PURCHASE AGREEMENT

EXHIBIT 10.1

$100,000,000

KCS ENERGY, INC.

7 1/8% SENIOR NOTES DUE 2012

PURCHASE AGREEMENT

April 5, 2005

Dear Sirs:

     1.  Introductory. KCS Energy, Inc., a Delaware corporation (the “ Company ”), proposes, subject to the terms and conditions stated herein, to issue and sell to the several initial purchasers named in Schedule A hereto (the “ Purchasers ”) U.S. $100,000,000 aggregate principal amount of its 7 1/8% Senior Notes due 2012 (the “ Offered Securities ”) to be issued as additional securities under an indenture, dated as of April 1, 2004, (the “ Original Indenture ”) as amended by the First Supplemental Indenture thereto (the “ First Supplemental Indenture ”), dated as of April 8, 2005 (the Original Indenture as amended and supplemented by the First Supplemental Indenture, the “ Indenture ”), among the Company, KCS Resources, Inc., a Delaware corporation, Medallion California Properties Company, a Texas corporation, KCS Energy Services, Inc., a Delaware corporation, and Proliq, Inc., a New Jersey corporation (collectively, the “ Guarantors ”), and U.S. Bank National Association, as Trustee. The Offered Securities are Additional Securities (as defined in the Indenture) to the $175,000,000 aggregate principal amount of 7 1/8% Senior Notes due 2012 previously issued and outstanding, and shall constitute a single class therewith under the Indenture.

     The holders of the Offered Securities will be entitled to the benefits of a Registration Rights Agreement, to be dated as of the Closing Date (as defined below), among the Company, the Guarantors and the Purchasers (the “ Registration Rights Agreement ”), pursuant to which the Company agrees to file a registration statement with the Securities Exchange Commission (the “ Commission ”) registering the resale of the Offered Securities under the United States Securities Act of 1933, as amended (the “ Securities Act ”).

     The Company and the Guarantors hereby agree with the several Purchasers as follows:

     2.  Representations and Warranties of the Company and the Guarantors. The Company and the Guarantors, jointly and severally, represent and warrant to, and agree with, the several Purchasers that:

     (a) A preliminary offering circular and an offering circular relating to the Offered Securities to be offered by the Purchasers have been prepared by the Company. Such preliminary offering circular and offering circular (the “ Offering Circular ”), as supplemented as of the date of this Agreement, together with any other document incorporated by reference therein and any other document approved by the Company for use in connection with the contemplated resale of the Offered Securities are hereinafter collectively referred to as the “ Offering Document .” On the date of this Agreement, the Offering Document does not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The preceding sentence does not apply to statements in or omissions from the Offering Document based upon written information furnished to the Company by any Purchaser through Credit Suisse First Boston LLC (“ CSFB ”) specifically for use therein, it being understood and agreed that the only such information is that described as such in Section 7(b) hereof. Except as disclosed in the Offering Document, on the date of this

Agreement, the Company’s Annual Report on Form 10-K most recently filed with the Commission and all subsequent reports (collectively, the “ Exchange Act Reports ”) that have been filed by the Company with the Commission or sent to stockholders pursuant to the Securities Exchange Act of 1934 (the “ Exchange Act ”) do not include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. Such documents, when they were filed with the Commission, conformed in all material respects to the requirements of the Exchange Act and the rules and regulations of the Commission thereunder.

     (b) The Company has been duly incorporated and is a validly existing corporation in good standing under the laws of the State of Delaware, with corporate power and authority to own or lease and operate its properties and conduct its business as described in the Offering Document and to enter into and perform its obligations under this Agreement; the Company is duly qualified to transact business as a foreign corporation and is in good standing in all other jurisdictions in which its ownership or lease of property or the conduct of its business requires such qualification, except where the failure to be so qualified would not have a material adverse effect on the condition (financial or other), business, properties or results of operations of the Company and its subsidiaries taken as a whole (“ Material Adverse Effect ”); and, to the Company’s knowledge, no proceeding has been instituted in any jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail, such power and authority or qualification; and the Company does not own, lease or license any asset or property or conduct any material business outside of the United States.

     (c) The entities listed on Schedule B hereto are the only subsidiaries, direct or indirect, of the Company (the “ Subsidiaries ”).

