ASSET PURCHASE AND SALE AGREEMENT

a.   Oil and Gas Leases .  The oil, gas and mineral leases and the leasehold estates created thereby, described on Schedule 1(a) hereto (undeveloped acreage) and 1(b) hereto (producing properties) hereto (collectively, the “Leases”), insofar as the Leases cover and relate to the land and depths described therein (the “Lands”), together with corresponding interests in and to all the property and rights incident thereto, including pooled or unitized acreage by virtue of the Lands being a part thereof, all production from the pool or unit allocated to any such Lands, and all interests in any Wells (as defined in Section 1(b) hereof) within the pool or unit associated with the Lands;

b.   Wells .  All producing, non-producing and shut-in oil and gas wells, injection wells and water wells located on the Lands, or lands pooled or unitized therewith, which wells are described in Schedule 1(b) hereto (collectively, the “Wells”), and all personal property, equipment, fixtures, pipelines and improvements located on and appurtenant to the Lands or Wells insofar as they are used or were obtained in connection with the operation of the Wells or Leases or relate to the exploration for, development, production, treatment, transportation, sale or disposal of hydrocarbons or water produced therefrom or attributable thereto, but expressly not including any vehicles nor any other property not affixed to one of the Wells;

a.   Organization .  Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of Texas and is qualified or registered as a foreign entity in each jurisdiction where it is required to be so qualified and registered except where the failure to so qualify would not have a material adverse effect on the Seller’s ownership, operation or value of the Assets.

b.   Authority .   Seller has full power and authority to enter into this Agreement and to perform Seller’s obligations under this Agreement.  Neither the execution and delivery of this Agreement nor the performance by Seller of its obligations hereunder will (i) violate Seller’s Articles of Organization, (ii) violate or constitute a default under any law, regulation, contract, agreement, consent decree or judicial order by which Seller or any of its officers, members or partners are bound or (iii) result in the creation of any Title Defect upon the Assets.

c.   Enforceability .  This Agreement has been duly executed and delivered by the Seller and constitutes the legal, valid and binding obligation of Seller enforceable in accordance with its terms, except as limited by bankruptcy or other laws applicable generally to creditor’s rights and as limited by general equitable principles.  At the Closing, all documents required hereunder to be executed and delivered by Seller and shall constitute the legal, valid and binding obligations of Seller enforceable in accordance with their respective terms, except as limited by bankruptcy or other laws applicable generally to creditor’s rights and as limited by general equitable principles.

d.   Contracts .  Schedule 1(c) contains a list of all material contracts affecting the Assets in Seller’s possession or to which Seller is aware the Assets are subject.  Seller has received no notice of its material default under any of such contracts.  Such contracts are in full force and effect and have not been modified or amended to any material extent subsequent to the date hereof.

e.   Litigation and Claims .  Except as described on Schedule 3(f), no claim, demand, filing, cause of action, administrative proceeding, lawsuit or other litigation is pending or, to Seller’s knowledge, threatened with respect to Seller or the Assets that could now or hereafter materially adversely affect the ownership, operation or value of the Assets.

f.   Finder’s Fees.   Seller has not incurred any liability, contingent or otherwise, for brokers’ or finders’ fees in respect to this transaction for which Buyer shall have any responsibility whatsoever.

g.   Compliance with Laws.   Seller has no actual knowledge, and has not received any notice from any federal, state or municipal authority that the Assets or Seller’s use thereof in its business, are not in material compliance with all laws, rules, regulations and permits relating to the Assets except for such non-compliance and violations which, individually or in the aggregate, would not have a material adverse effect on the ownership, operation or value of the Assets.  Seller will promptly notify Buyer upon receipt of any such notice.

h.   Title .  Seller owns the Assets free and clear of all liens and encumbrances (except as disclosed in the Schedules hereto) arising by, through or under Seller; provided however that Seller is not making any warranty as to the accuracy of the working interests, net working interests, net revenue interests or allocated values set forth on Schedule 1b or Schedule 2. The Transfer Documents contemplated in Section 6(d) shall be conveyed by Seller to Buyer with covenants of limited warranty against claims and demands of all persons lawfully claiming the same by, through, or under Seller, but not otherwise related to the title to the Wells and Leases, subject to the limitations of such warranty set forth in Section 13, but such Transfer Documents shall be made without any warranty of title, either express or implied, with respect to any personal property and equipment, and with respect to such personal property and equipment the Transfer Documents shall be made on an “as is” “where is” basis with all faults.

i.   Environmental Issues .  To the best of its knowledge, Seller has complied in all material respects with all Environmental Laws (as defined below) and with the terms of all permits, licenses, orders, decrees and agreements thereunder.  Seller is not aware of, and has not received notice from any person or entity asserting or alleging (i) any non-compliance with the Environmental Laws by Seller relating to the operation and ownership of the Assets; (ii) any liability in connection with the release, spill, discharge, storage, disposal or presence of any pollutants, contaminations, chemicals, industrial, toxic or hazardous substances or wastes, petroleum, petroleum products or wastes and natural gas by-products, liquids or wastes (collectively, “Hazardous Materials”), including but not limited to liability under the federal Comprehensive Environmental Response, Compensation and Liability Act or similar state “Superfund” laws, relating in any way to the Assets; or (iii) the release, discharge or presence of any Hazardous Materials at, on, under or from any of the Assets requiring cleanup or other remedial action pursuant to the Environmental Laws.  For purposes of this agreement, Environmental Laws shall include the Comprehensive Environmental Response, Compensation and Liability Act of 2980, as amended (42 U.S.C. & 6091 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. & 1401-7401 et. seq. ) as amended, The Clean Air Act amendments of 1990, and any other applicable federal, state or local law.  Notwithstanding the foregoing, the parties acknowledge that oil and gas assets of the nature of the Assets routinely contain some quantities of oil, brine or other materials and that the presence of such materials in such locations and quantities as are routinely found on or near Appalachian Basin oil and gas properties is not a violation of any warranty or other provision of this Agreement.

j.   Financial Data .   To Seller’s knowledge, all financial data provided by Seller to Buyer relating to the Assets is true and accurate in all material respects.

k.   No AFE Items or Well Abandonment .  Seller has incurred no expenses, and has made no commitments to make expenditures, in connection with (and no other obligations or liabilities have been incurred which would adversely affect) the ownership or operation of the Assets since December 1, 2008, other than routine expenses incurred in the normal operation of the same.  Seller has not abandoned any wells (or removed any material items of equipment, except those replaced by items of equal suitability and value) since December 1, 2008.  No proposals are currently outstanding (whether made by Seller or by any other party) to deepen, plug back, or rework any existing wells, to conduct other operations for which consent is required under the applicable operating agreements, or to conduct any other operations other than normal operation of existing wells constituting the Assets.

l.   Gas Balancing.  Take or Pay.   There is no well included within the definition of the Assets with respect to which Seller and its predecessors in title have collectively taken more (referred to herein as “over-produced”) or less (referred to herein as “under-produced”) production from such well than the ownership of Seller and such predecessors in such property would entitle Seller and such predecessors (absent any gas balancing agreement or arrangement) to receive; there exist no gas balancing arrangements or agreements whereby over production from wells not located on the Assets can be balanced with production from the Assets.  Neither Seller, nor to Seller’s knowledge any other party, has received prepayments (including, but not limited to, payments for gas not taken pursuant to “take-or-pay” arrangements) for any oil or natural gas produced from the Assets (or other properties) as a result of which the obligation exists to deliver oil or natural gas produced from the assets after the Closing Date without then receiving payment (or without then receiving full payment) therefor or to make repayments in cash.

m.   Permits.   To the extent Seller is the operator of an Asset, to the best of its knowledge Seller has all material governmental licenses and permits necessary or appropriate to own and operate the Asset as presently being owned and operated, and such licenses, permits and filings are in full force and effect (and are transferable by Seller), and Seller has not received written notice of any material violations in respect of any such licenses or permits.  To the extent that Seller is not the operator of an Asset, to the best of Seller’s knowledge, the operator of the Asset has all material governmental licenses and permits necessary or appropriate to own and operate the Asset as presently being owned and operated, and such licenses, permits and filings are in full force and effect, and Seller has not received written notice of any material violations in respect of any such licenses or permits.

n.   No Material Adverse Change . Since the date of this Agreement, to the best of Seller’s knowledge there shall have been no material adverse changes in the conditions of any of the Assets except normal production, depreciation of equipment through ordinary wear and tear and other events or conditions approved in writing by Buyer on the Closing Date.

