Form 10-Q, 3Q 2005

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2005

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO

COMMISSION FILE NUMBER 1-13455

TETRA Technologies, Inc.

(Exact name of registrant as specified in its charter)

Delaware	74-2148293
(State of incorporation)	(I.R.S. Employer Identification No.)

25025 Interstate 45 North, Suite 600

The Woodlands, Texas 77380

(Address of principal executive offices and zip code)

(281) 367-1983

(Registrant's telephone number, including area code)

INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING THE PRECEDING TWELVE MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES [ X ] NO [ ]

INDICATE BY CHECK MARK WHETHER THE REGISTRANT IS AN ACCELERATED FILER (AS DEFINED IN RULE 12b-2 OF THE EXCHANGE ACT). YES [ X ] NO [ ]

INDICATE BY CHECK MARK WHETHER THE REGISTRANT IS A SHELL COMPANY (AS DEFINED IN RULE 12b-2 OF THE EXCHANGE ACT). YES [ ] NO [ X ]

AS OF NOVEMBER 1, 2005, THERE WERE 34,698,913 SHARES OUTSTANDING OF THE COMPANY'S COMMON STOCK, $0.01 PAR VALUE PER SHARE.

PART I

FINANCIAL INFORMATION

Item 1. Financial Statements.

TETRA Technologies, Inc. and Subsidiaries

Consolidated Statements of Operations

(In Thousands, Except Per Share Amounts)

(Unaudited)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2005		2004		2005		2004
Revenues:
Product sales	$59,917		$43,887		$201,342		$125,776
Services and rentals	62,593		46,036		184,088		118,206
Total revenues	122,510		89,923		385,430		243,982

Cost of revenues:
Cost of product sales	49,840		33,617		158,554		98,211
Cost of services and rentals	45,211		34,113		129,141		89,762
Total cost of revenues	95,051		67,730		287,695		187,973
Gross profit	27,459		22,193		97,735		56,009

General and administrative expense	18,433		14,417		55,593		38,233
Operating income	9,026		7,776		42,142		17,776

Interest (income) expense, net	1,408		403		4,320		219
Other (income) expense	(1,223	)	(8	)	(3,010	)	(339	)
Income before taxes and discontinued operations	8,841		7,381		40,832		17,896
Provision for income taxes	2,644		2,258		13,681		5,780
Income before discontinued operations	6,197		5,123		27,151		12,116
Loss from discontinued operations, net of taxes	–		(3	)	(270	)	(349	)

Net income	$6,197		$5,120		$26,881		$11,767

Basic net income per common share:
Income before discontinued operations	$0.18		$0.15		$0.80		$0.36
Loss from discontinued operations	–		(0.00	)	(0.01	)	(0.01	)
Net income	$0.18		$0.15		$0.79		$0.35

Average shares outstanding	34,691		33,563		34,149		33,483

Diluted net income per common share:
Income before discontinued operations	$0.17		$0.14		$0.76		$0.34
Loss from discontinued operations	–		(0.00	)	(0.01	)	(0.01	)
Net income	$0.17		$0.14		$0.75		$0.33

Average diluted shares outstanding	36,287		35,592		35,972		35,496

See Notes to Consolidated Financial Statements

TETRA Technologies, Inc. and Subsidiaries

Consolidated Balance Sheets

(In Thousands)

	September 30, 2005		December 31, 2004
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$3,240		$5,561
Restricted cash	550		542
Trade accounts receivable, net of allowance for doubtful accounts of $1,149 in 2005 and $484 in 2004	105,123		86,544
Inventories	68,894		54,104
Deferred tax assets	1,709		1,816
Assets of discontinued operations	–		395
Prepaid expenses and other current assets	11,470		8,934
Total current assets	190,986		157,896

Property, plant and equipment:
Land and building	18,498		17,003
Machinery and equipment	228,479		219,625
Automobiles and trucks	16,817		15,466
Chemical plants	47,638		48,961
Oil and gas producing assets	202,053		58,868
Construction in progress	10,242		8,785
	523,727		368,708
Less accumulated depreciation and depletion	(164,606	)	(145,688	)
Net property, plant and equipment	359,121		223,020

Other assets:
Cost in excess of net assets acquired	105,646		107,643
Patents, trademarks, and other intangible assets, net of accumulated amortization of $8,251 in 2005 and $7,152 in 2004	6,434		7,952
Other assets	11,743		12,477
Total other assets	123,823		128,072
	$673,930		$508,988

See Notes to Consolidated Financial Statements

TETRA Technologies, Inc. and Subsidiaries

Consolidated Balance Sheets

(In Thousands)

	September 30, 2005		December 31, 2004
	(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable	$49,314		$34,006
Derivative liability	14,488		60
Current portion of decommissioning liabilities	9,227		2,532
Other accrued liabilities	46,320		24,060
Liabilities of discontinued operations	164		186
Total current liabilities	119,513		60,844

Long-term debt	132,963		143,754
Deferred income taxes	24,423		25,971
Decommissioning liabilities, net	127,837		36,567
Other liabilities	5,692		5,671
Total long-term and other liabilities	290,915		211,963

Commitments and contingencies

Stockholders' equity:
Common stock, par value $0.01 per share; 70,000,000 shares authorized; 35,839,964 shares issued at September 30, 2005 and 34,865,514 shares issued at December 31, 2004	359		349
Additional paid-in capital	119,573		105,799
Treasury stock, at cost; 1,148,488 shares held at September 30, 2005 and 1,094,331 shares held at December 31, 2004	(12,064	)	(10,279	)
Accumulated other comprehensive income (loss)	(9,419	)	2,140
Retained earnings	165,053		138,172
Total stockholders' equity	263,502		236,181
	$673,930		$508,988

See Notes to Consolidated Financial Statements

TETRA Technologies, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(In Thousands)

(Unaudited)

	Nine Months Ended September 30,
	2005		2004
Operating activities:
Net income	$26,881		$11,767
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation, depletion, accretion and amortization	30,972		22,646
Oil and gas property impairment	1,907		–
Provision for deferred income taxes	2,087		800
Provision for doubtful accounts	686		(138	)
Gain on sale of property, plant and equipment, net	(2,345	)	(520	)
Cost of compressor units sold	5,317		1,006
Other non-cash charges and credits	1,503		129
Equity in income of unconsolidated subsidiary	(345	)	–
Changes in operating assets and liabilities, net of assets acquired:
Trade accounts receivable	(19,584	)	2,202
Inventories	(15,417	)	(7,048	)
Prepaid expenses and other current assets	(2,774	)	3,357
Trade accounts payable and accrued expenses	42,190		14,956
Decommissioning liabilities	(1,901	)	(3,140	)
Discontinued operations: non-cash charges and working capital changes	270		545
Other	268		(437	)
Net cash provided by operating activities	69,715		46,125

Investing activities:
Purchases of property, plant and equipment	(78,627	)	(45,175	)
Acquisition of businesses	–		(151,091	)
Change in restricted cash	(8	)	248
Increase in other assets	(238	)	(125	)
Proceeds from sale of property, plant and equipment	5,470		356
Net cash used in investing activities	(73,403	)	(195,787	)

Financing activities:
Proceeds from long-term debt and capital lease obligations	44,613		265,987
Principal payments on long-term debt and capital lease obligations	(49,621	)	(130,038	)
Repurchase of common stock	(2,352	)	(3,323	)
Proceeds from sale of common stock and exercised stock options	9,078		3,771
Net cash provided by financing activities	1,718		136,397
Effect of exchange rate changes on cash	(351	)	–

Decrease in cash and cash equivalents	(2,321	)	(13,265	)
Cash and cash equivalents at beginning of period	5,561		16,677
Cash and cash equivalents at end of period	$3,240		$3,412

Supplemental cash flow information:
Interest paid	$5,875		$362
Income taxes paid	9,597		652

Supplemental disclosure of non-cash investing and financing activities:
Oil and gas properties acquired through assumption of decommissioning liabilities	$81,290		$7,477

See Notes to Consolidated Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE A – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

The consolidated financial statements include the accounts of TETRA Technologies, Inc. and its subsidiaries (the Company). Investments in unconsolidated joint ventures in which the Company participates are accounted for using the equity method. All significant intercompany accounts and transactions have been eliminated in consolidation.

The accompanying unaudited consolidated financial statements have been prepared in accordance with Rule 10-01 of Regulation S-X for interim financial statements required to be filed with the Securities and Exchange Commission (SEC) and do not include all information and footnotes required by generally accepted accounting principles for complete financial statements. However, the information furnished reflects all normal recurring adjustments, which are, in the opinion of management, necessary to provide a fair statement of the results for the interim periods. The accompanying financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2004.

In August 2005, the Company declared a 3-for-2 stock split, which was effected in the form of a stock dividend to all stockholders of record as of August 19, 2005 (the Record Date). On August 26, 2005, stockholders received one additional share of common stock for each two shares held on the Record Date, with fractional shares paid in cash based on the closing price per share of the common stock on the Record Date. The accompanying unaudited consolidated financial statements retroactively reflect the effect of the 3-for-2 stock split and, accordingly, all disclosures involving the number of shares of common stock outstanding or issued, and all per share amounts, retroactively reflect the impact of the stock split.

Certain previously reported financial information has been reclassified to conform to the current year period’s presentation. The impact of such reclassifications was not significant to the prior year period’s overall presentation.

Statements of Cash Flows

For the purposes of the statements of cash flows, the Company considers all highly liquid cash investments with a maturity of three months or less to be cash equivalents.

Inventories

Inventories are stated at the lower of cost or market value and consist primarily of finished goods. Cost is determined using the weighted average method.

Net Income per Share

The following is a reconciliation of the weighted average number of common shares outstanding with the number of shares used in the computations of net income per common and common equivalent share:

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2005	2004	2005	2004
Number of weighted average common shares outstanding	34,691,476	33,563,186	34,148,872	33,483,213
Assumed exercise of stock options	1,595,890	2,029,248	1,822,974	2,013,185

Average diluted shares outstanding	36,287,366	35,592,434	35,971,846	35,496,398

In applying the treasury stock method to determine the dilutive effect of the stock options outstanding during the first nine months of 2005, the average market price of $21.62 was used.

Stock-Based Compensation

The Company accounts for stock-based compensation using the intrinsic value method. The table below shows the pro forma effect on reported net income and earnings per share, as required under Statement of Financial Accounting Standards (SFAS) No. 123, amended by SFAS No. 148, as if the Company had elected to recognize the compensation cost based on the fair value of the options granted at the grant date and had amortized the expense over the options’ vesting period.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2005		2004		2005		2004
	(In Thousands, Except Per Share Amounts)
Net income, as reported	$6,197		$5,120		$26,881		$11,767
Stock-based employee compensation expense in reported net income, net of related tax effects	–		–		–		–
Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effect	(633	)	(609	)	(2,700	)	(1,766	)
Pro forma net income	$5,564		$4,511		$24,181		$10,001

Earnings per share:
Basic – as reported	$0.18		$0.15		$0.79		$0.35
Basic – pro forma	$0.16		$0.13		$0.71		$0.30

Diluted – as reported	$0.17		$0.14		$0.75		$0.33
Diluted – pro forma	$0.15		$0.13		$0.67		$0.28

Average shares	34,691		33,563		34,149		33,483
Average diluted shares	36,287		35,592		35,972		35,496

Hurricane Repair Expenses

The Company incurred damages to certain of its onshore and offshore operating equipment and facilities as a result of hurricanes Katrina and Rita during the third quarter of 2005. The damages affected certain of the Company’s fluids facilities, as well as certain of its decommissioning assets, including one of its heavy lift barges. The Company’s Maritech Resources, Inc. (Maritech) subsidiary also suffered varying levels of damage to the majority of its offshore oil and gas producing platforms, and three of its platforms were completely destroyed. The Company is currently assessing the extent of such damages, and has begun efforts to repair and restore certain damaged assets. The Company maintains customary insurance protection covering substantially all of the damages incurred; however, certain uninsured assets which were destroyed during the storms have been charged to earnings. In addition, repair costs incurred up to the amount of deductibles are charged to earnings as they are incurred.

New Accounting Pronouncements

In December 2004, the Financial Accounting Standard Board (FASB) issued SFAS No. 123(R), “Share-Based Payment” (SFAS No. 123R), which is a revision of SFAS No. 123. As modified by the SEC in April 2005, the revised statement is effective at the beginning of the first fiscal year beginning after June 15, 2005. SFAS No. 123R must be applied to new awards and previously granted awards that are not fully vested on the effective date. The Company currently accounts for stock-based compensation using the intrinsic value method. Accordingly, compensation cost for previously granted awards that were not recognized under SFAS No. 123 will be recognized under SFAS No. 123R. However, had the Company adopted SFAS No. 123R in prior periods, the impact of that standard would have approximated the impact of SFAS No. 123 as described in the above disclosure of pro forma net income and earnings per share. SFAS No. 123R also requires the benefits of tax deductions in excess of recognized compensation cost be reported as a financing cash flow, rather than as

an operating cash flow as required under current literature. This requirement will reduce net operating cash flow and increase net financing cash flow in periods after adoption. While the Company cannot accurately estimate what those future amounts will be (as they depend on, among other things, when employees exercise stock options), the amounts of operating cash flow recognized for such excess tax deductions were $5.3 million and $1.8 million during the nine months ended September 30, 2005 and 2004, respectively.

In March 2005, the SEC issued Staff Accounting Bulletin No. 107, “Share-Based Payment” (SAB No. 107) to provide the SEC staff’s views and guidance in applying the provisions of SFAS No. 123R. SAB No. 107 was issued to assist companies with the initial implementation of SFAS No. 123R, express the SEC’s views on the interaction between SFAS No. 123R and certain SEC rules and regulations, and provide interpretations regarding the valuation of share-based payment arrangements for public companies. The Company will apply the guidance provided in SAB No. 107 prospectively, and the Company does not believe that applying the new guidance will have a material impact on its financial results.

During the first quarter of 2005, the FASB issued Interpretation No. 47, “Accounting for Conditional Asset Retirement Obligations” (FIN No. 47). The interpretation clarifies the requirement to record abandonment liabilities stemming from legal obligations when the retirement depends on a conditional future event. FIN No. 47 requires that the uncertainty about the timing or method of settlement of a conditional retirement obligation be factored into the measurement of the liability when sufficient information exists. FIN No. 47 is effective for fiscal years ending after December 31, 2005, and the Company does not believe that applying this interpretation will have a material impact on its financial results.

NOTE B – ACQUISITIONS AND DISPOSITIONS

In July 2005, pursuant to a purchase and sale agreement entered into in June 2005, Maritech acquired oil and gas producing properties located in the offshore Gulf of Mexico, in exchange for the assumption of the associated decommissioning obligations with an undiscounted value of approximately $35.6 million. The previous owner of the properties is contractually obligated to pay up to $19.5 million of the decommissioning obligations when the abandonment and decommissioning work is performed. The acquired oil and gas producing properties were recorded at a cost of approximately $13.0 million, consisting primarily of the discounted fair value of the net decommissioning liability assumed.

In August 2005, pursuant to a purchase and sale agreement entered into in July 2005, a wholly owned subsidiary of Maritech acquired oil and gas producing properties located in the inland waters region of Louisiana in exchange for the assumption of the associated decommissioning liabilities with a discounted fair value of approximately $17.8 million. The purchase and sale agreement also provided for cash consideration to be paid by Maritech of $49.1 million, subject to adjustment for the acquired properties’ cash flows occurring on or after the April 1, 2005 effective date. As a result of such cash adjustment for the acquired properties’ cash flows, Maritech paid net cash of approximately $41.6 million and recorded the acquired properties at a cost of approximately $59.4 million.

In September 2005, pursuant to a purchase and sale agreement entered into in July 2005, Maritech acquired oil and gas producing properties located in the offshore and inland waters region of the Gulf of Mexico in exchange for the assumption of the associated decommissioning liabilities with a discounted fair value of approximately $66.1 million, along with other associated liabilities of approximately $2.2 million. The purchase and sale agreement also provided for Maritech to pay cash consideration of $4.0 million, subject to adjustment for the effects of exercised preferential rights and the properties’ cash flows occurring on or after the January 1, 2005 effective date. As a result of approximately $22.3 million of such cash adjustments primarily relating to the properties’ cash flows, Maritech received a net settlement of approximately $18.3 million of cash at closing, which remains subject to final adjustment. The acquired oil and gas producing properties were recorded at their net cost of approximately $51.7 million, which includes approximately $1.7 million of associated transaction costs.

The results of operations from each of the above oil and gas property acquisitions are included within the Company’s Well Abandonment & Decommissioning segment, beginning in the month in which the acquisition was consummated. For each of the above acquisitions of oil and gas properties, the Company has allocated the acquisition purchase price to the specific properties acquired based on the estimated fair values of the properties. Such allocation is preliminary and may change as additional information becomes available.

The pro forma information presented below has been provided to give effect to the September 2005 acquisition of oil and gas producing properties by Maritech as if it had occurred at the beginning of the periods

presented. The pro forma information is presented for illustrative purposes only and is based on estimates and assumptions deemed appropriate by the Company. The following pro forma information is not necessarily indicative of the historical results that would have been achieved if the acquisition transaction had occurred in the past and the Company’s operating results may have been different from those reflected in the pro forma information below. The pro forma information is not indicative of future results to be expected by the Company due to the production declines of the oil and gas properties acquired and other changes in the properties’ operations. Therefore, the pro forma information should not be relied upon as an indication of the operating results that the Company would have achieved if the transaction had occurred at the beginning of the periods presented or the future results that the Company will achieve after the acquisition.

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
Pro Forma Financial Information	2005	2004	2005	2004
	(In Thousands, Except Per Share Amounts)
Revenues	$129,915	$106,155	$415,584	$300,441
Income before discontinued operations	6,455	5,358	27,651	16,114
Net income	$6,455	$5,355	$27,381	$15,765

Per share information:
Income before discontinued operations
Basic	$0.19	$0.16	$0.81	$0.48
Diluted	$0.18	$0.15	$0.77	$0.45

Net income
Basic	$0.19	$0.16	$0.80	$0.47
Diluted	$0.18	$0.15	$0.76	$0.44

During the first nine months of 2005, Maritech sold certain oil and gas property interests in four separate transactions. In January 2005, Maritech sold a portion of its interest in the oil and gas lease covering one of its offshore properties and retained the decommissioning liability related to the interest conveyed. In connection with the sale, the buyer committed to perform certain development drilling on the lease, received an option to participate in the drilling of a prospect identified on the lease, and agreed to carry a portion of Maritech’s share of the associated drilling costs. In February 2005, Maritech assigned a 75% interest in the oil and gas lease covering one of its offshore properties, subject to the buyer’s commencement of future drilling operations on three prospects identified on the lease. The buyer commenced drilling operations on the first well on the initial prospect in May 2005. In March 2005, Maritech acquired certain interests in an offshore oil and gas property and then sold such acquired interests to a separate party. In August 2005, Maritech sold its interest in an oil and gas property in exchange for the buyer’s assumption of the associated decommissioning liability. Pursuant to these transactions, and in addition to being carried in the drilling costs discussed above, Maritech received an aggregate of $1.3 million cash in exchange for property interests with approximately 7.8 million equivalent Mcf of primarily proved undeveloped reserves, net of reserves acquired. Maritech recorded gains and prospect fee revenues as a result of the above transactions totaling approximately $2.0 million during the nine months ended September 30, 2005.

In May 2005, the Company’s Fluids Division sold certain international assets for approximately $1.0 million cash. In July 2005, the Company sold certain well abandonment equipment located in west Texas for approximately $2.1 million cash. In connection with these transactions, the Company recorded gains totaling approximately $1.0 million during the nine months ended September 30, 2005.

NOTE C – DISCONTINUED OPERATIONS

During the third quarter of 2003, the Company made the decision to dispose of its Norwegian process services operation and began selling the associated facility assets. The Company determined that the Norwegian process services operation’s long-term model did not fit its core business strategy. In April 2004, the Company sold a portion of the facility assets to a local Norwegian company. In June 2005, the Company curtailed its attempts to sell the remaining facility assets, recorded an impairment expense for the carrying value of certain of the remaining facility assets, and transported the remaining equipment to the United States for use in the Company’s domestic process services operations. The Norwegian process services operation was previously reflected as a component of the Company’s Production Enhancement Division.

The Company has accounted for its Norwegian process services business as discontinued operations, and excludes this business from continuing operations. A summary of financial information related to the Company’s discontinued operations for each of the periods presented is as follows:

	Three Months Ended			Nine Months Ended,
	September 30,			September 30,
	2005	2004		2005		2004
	(In Thousands)
Revenues	$–	$–		$–		$70

Income (loss) before taxes	–	(4	)	(412	)	(535	)
Income tax provision (benefit)	–	(1	)	(142	)	(186	)
Loss from discontinued operations, net of taxes	$–	$(3	)	$(270	)	$(349	)

NOTE D – OIL AND GAS OPERATIONS

The Company follows the successful efforts method of accounting for the oil and gas operations of its Maritech subsidiary. Under the successful efforts method, all capitalized costs of oil and gas properties are accumulated and recorded separately for each field, and are assessed for impairment in value whenever indicators become evident, with any impairment charged to expense. In connection with Maritech’s decision not to attempt certain workover procedures necessary to restore production on an offshore field which it operates, the Company charged the approximately $1.9 million net carrying value of such field to earnings during the first quarter of 2005.

NOTE E – LONG-TERM DEBT AND OTHER BORROWINGS

Long-term debt consists of the following:

	September 30, 2005	December 31, 2004
	(In Thousands)
General purpose revolving line of credit for $140 million with interest at LIBOR plus 0.75% - 1.75%	$44,229	$50,551
5.07% Senior Notes, Series 2004-A	55,000	55,000
4.79% Senior Notes, Series 2004-B	33,734	38,203
	132,963	143,754
Less current portion	–	–

Total long-term debt	$132,963	$143,754

NOTE F – COMPREHENSIVE INCOME

Comprehensive income for the three and nine month periods ended September 30, 2005 and 2004 is as follows:

	Three Months Ended September 30,
	2005		2004
	(In Thousands)
Net income	$6,197		$5,120

Net change in derivative fair value, net of taxes of $(4,801) and $(500), respectively	(7,901	)	(865	)
Reclassification of derivative fair value into earnings, net of taxes of $248 and $228, respectively	369		395
Foreign currency translation adjustment, net of taxes of $13 and $57, respectively	270		109

Comprehensive income (loss)	$(1,065	)	$4,759

	Nine Months Ended September 30,
	2005		2004
	(In Thousands)
Net income	$26,881		$11,767

Net change in derivative fair value, net of taxes of $(5,774) and $(1,061), respectively	(9,748	)	(1,863	)
Reclassification of derivative fair value into earnings, net of taxes of $479 and $749, respectively	808		1,327
Foreign currency translation adjustment, net of taxes of $(1,953) and $18, respectively	(2,619	)	32

Comprehensive income	$15,322		$11,263

NOTE G – HEDGE CONTRACTS

The Company has market risk exposure in the sales prices it receives for its oil and gas production and currency exchange rate risk exposure related to investments in certain of its international operations. The Company’s financial risk management activities involve, among other measures, the use of derivative financial instruments, such as swap and collar agreements, to hedge the impact of market price risk exposures for a significant portion of its oil and gas production. The Company is exposed to the volatility of oil and gas prices for the portion of its oil and gas production that is not hedged.

The Company believes that its swap and collar agreements are “highly effective cash flow hedges,” as defined by SFAS No. 133, in managing the volatility of future cash flows associated with its oil and gas production. The effective portion of the change in the derivative’s fair value (i.e., that portion of the change in the derivative’s fair value that offsets the corresponding change in the cash flows of the hedged transaction) is initially reported as a component of accumulated other comprehensive income (loss) and will be subsequently reclassified into revenues utilizing the specific identification method when the hedged exposure affects earnings (i.e., when hedged oil and gas production volumes are reflected in revenues). Any “ineffective” portion of the change in the derivative’s fair value is recognized in earnings immediately. The fair value of the liability for outstanding cash flow hedge swap and collar contracts at September 30, 2005 was approximately $14.5 million, which is included in current liabilities in the accompanying consolidated balance sheet. Such amount increased by approximately $12.2 million during the third quarter of 2005. Changes in the fair value of the liability, net of taxes, are recorded in other comprehensive income (loss) within stockholders’ equity. The amounts of gains or losses from the changes in contract fair value are reclassified into earnings over the term of the hedge contracts. For the nine month period ended September 30, 2005, the Company recorded approximately $0.2 million related to the ineffective portion of the change in the derivatives’ fair value and has classified such loss within other (income) expense in the accompanying consolidated statements of operations.

During the year ended December 31, 2004, the Company borrowed 35 million Euros to fund the acquisition of the calcium chloride assets purchased from the Finnish chemical company, Kemira. This debt is designated as a hedge of the Company’s net investment in that foreign operation. The hedge is considered to be effective, since the debt balance designated as the hedge is less than or equal to the net investment in the foreign operation. At September 30, 2005, the Company had 34 million Euros ($41.0 million) designated as a hedge of a net investment in a foreign operation. Since the inception of the hedge, and as of September 30, 2005, changes in the foreign currency exchange rate have resulted in a decrease of approximately $1.2 million in the value of the outstanding debt balance and an associated cumulative translation adjustment account of $0.8 million, net of taxes.

NOTE H – COMMITMENTS AND CONTINGENCIES

The Company, its subsidiaries and other related companies are named as defendants in numerous lawsuits and as respondents in certain governmental proceedings arising in the ordinary course of business. While the outcome of lawsuits or other proceedings against the Company cannot be predicted with certainty, management does not expect these matters to have a material adverse impact on the Company.

A subsidiary of the Company, TETRA Micronutrients, Inc. (TMI), previously owned and operated a production facility located in Fairbury, Nebraska. TMI is subject to an Administrative Order on Consent issued to American Microtrace, Inc. (n/k/a/ TETRA Micronutrients, Inc.) in the proceeding styled In the Matter of American Microtrace Corporation, EPA I.D. No. NED00610550, Respondent, Docket No. VII-98-H-0016, dated September 25, 1998 (the Consent Order), with regard to the Fairbury facility. TMI is liable for future remediation costs at the Fairbury facility under the Consent Order; however, the current owner of the Fairbury facility is responsible for costs associated with the closure of that facility. The Company has reviewed the estimated remediation costs prepared by its independent, third party environmental engineering consultant, which it based on a detailed environmental study. The estimated remediation costs range from $0.6 million to $1.4 million. Based upon its review and discussions with its third party consultants, the Company has established a reserve for such remediation costs of $0.6 million, undiscounted, at September 30, 2005 and December 31, 2004. The reserve will be adjusted as information develops or conditions change.

The Company has not been named a potentially responsible party by the EPA or any state environmental agency.

NOTE I – INDUSTRY SEGMENTS

The Company manages its operations through three divisions: Fluids, Well Abandonment & Decommissioning (WA&D) and Production Enhancement.

The Company’s Fluids Division manufactures and markets clear brine fluids, additives, and other associated products and services to the oil and gas industry for use in well drilling, completion, and workover operations both domestically and in certain regions of Europe, Asia (including the Middle East), Latin America and Africa. The Division also markets certain fluids and dry calcium chloride manufactured at its production facilities to a variety of domestic and international markets outside the energy industry.

The Company’s WA&D Division provides a broad array of services required for the abandonment of depleted oil and gas wells and the decommissioning of platforms, pipelines, and other associated equipment. The Division services the onshore U.S. Gulf Coast region and the inland waters and offshore markets of the Gulf of Mexico. The Division is also an oil and gas producer from wells acquired in its well abandonment and decommissioning business and provides electric wireline, engineering, workover, and drilling services.

The Company’s Production Enhancement Division provides production testing services to the Texas, Louisiana, Alabama, Mississippi, the offshore Gulf of Mexico and certain Latin American markets. In addition, it is engaged in the design, fabrication, sale, lease and service of wellhead compression equipment primarily used to enhance production from mature, low pressure natural gas wells located principally in the mid-continent, mid-western, western, Rocky Mountain, Texas and Louisiana regions of the United States as well as in western Canada and Mexico. The Division also provides the technology and services required for the separation and recycling of oily residuals generated from petroleum refining operations.

The Company generally evaluates performance and allocates resources with regard to its operating divisions based on profit or loss from operations before income taxes and nonrecurring charges, return on investment and other criteria. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies. Transfers between segments, as well as geographic areas, are priced at the estimated fair value of the products or services as negotiated between the operating units. “Corporate Overhead” includes corporate general and administrative expenses, interest income and expense, and other general corporate income and expense.

Summarized financial information concerning the business segments is as follows:

	Fluids	WA&D	Production Enhancement	Intersegment Eliminations		Corporate Overhead		Consolidated
	(In Thousands)
Three Months Ended September 30, 2005

Revenues from external customers
Products	$41,823	$15,095	$2,999	$–		$–		$59,917
Services and rentals	5,222	33,166	24,205	–		–		62,593
Intersegmented revenues	13	–	19	(32	)	–		–
Total revenues	47,058	48,261	27,223	(32	)	–		122,510

Income before taxes and discontinued operations	6,233	2,618	7,077	–		(7,087	)(1)	8,841

Total assets	$190,960	$283,564	$186,703	$–		$12,703		$673,930

Three Months Ended September 30, 2004

Revenues from external customers
Products	$29,590	$12,665		$1,632	$–		$–		$43,887
Services and rentals	4,856	24,463		16,717	–		–		46,036
Intersegmented revenues	33	(9	)	37	(61	)	–		–
Total revenues	34,479	37,119		18,386	(61	)	–		89,923

Income before taxes and discontinued operations	3,187	5,652		3,047	–		(4,505	)(1)	7,381

Total assets	$162,521	$141,149		$170,039	$–		$11,641	(2)	$485,350

Nine Months Ended September 30, 2005

Revenues from external customers
Products	$147,131	$45,885		$8,326	$–		$–		$201,342
Services and rentals	15,609	98,748		69,731	–		–		184,088
Intersegmented revenues	56	–		84	(140	)	–		–
Total revenues	162,796	144,633		78,141	(140	)	–		385,430

Income before taxes and discontinued operations	24,080	19,073		19,867	–		(22,188	)(1)	40,832

Total assets	$190,960	$283,564		$186,703	$–		$12,703		$673,930

Nine Months Ended September 30, 2004

Revenues from external customers
Products	$89,844	$34,300		$1,632	$–		$–		$125,776
Services and rentals	12,597	63,126		42,483	–		–		118,206
Intersegmented revenues	73	125		124	(322	)	–		–
Total revenues	102,514	97,551		44,239	(322	)	–		243,982

Income before taxes and discontinued operations	11,190	11,717		6,668	–		(11,679	)(1)	17,896

Total assets	$162,521	$141,149		$170,039	$–		$11,641	(2)	$485,350

(1) Amounts reflected include the following general corporate expenses:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2005	2004	2005	2004
	(In Thousands)
General and administrative expense	$5,470	$3,912	$17,318	$11,037
Interest (income) expense, net	1,392	392	4,381	218
Other general corporate (income) expense, net	225	201	489	424
Total	$7,087	$4,505	$22,188	$11,679

(2) Includes assets of discontinued operations.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Business Overview

Despite the impact of two hurricanes during the third quarter of 2005, the Company continued to show growth in revenues and profitability as compared to the prior year period. Hurricanes Katrina and Rita affected several of the Company’s operations in the U.S. Gulf of Mexico, including fluids sales, oil and gas production, well abandonment and decommissioning and production testing activity. The Company suffered damages at certain of its fluids facilities, and to certain of its decommissioning assets, including one of its heavy lift barges. The Company’s Maritech Resources, Inc. subsidiary (Maritech) suffered varying levels of damage to the majority of its offshore oil and gas producing platforms, and three of its platforms were completely destroyed. The Company is currently assessing the extent of such damages, and has begun efforts to repair and restore certain damaged assets. The Company maintains insurance protection covering substantially all of the property damages incurred; however, repair costs incurred up to the amount of deductibles are charged to earnings as they are incurred. A portion of such repair costs were incurred during the third quarter of 2005. The Company’s insurance protection does not include business interruption coverage. The Company expects to reestablish all of its businesses that were interrupted by the storm, and as of November 9, 2005, only one of its fluids facilities has yet to resume operations. Maritech suffered its most severe offshore platform damage on low or non-producing property locations. Maritech has resumed daily production from a portion of its producing properties, and is currently assessing damages to its production platforms, and planning and performing necessary repair efforts. Much of Maritech’s production is processed through neighboring platforms, pipelines, and onshore processing facilities of other operators and third parties. The full resumption of Maritech’s production levels will therefore also depend on the damage assessments and repairs of certain of these third party assets, the timing of which is outside of Maritech’s control. Even with the disruptions to the Company’s consolidated operations caused by the storms, the Company’s year to date revenues, gross profit and pretax earnings increased compared to the prior year period, reflecting the impact of acquisitions and growth by each of its operating segments. Fluids Division results include the impact of increased pricing and activity, as well as the impact of the September 2004 acquisition of its TCE operations. The Well Abandonment & Decommissioning (WA&D) Division results reflect the increased level of abandonment and decommissioning activity by several of its customers. The Division’s Maritech subsidiary closed three significant acquisitions of producing properties during the third quarter of 2005, although storm interruptions postponed much of the revenue and profitability impact from these acquisitions. The Company’s Production Enhancement Division also increased its operations due primarily to the July 2004 acquisition of its Compressco operations as well as from increased production testing activity.

The Company’s consolidated balance sheet as of September 30, 2005 included current assets of $191.0 million and total assets of $673.9 million, along with total long-term debt of $133.0 million, which is scheduled to mature from 2009 to 2011. The operating cash flows from each of the Company’s operating divisions, along with the additional availability under the Company’s revolving line of credit, represent the primary sources of readily available capital for the Company. The Company’s growth strategy includes expanding its existing businesses – through internal growth as well as through suitable acquisitions – and identifying opportunities to establish operations in additional niche oil and gas service markets. The acquisitions of oil and gas producing properties made by Maritech are expected to significantly increase the Company’s operating cash flows both through the third party share of associated future well abandonment and decommissioning work and the increased oil and gas production cash flows expected to be generated by the acquired properties. Exposure to oil and gas commodity price fluctuations related to the increased oil and gas production cash flows is expected to be mitigated by additional commodity derivative transactions entered into during the third quarter of 2005. The Company funded the cash required to acquire these producing properties

with borrowings under its bank credit facility. Such additional borrowings were more than offset, however, by repayments funded by the Company’s operating cash flows, resulting in a reduction of the outstanding balance under the facility from December 31, 2004. The Company’s present financial condition gives it the flexibility to consider additional acquisition opportunities through the use of debt, equity, or any combination thereof.

Critical Accounting Policies

There have been no material changes or developments in the evaluation of the accounting estimates and the underlying assumptions or methodologies pertaining to the Company’s Critical Accounting Policies and Estimates disclosed in its Form 10-K for the year ended December 31, 2004. In preparing its consolidated financial statements, the Company makes assumptions, estimates, and judgments that affect the amounts reported. The Company periodically evaluates its estimates and judgments related to potential impairments of long-lived assets (including goodwill), the collectibility of accounts receivable, and the current cost of future abandonment and decommissioning obligations. The Company’s estimates are based on historical experience and on future expectations that are believed to be reasonable. The combination of these factors forms the basis for judgments made about the carrying values of assets and liabilities that are not readily apparent from other sources. These judgments and estimates may change as new events occur, as new information is acquired, and with changes in the Company’s operating environment. Actual results are likely to differ from the Company’s current estimates, and those differences may be material.

Results of Operations

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2005		2004		2005		2004
	(In Thousands)
Revenues
Fluids	$47,058		$34,479		$162,796		$102,514
WA&D	48,261		37,119		144,633		97,551
Production Enhancement	27,223		18,386		78,141		44,239
Intersegment eliminations	(32	)	(61	)	(140	)	(322	)
	122,510		89,923		385,430		243,982

Gross profit
Fluids	11,288		7,078		38,190		21,771
WA&D	5,732		9,351		29,962		21,822
Production Enhancement	10,435		5,759		29,587		12,436
Intersegment eliminations and other	4		5		(4	)	(20	)
	27,459		22,193		97,735		56,009

Income before taxes and discontinued operations
Fluids	6,233		3,187		24,080		11,190
WA&D	2,618		5,652		19,073		11,717
Production Enhancement	7,077		3,047		19,867		6,668
Corporate overhead	(7,087	)	(4,505	)	(22,188	)	(11,679	)
	8,841		7,381		40,832		17,896

The above information excludes the results of the Norwegian process services business, which have been accounted for as discontinued operations.

Three months ended September 30, 2005 compared with three months ended September 30, 2004.

Consolidated Comparisons

Revenues and Gross Profit – Total consolidated revenues for the quarter ended September 30, 2005 were $122.5 million compared to $89.9 million for the third quarter of the prior year, an increase of 36.2%. Consolidated gross profit increased to $27.5 million in the current year quarter from $22.2 million during the third quarter of 2004, an increase of 23.7%. Consolidated gross profit as a percent of revenues was 22.4% during the third quarter of 2005, compared to 24.7% during the prior year period.

General and Administrative Expenses – General and administrative expenses were $18.4 million during the third quarter of 2005, compared to $14.4 million during the prior year period, an increase of $4.0 million or 27.9%. The increased general and administrative expenses included approximately $2.1 million of increased salaries, incentives, benefits and other associated employee expenses, approximately $0.6 million of higher professional service expenses, approximately $0.7 million of increased depreciation and accretion expenses and approximately $0.6 million of other general expense increases. Despite these increases, general and administrative expenses as a percent of revenue decreased to 15.0%, from 16.0% during the third quarter of the prior year, due to the significant growth of the Company’s operations.

Other Income and Expense – Other income and expense was $1.2 million of income during the third quarter of 2005 primarily from gains on sales of assets during the period.

Interest Expense and Income Taxes – Net interest expense was $1.4 million during the third quarter of 2005, compared to $0.4 million in the prior year period, due to the significant borrowings of long-term debt which were used to fund the Company’s acquisitions during the third quarter of 2004. Such borrowings were outstanding for only a portion of the third quarter of 2004. In addition, the Company increased its net long-term debt balance by approximately $7.7 million during the third quarter of 2005, as borrowings primarily to fund an acquisition of oil and gas properties were partially offset by repayments during the period. The Company’s provision for income taxes during the third quarter of 2005 increased to $2.6 million, compared to $2.3 million during the prior year period, primarily due to increased earnings.

Net Income – Income before discontinued operations was $6.2 million during the third quarter of 2005, compared to $5.1 million in the prior year quarter, an increase of $1.1 million or 21.0%. Income per diluted share before discontinued operations was $0.17 on 36,287,366 average diluted shares outstanding during the third quarter of 2005 compared to $0.14 on 35,592,434 average diluted shares outstanding in the prior year quarter.

Net income was $6.2 million during the third quarter of 2005 compared to $5.1 million in the corresponding prior year period. Net income per diluted share was $0.17 on 36,287,366 average diluted shares outstanding, compared to $0.14 on 35,592,434 average diluted shares outstanding in the prior year quarter.

Divisional Comparisons

Fluids Division – Fluids Division revenues increased from $34.5 million during the third quarter of 2004 to $47.1 million during the third quarter of 2005, an increase of $12.6 million or 36.5%. This increase included approximately $9.2 million of revenues from the Company’s TCE operations, which were acquired in September 2004. In addition, increased product pricing, sales volumes, and service activity generated an additional $3.4 million increase. The Fluids Division incurred damage to certain of its facilities as a result of hurricanes during the third quarter of 2005. In October 2005, one of the Division’s main raw material suppliers announced that it has permanently ceased production from its TDI plant in Lake Charles, Louisiana. This plant supplies feedstock to the Division’s Lake Charles calcium chloride manufacturing facility, which the Division is operating at a reduced level for an indefinite period while it reviews alternative sources of supply. The Lake Charles facility has generated approximately 12% of the Division’s revenues during 2005. During this period when the Company is attempting to acquire supplies from other sources, and until an alternative feedstock supplier is identified, Fluids Division revenues could be decreased as a result of the plant’s reduced operations.

Fluids Division gross profit increased by $4.2 million, or 59.5%, compared to the third quarter of 2004 primarily due to the increased product sales volumes during the third quarter, including the impact of the TCE operations. The increased product prices received during the third quarter of 2005 and a favorable mix of higher margin products and services contributed to the increased gross profit. Most of the damage to certain of the Division’s assets caused by the third quarter hurricanes are covered under the Company’s various insurance policies. Future levels of gross profit may be impacted as the feedstock supply for the Division’s Lake Charles manufacturing facility is obtained from alternate sources that may result in higher finished product costs.

Fluids Division income before taxes during the third quarter of 2005 totaled $6.2 million, compared to $3.2 million in the corresponding prior year period, an increase of $3.0 million or 95.6%. This increase was generated by the $4.2 million increase in gross profit discussed above, and approximately $0.2 million primarily from increased foreign currency gains. These increases were partially offset by approximately $1.4 million of increased administrative expenses, including the administrative expenses of TCE.

Well Abandonment & Decommissioning Division – WA&D Division revenues increased $11.1 million to $48.3 million during the third quarter of 2005, from $37.1 million in the prior year quarter, representing an increase of 30.0%. Well abandonment and decommissioning service revenues increased by approximately $8.7 million, despite hurricane interruptions during the last half of the third quarter. This increase in service revenues was mainly due to increased equipment utilization, particularly by the Division’s decommissioning operations, and due to the purchase of an 800 ton heavy lift barge during the third quarter of 2004. Many operators in the offshore Gulf of Mexico region experienced damage to, or loss of, production platforms during the third quarter storms. As a result, the Division expects increased demand for its services which may result in increased revenues in the future. The Division suffered storm interruptions to many of its service businesses during the third quarter of 2005, but expects that most of these operations will soon be fully restored. The Division’s exploitation and production subsidiary, Maritech, significantly expanded its operations with the acquisition of producing properties in three separate transactions during the third quarter of 2005. Most of the impact from this growth was deferred, however, due to production interruptions caused by the hurricanes. Still, Maritech reported an increase of approximately $2.4 million in revenues during the third quarter of 2005, primarily due to approximately $5.1 million from higher realized oil and gas sales prices compared to the prior year period. This increase was partially offset by a decrease of approximately $2.7 million as a result of decreased production volumes primarily as a result of the recent storms. During much of the last half of the third quarter of 2005, Maritech’s producing properties were shut-in as a result of hurricanes. As of November 9, 2005, a portion of Maritech’s total daily production, including its newly acquired volumes, has been restored; however, much of Maritech’s production is processed through neighboring platforms, pipelines, and onshore processing facilities of other operators or third parties. The full resumption of Maritech’s production levels will therefore also depend on the damage assessments and repairs of certain of these third party assets, the timing of which is outside of Maritech’s control.

WA&D Division gross profit decreased $3.6 million, or 38.7%, from $9.4 million during the third quarter of 2004 to $5.7 million during the third quarter of 2005. Gross profit from the Division’s well abandonment and decommissioning operations increased by approximately $1.6 million during the third quarter of 2005 compared to the prior year period, due to the increased utilization and activity levels discussed above. Maritech’s gross profit decreased by approximately $5.2 million, compared to the prior year period, despite the increased commodity prices previously discussed, due to approximately $10.3 million of increased operating expenses during the quarter, including operating expenses from properties acquired in the above mentioned acquisitions. The Division suffered hurricane damage to certain of its service equipment assets, including one of its heavy lift barges. Maritech suffered varying levels of damage to the majority of its offshore production platforms, and three of its platforms were completely destroyed. The Division is currently assessing the extent of these damages and expects to incur significant costs to repair these assets. All of these damaged assets are covered under the Company’s various insurance policies.

WA&D Division income before taxes was $2.6 million during the third quarter of 2005, a decrease of $3.0 million, or 53.7%, compared to the third quarter of 2004. This decrease was primarily due to the decreased gross profit described above, as well as due to approximately $0.5 million of increased accretion expense associated with newly acquired properties. Partially offsetting these decreases was approximately $1.2 million of gains on the sale of assets during the current year quarter.

Production Enhancement Division – Production Enhancement Division revenues increased from $18.4 million during the third quarter of 2004 to $27.2 million during the third quarter of 2005, an increase of $8.8 million, or 48.1%. This increase was primarily due to the growth in Compressco’s operations, which contributed an approximate $5.2 million increase in revenues, which also includes the impact of having owned Compressco for less than the full quarter of the prior year. In addition, the Division’s production testing and process services operations revenues increased by a total of approximately $3.6 million, compared to the prior year quarter, due to increased activity from certain of its customers.

Production Enhancement Division gross profit increased from $5.8 million during the third quarter of 2004 to $10.4 million during the third quarter of 2005, a $4.7 million or 81.2% increase. Increased gross profit was due to Compressco’s growth and improved margins on the Division’s production testing operations.

Income before taxes for the Production Enhancement Division increased $4.0 million, or 132.3%, from $3.0 million during the prior year third quarter to $7.1 million during the third quarter of 2005. This increase was primarily due to the increased gross profit discussed above, less approximately $0.5 million of increased administrative costs.

Corporate Overhead – Corporate overhead includes corporate general and administrative expenses, interest income and expense, and other income and expense. Such expenses and income are not allocated to the Company’s operating divisions, as they relate to the Company’s general corporate activities. Corporate overhead increased from $4.5 million during the third quarter of 2004 to $7.1 million during the third quarter of 2005, primarily due to increased administrative costs of approximately $1.6 million. In addition, the Company recorded increased net interest expense of approximately $1.0 million during the third quarter of 2005, compared to the prior year period, related to the higher average outstanding balance of long-term debt during the current year period. Such borrowings were outstanding for only a portion of the third quarter of 2004. The increase in administrative costs resulted from approximately $1.0 million of increased salaries and incentive compensation, and approximately $0.6 million of increased office and other general expenses.

Nine months ended September 30, 2005 compared with nine months ended September 30, 2004.

Consolidated Comparisons

Revenues and Gross Profit – Total consolidated revenues for the nine months ended September 30, 2005 were $385.4 million, compared to $244.0 million for the first nine months of the prior year, an increase of 58.0%. Consolidated gross profit during the first nine months of 2005 also increased significantly from the prior year period, from $56.0 million during 2004 to $97.7 million in the current year period, an increase of 74.5%. Consolidated gross profit as a percent of revenues was 25.4% during the first nine months of 2005, compared to 23.0% during the prior year period.

General and Administrative Expenses – Consolidated general and administrative expenses were $55.6 million during the first nine months of 2005, an increase of $17.4 million or 45.4%, compared to the first nine months of 2004. The increase was primarily due to the overall growth of the Company, with a large portion of the increase attributed to the addition of the Compressco and TCE operations, which were acquired during the third quarter of 2004. The increased general and administrative expenses included approximately $11.2 million of increased salaries, incentives, benefits and other associated employee expenses, approximately $2.4 million of higher professional service expenses, approximately $1.1 million of increased office expenses, approximately $1.3 million of increased depreciation and accretion expenses, approximately $0.8 million of increased bad debt expense, approximately $0.3 million of increased insurance costs and approximately $0.3 million of other general expense increases. Due to the significant increase in the Company’s operating revenues, however, general and administrative expenses as a percent of revenue decreased to 14.4% during the first nine months of 2005, compared to 15.7% in the prior year period.

Other Income and Expense – Other income and expense was $3.0 million of income during the first nine months of 2005, compared to $0.3 million of income during the prior year period, an increase of $2.7 million. The increase was primarily due to approximately $1.7 million of increased net gains on sales of assets, approximately $0.6 million of foreign currency gains, and approximately $0.4 million of equity in the earnings of unconsolidated joint ventures.

Interest Expense and Income Taxes – Net interest expense was $4.3 million during the first nine months of 2005, due to significant borrowings of long-term debt used to fund a portion of the Company’s acquisitions during the third quarter of 2004. During the majority of the first nine months of 2004, the Company had no long-term debt balances outstanding other than minimal amounts related to capitalized leases. The Company reduced its long-term debt balance by approximately $5.0 million during the first nine months of 2005 despite borrowing approximately $38.0 million in connection with the closing of a Maritech oil and gas property acquisition during the third quarter of 2005. The Company’s provision for income taxes during the first nine months of 2005 increased to $13.7 million, compared to $5.8 million during the prior year period, primarily due to increased earnings.

Net Income – Income before discontinued operations was $27.2 million during the first nine months of 2005, compared to $12.1 million in the prior year period, an increase of 124.1%. Income per diluted share before discontinued operations was $0.76 on 35,971,846 average diluted shares outstanding during the first nine months of 2005, compared to $0.34 on 35,496,398 average diluted shares outstanding in the prior year period.

Net income was $26.9 million during the first nine months of 2005, compared to $11.8 million in the corresponding prior year period. Net income per diluted share was $0.75 on 35,971,846 average diluted shares outstanding, compared to $0.33 on 35,496,398 average diluted shares outstanding in the prior year quarter.

Divisional Comparisons

Fluids Division – Fluids Division revenues increased significantly, from $102.5 million during the first nine months of 2004 to $162.8 million during the first nine months of 2005, an increase of $60.3 million, or 58.8%. The operations of TCE, which was acquired in September 2004, generated approximately $41.0 million of this increase. Increased product pricing, sales volumes and service activity generated an additional $19.2 million increase. In October 2005, one of the Division’s main raw material suppliers announced that it has permanently ceased production from its TDI plant in Lake Charles, Louisiana. This plant supplies feedstock to the Division’s Lake Charles calcium chloride manufacturing facility, which generated approximately 12% of the Division’s revenues during 2005. The Division is operating its Lake Charles facility at a reduced level for an indefinite period while it reviews alternative sources of supply. During this period when the Company is attempting to acquire supplies from other sources, and until an alternative feedstock supplier is identified, Fluids Division revenues could be decreased as a result of the plant’s reduced operations.

Fluids Division gross profit increased from $21.8 million during the first nine months of 2004 to $38.2 million during the first nine months of 2005, an increase of $16.4 million, or 75.4%, primarily due to the increased product sales volumes during the period, including the impact of the TCE operations. The increased product prices received during the first nine months of 2005 and a favorable mix of higher margin products and services contributed to the increased gross profit. Most of the damage to certain of the Division’s assets caused by third quarter hurricanes are covered under the Company’s various insurance policies. Future levels of gross profit for the Fluids Division may be impacted as the feedstock supply for the Division’s Lake Charles manufacturing facility is obtained from alternate sources that may result in higher finished product costs.

Fluids Division income before taxes during the first nine months of 2005 increased by $12.9 million, totaling $24.1 million, compared to $11.2 million in the prior year period, an increase of 115.2%. This increase was generated by the $16.4 million increase in gross profit discussed above, approximately $0.7 million of gain from disposal of certain international assets, approximately $0.7 million of increased foreign currency gains, and $0.4 million of equity in earnings of unconsolidated joint ventures. These increases were partially offset by approximately $5.3 million of increased administrative expenses, including the administrative expenses of TCE.

Well Abandonment & Decommissioning Division – The WA&D Division revenues increased to $144.6 million during the first nine months of 2005, compared to $97.6 million in the prior year period, an increase of $47.1 million or 48.3%. The Division’s well abandonment and decommissioning operations reflected increased revenues of approximately $26.5 million, primarily due to the increased activity of the Division’s decommissioning operation, which acquired an 800 ton heavy lift barge during 2004 and has benefited from recent contract awards and an overall increased activity level for its services compared to the prior year period. In addition, the Division’s inland waters and offshore abandonment operations have also experienced increased equipment utilization due to increased activity levels. The Company anticipates the increased well abandonment and decommissioning activity will continue, particularly following the third quarter hurricane damage that has affected the offshore infrastructure assets of many operators in the Gulf of Mexico. The Division suffered storm interruptions to many of its businesses during the third quarter of 2005, but expects that most of its service operations will soon be fully restored. The Division’s exploitation and production subsidiary, Maritech, reported an increase of approximately $14.8 million in revenues during the first nine months of 2005, due to approximately $9.9 million of higher realized oil and gas sales prices compared to the prior year period, a $4.4 million increase from increased production volumes primarily due to prior year producing property acquisitions and $0.5 million increase from prospect fee revenue recorded during the current year period. During much of the last half of the third quarter of 2005, Maritech’s producing properties were shut-in as a result of hurricanes. The revenue impact from Maritech’s third quarter acquisitions of producing properties was also largely postponed due to the interruptions caused by the storms. As of November 9, 2005, a portion of Maritech’s daily production, including its newly acquired volumes, has been restored; however, much of Maritech’s production is processed through neighboring platforms, pipelines and processing facilities of other operators and third parties. The full resumption of Maritech’s production levels will therefore also depend on the damage assessments and repairs of certain of these third party assets, the timing of which is outside of Maritech’s control.

WA&D Division gross profit increased from $21.8 million during the first nine months of 2004 to $30.0 million during the first nine months of 2005, an increase of $8.1 million or 37.3%. This increase was due to the operating efficiency generated from the increased well abandonment and decommissioning service activity, which resulted in an increase in gross profit of approximately $10.9 million. Maritech’s gross profit, however, decreased by approximately $2.7 million during the first nine months of 2005, compared to the prior year period,

as the impact from increased commodity prices and production volumes was offset by approximately $15.1 million of increased operating expenses and an impairment charge of approximately $1.9 million recorded during the first quarter of 2005. The Division suffered hurricane damage during the third quarter to certain of its service equipment assets, including one of its heavy lift barges. Maritech suffered varying levels of damage to the majority of its offshore production platforms, and three of its platforms were completely destroyed. The Division is currently assessing the extent of these damages and expects to incur significant costs to repair these assets. All of these damaged assets are covered under the Company’s various insurance policies.

WA&D Division income before taxes was $19.1 million during the first nine months of 2005, compared to $11.7 million during the prior year period, an increase of $7.4 million, or 62.8%. This increase was due to the $8.1 million increase in gross profit described above, plus approximately $1.2 million of gains from property sales. These increases were partially offset by approximately $1.3 million of increased administrative expenses, primarily from increased employee and liability related expenses, plus approximately $0.7 million of increased accretion expense as a result of acquisitions of producing properties.

Production Enhancement Division – Production Enhancement Division revenues increased from $44.2 million during the first nine months of 2004 to $78.1 million during the first nine months of 2005, an increase of $33.9 million, or 76.6%. This increase was primarily due to the operations of Compressco, which was acquired during the third quarter of 2004. In addition, the Division’s production testing and process services operations revenues increased by approximately $5.7 million during the first nine months of 2005, due to increased activity from certain of their customers.

Production Enhancement Division gross profit increased from $12.4 million during the first nine months of 2004 to $29.6 million during the first nine months of 2005, a $17.2 million or 137.9% increase. Increased gross profit was due mainly to the acquisition of Compressco, and to a lesser degree was due to increased activity in the production testing business.

Income before taxes for the Production Enhancement Division increased from $6.7 million during the first nine months of 2004 to $19.9 million during the first nine months of 2005, an increase of $13.2 million or 197.9%. This increase was primarily due to the increased gross profit discussed above, less approximately $3.8 million of increased administrative costs, primarily related to administrative costs associated with Compressco.

Corporate Overhead – Corporate overhead includes corporate general and administrative expenses, interest income and expense, and other income and expense. Such expenses and income are not allocated to the Company’s operating divisions, as they relate to the Company’s general corporate activities. Corporate overhead increased $10.5 million during the nine months ended September 30, 2005 to $22.2 million, from $11.7 million during the prior year period, due to increased administrative costs and net interest expense. The Company recorded an increase in net interest expense of approximately $4.2 million related to the outstanding balance of long-term debt during the first nine months of 2005 compared to the prior year period. There were no such borrowings outstanding during the majority of the first nine months of 2004. Administrative costs increased approximately $6.3 million due to approximately $4.2 million of increased salaries and incentive compensation, approximately $0.9 million of increased audit and professional service expenses, approximately $0.2 million of increased depreciation, and approximately $1.0 million of increased office and other general expenses.

Liquidity and Capital Resources

The Company’s readily available capital resources consist primarily of the cash flows from its three operating divisions, and from the additional borrowing capacity under its revolving line of credit. During the nine months ended September 30, 2005, the Company generated approximately $69.7 million of cash flow from operating activities. As of September 30, 2005, the Company had $133.0 million of long-term debt outstanding, including a balance of $44.2 million under its $140 million revolving line of credit facility, which, along with approximately $16.2 million of letters of credit outstanding, leaves a net availability of approximately $79.6 million.

Operating Activities – Net cash provided by operating activities was $69.7 million during the first nine months of 2005, compared to $46.1 million during the prior year period, an increase of $23.6 million. Net cash from operating activities was generated from the increased net income during the first nine months of 2005, which was net of increased non-cash expenses for depreciation and depletion and a Maritech property impairment. Increased receivables resulting from the Company’s increased operating activities during the period and the use of operating cash for increased inventory requirements were more than offset by a corresponding increase in accounts payable and accrued expenses. Future operating activities will include the repair and

restoration of certain assets that suffered hurricane related damage during the third quarter of 2005. The significant majority of such repair expenditures are covered by the Company’s various insurance policies and the Company expects that such covered expenditures will be reimbursed following the processing of insurance claims. As of September 30, 2005, approximately $3.7 million of such costs were classified as receivables awaiting claims processing. The Company has historically generated net operating cash flow from each of its three operating divisions. While the Company expects that the growth of its operations will continue, such growth and the resulting net cash flow will continue to be affected by the level of oil and gas industry activity, the Company’s equipment and personnel capacity constraints, the impact of competition, the prices for its products and services, and the operating and administrative costs required to deliver its products and services.

In addition to the above factors, future operating cash flow will be affected by the commodity prices received for Maritech’s oil and gas production and the timing of expenditures required for the plugging, abandonment and decommissioning of Maritech’s oil and gas properties. Following the third quarter 2005 acquisitions of additional producing properties, Maritech entered into additional oil and gas commodity derivative transactions which extend through 2008 and are designed to hedge a portion of Maritech’s operating cash flows from risks associated with the fluctuating prices of oil and natural gas. Also, as a result of these acquisitions, the third party discounted fair value, including an estimated profit, of Maritech’s decommissioning liability increased significantly to $137.1 million ($174.5 million undiscounted) as of September 30, 2005. The cash outflow necessary to extinguish this liability is expected to occur over several years, shortly after the end of each property’s productive life. This timing is estimated based on the future oil and gas production cash flows as indicated by the Company’s oil and gas reserve estimates and, as such, is imprecise and subject to change due to changing commodity prices, revisions of these reserve estimates, and other factors. The Company’s decommissioning liability is net of amounts allocable to joint interest owners and any contractual amounts to be paid by the previous owners of the properties. In some cases, the previous owners are contractually obligated to pay Maritech a fixed amount for the future well abandonment and decommissioning work on these properties as the work is performed, partially offsetting Maritech’s future obligation expenditures. As of September 30, 2005, Maritech’s total undiscounted decommissioning obligation is approximately $251.3 million, and consists of Maritech’s liability of $174.5 million plus approximately $76.8 million which is contractually required to be reimbursed to Maritech pursuant to such contractual arrangements with the previous owners.

Investing Activities – Cash capital expenditures for the nine months ended September 30, 2005 were $78.6 million. Approximately $46.3 million was invested by the WA&D Division, primarily related to Maritech acquisition and exploitation and development activities. During the third quarter, Maritech paid cash of approximately $41.6 million as a portion of the consideration for one of its acquisition transactions and received approximately $18.3 million in the net closing settlement of another of its acquisition transactions. These amounts, along with approximately $21.4 million of drilling and development expenditures, represented the majority of the WA&D Division investment activities during the nine months ended September 30, 2005. Maritech conducts development and exploitation operations on certain of its oil and gas properties, which are intended to increase the cash flows on such properties prior to their ultimate abandonment. The Production Enhancement Division expended approximately $25.7 million, primarily for Compressco’s continuing fleet expansion and the additions and enhancements to the Company’s production testing equipment fleet. The Fluids Division incurred approximately $5.7 million of capital expenditures, primarily for the expansion of blending facilities related to its domestic completion fluids business. The remaining capital expenditures were used to support general corporate activities. During the first nine months of 2005, the Company generated $5.5 million from the sales of assets, mainly from the sale by the Fluids Division of certain international assets and from the sale by the WA&D Division of certain Maritech properties as well as certain well abandonment and pipeyard assets.

The Company expects to continue its ongoing capital expenditure program in order to grow and expand its existing operations in each of its operating divisions. The Company expects to fund such capital expenditures largely from cash flow from its operations. The vast majority of the Company’s future cash capital expenditure plans is discretionary, however, and may be changed, postponed, or cancelled as conditions change. In addition, the Company’s continuing strategy also includes the pursuit of suitable acquisition transactions and the identification of opportunities to establish operations in additional niche oil and gas service markets. Given the Company’s financial position, such acquisitions could be consummated using debt, equity, or any combination thereof. To the extent the Company consummates a significant transaction, the Company’s liquidity position could be affected.

Financing Activities – To fund its fixed capital, acquisition, and working capital requirements, the Company supplements its existing cash balances and cash flow from operating activities as needed from long-term borrowings, short-term borrowings, equity issuances, and other sources of capital. In September 2004, the

Company entered into a five year $140 million bank credit facility, which the Company may increase to a maximum of $200 million with the agreement of the existing or additional lenders. The facility is unsecured and guaranteed by certain of the Company’s domestic subsidiaries. Borrowings generally bear interest at LIBOR plus 0.75% to 1.75%, depending on a certain financial ratio of the Company. As of September 30, 2005, the weighted average interest rate on the outstanding balance under the credit facility was 4.62%. The Company pays a commitment fee ranging from 0.20% to 0.375% on unused portions of the facility.

The Company’s credit facility agreement contains customary financial ratio covenants and dollar limits on the total amount of capital expenditures, acquisitions, and asset sales. Access to the Company’s revolving credit line is dependent upon its ability to comply with certain financial ratio covenants set forth in the credit agreement. Significant deterioration of these ratios could result in a default under the credit agreement and, if not remedied, could result in termination of the agreement and acceleration of any outstanding balances under the facility. The credit facility agreement also includes cross-default provisions relating to any other indebtedness greater than $5 million. If any such indebtedness is not paid, or is accelerated, and such event is not remedied in a timely manner, a default will occur under the Company’s credit facility. The credit facility agreement also prohibits dividends and the Company’s repurchase of equity interests if the Company is in default, or if such distribution or repurchase would result in an event of default. The Company was in compliance with all covenants and conditions of its credit facility as of September 30, 2005. The Company’s continuing ability to comply with these financial covenants centers largely upon its ability to generate adequate cash flow. Historically, the Company’s financial performance has been more than adequate to meet these covenants, and the Company expects this trend to continue. During the first nine months of 2005, the Company borrowed additional funds of approximately $44.6 million under the credit facility, primarily to fund the August 2005 acquisition of producing properties by Maritech. Also during the first nine months of 2005, the Company repaid approximately $49.6 million of the balance outstanding under the credit facility. The Company intends to continue to utilize surplus cash flows from operations to further reduce its borrowings.

In September 2004, the Company issued, and sold through a private placement, $55 million in aggregate principal amount of Series 2004-A Notes and 28 million Euros (approximately $33.7 million equivalent as of September 30, 2005) in aggregate principal amount of Series 2004-B Notes pursuant to a Note Purchase Agreement (collectively the Senior Notes). The Series 2004-A Notes bear interest at a fixed rate of 5.07% and mature on September 30, 2011. The Series 2004-B Notes bear interest at a fixed rate of 4.79% and also mature on September 30, 2011. Interest on the Senior Notes is due semiannually on March 30 and September 30 of each year. The Senior Notes are unsecured and guaranteed by substantially all of the Company’s wholly owned subsidiaries. The Note Purchase Agreement contains customary covenants and restrictions, requires the Company to maintain certain financial ratios, and contains customary default provisions as well as cross-default provisions relating to any other indebtedness of $20 million or more. The Company was in compliance with all covenants and conditions of its Senior Notes as of September 30, 2005. Upon the occurrence and during the continuation of an event of default under the Note Purchase Agreement, the Senior Notes may become immediately due and payable, either automatically or by declaration of holders of more than 50% in principal amount of the Senior Notes outstanding at the time.

The Company also has filed a universal acquisition shelf registration statement on Form S-4 that permits the Company to issue up to $400 million of common stock, preferred stock, senior and subordinated debt securities and warrants in one or more acquisition transactions that the Company may undertake from time to time. As part of the Company’s strategic plan, the Company evaluates opportunities to acquire businesses and assets and intends to pursue attractive acquisition opportunities, which may involve the payment of cash or issuance of debt or equity securities. Such acquisitions may be funded with existing cash balances, with funds under the Company’s credit facility, or with securities issued under the Company’s acquisition shelf registration on Form S-4.

In addition to the aforementioned revolving credit facility, the Company funds its short-term liquidity requirements from cash generated by operations, short-term vendor financing, and, to a minor extent, from leasing with institutional leasing companies. The Company believes its principal sources of liquidity, cash flow from operations, revolving credit facility, and other traditional financing arrangements are adequate to meet its current and anticipated capital and operating requirements through at least the next twelve months.

Off Balance Sheet Arrangements – As of September 30, 2005, the Company had no “off balance sheet arrangements” that may have a current or future material affect on the Company’s consolidated financial condition or results of operations.

Commitments and Contingencies – The Company and its subsidiaries are named defendants in several lawsuits and respondents in certain governmental proceedings arising in the ordinary course of business. While the outcomes of lawsuits or other proceedings against the Company cannot be predicted with certainty, management does not expect these matters to have a material impact on the financial statements.

The Company has not been named a potentially responsible party by the EPA or any state environmental agency.

Cautionary Statement for Purposes of Forward-Looking Statements

Certain statements contained herein and elsewhere may be deemed to be forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995 and are subject to the “safe harbor” provisions of that act, including without limitation, statements concerning future sales, earnings, costs, expenses, acquisitions or corporate combinations, asset recoveries, working capital, capital expenditures, financial condition, effects of the recent hurricanes, including damages to our equipment and facilities, and the Company’s ability to resume all of its operations, and other results of operations. Such statements involve risks and uncertainties. Actual results could differ materially from the expectations expressed in such forward-looking statements. Some of the risk factors that could affect the Company's actual results and cause actual results to differ materially from any such results that might be projected, forecasted, estimated or budgeted by the Company in such forward-looking statements are set forth in the section titled “Certain Business Risks and Cautionary Statement for Purposes of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995” contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2004, as well as other risks identified from time to time in the Company’s filings with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, and the Securities Act of 1933, as amended.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

Commodity Price Risk

The Company has market risk exposure in the pricing applicable to its oil and gas production. Realized pricing is primarily driven by prevailing worldwide prices for crude oil and spot prices in the U.S. natural gas market. Historically, prices received for oil and gas production have been volatile and unpredictable, and price volatility is expected to continue. The Company’s risk management activities involve the use of derivative financial instruments, such as swap and collar agreements, to hedge the impact of market price risk exposures for a portion of its oil and gas production. During the third quarter of 2005, the Company’s Maritech Resources, Inc. subsidiary consummated the acquisition of additional oil and gas producing properties in three separate acquisition transactions. Given the increased oil and gas production volumes expected as a result of these acquisitions, the Company entered into additional derivative financial instruments designed to hedge the price volatility associated with a portion of the increased production. The Company is exposed to the volatility of oil and gas prices for the portion of its oil and gas production that is not hedged.

FASB Statement No. 133, “Accounting for Derivative Instruments and Hedging Activities,” requires companies to record derivatives on the balance sheet as assets and liabilities, measured at fair value. Gains or losses resulting from changes in the values of those derivatives are accounted for depending on the use of the derivative and whether it qualifies for hedge accounting. As of September 30, 2005 and December 31, 2004, the Company had the following cash flow hedging swap and collar contracts outstanding relating to a portion of Maritech’s oil and gas production:

Commodity Contract	Daily Volume	Contract Price	Contract Term
December 31, 2004
Oil swap	500 barrels/day	$42.26/barrel	January 1, 2005 – December 31, 2005

September 30, 2005
Oil swap	500 barrels/day	$42.26/barrel	January 1, 2005 – December 31, 2005
Oil swap	400 barrels/day	$57.35/barrel	April 1, 2005 – December 31, 2005
Oil swap	400 barrels/day	$54.90/barrel	January 1, 2006 – December 31, 2006
Oil swap	500 barrels/day	$66.50/barrel	January 1, 2006 – December 31, 2006
Oil swap	800 barrels/day	$66.50/barrel	January 1, 2006 – December 31, 2006
Oil swap	800 barrels/day	$66.40/barrel	January 1, 2006 – December 31, 2006
Oil swap	700 barrels/day	$63.75/barrel	January 1, 2007 – December 31, 2007
Oil swap	800 barrels/day	$63.25/barrel	January 1, 2007 – December 31, 2007
Oil swap	500 barrels/day	$65.40/barrel	January 1, 2007 – December 31, 2007
Oil swap	700 barrels/day	$61.75/barrel	January 1, 2008 – December 31, 2008
Oil swap	800 barrels/day	$60.75/barrel	January 1, 2008 – December 31, 2008
Natural gas collar	6,000 Mmbtu/day	$5.985 Mmbtu floor/ $8.735/Mmbtu cap	April 1, 2005 – December 31, 2005
Natural gas swap	20,000 Mmbtu/day	$10.465/Mmbtu	January 1, 2006 – December 31, 2006

Each oil and gas swap contract uses WTI NYMEX or NYMEX Henry Hub as the referenced commodity, as applicable. The market value of the Company’s oil swap contracts at September 30, 2005 was approximately $4.8 million, which is reflected as a liability. A $1 per barrel increase in the future price of oil would result in the market value of the combined oil derivative liability increasing by $2.1 million. The market value of the Company’s natural gas swap and collar contracts at September 30, 2005 was approximately $9.7 million, which is reflected as a liability. A $0.10 per Mmbtu increase in the future price of natural gas would result in the market value of the combined natural gas derivative liability increasing by $0.8 million.

The market value of the Company’s oil swap at December 31, 2004 was $60,000, which was reflected as a liability. A $1 per barrel increase in the future price of oil would have resulted in the market value of the derivative liability increasing by $183,000.

Item 4. Controls and Procedures.

Under the supervision and with the participation of the Company’s management, including its Chief Executive Officer and Chief Financial Officer, the Company conducted an evaluation of its disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of September 30, 2005, the end of the period covered by this quarterly report.

There were no changes in the Company’s internal control over financial reporting that occurred during the fiscal quarter ended September 30, 2005, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II

OTHER INFORMATION

Item 1. Legal Proceedings.

The Company, its subsidiaries and other related companies are named as defendants in numerous lawsuits and as respondents in certain other governmental proceedings arising in the ordinary course of business. While the outcome of lawsuits or other proceedings cannot be predicted with certainty, management does not expect these matters to have a material adverse impact on the Company.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

(a) None.

(b) None.

Period	Total Number of Shares Purchased		Average Price Paid per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)	Maximum Number (or Approximate Dollar Value) of Shares that May Yet be Purchased Under the Plans or Programs (1)
July 1 – July 31, 2005	–		$–	–	$14,327,000

Aug 1 – Aug 31, 2005	–		$–	–	$14,327,000

Sept 1 – Sept 30, 2005	4,609	(2)	$29.86	–	$14,327,000

Total	4,609			–	$14,327,000

(1) In January 2004, the Board of Directors of the Company authorized the repurchase of up to $20 million of its common stock. Purchases will be made from time to time in open market transactions at prevailing market prices. The repurchase program may continue until the authorized limit is reached, at which time the Board of Directors may review the option of increasing the authorized limit.

(2) Shares received by the Company in connection with the exercise of certain employee stock options. These shares were not acquired pursuant to the stock repurchase program.

Item 5. Other Information.

Not applicable.

Item 6. Exhibits.

Exhibits:

	10.1*+		Purchase and Sale Agreement by and between Pioneer Natural Resources USA, Inc. as Seller and Maritech Resources, Inc. as Purchaser, dated July 7, 2005.
	10.2*+		Purchase and Sale Agreement among Devon Energy Production Company, L.P., Devon Louisiana Corporation, and Devon Energy Petroleum Pipeline Company, as Seller and Maritech Resources, Inc., as Buyer and TETRA Technologies, Inc., as Guarantor, dated July 22, 2005, as amended by the 1st Amendment to Purchase and Sale Agreement
	31.1*		Certification Pursuant to Rule 13a -14(a) or 15d -14(a) of the Exchange Act, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31.2*		Certification Pursuant to Rule 13a -14(a) or 15d -14(a) of the Exchange Act, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	32.1**		Certification Furnished Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	32.2**		Certification Furnished Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

* Filed with this report.

** Furnished with this report.

+ Portions of this exhibit have been omitted and separately filed with the Securities and Exchange Commission with a request for confidential treatment.

A statement of computation of per share earnings is included in Note A of the Notes to Consolidated Financial Statements included in this report and is incorporated by reference into Part II of this report.

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.

TETRA Technologies, Inc.

Date: November 9, 2005		By: /s/Geoffrey M. Hertel
		Geoffrey M. Hertel
		President
		Chief Executive Officer


Date: November 9, 2005		By: /s/Joseph M. Abell
		Joseph M. Abell
		Senior Vice President
		Chief Financial Officer


Date: November 9, 2005		By: /s/Ben C. Chambers
		Ben C. Chambers
		Vice President – Accounting
		Principal Accounting Officer

EXHIBIT 10.1

*** Indicates material has been omitted pursuant to a Confidential Treatment Request filed with the Securities and Exchange Commission. A complete copy of this agreement has been filed with the Securities and Exchange Commission.

TBay

PURCHASE AND SALE AGREEMENT

by and between

PIONEER NATURAL RESOURCES USA, INC.

as Seller

and

MARITECH RESOURCES, INC.

as Purchaser

NOTICE: THIS AGREEMENT CONTAINS CERTAIN INDEMNITY PROVISIONS WHICH INDEMNIFY AND RELEASE THE INDEMNIFIED PARTY FROM ITS OWN NEGLIGENCE AND OTHER LEGAL FAULT.

TABLE OF CONTENTS

ARTICLE I. SALE AND PURCHASE
	1.1	Effective Time	1
	1.2	Sale and Purchase	1
	1.3	Excluded Assets	3
	1.4	Defined Terms	3

ARTICLE 2. CONSIDERATION
	2.1	Consideration	7
	2.2	Manner of Payment	8
	2.3	Like Kind Exchange Option	8
	2.4	Deposit	9
	2.5	Allocated Values	9

ARTICLE 3. DEFECTS
	3.1	Access to Records and the Properties	9
	3.2	Special Warranty of Title	10
	3.3	Definition of Acceptable Title	10
	3.4	Definition of Permitted Encumbrances	11
	3.5	Title Defects; Purchase Price Adjustment	12
	3.6	Title Assessment by Purchaser	14
	3.7	Environmental Defects - Environmental and Physical Assessment by Purchaser	15
	3.8	Notice of Defects	16
	3.9	Remedy for Title and Environmental Defects	17
	3.10	Preferential Purchase Rights and Consents to Assign	20
	3.11	Termination by Seller	22
	3.12	Purchaser's Waiver	23

ARTICLE 4. SELLER'S REPRESENTATIONS, WARRANTIES AND DISCLAIMER
	4.1	Existence	23
	4.2	Power	23
	4.3	Authorization	23
	4.4	Brokers	24
	4.5	Foreign Person	24
	4.6	No Reservations	24
	4.7	Permits	24
	4.8	Compliance with Law	24
	4.9	Taxes	24
	4.10	Litigation	24
	4.11	AFE's	24
	4.12	Environmental Actions	25
	4.13	Take-or-Pay	25
	4.14	LIMITATION AND DISCLAIMER OF REPRESENTATIONS AND WARRANTIES	25
	4.15	Additions	26

ARTICLE 5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASER
	5.1	Existence	26
	5.2	Power	27
	5.3	Authorization	27
	5.4	Brokers	27

	5.5	Investment Intent	27
	5.6	Due Diligence	27
	5.7	Sophisticated Buyer	27
	5.8	Economic Risk	28
	5.9	Financing	28
	5.10	Accredited Investor	28
	5.11	Solicitation	28
	5.12	Access to Records	28

ARTICLE 5A. ADDITIONAL COVENANTS
	5A.1	Maintenance of Assets	28
	5A.2	No Encumbrances	28
	5A.3	Operations	29

ARTICLE 6. SELLER'S CONDITIONS OF CLOSING
	6.1	Representations	30
	6.2	Performance	30
	6.3	Officer's Certificate	31
	6.4	Pending Matters	31
	6.5	Letters of Credit	31
	6.6	Patent Guaranty	31

ARTICLE 7. PURCHASER'S CONDITIONS OF CLOSING
	7.1	Representations	31
	7.2	Performance	32
	7.3	Officer's Certificate	32
	7.4	Pending Matters	32

ARTICLE 8. CLOSING
	8.1	Time and Place of Closing	32
	8.2	Closing Obligations	32

ARTICLE 9. POST-CLOSING OBLIGATIONS
	9.1	Receipts and Credits; Suspense Funds	34
	9.2	Costs and Liabilities; Indemnity	34
	9.3	Further Assurances	41
	9.4	Delivery of Records	41
	9.5	Access to Data	41
	9.6	Purchaser's Release of Seller	41
	9.7	Retroactive Effect	42
	9.8	Inducement to Seller	42
	9.9	Related Agreements	42
	9.10	Litigation	42
	9.11	Purchaser's Indemnity of Seller	42

ARTICLE 10. TERMINATION
	10.1	Right of Termination	43
	10.2	Effect of Termination	43

ARTICLE 11. TAXES

	11.1	Apportionment of Ad Valorem and Property Taxes	44
	11.2	Sales Taxes	44
	11.3	Other Taxes	45
	11.4	Cooperation	45
	11.5	Tax Reporting	45

ARTICLE 12. PHYSICAL CONDITION OF THE ASSETS
	12.1	Prior Use of Assets	45
	12.2	Assumption of Assets in Present Condition	46
	12.3	Casualty Loss	46

ARTICLE 13. MISCELLANEOUS
	13.1	Governing Law	47
	13.2	Entire Agreement	47
	13.3	Waiver	47
	13.4	Captions	47
	13.5	Assignability	47
	13.6	Notices	48
	13.7	WAIVER OF CONSUMER RIGHTS/DTPA Waiver	48
	13.8	Expenses	49
	13.9	Severability	49
	13.10	Damages	49
	13.11	No Third Party Beneficiary	49
	13.12	Survival	49
	13.13	Counterparts	49
	13.14	Not to be Construed Against Drafter	50
	13.15	Waiver of Jury Trial	50
	13.16	Publicity	50
	13.17	Accounting	50
	13.18	Operatorship	51
	13.19	Seller's Employees	51
	13.20	Time of Performance	51
	13.21	No Partnership Created	52
	13.22	Express Negligence Rule; Conspicuousness	52
	13.23	Arbitration	52
	13.24	Transfer Fees	53
	13.25	Filing and Recording	53
	13.26	Removal of Signs	54
	13.27	References	54
	13.28	Waiver of Louisiana Rights in Redhibition	54
	13.29	Plugging and Abandonment Commitment	55

Exhibit "A-1"	–	Wells and allocations
Exhibit "A"	–	Lands and Oil and Gas Leases
Exhibit "B"	–	Form of Assignment and Bill of Sale
Exhibit "C"	–	Non-Foreign Affidavit
Exhibit "D"	–	Guaranty
Schedule 3.4(c)	–	Preferential Purchase Right
Schedule 3.4(d)	–	Consents to Assign

Schedule 3.4(e)	–	Liens
Schedule 4.10	–	Litigation Schedule
Schedule 4.11	–	Authorities for Expenditure
Schedule 4.12	–	Environmental Actions
Schedule 4.14	–	Take-or-Pay
Schedule 8.2(b)	–	Form of Letter in Lieu of Transfer Order
Schedule 9.10	–	Purchaser Assumed Litigation

PURCHASE AND SALE AGREEMENT

This PURCHASE AND SALE AGREEMENT, including the exhibits and schedules hereto, ("Agreement") is made this 7th day of July, 2005, by and between PIONEER NATURAL RESOURCES USA, INC., a Delaware corporation, with the address of, 5205 N. O’Connor Blvd., Suite 900, Irving, Texas 75039-3746 ("Seller"), and MARITECH RESOURCES, INC., a Delaware corporation, with the address of 25025 Interstate 45 North, The Woodlands, Texas 77380 ("Purchaser").

