SECOND PURCHASE AND SALE AGREEMENT

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THIS SECOND PURCHASE AND SALE AGREEMENT (“ Agreement ”) is made and entered into May 26, 2009, by and between PetroHunter Energy Corporation (“ PetroHunter Energy ”), Sweetpea Petroleum Pty Ltd (“ Sweetpea ”), PetroHunter Operating Company (“ PetroHunter Operating ”), Falcon Oil & Gas Ltd. (“ Falcon ”), Falcon Oil & Gas USA, Inc. (“ Falcon USA ”) and Falcon Oil & Gas Australia Pty Ltd (“ Purchaser ”). PetroHunter Energy, PetroHunter Operating, Sweetpea, Falcon, Falcon USA and Purchaser may sometimes be referred to herein individually as a “ Party ” and collectively as the “ Parties ”.

WHEREAS ,   PetroHunter Energy and Sweetpea, and Falcon and Purchaser entered into a purchase and sale agreement dated August 22, 2008 (the “ Beetaloo PSA ”) with respect to the Beetaloo Basin Project (as hereinafter defined) whereby Purchaser bought an undivided 50% interest in the Beetaloo Basin Project from Sweetpea on September 30, 2008 (the “ Initial Transaction ”);

AND WHEREAS , Sweetpea is now operator of the Beetaloo Basin Project and owner of the other undivided 50% interest in the Beetaloo Basin Project;

AND WHEREAS , Purchaser wishes to buy an additional 25% undivided interest in the Beetaloo Basin Project from Sweetpea and become the operator of the Beetaloo Basin Project;

NOW THEREFORE , in consideration of the mutual covenants and agreements set out in this Agreement and for other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the Parties hereto covenant and agree as follows:

In this Agreement, the following defined terms shall mean as follows:

“ Acceptance Date ” means the last to occur of:

“ Agreement ” means this purchase and sale agreement, including all Schedules hereto, as amended from time to time in accordance with the terms hereof, “hereof”, “hereto” and “hereunder” and similar expressions refer to this Agreement and not any particular section of this Agreement; “Article”, “Section” and “Schedule” mean and refer to the specified article, section or Schedule of or to this Agreement.

“ Amended and Restated Beetaloo JOA ” means the joint operating agreement between the Purchaser and Sweetpea dated the Closing Date in the form attached hereto as SCHEDULE "I" hereto.

“ Assets ” means the undivided 25% interest in the Beetaloo Basin Project that will be subject to the assignment delivered by Sweetpea to Purchaser at the Closing.

“ Bayless Override ” has the meaning ascribed thereto in the Beetaloo PSA.

“ Beetaloo Basin Project ” means (i) the Permits, (ii) the Well, (iii) the Data, (iv) the Material Agreements, (v) all related licenses, permits, access rights, and other rights and privileges, and (vi) all rights, titles and interests of the PetroHunter Parties, whether derived under the Permits, the Material Agreements, or otherwise, in and to all equipment, fixtures and personal property located on lands covered by the Permits or used in connection with the exploration and development of such lands.

“ Beetaloo Inventory ”   means the entire 100% ownership interest in the inventory identified on SCHEDULE "C" hereto (together with any other personal property owned, leased or otherwise held for use by or on behalf of a PetroHunter Party that is related to the Beetaloo Basin Project, even if such property is omitted or misdescribed in SCHEDULE "C") that will be subject to the bill of sale delivered by Sweetpea to Purchaser at the Closing.

“ Beetaloo JOA ” means the joint operating agreement between Purchaser and Sweetpea dated August 22, 2008.

“ Beetaloo Payables ” means all amounts owing by the PetroHunter Parties to contractors, creditors and all other parties in connection with the Beetaloo Basin Project up to a maximum of A$1,500,000.

“ Board of Directors ” means the board of directors of a Party, as the context may require.

“ Breaching Party ” has the meaning ascribed thereto in Section 10.5.

“ Buckskin JOA ” means the joint operating agreement dated October 31, 2008, between PetroHunter Operating, as operator, and Falcon USA, as non-operator.

“ Buckskin PSA ” means the purchase and sale agreement between PetroHunter Energy and PetroHunter Operating, and Falcon and Falcon USA dated August 22, 2008, as amended on October 31, 2008.

“ Buckskin Mesa Project ” means PetroHunter’s 20,000-acre Buckskin Mesa project located in the Piceance Basin, Colorado.

