<SEC-DOCUMENT>0001193125-13-353801.txt : 20130830
<SEC-HEADER>0001193125-13-353801.hdr.sgml : 20130830
<ACCEPTANCE-DATETIME>20130830150753
ACCESSION NUMBER:		0001193125-13-353801
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20130828
ITEM INFORMATION:		Entry into a Material Definitive Agreement
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20130830
DATE AS OF CHANGE:		20130830

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			LSB INDUSTRIES INC
		CENTRAL INDEX KEY:			0000060714
		STANDARD INDUSTRIAL CLASSIFICATION:	INDUSTRIAL INORGANIC CHEMICALS [2810]
		IRS NUMBER:				731015226
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-07677
		FILM NUMBER:		131072264

	BUSINESS ADDRESS:	
		STREET 1:		16 S PENNSYLVANIA
		CITY:			OKLAHOMA CITY
		STATE:			OK
		ZIP:			73101
		BUSINESS PHONE:		4052354546

	MAIL ADDRESS:	
		STREET 1:		16 SOUTH PENNSYLVANIA
		CITY:			OKLAHOMA CITY
		STATE:			OK
		ZIP:			73101
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>d591449d8k.htm
<DESCRIPTION>FORM 8-K
<TEXT>
<HTML><HEAD>
<TITLE>Form 8-K</TITLE>
</HEAD>
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 <P STYLE="line-height:1.0pt;margin-top:0pt;margin-bottom:0pt;border-bottom:1px solid #000000">&nbsp;</P>
<P STYLE="line-height:3.0pt;margin-top:0pt;margin-bottom:2pt;border-bottom:1px solid #000000">&nbsp;</P> <P STYLE="margin-top:4pt; margin-bottom:0pt; font-size:18pt; font-family:Times New Roman" ALIGN="center"><B>UNITED STATES </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:18pt; font-family:Times New Roman" ALIGN="center"><B>SECURITIES AND EXCHANGE COMMISSION </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:12pt; font-family:Times New Roman" ALIGN="center"><B>WASHINGTON, D.C. 20549 </B></P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P><center>
<P STYLE="line-height:6.0pt;margin-top:0pt;margin-bottom:2pt;border-bottom:1.00pt solid #000000;width:21%">&nbsp;</P></center> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:18pt; font-family:Times New Roman" ALIGN="center"><B>FORM <FONT
STYLE="white-space:nowrap">8-K</FONT> </B></P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P><center>
<P STYLE="line-height:6.0pt;margin-top:0pt;margin-bottom:2pt;border-bottom:1.00pt solid #000000;width:21%">&nbsp;</P></center> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:12pt; font-family:Times New Roman" ALIGN="center"><B>CURRENT
REPORT </B></P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:12pt; font-family:Times New Roman" ALIGN="center"><B>PURSUANT TO SECTION 13 OR 15(d) </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:12pt; font-family:Times New Roman" ALIGN="center"><B>OF THE SECURITIES EXCHANGE ACT OF 1934 </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:12pt; font-family:Times New Roman" ALIGN="center"><B>Date of report (Date of earliest event reported): August&nbsp;28, 2013 </B></P>
<P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P><center> <P STYLE="line-height:6.0pt;margin-top:0pt;margin-bottom:2pt;border-bottom:1.00pt solid #000000;width:21%">&nbsp;</P></center>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:24pt; font-family:Times New Roman" ALIGN="center"><B>LSB INDUSTRIES, INC. </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>(Exact name of registrant as specified in its charter) </B></P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P><center>
<P STYLE="line-height:6.0pt;margin-top:0pt;margin-bottom:2pt;border-bottom:1.00pt solid #000000;width:21%">&nbsp;</P></center> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:8pt" ALIGN="center">


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<TD VALIGN="top" ALIGN="center"><B>Delaware</B></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top" ALIGN="center"><B><FONT STYLE="white-space:nowrap">1-7677</FONT></B></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top" ALIGN="center"><B><FONT STYLE="white-space:nowrap">73-1015226</FONT></B></TD></TR>
<TR STYLE="font-family:Times New Roman; font-size:8pt">
<TD VALIGN="top" ALIGN="center"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:8pt; font-family:Times New Roman" ALIGN="center"><B>(State or other jurisdiction</B></P>
<P STYLE="margin-top:0pt; margin-bottom:1pt; font-size:8pt; font-family:Times New Roman" ALIGN="center"><B>of incorporation)</B></P></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top" ALIGN="center"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:8pt; font-family:Times New Roman" ALIGN="center"><B>(Commission</B></P>
<P STYLE="margin-top:0pt; margin-bottom:1pt; font-size:8pt; font-family:Times New Roman" ALIGN="center"><B>File Number)</B></P></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top" ALIGN="center"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:8pt; font-family:Times New Roman" ALIGN="center"><B>(IRS Employer</B></P>
<P STYLE="margin-top:0pt; margin-bottom:1pt; font-size:8pt; font-family:Times New Roman" ALIGN="center"><B>Identification No.)</B></P></TD></TR>
</TABLE> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD VALIGN="top" ALIGN="center"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>16 South Pennsylvania Avenue,</B></P>
<P STYLE="margin-top:0pt; margin-bottom:1pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>Oklahoma City, Oklahoma</B></P></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" ALIGN="center"><B>73107</B></TD></TR>
<TR STYLE="font-family:Times New Roman; font-size:8pt">
<TD VALIGN="top" ALIGN="center"><B>(Address of principal executive offices)</B></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top" ALIGN="center"><B>(Zip Code)</B></TD></TR>
</TABLE> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>Registrant&#146;s telephone number, including area code
<FONT STYLE="white-space:nowrap">(405)&nbsp;235-4546</FONT> </B></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>Not applicable </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:8pt; font-family:Times New Roman" ALIGN="center"><B>(Former name or former address, if changed since last report) </B></P>
<P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P><center> <P STYLE="line-height:6.0pt;margin-top:0pt;margin-bottom:2pt;border-bottom:1.00pt solid #000000;width:21%">&nbsp;</P></center>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Check the appropriate box below if the Form <FONT STYLE="white-space:nowrap">8-K</FONT> filing is intended to simultaneously satisfy the filing obligation of
the registrant under any of the following provisions (see General Instruction A.2. below): </P> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT></TD>
<TD ALIGN="left" VALIGN="top">Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) </TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT></TD>
<TD ALIGN="left" VALIGN="top">Soliciting material pursuant to Rule <FONT STYLE="white-space:nowrap">14a-12</FONT> under the Exchange Act (17 CFR <FONT STYLE="white-space:nowrap">240.14a-12)</FONT> </TD></TR></TABLE>
<P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="white-space:nowrap">Pre-commencement</FONT> communications pursuant to Rule <FONT STYLE="white-space:nowrap">14d-2(b)</FONT> under the Exchange Act (17 CFR
<FONT STYLE="white-space:nowrap">240.14d-2(b))</FONT> </TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="white-space:nowrap">Pre-commencement</FONT> communications pursuant to Rule <FONT STYLE="white-space:nowrap">13e-4(c)</FONT> under the Exchange Act (17 CFR
<FONT STYLE="white-space:nowrap">240.13e-4(c))</FONT> </TD></TR></TABLE> <P STYLE="font-size:10pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P> <P STYLE="line-height:1.0pt;margin-top:0pt;margin-bottom:0pt;border-bottom:1px solid #000000">&nbsp;</P>
<P STYLE="line-height:3.0pt;margin-top:0pt;margin-bottom:2pt;border-bottom:1px solid #000000">&nbsp;</P>