     (d) Each Subsidiary has been duly incorporated and is a validly existing corporation in good standing under the laws of the jurisdiction of its incorporation, with corporate power and authority to own and lease and operate its properties and conduct its business as described in the Offering Document and to enter into and perform its obligations under this Agreement; each Subsidiary is duly qualified to transact business as a foreign corporation in good standing in all other jurisdictions in which its ownership or lease of property or the conduct of its business requires such qualification, except where the failure to be so qualified would not have a Material Adverse Effect; and all of the issued and outstanding capital stock of each Subsidiary has been duly authorized and validly issued and is fully paid and nonassessable and is owned by the Company, directly or through subsidiaries, free from liens, encumbrances and defects, except for liens resulting from the Company’s credit facility and pledges under such credit facility.

     (e) Except for the Registration Rights Agreement, there are no contracts, agreements or understandings between the Company or any Subsidiary and any person granting such person the right to require the Company or such Subsidiary to file a registration statement under the Securities Act with respect to any securities of the Company or such Subsidiary or to require the Company or such Subsidiary to include such securities with the Offered Securities and Subsidiary Guarantees registered pursuant to any registration statement.

     (f) The Original Indenture and the First Supplemental Indenture have been duly authorized by all necessary corporate action; the Offered Securities have been duly authorized by all necessary corporate action; the Original Indenture has been, and when the Offered Securities are delivered and paid for pursuant to this Agreement on the Closing Date (as defined in Section 3), the First Supplemental Indenture will have been duly executed and delivered, such Offered Securities will have been duly executed, authenticated, issued and delivered and will conform in all material respects to the description thereof contained in the Offering Document and the Indenture and such Offered Securities will constitute valid and legally binding obligations of the Company, enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles.

     (g) As of the Closing Date, the Original Indenture has been qualified under, and the Indenture conforms in all material respects to, the requirements of the United States Trust Indenture Act of 1939, as amended (the “ Trust Indenture Act ”), and the rules and regulations of the Commission applicable to an indenture which is qualified thereunder.

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     (h) On the Closing Date, the Exchange Securities (as defined in the Registration Rights Agreement) will have been duly authorized by the Company and the Guarantors; and when the Exchange Securities are issued, executed and authenticated in accordance with the terms of the Registration Rights Agreement and the Indenture, the Exchange Securities will be entitled to the benefits of the Indenture and will be the valid and legally binding obligations of the Company and the Guarantors, enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles.

     (i) The Subsidiary Guarantee (as defined in the Indenture) to be endorsed on the Exchange Securities by each Guarantor has been duly authorized by each such Guarantor and, when issued, will have been duly executed and delivered by each such Guarantor and will conform to the description thereof contained in the Offering Document; and when the Exchange Securities have been issued, executed and authenticated in accordance with the terms of the Registration Rights Agreement and the Indenture, the Subsidiary Guarantee of each Guarantor endorsed thereon will constitute valid and legally binding obligations of such Guarantor, enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles.

     (j) There are no contracts, agreements or understandings between the Company and any person that would give rise to a valid claim against the Company or any Purchaser for a brokerage commission, finder’s fee or other like payment, other than the fees and compensation to be paid to the Purchasers in accordance with this Agreement.

     (k) The Registration Rights Agreement has been duly authorized by the Company and each of the Guarantors and, on the Closing Date, will have been duly executed and delivered by the Company and each of the Guarantors; when the Registration Rights Agreement has been duly executed and delivered by the Company and the Guarantors and duly authorized, executed and delivered by the Purchasers, the Registration Rights Agreement will be a valid and binding agreement of the Company and each of the Guarantors, enforceable against the Company and each Guarantor in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles; and on the Closing Date, the Registration Rights Agreement will conform in all material respects as to legal matters to the description thereof in the Offering Circular.

     (l) No consent, approval, authorization, or order of, or filing with, any governmental agency or body or any court is required for the consummation of the transactions contemplated by this Agreement or the Registration Rights Agreement in connection with the issuance and sale of the Offered Securities by the Company except for (i) such consents as may be required under applicable state securities laws in connection with the purchase and resale of the Notes by the Purchasers and (ii) such consents, with respect to the Exchange Securities (including the related Guarantee), as may be required under applicable state securities laws and the Securities Act, including the order of the Commission declaring the Exchange Offer Registration Statement or the Shelf Registration Statement (each as defined in the Registration Rights Agreement) effective.