RECITALS:

WHEREAS, on the terms and conditions provided in this Agreement, Seller has agreed to sell and Purchaser has agreed to purchase certain of Seller’s interests in certain oil and gas leases, agreements, contracts, real property, personal property, equipment and related rights hereinafter defined.

NOW, THEREFORE, for good and valuable consideration and for the mutual benefits and agreements contained herein, Seller and Purchaser hereby agree as follows:

ARTICLE 1. SALE AND PURCHASE

1.1 Effective Time. The effective time and date of the purchase and sale contemplated hereby shall be 7:00 a.m. on April 1, 2005 at the site of the respective Subject Properties as defined below (the “Effective Time”).

1.2 Sale and Purchase. Subject to the terms and conditions herein contained, at Closing, as defined below, and effective as of the Effective Time, Seller shall sell, assign, transfer and convey to Purchaser, and Purchaser shall purchase, accept and receive, all of Seller’s right, title, and interest, if any, as of the Effective Time, in and to the following described assets, less and except the Excluded Assets (the "Assets"):

(a) The oil and gas leases and interests, described on Exhibit “A” or appurtenant to the wells described on Exhibit “A-1” to the extent and only to the extent the same pertain to the area within the boundaries of the lands covered, as of the Effective Time, by the oil and gas leases listed on Exhibit "A" (hereinafter referred to as the “Lands”), together with Seller’s interest in any pooled, communitized or unitized acreage to the extent and only to the extent any such wells are a part thereof and all of the rights appurtenant thereto (the “Subject Properties”);

(b) To the extent, and only to the extent, located on the Lands or attributable or allocable to the Subject Properties: (1) all wells (including, but not limited to, the wells

described in Exhibit "A-1,” and all other oil, gas, injection, disposal and water wells whether active, idle, plugged or unplugged and whether abandoned or not) (“Wells”), and well equipment (surface and subsurface), all materials, fixtures, platforms, facilities, pumps, equipment, leased equipment (if assignable without penalty, cost or liability), electrical distribution systems, tank batteries, flowlines, gathering pipelines, gas facilities, gathering systems, storage, distribution, treating, processing and disposal facilities and tanks, tools, buildings, compressors, and all other real or tangible personal property and fixtures which are located on the Lands and directly used in connection with the present production, disposal, gathering, storing, measuring, compression, injection, treating, operating, maintaining, marketing or transportation of production and substances from the Subject Properties and Wells or lands pooled or unitized therewith, and all other improvements located on and which were acquired for or are used in connection with the operation of the Subject Properties, (“Equipment”), but specifically excluding portable tools, inventory, and vehicles not used exclusively on or exclusively appurtenant to the Subject Properties or the Wells, and personal property not solely appurtenant to the Wells or temporarily located on the Subject Properties; (2) the net revenue from all oil, gas, mineral and other hydrocarbon substances produced on or after the Effective Time (as adjusted in this Agreement); (3) to the extent the same are assignable or transferable by Seller and subject to the rights of third parties, all contracts insofar as they relate to the Subject Properties, Wells and Equipment, including, without limitation, all orders, unit orders, title opinions and documents, abstracts of title, leases, deeds, unitization agreements, pooling agreements, operating agreements, asset sale agreements, closing agreements, division of interest statements, participation agreements, license agreements, farmin and farmout agreements, oil and gas leases, assignments, compression and/or processing agreements, and oil and gas sales, purchase, transportation, gathering and processing contracts and agreements; (4) all surface leasehold and surface fee estates (but only to the extent overlying and within the boundaries of the Lands or used solely in connection with the Subject Properties), easements, rights-of-way, licenses, authorizations, permits and similar rights and interests, limited by and subject to the rights of third parties and regulatory agencies; (5) to the extent assignable by Seller without liability, penalty or cost, all seismic data (2D and 3D) in the possession of Seller as of the Execution Date and to the extent not subject to third-party restrictions on transfers, as well as engineering and production data and records, geological and geophysical data, including, but not limited to, the Petra data files, accounting files (including electronic TOW data files) marketing files, environmental files and records, regulatory files and records, non-privileged legal records and files, lease files, land files, title and lease records and opinions, operating files, well files, oil and gas sales contract files, gas processing files, logs, test data, production histories, division order files, abstracts, title files and materials (the “Records”), and all rights thereto, limited by and subject to the rights of third parties and applicable Related Agreements; (6) mineral, royalty and overriding royalty interests, together with any other mineral rights, to the extent and only to the extent pertaining to both the Subject Properties and the area underlying and within the boundaries of the Lands; and (7) all other rights, privileges,

benefits and powers conferred upon the owner and holder of interests in the Subject Properties.

It is the intent of the Parties that this Agreement shall, except for the Excluded Assets (as defined in this Agreement), cover any and all of Seller’s right, title and interest in and directly pertaining to the Subject Properties, irrespective of whether those properties and rights are set forth on the exhibits and schedules attached hereto.

1.3 Excluded Assets. Notwithstanding anything in this Agreement to the contrary, the Assets do not include and Purchaser agrees and acknowledges that Seller has reserved and retained from the Assets and hereby reserves and retains unto itself any and all rights, titles and interests in and to (a) fee, leasehold, mineral fee, royalty, overriding royalty, and other interests to the extent pertaining to the any area not within the boundaries of the Leases as of the Effective Time and not expressly included under Section 1.2(a) or (b) above; (b) seismic, geologic and geophysical records, information, and interpretations relating to the Assets not included in Section 1.2(b)(5) above; (c) any and all records which consist of previous, contemporaneous or subsequent offers, discussions, or analyses associated with the purchase, sale or exchange to a third party by Seller of the Assets or any part thereof, proprietary information, personnel information, tax information, information covered by a non-disclosure obligation of a third party and information or documents covered by a legal privilege; (d) originals or copies of Records retained by Seller; (e) all claims, rights and causes of action of Seller against third parties, asserted and unasserted, known and unknown relating to the period prior to the Effective Time relating to the Assets; (f) trucks, communication equipment, computers and related switching equipment and software; (g) all pipelines which are not used solely for production from the Lands; (h) all oil in storage at the Effective Time or produced prior to the Effective Time; and (i) items or interests excluded or removed elsewhere in or pursuant to this Agreement;(j) any refund of taxes, costs or expenses borne by Seller or Seller’s predecessors in title attributable to the period of time prior to the Effective Time; (k) any and all proceeds receivable from the settlement or final adjudication of contract disputes with lessors, co-owners or operators of the Assets or with purchasers, gatherers processors or transporters of hydrocarbons from or attributable to the Assets, including without limitation, settlement of royalty, take-or-pay, pricing or volume adjustments disputes, insofar as said proceeds are attributable to periods of time prior to the Effective Time (collectively, the "Excluded Assets").

1.4 Defined Terms.

“Acceptable Title” has the meaning as set forth in Section 3.3.

“Act” means the Securities Act of 1933.

“Adjusted Purchase Price” has the meaning as set forth in Section 2.1.

“Affiliate” or “Affiliates” means, as to any Person, each other Person that directly or indirectly (through one or more intermediaries or otherwise) controls, is controlled by, or is under common control with, such Person.

“Agents” has the meaning as set forth in Section 3.7.

“Allocated Values” has the meaning as set forth in Section 2.5.

“Arbitrable Dispute” has the meaning as set forth in Section 13.23.

“Assets” has the meaning as set forth in Section 1.2.

“Authorized Contact” means any employee or contract personnel who has been involved with any phase of the operation, maintenance or development of the Assets and accounting or supervision thereof, and who is specifically identified in writing by Seller’s president or any vice president as an individual from whom Purchaser may obtain information and records during the Examination Period, but only with regard to the specific Asset for which the said Authorized Contact is identified or associated.

“Business Day” or “Business Days” means a day or days excluding Saturdays, Sundays and U.S. legal holidays.

“Casualty Loss” has the meaning as set forth in Section 12.3.

“Claimant” has the meaning as set forth in Section 13.23.

“Claims” has the meaning as set forth in Section 9.2(a).

“Closing” means the consummation of the purchase and sale of the Assets by Purchaser and Seller as contemplated in this Agreement.

“Closing Date” has the meaning as set forth in Section 8.1.

“Code” means the United States Internal Revenue Code of 1986, as amended.

“Confidentiality Agreement” has the meaning as set forth in Section 13.2.

“Defect” and “Defects” have the meaning as set forth in Section 3.8.

“Deposit” has the meaning as set forth in Section 2.4.

“Effective Time” has the meaning as set forth in Section 1.1.

“Environmental Defect” means a condition or circumstance which (1) was not known by or disclosed to Purchaser on or before the Execution Date; (2) presently exists on the Assets; and (3) constitutes a violation of applicable Environmental Laws and for which remediation is required to be currently undertaken as of the end of the Examination Period.

“Environmental Laws” means any and all Laws including, but not limited to, those in existence on the Execution Date that relate to: (a) the prevention of pollution or environmental damages, (b) the abatement, remediation or elimination of pollution or environmental damage, (c) the protection of the environment generally, and/or (d) the protection of Persons or property from actual or potential exposure (or the effects of exposure) to pollution or environmental damage, including without limitation, the Clean Air Act, as amended, the Clean Water Act, as amended, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, the Federal Water Pollution Control Act, as amended, the Resource Conservation and Recovery Act of 1976, as amended, the Safe Drinking Water Act, as amended, the Toxic Substance and Control Act, as amended, the Superfund Amendments and Reauthorization Act of 1986, as amended, the Hazardous and the Solid Waste Amendments Acts of 1984, as amended, and the Oil Pollution Act of 1990, as amended, and all other federal, state and local statutes, regulations, and ordinances serving similar or related purposes.

“Equipment” has the meaning as set forth in Section 1.2(b).

“Examination Period” has the meaning as set forth in Section 3.1.

“Excluded Assets” has the meaning as set forth in Section 1.3.

“Execution Date” is the date on which the last of the Parties hereto signs this Agreement.

“Final Accounting” has the meaning as set forth in Section 13.17(b).

“Final Accounting Date” has the meaning as set forth in Section 13.17(b).

“Governmental Entity” or “Governmental Entities” means any court or tribunal, or any public, governmental, or regulatory body, agency, department, commission, board, bureau, conservation commission, or other authority or instrumentality (domestic or foreign), having appropriate jurisdiction over the Assets conveyed hereunder.

“Hazardous Substance(s)” means any substance defined as a Hazardous Substance under Environmental Laws.

“Imbalances” has the meaning as set forth in Section 9.1.

“Knowledge of Seller” (or Purchaser as the case may be) or “to the best of Seller’s knowledge and belief” (or Purchaser as the case may be) (or words of similar import) shall mean only the then existing actual knowledge of any president or vice president (without obligation of further

inquiries) of Seller (or Purchaser as the case may be) and is not intended to imply that such party in fact has actual knowledge of the subject matter to which such terms apply.

“Lands” has the meaning as set forth in Section 1.2(a).

“Laws” means laws, statutes, ordinances, permits, decrees, orders, judgments, rules or regulations (including without limitation Environmental Laws) which are promulgated, issued or enacted by a Governmental Entity (whether federal, state or local) or tribal authority having appropriate jurisdiction.

“NORM” has the meaning as set forth in Section 9.2(b).(ii).

“Notice of Defects” has the meaning as set forth in Section 3.8.

“Notice Period” has the meaning as set forth in Section 9.2(c).

“Occurrence” has the meaning as set forth in Section 3.9(c)(7).

“Party” means either Purchaser or Seller; “Parties” means the Purchaser and Seller.

“Permitted Encumbrances” has the meaning as set forth in Section 3.4.

“Person” means an individual, corporation, partnership, association, joint stock company, trust or trustee thereof, estate or executor thereof, unincorporated organization or joint venture, court or other governmental unit or other agency or subdivision thereof, or any other legally recognizable entity.

"Preliminary Settlement Statement" has the meaning set forth in Sections 8.2(d) and 13.17(a).

"Property" is the real property or properties, surface and subsurface, in which and on which the Assets, or any portion thereof, are located or pertain and includes the land, if any, described or referred to in Exhibit "A."

“Property Taxes” has the meaning as set forth in Section 11.1.

“Purchase Price” has the meaning as set forth in Section 2.1.(a).

“Records” has the meaning as set forth in Section 1.2(b).

“Related Agreements” has the meaning as set forth in Section 9.9.

“Representative” and “Representatives” have the meaning as set forth in Section 9.2(e).

“Respondent” has the meaning as set forth in Section 13.23.

“Subject Properties” has the meaning as set forth in Section 1.2(a).

“Suspense Funds” has the meaning as set forth in Section 9.1.

“Threshold” has the meaning as set forth in Section 3.8.

“Title Defect” has the meaning as set forth in Section 3.5.

“Wells” has the meaning as set forth in Section 1.2(b).

“Withheld Payment” has the meaning as set forth in Section 13.23.

ARTICLE 2. CONSIDERATION

2.1 Consideration.

(a) Price. At Closing and subject to the terms hereof, Purchaser shall pay to Seller Forty Nine Million One Hundred Thousand ($49,100,000.00) (US$) Dollars (the "Purchase Price"), as may be adjusted pursuant hereto (the "Adjusted Purchase Price"). The Purchase Price has been allocated by Purchaser pursuant to Section 2.5 herein.

(b) Adjusted Purchase Price. The net price which the Purchaser shall pay for the Assets (the “Adjusted Purchase Price”) shall be:

(1) The Purchase Price as set forth in Section 2.1(a) above;

(2) Plus the amount of all direct expenditures and costs (capital and expensed) chargeable to the Assets under any applicable operating or unit agreement and incurred and paid by or on behalf of Seller in the ordinary course of owning and operating the Assets and attributable to the period from the Effective Time to the Closing Date, including, but not limited to, those expenditures and costs set forth in Section 13.17(a);

(3) Plus an amount equal to all prepaid expenses that are actually paid by or on behalf of Seller prior to the Closing Date in the ordinary course of owning and operating the Assets as heretofore owned and operated and attributable to the Assets and allocable to any period after the Effective Time;

(4) Plus an amount equal to the value of Seller’s interest in all merchantable oil in the tanks on the Effective Time attributable to the Assets net of all applicable taxes and royalties paid by Seller;

(5) Less the amount of gross proceeds received by or credited to Seller that are attributable to the sale of any hydrocarbon production from the Assets for any period of time after the Effective Time net of all applicable taxes and royalties paid by Seller;

(6) Less the amount of all expenditures and costs relating to the Assets, such as unpaid ad valorem, property, production, severance, and similar taxes and assessments (but not including income, franchise, or similar taxes) based upon or measured by the ownership of the Assets, or the production of hydrocarbons or the receipt of proceeds therefrom, which are payable or which accrued to the Assets prior to the Effective Time and that are unpaid as of the Closing Date;

(7) Less the allocated value for any of the Subject Properties deleted from this transaction pursuant to this Agreement;

(8) Plus or less, as applicable, any amounts determined to be subject to a Purchase Price Adjustment provided for in Sections 2.4 (Deposit), 3.5 (Title Defects), 3.7 (Environmental Defects), 3.10 (Preferential Purchase Rights), and 12.3 (Casualty Loss) herein; and

(9) As adjusted up or down pursuant to Section 13.17(a).

2.2 Manner of Payment. At Closing, Purchaser shall pay Seller or Seller’s designee the Adjusted Purchase Price by wire transfer of immediately available funds pursuant to Seller’s written instructions.

2.3 Like Kind Exchange Option. [INTENTIONALLY DELETED]

2.4. Deposit. Prior to the execution hereof or upon or after the execution hereof Purchaser has paid or shall pay to Seller Four Million Nine Hundred Thousand ($4,900,000.00) (US$) Dollars (the "Deposit"). Except as provided in this Agreement, the Deposit will not bear interest and is not refundable. The Deposit is composed of two parts. The first part of the Deposit (the “Initial Deposit”) is Five Hundred Thousand ($500,000.00) (US) Dollars and shall be paid to Seller on the Execution Date. The second part of the Deposit (the “Remaining Deposit”) is the remainder of the sum comprising the Deposit and shall be received by Seller or to the credit of Seller on or before 5:00 p.m. CDT on July 29, 2005 (the “Remaining Deposit Due Date”) at a bank which may be designated in writing by Seller. If the Remaining Deposit is not paid on or before the Remaining Deposit Due Date, this Agreement shall terminate, the Initial Deposit shall not be refunded and shall be the property of Seller, with no recourse thereto by Purchaser, and Seller shall be free to use said Initial Deposit for its own account and the retention of the Initial Deposit by Seller shall be deemed liquidated damages and neither Party hereto shall have any further obligation or liability to the other arising from the non-payment of said Remaining Deposit and

the termination of this Agreement. If Closing occurs, the Deposit shall be applied to reduce the Adjusted Purchase Price. Except as provided in this Section 2.4, if Closing does not occur, the Deposit shall be applied as provided in Section 10.2.

2.5 Allocated Values. The allocation of values (“Allocated Values”) associated with the Assets to be conveyed under this Agreement have been prepared by Purchaser and are set forth on Exhibit “A-1.”

ARTICLE 3. DEFECTS

3.1 Access to Records and the Properties. For the period beginning on the Execution Date and ending on August 9, 2005 (“Examination Period”), Seller shall, beginning on the first Business Day after the Execution Date, give Purchaser and its authorized representatives, during regular business hours, at Purchaser’s sole risk, cost and expense, access to all written geological, geophysical, production, engineering and other technical data and records, including without limitation 2D and/or 3D seismic data, other seismic data, logs, maps, and other technical data, and to all contract, land, environmental, regulatory, title, lease, accounting and marketing records, to the extent such data and records are in Seller’s possession and relate to the Assets, and to such other information relating to the Assets as Purchaser may reasonably request; provided, however, Seller shall have no obligation to provide Purchaser access to any data or information which is an Excluded Asset or that relates to an Excluded Asset, or to which access Seller cannot legally provide Purchaser without penalty, cost or liability or because of third-party restrictions on Seller. Seller agrees to use its reasonable efforts (at no cost to Seller) to assist Purchaser in obtaining the consent of any such third party to furnish such information to Purchaser. Except where restricted by agreement, Purchaser shall be allowed to make copies of such data at its own expense. Purchaser shall obtain confidentiality agreements (in a form acceptable to Seller) with any third parties it employs to conduct the review of such data. Subject to the Confidentiality Agreement, Purchaser shall keep all materials and data obtained, and all reports resulting therefrom, confidential and shall return any and all materials and data as to any properties not purchased at Closing and shall destroy materials containing confidential information or summaries, or excerpts thereof if Closing does not occur. Seller makes no warranty of any kind as to the title information and other information supplied, and Purchaser agrees that any conclusions drawn from any information provided shall be the result of Purchaser’s own judgment and independent examination. Further, Seller shall, subject to the forty-eight (48) hour prior written notification period provided in Section 3.7.(b) below, afford Purchaser and its authorized representatives reasonable access during the Examination Period to the Assets it operates and to Authorized Contacts, at the locations where such Persons work. Although Seller shall endeavor to cooperate, at Purchaser’s cost, Seller shall have no obligation hereunder to provide any information to Purchaser that is available to the general public, whether in public records or from a Governmental Entity or Agency upon request. Further, Seller’s obligation under Sections 3.1 and 3.6 shall be limited to Seller’s present capability to allow Purchaser’s access in Seller’s offices, without disruption or undue inconvenience to Seller’s ongoing business, and Seller shall not be required to create, assemble (in a form different than such Records currently exist) or develop Records for Purchaser’s access.

3.2 Special Warranty of Title. Under the Assignment and Bill of Sale to be provided at Closing, Seller will warrant and shall defend title to the Subject Properties against any and all persons whomsoever claiming the same or any part thereof by through or under Seller, but not otherwise. Said warranty will survive the Closing until the fourth anniversary of the Closing Date, from and after which time such warranty will terminate and cease to be of further force and effect. Furthermore, the standard for this warranty is Acceptable Title as defined below.

3.3 Definition of Acceptable Title. As used herein, the term "Acceptable Title" shall mean, as to the Subject Properties, such right, title and interest that as to the existing production from the currently producing intervals in the Wells, (a) entitles Seller to receive not less than the net revenue interest set forth in Exhibit "A-1" of all oil, gas and associated liquid and gaseous hydrocarbons produced, saved and marketed from the currently producing intervals of the respective Subject Properties; (b) obligates Seller to bear costs and expenses relating to the maintenance, development and operation of the Wells relative to the respective Subject Properties in a percentage not greater than the working interest set forth in Exhibit “A-1” for each, unless there is a corresponding increase in the applicable net revenue interest; and (c) except for Permitted Encumbrances, is free and clear of all liens, claims and encumbrances; provided, however that the presence of a preferential right to purchase provision shall not be considered to be a Title Defect as defined in Section 3.5 below. Purchaser acknowledges and agrees that any net revenue interests and working interests reflected on Exhibit "A-1" are for the convenience of Seller and Purchaser and included solely for the purpose of determining Acceptable Title prior to Closing; Seller does not and shall not represent or warrant that the interest conveyed in the Subject Properties is equal to any such interests in any respect, but agrees that (i) for purposes of determining Defects prior to Closing, with respect to those Subject Properties listed on Exhibit "A-1" with "0.0000" "APO" interests, the "APO" interests shall be deemed to be the same as the corresponding "BPO" interests, and (ii) Purchaser may assert as a Title Defect (as defined in and subject to this Article 3) any matter reasonably expected to reduce the net revenue interest assigned to such Subject Property or well or any matter reasonably expected to increase the working interest assigned to such Subject Property and Well unless there is a corresponding increase in the applicable net revenue interest.

3.4 Definition of Permitted Encumbrances. As used herein, the term "Permitted Encumbrances" shall mean the following items, provided none of the following items shall operate, as of Closing, to increase the working interest of Seller as set forth in Exhibit “A-1” for any of the Subject Properties, without a corresponding increase in the applicable net revenue interest, or decrease the net revenue interest of Seller set forth in Exhibit “A-1” for any of the Subject Properties:

(a) lessors' royalties, overriding royalties, production payments, reversionary interests and similar burdens;

(b) division orders and sales contracts;

(c) preferential rights to purchase on any of the Subject Properties as identified in writing by Seller and described on Schedule 3.4(c);

(d) rights to consent to assignments affecting any of the Subject Properties, as identified and described on Schedule 3.4(d), held by Persons other than Governmental Entities;

(e) materialman's, mechanic's, repairman's, employee's, contractor's, operator's, tax, and other similar liens, assessments or charges arising in the ordinary course of business for obligations that are not yet due or delinquent, or if delinquent, that are being contested by Seller in good faith in the normal course of business and which, if contested by Seller, are specifically identified on Schedule 3.4(e);

(f) rights to consent by, required notices to, filings with, or other actions by Governmental Entities in connection with the sale or conveyance of oil and gas leasehold and fee estates or interests therein if the same are customarily obtained contemporaneously with or subsequent to such sale or conveyance;

(g) easements, rights-of-way, servitudes, permits, surface leases and other rights in respect of surface operations affecting the Assets and in existence on or before the Effective Time;

(h) rights reserved to or vested in any governmental, statutory or public authority to control or regulate any of the Assets in any manner, and all applicable laws, rules and orders of any governmental authority affecting the Assets;

(i) operating agreements, unit agreements, unit operating agreements, pooling agreements and pooling designations affecting the Subject Properties which are in the records of the Governmental Entities having jurisdiction over the Subject Properties or recorded in the public records of the parish in which the Assets are located or contained in the Records and information made available to Purchaser pursuant to Section 3.1, and all actions taken or operations occurring in the normal course of business pursuant to such instruments;

(j) Title Defects that Purchaser may have expressly waived in writing or which are deemed to have been waived pursuant to Article 3;

(k) all conveyances, reservations and exceptions which are present in the records of the Governmental Entities having jurisdiction over the Subject Properties or are recorded in the public records of the parish in which the affected Assets are located or contained in the Records and/or information made available to Purchaser pursuant to Section 3.1 affecting the Assets and which do not materially and adversely affect the Properties or their use for oil and gas development purposes or impair Purchaser’s surface operations associated with the Assets;

(l) that letter of credit (and any extensions or amendments thereof) up to the aggregate sum of $7,000,000.00 required or issued pursuant to or in conformance with the terms of the ASA and Closing Agreement, as defined in Section 9.2 (f)(ii) below, for the benefit of Chevron U.S.A. Inc., or Chevron Corporation or any of their respective subsidiaries to secure abandonment of Wells or other Assets, all or in part (the “Chevron Letter of Credit”); or

(m) all other liens, charges, encumbrances, contracts, agreements, instruments, obligations, defects and irregularities which are not such as to interfere materially with the operation or use of the Subject Properties (taken as a whole) or materially reduce the value thereof.

3.5 Title Defects; Purchase Price Adjustment; Materially Adverse Agreements.

(a) As used in this Agreement, the term “Title Defect” shall mean any matter, other than a Permitted Encumbrance or a matter which was known to Purchaser on or before the Execution Date, which causes any of the Subject Properties not to have Acceptable Title for one or more of the following reasons:

(1) Seller’s title is subject to 1) an outstanding mortgage, deed of trust, lien, or encumbrance which is due, overdue or delinquent and/or 2) there is a current unpaid mortgage, lien or deed of trust which was created by Seller on or after the date Seller acquired the interest in the affected Subject Properties and which burdens the Subject Properties and in either 1) or 2) in this sentence, the amount is liquidated in amount or can be estimated with reasonable certainty;

(2) Seller owns more or less than the net revenue interest shown on Exhibit “A-1” or is obligated to bear a share of the costs of operation less than or greater than the working interest shown on Exhibit “A-1” without a corresponding increase in net revenue interest;

(3) The Assets have been or are subject to being reduced by the exercise of contractual rights, including without limitation, reversionary or back-in rights, pay-out of non-consent penalties, rights under farmout or similar agreements, lessor’s approvals, or other rights not already reflected in the lowest percentage NRI (APO) for the affected Asset as set forth on Exhibit “A-1”; or

(4) Seller is in default under a material provision of a lease, farmout agreement, operating agreement or other contract or agreement affecting the Subject Properties and such default has originally occurred between January 1, 1990 and the Execution Date and is reasonably expected to interfere materially with the operation of such Subject Properties or materially reduce the value thereof.

(b) In the event Purchaser, prior to the end of the Examination Period, discovers the existence of valid contracts or agreements binding on Seller which are such as to interfere materially with the operation or use of the Subject Properties (taken as a whole) in the manner the same have been operated by Seller or materially reduce the value thereof, and the same do not or in the passage of time will not cause the net revenue or working interest set forth on Exhibit A-1 to be affected, Purchaser may assert such matters as “Materially Adverse Agreements” and submit the same as if they were a Defect under Section 3.8 and subject to the terms, including but not limited to, the Threshold therein. Materially Adverse Agreements do not include any matter which could be raised as a Title Defect or:

(1) lessors' royalties, overriding royalties, production payments, reversionary interests and similar burdens;

(2) division orders or any sales contracts cancelable with less than 45 days notice;

(3) preferential rights to purchase on any of the Subject Properties as identified in writing by Seller and described on Schedule 3.4(c);

(4) rights to consent to assignments affecting any of the Subject Properties, as identified and described on Schedule 3.4(d), held by Persons other than Governmental Entities;

(5) materialman's, mechanic's, repairman's, employee's, contractor's, operator's, tax, and other similar liens, assessments or charges arising in the ordinary course of business for obligations that are not yet due or delinquent, or if delinquent, that are being contested by Seller in good faith in the normal course of business and which, if contested by Seller, are specifically identified on Schedule 3.4(e);

(6) rights to consent by, required notices to, filings with, or other actions by Governmental Entities in connection with the sale or conveyance of oil and gas leasehold and fee estates or interests therein if the same are customarily obtained contemporaneously with or subsequent to such sale or conveyance;

(7) easements, rights-of-way, servitudes, permits, surface leases and other rights in respect of surface operations affecting the Assets and in existence on or before the Effective Time;

(8) rights reserved to or vested in any governmental, statutory or public authority to control or regulate any of the Assets in any manner, and all applicable laws, rules and orders of any governmental authority affecting the Assets;

(9) operating agreements, unit agreements, unit operating agreements, pooling agreements and pooling designations affecting the Subject Properties which are in the records of the Governmental Entities having jurisdiction over the Subject Properties or recorded in the public records of the parish and all actions taken or operations occurring in the normal course of business pursuant to such instruments;

(10) Title Defects that Purchaser may have expressly waived in writing or which are deemed to have been waived pursuant to Article 3;

(11) the Chevron Letter of Credit; or

(12) all other liens, charges, encumbrances, contracts, agreements, instruments, obligations, defects and irregularities which are not such as to interfere materially with the operation or use of the Subject Properties (taken as a whole) or materially reduce the value thereof.

3.6 Title Assessment by Purchaser. Beginning on the first Business Day after the Execution Date and for the remainder of the Examination Period as defined in Section 3.1 above, Seller shall provide access to Purchaser to copies of title and contract information in Seller’s possession or control regarding the Assets. During the Examination Period, Purchaser may review such information at Seller’s office located at 303 W. Wall, Midland, Texas, or 5205 N. O’Connor Blvd., Irving, Texas, or other office of Seller designated by Seller in which such information may be located, during normal business hours. Seller will not be required to perform any additional title work, and if there are any existing abstracts and title opinions, Seller will not be required to make them current. Purchaser specifically agrees that any conclusions made from any examination done or caused to be done shall result from its own independent review and judgment only.

3.7 Environmental Defects - Environmental and Physical Assessment by Purchaser.

(a) Subject to the terms hereof and the Confidentiality Agreement, Purchaser shall have the right at its sole risk and expense to make an environmental and other physical assessment of the Lands and Assets during the Examination Period, as defined in Section 3.1 above. If Purchaser desires to undertake an environmental assessment, the identity of the consultant(s) conducting the assessment shall be disclosed to Seller by Purchaser, and if Seller makes a reasonable objection to such consultant, such consultant will not be used by Purchaser.

(b) During Seller's normal business hours and subject to the terms of this Agreement and Related Agreements, Purchaser and its employees, contractors and consultants (“Agents”), at their sole cost and expense, shall have the right to enter upon the Assets operated by Seller and all buildings and improvements thereon (and Seller shall use commercially reasonable efforts to obtain permission from third parties for Purchaser to gain access to Assets operated by others but such access and the terms of such access cannot be guaranteed), inspect the same, conduct soil

and water tests and non-destructive borings, and generally conduct such tests, examinations, investigations and studies as may be reasonably necessary or appropriate for the preparation of appropriate environmental and other reports relating to the Assets, their condition, and the presence of wastes or contaminants. Purchaser shall provide Seller with forty-eight (48) hours prior written notice of the identity of the consultant, projected scope of the assessment and testing protocol to be employed in the assessment, regardless of who operates the same, and Seller shall have the right to (i) witness all such tests and investigations, (ii) receive an equal distribution of all samples taken by Purchaser or its Agents, and (iii) prohibit such tests and investigations which it reasonably believes could damage its properties or business interests. In the event Purchaser reasonably determines to expand the scope of its assessment, including testing protocols, beyond those initially identified by Purchaser, then Purchaser shall give Seller forty-eight (48) hours prior written notice. Seller shall then have the right to prohibit such expanded assessment which it reasonably believes could damage its properties or business interests.

(c)In the event Seller exercises its right to prohibit such expanded assessment, then Purchaser shall have the option to claim the full allocated value of such property affected as an Environmental Defect, subject to the threshold amounts in Section 3.8 below.

(d)Entry onto the Assets by Purchaser or its Agents will be subject to third-party restrictions, if any, and to Seller’s safety, industrial hygiene, and drug and alcohol policies and guidelines and Purchaser will be responsible for assuring compliance with same by itself and its Agents.

(e)Purchaser and its Agents shall keep any data or information acquired by all such examinations and the results of all analyses of such data and information strictly confidential and not disclose any of the same to any Person unless otherwise required by law or regulation and then only after written notice to Seller of the need for disclosure and the identity of all intended recipients.

(f) Seller hereby grants Purchaser access to the Assets to conduct its environmental and other physical assessment upon the condition that PURCHASER HEREBY RELEASES, INDEMNIFIES, DEFENDS AND HOLDS SELLER AND ITS AFFILIATES AND THEIR RESPECTIVE REPRESENTATIVES, INCLUDING WITHOUT LIMITATION, ANY PERSON THAT HAS SERVED AS A DIRECTOR, OFFICER OR EMPLOYEE THEREOF, HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS OF WHATEVER NATURE FOR OR RELATED TO PERSONAL INJURY, DEATH OR PROPERTY DAMAGE ARISING OUT OF OR AS A RESULT OF THE ACTIVITIES BY OR ON BEHALF OF PURCHASER OR ITS AGENTS ON OR RELATED TO THE ASSETS IN CONDUCTING SUCH ENVIRONMENTAL AND PHYSICAL ASSESSMENTS OR THE EXERCISE OF ITS RIGHTS UNDER THIS SECTION 3.7.

3.8 Notice of Defects. If any matter is discovered by Purchaser that, in Purchaser's reasonable, good faith opinion, would (a) constitute a Title Defect; (b) constitute an Environmental Defect; but as to (a) above, only to the extent that each such matter exceeds a value of $20,000.00 and for, and only for, (b) above individual defects must exceed a minimum

of $75,000.00 individually, a "Defect," and collectively the "Defects”, then if, and only if, the total value of all Defects as to Sections 3.5 and 3.7 exceed five per cent (5%) of the Purchase Price (the “Threshold”), Purchaser may provide written notice (a "Notice of Defects") thereof actually delivered to Seller not later than noon, on the first Business Day after the end of the Examination Period. A Notice of Defects shall specifically identify the Defect and include (i) the Purchaser's purported value of each specific Defect which value, collectively for all Defects for that Subject Property or Asset, cannot exceed as to the total of all Environmental Defects or, separately, the total of all Title Defects, the Allocated Value of the affected Subject Property or Asset as set out on Exhibit "A-1" and the final adjustment for the total Defects claims as to any Subject Property cannot exceed the Allocated Value for that Subject Property, (ii) an identification of each affected Asset, (iii) Purchaser's basis for determining the existence and value of such Defect, together with copies of all associated reports, title opinions, data, curative information, evidence, valuations, assessments, conclusions and supporting calculations, and (iv) Purchaser's statement of steps reasonably necessary to cure or minimize each such Defect to its satisfaction, all of which shall be kept strictly confidential by Purchaser and its Agents, except to the extent required by law, regulation or order of any court or other governmental authority or as may be necessary to address Defects identified in a Notice of Defects. If there exists one or more Title Defects or Environmental Defects, such Defects must be raised in the Notice of Defects or be forever waived by Purchaser.

IN ADDITION TO PURCHASER’S OTHER OBLIGATIONS AND RESPONSIBILITIES UNDER THIS AGREEMENT, PURCHASER, FOR THE PURPOSES OF THIS AGREEMENT, UPON AND AFTER CLOSING, SHALL BE SOLELY RESPONSIBLE FOR EACH AND EVERY DEFECT BELOW THE LEVEL OF THE THRESHOLD.

3.9 Remedy for Title and Environmental Defects. In Seller's sole discretion, but without obligation, it may, at its sole cost, take such steps it deems appropriate or as are identified by Purchaser’s Notice of Defects pursuant to Section 3.8 above as are reasonably necessary to cure or minimize Defects identified in the Notice of Defects. In the event Seller is unable or elects not to cure or minimize any or all such Defects claiming a reduction in the Purchase Price, or if any examination by Purchaser or Seller results in a finding that the interest of Seller is greater than stated in Exhibit "A-1" and such increase (which such increase must, if found by Purchaser, be identified by Purchaser in the Notice of Defects to Seller) serves to increase the value of the Subject Properties or component of the Assets, Seller and Purchaser may, at Seller's option, meet and discuss the validity of each such Defect claim and the need for and the amount of any mutually acceptable Purchase Price adjustment.

(a) Title Defects. Title Defect adjustments shall be made with reference (as a maximum) to the Allocated Value for each affected Asset as set forth in Exhibit "A-1" and based on the criteria set forth in Section 3.5. At any time after the Notice of Defects, if Purchaser has not agreed to waive such Defect, and if the Parties cannot otherwise agree on the amount of an adjustment or other remedy, Seller may, in addition to any of its rights to terminate this Agreement, at its sole option and upon written notice to Purchaser sent no later than the third Business Day before the Closing Date, either:

(1) elect to delay, without penalty or liability, the Closing for thirty (30) days in order to cure the Defect at its own expense, with such delay having no effect on, and being in addition to and under the same terms as, Seller’s right to delay pursuant to Section 8.1;

(2) remove the affected Asset from this Agreement and adjust the Purchase Price by the Allocated Value for the Asset; or

(3) elect to resolve the dispute under the procedures set forth in Section 13.23 of this Agreement.

(b) Environmental Defects. Environmental Defects will be based on the criteria set forth in Section 3.7. At any time after the Notice of Defects, if Purchaser has not agreed to waive such Defect and the Parties cannot otherwise agree on the amount of an adjustment or other remedy, Seller may, in addition to any of its rights to terminate this Agreement, at its sole option, and upon written notice to Purchaser sent no later than the third Business Day before the Closing Date, either:

(1) elect to delay, without penalty or liability, the Closing for thirty (30) days in order to cure or remediate or decide whether to elect to cure and remediate, the Defect at its own expense (under the terms and procedures set forth below), with such delay having no effect on, and being in addition to and under the same terms as, Seller’s right to delay pursuant to Section 8.1;

(2) adjust the Purchase Price allocation for an Asset by a mutually acceptable amount reflecting Seller’s net proportionate share, based on its working interest, of the cost reasonably estimated to remediate the Environmental Defect (in the manner described below) affecting the Assets, but only to the level required by the Environmental Laws in effect at the end of the Examination Period and not to exceed the full allocated value for the affected Asset(s). Seller may require Purchaser to remit the full allocation at Closing, without adjustment for the Environmental Defect, but if it does so, it will pay the amount of the adjustment to Purchaser when the remediation performed by Purchaser is complete under applicable law. If the cost to remediate exceeds the amount of the adjustment, Purchaser will pay the additional costs to remediate the Environmental Defect as required by applicable law;

(3) remove the affected Asset from this Agreement and adjust the Purchase Price by the Allocated Value for the affected Asset; or

(4) elect to resolve the dispute under Section 13.23 of this Agreement.

(c) Procedures if Seller Remediates. If, prior to Closing, Seller elects or agrees with Purchaser to remediate an Environmental Defect or is required by a Governmental

Entity to remediate an Environmental Defect, the following will govern the remediation:

(1) Seller will be responsible for all negotiations and contacts with federal, state, and local agencies and authorities with regard to the Environmental Defect or remediation. Purchaser may not make any independent contacts with any agency, authority, or other third party with respect to the Environmental Defect or remediation and will keep all information regarding the Environmental Defect confidential, except in each instance to the extent required by applicable law. Seller will provide to Purchaser a final report of Seller’s remediation activities. Seller will notify purchaser forty-eight (48) hours in advance of its remediation activities on site of the Assets, and Purchaser and/or its Agents will have the right to be present during such remediation activities, at Purchaser’s sole risk, expense and option.

(2) Seller will remediate the Environmental Defect to the level agreed upon by Seller and Purchaser or as required by any Governmental Entity, but in no event will Seller be required to remediate the Environmental Defect beyond the level required by the Environmental Laws in effect on the Execution Date or as required by any Governmental Entity.

(3) If such remediation activities occur after Closing, during Purchaser’s normal business hours, Purchaser will grant reasonable access to the Assets and entry on the Lands, Subject Properties and Property (and Purchaser shall use reasonable efforts to obtain permission for Seller to gain access to Assets operated by others but such access and the terms of such access cannot be guaranteed) after Closing to Seller, its Representatives, and third parties conducting assessments or remediation, to the extent and as long as necessary to conduct and complete the assessment or remediation work, to remove any equipment and facilities used in connection with Seller’s assessment or remediation, and to perform any other activities reasonably necessary in connection with assessment or remediation.

(4) If such remediation activities occur after Closing, Purchaser will use commercially reasonable efforts not to interfere with Seller’s ingress or egress or assessment or remediation activities. Seller will use commercially reasonable efforts to perform the work so as to minimize disruption to Purchaser’s business activities and to the Assets, the Lands and the Property.

(5) Seller will continue remediation of the Environmental Defect until the first of the following occurs:

(a) The appropriate governmental authorities provide written notice that no further remediation of the Environmental Defect is required (the Party receiving notice shall immediately provide such notice to the other Party); or

(b) Seller reasonably determines that the Environmental Defect has been remediated to the level required by the Environmental Laws or as agreed in writing by the Parties.

Upon the occurrence of either (a) or (b) above, Seller will notify Purchaser that remediation of the Environmental Defect is complete and provide a copy of the notification described in (a) above, if applicable. Upon delivery of Seller’s notice, Seller will be released, without further action or documentation, from all liability and have no further obligations under any provisions of this Agreement in connection with said Environmental Defect.

(6) Until Seller completes remediation of an Environmental Defect, Seller and Purchaser will each promptly notify the other of any pending or threatened Claim, action, or proceeding by any authority or private party that relates to or would affect the environmental condition, the assessment, or the remediation of the affected Assets or Property.

(7) After Closing and before Seller has completed remediation of an Environmental Defect, if a leak, spill, or discharge of any material or substance (“Occurrence”) occurs on the Property or Assets, or any part of them, Purchaser will promptly notify Seller and act promptly to minimize the effects of the Occurrence. If a spill, leak or discharge occurs and Seller determines that it may affect that area where Seller is conducting remediation or assessment, Purchaser will hire a consultant (who must be acceptable to Seller) to assess the effect of the Occurrence on the environmental condition of the Property or Assets, Seller’s remediation work and the cost of the additional work required as the result of the Occurrence. Unless the Occurrence was caused solely or substantially by Seller, Purchaser will be responsible for the incremental cost of remediating the impact of the Occurrence. If Seller’s remediation is expanded to incorporate remediation of the Occurrence, Purchaser will promptly pay its share of costs and expenses to Seller as the work is performed, within thirty days of receipt of invoices for the work (with supporting documentation). Payments not made timely will bear interest at a rate of twelve percent per annum or the maximum lawful rate, whichever is less, compounded daily from the date of Purchaser’s receipt of the invoice until paid.

If the cost of the additional work equals or exceeds the cost which would have been incurred but for the Occurrence, Seller will pay Purchaser the cost that would have been incurred by Seller to complete the remediation but for the Occurrence, unless the Occurrence was caused solely or substantially by Seller. As consideration for this payment, Purchaser will accept the environmental condition of the Property and Assets as they exist on the date of the payment, assume full responsibility for remediating the Property and Assets and related off-site contamination in accordance with this Agreement, and agree to release,

indemnify, hold harmless, and defend Seller and its Representatives as to Claims arising from the Occurrence to the same extent as described in Article 9.

(8) If Seller undertakes remediation as to any Assets in which Seller’s ownership was less than 100%, Purchaser will bill the other working interest owners for their share of the remediation expenses. Regardless of whether Purchaser recoups any amount from the other working interest owners, Purchaser will refund to Seller, within sixty days of each Seller invoice, with documentation, any amounts expended by Seller over the amount formerly attributable to Seller’s working interest share.

(9) If Seller will assess or remediate the Assets or Property after Closing, the Assignment and Bill of Sale or other recordable instrument will restate the rights and obligations of this section.

3.10. Preferential Purchase Rights and Consents to Assign. (a) Seller has used reasonable efforts in preparing Schedules 3.4(c) and 3.4(d), which identify Persons (and their addresses) who may hold preferential rights to purchase affecting the Subject Properties or rights to consent with respect to any assignments required hereby in order the convey the Assets, other than such consents of governmental authorities, which are usually obtained in the normal course of business after Closing. Purchaser recognizes that there may be other Persons who may hold preferential rights to purchase all or part of the Subject Properties or rights to consent. (b) On or before the third Business Day after the Execution Date, Purchaser shall give Seller written notice, the mutually agreed form of notice to be used, and instructions for Seller to send notice to those Persons who may hold preferential rights to purchase or rights to consent to assign as set forth in Schedules 3.4(d) and 3.4(e) or otherwise identified by Purchaser. Within four (4) Business Days after Seller’s receipt of Purchaser’s written notification and instruction by Purchaser, or upon Seller’s own initiative, with or without Purchaser’s approval, but without obligation to initiate, Seller shall send notice of this Agreement to all such Persons (i) offering to sell to each such Person the Subject Properties for which a preferential right is held on and subject to the terms hereof and for the same allocated value for such Subject Properties reflected on Exhibit "A-1", or (ii) requesting, where appropriate, consent to any assignment required in connection herewith in order to convey the Assets. Notwithstanding anything to the contrary in this Agreement and recognizing that Seller wants to sell the entirety of the Subject Properties in accordance herewith, Seller will have no obligation to complete the sale of a Subject Property or Subject Properties to a holder of a preferential purchase right if Closing does not occur. If additional preferential rights to purchase or consents to assign, exclusive of those set forth in Section 3.4 above, are discovered by Purchaser or Seller during the Examination Period, Seller will use reasonable commercial efforts to send notices as soon as reasonably possible in accordance with this Section 3.10. Although Purchaser is ultimately responsible for the sending of such notices; until Closing Seller shall be responsible for sending such notices and collecting responses from each and every applicable Person, including but not limited

to, lessors, joint interest owners, farmors, sublessors, assignors, grantors, co-parties to Agreements, Governmental Entities having jurisdiction, or third parties, relating to approvals and consents and will provide Purchaser on or before the Closing Date, except as otherwise provided in this Agreement, with copies of each consent, approval or waiver Seller has received. Seller and Purchaser shall meet and agree on the form of all such notices; provided that such approval shall not be unreasonably withheld or delayed. (c) If, prior to Closing, any of such Persons asserting a preferential purchase right notifies Seller that it intends to consummate the purchase of the Subject Properties to which it holds a preferential purchase right pursuant to the terms and conditions hereof, or if the period allowed for acceptance of the notice provided by Seller has not expired or will not expire as of Closing (subject to Seller’s right to extend the date of Closing), then such Subject Properties shall be excluded at Closing from the Assets to be conveyed to Purchaser under this Agreement and the Purchase Price shall be reduced by the allocated value of such Subject Properties reflected in Exhibit "A-1"; provided, however, that if the holder of such preferential right fails to consummate the purchase of such Subject Properties before or within ninety (90) days after the Closing Date (unless the notice or acceptance period for the right of preferential purchase allows for a longer period of time), then Seller shall promptly so notify Purchaser, and Seller shall sell promptly (with a reasonable time given Seller to assemble documentation for such sale) to Purchaser, and Purchaser shall purchase from Seller, for a price equal to the allocated value of such Subject Properties and upon the other terms of this Agreement, the Subject Properties to which the preferential purchase right was asserted. (d) All Subject Properties for which all preferential purchase rights have been waived or have not been accepted prior to expiration after timely notice of the acceptance period by the holder of such right shall be sold to Purchaser at Closing pursuant and subject to the provisions of this Agreement. If one (1) or more of the holders of any preferential purchase rights notifies Seller subsequent to Closing that it intends to assert its preferential purchase right, Seller shall give notice thereof to Purchaser, whereupon Purchaser shall satisfy all such preferential purchase right obligations of Seller to such holders including, but not limited to, transferring the affected Assets to the holder of such rights and shall indemnify and hold Seller, Seller’s Affiliates and their respective Representatives harmless from and against any and all Claims, liabilities, losses, costs and expenses (including, without limitation, court costs and reasonable attorneys' fees) in connection therewith, and Purchaser shall be entitled to receive upon satisfaction in full by Purchaser of all the foregoing obligations all proceeds received from such holders in connection with such preferential purchase rights. AT, UPON AND AFTER CLOSING, PURCHASER SHALL INDEMNIFY, RELEASE, DEFEND AND HOLD HARMLESS SELLER, SELLER’S AFFILIATES AND THEIR RESPECTIVE REPRESENTATIVES FROM AND AGAINST ANY AND ALL CLAIMS, LIABILITIES, LOSSES, COSTS AND EXPENSES (INCLUDING, WITHOUT LIMITATION, COURT COSTS AND REASONABLE ATTORNEYS' FEES) ASSERTED OR INCURRED AT ANY TIME (WHETHER BEFORE, ON OR AFTER CLOSING) WITH RESPECT TO OR ARISING DIRECTLY OR INDIRECTLY FROM THE CLAIMS OF ANY PERSON TO A PREFERENTIAL PURCHASE RIGHT OR RIGHT TO

CONSENT AFFECTING ANY OF THE ASSETS TRANSFERRED TO PURCHASER HEREUNDER, INCLUDING, BUT NOT LIMITED TO, CLAIMS RESULTING FROM THE ALLOCATED VALUE PLACED BY PURCHASER ON THE SUBJECT PROPERTY OR THE FORM , TIMELINESS OR MANNER OF NOTICE OR FAILURE TO NOTIFY.

3.11 Termination by Seller. Notwithstanding any other provision of this Agreement to the contrary, prior to Closing, Seller shall have an absolute right, but not the obligation, to terminate this Agreement upon written notice to Purchaser, without liability or further obligation to Purchaser if the Title Defects presented by Purchaser and the Environmental Defects presented by Purchaser combined exceed ten percent (10%) of the Purchase Price. Seller shall have no obligation hereunder to Purchaser or any Person to sell, convey, deliver or otherwise transfer all or any part of the Assets if Seller terminates this Agreement pursuant to this Section 3.11. Purchaser agrees and acknowledges that Seller has no obligation to adjust the Purchase Price with respect to Defects.

3.12 Purchaser’s Waiver. Notwithstanding any provision in Article 3 to the contrary, in the event Seller delivers a notice terminating this Agreement pursuant to Section 3.11, Purchaser shall have until 5:00 p.m. on the first Business Day after receipt of said notice to forever waive, by written notice delivered to Seller on or before said date and time, Defects which constitute the grounds stated for termination in said termination notice, and if Purchaser so waives said Defects and matters, the notice of termination delivered by Seller shall be considered withdrawn. If Closing occurs after such withdrawal, Purchaser shall be deemed to have forever waived and/or assumed any and all Claims, known and unknown, arising from or related to any and all Defects or title to or defect or other condition of the Assets in whole or in part, including, without limitation, whether or not identified in a Notice of Defects, and notwithstanding the fact that Seller may not have cured any such Defect(s) to Purchaser's satisfaction, and Seller shall have no obligation with respect thereto.

ARTICLE 4. SELLER’S REPRESENTATIONS, WARRANTIES AND DISCLAIMER

Seller represents and warrants to Purchaser that as to Sections 4.1 through 4.13 below that:

4.1 Existence. Pioneer Natural Resources USA, Inc. is a Delaware corporation, is duly formed, validly existing and in good standing under the laws of the State of Delaware.

4.2 Power. Seller has the requisite power and authority to enter into and perform this Agreement and the transactions contemplated hereby. Except as set forth on the various Exhibits and Schedules attached to this Agreement, the execution, delivery and performance of this Agreement by Seller, and the transactions contemplated hereby, will not (a) violate any provision of Seller’s certificate, articles of incorporation, bylaws or other governing documents, (b) to the best knowledge and belief of Seller, conflict with, result in a breach of, constitute a default (or an event that with the lapse of time or notice, or both would constitute a default) under any

agreement or instrument to which Seller is a party or by which Seller is bound, (c) violate any judgment, order, ruling, or decree applicable to Seller and entered or delivered in a proceeding in which Seller was or is a named party, or (d) to the best knowledge and belief of Seller, violate any applicable law, rule or regulation.

4.3 Authorization. The execution, delivery and performance of this Agreement and the transactions contemplated hereby have been duly and validly authorized by all requisite action on the part of Seller. This Agreement has been duly executed and delivered on behalf of Seller, and at the Closing all documents and instruments required hereunder to be executed and delivered by Seller shall be duly executed and delivered. This Agreement and such documents and instruments shall constitute legal, valid and binding obligations of Seller enforceable in accordance with their terms subject, however, to the effect of bankruptcy, insolvency, reorganization, moratorium and similar laws from time to time in effect relating to the rights and remedies of creditors, as well as to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

4.4 Brokers. Seller has incurred no obligation or liability, contingent or otherwise, for brokers' or finders' fees in respect of the matters provided for in this Agreement which will be the responsibility of Purchaser.

4.5 Foreign Person. Seller is not a "foreign person" within the meaning of the Section 1445(f) of the Code.

4.6 No Reservations. There are no reservations of Seller which affect the Assets other than those that are recorded in the relevant public records or identified or referenced in this Agreement.

4.7 Permits. To the best of Seller’s knowledge, Seller possesses all material licenses, permits, certificates, orders, approvals and authorizations, or has properly made or will make prior to Closing all filings or applications for such licenses and permits, necessary to own the Assets and to carry on its business as now being conducted, except to the extent where the failure to so file or apply is not reasonably expected to result in a material adverse affect on the Assets.

4.8 Compliance with Law. To the best of Seller’s knowledge, Seller is in material compliance with all laws, ordinances, rules, regulations and orders applicable to the Assets, except to the extent of any non-compliance that is not reasonably expected to result in a material adverse effect on the Assets.

4.9 Taxes. All ad valorem, property, production, severance, excise, and similar taxes and assessments based on or measured by the ownership of property or the production of hydrocarbons or the receipt of proceeds therefrom attributable to the Assets that have become due and payable have been properly and timely paid, except to the extent of any failure that is not reasonably expected to result in a material adverse effect on the Assets, and except to the extent that such taxes are due and payable but contested, protested or appealed by Seller.

4.10 Litigation. Except as set forth on Schedule 4.10, no lawsuit, action or other proceeding in which Seller is a named party affects any of the Assets whether pending or threatened in writing which is based upon omissions, events or occurrences prior to the date of this Agreement, other than as set forth on Schedule 4.10.

4.11 AFE’s. To the best of Seller’s knowledge, as of the Execution Date, and except as disclosed on Schedule 4.11, the Subject Properties have no outstanding authorities for expenditure that (a) require the additional drilling of wells or other material development obligations in order to earn or continue to hold all or any portion of said Subject Properties or (b) obligate Seller to make payments of any single expenditure amounts exceeding $200,000 (net to Seller) in connection with additional drilling of wells or other capital expenditures affecting the said Subject Properties.

4.12 Environmental Actions. As of the Execution Date and except as set forth on Schedules 4.10, 9.10, 4.12, or other Schedules or Exhibits to this Agreement, to the best of Seller’s knowledge, there is not an active pending written claim known to or received by Seller from a third party relating to the Subject Properties seeking monetary relief, injunctive relief, or remediation from Seller arising from Seller’s ownership or operation of the Subject Properties prior to the Execution Date and alleging a violation of Environmental Laws, or the unlawful disposal, discharge or release of any Hazardous Substance.

4.13 Take-or Pay. To the best of Seller’s knowledge, except as disclosed in this Agreement, Schedule 4.13, or other Schedule or Exhibit hereto, with regard to the Subject Properties, Seller is not obligated beyond Closing by virtue of (a) a prepayment arrangement under any contract (to which Seller or its Affiliates are a party) for the sale of hydrocarbons or (b) any arrangement to deliver Seller’s hydrocarbons produced from the Subject Properties at some future time without receiving full payment therefore.

4.14 LIMITATION AND DISCLAIMER OF REPRESENTATIONS AND WARRANTIES. THE EXPRESS REPRESENTATIONS AND WARRANTIES OF SELLER CONTAINED IN THIS AGREEMENT ARE EXCLUSIVE AND ARE IN LIEU OF ALL OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE, AND THE REPRESENTATIONS AND WARRANTIES CONTAINED HEREIN SHALL TERMINATE IN ALL RESPECTS UPON CLOSING OR TERMINATION OF THIS AGREEMENT. PURCHASER ACKNOWLEDGES THAT SELLER HAS NOT MADE, AND SELLER HEREBY EXPRESSLY DISCLAIMS AND NEGATES, ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, RELATING TO THE CONDITION OF ANY WELL, IMMOVABLE PROPERTY, MOVABLE PROPERTY, EQUIPMENT, INVENTORY, MACHINERY, FIXTURES AND PERSONAL PROPERTY CONSTITUTING ANY PART OF THE ASSETS (INCLUDING, WITHOUT LIMITATION, (a) ANY IMPLIED OR EXPRESS WARRANTY OF MERCHANTABILITY, (b) ANY IMPLIED OR EXPRESS WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, (c) ANY IMPLIED OR EXPRESS WARRANTY OF CONFORMITY TO MODELS OR SAMPLES OF

MATERIALS, (d) ANY RIGHTS OF PURCHASER UNDER APPROPRIATE STATUTES TO CLAIM DIMINUTION OF CONSIDERATION OR RETURN OF THE PURCHASE PRICE, (e) ANY IMPLIED OR EXPRESS WARRANTY OF FREEDOM FROM REDHIBITORY VICES OR DEFECTS OR OTHER VICES OR DEFECTS, WHETHER KNOWN OR UNKNOWN, (f) ANY IMPLIED OR EXPRESS WARRANTY OF FREEDOM FROM PATENT OR TRADEMARK INFRINGEMENT, (g) ANY AND ALL IMPLIED WARRANTIES EXISTING UNDER APPLICABLE LAW NOW OR HEREAFTER IN EFFECT, AND (h) ANY IMPLIED OR EXPRESS WARRANTY REGARDING ENVIRONMENTAL LAWS, THE RELEASE OF MATERIALS OR SUBSTANCES INTO THE ENVIRONMENT OR THE PRESENCE OF MATERIALS OR SUBSTANCES IN, ON OR UNDER THE SUBJECT PROPERTIES OR PROPERTY OR PROTECTION OF THE ENVIRONMENT OR HEALTH; IT BEING THE EXPRESS INTENTION OF PURCHASER AND SELLER THAT THE WELLS, IMMOVABLE PROPERTY, MOVABLE PROPERTY, EQUIPMENT, INVENTORY, MACHINERY, FIXTURES AND PERSONAL PROPERTY SHALL BE CONVEYED TO PURCHASER AS IS AND IN THEIR PRESENT CONDITION AND STATE OF REPAIR. SELLER SPECIFICALLY NEGATES AND MAKES NO WARRANTY OR REPRESENTATION, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, AS TO THE ACCURACY OR COMPLETENESS OF ANY DATA (INCLUDING SEISMIC DATA), INTERPRETATIVE INFORMATION, REPORTS, RECORDS, PROJECTIONS, INFORMATION OR MATERIALS NOW, HERETOFORE OR HEREAFTER FURNISHED OR MADE AVAILABLE TO PURCHASER IN CONNECTION WITH THIS AGREEMENT OR THE CONTEMPLATED TRANSACTIONS, INCLUDING, WITHOUT LIMITATION, ANY DESCRIPTION OF THE ASSETS, PRICING ASSUMPTIONS, OR QUALITY OR QUANTITY OF HYDROCARBON RESERVES (IF ANY) ATTRIBUTABLE TO THE ASSETS OR THE ABILITY OR POTENTIAL OF THE ASSETS TO PRODUCE HYDROCARBONS OR THE ENVIRONMENTAL CONDITION OF THE ASSETS OR PROPERTY OR ANY OTHER MATTERS CONTAINED IN CONFIDENTIAL INFORMATION OR ANY OTHER MATERIALS FURNISHED OR MADE AVAILABLE TO PURCHASER BY SELLER OR BY SELLER’S REPRESENTATIVES. ANY AND ALL SUCH DATA, RECORDS, REPORTS, PROJECTIONS, INFORMATION AND OTHER MATERIALS FURNISHED BY SELLER OR BY SELLER’S REPRESENTATIVES OR OTHERWISE MADE AVAILABLE TO PURCHASER OR PURCHASER'S REPRESENTATIVES ARE PROVIDED FOR THE BENEFIT OF PURCHASER AS A CONVENIENCE, AND SHALL NOT CREATE OR GIVE RISE TO ANY LIABILITY OF OR AGAINST SELLER, SELLER’S AFFILIATES OR THEIR RESPECTIVE REPRESENTATIVES. ANY RELIANCE ON OR USE OF THE SAME SHALL BE AT PURCHASER’S SOLE RISK. THE ASSIGNMENTS AND BILLS OF SALE OR OTHER CONVEYANCES TO BE DELIVERED BY SELLER AT CLOSING MAY EXPRESSLY SET FORTH THE LIMITATIONS AND DISCLAIMERS OF REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS PARAGRAPH.

4.15 Additions. As to Sections 4.10, 4.11, 4.12, and 4.13 above, the representations and warranties of Seller are made with reference to Seller’s knowledge on the Execution Date. In the event Seller becomes aware after the Execution Date, but before Closing, that additional matters

or occurrences need to be added to Schedules or Exhibits to this Agreement to make said representations and warranties accurate at Closing, then such matters shall be added promptly by Seller to said Schedules or Exhibits, after gaining such knowledge of such matters or occurrences, and Seller shall not as a result thereof be in default or breach of this Agreement; provided, however, the additional matters or occurrences added to the Schedules or Exhibits do not materially adversely affect the ownership, operation or value of the Assets.

ARTICLE 5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASER

Purchaser represents and warrants and covenants to Seller that:

5.1 Existence. Purchaser is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware.

5.2 Power. Purchaser has the requisite power and authority to enter into and perform this Agreement and the transactions contemplated hereby. The execution, delivery and performance of this Agreement by Purchaser, and the transactions contemplated hereby, will not (a) violate any provision of any Purchaser’s certificate or articles of incorporation or organization, as the case may be, bylaws or other governing documents; (b) conflict with, result in a breach of, constitute a default (or an event that with the lapse of time or notice, or both would constitute a default) under any agreement or instrument to which Purchaser is a party or by which Purchaser is bound; (c) violate any judgment, order, ruling, or decree applicable to Purchaser and entered or delivered in a proceeding in which Purchaser was or is a named party; or (d) to the best knowledge and belief of Purchaser, violate any applicable law, rule or regulation.

5.3 Authorization. The execution, delivery and performance of this Agreement and the transactions contemplated hereby have been duly and validly authorized by all requisite action on the part of Purchaser. This Agreement has been duly executed and delivered on behalf of Purchaser, and at the Closing all documents and instruments required hereunder to be executed and delivered by Purchaser shall have been duly executed and delivered. This Agreement and such documents and instruments shall constitute legal, valid and binding obligations of Purchaser enforceable in accordance with their terms, subject, however, to the effect of bankruptcy, insolvency, reorganization, moratorium and similar laws from time to time in effect relating to the rights and remedies of creditors, as well as to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

5.4 Brokers. Purchaser has not incurred any obligation or liability, contingent or otherwise, for brokers' or finders' fees in respect of the matters provided for in this Agreement which will be the responsibility of Seller.

5.5 Investment Intent. Purchaser is acquiring the Assets for Purchaser's own account for investment, and not with a view to, or for resale in connection with, any distribution thereof

within the meaning of the Securities Act of 1933, and shall not resell any or all of the Assets except in compliance with all applicable securities laws.

5.6 Due Diligence. Purchaser represents, warrants and covenants that it has or will perform prior to Closing sufficient review and due diligence, including review of file data and inspections, to evaluate the Assets and Property to Purchaser’s complete satisfaction as a prudent and knowledgeable purchaser. Further, at Closing, Purchaser shall have inspected or waived its right to inspect the Records and the Assets for all purposes and satisfied itself as to the accuracy and completeness of the Records, the physical and environmental condition of the Assets, Property and Subject Properties, both surface and subsurface, including but not limited to conditions specifically related to the presence, release or disposal of Hazardous Substances. Purchaser is relying solely upon its own inspection of the Assets and Property, and Purchaser shall accept all of the same in their “as is, where is” condition, with all faults.

5.7 Sophisticated Buyer. Purchaser is a sophisticated buyer, knowledgeable in the evaluation and acquisition of oil and gas properties, and understands that by purchasing oil and gas properties or interests, Purchaser may be exposed to risks and liabilities associated with the oil and gas business. Purchaser is engaged in the business of exploring for or production oil and gas or other minerals as an ongoing business. By reason of this knowledge and experience, Purchaser will evaluate the merits and risks of the Assets, properties or interests to be purchased from Seller and will form an opinion based solely upon Purchaser’s knowledge and experience and not upon any statements, opinion or predictions by Seller, Seller’s Affiliates or their respective Representatives.

5.8 Economic Risk. Purchaser is aware that ownership of any of the oil and gas properties or interests is highly speculative and subject to substantial risks, and Purchaser is capable of bearing the high degree of economic risk and burdens of any purchase of the Assets from Seller, including, but not limited to, the possibility of the complete loss of the Purchase Price, all contributed capital, the loss of all anticipated tax benefits (if any), the lack of a public market and limited transferability of such interests or properties.

5.9 Financing. Purchaser has or will have adequate funding or financing to pay the Purchase Price at Closing.

5.10 Accredited Investor. Purchaser is an "accredited investor" as that term is used in Regulation D of the Act.

5.11 Solicitation. At no time was Purchaser presented with or solicited by or through any public promotion or any form of advertising.

5.12 Access to Records. After Closing, Seller shall have reasonable access to all records and information in possession of Purchaser required by Seller to meet its indemnity obligations under this Agreement .

ARTICLE 5A. ADDITIONAL COVENANTS

Seller covenants and agrees as to Section 5A.1, 5A.2 and 5A.3 that from and after the Execution Date and until the Closing Date:

5A.1 Maintenance of Assets. Seller will not sell, transfer, assign, convey or otherwise dispose of any of the Assets subject to Seller's direct control, other than (a) oil, gas and other hydrocarbons produced, saved and sold in the ordinary course of business, (b) personal property and equipment which is replaced with property and equipment of comparable or better value and utility in the ordinary and routine maintenance and operation of the Subject Properties, and (c) as required in connection with any exercise of preferential rights or as otherwise required to satisfy obligations to third parties under contracts presently existing.

5A.2 No Encumbrances. Seller will not create any lien, security interest or encumbrance on the Assets, the oil or gas attributable to the Assets, or the proceeds thereof, other than Permitted Encumbrances.

5A.3 Operations. With respect to any of the Subject Properties operated by Seller, Seller shall endeavor in good faith (subject to emergency situations which may occur) until Closing (subject to this Agreement and the rights of affected parties under applicable agreements) to:

(a) cause the Subject Properties and Equipment to be developed, maintained and operated in a reasonably good and workmanlike manner consistent with it past practices and maintain insurance, if any, now in force with respect to the Subject Properties and Equipment;

(b) not approve the drilling of any new well on the Subject Properties without the advance written consent of Purchaser, which consent (which may not be unreasonably withheld or delayed) or non-consent must be given by Purchaser within two (2) days of the notice from Seller;

(c) not enter into or assume any contract, agreement, litigation settlement or commitment which is not in the ordinary course of business as heretofore conducted or which involves payments, receipts or potential liabilities with respect to one individual Subject Property of more than $50,000.00 (net to Seller), excluding emergency expenditures;

(d) not resign, transfer or otherwise voluntarily relinquish its rights as operator of any Subject Property for which it serves as operator on the date hereof;

(e) not grant any preferential right to purchase or similar right or agree to require the consent of any party to the transfer and assignment of the Assets to Purchaser, subject to existing contractual obligations;

(f) not enter into any gas sales contract or crude oil sales or supply contract with respect to the Subject Properties that is not terminable without penalty upon notice of thirty (30) days or less;

(g) not enter into any transaction the effect of which, considered as a whole, would be to cause Seller's ownership interest in any of the Subject Properties to be altered from its ownership interest as of the date hereof;

(h) if any approval or consent by any federal, state or local governmental authority is required to vest Acceptable Title to any of the Subject Properties in Purchaser at Closing, exercise reasonable efforts, as reasonably requested in writing by Purchaser, to assist Purchaser in obtaining all such required approvals or consents at Purchaser's expense; or

(i) endeavor to give prompt written notice to Purchaser of any written notice of default (or written threat of default, whether disputed or denied) received or given by Seller after the date hereof under any instrument or agreement affecting the Subject Properties to which Seller is a party or by which it or any of the Subject Properties is bound.

5A.4. Seller and Purchaser, until Closing, agree as follows:

(a) Purchaser shall notify Seller promptly after Purchaser obtains knowledge that any representation or warranty of Seller contained in this Agreement is untrue in any material respect or will be untrue in any material respect as of the Closing Date or that any covenant or agreement to be performed or observed by Seller prior to or on the Closing Date has not been so performed or observed in any material respect.

(b) Seller shall notify Purchaser promptly after Seller obtains knowledge that any representation or warranty of purchaser contained in this Agreement is untrue in any material respect or will be untrue in any material respect as of the Closing Date or that any covenant or agreement to be performed or observed by Purchaser prior to or on the Closing Date has not been so performed or observed in any material respect.

(c) If any of Purchaser’s or Seller’s representations or warranties is untrue or shall become untrue in any material respect between the Execution Date and the Closing Date, or if any of Purchaser’s or Seller’s covenants or agreements to be performed or observed prior to or on the Closing Date shall not have been so performed or observed in any material respect, but if such breach of representation, warranty, covenant or agreement shall (if curable) be cured by Closing (or, if Closing does not occur, by the date set forth in Section 10.1 (a)), then such breach shall be considered not to have occurred for all purposes of this Agreement.

ARTICLE 6. SELLER'S CONDITIONS OF CLOSING

Seller's obligation to consummate the transactions provided for herein is subject only to the satisfaction or waiver by Seller on or before the Closing Date of the following conditions:

6.1 Representations. The representations and warranties of Purchaser contained in Article 5 herein shall be true and correct in all material respects on the Closing Date as though made on and as of that date, except where such representations and/or warranties are limited to the Execution Date or other period.

6.2 Performance. Purchaser shall have performed and satisfied in all material respects the obligations, covenants and agreements hereunder to be performed by it at or prior to the Closing, including but not limited to payment of the Purchase Price.

6.3 Officer's Certificate. Purchaser shall have delivered to Seller a certificate of an executive officer dated the Closing Date, certifying on behalf of such Purchaser that the conditions set forth in Sections 6.1 and 6.2 have been fulfilled.

6.4 Pending Matters. Except as set forth on Schedule 4.10, no suit, action or other proceeding by a third party or a governmental authority shall be pending or threatened which seeks substantial damages from Seller in connection with, or seeks to restrain, enjoin or otherwise prohibit, the consummation of the transactions contemplated by this Agreement.

6.5 Letters of Credit. On or before the fifth (5th) Business Day before Closing, Purchaser shall have presented Seller with irrevocable evidence satisfactory to Seller that Purchaser will takeover or replace at Closing any and all letter(s) of credit, bonds or other security required under Law or Related Agreements for the owner or operator of the Assets or any of them, covering plugging and abandonment of Wells, Assets, oil spills and/or other matters, such that Seller, upon and after Closing will have no further liability or obligation related or arising therefrom. However, if despite its good faith efforts to do so, Purchaser is unable to obtain from Chevron U.S.A. Inc. its agreement to replace Seller’s Chevron Letter of Credit with a letter of credit from Purchaser providing for terms and conditions that are, in all material respects, the same or similar to those provided for in Seller’s Chevron Letter of Credit, Seller may either waive this condition or request and obtain from Purchaser a form of security providing for terms and conditions or protections not materially different than those set forth in Seller’s existing Chevron Letter of Credit.

6.6 Parent Guaranty. On or before the fifth (5th) Business Day before Closing, Purchaser shall have presented Seller with an irrevocable Guaranty (effective on and after the Effective Date), satisfactory to Seller and executed in the form attached hereto as Exhibit “D”, from Purchaser’s ultimate corporate parent guaranteeing the performance by Purchaser of this Agreement and all instruments executed by Purchaser at Closing. Purchaser shall also present to Seller originals or certified copies of the corporate resolutions, articles of incorporation, incumbency certificates, powers of attorney and Corporate Secretary Certificates evidencing the validity of the Guaranty

and the signatories thereof and such other documentation as Seller may reasonably request evidencing the validity and enforceability of said Guaranty.

ARTICLE 7. PURCHASER'S CONDITIONS OF CLOSING

Purchaser's obligation to consummate the transactions provided for herein is subject only to the satisfaction or waiver by Purchaser on or before the Closing Date of the following conditions:

7.1 Representations. The representations and warranties of Seller contained herein in Article 4 shall be true and correct in all material respects on the Closing Date as though made on and as of that date, except where such representations and/or warranties are limited to the Execution Date or other period.

7.2 Performance. Seller shall have performed and satisfied in all material respects the obligations, covenants and agreements hereunder to be performed by it at or prior to the Closing.

7.3 Officer's Certificate. Seller shall have delivered to Purchaser a certificate of an executive officer of Seller or other designated person authorized to make such certificate dated the Closing Date, certifying on behalf of such Seller that the conditions set forth in Sections 7.1 and 7.2 have been fulfilled.

7.4 Pending Matters. Except as set forth on Schedule 4.10, no suit, action or other proceeding by a third party or a governmental authority shall be pending or threatened which seeks substantial damages from Purchaser in connection with or, seeks to restrain, enjoin or otherwise prohibit, the consummation of the transactions contemplated by this Agreement.

ARTICLE 8. CLOSING.

8.1 Time and Place of Closing. If the conditions to Closing have been satisfied or expressly waived by the party entitled to the benefits thereof, the consummation of the transactions contemplated hereby ("Closing") shall take place on or before August 18, 2005 at one of Seller's offices at 9:00 a.m., or at such other place and time or in such other manner agreed upon by Seller and Purchaser or permitted under this Agreement ("Closing Date"); provided, that Seller shall have the right to extend Closing for thirty (30) days for any reason, and that any extension by Seller shall not serve to provide Purchaser rights not otherwise expressly provided herein, nor to extend any rights of Purchaser contained herein, including, without limitation, those contained in Article 3.

8.2 Closing Obligations. At the Closing, the following events shall occur, each being a condition precedent to the others and each being deemed to have occurred simultaneously with the others:

(a) Seller shall execute, acknowledge and deliver to Purchaser an Assignment and Bill of Sale in substantially the form attached hereto as Exhibit "B" (modified to conform to this Agreement), conveying the Assets to Purchaser as provided hereby and Purchaser shall execute, acknowledge and deliver same to Seller;

(b) Seller and Purchaser shall each execute, acknowledge and deliver transfer orders or letters in lieu thereof substantially in the form set forth on Schedule 8.2(b) attached hereto directing all purchasers of production from the Assets to make payment to Purchaser of proceeds attributable to the Assets;

(d) Purchaser and Seller shall each execute and deliver a settlement statement (the "Preliminary Settlement Statement") prepared by Seller and setting forth the Purchase Price and all adjustments thereto using information to the extent then available and if not then available then Seller’s reasonable good faith estimate thereof, subject to Section 13.17(a);

(e) Purchaser and Seller shall each execute and deliver a Closing Agreement confirming the occurrence of Closing and the documents exchanged and such other instruments and certificates and take such other action as may be necessary to carry out their respective obligations under this Agreement;

(f) Seller shall deliver to Purchaser possession of the Assets, except otherwise provided in this Agreement;

(g) In compliance with the Code, Seller shall execute and deliver to Purchaser a nonforeign affidavit in the form of Exhibit “C” attached hereto; and

(h) For the Assets, (1) Purchaser shall deliver to Seller on the Closing Date evidence of its possession of the appropriate bond, surety letter, or letter of credit which has been accepted by the regulatory agency having jurisdiction over the plugging and abandonment of wells; (2) upon Purchaser’s receipt, Purchaser shall deliver to Seller proof that Purchaser has been approved by the relevant regulatory agency as operator of the Assets, including all Wells that are subject to this Agreement and evidence that Purchaser has obtained all necessary approvals, permits or transfers of permits to operate the Assets; and (3) Purchaser shall deliver to Seller letter(s) of credit or other security in a form satisfactory to Seller covering plugging and abandonment of Wells and/or other Assets sufficient to and which replaces any and all Seller’s letters of credit under any Related Agreement and relieve and release Seller of each and every obligation and liability related thereto or arising therefrom.

(i) Seller shall execute and deliver to Purchaser appropriate resignation of operator forms with respect to the Subject Properties operated by Seller.

(j) Purchaser shall provide a certificate duly executed by the secretary or any assistant secretary of Purchaser, dated as of the Closing, (i) attaching and certifying on behalf of Purchaser complete and correct copies of (A) the certificate of incorporation and the bylaws of Purchaser, each as in effect as of the Closing, (B) the resolutions of the Board of Directors of Purchaser authorizing the execution, delivery, and performance by Purchaser of this Agreement and the transactions contemplated hereby, and (C) any required approval by the stockholders of Purchaser of this Agreement and the transactions contemplated hereby and (ii) certifying on behalf of Purchaser the incumbency of each officer of Purchaser executing this Agreement or any document delivered in connection with the Closing

ARTICLE 9. POST-CLOSING OBLIGATIONS.

9.1 Receipts and Credits; Suspense Funds. Upon Closing and subject to the terms hereof, all monies, refunds, proceeds, receipts, credits, receivables, accounts and income attributable to the purchased Assets (a) for all periods of time from and after the Effective Time shall be the sole property and entitlement of the Purchaser, and, to the extent received by Seller, Seller shall fully disclose and account therefor to Purchaser promptly, and (b) for all periods of time prior to the Effective Time shall be the sole property and entitlement of Seller to the extent received by Purchaser, Purchaser shall fully disclose and account therefore to Seller promptly. Purchaser shall pay Seller for Seller’s share of hydrocarbons attributable to the purchased Assets produced or in storage on the Effective Time based on actual, if available, or estimated inventories, at Seller’s relevant contract price. Seller and Purchaser recognize that as of the Effective Time there may be over or under imbalances with respect to gas production, gathering, transportation or processing attributable to the Subject Properties ("Imbalances") and hereby agree that (i) Imbalances shall not be included in any Defects asserted hereunder, and (ii) the Subject Properties will be conveyed specifically subject to Imbalances that exist as of the Effective Time, with Purchaser, as of Closing, bearing and assuming all obligations with respect to any overproduction account or liability and receiving the benefit of and being credited with any underproduction account or credit; provided, however, that on or after Closing, there shall be a monetary adjustment pursuant to the Preliminary Settlement Statement or Final Accounting to reflect any known net overproduction or underproduction attributable to the Assets equal to $***. At Closing, Seller shall deliver to Purchaser all amounts in Seller's possession then known and recorded by Seller to be due third party owners of interests in the Subject Properties (except for funds suspended as a result of or relating to litigation or claims retained by Seller), and Purchaser agrees that it shall be solely responsible for the disposition of such funds, the payment thereof to the rightful owners and the payment, if any, of royalty thereon (the "Suspense Funds").

9.2 Costs and Liabilities; Indemnity

(a) As used in this Agreement, “Claims”, “CLAIMS,” “Claims” or “CLAIMS” shall include costs, expenses, obligations, claims, demands, causes of action, liabilities,

damages, fines, penalties, debts, losses and judgments of any kind or character, whether matured or, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, known or unknown, and all costs, expenses and fees (including, without limitation, interest, attorneys' fees, costs of experts, court costs and costs of investigation) incurred in connection therewith, including, but not limited to claims arising from or directly or indirectly related to death, personal injury, property damage, environmental damage or the remediation thereof, contract and royalty obligations, operating, suspense and capital obligations attributable or relating in any way to the Assets or the Property. As used in this Section 9.2, "Assets" shall include the Suspense Funds.

(b) (i) NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, BUT SUBJECT TO SECTION 3.2 AND SELLER’S LIMITED INDEMNITY OBLIGATIONS UNDER SECTION 9.2(f), IT IS THE EXPRESS INTENT AND AGREEMENT OF SELLER AND PURCHASER THAT, IF CLOSING OCCURS, PURCHASER SHALL ACCEPT THE ASSETS AND PROPERTY IN THEIR "AS IS, WHERE IS" CONDITION, SUBJECT TO AND WITH ANY AND ALL FAULTS, DEFECTS, DEFICIENCIES, IRREGULARITIES AND CLAIMS RELATED OR ATTRIBUTABLE IN ANY MANNER THERETO, INCLUDING, WITHOUT LIMITATION, REDHIBITORY VICES, TITLE DEFECTS, ENVIRONMENTAL DEFECTS, SUBSIDENCE, DECAY OR ANY OTHER MATTER AFFECTING IN ANY RESPECT THE TITLE OR PHYSICAL CONDITION OF, OR THE RIGHT TO OWN, USE, OPERATE, DEVELOP OR ENJOY, THE ASSETS OR THE PROPERTY, WHETHER KNOWN OR UNKNOWN, LIQUIDATED OR UNLIQUIDATED, FIXED OR CONTINGENT, DIRECT OR INDIRECT.

(ii) At, upon and after Closing and without further action or documentation, but subject to Section 3.2 and Seller’s limited indemnity obligations under Section 9.2(f), PURCHASER (1) shall assume, be responsible for and comply with all duties and obligations, express or implied, arising at any time with respect to the Assets, including, without limitation (i) those arising under or by virtue of any Related Agreements, lease, contract, agreement, document, permit, law, statute, rule, regulation or order of any governmental authority or court (specifically including, without limitation, any governmental request or other requirement to plug, re-plug or abandon or re-abandon any well of whatsoever type, status or classification, or take any restoration, clean-up, remedial or other action with respect to the Assets or Property), (ii) preferential rights to purchase, and (iii) third party consents; (2) shall assume, be responsible for and pay all Claims affecting or arising, directly or indirectly, at any time in connection with the Assets, including, without limitation, claims for personal or property injury or damage, restoration, environmental cleanup, remediation, or compliance, or for any other relief, arising directly or indirectly from or incident to, the use, ownership, occupation, operation, maintenance or abandonment of or production from the Assets, or condition of the Assets or Property, whether latent or patent, including, without limitation,

contamination of property or premises with Naturally Occurring Radioactive Materials (“NORM”), and whether or not arising solely from or contributed to by the negligence in any form, whether active or passive, or of any kind or nature, of Seller or its predecessors in title or their respective Affiliates agents, employees or contractors; and (3) SHALL, TO THE MAXIMUM EXTENT ALLOWED BY LAW, DEFEND, INDEMNIFY AND HOLD SELLER HARMLESS FROM ANY AND ALL CLAIMS ARISING, ASSERTED OR DUE AT ANY TIME, WHETHER BEFORE, ON OR AFTER THE EFFECTIVE TIME, IN CONNECTION WITH OR RELATED TO THE FOREGOING.

(iii) FURTHER, AT, UPON AND AFTER CLOSING, AND WITHOUT FURTHER DOCUMENTATION AND WITHOUT LIMITING THE GENERALITY OF THE FOREGOING PROVISIONS OF THIS ARTICLE 9, PURCHASER SHALL INDEMNIFY, DEFEND AND HOLD HARMLESS SELLER (SUBJECT TO Section 3.2 and SELLER’S LIMITED INDEMNITY UNDER SECTION 9.2(f)) FROM ANY AND ALL CLAIMS ARISING AT ANY TIME, WHETHER BEFORE, ON OR AFTER THE EFFECTIVE TIME, MADE BY ANY PERSON AND ARISING OUT OF OR RESULTING FROM:

(1) THE REVIEW, INSPECTION AND ASSESSMENT OF THE ASSETS OR THE PROPERTY BY PURCHASER;

(2) THE OWNERSHIP OR OPERATION OF THE ASSETS OR PROPERTY BY OR ON BEHALF OF SELLER OR ITS PREDECESSORS IN TITLE OR ACTS OR OMISSIONS BY OR ON BEHALF OF SELLER OR ITS PREDECESSORS IN TITLE IN CONNECTION WITH OR PERTAINING TO THE ASSETS OR PROPERTY;

(3) THE OWNERSHIP OR OPERATION OF THE ASSETS OR PROPERTY BY OR ON BEHALF OF PURCHASER OR ITS SUCCESSORS IN TITLE OR THE ACTS OR OMISSIONS BY OR ON BEHALF OF PURCHASER OR ITS SUCCESSORS IN TITLE IN CONNECTION WITH OR PERTAINING TO THE ASSETS OR PROPERTY;

(4) THE ACTS OR OMISSIONS OF THIRD PARTIES RELATING TO AN ERROR IN DESCRIBING THE ASSETS;

(5) RIGHTS AND OBLIGATIONS OF THE PARTIES OR THIRD PARTIES UNDER RELATED AGREEMENTS;

(6) FAILURE BY THIRD PARTIES TO APPROVE OR CONSENT TO ANY ASPECT OF THIS TRANSACTION OR THE SALE OR TRANSFER OF THE ASSETS OR ANY PORTION THEREOF;

(7) OBLIGATIONS TO PLUG, RE-PLUG, ABANDON OR RE-ABANDON WELLS, REMOVE FACILITIES, EQUIPMENT, PIPELINES AND FLOWLINES, DREDGE, CLOSE PITS AND REMOVE SUMPS, AND RESTORE, CLEAN UP AND/OR REMEDIATE THE ASSETS OR PROPERTY;

(8) PAYMENTS, ROYALTIES OR DISBURSEMENTS PAYABLE BY PURCHASER TO THIRD PARTIES WITH REGARD TO THE ASSETS;

(9) THE PHYSICAL OR ENVIRONMENTAL CONDITION OF OR RELATING TO THE ASSETS OR PROPERTY OR ANY DISPOSAL SITE (WHETHER ON THE ASSETS OR PROPERTY OR OFFSITE) CONTAINING MATERIALS OR WASTES FROM THE OPERATIONS OR ACTIVITIES ON THE PROPERTY OR ASSETS INCLUDING CLAIMS UNDER ANY LAW OR ENVIRONMENTAL LAW;

(10) REMEDIATION ACTIVITIES, INCLUDING DAMAGES INCURRED BY PURCHASER DURING OR ARISING FROM REMEDIATION ACTIVITIES RELATING TO THE ASSETS OR PROPERTY; AND

(11) INABILITY OR FAILURE TO OBTAIN THE TRANSFER OF A PERMIT OR AUTHORIZATION OR THE INABILITY TO OBTAIN A PERMIT OR AUTHORIZATION RELATING TO THE ASSETS.

(c) From and after Closing, any demand for indemnity hereunder shall be made by written notice, together with a written description of any Claims asserted stating the nature and basis of such Claim and, if ascertainable, the amount thereof. The party upon whom notice is served shall have a period of twenty (20) days after receipt of such notice within which to respond thereto or, in the case of an underlying demand which requires a shorter time for response, then within such shorter period as specified in such notice (the “Notice Period”). If the party upon whom notice is served denies liability or fails to provide the defense for any Claim, the other party may defend or compromise the Claim as it deems appropriate. If the party upon whom notice is served accepts liability and responsibility for the defense of any Claim, it shall so notify the other party as soon as is practicable prior to the expiration of the Notice Period and undertake the defense or compromise of such Claim with counsel selected by the party accepting such liability. If the party on whom notice is served undertakes the defense or compromise of such Claim, the other party shall be entitled, at its own expense, to participate in such defense. No compromise or settlement of any Claim shall be made without reasonable notice to the other party, and without the prior written approval of the other party, which approval shall not be unreasonably withheld, and such approval shall not be withheld if such compromise or settlement includes a general and complete release of the other party, its

successors, assigns, Affiliates and their respective Representatives in respect of the matter, with prejudice, and with no express or written admission of liability on the part of the other party, its Affiliates and their respective Representatives, and is without cost or liability and had no constraints on the future conduct of its or their respective businesses. Purchaser and Seller acknowledge that their obligations to indemnify, defend and hold the other party and its Affiliates harmless under this Agreement include obligations to pay the attorneys’ fees and court costs incurred by the other party and its Affiliates in defending said Claims subject to indemnification hereunder, regardless of the merits of said Claims, where the party to whom notice is served hereunder, denies liability or fails to provide the defense for any said Claim.

(d) Seller and Purchaser shall have the right at all times to participate, at their sole cost, in the preparation for any hearing or trial related to the indemnities set forth in this Agreement, as well as the right to appear on their own behalf or to retain separate counsel to represent them at any such hearing or trial.

(e) THE BENEFIT OF INDEMNITIES BY PURCHASER PROVIDED TO SELLER AND THE BENEFITS AND PROTECTIONS OF THIS AGREEMENT SHALL EXTEND TO SELLER AND ITS AFFILIATES AND ANY PERSON WHO AT ANY TIME HAS SERVED OR IS SERVING AS A DIRECTOR, OFFICER, EMPLOYEE, CONSULTANT, INVITEE OR AGENT THEREOF (EACH A "REPRESENTATIVE" AND COLLECTIVELY “REPRESENTATIVES”), AND EACH OF THEIR RESPECTIVE HEIRS, EXECUTORS, SUCCESSORS AND ASSIGNS, AND SHALL, TO THE MAXIMUM EXTENT ALLOWED BY LAW PROTECT THEM FROM ALL CLAIMS FOR WHICH INDEMNITY IS PROVIDED HEREUNDER, INCLUDING THOSE BASED ON NEGLIGENCE OF ANY NATURE, INCLUDING SOLE NEGLIGENCE, SIMPLE NEGLIGENCE, CONCURRENT NEGLIGENCE, ACTIVE NEGLIGENCE, PASSIVE NEGLIGENCE, STRICT LIABILITY OR FAULT OF SELLER (OR ANY REPRESENTATIVE OR OTHER INDEMNIFIED PARTY) OR ANY OTHER THEORY OF LIABILITY OR FAULT, WHETHER OF LAW (WHETHER COMMON OR STATUTORY) OR IN EQUITY. THE INDEMNIFICATION BY PURCHASER IN THIS SECTION 9.2 SHALL BE IN ADDITION TO ANY OTHER INDEMNITY PROVISIONS CONTAINED IN THIS AGREEMENT, AND IT IS EXPRESSLY UNDERSTOOD AND AGREED THAT THE TERMS OF THIS SECTION 9.2 SHALL, AT SELLER’S OPTION, CONTROL OVER ANY CONFLICTING OR CONTRADICTING TERMS OR PROVISIONS CONTAINED IN THIS AGREEMENT, AND SHALL SURVIVE CLOSING.

(f) Indemnification by Seller or Responsibility of Seller for Certain Third Party Claims.

(i) Except as to Claims expressly provided for in Section 9.2 (f)(ii) below, for the period beginning on the Closing Date and ending on ***, Seller agrees to defend, indemnify, and hold harmless Purchaser from and against any and all Claims filed by third parties prior to such *** to the extent pertaining to a) the mispayment or underpayment of

royalties attributable to the Subject Properties with respect to production obtained prior to the Effective Time, or b) taxes attributable and net to Seller’s interest in the Subject Properties and accruing or due prior to the Effective Time, or c) bodily injury or death occurring on the Subject Properties as a result of, or arising from, Seller’s operations thereon prior to the Effective Time to the extent, and only to the extent, that:

(1) the Claims are made by a Governmental Entity or non-governmental third parties not affiliated with Purchaser;

(2) the Claims are not made by a subsequent purchaser of any or all of the Assets;

(3) the Purchaser (or any subsequent purchaser, assignee or transferee) or any party associated with the Purchaser, did not take actions that intentionally exacerbated or were reasonably likely to exacerbate any losses or damages, or that encouraged a third party to make a claim for such losses or damages;

(4) the Claims under this Section 9.2(f) are based on facts that originate or events that take place solely during the period of January 1, 1990 through the Effective Time; and

(5) As to taxes and royalties, Purchaser did not have knowledge of such mispayment or underpayment as of the Execution Date.

The losses or damages claimed by Purchaser shall not exceed the Allocated Value of the Well(s) affected by the Claim and any losses or damages for any single Claim by Purchaser pursuant to this Section 9.2(f) must equal or exceed $*** in order for Purchaser to seek indemnification, provided however, no Claims submitted pursuant to Section 9.2(f) will be valid until the aggregate losses or damages from the Claims exceed $***, and then, for only that amount that exceeds $***, however, in no event shall Seller be required to indemnify Purchaser or pay any other amount in connection with respect to the transactions contemplated by this Agreement which individually or in the aggregate exceeds or would exceed *** or which would result in a double recovery or for which an adjustment has already been made under this Agreement.

Purchaser shall give Seller written notice, if at all, with respect to such Claims in accordance with the notice provisions of Section 9.2(c) prior to ***.

(ii) Under that Asset Sale Agreement dated January 23, 1990 (the “ASA”) and that Closing Agreement dated May 9, 1990 by and between Chevron U.S.A. Inc.,

(“Chevron”) and Greenhill Petroleum Corporation (“Greenhill”) Chevron and Greenhill agreed to the purchase and sale of interests comprising or pertaining to, all or in part, the Assets. Pursuant to the ASA and the Closing Agreement, Chevron retained responsibility for the plugging and abandoning of certain wells and the restoration and reclamation of certain pits and pit areas and the surface areas associated with certain wells (“Chevron Retained Liabilities”) among other matters relating to the Assets. Seller agrees that as between Seller and Purchaser, Seller shall be responsible for any Claims arising to the extent and only to the extent pertaining to the obligations comprising the Chevron Retained Liabilities as provided herein:

(1) the Claims are made by a Governmental Entity or non-governmental third parties not affiliated with Purchaser;

(2) the Claims are not made by a subsequent purchaser, transferee or assignee of any or all of the Assets;

(4) Chevron has failed to fulfill its obligations regarding the Chevron Retained Liabilities; and

(5) the losses or damages claimed by Purchaser shall exceed, in the aggregate, a deductible of *** dollars (US$***) which has been or is to be borne by Purchaser, however, in no event shall Seller be responsible for the Chevron Retained Liabilities hereunder, to the extent such Claims equal or exceed or have equaled or exceeded, in the aggregate, an amount borne or to be borne by Seller of *** dollars ($***).

During the period when Purchaser is responsible for the Chevron Retained Liabilities, Seller shall cooperate and coordinate with Purchaser to contact Chevron and take such further action as may be reasonable and necessary to have Chevron perform its obligations under the ASA and Closing Agreement pertaining to the Chevron Retained Liabilities. During the period when Seller is responsible for the Chevron Retained Liabilities, Purchaser shall cooperate and coordinate with Seller to contact Chevron and take such further action as may be reasonable and necessary to have Chevron perform its obligations under the ASA and Closing Agreement pertaining to the Chevron Retained Liabilities. During the period when Purchaser is responsible for the Chevron Retained Liabilities, Purchaser shall be deemed to have been assigned all rights of Seller under the ASA and Closing Agreement to enforce against Chevron the Sections pertaining

to the Chevron Retained Liabilities and similarly during the period when Seller is responsible for the Chevron Retained Liabilities, Seller shall be deemed to have retained all rights of Seller under the ASA and Closing Agreement to enforce against Chevron the Sections therein pertaining to the Chevron Retained Liabilities. The Parties shall take such reasonable steps and execute such reasonable documents to assist the other during the period the other Party is responsible for the Chevron Retained Liabilities. During the period when Seller is responsible for the Chevron Retained Liabilities, Purchaser shall allow Seller and its representatives and contractors access to the Assets and Subject Properties, without charge, so that Seller may fulfill its obligations hereunder pertaining to the Chevron Retained Liabilities.

9.3. Further Assurances. After Closing, Seller and Purchaser agree to take such further actions and to execute, acknowledge and deliver all such further documents and take such further action that is necessary or useful in carrying out the purposes of this Agreement or of any document delivered pursuant hereto. The Parties will cooperate at all times after Closing to execute and record correction instruments to correct scrivener's errors in the preparation of Closing documents.

9.4 Delivery of Records. As soon as reasonably possible but no later than sixty (60) days after the Closing Date, Seller shall deliver the Records covering the Assets with Purchaser bearing the expense for such delivery; provided, that Seller (i) shall exercise commercially reasonable efforts to provide Purchaser at Closing or as soon thereafter as is practicable with all Records necessary to assume and conduct operations of the Assets, and (ii) shall have the right to retain, as its own, original Records that pertain to Excluded Assets and copies (at Seller’s cost) of all other Records. Purchaser shall provide access to Seller to all Records, with the right to copy same, upon reasonable notice during regular business hours, for a period of seven (7) years after the Closing Date.

9.5 Access to Data. Subject to the rights of third parties and Seller's proprietary rights, Seller, upon and after Closing, to the extent it can do so without cost or penalty, shall provide Purchaser with reasonable access to Seller's books and records for a period ending two (2) years after Closing as necessary for Purchaser to prepare its financial statements.

9.6 Purchaser’s Release of Seller. Upon and after Closing, subject to Section 3.2 and Seller’s indemnification obligations under Section 9.2(f), and without further action or documentation, Purchaser releases and discharges, to the maximum extent allowed by law (but no further), Seller and Seller's Affiliates and their respective Representatives from all Claims relating in any way to the Assets, the Property or the transactions contemplated by this Agreement, regardless of when or how the Claims arose or arise, or whether the Claims were foreseeable or unforeseeable. Purchaser’s release of Seller and its Affiliates and their respective Representatives includes Claims resulting in any way from the negligence or strict liability of Seller and its Affiliates and their respective Representatives,

whether the negligence or strict liability is active, passive, joint, concurrent, or sole, but expressly excluding willful misconduct. There are no exceptions to Purchaser’s release of Seller and its Affiliates and their respective Affiliates, and this release is binding on Purchaser and its successors and assigns. PURCHASER EXPRESSLY WARRANTS AND REPRESENTS AND DOES HEREBY STATE AND REPRESENT THAT NO PROMISE OR AGREEMENT WHICH IS NOT HEREIN EXPRESSED HAS BEEN MADE TO PURCHASER IN EXECUTING THIS AGREEMENT OR AGREEING TO THIS RELEASE AND THAT PURCHASER IS NOT RELYING UPON ANY STATEMENT OR REPRESENTATION OF SELLER OR ANY AFFILIATE OF SELLER OR ANY OF THEIR RESPECTIVE REPRESENTATIVES. PURCHASER HAS BEEN REPRESENTED BY LEGAL COUNSEL AND SAID COUNSEL HAS READ AND EXPLAINED TO PURCHASER THE ENTIRE CONTENTS OF THIS AGREEMENT AND THIS RELEASE AND EXPLAINED THE LEGAL CONSEQUENCES THEREOF.

9.7 Retroactive Effect. Purchaser acknowledges that its obligations to release, indemnify, defend, and hold Seller and its Affiliates and their respective Representatives harmless apply to matters occurring or arising before, on and after the Effective Time to the extent provided in this Agreement.

9.8 Inducement to Seller. Purchaser acknowledges that it evaluated its obligations under this article and that its assumption of these obligations is a material inducement to Seller to enter into this Agreement with and Close the sale to Purchaser.

9.9 Related Agreements. Unless specifically provided otherwise in this Agreement, the sale of the Assets is made subject to all oil, gas and mineral leases, deeds, purchase and sale agreements, asset sale agreements, assignments, subleases, farmout agreements, joint operating agreements, unit agreements, pooling agreements, letter agreements, easements, rights of way and all other agreements with respect to or pertaining to the Assets to the extent they are binding on Seller or Seller's Affiliates (the “Related Agreements”). Upon and after Closing, Purchaser expressly assumes the obligations and liabilities of Seller or Seller's Affiliates under such agreements insofar as the obligations and liabilities concern or pertain to the Assets and to execute any documents necessary to effectuate such assumption. The Parties agree that this Section 9.9 is applicable to all instruments whether they are recorded or not.

9.10 Litigation. Upon and after Closing, Purchaser shall assume all obligations of Seller and be responsible and liable for all litigation listed on Schedule 9.10, and all matters, costs, judgments, and expenses related thereto or arising therefrom. Seller reserves the right to remove litigation from Schedule 9.10 on or before Closing.

9.11 Purchaser’s Indemnity of Seller. Subject to Section 3.2 and except for Seller’s limited indemnity of Purchaser contained in Section 9.2(f), and without diminishing the express provisions of this Article 9, it is the intent of Purchaser and Seller that, to the maximum extent allowed by law, Seller, Seller's Affiliates and their respective Representatives be indemnified, defended and held harmless by Purchaser at all times

upon and after Closing in a manner so that Seller and its Affiliates and their respective Representatives, will be protected as if Seller has never at any time owned, used or operated the Assets, Lands, Subject Properties or the Property or any interest therein or pertaining thereto, in whole or in part. If any provision in this Article 9 is invalid or not allowed by Law, it is deemed modified to the limited and minimum extent to conform to law to provide Seller, and Seller's Affiliates and their respective Representatives the greatest possible protection and benefit allowed by Law.

ARTICLE 10. TERMINATION

10.1 Right of Termination. This Agreement and the transactions contemplated hereby may be terminated at any time prior to the Closing under the following conditions (subject to extensions allowed Seller in this Agreement):

(a) By Seller if Closing does not occur on or before September 30, 2005, for any reason other than Seller’s wrongful failure or refusal to perform its material obligations under this Agreement;

(b) By mutual written consent of the Parties;

(c) By either Seller or Purchaser if the consummation of the transactions contemplated herein would violate any nonappealable final order, decree or judgment of any Governmental Entity having appropriate jurisdiction enjoining or awarding substantial damages in connection with the consummation or the transactions contemplated herein;

(d) By Purchaser if the aggregate net value of all downward and upward adjustments to the Purchase Price claimed by Purchaser and Seller pursuant to Article 3 and Article 12 of the Agreement, which remain unresolved as of the Closing Date, would reduce the Purchase Price by an amount exceeding 20% of the Purchase Price;

(e) By Seller if the aggregate value of all downward adjustments to the Purchase Price claimed by Purchaser pursuant to Article 3 and Section 12.3 of the Agreement exceeds 10% or more of the Purchase Price; or

(f) By Seller if any condition specified in Article 6 has not been satisfied on or before 5:00 p.m. on the Closing Date, and shall not theretofore have been waived by Seller, provided that the failure to consummate the transactions contemplated hereby on or before such date did not result from the failure by Seller to fulfill any undertaking or commitment of Seller provided for herein that is required to be fulfilled on or prior to Closing. By Purchaser if any condition specified in Article 7 has not been satisfied on or before 5:00 p.m. on the Closing Date, and shall not theretofore have been waived by Purchaser, provided that the failure to consummate the transactions contemplated hereby on or before such date did not result from the failure by Purchaser to fulfill any

undertaking or commitment of Purchaser provided for herein that is required to be fulfilled on or prior to Closing.

10.2 Effect of Termination. If this Agreement is terminated pursuant to Section 10.1, this Agreement shall become void and of no further force or effect (except for the provisions of Sections 2.4, 3.7(f) (the penultimate sentence only), 4.4, 4.14 (the third to the last and penultimate sentences only), 5.4, Article 10 and Sections 13.1 through 13.11, Sections 13.13, 13.14, 13.15, 13.16, 13.20, 13.21, 13.22 and 13.27, each of which shall survive such termination and continue in full force and effect). If Seller validly terminates this Agreement pursuant to Section 10.1(a) or (f) above, Seller may retain up to 100% of the Deposit without further liability or obligation to Purchaser. The Deposit shall be returned to Purchaser if this Agreement is terminated pursuant to Section 10.1(b), (c), (d), or (e) or if validly terminated by Purchaser pursuant to 10.1(f). If Seller retains the Deposit, or a portion thereof as provided above, then such retention by Seller of the Deposit, all or in part, shall be treated by the Parties as liquidated damages, in lieu of all other damages or other remedies (it being agreed by the Parties that damages in said event would be extremely difficult to determine and that the Deposit (or the portion thereof) retained by Seller represents a fair and reasonable estimate of such damages to Seller under the circumstances and does not constitute a penalty). If the Deposit is returned to Purchaser, Seller shall have no further obligation or liability to Purchaser and PURCHASER HEREBY COVENANTS NOT TO SUE SELLER, OR SELLER’S AFFILIATES OR ANY OF THEIR RESPECTIVE REPRESENTATIVES OR INITIATE LITIGATION OR OTHERWISE PURSUE ANY CLAIM AGAINST SELLER WITH REGARD TO ANY DISPUTES, ISSUES OR CLAIMS ARISING OUT OF OR RELATING TO THE TERMINATION OF THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, THE DEPOSIT (OR ANY PURPORTEDLY LOST INTEREST THEREON) OR SELLER’S RETENTION OF ALL OR PART OF THE DEPOSIT PURSUANT TO THIS SECTION 10.2. Notwithstanding anything to the contrary contained in this Agreement, upon any termination of this Agreement pursuant to Section 10.1, or as otherwise provided in this Agreement, Seller shall be free immediately to enjoy all rights of ownership of the Assets and may sell, transfer, encumber or otherwise dispose of the Assets to any party without any restriction under this Agreement.

ARTICLE 11. TAXES

11.1 Apportionment of Ad Valorem and Property Taxes. All ad valorem taxes, real property taxes, personal property taxes, and similar obligations concerning the Assets with respect to the tax period in which the Effective Time occurs ("Property Taxes") shall be apportioned as of the Effective Time between Seller and Purchaser. Purchaser shall file or cause to be filed all required reports and returns incident to the Property Taxes and shall pay or cause to be paid to the taxing authorities all Property Taxes relating to the tax period in which the Effective Time occurs. Seller shall pay to Purchaser Seller’s pro rata portion of Property Taxes within thirty (30) days after receipt of Seller's invoice therefor.

11.2 Sales Taxes. The Purchase Price excludes any sales taxes or other taxes required to be paid in connection with the sale of property pursuant to this Agreement. If a determination is ever made that a sales tax or other transfer tax applies, Purchaser shall be liable for all sales, gross receipts, use and other taxes, conveyance, transfer and recording fees and real estate transfer stamps or taxes that may be imposed on any transfer of property pursuant to this Agreement. These taxes shall be collected and remitted under applicable law. Purchaser shall indemnify, defend, and hold Seller harmless with respect to the payment of any of these taxes, if any, including any interest or penalties assessed thereon. Seller will cooperate with Purchaser in providing any documentation necessary for Purchaser to obtain an exemption for such taxes.

11.3 Other Taxes. Except as otherwise provided herein, income taxes, franchise and similar taxes shall be the responsibility of the party incurring same. Severance taxes shall be allocated to each party based on the ownership (as of the Effective Time) of the hydrocarbon production giving rise to the liability. Except as otherwise provided herein, all taxes (other than income taxes) that are imposed on or with respect to the production of oil, natural gas or other hydrocarbons or minerals or the receipt of proceeds therefrom (including but not limited to severance, production, and excise taxes) shall be apportioned between the Parties based upon the respective shares of production taken by the Parties as of the Effective Time. From and after Closing, Purchaser shall be responsible for paying or withholding or causing to be paid or withheld all such taxes and for filing all statements, returns, and documents incident thereto.

11.4 Cooperation. Each party to this Agreement shall provide the other party with reasonable access to all relevant documents, data and other information which may be required by the other party for the purpose of preparing tax returns and timely responding to any audit by any taxing jurisdiction. Each party to this Agreement shall cooperate with all reasonable requests of the other party made in connection with contesting the imposition of taxes. Notwithstanding anything to the contrary in this Agreement, neither party to this Agreement shall be required at any time to disclose to the other party any tax return or other confidential tax information.

11.5 Tax Reporting. Seller and Purchaser agree that the Assets subject to this Agreement do not constitute an “applicable asset acquisition” as described under Internal Revenue Code section 1060 and the regulations thereunder, and do not constitute a trade or business in the ordinary sense of the term. Nevertheless, in the event that the Assets are determined by the Internal Revenue Service (or any other regulatory body) to constitute an “applicable asset acquisition,” then both Seller and Purchaser agree and proclaim that any and all transferred assets are limited to reserves in the ground and tangible equipment and are “Class III Assets” and that there is no “goodwill” or “going concern value” attached to the transferred assets. Both Parties agree to the necessary and timely exchange of information required to complete and timely file a Form 8594, and any other form required by the Internal Revenue Service or any other regulatory agency.

ARTICLE 12. CONDITION OF THE ASSETS

12.1 Prior Use of Assets. THE ASSETS AND PROPERTY HAVE BEEN USED OR MAY HAVE BEEN USED FOR EXPLORATION, DEVELOPMENT, PRODUCTION, STORAGE,

TREATMENT, PROCESSING, DISPOSAL, INJECTION AND TRANSPORTATION OF OIL AND GAS AND OTHER SUBSTANCES AND RELATED OIL AND GAS FIELD OPERATIONS. POLUTION, SUBSIDENCE, FRACTURES OR PHYSICAL CHANGES IN THE PROPERTY MAY HAVE OCCURRED AS A RESULT OF SUCH USES. THE ASSETS OR THE PROPERTY ALSO MAY INCLUDE BURIED PIPELINES, WASTES AND OTHER EQUIPMENT, WHETHER OR NOT OF A SIMILAR NATURE, THE LOCATIONS OF WHICH MAY BE HIDDEN OR NOT NOW BE KNOWN OR NOT READILY APPARENT BY A PHYSICAL INSPECTION OF THE AFFECTED ASSETS. HYDROCARBONS AND OTHER SUBSTANCES, INCLUDING HAZARDOUS SUBSTANCES, MAY HAVE COME TO BE RELEASED OR LOCATED ON OR BENEATH THE SURFACE OF THE ASSETS OR THE PROPERTY.

12.2 Assumption of Assets in Present Condition. PURCHASER ACKNOWLEDGES THAT (i) THE CONSUMMATION OF THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY BY PURCHASER SHALL BE SOLELY ON THE BASIS OF ITS OWN INVESTIGATION OF THE PHYSICAL CONDITION OF THE ASSETS AND PROPERTY, INCLUDING, WITHOUT LIMITATIONS, SUBSURFACE CONDITION; (ii) THE ASSETS AND PROPERTY HAVE BEEN USED IN THE MANNER AND FOR THE PURPOSES SET FORTH ABOVE AND THAT PHYSICAL CHANGES TO THE ASSETS AND THE PROPERTY MAY HAVE OCCURRED AS A RESULT OF SUCH USE; AND (iii) NORM AND ASBESTOS OR MAN-MADE MATERIAL FIBERS (COLLECTIVELY “MMMF”) MAY BE PRESENT AT SOME LOCATIONS. PURCHASER ACKNOWLEDGES THAT NORM IS A NATURAL PHENOMENON ASSOCIATED WITH MANY OIL AND GAS FIELDS IN THE UNITED STATES AND THROUGHOUT THE WORLD. PURCHASER SHALL MAKE ITS OWN DETERMINATION OF THIS PHENOMENON AND OTHER CONDITIONS. SELLER DISCLAIMS ANY LIABILITY ARISING OUT OF OR IN CONNECTION WITH ANY PRESENCE OF NORM OR MMMF ON OR AFFECTING THE ASSETS OR THE PROPERTY. IN ACCORDANCE WITH SECTION 9.2, AT CLOSING, PURCHASER SHALL ASSUME THE RISK THAT THE ASSETS OR THE PROPERTY MAY CONTAIN WASTES OR CONTAMINANTS AND ADVERSE PHYSICAL CONDITIONS, INCLUDING THE PRESENCE OF PIPELINES, EQUIPMENT AND OTHER ITEMS OF PERSONAL PROPERTY, TANK BOTTOMS, HEATER TREATER SLUDGE, AND WASTES OR CONTAMINANTS WHICH MAY NOT HAVE BEEN REVEALED BY PURCHASER’S INVESTIGATION. IN ADDITION TO PURCHASER'S OTHER RESPONSIBILITIES UNDER THIS AGREEMENT, UPON AND AFTER CLOSING, ALL RESPONSIBILITY AND LIABILITY RELATED TO DISPOSALS, SPILLS, WASTES, OR CONTAMINATION, OR OTHER ADVERSE PHYSICAL CONDITIONS ON, BELOW, OR RELATED TO OR AFFECTING THE ASSETS OR THE PROPERTY SHALL BE ASSUMED BY PURCHASER AND PURCHASER SHALL, NOTWITHSTANDING WHEN THE BASIS FOR ANY CLAIM, ACTION, SUIT, JUDGMENT (INCLUDING, WITHOUT LIMITATION, THOSE FOR DEATH, PERSONAL INJURY OR PROPERTY DAMAGE) SHALL HAVE OCCURRED OR MAY OCCUR, INDEMNIFY, DEFEND AND HOLD SELLER AND SELLER’S

AFFILIATES AND THEIR RESPECTIVE REPRESENTATIVES HARMLESS THEREFROM PURSUANT TO THIS AGREEMENT.

12.3 Casualty Loss. Assuming Closing occurs and subject to the provisions of Section 13.17, in the event of any material damage by fire or other casualty to any of the Assets after the Effective Time but prior to the Closing ("Casualty Loss"), this Agreement shall remain in full force and effect, and as to each affected Asset, Seller shall at its election either collect (and when collected pay over to Purchaser) or assign to Purchaser any and all insurance claims to the extent and only to the extent covering such damage, and Purchaser shall take title to the affected Asset without reduction in the Purchase Price and Purchaser will be allowed a Price Adjustment for any uncompensated Casualty Loss not to exceed the allocated value of the affected Asset.

ARTICLE 13. MISCELLANEOUS

13.1 Governing Law. This Agreement and all instruments executed in accordance herewith shall be governed by and interpreted in accordance with the laws of the State of Texas, without regard to conflict of law rules that would direct application of the laws of another jurisdiction, except to the extent that it is mandatory that the law of the jurisdiction wherein the Assets are located shall apply. Subject to Section 13.23, in the event of any litigation or other proceeding in connection with this Agreement before or after Closing, the exclusive venue for any such proceeding shall be in a court of competent jurisdiction located in Dallas County, Texas, and the prevailing party shall be entitled to recover its reasonable attorney’s fees and costs incurred therein from the other party, in addition to any damages awarded. Purchaser agrees to accept service of process by mail.

13.2 Entire Agreement. This Agreement, all agreements and instruments executed in connection herewith, and the Confidentiality Agreement dated April 7, 2005, between Maritech Resources, Inc. and Pioneer Natural Resources USA, Inc. (the "Confidentiality Agreement"), and that Site Access Agreement dated June 13, 2005 constitute the entire agreement between the Parties as to the matters herein and supersede all prior agreements, understandings, negotiations and discussions, whether oral or written, of the Parties as to such matters. The Confidentiality Agreement and Site Access Agreement remain in full force and effect in accordance with their respective terms. No supplement, amendment, alteration, modification, waiver or termination of this Agreement shall be binding unless executed in writing by the Parties hereto.

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

13.4 Captions. The captions in this Agreement are for convenience only and shall not be considered a part of or affect the construction or interpretation of any provision of this Agreement.

13.5 Assignability. Purchaser shall not assign this Agreement or any of its rights or obligations hereunder without the prior written consent of Seller, which consent may be withheld or conditioned for any reason and any purported assignment without such consent shall be void, provided that nothing herein shall prevent Purchaser's transfer of all of any part of its interest in the Assets following Closing. Except as otherwise provided herein, this Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective permitted successors and assigns, however, in any event Purchaser shall remain responsible and liable for the performance of its obligations under this Agreement, in addition to that of its respective successors and assigns. All conveyances of all or a portion of the Assets shall expressly recognize and perpetuate the rights and obligations set out in this Agreement.

13.6 Notices. Any notice provided or permitted to be given under this Agreement shall be in writing, and may be served by personal delivery or by registered or certified U.S. mail, addressed to the party to be notified, postage prepaid, return receipt requested. Notice deposited in the mail in the manner hereinabove described shall be deemed to have been given and received on the date of the delivery as shown on the return receipt. Notice served by facsimile is permissible and shall be deemed to have been given and received only if and when actually received by the addressee. For purposes of notice, the addresses of the Parties shall be as follows:

SELLER:

Pioneer Natural Resources USA, Inc.

Attn: Vice President, Land

5205 North O’Connor Blvd., Suite 900

Irving, Texas 75039-3746

Telephone: 972/444-9001

Fax: 972/969-3570

PURCHASER:

Maritech Resources, Inc.

Attn: President

25025 Interstate 45 North

The Woodlands, Texas 77380

Telephone: 281/364-4343

Fax: 281/364-9846

Each party shall have the right, exercised no more frequently than once every six (6) months, upon giving three (3) days prior written notice to the other in the manner hereinabove provided, to change its address for purposes of notice to another appropriate single street address.

13.7 WAIVER OF CONSUMER RIGHTS/DTPA WAIVER. TO THE EXTENT APPLICABLE TO THE ASSETS OR ANY PORTION THEREOF, PURCHASER HEREBY VOLUNTARILY WAIVES THE PROVISIONS OF THE TEXAS DECEPTIVE TRADE PRACTICES ACT (DTPA), CHAPTER 17, SUBCHAPTER E, SECTIONS 17.41 THROUGH

17.63, INCLUSIVE (OTHER THAN SECTION 17.555, WHICH IS NOT WAIVED), TEX. BUS. & COM. CODE, A LAW THAT GIVES CONSUMERS SPECIAL RIGHTS AND PROTECTIONS. IN ORDER TO EVIDENCE ITS ABILITY TO GRANT SUCH WAIVER, PURCHASER HEREBY REPRESENTS AND WARRANTS TO SELLER THAT IT (i) IS IN THE BUSINESS OF SEEKING OR ACQUIRING, BY PURCHASE OR LEASE, GOODS OR SERVICES FOR COMMERCIAL OR BUSINESS USE; (ii) HAS CONSULTED WITH AN ATTORNEY OF PURCHASER’S OWN CHOOSING; (iii) HAS KNOWLEDGE AND EXPERIENCE IN FINANCIAL, BUSINESS AND OIL AND GAS MATTERS THAT ENABLE IT TO EVALUATE THE MERITS AND RISKS OF THE TRANSACTIONS CONTEMPLATED HEREBY; (iv) IS NOT IN A SIGNIFICANTLY DISPARATE BARGAINING POSITION; AND (v) UNDERSTANDS THAT THIS WAIVER IS A MATERIAL AND INTEGRAL PART OF THIS AGREEMENT AND THE CONSIDERATION THEREOF. IN ADDITION, PURCHASER WAIVES ITS RIGHTS UNDER ALL OTHER CONSUMER PROTECTION STATUTES OF TEXAS OR ANY OTHER STATE APPLICABLE TO THIS TRANSACTION THAT MAY BE WAIVED BY THE PARTIES. PURCHASER EXPRESSLY RECOGNIZES THAT THE PURCHASE PRICE FOR WHICH SELLER HAS AGREED TO PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT HAS BEEN PREDICATED UPON THE INAPPLICABILITY OF THE DTPA AND THE WAIVER OF PURCHASER OF ITS RIGHTS UNDER CONSUMER PROTECTION STATUTES AND PURCHASER FURTHER RECOGNIZES THAT SELLER IN DETERMINING TO PROCEED WITH THE ENTERING INTO OF THIS AGREEMENT, HAS EXPRESLLY RELIED ON THIS WAIVER AND THE INAPPLICABILITY OF THE DTPA AND THE CONSUMER PROTECTION STATUTES.

13.8 Expenses. Each party shall be solely responsible for all expenses incurred by it in connection with this transaction (including, without limitation, fees and expenses of its own legal counsel and accountants).

13.9 Severability. Except as otherwise provided herein, the invalidity of any one or more provisions of this Agreement shall not affect the validity of this Agreement as a whole, and in case of any such invalidity, this Agreement shall be construed as if the invalid provision had not been included herein.

13.10 Damages. The Parties waive any and all rights to punitive or exemplary damages resulting from a breach of this Agreement (other than such damages suffered by third Persons for which responsibility is allocated herein between the Parties.)

13.11 No Third Party Beneficiary. This Agreement is not intended to create, nor shall it be construed to create, any rights in any third party under doctrines concerning third party beneficiaries except for the rights of Persons identified in Section 9.2(e).

13.12 Survival. Except as provided in this Section 13.12 , the representations and warranties of the Parties under this Agreement and the other terms and provisions of this Agreement shall not survive the Closing and the execution of the Assignment and Bill of Sale, and shall terminate and cease to be of further force and effect at the Closing. Upon Closing and the execution and

delivery of the Assignment and Bill of Sale all representations, warranties, waivers, disclaimers, releases, covenants, agreements and indemnities contained entirely within and Sections 3.7, 3.8, 3.9(c), 3.10, 3.11, 3.12, 4.14 and 5.1 through 5.12, Articles 9 (with the exception of Section 9.2(f)(i) which terminates on *** and ceases to be of further force and effect), and Articles 11, 12 and 13 (except Section 13.23 if an arbitration is not pending) of this Agreement shall survive the Closing.

13.13 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. If this Agreement is executed via facsimile transmission, the signatures of the Parties shall be deemed original and self-proving for all purposes under law and Purchaser shall send to Seller within two days of execution two original signature pages so that Seller may promptly assemble original complete Agreements for distribution to each Party.

13.14 Not to be Construed Against Drafter. Purchaser and Seller acknowledge that they have read this Agreement, have had the opportunity to review it with an attorney of their respective choice, and have agreed to all its terms. Under these circumstances, Purchaser and Seller agree that the rule of construction that a contract be construed against the drafter shall not be applied in interpreting this Agreement and that in the event of any ambiguity in any of the terms or conditions of this Agreement, including any exhibits hereto and whether or not placed of record, such ambiguity shall not be construed for or against any party hereto on the basis that such party did or did not author the same.

13.15 Waiver of Jury Trial. SELLER AND PURCHASER DO HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, SUIT OR OTHER LEGAL PROCEEDING BASED UPON, ARISING OUT OF OR RELATING TO THIS AGREEMENT THE RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

13.16 Publicity. Seller and Purchaser shall consult with each other with regard to all publicity and other releases and disclosures to be made prior to, at or within ninety (90) days after Closing concerning this Agreement and the transactions contemplated hereby, which are not otherwise expressly permitted by the Confidentiality Agreement, and, except as required by applicable law or the applicable rules or regulations of any governmental body or stock exchange, neither party shall make any disclosure or issue any publicity or other release without the prior written consent of the other party, which consent shall not be unreasonably withheld or delayed.

13.17 Accounting.

(a) Seller shall deliver to Purchaser on or before the fourth Business Day prior to Closing the Preliminary Settlement Statement setting forth any adjustments to the Purchase Price provided for in or required by this Agreement including, without limitation, items such as the Purchase Price, Deposit, expenses, prepaid items, revenue received, Property Taxes, excise and energy taxes, copying and recording fees, to the

extent such information is available or estimated by Seller on or before Closing. The Preliminary Settlement Statement shall be prepared in accordance with this Agreement and with standard industry and accounting practices. In connection with the preparation of the Preliminary Settlement Statement, the Purchase Price shall be (1) increased by (a) the costs and expenses that are attributable to the Assets for the period from the Effective Time to the Closing Date that are paid by Seller (including, but not limited to, Seller's internal cost for administrative overhead for each well operated by Seller at the rate of $800.00 per well per month for wells not otherwise subject to an applicable COPAS overhead rate under an operating agreement and an amount equal to the applicable COPAS overhead rate less any non-operator billed overhead amounts that have actually been received by Seller for wells subject to an applicable COPAS under an operating agreement), and (b) other amounts due Seller and contemplated hereby, and (2) reduced by (a) proceeds received by Seller for hydrocarbons attributable to the Subject Properties produced after the Effective Time, and (b) other amounts due Purchaser and contemplated hereby.

(b) Within 120 days after the Closing, Seller shall prepare, in accordance with this Agreement and with standard industry and accounting practices, and deliver to Purchaser, a final accounting statement showing the proration calculation of credits and payment obligations of Purchaser and Seller hereunder. As soon as reasonably practicable after receipt thereof, Purchaser shall deliver to Seller a written report containing any changes that Purchaser proposes to be made to such statement. The Parties shall use their best efforts to reach agreement (the "Final Accounting") on the final accounting statement on or before the fifteenth (15) Business Day after Purchaser’s receipt of the final accounting statement (such date the "Final Accounting Date", whether or not Seller and Purchaser have agreed on the Final Accounting).

(c) Purchaser shall not have any separate rights to receive production or income, proceeds, receipts and credits with respect to which an adjustment has been made. Except as otherwise provided or addressed or adjusted for in this Agreement, any revenues received or costs and expenses paid by Purchaser after the Final Accounting Date which are attributable to the ownership or operation of the Assets before the Effective Time shall be billed or reimbursed to Seller, as appropriate. Except as otherwise provided or addressed or adjusted for in this Agreement, any revenues received or costs and expenses paid by Seller after the Final Accounting Date which are attributable to the ownership or operation of the Assets after the Effective Time, and not expressly reserved by Seller, shall be billed or reimbursed to Purchaser, as appropriate.

13.18 Operatorship. Seller does not represent to Purchaser that Purchaser will automatically succeed to the operatorship of any given Subject Property as to which Seller is currently the operator. Purchaser recognizes and agrees that Purchaser will be required to comply with applicable operating agreements, unit operating agreements or other similar contracts relating to any elections or other selection procedures in order to succeed Seller as operator.

13.19 Seller's Employees. Purchaser will interview and evaluate in accordance with its normal employment procedures those full time operating personnel employed by Seller in connection with the Subject Properties and identified by Seller in a document received by Purchaser as soon as possible after the execution of this Agreement but in no event later than August 5, 2005. Purchaser will offer employment to those Persons for whom Purchaser in its sole discretion determines a need at such appropriate salaries as Purchaser may determine in its sole discretion. Prior to notification by Seller, Purchaser shall not interview any of Seller’s personnel.

13.20 Time of Performance. Time is of the essence in the performance of all covenants and obligations under this Agreement.

13.21 No Partnership Created. It is not the purpose or intention of this Agreement to create (and it shall not be construed as creating) a joint venture, partnership or any type of association, and the Parties are not authorized to act as agent or principal for each other with respect to any matter related hereto.

13.22 Express Negligence Rule; Conspicuousness. PURCHASER AND SELLER ACKNOWLEDGE THAT THE PROVISIONS IN THIS AGREEMENT THAT ARE SET OUT IN ITALICS, IN BOLD, UNDERLINE OR CAPITALS, OR ANY COMBINATION THEREOF, SATISFY THE REQUIREMENTS FOR THE EXPRESS NEGLIGENCE RULE AND/OR ARE CONSPICUOUS.

13.23. Arbitration. Prior to Closing or termination of this Agreement and unless expressly provided otherwise in this Agreement, Seller may initiate arbitration for any and all disputes arising pertaining to Defects or purported Defects under the terms of this Agreement (“Arbitrable Dispute.”) Such arbitration shall be referred to and resolved through the use of binding arbitration using one (1) arbitrator, in accordance with the Commercial Arbitration Rules of the American Arbitration Association and the Federal Arbitration Act (Title 9 of the United States Code). If there is any inconsistency between this Section 13.23 and any statute or rule, the terms of this Section 13.23 shall control the rights and obligations of the parties. Arbitration shall be initiated within the applicable time limits set forth in this Agreement and not thereafter. It is the intent of the parties that, to the extent practicable, there not be multiple arbitrations and that arbitration shall not delay Closing. If an arbitration is pending on or before the Closing Date, Seller at its sole election may require the occurrence of Closing, subject to post Closing adjustments pursuant to Section 13.17(b) resulting from said arbitration. Subject to the foregoing sentence, if any Defect(s) is referred to arbitration under this Agreement, and the asserted or unresolved value of the Defect(s) would not permit either party to terminate this Agreement under Sections 10.1(d) or (e) or Section 3.11 hereof, or the Agreement has not been so terminated, then the parties shall proceed to Closing, the affected Subject Properties shall be conveyed to Purchaser, and the Purchase Price shall be reduced by an amount equal to the said asserted unresolved value of Defects (not to exceed the allocated value for the affected Subject Properties) from the Notice of Defects to be arbitrated minus the greater of $0.00 or the amount remaining by subtracting from the Threshold (5% of the Purchase Price) the amount agreed by Seller and Purchaser to be the Defect values for Defects not to be arbitrated and previously netted

against the Threshold (the “Withheld Payment”). The Withheld Payment shall be placed in a mutually acceptable escrow account. The Withheld Payment shall be paid as follows:

(i) If the arbitrator decides that any Defect asserted by the Purchaser is not a Defect, then the Withheld Payment with respect to the asserted Defect value shall be paid to the Seller.

(ii) If the arbitrator decides that any one or more of the Defects asserted by the Purchaser is in fact a Defect, then the amount of said Defect value (not to exceed the Allocated Value) as determined by the Arbitrator shall be deducted from the Withheld Payment, and shall be distributed to the Purchaser, and the remainder, if any, shall be distributed to the Seller. The total amount awarded to Purchaser may not exceed the Withheld Payment.

Arbitration shall be initiated by Seller (“Claimant”) serving written notice on the Purchaser (“Respondent”) that the Claimant elects to refer the Arbitrable Dispute to binding arbitration, and that the Claimant has listed three (3) persons, ranked in order of preference, any of whom Claimant accepts as the arbitrator. The Respondent shall respond to the Claimant within three (3) Business Days after receipt of Claimant’s notice, identifying the arbitrator it prefers from Claimant’s list or its list of three (3) potential arbitrators, ranked in order of preference, acceptable to Respondent. The proposed arbitrators of Claimant and Respondent must be nominated in good faith and have not less than ten (10) years recent experience as an oil and gas lawyer if the matter primarily pertains to title or an environmental engineer or lawyer with at least ten (10) years recent oil and gas experience serving oil and gas companies if the matter pertains primarily to environmental matters. The proposed arbitrators must have formal education in the area of dispute. Within two (2) Business Days after receipt of Respondent’s notice, the Claimant and Respondent shall meet and rank the proposed arbitrators. The Respondent and Claimant shall then jointly meet or call the proposed arbitrator highest on the rank list to determine if the said arbitrator is available and interested in serving as the arbitrator. If so, said arbitrator shall be selected. If not, the Claimant and Respondent shall proceed down the list until an arbitrator is selected. Seller and Purchaser shall each pay one-half of the compensation and expenses of the arbitrator who ultimately is selected. All proposed arbitrators must be neutral parties, with no financial stake or interest in the arbitration outcome, who, for the period of five (5) years prior to the Execution Date have not been officers, directors, contractors or employees of the parties or any of their Affiliates. The hearing shall be commenced within ten (10) days after the selection of the arbitrator. The hearing shall occur in Dallas, Texas, or such other locale as is mutually agreed by the parties. The parties and the arbitrator shall proceed diligently and in good faith in order that the decision shall be made as promptly as possible. The arbitrator’s decision must be limited to select and adopt either the Claimant’s position or Respondent’s position on an individual Defect basis. In fulfilling the obligations of the arbitration hereunder the arbitrator shall be bound by the terms of this Agreement. The decision of the arbitrator shall be binding on and non-appealable by the parties. The arbitrator shall not have the authority to grant or award indirect, consequential, punitive or exemplary damages. Seller and Purchaser shall bear their own costs incurred in presenting their respective cases

13.24 Transfer Fees. Purchaser shall pay any fees or other payments required by a third party in order to transfer the Assets.

13.25 Filing and Recording. Purchaser will file or record the various originals of the Assignment and Bill of Sale and other conveyancing documents promptly after Closing at Purchaser's sole cost. If Purchaser fails to promptly record such documents then Seller may, without obligation, record such documents. Purchaser will reimburse Seller for the costs of filing, recording, and other reasonable fees actually incurred by Seller if Seller records or files said documents, such costs or fees to be used in the Final Accounting Settlement. The recording Party will provide either the original or photocopies of the recorded documents, including the recording data, to the non-recording Party promptly.

13.26 Removal of Signs. Seller may either remove its name and signs from the Seller-operated Assets and Property or require Purchaser to do so for those Assets that it will operate. If Seller’s name or signs remain on the Property or Assets after Seller ceases to be operator and Purchaser has become operator, Purchaser must (a) remove any remaining signs and references to Seller promptly, but no later than the time required by applicable regulations or forty-five days after Seller ceases to be operator, whichever occurs first, (b) install signs complying with applicable governmental regulations, including signs showing Purchaser as operator of the Assets it operates, and (c) notify Seller of the removal and installation. Seller reserves a right of access, but not the obligation, to the Assets and Property after it ceases to be operator to remove its signs and name from all Wells, facilities and Property, or to confirm that Purchaser has done so for the Assets operated by Purchaser. If Seller removes signs because Purchaser has not done so, Seller will charge its costs to Purchaser, and Purchaser will pay the invoice within fifteen days of receipt.

13.27 References. In this Agreement, except as expressly provided to the contrary,

(a) References to the singular includes the plural, and vice versa;

(b) References to any Article or Section means an Article or Section of this Agreement;

(c) Reference to any Exhibit or Schedule means an Exhibit or Schedule to this Agreement, all of which are incorporated into and made part of this Agreement;

(d) “Hereunder”, “hereof”, “herein”, and words of similar import are references to this Agreement as a whole and not any particular Section or other provision of this Agreement; and

(e) “Include” and “including” shall mean include and including without limiting the generality of the description proceeding such term.

13.28 Waiver of Louisiana Rights in Redhibition. THE PURCHASER EXPRESSLY WAIVES THE WARRANTY OF FITNESS FOR INTENDED PURPOSES OR GUARANTEE AGAINST HIDDEN OR LATENT REDHIBITORY VICES UNDER LOUISIANA LAW, INCLUDING LOUISIANA CIVIL CODE ARTICLES 2520 (1870) THROUGH 2548 (1870), AND THE WARRANTY IMPOSED BY LOUISIANA CIVIL CODE ARTICLE 2476; WAIVES ALL RIGHTS IN REDHIBITION PURSUANT TO LOUISIANA CIVIL CODE ARTICLE 2520, ET SEQ., ACKNOWLEDGES THAT THIS EXPRESS WAIVER SHALL BE CONSIDERED A MATERIAL AND INTREGAL PART OF THIS SALE AND THE CONSIDERATION THEREOF; AND ACKNOWLEDGES THAT THIS WAIVER HAS BEEN BROUGHT TO THE ATTENTION OF THE PURCHASER AND EXPLAINED IN DETAIL AND THAT PURCHASER HAS VOLUNTARILY AND KNOWINGLY CONSENTED TO THIS WAIVER OF WARRANTY OF FITNESS AND/OR WARRANTY AGAINST REDHIBITORY VICES AND DEFECTS FOR THE ASSETS, TO THE EXTENT THE ASSETS ARE LOCATED IN LOUISIANA.

13.29 Plugging and Abandonment Commitment. As additional consideration for the execution of this Agreement, Purchaser agrees to either plug and abandon a minimum of *** wells situated on the Assets per year or spend a minimum of *** dollars annually on plugging and abandonment expenses pertaining to the Assets commencing in 2006. Purchaser shall provide reasonable access to the Assets and Purchaser’s books and records during normal business hours so that Seller may audit and confirm Purchaser’s performance of this commitment. If Purchaser fails to meet the commitment as set forth herein, Seller may, in addition to any other remedies available at law or equity or under this Agreement, at its sole election exercised from time to time, require Purchaser to place the difference between the actual cost of plugging and abandonment work completed annually and *** dollars into a plugging and abandonment trust under terms and administration acceptable to Seller. This commitment shall run with the land and be binding on Purchaser’s successors and assigns. Notwithstanding anything to the contrary set forth above, any such expenditures made by Purchaser in a given year in excess of *** dollars may be applied to its minimum *** dollar expenditure requirement for any subsequent year.

EXECUTED as of the date first set forth above.

SELLER:

PIONEER NATURAL RESOURCES USA, INC.

By: /s/ A. R. Alameddine

Name: A. R. Alameddine

Title: Executive Vice President - Worldwide Business Development

PURCHASER:

MARITECH RESOURCES, INC.

By: /s/G. M. McCarroll

Name: G. M. McCarroll

Its: President and Chief Operating Officer

SIGNATURE PAGE OF PURCHASE AND SALE AGREEMENT by and between PIONEER NATURAL RESOURCES USA, INC. as Seller and MARITECH RESOURCES, INC. as Purchaser

EXHIBIT "A"

Attached to and made a part of Purchase and Sale Agreement dated July 8, 2005 between Pioneer Natural Resources USA, Inc., as Seller and Maritech Resources, Inc., as Purchaser

LEASE #	LESSOR	LESSEE	LEASE DATE	BOOK	PAGE	DESCRIPTION
L00002580	ST LA 192PP	E C ANDRUS	2/20/1928	192	21	T-23-S, R-21-E, AS TO LANDS MORE PARTICULARLY DESCRIBED IN LEASE.
L00002581	ST LA 1772	GULF REFINING COMPANY	3/23/1950	145	99	T-23-S, R-21-E, TRACT 4469 CONTAINING 2120.92 ACRES
L00002582	ST LA 1773	GULF REFINING COMPANY	3/23/1950	145	102	97.44 ACRES OUT OF TRACT 4470 OF STATE OF LOUISIANA LEASE 1773 LOCATED IN T-23-S, R-21-E DESCRIBED AS RETAINED ACREAGE IN THAT PARTIAL RELEASE OF LEASE DATED 5-8-1974 RECORDED COB 514 FOLIO 288 ENTRY NUMBER 387844
L00002587	ST LA 2243	GREENHILL PETROLEUM CORP	1/1/1994	1198	349	A 3 ACRE CIRCULAR AREA CENTERED AT A POINT HAVING LAMBERT
				1567	541	COORDINATES OF X = 2,324,466315' & Y = 151,224.91' WHICH ENCIRCLES SWD WELL NO. 2, STATE LEAST 192 PP, MORE FULLY SHOWN ON PLAT ATTACHED TO SURFACE LEASE.
L00002615	DE LESSEPS S. MORRISION TRUSTEE, ET AL	GULF REFINING CO	6/22/1953	N/A		ROW FOR 10" PIPELINE FROM EAST TIMBALIER ISLAND TO THE EAST FORK OF BAYO, LAFOURCHE, LAFOURCHE PARISH, LA
L00002629	GULF ENERGY AND MINERALS CO	TENNESSEE GAS PIPELINE CO	9/12/1977	N/A		12" PIPELINE S TIMBALIER, BLOCK 37 PLATFORM C BLOCK 36 & 37 PLATFORM B, SOUTH TIMABLIER AREA
L00002630	GULF OIL CORPORATION	SINCLAIR OIL & GAS COMPANY	10/22/1958	N/A		PIPELINE ROW ACROSS SL 1772, TIMBALIER BAY, LAFOURCHE PARISH, LA
L00002631	GULF OIL CORPORATION	TENNESSEE GAS PIPELINE CO	12/17/1959	N/A		ROW FOR 10" PIPELINE ACROSS SL 1772, LAFOURCHE PARISH, LA
L00002632	ARMY CORPS OF ENGINEERS	GULF REFINING COMPANY	3/13/1953	N/A		ROW TO INSTALL 10" PIPELINE IN TIMBALIER BAY, BELLE PASS, (BAYOU LAFOURCHE) AND AN UNNAMED WATERWAY TRIBUTARY OF BELLE PASS, ABOUT 12 MILES SOUTHERLY FROM LEEVILLE, LA.

LEASE #	LESSOR	LESSEE	LEASE DATE	BOOK	PAGE	DESCRIPTION
L00002633	STATE OF LOUISIANA	GULF REFINING CO	4/22/1976	N/A		50' WIDE ROW OVER SL 1772 BLOCK 6, BAY MARCHAND AREA BLOCKS 15 & 19 SOUTH TIMBALIER AREA. 1489.4 RODS ACROSS STATE-OWNED LANDS AND WATER BOTTOMS
L00002634	LOUISIANA LAND & EXPLORATION CO	GULF OIL CORPORATION	9/4/1964	N/A		PIPELINE ROW COVERING PORTION OF SECTIONS 27, 28, 29, 30, 31 & 32, T-23-S, R-22-E
L00002654	ST LA 2507	GREENHILL PETROLEUM CORP	1/1/1997	1315	120	A 3 ACRE CIRCULAR AREA CENTERED AT A POINT HAVING LAMBERT COORDINATES OF X = 2,320,884 & Y = 147,217 WHICH ENCIRCLES SWD WELL NO 1, STATE LEASE NO 1772, LOCATED IN TIMBALIER BAY FIELD, AS MORE FULLY SHOWN ON PLAT

THE TIMBALIER BAY FIELD IS SUBJECT TO THE FOLLOWING CONTRACTS:

PLATFORM USE AGREEMENT, dated May 21, 2001, by and between Pioneer Natural Resources USA, Inc., and J.M. Huber Corporation EAST TIMBALIER ISLAND RESTORATION PROJECT LETTER AGREEMENT, dated April 6, 1998, by and between State of Louisiana and Pioneer Natural Resources USA, Inc. LETTER AGREEMENT, dated December 7, 1994, by and between Chevron U.S.A. Inc., et al and Greenhill Petroleum Corporation TIMBALIER BAY COMPRESSION AGREEMENT, dated April 1, 1997, by and between Greenhill Petroleum Corporation and Chevron U.S.A. Inc., et al. Sale Agreement dated January 23, 1990 (the "ASA") and that Closing Agreement dated May 9, 1990 by and between Chevron U.S.A., ("Chevron") and Greenhill Petroleum Corporation ("Greenhill")

EXHIBIT A-1

Attached to and made a part of Purchase and Sale Agreement dated July 7, 2005 between Pioneer Natural Resources USA, Inc., as Seller and Maritech Resources, Inc., as Purchaser

FIELD	LEASE/WELLS	COUNTY	STATE	GWI, %	NRI, %	Allocated Value
TIMBALIER BAY	STATE LSE 1772 #038	LAFOURCHE	LA	100.00000	76.99290
TIMBALIER BAY	STATE LSE 1772 #137	LAFOURCHE	LA	100.00000	82.41670
TIMBALIER BAY	STATE LSE 192 PP #148 S2B	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #305	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #185 S2 SAND	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 1772 #042	LAFOURCHE	LA	100.00000	82.41670
TIMBALIER BAY	STATE LSE 1772 #007	LAFOURCHE	LA	100.00000	77.67608
TIMBALIER BAY	STATE LSE 192 PP #187	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #181 6800B	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #222	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 1772 #006	LAFOURCHE	LA	100.00000	82.41670
TIMBALIER BAY	STATE LSE 192 PP #301	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 1772 #031	LAFOURCHE	LA	100.00000	76.99284
TIMBALIER BAY	STATE LSE 1772 #062D	LAFOURCHE	LA	100.00000	82.41670
TIMBALIER BAY	STATE LSE 1772 #009	LAFOURCHE	LA	100.00000	82.41670
TIMBALIER BAY	STATE LSE 192 PP #277	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	TIMBALIER BAY MILKER WELLS	LAFOURCHE	LA	100.00000	72.00000
TIMBALIER BAY	STATE LSE 192 PP #263 ST	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 1772 #076	LAFOURCHE	LA	100.00000	77.67608
TIMBALIER BAY	STATE LSE 1772 #082D	LAFOURCHE	LA	100.00000	82.41670
TIMBALIER BAY	STATE LSE 1772 #084	LAFOURCHE	LA	100.00000	82.41670
TIMBALIER BAY	STATE LSE 192 PP #292	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 1772 #041	LAFOURCHE	LA	100.00000	82.41670
TIMBALIER BAY	STATE LSE 192 PP #157	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 1772 #112	LAFOURCHE	LA	100.00000	78.86190
TIMBALIER BAY	STATE LSE 192 PP #238	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #026	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #072	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #289	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #143	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 1772 #126	LAFOURCHE	LA	100.00000	82.41670
TIMBALIER BAY	STATE LSE 1772 #131	LAFOURCHE	LA	100.00000	82.41670
TIMBALIER BAY	STATE LSE 192 PP #133	LAFOURCHE	LA	100.00000	72.00031

FIELD	LEASE/WELLS	COUNTY	STATE	GWI, %	NRI, %	Allocated Value
TIMBALIER BAY	STATE LSE 192 PP #246	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #315	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #066 3500B	LAFOURCHE	LA	100.00000	72.00040
TIMBALIER BAY	STATE LSE 192 PP #217	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #300	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 1772 #075	LAFOURCHE	LA	100.00000	82.41670
TIMBALIER BAY	STATE LSE 192 PP #198	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #309	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #219	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #291	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 1772 #119	LAFOURCHE	LA	100.00000	82.41670
TIMBALIER BAY	STATE LSE 1772 #114	LAFOURCHE	LA	100.00000	82.41670
TIMBALIER BAY	STATE LSE 192 PP #266	LAFOURCHE	LA	100.00000	72.00040
TIMBALIER BAY	STATE LSE 192 PP #269	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #297	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #312	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 1772 #102	LAFOURCHE	LA	100.00000	82.41670
TIMBALIER BAY	STATE LSE 192 PP #052D	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #250	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #189	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #313	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #216	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #221	LAFOURCHE	LA	100.00000	72.44836
TIMBALIER BAY	STATE LSE 192 PP #240D	LAFOURCHE	LA	100.00000	72.44836
TIMBALIER BAY	STATE LSE 192 PP #284	LAFOURCHE	LA	100.00000	72.44836
TIMBALIER BAY	STATE LSE 192 PP #245	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #283	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #186	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #322	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #253	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #259	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #321	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #272	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #308	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #298	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #179 ST	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #006	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #017	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #027	LAFOURCHE	LA	100.00000	72.00031

FIELD	LEASE/WELLS	COUNTY	STATE	GWI, %	NRI, %	Allocated Value
TIMBALIER BAY	STATE LSE 192 PP #045	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #078	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #104	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #212	LAFOURCHE	LA	100.00000	72.00003
TIMBALIER BAY	STATE LSE 192 PP #113	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #285	LAFOURCHE	LA	100.00000	72.44836
TIMBALIER BAY	STATE LSE 192 PP #117	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #123	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #155	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #174	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #295	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #302	LAFOURCHE	LA	100.00000	72.00310
TIMBALIER BAY	STATE LSE 192 PP #291	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #191	LAFOURCHE	LA	100.00000	72.00310
TIMBALIER BAY	STATE LSE 192 PP #219	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #246	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #198	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 1772 #114 ST BP1	LAFOURCHE	LA	100.00000	82.41670
TIMBALIER BAY	STATE LSE 192 PP #302 BP2	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #302 BP3	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #302 BP4	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #302 BP1	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #308	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #313 BP3	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #321 BP2	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #322 BP1	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #322 BP2	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #309 (BP3)	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #307	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #174 BP1 LS	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #295 BP1	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 1772 #137 BP1	LAFOURCHE	LA	100.00000	82.41670
TIMBALIER BAY	STATE LSE 192 PP #300 BP3	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 1772 #137 BP3	LAFOURCHE	LA	100.00000	82.41670
TIMBALIER BAY	STATE LSE 192 PP #045 BP1	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #285	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #045 BP2	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #117 (PNP 4/01)	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 1772 #126 BP2	LAFOURCHE	LA	100.00000	82.41670

FIELD	LEASE/WELLS	COUNTY	STATE	GWI, %	NRI, %	Allocated Value
TIMBALIER BAY	STATE LSE 192 PP #143 BP2	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 1772 #128 BP2	LAFOURCHE	LA	100.00000	82.41670
TIMBALIER BAY	STATE LSE 192 PP #174 BP3	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #174 BP2 SS	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #277 BP2	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #253 ST BP3	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #253 ST BP2	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #250 BP1	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #250 BP2	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #253 ST BP1	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #143 BP1	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #209 (BP1)	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #300 BP2	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #298 BP1	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #298 BP5	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #298 BP4	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #298 BP3	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #298 BP2	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 1772 #137 BP2	LAFOURCHE	LA	100.00000	82.41670
TIMBALIER BAY	STATE LSE 192 PP #207	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 1772 #084 BP2	LAFOURCHE	LA	100.00000	82.41670
TIMBALIER BAY	STATE LSE 192 PP #123 (BP1)	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 1772 #031	LAFOURCHE	LA	100.00000	82.41670
TIMBALIER BAY	STATE LSE 192 PP #157 BP1	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 1772 #042 (BP1)	LAFOURCHE	LA	100.00000	82.41670
TIMBALIER BAY	STATE LSE 192 PP #295 BP2	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #187 (BP1)	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #226 (BP1)	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #190 ST	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 1772 #046 (BP1)	LAFOURCHE	LA	100.00000	82.41670
TIMBALIER BAY	STATE LSE 1772 #007	LAFOURCHE	LA	100.00000	82.41670
TIMBALIER BAY	STATE LSE 1772 #140	LAFOURCHE	LA	100.00000	82.41670
TIMBALIER BAY	STATE LSE 192 PP #324	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 1772 #140 BP1	LAFOURCHE	LA	100.00000	82.41670
TIMBALIER BAY	STATE LSE 192 PP #320	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #324 BP2	LAFOURCHE	LA	100.00000	72.00031
TIMBALIER BAY	STATE LSE 192 PP #324 BP1	LAFOURCHE	LA	100.00000	72.00031

*** Indicates material has been omitted pursuant to a Confidential Treatment Request filed with the Securities and Exchange Commission. A complete copy of this Exhibit, and the agreement to which it is attached, has been filed with the Securities and Exchange Commission.

EXHIBIT "A.1"

Attached to and made a part of Purchase and Sale Agreement dated July 8, 2005 between Pioneer Natural Resources USA, Inc., as Seller and Maritech Resources, Inc., as Purchaser

LEASE #	LESSOR	LESSEE	LEASE DATE	ALLOCATED VALUE
L00002580	ST LA 192PP	E C Andrus	2/20/1928	$***
L00002581	ST LA 1772	Gulf Refining Company	2/23/1950	$***
L00002582	ST LA 1773	Gulf Refining Company	2/23/1950	$***
L00002587	ST LA 2243	Greenhill Petroleum Corp	1/1/94	$***
L00002654	ST LA 2507	Greenhill Petroleum Corp	1/1/1997	$***
Total Allocated Value				$49,100,000

EXHIBIT "B"

TO THAT CERTAIN PURCHASE AND SALE AGREEMENT BY AND BETWEEN PIONEER NATURAL RESOURCES USA, INC. AND MARITECH RESOURCES, INC.

[TO BE CONFORMED OT THE PURCHASE AND SALE AGREEMENT]

ASSIGNMENT AND BILL OF SALE

STATE OF LOUISIANA »

» KNOW ALL MEN BY THESE PRESENTS

PARISH OF ________ »

This Assignment and Bill of Sale (the “Assignment”) dated ________________, 2005 is from Pioneer Natural Resources USA, Inc., a Delaware corporation, having a place of business at 5205 N. O’Connor Blvd., Suite 900, Irving, Texas 75039-3746 (“Assignor”) to __________________ a ____________________ corporation with an address of __________________________________________________ (“Assignee”).

That, for and in consideration of the sum of Ten Dollars ($10.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Assignor, subject to the terms hereof, does hereby ASSIGN, TRANSFER and CONVEY, effective as of April 1, 2005 at 7:00 a.m., (the “Effective Time”), unto Assignor, all of Assignor’s right, title, and interest, if any, of Assignee as of the Effective Time in and to the following described assets, less and except the Excluded Assets (the “Assets”):

(a) The oil and gas leases and interests, described on Exhibit “A” or appurtenant to the wells described on Exhibit “A-1” to the extent and only to the extent the same pertain to the area within the boundaries of the lands covered, as of the Effective Time, by the oil and gas leases listed on Exhibit "A" (hereinafter referred to as the “Lands”), together with Assignor’s interest in any pooled, communitized or unitized acreage to the extent and only to the extent any such wells are a part thereof and all of the rights appurtenant thereto (the “Subject Properties”);

(b) To the extent, and only to the extent, located on the Lands or attributable or allocable to the Subject Properties: (1) all wells (including, but not limited to, the wells described in Exhibit "A-1,” and all other oil, gas, injection, disposal and water wells whether active, idle, plugged or unplugged and whether abandoned or not) (“Wells”), and well equipment (surface and subsurface), all materials,

fixtures, platforms, facilities, pumps, equipment, leased equipment (if assignable without penalty, cost or liability), electrical distribution systems, tank batteries, flowlines, gathering pipelines, gas facilities, gathering systems, storage, distribution, treating, processing and disposal facilities and tanks, tools, buildings, compressors, and all other real or tangible personal property and fixtures which are located on the Lands and directly used in connection with the present production, disposal, gathering, storing, measuring, compression, injection, treating, operating, maintaining, marketing or transportation of production and substances from the Subject Properties and Wells or lands pooled or unitized therewith, and all other improvements located on and which were acquired for or are used in connection with the operation of the Subject Properties, (“Equipment”), but specifically excluding portable tools, inventory, and vehicles not used exclusively on or exclusively appurtenant to the Subject Properties or the Wells, and personal property not solely appurtenant to the Wells or temporarily located on the Subject Properties; (2) the net revenue from all oil, gas, mineral and other hydrocarbon substances produced on or after the Effective Time (as adjusted in this Assignment); (3) to the extent the same are assignable or transferable by Assignor and subject to the rights of third parties, all contracts insofar as they relate to the Subject Properties, Wells and Equipment, including, without limitation, all orders, unit orders, title opinions and documents, abstracts of title, leases, deeds, unitization agreements, pooling agreements, operating agreements, assets sale agreements, closing agreements, division of interest statements, participation agreements, license agreements, farmin and farmout agreements, oil and gas leases, assignments, compression and/or processing agreements, and oil and gas sales, purchase, transportation, gathering and processing contracts and agreements; (4) all surface leasehold and surface fee estates (but only to the extent overlying and within the boundaries of the Lands or used solely in connection with the Subject Properties), easements, rights-of-way, licenses, authorizations, permits and similar rights and interests, limited by and subject to the rights of third parties and regulatory agencies; (5) to the extent assignable by Assignor without liability, penalty or cost, all seismic data (2D and 3D) in the possession of Assignor as of the Execution Date and to the extent not subject to third-party restrictions on transfers, as well as engineering and production data and records, geological and geophysical data, including, but not limited to, accounting files, marketing files, environmental files and records, regulatory files and records, non-privileged legal records and files, lease files, land files, title and lease records and opinions, operating files, well files, oil and gas sales contract files, gas processing files, logs, test data, production histories, division order files, abstracts, title files and materials (the “Records”), and all rights thereto, limited by and subject to the rights of third parties and applicable Related Agreements; (6) mineral, royalty and overriding royalty interests, together with any other mineral rights, to the extent and only to the extent pertaining to both the Subject Properties and the area underlying and within the boundaries of the Lands; and (7) all other rights, privileges, benefits and powers conferred upon the owner and holder of interests in the Subject Properties.

It is the intent of the Parties that this Assignment shall, except for the Excluded Assets (as defined in this Assignment), cover any and all of Assignor’s right, title and interest in and directly pertaining to the Subject Properties, irrespective of whether those properties and rights are set forth on the exhibits and schedules attached hereto.

1.3 Excluded Assets. Notwithstanding anything in this Assignment to the contrary, the Assets do not include and Assignee agrees and acknowledges that Assignor has reserved and retained from the Assets and hereby reserves and retains unto itself any and all rights, titles and interests in and to (a) fee, leasehold, mineral fee, royalty, overriding royalty, and other interests to the extent pertaining to the any area not within the boundaries of the Leases as of the Effective Time and not expressly included under Section 1.2(a) or (b) above; (b) seismic, geologic and geophysical records, information, and interpretations relating to the Assets not included in Section 1.2(b)(5) above; (c) any and all records which consist of previous, contemporaneous or subsequent offers, discussions, or analyses associated with the purchase, sale or exchange to a third party by Assignor of the Assets or any part thereof, proprietary information, personnel information, tax information, information covered by a non-disclosure obligation of a third party and information or documents covered by a legal privilege; (d) originals or copies of Records retained by Assignor; (e) all claims, rights and causes of action of Assignor against third parties, asserted and unasserted, known and unknown relating to the period prior to the Effective Time relating to the Assets; (f) trucks, communication equipment, computers and related switching equipment and software; (g) all pipelines which are not used solely for production from the Lands; (h) all oil in storage at the Effective Time or produced prior to the Effective Time; and (i) items or interests excluded or removed elsewhere in or pursuant to this Assignment;(j) any refund of taxes, costs or expenses borne by Assignor or Assignor’s predecessors in title attributable to the period of time prior to the Effective Time; (k) any and all proceeds receivable from the settlement or final adjudication of contract disputes with lessors, co-owners or operators of the Assets or with purchasers, gatherers processors or transporters of hydrocarbons from or attributable to the Assets, including without limitation, settlement of royalty, take-or-pay, pricing or volume adjustments disputes, insofar as said proceeds are attributable to periods of time prior to the Effective Time (collectively, the "Excluded Assets").

II.

For purposes of Articles III and Article IV of this Assignment, “Property”, “Properties”, “PROPERTY” or “PROPERTIES” mean the real property or properties, surface and subsurface, in which and on which the Assets, or any portion thereof, are located, operated, pertain, or relate and includes the land, if any, described or referred to in Exhibit “A”.

III.

a. Prior Use of Assets. ASSIGNEE ACKNOWLEDGES AND AGREES THAT: THE ASSETS AND PROPERTY HAVE BEEN USED OR MAY HAVE BEEN USED FOR EXPLORATION, DEVELOPMENT, PRODUCTION, STORAGE, TREATMENT, PROCESSING, DISPOSAL, INJECTION AND TRANSPORTATION OF OIL AND GAS AND OTHER SUBSTANCES AND RELATED OIL AND GAS FIELD OPERATIONS. POLLUTION, SUBSIDENCE, FRACTURES OR PHYSICAL CHANGES IN THE PROPERTY MAY HAVE OCCURRED AS A RESULT OF SUCH USES. THE ASSETS OR THE PROPERTY ALSO MAY INCLUDE BURIED PIPELINES, WASTES AND OTHER EQUIPMENT, WHETHER OR NOT OF A SIMILAR NATURE, THE LOCATIONS OF WHICH MAY BE HIDDEN OR NOT NOW BE KNOWN OR NOT READILY APPARENT BY A PHYSICAL INSPECTION OF THE AFFECTED ASSETS. HYDROCARBONS AND OTHER SUBSTANCES, INCLUDING HAZARDOUS SUBSTANCES, MAY HAVE COME TO BE RELEASED OR LOCATED ON OR BENEATH THE SURFACE OF THE ASSETS OR THE PROPERTY.

b. Assumption of Assets in Present Condition. ASSIGNEE ACKNOWLEDGES AND AGREES THAT (i) ASSIGNEE HEREBY ACCEPTS THE ASSETS SOLELY ON THE BASIS OF ITS OWN INVESTIGATION OF THE PHYSICAL CONDITION OF THE ASSETS AND PROPERTY INCLUDING, WITHOUT LIMITATION, SURFACE AND SUBSURFACE CONDITION; (ii) THE ASSETS AND PROPERTY HAVE BEEN USED IN THE MANNER AND FOR THE PURPOSES SET FORTH ABOVE AND THAT PHYSICAL CHANGES TO THE ASSETS AND THE PROPERTY MAY HAVE OCCURRED AS A RESULT OF SUCH USE; (iii) NATURALLY OCCURRING RADIOACTIVE MATERIALS (“NORM”) AND MAN-MADE MATERIAL FIBERS (“MMMF”) MAY BE PRESENT ON OR IN THE ASSETS; (iv) NORM IS A NATURAL PHENOMENON ASSOCIATED WITH MANY OIL AND GAS FIELDS IN THE UNITED STATES AND THROUGHOUT THE WORLD; (v) ASSIGNEE HAS MADE ITS OWN DETERMINATION OF THIS PHENOMENON AND OTHER CONDITIONS AFFECTING THE ASSETS AND PROPERTY; (vi) ASSIGNOR DISCLAIMS ANY LIABILITY ARISING OUT OF OR IN CONNECTION WITH ANY PRESENCE OF NORM OR MMMF ON OR AFFECTING THE ASSETS; (vii) ASSIGNEE ASSUMES THE RISK THAT THE ASSETS AND OR PROPERTY MAY CONTAIN OR BE BURDENED OR AFFECTED BY WASTES OR CONTAMINANTS AND ADVERSE PHYSICAL CONDITIONS, INCLUDING THE PRESENCE OF PIPELINES, EQUIPMENT AND OTHER ITEMS OF PERSONAL PROPERTY AND WASTES OR CONTAMINANTS, TANK BOTTOMS, HEATER TREATER SLUDGE AND WASTES WHICH MAY NOT HAVE BEEN REVEALED BY ASSIGNEE’S INVESTIGATION; (viii) ALL RESPONSIBILITY AND LIABILITY RELATED TO DISPOSALS, SPILLS, WASTES OR CONTAMINATION, OR OTHER ADVERSE PHYSICAL CONDITIONS ON, BELOW, OR RELATED TO OR AFFECTING THE ASSETS AND/OR PROPERTY ARE ASSUMED BY ASSIGNEE NOTWITHSTANDING WHEN THE BASIS FOR ANY CLAIM, ACTION, SUIT, JUDGMENT (INCLUDING, WITHOUT LIMITATION, THOSE FOR DEATH, PERSONAL INJURY OR PROPERTY DAMAGE) SHALL HAVE OCCURRED, WHETHER BEFORE, ON OR AFTER THE EFFECTIVE TIME AND ASSIGNEE

SHALL INDEMNIFY, DEFEND AND HOLD HARMLESS ASSIGNOR AS PROVIDED IN ARTICLE IV BELOW; (ix) ASSIGNEE HAS INSPECTED OR WAIVED ITS RIGHT TO INSPECT THE RECORDS AND ASSETS FOR ALL PURPOSES AND SATISFIED ITSELF AS TO THE PHYSICAL AND ENVIRONMENTAL CONDITION OF THE ASSETS AND PROPERTY, BOTH SURFACE AND SUBSURFACE, INCLUDING BUT NOT LIMITED TO CONDITIONS SPECIFICALLY RELATED TO THE PRESENCE, RELEASE OR DISPOSAL OF HAZARDOUS SUBSTANCES; (x) IN ACCEPTING THIS ASSIGNMENT, ASSIGNEE IS RELYING SOLELY UPON ITS OWN INSPECTION OF THE ASSETS AND PROPERTY, AND, ASSIGNEE ACCEPTS ALL OF THE SAME IN THEIR “AS IS, WHERE IS” CONDITION WITH ALL FAULTS; (xi) ASSIGNOR HAS MADE AND MAKES NO WARRANTY OR REPRESENTATION, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, AS TO THE ACCURACY OR COMPLETENESS OF ANY DATA, REPORTS, RECORDS, PROJECTIONS, INFORMATION OR MATERIALS NOW, HERETOFORE OR HEREAFTER FURNISHED OR MADE AVAILABLE TO ASSIGNEE IN CONNECTION WITH THIS ASSIGNMENT, INCLUDING, WITHOUT LIMITATION, ANY DESCRIPTION OF THE ASSETS, PRICING ASSUMPTIONS, OR QUALITY OR QUANTITY OF HYDROCARBON RESERVES (IF ANY) ATTRIBUTABLE TO THE ASSETS OR THE ABILITY OR POTENTIAL OF THE ASSETS TO PRODUCE HYDROCARBONS OR THE ENVIRONMENTAL CONDITION OF THE ASSETS OR ANY OTHER MATTERS CONTAINED IN CONFIDENTIAL INFORMATION OR ANY OTHER MATERIALS FURNISHED OR MADE AVAILABLE TO ASSIGNEE BY ASSIGNOR OR BY ASSIGNOR’S, AGENTS OR REPRESENTATIVES; AND (xii) ANY AND ALL SUCH DATA, RECORDS, REPORTS, PROJECTIONS, INFORMATION AND OTHER MATERIALS FURNISHED BY ASSIGNOR OR BY ASSIGNOR’S AGENTS OR REPRESENTATIVES OR OTHERWISE MADE AVAILABLE TO ASSIGNEE ARE AND WERE PROVIDED TO ASSIGNEE AS A CONVENIENCE, AND SHALL NOT CREATE OR GIVE RISE TO ANY LIABILITY OF OR AGAINST ASSIGNOR, AND THAT ANY RELIANCE ON OR USE OF THE SAME SHALL BE AT ASSIGNEE’S SOLE RISK.

