GMX RESOURCES INC. $105,000,000 5.00% SENIOR CONVERTIBLE NOTES DUE 2013 PURCHASE AGREEMENT

Exhibit 10.1

GMX RESOURCES INC.

$105,000,000

5.00% SENIOR CONVERTIBLE NOTES DUE 2013

PURCHASE AGREEMENT

February 11, 2008

Jefferies & Company, Inc.
     As Representative of the several Initial Purchasers
520 Madison Avenue, 10th Floor
New York, New York 10022

Ladies and Gentlemen:

GMX Resources Inc. , an Oklahoma corporation (the “Company” ), proposes, subject to the terms and conditions stated herein, to issue and sell to the Initial Purchasers named in Schedule I hereto (each an “ Initial Purchaser ” and collectively, the “ Initial Purchasers ”), for whom Jefferies & Company, Inc. is acting as representative (in such capacity, the “Representative”), $105,000,000 principal amount of its 5.00% Senior Convertible Notes Due 2013 (the “Initial Securities” ). In addition, the Company has granted to the Initial Purchasers an option to purchase up to an additional $20,000,000 in aggregate principal amount of its 5.00% Senior Convertible Notes Due 2013 (the “ Optional Securities ” and, together with the Initial Securities, the “ Securities ”). To the extent there are no additional parties listed in Schedule I hereto other than you, the term Representative as used herein shall mean you as the Initial Purchaser and the terms Representative and Initial Purchasers shall mean either the singular or plural as the context requires.

The Securities will be convertible on the terms, and subject to the conditions, set forth in the Indenture (as defined below). As used herein, “ Conversion Shares ” means the shares of common stock, par value $0.001 per share, of the Company (the “ Common Stock ”) to be received by the holders of the Securities upon conversion of the Securities pursuant to the terms of the Indenture. The shares of Common Stock also evidence rights (“ Rights ”) to purchase Series A Junior Participating Preferred Stock of the Company to the extent provided in the Rights Agreement dated May 17, 2005 (the “ Rights Agreement ”) by and between the Company and ComputerShare Limited, as successor Rights Agent.

The Securities are to be issued pursuant to an indenture (the “ Indenture ”) dated as of the Closing Date (as defined in Section 4 hereto), between the Company and The Bank of New York Trust Company, N.A., as trustee (the “ Trustee ”).

The holders of the Securities will be entitled to the benefits of a resale registration rights agreement (the “ Registration Rights Agreement ”), to be dated as of the Closing Date, between the Company and the Initial Purchasers, pursuant to which the Company will agree to register the Securities and the Conversion Shares for resale on a shelf registration statement pursuant to Rule 415 under the Securities Act of 1933, as amended (the “ Securities Act ”), subject to the terms and conditions therein specified.

Concurrently with the offering of the Securities, the Company is offering up to an aggregate of 2,140,000 shares of Common Stock (the “ Equity Offering ”) pursuant to a share lending agreement with an affiliate of the Representative, pursuant to which the Company will lend shares of its common stock to such affiliate (the “ Share Lending Agreement ”).

The Company understands that the Initial Purchasers propose to make an offering of the Securities as soon as the Representative deems advisable after this Agreement has been executed and delivered.

The sale of the Securities to the Initial Purchasers will be made without registration of the Securities or the Conversion Shares under the Securities Act in reliance upon exemptions from the registration requirements of the Securities Act.

1.  Offering Documents . The Company has prepared and delivered to the Initial Purchasers copies of a preliminary offering memorandum dated February 4, 2008 (the “ Preliminary Offering Memorandum ”) and promptly after the execution of this Agreement, the Company will prepare and deliver to the Initial Purchasers, on the date hereof or the next succeeding day, copies of a final offering memorandum, dated February 11, 2008 (the “ Final Offering Memorandum ”).

