectron Shallow – in a creative and timely acquisition in mid-2016, we began discussions to consider combining Sydson’s inventory of onshore Texas/Louisiana projects and the extensive operational expertise of Sydson management with the large scale, high potential Texas South portfolio and its entrepreneurial culture. We are delighted to close this transaction and expect to immediately begin transforming Texas South into an onshore development company with near-term oil potential, production and exploration expectations while allowing us to take advantage of the existing GOM prospects already developed by Texas South and GSPE. It is our assessment that this combination provides Texas South with a balanced overall portfolio that Texas South can exploit for the benefit of its shareholders. We look forward to a very active and exciting year ahead, with both onshore and offshore operational activities.”

Michael J. Mayell

mmayell@texasouth.com

Office: 713-820-6300