IV.

a. Claims Defined. As used in this Assignment “claims”, “CLAIMS”, “claims” or “Claims” shall include costs, expenses, obligations, claims, demands, lawsuits, causes of action, liabilities, damages, fines, penalties and judgments of any kind or character, whether matured or unmatured, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, known or unknown, and all costs and fees (including without limitation, interest, attorneys’ fees, costs of experts, court costs and costs of investigation) incurred in connection therewith, including, but not limited to claims arising from or directly or indirectly related to personal injury, death, property damage or loss, contract, royalty, operating, suspense and capital obligations attributable to the Assets.

b. Intent. Subject to Assignor’s special title warranty in Article V herein and Assignor’s limited indemnity of Assignee contained in Section 9.2(f) of the Purchase and Sale Agreement (described below), and without diminishing the express provisions of this Article IV, it is the intent of Assignee and Assignor that, to the maximum extent allowed by law, Assignor, Assignor's Affiliates and their respective Representatives be indemnified, defended and held harmless by Assignee at all times upon and after the Effective Time in a manner so that Assignor and its Affiliates and their respective Representatives, will be protected as if Assignor has never at any time owned, used or operated the Assets, Lands, Subject Properties or the Property or any interest therein or pertaining thereto, in whole or in part. If any provision in this Article IV is invalid or not allowed by Law, it is deemed modified to the limited and minimum extent to conform to law to provide Assignor, and Assignor's Affiliates and their respective Representatives the greatest possible protection and benefit allowed by Law.

c. (i) EXCEPT FOR ASSIGNOR’S SPECIAL WARRANTY OF TITLE AS PROVIDED IN ARTICLE V BELOW, IT IS THE EXPRESS INTENT AND AGREEMENT OF ASSIGNOR AND ASSIGNEE THAT ASSIGNEE SHALL ACCEPT THE ASSETS AND PROPERTY IN THEIR "AS IS” AND “WHERE IS" CONDITION, SUBJECT TO AND WITH ANY AND ALL FAULTS, DEFECTS, DEFICIENCIES, IRREGULARITIES AND CLAIMS RELATED OR ATTRIBUTABLE IN ANY MANNER THERETO, INCLUDING, WITHOUT LIMITATION, REDHIBITORY VICES, TITLE DEFECTS, ENVIRONMENTAL DEFECTS, SUBSIDENCE, DECAY, CESSATIONS IN PRODUCTION OR ANY OTHER MATTER AFFECTING IN ANY RESPECT THE TITLE OR PHYSICAL CONDITION OF, OR THE RIGHT TO OWN, USE, OPERATE, POSSESS, DEVELOPE OR ENJOY, THE ASSETS OR THE PROPERTY, WHETHER KNOWN OR UNKNOWN, LIQUIDATED OR UNLIQUIDATED, FIXED OR CONTINGENT, DIRECT OR INDIRECT.

(ii) At, upon and after the date hereof and without further action or documentation, but subject to Assignor’s special warranty of title contained in Article V below and Assignor’s limited indemnity obligations under Section 9.2(f) of the Purchase and Sale Agreement (described below), ASSIGNEE (1) shall assume, be responsible for and comply with all duties and obligations, express or implied, arising at any time with respect to the Assets, including, without limitation (i) those arising under or by virtue of any Related Agreements, lease, contract, agreement, document, permit, law, statute, rule, regulation or order of any governmental authority or court (specifically including, without limitation, any governmental request or other requirement to plug, re-plug or abandon or re-abandon any well of whatsoever type, status or classification, or take any restoration, clean-up, remedial or other action with respect to the Assets or Property), (ii) preferential rights to purchase, and (iii) third party consents; (2) shall assume, be responsible for and pay all Claims affecting or arising, directly or indirectly, at any time in connection with the Assets, including, without

limitation, claims for personal or property injury or damage, restoration, environmental cleanup, remediation, or compliance, or for any other relief, arising directly or indirectly from or incident to, the use, ownership, occupation, operation, maintenance or abandonment of or production from the Assets, or condition of the Assets or Property, whether latent or patent, including, without limitation, contamination of property or premises with Naturally Occurring Radioactive Materials (“NORM”), and whether or not arising solely from or contributed to by the negligence in any form, whether active or passive, or of any kind or nature, of Assignor or its predecessors in title or their respective Affiliates agents, employees or contractors; and (3) SHALL, TO THE MAXIMUM EXTENT ALLOWED BY LAW, DEFEND, INDEMNIFY AND HOLD ASSIGNOR HARMLESS FROM ANY AND ALL CLAIMS ARISING, ASSERTED OR DUE AT ANY TIME, WHETHER BEFORE, ON OR AFTER THE EFFECTIVE TIME, IN CONNECTION WITH OR RELATED TO THE FOREGOING.

(iii) FURTHER, AT, UPON AND AFTER CLOSING, AND WITHOUT FURTHER DOCUMENTATION AND WITHOUT LIMITING THE GENERALITY OF THE FOREGOING PROVISIONS OF THIS ARTICLE IV, ASSIGNEE SHALL INDEMNIFY, DEFEND AND HOLD HARMLESS ASSIGNOR (SUBJECT TO ASSIGNOR’S SPECIAL WARRANTY OF TITLE IN ARTICLE V BELOW AND ASSIGNOR’S LIMITED INDEMNITY UNDER SECTION 9.2(f) OF THE PURCHASE AND SALE AGREEMENT) FROM ANY AND ALL CLAIMS ARISING AT ANY TIME, WHETHER BEFORE, ON OR AFTER THE EFFECTIVE TIME, MADE BY ANY PERSON AND ARISING OUT OF OR RESULTING FROM:

(1) THE REVIEW, INSPECTION AND ASSESSMENT OF THE ASSETS OR THE PROPERTY BY ASSIGNEE;

(2) THE OWNERSHIP OR OPERATION OF THE ASSETS OR PROPERTY BY OR ON BEHALF OF ASSIGNOR OR ITS PREDECESSORS IN TITLE OR ACTS OR OMISSIONS BY OR ON BEHALF OF ASSIGNOR OR ITS PREDECESSORS IN TITLE IN CONNECTION WITH OR PERTAINING TO THE ASSETS OR PROPERTY;

(3) THE OWNERSHIP OR OPERATION OF THE ASSETS OR PROPERTY BY OR ON BEHALF OF ASSIGNEE OR ITS SUCCESSORS IN TITLE OR THE ACTS OR OMISSIONS BY OR ON BEHALF OF ASSIGNEE OR ITS SUCCESSORS IN TITLE IN CONNECTION WITH OR PERTAINING TO THE ASSETS OR PROPERTY;

(4) THE ACTS OR OMISSIONS OF THIRD PARTIES RELATING TO AN ERROR IN DESCRIBING THE ASSETS;

(5) RIGHTS AND OBLIGATIONS OF THE PARTIES OR THIRD PARTIES UNDER RELATED AGREEMENTS;

(6) FAILURE BY THIRD PARTIES TO APPROVE OR CONSENT TO ANY ASPECT OF THIS TRANSACTION OR THE SALE OR TRANSFER OF THE ASSETS OR ANY PORTION THEREOF;

(8) PAYMENTS, ROYALTIES OR DISBURSEMENTS PAYABLE BY ASSIGNEE TO THIRD PARTIES WITH REGARD TO THE ASSETS;

(10) REMEDIATION ACTIVITIES, INCLUDING DAMAGES INCURRED BY ASSIGNEE DURING OR ARISING FROM REMEDIATION ACTIVITIES RELATING TO THE ASSETS OR PROPERTY; AND

(11) INABILITY OR FAILURE TO OBTAIN THE TRANSFER OF A PERMIT OR AUTHORIZATION OR THE INABILITY TO OBTAIN A PERMIT OR AUTHORIZATION RELATING TO THE ASSETS.

d. Assignee’s Release of Assignor. Subject to Assignor’s special warranty of title contained in Article V below and its indemnification obligations under Section 9.2(f) of the Purchase and Sale Agreement, and without further action or documentation, Assignee releases and discharges, to the maximum extent allowed by law (but no further), Assignor and Assignor's Affiliates and their respective Representatives from all Claims relating in any way to the Assets, the Property or the transactions contemplated by this Assignment, regardless of when or how the Claims arose or

arise, or whether the Claims were foreseeable or unforeseeable. Assignee’s release of Assignor and its Affiliates and their respective Representatives includes Claims resulting in any way from the negligence or strict liability of Assignor and its Affiliates and their respective Representatives, whether the negligence or strict liability is active, passive, joint, concurrent, or sole, but expressly excluding willful misconduct. There are no exceptions to Assignee’s release of Assignor and its Affiliates and their respective Affiliates, and this release is binding on Assignee and its successors and assigns. ASSIGNEE EXPRESSLY WARRANTS AND REPRESENTS AND DOES HEREBY STATE AND REPRESENT THAT NO PROMISE OR AGREEMENT WHICH IS NOT HEREIN EXPRESSED HAS BEEN MADE TO ASSIGNEE IN EXECUTING THIS ASSIGNMENT OR AGREEING TO THIS RELEASE AND THAT ASSIGNEE IS NOT RELYING UPON ANY STATEMENT OR REPRESENTATION OF ASSIGNOR OR ANY AFFILIATE OF ASSIGNOR OR ANY OF THEIR RESPECTIVE REPRESENTATIVES. ASSIGNEE HAS BEEN REPRESENTED BY LEGAL COUNSEL AND SAID COUNSEL HAS READ AND EXPLAINED TO ASSIGNEE THE ENTIRE CONTENTS OF THIS ASSIGNMENT AND THIS RELEASE AND EXPLAINED THE LEGAL CONSEQUENCES THEREOF.

e. Retroactive Effect. Assignee acknowledges that its obligations to release, indemnify, defend, and hold Assignor and its Representatives harmless apply to matters occurring or arising before, on and after the Effective Time to the extent provided in this Assignment.

f. Inducement to Assignor. Assignee acknowledges that it evaluated its obligations under this article before it determined and submitted its bid for the Assets and that its assumption of these obligations is a material inducement to Assignor to enter into this Assignment.

g. Inurement. This Assignment is made subject to governmental and regulatory agency laws, rules and regulations and subject to all the terms and the express and implied covenants and conditions of the leases described in said Exhibit “A”. Further, the terms, covenants, indemnities, releases, requirements, obligations and conditions of this Assignment shall be binding upon and shall inure to the benefit of the Assignor and the Assignee and their respective successors and assigns, and such terms, covenants, indemnities, releases, requirements, obligations and conditions of this Assignment are effective as stated, shall be covenants running with the lands and the leasehold estates herein assigned and with each transfer or assignment of said lands and leasehold estates, whether or not the terms, covenants, indemnities, releases, requirements, obligations and conditions of this Assignment are memorialized in future assignments or other instruments. No future action, agreement or assignment pertaining, all or in part, to this Assignment, the Assets or any rights thereto or thereunder by Assignee or any of its successors or assigns shall relieve Assignee or any of its successors or assigns of any responsibility or liability for the performance of Assignee’s obligations

under this Assignment unless expressly agreed to in writing by an authorized officer of Assignor.

h. Benefit of Indemnities. The benefit of the indemnities and release provided in this Assignment by Assignee to Assignor shall extend to Assignor and its corporate parent, subsidiaries and respective affiliates and any person who at any time has served or is serving as a director, officer, employee, consultant (including, but not limited to Randall & Dewey and its respective partners or affiliated entities and their respective directors, officers and employees) or agent thereof (each a “Representative”), and each of their respective heirs, executors, successors and assigns, and shall apply to all claims subject to indemnity hereunder, including, to the maximum extent allowed by law (and no further), those based on negligence of any nature, including sole negligence, simple negligence, concurrent negligence, active negligence, passive negligence, strict liability or fault of Assignor (or any other indemnified party or Representative) or any other theory of liability or fault, whether of law (whether common or statutory) or in equity.

Special Warranty of Title and Disclaimer of Warranties. All equipment and other personal property forming any part of the Assets is hereby transferred subject to normal wear and tear and without warranties of any kind whatsoever, whether statutory, express or implied, and WITH NO WARRANTY AS TO MERCHANTABILITY, FITNESS OR SUITABILITY FOR ANY PARTICULAR PURPOSE. THIS ASSIGNMENT IS MADE WITHOUT ANY EXPRESS, IMPLIED, STATUTORY OR OTHER WARRANTY OR REPRESENTATION WHATSOEVER EXCEPT THAT SUBJECT TO THE LIMITATIONS SET FORTH IN THE PURCHASE AND SALE AGREEMENT ASSIGNOR WILL DEFEND THE “SUBJECT PROPERTIES” CONVEYED HEREUNDER FROM AND AGAINST ALL PERSONS CLAIMING THE “SUBJECT PROPERTIES” OR ANY PART THEREOF, BY THROUGH OR UNDER ASSIGNOR, BUT NOT OTHERWISE.

VI.

a. Governing Law. This Assignment executed in accordance herewith shall be governed by and interpreted in accordance with the laws of the State of Texas, without regard to conflict of law rules that would direct application of the laws of another jurisdiction, except to the extent that it is mandatory that the law of the jurisdiction wherein the Assets are located shall apply. In the event of any litigation or other proceeding in connection with this Assignment, the venue for any such proceeding shall be in a State of Texas or federal court of competent jurisdiction located in Dallas County, Texas, and the prevailing party shall be entitled to recover its reasonable attorney’s fees and costs incurred therein from the other party, in addition to any damages awarded.

b. Captions. The captions in this Assignment are for convenience only and shall not be considered a part of or affect the construction or interpretation of any provision of this Assignment.

c. DTPA Waiver. To the extent applicable to the Assets or any portion thereof, each Assignee hereby waives the provisions of the Texas Deceptive Trade Practices Act, Chapter 17, Subchapter E, Sections 17.41 through 17.63, inclusive (other than Section 17.555, which is not waived), Tex. Bus. & Com. Code. In order to evidence its ability to grant such waiver, each Assignee hereby represents and warrants to Assignor that it (i) is in the business of seeking or acquiring, by purchase or lease, goods or services for commercial or business use; (ii) has assets of $5 million or more according to its most recent financial statement prepared in accordance with generally accepted accounting principles; (iii) has knowledge and experience in financial, business and oil and gas matters that enable it to evaluate the merits and risks of the transactions contemplated hereby; (iv) is not in a significantly disparate bargaining position; and (v) that this waiver is a material and integral part of this Assignment and the consideration thereof.

d. No Sale of Fractional Undivided Interests. Assignee is Accredited Investor. Assignee has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of an investment in the Assets; it is acquiring the Assets for its own account for investment and not with a view to or for the subdivision, resale, distribution or fractionalization thereof; it has no contract, undertaking, or arrangement with any person to sell, transferor pledge to any person the Assets and it has no present plans to enter into any such contract, undertaking, agreement or arrangement; it understands that the Assets may not have been and will not be registered under the Securities Act of 1933, as amended (the “Act”), or under any state securities laws, and that transferability and sale of the Assets may be restricted without registration under the Act and applicable state securities laws, or an exemption therefrom. Assignee is an “accredited investor” as that item is defined in Regulation D promulgated under the Act.

e. Severability. The provisions of this Assignment are severable. If a court of competent jurisdiction finds any part of this Assignment to be void, invalid, or otherwise unenforceable (except for the release, waiver, defense and indemnity provisions), this holding will not affect other portions that can be given effect without the invalid or void portion.

f. Related Agreements. Unless specifically provided otherwise in this Assignment, the sale of the Assets is made subject to all oil, gas and mineral leases, assignments, subleases, farmout agreements, joint operating agreements, pooling agreements, letter agreements, easements, rights of way, and all other agreements with respect to or pertaining to the Assets to the extent they are binding on Assignor or Assignor’s affiliates, subsidiaries, or corporate parent (the “Related Agreements”). Assignee expressly assumes the obligations and liabilities of Assignor and Assignor’s

affiliates, subsidiaries or corporate parent under such agreements insofar as the obligations and liabilities concern or pertain to the Assets and to execute any documents necessary to effectuate such assumption. The parties agree that this paragraph is applicable to all instruments whether they are recorded or not.

g. Ejusdem Generis The word “includes” and “including” and their syntactical variants mean “includes, but not limited to” and its corresponding syntactical variants. The rule of ejusdem generis may not be invoked to restrict or limit the scope of the general term or phrase followed or proceeded by an enumeration of particular examples.

h. No Ratification. Recitation of or reference to any agreement or other instrument in this Assignment, including its exhibits, does not operate to ratify, confirm, revise, or reinstate the agreement or instrument if it has previously lapsed or expired.

i. Not to be Construed Against Drafter. Assignor and Assignee acknowledge that they have read this Assignment, have had the opportunity to review it with an attorney of their respective choice, and have agreed to all its terms. Under these circumstances, Assignee and Assignor agree that the rule of construction that a contract be construed against the drafter shall not be applied in interpreting this Assignment and that in the event of any ambiguity in any of the terms or conditions of this Assignment, including any exhibits hereto and whether or not placed of record, such ambiguity shall not be construed for or against any party hereto on the basis that such party did or did not author the same.

j. Waiver of Jury Trial. ASSIGNOR AND ASSIGNEE DO HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, SUIT OR OTHER LEGAL PROCEEDING BASED UPON, ARISING OUT OF OR RELATING TO THIS ASSIGNMENT THE RIGHTS AND OBLIGATIONS UNDER THIS ASSIGNMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

k. Express Negligence Rule; Conspicuousness. ASSIGNEE ACKNOWLEDGES THAT THE PROVISIONS IN THIS ASSIGNMENT THAT ARE SET OUT IN ITALICS, IN BOLD, UNDERLINE OR CAPITALS (OR ANY COMBINATION THEREOF) SATISFY THE REQUIREMENTS FOR THE EXPRESS NEGLIGENCE RULE AND/OR ARE CONSPICUOUS.

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

m. Compliance with Laws. Assignee will comply with all rules, laws, regulations and statutes applicable to Assignee’s ownership and operation of the Assets.

n. Recognition. Assignee will take all necessary steps to ensure that Assignee is recognized as the owner and, if applicable, operator of the Assets, as provided

herein, by all appropriate parties, including any regulatory commission, body or board or jurisdiction. Assignee will secure new bonds or financial assurance in the required amount such that Assignor’s financial assurance or bonds are released and discharged as to the Assets. Assignee will remove all signage on the Assets containing the name of Assignor or its affiliates and install signs complying with applicable governmental regulations.

o. Purchase and Sale Agreement. This Assignment is subject to the terms and conditions of that “Purchase and Sale Agreement” dated June 27, 2005 between the parties hereto. Capitalized terms not otherwise defined herein have the meaning ascribed them in the said Purchase and Sale Agreement. The Purchase and Sale Agreement is not intended to be merged into this Agreement.

p. Waiver of Louisiana Rights in Redhibition. THE ASSIGNEE EXPRESSLY WAIVES THE WARRANTY OF FITNESS FOR INTENDED PURPOSES OR GUARANTEE AGAINST HIDDEN OR LATENT REDHIBITORY VICES UNDER LOUISIANA LAW, INCLUDING LOUISIANA CIVIL CODE ARTICLES 2520 (1870) THROUGH 2548 (1870), AND THE WARRANTY IMPOSED BY LOUISIANA CIVIL CODE ARTICLE 2476; WAIVES ALL RIGHTS IN REDHIBITION PURSUANT TO LOUISIANA CIVIL CODE ARTICLE 2520, ET SEQ., (INCLUDING ANY AMENDMENTS OR REVISIONS OF THE FOREGOING), ACKNOWLEDGES THAT THIS EXPRESS WAIVER SHALL BE CONSIDERED A MATERIAL AND INTEGRAL PART OF THIS SALE AND THE CONSIDERATION THEREOF; AND ACKNOWLEDGES THAT THIS WAIVER HAS BEEN BROUGHT TO THE ATTENTION OF THE ASSIGNEE AND EXPLAINED IN DETAIL AND THAT ASSIGNEE HAS VOLUNTARILY AND KNOWINGLY CONSENTED TO THIS WAIVER OF WARRANTY OF FITNESS AND/OR WARRANTY AGAINST REDHIBITORY VICES AND DEFECTS FOR THE ASSETS, TO THE EXTENT THE ASSETS ARE LOCATED IN LOUISIANA.

q. Well Abandonment Commitment. Assignee shall either plug and abandon a minimum of 15 wells situated on the Assets per year or spend a minimum of one million dollars annually on plugging and abandonment expenses pertaining to the Asset commencing in 2006. Assignee shall provide reasonable access to the Assets and Assignee’s books and records during normal business hours so that Assignor may audit and confirm Assignee’s performance of this commitment.

r. Letter of Credit. Assignee shall at all times after the date hereof have in place and effect an irrevocable letter of credit satisfactory to Assignor such that Assignee will takeover or replace any and all letter(s) of credit, bonds or other security required under Law or Related Agreements (including that letter of credit up to the aggregate sum of $7,000,000 for the benefit of Chevron Corporation, Chevron U.S.A. Inc., or

their respective affiliates and Assignee’s letter of credit must be satisfactory to same) for the owner or operator of the Assets or any of them, covering plugging, abandonment and reclamation of Wells, Assets, facilities, oil spills and/or other matters as required therein or thereby until completion thereof and the express written release thereof by Assignor, such that Assignor, upon and after the date hereof will have no further liability or obligation related or arising therefrom.

s. Parent Guaranty. On and after the date hereof, Assignee shall have in place and effect for the benefit of Assignor an irrevocable Guaranty, satisfactory to Assignor, from Assignee’s ultimate corporate parent guaranteeing the performance by Assignee of all the obligations and liabilities of Assignee under this Assignment and the Purchase and Sale Agreement and all instruments executed by Assignee and Assignor at Closing.

TO HAVE AND TO HOLD the Assets unto the Assignee, its successors and assigns, subject to the terms, covenants and conditions hereinabove set forth.

EXECUTED THIS 18th day of August , 2005, to be effective in all respects as of the Effective Time.

ASSIGNOR:

PIONEER NATURAL RESOURCES USA, INC.

By: ___________________________

Name: ___________________________

Title: ___________________________

ASSIGNEE:

By: ___________________________

ACKNOWLEDGMENTS

STATE OF ________ §

_______ OF _______ §

This instrument was acknowledged before me on the ____ day of _________, 2005, by ______________________ as __________________(Title), of PIONEER NATURAL RESOURCES USA, INC., a Delaware corporation, on behalf of said corporation.

I have hereunto set my hand and official seal this day of , 2005.

Notary Public, State of __________

STATE OF _______ §

_________ OF _________ §

This instrument was acknowledged before me on the ____ day of _________, 2005, by ______________________ as __________________(Title), of _______________________________________, a ___________ corporation, on behalf of said corporation.

I have hereunto set my hand and official seal this day of , 2005.

Notary Public, State of ________________

EXHIBIT "C"

TO THAT CERTAIN PURCHASE AND SALE AGREEMENT BY AND BETWEEN PIONEER NATURAL RESOURCES USA, INC. AND MARITECH RESOURCES, INC.

NON-FOREIGN AFFIDAVIT

Exemption from WIthholding of Tax For

Disposition of U.S. Real Property Interests

Article 1445 of the Internal Revenue Code provides that a transferee of a U.S. real property interest must withhold tax if the transferor is a foreign person. To inform Maritech Resources, Inc. (“Purchaser”) that withholding of tax is not required upon the disposition of a U.S. real property interest by Pioneer Natural Resources USA, Inc., the undersigned hereby certifies the following:

1. Pioneer Natural Resources USA, Inc. is not a nonresident alien, foreign corporation, foreign partnership, foreign trust, or foreign estate for purposes of U.S. income taxation;

2. Pioneer Natural Resources USA, Inc.’s taxpayer identifying number is 75-2516853; and

3. Pioneer Natural Resources, Inc.’s home address is 5205 N. O’Connor Blvd., Suite 900, Irving, TX 75039.

Pioneer Natural Resources USA, Inc. understands that this certification may be disclosed to the Internal Revenue Service by Buyer and that any false statement contained herein could be punished by find, imprisonment, or both.

Under penalties of perjury, I declare that I have examined this certification and, to the best of my knowledge and belief, it is true, correct and complete, and I further declare I have authority to sign this document.

PIONEER NATURAL RESOURCES USA, INC.

By:__________________________________

Title:_________________________________

EXHIBIT "D"

TO THAT PURCHASE AND SALE AGREEMENT BY AND BETWEEN PIONEER NATURAL RESOURCES USA, INC. AND MARITECH RESOURCES, INC.

GUARANTY

This Guaranty (this “Guaranty”), dated July __, 2005, effective as of April 1, 2005, is made by TETRA Technologies, Inc., a Delaware corporation (the “Guarantor”), for the benefit of Maritech Resources, Inc., a Delaware corporation (the “Company”), and for the benefit of “Counterparty”(as hereinafter defined);

WHEREAS, the Company, which is a subsidiary corporation of Guarantor, has entered into a Purchase and Sale Agreement (hereinafter referred to as the “Agreement”) dated July __, 2005, to be effective April 1, 2005, with Pioneer Natural Resources USA, Inc. (the “Counterparty”), and the Agreement requires the Company and Guarantor to perform obligations as specified in the Agreement, including, but not limited to plugging and abandonment operations, indemnification by Company and Guarantor of Counterparty and others (as specified in the Agreement), insurance to be provided by Company and Guarantor, and other obligations, all as specified in the Agreement;

WHEREAS, in consideration for Counterparty’s agreement to forego having Company provide performance bonds as a guaranty for Company’s performing its obligations under the Agreement, the Guarantor is providing this Guaranty, for the benefit of Counterparty, at the request of Company, to fully guarantee Company’s and Guarantor’s performance of all of its obligations under the Agreement.

NOW, THEREFORE, in consideration of, and as an inducement for, the Counterparty entering into the Agreement, the Guarantor hereby covenants and agrees as follows:

1. Guaranty. The Guarantor, as a primary obligor, along with Company, and not merely surety, hereby unconditionally and absolutely and irrevocably guarantees to the Counterparty the prompt performance, when due, of any and all obligations of whatsoever nature of Company and/or of Guarantor, specified in the Agreement (the “Obligations”), including without limiting the forgoing in any respect, the plugging and abandonment, site restoration, indemnification, insurance and defense obligations, and including any and all damages which may become due to Counterparty caused by failure of performance or payment by either Company or Guarantor under the Agreement or under the Guaranty. Guarantor further agrees that its obligation to Counterparty is as a primary obligor, along with Company, and includes the obligation to fully compensate Counterparty for all damages, of whatsoever nature, incurred by Counterparty, its successors and assigns, because of the failure of either Guarantor or Company to fully perform all of their Obligations under the Agreement, or the failure of Guarantor to perform the

obligations of Guarantor under this Guaranty. Guarantor agrees to perform the Obligations as they become due under the Agreement at any time, and from time to time, as requested by Counterparty.

2. Nature of Guaranty. The Guarantor hereby agrees that its obligations hereunder shall be unconditional irrespective of: (i) whether or not any legal action has been commenced by Counterparty against the Company, or against Guarantor, to enforce the Agreement; (ii) whether or not any judgment has been entered against Company or Guarantor, and whether or not any action is taken by Counterparty to enforce a judgment; (iii) whether or not Counterparty has failed to take any steps necessary to preserve its rights; (iv) the waiver of all or any obligations of either Company, or Guarantor, by the Counterparty; (v) any failure by the Counterparty to demand performance of the Obligations by Company or by Guarantor; (vi) whether there is any subsequent amendment of the Agreement, or any modification or amendment of any documentation relating to the Agreement, or any extension, renewal, settlement, compromise, or waiver, by Counterparty of any Obligations under the Agreement or any amendments thereof; (vii) any acts or failures to act by Company. In the event that any payment of Guarantor in respect of any Obligations is rescinded or recovered from Counterparty as a preference or fraudulent transfer under the United States federal bankruptcy code, laws or regulations, or any applicable state law, the Guarantor shall remain liable hereunder in respect to such Obligations as if such payment had not been made. This Guaranty shall continue to be effective if Company merges or consolidates with or into another entity, loses its separate legal identity or ceases to exist.

3. Waivers. The Guarantor hereby expressly waives: (i) notice of acceptance of this Guaranty by Counterparty, or any other notice whatsoever; (ii) notice of any Obligations to which this Guaranty may apply or of any security therefor; (iii) diligence; presentment; demand for payment, and protest; (iv) notice of protest, acceleration, and dishonor; (v) filing of claims with a court in the event of insolvency or bankruptcy, or any similar incapacity of the Company; (vi) all demands whatsoever; and (vi) any right to require a lawsuit or proceeding first against the Company.

4. Unconditional Guaranty. This Guaranty is intended to be and shall be construed to be a continuing, absolute and unconditional guaranty, and shall remain in full force and effect until all of the Obligations under the Agreement, and any subsequent amendments thereto, are fully performed.

5. Notices. All notices and other communications relating to this Guaranty must be in writing, may be given by facsimile, hand delivery or overnight courier service and must be addressed or directed to the respective parties as follows:

If to the Counterparty, to:

Pioneer Natural Resources USA, Inc.

5205 N. O’Connor Blvd., Suite 900

Irving, Texas 75039-3746

Attention: General Counsel

Telephone: (972) 969-4090

Facsimile: (972) 969-3552

If to the Guarantor, to:

TETRA Technologies, Inc.

25025 I-45N, 6th Floor

The Woodlands, Texas 77380

Attention: President/Legal Notice

Telephone: (281) 364-2208

Facsimile: (281) 364-4398

Notices are effective when actually received by the party to which they are given, as evidenced by facsimile transmission report, written acknowledgment or affidavit of hand delivery or courier receipt.

6. Representations and Warranties. The Guarantor represents and warrants to the Counterparty as of the date hereof, and during the term of the Agreement, that:

The Guarantor is duly organized, validly existing and in good standing under the laws of the state of Delaware, and has full power and legal right to execute and deliver this Guaranty and to perform the Obligations of the Agreement and of this Guaranty;

The execution, delivery and performance of this Guaranty by the Guarantor have been, remain, and will remain duly authorized by all necessary corporate action and do not contravene any provision of its certificate of incorporation or by-laws, and do not violate any laws or any existing agreements to which Guarantor is subject;

All consents, authorizations, approvals, registrations and declarations required for the due execution, delivery and performance of this Guaranty have been obtained from or, as the case may be, filed with, the relevant governmental authorities having jurisdiction and shall remain in full force and effect, and all conditions thereof have been and will be duly complied with, and no other action by, and no notice to or filing with, any governmental authority having jurisdiction is required for execution, delivery or performance of this Guaranty; and

This Guaranty constitutes the legal, valid and binding obligation of the Guarantor enforceable against it in accordance with its terms except as enforcement hereof may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditor’s rights or by general principles of equity as such apply to the Guarantor.

7. Setoffs and Counterclaims. Guarantor reserves to itself all rights, setoffs, counterclaims and other defenses to which the Company is or may be entitled under the Agreement; except Guarantor agrees that it shall not assert, and shall not be entitle to assert: (i)

defenses arising out of bankruptcy, insolvency, dissolution or liquidation, or reorganization of the Company, or any matters of a similar nature, or any proceedings affecting either Company or its assets or resulting in any release or discharge of any Obligations; and (ii) defenses based upon any invalidity in whole or in part, whether because of statute or otherwise, of any provisions of the Agreement. The defenses specified in 7(i) and (ii) are hereby irrevocably waived by Guarantor.

8. Subrogation. The Guarantor will not exercise any rights against Company that it may acquire by way of subrogation until all Obligations of Company and Guarantor under the Agreement and this Guaranty to Counterparty shall have been fully performed. Subject to the foregoing, upon performance of all of the Obligations to Counterparty, the Guarantor shall be subrogated to the rights of the Counterparty against the Company, and the Counterparty agrees, at that time, to take, at the Guarantor’s sole expense, the steps that Guarantor may reasonably request to implement this subrogation.

9. Expenses. Guarantor hereby agrees to pay on demand all damages caused by a failure of either Company or Guarantor to perform the Obligations of Company and of Guarantor under the Agreement, and under this Guaranty, as well as all court and administrative costs and expenses and attorneys’ fees paid by Counterparty in enforcing its rights against Company and Guarantor under the Agreement and under this Guaranty; provided, that Guarantor shall not be liable for damages to and expenses of the Counterparty, if neither Guarantor nor Company are in default of any of Company’s and Guarantor’s Obligations under the Agreement, and if Guarantor is, also, not in default of any of its obligations under this Guaranty.

10. Assignment. This Guaranty shall be binding upon the Guarantor and upon its successors and assigns, and shall inure to the benefit of the Counterparty and its successors and assigns, and shall be effective immediately upon the signature of Guarantor. The Guarantor may not assign this Guaranty or delegate its duties hereunder, unless Guarantor has received the prior express written consent of Counterparty, which shall not be unreasonably withheld if the proposed assignee thereof has the financial strength and capacity to fulfill the requirements of this Guaranty equal to or greater than Guarantor.

11. Amendments. No term or provision of this Guaranty shall be amended, modified, altered, waived, or supplemented except in a writing signed by Guarantor and Counterparty.

12. Miscellaneous. This Guaranty shall be governed by, and construed in accordance with, the laws of Texas, without reference to conflict of laws principles, and all provisions hereof shall be construed to be valid to the fullest extent permitted by law.

Except as specified in the Agreement, this Guaranty is the entire and only agreement between the Guarantor and the Counterparty with respect to the guarantee of the Obligations to the Counterparty arising out of the Agreement. All representations, warranties, agreements, or undertakings heretofore or contemporaneously made, which are not set forth herein or in the Agreement are superseded hereby.

IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be executed in its corporate name by its duly authorized representative, and constitutes its lawful, binding and legally enforceable obligation, to be effective as of April 1, 2005.

TETRA TECHNOLOGIES, INC.

By: ___________________________

Title: __________________________

Schedule 3.4(c)

(Preferential Purchase Rights)

TO THAT PURCHASE AND SALE AGREEMENT BY AND BETWEEN PIONEER NATURAL RESOURCES USA, INC. AND MARITECH RESOURCES, INC.

None

Schedule 3.4(d)

(Consent to Assign)

TO THAT PURCHASE AND SALE AGREEMENT BY AND BETWEEN PIONEER NATURAL RESOURCES USA, INC. AND MARITECH RESOURCES, INC.

Chevron USA, Inc.

Dynergy Marketing & Trading (Warren) GRN-LA-PR-010374 Notice of Sale

Schedule 3.4(e)

(Liens)

TO THAT PURCHASE AND SALE AGREEMENT BY AND BETWEEN PIONEER NATURAL RESOURCES USA, INC. AND MARITECH RESOURCES, INC.

None

Schedule 4.10

(Litigation)

TO THAT PURCHASE AND SALE AGREEMENT BY AND BETWEEN PIONEER NATURAL RESOURCES USA, INC. AND MARITECH RESOURCES, INC.

None

Schedule 4.11

(AFE's)

TO THAT PURCHASE AND SALE AGREEMENT BY AND BETWEEN PIONEER NATURAL RESOURCES USA, INC. AND MARITECH RESOURCES, INC.

None

Schedule 4.12

(Environmental Actions)

TO THAT PURCHASE AND SALE AGREEMENT BY AND BETWEEN PIONEER NATURAL RESOURCES USA, INC. AND MARITECH RESOURCES, INC.

None

Schedule 4.14

(Take or Pay)

TO THAT PURCHASE AND SALE AGREEMENT BY AND BETWEEN PIONEER NATURAL RESOURCES USA, INC. AND MARITECH RESOURCES, INC.

None

Schedule 8.2(b)

(Letter in Lieu)

TO THAT PURCHASE AND SALE AGREEMENT BY AND BETWEEN PIONEER NATURAL RESOURCES USA, INC. AND MARITECH RESOURCES, INC.

Schedule 9.10

(Assumed Litigation)

TO THAT PURCHASE AND SALE AGREEMENT BY AND BETWEEN PIONEER NATURAL RESOURCES USA, INC. AND MARITECH RESOURCES, INC.

None

EXHIBIT 10.2

***Indicates material has been omitted pursuant to a Confidential Treatment Request filed with the Securities and Exchange Commission. A complete copy of this agreement has been filed with the Securities and Exchange Commission.

PURCHASE AND SALE AGREEMENT

among

DEVON ENERGY PRODUCTION COMPANY, L.P.

and

DEVON LOUISIANA CORPORATION,

and

DEVON ENERGY PETROLEUM PIPELINE COMPANY

as Seller

and

MARITECH RESOURCES, INC., as Buyer

and

TETRA TECHNOLOGIES, INC., as Guarantor

dated

July 22, 2005

TABLE OF CONTENTS

			Page
ARTICLE I
DEFINITIONS AND INTERPRETATION			1
	1.1	Defined Terms	1
	1.2	References	11
	1.3	Articles	11
	1.4	Number and Gender	11

ARTICLE II
PURCHASE AND SALE			11
	2.1	Purchase and Sale	11
	2.2	Excluded Assets	12
	2.3	Revenues and Expenses	12

ARTICLE III
PURCHASE PRICE			13
	3.1	Purchase Price	13
	3.2	Deposit	13
	3.3	Adjustments to Purchase Price	13
	3.4	Adjustment Methodology	15
	3.5	Preliminary Settlement Statement	15
	3.6	Final Settlement Statement	16
	3.7	Disputes	16
	3.8	Allocation of Purchase Price / Allocated Values	16

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER			17
	4.1	Organization, Existence	17
	4.2	Authorization	17
	4.3	No Conflicts	17
	4.4	Consents	17
	4.5	Bankruptcy	17
	4.6	Foreign Person	18
	4.7	Litigation	18
	4.8	Material Contracts	18
	4.9	No Violation of Laws	19
	4.10	Preferential Rights	19
	4.11	Royalties, Etc	19
	4.12	Personal Property	19
	4.13	Imbalances	19
	4.14	Current Commitments	19
	4.15	Environmental	19
	4.16	Production Taxes	20
	4.17	Employees	20

	4.18	Brokers Fees	20

ARTICLE V
BUYER'S REPRESENTATIONS AND WARRANTIES			20
	5.1	Organization; Existence	20
	5.2	Authorization	20
	5.3	No Conflicts	20
	5.4	Consents	21
	5.5	Bankruptcy	21
	5.6	Litigation	21
	5.7	Financing	21
	5.8	Regulatory	21
	5.9	Independent Evaluation	21
	5.10	Broker's Fees	22
	5.11	Accredited Investor	22

ARTICLE VI
CERTAIN AGREEMENTS			22
	6.1	Conduct of Business	22
	6.2	Successor Operator	22
	6.3	HSR Act	23
	6.4	Governmental Bonds	23
	6.5	Performance Bond	23
	6.6	Record Retention	24
	6.7	Notifications	24

ARTICLE VII
BUYER'S CONDITIONS TO CLOSING			24
	7.1	Representations	24
	7.2	Performance	24
	7.3	No Legal Proceedings	24
	7.4	Title Defects and Environmental Defects	24
	7.5	HSR Act	25

ARTICLE VIII
SELLER'S CONDITIONS TO CLOSING			25
	8.1	Representations	25
	8.2	Performance	25
	8.3	No Legal Proceedings	25
	8.4	Title Defects and Environmental Defects	25
	8.5	HSR Act	25
	8.6	Replacement Bonds	25

ARTICLE IX
CLOSING			26
	9.1	Date of Closing	26
	9.2	Place of Closing	26

	9.3	Closing Obligations	26
	9.4	Records	27

ARTICLE X
EMPLOYEE MATTERS			1
	10.1	Transferring Employees	27
	10.2	WARN Act	Error! Bookmark not defined.
	10.3	Seller's Employee Benefit Plans	Error! Bookmark not defined.
	10.4	Buyer's Employee Benefit Plans	Error! Bookmark not defined.
	10.5	Severance Benefits	Error! Bookmark not defined.
	10.6	Welfare Benefits Claims and Plans	Error! Bookmark not defined.
	10.7	No Third Party Rights	Error! Bookmark not defined.

ARTICLE XI
ACCESS / DISCLAIMERS			28
	11.1	Access	28
	11.2	Confidentiality	29
	11.3	Disclaimers	29

ARTICLE XII
TITLE MATTERS; CASUALTIES; TRANSFER RESTRICTIONS			31
	12.1	Seller's Title	31
	12.2	Notice of Title Defects; Defect Adjustments	32
	12.3	Casualty or Condemnation Loss	36
	12.4	Preferential Purchase Rights and Consents to Assign	38

ARTICLE XIII
ENVIRONMENTAL MATTERS			38
	13.1	Environmental Defects	39
	13.2	NORM, Wastes and Other Substances	41

ARTICLE XIV
ASSUMPTION; SURVIVAL, INDEMNIFICATION			41
	14.1	Assumption by Buyer	41
	14.2	Indemnities of Seller	42
	14.3	Indemnities of Buyer	42
	14.4	Limitation on Liability	43
	14.5	Express Negligence	44
	14.6	Exclusive Remedy	44
	14.7	Indemnification Procedures	44
	14.8	Survival	46
	14.9	Waiver of Right to Rescission	46
	14.10	Insurance, Taxes	47
	14.11	Non-Compensatory Damages	47
	14.12	Cooperation by Buyer - Retained Litigation	47
	14.13	Disclaimer of Application of Anti-Indemnity Statutes	47

iii

ARTICLE XV
TERMINATION, DEFAULT AND REMEDIES			47
	15.1	Right of Termination	47
	15.2	Effect of Termination	48
	15.3	Return of Documentation and Confidentiality	48

ARTICLE XVI
MISCELLANEOUS			48
	16.1	Exhibits	48
	16.2	Expenses and Taxes	48
	16.3	Assignment	49
	16.4	Preparation of Agreement	49
	16.5	Publicity	49
	16.6	Notices	49
	16.7	Removal of Name	51
	16.8	Further Cooperation	51
	16.9	Filings, Notices and Certain Governmental Approvals	51
	16.10	Entire Agreement; Conflicts	51
	16.11	Parties in Interest	52
	16.12	Amendment	52
	16.13	Waiver; Rights Cumulative	52
	16.14	Governing Law; Jurisdiction, Venue; Jury Waiver	52
	16.15	Severability	53
	16.16	Couterparts	53
	16.17	Like-Kind Exchange	53


	1.1	Defined Terms	1
	1.2	References	11
	1.3	Articles	11
	1.4	Number and Gender	11

ARTICLE II
PURCHASE AND SALE			11
	2.1	Purchase and Sale	11
	2.2	Excluded Assets	12
	2.3	Revenues and Expenses	12

ARTICLE III
PURCHASE PRICE			13
	3.1	Purchase Price	13
	3.2	Deposit	13
	3.3	Adjustments to Purchase Price	13
	3.4	Adjustment Methodology	15
	3.5	Preliminary Settlement Statement	15
	3.6	Final Settlement Statement	16
	3.7	Disputes	16

	3.8	Allocation of Purchase Price / Allocated Values	16

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER			17
	4.1	Organization, Existence	17
	4.2	Authorization	17
	4.3	No Conflicts	17
	4.4	Consents	17
	4.5	Bankruptcy	17
	4.6	Foreign Person	18
	4.7	Litigation	18
	4.8	Material Contracts	18
	4.9	No Violation of Laws	19
	4.10	Preferential Rights	19
	4.11	Royalties, Etc	19
	4.12	Personal Property	19
	4.13	Imbalances	19
	4.14	Current Commitments	19
	4.15	Environmental	19
	4.16	Production Taxes	20
	4.17	Employees	20
	4.18	Brokers Fees	20

ARTICLE V
BUYER'S REPRESENTATIONS AND WARRANTIES			20
	5.1	Organization; Existence	20
	5.2	Authorization	20
	5.3	No Conflicts	20
	5.4	Consents	21
	5.5	Bankruptcy	21
	5.6	Litigation	21
	5.7	Financing	21
	5.8	Regulatory	21
	5.9	Independent Evaluation	21
	5.10	Broker's Fees	22
	5.11	Accredited Investor	22

ARTICLE VI
CERTAIN AGREEMENTS			22
	6.1	Conduct of Business	22
	6.2	Successor Operator	22
	6.3	HSR Act	23
	6.4	Governmental Bonds	23
	6.5	Performance Bond	23
	6.6	Record Retention	24
	6.7	Notifications	24

ARTICLE VII
BUYER'S CONDITIONS TO CLOSING			24
	7.1	Representations	24
	7.2	Performance	24
	7.3	No Legal Proceedings	24
	7.4	Title Defects and Environmental Defects	24
	7.5	HSR Act	25

ARTICLE VIII
SELLER'S CONDITIONS TO CLOSING			25
	8.1	Representations	25
	8.2	Performance	25
	8.3	No Legal Proceedings	25
	8.4	Title Defects and Environmental Defects	25
	8.5	HSR Act	25
	8.6	Replacement Bonds	25

ARTICLE IX
CLOSING			26
	9.1	Date of Closing	26
	9.2	Place of Closing	26
	9.3	Closing Obligations	26
	9.4	Records	27

ARTICLE X
EMPLOYEE MATTERS			Error! Bookmark not defined.
	10.1	Transferring Employees	27
	10.2	WARN Act	Error! Bookmark not defined.
	10.3	Seller's Employee Benefit Plans	Error! Bookmark not defined.
	10.4	Buyer's Employee Benefit Plans	Error! Bookmark not defined.
	10.5	Severance Benefits	Error! Bookmark not defined.
	10.6	Welfare Benefits Claims and Plans	Error! Bookmark not defined.
	10.7	No Third Party Rights	Error! Bookmark not defined.

ARTICLE XI
ACCESS / DISCLAIMERS			28
	11.1	Access	28
	11.2	Confidentiality	29
	11.3	Disclaimers	29

ARTICLE XII
TITLE MATTERS; CASUALTIES; TRANSFER RESTRICTIONS			31
	12.1	Seller's Title	31
	12.2	Notice of Title Defects; Defect Adjustments	32
	12.3	Casualty or Condemnation Loss	36
	12.4	Preferential Purchase Rights and Consents to Assign	38

ARTICLE XIII
ENVIRONMENTAL MATTERS			38
	13.1	Environmental Defects	39
	13.2	NORM, Wastes and Other Substances	41

ARTICLE XIV
ASSUMPTION; SURVIVAL, INDEMNIFICATION			41
	14.1	Assumption by Buyer	41
	14.2	Indemnities of Seller	42
	14.3	Indemnities of Buyer	42
	14.4	Limitation on Liability	43
	14.5	Express Negligence	44
	14.6	Exclusive Remedy	44
	14.7	Indemnification Procedures	44
	14.8	Survival	46
	14.9	Waiver of Right to Rescission	46
	14.10	Insurance, Taxes	47
	14.11	Non-Compensatory Damages	47
	14.12	Cooperation by Buyer - Retained Litigation	47
	14.13	Disclaimer of Application of Anti-Indemnity Statutes	47

ARTICLE XV
TERMINATION, DEFAULT AND REMEDIES			47
	15.1	Right of Termination	47
	15.2	Effect of Termination	48
	15.3	Return of Documentation and Confidentiality	48
ARTICLE XVI
MISCELLANEOUS			48
	16.1	Exhibits	48
	16.2	Expenses and Taxes	48
	16.3	Assignment	49
	16.4	Preparation of Agreement	49
	16.5	Publicity	49
	16.6	Notices	49
	16.7	Removal of Name	51
	16.8	Further Cooperation	51
	16.9	Filings, Notices and Certain Governmental Approvals	51
	16.10	Entire Agreement; Conflicts	51
	16.11	Parties in Interest	52
	16.12	Amendment	52
	16.13	Waiver; Rights Cumulative	52
	16.14	Governing Law; Jurisdiction, Venue; Jury Waiver	52
	16.15	Severability	53
	16.16	Couterparts	53
	16.17	Like-Kind Exchange	53

vii

LIST OF EXHIBITS AND SCHEDULES

Exhibits
Exhibit A	Allocated Value, Well (WI/NRI), Encumbrances
Exhibit A-2	High Island Pipeline System (Segments)
Exhibit A-3	Certain of the Assets that are being Sold and Conveyed
Exhibit B	Form of Assignment and Bill of Sale (County/Parish)
Exhibit B-2	MMS Assignment forms
Exhibit C	Title Indemnity Agreement
Exhibit D	Access Agreement
Exhibit G	Deep Depths Operating Agreement
Exhibit H	TETRA Guaranty of Maritech

Schedules
Schedule 3.8	Allocated Values
Schedule 4.4	Consents
Schedule 4.7	Litigation
Schedule 4.8	Material Contracts
Schedule 4.9	Violation of Laws
Schedule 4.10	Preferential Rights
Schedule 4.12	Personal Property
Schedule 4.13	Imbalances

viii

Schedule 4.14

Current Commitments

Schedule 4.15

Environmental

Schedule 4.16

Production Taxes

Schedule 6.1

Conduct of Business

Schedule 14.1

Retained Litigation

PURCHASE AND SALE AGREEMENT

THIS PURCHASE AND SALE AGREEMENT (as may be amended, restated, supplemented or otherwise modified from time to time, this “Agreement”) is executed as of this 22nd day of July, 2005, and is among Devon Energy Production Company, L.P. (“DEPC”), a Delaware limited partnership and Devon Louisiana Corporation (“DLC”), a Louisiana corporation, and Devon Energy Petroleum Pipeline Company (“DEPPC”), a Delaware corporation (all herein referred to as “Seller”); and Maritech Resources, Inc. (“Buyer”), a Delaware corporation; and TETRA Technologies, Inc. (“Guarantor”), a Delaware corporation, as guarantor of Buyer for the obligations of Buyer specified in this Agreement.

Recitals

Seller desires to sell and convey, and Buyer desires to purchase and pay for, the Assets (as defined hereinafter) effective as of the Effective Time (as defined hereinafter).

NOW, THEREFORE, for and in consideration of the mutual promises contained herein, the benefits to be derived by each party hereunder, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and Buyer agree as follows:

ARTICLE I

DEFINITIONS AND INTERPRETATION

1.1 Defined Terms. In addition to the terms defined in the introductory paragraph and the other provisions of this Agreement, for purposes hereof, the following expressions and terms shall have the meanings set forth in this Article I, unless the context otherwise requires:

“Access Agreement” shall have the meaning set forth in Article 13.1(b)(iv).

“Accounting Arbitrator” shall have the meaning set forth in Article 3.7.

“Adjusted Purchase Price” shall have the meaning set forth in Article 3.3.

“AFE” shall have the meaning set forth in Article 4.14.

“Affected Well” shall have the meaning set forth in Article 12.2(g)(v).

“Affiliate” shall mean any Person that, directly or indirectly, through one or more intermediaries, controls or is controlled by, or is under common control with, another Person. The term “control” and its derivatives with respect to any Person means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

“Aggregate Deductible” shall mean Five Hundred Thousand Dollars ($500,000.00).

“Agreement” shall have the meaning set forth in the first paragraph herein.

“Allocated Value,” with respect to any Asset, means the amount set forth on Exhibit A and on Schedule 3.8 as the “Allocated Value” for such Asset.

“Applicable Contracts” means all Contracts by which the Properties and other Assets are bound or that primarily relate to the Properties or other Assets and (in each case) that will be binding on the Assets or Buyer after the Closing, including, without limitation; farmin and farmout agreements; bottomhole agreements; crude oil, condensate, and natural gas purchase and sale, gathering, transportation, and marketing agreements; hydrocarbon storage agreements; acreage contribution agreements; operating agreements; balancing agreements; pooling declarations or agreements; unitization agreements; processing agreements; saltwater disposal agreements; facilities or equipment leases; crossing agreements; letters of no objection; platform use agreements; production handling agreements; and other similar contracts and agreements, owned by Seller and primarily related to the Properties or other Assets, but exclusive of any master service agreements.

“Assets” shall have the meaning set forth in Article 2.1.

“Assignment” means the Assignment and Bill of Sale from Seller to Buyer, pertaining to the Assets, substantially in the form attached to this Agreement as Exhibit B.

“Assumed Obligations” shall have the meaning set forth in Article 14.1.

“Buyer” shall have the meaning set forth in the first paragraph herein.

“Buyer Indemnified Parties” shall have the meaning set forth in Article 14.2.

“Buyer’s Representatives” shall have the meaning set forth in Article 11.1(a).

“Claim” shall have the meaning set forth in Article 14.7(b).

“Claim Notice” shall have the meaning set forth in Article 14.7(b).

“Closing” shall have the meaning set forth in Article 9.1.

“Closing Date” shall have the meaning set forth in Article 9.1.

“Code” means the Internal Revenue Code of 1986, as amended.

“Confidentiality Agreement” shall mean that certain Confidentiality Agreement between Maritech Resources, Inc. and Devon Energy Corporation, dated December 20, 2004.

“Contract” means any written or oral contract, agreement, agreement regarding indebtedness, indenture, debenture, note, bond, loan, lease, mortgage, franchise, license agreement, purchase order, binding bid, commitment, letter of credit or any other legally binding arrangement, excluding, however, any Lease, easement, right-of-way, permit or other instrument

creating an interest in the Assets or a real or immovable property related to or used in connection with the operations of any Assets.

“Cure Period” shall have the meaning set forth in Article 12.2(c).

“Customary Post Closing Consents” shall mean the consents and approvals from Governmental Authorities for the assignment of the Assets to Buyer, that are customarily obtained after the assignment of properties similar to the Assets.

“Deep Depths” shall mean those depths in the Assets as to which it is indicated on Exhibit A that either fifty percent (50%) or one hundred percent (100%) of Seller’s interest therein is being reserved by Seller (to be retained by Seller as is specified in this Agreement).

“Defective Support Property” shall have the meaning set forth in Article 12.3(g)(v).

“Defensible Title” shall mean such title of Seller with respect to the Assets that, subject to Permitted Encumbrances:

(i) with respect to each Well (or the specified zone(s) therein) shown in Exhibit A, entitles Seller to receive the Net Revenue Interest shown in Exhibit A for such Well (or the specified zone(s) therein) throughout the duration of the productive life of such Well (or the specified zone(s) therein), except for (i) decreases in connection with those operations in which a Seller may from and after the date of this Agreement be a non-consenting co-owner, (ii) decreases resulting from the establishment or amendment from and after the date of this Agreement of pools or units, (iii) decreases required to allow other working interest owners to make up past underproduction or pipelines to make up past under deliveries, and (iv) as otherwise stated in Exhibit A;

(ii) with respect to each Well (or the specified zone(s) therein) shown in Exhibit A, obligates Seller to bear the Working Interest shown in Exhibit A for such Well (or the specified zone(s) therein) not greater than the Working Interest shown in Exhibit A for such Well (or the specified zone(s) therein) without increase throughout the productive life of such Well (or the specified zone(s) therein), except (i) increases resulting from contribution requirements with respect to defaulting co-owners under applicable operating agreements, (ii) increases to the extent that they are accompanied by a proportionate increase in Seller’s Net Revenue Interest, and (iii) as otherwise stated in Exhibit A;

(iii) with respect to Assets other than the Leases or Wells (or the specified zone(s) therein), is defensible; and

(iv) is free and clear of all Encumbrances.

“DEPC” shall have the meaning set forth in the first paragraph herein.

“Deposit” shall have the meaning set forth in Article 3.2.

“DEPPC” shall have the meaning set forth in the first paragraph herein.

“Dispute Notice” shall have the meaning set forth in Article 3.6.

“DLC” shall have the meaning set forth in the first paragraph herein.

“DOJ” shall mean the Department of Justice.

“Effective Time” shall mean 7:00 a.m. (Central Standard Time) on January 1, 2005.

“Encumbrance” shall mean any lien, security interest, pledge, charge or encumbrance, except Permitted Encumbrances.

“Environmental Arbitrator” shall have the meaning set forth in Article 13.1(e).

“Environmental Claim Date” shall have the meaning set forth in Article 13.1(a).

“Environmental Condition” shall mean (a) a condition existing on the date of this Agreement with respect to the air, soil, subsurface, surface waters, ground waters and/or sediments that causes an Asset (or Seller with respect to an Asset) not to be in compliance with any Environmental Law or (b) the existence as of the date of this Agreement with respect to the Assets or their operation thereof of any environmental pollution, contamination, degradation, damage or injury caused by, related to, remedial or corrective action is presently required (or if known, would be presently required) under Environmental Laws.

“Environmental Defect” shall mean an Environmental Condition with respect to an Asset that is not set forth in Schedule 4.15.

“Environmental Defect Notice” shall have the meaning set forth in Article 13.1(a).

“Environmental Laws” means all applicable federal, state, and local laws in effect as of the date of this Agreement, including common law, relating to the protection of the public health, welfare, and the environment, including, without limitation, those laws relating to the storage, handling, and use of chemicals and other Hazardous Substances, those relating to the generation, processing, treatment, storage, transportation, disposal, or other management thereof. The term “Environmental Laws” does not include good or desirable operating practices or standards that may be employed or adopted by other oil and gas well operators or recommended by a Governmental Authority.

“Excluded Assets” shall mean (a) all of Seller’s corporate minute books, financial records, and other business records that relate to Seller’s business generally (including the ownership and operation of the Assets); (b) all trade credits, all accounts, receivables and all other proceeds, income or revenues attributable to the Assets with respect to any period of time prior to the Effective Time; (c) all claims and causes of action of Seller arising under or with respect to any Contracts that are attributable to periods of time prior to the Effective Time (including claims for adjustments or refunds); (d) all rights and interests of Seller (A) under any policy or agreement of insurance or indemnity, (B) under any bond or (C) to any insurance or condemnation proceeds or awards arising, in each case, from acts, omissions or events, or damage to or destruction of property; (e) all Hydrocarbons produced and sold from the Properties with respect to all periods prior to the Effective Time; (f) all claims of Seller for refunds of or

loss carry forwards with respect to (A) production or any other taxes attributable to any period prior to the Effective Time, (B) income or franchise taxes or (C) any taxes attributable to the Excluded Assets; (g) all personal computers and associated peripherals and all radio and telephone equipment; (h) all of Seller’s proprietary computer software, patents, trade secrets, copyrights, names, trademarks, logos and other intellectual property; (i) all documents and instruments of Seller that may be protected by an attorney-client privilege; (j) all data that cannot be disclosed to Buyer as a result of confidentiality arrangements under agreements with Third Parties; (k) all audit rights arising under any of the Applicable Contracts or otherwise with respect to any period prior to the Effective Time or to any of the Excluded Assets, except for any Imbalances; (l) all geophysical, and other seismic and related technical data and information relating to the Properties; (m) documents prepared or received by Seller with respect to (A) lists of prospective purchasers for such transactions compiled by Seller, (B) bids submitted by other prospective purchasers of the Assets, (C) analyses by Seller of any bids submitted by any prospective purchaser, (D) correspondence between or among Seller, its respective representatives, and any prospective purchaser other than Buyer and (E) correspondence between Seller or any of its respective representatives with respect to any of the bids, the prospective purchasers, or the transactions contemplated in this Agreement; (n) any offices, office leases or personal property located on such sites which are not directly related to any one or more of the Assets; (o) those depths, including, without limiting the foregoing in any respect, Deep Depths, designated as excluded, excepted or reserved on Exhibit A with respect to the Leases, Lands or Assets; and (p) those currently existing overriding royalty interests designated as excluded, excepted or reserved on Exhibit A with respect to the Leases, Lands or Assets.

“Final Price” shall have the meaning set forth in Article 3.6.

“Final Settlement Statement” shall have the meaning set forth in Article 3.6.

“FTC” shall mean the Federal Trade Commission.

“Governmental Authority” shall mean any federal, state, local, municipal, tribal or other government; any governmental, regulatory or administrative agency, commission, body or other authority exercising or entitle to exercise any administrative, executive, judicial, legislative, belief, regulatory or taxing authority or power; and any court or governmental tribunal, including any tribal authority having or asserting jurisdiction.

“Guarantor” is TETRA Technologies, Inc.

“Guaranty” is the guaranty referenced in Article 6.5

“Hazardous Substances” shall mean any pollutants, contaminants, toxics or hazardous or extremely hazardous substances, materials, wastes, constituents, compounds, or chemicals that are regulated by, or may form the basis of liability under, any Environmental Laws, including NORM and other substances referenced in Article 13.2.

“HSR Act” shall mean the Hart Scott Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations thereunder.

“Hydrocarbons” means oil and gas and other hydrocarbons produced or processed in association therewith.

“Imbalance” means (i) any imbalance at the wellhead between the amount of Hydrocarbons produced from a Well and allocable to the interests of Seller therein and the shares of production from the relevant Well to which Seller is entitled and (ii) any marketing imbalance between the quantity of Hydrocarbons required to be delivered by Seller under any Contract relating to the purchase and sale, gathering, transportation, storage, processing, or marketing of Hydrocarbons and the quantity of Hydrocarbons actually delivered by Seller pursuant to the relevant Contract, together with any appurtenant rights and obligations concerning future in-kind and/or cash balancing at the wellhead and production balancing at the delivery point into the relevant sale, gathering, transportation, storage, or processing facility.

“Individual Environmental Threshold” shall have the meaning set forth in Article 13.1(d).

“Individual Title Defect Threshold” shall have the meaning set forth in Article 12.2(i).

“Interim Period” shall mean that period of time commencing with the Effective Time and ending at 7:00 a.m. (Central Standard Time) on the Closing Date.

“Knowledge” shall mean with respect to Seller, the actual Knowledge (without investigation) of the following Persons: Tony Benvegnu; Steve Minor; Todd Morgan; Wade Bonds; Mark Gress; Buck Sanders; Alan Davies; Will McCrocklin; and Don Sands.

“Lands” shall have the meaning set forth in Article 2.1(a).

“Law” shall mean any applicable statute, law, rule, regulation, ordinance, order, code, ruling, writ, injunction, decree or other official act of or by any Governmental Authority.

“Leases” shall have the meaning set forth in Article 2.1(a).

“Liabilities” shall mean any and all claims, causes of actions, payments, charges, judgments, assessments, liabilities, losses, damages, penalties, fines or costs and expenses, including any attorneys’ fees, legal or other expenses incurred in connection therewith and including liabilities, costs, losses and damages for personal injury or death or property damage.

“Material Adverse Effect” shall mean an event or circumstance that, individually or in the aggregate, results in a material adverse effect on the ownership, operations, or value of the Assets, taken as a whole and as currently operated as of the date of this Agreement or a material adverse effect on the ability of Seller to consummate the transactions contemplated by this Agreement; provided, however, that none of the following shall deem to constitute a Material Adverse Effect: (i) any effect resulting from entering into this Agreement or the announcement of the transactions contemplated by this Agreement; (ii) any effect resulting from changes in general market, economic, financial or political conditions in the area in which the Assets are located, the United States or worldwide, or any outbreak of hostilities or war, (iii) any effect resulting from a change in Laws from and after the date of this Agreement; (iv) any reclassification or recalculation of reserves in the ordinary course of business; (v) any changes in the prices of Hydrocarbons; and (vi) natural declines in well performance.

“MMS” shall mean the Minerals Management Service.

“Net Revenue Interest”, with respect to any Well, means the interest in and to all Hydrocarbons produced, saved, and sold from or allocated to such Well, after giving effect to all royalties, overriding royalties, production payments, carried interests, net profits interests, reversionary interests, and other burdens upon, measured by, or payable out of production therefrom.

“NORM” shall mean naturally occurring radioactive material.

“Operating Expenses” shall have the meaning set forth in Article 2.3.

“Performance” shall have the meaning set forth in Article 6.5.

“Permitted Encumbrances” shall mean:

(a) lessor’s royalties, non-participating royalties, overriding royalties, reversionary interests, and similar burdens upon, measured by, or payable out of production if the net cumulative effect of such burdens does not operate to reduce the Net Revenue Interest of Seller in any Well (or the specified zone(s) therein) to an amount less than the Net Revenue Interest set forth on Exhibit A for such Well (or the specified zone(s) therein) and do not obligate Seller to bear a Working Interest for such Well (or the specified zone(s) therein) in any amount greater than the Working Interest set forth on Exhibit A for such Well (or the specified zone(s) therein) (unless the Net Revenue Interest for such Asset is greater than the Net Revenue Interest set forth on Exhibit A in the same proportion as any increase in such Working Interest);

(b) preferential rights to purchase and required third party consents to assignments and similar agreements;

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

(d) Customary Post-Closing Consents;

(e) conventional rights of reassignment;

(f) such Title Defects as Buyer may have waived;

(g) all applicable Laws, and rights reserved to or vested in any Governmental Authority (i) to control or regulate any Asset in any manner; (ii) by the terms of any right, power, franchise, grant, license, or permit, or by any provision of Law, to terminate such right, power, franchise grant, license, or permit or to purchase, condemn, expropriate, or recapture or to designate a purchaser of any of the Assets; (iii) to use such property in a manner which does not materially impair the use of such property for the purposes for which it is currently owned and operated and (iv) to enforce any obligations or duties affecting the Assets to any Governmental Authority, with respect to any franchise, grant, license, or permit;

(h) rights of a common owner of any interest in rights-of-way or easements currently held by Seller and such common owner as tenants in common or through common ownership;

(i) easements, conditions, covenants, restrictions, servitudes, permits, rights-of-way, surface leases and other rights in the Assets for the purpose of surface operations, roads, alleys, highways, railways, pipelines, transmission lines, transportation lines, distribution lines, power lines, telephone lines, and removal of timber, grazing, logging operations, canals, ditches, reservoirs, and other like purposes, or for the joint or common use of real estate, rights-of-way, facilities, and equipment which do not materially impair the use of the Assets as currently owned and operated;

(j) zoning and planning ordinances and municipal regulations;

(k) vendors, carriers, warehousemen’s, repairmen’s, mechanics, workmen’s, materialmen’s, construction or other like liens arising by operation of Law in the ordinary course of business or incident to the construction or improvement of any property in respect of obligations which are not yet due or which are being contested in good faith by appropriate proceedings by or on behalf of Seller;

(l) liens created under leases and/or operating agreements or by operation of Law in respect of obligations that are not yet due or that are being contested in good faith by appropriate proceedings by or on behalf of Seller;

(m) any encumbrance affecting the Assets which is expressly assumed, bonded or paid by Buyer at or prior to Closing or which is discharged by Seller at or prior to Closing;

(n) any matters referenced on Exhibit A; and

(o) the Leases and all other liens, charges, encumbrances, Contracts (including the Applicable Contracts), agreements, instruments, obligations, defects, and irregularities affecting the Assets that individually or in the aggregate are not such as to materially interfere with the operation or use of any of the Assets (as currently owned and operated), do not reduce the Net Revenue Interest of Seller in any Well (or the specified zone(s) therein) to an amount less than the Net Revenue Interest set forth on Exhibit A for such Well (or the specified zone(s) therein) and do not obligate Seller to bear a Working Interest for such Well (or the specified zone(s) therein) in any amount greater than the Working Interest set forth on Exhibit A for such Well (unless the Net Revenue Interest for such Asset is greater than the Net Revenue Interest set forth on Exhibit A in the same proportion as any increase in such Working Interest).

“Person” shall mean any individual, firm, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization, Governmental Authority or any other entity.

“Personal Property” shall have the meaning set forth in Article 2.1(f).

“Preliminary Settlement Statement” shall have the meaning set forth in Article 3.5.

“Property” or “Properties” shall have the meaning set forth in Article 2.1(b).

“Purchase Price” shall have the meaning set forth in Article 3.1.

“Records” shall have the meaning set forth in Article 2.1(h).

“Remediation” shall mean, with respect to an Environmental Condition, the implementation and completion of any remedial, removal, response, construction, closure, disposal or other corrective actions required under Environmental Laws to correct or remove such Environmental Condition.

“Remediation Amount” shall mean, with respect to an Environmental Condition, the present value as of the Closing Date (using an annual discount rate of ten percent (10%)) of the cost (net to Seller’s interest) of the most cost effective Remediation of such Environmental Condition.

“Seller” shall have the meaning set forth in the first paragraph of this Agreement.

“Seller Indemnified Parties” shall have the meaning set forth in Article 14.3(a).

“Survival Period” shall have the meaning set forth in Article 12.1(c)(i).

“Third Party” shall mean any Person other than a party to this Agreement or an Affiliate of a party to this Agreement.

“Title Arbitrator” shall have the meaning set forth in Article 12.2(j).

“Title Benefit” shall mean any right, circumstance or condition that operates (i) to increase the Net Revenue Interest of Seller in any Well (or the specified zone(s) therein) above that shown for such Well in Exhibit A, to the extent the same does not cause a greater than proportionate increase in Seller’s Working Interest therein above that shown in Exhibit A, or (ii) to decrease the Working Interest of Seller in any Well (or the specified zone(s) therein) below that shown for such Well (or the specified zone(s) therein) in Exhibit A, to the extent the same causes a decrease in Seller’s Working Interest that is proportionately greater than the decrease in Seller’s Net Revenue Interest therein below that shown in Exhibit A.

“Title Benefit Amount” shall have the meaning set forth in Article 12.2(e).

“Title Benefit Notice” shall have the meaning set forth in Article 12.2(b).

“Title Claim Date” shall have the meaning set forth in Article 12.2(a).

“Title Defect” means any lien, charge, Encumbrance, defect, or other matter that causes Seller not to have Defensible Title in and to the Assets as of the Effective Time; provided that the following shall not be considered Title Defects:

(i) defects in the chain of title consisting of the failure to recite marital status in a document or omissions of successions of heirship or estate proceedings, unless Buyer

provides affirmative evidence that such failure or omission has resulted in another Person’s superior claim of title to the relevant Asset;

(ii) defects arising out of lack of survey, unless a survey is expressly required by applicable Laws;

(iii) defects arising out of lack of corporate or other entity authorization unless Buyer provides affirmative evidence that such corporate or other entity action was not authorized and results in another Person’s superior claim of title to the relevant Asset;

(iv) defects based on a gap in Seller’s chain of title in the BLM or MMS records as to federal Leases, in the state’s records as to state Leases, or in the county or parish records as to other Leases, unless such gap is affirmatively shown to exist in such records by an abstract of title, title opinion or landman’s title chain which documents shall be included in a Title Defect Notice;

(v) defects that have been cured by applicable Laws of limitations or prescription; and

(vi) any Encumbrance or loss of title resulting from Seller’s conduct of business after the Effective Time in compliance with this Agreement.

“Title Defect Amount” shall have the meaning set forth in Article 12.1(d)(i) of this Agreement.

“Title Defect Notice” should have the meaning set forth in Article 12.2(a).

“Title Defect Property” shall have the meaning set forth in Article 12.2(a).

“Title Indemnity Agreement” shall have the meaning set forth in Article 12.2(d)(ii).

“Transaction Documents” means those documents executed pursuant to or in connection with this Agreement.

“Treasury Regulations” means the regulations promulgated by the United States Department of the Treasury pursuant to and in respect of provisions of the Code. All references herein to sections of the Treasury Regulations shall include any corresponding provision or provisions of succeeding, similar, substitute, proposed or final Treasury Regulations.

“Wells” shall have the meaning set forth in Article 2.1(b).

“Working Interest”, with respect to any Well, means the interest in and to such Well that is burdened with the obligation to bear and pay costs and expenses of maintenance, development and operations on or in connection with such Well, but without regard to the effect of any royalties, overriding royalties, production payments, net profits interests and other similar burdens upon, measured by, or payable out of production therefrom.

1.2 References. The words “hereby,” “herein,” “hereinabove,” “hereinafter,” “hereinbelow,” “hereof,” “hereto,” “hereunder,” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular article, section, or provision of this Agreement. References in this Agreement to articles, sections, exhibits, or schedules are to such articles, sections, exhibits, or schedules of this Agreement unless otherwise specified.

1.3 Articles. This Agreement, for convenience only, has been divided into articles. The rights and other legal relations of the parties hereto shall be determined from this Agreement as an entirety and without regard to the aforesaid division into articles and sections and without regard to headings prefixed to such articles.

1.4 Number and Gender. Whenever the context requires, reference herein made to a single number shall be understood to include the plural; and likewise, the plural shall be understood to include the singular. Words denoting sex shall be construed to include the masculine, feminine, and neuter, when such construction is appropriate; and specific enumeration shall not exclude the general but shall be construed as cumulative. Definitions of terms defined in the singular or plural shall be equally applicable to the plural or singular, as applicable, unless otherwise indicated.

ARTICLE II

PURCHASE AND SALE

2.1 Purchase and Sale. Subject to the terms and conditions of this Agreement, Seller agrees to sell, and Buyer agrees to purchase and pay for, all of Seller’s right, title and interest in and to the following (less and except for the Excluded Assets, collectively, the “Assets”):

(a) the oil and gas leases more particularly described in Exhibit A, subject to any depth restrictions described in Exhibit A (collectively, the “Leases”), together with any and all other rights, titles, and interests of Seller in and to (i) the leasehold estates created thereby, subject to any depth restrictions described in Exhibit A and to the terms, conditions, covenants, and obligations set forth in the Leases and/or Exhibit A and (ii) the lands covered by the Leases or included in units with which the Leases may have been pooled or unitized, subject to any depth restrictions described in Exhibit A (the “Lands”), including in each case, without limitation, fee interests, royalty interests, overriding royalty interests, production payments, net profits interests, carried interests, reversionary interests, and all other interests of any kind or character;

(b) all oil and gas wells located on the Leases and the Lands or on other leases or lands with which the Leases and/or the Lands may have been pooled or unitized, including, without limiting the foregoing in any respect, the wells set forth on Exhibit A and the wells located on or associated with the Assets listed on Exhibit B-1 (the “Wells”), and all Hydrocarbons produced therefrom or allocated thereto (the Leases, the Lands, and the Wells being collectively referred to hereinafter as the “Properties”);

(c) all rights and interests in, under, or derived from all unitization and pooling agreements in effect with respect to the Properties and the units created thereby which accrue or are attributable to the interests of Seller in the Properties;

(d) to the extent that they may be assigned, all Applicable Contracts;

(e) to the extent that they may be assigned, all permits, licenses, servitudes, easements, rights-of-way and other surface agreements to the extent used primarily in connection with the ownership or operation of the Properties or the Personal Property, including, without limiting the foregoing in any respect, the segments of the High Island Pipeline System that are described on Exhibit A-2 and that segment of EI 305 pipeline that is described on Exhibit A.

(f) all equipment, machinery, fixtures, and other real, personal, and mixed property, functional and nonfunctional, operational and nonoperational, known or unknown, located on the Properties or the other Assets described above as of the Effective Time, including, without limitation, saltwater disposal wells, well equipment, casing, rods, tanks, boilers, buildings, tubing, pumps, motors, fixtures, machinery, compression equipment, flow lines, pipelines (including, without limiting the foregoing in any respect, the segments of the High Island Pipeline System that are described on Exhibit A-2 and that segment of EI 305 pipeline that is described on Exhibit A), gathering systems, processing and separation facilities, platforms, structures, materials, and other items used or formerly used in the operation thereof, including, without limiting the foregoing in any respect, the Assets listed on Exhibit A-3, and all of the types of Assets referenced in this subparagraph (f) that are located on or associated with the Assets listed on Exhibit A-3 (“Personal Property”);

(g) all Imbalances relating to the Properties or other Assets; and

(h) all of the rights, titles, and interests of Seller in and to all of the files, records, information, and data, whether written or electronically stored, primarily relating to the Assets, including, without limitation: (i) land and title records (including abstracts of title, title opinions, and title curative documents); (ii) contract files; (iii) correspondence; (iv) operations, environmental, production, and accounting records and (v) facility and well records but excluding any of the foregoing items that are Excluded Assets (“Records”).

2.2 Excluded Assets. Seller shall reserve and retain all of the Excluded Assets.

2.3 Revenues and Expenses. Subject to the provisions hereof, Seller shall remain entitled to all of the rights of ownership (including, without limitation, the right to all production, proceeds of production and other proceeds) and shall remain responsible for all Operating Expenses, in each case attributable to the Assets for the period of time prior to the Effective Time. Subject to the provisions hereof, and subject to the occurrence of the Closing, Buyer shall be entitled to all of the rights of ownership (including, without limitation, the right to all production, proceeds of production, and other proceeds), and shall be responsible for all Operating Expenses, in each case, attributable to the Assets for the period of time from and after the Effective Time. All Operating Expenses attributable to the Assets, in each case that are: (i) incurred with respect to operations conducted or production prior to the Effective Time shall be paid by or allocated to Seller and (ii) incurred with respect to operations conducted or production

after the Effective Time shall be paid by or allocated to Buyer. “Operating Expenses” means all operating expenses (including without limitation costs of insurance and ad valorem, property, severance, production and similar taxes based upon or measured by the ownership or operation of the Assets or the production of Hydrocarbons therefrom, but excluding any other taxes) and capital expenditures incurred in the ownership and operation of the Assets in the ordinary course of business and, where applicable, in accordance with the relevant operating or unit agreement, if any, and overhead costs charged to the Assets under the relevant operating agreement or unit agreement, if any. Operating Expenses do not include the following which are addressed in other provisions of this Agreement: Liabilities, attributable to (i) Liabilities for personal injury or death, property damage or violation of any Law, (ii) obligations to plug wells, dismantle or decommission facilities, close pits and restore the surface around such wells, facilities and pits, (iii) environmental Liabilities, including obligations to remediate any contamination of groundwater, surface water, soil, sediments or Personal Property under applicable Environmental Laws, (iv) obligations with respect to Imbalances, (v) obligations to pay working interests, royalties, overriding royalties or other interest owners revenues or proceeds attributable to sales of Hydrocarbons relating to the Properties, including those held in suspense.

ARTICLE III

PURCHASE PRICE

3.1 Purchase Price. The purchase price for the Assets shall be Four Million Dollars ($4,000,000.00) (the “Purchase Price”), payable in United States currency by wire transfer in same day funds as and when provided in this Agreement.