Any reference herein to the Time of Sale Disclosure Package (as defined below), the Preliminary Offering Memorandum or the Final Offering Memorandum shall be deemed to mean and include all such financial statements and schedules and other information which are incorporated by reference in the Time of Sale Disclosure Package, the Preliminary Offering Memorandum or the Final Offering Memorandum as of the date of such Time of Sale Disclosure Package, Preliminary Offering Memorandum or Final Offering Memorandum, as the case may be; and any reference to “amend,” “amendment” or “supplement” with respect to the Preliminary Offering Memorandum or the Final Offering Memorandum shall be deemed to include any documents filed after such date and prior to the Closing Date under the Securities Exchange Act of 1934, as amended (the “Exchange Act” ), that are deemed to be incorporated therein by reference.

At 4:15 P.M. (New York City time) on the date hereof (the “Time of Sale” ), the Company had prepared the following information (collectively, the “Time of Sale Disclosure Package” ): (a) the Preliminary Offering Memorandum as amended and supplemented immediately prior to the Time of Sale, (b) the Pricing Term Sheet (as defined in Section 7) prepared pursuant to Section 7(b) hereof, and (c) any Supplemental Offering Materials (as defined in Section 6).

The Company hereby confirms that it has authorized the use of the Time of Sale Disclosure Package (and any constituent part thereof) and the Final Offering Memorandum in connection with the offer and sale of the Securities by the Initial Purchasers.

2.  Representations and Warranties . The Company represents and warrants to, and agrees with, the Initial Purchasers as set forth below in this Section 2.

(a) As of the date of the Final Offering Memorandum, as of the date of any amendment or supplement thereto, and as of the Closing Date (as defined below), the Final Offering Memorandum did not, and will not, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; except that the foregoing shall not apply to statements in or omissions from the Final Offering Memorandum made in reliance upon and in conformity with information relating to the Initial Purchasers furnished to the Company in writing by any Initial Purchaser through the Representative expressly for use in the Final Offering Memorandum, it being understood and agreed that the only such information furnished by any of the Initial Purchasers consists of the information described as such in Section 10(b) hereof.

(b) At the Time of Sale, the Time of Sale Disclosure Package did not, and at the Closing Date will not, contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; except that the foregoing shall not apply to statements in or omissions from the Time of Sale Disclosure Package made in reliance upon and in conformity with information relating to the Initial Purchasers furnished to the Company in writing by any Initial Purchaser through the Representative expressly for use in the Time of Sale Disclosure Package, it being understood and agreed that the only such information furnished by any of the Initial Purchasers consists of the information described as such in Section 10(b) hereof. No statement of material fact included in the Final Offering Memorandum has been omitted from the Time of Sale Disclosure Package and no statement of material fact included in the Time of Sale Disclosure Package has been omitted from the Final Offering Memorandum.

(c) Except as set forth in the Time of Sale Disclosure Package and the Final Offering Memorandum, the documents incorporated by reference in the Time of Sale Disclosure Package and in the Final Offering Memorandum, when they became effective or were filed with the Commission, as the case may be, conformed in all material respects to the requirements of the Securities Act or the Exchange Act, as applicable, and were filed on a timely basis with the Commission and none of such documents contained an untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; any further documents so filed and incorporated by reference in the Time of Sale Disclosure Package or in the Final Offering Memorandum, when such documents are filed with the Commission, will conform in all material respects to the requirements of the Exchange Act, and will not contain an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

(d) The Company and its Subsidiaries have been duly organized and are validly existing as corporations in good standing under the laws of the states or other jurisdictions in which they are incorporated, with full power and authority (corporate and other) to own, lease and operate their properties and conduct their businesses as described in each of the Time of Sale Disclosure Package and the Final Offering Memorandum and, with respect to the Company, to execute and deliver, and perform the Company’s obligations under, this Agreement, the Securities, the Registration Rights Agreement, the Indenture and the Share Lending Agreement; the Company and its Subsidiaries are duly qualified to do business as foreign corporations in good standing in each state or other jurisdiction in which their ownership or leasing of property or conduct of business legally requires such qualification, except where the failure to be so qualified, individually or in the aggregate, would not have a Material Adverse Effect. The term “Material Adverse Effect” as used herein means any material adverse effect on the condition (financial or other), net worth, business, affairs, management, results of operations or cash flow of the Company and its Subsidiaries, taken as a whole. The Company has no significant subsidiaries (as such term is defined in Rule 1-20(w) of Registration S-X promulgated by the Commission) other than those Subsidiaries listed on Exhibit A hereto (the “Subsidiaries”).