     (m) Neither the Company nor any of the Subsidiaries is in violation of its respective charter or by-laws or in default in the performance of any obligation, agreement, covenant or condition contained in any indenture, loan agreement, mortgage, lease or other agreement or instrument that is material to the Company and the Subsidiaries, taken as a whole, to which the Company or any of the Subsidiaries is a party or by which the Company or any of the Subsidiaries or their respective property is bound (collectively, “ Agreements and Instruments ”), except for such defaults that would not result in a Material Adverse Effect; the execution, delivery and performance by the Company of its obligations under the Indenture, this Agreement and the Registration Rights Agreement, and the issuance and sale of the Offered Securities and compliance with the terms and provisions thereof, do not and will not, whether with or without the giving of notice or passage of time or both, conflict with or constitute a breach of, or default or Repayment Event (as defined below) under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of the Subsidiaries pursuant to, the Agreements and Instruments, nor will such action result in any violation of (i) the provisions of the charter or by-laws of the Company or any of the Subsidiaries or (ii) any applicable law, statute, rule, regulation, judgment, order, writ or decree of

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any government, government instrumentality or court, domestic or foreign, having jurisdiction over the Company or any of the Subsidiaries or any of their assets, properties or operations, which violations, in the case of clause (ii), would, individually or in the aggregate, either have a Material Adverse Effect or a material adverse effect on the consummation of the transactions contemplated herein; and the Company has full power and authority to authorize, issue and sell the Offered Securities as contemplated by this Agreement. As used herein, “ Repayment Event ” means any event or condition that gives the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Company or any of the Subsidiaries.

     (n) This Agreement has been duly authorized, executed and delivered by the Company and each of the Guarantors.

     (o) The Company and the Subsidiaries have good and indefeasible title to all of their interests in oil and gas properties (other than interests earned under farm-out, participation or similar agreements in which an assignment or transfer is pending) and all other real property owned by the Company and the Subsidiaries and good title to all other properties owned by them, in each case, free and clear of all mortgages, pledges, liens, security interests, claims, restrictions or encumbrances of any kind except such as (i) are described in the Offering Document, (ii) liens and encumbrances under operating agreements, unitization and pooling agreements, production sales contracts, farm-out agreements and other oil and gas exploration participation and production agreements, in each case that secure payment of amounts not yet due and payable for the performance of other unmatured obligations and are of a scope and nature customary in the oil and gas industry or arise in connection with drilling and production operations, or (iii) do not, individually or in the aggregate, materially affect the value of the affected property and do not interfere with the use made and proposed to be made of such property by the Company or the Subsidiaries, as the case may be; all of the leases and subleases of real property that are material to the business of the Company or any of the Subsidiaries and under which the Company or any of the Subsidiaries holds properties described in the Offering Document, are in full force and effect, and neither the Company nor any of the Subsidiaries has received notice of any material claim of any sort that has been asserted by anyone adverse to the rights of the Company or any of the Subsidiaries under any of such leases or subleases, or affecting or questioning the rights of the Company or such Subsidiary to the continued possession of the leased or subleased premises under any such lease or sublease.

     (p) The Company and the Subsidiaries possess such permits, licenses, approvals, consents and other authorizations (collectively, “ Governmental Licenses ”) issued by the appropriate federal, state, local or foreign regulatory agencies or bodies necessary to conduct the business in the manner described in the Offering Document, subject to such qualifications as may be set forth in the Offering Document and except for such Governmental Licenses which, if not obtained, would not, individually or in the aggregate, have a Material Adverse Effect; the Company and the Subsidiaries are in compliance with the terms and conditions of all such Governmental Licenses, subject to such qualifications as may be set forth in the Offering Document and except for such noncompliance which would not, individually or in the aggregate, have a Material Adverse Effect; all of the Governmental Licenses are valid and in full force and effect, subject to such qualifications as may be set forth in the Offering Document and except for such Governmental Licenses which, if not valid and in full force and effect, would not, individually or in the aggregate, have a Material Adverse Effect; and neither the Company nor any of the Subsidiaries has received any notice of proceedings relating to the revocation or modification of any such certificate, authority or permit that, if determined adversely to the Company or any of the Subsidiaries, would, individually or in the aggregate, have a Material Adverse Effect.

     (q) No labor dispute with the employees of the Company or any Subsidiary exists or, to the knowledge of the Company, is imminent that could reasonably be expected to result in a Material Adverse Effect.