3.2 Deposit. (a) Concurrently with the execution of this Agreement Buyer has deposited by wire transfer in same day funds into escrow with Seller the sum of Four Hundred Thousand Dollars ($400,000.00), representing ten percent (10%) of the Purchase Price (the “Deposit”). The Deposit shall be applied toward the Purchase Price at the Closing without any interest earned thereon.

(b) If (i) all conditions precedent to the obligations of Buyer set forth in Article VII have been met, and (ii) the transactions contemplated by this Agreement are not consummated on or before the Closing Date because of: (A) the failure of Buyer to materially perform any of its obligations hereunder, or (B) the failure of any of Buyer’s representations or warranties hereunder to be true and correct in all material respects as of the Closing, then, in such event, Seller shall have the right to terminate this Agreement, and retain the Deposit as liquidated damages.

(c) If this Agreement is terminated by the mutual written agreement of Buyer and Seller, or if the Closing does not occur on or before the Closing Date for any reason other than as set forth in Article 3.2(b), then Buyer shall be entitled to the delivery of the Deposit, free of any claims by Seller with respect thereto. Buyer and Seller shall thereupon have the rights and obligations set forth in Article 15.2

3.3 Adjustments to Purchase Price. The Purchase Price shall be adjusted as follows, and the resulting amount shall be herein called the “Adjusted Purchase Price”:

(a) The Purchase Price shall be adjusted upward by the following amounts (without duplication):

(i) an amount equal to the value of all Hydrocarbons attributable to the Assets in storage or existing in stock tanks pipelines, plants and/or platforms (including inventory) as of the Effective Time, the value to be based upon the contract price in effect as of the Effective Time (or the market value, if there is no contract price, in effect as of the Effective Time), less amounts payable as royalties, overriding royalties, and other burdens upon, measured by, or payable out of such production and severance taxes deducted by the purchaser of such production; without limiting the foregoing in any respect, this value of Hydrocarbons includes 520 barrels of line fill oil at $48.00/barrel, the adjustment for which is $24,950.00

(ii) an amount equal to all Operating Expenses and other costs and expenses that are attributable to the Assets during the Interim Period, whether paid before or after the Effective Time, including, without limitation, (A) bond and insurance premiums paid by or on behalf of Seller during the Interim Period, (B) royalties or other burdens upon, measured by or payable out of proceeds of production, (C) rentals and other lease maintenance payments and (D) ad valorem, property, severance and production taxes and any other taxes (exclusive of income taxes) based upon or measured by the ownership of the Assets, the production of Hydrocarbons, or the receipt of proceeds therefrom;

(iii) if Seller is the operator under a joint operating agreement covering any of the Properties, an amount equal to the costs and expenses paid by Seller on behalf of the other joint interest owners that are attributable to the Interim Period;

(iv) Title Benefit Amounts as a result of any Title Benefits for which the Title Benefit Amount has been determined prior to Closing;

(v) without duplication of any other amounts set forth in this Article 3.3(a), the amount of all taxes prorated to Buyer but paid by Seller in accordance with Article 16.2;

(vi) Intentionally deleted.

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

(b) The Purchase Price shall be adjusted downward by the following amounts (without duplication):

(i) an amount equal to all proceeds attributable to the sale of Hydrocarbons produced from or allocable to the Assets during the Interim Period, net of expenses (other than Operating Expenses) directly incurred in earning or receiving such proceeds, and any sales, excise or similar Taxes in connection therewith not reimbursed to Seller by a third party purchaser;

(ii) an amount equal to all other proceeds received by Seller (other than from the sale of Hydrocarbons produced from or allocable to the Assets) to which Buyer is entitled pursuant to Article 2.3;

(iii) if Seller makes the election under Article 12.2(d)(i) with respect to a Title Defect, the Title Defect Amount with respect to such Title Defect if the Title Defect Amount has been determined prior to Closing;

(iv) if Seller makes the election under Article 13.1(b)(i) with respect to an Environmental Defect, the Remediation Amount with respect to such Environmental Defect if the Remediation Amount has been determined prior to Closing;

(v) an amount determined pursuant to Article 12.2(d)(iii) or Article 13.1(b)(iii) for any Properties and other Assets excluded from the Assets pursuant to such Articles;

(vi) without duplication of any other amounts set forth in this Article 3.3, the amount of all taxes prorated to Seller but payable by Buyer in accordance with Article 16.2;

(vii) to the extent that Seller is overproduced as shown with respect to the net Imbalances set forth in Schedule 4.13, as complete and final settlement of all Imbalances, the sum of *** Dollars ($***) which is an amount equal to the product of (A) *** Mcf times (B) $***/Mcf;

(viii) an amount equal to all proceeds from sales of Hydrocarbons relating to the Properties and payable to owners of working interests, royalties, overriding royalties and other similar interests (in each case) that are held by Seller in suspense as of the Closing Date, including, without limitation, royalty proceeds held in suspense;

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

3.4 Adjustment Methodology. When available, actual figures will be used for the adjustments to the Purchase Price at the Closing. To the extent actual figures are not available, estimates will be used subject to final adjustments in accordance with Article 3.6.

3.5 Preliminary Settlement Statement. Not less than three (3) business days prior to the Closing, Seller shall prepare and submit to Buyer for review a draft settlement statement (the “Preliminary Settlement Statement”) that shall set forth the Adjusted Purchase Price, reflecting each adjustment made in accordance with this Agreement as of the date of preparation of such Preliminary Settlement Statement and the calculation of the adjustments used to determine such amount, together with the designation of Seller’s accounts for the wire transfers of funds as set forth in Article 9.3(d). Within two (2) business days of receipt of the Preliminary Settlement Statement, Buyer will deliver to Seller a written report containing all changes with the explanation therefor that Buyer proposes to be made to the Preliminary Settlement Statement. The Preliminary Settlement Statement, as agreed upon by the parties, will be used to adjust the Purchase Price at Closing.

3.6 Final Settlement Statement. On or before ninety (90) days after the Closing, a final settlement statement (the “Final Settlement Statement”) will be prepared by Seller, based on actual income and expenses during the Interim Period and which takes into account all final adjustments made to the Purchase Price and shows the resulting final Purchase Price (“Final Price”). The Final Settlement Statement shall set forth the actual proration of the amounts required by this Agreement. As soon as practicable, and in any event within thirty (30) days, after receipt of the Final Settlement Statement, Buyer shall return a written report containing any proposed changes to the Final Settlement Statement and an explanation of any such changes and the reasons therefor (the “Dispute Notice”). If the Final Price set forth in the Final Settlement Statement is mutually agreed upon by Seller and Buyer, the Final Settlement Statement and the Final Price, shall be final and binding on the parties hereto. Any difference in the Adjusted Purchase Price as paid at Closing pursuant to the Preliminary Settlement Statement and the Final Price shall be paid by the owing party within ten (10) days to the owed party. All amounts paid pursuant to this Article 3.6 shall be delivered in United States currency by wire transfer of immediately available funds to the account specified in writing by the relevant party.

3.7 Disputes. If Seller and Buyer are unable to resolve the matters addressed in the Dispute Notice, each of Buyer and Seller shall within fourteen (14) business days after the delivery of such Dispute Notice, summarize its position with regard to such dispute in a written document of twenty pages or less and submit such summaries to Deloittte & Touche USA LLP, or such other party as the parties may mutually select (the “Accounting Arbitrator”), together with the Dispute Notice, the Final Settlement Statement and any other documentation such party may desire to submit. Within twenty (20) business days after receiving the parties’ respective submissions, the Accounting Arbitrator shall render a decision choosing either Seller’s position or Buyer’s position with respect to each matter addressed in any Dispute Notice, based on the materials described above. Any decision rendered by the Accounting Arbitrator pursuant hereto shall be final, conclusive and binding on Seller and Buyer and will be enforceable against any of the parties in any court of competent jurisdiction. The costs of such Accounting Arbitrators shall be borne one-half by Buyer and one-half by Seller.

3.8 Allocation of Purchase Price / Allocated Values. Buyer and Seller agree that the unadjusted Purchase Price shall be allocated among the Assets, in accordance with the principles of Section 1060 of the Code and the Treasury Regulations, as set forth in Schedule 3.8 of this Agreement. The “Allocated Value” for any Asset equals the portion of the unadjusted Purchase Price allocated to such Asset on Schedule 3.8 and such Allocated Value shall be used in calculating adjustments to the Purchase Price as provided herein. Buyer and Seller agree (i) that the Allocated Values, as adjusted, shall be used by Seller and Buyer as the basis for reporting asset values and other items for purposes of all federal, state, and local tax returns, including without limitation Internal Revenue Service Form 8594 and (ii) that neither they nor their Affiliates will take positions inconsistent with such Allocated Values in notices to Governmental Authorities, in audit or other proceedings with respect to taxes, in notices to preferential purchaser right holders, or in other documents or notices relating to the transactions contemplated by this Agreement.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF SELLER

4.1 Organization, Existence. DEPC is a limited partnership duly formed and validly existing under the laws of the State of Oklahoma. DLC is a corporation duly organized, validly existing, and in good standing under the laws of the State of Louisiana. DEPPC is a corporation duly organized, validly existing, and in good standing under the laws of Delaware. Seller has all requisite power and authority to own and operate its property (including, without limitation, its interests in the Assets) and to carry on its business as now conducted. Seller is duly licensed or qualified to do business as a foreign limited partnership or corporation, as applicable, and is in good standing in all jurisdictions in which such qualification is required by Law, except where the failure to qualify or be in good standing would not have a Material Adverse Effect.

4.2 Authorization. Seller has full power and authority to enter into and perform this Agreement and the Transaction Documents to which it is a party and the transactions contemplated herein and therein. The execution, delivery, and performance by Seller of this Agreement have been duly and validly authorized and approved by all necessary corporate or partnership action (as applicable) on the part of Seller. This Agreement is, and the Transaction Documents to which Seller is a party when executed and delivered by Seller will be, the valid and binding obligation of Seller and enforceable against Seller in accordance with their respective terms, subject to the effects of bankruptcy, insolvency, reorganization, moratorium, and similar Laws, as well as to principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at Law).

4.3 No Conflicts. Subject to the receipt of all consents and approvals from Third Parties in connection with the transactions contemplated hereby, the execution, delivery, and performance by Seller of this Agreement and the consummation of the transactions contemplated herein will not (i) conflict with or result in a breach of any provisions of the organizational documents or other governing documents of Seller, (ii) result in a default or the creation of any Encumbrance or give rise to any right of termination, cancellation, or acceleration under any of the terms, conditions, or provisions of any Lease, Applicable Contract, note, bond, mortgage, indenture, license, or other material agreement to which any Seller is a party or by which any Seller or the Assets may be bound or (iii) violate any Law applicable to any Seller or any of the Assets, except in the case of clauses (ii) and (iii) where such default, Encumbrance, termination, cancellation, acceleration or violation would not have a Material Adverse Effect.

4.4 Consents. Except (a) as set forth in Schedule 4.4, (b) for Customary Post-Closing Consents, (c) under Contracts that are terminable upon not greater than sixty (60) days notice without payment of any fee, and (d) preferential purchase rights set forth in Schedule 4.10, there are no consents or other restrictions on assignment, including, but not limited to, requirements for consents from Third Parties to any assignment (in each case) that would be applicable in connection with the transfer of the Assets or the consummation of the transactions contemplated by this Agreement by Seller.

4.5 Bankruptcy. There are no bankruptcy, reorganization or receivership proceedings pending, being contemplated by or, to Seller’s Knowledge, threatened against Seller.

4.6 Foreign Person. Seller is not a “foreign person” within the meaning of Section 1445 of the Code.

4.7 Litigation. Except as set forth in Schedule 4.7, there is no suit, action or litigation by any Person by or before any Governmental Authority, and no legal, administrative or arbitration proceedings, pending, or to Seller’s Knowledge, threatened against Seller or the Assets.

4.8 Material Contracts. Schedule 4.8 sets forth all Applicable Contracts of the type described below (collectively, the “Material Contracts”):

(i) any Applicable Contract that can reasonably be expected to result in aggregate payments by Seller of more than Five Hundred Thousand Dollars ($500,000) during the current or any subsequent fiscal year (based solely on the terms thereof and without regard to any expected increase in volumes or revenues);

(ii) any Applicable Contract that can reasonably be expected to result in aggregate revenues to Seller of more than Five Hundred Dollars ($500,000) during the current or any subsequent fiscal year (based solely on the terms thereof and without regard to any expected increase in volumes or revenues);

(iii) any Hydrocarbon purchase and sale, transportation, processing or similar Contract that is not terminable without penalty on sixty (60) days or less notice;

(iv) any indenture, mortgage, loan, credit or sale-leaseback or similar contract that can reasonably be expected to result in aggregate payments by Seller of more than One Hundred Thousand Dollars ($100,000) during the current or any subsequent fiscal year;

(v) any Applicable Contract (excluding rental compressors) that constitutes a lease under which Seller is the lessor or the lessee of real or personal property which lease (A) cannot be terminated by Seller without penalty upon sixty (60) days or less notice and (B) involves an annual base rental of more than Two Hundred Fifty Thousand Dollars ($250,000);

(vi) any farmout, exploration or participation agreement, production handling agreement, operating agreement or similar contracts or agreements entered into by Seller with respect to the Assets on or after the Effective Time;

(vii) any Applicable Contract that can reasonably be expected under existing circumstances to result in Seller’s responsibility for liabilities or obligations pertaining to the Assets in an amount greater than Five Hundred Thousand Dollars ($500,000.00), except as to contracts pertaining to plugging and abandonment obligations with respect to the Assets to the extent such obligations are not disproportionate to Seller’s interests in the affected Assets; and

(viii) any Applicable Contract with any Affiliate of Seller that will not be terminated prior to Closing.

(b) There exist no material defaults under the Material Contracts by Seller or, to Seller’s Knowledge, by any other Person that is a party to such Material Contracts, and no event has occurred that with notice or lapse of time or both would constitute any material default under any such Contract by Seller or, to Seller’s Knowledge, any other Person who is a party to such Material Contract. Prior to the execution of this Agreement, Seller has made available to Buyer copies of each Material Contract and all amendments thereto.

4.9 No Violation of Laws. To Seller’s Knowledge, except as set forth on Schedule 4.9, Seller has not violated any applicable Laws with respect to the ownership and operation of the Assets. This Article 4.9 does not include any matters with respect to Environmental Laws, such matters being addressed exclusively in Article 4.15.

4.10 Preferential Rights. Except as set forth in Schedule 4.10, there are no preferential rights to purchase that are applicable to the transfer of the Assets in connection with the transactions contemplated hereby.

4.11 Royalties, Etc. Except for such items that are being held in suspense for which the Purchase Price is adjusted pursuant to Article 3.3(b)(viii), Seller has paid all royalties, overriding royalties and other burdens on production due by Seller with respect the Properties, or if not paid, is contesting such royalties and other burdens in good faith in the normal course of business.

4.12 Personal Property. To Seller’s Knowledge, except as set forth in Schedule 4.12, all Personal Property constituting a part of the currently operational Assets are in a state of repair so as to be adequate for normal operations.

4.13 Imbalances. To Seller’s Knowledge, Schedule 4.13 sets forth all material Imbalances associated with the Properties as of the Effective Time.

4.14 Current Commitments. Schedule 4.14 sets forth, as of the date of this Agreement, all authorities for expenditures (“AFE’s”) relating to the Properties to drill or rework Wells or for other capital expenditures pursuant to any of the Material Contracts or any applicable joint operating agreement for which all of the activities anticipated in such AFE’s or commitments have not been completed by the date of this Agreement.

4.15 Environmental.

(a) With respect to the Assets, Seller has not entered into, or is not subject to, any agreements, consents, orders, decrees, judgments, license or permit conditions, or other directives of any Governmental Authority in existence as of the date of this Agreement based on any Environmental Laws that relate to the future use of any of the Assets and that require any change in the present conditions of any of the Assets.

(b) Except as set forth in Schedule 4.15, Seller has not received written notice from any Person of any release, disposal, event, condition, circumstance, activity, practice or incident concerning any land, facility, asset or property included in the Assets that: (i) interferes with or prevents compliance by Seller with any Environmental Law or the terms of any license or permit issued pursuant thereto; or (ii) gives rise to or results in any common law or other

liability of Seller to any Person which, in the case of either clause (i) or (ii) hereof, would have a Material Adverse Effect.

(c) To Seller’s Knowledge, all material reports, studies, written notices from environmental Governmental Authorities, tests, analyses, and other documents specifically addressing environmental matters related to Seller’s ownership or operation of the Properties, which are in Seller’s possession, have been made available to Buyer.

4.16 Production Taxes. Except as disclosed in Schedule 4.16, during the period of Seller’s ownership of the Assets, all ad valorem, property, production, severance, and similar taxes and assessments (including penalties and interest) based on or measured by the ownership of the Assets, the production of Hydrocarbons, or the receipt of proceeds therefrom that have become due and payable before the Effective Time have been properly paid, other than taxes which have been contested in good faith.

4.17 Intentionally deleted.

4.18 Brokers Fees. Seller has incurred no liability, contingent or otherwise, for brokers’ or finders’ fees relating to the transactions contemplated by this Agreement for which Buyer or any Affiliate of Buyer shall have any responsibility.

ARTICLE V

BUYER’S REPRESENTATIONS AND WARRANTIES

Buyer represents and warrants to Seller the following:

5.1 Organization; Existence. Buyer is a Delaware corporation, duly organized, validly existing, and in good standing under the laws of the state of its formation and has all requisite power and authority to own and operate its property and to carry on its business as now conducted.

5.2 Authorization. Buyer has full power and authority to enter into and perform this Agreement and the Transaction Documents to which it is a party and the transactions contemplated herein and therein. The execution, delivery, and performance by Buyer of this Agreement have been duly and validly authorized and approved by all necessary corporate or partnership action (as applicable) on the part of Buyer. This Agreement is, and the Transaction Documents to which Buyer is a party when executed and delivered by Seller will be, the valid and binding obligation of Buyer and enforceable against Buyer in accordance with their respective terms, subject to the effects of bankruptcy, insolvency, reorganization, moratorium, and similar laws, as well as to principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at Law).

5.3 No Conflicts. The execution, delivery, and performance by Buyer of this Agreement and the consummation of the transactions contemplated herein will not (i) conflict with or result in a breach of any provisions of the organizational or other governing documents of Buyer, (ii) result in a default or the creation of any lien or encumbrance or give rise to any right of termination, cancellation, or acceleration under any of the terms, conditions, or provisions of any note, bond, mortgage, indenture, license, or other agreement to which Buyer is

a party or by which Buyer or any of its property may be bound or (iii) violate any Law or Order applicable to Buyer or any of its property, except in the case of clauses (ii) and (iii) where such default, Encumbrance, termination, cancellation, acceleration or violation would not have a material adverse effect upon the ability of Buyer to consummate the transactions contemplated by this Agreement.

5.4 Consents. There are no consents or other restrictions on assignment, including, but not limited to, requirements for consents from Third Parties to any assignment (in each case) that would be applicable in connection with the consummation of the transactions contemplated by this Agreement by Buyer.

5.5 Bankruptcy. There are no bankruptcy, reorganization or receivership proceedings pending, being contemplated by or, to Buyer’s knowledge, threatened against Buyer.

5.6 Litigation. There is no suit, action, investigation or inquiry by any Person or by or before any Governmental Authority, and no legal, administrative, or arbitration proceedings pending, or to Buyer’s knowledge, threatened against Buyer, or to which Buyer is a party, that would have a material adverse effect upon the ability of Buyer to consummate the transactions contemplated in this Agreement.

5.7 Financing. Buyer has, and shall have as of the Closing Date, sufficient funds with which to pay the Purchase Price and consummate the transactions contemplated by this Agreement.

5.8 Regulatory. Buyer is now (or will be as of the Closing Date), and hereafter (or thereafter) shall continue to be, qualified to own and assume operatorship of federal and state oil, gas and mineral leases in all jurisdictions (including state waters and the federal waters in the Gulf of Mexico) where the Assets to be transferred to it are located, and the consummation of the transactions contemplated in this Agreement will not cause Buyer to be disqualified as such an owner or operator. To the extent required by any applicable Laws, Buyer currently has (or will have as of the Closing Date), and will hereafter (or thereafter) continue to maintain, lease bonds, area-wide bonds or any other surety bonds as may be required by, and in accordance with, all applicable Laws governing the ownership and operation of such leases and has filed any and all required reports necessary for such operations with all Governmental Authorities having jurisdiction over such operations.

5.9 Independent Evaluation. Buyer is sophisticated in the evaluation, purchase, ownership and operation of oil and gas properties and related facilities. In making its decision to enter into this Agreement and to consummate the transaction contemplated herein, Buyer (a) has relied or shall rely solely on its own independent investigation and evaluation of the Assets and the advice of its own legal, tax, economic, environmental, engineering, geological and geophysical advisors and the express provisions of this Agreement and not on any comments, statements, projections or other materials made or given by any representatives or consultants or advisors engaged by Seller, and (b) has satisfied or shall satisfy itself through its own due diligence as to the environmental and physical condition of and contractual arrangements and other matters affecting the Assets. Buyer has no knowledge of any fact that results in the breach of any representation, warranty or covenant of Seller given hereunder.

5.10 Broker’s Fees. Buyer has incurred no liability, contingent or otherwise, for brokers’ or finders’ fees relating to the transactions contemplated by this Agreement for which Seller or Seller’s Affiliates shall have any responsibility.

5.11 Accredited Investor. Buyer is an “accredited investor,” as such term is defined in Regulation D of the Securities Act of 1933, as amended, and will acquire the Assets for its own account and not with a view to a sale or distribution thereof in violation of the Securities Act of 1933, as amended, and the rules and regulations thereunder, any applicable state blue sky Laws or any other applicable securities Laws.

ARTICLE VI

CERTAIN AGREEMENTS

6.1 Conduct of Business. Except as set forth in Schedule 6.1, Seller agrees that from and after the date hereof until Closing, except as expressly contemplated by this Agreement or as expressly consented to in writing by Buyer, to:

(a) operate the Assets in the usual, regular and ordinary manner consistent with past practice;

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

(c) not enter into a Contract that if entered into prior to the date of this Agreement, would be required to be listed in a schedule attached to this Agreement, or materially amend or change the terms of any such Contract; and

(d) not transfer, sell, mortgage, pledge or dispose of any material portion of the Assets other than the sale and/or disposal of Hydrocarbons in the ordinary course of business and sales of equipment that is no longer necessary in the operation of the Assets or for which replacement equipment has been obtained.

Buyer acknowledges Seller owns undivided interests in certain of the properties comprising the Assets that it is not the operator thereof, and Buyer agrees that the acts or omissions of the other working interests owners (including the operators) who are not Seller or any Affiliates of Seller shall not constitute a breach of the provisions of this Article 6.1, nor shall any action required by a vote of working interest owners constitute such a breach so long as Seller has voted its interest in a manner that complies with the provisions of this Article 6.1.

6.2 Successor Operator. While Buyer acknowledges that it desires to succeed Seller as operator of those Assets or portions thereof that Seller may presently operate, Buyer acknowledges and agrees that Seller cannot and does not covenant or warrant that Buyer shall become successor operator of same since the Assets or portions thereof may be subject to operating or other agreements that control the appointment of a successor operator. Seller agrees, however, that as to the Assets it operates, it shall use its commercially reasonable efforts

to support Buyer’s efforts to become successor operator effective as of the Closing (at Buyer’s sole cost and expense) and to designate and/or appoint by assignment, to the extent legally possible, Buyer as successor operator effective as of the Closing.

6.3 HSR Act. If applicable, within five (5) business days following the execution by Buyer and Seller of this Agreement, Buyer and Seller will each prepare and simultaneously file with the DOJ and the FTC the notification and report form required for the transactions contemplated by this Agreement by the HSR Act, and request early termination of the waiting period thereunder. Buyer and Seller agree to respond promptly to any inquiries from the DOJ or the FTC concerning such filings and to comply in all material respects with the filing requirements of the HSR Act. Buyer and Seller shall cooperate with each other and, subject to the terms of the Confidentiality Agreement, shall promptly furnish all information to the other party that is necessary in connection with Buyer’s and Seller’s compliance with the HSR Act. Buyer and Seller shall keep each other fully advised with respect to any requests from or communications with the DOJ or FTC concerning such filings and shall consult with each other with respect to all responses thereto. Each of Seller and Buyer shall use its reasonable efforts to take all actions reasonably necessary and appropriate in connection with any HSR Act filing to consummate the transactions consummated hereby.

6.4 Governmental Bonds. Buyer acknowledges that none of the bonds, letters of credit and guarantees, if any, posted by Seller or its Affiliates with Governmental Authorities and relating to the Assets are transferable to Buyer. On or before the Closing Date, Buyer shall obtain, or cause to be obtained in the name of Buyer or its designee, replacements for such bonds, letters of credit and guarantees, to the extent such replacements are necessary to permit the cancellation of the bonds, letters of credit and guarantees posted by Seller and/or its Affiliates. In addition, at or prior to Closing, Buyer shall deliver to Seller evidence of the posting of bonds or other security with all applicable Governmental Authorities meeting the requirements of such authorities to own and, where appropriate, operate, the Assets.

6.5 GUARANTY AND AGREEMENT OF BUYER AND GUARANTOR. At or before Closing, Buyer and Guarantor warrant and represent to Seller that Buyer shall deliver to Seller an irrevocable Guaranty in the form attached hereto as Exhibit H, fully executed by Guarantor, and binding upon Guarantor and the successors and assigns of Guarantor. This Guaranty is being provided in lieu of the performance bond or other measure of financial security that Seller would otherwise require. In no event shall any provisions of this Agreement, including this Article 6.5, be deemed to limit any obligations of Guarantor pursuant to the Guaranty. If the Guaranty is not provided by the corporate entity, TETRA Technologies, Inc., then Buyer shall provide a letter of credit or performance bond, in either instance in a form approved by Seller at its sole option, for the full amount of the plugging and abandonment and remediation for the Assets, as estimated by Seller at its sole option. As a material consideration for the conveyance of the Assets from Seller to Buyer, Guarantor executes this Agreement, and, notwithstanding any provisions of the Guaranty that may indicate the Guaranty to be more limited than the requirements of this Article 6.5, Guarantor (on behalf of Guarantor, its successors and assigns) agrees to fully guarantee to Seller (and its successors and assigns) the performance of all of Buyer’s (and the performance of all of Buyer’s successors and assigns as to all or any portion of the Assets) obligations of whatsoever nature (including, without limiting the foregoing in any respect, Buyer’s indemnification obligations) under this Agreement, including,

without limiting the foregoing in any respect, under the Transition Agreement referenced in Article 16.18(a), and including, without limiting the foregoing in any respect, the “Assumed Obligations” as defined in Article 14.1, and all other obligations of Buyer pursuant to Article 14. “Performance” as used in Article 6.5 means the complete Performance of all of Buyer’s obligations under this Agreement, including without limiting the foregoing in any respect, compliance with and completion of the obligations to the satisfaction of all federal, state or other Governmental Authorities and all Laws. To the extent any or all of the obligations described in this Article 6.5 are not performed by Buyer in full compliance with this Agreement, Guarantor further warrants and represents to, and agrees with, Seller that Guarantor shall expeditiously perform those obligations at Guarantor’s sole, cost, risk and expense.

6.6 Record Retention. Buyer, for a period of seven (7) years following Closing, will (i) retain the Records, (ii) provide Seller, its Affiliates, and its and their officers, employees and representatives with access to the Records (to the extent that Seller has not retained the original or a copy) during normal business hours for review and copying at Seller’s expense, and (iii) provide Seller, its Affiliates, and its and their officers, employees and representatives with access, during normal business hours, to materials received or produced after Closing relating to any indemnity claim made under Article 14.2 of this Agreement for review and copying at Seller’s expense.

6.7 Notifications. Buyer will notify Seller promptly after the discovery by Buyer that any representation or warranty of Seller contained in this Agreement is, becomes or will be untrue in any material respect on or before the Closing Date.

ARTICLE VII

BUYER’S CONDITIONS TO CLOSING

The obligations of Buyer to consummate the transactions provided for herein are subject, at the option of Buyer, to the fulfillment on or prior to the Closing of each of the following conditions:

7.1 Representations. The representations and warranties of Seller set forth in this Agreement shall be true and correct in all material respects on and as of the Closing Date, with the same force and effect as though such representations and warranties had been made or given on and as of the Closing Date.

7.2 Performance. Seller shall have materially performed or complied with all obligations, agreements, and covenants contained in this Agreement as to which performance or compliance by Seller is required prior to or at the Closing Date so as to not result in a Material Adverse Affect.

7.3 No Legal Proceedings. No material suit, action, or other proceeding shall be pending before any Governmental Authority seeking to restrain, prohibit, enjoin, or declare illegal, or seeking substantial damages in connection with, the transactions contemplated by this Agreement.

7.4 Title Defects and Environmental Defects. The sum of (i) all Title Defect Amounts determined under Article 12.2(d)(i) prior to the Closing, less the sum of all Title

Benefit Amounts determined under Article 12.2(b) prior to Closing, plus (ii) all Remediation Amounts for Environmental Defects determined under Article XIII prior to the Closing, shall be less than twenty percent (20%) of the Purchase Price.

7.5 HSR Act. If applicable, the waiting period under the HSR Act applicable to the consummation of the transactions contemplated hereby shall have expired, notice of early termination shall have been received, or a consent order issued (in form and substance satisfactory to Seller) by or from applicable Governmental Authorities.

ARTICLE VIII

SELLER’S CONDITIONS TO CLOSING

The obligations of Seller to consummate the transactions provided for herein are subject, at the option of Seller, to the fulfillment on or prior to the Closing of each of the following conditions precedent:

8.1 Representations. The representations and warranties by Buyer set forth in this Agreement shall be true and correct in all material respects on and as of the Closing Date, with the same force and effect as though such representations and warranties had been made or given on and as of the Closing Date.

8.2 Performance. Buyer shall have materially performed or complied with all obligations, agreements, and covenants contained in this Agreement as to which performance or compliance by Buyer is required prior to or at the Closing Date.

8.3 No Legal Proceedings. No material suit, action, or other proceeding shall be pending before any Governmental Authority seeking to restrain, prohibit, or declare illegal, or seeking substantial damages in connection with, the transactions contemplated by this Agreement.

8.4 Title Defects and Environmental Defects. The sum of (i) all Title Defect Amounts determined under Article 12.2(d)(i) prior to the Closing, less the sum of all Title Benefit Amounts determined under Article 12.2(b) prior to Closing, plus (ii) all Remediation Amounts for Environmental Defects determined under Article XIII prior to the Closing, shall be less than twenty percent (20%) of the Purchase Price.

8.5 HSR Act. If applicable, the waiting period under the HSR Act applicable to the consummation of the transactions contemplated hereby shall have expired, notice of early termination shall have been received, or a consent order issued (in form and substance satisfactory to Seller) by or from applicable Governmental Authorities.

8.6 Replacement Bonds. Buyer shall have obtained, or caused to be obtained, in the name of Buyer or its designee, replacements for Seller’s and/or its Affiliates’ bonds, letters of credit and guarantees, and such other bonds and Guaranty to the extent required by Articles 6.4 and 6.5.

ARTICLE IX

CLOSING

9.1 Date of Closing. Subject to the conditions stated in this Agreement, the sale by Seller and the purchase by Buyer of the Assets pursuant to this Agreement (the “Closing”) shall occur on or before August 31, 2005 or such other date as Buyer and Seller may agree upon in writing. The date of the Closing shall be the “Closing Date”.

9.2 Place of Closing. The Closing shall be held at Seller’s offices located at 1200 Smith Street, Houston, Texas..

9.3 Closing Obligations. At the Closing, the following documents shall be delivered and the following events shall occur, the execution of each document and the occurrence of each event being a condition precedent to the others and each being deemed to have occurred simultaneously with the others:

(a) Seller and Buyer shall deliver executed Assignments in the form attached hereto as Exhibit B, in sufficient counterparts to facilitate recording in all counties and parishes, covering the Assets. As to those Assets operated by Seller, Seller will deliver Designations of Operator executed by Seller, and, subject to Article 6.2, to the extent Seller is able to secure same, also executed by the relevant co-working interest owners of Seller. Buyer agrees that it shall expeditiously record the Assignments in all relevant counties and parishes, and to expeditiously file, and pursue approval of the Designations of Operator with the MMS. It is understood and agreed by Buyer that, as to certain of the Assets Seller has Rights of Use and Easement that cannot be transferred and, as to which, on and after Closing Seller will terminate its rights; Buyer understands and agrees that Buyer will have to apply to the MMS for its own Rights of Use and Easement. As to Rights-of Way and Applicable Contracts, Seller will, to the extent deemed necessary by Seller provide assignments, which shall be executed by Seller and Buyer.

(b) Seller and Buyer shall execute and deliver assignments, on appropriate forms, of state and of federal leases (the appropriate federal lease assignment forms being those attached hereto as Exhibit B-2) comprising the appropriate portions of the Assets. Subject to the exception specified in this Article 9.3(b), Assignments shall be made in the following manner: (i) Seller will assign 100% of its record title (or operating rights, if Seller owns operating rights) in the Leases to Buyer; (ii) Buyer will execute and deliver to Seller a re-assignment (out of the rights assigned by Seller to Buyer) of 50% of the conveyed operating rights in the relevant Leases as to the Deep Depths, described on Exhibit A as being retained 50% by Seller, and of 100% of the conveyed operating rights in the relevant Leases as to the Deep Depths, described on Exhibit A as being retained 100% by Seller; and (iii) Buyer will execute and deliver to Seller Designations of Operator as to all Deep Depths being retained by Seller; except, provided however, as noted above, as to portions of two leases (being (i) OCS-G 16202 and (ii) OCS-G 15431), covering, respectively, (i) the West Cameron 528 Block and (ii) the Viosca Knoll Block 738, the Assignment of Seller will, respectively, be of (i) Operating Rights in the N/2 only (from the surface to 50,000 feet TVD); Seller will retain record title as to all depths in the N/2 and will retain all title (record title and operating rights) in the S/2 as to all depths and (ii) Operating Rights in the S/2 and S/2N/2 only (from the surface to 50,000 feet TVD); Seller will retain

record title as to all depths in the S/2 and S/2N/2 and will retain all title (record title and operating rights) in the rest of the Block.

(d) Buyer shall deliver to Seller, to the accounts designated in the Preliminary Settlement Statement, by direct bank or wire transfer in same day funds, the Adjusted Purchase Price, after giving effect to the Deposit.

(e) Seller shall deliver on forms supplied by Buyer and reasonably acceptable to Seller transfer orders or letters in lieu thereof directing all purchasers of production to make payment to Buyer of proceeds attributable to production from the Assets from and after the Effective Time, for delivery by Buyer to the purchasers of production.

(f) Seller shall deliver an executed statement described in Treasury Regulation §1.1445-2(b)(2) certifying that Seller is not a foreign person within the meaning of the Code.

(g) Seller and Buyer shall execute and deliver any other agreements, instruments and documents which are required by other terms of this Agreement to be executed and/or delivered at the Closing. Without limiting the foregoing in any respect, this will include a letter to the operator of the High Island Pipeline System, prepared by Seller, to initiate transfer of the segments of the System that are specified on Exhibit A-2.

(h) Buyer shall provide Seller proof of Buyer’s compliance with MMS Bond requirements for ownership and operation, as is referenced in Article 6.4, and Buyer will deliver to Seller the fully executed Guaranty, executed by Guarantor, in the form attached hereto as Exhibit H.

(i) Buyer and Seller will execute counterparts of the Transition Agreement and the accounting and marketing services letter agreement referenced in Article 16.18(a).

(j) Buyer and Seller to the extent applicable shall execute Oil Spill Financial Responsibility forms for the Assets and will promptly file them with the appropriate Governmental Authority.

9.4 Records. In addition to the obligations set forth under Article 9.3 above, at Closing, pursuant to Buyer’s reasonable instructions, Seller shall deliver to Buyer possession of the Records, as soon as reasonably practical, but no later than 15 days after Closing.

ARTICLE X

INTENTIONALLY DELETED.

ARTICLE XI

ACCESS/DISCLAIMERS

11.1 Access.

(a) From and after the date hereof and up to and including the Closing Date (or earlier termination of this Agreement) but subject to the other provisions of this Article 11.1 and obtaining any required consents of Third Parties, including Third Party operators of the Assets (with respect to which consents Seller shall use commercially reasonable efforts to obtain), Seller shall afford to Buyer and its officers, employees, agents, accountants, attorneys, investment bankers and other authorized representatives (“Buyer’s Representatives”) full access, during normal business hours, to the Assets and all Records and other documents in Seller’s or any their respective Affiliates’ possession relating primarily to the Assets. Seller shall also make available to Buyer and Buyer’s Representatives, upon reasonable notice during normal business hours, Seller’s personnel knowledgeable with respect to the Assets in order that Buyer may make such diligence investigation as Buyer considers necessary or appropriate. All investigations and due diligence conducted by Buyer or any Buyer’s Representative shall be conducted at Buyer’s sole cost, risk and expense and any conclusions made from any examination done by Buyer or any Buyer’s Representative shall result from Buyer’s own independent review and judgment.

(b) Buyer shall be entitled to conduct a Phase I environmental property assessment with respect to the Assets. Seller or its designee shall have the right to accompany Buyer and Buyer’s Representatives whenever they are on site on the Assets and also to collect split test samples if any are collected. Notwithstanding anything herein to the contrary, Buyer shall not have access to, and shall not be permitted to conduct any environmental due diligence (including any Phase I environmental property assessments) with respect to any Assets where Seller does not have the authority to grant access for such due diligence (provided, however, Seller shall use its commercially reasonable efforts to obtain permission from any Third Party to allow Buyer and Buyer’s Representatives such access). In the event that Buyer’s Phase I environmental property assessments identify actual or potential “recognized environmental concerns”, then Buyer may request Seller’s permission to conduct additional Phase II environmental property assessments. The additional Phase II environmental property assessment procedures relating to any additional investigation shall be submitted to Seller in a Phase II environmental property assessment plan. Thereafter, Seller may, in its sole discretion, approve said Phase II environmental property assessment plan, in whole or in part and Buyer shall not have the right to conduct any activities set forth in such plan until such time that Seller has approved such plan in writing. Any such approved Phase II environmental property assessment plan shall be performed in accordance with this Article 11.1 and in compliance with all Laws.

(c) Buyer shall coordinate its environmental property assessments and physical inspections of the Assets with Seller to minimize any inconvenience to or interruption of the conduct of business by Seller. Buyer shall abide by Seller’s, and any Third Party operator’s safety rules, regulations, and operating policies while conducting its due diligence evaluation of the Assets including any environmental or other inspection or assessment of the Assets. Buyer hereby defends, indemnifies and holds harmless each of the operators of the Assets and Seller Indemnified Parties from and against any and all Liabilities arising out of, resulting from or relating to any field visit, environmental property assessment, or other due

diligence activity conducted by Buyer or any Buyer’s Representative with respect to the Assets, EVEN IF SUCH LIABILITIES ARISE OUT OF OR RESULT FROM, SOLELY OR IN PART, THE SOLE, ACTIVE, PASSIVE, CONCURRENT OR COMPARATIVE NEGLIGENCE, STRICT LIABILITY OR OTHER FAULT OR VIOLATION OF LAW OF OR BY A MEMBER OF SELLER INDEMNIFIED PARTIES, EXCEPTING ONLY LIABILITIES ACTUALLY RESULTING ON THE ACCOUNT OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF A MEMBER OF SELLER INDEMNIFIED PARTIES.

(d) Buyer agrees to promptly provide Seller, but in no less than five (5) days after receipt or creation, copies of all final reports and test results, prepared by Buyer and/or any of Buyer’s Representatives and which contain data collected or generated from Buyer’s due diligence with respect to the Assets. Seller shall not be deemed by its receipt of said documents or otherwise to have made representation or warranty, expressed, implied or statutory, as to the condition to the Assets or to the accuracy of said documents or the information contained therein.

(e) Upon completion of Buyer’s due diligence, Buyer shall at its sole cost and expense and without any cost or expense to Seller or its Affiliates, (i) close all bore holes from its Phase I environmental property assessment and any approved work with respect to a Phase II environmental property assessment in accordance with recognized industry standards, (ii) repair all damage done to the Assets in connection with Buyer’s due diligence, (iii) restore the Assets to the approximate same or better condition than it was prior to commencement of Buyer’s due diligence and (iv) remove all equipment, tools or other property brought onto the Assets in connection with Buyer’s due diligence. Any disturbance to the Assets (including, without limitation, the real property associated with such Assets) resulting from Buyer’s due diligence will be promptly corrected by Buyer.

(f) During all periods that Buyer, and/or any of Buyer’s Representatives are on the Assets, Buyer shall maintain, at its sole expense and with insurers reasonably satisfactory to Seller, policies of insurance of the types and in the amounts reasonably requested by Seller. Coverage under all insurance required to be carried by Buyer hereunder will (i) be primary insurance, (ii) list Seller Indemnified Parties as additional insureds, (iii) waive subrogation against Seller Indemnified Parties and (iv) provide for five (5) days prior notice to Seller in the event of cancellation or modification of the policy or reduction in coverage. Upon request by Seller, Buyer shall provide evidence of such insurance to Seller prior to entering the Assets.

11.2 Confidentiality. Buyer acknowledges that, pursuant to its right of access to the Records or the Assets, Buyer will become privy to confidential and other information of Seller and that such confidential information shall be held confidential by Buyer and Buyer’s Representatives in accordance with the terms of the Confidentiality Agreement. If the Closing should occur, the foregoing confidentiality restriction on Buyer, including the Confidentiality Agreement, shall terminate (except as to (i) such portion of the Assets that are not conveyed to Buyer pursuant to the provisions of this Agreement, and (ii) the Excluded Assets).

11.3 Disclaimers.

(a) EXCEPT AS AND TO THE EXTENT EXPRESSLY SET FORTH IN ARTICLE 12.1 OR ARTICLE IV OF THIS AGREEMENT, (I) SELLER MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS, STATUTORY OR IMPLIED, AND (II) SELLER EXPRESSLY DISCLAIMS ALL LIABILITY AND RESPONSIBILITY FOR ANY REPRESENTATION, WARRANTY, STATEMENT OR INFORMATION MADE OR COMMUNICATED (ORALLY OR IN WRITING) TO BUYER OR ANY OF ITS AFFILIATES, EMPLOYEES, AGENTS, CONSULTANTS OR REPRESENTATIVES (INCLUDING, WITHOUT LIMITATION, ANY OPINION, INFORMATION, PROJECTION OR ADVICE THAT MAY HAVE BEEN PROVIDED TO BUYER BY ANY OFFICER, DIRECTOR, EMPLOYEE, AGENT, CONSULTANT, REPRESENTATIVE OR ADVISOR OF SELLER OR ANY OF ITS AFFILIATES).

(b) EXCEPT AS EXPRESSLY REPRESENTED OTHERWISE IN ARTICLE 12.1 OR ARTICLE IV OF THIS AGREEMENT, AND WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, SELLER EXPRESSLY DISCLAIMS ANY REPRESENTATION OR WARRANTY, EXPRESS, STATUTORY OR IMPLIED, AS TO (I) TITLE TO ANY OF THE ASSETS, (II) THE CONTENTS, CHARACTER OR NATURE OF ANY REPORT OF ANY PETROLEUM ENGINEERING CONSULTANT, OR ANY ENGINEERING, GEOLOGICAL OR SEISMIC DATA OR INTERPRETATION, RELATING TO THE ASSETS, (III) THE QUANTITY, QUALITY OR RECOVERABILITY OF HYDROCARBONS IN OR FROM THE ASSETS, (IV) ANY ESTIMATES OF THE VALUE OF THE ASSETS OR FUTURE REVENUES GENERATED BY THE ASSETS, (V) THE PRODUCTION OF HYDROCARBONS FROM THE ASSETS, (VI) THE MAINTENANCE, REPAIR, CONDITION, QUALITY, SUITABILITY, DESIGN OR MARKETABILITY OF THE ASSETS, (VII) THE CONTENT, CHARACTER OR NATURE OF ANY INFORMATION MEMORANDUM, REPORTS, BROCHURES, CHARTS OR STATEMENTS PREPARED BY SELLER OR THIRD PARTIES WITH RESPECT TO THE ASSETS, (VIII) ANY OTHER MATERIALS OR INFORMATION THAT MAY HAVE BEEN MADE AVAILABLE TO BUYER OR ITS AFFILIATES, OR ITS OR THEIR EMPLOYEES, AGENTS, CONSULTANTS, REPRESENTATIVES OR ADVISORS IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY DISCUSSION OR PRESENTATION RELATING THERETO AND (IX) ANY IMPLIED OR EXPRESS WARRANTY OF FREEDOM FROM PATENT OR TRADEMARK INFRINGEMENT. EXCEPT AS EXPRESSLY REPRESENTED OTHERWISE IN ARTICLE 12.1 OR ARTICLE IV OF THIS AGREEMENT, SELLER FURTHER DISCLAIMS ANY REPRESENTATION OR WARRANTY, EXPRESS, STATUTORY OR IMPLIED, OF MERCHANTABILITY, FREEDOM FROM LATENT VICES OR DEFECTS, FITNESS FOR A PARTICULAR PURPOSE OR CONFORMITY TO MODELS OR SAMPLES OF MATERIALS OF ANY ASSETS, RIGHTS OF A PURCHASER UNDER APPROPRIATE STATUTES TO CLAIM DIMUNITION OF CONSIDERATION OR RETURN OF THE PURCHASE PRICE, IT BEING EXPRESSLY UNDERSTOOD AND AGREED BY THE PARTIES HERETO THAT BUYER SHALL BE DEEMED TO BE OBTAINING THE ASSETS IN THEIR PRESENT STATUS, CONDITION AND STATE OF REPAIR, “AS IS” AND “WHERE IS” WITH ALL FAULTS OR DEFECTS (KNOWN OR UNKNOWN, LATENT, DISCOVERABLE OR UNDISCOVERABLE), AND THAT BUYER HAS MADE OR CAUSED TO BE MADE SUCH INSPECTIONS AS BUYER DEEMS

APPROPRIATE. WITH RESPECT TO ANY OF THE ASSETS THAT ARE LOCATED IN LOUISIANA, BUYER ACKNOWLEDGES THAT THIS WAIVER HAS BEEN EXPRESSLY CALLED TO ITS ATTENTION AND INCLUDES, WITHOUT LIMITATION, A WAIVER OF WARRANTY AGAINST REHIBITORY VICES ARISING UNDER LOUISIANA CIVIL CODE ARTICLES 2520 THROUGH 2548, INCLUSIVE.

(c) OTHER THAN THOSE REPRESENTATIONS SET FORTH IN ARTICLE 4.15, SELLER HAS NOT AND WILL NOT MAKE ANY REPRESENTATION OR WARRANTY REGARDING ANY MATTER OR CIRCUMSTANCE RELATING TO ENVIRONMENTAL LAWS, THE RELEASE OF MATERIALS INTO THE ENVIRONMENT OR THE PROTECTION OF HUMAN HEALTH, SAFETY, NATURAL RESOURCES OR THE ENVIRONMENT, OR ANY OTHER ENVIRONMENTAL CONDITION OF THE ASSETS, AND NOTHING IN THIS AGREEMENT OR OTHERWISE SHALL BE CONSTRUED AS SUCH A REPRESENTATION OR WARRANTY, AND SUBJECT TO BUYER’S RIGHTS UNDER ARTICLE 13.1, BUYER SHALL BE DEEMED TO BE TAKING THE ASSETS “AS IS” AND “WHERE IS” WITH ALL FAULTS FOR PURPOSES OF THEIR ENVIRONMENTAL CONDITION AND THAT BUYER HAS MADE OR CAUSED TO BE MADE SUCH ENVIRONMENTAL INSPECTIONS AS BUYER DEEMS APPROPRIATE.

(d) SELLER AND BUYER AGREE THAT, TO THE EXTENT REQUIRED BY APPLICABLE LAW TO BE EFFECTIVE, THE DISCLAIMERS OF CERTAIN REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS ARTICLE 11.3 ARE “CONSPICUOUS” DISCLAIMERS FOR THE PURPOSE OF ANY APPLICABLE LAW.

ARTICLE XII

TITLE MATTERS; CASUALTIES; TRANSFER RESTRICTIONS

12.1 Seller’s Title.

(a) General Disclaimer of Title Warranties and Representations. Except for the special warranty of title as set forth in Article 12.1(b) and without limiting Buyer’s remedies for Title Defects set forth in this Article XII, Seller makes no warranty or representation, express, implied, statutory or otherwise, with respect to Seller’s title to any of the Assets and Buyer hereby acknowledges and agrees that Buyer’s sole remedy for any defect of title, including any Title Defect, with respect to any of the Assets (i) before Closing, shall be as set forth in Article 12.2 and (ii) after Closing, shall be pursuant to the special warranty of title set forth in Article 12.1(b).

(b) Special Warranty of Title. If the Closing occurs, then effective as of the Closing Date, Seller warrants Defensible Title to the Wells (or the specified zone(s) therein) shown in Exhibit A and, to the other Assets unto Buyer against every Person whomsoever lawfully claiming or to claim the same or any part thereof by, through or under Seller or its Affiliates, but not otherwise, subject, however, to the Permitted Encumbrances and to any

matters of record prior to the Title Claim Date; provided, however, that, except with respect to any liability of Seller for any claim asserted in writing by Buyer to Seller in accordance with Article 12.1(c) on or before the expiration of the Survival Period for breach of such special warranty, such special warranty shall cease and terminate at the end of such Survival Period. No warranty of title shall be contained in the Assignment. Said special warranty of title shall be subject to the further limitations and provisions of this Article XII.

(i) Buyer’s Assertion of Title Warranty Breaches. Prior to the expiration of the two-year period commencing as of the Closing Date and ending on the second (2nd) anniversary thereof (the “Survival Period”), Buyer shall furnish Seller a Title Defect Notice meeting the requirements of Article 12.2(a) setting forth any matters which Buyer intends to assert as a breach of Seller’s special warranty in Article 12.1(b). For all purposes of this Agreement, Buyer shall be deemed to have waived, and Seller shall have no further liability for, any breach of Seller’s special warranty that Buyer fails to assert by a Title Defect Notice given to Seller on or before the expiration of the Survival Period. Seller shall have a reasonable opportunity, but not the obligation, to cure any Title Defect asserted by Buyer pursuant to this Article 12.1(c)(i). Buyer agrees to reasonably cooperate with any attempt by Seller to cure any such Title Defect.

(ii) Limitations on Special Warranty. For purposes of Seller’s special warranty of title, the value of the Wells (or the specified zone(s) therein) shown in Exhibit A and the other Assets shall be deemed to be the Allocated Value thereof, as adjusted herein. Recovery on Seller’s special warranty of title shall be limited to an amount (without any interest accruing thereon) equal to the reduction in the Purchase Price to which Buyer would have been entitled had Buyer asserted the Title Defect giving rise to such breach of Seller’s special warranty of title as a Title Defect prior to Closing pursuant to Article 12.2, in each case taking into account the Individual Title Defect Threshold and the Aggregate Deductible. Seller shall be entitled to offset any amount owed by Seller for breach of its special warranty of title with respect to any Asset by the amount of any Title Benefits with respect to such Asset as to which Seller gives Buyer notice after the Title Claim Date.

12.2 Notice of Title Defects; Defect Adjustments.

(a) Title Defect Notices. On or before August 23, 2005 (the “Title Claim Date”), Buyer must deliver claim notices to Seller meeting the requirements of this Article 12.2(a) (collectively the “Title Defect Notices” and individually a “Title Defect Notice”) setting forth any matters which, in Buyer’s reasonable opinion, constitute Title Defects and which Buyer intends to assert as a Title Defect pursuant to this Article XII. For all purposes of this Agreement and notwithstanding anything herein to the contrary, Buyer shall be deemed to have waived, and Seller shall have no liability for, any Title Defect which Buyer fails to assert as a Title Defect by a Title Defect Notice received by Seller on or before the Title Claim Date; provided, however, that, for purposes of Seller’s special warranty to title under Article 12.1(b), such waiver shall not apply to any matter that prior to the Title Claim Date is neither reflected of record nor discovered by any of Buyer’s or any of its Affiliate’s employees or any title attorney, landman or other title examiner while conducting Buyer’s due diligence with respect to the

Assets. To be effective, each Title Defect Notice shall be in writing, and shall include (i) a description of the alleged Title Defect(s), (ii) the Wells (and the applicable zone(s) therein) and/or other Assets affected by the Title Defect (each a “Title Defect Property”), (iii) the Allocated Value of each Title Defect Property, (iv) supporting documents reasonably necessary for Seller to verify the existence of the alleged Title Defect(s), and (v) the amount by which Buyer reasonably believes the Allocated Value of each Title Defect Property is reduced by the alleged Title Defect(s) and the computations upon which Buyer’s belief is based. To give Seller an opportunity to commence reviewing and curing Title Defects, Buyer agrees to use reasonable efforts to give Seller, on or before the end of each calendar week prior to the Title Claim Date, written notice of all Title Defects discovered by Buyer during the preceding calendar week, which notice may be preliminary in nature and supplemented prior to the Title Claim Date. Buyer shall also promptly furnish Seller with written notice of any Title Benefit which is discovered by any of Buyer’s or any of its Affiliate’s employees, title attorneys, landmen or other title examiners while conducting Buyer’s due diligence with respect to the Assets prior to the Title Claim Date.

(b) Title Benefit Notices. Seller shall have the right, but not the obligation, to deliver to Buyer on or before the Title Claim Date with respect to each Title Benefit a notice (a “Title Benefit Notice”) including (i) a description of the Title Benefit, (ii) the Wells (and the applicable zone(s) therein) affected by the Title Benefit, and (iii) the amount by which Seller reasonably believes the Allocated Value of those Wells (and the applicable zone(s) therein) is increased by the Title Benefit, and the computations upon which Seller’s belief is based. Except for purposes of defending against or paying any claim that Seller has breached its special warranty of title under Article 12.1(c)(ii), Seller shall be deemed to have waived all Title Benefits of which it has not given notice on or before the Title Claim Date.

(c) Seller’s Right to Cure. Seller shall have the right, but not the obligation, to attempt, at its sole cost, to cure at any time prior to Closing (the “Cure Period”), any Title Defects of which it has been advised by Buyer.

(d) Remedies for Title Defects. Subject to Seller’s continuing right to dispute the existence of a Title Defect and/or the Title Defect Amount asserted with respect thereto and subject to the rights of the parties pursuant to Article 15.1(d), in the event that any Title Defect timely asserted by Buyer in accordance with Article 12.2(a) is not waived in writing by Buyer or cured on or before Closing, Seller shall, at its sole option, elect to:

(i) subject to the Individual Title Defect Threshold and the Aggregate Deductible, reduce the Purchase Price by an amount (“Title Defect Amount”) determined pursuant to Article 12.2(g) or 12.2(j) as being the value of such Title Defect;

(ii) indemnify Buyer against all Liability resulting from such Title Defect pursuant to an indemnity agreement (the “Title Indemnity Agreement”) in the form attached hereto as Exhibit C;

(iii) retain the entirety of the Title Defect Property that is subject to such Title Defect, together with all associated Assets, in which event the Purchase Price shall be

reduced by an amount equal to the Allocated Value of such Title Defect Property and such associated Assets; or

(iv) if applicable, terminate this Agreement pursuant to Article 15.1(d).

(e) Remedies for Title Benefits. With respect to each Well (or specified zone(s) therein) affected by Title Benefits reported under Article 12.2(b), the Purchase Price shall be increased by an amount (the “Title Benefit Amount”) equal to the increase in the Allocated Value for such Well caused by such Title Benefits, as determined pursuant to Article 12.2(h).

(f) Exclusive Remedy. Except for Seller’s special warranty of title under Article 12.1(b), Article 12.2(d) shall be the exclusive right and remedy of Buyer with respect to Seller’s failure to have Defensible Title with respect to any Asset.

(g) Title Defect Amount. The Title Defect Amount resulting from a Title Defect shall be the amount by which the Allocated Value of the affected Title Defect Property is reduced as a result of the existence of such Title Defect and shall be determined in accordance with the following terms and conditions:

(i) if Buyer and Seller agree on the Title Defect Amount, then that amount shall be the Title Defect Amount;

(ii) if the Title Defect is an Encumbrance that is undisputed and liquidated in amount, then the Title Defect Amount shall be the amount necessary to be paid to remove the Title Defect from the Title Defect Property;

(iii) if the Title Defect represents a discrepancy between (A) the Net Revenue Interest for any Title Defect Property and (B) the Net Revenue Interest stated in Exhibit A, then the Title Defect Amount shall be the product of the Allocated Value of such Title Defect Property multiplied by a fraction, the numerator of which is the Net Revenue Interest decrease and the denominator of which is the Net Revenue Interest stated in Exhibit A; provided, however, if there is a discrepancy between (A) and (B) as to a Title Defect Property, and Seller is, pursuant to this Agreement, reserving an overriding royalty interest in that Title Defect Property, then to the extent all or a portion of that reserved overriding royalty interest, if transferred to Buyer could: (a) diminish that discrepancy, then that portion of the overriding royalty interest that could diminish the discrepancy will be assigned to Buyer pursuant to the provisions of this Agreement, and the combined Net Revenue Interest and the overriding royalty interest to be assigned shall be combined and shall be “(A),” the numerator for the fraction; or (b) cause there to be no discrepancy, then that portion of the overriding royalty interest which would cause there to be no discrepancy will be assigned to Buyer pursuant to the provisions of this Agreement, and there shall be no Title Defect.

(iv) if the Title Defect represents an obligation or Encumbrance upon or other defect in title to the Title Defect Property of a type not described above, the Title Defect Amount shall be determined by taking into account the Allocated Value of the Title Defect Property, the portion of the Title Defect Property affected by the Title Defect, the legal effect of the Title Defect, the potential economic effect of the Title Defect over the life of the Title Defect

Property, the values placed upon the Title Defect by Buyer and Seller and such other reasonable factors as are necessary to make a proper evaluation; provided, however, that if such Title Defect is reasonably capable of being cured, the Title Defect Amount shall not be greater than the reasonable cost and expense of curing such Title Defect;

(v) If (A) a Title Defect Property is not a Well (or specified zone(s) therein), (B) such Title Defect Property does not have an Allocated Value, (C) the Title Defect with respect to such Title Defect Property causes a loss of title to such Title Defect Property, and (D) the loss of such title to such Title Defect Property will prevent the continued operation or production of a Well (or one or more specified zone(s) therein) shown in Exhibit A (such Well or the specified zone(s) therein being referred to as the “Affected Well”) and the other Assets are not capable of providing an alternative means to support, in all material respects, the continued operation or production of the Affected Well, then such Title Defect Property (a “Defective Support Property”) and such Affected Well shall collectively be considered a single Title Defect Property for purposes of this Article XII; provided, however, that the Title Defect Amount resulting from the Title Defect affecting such Defective Support Property shall be the lesser of (1) the reasonable cost to replace such Defective Support Property (not to exceed the current fair market value of such Defective Support Property in its current depreciated condition), if such Defective Support Property is reasonably capable of being replaced, (2) the reasonable cost of providing an alternative means to support in all material respects the continued operation or production of the Affected Well, or (3) the Title Defect Amount that would otherwise be applicable to such Title Defect under this Article XII.

(vi) the Title Defect Amount with respect to a Title Defect Property shall be determined without duplication of any costs or losses included in another Title Defect Amount hereunder; and

(vii) notwithstanding anything to the contrary in this Article XII, the aggregate Title Defect Amounts attributable to the effects of all Title Defects upon any Title Defect Property shall not exceed the Allocated Value of the Title Defect Property.

(h) Title Benefit Amount. The Title Benefit Amount resulting from a Title Benefit shall be determined in accordance with the following methodology, terms and conditions:

(i) if Buyer and Seller agree on the Title Benefit Amount, then that amount shall be the Title Benefit Amount; and

(ii) if the Title Benefit represents a discrepancy between (A) the Net Revenue Interest for any Well (or the specified zone(s) therein) and (B) the Net Revenue Interest stated in Exhibit A, then the Title Benefit Amount shall be the product of the Allocated Value of the affected Well (or the specified zone(s) therein) multiplied by a fraction, the numerator of which is the Net Revenue Interest increase and the denominator of which is the Net Revenue Interest stated in Exhibit A.

(i) Title Deductibles. Notwithstanding anything to the contrary, (i) in no event shall there be any adjustments to the Purchase Price or other remedies provided by Seller

for any individual Title Defect for which the Title Defect Amount does not exceed one hundred thousand dollars ($100,000.00) (“Individual Title Defect Threshold”); and (ii) in no event shall there be any adjustments to the Purchase Price or other remedies provided by Seller for any Title Defect that exceeds the Individual Title Defect Threshold unless (A) the sum of (1) the Title Defect Amounts of all such Title Defects that exceed the Individual Title Defect Threshold, in the aggregate, excluding any Title Defects cured by Seller, plus (2) the Remediation Amounts of all Environmental Defects, in the aggregate, excluding any individual Environmental Defect for which the Remediation Amount does not exceed the Individual Environmental Threshold and any Environmental Defects cured by Seller, (B) exceeds the Aggregate Deductible, after which point Buyer shall be entitled to adjustments to the Purchase Price or other remedies only with respect to such Title Defects in excess of such Aggregate Deductible.

(j) Title Dispute Resolution. Seller and Buyer shall attempt to agree on all Title Defects, Title Benefits, Title Defect Amounts and Title Benefit Amounts prior to Closing. If Seller and Buyer are unable to agree by Closing, the Title Defect Amounts and Title Benefit Amounts in dispute shall be exclusively and finally resolved pursuant to this Article 12.1(j). There shall be a single arbitrator, who shall be a title attorney with at least ten (10) years experience in oil and gas titles involving properties in the regional area in which the Title Defect Properties are located, as selected by mutual agreement of Buyer and Seller within fifteen (15) days after the end of the Cure Period, and absent such agreement, by the Houston office of the American Arbitration Association (the “Title Arbitrator”). The arbitration proceeding shall be held in Houston, Texas and shall be conducted in accordance with the Commercial Arbitration Rules of the American Arbitration Association, to the extent such rules do not conflict with the terms of this Article. The Title Arbitrator’s determination shall be made within twenty (20) days after submission of the matters in dispute and shall be final and binding upon both parties, without right of appeal. In making his determination, the Title Arbitrator shall be bound by the rules set forth in Articles 12.2(g) and 12.2(h) and, subject to the foregoing, may consider such other matters as in the opinion of the Title Arbitrator are necessary to make a proper determination. The Title Arbitrator, however, may not award the Buyer a greater Title Defect Amount than the Title Defect Amount claimed by Buyer in its applicable Title Defect Notice and may not award Seller a greater Title Benefit Amount than the Title Benefit Amount claimed by Seller in its applicable Title Benefit Notice. The Title Arbitrator shall act as an expert for the limited purpose of determining the specific disputed Title Defect, Title Benefit, Title Defect Amounts and/or Title Benefit Amounts submitted by either party and may not award damages, interest or penalties to either party with respect to any matter. Seller and Buyer shall each bear its own legal fees and other costs of presenting its case. Each of Seller and Buyer shall bear one-half of the costs and expenses of the Title Arbitrator. To the extent that the award of the Title Arbitrator with respect to any Title Defect Amount or Title Benefit Amount is not taken into account as an adjustment to the Purchase Price pursuant to Article 3.5 or Article 3.6, then within ten (10) days after the Title Arbitrator delivers written notice to Buyer and Seller of his award with respect to a Title Defect Amount or a Title Benefit Amount, (i) Buyer shall pay to Seller the amount, if any, so awarded by the Title Arbitrator to Seller and (ii) Seller shall pay to Buyer the amount, if any, so awarded by the Title Arbitrator to Buyer.

12.3 Casualty or Condemnation Loss.

(a) Notwithstanding anything herein to the contrary, from and after the Effective Time, Buyer shall assume all risk of loss with respect to production of Hydrocarbons through normal depletion (including watering out of any well, collapsed casing or sand infiltration of any well) and the depreciation of personal property due to ordinary wear and tear, in each case, with respect to the Assets.

(b) If, after the date of this Agreement but prior to the Closing Date, any portion of the Assets is destroyed by fire or other casualty or is taken in condemnation or under right of eminent domain, and the loss as a result of such individual casualty or taking exceeds twenty percent (20%) of the Purchase Price based on the Allocated Value of the affected Assets, Buyer shall nevertheless be required to close and Seller shall elect by written notice to Buyer prior to Closing either (i) to cause the Assets affected by such casualty or taking to be repaired or restored to at least its condition prior to such casualty or taking, at Seller’s sole cost, as promptly as reasonably practicable (which work may extend after the Closing Date), (ii) to indemnify Buyer through a document reasonably acceptable to Seller and Buyer against any costs or expenses that Buyer reasonably incurs to repair the Assets subject to such casualty or taking or (iii) to treat such casualty or taking as a Title Defect with respect to the affected Asset or Assets under Article 12.2. In each case, Seller shall retain all rights to insurance, condemnation awards and other claims against third parties with respect to the casualty or taking except to the extent the parties otherwise agree in writing.

(c) If, after the date of this Agreement but prior to the Closing Date, any portion of the Assets is destroyed by fire or other casualty or is taken in condemnation or under right of eminent domain, and the loss to the Assets as a result of such individual casualty or taking is twenty percent (20%) or less of the Purchase Price based on the Allocated Value of the affected Assets, Buyer shall nevertheless be required to close and Seller, at Closing, shall pay to Buyer all sums paid to Seller by Third Parties by reason of such casualty or taking insofar as with respect to the Assets and shall assign, transfer and set over to Buyer or subrogate Buyer to all of Seller’s right, title and interest (if any) in insurance claims, unpaid awards, and other rights against Third Parties (excluding any Liabilities, other than insurance claims, of or against any Seller Indemnified Parties) arising out of such casualty or taking insofar as with respect to the Assets; provided, however, that Seller shall reserve and retain (and Buyer shall assign to Seller) all rights, title, interests and claims against Third Parties for the recovery of Seller’s costs and expenses incurred prior to the Closing in pursuing or asserting any such insurance claims or other rights against third parties or in defending or asserting rights in such condemnation or eminent domain action with respect to the Assets.

(d) If any action for condemnation or taking under right of eminent domain is pending or threatened with respect to any Asset or portion thereof after the date of this Agreement, but no taking of such Asset or portion thereof occurs prior to the Closing Date, Buyer shall nevertheless be required to close and Seller, at Closing, shall assign, transfer and set over to Buyer or subrogate Buyer to all of Seller’s right, title and interest (if any) in such condemnation or eminent domain action, including any future awards therein, insofar as they are attributable to the Assets threatened to be taken, except that Seller shall reserve and retain (and Buyer shall assign to Seller) all rights, titles, interests and claims against Third Parties for the recovery of Seller’s costs and expenses incurred prior to the Closing in defending or asserting rights in such action with respect to the Assets.

12.4 Preferential Purchase Rights and Consents to Assign. (a) With respect to each preferential purchase right pertaining to an Asset and the transactions contemplated hereby, Seller, prior to the Closing, shall send to the holder of each such right a notice, in material compliance with the contractual provisions applicable to such right. In addition, prior to the Closing, Seller shall send to each holder of a right to consent to assignment pertaining to the Assets and the transactions contemplated hereby a notice seeking such party’s consent to the transaction contemplated hereby.

(b) If, prior to the Closing, any holder of a preferential purchase right notifies Seller that it intends to consummate the purchase of the Asset to which its preferential purchase right applies, the exercise of such preferential purchase right shall not constitute a Title Defect, that Asset shall be excluded from the Assets to be conveyed to Buyer to the extent of the interest affected by the preferential purchase right, and the Purchase Price shall be reduced by the Allocated Value of the relevant Asset allocable to such interest. Seller shall be entitled to all proceeds paid by a party exercising a preferential purchase right prior to the Closing. If such holder of such preferential purchase right thereafter fails to consummate the purchase of the Asset covered by such right on or before thirty (30) days following the Closing Date, then Seller shall so notify Buyer, and Buyer shall purchase on or before ten (10) days following receipt of such notice, subject to Buyer’s satisfaction that such preferential right has been waived, such Asset from Seller, under the terms of this Agreement for a price equal to the portion of the Purchase Price previously allocated to it.

(c) If a preferential purchase right burdening any Asset is not exercised prior to the Closing Date and the time for exercising such preferential purchase right has not expired prior to the Closing Date, then the Closing Date with respect to such Asset shall be extended to the earlier of five (5) business days from the date such preferential right is waived or the period to exercise such preferential right has expired. If such preferential purchase right is exercised, Seller shall, without any further obligation to Buyer relating to the affected Asset (except a reduction in the Purchase Price of the allocated value of the Asset), deliver the affected Asset to the holder of such preferential purchase right pursuant to an assignment in substantially the same form as the Assignment and shall retain the proceeds paid for such Asset by the party exercising the preferential purchase right.

(d) All Assets for which preferential purchase rights have been waived, or as to which the period to exercise such right has expired prior to the Closing, shall be sold to Buyer at the Closing pursuant to the provisions of this Agreement.

(e) If Seller fails to obtain a consent prior to the Closing and the failure to obtain such consent would cause the assignment of such Asset to Buyer to be void, then the portion of the Asset subject to such failed consent shall not constitute a Title Defect, that Asset shall be excluded from the Assets to be conveyed to Buyer to the extent of the interest affected by failure to secure the consent, and the Purchase Price shall be reduced by the Allocated Value of the relevant Asset allocable to that interest.

ARTICLE XIII

ENVIRONMENTAL MATTERS

13.1 Environmental Defects.

(a) Assertions of Environmental Defects. Buyer must deliver claim notices to Seller meeting the requirements of this Article 13.1(a) (collectively the “Environmental Defect Notices” and individually an “Environmental Defect Notice”) not later than August 23, 2005 (the “Environmental Claim Date”), setting forth any matters which, in Buyer’s reasonable opinion, constitute Environmental Defects and which Buyer intends to assert as Environmental Defects pursuant to this Article 13.1. For all purposes of this Agreement but subject to Buyer’s remedy for a breach of Seller’s representation contained in Article 4.15, Buyer shall be deemed to have waived any Environmental Defect which Buyer fails to assert as an Environmental Defect by a Environmental Defect Notice received by Seller on or before the Environmental Claim Date. To be effective, each Environmental Defect Notice shall be in writing and shall include (i) a description of the matter constituting the alleged Environmental Defect, (ii) a description of each Asset (or portion thereof) that is affected by the alleged Environmental Defect, (iii) Buyer’s assertion of the Allocated Value of the portion of the Assets affected by the alleged Environmental Defect, (iv) supporting documents reasonably necessary for Seller to verify the existence of the alleged Environmental Defect, and (v) a calculation of the Remediation Amount (itemized in reasonable detail) that Buyer asserts is attributable to such alleged Environmental Defect. Buyer’s calculation of the Remediation Amount included in the Environmental Defect Notice must describe in reasonable detail the Remediation proposed for the Environmental Condition that gives rise to the asserted Environmental Defect and identify all assumptions used by the Buyer in calculating the Remediation Amount, including the standards that Buyer asserts must be met to comply with Environmental Laws. Seller shall have the right, but not the obligation, to cure any claimed Environmental Defect on or before Closing.

(b) Remedies for Environmental Defects. Subject to Seller’s continuing right to dispute the existence of a Environmental Defect and/or the Remediation Amount asserted with respect thereto, in the event that any Environmental Defect timely asserted by Buyer in accordance with Article 13.1(a) is not waived in writing by Buyer or cured on or before Closing, Seller shall, at its sole option, elect to:

(i) subject to the Individual Environmental Threshold and the Aggregate Deductible, reduce the Purchase Price by the Remediation Amount;

(ii) assume responsibility for the Remediation of such Environmental Defect;

(iii) retain the entirety of the Asset that is subject to such Environmental Defect, together with all associated Assets, in which event the Purchase Price shall be reduced by an amount equal to the Allocated Value of such Asset and such associated Assets; or

(iv) if applicable, terminate this Agreement pursuant to Article 15.1(d).

If Seller elects the option set forth in clause (i) above, Buyer shall be deemed to have assumed responsibility for Remediation of such Environmental Defect and such Environmental Defect and all Liabilities with respect thereto shall be deemed to constitute Assumed Obligations. If

Seller elects the option set forth in clause (ii) above, Seller shall use reasonable efforts to implement such Remediation in a manner which is consistent with the requirements of Environmental Laws in a timely fashion for the type of Remediation that Seller elects to undertake and shall have access to the affected Assets after the Closing Date to implement and complete such Remediation in accordance with an Access Agreement in substantially the form attached hereto as Exhibit D (the “Access Agreement”). Seller will be deemed to have adequately completed the Remediation required in the immediately preceding sentence (A) upon receipt of a certificate or approval from the applicable Governmental Authority that the Remediation has been implemented to the extent necessary to comply with existing regulatory requirements or (B) upon receipt of a certificate from a licensed professional engineer that the Remediation has been implemented to the extent necessary to comply with existing regulatory requirements.

(c) Exclusive Remedy. Subject to Article 15.1(d) and Buyer’s remedy for a breach of Seller’s representation contained in Article 4.15, Article 13.1(b) shall be the exclusive right and remedy of Buyer with respect to any Environmental Defect.

(d) Environmental Deductibles. Notwithstanding anything to the contrary, (i) in no event shall there be any adjustments to the Purchase Price or other remedies provided by Seller for any individual Environmental Defect for which the Remediation Amount does not exceed five hundred thousand dollars ($500,000) (“Individual Environmental Threshold”); and (ii) in no event shall there be any adjustments to the Purchase Price or other remedies provided by Seller for any Environmental Defect for which the Remediation Amount exceeds the Individual Environmental Threshold unless (A) the sum of (1) the Remediation Amounts of all such Environmental Defects that exceed the Individual Environmental Threshold, in the aggregate, excluding any Environmental Defects cured by Seller, plus (2) the Title Defect Amounts of all Title Defects, in the aggregate, excluding any individual Title Defect for which the Title Defect Amount does not exceed the Individual Title Defect Threshold and any Title Defects cured by Seller, (B) exceeds the Aggregate Deductible, after which point Buyer shall be entitled to adjustments to the Purchase Price or other remedies only with respect to such Environmental Defects in excess of such Aggregate Deductible.

(e) Environmental Dispute Resolution. Seller and Buyer shall attempt to agree on all Environmental Defects and Remediation Amounts prior to Closing. If Seller and Buyer are unable to agree by Closing, the Environmental Defects and/or Remediation Amounts in dispute shall be exclusively and finally resolved by arbitration pursuant to this Article 13.1. There shall be a single arbitrator, who shall be an environmental attorney with at least ten (10) years experience in environmental matters involving oil and gas producing properties in the regional area in which the affected Assets are located, as selected by mutual agreement of Buyer and Seller within fifteen (15) days after the Closing Date, and absent such agreement, by the Houston office of the American Arbitration Association (the “Environmental Arbitrator”). The arbitration proceeding shall be held in Houston, Texas and shall be conducted in accordance with the Commercial Arbitration Rules of the American Arbitration Association, to the extent such rules do not conflict with the terms of this Article. The Environmental Arbitrator’s determination shall be made within twenty (20) days after submission of the matters in dispute and shall be final and binding upon both parties, without right of appeal. In making his determination, the Environmental Arbitrator shall be bound by the rules set forth in this Article 13.1 and, subject to

the foregoing, may consider such other matters as in the opinion of the Environmental Arbitrator are necessary or helpful to make a proper determination. The Environmental Arbitrator, however, may not award the Buyer a greater Remediation Amount than the Remediation Amount claimed by Buyer in its applicable Environmental Defect Notice. The Environmental Arbitrator shall act as an expert for the limited purpose of determining the specific disputed Environmental Defects and/or Remediation Amounts submitted by either party and may not award damages, interest or penalties to either party with respect to any matter. Seller and Buyer shall each bear its own legal fees and other costs of presenting its case. Each of Seller and Buyer shall bear one-half of the costs and expenses of the Environmental Arbitrator. To the extent that the award of the Environmental Arbitrator with respect to any Remediation Amount is not taken into account as an adjustment to the Purchase Price pursuant to Article 3.6, then within ten (10) days after the Environmental Arbitrator delivers written notice to Buyer and Seller of his award with respect to a Remediation Amount, and subject to Article 13.1, (i) Buyer shall pay to Seller the amount, if any, so awarded by the Environmental Arbitrator to Seller and (ii) Seller shall pay to Buyer the amount, if any, so awarded by the Environmental Arbitrator to Buyer.

13.2 NORM, Wastes and Other Substances. Buyer acknowledges that the Assets have been used for exploration, development, and production of oil and gas and that there may be petroleum, produced water, wastes, or other substances or materials located in, on or under the Assets or associated with the Assets. Equipment and sites included in the Assets may contain asbestos, NORM or other Hazardous Substances. NORM may affix or attach itself to the inside of wells, materials, and equipment as scale, or in other forms. The wells, materials, and equipment located on the Assets or included in the Assets may contain NORM and other wastes or Hazardous Substances. NORM containing material and/or other wastes or Hazardous Substances may have come in contact with various environmental media, including without limitation, water, soils or sediment. Special procedures may be required for the assessment, remediation, removal, transportation, or disposal of environmental media, wastes, asbestos, NORM and other Hazardous Substances from the Assets.

ARTICLE XIV

ASSUMPTION; SURVIVAL, INDEMNIFICATION

14.1 Assumption by Buyer. Without limiting Buyer’s rights to indemnity under this Article XIV and Buyer’s rights under any Title Indemnity Agreement and any Access Agreement, from and after the Closing Buyer assumes and hereby agrees to fulfill, perform, pay and discharge (or cause to be fulfilled, performed, paid or discharged) all obligations and Liabilities, known or unknown, with respect to the Assets, regardless of whether such obligations or Liabilities arose prior to, on or after the Effective Time, including but not limited to obligations and Liabilities relating in any manner to the use, ownership or operation of the Assets, including but not limited to obligations to (a) furnish makeup gas and/or settle Imbalances according to the terms of applicable gas sales, processing, gathering or transportation Contracts, and, (b) pay working interests, royalties, overriding royalties and other interests, owners revenues or proceeds attributable to sales of Hydrocarbons relating to the Properties, including those held in suspense, (c) properly plug and abandon any and all Wells, including inactive Wells or temporarily abandoned Wells, drilled on the Properties or otherwise pursuant to the Assets, (d) replug any well, wellbore, or previously plugged Well on the Properties to the extent required or necessary, (e) dismantle or decommission and remove any Personal Property and other property of

whatever kind related to or associated with operations and activities conducted by whomever on the Properties or otherwise pursuant to the Assets, (f) clean up, restore and/or remediate the premises covered by or related to the Assets in accordance with applicable agreements and Laws, and (g) perform all obligations applicable to or imposed on the lessee, owner, or operator under the Leases and the Applicable Contracts, or as required by Laws (all of said obligations and Liabilities, subject to the exclusions below, herein being referred to as the “Assumed Obligations”); provided, Buyer does not assume any obligations or Liabilities of Seller to the extent that they are:

(i) attributable to or arise out of the ownership, use or operation of the Excluded Assets; or

(ii) attributable to or arise out of the actions, suits or proceedings, if any, set forth on Schedule 14.1, except insofar and only insofar as they arise after the Effective Time or are attributable or relate to the ownership or operation of the Assets, or production therefrom, for periods after the Effective Time.

14.2 Indemnities of Seller. Effective as of the Closing, subject to the limitations set forth in Article 14.4 and otherwise in this Article XIV, Seller shall be responsible for, shall pay on a current basis, and hereby defends, indemnifies, holds harmless and forever releases Buyer and its Affiliates, and all of its and their respective stockholders, partners, members, directors, officers, managers, employees, agents and representatives (collectively, “Buyer Indemnified Parties”) from and against any and all Liabilities, arising from, based upon, related to or associated with:

(a) any breach by Seller of its representations or warranties contained in Article IV;

(b) any breach by Seller of its covenants and agreements under this Agreement; or

(c) (i) any act or omission by Seller involving or relating to the Excluded Assets occurring prior to the Closing, or (ii) the actions, suits or proceedings, if any, set forth on Schedule 14.1, except insofar and only insofar as they arise after the Effective Time or are attributable or relate to the ownership or operation of the Assets, or production therefrom, for periods after the Effective Time.

