PROMISSORY NOTE SETTLEMENT AGREEMENT

PROMISSORY NOTE SETTLEMENT AGREEMENT

THIS PROMISSORY NOTE SETTLEMENT AGREEMENT (the “Agreement”) is made effective this 31 ^st day of October, 2008 (the “Effective Date”), by and between Nitro Petroleum Incorporated, (the “Company”), with a principal business address of 7250 N.W. Expressway, Oklahoma City, Oklahoma 73132 and HB International Ltd. (“HB”), with a principal business address of Suite 13, First Floor, Oliaji Trade Centre, Francis Rachel Street, Victoria, Mahe, Republic of Seychelles.

WITNESSETH

WHEREAS, the Company borrowed an aggregate of $2,000,000 from H.E. Capital Ltd (“H.E. Capital”) pursuant to the terms of certain demand promissory notes issued by the Company in favor of H.E. Capital, all of which bear interest at a rate of four percent (4%) per annum (collectively, the “Notes”).

WHEREAS, H.E. Capital assigned to HB all or a portion of one or more of the Notes, transferring to HB the right to receive payment of $400,000 principal amount (the “Transferred Amount”) of the Notes and any accrued and unpaid interest due and payable on the Transferred Amount.

WHEREAS, the Notes that were fully or partially assigned to HB that represent the right to receive the Transferred Amount plus accrued and unpaid interest on the Transferred Amount are referred to herein as the “Transferred Notes.”

WHEREAS, the table below sets forth (i) the date each Transferred Note was issued to H.E. Capital, (ii) the original Transferred Amount that was transferred to HB from each Transferred Note, (iii) the unpaid Transferred Amount from each Transferred Note as of the Effective Date, (iv) the accrued and unpaid interest owed on the Transferred Amount of each Transferred Note as of the Effective Date, and (v) the total of the unpaid Transferred Amount and accrued and unpaid interest due on the unpaid Transferred Amount of each Transferred Note as of the Effective Date:

WHEREAS, the aggregate amount of the unpaid Transferred Amount and accrued and unpaid interest due on the unpaid Transferred Amount of all Transferred Notes as of the Effective Date is $443,886 (referred to hereafter as the “Settlement Amount”).

WHEREAS, the Company desires to pay the Settlement Amount through the issuance of shares of its common stock, par value $0.001 per share (the “Common Stock”) and HB desires to accept shares of the Company’s Common Stock in full satisfaction of the Settlement Amount pursuant to the terms and conditions of this Agreement.

NOW, THEREFORE, in consideration of the foregoing, the covenants herein contained, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree as follows:

(a)    Valuation of Common Stock . The parties agree that, for purposes of paying the Settlement Amount, each share of the Company’s Common Stock shall be valued at $0.05 per share (the “Per Share Value”). The parties determined the Per Share Value through negotiation and, as such, the parties recognize, acknowledge

and agree that the Per Share Value may not be indicative of the true value of a share of the Company’s Common Stock.

(b)   Issuance of Shares . Based on the Per Share Value, simultaneously with the execution and delivery of this Agreement, the Company shall issue and deliver to HB a stock certificate or stock certificates representing a total of 8,877,720 shares (the “Settlement Shares”) of the Company’s Common Stock in full satisfaction of the Settlement Amount. The stock certificate(s) for the Settlement Shares shall be freely tradable and bear no legends restricting transfers of the Settlement Shares.

2.          Cancellation of the Notes . HB hereby assigns, transfers and surrenders for cancellation each of the Transferred Notes to the Company. Simultaneously with the execution of this Agreement, HB shall deliver to the Company each of the Transferred Note, duly endorsed as terminated and cance