“ Business Day ” means a day of the week, other than a Saturday, Sunday or any other day which is a statutory holiday in the Province of Ontario, the Northern Territory of Australia, or the State of Colorado.

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“ Closing ” means the matters contemplated by ARTICLE 6 of this Agreement at the offices of Davis Graham & Stubbs LLP in Denver, Colorado on the Closing Date.

“ Closing Date ” means 11:00 a.m. (Denver time) five Business Days after:

“ Commissioner of Taxation ” means the commissioner of taxation of the Australian Taxation Office.

“ Common Shares ” means common shares in the capital of Falcon.

“ Completion Capital ” has the meaning ascribed thereto in the Buckskin PSA.

“ Control ” has the meaning ascribed in Section 1.3;

“Data ” means all files, records, correspondence and information in the possession or under the control of the PetroHunter Parties that relate to the Beetaloo Basin Project, including without limitation invoice and payment records; Permit, contract, and correspondence files; and geological, geophysical, engineering and interpretive data.

“ Escrow Agent ” means the escrow agent appointed by Falcon in its sole discretion under the Escrow Agreement.

“ Escrow Agreement ” means the escrow agreement among, the Escrow Agent, the Falcon Parties and PetroHunter Parties dated the Closing Date in the form of escrow agreement attached hereto as SCHEDULE "G" to this Agreement and which will be dated the Closing Date.

“ Falcon Encumbrances ” means liens, charges, security interests, options, claims, mortgages, pledges, or other restrictions on title or transfer, except for Permitted Falcon Encumbrances.

“ Falcon Parties ” means, together, Falcon, Falcon USA and the Purchaser, or any one of them, as the case may be.

“ Governmental Authority ” means any federal, state or local government, regulatory authority, governmental department, agency, commission, board, tribunal or court.

“ GST ” has the meaning given to that expression in the GST Law.

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“ GST Law ” has the meaning given to that expression in the A New Tax System (Goods and Services Tax) Act 1999 , as amended, of the Commonwealth of Australia.

“ Indemnity ” has the meaning ascribed thereto in ARTICLE 8.

“ Initial Working Interest ” has the meaning ascribed thereto in the Buckskin PSA.

“ Loan ” means the $5,000,000 loan made by Falcon to PetroHunter Energy in accordance with the Loan Agreement.

“ Loan Agreement ” means the loan agreement dated October 1, 2008, as amended on December 10, 2008, between PetroHunter Energy and Falcon.

“ Material Agreements ” means the contracts identified on Schedule “C” to the Beetaloo PSA and those identified on SCHEDULE "J" hereto.

“ Mortgage ” means the mortgage, assignment, security agreement, fixture filing and security agreement, dated October 1, 2008 and recorded in the real property records of Rio Blanco County, Colorado under Document No. 293828, from PetroHunter Energy and PetroHunter Operating, as mortgagors, to Falcon, as mortgagee.

“ New Wells ” means the five wells (Excalibur Nos. 5054 through 5058, inclusive) identified on Schedule 3 to the Buckskin PSA.

“ Northern Land Council Exploration Agreements ” means the Exploration Agreement between Sweetpea, Local Aboriginal Groups and the Northern Land Council relating to Petroleum Exploration Permits 76, 98 and 99 and the Exploration Agreement between Sweetpea, Local Aboriginal Groups and the Northern Land Council relating to Petroleum Exploration Permit 117.

“ Northern Land Council Royalty” means the royalty interest payable to the Local Aboriginal Groups (through the Northern Land Council) in accordance with the Northern Land Council Exploration Agreements.

“ Northern Territory Royalty ” means the royalty payable to the Northern Territory in accordance with Part III, Division 5, Section 84 of the Petroleum Act of the Northern Territory.

“ Notice ” has the meaning attributed to it in Section 10.14.

“ Offered Interest ” means the remaining 25% interest in the Beetaloo Basin Project held by the PetroHunter Parties immediately following the Closing Date.

“ Operator Bonds ” means, collectively: (i) the five standby letters of credit issued by Wells Fargo Bank, National Association, relating to the Beetaloo Basin Project in the aggregate amount of A$496,000; (ii) all underlying cash security provided to Wells Fargo Bank, National Association, in connection with such letters of credit; and (iii) all other bonds and instruments that may now be in place for the benefit of the Northern Land Council or any Governmental

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“ Permits ” means Petroleum Exploration Permits 76, 98, 99 and 117, together with any renewals or extensions thereof as more fully described on SCHEDULE "A" to the Beetaloo PSA.