(e) All outstanding shares of capital stock of each Subsidiary have been duly and validly authorized and issued and are fully paid and nonassessable, and, except as otherwise set forth in the Time of Sale Disclosure Package and the Final Offering Memorandum, all outstanding shares of capital stock of the Subsidiaries are owned by the Company either directly or through wholly owned Subsidiaries free and clear of any perfected security interest or any other security interests, claims, liens or encumbrances.

(f) The Company’s authorized equity capitalization is as set forth in the Time of Sale Disclosure Package and the Final Offering Memorandum; the capital stock of the Company conforms in all material respects to the description thereof contained in the Time of Sale Disclosure Package and the Final Offering Memorandum; the Common Stock (including the Conversion Shares) conforms in all material respects to the description thereof contained in the Time of Sale Disclosure Package and the Final Offering Memorandum; the outstanding shares of Common Stock have been duly and validly authorized and issued and are fully paid and nonassessable; the holders of outstanding shares of capital stock of the Company are not entitled to preemptive or other rights to subscribe for the Securities or the Conversion Shares; and, except as set forth in the Time of Sale Disclosure Package and the Final Offering Memorandum, no options, warrants or other rights to purchase, agreements or other obligations to issue, or rights to convert any obligations into or exchange any securities for, shares of capital stock of or ownership interests in the Company are outstanding. The Rights Agreement has been duly authorized, executed and delivered by the Company and constitutes a valid and legally binding obligation of the Company enforceable against the Company in accordance with its terms, except as enforceability may be limited by the Enforceability Exceptions.

(g) Neither the Company nor any of its Subsidiaries has sustained since the date of the latest audited financial statements included or incorporated by reference in the Time of Sale Disclosure Package any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree other than as set forth in each of the Time of Sale Disclosure Package and the Final Offering Memorandum and, since the respective dates as of which information is given in the Time of Sale Disclosure Package, there has not been any change in the capital stock or long-term debt of the Company or any of its Subsidiaries or any Material Adverse Change, or any development involving a prospective Material Adverse Change, otherwise than as set forth in each of the Time of Sale Disclosure Package and the Final Offering Memorandum.

(h) The Company is not and, after giving effect to the offering and sale of the Shares, will not be an “investment company” or an entity “controlled” by an “investment company,” as such terms are defined in the Investment Company Act of 1940, as amended (the “1940 Act”).

(i) This Agreement has been duly authorized, executed and delivered by the Company.

(j) The Registration Rights Agreement has been duly authorized, and when executed and delivered by the Company and the Initial Purchasers, will constitute a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting enforcement of creditors’ rights generally and except as enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law) (the “ Enforceability Exceptions ”).

(k) The Indenture has been duly authorized by the Company and, when executed and delivered by the Company and the Trustee, will constitute a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except as the enforcement thereof may be limited by the Enforceability Exceptions.

(l) The Securities have been duly authorized and, on the Closing Date, will have been duly executed by the Company and, when authenticated, issued and delivered in the manner provided for in the Indenture and delivered against payment of the purchase price therefor as provided in this Agreement, will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as the enforcement thereof may be limited by the Enforceability Exceptions.

(m) The Share Lending Agreement has been duly authorized, executed and delivered by the Company and is a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except as the enforcement thereof may be limited by the Enforceability Exceptions.

(n) The Conversion Shares have been duly and validly authorized and reserved for issuance and, when issued and delivered in accordance with the provisions of the Securities and the Indenture, will be duly and validly issued, fully paid and nonassessable and will conform to the description of the Common Stock contained in the Time of Sale Disclosure Package and the Final Offering Memorandum.

(o) None of the Company, its Subsidiaries, its affiliates or any person acting on its or any of their behalf (other than the Initial Purchasers acting in their capacity as such) has engaged or will engage, in connection with the offering of Securities, in any form of general solicitation or general advertising within the meaning of Rule 502(c) under the Securities Act.

(p) The Securities and the Indenture will conform in all material respects to the respective statements relating thereto contained in the Time of Sale Disclosure Package and the Final Offering Memorandum.

(q) Each of the Company and its Subsidiaries is in possession of and is operating in compliance with all franchises, grants, authorizations, licenses, certificates, permits, easements, consents, orders and approvals (“Permits”) from all state, federal, foreign and other regulatory authorities, and has satisfied the requirements imposed by regulatory bodies, administrative agencies or other governmental bodies, agencies or officials, that are required for the Company and its Subsidiaries lawfully to own, lease and operate their properties and conduct their businesses as described in each of the Time of Sale Disclosure Package and the Final Offering Memorandum, and each of the Company and its Subsidiaries is conducting its business in compliance with all of the laws, rules and regulations of each jurisdiction in which it conducts its business, in each case with such exceptions, individually or in the aggregate, as would not have a Material Adverse Effect; each of the Company and its Subsidiaries has filed all notices, reports, documents or other information (“Notices”) required to be filed under applicable laws, rules and regulations, in each case, with such exceptions, individually or in the aggregate, as would not have a Material Adverse Effect; and, except as otherwise specifically described in each of the Time of Sale Disclosure Package and the Final Offering Memorandum, neither the Company nor any of its Subsidiaries has received any notification from any court or governmental body, authority or agency, relating to the revocation or modification of any such Permit or to the effect that any additional authorization, approval, order, consent, license, certificate, permit, registration or qualification (“Approvals”) from such regulatory authority is needed to be obtained by any of them, in any case where it is reasonably expected that obtaining such Approvals or the failure to obtain such Approvals, individually or in the aggregate, would have a Material Adverse Effect.

(r) The Company and its Subsidiaries have filed all necessary federal, state and foreign income and franchise tax returns required to be filed prior to the date hereof and paid all taxes shown as due thereon; all such tax returns are complete and correct in all material respects; all tax liabilities are adequately provided for on the books of the Company and its Subsidiaries except to such extent as would not have a Material Adverse Effect; the Company and its Subsidiaries have made all necessary payroll tax payments; and the Company and its Subsidiaries have no knowledge of any tax proceeding or action pending or threatened against the Company or its Subsidiaries that, individually or in the aggregate, might have a Material Adverse Effect.

(s) Except as described in each of the Time of Sale Disclosure Package and the Final Offering Memorandum, the Company and its Subsidiaries own or possess, or can acquire on reasonable terms, adequate patents, patent licenses, trademarks, service marks and trade names necessary to conduct the business now operated by them, and neither the Company nor any of its Subsidiaries has received any notice of infringement of or conflict with asserted rights of others with respect to any patents, patent licenses, trademarks, service marks or trade names that, individually or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a Material Adverse Effect.

(t) At the Closing, each of the Company and its Subsidiaries will have (i) good and Defensible (as defined below) title to all its interests in its producing natural gas and oil properties (including oil and gas wells, producing leasehold interests and appurtenant personal property) as described in the Time of Sale Disclosure Package and the Final Offering Memorandum as owned by it, (ii) investigated title in accordance with customary industry procedures prior to acquiring any non-producing leasehold properties (including undeveloped locations or leases held by production, and those leases not held by production and including exploration prospects) described in the Time of Sale Disclosure Package and the Final Offering Memorandum as owned by it, (iii) good and indefeasible title to its other real property as described in the Time of Sale Disclosure Package and the Final Offering Memorandum as owned by it and (iv) good title to its personal property as described in the Time of Sale Disclosure Package and the Final Offering Memorandum as owned by it, in each case free and clear of all liens, claims, security interests, equities, or other encumbrances except those (i) described in the Time of Sale Disclosure Package and the Final Offering Memorandum or (ii) that do not materially interfere with the use or value of such properties taken as a whole as described in the Time of Sale Disclosure Package and the Final Offering Memorandum. All real property and buildings held under lease or license by the Company or its Subsidiaries are held under valid and subsisting and enforceable leases or licenses with such exceptions as do not materially interfere with the use of such properties taken as a whole as they have been used in the past and are proposed to be used in the future as described in the Time of Sale Disclosure Package and the Final Offering Memorandum. As used herein, “Defensible” means, with respect to title to the producing properties (including oil and gas wells and producing leasehold interests) described in the Time of Sale Disclosure Package and the Final Offering Memorandum as being owned by the Company or its Subsidiaries, that the Company and its Subsidiaries (i) are entitled to receive not less than the net revenue interests of such properties as set forth in the reserve report of MHA Petroleum Consultants dated as of January 22, 2008 (the “Reserve Report”) of all hydrocarbons and minerals produced, saved and marketed from such properties, and proceeds thereof, all without reduction, suspension or termination of such interests throughout the productive life of such properties, and (ii) are obligated to bear a share of the costs and expenses relating to the maintenance, exploration, drilling, completion, development, operation, plugging and abandonment of such properties not greater than the working interests of such properties as set forth in the Reserve Report, without increase throughout the life of such properties.

(u) Except as described in each of the Time of Sale Disclosure Package and the Final Offering Memorandum, there is no pending action, suit or other proceeding involving the Company or any of its Subsidiaries or any of their material assets for any failure of the Company or any of its Subsidiaries, or any predecessor thereof, to comply with any requirements of federal, state or local regulation relating to air, water, solid waste management, hazardous or toxic substances, or the protection of health, safety or the environment. Except as described in each of the Time of Sale Disclosure Package and the Final Offering Memorandum, none of the property owned or leased by the Company or any of its Subsidiaries is, to the best knowledge of the Company, contaminated with waste or hazardous or toxic substances in material amounts or in amounts that pose a threat to employees or visitors, and neither the Company nor any of its Subsidiaries may be deemed an “owner or operator” of a “facility” or “vessel” that owns, possesses, transports, generates or disposes of a “hazardous substance” as those terms are defined in §9601 of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. §9601 et seq .

(v) No labor disturbance exists with the employees of the Company or any of its Subsidiaries or is imminent that, individually or in the aggregate, would have a Material Adverse Effect. None of the employees of the Company or any of its Subsidiaries is represented by a union and, to the best knowledge of the Company and its Subsidiaries, no union organizing activities are taking place. Neither the Company nor any of its Subsidiaries has violated any federal, state or local law or foreign law relating to discrimination in hiring, promotion or pay of employees, nor any applicable wage or hour laws, or the rules and regulations thereunder, or analogous foreign laws and regulations, that would, individually or in the aggregate, result in a Material Adverse Effect.

(w) The Company and its Subsidiaries are in compliance in all material respects with all presently applicable provisions of the Employee Retirement Income Security Act of 1974, as amended, including the regulations and published interpretations thereunder (“ERISA”); no “reportable event” (as defined in ERISA) has occurred with respect to any “pension plan” (as defined in ERISA) for which the Company and its Subsidiaries would have any liability; the Company and its Subsidiaries have not incurred and do not expect to incur liability under (i) Title IV of ERISA with respect to termination of, or withdrawal from, any “pension plan” or (ii) Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended, including the regulations and published interpretations thereunder (the “Code”); and each “pension plan” for which the Company or any of its Subsidiaries would have any liability that is intended to be qualified under Section 401(a) of the Code is so qualified in all material respects, and nothing has occurred, whether by action or by failure to act, that would cause the loss of such qualification.