14.3 Indemnities of Buyer. (a) Effective as of the Closing, Buyer and its successors and assigns shall assume, be responsible for, shall pay on a current basis, and hereby defends, indemnifies, holds harmless and forever releases Seller and its Affiliates, and all of their respective stockholders, partners, members, directors, officers, managers, employees, agents and representatives (collectively, “Seller Indemnified Parties”) from and against any and all Liabilities arising from, based upon, related to or associated with:

(i) any breach by Buyer of its representations or warranties contained in Article V;

(ii) any breach by Buyer of its covenants and agreements under this Agreement;

(iii) the Assumed Obligations; or

(iv) except as provided otherwise in Article 12.1, Title Defects related or attributable to the Assets.

(b) Notwithstanding anything herein to the contrary, in addition to the indemnities set forth in Article 14.3(a), effective as of the Closing, Buyer and its successors and assigns shall assume, be responsible for, shall pay on a current basis, and hereby defends, indemnifies, holds harmless and forever releases the Seller Indemnified Parties from and against any and all Liabilities arising from, based upon, related to or associated with any Environmental Condition or other environmental matter related or attributable to the Assets, regardless of whether such Liabilities arose prior to, on or after the Effective Time, :including the presence, disposal or relates of any Hazardous Substance or other material of any kind in, on or under the Assets or other property (whether neighboring) and including any liability of any Seller Indemnified Party with respect to the Assets under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. §§ 9601 et. seq.), the Resource Conservation and Recovery Act of 1976 (42 U.S.C. § 6901 et. seq.), the Clean Water Act (33 U.S.C. §§ 466 et. seq.), the Safe Drinking Water Act (14 U.S.C. §§ 1401-1450), the Hazardous Materials Transportation Act (49 U.S.C. §§ 1801 et. seq.), the Toxic Substance Control Act (15 U.S.C. §§ 2601-2629), the Clean Air Act (42 U.S.C. § 7401 et. seq.) as amended, and the Clean Air Act Amendments of 1990, and all state and local Environmental Laws.

14.4 Limitation on Liability. (a) Seller shall not have any liability for any indemnification under Article 14.2 until and unless the aggregate amount of all Liabilities for which Claim Notices are delivered by Buyer exceeds $***, and then only to the extent such damages exceed $***; provided that (i) the adjustment to the Purchase Price under Article 3.6 and any payments in respect thereof shall not be limited by this Article 14.4(a) and (ii) Seller’s indemnity under Article 14.2(c) shall not be limited by this Article 14.4(a).

(b) Notwithstanding anything to the contrary contained in this Agreement, Seller shall not be required to indemnify Buyer for aggregate Liabilities in excess of $***; provided, however, with respect to a breach of the representation set forth in Article 4.11, Seller shall not be required to indemnify Buyer for a breach of Article 4.11 for aggregate Liabilities in excess of $***.

(c) The indemnification obligations of each party Seller hereunder are separate and several obligations of each party Seller as to the Assets being conveyed hereunder by each party Seller. They are not joint indemnification obligations; provided, however, for the purpose of Article 14.4(a) and (b), and for the purpose of any other provisions of this Agreement where there is a reference to pre-Closing aggregate liabilities or aggregate determinations, including the Aggregate Deductible, these shall be calculated jointly and include the Assets being conveyed by all parties Seller.

14.5 Express Negligence. THE INDEMNIFICATION, RELEASE AND ASSUMED OBLIGATIONS PROVISIONS PROVIDED FOR IN THIS AGREEMENT SHALL BE APPLICABLE WHETHER OR NOT THE LIABILITIES, LOSSES, COSTS, EXPENSES AND DAMAGES IN QUESTION AROSE OR RESULTED SOLELY OR IN PART FROM THE SOLE, ACTIVE, PASSIVE, CONCURRENT OR COMPARATIVE NEGLIGENCE, STRICT LIABILITY OR OTHER FAULT OR VIOLATION OF LAW OF OR BY ANY INDEMNIFIED PARTY (EXCLUDING, HOWEVER, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF ANY INDEMNIFIED PARTY). BUYER AND SELLER ACKNOWLEDGE THAT THIS STATEMENT COMPLIES WITH THE EXPRESS NEGLIGENCE RULE AND IS CONSPICUOUS.

14.6 Exclusive Remedy. Notwithstanding anything to the contrary contained in this Agreement, Articles 11.1(c), 14.2 and 14.3 contain the parties’ exclusive remedy against each other with respect to breaches of the representations, warranties, covenants and agreements of the parties contained in this Agreement. Except for the remedies contained in Article 14.2, effective as of Closing. Buyer, on its own behalf and on behalf of its Affiliates, hereby releases, remises and forever discharges Seller and its Affiliates and all such parties' stockholders, partners, members, directors, officers, employees, agents and representatives from any and all suits, legal or administrative proceedings, claims, demands, damages, losses, costs, Liabilities, interest, or causes of action whatsoever, in Law or in equity, known or unknown, which Buyer or its Affiliates might now or subsequently may have, based on, relating to or arising out of this Agreement, the ownership, use or operation of the Assets, or the condition, quality, status or nature of the Assets, including rights to contribution under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, breaches of statutory or implied warranties, nuisance or other tort actions, rights to punitive damages, common law rights of contribution, and rights under insurance maintained by Seller or any of its Affiliates, excluding, however, any contractual rights (apart from this Agreement) existing as of the date hereof between (i) Buyer or any of Buyer's Affiliates, on the one hand and (ii) Seller or any of Seller's Affiliates, on the other hand, under contracts between them relating to the Assets (if any).

14.7 Indemnification Procedures. All claims for indemnification under Articles 11.1(c), 14.2 and 14.3 shall be asserted and resolved as follows:

(a) For purposes of this Article XIV, the term “Indemnifying Party” when used in connection with particular Liabilities shall mean the party or parties having an obligation to indemnify another party or parties with respect to such Liabilities pursuant to this Article XIV, and the term “Indemnified Party” when used in connection with particular Liabilities shall mean the party or parties having the right to be indemnified with respect to such Liabilities by another party or parties pursuant to this Article XIV.

(b) To make claim for indemnification under Articles 11.1(c), 14.2 or 14.3, an Indemnified Party shall notify the Indemnifying Party of its claim under this Article 14.7, including the specific details of and specific basis under this Agreement for its claim (the “Claim Notice”). In the event that the claim for indemnification is based upon a claim by a Third Party against the Indemnified Party (a “Claim”), the Indemnified Party shall provide its Claim Notice promptly after the Indemnified Party has actual knowledge of the Claim and shall enclose a copy

of all papers (if any) served with respect to the Claim; provided that the failure of any Indemnified Party to give notice of a Claim as provided in this Article 14.7 shall not relieve the Indemnifying Party of its obligations under Articles 11.1(c), 14.2 or 14.3 (as applicable) except to the extent such failure results in insufficient time being available to permit the Indemnifying Party to effectively defend against the Claim or otherwise materially prejudices the Indemnifying Party's ability to defend against the claim. In the event that the claim for indemnification is based upon an inaccuracy or breach of a representation, warranty, covenant or agreement, the Claim Notice shall specify the representation, warranty, covenant or agreement that was inaccurate or breached.

(c) In the case of a claim for indemnification based upon a Claim, the Indemnifying Party shall have thirty (30) days from its receipt of the Claim Notice to notify the Indemnified Party whether it admits or denies its liability to defend the Indemnified Party against such Claim at the sole cost and expense of the Indemnifying Party. The Indemnified Party is authorized, prior to and during such thirty (30) day period, to file any motion, answer or other pleading that it shall deem necessary or appropriate to protect its interests or those of the Indemnifying Party and that is not prejudicial to the Indemnifying Party.

(d) If the Indemnifying Party admits its liability, it shall have the right and obligation to diligently defend, at its sole cost and expense, the Claim. The Indemnifying Party shall have full control of such defense and proceedings, including any compromise or settlement thereof. If requested by the Indemnifying Party, the Indemnified Party agrees to cooperate in contesting any Claim which the Indemnifying Party elects to contest. The Indemnified Party may participate in, but not control, any defense or settlement of any Claim controlled by the Indemnifying Party pursuant to this Article 14.7(d). An Indemnifying Party shall not, without the written consent of the Indemnified Party, (i) settle any Claim or consent to the entry of any judgment with respect thereto which does not include an unconditional written release of the Indemnified Party from all liability in respect of such Claim or (ii) settle any Claim or consent to the entry of any judgment with respect thereto in any manner that may materially and adversely affect the Indemnified Party (other than as a result of money damages covered by the indemnity).

(e) If the Indemnifying Party does not admit its liability or admits its liability but fails to diligently prosecute or settle the Claim, then the Indemnified Party shall have the right to defend against the Claim at the sole cost and expense of the Indemnifying Party, with counsel of the Indemnified Party's choosing, subject to the right of the Indemnifying Party to admit its liability and assume the defense of the Claim at any time prior to settlement or final determination thereof. If the Indemnifying Party has not yet admitted its liability for a Claim, the Indemnified Party shall send written notice to the Indemnifying Party of any proposed settlement and the Indemnifying Party shall have the option for ten (10) days following receipt of such notice to (i) admit in writing its liability for the Claim and (ii) if liability is so admitted, reject, in its reasonable judgment, the proposed settlement.

(f) In the case of a claim for indemnification not based upon a Claim, the Indemnifying Party shall have thirty (30) days from its receipt of the Claim Notice to (i) cure the Liabilities complained of, (ii) admit its liability for such Liability or (iii) dispute the claim for such Liabilities. If the Indemnifying Party does not notify the Indemnified Party within such 30 day period that it has cured the Liabilities or that it disputes the claim for such Liabilities, the

amount of such Liabilities shall conclusively be deemed a liability of the Indemnifying Party hereunder.

14.8 Survival. (a) The representations and warranties of the parties in Articles IV and V (other than the representations and warranties in Articles 4.7, 4.8(b), 4.11, 4.12, 4.13, 4.18, 5.8, 5.9, 5.10 and 5.11) and the covenants and agreements of the parties in Articles 6.1, 6.2, 6.3, 9.4, 11.1(a) and 11.1(b), shall survive the Closing for a period of ***. The representation of Seller in Article 4.12 shall terminate as of Closing and the representation of Seller in Article 4.13 shall terminate *** after Closing. The representation of Seller in Article 4.7 shall terminate as of Closing, subject to the following limited exception: if there is a death or personal injury that occurs before the Effective Time and a lawsuit is actually filed in an appropriate Court, having jurisdiction, within *** from the Closing Date, Seller will defend against that lawsuit, and indemnify and hold harmless Buyer from liabilities associated with the death or personal injury. The representation of Seller in Article 4.8(b) shall terminate at Closing, subject to the following limited exception: if there is a breach of the representation that occurs before the Effective Time and a lawsuit is actually filed in an appropriate Court, having jurisdiction, within *** from the Closing Date, Seller will defend against that lawsuit, and indemnify and hold harmless Buyer from liabilities associated with the breach. The representation of Seller in Article 4.11 shall terminate at Closing, subject to the following limited exception: if there is a breach of the representation and within *** from the Closing Date a lawsuit is actually filed by a non-governmental entity in an appropriate Court, having jurisdiction or a claim is actually made by a Governmental Authority, Seller will defend against that lawsuit, and indemnify and hold harmless Buyer from liabilities associated with the breach. The representation and warranty of Seller in Article 12.1 shall terminate as of the expiration of the Survival Period. Subject to the foregoing and as set forth in Article 14.8(b), the remainder of this Agreement (including, without limiting the foregoing in any respect, Articles 4.18, 5.8, 5.9, 5.10, 5.11 and 6.5) shall survive the Closing without time limit. Representations, warranties, covenants and agreements shall be of no further force and effect after the date of their expiration, provided that there shall be no termination of any bona fide claim asserted pursuant to this Agreement with respect to such a representation, warranty, covenant or agreement prior to its expiration date.

(b) The indemnities in Articles 14.2(a), 14.2(b), 14.3(a)(i) and 14.3(a)(ii) shall terminate as of the termination date of each respective representation, warranty, covenant or agreement that is subject to indemnification, except in each case as to matters for which a specific written claim for indemnity has been delivered to the Indemnifying Party on or before such termination date. Buyer's indemnities in Articles 14.3(a)(iii), 14.3(a)(iv) and 14.3(b) shall survive the Closing without time limit and shall be deemed covenants running with the Assets (provided that Buyer and its successors and assigns shall not be released from any of, and shall remain jointly and severally liable to the Seller Indemnified Parties for, the obligations or Liabilities of Buyer under such Articles of this Agreement upon any transfer or assignment of any Asset), and Seller's indemnity set forth in Article 14.2(c) shall survive the Closing without time limit.

14.9 Waiver of Right to Rescission. Seller and Buyer acknowledge that the payment of money, as limited by the terms of this Agreement, shall be adequate compensation for breach of any representation, warranty, covenant or agreement contained herein or for any other claim

arising in connection with or with respect to the transactions contemplated in this Agreement. As the payment of money shall be adequate compensation, Buyer and Seller waive any right to rescind this Agreement or any of the transactions contemplated hereby.

14.10 Insurance, Taxes. The amount of any Liabilities for which any of the Buyer Indemnified Parties is entitled to indemnification under this Agreement or in connection with or with respect to the transactions contemplated in this Agreement shall be reduced by any corresponding (i) tax benefit created or generated or (ii) insurance proceeds realized or that could reasonably be expected to be realized by such party if a claim were properly pursued under the relevant insurance arrangements.

14.11 Non-Compensatory Damages. None of the Buyer Indemnified Parties nor Seller Indemnified Parties shall be entitled to recover from Seller or Buyer, or their respective Affiliates, any indirect, consequential, punitive or exemplary damages or damages for lost profits of any kind arising under or in connection with this Agreement or the transactions contemplated hereby, except to the extent any such party suffers such damages (including costs of defense and reasonable attorney’s fees incurred in connection with defending of such damages) to a Third Party, which damages (including costs of defense and reasonable attorney’s fees incurred in connection with defending against such damages) shall not be excluded by this provision as to recovery hereunder. Subject to the preceding sentence, Buyer, on behalf of each of the Buyer Indemnified Parties, and Seller, on behalf of each of Seller Indemnified Parties, waive any right to recover punitive, special, exemplary and consequential damages, including damages for lost profits, arising in connection with or with respect to this Agreement or the transactions contemplated hereby.

14.12 Cooperation by Buyer Retained Litigation. Buyer agrees to use reasonable efforts to cooperate with Seller in connection with Seller’s defense and other actions relating to or arising out of the litigation and claims set forth on Schedule 14.1. Buyer agrees to make available Buyer’s employees engaged in the operation of the Assets, including the Transferring Employees, for the purposes of providing testimony, depositions, information and other related activities relating to such litigation and claims.

14.13 Disclaimer of Application of Anti-Indemnity Statutes. The parties acknowledge and agree that the provisions of any anti-indemnity statute relating to oilfield services and associated activities shall not be applicable to this Agreement and/or the transactions contemplated hereby.

ARTICLE XV

TERMINATION, DEFAULT AND REMEDIES

15.1 Right of Termination. This Agreement and the transactions contemplated herein may be terminated at any time at or prior to Closing:

(a) by Seller, at Seller’s option, if any of the conditions set forth in Article VIII have not been satisfied on or before the Closing Date;

(b) by Buyer, at Buyer’s option, if any of the conditions set forth in Article VII have not been satisfied on or before the Closing Date and such conditions remain unsatisfied for a period of ten (10) days following written notice thereof from Buyer to Sellers;

(c) by Buyer if the condition set forth in Article 7.4 has not been satisfied on or before the Closing Date or by Seller if the condition set forth in Article 8.4 is not satisfied on or before the Closing Date; or

(d) Seller or Buyer if the Closing shall not have occurred on or before September 7, 2005; provided, however, this Article 15.1(d) right to terminate shall not be applicable to Assets subject to preferential purchase rights, for which the Closing Date is extended pursuant to Article 12.4(c).

(e) provided, however, that no party shall have the right to terminate this Agreement pursuant to clause (a), (b) or (d) above if such party or its Affiliates are at such time in material breach of any provision of this Agreement.

15.2 Effect of Termination. If the obligation to close the transactions contemplated by this Agreement is terminated pursuant to any provision of Article 15.1 hereof, then, except as provided in Article 3.2 and except for the provisions of Articles 1.1, 11.1(c) through (f), 11.2, 11.3, 14.11 and this Article 15.2 and Article XVI (other than Articles 16.2(b), 16.7, 16.8, 16.9 and 16.17), this Agreement shall forthwith become void and the parties shall have no liability or obligation hereunder except and to the extent such termination results from the willful breach by a party of any of its covenants or agreements hereunder; provided that if Seller is entitled to retain the Deposit as liquidated damages pursuant to Article 3.2, then such retention shall constitute full and complete satisfaction of any and all damages Seller may have against Buyer.

15.3 Return of Documentation and Confidentiality. Upon termination of this Agreement, Buyer shall return to Seller all title, engineering, geological and geophysical data, environmental assessments and/or reports, maps and other information furnished by Seller to Buyer or prepared by or on behalf of Buyer in connection with its due diligence investigation of the Assets and an officer of Buyer shall certify same to Seller in writing.

ARTICLE XVI

MISCELLANEOUS

16.1 Exhibits. All of the Exhibits referred to in this Agreement are hereby incorporated into this Agreement by reference and constitute a part of this Agreement. Each party to this Agreement and its counsel has received a complete set of Exhibits prior to and as of the execution of this Agreement.

16.2 Expenses and Taxes. (a) Except as otherwise specifically provided, all fees, costs and expenses incurred by Buyer or Seller in negotiating this Agreement or in consummating the transactions contemplated by this Agreement shall be paid by the party incurring the same, including, without limitation, legal and accounting fees, costs and expenses.

(b) All required documentary, filing and recording fees and expenses in connection with the filing and recording of the assignments, conveyances or other instruments

required to convey title to the Assets to Buyer shall be borne by Buyer. Seller shall assume responsibility for, and shall bear and pay, all federal income taxes, state income taxes, and other similar taxes (including any applicable interest or penalties) incurred or imposed with respect to the transactions described in this Agreement. Buyer shall assume responsibility for, and shall bear and pay, all state sales and use taxes (including any applicable interest or penalties) incurred or imposed with respect to the transactions described in this Agreement. Seller shall assume responsibility for, and shall bear and pay, all ad valorem, property, severance, production, and similar taxes and assessments based upon or measured by the ownership of the Assets, the production of Hydrocarbons, or the receipt of proceeds therefrom, but exclusive of income taxes (including any applicable penalties and interest) and assessed against the Assets by any taxing authority for any period prior to the Effective Time, and Buyer shall be responsible for, and shall bear and pay, all such taxes and assessments assessed against the Assets by any taxing authority for any period that begins on or after the Effective Time. For purposes of this Agreement, the foregoing proration of ad valorem and property taxes shall be accomplished at the Closing based on the ratio of the number of days in the year prior to (for Seller) and on and after (for Buyer) the Effective Time to the total number of days in the year as applied to the amount of ad valorem and property taxes for the most recent year for which the amount of such taxes can be finally determined at the Closing. Buyer shall be responsible for payment to the taxing authorities of all ad valorem and property taxes for the current year, except to the extent Seller has paid all or a portion of the ad valorem and property taxes to the taxing authorities for the current tax year.

16.3 Assignment. This Agreement may not be assigned by Buyer without prior written consent of Seller. No assignment of any rights hereunder by Buyer shall relieve Buyer of any obligations and responsibilities hereunder.

16.4 Preparation of Agreement. Both Seller and Buyer and their respective counsel participated in the preparation of this Agreement. In the event of any ambiguity in this Agreement, no presumption shall arise based on the identity of the draftsman of this Agreement.

16.5 Publicity. Seller and Buyer shall consult with each other with regard to all press releases or other public or private announcements issued or made at or prior to the Closing concerning this Agreement or the transactions contemplated herein, and, except as may be required by applicable laws or the applicable rules and regulations of any governmental agency or stock exchange, neither Buyer nor Seller shall issue any such press release or other publicity without the prior written consent of the other party, which shall not be unreasonably withheld.

16.6 Notices. All notices and communications required or permitted to be given hereunder shall be in writing and shall be delivered personally, or sent by bonded overnight courier, or mailed by U.S. Express Mail or by certified or registered United States Mail with all postage fully prepaid, or sent by telex or facsimile transmission (provided any such telex or facsimile transmission is confirmed either orally or by written confirmation), addressed to the appropriate party at the address for such party shown below or at such other address as such party shall have theretofore designated by written notice delivered to the party giving such notice:

If to Seller:

Devon Energy Production Company, L.P.

20 North Broadway

Suite 1500

Oklahoma City, Oklahoma 73102

Fax: (405) 552-4551

Attention: Mr. Kevin Harwi

Copy to: Ms. Cathy Lebsack

Fax: (405) 552-4551

Devon Louisiana Corporation

20 North Broadway

Suite 1500

Oklahoma City, Oklahoma 73102

Fax: (405) 552-4551

Attention: Mr. Kevin Harwi

Copy to: Ms. Cathy Lebsack

Fax: (405) 552-4551

Devon Energy Petroleum Pipeline Company

20 North Broadway

Suite 1500

Oklahoma City, Oklahoma 73102

Fax: (405) 552-4551

Attention: Mr. Kevin Harwi

Copy to: Ms. Cathy Lebsack

Fax: (405) 552-4551

If to Buyer:

Maritech Resources, Inc.

25025 Interstate 45 North

The Woodlands, Texas 77380

Fax: (281) 364-4310

Attention: Mr. G. M. McCarroll

If to Guarantor:

TETRA Technologies, Inc.

25025 Interstate 45 North

The Woodlands, Texas 77380

Fax: (281) 364-4398

Attention: General Counsel

Any notice given in accordance herewith shall be deemed to have been given when delivered to the addressee in person, or by courier, or transmitted by facsimile transmission during normal business hours, or upon actual receipt by the addressee after such notice has either been delivered to an overnight courier or deposited in the United States Mail, as the case may be. The parties hereto may change the address, telephone numbers, and facsimile numbers to which such communications are to be addressed by giving written notice to the other parties in the manner provided in this Article 16.7.

16.7 Removal of Name. As promptly as practicable, but in any case within thirty (30) days after the Closing Date, Buyer shall eliminate the names “Devon Energy Production Company, L.P., Devon Louisiana Corporation”, “Devon” and any variants thereof from the Assets acquired pursuant to this Agreement and, except with respect to such grace period for eliminating existing usage, shall have no right to use any logos, trademarks or trade names belonging to Seller or any of its Affiliates.

16.8 Further Cooperation. After the Closing, Buyer and Seller shall execute and deliver, or shall cause to be executed and delivered from time to time, such further instruments of conveyance and transfer, and shall take such other actions as any party may reasonably request, to convey and deliver the Assets to Buyer, to perfect Buyer’s title thereto, and to accomplish the orderly transfer of the Assets to Buyer in the manner contemplated by this Agreement. If any party hereto receives monies belonging to the other, such amount shall immediately be paid over to the proper party. If an invoice or other evidence of an obligation is received by a party, which is partially an obligation of both Seller and Buyer, then the parties shall consult with each other, and each shall promptly pay its portion of such obligation to the obligee.

16.9 Filings, Notices and Certain Governmental Approvals. Promptly after Closing Buyer shall (a) record the Assignments of the Assets and all state/federal assignments executed at the Closing in all applicable real property records and/or, if applicable, all state or federal agencies, (b) send notices to vendors supplying goods and services for the Assets of the assignment of the Properties to Buyer and, if applicable, the designation of Buyer as the operator thereof, (c) actively pursue the unconditional approval of all applicable Governmental Authorities of the Assignment of the Assets to Buyer and the designation of Buyer as the operator thereof and (d) actively pursue all other consents and approvals that may be required in connection with the assignment of the Assets to Buyer and the assumption of the liabilities assumed by Buyer hereunder, that shall not have been obtained prior to Closing. Buyer obligates itself to take any and all action required by any Governmental Authority in order to obtain such unconditional approval, including but not limited to, the posting of any and all bonds or other security that may be required in excess of its existing lease, pipeline or area-wide bond.

16.10 Entire Agreement; Conflicts. THIS AGREEMENT, THE EXHIBITS HERETO AND THE CONFIDENTIALITY AGREEMENT COLLECTIVELY CONSTITUTE THE ENTIRE AGREEMENT AMONG SELLER AND BUYER PERTAINING TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ALL PRIOR AGREEMENTS, UNDERSTANDINGS, NEGOTIATIONS, AND DISCUSSIONS, WHETHER ORAL OR WRITTEN, OF THE PARTIES PERTAINING TO THE SUBJECT MATTER HEREOF. THERE ARE NO WARRANTIES, REPRESENTATIONS, OR OTHER AGREEMENTS AMONG THE PARTIES RELATING TO THE SUBJECT MATTER HEREOF EXCEPT AS SPECIFICALLY

SET FORTH IN THIS AGREEMENT, AND NEITHER SELLER NOR BUYER SHALL BE BOUND BY OR LIABLE FOR ANY ALLEGED REPRESENTATION, PROMISE, INDUCEMENT, OR STATEMENTS OF INTENTION NOT SO SET FORTH. IN THE EVENT OF A CONFLICT BETWEEN THE TERMS AND PROVISIONS OF THIS AGREEMENT AND THE TERMS AND PROVISIONS OF ANY EXHIBIT HERETO, THE TERMS AND PROVISIONS OF THIS AGREEMENT SHALL GOVERN AND CONTROL; PROVIDED, HOWEVER, THAT THE INCLUSION IN ANY OF THE EXHIBITS HERETO OF TERMS AND PROVISIONS NOT ADDRESSED IN THIS AGREEMENT SHALL NOT BE DEEMED A CONFLICT, AND ALL SUCH ADDITIONAL PROVISIONS SHALL BE GIVEN FULL FORCE AND EFFECT, SUBJECT TO THE PROVISIONS OF THIS SECTION 16.10.

16.11 Parties in Interest. The terms and provisions of this Agreement shall be binding upon and inure to the benefit of Seller and Buyer and their respective legal representatives, successors, and assigns. No other person shall have any right, benefit, priority, or interest hereunder or as a result hereof or have standing to require satisfaction of the provisions hereof in accordance with their terms.

16.12 Amendment. This Agreement may be amended only by an instrument in writing executed by the parties hereto against whom enforcement is sought.

16.13 Waiver; Rights Cumulative. Any of the terms, covenants, representations, warranties, or conditions hereof may be waived only by a written instrument executed by or on behalf of the party hereto waiving compliance. No course of dealing on the part of Seller or Buyer, or their respective officers, employees, agents, or representatives, nor any failure by Seller or Buyer to exercise any of its rights under this Agreement shall operate as a waiver thereof or affect in any way the right of such party at a later time to enforce the performance of such provision. No waiver by any party of any condition, or any breach of any term, covenant, representation, or warranty contained in this Agreement, in any one or more instances, shall be deemed to be or construed as a further or continuing waiver of any such condition or breach or a waiver of any other condition or of any breach of any other term, covenant, representation, or warranty. The rights of Seller and Buyer under this Agreement shall be cumulative, and the exercise or partial exercise of any such right shall not preclude the exercise of any other right.

16.14 Governing Law; Jurisdiction, Venue; Jury Waiver. THIS AGREEMENT AND THE LEGAL RELATIONS AMONG THE PARTIES SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, EXCLUDING ANY CONFLICT OF LAWS RULE OR PRINCIPLE THAT MIGHT REFER CONSTRUCTION OF SUCH PROVISIONS TO THE LAWS OF ANOTHER JURISDICTION. ALL OF THE PARTIES HERETO CONSENT TO THE EXERCISE OF JURISDICTION IN PERSONAM BY THE COURTS OF THE STATE OF TEXAS FOR ANY ACTION ARISING OUT OF THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS. ALL ACTIONS OR PROCEEDINGS WITH RESPECT TO, ARISING DIRECTLY OR INDIRECTLY IN CONNECTION WITH, OUT OF, RELATED TO, OR FROM THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS SHALL BE EXCLUSIVELY LITIGATED IN COURTS HAVING SITES IN HOUSTON, HARRIS COUNTY, TEXAS. EACH PARTY HERETO WAIVES, TO THE FULLEST EXTENT

PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.

16.15 Severability. If any term or other provision of this Agreement is invalid, illegal, or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any adverse manner to any party. Upon such determination that any term or other provision is invalid, illegal, or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the extent possible.

16.16 Counterparts. This Agreement may be executed in any number of counterparts, and each such counterpart hereof shall be deemed to be an original instrument, but all of such counterparts shall constitute for all purposes one agreement. Any signature hereto delivered by a party by facsimile transmission shall be deemed an original signature hereto.

16.17 Like-Kind Exchange. Either party may elect to structure the assignment and conveyance of the Assets as part of a like-kind exchange under Section 1031 of the U.S. Internal Revenue Code. The parties agree to cooperate with one another with respect to the like-kind exchange and to execute all documents, conveyances and other instruments necessary to effectuate an exchange. The party requesting a like-kind exchange shall bear all costs and expenses and liability associated therewith.

16.18 TRANSTION AGREEMENT; DEEP DEPTHS AND DEEP DEPTHS OPERATING AGREEMENT; PLATFORMS.

(a) In order to facilitate the post-Closing transition of operations of certain of the Seller-operated Assets, Seller and Buyer shall enter into a Transition Agreement , pursuant to which Buyer will become contract operator of certain of the Seller-operated Assets as is therein specified. The form of a Transition Agreement shall be mutually agreed upon on or before ten (10) days prior to Closing, and will provide, among other provisions, a full and complete indemnification of Seller by Buyer, and shall also include a provision that if Buyer does not qualify as a Designated Operator of an Asset with the MMS within ninety (90) days after Closing, Buyer will execute a Designation of Operator of a co-working interest owner of the Asset to become the Designated Operator, unless requested otherwise by Seller. Additionally Seller and Buyer shall enter into an accounting and marketing services agreement with respect to the Assets, the form of which shall be mutually agreed to on or before 10 days prior to Closing.

(b) As to those Assets in which Seller is retaining Deep Depths pursuant to this Agreement, Seller and Buyer agree that it is to their mutual benefit that Buyer deliver to Seller copies of the monthly MMS OGAR reports relating to production of Hydrocarbons above those Deep Depths in those Assets, and Buyer agrees that it will do so.

(c) As to those Deep Depths in which Seller and Buyer will both own interests pursuant to this Agreement, for those Leases where there is no existing Operating Agreement applicable to the Deep Depths, Seller and Buyer shall (post-Closing, whenever requested, from time to time, by either Seller or Buyer) enter into an Operating Agreement, applicable separately on a Block by Block basis, substantially in the form attached hereto (or in such other form as they may mutually agree) as Exhibit G.

(d) To the extent that either Buyer or Seller is the owner of an interest in a platform that could be used to drill wells to the Deep Depths, or to process production from the Deep Depths, the owner shall agree to a Production Handling Agreement with the other party, based upon provisions substantially similar to those in the Operating Agreement form attached hereto as Exhibit G, or in such other form as the parties may mutually agree. If the owner of the platform does not own one hundred percent of a platform, but only an undivided interest therein, it shall use commercially reasonable efforts to have its co-owners agree to that Production Handling Agreement.

16.19 Revisions to Exhibits and Schedules. Between the date of execution of this Agreement and Closing the Parties agree to make such mutually agreeable revisions and/or corrections to the Exhibits and Schedules hereto as the Parties may deem appropriate.

[THE NEXT SUCCEEDING PAGE IS THE EXECUTION PAGE]

IN WITNESS WHEREOF, Seller and Buyer have executed this Agreement on the date first above written.

SELLER:

DEVON ENERGY PRODUCTION COMPANY, L.P.

By: /s/William A. Van Wie

Name: William A. Van Wie

Title: General Manager and Vice President

DEVON LOUISIANA CORPORATION

By: /s/William A. Van Wie

Name: William A. Van Wie

Title: General Manager and Vice President

DEVON ENERGY PETROLEUM PIPELINE COMPANY

By: /s/William A. Van Wie

Name: William A. Van Wie

Title: General Manager and Vice President

BUYER:

MARITECH RESOURCES, INC.

By: /s/G. M. McCarroll

Name: G. M. McCarroll

Title: President & Chief Operating Office

GUARANTOR:

TETRA TECHNOLOGIES, INC.

By: /s/Stuart M. Brightman

Name: Stuart M. Brightman

Title: Executive Vice President & COO

[EXHIBIT "A": Replaced by 1st Amendment to Purchase and Sale Agreement]

EXHIBIT A - WELLS

ATTACHED TO AND MADE A PART OF THAT CERTAIN PURCHASE AND SALE AGREEMENT DATED JULY 22, 2005 BY AND BETWEEN DEVON LOUISIANA CORPORATION AND DEVON ENERGY PRODUCTION COMPANY, L.P. and DEVON LOUISIANA CORPORATION and DEVON ENERGY PETROLEUM PIPELINE COMPANY, COLLECTIVELY AS SELLER, AND MARITECH RESOURCES, INC. AS BUYER

FIELD	WELL ID	WELL NAME	STATE/COUNTY	API	OPERATOR	BPO WI	BPO NRI	BPO RI	BPO ORI	APO WI	APO NRI	APO RI	APO ORI
BRAZOS BLOCK 0397	547490002	BA 396 A002 OCS G10213 (RC)	GOM OFFSHORE, GULF OF MEXICO	427044029200	DEVON LOUISIANA CORPORATION	0.65000000	0.46041700	0.00000000	0.00000000	0.65000000	0.46041700	0.00000000	0.00000000
BRAZOS BLOCK 0397	547487002	BA 396 0001 OCS G10213	OFFSHORE FED , TEXAS	427044025000	DEVON LOUISIANA CORPORATION	0.65000000	0.46041700	0.00000000	0.00000000	0.65000000	0.46041700	0.00000000	0.00000000
BRAZOS BLOCK 0431	547213001	BA 416 0001 OCS G09015	BRAZOS-LG BLK AREA, TEXAS	427044023700	DEVON LOUISIANA CORPORATION	0.33083300	0.00000000	0.00000000	0.00000000	0.33083300	0.00000000	0.00000000	0.00000000
EAST CAMERON BLOCK 0353	300197002	EC 353 A2 OCS G-2265	EAST CAMERON SO, GULF OF MEXICO	177044043900	APACHE CORPORATION	0.11136400	0.09280300	0.00000000	0.00000000	0.11136400	0.09280300	0.00000000	0.00000000
EAST CAMERON BLOCK 0353	300197004	EC 353 A4 OCS G-2265	EAST CAMERON SO, GULF OF MEXICO	177044044300	APACHE CORPORATION	0.11136400	0.09280300	0.00000000	0.00000000	0.11136400	0.09280300	0.00000000	0.00000000
EAST CAMERON BLOCK 0353	301114001	EC 354 A3 OCS G-2265	EAST CAMERON SO, GULF OF MEXICO	177044044000	APACHE CORPORATION	0.11136400	0.09280300	0.00000000	0.00000000	0.11136400	0.09280300	0.00000000	0.00000000
EUGENE ISLAND 128	530135001	EI 116 0009C OCS 00478	EUGENE ISLAND AREA, LOUISIANA	177094073800	DEVON LOUISIANA CORPORATION	1.00000000	0.81333300	0.00000000	0.00000000	1.00000000	0.81333300	0.00000000	0.00000000
EUGENE ISLAND 128	530139001	EI 116 0010ST OCS 00478	EUGENE ISLAND AREA, LOUISIANA	177094074603	DEVON LOUISIANA CORPORATION	1.00000000	0.80083300	0.00000000	0.00000000	1.00000000	0.80083300	0.00000000	0.00000000
EUGENE ISLAND 128	530135004	EI 116 0012B OCS 00478	EUGENE ISLAND AREA, LOUISIANA	177094080001	DEVON LOUISIANA CORPORATION	1.00000000	0.81333300	0.00000000	0.00000000	1.00000000	0.81333300	0.00000000	0.00000000
EUGENE ISLAND 128	530135005	EI 116 0013B OCS 00478	EUGENE ISLAND AREA, LOUISIANA	177094088301	DEVON LOUISIANA CORPORATION	1.00000000	0.81333300	0.00000000	0.00000000	1.00000000	0.81333300	0.00000000	0.00000000
EUGENE ISLAND 128	530133009	EI 128 C004H OCS 00053	EUGENE ISLAND AREA, LOUISIANA	177090058800	DEVON LOUISIANA CORPORATION	1.00000000	0.87500000	0.00000000	0.00000000	1.00000000	0.87500000	0.00000000	0.00000000
EUGENE ISLAND 128	530133021	EI 128 C005 OCS 00053	EUGENE ISLAND AREA, LOUISIANA	177090058200	DEVON LOUISIANA CORPORATION	1.00000000	0.87500000	0.00000000	0.00000000	1.00000000	0.87500000	0.00000000	0.00000000
EUGENE ISLAND 128	530133011	EI 128 C006 OCS 00053	EUGENE ISLAND AREA, LOUISIANA	177090058400	DEVON LOUISIANA CORPORATION	1.00000000	0.87500000	0.00000000	0.00000000	1.00000000	0.87500000	0.00000000	0.00000000
EUGENE ISLAND 128	530133012	EI 128 C007 OCS 00053	EUGENE ISLAND AREA, LOUISIANA	177090073601	DEVON LOUISIANA CORPORATION	1.00000000	0.87500000	0.00000000	0.00000000	1.00000000	0.87500000	0.00000000	0.00000000
EUGENE ISLAND 128	530133013	EI 128 C009C OCS 00053	EUGENE ISLAND AREA, LOUISIANA	177094017600	DEVON LOUISIANA CORPORATION	1.00000000	0.87500000	0.00000000	0.00000000	1.00000000	0.87500000	0.00000000	0.00000000
EUGENE ISLAND 128	530138002	EI 128 C010D OCS 00053 HAWKEYE	EUGENE ISLAND AREA, LOUISIANA	177094130900	DEVON LOUISIANA CORPORATION	1.00000000	0.85500000	0.00000000	0.00000000	1.00000000	0.85500000	0.00000000	0.00000000
EUGENE ISLAND 128	530133014	EI 128 F003 OCS 00053	EUGENE ISLAND AREA, LOUISIANA	177090058900	DEVON LOUISIANA CORPORATION	1.00000000	0.87500000	0.00000000	0.00000000	1.00000000	0.87500000	0.00000000	0.00000000
EUGENE ISLAND 128	530133015	EI 128 F003D OCS 00053	EUGENE ISLAND AREA, LOUISIANA	177090058900	DEVON LOUISIANA CORPORATION	1.00000000	0.87500000	0.00000000	0.00000000	1.00000000	0.87500000	0.00000000	0.00000000
EUGENE ISLAND 128	530133016	EI 128 F004 OCS 00053	EUGENE ISLAND AREA, LOUISIANA	177094072500	DEVON LOUISIANA CORPORATION	1.00000000	0.87500000	0.00000000	0.00000000	1.00000000	0.87500000	0.00000000	0.00000000
EUGENE ISLAND 128	530133001	EI 128 OCS 00053 0005G	EUGENE ISLAND AREA, LOUISIANA	177094062900	DEVON LOUISIANA CORPORATION	1.00000000	0.87500000	0.00000000	0.00000000	1.00000000	0.87500000	0.00000000	0.00000000
EUGENE ISLAND 128	530134011	EI 129 0010 OCS 00054	EUGENE ISLAND AREA, LOUISIANA	177094079602	DEVON LOUISIANA CORPORATION	1.00000000	0.87500000	0.00000000	0.00000000	1.00000000	0.87500000	0.00000000	0.00000000
EUGENE ISLAND 128	530140001	EI 129 0011 OCS 00054 CORNHUSK	EUGENE ISLAND AREA, LOUISIANA	177094131801	DEVON LOUISIANA CORPORATION	1.00000000	0.85500000	0.00000000	0.00000000	1.00000000	0.85500000	0.00000000	0.00000000
EUGENE ISLAND 128	530134006	EI 129 F002 OCS 00054	EUGENE ISLAND AREA, LOUISIANA	177090058500	DEVON LOUISIANA CORPORATION	1.00000000	0.87500000	0.00000000	0.00000000	1.00000000	0.87500000	0.00000000	0.00000000
EUGENE ISLAND 128	530133017	EI 128 C003ST OCS 00053	OFFSHORE FED , LOUISIANA	177090011400	DEVON LOUISIANA CORPORATION	1.00000000	0.87500000	0.00000000	0.00000000	1.00000000	0.87500000	0.00000000	0.00000000
EUGENE ISLAND 128	530133018	EI 128 F001 OCS 00053	OFFSHORE FED , LOUISIANA	177090058100	DEVON LOUISIANA CORPORATION	1.00000000	0.87500000	0.00000000	0.00000000	1.00000000	0.87500000	0.00000000	0.00000000
EUGENE ISLAND 147	10813010	EI 163 NO.1 (OCSG 17977)	EUGENE ISLAND, GULF OF MEXICO	177094134400	NEWFIELD EXPLORATION COMPANY	0.12500000	0.10416700	0.00000000	0.00000000	0.12500000	0.10416700	0.00000000	0.00000000
EUGENE ISLAND BLOCK 0007	532445001	EI 007 0001 ST LA 16194 MALIBU	EUGENE ISLAND AREA, LOUISIANA	177092033200	DEVON LOUISIANA CORPORATION	1.00000000	0.76500000	0.00000000	0.00000000	1.00000000	0.76500000	0.00000000	0.00000000
EUGENE ISLAND BLOCK 0007	532445002	EI 007 0002 ST LA 16194	EUGENE ISLAND AREA, LOUISIANA	177092033800	DEVON LOUISIANA CORPORATION	1.00000000	0.76500000	0.00000000	0.00000000	1.00000000	0.76500000	0.00000000	0.00000000

1 of 12

FIELD	WELL ID	WELL NAME	STATE/COUNTY	API	OPERATOR	BPO WI	BPO NRI	BPO RI	BPO ORI	APO WI	APO NRI	APO RI	APO ORI
EUGENE ISLAND BLOCK 0032	530379003	EI 033 0003 OCS G03560	EUGENE ISLAND AREA, LOUISIANA	177094075800	UNOCAL OIL & GAS DIVISION	0.09017000	0.00000000	0.00000000	0.00000000	0.09017000	0.00000000	0.00000000	0.00000000
EUGENE ISLAND BLOCK 0032	530383001	EI 033 0001 OCS G03560	OFFSHORE FED , LOUISIANA	177094048600	UNION OIL CO OF CALIFORNIA	0.15633100	0.00000000	0.00000000	0.00000000	0.15633100	0.00000000	0.00000000	0.00000000
EUGENE ISLAND BLOCK 0032	530378001	EI 033 0002 OCS G03560	OFFSHORE FED , LOUISIANA	177094073000	UNION OIL CO OF CALIFORNIA	0.09017000	0.00000000	0.00000000	0.00000000	0.09017000	0.00000000	0.00000000	0.00000000
EUGENE ISLAND BLOCK 0032	530381001	EI 033 0004 OCS G03560	OFFSHORE FED , LOUISIANA	177094097700	UNION OIL CO OF CALIFORNIA	0.13525500	0.00000000	0.00000000	0.00000000	0.13525500	0.00000000	0.00000000	0.00000000
EUGENE ISLAND BLOCK 0032	530380001	EI 033 0005 OCS G03560	OFFSHORE FED , LOUISIANA	177094097800	UNOCAL OIL & GAS DIVISION	0.15633100	0.00000000	0.00000000	0.00000000	0.15633100	0.00000000	0.00000000	0.00000000
EUGENE ISLAND BLOCK 0032	530382001	EI 033 A001 OCS G03560	OFFSHORE FED , LOUISIANA	177094112800	UNOCAL OIL & GAS DIVISION	0.15633100	0.00000000	0.00000000	0.00000000	0.15633100	0.00000000	0.00000000	0.00000000
EUGENE ISLAND BLOCK 0296	300130001	EI 305 B-1 (OCSG2108)	EUGENE ISLAND S, GULF OF MEXICO	177104024500	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.83333300	0.00000000	0.00000000	1.00000000	0.83333300	0.00000000	0.00000000
EUGENE ISLAND BLOCK 0296	300130010	EI 305 B-10 (OCSG2108)	EUGENE ISLAND S, GULF OF MEXICO	177104075300	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.83333300	0.00000000	0.00000000	1.00000000	0.83333300	0.00000000	0.00000000
EUGENE ISLAND BLOCK 0296	300130111	EI 305 B-11 (OCSG2108)	EUGENE ISLAND S, GULF OF MEXICO	177104139700	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.83333300	0.00000000	0.00000000	1.00000000	0.83333300	0.00000000	0.00000000
EUGENE ISLAND BLOCK 0296	300130120	EI 305 B-12 (OCSG2108)	EUGENE ISLAND S, GULF OF MEXICO	177104154500	DEVON ENERGY PRODUCTION CO., LP	0.75000000	0.62500000	0.00000000	0.00000000	0.75000000	0.62500000	0.00000000	0.00000000
EUGENE ISLAND BLOCK 0296	300130002	EI 305 B-2 (OCSG2108)	EUGENE ISLAND S, GULF OF MEXICO	177104055500	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.83333300	0.00000000	0.00000000	1.00000000	0.83333300	0.00000000	0.00000000
EUGENE ISLAND BLOCK 0296	300130003	EI 305 B-3 (OCSG2108)	EUGENE ISLAND S, GULF OF MEXICO	177104060500	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.83333300	0.00000000	0.00000000	1.00000000	0.83333300	0.00000000	0.00000000
EUGENE ISLAND BLOCK 0296	300130004	EI 305 B-4 (OCSG2108)	EUGENE ISLAND S, GULF OF MEXICO	177104060400	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.83333300	0.00000000	0.00000000	1.00000000	0.83333300	0.00000000	0.00000000
EUGENE ISLAND BLOCK 0296	300130051	EI 305 B-5ST OCSG2108	EUGENE ISLAND S, GULF OF MEXICO	177104060601	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.83333300	0.00000000	0.00000000	1.00000000	0.83333300	0.00000000	0.00000000
EUGENE ISLAND BLOCK 0296	300130006	EI 305 B-6 ST1 OCSG21080	EUGENE ISLAND S, GULF OF MEXICO	177104068102	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.83333300	0.00000000	0.00000000	1.00000000	0.83333300	0.00000000	0.00000000
EUGENE ISLAND BLOCK 0296	300130007	EI 305 B-7 (OCSG2108)	EUGENE ISLAND S, GULF OF MEXICO	177104069600	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.83333300	0.00000000	0.00000000	1.00000000	0.83333300	0.00000000	0.00000000
EUGENE ISLAND BLOCK 0296	300130008	EI 305 B-8 (OCSG2108)	EUGENE ISLAND S, GULF OF MEXICO	177104070600	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.83333300	0.00000000	0.00000000	1.00000000	0.83333300	0.00000000	0.00000000
EUGENE ISLAND BLOCK 0296	300130009	EI 305 B-9 (OCSG2108)	EUGENE ISLAND S, GULF OF MEXICO	177104075200	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.83333300	0.00000000	0.00000000	1.00000000	0.83333300	0.00000000	0.00000000
EUGENE ISLAND BLOCK 0297	530412001	EI 297 0003ST OCS G04225	EUGENE ISLAND-SOUTH AREA, LOUISIANA	177104151400	UNOCAL OIL & GAS DIVISION	0.07500000	0.06250000	0.00000000	0.00000000	0.07500000	0.06250000	0.00000000	0.00000000
EUGENE ISLAND BLOCK 0297	530406001	EI 297 A001 OCS G04225	OFFSHORE FED , LOUISIANA	177104115100	UNOCAL OIL & GAS DIVISION	0.07500000	0.06250000	0.00000000	0.00000000	0.07500000	0.06250000	0.00000000	0.00000000
EUGENE ISLAND BLOCK 0297	530408001	EI 297 A002 OCS G04225	OFFSHORE FED , LOUISIANA	177104115800	UNOCAL OIL & GAS DIVISION	0.07500000	0.06250000	0.00000000	0.00000000	0.07500000	0.06250000	0.00000000	0.00000000
EUGENE ISLAND BLOCK 0297	530407001	EI 297 A003 OCS G04225	OFFSHORE FED , LOUISIANA	177104116100	UNOCAL OIL & GAS DIVISION	0.07500000	0.06250000	0.00000000	0.00000000	0.07500000	0.06250000	0.00000000	0.00000000
EUGENE ISLAND BLOCK 0297	530409001	EI 297 A004 OCS G04225	OFFSHORE FED , LOUISIANA	177104137100	UNOCAL OIL & GAS DIVISION	0.07500000	0.06250000	0.00000000	0.00000000	0.07500000	0.06250000	0.00000000	0.00000000
EUGENE ISLAND BLOCK 0325	301071008	EI 325 A1-A OCS-G5517	EUGENE ISLAND S, GULF OF MEXICO	177104123600	FOREST OIL CORP.	0.33333300	0.23333300	0.00000000	0.00000000	0.33333300	0.23333300	0.00000000	0.00000000
EUGENE ISLAND BLOCK 0325	301071002	EI 325 A2/A2D OCSG-5517	EUGENE ISLAND S, GULF OF MEXICO	177104123900	FOREST OIL CORP.	0.33333300	0.23333300	0.00000000	0.00000000	0.33333300	0.23333300	0.00000000	0.00000000
EUGENE ISLAND BLOCK 0325	301071012	EI 325 A-3ST1 OCSG-5517	EUGENE ISLAND S, GULF OF MEXICO	177104125000	FOREST OIL CORP.	0.33333300	0.23333300	0.00000000	0.00000000	0.33333300	0.23333300	0.00000000	0.00000000
EUGENE ISLAND BLOCK 0325	301071013	EI 325 A-4ST1 BD SAND OSCG5517	EUGENE ISLAND S, GULF OF MEXICO	177104125501	FOREST OIL CORP.	0.33333300	0.23333300	0.00000000	0.00000000	0.33333300	0.23333300	0.00000000	0.00000000
EUGENE ISLAND BLOCK 0325	301071005	EI 325 A5 OCS G-5517	EUGENE ISLAND S, GULF OF MEXICO	177104129600	FOREST OIL CORP.	0.33333300	0.23333300	0.00000000	0.00000000	0.33333300	0.23333300	0.00000000	0.00000000
EUGENE ISLAND BLOCK 0325	301071009	EI 325 A6 {AE&AD SAND-RECOMPL}	EUGENE ISLAND S, GULF OF MEXICO	177104132100	FOREST OIL CORP.	0.33333300	0.23333300	0.00000000	0.00000000	0.33333300	0.23333300	0.00000000	0.00000000

2 of 12

FIELD	WELL ID	WELL NAME	STATE/COUNTY	API	OPERATOR	BPO WI	BPO NRI	BPO RI	BPO ORI	APO WI	APO NRI	APO RI	APO ORI
EUGENE ISLAND BLOCK 0325	301071007	EI 325 A7 OCS G-5517	EUGENE ISLAND S, GULF OF MEXICO	177104131400	FOREST OIL CORP.	0.33333300	0.23333300	0.00000000	0.00000000	0.33333300	0.23333300	0.00000000	0.00000000
EUGENE ISLAND BLOCK 0342	301209002	EI 342 C1	EUGENE ISLAND S, GULF OF MEXICO	177104113000	FOREST OIL CORPORATION	0.25000000	0.16666700	0.00000000	0.00000000	0.25000000	0.16666700	0.00000000	0.00000000
EUGENE ISLAND BLOCK 0342	301209006	EI 342 C10	EUGENE ISLAND S, GULF OF MEXICO	177104121500	FOREST OIL CORPORATION	0.25000000	0.16666700	0.00000000	0.00000000	0.25000000	0.16666700	0.00000000	0.00000000
EUGENE ISLAND BLOCK 0342	301209007	EI 342 C11	EUGENE ISLAND S, GULF OF MEXICO	177104122000	FOREST OIL CORPORATION	0.25000000	0.16666700	0.00000000	0.00000000	0.25000000	0.16666700	0.00000000	0.00000000
EUGENE ISLAND BLOCK 0342	301209013	EI 342 C12	EUGENE ISLAND S, GULF OF MEXICO	177104122200	FOREST OIL CORPORATION	0.38250000	0.30000000	0.00000000	0.00000000	0.38250000	0.30000000	0.00000000	0.00000000
EUGENE ISLAND BLOCK 0342	301209015	EI 342 C12D	EUGENE ISLAND S, GULF OF MEXICO	177104122200	FOREST OIL CORPORATION	0.38250000	0.30000000	0.00000000	0.00000000	0.38250000	0.30000000	0.00000000	0.00000000
EUGENE ISLAND BLOCK 0342	301209014	EI 342 C13	EUGENE ISLAND S, GULF OF MEXICO	177104122700	FOREST OIL CORPORATION	0.38250000	0.30000000	0.00000000	0.00000000	0.38250000	0.30000000	0.00000000	0.00000000
EUGENE ISLAND BLOCK 0342	301209017	EI 342 C14	EUGENE ISLAND S, GULF OF MEXICO	177104135800	FOREST OIL CORPORATION	0.25000000	0.20833300	0.00000000	0.00000000	0.25000000	0.20833300	0.00000000	0.00000000
EUGENE ISLAND BLOCK 0342	301209016	EI 342 C2	EUGENE ISLAND S, GULF OF MEXICO	177104110600	FOREST OIL CORPORATION	0.38250000	0.30000000	0.00000000	0.00000000	0.38250000	0.30000000	0.00000000	0.00000000
EUGENE ISLAND BLOCK 0342	301209008	EI 342 C3	EUGENE ISLAND S, GULF OF MEXICO	177104114000	FOREST OIL CORPORATION	0.38250000	0.30000000	0.00000000	0.00000000	0.38250000	0.30000000	0.00000000	0.00000000
EUGENE ISLAND BLOCK 0342	301209009	EI 342 C4	EUGENE ISLAND S, GULF OF MEXICO	177104120101	FOREST OIL CORPORATION	0.38250000	0.30000000	0.00000000	0.00000000	0.38250000	0.30000000	0.00000000	0.00000000
EUGENE ISLAND BLOCK 0342	301209020	EI 342 C4D	EUGENE ISLAND S, GULF OF MEXICO	177104120100	FOREST OIL CORPORATION	0.38250000	0.30000000	0.00000000	0.00000000	0.38250000	0.30000000	0.00000000	0.00000000
EUGENE ISLAND BLOCK 0342	301209003	EI 342 C5	EUGENE ISLAND S, GULF OF MEXICO	177104120200	FOREST OIL CORPORATION	0.25000000	0.16666700	0.00000000	0.00000000	0.25000000	0.16666700	0.00000000	0.00000000
EUGENE ISLAND BLOCK 0342	301209010	EI 342 C6	EUGENE ISLAND S, GULF OF MEXICO	177104120300	FOREST OIL CORPORATION	0.38250000	0.30000000	0.00000000	0.00000000	0.38250000	0.30000000	0.00000000	0.00000000
EUGENE ISLAND BLOCK 0342	301209005	EI 342 C7	EUGENE ISLAND S, GULF OF MEXICO	177104120800	FOREST OIL CORPORATION	0.25000000	0.16666700	0.00000000	0.00000000	0.25000000	0.16666700	0.00000000	0.00000000
EUGENE ISLAND BLOCK 0342	301209011	EI 342 C8	EUGENE ISLAND S, GULF OF MEXICO	177104121000	FOREST OIL CORPORATION	0.38250000	0.30000000	0.00000000	0.00000000	0.38250000	0.30000000	0.00000000	0.00000000
EUGENE ISLAND BLOCK 0342	301209012	EI 342 C9	EUGENE ISLAND S, GULF OF MEXICO	177104121300	FOREST OIL CORPORATION	0.38250000	0.30000000	0.00000000	0.00000000	0.38250000	0.30000000	0.00000000	0.00000000
EUGENE ISLAND BLOCK 0348	300198001	EI 348 A-2 (OCSG2321)	EUGENE ISLAND S, GULF OF MEXICO	177104073300	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.83333300	0.00000000	0.00000000	1.00000000	0.83333300	0.00000000	0.00000000
EUGENE ISLAND BLOCK 0348	300117010	EI 365 A-1	EUGENE ISLAND S, GULF OF MEXICO	177104073200	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.71333300	0.00000000	0.00000000	1.00000000	0.71333300	0.00000000	0.00000000
EUGENE ISLAND BLOCK 0348	300117031	EI 365 A-3AST (OCSG 13628)	EUGENE ISLAND S, GULF OF MEXICO	177104073400	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.71333300	0.00000000	0.00000000	1.00000000	0.71333300	0.00000000	0.00000000
EUGENE ISLAND BLOCK 0348	300117041	EI 365 A-4ST (OCSG13628)	EUGENE ISLAND S, GULF OF MEXICO	177104076501	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.71333300	0.00000000	0.00000000	1.00000000	0.71333300	0.00000000	0.00000000
EUGENE ISLAND BLOCK 0348	300117060	EI 365 A-5ST	EUGENE ISLAND S, GULF OF MEXICO	177104074701	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.71333300	0.00000000	0.00000000	1.00000000	0.71333300	0.00000000	0.00000000
EUGENE ISLAND BLOCK 0348	300117006	EI 365 A006 (OCS-G 13628)	EUGENE ISLAND, GULF OF MEXICO	177104158900	EL PASO PRODUCTION COMPANY	0.10000000	0.08333300	0.00000000	0.00000000	0.10000000	0.08333300	0.00000000	0.00000000
EUGENE ISLAND BLOCK 0348	301151001	EI 365 A-3ST OCS G-13628	EUGENE ISLAND, GULF OF MEXICO	177104073401	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.71333300	0.00000000	0.00000000	1.00000000	0.71333300	0.00000000	0.00000000
GALVESTON BLOCK 0273	547214004	GA 273 0001 OCS G09037	GALVESTON-LG BLK AREA, TEXAS	427064027100	DEVON LOUISIANA CORPORATION	0.65000000	0.53566700	0.00000000	0.00000000	0.65000000	0.53566700	0.00000000	0.00000000
GALVESTON BLOCK 0273	547214002	GA 273 0003 OCS G09037	GALVESTON-LG BLK AREA, TEXAS	427064029500	DEVON LOUISIANA CORPORATION	0.65000000	0.53566700	0.00000000	0.00000000	0.65000000	0.53566700	0.00000000	0.00000000
GALVESTON BLOCK 0273	547215001	GA 273 0005 OCS G09037	GALVESTON-LG BLK AREA, TEXAS	427064033100	DEVON LOUISIANA CORPORATION	1.00000000	0.82733300	0.00000000	0.00000000	0.65000000	0.53566700	0.00000000	0.00000000
GALVESTON BLOCK 0273	547217002	GA 273 A001 OCS G09037	GALVESTON-LG BLK AREA, TEXAS	427064027100	DEVON LOUISIANA CORPORATION	0.65000000	0.53566700	0.00000000	0.00000000	0.65000000	0.53566700	0.00000000	0.00000000
GALVESTON BLOCK 0273	547216001	GA 273 B001 OCS G09037	GALVESTON-LG BLK AREA, TEXAS	427064034400	DEVON LOUISIANA CORPORATION	1.00000000	0.79816700	0.00000000	0.00000000	1.00000000	0.79816700	0.00000000	0.00000000

3 of 12

FIELD	WELL ID	WELL NAME	STATE/COUNTY	API	OPERATOR	BPO WI	BPO NRI	BPO RI	BPO ORI	APO WI	APO NRI	APO RI	APO ORI
GALVESTON BLOCK 0273	547216002	GA 273 B001D OCS G09037	GALVESTON-LG BLK AREA, TEXAS	427064034400	DEVON LOUISIANA CORPORATION	1.00000000	0.79816700	0.00000000	0.00000000	1.00000000	0.79816700	0.00000000	0.00000000
GALVESTON BLOCK 0273	547230001	GA 283 B002 ST1 OCS G09039	GALVESTON-LG BLK AREA, TEXAS	427064035201	DEVON LOUISIANA CORPORATION	0.66666700	0.00000000	0.00000000	0.00000000	0.66666700	0.00000000	0.00000000	0.00000000
GALVESTON BLOCK 0333	547239010	GA 333 A001 OCS G06104	GALVESTON-LG BLK AREA, TEXAS	427064021500	ANADARKO PETROLEUM CORPORATION	0.15000000	0.12000000	0.00000000	0.00000000	0.15000000	0.12000000	0.00000000	0.00000000
GALVESTON BLOCK 0333	547239007	GA 333 A002 OCS G06104	GALVESTON-LG BLK AREA, TEXAS	427064024200	ANADARKO PETROLEUM CORPORATION	0.15000000	0.12000000	0.00000000	0.00000000	0.15000000	0.12000000	0.00000000	0.00000000
GALVESTON BLOCK 0333	547239011	GA 333 A003 OCS G06104	GALVESTON-LG BLK AREA, TEXAS	427064042000	ANADARKO PETROLEUM CORPORATION	0.15000000	0.12000000	0.00000000	0.00000000	0.15000000	0.12000000	0.00000000	0.00000000
GALVESTON BLOCK 0343	415580011	GA 343 A001 OCS G06105	GALVESTON-LG BLK AREA, TEXAS	427064020400	DEVON LOUISIANA CORPORATION	0.25000000	0.20208400	0.00000000	0.00000000	0.25000000	0.20208400	0.00000000	0.00000000
GALVESTON BLOCK 0343	415580023	GA 343 A002U OCS G06105	GALVESTON-LG BLK AREA, TEXAS	427064021300	DEVON LOUISIANA CORPORATION	0.25000000	0.20208400	0.00000000	0.00000000	0.25000000	0.20208400	0.00000000	0.00000000
GALVESTON BLOCK 0343	415580031	GA 343 A003L OCS G06105	GALVESTON-LG BLK AREA, TEXAS	427064022400	DEVON LOUISIANA CORPORATION	0.25000000	0.20208400	0.00000000	0.00000000	0.25000000	0.20208400	0.00000000	0.00000000
GALVESTON BLOCK 0343	415580032	GA 343 A003U OCS G 06105	GALVESTON-LG BLK AREA, TEXAS	427064022400	DEVON LOUISIANA CORPORATION	0.25000000	0.20208400	0.00000000	0.00000000	0.25000000	0.20208400	0.00000000	0.00000000
GALVESTON BLOCK 0343	415580043	GA 343 A004 OCS G06105	GALVESTON-LG BLK AREA, TEXAS	427064022500	DEVON LOUISIANA CORPORATION	0.25000000	0.20208400	0.00000000	0.00000000	0.25000000	0.20208400	0.00000000	0.00000000
GALVESTON BLOCK 0343	415580041	GA 343 A004L OCS G06105	GALVESTON-LG BLK AREA, TEXAS	427064022500	DEVON LOUISIANA CORPORATION	0.28409100	0.23049300	0.00000000	0.00000000	0.25000000	0.20208400	0.00000000	0.00000000
GALVESTON BLOCK 0343	415580051	GA 343 A005 OCS G06105	GALVESTON-LG BLK AREA, TEXAS	427064027000	DEVON LOUISIANA CORPORATION	0.25000000	0.20208400	0.00000000	0.00000000	0.25000000	0.20208400	0.00000000	0.00000000
GALVESTON BLOCK 0343	415580061	GA 343 A006L OCS G06105	GALVESTON-LG BLK AREA, TEXAS	427064023100	DEVON LOUISIANA CORPORATION	0.25000000	0.20208400	0.00000000	0.00000000	0.25000000	0.20208400	0.00000000	0.00000000
GALVESTON BLOCK 0343	415580062	GA 343 A006U OCS G06105	GALVESTON-LG BLK AREA, TEXAS	427064023100	DEVON LOUISIANA CORPORATION	0.25000000	0.20208400	0.00000000	0.00000000	0.25000000	0.20208400	0.00000000	0.00000000
GALVESTON BLOCK 0343	415580092	GA 343 A009L OCS G 06105	GALVESTON-LG BLK AREA, TEXAS	427064024600	DEVON LOUISIANA CORPORATION	0.25000000	0.20208400	0.00000000	0.00000000	0.25000000	0.20208400	0.00000000	0.00000000
GALVESTON BLOCK 0343	415580093	GA 343 A009U OCS G06105	GALVESTON-LG BLK AREA, TEXAS	427064024600	DEVON LOUISIANA CORPORATION	0.25000000	0.20208400	0.00000000	0.00000000	0.25000000	0.20208400	0.00000000	0.00000000
GALVESTON BLOCK 0343	415580101	GA 343 A010L OCS G 06105	GALVESTON-LG BLK AREA, TEXAS	427064033700	DEVON LOUISIANA CORPORATION	0.32500000	0.26383300	0.00000000	0.00000000	0.32500000	0.26383300	0.00000000	0.00000000
GALVESTON BLOCK 0343	415580102	GA 343 A010U OCS G06105	GALVESTON-LG BLK AREA, TEXAS	427064033700	DEVON LOUISIANA CORPORATION	0.32500000	0.26383300	0.00000000	0.00000000	0.32500000	0.26383300	0.00000000	0.00000000
GALVESTON BLOCK 0343	415580113	GA 343 A011L OCS G06105	GALVESTON-LG BLK AREA, TEXAS	427064021100	DEVON LOUISIANA CORPORATION	0.25000000	0.20208400	0.00000000	0.00000000	0.25000000	0.20208400	0.00000000	0.00000000
GALVESTON BLOCK 0343	415580112	GA 343 A011U OCS G06105	GALVESTON-LG BLK AREA, TEXAS	427064021100	DEVON LOUISIANA CORPORATION	0.25000000	0.20208400	0.00000000	0.00000000	0.25000000	0.20208400	0.00000000	0.00000000
GALVESTON BLOCK 0343	415760010	GA 363 0001 OCS G06113	GALVESTON-LG BLK AREA, TEXAS	427064021100	DEVON LOUISIANA CORPORATION	0.37500000	0.30500100	0.00000000	0.00000000	0.37500000	0.30500100	0.00000000	0.00000000
GALVESTON BLOCK 0343	415760021	GA 363 A002L OCS G06113	GALVESTON-LG BLK AREA, TEXAS	427064021400	DEVON LOUISIANA CORPORATION	0.37500000	0.30500100	0.00000000	0.00000000	0.37500000	0.30500100	0.00000000	0.00000000
GALVESTON BLOCK 0343	415760022	GA 363 A002U OCS G 06113	GALVESTON-LG BLK AREA, TEXAS	427064021400	DEVON LOUISIANA CORPORATION	0.37500000	0.30500100	0.00000000	0.00000000	0.37500000	0.30500100	0.00000000	0.00000000
GALVESTON BLOCK 0343	415760031	GA 363 A003 OCS G06113	GALVESTON-LG BLK AREA, TEXAS	427064022200	DEVON LOUISIANA CORPORATION	0.37500000	0.30500100	0.00000000	0.00000000	0.37500000	0.30500100	0.00000000	0.00000000
GALVESTON BLOCK 0343	533175001	GA 343 0008 OCS G06105	OFFSHORE FED , TEXAS	427064023900	DEVON LOUISIANA CORPORATION	0.25000000	0.20208400	0.00000000	0.00000000	0.25000000	0.20208400	0.00000000	0.00000000
GALVESTON BLOCK 0379	533228001	GA 363 0004 OCS G06113	OFFSHORE FED , TEXAS	427064025200	DEVON LOUISIANA CORPORATION	0.37500000	0.30500100	0.00000000	0.00000000	0.37500000	0.30500100	0.00000000	0.00000000
GRAND ISLE BLOCK 0068	532448003	GI 068 A001 OCS G15353	GRAND ISLE AREA, LOUISIANA	177174040500	DEVON LOUISIANA CORPORATION	1.00000000	0.00000000	0.00000000	0.00000000	0.60000000	0.00000000	0.00000000	0.00000000
GRAND ISLE BLOCK 0068	532448004	GI 068 A001D OCS G15353	GRAND ISLE AREA, LOUISIANA	177174040500	DEVON LOUISIANA CORPORATION	1.00000000	0.00000000	0.00000000	0.00000000	0.60000000	0.00000000	0.00000000	0.00000000
HIGH ISLAND 340 (A) E.A.S.E.	547450001	HI A339 A002 OCS G02739	HIGH ISLAND EAST & SOUTH AREA, TEXAS	427114013600	MERIT ENERGY COMPANY	0.00293500	0.00244600	0.00000000	0.00000000	0.00293500	0.00244600	0.00000000	0.00000000

4 of 12

FIELD	WELL ID	WELL NAME	STATE/COUNTY	API	OPERATOR	BPO WI	BPO NRI	BPO RI	BPO ORI	APO WI	APO NRI	APO RI	APO ORI
HIGH ISLAND 340 (A) E.A.S.E.	547450002	HI A339 A004 OCS G02739	HIGH ISLAND EAST & SOUTH AREA, TEXAS	427114015400	MERIT ENERGY COMPANY	0.00293500	0.00244600	0.00000000	0.00000000	0.00293500	0.00244600	0.00000000	0.00000000
HIGH ISLAND 340 (A) E.A.S.E.	547451001	HI A339 A005 OCS G02739	HIGH ISLAND EAST & SOUTH AREA, TEXAS	427114015700	MERIT ENERGY COMPANY	0.00293500	0.00244600	0.00000000	0.00000000	0.00293500	0.00244600	0.00000000	0.00000000
HIGH ISLAND 340 (A) E.A.S.E.	547450004	HI A339 A008 OCS G02739	HIGH ISLAND EAST & SOUTH AREA, TEXAS	427114017800	MERIT ENERGY COMPANY	0.00293500	0.00244600	0.00000000	0.00000000	0.00293500	0.00244600	0.00000000	0.00000000
HIGH ISLAND 340 (A) E.A.S.E.	547450005	HI A339 A008D OCS G02739	HIGH ISLAND EAST & SOUTH AREA, TEXAS	427114017800	MERIT ENERGY COMPANY	0.00293500	0.00244600	0.00000000	0.00000000	0.00293500	0.00244600	0.00000000	0.00000000
HIGH ISLAND 340 (A) E.A.S.E.	547450007	HI A339 A012 OCS G02739	HIGH ISLAND EAST & SOUTH AREA, TEXAS	427114021100	MERIT ENERGY COMPANY	0.00293500	0.00244600	0.00000000	0.00000000	0.00293500	0.00244600	0.00000000	0.00000000
HIGH ISLAND 340 (A) E.A.S.E.	547450008	HI A339 A013 OCS G02739	HIGH ISLAND EAST & SOUTH AREA, TEXAS	427114022300	MERIT ENERGY COMPANY	0.00293500	0.00244600	0.00000000	0.00000000	0.00293500	0.00244600	0.00000000	0.00000000
HIGH ISLAND 340 (A) E.A.S.E.	547450009	HI A339 A014 OCS G02739	HIGH ISLAND EAST & SOUTH AREA, TEXAS	427114023500	MERIT ENERGY COMPANY	0.00293500	0.00244600	0.00000000	0.00000000	0.00293500	0.00244600	0.00000000	0.00000000
HIGH ISLAND 340 (A) E.A.S.E.	547450011	HI A339 A015A OCS G02739	HIGH ISLAND EAST & SOUTH AREA, TEXAS	427114024100	MERIT ENERGY COMPANY	0.00293500	0.00244600	0.00000000	0.00000000	0.00293500	0.00244600	0.00000000	0.00000000
HIGH ISLAND 340 (A) E.A.S.E.	547450010	HI A339 A015D OCS G02739	HIGH ISLAND EAST & SOUTH AREA, TEXAS	427114024100	MERIT ENERGY COMPANY	0.00293500	0.00244600	0.00000000	0.00000000	0.00293500	0.00244600	0.00000000	0.00000000
HIGH ISLAND 340 (A) E.A.S.E.	547450012	HI A339 A022 OCS G02739 (A16ST	HIGH ISLAND EAST & SOUTH AREA, TEXAS	427114025800	MERIT ENERGY COMPANY	0.00293500	0.00244600	0.00000000	0.00000000	0.00293500	0.00244600	0.00000000	0.00000000
HIGH ISLAND 340 (A) E.A.S.E.	547452002	HI A339 A025ST1 OCS G02739	HIGH ISLAND EAST & SOUTH AREA, TEXAS	427114082600	MERIT ENERGY COMPANY	0.00308900	0.00257400	0.00000000	0.00000000	0.00293500	0.00244600	0.00000000	0.00000000
HIGH ISLAND 340 (A) E.A.S.E.	547455001	HI A340 A001 OCS G02426	HIGH ISLAND EAST & SOUTH AREA, TEXAS	427114012800	MERIT ENERGY COMPANY	0.00293500	0.00244600	0.00000000	0.00000000	0.00293500	0.00244600	0.00000000	0.00000000
HIGH ISLAND 340 (A) E.A.S.E.	547455002	HI A340 A003A OCS G02426	HIGH ISLAND EAST & SOUTH AREA, TEXAS	427114014200	MERIT ENERGY COMPANY	0.00293500	0.00244600	0.00000000	0.00000000	0.00293500	0.00244600	0.00000000	0.00000000
HIGH ISLAND 340 (A) E.A.S.E.	547455003	HI A340 A006 OCS G02426	HIGH ISLAND EAST & SOUTH AREA, TEXAS	427114016400	MERIT ENERGY COMPANY	0.00293500	0.00244600	0.00000000	0.00000000	0.00293500	0.00244600	0.00000000	0.00000000
HIGH ISLAND 340 (A) E.A.S.E.	547455004	HI A340 A009 OCS G02426	HIGH ISLAND EAST & SOUTH AREA, TEXAS	427114018800	MERIT ENERGY COMPANY	0.00293500	0.00244600	0.00000000	0.00000000	0.00293500	0.00244600	0.00000000	0.00000000
HIGH ISLAND 340 (A) E.A.S.E.	547455007	HI A340 A018 OCS G02426	HIGH ISLAND EAST & SOUTH AREA, TEXAS	427114026300	MERIT ENERGY COMPANY	0.00293500	0.00244600	0.00000000	0.00000000	0.00293500	0.00244600	0.00000000	0.00000000
HIGH ISLAND 340 (A) E.A.S.E.	547455008	HI A340 A019 OCS G02426	HIGH ISLAND EAST & SOUTH AREA, TEXAS	427114026900	MERIT ENERGY COMPANY	0.00293500	0.00244600	0.00000000	0.00000000	0.00293500	0.00244600	0.00000000	0.00000000
HIGH ISLAND 340 (A) E.A.S.E.	547455009	HI A340 A020 OCS G02426	HIGH ISLAND EAST & SOUTH AREA, TEXAS	427114027800	MERIT ENERGY COMPANY	0.00293500	0.00244600	0.00000000	0.00000000	0.00293500	0.00244600	0.00000000	0.00000000
HIGH ISLAND 340 (A) E.A.S.E.	547455010	HI A340 A020D OCS G02426	HIGH ISLAND EAST & SOUTH AREA, TEXAS	427114027800	MERIT ENERGY COMPANY	0.00293500	0.00244600	0.00000000	0.00000000	0.00293500	0.00244600	0.00000000	0.00000000
HIGH ISLAND 340 (A) E.A.S.E.	547455011	HI A340 A021ST OCS G02426	HIGH ISLAND EAST & SOUTH AREA, TEXAS	427114028200	MERIT ENERGY COMPANY	0.00293500	0.00244600	0.00000000	0.00000000	0.00293500	0.00244600	0.00000000	0.00000000
HIGH ISLAND 340 (A) E.A.S.E.	547455012	HI A340 A023 OCS G02426	HIGH ISLAND EAST & SOUTH AREA, TEXAS	427114030500	MERIT ENERGY COMPANY	0.00293500	0.00244600	0.00000000	0.00000000	0.00293500	0.00244600	0.00000000	0.00000000
HIGH ISLAND 340 (A) E.A.S.E.	547455013	HI A340 A024 OCS G02426	HIGH ISLAND EAST & SOUTH AREA, TEXAS	427114030700	MERIT ENERGY COMPANY	0.00293500	0.00244600	0.00000000	0.00000000	0.00293500	0.00244600	0.00000000	0.00000000
HIGH ISLAND 340 (A) E.A.S.E.	547453001	HI A339 A024ST1 OCS G02739	OFFSHORE FED , LOUISIANA	427114030702	MERIT ENERGY COMPANY	0.00308900	0.00257400	0.00000000	0.00000000	0.00293500	0.00244600	0.00000000	0.00000000
HIGH ISLAND 340 (A) E.A.S.E.	547454001	HI A339 A011ST1 OCS G02739	OFFSHORE FED , TEXAS	427114021001	MERIT ENERGY COMPANY	0.00308900	0.00257400	0.00000000	0.00000000	0.00293500	0.00244600	0.00000000	0.00000000
HIGH ISLAND 340 (A) E.A.S.E.	547456001	HI A340 A012ST1 OCS G02426	OFFSHORE FED , TEXAS	427114021101	MERIT ENERGY COMPANY	0.00308900	0.00257400	0.00000000	0.00000000	0.00293500	0.00244600	0.00000000	0.00000000
HIGH ISLAND 340 (A) E.A.S.E.	547455006	HI A340 A017 OCS G02426	OFFSHORE FED , TEXAS	427114026100	MERIT ENERGY COMPANY	0.00293500	0.00244600	0.00000000	0.00000000	0.00293500	0.00244600	0.00000000	0.00000000
HIGH ISLAND 474 (A) S ADD.	547431002	HI A489 B021 ST2 OCS G02372	HIGH IS - SOUTH, GULF OF MEXICO	427090262020	NEWFIELD EXPLORATION COMPANY	0.00234800	0.00195700	0.00000000	0.00000000	0.00234800	0.00195700	0.00000000	0.00000000
HIGH ISLAND 474 (A) S ADD.	547434002	HI A489 B025 OCS G02372 (RC)	HIGH IS - SOUTH, GULF OF MEXICO	427094041400	NEWFIELD EXPLORATION MID-CONTINENT INC.	0.00234800	0.00195700	0.00000000	0.00000000	0.00234800	0.00195700	0.00000000	0.00000000
HIGH ISLAND 474 (A) S ADD.	547415001	HI A474 A013ST2 OCS G02366	HIGH ISLAND SOUTH AREA, TEXAS	427094036100	NEWFIELD EXPLORATION MID-CONTINENT INC.	0.00303700	0.00253100	0.00000000	0.00000000	0.00234800	0.00195700	0.00000000	0.00000000