     (r) The Company and the Subsidiaries own or possess, or can acquire on reasonable terms, adequate trademarks, trade names and other rights to inventions, know-how (including unpatented and/or unpatentable proprietary or confidential information, systems or procedures), patents, copyrights, confidential information and other intellectual property (collectively, “ intellectual property rights ”) necessary to conduct the business now operated by them, or presently employed by them, and have not received any notice of infringement of or

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conflict with asserted rights of others with respect to any intellectual property rights that, if determined adversely to the Company or any of the Subsidiaries, would, individually or in the aggregate, have a Material Adverse Effect.

     (s) (i) neither the Company nor any of the Subsidiaries is in violation of any federal, state, local or foreign statute, law, rule, regulation, ordinance, code, policy or rule of common law or any judicial or administrative interpretation thereof, including any judicial or administrative order, consent, decree or judgment, relating to pollution or protection of human health, the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata) or wildlife, including, without limitation, laws and regulations relating to the release or threatened release of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous substances, petroleum or petroleum products (collectively, “ Hazardous Materials ”) or to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials (collectively, “ Environmental Laws ”); (ii) the Company and the Subsidiaries have all permits, authorizations and approvals required under any applicable Environmental Laws and are each in compliance with their requirements; (iii) to the knowledge of the Company, there are no pending or threatened administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violation, investigation or proceedings relating to any Environmental Law against the Company or any of the Subsidiaries; and (iv) there are no events or circumstances that could reasonably be expected to form the basis of an order for clean-up or remediation, or an action, suit or proceeding by any private party or governmental body or agency, against or affecting the Company or any of the Subsidiaries relating to Hazardous Materials or any Environmental Laws, except in the case of clauses (i), (ii), (iii) or (iv) where such violation, failure to receive required permits, authorizations and approvals or failure to comply with the requirements of such permits, authorizations and approvals, action or liabilities related to Hazardous Materials or any Environmental Laws would not, individually or in the aggregate, have a Material Adverse Effect.

     (t) As of the date hereof, (i) all royalties, rentals, deposits and other amounts owed under the oil and gas leases constituting the oil and gas properties of the Company and the Subsidiaries have been properly and timely paid (other than amounts held in routine suspense accounts pending payments), and no material amount of proceeds from the sale or production attributable to the oil and gas properties of the Company and the Subsidiaries are currently being held in suspense by any purchaser thereof, except where such amounts due could not, individually or in the aggregate, have a Material Adverse Effect on the Company or any of the Subsidiaries, and (ii) there are no claims under take-or-pay contracts pursuant to which natural gas purchasers have any make-up rights affecting the interests of the Company or the Subsidiaries in their oil and gas properties, except where such claims could not, individually or in the aggregate, have a Material Adverse Effect on the Company or any of the Subsidiaries.

     (u) There are no pending actions, suits or proceedings against or affecting the Company, any of the Subsidiaries or any of their respective properties that, if determined adversely to the Company or any of the Subsidiaries, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect, or that might reasonably be expected to materially and adversely affect the ability of the Company or any Guarantor to perform its obligations under the Indenture, this Agreement or the Registration Rights Agreement, or which are otherwise material in the context of the sale of the Offered Securities; to the Company’s knowledge, no such actions, suits or proceedings are threatened or contemplated; and the aggregate of all pending legal or governmental proceedings to which the Company or any of the Subsidiaries is a party or of which any of their respective properties or assets is the subject that are not described in the Offering Document, including ordinary routine litigation incidental to the business, could not reasonably be expected to result in a Material Adverse Effect.

     (v) The financial statements included in the Offering Document, together with the related schedules and notes thereto, present fairly the financial position of the Company and its consolidated subsidiaries as of the dates shown and their results of operations and cash flows for the periods shown, and, except as otherwise disclosed in the Offering Document, such financial statements have been prepared in conformity with the generally accepted accounting principles in the United States (“ GAAP ”) applied on a consistent basis throughout the periods involved.