(x) The Company and its Subsidiaries maintain insurance of the types and in the amounts generally deemed adequate for its business, including, but not limited to, directors’ and officers’ insurance, insurance covering real and personal property owned or leased by the Company and its Subsidiaries against theft, damage, destruction, acts of vandalism and all other risks customarily insured against, all of which insurance is in full force and effect. Neither the Company nor any of its Subsidiaries has been refused any insurance coverage sought or applied for, and the Company has no reason to believe that it and its Subsidiaries will not be able to renew their existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect.

(y) Neither the Company nor any of its Subsidiaries is, or with the giving of notice or lapse of time or both would be, in default or violation with respect to its certificate of incorporation or by-laws. Neither the Company nor any of its Subsidiaries is, or with the giving of notice or lapse of time or both would be, in default in the performance or observance of any material obligation, agreement, covenant or condition contained in any material indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound or to which any of the properties or assets owned by the Company or any of its Subsidiaries is subject, or in violation of any statutes, laws, ordinances or governmental rules or regulations or any orders or decrees to which it is subject, including, without limitation, Section 13 of the Exchange Act, which default or violation, individually or in the aggregate, would have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries has, at any time during the past five years, (A) made any unlawful contributions to any candidate for any political office, or failed fully to disclose any contribution in violation of law, or (B) made any payment to any state, federal or foreign government official, or other person charged with similar public or quasi-public duty (other than payment required or permitted by applicable law).

(z) Other than as set forth in each of the Time of Sale Disclosure Package and the Final Offering Memorandum, there are no legal or governmental proceedings pending to which the Company or any of its Subsidiaries is a party or of which any property of the Company or any of its Subsidiaries is the subject that, if determined adversely to the Company or any of its Subsidiaries, would individually or in the aggregate have a Material Adverse Effect or that would materially and adversely affect the consummation of the transactions contemplated hereby or that is required to be disclosed in each of the Time of Sale Disclosure Package or the Final Offering Memorandum; to the best of the Company’s knowledge, no such proceedings are threatened or contemplated.

(aa) Smith, Carney & Co., the accounting firm that has issued an opinion on the financial statements filed with or incorporated by reference in and as a part of the Final Offering Memorandum, is an independent registered public accounting firm within the meaning of the Securities Act and the Securities Act Rules and Regulations and the rules and regulations of the Public Company Accounting Oversight Board (“PCAOB”) of the United States. The Company and each of its Subsidiaries maintains a system of internal accounting controls sufficient to provide reasonable assurance that: (1) transactions are executed in accordance with management’s general or specific authorization; (2) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain accountability for assets; (3) access to assets is permitted only in accordance with management’s general or specific authorization; and (4) the recorded accounts for assets are compared with the existing assets at reasonable intervals and appropriate action is taken with respect thereto.

Except as set forth in the Time of Sale Disclosure Package and the Final Offering Memorandum, the consolidated financial statements and schedules of the Company, including the notes thereto, filed with (or incorporated by reference) and as a part of the Time of Sale Disclosure Package or the Final Offering Memorandum, present fairly the financial condition of the Company and its Subsidiaries as of the respective dates thereof and the consolidated results of operations and changes in financial position and consolidated statements of cash flow for the respective periods covered thereby, all in conformity with generally accepted accounting principles applied on a consistent basis throughout the periods involved except as otherwise disclosed therein. All adjustments necessary for a fair presentation of results for such periods have been made. The selected financial data included or incorporated by reference in the Time of Sale Disclosure Package and the Final Offering Memorandum present fairly the information shown therein and have been compiled on a basis consistent with that of the audited financial statements. Any operating or other statistical data included or incorporated by reference in the Time of Sale Disclosure Package and the Final Offering Memorandum comply in all material respects with the Securities Act and the Securities Act Rules and Regulations and present fairly the information shown therein and are based on or derived from sources that the Company reasonably and in good faith believes are reliable and accurate, and such data agree with the sources from which they are derived. All non-GAAP financial information included (or incorporated by reference) in the Time of Sale Disclosure Package or the Final Offering Memorandum complies in all material respects with the requirements of Regulation G and Item 10 of Regulation S-K under the Securities Act.

(bb) Each of MHA Petroleum Consultants, Inc. (“MHA”) and Sproule & Associates (“Sproule”) is a natural gas engineering firm from whose reserve reports information is contained or incorporated by reference in the Time of Sale Disclosure Package and the Final Offering Memorandum, and acts as independent natural gas engineers with respect to the Company. Other than (i) the production of reserves in the ordinary course of business, (ii) intervening price fluctuations or (iii) as described in the Time of Sale Disclosure Package, the Company is not aware of any facts or circumstances that would result in a material adverse change in its proved reserves in the aggregate, or the aggregate present value of estimated future net revenues of the Company or the standardized measure of discounted future net cash flows therefrom, as described in the Time of Sale Disclosure Package and reflected in the reserve information as of the respective dates such information is given. Except as set forth in each of the Time of Sale Disclosure Package and the Final Offering Memorandum, the Time of Sale Disclosure Package and the Final Offering Memorandum, including the oil and natural gas production and reserve information and estimates of future net revenues and discounted future net cash flows, in the case of the Time of Sale Disclosure Package complies and, in the case of the Final Offering Memorandum will comply in all material respects with the applicable requirements of Regulation S-X of the Securities Act Rules and Regulations, Industry Guide 2 under the Securities Act and Statement of Financial Accounting Standards Board No. 69, Disclosures about Oil and Petroleum Producing Activities, as amended to date (“SFAS 69”).

(cc) The Company has not taken and will not take, directly or indirectly, any action designed to or that might reasonably be expected to cause or result in stabilization or manipulation of the price of the Company’s Common Stock, and the Company is not aware of any such action taken or to be taken by affiliates of the Company.

(dd) There is not currently and has not in the past been a failure on the part of the Company or, to the Company’s knowledge, any of its respective directors or officers, in their capacities as such, to comply with any applicable provisions of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”) and the rules and regulations promulgated in connection therewith, including Sections 302, 402 and 906, and the statements contained in any certification pursuant to such Act and related rules and regulations are complete and correct.

(ee) The Company has established and maintains disclosure controls and procedures and internal control over financial reporting as are currently required (as such terms are defined in Rule 13a-15 and 15d-15 under the Exchange Act); the Company’s disclosure controls and procedures (i) are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to management, including the principal executive and principal financial officer of the Company, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure, and that such information is recorded, processed, summarized and reported, within the time periods specified in the Exchange Act Rules and Regulations; (ii) have been evaluated for effectiveness; and (iii) are effective in all material respects to perform the functions for which they were established.

(ff) Except as discussed with the Company’s auditors and audit committee and as disclosed in each of the Time of Sale Disclosure Package and the Final Offering Memorandum, (i) there are no significant deficiencies or material weaknesses in the design or operation of internal control over financial reporting that are reasonably likely to adversely affect the Company’s ability to record, process, summarize, and report financial data and (ii) there is, and there has been, no fraud, whether or not material, that involves management or other employees who have a role in the Company’s internal control over financial reporting.

(gg) Since the date of the end of the last fiscal year for which audited financial statements are included or incorporated by reference in each of the Time of Sale Disclosure Package and the Final Offering Memorandum, there have been no significant changes in internal control over financial reporting or in other factors that could significantly affect internal control over financial reporting, including any corrective actions with regard to significant deficiencies and material weaknesses.