5 of 12

FIELD	WELL ID	WELL NAME	STATE/COUNTY	API	OPERATOR	BPO WI	BPO NRI	BPO RI	BPO ORI	APO WI	APO NRI	APO RI	APO ORI
HIGH ISLAND 474 (A) S ADD.	547414001	HI A474 A018 OCS G02366	HIGH ISLAND SOUTH AREA, TEXAS	427094033100	NEWFIELD EXPLORATION MID-CONTINENT INC.	0.00266800	0.00222300	0.00000000	0.00000000	0.00234800	0.00195700	0.00000000	0.00000000
HIGH ISLAND 474 (A) S ADD.	547419003	HI A489 B005ST OCS G02372	HIGH ISLAND SOUTH AREA, TEXAS	427094024600	NEWFIELD EXPLORATION MID-CONTINENT INC.	0.00268900	0.00224100	0.00000000	0.00000000	0.00234800	0.00195700	0.00000000	0.00000000
HIGH ISLAND 474 (A) S ADD.	547412022	HI A474 A017 OCS G02366	OFFSHORE FED , LOUISIANA	427094032500	NEWFIELD EXPLORATION MID-CONTINENT INC.	0.00234800	0.00195700	0.00000000	0.00000000	0.00234800	0.00195700	0.00000000	0.00000000
HIGH ISLAND 474 (A) S ADD.	547412024	HI A474 A001 OCS G02366	OFFSHORE FED , TEXAS	427094017100	NEWFIELD EXPLORATION MID-CONTINENT INC.	0.00234800	0.00195700	0.00000000	0.00000000	0.00234800	0.00195700	0.00000000	0.00000000
HIGH ISLAND 474 (A) S ADD.	547412002	HI A474 A002 OCS G02366	OFFSHORE FED , TEXAS	427094017200	NEWFIELD EXPLORATION MID-CONTINENT INC.	0.00234800	0.00195700	0.00000000	0.00000000	0.00234800	0.00195700	0.00000000	0.00000000
HIGH ISLAND 474 (A) S ADD.	547412003	HI A474 A003 OCS G02366	OFFSHORE FED , TEXAS	427094019900	NEWFIELD EXPLORATION MID-CONTINENT INC.	0.00234800	0.00195700	0.00000000	0.00000000	0.00234800	0.00195700	0.00000000	0.00000000
HIGH ISLAND 474 (A) S ADD.	547412004	HI A474 A003D OCS G02366	OFFSHORE FED , TEXAS	427094019900	NEWFIELD EXPLORATION MID-CONTINENT INC.	0.00234800	0.00195700	0.00000000	0.00000000	0.00234800	0.00195700	0.00000000	0.00000000
HIGH ISLAND 474 (A) S ADD.	547412005	HI A474 A004 OCS G02366	OFFSHORE FED , TEXAS	427094022800	NEWFIELD EXPLORATION MID-CONTINENT INC.	0.00234800	0.00195700	0.00000000	0.00000000	0.00234800	0.00195700	0.00000000	0.00000000
HIGH ISLAND 474 (A) S ADD.	547412006	HI A474 A005 OCS G02366	OFFSHORE FED , TEXAS	427094023500	NEWFIELD EXPLORATION MID-CONTINENT INC.	0.00234800	0.00195700	0.00000000	0.00000000	0.00234800	0.00195700	0.00000000	0.00000000
HIGH ISLAND 474 (A) S ADD.	547412007	HI A474 A006 OCS G02366	OFFSHORE FED , TEXAS	427094024300	NEWFIELD EXPLORATION MID-CONTINENT INC.	0.00234800	0.00195700	0.00000000	0.00000000	0.00234800	0.00195700	0.00000000	0.00000000
HIGH ISLAND 474 (A) S ADD.	547413001	HI A474 A007ST OCS G02366	OFFSHORE FED , TEXAS	427094027702	NEWFIELD EXPLORATION MID-CONTINENT INC.	0.00301000	0.00250800	0.00000000	0.00000000	0.00234800	0.00195700	0.00000000	0.00000000
HIGH ISLAND 474 (A) S ADD.	547412009	HI A474 A009 OCS G02366	OFFSHORE FED , TEXAS	427094028500	NEWFIELD EXPLORATION MID-CONTINENT INC.	0.00234800	0.00195700	0.00000000	0.00000000	0.00234800	0.00195700	0.00000000	0.00000000
HIGH ISLAND 474 (A) S ADD.	547412010	HI A474 A010 OCS G02366	OFFSHORE FED , TEXAS	427094029400	NEWFIELD EXPLORATION MID-CONTINENT INC.	0.00234800	0.00195700	0.00000000	0.00000000	0.00234800	0.00195700	0.00000000	0.00000000
HIGH ISLAND 474 (A) S ADD.	547412011	HI A474 A011 OCS G02366	OFFSHORE FED , TEXAS	427094030000	NEWFIELD EXPLORATION MID-CONTINENT INC.	0.00234800	0.00195700	0.00000000	0.00000000	0.00234800	0.00195700	0.00000000	0.00000000
HIGH ISLAND 474 (A) S ADD.	547412012	HI A474 A012ST OCS G02366	OFFSHORE FED , TEXAS	427094030801	NEWFIELD EXPLORATION MID-CONTINENT INC.	0.00234800	0.00195700	0.00000000	0.00000000	0.00234800	0.00195700	0.00000000	0.00000000
HIGH ISLAND 474 (A) S ADD.	547412014	HI A474 A014 OCS G02366	OFFSHORE FED , TEXAS	427094035000	NEWFIELD EXPLORATION MID-CONTINENT INC.	0.00234800	0.00195700	0.00000000	0.00000000	0.00234800	0.00195700	0.00000000	0.00000000
HIGH ISLAND 474 (A) S ADD.	547412015	HI A474 A015 OCS G02366	OFFSHORE FED , TEXAS	427094037000	NEWFIELD EXPLORATION MID-CONTINENT INC.	0.00234800	0.00195700	0.00000000	0.00000000	0.00234800	0.00195700	0.00000000	0.00000000
HIGH ISLAND 474 (A) S ADD.	547412016	HI A474 A016 OCS G02366	OFFSHORE FED , TEXAS	427094035500	NEWFIELD EXPLORATION MID-CONTINENT INC.	0.00234800	0.00195700	0.00000000	0.00000000	0.00234800	0.00195700	0.00000000	0.00000000
HIGH ISLAND 474 (A) S ADD.	547412018	HI A474 A018 OCS G02366	OFFSHORE FED , TEXAS	427094001300	NEWFIELD EXPLORATION MID-CONTINENT INC.	0.00234800	0.00195700	0.00000000	0.00000000	0.00234800	0.00195700	0.00000000	0.00000000
HIGH ISLAND 474 (A) S ADD.	547412019	HI A474 A020 OCS G02366	OFFSHORE FED , TEXAS	427094038500	NEWFIELD EXPLORATION MID-CONTINENT INC.	0.00234800	0.00195700	0.00000000	0.00000000	0.00234800	0.00195700	0.00000000	0.00000000
HIGH ISLAND 474 (A) S ADD.	547412020	HI A474 A021 OCS G02366	OFFSHORE FED , TEXAS	427094040700	NEWFIELD EXPLORATION MID-CONTINENT INC.	0.00234800	0.00195700	0.00000000	0.00000000	0.00234800	0.00195700	0.00000000	0.00000000
HIGH ISLAND 474 (A) S ADD.	547412023	HI A474 B023 OCS G02366	OFFSHORE FED , TEXAS	427094037200	NEWFIELD EXPLORATION MID-CONTINENT INC.	0.00234800	0.00195700	0.00000000	0.00000000	0.00234800	0.00195700	0.00000000	0.00000000
HIGH ISLAND 474 (A) S ADD.	547416001	HI A489 A015 OCS G02372	OFFSHORE FED , TEXAS	427094037000	NEWFIELD EXPLORATION MID-CONTINENT INC.	0.00234800	0.00195700	0.00000000	0.00000000	0.00234800	0.00195700	0.00000000	0.00000000
HIGH ISLAND 474 (A) S ADD.	547417001	HI A489 B002 OCS G02372	OFFSHORE FED , TEXAS	427094021000	NEWFIELD EXPLORATION MID-CONTINENT INC.	0.00234800	0.00195700	0.00000000	0.00000000	0.00234800	0.00195700	0.00000000	0.00000000
HIGH ISLAND 474 (A) S ADD.	547423001	HI A489 B012 OCS G02372	OFFSHORE FED , TEXAS	427094031400	NEWFIELD EXPLORATION MID-CONTINENT INC.	0.00234800	0.00195700	0.00000000	0.00000000	0.00234800	0.00195700	0.00000000	0.00000000
HIGH ISLAND 474 (A) S ADD.	547424001	HI A489 B013A OCS G02372	OFFSHORE FED , TEXAS	427094028600	NEWFIELD EXPLORATION MID-CONTINENT INC.	0.00234800	0.00195700	0.00000000	0.00000000	0.00234800	0.00195700	0.00000000	0.00000000
HIGH ISLAND 474 (A) S ADD.	547426001	HI A489 B015B OCS G02372	OFFSHORE FED , TEXAS	427094030400	NEWFIELD EXPLORATION MID-CONTINENT INC.	0.00299000	0.00249200	0.00000000	0.00000000	0.00234800	0.00195700	0.00000000	0.00000000
HIGH ISLAND 474 (A) S ADD.	547429002	HI A489 B018ST1 OCS G02372	OFFSHORE FED , TEXAS	427094032801	NEWFIELD EXPLORATION MID-CONTINENT INC.	0.00256600	0.00213800	0.00000000	0.00000000	0.00234800	0.00195700	0.00000000	0.00000000
HIGH ISLAND 474 (A) S ADD.	547431001	HI A489 B021 OCS G02372	OFFSHORE FED , TEXAS	427090262000	NEWFIELD EXPLORATION MID-CONTINENT INC.	0.00234800	0.00195700	0.00000000	0.00000000	0.00234800	0.00195700	0.00000000	0.00000000

6 of 12

FIELD	WELL ID	WELL NAME	STATE/COUNTY	API	OPERATOR	BPO WI	BPO NRI	BPO RI	BPO ORI	APO WI	APO NRI	APO RI	APO ORI
HIGH ISLAND 474 (A) S ADD.	547432001	HI A489 B022 OCS G02372	OFFSHORE FED , TEXAS	427094036000	NEWFIELD EXPLORATION MID-CONTINENT INC.	0.00234800	0.00195700	0.00000000	0.00000000	0.00234800	0.00195700	0.00000000	0.00000000
HIGH ISLAND 474 (A) S ADD.	547438001	HI A489 B029 OCS G02372	OFFSHORE FED , TEXAS	427094111100	NEWFIELD EXPLORATION MID-CONTINENT INC.	0.00234800	0.00195700	0.00000000	0.00000000	0.00234800	0.00195700	0.00000000	0.00000000
HIGH ISLAND 474 (A) S ADD.	547439001	HI A499 C001 OCS G03118	OFFSHORE FED , TEXAS	427094062600	NEWFIELD EXPLORATION MID-CONTINENT INC.	0.00247800	0.00206500	0.00000000	0.00000000	0.00247800	0.00206500	0.00000000	0.00000000
HIGH ISLAND 474 (A) S ADD.	547442002	HI A499 C004 OCS G03118	OFFSHORE FED , TEXAS	427094070600	NEWFIELD EXPLORATION MID-CONTINENT INC.	0.00247800	0.00206500	0.00000000	0.00000000	0.00247800	0.00206500	0.00000000	0.00000000
HIGH ISLAND 474 (A) S ADD.	547444001	HI A499 C006 OCS G03118	OFFSHORE FED , TEXAS	427094068200	NEWFIELD EXPLORATION MID-CONTINENT INC.	0.00247800	0.00206500	0.00000000	0.00000000	0.00247800	0.00206500	0.00000000	0.00000000
HIGH ISLAND 474 (A) S ADD.	547446001	HI A499 C007 OCS G03118	OFFSHORE FED , TEXAS	427094111300	NEWFIELD EXPLORATION MID-CONTINENT INC.	0.00287800	0.00239900	0.00000000	0.00000000	0.00247800	0.00206500	0.00000000	0.00000000
HIGH ISLAND BLOCK 0030	545431001	HI 030L 0004A STATE TRACT #30L	, TEXAS		GOLD KING PRODUCTION CO	0.43750000	0.36458200	0.00000000	0.00000000	0.43750000	0.36458200	0.00000000	0.00000000
HIGH ISLAND BLOCK 0030	545426001	HI 030L 0006 STATE TRACT #30L	, TEXAS		GOLD KING PRODUCTION CO	0.12933100	0.10777600	0.00000000	0.00000000	0.12933100	0.10777600	0.00000000	0.00000000
HIGH ISLAND BLOCK 0030	545425001	HI 030L 0002 STATE TRACT #30L	HIGH ISLAND-LG BLK AREA, TEXAS		GOLD KING PRODUCTION CO	0.00131800	0.00109900	0.00000000	0.00000000	0.00131800	0.00109900	0.00000000	0.00000000
HIGH ISLAND BLOCK 0030	545428001	HI 030L 0001 ST TX M63547	JEFFERSON, TEXAS		GOLD KING PRODUCTION CO	0.11069300	0.09224500	0.00000000	0.00000000	0.11069300	0.09224500	0.00000000	0.00000000
HIGH ISLAND BLOCK 0030	545434001	HI 030L 0004U STATE TRACT #30L	JEFFERSON, TEXAS		GOLD KING PRODUCTION CO	0.22656200	0.18880300	0.00000000	0.00000000	0.22656200	0.18880300	0.00000000	0.00000000
HIGH ISLAND BLOCK 0045	301047001	HI 45 #1	HIGH IS - E, SO, GULF OF MEXICO	427104011600	DOMINION EXPLORATION & PRODUCI	0.10000000	0.08333300	0.00000000	0.00000000	0.10000000	0.08333300	0.00000000	0.00000000
HIGH ISLAND BLOCK 0098-L	530557006	HI 098L 0001L ST1 ST TX M96905	HIGH ISLAND-LG BLK AREA, TEXAS	427083034101	DEVON LOUISIANA CORPORATION	0.55277800	0.43558900	0.00000000	0.00000000	0.55277800	0.43558900	0.00000000	0.00000000
HIGH ISLAND BLOCK A-0271	547382001	HI A264 B008 OCS G15805 INTERC	HIGH ISLAND EAST & SOUTH AREA, TEXAS	427114082700	EL PASO PRODUCTION O&G COMPANY	0.50000000	0.41666700	0.00000000	0.00000000	0.50000000	0.41666700	0.00000000	0.00000000
HIGH ISLAND BLOCK A-0271	547381001	HI A264 0001 OCS G 15805	OFFSHORE FED , TEXAS	427114068800	EL PASO PRODUCTION O&G COMPANY	0.50000000	0.41666700	0.00000000	0.00000000	0.50000000	0.41666700	0.00000000	0.00000000
HIGH ISLAND BLOCK A-0442	541559013	HI A442 A001 OCS G11383	HIGH ISLAND SOUTH AREA, TEXAS	427094096101	DEVON LOUISIANA CORPORATION	0.45454500	0.36212100	0.00000000	0.00000000	0.45454500	0.36212100	0.00000000	0.00000000
HIGH ISLAND BLOCK A-0442	541559011	HI A442 A002 OCS G11383	HIGH ISLAND SOUTH AREA, TEXAS	427094097500	DEVON LOUISIANA CORPORATION	0.45454500	0.36212100	0.00000000	0.00000000	0.45454500	0.36212100	0.00000000	0.00000000
HIGH ISLAND BLOCK A-0442	541559010	HI A442 A002D OCS G11383	HIGH ISLAND SOUTH AREA, TEXAS	427094097500	DEVON LOUISIANA CORPORATION	0.45454500	0.36212100	0.00000000	0.00000000	0.45454500	0.36212100	0.00000000	0.00000000
HIGH ISLAND BLOCK A-0442	541559003	HI A442 A003 OCS G11383	HIGH ISLAND SOUTH AREA, TEXAS	427094098101	DEVON LOUISIANA CORPORATION	0.45454500	0.36212100	0.00000000	0.00000000	0.45454500	0.36212100	0.00000000	0.00000000
HIGH ISLAND BLOCK A-0442	541559004	HI A442 A004 OCS G11383	HIGH ISLAND SOUTH AREA, TEXAS	427094099000	DEVON LOUISIANA CORPORATION	0.45454500	0.36212100	0.00000000	0.00000000	0.45454500	0.36212100	0.00000000	0.00000000
HIGH ISLAND BLOCK A-0442	541559005	HI A442 A004D OCS G11383	HIGH ISLAND SOUTH AREA, TEXAS	427094099000	DEVON LOUISIANA CORPORATION	0.45454500	0.36212100	0.00000000	0.00000000	0.45454500	0.36212100	0.00000000	0.00000000
HIGH ISLAND BLOCK A-0442	541559012	HI A442 A005 OCS G11383	HIGH ISLAND SOUTH AREA, TEXAS	427094108100	DEVON LOUISIANA CORPORATION	0.45454500	0.36212100	0.00000000	0.00000000	0.45454500	0.36212100	0.00000000	0.00000000
HIGH ISLAND BLOCK A-0442	541559007	HI A442 A005D OCS G11383	HIGH ISLAND SOUTH AREA, TEXAS	427094108100	DEVON LOUISIANA CORPORATION	0.45454500	0.36212100	0.00000000	0.00000000	0.45454500	0.36212100	0.00000000	0.00000000
HIGH ISLAND BLOCK A-0442	541560004	HI A442 B001 OCS G11383	HIGH ISLAND SOUTH AREA, TEXAS	427094108900	DEVON LOUISIANA CORPORATION	0.45454500	0.36212100	0.00000000	0.00000000	0.45454500	0.36212100	0.00000000	0.00000000
HIGH ISLAND BLOCK A-0442	541560005	HI A442 B001D OCS G11383	HIGH ISLAND SOUTH AREA, TEXAS	427094108900	DEVON LOUISIANA CORPORATION	0.45454500	0.36212100	0.00000000	0.00000000	0.45454500	0.36212100	0.00000000	0.00000000
HIGH ISLAND BLOCK A-0561	530567001	HI A560 A001 OCS G14193	HIGH ISLAND SOUTH AREA, TEXAS	427094096900	DEVON LOUISIANA CORPORATION	0.77500000	0.63033300	0.00000000	0.00000000	0.77500000	0.63033300	0.00000000	0.00000000
HIGH ISLAND BLOCK A-0561	530568001	HI A560 A002 OCS G14193	HIGH ISLAND SOUTH AREA, TEXAS	427094097300	DEVON LOUISIANA CORPORATION	0.77500000	0.63033300	0.00000000	0.00000000	0.77500000	0.63033300	0.00000000	0.00000000
HIGH ISLAND BLOCK A-0561	530572001	HI A560 A002D OCS G14193	HIGH ISLAND SOUTH AREA, TEXAS	427094097300	DEVON LOUISIANA CORPORATION	0.77500000	0.63033300	0.00000000	0.00000000	0.77500000	0.63033300	0.00000000	0.00000000
HIGH ISLAND BLOCK A-0561	530569001	HI A560 A003 OCS G14193	HIGH ISLAND SOUTH AREA, TEXAS	427094100000	DEVON LOUISIANA CORPORATION	0.77500000	0.63033300	0.00000000	0.00000000	0.77500000	0.63033300	0.00000000	0.00000000

7 of 12

FIELD	WELL ID	WELL NAME	STATE/COUNTY	API	OPERATOR	BPO WI	BPO NRI	BPO RI	BPO ORI	APO WI	APO NRI	APO RI	APO ORI
HIGH ISLAND BLOCK A-0561	530571001	HI A560 A005 OCS G14193	HIGH ISLAND SOUTH AREA, TEXAS	427094103400	DEVON LOUISIANA CORPORATION	0.77500000	0.63033300	0.00000000	0.00000000	0.77500000	0.63033300	0.00000000	0.00000000
MAIN PASS BLOCK 0175	530427001	MP 175 A001 OCS G08753 (AKA#2)	MAIN PASS-SOUTH & EAST AREA, LOUISIANA	177244058500	DEVON LOUISIANA CORPORATION	0.42499900	0.34566500	0.00000000	0.00000000	0.42499900	0.34566500	0.00000000	0.00000000
MAIN PASS BLOCK 0175	530428001	MP 175 A002 OCS G08753 (AKA#3)	MAIN PASS-SOUTH & EAST AREA, LOUISIANA	177244058900	DEVON LOUISIANA CORPORATION	0.42499900	0.34566500	0.00000000	0.00000000	0.42499900	0.34566500	0.00000000	0.00000000
MAIN PASS BLOCK 0175	530431001	MP 175 A002D OCS G08753	MAIN PASS-SOUTH & EAST AREA, LOUISIANA	177244058900	DEVON LOUISIANA CORPORATION	0.42499900	0.34566500	0.00000000	0.00000000	0.42499900	0.34566500	0.00000000	0.00000000
MAIN PASS BLOCK 0175	530429001	MP 175 A003 OCS G08753 (AKA 4)	MAIN PASS-SOUTH & EAST AREA, LOUISIANA	177244060700	DEVON LOUISIANA CORPORATION	0.42499900	0.34566500	0.00000000	0.00000000	0.42499900	0.34566500	0.00000000	0.00000000
MAIN PASS BLOCK 0175	530430001	MP 175 A004 OCS G08753 (AKA#5)	MAIN PASS-SOUTH & EAST AREA, LOUISIANA	177244069600	DEVON LOUISIANA CORPORATION	0.42499900	0.34566500	0.00000000	0.00000000	0.42499900	0.34566500	0.00000000	0.00000000
MATAGORDA ISLAND BLOCK 0633	301033003	MI 634 #0F3 OCS G-7202	MATAGORDA, TEXAS	427034050800	GOM SHELF LLC	0.22069000	0.18390800	0.00000000	0.00000000	0.22069000	0.18390800	0.00000000	0.00000000
MATAGORDA ISLAND BLOCK 0633	301033004	MI 634 #1 OCS G-7202	MATAGORDA, TEXAS	427034034200	GOM SHELF LLC	0.22069000	0.18390800	0.00000000	0.00000000	0.22069000	0.18390800	0.00000000	0.00000000
MATAGORDA ISLAND BLOCK 0633	301033006	MI 634 #F-2A	MATAGORDA, TEXAS	427034038700	GOM SHELF LLC	0.22069000	0.18390800	0.00000000	0.00000000	0.22069000	0.18390800	0.00000000	0.00000000
MATAGORDA ISLAND BLOCK 0633	301033007	MI 634 A3 (OCS-G 07202) RC	MATAGORDA, TEXAS	427034047200	GOM SHELF LLC	0.22069000	0.18390800	0.00000000	0.00000000	0.22069000	0.18390800	0.00000000	0.00000000
MATAGORDA ISLAND BLOCK 0633	301033002	MI 634 C-2 OCS G-7202	MATAGORDA, TEXAS	427034051601	GOM SHELF LLC	0.22069000	0.18390800	0.00000000	0.00000000	0.22069000	0.18390800	0.00000000	0.00000000
MUSTANG ISLAND BLOCK 772	301198001	MUSTANG ISL 748 #1 (SL 81980)	NUECES, TEXAS	423553022300	MARITECH RESOURCES INC	0.19135400	0.14352000	0.00000000	0.00000000	0.19135400	0.14352000	0.00000000	0.00000000
MUSTANG ISLAND BLOCK 772	301198002	MUSTANG ISL 748 #2 (SL 81980)	NUECES, TEXAS	427023025700	MARITECH RESOURCES INC	0.19135400	0.14352000	0.00000000	0.00000000	0.19135400	0.14352000	0.00000000	0.00000000
MUSTANG ISLAND BLOCK 772	110373001	STATE LEASE 74581 #1 (MU 772)	NUECES, TEXAS	423553016600	MARITECH RESOURCES INC	0.12756900	0.09567700	0.00000000	0.00000000	0.12756900	0.09567700	0.00000000	0.00000000
SHIP SHOAL BLOCK 0047	530251001	SS 047 0001 ST LA 14832	SHIP SHOAL AREA, LOUISIANA	177112031400	DEVON LOUISIANA CORPORATION	1.00000000	0.69000000	0.00000000	0.00000000	1.00000000	0.69000000	0.00000000	0.00000000
SHIP SHOAL BLOCK 0047	530251002	SS 047 0002 ST LA 14832	SHIP SHOAL AREA, LOUISIANA	177112031900	DEVON LOUISIANA CORPORATION	1.00000000	0.69000000	0.00000000	0.00000000	1.00000000	0.69000000	0.00000000	0.00000000
SHIP SHOAL BLOCK 0047	530251007	SS 047 0003 ST LA 14832	SHIP SHOAL AREA, LOUISIANA	177112032501	DEVON LOUISIANA CORPORATION	1.00000000	0.69000000	0.00000000	0.00000000	1.00000000	0.69000000	0.00000000	0.00000000
SHIP SHOAL BLOCK 0047	530251008	SS 047 0004 ST LA 14832	SHIP SHOAL AREA, LOUISIANA	177112032900	DEVON LOUISIANA CORPORATION	1.00000000	0.69000000	0.00000000	0.00000000	1.00000000	0.69000000	0.00000000	0.00000000
SHIP SHOAL BLOCK 0065	530250001	SS 064 ST LA 14795 0001	SHIP SHOAL AREA, LOUISIANA	177112031100	DEVON LOUISIANA CORPORATION	1.00000000	0.69000000	0.00000000	0.00000000	1.00000000	0.69000000	0.00000000	0.00000000
SHIP SHOAL BLOCK 0291	301054002	SS 276 #A-7	SHIP SHOAL S, GULF OF MEXICO	177124043000	FOREST OIL CORPORATION	0.33333300	0.27611100	0.00000000	0.00000000	0.33333300	0.27611100	0.00000000	0.00000000
SHIP SHOAL BLOCK 0291	301054003	SS 276 1 OCS G-10785	SHIP SHOAL S, GULF OF MEXICO	177124057600	FOREST OIL CORPORATION	0.33333000	0.27611100	0.00000000	0.00000000	0.33333000	0.27611100	0.00000000	0.00000000
SHIP SHOAL BLOCK 0291	301054001	SS 276 A6 (OCS-G 10785)	SHIP SHOAL S, GULF OF MEXICO	177124042500	FOREST OIL CORP.	0.33333300	0.27611100	0.00000000	0.00000000	0.33333300	0.27611100	0.00000000	0.00000000
SHIP SHOAL BLOCK 0291	301055001	SS 277 A1 (OCS-G 9627)	SHIP SHOAL S, GULF OF MEXICO	177124036900	FOREST OIL CORP.	0.33333300	0.27611100	0.00000000	0.00000000	0.33333300	0.27611100	0.00000000	0.00000000
SHIP SHOAL BLOCK 0291	301055002	SS 277 A-2	SHIP SHOAL S, GULF OF MEXICO	177124036800	FOREST OIL CORPORATION	0.33333300	0.27611100	0.00000000	0.00000000	0.33333300	0.27611100	0.00000000	0.00000000
SHIP SHOAL BLOCK 0291	301055003	SS 277 A-3	SHIP SHOAL S, GULF OF MEXICO	177124037200	FOREST OIL CORPORATION	0.33333300	0.27611100	0.00000000	0.00000000	0.33333300	0.27611100	0.00000000	0.00000000
SHIP SHOAL BLOCK 0291	301055004	SS 277 A-4	SHIP SHOAL S, GULF OF MEXICO	177124037100	FOREST OIL CORPORATION	0.33333300	0.27611100	0.00000000	0.00000000	0.33333300	0.27611100	0.00000000	0.00000000
SHIP SHOAL BLOCK 0291	301055006	SS 277 A-8ST (OCSG 9627)	SHIP SHOAL S, GULF OF MEXICO	177124057300	FOREST OIL CORP.	0.00000000	0.00000000	0.00000000	0.00000000	0.33333300	0.27611100	0.00000000	0.00000000

8 of 12

FIELD	WELL ID	WELL NAME	STATE/COUNTY	API	OPERATOR	BPO WI	BPO NRI	BPO RI	BPO ORI	APO WI	APO NRI	APO RI	APO ORI
SHIP SHOAL BLOCK 0299	301095020	SS 299 A-11	SHIP SHOAL S, GULF OF MEXICO	177124063600	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.83333300	0.00000000	0.00000000	1.00000000	0.83333300	0.00000000	0.00000000
SHIP SHOAL BLOCK 0299	301095001	SS 299 A2 OCS G-7759	SHIP SHOAL S, GULF OF MEXICO	177124037300	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.83333300	0.00000000	0.00000000	1.00000000	0.83333300	0.00000000	0.00000000
SHIP SHOAL BLOCK 0299	301095002	SS 299 A3 OCS G-7759	SHIP SHOAL S, GULF OF MEXICO	177124037800	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.83333300	0.00000000	0.00000000	1.00000000	0.83333300	0.00000000	0.00000000
SHIP SHOAL BLOCK 0299	301095008	SS 299 A-4	SHIP SHOAL S, GULF OF MEXICO	177124038000	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.83333300	0.00000000	0.00000000	1.00000000	0.83333300	0.00000000	0.00000000
SHIP SHOAL BLOCK 0299	301095003	SS 299 A4D OCS G-7759	SHIP SHOAL S, GULF OF MEXICO	177124038000	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.83333300	0.00000000	0.00000000	1.00000000	0.83333300	0.00000000	0.00000000
SHIP SHOAL BLOCK 0299	301095004	SS 299 A5 OCS G-7759	SHIP SHOAL S, GULF OF MEXICO	177124037900	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.83333300	0.00000000	0.00000000	1.00000000	0.83333300	0.00000000	0.00000000
SHIP SHOAL BLOCK 0299	301095009	SS 299 A-6 P&A	SHIP SHOAL S, GULF OF MEXICO	177124042900	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.83333300	0.00000000	0.00000000	1.00000000	0.83333300	0.00000000	0.00000000
SHIP SHOAL BLOCK 0299	301095005	SS 299 A7 OCS G-7759	SHIP SHOAL S, GULF OF MEXICO	177124043200	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.83333300	0.00000000	0.00000000	1.00000000	0.83333300	0.00000000	0.00000000
SHIP SHOAL BLOCK 0299	301095006	SS 299 A8 OCS G-7759	SHIP SHOAL S, GULF OF MEXICO	177124043500	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.83333300	0.00000000	0.00000000	1.00000000	0.83333300	0.00000000	0.00000000
SHIP SHOAL BLOCK 0299	301095010	SS 299 A-9	SHIP SHOAL S, GULF OF MEXICO	177124043600	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.83333300	0.00000000	0.00000000	1.00000000	0.83333300	0.00000000	0.00000000
SHIP SHOAL BLOCK 0299	301091001	SS 300 B-1 OCS-G 7760	SHIP SHOAL S, GULF OF MEXICO	177124044100	KERR MCGEE CORPORATION	0.13333300	0.11111100	0.00000000	0.00000000	0.13333300	0.11111100	0.00000000	0.00000000
SHIP SHOAL BLOCK 0299	301091002	SS 300 B-2 OCS-G 7760	SHIP SHOAL S, GULF OF MEXICO	177124044800	KERR MCGEE CORPORATION	0.13333300	0.11111100	0.00000000	0.00000000	0.13333300	0.11111100	0.00000000	0.00000000
SHIP SHOAL BLOCK 0299	301091003	SS 300 B-3 OCS-G 7760	SHIP SHOAL S, GULF OF MEXICO	177124045600	KERR MCGEE CORPORATION	0.13333300	0.11111100	0.00000000	0.00000000	0.13333300	0.11111100	0.00000000	0.00000000
SHIP SHOAL BLOCK 0299	301091004	SS 300 B-4 OCS-G 7760	SHIP SHOAL S, GULF OF MEXICO	177124045700	KERR MCGEE CORPORATION	0.13333300	0.11111100	0.00000000	0.00000000	0.13333300	0.11111100	0.00000000	0.00000000
SHIP SHOAL BLOCK 0299	301091005	SS 300 B-5 OCS-G 7760	SHIP SHOAL S, GULF OF MEXICO	177124041600	KERR MCGEE CORPORATION	0.13333300	0.11111100	0.00000000	0.00000000	0.13333300	0.11111100	0.00000000	0.00000000
SHIP SHOAL BLOCK 0299	301095007	SS 299 A10 0CSG-7759	WEST CAMERON SO, GULF OF MEXICO	177124054301	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.83333300	0.00000000	0.00000000	1.00000000	0.83333300	0.00000000	0.00000000
SOUTH MARSH ISLAND 128 S ADD.	300072010	SM 125 A-10ST (OCSG2587)	SO MARSH ISLN S, GULF OF MEXICO	177084019301	DEVON ENERGY PRODUCTION CO., LP	0.17346600	0.14455500	0.00000000	0.00000000	0.17346600	0.14455500	0.00000000	0.00000000
SOUTH MARSH ISLAND 128 S ADD.	300073001	SM 125 D-1B (OCSG2882)	SO MARSH ISLN S, GULF OF MEXICO	177084064200	DEVON ENERGY PRODUCTION CO., LP	0.17346600	0.14455500	0.00000000	0.00000000	0.17346600	0.14455500	0.00000000	0.00000000
SOUTH MARSH ISLAND 128 S ADD.	300073002	SM 125 D-2 (OCSG2882)	SO MARSH ISLN S, GULF OF MEXICO	177084064800	DEVON ENERGY PRODUCTION CO., LP	0.17346600	0.14455500	0.00000000	0.00000000	0.17346600	0.14455500	0.00000000	0.00000000
SOUTH MARSH ISLAND 128 S ADD.	300073007	SM 125 D-3	SO MARSH ISLN S, GULF OF MEXICO	177084074700	DEVON ENERGY PRODUCTION CO., LP	0.17346600	0.14455500	0.00000000	0.00000000	0.17346600	0.14455500	0.00000000	0.00000000
SOUTH MARSH ISLAND 128 S ADD.	300073004	SM 125 D-4A ST (OCSG2882)	SO MARSH ISLN S, GULF OF MEXICO	177084074800	DEVON ENERGY PRODUCTION CO., LP	0.84013300	0.70011000	0.00000000	0.00000000	0.17346600	0.14455500	0.00000000	0.00000000
SOUTH MARSH ISLAND BLOCK 0048	300175077	SM 48 B-6E (OCS-G 0786)	S MARSH ISLAND , GULF OF MEXICO	177070035800	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.82833300	0.00000000	0.00000000	1.00000000	0.82833300	0.00000000	0.00000000
SOUTH MARSH ISLAND BLOCK 0048	301076009	SM 36 A003 (OCS-G 7699)"STRAY"	SO MARSH ISLAND, GULF OF MEXICO	177074062400	WALTER OIL & GAS CORP	0.07222000	0.05796100	0.00000000	0.00000000	0.07222000	0.05796100	0.00000000	0.00000000
SOUTH MARSH ISLAND BLOCK 0048	301076008	SM 36 A004(OCS-G 7699) LN SAND	SO MARSH ISLAND, GULF OF MEXICO	177074062700	WALTER OIL & GAS CORP	0.07222000	0.05796100	0.00000000	0.00000000	0.07222000	0.05796100	0.00000000	0.00000000
SOUTH MARSH ISLAND BLOCK 0048	300178010	SM 48 5	SO MARSH ISLAND, GULF OF MEXICO	177074052600	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.82833300	0.00000000	0.00000000	1.00000000	0.82833300	0.00000000	0.00000000
SOUTH MARSH ISLAND BLOCK 0048	300178006	SM 48 6 (OCSG0786)	SO MARSH ISLAND, GULF OF MEXICO	177074054100	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.82833300	0.00000000	0.00000000	1.00000000	0.82833300	0.00000000	0.00000000
SOUTH MARSH ISLAND BLOCK 0048	300178008	SM 48 8 (OCSG0786)	SO MARSH ISLAND, GULF OF MEXICO	177074076500	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.82833300	0.00000000	0.00000000	1.00000000	0.82833300	0.00000000	0.00000000
SOUTH MARSH ISLAND BLOCK 0048	300175054	SM 48 B-5C (OCSG0786)	SO MARSH ISLAND, GULF OF MEXICO	177070030300	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.82833300	0.00000000	0.00000000	1.00000000	0.82833300	0.00000000	0.00000000
SOUTH MARSH ISLAND BLOCK 0048	300175075	SM 48 B-6C (OCSG0756)	SO MARSH ISLAND, GULF OF MEXICO	177070035800	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.82833300	0.00000000	0.00000000	1.00000000	0.82833300	0.00000000	0.00000000

9 of 12

FIELD	WELL ID	WELL NAME	STATE/COUNTY	API	OPERATOR	BPO WI	BPO NRI	BPO RI	BPO ORI	APO WI	APO NRI	APO RI	APO ORI
SOUTH MARSH ISLAND BLOCK 0048	300175007	SM 48 B-7A NC REVENUE 10071123	SO MARSH ISLAND, GULF OF MEXICO	314529551530	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.82833300	0.00000000	0.00000000	1.00000000	0.82833300	0.00000000	0.00000000
SOUTH MARSH ISLAND BLOCK 0048	300175072	SM 48 B-7B (OCSG0786)	SO MARSH ISLAND, GULF OF MEXICO	177070037800	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.82833300	0.00000000	0.00000000	1.00000000	0.82833300	0.00000000	0.00000000
SOUTH MARSH ISLAND BLOCK 0048	300175008	SM 48 B-8 (OCSG0786)	SO MARSH ISLAND, GULF OF MEXICO	177072001800	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.82833300	0.00000000	0.00000000	1.00000000	0.82833300	0.00000000	0.00000000
SOUTH MARSH ISLAND BLOCK 0048	300176011	SM 48 C-1 (OCSG0786)	SO MARSH ISLAND, GULF OF MEXICO	177070037600	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.82833300	0.00000000	0.00000000	1.00000000	0.82833300	0.00000000	0.00000000
SOUTH MARSH ISLAND BLOCK 0048	300176012	SM 48 C-1D (OCSG0786)	SO MARSH ISLAND, GULF OF MEXICO	177070037600	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.82833300	0.00000000	0.00000000	1.00000000	0.82833300	0.00000000	0.00000000
SOUTH MARSH ISLAND BLOCK 0048	300176021	SM 48 C-2 (OCSG0786)	SO MARSH ISLAND, GULF OF MEXICO	177070040900	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.82833300	0.00000000	0.00000000	1.00000000	0.82833300	0.00000000	0.00000000
SOUTH MARSH ISLAND BLOCK 0048	300176022	SM 48 C-2D (OCSG0786)	SO MARSH ISLAND, GULF OF MEXICO	177070040900	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.82833300	0.00000000	0.00000000	1.00000000	0.82833300	0.00000000	0.00000000
SOUTH MARSH ISLAND BLOCK 0048	300176031	SM 48 C-3 (OCSG0786)	SO MARSH ISLAND, GULF OF MEXICO	177070041000	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.82833300	0.00000000	0.00000000	1.00000000	0.82833300	0.00000000	0.00000000
SOUTH MARSH ISLAND BLOCK 0048	300176032	SM 48 C-3D (OCSG0786)	SO MARSH ISLAND, GULF OF MEXICO	177070041000	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.82833300	0.00000000	0.00000000	1.00000000	0.82833300	0.00000000	0.00000000
SOUTH MARSH ISLAND BLOCK 0048	300176041	SM 48 C-4 (OCSG0786)	SO MARSH ISLAND, GULF OF MEXICO	177074002300	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.82833300	0.00000000	0.00000000	1.00000000	0.82833300	0.00000000	0.00000000
SOUTH MARSH ISLAND BLOCK 0048	300176042	SM 48 C-4D (OCSG0786)	SO MARSH ISLAND, GULF OF MEXICO	177074002300	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.82833300	0.00000000	0.00000000	1.00000000	0.82833300	0.00000000	0.00000000
SOUTH MARSH ISLAND BLOCK 0048	300176051	SM 48 C-5 (OCSG0786)	SO MARSH ISLAND, GULF OF MEXICO	177074003400	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.82833300	0.00000000	0.00000000	1.00000000	0.82833300	0.00000000	0.00000000
SOUTH MARSH ISLAND BLOCK 0048	300176052	SM 48 C-5D (OCSG0786)	SO MARSH ISLAND, GULF OF MEXICO	177074003400	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.82833300	0.00000000	0.00000000	1.00000000	0.82833300	0.00000000	0.00000000
SOUTH MARSH ISLAND BLOCK 0048	300176060	SM 48 C-6 (OCSG0786)	SO MARSH ISLAND, GULF OF MEXICO	177074018700	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.82833300	0.00000000	0.00000000	1.00000000	0.82833300	0.00000000	0.00000000
SOUTH MARSH ISLAND BLOCK 0048	300176071	SM 48 C-7 (OCSG0786)	SO MARSH ISLAND, GULF OF MEXICO	177074018800	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.82833300	0.00000000	0.00000000	1.00000000	0.82833300	0.00000000	0.00000000
SOUTH MARSH ISLAND BLOCK 0048	300176072	SM 48 C-7D (OCSG0786)	SO MARSH ISLAND, GULF OF MEXICO	177074018800	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.82833300	0.00000000	0.00000000	1.00000000	0.82833300	0.00000000	0.00000000
SOUTH MARSH ISLAND BLOCK 0048	300176008	SM 48 C-8 (OCSG0786)	SO MARSH ISLAND, GULF OF MEXICO	177074023900	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.82833300	0.00000000	0.00000000	1.00000000	0.82833300	0.00000000	0.00000000
SOUTH MARSH ISLAND BLOCK 0048	300177011	SM 48 E-1 (OCSG0786)	SO MARSH ISLAND, GULF OF MEXICO	177072001400	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.82833300	0.00000000	0.00000000	1.00000000	0.82833300	0.00000000	0.00000000
SOUTH MARSH ISLAND BLOCK 0048	300177012	SM 48 E-1D (OCSG0786)	SO MARSH ISLAND, GULF OF MEXICO	177072001400	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.82833300	0.00000000	0.00000000	1.00000000	0.82833300	0.00000000	0.00000000
SOUTH MARSH ISLAND BLOCK 0048	300177053	SM 48 E-2	SO MARSH ISLAND, GULF OF MEXICO	177072002800	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.82833300	0.00000000	0.00000000	1.00000000	0.82833300	0.00000000	0.00000000
SOUTH MARSH ISLAND BLOCK 0048	300177003	SM 48 E-3 (OCSG0786)	SO MARSH ISLAND, GULF OF MEXICO	177072003300	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.82833300	0.00000000	0.00000000	1.00000000	0.82833300	0.00000000	0.00000000
SOUTH MARSH ISLAND BLOCK 0048	300177004	SM 48 E-4B (OCSG0786)	SO MARSH ISLAND, GULF OF MEXICO	177072004000	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.82833300	0.00000000	0.00000000	1.00000000	0.82833300	0.00000000	0.00000000
SOUTH MARSH ISLAND BLOCK 0048	300177051	SM 48 E-5A (OCSG0786)	SO MARSH ISLAND, GULF OF MEXICO	177072004800	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.82833300	0.00000000	0.00000000	1.00000000	0.82833300	0.00000000	0.00000000
SOUTH MARSH ISLAND BLOCK 0048	300177052	SM 48 E-5D (OCSG0786)	SO MARSH ISLAND, GULF OF MEXICO	177072004800	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.82833300	0.00000000	0.00000000	1.00000000	0.82833300	0.00000000	0.00000000
SOUTH MARSH ISLAND BLOCK 0048	300177006	SM 48 E-6ST2 (OCSG0786)	SO MARSH ISLAND, GULF OF MEXICO	177074066702	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.82833300	0.00000000	0.00000000	1.00000000	0.82833300	0.00000000	0.00000000
SOUTH MARSH ISLAND BLOCK 0048	300179001	SM 48 F-1 (OCSG0786)	SO MARSH ISLAND, GULF OF MEXICO	177074073900	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.82833300	0.00000000	0.00000000	1.00000000	0.82833300	0.00000000	0.00000000
SOUTH MARSH ISLAND BLOCK 0048	300179002	SM 48 F-2 (OCSG0786)	SO MARSH ISLAND, GULF OF MEXICO	177074076800	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.82833300	0.00000000	0.00000000	1.00000000	0.82833300	0.00000000	0.00000000
SOUTH MARSH ISLAND BLOCK 0048	300179034	SM 48 F3-B (OCSG 0786)	SO MARSH ISLAND, GULF OF MEXICO	177074077200	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.82833300	0.00000000	0.00000000	1.00000000	0.82833300	0.00000000	0.00000000
SOUTH MARSH ISLAND BLOCK 0048	300179010	SM 48 F-5F (OCS-G 0786)	SO MARSH ISLAND, GULF OF MEXICO	177074077500	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.82833300	0.00000000	0.00000000	1.00000000	0.82833300	0.00000000	0.00000000

10 of 12

FIELD	WELL ID	WELL NAME	STATE/COUNTY	API	OPERATOR	BPO WI	BPO NRI	BPO RI	BPO ORI	APO WI	APO NRI	APO RI	APO ORI
SOUTH MARSH ISLAND BLOCK 0048	301076001	SMI 36 #1 (OCS-G7699)	SO MARSH ISLAND, GULF OF MEXICO	177074057600	WALTER OIL & GAS CORP	0.07222200	0.05795800	0.00000000	0.00000000	0.07222200	0.05795800	0.00000000	0.00000000
SOUTH MARSH ISLAND BLOCK 0048	301076005	SMI 36 #2	SO MARSH ISLAND, GULF OF MEXICO	177074066900	WALTER OIL & GAS CORP	0.07222200	0.05795800	0.00000000	0.00000000	0.07222200	0.05795800	0.00000000	0.00000000
SOUTH MARSH ISLAND BLOCK 0048	301076007	SMI 36 B-4ST1 {RECOMP-LE SAND}	SO MARSH ISLAND, GULF OF MEXICO	177074080601	WALTER OIL & GAS CORP	0.07222200	0.05795800	0.00000000	0.00000000	0.07222200	0.05795800	0.00000000	0.00000000
SOUTH MARSH ISLAND BLOCK 0048	301079003	SMI 37 #B1 (OCSG7700)	SO MARSH ISLAND, GULF OF MEXICO	177074062800	WALTER OIL & GAS CORP	0.07222200	0.05795800	0.00000000	0.00000000	0.07222200	0.05795800	0.00000000	0.00000000
SOUTH MARSH ISLAND BLOCK 0048	301079004	SMI 37 #B-2B	SO MARSH ISLAND, GULF OF MEXICO	177074063300	WALTER OIL & GAS CORP	0.07222200	0.05795800	0.00000000	0.00000000	0.07222200	0.05795800	0.00000000	0.00000000
SOUTH MARSH ISLAND BLOCK 0048	301079005	SMI 37 #B3 (OCS-G7700)	SO MARSH ISLAND, GULF OF MEXICO	177074063500	WALTER OIL & GAS CORP	0.07222200	0.05795800	0.00000000	0.00000000	0.07222200	0.05795800	0.00000000	0.00000000
SOUTH MARSH ISLAND BLOCK 0048	301079002	SMI 37 B-2 ST3	SO MARSH ISLAND, GULF OF MEXICO	177074063303	WALTER OIL & GAS CORP	0.07222200	0.05795800	0.00000000	0.00000000	0.07222200	0.05795800	0.00000000	0.00000000
SOUTH MARSH ISLAND BLOCK 0048		SMI 37 #A2 (OCS-G7700)	SO MARSH ISLAND, GULF OF MEXICO	177074057900	WALTER OIL & GAS CORP	0.07222200	0.05795800	0.00000000	0.00000000	0.07222200	0.05795800	0.00000000	0.00000000
SOUTH TIMBALIER BLOCK 0219	532458001	ST 211 B002 OCS G16435 AKA0003	SOUTH TIMBALIER-SOUTH AREA, LOUISIANA	177164025700	SPINNAKER EXPLORATION CO LLC	0.22556200	0.16534300	0.00000000	0.00000000	0.22556200	0.16534300	0.00000000	0.00000000
SOUTH TIMBALIER BLOCK 0219	532457001	ST 219 B001 OCS G19831 AKA0001	SOUTH TIMBALIER-SOUTH AREA, LOUISIANA	177164025600	SPINNAKER EXPLORATION CO LLC	0.25000000	0.20833300	0.00000000	0.00000000	0.25000000	0.20833300	0.00000000	0.00000000
SOUTH TIMBALIER BLOCK 0228	301231002	ST 231 1	SO TIMBALIAR S, GULF OF MEXICO	177164019900	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.78333300	0.00000000	0.00000000	1.00000000	0.78333300	0.00000000	0.00000000
SOUTH TIMBALIER BLOCK 0228	301231003	ST 231 2	SO TIMBALIAR S, GULF OF MEXICO	177164020000	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.78333300	0.00000000	0.00000000	1.00000000	0.78333300	0.00000000	0.00000000
SOUTH TIMBALIER BLOCK 0228	301231001	ST 231 4	SO TIMBALIAR S, GULF OF MEXICO	177164022700	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.78333300	0.00000000	0.00000000	1.00000000	0.78333300	0.00000000	0.00000000
SOUTH TIMBALIER BLOCK 0277	530457001	ST 277 A002 OCS G10853 AKA 3	SOUTH TIMBALIER-SOUTH AREA, LOUISIANA	177164019600	DEVON LOUISIANA CORPORATION	0.60625000	0.48012700	0.00000000	0.00000000	0.60625000	0.48012700	0.00000000	0.00000000
VERMILION BLOCK 0071	530453001	SM 233 0003 OCS G11929	OFFSHORE FED , LOUISIANA	177074072200	MARITECH RESOURCES INC	0.25000000	0.19911500	0.00000000	0.00000000	0.25000000	0.19911500	0.00000000	0.00000000
VERMILION BLOCK 0076	301015002	VR 57 1	VERMILION, GULF OF MEXICO	177054038500	VINTAGE PETROLEUM, INC.	0.75000000	0.62500000	0.00000000	0.00000000	0.75000000	0.62500000	0.00000000	0.00000000
VERMILION BLOCK 0076	301015005	VR 57 5	VERMILION, GULF OF MEXICO	177054041901	VINTAGE PETROLEUM, INC.	0.75000000	0.62500000	0.00000000	0.00000000	0.75000000	0.62500000	0.00000000	0.00000000
VERMILION BLOCK 0076	301015001	VR 57 A6	VERMILION, GULF OF MEXICO	177054099200	VINTAGE PETROLEUM INC	0.75000000	0.62500000	0.00000000	0.00000000	0.75000000	0.62500000	0.00000000	0.00000000
VERMILION BLOCK 0112	541578001	VR 112 0015D OCS G10659	VERMILION (OFFSHORE), LOUISIANA	177054091400	APACHE CORPORATION	0.27500000	0.19685400	0.00000000	0.00000000	0.27500000	0.19685400	0.00000000	0.00000000
VERMILION BLOCK 0112	541574001	VR 131 0015L OCS 00775	VERMILION (OFFSHORE), LOUISIANA	177054091400	APACHE CORPORATION	0.27500000	0.19685400	0.00000000	0.00000000	0.27500000	0.19685400	0.00000000	0.00000000
VERMILION BLOCK 0115	547462003	VR 114 A001 OCS G17895	OFFSHORE FED , LOUISIANA	177054109200	KERR MCGEE OIL & GAS CORP	0.50000000	0.41666700	0.00000000	0.00000000	0.50000000	0.41666700	0.00000000	0.00000000
VERMILION BLOCK 0273	301007001	VR 271 A1	VERMILION SOUTH, GULF OF MEXICO	177064051500	EL PASO PRODUCTION COMPANY	0.25000000	0.20833300	0.00000000	0.00000000	0.25000000	0.20833300	0.00000000	0.00000000
VERMILION BLOCK 0273		VR 271 #2	VERMILION SOUTH, GULF OF MEXICO	177064053000	EL PASO PRODUCTION COMPANY	0.25000000	0.20833300	0.00000000	0.00000000	0.25000000	0.20833300	0.00000000	0.00000000
VIOSCA KNOLL BLOCK 0213	12545010	VK 213 NO.1 (OCS-G 21720)	GOM OFFSHORE, GULF OF MEXICO	608164042000	DEVON ENERGY PRODUCTION CO., LP	1.00000000	0.75000000	0.00000000	0.00000000	0.70000000	0.58333300	0.00000000	0.00000000
VIOSCA KNOLL BLOCK 738 (MARIA)	301177001	VK 738 #1	VIOSCA KNOLL, GULF OF MEXICO	608164036600	NEWFIELD EXPLORATION COMPANY	0.29000000	0.20541700	0.00000000	0.00000000	0.29000000	0.19816700	0.00000000	0.00000000
VIOSCA KNOLL BLOCK 738 (MARIA)	301177002	VK 738 #2	VIOSCA KNOLL, GULF OF MEXICO	608164038500	NEWFIELD EXPLORATION COMPANY	0.29000000	0.20541700	0.00000000	0.00000000	0.29000000	0.19816700	0.00000000	0.00000000
WEST CAMERON BLOCK 0205	301152003	WC 206 #3 OCS-G-3496	WEST CAMERON, GULF OF MEXICO	177004108000	DEVON ENERGY PRODUCTION CO., LP	0.21000000	0.16712500	0.00000000	0.00000000	0.21000000	0.16712500	0.00000000	0.00000000

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FIELD	WELL ID	WELL NAME	STATE/COUNTY	API	OPERATOR	BPO WI	BPO NRI	BPO RI	BPO ORI	APO WI	APO NRI	APO RI	APO ORI
WEST CAMERON BLOCK 0205	301152001	WC 206 1 OCS-G-3496	WEST CAMERON, GULF OF MEXICO	177004095700	DEVON ENERGY PRODUCTION CO., LP	0.21000000	0.16712500	0.00000000	0.00000000	0.21000000	0.16712500	0.00000000	0.00000000
WEST CAMERON BLOCK 0205	301152006	WC 206 NO. 4 (OCS-G 3496) S02	WEST CAMERON, GULF OF MEXICO	177004109500	DEVON ENERGY PRODUCTION CO., LP	0.21000000	0.16712500	0.00000000	0.00000000	0.21000000	0.16712500	0.00000000	0.00000000
WEST CAMERON BLOCK 0504	530500001	WC 528 A001 OCS G16202 (AKA #1	WEST CAMERON-SOUTH AREA, LOUISIANA	177024116501	DEVON LOUISIANA CORPORATION	0.36110800	0.29370100	0.00000000	0.00000000	0.36110800	0.29370100	0.00000000	0.00000000
WEST CAMERON BLOCK 0504	530503001	WC 528 A001D OCS G16202	WEST CAMERON-SOUTH AREA, LOUISIANA	177024116501	DEVON LOUISIANA CORPORATION	0.36110800	0.29370100	0.00000000	0.00000000	0.36110800	0.29370100	0.00000000	0.00000000
WEST CAMERON BLOCK 0504	530501001	WC 528 A002 OCS G16202	WEST CAMERON-SOUTH AREA, LOUISIANA	177024119000	DEVON LOUISIANA CORPORATION	0.36110800	0.29370100	0.00000000	0.00000000	0.36110800	0.29370100	0.00000000	0.00000000
WEST CAMERON BLOCK 0504	530502001	WC 528 A003 OCS G16202	WEST CAMERON-SOUTH AREA, LOUISIANA	177024119901	DEVON LOUISIANA CORPORATION	0.36110800	0.29370100	0.00000000	0.00000000	0.36110800	0.29370100	0.00000000	0.00000000
WEST CAMERON BLOCK 0540	530516003	WC 541 A001 OCS G14341	WEST CAMERON SO, GULF OF MEXICO	177024108800	DEVON LOUISIANA CORPORATION	0.88750000	0.71074400	0.00000000	0.00000000	0.77500000	0.62065000	0.00000000	0.00000000
WEST CAMERON BLOCK 0540	530517001	WC 541 A002 OCS G14341	WEST CAMERON-SOUTH AREA, LOUISIANA	177024109200	DEVON LOUISIANA CORPORATION	0.77500000	0.62064600	0.00000000	0.00000000	0.77500000	0.62064600	0.00000000	0.00000000
WEST CAMERON BLOCK 0540	530519001	WC 541 A003 OCS G14341	WEST CAMERON-SOUTH AREA, LOUISIANA	177024112600	DEVON LOUISIANA CORPORATION	0.77500000	0.63033300	0.00000000	0.00000000	0.77500000	0.63033300	0.00000000	0.00000000
WEST CAMERON BLOCK 0540	530518001	WC 541 A004 OCS G14341	WEST CAMERON-SOUTH AREA, LOUISIANA	177024112200	DEVON LOUISIANA CORPORATION	0.77500000	0.63033300	0.00000000	0.00000000	0.77500000	0.63033300	0.00000000	0.00000000
WEST CAMERON BLOCK 0540	530520001	WC 541 A005 OCS G14341	WEST CAMERON-SOUTH AREA, LOUISIANA	177024121900	DEVON LOUISIANA CORPORATION	0.77500000	0.63033300	0.00000000	0.00000000	0.77500000	0.63033300	0.00000000	0.00000000

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ATTACHED TO AND MADE A PART OF THAT CERTAIN PURCHASE AND SALE AGREEMENT DATED JULY 22, 2005, BY AND BETWEEN DEVON ENERGY PRODUCTION COMPANY, L.P. AND DEVON LOUISIANA CORPORATION AND DEVON ENERGY PETROLEUM PIPELINE COMPANY AS SELLER, AND MARITECH RESOURCES, INC., AS BUYER

EXHIBIT "A-2"

HIGH ISLAND PIPELINE SYSTEM (portion)

Buyer is purchasing hereunder, as part of the Properties, Seller's interest in certain segments of the High Island Pipeline System (HIPS). The segments being conveyed herewith are more particularly described as follows:

Segment III – Devon’s interest in 108,610 linear feet of ten inch outside diameter (10” O.D.) pipeline beginning at a subsea connection in HI A-546 connecting to the “A” Platform in High Island (HI) A-474, identified in the records of the Minerals Management Service (MMS) as Segment 4886.

Segment III-2 – Devon’s interest in 12,144 linear feet of 6” O.D. pipeline beginning at the “A” Platform in HI A-340 connecting to a subsea connection in HI A-340, identified in the records of the MMS as Segment 4878.

Segment III-3 – Devon’s interest in 92,347 linear feet of 6” O.D. pipeline beginning at a subsea connection in HI A-340 to a subsea connection in HI A-546, identified in the records of the MMS as Segment 4882.

Segment III-18 – Devon’s interest in 15,975 linear feet of 6” O.D. pipeline beginning at the “A” Platform in HI A-442 connecting to a subsea connection in HI A-442, identified in the records of the MMS as Segment 10773.

EXHIBIT A-3

ATTACHED TO AND MADE A PART OF THAT CERTAIN PURCHASE AND SALE AGREEMENT DATED JULY 22, 2005 BY AND BETWEEN DEVON LOUISIANA CORPORATION AND DEVON ENERGY PRODUCTION COMPANY, LP, ASSIGNOR, AND MARITECH RESOURCES, INC., ASSIGNEE

Brazos Block 397 "A" Platform

The Brazos Block 397 A Platform (located on Brazos Block 397 at a surface location of 5,522' FSL and 2,624' FWL and the facilities, fixtures, materials, personal property and equipment and pipelines located on and appurtenant thereto.

Brazos Block 397 "B" Platform

The Brazos Block 397 B Platform (located on Brazos Block 397 at a surface location of 2,364' FNL and 1,508' FEL and the facilities, fixtures, materials, personal property and equipment and pipelines located on and appurtenant thereto.

Brazos Block 431 "A" Platform

The Brazos Block 431 A Platform (located on Brazos Block 397 at a surface location of 709' FNL and 2,730' FWL and the facilities, fixtures, materials, personal property and equipment and pipelines located on and appurtenant thereto.

Eugene Island Block 33 No. 3 Platform

The Eugene Island Block 33 No. 3 Platform located on Eugene Island Block 33 at a surface location of 1,481' FNL and 706' FWL and the facilities, fixtures, materials, personal property and equipment and pipelines located on and appurtenant thereto.

Eugene Island Block 33 No. 5 Platform

The Eugene Island Block 33 No. 5 Platform located on Eugene Island Block 33 at a surface location of 3,800' FNL and 1,250' FWL and the facilities, fixtures, materials, personal property and equipment and pipelines located on and appurtenant thereto.

Eugene Island Block 33 No. 1 Platform

The Eugene Island Block 33 No. 1 Platform located on Eugene Island Block 33 at a surface location of 4,539' FNL and 2,142' FWL and the facilities, fixtures, materials, personal property and equipment and pipelines located on and appurtenant thereto.

Eugene Island Block 33 No. 2 Platform

The Eugene Island Block 33 No. 2 Platform located on Eugene Island Block 33 at a surface location of 500' FNL and 1,000' FWL and the facilities, fixtures, materials, personal property and equipment and pipelines located on and appurtenant thereto.

Eugene Island Block 33 "A" Platform

The Eugene Island Block 33 A Platform located on Eugene Island Block 33 at a surface location of 3,486' FSL and 3,063' FEL and the facilities, fixtures, materials, personal property and equipment and pipelines located on and appurtenant thereto.

Grand Isle Block 68 "A" Platform

The Grand Isle Block 68 A Platform located on Grand Isle Block 68 at a surface location of 84' FSL and 2,200' FEL and the facilities, fixtures, materials, personal property and equipment and pipelines located on and appurtenant thereto.

Matagorda Island State Tract 195 Production Facilitiy

The offshore production facility located approximately 800’ West of the East Line and 1200’ North of the South Line of State Tract 195, Matagorda Bay, approximately 8.7 miles SW from Palacios, Texas.

West Cameron 524 A Platform

The West Cameron Block 524 A Platform located on West Cameron Block 524 with a surface location of 279' FSL and 5,202' FWL and the facilities, fixtures, materials, personal property and equipment and pipelines located on and appurtenant thereto.

EXHIBIT B

ASSIGNMENT AND BILL OF SALE

This Assignment and Bill of Sale (this “Assignment”) is from Devon Energy Production Company, L.P., an Oklahoma limited partnership (“DEPC”), and Devon Louisiana Corporation, a Louisiana corporation (“DLC”), and Devon Energy Petroleum Pipeline Company, a Delaware Corporation (“DEPPC”) (DLC and DEPC and DEPPC are collectively referred to as “Assignor” and individually as an “Assignor”), whose collective address is _________________________, to ____________________, a __________________, (“Assignee”), whose address is ________________________, and is effective as of 7:00 A.M., Central Standard Time, on January 1, 2005 (the “Effective Time”).

ARTICLE 1

ASSIGNMENT OF ASSETS

Section 1.1 Assignment. Assignor, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, hereby bargains, assigns, and transfers unto Assignee, all of Assignor’s right, title and interest in and to the following,(individually, an “Asset,” and collectively, the “Assets”), excepting the Excluded Assets, as hereinafter defined::

(a) the oil and gas leases more particularly described in Exhibit A, subject to any depth restrictions described in Exhibit A (collectively, the “Leases”), together with any and all other rights, titles, and interests of Assignor in and to (i) the leasehold estates created thereby, subject to any depth restrictions described in Exhibit A and to the terms, conditions, covenants, and obligations set forth in the Leases and/or Exhibit A and (ii) the lands covered by the Leases or included in units with which the Leases may have been pooled or unitized, subject to any depth restrictions described in Exhibit A (the “Lands”), including in each case, without limitation, fee interests, royalty interests, overriding royalty interests, production payments, net profits interests, carried interests, reversionary interests, and all other interests of any kind or character; .

(b) all oil and gas wells located on the Leases and the Lands or on other leases or lands with which the Leases and/or the Lands may have been pooled or unitized (collectively including, without limiting the foregoing in any respect, the wells set forth on Exhibit A, and the wells located on or associated with the Assets listed on Exhibit B-1 (the “Wells”), and all Hydrocarbons (as hereinafter defined) produced therefrom or allocated thereto (the Leases, the Lands, and the Wells being collectively referred to hereinafter as the “Properties”);

(d) to the extent that they may be assigned, all Applicable Contracts (as hereinafter defined);

(e) to the extent that they may be assigned, all permits, licenses, servitudes, easements, rights-of-way and other surface agreements to the extent used primarily in connection with the ownership or operation of the Properties or the Personal Property (as hereinafter defined), including without limiting the foregoing in any respect, the segments of the High Island Pipeline System that are described on Exhibit A-2 and that segment of the EI 305 pipeline that is described on Exhibit A;

(f) all equipment, machinery, fixtures, and other real, personal, and mixed property, functional and nonfunctional operational and nonoperational, known or unknown, located on the Properties or the other Assets described above as of the Effective Time, including, without limitation, saltwater disposal wells, well equipment, casing, rods, tanks, boilers, buildings, tubing, pumps, motors, fixtures, machinery, compression equipment, flow lines, pipelines (including, without limiting the foregoing in any respect, the segments of the High Island Pipeline System that are described on Exhibit A-2 and that segment of EI 305 pipeline that is described on Exhibit A), gathering systems, processing and separation facilities, platforms, structures, materials, and other items used or formerly used in the operation thereof, including, without limiting the foregoing in any respect, the Assets listed on Exhibit A-3, and all of the types of Assets referenced in this subparagraph (f) that are located on or associated with the Assets listed on Exhibit A-3 (“Personal Property”);

(g) all Imbalances (as hereinafter defined) relating to the Properties or other Assets; and

(h) all of the rights, titles, and interests of Assignor in and to all of the files, records, information, and data, whether written or electronically stored, primarily relating to the Assets, including, without limitation: (i) land and title records (including abstracts of title, title opinions, and title curative documents); (ii) contract files; (iii) correspondence; (iv) operations, environmental, production, and accounting records and (v) facility and well records but excluding any of the foregoing items that are Excluded Assets (“Records”),

EXCEPTING AND RESERVING to Assignor, however, all Excluded Assets.

TO HAVE AND TO HOLD the Assets unto Assignee, its successors and assigns, forever, subject, however, to all the terms and conditions of this Assignment.

Section 1.2 Excluded Assets. The term “Excluded Assets” shall mean (a) all of Assignor’s corporate minute books, financial records, and other business records that relate to Assignor’s business generally (including the ownership and operation of the Assets); (b) all trade credits, all accounts, receivables and all other proceeds, income or revenues attributable to the Assets with respect to any period of time prior to the Effective Time; (c) all claims and causes of action of Assignor arising under or with respect to any Contracts (as hereinafter defined) that are

attributable to periods of time prior to the Effective Time (including claims for adjustments or refunds); (d) all rights and interests of Assignor (A) under any policy or agreement of insurance or indemnity, (B) under any bond or (C) to any insurance or condemnation proceeds or awards arising, in each case, from acts, omissions or events, or damage to or destruction of property; (e) all Hydrocarbons produced and sold from the Properties with respect to all periods prior to the Effective Time; (f) all claims of Assignor for refunds of or loss carry forwards with respect to (A) production or any other taxes attributable to any period prior to the Effective Time, (B) income or franchise taxes or (C) any taxes attributable to the Excluded Assets; (g) all personal computers and associated peripherals and all radio and telephone equipment; (h) all of Assignor’s proprietary computer software, patents, trade secrets, copyrights, names, trademarks, logos and other intellectual property; (i) all documents and instruments of Assignor that may be protected by an attorney-client privilege; (j) all data that cannot be disclosed to Assignee as a result of confidentiality arrangements under agreements with Third Parties (as hereinafter defined); (k) all audit rights arising under any of the Applicable Contracts or otherwise with respect to any period prior to the Effective Time or to any of the Excluded Assets, except for any Imbalances; (l) all geophysical, and other seismic and related technical data and information relating to the Properties;; (m) documents prepared or received by Assignor with respect to (A) lists of prospective purchasers for such transactions compiled by Assignor; , (B) bids submitted by other prospective purchasers of the Assets, (C) analyses by Assignor of any bids submitted by any prospective purchaser, (D) correspondence between or among Assignor, its respective representatives, and any prospective purchaser other than Assignee and (E) correspondence between Assignor or any of its respective representatives with respect to any of the bids, the prospective purchasers, or the transactions contemplated in this Agreement; (n) any offices, office leases or personal property located on such sites which are not directly related to any one or more of the Assets; and (o) those depths, including, without limiting the foregoing in any respect, Deep Depths (as hereinafter defined), designated as excluded, excepted or reserved on Exhibit A with respect to the Leases, Lands or Assets; and (p) those overriding royalty interests designated as excluded, excepted or reserved on Exhibit A with respect to the Leases, Lands or Assets..

Section 1.3 Retained Rights and Obligations. The execution and delivery of this Assignment by Assignor, and the execution and acceptance of this Assignment by Assignee, shall not operate to release or impair any surviving rights or obligations of Assignor or Assignee under the Purchase and Sale Agreement (as hereinafter defined).

ARTICLE 2

DEFINED TERMS

Section 2.1 Definitions. Capitalized terms used in this Assignment and not otherwise defined shall have the meanings given to such terms in that certain Purchase and Sale Agreement dated as of ________________, 2005, by and between Assignor and Assignee. (the “Purchase and Sale Agreement”).

Section 2.2 Certain Defined Terms.

“Access Agreement” shall have the meaning set forth in Article 13.1(b)(iv) of the Purchase and Sale Agreement..

“Affiliate” shall mean any Person that, directly or indirectly, through one or more intermediaries, controls or is controlled by, or is under common control with, another Person. The term “control” and its derivatives with respect to any Person means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

“Applicable Contracts” means all Contracts by which the Properties and other Assets are bound or that primarily relate to the Properties or other Assets and (in each case) that will be binding on the Assets or Assignee after date hereof, including, without limitation; farmin and farmout agreements; bottomhole agreements; crude oil, condensate, and natural gas purchase and sale, gathering, transportation, and marketing agreements; hydrocarbon storage agreements; acreage contribution agreements; operating agreements; balancing agreements; pooling declarations or agreements; unitization agreements; processing agreements; saltwater disposal agreements; facilities or equipment leases; crossing agreements; letters of no objection; platform use agreements; production handling agreements; and other similar contracts and agreements, owned by Assignor and primarily related to the Properties or other Assets, but exclusive of any master service agreements.

“Contract” means any written or oral contract, agreement, agreement regarding indebtedness, indenture, debenture, note, bond, loan, , lease, mortgage, franchise, license agreement, purchase order, binding bid, commitment, letter of credit or any other legally binding arrangement, excluding, however, any Lease, easement, right-of-way, permit or other instrument creating or evidencing an interest in the Assets or a real or immovable property related to or used in connection with the operations of any Assets.

“Deep Depths” means those depths in the Assets as to which it is indicated on Exhibit A that either fifty percent (50%) or one hundred percent (100%) of Assignor’s interest therein is being reserved by Assignor (to be retained by Assignor as is specified in this Assignment.

“Environmental Condition” shall mean (a) a condition existing on the date of the Purchase and Sale Agreement with respect to the air, soil, subsurface, surface waters, ground waters and/or sediments that causes an Asset (or Assignor with respect to an Asset) not to be in compliance with any Environmental Law or (b) the existence as of the date of the Purchase and Sale Agreement with respect to the Assets or their operation thereof of any environmental pollution, contamination, degradation, damage or injury caused by, related to, remedial or corrective action is presently required (or if known, would be presently required) under Environmental Laws..

“Environmental Laws” means all applicable federal, state, and local laws in effect as of the date of the Purchase and Sale Agreement, including statutes, regulations, orders, ordinances, and common law, relating to the protection of the public health, welfare, and the environment, including, without limitation, those laws relating to the storage, handling, and use of chemicals and other Hazardous Substances, those relating to the generation, processing, treatment, storage, transportation, disposal, or other management thereof. The term “Environmental Laws” does not include good or desirable operating practices or standards that may be employed or adopted by other oil and gas well operators or recommended by a Governmental Authority.

“Governmental Authority” shall mean any federal, state, local, municipal, tribal or other government; any governmental, regulatory or administrative agency, commission, body or other authority exercising or entitled to exercise any administrative, executive, judicial, legislative, belief, regulatory or taxing authority or power; and any court or governmental tribunal, including any tribal authority having or asserting jurisdiction.

“Hazardous Substances” shall mean any pollutants, contaminants, toxics or hazardous or extremely hazardous substances, materials, wastes, constituents, compounds, or chemicals that are regulated by, or may form the basis of liability under, any Environmental Laws, including NORM and other substances referenced in Article 13.2 of the Purchase and Sale Agreement.

“Hydrocarbons” means oil and gas and other hydrocarbons produced or processed in association therewith.

“Imbalance” means (i) any imbalance at the wellhead between the amount of Hydrocarbons produced from a Well and allocable to the interests of Assignor therein and the shares of production from the relevant Well to which Assignor is entitled and (ii) any marketing imbalance between the quantity of Hydrocarbons required to be delivered by Assignor under any Contract relating to the purchase and sale, gathering, transportation, storage, processing, or marketing of Hydrocarbons and the quantity of Hydrocarbons actually delivered by Assignor pursuant to the relevant Contract, together with any appurtenant rights and obligations concerning future in-kind and/or cash balancing at the wellhead and production balancing at the delivery point into the relevant sale, gathering, transportation, storage, or processing facility.

“Law” shall mean any applicable statute, law, rule, regulation, ordinance, order, code, ruling, writ, injunction, decree or other official act of or by any Governmental Authority.

“Liabilities” shall mean any and all claims, causes of actions, payments, charges, judgments, assessments, liabilities, losses, damages, penalties, fines or costs and expenses, including any attorneys’ fees, legal or other expenses incurred in connection therewith and including liabilities, costs, losses and damages for personal injury or death or property damage.

“Person” shall mean any individual, firm, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization, Governmental Authority or any other entity.

“Third Party” shall mean any Person other than a party to this Assignment or an Affiliate of a party to this Assignment

“Title Defects” shall have the meaning given such in the Purchase and Sale Agreement.

“Title Indemnity Agreement” shall have the meaning set forth in Article 12.2(d)(ii) of the Purchase and Sale Agreement.

ARTICLE 3

DISCLAIMERS

Section 3.1 Disclaimers of Warranties and Representations.

(a) EXCEPT AS AND TO THE EXTENT EXPRESSLY SET FORTH IN ARTICLE 12.1 OR ARTICLE IV [and subject to the limitations on Article IV specified in the Purchase and Sale Agreement] OF THE PURCHASE AND SALE AGREEMENT, (I) ASSIGNOR MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS, STATUTORY OR IMPLIED, AND (II) ASSIGNOR EXPRESSLY DISCLAIMS ALL LIABILITY AND RESPONSIBILITY FOR ANY REPRESENTATION, WARRANTY, STATEMENT OR INFORMATION MADE OR COMMUNICATED (ORALLY OR IN WRITING) TO ASSIGNEE OR ANY OF ITS AFFILIATES, EMPLOYEES, AGENTS, CONSULTANTS OR REPRESENTATIVES (INCLUDING, WITHOUT LIMITATION, ANY OPINION, INFORMATION, PROJECTION OR ADVICE THAT MAY HAVE BEEN PROVIDED TO ASSIGNEE BY ANY OFFICER, DIRECTOR, EMPLOYEE, AGENT, CONSULTANT, REPRESENTATIVE OR ADVISOR OF ASSIGNOR OR ANY OF ITS AFFILIATES).

(b) EXCEPT AS EXPRESSLY REPRESENTED OTHERWISE IN ARTICLE 12.1 OR ARTICLE IV [and subject to the limitations on Article IV specified in the Purchase and Sale Agreement] OF THE PURCHASE AND SALE AGREEMENT, AND WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, ASSIGNOR EXPRESSLY DISCLAIMS ANY REPRESENTATION OR WARRANTY, EXPRESS, STATUTORY OR IMPLIED, AS TO (I) TITLE TO ANY OF THE ASSETS, (II) THE CONTENTS, CHARACTER OR NATURE OF ANY REPORT OF ANY PETROLEUM ENGINEERING CONSULTANT, OR ANY ENGINEERING, GEOLOGICAL OR SEISMIC DATA OR INTERPRETATION, RELATING TO THE ASSETS, (III) THE QUANTITY, QUALITY OR RECOVERABILITY OF HYDROCARBONS IN OR FROM THE ASSETS, (IV) ANY ESTIMATES OF THE VALUE OF THE ASSETS OR FUTURE REVENUES GENERATED BY THE ASSETS, (V) THE PRODUCTION OF HYDROCARBONS FROM THE ASSETS, (VI) THE MAINTENANCE, REPAIR, CONDITION, QUALITY, SUITABILITY, DESIGN OR MARKETABILITY OF THE ASSETS, (VII) THE CONTENT, CHARACTER OR NATURE OF ANY INFORMATION MEMORANDUM, REPORTS, BROCHURES, CHARTS OR STATEMENTS PREPARED BY ASSIGNOR OR THIRD PARTIES WITH RESPECT TO THE ASSETS, (VIII) ANY OTHER MATERIALS OR INFORMATION THAT MAY HAVE BEEN MADE AVAILABLE TO ASSIGNEE OR ITS AFFILIATES, OR ITS OR THEIR EMPLOYEES, AGENTS, CONSULTANTS, REPRESENTATIVES OR ADVISORS IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY DISCUSSION OR PRESENTATION RELATING THERETO AND (IX) ANY IMPLIED OR EXPRESS WARRANTY OF FREEDOM FROM PATENT OR TRADEMARK INFRINGEMENT. EXCEPT AS EXPRESSLY REPRESENTED OTHERWISE IN ARTICLE 12.1 OR ARTICLE IV OF THE PURCHASE AND SALE AGREEMENT, ASSIGNOR FURTHER DISCLAIMS ANY REPRESENTATION OR WARRANTY, EXPRESS, STATUTORY OR IMPLIED, OF MERCHANTABILITY, FREEDOM FROM LATENT VICES OR DEFECTS, FITNESS FOR A PARTICULAR PURPOSE OR CONFORMITY TO MODELS OR SAMPLES OF MATERIALS OF ANY ASSETS, RIGHTS OF A PURCHASER UNDER APPROPRIATE STATUTES TO CLAIM DIMUNITION OF CONSIDERATION OR RETURN OF THE PURCHASE PRICE, IT BEING EXPRESSLY UNDERSTOOD AND AGREED BY THE PARTIES HERETO THAT ASSIGNEE SHALL BE DEEMED TO BE OBTAINING THE ASSETS

IN THEIR PRESENT STATUS, CONDITION AND STATE OF REPAIR, “AS IS” AND “WHERE IS” WITH ALL FAULTS OR DEFECTS (KNOWN OR UNKNOWN, LATENT, DISCOVERABLE OR UNDISCOVERABLE), AND THAT ASSIGNEE HAS MADE OR CAUSED TO BE MADE SUCH INSPECTIONS AS ASSIGNEE DEEMS APPROPRIATE. WITH RESPECT TO ANY OF THE ASSETS THAT ARE LOCATED IN LOUISIANA, ASSIGNEE ACKNOWLEDGES THAT THIS WAIVER HAS BEEN EXPRESSLY CALLED TO ITS ATTENTION AND INCLUDES, WITHOUT LIMITATION, A WAIVER OF WARRANTY AGAINST REHIBITORY VICES ARISING UNDER LOUISIANA CIVIL CODE ARTICLES 2520 THROUGH 2548, INCLUSIVE.

(c) OTHER THAN THOSE REPRESENTATIONS SET FORTH IN ARTICLE 4.15 [and subject to the limitations on Article 4.15 specified in the Purchase and Sale Agreement]OF THE PURCHASE AND SALE AGREEMENT, ASSIGNOR HAS NOT AND WILL NOT MAKE ANY REPRESENTATION OR WARRANTY REGARDING ANY MATTER OR CIRCUMSTANCE RELATING TO ENVIRONMENTAL LAWS, THE RELEASE OF MATERIALS INTO THE ENVIRONMENT OR THE PROTECTION OF HUMAN HEALTH, SAFETY, NATURAL RESOURCES OR THE ENVIRONMENT, OR ANY OTHER ENVIRONMENTAL CONDITION OF THE ASSETS, AND NOTHING IN THIS ASSIGNMENT OR OTHERWISE SHALL BE CONSTRUED AS SUCH A REPRESENTATION OR WARRANTY, AND SUBJECT TO ASSIGNEE’S RIGHTS UNDER ARTICLE 13.1 OF THE PURCHASE AND SALE AGREEMENT, ASSIGNEE SHALL BE DEEMED TO BE TAKING THE ASSETS “AS IS” AND “WHERE IS” WITH ALL FAULTS FOR PURPOSES OF THEIR ENVIRONMENTAL CONDITION AND THAT ASSIGNEE HAS MADE OR CAUSED TO BE MADE SUCH ENVIRONMENTAL INSPECTIONS AS ASSIGNEE DEEMS APPROPRIATE.

(d) ASSIGNOR AND ASSIGNEE AGREE THAT, TO THE EXTENT REQUIRED BY APPLICABLE LAW TO BE EFFECTIVE, THE DISCLAIMERS OF CERTAIN REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS ARTICLE 3.1 ARE “CONSPICUOUS” DISCLAIMERS FOR THE PURPOSE OF ANY APPLICABLE LAW.

ARTICLE 4

ASSUMED OBLIGATIONS: INDEMNITIES

Section 4.1 Assumed Obligations. Without limiting Assignee’s rights to indemnity under Article 14 of the Purchase and Sale Agreement and Assignee’s rights under any Title Indemnity Agreement and any Access Agreement, from and after date hereof Assignee assumes and hereby agrees to fulfill, perform, pay and discharge (or cause to be fulfilled, performed, paid or discharged) all obligations and Liabilities, known or unknown, with respect to the Assets, regardless of whether such obligations or Liabilities arose prior to, on or after the Effective Time, including but not limited to obligations and Liabilities relating in any manner to the use, ownership or operation of the Assets, including but not limited to obligations to (a) furnish makeup gas and/or settle Imbalances according to the terms of applicable gas sales, processing, gathering or transportation Contracts, and, (b) pay working interests, royalties, overriding

royalties and other interests, owners revenues or proceeds attributable to sales of Hydrocarbons relating to the Properties, including those held in suspense, (c) properly plug and abandon any and all Wells, including inactive Wells or temporarily abandoned Wells, drilled on the Properties or otherwise pursuant to the Assets, (d) replug any well, wellbore, or previously plugged Well on the Properties to the extent required or necessary, (e) dismantle or decommission and remove any Personal Property and other property of whatever kind related to or associated with operations and activities conducted by whomever on the Properties or otherwise pursuant to the Assets, (f) clean up, restore and/or remediate the premises covered by or related to the Assets in accordance with applicable agreements and Laws, and (g) perform all obligations applicable to or imposed on the lessee, owner, or operator under the Leases and the Applicable Contracts, or as required by Laws (all of said obligations and Liabilities, subject to the exclusions below, herein being referred to as the “Assumed Obligations”); provided, Assignee does not assume any obligations or Liabilities of Assignor to the extent that they are:

(i) attributable to or arise out of the ownership, use or operation of the Excluded Assets; or

(ii) attributable to or arise out of the actions, suits or proceedings, if any, set forth on Schedule 14.1 of the Purchase and Sale Agreement, except insofar and only insofar as they arise after the Effective Time or are attributable or relate to the ownership or operation of the Assets, or production therefrom, for periods after the Effective Time.