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     (w) Except as disclosed in the Offering Document dated the date hereof, since the date of the latest audited financial statements included in the Offering Document, there has been no material adverse change, nor any development or event involving a prospective material adverse change, in the condition (financial or other), business, properties, results of operations or business prospects of the Company and the Subsidiaries taken as a whole; the Company and the Subsidiaries have not incurred any liability or obligations, direct or contingent, nor entered into any transaction, other than those in the ordinary course of business, which are material with respect to the Company or the Subsidiaries; there has been no dividend or distribution of any kind declared, paid or made by the Company on any class of its capital stock; and there has not been any material adverse change in the capital stock, short-term debt or long term debt of the Company or any of the Subsidiaries.

     (x) The Company is subject to the reporting requirements of either Section 13 or Section 15(d) of the Exchange Act and files reports with the Commission on the Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system.

     (y) Neither the Company nor any of the Guarantors is an open-end investment company, unit investment trust or face-amount certificate company that is, or is required to be, registered under Section 8 of the United States Investment Company Act of 1940 (the “ Investment Company Act ”); and the Company and each of the Guarantors are not and, after giving effect to the offering and sale of the Offered Securities and the application of the proceeds thereof as described in the Offering Document, will not be an “investment company” as defined in the Investment Company Act.

     (z) Except for the Initial Securities, no securities of the same class (within the meaning of Rule 144A(d)(3) under the Securities Act) as the Offered Securities are listed on any national securities exchange registered under Section 6 of the Exchange Act or quoted in a U.S. automated inter-dealer quotation system.

     (aa) Neither the Company nor any of the Subsidiaries nor any agent thereof acting on the behalf of them has taken, and none of them will take, any action that could reasonably be expected to cause this Agreement or the issuance or sale of the Offered Securities to violate Regulation T, Regulation U or Regulation X of the Board of Governors of the Federal Reserve System.

     (bb) No “nationally recognized statistical rating organization” as such term is defined for purposes of Rule 436(g)(2) under the Securities Act (i) has imposed (or has informed the Company or any Guarantor that it is considering imposing) any condition (financial or otherwise) on the Company’s or any Guarantor’s retaining any rating assigned to the Company or any Guarantor, any securities of the Company or any Guarantor or (ii) has indicated to the Company or any Guarantor that it is considering (A) the downgrading, suspension, or withdrawal of, or any review for a possible change that does not indicate the direction of the possible change in, any rating so assigned or (B) any change in the outlook for any rating of the Company, any Guarantor or any securities of the Company or any Guarantor.

     (cc) No form of general solicitation or general advertising (as defined in Regulation D under the Securities Act) was used by the Company, the Guarantors or any of their respective representatives (other than the Purchasers, as to whom the Company and the Guarantors make no representation or warranty) in connection with the offer and sale of the Offered Securities contemplated hereby, including, but not limited to, articles, notices or other communications published in any newspaper, magazine, or similar medium or broadcast over television or radio, or any seminar or meeting whose attendees have been invited by any general solicitation or general advertising.

     (dd) The sale of the Offered Securities pursuant to Regulation S under the Securities Act (“ Regulation S ”) is not part of a plan or scheme to evade the registration provisions of the Securities Act.

     (ee) No registration under the Securities Act of the Offered Securities or the Subsidiary Guarantees is required for the sale of the Offered Securities and the Subsidiary Guarantees to the Purchasers as contemplated hereby or for the Exempt Resales assuming the accuracy of the Purchaser’s representations set forth in Section 4 hereof.

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     (ff) Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf (i) has, within the six-month period prior to the date hereof, offered or sold in the United States or to any U.S. person (as such terms are defined in Regulation S under the Securities Act) the Offered Securities or any security of the same class or series as the Offered Securities or (ii) has offered or will offer or sell the Offered Securities (A) in the United States by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) under the Securities Act or (B) with respect to any such securities sold in reliance on Rule 903 of Regulation S, by means of any directed selling efforts within the meaning of Rule 902(c) of Regulation S. The Company, its affiliates and any person acting on its or their behalf (other than the Purchasers, as to whom the Company and the Guarantors make no representation) have complied and will comply with the offering restrictions requirement of Regulation S. The Company has not entered and will not enter into any contractual arrangement with respect to the distribution of the Offered Securities except for this Agreement.

     (gg) Ernst & Young LLP, which is reporting on the audited financial statements of the Company included in the Offering Document, are independent public accountants within the meaning of the Securities Act.

     (hh) There are no contracts or documents that are required to be described in the Offering Document or the documents incorporated by reference therein or to be filed as exhibits thereto that have not been so described and filed as required.

     (ii) The statistical and market-related data included or incorporated by reference in the Offering Document are based on or derived from sources that the Company believes to be reliable and accurate or represent the Company’s good faith estimates that are made on the basis of data derived from such sources.

     (jj) All United States federal income tax returns of the Company and the Subsidiaries required by law to be filed have been filed (or extensions with respect to such tax returns have been obtained); all taxes shown by such filed tax returns or otherwise assessed, that are due and payable, have been paid, except those which are being contested in good faith and as to which adequate reserves have been provided in accordance with generally accepted accounting principles; the Company has not received any notice from the Internal Revenue Service that it intends to audit the Company’s federal income tax returns for any year during the three year period ended December 31, 2004 and no audit proceeding by the Internal Revenue Service has been conducted during such period; the Company and the Subsidiaries have filed all other tax returns (or obtained extensions with respect to such tax returns) that are required to have been filed by them pursuant to applicable foreign, state, local or other law, and have paid all taxes due pursuant to such returns or pursuant to any assessment received by the Company and the Subsidiaries, except those which are being contested in good faith and as to which adequate reserves have been provided in accordance with generally accepted accounting principles; and the charges, accruals and reserves on the books of the Company in respect of any income and corporation tax liability for any years not finally determined are adequate in all material respects to meet any assessments or reassessments for additional income tax for any years not finally determined.

     (kk) The Company and the Subsidiaries carry or are covered by insurance, with financially sound and reputable insurers, in such amounts and covering such risks as is generally maintained by companies similar to the Company engaged in the same or similar business, and all such insurance is in full force and effect.

     (ll) No relationship, direct or indirect, exists between or among any of the Company or any affiliate of the Company, on the one hand, and any director, officer, stockholder, customer or supplier of any of them, on the other hand, which is required by the Exchange Act to be described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2004, which is not so described or is not described as required.

     (mm) The written engineering report audited by Netherland, Sewell & Associates, Inc., an oil and gas engineering consulting firm (“ NSAI ”), dated March 3, 2005, setting forth the proved reserves attributed to the oil and gas properties of the Company and the Subsidiaries accurately reflects in all material respects the ownership interests of the Company and the Subsidiaries in the properties therein as of December 31, 2004, except as otherwise disclosed in the Offering Document; the information furnished by the Company to NSAI for purposes of conducting its audit, including, without limitation, production, costs of operation and

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development, current prices for production, agreements relating to current and future operations and sales of production, was true, correct and complete in all material respects on the date supplied and was prepared in accordance with customary industry practices, as indicated in the letter of NSAI dated March 3, 2005; and NSAI is independent with respect to the Company.

     (nn) The principal executive officer and principal financial officer of the Company have made all certifications required by the Sarbanes-Oxley Act of 2002 (the “ Sarbanes-Oxley Act ”) or any related rules and regulations promulgated by the Commission, and the statements contained in any such certification are complete and correct; the Company maintains “disclosure controls and procedures” (as defined in Rule 13a-15(e) under the Exchange Act), and such controls and procedures are designed (i) to ensure that material information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms and (ii) to ensure that material 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 the Company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure; the Company does not have any material weaknesses in internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act), and there has been no fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act); and the Company is otherwise in compliance in all material respects with all applicable effective provisions of the Sarbanes-Oxley Act and the rules and regulations promulgated by the Commission.

     3.  Purchase, Sale and Delivery of Offered Securities. On the basis of the representations, warranties and agreements herein contained, but subject to the terms and conditions herein set forth, the Company agrees to sell to the Purchasers, and the Purchasers agree, severally and not jointly, to purchase from the Company, at a purchase price of 98.6125% of the principal amount thereof plus accrued interest from April 1, 2005 to the Closing Date (as defined below), the respective principal amounts of the Offered Securities set forth opposite the names of the several Purchasers in Schedule A hereto.

     The Company will deliver against payment of the purchase price the Offered Securities to be offered and sold by the Purchasers in reliance on Regulation S (the “ Regulation S Securities ”) in the form of one or more permanent global Securities in registered form without interest coupons (the “ Regulation S Global Securities ”), which will be deposited with the Trustee as custodian for The Depository Trust Company (“ DTC ”) and registered in the name of Cede & Co., as nominee for DTC. The Company will deliver against payment of the purchase price the Offered Securities to be purchased by