(hh) The Company has received no written comments from the SEC staff regarding its periodic or current reports under the Exchange Act that remain unresolved and have not been disclosed in the Time of Sale Disclosure Package and the Final Offering Memorandum.

(ii) No relationship, direct or indirect, exists between or among the Company and any director, officer or stockholder of the Company, or any member of his or her immediate family, or any customers or suppliers that is required to be described in the Time of Sale Disclosure Package or the Final Offering Memorandum and that is not so described as required in material compliance with such requirement. There are no outstanding loans, advances (except normal advances for business expenses in the ordinary course of business) or guarantees of indebtedness by the Company to or for the benefit of any of the officers or directors of the Company or any member of their respective immediate families, except as disclosed in the Time of Sale Disclosure Package and the Final Offering Memorandum. The Company has not, in violation of the Sarbanes-Oxley Act, directly or indirectly, extended or maintained credit, arranged for the extension of credit, or renewed an extension of credit, in the form of a personal loan to or for any director or executive officer of the Company.

(jj) To the best knowledge of the Company, no change in any laws or regulations is pending that could reasonably be expected to be adopted and if adopted, is reasonably expected to have, individually or in the aggregate with all such changes, a Material Adverse Effect, except as set forth in or contemplated in each of the Time of Sale Disclosure Package and the Final Offering Memorandum.

(kk) The minute books of each of the Company and its Subsidiaries have been made available to the Representative and contain a complete summary of all meetings and other actions of the directors and shareholders of each such entity in all material respects, and reflect all transactions referred to in such minutes accurately in all material respects.

(ll) Neither the Company nor any of its Subsidiaries, nor, to the Company’s knowledge, any director, officer, agent, employee or other person associated with or acting on behalf of the Company or any of its Subsidiaries, has, directly or indirectly, used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; made any direct or indirect unlawful payment to any foreign or domestic government official or employee or to foreign or domestic political parties or campaigns from corporate funds; violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977; or made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment.

(mm) The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance in all material respects with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Money Laundering Laws”), and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its Subsidiaries with respect to the Money Laundering Laws is pending, or to the knowledge of the Company, threatened.

(nn) Neither the Company nor any of its Subsidiaries nor, to the knowledge of the Company, any director, officer, agent, employee or affiliate of the Company or any of its Subsidiaries is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will not directly or indirectly use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner or other person or entity that, to the Company’s knowledge, will use such proceeds, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.

(oo) No customer of or supplier to the Company or any of its Subsidiaries has ceased purchases or shipments of merchandise to the Company or indicated, to the Company’s knowledge, an interest in decreasing or ceasing its purchases from the Company or otherwise modifying its relationship with the Company, other than in the normal and ordinary course of business consistent with past practices in a manner which would not, singly or in the aggregate, result in a Material Adverse Effect.

(pp) The Securities will not be as of the same class (within the meaning of Rule 144A under the Securities Act (“Rule 144A”)) as securities which are listed on a national securities exchange registered under Section 6 of the Exchange Act or quoted in a U.S. automated inter-dealer quotation system.

(qq) Assuming the accuracy of the representations and warranties of the Initial Purchasers contained in Section 5 and their compliance with the agreements set forth therein, no registration under the Securities Act of the Securities or the Conversion Shares, or qualification of the Indenture under the 1939 Act is required for the offer and sale of the Securities to or by the Initial Purchasers in the manner contemplated herein, in the Time of Sale Disclosure Package and the Final Offering Memorandum.

(rr) On or prior to the Closing Date, the Initial Purchasers shall have received a lock-up agreement substantially in the form of Exhibit B hereto signed by the persons listed in Schedule IV hereto.

Any certificate signed by any officer of the Company and delivered to the Representative or counsel for the Initial Purchasers in connection with the offering of the Securities shall be deemed a representation and warranty by the Company, as to matters covered thereby, to the Initial Purchasers.

3. Purchase and Sale.

(a) Subject to the terms and conditions and in reliance upon the representations and warranties herein set forth, the Company