Section 4.2 Indemnities of Assignee (a) Effective as of the Closing, Assignee and its successors and assigns shall assume, be responsible for, shall pay on a current basis, and hereby defends, indemnifies, holds harmless and forever releases Assignor and its Affiliates, and all of their respective stockholders, partners, members, directors, officers, managers, employees, agents and representatives (collectively, “Assignor Indemnified Parties”) from and against any and all Liabilities arising from, based upon, related to or associated with:

(i) the Assumed Obligations; or

(ii) except as provided otherwise in Article 12.1 of the Purchase and Sale Agreement, Title Defects related or attributable to the Assets.

(b) Notwithstanding anything herein or in the Purchase and Sale Agreement to the contrary, in addition to the indemnities set forth in above and in the Purchase and Sale Agreement, Assignee and its successors and assigns shall assume, be responsible for, shall pay on a current basis, and hereby defends, indemnifies, holds harmless and forever releases the Assignor Indemnified Parties from and against any and all Liabilities arising from, based upon, related to or associated with any Environmental Condition or other environmental matter related or attributable to the Assets, regardless of whether such Liabilities arose prior to, on or after the Effective Time, including the presence, disposal or relates of any Hazardous Substance or other material of any kind in, on or under the Assets or other neighboring property and including any liability of any Assignor Indemnified Party with respect to the Assets under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. §§ 9601 et. seq.), the Resource Conservation and Recovery Act of 1976 (42 U.S.C. § 6901 et. seq.),

the Clean Water Act (33 U.S.C. §§ 466 et. seq.), the Safe Drinking Water Act (14 U.S.C. §§ 1401-1450), the Hazardous Materials Transportation Act (49 U.S.C. §§ 1801 et. seq.), the Toxic Substance Control Act (15 U.S.C. §§ 2601-2629), the Clean Air Act (42 U.S.C. § 7401 et. seq.) as amended, and the Clean Air Act Amendments of 1990, and all state and local Environmental Laws.

(c) Assignee's indemnities in this Assignment shall be deemed covenants running with the Assets (provided that Assignee and its successors and assigns shall not be released from any of, and shall remain jointly and severally liable to the Assignor Indemnified Parties for, the obligations or Liabilities of the assignee under this Assignment upon any transfer or assignment of any Asset).

ARTICLE 5

MISCELLANEOUS

Section 5.1 Assignment Subject to Agreement. This Assignment is expressly made subject to the terms of the Purchase and Sale Agreement. If there is any conflict or inconsistency between the provisions of this Assignment and the provisions of the Purchase and Sale Agreement, then as to those provisions that are in conflict or that are inconsistent, the provisions of the Purchase and Sale Agreement shall be applicable and shall prevail.

Section 5.2 Separate Assignments. Where separate assignments of Assets have been, or will be, executed for filing with and approval by applicable Governmental Authorities, any such separate assignments (a) shall evidence the Assignment and assignment of the applicable Assets herein made, and shall not constitute any additional Assignment or assignment of the Assets, (b) are not intended to modify, and shall not modify, any of the terms, covenants and conditions, or limitations on warranties, set forth in this Assignment and are not intended to create and shall not create any representations, warranties or additional covenants of or by Assignor to Assignee, and (c) shall be deemed to contain all of the terms and provisions of this Assignment, as fully and to all intents and purposes as though the same were set forth at length in such separate assignments.

Section 5.3 Governing Law. THIS ASSIGNMENT AND THE LEGAL RELATIONS BETWEEN THE PARTIES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS THAT WOULD DIRECT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION, EXCEPT THAT THE LAW OF ANOTHER JURISDICTION SHALL APPLY TO THIS ASSIGNMENT INSOFAR AS THIS ASSIGNMENT COVERS OR RELATES TO A PART OF THE ASSETS FOR WHICH IT IS MANDATORY THAT THE LAW OF ANOTHER JURISDICTION, WHEREIN OR ADJACENT TO WHICH SUCH PART OF THE ASSETS ARE LOCATED, SHALL APPLY. JURISDICTION AND VENUE WITH RESPECT TO ANY DISPUTES ARISING HEREUNDER SHALL BE PROPER ONLY IN HARRIS COUNTY, TEXAS. ASSIGNEE CONSENTS TO PERSONAL AND SUBJECT MATTER JURISDICTION OF ANY FEDERAL OR STATE COURT LOCATED IN HARRIS COUNTY, TEXAS IN ANY LEGAL ACTION, SUIT OR

PROCEEDING WITH RESPECT TO THIS ASSIGNMENT. ASSIGNOR AND ASSIGNEE (ON ITS OWN BEHALF AND ON BEHALF OF ITS SUCCESSORS AND ASSIGNS) WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS ASSIGNMENT.

Section 5.4 Successors and Assigns. This Assignment shall bind and inure to the benefit of the parties hereto and their respective successors and assigns; provided, however, that nothing in this Assignment shall assign or grant, or in any way operate to assign or grant, any right, title or interest in, to or under the Purchase and Sale Agreement to any successor or assign of Assignee with respect to the Assets or any part thereof, it being expressly understood that rights, titles and interests under the Agreement may only be obtained or assigned in strict accordance with the terms thereof.

Section 5.5 Titles and Captions. All article or Article titles or captions in this Assignment are for convenience only, shall not be deemed part of this Assignment and in no way define, limit, extend, or describe the scope or intent of any provisions hereof. Except to the extent otherwise stated in this Assignment, references to “Articles” are to Articles of this Assignment, and references to “Exhibits” are to the Exhibits attached to this Assignment, which are made a part hereof and incorporated herein for all purposes.

Section 5.6 Counterparts. This Assignment may be executed in any number of counterparts, and each counterpart hereof shall be deemed to be an original instrument, but all such counterparts shall constitute but one instrument.

EXECUTED on _____________, 2005, but effective at the Effective Time.

ASSIGNOR:

DEVON ENERGY PRODUCTION COMPANY, L.P.

__________________________________

By:_________________________________

Title:________________________________

ASSIGNEE:

By:_______________________________

Title:______________________________

DEVON LOUISANA CORPORATION

____________________________________

By:_________________________________

Title:________________________________

DEVON ENERGY PETROLEUM PIPELINE COMPANY

____________________________________

By:_________________________________

Title:________________________________

[Appropriate acknowledgements to be added to execution form of Assignment]

[EXHIBIT B-1: Replaced by 1st Amendment to Purchase and Sale Agreement]

SS XXX

OCS-G XXXXX

EXHIBIT B-2

ASSIGNMENT OF CONTRACTUAL RIGHTS

UNITED STATES OF AMERICA §

OUTER CONTINENTAL SHELF §

WHEREAS, ____________________, an __________________, (hereinafter referred to as “Assignor”), whose address is 1200 Smith Street, Houston, Texas 77002, is the owner of certain contractual interests in and to the hereinafter described portion of the following identified lease (hereinafter referred to as the “Lease”):

(LEASE DESCRIPTION)

NOW THEREFORE, Assignor, for and in consideration of the mutual advantages and benefits accruing to the parties hereto, and for Ten and No/100 Dollars ($10.00), and other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, does hereby TRANSFER, ASSIGN, SELL and CONVEY effective as of 7:00 A.M., Central Standard Time, on January 1, 2005 (the “Effective Time”) to ________________________, a ____________________ corporation (hereinafter referred to as “Assignee”), whose address is _____________________________, all of its ___________% contractual rights in ______________________ as more fully described in ______________________ dated effective _____________________, between ____________________ and ___________________ (the “Assigned Interests”).

This Assignment is made by Assignor and accepted by Assignee subject to the terms, provisions and conditions of the Lease and any limitation on or contained in the Lease; and is expressly made subject to the terms of the Purchase and Sale Agreement dated as of __________________, 2005, among Devon Energy Production Company, L.P., Devon Louisiana Corporation and Devon Energy Petroleum Pipeline Company, as Seller, and ______________________, as Buyer (the “Purchase and Sale Agreement”). In the event of a conflict between the terms of this Assignment and the Purchase and Sale Agreement, the terms of the Purchase and Sale Agreement shall control. Capitalized terms used in this Assignment and not otherwise defined shall have the meanings given to such terms in the Purchase and Sale Agreement.

EXPRESS, STATUTORY OR IMPLIED, AND (II) ASSIGNOR EXPRESSLY DISCLAIMS ALL LIABILITY AND RESPONSIBILITY FOR ANY REPRESENTATION, WARRANTY, STATEMENT OR INFORMATION MADE OR COMMUNICATED (ORALLY OR IN WRITING) TO ASSIGNEE OR ANY OF ITS AFFILIATES, EMPLOYEES, AGENTS, CONSULTANTS OR REPRESENTATIVES (INCLUDING, WITHOUT LIMITATION, ANY OPINION, INFORMATION, PROJECTION OR ADVICE THAT MAY HAVE BEEN PROVIDED TO ASSIGNEE BY ANY OFFICER, DIRECTOR, EMPLOYEE, AGENT, CONSULTANT, REPRESENTATIVE OR ADVISOR OF ASSIGNOR OR ANY OF ITS AFFILIATES).

EXCEPT AS EXPRESSLY REPRESENTED OTHERWISE HEREIN OR IN ARTICLE 12.1 OR ARTICLE IV [AND SUBJECT TO THE LIMITATIONS ON ARTICLE IV SPECIFIED IN THE PURCHASE AND SALE AGREEMENT] OF THE PURCHASE AND SALE AGREEMENT, AND WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, ASSIGNOR EXPRESSLY DISCLAIMS ANY REPRESENTATION OR WARRANTY, EXPRESS, STATUTORY OR IMPLIED, AS TO (I) TITLE TO ANY OF THE ASSIGNED INTERESTS (II) THE CONTENTS, CHARACTER OR NATURE OF ANY REPORT OF ANY PETROLEUM ENGINEERING CONSULTANT, OR ANY ENGINEERING, GEOLOGICAL OR SEISMIC DATA OR INTERPRETATION, RELATING TO THE ASSIGNED INTERESTS, (III) THE QUANTITY, QUALITY OR RECOVERABILITY OF HYDROCARBONS IN OR FROM THE ASSIGNED INTERESTS, (IV) ANY ESTIMATES OF THE VALUE OF THE ASSIGNED INTERESTS OR FUTURE REVENUES GENERATED BY THE ASSIGNED INTERESTS, (V) THE PRODUCTION OF HYDROCARBONS FROM THE ASSIGNED INTERESTS, (VI) THE MAINTENANCE, REPAIR, CONDITION, QUALITY, SUITABILITY, DESIGN OR MARKETABILITY OF THE ASSIGNED INTERESTS, (VII) THE CONTENT, CHARACTER OR NATURE OF ANY INFORMATION MEMORANDUM, REPORTS, BROCHURES, CHARTS OR STATEMENTS PREPARED BY ASSIGNOR OR THIRD PARTIES WITH RESPECT TO THE ASSIGNED INTERESTS, (VIII) ANY OTHER MATERIALS OR INFORMATION THAT MAY HAVE BEEN MADE AVAILABLE TO ASSIGNEE OR ITS AFFILIATES, OR ITS OR THEIR EMPLOYEES, AGENTS, CONSULTANTS, REPRESENTATIVES OR ADVISORS IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY DISCUSSION OR PRESENTATION RELATING THERETO AND (IX) ANY IMPLIED OR EXPRESS WARRANTY OF FREEDOM FROM PATENT OR TRADEMARK INFRINGEMENT. EXCEPT AS EXPRESSLY REPRESENTED OTHERWISE IN ARTICLE 12.1 OR ARTICLE IV OF THE PURCHASE AND SALE AGREEMENT, ASSIGNOR FURTHER DISCLAIMS ANY REPRESENTATION OR WARRANTY, EXPRESS, STATUTORY OR IMPLIED, OF MERCHANTABILITY, FREEDOM FROM LATENT VICES OR DEFECTS, FITNESS FOR A PARTICULAR PURPOSE OR CONFORMITY TO MODELS OR SAMPLES OF MATERIALS OF ANY ASSIGNED INTERESTS, RIGHTS OF A PURCHASER UNDER APPROPRIATE STATUTES TO CLAIM DIMUNITION OF CONSIDERATION OR RETURN OF THE PURCHASE PRICE, IT BEING EXPRESSLY UNDERSTOOD AND AGREED BY THE PARTIES HERETO THAT ASSIGNEE SHALL BE DEEMED TO BE OBTAINING THE ASSIGNED INTERESTS IN THEIR PRESENT STATUS, CONDITION AND STATE OF REPAIR, “AS IS” AND “WHERE IS” WITH ALL FAULTS OR DEFECTS (KNOWN OR UNKNOWN, LATENT, DISCOVERABLE OR UNDISCOVERABLE), AND THAT ASSIGNEE HAS MADE OR CAUSED TO BE MADE SUCH INSPECTIONS AS ASSIGNEE DEEMS APPROPRIATE. WITH RESPECT TO ANY OF THE ASSIGNED INTERESTS THAT ARE LOCATED IN LOUISIANA, ASSIGNEE ACKNOWLEDGES THAT THIS WAIVER HAS BEEN EXPRESSLY CALLED TO ITS ATTENTION AND INCLUDES, WITHOUT LIMITATION, A WAIVER OF WARRANTY

AGAINST REHIBITORY VICES ARISING UNDER LOUISIANA CIVIL CODE ARTICLES 2520 THROUGH 2548, INCLUSIVE.

OTHER THAN THOSE REPRESENTATIONS SET FORTH IN ARTICLE 4.15 [AND SUBJECT TO THE LIMITATIONS ON ARTICLE IV SPECIFIED IN THE PURCHASE AND SALE AGREEMENT] OF THE PURCHASE AND SALE AGREEMENT, ASSIGNOR HAS NOT AND WILL NOT MAKE ANY REPRESENTATION OR WARRANTY REGARDING ANY MATTER OR CIRCUMSTANCE RELATING TO ENVIRONMENTAL LAWS, THE RELEASE OF MATERIALS INTO THE ENVIRONMENT OR THE PROTECTION OF HUMAN HEALTH, SAFETY, NATURAL RESOURCES OR THE ENVIRONMENT, OR ANY OTHER ENVIRONMENTAL CONDITION OF THE ASSIGNED INTERESTS, AND NOTHING IN THIS AGREEMENT OR OTHERWISE SHALL BE CONSTRUED AS SUCH A REPRESENTATION OR WARRANTY, AND SUBJECT TO ASSIGNEE’S RIGHTS UNDER ARTICLE 13.1 OF THE PURCHASE AND SALE AGREEMENT, ASSIGNEE SHALL BE DEEMED TO BE TAKING THE ASSIGNED INTERESTS “AS IS” AND “WHERE IS” WITH ALL FAULTS FOR PURPOSES OF THEIR ENVIRONMENTAL CONDITION AND THAT ASSIGNEE HAS MADE OR CAUSED TO BE MADE SUCH ENVIRONMENTAL INSPECTIONS AS ASSIGNEE DEEMS APPROPRIATE.

Without limiting, and subject to, Assignee’s rights to indemnity under Article 14.2 of the Purchase and Sale Agreement and Assignee’s rights under any Title Indemnity Agreement and any Access Agreement, from and after the Effective Time. Assignee assumes and hereby agrees to fulfill, perform, pay and discharge (or cause to be fulfilled, performed, paid or discharged) all obligations and Liabilities, known or unknown, with respect to the Assigned Interests, regardless of whether such obligations or Liabilities arose prior to, on or after the Effective Time, including but not limited to obligations and Liabilities relating in any manner to the use, ownership or operation of the Assigned Interests, including but not limited to obligations to (a) furnish makeup gas and/or settle Imbalances according to the terms of applicable gas sales, processing, gathering or transportation Contracts, and, (b) pay working interests, royalties, overriding royalties and other interests, owners revenues or proceeds attributable to sales of Hydrocarbons relating to the Properties, including those held in suspense, (c) properly plug and abandon any and all Wells, including inactive Wells or temporarily abandoned Wells, drilled on the Properties or otherwise pursuant to the Assigned Interests, (d) replug any well, wellbore, or previously plugged Well on the Properties to the extent required or necessary, (e) dismantle or decommission and remove any Personal Property and other property of whatever kind related to or associated with operations and activities conducted by whomever on the Properties or otherwise pursuant to the Assigned Interests, (f) clean up, restore and/or remediate the premises covered by or related to the Assigned Interests in accordance with applicable agreements and Laws, and (g) perform all obligations applicable to or imposed on the lessee, owner, or operator under the Leases and the Applicable Contracts, or as required by Laws; provided, Assignee does not assume any obligations or Liabilities of Assignor to the extent that they are:

(i) attributable to or arise out of the ownership, use or operation of the Excluded Assets; or

(ii) attributable to or arise out of the actions, suits or proceedings, if any, set forth on Schedule 14.1 of the Purchase and Sale Agreement except insofar and only insofar as they arise after the

Effective Time or are attributable or relate to the ownership or operation of the Assigned Interests, or production therefrom, for periods after the Effective Time.

This Assignment shall be deemed to be covenants running with the Assets and shall bind and inure to the benefit of the parties hereto and their respective successors and assigns; provided, however, that nothing in this Assignment shall assign or grant, or in any way operate to assign or grant, any right, title or interest in, to or under the Purchase and Sale Agreement to any successor or assign of Assignee with respect to the Assigned Interests or any part thereof, it being expressly understood that rights, titles and interests under the Purchase and Sale Agreement may only be obtained or assigned in strict accordance with the terms thereof.

TO HAVE AND TO HOLD the Assigned Interests hereby conveyed, together with all and singular rights and appurtenances thereto in anyway belonging unto Assignee, its successors and assigns forever (including, but not limited to the platforms, wells and all production therefrom).

IN WITNESS WHEREOF, this Assignment is executed by the parties hereto before the undersigned competent witnesses, on the dates set forth in their respective acknowledgments herein below, but shall be effective for all purposes as of the Effective Time, subject to the approval of the Minerals Management Service, United States Department of the Interior.

WITNESSES:

_______________________________

ASSIGNOR:

Devon Energy Production Company, L.P.

By: Devon Energy Management Company, L.L.C., Its General Partner

By: /s/Mark K. Gress

Mark K. Gress

Agent and Attorney-In-Fact

WITNESSES:

___________________________________

ASSIGNEE:

By:________________________________

STATE OF TEXAS §

COUNTY OF HARRIS §

BEFORE ME personally appeared the within named MARK K. GRESS, who being by me duly sworn did say that he is Agent and Attorney-In-Fact for Devon Energy Management Company, L.L.C., a Delaware limited liability company, general partner of Devon Energy Production Company, L.P., an Oklahoma limited partnership, and that the foregoing instrument was signed in behalf of said limited partnership and acknowledged said instrument to the free as the act and deed of said limited partnership.

GIVEN UNDER MY HAND AND OFFICIAL SEAL this _______ day of ____________, 2005.

______________________________________

Notary Public in and for the State of Texas

STATE OF TEXAS §

COUNTY OF HARRIS §

BEFORE ME personally appeared the within named _________________________, who being by me duly sworn did say that he is the _______________ of _________________________________, a _________________ corporation and that the foregoing instrument was signed in behalf of said corporation and acknowledged said instrument to the free act and deed of said corporation.

GIVEN UNDER MY HAND AND OFFICIAL SEAL this ________ day of ___________, 2005.

______________________________________

Notary Public in and for the State of Texas

EI XXX

OCS-G XXXXX

EXHIBIT B-2

ASSIGNMENT OF OPERATING RIGHTS

UNITED STATES OF AMERICA §

OUTER CONTINENTAL SHELF §

WHEREAS, ____________________., an _____________________, (hereinafter referred to as “Assignor”), whose address is 1200 Smith Street, Houston, Texas 77002, is the owner of certain interests in and to the hereinafter described portion of the following identified lease (hereinafter referred to as the “Lease”):

OCS-G XXXXX

(LEASE DESCRIPTION)

INSOFAR AND ONLY INSOFAR as said Lease covers the operating rights in

(the above described portion of the Lease is hereinafter referred to as the “Assigned Interests”).

NOW THEREFORE, Assignor, for and in consideration of the mutual advantages and benefits accruing to the parties hereto, and for Ten and No/100 Dollars ($10.00), and other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, does hereby TRANSFER, ASSIGN, SELL and CONVEY effective as of 7:00 A.M., Central Standard Time, on January 1, 2005 (the “Effective Time”) to _____________________________, a _____________________ corporation (hereinafter referred to as “Assignee”), whose address is _______________________________________ the following (collectively referred as to the Assigned Interests) _______________% of the Operating Rights in and to the Assigned Interests.

This Assignment is made by Assignor and accepted by Assignee subject to the terms, provisions and conditions of the Lease and any limitation on or contained in the Lease; and is expressly made subject to the terms of the Purchase and Sale Agreement dated as of ___________________, 2005, among Devon Energy Production Company, L.P., Devon Louisiana Corporation and Devon Energy Petroleum Pipeline Company, as Seller, and _________________________, as Buyer (the “Purchase and Sale Agreement”). In the event of a conflict between the terms of this Assignment and the Purchase and Sale Agreement, the terms of the Purchase and Sale Agreement shall control. Capitalized terms used in this Assignment and not otherwise defined shall have the meanings given to such terms in the Purchase and Sale Agreement.

EXCEPT AS AND TO THE EXTENT EXPRESSLY SET FORTH HEREIN OR IN ARTICLE 12.1 OR ARTICLE IV [AND SUBJECT TO THE LIMITATIONS ON ARTICLE IV SPECIFIED IN THE PURCHASE AND SALE AGREEMENT] OF THE PURCHASE AND SALE AGREEMENT, (I) ASSIGNOR MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS, STATUTORY OR IMPLIED, AND (II) ASSIGNOR EXPRESSLY DISCLAIMS ALL LIABILITY AND RESPONSIBILITY FOR ANY REPRESENTATION, WARRANTY, STATEMENT OR INFORMATION MADE OR COMMUNICATED (ORALLY OR IN WRITING) TO ASSIGNEE OR ANY OF ITS AFFILIATES, EMPLOYEES, AGENTS, CONSULTANTS OR REPRESENTATIVES (INCLUDING, WITHOUT LIMITATION, ANY OPINION, INFORMATION, PROJECTION OR ADVICE THAT MAY HAVE BEEN PROVIDED TO ASSIGNEE BY ANY OFFICER, DIRECTOR, EMPLOYEE, AGENT, CONSULTANT, REPRESENTATIVE OR ADVISOR OF ASSIGNOR OR ANY OF ITS AFFILIATES).

CONFORMITY TO MODELS OR SAMPLES OF MATERIALS OF ANY ASSIGNED INTERESTS, RIGHTS OF A PURCHASER UNDER APPROPRIATE STATUTES TO CLAIM DIMUNITION OF CONSIDERATION OR RETURN OF THE PURCHASE PRICE, IT BEING EXPRESSLY UNDERSTOOD AND AGREED BY THE PARTIES HERETO THAT ASSIGNEE SHALL BE DEEMED TO BE OBTAINING THE ASSIGNED INTERESTS IN THEIR PRESENT STATUS, CONDITION AND STATE OF REPAIR, “AS IS” AND “WHERE IS” WITH ALL FAULTS OR DEFECTS (KNOWN OR UNKNOWN, LATENT, DISCOVERABLE OR UNDISCOVERABLE), AND THAT ASSIGNEE HAS MADE OR CAUSED TO BE MADE SUCH INSPECTIONS AS ASSIGNEE DEEMS APPROPRIATE. WITH RESPECT TO ANY OF THE ASSIGNED INTERESTS THAT ARE LOCATED IN LOUISIANA, ASSIGNEE ACKNOWLEDGES THAT THIS WAIVER HAS BEEN EXPRESSLY CALLED TO ITS ATTENTION AND INCLUDES, WITHOUT LIMITATION, A WAIVER OF WARRANTY AGAINST REHIBITORY VICES ARISING UNDER LOUISIANA CIVIL CODE ARTICLES 2520 THROUGH 2548, INCLUSIVE.

decommission and remove any Personal Property and other property of whatever kind related to or associated with operations and activities conducted by whomever on the Properties or otherwise pursuant to the Assigned Interests, (f) clean up, restore and/or remediate the premises covered by or related to the Assigned Interests in accordance with applicable agreements and Laws, and (g) perform all obligations applicable to or imposed on the lessee, owner, or operator under the Leases and the Applicable Contracts, or as required by Laws; provided, Assignee does not assume any obligations or Liabilities of Assignor to the extent that they are:

(i) attributable to or arise out of the ownership, use or operation of the Excluded Assets; or

(ii) attributable to or arise out of the actions, suits or proceedings, if any, set forth on Schedule 14.1 of the PSA except insofar and only insofar as they arise after the Effective Time or are attributable or relate to the ownership or operation of the Assigned Interests, or production therefrom, for periods after the Effective Time.

WITNESSES:

_______________________________

ASSIGNOR:

Devon Energy Production Company, L.P.

By: Devon Energy Management Company, L.L.C., Its General Partner

By: /s/Mark K. Gress

Mark K. Gress

Agent and Attorney-In-Fact

WITNESSES:

___________________________________

ASSIGNEE:

By:________________________________

STATE OF TEXAS §

COUNTY OF HARRIS §

GIVEN UNDER MY HAND AND OFFICIAL SEAL this _______ day of ____________, 2005.

______________________________________

Notary Public in and for the State of Texas

STATE OF TEXAS §

COUNTY OF HARRIS §

GIVEN UNDER MY HAND AND OFFICIAL SEAL this ________ day of ___________, 2005.

______________________________________

Notary Public in and for the State of Texas

EI XXX

OCS-G XXXX

EXHIBIT B-2

ASSIGNMENT OF RECORD TITLE

UNITED STATES OF AMERICA §

OUTER CONTINENTAL SHELF §

THIS ASSIGNMENT is by and between ___________________, _______________, whose address is 1200 Smith Street, Houston Texas 77002, (hereinafter called “Assignor”), and ___________________________________________ a ____________________ corporation, whose address is __________________________________________ (hereinafter called “Assignee”), and is effective as of 7:00 A.M., Central Standard Time, on January 1, 2005 (the “Effective Time”).

Assignor, for and in consideration of the sum of Ten Dollars ($10.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and of the performance by Assignee of the covenants, agreements, obligations and conditions hereinafter contained, to be kept and performed by Assignee, does SELL, TRANSFER, ASSIGN, SET OVER AND CONVEY unto Assignee _____________% Record Title interest in and to the following (hereinafter referred to as the “Assigned Interests”):

OCS-G XXXX

(LEASE DESCRIPTION)

This Assignment is made by Assignor and accepted by Assignee subject to the terms, provisions and conditions of the Lease and any limitation on or contained in the Lease; and is expressly made subject to the terms of the Purchase and Sale Agreement dated as of __________, 2005, among Devon Energy Production Company, L.P., Devon Louisiana Corporation and Devon Energy Petroleum Pipeline Company, as Seller, and ____________________________, as Buyer (the "PSA"). In the event of a conflict between the terms of this Assignment and the PSA, the terms of the PSA shall control. Capitalized terms used in this Assignment and not otherwise defined shall have the meanings given to such terms in the PSA.

EXCEPT AS AND TO THE EXTENT EXPRESSLY SET FORTH IN ARTICLE 12.1 OR ARTICLE IV [AND SUBJECT TO THE LIMITATIONS ON ARTICLE IV SPECIFIED IN THE PURCHASE AND SALE AGREEMENT] OF THE PURCHASE AND SALE AGREEMENT, (I) ASSIGNOR MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS, STATUTORY

OR IMPLIED, AND (II) ASSIGNOR EXPRESSLY DISCLAIMS ALL LIABILITY AND RESPONSIBILITY FOR ANY REPRESENTATION, WARRANTY, STATEMENT OR INFORMATION MADE OR COMMUNICATED (ORALLY OR IN WRITING) TO ASSIGNEE OR ANY OF ITS AFFILIATES, EMPLOYEES, AGENTS, CONSULTANTS OR REPRESENTATIVES (INCLUDING, WITHOUT LIMITATION, ANY OPINION, INFORMATION, PROJECTION OR ADVICE THAT MAY HAVE BEEN PROVIDED TO ASSIGNEE BY ANY OFFICER, DIRECTOR, EMPLOYEE, AGENT, CONSULTANT, REPRESENTATIVE OR ADVISOR OF ASSIGNOR OR ANY OF ITS AFFILIATES).

EXCEPT AS EXPRESSLY REPRESENTED OTHERWISE IN ARTICLE 12.1 OR ARTICLE IV [AND SUBJECT TO THE LIMITATIONS ON ARTICLE IV SPECIFIED IN THE PURCHASE AND SALE AGREEMENT] OF THE PURCHASE AND SALE AGREEMENT, AND WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, ASSIGNOR EXPRESSLY DISCLAIMS ANY REPRESENTATION OR WARRANTY, EXPRESS, STATUTORY OR IMPLIED, AS TO (I) TITLE TO ANY OF THE ASSIGNED INTERESTS, (II) THE CONTENTS, CHARACTER OR NATURE OF ANY REPORT OF ANY PETROLEUM ENGINEERING CONSULTANT, OR ANY ENGINEERING, GEOLOGICAL OR SEISMIC DATA OR INTERPRETATION, RELATING TO THE ASSIGNED INTERESTS, (III) THE QUANTITY, QUALITY OR RECOVERABILITY OF HYDROCARBONS IN OR FROM THE ASSIGNED INTERESTS, (IV) ANY ESTIMATES OF THE VALUE OF THE ASSIGNED INTERESTS OR FUTURE REVENUES GENERATED BY THE ASSIGNED INTERESTS, (V) THE PRODUCTION OF HYDROCARBONS FROM THE ASSIGNED INTERESTS, (VI) THE MAINTENANCE, REPAIR, CONDITION, QUALITY, SUITABILITY, DESIGN OR MARKETABILITY OF THE ASSIGNED INTERESTS, (VII) THE CONTENT, CHARACTER OR NATURE OF ANY INFORMATION MEMORANDUM, REPORTS, BROCHURES, CHARTS OR STATEMENTS PREPARED BY ASSIGNOR OR THIRD PARTIES WITH RESPECT TO THE ASSIGNED INTERESTS, (VIII) ANY OTHER MATERIALS OR INFORMATION THAT MAY HAVE BEEN MADE AVAILABLE TO ASSIGNEE OR ITS AFFILIATES, OR ITS OR THEIR EMPLOYEES, AGENTS, CONSULTANTS, REPRESENTATIVES OR ADVISORS IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY DISCUSSION OR PRESENTATION RELATING THERETO AND (IX) ANY IMPLIED OR EXPRESS WARRANTY OF FREEDOM FROM PATENT OR TRADEMARK INFRINGEMENT. EXCEPT AS EXPRESSLY REPRESENTED OTHERWISE IN ARTICLE 12.1 OR ARTICLE IV OF THE PURCHASE AND SALE AGREEMENT, ASSIGNOR FURTHER DISCLAIMS ANY REPRESENTATION OR WARRANTY, EXPRESS, STATUTORY OR IMPLIED, OF MERCHANTABILITY, FREEDOM FROM LATENT VICES OR DEFECTS, FITNESS FOR A PARTICULAR PURPOSE OR CONFORMITY TO MODELS OR SAMPLES OF MATERIALS OF ANY ASSIGNED INTERESTS, RIGHTS OF A PURCHASER UNDER APPROPRIATE STATUTES TO CLAIM DIMUNITION OF CONSIDERATION OR RETURN OF THE PURCHASE PRICE, IT BEING EXPRESSLY UNDERSTOOD AND AGREED BY THE PARTIES HERETO THAT ASSIGNEE SHALL BE DEEMED TO BE OBTAINING THE ASSIGNED INTERESTS IN THEIR PRESENT STATUS, CONDITION AND STATE OF REPAIR, “AS IS” AND “WHERE IS” WITH ALL FAULTS OR DEFECTS (KNOWN OR UNKNOWN, LATENT, DISCOVERABLE OR UNDISCOVERABLE), AND THAT ASSIGNEE HAS MADE OR CAUSED TO BE MADE SUCH INSPECTIONS AS ASSIGNEE DEEMS APPROPRIATE. WITH RESPECT TO ANY OF THE ASSIGNED INTERESTS THAT ARE LOCATED IN LOUISIANA, ASSIGNEE ACKNOWLEDGES THAT THIS WAIVER HAS BEEN EXPRESSLY CALLED TO ITS ATTENTION AND INCLUDES, WITHOUT LIMITATION, A WAIVER OF WARRANTY AGAINST REHIBITORY VICES ARISING UNDER LOUISIANA CIVIL CODE ARTICLES 2520 THROUGH 2548, INCLUSIVE.

ASSIGNOR AND ASSIGNEE AGREE THAT, TO THE EXTENT REQUIRED BY APPLICABLE LAW TO BE EFFECTIVE, THE DISCLAIMERS OF CERTAIN REPRESENTATIONS AND WARRANTIES CONTAINED IN ARTICLE 11.3 OF THE PURCHASE AND SALE AGREEMENT ARE “CONSPICUOUS” DISCLAIMERS FOR THE PURPOSE OF ANY APPLICABLE LAW.

Without limiting Assignee’s rights to indemnity under Article XIV of the Purchase and Sale Agreement and Assignee’s rights under any Title Indemnity Agreement and any Access Agreement, from and after the Effective Time, Assignee assumes and hereby agrees to fulfill, perform, pay and discharge (or cause to be fulfilled, performed, paid or discharged) all obligations and Liabilities, known or unknown, with respect to the Assigned Interests, regardless of whether such obligations or Liabilities arose prior to, on or after the Effective Time, including but not limited to obligations and Liabilities relating in any manner to the use, ownership or operation of the Assigned Interests, including but not limited to obligations to (a) furnish makeup gas and/or settle Imbalances according to the terms of applicable gas sales, processing, gathering or transportation Contracts, and, (b) pay working interests, royalties, overriding royalties and other interests, owners revenues or proceeds attributable to sales of Hydrocarbons relating to the Properties, including those held in suspense, (c) properly plug and abandon any and all Wells, including inactive Wells or temporarily abandoned Wells, drilled on the Properties or otherwise pursuant to the Assigned Interests, (d) replug any well, wellbore, or previously plugged Well on the Properties to the extent required or necessary, (e) dismantle or decommission and remove any Personal Property and other property of whatever kind related to or associated with operations and activities conducted by whomever on the Properties or otherwise pursuant to the Assigned Interests, (f) clean up, restore and/or remediate the premises covered by or related to the Assigned Interests in accordance with applicable agreements and Laws, and (g) perform all obligations applicable to or imposed on the lessee, owner, or operator under the Leases and the Applicable Contracts, or as required by Laws (all of said obligations and Liabilities, subject to the exclusions below, herein being referred to as the “Assumed Obligations”); provided, Assignee does not assume any obligations or Liabilities of Assignor to the extent that they are:

(i) attributable to or arise out of the ownership, use or operation of the Excluded Assets; or

(ii) attributable to or arise out of the actions, suits or proceedings, if any, set forth on Schedule 14.1 of the Purchase and Sale Agreement except insofar and only insofar as they arise after the Effective Time or are attributable or relate to the ownership or operation of the Assigned Interests, or production therefrom, for periods after the Effective Time.

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This Assignment shall be deemed to be covenants running with the Assets and shall bind and inure to the benefit of the parties hereto and their respective successors and assigns; provided, however, that nothing in this Assignment shall assign or grant, or in any way operate to assign or grant, any right, title or interest in, to or under the Purchase and Sale Agreement to any successor or assign of Assignee with respect to the Interests or any part thereof, it being expressly understood that rights, titles and interests under the Purchase and Sale Agreement may only be obtained or assigned in strict accordance with the terms thereof.

TO HAVE AND TO HOLD the Assigned Interests hereby conveyed, together with all and singular rights and appurtenances thereto in anyway belonging unto Assignee, its successors and assigns forever (including, but not limited to the platforms, wells and all production therefrom).

IN WITNESS WHEREOF, this Assignment is executed by the parties hereto before the undersigned competent witnesses, on the dates set forth in their respective acknowledgments herein below, but shall be effective for all purposes as of the Effective Time, subject to the approval of the Minerals Management Service, United States Department of the Interior.

WITNESSES:

_______________________________

_______________________________

ASSIGNOR:

Devon Energy Production Company, L.P.

By: Devon Energy Management Company, L.L.C., Its General Partner

By: /s/Mark K. Gress

Mark K. Gress

Agent and Attorney-In-Fact

WITNESSES:

___________________________________

___________________________________

ASSIGNEE:

By:________________________________

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STATE OF TEXAS §

COUNTY OF HARRIS §

BEFORE ME personally appeared the within named MARK K. GRESS, who being by me duly sworn did say that he is Agent and Attorney-In-Fact for Devon Energy Management Company, L.L.C., a Delaware limited liability company, general partner of Devon Energy Production Company, L.P., an Oklahoma limited partnership, and that the foregoing instrument was signed in behalf of said limited partnership and acknowledged said instrument to the free as the act and deed of said limited partnership.

GIVEN UNDER MY HAND AND OFFICIAL SEAL this _______ day of ____________, 2005.

______________________________________

Notary Public in and for the State of Texas

STATE OF TEXAS §

COUNTY OF HARRIS §

BEFORE ME personally appeared the within named _________________________, who being by me duly sworn did say that he is the _______________ of _________________________________, a _________________ corporation and that the foregoing instrument was signed in behalf of said corporation and acknowledged said instrument to the free act and deed of said corporation.

GIVEN UNDER MY HAND AND OFFICIAL SEAL this ________ day of ___________, 2005.

______________________________________

Notary Public in and for the State of Texas

5

BA XXX

OCS-G XXXXX

EXHIBIT B-2

ATTACHED TO AND MADE A PART OF THAT CERTAIN PURCHASE AND SALE AGREEMENT DATED JULY 22, 2005, BY AND BETWEEN DEVON ENERGY PRODUCTION COMPANY, L.P. AND DEVON LOUISIANA CORPORATION AND DEVON ENERGY PETROLEUM PIPELINE COMPANY AS SELLER, AND MARITECH RESOURCES, INC., AS BUYER

ASSIGNMENT OF RIGHT OF WAY

UNITED STATES OF AMERICA §

OUTER CONTINENTAL SHELF §

THIS ASSIGNMENT is by and between __________________, a ______________, whose mailing address is 1200 Smith Street, Houston Texas 77002, (hereinafter called “Assignor”), and ______________________, a __________________ corporation, whose address is __________________________, (hereinafter called “Assignee”) and is effective as of January 1, 2005 at 7:00 A.M., Central Standard Time (the "Effective Time");

WITNESSETH

That, for and in consideration of the mutual advantages and benefits accruing to the parties hereto and of other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, it is agreed between the parties as follows:

Assignor does hereby transfer, assign, sell, bargain and convey to Assignee all of Assignor’s right, title and interest, if any, in and to that certain Pipeline Right-of-Way OCS-G XXXXX (Segment No. XXXXX), being described as (the “Assigned Interests”).

This Assignment is made by Assignor and accepted by Assignee subject to the terms, provisions and conditions of the Lease and any limitation on or contained in the Lease; and is expressly made subject to the terms of the Purchase and Sale Agreement dated as of _________________, 2005, among Devon Energy Production Company, L.P., Devon Louisiana Corporation and Devon Energy Petroleum Pipeline Company, as Seller, and ____________________________, as Buyer (the “Purchase and Sale Agreement”). In the event of a conflict between the terms of this Assignment and the Purchase and Sale Agreement, the terms of the Purchase and Sale Agreement shall control. Capitalized terms used in this Assignment and not otherwise defined shall have the meanings given to such terms in the Purchase and Sale Agreement.

EXCEPT AS AND TO THE EXTENT EXPRESSLY SET FORTH HEREIN OR IN ARTICLE 12.1 OR ARTICLE IV [AND SUBJECT TO THE LIMITATIONS ON ARTICLE IV SPECIFIED IN THE PURCHASE AND SALE AGREEMENT] OF THE PURCHASE AND SALE AGREEMENT, (I) ASSIGNOR MAKES NO REPRESENTATIONS OR WARRANTIES,

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EXPRESS, STATUTORY OR IMPLIED, AND (II) ASSIGNOR EXPRESSLY DISCLAIMS ALL LIABILITY AND RESPONSIBILITY FOR ANY REPRESENTATION, WARRANTY, STATEMENT OR INFORMATION MADE OR COMMUNICATED (ORALLY OR IN WRITING) TO ASSIGNEE OR ANY OF ITS AFFILIATES, EMPLOYEES, AGENTS, CONSULTANTS OR REPRESENTATIVES (INCLUDING, WITHOUT LIMITATION, ANY OPINION, INFORMATION, PROJECTION OR ADVICE THAT MAY HAVE BEEN PROVIDED TO ASSIGNEE BY ANY OFFICER, DIRECTOR, EMPLOYEE, AGENT, CONSULTANT, REPRESENTATIVE OR ADVISOR OF ASSIGNOR OR ANY OF ITS AFFILIATES).

EXCEPT AS EXPRESSLY REPRESENTED OTHERWISE HEREIN OR IN ARTICLE 12.1 OR ARTICLE IV [AND SUBJECT TO THE LIMITATIONS ON ARTICLE IV SPECIFIED IN THE PURCHASE AND SALE AGREEMENT] OF THE PURCHASE AND SALE AGREEMENT, AND WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, ASSIGNOR EXPRESSLY DISCLAIMS ANY REPRESENTATION OR WARRANTY, EXPRESS, STATUTORY OR IMPLIED, AS TO (I) TITLE TO ANY OF THE ASSIGNED INTERESTS (II) THE CONTENTS, CHARACTER OR NATURE OF ANY REPORT OF ANY PETROLEUM ENGINEERING CONSULTANT, OR ANY ENGINEERING, GEOLOGICAL OR SEISMIC DATA OR INTERPRETATION, RELATING TO THE ASSIGNED INTERESTS, (III) THE QUANTITY, QUALITY OR RECOVERABILITY OF HYDROCARBONS IN OR FROM THE ASSIGNED INTERESTS, (IV) ANY ESTIMATES OF THE VALUE OF THE ASSIGNED INTERESTS OR FUTURE REVENUES GENERATED BY THE ASSIGNED INTERESTS, (V) THE PRODUCTION OF HYDROCARBONS FROM THE ASSIGNED INTERESTS, (VI) THE MAINTENANCE, REPAIR, CONDITION, QUALITY, SUITABILITY, DESIGN OR MARKETABILITY OF THE ASSIGNED INTERESTS, (VII) THE CONTENT, CHARACTER OR NATURE OF ANY INFORMATION MEMORANDUM, REPORTS, BROCHURES, CHARTS OR STATEMENTS PREPARED BY ASSIGNOR OR THIRD PARTIES WITH RESPECT TO THE ASSIGNED INTERESTS, (VIII) ANY OTHER MATERIALS OR INFORMATION THAT MAY HAVE BEEN MADE AVAILABLE TO ASSIGNEE OR ITS AFFILIATES, OR ITS OR THEIR EMPLOYEES, AGENTS, CONSULTANTS, REPRESENTATIVES OR ADVISORS IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY DISCUSSION OR PRESENTATION RELATING THERETO AND (IX) ANY IMPLIED OR EXPRESS WARRANTY OF FREEDOM FROM PATENT OR TRADEMARK INFRINGEMENT. EXCEPT AS EXPRESSLY REPRESENTED OTHERWISE IN ARTICLE 12.1 OR ARTICLE IV OF THE PURCHASE AND SALE AGREEMENT, ASSIGNOR FURTHER DISCLAIMS ANY REPRESENTATION OR WARRANTY, EXPRESS, STATUTORY OR IMPLIED, OF MERCHANTABILITY, FREEDOM FROM LATENT VICES OR DEFECTS, FITNESS FOR A PARTICULAR PURPOSE OR CONFORMITY TO MODELS OR SAMPLES OF MATERIALS OF ANY ASSIGNED INTERESTS, RIGHTS OF A PURCHASER UNDER APPROPRIATE STATUTES TO CLAIM DIMUNITION OF CONSIDERATION OR RETURN OF THE PURCHASE PRICE, IT BEING EXPRESSLY UNDERSTOOD AND AGREED BY THE PARTIES HERETO THAT ASSIGNEE SHALL BE DEEMED TO BE OBTAINING THE ASSIGNED INTERESTS IN THEIR PRESENT STATUS, CONDITION AND STATE OF REPAIR, “AS IS” AND “WHERE IS” WITH ALL FAULTS OR DEFECTS (KNOWN OR UNKNOWN, LATENT, DISCOVERABLE OR UNDISCOVERABLE), AND THAT ASSIGNEE HAS MADE OR CAUSED TO BE MADE SUCH INSPECTIONS AS ASSIGNEE DEEMS APPROPRIATE. WITH RESPECT TO ANY OF THE ASSIGNED INTERESTS THAT ARE LOCATED IN LOUISIANA, ASSIGNEE ACKNOWLEDGES THAT THIS WAIVER HAS BEEN EXPRESSLY CALLED TO ITS ATTENTION AND INCLUDES, WITHOUT LIMITATION, A WAIVER OF WARRANTY

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AGAINST REHIBITORY VICES ARISING UNDER LOUISIANA CIVIL CODE ARTICLES 2520 THROUGH 2548, INCLUSIVE.

OTHER THAN THOSE REPRESENTATIONS SET FORTH IN ARTICLE 4.15 [AND SUBJECT TO THE LIMITATIONS ON ARTICLE IV SPECIFIED IN THE PURCHASE AND SALE AGREEMENT] OF THE PURCHASE AND SALE AGREEMENT, ASSIGNOR HAS NOT AND WILL NOT MAKE ANY REPRESENTATION OR WARRANTY REGARDING ANY MATTER OR CIRCUMSTANCE RELATING TO ENVIRONMENTAL LAWS, THE RELEASE OF MATERIALS INTO THE ENVIRONMENT OR THE PROTECTION OF HUMAN HEALTH, SAFETY, NATURAL RESOURCES OR THE ENVIRONMENT, OR ANY OTHER ENVIRONMENTAL CONDITION OF THE ASSIGNED INTERESTS, AND NOTHING IN THIS AGREEMENT OR OTHERWISE SHALL BE CONSTRUED AS SUCH A REPRESENTATION OR WARRANTY, AND SUBJECT TO ASSIGNEE’S RIGHTS UNDER ARTICLE 13.1 OF THE PURCHASE AND SALE AGREEMENT, ASSIGNEE SHALL BE DEEMED TO BE TAKING THE ASSIGNED INTERESTS “AS IS” AND “WHERE IS” WITH ALL FAULTS FOR PURPOSES OF THEIR ENVIRONMENTAL CONDITION AND THAT ASSIGNEE HAS MADE OR CAUSED TO BE MADE SUCH ENVIRONMENTAL INSPECTIONS AS ASSIGNEE DEEMS APPROPRIATE.

ASSIGNOR AND ASSIGNEE AGREE THAT, TO THE EXTENT REQUIRED BY APPLICABLE LAW TO BE EFFECTIVE, THE DISCLAIMERS OF CERTAIN REPRESENTATIONS AND WARRANTIES CONTAINED IN ARTICLE 11.3 OF THE PURCHASE AND SALE AGREEMENT ARE “CONSPICUOUS” DISCLAIMERS FOR THE PURPOSE OF ANY APPLICABLE LAW.

Without limiting, and subject to, Assignee’s rights to indemnity under Article 14.2 of the Purchase and Sale Agreement and Assignee’s rights under any Title Indemnity Agreement and any Access Agreement, from and after the Effective Time. Assignee assumes and hereby agrees to fulfill, perform, pay and discharge (or cause to be fulfilled, performed, paid or discharged) all obligations and Liabilities, known or unknown, with respect to the Assigned Interests, regardless of whether such obligations or Liabilities arose prior to, on or after the Effective Time, including but not limited to obligations and Liabilities relating in any manner to the use, ownership or operation of the Assigned Interests, including but not limited to obligations to (a) furnish makeup gas and/or settle Imbalances according to the terms of applicable gas sales, processing, gathering or transportation Contracts, and, (b) pay working interests, royalties, overriding royalties and other interests, owners revenues or proceeds attributable to sales of Hydrocarbons relating to the Properties, including those held in suspense, (c) properly plug and abandon any and all Wells, including inactive Wells or temporarily abandoned Wells, drilled on the Properties or otherwise pursuant to the Assigned Interests, (d) replug any well, wellbore, or previously plugged Well on the Properties to the extent required or necessary, (e) dismantle or decommission and remove any Personal Property and other property of whatever kind related to or associated with operations and activities conducted by whomever on the Properties or otherwise pursuant to the Assigned Interests, (f) clean up, restore and/or remediate the premises covered by or related to the Assigned Interests in accordance with applicable agreements and Laws, and (g) perform all obligations applicable to or imposed on the lessee, owner, or operator under the Leases and the Applicable Contracts, or as required by Laws; provided, Assignee does not assume any obligations or Liabilities of Assignor to the extent that they are:

(i) attributable to or arise out of the ownership, use or operation of the Excluded Assets; or

(ii) attributable to or arise out of the actions, suits or proceedings, if any, set forth on Schedule 14.1 of the Purchase and Sale Agreement except insofar and only insofar as they arise after the

3

Effective Time or are attributable or relate to the ownership or operation of the Assigned Interests, or production therefrom, for periods after the Effective Time.

This Assignment shall be deemed to be covenants running with the Assets and shall bind and inure to the benefit of the parties hereto and their respective successors and assigns; provided, however, that nothing in this Assignment shall assign or grant, or in any way operate to assign or grant, any right, title or interest in, to or under the Purchase and Sale Agreement to any successor or assign of Assignee with respect to the Assigned Interests or any part thereof, it being expressly understood that rights, titles and interests under the Purchase and Sale Agreement may only be obtained or assigned in strict accordance with the terms thereof.

TO HAVE AND TO HOLD the Assigned Interests hereby conveyed, together with all and singular rights and appurtenances thereto in anyway belonging unto Assignee, its successors and assigns forever (including, but not limited to the platforms, wells and all production therefrom).

IN WITNESS WHEREOF, this Assignment is executed by the parties hereto before the undersigned competent witnesses, on the dates set forth in their respective acknowledgments herein below, but shall be effective for all purposes as of the Effective Time, subject to the approval of the Minerals Management Service, United States Department of the Interior.

WITNESSES:

_______________________________

_______________________________

ASSIGNOR:

Devon Louisiana Corporation

By: /s/Mark K. Gress

Mark K. Gress

Agent and Attorney-In-Fact

WITNESSES:

___________________________________

___________________________________

ASSIGNEE:

By:________________________________

4

STATE OF TEXAS §

COUNTY OF HARRIS §

BEFORE ME personally appeared the within named MARK K. GRESS, who being by me duly sworn did say that he is Agent and Attorney-In-Fact for Devon Louisiana Corporation, a Louisiana corporation, and that the foregoing instrument was signed in behalf of said corporation and acknowledged said instrument to the free as the act and deed of said corporation.

GIVEN UNDER MY HAND AND OFFICIAL SEAL this _______ day of ____________, 2005.

______________________________________

Notary Public in and for the State of Texas

STATE OF TEXAS §

COUNTY OF HARRIS §

BEFORE ME personally appeared the within named _________________________, who being by me duly sworn did say that he is the _______________ of _________________________________, a _________________ corporation and that the foregoing instrument was signed in behalf of said corporation and acknowledged said instrument to the free act and deed of said corporation.

GIVEN UNDER MY HAND AND OFFICIAL SEAL this ________ day of ___________, 2005.

______________________________________

Notary Public in and for the State of Texas

5

ATTACHED TO AND MADE A PART OF THAT CERTAIN PURCHASE AND SALE AGREEMENT DATED JULY 22, 2005, BY AND BETWEEN DEVON ENERGY PRODUCTION COMPANY, L.P. AND DEVON LOUISIANA CORPORATION AND DEVON ENERGY PETROLEUM PIPELINE COMPANY AS SELLER, AND MARITECH RESOURCES, INC., AS BUYER

EXHIBIT C

TITLE INDEMNITY AGREEMENT

This Title Indemnity Agreement (the “Agreement”) dated as of the ____ day of __________, 2005, is entered into among Devon Energy Production Company, L.P., an Oklahoma limited partnership (“DEPC”) and Devon Louisiana Corporation, a Louisiana corporation (“DLC” and DEPC are collectively referred to as “Indemnitor” and individually as an “Indemnitor”) and ________________________ (“Indemnitee”). Capitalized terms used herein and not otherwise defined below or elsewhere in this Agreement shall have the meaning assigned to them in this Agreement, or, if not so assigned, as assigned to them in that certain Purchase and Sale Agreement dated as of _____________, 2005, by and among Seller and Buyer (the “Purchase and Sale Agreement”).

Recitals

WHEREAS, of even date herewith, Indemnitor is selling and delivering, and Indemnitee is purchasing and accepting, the Assets pursuant to the Purchase and Sale Agreement; and

WHEREAS, certain alleged Title Defects have been raised by Indemnitee in connection with its title review of the Assets and Indemnitor has agreed to execute this Agreement in order to indemnify Indemnitee against the effects of such alleged Title Defects pursuant to Article 12.2(d)(ii) of the Purchase and Sale Agreement.

NOW, THEREFORE, in consideration of the purchase and sale as contemplated by the Purchase and Sale Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

Agreement

1. Unwaived Title Defects. Attached hereto as Exhibit A is a list of unwaived alleged Title Defects that Indemnitor and Indemnitee have determined may affect certain of the Assets described in Exhibit A. Except as otherwise expressly provided on Exhibit A, neither Indemnitor nor Indemnitee recognize the validity or existence of any of such alleged Title Defects, nor is there any recognition, express or implied, by the execution of this Agreement that any of such alleged Title Defects affect, burden or encumber the Assets described in Exhibit A hereto. Each of the parties reserve the right to contest with each other and/or with third parties the validity, existence or effect of any or all of said alleged Title Defects in accordance with the terms of the Purchase and Sale Agreement, and Indemnitor’s obligations hereunder are subject to such reserved right.

1

2. Indemnity. Of even date herewith, Indemnitor has executed and delivered to Indemnitee a document entitled Assignment and Bill of Sale conveying the Assets to be filed in certain counties/parishes in ______________. Notwithstanding any provision of the Purchase and Sale Agreement or any of the assignments or conveyances delivered at or subsequent to the Closing, but subject to paragraph 1 above, Indemnitor agrees to defend, indemnify and hold Indemnitee harmless against all Liabilities arising out of the alleged Title Defects described in Exhibit A, subject to the following conditions:

(a) If Indemnitor has disputed Indemnitee’s assertion of an alleged Title Defect in accordance with the Purchase and Sale Agreement and Indemnitee’s assertion of such alleged Title Defect is determined to be invalid, incorrect or not in compliance with the requirements of the Purchase and Sale Agreement, then Indemnitor’s obligations under this Agreement shall not cover or apply to the portion of such alleged Title Defect that is determined to be invalid, incorrect or not in compliance with the requirements of the Purchase and Sale Agreement.

(b) The indemnity provided for herein by Indemnitor shall be the sole and exclusive recourse and remedy of Indemnitee with respect to the alleged Title Defects described on Exhibit A. All claims for indemnification by Indemnitee under this Agreement must be asserted and resolved pursuant to Article 14.7 of the Purchase and Sale Agreement, as if this Agreement were part of the Purchase and Sale Agreement and Article 14.7 applied to this paragraph 2.

(c) In no event shall Indemnitor be liable to Indemnitee hereunder for any exemplary, punitive, special, indirect, consequential, remote or speculative damages.

3. Assignment. Notwithstanding anything herein to the contrary, neither this Agreement nor any rights, covenants, duties or obligations hereunder shall be assigned or transferred in any way whatsoever by Indemnitee except with the prior written consent of Indemnitor, which consent Indemnitor shall be under no obligation to grant, and any assignment, transfer or attempted assignment or transfer without such consent shall be void ad initio; provided, however, that Indemnitee may assign, in whole or in part, its rights under this Agreement with respect to any alleged Title Defect described on Exhibit A, or any portion thereof, to an assignee of its rights in any portion of the Assets affected by such alleged Title Defect.

4. Binding Agreement. Subject to the provisions of paragraph 3 above, this Agreement shall be binding on, and shall inure to the benefit of, Indemnitor and Indemnitee and their respective successors and assigns.

5. Governing Law. THIS AGREEMENT AND THE LEGAL RELATIONS AMONG THE PARTIES SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, EXCLUDING ANY CONFLICTS OF LAW RULE OR PRINCIPLE THAT MIGHT REFER CONSTRUCTION OF SUCH PROVISIONS TO THE LAWS OF ANOTHER JURISDICTION. ALL OF THE PARTIES HERETO CONSENT TO THE EXERCISE OF JURISDICTION IN PERSONAM BY THE COURTS OF THE STATE OF TEXAS FOR ANY ACTION ARISING OUT OF THIS AGREEMENT. ALL

2

ACTIONS OR PROCEEDINGS WITH RESPECT TO, ARISING DIRECTLY OR INDIRECTLY IN CONNECTION WITH, OUT OF, RELATED TO, OR FROM THIS AGREEMENT SHALL BE EXCLUSIVELY LITIGATED IN COURTS HAVING SITES IN HOUSTON, HARRIS COUNTY, TEXAS. EACH PARTY HERETO WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.

6. Severability. If any term, clause or provision of this Agreement is ever held illegal, invalid or unenforceable, the remainder of this Agreement shall not be affected, but shall remain in full force and effect in accordance with the terms hereof.

7. Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to constitute one and the same Agreement.

IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement as of the date first written above.

INDEMNITOR:

DEVON ENERGY PRODUCTION COMPANY, L.P.

____________________________________

By:_________________________________

Title:________________________________

INDEMNITEE:

_________________________________

By:_______________________________

Title:______________________________

DEVON LOUISANA CORPORATION

____________________________________

By:_________________________________

Title:________________________________

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ATTACHED TO AND MADE A PART OF THAT CERTAIN PURCHASE AND SALE AGREEMENT DATED JULY 22, 2005, BY AND BETWEEN DEVON ENERGY PRODUCTION COMPANY, L.P. AND DEVON LOUISIANA CORPORATION AND DEVON ENERGY PETROLEUM PIPELINE COMPANY AS SELLER, AND MARITECH RESOURCES, INC., AS BUYER

EXHIBIT D

ACCESS AGREEMENT

THIS ACCESS AGREEMENT (this “Agreement”), dated as of _________________, 2005, is entered into among Devon Energy Production Company, L.P., an Oklahoma limited partnership (“DEPC”) and Devon Louisiana Corporation, a Louisiana corporation (“DLC” and DEPC are collectively referred to as “Seller” and individually as a “Seller”), and __________________, a ________________ (“Buyer”). Capitalized terms used herein and not otherwise defined below or elsewhere in this Agreement shall have the meanings assigned to them in this Agreement, or, if not so assigned, as assigned to them in that certain Purchase and Sale Agreement dated as of _____________, 2005, by and among Seller and Buyer (the “Purchase and Sale Agreement”).

Recitals

WHEREAS, certain of the Activities may be undertaken by Seller or Seller’s Consultants in whole or in part after the Closing Date;

WHEREAS, it may be necessary for Seller and Seller’s Consultants to gain access to the Assets after the Closing to conduct and perform the Activities;

WHEREAS, Buyer desires to grant Seller and Seller’s Consultants access to the Assets in order that Seller may conduct and perform the Activities;

NOW, THEREFORE, in consideration of the purchase and sale as contemplated by the Purchase and Sale Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

Agreement

1. Definitions

1.1 Activities. The term “Activities” shall mean those investigation activities and Remediation actions reasonably necessary in the judgment of Seller to complete Remediation of any of the Assets required or permitted to be performed by Seller pursuant to Article 13.1(b)(ii) of the Purchase and Sale Agreement or otherwise agreed to in writing by Buyer, together with any activities incidental thereto.

1

1.2 Seller’s Consultant. The term “Seller’s Consultant” shall mean any and all agents, consultants or contractors retained by Seller to assist in conducting or performing the Activities and any employee, agent, contractor or subcontractor of a Seller’s Consultant.

2. Access. Subject to the terms of this Agreement, Buyer hereby grants Seller and Seller’s Consultants the right to enter upon the Assets for the purpose of conducting and performing the Activities (the “Access Right”). The Access Right shall be subject to the following conditions:

2.1 Scope. Neither Seller nor Seller’s Consultants shall engage in any activities on the Assets other than the Activities. Seller and Seller’s Consultants shall be entitled, subject to any third party restrictions, to (i) install and operate on the Assets any remediation system which constitutes a part of any Remediation and (ii) use, without cost to Seller or Seller’s Consultants, any utilities now or hereafter existing on the Assets as are reasonably needed in connection with the Activities.

2.2 Termination. This Access Right shall remain in full force and effect so long as Seller or any Seller’s Consultant is continuing to perform with reasonable diligence any Activities on the Assets pursuant to Article 13.1(b)(ii) of the Purchase and Sale Agreement.

2.3 Notice of Commencement. By at least 5:00 p.m. on the Business Day three (3) days before the date on which Seller intends to commence or cause Seller’s Consultants to commence to conduct or perform the initial Activities on any Asset, Seller shall notify Buyer in writing of the date on which such initial Activities are expected to commence.

2.4 Vehicles. Except insofar as reasonably necessary to carry out the Activities, all vehicles brought by Seller and Seller’s Consultants onto the Assets will be restricted to existing roadways, if any, on the Assets.

2.5 Compliance with Law. All Activities conducted or performed by Seller and Seller’s Consultants on the Assets shall be conducted and performed in material compliance with all applicable Laws, including Environmental Laws.

3. Indemnity. Seller shall defend, indemnify and hold harmless the Buyer Indemnified Parties from and against (i) all Liabilities of any Third Party to the extent such Liabilities are caused by or result from the acts or omissions of Seller or Seller’s Consultants in conducting or performing the Activities on the Assets, REGARDLESS OF FAULT, EXCEPTING ONLY ANY BUYER INDEMNIFIED PARTY’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, and (ii) all Liabilities for personal injury or property damage of any Buyer Indemnified Party to the extent same are caused by or result from any negligence or willful misconduct of Seller or Seller’s Consultants in conducting or performing the Activities on the Assets; provided, however, that Seller shall not be obligated to defend, indemnify or hold harmless any Buyer Indemnified Party under this clause (ii) for any Buyer Indemnified Party’s negligence or willful misconduct. Seller’s obligations under this Agreement shall be subject to the terms and provisions of Article 14.11 of the Purchase and Sale Agreement, as if this Agreement were part of the Purchase and Sale Agreement. All claims for defense, indemnification and hold harmless under this Article 3 shall be asserted and resolved under Article 14.7 of the Purchase and Sale Agreement as if this Agreement were part of the Purchase

2

and Sale Agreement and Article 14.7 applied to this Article 3. The terms and provisions of this Article 3 shall survive the termination of the Access Right.

4. Further Provisions

4.1 No Admissions. This Agreement is not an admission or acknowledgement, expressed or implied, of fault, responsibility or liability of any kind by Buyer or Seller under any Law, including any Environmental Law, for acts, omissions, obligations or events involving the presence, if any, of Hazardous Substances on or adjacent to the Assets.

4.2 Rights of Third Parties. This Agreement is for the sole benefit of (i) Buyer, Seller and their respective successors and assigns as permitted herein and (ii) Seller’s Consultants, and no other Person shall be entitled to enforce this Agreement, rely on any covenant or agreement contained herein, receive any rights hereunder or be a third party beneficiary of this Agreement. Any member of the Buyer Indemnified Parties that is a third party shall be defended, indemnified and held harmless under the terms of this Agreement only to the extent that Buyer expressly elects to exercise such right of defense, indemnity and hold harmless on behalf of such third party member of the Buyer Indemnified Parties; and no party shall have any direct liability or obligation to any third party member of the Buyer Indemnified Parties or be liable to any third party member of the Buyer Indemnified Parties for any election or non-election or any act or failure to act under or in regard to any term of this Agreement. Any claim for defense, indemnity or hold harmless hereunder on behalf of a member of the Buyer Indemnified Parties must be made and administered by Buyer.

4.3 Notices. All notices which are required or may be given pursuant to this Agreement shall be sufficient in all respects if given in writing and delivered as permitted under Article 16.6 of the Purchase and Sale Agreement.

4.4 Binding Agreement. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns; provided, however, that the rights and obligations of Seller shall not be assignable or delegable by Seller (other than by Seller to Seller’s Consultants) without the express written consent of Buyer.

4.5 Governing Law. THIS AGREEMENT AND THE LEGAL RELATIONS AMONG THE PARTIES SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, EXCLUDING ANY CONFLICTS OF LAW RULE OR PRINCIPLE THAT MIGHT REFER CONSTRUCTION OF SUCH PROVISIONS TO THE LAWS OF ANOTHER JURISDICTION. ALL OF THE PARTIES HERETO CONSENT TO THE EXERCISE OF JURISDICTION IN PERSONAM BY THE COURTS OF THE STATE OF TEXAS FOR ANY ACTION ARISING OUT OF THIS AGREEMENT. ALL ACTIONS OR PROCEEDINGS WITH RESPECT TO, ARISING DIRECTLY OR INDIRECTLY IN CONNECTION WITH, OUT OF, RELATED TO, OR FROM THIS AGREEMENT SHALL BE EXCLUSIVELY LITIGATED IN COURTS HAVING SITES IN HOUSTON, HARRIS COUNTY, TEXAS. EACH PARTY HERETO WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.

3

4.6 Severability. If any term, clause or provision of this Agreement is ever held illegal, invalid or unenforceable, the remainder of this Agreement shall not be affected, but shall remain in full force and effect in accordance with the terms hereof.

4.7 Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to constitute one and the same Agreement.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement in multiple counterparts as of the date first above written.

SELLER:

DEVON ENERGY PRODUCTION COMPANY, L.P.

By: _________________________

Name: _________________________

Title:_________________________

DEVON LOUISIANA CORPORATION

By: _________________________

Name: _________________________

Title: _________________________

BUYER:

_________________________

By: _________________________

Name: _________________________

Title: _________________________

4

ATTACHED TO AND MADE A PART OF THAT CERTAIN PURCHASE AND SALE AGREEMENT DATED JULY 22, 2005, BY AND BETWEEN DEVON ENERGY PRODUCTION COMPANY, L.P. AND DEVON LOUISIANA CORPORATION AND DEVON ENERGY PETROLEUM PIPELINE COMPANY AS SELLER, AND MARITECH RESOURCES, INC., AS BUYER

EXHIBIT G

DEEP RIGHTS OPERATING AGREEMENT

DEVON OFFSHORE OPERATING AGREEMENT

Dated

_______________________________

By and Between

DEVON ENERGY PRODUCTION COMPANY, L.P.

Or

DEVON LOUISIANA CORPORATION,

as Operator

&

_______________________________

as

NON-OPERATOR

Lease

_________ Block ___, OCS-G ______

Offshore ___________

OFFSHORE OPERATING AGREEMENT

TABLE OF CONTENTS

Section

Page

Preliminary Recitals

ARTICLE 1

APPLICATION

9

1.1

Application to Each Lease

9

ARTICLE 2

DEFINITIONS

2.1

Authorization for Expenditure (AFE)

9

2.2

Development Operations

9

2.3

Development Well

10

2.4

Exploratory Operations

10

2.5

Exploratory Well

10

2.6

Facilities

10

2.7

Lease

10

2.8

Lease Saving Operation

10

2.9

Non-Consent Operations

10

2.10

Non-Consent Platform

10

2.11

Non-Consent Well

10

2.12

Non-Operator

10

2.13

Non-Participating Party

10

2.14

Non-Participating Party's Share

10

2.15

Operator

10

2.16

Participation Interest

10

2.17

Participating Party

10

2.18

Platform

10

2.19

Producible Well

11

2.20

Producible Reservoir

11

2.21

Working Interest

11

ARTICLE

EXHIBITS

3.1

Exhibits

11

3.1.1 Exhibit "A": Description of Leases, Interests of the Parties, and Designated Representatives

11

3.1.2 Exhibit "B": Insurance Requirements

11

3.1.3 Exhibit "C": Accounting Procedure

11

Page 2 of 84

3.1.4 Exhibit "D": Equal Opportunity

11

3.1.5 Exhibit "E": Gas Balancing Agreement

11

3.1.6 Exhibit "F": Memorandum of Joint Operating Agreement

11

ARTICLE 4

OPERATOR

4.1

Operator

11

4.2

Resignation

11

4.3

Removal of Operator

12

4.4

Selection of Successor

12

4.5

Delivery of Property

12

ARTICLE 5

AUTHORITY AND DUTIES OF OPERATOR

5.1

Exclusive Right to Operate

12

5.2

Workmanlike Conduct

13

5.3

Liens and Encumbrances

13

5.4

Employees

13

5.5

Records

13

5.6

Compliance

13

5.7

Drilling

13

5.8

Reports

14

5.9

Information to Participating Parties

14

5.10

Information to Non-Participating Parties

14

ARTICLE 6

VOTING AND VOTING PROCEDURES

6.1

Designation of Representatives

14

6.2

Voting Procedures

15

6.2.1 Voting Interest

15

6.2.2 Vote Required

15

6.2.3 Votes

15

6.2.4 Meetings

15

ARTICLE 7

ACCESS

7.1

Access to Lease

15

7.3

Confidentiality

15

7.4

Limited Disclosure

16

7.5

Affiliates

16

Page 3 of 84

ARTICLE 8

EXPENDITURES

8.1

Basis of Charge to the Parties

16

8.2

Authorization

17

8.3

Advance Billings

17

8.4

Commingling of Funds

17

8.5

Security Rights

17

8.6

Unpaid Charges

19

8.7

Default

19

ARTICLE 9

NOTICES

9.1

Giving and Receiving Notices

19

9.2

Content of Notice

20

9.3

Response to Notices

20

9.3.1 Platform Construction

20

9.3.2 Proposal without Platform

20

9.4

Failure to Respond

20

ARTICLE 10

EXPLORATORY WELLS

10.1

Operations by all Parties

20

10.2

Second Opportunity to Participate

21

10.3

Final Election to Participate

21

10.4

Operations by Fewer than all Parties

21

10.4.1 First Exploratory Well

21

10.4.2 Subsequent Exploratory Wells

22

10.4.3 Form of Assignment

22

10.5

Course of Action After Drilling to Initial Objective Depth

22

10.5.1 Election by Non-Participating Parties

22

10.5.2 Plugging and Abandoning

23

10.5.3 Approval to Conduct Operation

23

10.5.4 Failure to Agree

23

10.5.5 Election by Non-Participating Parties

24

10.5.6 Plugging and Abandoning Cost

24

ARTICLE 11

DEVELOPMENT WELL OPERATIONS

11.1

Operations by all Parties

24

11.2

Second Opportunity to Participate

24

11.3

Final Election to Participate

24

11.4

Operations by Fewer than all Parties

25

Page 4 of 84

11.5

Course of Action After Drilling to Initial Objective Depth

25

11.5.1 Operator's Recommendation

25

11.5.2 Response to Operator's Recommendation

25

11.5.3 Approval to Conduct Operation

26

11.5.4 Failure to Agree

26

11.5.5 Plugging and Abandoning Cost

26

11.6

Timely Operations

26

11.7

Deeper Drilling

26

ARTICLE 12

NON-CONSENT OPERATIONS

12.1

Operations by Fewer than All Parties

27

12.1.1 Non-Interference

27

12.1.2 Multiple Completion Limitation

27

12.1.3 Meeting

27

12.1.4 Non-Consent Well

27

12.1.5 Cost Information

27

12.1.6 Completions

28

12.2

Forfeiture of Interest

28

12.2.1 Production Reversion Penalties

28

12.2.2 Reversion of Rights to Production

29

12.2.3 Failure to Recoup Penalties

29

12.3

Deepening of Non-Consent Development Wells

29

12.4

Operations from Non-Consent Platforms

29

12.5

Discovery or Extension from Mobile Drilling Operations

29

12.6

Allocation of Platform Costs to Non-Consent Operations

30

12.6.1 Charge

30

12.6.2 Operating and Maintenance Charges

31

12.6.3 Payments

31

12.7

Non-Consent Drilling or Activity to Maintain Lease

31

12.8

Retention of Lease by Non-Consent Well

31

12.9

Allocation of Each Lease Separately

31

12.10

Allocation of Costs Between Zones (Single Completions)

31

12.11

Allocation of Costs Between Zones (Multiple Completions)

32

12.12

Allocation of Costs Between Zones (Dry Hole)

32

12.13

Intangible Drilling and Completion Cost Allocations

33

ARTICLE 13

FACILITIES

13.1

Approval

33

13.2

Contracts

33

13.3

Use of Platform and Facilities for Lease Production

33

13.3.1 Platform and Facilities Terms of Use

33

Page 5 of 84

ARTICLE 14

ABANDONMENT AND SALVAGE

14.1

Platform Salvage and Removal Costs

34

14.2

Abandonment and Production Well

34

14.3

Assignment of Interest

34

14.4

Abandonment Operations Required by Governmental Authority

35

ARTICLE 15

WITHDRAWAL

15.1

Right to Withdrawal

35

15.2

Response to Withdrawal

35

15.3

Unanimous Withdrawal

35

15.4

Acceptance of Withdrawing Interests

35

15.5

Limitation Upon and Conditions of Withdrawal

36

Schedule 4.14	Current Commitments
Schedule 4.15	Environmental
Schedule 4.16	Production Taxes
Schedule 6.1	Conduct of Business
Schedule 14.1	Retained Litigation

Section			Page
Preliminary Recitals
ARTICLE 1
APPLICATION			9
	1.1	Application to Each Lease	9

ARTICLE 2
DEFINITIONS
	2.1	Authorization for Expenditure (AFE)	9
	2.2	Development Operations	9
	2.3	Development Well	10
	2.4	Exploratory Operations	10
	2.5	Exploratory Well	10
	2.6	Facilities	10
	2.7	Lease	10
	2.8	Lease Saving Operation	10
	2.9	Non-Consent Operations	10
	2.10	Non-Consent Platform	10
	2.11	Non-Consent Well	10
	2.12	Non-Operator	10
	2.13	Non-Participating Party	10
	2.14	Non-Participating Party's Share	10
	2.15	Operator	10
	2.16	Participation Interest	10
	2.17	Participating Party	10
	2.18	Platform	10
	2.19	Producible Well	11
	2.20	Producible Reservoir	11
	2.21	Working Interest	11

ARTICLE
EXHIBITS
	3.1	Exhibits	11
		3.1.1 Exhibit "A": Description of Leases, Interests of the Parties, and Designated Representatives	11
		3.1.2 Exhibit "B": Insurance Requirements	11
		3.1.3 Exhibit "C": Accounting Procedure	11

		3.1.4 Exhibit "D": Equal Opportunity	11
		3.1.5 Exhibit "E": Gas Balancing Agreement	11
		3.1.6 Exhibit "F": Memorandum of Joint Operating Agreement	11

ARTICLE 4
OPERATOR
	4.1	Operator	11
	4.2	Resignation	11
	4.3	Removal of Operator	12
	4.4	Selection of Successor	12
	4.5	Delivery of Property	12

ARTICLE 5
AUTHORITY AND DUTIES OF OPERATOR
	5.1	Exclusive Right to Operate	12
	5.2	Workmanlike Conduct	13
	5.3	Liens and Encumbrances	13
	5.4	Employees	13
	5.5	Records	13
	5.6	Compliance	13
	5.7	Drilling	13
	5.8	Reports	14
	5.9	Information to Participating Parties	14
	5.10	Information to Non-Participating Parties	14

ARTICLE 6
VOTING AND VOTING PROCEDURES
	6.1	Designation of Representatives	14
	6.2	Voting Procedures	15
		6.2.1 Voting Interest	15
		6.2.2 Vote Required	15
		6.2.3 Votes	15
		6.2.4 Meetings	15

ARTICLE 7
ACCESS
	7.1	Access to Lease	15
	7.3	Confidentiality	15
	7.4	Limited Disclosure	16
	7.5	Affiliates	16

ARTICLE 8
EXPENDITURES
	8.1	Basis of Charge to the Parties	16
	8.2	Authorization	17
	8.3	Advance Billings	17
	8.4	Commingling of Funds	17
	8.5	Security Rights	17
	8.6	Unpaid Charges	19
	8.7	Default	19

ARTICLE 9
NOTICES
	9.1	Giving and Receiving Notices	19
	9.2	Content of Notice	20
	9.3	Response to Notices	20
		9.3.1 Platform Construction	20
		9.3.2 Proposal without Platform	20
	9.4	Failure to Respond	20

ARTICLE 10
EXPLORATORY WELLS
	10.1	Operations by all Parties	20
	10.2	Second Opportunity to Participate	21
	10.3	Final Election to Participate	21
	10.4	Operations by Fewer than all Parties	21
		10.4.1 First Exploratory Well	21
		10.4.2 Subsequent Exploratory Wells	22
		10.4.3 Form of Assignment	22
	10.5	Course of Action After Drilling to Initial Objective Depth	22
		10.5.1 Election by Non-Participating Parties	22
		10.5.2 Plugging and Abandoning	23
		10.5.3 Approval to Conduct Operation	23
		10.5.4 Failure to Agree	23
		10.5.5 Election by Non-Participating Parties	24
		10.5.6 Plugging and Abandoning Cost	24

ARTICLE 11
DEVELOPMENT WELL OPERATIONS
	11.1	Operations by all Parties	24
	11.2	Second Opportunity to Participate	24
	11.3	Final Election to Participate	24
	11.4	Operations by Fewer than all Parties	25

	11.5	Course of Action After Drilling to Initial Objective Depth	25
		11.5.1 Operator's Recommendation	25
		11.5.2 Response to Operator's Recommendation	25
		11.5.3 Approval to Conduct Operation	26
		11.5.4 Failure to Agree	26
		11.5.5 Plugging and Abandoning Cost	26
	11.6	Timely Operations	26
	11.7	Deeper Drilling	26

ARTICLE 12
NON-CONSENT OPERATIONS
	12.1	Operations by Fewer than All Parties	27
		12.1.1 Non-Interference	27
		12.1.2 Multiple Completion Limitation	27
		12.1.3 Meeting	27
		12.1.4 Non-Consent Well	27
		12.1.5 Cost Information	27
		12.1.6 Completions	28
	12.2	Forfeiture of Interest	28
		12.2.1 Production Reversion Penalties	28
		12.2.2 Reversion of Rights to Production	29
		12.2.3 Failure to Recoup Penalties	29
	12.3	Deepening of Non-Consent Development Wells	29
	12.4	Operations from Non-Consent Platforms	29
	12.5	Discovery or Extension from Mobile Drilling Operations	29
	12.6	Allocation of Platform Costs to Non-Consent Operations	30
		12.6.1 Charge	30
		12.6.2 Operating and Maintenance Charges	31
		12.6.3 Payments	31
	12.7	Non-Consent Drilling or Activity to Maintain Lease	31
	12.8	Retention of Lease by Non-Consent Well	31
	12.9	Allocation of Each Lease Separately	31
	12.10	Allocation of Costs Between Zones (Single Completions)	31
	12.11	Allocation of Costs Between Zones (Multiple Completions)	32
	12.12	Allocation of Costs Between Zones (Dry Hole)	32
	12.13	Intangible Drilling and Completion Cost Allocations	33

ARTICLE 13
FACILITIES
	13.1	Approval	33
	13.2	Contracts	33
	13.3	Use of Platform and Facilities for Lease Production	33
		13.3.1 Platform and Facilities Terms of Use	33

ARTICLE 14
ABANDONMENT AND SALVAGE
	14.1	Platform Salvage and Removal Costs	34
	14.2	Abandonment and Production Well	34
	14.3	Assignment of Interest	34
	14.4	Abandonment Operations Required by Governmental Authority	35

ARTICLE 15
WITHDRAWAL
	15.1	Right to Withdrawal	35
	15.2	Response to Withdrawal	35
	15.3	Unanimous Withdrawal	35
	15.4	Acceptance of Withdrawing Interests	35
	15.5	Limitation Upon and Conditions of Withdrawal	36