a.   Organization .  Buyer is a Nevada corporation duly organized, validly existing and in good standing under the laws of the state of Nevada.

b.   Authority and Ability .  Buyer has full power and authority and has taken all requisite action, corporate or otherwise, to authorize Buyer to carry on Buyer’s business as presently conducted, to enter into this Agreement, to purchase the Assets on the terms described in this Agreement and to perform its obligations under this Agreement.  Neither the execution and delivery of this Agreement nor the performance by Buyer of its obligations hereunder will (i) violate Buyer’s Articles of Incorporation or Bylaws or (ii) violate or constitute a default under any law, regulation, contract, agreement, consent decree or judicial order by which Buyer or any of its directors, officers or shareholders are bound. Buyer has the financial ability and available credit to be able to perform all of its obligations under this Agreement.

c.   Enforceability .  This Agreement has been duly executed and delivered on behalf of Buyer and constitutes the legal, valid and binding obligation of Buyer enforceable in accordance with its terms except as limited by bankruptcy or other laws applicable generally to creditor’s rights and as limited by general equitable principles.  At the Closing, all documents required hereunder to be executed and delivered by Buyer shall be duly authorized, executed and delivered and shall constitute legal, valid and binding obligations of Buyer enforceable in accordance with their respective terms, except as limited by bankruptcy or other laws applicable generally to creditor’s rights and as limited by general equitable principles.

d.   Status of Buyer .  Buyer represents that by reason of its knowledge and experience in the evaluation, acquisition, and operation of oil and gas properties, Buyer has performed, or will perform before Closing, a due diligence review of the Assets and will have evaluated the merits and risks of purchasing the Assets from Seller and has formed an opinion as to the value and purchase of the Assets based solely on Buyer’s knowledge and experience and not on any representations or warranties by Seller except as otherwise provided in this Agreement  Buyer is acquiring the Assets for its own account and without a view to the distribution thereof within the meaning of the Securities Act of 1933, as amended.

e.   Finder’s Fees .  Buyer has not incurred any liability, contingent or otherwise, for brokers’ or finders’ fees in respect to this transaction for which Seller shall have any responsibility whatsoever.

     5.        Covenants of Seller .

a.   Conduct of Business Pending Closing .  Seller covenants that from the date hereof to the Closing Date, Seller will:

i.   Ordinary Course of Business, etc .  Not (A) act in any manner with respect to the Assets other than in the normal, usual and customary manner, consistent with prior practice; (B) dispose of, encumber or relinquish any of the Assets (other than in the ordinary course of business or as a result of the expiration of Leases or other agreements or contracts that Seller has no right or option to renew); (C) waive, compromise or settle any material right or claim with respect to any of the Assets; (D) commit to or make capital or workover expenditures with respect to the Assets in an amount which exceeds $10,000 without Buyer's consent, except when required by an emergency when there shall have been insufficient time to obtain advance consent; (E) abandon any Well unless required to do so by a governmental or regulatory agency or (F) modify or terminate any Lease or other material agreement or contract.

ii.   Permits, etc .  Cooperate with Buyer in the notification of all applicable governmental regulatory authorities of the transactions contemplated hereby and cooperate with Buyer in obtaining the issuance by each such authority of such permits, licenses and authorizations as may be necessary for Buyer to own and operate the Assets following the consummation of the transactions contemplated by this Agreement.

iii.   Preferential Rights and Consents .  Use commercially reasonable efforts, consistent with industry practices in transactions of this type, to identify, with respect to all material Assets, (i) all Pref Rights and requirements that Consents be obtained which would be applicable to the transactions contemplated hereby and (ii) the names and addresses of parties holding such rights; in attempting to identify such Pref Rights and Consents, and the names and addresses of such parties holding the same, Seller shall in no event be obligated to go beyond its own records. Seller will request from the parties so identified (and in accordance with the documents creating such Pref Rights and Consents), execution of Consents and/or waivers of Pref Rights so identified.

b.   Access .  Seller, shall afford to Buyer and its authorized representatives reasonable access, at Buyer’s sole risk and expense, from the date hereof until the Closing Date during normal business hours, to (i) the Assets operated by Seller, provided, however, that Buyer shall indemnify and hold harmless Seller from and against any and all Damages (as defined in Section 14 hereo