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<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="12%" VALIGN="top" ALIGN="left"><B>Item&nbsp;1.01</B></TD>
<TD ALIGN="left" VALIGN="top"><B>Entry into a Material Definitive Agreement </B></TD></TR></TABLE> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Zena Energy L.L.C., (&#147;Zena&#148;), which is a
subsidiary within the Chemical Business of LSB Industries, Inc. (the &#147;Company&#148;), has purchased from Hat Creek Energy LLC (&#147;Hat Creek&#148;) certain working interests in natural gas properties located in the Marcellus Shale in Wyoming
County, Pennsylvania. The purchase represents an increase from 7.7% to 9.7% in the average net revenue interest for proven reserves in the same natural gas properties purchased by Zena in October 2012. The purchase price paid by Zena was $9.2
million in cash, which was funded using the Company&#146;s existing working capital. The acquisition was completed pursuant to the terms of the Purchase and Sale Agreement, dated August&nbsp;28, 2013 (the &#147;Agreement&#148;), between Hat Creek,
as seller, and Citrus Energy Appalachia, LLC, Troy Energy Investments, LLC, and Zena, as buyers, to be effective as of July&nbsp;1, 2013. The Agreement contains customary representations, warranties, covenants, and indemnifications. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The Company&#146;s Chemical Business purchases a significant amount of natural gas as feedstock for the production of anhydrous ammonia. The acquisition of
the additional working interests in the natural gas properties is part of the Chemical Business&#146;s hedging strategy to protect against rising natural gas prices for a limited amount of the Company&#146;s natural gas requirements. The Company is
not the operator of these natural gas properties. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The foregoing summary description of the Agreement is not complete and is qualified in its entirety by
the actual terms of the Agreement, which is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein. </P> <P STYLE="font-size:18pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TR>
<TD WIDTH="12%" VALIGN="top" ALIGN="left"><B>Item&nbsp;9.01</B></TD>
<TD ALIGN="left" VALIGN="top"><B>Financial Statements and Exhibits </B></TD></TR></TABLE> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>(d) Exhibits. </B></P>
<P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD VALIGN="bottom" ALIGN="center"><B>Exhibit</B></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" ALIGN="center"><B>Description</B></TD></TR>


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<TD HEIGHT="8" COLSPAN="2"></TD></TR>
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<TD VALIGN="top" NOWRAP>99.1</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="top">Purchase and Sale Agreement, dated August 28, 2013, between Hat Creek Energy LLC, Citrus Energy Appalachia, LLC, Troy Energy Investments, LLC, and Zena Energy, LLC. Exhibits to the Purchase and Sale Agreement have been omitted
pursuant to Item 601(b)(2) of Regulation S-K and will be provided supplementally to the Securities and Exchange Commission upon request.</TD></TR>
</TABLE>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><U>SIGNATURES </U></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Dated: August&nbsp;30, 2013. </P>
<P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P><DIV ALIGN="right">
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<TD VALIGN="top" COLSPAN="3">LSB INDUSTRIES, INC.</TD></TR>
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<TD VALIGN="top">By:</TD>
<TD VALIGN="bottom"><FONT STYLE="font-size:8pt">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0pt; margin-bottom:1pt; border-bottom:1px solid #000000; font-size:10pt; font-family:Times New Roman">/s/ Tony M. Shelby</P></TD></TR>
<TR STYLE="font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT STYLE="font-size:8pt">&nbsp;</FONT></TD>
<TD VALIGN="top">Tony M. Shelby,</TD></TR>
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<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT STYLE="font-size:8pt">&nbsp;</FONT></TD>
<TD VALIGN="top">Executive Vice President of Finance,</TD></TR>
<TR STYLE="font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT STYLE="font-size:8pt">&nbsp;</FONT></TD>
<TD VALIGN="top">Chief Financial Officer</TD></TR>
</TABLE></DIV>
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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>d591449dex991.htm
<DESCRIPTION>EX-99.1
<TEXT>
<HTML><HEAD>
<TITLE>EX-99.1</TITLE>
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="right"><B>Exhibit 99.1 </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="right"><B><I>Execution Version </I></B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="right"><B><I>8/22/13 </I></B></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>PURCHASE
AND SALE AGREEMENT </B></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>BY AND BETWEEN </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>HAT CREEK ENERGY LLC </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>(Seller) </B></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>AND </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>CITRUS ENERGY APPALACHIA, LLC, </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>TROY ENERGY INVESTMENTS, LLC, AND ZENA ENERGY, LLC </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>(collectively, Buyer) </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>Dated August&nbsp;28, 2013 </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>COVERING PROPERTIES IN WYOMING COUNTY, PENNSYLVANIA </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Exhibit &#147;A&#148; &#150; Leases </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Exhibit &#147;B&#148;
&#150; Other Seller Property </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Exhibit &#147;C&#148; &#150; Form of Lease Assignment </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Exhibit &#147;D&#148; &#150; Form of Bill of Sale and Assignment </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Exhibit &#147;E&#148; &#150; Form of LADA Termination </P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>PURCHASE AND SALE AGREEMENT </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">This Purchase and Sale Agreement (the &#147;<B>Agreement</B>&#148;), dated August&nbsp;28, 2013, is made and entered into by and among
(a)&nbsp;Hat Creek Energy LLC, a Colorado limited liability company with an address of 3575 Cherry Creek North Drive, Denver, Colorado 80209 (&#147;<B>Seller</B>&#148;) and (b)&nbsp;Citrus Energy Appalachia, LLC, a Colorado limited liability
company, with an address of 333 Perry Street, Suite 250, Castle Rock, Colorado 80104 (&#147;<B>Citrus</B>&#148;), Troy Energy Investments, LLC, an Oklahoma limited liability company, with an address of 5637 N. Classen Blvd, Oklahoma City, Oklahoma
73118 (&#147;<B>TEI</B>&#148;) and Zena Energy, LLC, an Oklahoma limited liability company with an address of 16 South Pennsylvania Avenue, Oklahoma City, Oklahoma 73107 (&#147;<B>Zena</B>&#148;). Each of Citrus, TEI and Zena are referred to herein
collectively as &#147;<B>Buyer</B>&#148;. The purchase and sale contemplated by this Agreement are referred to as the &#147;<B>Transactions</B>&#148;. </P>
<P STYLE="margin-top:24pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B><U>RECITALS: </U></B></P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left">A.</TD>
<TD ALIGN="left" VALIGN="top">Seller presently owns interests in certain oil and gas leases, wells, equipment and appurtenant properties located in the State of Pennsylvania, Wyoming County, being within the Ardent II Prospect, as more fully
described below and in <U>Exhibit &#147;A&#148;</U> and <U>Exhibit &#147;B&#148;</U> attached hereto. </TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left">B.</TD>
<TD ALIGN="left" VALIGN="top">Seller presently owns certain contractual rights within the Ardent II Prospect and within an Area of Mutual Interest described in that certain Lease Acquisition and Development Agreement by and between Seller and Citrus
Energy Corporation, a Colorado corporation (&#147;<B>CEC</B>&#148;), dated March&nbsp;20, 2009, as subsequently amended (the &#147;<B>LADA</B>&#148;). </TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left">C.</TD>
<TD ALIGN="left" VALIGN="top">Buyer presently owns and/or operates interests in the oil and gas leases of which the Seller Property is a portion and is the operator of the wells and properties included in the Seller Property. </TD></TR></TABLE>
<P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left">D.</TD>
<TD ALIGN="left" VALIGN="top">Subject to the terms and conditions set forth herein, Buyer desires to purchase all of Seller&#146;s right, title and interest in and to Seller Property (as defined below), and, upon the closing of the Transactions,
Seller, CEC and Citrus wish to terminate the LADA. </TD></TR></TABLE> <P STYLE="margin-top:24pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B><U>AGREEMENT </U></B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">In consideration of the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Buyer and Seller hereby agree as follows: </P> <P STYLE="margin-top:24pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>1. <U>PURCHASE AND SALE</U> </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">1.1 <U>Purchase and Sale</U>. Subject to the terms and conditions of this Agreement, and for the consideration stated herein, Seller agrees to
sell, assign, convey and deliver to Buyer, and Buyer agrees to purchase and acquire from Seller, all of Seller&#146;s right, title and interest in the Seller Property, as defined below. The parties acknowledge that Seller is selling all of its
right, title and interest in and to the Seller Property and is not retaining any interests whatsoever </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">2 </P>


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therein. Buyer acknowledges that Buyer is acquiring the Seller Property &#147;as is, where is&#148;, with all faults and defects. Buyer further acknowledges that except for any express
representations or warranties of Seller contained herein, or in documents delivered at Closing, including, without limitation, Seller&#146;s warranty of title contained in the Lease Assignment and the Bill of Sale and Assignment (each as defined
below), that Seller makes no representations or warranties with respect to the Seller Property and disclaims all such representations or warranties, whether implied or statutory. </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">1.2 <U>Effective Time</U>. The Transactions shall be effective as of July&nbsp;1, 2013, at 12:01 a.m. Eastern Time (the &#147;<B>Effective
Time</B>&#148;). </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">1.3 <U>Seller Property</U>. </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(a) The &#147;<B>Seller Property</B>&#148; consists of and includes: </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:13%; font-size:10pt; font-family:Times New Roman">(i) All of Seller&#146;s working interests, net revenue interests, fee interests, leasehold interest, royalty, overriding royalty, production
payments, interests in drilling and spacing units, other non-working interests, and other oil, gas and mineral interests in and to the lands and oil and gas leases described in <U>Exhibit &#147;A&#148;</U> attached hereto (the
&#147;<B>Leases</B>&#148;) and the lands covered thereby (the &#147;<B>Lands</B>&#148;), whether or not such Lands and Leases are correctly or fully described on <U>Exhibit &#147;A&#148;</U> (the &#147;<B>Subject Interests</B>&#148;); </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:13%; font-size:10pt; font-family:Times New Roman">(ii) Any other rights that may arise by operation of law or otherwise or as associated with the Subject Interests; </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:13%; font-size:10pt; font-family:Times New Roman">(iii) All improvements, fixtures, personal property and related accessories located on the Land, including, but not limited to wells,
equipment, tanks, gathering lines, pipelines, water lines, pumps, and all other property or related accessories, if any, that are attached to or located on the Land, to the extent attributable to the Subject Interests, including without limitation
those set forth on <U>Exhibit &#147;B&#148;</U>; </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:13%; font-size:10pt; font-family:Times New Roman">(iv) The oil, gas, casinghead gas, coalbed methane, condensate and other gaseous and
liquid hydrocarbons or any combination thereof, sulphur extracted from hydrocarbons and all other substances that may be produced, saved and sold under the Leases (&#147;<B>Hydrocarbons</B>&#148;) to the extent attributable to the Subject Interests;
</P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:13%; font-size:10pt; font-family:Times New Roman">(v) The unitization and pooling agreements, declarations, orders, and the units created thereby relating to the properties and interests
described in Subsection 1.4(a) and to the production of Hydrocarbons attributable to the Subject Interests; </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:13%; font-size:10pt; font-family:Times New Roman">(vi) Concurrent rights with
Seller in all surface leases, permits, rights-of-way, licenses, easements and other surface and/or water rights agreements used or held in connection with the exploration, development, production, and transportation of Hydrocarbons or produced water
from the Seller Property, provided that Seller&#146;s concurrent rights under said surface contracts are assignable and/or transferrable; </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:13%; font-size:10pt; font-family:Times New Roman">(vii) All existing and effective operating agreements, exploration agreements, development agreements, farmout agreements, and similar
agreements (the &#147;<B>Contracts</B>&#148;), insofar as they directly relate to the Subject Interests, including without limitation those set forth on <U>Schedule 2.8</U>; </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">3 </P>


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 <P STYLE="margin-top:0pt; margin-bottom:0pt; text-indent:13%; font-size:10pt; font-family:Times New Roman">(viii) All licenses and all geophysical and seismic data to the extent attributable to the
Subject Interests, provided that any such permits, licenses, and agreements are assignable and/or transferrable; and </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:13%; font-size:10pt; font-family:Times New Roman">(ix) All other
rights and claims attributable to the Subject Interests described above except for those to which Seller is entitled pursuant Subsection 1.4(a). </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(b) The Seller Property expressly excludes all of Seller&#146;s interests in properties presently operated by Carrizo Oil&nbsp;&amp; Gas, Inc.,
or its affiliates. </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">1.4 <U>Purchase Price</U>. Subject to the other terms and conditions of this Agreement, the purchase price for the
Subject Interests in the Seller Property (the &#147;<B>Purchase Price</B>&#148;) shall be Fifty-Two Million, Six-Hundred Thousand Dollars ($52,600,000.00). The Purchase Price shall be payable by wire transfer of funds pursuant to instructions
provided by Seller. The Purchase Price shall be subject to the following adjustments: </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(a) <U>Revenues, Expenses and Capital
Expenditures</U>. All revenues attributable to the operation of the Seller Property prior to the Effective Time shall be owned by and for the account of Seller. Seller shall be (i)&nbsp;entitled to all operating revenues and related accounts
receivable attributable to the Seller Property and to the extent received by any Buyer, such Buyer shall promptly, after such receipt by it, fully disclose, account for and transmit same to Seller and (ii)&nbsp;responsible for all capital
expenditures, operating expenses and related accounts payable attributable to the Seller Property, in each case, to the extent they relate to the time prior to the Effective Time. To the extent Buyer receives invoices for or otherwise incurs capital
expenditures, operating expenses or related accounts relating to the period of time prior to the Effective Time, Seller shall pay such amounts to Buyer no later than fifteen (15)&nbsp;days following invoice from Buyer. It is specifically provided
that Seller shall only be responsible for capital expenditures related to the Seller Property to the extent that the work for which such capital expenditures are made actually occurs prior to the Effective Time; and, any prepayments made by Seller
for work that occurs after the Effective Time will be reimbursed to Seller. Buyer shall be (i)&nbsp;entitled to all operating revenues and related accounts receivable attributable to the Seller Property and to the extent received by Seller, Seller
shall promptly, after such receipt by it, fully disclose, account for and transmit same to Buyer and (ii)&nbsp;responsible for the payment of all capital expenditures, operating expenses and related accounts payable attributable to the Seller
Property, in each case, to the extent they relate to the period of time on and after the Effective Time. The actual amounts or values known and associated with the above shall be accounted for in the Final Settlement Statement. </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(b) <U>Taxes</U>. All taxes and assessments, including without limitation, excise taxes, ad valorem taxes and any other federal, state, local
or tribal taxes or assessments attributable to the ownership or operation of the Seller Property prior to the Effective Time shall remain Seller&#146;s responsibility, and all obligations, deductions, credits and refunds pertaining to the
aforementioned taxes and assessments, no matter when received, shall belong to Seller. All taxes and assessments, including without limitation, excise taxes, ad valorem taxes and any other federal, state or local taxes and assessments attributable
to the ownership or operation of the Seller Property on and after the Effective Time shall be Buyer&#146;s responsibility, and all </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">4 </P>


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obligations, deductions, credits and refunds pertaining to the aforementioned taxes and assessments, no matter when received, shall belong to Buyer. The actual and estimated amounts or values
known and associated with the above, if any, shall be accounted for in the Final Settlement Statement. Notwithstanding the foregoing, Buyer shall be solely responsible for all transfer, sales, use or similar taxes resulting from or associated with
the Transactions. </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(c) <U>Obligations and Credits</U>. All prepaid insurance premiums, utility charges, ad valorem taxes and rentals
applicable to the period prior to the Effective Time shall be reimbursed by Buyer to Seller. The actual amounts or values known and associated with the above shall be accounted for in the Final Settlement Statement. </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(d) <U>Miscellaneous Accounting</U>. In addition to the items set forth above, any other amounts due between Buyer and Seller related to the
ownership or operation of the Seller Property shall be accounted for in the Final Settlement Statement. </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(e) <U>Preliminary Settlement</U>.
Seller shall prepare and deliver to Buyer not later than 12:00 p.m. local time on the day immediately preceding the Closing Date Seller&#146;s preliminary settlement statement which shall set forth Seller&#146;s good faith estimate (in accordance
with customary industry accounting practices) of each adjustment to the Purchase Price and show the calculation of such estimated adjustment and the resulting estimated purchase price (the &#147;<B>Closing Amount</B>&#148;). </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(f) <U>Final Settlement</U>. Within sixty (60)&nbsp;days after Closing, Buyer will cause to be prepared and delivered to Seller in accordance
with customary industry accounting practices, the final settlement statement (the &#147;<B>Final Settlement Statement</B>&#148;) setting forth (i)&nbsp;each adjustment to the Purchase Price, as set forth in Section&nbsp;1.4 (a), (b), (c)&nbsp;and
(d), in final form showing the calculation of such adjustment and the resulting final purchase price; and (ii)&nbsp;providing a reallocation of certain costs and expenses paid by Seller with respect to the Seller Property (the &#147;<B>Final
Purchase Price</B>&#148;). As soon as practicable after receipt of the Final Settlement Statement report but in no event later than ten (10)&nbsp;business days after receipt of such statement, Seller shall deliver to Buyer either (x)&nbsp;a written
statement containing any changes that Seller proposes to make to the Final Purchase Price contained on the Final Settlement Statement, or (y)&nbsp;a written request for additional information from the operator of the Seller Property to verify the
accuracy of amounts charged to Seller with respect to the Seller Property reflected on the Final Settlement Statement. Seller&#146;s failure to deliver to Buyer a written report detailing proposed changes to the Final Settlement Statement, or a
request for additional information, by that date shall be deemed an acceptance by Seller of the Final Settlement Statement as submitted by Buyer. If Seller requested additional information, Buyer will cooperate with Seller in the delivery and
explanation of such additional information, and Seller will provide a written statement containing any changes that Seller proposes to make to the Final Purchase Price contained on the Final Settlement Statement within ninety (90)&nbsp;days
following the date on which the additional information was requested. The Parties will cooperate with each other and endeavor to resolve any dispute regarding the Final Purchase Price within thirty (30)&nbsp;days after Buyer&#146;s receipt of
Seller&#146;s proposed changes to the Final Settlement Statement. The date upon which such agreement is reached as evidenced by a Final Settlement Statement executed by both Buyer and Seller shall be called the &#147;<B>Final Settlement
Date</B>&#148;. If the Final Purchase Price is more than the Closing Amount, then Buyer shall pay to Seller the amount in the aggregate of such difference by wire transfer in immediately available funds no later than five (5)&nbsp;business days
after the Final Settlement Date. If the Final Purchase </P>
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Price is less than the Closing Amount, then Seller shall pay the amount in the aggregate of such difference to the Buyer Parties (as defined below) pro rata in proportion to their Assigned
Interests (as defined below) by wire transfer of immediately available funds no later than five (5)&nbsp;business days after the Final Settlement Date. </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">1.5 <U>Continuing Audit Rights. </U>By letter dated August&nbsp;5, 2013, Seller has informed Citrus Energy Corporation of Seller&#146;s intent
to conduct a cost audit of the Ardent II Project of which Seller Property is a part. Nothing contained in this Agreement shall diminish the rights of Seller to conduct such audit in accordance with the applicable joint operating agreement; and the
determination of the Final Purchase Price shall not preclude Seller from asserting audit exceptions and adjustments, which adjustments, shall be made by cash payments as required. </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">1.6 <U>Good Faith Deposit</U>. </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(a) Upon execution of this Agreement, Buyer shall remit immediately available funds to Seller, a deposit in the amount of Two Million Dollars
($2,000,000.00) (the &#147;<B>Deposit</B>&#148;). The Deposit shall be applied toward the Purchase Price and shall be a credit against the Closing Amount and the Final Purchase Price. </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(b) If Closing fails to occur due to Buyer&#146;s breach of this Agreement, the Deposit shall be considered surrendered by Buyer and shall
remain the property of Seller. In the event that the Deposit is so surrendered by Buyer to Seller, it shall serve as liquidated damages for any and all breaches by Buyer under this Agreement because of the difficulty, inconvenience and uncertainty
of ascertaining Seller&#146;s actual damages arising from any Buyer breach, and the retention of the Deposit under such circumstances shall constitute full satisfaction of Buyer&#146;s obligations hereunder. </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(c) If Closing fails to occur for any reason other than due to Buyer&#146;s breach of this Agreement, Seller shall promptly return the Deposit
to Buyer. For the avoidance of doubt, any failure by Seller to deliver any or all of the Net Revenue Interests to Buyer at Closing shall give Buyer the right to terminate this Agreement, and if terminated, entitle Buyer to a return of the Deposit.
</P> <P STYLE="margin-top:24pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>2. <U>SELLER REPRESENTATIONS AND WARRANTIES</U> </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">Seller makes the following representations and warranties as of Closing and as of the Effective Time except where otherwise indicated. </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">2.1 <U>Status</U>. Seller is a limited liability company duly organized, validly existing and in good standing under the laws of the State of
Colorado. </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">2.2 <U>Power</U>. Seller has all requisite power and authority to carry on its business as presently conducted. The execution
and delivery of this Agreement and each of the documents, instruments and agreements contemplated hereby to which it is a party does not, and the fulfillment of and compliance with the terms and conditions hereof and thereof will not, as of Closing,
violate, or be in conflict with, any material provision of Seller&#146;s governing documents, or any material provision of any agreement or instrument to which Seller is a party or by which it is bound, or any judgment, decree, order, statute, rule
or regulation applicable to Seller. </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">6 </P>


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 <P STYLE="margin-top:0pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">2.3 <U>Authorization and Enforceability</U>. This Agreement and each of the documents,
instruments and agreements contemplated hereby to which it is a party, when duly executed and delivered by Seller, constitutes Seller&#146;s legal, valid and binding obligation, enforceable in accordance with its terms, subject, however, to the
effects of bankruptcy, insolvency, reorganization, moratorium and other laws for the protection of creditors, as well as to general principles of equity, regardless whether such enforceability is considered in a proceeding in equity or at law. The
execution and delivery of this Agreement and each of the documents, instruments and agreements contemplated hereby to which it is a party by Seller does not, and the consummation of the Transactions shall not, (a)&nbsp;violate or be in conflict
with, or require the consent of any person or entity under, any provision of the governing documents of Seller, (b)&nbsp;violate any provision of or require any consent, authorization or approval under any judgment, decree, judicial or
administrative order, award, writ, injunction, statute, rule, regulation or other legal obligation applicable to Seller or (c)&nbsp;violate or be in conflict with any agreement or instrument to which Seller is a party or by which the Seller Property
is bound, or require the consent of any governmental authority or any other third party other than the consents set forth on <U>Schedule 2.7</U>. </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">2.4 <U>No Liens</U>. Except as set forth on <U>Schedule 2.4</U> attached hereto, the Subject Interests in the Seller Property are free and
clear of any and all liens, mortgages, debts, claims or encumbrances attributable to or arising by, through or under Seller. The Subject Interests in the Seller Property will be conveyed to Buyer at Closing, free and clear of any and all liens,
mortgages, debts, claims or encumbrances attributable to or arising by, through or under Seller. </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">2.5 <U>Claims; Judgments</U>. There are
no unsatisfied judgments or injunctions issued by a court of competent jurisdiction or other governmental agency outstanding against Seller relating the Seller Property or precluding the Closing of the Transactions. Neither the Seller nor any of the
Seller Property is or has been subject to or, to Seller&#146;s knowledge, threatened with any claim, demand, action, legal proceeding (whether at law or in equity) or arbitration. </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">2.6 <U>Taxes</U>. All taxes and assessments pertaining to the Leases based on ownership of the Leases for all taxable periods prior to the
taxable period in which this Agreement is executed and for which Seller had the obligation to make payment to the applicable taxing authorities have been properly paid. Except as set forth on <U>Schedule 2.6</U>, all income taxes and obligations
relating thereto that could result in a lien or other claim against any of the Leases have been properly paid and are not the subject of any claim, demand, action, legal proceeding (whether at law or in equity) or arbitration. </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">2.7 <U>Consents</U>. <U>Schedule 2.7</U> sets forth all consents, authorizations, approvals and notices required to be obtained or given in
connection with the Transactions, excluding any consents required under the Leases. </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">2.8 <U>Related Agreements</U>. <U>Schedule 2.8</U>
sets forth all agreements and instruments that are related in any way to the Seller Property or pursuant to which any third party has any rights with respect to the Seller Property, excluding any agreements that any of the Buyer Parties are a party
to or bound by. </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">7 </P>


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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>3. <U>BUYER&#146;S REPRESENTATIONS AND WARRANTIES</U> </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">Each of the Buyer Parties (as defined below) makes, solely with respect to such Buyer Party, the following representations and warranties as
of Closing and as of the Effective Time: </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">3.1 <U>Organization and Standing</U>. Buyer is duly organized, validly existing and in good
standing under the laws of the State(s) of Colorado or Oklahoma, as applicable, and each has authority to own oil and gas interests in the State of Pennsylvania, and is duly authorized to enter into this Agreement. </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">3.2 <U>Power</U>. Buyer has all requisite power and authority to carry on its business as presently conducted. The execution and delivery of
this Agreement and each of the documents, instruments and agreements contemplated hereby to which it is a party does not, and the fulfillment of and compliance with the terms and conditions hereof and thereof will not, as of Closing, violate, or be
in conflict with, any material provision of Buyer&#146;s governing documents, or any material provision of any agreement or instrument to which Buyer is a party or by which it is bound, or any judgment, decree, order, statute, rule or regulation
applicable to Buyer. </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">3.3 <U>Authorization and Enforceability</U>. This Agreement and each of the documents, instruments and agreements
contemplated hereby to which it is a party, when duly executed and delivered by Buyer, constitutes Buyer&#146;s legal, valid and binding obligation, enforceable in accordance with its terms, subject, however, to the effects of bankruptcy,
insolvency, reorganization, moratorium and other laws for the protection of creditors, as well as to general principles of equity, regardless whether such enforceability is considered in a proceeding in equity or at law. </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">3.4 <U>Claims; Judgments</U>. There are no unsatisfied judgments or injunctions issued by a court of competent jurisdiction or other
governmental agency outstanding against Buyer relating to the Seller Property, or precluding the Closing of the Transactions. Neither the Buyer, nor to Buyer&#146;s knowledge any of the Seller Property is a part, is or has been subject to or, to
Buyer&#146;s knowledge, threatened with any claim, demand, action, legal proceeding (whether at law or in equity) or arbitration. </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">3.5
<U>Independent Evaluation</U>. Buyer represents that it is sophisticated in the evaluation, purchase, operation and ownership of oil and gas properties and related properties. In making its decision to enter into this Agreement and to consummate the
Transactions contemplated herein, Buyer represents that, except for any express representations or warranties of Seller contained herein, or in documents delivered at Closing, including, without limitation, Seller&#146;s special warranty of title
contained in the Lease Assignment and the Bill of Sale and Assignment, Buyer has relied solely on its own independent investigation and evaluation of the Seller Property. </P>
<P STYLE="margin-top:24pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>4. <U>TAX MATTERS</U> </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">4.1 <U>Transfer Taxes</U>. The Purchase Price excludes, and Buyer shall be liable for, any Transfer Taxes required to be paid in connection
with the sale of the Seller Property pursuant to this Agreement. The term &#147;<B>Transfer Taxes</B>&#148; means any sales, use, excise, stock, stamp, document, filing, recording, registration, authorization and similar taxes, fees and charges.
</P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">8 </P>


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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>5. <U>CLOSING CONDITIONS</U> </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">5.1 Seller&#146;s Conditions. The obligations of Seller at the Closing are subject, at the option of Seller, to the satisfaction or waiver at
or prior to the Closing of the following conditions precedent: </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(a) All representations and warranties of Buyer contained in this Agreement
are true in all material respects at and as of the Closing Date in accordance with their terms as if such representations and warranties were remade at and as of the Closing Date, Buyer has performed and satisfied all covenants and agreements
required by this Agreement to be performed and satisfied by Buyer or jointly by Buyer and Seller at or prior to the Closing in all material respects; </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(b) No order has been entered by any court or governmental agency having jurisdiction over the parties or the subject matter of this Agreement
that restrains or prohibits the purchase and sale of the Seller Property contemplated by this Agreement and that remains in effect at Closing; </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(c) Buyer is able, willing, and prepared to tender performance required herein. </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">5.2 <U>Buyer&#146;s Conditions</U>. The obligations of Buyer at the Closing are subject, at the option of Buyer, to the satisfaction or waiver
at or prior to the Closing of the following conditions precedent: </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(a) All representations and warranties of Seller contained in this
Agreement are true in all material respects at and as of the Closing Date in accordance with their terms as if such representations were remade at and as of the Closing Date, Seller has performed and satisfied all covenants and agreements required
by this Agreement to be performed and satisfied by Seller or jointly by Buyer and Seller at or prior to the Closing in all material respects; </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(b) No order has been entered by any court or governmental agency having jurisdiction over the parties or the subject matter of this Agreement
that restrains or prohibits the purchase and sale of the Seller Property contemplated by this Agreement and that remains in effect at the time of Closing; </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(c) Seller is able, willing, and prepared to tender performance required herein; </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(d) Seller shall have delivered documents reasonably acceptable to Buyer evidencing (i)&nbsp;that all consents, authorizations approvals and
notices set forth on <U>Schedule 2.7</U> have been obtained and (ii)&nbsp;the release of any and all liens, mortgages, debts, claims or encumbrances encumbering the Seller Property and attributable to or arising by, through or under Seller; </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(e) Seller shall own, and shall deliver pursuant to the Lease Assignment, all of its right, title and interest in and to the Leases which shall
include Net Revenue Interests not less than the actual Net Revenue Interests acquired by Seller from Chesapeake, Statoil, CEC and Citrus, as applicable, when Seller originally acquired its interests in the Leases, subject to the Barber ORRI where
applicable. &#147;Net Revenue Interest&#148; means with respect to a Lease, the interest in and to all oil, gas and other hydrocarbons produced, saved and sold from or allocated </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">9 </P>


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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
to such Lease after giving effect to any and all royalties (including lessor&#146;s royalty), overriding royalties, production payments, net profits interests and other burdens upon, measured by
or payable out of production. &#147;Barber ORRI&#148; means that certain 1% overriding royalty interest granted by Citrus to William D. Barber burdening certain of the Leases; and </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(f) Seller shall have elected to participate in and shall have executed and delivered to Buyer prior to Closing any and all well drilling and
completion proposals and authorizations for expenditures pursuant to the terms of any Joint Operating Agreement or similar agreement related to the Subject Interests. It is provided, however, that (i)&nbsp;Buyer shall have no right to make cash
calls or ask for prepayments with respect to the foregoing, and (ii)&nbsp;if Closing fails to occur, Seller shall have the right to revoke its election and authorizations made or given after the execution date of this Agreement. </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">5.3 <U>No Other Conditions</U>. Except for the conditions expressly set forth in this Article 5, there are no other conditions precedent to the
obligations of the parties to proceed to Closing; and, without limiting the generality of the foregoing, the parties agree that any changes in commodity pricing, production volumes or changes in the financial condition of a party shall not be a
condition on which a party may elect not to proceed to Closing. </P> <P STYLE="margin-top:24pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>6. <U>CLOSING</U> </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">6.1 <U>Closing</U>. The closing of the Transactions (the &#147;<B>Closing</B>&#148;) shall take place at the offices of Seller at
10:00&nbsp;a.m. (MST) on August&nbsp;28, 2013, or at such other time or place as Seller and Buyer may otherwise agree in writing (&#147;<B>Closing Date</B>&#148;). At Closing, against delivery of the documents and materials described below, Buyer
shall pay to Seller the Closing Amount, less the Deposit, by means of a wire transfer of immediately available funds to an account designated by Seller. </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">6.2 <U>Documents To Be Delivered At Closing</U>. </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">At Closing, Seller shall deliver to Buyer the following instruments, dated the Closing Date, properly executed by authorized representatives
and, where appropriate, acknowledged: </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(a) Fully executed Assignment of Oil&nbsp;&amp; Gas Leases in the form attached hereto as <U>Exhibit
&#147;C&#148;</U> (the &#147;<B>Lease Assignment</B>&#148;) conveying and assigning the Subject Interests in the Leases to Buyer; </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(b)
Fully executed Bill of Sale and Assignment in the form attached hereto as <U>Exhibit &#147;D&#148;</U> (the &#147;<B>Bill of Sale and Assignment</B>&#148;) conveying and assigning Seller Property other than the Subject Interests in the Leases to
Buyer; </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(c) Fully executed Termination of LADA in the form attached hereto as <U>Exhibit &#147;E&#148;</U> (the &#147;<B>LADA
Termination</B>&#148;) terminating the LADA; </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(d) Documents reasonably acceptable to Buyer evidencing the termination and full release of
any and all liens, mortgages, debts, claims or encumbrances that encumber the Subject Interests, Seller Property, the Lands and/or the Leases attributable to or created by, through or under Seller; </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">10 </P>


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 <P STYLE="margin-top:0pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(e) Documents reasonably acceptable to Buyer evidencing that all consents, authorizations
approvals and notices set forth on <U>Schedule 2.7</U> have been obtained; and </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(f) Any other agreements, documents, certificates or other
instruments reasonably necessary to consummate the Transactions. </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">6.3 <U>Closing Obligations</U>. At Closing, the following actions shall
be taken by the applicable party identified below: </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(a) Seller shall execute, acknowledge and deliver to Buyer the Lease Assignment
effective as of the Effective Time; </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(b) Seller shall execute and deliver to Citrus, and Citrus shall (i)&nbsp;execute and deliver to
Seller the Bill of Sale and Assignment Agreement and the LADA Termination and (ii)&nbsp;cause CEC to execute and deliver to Seller the LADA Termination; </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(c) Buyer shall cause the Closing Amount, less the Deposit amount, to be paid to Seller by wire transfer of immediately available funds; </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(d) Seller and Buyer shall take such other actions and deliver such other documents as are contemplated by this Agreement; and </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(e) Seller will deliver releases of any and all liens, mortgages, debts, claims or encumbrances that encumber the Subject Interests, Seller
Property, the Lands and/or the Leases attributable to or created by, through or under Seller. </P> <P STYLE="margin-top:24pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>7. <U>ASSUMPTION, INDEMNIFICATION AND
WAIVER</U> </B></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">7.1 <U>Buyer&#146;s Assumption of Liabilities and Obligations</U>. Upon Closing, Buyer shall be responsible for and Buyer
shall assume and pay, perform, fulfill and discharge any and all Claims (as defined below) arising from the following (collectively the &#147;<B>Assumed Liabilities</B>&#148;): </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(a) the ownership and operation of the Seller Property after the Effective Time, including, without limitation, Claims related to (i)&nbsp;the
owning, developing, exploring, operating and maintaining of the Lands and Leases, (ii)&nbsp;producing, transporting and marketing of Hydrocarbons from the Lands, including, without limitation, the payment of royalties, overriding royalties and other
burdens on production attributable to the Subject Interest, (iii)&nbsp;injury or death of any person or persons whomsoever, (iv)&nbsp;damages to or loss of any property or resources, (v)&nbsp;common law causes of action such as negligence, gross
negligence, strict liability, nuisance or trespass, (vi)&nbsp;contractual obligations or liabilities arising under any agreements to which Buyer is a party pertaining to the Seller Property or (vii)&nbsp;fault imposed by statute, rule, regulation or
otherwise ; </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(b) the obligation to plug and abandon all wells drilled by Buyer on the Lands and reclaim all well sites associated with
wells drilled by Buyer on the Lands; and </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(c) the violation of any Environmental Laws, relating to or arising out of the ownership or
operation of the Seller Property, or any part thereof, pertaining to the period of time prior to, on or after the Effective Time. </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">11 </P>


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 <P STYLE="margin-top:0pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">&#147;<B>Claims</B>&#148; means all claims, demands, suits, causes of action, losses, damages,
liabilities, fines, penalties and costs (including reasonable attorneys&#146; fees and costs of litigation). </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">&#147;<B>Environmental
Laws</B>&#148; means all laws, statutes, ordinances, permits, orders, judgments, rules or regulations which are promulgated, issued or enacted by a governmental entity or tribal authority having appropriate jurisdiction that relate to (a)&nbsp;the
prevention of pollution or environmental damage, (b)&nbsp;the remediation of pollution or environmental damage, or (c)&nbsp;the protection of the environment generally; including without limitation, the Clean Air Act, as amended, the Clean Water
Act, as amended, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, the Federal Water Pollution Control Act, as amended, the Resource Conservation and Recovery Act of 1976, as amended, the Safe Drinking
Water Act, as amended, the Toxic Substance and Control Act, as amended, the Superfund Amendments and Reauthorization Act of 1986, as amended, the Hazardous and the Solid Waste Amendments Act of 1984, as amended, and the Oil Pollution Act of 1990, as
amended, and similar state and local laws. </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">7.2 <U>Buyer&#146;s Indemnification</U>. </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(a) Buyer shall release Seller from and shall fully protect, indemnify and defend Seller, its officers, agents, employees and Affiliates and
hold them harmless from and against the Assumed Liabilities. </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(b) The indemnity obligation and release provided herein shall apply
regardless of cause or of any negligent acts or omissions of Seller, its officers, agents, employees and affiliates excluding, however, gross negligence or willful misconduct of Seller, its officers, agents, employees and affiliates. </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">(c) Notwithstanding any other term set forth in this Agreement to the contrary, each of the Buyer Parties (as defined below) shall only assume
the Assumed Liabilities and be obligated to indemnify Seller with respect to any Claim pro rata in proportion to their Assigned Interests (as defined below). </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">7.3 <U>Buyer&#146;s Waiver</U>. Upon Closing: </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman"><B></B>(a) <B>all physical and environmental conditions relating to the Seller Property shall be waived by Buyer for all purposes, and Buyer
shall have no right to seek an adjustment to the Purchase Price, make a claim against Seller, legal, monetary or otherwise, or seek indemnification from Seller associated with the same; and </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman"><B></B>(b) <B>except for claims, damages, liabilities, costs or expenses Buyer asserts under Seller&#146;s special warranty of title, all title
defects relating the Seller Property shall be waived by Buyer for all purposes, and Buyer shall have no right to seek an adjustment to the Purchase Price, make a claim against Seller, monetary, legal or otherwise, or seek indemnification from Seller
associated with the same. </B></P> <P STYLE="margin-top:24pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>8. <U>MISCELLANEOUS</U> </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">8.1 <U>Buyer&#146;s Acquisition Percentages.</U> Buyer is comprised of Citrus, TEI, and Zena (the &#147;<B>Buyer Parties</B>&#148;). The Buyer
Parties shall each own the Seller Property separately in the following percentages (the &#147;<B>Assigned Interests</B>&#148;): Citrus &#150; 70.00%; TEI &#150; 12.50%; and Zena &#150; 17.5%. </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">12 </P>


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 <P STYLE="margin-top:0pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">8.2 <U>Amendments and Severability</U>. No amendments or other changes to this Agreement shall be
effective or binding on either of the parties unless the same shall be in writing and signed by both Seller and Buyer. The invalidity of any one or more provisions of this Agreement shall not affect the validity of this Agreement as a whole, and in
case of any such invalidity, this Agreement shall be construed as if the invalid provision had not been included herein. </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">8.3 <U>Successors
and Assigns</U>. This Agreement shall not be assigned, either in whole or in part, without the express written consent of the non-assigning parties; provided, however, that Citrus shall have the right without obtaining the prior consent of the other
parties to assign its interests to (i)&nbsp;an affiliate or (ii)&nbsp;an unaffiliated third party or parties to allocate post closing ownership of the Subject Interests; provided, such assignments shall not relieve Citrus of its obligations and
liabilities under this Agreement. The terms, covenants and conditions contained in this Agreement shall be binding upon and shall inure to the benefit of Seller and Buyer and their respective successors and assigns. </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">8.4 <U>Entire Agreement.</U> This Agreement, including the Exhibits attached hereto, supersedes all prior and contemporaneous negotiations,
understandings, letters of intent and agreements (whether oral or written) between the parties relating to the Seller Property and constitutes the entire understanding and agreement between the parties with respect to the sale and purchase of the
Seller Property. </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">8.5 <U>Survival of Representations and Warranties</U>. The representations and warranties of Seller set forth in Sections
2.4 through 2.7 of this Agreement shall terminate as of the Closing and be of no further force and effect. The representations and warranties of Seller set forth in Section&nbsp;2.8 and of Buyer set forth in Section&nbsp;3.4 shall survive the
Closing for a period of twelve (12)&nbsp;months from the date thereof. The representations and warranties of Seller set forth in Sections 2.1 through 2.3 of this Agreement or in the documents delivered at Closing, including, without limitation,
Seller&#146;s special warranty of title contained in the Lease Assignment and the Bill of Sale and Assignment shall survive in perpetuity. The parties have made no representations or warranties, except those expressly set forth in this Agreement and
the documents to be delivered at Closing. </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">8.6 <U>Notices</U>. All notices and other communications required, permitted or desired to be
given hereunder must be in writing and sent by U.S. mail, properly addressed as shown below, and with all postage and other charges fully prepaid or by hand delivery or by facsimile or email transmission. Date of service by mail and hand delivery is
the date on which such notice is received by the addressee and by facsimile and email is the date sent (as evidenced by fax machine confirmation of receipt), or if such date is not on a Business Day, then on the next date which is a Business Day.
Each party may change its address by notifying the other party in writing. </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">13 </P>


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 <P STYLE="margin-top:0pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">If to Seller </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:13%; font-size:10pt; font-family:Times New Roman">Hat Creek Energy LLC </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; text-indent:13%; font-size:10pt; font-family:Times New Roman">3575
Cherry Creek North Drive </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; text-indent:13%; font-size:10pt; font-family:Times New Roman">Denver, Co 80209 </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; text-indent:13%; font-size:10pt; font-family:Times New Roman">Attn: Gary D. Davis </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; text-indent:13%; font-size:10pt; font-family:Times New Roman">Ph:
(303)&nbsp;736-6000 </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; text-indent:13%; font-size:10pt; font-family:Times New Roman">Fax: (303)</P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; text-indent:13%; font-size:10pt; font-family:Times New Roman">E-mail: <U>gdavis@hatcreekenergy.com</U> </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">If to Buyer </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:13%; font-size:10pt; font-family:Times New Roman">Citrus
Appalachia, LLC </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; text-indent:13%; font-size:10pt; font-family:Times New Roman">333 Perry Street, Suite 250 </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; text-indent:13%; font-size:10pt; font-family:Times New Roman">Castle Rock, CO 80104 </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; text-indent:13%; font-size:10pt; font-family:Times New Roman">Attn:
Lance Peterson </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; text-indent:13%; font-size:10pt; font-family:Times New Roman">Ph: (303)&nbsp;688-3130 </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; text-indent:13%; font-size:10pt; font-family:Times New Roman">Fax: (303)&nbsp;688-8828 </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; text-indent:13%; font-size:10pt; font-family:Times New Roman">E-mail: lance@citrusenergy.com </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">8.7 <U>Counterparts/Fax Signatures</U>. This Agreement may be executed by Buyer and Seller in any number of counterparts, each of which shall
be deemed an original instrument, but all of which together shall constitute but one and the same instrument. Fax signatures shall be considered binding. </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">8.8 <U>Governing Law</U>. This Agreement and the Transactions and any arbitration or dispute resolution conducted pursuant hereto shall be
construed in accordance with, and governed by, the laws of the State of Colorado. </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">8.9 <U>Entire Agreement</U>. This Agreement constitutes
the entire understanding among the parties, their respective partners, members, trustees, shareholders, officers, directors and employees with respect to the subject matter hereof, superseding all negotiations, prior discussions and prior agreements
and understandings relating to such subject matter. </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">8.10 <U>Timing</U>. Time is of the essence of this Agreement. </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">8.11 <U>Further Assurances</U>. Seller and Buyer agree from time to time, after the date hereof, to execute and deliver or cause to be executed
and delivered such instruments or further assurances as may be necessary or desirable to give effect to the provisions of this Agreement. </P>
<P STYLE="margin-top:24pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><I></I>[<I>Signature page follows</I>.]<I> </I></P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">14 </P>


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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. </P>
<P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P><DIV ALIGN="right">
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<TD VALIGN="top" COLSPAN="3"><B>SELLER:</B></TD></TR>
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<TD HEIGHT="16" COLSPAN="3"></TD></TR>
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<TD VALIGN="top" COLSPAN="3"><B>Hat Creek Energy LLC</B></TD></TR>
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<TD HEIGHT="16" COLSPAN="2"></TD></TR>
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<TD VALIGN="top">By:</TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-size:8pt">&nbsp;</FONT></TD>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000">/s/ Gary D. Davis</TD></TR>
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<TD VALIGN="bottom"><FONT STYLE="font-size:8pt">&nbsp;</FONT></TD>
<TD VALIGN="bottom">Gary D. Davis, President</TD></TR>
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<TD VALIGN="top" COLSPAN="3"><B>BUYER:</B></TD></TR>
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<TD HEIGHT="16" COLSPAN="3"></TD></TR>
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<TD VALIGN="top" COLSPAN="3"><B>Citrus Energy Appalachia, LLC</B></TD></TR>
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<TD HEIGHT="16" COLSPAN="2"></TD></TR>
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<TD VALIGN="top">By:</TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-size:8pt">&nbsp;</FONT></TD>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000">/s/ Lance Peterson</TD></TR>
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<TD VALIGN="bottom"><FONT STYLE="font-size:8pt">&nbsp;</FONT></TD>
<TD VALIGN="bottom">Lance Peterson, President</TD></TR>
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<TD VALIGN="top" COLSPAN="3"><B>Troy Energy Investments, LLC</B></TD></TR>
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<TD HEIGHT="16" COLSPAN="2"></TD></TR>
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<TD VALIGN="top">By:</TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-size:8pt">&nbsp;</FONT></TD>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000">/s/ Tony S. Say</TD></TR>
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<TD VALIGN="bottom"><FONT STYLE="font-size:8pt">&nbsp;</FONT></TD>
<TD VALIGN="bottom">Tony S. Say, President</TD></TR>
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<TD VALIGN="top" COLSPAN="3"><B>Zena Energy, LLC</B></TD></TR>
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<TD HEIGHT="16" COLSPAN="2"></TD></TR>
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<TD VALIGN="top">By:</TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-size:8pt">&nbsp;</FONT></TD>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000">/s/ Tony M. Shelby</TD></TR>
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<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT STYLE="font-size:8pt">&nbsp;</FONT></TD>
<TD VALIGN="bottom">Tony M. Shelby, Vice President</TD></TR>
</TABLE></DIV>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B><U>EXHIBIT A </U></B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">(Leases) </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>[Please see attached]
</B></P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B><U>EXHIBIT B </U></B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">(Other Seller Property) </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>[Please see attached] </B></P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B><U>EXHIBIT C </U></B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">(Form of Lease Assignment) </P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B><U>EXHIBIT D </U></B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">(Form of Bill of Sale and Assignment) </P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B><U>EXHIBIT E </U></B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">(Form of LADA Termination) </P>
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