“Permitted Falcon Encumbrances” means:

“Permitted PetroHunter Encumbrances” means:

“ Person ” is to be broadly interpreted and includes an individual, a corporation, a partnership, a trust, an unincorporated organization, the government of a country or any political subdivision thereof, or any agency or department of any such government, and the executors, administrators or other legal representatives of an individual in such capacity.

“ PetroHunter Encumbrances ” means liens, charges, security interests, options, claims, mortgages, pledges, or other restrictions on title or transfer, except for Permitted PetroHunter Encumbrances.

“ PetroHunter Parties ” means, together, PetroHunter, PetroHunter Operating and Sweetpea, or any one of them, as the case may be.

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“ Pledge Agreement ” means the pledge and security agreement dated October 1, 2008, as modified by letter agreement dated December 10, 2008, between PetroHunter Energy, as pledgor, and Falcon, as pledgee.

“ Purchaser ” means Falcon Oil & Gas Australia Pty Ltd.

“ Remaining Completion Capital ” means the Completion Capital that has not been expended on costs relating to the Buckskin Mesa Project as of the Closing Date.

“ Russenberger Override ” means the overriding royalty interest on production from lands covered by the Permits that was created by MAB Resources LLC under the terms of its Acquisition and Consulting Agreement with PetroHunter Energy dated effective January 1, 2007.

“ Seller ” has the meaning ascribed thereto in the Beetaloo PSA.

“ Sellers ” has the meaning ascribed thereto in the Beetaloo PSA.

“ Subsidiary ” has the meaning ascribed in Section 1.2.

“ Transaction ” has the meaning ascribed thereto in ARTICLE 2.

“ Transaction Agreements ” means, collectively, this Agreement, the Amended and Restated Beetaloo JOA and the Escrow Agreement.

“ Transaction Fees ” means, collectively, all fees, costs and expenses of every type and nature arising out of or relating to the activities of the PetroHunter Parties in Australia that are not specifically set forth in SCHEDULE "F".

“ TSXV ” means the TSX Venture Exchange.

“ TSXV Policies ” means the TSXV Corporate Finance Manual as constituted on the date hereof.

“ U.S. ” means the United States of America and its territories.

“ U.S. Securities Act ” means the Securities Act of 1933 , as amended, of the U.S., and the rules and regulations promulgated thereunder.

“Warranty Claim ” means a claim made by a Party based on or with respect to the inaccuracy or non-performance or non-fulfilment or breach of any representation, warranty or covenant made or given by another Party contained in the Transaction Agreements or contained in any document or certificate given in order to carry out the Transaction.

“ Well ” means the Shenandoah #1 well, as more fully described on SCHEDULE "B" to the Beetaloo PSA.

A Person shall be deemed to be a subsidiary of another Person if:

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A Person shall be deemed to be controlled by another Person or by two or more Persons if:

The schedules attached to this Agreement are incorporated herein by reference and shall be deemed to be a part hereof.  In this Agreement, the singular includes the plural, the plural the singular, and any gender the other genders.  Unless otherwise indicated references to dollars or amounts stated in dollars are to United States dollars.  Headings are included for convenience or reference only and shall not affect the interpretation hereof.  If anything herein is to be done or held on a day which is not a Business Day, the same shall be done or held either on the next succeeding Business Day or as otherwise expressly provided in this Agreement.

With respect to all matters related to the Assets and the Beetaloo Inventory, and related to the interpretation and enforcement of this Agreement, this Agreement shall be governed by the laws of the Northern Territory of Australia and the applicable laws of Australia. With respect to all matters related to the Common Shares, this Agreement shall be governed by the laws of the Province of Ontario and the applicable laws of Canada.

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ARTICLE 2

As consideration for the actions described in Section 2.2, the PetroHunter Parties, as the case may be, shall at Closing:

and the PetroHunter Parties agree to such actions on and subject to the terms and conditions of this Agreement (collectively, the “ PetroHunter Consideration ”).

As consideration for the actions described in Section 2.1, the Falcon Parties, as the case may be, shall at Closing:

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and the Falcon Parties agree to such actions on and subject to the terms and conditions of this Agreement (collectively, the “ Falcon Consideration ” and together with the PetroHunter Consideration, the “ Transaction ”).

The PetroHunter Parties hereby jointly and severally guarantee, represent and warrant to the Falcon Parties that as at the date hereof:

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The Falcon Parties hereby jointly and severally guarantee, represent and warrant to the PetroHunter Parties that as at the date hereof: